The Mining Paradox

Last night I attended a big party. The whole town was there. There was no alcohol (!). Everyone was happy (without alcohol?!). Kids were dancing and singing along to their favourite band, teenagers making fun of me for being the only white bloke and a smattering of dignitaries in the posh seats. In the background you could see a mosque lit up, looming mountains covered in cloud and a furnace stack chugging out columns of gas.

This is Indonesia. A stunning, wildly varying country of vast rainforests, spectacular animal life and abundant mineral resources. It is also a country at the centre of a conundrum that I spend most of my working life thinking about. Because under the surface, both literally and figuratively, lies a material so critical to civilization as we know it that without it we can forget the energy transition. Nickel. On the one hand I am an environmentalist and by default favour status quo - keep it in the ground and don't disturb the environment and communities. On the other - if we want to build a civilization fit for tomorrow's world with all mod cons - we need to mine this stuff. And lots of it. This article is focusing on nickel as an example but is applicable to many other metals and other commodities.

"Nickel in batteries helps deliver higher energy density and greater storage capacity at a lower cost" (nickelinstitute.org)

Almost every country on earth uses nickel either as a raw material for manufacturing or as product in batteries and stainless steel products. Most jurisdictions also consider it as a 'Critical Mineral' or 'Critical Raw Material' (CRM) - which is a result of the economic importance multiplied by supply risk. The EU does not consider it a CRM due to the current supply, but should the global political landscape continue to change and demand increase, this may change. The US considers it of low criticality in the short-term (up to 2025) but very high in the medium-term (>2025).

Nickel is a key component of almost all rechargeable batteries and also the vital ingredient in making stainless steel stainless. Deposits of nickel are widely spread through the globe, with the top producers being in Indonesia, Philippines, Russia, New Caledonia and Australia. It generally comes in two forms - nickel sulphides and nickel laterites. The former is generally hard rock and comprises ancient magma chambers with nickel-rich sulphide minerals such as pentlandite, millerite and heazlewoodite. The latter is a tropical soil - the weathered remains of ancient magma chambers enriched in nickel (called ultramafic intrusions), where the nickel remains steadfast in its ability to cling to the upper layers of the weathered rock (soil) as the other (more mobile) elements such as silicon, magnesium, iron and aluminium are transported deeper by percolating fluids. Both types contain relatively limited contained nickel in general - with average deposit grades of 0.2 to 2% nickel common.

So what is the issue? Well to get this beautiful metal from its parent rock it needs a lot of work:

Lets consider the main steps in a nickel laterite mine and conventional smelter operation:

1. Dig it - take a whole load of muck and schlep it in huge trucks to the crusher. Produces wet ore.
2. Crush it - smash it to pieces to increase the surface area. Produces crushed wet ore.
3. Dry it - get rid of moisture (very high in tropical environments). Produces dry ore.
4. Burn it - drive off mineral-bound water and organics in a reduction kiln. Produces calcined product.
5. Smelt it - combine with coal and sulphur in an electric arc furnace to release the nickel from its elemental friends within the minerals. Produces furnace matte (approx. 25-30% nickel - the rest is mainly iron, magnesium and sulphur).
6. Blow it - with oxygen in a convertor - to increase the nickel content and release silica, iron and other impurities. Produces convertor matte (approx. 70-80% nickel - the rest is sulphur and a bit of cobalt).
7. Cool it - blast with cool water to granulate product for ease of transport. Produces wet granulated matte.
8. Dry it - dry it to remove moisture (reduces shipping cost). Produces dry granulated matte - final product.
9. Ship it - load it on to a ship and send for further processing (probably in Japan, UK or China).
10. Turn it into something useful - after receiving the nickel matte it has to go through a host of other steps to make the nickel suitable for use by battery manufacturer (including grinding, dissolving in acid, electrowinning and purification).

I think you may be able to tell where I am going with this.....

Each of these steps above requires a significant disruption to nature and any surrounding communities that are in the way. So we have to degrade the environment and disrupt/resettle communities that happen to be located there. This is a complex and variable situation depending on the geographical location but also depending on political and social dynamics.

It just so happens that many of the current nickel mining jurisdictions coincide with global biodiversity hotspots (e.g. Indonesia, Brazil, New Caledonia), as noted in various recent research (e.g. Sonter et al 2018 (https://doi.org/10.1098/rspb.2018.1926) and Myers et al 2020 (Mining and biodiversity: key issues and research needs in conservation science | Proceedings of the Royal Society B: Biological Sciences (royalsocietypublishing.org)). They also coincide with developing and emerging countries with an appetite for sustainable development and growth.

So what can be done? Firstly, I am advocating for education to inform the global community that if we want to decarbonise, we need mines. We also need to hold mining companies accountable and ensure they listen to their stakeholders (which, quite frankly, is the global community).

Below is a list of actions I recommend:

• Improve Communication - in order to restore trust in mining, all stakeholders involved must be more open to discussion. This means mining companies being more transparent and willing to discuss their impacts (both positive and negative), it means governments being fair and just in their permitting and regulation, it means the general public engaging in all these actions/processes required to create the products they need to have a high quality of life. It also means media outlets report fairly - on both the positive and negative sides of the coin - and not just focusing on the lowest-performing companies and countries. This can then inform our decision-making. There are number of independent organisations striving to improve practices - including a smattering of acronyms such as IRMA (Initiative for Responsible Mining Assurance), RMI (Responsible Minerals Initiative), EITI (Extractive Industries Transparency Initiative), TSM (Towards Sustainable Mining) and - winning first place for worst acronym - GISTM (Global Industry Standard on Tailings Management).
• Raise the Bar - we can learn from others who have travelled on the same path. Many mining companies operate with a high level of consciousness and responsibility. This is often lost in the generally negative rhetoric reported in the media but many companies do not have the same level of commitment to environmental and social impacts relating to their projects. Linked to the above, improved communication will help raise the profile of the high performers to make that the new bar. The stragglers will have to pull their socks up to avoid being left behind in the new era of responsible mining practice. This will certainly be helped by new regulation - such as the EU's carbon border adjustment mechanism (CBAM) - which will penalise (and therefore make operations less economically viable) if they do not demonstrate at least commitment to continuous improvement. In addition, the responsible mining standards noted above all strive for improvement.
• Get Involved - the mining industry is a fascinating place to work. It is full of opportunity and variety. We need to encourage more environmentally- and socially-conscious people that to engender change you have to be the change.

This article was written by Ben Lepley and does not necessarily represent the views of SLR Consulting.