Webinar: Challenges in Handling Critical Minerals

Speakers: - Anna, Business Development at K-MINE - Brian Savage, CEO of Electric Metals - Guy Winter, Partner at Fasken, Member of the Critical Minerals Expert Committee

K-MINE started its journey in Ukraine in 1984. By 2024, the company has expanded its presence across Europe, Asia, the United States, and Canada. The team includes developers, surveyors, geologists, and mining engineers, with experts qualified for NI 43-101 and JORC reports.

K-MINE serves a wide range of clients - from small exploration groups to large corporations - with a cost-effective approach. The core offering is mining software designed as a comprehensive solution for every stage of a mining project, from exploration to full production. The platform includes 12 versatile modules suitable for both open pit and underground mines.

The software handles everything from processing geological data and surveying to developing optimized mining plans for both short-term and long-term projects. By integrating with IoT devices or dispatch systems, K-MINE enables real-time monitoring and informed decision-making.

In consulting, K-MINE offers technical reports compliant with NI 43-101, SK-1300, and JORC standards for various project stages - prefeasibility studies, feasibility studies, mineral resource estimation, and preliminary economic assessments. The expertise covers a wide range of hard rock commodities, including critical minerals.

Critical minerals are essential for national security, economic stability, renewable energy development, and infrastructure. The Energy Act of 2020 defines a critical mineral as any non-fuel mineral or substance that has a high risk of supply chain disruption and is essential for energy technologies, including production, transmission, storage, and conservation.

Examples of critical minerals include aluminum, cobalt, copper, lithium, magnesium, manganese, and nickel. The demand for these minerals is expected to grow rapidly, and the list may change and expand over time.

Different countries maintain their own lists based on specific needs and priorities: - Japan and Canada have identified 31 critical minerals - The UK considers 18 minerals critical - The European Union has designated 34 critical raw materials - India has identified 30 critical minerals

Ukraine is rich in occurrences and deposits of critical minerals, including graphite, lithium, manganese, tantalum, and beryllium. Notable deposits include the Novopoltavka apatite rare metal deposit, the Azov rare earth deposit, and the Shevchenkivske pegmatite zone, among others.

These areas require geological exploration and research. Rare earth metals could become a significant asset for Ukraine post-war. To make this happen, Ukraine will need to establish a production cluster and special economic zones. This will require political will, clear regulations, economic and fiscal incentives for investors and operators, and transparency from courts and law enforcement agencies.

Brian Savage provided a historical overview of how the critical minerals supply chain shifted away from the West.

1940s: During World War II, the US had an integrated domestic supply chain with world-class R&D.

1960s-1970s: Environmental activism led to the formation of the US EPA. The "not in my backyard" movement began pushing mineral supply, processing, and R&D outside the United States - primarily to China.

2010: The China-Japan rare earth trade dispute served as a wake-up call when China withheld rare earths from Japan, causing severe economic impacts.

2020: COVID-19 exposed supply chain vulnerabilities and disrupted just-in-time inventory systems.

2022: Europe recognized the risks of relying on Russian gas following Russia's invasion of Ukraine. The United States woke up to the reality that it had exported its mineral supply chain 50 years earlier.

Indonesia controls approximately 60% of the world's nickel production. The Democratic Republic of Congo holds about 70% of the world's cobalt. While Bolivia and Argentina have the largest lithium resources, Australia is the top producer, followed by Chile.

China processes the majority of critical minerals globally: - About 87-88% of rare earth metals - Nearly 60% of lithium - Over 60% of cobalt - Almost complete control over deep processing of graphite

The world remains heavily reliant on China for minerals required for the clean energy transition.

Rare earth elements include 17 metals - 14 from the lanthanide family, plus scandium, yttrium, and lanthanum. They are crucial for producing permanent magnets, especially neodymium magnets (a combination of neodymium, iron, and boron).

Wind turbines and electric vehicle motors require neodymium permanent magnets. Green technologies are the main drivers of global demand for neodymium, praseodymium, dysprosium, and terbium. Permanent magnets are also essential for smartphones, audio equipment, robots, factory automation, aviation equipment, and high-speed elevators.

The climate change agenda is driving electrification across all sectors, which in turn drives demand for critical minerals. Policy makers in Western countries are now facing the consequences of having outsourced mineral production and processing decades ago.

The EU designated 34 minerals as critical - those important for the EU economy and facing supply disruption risks - and 17 of those as strategic due to their importance and global supply imbalances.

The United States responded with the Inflation Reduction Act (IRA), creating significant investment incentives for domestic mineral development.

The urgency of transitioning to clean energy is putting increasing pressure on mining companies to develop new technologies and explore secondary sources.

Hydrometallurgical processing: Recent innovations show that organic acids can be beneficial. A new recycling method for lithium-ion batteries uses only organic acids, producing high-purity cobalt and lithium products.

Ionic liquids and deep eutectic solvents have shown both economic and environmental feasibility as alternatives to traditional solvent extraction methods.

Membrane technology: Nanofiltration, ultrafiltration, and electrodialysis methods are being developed for metal separation. These are also explored for CO2 separation, purification, and capture from industrial processes.

Direct lithium extraction (DLE): Lilac Technology is developing a high-performance, low-cost ion exchange approach for extracting lithium from brines. This method eliminates the need for traditional evaporation ponds.

Electrochemical lithium extraction: Electra Flow Technologies is developing an electrochemical process using lithium-selective electrodes to convert saltwater brines into lithium chemicals for batteries. The process works with brines of low lithium content and offers high scalability with a modular cell stack design.

Deep sea mining is an emerging industry looking to extract valuable minerals - manganese, copper, cobalt, zinc, and rare earth metals - from the ocean floor. Minerals are found in three main habitats: abyssal plains, sea mounts, and hydrothermal vents.

Commercial deep sea mining hasn't started yet. The proposed method involves deploying a large mining vehicle to the seafloor that vacuums the top 4 inches of the seabed, sending material up to a surface vessel for sorting.

A Norwegian study identified significant quantities of metals on the country's extended continental shelf - an estimated 24 million tons of magnesium and 3.1 million tons of cobalt in manganese crusts. The crust also holds 1.7 million tons of cerium and rare earth metals.

However, Norway's deep sea mining plans face heavy international criticism. Currently, 24 countries - including seven EU nations (Finland, France, Germany, Portugal, Spain, Sweden) - are calling for a moratorium. Multinational companies such as Google, Samsung, Volvo, and BMW have pledged not to source minerals from the seabed.

The International Energy Agency states that to reach net zero emissions by 2050, the supply of critical minerals must increase by 3.5 times by 2030.

Analysis of more than 100 mineral projects (copper, cobalt, graphite, lithium, manganese, nickel, rare earths, zinc) reveals that nearly 60% reported pre-production delays ranging from several months to several years between 2017 and 2023.

The three biggest reasons for delays: - Permitting issues - Technical challenges - Commercial issues - Sustainability concerns and stakeholder opposition

K-MINE offers both software for deposit modeling and mineral resource estimation for critical minerals, and consulting services for exploration design, open pit and underground mine design, exploration reports, and calculation of reserves and resources. The reference list includes projects for titanium, graphite, cadmium, barium, and more.

Key industry observations: - Greenfield projects are taking off quickly, but critical mineral deposits often involve complex ores that are difficult to enrich and process - There is a growing trend of updating and re-evaluating previously modeled deposits under new economic conditions - Such projects face unique challenges including previously completed mine workings, uneven sampling networks, lack of geological studies, and sometimes partial or complete lack of data

Critical minerals projects must be viewed within a legal environment shaped by three strong drivers:

The energy trilemma: Security of supply, affordability, and sustainability.