Saudis Pour Money Into American Lithium

By Alex Kimani - Aug 30, 2023

Saudi Arabia-based investment company Energy Capital Group (ECG) has invested in U.S.-based Pure Lithium, a company that specializes in lithium metal batteries, for an undisclosed sum. Pure Lithium is looking to establish a fully integrated supply chain in Saudi Arabia, using its proprietary technology that extracts lithium from oil field brines. 

“We are thrilled with Energy Capital Group’s investment in Pure Lithium. They recognise the value and impact we can have in the kingdom by unlocking oilfield brines to create a battery-ready electrode, eliminating 90 per cent of the current associated costs,” Emilie Bodoin, founder and chief executive of Pure Lithium, has said.

Famous as one of the leading oil and gas producers, Saudi Arabia is increasingly investing in clean energy. Recently, Saudi Aramco launched a $1.5 billion Sustainability Fund that will invest in technology supporting a “stable and inclusive” energy transition, making this among the largest-ever sustainability-focused venture capital funds in the world. The fund’s initial focus areas include carbon capture and storage(CCS), greenhouse gas emissions, energy efficiency, nature-based climate solutions, hydrogen, ammonia, digital sustainability and synthetic fuels. The fund will target investments globally.

Direct Lithium Extraction

A fleet of direct lithium extraction (DLE) technologies are being developed to tap salty brine deposits across North America, Europe, Asia and elsewhere, with the U.S. Geological Survey estimating the technology could unlock 70% of global reserves of the metal. Whereas DLE technologies vary, they are generally comparable to common household water softeners, and aim to extract ~90% of lithium in brine water vs. 50% using conventional ponds. 

Their biggest draw:  they can supply lithium for EV batteries literally in a matter of hours or days, way faster than 12-18 months needed to be filtered through in order to be able to extract lithium carbonate from water-intensive evaporation ponds and open-pit mines.

DLE also comes with the added bonus of offering ESG/sustainability benefits: DLE technologies are portable, able to recycle much of their fresh water and limit hydrochloric acid use.

"The world needs abundant, low-cost lithium to have an energy transition, and DLE has the potential to meet that goal," Ken Hoffman, co-head of the EV Battery Materials Research group at McKinsey & Co., has told Reuters.

"The industry is so close to a major leap forward," John Burba, who helped invent a prominent DLE technology and is IBAT's executive chairman, has told Reuters.

The DLE industry is expected to grow to more than $10 billion in annual revenue within the next decade. Commercial scale DLE projects are expected to start coming online in 2025, and could supply 13% of global lithium supply by 2030, as per projections by Fastmarkets.

Lithium players race for breakthrough to meet electric car demand

Bloomberg News | August 30, 2023 | 

Credit: Standard Lithium Ltd.

On the outskirts of El Dorado — heart of Arkansas’ 1920s oil boom — a company backed by Koch Industries Inc. is looking to dramatically speed up extraction of a battery metal essential to weaning the world off fossil fuels, while proving naysayers wrong in the process.


Standard Lithium Ltd. is working on the breakthrough inside a white warehouse near a massive chemical factory run by Germany’s Lanxess AG that feeds brackish wastewater into the facility. A cluster of pipes and tanks in the demonstration plant turn brine into a lithium compound within days instead of the year or more that traditional recovery methods take.


The firm is among dozens of companies racing to commercialize technology to extract lithium directly from brine, ushering in a new source to supplement the hard rock mines and huge evaporation ponds that currently supply the battery metal to the world. The outcome of such efforts is set to shape the industry’s future, bringing either the promise of abundant supply or setbacks that sour investors for years.

The advances are collectively known as direct lithium extraction, or DLE. They promise to be cheaper, faster and greener than traditional lithium production in South America, which holds about half of the world’s reserves of the silvery white metal. DLE would also unlock new supplies in North America, including recovering the metal out of the salty water produced by oil drilling.

“It’s an evolutionary step in the lithium industry,” Standard Lithium chief executive officer Robert Mintak said in an interview. “If we’re going to have a supply chain that can meet the demands of the lithium industry, DLE will be one of the tools.”

All along the world’s EV supply chain, this new way of mining lithium is being touted as the solution for boosting output while protecting the environment. Billions of dollars are pouring in to what Goldman Sachs Group calls “potential game-changing technology,” much like shale’s disruptive impact on the oil industry.

Still, some producers and industry experts are sounding caution. Despite a boom in testing and development, these techniques are relatively unproven at scale and perfecting them may take years. After all, Texan entrepreneur George Mitchell experimented with hydraulic fracturing for decades before finding the right method to economically extract shale gas.

Lithium prices surged to record highs last year as growth in demand from the EV boom saw markets tighten. Prices have since fallen amid a steady stream of new output from Australia, though remain elevated thanks to an upbeat outlook for EV growth. An expected shortfall from 2025 is driving startups, miners and even Big Oil to chase new ways to expand supply.

After years of intense testing and development work, the world is about to find out whether DLE works on a commercial scale.

Oil-and-gas heavyweights like Exxon Mobil Corp. are creating businesses to extract lithium from oil field brine. Rio Tinto Group, the world’s second-biggest miner, is testing extraction methods in Argentina, where it’s developing a lithium project. Meanwhile, Koch and Chinese EV giant BYD Co. are already marketing DLE technologies.

A handful of commercial projects are being built including Eramet SA’s Centenario plant in Argentina, which aims to be fully operational by mid-2025. In China, Sunresin New Materials Co. already operates such plants.

Much of the buzz can be attributed to growing scrutiny of mining’s environmental and social issues.

For years, mines in Chile’s northern desert operated by SQM and Albemarle Corp. were seen as the cleanest and easiest way to produce the metal. They pump up vast amounts of brine from beneath a salt flat, which is then stored in giant ponds for more than a year. As the water evaporates, the resulting concentrate gets processed at nearby plants and sent to Chinese and Korean battery makers.

As simple as it is profitable, that process uses far less fresh water, chemicals and energy than hard-rock mining as practiced in top producer Australia. But the evaporation method means billions of liters of brine are vaporized in one of Earth’s most arid places, which some say is a threat to wildlife such as pink flamingos that inhabit its Mars-like landscape.

DLE aims to solve such problems by using equipment like filters and membranes to strip out lithium directly and allow what’s left over to be returned to underground brine lakes. The process is much faster and uses less space than evaporation ponds. All that would reduce the impact on fragile desert ecosystems — a palatable solution for automakers and their investors as well as local communities and governments.

Bolivia and Chile are making DLE a requirement to tap their lithium riches, a significant move given that the former has the world’s largest potential deposits and the latter has the most economically mineable reserves.

Goldman Sachs estimates that if 20% to 40% of Latin America’s brine projects use DLE, it could boost the region’s lithium output by about 35% from 2028 — or an 8% boost to global supply.

Still, the effects of reinjecting brine haven’t been properly studied, and DLE plant efficiencies need to be weighed alongside the need for more freshwater and energy than evaporation. The Salar Blanco project in Chile, for example, estimates it will use three to eight times more freshwater.

“The future of DLE technologies is still uncertain, and the long-term feasibility must be evaluated,” SQM said in a written response to Bloomberg questions. The world No. 2 producer is negotiating a new contract under Chile’s recently announced public-private model that includes a requirement for more sustainable practices.

Joe Lowry, the veteran industry consultant dubbed Mr. Lithium, sees DLE as a technique to unlock new sources in North America. But in South America, it should be seen as a way to enhance rather than replace the evaporation method, he said, estimating that less than 15% of global output will be through DLE in the next decade.

Meanwhile, several oil companies are putting their weight behind efforts to retrieve lithium from oil brine. Occidental Petroleum Corp. has said it’s exploring brine-based lithium extraction, while Imperial Oil Ltd. has a 5% stake in Canadian miner E3 Lithium Ltd., which is testing DLE technology in Canada’s oil patch.

Koch, the fuels-to-fertilizer powerhouse, sees direct extraction as a way to help feed a market that’s set to grow fivefold by 2030 as EV adoption accelerates. DLE is an “easy button, if you will, for the lithium industry to bring on a tremendous amount of supply in regions where you otherwise probably couldn’t,” said Garrett Krall, director of strategic initiatives at Koch Engineered Solutions.

Koch’s technology is on full display at Standard Lithium’s demonstration plant in El Dorado. Koch even invested $100 million in the Canadian company, which plans to start building a commercial DLE facility by the Arkansas site in early 2025. CEO Mintak says he anticipates full production by 2026.

For DLE skeptics, some smaller companies have become lightning rods for questions about the technology. Short-seller Blue Orca Capital voiced doubts on the viability of Standard Lithium’s technology in November 2021. About two months later, Hindenburg Research disclosed a short position on the stock in a report critical of the Vancouver-based firm. Standard Lithium called the reports false and misleading.

At an industrial park in Santiago’s outskirts, Summit Nanotech Corp. is readying a facility to test brine from northern Chile. The Calgary-based firm uses a patented material to absorb the metal and is looking into reinjection methods, applying knowledge gleaned from Alberta’s oil fields. Direct extraction seems inevitable given the large footprint of evaporation ponds and the community opposition they attract, geoscience director Stefan Walter said.

“It’s going to take time,” he said. “It’s going to be difficult, It’s going to be capital intensive. But all new innovative technologies are kind of like that.”

(By James Attwood and Yvonne Yue Li)

E3 Lithium starts operations at lithium extraction plant in Canada

Results obtained from this pilot plant will be used in the design of a commercial-scale production plant in the future.

E3 Lithium’s DLE pilot plant in Olds, Alberta. 

Credit: E3 Lithium.

News
August 30, 2023

Canada-based lithium producer E3 Lithium has started operations at its direct lithium extraction (DLE) field pilot plant in Olds, Alberta.

As part of the pilot plant’s commissioning process, all the major pieces of equipment were connected on-site. E3’s team also conducted a series of inspections and system tests for a safe and successful start of operations.

According to the company, each DLE system is operating as expected based on performance metrics established during pre-pilot testing.

The team began operations by running the DLE processes at different system configuration settings to determine the best and the most efficient process for lithium extraction using the standards set by key performance indicators in June this year.

After a specific set of operating parameters is set, each system will run to complete two tests to confirm consistent results over longer periods and to produce large volumes of lithium concentrate. This lithium concentrate will then be processed further to obtain products such as lithium hydroxide.

The data from the pilot plant will be used in the design of a commercial processing facility as part of its pre-feasibility study and feasibility study phases.

E3 Lithium president and CEO Chris Doornbos said: “The start of full operations is a testament to the hard work the team has been putting in to get this equipment running.

“This is a foundational moment for E3 Lithium, as demonstrating DLE at pilot scale will enable us to move forward in developing this lithium asset in Alberta towards commercialisation.”


Construction on the project began in May this year, after a facility licence was secured the prior month.

E3 Lithium claims that its DLE technology can achieve more than 90% recovery while increasing lithium concentration and reducing impurities by 98%.

By scaling up its DLE technology, the company aims to produce highly pure, battery-grade lithium products.

Midland starts lithium exploration at its Quebec projects

As per Midland, the Mythril area and Galinée projects are highly anomalous for lithium-beryllium-tantalum.

Rio Tinto signed an option agreement to acquire stake in the properties, this June. 

Credit: Juan Enrique del Barrio/Shutterstock.com

Canadian mining company Midland Exploration has begun its first exploration for lithium at its Mythril area and Galinée projects, located in the Canadian province of Quebec.

Mythril Regional, including Chisaayuu, Corvette and Mythril East, along with the Galinée projects, are located in Baie-James and in Eeyou Istchee municipalities in Quebec, respectively.

The Eeyou Istchee region in the province is presently seeing exploration rush for lithium pegmatites.

The Mythril regional projects feature 730 claims, spread across 370.1km², while the Galinée project has 54 claims across 27.7km².

In June, Rio Tinto signed an option deal with Midland to acquire up to 50% interest across Mythril-Corvette, Mythril-East, Mythril-Chisaayuu, Galinee, Moria, Shire, Komo, Warp, Sulu, and Picard properties.

These properties contain a total of 2009 claims. which are spread across on more than 1,000km².

The exploration programme being conducted by Midland includes high resolution light detection and ranging (LiDAR) survey. At Chisaayuu and Corvette projects, lithium lake bottom anomalies were found following statistical treatment.

The Mythril Regional projects are claimed to contain amphibolite rock formations which are known to host rocks bearing lithium pegmatites. A historical work by the company shows evidence of lithium-beryllium-tantalum (Li-Be-Ta) pegmatite potential.


An exploration for copper, at Chisaayuu last year, returned strong anomalous lithium values with 0.12% and 0.04% of lithium oxide (Li2O).

A grab sample of pegmatitic boulder at Corvette project returned highly anomalous Li-Ta values 0.02% Li2O and 72ppm of Ta. Lake bottom lithium anomalies have also been found at the Chisaayuu and Corvette projects.

Midland further stated that none of these anomalies followed up yet and will be targeted during this exploration programme.

Solstice purchases two lithium projects in Ontario, Canada

The two projects are located near Nipigon, Ontario, and host lithium-caesium-tantalum (LCT) pegmatites.

The two new lithium projects cover a total of 96km² with 275 claims. 

Credit: A R Turner/Shutterstock.com.

Canadian gold exploration company Solstice Gold has acquired the Church Lake project and has the option to acquire a 100% interest in the Purdom project, located near the Frazer Lake area in Nipigon, Ontario.

Solstice reached an agreement with 1544230 Ontario and Gravel Ridge Resources (“optioners”) to buy the option to acquire the optioners’ stake in the Purdom project.

It has agreed to pay C$21,000 ($15,488) in cash within ten days and issue 300,000 shares to the optioners.

To exercise the option, the company must conduct exploration expenditure on the claims and make payments, including C$25,000 by the first anniversary of the option agreement followed by a payment of C$30,000 by the second anniversary and a payment of C$34,000 by the third anniversary.

It must also pay at least C$30,000 for exploration work within the first anniversary.

The optioners will retain a 1.5% net smelter royalty (NSR) on the project, including a 0.75% buyback for C$900,000.

With these acquisitions, Solstice added 96km² of strategic land for lithium pegmatite exploration. The Church Lake project covers 55km² of area with 261 claims and the Purdom project spans 41km²with 14 claims.

The Church Lake project is 5km south of Pegmatite One Lithium’s (PGA) claims, which host a new lithium-caesium-tantalum (LCT) pegmatite discovery.


It is within the halo of two-mica granite mapped by the Ontario Geological Survey (OGS), which is expected to be the source of the LCT pegmatites in the region. OGS’s survey also suggests that the pegmatites are closer to the intrusive.

The project is within the southern end of a fault with several lithium lake sediment anomalies. There are prominent east-west structures across the area’s length.

The Purdom project is located east of PGA’s claims and 3.5km to OGS-mapped two-mica granite. It is claimed to host lithium lake sediment anomalies.

Lake sediment anomalies at the two projects are newly documented and provide positive indications of potential for pegmatite discoveries, Solstice added.

Solstice CEO Pablo McDonald said: “A possible western extension of the Georgia Lake Deposit in this area was identified as part of Solstice’s 2023 Province-wide review of potential lithium areas. We had been tracking progress in the area and decided to seize the opportunity to stake once we saw positive results to confirm its potential.

“We are very happy with the preliminary results we’ve seen from our reconnaissance field trip, and we have already mobilised field teams to the area. We will be making use of structural and geochemical data to vector into the areas of the highest potential in this area while doing systematic coverage of the properties.”

Chile to investigate deadly mining accidents at Anglo American and Minera ACF

Mining Minister Aurora Williams said that the Ministry of Mining is closely monitoring the investigations.

By Annabel Cossins-Smith

The new Minister of Mining, Aurora Williams, is sworn in by Chilean President Gabriel Boric during a ceremony at La Moneda Presidential Palace in Santiago on 16 August 2023. Credit: JAVIER TORRES/AFP via Getty Images.

Chile’s Government has begun an official investigation into deadly accidents at two mines belonging to Anglo American and Minera ACF, Mining Minister Aurora Williams said in a statement on Sunday.

The country’s National Mining and Geology Service (Sernageomin) announced in two separate tweets over the weekend that three workers had been killed in accidents. Two occurred at Anglo American’s Los Bronces copper mine, which sits some 40 miles from the country’s capital Santiago.

Sernageomin said of the Anglo American deaths: “We regret to report the deaths of two workers in an accident that occurred at the Anglo American mining site #LosBronces. [Our] team will go to the [mine] to start an investigation. We send our condolences to the families of both workers.”

Anglo American Chile said in a statement on Saturday that the relevant authorities have already been informed and an “exhaustive investigation” has been launched to determine the cause of the accident. It added that the company is “deeply sorry for what happened and send our condolences to the families of both workers, as well as their colleagues and friends. For Anglo American, the safety of the people who work on our sites is priority.” The two workers that died were contractors with the engineering company NETaxion.

Sernageomin also announced the death of one worker at the Minera ACF iodine and nitrate mine in the northern Tarapaca region. Minera did not immediately respond to requests for comment.

Williams said that the Ministry of Mining is closely monitoring the investigations. “The Mining Ministry expresses its heartfelt condolences to the workers’ families and co-workers,” the ministry said in the statement. It also called on the mining companies to further reflect on the value of safety in their operations.

Study warns against the impacts of alluvial mining on river systems

According to the study, riverbed mining is taking place at higher rates than ever before.

By Florence Jones

Illegal gold mines in Brazil’s rainforests contaminate local water supplies with discarded mercury.

Credit: Getty Images.

Aresearch study published in the scientific journal Nature last week has warned about the impact of mining stream beds, known as alluvial mining, on river systems.

The study’s authors found that gold and mineral mining in and near rivers is degrading waterways in 49 countries. The research focused on tropical waterways, principally located in South America and Africa.

River mineral mining involves intensive excavation and sediment processing in river corridors, releasing sediment downstream. This excavated material disrupts aquatic life and human health. Suspended sediment can carry toxins such as mercury, which is used in the river mining process.

According to the study, “increasing gold and mineral mining activity in rivers across the global tropics has degraded ecosystems and threatened human health”.

Other research has also shown an increase in the concentration of lead and mercury in local waterways where gold mining is taking place.

“For hundreds, if not perhaps, thousands of years, mining has been taking place in the tropics but never on the scale, as we have seen over the past two decades,” Evan Dethier, one of the authors of the study and visiting assistant professor at Bowdoin College in the US, told reporters.

“The degradation of rivers from gold and river mining throughout the tropics is a global crisis,” he went on. The researchers analysed river mining across the tropics from 1984 to 2021.

This year, the Brazilian Government issued a medical emergency following reports of increased levels of malaria and mercury poisoning among indigenous communities in the Amazon rainforest. The administration concluded that illegal gold miners in the area are responsible for exposing the community to new diseases that they had not previously been exposed to and polluting waterways with mining tailings.

Sediment also has severe impacts on wildlife and the environment. Fish cannot see predators and prey, and their gills can become choked with sediment.

GLOBALIZTION

Indonesian nickel smelters turn to Philippines for ore as local supply tightens

Reuters | August 30, 2023 

Image: Harita Nickel

Nickel smelters in top producer Indonesia are making rare purchases of ore from the Philippines to ease tight supplies, people familiar with the matter said, upending trade flows of the raw material and pushing up costs across the supply chain.


Jakarta recently delayed the issuing of mining quotas and suspended operations at a key site of state miner Aneka Tambang (Antam) after an investigation into corrupt practices in issuing mining allowances.

While mining at other sites continues and Indonesia, which accounts for half of global mined supply, has said there is no shortage of ore, prices have risen about 8% this week, following a 10% surge a week earlier, local buyers say.

Some firms are now buying ore from neighbouring Philippines, the world’s No. 2 supplier, in the event that new mining quotas are further delayed, said three smelter managers, two nickel traders and a Chinese analyst.

All declined to be identified because they were not permitted to disclose the trade information publicly.

“(We) started imports from this month. It is economical,” said an official at a major smelter in Indonesia.

The person did not specify how much the smelter is buying but said the purchases are of low-grade limonite ore.

Indonesian miners will prioritize high-grade ore for their limited production quotas, the person added.

Indonesia imported 53,864 metric tons of nickel ore in the first half of 2023, up from 22,503 tons for all of 2022, Indonesian trade data showed.

But imports from the Philippines only started in May, and all arrived at Morowali port in a huge nickel processing park run partly by Chinese nickel giant Tsingshan Group, the Indonesian data showed.

Tsingshan did not respond to a call and email seeking comment.

Volumes in the first half from the Philippines were less than 1,000 tons in nickel content compared to Indonesia’s 1.6 million tons mined last year, data from the Indonesian government and the International Nickel Study Group (INSG) showed.

“The ore from the Philippines is generally lower grade than Indonesian material which will push operating costs higher due to lower production from same tonnage of ore,” said Wood Mackenzie analyst Andrew Mitchell.

“But the ore is cheaper by comparison with domestic ore currently and so this will offset some of the rising costs,” Mitchell said.


Indonesia exported much of its ore before a 2020 ban halted all shipments and attracted billions of dollars worth of investment in nickel smelting, mostly from Chinese companies.

Imports from the Philippines could rise to 100,000 tons for July and August combined because of the supply tightness, according to Chinese consultancy Mysteel.

The Philippines mined 360,000 tons of nickel in ore in 2022, or 11% of global supplies, according to INSG.

Rising demand for ore from the Philippines is also pushing up prices in China, as buyers stock up due to tighter Indonesian supplies and ahead of the rainy season in the Philippines starting in October, said a Chinese trader.

Philippines 1.3% grade ore landed at China’s Lianyun port surged 20.6% in the past month to $41 a ton, the highest since March, Mysteel data showed.

(By Mai Nguyen, Siyi Liu, Fransiska Nangoy, Enrico dela Cruz and Beijing Newsroom; Editing by Dominique Patton and Kim Coghill)

India to start critical mineral blocks auction process this year

Bloomberg News | August 30, 2023 

Stock Image

India is preparing to start the auction process for some 100 critical mineral blocks in the next four months, as part of plans to secure domestic supplies of the raw materials needed to fuel the green energy transition.


The blocks are for minerals including nickel, lithium, cobalt and platinum, along with rare earths, Mines Secretary Vivek Bharadwaj said in an interview in New Delhi.

“The legal framework has been laid out and the blocks have been identified,” Bharadwaj said. The tender seeking bids is expected to be out by December and auctions may start three months later, he added.

The South Asian nation is racing to ensure critical minerals security to power its ambition to make the country a key battery and electric vehicles manufacturing hub and help attain a net zero goal. India currently doesn’t mine key materials like lithium, cobalt and nickel locally.

In order to incentivize global and local miners to participate in the process, the government is planning to reimburse half the cost of exploration, Bharadwaj said. Companies may take at least three years to bring the mines into operation, he added.

India changed its mining rules last month in a bid to boost exploration of some critical minerals like lithium by allowing private miners to search for the materials. The reforms will be key for auctioning lithium blocks recently identified in Jammu and Kashmir, and Karnataka state.

Some state-run companies have been scouring the globe for such assets while energy heavyweights Coal India Ltd. and NTPC Ltd. are mapping out plans to mine the materials. Khanij Bidesh India Ltd., a joint venture of three government-run firms, has been created to purchase critical mineral assets overseas, mainly in Australia and South America.

(By Swansy Afonso and Rajesh Kumar Singh)

GEMOLOGY

India asks US to release funds frozen over suspected Russia diamond link – sources

Reuters | August 30, 2023 | 

(Image courtesy of Alrosa).

India has asked the United States to release $26 million belonging to at least two Indian diamond firms frozen due to their alleged trade links with sanctioned Russian diamond major Alrosa, three Indian sources told Reuters.


The Office of Foreign Assets Control (OFAC), the US Treasury unit that oversees sanctions, froze the funds earlier this year, said two of the sources. Both are Indian government officials but declined to identify themselves or the companies citing the sensitivity of the matter.

The OFAC freeze is the first known punitive measure against any Indian business since Russia’s full-scale invasion of Ukraine last year and subsequent Western sanctions on Russian entities.

OFAC froze the funds when UAE-based units of the unspecified Indian companies tried to transfer them to buy rough diamonds. Reuters could not determine if the money was being transferred to Alrosa or another party.

“The government is aware of the OFAC action and has initiated dialogue over it,” one of the Indian government sources said. “The problem was suspicion of trade links with Alrosa.”

The Indian firms impacted by the action have told the government that the payments were meant either for non-sanctioned Russian entities or for orders completed before the sanctions on Alrosa came into effect in April last year, the source said.

State-controlled Alrosa, the world’s largest producer of rough diamonds, did not respond to an email seeking comment. India’s trade and foreign ministries and the US treasury department also did not respond to requests.

India has the world’s largest diamond processing capacity and exported polished diamonds worth more than $22 billion last fiscal year that ended on March 31. The industry, based mainly in the western state of Gujarat, buys rough diamonds from suppliers in countries such as the United Arab Emirates, Belgium and Russia.

(By Shivangi Acharya, Rajendra Jadhav, Polina Devitt and David Lawder; Editing by Conor Humphries)

AI’s potential role in the coal industry

Reuters | August 30, 2023 | 

In this thought-provoking interview, we delve into the intriguing realm of artificial intelligence and its potential to reshape the landscape of coal mining and utilization. Join us as we engage with an expert at the intersection of AI and energy to uncover the promises, challenges, and prospects of integrating cutting-edge technologies into a time-honored sector.


Tell us about yourself and what you do

My name is Adam Kokorkhoev, and I’m a co-founder of FTOREX, a company specializing in commercial brokerage and commodity supply. The company supplies several grades and specifications of high-caloric value coal to customers worldwide, focusing on Southeast Asia and the Middle East. We aim to provide direct contracts and competitive pricing straight from the manufacturers.

Over the past few years, I have been deeply involved in the coal industry, witnessing a transformative shift driven by the integration of new technologies in our sector. I believe the industry’s evolution will be driven by artificial intelligence technology.

How do you envision AI’s potential role in the coal industry and its impact on overall efficiency and productivity?

AI can automate and optimize various processes in the coal industry, making them more efficient and accurate. It can determine optimal parameters, analyze coal demand to predict future trends and prices, optimize energy consumption in mining and processing — and more. The big news for the whole industry is the joint launch of the Pangu Mine Model by Huawei and Shandong Energy Group, the world’s first commercial AI model for the energy sector and the coal industry in particular.

The model identified 21 application scenarios related to coal mining, tunneling, primary transportation, auxiliary transportation, lifting, safety monitoring, rock burst prevention, coal preparation, and coking. It’s been tested in several coal mines in Shandong, and the whole industry eagerly awaits the results.

In what specific areas of the coal industry do you believe AI technologies could be implemented to optimize operations and processes?

AI technologies can be used to explore deposits, drilling, mining, processing, and equipment maintenance. It can analyze geological data to find promising coal deposits, optimize quality control and accident prevention, monitor coal quality, determine optimal cleaning and sorting parameters, and predict possible failures or breakdowns, increasing overall efficiency.

How can AI be used to improve safety conditions for coal miners and reduce workplace accidents in the coal mining sector?

Introducing this tech can greatly improve miner safety and reduce workplace accidents. Its applications range from accident and working conditions monitoring to security data analysis, virtual training, and automation. Also, AI could eventually replace some underground workers, which would significantly lower risks.

Given the current environmental concerns related to coal usage, how can AI be leveraged to develop cleaner and more sustainable practices within the coal industry?

Artificial intelligence can be used to develop cleaner and more sustainable practices to reduce the coal industry’s environmental impact. It can create algorithms to develop emergency energy sources, alternative energy power plants, and energy storage systems and analyze the environment around coal mines and power plants to monitor pollution levels.

What challenges do you foresee in integrating AI technologies into the coal industry, and how do you propose overcoming these obstacles?

One of the biggest problems is the lack of available data for routine AI training. We can help solve that problem through collaboration with universities, research centers, and independent study groups to gather data or create the necessary databases. This poses another problem: some of this data is confidential. Insufficient data protection could lead to an abuse of this information, so a high level of data security, encryption, access control, and monitoring must be put in place.

I also think that there is a shortage of qualified specialists with enough field knowledge in machine learning, data analysis, and algorithm development. Here again, the solution would be to invest in education, personnel training, and experience from other organizations.

And lastly, introducing AI may raise concerns about the loss of jobs, so it would be mandatory to engage in public dialogue. Overcoming these challenges requires collaboration from government agencies, academics, and quality professionals to push the necessary research, training, and development forward. Only then can we begin to approach the ethical and scientific aspects of AI implementation in the coal industry.

How can AI and machine learning algorithms assist in predicting and mitigating potential geological risks in coal mining, such as collapses or gas emissions?

AI can process large amounts of data on organic environments, accumulation history, seismic activity, increased danger, and stress in the ground to predict possible collapses.

Once the AI has had time to learn what a normal environment looks like, it could help develop predictive models using data on previous occurrences of gas buildup or rock bursts. The Pangu Mine Model I mentioned earlier can analyze the quality of stress relief drilling and assist rockburst prevention personnel in quality verification, reducing their review workload by over 80%. These applications may even roll over to the development of security systems and personnel training.

However, it is important to understand that AI is not a panacea and should be evaluated against other security methods.

Considering the trend towards renewable energy sources, what role can AI play in helping the coal industry adapt and diversify its operations to remain relevant in the changing energy landscape?

In a nutshell, AI can help the coal industry to adapt and diversify its operations, keeping up with the pace of modern tech. This could be achieved by optimizing performance to increase output while reducing harmful effects or forecasting market demand to automatically change output levels to match. Whatever the future holds for renewables, the coal industry needs to adapt to new interests, industries, and stakeholders.

How might AI-driven automation impact job roles within the coal industry, and what measures can be taken to support the workforce through this transition?

AI-drivel automation could replace some jobs in the coal industry. For example, if the coal is detected, AI-powered machines may do the job that was previously done manually, such as drilling or transporting coal.

Artificial intelligence can be used to continuously monitor the personnel’s health or the status of equipment to prevent accidents and address issues timely. It can optimize logistics, including route calculation and inventory management, reducing transportation costs and improving the efficiency of coal delivery. Besides that, it can analyze large amounts of data collected in the coal industry, help identify patterns, and make more informed decisions.

To support the workforce during this transition period, we can include retraining and training, creation of new jobs, introducing social programs and support, and cooperation with trade unions and public organizations.

Data security and privacy are crucial in any AI application. How can the coal industry ensure that sensitive data, such as geological surveys or employee information, is protected when using AI technologies?

Ensuring data security and privacy is a very high priority when building AI technologies, more so in an industry like coal. All sensitive data, like geological surveys, must be encrypted, access to control systems must be limited to authorized personnel, and the physical security of servers needs a great deal of attention, too.

Once you have these security measures in place, employee training on the importance of data security and information leaks becomes paramount. Regular security audits to look for vulnerabilities, security regulation and compliance, and network security maintenance are all important and necessary steps when working with this kind of data.

I believe that data security and privacy must be built into all aspects of AI technologies in the coal industry.

AI systems are only as good as the data they are trained on. How can the coal industry ensure that the data used for AI implementation is accurate, reliable, and representative of the industry’s diversity?

The data used to study AI systems should reflect different aspects of the industry, including data from different deposits, used equipment, and types of mining. It’s necessary to implement data quality control processes to correct errors and distortions and analyze it to detect inconsistencies. Data checks from coal industry experts and regular updates would help make sure the data is relevant.

It is important to note that data quality assurance is an ongoing process, and the coal industry must constantly work to improve it to ensure the accuracy and reliability of AI systems.

(The views and opinions expressed herein are the views and opinions of the author, Anthony Clarke.)