Renewable energy and the future of mining
The climbing cost of fossil fuels and other pressures will increasingly encourage miners to rely more heavily on renewables for their energy-hungry operations, the inaugural Future Energy and Finance conference heard today.
Speaking as part of the precursor to the International Mining and Resources Conference (IMARC), Sunshine For Mines Operations Lead Alastaire Dick said the time was right for renewables to contribute a greater amount to mines’ energy needs.
“The change nexus is here. With climate change, public policies, carbon pricing and other pressures on the mining industry, miners need to think differently,” he said.
“For the average mine, 22% of the operational spend is spent on energy. Think about what shaving one or two per cent off that energy cost would do to your bottom line.”
While miners could be “a slow moving bunch” when it came to adopting change, Mr Dick said the shift to renewable energy was well underway and showed no signs of slowing.
“We’ve got to help overcome the cultural barriers and mindsets. We’ve got to think about future generations and be that legacy today,” he said.
Apart from reducing energy costs, Mr Dick said the industry also had the opportunity to deliver shared value and reinforce their social licence to operate by embracing renewables.
Other speakers today explored the future of global energy and the implications for financing and investing in energy, along with new technology to increase generation, efficiency and storage.
More than 2,500 mining leaders, policy makers, financiers and other experts from more than 57 countries have converged in Melbourne for IMARC, Australia’s largest international mining and resources event.
IMARC runs until Thursday 10 November 2016 and will cover all aspects of mining, from exploration, investment and production through to optimisation, technology, health and safety, policy and governance. Decision makers from over 150 mining companies will be in attendance to learn from more than 160 international experts.
The November issue of Mining Global Magazine is live!
Get in touch with our editor Dale Benton at [email protected]
Copper, iron ore surge as Chinese investors unleash demand
The reopening of major industrial economies is sparking a surge across commodities markets from corn to lumber, with tin climbing above $30,000 a tonne for the first time since 2011 on Thursday.
In the wake of mounting evidence of inflation fuelled by higher raw materials prices, investors are also increasingly focused on when the U.S. Federal Reserve might start throttling back its emergency support.
Many banks say the rally has further to run, particularly for copper, which will benefit from rising investment in new energy sectors. Copper is at the highest in a decade, fueling bets it will rally further to take out the record set in February 2011. Steel demand is surging as economies chart a path back to growth just as the world’s biggest miners have been hampered by operational issues, tightening ore supply.
“The long-term prospects for metals prices are ‘too good’ and point to higher prices in the next few years,” said Commerzbank AG analyst Daniel Briesemann. “The decarbonization trends in many countries, which include switching to electric vehicles and expanding wind and solar power, are likely to generate additional demand for metals.”
Trading house Trafigura Group and several major Wall Street banks including Goldman Sachs Group Inc. and Bank of America Corp. expect copper to extend gains.
Copper rose as much as 1.6% to $10,108.50 a ton on the London Metal Exchange before trading at $10,080 as of 4:07 p.m. in London.
Benchmark spot iron ore prices rose to a record, while futures in Singapore and China climbed.
The boom comes as China’s steelmakers keep output rates above 1 billion tons a year, despite a swath of production curbs aimed at reducing carbon emissions and reining in supply. Instead, those measures have boosted steel prices and profitability at mills, allowing them to better accommodate higher iron ore costs.
Spot iron ore with 62% content hit $201.15 a ton on Thursday, according to Mysteel. Futures in Singapore jumped as much as 5.1% to $196.40 a ton, the highest since contracts were launched in 2013. In Dalian, prices closed 8.8% higher.
Erik Hedborg, Principal Analyst, Steel at CRU Group commented: “Recent production cuts in Tangshan have boosted demand for higher-quality ore and prompted mills to build iron ore inventories as their margins are on the rise. Iron ore producers are enjoying exceptionally high margins as well, around two thirds of seaborne supply only require prices of $50 /dmt to break even.”
Still, some analysts including Commerzbank’s Briesemann expect a short-term correction as metals become detached from fundamentals. There’s also a risk that China could engage in policies that may cool demand for iron ore and copper.
The metals rally has boosted concerns about short-term Chinese demand. Some manufacturers and end-users have been slowing production or pushing back delivery times after costs surged, while weaker-than-expected domestic consumption has opened the arbitrage window for exports.
Tin climbed as much as 2% to $30,280 a ton on the LME, boosted by rising orders for the soldering metal. Tin is at the highest since May 2011, with a 48% gain this year making it the best performing metal on the LME.