The Need For Responsible Mining

Hopefully you'll have witnessed a theme, a flavour, a pattern of many of my battery related posts in recent times. And that is...

The efficacy?of the mining and processing of critical minerals (the essential feedstock?for battery manufacture) -? in terms of the environmental, social, and governance criteria are not 'nice-to-have' quotients ...really matters!?

Recent encounters with significant individuals, companies, and industry bodies have illustrated to me how we can and must make that happen, and that we 'square the circle' when it comes to delivering volume, quality and price. The twin energy and mobility revolutions will not be successfully built and sustained by a lowest costs denominator?approach.

So this article is intended?to articulate?why and how the best market approach?is underway, and how we can reinforce this best practice with more traceability.

We are in the midst of a vital transformation, electrifying our industries as part of ashared ambition to decarbonise the global economy. That's the considered conclusion that now drives me to chronicle why, how, where, and when that's happening - in the best way I can within my LinkedIn storytelling!

And so, although I often focus on electric vehicles (EVs) and batteries, which are at the heart of our net-zero ambitions, the story inevitably takes us upstream into the world of mining and processing of critical minerals.

The International Energy Agency estimated that EVs use 173kg more minerals, such as lithium, nickel, graphite, and copper, than petrol cars (when ignoring steel and aluminium). Although these minerals can be recycled from end-of-life EVs and batteries, forecasts from BloombergNEF suggest that we will need an eye-watering three billion metric tons of mined metals between 2024 and 2050 to power the energy transition required to reach net zero.

Mining for minerals is challenging, complex, and costly. These challenges and complexities have led to a disparity in the standards and techniques used in mining operations worldwide. This is something I've learned a lot about after encountering the work of Benchmark Mineral Intelligence over the past five years - giving me a window into the world of critical raw material supply chains and shaping my perspective on the industry.

If the materials that we put into batteries are not responsibly extracted and

processed- we are not truly building that better world we strive for!

Whilst I'll never be a geologist, miner, or chemist, I have learned that there are leaders and businesses fully focussed on doing the right thing, raising industry standards, 'digging for victory' so to speak.

So I want to highlight an example of a vital supply chain for EVs doing things 'properly'...

An innovative company located in Phoenix, Arizona, Urbix Inc. is an enterprise I first learned of whilst hosting a Benchmark online webinar during lockdown. They process natural and synthetic graphite to produce Coated Spherical Purified Graphite (“CSPG”), the predominant anode material used in lithium-ion batteries, without using the messy and environmentally damaging hydrochloric and hydrofluoric acids which are typically used by others. Once I'd got the gist of their unique and sustainable technology, I made it my business to support them.

Anodes store charge in lithium-ion batteries, representing a critical component within battery manufacturers’ supply chains. Approximately 50kg-100kg of graphite is used in every EV. China is responsible for nearly all CSPG supply and produces over 90% of the world’s anode materials for lithium-ion batteries.

In October 2023, London-based private equity firm Appian Capital Advisory announced an investment in *Urbix and an MOU to provide them with high-quality natural graphite concentrate feed from Graphcoa, a Brazilian graphite producer owned by their funds, developing an integrated end-to-end supply of anode graphite material for the rapidly growing North and South American battery manufacturing industry.

September 2024 Update : The U.S. Department of Energy has selected Urbix to enter into award negotiation for $125 million of funding to advance the construction of its commercial-scale graphite processing facility to support the US ambitions to grow a more sustainable and secure domestic battery supply chain.

Appian is a signatory to the UN Principles for Responsible Investment and several other ESG initiatives. The International Finance Corporation has been a co- investment partner on many of their projects, giving you a sense of the rigour and significance they place on their ESG standards and responsible mining. They are applying these values with the development of Graphcoa and across their portfolio.

For graphite, copper, lithium, nickel and many other materials needed for the energy transition, investors and industry players like Appian are sourcing and processing responsibly, bringing long-lasting social and financial benefits that genuinely benefit their operations’ local communities.

However, the disparity in industry standards allows many operators to cut corners at the expense of the environment and the local communities. These players get a significant cost advantage against those investing and operating to the highest standards. There is much discussion in the industry about how to even the playing field to incentivise better operations.

In my recent conversation with The Global Battery Alliance's Inga Peterson (which you can listen to on 'The Electric & Eclectic Podcast Show), she discusses how we can commercialise ESG standards in making batteries.

Firstly, developing a more harmonised framework for global standards?is essential to allow the industry to measure and certify best practices across battery supply chains, including environmental impact and local economic contribution. This data and details about operations across batteries’ value chains can become traceable on a digital product passport.

These passports will drive higher standards with either a carrot or stick approach. There is little evidence to suggest consumers are willing to pay a green premium for their electric vehicles. However, institutional investors and large public sector contracts for EV fleets require granular data on ESG standards to validate and?support their decisions. A digital product passport for batteries could provide this data, incentivising and rewarding those supply chains with the highest standards. It would help investors and procurement prioritise and trace battery value chain performance.

The EU Battery Passport, when it comes into law in 2027, will represent the “stick” approach. If batteries’ value chains don’t comply with acceptable carbon footprint and social responsibility standards, they won’t be allowed to be sold in the region. These are important first steps that should increase awareness and incentivise more responsible mining standards. Whether used voluntarily in battery supply chains or mandated regionally, this approach of measuring and tracking ESG performance can build momentum to lift the industry.

In the last two decades working in electric vehicles, I have become increasingly convinced about the opportunity and responsibility the sector faces to deliver a paradigm shift with energy and mobility globally. Securing the mineral supply chains that need to be at the forefront of this transition is being called the “critical minerals race.”

By creating more traceability and recognising ESG standards in this value chain, we can ensure it becomes...

A Race To The Top!

*Note: Declaration of vested interested. I'm both an Advisory Board member of Urbix and a minority investor.