There has been an increasing push for sustainability in the mining industry in recent years, and investors and companies alike have started to rely on and emphasise Environmental, Social and Governance (ESG) factors as part of their evaluation of operational performance.
This set of criteria rests on
three pillars, with the ‘Environment’ component including aspects such as an
operation’s energy consumption, waste management, and disturbance to the local
ecosystem. The ‘Social‘ aspect will relates to a corporation’s relationships
with its employees, local communities and business partners. Finally, ‘Governance’
focuses on the accuracy and transparency of a company’s accounting and
reporting methods.
Out of these, the environmental
pillar is gaining particular focus in the mining industry, particularly with many
major companies targeting net zero carbon by 2050. A company’s carbon intensity
is measured by the emissions associated with its mining and processing operations,
including available offsets. Companies are under pressure to outline the
concrete actions they plan to make to meet their net zero commitments.
For instance, with its
aim to halve emissions by the end of this decade, Rio Tinto has led a team of
experts to study the possibility of carbon storage at the Tamarack joint
venture project in Minnesota, the same site that has signed a six-year
agreement with Tesla to supply sustainably mined nickel. Meanwhile, in February
2021, BHP signed an agreement with the Merredin Solar Farm to supply 50% of the
electricity required for its operations at the Kwinana Refinery. In July 2021,
Nornickel announced that it had shipped its first batch of carbon-neutral
nickel cathodes from its Kola Division, as the facility now mainly relies on an
upgraded hydroelectric plant.
The Big Picture
Nickel deposits are commonly
found in low-grade ores (~1-3% nickel), which makes the metal highly energy-intensive
to extract and refine. Consequently, nickel production causes significant
carbon emissions due to its use of large amounts of energy predominantly
sourced from fossil fuels.
In a study conducted in 2014, nickel was ranked as
the metal with the ninth-highest global warming potential, based on production
levels data from 2008. Global nickel production came to 1.57Mt in 2008 and has
since grown to an estimated 2.5Mt in 2020. This trend is expected to continue
as global demand for nickel continues to rise.
Nickel is extracted from two
types of ores, namely laterite and sulphide ores. In 2020, the United States
Geological Survey (USGS) reported that the world’s identified nickel resources
consist of 60% laterite ores and 40% sulphide ores. While the majority of the
identified nickel resources are contained in laterite ores, historical, nickel
has predominantly been produced from sulphide ores.
This is mainly due to the
challenges of the more complex processing required for laterite ores compared
to sulphide ores. However, to meet the growing demand for nickel, an increasing
amount of nickel is being sourced from laterite ores, which leads to increasing
energy costs and CO2 emissions for nickel production.
Since 1999, the Nickel
Institute has been monitoring its member companies’ carbon footprints, and it
was noted that the overall volume of emissions has reduced by 9% over the
years. It was also noted that, in 2019, nickel production was responsible for
0.27% of global greenhouse gas emissions.
Emission Scopes
When reporting carbon
emissions, many countries and companies have adopted greenhouse gases (GHG)
emission standards as outlined by the Greenhouse Gas Protocol. The protocol
classifies emissions across three scopes:
Scope 1: Direct emissions
–released as a direct result of an activity at company level, such as fuel
combustion from vehicles and machines.
Scope 2: Indirect emissions
–released from the indirect consumption of an energy commodity by the company
(typically electricity).
Scope 3: Additional indirect emissions –from consumers
utilising company output, generated in the wider economy.
Production Breakdown
GHG emissions are
measured in carbon dioxide equivalent, or CO2eq, and the method of nickel
production can drastically alter the volume of emissions produced. As of 2021,
the production of one tonne of class 1 nickel generates an average of 10t CO2eq
from sulphide ore, 19t CO2eq from laterite ore via HPAL, and 59t CO2eq from
laterite ore into nickel pig iron (NPI) and then nickel matte.

In 2020, production of 1t of
nickel metal was linked to average emissions of 13t CO2eq. Approximately 60% of
emissions are associated scope 1 emissions, another 15% are scope 2 emissions,
and the remaining 25% are mainly associated with process chemicals used during
the productions process (scope 3 emissions).
Furthermore, the production of
nickel pig iron emits a staggering 69t CO2eq per 1t of nickel content.
According to Canadian Sudbury, nickel pig iron could be branded as "dirty
nickel" since the production process is not environmentally friendly, it
is highly carbon-intensive.
Meanwhile, ferronickel production creates 45t CO2eq
per 1t of nickel content. The primary extraction stage accounts for 87% of the
total CO2 emissions related to ferronickel production. Roughly 72% of the CO2
emissions are scope 1 emissions, another 17% are scope 2 emissions, and the
remaining 11% are scope 3 emissions.
The production of 1t of nickel
sulphate emits a further 5.4t CO2eq. The main stages of nickel sulphate
production where CO2 emissions occur are primary extraction and refining, which
account for 42% and 35% of the total CO2 emissions related to the production
process, respectively. Overall, 67% of the CO2 emissions are scope 1 emissions,
another 7% are scope 2 emissions, and the remaining 26% are scope 3 emissions.
A processing method that has
become increasingly popular is the high-pressure acid leach (HPAL) method, as
it is effective in extracting from nickel laterite ores of lower grades, and is
even capable of converting the product into class 1 nickel. It also has a high
cobalt recovery, meaning that the by-products generated are more valuable than
those of other processes.
However, the HPAL process is extremely energy-intensive.
Many of the current HPAL plants use coal as their source of electricity, and
three times more greenhouse gases are emitted during the process than during
extraction from sulphide ores. Moreover, the low pH and high pressure levels
required for the process mean that the equipment itself is rapidly corroded
over time and needs constant maintenance, increasing the costs and waste
associated with the process.

Despite the significant
carbon emissions resulting from nickel production, the essential metal is not
easily replaced. Moreover, while nickel production itself is energy intensive,
the metal finds its way into a wide range of applications through which it significantly
reduces carbon emissions.
For instance, regarding its usage in EV batteries, it
is reported that replacing gasoline vehicles with EVs reduces overall carbon
emissions by 51% over the life of the car. Another example is nickel-containing
stainless steel, in which nickel enhances corrosion resistance, significantly
increasing the product’s life, which limits the demand for manufacturing.
A Bright Path Ahead
With that said, the demand for ‘green’ nickel production is high.
Both miners and EV companies are increasingly mindful of the interest in
green-compliant battery materials and are increasingly hesitant to invest in
projects powered by coal. Tesla, for instance, has made its stand publicly by
appealing to nickel producers to immediately start producing as much “green,
efficient, and sustainable nickel as possible”.
Chinese steel and nickel producer Tsingshan has vowed to be
greener in its production. The company has recently announced plans to build
2,000MW clean-energy facilities at both its Morowali Industrial Park (IMIP) and
Weda Bay Industrial Park (IWIP) hubs in Indonesia over the next 3-5 years,
including solar and wind power stations and supporting infrastructure.
Tsingshan also has plans to build a 5,000MW hydropower project in Indonesia to
further clean up its energy supplies.
Nornickel also claims to
have reduced its use of coal-fired energy by 49%. In 2016, the company
decommissioned its Norilsk nickel factory, and it aims to reduce emissions on
the Kola peninsula by 85% by the end of 2021 as part of its global strategy of
transforming into an environmentally friendly company.
The company also invests
in energy modernisation facilities, including the replacement of hydroelectric
units at the Ust-Khantaiskaya hydro power plant. The share of renewable sources
in the company’s energy mix has thus increased to 55% for the Norilsk
Industrial District and 46% for the group.