Circular economy essential for decarbonization: Indaba panel

A circular economy is essential for global decarbonization, as there will not be enough primary metal supply to meet net zero efforts, panellists told the Investing in African Mining Indaba 2022 May 11.

Battery metals were in short supply and the amount of intake that was going into new energy would need an overall uplifting of production capacity to meet increasing demand, IFC Mining Investment Officer Philippe Olivier told the Recycling in Mining panel.

There was due to be a huge gap in 2030-2040 in terms of the supply of metals and it had to come from somewhere.

Increased demand for critical metals amid tight supply has already boosted prices, with S&P Global Commodity Insights' seaborne lithium carbonate and lithium hydroxide assessments have risen 122% and 153%, respectively, since the start of 2022 to hit $75,100/mt CIF North Asia and $80,100/mt CIF North Asia as of May 11.

"We know that the current production of critical minerals worldwide will not meet energy transition requirements in terms of minerals and recycling will have a key role to play," Olivier said.

Second hand or recycled metals, such as copper, also had much lower emissions than primary copper production, he added, saying that mining companies had to make sure they could recycle and reuse these minerals, as this was going to be key.

"The sourcing of minerals to sustain economic development must be done in a sustainable manner and we'll have to find the solution through efficient circulatory efforts," Olivier said.

He called for governments to ensure all participants along value chains had the funds needed to develop and make economies circular.

Pressure from downstream was often seen for sustainable business models further up the value chain, Olivier said.

"To come back on the discrepancy between critical metals need for energy transition, we might see the balance of power shift, with companies choosing who they want to sell to, to make sure an end-product is sustainable," he said.

Ecosystem

The panel's moderator, Deloitte Partner Andrew Lane, said it was about forming an ecosystem and partnering with others along the value chain, not having one company having to own the whole value chain.

A circular economy did not necessarily mean being circular for every commodity, Anglo American Group Head of Responsible Business Opportunities Jonathan Samuel said, noting that some metals went into batch processes.

"It's going to vary a lot by commodity and quite what that looks like across the whole value chain will depend," he said.

The mining industry also had to be careful and respectful of existing recycling businesses, Samuel said, as the recycling industry was sophisticated and, while miners should aim to be part of the circular economy, this did not mean they should aim to step on the toes of the existing recycling industry and maybe rather focus on their expertise.

He said, for example, that for Anglo PGMs was an obvious opportunity, as it was a relatively niche commodity, while iron ore was not something it could make circular itself, as it was blended with other products to make steel.

"We are trying to find place where we can service customers where they want and need recycled material, or where we have a particular technology or capacity edge that allows us to do this," Samuel said.

Mining waste

A circular economy went beyond metals, Samuel said, saying that there were a number of other issues mining companies had to look at, such as contaminated land due to waste.

Olivier agreed that mining companies had to make sure there was no more added value in waste and all value had been extracted.

He said it was tricky to develop a supply chain ensuring nothing went to waste, as to do this, the value chain had to work in coordination with consumers to ensure products were utilized to the maximum.

One example of this was ensuring the efficient processing of tailings, although he said work was now being done to reprocess tailings from historical operations using improved efficiencies and technologies to extract more minerals.

However, he said this was a huge challenge.

Anglo was following three principles to deal with waste, Samuel said namely designing out waste wherever possible, keeping products and materials is use and regenerating natural ecosystems.

Anglo was looking to perhaps sell off byproducts, such as to the fertilizer market.

Customers increasingly want to know the quality of products and have reliability of price, Samuel said.

"They also want to know the provenance and the story behind this product like social development work and where they can partner with us on this... There is a really positive story to be told if mining is done well," Samuel said.

"Being able to tell that holistic story is increasingly important to customers," he said.

Increasing efficiencies

Meanwhile, South Africa's Council for Scientific and Industrial Research was doing work into increasing efficiencies to maximize resource utilization through technology and to support mining companies in this, CSIR Executive Manager Mining Sibongile Ntsoelengoe said.

These efficiencies included using data analytics and machine learning for prediction purposes for informed decision making, such as geological sensors that can inform a production team where cavities are and also provide information around qualities to improve metal recovery.

Another way to be efficient was to integrate systems to ensure communication across a value chain, such as underground wifi, while a third efficiency was digital twinning, which would use modelling and simulation.

"The technological applications are there and it's really around looking around what are the gaps and how to provide bespoke solutions to them," Ntsoelengoe said.