Booming demand for critical minerals could harm the environment, not save it

Fossil-fuel-based power generation is losing its financial advantage over energy from renewable sources, largely thanks to steadily declining prices for green power - solar PV and onshore wind are now just below the critical fossil-fuel cost range - and with the arrival of better and cheaper storage technology. However, carbon power still seems to hold one trump card: it uses far fewer critical and rare-earth minerals than cleaner counterparts.

This worries economic analysts, who predict large deficits affecting the industry if new mining endeavours fail to succeed in unearthing commodities essential for electric vehicles and other green power developments. On the other hand, environmental activists worry that a rushed mining boom risks the environment instead of saving it. Both sides have good arguments in their favour. 

EVs require more than 200kg of minerals per vehicle, according to data collected by the International Energy Agency (IEA). A conventional combustion engine vehicle uses less than 50kg, mostly copper and a bit of manganese.

For power generation, offshore wind (OFW) plants seems a clear winner in the amount of minerals required per megawatt. OFW devours nearly 16,000kg per MW, compared to less than 2,000kg for natural gas power production.

Solar PV seems far more economical than offshore or onshore wind power. According to the IEA, this is because minerals used in wind plants are based on farms' direct-drive permanent magnet synchronous generator system and the amount of minerals in array cables and those used in doubly-fed induction generator systems.

On the other hand, PV is much more hungry for silicon, or polysilicon, an essential raw material in solar cells. Healthy efforts towards building higher environmental standards can make producers sweat -  PV manufacturing is often linked to high carbon emissions, toxic waste and unsustainable mining practices, as well as habitat loss.

An example from China in 2017 shows how prices of pure metallurgical silicon can rapidly respond, jumping by more than one-third after Chinese authorities closed several factories amid an environmental crackdown, coinciding with lower polysilicon output. 

Solar PV worries analysts and environmentalists, and not only because of its mineral intensity. Waste and recycling are also on their mind. PV cells contain valuable resources. When dumped in landfill, toxic materials such as lead may leach out as they break down, polluting the environment. Instead, waste managers must ensure these are disposed of in hazardous waste landfills, the US Electric Power Research Institute says. Panels are recyclable, but that is still very expensive. So production largely outperforms recycling, and analysts worry that most PV will go straight to the landfill. 

Despite cost and demand challenges for recycling, second-hand is trending in many unecpected parts of the world. Conflict-torn communities nowadays jump at the opportunity to acquire second-hand solar PV panels, effectively extending their half-life.

Afghan opium producers were reported to be using solar panels for heroin production. In Idlib, Syria, dwellers point to their benefits over carbon-powered generators amid frequent blackouts and costly generators. One seller of solar panels there told the New York Times that his best sellers were Canadian-made 130W panels imported into Syria after a few years at a solar farm in Germany, costing $38 each. There are examples when criminal groups trafficking old solar panels across borders originally destined for waste or recycling. Some point to insufficient legislation in the EU as one problem. 

More worryingly, after years of declining prices, PV projects are set to become slightly costlier instead of cheaper. The oil and gas lobby has jumped at the opportunity to attack renewable power.

The reality is partly down to rare-earth metals. Analysts at Rystad attribute some of the surging costs to rising commodity prices and shipping costs. Silver, for which the PV sector takes a whopping 10 per cent of global demand, saw prices rising. Silver used to be a larger part but still remains integral for the electrical setup of panels. Future silver demand for hybrid and EV cars may drive up costs further, analysts predict.  

Experts worry that the renewable industries could run dry of copper, a key ingredient in wind and solar PV tech. Business intelligence firm CRU Group expects a 4.7m metric tons copper shortfall by 2030 - which may double if no new copper mines are built, commodities trader Trafigura Group thinks.

These estimates hinge on demand for renewables. However, if predictions meet reality, the world will require around eight new mining projects equivalent to the Atacama desert-based Escondida mine in Chile, partly owned by mining giant BHP.

Chile and Peru (which has struggled with a new illegal gold mining boom after gold prices surged and is now suffering from the environmental and social impact) have the largest copper reserves and also mine the most, USGS data suggests. Examples like Covid-19, dealing a heavy blow to global cobalt mining, further constrict supply for green tech.

​​Lithium, a key ingredient in battery tech, is also predicted to hit a shortfall. By 2027, the fast rise of EVs is set to create a severe lithium supply deficit, Rystad says. Hasty decisions to fill gaps could be detrimental for the environment and risk the very effort renewables meant to bring in the first place.

Hard rock lithium mining needs large amounts of water and may release 15 tonnes of CO2 for every tonne of lithium mines. E&T reported on the environmental risks of lithium brine extraction. Less CO2 intensive than rock mining, it consumes even more water and poses crippling effects on places of a scarce water supply. 

Environmentalists point to examples that lay bare the environmental devastation of legal mining. Zinc, a key ingredient in wind farms, must be mined carefully with waste of rock in mind. Alaska's Red Dog mine, the world's largest producer of zinc, plagues nearby towns and habitats. While the US state allows mining companies to discharge treated wastewater into rivers and streams, it triggered valid concerns among residents in nearby populated areas such as Kotzebue or Kivalina.

Water and fish are affected by leaching metals and acids from waste rocks. Red Dog, according to recent data, is still the most polluting mine on US soil, the US EPA says. The mine is a stark example that may have contributed to Joe Biden's decision to move more rare earth mineral mining abroad and concentrate on processing and building green tech instead. US allies such as Canada and Malawi should do the dirty work, the mining work. 

The decision dealt a blow to local American miners. Another reason is to counter processing dominance by Chinese competitors. 

The trend to push off the environmental responsibility of mining to other nations while moving up the supply chain is as logical as it is problematic. Officially, the aim is to reduce resource dependence. The US Pentagon has invested in a US-based rare-earth magnet manufacturer sourcing many of its products from China. The goal is to counter Chinese mining and processing. China extracts over 70 per cent of the world's rare earth minerals and accounts for 90 per cent of processing minerals into magnets. 

Rare mineral resource dependency also seems to bother strategists in Britain. Last year, new plans emerged for a new magnet-processing facility in Yorkshire. It would produce magnets to bolster the growing appetite for offshore wind and EVs. 

The cherry on the cake of the environmental debate between miners and climate activists is the drive to 'go green'. Parts of the mining sector attempts to greenwash its dirty image as a carbon polluter. Last year, BHP pledged to go 100 per cent green. Though amiable to use renewable energy at the mine itself, this isn't a big step in progressing on how environmentally friendly the mining operation is on the land, the biodiversity, rivers and the impact on locals and the climate.