Canadian Mining Journal January 2020

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CANADIANMINING

JANUARY 2020 VOL. 141, NO. 1

JOURNAL

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CANADIAN MINING JOURNAL

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A message from the Association of Mineral Exploration (AME BC).

Six development projects that will help power the future.

BATTERY METALS AND MINERALS 22

An interview with Andrew Miller of Benchmark Minerals on the tipping point ahead for EVs.

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Suppliers bring on new BEV options for miners.

The role of cobalt in the global battery sector and a ‘just’ energy transition.

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DEPARTMENTS 4 EDITORIAL | The cobalt conundrum.

5 LAW | Sharon Singh of Bennett Jones outlines recent changes to mining policy in B.C., including the province’s Bill 41 and the federal Impact Assessment Act. 6 CSR & MINING | Jane Church and Carolyn Burns discuss NetPositive’s findings on successful partnerships between mining companies, communities and other stakeholders.

8 FIRST NATIONS | Chad Norman Day, president of the Tahltan Central Government in B.C., and Kendra Johnston, president and CEO of AME BC, on why B.C.’s Bill 41 represents progress for First Nations and miners.

9 FAST NEWS | Updates from across the mining ecosystem.

34 UNEARTHING TRENDS | EY’s Michael Gilbert on why miners need to start planning for the migration to the next generation of SAP products.

www.canadianminingjournal.com JANUARY 2020

ABOUT THE COVER

This month’s cover by Barb Burrows.

Cover image: zentilia, istockimages.com

Coming in February Canadian Mining Journal looks at mining in Ontario, with feature reports on Drilling and the Sudbury/North Bay mining innovation cluster.

For More Information

Please visit www.canadianminingjournal.com for regular updates on what’s happening with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com

CANADIAN MINING JOURNAL |

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FROM THE EDITOR JANUARY 2020 Vol. 141 – No. 1

CANADIANMINING The cobalt conundrum Alisha Hiyate

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ust as miners are beginning to ramp up their focus on the climate impact of their operations, part of the solution to reducing greenhouse gas (GHG) emissions is being called out for its heavy human impacts.

In mid-December at press time, a lawsuit was filed in Washington, D.C., targeting a number of tech giants for their use of cobalt and their failure to ensure that child labour is not used in their supply chains.

Two big challenges collide in this story.

Cobalt is needed for the battery technologies the world needs to reduce the GHG emissions warming the globe. But the world’s main source of cobalt is the Democratic Republic of the Congo (DRC), where child labour is entrenched in artisanal mining.

Filed by non-profit group International Rights Advocates on behalf of 14 families of children killed or maimed in the DRC’s cobalt mining industry, the lawsuit accuses tech giants Apple, Alphabet (Google’s parent company), Microsoft, Dell and Tesla of “knowingly benefiting from and providing substantial support” to the artisanal mining system in the DRC, knowing that is dependent on child labour.

The complaint paints a devastating portrait of poverty and exploitation, detailing the stories of children who lost limbs or their lives in mining accidents. Many of them worked as miners because their families could no longer afford the $6-per-month fees to send them to school.

According to a report by the World Economic Forum and Global Battery Alliance published in September 2019, 15- 30% of the DRC’s cobalt supply is extracted by hand using basic tools in artisanal mines. These mines are often informal and basic human rights are ignored. Work is done in dangerous conditions, for example in tunnels without proper supports that are prone to collapsing.

Amnesty International, in 2016, estimated that 20% of the DRC’s cobalt was mined by children.

So what are industry’s responsibilities when sourcing materials from a nation like the DRC, where poverty and corruption are endemic? Is it even possible to operate ethically in such circumstances?

Glencore and Eurasian Minerals Group, two major companies operating in DRC’s cobalt sector in addition to state-owned and Chinese-owned companies, have both attracted the attention of the UK’s Serious Fraud Office, underlining those questions.

Glencore is also being investigated by U.S. authorities and its Katanga Mining subsidiary has been fined $30 million by Canadian regulators.

In November, the Organisation for Economic Co-operation and Economic Development (OECD) provided guidance on responsible sourcing of cobalt and copper minerals from the DRC in its Interconnected supply chains report. The guidance to the DRC government, companies operating in the DRC and other stakeholders, includes an increased focus on corruption, money laundering and tax evasion risks, as well as strengthened engagement with the artisanal mining sector.

While climate change requires urgent action, this lawsuit – regardless of the outcome – adds urgency to the desperate situation of the poorest in the DRC, who can’t CMJ be forgotten in the global rush to adopt battery technology.

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225 Duncan Mill Rd. Suite 320, Toronto, Ontario M3B 3K9 JOURNAL Tel. (416) 510-6789 Fax (416) 510-5138 www.canadianminingjournal.com Editor-in-Chief Alisha Hiyate 416-510-6742 ahiyate@canadianminingjournal.com Twitter: @Cdn_Mining_Jrnl

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News Editor Magda Gardner CANADIAN MINING JOURNAL mgardner@canadianminingjournal.com Production Manager Jessica Jubb jjubb@glacierbizinfo.com Art Director Barbara Burrows Advisory Board David Brown (Golder Associates) Michael Fox (Indigenous Community Engagement) Scott Hayne (Redpath Canada) Anthony Moreau (Iamgold) Gary Poxleitner (SRK) Manager of Product Distribution Jackie Dupuis 403-209-3507 jdupuis@glacierrig.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Sales, Western Canada George Agelopoulos 416-510-5104 gagelopoulos@northernminer.com Toll Free Canada & U.S.A.: 1-888-502-3456 ext 2 or 43734 Circulation Toll Free Canada & U.S.A.: 1-800-387-2446 ext 3505 Group Publisher Anthony Vaccaro Established 1882

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LAW

BC mining policy in 2020: Times have officially changed

By Sharon Singh

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broad range of regulatory reforms have been introduced over the past two years by the (now) minority Liberal federal government and British Columbia’s New Democratic Party and Green Party alliance. These include a revitalized Environmental Assessment Act (British Columbia), Bill 41 (Declaration on the Rights of Indigenous Peoples Act), and the federal Impact Assessment Act. In 2020, the mining industry will see the rapid implementation of these sweeping changes. Although the new processes remain untested and many details remain outstanding, the goal posts continue to shift. Here’s what these reforms and the policy trends they create mean for mining companies.

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Implementing and interpreting UNDRIP With Bill 41, British Columbia “affirms” the application of the United Nations Declaration on the Rights of Indigenous Peoples, and commits to harmonizing existing provincial laws with the individual and collective Indigenous rights proclaimed by the Declaration. The federal government has also committed to legislating the Declaration’s implementation.

Bill 41 leaves the details as to how the government will meet the bill’s stated goals to be worked out in the future. The government acknowledges that “changes won’t happen overnight” and that the implementation of the Declaration “will be a gradual, step-by-step process over time.” As such, substantial work remains, including consultation with Indigenous and non-Indigenous people, and also with the federal government on how to give meaning and effect to the Declaration.

In the interim, the current status quo of a growing number of Indigenous communities advancing self-government and consent-rights will continue. Indigenous communities and others will undoubtedly have opportunities to test the limits of the Bill.

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Testing the assessment processes The first batch of projects, including the Haisla Nation owned Cedar LNG, will proceed under both the Impact Assessment Act and the provincial Environmental Assessment Act. The new regimes are ambitious. The interpretations of key concepts will be tested, including: • broader assessment factors; • utilization of regional and strategic assessments in cumulative impact assessments; • influence of advisory committees; and • enhanced Indigenous and public participation.

In B.C., we await the finalization of two key regulations – JANUARY 2020

Alternative Dispute Resolution and Indigenous Capacity Funding. The Alternative Dispute Resolution regulation will address how Indigenous Nations will resolve disputes when consensus cannot be achieved with or amongst the Nations at a particular stage of the provincial environmental assessment process. The province, for its part, continues to draft detailed policy guidance and FAQs to help navigate the process.

Nonetheless, until a critical mass of projects proceeds through these processes, public confidence is unlikely to increase nor will project proponents not obtain greater certainty. This is not a criticism; rather it is the reality of change which is compounded by increased expectations around greater public participation in the assessment process.

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Increasing reclamation security As the provincial government formalizes its risk management framework for mine security, it will likely lead to increased reclamation security requirements for mineral exploration and development.

Given the government’s other policy commitments, there is a potential for climate change or adaptation costs to become factors in the reclamation security calculation. The BC First Nations Energy and Mining Council has called for the province to collect mining reclamation costs in full and up front. While the province must address the financial risk to taxpayers from any shortfall between the estimated reclamation costs of a mine and the security held by government, it must also ensure that the cost of entry is not prohibitive to deter mining or exploration all together. Levers such as progressive reclamation and return of related security are some balancing tools that can assist.

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Rapidly shifting goal posts Many in the industry have been practicing early engagement on project planning, seeking Indigenous consent, and regularly reviewing and updating reclamation contingencies. While the British Columbia regulatory landscape is shifting in line with expected trends, what has changed is the rapidly shifting goal posts on what constitutes best practices.

The result is that the government must obtain the broad support to balance economic development, promote and respect Indigenous rights and address climate change – or mining capital will shift to another jurisdiction. Effectively managing change is harder than making the change.

CMJ SHARON SINGH is an associate at Bennett Jones LLP, based in Vancouver.

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CSR & MINING

Collaboration and partnership in the mining context

By Carolyn Burns and Jane Church

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ining is a catalyst that brings together people from many different stakeholder groups including local communities (who also may be rightsholders) and all the sub-groups that make up local communities; different levels of government; companies; civil society organizations and NGOs. An approach to mining that supports sustained positive outcomes is not possible without collaboration and partnership.

It is not enough that stakeholders are willing to work together – they must put that willingness into practice. True partnership and collaboration means being honest, working together to make decisions, having the time to build trust and relationships, addressing power imbalances, and holding each other accountable. Since 2017, we have interviewed over 150 people from different stakeholder groups involved in mining activity globally to ask what collaboration and partnership means to them. Here is what we learned:

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Engage with each other as early as possible. It is best to engage from the beginning, but it’s never too late to open up the channels of communication. Each stakeholder group has a role to play in engagement. Local and regional governments can facilitate discussions in the early days of prospecting. Companies must do their homework to understand who are the stakeholders and rightsholders. Communities can use tools like engagement protocols to be clear about how a relationship with the community should proceed. NGOs and civil society organizations should leverage their local presence and connections to act as conveners and host brokers, to connect with companies that work in the communities they serve.

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Make time and share the information required to plan, make decisions, and take advantage of economic opportunities. Building partnerships takes time, and extractive development timelines are not always conducive to providing the time needed to develop partnerships before decisions are made. In addition, those stakeholders involved in mining activity are often running on different timelines. For example, companies may be focused on quarterly and annual budgeting cycles, governments on elections, and NGOs on maximizing often time-limited funding. Communities are responding to both short-term pressures while trying to manage long-term interests.

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Companies are often afraid and/or unwilling to share information because it may be material or proprietary or provide a competitive advantage. There can be also be risks involved with communicating information, such as causing or influencing in-migration and land speculation after communicating a project design. Yet by being open about these challenges, and working with communities, instead of in isolation, companies can co-develop decisionmaking processes that meet the interests of the company and community.

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Be honest about the likelihood of extractive development, decision-making processes, the potential impacts and benefits, and the inherent uncertainties of resource development. There is an important balancing act that needs to take place when it comes to information sharing. Companies, governments, and communities should be open with each other about the risks and opportunities of mining development.

Companies are often afraid and/or unwilling to share information because it may be material or proprietary or provide a competitive advantage. There can be also be risks involved with communicating information, such as causing or influencing in-migration and land speculation after communicating a project design. These risks can negatively affect companies, communities, and governments. Yet by being open about these challenges, and working with communities, instead of in isolation, companies can co-develop decision-making processes that meet the interests of the company and community.

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Recognize that there are power imbalances and put the resources in place to address these dynamics. The mining development process is not inherently set up in favour of www.canadianminingjournal.com

groups working together as partners. The balance of power often sits with companies and governments. Increasingly, companies (and governments) realize they need to address resource or capacity deficits on the part of local partners if they want to be able to get projects off the ground. Addressing power imbalances might look like providing the resources to hire independent technical advisers or conduct independent assessments. In contexts where achieving free, prior, and informed consent is required, this is often the bare minimum needed.

between communities, companies, and governments. Colonialism, historical trauma or conflict, past marginalization by government or other groups, political allegiances, or prior natural resource development, may affect a community’s relationship with the government, extractive companies, or outsiders of any kind. We must understand and be sensitive to these legacy issues because they can have lasting effects and influence future relationships. Starting from a point of listening to communities and respecting their rights is critical.

Hold each other accountable and be willing to give something up in pursuit of a broader goal. Stakeholders often see extractive development as a zero-sum game, where giving something to one stakeholder means giving up control or taking it away from another stakeholder. For example, a company sees giving a community more information as giving up control, or a government sees respecting Indigenous peoples’ rights as reducing the opportunities available to non-Indigenous people. True partnership and collaboration require each group to compromise and hold each other accountable for commitments. This can be most difficult for communities, who need to have the power, influence, information, and sense of safety to do so. Companies and governments can enable this.

Be a leader. Leadership is the foundation for effective collaboration and partnership. Good leaders are willing to partner with others in a meaningful way – to put leadership into action and go beyond rhetoric. They also have the courage to do something different or controversial. This often means they are willing to take a risk, to listen to, or to try to trust the company or the community or the government. It also means they might have to give something up, such as information, an equity position, or a revenue stream, in the pursuit of hopefully greater gains in the form of economic opportunities, an improved quality of life, a smoother or more efficient permitting process, or cost savings and higher share prices. CMJ

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Trust each other. Partnership does not necessarily mean all stakeholder groups will agree with each other all the time, but it does require them to trust each other. Building trust is not simple when there are complex histories and legacies

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To learn more about this please visit www.netpositivenr.org.

CAROLYN BURNS is director of operations at NetPositive, a non-profit that works with diverse stakeholders to help local communities see sustained positive outcomes from mining.

JANE CHURCH is a co-founder and director of collaboration with NetPositive.

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CANADIAN MINING JOURNAL |

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FIRST NATIONS

BC’s Bill 41 represents a path forward for First Nations and industry

By Chad Norman Day and Kendra Johnston

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lmost a century before anyone had conceived of the United Nations Declaration on the Rights of Indigenous People (UNDRIP), there was the 1910 Declaration of the Tahltan Tribe. It emphasized that those who wished to do business in Tahltan Territory would be required to work with the Tahltan Nation and show proper respect for its citizens, territory and rights. The 1910 Declaration was a progressive, inclusive path to harmonious and mutually beneficial relations between the Tahltan and industry.

This, in part, reflects the advancement of Bill 41 by the B.C. government, in partnership with B.C. First Nations, that will see, for the first time at the provincial level, UNDRIP principles reflected in our laws.

The principles of UNDRIP are already being embraced and practiced by much of the B.C. mineral exploration and development industry. Increasingly, industry and First Nations are creating the necessary tools and pathways to obtain free, prior and informed consent where resource development projects are being proposed. There is a growing understanding that the path to a successful project is to have clear, transparent and respectful discussions regarding Indigenous title and rights and proposed project plans as early as possible in the exploration process.

Collaborative decision-making is not a scary way of doing business in Tahltan territory. In fact, it is quite the opposite.

Tahltan governments and corporations often sign agreements that ensure reasonable efforts are made to communicate with the Tahltan people, include them in economic opportunities through employment and contracting and implement distinct environmental policies and standards created by a team of Tahltan experts. When the Tahltan Nation and exploration and mining industry work together in a productive and respectful manner, with an understanding of Tahltan culture, governance and decision-making, the outcomes have been positive for all stakeholders.

The UNDRIP legislation, which passed into law in November, provides an opportunity to build upon and reproduce these elements of success exemplified by the B.C. mineral exploration industry and the Tahltan Nation.

The reality is that patterns of litigation and conflict regarding the title and rights of First Nations peoples have stifled investment, job growth and collaborative work toward sustainable protection of our environment. By working together, we can unlock the vast resource potential of British Columbia in a way that ensures sustainable, mutual benefits for all British

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Columbians and respects the rights of its First Nations peoples. This is the better way forward for everyone.

The UN declaration embodies principles that support and advance the goal of reconciliation in Canada’s Constitution.

Government has an important role to play in setting our province on a course toward meaningful reconciliation grounded in these principles. To this end, Bill 41 will bring B.C. laws into harmony with the UN declaration, including an action plan to be developed in partnership with First Nations and through dialogue with the B.C. business community and all British Columbians.

For more than 100 years, the Association for Mineral Exploration (AME) has been the voice of the industry in B.C. To succeed, the industry must recognize and respect the unique jurisdictions and rights of Indigenous peoples in the province and throughout the world. Many exploration companies have already realized that including First Nations in the decision-making process has great benefits, including local knowledge of the land, a local work force and a passion for building economic capacity while being good stewards of the land.

For example, the BC Regional Mining Alliance – a northwest partnership between Indigenous groups, the province and the mining industry – which the Tahltan and Nisga’a nations are part of, took the pro-active step to work the UN declaration into its engagement practices two years ago. It is a good example of how incorporating respect for rights in policies and practices can work for First Nations and industry to create an environment that promotes positive relations even further.

We had an opportunity to be briefed on the draft legislation as part of the province’s engagement process before it was introduced. We are optimistic that this legislation will lead to further clarity and certainty for investment in B.C. and reaffirm the province as a world-class destination for business and economic development. This will ultimately benefit all British Columbians, by fostering predictability, good-paying jobs and opportunities, while respecting the rights of Indigenous peoples.

Many companies investing in B.C. already understand that collaborative relationships with First Nations governments are creating improved investment certainty. This legislation will support further collaborative opportunities and enable successful partnerships between First Nations governments and CMJ industry.

CHAD NORMAN DAY is president of the Tahltan Central Governmen. KENDRA JOHNSTON is president and CEO of the Association for Mineral Exploration BC.

www.canadianminingjournal.com

FAST NEWS • SUSTAINABILITY |

Updates from across the mining ecosytem

Metso climate targets approved by Science Based Targets initiative Metso has committed to a 25% reduction in carbon emissions in production by 2030. CREDIT: METSO

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etso’s greenhouse gas emission targets, which are part of Metso’s Climate Program and are applicable to all relevant emission sources from production through transportation to the use of its products, have been approved by the Science Based Targets initiative (SBTi).

The SBTi is a collaborative effort which aims to promote science-based target setting and driving down global greenhouse gas emissions. Metso is one of the few corporations in its field to join SBTi. Metso has committed to a 25% reduction in carbon emissions in production by 2030.

The company also requires 30% of its suppliers in terms of spend to set science-based emission targets by 2024. In addition, Metso is aiming for a 20% reduction in transportation emissions by 2025.

Through research and development work, Metso has been able to significantly reduce the energy consumption in customer processes. To continue this development, Metso aims for a 10% reduction in GHG emissions in the most energy-intensive customer processes through the use of Metso products by 2025. Metso will also offset flight emissions by 100% by 2021 and find new ways to decrease emissions.

“Our climate program is an important JANUARY 2020

step in our goal of reducing greenhouse gas emissions,” said Metso president and CEO Pekka Vauramo. “It is also an essential element in Metso being a responsible and trusted partner to our customers. We aim to improve our customers’ productivity in a sustainable manner, and we involve all our stakeholders in reaching this goal.”

Metso Minerals and Outotec are in the midst of a merger announced last July.

The combination will create a leading

• INTEROPERABILITY |

company in process technology, equipment and services serving the minerals, metals and aggregates industries. Metso Flow Control will become a separately listed independent flow control equipment and services company under the name of Neles. The merger is expected to close in second quarter of 2020.

Upon completion, Metso shareholders will own 78% of the combined company and Outotec shareholders will hold 22%.

CMJ

Sandvik releases AutoMine Access API

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andvik has introduced the mining industry’s first interoperability platform for autonomous underground loaders and trucks: The AutoMine Access API. The AutoMine Access API gives mines the power to connect non-Sandvik equipment to AutoMine.

“As a world leader in underground automation, we have a responsibility to make this game-changing technology easier to implement for the mining industry,” said Patrick Murphy, president Rock Drills & Technologies, Sandvik Mining and Rock Technology. “While we think customers will achieve the highest performance with Sandvik equipment, we recognize the need to unlock automation’s full potential for all equipment regardless of manufacturer. Customers with mixed fleets will now have the full power of AutoMine behind them.”

The AutoMine Access API is a standard set of pre-defined interfaces for connecting third-party loaders and trucks to AutoMine. This means a mixed fleet of underground loaders and trucks can now be managed and controlled with one seamless system.

An API (application programming interface) is a set of functions and procedures continued on page 10 CANADIAN MINING JOURNAL |

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FAST NEWS Updates from across the mining ecosytem

that allows the creation of applications that access the features or data of an operating system, application, or other service.

The third-party equipment is also required to meet the AutoMine safety standards.

“Sandvik has been leading the market in underground digitalization for years, with thousands of pieces of equipment around the world connected to our digital technology,” said Murphy. “As more customers embark on their digital journeys, interoperability will be a requirement.

We are proud to leverage our experience to drive digitalization further in the mining industry.”

CMJ

Volvo presents heavy-duty electric concept trucks

• ELECTRIFICATION |

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olvo Trucks has developed electric concept trucks for construction operations and regional distribution.

Heavy duty electric trucks can help improve the work environment for drivers and construction workers thanks to low noise level and zero exhaust emissions during operation. Due to the lack of noise disturbance, these trucks also make it possible to perform transport operations for more hours per day which opens up new possibilities for streamlining operations, for instance in large construction projects and for transport in and around cities.

“We see great potential for heavy-duty electric trucks for regional transport and construction in the longer term,” said Roger Alm, president of Volvo Trucks. “With our concept trucks, we aim to explore and demonstrate different solutions for the future while evaluating the level of interest in the market and in society. To increase demand for electrified trucks, the charging infrastructure needs to be rapidly expanded, while stronger financial incentives must be created for hauliers who act as pioneers by choosing new vehicles with a lower environmental and climate footprint.”

Volvo Trucks’ plan for electric heavy-duty trucks for construction and regional distribution is to start by having selected customers in Europe pilot a small number of future electric vehicles. More extensive commercialization will follow at a later point.

In parallel with increased electrification of the transport sector, ongoing improvement of the efficiency of combustion engines will continue to play a key role for long haul truck transport for many years to come.

Volvo already offers the all-electric Volvo FL Electric and Volvo FE Electric, which are intended, for instance, for local distribution and refuse handling in urban environments. CMJ www.canadianminingjournal.com

MESSAGE FROM AME BC

AME reflects on successes and challenges of B.C. explorers

By Kendra Johnston

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he mineral exploration industry has had a unique year. Metal prices have stayed relatively strong, and yet it’s been challenging for many junior mining companies to attract investment. British Columbia has continued to succeed and be highlighted on the global mineral exploration and mining stage – in particular, the northwest region of B.C. That region includes the “Golden Triangle,” a once remote area that is now well resourced with a series of infrastructure investments and mineral exploration projects. This region is seen, around the world, as a strong, vibrant and competitive mineral exploration hub. This success is partly due to the strong support from First Nations for sustainable and responsible resource development, which JANUARY 2020

The ‘Golden Triangle’ is a once remote area of B.C. that is now seen, around the world, as a strong, vibrant and competitive mineral exploration hub.

– KENDRA JOHNSTON, PRESIDENT AND CEO OF THE ASSOCIATION FOR MINERAL EXPLORATION (AME)

will bring jobs and economic opportunities. The region has also seen a steady increase in investment by major mining

companies into junior explorers. Newmont Goldcorp and Teck Resources have partnered to advance the Galore Creek project; Newmont Goldcorp also recently invested in GT Gold, and Newcrest Mining acquired 70% of the Red Chris copper-gold mine in August. These are just three of the many deals we have seen in the province this year.

Another area that has benefited in 2019 from mineral exploration is the Spences Bridge area in south-central B.C. This area encompasses Fraser Canyon, which is a foundational part of our history in the province. The Spences Bridge belt has seen ups and downs in mineral exploration, but as the gold price rises, interest always comes back. It’s easCONTINUED ON PAGE 12

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MESSAGE FROM AME BC ily accessible from local towns, meaning there is less impact to the land without the need for camps, and safety concerns are alleviated with a hospital close by. Projects can take advantage of local skilled labour, and the area has infrastructure (a major highway) and cell coverage, not to mention gold and copper still to be discovered and defined. This year, the region saw a number of property deals and acquisitions, mostly between junior companies and local prospectors, an indication of the earlier mineral exploration stage in the region when compared to the Northwest.

The Association for Mineral Exploration’s (AME) advocacy work is continuous, and earlier this year, we were happy to announce to our members and all B.C. investors that the B.C. government made permanent the provincial mineral exploration tax credit and the Mining Flowthrough Share tax credit incentives, while also committing to the 24 actions outlined in the B.C. Mining Jobs Task Force Report.

Throughout the year, AME was involved in numerous working groups and sessions. In the fall, we participated in a multi-stakeholder working group to engage on the most notable new legislation in recent history, Bill 41, which enacted the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into law in B.C. The new law is closely tied to the provincial government’s goal, across all ministries, of advancing reconciliation in B.C. Upon introduction of the Bill into the legislature, AME expressed our support and noted that the B.C. mineral exploration and mining industry is already at the forefront of advancing reconciliation in the province by way of agreements and partnerships with Indigenous communities that embody the principles of UNDRIP. There is much more work to be done as the laws of B.C. are slowly brought into alignment with UNDRIP. We look forward to working collaboratively with government and First Nations on the development and implementation of the action plans as we embark on this path.

In January, we are hosting the 37th annual AME Roundup conference, 12 | CANADIAN

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In the fall, we participated in a multi-stakeholder working group to engage on the most notable new legislation in recent history, Bill 41, which enacted UNDRIP into law in B.C. – KENDRA JOHNSTON, PGEO, MBA

Top: The core shack at Roundup.

Bottom: Kendra Johnston, president and CEO of AME. CREDIT: ASSOCIATION FOR MINERAL EXPLORATION

which is appropriately themed “Lens on Discovery.” The program is designed to take a closer look at those projects, innovations and expertise that exemplify the passion and skill in our industry. Roundup provides an opportunity to expand your network with more than 6,000 participants in attendance and to hear from outstanding keynote speakers, to learn from informative panel discussions, and to see the rocks from the some of the projects that you usually only get to read about. As usual, you can expect

to choose from a full slate of exceptional Technical Sessions and Short Courses.

The 2020 Theme Session is “Seeing the Unseeable” and will focus on new ways to see ore systems under cover, at depth or from their cryptic expressions on the surface of the Earth. This is a chance to listen to industry experts and hear the latest research in looking under cover to discover deeper targets.

We are thrilled to once again have a sold-out Exhibit Hall that includes the Innovation Hub and the Innovation www.canadianminingjournal.com

Stage, which are open to all participants and will feature presentations by exhibitors showcasing their groundbreaking new technologies. This year, new to the Innovation Hub and Stage, is the Vanguard Panel moderated by Stephen de Jong, CEO of VRIFY. The panel will discuss the role that technology has in attracting capital back into the sector and reaching a younger audience of engaged investors. Also new is the Geophysics Session which will include seismic exploration case studies, the application of AI and machine learning for targeting, and a case study on the use of HeliSAM in the Abitibi.

AME’s Roundup conference is also a special occasion for industry and government leaders to discuss the mineral exploration and development landscape at the Government-Industry Forum.

AME will salute our industry’s best and brightest at the Awards Gala: Celebration of Excellence dinner on Jan. 22.

The Reconciliation Breakfast at last year’s Roundup.

CREDIT: ASSOCIATION FOR MINERAL EXPLORATION

This year, we have the honour of recognizing 11 individuals and four organizations for their achievements.

We are looking forward to seeing you at Roundup 2020, to hearing what you’ve been up to, what your challenges are, where you see potential opportunities. Please take the time to stop us in the

Connecting People.

Powering Communities.

EPC+ Engineering

JANUARY 2020

Procurement

Construction

halls and give us your feedback; our job is to serve you, our membership.

In closing, please accept my heartfelt thanks to the amazing volunteers, board and executive team and staff. The Association has a strong, credible and important voice because of each of you. Thank you for your time and commitment.

Happy exploring, Kendra Johnston, PGeo, MBA President and CEO of AME

CONTINUED ON PAGE 14

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CANADIAN MINING JOURNAL |

13

MESSAGE FROM AME BC

2019 AME’s Award Recipients

The AME Awards Gala will take place on Jan. 22.

For tickets to the AME Awards Gala and more information about AME Roundup, go to roundup.amebc.ca.

Peter Fischl, P.Geo. of Westhaven Ventures is the recipient of the 2019 H.H. “Spud” Huestis Award for significant contributions to enhancing the mineral resources of BC and/or Yukon Territory.

Steve Todoruk is the recipient of the 2019 Murray Pezim Award for his perseverance and commitment to financing high quality, early stage exploration projects that have led to numerous significant metal discoveries.

Dr. Moira Smith is the recipient of the 2019 Colin Spence Award for her development of a new geological model for the Long Canyon prospect in Nevada and the resulting definition of a multi-million-ounce gold resource there.

Chief John French, Chief Donny Van Somer, Dennis Izony and Chris Rockingham are the 2019 recipients of the Robert R. Hedley Award for Excellence in Social and Environmental Responsibility.

Their collective dedication to further the Kemess Underground mine has set the standard for achieving mutual benefits through understanding, respect and trust.

Diamonds in the Rough Emergency Rescue Organization is the recipient of the 2019 David Barr Award for providing an invaluable emergency response resource to Canada’s mineral exploration industry. The Diamonds in the Rough team is composed of women in mineral exploration and development, mineral production, safety suppliers and government.

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Ed Balon is the recipient of the 2019 Gold Pan Award for his significant and selfless contributions as a volunteer to AME. Ed is an accomplished prospector, having previously received AME’s H. H. “Spud” Huestis Award in 2005 and has been a key contributor to AME’s successes for nearly 20 years.

Jim Oliver and Anne Thompson are the recipients of the Frank Woodside Award for distinguished service to AME and/or the mineral exploration industry. For nearly 40 years, Jim has helped companies advance mineral projects in B.C. and around the world through his extraordinary ability to meld academic understanding with exploration instinct.

With over 35 years of industry experience, Anne is a leading expert in alteration mineralogy and analysis for mineral exploration. She was responsible for spearheading the creation of a Diversity and Inclusion Committee for the Society of Economic Geologists, volunteers as a mentor and is a vocal supporter for the inclusion of women in the industry.

The two recipients of AME’s Outreach Education Fund are MineralsEd to support delivery of the Kids & Rocks Classroom Workshop in 2020 and Britannia Mine Museum to support the 2020 continuation of its well-established Education Program.

The Highway 37 Electrification Coalition is the recipient of a 2019 Special Tribute Award for their contribution to British Columbia. Their leadership and advocacy led to the creation of the $77- million, 344-km Northwest Transmission Line and an additional 95-km extension to Tatogga.

Julia Lane is a recipient of a 2019 Special Tribute Award for being an exceptional geologist, widely admired not only for her geological abilities but also for her ability to manage large and logistically difficult exploration projects in remote areas of the Yukon. Julia tragically passed away at the age of 33 on Aug. 6th, 2019 in an aircraft accident during a routine flight from the field. Julia became a partner in Archer, Cathro & Associates (1981) in 2012 and was appointed ATAC’s vice-president of exploration in 2015. She was an active volunteer with AME.

About AME

resourceful | experienced | worldwide

14 | CANADIAN

MINING JOURNAL

AME is the lead association for the mineral exploration and development industry based in British Columbia.

Established in 1912, AME represents, advocates and promotes the interests of almost 5,000 members who are engaged in mineral exploration and development in BC and globally.

CMJ www.canadianminingjournal.com

BC, YUKON AND NWT

Fireweed Zinc’s Macmillan Pass zinc-lead-silver project, in the Yukon.

CREDIT: FIREWEED ZINC

By Magda Gardner

FINDING THE METALS THAT WILL

power the future

The rise of EVs could fuel the development of these battery and base metals projects

B

ase and battery metals assets, traditionally on the sidelines of gold developers, continue to gain prominence with the growing reach of electric vehicles. Based on numbers from the International Energy Agency, electric vehicles are expected to rise from 0.3% of the global car fleet in 2018 to 7% in 2030. This would translate to an addition of 116 million of EVs globally.

JANUARY 2020

The base metals demand implications are significant: hybrid vehicles use anywhere from two to four times the nickel and twice the copper of conventional gasoline and diesel powered units, with battery powered EVs requiring even more of these metals.

The move towards fleet electrification is also expected to CONTINUED ON PAGE 16

CANADIAN MINING JOURNAL |

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BC, YUKON AND NWT

Members of Giga Metals’ team at the Turnagain nickel project in B.C. From left: chairman Lyle David, president Martin Vydra and manager of development Lyle Trytten.

CREDIT: GIGA METALS

impact battery metal markets with cobalt currently a key component of EV batteries.

In 2018, the Democratic Republic of the Congo produced over 60% of the world’s cobalt . In August, Glencore announced plans to place the Mutanda mine, the world’s largest cobalt producer, on care and maintenance by the end of the year.

In addition, recent developments in zinc air batteries utilizing oxygen to extract power from the metal present potential for rechargeable applications.

These developments make base and battery metals an exciting target for exploration and development.

Below, we take a look at some active pre-production projects in western Canada, including British Columbia, the Yukon and the Northwest Territories. For the purposes of this article, we’ve focused on assets with existing resources and active news flow.

Turnagain

Giga Metals is focused on metallurgy and engineering at its Turnagain nickel-cobalt project in north-central British Columbia.

“We’re at the PEA level tradeoff study stage, lots of studies to do before we decide on an optimal processing route and size,” Mark Jarvis, the company’s CEO, told Canadian Mining Journal in November. “Our plan now is to figure out the best route to production then (take the project) to prefeasibility and feasibility… we want to advance the project to the shovel-ready (stage).”

A 2011 preliminary economic assessment (PEA) of the project featured a staged 43,400 t/d to 84,600 t/d open pit opera16 | CANADIAN

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A new zone of copper mineralization at Fortune Minerals’ NICO project in the Northwest Territories, discovered as a result of road work last year. CREDIT: FORTUNE MINERALS

tion producing an average of 36,558 tonnes of nickel and 2,063 tonnes of cobalt per year in concentrate over a 27-year life.

The initial capital cost was estimated at US$1.4 billion with an additional US$492 million required for an expansion in the fifth year of operations. The study pegged Turnagain’s net present value (NPV) at US$724 million using an 8% discount rate, and its internal rate of return (IRR) at 13.5%.

In October, the company released metallurgical test work results: locked cycle tests completed on the Horsetrail zone scheduled for production during the initial years of mine life delivered concentrate grades ranging from 18% to 22% nickel with recoveries on the order of 50% to 60%. Additional metallurgical testing is ongoing. “(We can) send the concentrate to a smelter, but are also looking at taking the sulphide concentrate to sulphate form through a pressure oxidation process, the preferred product for battery metals,” Jarvis says. The company is in discussions with battery and car manufacturers about the option of direct concentrate sales. These parties would then make battery metal sulphates through their own pressure oxidation circuits.

Giga is currently working on an updated PEA, expected in the first quarter of 2020 with the goal of reducing the upfront capital requirements through a smaller startup operation.

In September, the company released an updated resource estimate for the project. Measured and indicated resources stand at 1.1 billion tonnes grading 0.22% nickel and 0.01% cobalt for a total of 5.2 billion lb. nickel and 312 million lb. cobalt. Inferred resources stand at 1.1 billion tonnes at 0.22% nickel and 0.01% cobalt for a total of 5.5 billion lb. nickel and 327 million lb. cobalt. The resources are open for expansion. www.canadianminingjournal.com

NICO

Fortune Minerals’ flagship asset is the 51.4-sq.-km NICO gold-cobalt-bismuth project, 160 km northwest of Yellowknife.

A 2014 feasibility study examined a potential 21-year, open pit operation with a high-grade underground starter mine and a 4,650 t/d mill. Capital costs, excluding working capital, were estimated at $589 million. After-tax NPV came in at $224 million (at a 7% discount rate), with a projected IRR of 15.1%.

Operating costs were estimated at a negative US$5.03 per lb. of cobalt, net of byproduct credits.

Fortune is working on a progress report to update and optimize the study.

“We are one of the few advanced cobalt JANUARY 2020

DESIGN - BUILD - INSTALL - COMMISSION

–TROY NAZAREWICZ, INVESTOR RELATIONS MANAGER, FORTUNE MINERALS

westpromachinery.com

We are one of the few advanced cobalt development assets globally that is positioned to contribute an ethical supply of cobalt to the battery industry.

development assets globally that is positioned to contribute an ethical supply of cobalt to the battery industry,” says Troy Nazarewicz, the company’s investor relations manager.

The NICO project consists of three ore lenses up to 1.3 km long, 550 metres wide and 70 metres thick, allowing for open pit mining widths in excess of 100 metres.

Fortune plans to produce a gold-cobalt-bismuth-copper concentrate onsite, that would then be transported to a metals processing plant to produce doré bars as well as cobalt, bismuth and copper products. The company is also looking at the option of concentrate and gold doré sales.

According to Robin Goad, the company’s president and CEO, a key advantage at NICO is the ability to achieve a high concentration ratio at the mine site: ores are subjected to flotation to produce a sulphide concentrate that is only 4% by weight of the original material and contains the recoverable metals. Fortune would then conduct a secondary flotation process on the bulk concentrate to separate the gold-cobalt and gold-bismuth concentrates. These could then be sold to a refinery after recovering the gold or, processed in a purpose-built refinery owned by the company through a high-pressure acid leach process. However, the additional capital costs and risks associated with vertical integration would have to be weighed against the potential for better recoveries and greater revenues from higher value products.

“We are also looking at ways to reduce the capital costs associated with a refinery and one way would be to collaborate and share the costs of the processing plant,” Goad says. “We think that the key to financing the project will be attracting a strategic partner to contribute equity into a project finance solution… We are now expanding our pool of potential partners to include gold companies,” he adds, based on NICO’s gold reserve of more than 1 million oz.

In September, construction began on the 97-km Tlicho all-season road, which will provide access from the territorial

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CONTINUED ON PAGE 18

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BC, YUKON AND NWT

highway system to the Whati community, located 50 km the south of NICO – a $200-million government funded initiative.

An environmental assessment has been completed for the potential mine and concentrator; negotiations with the Tlicho First Nation are underway regarding participation and access agreements.

The feasibility outlined open pit proven and probable reserves of 32.5 million tonnes grading 0.96g /t gold, 0.11% cobalt, 0.14% bismuth and 0.04% copper with underground proven and probable reserves adding 577,000 tonnes at 4.96 g/t gold, 0.1% cobalt, 0.17% bismuth and 0.02% copper. Total contained metal is estimated at 1.1 million oz. gold, 82.3 million lb. of cobalt, 102.1 million lb. of bismuth and 27.2 million lb. of copper.

Looking beyond NICO, Fortune has identified the SueDianne copper-silver-gold deposit 25 km north, as a potential source of open pit mill feed.

Macmillan Pass

Fireweed Zinc’s principal asset is the 544-sq.-km Macmillan Pass project in the Yukon, 400 km east of Whitehorse.

The wholly owned Tom, Jason and Nidd properties are host to the Tom, Jason, Boundary Zone and End Zone deposits.

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A 2018 PEA on the project outlined a 5,000 t/d underground operation with an initial open pit and ramp access underground.

Total initial capital was estimated at $404 million with all-in operating costs at $82 per tonne processed. Inclusive of sustaining capital, adjusted cash costs would be US64¢ per lb. zinc net of byproduct credits. At an 8% discount rate, the project’s aftertax NPV came in at $448 million and the IRR at 24%.

An ore blend from the Tom and Jason deposits would be used to produce lead and zinc concentrates. The zinc concentrate would grade 58.4% zinc, with an 88.9% zinc recovery and the lead concentrate would grade 61.5% lead based on a 75.4% lead recovery.

Indicated resources stand at 11.2 million tonnes grading 6.59% zinc, 2.48% lead and 21.33 g/t silver for a total of 1.6 billion lb. zinc, 600 million lb. lead and 7.7 million oz. silver.

Inferred resources stand at 39.5 million tonnes grading 5.84% zinc, 3.14% lead and 38.15 g/t silver for a total of 5.1 billion lb. zinc, 2.7 billion lb. lead and 48.4 million oz. silver.

In November, Fireweed received an upgraded permit for the project, allowing for larger exploration programs.

The Tom and Jason deposits are open for expansion with additional resource potential at the Boundary zone.

Step out and infill drilling completed on the Tom East and West zones in 2018 returned a number of intercepts with grades above the current resource.

Step-out drilling completed at Tom North in 2019 intersected mineralization outside of current resource boundaries at shallow depths. At Jason, there are additional higher-grade intercepts outside of current resources.

The Boundary zone, a near-surface area of mineralization located 15 km west of the Jason deposit, has been traced for almost 2 km and over widths of 200 metres to 800 metres and drilled down to 285 metres; it remains open.

Fireweed acquired a 100% interest in Macmillan Pass in 2018.

Kutcho Copper

Kutcho Copper’s principal project is the 170.6-sq-km. Kutcho property in northern British Columbia.

A 2017 prefeasibility study for the project outlined a 2,500 t/d underground operation (with a starter pit) producing an average of 33 million lb. copper and 42 million lb zinc annually. The study estimated that with initial capital costs of $221 million, the project has an after-tax NPV of $265 million and an IRR of 27.6% (using an 8% discount rate).

An updated feasibility study, led by Ausenco, is expected in the first half of 2020.

An updated resource estimate released in March outlined measured and indicated resources of 17.3 million tonnes grading 1.85% copper, 2.72% zinc, 0.49 g/t gold and 33.9 g/t silver with additional inferred resources of 10.7 million tonnes at 1.18% copper, 1.76% zinc, 0.26 g/t gold and 21.5g/t silver.

Current resources are contained within three volcanogenic www.canadianminingjournal.com

The core shack at Kutcho Copper’s Kutcho project, located 100 km east of Dease Lake, in northern B.C. CREDIT: KUTCHO COPPER

massive sulphide deposits with four additional targets identified for follow up drilling nearby.

Metallurgical results from the Main Lens reported in September suggest recoveries in the range of 82.6% to 92.3% for copper and 63.2% to 84.2% for zinc. Associated concentrate grades ranged from 26.6% to 27.1% for copper and 58.6% to 59.7% for zinc.

Recoveries from the Esso lens have been slightly higher .

In September, Kutcho started the B.C. environmental assessment process. Baseline studies were re-started in 2018, following the company’s acquisition of the project in 2017 from Capstone Mining. The company is working with First Nations groups in the area.

Additional exploration upside exists within the larger Kutcho

CONTINUED ON PAGE 20

•

ConstruCtion AnD Mining serviCes

JANUARY 2020

CANADIAN MINING JOURNAL |

19

BC, YUKON AND NWT

NorZinc’s Prairie Creek zinc-lead-silver project, in the Northwest Territories. CREDIT: NORZINC

property with a number of volcanogenic massive sulphide horizons identified.

Based on a US$65-million precious metals purchase agreement with Wheaton Precious Metals announced in August 2017, Kutcho estimates that 8% of project revenue is connected to a stream.

Prairie Creek

NorZinc holds 100% of the Prairie Creek project located 500 km west of Yellowknife.

The project has a long history: Mineralization at the property was discovered in 1928 and underground exploration started in the 1960s. A feasibility study was completed in 1980, followed by mine development. After a dramatic drop in the price of silver in the early 1980s, construction was suspended in 1982.

NorZinc acquired the property in 1991.

In November, NorZinc received the land use permit for an all-season road to the Prairie Creek mine. Road construction is expected to start in 2020. NorZinc now has all of the major permits for mine construction and operation. The company is looking at potential buyers for concentrates from the project.

Mine construction is expected in two phases: construction of a winter road to Prairie Creek is planned for the first quarter 20 | CANADIAN

MINING JOURNAL

of 2020. Main site construction is expected to follow in 2021 and 2022 with most of the underground development currently scheduled to begin in 2021.

A 2017 feasibility study outlined a 1,600 t/d underground mining operation producing an average of 95 million lb. zinc, 105 million lb. lead and 2.1 million oz. silver in concentrate annually in the first 10 years of operation at a total preproduction capital cost of $279 million. The associated NPV, at an 8% discount rate, is $188 million, with the IRR projected at 18.4%.

To finance the project, NorZinc plans to access either equity or an alternative (such as silver stream) next year, with bank debt or hybrid financing to follow.

In September, NorZinc announced the sale of a 1% net smelter return royalty on the Prairie Creek mine to an affiliate of Resource Capital Fund VI L.P. for $8 million. Resource Capital Funds currently holds 41% of the company’s shares.

Based on metallurgical tests results completed on quartz vein material, a zinc sulphide concentrate is expected to grade 59% zinc with a lead concentrate expected at 65% lead; recoveries of 90% are anticipated for both. An average of 86% of the silver is expected to be recovered to concentrates.

Four styles of mineralization have been identified on the property with quartz veins host to base metals mineralization the largest reserve contributor. These have been traced over 16 km. www.canadianminingjournal.com

The 74.9-sq.-km property is host to proven and probable NorZinc now has reserves totalling 8.1 million all of the major tonnes at 23.1% zinc equivalent permits for mine (8.64% zinc, 124.22 g/t silver and 8.1% lead). Total measured construction and and indicated resources are 8.7 operation at million tonnes grading 9.5% Prairie Creek. zinc, 8.9% lead and 136 g/t silver (25.6% zinc equivalent) for a total of 1.8 billion lb. of zinc, 1.7 billion lb. of lead and 38.1 million oz. of silver. Inferred resources add 7.1 million tonnes at 27.1% zinc-equivalent for 1.8 billion lb. of zinc, 1.2 billion lb. of lead and 37.6 million oz. silver.

Pine Point

Osisko Metals’ Pine Point project is located 42 km east of Hay River and covers a 65-km strike length.

The exploration focus at Pine Point is on prismatic deposits.

These are high grade, vertically continuous bodies that extend up to 60 metres with typical widths of 15 metres to 50 metres.

Pine Point deposits lie on the south shore of Great Slave Lake, along a 70 km belt between Hay River and Fort Resolution.

Drilling has identified 100 deposits within the belt with 50

JANUARY 2020

developed by Cominco in the past.

An updated resource estimate is expected in the second quarter of 2020 alongside an initial preliminary economic assessment.

In November, the company released updated resource figures for the project: combined inferred resources stand at 52.4 million tonnes grading 4.64% zinc and 1.83% lead (6.47% zinc equivalent) for a total of 5.3 billion lb. of zinc and 2.1 billion lb. of lead.

The pit constrained portion stands at 47.9 million tonnes.

Current Pine Point resources are contained within five deposits with the central core of the project (the East Mill, Central and North zones) host to 31.9 million tonnes grading 6.22% zinc equivalent.

In August, Osisko released initial flotation results from Pine Point drill core with zinc concentrate grades of 63.6% to 64.1% and lead concentrate grades of 67.9% to 72.1%. Zinc recoveries ranged from 93.1% to 94.5% and lead recoveries were between 87.4% and 91.4%. According to the company, these recovery numbers as well as concentrate grades are exceptional with no smelter or refinery penalties expected.

Mineralization remains open at depth and along strike.

Compilation of gravity and topographic survey results is ongoing along with relogging and assaying of historic drill core.

Pine Point was discovered in 1898 with metals production between 1964 and 1987 when an estimated 64.3 million tonnes of ore were mined grading 7% zinc and 3.1% lead from 50 open pits and two underground mines.

CMJ

CANADIAN MINING JOURNAL |

21

Q&A

Battery markets charge up for

2022

Why we’re headed toward a ‘tipping point’ for EVs

According to the International Energy Agency, in 2018, the global stock of EV passenger cars surpassed 5 million, a rise of 63% over the previous year. Nearly half of those EVs – 45% – were in China.

The growth over the past decade has encouraged investment in battery minerals and metals – lithium, graphite, cobalt and nickel. But interest in new projects has waned as prices have fallen – largely in response to a scale back of subsidies for EV’s in China and an oversupply of battery minerals.

To understand the disconnect between expected growth in the battery minerals markets and current prices, Canadian Mining Journal spoke with Andrew Miller, head of price assessments with Benchmark Mineral Intelligence, a consultancy and advisory firm that provides independent pricing and market data on battery minerals, in December.

Canadian Mining Journal: Which minerals and metals are considered EV minerals and metals – which ones does Benchmark track?

Our main area of focus is Andrew Miller: what we see as the critical minerals and metals in the battery supply chain – lithium, graphite, cobalt and nickel. There are a lot more minerals and metals that are used in the EV supply chain, but we focus on

22 | CANADIAN

MINING JOURNAL

those four because they’re going to experience the most considerable growth from the emergence of EVs over the coming years. They’re susceptible to volatility because of the huge growth that they’re facing and the rigid supply structure in each of those markets. As you’ve seen with lithium and cobalt over the last three to four years, you have an extremely volatile pricing situation. So those are the four that we see as really critical in this supply chain and areas that are really going to have to develop to support electrification. www.canadianminingjournal.com

CMJ: Can you give us a sense of how big and fastgrowing the EV market is right now?

To date, the market has been driven by adoption of AM: batteries in heavy duty vehicles, e-buses for instance have seen considerable growth. But we’re only in the very early

stages of what’s really going to drive the market over the coming decade, which is the adoption of electric vehicles for passenger applications. We’re seeing considerable growth, particularly in the Chinese market.

China’s been very dominant in the supply chain because of some of the incentives they had in place to promote electrification and we’re now entering what we think is going to be a tipping point for that electric vehicle industry outside of China, as Western OEMs are committing a huge amount of their future fleet to electrified models. Ultimately, what that’s going to mean is the rampup of these OEMs and their electrification plans is really going to drive the battery sector forward outside of China and Asia.

The lithium-ion battery market right now is producing around 200 GWh and we’re forecasting it will grow to around 1,800 GWh by 2028, so that gives you some idea of scale – almost 10X growth in terms of battery output in the coming decade.

CMJ:

At The Northern Miner’s Progressive Mine Forum in the fall, you forecast that we could see a deficit in cobalt in 2020 and lithium and graphite by 2022. That’s obviously not far off. What are the key factors that could swing those forecasts either way?

With some of the cutbacks in cobalt production, AM: there’s definitely going to be a tighter cobalt market going into the new year. (Glencore recently announced that

it’s closing its Mutunda mine, a large cobalt producer, for two years.) Around that 2021/2022 time horizon, we’re expecting others – lithium and graphite for instance – will also become tighter markets.

The big factor in terms of demand in the short term, as I mentioned, is what’s been happening in China. And although you’ll hear a lot said about what slowing Chinese growth actually means, in reality, China’s still growing at quite a healthy rate – double digit growth in terms of its EV production. So it’s not bad, it’s just not as much as in previous years. And the reason for that is they’re phasing out their subsidies, which is forcing some liquidity issues and some consolidation along the supply chain.

Chinese policy can swing things quite considerably one way or the other, but as I mentioned, we’re entering a market in the next two to three years where demand isn’t so China-focused.

Although China will remain an important driver of growth, we’re also going to see significant growth in Europe and North America, and that diversity of demand is going to see this story

JANUARY 2020

Andrew Miller accelerate in terms of consumption numbers.

You’re also seeing some very pro-electrification policies being put in place in Europe at the moment, which are expected to have a positive impact and could see things grow at a faster speed. China is due to bring their subsidies to an end by next year – I think that’s already built into a lot of people’s demand models, but if Chinese growth dries up in the short term that still has a meaningful impact on global demand.

So I think there’s more on the upside in terms of where that outlook could go wrong, particularly when you look at the market balance of these raw materials and you consider that we’re really in a period where to support the growth of 2022, money needs to be going into those markets now.

And investment has dried up because of the negative price environment for all of these key materials – investment has actually dried up at a time when it’s incredibly important that new supply is brought into the market. So things have a chance of becoming more fragile rather than less fragile over the coming years.

CMJ:

There seems to be a bit of a disconnect between, as you say, that negative price environment and the actual projected increases in demand in the relatively near future – what’s causing that disconnect?

It’s a short-term effect. What we saw around AM: 2015/2016, particularly in the cobalt and lithium markets with the rapid increase in pricing that occurred, was a

wave of investment that was based on the market at that point and the more considerable growth that was expected in the future. That led to this sort of transition period that we’re in in the moment where there’s still double-digit demand growth across all of these markets from the battery sector, but because

CONTINUED ON PAGE 24

CANADIAN MINING JOURNAL |

23

Q&A

Cathode technology evolution 100% 90%

70% 60% 50% 40% 30% 20%

Other LFP

LMO/LMNO NCM 811

we’ve been able to introduce some new supply that’s accelerated above the rate of new demand, you have this imbalance that is driving a correction in pricing. The spike in pricing and the highs in pricing we saw several years ago weren’t sustainable, but equally now, pricing we’re seeing in areas like lithium are unsustainable to allow for new supply in the future.

So unfortunately, the correction that’s happened because of this new supply is only making the longer-term outlook that much more fragile.

CMJ: In addition to that difficult market, many battery

minerals are specialty minerals that are finicky to produce in a quality and specification that battery manufacturers need. What do new producers have to do to be successful in this market?

I think it’s really an issue of time. Even the most AM: established producers in the market, to expand their production of these refined materials takes time, even if you

have the investment and infrastructure in place. So whether you’re an existing producer or a development stage project, you’re going to need time because it’s not a commodity game – it’s not just taking it out of the ground and worrying about the logistics, it really is more an issue of refining that product, working with the end user to make something they can use.

On that note, I think any type of partnership with your customer or any way of working with them in order to understand their requirements is helpful. That can be quite difficult in itself because we’re still in this period where people are trying to figure out what is the most cost-effective type of anode and cathode material to use and how much energy density can we squeeze out of this material. But the closer the relationship with their end user the better the chance of success for new companies, particularly as they introduce new suppliers.

So I think it’s a combination of time, expertise, knowing your market and your product and then coupling that with

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NCM 622 NCM 523

NCM 111 NCA

2040

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0%

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10% 2015

Historically, cobalt-rich LCO was the dominant material, with LFP the chemistry of choice for heavy duty applications.

Limited nickel consumption and cobalt battery demand tied to consumer electronics (smaller scale, less growth)

Cathodes for EVs will use nickel and cobalt. Cobalt intensity will fall but still play an important role.

High-nickel cathodes will be curtailed in short-term by safety and cost challenges

LCO

a strong relationship with the people that will ultimately be using your product.

CMJ: What is the dominant type of chemistry or lithiumion battery in the EV market right now?

On the anode side, it’s a bit more clean cut – you’re AM: either using natural or synthetic graphite, and more typically now a combination of the two materials to maximize

the cost/energy performance requirements of the anode.

It’s a little more varied on the cathode side. What was driving the market around the mid-2000s was the rise of consumer electronics, which required LCO (lithium cobalt oxide) cathodes, which is a cobalt-intensive cathode. What you’re seeing for electric vehicles and what’s really going to drive the market going forward is the use of either NCM (nickel cobalt manganese) or NCA (nickel cobalt aluminum) cathode types.

Tesla use NCA. These are more nickel-intensive cathode chemistries that still do use cobalt but in a lower intensity than LCO. For more heavy duty vehicles, like buses and trucks, you have LFP – lithium iron phosphate, a cathode that’s really grown to a lot of people’s surprise this year and continues to grow. It’s a lowercost type of cathode – you get less energy density from it, but for some of the larger vehicle applications, it’s a very stable, reliable chemistry.

CMJ:

Are there any advances that are happening in the EV battery space that you’re watching that could affect the market?

There are a lot of exciting things that are happening AM: in the EV market that you have to keep tabs on, particularly on the technology side. We’re reaching a point with

the electric vehicle market where it’s really about fine tuning the existing chemistries – that’s going to be the real development www.canadianminingjournal.com

Charts: Benchmark Mineral Intelligence 2019

80%

Anode technology evolution 100% 90% 80%

60% 50% 40% 30% 20%

Other LTO

that you see rather than a major overhaul or anything that could disrupt the future projection. Because if you look at the time to commercializing any of these technologies, to overcome the consistency, quality, performance and safety issues – it takes a huge amount of time to tick all of those boxes and to bring something new in.

Silicon

MCMB

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

0%

2017

10% 2016

Charts: Benchmark Mineral Intelligence 2019

synthetic has been favoured due to consistency and life cycle benefits, (particularly in China)

Moving forward to we expect natural to become more significant due to cost and capacity benefits. Anodes will be blended using natural & synthetic graphite (likely with some silicon additive)

70%

2015

More stable technology mix:

Synthetic Natural

quickly the prospect of this major battery growth can attract investment into the sector. It didn’t provide everything that was needed, but when prices start going up again and when there’s a tighter market, parties can turn their attentions to this very quickly, particularly when you’re moving into the real growth that we’re expecting come the mid-2020s.

CMJ

CMJ:

You’ve outlined a big supply challenge that looks like perhaps it can’t be met – we can’t necessarily speed up permitting to get projects developed faster, even if prices rise dramatically in the near term. How do you see that being resolved?

It’s a big concern for the industry and ultimately AM: you’ll have to see a huge influx of investment going in in quite a short amount of time. These projects do take time and it’s not going to be something that resolves itself overnight. There’s the potential for some of these industries to become major bottlenecks to the expansion of the electric vehicle market. On that note, I do think that’s being realized at the moment and even though investment may not be coming into the sector from public markets, you are seeing more joint venture partnerships in companies downstream, getting involved with the raw material supplies to ensure that that supply availability is there, so I think that will continue.

One area that we still haven’t seen come to maturity is battery recycling – bringing some of these materials back out of the battery and being able to use them again. In the longer term, though, these issues will be resolved because, with the possible exception of cobalt, these aren’t scarce materials geologically, it’s just getting them out of the ground and refining them in the right way.

There are definitely going to be some real teething issues over the coming years because you need continued and sustained investment to support this new production and at the moment it’s just not being forthcoming at the speed that’s required.

But the hopeful side of that is we saw in 2015 and 2016 how

JANUARY 2020

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25

BATTERY ELECTRIC EQUIPMENT

By Alisha Hiyate

A

t this point, it’s fair to say that it’s a given that battery electric vehicles make sense for underground mines.

Mines are getting deeper, more expensive and development times to get to ore are rising. BEVs not only save on costs of ventilation and cooling, they also improve worker health and safety by being emissions-free, and generating a fraction of the noise and vibration that traditional diesel machines do.

In addition, electric vehicles have fewer moving parts, reducing maintenance costs dramatically.

Following in the footsteps of early adopters such as Kirkland Lake Gold, which bought its first BEV scoop for its Macassa mine in Ontario in 2012, many more operations are incorporating the technology.

With BEVs now considered proven, adoption is speeding up and suppliers are starting to expand their offering of battery powered electric vehicles (BEVs).

CMJ reached out to BEV suppliers to see what they have been working on and what they’re planning for 2020. We also asked the companies who responded for comments on their plans for the future and emerging BEV trends.

EPIROC

In late 2018, Epiroc released new versions of its BEVs originally introduced in 2016.

In 2019 the company launched a 4-tonne loader for the Chinese market, 26 | CANADIAN

MINING JOURNAL

BEV options for miners

grow

the Scooptram ST4 Battery. This model will also be more widely available soon.

In 2020, the company plans to expand its already large BEV fleet with new equipment launches.

Also in 2019, Epiroc launched a Batteries as a Service (BaaS) business.

With BaaS, Epiroc takes full responsibility for the batteries, from certification to maintenance and offering technology upgrades, using truly a circular business model.

Customers do not buy the batteries, or even lease them, but instead purchase the battery operation service for their electric vehicle. The batteries can be used in Epiroc equipment and with other Original Equipment Manufacturers (OEMs). Together with the customer, Epiroc defines a battery plan and the customer pays only for the service provided.

Epiroc says an important difference between BaaS and a typical leasing model is that it will replace batteries with newer

versions that have upgraded technology.

The company says the service leaves nothing to chance, meaning no surprises and always predictable running costs.

Statement from Epiroc:

The first natural step for Epiroc is to extend our current BEV offering. The demand for battery driven models is so great that we can hardly keep pace. We also expect component suppliers to start designing components that are made for battery electrical drives, improving performance and efficiency. With so much focus on batteries worldwide, we also expect some great technological advances which will lead to better range and cost reduction.

In terms of the next steps in developing the next-gen underground load and haul fleet, improved cell density and capacity versus size will impact vehicle dimensions but also the fleet management, centralized charging or charging application.

www.canadianminingjournal.com

V

Far left: Epiroc’s Boomer M2 Battery; left: Epiroc’s Scooptram ST14 Battery, Boomer E2 Battery and Minetruck MT42 Battery units.

CREDIT: EPIROC

tion or a charge station is non-productive time. MacLean EV units have been adopted by mining customers and contractors alike who are looking for safety and productivity for both workers and the environment.

Statement from MacLean Engineering: The next step, and the most important one for underground mining, is the mass implementation of zero emission machines on a global scale. By removing the diesel engine and diesel exhausts, the industry will improve safety, health and working conditions for miners and underground operators everywhere.

MACLEAN ENGINEERING

In 2019, MacLean expanded its battery electric fleet of production support mining vehicles to nine mine sites across three provinces. The company has amassed some 40,000 operating hours since the launch of its EV Series line in 2016.

Since then, the company has sold 31 EV units, across five separate model lines.

This ‘network effect’ rollout included the delivery of the first-ever BEV Ore Flow unit, a BH3 Blockholer, last year.

MacLean’s original diesel Blockholers are well known: the machine is a secondary reduction drill and charge rig that ensures the ore flows in underground mines.

Whether it’s a low hang-up in a drawpoint, or oversize rock on the ground that’s too large for scoops to handle and too disruptive to get rid of with concussion blasting, it’s the Blockholer that solves the problem and ensures that production isn’t held up. And when it’s not tasked with this mission, it can be put to use for ancillary drilling for mine services.

Now, with the EV upgrade completed and launched in 2019, a BEV option is available and MacLean is closer to its goal of electrifying its entire fleet by 2020.

The unique on-board charging design of MacLean’s fleet eliminates the need for special stationary chargers and battery swapping; driving to a battery swap sta-

MacLean, as an organization, is extremely nimble and its collaboration with mining companies sets out clear expectations regarding battery design configuration, vehicle duty cycles, and throughput times. This input is used in designing and customizing vehicles accordingly.

With orebodies becoming harder to access, the increasing focus on the elimination of greenhouse gases, and the lower operating costs of BEV equipment, MacLean Engineering is confident that underground mining electric vehicles are gaining acceptance. MacLean is now taking its ‘EV-proven, EV-ready’ message to the mining world – for production support mining vehicles, considering the benefits of incremental BEV introduction to allow for workforce training and supporting operator buy-in, which will pave the way for broader fleet electrification down the road.

MILLER TECHNOLOGY

MacLean Engineering’s BH3 Blockholer, introduced last year. CREDIT: MACLEAN ENGINEERING

JANUARY 2020

In April 2019, Miller Technology of North Bay, Ont., showcased the Relay, its fully electric utility and support vehicle for underground mining and tunnelling, at the Bauma trade show in Munich.

The Relay features an industry first hybrid charging system which allows for both off-board DC fast charging and on-board AC opportunity charging. It also has a dynamic braking system that prevents unwanted accelerations and maximizes range by converting excess kinetic energy into electrical energy.

The Relay is equipped with a powerCONTINUED ON PAGE 28

CANADIAN MINING JOURNAL |

27

BATTERY ELECTRIC EQUIPMENT

Miller Technology’s Relay electric utility and support vehicle for underground mining. CREDIT: MILLER TECHNOLOGY

ful mid-ship mounted motor with dual output flanges resulting in impressive full time 4-wheel drive. Miller’s system vastly reduces the number of moving parts, maintenance costs, and downtime.

Battery modules used in the energy storage system have passed rigorous highway and marine testing standards to ensure the utmost safety and our modular arrangement makes it possible to adapt the platform to various usage cases.

Operators will appreciate an enhanced driving experience thanks to virtually no noise and minimal vibrations when compared to diesel counterparts. The cockpit is driver focused with touch screen interface capability and display units providing feedback in various forms.

The Relay can be used for many jobs, including transporting workers, materials and supplies.

The company also offers customers an electric conversion for their existing Toyota Landcruiser fleet.

NORMET

Finnish-based Normet launched its battery electric SmartDrive product family this spring at Bauma 2019, in Germany.

The SmartDrive family – under development since 2015 – includes concrete sprayers, emulsion units, cassette carriers, concrete transporter, scissor lift and charging trolley and charging cabinet.

The first SmartDrive machine was tested in the deepest mine in Europe, Pyhäsalmi mine in Finland, for over a year before the official launch, to ensure a safe and proven solution for the market.

Since the launch in spring 2019, Normet SmartDrives have been in customer operations; in concrete spraying operation on a tunnelling site and in emulsion explosives charging in Pyhäsalmi mine.

The SmartDrive line uses the latest

long-life industrial grade lithium-ion battery technology, with fast charging capability and electric motors specifically designed for harsh environments. The batteries have a very long lifetime and a fast charging capability. The onboard charging system requires only 2.5 hours to load the batteries from 0 to 80%; the tunnelling machine needs only 1 hour.

The machine can also be charged any time from any typical underground AC socket or in the matter of minutes by fast chargers. The battery is split into modules: in the case of malfunction of a module, it will be isolated and the rest will continue operating, without forcing the machine down somewhere in the mine or tunnel.

Also, a very special feature of the electric vehicle are the two electric motors, which are redundant as well.

The optimized tuning of the electric machine´s control system reduces the need to use service braking because the braking force is provided by the electric motors. Most of the time, there is a recuperation of power: during downhill driving the braking energy is stored back into the batteries. With all these optimized features, the new generation of Normet mining and tunnelling equipment requires less maintenance and service, and is much more economical than other engine versions.

Statement from Normet:

Normet has selected a state-of-theart lithium titanite oxide (LTO) battery technology for its SmartDrive equipment.

LTO batteries are known for their high level of safety, greater tolerance of ‘abuse’

Statement from Miller Technology:

Our plan for 2020 is to introduce a fully electric low-profile grader at MineExpo.

The company also has in a 3-ton carrier in the works for 2020.

The target for all of our new gear is decreased charge time by leveraging the most current battery technology.

Our Relay, for example, is able to offer a 20-minute charge time.

28 | CANADIAN

MINING JOURNAL

Normet’s Charmec MC 605 VE SmartDrive, used for emulsion charging underground. CREDIT: NORMET

www.canadianminingjournal.com

the battery to recharge during the braking process by converting mechanical energy into electrical energy. This feature is making the industry rethink their mine designs: In the right environment, a BEV could potentially operate for an entire shift on a single charge. This directly translates to added production and increased revenue for the mine.

Staement from Sandvik:

Sandvik’s Artisan Z50 50-tonne haul truck.

CREDIT: SANDVIK

and better avoidance of thermal runaway or overheating. Moreover, LTO batteries have a much better low-temperature performance in comparison with other battery technologies.

Besides the battery technology being the safest possible, it allows extremely long lifetime (approximately 20,000 cycles) and fast battery charging, which eliminates the need for expensive battery swapping. This allows the battery pack to be designed so that batteries are well protected from outside damage and impacts.

During 2020, Normet’s SmartDrives will be delivered to the customers globally.

Normet is bringing SmartDrive equipment to Canada in spring 2020.

SANDVIK

Sandvik released two new BEV products last year – the Artisan A10, a 10-tonne LHD and the Z50, a 50-tonne haul truck. The Z50 builds on the Z40, a 40-tonne truck that was introduced in 2018 and was previously the largest battery-powered truck available. Both products are under Sandvik’s recently acquired Artisan Vehicles division.

Mike Kasaba, managing director of the division, says the company is planning to announce an all-new machine in early 2020 with several features that have never been seen before on underground equipment and are enablers for the effiJANUARY 2020

cient mine of the future.

The Artisan A10 is the most capable loader in its size class; while its carry capacity is 10 tonnes, the outer dimensions of the machine are equal to current 7-tonne diesel loaders. The equipment is not constrained by mine ventilation limitations, as Artisan A10 uses the most powerful electric motors available and a patented lithium-iron phosphate battery system. Artisan’s proven battery system is connected with health and environmental benefits, as the loader produces less heat and zero exhaust emissions, reducing CO2 footprint. Further, packed with innovative design, the Artisan A10 delivers shorter cycle times through higher acceleration and faster ramp speeds, while utilizing regenerative braking to capture energy to recharge the battery.

The Artisan A10 is equipped with a unique battery self-swapping system, speeding up time required for battery change, reducing infrastructure requirements and most importantly, improving safety.

The Z50 is the smallest 50-tonne truck on the market. This battery electric haul truck generates twice the peak horsepower and one-eighth of the heat of its diesel equivalent. Artisan has optimized the recharging process, to ensure that the Z50 will outperform its rivals on tonnes hauled per day.

SAHR (spring applied hydraulic release) brakes with electric regeneration allows for

Our new machines, features and enhancements are all driven by our unmatched number of real production hours on our equipment. We have several advancements in the works right now, all of which are focused on enabling the most productive and efficient underground operations in the world. Not only do we focus on more powerful and productive machines but also on features, systems and infrastructure that improve overall mine productivity and reduce all-in costs.

CMJ

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CANADIAN MINING JOURNAL |

29

BATTERY METALS

Cobalt’s central role in supporting the global battery sector A “just” energy transition is key to the battery revolution

By Benedikt Sobotka

A

recent landmark study by the Global Battery Alliance – a public-private coalition led by the World Economic Forum – found that demand for lithium-ion batteries is expected to increase by 19 times by 2030, reaching 3,600

30 | CANADIAN

MINING JOURNAL

GWh (gigawatt hours). On the basis that batteries are sustainably sourced, a range of socioeconomic benefits would follow, including the creation of 10 million safe jobs, a 70% reduction in the number of people lacking electricity and a 30% emissions reduction in the power and transport sectors. Batteries can, as a result,

provide significant support not only for the Paris Agreement goals but also for a range of the United Nations Sustainable Development Goals (SDGs).

The current value chain, however, would not be able to create these benefits and harness that demand momentum unless it is scaled up through far-reachwww.canadianminingjournal.com

Eurasian Resources Group’s Metalkol RTR hydrometallurgical facility decontaminates historic copper and cobalt tailings deposited by previous operators into the Musonoi river and Kingamyambo dam near Kolwezi, DRC. CREDIT: EURASIAN RESOURCES GROUP

ing collaboration among a range of entities, including businesses, governments, organizations, civil society and academia.

A ‘just’ energy transition According to the report, which was delivered with the contributions of Global Battery Alliance members, and global consultancies McKinsey and SYSTEMIQ, collaborative action should aim to address three core areas.

One of these is the facilitation of a “just energy transition” and economic JANUARY 2020

development in line with human rights and the SDGs. Batteries, in short, may directly affect the wellbeing of people and local communities and this is particularly true of areas and regions that rely on the sourcing of battery materials. Over two thirds of cobalt, which is identified as a key metal by the Global Battery Alliance, is found in the Democratic Republic of the Congo (DRC). More than 250,000 people are estimated to work in the sector in dangerous conditions, about 35,000 of them children. By some estimates, as many as 1 million children are affected by the DRC’s mining industry.

In order to facilitate a just energy transition, it is important to ensure that cobalt is produced responsibly and that efforts to tackle challenges associated with poor working conditions and human rights issues, including forced and child labour, continue to be heightened.

Nowhere is this more relevant perhaps than vulnerable communities in Kolwezi, DRC, which is home to abundant cobalt reserves and cobalt mining activity. The vulnerability of the communities lies in the negative consequences that may arise in connection to cobalt production that is not responsible. These activities can put in jeopardy the health and longterm development of participants, some of whom may be young and lack access to alternative livelihood opportunities as well as healthcare and education.

With that in mind, Eurasian Resources Group (ERG) is proud to support the Good Shepherd International Foundation’s Bon Pasteur program, as part of which over 1,900 children in 2018 and early 2019 have been protected from the worst types of child labour. Last summer, Kolwezi saw the inauguration of a Bon Pasteur Child Protection Centre, supported by ERG, providing a safe space and extending sustainable opportunities for up to 1,000 children to transition out of mining. A comprehensive facility, the centre provides free education as well as healthcare, nutrition, counselling and human rights training, and the opportunity for families to learn about alternative livelihood opportunities. In addition to

child labour, the Bon Pasteur program has helped address gender-based violence, food insecurity and a lack of vital social infrastructure over the past seven years. The program’s founder, Sister Catherine Mutindi, was recently awarded the Opus Prize for her outstanding efforts in Kolwezi.

While that is a commendable contribution, some of the challenges that the country faces are deep-seated and this includes the irregularities that are currently seen in the cobalt value chain. One of the poorest countries in the world, the DRC receives only 30¢ of every $1,000 of economic value generated in a mobile phone. The mobile phone would simply not exist without the DRC and its cobalt and yet people at the beginning of the supply chain are not seeing the benefits they should in terms of alternative livelihoods and sustainable jobs. It is therefore encouraging that the GBA study found that the global battery industry, powered by rising demand for electric vehicles, could produce 10 million safe, sustainable and good quality jobs by 2030. Importantly, more than half of these jobs would be in emerging economies. These jobs could help address the current imbalance, ensure that the energy transition is inclusive, and its benefits are distributed across wide geographies.

In this context, the report also alludes to a need for cobalt producers to monitor and manage their environmental impact. While the green economy revolution would not be possible without cobalt, a culture of vigilance and innovation can accelerate its momentum.

This focus is strongly reflected at ERG’s Metalkol RTR, a hydrometallurgical facility to decontaminate historic copper and cobalt tailings deposited by previous operators into the Musonoi river and Kingamyambo dam near Kolwezi. As a result, over 1.3 million tonnes of historical tailings have already been reprocessed at Metalkol instead of continuing to pollute the local environment.

An aim to protect and restore the environment is also embedded within ERG’s CONTINUED ON PAGE 32

CANADIAN MINING JOURNAL |

31

BATTERY METALS

ERG’s CEO, Benedikt Sobotka, attending the inaugural ceremony of the Bon Pasteur Child Protection Centre in Kolwezi, DRC.

Clean Cobalt Framework, which was launched at Metalkol RTR. Its progress was recently independently verified for the first time by PwC. Among the seven goals that comprise ERG’s Framework is ERG’s commitment to sourcing cobalt that is free of child labour, traceable and does not come from artisanal mining.

Blockchain can also assist in providing an additional source of reassurance as to the origin of sourced cobalt. To that end, ERG is exploring a blockchain-based solution built on the IBM Blockchain platform. Moreover, ERG recently joined a consortium of seven leading mining companies to accelerate the responsible sourcing of materials, including cobalt through the World Economic Forum by experimenting, designing and deploying blockchain solutions. This initiative echoes the Global Battery Alliance’s call for greater collaboration and inclusivity across the industry. While blockchain can be useful in the cobalt value chain, though, a more holistic approach to ensuring responsible production is still needed with due regard to safety, human rights, labour laws and environmental impacts.

The central role of cobalt for the future A strong momentum is in motion, with automotive manufacturers set to launch 32 | CANADIAN

MINING JOURNAL

more than 300 electric vehicle (EV) models in the next five years. According to research by JP Morgan, electric vehicles (EVs) and hybrid electric vehicles (HEVs) will account for an estimated 30% of all vehicle sales by 2025. By that point, ERG expects a more than fourfold increase in cobalt demand in the EV segment, while CRU – in the same area – predicts an uptick of 25% next year. Also significant is that cobalt-bearing NCM and NCA batteries are forecast to expand their market share up to 80% by 2025.

Metalkol RTR, ERG’s cost-effective cobalt and copper facility in the DRC, is well positioned to continue to service this increasing demand.

A significant portion of cobalt demand is driven by China, which, according to the Harvard Belfer Centre, aims to have 5 million EVs on the road by 2020 and over 80 million by 2030. This is complemented by the Chinese government’s aim to strengthen the EV industry by stimulating technological innovation, reducing pollution and promoting the technology to sectors beyond private vehicles, including transportation. According to the China Association of Automobile Manufacturers, the number of New Energy buses found in China now exceed 340,000, making it a world leader in the category.

While electromobility is an import-

CREDIT: EURASIAN RESOURCES GROUP

ant lever, it is not the only way in which cobalt supports the Fourth Industrial Revolution. 5G smartphones, in particular, are expected to take off next year, with up to 190 million devices being forecast to be shipped to China, according to IDC, making up 14% of smartphones imported.

That being said, this extraordinary demand growth is not reflected in current cobalt prices. Those prices are not sustainable, particularly given the recent earlier-than-expected closure of the Mutanda mine, the largest cobalt producer in the industry. This will take around 20% out of the global cobalt supply and it is important that this is replenished with responsible production.

The news may provide a short-term price support as consumers, particularly those from the Chinese market, may turn to the spot market.

At any rate, cobalt will continue to be a valuable contributor to the Fourth Industrial Revolution and, sourced responsibly, can be instrumental in unlocking the tremendous potential of the global battery sector.

CMJ Benedikt Sobotka is CEO of Eurasian Resources Group and co-chair of the World Economic Forum Global Battery Alliance. ERG is one of the world’s leading mining and smelting groups. www.canadianminingjournal.com

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CANADIAN MINING JOURNAL |

33

UNEARTHING TRENDS

If you’re not planning for the SAP S/4HANA migration now, you need to start

By Michael Gilbert

T

he mining and metals sector is making some headway when it comes technology modernization, but hasn’t completely shaken its long-held reputation as a laggard in the adoption of leading enterprise resource planned (ERP)-enabled business practices.

The sector’s track record shows a series of missed value creation opportunities inherent in large-scale technology-enabled transformations – due, in large part, to capital constraints driving a view of SAP investments as a necessary burden or technology currency-based expenditure rather than a strategic investment in capability development.

That mentality is only just beginning to shift as more companies embrace digital transformation and ERP currency. Adopting the next generation of SAP products presents a unique opportunity for executives to steer their organization down the path of a value-driven adoption of SAP S/4 HANA. A critical mass of companies around the world still need to initiate the migration of their legacy ERP Central Component (ECC) environments to S/4 by 2025 – when SAP ends its maintenance on its pre-HANA platforms. Most companies haven’t even begun to contemplate this transition – even though many of these projects will ultimately be re-implementations versus migrations. Depending on the scope of the project, preferred implementation strategy and deployment approach, the path to S/4 could take several years.

The good news is that there’s still time, and the opportunity is immense for mining and metals companies that want to get a head start now. Adopting S/4 is a chance for companies to simplify their business processes and transform their enterprise platform, by taking advantage of new capabilities that can drive real business value through improved scalability, better analytics and increased efficiency and accuracy through process automation.

If it sounds extremely complicated, it can be. But harvesting some of these sources of value requires organizations to look at their capabilities through a completely different lens. S/4 is not just an ERP upgrade – it’s a new way of running your business, a philosophical shift towards becoming an agile and intelligent enterprise. And while there is no one-size-fits-all approach to navigating this journey successfully, there are several guiding 34 | CANADIAN

MINING JOURNAL

Adopting S/4 is a chance for companies to simplify their business processes and transform their enterprise platform, by taking advantage of new capabilities that can drive real business value through improved scalability, better analytics and increased efficiency and accuracy through process automation. principles to help secure the right outcomes for any organization:

1

Stratify the process. Identify unique processes and focus solution design discussions accordingly. Companies must be prepared to change and adopt leading practices in cases where S/4 can drive an equally acceptable, albeit different outcome from the legacy solution.

2

Automate your enterprise. Process automation is central to any value creation plan. It can drive efficiency, protect total cost of ownership and keep the new S/4 platform on the latest release by minimizing the need for system customization.

3

Build the right competency. Invest in an organizational capability to sustain the new enterprise platform. Unlocking the value of S/4 is a journey that won’t be completed during your initial deployment. Companies must be ready to undertake a continuous improvement program to ensure their solution evolves in lockstep with the business.

CMJ MICHAEL GILBERT is the EY Canada Agile Business Transformation Leader and leads SAP implementation projects for companies across sectors. He is based in Toronto.

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