A CERTIFICATION SYSTEM FOR SUSTAINABLE COPPER PRODUCTION Master’s Thesis submitted in fulfilment of the requirements for the academic degree “Master of Science” at the University of Graz for the “Erasmus Mundus Master's Programme in Industrial Ecology“ by SANNE NUSSELDER at the Institute of Systems Sciences, Innovation and Sustainability Research Supervisor: Prof. Baumgartner Second Reader: R. Aschemann Graz, 2015 INTRODUCTION 6 Literature Review on Certification Systems for Metals 6 Outline Research 7 CHAPTER 1 - COPPER MARKET 9 1.1 Introduction 9 1.2 The Copper Supply Chain 9 1.3 Mines 10 1.3.1 Mining in Chile 11 1.3.2 Mining in China 12 1.3.3 Mining in Peru 12 1.3.4 Mining in the USA 13 1.3.5 Mining in Australia 13 1.3.6 Mining in Russia 14 1.3.7 Mining in the DRC 14 1.3.8 Mining in Zambia 15 1.3.9 Mining in Canada 15 1.3.10 Mining in Mexico 16 1.3.11 Mining in Kazakhstan 16 1.3.12 Mining in Poland 16 1.3.13 Mining in Indonesia 16 1.3.14 Conclusion Mines 17 1.4 Smelters 17 1.4.1 Smelting in China 18 1.4.2 Smelting in Japan 18 1.4.3 Smelting in Chile 18 1.4.4 Smelting in Russia 19 1.4.5 Smelting in India 19 1.4.6 Smelting in South Korea 19 1.4.7 Smelting in Poland 19 1.4.8 Smelting in Zambia 19 1.4.9 Smelting in the USA 20 1.4.10 Smelting in Germany 20 1.4.11 Smelting in Australia 20 1.4.12 Smelting in Bulgaria 20 1.4.13 Smelting in Kazakhstan 21 1.4.14 Smelting in Peru 21 1.4.15 Smelting in Canada 21 1.4.16 Smelting in Indonesia 21 1.4.17 Conclusion Smelting 22 1.5 Refiners 23 1.5.1 Refining in China 23 1.5.2 Refining in Chile 23 1.5.3 Refining in Japan 24 2 1.5.4 Refining in USA 24 1.5.5 Refining in Russia 24 1.5.6 Refining in Germany 25 1.5.7 Refining in DRC 25 1.5.8 Refining in India 25 1.5.9 Refining in South Korea 25 1.5.10 Refining in Zambia 26 1.5.11 Refining in Poland 26 1.5.12 Refining in Australia 26 1.5.13 Conclusion refining 27 1.6 Conclusion 27 CHAPTER 2 - COPPER PRODUCTION TECHNOLOGIES 29 2.1 Introduction 29 2.2 Primary copper production 29 2.2.1 Mining 29 2.2.2 Comminution 30 2.2.3 Concentrating 30 2.2.4 Smelting 31 2.2.5 Converting 33 2.2.6 Combined smelting and converting 33 2.2.7 Fire refining and anode casting 33 2.2.8 Electrolytic refining 34 2.2.9 Leaching 34 2.2.10 Solvent extraction (SX) 35 2.2.11 Electrowinning (EW) 35 2.3 Secondary copper production 29 2.3.1 Pre-treatment of old scrap 36 2.3.2 Old scrap inputs into primary copper production 36 2.3.3 Secondary copper production from old scrap 37 CHAPTER 3 – SUSTAINABILITY IN THE MINING INDUSTRY 38 3.1 General sustainability definitions 38 3.1.1 Environmental sustainability 38 3.1.2 Social sustainability 39 3.1.3 Economic sustainability 40 3.1.4 Time perspective of sustainability 41 3.2 Defining sustainability for a system 41 3.3 Sustainability definitions applied to the minerals and mining industry 42 3.3.1 Environmental sustainability in the mining and metal industry 43 3.3.2 Social sustainability in the mining and metal industry 45 3.3.3 Economic sustainability in the mining and metal industry 46 CHAPTER 4 – SUSTAINABILITY ISSUES IN THE COPPER PRODUCTION PROCESS 48 3 4.1 Environmental issues - Life Cycle Assessment (LCA) 48 4.1.1 Goal and scope definition 48 4.1.2 Function, functional unit, reference flows 50 4.1.3 Inventory analysis 52 4.1.4 Impact assessment 68 4.1.5 Interpretation 74 4.1.6 Discussion and Conclusion 76 4.2 Social issues - Social Life Cycle Assessment (S-LCA) 77 4.2.1 Goal and Scope Definition 77 4.2.2 Functional unit 79 4.2.3 Life Cycle Inventory Analysis and Assessment 79 4.2.4 Interpretation 85 4.2.5 Discussion and Conclusion 86 4.3 Economic sustainability 86 CHAPTER 5 – LEGAL, POLICY AND REGULATORY ASPECTS OF COPPER PRODUCTION 88 5.1.1 OECD Guidelines 88 5.1.2 Dodd Frank Act 90 5.1.3 Draft legislative proposal EU on mineral sourcing 91 5.1.4 ISO standards 91 5.1.5 ILO Standards 92 5.1.6 Extractive Industries Transparency Initiative (EITI) 93 5.1.7 ICMM Principles for sustainable development 93 5.1.8 Global Reporting Initiative Guidelines 94 5.1.9 Legislation on free, prior and informed consent (FPIC) 96 5.1.10 Basel Convention 97 5.1.11 Conclusion 97 5.2 Country specific legislation 99 5.2.1 Chile – Mining, Smelting, Refining 99 5.2.2 China – Mining, Smelting, Refining 101 5.2.3 Peru – Mining 101 5.2.4 USA – Mining, Refining 105 5.2.5 Australia – Mining 104 5.2.6 Russia – Mining 107 5.2.7 DRC – Mining 106 5.2.8 Zambia – Mining 107 5.2.9 Japan – Smelting, Refining 109 5.2.10 Conclusion 113 CHAPTER 6 - COMMODITY CERTIFICATION SYSTEMS 114 6.1.1 Financing of certification system 114 6.1.2 Assessment 114 6.1.3 Chain-of-custody model 115 6.1.4 Targeted audience 115 6.1.5 Pass/fail versus tiered system 115 6.1.6 Unchanging versus dynamic system 116 6.1.7 Voluntary versus obligatory system 116 4 6.2 Commodity certification 116 6.2.1 Conflict Free Smelter Program 116 6.2.2 Forest Stewardship Council (FSC) certification 117 6.2.3 Kimberley Process Certification Scheme (KPCS) 117 6.2.4 iTSCi 118 6.2.5 Fairtrade and Fairmined Gold 119 6.3 Certification of copper 119 Targeted consumer 119 Self-certification versus third-party certification 120 Pass/ fail system vs tiered system 120 Voluntary vs obligatory 121 Unchanging versus dynamic 121 Chain-of-custody model 121 CHAPTER 7 – CERTIFICATION SYSTEM FOR SUSTAINABLY PRODUCED COPPER 123 7.1 Summary of drawn conclusions 123 7.1.1 Sustainability issues in the copper production process 123 7.1.2 Legal, Policy and Regulatory Aspects of Copper 124 7.1.3 Commodity Certification System 127 7.2 Discussion of sustainability issues in the production of copper 128 7.2.1 Sustainability issues at the mine site 128 7.2.2 Sustainability issues at the smelting site 132 7.2.3 Sustainability indicator at the refining site 133 7.3 Indicators 134 CHAPTER 8 - CONCLUSION, UNCERTAINTIES AND FUTURE RESEARCH 136 8.1 Conclusion 136 8.2 Uncertainties 138 8.3 Future research 138 BIBLIOGRAPHY 140 Appendix 1 - Life Cycle Inventory 1 tonne Primary Copper Cathode Production - Pyrometallurgical Route 152 Appendix 2 - Life Cycle Inventory 1 tonne Primary Copper Cathode Production - Hydrometallurgical Route 154 Appendix 3 - Life Cycle Inventory 1 tonne Secondary Copper Cathode Production - Scrap in Primary 156 Smelter Appendix 4 - Life Cycle Inventory 1 tonne Secondary Copper Cathode Production - Scrap in Converter 158 Appendix 5 - Life Cycle Inventory 1 tonne Secondary Copper Cathode Production - Scrap in Secondary 163 Smelter 5 Introduction According to Anglo Ashanti’s CEO, the mineral extraction sector is responsible for more than 45% of the world’s GDP (Creamer, 2012). The direct revenue of the sector amounts to 11.5% of the global GDP. Anglo Ashanti has an interest in portraying the mining sector as a, if not, the most important sector for the world economy. However fact remains that certain national economies rely heavily on the mining sector, for example the contribution in 2010 of the mining sector in Zambia, Papua New Guinea, Mauretania and Guinea to GDP was more than 20% (ICMM, 2012). Unfortunately the industry does not only create economic benefits, it also has adverse environmental and social impacts. Mining of metals can have several impacts on the environment including; the transformation of land to mines, pollution of water and soils with chloride, sulphate, nitrate, diesel, petrol and chemicals from waste rock piles (Hester & Harrison, 1994). Air pollution may include emissions of dust particles unhealthy to humans, greenhouse gasses and metal particles (Hester and Harrison (1994), Azoue (1999)). Social impacts of metal extraction can be the degradation of the health of local communities because of waterborne diseases and mental health problems (Hester and Harrison (1994), Azoue (1999)). Also the stress on local infrastructure, service provision and housing availability can increase (Petrova & Marinova, 2013). Non-ideal working conditions in mines can lead to injury, disability and even death of mine workers (Azoue, 1999). The mining industry in certain regions is also associated with conflicts. This is not to say that there is no progress being made by the mining industry in becoming more sustainable and in reducing its environmental and social impacts. However, as Walker and Howard (2002) state eloquently; “Whilst individual companies and mine sites have made significant advances in environmental and social performance, the advances have largely gone unrecognized and unrewarded by the market and the public because of the absence of a credible mechanism that can differentiate companies on the basis of their environmental and social performance.” Certification systems can help in changing processes that are unsustainable because they can assist a company in justifying changes in its purchasing and sourcing practices showing that the company is reducing its risk and enhancing its brand (National Resource Council, 2010).