Impact analysis of carbon prices on metal mining projects by block-based estimation model: Implications for cleaner production

Abstract

Carbon dioxide emissions pricing is employed as an approach to mitigate climate change. To analyze the impact of carbon prices on the metal mining industry, this paper presents a new block-based carbon dioxide emissions estimation model to assess the carbon dioxide emissions and carbon intensity in varying carbon prices, by employing the engineering-based inputs from life cycle of mineral production. Such engineering-based data of an iron case is provided to test the impact of carbon prices on mining projects. The results indicate that the negative impact of carbon prices on the profit of mining projects is more sensitive in low minerals prices, especially for underground method. On the other hand, carbon price rising facilitates the mitigation of carbon dioxide emissions, by lowering the ratio of excavated waste rocks to mined-out raw ore, which varies linearly with the emissions. The carbon dioxide emissions in the studied case decrease from 39.92 kg carbon dioxide eq per ton to 21.50 kg carbon dioxide eq per ton, and from 51.02 kg carbon dioxide eq per ton to 42.80 kg carbon dioxide eq per ton, for surface and underground method, respectively. The results of carbon intensity show that it keeps increasing due to carbon price rising, until the mining boundaries are optimized based on the increased carbon price.