The world economy is at a crossroads. While more and more people are calling for the electrification of transportation and an energy transition, the mining projects upon which this transition depends are suffering from political instability that keeps putting them in peril. In a ranking of the biggest threats facing the mining industry, geopolitics takes second place, just behind the imposition of environmental, social, and corporate governance (ESG) criteria.
In the same survey, 72% of miners said they were worried that governments would increase mining royalties in order to reduce the budget deficits ramped up during the pandemic, while 76% of respondents were afraid that the introduction of ESG criteria would limit mining development by restricting companies’ access to water.
We therefore find ourselves in a strange situation, with measures supposedly intended to protect the environment that end up undermining the energy transition—not to mention measures aimed at plugging budgetary holes that risk destroying an industry that already fills government coffers with royalties and with well-paid (and thus highly-taxed) jobs. It shouldn’t need to be said, but you can’t help the environment by blocking the development of materials that are essential to electrification, and you can’t balance a budget by overtaxing companies into bankruptcy.