Making Green Mining Less Of An Oxymoron

New breakthrough science and cost reductions from the world of cleantech hold promise for making mining—one of the dirtiest, most inefficient industries in the world—more profitable, safer and cleaner. But which cleantech innovations aimed at reducing toxicity in mining, as well as the need for power and water, are best positioned to succeed? Which companies will win and which will lose? How can existing players manage risk in the face of new innovation?

Big questions. We try to address them in a new research report on green mining technologies, just published this week.

As important as mining is to society, techniques and equipment that were first developed in the early 1900s are still standard in many modern mining facilities today. Mining is one of the last holdouts of dirty, inefficient industry that’s just waiting to be revolutionized by new breakthrough clean technology. Latest innovations and cost reductions in cleantech hold promise for making mining more profitable, safer and better for the planet.

While there are clear benefits to mining companies implementing new technologies, there is risk involved with new technology. New technology—like bioremediation of mine tailings (the often toxic output from mining processes) or electrochemical water treatment—has historically struggled to find footholds in mining because companies generally don’t like taking the risk of adopting new, unproven technology until others have. That attitude is now changing, as companies are increasingly motivated by dramatic new economic benefits promised by new green mining breakthroughs.

Propositions for green mining across the mine life cycle
The permitting process for opening new mines in most areas of the world is long and costly. Some companies are poised to reinvigorate the process with cleantech innovations aimed at making permitting faster and less expensive by reducing toxicity, power and water requirements. Mine closure costs, at the other end of the mine lifecycle, are being minimized by new remediation technologies. Other technologies promise other economic benefits.

In our research, we found important new innovation taking place in the following areas related to both hard rock (e.g. gold, silver) and soft rock (e.g. coal) mining:

  • Power reduction
    • Comminution efficiency (i.e. breaking large rocks into smaller ones)
    • Low power separation (i.e. separating minerals/metals from ore)
    • Hydrometallurgical processes (processes for separating minerals/metals from ore that don’t require large inputs of natural gas or electricity)
    • Other alternative processes
  • Fuel and maintenance reduction
    • Equipment route optimization (i.e. software helping mining companies plan the most efficient routes for their mining vehicles)
    • Fuel additives/filters
    • Natural gas conversion
    • Electric conversion
    • Improved lubricants
    • Polymers and coatings
    • Training simulators (i.e. reducing fuel and maintenance expenses by training operators using immersive flight simulator-like equipment)
    • Other fuel reduction approaches
  • Toxicity reduction
    • Bioleaching
    • Bioremediation/phytoremediation
    • Non-cyanide separation (i.e. not using cyanide, but biology to extract minerals/metals from ore)
  • Emissions reduction
    • Dust management
    • Particulate sequestration
    • Carbon sequestration
  • Water reduction
    • AMD/ARD remediation (i.e. addressing acid mine, or acid rock drainage, the acid created when large amounts of exposed iron-rich rock comes in contact with water… creating an orange slurry that kills vegitation and animal life)
    • Water filtration/reuse
    • Wastewater processing
    • Tailings remediation
    • Desalination

The state of mining innovation today – drivers for cleantech
Continuous advancements have allowed a growing number of cleantech technologies to surpass a tipping point. For the first time, many of these technologies are both environmentally sound and capable of competing against conventional methods in terms of operations, productivity and efficiency.

In our report, we found several drivers have propelled the mining industry’s growing use of clean technologies.

  • Market volatility – The outlook for the future is uncertain as the mining landscape undergoes significant changes. Globalization, industrialization and industry consolidation are some of the contributing factors driving the changes. In addition, conflicting trends are indicating mixed signals about what lies ahead. Countries such as China are showing signs of slowing economic growth, yet forecasts of long-term global demand are bullish. Given the extensive planning required prior to commissioning, miners and investors are hesitant to move forward with projects without a confident outlook for the market. Companies are reacting to the changing industry dynamics by finding ways to bolster operations to become more flexible, cost effective and efficient.
  • Rising operational costs and falling commodity prices – The growing cost of doing business is threatening margins and making it more expensive for companies to bring supply to the market. Records show production costs for commodities such as copper, aluminum and nickel have already reached or exceeded London Metal Exchange (LME) prices for some operations. These escalating costs and waning returns translate to impacts on companies’ bottom lines. In 2012, the Top 40 mining companies measured by market capitalization experienced a decrease in net profit of 49% to 68 billion and the lowest returns on capital employed of a decade at only 8%.
  • Decreasing productivity and efficiency – Issues relating to permitting have become a growing concern among mining companies and potential investors. For example, studies by mining advisory firm Behr Dolbear find that the U.S. permitting process has jumped from an average of 5-7 years to 7-10 years, an increase of 40 percent in just 4 years. The lengthened process is delaying operations, dissuading potential investors and hindering innovation and development across the economy. Some governments are offering economic incentives for cleaner mining companies, reducing permitting times for companies that incorporate clean technologies into operations. Mining technologies have only progressed minimally by comparison. During the last 50 years, the global mining industry lost 30% of its productivity, requiring greater efforts to produce each unit of output.
  • Abrupt policy changes – Expectations are continuously increasing for the mining industry to operate more responsibly after centuries of irresponsible mining processes. As a result of newly imposed policies and stringent regulations, companies are being held more accountable for their actions. Compliance with new standards is necessary in order for companies to retain their licenses to operate.
  • Resource nationalism – Governments are seeking a larger stake from mining operations by extracting more value through taxes, royalties, and levies. Many countries such as South Africa have followed the footsteps of Australia’s recent Minerals Resource Rent Tax and 67% of mining executives in a recent survey are concerned about the potential impacts of the additional tax burdens. These costs are undermining the confidence of mining companies’ abilities to undertake operations in exchange for attractive returns.
  • Societal scrutiny – In the face of growing environmental and social justice awareness, corporate social responsibility is a new and high priority for many mining executives. Delays from community discontent mean unnecessary downtimes, and reduce the productivity of the operations. Companies must uphold expectations and act responsibly in order to retain licenses to continuing operating on the property.

Some mining companies are experimenting with clean technologies. But the majority remain reluctant. In 2012, investment in innovation by the mining industry was a mere 0.2% of revenue. The mining industry’s research and development expenditures pale greatly in comparison to the efforts of 20% to 30% by other industries. Ultimately, mining companies’ bottom lines are at risk, and volatile markets and worsening problems have compelled the industry to embrace new technologies.

Leading companies have recognized the need for innovation and are taking great strides towards clean mining by shifting focus from maximizing short-term production to sustaining operations for the long haul. Here’s a summary of three mining companies’ experiments with new green technology:

Company  Initiative Results Next steps
Barrick Gold Implemented 30 new energy efficiency projects including solar power pilot project in a mine in Argentina in 2012.Innovation in water recycling and zero discharge programs. Currently has over 140 energy efficiency projects across its operations.In 2012, 19.4% of electrical power was sourced with renewables.36% of water used in 2012 was from saline or brackish sources.

70% of its sites operate under zero discharge programs and reuse recycled water.

Continuing efforts to use more renewable energy and improve energy efficiency.
Rio Tinto World-first $7 million pilot in NSW mine testing methane capturing technologies and $6 million project testing carbon dioxide storage in Victoria, Australia. Australian site has since stored over 60,000 tonnes of carbon dioxide since 2008. Trial new technologies in reducing greenhouse gas emissions and testing ways to capture and store fugitive carbon dioxide and methane emissions.
Vale A $140 million partnership with ABB to convert the world’s largest iron ore mine, located in Brazil, to be automated and completely truckless. Eliminating 100 trucks and reducing diesel consumption by 77%.Goal to increase production by 90 million tonnes per year. Seek other opportunities to incorporate autonomous technologies in mining operations.

Selected examples of clean technology adoption by three of the largest mining companies worldwide. Source: Kachan analysis

Our new report profiles 47 companies that have brought, or are bringing, innovative new green mining technologies to market. Out of hundreds of companies in this space, we’ve found ones we believe are best poised for success.

As a result of continuous improvements and innovation, many green mining technologies are now able to effectively compete with conventional products. While the majority of companies have yet to adopt newer processes, leading companies have recognized the need to invest in new technologies as a response to the shifting industry. And with increasing operational costs and environmental expectations, the demand from the mining industry for cleaner technologies is expected to grow at an accelerated pace.

This article was originally published here. It is reproduced here by permission.

Into the Blue Yonder

At the invitation of Paul O’Callaghan, the CEO of the water consultancy O2 Environmental, I attended the Blue Tech Forum in San Francisco in early June to get a deeper perspective on water technology innovation.  It was well worth the cross-country trip, even for just a one-day event.

Paul’s opening remarks summarized the state of the water sector very succinctly.  Some key figures:  over 90% of the $350 billion annually spent on water worldwide – about half associated with capital equipment, half on operating expenses – comes from municipal/urban water treatment systems, yet less than 10% of water consumption can be attributed to municipal/urban use.  In contrast, agriculture accounts for 70% of global water use but only 2% of water expenditures, while energy production and other industrial activity accounts for 22% of global water consumption and only 6% of the financial outlays. 

Put bluntly, small point-of-use water consumers – individuals and non-industrial enterprises – heavily subsidize the massive quantities of water used by the producers of food, energy and other goods.  Such a major pricing distortion can only lead to massive unintended consequences and inefficiencies in the global economy.

This is just for the established markets for water, saying nothing about the billions of people on the planet who have no access to water, or to the 90% of wastewater that gets dumped into oceans untreated.

Although the water sector has historically been slow to innovate, things are changing:  according to Elsevier, water research has been growing at a 30% annual rate since 2000.  In Paul’s view, there are three themes that are guiding water innovation: 

  1. Realizing that all water issues are local.  Unless pure distilled H2O, water is far from homogenous.  Every water stream encountered in the real-world has different chemistries and thus has different water treatment considerations, requiring different technical solutions.  Systems to move and manage water must be done in the context of a specific geography, terrain and climate.
  2. Rethinking efficiency.  Paul noted Amory Lovins’ aphorism that many of us often seek to cut butter with a chain-saw, and then search for ways to improve the efficiency of the chain-saw, rather than looking for a butter knife.  In the case of water systems worldwide, there appear to be lots of chain-saws cutting butter.
  3. Providing water services in unorthodox ways.  Is water really needed to flush a toilet or to cool an engine or many other things for which we use water?  Can these functions be done with something else than water? 

The balance of the morning was organized as a venue for companies doing some of the more interesting research and commercialization in new water technologies to tell their stories.  Sessions were structured around four hot areas of water innovation:   (1) produced water and decentralized treatment/re-use, (2) smart water management and infrastructure, (3) advanced desalination, and (4) energy/resource recovery from wastewater.   For each of these four areas, four companies pre-selected by the forum’s advisory panel presented their novel technologies and strategies to penetrate the marketplace.

I’m a bit jaded, as I attend many conferences at which ventures make their pitches to prospective investors in raising capital.  I am often bored or easily distracted at such events, as many of the presenters fail to capture my attention.  However, I would rate Blue Tech very highly; the advisory panel did an excellent job screening the companies and surfacing some very promising opportunities for big impact and good financial returns. 

Among the companies I particularly liked were (in alphabetical order):   Hydration Technology Innovations (forward osmosis technology for desalination), Soane Energy (polymer monolayers for treating water associated with oil/gas production) and Zeropex (reversible generator/compressor to better manage distributed water systems).  HTI won the “disrupt-o-meter” award as selected by the audience, while Pasteurization Technology Group (technology integrator and project developer for wastewater disinfection and electricity production at water treatment plants) won the award for best go-to-market strategy.

The balance of the afternoon was spent discussing the dynamics of the water industry from various standpoints:  water utilities such as American Water (NYSE: AWK), large corporations serving the water market such as General Electric (NYSE: GE) and Veolia (NYSE:  VIA), venture investors with interests in water such as VantagePoint Venture Partners, Emerald Technology Ventures and XPV Capital

Albeit with different nuances and emphases, all agreed that water technology represented a challenging but nevertheless enormous investment opportunity for the coming decades, and that the richness of innovation and entrepreneurship in water was improving dramatically and rapidly.

Everyone was feeling pretty good about things in the water arena…and then Dennis Bushnell, Chief Scientist at NASA Langley, provided a quite amazing closing keynote talk that defies description.  I’ve written previously about the bearish resource views of Jeremy Grantham, and all I can say is that Dr. Bushnell makes Grantham sound like a ridiculous optimist.  Dr. Bushnell’s remarks went far beyond implications about the water industry to nothing less than the future of the human race and Planet Earth.  His fascinating but grim commentary merits a separate posting at a later date.  By no means did Dr. Bushnell’s speech detract from the Forum, but the conclusions he offered were so dire that it generated a wave of awe-struck head-shaking and nervous giggling from the audience, and sent us all eagerly into the cocktail reception seeking refuge from stronger stuff than clean water.

Water, Water, Why Don’t You Save Yourself?

Water saving devices are often the unsung hero, forgotten solider, forlorn hope, and every other bad war cliche you can think of.  But it really is important to do our part in the fight for water conservation.  That’s one reason we started carrying the Instant Off Water Saver, (a pack of 3 is only $20 as of this posting).  And why we’re really excited to profile the President and founder of Instant Off.

And how can you go wrong with a product that pays for itself in 2-3 months!?

Name: Steve Gordon, President
Company: INSTANT OFF, INC.Instant Off

Greening to me means making the choice to be the type of person who respects the world’s natural resources and make an effort to conserve and protect them. Greening means being concerned with the state of all of our natural resources including the air we breath, the water we drink, natural habitat, rivers and streams and open space.

I got started in green business in 1991 because I wanted to make a difference. Water conservation has always been my passion.  I was lucky enough to design a product that can do so much for so many people. After 19 years I still get excited telling people about the INSTANT-OFF. I like things that don’t break and that attitude has led me on an ongoing quest for ever increasing durability and quality.

We are constantly searching for environmental companies that are committed to selling innovative products that make a difference. We found Green Home while doing research on the internet. I was impressed with their selection of products and their website.  We chose as a marketing-partner to increase our sales and public awareness of our products.

Of course we have the INSTANT-OFF installed in our facility.  Our assembly plant and corporate offices share the same building space to reduce power consumption.   We have reduced the amount we print and are trying to become virtually paperless.  We also recycle all bottles and cans. At home I do my best to conserve, turning the thermostat up, using the cold water from the shower to water the plants, recycling more and turning off lights that aren’t being used.

The best greening advice we can give people who want to start “greening their home”  is to start with installing the INSTANT-OFF on all their faucets.  Start with a product that is easy to install, easy to use,  inexpensive and is made in the USA.  If half the homes in America installed the INSTANT-OFF we would save Tens of Billions of gallons of water every year.

Other than my biased answer that the INSTANT-OFF is the best product carries, I would have to say that the AQUS Grey Water System (Editor’s note only $295 as of this writing saving 10-20 gallons per day) is a very cool addition that homes should have.

I think the biggest change in the green sector is that it’s now popular to be “green”.   Since the Presidential election in 2008, corporate America has finally embraced environmental responsibility.  I’ve been in water conservation for 19 years and its great to never hear your people tell me that I’m ahead of my time.

Green products make a difference because they help get consumers involved in the environmental movement. One small change leads to another small change that leads to more positive changes. Green products facilitate positive change toward environmental responsibility.

I think consumers are aware, but there is a lot more education that is needed.  I feel most average consumers think that being “green” involves too much work and requires changing habits that are tough to break. It is important for environmental companies to carry a wide range of different products and to have a tool on their website that sorts by price. Providing price sorting encourages people to start “greening” even though they may be on a budget and makes giving environmental gifts easy.

Actually I am already working on the perfect green invention. Can’t go into many details but I will say that’s it a new way to save power in your home and it will be the perfect expansion of the INSTANT-OFF product line.

Thanks Steve!  Keep up the world greening.