Europe, Problems with minerals

Mark Mills, speaking at a recent conference held by Norwegian funds management group, SKAGEN Funds, said that expecting the global EV transition from ICE vehicles to take place in the same time frame as occurred in Norway was impossible because the global demand for electric infrastructure and EV-specific minerals could never be met.

He said the mining industry throughout time has never managed to increase production at more than 10 per cent a year yet the demands required under projections envisioned by the EV industry would require mineral production increases in some cases as high as 7000 per cent a year.

Mr Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science. He is also a strategic partner with Montrose Lane (an energy-tech venture fund) and has an early background in mining.

Mr Mills said that if the mining industry were to achieve the aspirations of the EV supporters it would be “the largest single increase in demand or supply of metals in all of human history. It has never happened.”

He said that a study by the Electric Power Research Institute, a nonprofit research group in the United States for the electric industry “reached the conclusion that it doesn’t look like it is structurally possible to make the transition in the way that is imagined.”

He said that an EV requires 400 per cent more metals and minerals to build compared to a conventional car and that people “are suffering some modest delusion about what the possibilities are in the mining sector”.

He asked: “Is it possible? Can the world increase the production of these kinds of metals, not by 10 or 20 per cent, not by 50 per cent, not by 200 per cent, but from 700 to 7000 per cent; and in timeframes that are meaningful, which is in the next decade or two?”.

Mr Mills said under the current levels of mining investment required to build the cars, batteries and electrical infrastructure to make that happen the energy transition envisaged, “the reality is that it will fall well short.”

“The world’s miners are not investing 90 per cent of what’s required, nor 50 per cent of what’s required. They’re not even investing 10 per cent of what’s required in global mining expansion to meet the aspirations to build quantities of machines (EVs, batteries, windmills, etc) to have the rest of the world follow Norway.”

He also warned that on average globally, it takes about 16 years to open a new mine.

“In very simple terms, that means that if tomorrow we started investing the necessary amount of capital in exploration efforts, it will be 16 years before the first mines that we need will be open.

“This is a long way after the aspirations have kicked in to build the quantities of batteries, windmills and solar arrays that the world imagines outside of Norway.”

He told the conference that another challenge was that globally the grades of ore (the amount of ore recovered per tonne of mined material) are declining.

“Over all of history, the grade of ore that we mined has been declining – especially for the higher value of metals like copper, nickel, molybdenum, and magnesium.”

He said that the world will be short of copper, fundamental to the EV transition, “in the next year or two.”

“Copper ore grades are typically 1 per cent which means you have to dig up a tonne of ore to get 10kg and that doesn’t count the tonnes of rock overburden that are in the way of the ore. So you dig up tonnes of material to get to kilograms of metal.

“It means that the world is chasing larger quantities of metals from declining ore grades which means that the larger quantities of metals that are produced, the larger quantities of energy will be consumed to produce those metals to deliver to markets.”

He said that the increase in energy consumption as ore declines is nonlinear and the energy consumed rises exponentially.

“This is a non-trivial problem. It means that the future of electric cars, the future solar module, the future wind turbines, carbon dioxide emissions and metal requirements are rising non-linear just to fabricate them.

“So never mind whether (the minerals) are available, the cost just to fabricate them (the energy transition) will require the world to consume fuels and emit carbon dioxide at levels that are frankly unprecedented in mining history. We will solve those problems in due course. But in the mining industry, those problems get solved over decades, not in years.”

Mr Mills warned that as the world chases more and more minerals for the EV transition that the world’s miners are not able to supply, there would be large inflationary pressures in EV minerals.

“So when you look at the aluminum, steel and nickel and cobalt and look at the cost of purchase to make a single EV, that cost per EV was around $4000 before metal price inflation really started to kick in and it doubled to about $8000.

“If the world chases more product than the world can supply, that’s the textbook definition of inflation.

“The question you would ask is how much inflation would we get … on metals as the world chases the energy transition? The underlying fact is prices don’t go down. They just don’t go down.

“If you have 16 years to add supply, on average, a decade at best, and you increase demand immediately, which we are now doing with policies everywhere in the world, you should expect prices to not only go up, but to perhaps go up a lot.”

Mr Mills produced data that suggested that the global energy transition plans would put pressure on metals “that will cause all metals to reach historic price levels for an unprecedented length of time.”

“If you cause metal prices go up 200 to 300 or 400 per cent, or in lithium’s case 1000 per cent, you will have a top-line effect on global inflation.

“This will impact wind, solar and battery and EV prices because they’re made from these metals. The whole demand pressure is coming from those metals. Almost the entire increase that’s been going on at the cost of building wind turbines, solar modules and batteries is the cause of the increasing costs of the mineral inputs.”

Mr Mills said that roughly 70 to 80 per cent of the costs of fabricating an EV battery today is in the purchase price of the materials and 80 per cent of the cost of a solar module is in the purchase price of the materials.

He said that “the much vaunted claim” that the cost of minerals will fall as production volumes increase is incorrect and that the industry should in fact see increases of 200 to 300 per cent.

“These are the rising real prices that governments can hide with subsidies for a while, but the real costs are going up.

“So on what possible basis are forecasters saying that metal prices are going to go down after they’ve been rising in the face of these kinds of demand pressures?

“I don’t think they’re going to go down but this is a bet that people are making,” Mr Mills said, Go Auto Premium News writes.

Greenland, Amaroq Minerals says Kobberminebugt’s high-grade nature is ‘unsurprising’

Amaroq Minerals Ltd told investors that results from its 2022 Kobberminebugt project exploration programme in Greenland indicate significant copper mineralization to the western end of the emerging mineral belt which the company is exploring.

Providing details of the 2022 programme, Amaroq CEO Eldur Olafsson said: “The company continues to further its strategic metals projects, building upon the mineral potential of South Greenland.

“Kobberminebugt’s high-grade nature is unsurprising given the historic small-scale mining in the area, and our team is now working closely to identify extensions and additional mineralised bodies to build a large exploration target through our future field programme,” he added in a statement.

The Greenland-focused explorer noted that it acquired the licence covering these occurrences in the summer of 2021, following the conclusion of its mineral system modelling of South Greenland.

Exploration conducted across the licence in 2022 consisted of early-stage geological reconnaissance of the metavolcanic/granite contact zones over the historic Josva copper mine and up to 40 kilometres (km) along strike of the Kobberminebugt shear zone. This work included detailed drone surveying of the outcropping mineralisation at Josva at surface and within the historic adit system.

Amaroq said the programme aimed to confirm the presence and style of the mineralisation, assess its potential to host a mineral resource through extensions of the historical mine and in multiple bodies along strike and review the most suitable way to generate targets across this licence block in 2023.

The company said its fieldwork indicated massive copper sulphide bearing (bornite, chalcopyrite, chalcocite) mineralisation hosted in a sheared vein system that parallels the Kobberminebugt shear. These veins are hosted within a roughly 25-metre (m) wide diopside-hornblende skarn exhibiting a strong cleavage and hosting lower-grade copper mineralisation. This zone is in direct contact with hydrothermally altered Ketilidian granites.

Samples of these vein systems returned up to 4.2% copper over 2.5m including 11.6% copper over 50 centimetres (cm). Minor gold and silver grades were also reported, the company said.

2022 exploration highlights:

Amaroq said its geology team is now confident in the skarn origin of the mineralisation at Kobberminebugt which opens up the potential for multiple mineralised skarns along the granite contact zone which extends around 40 km to the northeast and in a further around 35-km contact zone in the north of the licence.

This highlights the copper potential of this area of the South Greenland copper belt, it added. Further, from assessing the attitude of the surface mineralisation at Josva, Amaroq said the geology team believes there is potential that this narrow mineralisation style could open up at depth or along strike, indicating mine scale tonnages.

2023 exploration programme

Amaroq said it intends to follow this exploration with a detailed assessment in 2023 of the skarn geometry and mineralogy, and plans to generate targets at depth at Josva and along strike of the skarn contact zones and Kobberminebugt shear system through commissioning a detailed airborne geophysical programme utilising a similar system to that successfully employed across its other Greenland assets.

Amaroq’s principal business objectives are the identification, acquisition, exploration, and development of gold and strategic metal properties in Greenland. The company’s principal asset is a 100% interest in the Nalunaq Project, an advanced exploration stage property with an exploitation licence including the previously operating Nalunaq gold mine. It has a portfolio of gold and strategic metal assets covering 7,866.85 square kilometres, the largest mineral portfolio in Southern Greenland covering the two known gold belts in the region, Pro Active Investors writes.

Serbia is an important source of rare minerals

Today, mining is an important factor in economic activity and growth in Serbia, and at the beginning of this year, this branch of industry contributed 2.6% to GDP in the first quarter and 2.3% in the second quarter, said the Minister of Mining and Energy, Dubravka Đedović. during the address at the conference “Mineral resources of Serbia, sustainable growth through responsible mining”, according to the Government’s website.

Also, as she added, mining records a higher growth rate than industrial production, because from January to July this year, compared to the same period in 2021, industrial production increased by 2.7%, while mining grew by more than 30%, which is the result of increased investments, especially in exploitation and processing in the copper mine.

According to her, 27,000 people were employed in the mining sector in 2021, of which 8,500 were employed in metal mines, with a tendency to increase that number.

As stated, “currently, geological research is carried out in Serbia on 178 exploration fields, of which 120 are fields of metallic raw materials, among others, copper, gold, lead, zinc, silver, two exploration fields of energy raw materials, and 56 fields where they are researching non-metallic raw materials”, Đedović specified.

Serbia is rich in mineral resources, primarily copper, gold, silver, lead, zinc, borates and lithium, she stressed and added that in the era of modern technologies, mineral resources are “the basis of the development of modern society” and “a necessary prerequisite for the existence of modern civilization”.

Mining activity in the context of the country’s energy independence and further economic growth is not a matter of choice, but an inevitability. The state’s task is to, together with mining, use the wealth we have in a rational, responsible and sustainable way, respecting nature and taking care of the communities it has an impact on, the minister said, according to the official website of the Government, eKapija writes.