The Coming Radical Change in Mining Practice

Dr Simon Michaux, Senior Research Officer, GeMMe University of Liege presents a personal perspective on the environmental impact of resource consumption.

I used to work in the Australian mining industry as a geometallurgist.  The previously unprecedented mining boom has clearly moved into a relatively sharp contraction cycle. The mining industry has seen mass layoffs and large operation shutdowns. Mining is becoming economically unviable in the current market. This is not a short term problem. Commodity prices have been steadily decreasing for some time, keeping pace with the economic stagnation that is plaguing every economy around the world at this time.  It’s also not just mining, it’s everything it supports as well.

There is a macro scale pattern unfolding under all of us. It’s getting harder to produce the same real physical production targets each year, which was masked by metal price but now there is a different signature visible. This can be shown across the Australian mining industry, where the Productivity Index for mining has fallen by 48%.

Source: Australian Bureau of Statistics 2011, Experimental Estimates of Industry Multifactor Productivity, 2010-11, ABS, Cat no: 5625.0.55.002, Canberra

 This means it now takes 48% more work done to extract the same unit of metal from the ground in the financial year 2011 -2012 compared to the year 2000-01. This is not just an Australian mining trend, it can also be seen around the world.

Source: Raw Materials Group, Stockholm, Sweeden

Rates of mining have decreased. A case can be made that globally, peak mining  occurred sometime in the early 1990’s. The only region left on the planet that is increasing rates of mining is China.

There are a number of technical reasons for this, which have translated into an economic outcome:

• Decreasing grade
• Increasing rock hardness
• Higher strip ratio
• Increasing depth to be mined to access ore
• Increasing Capital Expenditure and Operating Expenditure
• Decreasing grind size (requiring more energy and water)
• Increase in penalty elements
• Increase in required energy
• Increase in required potable water
• Much greater environmental impact

As we mine out all of the easy to work deposits, only the harder work deposits are left. Often, ore deposits are deeper underground, requiring a greater strip ratio or deeper underground operations. This requires more energy and capital as part of the cost of doing business. Penalty elements in saleable concentrate going to the smelter like arsenic, fluoride or cyanide are now accepted where decades ago they would have been rejected.  Often, only countries like China would accept these concentrates due to environmental pollution generated during their processing. Economies of scale need mining operations to double and triple in size for the next generation to be economically viable.

All of the above results in an increase in power and water at a time when power and potable water shortages are probable.  This implies that mining in its conventional form will peak and decline, just like production rates of any other non-renewable natural resource.

Source:  Mudd, G.  The Sustainability of Mining in Australia – Key Production Trends and Their Environmental Implications for the Future, Department of Civil Engineering, Monash University and the Mineral Policy Institute, 2007, Revised April 2009

All future operations looked at now are huge, low grade deposits, with penalty minerals more prominently present in the deposit that  prevent efficient processing at ever decreasing grind sizes.  The scale of these low grade operations is much larger than what is done now.

Energy is the rate determining step, which facilitates the continued application of technology with economies of scale.  Total world fossil fuel supply is close to peak, driven by peak oil production.  Declining oil production in the coming years will create a rising gap which other fossil fuels like gas or coal, will be unable to compensate for.  The energy contribution of nuclear fuels is too low to have any significant influence at a global level, though this might be different for some countries.  Moreover, as with fossil fuels, easy and cheap to develop mines are also being depleted.  In uranium production, for example, effort and cost will continuously increase as a consequence.

• 1 Mtoe = 7.1 million barrel of crude oil and condensate
• 1 Mtoe = 10 million barrel of natural gas
• 1 Mtoe = 1.16 billion m³ of natural gas liquids
• 1 Mtoe = 1.5 Mt hard coal (1.8 Mt sub-bituminous coal)
• 1 Mtoe = 3 Mt lignite
• 1 Mtoe = 58 t uranium

Source:  Zittel, W. et al, Fossil and Nuclear Fuels – the supply outlook  Energy Watch Group, March 2013 Fossil fuels and Nuclear fuels projected production based on known reserves (includes unconventional sources)

The industrial systems that each of these energy sources supports are quite different and are not easily interchangeable.  That being said, each of those industrial systems are vital for our society to function. Putting all energy sources together gives a snapshot of our industrial capability (Figure above). Peak total energy is projected to be approximately in the year 2017, next year. As all of these sources are only a few years away from peaking and declining (with the exception of uranium), a compelling case can be made that that our society and its industrial sector energy supply faces a fundamental problem, which is systemic in nature.

Depletion of energy resources exacerbates this problem. In 1920, energy resources were large and extraordinarily productive. Mineral and metal deposits were quite small and very high grade. In 2016, energy deposits are heavily depleted (where conventional oil and gas had already peaked production), and mineral deposits have also decreased in grade. To extract those huge low grade deposits in 2016, an exponentially larger quantity of energy is required, at a time when available energy reserves are also heavily depleted. As demand for these minerals has increased, much more ore has to be mined to meet production targets, which require much more energy per unit of metal. As these trends meet, the whole concept of mining metal becomes invalid, regardless of the economics of the sale of the metal in question (all of them).

At the same time as the above problems are approaching global limits, the development of industrialisation has required the ever increasing demand for consumption of metal resources. Socially, our resource consumption behaviour (materialism) stems from the belief that everything on the planet is there for our exploitation.

Source:  Mudd, G.  The Sustainability of Mining in Australia – Key Production Trends and Their Environmental Implications for the Future, Department of Civil Engineering, Monash University and the Mineral Policy Institute, 2007, Revised April 2009

Global metal production shows an exponential consumption profile of a finite natural resource. Copper annual global demand in 2010 was 17 million tonnes, which at an ore grade of 0.5% (global average for 2010) represents 3.4 billion tonnes of rock mined. It is projected that by the year 2100, annual copper demand will be 100 million tonnes. If the average copper ore grade stayed at 0.5%, this would represent 20 billion tonnes of rock mined. If average ore grade dropped to 0.2%, this would represent 50 billion tonnes of rock mined. There comes a point where processing the waste rock will invalidate the value of the metal content of the ore. Next generation mine feasibility studies are considering copper grade cut-offs at 0.1%.

These are symptoms of a system in resource consumption overshoot, where we are drawing on the world’s resources faster than they can be restored, and we are releasing wastes and pollutants faster than the Earth can absorb them or render them harmless. They are leading us toward global environmental and economic collapse.

Every non-renewable natural resource we depend upon is now depleting to the point of peak extraction, or will soon.  Industrial systems that are heavily dependent on energy reserves and metal resources are now at serious risk of collapse, as production of those raw materials will soon not be able to meet demand. All living systems on the planet are in serious bio stress and are also heavily degrading. Natural bio systems of all kinds are being depleted in the name of economic development. The planets climate is also undergoing change.

Our cultures fundamental belief that there are no limits and growth is good, is related to the belief that all resources are infinite. As this is a finite planet and our exploitation of these natural resources is exponential in form, there will come a point where resource scarcity will become a reality. We are biologically driven to consume and expand. All animals on the planet are programed like this as a survival mechanism.

While there are some unprecedented macro scale issues facing humanity, the biggest change and evolution is going to be social in nature. Currently we are on the path of wilful ignorance and ‘give war a chance’. At this time, our social footprint in Western Culture is isolationist and even delusion. As a generalisation, the average person has no understanding or interest in where the material goods they consume on a daily basis come from. In the same fashion, often no thought is given to our waste products or environmental impact. There is a widespread belief that environmental deterioration is far removed from the individual. Out of sight, out of mind (certainly not all but the decision making part of our society demonstrates this).

Our industrial requirements will have to be met with a fundamentally different approach to anything we have achieved before. We need to stop depending on non-renewable natural resources and stop the material requirements of the human societal footprint growing exponentially. Mining will continue, but according to a radically different business model with a very different mandate from the current one.

The fundamental challenge that faces humanity is a choice between our consciousness and our biology. Are we driven to consume everything in our path like a yeast culture? Or can our intelligence and understanding help us evolve to become respectfully sustainable? If we wish to take our place on this planet as a genuinely sustainable species, we, the people, have to decide what kind of world we wish to live in. The timing for this choice is upon us.