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The mining industry has a key role to play in energy decarbonization, executives of diversified miner Anglo American said in presentations to Bank of America’s Global Metals and Mining Conference this week.

Part of this role will be to continue to produce metallurgical coal for the next 15-20 years to help the world decarbonize because this is used in steel, they said.

Steel is said to be an infinitely recyclable metal, whose demand is growing not only for construction but also for use in new energy applications such as electric vehicles and windfarms.

“The world needs met coal to produce steel and the world needs steel to decarbonize their economies,” Anglo American CEO Mark Cutifani said in a May 18 presentation to the conference. “We can’t be simplistic in responding to trends on coal,” he said.

Anglo American is withdrawing from some operations that produce thermal coal, used in power stations, but continues to operate high-quality metallurgical coal assets, Cutifani said.

The demerger of Anglo American’s South African thermal coal assets — being transferred to Thungela Resources Limited — is due to be completed June 7. The company is also expecting to exit from its interests in Colombia’s Cerrejon thermal coal mine operation in the next 18 months. It has no new metallurgical coal mine on the drawing board, Cutifani said.

“Anyone who talks about getting rid of metallurgical coal in the 10-15 years is really on a different planet,” Cutifani said during a question and answer session following his presentation. “Over the next 15-20 years it will be progressively taken out of the supply chain.”

Anglo American’s metallurgical coal resources will last until 2035-40 and the company won’t be a significant producer beyond that, he said.

Anglo American is targeting a 30% reduction in its greenhouse gas emissions and a 30% improvement in its energy efficiency by 2030, from 2016 levels, on its path to planned carbon-neutrality (Scope 1 & 2) by 2040, said Tony O’Neill, group director, technical and sustainability, in a May 19 presentation to the event. This is 10 years earlier than the carbon neutrality targets planned for 2050 by major global miners BHP, Rio Tinto and Vale.

‘Future-enabling’ commodities

In the short term, the metals industry “is perched on the edge of a material opportunity” in light of government stimulus packages, set to total some $10-$20 trillion over the next 10 years, much of which is focused on metals-intensive infrastructure, accompanied by population growth, according to Cutifani.

“For us as an industry, the transition to a decarbonized society and what that means for supply and demand for our products becomes the defining issue of our time,” Cutifani said. “Sustainability provides us with a platform to improve our long-term value proposition … focused on future-enabling commodities,” he added.

Around 65% of Anglo American’s portfolio is composed of so-called future-enabling commodities, including copper — in South America it is expanding production at Collahuasi mine and is set for a 2022 start of a greenfield project at Quellaveco — platinum group metals, nickel and manganese, which are all used in electrification or clean energy applications. The other 35% is “in-use” iron ore and met coal assets for steelmaking, Cutifani said.

New steelmaking technologies

Breakthrough technologies are starting to be introduced to decarbonize the steelmaking industry, Asa Ekdahl, head, environment and climate change, of World Steel Association said in a May 19 worldsteel webinar.

These involve the continuing use of carbon to reduce iron ore in the steelmaking process, coupled with carbon capture, usage and storage; replacing carbon with hydrogen as an iron ore reductant, generating water instead of CO2; using electrical energy through an electrolysis-based process; and maximizing recycled steel scrap use, Ekdahl said.

Despite gains in energy efficiency and recycling in recent years, in 2020 the steel industry globally still averaged significant emissions of 1.85 mt/CO2 per mt of crude steel produced, with the industry as a whole accounting for between 7% and 9% of global direct CO2 emissions, she said.