South America's history is intertwined with mining - an industry that dates back millennia to indigenous civilizations like the Inca and Moche, who skillfully extracted precious metals from the Andes Mountains. The arrival of Spanish conquistadors in the 16th century started an acceleration in mining activities, with vast quantities of minerals, including gold and silver being exported to Europe. Today, South America continues to play a crucial role in the global mining industry, particularly in the extraction of copper and 3TG minerals: tin, tantalum, tungsten, and gold. Here we will explore the sustainability challenges faced by the industry in South America – looking at how they might differ from European conditions, and examines the promising future prospects ofcopper and 3TG mining in the region.
South America has some of the largest deposits of natural resources, including copper, where the continent alone accounts for roughly 40% of global copper production. Chile is the biggest copper producing country with 27% followed by Peru with 18% of global production respectively. Furthermore, capacity has increased from 35% to 45%, which means that the unexploited potential for further development are looking strong.
The same goes for other metals – incl. Lithium, where 35% of the global resources originate from. Again, Chile is the largest producer in South America with 26%.
All of these large quantities of resources in South America brings a significant amount of interest from abroad, and unsurprisingly the mining industry account for nearly 20% of foreign investment into South America.
With such strong investment into the mining sector, it is natural to expect a boost in the mining activities across South America. However, with some of the recent unfortunate incidents related to mining, a strong anti-mining movement has started growing rapidly in South America.
Events like the spill of 40.000 cubic meters of sulfuric acid in Mexico, which polluted the drinking water supply - https://www.bbc.com/news/world-latin-america-28850701, and the Tailings dam disaster in Brazil, which killed 270 people - https://www.industriall-union.org/three-years-after-brumadinho-tragedy-justice-and-accountability-still-elude-the-victims, means that the mining industry is struggling to obtain a “social license” to operate in South America. This refers to social and civil backing of mining projects. So while there are a lot of funds waiting to be invested in the region, it is critical that these investments and new projects are made with sustainability in mind, as well as maximizing the benefits for the local communities.
The Sustainability Challenges
Large-scale mining operations often result in deforestation, animal habitat destruction, and water pollution. The use of mercury in artisanal gold mining poses a severe threat to aquatic ecosystems and human health, and as we saw from above examples, sulfuric acid can cause dramatic effects on the drinking water supplies, living conditions of fish along with other environmental impacts. In worst case scenarios these environmental damages are permanent, and the vital life resources and wildlife will be lost forever. Mining can also lead to local land disputes, displacement of indigenous communities, and social unrest. These issues underscore the importance of responsible mining practices and community engagement. It is vital for a sustainable mining operation that you consider the people, the environment, and the societies around the area in which a company intends to mine.
Other challenges for the South American mining operation include:
Illegal mining operations, particularly in the Amazon rainforest, which contributes to deforestation, environmental degradation, and the rise and strengthening of criminal networks.
Workers in some mining operations face hazardous working conditions, inadequate safety measures, and insufficient wages.
The extraction of minerals, especially gold, can deplete finite resources, leading to long-term economic and environmental consequences due to the mining methods used in the extraction process.
Future Prospects of Copper and 3TG Mining in South America
Even when we consider all the sustainability challenges, the copper and 3TG mining in South America possesses several promising factors that promote a brighter future:
The global demand for copper and 3TG minerals, remains robust due to their essential roles in electronic devices, vehicles and green energy transition technology. The increasing adoption of renewable energy technologies also boosts the demand for these minerals. As all of these industries continue to drive the global green transition, means that there is no sign on a slow-down in the demand of the precious materials.
South American governments and mining companies are recognizing the importance of responsible mining practices, with the strong push from the local communities and global societies combined. They emphasize environmental protection, community engagement, and ethical sourcing throughout the industry, aligning with international standards like the OECD Due Diligence Guidance for Responsible Supply Chains, which is a comprehensive framework designed to help organizations to ensure that their supply chains are ethical, sustainable and responsible.
Additionally, ongoing advancements in mining technology and exploration techniques are making it possible to access previously untapped resources with reduced environmental impact. Innovations such as automated mining machinery and remote monitoring improve efficiency and safety. This can help the industry to build stronger local relationships with the communities affected by the mining operations, and hopefully remove some of the risk, that are causing the social push-back from local communities with the current mining methods and set-ups throughout South America.
Finally, the mining industry continues to be a vital source of revenue and employment for South American countries, as well as foreign investment. It contributes to economic growth, infrastructure development, and diversification of local economies.
Copper and 3TG mining in South America and Europe can differ in several ways due to variations in geological conditions, mining methods, regulations, and environmental factors. Here are some key differences between copper mining in these two regions:
South America: South America is home to some of the world's largest copper deposits, particularly in countries like Chile and Peru. These deposits are often associated with porphyry copper ores, which are typically large, low-grade deposits found near active or ancient volcanic centers.
Environmental regulations and enforcement can vary widely across South American countries. In some regions, there have been concerns about lax environmental practices, water usage, and pollution associated with copper mining.
Europe: Copper deposits in Europe tend to be smaller and more diverse in terms of ore types. Europe's copper mining is often associated with sedimentary-hosted stratiform deposits, which are different from the porphyry deposits found in South America.
European countries generally have stricter environmental regulations and higher environmental standards for mining operations. Compliance with regulations related to water quality, air emissions, and habitat preservation is closely monitored.
Vertical Integration Through Traceability
The mining industry can benefit from utilizing blockchain software solutions throughout their supply chain, which will help them gain greater transparency through increased sustainability and traceability metrics into the mining operation. Blockchain traceability can also help in meeting ESG goals relating to the construction of refining facilities and gigafactories; for example by quantifying the carbon footprint of building new facilities.
Measuring the carbon footprint of the construction phase of your mining operations, factories or refining facilities, can provide insights into the true carbon footprint of the finished products a company is selling to their downstream partners and consumers.
Having this level of transparency in your product, means that your business will be meeting the end-consumers more than halfway, in the search for full transparency and true green products like low-carbon copper, low carbon tin, and similar products.
Copper and 3TG mining in South America has a complex history, marked by both prosperity and sustainability challenges. It is clear that mining has contributed significantly to economic growth and development in the region. However, it has also raised concerns about its environmental and social impacts.
Still, with a growing focus on responsible mining practices, technological advancements, and the continued global demand for 3TG minerals, there is a strong sentiment to believe that South America's mining industry can have a sustainable and prosperous future. By addressing its challenges, applying technology software and embracing sustainable practices, South America can continue to play a vital role in the global mining landscape while preserving its natural and cultural heritage for generations to come.