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The Natural Resources Sector in Transition: Paths to Sustainability

When we think of natural resources, most people think of coal, oil and gas, iron ore, copper and gold. Public perception is dominated by their importance in areas such as energy production, steel production and infrastructure – and traditionally, the commodities sector is associated primarily with the extraction of fossil fuels. This is one of the reasons the entire sector is the focus of public discussion – even apart from current events, which above all throw light on the web of international dependencies.

Author: Jens-Peter Lux, Managing Director, DMT GROUP

When we think of natural resources, most people think of coal, oil and gas, iron ore, copper and gold. Public perception is dominated by their importance in areas such as energy production, steel production and infrastructure – and traditionally, the commodities sector is associated primarily with the extraction of fossil fuels. This is one of the reasons the entire sector is the focus of public discussion – even apart from current events, which above all throw light on the web of international dependencies.

There is much less awareness of how much the natural resources extracted through mining now permeate all aspects of our modern lives. Many might be surprised about how many things that are taken for granted would not be possible without mining. This starts with building materials such as gravel and lime, or fertilizer for food production, and extends to the minerals that are indispensable for the mega topics of our time such as digitalization and the energy transition. These, in particular, are steadily gaining in importance and, as things stand today, are difficult or impossible to substitute; recycling cycles on an industrial scale are also still in their infancy.

The entire natural resources sector is under pressure like no other industry: the energy transition, availability, global supply chains, price developments and our own claim to constantly reduce environmental pollution are key concerns.

No future without natural resources

Mining is – contrary to what some populist readings might suggest – clearly an industry of the future. As such, it cannot avoid a central topic: sustainability. The industry ascribes to it a dominant role in the 21st Century. For mining and natural resources procurement, this means a profound change. This is why sustainability is also the focus of this year’s international MiningForum.

For one of the oldest sectors in the world, this is a considerable challenge, because one thing is clear: without the will to do business more sustainably, technological innovations and a cultural change, mining will have no future. Europe, among others, is already taking a pioneering role here. Good progress is already being made with early citizen participation, fair burden sharing and the use of state-of-the-art technologies to protect people and nature.

Our aspiration goes even further, however. The sector must work to ensure that, on the one hand, the existing possibilities become the standard as far as possible everywhere and, on the other hand, are always being further developed. The natural resources sector has the potential to become a cross-sectoral pioneer, especially in environmental protection.

Without natural resources procurement, the future of humanity is uncertain. At the same time, we need to minimize its impact on people and nature. The task now is to realise the change towards sustainability.

This includes the ability to answer central questions such as: which natural resources can or must be extracted at all in the future? How can this be done according to the ESG (Environmental, Social, Government) criteria? And since the pandemic and the most recent geopolitical tensions, how can international supply chains be made more resilient and one-sided dependencies be avoided?

To be able to answer these, it is important to understand that almost everything today is interconnected and interrelated. The mining industry must develop such an understanding and implement it on a broad basis. Many players still have room for improvement here – and the following applies: those who move first may take a risk in the short-term – but have clear advantages in the long-term. After all, only those who operate sustainably will ultimately succeed in the long-term.

Assuming social responsibility

Sustainability also refers to corporate social responsibility. For the natural resources sector, this means creating the best possible working conditions. It also means broadening the social perspective on projects and ensuring all stakeholders are involved – not only industry representatives and politicians, but also citizens, communities and environmental associations. This alone does not solve any concrete problems, but it can make a decisive contribution. In future, for example, more value creation should take place at the site of natural resources extraction in order to involve the local population more – which will increase the acceptance of companies and make it clear that they are taking their social responsibility seriously. In addition, providing detailed information and giving local communities a say are important. Ideally, projects can be improved for all sides through participation measures.

Apart from this, large corporations as well as smaller companies have now understood that focusing purely on short-term profit maximisation does not bring them any real advantage in the long run and can even remove them from the market – representing the opposite of sustainability. This not only affects the environment and the people concerned, but also their image and credibility. Since the mining industry in particular already faces reputational challenges with many citizens, it is not only a matter of action, but also of transparency from those industry representatives who are in the public eye.

Understanding sustainability holistically

Sustainability must be seen holistically – and this concerns strategies and communication just as much as processes and technologies. In traditional mining, for example, this would mean transparency in natural resources extraction and supply chains and demonstrating that all legal requirements in countries of origin and processing have been implemented and complied with at the highest standards. Social conditions in the extraction of natural resources should also not only meet the requirements, but at best go beyond them.

In addition, the supply chains themselves must also evolve and more and more green technologies must be used in the development, extraction and processing of natural resources. “Holism” is essential because it is necessary to think through and plan every project – whether greenfield or brownfield – in all aspects from the very beginning to its ultimate dismantling and renaturation. This is precisely where Germany has a head start: the country’s post-mining sector is highly developed. Intensive research is being conducted into how geothermal energy can be used in groundwater after a mine has been closed down, for instance.

Sustainability made in Germany

The DMT GROUP has a dedicated sustainability strategy. This involves details such as resource-sensitive behavior in everyday work and ways to shape our overall social effects as positively as possible. However, we also see ourselves as drivers of change through more sophisticated technical solutions. As a service provider to the industry, DMT in particular has many opportunities and levers to accelerate development – not least by using our expertise to help customers become more sustainable themselves: we are experts in the use of hydrogen and are exploring the geothermal potential across Europe.

Together with TÜV NORD, we are developing the first certification system for sustainability of natural resources along complete value chains. We further advise governments on the design of legislative frameworks for sustainable mining and also evaluate projects for banks, insurance companies and investors from a sustainability perspective. In this way, we drive the sustainability of the sector at all relevant levels from adaptation to new requirements, to technical implementation, as well as from the legal framework to the field of sustainable finance.

Here, more than anywhere else, it is true that where the know-how is located, there are also the greatest opportunities to achieve truly relevant results. Germany’s pioneering role in this field is both an opportunity and an obligation. Through the ongoing development of our fields of activity and business areas, we succeed in combining sustainability and value creation.

Whether it’s sustainability in reporting with the corresponding standardization or the proactive involvement of all those involved or affected, many things that seemed hard to imagine ten or twenty years ago are already reality today. And it shows one thing above all: the industry has understood and accepted its responsibility. Understanding complex interrelationships is part of the industry’s DNA – and can thus also provide valuable direction for other sectors.

Making the switch – with smart technologies

It is about nothing less than making the transition towards a more environmentally sound use of resources from exploration, extraction and processing through the supply chain to the final product. Natural resources with a poor environmental balance will hardly be marketable in the future, especially as new, highly agile players are entering the field and putting many a top dog in a tight spot.

Technologies have an important role to play. Fully automated mining – already a reality in many places – and the massive use of digital solutions increase safety and efficiency. The best available technologies are also decisive in the use of minimally invasive mining methods.

Digital solution approaches come into play at all levels of value creation – such as analyses in the context of development, and seismic ground tests in the respective regions. Whether exploration, mining, monitoring or predictive maintenance, modern technology creates opportunities. However, it is increasingly important to handle the data in a smart way in order to avoid data overkill and instead generate tangible, sustainable added value from the analyses.

Industry in dialogue – understanding complex interrelationships, and exploiting opportunities

Openly discussing and sharing these use cases and emerging trends as an industry is critical. Events such as the international MiningForum offer a well-suited platform for this: comprehensive stakeholder networks can be established and cultivated – and, above all, the most urgent questions of the day can be discussed. These include: How can access to natural resources be secured for all people in a sustainable and stable manner? And kow can availability be guaranteed so that ambitious projects such as the electrified transport transition can be realised?

In doing so, the participants of the forum act at a considerable “flying height”, ensuring a 360-degree perspective on all relevant topics – and also making the event a role model that can set an example for other industries.

The MiningForum takes place on the 19th and 20th May at the Estrel Berlin.

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