Miners in a fix over climate change
Published by MAC on 2006-09-16
Miners in a fix over climate change
16th September 2006
While their operations contribute significantly to global greenhouse gas emissions, mining companies themselves also face mounting risks - and costs - from the impacts of climate change. Not surprisingly the industry identifies open-pit mining and tailings dams as especially vulnerable to heavier storms. However, instead of significantly moving away from large open-cast operations, companies are turning to "hedging" (such as weather based derivates), and vesting their hopes in new technical fixes to reduce the CO2 burden that mineral processing imposes on our planet.
Just last week, scientists at the Massachussetts Institute of Technology (MIT) claim to have developed a CO2 "free" electrolysis process, presaging the production of iron as a "carbon-free material" to replace aluminium, which requires vast amounts of electrical power. MIT also says the new process will deliver "productivities" between five and ten times higher than aluminium.
The automotive industry has substantially increased its use of aluminium (by fifty per cent between 2000 and 2005) as a substitute for steel, largely in response to demands for lighter vehicles in order to reduce petrol consumption. Meanwhile precious little is said about the social and environmental toll from bauxite mining, alumina refining and aluminium smelting - the biggest industrial consumer of electricity, apart from uranium enrichment.
With the sights of aluminium companies firmly fixed on record profits as more "hybrid" automobiles are marketed, they will energtically fight their corner against any attempt by steel manufacturers to muscle back into the transport sector. No doubt we will see a debate similar to (though not identical with) that surrounding the promotion of nuclear power.
Uranium-burning in power plants is also widely touted as making virtually no contribution to global greenhouse gas emissions. But opponents claim that the construction of these massive edifices and of the mines which serve them carry their own high carbon costs. (Not to mention the dangers from radiation at the extraction or waste disposal stages.)
Iron and steel are recycled and re-used in largr quantities than alumininum; arguably its mining is less environmentally damaging than that of bauxite. Certainly the demand for electricity used in steel manufacure is proportionately far less than that for the so-called "green metal".
As for the MIT dream that steel can shed its dirty image and become "carbon free", many caveats must be entered at this stage: not least that new technical fixes for the problems associated with the minerals industry rarely, if ever, fulfil promises made by their advocates. Also, in this case the research was sponsored by a US agency whose goal is to increase the global competitiveness of US steel . [Comment by Nostromo Research, London, September 15 2006]
ANALYSIS - Climate Change Poses Disaster Scenario for Miners
PlanetArk UK
14th September 2006
LONDON - Flooded railway lines and storms destroying open-pit mines are among the challenges mining firms will face in the future as climate change grips the planet.
Scientists say the build-up of greenhouse heat-trapping gases (GHG) will bring more droughts, heat waves and powerful storms. It also will speed the spread of deserts and could raise sea levels by almost a metre by 2100.
"Undoubtedly miners are being financially and physically affected by climate change," said Rob Lake, responsible for investments in the mining sector at Henderson Global Investors, managing around 63 billion pounds (US$118 billion).
He said interruptions to production from floodings of railway lines and storms destroying open pit mines would be more frequent in the future.
"There is a challenge in the planning and to capital costs of some of their projects," Lake said, adding that how industry responds could affect future success in attracting investment.
Carbon dioxide (CO2) is the main gas released by burning fossil fuels in power plants, factories and cars. It is seen as the main cause of global warming.
Global emissions of CO2 look likely to increase and may hit 43.7 billion tonnes in 2030, up from 25 billion tonnes in 2003, the Energy Information Administration said in an annual review.
Laurel Green, Group Climate Change Executive at Rio Tinto the second largest diversified miner, expected the weather to become more extreme in future. She said Rio was working hard to understand its impact on the firm.
"We operate projects that are supposed to last 30-50 years and in order to stay in business we have to make sure our operations will last that period of time," she said.
The company was developing "low emissions pathways" for its products to reduce the intensity of GHG emissions in its coal combustion, metals smelting and electricity operations.
"It is very hard to say or forecast the costs this has for our business," Green said.
WEATHER DERIVATIVES GROW
Traders in weather derivatives say they've seen a surge in interest from mining companies to hedge against extreme weather.
"Floodings and storms are the main risks for the mining industry," Alex Schippers, Global Head of Weather and Insurance Derivatives at ABN Amro in Amsterdam, said.
The interest from the mining sector is rising as it faces large risks, such as floodings of tailing dams, he said.
Monitoring climate change, the Northern Alaska Environmental Center's Executive Director David van den Berg said Alaskan diamond miners faced transportation troubles, as engineers have not factored in the rapid increase in temperatures.
When a road is built over permafrost, thawing affects the stability of the gravel, making the road less safe, he said.
MINERS MUST SAVE ENERGY
Miners contribute to GHGs emissions by consuming large quantities of oil, gas and coal in their production processes.
Energy on average may account for up to one-quarter of total processing costs.
In the making of primary aluminium, energy can be as high as one-third of the total production cost, Patrick Atkins, Director of Technology Innovating Energy at the world's top aluminium producer Alcoa said.
In 2005, 75 percent of Rio Tinto's 27 million tonnes of CO2 equivalent emissions derived from its energy use.
For Lehman Brother's newly launched Socially Responsive Fund, energy efficiency is a top theme.
"Companies that offer energy efficient products and have integrated energy efficiency into their manufacturing process... will have a financial advantage," Ingrid Dott, managing director of the US$1 billion fund, said.
In the short term, energy efficiency could reduce costs, but in the longer term costlier measures are necessary.
"Greater cost efficiency would mean greater energy efficiency, which should mean lower GHG emissions," research director John Meyer at Numis Securities said.
But eventually it is necessary to develop more complex fixes, such as anode technologies reducing CO2 gas emissions from light metal processing, Green said.
Story by Anna Stablum
REUTERS NEWS SERVICE
New MIT Technique Eliminates Greenhouse Gases from Iron Production
13 September 2006
MIT engineers have demonstrated an eco-friendly way to make iron that eliminates the greenhouse gases usually associated with its production.
The American Iron and Steel Institute (AISI) announced recently that the team, led by Donald R. Sadoway of the Department of Materials Science and Engineering, has shown the technical viability of producing iron by molten oxide electrolysis (MOE).
"What sets molten oxide electrolysis apart from other metal-producing technologies is that it is totally carbon-free and hence generates no carbon dioxide gases -- only oxygen," said Lawrence W. Kavanagh, AISI vice president of manufacturing and technology.
The work was funded by the AISI/Department of Energy Technology Roadmap Program (TRP). The TRP goal is to increase the competitiveness of the U.S. steel industry while saving energy and enhancing the environment.
According to the AISI, the MIT work "marks one of TRP's breakthrough projects toward meeting that goal."
Unlike other iron-making processes, MOE works by passing an electric current through a liquid solution of iron oxide. The iron oxide then breaks down into liquid iron and oxygen gas, allowing oxygen to be the main byproduct of the process.
Electrolysis itself is nothing new -- all of the world's aluminum is produced this way. And that is one advantage of the new process: It is based on a technology that metallurgists are already familiar with. Unlike aluminum smelting, however, MOE is carbon-free.
"What's different this time is that we have the resources to take the time to unravel the underlying basic science," said Sadoway, the John F. Elliott Professor of Materials Chemistry. "No one has ever studied the fundamental electrochemistry of a process operating at 1600:C. We're doing voltammetry at white heat!"
The result? "I now can confirm that in molten oxide electrolysis we'll see iron productivities at least five times that of aluminum, maybe as high as 10 times. This changes everything when it comes to assessing technical viability at the industrial scale."
MIT will continue further experiments to determine how to increase the rate of iron production and to discover new materials capable of extending the life of certain reactor components to industrially practical limits.
This work will set the stage for construction of a pilot-scale cell to further validate the viability of the MOE process and identify scale-up parameters.
Cambio climático plantea complejo escenario en minería
Miércoles 13 de September, 2006
Por Anna Stablum
LONDRES (Reuters) - Las inundaciones en las vías férreas y las tormentas que están destruyendo las minas a cielo abierto son algunos de los desafíos que las compañías mineras enfrentarán en el futuro por el cambio climático en el planeta.
Los científicos sostienen que el aumento de los proyectos de captura de gases con efecto invernadero (GHG por su sigla en inglés) provocará mayores sequías, olas de calor y fuertes tormentas. También acelerará la ampliación de las zonas desérticas y podría elevar los niveles del mar en casi un metro para el 2100.
"Indudablemente los mineros están siendo afectados financiera y físicamente debido al cambio climático," precisó Rob Lake, encargado de inversiones en el sector minero de la firma Henderson Global Investors, que administra alrededor de 63.000 millones de libras esterlinas (118.000 millones de dólares).
El consultado aseguró que las interrupciones en la producción a causa de las inundaciones en las vías ferroviarias y las tormentas que destruyen la minas a cielo abierto serían más frecuentes en el futuro.
Los mineros contribuyen con las emisiones de GHG al consumir grandes cantidades de crudo, gas y carbón en sus procesos de producción.
"Existe un desafío en la planificación y en los costos de algunos de sus proyectos," detalló Lake, al agregar que la manera en que responda la industria podría afectar el futuro éxito en la atracción de la inversión.
El dióxido de carbono (CO2) es el principal gas liberado por los combustibles fósiles en las plantas de energía, fábricas y vehículos y es considerado una de las causas principales del calentamiento global.
Las emisiones mundiales de CO2 seguramente aumentarán y podrían alcanzar 43.700 millones de toneladas en el 2030, por encima de las 25.000 millones de toneladas en el 2003, informó la Administración de Información de Energía estadounidense en un reporte anual.
Laurel Green, ejecutiva de la división de cambio climático de Río Tinto, la segunda mayor compañía minera del mundo, espera que el clima sea más extremo en el futuro. Green agregó que la firma está trabajando fuertemente para comprender el impacto climático en las operaciones de la empresa.
"Operamos proyectos que supuestamente deben durar entre 30 y 50 años, y a fin de permanecer en el negocio debemos asegurar que nuestras operaciones demoren ese período de tiempo," explicó.
La compañía se encontraba desarrollando alternativas para reducir la intensidad de las emisiones GHG en la combustión de carbón, fundición de metales y operaciones eléctricas.
"Es muy difícil decir o predecir los costos de esto en nuestro negocio," agregó Green.