MINING COMPANIES are increasingly being evaluated by their buyers over the type of energy they use in their operations, an industry official said.
“A new ethic in doing business, particularly in the mining industry, is now emerging worldwide,” Offshore Mining Chamber of the Philippines, Inc. Chairman Michael Raymond A. Aragon said in a statement.
Mr. Aragon said that miners are now being required to disclose to their buyers the types of energy they use.
“If the energy source used for mining is not clean or green then most buyers will refuse the miner’s business,” he said.
“We welcome this new emerging norm in doing business transactions internationally especially in the mining industry… we all have to act on the urgent need to fight the global climate emergency that threatens humanity with species extinction if not abated soon,” he added.
Michael L. Ricafort, chief economist from the Rizal Commercial Banking Corp., said demand for clean energy in supply chains is largely driven by companies who are being rated on their performance on environmental, social, and governance (ESG) criteria.
He said ESG drives many companies to “further reduce, if not eliminate, carbon emissions/footprint in the coming years” with the encouragement of institutional investors and regulators.
“This encourages the shift towards more renewable and sustainable power/energy and other business practices as the cost of renewable power such as wind, solar, hydro, among others has decreased in recent years,” he said in a Viber message.
However, Mr. Ricafort said some miners in the Philippines remain constrained due to the lack of access to renewable power.
“One of the challenges includes the need to bring in/roll out more renewable power capacity in the country and reduce dependence on non-renewable power sources such as coal and other petroleum-based energy/hydrocarbons,” he said.
The Department of Energy estimates that renewable energy (RE) capacity increased 4% to 8,255 megawatts in 2022.
RE currently accounts for 29% of the energy mix, with a target to expand to 35% by 2030 and 50% by 2040. — Sheldeen Joy Talavera