ICMM: Procurement Leaders are Developing Sustainable Mining

As sustainability pressures intensify across global supply chains, the mining and metals sector faces growing scrutiny over its greenhouse gas emissions profile.

For procurement professionals managing critical mineral supplies, understanding the carbon footprint of these essential materials has become increasingly important.

The International Council on Mining and Metals (ICMM), in collaboration with Wood Mackenzie, has published new research examining the sector's contribution to global GHG emissions.

The findings could provide procurement teams with more accurate baseline data for supplier assessment and carbon accounting.

Energy procurement and indirect emissions

Electricity procurement represents a substantial element of the sector's carbon footprint. According to the report, Scope 2 emissions accounted for 7% of the sector's total emissions in 2024, equivalent to 0.4 Gt CO₂e. These purchased emissions represent approximately 2.6% of the total global power industry's emissions.

For procurement teams managing aluminium supply chains, electricity sourcing proves particularly critical. The smelting process is extremely electricity-intensive, meaning the emissions profile depends heavily on the source of purchased power.

Transitioning to renewable energy through Power Purchase Agreements (PPAs) is identified as a primary near-term lever for reducing these indirect emissions. This represents a significant opportunity for procurement professionals to influence their organisations' carbon footprint through strategic energy sourcing decisions.

The procurement of operational fuels also drives a significant portion of Scope 1 emissions. At typical mine sites, diesel combustion in haul trucks and loaders accounts for approximately 50% of total CO₂e output, while on-site fuel procurement for conventional gas or diesel power stations represents roughly 30% of Scope 1 emissions.

Supply chain and procurement constraints

The report identifies several procurement-related challenges affecting the sector's green transition. For steel production, a shift towards lower-emission methods using direct reduced iron and electric arc furnace (DRI-EAF) processes is constrained by the availability of high-grade iron ore, requiring greater than 67% iron content, and a restricted supply of scrap metal.

These material constraints present significant challenges for procurement teams seeking to source lower-carbon steel products. The limited availability of suitable feedstock materials could impact both pricing and supply security in the transition period.

Procurement teams could also face increasing competition for clean energy access. As the sector competes with other industries for renewable power, ensuring affordable access to green energy presents a growing concern for supply chain managers.

"Despite our sector's importance to the energy transition, up-to-date, publicly available and industry-wide data has been lacking, contributing to the circulation of misleading estimates," says Dr Emma Gagen, Director of Data and Research at ICMM, in the report.

Understanding the sector's footprint

The research examined Scope 1 and 2 GHG emissions from 1,700 facilities across 14 commodities, representing 87% of global production. ICMM modelled emissions using averages for the remaining 13% production volume.

According to the findings, the global mining and metals sector accounted for 11% of total GHG emissions in 2024. Of this figure, 3% came from mining activities and 8% from metal production.

When examining scope activity, 93% of these emissions were Scope 1 and 7% were Scope 2. Within the sector, the largest contributors were steel production at 55%, coal mining at 23% and aluminium production at 15%.

Approximately 70% of the world's steel is currently produced by blast furnace-based processes, which are highly carbon-intensive. The data shows that non-coal mining accounted for 0.54% of global GHG emissions in 2024, while fugitive emissions from coal accounted for 2.46% of global GHG emissions. There is an uneven distribution across regions, with 80% of emissions being generated in Asia, reflecting the region's role as a major primary mining centre and dominant processing hub.

Procurement implications moving forward

For procurement professionals sourcing materials for electric vehicles, solar panels and wind turbines, the demand for aluminium and steel continues to grow. These commodities represent the major contributors to the industry's GHG emissions, meaning supplier selection and carbon management strategies could become increasingly important.

Global decarbonisation efforts are moving steel production away from energy-intensive blast furnace-basic oxygen furnace (BF-BOF) methods towards lower emissions solutions using electric arc furnace (EAF) processes. These approaches make use of greater scrap volumes and reduce reliance on coal consumption.

For aluminium, the transition involves procuring more renewable electricity for the smelting process. This shift requires procurement teams to develop new supplier relationships and potentially restructure existing contracts to prioritise low-carbon power sources.

Across the broader sector, vehicle electrification and the adoption of renewable energy sources across operations could represent significant steps towards decarbonisation. Procurement professionals will play a central role in facilitating these transitions through strategic sourcing decisions and supplier engagement.