SPE­CIAL FEA­TURE

Min­ing is Be­ing Driven Green

Africa Outlook - - Contents - By Rachel Speight, Part­ner in the Min­ing Group, Mayer Brown In­ter­na­tional LLP

The 2018 Min­ing Ind­aba al­ludes to ac­cel­er­ated lithium ex­ca­va­tion

The buzz­word at this year’s an­nual Ind­aba min­ing con­fer­ence in Cape Town was “lithium” and the hype cen­tred around the ex­plo­sion of the global elec­tric ve­hi­cle (EV) in­dus­try pow­ered by lithium-ion bat­ter­ies; the green en­ergy stor­age tech­nol­ogy of choice for the in­dus­try.

But it is not only lithium that is ben­e­fit­ting from this boom, but also a range of other met­als re­quired in the man­u­fac­ture of com­po­nents for elec­tric ve­hi­cles in­clud­ing cobalt, graphite, cop­per, man­ganese, PGMs and nickel, not to men­tion the rare earth met­als.

All of these met­als are sud­denly in hot de­mand as car mak­ers turn to green tech­nolo­gies rather than diesel cars to try to meet in­creas­ingly tough emis­sions tar­gets like the

CO2 tar­gets of 95 grams of CO2 per kilo­me­tre in the EU which must be met by 2021. This means a flood of elec­tric cars are due to hit the mar­ket in the next few years.

Volvo has an­nounced that by 2019 ev­ery car it sells will con­tain a hy­brid or elec­tric en­gine and Ford Mo­tors has said that it will dou­ble its spend­ing on elec­tri­fied ve­hi­cles bring­ing 40 elec­tri­fied ve­hi­cles to mar­ket by 2022.

Volk­swa­gen has also en­tered the race stat­ing that up to 25 per­cent of its to­tal 2025 pro­duc­tion could be made up of fully elec­tric ve­hi­cles. Toy­ota, which pi­o­neered hy­brids but long re­sisted bat­tery-only cars, changed tack last year and has since un­veiled plans for a new range of pure-elec­tric mod­els. Not to men­tion the EV dar­ling - Tesla - who plans to launch its long-awaited mass-mar­ket Model 3 elec­tric car in the com­ing months.

Ris­ing to the chal­lenge

De­spite all this talk though, EVs are cur­rently a rel­a­tively tiny part of the to­tal new car mar­ket (amount­ing to just less than one per­cent of global car sales) as man­u­fac­tur­ers and con­sumers still strug­gle with poor charg­ing in­fra­struc­ture, high bat­tery costs and elec­tric ve­hi­cles’ still lim­ited driv­ing range.

But the EV share of the mar­ket is in­evitably set to grow spurred on by plans like those set out by the Chi­nese Gov­ern­ment in 2015 to put at least five mil­lion elec­tric ve­hi­cles on Chi­nese roads by 2020, which has been echoed by the may­ors of Paris, Madrid, Mex­ico City and Athens who have said they plan to ban diesel ve­hi­cles from city cen­tres by 2025, while the French and Bri­tish gov­ern­ments aim to end the sale of new gaso­line and diesel ve­hi­cles by 2040.

In Europe, so called ‘green cars’ ben­e­fit from sub­si­dies, tax breaks and other perks, while com­bus­tion en­gines face mount­ing penal­ties in­clud­ing driv­ing and park­ing re­stric­tions.

With this pres­sure to in­crease EV pro­duc­tion, car man­u­fac­tur­ers and oth­ers have ex­pressed con­cerns about how de­mand for met­als such as lithium will be met from the hand­ful of cur­rent sup­pli­ers (like Albe­marle, So­ciedad Química y Min­era de Chiles and Chi­nese pro­duc­ers, Tianqi Lithium and Gan­feng Lithium) and con­cerns that raw ma­te­ri­als such as cobalt are too con­cen­trated in ar­eas such as the Demo­cratic Repub­lic of Congo and there­fore de­pen­dent on the sta­bil­ity of that coun­try. But given the abun­dance of lithium and some of the other met­als needed to sup­port the growth of the EV in­dus­try, min­ers have risen to the chal­lenge and a range of new sources of these met­als were an­nounced at Ind­aba.

Green cre­den­tials

Lithium is cur­rently mined in South Amer­ica, Aus­tralia and China but Zim­babwe is al­ready the fifth largest lithium pro­ducer. And this po­si­tion may in­crease as Prospect Re­sources has an­nounced growth plans for its flag­ship Ar­ca­dia lithium pro­ject just out­side Harare and a num­ber of other lithium pro­ject are said to be fi­nal­is­ing fea­si­bil­ity stud­ies in Zim­babwe.

Lithium ex­plo­ration is also tak­ing place across the con­ti­nent in Mali, the Demo­cratic Repub­lic of Congo, Rwanda, Namibia, South Africa, Tan­za­nia, Mozam­bique and Egypt with a num­ber of these ex­plor­ers an­nounc­ing their plans at the Ind­aba con­fer­ence. There was also chat­ter at the con­fer­ence around a num­ber of new graphite projects in Tan­za­nia and Mozam­bique and cobalt projects in the Demo­cratic Repub­lic of Congo and Namibia as well as rare earths in Malawi. All of which are fu­elled by the global de­mand for elec­tric ve­hi­cles.

The min­ing in­dus­try has for a long time been seen as the ar­che­typal bad boy for en­vi­ron­men­tal­ists so it is in­ter­est­ing to see a recog­ni­tion that our grow­ing need for green tech­nolo­gies to com­bat emis­sions will not be able to move for­ward with­out the min­ing in­dus­try. There can be no elec­tric ve­hi­cles, hy­brid cars, so­lar pan­els, wind tur­bines or hy­dropower and the tran­si­tion to low-car­bon en­ergy sys­tems will not be achieved with­out the min­ing in­dus­try. The ques­tions around whether the EV is a truly “green” so­lu­tion in terms of its man­u­fac­ture and power sup­ply, is a de­bate for an­other day but at least EVs and the raw ma­te­ri­als they re­quire give the min­ing in­dus­try an op­por­tu­nity to dis­play its green cre­den­tials in con­trast to the fos­sil fuel in­dus­try.

‘Lithium ex­plo­ration is also tak­ing place across the con­ti­nent in Mali, the Demo­cratic Repub­lic of Congo, Rwanda, Namibia, South Africa, Tan­za­nia, Mozam­bique and Egypt.’

MIN­INGIS BE­ING DRIVEN GREEN Swollen lithium ion bat­ter­ies

Met­als are sud­denly in hot de­mand as car mak­ers turn to green tech­nolo­gies

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