Wednesday 22nd February 2017

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Posts tagged ‘coal’

Cobalt: A precarious supply chain

January 14th, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist

Cobalt: A precarious supply chain

 

How does your mobile phone last for 12 hours on just one charge? It’s the power of cobalt, along with several other energy metals, that keeps your lithium-ion battery running.

The only problem? Getting the metal from the source to your electronics is not an easy feat, and this makes for an extremely precarious supply chain for manufacturers.

This infographic comes to us from LiCo Energy Metals TSXV:LIC and it focuses on where this important ingredient of green technology originates from, and the supply risks associated with its main sources.

What is cobalt?

Cobalt is a transition metal found between iron and nickel on the periodic table. It has a high melting point (1493° C) and retains its strength to a high temperature.

Similar to iron or nickel, cobalt is ferromagnetic. It can retain its magnetic properties to 1100° C, a higher temperature than any other material. Ferromagnetism is the strongest type of magnetism: it’s the only one that typically creates forces strong enough to be felt and is responsible for the magnets encountered in everyday life.

These unique properties make the metal perfect for two specialized high-tech purposes: superalloys and battery cathodes.

Superalloys

High-performance alloys drive 18% of cobalt demand. The metal’s ability to withstand intense temperatures and conditions makes it perfect for use in:

  • Turbine blades

  • Jet engines

  • Gas turbines

  • Prosthetics

  • Permanent magnets

Lithium-ion batteries

Batteries drive 49% of demand—and most of this comes from cobalt’s use in lithium-ion battery cathodes:

Type of lithium-ion cathode Cobalt in cathode Spec. energy (Wh/kg)
LFP 0% 120
LMO 0% 140
NMC 15% 200
LCO 55% 200
NCA 10% 245

The three most powerful cathode formulations for li-ion batteries all need cobalt. As a result, the metal is indispensable in many of today’s battery-powered devices:

  • Mobile phones (LCO)

  • Tesla Model S (NCA)

  • Tesla Powerwall (NMC)

  • Chevy Volt (NMC/LMO)

The Tesla Powerwall 2 uses approximately seven kilograms and a Tesla Model S (90 kWh) uses approximately 22.5 kilos of the energy metal.

The cobalt supply chain

Cobalt production has gone almost straight up to meet demand, more than doubling since the early 2000s.

But while the metal is desired, getting it is the hard part.

1. No native cobalt has ever been found.

There are four widely distributed ores that exist but almost no cobalt is mined from them as a primary source.

2. Most cobalt production is mined as a byproduct.

Mine source % cobalt production
Nickel (byproduct) 60%
Copper (byproduct) 38%
Cobalt (primary) 2%

This means it is hard to expand production when more is needed.

3. Most production occurs in the Democratic Republic of Congo, a country with elevated supply risks.

Country Tonnes %
Total 122,701 100.0%
United States 524 0.4%
China 1,417 1.2%
DRC 67,975 55.4%
Rest of World 52,785 43.0%

(Source: CRU, estimated production for 2017, tonnes)

The future of cobalt supply

Companies like Tesla and Panasonic need reliable sources of the metal and right now there aren’t many failsafes.

The United States hasn’t mined cobalt in significant volumes since 1971 and the USGS reports that the U.S. only has 301 tonnes of the metal stored in stockpiles.

The reality is that the DRC produces about half of all cobalt and it also holds approximately 47% of all global reserves.

Why is this a concern for end-users?

1. The DRC is one of the poorest, most corrupt and most coercive countries on the planet.

It ranks:

  • 151st out of 159 countries in the Human Freedom Index

  • 176th out of 188 countries on the Human Development Index

  • 178th out of 184 countries in terms of GDP per capita ($455)

  • 148th out of 169 countries in the Corruption Perceptions Index

2. The DRC has had more deaths from war since WWII than any other country on the planet.
Recent wars in the DRC:

  • First Congo War (1996-1997)—An invasion by Rwanda that overthrew the Mobutu regime.

  • Second Congo War (1998-2003)—The bloodiest conflict in world history since WWII, with 5.4 million deaths.

3. Human rights in mining

The DRC government estimates that 20% of all cobalt production in the country comes from artisanal miners—independent workers who dig holes and mine ore without sophisticated mines or machinery.

There are at least 100,000 artisanal cobalt miners in the DRC and UNICEF estimates that up to 40,000 children could be in the trade. Children can be as young as seven years old and they can work up to 12 hours with physically demanding work earning $2 per day.

Meanwhile, Amnesty International alleges that Apple, Samsung and Sony fail to do basic checks in making sure the metal in their supply chains did not come from child labour.

Most major companies have vowed that any such practices will not be tolerated in their supply chains.

Other sources

Where will tomorrow’s supply come from and will the role of the DRC eventually diminish? Will Tesla achieve its goal of a North American supply chain for its key metal inputs?

Mining exploration companies are already looking at regions like Ontario, Idaho, British Columbia and the Northwest Territories to find tomorrow’s deposits.

Ontario: Ontario is one of the only places in the world where cobalt-primary mines have existed. This camp is near the aptly named town of Cobalt, which is located halfway between Sudbury, the world’s nickel capital, and Val-d’Or, one of the most famous gold camps in the world.

Idaho: Idaho is known as the Gem State while also being known for its silver camps in Coeur d’Alene—but it has also been a cobalt producer in the past.

B.C.: The mountains of B.C. are known for their rich gold, silver, copper, zinc and met coal deposits. But cobalt often occurs with copper and some mines in B.C. have produced cobalt in the past.

Northwest Territories: Cobalt can also be found up north, as the NWT becomes a more interesting mineral destination for companies. One hundred and sixty kilometres from Yellowknife, a gold-cobalt-bismuth-copper deposit is being developed.

Posted with permission of Visual Capitalist.

Infographic: Countries of origin for raw materials

November 16th, 2016

Graphic by BullionVault | text by Jeff Desjardins | posted with permission of Visual Capitalist | November 16, 2016

Every “thing” comes from somewhere.

Whether we are talking about an iPhone or a battery, even the most complex technological device is made up of raw materials that originate in a mine, farm, well or forest somewhere in the world.

This infographic from BullionVault shows the top three producing countries of various commodities such as oil, gold, coffee and iron.

Infographic Countries of origin for raw materials

 

The many and the few

The origins of the world’s most important raw materials are interesting to examine because the production of certain commodities is much more concentrated than others.

Oil, for example, is extracted by many countries throughout the world because it forms in fairly universal circumstances. Oil is also a giant market and a strategic resource, so some countries are even willing to produce it at a loss. The largest three crude oil-producing countries are the United States, Saudi Arabia and Russia—but that only makes up 38% of the total market.

Contrast this with the market for some base metals such as iron or lead and the difference is clear. China consumes mind-boggling amounts of raw materials to feed its factories, so it tries to get them domestically. That’s why China alone produces 45% of the world’s iron and 52% of all lead. Nearby Australia also finds a way to take advantage of this: It is the second-largest producer for each of those commodities and ships much of its output to Chinese trading partners. A total of two-thirds of the world’s iron and lead comes from these two countries, making production extremely concentrated.

But even that pales in comparison with the market for platinum, which is so heavily concentrated that only a few countries are significant producers. South Africa extracts 71% of all platinum, while Russia and Zimbabwe combine for another 19% of global production. That means only one in every 10 ounces of platinum comes from a country other than those three sources.

Graphic by BullionVault | posted with permission of Visual Capitalist.

Conuma Coal Resources president Mark Bartkoski remarks on stakeholder support as a former Walter Energy mine re-opens in B.C.

October 28th, 2016

…Read more

B.C. coal mine comes back as province and new owner fast-track restart

September 26th, 2016

by Greg Klein | September 26, 2016

More than two long years after shutting down and less than two short weeks after its acquisition closed, northeastern British Columbia’s Brule coal mine is moving from care and maintenance to production. The province’s Ministry of Energy and Mines confirmed the restart on September 23.

Along with Wolverine and Willow Creek, Brule’s one of three regional coal assets picked up by privately owned Conuma Coal Resources from Walter Energy Canada, a holding company for U.S.-based Walter Energy Inc. The latter entity shut down the Peace River-region projects in April 2014, throwing 695 people out of work. Walter Energy Inc was one of a number of coal giants that filed for bankruptcy the following year.

B.C. coal mine comes back as province, new owner fast-track restart

Conuma will act as a contract miner for Walter until permits can be transferred, according to the province. The re-start should eventually restore about 170 jobs. Plans call for the mine to be “fully staffed and operating at full production levels by December 2016,” the ministry stated. “The company estimates it will produce two million tons of metallurgical coal annually from the Brule mine.”

The open pit deposit has “proven to yield a very strong and highly sought-after metallurgical-quality coal,” added Conuma president Mark Bartkoski. “The co-operation between the previous owners, the local communities, numerous First Nations groups, the ministry and Conuma was unprecedented and will quickly result in blessing numerous families with employment opportunities.”

The company also proposes to bring Wolverine back to life. Timing depends on Conuma’s “ability to complete the necessary work to satisfy all its permit requirements,” the province stated.

A new company led by experienced coal miners, Conuma benefits from Walter’s debt and coal’s resurgence, co-owner Ken McCoy told the Tumbler Ridge News. “When Walter bought this property, they bought it right at the very top of the market. They paid over $3 billion for it, and as soon as they bought it, it started going down, down, down. If you look at the graph, we bought it right at what we think is the bottom. Now the market has turned up. In the last two months, the price of this coal has gone up significantly, which justifies us to come in and open these coal mines up.”

Conuma is a member of the ERP Group of Companies built around West Virginia-based ERP Compliant Fuels, which bundles reforestation carbon credits with coal sales “to produce a ‘compliance instrument’ effectively reducing carbon dioxide emissions.” But Conuma has no carbon offset plans for the time being, McCoy told the Tumbler Ridge News.

Saskatchewan miners sponsor six days of site visits for teachers

August 15th, 2016

by Greg Klein | August 15, 2016

A 5,000-kilometre tour offers Saskatchewan schools insight into mining’s importance to the province and the province’s importance to mining. This year’s Rock’n the Classroom GeoVenture Program began August 15 as 19 teachers took a half-day workshop in Saskatoon. The Saskatchewan Mining Association sponsors the annual event, paying all expenses except a $50 fee.

Saskatchewan miners sponsor six days of site visits for teachers

On the itinerary are PotashCorp’s (TSX:POT) Patience Lake solution mine, Mosaic’s (NYSE:MOS) Esterhazy underground potash mine and mill, Westmoreland Coal’s Poplar River open pit operation and the world’s largest uranium operation at Cameco Corp’s (TSX:CCO) majority-owned McArthur River mine and Key Lake mill.

Other destinations will include earth science-related attractions such as the Potash Interpretive Centre in Esterhazy. Handouts include resource kits, lesson plans, posters and maps for the classroom.

The program “offers educators a front-row seat to explore Saskatchewan’s mineral industry and learn of related career opportunities for their students,” the SMA stated.

Ontario teachers also qualify for multi-day mining tours, these ones hosted by the non-profit Canadian Ecology Centre.

The real backbone of green technology

June 15th, 2016

Posted with permission of Resource Works

Renewable energy has an enviable position in the court of public opinion. All the while, natural resources that make renewables possible are regularly decried by self-proclaimed progressives pushing to leave everything in the ground.

It’s true—our planet’s climate is changing and humans are the central instigators. Though even as the reality of carbon emission strikes home, we must be careful that our understanding of the state of energy transition doesn’t become mired in conflicting agendas with contrasting narratives about the path to an effective shift into clean tech.

The real backbone of green technology

The simple reality is that we subsist on energy produced by carbon emission and goods built on mineral extraction. Think it ends with renewables? Not a chance.

To serve as a viable alternative to fossil fuels, already a major task for the brightest innovators we’ve got, green technologies depend on mineral development, as well as global production and supply chains that are almost entirely driven by petroleum products.

A Tesla car battery or a solar panel doesn’t just come into existence and begin creating limitless energy. Before ingenious technologies built to harness the sun’s power or that of the wind can come online and begin feeding into a power grid, the raw materials that make them must be sourced and transported. Mining is the first step. A solar panel is just one good example of the complexity of high-tech manufacturing.

Once minerals like neodymium (a rare earth metal used to make magnets in wind turbines) or quartz (the most common ingredient in the panel part of a solar panel) are sourced, they go to refining to render them suitable for industrial application.

An 80-foot-tall wind turbine typically carries 19,000 pounds of steel in the tower itself. Steelmaking, in case you didn’t know, requires coal both as an energy source and as a source of carbon, which when combined with iron is used to create steel. Based on the steel industry’s global annual figures, the total coal used in making steel is about half the weight of the total steel output.

Next these materials must be assembled, often in many places cumulatively. By the time a typical wind turbine starts moving, its parts will have traversed thousands of kilometres.

Here’s the point to take with you: “Fossil fuel-free” favourites like wind, solar or even hydro rely on extracted natural resources. With enough research and development, the methods of manufacturing them will continuously become more efficient and we may reach an entirely zero emissions lifestyle. Until that point comes, mining and fuel extraction remain essential activities not just to our daily lives, but also to our best hopes for a shift to renewable energy production.

Resource Works is a non-profit society that encourages “respectful, fact-based dialogue on responsible resource development in British Columbia.”

Video contest fosters mining awareness among Nova Scotian students

April 11th, 2016

by Greg Klein | April 11, 2016

Okay, there was a cash incentive. But the enthusiasm’s genuine. The Mining Association of Nova Scotia asked high school students to research a brief topic on mining and quarrying, then find a way to portray it on video. The results were not only informative but inventive and entertaining. And they brought contest winners a total of $8,000 in prizes, MANS announced April 11.

Mining ROCKS! video contest gets Nova Scotia students excited about mining

Now in its second year, Mining ROCKS! pulled in 22 entries from students across the province. Judges included film and media pros as well as Minister of Natural Resources Lloyd Hines and Membertou Chief Terry Paul, among others. Another 1,848 people cast votes for the People’s Choice Award.

The winners (shown here) use wide-ranging approaches to explain, illustrate, dramatize and emphasize the many uses of minerals and the industry’s importance to Nova Scotia. This is, after all, a province where coal mining dates back to 1672—and coal’s a relative newcomer. MANS says Canada’s oldest mine, possibly North America’s oldest, would be Davidson Cove, where Mi’kmaq extracted jasper and agate for arrowheads and cutting tools 1,500 years ago.

Mining and quarrying now provide around 5,500 jobs and put $420 million into the provincial economy each year.

As for the Ontario Mining Association, it now has judging underway for its student video contest, So You Think You Know Mining. Winners will be announced June 1.

See the winning entries for Mining ROCKS!

Criminal consequences

April 8th, 2016

As Blankenship plans an appeal, other miners in the U.S. and Canada fare worse

by Greg Klein

One year in prison and another on supervised release—six days apart from each other two American courts handed two former mining executives identical jail time. One ex-boss was implicated in polluting a river, the other in 29 mining deaths.

The latter, former Massey Energy CEO Don Blankenship, also got a $250,000 fine. The sentence came almost exactly six years after the underground explosion at West Virginia’s Upper Big Branch coal mine operated by a Massey subsidiary.

As Blankenship plans an appeal, other miners in the U.S. and Canada fare worse

Widespread outrage greeted the sentence but the judge—a coal miner’s daughter—gave Blankenship the maximum penalty allowed for a misdemeanor of conspiring to violate safety regulations. In December a jury acquitted him of felony charges of securities fraud, lying to the U.S. Securities and Exchange Commission, and conspiring to impede mine safety officials. Convictions could have brought him 31 years in prison.

In the past Blankenship reportedly donated millions to friendly politicians and judges including, Bloomberg reports, $3 million to support a West Virginia Supreme Court of Appeals judge “who helped overturn a $50-million jury award against some of Massey’s units.”

John Grisham cited Blankenship as the novelist’s inspiration for The Appeal, depicting a ruthless Wall Street billionaire and his bought-and-paid-for Supreme Court judge. Grisham later wrote Gray Mountain, a fictional indictment of the Appalachian coal industry.

Alpha Natural Resources took out Massey in 2011 for $7.1 billion. Alpha eventually paid about $209 million for fines, restitution and mine safety improvements. The company also settled a securities class action suit for $265 million, as well as settling undisclosed amounts with 29 families.

Other former Upper Big Branch staff convicted after the disaster include superintendent Gary May, who got 21 months in prison, security chief Hughie Elbert Stover, who got three years, and Massey executive David Hughart, who got 42 months.

According to the United Mine Workers of America, 52 people died on Massey property under Blankenship’s reign. Still maintaining his innocence on the misdemeanor, Blankenship intends to appeal.

The week before his sentence, a federal judge in Alaska gave Canadian James Slade one year in prison and another on supervised release for criminal violations of the U.S. Clean Water Act, the Alaska Dispatch News reported.

Prosecutors described Slade as the senior on-site executive of XS Platinum during the 2010 and 2011 mining seasons when salmon-spawning streams “turned muddy brown with waste water,” according to an earlier ADN story.

The company was extracting platinum from tailings on a former mine site near the Bering Sea coast of southwestern Alaska. Slade argued that his Australian supervisors refused his request to provide equipment that would have stopped the discharge.

But the ADN quoted the judge saying Slade “really had a choice, and when it became clear the two Australians were adamant about making as much money as they could and to heck with any pollution control equipment, he could have walked away from this job.”

Two Americans face sentencing after pleading guilty to related charges. Prosecutors declined to extradite the Australians, Bruce Butcher and Mark Balfour.

The British Columbia legislature has amendments pending that could impose $1 million in fines and three years in prison for Mining Act violations. Triggered by the 2014 Mount Polley tailings dam collapse, the new regs strengthen penalties currently capped at $100,000 and one year. But following a 2015 Vancouver Sun investigation, the paper reported that “no fines had been levied in the courts under the Mines Act since 1989.”

Notwithstanding the lack of Bre-X convictions, Canada might do more to deter fraud than other mining-related offences. In 2013 the Ontario Securities Commission slapped geologist Bernard Boily with a $750,000 fine and $50,000 costs for fraudulent assays that brought a class action suit against his employer. The previous year geologist John Gregory Paterson got six years for a nearly four-year-long assay-faking scam.

Infographic: The minerals behind solar energy

February 23rd, 2016

Posted with permission of Resource Works | February 23, 2016

“Mining is not antithetical to a green economy; it’s a necessity.” That’s how David S. Abraham expressed it in The Elements of Power. But it’s a point not always realized by some environmentally conscious people. Miners, of course, have an obligation to follow strict environmental standards. But without mining, green energy’s impossible.

Resource Works, a non-profit society that encourages “respectful, fact-based dialogue on responsible resource development in British Columbia,” produced this infographic looking at just one aspect of green energy, the minerals comprised in solar panels.

Most important is silica but even coal comes into play.

The minerals behind solar energy

Posted with permission of Resource Works.

Study enumerates coal’s benefits to B.C.

November 16th, 2015

by Greg Klein | November 16, 2015

Coal might be perceived as a dirty 19th century throwback but it’s hard to imagine life without steel. For British Columbians, it might be hard to imagine life without the province’s traditional industries. To underscore that point, Resource Works released a study on the economic benefits of five B.C. metallurgical coal mines operated by Teck Resources TSX:TCK.A and TCK.B.

Coal still fuels B.C. economy, report finds

Among the findings, the five mines supported 3,993 jobs in 2014 with a payroll totalling $457.6 million. Teck spent another $1.02 billion on goods and services for the quintet in 2014. Also attributed to the mines that year from a “small sample” of six suppliers were 345 jobs with a payroll totalling $34.5 million. With about 1,400 suppliers in B.C. and Alberta, “it is reasonable to deduce that the actual full benefits are much larger,” wrote author Marlyn Chisholm.

Her study didn’t consider taxes and royalties.

Although the five mines are concentrated in southeastern B.C.’s Elk Valley, the spinoffs spread widely. Nearly 60% of goods and services spending went to the Vancouver region, largely to shippers and suppliers.

Even during the downturn, B.C.’s “two largest revenue-generating commodities” are metallurgical coal and copper, according to a May report from PwC. Teck’s five B.C. coal operations soldier on but, to help cut Q3 production by 19%, each of them underwent three-week suspensions this year.

In last month’s Q3 results, Teck reported an average price of $88 per tonne, 20% lower than the same period in 2014, “reflecting oversupplied steelmaking coal market conditions and a decline in spot price assessments.” Prices reached as high as $300 a tonne in 2011. The company’s long-term assumptions foresee $130 per tonne.

Of $2.2 billion in impairments reported last quarter, Teck attributed an after-tax $1.45 billion to its steelmaking coal assets, which include the Cardinal River mine in Alberta. Another $300 million in after-tax impairments went to copper and $400 million to the company’s Fort Hills oilsands project.

Teck is Canada’s largest diversified miner and the world’s second-largest exporter of seaborne steelmaking coal, which accounted for 32% of the company’s business in 2014.

While Anglo American and Walter Energy have shut down their B.C. coal operations, HD Mining International won provincial environmental approval last month for its proposed Murray River metallurgical coal mine in northeastern B.C. The company, owned by Mandarin-speaking Chinese, intends to staff underground jobs with Mandarin-speaking Chinese.

Resource Works is a non-profit society that encourages “respectful, fact-based dialogue on responsible resource development” in B.C. A positive case for B.C.’s coal industry has also been presented by a coalition of B.C. miners, suppliers and unions.

Download the Resource Works study.

Read more about Resource Works here and here.

Update: On November 18 Teck announced the Q4 2017 closure of Coal Mountain, one of the company’s five Elk Valley mines, and the suspension of Coal Mountain Phase 2, which had been intended to extend the operation. “Teck will identify options between now and the end of 2017 to potentially replace the 2.25 million tonnes of annual coal production that were planned from CMO Phase 2 by optimizing production from its five other steelmaking coal mines,” the company stated.

The Coal Mountain decision came amid plans for 2016 spending cuts of $650 million and the elimination of 1,000 jobs globally.