Battle for Lithium
In the hunt for lithium and other crucial minerals for the electric car supply chain, the United States must compete not just with Chinese competitiveness and manufacturing capability, but also with internal Western limits.
While the US does not appear willing to significantly change their Inflation Reduction Act, which will guarantee nearly $400 billion in “green” subsidies to companies operating in the US over ten years, and while the EU is preparing a response that could include a mix of further easing of state aid and the creation of a “sovereign” fund made up of the residues of the Recovery Plan and little else, but without the coveted (by the Italians) Eurobonds, Consider the case of lithium.
The price of this essential mineral for electric vehicles has more than quadrupled to $75,000 per ton by the end of 2022. It is required to seek for new sources and build refineries to process them. All of this, in accordance with Washington’s approach, without relying on supplies from Beijing or any other “hostile” country. According to the Financial Times, the Biden administration has given the Australians of Ioneer a 700 million dollar conditional loan to establish a mine and processing complex in Nevada. Mining might begin in 2026, but supply contracts with Ford and Toyota have already been struck. Production may support roughly 400,000 electric automobiles per year.
The Inflation Reduction Act’s public financial support for the supply chain is based, above all, but not exclusively, on benefits of up to $7,500 for buyers of electric vehicles produced by companies that procure components and raw materials in the United States or in countries with which Washington trades under a free trade regime, defined not as a formal treaty but rather as “friendship” and partnership.
The administration then invoked the Defense Production Act, a law enacted during the Korean War to direct domestic production toward the war effort, and has so far distributed 2.8 billion to approximately twenty companies involved in the electric vehicle supply chain, as well as activated agreements with Canada, the EU, the United Kingdom, and Australia to invest in critical extractive projects.
In the hunt for lithium and other crucial minerals for the electric car supply chain, the United States must compete not just with Chinese competitiveness and manufacturing capability, but also with internal Western limits. Beijing is aggressively forging partnerships in Africa and Latin America to get minerals in less demanding regulatory environments for use in its home refineries. In reality, China owns 80% of the world’s lithium hydroxide processing capacity, a structural advantage that will be tough to overcome in a reasonable amount of time. It is also required to address the internal limits associated with the mining activity’s permission processes. This is an objective problem in the United States, relating to environmental impact assessments.
Nevada has just one operational lithium mine, and another is awaiting a court decision after a fight with conservation groups safeguarding a rare species of wildflower. A similar tragedy befell a mining project in North Carolina, which failed due to environmental limits, forcing Tesla to rely on Canadian supply. The expansion of the EV chain necessitates mining, which has an environmental effect, as well as the building of processing capacity for these minerals, which necessitates time, money, and administrative difficulties. In the battle between Americans and Chinese, the latter has an obvious edge, owing to the relatively minimal limits imposed by local territory on the establishment of extraction and processing systems.
Europe is in the middle. Which engages in extractive project funding but risks being undermined by the appeal of American environmental subsidies? At the World Economic Forum in Davos, the White House’s special envoy for climate, John Kerry, asked the EU to move quickly on its own version of the Inflation Reduction Act, in order to shorten the development timelines of the Western approach. Because, in Kerry’s words, “money, money, money” is required. Even on our continent, attempts to build lithium mining and processing factories face stiff opposition from local residents.
Examples include the $2.4 billion Serbian Jadar mine project, which Rio Tinto’s Anglo-Australians aimed to exploit but which ended up stalled by the resistance of local communities, which led to the revocation of the initial authorizations by the Serbian government. Or the cancellation of a mining project in Portugal, by government decision.
To these obvious critical issues, which demonstrate that Green Mining is not an oxymoron, is added the European Chemical Agency’s (ECHA) request to classify lithium salts as dangerous to human health and, as a result, subject their extraction and processing to a more stringent and onerous regulatory framework. This might swing the cost balance in favor of imports rather than domestic manufacturing, with all of the associated geopolitical risks. The EU will have to give answers to these crucial operational and budgetary challenges. Keeping in mind that if the new “sovereign wealth fund” is simply a repackaging of the Recovery Fund’s unspent leftovers, individual nations with fiscal ability will act alone, posing a relative danger to the integrity of the single market, Europeans 24 writes.
Europe, Can mining ever be green?
As France prepares to dig for lithium in its own backyard, part of the EU’s broader push to create strategic reserves of key raw materials needed for the green transition, activists worry about the environmental impact of mining
Lithium, Gallium, Magnesium, Indium, Niobium. Although these rare metals and minerals appear to belong to the same family, not all were created equal, at least in the eyes of industry.
The European Commission has listed 30 of them it deems strategic for the future of its ambitious green and digital transitions, but for whose supply Europe has become reliant on foreign countries over the years.
Called “critical raw materials” (CRMs), they fall under the European Union’s strategic autonomy agenda. The Covid pandemic and the war in Ukraine served to highlight the EU’s dependencies on other nations for natural resources and reminded the bloc which states were in its corner, and which were not.
After concluding that China plays an outsized role in supplying the Europeans with these materials essential to electric car batteries, windmills and solar panels, Commission President Ursula von der Leyen announced a new strategy in her State of the Union address, in September 2022: the EU will seek to diversify its trading partners through new agreements. It was also announced that, in early 2023, the Commission will present a regulation on CRMs to create strategic reserves of those materials on European soil.
Geologists have located critical raw materials across the continent. Finland, Sweden, Spain and Portugal, where deposits have been spotted, are eager to dig into the earth. Will the Europeans go back to the mines? Some countries, such as those in Scandinavia, have a long and ongoing tradition of mining, while others closed their last coal mines decades ago.
In any case, the issue worries environmental activists. The word “eco-mining” is on everyone’s lips in Brussels as well as in the Member States, and the concept should ostensibly help overcome obstacles to opening new mines.
In its consultation last October and November, the European Commission identified a lack of investment to create an EU supply and noted that permit procedures were long and complex. Opening a mine can take up to 15 years, between the exploration process to the extraction itself. Moreover, these projects are highly scrutinised, and the legislation in individual Member States remains demanding when it comes to exploiting their natural resources.
The consultation also pointed out the environmental risk. “We have to define our standards regarding responsible mining,” MEP Hildegard Bentele, the EPP rapporteur for the resolution adopted on CRMs by the European deputies in 2021, tells The Parliament. “Because a mine is always an intervention into nature. We should not be blurry about it.” Rather than “green” or “sustainable”, Bentele hopes for “responsible” mines: the impact on the environment will never be zero, but it is necessary to do everything in our power to minimise it.
The idea that a mine can be “responsible” is put forward by the French authorities and the companies which have recently announced lithium projects in several parts of the country. France, where mines are still taboo, has high ambitions for the production of this new “white gold” necessary for the batteries of future electric cars.
A boom in demand is expected after the ban on fossil fuel cars comes into force in 2035. In the Massif Central, in the centre of France, the French company Imerys has announced a vein capable of producing 34,000 tonnes of lithium hydroxide per year, which translates into 700,000 batteries for future electric cars. It plans to start extracting in 2028.
In the Rhine basin, between France and Germany, several projects aim to extract lithium using geothermal technologies: hot salty water is pumped to the surface, from which operators extract the precious metal before reinjecting the water into the earth. The Australian company Vulcan Energy hopes to produce 50,000 tonnes of lithium hydroxide annually starting in 2027. In the same area, some French companies have also successfully passed their first tests of lithium extraction from geothermal brines.
The zone could supply up to 30 per cent of Europe’s lithium needs. Not bad, considering Thierry Breton, the EU’s Commissioner for the Internal Market, has set the ambitious target of being “almost self-sufficient in lithium for our batteries by 2025”. But what is going to be the environmental impact of those mines?
Thierry Breton, the EU’s Commissioner for the Internal Market, has set the ambitious target of being “almost self-sufficient in lithium for our batteries by 2025”
In the Massif Central, even if the mine is underground, the industrial operator will still have to pump water to be able to work. And if it uses hydro-metallurgical separation techniques to extract lithium, large quantities of water will be required. The enterprise promises to recycle water, but with scant details on how often and how much.
At the Franco-German border, geothermal technologies also raise eyebrows among the locals. People are afraid of seismic tremors caused by the stress generated underground. Others wonder whether they may be affected by the high level of radioactivity concentrated a few kilometres away underneath their feet.
Even employing so-called “clean” technologies, the new mines don’t convince everyone. Judith Pigneur, an engineer from the French association négaWatt, has observed these new technologies carefully and as well as an outsider can, given that each company is still relatively hush-hush about its extraction process.
“In absolute terms, the environmental impact of CRMs’ exploitation will only increase because deposits will become less and less good and their contents will decrease [in number],” she explains. As a result, companies will have to dig deeper or be more aggressive in the extraction process.
At the European Parliament, the Greens are wrestling with the dilemma of how to ensure the green transition, which requires critical raw materials, while protecting the planet’s remaining resources. There must be some limits to mining in Europe, explains German MEP Henrike Hahn, shadow rapporteur for the European Parliament resolution in 2021: “Obviously, a protected area in Europe, like Natura 2000 [a network of protected areas], are off-limits for mining industries.”
And the recycling of CRMs must be developed and promoted by future EU regulation, with the objective of creating a market of secondary raw materials.
Of the many CRMs, lithium holds a special place. The projected need for batteries will be so huge that many people are uneasy about our ability to maintain stocks. Even those advocating for a reduced consumption of CRMs across the board agree on the importance of lithium. For them, the only hope is to be able to reduce demand in small, incremental ways, with the understanding that it will, in any case, remain high. “Are we going to use lithium for SUVs or for small cars?” wonders Pigneur, the engineer.
Creating reserves of critical raw materials with new mines in Europe will not be enough to meet tomorrow’s needs, no matter the geopolitical and economic urgency, and even with new extra-European trading partners. The CRMs will also have to give way to the 3Rs: reduce, reuse, recycle, Parliament Magazine writes.
Modern mining companies are now going to more zero emissions and green eco-responsible extraction technologies
Securing access to commodities is one of the top list items of industrialized countries’ agendas. With eco-sustainability issues and global changes, modern mining companies are now going to more zero emissions and green eco-responsible extraction technologies to harvest the precious underground metals/commodities and foster economic growth of our unsatiated advanced-technological industry.
The mining industry is often associated with dirty activity involving huge tailings/wastes of barren rocks disposed at the surface of the Earth, excavations of the ground endangering workers, damages on building surfaces, roads, and irreversible environmental impacts . This collective-mind conventional old picture might be changed soon by the past decade’s advances in in-situ leaching (ISL) technologies that are now better mastered by the use of 3D computer modeling technology and chemical simulation, making ISL mining technologies a possible substitute to conventional mining in many cases  (Figure 1, above).
First implemented in Wyoming in the 1950s for uranium recovery, in-situ leaching (ISL) or in-situ recovery (ISR) involves injecting chemicals (typically sulfuric acid or ammonium carbonate) called “lixiviants” into porous geological formations that host the ore body (i.e. deposit), recovering the metal/commodities by dissolving them, pumping through production wells the pregnant solution to the surface where metal/commodities are recovered in processing plants, and regenerating the chemical solution (sometimes using biotechnology) for reinjection in wells.
Compared to traditional mining, this technology leaves the ore in the ground and extracts only the metals/commodities of interest, suppressing the huge mining wastes. This technology requires favorable geological conditions (i.e., impermeable layers on top and below the ore body) (Figure 2) to avoid the dispersion of the lixiviant in neighboring aquifers. In the case of uranium deposits, regeneration of exploited ore deposits is thought to be possible after less than 30 years for naturally re-confining possible toxic substances initially associated with the ore bodies but mobilized during exploitation. Groundwater contamination is the critical aspect requiring reagent management during ISL operations. The environmental regulation in many countries is sometimes a limiting factor in the use of ISL as they require that the water quality in the aquifer be restored to its pre-mining use.
The ISL technology (Solvay process) is widely used to extract water-soluble salts, including sodium chloride (halite, NaCl), sulfate (Na₂SO₄), trisodium hydrogendicarbonate dihydrate (trona, Na2CO3.2NaHCO3.3H2O)), bicarbonate (nahcolite, NaHCO3), potash (sylvinite, KCl and carnallite, KMgCl3·6(H2O)), and boron, and is often used for ore deposits that are too deep to be exploited by conventional underground mining .
Most uranium mining in the United States, Australia, Kazakhstan, and Uzbekistan is now exploited by ISL. With 46 percent of the annual world production, Kazakhstan is the world’s leading country in uranium mining . In 2021, Kazakhstan extracted about 21,800 tons of U by in-situ leaching (ISL) mining . The capacity of ISL mining of uranium is now superior to that of conventional uranium mines, reaching 57 percent of the world’s production in 2019.
ISL has been successfully developed over the past 20 years for other commodities such as copper, gold, nickel, scandium, rhenium, rare earth elements, yttrium, selenium, molybdenum, and vanadium (). As a historical curiosity, the Chinese were probably the first to use solution mining to produce copper by 907 A.D/, and perhaps as early as 177 B.C. (, , ) In the 1970s, ISR was introduced for copper. It is mostly used as low-cost heap-leaching technology on ground ore and then recovered from solution by solvent extraction electrowinning (SX-EW) or by chemical precipitation . There were several successful natural tests and mines such as recently in the Kupferschiefer underground copper mines in the Lubin region (Poland) within the BioMore European Research project (-), the oxidizing properties of the reagent solution was regenerated using bacteria (Biomining).
A recent paper published in the review Minerals  had investigated the key chemical parameters and 3D computer modeling for optimizing uranium extraction on a hexagonal grid of wells. Further progress is needed to fully understand the complex mechanisms involved in the dissolution processes underground. However, these recent results show that an improvement of about 20 percent in recovery and mining time can be expected by better chemical modeling. Other commodities are under study such as copper (,) and gold .
Rare earth elements (REE), rhenium, scandium, selenium, yttrium, molybdenum, and vanadium were also mined in pilot tests as byproducts of uranium extraction but are often limited in practical uses because radioactive particles are often physisorbed on the metal surface ( ). ISR of copper, gold, nickel, rare earth elements (REE), and scandium has been successfully developed over these last recent years.
With the increasing demand for commodities and rare metals used in advanced space technology, investigations had begun in exploring and exploiting outer space; space agencies have recently renewed their interest in space mining, including ISL biomining , and in situ resource utilization (ISRU) .
In terms of environment, ISR technology extracts ore preserving existing natural conditions with minimal disturbance. In contrast to open-pit mining and underground, the volumes of hydro-metallurgical effluents and mine tailings are smaller. The critical aspect requiring management during an ISR operations is the possible contamination of groundwater by ISR reagents.
Valuable economic aspects of ISL benefits should also be accounted for. ISL involves lower Capex costs for mining development, processing plant, and infrastructures. A lower capital cost is necessary to start ISL production, allowing a modular increase in production and capacity. The Capex, Opex, and common cut-off grades for ISL differ according to commodities but are lower compared to conventional open pit or underground mining approaches, HS Today writes.
Lithium mines are not Serbia’s potential
The Alliance of Environmental Organizations of Serbia (SEOS), reacting to the statement of the Minister of Mining and Energy, Dubravka Đedović, that she will consider how to implement the exploitation of lithium, assessed that with the first advertisement, she made it clear why she came to that position, the non-governmental organization announced.
Didn’t anyone instruct the new minister when he offered her to sit in a chair from the white world, that she should work in that position in the interest of the people and the state? Understandably, none of the colleagues could take on that duty, because they would probably choke in the middle of a sentence, SEOS points out.
That association tells the minister that lithium mines are not Serbia’s potential, neither in the economic sense nor in any other sense.
And the fact that our non-renewable mineral in the non-renewable land that feeds us is essential to the world’s renewable energy sources is not our concern. We don’t want green pastures and bills for white world starched shirts to go over our hump, states the SEOS press release, Danas reports.
Greenland coastline is growing
While many are worried about large swaths of land disappearing under water as global sea levels rise due to melting ice sheets in the Arctic, Greenland finds itself with a different problem: Its coastline is growing. Scientists have observed that when Greenland’s ice melts, it runs down to the ocean, leaving sand and gravel behind that was previously trapped in ice. This sediment builds up along the coastline—effectively expanding the coast—creating new and highly valuable sand deposits. Mining these deposits could be lucrative for Greenland’s economy, but also carries several environmental and economic risks.
Mette Bendixen, assistant professor in McGill’s Department of Geography, co-authored a recent study surveying Greenlanders’ opinions about potential sand mining operations. She found that more than 80 per cent of respondents were in favour of using Greenland’s sand deposits.
The researchers surveyed roughly 1,000 Greenlanders, asking whether they would support a mining operation, what kinds of reviews should be conducted first—scientific, environmental, or economic—and how the project should be overseen. They found that while there was widespread support for sand mining, Greenlanders overwhelmingly prioritized conducting economic and environmental reviews so as to understand how these sectors would be impacted by mining activities. Additionally, when asked whether to involve foreign countries, 75 per cent said that the mining process needed to be kept at the national level. Despite these caveats, 76 per cent of Greenlanders were strongly in favour of exporting their sand deposits.
Over the last several years, Greenland has conducted an economic review of the benefits and drawbacks of mining these sand deposits. Citizens and public officials are concerned about the environmental risks the activity would bring, including the disruption of northern marine ecosystems. But Bendixen found no evidence of large-scale consultation with the people of Greenland.
“No one asked the question—what do the people of Greenland think about this idea?” Bendixen said in an interview with The McGill Tribune.
Sand mining has the potential to be lucrative for Greenland because of the rising global demand for the resource. Sand is used as an ingredient in the construction and manufacturing industries, primarily to produce concrete, glass, and electronic components.
“We use it in basically everything. It is the key ingredient for modern civilization,” Bendixen said.
Mining and exporting these sand deposits could give Greenland a way to boost employment and move towards economic independence. Greenland has a population of roughly 56,000, nearly 88 per cent of which are Greenlandic Inuit. The primary industries are fishing and tourism, and although it is politically independent from Denmark, Greenland still relies heavily on the country’s financial support.
Mining sand in Greenland carries grave environmental risks. Many current sand mining operations cause severe environmental damage, including erosion of coastlines and wild habitats, harm to local fishing populations, and a decrease in plant biodiversity. Bendixen believes this is something Greenland’s government should seriously consider before deciding to mine.
“Extracting something from nature will automatically impact nature, no matter what,” Bendixen said.
Although the amount of sand in Greenland is not enough to overcome the global sand scarcity problem, a carefully overseen mining process does have the potential to fill some of the global demand for sand in a more environmentally conscious manner.
“It could relieve some of the pressure on where it’s currently being extracted in a fashion that’s not sustainable at all,” said Bendixen. In many coastal regions of India and lake regions in China, sand mining encroaches on human settlements and wildlife, making homes and habitats inhospitable.
There’s also the risk that sand mining could negatively impact Greenland’s other economies.
“The fishing industry is the largest industry in Greenland. If you start having these huge barges and ships sailing around in these waters, will that affect the fishery? What about the tourism industry?” Bendixen said.
While these questions and more still need to be answered, Greenland’s sand deposits seem a likely target for new industrial development, McGill Tribune writes.
Rio Tinto’s Serbian saga offers a lesson in critical minerals
The failure of the Jadar Project in Serbia should be viewed as an opportunity for all role-players to recalibrate their processes in line with ESG principles
The northern hemisphere’s summer of 2022 will be remembered as one of the hottest in recorded history. For example, Nasa reported that June was one of the hottest Junes on record. The UK, in turn, experienced record temperatures in July.
On May 14, the city of Jacobabad, Pakistan, became the hottest city on Earth, when temperatures peaked at 51ºC. Contemporaneously other parts of the world suffered devastating climate change-related fires (such as those that blazed across France) or floods (including the August 8 large-scale floods in Seoul).
These events provide an unfortunate prelude to the Sharm el-Sheikh Climate Change Conference scheduled for November (better known as COP27), which is now less than three months away. While it remains critical for governments across the world to remain committed to the undertakings provided under the Paris Agreement, words without actions are of little value to those who are being (or will soon be) affected by increasingly severe weather events.
The single most important impediment to this growth trajectory, according to a July 2022 report by the International Energy Agency (IEA), is the supply of critical minerals and metals used in the manufacture of batteries. According to the IEA, battery and minerals supply chains will have to expand tenfold to meet government electric vehicle (EV) ambitions.
Following the increased demand for battery metals during the pandemic the prices of raw materials such as cobalt, lithium and nickel surged. In May lithium prices were more than seven times higher than in early 2021 owing to unprecedented battery demand and a lack of sufficient investment in new supply capacity.
The demand for key minerals such as lithium will only increase as the global community continues to race towards net zero by 2050. Whether or not we will succeed depends on access to the required minerals.
Controversial Jadar Project lithium mine
On April 3 Aleksandar Vučić was re-elected for a second term as president of Serbia, with the coalition formed around his party, SNS, winning the most seats in the National Assembly, albeit falling short of an outright majority. Vučić’s re-election followed the widely publicised January 20 cancellation of what became known as the controversial Jadar Project, the proposed development by Rio Tinto of a $2.4bn lithium mine in Serbia.
While the government’s actions raised new questions surrounding the future of the lithium mining industry in Serbia, in the light of the IEA’s recent report it also poses existential questions for global supply chains.
The cancellation of the Jadar Project followed months of countrywide protests over the potential environmental impact of the project. The affair gave rise to intense speculation over the introduction of a possible blanket ban on lithium mining in Serbia; president Vučić’s previous administration had promised to defer such a decision until after the election.
The introduction of such a ban would prove to be a mistake. The mineral deposits at the heart of the Jadar Project are located underneath a river system in an agricultural area that is prone to flooding, giving rise to a material environmental risk. The Serbian government did not have a direct stake in the proposed lithium mine and so could not justify the project on the basis that it would fill public coffers. The government consequently did not believe it could do what governments elsewhere do when they have a fair deal: politically and publicly defend it.
The Serbian government had hoped to use the project as a basis to attract further investment across the batteries sector, including the manufacturing of batteries and battery-reliant products, such as EVs. However, the government was unable to present to the public concrete assurances that the project would lead to the creation of more than a small number of relatively low-skill mining jobs. As a result there was a widespread sentiment among the Serbian public that the main beneficiaries of the Jadar Project would be European carmakers and consumers, who would benefit from Serbia’s cheaper labour costs at the expense of the Serbian environment.
By December 2021 thousands of people across the country had began protesting, and the matter quickly became the leading electoral issue in the build-up to the general election on April 3 2022. As a result, on January 20 the government announced that it was revoking all of Rio Tinto’s permits relating to the project, with the promise that it would consider introducing an outright ban on lithium mining following the general election.
Although the Jadar Project was ostensibly cancelled over concerns regarding the potential of environmental damage, it is important to note that Rio Tinto had complied with all applicable local laws. The project was cancelled prior to the completion of a final environmental impact assessment, as mandated by Serbian law, meaning the public furore over the potential environmental damage was not supported by a comprehensive scientific assessment.
The failure of the Jadar Project is therefore an important example of a mining project being cancelled owing to reaching a critical level of opposition from the public, also referred to as a loss of the “societal licence” to operate that may not have existed in the first place.
Managing the ‘S’ in ESG
The episode illustrates the reality that public acceptance is the currency on which mining companies trade. Such acceptance of a mining company can make or break a project, including one with strong central government backing. Accordingly, mining companies must be sensitive to the fact that globally the sector is often not trusted by communities for a variety of reasons (often outside the control of the companies themselves).
Companies must become better at convincing communities, authorities and the public that they can be trusted because they have a well developed understanding of the social risk factors that are most relevant to each individual project, rather than adopting an unchanging, one-size-fits all approach. The lack of a social impact assessment in Jadar (with an integrated human rights impact assessment), in line with industry best practice (though not required by Serbian law) proved fatal in this regard.
At the same time, the failure of the Jadar Project cannot rest on Rio alone. Jadar’s host government partner, the previous Vučić administration, expended political capital in promoting and advocating for the project until the affair became a serious electoral risk. The public was not persuaded by arguments that the project had been conducted in accordance with the applicable regulatory regime, largely because the regulatory regime itself simply was not aligned with the public’s evolving expectations. Governments, as well as mining companies, should be mindful of the fact that public-interest projects are always subject to scrutiny under the evolving criteria of societal expectations.
This is not in itself a new concept; it is simply the case that the public expectations on mining companies are increasingly becoming much more demanding than the legal requirements imposed by national regulatory regimes. The episode should be seen as a timely reminder for national regulators and mining companies should recalibrate their processes to be founded in environmental, social and governance (ESG) principles. Moreover, if governments and national regulators wish to remain the final decisionmakers over which mining projects are deemed to be in the public interest, they must ensure that the legal and regulatory regimes in place reflect the evolving expectations of the public in each stage of the development and operation of a mine such as Jadar.
The role of international financial institutions should likewise not be overlooked in this regard. Although they did not feature prominently in the Jadar Project, similar projects in developing countries are often financed (at least in part) by large international financial institutions such as the World Bank’s International Finance Corporation or the US Development Finance Corporation. In view of the importance placed by stakeholders on the reputation of mining companies, the backing of those international financial institutions is often used to buttress the credentials of sensitive projects.
Where this is the case the relevant international financial institutions are well placed to guide, through their well-developed performance standards, both mining companies and governments in navigating the challenges associated with obtaining and maintaining a project’s societal licence. This may include, where appropriate, making the availability of financing conditional on the relevant mining company satisfying certain ESG-linked criteria.
History is the best teacher
It is clear that the failure of the Jadar Project has exposed a breakdown in public trust and fault lines between the expectations of mining companies, governments and the wider public. However, extractive resources which are associated with “green” industries, such as lithium, present a unique opportunity to combine economic development with the advancement of the transition to low-carbon energy sources. Despite the associated challenges, entirely foregoing the extraction of such resources would be a mistake which is likely to have worse environmental consequences in the long run.
Accordingly, rather than resulting in a ban on lithium extraction, the failure of the Jadar Project should be viewed as an opportunity for investors, governments and international financial institutions to recalibrate their processes in line with ESG principles, to facilitate the sustainable growth of the mining sector. To achieve this a delicate balance must be struck between the ability of companies to turn a profit and the need to promote sustainable economic development and combat the effects of climate change in line with societal expectations and the concerns of the broader citizenry, Business Live writes.
After campaign to ban fracking, locals face ‘another carbon-heavy extractive industry
Community leaders in Co Leitrim say they feel “under siege” after learning that the Minister for the Environment, Climate and Communications Eamon Ryan intends to grant a prospecting licence for gold and silver in part of the county which had previously been targeted for fracking.
Jamie Murphy, chairman of lobby group Love Leitrim, said many locals who had been involved in a successful six-year campaign to ban fracking were unaware that they were now facing a threat “from another carbon-heavy extractive industry” .
The Minister recently published notice of his intention to grant a prospecting licence to Omagh-based company Flintridge Resources for 47 named townlands in two separate areas, close to Manorhamilton. According to the department, objections can be submitted up to November 6th.
Members of Love Leitrim say the timeframe is too short given the difficulty of informing and mobilising people during a pandemic.
Leitrim farmer Eddie Mitchell, who was also involved in the campaign against fracking, a method of shale gas extraction, said it was “barely believable that the Government would try to impose another heavy extractive industry into north Leitrim without properly informing the public”.
A notice published recently in the Leitrim Observer newspaper advised that the public had 30 days to submit objections to the Geoscience Regulation Office (GSRO). Mr Mitchell said he was not reassured by a declaration in the notice that a prospecting licence permits the holder to explore for mineral deposits but not to mine, and that any permitted activity would be “non-invasive” and have “minimal environmental impact”.
A decision to grant a prospecting licence was a key political decision, he said.
“A mineral prospecting licence is the decision that underlines all future authorisations. It’s the end of political oversight and the beginning of regulation, once that decision is made. It confirms extraction rights on licence holders over whatever minerals are found. This is what mining companies use as the basis to get investment.”
He said that while many people were only learning about the Minister’s intention “nobody will allow gold mining in Leitrim without a fight. We should be able to expect more from Eamon Ryan.”
Mr Murphy said it made no sense for the Government to issue a prospecting licence “in the middle of a climate and biodiversity emergency”.
“This is a very worrying time for the community for many reasons,” he said. “The mining process is very carbon-heavy and not compatible with building a sustainable future or with efforts to be carbon-neutral.”
‘Stop this industry’
Urging people in Leitrim to contact politicians to outline their fears, Mr Murphy said: “We do have a window of opportunity to stop this industry from gaining a foothold. Our call to the Minister and the Government is not to issue this licence.” He said there were real fears about the impact of mining on the landscape and on water supplies and air.
A spokesman for the Department of Environment, Climate and Communications said a prospecting licence did not confer any right to mine.
“Mining requires additional licences and permissions including planning permission from the relevant Local Authority and an Integrated Pollution Control Licence from the Environmental Protection Agency, ” he said. “Both of these permissions provide for public consultation.”
The spokesman said that, over the past 70 years, the department had issued many thousands of prospecting licences “of which only a small number have ultimately led to mining operations”.
The department said that Flintridge Resources sought to explore for gold, silver and base metals within north Co Leitrim in an area where its sister company, Omagh Minerals Ltd, had previously held licences from March 2014 to October 2020. The department said it was unaware of any complaints from the public in respect of Omagh Minerals’ activities .
A staff member at Flintridge Resources in Omagh referred all media queries to Mario Stifano, the chief executive of its parent company Galantas Gold in Toronto. It had not responded to a request for comment at time of publication.
Dalardian working to high environmental standards to meet strict regulations
Dalradian’s project at a glance:
A world-class gold, silver and copper mine that will boost the economy
Creating 1,000 direct and indirect jobs
Injecting £750 million into the local supply chain
A minimum of £4 million set aside for sustainable community projects
Peter McKenna, Dalradian’s community relations manager, says the plans will bring widespread benefits to Tyrone.
“Our proposal for an underground gold, silver, and copper mine in Tyrone represents one of the largest private-sector investments ever proposed for the region. It will have major positive economic and social impacts, just when we need them most.”
Similar projects – such as the Lisheen mine in Co Tipperary, and Tara Mines in Co Meath – have delivered enormous benefits to communities across Ireland. Cononish Mine in Tyndrum, Scotland, is also an excellent example. It operates in Loch Lomand and Trossachs National Park and employs people from the local community. Dalradian wants to recreate that success in Tyrone.
So, who is Dalradian, and what are its plans for an underground mine?
Dalradian’s project is at the edge of the Sperrins Mountains and holds one of the most promising undeveloped gold, silver and copper deposits in the world.
The existence of valuable minerals in the area has been known for centuries (small particles of gold were recorded in the Moyola River as early as 1652) but extracting large quantities has not been possible until now.
That is because the veins of gold that run through the rock do not contain large nuggets. Instead, microscopic particles of gold, silver and copper are bound into the rock, along with pyrite – or ‘fool’s gold’. Extracting these minerals requires modern exploration and underground mining methods.
Dalradian is a mineral exploration and development company that has been researching how to realise the project’s potential since 2009 when they were issued prospecting licences by the Northern Ireland government. Dalradian has invested more than £130 million in exploration, test mining, engineering and environmental studies. They aim to maximises the benefits for the community and other stakeholders while minimising the impact on the environment.
Gold, silver and copper all have contributions to make to the green economy. They are important for tech industry supply chains, and copper will play a central role in decarbonising the world’s energy supply. That’s because copper’s unmatched thermal and electrical conductivity makes it crucial for components used in wind and solar power generation.
Dalradian’s research work culminated in November 2017, when they submitted a detailed planning application to the Department for Infrastructure (DfI), requesting permission to build an underground mine. The plans outline a modern mine that sets a new standard for the industry in terms of environmental protection and use of best available technology.
Peter grew up in the Curraghinalt area. “Nearly every house in the immediate area has had someone work on the project, or for a Dalradian contractor at some time,” he says to illustrate the mine’s potential economic benefits.
“In the past decade, we’ve already employed around 200 people, used more than 200 suppliers from Tyrone, and engaged another 250 from the rest of Northern Ireland.”
To date, 35 students have received work experience through paid internships in areas such as IT, Environmental Management, Geology and Administration. In addition, Dalradian has provided 23 students at local colleges with bursaries to support their studies. We are Investors in People accredited and actively encourage staff development. Several staff members have been supported to complete advanced degrees
Those numbers will grow. The project is the beginning of a whole new industry that will transform Tyrone and boost Northern Ireland’s economy.
During operations, Dalradian’s mine is projected to create 1,000 direct, indirect, and induced jobs. It will require all sorts of skilled people other than miners – mechanics, lorry drivers, IT specialists, geologists, environmental managers, engineers, and administrators.
Dalradian expects to employ people with farming and construction experience since these skills are readily adaptable to mine work. They are investing £15 million to help local people re-skill through training courses, some in collaboration with South West College in Omagh. They expect that the resulting skilled jobs will pay an average salary of £40,000 – almost twice Northern Ireland’s average.
The project will inject £750 million into Northern Ireland’s economy over its 25-year lifespan as it engages an extensive network of local suppliers. Hardware stores, construction companies, hauliers, engineering firms, and equipment suppliers are just some industries that stand to benefit. The mine will also remit almost £100 million in taxes for Northern Ireland and reduce the country’s trade deficit by 2.4%.
Third parties have researched and endorsed these economic projections. Professional services firm EY conducted an external review of Dalradian’s proposal. It concluded that the mine – if approved – will provide a “significant and timely stimulus” to the local economy. Moreover, it would contribute to “a more prosperous, competitive, and regionally balanced economy” because the Fermanagh and Omagh District Council area would receive its most substantial benefits.
“A project of this scale would be an exceptional boost to the economy at any time,” Peter explains, “but in the current economic climate – when local unemployment has increased and is expected to grow further – this represents a phenomenal opportunity.”
Dalradian’s environmental responsibility underpins every aspect of their plans. The project will extract the mineral opportunity under the ground while leaving the landscape as close to its current condition as possible.
The site’s rehabilitation will begin during the mine’s operations and continue after mining has finished. The key to fulfilling this commitment is a dry stack facility to store the mine’s tailings. Instead of using a traditional settling pond or wet tails method, Dalradian will return roughly half the tailings underground to backfill and reinforce the mine’s workings. An engineered facility of crushed, compacted rock – the dry stack facility – will store the remainder and will be progressively restored. It is a landscaped feature: covered with topsoil, planted in with native trees and vegetation, designed for stability and shaped to fit the local landscape’s rolling hills.
The mine will protect groundwater and local rivers through careful water management. The underground mine will tunnel through rock that holds groundwater. Some of this will be used in the mine’s operations, supplemented with rainwater captured onsite.
Water will be extensively recycled within the site. A water treatment facility that leverages ultra-filtration and reverse osmosis technology will treat any water released into the local burns. The water that passes through this system will emerge the same quality as the water in the surrounding environment.
Dalradian plans for partial mineral refinement onsite, before sending the material for further processing at established sites elsewhere. This partial refinement will produce fine metallic sand known as a “mineral concentrate”. The Curraghinalt plant will only process material from the mine.
The project aims to be Europe’s first carbon-neutral mine, built for life in the low-carbon economy. Dalradian plans to achieve this by using conveyor belts instead of trucks and biodiesel and electric vehicles where possible. A comprehensive carbon offset scheme will account for any remaining emissions.
Dalradian achieved net-zero emissions for the second year running in 2020, conforming to PAS 2060 – an internationally recognised specification for carbon neutrality – and will continue to do so throughout the mine’s life. You can learn more about Dalradian’s environmental and social performance in their Responsible Business report, available on their website.
Dalradian supports the local community through various initiatives that protect the environment and help people reach their full potential. Over 600 local groups have already benefited, receiving support to conserve the local river, improve schools, and provide transport for older people living in remote areas. During the Covid-19 pandemic, Dalradian used its vehicles and supply chain expertise to source and distribute personal protective equipment, hand sanitiser, and medical help. The £4 million Dalradian Community Fund promises to continue this work.
Ireland is home to several modern mining projects that have enhanced the communities in which they operate. Dalradian’s project promises similar benefits for the people of west Tyrone.
Lisheen, in Co Tipperary, for example, hosted a zinc and lead mine from 1997 to 2015. The mine worked to a responsible closure plan, built into the project’s design, leaving an unspoilt environment and valuable infrastructure behind. Its effect was to provide training, well-paid employment, and social dividends for the local community.
In Navan, Co Meath, Tara Mines works closely with the local GAA club, community hall, and anglers’ club to improve the town’s life.
“Tara is a great example of how mining can enhance life for local residents,” says Peter.
“It’s the largest zinc mine in Europe, and it grew in tandem with Navan’s thriving tourism and agri-food sectors. The mine has operated safely and successfully near a tributary of the Boyne River for 40 years and directly and indirectly employs around 1,000 local people. It’s really at the heart of the community.”
Extractive industries’ continuous harming of the planet
The extraction of natural resources through mining and energy projects continues on a large scale, with disastrous environmental consequences. To understand how this is possible, one place to start is recognising that extraction is not just a physical engineering process. It requires social engineering as well. To be able to function smoothly, extractive corporations and their governmental allies sculpt social conditions. They “manufacture” consent and “manage” dissent towards their ventures. These industries depend on shaping the perceptions and behaviour of governments, shareholders, consumers, and people living in the areas where large-scale resource extraction occurs.
Usually, the media and academics pay attention when people resist such projects. A well known case is the struggle of the Ogoni people in southeast Nigeria to hold the oil company Shell to account for massive pollution. But it’s also important to notice the way corporations, governments and other elites try to pre-empt opposition. This means looking beyond obvious conflict and repression, to the less visible and long-term efforts to shape people’s opinions and behaviour. In a recent article in Political Geography, we analyse some of these corporate attempts at social engineering.
The counterinsurgency toolbox
Many of the corporate strategies and tactics to address opposition come from the toolbox of counterinsurgency. There are “hard” techniques, such as direct and indirect coercion, and “soft” tools aimed at “pacifying target populations”. The “softer” forms often relate to “community relations” work, such as sponsoring local events, medical clinics and other social development programmes. Social investments foster sympathy for extractive projects and dissipate criticism. How can one fight a corporation that provides so many life-affirming opportunities? The “soft tools” of social engineering also include bureaucratic procedures and practices. One example is legislation acknowledging indigenous people’s right to consent to or reject extractive projects on their land. A growing body of research shows how this legislation eases the way for projects to expand into community territories. Another way that extraction is made acceptable is through seemingly neutral speech. A case in point is speaking of “lessons learned” in relation to involuntary resettlement for extractive projects. In Mozambique, representatives of the government and extractive multinationals use the language of “learning lessons” from previous forced displacement efforts. This is to prevent opposition to renewed resettlement plans for liquid natural gas extraction in the north of the country. Directing attention to the technical procedures of displacement and how they can be “improved” takes attention away from displacement itself. And local NGOs become concerned with the resettlement initiatives, instead of critically monitoring the new projects. Bureaucratic procedures can make it look as if the people affected by resource extraction are participating, influencing decisions and sharing in the benefits. But the procedures actually channel and control dissent. They make it seem as if individuals themselves are responsible for gaining or losing from extractive operations, instead of directing attention to structural power inequalities.
The chimera of ‘green mining’
Another set of social engineering strategies is “green mining”. Since the 1990s, large-scale extractive companies have started to profile themselves as part of a global transition to sustainability. They engage in biodiversity offsets or draw on and invest in wind and solar power. More recently, corporations have attempted to depict deep-sea mining as sustainable. They claim it has limited impact on deep-sea ecosystems, in particular when compared to the dynamic and volcanic nature of the seabed. But it’s debatable how much “green extractivism” reduces the ecological harm of large-scale resource extraction. Offsets are based on the idea that mining corporations can make up for damage in one place by investing in biodiversity protection elsewhere. Research shows that the net benefits of these investments are very limited. Also, it’s difficult to compare the value of what is lost and what is protected. Biodiversity offsets can be part of political pacification, as shown by the case of Rio Tinto in Madagascar. Through a vast programme of offsetting and restoration, this corporation has managed to counter criticism of its operations. Yet offsets have created conflicts and insecurities for locals. They have also allowed the corporation to extend control over land, people and resources to multiple sites. The green economy has not only become a way to legitimise large-scale resource extraction. It has also become a new source of profit as corporations invest in market-driven nature conservation, ecotourism, and the production of biofuels and low-carbon energy.
Without further economic transformation, the demand for so called “clean energy” will lead resource extraction to soar. For example, the production of minerals such as lithium and cobalt is expected to increase from 2018 by as much as 500% by 2050. “Green growth” is a false narrative that industries push to continue business as usual. Academics and social movements should expose this narrative to avoid it becoming the cornerstone of climate policy. To address the ecological and climate crisis, policies fostering degrowth and redistribution are needed. This is the only way to acknowledge the historical responsibility of rich countries and ensure climate justice on a global scale.
Dalradian’s environmental info on Tyrone mining plan
Dalradian’s mine has been opposed on environmental and health grounds by residents around its proposed location at Curraghinalt. But Dalradian said the mine would bring major benefits to the area as it recovers from the impact of Covid-19 and faces Brexit.
Dalradian has said it’s given more environmental information to the Department for Infrastructure (DfI) as the mining giant progresses plans for its controversial gold-silver-copper mine in Co Tyrone. Dalradian said the information provides another milestone for the company ahead of a public inquiry into its plans for the underground mine in the Sperrins. Infrastructure Minister Nichola Mallon announced in June that a public inquiry would take place, adding that her department had received over 40,000 representations about the proposal. Dalradian, a Canadian company, said the latest information it’s provided gives “additional clarity for the department and statutory consultees”.
The firm said it includes a refinement of the shape of a dry stack so that it blends in with surrounding land. It said it had also given details on changes to the proposed roads, relating to road safety signage, minor amendments to road width and changes to road intersections. There was also additional information about a mine waste management plan. Dalradian president and chief executive Patrick FN Anderson said: “Our application has been thoroughly scrutinised for the past three years and two rounds of further environmental information (FEI) by a range of government departments, planners and outside experts.
“We are keen to begin the final test – a public inquiry – so that we can bring modern, environmentally responsible mining to Northern Ireland. With Brexit and Covid-19 threatening to have a massive impact on the economy, the mine will be immensely beneficial for Co Tyrone and the wider region, creating and supporting 1,000 jobs and supply chain spending of £750m over 20-25 years.
“We will be investing in training to make sure that it is local people who benefit most from the long-term opportunities this project will create.”
He added: “While we recognise that the economic opportunities provided by the mine are exciting, safeguarding the environment is also important.
“That’s why our project design includes the best available technology and a commitment to net zero carbon emissions over the lifetime of the mine.”