The mantra? Our fossil-fueled based transportation system needs to be 100% electrified, and the switch must be made from oil, gas, and coal-powered power plants to those which run on solar, wind and nuclear energy. If we have any hope of cleaning up the planet, before the point of no return, a massive decarbonization needs to take place.
Done improperly, mineral extraction has the potential to damage local communities and ecosystems, destroying cultures and biodiversity in the process. And China has been a very willing player having invested heavily in Indonesia, building smelters and using their technology to produce battery-grade nickel cheaply, though at a horrendous cost to the environment.
Nickel laterite deposits — the principal ore minerals are nickeliferous limonite O and garnierite — are formed from the weathering of ultramafic rocks and are usually operated as open pit mines. There is no simple separation technique for nickel laterites. The rock must be completely molten or dissolved to enable nickel extraction.
Counter-current decantation is used to separate the solids and liquids. Separating and purifying the nickel/cobalt solution is done by solvent extraction and electrowinning. Traditionally, processing nickel laterite deposits was more expensive than sulfides, but China has changed the game. As Bloomberg reported recently,
Its Obi Island operation is one of three producing HPAL operations, with nearly $20 billion of further projects announced. Bloomberg says Harita presses the water out of its waste slurry then stacks the dry soil in former mine sites , but there’s not enough space. The company proposes building a tailings dam but that comes with its own set of problems, including leakage.
“The exponential growth in this Sino-Indonesian trade reflects the continuing boom in Indonesian production that followed the country’s ban on exports of unprocessed ore,” writes Reuters metals columnist Andy Home. Indonesia recently warned struggling producers not to expect any meaningful price revival. The government official overseeing the nickel boom prices are unlikely to rise above $18,000 a tonne, and that the country will ensure the market remains well supplied to keep costs lower for electric-vehicle manufacturers.
The Inflation Reduction Act aims to grant incentives to companies that source their battery materials within the US and outside of China. “Indonesia is a producer and holder of the world’s biggest nickel reserves amounting to 21 million metric tons, so Indonesia can become a supplier for … batteries and EVs in the US,” said Indonesian President Joko Widodo.
BHP has now developed a similar scale sister deposit — Yakabindie, and year, acquired the Honeymoon Well deposit. While many investors are familiar with high-grade nickel discoveries in Western Australia, and Sudbury – it is important to note that We are now looking at north of $35 per pound capital intensity as we move into these multibillion-dollar ferronickel and HPAL projects.
The ecological risks of rare earth mining aren’t confined to China, which mines and processes most of the materials. Most of four HPAL plants currently under construction, led by Chinese stainless-steel producers and battery makers, plan to continue the environmentally egregious practice of Deep Sea Tailings , due to the much higher cost of managing the tailings on land.
Rare earths mining and processing in China, the extraction and refining of laterite nickel in Indonesia, and cobalt mining in the Congo, are three good examples of the disconnect between the rhetoric being delivered lately regarding the so-called new green economy, and reality. China has invested tens of billion into Indonesia, building smelters and using their technology to dominate the nickel market. In this way, it’s no different from the choke hold China has put on cobalt — mined in the DRC then sent to China for processing — rare earths, steel, copper etc.
In my opinion there also needs to be an attitude change, about how North American governments feel about mining and refining. One solution to ending the China/Indonesia nexus for nickel, or the China/DRC nexus for cobalt, is to explore for and develop mineral deposits here. Currently we have kind of a “plantation mentality” — we want the dirty mining to happen somewhere else, and we want the value-added upstream part of the supply chain to happen here.