The Mining Industry Is Replicating the Oil Sector Crisis

Yves here. We’ve been warning for some time that green energy advocates seldom seem to consider the environmental costs of mining key inputs like copper and lithium. It now turns out that actual costs are going to become more and more of an issue as mining companies have underinvested and seem likely to continue to do so.

We keep arguing that an energy “transition” is not going to do enough to reduce carbon emissions in anything remotely like the time window available to prevent catastrophic outcomes. Radical conservation has to be the leading strategy, but it’s too unappetizing and anti-consumerist for anyone mainstream to advocate it.

By Irina Slav, a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. Originally published at OilPrice

  • The global energy transition will require a huge volume of metals, and the prices of these metals are soaring.
  • Just as in the oil industry, the mining industry is suffering from underinvestment as companies focus on shareholder returns.
  • The rising prices of metals combined with supply chain issues and inflationary headwinds will be a major issue for the energy transition.

Earlier this month, Tesla made headlines yet again, but this time the news wasn’t good: the company was raisingthe price of most of its cars, with CEO Elon Musk citing raw material inflation as one of the reasons for the hike.Tesla is not the only one. The prices of copper, cobalt, lithium, aluminum—pretty much everything that comes out of the ground—are soaring. Normally, this would motivate miners to spend more on getting these metals out of the ground. This time, however, they are taking the same cautious approach as U.S. shale drillers, and that doesn’t bode well for the energy transition.

The world’s top ten miners are going to spend some $40 billion on mining projects this year and next, the Wall Street Journal reported this month, citingdata from Bank of America. That’s down from double that back in 2012 and spells trouble for the energy transition as it pushes the prices of the raw materials essential for the transition much higher than is comfortable for anyone involved in building solar farms and wind parks.

Iron ore, the essential ingredient of steel, for instance, is up from a bit over $82 per ton last November to over $125 per ton. The price is far below the peaks of over $227 reached last year but still a significant increase over the last six months.

Copperhas been on a steady rise since 2020, doubling in price in that period, even though, like iron ore, it is hypersensitive to news from China, and the recent worry sparked by Covid lockdowns weighed on copper prices. This worry, however, cannot trump fundamentals, and copper’s fundamentals are tight.

The copper market’s tightness will change soon enough, according to RBC Capital Markets, as several new mines come online this year. Still, the long-term price outlook for the basic metal remains bullish.

Meanwhile, lithium is up by 432 percentover the past year, which is partly why Tesla announced those price hikes this month. And miners are still not investing more, although, per the WSJ report, they are producing more lithium and cobalt.

It seems that miners are, like their peers in oil and gas, for once focusing almost exclusively on returning cash to shareholders. This is what is slowing down growth in oil supply in the United States, and this is what appears to be slowing down growth in the supply of basic metals and minerals necessary for renewable energy installations and electric vehicles.

Then there is, again, like in oil and gas, the issue of overall inflation, which is pushing up the costs related to new developments. The chief executive of Freeport McMoran acknowledged this recently on an earnings call, saying, “Things are just piling up that are adding to the supply constraints,” as quoted by the WSJ.

This is exactly the same sentiment that oil and gas producers have as a result of equipment shortages, workforce shortages, and other shortages that are driving up the costs associated with new products.

The mining investment problem, however, may have more significant repercussions than the shale oil investment problem. Because while shale wells may take a few months from start to finish, a mine takes years, often a decade or more, to go from final investment decision to start of production.

Earlier this year, at a mining industry event in Saud Arabia, insiders spoke a lot about this issue, warning it could threaten the progress of the energy transition, making it a lot more expensive and slowing down the adoption of renewable energy and EVs for lack of raw materials.

Another problem is a sort of hidden inflation: falling ore grades across mines are pushing development costs higher. This is the result of natural depletion at already existing mines and is irreversible. The solution could be more new mines, but in addition to the extensive lead times, these also tend to be in politically unstable jurisdictions, which adds to challenges in securing the future supply of transition metals and minerals.

Goldman Sachs recently downplayedconcerns about metals supply, saying in a note that it expected lithium prices to “correct for the rest of the year and remain under pressure from increasing supply over the next few years.”

The note sparked a strong reaction from those of a more bullish stance on the ultimate EV metal, who pointed out the time it takes for new supply to hit the market—those long lead times for new mines—and the continued supply chain snags that are creating headaches for virtually every industry that is trying to return to normal.

Given the investment plans of the biggest miners in the world, those Goldman critics have a good reason to expect further price increases in the metals market. As in oil, the lower the supply, the higher the price, and higher prices tend to erode demand, be it for gasoline or solar panels.

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35 comments

  1. Lex

    I can’t speak to the investment side, but on the practical side building a mine is a very long term, very expensive and unsure proposition. Right or wrong, it’s the ultimate NIMBY issue. The permitting process is ridiculous. Within 30 miles of home there is an iron mining complex that’s been around +100 years. Half is mothballed. There’s also a “new” nickel/copper mine which is underground. It took 5+ years to make it operational after approval. It’s on its second ore body being worked, but rather than attempt to permit a new surface portal, they blasted a path underground something like 1200m to reach it. In a pickup truck it takes a solid 45 minutes (if no haul traffic) to get from the portal to the working area of the new deposit and it took more than a year to build the access.

    The iron mine owner (also big in Minnesota) bought a steel maker two years ago and commissioned a real steel furnace. Most of the furnaces for virgin steel have been shut down in the US in favor of the arc style used for recycling. But to fully take advantage of it, the Soo Locks need improvements to handle bigger boats. That project was supposed to start in February, then it was June but the $1B price tag has inflated to $3B since the original bid submission (only one contractor submitted a bid).

    Two new mines have been proposed / explored in the bearish area, both failed to get off the ground. This is in a mining friendly region, or at least one that was built on mining. The famous brownstone used to build the cities on the east coast came from a defunct mine/quarry on the south side of my town, our incredible city park was originally a silver mine, there used to be hundreds of small iron mines, the ore dock in my neighborhood has been operational for 120 years, and a bit further away copper has been mined for essentially ever. We’re rock farmers.

    Totally aside, my personal deepest journey into the earth is 495m below sea level, starting from about 500m above (Lake Superior is about 200m above sea level). It’s dark down there. Real dark. A sort of dark you can’t describe except maybe “enveloping”.

    Reply
  2. You're soaking in it!

    “Radical conservation” is coming, happening before our eyes, and the primary implementation strategy seems to be “a rising tide drowns everyone at the bottom of the ladder”. Other strategies are possible, so far the closest viable alternatives might exist along the lines of Cuba or Bhutan, but without even being able to acknowledge the problem it’s hard to imagine how most wealthy countries and their leaders would ever let go of their current philosophy to make a kind of peaceful transition. Energy and material shortages are just the beginning.

    Reply
  3. Grumpy Engineer

    @Lex: “Right or wrong, it’s the ultimate NIMBY issue.

    Yes. One major example of this is the proposed Thacker Pass lithium mine. The US currently consumes about 20% of worldwide lithium production, but we only produce 2% of lithium ourselves and import the remaining 18%. Thacker Pass would significantly boost lithium production in the US.

    But will this mine ever open? I honestly don’t know. Right now the project is embroiled in lawsuits, and I expect it to take many years for things to get resolved.

    https://grist.org/climate/the-west-has-a-new-front-in-the-war-over-electric-cars/
    https://amp.theguardian.com/us-news/2021/dec/02/thacker-pass-lithium-mine-fight-save-sacred-land-nevada

    Reply
    1. Carolinian

      As previously mentioned I’ve been to that Thacker Pass area and it’s hard to imagine a more remote region for the NIMBY outrage to brew up. Clearly we need to stop trying to antagonize China since it’s obvious that most Americans, including those environment loving Greens, would prefer that the dirty business take place over there.

      Reply
    2. heresey101

      By the time these lithium mines get built, the need for lithium will be on the beginning of less demand for lithium batteries. A year ago, CATL the worlds largest battery producer introduced their sodium ion batteries. This will change EV’s and renewable development with 30% lower costs. They have announced that they will start production in 2024.
      https://insideevs.com/news/523413/catl-unveils-sodium-ion-battery/

      “The first-generation model is expected to deliver a decent energy density, very fast charging capability, and especially strong performance at low temperatures.
      • energy density of up to 160 Wh/kg
      (the target for the second generation is 200 Wh/kg)
      • fast charging up to 80% SOC in 15 minutes at room temperature
      • excellent thermal stability
      • great low-temperature performance
      at -20°C, the sodium-ion battery has a capacity retention rate of more than 90%
      • system integration efficiency can reach more than 80%
      (cells consist more than 80% of the pack weight and/or volume).
      Compared to the lithium-ion LFP (lithium iron phosphate) chemistry, the sodium-ion also does not contain cobalt or nickel and is expected to be similarly affordable at scale. “

      Note the 80% charge in 15 minutes, 200 Wh/kg (similar to lithium ion), costs starting at 30% below lithium ion going to 50% below at volume scale. This isn’t a lab experiment but is the largest battery manufacturer in the world. It should be relatively easy to meet the 27 EU countries 2035 ban on fossil fuel powered cars.

      Additionally, there is no shortage of sodium. It may necessary to build lots of desalination plants using excess solar electricity to run them. But there is the side benefit of all that water for drinking and irrigation.

      Irina’s negative view of the world, especially renewables, is counteracted by her boss is his description of renewables on the Texas peak electric usage due to the heat wave.
      https://www.yahoo.com/finance/news/texas-turns-renewables-electricity-demand-190000634.html

      Finally, Western Australia is closing down all coal mines and powering with wind, solar, and batteries.

      Reply
  4. John

    This issue and those related to it are merely aspects of the meta question: Is an industrial civilization compatible with a viable environment? From all appearances the answer is no.

    Reply
    1. Jeremy Grimm

      I believe industrial civilization is indeed compatible with a viable environment … but on a much smaller scale and based on a different values system than maximizing profits.

      Reply
    2. hk

      It might be, but it’d require both planning and compromise –and even then, it’s still “if.” But modern westerners don’t compromise and certainly don’t plan–moral certitude and all that.

      Reply
      1. drumlin woodchuckles

        Well lets see if China plans and compromises its way to an eco-viable industrial civilization any better than the Euro-Settler West does.

        Reply
  5. Pelham

    What disturbs me most about the issue of climate change over many years now is the way possible solutions are mentioned and then forgotten. Fusion is a great example. I’ve read several accounts about seemingly simple and clever ways to achieve commercially viable fusion only for there to be no followup.

    And then more recently there was some drilling company that confidently said it could tap into to the limitless energy generated by the Earth’s hot core to drive turbines, and could do so practically anywhere at minimal cost. What’s up with that? Maybe the claim was utterly bogus. If so, shouldn’t it be revealed as such? If not, why haven’t we launched a trillion-dollar (give or take a few bucks) program to implement the technology?

    Reply
    1. voislav

      The company is called Quaise and they were using a maser (millimeter wavelength laser) for drilling geothermal vents. Nothing to do with fusion, but their press releases were touting that the same technology was developed for fusion applications. This stuff is in early commercial development, so 5 – 10 years from real world use (if ever).

      Their basic principle is simple, if you drill 5-10 miles down, the Earth is hot enough to generate supercritical steam that is used to drive regular power-generating turbines. Iceland is using similar technologies for geothermal power generation since, due to volcanic nature, they don’t have to drill very deep to get to sufficiently hot layers.

      Reply
    2. Solarjay

      Another article not based in reality. We can’t drill deep enough to access that part of the earths crust.
      However there is a variety of geothermal which is dry heat. Until directional drilling this wasn’t usable. Now a Well is drilled in hot dry rocks and it surfaces some miles away, a big U. Water is pumped into the pipe, it’s heated along the way into steam, and it runs a turbine at the other end. Much of the original water is condensed and reused.

      And fusion is probably the big future energy source but it’s still a long ways out.
      Fission is here now and it works. In looking at Greenhouse gas emissions per energy types, fusion is at the lowest, even compared to wind and solar and that study didn’t take into account batteries.
      Just have a think YouTube channel
      https://m.youtube.com/watch?v=wNHe-lQrrOs&t=641s

      Reply
    3. Grumpy Engineer

      @Pelham: You described “the way possible solutions are mentioned and then forgotten.

      The reason for this is that many of the proposed solutions out there aren’t actually viable. They are too costly, or have side-effects that are too severe. I can think of numerous past examples.

      [1] Adiabatic diesels for improved efficiency: Alas, they had excessive emissions and insufficient reliability.
      [2] Running CO2 through lime to form calcium carbonate, to sequester carbon: Massive mining of lime required, and even more massive burial of calcium carbonate. The material flows here would be stupendous.
      [3] Running electric trains (or large motorized weights) up and down steep slopes as a means of storing energy: The technology has existed for decades, but nobody has bothered. Why not? Because it’s too expensive.
      [4] And more recently, solar panels that produce power at night: Sounds terrific, but when you realize that nighttime power production will be less than 0.1% of daytime production, you quickly conclude it’s not worth the effort.

      Given time, I could think of many more examples. The reality is that if the solution were cheap and easy and minimally-disruptive, people would already be doing it. Power companies hate paying for fuel, and they’ve worked for decades to minimize their need for it.

      And as for super-deep geothermal, I don’t see it happening. Technologies for deep well drilling and geothermal power generation have existed for decades, and nobody’s bothered to mate the two despite the “obvious” potential. Why not? My guess is cost. The multi-mile multi-section pipe that carries the working fluid down and back must be both super-strong (to withstand the enormous pressures) and super-insulated (to avoid having the thermal energy conducted out the sides of the pipe on the way back up). This doesn’t spell cheap.

      Reply
      1. Solarjay

        Hi GE,
        My first job was doing geophysics for geothermal production in Nevada. Then working on the actual drilling for it.
        Yes there is some initial heat loss/soak into the pipe/ground. Once the well is run for a short while this heat loss is very minimal.
        The pipes used to bring the steam up from 10,000’ down from the wells I worked in is off the shelf standard pipe casing. Yes you have to pick the right pressure rating.

        When they frack oil and gas wells the pressures they use can be in the 9000-15,000 psi and more.

        A 10,000’ well would only have 4300psi static pressure if it was completely filled with water, but it’s not. Water is injected which is turned into steam partway along the pipe, and while it’s under pressure it’s not that high.

        Dry wells can be deeper or shallower, the technology is solid and proven, thanks to fracking.

        As to why nobody’s thought about it?
        Good question. As to cost, it’s 24/7 production and it’s dispatchable which is worth a lot.
        Drilling is expensive especially when your not sure if you’ll get anything. Confirming the right heat levels is cheap and fast. Making the ROI a better known fact.
        It’s another site specific type energy source but like so much these days only wind and solar and lithium batteries are easily able to get VC money.

        Reply
    4. c_heale

      Geothermal energy plants release large amounts of hydrogen sulphide, a very potent greenhouse gas (family member in the industry).

      Reply
      1. Solarjay

        I don’t know where you’re getting your information.
        It would depend on what minerals are in the water for traditional geothermal.
        Where I worked it was super clean.
        For dry geothermal you are introducing clean H2O ( no contaminates) into a pipe that has no connection to the earth because it’s separated by 1/2” thick steel pipe.
        No way to get contaminates into the pipe.

        Reply
  6. Kolyn

    I find this news incredibly interesting, the whole premise of energy transition rests on mining & minerals. I’m sure the full scale of the destruction & pollution isn’t apparent to the general public. Not to mention that there just isn’t physical enough ’stuff’ to enable the transition at the scale that is so confidently proclaimed.

    For anyone also interested the journal Dark Mountain produced a while issue on the theme of extractivism.

    Reply
    1. Solarjay

      The amount of resources/mining and land required by source has been often covered in NC and other places. It is a real issue that is usually left out of the talk on renewable’s.

      If looking at that metric, nuclear is the clear winner. Longest life, least land foot print, smallest amount of materials etc.
      And most all all comparisons are solar or wind vs nuclear and don’t include batteries/storage, which when you do increase the mining aspect by a huge amount.

      It’s pretty amazing how unless you read the more science based articles on how to address global warming, nuclear is just left out of the options.

      Reply
      1. John Steinbach

        Even if the environmental costs associated with nuclear power generation are excluded, the issue of radioactive waste isolation solved/ignored, the costs of dealing with past disasters like Fermi 1, TMI, Chernobyl, and Fukushima written off, the outrageous capital costs of constructing new nukes (see Olkiluoto in Finland and Vogtle 3 and 4 in Georgia) eaten, the costs of cancelled projects too numerous to mention forgotten, there simply isn’t enough time to build the thousands of nukes necessary to begin to make a dent in the increase in greenhouse gases.

        As the article makes clear, the same time constraint is operative for alternative energy sources. Sentimental wishes for technology to rescue industrial civilization obfuscate the reality of a future of radical conservation. The handwriting has been on the wall for over 60 years. (See Louis Mumfords Man’s Role In Changing the Face of the Earth, 1956, and Barry Commoner’s The Closing Circle, 1971)

        Reply
  7. Solarjay

    For the USA it would take 400 new one GW nuclear reactors to produce all of our current electrical loads. Most new designs have 2 or 4 reactors per location.
    Currently 20% of our electricity comes
    From those 93 reactors

    https://www.eia.gov/energyexplained/nuclear/us-nuclear-industry.php

    While we have about 13% renewables.

    https://en.m.wikipedia.org/wiki/Renewable_energy_in_the_United_States

    And even with this small amount the need for storage is rapidly increasing. Which is a huge increase in the mining and environmental footprint.

    We can go back and forth about the actual dangers of nuclear, the actual amount of high level waste, numbers of deaths vs coal deaths, climate change/global warming with methane/coal/oil, mining, etc.

    In the mean time every day we have that point of view, 100 million barrels of oil is mined, billions of CuFt of methane, billions of tons of coal all hastening the rise in CO2 and warming.

    But maybe your right, it’s just technically impossible to actually build enough power plants in time. We just don’t have the brain power, or skilled engineers, or workers to do it. ( sorry I don’t believe that)

    Reply
    1. Grumpy Engineer

      The South Koreans managed to build their nuclear fleet for ~$2500/kW, which is about one-fifth of our latest cost here in the US. If we could figure out how to build nuclear reactors as cheaply as the South Koreans did, we could decarbonize the grid for less than a trillion dollars.

      Reply
    2. Mike

      Maybe its me but I got 1,000 units when I did the math.

      Total generating capacity of 1,143,757 MW minus 98,000 MW (From your link) = 1,045,757 MW

      So at 1,000 MW each puts you at 1045 new units needed.

      We can barely even build one of these in our country anymore…

      Globally its something like 10,000-14,000 new units required. This would all require breeder reactors since there is not enough uranium reserves to last long term if it is to replace existing power sources.

      Reply
      1. Grumpy Engineer

        @Mike: I agree that 400 GW-size units seems low. But if you deployed some storage in parallel with the nuclear, you could probably get by with 750 GW-size units or so. And that storage could be fairly modest in size. Perhaps 250 GW with 12 hours of capability (3 TWh total) to deal with demand variations. [In contrast, an all-renewable scheme could require 100+ TWh to deal with a multi-day stretch of unfavorable weather that causes terrible down-side supply variations in addition to the usual demand variations. And electrifying the 280 million-vehicle automobile fleet would require about 20 TWh.]

        We can barely even build one of these in our country anymore…” Sadly, this is true. We’ve lost our ability to build nuclear power stations (or any other facility of that size and complexity, for that matter) quickly and cost-effectively. We need to re-build that industrial capability. If we don’t, any attempt to re-build our energy infrastructure (whether it be nuclear-based or renewables-based) will fail, and the status quo will reign forever.

        Reply
        1. Solarjay

          The information I linked to from the EIA is 100% accurate. The 20% nuclear with 400 more plants is for energy produced/used per year.

          The 1000 plants you are talking about is for power. A totally different measurement of electricity.

          The gaps between the two would be filled by much cheaper short duration peaker plants. Could be NG, batteries, other types of storage. You would want plants that can be quickly and easily ramped up and down to meet those shorter duration loads.

          But a poor use for nuclear plants.

          Reply
          1. Grumpy Engineer

            If you ran 400 new reactors at 100% utilization, you indeed could produce enough energy to cover the entire year, but they cannot be run at 100%. Not if they’re supplying almost all electricity. During the more temperate weather of the spring and fall, generator utilization must go down to avoid oversupplying the grid.

            And during extreme weather spells seen during the peak of summer or dead of winter, power demand can remain north of 800 GW for extended periods of time.

            Realistically, what you need is enough power capability to meet the average demand seen during a really hot week or a really cold week. And then enough storage or peaker capability to address the demand variation seen within those time periods.

            The same logic applies to renewables, but now with large swings in supply capability added in. Here, we’d have to massively overprovision to deal with periods of low supply and/or add massive amounts of storage/backup capability to compensate. Even with the reactor count bumped to 750, nuclear remains significantly more feasible. I’m definitely an advocate.

            Reply
  8. Dave in Austin

    I’ll address only copper, not lithium. Right now I’m doing research on the 1964 copper crisis and the relationship to the Vietnam War for an article . I’ve been a regular investor in Rio Tinto (symbol “RIO”, British) and Freeport McMoran (symbol FCX, American). Minerals are a wild business. What I bring to the table is an understanding of the geopolitical risk. I’ve made a ton of money and lost 2/3 of a ton on copper. My comments:

    “Prices are inflated”. Wrong. By 1965 the world price for refined copper had risen on high demand to 56 cents/lbs. The US (managed by the government for American consumers) price was 34-36 cents/lbs. US inflation since 1965 means $1 in 1965 = $9.28 today. So the old, very low and now vanished, “US producer price” would be $3.34/lbs. The world price (which US consumers now live with) would be $5.19/lbs. Copper prices are actually down a bit in the past 50 years.

    Rio Tinto started in the 19th Century mining the old Phoenician non-ferrous metals mines in Spain (Rio Tinto means “river of tin”.) 72% of the company’s income now comes from the huge Pilbara iron strike in northwest Australia the output of which is sold to China. With a PE ratio of below 5 and a dividend rate of more than 11% it looks like a world-class bargain. But institutional ownership is below 10% because the Chinese are mad at Australia and fearful that in a conflict Australia would follow US “advise” on an embargo. So they are now beginning to buy from Brazil (check out VALE) and developing huge, Chinese owned, open pit mines in Africa. Only 10% of RTZ profits come from copper. In the past two years the stock price has swung between 50 and 90; today it is about 65. Invest at your own (geopolitical) risk.

    Freeport is an even more amazing story; a natural gas exploration company cobbled together in the early 1970s by a poor Texas boy named Jim Bob Moffett to deal in Texas natural gas. They wanted gas storage so they purchased Texas Gulf Sulfur which had empty sulfur domes off the Texas coast… and by doing so they also got an almost valueless potential interest in an undeveloped, inaccessible mine 13,000 feet up in the New Guinea (Indonesian) rain forest/glacier at a spot that got 300 inches of rain/year. They struck it rich in copper and gold. PE of roughly 10 and dividend of .89%. Anybody who wants to make a long-term investment in Indonesia should buy.

    The world has a huge amount of low-grade copper than can be extracted from open pit mines. Preferably not in my back yard. The two companies – and the industry- expect prices to come down a bit based on supply and demand projections, both of which are “Subject to change”. The two companies are laying down billion dollar bets on developing new mines in Peru, Chile, Mongolia and Serbia which will come on-line in five years-or-so. Each place has an enormous geopolitical risk…. and reward. This is not an investment for widows and orphans. The price of copper today is about where it should be and availability can be increased dramatically… if the price, the geopolitical risk and the “unknown unknowns” like global warming, pollution rules and interest rates cooperate.

    Oh, and by the way, copper is a poison, used as an insecticide and effects human health. Any American tort litigation risk here?

    Reply
  9. Jeremy Grimm

    The u.s. has already extracted and burned or exported its petroleum which could be readily extracted by conventional means. I suspect that much of the u.s. mineral wealth has already been extracted and tightly bound into goods and products. I believe the u.s. has placed too much faith in its ability to command tribute from global resources and much of the world’s resources have already been extracted and burned or bound tightly into goods and products. Though we might blame the increasing costs for mineral wealth on many causes, mining is based on extraction. The minerals extracted from mines do not grow back to supply a new harvests at the end of a season.

    The Green New Deal ignores these little difficulties with resources and scale in its visions of change without changing how Humankind lives. I regard the Green New Deal as little more than a political-economic slogan dreamed up to excite one component of the Populace while crafting new political power and profit opportunities for a new faction of the Power Elite.

    Reply
  10. Mikerw0

    I find this post a little frustrating and not really new news. The need for all these metals to transition is well known. In my opinion this has been better articulated elsewhere. Also, this article leaves out the need for Ni, which is crucial.

    Getting to brass tacks, this is always and ever a price (cost) and volume problem. To make much of the new technologies work vs. hydrocarbons the price of these metals has to keep falling. Right now for a variety of reasons they are rising. The way we handle hydrocarbons today make them plentiful and relatively cheap and there is a gargantuan installed base of stuff to ove and use them.

    As too miners, yup it takes time, as in on average a decade to both find and develop an ore body. By recollection, the last major ore body found was the Grasberg in Indonesia in around 1993. We have been searching ever since. Also, assuming a big ore body is found mining companies need a sustained price signal to go through the effort to develop it. I would also add that they need to find something that is at the low end of the curve for both cap-ex per unit of production and operating cost to proceed aggressively. The history of the industry for marginal ones that start, or restart, when there are price spikes is quite sad.

    If we really want to get better price signals end speculation on commodities which increases variability. Not holding my breath.

    Reply
  11. heresey101

    By the time these lithium mines get built, the need for lithium will be on the beginning of less demand for lithium batteries. A year ago, CATL the worlds largest battery producer introduced their sodium ion batteries. This will change EV’s and renewable development with 30% lower costs. They have announced that they will start production in 2024.
    https://insideevs.com/news/523413/catl-unveils-sodium-ion-battery/
    https://www.catl.com/en/technologybrand/831.html

    “The first-generation model is expected to deliver a decent energy density, very fast charging capability, and especially strong performance at low temperatures.
    • energy density of up to 160 Wh/kg
    (the target for the second generation is 200 Wh/kg)
    • fast charging up to 80% SOC in 15 minutes at room temperature
    • excellent thermal stability
    • great low-temperature performance
    at -20°C, the sodium-ion battery has a capacity retention rate of more than 90%
    • system integration efficiency can reach more than 80%
    (cells consist more than 80% of the pack weight and/or volume).

    Compared to the lithium-ion LFP (lithium iron phosphate) chemistry, the sodium-ion also does not contain cobalt or nickel and is expected to be similarly affordable at scale. “

    Note the 80% charge in 15 minutes, 200 Wh/kg (similar to lithium ion), costs starting at 30% below lithium ion going to 50% below at volume scale. This isn’t a lab experiment but is the largest battery manufacturer in the world. It should be relatively easy to meet the 27 EU countries 2035 ban on fossil fuel powered cars.

    Additionally, there is no shortage of sodium. It may necessary to build lots of desalination plants using excess solar electricity to run them. But there is the side benefit of all that water for drinking and irrigation.

    Reply
      1. Mike

        Proportionally, in the US, Renewables have only increased enough to match the increase in grid demand. So merely it is only keeping up with our growth. Also they lump in biofuels in renewables stats which is questionable considering our long term farming difficulties we already face plus research indicating there is no ROI above 1 for bio-fuels..

        https://www.pewresearch.org/fact-tank/2020/01/15/renewable-energy-is-growing-fast-in-the-u-s-but-fossil-fuels-still-dominate/ft_2020-01-15_energyprimer_1/

        Reply
  12. Mike

    “Another problem is a sort of hidden inflation: falling ore grades across mines are pushing development costs higher. This is the result of natural depletion at already existing mines and is irreversible. The solution could be more new mines,”

    From what I understand the solution is new mines because instead existing mines process worse ore overtime which is easier then opening a new mine. Therefore it may not be actually a “peak resource” issue. Regardless the increase in mining capacity required around the world just introduces new environmental pressures. If we were actually to price into a commodity the cost to rebuild the land after a mine closure, is it even economical anymore? Maybe in the future to keep our consumer culture going half of the people will be dedicated to mining, 40% to rebuilding the land and 10% for the PMC running us peasants. Could be some Mordor like planet in front of us.

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  13. orlbucfan

    We’ve got a problem here regarding EVs. You have to recharge the batteries electrically. Where do you get the electric fuel? Here in the backwards States, we’re talking petroleum and/or coal. And the lithium situation. Someone has probably figured a way around it, but who knows? The biggest elephant in the room is human overpopulation, period. Now, Mother Nature is starting to solve it, but her solution is cruel, efficient but cruel.

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  14. Andrew DeWit

    Many of the critical minerals needed for renewables, EVs, green hydrogen and so on are also essential for digital tech (eg cobalt in 5G), health tech (copper etc in MRIs), water systems (eg nickel in stainless steel), aerospace, weapons systems and so on. The focus on renewable and EVs understates the demand for critical minerals in a world nearing 8 billion. And big EVs, distributed solar, and other mineral-intensive “solutions” for the developed world imply both more extraction in developing countries (where most mining happens) plus less diffusion of clean water systems and other essential goods.

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