Mining 2.0 will be very different from the "dig it and ship it" boom in the early part of this century. Photo / 123RF
Mining 2.0 will be very different from the "dig it and ship it" boom in the early part of this century. Photo / 123RF
OPINION:
Walford Creek in the very northwest of Queensland should be top of mind when Scott Morrison goes to Glasgow at the end of the month.
Here, 110km from the nearest power line, minerals explorer Aeon Metals is working to establish a new mine.
If the Walford Creek copper andcobalt project gets up and running – it's still in the feasibility stage – it will look very different to the mines we're used to seeing in Australia.
The mine's power will come from its own solar grid, supported by batteries.
The large-scale mining trucks and diggers are likely to be powered initially by diesel, as they always have been, but in the next few years they're likely to be powered by electricity or green hydrogen as technology improves.
And the mine is expecting to extract and process the copper, cobalt, zinc, silver and nickel into finished products on site, ready to sell direct to customers. The metals all play an important role in the electrification of the global economy, as the world moves towards zero carbon emissions by 2050, be it for batteries, solar cells, wind turbines or electric motors.
By refining them so they are ready for use in the manufacture of these products rather than selling raw ore for others to refine, Aeon Metals will be earning more with this value add, both for itself and for Australia.
Companies and projects like the Walford Creek mine will power Australia's next mining boom.
Mining 2.0 will be very different from the "dig it and ship it" boom in the early part of this century, where miners dug up huge piles of coal to be shipped off to furnaces overseas and huge amounts of unrefined iron ore used to make steel in China as it rapidly modernised its economy and built railways, airports and countless apartment buildings.
The International Monetary Fund is forecasting a sixfold increase in demand for "critical minerals" worth US$12.9 trillion ($18.2t) over the next two decades, driven by the race to hit net zero emissions.
In its latest World Economic Outlook released last week, the IMF singles out nickel, copper, lithium and cobalt as the top four energy transition metals most likely to see surges in prices and production. All are key components in batteries and renewable energy technologies.
"Prices would reach historical peaks for an unprecedented, sustained period under the net zero by 2050 emissions scenario. The prices of cobalt, lithium, and nickel would rise several hundred per cent from 2020 levels," the report states.
Australia is in pole position to benefit from the shift to electrification. We have among the top three global reserves for each of the four critical minerals.
Top-tier miners including BHP, Rio Tinto and Lynas are set to benefit from the trend, but so too will many junior miners, like Aeon Metals.
The juniors have a couple of advantages. Many of them are starting with blank sheets of paper and can design their mines sustainably from the outset.
This will provide them with a huge commercial advantage. Companies such as Volvo and VW, for instance, will pay a premium for sustainably produced minerals or components for their electric vehicles, to both minimise their supply chain emissions and to burnish their own sustainability credentials.
Nickel, copper, lithium and cobalt - all key components in batteries and renewable energy technologies - are most likely to see surges in prices and production, according to the IMF. Photo / 123RF
Additionally, by generating their own electricity, they will no longer be tied to the existing electricity grid or a gas pipeline to power their operations. This will open up swathes of so far unexplored territory in Australia, as Aeon Metals has found with Walford Creek – it is 110km from the nearest powerline, which previously would have seriously limited its potential.
The attitude in mining has traditionally been bigger is better, be it the size of the mineral deposit or the size of the trucks and haulers.
But these new mines will operate on a smaller scale with smaller equipment that can be electric powered and reused at other mines, and this will open up mineral deposits which had previously been too small.
The IMF – which is basing its assumptions on the world heading to net zero emissions by mid-century – says demand for critical minerals would bolster Australia's annual growth by 1 percentage point.
It amounts to an enormous sustained boost to the economy, but Australia will have to be smart to ensure we turn the potential into a boom.
In particular, we will need to set our own ambitious emissions targets at the upcoming global climate summit in Glasgow.
We won't be able to position ourselves as a supplier of electrification raw materials to the rest of the world if we aren't taking part ourselves. As time goes by, it becomes more and more likely that other countries will start imposing carbon tariffs on our goods and looking to other locations to buy these critical minerals.
