Modern Mining February 2024

CRITICAL METALS

Navigating the path to 1.5°C The Paris Agreement’s call to keep the global temperature rise this century to well below 2 degrees Celsius (°C) and pursue efforts to limit it to 1.5°C, is a key aspiration for most countries. Modern Mining recently spoke to Rebecca Gordon, CEO of CRU Consulting, to find out just how the world was faring in meeting the goals outlined by the Paris Agreement. By Nelendhre Moodley .

“ I n terms of overall decarbonisation of the world economy, one could say we are grading ever closer to a ‘fair”,” says Gordon. “Progress has been made, but not enough to stay on that 2°C path. For example, CRU’s own emissions trend report shows that most commodities are on >3C path over the next decade. With regards to the energy transition specifically, we consider there to be three key phases and we are very much still in the first ‘low-hanging fruit’ phase.” (1) Low-hanging fruit – in this phase precedents are set by installing renewable energy where it is most welcome and most competitive: where the energy potential is high, the consumers nearby, and the jurisdiction enthusiastic. There are plenty of encouraging examples of this. (2) Mass energy transition – refers to priority large-scale investment to replace and upgrade infrastructure instigated through governmental action including public / private partnerships and cooperation across borders. (2) Final phase-outs and adjustments – these include reinforcements to the grid, and abating the sectors that are hardest to move across to low carbon. While the global political, economic, and social ecosystem may not be receiving top grades for decarbonisation currently, significant progress is being made, concedes Gordon. Global cumulative solar photovoltaic (PV) installations will surpass 1 500 GW by the end of 2023, with 400 GW of this installed in 2023 alone – more than 50% growth vs 2022.

Rebecca Gordon, CEO of CRU Consulting.

Copper is a critical commodity for advancing the decarbonisation agenda. “Solar accounted for just 5% of global electric ity production in 2023, but is growing rapidly,” says Gordon. “China dominates global solar installations and energy production, but PV is being installed across the world at scale, in India, the Middle East, the US, Europe and elsewhere, accompanied by strong financial commitments to rolling out green electricity generation capacity. There remains con siderable potential for further rollout of PV capacity, and this will need to be addressed rapidly to get close to the 2-degree scenario.” What is interesting, says Gordon, is that the regu latory commitment from governments to support renewable energy development and decarbonise industry has, to date, been mixed. Carbon pricing, for example, is becoming more common, as is the appetite in some consuming sections to pay pre miums for green materials to meet consumer or financing requirements. However, carbon market developments are predominantly located in high income countries and carbon prices are still too low to incentivise the necessary shift to clean technolo gies. However, we expect further government action will see prices push higher over coming years. “It is widely accepted that to decarbonise energy and industry fully and incentivise the final phase outs and adjustments phase, a carbon price must be present. Carbon pricing is still limited in scale (in that the price does not accurately reflect the real

14  MODERN MINING  February 2024