Precious Metals
Precious Metals
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Mining and Metals

Mining provides us with the building blocks of modern society. Think about all the commonplace objects that contain metals – washing machines, laptops, power lines, and even fertilizer. Metals are also key to our transition to less polluting energy. Technologies like solar panels and electric cars rely on metals like aluminum or lithium, so we will need to do a lot more mining in the future to create a low-carbon energy system.
But much of the energy used to get minerals out of the ground, and process them, today comes from fossil fuels, and releases greenhouse gases into the atmosphere. Forty-four percent of all carbon dioxide (CO2) emissions from industry come from producing steel and non-metallic mineral products like cement.1

An energy-intensive supply chain

It takes many steps for the metal from a mineral to go from an ore below the ground to a steel beam or an aluminum frame, and every step takes a toll in carbon emissions. To extract mineral ore, large chunks of earth have to be removed with explosives or heavy machinery. Those machines run on fossil fuels that release CO2 and other pollutants, while explosives produce carbon monoxide, which also contributes to global warming. Once extracted, the ore is pulverized – a step that accounts for 40% of mining's energy use.1 Water is often used to separate desired minerals from ore, and it must be treated before and after use. This, too, requires a lot of energy, and means a large amount of water is not then available for other uses like agriculture.

The chemical reactions used to refine minerals also contribute to climate change. For example, one of the first steps in making steel is to heat a mixture of iron ore, limestone and coke, a coal product, to extremely high temperatures. This purifies iron by removing oxygen, but it also creates CO2 and carbon monoxide as a byproduct. Industrial steel plants also use tremendous amounts of energy overall. A typical steel plant uses over 2,000 megawatts of energy a year – enough to take up all the energy produced by a standard nuclear power plant.

Toward cleaner mining

Mining and metals companies are working to lower their greenhouse gas emissions, but they are not on track to get to net-zero emissions. A key way for this industry to emit less CO2 is to swap out fossil fuels with low-carbon electricity. Some companies are building solar farms near their mines and manufacturing plants to do this, but to complete this transition, more heavy equipment also needs to be redesigned to run on electric power. Another way to lower emissions is to cut down on transportation, by using or refining metals closer to where they’re mined.

The metals industry could drastically lower emissions by using renewable electricity instead of carbon-containing chemicals to extract metals from minerals. More reductions can come from cutting down on energy use. For example, we could improve the quality of ore going into mills by changing the way it's blasted from the earth and sorted, which would reduce the energy needed to crush and grind that ore.

Meeting our global climate goals will not be possible if the mining and metals industry does not invest heavily in renewable energy and in new low-carbon technologies.
Precious Metals and Industrial Metals

Metals are classified into two categories; precious metals and industrial metals. Precious metals include gold, platinum, and silver. Precious metals are considered to be rare and can have a high economic value associated with them. Precious metals also derive their value from what they're used for, such as gold, which is considered a safe-haven investment in times of economic uncertainty. Some precious metals are used in industrial and manufacturing processes. Palladium, for example, is used in electronics.

Industrial and base metals are used in the construction, manufacturing, and technology industries and include copper, aluminum, steel, and zinc. Copper and steel are heavily used in manufacturing, particularly in China and India. The price of copper is closely watched by investors since it can serve as an indicator of economic growth. If copper prices are increasing along with demand, it can indicate that manufacturing activity is also on the rise, which could lead to higher economic growth globally.

Typical activities in the metals sector include metals production, metals trading, and metals investing. The majority of revenues are a direct result of these activities. Metals have a wide range of uses, and extraction increases as market demand grows.2 Industrial and jewelry uses grow as economic activity grows, while a slowed economy typically increases the use of precious metals for investment purposes.3 4 Minerals also have a heavy industrial use and are increasingly mined when economic demand necessitates mining growth.
Mineral Mining

Mineral mining is the extraction of minerals such as coal and precious gemstones. Coal is a significant mining product produced in substantial amounts all over the world.5 This mineral provides around 38% of global energy and is heavily relied upon for electricity production.6 Environmental concerns have led some countries to decrease coal production, yet many developing nations rely heavily on increasing coal production to sustain continued economic growth.7 8

Diamonds, a popular mineral for the jewelry industry, are also produced for industrial use. Diamonds are used to produce strong abrasives, saws, and cutting tools since this mineral is the strongest substance available.9 Often, industrial diamonds are manufactured artificially.10

This keeps costs low by reducing the need to obtain diamonds by mining. The popularity of diamond jewelry keeps demand for diamonds strong and encourages further diamond mining and the search for new reserves.11

The Mining Industry

The mining industry at large has boom and bust cycles that closely follow global economic conditions.12 As such, the sector relies on other industries to continue to find new uses for metals and minerals and support the continued need for mining. New uses for minerals support the mining sector when economic conditions are not favorable for investment use or the production of jewelry.

The variety of ways investors may purchase and hold mineral investments has supported their investment popularity and made minerals investments available to more members of the public via mutual funds and precious metals shares. The mining industry, while supported by the many uses of precious metals, faces new challenges that increase the difficulty involved in developing and expanding mining activity.13 Government regulation, environmental challenges, and other issues add to the cost of mining and complicate new operations.