Abstract

The primary driver of innovation in every sector of the global economy must be to ensure the success of the Green Transition to a low-carbon economy by 2035. This transition needs the supply of energy metals to increase significantly, and the mining industry is therefore critical to the success of the transition to a low-carbon economy. The COP26 outcome indicated that it may not be possible to limit global warming to 1.5° by 2100. Ensuring this target is met is critically important but it means a radical transformation of the mining industry through strategic, disruptive innovation within 5-10 years.

Global reductions in GHG emissions can only be achieved by transforming the carbon-based economy into the electricity-based economy. To fuel this transition, the future demand for energy metals is projected to be a 5-fold increase by 2035. Mining has responded to the typical demand growth of 1-3%pa with tactical, reactive, non-disruptive innovation. The demand growth for the Green Transition is year-on-year growth of around 13-15% pa to 2035 – an impossible target for the industry in its current form. In fact, the cumulative effect of two decades of declining discovery rates, declining productivity, and declining grades is leading to a contraction of the supply capacity for copper and nickel to around half the 2035 demand. This makes the target for the first stage of the Green Transition unachievable.

Simply finding and opening new mines cannot resolve the shortfall. After discovery, a new Tier-1 deposit takes 15-20 years to bring to production although it is essential to sustain the Green Transition through 2050. The projected supply shortfall has already caused significant increases in energy metal prices but while higher prices may stimulate investment in new mines it actually exacerbates the problem. Higher supply-constrained metal prices will strangle the Green Transition because higher-cost electricity-based technologies will not displace existing, convenient, carbon-based technologies.

Investment in mining has been limited by low NPV caused by the low rate and high cost of production, and the 5-10-year delays caused by the opposition to current tailings management practices. Most mines are surrounded by sub-economic mineralization that can become profitable with lower operating cost. Strategic innovation leads to lower operating costs that reduce cut-off grades and increases mine-life, and post-processing techniques return land and water resources to the pre-mining state, eliminate tailings liabilities and generate carbon credits. The technologies that can make this progressive future possible have already been developed by dozens of innovative SMEs that need visionary investors to help implement new solutions. The goal of arresting Climate Change cannot be achieved without strategic, disruptive innovation in the mining industry so that new progressive technologies can increase mining’s productive capacity, provide higher returns to investors, and help save the planet.