Article first published in Mexico Business News, January 2023. Reprinted with permission.

The world is ready to electrify. After generations of false starts, drivers and automakers have embraced electric vehicles. Solar, wind and hydroelectric power projects are reducing our dependence on fossil fuels. However, while politicians and pundits talk eagerly about commitments to electrification and investments in green energy, not enough leading voices seem to understand what’s required to make it all happen.

Copper – a critical mineral in electrification efforts – is poised to hit a bottleneck. Sixty-five percent of the world’s copper comes from just five countries: Chile, Australia, Mexico, Peru and the USs. But the US has only three operational copper smelters to process the concentrate that we produce. Where Chile and Peru are poised to expand their existing facilities and undertake a number of new projects, US-based operations have experienced challenges – just when they’re needed the most.

Analysts say getting a new greenfield copper project off the ground in the next few years is virtually impossible. While fluctuating commodity prices have led to some softening in the financial markets, our biggest challenge is the prohibitively long timelines involved in obtaining regulatory approvals at the federal level. Of the average 16 years it currently takes to get a copper mine into production in the US, only about two years is required for construction. The rest is permitting.

This is a problem if we’re going to meet the 2050 net-zero emission goals being discussed at the highest levels of government. A 16-year wait for any new operations means we’re already behind and further destined to depend on other countries to meet our own goals.

State regulators get it

The good news is that individual states are doing a surprisingly good job of permitting where the federal government falls short. Mine owners with holdings on private land packages in Arizona, for example, can go to the state for their water and air permits, and work with government agencies that are much more attuned to the importance of a successful copper mine for its economy, and the future. But companies with projects on federal lands are choosing to simply leave the copper in the ground, divest them, or accept excruciatingly lengthy permitting timelines.

The recent political pressure toward commodity self-sufficiency may also encourage progress at the federal level. Without sufficient smelting capacity in the US, much of our copper concentrate is shipped overseas for smelting. This has led to significant public unease, as shipping our concentrate offshore either feeds foreign electrification efforts at the expense of our own or costs us more to buy back as finished products. Neither option fulfills our common desire for greater domestic production control of our commodities.

This commitment to a local supply chain has taken particular hold with respect to specific minerals like rare earths and lithium, with the federal government incentivizing investment in an effort to pull those back for development in the US. These incentives need to extend to more mainstream critical minerals like copper, nickel and cobalt.

Innovation can help

Another solution to this ore processing roadblock is the use of alternate technologies and new approaches to both mining and processing. We have embraced these opportunities at Ausenco with a division specializing in Emerging Process Technologies, or EPTs.

One of these approaches is “ore sorting,” a process in which we use artificial intelligence and advanced instrumentation to isolate only the best ore for further processing. Ore sorting reduces the overall volume of ore sent to be processed – a smaller amount of higher quality ore – which allows for smaller plants that may be more energy efficient, produce lower emissions, and perhaps face fewer barriers to permit.

An alternate approach is to remove smelting from the process entirely. Sulfide copper ore is traditionally treated through a concentrator, which is a high-capital solution. While acid and heap leaching can be used to process low grade oxide copper ores more cost effectively, this hasn’t previously extended to low grade sulfide ores. But new technologies allow the use of this low-capital process to leach low grade sulfide ores to produce a final product. Additionally, technologies, such as concentrate leaching, allow enriched copper concentrates to bypass smelting entirely and produce finished copper cathodes on-site.

Finding a better way

We are also helping find improvement opportunities at existing operations – helping companies do brownfield expansions of their current operations. For an asset that is already producing and already permitted, these engineering improvements might require only minor permit modifications that are far easier to obtain than a greenfield project permit.

Our plant optimization and de-bottlenecking expertise has helped a number of companies find new value in their brownfield operations. After identifying a path forward and doing the necessary capital optimization, we move to asset optimization – helping owners plan their maintenance programs and best manage their asset to optimize output.

Most visibly perhaps, from a public standpoint, we’re seeing a significant push from mining companies to reduce the carbon footprint of their operations, with electric haul trucks or electric fleets becoming more common in operations than ever before. Supply chains continue to be a challenge, with large electric transformers, for example, taking more than two years to deliver, instead of less than a year. And while interest is strong within the industry, increased electrification still depends on governments to invest in the infrastructure and electricity grids that can support this conversion.

The demand for electrification continues to grow. As countries like the US make strong commitments to reducing fossil fuel emissions through electrification, those same governments need to understand that mining is critical to meeting those goals. Our regulatory process needs to keep pace with the nations who compete with us for leadership in the industries so important to our energy future.

For more information, contact Jim Norine.