The Western Supply Chain

The West now confronts an imminent challenge: how best to establish a secure metal supply chain, robust against geopolitical fluctuations and conflicts? This imperative is underscored by China’s profound influence in the global market. China vaunts the possession of over half of the world's lithium refining capacity, and 77% of the world’s cobalt refining capacity, as reported by The Institute for Energy Research. These numbers paint a picture of a world heavily reliant on a single nation for essential resources, and expedites the urgency for the West to secure an autonomous and resilient supply network. Sam Ash, CEO of Bunker Hill, who is successfully restarting one of America’s oldest and largest silver mines to meet the incoming demand, points to 2008 as a pivotal time: “The global financial crisis of 2008 wiped 50% of available capital for mining because the banks were unwilling to lend to ventures with higher risk, but between the 1990s and now, China has deployed billions of mining dollars all around the world including in the U.S. and Canada.” This problem extends all the way to the field of talent, as Dr. Dana Bennet, Interim President of the Nevada Mining Association, alarmingly tells us: “We are fortunate we still have one of the last 11 mining schools left in the U.S., but at the country level, we are not producing enough mining engineers, geologists, metallurgists and environmental scientists. In a particular semester, China would have 2,000 mining engineers studying, while Nevada has only ten.”

What are the consequences of the West failing to build an autonomous supply chain? In the words of mining-engineering company TAKRAF’S CEO, Thomas Jabs, “an immediate repercussion would be a surge in commodity prices, echoing previous trends witnessed in the iron ore market. Copper, pivotal for electrification and the green transition, would especially be impacted.” This underscores a scenario where the West finds itself in a vulnerable position, with its green aspirations stymied by supply vulnerabilities: “Delays in new investments or dependency on politically unstable nations could compromise the supply chain, instigating a shift in alliances and dependencies. For instance, countries like China might reorient their supply chains, impacting the equilibrium of global resource distribution.” For the foreseeable future, China’s dominion over the sector is set to continue. As reported by Reuters, China still accounts for 80% of U.S. imports of the group of 17 minerals used in military equipment and high-tech consumer electronics - in order to parry this risk, the West must up its game, and there are several signs it is starting to do so.

In pursuit of new supply, Western entities are extending their geographical reach to the final geographies rich with untapped potential. Africa, followed by South America, emerge as the focal points. According to the Center for Strategic and International Studies, Africa contains roughly 85% of the world's manganese, 80% of all

platinum and chromium, 47% of all cobalt, and 21% of all graphite. South America contains 36.4% of the world’s copper. This renders expansion into these continents a great opportunity to consolidate the supply chain, whilst also fostering development and enrichment for all. Lifezone Metals is focused on nickel mining and operates in Tanzania. Lifezone’s CEO, Chris Showalter, sheds light on new Western initiatives in Africa: “The U.S has initiated significant projects like the Lobito corridor (Central Africa) and the Partnership for Global Infrastructure Initiative to facilitate critical infrastructure development which supports metal mining in Africa, it’s a conscious effort to strengthen their position in the global supply chain.”

Deep South Resources is a copper exploration company operating in Namibia. Deep South’s CEO, Pierre Léveillé, tells us that their “Haib Copper deposit hosts a resource of nearly 1 billion tons of copper.” Africa’s mineral wealth is not limited to the critical metals, but also extends to precious metals like gold. Richard Clark, CEO of Montage Gold, exemplifies this point, extolling the abundant opportunities within the Archean Greenstone Belt, a region that cuts across several countries in West Africa: “We were interested in the area - the Archean Greenstone Belt that includes Côte d’ivoire, Ghana, Senegal, Mali, and Burkina Faso - by virtue of the proliferation of deposits found there. Their gold geology is stupendous.”

Increasing production, however, does have environmental costs. The mining industry has faced a great deal of criticism for its detrimental effects on the environment. In 2021, the industry accounted for between 4 to 7% of global greenhouse gas emissions, as reported by Globaldata, placing it close to industries such as agriculture, which contributes 11% of global emissions. Moreover, mining operations have had a lasting and profound impact on water resources. According to MIT, it is estimated that over 180 million metric tons of mine waste flow into the world’s waters annually.

However, aware of their past reputation, Western mining companies are now escalating their mission to align operations with the new ethos of environmental sustainability. There is promising new forward momentum in this regard, and innovative technologies which serve to extract minerals whilst minimizing the ecological footprint are emerging. The integration of environmental stewardship into the core of mining operations is already seeing reality on the ground. Mcewen Mining’s CEO, Rob Mcewen, details the transformative new approach taken at their Los Azules copper project: “Our Los Azules copper project will use less than one quarter of the water, and will emit less than one third of the carbon of an average mine. By 2038, we will be net zero and utilize an electric mobile fleet, powered by 100% renewable energy.”

Mining technology companies are enhancing their sustainability in all aspects of mining operations, as illustrated by Mikko Keto, CEO of mining engineering multinational, Flsmidth: “Our goal is to support all mining operations through basic automation, data analytics, sensors, and process optimization. Our technologies range from in-pit crushing and conveying to milling, grinding, flotation methods, and tailings management, among others.” Scottish mining engineering expert, The Weir Group, is developing technologies aimed at dramatically reducing energy and

TAKESHI TANIGUCHI | VP, HEAD OF MATERIALS BUSINESS, YOKOGAWA ELECTRIC CORP. Yokogawa has been developing and providing process control systems for around 50 years, and, moving forward, we aim to embrace AI technologies that will enable the industry to move to the next stage, autonomous operations.

water consumption – critical components of mining sustainability. Weir’s CEO, Jon Stanton, explains their current progress: “We are developing technologies that can reduce energy consumption by up to 50% compared to traditional methods. This is a huge deal, considering that the mining industry consumes 3% of the world's electricity. We're also working on improving material classification and reducing water consumption via AI.”

Among the most conspicuous obstacles in the mining industry's path towards sustainability is tailings management. Tailings, as described by the CEO of CVW Technology, Akshay Dubey, are “the waste piles that result from mining processes.” These residual materials, often comprising a mixture of water, chemicals, and crushed rock, pose significant environmental and safety challenges, and companies are looking for new solutions to manage this waste. Historically, tailings have been stored in ponds or dams, but this approach has been met with scrutiny due to environmental risks and the impact on the surrounding ecosystem.

A paradigm shift in tailings management is underway, exemplified by the initiatives of companies like CVW, which is developing a technology “that can recover the last bits of hydrocarbons from oil sands and the minerals which are usually associated with the hydrocarbons in tailings (...) thus reducing fugitive methane emissions whilst also cutting GHG emissions by 5% to 10% per site.” Nigel Robinson, CEO of Central Asia Metals, tells us that his company is “recovering copper from surface waste dumps that originated from the Kounrad open-pit copper mine in Kazakhstan.” The company has produced 15,000 tons per annum of copper, all out of tailings waste left over by the USSR - a reminder that the circular economy can thrive in the most unexpected places and over multiple generations. The wastes from uranium mining, as the reader can probably imagine, can require close monitoring. Denison Mines, a uranium mining development company in Canada is solving this problem prior to its conception. CEO, David Cates, comments that “a critical part of our sustainability story is that the mining method we are using extracts the uranium from the ground without creating conventional tailings, hence avoiding the need to store mine waste on surface. This is new to uranium mining in our region and is of great interest to potentially impacted Indigenous groups, as our activities are not expected to leave a lifelong legacy of tailings in their ancestral lands. Finally, innovator Tersa Earth is another young company working ingeniously to reprocess tailings which already exist in order to re-extract metals and clean the surrounding water. Tera’s CEO, Vikramaditya G. Yadav, told us his motivation: “Did you know that 200 million tons of copper is trapped within tailings around the world, a vast majority of which are in acidic ponds? Imagine if one were to mine these waste sources rather than expending significant resources to store or neutralize them. Their technology is based on microbial fuel cells, and aims to solve this problem: “Addressing the environmental hazard of tailings involves handling a large volume of water (about 200 trillion liters globally), which is stored in approximately 9000 tailings ponds worldwide. Our technology aims to reduce this risk substantially by diminishing the volume of these tailings ponds, therefore presenting a solution that is both environmentally sustainable and economically beneficial by tapping into metal wealth, once discarded as waste.”