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Green mining in Jordan: A sustainable future

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(Photo: Envato Elements)
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Hamzeh S. Al-Alayani

The writer is a board member of a Jordanian public-sector government investments management company and a regular commentator on regional energy and industrial matters.

The mining sector in Jordan is a cornerstone of the national economy, accounting for 19 percent of Jordan's total exports. In 2019, the sector made up about 7.7 percent of the Kingdom's GNP — a contribution that is set to increase to 11 percent by 2025. اضافة اعلان

In 2022, revenues of the mining sector increased by 120 percent, equivalent to JD845.4 million ($1.192 billion) compared to the same period in 2021.

In Jordan, the mining industry has competitive advantages. There are abundant natural resources, the location is favorable, and the Kingdom can offer highly skilled labor, infrastructure, and political stability.

A budding industryThe global green mining market is expected to grow significantly in the coming years, with many major mining companies prioritizing sustainability. And seeing as Jordan has been ranked as the world's sixth-largest producer and second-largest exporter of phosphate and its fourth-largest producer and second-largest exporter of potash, it should also consider the principles of green mining.

In Jordan, the mining industry has competitive advantages. There are abundant natural resources, the location is favorable, and the Kingdom can offer highly skilled labor, infrastructure, and political stability.

The Kingdom needs a broad strategy and committed legal reforms that set the direction for the sector and demonstrate the government's focus on scaling up the mining sector to play a more prominent role in the economy. These strategies must include considerations of ownership and production, impact assessments on local communities and ecosystems, and approaches that avoid resource depletion through an effective circular economy.

Globally, the green mining market is expected to grow from $11.0 billion in 2022 to $17.6 billion by 2027. By 2032, it is expected to reach $27.76 billion at a compound annual growth rate of 9.9 percent.

Not only does green mining increase a country's ability to benefit from its natural resources economically, but it also relies on newer, more eco-friendly technologies, practices, and policies to reduce the environmental footprint of mining and ensure that minerals are produced and supplied responsibly and ethically.

Global market factorsHowever, it is not just Jordan that needs to pay attention to the shift toward green mining. The increasing demand for clean energy technologies means a significant increase in the production of minerals such as lithium, cobalt, and graphite.

Many factors affect the market, including the Russia–Ukraine crisis and China's dominance in the minerals supply chain. China's ascendancy is especially evident on the processing side. According to International Energy Agency, China accounts for almost 90 percent of the processing of rare Earth, more than 60 percent of cobalt, and nearly 60 percent of lithium.

The World Bank estimates that the production of these minerals could increase by nearly 500 percent by 2050 to meet this demand. Meanwhile, the world will need more than 3 billion tonnes of green minerals and metals for solar photovoltaics, batteries, electric vehicle motors, wind turbines, fuel cells, and nuclear reactors to achieve a below-2°C future.

Not only does green mining increase a country's ability to benefit from its natural resources economically, but it also relies on newer, more eco-friendly technologies, practices, and policies to reduce the environmental footprint of mining

A deeper understanding of the risks arising from the imbalance between the supply and demand of critical minerals and the implications of these risks is necessary and a step toward action.

Geopolitical tension will increase resource nationalism, reverberating in more restrictive trade and regulatory policies, limiting access to materials to some countries, and fragmenting the global economy.

For example, the amount of lithium required in 2050 for low-carbon energy systems is estimated to be 965 percent more than the total global lithium production in 2017. Other minerals, like cobalt, copper, cadmium, and rare earth elements, will also be in great demand.

Demand for the essential commodities for electrification and the renewable-energy-based economy is growing and, with it, their prices.

The Bank of America, in a global research report, estimates an investment of $150 billion a year is needed in global mining to produce the critical minerals needed to transition to net zero.

Current momentum
So, what is propelling the market during the forecast period to move toward green mining? Government regulation and consciousness toward battling climate change and global warming is a main reason.

But, the escalation in interest in the context of energy-efficient alternatives and affiliated technology globally also offers momentum for the market's growth. The World Resources Institute found that each $1 million invested in green sectors creates much more employment than in "unsustainable" industries, like mining.

Investment in ecosystem restoration creates 3.7 times as many jobs as oil and gas production, and between 2020 and 2021, employment worldwide in the sector grew by 700,000, reaching 12.7 million jobs.

So, as the world becomes more conscious of the need to combat climate change, countries like Jordan must consider not only the economic benefits of their mining sector but also the impact it has on the environment and communities.


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