Electrification of motive power is forecast to become the biggest energy transition in history. Two of the biggest components of this transition are the phasing out of internal combustion engines in favour of electric vehicles and the rapid growth of offshore wind power, both of which are heavily dependent of powerful rare earth permanent magnets.
Currently China supplies over 90% of these magnets and has made it clear that it is going to need all its production for its own US$11 trillion 2060 carbon neutral plan and, on top of this, feels that it is under no obligation to supply them to the rest of the world.
An additional concern for European and US OEMs is that the current supply from China may not meet their ESG standards.
Pensana plc (LON:PRE) is at the forefront of tackling these two challenges. By establishing an independent and sustainable supply chain to the highest international standards we are able to provide our customers with the assurances they need, firstly in terms of ESG transparency and secondly in terms of supply chain resilience.
Following our announcement on 20 September to partner with Polestar (Nasdaq: PSNY) on its moon-shot goal of creating the first truly climate-neutral car by 2030, Pensana has released its strategic Blueprint for Sustainable Rare Earths, which can be downloaded from www.pensana.co.uk/sustainability.
Pensana aims to produce the lowest embedded carbon products in the rare earth industry as well as a deep and meaningful carbon reduction with the aim to achieve net zero across the value chain by no later than 2040.
Pensana’s actions will allow the business to place itself among the leading companies addressing climate change issues.
The Company is making big strides towards establishing a climate-neutral supply chain.
· CICERO, Norway’s foremost institute for climate research, awarded Pensana Green Bond accreditation in July, rating the planned operations as Light Green with a Governance score of Good.
· Low carbon power will be provided at Saltend in the UK, following a signed letter of intent securing a private wire connection to Yorkshire Energy Park for 4MW rising to 10MW of low carbon electricity for 10 years. The 200MW offshore wind connected battery will provide low carbon power for the separation facility and later will power the conversion of NdPr oxides into magnet metal.
· We are partnering with Equinor on the H2H Saltend project studying the use of low carbon hydrogen to recycle the seven tonnes of permanent magnets in each of the 260-metre-high offshore wind turbines being installed in the 3.6GW Dogger Bank windfarm.
· Low cost, low carbon hydroelectric power will be provided at the Longonjo operations in Angola under a ten-year contract. An innovative processing route developed by the Pensana process team led by Chief Operations Officer Rocky Smith, will recycle process chemicals.
· In July we were delighted to welcome the Secretary of State at the Department of Business, Energy and Industrial Strategy the Rt Hon Kwasi Kwarteng MP to the Saltend ground breaking ceremony, and we were particularly honoured that he chose to launch the UK’s Critical Minerals Strategy at the event.
Chairman Paul Atherley commented:
“The Pensana Blueprint for Sustainable Rare Earths is an important document as it clearly sets out our commitment to all stakeholders and importantly to our customers that we put the highest ESG standards at the heart of our operations.
Sustainability is always going to be work in progress however I am most grateful to the ESG Committee for its leadership on this Blueprint which provides a clear pathway to embedding ESG into every decision, at every stage and using independent experts to monitor our progress.”
ESG Committee Chairperson’s Introduction to the Pensana Plc Blueprint to Sustainable Rare Earths
The world is waking up to the climate crisis, which is one of the biggest challenges facing society today, with the need to address it now more pressing than ever.
Renewable energy will form a key part of the solution and ramping up its production and use will require the most significant energy transition in history. Pensana sits right at the centre of this transition and exists to meet this challenge.
Sourcing and processing rare earths and other critical minerals are increasingly recognised as vital for decarbonisation, particularly as key components for the magnets used in electric vehicles and wind turbines.
The importance of these critical minerals has long been understood by China, which controls the majority of their sourcing and processing. However, there has been enormous environmental damage during such production processes and, going forward, China itself will have huge demands on rare earth resources for its own energy transition needs.
Consequently, security of supply and environmental concerns are now firmly on the agenda for Western countries, with recognition that a new model is not only desirable, but imperative.
Pensana is committed to being part of this new model. From the start the company has sought to do things differently, operating with the highest environmental, social and governance standards. Pensana understands that ESG concerns are now rightly and increasingly important for governments, regulators, investors and consumers, and the risks of poor ESG standards are clear.
In line with this, ESG is embedded in every decision the company takes, at every stage of its operations. Whether protecting and enhancing the environment, assessing emissions, using renewable energy to produce the lowest carbon product or fostering a circular economy, Pensana is acutely focused on doing the right thing.
Pensana also knows that it has not reached the end goal and is always looking to improve. This is why the company uses independent experts to evaluate the business, in line with leading international standards, allowing it to review and enhance its ESG systems and processes.
The purpose of this ESG blueprint is to demonstrate Pensana’s transparency so that stakeholders can see for themselves that the Company puts the highest of ESG standards at the heart of its operations. I am proud of Pensana’s commitment to ESG and that it is at the forefront in this field.
The Right Honourable Baroness Lindsay Northover
Independent Non-Executive Director