Energy transition specialty metals and minerals - Sykes et al - Feb 2017 - Centre for Exploration Targeting / the University of Western Australia

Energy transition specialty metals and minerals - Sykes et al - Feb 2017 - Centre for Exploration Targeting / the University of Western Australia
John Sykes12, Allan Trench134, Dave Stevenson15, Josh Wright6, Sam Davies17 & Aaron Dixon3 1. Centre for Exploration Targeting, The University of Western Australia 2. Greenfields Research Ltd, United Kingdom 3. Business School, The University of Western Australia 4. CRU Group, United Kingdom 5. Kenorland Minerals, Canada 6. Rowton Ltd, United Kingdom 7. Alto Metals, Australia PDAC Conference Toronto, Canada: 7th March 2017
PDAC Conference, Toronto, Canada The impact of the energy transition on specialty metals and minerals The impact of the energy transition on specialty metals and mineralsSlide 2 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada BATTERIES Power storage/averaging Portable energy Rechargeable (reduced waste & energy efficient) Image: TonyV3112 / Shutterstock.com Image: Claudio Divizia / Shutterstock.com RENEWABLES Theoretically infinite Non-carbon emission generating (at source) Distributed sources Increased energy demand Increased environmental focus Increased transportation The impact of the energy transition on specialty metals and mineralsSlide 3 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Lead-acid Alkaline (zinc- manganese) Lithium-ion Nickel- cadmium/zinc Nickel metal (lanthanum- rare earth) hydride Vanadium redox BATTERY METALSRENEWABLES METALS Uranium Rare earths (neodymium, praseodymium & dysprosium) – in the generator magnet Silicon & germanium; Gallium-arsenide; Copper-indium-gallium-selenide (CIGS) Cadmium-telluride, The impact of the energy transition on specialty metals and mineralsSlide 4 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada antimony, arsenic, barium, beryllium, bismuth, boron, cadmium, chromium, cobalt, gallium, germanium, indium, lithium, magnesium, manganese, mercury, molybdenum, niobium, PGMs, rare earths, rhenium, selenium, silicon, silver, strontium, tantalum, tellurium, thorium, tungsten, vanadium Components of ‘criticality’ Important uses – ‘economic paradigm’ Potentially geopolitically restricted production – ‘strategic resources’ paradigm e.g. USDOE critical metals reports Potentially environmentally / socially restricted production – ‘sustainable resources’ paradigm e.g. EU critical metals reports ‘China produces 95% of the rare earth metals…’ ‘The problem with nuclear power is not uranium supply but waste disposal…’ The impact of the energy transition on specialty metals and mineralsSlide 5 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada 1 100 10000 1000000 100000000 Gallium Indium Lithium Cobalt Silicon Vanadium Nickel Rare Earths Germanium Copper Manganese Zinc Selenium Cadmium Lead Tellurium Arsenic Theoretical Total Available for Recycling (tonnes) 0 20 40 60 80 100 120 140 Gallium Indium Lithium Cobalt Silicon Vanadium Nickel Rare Earths Germanium Copper Manganese Zinc Selenium Cadmium Lead Tellurium Arsenic Depletion Index for Material Available for Recycling (years) Data: USGS The impact of the energy transition on specialty metals and mineralsSlide 6 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada We mine ‘commodities’ but recycle ‘products’ thus not all commodities are amenable to high levels of recycling 45% 55% Lead Production (2012) Primary Secondary Landfill ‘mining’ maybe as socially and environmentally problematic as conventional mining Image: Guardian (Javad Tizmaghz) Source: ILA Image: C-Battery 37% 33% 10% 5% 5% 1% 9% Lithium Consumption (2015) Batteries Ceramics & Glass Lubrication Purification Flux Aluminium Other (inc. pharma) Source: USGS The impact of the energy transition on specialty metals and mineralsSlide 7 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Lithium Rare Earths Graphite Lithium (again) Talison Lithium to raise $194m in IPO Business News WA, 24 Nov 2009 RARE EARTHS BECOME HOT COMMODITIES – US IPO UP FIVEFOLD IN 10 MONTHS TheBull.com.au, 06 Jun 2011 Why these graphite miners have soared more than 87% The Motley Fool, 24 Jun 2014 Lithium-ion battery demand sends shares in miners soaring, but analysts predict bubble will burst ABC, 14 Jun 2016 They’ve got the power: Battery stocks charging up, analysts say The Sydney Morning Herald, 2 Jul 2014 Uranium Investors put stock in uranium ABC, 24 May 2006 The impact of the energy transition on specialty metals and mineralsSlide 8 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Molycorp files for bankruptcy as rare earth prices drop - Bloomberg, 25 June 2015 Graphite junior Triton Minerals in shock collapse - The Australian, 4 March 2016 Valence Industries enters voluntary administration - Australian Mining, 20 July 2016 Year-end turn in rare earth prices seen as Lynas losses near $1b - The Sydney Morning Herald, 10 March 2016 Integrated business still a Galaxy away - The Australian Mining Review, 27 March 2013 RB Energy shutters Quebec lithium mine as financing fails Financial Post, 8 Oct 2014 Great Western Minerals is Bankrupt - Newswire, 3 Dec 2015 * Galaxy Resources’ Mt Cattlin mine re-opened in 2017 (Source: ABC) * Triton Minerals re-listed later in 2016 (Source: Proactive Investors) The impact of the energy transition on specialty metals and mineralsSlide 9 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada 0 100 200 300 400 500 600 700 800 Growth of metal market groups 2005-14 (US$ billions) Base Metals Precious Metals Minor Renewables Metals Minor Battery Metals Minor Critical Metals Battery Metal 2005-14 Price Change Lithium 155% Rare earths 59% Manganese 52% Lead 43% Zinc 32% Nickel -5% Cobalt -25% Cadmium -51% Vanadium -72% Source: USGS (2014) Renewables Metal 2005-14 Price Change Germanium 138% Copper 100% Arsenic 51% Silicon 46% Tellurium 2% Uranium -1% Indium -38% Gallium -44% Selenium -57% For category definitions see appendices The impact of the energy transition on specialty metals and mineralsSlide 10 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada 0 100 200 300 400 500 600 700 800 900 1900 1909 1918 1927 1936 1945 1954 1963 1972 1981 1990 1999 2008 Growth in market size indices of copper and aluminium 1900- 2014 (1900 = 1) Cu Index Al Index 0 50 100 150 200 250 300 1900 1909 1918 1927 1936 1945 1954 1963 1972 1981 1990 1999 2008 Growth in market size indices of copper and nickel 1900-2013 (1900 = 1) Cu Index Ni Index 0 5 10 15 20 25 30 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Growth in market size indices of copper and uranium 1950- 2013 (1950 = 1) Cu Index U Index The impact of the energy transition on specialty metals and mineralsSlide 12 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Nickel Discoveries in Sudbury & New Caledonia Bulk open pit mining Flotation & smelting advances Demand for armour Ability to handle radiation Uranium Demand for nuclear weapons Demand for nuclear power Bulk mining for very low grade radium Radium-uranium discoveries in the Congo Aluminium Bauxite discoveries in North America Bayer and Hall- Heroult processes Aviation demand Bulk open pit mining Source: Sykes et al., 2016b The impact of the energy transition on specialty metals and mineralsSlide 13 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Metals Constraints removed Copper Dis. Supply Use Germanium Dis. Sup. Use Indium Dis. Sup. Use Tellurium Dis. Sup. Use Arsenic Discovery S Use Gallium Dis. Sup. Use Selenium Dis. Sup. Use Silicon Dis. Sup. Use Cobalt Dis. S Use Lithium D Sup. Use Nickel Dis. Sup. U Metals Constraints removed Vanadium Dis. Sup. U Lanthanum D S Use Lead Discovery S Cadmium Dis. Sup. Manganese Dis. S U Zinc Dis. S U Neodymium D S Use Praseodymium D S Use Dysprosium D Use Uranium D S For more information: Sykes et al., 2016a Fullyunconstrained Fullyunconstrained Most constrained Least constrained The impact of the energy transition on specialty metals and mineralsSlide 15 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Finalmarketsizepotential Lack of discovery, supply & demand constraints on the market High potential Few constraints Low potential Few constraints High potential Many constraints Low potential Many constraints Co Li La V Cd Mn NiZn Pb For more information: Sykes et al., 2016a Nd Si Se As Te Cu Ga Ge In Pr DyU The impact of the energy transition on specialty metals and mineralsSlide 16 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Energy transition requires electric vehicles Increased mining of rare earths in China Questionable environmental and social impacts Switch back to ferric magnets required? Electric vehicles require better motor magnets Rare earth magnets are technically better Image: Reuters Based on: Widmer et al., 2015 Rare earth magnets case study The impact of the energy transition on specialty metals and mineralsSlide 17 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Abilitytoresolveconstraint Type of market constraints Resolvable societal Constraints e.g. conflict Unresolvable societal Constraints e.g. toxicity Resolvable technical Constraints e.g. processing challenges Unresolvable technical Constraints e.g. geological scarcity For more information: Sykes et al., 2016a Co Li La V Cd Mn Ni Zn Pb Pr USe Dy Ga Si NdAs Cu Te In Ge The impact of the energy transition on specialty metals and mineralsSlide 18 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Surface Mine UG Mine Mill Other Steel Equipment, Tyres & Parts Explosives & Reagents Fuel & Electricity Labour Data: CostMine, July 2016 Solar power at Sandfire Resources Degrussa mine, WA All electric underground mine to be designed by Goldcorp at Borden, Canada Wind power for copper mines in Chile owned by Barrick ‘Flexicycle’ gas, diesel, heavy fuel oil and biodiesel power at Pueblo Viejo mine, Dominican Republic, owned by Barrick The impact of the energy transition on specialty metals and mineralsSlide 20 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Movement towards all electric underground mines Focus on greenhouse gas reduction Health concerns surrounding diesel emissions in confined spaces Improved battery technology Volkswagen NOX & SOX emission scandal Movement towards underground mines Focus on social & environmental footprint of surface mining Fewer surface mineral deposits awaiting discovery MOVEMENT TOWARDS ALL RENEWABLE ELECTRIC UNDERGROUND MINING? Improved automation and remote technology Safer underground mines The impact of the energy transition on specialty metals and mineralsSlide 21 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Wonderland Battlefield Left behind High tech Old World NOW Transition (An unknown number of economic cycles to come) Low tech (Beyond which is the unknown) ‘Economic paradigm’ ‘Sustainability paradigm’ ‘Strategic paradigm’ The impact of the energy transition on specialty metals and mineralsSlide 23 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada OLD ECONOMY STRATEGIC RESOURCES INEQUITYPROTECTIONI SM STRATEGIC RESOURCES ISIS BIG MINING ECONOMIC PARADIGM COAL POWER POLLUTION WASTE PETROL CARS ..with an unknown number of economic cycles to come, so you have to be good at ‘business as usual’ BOOM & BUST BIG OIL The impact of the energy transition on specialty metals and mineralsSlide 24 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada …but into which future? The impact of the energy transition on specialty metals and mineralsSlide 25 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada WONDERLAND BATTLEFIELD (common in Eastern culture) (common in Western culture) Story line references: http://io9.gizmodo.com/the-universal-shapes-of-stories-according-to-kurt-vonn-1526559996 The impact of the energy transition on specialty metals and mineralsSlide 26 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada GREEN ECONOMY STRATEGIC RESOURCES SILICON VALLEY PROTECTIONISM STRATEGIC RESOURCES ISIS DISRUPTION SUSTAINABILITY PARADIGM VOLATILITY CETA DEAL INNOVATION PARIS AGREEMENT Geopolitics and conflict forces a government-led energy transition in the fossil-fuel poor parts of the world GLOBALISATION TESLA The impact of the energy transition on specialty metals and mineralsSlide 27 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada NEW WORLD STRATEGIC RESOURCES BREXITPROTECTIONISM STRATEGIC RESOURCES ISIS OLD WORLD MILITARY- INDUSTRIAL COMPLEX TRUMP STRATEGIC PARADIGM WARPROTECTIONISM PUTIN ISIS Geopolitics and conflict forces a government-led energy transition in the fossil-fuel poor parts of the world The impact of the energy transition on specialty metals and mineralsSlide 28 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada WONDERLAND Business capabilities • Spot new technology by working with innovators ‘on the ground’; • Understand niche markets before they become the next big thing; • Be able to scale globally quickly. Winners & losers • In a globalised world only one or two battery technologies, hybrid car companies, and renewable energy sources will win, so backing the right idea early is critical. • However advantage is only ever temporary, as the next big thing is already on its way – innovate ruthlessly to stay on top. BATTLEFIELD Business capabilities • Work closely with government to ensure you understand their needs and get the big contracts; • Global scaling is impossible; • Understand your local market, and what technologies can work in your part of the world. Winner & losers • In a divided world many ‘just good enough’ energy technologies will exist, supported by government and their geopolitical need, so picking ‘a winner’ is less important – government relationships are more important. • The slow changing nature of government and the focus on defence of the state means that within each block this is a stable, slow changing world with long-lasting competitive advantage. Because it is not possible to see what the world will look like after the energy transition mineral explorers, miners, renewable energy companies, hybrid car companies, battery makers and other companies affected by the energy transition need to be prepared to thrive in both scenarios: The impact of the energy transition on specialty metals and mineralsSlide 30 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada • The energy transition will likely have a substantial impact on some currently minor metal markets; • Some minor metals markets have the potential for transformational growth becoming a major ‘battery metals’ and/or ‘renewables metals’ industrial sector (together the ‘energy metals’); • However, of the energy metals some face more severe constraints on geological discovery, technical supply and demand growth, as well environmental and socio-political constraints; • The mining industry will therefore have a major impact on which minor metals will become available for mass consumption as energy metals by renewables and battery companies; • However, some battery metals such as lithium, vanadium and nickel and renewables metals such as silicon and gallium do seem to have more potential than the others; • In turn, as a major energy consumer in remote locations the mining sector will be impacted by and may be a driver of the energy transition; • In the end, the socio-political context of the energy transition will determine what sort of future we progress into; with different implications for the ‘energy metals’ sector in each; • For the affected businesses navigating the energy transition will be difficult as it is not obvious when it will arrive, or what it will look like when it does; • Mining, exploration, renewables and battery companies seeking to capitalise on growth in the ‘energy metals’ sector need to: – Target those metal markets with the most potential for substantial market growth; – Approach these metal markets in a holistic manner, removing discovery, supply, demand, technical, environmental and socio-political constraints; – Be ready for a three stage approach: survive the present, see the energy transition, and thrive in the future (whatever it is). The impact of the energy transition on specialty metals and mineralsSlide 31 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada Contact details: • John Sykes: john.sykes@greenfieldsresearch.com • Allan Trench: allan.trench@uwa.edu.au • Dave Stevenson: 20988641@student.uwa.edu.au • Josh Wright: josh.wright@rowton-ltd.com • Sam Davies: rhyssamuel.davies@research.uwa.edu.au • Aaron Dixon: 10502311@student.uwa.edu.au With thanks to the Centre for Exploration Targeting scenario planning team: • John Sykes, Allan Trench, T. Campbell McCuaig, Jonathan Bell, Jeremie Giraud, Constanza Jara Barra, Ahmad Saleem, and Jan Tunjic. • And Heta Lampinen for the Kurt Vonnegan universal storylines link. The impact of the energy transition on specialty metals and mineralsSlide 32 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada • Sykes, J. P., Trench, A., Wright, J.P., & McCuaig, T.C. 2017. The impact of the energy transition on specialty metals and minerals. PDAC Conference, Specialty Metals and Minerals Technical Session, Toronto, Canada, 7 March. • Sykes, J. P., Wright, J. P., Trench, A., & Miller, P. 2016a. An assessment of the potential for transformational market growth amongst the critical metals. Applied Earth Science, 125:1, pp21-56. • Sykes, J. P., Wright, J. P. & Trench, A. 2016b. Discovery, supply and demand: From Metals of Antiquity to critical metals. Applied Earth Science, 125:1, pp3-20. The impact of the energy transition on specialty metals and mineralsSlide 33 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada The energy transition: A mining and exploration industry perspective The impact of the energy transition on specialty metals and mineralsSlide 34 of 35 7 Mar 2017
PDAC Conference, Toronto, Canada • Precious metals: gold, platinum groups metals & silver • Base metals: aluminium, copper, lead, nickel, tin & zinc • Renewables metals: arsenic, gallium, germanium, indium, rare earths, selenium, silicon, tellurium & uranium • Minor battery metals: cadmium, cobalt, lithium, manganese & vanadium • Other minor critical metals: antimony, barium, beryllium, bismuth, boron, chromium, magnesium, mercury, molybdenum, niobium, rhenium, strontium, tantalum, thorium, titanium & tungsten The impact of the energy transition on specialty metals and mineralsSlide 35 of 35 7 Mar 2017

Energy transition specialty metals and minerals - Sykes et al - Feb 2017 - Centre for Exploration Targeting / the University of Western Australia

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Energy transition specialty metals and minerals - Sykes et al - Feb 2017 - Centre for Exploration Targeting / the University of Western Australia