The mining industry plays a crucial role in providing essential materials for modern society, contributing to the circular economy and supporting a net-zero future.

Demand for these minerals is expected to increase by up to 6x by 2040  to meet the needs of global clean energy technology (copper for electric grids, silver for solar, etc.). This aligns with the Sustainable Development Goals (SDGs) and promoting ESG principles in the sector.

The industry thus faces a dual challenge: meeting the growing needs for critical minerals to support the clean energy transition while reducing its carbon footprint. As the mining industry faces increasing scrutiny and pressure to operate sustainably, companies that employ innovative and sustainable practices are better positioned to create long-term value). 

The mining sector is responsible for an estimated 4-7% of greenhouse gas (GHG) emissions globally, which can be broken down into three scopes of emissions:

• Scope 1: Direct emissions from owned or controlled sources
• Scope 2: Indirect emissions from purchased electricity
• Scope 3: All other indirect emissions in the metals value chain, not necessarily related to mining itself

Notably, 90% of Scope 1 and 2 emissions, which include direct operations and power consumption, come from fugitive methane associated with coal mining, a subsector that has nothing to do with metal mining that produces the minerals needed for a clean energy transition. Meanwhile, Scope 3 emissions, encompassing all other indirect emissions, represent the largest portion of the sector’s carbon footprint.

Increasingly, investors and mining companies are prioritizing sustainability to manage climate risks and capture opportunities for long-term value in a low-carbon economy.

The Importance of Reducing Scope 3 Emissions

While companies have more direct control over Scope 1 and 2 emissions, the significant contribution of Scope 3 emissions underscores the need for collaboration across the entire value chain. In the mining sector, addressing Scope 3 emissions is especially crucial, as these indirect emissions often represent the largest portion of a company’s carbon footprint.

According to the International Council on Mining and Metals (ICMM), Scope 3 emissions account for a significant portion – between 75% and 95% – of any mining company’s overall emissions. This statistic highlights the importance of addressing Scope 3 emissions in the mining sector. 

These emissions primarily arise from various activities, including:

• Transportation: Emissions generated while transporting raw materials and finished products
• Processing: Emissions resulting from the processing and utilization of mined products, particularly in energy-intensive industries such as steelmaking
• Use of Sold Products: Emissions associated with the end-use of products derived from mining operations

For example, smelting operations, often located away from mining sites, contribute significantly to a mining company’s Scope 3 emissions. The transportation of raw materials from mines to smelters is another key component of these emissions.

Given this context, it becomes clear that managing Scope 3 emissions requires a collaborative approach involving suppliers, customers, and logistics partners to minimize emissions across the entire value chain. 

Silvercorp Metals

TSX/NYSE-A:SVM

Company Spotlight: a Case Study

Silvercorp Metals Inc (TSX/NYSE-A:SVM), a leading Canadian silver producer, is committed to responsible mining practices that support clean energy technologies, particularly solar energy. The company demonstrates how its operations in China help reduce Scope 3 emissions associated with every ounce of silver produced, particularly in transportation and manufacturing inputs.

Silvercorp’s Ying Mining District benefits from operational advantages that support the reduction of Scope 3 emissions:

Proximity to smelters: The Ying operations benefit from six smelters within a 200 km radius, minimizing transport-related emissions. By leveraging China’s robust infrastructure and proximity to key markets, Silvercorp reduces transportation-related emissions, a major component of Scope 3.

Production of high grade concentrates: Silvercorp produces higher-grade concentrates, which enhances smelting efficiency and reduces energy consumption during downstream processing. This improves operational efficiency and contributes to lower Scope 3 emissions by minimizing the energy required for processing.

However, Silvercorp’s commitment to sustainability extends beyond emissions reduction: 

• achieved an 85% water recycling rate at processing plants, a 4% increase from their 2020 baseline
• retained the government’s “Green Mines” certification for all of its operating mines
• invested US$2.34 million in environmental protection in the fiscal year 2024
• donated US$3.2 million for community development support

By addressing Scope 1, 2, and 3 emissions, along with implementing various environmental and social initiatives, Silvercorp delivers on its comprehensive strategy for sustainable mining practices. This approach not only aligns with the broader industry trend of integrating sustainability into core business operations but also contributes to the global effort to achieve the United Nations’ Sustainable Development Goals. 

In conclusion, as the demand for clean energy minerals rises, the mining industry must balance economic growth with environmental responsibility. 

Proactive measures to reduce Scope 1, 2, and particularly Scope 3 emissions are critical. 

Companies like Silvercorp Metals exemplify how strategic environmental management can coexist with economic growth, showcasing that sustainable mining is possible and beneficial for the planet and future generations.