Dynamic Self Regulating System

This system is not growing and

has been stable for some time

Conventional Model for Sustainable Priorities

Business has been done a certain
way for the last 100 years. Now lets
do it for another 100.

Economic
Environmental
Social
Governance
A completely new
business model is
now appropriate
$$$ have been the
primary driver

The reasons why

we mine ore should
be re-examined

Try this for size

Enough for everyone, for ever

If you are not considering all three of these things then you are not
sustainable

Case Study 2: Mogalakwena

Mogalakwena platinum mine in South Africa hit several

sustainability limits
Operation expanded several times
Villages were sometimes moved to accommodate this
Operation was in direct competition with local
population for water and power supply
Local population depended on mine operations
economically
Multiple power shortages & water shortages
Mine site would occasionally crash local power grid
The mining corporation in question was not doing
anything unusual in mining operational parameters (no
unusual site restrictions)
In this case, the conventional mining process was in
direct conflict with the sustainability of local population

This site put the spot light on the

sustainability issue in all its forms

The impact of mining and processing minerals

consumes close to ten percent of world
energy, spews almost half of all toxic
pollution from industry in some countries,
and threatens nearly 40 percent of the
worlds undeveloped tracts of forests
while generating only a small share of
jobs.
Payal Sampat in a Worldwatch Institute
report (State of the World 2003)

Mining empowers everything

else by supplying raw
materials for manufacture
and energy

Waste Dump Mathematics

The ratio of discarded earth and rock to marketable
gold is particularly high: according to Sampat,
about 300,000 tons of wastes are generated for every
ton of marketable gold, or roughly three tons of
waste per gold wedding ring.

Mining and money

Mining is about money
Net Present Value (NPV)

Financial return over time is discounted

The faster the processing the better

High grading is considered good business

Low grade material is dumped on the waste heap

Leaving low grade ore behind sterilised is considered good as

it raises NPV
Deposits are not fully exploited based on their metal
content. They are often reprocessed at cost.

40% Decrease in Multifactor Productivity

1800s North American Continent

Large nuggets found in river beds

Smaller nuggets found in streams

Yes thats a nugget of pure copper!

Finally started to dig Cu out of the ground 1850s

Grade 15-20%

Non-renewable natural resource use

Humans like most other biological organisms use the highest quality, richest and easiest to obtain
resources first.
(Chris Martenson 2008)

Technology extraction

The big squeeze and technology solutions

Copper production
(million tonnes per annum)
30

25

Run of mine grade

(Cu %)

Direct ore
Reverberatory
furnace

4.5%

Cu production
Run of Mine grade

Flotation

4.0%
3.5%

20

3.0%

2.5%
15

Central Africa
Copper Belt peak

Bulk open pit

mining

10

Flash furnace

Acidic leach, solvent

extraction,
electrowinning

2.0%
1.5%
Bacterial leaching

1.0%

In pit crushing

0.5%
0

1900

0.0%

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

2020

2030

Sourc e: US Geological Survey (1900-83), Brook Hunt (1984 onwards).

The next technological paradigm change is needed now

(Not kidding!)

Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous

Slide 25

Well, GOLLY! We arent growing new deposits are we?

Driven by increasing demand

Economies of Scale Has Carried the Industry

Global demand for mining resources can

be tracked with steel consumption

Steel consumption is a good proxy for industrialisation

Controlled by economic crashes and geopolitical event

China is dominating the rest of the planet

China now dominates manufacturing and resource consum

Ore has been progressively getting harder

Comminution Impact Breakage A*b
Softer

75.0
73.0

71.5

Average A*b

71.0
69.0
67.0
65.0
62.3

63.0

61.6

61.0

59.0

Harder

57.0
55.0

1980's

1990's

2000's

~3000 Drop Weight Tests

What does this
mean?

More power draw is required

to break the rock

Target Grind Size is Decreasing

Ore grain size becoming more disseminated

1 mm

Target ore P80 = 150mm

10 mm

Target ore P80 = 4mm

General form of the Energy-Size relationship

Energy, kWh/t

Hukki 1962

A decrease in
metal grain size

A decrease in =
plant final grind
size P80

An exponential
increase in power draw

Deposit Discovery Rates Falling

The numbers of new deposits discovered is falling sharply each year
65% of new ventures 2009/2010 were expansion projects
Data still being collected
There is no need to concern yourself about decreasing
Cu grade and mining sustainability. The entire Andes
Mountain range in South America is one gigantic copper
deposit, with some areas more concentrated than others.
Yes costs of mining are going up, but that can be merely
passed onto the consumer through rising metal price.
The world always has and always will need copper. As
grade gets lower, we will just mine more tonnes. Mining
will never end. The economics will be forced to keep up.

This kind of thinking needs to evolve. The question is, into what?

Economic goal posts are shifting for future

deposits
Huge low grade deposits

Penalty minerals more prominently present in deposit

that prevent efficient processing
Ever decreasing grind sizes (close size 10-20mm)

Operating on an economy of scale never been seen

before (4MT blasted rock a day, 40% of which is ore!)
To stay economically viable, economics of scale have to
be applied. Operations will double and triple in size.

All of this based on the assumption that there is no energy or water shortage

Copper Demand Outlook

17Mt
World
Cu grade
1.6%

3400Mt of Rock
World Cu grade 0.5%
With current estimations the demand for
copper will increase to ~100Mt by 2100

With a continuing grade of 0.5% this

will require 20000Mt of Rock
With a decrease of grade to 0.2%
this then requires 50000Mt of Rock

Is this sustainable?
Eventually the cost of dealing with the wastes will exceed the value of the metal

Apply economies of scale

Already the next generation is 2 and 3 times the size of

existing operation

Deep Crust Mining

Consider deposits more

than 3-5km deep underground

Mine Mars/The Moon

The logistics and technology required for this is considerable

Mine Asteroids in Space

The logistics and

technology required for
this is considerable

Mine Under the Sea

The logistics and

technology required for
this is considerable

Source: Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) 2008

Energy consumption in mining increased 450% in the last 40 years

Peak Coal

Year 2020

Zittel, W. et al, Fossil and Nuclear Fuels the supply outlook Energy Watch Group March 2013

This should frighten the hell out of any thinking politician

Peak Oil

Net Hubbert Curve

EROEI Ratio for
Oil extraction

The NET peakoil curve (or "Net Hubbert

Curve") is what really counts ... and
given that two-thirds of all global crude
oil supplies is now HEAVY SOUR (and
thus much more energy intensive to
refine), and only 1/3 is LIGHT SWEET
crude i.e., given that most of the lowhanging fruit has already been extracted.

Oil supply conventional and unconventional

Year 2012

Source: The Oil Drum

Tar and oil sands have pushed back the peak of total oil
supply back 6-7 years

Peak Conventional Oil Production - 2006

World Crude Oil & Lease Condensate Production,

Including Canada Oil Sands

GFC
2008
Oil spot price vs. global production
-transition point in behaviour

International Energy Agency

Price $50 USD/barrel

Price $147 USD/barrel

Source: EIA, en.wikipedia.org/wiki/Oil_Megaprojects, Tony

Erikson ace theoildrum.com

http://makewealthhistory.org/2010/11/11/iea-peak-oil-happened-in-2006/

GFC

Oil Demand & supply & the GFC

Oil is the ability to do work

GFC

There are resource depletion limits

which heavily influence other processes
in negative feed back loops

Oil Production Static

Deep Water Drilling for Oil

More and more effort expended to extract oil of

poorer quality

Oil producing countries past their peak

Source: Ludwig-Bolkow Systemtechnik GmbH 2007 HIS 2006; PEMEX, petrobas ; NPD, DTI,
ENS(Dk), NEB, RRC, US-EIA, January 2007 Forecast: LBST estimate, 25 January 2007

Has Saudi Arabia Peaked?

Production stable

Number of rigs
going up

Energy Density of Oil

Put 1 litre of petrol in your car
Drive it till it runs out
Push car back to start point

At $15/hour
1 litre of petrol = $1981.20
1 litre of Petrol = 132 hours of hard labour

EROEI
(The song and dance needed to get the energy)

Conventional Oil
Tar Sands Oil
Shale Oil
Coal
Conventional LNG gas
Shale Gas
Hydro Power
Solar Power
Wind Power
Conventional Nuclear

12-18:1
3:1
Some Perspective
5:1
European medieval
society EROEI was
50-80:1
Approx 1.5:1
10:1
6.5:1
Biogas
1.3:1
20-40:1
Bio-ethanol 1.3:1
2-8:1
18:1
5:1 including the energy cost of
mining U (10:1 as quoted)

Quantity of Energy at Application

Current oil demand is 87.4 Mb/day or 31.9Gb a year
This translates to a little under 62 GW of energy

The average coal power station outputs 650MW

The average gas power station outputs 550 MW
The average Nuclear power station outputs 850MW
The gigantic Three Gorges Dam hydro project in China outputs
18.2 GW

The new solar power stations being commissioned output

350MW
An offshore wind turbine on average outputs 3.6MW

So I year current demand for oil, could be

replaced with:
191 coal fired power stations each year for 50 years
248 gas power stations each year for 50 years
354 industrial scale solar power stations each year for 50
years

146 nuclear power plants each year for 50 years

7 Three Gorges Dams projects each year for 50 years

34 400 off shore wind turbines each year for 50 years

Deep Water Horizon

But peak oil has no influence on mining

and is not our problem
(right?)

Ore is shifted with diesel fuel (oil)

1 truck = 3400 donkey loads
255 tonne load capacity

Bingham: Would we cart

5000tph of rock for
10tph of copper (0.2%
grade) without oil? Or
run 66 000 donkey loads
an hour..

200kg (?) load capacity

Not without its

logistical problems

Escondida: 1/3 of total

energy consumed is in
haulage of ore from pit to
plant

There comes a point when

something has to give.

Cost of mining correlates with the price of oil

GFC

GFC

Price of Potash

GFC

Price of Iron Ore

We are a petroleum based economy

at the industrialisation scale

Case Study: Coal Seam Gas

How will government and corporate culture behave while

managing a needed resource in an era of scarcity?

Coal Seam Gas

CSG projects in Australia have been rushed through the
system and all of them were accepted
If due process was properly followed, then the majority of
CSG projects would have been rejected

Private companies and government have colluded together at

the expense of the people on the ground
Extensive legal and political resources have been applied to
ensure the continued development of CSG
Concerns of the people on the ground are the loss of drinking
water and environmental pollution in the region where they
live and where they earn their livelihood
The charge is that the State Governments (desperate for revenue) have sold
out the public in exchange for a mining royalties revenue stream

Peak Gas
Year 2018

Zittel, W. et al, Fossil and Nuclear Fuels the supply outlook Energy Watch Group March 2013

CSG and shale gas has pushed this date back from approx. 2011

Supply and demand of Uranium

There is probably enough U for existing nuclear power stations

Future projection of Uranium production

2013

Nuclear power would have to increase 12-13 times capacity at peak

potential to make up for total energy supply to replace fossil fuels

Existing nuclear infrastructure needs replacing

Someone has to pay for these new reactor sites

Storage of spent fuel rods

Spent fuel rods are
very radioactive and
generate a lot of heat
Need to be stored in cooled
water for 10-20 years
before dry storage

This is the Achilles Heel of

nuclear technology as a solution
to our energy supply problem

Commercial spent nuclear fuel storage sites

Considerable power
requirements are needed to
ensure safe storage 10-20
years after use
When all energy has peaked and is declining, these sites will require
considerable power supply to prevent serious radiation pollution

Nuclear plants in areas of seismic risk

Most industrial structures were authorised based on risk probability

matrices modelled on the previous 200 years

Nuclear plants in flood risk zones

2011

Cooling generators for operating reactors & spent fuel rods cant operate under water

11 nuclear plants on the banks of Mississippi and Missouri rivers

Fukushima Daiichi Nuclear Power Plant- case study

Japanese coast near Thoku hit by a 9.0

Magnitude underwater earthquake

The earthquake triggered powerful

tsunami waves that reached heights of up
to 40.5 metres

Tsunami caused nuclear accidents, the

Level 7 meltdowns at three reactors

This series of meltdowns happened due to a failure of coolant

systems. Diesel run generators destroyed by tsunami/earthquake

What was the official response to this accident?

Colour spectrum of burning

plutonium
Hydrogen emission spectrum lines in the visible range
Temperature ignition in air, is 500 C (773 K)

A compelling case can be made that current human civilisation is not

mature enough to use nuclear technology

World supply of fossil fuels and uranium

Peak energy approx. 2017

Zittel, W. et al, Fossil and Nuclear Fuels the supply outlook Energy Watch Group March 2013

What happens to democracy and due process when there is not

enough to resources to go around?

We Use a lot of Energy

The demand end of the equation needs surgery

Access to potable water

Global water use is
divided as follow:
70% Agriculture
22% Industry
8% Domestic

Global Potable Water Consumption Over Time

Water draw (km 3 /year)

4500

World water use by economic sector (km3/year)

(Shiklomanov 2000)

4000

Agriculture use

3500

Municipal use

3000

Industrial use

2500

Reservoirs

2000

Total (rounded)

1500
1000
500
0
1930

1940

1950

1960

1970

1980

1990

1995

2000

The amount of fresh water

supply provided by the
hydrological cycle does not
increase. Water everywhere
on the planet is an integral
part of the hydrologic cycle.

Many major rivers; Colorado, Ganges, Indus, Rio

Grande and Yellow are so over-tapped that they
now run dry for part of the year.

Freshwater wetland has shrunk by about half worldwide.

Access to Potable Water

In the West, we take water for granted. Most people dont actually
think about the supply of water. Water is easy to ignore provided
you can still turn on a tap and water comes out!
We still have the same amount of water in our ecosystem but the
supply of freshwater faces a three-pronged attack from population
growth, climate change and industrialisation. As it currently stands,
theres not enough water to go around.

Dynamic Interaction and Exacerbation

Power & water shortages
Decreasing grade requires more tonnes of rock extracted for the
same resulting amount of target metal.
More energy is needed (diesel and electrical power draw) per unit of
extracted metal
More potable water is needed per unit of extracted metal

Increasing ore hardness requires more power draw to crush and

grind the ore

Dynamic Interaction and Exacerbation

Decreasing grind size due to finer mineral grains requires more
power draw to crush and grind the ore
More water is needed per unit of extracted metal
Water recycling is more difficult
More disseminated finer grained rocks are usually harder to crush and
grind

To remain economically viable operation scale has to

double/triple in size
Metal demand is growing fast
Once our civilization understands what is happening and why,
everything will need to be re-engineered.
Which will require vast amounts of metal! - QUICKLY

PR image of mining & sustainability

Every year, 0.30.8% of global arable land (24 billion tons of fertile soil)
disappear/year and is rendered unsuitable for agricultural production
52% of the land used for agriculture is moderately or severely affected by
soil degradation
Arable land loss estimated at 30 to 35 times the historical rate
Chemical fertilisers and herbicides are becoming less effective
Organic matter humus content has fallen from approx. 5% to less than 1%
Big Ag uses more than 3 times the volume of potable water than mining
Mining could be considered more sustainable than industrial
agriculture as there are more assets left that will last longer!!!
den Biggelaar, C., Lal R., Wiebe, K., Breneman V., Reich P., 2004b. The Global Impact of Soil Erosion on
Productivity II: Effects on Crop Yields and Production over Time. Adv. Agron 81, 4995

What we must choose to do to, if our

industrial sector is to survive
Leadership & Vision

Mounting Drift
Stress

Early
Crisis

Trapped Transition

Inelastic oil
supply 2005

Early
Crisis

Drift/
Decline

Understand
true implications

Decay/
Collapse

Existential
Crisis

Drift/
Decline

Trapped Transition

Mounting Drift
Stress

We are here

Fundamental Reform

Room to Manoeuvre

Existential
Crisis

Write-off & Reset

Decay/Collapse

Peak Total Energy

2017

Time Frame to Implement

Determine best
replacement system
Approx 20 years

This pattern applies to all developing systems that require

extensive infrastructure built

Mining and heavy industry

Energy
Manufacturing capacity over and above standard demand
Large quantities of natural resources required

We are out of time. We should have seriously discussed what to do

in the mid 1980s and started applying the outcome in the late 1990s

When will this crash economically?

The party is over when demand for something vital outstrips
supply
Some vital service ceases to function reliably or at all
The average people en-masse understands that the world
they live in is no longer possible
And there is no easy solution at hand that allows their life to
continue in the fashion they have become accustomed to
At which point, its on like Donkey Kong!!!

The Pickle and the Rub

This is the only thing that can change

Must expand exponentially

Cant expand

Deteriorating
http://www.chrismartenson.com/crashcourse

Chris
Martenson

The Industrial Big Picture

Expansion of production needed to stay viable
Peak
Mining

Decreasing Decreasing Increasing

Peak Fossil
+ Grind size + Depth +
Grade
Fuel

Peak
Finance =

Peak
Manufacturing

Expansion of money needed to service debt

Sovereign Debt
FIAT
+ Credit + Structural
+
Default
Currency
Inflation
Freeze
Devaluation

The End of the

Industrial Revolution

Peak
Industrialisation

The End of Materialism

The writing on the wall

Everything we need/want to operate is drawn from nonrenewable natural resources in a finite system

Most of those natural resources are depleting or will soon

Demand for everything we need/want is expanding fast
When these trends meet, there will come a point where how
we do things will fundamentally change
None of these issues can be seen in isolation.

Real growth is dependant on energy and

real resources
Price of oil to make oil exploration economic
Approx. - $USD 100/barrel

The End of Growth

(R. Heinberg 2012)

Price of oil above which economic growth is very difficult

Approx. - $USD 100/barrel

But corporate culture must grow to survive

Current business culture must expand and show a profit
If a business doesnt show a profit of 5-10%, financial
investment is withdrawn and sent else where
Most businesses are not financially self sufficient and depend
on investment to operate
The need for growth is a key KPI for survival
Most businesses are armpit deep in debt
Its getting increasingly difficult to grow without going
further into debt

The fate of the current system of industrial

management

This is not the end of industrialization but the end of the

current way of doing this.
A new system will be developed through necessity.

All of our current efforts are pushing in the

wrong direction and are ultimately irrelevant!!!!

The push for growth on all fronts must come crashing to a stop in
a finite system eventually

The ethics of what gets used and for whom

becomes relevant
Person A and Person B want the same pallet of
aluminum ingots
Person A wants to build a roof over his swimming
pool at his holiday home
has lots of $$$

But money has become really unstable

Person B wants to build a series of bore water

pumps in a region with drinking water shortages
represents a nation state government where resource is
situated

The have-nots vastly outnumber the haves

grab your pitch forks and burning torches,

its time for a visit to the castle

Possible Solutions Fall into 3 Groups

Mine in a much more efficient manner
Invest more sophisticated methods of efficiency not
merely mining

Change the business model behind mining

The conventional corporate model wont work in a
contracting system

Mine our garbage tips and recycled rubbish as it

comes in
Where did we put all the good stuff?

Where did we put all the good stuff?

Over the last 150 years, we have dug up the highest grade deposits,
manufactured them into goods, and then put those goods into our
rubbish dumps

Where did we put all the good stuff?

Over the last 150 years, we have dug up the highest grade deposits,
manufactured them into goods, and then put those goods into our
rubbish dumps

Where did we put all the good stuff?

Over the last 150 years, we have dug up the highest grade deposits,
manufactured them into goods, and then put those goods into our
rubbish dumps

Where did we put all the good stuff?

All the good stuff is still here, in concentrated piles, all around
our major cities

From 1000kg of Printed Circuit Boards

Typical Copper/Gold Deposit

Au ~ 1g per tonne of ore
Cu ~ 10kg per tonne of ore
60% strip ratio
What is a typical grade of gold per tonne in a
modern mine site????

Saleable material recovered from 1000kg

assorted E-waste (electrical, PC, TV, Mobile Phone, etc.)
1%
3%
3%

Mild Steel

8%

Stainless Steel
23%

Glass
Plastics
8%

27%

Copper
Aluminium

27%

Other materials
Hazardous Materials

Note: E-Waste also contains precious metals like

gold, silver, palladium, platinum, etc.

There is a strong precedent for this

Accepted off the shelf technology

Shredding down 5mm F80 feed

(no grinding & its dry feed)

Process Separation Methods

Magnetic
Electrostatic
Gravity

Sorting of the feed material is the key to

success

Sorting technology is well established in industrial recycling

Pyrometallurgy is more complex

Smelting efficiently to feed characteristics
Separation of electroplated fragments
Alloys

Our Industrial Society is a Network System

The same model
could be applied to
food, health, etc.

Mining
(Raw materials)

Heavy Industry

Retail

Energy

(metal casting)

Finance

A small number of
companies
facilitate this
network

Distribution
(JIT)

Manufacture

What Can Network Theory Teach Us

Connections are paths
of communication of
some form
Nodes are where many
paths connect
For example we all need
petrol to function in the
modern world

If the network is damaged in macro structure terms, it shrinks

in size but functions normally

What Can Network Theory Teach Us

If a node is knocked out,
anything attached to that node
unravels
If disruption of that node is long
enough to prevent that vital part
of the network to function
Then the whole network is put
at risk

Example: Industrial Procurement Currency Trade Links

Disrupt USA & EU
as places to do
business with

Disrupt $USD as a
world reserve
currency

What Can Network Theory Teach Us

If the network serves a
necessary purpose, a new
network will manifest in
place of the old network
The new network will
operate to different
control parameters

Necessity is the mother of invention

Energy is a controlling parameter

The complexity of a network is
supported by and defined by
the energy inputs that support
it.
Our current complex system is
supported by cheap abundant
high density energy (oil)
1 cubic mile = 316.8 days with
world oil demand of
82.77 Mbbl/day

What Can Network Theory Teach Us

Complex system
networks are not
made insitu

They are grown over

time from simple
system networks

What Does All This Mean For The Energy Grid?

Peak oil means the node of petroleum energy supply is about to
be disrupted
All links in the network system supported by petroleum will be
logistically traumatized

As it stands, any replacement energy is less dense per unit volume

and requires extensive infrastructure to be built
This means the replacement network system will need to be less
complex than the current one, once fully operational
It will also take time for the network to reach full complexity

The same thing will happen in a few years for gas

and in 10 years time for coal

What allows materialism to happen?

If cheap abundant energy is the
engine, then mining is the
gearbox
Environmental carrying capacity
is the brakes
Environmental degradation and population overshoot
are the huge brick walls we are driving at really fast
Social institutions and social contracts are developed
around what is possible

Why was this allowed to happen?

our current developed culture

Because they could

We were convinced it was OK

And we never understood the true consequences

Expecting corporate culture to act for the

greater good is inappropriate
If it incurs a profit loss

Or threatens their business

model
Once survival becomes an
issue

Population Overshoot

Financial
Systemic
Meltdown

Energy supply
disrupted then
unavailable

Natural raw materials

unavailable for
industrialisation
Systemic environmental
disruption

Reset all FIAT currencies asset based

Restructure all debt
Need to grow into new system

Cannot sustain growth

Cannot grow economy system
Change to alternative energy system
Rebuild all infrastructure to meet
requirements of new energy system

Cannot supply raw materials for

construction or manufacture at needed
rate or volume, if at all
Need to reassess what is really needed
Mine our rubbish dumps

Puts pressure on all other sectors except finance

Most people of which have few relevant skills
outside existing paradigm
Wilful ignorance & aggressive apathy

Cannot run any existing system for

very long
Resilience and redundancy required
on all fronts
Practical carrying capacity vastly
reduced

Population Overshoot

Financial
Systemic
Meltdown

Are these issues really

unknown to the senior
global decision makers?

Energy supply
disrupted then
unavailable

Natural raw materials

unavailable for
industrialisation
Systemic environmental
disruption

What happens to due

process and democracy
when there is not enough
to support everyone?

Personal epiphany after a 15 year

professional career
You cant make a system change that doesnt want to,
that also regulates its own authority
and has its own political power source
You can be at the right place at the right time,
when that system breaks
Conventional thinking has no hope for the future.
Unconventional thinking and asymmetrical strategy
is the way forward
Timing is the key to everything

Paradigm changing information is right in

front of us if we choose to see it

Everyone should try thinking for themselves at least once

Now would be a good time

These presentations are on YouTube

Peak mining & implications for natural resource management Simon Michaux
Type in peak mining Simon Michaux

Developing a Sustainable Community - Simon Michaux

Type in Developing a Sustainable Community

Questions???

My wife and I in 40 years time

(its up to you to keep up)