Thermal coal, blast furnace-basic oxygen furnace (BF-BOF) steelmaking and its raw materials are the segments of the metals and mining sector that are most vulnerable to long-term climate risks owing to their large direct emissions, credit ratings agency Fitch Ratings says.
Demand for many nonferrous metals will remain high in the long term owing to their role in the low-carbon transition, even though producers will need to decarbonise their mining and processing, the agency adds. It notes that the vulnerability of gold to climate risk will remain unchanged owing to its limited industrial use and expected reductions in production-related emissions.
Fitch warns that thermal coal mining faces a long-term existential threat as coal-fired energy generation is the single largest source of greenhouse-gas (GHG) emissions and cleaner sources of energy are already available.
Fitch explains that steelmaking is highly carbon-intensive, particularly if using the BF-BOF route, which relies on metallurgical coal for iron-ore reduction, Fitch points out.