Due to the global shift towards clean energy there has been rising pressure on the mining sector to source minerals that meet the demand of resources needed to produce a low-carbon future. World commitments to keep the global average temperature rise at or below 2°C have been one of the driving forces promoting clean and renewable energy consumption. In order to encourage clean and renewable energy, significant innovations have been achieved. A large contributor to the success of these innovations is the use of green and rare earth minerals, which are critical materials used in the manufacturing process for items such as batteries, glass coatings and magnets.
The annual demand for rare earth minerals has
doubled to 125,000 tonnes of Total Rare Earth Oxides (TREO) in the last 15 years, and is projected to reach 315,000 tonnes in 2030. This is driven by the increase in green technologies and advancing electronics. This is creating enormous pressure on global production.
Key reasons for market growth in rare earth minerals:
· Growing product demand across Asia-Pacific
· Increasing adoption of magnets
· The global shift towards clean energy
· Wind, solar, and energy storage batteries
Most commercial products are mixed rare earth concentrates, accounting for approximately 95% of usage.
Commercial uses include:
· Automotive catalytic converters (35%)
See figure 1.
· The predicted expansion of hybrid vehicles and related materials; glass polishing, colouring and optical lenses (27%);
· Metallurgical additives and alloys including strengthening and hardening of magnesium and aluminium alloys (14%);
· Petroleum refining catalysts (10%);
· Permanent magnets (5%);
· Ceramics, colourants for glazes, coatings, refractories and stabilisers (4%);
· Phosphors for televisions and energy efficient light globes (3%).
Other uses include nuclear control rods, nuclear detectors and counters, lasers, electronic components, jewellery, cigarette lighters, automatic gas lighting devices, flares, paint, lubricants and tracer ammunition.
Figure 1: Minerals used in electric cars compared to conventional cars
Source: https://www.iea.org/data-and-statistics/charts/minerals-used-in-electric-cars-compared-to-conventional-cars
Extraction & supply issues
A commonly cited challenge for critical and green minerals surrounds potential supply shortages. Canaccord, a financial services company in Canada, forecasts a market deficit of rare earth magnets
until at least 2030 thanks in part to the increase in electric vehicle sales. Research from the University of Technology Sydney highlights issues revolving around cobalt, essential for the construction of lithium-ion batteries.
With 50% of global cobalt reserves located in one country, the Democratic Republic of Congo, sourcing the material is proving difficult due to the concerning human rights issues that have come under scrutiny. As such, several companies have refused to accept cobalt from the country, limiting available supply.
Rare earth minerals, as the name suggests, are hard to come by. Located in areas that are difficult to access and found in uncertain quantities makes the capital requirements for extraction incompatible. In the case of Japan, a huge accumulation of rare earth minerals, enough to potentially supply the globe, has been discovered. The catch being that it is located under the ocean floor, creating extraction headaches from both a cost and logistical standpoint.
Environmental concerns
Mining, processing, and disposal of rare earth minerals can contribute to ecosystem disruption and release hazardous by-products into the atmosphere. Rare earth element ores have metals that, when mixed with leaching pond chemicals, contaminate air, water, and soil. Often laced with radioactive thorium and uranium, rare earth ores can result in long term environmental damage.
China’s largest rare earth project, located in Bayan-Obo, has been operating for
over four decades. With such a large-scale project ongoing over many years, the site now resembles an 11km₂ wasteland. Elevated concentrations of thorium are permanently absorbed every day, indicative in their negligent lack of pollutant discharge standards for the rare earth industry. China’s standards have allowed them to produce rare earth minerals at almost a third of the price of their international competitors.
Preparing for the future
There is no doubt that rare earth minerals will continue to be sought after and become more prolific throughout the innovation of green energy initiatives. This leaves the question; how can companies optimise extraction, guarantee supply and reduce environmental impacts.
Collaboration
With China accounting for nearly 60% of the world’s distribution of rare earth minerals, collaboration will likely be key to ensure a consistent and safe supply. A collaboration between governments, specifically the
Energy Resource Governance Initiative (ERGI), that includes the United States, Canada, Australia, Peru, and Botswana, is one way in which supply chains are being diversified. Alliances are in the works across the globe, with other diversification efforts already yielding results, specifically the USA Rare Earth and Texas Mineral Resources Corp which has uncovered a
130-year supply of rare earth minerals.
Strategy enforcement
Strategic planning will be crucial for mining companies to effectively predict market trends that will make investment in mining projects more palatable. Planning should be flexible in order to enable one to respond as different technologies either gain dominance or become obsolete. For instance, the complexity around battery applications and the ongoing parameter shifts in required levels of performance, safety, cost, and environmental impact, proves that niche materials and innovative technologies will arise.
Flexible business models
Implementing a flexible business model will allay risks associated with battery and rare earth minerals. One example would be instead of investing heavily in one mine and leaving all your eggs in one basket, investing smaller across multiple mines. This is an advantageous approach that could result in positive outcomes, especially when partnering with other companies. This allows for rapid scalability should the market dictate demand whilst creating a diversified portfolio of less risky assets. The pursuit of net zero goals
According to the International Energy Agency, supplies of critical minerals essential for clean energy technologies will need to pick up sharply over the coming decades to meet the world’s climate goals. By creating potential energy security hazards that governments must act on, ensures the delivery of reliable, sustainable supplies of elements vital for production of electric vehicles, power grids, wind turbines and other key technologies.
Government and mining companies will need to work together to ensure a reliable supply chain where no one country has the ability to control global trade. Also, to ensure that environmental impacts are being monitored and addressed in order to achieve a sustainable industry.
27 Feb