The Truth Behind European Big Oil’s Bet On Hydrogen

By Alex Kimani - Jan 15, 2023,

• European governments are betting increasing amounts of cash on a hydrogen revolution.
• 
  
• Report: Of the refining sector’s €39 billion in planned investments in alternative fuels till 2030, nearly 75% will go towards increasing biofuels production.
• 
  
• The lion’s share of big oil’s green investments in downstream is focusing on bringing down carbon-intensity of their refinery operations.

Back in 2020, the European Union set out its new hydrogen strategy as part of its goal to achieve carbon neutrality for all its industries by 2050. The regional bloc outlined an extremely ambitious target to build out at least 40 gigawatts of electrolyzers within its borders by 2030, or 160x the current global capacity of 250MW. The EU also plans to support the development of another 40 gigawatts of green hydrogen in nearby countries that can export to the region by the same date. The EU also aims to have at least 6 gigawatts of clean hydrogen electrolyzers installed by 2024. But it appears European oil majors are only willing to dance to their own tune. A new study on behalf of Transport & Environment (T&E) has revealed that whereas Shell Plc (NYSE: SHEL), BP Plc (NYSE: BP), TotalEnergies SE (NYSE: TTE), ENI S.p.A (NYSE: E) and Repsol SA (OTCQX: REPYY) are actively investing in hydrogen, the lion’s share of their green investments are aimed at lowering the carbon intensity of their refinery operations rather than developing green transport fuels. 

Related: Freeport LNG Denies Reuters Report Claiming Further Restart Delay

Indeed, the study has found that of the refining sector’s €39 billion in planned investments in alternative fuels till 2030, nearly 75% will go towards increasing biofuels production. New advanced biofuels (HVO) plants will receive €2 to €3 billion in investments, doubling production capacity to 10 megatonnes by 2030, with the T&E analysis saying that’s 4 times higher than what can be sustainably sourced in the EU.

“Oil producers are promoting hydrogen as their big bet for the future, but in reality their investments in green hydrogen are pitiful. Instead they are focusing their new refining capacity on biofuels which cannot sustainably supply the world’s transport needs. This is not an industry pushing the boundaries of clean technology,” Geert Decock, electricity and energy manager at T&E, has said.

The oil refining industry is one of the key consumers of hydrogen right now, but most refineries are using “gray hydrogen”--derived from fossil fuels, rather than clean, green hydrogen. The T&E study says that oil companies plan to invest around €6.5bn in so-called ‘low carbon’ blue hydrogen to clean up their production processes, double what they are spending on the production of green hydrogen and e-fuels.

“Where oil producers are investing in hydrogen, most is going towards replacing dirty gray hydrogen operations with blue hydrogen, which still uses polluting fossil gas. Instead of wasting their time on easy, short-term solutions, oil refiners should switch to producing green hydrogen and e-fuels for ships and planes today,” Geert Decock has concluded.

Betting On Hydrogen 

Still, European governments are betting increasing amounts of cash on a hydrogen revolution in a bid to reduce carbon emissions and meet its industrial ambitions. European Commission President Ursula von der Leyen recently promised a €3 billion investment vehicle, dubbed a hydrogen bank, that will “help guarantee the purchase of hydrogen” by spurring demand using money from the EU Innovation Fund.

The continent has already seen €13 billion in state aid approvals for national and cross-border projects so far. These include €5.4 billion for Hy2Tech, a cross-border initiative that aims to perfect hydrogen technology; €5.2 billion for Hy2Use which will invest in applications in hard-to-decarbonize sectors such as cement, steel and glass; more than €2 billion for German projects in steel; €220 million for a Spanish plant and €194 million for a Romanian plant. The EU hydrogen strategy comes with a hefty price tag estimated at $430B. The European Commission has set a target to boost hydrogen’s share to 14 percent of the EU’s final energy demand by 2050. Last year hydrogen accounted for a mere 2.5 percent of the world’s final energy demand.

Good news for natural gas companies: Although Brussels clearly favors “green” hydrogen produced by renewable energy, it has signaled that it will also encourage the development of "blue" hydrogen that is produced from natural gas paired with carbon capture and storage (CCS). The EU has said that hydrogen will play a key role in helping decarbonize manufacturing industries and the transport sector. The organization says it will support blue hydrogen during a "transition phase," although it has not mentioned it in its topline targets. The bloc plans to invest €18 billion in blue hydrogen projects.

The decision by European policymakers to support blue hydrogen came after years of hard lobbying by more than 30 energy companies including ExxonMobil, ENI, Shell, Total, Equinor ASA (NYSE: EQNR) and other European natural gas companies which called for a ‘‘technology-neutral strategy’’ arguing that renewables such as wind and solar cannot grow fast enough to power the “clean hydrogen” sector to meet decarbonization goals. The signatories have claimed the green hydrogen industry is currently too small to spark the growth of a large-scale European hydrogen economy in the space of just a decade.

By Alex Kimani for Oilprice.com

China Petrochemical Plant Shut After Huge Explosion

By Alex Kimani - Jan 16, 2023

• China's Panjin Haoye Chemical Co Ltd’s entire oil refinery and petrochemical complex was shut down after a huge explosion.
• 
  
• The explosion killed five and left eight missing on Sunday.
• 
  
• The plant has a crude refining capacity of 130,000 bpd.

China's Panjin Haoye Chemical Co Ltd’s entire oil refinery and petrochemical complex was shut down after a huge explosion killed five people and left eight missing on Sunday, Reuters has reported. 

According to Chinese state television, the explosion occurred at 3:13 p.m. (0713 GMT) on Sunday while the plant was undergoing maintenance work at an alkylation facility. Xu Peng, has estimated that the Haoye facility was processing at 62.5% of its crude refining capacity of 130,000 barrels per day (bpd) through 2022. The plant processed ~110,000 bpd in December, according to another China-based trade source.

The explosion has come at a time when crude prices thanks to increasing demand in China following its latest re-opening. RBC energy strategist Michael Tran says the "Chinese consumption machine" appears to be ramping up after December crude imports totaled 10.9M bbl/day, up 830K bbl/day from the previous 11 months of 2022. 

Meanwhile, China’s crude inventories are steadying but have fallen~30M barrels from the summer 2022 peak. Front-month Nymex crude for February delivery settled +8.2% to $79.86/bbl at the end of last week while March Brent crude closed +8.5% to $85.28/bbl, both posting their forth weekly gain in five weeks.

China's economic reopening has been the primary driver for higher oil prices, with signs of easing inflation in the latest CPI data also adding to the optimism about the U.S. economy either heading for a mild recession or a soft landing. Hedge fund trader Pierre Andurand has told Bloomberg that global oil demand could soar as much as 4% in the coming year if the world manages to fully emerge from Covid restrictions. Andurand has said that oil demand may increase by 3 million to 4 million barrels a day in 2023 helped by a switch to oil from gas. 

By Alex Kimani for Oilprice.com

SpaceX Rocket Sends Solar Power Prototype Into Orbit

By Brian Westenhaus - Jan 17, 2023, 12:00 PM CST

• The Caltech Space Solar Power Project prototype launched into orbit as a part of an ambitious plan to harvest solar power and beam it back to Earth. 
• 
  
• Space solar power provides a way to tap into the practically unlimited supply of solar energy in outer space.
• 
  
• A Momentus Vigoride spacecraft carried aboard a SpaceX rocket on the Transporter-6 mission carried the 50-kilogram SSPD to space

The Caltech Space Solar Power Project (SSPP) prototype launched into orbit, dubbed the Space Solar Power Demonstrator (SSPD), will test several key components of an ambitious plan to harvest solar power in space and beam the energy back to Earth.

Space solar power provides a way to tap into the practically unlimited supply of solar energy in outer space, where the energy is constantly available without being subjected to the cycles of day and night, seasons, and cloud cover.

For more lots more images, gifs and video, here are the links: 1st, Cal Tech’s press release. Then 2nd, the project web site.

The launch represents a major milestone in the project and promises to make what was once science fiction a reality. When fully realized, SSPP will deploy a constellation of modular spacecraft that collect sunlight, transform it into electricity, then wirelessly transmit that electricity over long distances wherever it is needed – including to places that currently have no access to reliable power.

A Momentus Vigoride spacecraft carried aboard a SpaceX rocket on the Transporter-6 mission carried the 50-kilogram SSPD to space. It consists of three main experiments, each tasked with testing a different key technology of the project:

• DOLCE (Deployable on-Orbit ultraLight Composite Experiment): A structure measuring 6 feet by 6 feet that demonstrates the architecture, packaging scheme and deployment mechanisms of the modular spacecraft that would eventually make up a kilometer-scale constellation forming a power station;
• ALBA: A collection of 32 different types of photovoltaic (PV) cells, to enable an assessment of the types of cells that are the most effective in the punishing environment of space;
• MAPLE (Microwave Array for Power-transfer Low-orbit Experiment): An array of flexible lightweight microwave power transmitters with precise timing control focusing the power selectively on two different receivers to demonstrate wireless power transmission at distance in space.

An additional fourth component of SSPD is a box of electronics that interfaces with the Vigoride computer and controls the three experiments.

SSPP got its start in 2011 after philanthropist Donald Bren, chairman of Irvine Company and a lifetime member of the Caltech Board of Trustees, learned about the potential for space-based solar energy manufacturing in an article in the magazine Popular Science.

Intrigued by the potential for space solar power, Bren approached Caltech’s then-president Jean-Lou Chameau to discuss the creation of a space-based solar power research project. In 2013, Bren and his wife, Brigitte Bren, a Caltech trustee, agreed to make the donation to fund the project. The first of the donations (which will eventually exceed $100 million) was made that year through the Donald Bren Foundation, and the research began.

Bren said, “For many years, I’ve dreamed about how space-based solar power could solve some of humanity’s most urgent challenges. Today, I’m thrilled to be supporting Caltech’s brilliant scientists as they race to make that dream a reality.”

The rocket took approximately 10 minutes to reach its desired altitude. The Momentus spacecraft was deployed from the rocket into orbit. The Caltech team on Earth plans to start running their experiments on the SSPD within a few weeks of the launch.

Some elements of the test will be conducted quickly. “We plan to command the deployment of DOLCE within days of getting access to SSPD from Momentus. We should know right away if DOLCE works,” said Sergio Pellegrino, Caltech’s Joyce and Kent Kresa Professor of Aerospace and Professor of Civil Engineering and co-director of SSPP. Pellegrino is also a senior research scientist at JPL, which Caltech manages for NASA.

Other elements will require more time. The collection of photovoltaics will need up to six months of testing to give new insights into what types of photovoltaic technology will be best for this application. MAPLE involves a series of experiments, from an initial function verification to an evaluation of the performance of the system under different environments over time.

Meanwhile, two cameras on deployable booms mounted on DOLCE and additional cameras on the electronics box will monitor the experiment’s progress, and stream a feed back down to Earth. The SSPP team hopes that they will have a full assessment of the SSPD’s performance within a few months of the launch.

Numerous challenges remain: nothing about conducting an experiment in space – from the launch to the deployment of the spacecraft to the operation of the SSPD – is guaranteed. But regardless of what happens, the sheer ability to create a space-worthy prototype represents a significant achievement by the SSPP team.

Ali Hajimiri, Caltech’s Bren Professor of Electrical Engineering and Medical Engineering and co-director of SSPP said, “No matter what happens, this prototype is a major step forward. It works here on Earth, and has passed the rigorous steps required of anything launched into space. There are still many risks, but having gone through the whole process has taught us valuable lessons. We believe the space experiments will provide us with plenty of additional useful information that will guide the project as we continue to move forward.”

Although solar cells have existed on Earth since the late 1800s and currently generate about 4 percent of the world’s electricity (in addition to powering the International Space Station), everything about solar power generation and transmission needed to be rethought for use on a large scale in space.

Solar panels are bulky and heavy, making them expensive to launch, and they need extensive wiring to transmit power. To overcome these challenges, the SSPP team has had to envision and create new technologies, architectures, materials, and structures for a system that is capable of the practical realization of space solar power, while being light enough to be cost-effective for bulk deployment in space, and strong enough to withstand the punishing space environment.

Pellegrino commented, “DOLCE demonstrates a new architecture for solar-powered spacecraft and phased antenna arrays. It exploits the latest generation of ultrathin composite materials to achieve unprecedented packaging efficiency and flexibility. With the further advances that we have already started to work on, we anticipate applications to a variety of future space missions.”

Hajimiri noted, “The entire flexible MAPLE array, as well as its core wireless power transfer electronic chips and transmitting elements, have been designed from scratch. This wasn’t made from items you can buy because they didn’t even exist. This fundamental rethinking of the system from the ground up is essential to realize scalable solutions for SSPP.”

The entire set of three prototypes within the SSPD was envisioned, designed, built, and tested by a team of about 35 individuals. “This was accomplished with a smaller team and significantly fewer resources than what would be available in an industrial, rather than academic, setting. The highly talented team of individuals on our team has made it possible to achieve this,” Hajimiri added.

Those individuals, however – a collection of graduate students, postdocs, and research scientists – now represent the cutting edge in the burgeoning space solar power field.

“We’re creating the next generation of space engineers,” said SSPP researcher Harry A. Atwater, Caltech’s Otis Booth Leadership Chair of the Division of Engineering and Applied Science and the Howard Hughes Professor of Applied Physics and Materials Science, and director of the Liquid Sunlight Alliance, a research institute dedicated to using sunlight to make liquid products that could be used for industrial chemicals, fuels, and building materials or products.

Success or failure from the three testbeds will be measured in a variety of ways. The most important test for DOLCE is that the structure completely deploys from its folded-up configuration into its open configuration. For ALBA, a successful test will provide an assessment of which photovoltaic cells operate with maximum efficiency and resiliency. MAPLE’s goal is to demonstrate selective free-space power transmission to different specific targets on demand.

“Many times, we asked colleagues at JPL and in the Southern California space industry for advice about the design and test procedures that are used to develop successful missions. We tried to reduce the risk of failure, even though the development of entirely new technologies is inherently a risky process,” said Pellegrino.

SSPP aims to ultimately produce a global supply of affordable, renewable, clean energy. More about SSPP can be found on the program’s website: https://www.spacesolar.caltech.edu/

***

Your humble writer says this is a huge success right now. And will add a thanks to a privateer investor, Donald Bren, his wife, Brigitte Bren, and his foundation. Sometimes great wealth gives back in a great way.

There isn’t a failure possible in this. The test equipment is in orbit and the information, every byte, is a success. The question that exists is just how fully realized will the tests and experiments get? One hopes far enough to encourage more investment and further research.

By Brian Westenhaus via New Energy and Fuel

Former gold mine to host largest underground caverns in history

Staff Writer | January 15, 2023 |

One of the caverns at the Deep Underground Neutrino Experiment. 

(Image courtesy of South Dakota Mines).

The former Homestake mine, the biggest and deepest gold mine in North America until its closure in 2002, is set to become one of the largest underground caverns in history and house the largest physics experiment in the study of neutrinos.


The site, located under the Black Hills of South Dakota, is expected to host the Deep Underground Neutrino Experiment (DUNE) project being developed within the Sanford Underground Research Facility (SURF) by the US Department of Energy’s Fermi National Accelerator Laboratory.

“The DUNE caverns are mind-bogglingly big. There is no question about it,” Joshua Willhite, one of the engineers leading the DUNE excavation and a graduate of the university South Dakota Mines, said in a media statement.

According to Willhite, two of the main caverns are seven stories tall, one football field and a half long and 64 feet wide. A third utility cavern is three stories high, two football fields long and 64 feet wide.

Even though there are other caverns of similar or larger size on the planet, they are closer to the surface. This means that nothing the size of DUNE has ever been done at depths of 4,850 feet below ground.

Engineering challenges

Willhite noted that the engineering challenges of construction this far below the surface are formidable.

“Every bit of air that is underground has to come down through one shaft and go back out another shaft, and this requires management of air movement,” he said.

At the 4,850-foot level of SURF, the natural temperature of the surrounding rock walls is 95 degrees, so ventilation for air conditioning is key.

Water, on the other hand, cannot be taken for granted in the DUNE construction. Installing a bathroom, for example, requires pumping water between the surface and the construction site which, in turn, would require almost 2,200 psi of pressure. Thus, engineers have broken down the plumbing that supplies water into a series of stepped segments to reduce the pressure needed by individual pumps.

Heavy equipment like excavators and front-end loaders and construction materials like long steel beams that are normally a part of any construction operation are also hard to come by at DUNE.

“These massive caverns take huge equipment. But we are supplied by mine shafts that are not that much bigger than a normal elevator, and there is no piece of excavation equipment that will fit in an elevator, so we have to disassemble the equipment at the surface and reassemble it at depth,” Willhite said.

On top of this, the rock being excavated from these large caverns must be placed back on conveyances and moved to the surface.

Neutrino experiment

Inside DUNE, the US Department of Energy is building a facility that will hold massive tanks of liquid argon that will detect the neutrinos coming in from a beam generated at Fermilab in Illinois. At least two of the tanks are the size of five-story buildings and each will hold 17,000 tonnes of -300ºF liquid argon.

“To maintain that temperature, we use a large nitrogen generator and refrigeration system to create liquid nitrogen at -320°F,” Willhite said. The liquid nitrogen will be used to help cool the argon.

“Aside from the ridiculously cold temperature, when these liquids boil, they expand over 700 times their volume. There is nothing inherently hazardous about argon gas except it displaces any oxygen. We have to ensure that this expansion is minimized, controlled and ventilated properly for worker safety,” he pointed out.

For Willhite, the engineering challenges at DUNE are part of what makes it a fulfilling project.

Startup eyes Australia to build China-free battery production

Bloomberg News | January 15, 2023 | 

Founder and CEO David Collard (left) touring the potential location of the Recharge Industries Gigafactory with Avalon Airport chief of infrastructure Dave Moreland. 

Credit: Recharge Industries

An Australia-based startup is planning a A$300 million ($210 million) factory to build lithium-ion batteries free of materials from China, as automakers to utilities seek alternatives to the industry’s dominant producer.


Recharge Industries Pty aims to start construction on the site in Geelong in southeastern Australia in the second half of this year and begin production by late 2024, founder David A. Collard said in an interview.

The operation will have an initial annual capacity of 2 gigawatt-hours — rising to an eventual planned total of 30 gigawatt-hours — and has sales agreements in place with Indian energy storage projects, he said.

“Australia is the new Saudi Arabia of the new energy age,” said Collard, a former PriceWaterhouseCoopers LLP partner. “We have all the key critical minerals to power the next 100 years.” The nation currently has a pipeline of 25.6 gigawatt-hours of battery production projects, according to BloombergNEF data.

Nations including the US, Australia and India are pushing to expand domestic clean energy manufacturing capacity to help drive their shift away from fossil fuels, all while also attempting to curb their reliance on imports — particularly from China. President Joe Biden’s Inflation Reduction Act, which includes generous incentives for solar, battery and electric-vehicle manufacturing, has sparked a wave of new factory announcements in the US.

Australia is the world’s largest supplier of lithium, a critical battery metal, though currently sends the majority of its battery raw materials to be processed into components in China. The Asian nation currently has about 1,000 gigawatt-hours of cell manufacturing capacity, more than 80% of the world’s total, according to data compiled by BNEF.

Recharge’s batteries won’t use cobalt or nickel and also avoid any materials from Russia. The company plans to source its lithium raw materials from Australian and South American mines and to utilize refined lithium from Australia and the US.

Collard raised funding for Recharge through his hedge fund, Scale Facilitation, and backers include Australian superannuation funds, asset managers and strategic investors involved in the project, he said.

(By Dan Murtaugh)

President of Colombia vows to block mining projects that threaten water sources

Bruno Venditti | January 16, 2023 | 

The Quebradona copper-gold project.

 (Image courtesy of Integral Consulting Engineers)

Colombia’s president Gustavo Petro said on Saturday his government will block mining projects that threaten water sources.


On a visit to Jerico, the president said that mining projects are located above aquifers that supply a population of 10,000 inhabitants.

He said his government will block those mining projects, indicating it will not allow AngloGold Ashanti’s Quebradona copper-gold project to advance.

“We will stop mining projects that put water at risk. Jerico will be an agricultural and ecological district,” said president Petro.

AngloGold Ashanti currently has three greenfields projects in Colombia. Quebradona and Gramalote, in the department of Antioquia, are at various stages of permitting and feasibility study, and La Colosa, in the department of Tolima, is presently under force majeure.

Quebradona is expected to treat 6.2Mt annually to produce 3 billion pounds of copper, 1.5Moz of gold and 21Moz of silver over a potential 23-year life.

Colombia’s environmental agency (ANLA) decided to archive the company’s environmental licence application relating to Quebradona. AngloGold Ashanti has filed an appeal seeking to secure further details.

On Twitter, AngloGold said that Quebradona does not put the territory’s water at risk and can coexist in harmony with the development of an agricultural and ecological district.

“We will seek to have conversations with the environmental authorities to jointly review the existing information on the water resource and continue advancing with the studies that are required by law,” the company said in a statement.

Mining’s top ten ‘S’ trends in ESG for 2023

Elizabeth Freele and Rachel Dekker | January 17, 2023 | 

Stock image.

To say 2022 was tumultuous is an understatement. War, inflation, climate disasters, market volatility: the past year was anything but business as usual for most. ESG, which had seemed firmly embedded in business, began to experience a backlash, facing criticism as a “woke capitalist” distraction. Yet, a recent Harvard study indicates 81% of institutional investors in the US and 83.6% in Europe plan to increase their ESG allocations over the next two years.


And while climate change continued to dominate, biodiversity and other topics entered global sustainability discourse, revealing widespread recognition that the challenges we face today are deeply interconnected economic, political, social, and environmental issues requiring holistic, collective action.

With so much upheaval, it can be difficult to spot the trends and anticipate what lies ahead for mining companies and their ESG journeys. With standards and regulations ensuring social topics become more firmly embedded in expected ESG practice this year, expect “S” to feature more prominently. What might that look like? Here are our top 10 “S” trends mining companies should take note of and take action on in 2023.

1: Global crises driving local risk

Last year saw a confluence of global challenges that had decidedly local impacts. Global energy prices, political unrest, extreme weather and climate disasters, food shortages, inflation, supply chain disruptions, diminished ecosystem services, and lingering pandemic impacts affected the resilience of countries, regions, and communities.

The UN reported that, by August 2022, cost of living increases had already pushed 71 million into poverty this past year, while the IMF forecasts that 2023 will feel like a recession for many. Socio-economic stress often leads to social unrest and can also drive resource nationalism. In 2023, contributions to local poverty relief, liveability, and economic development can build resilience in your company’s operating context, contributing to stronger relationships and helping manage asset-level social risk.

2: Investors expecting more robust community practices

Codification of social management practices is maturing, including ICMM’s 2022 Performance Expectations and a growing list of industry and commodity -specific standards, principles, and protocols. In 2023, tailings management will be a key area of action, as ICMM members, responsible operators, and miners with particularly ESG-oriented investors implement the Global Industry Standard on Tailings Management (GISTM), which contains a robust set of expectations around community engagement, participation, and collaboration, as well as socio-economic assessment, that don’t reflect most companies’ current practices.

With strong investor endorsement, GISTM is raising the bar for operational community involvement across the industry in 2023, and companies will do well to review and/or upgrade their social management practices to avoid being caught flat-footed.

3: Mainstream operationalization of UNGPs

The UN’s Guiding Principles on Business and Human Rights (UNGPs) have rapidly become the global standard for corporate human rights, and particularly for asset-level community feedback (or grievance) mechanisms. Its Reporting Framework is backed by a coalition of 88 investors with US$5.3 trillion in assets under management. Multiple industry frameworks including the RGMPs, GISTM, IRMA, the Equator Principles, and ICMM’s Performance Expectations explicitly reference alignment with the UNGPs.

The Voluntary Principles on Security and Human Rights and the IFC Performance Standards help to operationalize the principles, as does MAC TSM’s operational grievance mechanism design guide. Even the new GRI Reporting Standards, effective January 1, 2023, include UNGP disclosure. The UNGPs are here to stay. As human rights legislation proliferates globally in 2023, and investors recognize the significance of human rights risk, companies can expect the UNGP “Effectiveness Criteria” to increasingly feature in mining ESG audits and due diligence.

4: Drive to improve DEI performance

Expectations of mining company action on diversity, equity, and inclusion (DEI) have grown rapidly in recent years. Several reports have now revealed widespread discrimination, harassment, racism, and sexual violence; findings that are symptomatic of industry-wide inadequate efforts to create safe and inclusive workplaces that attract and retain a variety of talent. And a range of stakeholders are taking note and taking action. While major proxy advisory firms update their proxy voting policies on DEI, asset managers seek disclosure on a broader range of DEI themes – mining CEOs have indicated to EY that DEI performance is the social topic on which they expect most investor scrutiny in 2023. Meanwhile, employees are voting with their feet. Workers leave mining more than other sectors, forecasted mining worker shortages are in the hundreds of thousands globally, and mining engineering degree enrolment is in decline in Canada, the US, and Australia. Mining companies will urgently need to understand and improve their DEI performance and worker experience to secure continued access to relevant talent in 2023.

5: Shifting materiality and ESG prioritization

As ESG matures, companies will need to shift away from outdated approaches to materiality and disclosure. Processes that focus excessively on opinions of select company and external stakeholders and communications that parlay one ESG success story into purported sustainability leadership fall short of what’s expected of companies today. No more cherry-picking only those areas of competitive advantage, strong performance, or trendy topics. Instead, meaningful materiality requires a robust understanding and analysis of your impacts (actual/potential and positive/negative) to prioritize ESG action and disclosure, even when it’s uncomfortable. While some continue to focus exclusively on financial materiality, this year will see “double materiality” (capturing both socio-environmental impacts and financial risk) emerge as a foundation for more effective enterprise risk management.

Social topics on which mining companies are likely to have impacts — such as human and Indigenous Peoples’ rights, DEI, cultural heritage, and community impacts — are likely to demand and receive more strategic ESG attention. And with ESG litigation on the rise as more stakeholders rely on sustainability information, any inaccurate analysis, action, and disclosure means risking great financial, relationship, and reputational costs.

6: ESG standardization and harmonization advances

Broad criticism of the vast inconsistencies among ESG disclosure standards, requirements, and related rating and ranking frameworks are prompting continued efforts to standardize and harmonize. This year will see the much-anticipated completion of the ISSB’s institutional and technical efforts to set the global standard for (investor-focused) sustainability-related disclosure. Meanwhile, recent and imminent ESG rating regulation, especially in the EU, suggests a trend of pushing from pure “enterprise value” ESG towards double materiality. Additionally, a systems lens is emerging across all ESG disclosure and assessment, which acknowledges the interconnected nature and deep complexity of sustainability issues such as climate change, persistent inequality, and loss of biodiversity and ecosystem services. As a result, companies can expect calls to pay closer attention to social impacts and community collaboration requirements in scenario and emergency response planning — whether for tailings management, climate change, nature loss, or operational emergencies – so that stakeholders can assess and compare the level of embeddedness and success of ESG practices.

7: Radical transparency

To help build credibility within an often-distrusted sector, both voluntary and mandatory disclosures are promoting radical transparency on impacts, risks, and performance. The GISTM, GRI, EU Corporate Sustainability Reporting Directive (CSRD), and other initiatives will set a new tone in 2023 for disclosure on a broader range of topics to a broader range of stakeholders. Transparency, including for co-design and collaborative risk management, will result in better-informed stakeholders. While companies may initially feel vulnerable about disclosure of, perhaps, imperfect practices or not-yet-good-enough performance, especially at a local community level, operators should prepare for these standards to usher in an era of enhanced transparency and new levels of community co-development in operational decision-making and risk management.

8: Lens on value chains

Value chains and their often hidden social and environmental risks and impacts are shifting into focus. Mandatory due diligence and disclosure requirements are emerging in jurisdictions and standards globally. Climate disclosure rules are expected in 35 jurisdictions and several, such as the US SEC’s regulations, cover Scope 3 (value chain) emissions. The ISSB plans to adopt the same scope. Meanwhile, human rights legislation, including the EU’s Directive on Corporate Sustainability Due Diligence, has been enacted or tabled in at least 15 countries (hosting over half of all ESG raters), many with a growing focus on modern slavery.

Mining companies, with their products being early in the value chain, can expect an increase in information requests and demands to demonstrate or improve their human rights performance. Downstream value chain partners and investors who, themselves, are under regulatory pressure to conduct human rights due diligence across supply chains and investment portfolios, may be compelled to divest from miners who cannot, in a timely manner, demonstrate good human rights practices and performance.

9: Growth of “green-hushing”

Last year, we anticipated a significant rejection of greenwashing by companies without the sustainability credentials to back up their commitments. Well, that happened, and then some… Companies rushing to put out vague and lofty commitments for the sake of having, say, a climate goal to point to, faced a backlash from critical stakeholders questioning the substance behind their objectives. We now see a growing new trend of “green-hushing.”

A recent South Pole report found that 25% of companies now don’t plan to talk about their science-aligned climate targets at all, usually to avoid scrutiny. This is detrimental to companies and the broader industry, hampering crucial industry knowledge-sharing on decarbonization, while possibly eroding stakeholder trust and social acceptability. In 2023, companies are advised to take a thoughtful, credible approach rather than opting for silence, such as by setting public objectives to deepen their understanding of issues like climate change before setting science-based emissions reduction targets.

10: Taking a stance on social issues

Russia’s invasion of Ukraine, more than anything before, demonstrated that not only consumer brands but mining companies, too, are expected to “care.” Several mining investors and operators opted to divest from or sell Russia-based assets and many more were compelled to issue position statements on the topic to clarify their rejection of Russia’s actions. The 2022 Edelman Trust Barometer suggested that “societal leadership” is now seen as a “core function of business” and forecasted that calls for business to take a stand on and engage even more in societal issues are growing.

But while stakeholders increasingly expect corporate action and positions on economic inequality, racial justice, LGBTQ rights, and other issues with social implications, PWC’s 2022 Corporate Director Survey suggests that most Boards are not substantially discussing social issues as part of their governance responsibilities and may be missing a key blind spot.

Overall, we have seen ESG become more deeply entrenched in global business and investment practice in 2022, a trend which shows no signs of abating in the year ahead, to the chagrin of some. Polarization and politicization of ESG are on the rise in the US and beyond. And, as a global recession looms, companies will need to balance the need to manage longer-term ESG risk while continuing to meet immediate financial performance objectives, even as development and operating costs continue to rise for many.

However, the underpinning principles of managing business risk and reducing adverse impacts through responsible governance and sustainable operations remain valid as ever, as interconnected challenges continue to pose familiar and unprecedented risks to companies globally. The number of consumers and investors who care about environmental and social issues only continues to grow, with a lens to the future and undeterred by the politics of the day. So, mining companies will do well to ensure their leadership and boards are equipped to manage and govern their businesses responsibly in a world of volatility and increasingly interconnected impacts; they may find 2023 is the year to cultivate that crucial social performance skillset.

Elizabeth Freele and Rachel Dekker are the co-founders and managing partners of mining sustainability think tank and ESG consultancy Sympact. Sympact supports companies in ensuring their social performance meets growing expectations through advisory services, training, and thought leadership products.

Britishvolt calls in administrators in blow to UK’s EV battery hopes

Reuters | January 17, 2023 | 

Computer rendition of lithium-ion batteries recycle plant. 

(Courtesy of Britishvolt )

Britishvolt, the UK startup which struggled to raise funds for an major electric vehicle battery factory in northern England, filed for administration on Tuesday in a blow to the country’s hopes of building a home-grown battery industry.


Britishvolt’s failure marks a step back for Britain’s car sector as industry officials and experts see domestic EV battery plants as essential to keep UK car production from shifting to mainland Europe.

Britishvolt had been in talks with potential buyers after securing a short-term funding lifeline in November to help keep it afloat.

Competing bids of around 30 million pounds ($36.8 million)from three early investors versus Indonesia-linked investment fund DeaLab Group were rejected by Britishvolt’s creditors.

“We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this has not been possible,” Britain’s business department said in a statement.

The department said it would continue to work with local authorities and potential investors to secure the best outcome for the site.

A team from accounting firm Ernst & Young’s restructuring arm EY-Parthenon have been appointed as administrators.

The administrators said Britishvolt had gone into administration “due to insufficient equity investment” for its ongoing research and development of its sites”.

A majority of Britishvolt’s 300 staff were told on Tuesday they were being made redundant with immediate effect, two sources familiar with the matter said.

“The news that Britishvolt is filing for administration is deeply disappointing, and a blow to the UK’s transition to cleaner, cheaper transport,” said Ben Nelmes, chief executive of British transport research firm New Automotive.
‘Shovel-ready’ location

Britishvolt had previously outlined ambitious plans for a 3.8 billion pound ($4.65 billion) 38 gigawatt-hour plant in England’s industrial north to build electric vehicle batteries.

The planned plant site at Blyth is regarded as Britain’s best “shovel-ready” location to make EV batteries at scale, with the land already acquired and planning permission in place.

The British government under former prime minister Boris Johnson had touted Britishvolt’s project as a major milestone toward building an EV industry as the country heads toward a ban on combustion engine cars in 2030.

The government had committed 100 million pounds to Britishvolt’s plant, to be paid out once construction began. On Tuesday it confirmed no grant had been paid out because the private funding milestones had not been met.

“Back in July Boris Johnson when he was the prime minister told me that the cheque was in the post to Britishvolt,” opposition Labour politician Ian Lavery said in a statement. “But the reality is they have never received a penny from the government.”

Britishvolt had only raised around 200 million pounds by summer 2022 and had pushed back its production timeline.

Rising interest rates and the risk of recession have made fundraising much harder for many startups – especially those seeking huge sums for vast projects like an EV battery plant.

To comply with trade requirements with the European Union, a large part of an EV by value must be built in Britain to avoid tariffs.

Britishvolt had received backing from mining giant Glencore, which kicked off a funding round for the startup last February.

Industry experts estimate Britain needs four to six large battery plants to sustain a healthy car industry.

It currently has one small 1.9 gigawatt-hour (GWh) Nissan plant in Sunderland, northeast England. The Japanese carmaker is building a second 9 GWh plant at the same location with Chinese partner Envision AESC, which could expand to 25 GWh.

($1 = 0.8168 pounds)

(By Nick Carey, Michael Holden and Sachin Ravikumar; Editing by Kylie MacLellan, Louise Heavens, Jane Merriman and Emelia Sithole-Matarise)

Skeena Resources signs Process Charter for Eskay Creek gold project in British Columbia

Staff Writer | January 17, 2023 | 

Eskay Creek project in British Columbia. Image from Skeena Resources.

Skeena Resources (TSX: SKE, NYSE: SKE) announced Tuesday the signing of the permitting Process Charter and other key milestones in the approval process for the Eskay Creek gold-silver project located in Tahltan Territory in the Golden Triangle of British Columbia.


The property hosts the former Eskay Creek mine that produced 3.3 million oz of gold and 160 million oz. of silver from 1994 to 2008. The Process Charter is a collaboration between Skeena, the Tahltan Central Government (TCG), and the Government of BC.

The signed document establishes a workplan for all parties to collaborate on an efficient Environmental Assessment (EA) and permitting process for Eskay Creek. The target timelines established in the Process Charter outline the EA Certificate being received in H2 2024 and final permits to be issued in H1 2025. These dates align with the development timeline anticipated for the project.

“The TCG recently finalized the Process Charter for Eskay Creek,” Connor Pritty, TCG Lands Director said in a news release. “It is an example of how Skeena is continually working with the Tahltan Nation to redefine how project approval processes are carried out within our Territory.

“We are working together to effectively integrate Tahltan knowledge, process requirements and decision-making specific to Eskay Creek,” Pritty said. “The TCG Lands Department looks forward to continuing to work with the team at Skeena.”

“The Process Charter is a significant step forward in the approval process for Eskay Creek,” Skeena’s President & CEO, Randy Reichert said in the statement.

“The signing of this document demonstrates the commitment from all parties on permitting the Project in an efficient and timely matter. We appreciate the efforts and collaboration shown by both the TCG and the Province in achieving this major milestone.”

Skeena has worked closely with the TCG, Federal and Provincial regulators, Indigenous Nations, and communities to advance the EA process for Eskay Creek. On November 18, 2022, both the EA Office and TCG provided a positive Readiness Decision for the Project which advanced it to the Process Planning stage. On November 29, 2022, the Federal Minister of Environment and Climate Change approved the substitution of the impact assessment to the BC Environmental Assessment Office.

The substitution decision means that instead of doing two separate assessments on Eskay Creek, the BCEAO conducts a single assessment that meets both Provincial and Federal requirements.

How abandoned mines can become clean energy storage systems

Staff Writer | January 17, 2023 |

Abandoned mine entrance in Oregon. (Reference image Thomas Shahan, Flickr.)

An international team of researchers has developed a novel way to store energy by transporting sand into abandoned underground mines. The new technique, called Underground Gravity Energy Storage (UGES), proposes an effective long-term energy storage solution while also making use of now-defunct mining sites.


In a paper published in the journal Energies, the scientists explain that UGES generates electricity when the price is high by lowering sand into an underground mine and converting the potential energy of the sand into electricity via regenerative braking and then lifting the sand from the mine to an upper reservoir using electric motors to store energy when electricity is cheap.

Regenerative braking is an energy recovery mechanism that slows down a moving vehicle or object, such as an elevator, by converting its kinetic energy into a form that can be either used immediately or stored until needed. In other words, the electric traction motor uses the vehicle’s momentum to recover energy that would otherwise be lost to the brake discs as heat. Regenerative braking system lifts are already applied in newly highly energy-efficient buildings.

 

Underground Gravity Energy Storage system: a schematic of different system sections. 

(Graph by Hunt et al.).

Based on this principle, the main components of UGES are a vertical shaft, a motor/generator, upper and lower storage sites, and mining equipment. Using the shaft and electric motor/generators, large volumes of sand are lifted and dumped. The deeper and broader the mineshaft, the more power can be extracted from the plant, and the larger the mine, the higher the plant’s energy storage capacity.

“When a mine closes, it lays off thousands of workers. This devastates communities that rely only on the mine for their economic output. UGES would create a few vacancies as the mine would provide energy storage services after it stops operations,” Julian Hunt, lead author of the study and a researcher at the International Institute For Applied Systems Analysis, said in a media statement.

“Mines already have the basic infrastructure and are connected to the power grid, which significantly reduces the cost and facilitates the implementation of UGES plants.”

According to Hunt, other energy storage methods, like batteries, lose energy via self-discharge over long periods. The energy storage medium of UGES is sand, meaning that there is no energy lost to self-discharge, enabling ultra-long time energy storage ranging from weeks to several years.

The researcher noted that the investment costs of UGES are about 1 to 10 USD/kWh and power capacity costs of 2 USD/kW. The technology is estimated to have a global potential of 7 to 70 TWh, with most of this potential concentrated in China, India, Russia and the United States.

“To decarbonize the economy, we need to rethink the energy system based on innovative solutions using existing resources. Turning abandoned mines into energy storage is one example of many solutions that exist around us, and we only need to change the way we deploy them,” study co-author Behnam Zakeri said.