With technology, energy and society set to undergo massive transformations over the next few decades, the mining sector may never have been more important than it is today.
Globally, demand for consumer electronics such as mobile phones, air conditioners and refrigerators is on the rise. Additionally, the energy needs and technological advancement associated with artificial intelligence (AI) and data centers are driving even more demand from commercial sectors.
However, the mining industry has been known for its heavy environmental footprint and complex relationships with local communities. As much of the world pushes towards a greener future, mining companies are increasingly integrating environmental and social responsibility as they operate mines and projects around the world.
In the opening keynote speech at the 2026 Prospectors & Developers Association of Canada convention in Toronto, Vale (NYSE:VALE) CEO Gustavo Pimenta, who joined the company in 2021 following one of the worst mining accidents in Brazil’s history, spoke about these challenges and the importance of addressing them.
Electrification continues driving minerals demand
Since the start of the third millennium, there has been a broad societal shift.
Not only has the Earth’s population exploded from about 6 billion in 2001 to over 8 billion today, but the needs of both developing and developed nations are changing and growing.
Increasingly, the populations in many developing nations are urbanizing, driving demand for the materials necessary to build and modernize the infrastructure, including electricity grids, needed to adequately support them.
Likewise, western desires and demands are also changing. Consumers are driving a transition to low-carbon and sustainable industries, while also moving toward more service- and tech-reliant economies.
These shifts in both developed and developing economies have one thing in common: they are not possible without the mining sector. However, it’s struggling to match the pace of demand growth.
“We’ll have to increase the supply of minerals in general by effect of five to six times, vis-a-vis everything with mining to date,” Pimenta said. He pointed out that without mining, there is no AI and no energy transition.
“Electrification is a massive theme and trend, the electrification of everything, that is driving so much of the copper excitement lately,” he added. However, Pimenta said it isn’t just copper demand that is increasing — he pointed to rising demand for other metals such as nickel, iron and rare earths.
Although demand for these commodities has been high, it’s only recently that more consumers are becoming aware of the important role they play in how electricity is delivered or how mobile phones are made.
For Pimenta, this has led to a disconnect, with NVIDIA (NASDAQ:NVDA) and its US$4.3 trillion market cap exceeding the US$3.8 trillion captured by the top 300 mining companies.
However, he sees some balance returning.
“That is certainly something that is imbalanced, and we started to see a little bit of that rebalance today with money moving away from tech into real, important assets like the commodity assets,” he said.
Evolving economic and environmental strategies for mining
As awareness increases alongside demand, there has been a greater pressure on mining companies to move beyond their checkered pasts and to recognize their own role in creating a sustainable, responsible industry.
Pimenta emphasized this point.
“We can’t just stand and have a conversation where we are telling people, ‘I’m sorry that you have to buy from me.’ We have to go beyond that. We have to move from being essential to something else,” he said.
He noted that his company, Vale, isn’t just focused on its operations in Canada or Brazil; it has operations in 31 countries, and the scope of its responsibility is global.
Pimenta suggested that the future of mining will require a different way of operating, and that some of the needed changes are already being implemented today, citing the adoption of technology and greater automation.
In terms of how Vale is progressing this at its own operations, the company’s use of these technologies led to its Brucutu mine in Brazil being awarded the Shingo prize for operational excellence.
This marked the first time the prize has been awarded to an operation in Latin America.
“That classification shows that moving towards that future not only is the right thing because it’s safe, but also it’s more productive and more efficient. I think we have to make sure we continue to accelerate that,” Pimenta said.
Another area of focus for Pimenta is for Vale to develop what he sees as the workforce of the future.
“They have to be able to deal with AI and find ways to be more productive,” he said. “So there’s a new workforce needed that coexists with the senior, experienced workforce that is already in the companies.”
While automation addresses some core safety and business case aspects of mining’s future, Pimenta also focused on environmental concerns as a central concern. Using the example of Vale’s Carajás operation, he explained how mining companies can offer protection to the lands on which they operate.
The site covers about 800,000 hectares, but because of an agreement it made with the Brazilian government in the 1980s, the company uses only 2 percent of the total area for its mining operations, and preserves everything else.
“What has happened to that area? Everything outside the area we protect has been devastated. We protect with technology, guards, a partnership with the Brazilian Federal Police, and a lot of investment,” Pimenta said.
He acknowledged that mines will impact the environment, and it may seem counterintuitive that companies like Vale can be stewards of the land in ways that governments can’t.
However, Vale’s own past hasn’t been without incident. In 2019, a tailings dam collapsed at its Brumadinho operation, sending 13 million cubic meters of mud and mining waste downstream, killing 272 people.
For his part, Pimenta didn’t shy away from this, and said it forced the company to reassess its operations.
“Today 5 percent of our production is without dams, dry stack infiltration, and that’s the way we will continue to move. We are doing more use of circularity. It’s cheaper, less environmental impact,” he said, noting the use of reprocessing of mine waste to gather more resources.
Additionally, Vale has also been working to reduce its carbon footprint. Pimenta stated that the company had been looking at several ways to do this including using ethanol in its trucks at its Brazilian mines instead of diesel.
However, mines are only one part of the equation for decarbonization, as even more carbon dioxide is emitted during the production of steel.
“The steel industry is still very dependent on fossil fuel, coal, and that’s how most of the production is based. We are working on two main fronts. The first is green solutions, new products that will help our clients to decarbonize,” he said.
One of these solutions is a new iron ore briquette that Pimenta says uses a cold agglomeration process that can reduce the carbon footprint when used in a blast furnace.
The second front Vale is focused on is the development of mega hubs to produce steel in regions that have cheap access to lower-carbon fuels like hydrogen.
Supporting local communities is key
Beyond the economics and the environmental concerns with mining, Pimenta says that mining companies hold social commitments to the communities in which they operate.
“Back in 2021, when I joined the company, we announced a target to lift 500,000 people out of poverty,” he said.
This goal drew a lot of questions from Vale shareholders who asked how much it would cost, and if this meant putting people on payroll. Pimenta explained Vale co-developed a methodology to help them address the specific needs of different communities where they operate.
“Sometimes it’s education, sometimes it’s job opportunities, sometimes they just need to eat to have another day,” he explained. “Today we can measure, we know the social security number of each one of the 52,000 people that, from international standards measurement, have been lifted out of poverty.”
Operations should go beyond mining and making money; they should also contribute positively to the community. If they do so, Pimenta says there could be a shift in how mining companies are perceived. Rather than being pariahs, he hopes they can become welcomed for the value they bring to people.
The company also has the goal of increasing the percentage of women in its workforce. “Diversity is another element that, despite people not talking about it, is important. It was important before, and it continues to be important,” he said.
Investor takeaway
Pimenta addressed early in his keynote that demand for resources is there, but access requires money — it’s started to flow, but he suggested that changing perceptions and approaches within the mining industry is critical.
While there has been a push from some to move away from initiatives like ESG, or diversity, equity and inclusion, the reality is that they’ve permeated the mining industry for a long time now.
Throughout the presentation, Pimenta laid out how these goals have not only become foundational to the way Vale operates, but they can also provide long-term economic benefits to mining companies.
Initiatives, such as greater automation, have made Vale’s operations more efficient, driving cost-effectiveness, while dry tailings have enabled the reprocessing of mining waste and the maximization of output.
Social programs can drive community involvement and help make the operations more desirable to the communities where they operate. This alone has been a bottleneck in permitting in many jurisdictions; if communities welcome mines, it can reduce significant red tape.
Likewise, a diversified workforce can create more jobs in the community while opening the industry to people who haven’t been accepted in the past, helping address another industry challenge: finding new workers.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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