“Teslas don’t grow on trees”, Reuters journalist Ernest Scheyder wrote in The War Below, highlighting conflict between government mandates on electric vehicles and public policies hampering new metal flows into EV supply chains. The conundrum at the heart of American author Scheyder’s book is the same one executives at the world’s major miners, and many investors in the industry, are grappling with.
“This is the schizophrenia we’re seeing in the world,” says the chair of US-based Clareo, Peter Bryant.
“You’ve got this energy transition that’s going from fossil fuels to a minerals-dependent system. The same people that are pushing that are largely anti-mining.
“Against this backdrop, I [new mine developer] need to speed up and go from a 20-year nightmare to five years, or whatever it is, which also involves changing how we do mining as well.
“But governments issuing new mine approvals are being heavily influenced by a very heavy anti-mining lobby, or ecosystem.
“So these two things are totally at odds with each other. And somehow that’s got to be a reconciled.”
Bryant, an advisor to mining and energy majors, and governments, through Clareo, returns to IMARC in Sydney in October to talk about where mining and metals really fit in the world’s energy transition, shifting energy, transport and infrastructure supply chains, and a future circular economy.
These are conversations that seem to become more nuanced with each passing month.
Bryant says miners need to innovate and find ways to become integral parts of circular economic systems. They need to “lean into” recycling and evolve into materials solution providers. They also have to advance traditional project development models.
“I think the age of major, $10 billion or $20 billion massive mines, outside of iron ore and coal, is in the past,” Bryant says.
“I just don’t think you can do them anymore. The main reason is, yes, there is increased demand coming, but how big is it? And when is it? I can’t build a 50- year mine to meet a 10-year demand peak, and then it drops off.”
In that context, the “20-year nightmare” of resource discovery, permitting and development, to production, is “just not sustainable anymore”.
“It’s a huge challenge for the industry.”
Nick Bell, global sector lead, mining, minerals and metals with global engineering group, Worley, agrees the industry is “entering a critical phase where retaining trust in the business case of mining projects will be challenging”.
“The next few years will be tricky for several reasons, including higher costs resulting from the scale and complexity of mines, extended infrastructure and decarbonisation requirements of assets, geological challenges, and supply chain price volatility,” Bell says.
“That’s why we’ll see a two or three speed economy evolve … as a select few miners power ahead to build additional production capacity in future facing commodities.”
Bell says bigger miners…
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