Thanks, Dr. Birol, and thanks Secretary Granholm, Minister Tasrif, Commissioner Breton, Secretary Rao and Minister Rakotomalala on your considerate remarks.
Dr Birol, the IEA have to be counseled on your work on deepening our understanding of the potential international decarbonisation pathways, together with underneath a Paris-aligned 1.5 diploma state of affairs, in addition to for elevating consciousness of the important function of minerals and metals within the vitality transition and for vitality safety.
And thanks, Fatih, for the chance to be right here for this dialogue and to share an upstream perspective as a world metals and minerals provider.
We’re right here as we speak in recognition of the truth that the world must considerably scale up provide of sure minerals. This want is pushed not solely by the historic drivers of urbanisation, industrialisation and inhabitants progress, but additionally by the newer drive to decarbonise the world’s vitality system, which, in itself, goes to require considerably extra of sure commodities, like copper, nickel, lithium and even steelmaking uncooked supplies.
However within the face of this want, the world is encountering some rising challenges. That is going to be arduous.
The grade, or proportion of metallic in a given quantity of ore, is falling at current operations. And this implies extra ore must be mined simply to face nonetheless.
Newly found and developed deposits are, on common, incrementally decrease grade as effectively.
They’re more and more arduous to search out, oftentimes deeper, and oftentimes smaller.
Alternatives are being pursued in jurisdictions with much less established mining industries, establishments and governance.
And, in fact, societal expectations in respect of ESG and the way worth will get created for all stakeholders has grown – and rightly so.
These difficulties and rising expectations have some crucial implications.
Firstly, collaboration goes to be ever extra essential.
We should work collectively to go about this in the best means – guided by widespread international requirements, and with good governance, all through the entire of the worth chain.
Secondly, this effort goes to require a big and rising quantum of capital.
I’ll use the instance of however one of many commodities wanted, which is copper. BHP’s estimate is that underneath a believable 1.5 diploma state of affairs, the copper trade may require round 250 billion US {dollars} in progress capital over the following seven years to 2030, and that’s over and above sustaining capital.
However at the moment dedicated progress tasks over this era solely quantity to round 40 or 50 billion US {dollars} as we speak.
Extra tasks have to be recognized, permitted and given the inexperienced gentle by those that are to put money into them. Governments and communities have to be supportive of those tasks progressing and capital suppliers have to be flowing the capital to these corporations that uphold the excessive ESG requirements that have to be met.
These challenges might be overcome, however it can require shared perspective, widespread aspiration and a excessive diploma of collaboration.
Now let me be a bit extra particular about what’s wanted.
Governments should present predictability and stability to draw capital at lowest doable price and as rapidly as doable.
This implies steady fiscal settings, streamlined planning and allowing processes and harmonised requirements. At the moment, too usually we nonetheless see short-termism in authorities coverage, or insurance policies which search to fulfill close to time period political goals, however which present restricted understanding of what drives funding. And this slows up deployment of capital and can finally make the vitality transition more durable and dearer. The flip aspect in fact is that governments that do present this certainty and stability would be the winners on this race to fulfill the world’s want for important minerals.
We must also be conscious of the truth that whereas subsidies can in some cases assist to speed up, they’ll additionally distort markets and, dealt with poorly, can inadvertently truly undermine our long-term purpose of securing adequate and low-cost provide.
Capital markets ought to work in a means that promotes the target of low-cost and steady provide, and certainly makes use of their firepower, to allow – or to constrain – entry to capital.
My third level is accountability. Get these settings proper, and the extra accountable the venture, the extra capital ought to move. Miners ought to be granted entry to assets primarily based on the worth they create, together with for host communities and First Nations Peoples.
Opening a mine, finished effectively, creates sustainable wealth and jobs. It brings tax revenues, which in flip fund public providers, like well being and training. It creates jobs, each instantly and not directly. And it generates a base of abilities that may be leveraged into different industries.
However in fact this have to be finished with least doable affect to the surroundings. We’d like a small set of widespread requirements, upheld by all, and the place efficiency in opposition to these requirements is a better determinant and growing determinant of entry to capital. I believe the functioning of the market on this regard remains to be maturing. We even have too many requirements for a similar ESG dimensions, this results in confusion and dissipated effort. Convergence on this entrance could be welcome – it could end in extra centered effort, for increased constructive affect.
We should additionally not lose the chance to enhance pure assets governance throughout the board, in order that nations endowed with assets see financial worth trickle down. Key to pure assets governance are insurance policies resembling transparency round taxes paid, robust anti-corruption frameworks and transparency round approvals processes. And I commend the EITI for its work on this entrance.
It could be remiss of me, in fact, if I didn’t point out recycling. Whereas recognising that some metals are ranging from an already excessive base, there is a chance and want for continued lifting of the charges of recycling to cut back the necessity for contemporary metallic items, and subsequently the quantity of mining required. It’s now for the non-public sector to show that into actuality. We additionally have to recognise that recycling alone gained’t offset all the challenges.
A mix of pragmatic worldwide cooperation and competitors can speed up the vitality transition. It’s a lot wanted, and I believe that’s mirrored on this room as we speak.
In closing, the magnitude of the problem is important and alter is coming quick. However with that comes nice alternative. This chance will solely be realised via concerted effort and collaboration throughout trade, buyers and governments, placing predictability and accountability on the core.
Thanks once more, Fatih, for the chance to be right here as we speak, and I look ahead to the discussions forward.
