At the current rate of emissions reduction, mining companies risk falling 40% short of the target needed to limit global warming to 1.5°C by 2030, as outlined in the Paris Agreement. This alarming prediction comes from a new report published by dss+, following a survey of 52 mining companies that highlights a significant gap between their stated ambitions and actual progress.

The report, titled "Decarbonising Mining in an Era of Growing Demand for Critical Metals and Minerals," reveals that mining companies reduced their emissions at an average annual rate of just 2% between 2018 and 2021. This rate, while still relevant, is far below the 4.5% reduction required to meet the sector's climate targets (see chart below).

The report attributes the gap to several structural factors, including declining ore quality, which forces operators to intensify extraction efforts and increases energy demands for ventilation and cooling in deep mines. Additionally, monitoring emissions particularly Scope 3 emissions generated downstream from transportation or processing remains a challenge. These emissions can account for up to 60% of the sector's total greenhouse gas output but are often overlooked in companies' decarbonization strategies. Executives interviewed by dss+ also cited fragmented decision-making across sites and insufficient emissions monitoring as obstacles to effective decarbonization, alongside policies that lack incentives for investment in clean technologies.

The dss+ report is not the first to raise concerns about the mining sector's slow progress in decarbonization. Data from some companies indicate stagnant results in emissions reduction. For instance, Rio Tinto reported Scope 1 and 2 emissions of 32.6 megatonnes in 2023, slightly down from 32.7 megatonnes in 2022 (adjusted for acquisitions). BHP also noted a slight increase in emissions, rising from 9.1 megatonnes in 2023 to 9.2 megatonnes in fiscal 2024.

Other organizations have highlighted the paradox facing the industry: it must meet the rising demand for critical metals necessary for the energy transition while simultaneously reducing its emissions. In a report titled "The Net Zero Roadmap to 2050," the International Finance Corporation (IFC) projected that copper and nickel production would need to increase by 200-300% by 2050 to meet climate targets, yet CO₂ emissions from their value chains could double.

In response to these challenges, solutions are emerging to accelerate decarbonization efforts and meet climate expectations. dss+ advocates for greater transparency in annual emissions reporting, emphasizing the need to account for Scope 3 emissions more effectively. Additionally, they recommend developing structured decarbonization plans and improving energy supply. The firm suggests adopting internal carbon pricing a concept where companies assign a virtual cost to CO₂ emissions, motivating them to reduce this cost through optimized financial decisions.

These proposals align with those suggested by the IFC, which aims to reduce emissions from the copper and nickel sectors by 90% by 2050 through transformative changes in their value chains. The IFC recommends adopting renewable energy sources, electrifying equipment, optimizing processes for energy efficiency, and leveraging automation and digitization to minimize inefficiencies. Proactive management of residual emissions through carbon offsets and CO₂ capture technologies is also crucial, along with fostering collaboration among companies, governments, and investors.

There is currently little evidence suggesting that these proposals are practically feasible or enough to transform an industry that is vital for the global energy transition but continues to emit excessive greenhouse gases. According to multiple sources, including Globaldata and McKinsey, the mining sector is one of the highest-emitting industries globally, accounting for between 4% and 7% of direct greenhouse gas emissions. When including downstream Scope 3 emissions, this figure rises significantly—up to 28% or approximately 19,440 megatons of carbon dioxide equivalent.

Successfully decarbonizing the mining sector will ultimately depend on the commitment of industry players and political leaders to overcome existing structural and financial barriers.

Louis-Nino Kansoun, Ecofin Agency

Jean-Lucien Bussa, Portfolio Minister of the Democratic Republic of Congo (DRC) accused Kamoa Copper of selling its copper concentrate output below market prices. Kamoa Copper operates the country’s largest copper mine, Kamoa-Kakula. The official stated this in Kinshasa, during the General Assembly of State Companies, held from December 9 to 14.

According to Agence Congolaise de Presse, which reported Minister Bussa’s claims, Kamoa Copper sells below market prices due to the dominant position of one of the buyers, Zijin Mining Group. Indeed, Zijin Mining Group owns 39.6% of Kamoa Copper, alongside Ivanhoe Mines (39.6%), Crystal River (0.8%), and the Congolese State (20%). Zijin is also one of Ivanhoe’s top shareholders. 

Zijin Mining buys the Kamoa-Kakula copper through a subsidiary, Gold Mountains (H.K.) International Mining Company Limited. The other firm buying copper concentrate from this project is CITIC Metal (HK). This was known via a communiqué issued in June 2021. According to this source, the two Hong Kong-based companies buy the production of the first concentrator set up at Kamoa-Kakula. Since June 21, no details filtered regarding new buyers. Meanwhile, two more concentrators have been commissioned over the period.

Although the price of copper concentrate cannot be directly compared to pure copper prices on the global market, the year-on-year percentage increase raises concerns, particularly given that copper prices have surged more significantly this year. After remaining below $9,000 per tonne throughout 2023 and the first two months of 2024, copper prices soared to a record high of over $11,000 in May. Despite some corrections and fluctuations since then, copper continues to trade above the $9,000 mark.

The discrepancy between Kamoa Copper's concentrate pricing and market trends prompts scrutiny. While Ivanhoe Mines reported that Kamoa-Kakula generated $2.263 billion in revenue from 303,328 tonnes of copper concentrate at an average realized price of approximately $7,461 per tonne for the first nine months of 2024—up 7.8% from the previous year—this figure does not reflect the broader market dynamics.

Regarding Minister Bussa’s assertion about Kamoa selling below market prices, the official said the State would now get involved in the sales process: "From now on, the buyer selection process will be carried out with the involvement of the State shareholder. This will enable us to sell at the market price and optimize sales,” he declared. 

The goal is to maximize the DRC's mining revenues and profits. However, Bussa did not specify what the State’s involvement would encompass and how they would proceed. For now, Kamoa Copper has not commented on the government’s accusations or its decision to get involved in sales operations.

This article was initially published in French by Louis-Nino Kansoun

Edited in English by Ola S. Akinocho

US-based Namib Minerals should soon complete its listing on the Nasdaq stock market, according to statement dated December 9, 2024. The listing is expected to grant the mining company full ownership of the mining and exploration assets of Greenstone, a private equity fund specializing in the mining sector.

The exploration assets include 13 licenses in the Haut-Katanga and Lualaba provinces of the Democratic Republic of Congo (DRC), where six initial drill holes have already been completed, indicating significant copper and cobalt potential. Namib Minerals aims to leverage its upcoming IPO to secure additional funding for exploration works.

The company's interest in the DRC emerges amidst a rising long-term demand for copper, driven by the energy transition. According to BHP, this transition should push up demand for copper by one million tonnes annually until 2035. 

The DRC, the world's second-largest copper producer, holds substantial potential for new discoveries; by 2023, it accounted for 65% of the world's newly identified copper reserves.

Currently, Namib Minerals has not disclosed specific details about its exploration programs in the DRC. For now, the firm focuses on finalizing its merger with SPAC Hennessy Capital Investment Corp. VI. Under the deal these two firms sealed in June 2024, Namib will sell 30 million of its shares for $500 million. This transaction is expected to close in the first quarter of 2025, pending necessary approvals.

Namib Minerals' flagship assets include three gold mines in Zimbabwe. One of them has produced 1.8 million ounces from 1941 to 2023.

PM with Ecofin Agency

On December 10, 2024, Gary Nagle, Glencore CEO,  met with Félix-Antoine Tshisekedi, President of the Democratic Republic of Congo (DRC).  The two men discussed Glencore's contributions to the Congolese economy. "We employ more than 17,000 people in the DRC and we have a community project worth more than US$100 million," Nagle said, as reported by the DRC presidency's communication services. He added that President Tshisekedi supported Glencore's initiatives and agreed on the importance of collaborating to improve the situation in the DRC while defending their respective interests.

While these are the only details disclosed from the meeting, the mention of mutual interest comes at a time when Kamoto Copper Company (KCC), a subsidiary of Glencore that is 75% owned by the group and 25% by Gécamines (the state-owned mining company), is facing a tax adjustment of approximately $895 million by the Tax Authority, the DGRAD. Earlier communications from Glencore indicated that DRC tax authorities contested KCC's declared sales and expenses, leading to customs claims for non-compliance. The Swiss company had noted ongoing discussions with tax authorities to defend its position, but no updates have been provided.

For Glencore, resolving this tax dispute is critical. Management has indicated that prolonged uncertainty or an unfavorable ruling could significantly impact the group's financial results for the current year. This situation is exacerbated by a reported decline in production levels at KCC's various sites, with copper production down by 18% and cobalt production down by 21% at the end of the third quarter of 2024.

The outcome of these discussions between Glencore and the DRC government may play a crucial role in addressing both the company's operational challenges and its ongoing commitments to local economic development.

This article was initially published in French, by Georges Auréole Bamba.

Edited in English by Ola Schad Akinocho