One overlooked pillar of the shift to clean energy is mining: extracting the lithium, cobalt, nickel and other metals that will make up the hard infrastructure of a low-carbon world. The mining industry already props up much of the physical economy, which, as it decarbonizes, will inject unprecedented demand into the sector. As it races to satisfy a metal-hungry world, mining will also need to contend with its own heavy environmental impact: extracting metals and processing them produce a tenth of all greenhouse gas emissions, a figure that must come down in order to meet urgent climate targets.
The industry has long operated in a style that might feel, to some, like something out of a bygone era. Tranches of mineral are traded via ink-and-paper contracts that typically lack vital information about the raw material being moved around, particularly the carbon dioxide emissions associated with its procurement and refinement. As the sector expands, this absence of rigor and transparency is slowing its evolution into a responsible actor in the broader landscape.
Enter Open Mineral, a Switzerland based scale-up applying a tech savvy, user friendly approach toward minerals exchange. It has developed a platform that allows buyers and sellers to view reams of information—including environmental data—about raw metal products they might be interested in. This has the potential to fill significant gaps in understanding about an industry that has long been derided as an agent of planetary degradation.
It is also unique among metals trading bodies. In recognition of Open Mineral’s potential, Emerald led a Series B round into the startup in 2018 and participated in a Series C round in 2021. “For the first time in history, buyers and sellers of raw materials can really understand the actual carbon footprint of the products they buy,” says Hans Dellenbach, Emerald Senior Partner.
According to Johan Knapp, Open Mineral’s head of environment, social and governance (ESG), calculating this footprint can be a fiendishly complex process. Before being sold on the seaborne market, mined metal ore can be finely ground to create a “metal concentrate” product. These products can often be blended together with metal concentrate mined from different places, each tranche of which might traverse its own lengthy journey to reach the agent who will post it to Open Mineral’s platform. Each step along this path—from laying explosives in open-pit and underground mines, to burning diesel in haul trucks, to “smelting” the concentrate downstream and refining it for use in commercial applications—emits large quantities of carbon dioxide.
Aggregating all the emissions associated with each component of a concentrate requires combining data from various sources, including third-party providers and Open Mineral’s own proprietary research. This alchemy results in a quantity of CO2 emissions per dry metric tonne of metal ore concentrate, which Open Mineral displays on its eBay-like site. Its platform breaks emissions figures down by source, providing users end-to-end visibility over the climate impact of a metal’s journey to becoming a refined product. Buyers and sellers can see how the carbon footprints of concentrates change as they optimize for numerous other factors, like gross margin.
This gives them a useful window into a metric that will become increasingly important as various parties—from regulators to consumers—ramp up pressure on the buyers and sellers of raw materials to go green. London Metal Exchange, the world’s largest centralized minerals market, is in the process of incorporating sustainability factors like emissions into its certification standards, which adds a guarantee of quality and integrity that might not otherwise exist. Traders can even use Open Mineral’s platform to forecast how much an economy-wide carbon price would affect their after-tax profits, allowing them to keep up with a rapidly-changing regulatory landscape.
From brake to accelerant
Looking ahead, Open Mineral intends to incorporate more ESG factors into the metals it sells. Knapp says this could range from measuring water consumption to assessing how the harmful elements within a concentrate material, like arsenic, might affect local environments as it gets processed downstream. All this is meant to foster a cleaner, more environmentally-responsible mining and metals industry, one that can be an accelerant, rather than a brake, in the race against manmade climate change.
“Everything that’s been happening makes you realize just how important the mining industry is if you really want to reach net-zero goals,” Knapp says. “All of the products needed for electric vehicles, wind turbines, solar panels, nuclear plants—that material will come from the ground.”