For millennia, we’ve mined and refined materials to power our civilisations and industries, and feed consumer demand for products. This has traditionally been a linear process: dig material from the ground, purify and convert it into useful forms, manufacture products for use and then dispose of these products.
However, with electric vehicles – which are subject to technology disruption, changing regulations and uncertain geopolitical factors – driving a surge in demand for battery materials, is it time to rethink the mining value chain?
These devices – currently found within homes, warehouses, aging electrical infrastructure and more – make up the “urban orebody”. Their materials could be worth tens of billions of dollars. And if the industry can recycle these materials, it could reduce both the time to get metal to market and environmental impacts compared with traditional mining and materials processing.
So, if more minerals, metals, and battery grade materials needed for the energy transition come from recycling, rather than new mines and facilities, how will this impact established players within the mining industry?
Assessing the urban orebody
Modern technologies are capable of recycling certain commodities, such as steel, aluminium, copper and lead. As Pitt explains, when existing technologies and devices reach end of life, the materials can be economically placed back into service to create more products for consumption.
How could the urban orebody impact the traditional mining industry?
The emergence of recycling means miners of the future can extract value from both ends of the value chain: natural resources in the earth’s crust, and the urban ore body that exists in recovered batteries, off spec cathode materials and black mass.
Pitt explains why.
So, what implications could this urban ore body have on traditional miners that follow a linear mining process?
Investing in a new mine asset is typically a long and high-risk process, mainly due to the uncertainty in the quality and quantity of the ore body involved and the cost of mining and refining it. Imagine a world where these are known, and the mine life is set to infinity.
Explaining the leased mineral model for battery materials
Consider the fundamental economics influencing the commercial landscape. Cathode material is the major contributor to battery cell cost. This is primarily driven by the purchase price of the key mineral feedstocks used.
But what if you didn’t need to buy the key minerals to make a battery, and could lease them instead?
This shift in mindset opens new possibilities and commercial models to drive down product costs and incentivise even more circularity throughout the system.
The benefits of a mineral leasing model
Pitt says an opportunity exists to generate longer term recurring revenue streams that move away from a life-of-mine model and to a life-of end product model.
Pitt says this system should further incentivise increased sustainability of battery products, as the economics of returning minerals for reprocessing will drive the environmental footprint down to the bare minimum involved to reprocess.
Every option will play a role meeting demand for battery materials
As with energy transition being a multi-solution endeavour, Pitt believes there is no single approach to meeting growing demand for battery materials.
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