How to mine without mining

One of the first mining news stories for the year was a report by BMI on copper prices, in which the research firm forecast these could jump by 75% in 2025.

You don’t have to guess the reasons, they’re still the same: the energy transition will drive demand, helped by an expected decline in the U.S. dollar. That’s the same BMI, by the way, that has forecast a jump in EV sales this year in the U.S. to 17.9% of the total. From 8.8% as of end-2023.

Anyway, forecast reliability aside, warnings about copper shortages have abounded in the past two years. Actual prices have not followed these warnings because traders are strange and fascinating creatures that rarely take a long-term view at the commodities they trade. They don’t need it.

But strange and fascinating creatures aside, the warnings of a copper shortage, coming both from analysts and inside the mining industry, have coincided with a surge in what miners and governments like to call resource nationalism. Which is a problem. To overcome it, miners have to learn to mine without really mining, apparently. Somehow.

“Resource nationalism is a risk to the energy transition because we need to be encouraging investment in new mines and new capacity for the future if we are going to meet the demand we see ahead.”

This striking revelation comes from the CEO of Teck Resources, the Canadian heavyweight, who, like all miners, does not like resource nationalism but there is little he can do about it.

That little appears to be, per the FT, “Mining companies must step up efforts to protect the environment or they will be blocked from developing the supplies of metal needed for the global transition to clean energy.”

I suspect that’s what Energy Secretary Jennifer Granholm dubbed “sustainable mining” back in 2021. Mine, but mine so it doesn’t show you’ve mined. Quite a conundrum. Because the transition needed more of these.

The situation right now is as follows: resource-rich countries need the money international miners are bringing in but they want them to be less of a menace on the environment. Much less. In fact, if they can come up with some form of mining endoscopy and extract ore this way that would be great — only it’s not really possible.

Because mining endoscopy is not possible, miners are in for some rather hard times. And so is the transition, which has so far been going on with perfect flawlessness. And miners don’t like hard times any more than other industries do.

So why would they take the trouble to pursue some imaginary sustainable mining vision? Well, they probably won’t. Especially when copper prices are down because traders are disappointed with China’s latest GDP report that failed to show a 20% growth rate or something.