(Kitco News) - While the electrification push is resulting in a ramp up of critical mineral production, Skarn Associates CEO Mark Fellows warned that to meet the rush, carbon intensity is rising at some mines.
Skarn is a consultancy that helps miners quantify energy intensity, GHG emissions and water use across supply chains. Fellows spoke to Kitco Mining in early March at PDAC 2024 in Toronto, Canada.
With electric vehicle demand jumping this decade due to shifting consumer preferences and government incentives, there's been a ‘gold rush’ in the critical mineral space.
"There are some really substantial increases in production happening," said Fellows, adding that there's an inherent tension between production growth and the resulting higher carbon intensity.
Fellows noted the increased output of nickel in Southeast Asia, which is pushing the carbon intensity curve upwards.
"In the case of nickel, the production growth over the last couple of years has been very strong in Indonesia, where Chinese companies have financed a whole load of pyrometallurgical ferro-nickel production capacity, all of it powered by coal-fired power stations," said Fellows. “All of that new capacity coming online in Indonesia has effectively pushed the curve upwards.”
He also noted the long supply chains for hard rock lithium mines in Africa and North America. The material has to be shipped to China to be refined, which adds to lithium's carbon intensity.
"There's a real danger that we will actually contribute to the problem rather than improve the situation," said Fellows. "It's fine to build an electric vehicle, but if the nickel or the graphite or the cobalt that's going into that battery is sourced from inherently high-carbon operations...it's not really a net gain. Low-cost production wins out."
Coverage is sponsored by UEC (Uranium Energy Corp.), URC (Uranium Royalty Corp.) and GoldMining.
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