Can you explain the importance of renewable energy for the mining sector and how this translates to the broader global community?
Linking mining and processing with renewable energy sources is of utmost importance for our sector as a way to establish and rebuild trust with the public and especially the younger generations. Spending time and investing capital in this direction is one of the key ways to obtain a broad social license on a global public opinion level for the mining and metals industry, and without a rapid and robust ramping up of mining and processing of elements such as copper, nickel, lithium, and many more, the energy transition itself, electrification of mobility, and further urbanization, modernization and progress in many other fronts will be hampered and delayed.
Specifically with regards to production of the suite of energy transition materials, a back-and-forth cross pollination effect with renewable energy generation can be a very positive development. In this scenario more and more of the materials that enable the transition to green energy sources towards the holy grail of mid-century carbon neutrality will be themselves mined and processed using green energy sources, and in turn, these additional materials will enable the construction of more renewable energy generation facilities, which will then enable mining and processing of even more energy transition materials, and so on.
Changing from traditional energy sources to renewables is often thought to be an expensive process. How do you get company buy-in?
In countries like Finland or in provinces like Quebec in Canada, where the grid itself relies heavily on hydro power and transmission lines are available, it is much easier to make the connection. Availability of clean energy sources allows the mines and processing plants to choose cleaner, yet more energy intense processing methods and to transition to electric mining fleets and equipment. A good example is Nouveau Monde Graphite in Quebec which has decided to abandon diesel for an electric mining fleet. They also have chosen to use thermal purification in its added-value products plant rather than chemical purification.
It is worth noting that, to some extent, mines and conversion plants have already been producing energy, such as the power generated from onsite sulfuric acid plants which is used on site and where any excess can be shared locally or uploaded to a grid.
Renewable energy sources will be important for the scalability of the hydrogen economy
Renewable energy sources will be important for the scalability of the hydrogen economy. Not all hydrogen can be produced as a byproduct, so energy intense electrolysis of primary hydrogen will be required. To achieve this, we will need to make green energy sources available. Once we can achieve this goal, hydrogen-based smelting can substitute for carbon-based smelting, reducing the carbon footprint of steel and other infrastructure materials. Between hydrogen powered furnaces and the advances that are being made in hydrometallurgy, the carbon intensity of the steel, cement, and aluminium industries can be meaningfully reduced over time.
What we are also seeing is that geothermal power plants (recent examples in Germany and in California) can become sources of critical minerals, mainly lithium, which can be extracted from the brines they pump before it is reinserted into the ground. In this case, the mineral extraction attaches itself to the power generation and not the other way around.
In jurisdictions where the grid is based on fossil fuels or is simply underdeveloped, and in more remote and rural areas of developed countries, we are seeing some projects making plans for mine site power generation, mainly solar. In these situations, it would make sense for the power generation project to be a bigger and separate commercial generation project, with a long-term PPA with the mining and processing project while selling the rest of the capacity to other consumers or to the grid.
Switching to renewable energy sources, especially if they are located on site, will of course require back-up solutions and storage capacity. Grid size barriers will be part of the solution, and again they will likely be made from similar materials that the mine and conversion facilities will be making.
Further solutions are likely to be provided through nuclear energy, whether small modular reactors (SMRs) or full size, as more and more people understand that, at least in this century, getting rid of fossil fuels will require a combination of renewable and nuclear energy solutions. SMRs can be an important solution for remote sites, but also for industrial complexes and conversion and processing hubs.
When it comes to carbon capture, some underground mines might be able to act as sequestration sites and may also be able to utilize their surface rights for carbon capture.
Where do you see the role of investors shifting around this new narrative of sustainability?
Investors have already been effective in bringing ESG to the front and centre of investment decision making and, with regards to energy sources, for steering investments away for thermal coal and new fossil fuel projects. Once investors also vote with their dollars to favour mining and processing projects that incorporate renewable energy into their operations, this will generate a shift in the sector. From the other side, investors can be guided to support the power generation companies that will include in green projects that feed energy to the mining sector within their portfolios.