Thawing permafrost poses environmental threat to thousands of sites with legacy industrial contamination

• Moritz Langer, 
• Thomas Schneider von Deimling, 
• Sebastian Westermann, 
• Rebecca Rolph, 
• Ralph Rutte, 
• Sofia Antonova, 
• Volker Rachold, 
• Michael Schultz, 
• Alexander Oehme & 
• Guido Grosse 

Nature Communications volume 14, Article number: 1721 (2023) Cite this article

• Article
• Open Access
• Published: 28 March 2023

• 
  details

Abstract

Industrial contaminants accumulated in Arctic permafrost regions have been largely neglected in existing climate impact analyses. Here we identify about 4500 industrial sites where potentially hazardous substances are actively handled or stored in the permafrost-dominated regions of the Arctic. Furthermore, we estimate that between 13,000 and 20,000 contaminated sites are related to these industrial sites. Ongoing climate warming will increase the risk of contamination and mobilization of toxic substances since about 1100 industrial sites and 3500 to 5200 contaminated sites located in regions of stable permafrost will start to thaw before the end of this century. This poses a serious environmental threat, which is exacerbated by climate change in the near future. To avoid future environmental hazards, reliable long-term planning strategies for industrial and contaminated sites are needed that take into account the impacts of cimate change.

Introduction

In the Arctic permafrost region, near-surface air temperatures are rising at rates at least two times faster than the rest of the globe1,2, with latest data analyses suggesting up to four-fold faster warming3, substantially changing the ground stability and hydrological conditions4,5. A recent review highlighted the potential of new biogeochemical risks that could be associated with permafrost thaw and the mobilization of hazardous substances from various sources6. At the same time, there is clear evidence of increased risk to the stability of infrastructure in permafrost regions7,8,9, which was built on the premise of permanently frozen ground. One prominent environmental disaster, attributed in part to the loss of soil stability10, was the spillage of 17,000 tons of diesel fuel from a destabilized tank facility near the industrial city of Norilsk in northern Siberia in May 2020, which entered the Arctic ecosystem and contaminated rivers, lakes, and tundra in a large permafrost watershed.

For decades, industrial and economic development of the Arctic was based on the assumption that permafrost would serve as a permanent and stable platform11. Past industrial practices also assumed that perennially frozen ground would function as long-term containment for solid and liquid industrial waste due to its properties as a hydrological barrier12,13,14. These widespread practices across the Arctic led to the accumulation of various toxic substances on or in permafrost. Known industrial waste types include drilling and mining wastes, toxic substances like drilling muds and fluids, mine waste heaps, heavy metals, spilled fuels, and radioactive waste (Fig. 1 Supplementary Table 1). Scientifically documented methods for dealing with such substances in remote Arctic regions during much of the 20th century include creating covered waste dumps in permafrost, covered drilling mud sumps, using hydrologically closed lakes and basins as natural dumps, and spreading substances across a large area for dilution in the belief that permafrost beneath and in the surrounding terrain would serve as a stable waste containment barrier of infinite duration15,16. A number of experiments were conducted in Alaska, Canada, and Russia in which toxic liquids and solids, including radioactive waste, were deliberately placed in permafrost for containment17,18,19. To date, there has been no assessment of the environmental impact of these activities on the Arctic as a whole. The thawing of permafrost makes such assessments all the more urgent as the potential risk of toxic release and mobilization continues to increase. In addition, it is foreseeable that thawing permafrost will substantially increase the cost of mitigation and adaptation measures, including maintenance, replacement, relocation of infrastructure, and remediation of contaminated sites7,8,20,21.

Fig. 1: Potential impacts of thawing permafrost on above- and below-ground industrial infrastructure containing toxic substances or waste.

Past and present industrial activities in the Arctic result in various accumulations of hazardous substances in the Arctic a. The warming and thaw of near surface permafrost unlocks frozen disposal sites and destabilizes foundations and containment structures b. Furthermore, permafrost thaw intensifies thermo-hydrological erosion and increases the lateral flow of water, fostering the dispersion of contaminants.

Full size image

In this study, we present a pan-Arctic compilation of the number of industrial sites in permafrost-dominated regions and estimate the number of contaminated sites associated with these sites. We use the Northern Hemisphere Permafrost Map22 to delineate the permafrost model domain, considering only areas with a permafrost occurrence probability of over 50%. Based on data from Alaska, we also assess the different types of toxic substances associated with industrial activities in these regions. We also use future climate scenarios to predict how many industrial and contaminated sites will begin to be affected by permafrost thaw. Our results suggest that industrial legacy sites in thawing permafrost and the release of toxic substances pose a significant environmental risk at the pan-Arctic scale, requiring management strategies.

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Vale to pay $56 million over dam safety claims — SEC
Reuters | March 28, 2023 |

Vale’s tailings dam failure on Jan. 25, 2019, killed 270. 

(Image courtesy of Vinícius Mendonça | Ibama)

Brazilian mining firm Vale SA agreed to pay $55.9 million to settle charges related to allegedly false and misleading disclosures about the safety of its dams prior to a 2019 dam collapse in Brazil that killed 270 people, the US Securities and Exchange Commission said on Tuesday.


(By Eric Beech)

Cameco wins $220m tax refund, seeks hundreds of millions more

Staff Writer | March 28, 2023 

A large refund shows light at the end of the tunnel for a tax dispute. Cameco’s Cigar Lake uranium mine, Saskatchewan. Source: Cameco

Cameco (TSX: CCO; NYSE: CCJ) has won C$300 million ($220m) back from Canada’s taxman in a dispute lasting two decades, but it says the full figure should be more than three quarters of a billion Canadian dollars.


Canada’s largest uranium miner says it’s due to receive C$89 million in cash and C$211 million in letters of credit after reassessments by Canada Revenue Agency concerning tax filings for 2007 through 2013. However, the company says it is owed a further C$480 million in cash and credit because of court decisions on the same tax issues in different years.

“The clear and decisive court rulings already rendered in this dispute likewise apply to these amounts,” Cameco said in a statement on Mar. 27. “CRA should fully reverse the remining transfer pricing adjustments for these years, return the full amount of cash and security being held, and bring this matter to an end once and for all.”

The C$480 million, composed of C$206 million in cash and C$274 million in letters of credit held by the CRA, concerns sales of uranium by Swiss subsidiary Cameco Europe and ties up “a significant portion of our financial capacity,” Cameco said.

The Saskatoon-based company has appealed to Canada’s Tax Court to complete the refund for the 2007-13 tax filings, and it has also disputed CRA assessments for 2014-16, it said.

The tax battle centres on how CRA shifted Cameco Europe’s income back to Canada for the years 2003 to 2014 and applied tax rates, interest and penalties, and transfer pricing penalties from 2007 to 2011, Cameco said in February. The company won at the federal Tax Court and federal Appeals Court before the Supreme Court dismissed CRA’s case on the 2003, 2005 and 2006 tax year filings.

“Although not technically binding, there is nothing in the reasoning of the lower court decisions that should result in a different outcome for the 2007 through 2014 tax years, which were reassessed on the same basis,” Cameco said.

The company is benefiting from a resurgence in nuclear energy’s image to fight climate change and fewer uranium supplies in the market because of the war in Ukraine. After 2022 results showed a swing into profit, Cameco is preparing to complete the joint acquisition with Brookfield Renewable Partners (NYSE: BEP) of nuclear plant builder Westinghouse in a $7.9 billion deal.

Cameco’s Cigar Lake mine is at full production while the McArthur River and Key Lake operations are to hit full output next year. The company has signed a record number of contracts to sell about 80 million lb. of uranium, including a multi-year deal with Ukraine.

Shares in Cameco gained 1.2% to C$34.04 each on Tuesday afternoon in Toronto, within a 52-week range of C$25.55 and C$41.05, valuing the company at C$14.7 billion ($10.8bn).

Cameco to receive CAD300 million tax refund

27 March 2023

The Canada Revenue Agency (CRA) has issued revised reassessments that will result in the Canadian company being refunded a total of some CAD300 million (USD219 million) - CAD89 million in cash and CAD211 million in letters of credit - but the company's broader tax dispute with the CRA continues.

Cameco's corporate headquarters in Saskatoon, Saskatchewan (Image: Cameco)

The reassessments are the latest development in a long-standing tax dispute between Cameco and the CRA, and follow an earlier series of court decisions in Cameco's favour for the 2003, 2005 and 2006 tax years which determined that income earned by Cameco’s foreign subsidiary from the sale of non-Canadian produced uranium was not taxable in Canada.

"In accordance with these decisions, CRA has issued reassessments reducing the proposed transfer pricing adjustment from CAD5.12 billion to CAD3.25 billion, resulting in a reduction of CAD1.87 billion in income taxable in Canada compared with the previous reassessments issued to Cameco for the 2007 through 2013 tax years. These revisions to income result in the refund of approximately CAD300 million described above," the company said.

The company noted that its broader tax dispute with the CRA - which continues to hold a further CAD480 million (CAD206 million in cash and CAD274 million in letters of credit) remitted or secured by the company - is still ongoing. This is "tying up a significant portion of our financial capacity", it said.

The company maintains that "clear and decisive court rulings already rendered in this dispute" relating to the sale of Canadian-produced uranium by the company's foreign subsidiary should also apply to the remaining transfer pricing adjustment of CAD3.25 billion for the 2007 to 2013 tax years, and that CRA should "fully reverse" the adjustments for those years, return the cash and security, "and bring this matter to an end once and for all".

Cameco filed appeals with the Canadian tax court in 2021 for the 2007-2013 and in October 2022 for the years 2014 and 2015. It has recently filed a notice of objection for 2016. "The process to resolve these disputes continues," the company said.

The timing of the refund is yet to be determined.

Researched and written by World Nuclear News

KORE wins court ruling in California, can proceed with Long Valley gold project drilling

Staff Writer | March 28, 2023 | 

The Long Valley project in California Credit: KORE Mining

KORE Mining (TSXV: KORE) has won a favourable court ruling that would allow the company to proceed with drilling at its Long Valley gold project in Mono county, California.


On Tuesday, the US District Court for the Eastern District of California denied a motion by NGOs to overturn authorization granted by the United States Forest Service (USFS) of KORE’s proposed drill program. A phase 1, 3000-metre program was previously approved by the USFS in October 2021.

To date, KORE had voluntarily limited any work at the Long Valley project pending the outcome of the court case between the NGOs and the USFS. Now that the USFSs motion for summary judgement has been granted and the authorization upheld, KORE intends to proceed with exploration during the summer and fall of 2023.

KORE said its team has worked closely with the USFS to avoid cultural impacts and mitigate other potential impacts of drilling. The program is expected to use modern technology and existing road infrastructure to minimize disturbances, KORE said, adding it will also complete pre-disturbance cultural surveys, remove 100% of all drill cuttings, have zero water or waste discharge and intensively remediate all sites post-work.

There will be no long-term impact from the program and no permanent installations will be left behind, KORE has said. The USFS thus granted KORE a categorical exclusion from the National Environmental Protection Act for the plan of operations.

Details of the Long Valley exploration drill program will be provided by the company over the coming weeks.

The company has identified opportunities to expand the shallow oxide mineralization in all directions. Additional mineralization could extend mine life, reduce capital intensity and generate higher project economic returns than the 1.2 million oz. of indicated gold and 500,000 oz. of inferred gold from 64 million tonnes of 0.58 g/t and 22 million tonnes of 0.65 g/t, respectively, as modelled in the October 2020 preliminary economic assessment.

According to the PEA, the project would generate a post-tax net present value of $273 million (at a 5% discount) with an internal rate of return of 48%, based on a $1,600/oz. gold price. Production is expected to average 102,000 oz. of gold per year over a seven-year mine life.

As a fully intact epithermal deposit with a large at surface footprint, Long Valley has the potential for high-grade sulphides and discrete vein zones in the underlying feeder structures.

The discovery of high-grade, sulphide dominant gold-silver mineralization in addition to near-surface oxide mineralization would open up additional development pathways for the project, such as underground mining, KORE said.

Shares of KORE Mining shot up by 50% by 12:30 p.m. ET following the announcement. The company’s market capitalization stands at approximately C$8 million ($5.9m).

Cost of energy transition so low ‘you’ll need magnifying glass’

Bloomberg News | March 28, 2023 |


It will cost a lot less than one might think to wean the global economy off fossil fuels and invest more in clean alternatives, according to Legal & General Investment Management.


The £1.2 trillion ($1.5 billion) asset manager said in a report published Wednesday that it has undertaken a “root-and-branch review” of all its climate scenarios and found that, to its surprise, it would cost a “statistically insignificant amount” to limit the increase in global temperatures to less than 2°C. That outcome could be achieved for the equivalent of as little as 1 basis point of global GDP per month over the next quarter century, said LGIM, without specifying how much that would be in dollar terms.

“The total economic cost when annualized over the next quarter century would be so low you would need a magnifying glass to see it,” Nick Stansbury, LGIM’s head of climate solutions, said on a media call.

The transition to a net-zero economy and energy system will be the greatest economic overhaul of modern times and will create winners and losers. For investors, the risk and opportunities are manifold, with some industries winding down while others emerge.

LGIM, which is the investment arm of Legal & General Group Plc, said it has “consistently underestimated the pace of cost and efficiency improvements in low-carbon energy technologies.”

Costs for key decarbonization technologies, such as renewable energy and electric vehicles, have declined significantly over the past decade with the levelized expense of electricity for newly commissioned solar PV projects falling by 88% between 2010 and 2021, and the cost for onshore wind declining 68%, LGIM said.

Transitioning to below 2°C “would be so cheap it wouldn’t affect long-term economic output to any significant extent,” LGIM said. In fact, “the cost of transitioning is no longer an especially relevant factor” and instead focus should shift to “the speed at which capital can be deployed into low carbon energy systems.”

While the cost is lower than anticipated, the window in which to achieve a 1.5°C outcome consistent with net-zero emissions by 2050, the so-called stretch goal of the Paris climate accord, “is closing fast” with 2022 “being yet another year of largely inadequate action,” LGIM said.

The global economy will save about $19 trillion by 2050 if the transition process begins in earnest today instead of 2030, according to LGIM. And for investors, the speed and nature of the transition pose significant potential volatility for portfolios, Stansbury said.

“The energy transition is one of the most important and underrated drivers of future asset prices,” he said. “We struggle to find a financial instrument somewhere in the world that won’t be affected in some way by climate change and the energy transition.”

(By Alastair Marsh)

Pilbara Minerals approves $375 million lithium expansion in Western Australia

Reuters | March 28, 2023 | 

Pilbara Minerals’ Pilgangoora lithium operation, Western Australia. Credit: Pilbara Minerals

Australia’s largest independent lithium miner Pilbara Minerals said on Wednesday it had approved a capital investment to increase production capacity at its flagship Pilgangoora lithium project in Western Australia.


The investment in the Pilgan plant will help increase spodumene concentrate production by 47% to 1 million dry metric tonnes per annum.


Pilbara expects full production and ramp-up at the project by the end of the September quarter of 2025 with an estimated capital expenditure of A$560 million ($375.59 million).

“This further increase in production capacity will cement Pilbara Minerals’ position as a globally significant supplier of lithium materials products delivering into this rapidly growing market,” said Dale Henderson, managing director and CEO at Pilbara.

Shares of the miner company 2% to A$3.93 in early trade.

The Western Australian miner had last year secured A$250 million long-term financing from Australia to support expansion at the Pilgangoora project, which sits on one of the world’s largest lithium ore deposits, according to the company’s website.

(USD$1 = 1.4910 Australian dollars)

(By Navya Mittal; Editing by Uttaresh Venkateshwaran)

Pure Energy gets permits for DLE plant at Clayton Valley project in Nevada, stock soars

Staff Writer | March 28, 2023

Clayton Valley lithium project. (Image courtesy of Pure Energy Minerals).

Pure Energy Minerals’ (TSXV: PE) stock exploded Tuesday after it announced that all permits have been received from key governmental agencies for the construction and operation of the direct lithium extraction (DLE) pilot plant at its Clayton Valley lithium brine project in Esmeralda county, Nevada.


The final permit required to operate the DLE pilot plant at the CV project became effective on March 17, the company said, adding that this permit, together with previously approved permits, authorizes the pilot plant’s construction and operation at the Clayton Valley site.

The Vancouver-based miner is exploring and developing the 9,450-hectare Clayton Valley project, the largest mineral land holdings in the area, which adjoins and surrounds on three sides the Silver Peak lithium brine mine operated by Albemarle.

Pure Energy’s partner, SLB (formerly Schlumberger), through its New Energy business, is responsible for the design, construction and operation of the pilot plant to produce lithium compounds in a highly sustainable manner.

“The development of the pilot plant and application of SLB’s sustainable lithium production process at Pure Energy’s Clayton Valley project has important potential for lithium brine projects. Its state-of-the-art approach to lithium production conserves water, has a considerably smaller footprint, and reduces environmental impact compared to existing evaporation pond design,” Pure Energy director Mary Little said in a news release.

“As the first project of its kind in North America, we are very pleased with the progress made by our partner, SLB, in advancing the pilot plant through the permitting milestones,” Little said. “The CV project continues to develop, and we look forward to reporting advances as they occur.”

Pure Energy Minerals stock’s value nearly doubled in Toronto on the news, surging 89% by closing. Trading volume for the day reached 295,789 – the average daily volume is 14,067. The company has a C$22.8 million ($16.7m) market cap.

Standard Lithium claims North America’s ‘highest grade brine’ from sampling in East Texas

Staff Writer | March 28, 2023 |

Drill rig at the new borehole/well location in East Texas. Credit: Standard Lithium

Standard Lithium (TSXV: SLI) announced Tuesday the discovery of a significant lithium brine resource from the sampling of a newly drilled well during its resource expansion work in the East Texas Smackover region.


Over the past three years, the Standard Lithium team has been developing its understanding of the Smackover Formation via analysis of existing petro-physical logs, 2D seismic data and existing core sample analysis retained from previous drilling activity. This understanding has been supplemented by sampling and analytical testing of produced water from existing oil and gas production wells from the Smackover Formation in the East Texas area, Standard Lithium said.

The company identified a select number of highly prospective lithium brine project areas in the Formation and began a brine leasing program in the key project areas. The greatest level of effort to date, and the company’s principal brine leasing focus, has been in the region close to the Arkansas and Louisiana state lines.

The company has been securing brine rights in the key project areas over the last 18 months as well as access to a pre-existing oil and gas production well and drilled a new exploration borehole. The pre-existing well was re-entered using a workover rig and the existing production casing was perforated at various depth intervals to gather new brine samples from different levels in the Smackover Formation. The new exploration borehole was advanced and cased using a drill rig, and subsequently sampled using a workover rig.

Brine samples taken from these two wells, in addition to samples taken from other closely adjacent wells all returned grades exceeding the average reported lithium analyses from other North American brine projects, the company said, adding that the best result came from the new borehole well at a grade of 634 mg/L lithium, leading to what it believes is the discovery of the “highest confirmed lithium grade brine” on the continent.

“We’re excited to discover this outstanding resource and to add it to our expanding portfolio of select projects in the Smackover Formation. We have built a large and technically diverse team of Smackover specialists who have been working for almost three years to understand the most prospective areas to secure the highest-quality brine resources in East Texas,” Standard Lithium president Andy Robinson said in a news release.

Robinson added that “these very high-quality lithium brine resources, located in the heart of the Gulf Coast region, are close to, and highly complementary to, Standard Lithium’s existing lithium projects and have the potential to play a key role in future lithium production as part of the company’s development and commercialization program.”

Standard Lithium has developed a fully integrated, start-to-finish, direct lithium extraction (DLE) process to selectively extract lithium from Smackover brine and produce battery-quality lithium compounds.

The company said the grade of lithium in brine used for DLE has a meaningful impact on both capital expenditures and operating costs in connection with the extraction process, with a higher grade typically resulting in lower overall costs.

Meanwhile, Standard has started a drilling program at its South West Arkansas project to support the forthcoming preliminary feasibility study. This drill program is expected to inform the resource definition and de-risk the project’s resource estimate, provide additional porosity and permeability data through the entire thickness of the productive zones in the Smackover Formation, and optimize production-wellfield design.

Standard Lithium’s stock soared 14.5% as of 10:30 a.m. in Toronto. The company has a market capitalization of C$871 million ($639.8m).

Nickel revolution has Indonesia chasing battery riches tinged with risk

Bloomberg News | March 28, 2023 | 

Maluku Islands. Credit: Shutterstock

Obi, among hundreds of scattered spice islands in the Maluku archipelago, is an unlikely spot for a metal market convulsion. Only the northern part of this island gets power from the state utility. It’s home mostly to fishermen and coconut farmers.


Harita Nickel’s sprawling complex of processing machinery and conveyor belts tells a different story. One of a new breed of nickel producers, backed by Chinese know-how and cash, it’s using the latest generation of a method known as high-pressure acid leaching, or HPAL, to turn Indonesia’s low-grade ore into metal fit to power a Tesla car.


Related Article: Harita Nickel raises $659 million in Jakarta IPO priced at top

Success would have dramatic implications far beyond the Southeast Asian nation, where President Joko Widodo has put the world’s largest nickel reserves at the forefront of an ambitious plan to transform the economy into a key player in the electric-vehicle supply chain.

The new HPAL projects, and the surge of inexpensive metal from a country whose deposits have long been unloved by major producers, could push the market into oversupply. Within two years, Indonesia could supply 65% of the world’s nickel, up from 30% in 2020, Macquarie Group Ltd. estimates. With so much metal outside the London Metal Exchange and the Shanghai exchange, Indonesia threatens to upend even nickel pricing benchmarks.

And this giant chemistry experiment comes with environmental consequences. Compared with more traditional methods, HPAL produces nearly double the amount of tailings that need to be treated and stored, raising the risk of severe contamination as all sides rush to capture battery spoils. The power to process this green ingredient still mostly comes from coal.

Two years ago, workers in Obi — two flights and a three-hour ferry ride from Jakarta — rolled a nearly 1,000-ton pressure cooker-like machine down a red dirt path.

A team filled it with ore and sulfuric acid and waited. A liquid emerged in a startling blue-green: the color of oxidized nickel and confirmation of a dramatic change in the world’s production of a key metal for batteries. Harita Nickel, working with Ningbo Lygend Mining Co., had become the first to turn ore into mixed hydroxide precipitate or MHP, a form of nickel that can be further refined into batteries. It has since become the first in Indonesia to process that intermediate product into nickel sulfate, another step up in the value chain.

The Obi island operation is now one of three producing HPAL outfits, and more are in the pipeline, with nearly $20 billion of further projects announced. Next month, Harita plans to go public on the Jakarta exchange. Shares have been priced at the top of the range, giving it a market value of more than $5 billion.

Until this new generation, HPAL was known mostly for cost overruns and delays. Mining giant Vale SA experienced both before opening its plant in Goro, New Caledonia, in 2010; it’s never produced beyond 70% capacity. Chemical spills and protests by pro-independence activists in the French territory disrupted production, and Vale eventually sold its stake.

This time, Harita says, is different — thanks to China.

“China has done with HPAL in Indonesia what they did with nickel pig iron in China 20 years ago,” said Angela Durrant, principal nickel analyst at Wood Mackenzie Ltd. “It’s like teaching a child something new again and again — and suddenly they get it. Then they run with it, they catapult onward. This is what Indonesia is doing with China’s technology.”

Apart from Harita’s operation, other new arrivals include a venture combining Zhejiang Huayou Cobalt Co., CMOC Group and Tsingshan Holding Group Co. — Huayue Nickel Cobalt — which has built a $1.6 billion plant on the island of Sulawesi. GEM Co. has backed a separate $1.6 billion facility nearby, QMB New Energy Materials, with Contemporary Amperex Technology Co. Ltd’s Brunp unit and Tsingshan again.

The world’s largest nickel producer, Tsingshan had a prominent role in last year’s historic market squeeze. But it’s also known for its large-scale use of low-cost nickel pig iron that disrupted the stainless steel supply chain two decades ago. It then shocked the market again in 2018 by announcing a $700 million plan to produce battery-grade nickel in Indonesia at breakneck speed. It missed initial targets but still beat legacy rivals by years.

The results of the Indonesian revolution are visible. Mining majors producing high-end nickel have traditionally focused on sulfide ores, but today, low-grade ores that were once fit only for stainless steel are now suitable for wider use. HPAL uses material with as little as 0.9% nickel, and the cost — crucially — is manageable. It costs Harita $5,225 for a ton of nickel content using HPAL, 48% less than with traditional electric-furnace smelters, according to AME Research.


The process also yields a cobalt bonus, another key material for batteries, and the spate of investment has made Indonesia the largest source of cobalt outside of Africa.

Harita Nickel, also known as Trimegah Bangun Persada, says it learned from an HPAL plant in neighboring Papua New Guinea, which took six years to reach capacity.

The company took the same formula, including the design by China ENFI Engineering Corp., and made improvements. It patented a more efficient way to remove chrome from ore, reducing the need for sulfuric acid, which makes up one-third of the cost of HPAL.

It took one year and $1.5 billion for Harita to be fully operational. It’s since been producing at 110% of its target capacity.

Speed and scale have brought political challenges and operational concerns, with rising scrutiny on critical mineral supplies and a technology dependent on expensive, inflation-sensitive ingredients. But the environmental cost may be the biggest headache: A technology so vital to the green energy transition generates vast quantities of waste.

Harita presses the water out of its waste slurry then stacks the dry soil in former mining sites, but there’s not enough space. Its mines contain enough laterite ores to keep the HPAL facility busy for 17 years. Its dry-stacking area could accommodate just six years worth of waste, and even that’s optimistic in a high-rainfall tropical region, says Wood Mackenzie’s Durrant: “There is no such thing as dry stacking in a wet environment.”


The company proposes building a dam for tailings, bypassing the dry-pressing machine and letting the sun dry the waste slurry. But that presents its own problems. The troubled Goro mine in New Caledonia curtailed output after a leak from its tailings dam in November. And there are few easy alternatives — Ramu, the plant that inspired Harita, disposes of its tailings in the sea, a controversial practice banned in Indonesia, where seas tend to be shallow.

Harita has already faced a taste of those challenges. Reports of pollution prompted the company to build more than 34 hectares of sediment ponds to prevent mining runoff from reaching the ocean. It fenced off a spring after employees unwittingly contaminated the source of drinking water with a cancer-causing chemical. And a plan to relocate a nearby village to a purpose-built housing complex remains controversial.

“If money wasn’t an issue then companies would employ dry stacking — that is the best approach for Indonesia. But it’s very costly,” said Allan Ray Restauro, metals and mining analyst at BloombergNEF. There is a risk, he added, that Jakarta will withhold environmental permits if the waste issue remains unresolved. “This could lead to considerable delays.”

When Indonesia decided against granting permits for deep-sea tailing disposal in 2021, the policy U-turn led to delays to several nickel projects in Sulawesi.

So far, the local economy is reaping the gains from the nickel boom. North Maluku expanded 23% last year, four times the country’s growth rate. Jokowi has hailed the province as a successful example of his commodities policy.

Inside Harita’s plant in Obi, Rivan Lie points to a pool collecting liquid emerging from HPAL machinery. Suspended in the water, the MHP looks like moss. From there, it will be dry-pressed into a different kind of green. “That’s the nickel,” said Lie, charged with the plant’s human resources. “That’s the money.”

(By Yudith Ho and Eko Listiyorini)

US, Japan strike deal on supply of minerals for EV batteries

Bloomberg News | March 28, 2023 |

US Trade Representative Katherine Tai and Japan’s Ambassador to the US Tomita Koji, signed the critical minerals agreement this morning. Credit: Official Twitter account of United States Trade Representative

The US agreed to boost cooperation with Japan on critical mineral supply chains and to expand access to tax breaks as President Joe Biden aims to counter China’s dominance of the electric vehicle battery sector.


Following the pact, EVs that use materials that have been collected or processed in Japan will be eligible for incentives under the US Inflation Reduction Act, Japanese Trade Minister Yasutoshi Nishimura said Tuesday in Tokyo.

“This announcement is proof of President Biden’s commitment to building resilient and secure supply chains,” US Trade Representative Katherine Tai said in a statement. “Japan is one of our most valued trading partners.”

The deal is similar to an agreement Washington has been negotiating with the European Union which would extend access to some of the as much as $369 billion in handouts and tax credits available over the next decade under the IRA, in areas including wind, solar and electric vehicles.

Japan-based suppliers to the EV sector advanced in Tuesday trading. Sumitomo Metal Mining Co., a producer of battery cathode materials, rose as much as 2.1%, while separator manufacturer Asahi Kasei Corp. also gained.

The US remains highly dependent on China and demand for critical minerals will be enormous in the years ahead, Treasury Secretary Janet Yellen said Friday during testimony in the House Ways and Means Committee. “One of the goals of the IRA is to broadly strengthen supply chains for these critical minerals and their processing,” she said.

The Treasury Department is scheduled to put in place new requirements that will mandate battery components and critical minerals be sourced from free-trade agreement nations in order to get the full $7,500 per vehicle consumer tax credit. Though the EU and Japan are not part of any FTAs with the US, which has such deals in force with 20 nations, the new pacts are designed in part to give the allies the same status for critical minerals trade.

“Securing critical minerals, which are necessary for electric vehicles, is an important issue to tackle as demand for these cars is expected to exponentially increase,” Nishimura told reporters. Tai and Japanese ambassador to the US Koji Tomita signed the agreement on Tuesday morning in Washington.

US legislators have recently questioned both Tai and Yellen on the legitimacy of such deals without congressional approval. Meanwhile, several labor unions, which are a key base of support for Biden, have pushed back against the agreements over concerns they risk American jobs.

Lawmakers had been consulted on the deal, but it was negotiated under the USTR’s authority to reach agreements on specific sectors without the approval of Congress, senior Biden administration officials said in a background call with reporters.

‘Unacceptable’

While legally allowable, the agreement is already proving politically fraught in the US. It drew immediate criticism on Tuesday from the top Democratic lawmakers on the Senate Finance and House Ways and Means committees that oversee trade. They accused the Biden administration of abandoning its “worker-centric” trade policy and said they worry that it can’t negotiate meaningful labor and environmental protections, in an industry as prone to violations as mining, without legislative approval.

“The critical minerals agreement announced today is unacceptable,” Senator Ron Wyden of Oregon and Representative Richard Neal of Massachusetts said in a statement. “Agreements should be developed transparently and made available to the public for meaningful review well before signing — not after the ink is already dry.”

Republican Representative Adrian Smith of Nebraska, who leads the Ways and Means panel on trade, also criticized a lack of transparency and Congressional approval. And Public Citizen, a liberal advocacy group, warned that the deal could open the door for companies that violate human rights or hurt the environment to “launder” their critical minerals through Japan before shipping them to the US.

The pact contains a screening mechanism to ensure that critical minerals coming from “countries of concern” — which refers to China and Russia — don’t benefit from the IRA incentives, the Biden administration officials said.

Under the deal, the US and Japan will also refrain from imposing export duties on critical minerals traded between the two nations and discuss how to approach “non-market policies and practices of non-parties affecting trade in critical minerals” — another veiled reference to China.

(By Shoko Oda and Eric Martin, with assistance from Mayumi Negishi and Yuki Furukawa)

Canadian budget contains over $15 billion for clean technologies and critical minerals

Colin McClelland | March 28, 2023 | 

Parliament Hill in Ottawa, Ontario. Credit: Adobe Stock

Ottawa plans to spend C$21 billion ($15.4bn) over five years on clean technology in one of the main platforms affecting the mining industry contained in Tuesday’s annual federal budget.


Finance Minister Chrystia Freeland said the amount, including a 30% investment tax credit to boost clean-tech manufacturing, especially in the electric vehicle (EV) supply chain, could expand to C$80 billion ($59bn) by 2034.

“We are going to make Canada a reliable supplier of clean energy to the world,” Freeland said in Parliament. “And, from critical minerals to electric vehicles, we are going to ensure that Canadian workers mine, and process, and build, and sell the goods and the resources that our allies need.”

The tax credit for capital investments in manufacturing equipment will apply to purchases of equipment used to extract and process critical minerals used in EVs and to purchase equipment used in manufacturing along the entire EV supply chain, including for batteries.

Pierre Gratton, president and CEO of the Canadian Mining Association, welcomed the budget initiatives.

“I am optimistic that with these new measures Canada will be able to attract new private sector investment into Canada’s mining, smelting and refining industry, creating well-paid jobs for Indigenous and non-Indigenous Canadians across the country,” Gratton said in a statement.

Freeland had promised to boost Canada’s green energy stimulus after the United States approved the Inflation Reduction Act last year. It provides nearly $370 billion in incentives for investing in clean technology.

Last year, Canada approved nearly C$3.8 billion for spending in a critical minerals strategy until 2030. It included $1.5 billion for infrastructure, roads and power lines, the same amount for projects, as well as money for research and development, such as geoscience.

The clean technology subsidies announced on Tuesday are to be based on the wages earned by workers in the companies applying for aid; the higher the wages, the more financial help they would qualify for, according to the budget.

The budget also contains a 15% refundable tax credit for eligible investments in non-emitting electricity generation systems. These also include abated natural gas electricity-fired electricity generation, stationary electricity storage systems, and equipment for the transmission of electricity between provinces and territories.

There’s also a commitment to improve the efficiency of the impact assessment and permitting processes for major projects by the end of 2023.

The budget formalizes amounts contained in last year’s critical minerals strategy, such as a re-allocating C$1.5 billion within the Strategic Innovation Fund to support projects in sectors including clean technologies, critical minerals and industrial transformation. It also marks C$1.5 billion of the critical minerals infrastructure fund to help pay for energy and transportation projects associated with critical minerals.

The Liberal government also said it would support loans to Indigenous communities to support them in purchasing equity stakes in major projects through the Canada Infrastructure Bank.

Regarding the total amount of spending, Canada’s budget deficit will expand to C$40.1 billion next year instead of shrinking to a balanced budget by 2028, as put forward in the fall economic statement last year, because of greater chances of a recession and higher debt servicing costs.

The country recorded a deficit of C$6.44 billion in the first 10 months of 2022-2023 fiscal year, compared with a deficit of C$75.29 billion during the same period in the last fiscal year, the finance ministry said.

Biden tees up a supply chain rethink with challenge to China’s EVs

Bloomberg News | March 28, 2023 |

Battery Benchmarking and Test Laboratory in Allen Park, Michigan. (Credit: Ford)

Seven months after President Joe Biden signed the Inflation Reduction Act into law, the magnitude of the challenge it will be for the US to loosen China’s grip on the electric vehicle supply chain — a key objective of the legislation — is coming into sharper relief.


Ford, the top US car producer, confirmed last month that it will tap technology from China’s battery-making behemoth CATL for a $3.5 billion plant it’s building in Michigan. Tesla is expecting the base version of its cheapest car, the Model 3, to lose the entirety of the $7,500 tax credit it’s been eligible for because its cells come from China. And barring big surprises later this week, many other EVs currently qualifying for credits will be eligible for $3,750 incentives, at most, after the Treasury Department finalizes content requirements that have been the subject of heated debate and frantic lobbying.

Days before those rules are released, a Washington think tank whose mission is aligned with the IRA’s goals is releasing a detailed report delving into China’s command of the supply chain, and the corners it says the country cut on the way to dominance. The group — which goes by SAFE, standing for Securing America’s Future Energy — argues that China has been winning out in part because of failures to account for the toll that the extraction and processing of critical minerals including lithium, nickel and cobalt are taking on workers and the environment, often in lower-income countries.

For examples, SAFE points to how China pulled far ahead of the US in producing the rare earths used in EV motors, and how Indonesia has built a huge lead over Australia in producing nickel.

The US was the top producer of rare earth elements in the 1990s, until Chinese suppliers flooded the market with lower-cost supply. Those rare earths were cheaper in part because suppliers were allowed to dispose of radioactive waste into the Yellow River that flows through Western China, SAFE says, citing a report by the Institute for the Analysis of Global Security.

As for nickel, some miners in Indonesia are able to produce nickel at lower cost by cheaply dumping their waste into the ocean, SAFE says, citing a German lobby group’s report. While Australia is roughly tied with Indonesia among countries with the largest nickel reserves, it bans these disposal practices. Roughly half of the world’s nickel comes from Indonesia, while Australia supplies only 5%, according to SAFE.

“This uneven playing field, where producers compete on cost alone and visibility into how things are sourced is low, has created a global race to the bottom for critical minerals that not only disadvantages communities, the environment, and responsible producers, but also threatens American national security,” the authors of the report write.

SAFE lays out policy measures that it says would flip this phenomenon on its head. In its report, titled A Global Race to the Top, the group urges the US to band together with the European Union and Japan and agree to only source minerals produced with high standards, arguing that the rest of the world would be forced to follow suit.

There’s an analogous precedent for what SAFE is calling for: The US Agriculture Department visits international sites to ensure imported food products comply with safety regulations. The group calls for Congress to enlist the Bureau of Land Management, the Mine Safety and Health Administration, the Environmental Protection Agency and other relevant federal agencies to similarly visit mines to make sure they’re complying with US standards.

SAFE also recommends that greater transparency of where minerals are coming from — and their human and environmental cost — at the consumer level by adding that information to the window labels that lay out information including pricing and battery range.

“We see responsible mining as being key to diversifying,” Abigail Wulf, the vice president and director of SAFE’s Center for Critical Minerals Strategy, said in an interview. “Right now, it’s incredibly difficult to diversify supply chains, because it’s incredibly difficult to compete on cost. And it’s difficult to compete on cost because where you’re getting these minerals from are ostensibly degrading the environment and exploiting workers in ways you would not be allowed to in the US, Canada, the EU and Australia.”

The IRA, Wulf said, represents a “first critical step” toward the transparency SAFE is calling for. With the global transition to EVs still in its relative infancy, the group argues there’s still an opportunity to shape the future of this market and its impact on economies, geopolitics and the environment.

(By Yvonne Yue Li and Gabrielle Coppola, with assistance from Joe Deaux)