Tuesday, June 24, 2008

Metals & Mining - Fueling the Green Revolution

Great article below from Canada's Gazette talking about the new green revolution (i.e. building the massive infrastructure for solar, wind, battery-powered cars) will rely a great deal on metals -- which means mining.

So - for the purist enviros who refuse all compromise, how do you have the solar panel without the metal? And, should the answer be to just make it out of something "organic" -- you'll be adding YEARS onto the commercialization and BIG EXPENSE onto the cost -- if that's even possible. And then of course, it will be blamed for high food prices.

All this makes the point of this website -- we MUST have a pragmatic approach toward the improving the environment and transitioning to a new energy infrastructure if we are going to succeed.

Enviros and the miners need to see the value in what each camp can bring -- and stop making the perfect the enemy of the good.

The Gazette (Montreal, Canada)

Can mining make a greener world?


Clashes between environmental lobby groups and international mining companies especially over global warming could soon be history. The attraction is not apparent to many of them yet, but miners and tree-huggers will likely find each other increasingly good looking if the party heats up.

Most environmentalists agree that the overriding environmental imperative, trumping other concerns, is to reduce greenhouse gas emissions. But converting from a hydrocarbon burning society to one that runs on cleanly generated electricity will not be simple or painless. And the switch will demand metals - lots of metals. Those metals have to be mined.

According to a study by British merchant bankers, the Fortis Group, over 1,000 tonnes of silver will be used in 2008 to manufacture solar panels. That's twice the amount of silver that was used in 2002 by the solar industry.

Silver is the most conductive of metals and that quality makes it a necessary element in solar equipment. More and more silver will be mined for the solar energy ramp up in coming years.

Robert Friedland, the executive chairman of Ivanhoe Mines likes to point out that hybrid cars require twice the amount of copper as regular gas guzzlers. Friedland's company is sitting on a mountain of copper at Oyu Tolgoi in Mongolia, and the significance of this increasing use of copper in vehicles isn't lost on him. Open pits will be blasted to provide copper for greener cars.

Current hybrid models also use an estimated 14 to 20 kilograms of nickel per vehicle in nickel-hydride batteries and electronic systems. While two-thirds of the world's nickel production is now used in stainless steel, the popularity of hybrid cars has helped to boost the overall demand for nickel and the also the bottom line for companies like CVRD and Xstrata.

Non-hybrid vehicles also use metals to help keep the air clean. The principal demand for platinum is not in fancy jewelry, but in pollution control. One third of platinum mined every year goes into the catalytic converters that control emissions from cars and trucks.

Wind turbines and smart electricity grids need metals. Electric vehicles, advanced batteries, and solar arrays need metals. Metals are integral to the effort to reduce greenhouse gases.

Eventually, environmentalists will be forced to reconcile the need for metals with the concerns they have about mining. The realization that metals are cool when it comes to cutting carbon could eventually win over their hearts.

Patrick Moore was a co-founder of Greenpeace and the group's leader for a number of years. In 2006, he turned around his attitude about nuclear power 180 degrees. Moore became a spokesman for nuclear energy, sponsored by a lobby group called the Nuclear Energy Institute. He now sees uranium as part of the solution to global warming. The conversion of Moore from anti-nuclear demonstrator to pro-nuclear advocate may be a harbinger of things to come.

Not every environmentalist will have the kind of epiphany Moore must have had. But environmentalists may soften their attitude toward mining companies. Could a new accommodative attitude be reciprocated by the miners?

The mining industry has been too busy fighting environmentalists to embrace them. Mining companies have been engaged in political and public relations combat over issues like chemicals seeping into groundwater, and the destruction of habitats of endangered species.

But mining is an energy intensive business. And lately, problems obtaining a steady supply of electricity have hurt mining in different parts of the globe. In South Africa, Eskom, the power utility, has had to ration electricity to gold and platinum mines. That's a major reason that South African gold production dropped 16.8 per cent in the first quarter of 2008 compared with last year.

Merrill Lynch has upped its forecast price for platinum prices in 2009 to $2,500 U.S.an ounce, largely because of supply constraints due to a reduction in electricity to the South African mines.

On June 3, an explosion at an offshore natural gas installation off Western Australia cut supplies to the region by a third. This translated into electricity outages at several mines. These kinds of disruptions have sent miners hunting for alternatives. In some cases they have started to look at renewable energy - wind and solar power.

The Atacama Desert of northern Chile is home to the biggest copper mines in the world. About one-fifth of the world's copper is mined in this arid, sunny place. In 2004, Argentina reduced gas exports to its neighbour, and Chile has faced a power problem ever since. The Chilean government is now considering the installation of large solar power operations in the Atacama to assure a supply of electricity for the mines.

In July 2007, Barrick Gold submitted a proposal to the Chilean government to build a $40-million wind farm. Located in the Punta Colorado area, the wind farm will have a capacity of 20 megawatts, making it the biggest wind energy project to date in Chile.

Barrick operates a copper mine in Chile and has been fighting environmental lobbyists over a huge project called Pasqua Lama on the Chile-Argentina border, where they hope to move a glacier to mine gold and silver.

Building a wind farm is a way for Barrick to help alleviate electricity problems in Chile, and counter the negative press on Pasqua Lama.

With so much bad blood between these groups in the past, it's hard to envisage a truly smooth relationship developing between miners and environmentalists. But circumstances may force them to co-operate. The more serious a problem becomes, the more pragmatic people get.

David Zgodzinski is a Montreal freelance writer.

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