EuroWire January 2020

Transatlantic cable

“Green copper” grinds to a halt In August 2017, Nelson Pizarro, president of Chilean company Codelco, announced a plan to sell “green copper” – a sustainable copper cathode produced according to very strict environmental and social considerations. The result would be a premium-priced product that would appeal to customers looking to reduce their carbon footprint via more sustainable practices such as renewable energy and recycled water. “We have the opportunity to seize socio-environmental variables and turn them into opportunities to create added value,” Mr Pizarro said at the time. Codelco’s green plans also included the construction of a desalination plant to process 630 litres per second and supply water, at a competitive price, to mining sites across northern Chile. However, in October 2019 the project was wound up, after Codelco conceded it was almost impossible to guarantee the sustainability of “green copper” after it left the mine. The metal would need to be driven to its market, and would likely be melted into cathodes at a coal-powered smelter. Without traceability, traders said, and in the absence of an approved industry-wide methodology for sustainability, Codelco’s higher prices were unjustifiable. Codelco will now examine and test broader initiatives to make its products more sustainable. If successful, industry analysts believe, the move by such an influential mining operator could stimulate more significant industry-wide sustainability standards for the historically high-polluting copper mining industry. Rachael Bartels, a senior managing director at consultancy firm Accenture, said Codelco’s initiative is “ahead of [its] time,” and may still be an opportunity to gain the “green” advantage. “They may not get a premium for it, but they may become the preferred supplier,” she told Reuters in an interview. Codelco will continue to develop its $1 billion desalination plant, and is currently assessing its energy contracts for ways to reduce carbon emissions, albeit without a firm deadline to migrate completely to clean energy. But some copper will be greener by 2021 BHP has signed four renewable energy contracts to supply all of its Chilean copper mines from 2021, cutting the company’s energy costs by 20 per cent. Daniel Malchuk, president of BHP Minerals Americas, said BHP had signed contracts to cover the energy needs of Escondida, the world’s biggest copper mine, and Spence, another copper mine in Chile. BHP did not give a cost for the new contracts, but they are believed to be the most extensive signed by a corporate customer in Chile. They will result in a provision of about $780 million related to the cancellation of the existing coal contracts, which will be recognised in BHP’s December 2019 half-year results. “It’s good for the environment, it’s good for emissions, but it’s also great business,” Mr Malchuck told reporters in London. Another mining major, Anglo American, announced in July that it will use only renewable sources to power its mines in Chile from 2021. BHP chief executive Andrew Mackenzie said he expected the trend to continue globally, together with moves to

Metals mining

Waste rock, want not Lithium is in high demand by the growing electric vehicle and battery industry, but finding, extracting and processing the reactive alkali metal brings its own problems: not simply issues of geology and technology, but of environmental impact. In 2018, Christina Valimaki, an analyst at Elsevier, was quoted: “One of the biggest environmental problems caused by our endless hunger for the latest and smartest devices is a growing mineral crisis, particularly those needed to make our batteries.” Lithium is currently produced in South America and Australia, both continents where water is a major issue, and lithium extraction is a big user of water. South America’s ‘Lithium Triangle’, covering parts of Argentina, Bolivia and Chile, is thought to hold more than half the world’s lithium reserves beneath its salt flats. It happens to be one of the driest places on earth, but to extract lithium miners drill into the salt flats and pump mineral-rich brine to the surface, where it remains for several months while it evaporates. The resulting mix of manganese, potassium, borax and lithium salts is filtered, placed into another evaporation pool, and again left for several months. It takes up to 18 months before lithium carbonate can be extracted. It is a relatively cheap and simple process, but water-costly. It takes approximately 500,000 gallons of water to produce a tonne of lithium this way. According to consultancy Cairn Energy Research Advisors, the lithium-ion industry is expected to grow from 100GWh of annual production in 2017 to almost 800GWh in 2027. With lithium-ion batteries being central to cleaning up our energy act, and the planet in general, and with lithium prices rising exponentially (the price doubled between 2016 and 2018), projects to extract lithium are on the increase. It is not necessarily for reasons of ecology that the Trump administration is keen to see home production of the commodity, but it may have concentrated minds. In California, Rio Tinto plc is studying ways to extract lithium from waste rock at a mine the company controls. Rio has produced borates in the Mojave Desert, about 120 miles north of Los Angeles, for over a century, and as a result has decades’ worth of tailings (the industry term for rock waste). While searching the tailings for gold the Rio team discovered a high concentration of lithium. It is a win-win for Rio and the industry. As Bold Baatar, Rio’s chief executive of energy and minerals, said in a statement, “The material being used has already been mined, so this will be a low-energy option for the production of lithium.” The company is investing $10 million to build a pilot plant to extract lithium using a heat-and-leaching process. The pilot plant will produce around ten tonnes a year, but is just a first step to a possible 5,000 tonnes if Rio spends the estimated $50 million it will cost to build an industrial-scale plant. Once in commercial production, the Rio facility would make battery-grade lithium, the type demanded by Panasonic Corp and other cathode producers who, in turn, supply the battery part for use in electric vehicles. Rio also controls a lithium deposit in Serbia that has yet to be developed, and other companies working on projects within the USA include Lithium Americas Corp, Standard Lithium Ltd, Texas Mineral Resources Corp, Piedmont Lithium and ioneer Ltd.

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January 2020