It did not take long for COP26 to turn into a farce this week with UN Secretary General António Guterres pleading with the gathered highnesses and excellencies to declare enough is enough.
Socialist party ex-PM of Portugal, Guterres delivered a rousing 10-minute speech at the opening ceremony saying (around the 0:45 mark) “we face a stark choice – either we stop it or it stops us”:
“It is time to say enough!
“Enough of treating nature like a toilet, enough of burning and drilling and mining our way deeper. We are digging our own graves.”
Who’s going to tell him?
“The International Energy Agency’s annual World Energy Outlook […] is probably the closest thing to a bible in the energy world,” says a Bloomberg article following the publication of the 2021 edition.
Released earlier than usual in time for the Conference of Parties (COP26) starting in Glasgow, this edition – the 44th – “has been designed, exceptionally, as a guidebook to COP26”.
At 386 pages IEA WEO 2021 is quite the tome (download here). Under Section 6.3.1, you’ll find the energy bible’s take on “critical minerals”. It is six pages in total.
Those six pages may be headlined critical minerals, but it’s hard to detect a sense of urgency in Section 6.3.1:
“The rapid deployment of low-carbon technologies as part of clean energy transitions implies a significant increase in demand for critical minerals.”
The word “significant” used here contains multitudes (lithium “100 times current levels” according to the IEA’s own calculations) and the Paris-based firm has some questionne:
“The prospect of a rapid increase in demand for critical minerals – well above anything seen previously in most cases – raises questions about the availability and reliability of supply.”
With only six pages to work with, the IEA has to be succinct in its appraisal of the mining industry:
“The [supply] challenges are compounded by long lead times for the development of new projects, declining resource quality, growing scrutiny of environmental and social performance and a lack of geographical diversity in extraction and processing operations.”
Questions raised. Challenges compounded. Take that global warming!
Edinburgh-based Wood Mackenzie has also been doing some research ahead of COP26.
Woodmac, which beat the IEA by four years, releasing its first oil report in 1973, is expanding its mining and metals practice, most recently with the acquisition of London-based Roskill.
A new report by Julian Kettle, SVP of Woodmac’s metals and mining division, and senior analyst Kamil Wlazly, answers the questions about the availability of supply in the very title:
Mission impossible: supplying the base metals for accelerated decarbonisation
Woodmac is refreshingly blunt in its assessment of mining’s role in fighting climate change:
“The energy transition starts and ends with metals.”
“Achieving global net zero is inexorably linked to base metals supply.”
“Base metals capex needs to quadruple to about $2 trillion to achieve an accelerated energy transition.”
Whoomp, there it is.
There are many eye-popping graphs in Mission impossible (download here) but this one perfectly illustrates why the decarbonisation goals of the Conference of Parties, without plans for new mines, only add hot air to the warming planet.
Woodmac gets straight to the point: “delivering the base metals to meet [net zero 2050] pathways strains project delivery beyond breaking point from people and plant to financing and permitting.”
Copper, which Woodmac emphasizes “sits at the nexus of the energy transition” stands out particularly.
The 19 million tonnes of additional copper that need to be delivered for net-zero 2050 implies a new La Escondida must be discovered and enter production every year for the next 20 years.
Even if you focus on just one of the obstacles bringing new copper supply online – the time it takes to build a new mine – and leave aside all other factors, net-zero 2050 has zero chance.
Consider that among the world’s largest copper mines, La Escondida is a relative newcomer – it was discovered in 1981, and only hit 1 million tonnes 20 years later. (MINING.COM’s official measure of copper production is the escondida which equals one million tonnes.)
The weighted average discovery year of the planet’s top 20 biggest copper mines is 1928. US number one mine Morenci (less than half an escondida in 2020) was discovered in 1870. Chile and the world’s number two copper mine Collahuasi (O.63 escondida) dates back to 1880.
When Congo’s Kamoa-Kakula went into production in May this year it was the biggest new mine to do so since Escondida. By 2028 it will produce 840,000 tonnes a year. Kamoa-Kakula is a poster child for rapid mine development, yet Robert Friedland’s exploration team discovered the deposit back in 2003.
With ample reserves, the US has a number of uncommitted projects that would support the Conference of Parties and their wannabe cheerleader, the Biden administration, advancing its climate goals.
A top contender is the Resolution project in Arizona, near the town of Superior in the area known as the Copper Triangle.
Contained copper tops 10 million tonnes, making it the sixth-largest measured deposit in the world. It’s an underground high-grade mine that shrinks its environmental footprint.
The world’s number one and two mining companies, BHP and Rio Tinto, have already spent $2 billion on it, including reclamation of a historical mine. The deposit was discovered in 1995 and 26 years later remains stuck in permitting hell.
Looks like a perfect candidate for fast track approval to help with those lofty climate goals and create those millions of promised green jobs.
Right? Trump – five days before leaving office – publishes a pivotal environmental report on the project.
Wrong. Biden rescinds the study and Democrats add specific wording to the $X.X trillion infrastructure bill that would block Resolution from going ahead.
Perhaps not surprising then, the news that BHP and others are looking at the previously shunned African copperbelt.
When central Africa is a friendlier jurisdiction for miners than the US, there may be something wrong with your strat… For more see above and below.
The White House’s policy is one of relying on other countries to supply metals to the US because “it’s not that hard to dig a hole. What’s hard is getting that stuff out and getting it to processing facilities.”
A strategy that worked so well for the US with rare earths.
Perhaps the White House got the idea from Indonesia, which insists miners build processing plants and refineries to own the entire battery metal supply chain and by extension huge chunks of electric vehicle manufacture.
Tiny difference though: the grand design of Jakarta, like Beijing, Santiago, et al, includes the first link in the supply chain.
And when things go wrong in metals supply for automaking, they go really wrong, as the EU found out this month.
Biden desperately wants a deal before COP26 to brag about all the ways it fights emissions by subsidizing
American electric cars, windmills and solar panels overseas lithium, nickel, cobalt, copper, silver, and rare earth mining companies.
As if the permitting process isn’t torture enough, there’s more in Biden’s bill that’ll make miners and explorers gnash their teeth and pull their hair out.
Also included in the reconciliation spending measure is an 8% gross – yes, gross isn’t it – royalty on existing mines and 4% on new ones. New ones? Ha!
There would also be a 7 cent fee for every tonne of rock moved.
This is a particularly confounding proposal. Not easy to find anything in the tax code that shows this kind of ignorance of how an industry operates, but it would not be dissimilar to taxing farmers for every acre ploughed (multiplied by the length of the blades just to make sure you precisely measure the displaced dirt), regardless of any harvest.
It was two years ago almost to the day on the occasion of a Greta Thunberg protest in MINING.COM’s hometown of Vancouver, that this paper declared Thunberg and Alexandria Ocasio-Cortez as the mining industry’s unlikely heroines.
We urged miners to embrace the goals of the environmental movement and initiatives like the Green New Deal.
With all the glaring holes drilled into COP26’s decarbonisation plans, it sure feels like it was Greta and AOC that copped out of this embrace, not mining.
I will bet this guy and all of the other bleeding hearts all used cellphones with metal in them, to stand in front of cameras that use copper after getting out of cars made of steel and aluminium with batteries that have lead.
I don’t agree with your statement that Antonio Gueterres’ comments have already turned COP26 into “a farce”. Far from it, we need to accept that we live on a planet that is not expanding – growth cannot be limitless. Attempting to “shoot the messenger” by bringing up the “socialist” bogeyman do nothing to build your credibility; in fact quite the opposite: it makes you sound like a Fox News site. Mining.Com DOES have useful and real insight into the mining industry (that’s why I read it) and yes, we cannot stop mining as we transition our global economy onto one based much more on electrical power. But uncritically being a cheerleader for mining ever more, without addressing the serious drawbacks associated with extractive industries, is not a mature or effective way to build the consensus around best practices that we must develop as a people dependant (as we all are) on the maintenance of key biological and physical processes.
Hi David, thanks for your comments. As I describe in the opinion below the Guterres quotes, without mining on a much greater scale than today, reaching net-zero is simply impossible. Calls for an end to mining at a conference in pursuit of that goal is, I believe, history repeating itself first as farce then as tragedy if you’ll allow me to (mis)quote another socialist.
Couldn’t agree more with your comments, Frik. If Guterres and his Socialist environmental extremists get their way, people worldwide will suffer. It’s always that way with Socialists. They make promises they cannot deliver.
We have choices! Well maybe we can have leaders who are committed to a better future for the WORLD. I doubt it. The haves are feeling guilty about having. The have-nots are held in a poor place by more poor leadership. If we follow blindly we will all end up with rolling blackouts and not enough to eat. If we believe all the people of the world deserve a first world lifestyle then burn the coal, dig the holes and to hell with net 0. Maybe we can meet in a common place but I am not convinced of that. In 2050 I will be well rotted. I am done with my extractions and only follow the industry because you can not look away from the train wreck.
Excellent article Frik. Your insights give perspective on the scale of the metals shortfall to achieve the net-zero 2050 goal.
Mr. Els, your assessment of the need for newly mined metals is spot on, but your tone is not helpful. It’s certainly correct to call out environmentalists for their blindness in in being pro-EV while also being anti-mining, but by mocking them out of hand, you appear as blind as they are, simply in reverse.
Humankind has some hard choices to make, as I see every day as I drive route 60 in Arizona, past the enormous scars of what used to be mountains, past the Resolution Copper site, and past the remediation ponds that overflow into our creeks and the water table. I often think that the cost of “saving the planet” may just be that tiny pockets of it (such as the one I live in) may have to be sacrificed for some greater good.
If so, so be it. But please don’t demean the legitimate concerns of real people. By doing so you appear to have no interest in working toward real solutions that benefit everyone, only a “my way or the highway” attitude, and that doesn’t get any of us anywhere.
You mock the proposed royalty fees. Are you writing about the need for metals, or advocating for corporate profits? For example, one possible win/win would be to use that royalty fee to cushion the local impact to people in a mining area, therefore maybe getting their agreement to support permits rather than to fight them. I’m just offering a possible example, but your “Yes, gross, isn’t it!!” sure makes it sound like you wouldn’t even consider it.
Thank you Stanley for your thoughtful comments, those are all great points. My aim is to hold hypocritical politicians up to scorn, not to mock as you call it the legitimate concerns of real people, which I share.
I called the proposed royalty gross because I think a royalty on net revenue would be fairer. I hate to be cynical but a federal levy is not likely “to cushion the local impact to people in a mining area” but will disappear into other pockets once it reaches Washington. For positive community impact you’d have to look to the mining company, employing local people and paying local taxes. As it should be.
It’s not for me to assume I know why you write (wrote?) in the manner you did, and it’s also possible that I’ve become so worn down by the constant bickering in our public discourse that I’ve hyper alert, and don’t allow for allow for a good ‘ol woodshed thrashing.
That said, if you had written in your article what you just wrote to me, I would never have commented! I do hope you appreciate there is an enormous difference between “Yeah, gross!…. ignorance of how an industry operates”, and the comment explanation of why you find that royalty unworkable. If you intentionally chose the former, that’s your call. I’m just saying that the former certainly is open to vast misinterpretation of your actual position.
Hopefully we could agree that for every example you could give me of governmental waste, fraud, and over-regulation, I could give you one of corporate greed destroying public lands and human lives. We have to find a better way.
(By the way, ha! If I might give an investment tip? If/when Resolution is approved, buy every piece of property you can in Globe, AZ. It’s a quaint little town that would likely boom after a brief lull of 90 years.)
Since we are talking about capitalism, the 8% fee will of course be passed on in the form of increased prices, so the producers are not going to be suffering. If the government does something beneficial with the money (you can argue otherwise) then everyone profits. Capitalists never eat expenses.
Thanks for the comment Akakai. Since metals like copper are traded on deep, liquid international markets, miners don’t set prices. A more likely scenario than the one you sketch: An 8% gross royalty could cause the mine to become unprofitable, close down and for everyone to lose their jobs.
Unless and until all the unelected NGO’s around the world can produce scientifically valid data that PROVES anthropogenic global warming is a real phenomenon based on reproducible tests by real scientists not paid hacks, all of this should be treated as the nonsense that it is.
We cannot allow these people to spew nonsense that has NO basis in reality. Why is it not real? Because SCIENCE demands that theories be scientifically tested by multiple researchers who reproduce the same results rather than rubber stamped “reports” proclaiming data that has not been proven using the scientific method.
Here is one small example of the fallacy of their data. Every 1-1/2 hours, the sun delivers an amount of energy equal to ALL the energy consumed by mankind in one YEAR! So believing that man’s puny use of energy compared to the sun’s input is so arrogant as to be laughable given that the sun’s impact on earth is over 5000 times larger than ALL of man’s activities.
I am quite sure that your comment is not written as a sincere defense of the scientific method, and that even if all of your conditions to be met you would simply move the bar to another set of conditions.
The very same methods that allows us to know the energy output of the sun, which you accept as proven, allow us to measure and know the chemistry of earth’s atmosphere, and some of the ways that changes in that chemistry can effect the entire ecosystem.
I could accept for discussion an argument that claims science itself is invalid and that nothing is knowable, but not one that uses science to say science is bunk. Such circular arguments should be dismissed out of hand.
They all Preach there CO2 agenda but dont practice what they preach. They all fly into these conferences on private jets. Bill Gates rented a $2 million a week superyacht and helecoptered 50+ people back and forth to and from the yacht. They want us to ride in buses when they contribute more CO2 emissions in a week then a million of us will in a year. There all tyrants and people need to start waking up to the fact.
It does seem to me that those that are most adamant about transitioning to an EV future are also the most reluctant to do what is necessary to achieve those goals. Further, Guterres strikes me as a very shallow thinker. Evidently, he has no idea what PVCs, batteries, wind turbines, and transmission lines are made from.
Does he really think Mining is the problem , what about animal agriculture – this is the most single polluter of the planet – more than transport, more than mining and people like the UN boss are silent about it.
Peter A Melville
Environmentalists will dig our graves with their foolish narratives. They are never happy. They have to bankrupt each Country that they get their hands on.
these cop outs are always designed to make the poor worse off & enrich the elite. china will not impoverish its people while the stupid decadent western leaders will spout their usual garbage about saving the planet whilst sending thousands of hangers on to hoover up grants & subsidies & their lackeys will do as they are told to prosper financially. concentrate on pollution which is caused by politicians useful idiot collaborator manufactures that produce items such as crisp packets, throwaway face masks, plastic in general, & similar items allowed to be manufactured that cannot be recycled.
Raoul Jules Schur
When leaders are chosen they should not be measured by their intellect, or their IQ but by their level of common sense, which is not very common. Guterres obviously is devoid of this quality as has been evident to me in most of his pronouncements on various subjects. Heaven help us!
Douglas R. Smith
In order to achieve an environmental balance we need mining. As we progress toward a sustainable infrastructure with minimal emissions we need Thorium Salt Reactors in every city and mass amounts of electrical storage. Electrical vehicles of every purpose will require vast amount of Lithium and other metals. To protect nature in the future we will need vast amounts of these necessary metals. The burning of fossil fuels, such as natural gas, coal and oil to support existing mining as well as new mines will require considerable amounts of energy. How else can we mine the metals needed? To achieve a “green new deal” by 2030 is ridiculous. A more realistic timeline would be 2050 to 2070. We cannot wait until 2040 but must put forth considerable efforts today and double our efforts, if not triple, our efforts every year.
Regarding the royalty issue; a lesson I learned long ago was a simple one. You can shear a sheep a lot of times, but you can only skin it once. At some point, the industry will wake and realize that the view wasn’t worth the climb. If we don’t mine our own national assets, then start building substantial strategic stock piles of literally everything. We all read about how much we need national based mining, but I never read about how much we need a huge increase in refining capacity as well. And what we are extremely short of is the hardest thing to source. We are desperate for Material Scientist. Without refining we’re stuck with a very expensive pile of rocks and without Material Scientists, we will never know what to do with the dusts and powders of Rare Earth Elements and how they give us the miracles of our everyday life. I’m 75 and for me, it really doesn’t matter, but the youngsters really got their work cut out for them. Good luck kids.
If we need minerals to carry on life and if we have to dug into the ground, it means that we are far from stopping actions against environment pollution.
But really, we can, hardly, using means of future living prediction without certain confort. Meanwhile industrialised communities can afford certain life levels, the developping and poor countries will just disappear progressively.