The economic development of a country is substantially reliant on the metal and mining sector, which forms the backbone of a wide range of industries—such as automotive, construction, energy, and electronics. In India, the primary metals sector accounts for about 8.1 per cent of the entire manufacturing segment, forming a vital source for crucial input materials. We also have rich natural reserves, producing a variety of essential minerals and energy resources, such as iron ore, bauxite, limestone, and coal.
The industry, however, leads to an estimated 4–7 per cent of worldwide greenhouse gas emissions, which makes it a priority sector to decarbonise. As the fastest growing economy, the challenge for India is harder—while the economy expands, per capita consumption increases too, exerting additional pressure on limited resources. While India moved one spot up to rank 7th in the Climate Change Performance Index 2024 as highlighted in COP28, the pace can be accelerated further. So how can the metal and mining sector ramp up production to match growth as well as transition towards sustainable practices amidst pressing climate concerns and environmental hazards? Let’s look into some options here.
Moving towards cleaner energy resources:
Rising dependencies on fossil fuels due to aggravated metal and mining production activities can adversely impact the environment. To ensure sustainability, stakeholders should consider transitioning towards greener energy sources. For instance, renewable energy solutions can be explored to power remote mining activities. This will not only help in reducing emissions but also eliminate certain operational hurdles, such as energy supply chain fluctuations, lack of a well-connected energy infrastructure and logistical inefficiencies. When it comes to green alternatives, adopting a resolution mindset can help companies bring constructive transformations. Advancing the renewable energy push by benchmarking and timely monitoring of progress can prevent any deacceleration trends—leading to substantial benefits and a wider impact in pursing sustainability objectives.
Such practices are already visible in some organisations. For instance, a coal mining company recently announced its plans to develop rooftop and ground-mounted solar projects with a 600 MW capacity to achieve its net-zero energy commitments. Further, another natural resources enterprise is ramping up its renewable energy sourcing to 1 GW to pace up its transition towards green energy for its operations.
While the momentum is strong, a complete transition towards renewable energy comes with a heavy initial cost burden, which prevents many businesses, especially mid- and small-sized ones, from transforming. For instance, according to a global study, to completely shift towards clean steel production, the steel industry will require an additional $278 billion in investments by 2050 compared to the business-as-usual growth scenario. Besides, to match the growing production patterns of the metal and mining sector, establishing stable supply of renewable energy at efficient prices will also need to be prioritised.
Smart approaches towards recycling and rehabilitation:
Resource scarcity and a depleting ecosystem are some primary concerns of the metal and mining industry in India. To ensure resource efficiency, the industry can incorporate strategies promoting circular economy. For instance, adopting recycling practices—such as re-mining to extract valuable metals from mining wastes—can be considered to minimise burden on new extraction activities. Focus can be laid on increasing the collection and processing of domestically procured metal scrap, which can help in reducing carbon footprints and maximising efficiency while simultaneously reducing import dependency. Although the government is taking several recycling initiatives, further accelerating incentivisation can encourage producers to increasingly adopt a sustainable value chain. Besides this, ramping up restoration of mined-out areas to re-establish biodiversity is another option. While mine reclamation initiatives—such as reforesting nearby areas, revival of natural waterbodies and construction of water reservoirs—can help in restoring the ecosystem, the cost of these should be budgeted optimally at the time of project commencement. Provisions surrounding reclamation projects, such as mine closure plans and financial assurance, can be further tightened and extended across all sectors. Taking cues from global best practices, India can further ensure stricter compliance of regulations. China and Canada, for instance, have rigorous norms surrounding sustainable mining, which can serve as a blueprint for future strategies.
Given the urgent need for transformative changes, some Indian industry organisations have introduced measures to promote sustainability. In 2021, for instance, a steel producer commissioned its first 0.5 MnTPA steel recycling plant; three of its production facilities also received the highly valued Responsible Steel Certification. With countries increasingly prioritising sustainable sourcing by establishing specific standards, obtaining such certifications can enhance the global competitiveness of Indian companies. The government too can promote these companies as priority exporters in export corridors, which would incentivise more firms to adopt sustainable measures.
Despite increasing efforts, India’s metal recycling rate, however, has been below the global benchmark. Corrective measures, such as expanding R&D to explore innovative ways of recycling, increasing awareness among industry players and promoting practices to encourage a closed-loop economy can be considered.
Ethical sourcing and supply chain sustainability:
Establishing sustainable supply chains is another important measure to promote ethical functioning of the metal and mining sector. Transforming mine-to-market value chains, though a complex task, can significantly reduce adverse environmental impacts. These include enhancing operational efficiency at each stage of production, improving visibility and transparency, ensuring the welfare of local communities and fair labour practices, and maximising efficiencies in inventory management and logistical strategies. Further, exploring supply chain efficiencies not only helps a company to meet its climate goals but also achieves cost reductions and increases profitability.
Way forward
Although there is growing consciousness in the metal and mining sector, boosting sustainable practices along with profitable operations will require sustained commitment. Addressing certain challenges, such as heavy initial investments, reducing fossil fuel dependencies and slower rates of technology adoption will be key for Indian industries to grow responsibly.
A version of this article was published on Jan 25, 2024 by Construction Week Online.
