Dr Simon Michaux

The Implications of Peak Mining for the Industrial Sector

Mining Supports Industrialisation

• Manufacture and application of technology at all scales makes up the industrial grid

• That technology allows us to live in the numbers we do and in such densely populated cites

• Big agriculture (thus our food) depends on industrial services

• Industrial grid heavily dependant on raw materials from mining

• Mining is the exploitation of a non-renewable natural resource

The impact of mining and processing minerals

Payal Sampat in a Worldwatch Institute report (State of the World 2003)

“consumes close to ten percent of world energy, spews almost half of all toxic

pollution from industry in some countries, and threatens nearly 40 percent of the world’s undeveloped tracts of forests—while generating only a small share of

jobs.”

Mining empowers everything else by supplying raw

materials for manufacture and energy

40% Decrease in Multifactor Productivity

Well, GOLLY! We aren’t growing new deposits are we?

Driven by increasing demand

Economies of Scale Has Carried the Industry

71.5

62.3 61.6

55.0

57.0

59.0

61.0

63.0

65.0

67.0

69.0

71.0

73.0

75.0

1980's 1990's 2000's

Ave

rage

A*b

Comminution Impact Breakage A*b

Ore has been progressively getting harder

Softer

Harder

~3000 Drop Weight Tests

What does this mean?

More power draw is required to break the rock

Target Grind Size is Decreasing

1 mm1 mm

Target ore P80 = 150mm

10 mm10 mm

Target ore P80 = 4mm

Ore grain size becoming more disseminated

General form of the Energy-Size relationship

An exponential increase in power draw

A decrease in plant final grind

size P80

=A decrease in metal grain size

=

En

erg

y, k

Wh

/t

Hukki 1962

Economic goal posts are shifting for future deposits

• Huge low grade deposits

• Penalty minerals more prominently present in deposit that prevent efficient processing

• Ever decreasing grind sizes (close size 5-20mm)

• Operating on an economy of scale never been seen before (4MT blasted rock a day, 40% of which is ore!)

• To stay economically viable, economics of scale have to be applied. Operations will double and triple in size.

All of this based on the assumption that there is no energy or water shortage

With a continuing grade of 0.5% this will require 20000Mt of Rock

With a decrease of grade to 0.2% this then requires 50000Mt of Rock

Copper Demand Outlook

Is this sustainable?

World Cu grade 0.5%

17Mt

3400Mt of RockWorld Cu grade

1.6%

Eventually the cost of dealing with the wastes will exceed the value of the metal…

With current estimations the demand for copper will increase to ~100Mt by 2100

Mining Challenge: Energy Shortage

Source: Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) 2008

Energy consumption in mining increased 450% in the last 40 years

Peak GasYear 2018

Zittel, W. et al, Fossil and Nuclear Fuels – the supply outlook Energy Watch Group March 2013

CSG and shale gas has pushed this date back from approx. 2011

Peak Oil - conventional and unconventional

Source: The Oil Drum

Tar and oil sands have pushed back the peak of total oil supply back 6-7 years

Year 2012

Peak Coal

Zittel, W. et al, Fossil and Nuclear Fuels – the supply outlook Energy Watch Group March 2013

Year 2020

This should frighten the hell out of any thinking politician

World supply of fossil fuels and uranium

Zittel, W. et al, Fossil and Nuclear Fuels – the supply outlook Energy Watch Group March 2013

Peak energy approx. 2017

Dynamic Interaction and Exacerbation

• Power & water shortages

• Decreasing grade requires more tonnes of rock extracted for the same resulting amount of target metal.– More energy is needed (diesel and electrical power draw) per unit of

extracted metal– More potable water is needed per unit of extracted metal

• Increasing ore hardness requires more power draw to crush and grind the ore

Dynamic Interaction and Exacerbation• Decreasing grind size due to finer mineral grains requires more

power draw to crush and grind the ore– More water is needed per unit of extracted metal– Water recycling is more difficult– More disseminated finer grained rocks are usually harder to crush and grind

• Exponentially more energy demand from shrinking energy sources

• To remain economically viable operation scale has to double/triple in size

• Metal demand is growing fast

What we must choose to do to, if our industrial sector is to survive

Room to Manoeuvre

MountingStress

Drift

Fundamental Reform

EarlyCrisis

ExistentialCrisis

MountingStress

Drift EarlyCrisis

Trapped Transition

Trapped Transition

Drift/Decline

Write-off & Reset

Decay/Collapse

ExistentialCrisis

Drift/Decline

Decay/Collapse

Inelastic oil supply 2005

Leadership & Vision

Understandtrue implications

Peak Total Energy2017

We

are

here

DecreasingGrade

Sovereign DebtDefault

DecreasingGrind size+

Increasing Depth+

Peak FossilFuel+

PeakMining

CreditFreeze

+ StructuralInflation

+FIATCurrency

Devaluation

+Peak

Finance

PeakManufacturing

PeakIndustrialisation

=

=

The End of Materialism

The End of the Industrial Revolution

Expansion of production needed to stay viable

Expansion of money needed to service debt

The Industrial Big Picture

The fate of the current system of industrial management

This is not the end of industrialization but the end of the current way of doing this.

A new system will be developed through necessity.

Are these issues really unknown to the senior

global decision makers?

What happens to due process and democracy

when there is not enough to support everyone?

Systemic environmental disruption

Natural raw materials unavailable for

industrialisation

Energy supply disrupted then

unavailable

• Reset all FIAT currencies – asset based• Restructure all debt• Need to grow into new system

• Cannot sustain growth• Cannot grow economy system• Change to alternative energy system• Rebuild all infrastructure to meet

requirements of new energy system

• Cannot supply raw materials for construction or manufacture at needed rate or volume, if at all

• Need to reassess what is really needed

• Mine our rubbish dumps

• Cannot run any existing system for very long

• Resilience and redundancy required on all fronts

• Practical carrying capacity vastly reduced

Financial

Systemic

Meltdown

Popu

latio

n O

vers

hoot

• Puts pressure on all other sectors except finance• Most people of which have few relevant skills

outside existing paradigm• Wilful ignorance & aggressive apathy

The ethics of what gets used and for whom becomes relevant

• Person A and Person B want the same pallet of aluminum ingots

• Person A wants to build a roof over his swimming pool at his holiday home– has lots of $$$

• Person B wants to build a series of bore water pumps in a region with drinking water shortages– represents a nation state government where resource is

situated

But money has become really unstable

The ‘have-nots’ vastly outnumber the ‘haves’

grab your pitch forks and burning torches, its time for a visit to the castle…

Personal epiphany after a 15 year professional career

You can be at the right place at the right time, when that system breaks…

You can’t make a system change that doesn’t want to, that also regulates its own authority

and has its own political power source

Conventional thinking has no hope for the future.

Unconventional thinking and asymmetrical strategyis the way forward

Timing is the key to everything

Questions???

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