Season 2: #7 Green Mining

To attract investment into green mining, Canada must cut the cost of energy, transportation and labour. The industry must be re-invented. Micro-nuclear reactors, heavy lift airships, robotics… the solutions are close at hand. 

Transcript

6          Green Mining

I have argued that Canada should make mining in the north a cornerstone of future economic wealth. I’m not alone in this. For this, there are several conditions that must be met. None can be omitted.

Mining must be financially attractive to investors. That means getting costs down. Mining companies need affordable, green energy, green transportation and green mining. They also need reduced red tape. Meanwhile Canada addresses the concerns of stakeholders such as First Nations and environmentalists, is critical. 

A problem in achieving these goals is that opposition to the mining industry is growing.  The International Rights of Nature Tribunal recently declared 14 Canadian mining companies to be guilty of violating the Rights of Nature and Indigenous rights. The Tribunal has no authority, except moral. But Canadian mining companies have been blamed as Indigenous land defenders were jailed, disappeared, murdered, and sacred places and rare ecosystems have been destroyed.

In the Yukon in early 2024 a large cyanide spill occurred at the Eagle gold mine. British Columbia’s Golden Triangle, near the Alaska border, holds a trillion dollars in minerals, largely gold. The mining however produces toxic heavy metals that threaten the ecology. Indigenous communities, environmentalists, investors, regulators and lawmakers on both sides of the border are wrestling with how to proceed.  Similar concerns are true of the Ontario Ring of Fire, which has upwards of $90 billion in chromite, nickel, copper, platinum, gold and zinc.

Canada has the second largest mineral reserves of any country on earth. We have massive amounts of basic metals, plus cobalt, thorium, titanium, lithium … ingredients needed for batteries. We have large reserves of rare earth metals which are essential to high-tech industries. As for demand, copper alone requires as many as six major new mines every year just to keep up with the growth of the electricity grids around the world.  

Antimony, a metal used to increase the hardness of alloys, is in high demand. It is found in various Canadian locations. 

Canada has reserves of over 15 million tonnes of rare earth oxide. These minerals are critical to advanced computer chips. Fifteen years ago, Chinese criminal gangs controlled the markets. The Communist Party of China acted, and three Chinese state-owned companies now control 87% of the global market.  That is a strategic problem.

To ensure a aecure supply of strategic minerals, Canada must make a long-term commitment to a  national industrial strategy. Democratic countries would then be in a position to buy Canadian minerals. Europe has stated they want reliable democratic suppliers.

To attract investors, technological change is needed to cut costs and make mining green. Later I will delve into the mining approval process, and the concerns of First Nations.

This said, Canada starts with a big advantage. Eighty per cent of all mining companies are headquartered in Canada. The annual Prospectors and Developers convention in Toronto attracts 30,000 participants from over 130 countries.  

Following a 2012 peak, the Canadian mining industry suffered. During the 2008 financial crisis and then with COVID, investment in Canadian mining decreased. Then, after 2021 as support for clean energy kicked in, demand rose for lithium, cobalt, and nickel. Investment in Canada increased to $16 billion in 2023. Yet this is still a drop in the potential bucket.

A mine is a major investment. Investors try to anticipate where prices will be by the time a mine delivers a metal. That can be years away. The costs such as energy, transportation and labour are weighed very carefully. Unfortunately, the cost of these in Canada is two and a half times more than elsewhere. Canada is expensive. It is a very tough, competitive business.

Many other countries have mineral resources. They attract investors where wages are low, and environmental regulations are weak. Countries like these are attractive to China, for whom poverty and ecological damage is not a concern. China invests heavily in ports, roads and railways, and now controls the supply chain for between 20% and 80% of global minerals. 

Democracies can’t trust China or Congo or Russia with this kind of power. It is a matter of national security.

Nor can corporations trust lawless countries. Recently, a British mining company paid Mali $200 million to free employees who had been jailed under bogus criminal charges.   

It is the strategic minerals that concern Canada as a nation. An industrial strategy to mine strategic minerals should be considered defense procurement, part of Canada’s defense budget. If the OPEC oil crisis in the 1980’s taught us anything, it is that democracies can never rely on the good will of adversaries. 

More broadly, there are also a half dozen basic metals where Canada has large reserves and where global demand is strong.  To attract investment here, Canada must resolve issues of cost, over-regulation, and political opposition.  All this is possible.

Mining is an industry in transformation, largely because of opposition. The industry is inherently dirty. You dig a big hole in the ground, process millions of tonnes of ore, and it gets messy. The industry creates about 10% of all climate gas. The mining industry knows it must be as cleaner and greener. If Canada leads the way, it can unlock major investments.

To repeat myself, I will address Indigenous opposition and red tape later. 

But first, the high costs of labour, energy, and transportation must be overcome, while at the same time reducing ecological damage to a bare, bare minimum. Canada must embrace green mining from start to finish, and invest in technology that solves problems. 

To get to this win-win-win situation, we must define “green mining”. Used here, it refers to industry that has almost no carbon footprint, uses ecologically friendly transportation, and cleans up the mess that is created from digging that dirty hole in the ground. 

Admittedly, this is idealistic. The purpose of an ideal here however is to define the goal, but then set a minimum standard. Yes, that means regulation.

But first, there is a trio of technologies that can cut costs and make mining green: fossil free energy, robotic mining and smelting, and hydrogen transportation. It these three technologies work, and they should, the red tape and political opposition will simply melt.

On the energy front, northern Canada has a problem. There is no electrical grid. There is no year-round sun to produce electricity.  None of the renewable energy sources that work in the south can help in the north.   

We know that western oil and gas will flow for years to come, providing energy revenue for Alberta, while contributing to the climate crisis. After Trump, the climate crisis will be worse, and hostility to fossil fuels will almost certainly return.  In fact, in many parts of the world it has never gone away.

The challenge for a fossil free north is that clean energy must be produced, stored and distributed. It is nearly impossible to store electricity in large scale for long periods of time. Hydrogen has no such problem with storage and distribution.

Green hydrogen could be produced through wind or solar, and shipped north. Even better would be gold (or white) hydrogen. This is created hydrogen deep in the earth, but the industry to tap into this white hydrogen is still in its infancy.

To the regret of all who prefer to avoid nuclear energy, it is the only alternative for the next few decades. A new generation of small modular nuclear reactors is on the horizon. Small reactors have actually run for decades to power nuclear subs and aircraft carriers. So, they do exist. There are many designs in development, including some in Canada, typically they come in late and over budget.  

Things could change very quickly. Ontario is planning on feeding the electricity grid with SMRs. These models are too large to be transported to remote location locations up norths. 

Other designs have potential for mining and communities. The Westinghouse eVinci is a transportable 5 Megawatt micro reactor that could be deployed in Saskatchewan as early as 2029. It has been described as a portable battery pack that sits on a concrete pad, and be replaced every eight years. A New Brunswick design specifically designed for mining   is also moving ahead. The key is that once a design has been proven  and approved, it must be mass produced to lower costs. 

It is not only about electricity.  Canada has recognized that the future lies in a hydrogen economy. Hydrogen can be created using electricity. It can then be burned, or converted to electricity. It can be stored and shipped, unlike electricity. It can power aircraft, ships, cars, and buildings. Canada’s future car industry, for example, is more likely to be hydrogen electric rather than battery electric. Gas pipelines could be converted to carry hydrogen. All that is maybe decades away, but is an opportunity for the auto and fossil fuel industries in the post-Trump era.

This said, micro-nuclear power is just around the corner, and with support to get started, it can solve the problem of providing mines with fossil free energy within a decade. 

The next big challenge for the mining industry is green transportation.  The industry needs to move extraordinarily heavy loads for long distances in a hostile, roadless north. The solution is an old green technology: airships.  

Helium airships are a growing global industry. The Chinese AS700 is a non-rigid airship with commercial and tourism use.   The British Airlander 10 is a hybrid airship designed for luxury tourism, humanitarian relief, and also military surveillance. Flying Whales are French/Quebec heavy-lift airships, designed to move large loads to remote locations. All these use helium as the lifting gas. 

Hydrogen could be used instead, dramatically cutting costs.  Hydrogen is lighter and cheaper than helium, so it has more lifting power at a lower cost. The obstacle is psychological, not scientific.

A century ago, over three decades, hydrogen airships flew successfully. They flew to the north pole, and crossed oceans as luxury transport. They were quiet, spacious, and clean. Yet to this day, if anyone mentions hydrogen airships, the 1937 Hindenburg explosion jumps to mind. That terrible accident, and the sensational film coverage, spelled the end of airships.  

We now have modern technology. Hydrogen is arguably less dangerous than the gasoline we put in cars. Both if mixed with air become explosive, it’s the fumes. They must then be exposed to a spark. Hydrogen, if leaked, floats up and away. Gasoline fumes hang around. We treat gasoline with care; we can do the same with hydrogen. Technology to dramatically reduce the risk has advanced in the past century. For the mining industry, airships can be a lot cheaper and faster than any existing transport.  

Imagine, then, a huge fleet of hydrogen-lift airships. Each airship might carry 100 tonnes of ore at 100 kilometers an hour for long distances. And not just ore. Airships could carry people and equipment. 

Critically important, airships could remove dangerous materials from the mine site. Some airships might be automated, pilotless craft that fly on routes that avoid bad weather and sensitive terrain. The cyanide pools like that at the Eagle gold mine in the Yukon could be simply removed to a processing plant for purification and re-cycling. Waste like arsenic, lead, mercury, and cyanide, acids, and other materials now found in tailing ponds all over the north could be removed and treated. Facilities designed to process this waste could be designed and built.

Hydrogen airships would incidentally render the Chinese Belt and Road Initiative obsolete. They could ensure that shipping bottlenecks, like the Suez and Panama canals, could not be used for political blackmail. The industry could become a major disruptive technology in an area where it is overdue.  Airships could replace many long-haul trucks and container ships with a cheaper, greener alternative. Fleets of airships could be built in Canada to Canadian standards.

Back on the topic of green mining, the future for mining does not lie in competing with the low wages of the developing world. The future is in technology and robotics. Productivity is a key measurement of how an economy is progressing. By most standards, Canada is not doing well. The key to mining productivity is not to make miners work harder or longer. It is to use new technology and equipment that gets more output per worker. 

Investments in robotic equipment will allow mining in environments where humans cannot easily survive. This means fewer of the brutal physical jobs. Robotic equipment can be designed, built, managed and maintained in Canada. Well-paid humans, assisted by artificial intelligence, would run the mines. Canadians have the education and experience to do this. 

It is already happening. Goldcorp, a gold mining company, will use all-electric machines instead of diesel at a gold mine in Borden Lake. This will eliminate 7,000 tons of CO2 a year. 

Both mining and smelting are becoming greener, safer and more efficient. Smelting is a key part of the mineral supply chain. Hundreds of millions of dollars are now being invested in technology to eliminate coal-fired steel making. 

Traditional smelters burn coal to literally suck the oxygen out of iron oxide. Smelters then release C02 from the burning coal. 

The Swedes have developed a technology for smelting that uses hydrogen instead of coal, and emits water rather than CO2. That is just one example, one metal where greener smelting is on the rise. Every metal or mineral has a different process. All must ultimately be made green. The industry is already changing.

Of course, mining is and always will be heavy industry, and will still be dirty. This cannot be changed. Idealism has its limits. But the mess, the toxic pollutants, can be largely contained, and the climate damage can be minimized.

The bottom line is that Canada can offer solutions to the obstacles that mining companies face. Micro reactors can provide energy. Airships can provide affordable transport. Robotics and other technology can reduce labour costs, and increase productivity. Do this, and greater investment will follow. 

Consider one final example.

In Vancouver a new bridge is being built that will cost over $4 Billion. It takes a lot of steel. The steel is being bought from China, which uses coal-burning smelters. The ore is mostly from Australia. Ideally, Canada should provide the ore and make the steel in a cleaner industry.

That steel could come from an iron mine on Baffin Island in the eastern arctic. Their iron ore is exceptionally high grade. Baffinland Iron Mines now wants to triple its output from 6 to 18 million tonnes a year. The mine already has a constant stream of trucks on a tote road to the harbour. To expand, they propose a 110-kilometre railway that would make 20 train trips every single day. Nearly 200 shiploads of ore would then sail through a fragile Narwhal habitat. 

Many of the 11,000 residents of Baffin Island oppose the expansion of the mine, for three reasons. First, the Inuit rely on caribou as a major source of protein. The caribou migration across the tote road is already disrupted. Second, they fear the destruction of the narwhal marine conservation area. Third, the Inuit know the money is temporary. They have a longer-term perspective. 

For Canada to unlock more resources like this in the north, all the obstacles to green mining must be overcome. A mine like Baffinland must be robotic, increasing productivity. The equipment must run on fossil-free energy. Massive amounts of ore must leave the mine without impacting the environment.  All this is possible, with a revolution in green mining that Canada can lead.

There is one final ingredient for success: a revolutionary change in Canada’s relations with the First Nations on whose land the mines are located.  For that, a Grand Bargain is required.