BHP CEO Mike Henry has called for a “small set of common standards” covering environmental, social and governance (ESG) to underpin the access to capital required to unlock investment in the critical minerals needed for the transition to electric vehicles and renewable energy generation.

Speaking at the International Energy Agency’s (IEA’s) inaugural critical minerals summit in Paris, France, Henry argued that there were currently too many standards for the same ESG dimensions.

“This leads to confusion and dissipated effort,” he said, while noting that investment in the production of minerals such as copper, nickel, lithium and some steelmaking raw materials was lagging energy transition requirements.

Using copper as a case study, BHP estimated that about $250-billion in growth capital to 2030, in addition to sustaining capital, was needed to support the decarbonisation needed for a “plausible 1.5 degrees scenario”.

“Currently committed growth projects over this period only amount to around $40- or $50- billion today. More projects need to be identified, permitted and given the green light by those who are to invest in them,” Henry said.

Addressing a gathering that included several government Ministers, including US Energy Secretary Jennifer Granholm, who cautioned about the potential for critical minerals supply to be “weaponised”, Henry called for a global convergence of ESG and governance standards.

“We need a small set of common standards, upheld by all, and where performance against those standards is a greater and increasing determinant of access to capital.”

Such investment should be done with the least possible impact on the environment.

Miners, he added, should be granted access to resources based on the value they create, including for host communities and First Nations peoples.

“Opening a mine, done well, creates sustainable wealth and jobs [and] it brings tax revenues which, in turn, fund public services like health and education.”

Granholm added that regulatory conventions needed to be “aligned like never before” to ensure ongoing security of supply.

“We are going to have to think creatively about more than just how to do this work, but how to do it right – we’re in a race to save our planet and our people and we can’t make that race a race to the bottom.”

IEA director Fatih Birol said the issue of ESG standards harmonisation would feature during the closed portion of the conference and had also been identified as a priority by the IEA, which has already started raising concerns about the need for scaled-up investment to improve security of supply and to diversify supply chains.

In a recent report, the IEA highlighted the concentration of supply currently, with the Democratic Republic of Congo dominating cobalt supply, China holding half of planned lithium chemical plants and Indonesia representing nearly 90% of planned nickel refining facilities.

This point was underlined by European Commissioner for Internal Market Thierry Breton who said the European Union was determined not to “replace a fossil fuel dependence with a raw material one”.

“We know that some could weaponise these dependences against us,” Breton added, noting the price that had been paid recently in the bloc following Russia’s invasion of Ukraine.

Meanwhile, Henry also highlighted the potential difficulties in ensuring ongoing security of supply.

“This is going to be hard, as the grade or the percentage of metal in a given volume of ore is falling in existing operations.

“This means that more ore is going to be mined that doesn’t need to be mined just to stand still.

“Newly discovered and developed deposits are, on average, incrementally lower grade as well; they’re increasingly hard to find [and] oftentimes deeper and oftentimes smaller.

“Opportunities are being pursued in jurisdictions with less well developed or less established mining industries, institutions and governance.

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