In our Lunchtime Reads, we distill the most important climate news from the Silicon Valley Bank collapse, which broke just as two major conferences in this space concluded.
In the second of our two-part series, Anca guides us through the potential solutions for our coming minerals rush.
Securing the critical minerals we need for a green energy future will require cleaning up mining practices, boosting recycling and innovating to be less dependent on them altogether.
Last week, we looked at the massive quest for the minerals our planet needs over the coming decades—and the supply gaps we may face. This week, we look at a combination of potential solutions to this challenge.
Countries are already boosting efforts to obtain critical minerals.
The European Commission, the European Union’s executive arm, is set to unveil as soon as Thursday a package of proposals meant to make it easier to extract these resources domestically, as well as create new international partnerships.
The journey minerals take into the electric cars, solar panels and wind turbines we increasingly see around us follows many steps along a complex supply chain that often involves energy-intensive practices.
Let’s start where it all begins: mining. Next we’ll move to other ways to manage our minerals more wisely.
It can take, on average, 16 years to move mining projects from discovery to first production, according to the International Energy Agency.
The process requires numerous steps, including designing the mine, installing infrastructure and digging tunnels—not to mention lengthy and often difficult permitting procedures.
On top of those routine challenges, mineral concentration in ores (natural rock or sediment containing valuable metals or minerals) has declined in recent years for a range of key minerals, the IEA said. That means extracting them requires more energy (traditionally from fossil fuels), more emissions and more waste.
Mining has a controversial reputation, including often negative impacts on the environment and unsafe conditions for workers (this latter point is equally important, though we don’t touch on it today).
Companies are exploring ways to clean up extraction processes.
“Technology investment would be one of the best mitigation strategies for miners to have less impact on the environment,” said Sung Choi, metals and mining analyst at BloombergNEF.
Take, for example, London-based Savannah Resources, which wants to build Europe’s largest open-cast lithium mine in Portugal to meet growing demand for electric vehicle batteries. The company has faced strong public opposition to the project.
The company outlined plans last month to decarbonize its operations by using battery-operated electric mining equipment powered by renewable energy instead of fossil fuels. French mining company Imerys is looking at similar solutions for its lithium mining projects.
In addition to learning how to mine more sustainably, we’ll also have to find new deposits deeper underground—and fast. Innovation in this space is picking up.
California-based start-up KoBold Metals uses artificial intelligence to help determine where to survey and drill. In December, the company said it’s investing $150 million to develop a copper mine in Zambia. Canada-based Geologic AI also uses artificial intelligence as part of its mineral scanning technology to track deposits faster and with more accuracy.
Some technologies are seeking to skip conventional mining entirely.
Australian-based Vulcan Energy Resources wants to create the world’s first zero carbon lithium project in Germany’s Upper Rhine Valley by tapping into the region’s vast geothermal and lithium brine resources.
The plan—with construction starting this year—is to pump hot, salty water (known as brine) up from three miles (five kilometers) underground, extract the lithium from the brine and use the heat to power the company’s operations and sell excess renewable electricity to the grid and heat to local communities. The extra brine is injected back into the ground.
It’s a win-win, said Cris Moreno, deputy CEO at Vulcan Energy Resources.
“We've just taken the benefit of clearly bolting together a geothermal project with a lithium extraction project,” Moreno said. “We create almost no waste in our process.”
We also need to manage our minerals more wisely, which could help limit our need for new materials.
Recycling will be increasingly important as we grow more dependent on clean energy technologies that will have to be retired at recurring times in the coming decades.
By 2040, recycling large quantities of copper, lithium, nickel and cobalt from spent batteries—a challenging process—could reduce combined supply needs for these minerals by around 10%, the IEA said.
Increasing recycling rates of lithium would mean mining capacity for the mineral would expand eightfold from 2021 to 2050, instead of 13-fold should recycling rates remain constant.
Competition in the mineral recycling sector is growing.
Nevada-based Redwood Materials, one of the largest lithium-ion battery recyclers in North America, says its technology can recover on average 95% of the elements from the batteries it receives. It then refurbishes the materials for use in new electric cars.
Li-Cycle, a Canadian lithium-ion battery recycling company, has plans to expand beyond North America to Europe. European Commission President Ursula von der Leyen visited a company plant last week in Canada, signaling growing interest in the practice.
Major copper producers announced plans last week to reduce their emissions to net zero by 2050 by decarbonizing their power supply, improving efficiency and collecting scrap metal.
Innovating our way to reduced mineral dependency is another potential solution.
Using materials more efficiently or becoming less reliant on them altogether could limit demand increases for critical minerals subject to supply chain disruptions.
Benefits are already tangible today. A 40 to 50% reduction in how much silver and silicon used in solar cells over the past decade has “enabled a spectacular rise in solar PV deployment,” the IEA said.
Similarly, the amount of copper needed in an onshore wind farm is set to fall by 10% by the end of the decade, according to BloombergNEF.
Increased material efficiency can reduce the volume of rare earth elements needed to build the powerful magnets used in wind turbines. And switching to new types of electric vehicle motors that need fewer or no rare earth magnets compared to current EV models could also reduce demand for these minerals.
Tesla announced earlier this month plans to remove rare earth elements from future vehicle motors, part of broader plans to develop more efficient powertrains set to reduce factory footprints by 50%.
Work is also underway—for example by Massachusetts-based company Form Energy—to develop batteries for long-duration storage using iron (an abundant mineral), air, water and very small amounts of critical minerals.
Even with efficiency improvements, substitutions and recycling, the overall quest for minerals is set to significantly increase in coming decades.
Technological innovation can help improve the environmental footprint of these processes, “but thinking that we are going to have some kind of no-impact mineral and metal chain is…naive,” said Morgan Bazilian, director of the Payne Institute and professor of public policy at the Colorado School of Mines.
He added: “We have to balance those kinds of impacts with the other impacts of air pollution or climate change that the move to clean energy technologies is aiming for.”
Editor’s note: Investors at Form Energy, KoBold Metals and Redwood Materials include Breakthrough Energy Ventures (BEV), a program of Breakthrough Energy, which also supports Cipher.
Lunchtime Reads and Hot Takes
What Silicon Valley Bank’s Collapse Means for Climate Tech — Bloomberg Amy’s take: Tom Steyer makes a good point here: SVB collapsed for reasons unrelated to its important role with clean energy technology companies.
Silicon Valley Bank Collapse Threatens Climate Start-Ups — The New York Times Amy’s take: A worry permeating this community is that we need more, not less, risk-taking when it comes to climate technologies, and this financial saga could sap investors’ appetite for any and all risk.
How Silicon Valley Bank’s collapse could impact the climate agenda — The Washington Post Amy’s take: Quote of the times: “A lot of firms just had an existential, out-of-body experience that could have ended in a massive death of their start-up portfolio,” said Jim Kapsis, founder of The Ad Hoc Group. Plus, this article includes an incredible anecdote from one affected cleantech firm.
Bank’s implosion puts climate tech companies on edge — E&E News (paywall) Amy’s take: Related to Tom’s point above: "What we experienced was the failure of a badly managed company: Silicon Valley Bank," said Ethan Cohen-Cole, a former economist at the Federal Reserve Bank of Boston who now leads the direct air capture startup Capture6. "If the reaction in the industry is instead that this is a systemic problem, that's going to have a much larger, much more pernicious impact on climate tech."
SVB Failure Becomes Fodder for Anti-ESG Crowd in US Culture Wars — Bloomberg Amy’s take: A concerning trend to watch as U.S. presidential politics kick into higher gear.
EU proposes power market revamp to blunt price spikes — Reuters Anca’s take: This much-awaited proposal is meant to boost renewables and shield consumers from the destabilizing price increases we saw last year during the energy crisis. First reactions from governments, industry and nonprofits have been quite positive (which doesn’t happen often!)
How Biden Got From ‘No More Drilling’ to Backing a Huge Project in Alaska — The New York Times Amena's take: Energy security may have forced Biden's hand, but the administration also designated 2.8 million acres in the Arctic Ocean off limits to drilling.
More of what we're reading:
Aramco: Saudi state-owned oil giant sees record profit of $161bn — BBC
Brussels at odds over funding rules for nuclear power — Financial Times
EU agrees to push for fossil fuel phaseout ahead of COP28 — Reuters
AND FINALLY...
Electric autorickshaw
Ali Menon, Cipher reader and a communications director at Breakthrough Energy, snapped this photo of an electric autorickshaw in Kerala, India. For Vasudheva Mohan, owner and operator, the electric vehicle is cheaper to run than a gas-fueled one and provides a quieter and more pleasant experience for him and his passengers.
Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.
Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.
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