February 08, 2023

Watch out for those claiming critical minerals expertise

The unambiguous ignorance of politicians, journalists, and the self-selected academic “experts” who advise them on the topic of the available supply of minerals that are critical for the decarbonization of the energy economy is leading policy makers to very bad decisions.

It is clear to anyone who looks at the geological data and has a knowledge, or at least an informed (by experience!) overview, of modern chemistry and chemical engineering that mining engineering in 2023 is incapable, financially, of recovering for use any more than a fraction of what would be needed of the minerals critical to the total global decarbonization of the energy economy using currently known technologies and fossil fueled energy.

A reader at this point might look at the above paragraph and say that it’s based on a logical fallacy, an appeal to authority, rather than on data analysis, but, in fact, it’s that type of fallacy, an appeal to unqualified authority,  that drives the entire climate change crisis, which is an appeal to the authority of the scientifically and culturally ignoranr and illiterate.

The problem is the widely accepted metric known as “earth abundance.” This is defined as the proportion of a given chemical element in the earth’s crust, the forty kilometers or so of (mostly) solid rock that overlays the earth’s interior. The scientists who have measured a few points at significant depths have decided that the crust has a generally uniform distribution of chemical elements when taken as a whole, even if there are occasional concentrations of some of them at or near the surface.

Those occasional concentrations present as minerals that have more than the average (earth abundant) content of a metal or metals. These concentrations are formed by geological chemical processes and the ones that occur at or near the boundary between the atmosphere and the crust (aka, the earth’s surface) may also be affected by the processes known as “weather” and although these weathering processes may take millions of years to operate, they are still quicker than the billions of years it took for the molten earth to cool and differentiate its surface from its interior. These processes are not “organic,” once they have occurred and the near surface minerals have been extracted (mined) and processed (refined into useful forms) the deposits are gone and will not reform or refill.

Additionally, for a deposit to be a useful mine, mechanical and chemical processes that are practical and economical must be available in order to refine the extracted minerals, andproduce metal that is affordable.

And, such deposits must be accessible to necessary infrastructure, such as roads or rail, electric power, and fresh water.

The limitations of human ingenuity and simple cost issues limit the economic recovery of chemical elements from deposits to those with high grades (concentrations). All such deposits, no matter what the grade are limited in extent by geological and weathering processes that either occurred millions or billions of years ago or take thousands of centuries to have an effect. As mining exhausts the high grades of a deposit, the extraction and concentration to processable levels of lower grades becomes so costly that at some point the mine’s life is over.

Of course, chemical engineering has been advancing, so that we hear daily of companies that will “mine” tailings (mining residues) to get additional desired metal values that were too low in grade to be recoverable in the past, usually due to economics.

Note that the concentration of minerals has been a chemical/mechanical process known as flotation for about 125 years. Lately it has become possible to use electromagnetism and optical processes  to sort and thereby concentrate some previously ignored ores and residues to workable levels of concentration.

But the variety of chemical reagents necessary to extract the desired metal values from the concentrates is quite small due to chemical engineering costs. Academics are always proposing new “reagents” for various aspects of cracking and leaching ores or for separating mixtures of related elements but almost invariably these new reagents are simply too costly to be economically deployed.

In a previous article I have  demonstrated why there simply is not enough lithium, as an example, accessible and available to us, to globally completely transform fossil fueled transportation and electrical grid buffer-storage to non fossil fueled operation.

China. Having seen this problem coming more than a decade ago has already deployed trillions of dollars of capital and millions of man-years into preparing itself to have a low-cost energy basis for a non-fossil fuel energy regime. China dominates the processing of lithium and the manufacturing of lithium based c rechargeable storage batteries. It has acquired world wide control or ownership of more than 60% of the accessible, recoverable lithium; it processes 80% of the world’s cobalt; it processes 60% of the world’s copper; and most of the gallium, indium, germanium, silicon, tellurium, and the rare earths.

Deglobalization is merely cementing China’s dominance in the materials necessary for the production and use of alternate energy.

Central and South American governments along with many in Africa are nationalizing critical mineral natural resources, and even if the nations involved can’t utilize the minerals directly they are requiring foreign buyers to add value in the country of origin, so as to create employment and wealth downstream of the physical extraction of the mineral.

The experts, who include Elon Musk as well as the CEO of Volkswagen have been separately quited lately as saying that there is no shortage of lithium. The miners are just moving too slowly.

These men and many others are simply wrong, and the tragedy is that those that are wrong are in charge and are deploying trillions of dollars in a lost cause that only indebts a generation and robs it of the cheap energy that is the basis of a modern society.

China alone today has sufficient resources of critical minerals, processing, and fabricating technologies to ensure and secure for itself the low cost energy that is the basis for prosperity.

The rest of the world will now fight for the critical mineral resources just to maintain a declining standard of living.

It’s time to stop listening to the experts.

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7 responses

  1. Hugh Sharman Avatar
    Hugh Sharman

    Thank you Jack! Our democratically elected civilisations are facing hard times, brought about largely by our own, collective stupidity!

  2. Jack Lifton Avatar
    Jack Lifton

    Hugh

    The pressure to use Diversity, Equity, and Inclusion as the over-riding selection standard is destroying the merit system so necessary to make sure that the best and brightest are in charge. The friends of my youth who were not selected for a PhD program, or failed at it, were devastated at the time, but they all recovered and most succeeded in life. I well remember when a committee member said to a friend of mine, after a presentation, “Perhaps, Mr. X, philosophy isn’t your cup of tea.” X went on to become a successful lawyer. I note further that all of my friends in graduate school lived “poor.” We all had apartments in the seedy part of town (near the University, of course), ate what we could afford, and dressed very casually. But we had spirit, and none of us were in it for the “money.” Sadly, for America, it would be the protestors filling the sociology and psychology departments who would catalyze the decline of America while being certain that being for civil rights and against wars of any kind would bring about a brighter future. Everyone, my academically driven friends and the virtue seekers ignored ECONOMICS and were blissfully unaware of the cheap energy underlying our society’s largesse of time to contemplate on a full belly while warm. Now having sown the wind, we reap the whirlwind (I think this has been said before in a book no one reads today.). Ignorance at the college/university level is a choice, not a virtue.
    Jack

  3. Tony Simpson Avatar
    Tony Simpson

    Thank you Mr Ryan
    It would be laughable if was not so serios!, Make an announcement shares sky-rocket now how long and how much $$ to develop a circuit and pilot plant prove same.
    Then ship the pilot plant product to China to “refine”
    There is only one Australian company that can do all this up to “refine” !
    Why can’t they send to Cina to refine?
    They can do this in there own ” Metalisation” plant in South Korea !

  4. Tracy Weslosky Avatar
    Tracy Weslosky

    Note from the Publisher: I received an email this morning around this column that found Jack Lifton’s column to be very misleading, especially the following 3-lines:

    Jack Lifton writes – “The experts, who include Elon Musk as well as the CEO of Volkswagen have been separately quoted lately as saying that there is no shortage of lithium. The miners are just moving too slowly. These men and many others are simply wrong, and the tragedy is that those that are wrong are in charge and are deploying trillions of dollars in a lost cause that only indebts a generation and robs it of the cheap energy that is the basis of a modern society.”

    The email then went on to explain that: “There is no shortage of lithium resources globally and especially in Canada. Lithium pegmatites occur throughout the Canadian Shield and are abundant in the Atlantic Provinces as well. it is only about establishing the mid-stream processing capacity which has been our vision for some time. While politicians may not fully understand the industry, geologists like me with extensive experience in the space have good understanding.”

    It is this industry professional’s recommendation that this article be deleted. InvestorIntel.com has a commitment to be a fully independent source, however, we value our reputation and have sent this to the Critical Minerals Institute Board to comment on this feedback.

    1. Jack Lifton Avatar
      Jack Lifton

      To the industry professional,

      Only accessible “discoveries” can be, if qualifiable, turned into “deposits,” that can be measured and mined economically, meaning that their output is priced competitively, so that as feedstock for an existing competitive processing industry, such deposits can be considered as a reserve.

      I think that the global mining industry is moving slowly, because the financial world is not convinced that increasing the production of critical minerals is worth the risk of tying up so much capital. The current lemming-like moves of the global OEM automotive industry to full electrification has deployed essentially all of the industry’s working capital for the rest of the decade. The banks are worried that if electrification fails or stumbles many prominent automakers will also fail.

      The fact that electrification of transport will entirely depend on the supply of lithium and the fact that increases in the now obviously insufficient supply take a decade and more during which there is no cash flow to support repayment of investments and loans has caused many investors/lenders to see such a build out as a job for governmental finance. With the worldwide turmoil in finance today though, governments are reluctant to pledge the huge funds that would be necessary.

      I note the simple fact that China, recognizing this problem more than a decade ago has already deployed more than a trillion dollars to buy and develop mines and refineries and to organize its STEM education to focus on critical minerals security and self-sufficiency. But China is not planning to supply the world before it takes care of itself. The question is can the rest of the world achieve what China has achieved in critical minerals self-sufficiency if the strict guidelines for the elimination of fossil fuel use by the OECD nations are enforced.
      I think that the answer is no, because the elites do not understand the limitations on the production of critical minerals due to geological constraints and the fact that money is not infinitely available just for this purpose.

      As always, the race will go to the swiftest and the smartest. Electrification of an OEM’s products will depend on that OEM’s understanding of the critical minerals’ supply chains, and upon rapid and focused investment in only those mines and refineries that have a high probability of success within the necessary time frame. The haphazard investments so far made by some of the OEMs do not bode well for their future.

      Jack

    2. Hugh Sharman Avatar
      Hugh Sharman

      Tracy,
      This “industry professional” could, at the very least, have identified him/her self so that we, your readers, could also understand where he/she is coming from and what interests, including financial interests, he/she is trying to protect!
      Refining battery quality lithium from “lithium” pegmatites is, to say the least, energy (CO2) intensive and highly polluting. I believe that at present, most if not all of pegmatitic lithium is refined in China, which does not, in any way, confer ESG “costs” onto the Western consumers of lithium ion batteries.
      Banning writers whose viewpoints are inconvenient for today’s democratically elected, but not necessarily technically well educated establishments, is the normal behaviour of dictatorships. Not in today’s Canada, please, Tracy!

      1. Jack Lifton Avatar
        Jack Lifton

        Hugh,
        I think you have hit on an excellent point. In fact, no company in the domestic Chinese lithium processing supply chain, including the massive, world market dominating Chinese lithium-ion battery industry has any ESG mandates that we know of. Therefore, the arbitrary implementation of such costs on North American and European lithium related industry immediately reduces their competitive advantage. This is a classic example of a consequence that any experienced business operations analyst can see, but that presents as an “unintended consequence” to elected officials, bureaucrats, and academics, who I shall call The Big Three.
        Now that the Big Three managers of America’s competitive decline have discovered “industrial policy, whereby government dictates the goals of national industries, they will be able to formally institutionalize bad choices as part of the rewards to cronies and lobbyist system that dominates Washington. Perhaps Congresses next multi-billion-dollar pork roast, aka “a spending bill” should be signed on the deck of the U.S.S Pinafore after a thorough check to see that the vessel’s builders were ESG and LGBTQ+ compliant.

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