Increasing the share of electricity produced by wind and solar, and the trend to electric cars, will put considerable pressure on the mining industry. Already, according to the International Energy Agency, mining alone accounts for around 10% of the world’s energy consumption. This does not include energy consumed in processing and refining ore, materials transport and indirect costs such as manufacture of mining equipment. The total could be well over 20% of total energy consumption.

Should current trends in solar, wind and electric vehicles continue, that total will get a lot higher. This will also put pressure on the supply and price of various metals and materials.

Take the case of copper. Average mined grade has decreased by 25% over the past 10 years. During the same period energy use increased by 46%. This divergence is because at lower grades more energy needs to be used to produce the same amount of metal. Increasing energy consumption is only going to accelerate with widespread adoption of electric vehicles and renewable energy.

An internal combustion vehicle uses around 15Kg of copper, compared with around 80Kg for an electric vehicle. Copper is also a significant component of wind turbines, solar panels and energy storage. Should the uptake of electric vehicles and renewable energy be as rapid as some predict, the demand for copper will increase dramatically.

The situation among other metals is even more extreme. The following is a partial list of materials used in renewable energy and electric cars.

 

Arsenic

Bauxite

Boron

Cadmium

Cobalt

Copper

Dysprosium

Gallium

Indium

Lithium

Molybdenum

Nickel

Neodymium

Phosphorous

Selenium

Silica

Tellurium

Titanium Dioxide

All of these metals and minerals have to be mined, processed and refined. Already this consumes vast amounts of energy and water. Not to mention the associated pollution.

The Irony

On the assumption that use of wind and solar power will continue to increase, and we will all be driving electric vehicles, the increase in energy consumption (and pollution) will be substantial. There is a belief by proponents of these technologies that ultimately, we won’t need fossil fuels. But this is because all the inputs into production are not included in costing the various processes. For example, the cost of building and operating a dump truck to mine copper is ignored. The cost of recycling lithium ion batteries is ignored.

It is more likely that our dependence upon fossil fuels will continue or increase. In fact, these technologies may even be counterproductive. For example, about half of a barrel of oil is gasoline used in internal combustion engines. How will this be disposed of when there is no demand? And how expensive will lubricants and aviation fuel become?

In my opinion these technologies will not live up to the hype. But that does not mean avoiding investment in cobalt plays and the like. Go for it, the hype has a long way to run.

11 January 2018 Commodities