Mining Industry Ventures Into Uncharted Technological Waters
Anyone paying attention to the most important moments of the Super Bowl – the ads, of course – left knowing three things for certain: Matt Damon really wants you to buy crypto. Zendaya would make a great seashell saleswoman. And, more than anything, car companies won’t stop talking about their new electric vehicles (EVs). But there’s something these big-budget commercials don’t mention. Any car company hoping to clean up its gas-guzzling image, along with its environmental impact, relies on a much dirtier business: mining.
Metals Markets are Getting a Supercharge
The impending surge of EVs – and the batteries inside them – is going to require tons and tons of metals, like copper, nickel, cobalt, and lithium. And it’s not just cars. Many crucial components of the transition away from fossil fuels have a metal-heavy diet (not to be confused with a heavy-metal diet). Wind turbines are coated in zinc, solar farms rely on copper, and just about anything with a motor needs aluminum. The transition to clean energy is increasing long-term demand for these metals. Copper demand alone is expected to rise 50% in the next 20 years.
Mining companies are looking to ramp up production and meet the rising demand, but environmental constraints and social-governmental pressures are forcing mines to step up their environmental stewardship and operate with more than just their bottom lines in mind.
Looking for Liquid (and) Gold
Mining companies may be in the solids business, but their lifeblood is liquid. From processing ore to watering mining roads for dust control, water is crucial to almost every step in the mining process, and companies are feeling the strain of the global water crisis. 50-60% of all mines are already affected by water scarcity and 80-90% of new mines coming online are being built in water-scarce areas. The highest number of mine expansions are being undertaken in the Southern Hemisphere, where record-breaking droughts are already a serious concern.
Mines suck up a tremendous amount of already-stressed water resources. For example, the copper mining industry in Chile alone uses 25% more water per day than New York City’s 8.4 million thirsty residents combined.
Some of these water-stressed nations are making it more difficult for mining companies to get environmental permits, unless those companies can demonstrate near-zero freshwater withdrawal levels, which – with their current technological suite – is something they are woefully unprepared to do. Mines need innovative solutions to use less water, recover more wastewater, and extract metals more efficiently and sustainably. And they need them fast.
Anti-Social License to Operate
Drought and water overuse aren’t the only concerns. Mines are deadly to their neighbors – both ecology and human life – when they don’t properly care for their waste. Traditionally, mine waste – an unsightly slurry of wastewater, crushed rock, unfound metals, and processing additives – is stored above-ground in large tailings ponds, “secured” by dams. Since there’s nothing to be done and no money to be made with tailings, the ponds are left to sit forever. But “forever” is not an amount of time that dams are made to last; they all fail eventually. Over the past decade, we’ve seen how catastrophic those failures are.
In 2014, Mt. Polley Mine in British Columbia failed, releasing five million cubic meters of toxic waste into a nearby lake, ripping mature trees from the forests and carrying them for miles. Just the next year, the Samarco Mine in Brazil failed with even worse consequences, releasing between 32 and 40 million cubic meters of waste into the Rio Doce river and 600 kilometers out to the ocean, in addition to killing 19 Brazilians. Most infamously, a tailings dam in Brumadinho, Brazil belonging to the same company, Vale, broke, releasing 12 million cubic meters of waste and killing 270 residents of the surrounding community. The tragic collapse also evaporated $19 billion of Vale’s market value.
These failures aren’t rare enough to be freak accidents and, according to Earthworks, they’re going to become even more common. After decades of gobbling up all the low-hanging fruit – or in this case ore – mining companies are now forced to scrape the bottom of the barrel with lower-grade ore, which requires more water to extract and increases the rate of waste failures even further. Fueled by the memory of disastrous failures and the likelihood of more on the horizon – not to mention the large-scale environmental degradation and indigenous rights violations mines create even when their dams aren’t exploding – countries and communities are threatening to remove the social license mines need to operate. To get it back, mining companies will need to clean up their act and protect their neighbors.
Opening Minds – and Mines – to Innovative Solutions
All these drivers – higher demand for metals, shrinking freshwater supply, rising production costs, reduced efficiency from lower-grade ore, and higher bar for a social license to operate – are forcing the mining industry to seek out innovative water solutions. The sheer depth of these problems is rapidly convincing companies that were once deeply technologically conservative to place big bets on unproven technologies that can improve efficiency and sustainability.
Fortunately for water entrepreneurs, the mining market – with $12 billion in water-related capital expenditures last year, and growing 6.4% yearly – is a target-rich environment. Mine owners and operators need help to produce foundational elements of our clean energy future without the grisly externalities in the headlines today. We at Burnt Island Ventures are so excited to witness the incredible wave of founders that will solve – and grow big businesses out of solving – these crucial problems.