Mining Scope 3 Emissions Reporting Australia

Mining Scope 3 emissions represent the largest portion of the mining sector’s carbon footprint, encompassing emissions from supply chains, downstream processing, and product use. Under ASRS and global reporting frameworks, mining companies must address Scope 3 disclosure as investors increasingly demand comprehensive emissions reporting.

Why Scope 3 Matters for Mining

For mining companies, Scope 3 emissions typically dwarf Scope 1 and Scope 2 combined. Processing and use of mined commodities—particularly coal, iron ore, and other minerals—creates significant downstream emissions that mining companies are increasingly expected to report and manage.

ASRS reporting requirements, combined with investor expectations and global decarbonisation commitments, make Scope 3 disclosure essential for Australian mining operations. Companies that fail to address Scope 3 may face:

1. Investor scrutiny: Shareholders asking for comprehensive emissions data
2. Capital access challenges: Finance becoming harder for high-Scope 3 operations
3. Regulatory pressure: Increasing disclosure requirements
4. Competitive disadvantage: Lagging behind industry peers

Key Scope 3 Categories for Mining

Of the 15 GHG Protocol Scope 3 categories, several are particularly relevant to mining:

Category 1: Purchased Goods and Services

Upstream emissions from mining inputs:

• Explosives and processing chemicals
• Equipment manufacturing
• Contractor services
• Water and energy inputs
• Safety equipment and consumables

Category 4: Upstream Transportation

Transport of inputs to mining sites:

• Fuel delivery to remote sites
• Equipment transport
• Supply chain logistics

Category 9: Downstream Transportation

Transport of mining products to customers:

• Rail transport to ports
• Shipping to overseas customers
• Port handling and storage

Category 10: Processing of Sold Products

Emissions from downstream mineral processing:

• Metal smelting and refining
• Mineral processing
• Product manufacturing

For iron ore producers, Category 10 includes emissions from steelmaking—a major source of downstream emissions. For coal miners, this includes emissions from coal combustion.

Category 11: Use of Sold Products

Emissions from the use of mining products, most significant for:

1. Thermal coal: Combustion emissions from power generation
2. Metallurgical coal: Emissions from steelmaking
3. Oil and gas: Combustion in various applications

For coal miners, Category 11 is typically the largest Scope 3 source, often representing over 90% of total emissions when including the full combustion impact of sold coal.

Scope 3 Calculation Methods for Mining

Product Use Emissions (Category 11)

For coal and hydrocarbon products:

Mass of product sold × Product emission factor = Category 11 emissions Example calculation for thermal coal:: – Coal sold: 10 million tonnes – Emission factor: 2.5 t COâ‚‚-e per tonne of coal (varies by coal type) – Category 11 emissions: 10,000,000 × 2.5 = 25,000,000 t COâ‚‚-e

Downstream Processing (Category 10)

For minerals requiring processing:

1. Identify customers: Determine where ore is sent for processing
2. Obtain processing data: Collect emissions intensity from customers where possible
3. Apply factors: Use industry factors where customer data unavailable
4. Calculate: Multiply tonnes sold by processing emission factor

Transportation (Categories 4, 9)

Calculate transport emissions using:

Distance (km) × Mass (tonnes) × Transport emission factor = Transport emissions

Consider different modes: rail, road, shipping. Each has distinct emission factors.

Scope 3 Reduction Strategies for Mining

Downstream Engagement

Work with customers to reduce downstream emissions:

1. Partner with steelmakers on decarbonisation pathways
2. Support development of hydrogen-based steelmaking
3. Engage with coal customers on transition planning
4. Promote energy efficiency in downstream processing

Product Portfolio Shifts

Adjust product mix to reduce Scope 3 intensity:

1. Diversify into lower-carbon commodities (lithium, copper)
2. Reduce thermal coal production over time
3. Develop position in minerals for clean energy (nickel, cobalt)

Supply Chain Decarbonisation

Reduce upstream Scope 3 emissions:

1. Choose suppliers based on emissions performance
2. Electrify supply chain transport where possible
3. Localise supply chains to reduce transport distances

Scope 3 Reporting Under ASRS

Mining companies must disclose:

1. Material categories: Identify relevant Scope 3 categories
2. Calculation methodology: Describe approach for each category
3. Emissions by category: Report material Scope 3 emissions
4. Data quality: Assess uncertainty and reliability
5. Targets: Describe Scope 3 reduction targets and progress
6. Engagement: Document downstream engagement strategies

ESG Solutions Australia Mining Scope 3 Support

ESG Solutions Australia offers mining sector expertise for Scope 3 reporting:

• Materiality assessment for mining Scope 3 categories
• Customer engagement strategies for Category 10 and 11
• Calculation methodology aligned to GHG Protocol
• Target setting and reduction pathway development

Contact ESG Solutions Australia for mining-specific Scope 3 support.

Key Takeaways

1. Scope 3 dominates mining emissions: Often over 90% of total footprint
2. Focus on Category 11: Combustion of sold products is the primary source
3. Engage downstream: Work with customers on decarbonisation
4. Document methodology: Transparent calculation approach for assurance
5. Set targets: Demonstrate commitment to Scope 3 reduction

Explore our ESG Reporting for Mining page and Mining Water Stewardship guide for comprehensive mining ESG.