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Overview
PwC’s recently released report ‘Climate risks to nine key commodities: Protecting people and prosperity’ considered climate-related risks faced by the global producers of nine essential commodities, grouped into three categories:
- Vital metals: iron ore, bauxite and zinc
- Critical minerals: cobalt, copper and lithium
- Key crops: maize, wheat and rice
For companies that depend on these commodities, climate change has become a real and present threat. In South Africa and other countries, drought and heat stress will impact the availability of vital metals, critical minerals and key crops needed to produce the materials and food products essential for economic development and human well being.
For example, PwC’s climate experts estimate that 61% of global iron ore mining, 62% of bauxite mining and 25% of zinc mining are at significant, high or extreme risk of heat stress by 2035. Most of the mining for these vital metals occurs in surface and open pit operations. We also estimate that 20% of cobalt mining, 40% of copper mining and 38% of lithium mining are at significant, high or extreme risk globally by 2035. A lack of water undermines water-intensive mining operations, including ore extraction, mineral processing and dust control. Finally, our experts believe 24% of global maize production, 35% of wheat production and 84% of rice production are at significant, high or extreme risk of heat stress by 2035. Workers in the agricultural sector are particularly at risk from heat stress, with exposure to high temperatures reducing labour productivity.
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In this edition:
Long-term climate risks to the production of important commodities
Gauging the future impact of drought and heat stress on vital metals, critical minerals, and key crops—and how companies can respond.
In this edition of the South Africa Economic Outlook, we look at what these commodities are used for and their vulnerability to drought and heat stress. The analysis includes South Africa-specific information for each of the three commodity categories, including how the country uses them in the making of steel, vehicles and food products. To help stimulate discussion on how companies should respond to drought and heat stress risk, each analysis includes an anonymised case study of how companies are responding to these challenges.
Key content in this report includes:
- Protecting people and prosperity: Understanding climate risk scenarios for nine key commodities
- Drought and heat stress risks: Their impact on vital metals, critical minerals and key crops
- Vital metals in steel production: Factories and foundries making metal products are key to industrialisation and localisation
- Critical minerals in automotive manufacturing: Making electric vehicles will require a significant increase in local battery production
- Key crops in food production: Grain-dependent products account for 70% of South Africans’ food budget
- Climate risk in insurance: Risk carriers need to turn climate risks into opportunities
- How PwC assists our clients with business resilience decisions, helping them anticipate, manage and recover effectively from disruptions associated with climate change
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Contact us
PwC Africa ESG Platform Leader, Strategy& and Chief Economist, Strategy& South Africa
Tel: +27 (0) 82 708 2330
