A “tonne of money” flowing into the mineral and metal extraction space from Silicon Valley and other sources is going to target technologies that allow miners to “do less to produce more”, a panel of veteran industry leaders said on a webcast this week. A major factor, they said, was the lack of buildable new so-called critical mineral projects in the pipeline.
Slower permitting and project development cycles, heightened geopolitical risk in prospective mineral provinces and even bottlenecks in ‘critical’ mining equipment and service supply chains are all contributing to misalignment between forecast demand for certain key minerals and the timing of new supply coming through the usual channels.
“You can’t name me the 10 projects that there are holes in today that are actually buildable,” former BHP senior executive and current CEO of Chesapeake Gold, Alan Pangbourne, said of the all-important copper sector. That was before he outlined the scale of the structural challenge in front of supply of a metal seen as crucial to the world’s rapid transition to renewable power transmission and consumption.
“I’m currently sitting in Chile,” Pangbourne said.
“Forty per cent of the world’s copper comes out of this country and it comes out of less than 10 mines.
“Current [global] production is 24 Escondida’s, the biggest copper mine in the world.
“You can’t replace them. The average time to take a fast copper project to production – and I built one 10 or 15 years ago – is at least 10 years. In Chile now … you’re out to 12 years.
“Chile is incapable of building more than three projects at the same time.
“It doesn’t have the contractors, the people, and materials.
“There are only two suppliers that can put together the large shovels.
“There is only supplier who installs the large wrap-around motors.
“There are physical constraints.
“The big shovel suppliers, P&H [Komatsu] and Bucyrus [Caterpillar], only make one shovel a month. Of course they can gear up, but that takes time, too.”
More generally, alternatives are being sought to conventional highly energy, water, material-movement, waste and ultimately capital intensive mining and mineral extraction methods. On the one hand, massive new projects are taking longer than ever to develop, or are in high-risk jurisdictions, or both.
Increasing production from current deposits, using existing infrastructure and new or proven technology, is a major focus of miners and their investors.
On the other hand, environmental, social and governance pressures on miners – from communities, regulators, investors and increasingly customers – are demanding greater efficiency, less waste and lower carbon footprints.
“People have been working on these issues for the last decade or two and so there’s now more technology that’s gone past the laboratory stage and is ready to be scaled,” CoTec Holdings Corp CEO Julian Treger said on the webcast.
“A lot of the technology is cheaper and more modular, so the historical barriers to entry regarding economies of scale and the enormous amounts of capital that had to be invested to achieve change has altered and it’s a much more flexible environment.
“There is a much more vibrant environment for getting funding.
“There is a tonne of money that’s come into the sector from Silicon Valley.”
Vehicle manufacturers and other end users were also starting to pour money into projects to secure supplies of lithium and other materials. They would bring with them new ideas and perhaps directives about the use of capital.
“We’ve seen General Motors and Volkswagen getting into lithium which means we’re now going to have people involved in these businesses who are used to using technology and are used to having innovative points of view,” said 45-year mining industry veteran and current CEO of Advance United, James Atkinson said.
“I think there’s going to be more questions about why certain things are not happening in the mining business.
“I see that as a positive thing.”
Treger said CoTec, a public newcomer with a lot of veteran mining heads on board, had looked at 200 technologies.
“We’ve invested so far in three, and we have term sheets out with another two,” he said.
“The ones that we’ve invested in [include a process to] make the pellets for green steel without heat, which would save 1% of the world’s global emissions, and is again modular and much cheaper. It can also be used to re-agglomerate waste.
“We’ve invested in a plant that can apply this technology.
“And we’ve invested in a green technology to recycle magnets, and extract the rare earths from them in a clean, green way.
“The commonality of the technologies we’ve invested in is that they are much less intensive in terms of heat and water, they’re much cheaper and much more modular. And I think those are some of the ways the world is going to get the commodities it’s going to need.
“We are looking at the big issues and trying to come up with solutions for them which can really move the needle in terms of how the world operates.”
According to Pangbourne, whose company has “borrowed” sulphide leaching technology from the copper industry to try to transform the economics and environmental footprint of one of Mexico’s largest undeveloped gold-silver projects, technology has already had a significant impact for some mining companies and this would only become more pervasive in the wider industry this decade.
“Whatever the technology is that allows you to do less to produce more, and use less input, improves your margins,” he said.
“And there’s hundreds of them, all over the place.
“Whether it’s as simple as vibration monitoring to avoid catastrophic failures, and the data management you can do now.
“There was one technology I installed 10 or 15 years ago [and] at the time we first looked at it data processing speeds weren’t high enough for image processing in five seconds of an image 1m-by-1m-by-2m. They are now. So you can do that now to improve your quality control.
“If you look at what Rio and BHP have done with remote control rooms … Once you can get it into that [communication] cable, you can be anywhere in the world.
“The level of technology that they’re using today is nothing like it was 20 years ago. You’ve got fully autonomous mining fleets, you’ve got remote control centres; the number of sensors and instruments, and data you can get off [machines] now … you have to see it to believe it.”
Fireweed Metals, another small, public company sitting on globally significant deposits of zinc and tungsten in Yukon, Canada, is looking to proven but underutilised technology to help shape the economic and regulatory path it takes to production.
“A technology that’s been on my radar for the past few years is ore sorting, particularly particle-based ore sorting, and we’ve trialled this method at our Boundary Zone [target] and it works best where you have very heterogeneous mineralisation, that’s very sort of nuggety,” said chief geologist, Dr Jack Milton.
“Essentially it’s something that could be implemented in a pit, or underground … and it rejects waste before you even send it through the mill, using a variety of different sensors; either XRF or XRT, looking at either chemistry or density.
“It’s a way that miners can increase their efficiencies, improve recoveries [and] improve head grades that are being fed into the mill, and this has many knock-on effects for the operation. If your mill is your bottleneck of your throughput that is constrained to a certain tonnage per year, and you’re able to double the grade that you put through that, you’re going to get double the metal.
“Your recoveries are likely going to increase because typically you get better recovery if your head grade is higher; not in all cases, but typically. And your tailings volumes are going to be massively reduced as well.
“It ticks all the boxes mentioned earlier. It has huge economic benefits to these operations, and the social benefits and regulatory benefits of reduced waste are also very significant.
“And I think adopting it at an early stage of the project lets you capture that value at that stage rather than by the time it’s being mined.
“And capturing the appropriate data at the exploration level to enable the technology to be optimised in the best way forward for mine planning and mine scheduling.”
The panellists agreed higher commodity prices would, of course, incentivise exploration and possibly development of some marginal projects.
But technology was a real key now to shifting investor sentiment and perhaps project development timelines.