Climate change disputes in the infrastructure, mining and agribusiness sectors can be broadly categorized into: (1) legal action aimed at companies whose emissions contribute to climate change; and, (2) legal action aimed at preventing developments causing emissions contributing to climate change. Market trends lead us to believe that we may well see legal action against the mining sector in relation to its contribution to climate change, as well as disputes arising out of a perceived failure to respond to an emerging pattern of extreme weather events when planning critical infrastructure.
The mining sector - particularly coal - faces the dual challenge of being intrinsically carbon-intensive as well as irreplaceable in the energy transition. The pollution and environmental degradation produced by mining and drilling are easy targets for environmental activists, as is its energy-intensity, and the combustion of fossil fuels is a major contributor to greenhouse gas emissions.
However, the relationship between the mining, energy and infrastructure sectors is both complex and evolving. For example, the mining of metallurgical coal and rare earths remains critical to the expansion of the renewables sector: 70% of the inputs for steel manufacture is metallurgical coal;1MW of wind turbine capacity requires 220 tonnes of metallurgical coal; sixteen mined metals and minerals are required to make solar panels, and copper and rare earth elements are essential for the manufacture of permanent magnets for electric vehicle technology and wind turbine generators.
While the contribution of the mining sector to the global energy transition is incontrovertible, the opportunities for challenges to the mining sector on grounds of climate change abound.
Challenges to project approvals based on climate change impacts and greenhouse gas emission analyses have become an increasingly utilized tool for environmental groups seeking to keep natural resources 'in the ground'. In the US, recent disputes have primarily focused on oil and gas development and their transportation, and these cases provide a potential roadmap for environmental groups to challenge future fossil fuel projects as well.
Most recent disputes addressing climate change in the United States have taken one of two forms: (1) challenges to analysis performed for project development or land use plans; or (2) allegations that oil and gas companies are responsible for climate change and have defrauded or misled investors about costs and causation related to climate change. Although oil and gas companies have borne the brunt of these challenges to date, environmental groups may use similar challenges to challenge future mining projects as well. Recent climate change challenges have delayed projects and required agencies to prepare additional quantitative analyses of project impacts associated with greenhouse gas emissions, ultimately delaying and increasing costs of project development. Moving forward, mining companies may expect project approvals to be prolonged, as agencies conduct additional analyses to mitigate litigation risk.
Beyond the United States, there have been a number of cases challenging the approval of resource and emission intensive projects, particularly the mining of fossil fuels. Such claims commonly allege that in approving a project or resource extraction, due consideration of climate change was not given by the relevant government agency. For example, in U.K. case ClientEarth v Secretary of State, an action was filed against the government for its approval of a conversion of a coal plant to natural gas. The claim alleged that the relevant decision-maker misinterpreted national climate policy and the U.K.'s net zero target, but was ultimately unsuccessful.
Australia has seen a string of unfavourable planning decisions in relation to development applications for mining projects over the last 12 months. These decisions have been based on the climate change impacts of the proposed new mines or extensions to existing mines, including in relation to the scope 3 emissions from the burning of project coal in overseas locations. Planning authorities in the state of New South Wales have shown an increased willingness to give significant weight to climate change impacts in determining development applications for coal mines following a landmark decision in the Land and Environment Court of NSW, which saw a development application for an open cut coal mine refused, partially on climate change grounds.
The law is continuing to evolve with two recent, significant decisions, both in May of this year. In the first decision, giving a boost to the Australian mining sector, one of Australia's largest coal producers won a court case at the Federal Court of Australia brought by a group of teenage activists seeking to block the expansion of the mine on the grounds of intergenerational equity and climate change. The project will develop metallurgical coal used in steel-making, a key contributor to global carbon reduction efforts.
In the second decision, the Federal Court of Australia held that the Minister for the Environment does hold a common law duty of care, recognised by the law of negligence, to Australian children to exercise her power in determining an application under the relevant Australian environmental legislation in a manner that does not cause them harm arising from the climate impact of the expansion of a coal mine project. The case was brought by a group of eight Australian children (by their litigation representative) on behalf of and representing other Australian children. In making the declaration sought, the judge held that there was a real, significant and foreseeable risk of harm for Australian children arising from a continued increase in global surface temperatures, to which the coal mine expansion project would contribute if it proceeded.
With the threat of climate and sustainability-linked claims omnipresent, many major mining companies now place sustainable mine development practices front and centre of their business. Advances in technology allow for precision mining and data analytics for increased efficiency and reduced footprint across land, energy and water. Vehicle fleets have been modernised through hydrogen power, enabling mining companies to address carbon emissions. The mining sector will need to continue to address its carbon footprint through greater electrification, automation, resource efficiency, innovation and the adoption of circular economy practices if it is to thrive in the face of the wave of climate and sustainability-related litigation.