TELESTO STRATEGY

Tariffs, Energy Crisis, and AI – an industrial executive view

JANUARY 2025

From Paramita Das's lens as a leading global executive in industrials and critical minerals, we asked her the most pressing questions on the future of ESG and Sustainability. Be it the rise of AI and automation, tariffs, the rolling out of China+1, or other geopolitical issues, business leaders will have to be ready for a myriad of new challenges in 2025 and beyond.

Paramita Das is the Chief Strategy Officer and Senior Advisor at Stardust Power Inc., an American developer of battery-grade lithium products. With over 20 years of experience in leadership roles at major global metals and minerals companies, she brings deep expertise in commercial, business development, and technical leadership. Previously, Ms. Das served as the Global Head of Marketing, Development and ESG (Chief Marketing Officer) Metals and Minerals at Rio Tinto. At Rio Tinto, she served as the Global Head of Marketing, Development, and ESG for Metals and Minerals, and has been instrumental in transforming business segments into profitable divisions. She currently serves on the boards of Genco Shipping & Trading Limited and Coeur Mining, Inc. and Toromont Industries. Paramita is dedicated to supporting Stardust Power’s mission of reshoring lithium production to enhance U.S. energy independence while driving sustainability and supply chain security.

1. What are the major risks facing ESG (Environmental, Social, and Governance) and Sustainability leaders in the mining sector and for industrials more broadly?

I see the main challenge to achieving sustainability leadership in mining and industrial as addressing emissions from materials, which often account for up to 80% of a supply chain’s impact. While processing and manufacturing have lesser effects, real progress requires transforming mining, extraction, and energy use—processes that inherently take time. However, time is a critical constraint for supply chains aiming to deliver meaningful results quickly. Without this focus on upstream emissions, sustainability efforts risk falling short of their goals.

Another major risk from my vantage is the global retrenchment from ESG investments, which is often driven by companies prioritizing short-term financial performance over long-term sustainability. I’ve seen the “greenhushing” trend discourage investments in impactful green projects, especially among large, high-cost, legacy companies. When these organizations revisit or reduce their ESG commitments, it sends a damaging signal to smaller companies and the wider industry that sustainability is optional, undermining collective progress. Large companies carry the responsibility to lead by example, and their retreat weakens the pathway for others, jeopardizing overall advancements in ESG and sustainability.

2.On the flip side, what are the greatest opportunities that ESG and Sustainability leaders should seize in mining and industrials? Are revenue-generating opportunities a myth? Which examples could you identify?

Leaders in mining and industrials should seize the growing market interest in tactile industries, as developed nations shift focus from digital and non-tangible sectors to manufacturing and materials. This trend has captured the attention of consumers, investors, and policymakers, offering a unique chance to shape a sustainable and secure future. National security concerns, including critical minerals, IP protection, and supply chain security, have driven bipartisan support across U.S. administrations, creating consistent momentum for ESG-focused companies. This shift underscores the strategic value of ESG initiatives, which can align with profitability while advancing sustainability goals.

In my role as Chief Strategy Officer and Senior Advisor to the Chief Executive at Stardust Power, I am privileged to be in an organization that exemplifies how ESG can drive both impact and revenue. By localizing the supply chain for critical minerals, it reduces carbon footprints and tailpipe emissions. Such models demonstrate the potential for ESG to be treated as a product that generates value. However, the broader challenge lies in scaling these efforts and evolving green premiums—additional costs justified by environmental benefits—to support future investments. Emerging examples, like the sustainable aviation fuel (SAF) industry and plastic recycling, highlight how scale and consistency will be essential for sustained success in monetizing ESG initiatives.

3. How will AI shape the future of ESG and Sustainability strategies for industrial companies?

Great push. There is no shortage of interest on the promise of AI in ESG and Sustainability for industrial companies. Especially since we often operate in challenging operational contexts and with tight margins. AI can serve as a powerful tool in advancing ESG goals by addressing a perennially entrenched challenge: the lack of comprehensive, automated, and predictive data analysis. By helping businesses assess their environmental footprint more effectively, AI enables a clearer understanding of where resources should be directed to achieve maximum impact. Currently, many companies apply ESG policies uniformly across their portfolios, which can make the cost and time investment prohibitive. AI’s ability to provide targeted, precise resource allocation can reduce these barriers, allowing companies to progress with their ESG commitments without overwhelming financial burdens.

Moreover, we expect AI to support companies beyond the implementation phase by aiding in the evaluation of ESG investments. With its ability to offer data-driven insights, AI can assist Boards of Directors in conducting Post Investment Reviews (PIRs) to assess the effectiveness of their ESG initiatives. It also enables a holistic view of the supply chain, from mining to market, helping various stakeholders collaborate to create a fully integrated, sustainable manufacturing process. As the green movement evolves, AI will be crucial in optimizing ESG efforts, ensuring companies can move forward with confidence, even before the emergence of green premiums

4. How should industrial business leaders in mining navigate geopolitical tensions between US and China? What will it mean for their risk management strategies?

Given the state of global supply chains, this is a topic that we follow very closely. The geopolitical tensions between the U.S. and China create both strategic risks and opportunities that require industrial leaders in mining to reassess their risk management frameworks. To mitigate exposure, companies should prioritize supply chain diversification, particularly by increasing domestic sourcing of critical minerals such as lithium and rare earth elements essential to high tech products and systems. This approach not only safeguards against potential disruptions, but also aligns with national security priorities. Additionally, given the volatility of regulatory environments, a proactive focus on compliance—ensuring agility in navigating evolving tariffs, export controls, and trade restrictions—is essential for minimizing operational risks.

Simultaneously, the shifting geopolitical landscape presents compelling growth opportunities for mining companies. By investing in domestic production capabilities and capitalizing on emerging markets outside China’s influence, companies can position themselves as strategic partners in the global transition to clean energy, defense, and advanced technologies. Furthermore, investing in sustainable mining technologies and innovations that align with environmental, social, and governance (ESG) principles will provide a competitive edge. Directors should focus on these areas not only to mitigate risk but also to capture long-term value from the growing demand for critical minerals, ensuring the company’s resilience and future market leadership.

5. How are industrial companies designing and implementing China+1 strategies? How does this intersect with their sustainability and ESG strategies?

Industrial companies in the U.S., including lithium mining and processing firms, are adopting China+1 strategies to reduce dependence on Chinese supply chains while strengthening domestic manufacturing. This approach focuses on reshoring production and building local processing facilities to leverage the U.S.’s rich lithium resources and advanced technology. Investments are being directed toward creating robust infrastructure, forming partnerships with U.S. manufacturers, and fostering workforce development to enhance supply chain resilience. While this boosts domestic production and reduces geopolitical risks, challenges include high labor costs, regulatory hurdles, and scaling operations efficiently to meet growing demand.

These strategies align closely with ESG goals by promoting sustainable, local production practices. U.S. firms prioritize renewable energy, advanced recycling technologies for lithium-ion batteries, and community engagement to ensure environmental and social sustainability. By focusing on domestic manufacturing, companies not only minimize emissions associated with global logistics but also contribute to U.S. economic growth and job creation. This approach positions U.S.-based manufacturers as leaders in sustainable production while bolstering national energy security and competitiveness in the global market.

6. Tariffs. With tariffs being touted not only for China, but for Canada and Mexico on Day 1 of Trump’s second term, how should business leaders in industrials and mining prepare themselves?

Tariffs have become an inescapable aspect of global trade, and the shift towards prioritizing North American neighbors, as mentioned, is something those of us in the mining, metals, and industrial sectors have already experienced. During the first Trump administration, the imposition of tariffs on steel and aluminum—initially aimed at China—was extended to all imports into the U.S. This created inflationary pressures for downstream manufacturers while providing support to upstream producers through rising commodity prices. Despite these challenges, American ingenuity thrived, with U.S. fabricators, processors, and manufacturers increasingly securing recycled, reused, and refurbished materials, resulting in a positive, though unintended, ESG outcome.

Looking ahead, if enhanced tariffs become a reality for all imports to the U.S., we can draw on historical lessons, but the consequences will likely include strained relationships with neighboring friendly countries and shifts in global trade patterns. Corporate Boards must revisit these past experiences, focusing on the need to redirect management efforts toward re-shoring, friendshoring, and securing supply chains with robust talent pipelines and digital capabilities. While the near-term challenges posed by tariffs are significant, they also present an opportunity for companies to adapt and ensure they are well-positioned to leverage these changes for future growth and resilience.

At Stardust . . .               From a Stardust Power perspective, the operating model is to provide a secure lithium supply chain to customers to ensure the speed to energy independence remains on track. Located in Oklahoma, centrally located in the country and matched up with a network of roadways, river and rail, Stardust Power’s focus is to ensure customers feel confident about their battery supply chain.

7. To what extent will automation factor into industrial supply chain reconfiguration? How does it intersect with labor issues, lack of qualified workforce, and increased labor costs domestically?

Automation will play a pivotal role in the reconfiguration of industrial supply chains, driving efficiency, resilience, and competitiveness. Technologies such as robotics, AI, and IoT enable faster production cycles, real-time data analytics, and predictive maintenance, making operations more agile and cost-effective. As global supply chains become increasingly complex and prone to disruption, automation will help industrial sectors optimize processes, reduce human error, and increase throughput, addressing the need for speed and flexibility. Boards should view automation not only as a cost-saving measure, but as a strategic investment in long-term operational agility and competitive advantage.

However, automation intersects with labor issues, particularly in the context of labor shortages, rising domestic wages, and the need for a skilled workforce. While automation can alleviate some of the pressures from labor shortages by reducing reliance on human intervention, it also creates opportunities for job transformation. Automation is unlikely to replace all jobs but will require a shift in workforce skills, creating demand for higher-tech roles in machine maintenance, data analysis, and system optimization. Boards should focus on reskilling and upskilling initiatives to ensure the workforce adapts to these changes, balancing the integration of technology with the continued value of human expertise in the supply chain.

For the reasons stated above, Stardust has chosen to locate in Oklahoma, which is rich with oil and gas skilled labor and offers a business friendly environment. We have the opportunity to create the next with the learnings from different sectors and a future-facing design.

8. With regards to worsening climate shocks to global supply chains and industrial infrastructure, what do you see as strategies for industrial and mining companies to ensure business continuity and reduce risk for their operations and across supply chains?

To ensure business continuity and reduce risk, industrial and mining companies must implement strategies that not only protect their operations but also meet (or exceed) expectations of capital markets. One essential approach is diversifying supply chains. For example, mining companies can reduce dependence on single-source suppliers or transportation routes by establishing alternative sourcing locations, as seen with companies like Stardust Power. The refinery Stardust is building in Oklahoma is a hub and spoke design. The refinery is the hub and the spokes go to different sources of feedstock. Additionally, industrial firms can increase inventory buffers for critical materials to account for potential delays, enhancing their ability to continue operations despite climate disruptions.

Another critical factor will be investment in climate-resilient infrastructure. For instance, Anglo American has invested in more robust, weather-resistant processing plants and improved energy infrastructure to ensure operations continue even during extreme heat or flooding.

From a financial capital market perspective, companies must focus on aligning their operations with the growing demand for climate-related financial disclosures and ESG reporting frameworks. For example, mining companies like BHP have incorporated detailed climate risk assessments into their financial reporting, providing transparency on their vulnerability to climate shocks, along with strategies for reducing their carbon footprint. This not only mitigates risk but also positions them favorably for investors looking to comply with climate-focused investment frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), which is now managed by IFRS. Furthermore, companies can tap into green financing to fund climate-resilient initiatives. For instance, a number of firms in the mining and industrial sectors have issued green bonds to fund sustainable infrastructure projects, which helps attract investment from funds prioritizing environmental sustainability. Investors in capital markets should increasingly scrutinize these efforts, recognizing that companies with strong climate risk management practices will be better positioned to weather disruptions, secure capital more effectively, and maintain operational performance in the face of climate challenges.

9. In one sentence, what are you most excited about in 2025?

Speed to market, focus on delivery and moving the dial for US energy independence is going to be on the top of mind for each and every one of us at Stardust Power.

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