Mercuria CSR Report 2021 - Flipbook - Page 60
Can you explain why higher environmental and social standards are
essential to produce the volumes of technology metals needed for the
clean energy transition?
Higher ESG compliance and lower carbon footprints are priorities not only because everyone would
like to operate in a sustainable, responsible, and ethical way, but because it is key to how our industry
needs to transform itself. And our industry being the metals and mining industry, as you alluded to,
clearly needs to radically transform itself in terms of scale. The industry needs to produce many, many
multiples of present global production of lithium, cobalt, nickel, and rare earth metals to feed the
demand driven by the energy transition. In order to do that responsibly, we need to radically transform
ourselves in terms of the reality and the perception of ESG compliance.
In terms of the reality, to be a responsible contributor to an electric vehicle (EV) revolution and to
an energy transition more broadly, one has to feed products into the technologies that facilitate this
transformation in a way that the retail-facing element of the transition can be comfortable that there
is an auditable, transparent, and independently verified change of custody through the pipeline. It
also requires a low carbon footprint that inputs into their own low carbon retail products. Increasingly
companies like BMW, GM and Tesla require it. Therefore, if you produce it with high standards then
you will have preferential access to markets and ultimately preferential pricing. It is a value driver of
our business to feed into the requirements of this massive global transformation in terms of how we
produce and use energy and mobility.
The other major driver of why our industry needs to transform itself from an ESG and carbon footprint
compliance point of view is that the fact we are not going to be able to achieve the scaling of our industry
without a lot more money and investment that is presently being applied. And part of where that
funding and investment needs to come from in order for us to triple, quadruple, or times ten the scale
of what we produce and process is from sources of funding that are ESG, impact investing and climate
change oriented. This is where perception matters. At the moment, they do not look at the mining and
metals industry because the assumption is that mining and metals are fundamentally negative from an
environmental impact point of view and from a responsible governance and community and political
interface point of view. And it is up to us, as Techmet, and others like us in our industry to prove that is
not the case. Mining can be low impact and responsible environmentally. And mining can be low impact,
in terms of carbon footprint, and can obviously be well governed and ethical at the same time.
On all of these fronts, the industry has to transform itself. Techmet seeks to be at the forefront of
the industry in terms of how we apply those standards to our projects and investments in order to
be part of that transformation: volume-wise, ESG and carbon footprint wise. The situation has
changed dramatically over the last few months in terms of security of supply chains, particularly of
critical minerals which is where we sit but also in the standards, in the governance and in the source of
financing that underpins the scaling of production. It is a very unique moment in history for the world
in terms of energy and for our industry in terms of what is required in order to build the technologies
and components that will enable that transformation.
For Techmet to accomplish these goals, who are the other stakeholders,
and what can they do, to help the industry scale in the right way as you
just described?
The primary drivers are availability of funding and the cost of capital – and therefore the banks and
investment institutions have to apply their minds on how to assess and to understand the mining
and metals industry in order to know what is compliant and what is not compliant in terms of their
standards, and hence what should be funded and supported versus a kind of blanket disinterest in
the industry’s elements of the energy transition, which is the largely the case today. The banks and
investment institution who want to engage in impact investing, ESG, climate change — which represents
hundreds of billions of dollars — generally do not want to look at mining and metals because either it
does not “tick the boxes” or they are not comfortable with how to assess compliance. This clearly has
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