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Bechtel’s Impact Report

Mining & metals: On the critical path to net zero

  • By
    portrait of Corey McGovern
    Corey McGovern, Head of Strategy and Business Development, Mining & Metals
  • 05 December 2022

When people consider what’s required to reach net zero by 2050, most immediately think of solar, wind, electric vehicles, and hydrogen – the key technologies required to achieve energy transition and decarbonization. Fewer people think about mining and the availability of the critical metals needed to deliver these technologies at the required scale.   

At Bechtel, we deliver big projects. And when we think about our contribution towards solving global challenges we often do so with a project mindset. Anybody who has ever delivered a project knows the importance of managing the critical path – the sequence of dependent tasks from start to finish that determine the project timeline.

The mining and metals industry is on the critical path to net zero. In what is perhaps the great paradox of energy transition, one of the biggest risks to achieving net zero by 2050 is the lack of metals needed to transform the world’s energy system, which can only come from a lot more mining. Expediting delivery of the industry’s pipeline of growth projects is essential to maintaining our net zero schedule.

Unprecedented demand for metals

The age-old adage goes “if you can’t grow it, you have to mine it.” With the advent of technology enabling growth of the circular economy, increasingly today we are also recycling. But the research is in, and it’s clear. Though we might speculate on the timing, governments, consultants, and companies alike agree global consumption is increasing at a rate that is driving unprecedented demand for metals, even accounting for the substantial projected increase in recycling. Industry analysts estimate a five-fold increase in base metal supply is needed to meet the Paris Agreement, requiring an investment of around $2 trillion.

Phrases like ‘New economy minerals’ and ‘Future-facing commodities’ are designed to help communicate the fact that the world needs exponentially more copper, aluminum, lithium, nickel, and other rare earth elements to decarbonize the power grid and turbocharge electromobility – and all by 2050. These trends are in addition to sustained demand growth from global urbanization that drove the last mining super cycle, and resource depletion and ore grade decline which are inherent in the industry and only exasperate the challenge.

In theory there is sufficient demand stimulus in the market to drive investment. What remains unclear, however, is the timing of the supply-side response and this requires a paradigm shift.

Public support and political will

When President Kennedy announced in 1961 that man would be on the moon by the end of the decade he inspired a movement. Public support and political will converged with industry and labor to achieve the extraordinary. Reaching net zero by 2050 is the moonshot of our time and requires similar leadership, policy alignment and regulatory certainty to stimulate the necessary mining investment.

Yet despite the average person in western society surrounding themselves with modern day amenities derived from primary metals, mining by and large remains a dirty word and the role of the mining industry in achieving net zero is not widely understood.

The fact remains without a miraculous reversal in global consumption, which by almost any leading indicator is unlikely, unless there is a significant increase in mining the world’s climate crisis cannot be averted. Put simply #nometalsnotransition.

Sustainability is the unlocker of the industry

To win widespread public support and rightfully take its place as the critical enabler of energy transition, the mining industry itself needs to rapidly decarbonize and improve its ESG credentials. Encouragingly, environmental and social risks now rank at the top of the list for global mining executives.

Industry bodies such as the International Council on Mining & Metals (ICMM) provides a leading forum for mining CEOs to come together and collectively demonstrate their ESG leadership. In 2021, one third of the world’s preeminent mining CEOs collectively committed to achieving net zero by 2050, and individually, many set more aggressive targets backed by robust capital budgets to ensure they deliver.

In addition to investments by major miners, engineering and construction companies like Bechtel are investing in decarbonization and energy transition centers of excellences with talented engineers dedicated to developing the flowsheets and facilities of the future. They are busy designing mining infrastructure that produces less GHG emissions, are more power efficient, produces less waste and have more sustainable water solutions.

But industry decarbonization must occur in parallel with global decarbonization. 2050 is just around the corner and the science suggests the consequences of waiting are too dire.

What it will take to get there

From a practical standpoint, it will take hundreds of thousands of people deployed to some of the harshest environments on earth, charged with responsibly unlocking the resources needed to deliver a cleaner, greener future.

Take Teck’s QB2 for example, one of the largest copper projects in construction today that Bechtel is delivering at 4,300m above sea level on top of the Chilean Andes. The project is a true mega-project requiring billions of dollars in capital and years in project development, permitting, design and delivery.

At completion, QB2 is expected to generate 316,000 tonnes of copper-equivalent production per year for the first five full years of mine life. Based on today’s copper forecasts, the world needs another thirty QB2-sized copper projects in the next decade to meet net zero demand.  

Delivering net zero by 2050 is not a project that can be shelved, or schedule that can be reforecast. Let’s collectively manage the critical path and make sure the mining industry delivers the metals needed to enable the transition. Future generations are depending on it.

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