COMMENT

Australian lithium production to grow by 24.5% in 2022 as capacity expands

Ongoing labour shortages due to Covid-19 remain a challenge for lithium output in Australia.

Australia’s lithium production is set to increase by 24.5% to 68.45 kilotons (kt) in 2022, as projects that were operating at reduced capacity, mostly due to the pandemic restrictions, returned to regular levels back in 2021 and are expected to continue operations going forward.

However, ongoing labour shortages due to continued cases of Covid-19 remain a key challenge for Australia, which accounts for more than half of the global lithium output.

For example, first quarter 2022 output at Pilbara Minerals dropped by 2.4% to 81,431 dry metric tonnes of spodumene concentrate, having been impacted by the community transmission of Covid-19 in Western Australia, resulting in the shortage of staff and contractors. This is anticipated to continue in the current quarter, ending June 2022.

Overall, Australia’s lithium output is expected to increase at a combined annual growth rate (CAGR) of 14.2% to 116.24kt in 2026, supported mainly by scheduled expansions alongside consistent output from existing mines. A sharp increase in the country’s production is expected to take place in 2023, when the Wodinga lithium mine, which was put under care and maintenance in late 2019, returns to operations.

// Main image:St Agnes, UK - 2018: Visitors of the Wheel Coates tin mine site, wearing hard hats and listening to one of the local guides. Credit: AmbrosiniV / Shutterstock.com

GlobalData also anticipates the resumption of mining activities at Bald Hill Lithium and Tantalum (2023) and the commencement of Mt Holland Lithium (2023) and Kathleen Valley (2024) projects to further boost Australian production.

In May 2022, Tianqi Lithium produced Australia’s first lithium hydroxide monohydrate, also known as battery-grade lithium, from its plant in Kwinana, which will add significant value to the Australian lithium industry.

With an objective to reduce fuel consumption and greenhouse gas emissions, due to concerns over global warming, global demand for batteries continues to increase, driven by demand from electrical appliances and electric vehicles.

As a result, the global demand for lithium, a key raw material for batteries, is expected to rise from a forecasted 114.4kt in 2022 to 248.4kt in 2026, at a 21.4% CAGR.

// Main image: The Greenbushes Mine in Western Australia. Credit: Adwo via Shutterstock

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02/16/2024 23:56:16

COMMENT

Robot wars: mining supremacy is a matter of deploying robotics effectively

Robotics has led to optimised travel and operations, as well as automation on mine sites.

Any successful mining company is already using robotics; the competitive edge belongs to those who use robotics better.

For example, Fortescue implemented robotics for 43% pit-to-port savings; Rio Tinto’s autonomous train saves almost 1.5 million kilometres of annual road travel, and Boliden’s automated drill rigs are capable of 40% more operating hours than conventional alternatives.

Fortescue Metals Group

Fortescue Metals Group deployed a fleet of autonomous trucks at its Solomon Hub mines. The company began deploying Caterpillar autonomous trucks in 2012, at the Firetail and Kings Valley iron ore mines. The deployment was successful — the trucks at the initial two mines have moved over 200 million tons of material since 2012 — and Fortescue has expanded its fleet to other projects.

Pit-to-port costs at the Solomon Hub mines decreased by 43% with the implementation of the trucks. The gains come from a combination of higher productivity and lower expenses.

Rio Tinto

Rio Tinto’s iron ore business operates the world’s first fully autonomous heavy-haul long-distance railway. AutoHaul operates in the Pilbara region of Western Australia. The network involves 200 locomotives and 1,700km of track. Each train comprises three locomotives and carries 28,000t of ore.

Trains are monitored remotely from an operations centre over 1,500km away, and tThe operations team uses simulations, tests, and data from real runs to optimise the project. AutoHaul began full operations in 2019.

AutoHaul precludes the need to transport drivers to and from trains, saving around 1.5 million kilometres of road travel each year. Safety is improved by reducing personnel, and because AutoHaul performs better than human drivers at level crossings and has automated responses to speed restrictions and alarms.

It also provides environmental gains by calculating the most consistent driving strategy from the train and network topography data, which involves as little accelerating and decelerating as possible.

Boliden

Boliden’s Aitik mine uses automated drilling rigs for its drilling and blasting operations. Such operations require much precision — the distance between each drill hole must be exact — and the material transfer chain is quite delicate. Though the task is difficult, it is repetitive, which made it ripe for automation.

The automated rigs that were introduced, known as ‘pit vipers’, can move between drill holes autonomously. Predefined tasks can be performed autonomously, and undefined tasks can be performed remotely using the cameras attached.

Five drills at Aitik have been upgraded to pit vipers. Automation increases annual operating hours, on average, by 40%, from 5,000 to 7,000.

// Main image:Trains carrying ore. Credit: Productaction via Shutterstock

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02/16/2024 23:56:16

COMPANY INSIGHT

Easy ESG - For the Board and Shareholders

Appreciation of the effect of changing regulations enables mine operators to proactively assess and respond to their relative exposure. A proactive response enables the operator to retain control of change processes in advance of a regulatory direction enforcing the change, the resource demand and the timeframe.
By way of example, Aspect Environmental looks at the requirements of the NSW Mining Amendment (Standard Conditions of Mining Leases – Rehabilitation) Regulation 2020 and how operators can respond and retain process control.

takeholder expectations continue to evolve for Environmental, Social and Governance (ESG) reporting. Organisations are expected to tangibly demonstrate their commitment towards sustainability and to proactively manage their operational and financial strategies accordingly. Our team has prepared a series of discussion papers to enhance understanding of ESG value to the mining sector.

Due to perceived complexity, almost 1/3 (30%) of Australian companies believe that they are underperforming in their ESG reporting commitments.

ESG reporting is tailored to disclose how organisations have managed their ESG risks to investors and stakeholders and demonstrate their ethical performance against each of these elements.

//Figure 1: ESG principles (source: http://www.jhinvestments.com)

An ESG report that aligns closely with organisational operation and financial strategies can have a positive impact on the value of that company, not only from investor’s perspective but from regulators and the communities they operate within. An aligned ESG program reduces operational risk and risk/incident exposure – thereby providing enhanced value to investors and stakeholders.

Whilst in Australia there are no specific legal requirements for companies to report on sustainability, there are certain obligations to report both financial and non-financial information. Obligations under the ASX Listing Rules, sections of the Corporations Act 2001 and the G100 Guide include requirements for discussion and analysis of key financial and non-financial, social and environmental performance indicators. Sustainability reporting places additional value on intangible assets such as human resources, customer and supplier relationships and innovations.

Further, it facilitates a consistent and accepted approach to risk management and mitigation profiles to assist stakeholders to make decisions.

Organisations who have significant interests in or are involved with infrastructure projects can adopt the Infrastructure Sustainability (IS) Rating Scheme to reduce the complexity of ESG reporting and provide recognised, measurable outcomes.

What is the IS Rating Scheme?

The Infrastructure Sustainability Council (ISC) is Australia and Aotearoa New Zealand’s member-based body that advocates sustainable performance by building sustainability into each stage of the infrastructure lifecycle. The IS Rating Scheme evaluates economic, environmental, social and management performance across the planning, design, construction and operational stages of infrastructure development.

//Figure 2: ISC Rating Scheme (Source: https://www.iscouncil.org/)

The IS Rating Scheme’s four themes (governance, economic, environmental and social) are divided into sub-categories, and each sub-category is rated against a specific aspect of sustainability performance. This may relate to a mitigation or improvement initiative, or a process that supports achievement of sustainable outcomes.

With core ESG elements aligning with IS Rating Scheme credits, organisations are provided a simple and efficient way to report their performance against relevant sustainability criteria.

Benefits to Receiving the IS Rating

Achievement of IS ratings for infrastructure translate to public acknowledgement including local and international market recognition as a sustainability leader.

//Figure 3: Benefits of the IS rating scheme (Source: https://www.iscouncil.org/)

Sustainable corporate performance has been shown to correlate strongly with financial performance. Stock prices of companies with high sustainability or ESG ratings tend to be less volatile. Social awareness of a company's sustainability performance is becoming increasingly available to the wider public, who provide some pressure to companies to focus on, manage and be accountable for environmental, social and governance sustainability.

Social awareness, stakeholder engagement and management of climate change impacts have become forefront of the global business and political spectrum.

Asset Types addressed by the IS Rating Scheme

The IS Rating Scheme is applicable to a wide range of Infrastructure asset types.

//Figure 4: Asset types subject to the ISC Rating Scheme (Source: https://www.iscouncil.org/)

Each IS Rating will be tailored to each different asset type to incorporate their individual sustainability criteria.

Mining Applicability and Where To?

The ISC framework is applicable to infrastructure asset components associated with mining developments, design and operations. It facilitates the ability for mining organisations to proactively demonstrate their commitment to sustainable efficacy in terms of environmental, social, economic and management elements.

Adding the IS framework does not change ESG reporting, but enhances the sustainability reporting capabilities. Future papers will focus on application of the framework to mining operations and alignment to global sustainability metric frameworks. Our end goal is to clearly and simply identify how an organisation’s value can be increased in the eyes of regulators, the community and investors.

Contact information

Aspect Environmental

Aspect Safety Group

Suite 117 / 25 Solent Circuit
Baulkham Hills

NSW 2153

Tel: 0439 455 975

Web: www.aspectenvironmental.com.au

Email: info@aspectenvironmental.com.au

02/16/2024 23:56:16