Sierra Leone woos miners to clean energy with $11 billion plan
Most mining firms rely on their own diesel supplies to extract iron ore, diamonds, rutile and bauxite in the resource-rich country.
The cost to transform the mining and steel sectors into zero-carbon industries could exceed $1 trillion, according to Vale’s CFO Gustavo Pimenta.
“When we model the entire production chain, we’re talking about more than a trillion,” said the Vale executive during the Fronteiras da Mineração conference, organized by Brazil Journal.
“If you add up the market value of all the steelmakers in the world, it doesn’t reach a trillion.”
According to Pimenta, the good news is that today there are no technological challenges in generating zero-carbon energy.
“Natural gas, whether for a partial reduction in a transitional process, and hydrogen are available. The issue is scaling up and reducing costs. Hydrogen today probably costs twice what it should for us to start considering hydrogen in the steelmaking production process,” he said.
In Pimenta’s view, the adoption of zero-carbon technologies is likely to be asymmetrical and quite gradual.
“Some countries that are capable of transitioning will do so more quickly. For example, the United States, with all its support and subsidies, will move faster. China, on the other hand, will probably take a bit longer; they still have a relatively new industrial fleet and infrastructure.”
Pimenta also highlighted the role of intermediate solutions, such as carbon capture.
In addition, the way countries tax carbon will also be essential.
“Carbon tax is very important because, in a way, it will direct capital allocation and provide incentives for producers.”
“There will come a time when you’ll have to pay, for example, to sell a carbon-intensive pellet to Europe, and this will force companies to consider solutions like briquettes, which have a smaller carbon footprint.”
