Daily Times

‘Discovery’ happens when something new is found, and finding a ‘new use’ of an old discovery also falls into the same category. ‘Cu’ commonly known as copper, is the oldest metal known to man and was perhaps the first to reach the smelter to kick-start the industrial era. The world seems to have completed a circle and copper is back to launch what the world is now calling the era of green energy.

The first ‘Pakistan Minerals Summit- from Dust to Development’-Investment Opportunities in Pakistan – is all set for August 1st, 2023 in collaboration with the Special Investment Facilitation Council (SIFC) and Barrick (Barrick Gold Corporation), facilitated by the Ministry of Petroleum. This makes me extremely happy as Pakistan’s rich mineral wealth had been sidelined in pursuit of other goals and to see the attention back to the rich reserves is a great confirmation of rights steps forward.

Pakistan is fortunate to be an ecological part of the great Tethyan Magmatic Arc, extending through central and southeast Europe to Turkey, Iran, and Pakistan and going beyond the Himalayan region into Myanmar, Malaysia, and Indonesia. The Tethyian belt contains a wealth of large copper-gold ore deposits of varying grades, and because the population is sparse and more nomadic, it is ideal for the mining sector for the low environmental impact of mining activities. The discussion on our fortune for being a geological part of the Tethyan belt with rich copper reserves may take a separate article altogether. My ambit today, however, will be more global, to understand why Critical Minerals (CM), especially copper, will be the drivers of economic growth and how the world is looking at the next decade to bring down the carbon footprint and increase the health factor of its bio-diversity. The need to understand where we fit into the evolving dynamics of green energy is essential.

The growth of electronics and the construction of green energy resources (wind, solar, geothermal) require extensive amounts of copper and its alloys for the infrastructure. Copper optimizes the performance of products that contain it, saving energy, lives, and money. Copper is part of the critical minerals list and therefore will be an active agent shaping the economies in the next decade. Why the shift to critical minerals all of a sudden? Since the start of the millennium, the world seemed comfortable with the conservative, barriers-laden approach towards the mining industry. Interestingly, the dominating trends were about climate change and the adverse impact of dependency on fossil fuels yet the stakeholders continued with a Rip Van Winkle attitude when it came to mining for alternatives. The equation seems to have been clarified in the last few years but with an inbuilt dichotomy of increased demand, and low supply combined with Environmental Social & Governance (ESG) concerns.

Awakening of the Green Energy demand: ‘Climate crises are real’ and Paris Climate Goals have highlighted the need for global leadership to be on one page for the reduction of temperatures and net-zero-emission targets. The entire path will have to come from the abatement of fossil fuels and boosting of electrification and renewable energy. As the most cost-effective conductive material, copper sits at the heart of capturing, storing, and transporting these new sources of energy. Goldman Sachs Research analysts argue that green metals – copper in particular – are critical to moving the global economy toward net zero emissions.

The supply side is non-reactive: Nicholas Snowdon, Portfolio Strategist, Goldman Sachs; in his podcast referred to the price collapse of the mining sector post-2010, Covid-19’s operational and supply chains disruptions, the conformity requirement of ESG and the need for heavy investments, as challenges that kept the exploration and mining industry held in a conservative mode for the last couple of decades. He also mentioned how his interaction with global leadership saw no headway in new projects and for that, he shared his analysis of a possible future crunch in supply, and inflationary costs in the next decade.

Electrification and net-zero carbonization are the two agendas for the world working towards 2050 as the year to mark the transition. Climate crises may have ruled the talks and discussions but it would be suffice to say that until the last couple of years, it was more theoretical than action. The green movements have been in action since the last three decades of the 20th century but it is only now that green energy is being integrated as policy by dominant economies like the USA and China.

China perhaps the most active of economies on green energy is focused on building supply chain resiliency through various measures, especially the Belt Road Initiative (BRI). President Biden of the USA invoked the ‘Defense Production Act’ for greater access to mining for critical minerals on US soil.

How ready are we to say goodbye to fossil fuels will perhaps not matter as it may not be an option. The new trend in developing economies across the globe is shifting away from oil and gas and replacing it with technology-driven initiatives. To compound this fact further, a glance at the chart for ‘Critical Minerals Deals Surge’ will show you Gold at 70% and Critical Minerals at 27% for 2021, Critical Minerals at 66% and Gold at 34% in 2022, and Copper alone sitting at 85% and all others at 15% in 2023. I feel that Snowdon’s assessment of an insufficient focus on securing the resources required to build new, sustainable, energy infrastructure needs to serve as a guideline for the minerals’ policy infrastructure. “As we have long argued, moving the global economy toward net zero emissions remains a core driver of the structural bull market in commodities demand, in which green metals – copper in particular – are critical.”

Critical Minerals, called so for the gap in their demand and reserves, will be in high demand but most of them can be swapped (if need be) – not so when it comes to copper – it is indispensable because it is the KEY for electrification. It is a transition metal with a single valence election, giving it the properties that make copper the first-best affordable material for use in cables, batteries, transistors, and inverters – all key technologies on the path to net zero. Copper’s ductility makes it compatible with Gold and Silver for its single valence electron – and if not copper, our other alternative would be gold and silver which I think is bordering on a fairy tale narrative. Nevertheless, Copper’s story is no less. Secondly, its 3-dimensional electrical conductivity is excellent, and so is its thermal conductivity. And finally for its Low reactivity that ensures minimal corrosion, Copper is our best friend in the climate-friendly world under construction.

While strategic alliances, policy-making, and funding options will be needed to strengthen the Mining industry – whether it is signing up for the Critical Minerals Club of the USA, striking a collaborative deal like that of Critical Minerals Cooperation between India and Australia, or US-Japan Critical Minerals Agreement – each developing economy will need to partner and work together. Canada, The United Kingdom, European Union, and Australia have rolled out possible legislative steps, towards consolidating the policy framework for land and seabed explorations. This is where SIFC stands to facilitate collaborative models for Pakistan, and alleviate the procedural concerns of FDI to expedite the investment projects, with a one-window solution for all regulatory frameworks and on-ground support.

With Environmental Social & Governance (ESG) compliance taking over the mining sector too, Original Equipment Manufacturers (OEMs) are invested in mechanics for an environmentally green mining industry which may just shift the power dynamics from buyers to sellers. The bottom line is that ‘Minerals ‘are positioned to be the face of the transition of the globe from climate challenged to climate-friendly and copper is the poster child of the shifting dynamics. Our 5th largest copper reserves can play a significant role in Pakistan’s positioning among the top providers of raw materials for clean energy. Fortunately, SIFC’s enablement for incoming investments is a sure pathway to progress for Pakistan. We will need further consolidation in the critical minerals space, more efforts by miners and non-miners alike, secure supply chains, strategic alliances, and strong governmental action in collaboration with SIFC, to take Pakistan to a dominant role in the Green Energy Planet.

The writer is an educationist, communication specialist and director with Heritage Foundation Pakistan. She tweets @shahaJamshed.