CHAPTER EIGHT
Mining goes global
DIGITAL TECHNOLOGIES, THE KNOWLEDGE ECONOMY, GREEN ENERGIES, electricity logistics and storage, and the new industries of space and defence are diversifying and expanding our need for rare metals exponentially. Not a day goes by that we don’t discover a new miracle property of a rare metal, or unprecedented ways of applying it. Indeed, our technological ambitions and dreams of a greener world are limited only by the bounds of our imagination. This means expanding our mining operations across the entire planet — and the Earth, we tell ourselves, will keep up. Contrary to speculation, there will always be that acre of mountain, that crease in a hill, or that clearing in a valley where we can extract those few aggregates of precious particles — that 20-gram hit of rare earths needed by every human on the planet every year.
After all, there is a precedent: between the end of the First World War and 2007, the annual production of fourteen of the minerals essential to the global economy increased twentyfold.1 By the end of the Second World War, consumption began to skyrocket, taking with it just about every indicator: life expectancy, consumer habits, the accumulation of wealth, the number of possessions, the quantity of electronic data movements, and global warming.
Where does that leave us for the century ahead? Will this breakneck pace simply gather momentum? If global GDP continues to grow at an annual rate of 3 per cent, as it has for the last twenty years, it will have doubled by 2041. By the time you read these lines, everything we build, consume, barter, and throw away will have doubled in less than a generation. There will be twice as many high-rises, highway interchanges, chain restaurants, industrial livestock-production farms, commercial aircraft, e-waste dumps, and data centres. There will be twice as many cars, connected objects, refrigerators, barbed-wire fences, and lightning conductors.
We are going to need twice as many rare metals.
A metals shortage ahead?
Some have put numbers on our future needs. At a symposium held at Le Bourget in 2015, on the margins of the Paris climate talks, a handful of experts presented their forecasts.2 They predicted that by 2040 we will need to mine three times more rare earths, five times more tellurium, twelve times more cobalt, and sixteen times more lithium than today. Olivier Vidal, a researcher at the French National Centre for Scientific Research (CNRS), even conducted a study of the metals we need in the medium term to sustain our high-tech lifestyles.3 His work was published in 2015 and mentioned on the BBC.4 He has given some thirty lectures in Europe, mostly to students. And it stops there.
Yet Vidal’s study should be on the bedside stand of every head of state the world over. Basing his research on the most widely accepted growth outlooks, he highlights the massive quantities of base metals we will need to extract from the subsoil to continue to fight against global warming. Take the case of wind turbines: by 2050, keeping up with market growth will take ‘3,200 million tonnes of steel, 310 million tonnes of aluminium, and 40 million tons of copper’.5 Indeed, wind turbines guzzle more raw materials than previous technologies: ‘For an equivalent installed capacity, solar and wind facilities require up to 15 times more concrete, 90 times more aluminium, and 50 times more iron, copper, and glass than fossil fuels or nuclear energy.’6 According to the World Bank, which carried out its own study in 2017, the same applies to solar and hydrogen electricity systems, which ‘are in fact significantly more material intensive in their composition than current traditional fossil-fuel-based energy supply systems’.7
The overall conclusion is aberrant. Because global metal consumption is growing at a rate of 3 to 5 per cent per year, ‘[t]o meet global needs by 2050, we will have to extract more metals from the subsoil than humanity has extracted since its origin’. This bears repeating: over the next generation, we will consume more minerals than in the last 70,000 years, or five hundred generations before us. Our 7.5 billion contemporaries will absorb more mineral resources than the 108 billion humans who have walked the Earth to date.8
Vidal admits that the study is incomplete: assessing the actual ecological footprint of the green transition requires a far more holistic approach that includes the life cycle of raw materials. It also requires measuring the staggering volumes of water consumed by the mining industry, the carbon dioxide emissions produced by the transportation, storage, and use of energy, the still little-known impact of recycling green technologies, and all the ways in which these activities pollute ecosystems — not to mention the extent of their impact on biodiversity.
‘It’s mind-boggling,’ admitted the researcher.9 And yet so few political leaders truly grasp all these aspects. Vidal maintains that in recent years he tried to alert the French minister of research: ‘I never made it past the first barriers of the lower administrative hierarchy.’ His disappointment was shared by Alain Liger, who held a symposium on rare metals during COP 21. ‘I sent a note to Ségolène Royal [the then French environment minister], Emmanuel Macron [the then French finance minister], and Laurent Fabius [the then French foreign affairs minister]. Macron’s staff called to congratulate me on the event. But I didn’t hear back from Fabius or Royal’ — the very ministers leading the climate talks.10
Clearly, scarcity is an issue. On the one hand, advocates of the energy transition are adamant that we can draw infinitely on the inexhaustible sources of energy generated by the tides, the wind, and the sun to make our green technologies work. On the other hand, rare metal hunters warn that we could soon run out of several raw materials. Just as we have a list of threatened animal and plant species, we may soon have a red list of metals nearing depletion. At the current rate of production, we run the risk of exhausting the viable reserves of fifteen or so base and rare metals in under fifty years; we can expect the same for five additional metals (including currently abundant iron) before the end of the century.11 In the short to medium term, we are also looking at potential shortages in vanadium, dysprosium, terbium, europium, and neodymium.12 Titanium and indium are also stretched, and cobalt is heading in the same direction. ‘This will be the next metal shortage,’ predicted one expert. ‘No one saw this coming, and time is running out.’13 (See Appendix 14 for the summary table of the viable reserves lifespan for the main metals needed for the energy transition.)
Will we manage to start up enough mines in the next thirty years to satisfy our appetite for metals? What if climate change drastically reduces the water reserves needed to extract and refine minerals? Will we have come up with the technology that will enable us to access poorer, less accessible, and deeper ores when the more abundant mines are depleted? Our era is often referred to as the ‘New Renaissance’: we are at the dawn of an age of unprecedented technical invention and opportunities for exploration. Yet how can we hope to reach these new frontiers if we run out of the resources we need? What if Christopher Columbus, with no wood at his disposal, hadn’t found the Pinta and the Niña caravels moored at an Andalusian port in 1492?
The energy and digital transition at stake
Diplomatic achievements, ambitious energy-transition laws, and the efforts of the most zealous environmental defenders will amount to nought without sufficient quantities of rare metals. If current data is anything to go by, the green revolution will take much longer than hoped. More importantly, it will be a green revolution led by China — one of the few countries with an adequate supply strategy — and Beijing will not go out of its way to increase its rare metals output to meet the needs of the rest of the world. Not only because its trade policy puts the West at its mercy, but also because China worries about running out of resources too quickly. The black market for rare earths, which caters for one-third of official demand, is using up mines much faster, with some reserves facing depletion from 2027.14
Containing this increase in the mining of certain rare metals is vitally important. That is why China is ready to stockpile what it produces — for itself. It already consumes three-quarters of the rare earths it extracts — despite being the sole supplier — and, given its appetite, it may well use up all of its rare earths by 2025 to 2030.15 The output of any of China’s future rare metals mines inside or outside its borders will not go to the highest bidder, but will be taken off the market and channelled to Chinese clients only. And these resources will be snapped up, irrespective of the price tag. ‘What will be left over for the rest of the world?’ asked an American expert. ‘The answer is: nothing. Absolutely nothing.’16 Beijing will focus on the interests of its green-tech businesses, and support the growth of its energy and digital transition to the detriment of other countries.
This is how China can spurn all stereotypes of being one of the most polluted countries on the planet to instead being seen as spearheading a greener world and the fight against global warming. It would be plausible for three reasons:
How much energy do we need to generate energy? The question may seem hare-brained for most of us, but it’s top-of-mind for energy players. One century ago, extracting one hundred barrels of oil required, on average, the energy supplied by one barrel of oil; today this same barrel only produces thirty-five barrels of oil in some drilling areas. Drilling technologies are more efficient, but the most accessible oilfields are now depleted, and more energy is needed to reach new and harder-to-access reserves. For non-conventional crude (shale oil and oil sands), one barrel will produce five barrels at the most. We are teetering on the absurd! Will our production model still be sound when it takes one barrel to fill another?
The same applies to rare metals, which require increasing amounts of energy to be unearthed and refined. Experts state that there are more rare-mineral deposits to be discovered than currently proven, so there is no need to worry about coming up short.24 But producing these metals takes 7 to 8 per cent of global energy.25 What if this ratio were to jump 20 to 30 per cent, or more? Ugo Bardi writes that, in Chile, ‘The energy required to mine copper rose by 50 per cent from 2001 and 2010, but the total copper output increased just 13 per cent … The US copper mining industry has also been energy hungry.’26
For the same amount of energy, mining companies today extract up to ten times less uranium than they did thirty years ago — and this is true for just about all mining resources. A deposit containing as many minerals as it did in the 1980s would today be considered a ‘diamond in the rough’ in the mining world.27 As Bardi concludes, ‘The limits to mineral extraction are not limits of quantity; they are limits of energy.’28
We are starting to see the limits of our production system; they will be reached the day we need more energy to produce the energy we need. But our instinct for conquest compels us to push the envelope to expand humankind’s domination in every nook and cranny of the globe (going as far as outer space, as we will discover).
I had to find out more. I took a train to London to peruse ancient maps in the hope that they would provide useful information to assuage our appetite for green growth.
The multiplication of mines
Awaiting me at the Geological Society of London, on the banks of the river Thames, was ‘the map that changed the world’.29 For nearly two centuries, the precious parchment has slumbered in the depths of the GSL archives. To get there, I had to walk through the stately entrance of Burlington House — an imposing building complete with a neo-Renaissance façade overlooking the Piccadilly high street. On the first floor, at the end of a threadbare carpeted staircase, there is a patio with walls lined with old books that serves as a reading room. In the light of two ageing chandeliers, archivist Caroline Lam delicately pieced together fifteen square pages, each one measuring 60 centimetres long and wide. Together they form a treasure map measuring 3 metres by 4 metres — one of the first detailed mining maps in history.
The Great Map is the work of William Smith. Over ten years in the early nineteenth century, the geologist surveyed Great Britain on foot and on horseback with the aim of describing the mineral lie of the land. The copy that is kept at the Geological Society of London is one of the first to have been printed in 1815 — the year in which the map was presented to the public. I needed a magnifying glass to make out the names on the map. Easier to identify were the colour-coded minerals that are plotted in all their diversity: chalk and sand quarries alongside limestone and marble deposits. Drawn in black are the coal seams that would make Great Britain vastly wealthy throughout the nineteenth century.
At the time William Smith published the Great Map, Great Britain was in the throes of its industrial revolution. In the mills, steam generated thermal energy and powered the spinning jennies that would significantly increase productivity. The same steam power led to the introduction of the locomotive on an increasingly dense railway network, which in turn contributed to the phenomenally swift expansion of trade and progress. But to actuate the locomotive pistons and set its wheels in motion, the steam needed to reach a temperature of close to 350 degrees Celsius. Boilers were therefore fitted with coal furnaces.
This fossil fuel soon became a highly prized resource. ‘People needed to know where the deposits were,’ said Caroline Lam as she painstakingly put away the fragments of the Great Map. With the help of Smith’s map, miners rushed to the coal seams in order to supply the fuel for Great Britain’s new energy requirements. In this respect, the Great Map well and truly transformed the world by stimulating the first industrial revolution and giving Great Britain a head start on the rest of Europe. In the Victorian age, the nation used its dominant position in coalmining to establish its industrial, technological, and military superiority, and to become the world’s superpower.
Two centuries later, we want to apply the British example to the energy and digital revolution. To secure rare metals supplies, mining maps need to be updated — a realisation brought on by the Chinese embargo that led to states, multinationals, and entrepreneurs scrambling for rare metals. This is being undertaken not only at a national scale, as in Smith’s time, but on a planetary scale: deposits of rare earths have been discovered in at least thirty-five countries on five continents. North Korea has some of the most abundant rare earths deposits in the world. In Brazil, President Jair Bolsonaro wants to accelerate the production of niobium — a metal of which Brazil already produces 90 per cent.30 In the midst of the US–China trade war, Australia is multiplying its mining projects in Western Australia because, in the words of the country’s minister of defence, Linda Reynolds, ‘It is essential we have a secure source of supply, especially given the current geopolitical headwinds.’31 Bill Gates, for his part, has even invested in KoBold Metals — a Californian start-up that promises big data solutions for new cobalt exploration campaigns.32 Mining companies have already started exploring the hundreds of rare metals deposits around the world.
The trend is anything but sound, with speculative bubbles bursting as mining companies admit that some deposits yield far less than initially announced. Like a spin of the roulette wheel, fortunes are made by the minute while small-time players lose their nest eggs overnight. Either way, the frenzy is creating geopolitical upheaval that goes against the comradely ideals displayed at the conclusion of the Paris accords.
Countries are therefore striking up new alliances for rare metals exploration: Tokyo and Delhi have concluded an export agreement for rare earths mined in India;33 Japan has deployed its rare-earth diplomacy offensive in Australia, Kazakhstan, and Vietnam; Chancellor Angela Merkel has made numerous trips to Mongolia to sign mining partnerships;34 South Korean geologists have made official their discussions with Pyongyang on the joint exploration of a deposit in North Korea;35 France is carrying out prospecting activities in Kazakhstan; Brussels has engaged in economic diplomacy to encourage mining investment with partner states;36 and in the US, Donald Trump has expressed his interest in buying Greenland — rich in iron, rare earths, and uranium.37
This ‘diplomatic hodgepodge’ of bilateral agreements to secure rare metals supplies signals the end of the bipolar world order inherited from the Cold War, and the muscling in of numerous private and state mining players to the diplomatic arena.
This scramble is upending traditional balances of power. Up until now, Northern Hemisphere countries regularly imposed reprehensible conditions on mineral-rich countries, by and large in the Southern Hemisphere. But the tables are turning: the surge in demand has resulted in a more cautious supply. ‘Given the increased competition between consumer countries, it’s less a case of the importer deciding to buy the metal than it is of the producer deciding to sell to the buyer,’ an expert explained. ‘It’s called “competitive consumption”, and it’s a concept we’re going to have to come to terms with.’38
Several waves of mining nationalism have already put importing states at the mercy of less-powerful supplier countries. Thanks to their mines, the client is no longer (always) king. The geopolitics of rare metals could also give rise to new dominant players, often from the emerging world: Chile, Peru, and Bolivia, thanks to their abundant lithium and copper reserves; India, with its rich titanium, steel, and iron reserves; Guinea and southern Africa, whose subsoils are packed with bauxite, chromium, manganese, and platinum; Brazil, with its abundant bauxite and iron; and New Caledonia, which boasts generous nickel deposits.39
The energy and digital transition is sending humanity on a quest for rare metals, and is doomed to aggravate divergence and dissent. Rather than abate the geopolitics of energy, it will compound them.40 It is a new world that China wants to fashion to its liking, as corroborated by Vivian Wu: ‘Given the growth of our domestic demand, we will not be able to meet our own needs within the next five years.’ Beijing has therefore begun its own hunt for rare metals, starting in Canada, Australia, Kyrgyzstan, Peru, and Vietnam.41
The most prized location of all is Africa, and in particular South Africa, Burundi, Madagascar, and Angola. The former Angolan president José Eduardo dos Santos made rare earths a priority of his mining development strategy to meet Beijing’s needs and burnish Angolan–Chinese diplomatic ties.42 In the Democratic Republic of Congo, China has built a railway line to open up access to the cobalt-rich southern region of Katanga.43
The multiplication of mines should spell the end of China’s monopoly on rare earths. Is Beijing ready for this sacrifice? Yes and no. The Communist Party wants to have its cake and eat it, too: it wants to alleviate the mining burden while safeguarding its hegemony over the strategic minerals market. And this takes cunning.
From London to Toronto, and Singapore to Johannesburg, not a single conference on rare metals goes by without the same question cropping up, monopolising all discussions: ‘What is China playing at?’ Indeed, the day after the 2010 embargo, rare-earth prices soared to record highs before taking a nosedive — but for no apparent reason, for supply was just as strong as demand.44 Many observers believe that Beijing was manipulating prices. ‘The Chinese do absolutely whatever they want on the rare-earths market,’ deplored Christopher Ecclestone.45 They can decide to stockpile just as they can decide to slash prices by flooding the market. It has become a headache for non-Chinese mining companies to design long-term economic models with a behemoth like China intentionally destabilising the market. How can they escape bankruptcy when mineral prices are five to ten times lower than forecasted?
The vast majority of alternative projects that emerged after the embargo have been scuppered. The Californian mine Molycorp went bankrupt and reopened, but then had to export its minerals to China for processing due to a lack of adequate refinery facilities.46 The Lynas mine in Australia has long been running at a reduced speed, and is being kept afloat by Japan out of its refusal to eat from the hand of its sworn enemy. In Canada, entire battalions of mining companies have shut their doors. Mining licences — once worth their weight in gold — now go for no more than a few hundred dollars.
‘The Chinese strategy is not to kill off these projects, but to make them stagnate,’ explained Chris Ecclestone. ‘Beijing waits, and then makes off with all these mineral deposits for next to nothing.’47 Once again, while Beijing thinks long-term, Western countries are trapped in short-term logic. The allure of wealth — the catalyst of the mining revival — will not withstand China’s chicanery. While the key to sustaining capitalism may very well be rare earths, we would need to mine them in a way that defies logic. The question is whether we can learn from our mistakes.
When China is not undermining the capitalistic foundations of alternative mines, it takes diplomatic action to torpedo them. Such is the case of Kyrgyzstan: the chairman of Stans Energy accused China of putting pressure on the Kyrgyz president to withdraw the Canadian mining house’s operating licence without any valid reason.48 When Beijing doesn’t manage to hamper operations, it deploys a strategy of acquiring competing mines. Despite the Chinalco group expressing interest in buying the Mountain Pass mine in California, it was acquired in 2017 by MP Mine Operations LLC — a consortium whose investors include a Chinese mining group, Shenge Resources Shareholding Co. Ltd.49 China also barges its way into the partial ownership of competing companies: in Greenland, the same group acquired a sizeable stake in the operations of the Kvanefjeld site, rich in rare earths and uranium. What better way to build up economic intelligence and possibly undermine the emergence of a serious rival?
With its mining-expansion strategy, the Middle Kingdom is working towards a bold objective: to abandon the mining monopolies built on domestic mineral resources in favour of a new dominant position, by controlling the production of a bounty of rare metals across the planet. It’s as if Saudi Arabia, which holds the largest proven reserves of oil worldwide, took it upon itself to control the oil reserves of the now thirteen members of OPEC.
China’s hegemony over rare metals could continue to grow as the share of renewable energies in our energy mix grows. That is, unless Western countries take a stand and commit to the battle of the mines.