The smart metals required by electric vehicles, second generation wind turbines and other clean technologies cannot be downloaded from the iTunes Store. Dysprosium and neodymium have to be extracted from the earths’ crust by mining companies. You may have already known this. My teenage green-minded god-daughter did not. Berating me for my work with the mining industry, she wanted to know how a clean-tech advisor could possibly be dirtying his hands in the extractive industries. I explained.
Try building a solar panel without copper, zinc, indium or gallium. Try developing new battery technology without lithium, nickel or other metals. It is difficult. To misquote Madonna, “we [clean-techies] live in a material world’. The clean tech cake cannot be baked without ingredients provided by the mining industry. I would argue clean-tech embrace mining and try to make it better and more efficient. Particularly since the number of clean deals in the mining industry is set to grow rapidly, albeit from a small base.
“Decreasing margins in mining are the biggest driver of new clean technology innovation,” says Dallas Kachan, MD of the Vancouver-based clean-tech consultancy, Kachan & Co, which has just published an excellent new report on ‘Emerging Green Mining Innovation’.
He adds: “New lower power separation can reduce the amount of power needed. Electric vehicles can reduce the amount of diesel needed and the power needed to ventilate a mine. Water filtration and recycling can help make tailings more benign and more easily disposed of, which can shave millions off mine closure and remediation costs and potentially even speed up the permitting process to begin with.”
So clean-tech appeals to the mining industry where it reduces costs and accelerates regulatory approval. Last month French energy giant Total announced plans to finance, with partners, the construction of a 70MW solar power plant in Chile, where the energy-hungry copper mining industry keeps prices high enough to make solar competitive with, or even cheaper than, hydrocarbons. Miners are also driving the market for high efficiency seawater desalination in Chile and other resource-rich economies.
But backing new technology innovation – corporate venturing proper rather than ‘just’ buying clean power – is beginning slowly.
In 2011 the venturing units of Canadian mining companies Cenovus and Teck Resources co-invested in Saltworks, a Vancouver-based high efficiency desalination company. Cenovus is developing an intriguing clean-tech portfolio, which includes the most risky of next generation energy technologies: nuclear fusion. CESL, Teck’s internal incubator-cum-venturer, is commercialising hydrometallurgical innovation, which can reduce both costs and environmental impact, while potentially also making it easier to get refinery permits. Currently, one CESL process is commercially deployed at a 10,000 tonne per year copper plant in Brazil operated by mining corporation Vale. CESL hopes the plant will be the first of many.
Among the forty seven “leading emerging technology companies” cited in the Kachan report is Magpie Polymers, a French start-up whose resin pellets can extract from industrial waste waters the same smart metals required in several clean-tech applications. Magpie is reported to be planning a B round in 2014. Might mining corporate venturers be among its investors?
Kachan says: “Mining is one of the last holdouts of old, dirty industry that has yet to be revolutionised by clean-tech. After hundreds of years of employing essentially the same techniques, they are only now exploring the opportunity that new disruptive technology could have on their bottom lines, driven by shrinking margins and increased regulatory burdens. So it’s no surprise that mining companies are not yet known for corporate venturing. But watch for them to start, soon.”