Sustainable development is a well-documented challenge for the planet in the years leading up to 2050, and beyond…

It is estimated that between now and 2050, the world’s population will grow from just over 7 billion to 9.6 billion, along with further growth in consumption per capita. The bulk of that growth will take place in Africa and Asia, where the demand for an improved quality of life will drive the need to access goods and services. Africa, for example, now has the fastest-growing middle class in the world. Some 313 million people, 34% of Africa’s population, spend $2-20 a day, a 100% rise in less than 20 years, according to the African Development Bank.

“How we accommodate those demands and needs within planetary boundaries is one of the great challenges facing decision-makers in all regions and industrial sectors.” – World Economic Forum

Success in sustainability means looking beyond the perspectives of material exhaustion, rising costs or social injustice. The integrated view also pays special attention to the role that strategy, technology, policies, preferences and various stakeholders will play in the future availability of primary and secondary resources. Today, we’re focusing on where and how the circular economy is forcing change in the metals and mining industry. Why, you ask? Because… Mining and metals are essential to global economic and social development, and are connected to almost all industry value chains.

The World Needs A Circular Economy

• The key tenets of the circular economy are utilizing resources efficiently, limiting final waste disposal, and reducing losses of valuable material.
• Circular economy is, in essence, an ecological economy.
• The circular economy is a closed feedback process of resource-product-renewable resource, and finally achieves optimal production, optimal consumption, minimum waste.
• Most scholars agreed that the principle that circular economy should follow is “Reduce, Reuse, Recycle”, or “3R” for short.
  • Reduce belongs to the input method, aiming at reducing the flow of material and energy into the production and consumption process.
  • Reuse belongs to the procedure method with the purpose of extending the time-intensiveness of product and service.
  • Recycle belongs to the output method, requiring materials to return to renewable resources after making use of it.
• The concept of the circular economy has been gaining traction both in Europe and China.
• The circular economy decouples growth from natural resource consumption.
• The circular economy (along with other related sustainability concepts) provides a system perspective of waste elimination through the rethinking and redesign of products and processes along the value chain and between supplier networks.
• Accenture research, culminating in a new book by Peter Lacy and Jakob Rutqvist (Waste to Wealth), demonstrates that a circular economy could deliver $4.5 trillion in revenue to a range of companies by 2030.
• One approach to accelerate the uptake of the circular economy is by introducing new innovative business models that deeply embed its principles into the way that companies generate and capture economic value.
• Circular business models are disruptive, innovative business models aiming to drive the sustainability of the whole business network (system) through circularity.
• In the words of Unilever CEO Paul Polman, “[a circular] economy can deliver growth. Innovative product designers and business leaders are already venturing into this space.”
• With a potential $1tn opportunity in transitioning to the circular economy, companies are recognizing that preservation makes as much economic sense as it does environmental.

The Mining Industry: So Much Waste!

• Waste is a critical issue along the whole metals value chain, from mining waste to eventual end-of-life products such as scrap steel from construction and demolition waste or the growing problem of electronic waste.
• Being one of the world’s largest waste generators, the mining sector can adopt similar logic to that of the circular economy to improve its sustainability performance.
• The baseline shows that mining and metals are among the world’s great generators of waste, accounting for around 10 billion tonnes a year, around 40-55% of the global total.
• Tailings, the waste from extractive processes excluding overburden, can hold large potential value: Current estimates suggest that with the right technology for treating bauxite waste, aluminium production could be increased by 20%, a potentially huge capture of value from tailings.
• The mining value chain is characterized as a linear process that generates large volumes of waste.
  • Each waste stream along the metal value chain has its own set of environmental issues.
  • In many cases, the most challenging (and massive) waste stream within the metals supply chain is upstream (ie mining waste).
  • Due to significantly lower grades for most extracted minerals and metals, tailings can account for up to 99% of crushed and ground ores.
  • In addition, there is also a ‘hidden’ unaccounted flow of waste rock and overburden.
• Different strategies for managing mining waste can be characterized in terms of their ability to decrease the risks and consequences of environmental legacy and in generating economic value out of waste.
• An integrated, multidisciplinary approach to mining and metal waste is needed: Without such an approach, it will not be possible to account for the different social, economic and environmental dimensions of sustainability, engage with the network of actors within the metal supply chain and look beyond short-term economic benefits and risk-averse behavior to target the supply of restorative and regenerative resources in a circular economy model.
• Figures from 2011 show the world collectively extracted over 16tn metric tons of mineral raw materials from the Earth’s crust.
  • We currently use 1.5 planets’ worth of resources every year including forests, land, metals and minerals, while generating mountains of waste.
  • On current form, it looks like we may need more than two planets’ worth of materials by 2050.
• In a world with increasingly constrained resources and many environmental challenges, the balance of supply and demand will shift for key commodities. This will have fundamental impacts across the mining and metals value chain.

The Circular Economy Enters The Mining Industry:

• Although it still seems the majority of global debate is fixated on energy, questions of resource sustainability are rapidly gaining rightful prominence.
• The pace of regulation is increasing, for example with the introduction of the Circular Economy Package in the EU, posing many threats and opportunities for miners.
• Circular economy is challenging the mining industry to improve sustainability by utilizing and generating value from mining waste, or making it available as a feedstock from which other industries can harness value.
• Mining faces adversity when it is examined under the lens of sustainability or sustainable development.
• The nature of mining is naturally connected with the destruction of mineral-rich areas, as huge amounts of rocks and dirt are processed to extract the metals and minerals that are demanded by the modern world.
• The true sustainability of mineral resources is a complex picture that involves exploration, technology, economics, social and environmental issues, and advancing scientific knowledge.
• Sustainability is a great challenge for mining to be guided in the extraction and processing of minerals, and in the management of its externalities, to protect people and the environment as key resources in sustainable development.
• Metals and mining companies need to adopt a fresh perspective on what it means to create value, or more precisely, shared value.
• “We are seeing material substitution, with companies using carbon fiber to replace steel or fiber optic in lieu of copper cables.”
• While the mining industry has only made a limited contribution to the circular economy so far, current market conditions, which are prompting calls for greater innovation, make the timing right for the industry to boost its contribution by utilizing and generating value from mining waste.
• The opportunity to create value and reduce environmental liability from waste streams along the value chain is potentially one way that the mining and metals industry could make substantial contributions to the circular economy and, in doing so, improve sustainable development.
• Five business models that companies should consider across their value chain: circular supply chain; recovery and recycling; product life extension; sharing platforms; and product as a service. These will influence how miners source materials and energy, optimize their operational footprint, and make them consider where to play in the value chain and how to partner with customers.
• For miners, circular economy winners will be equally focused on managing resources in the market and digging to extract additional resources where needed. The trick is to understand how the supply/demand trends play out for each commodity, to identify the relevant risks and opportunities, and to position for future growth before the circular economy becomes a reality.
• There are various opportunities to implement circular flows at the mine site level, which would result in enhancing mineral extraction, reducing mineral losses to mining waste and mitigating some of the environmental impacts related to mine waste disposal.
• Research work at the Sustainable Minerals Institute at The University of Queensland has produced a framework that allows a mine site’s performance to be assessed with regards to the circular flow of minerals.

Mining and the 3R principle:

• Reduce: During the process of exploitation, processing and utilization of the mineral resources, reduce mainly is shown as:
  • Realizing the efficient exploitation of resources by mechanization, automation and exploit optimization.
  • Reducing mining dilution ratio and ore loss ratio and enhancing the recovery rate of mineral-processing and smelting to improve the total recovery of resources by studying mining processing and melting technology of complex difficult mining and refractory ore.
  • Raising the comprehensive benefit of resource development by reducing emissions of various pollutants such as tailing, gangue and mine wastewater.
• Reuse: A product’s, or a component’s, life cycle can be prolonged by reuse.
  • For this to be possible products need to be redesigned by manufacturers so that components can be extracted for reuse easily and at reasonable cost.
  • Modular construction is another possibility.
  • The prerequisites for this to work well are standardization of component design and specifications, close collaboration and cooperation along the value chain as well as commercial benefits for metals companies.
  • Reuse can also be ensured through re-manufacturing and refurbishing: the disassembly, cleaning, repair and reassembly of a product – restoring it to like-new condition.
• Recycle:
  • Recycle requires reducing garbage creation as much as possible by processing the mineral resources products that have completed its functions so that it becomes available resources again and can enter the market or productive process secondary.
  • Downstream recycling (old scrap) reclaims metal from products which have reached their end of life or end of use. There are four prerequisites for downstream recycling to be sustainable and efficient:
    • Adequate collection and pre-processing infrastructures.
    • Enough old scrap available for the process (volumes depend on the lifespan of metal currently in use).
    • Competitive production costs, since recycling competes with primary metal production.
    • Possibility of recycling (including upcycling) or reuse in different applications (recycled materials cannot always be reused in high quality applications due to alloying or impurities).
  • Recycling requires three types of infrastructure:
    • The collection and transportation of recyclable material.
    • Separating and sorting facilities to isolate components.
    • Reprocessing facilities, such as smelters and refining, to make new metals from scrap.
  • The geographic mismatch between places where recyclable material is available and those where it is most needed is a gap on the way to a 2050 sustainable world: Most of the recyclable metal waste is created in industrialized and high income countries, while the countries which will need sufficient scrap to make the transition from mining to a circular use of resources are mostly low-income and have immature recycling sectors.

The Mining Industry Needs To Address Five Key Areas:

• The potential reduction in environmental liability and legacy issues from mining waste re-use.
• The resulting feasible community benefits due to lower environmental risks.
• The opportunity for local enterprise development from mining waste utilization.
• Smarter reverse logistics to provide cost-effective transportation of the higher economic value chain options.
• More innovative business models to help create value from mining waste coupled with updated regulation that promotes greater resource utilization.

To make a transformational change to managing mining waste, all of these factors need proper analysis to determine the most feasible pathways that both consider economic, technical, environmental and social factors, and contribute to the circular economy.

Final Thoughts:

Governments, especially those in developing countries which are heavily reliant on mineral extraction, need to ask whether they understand the implications of more recycling for their economies, and if they have a long-term plan for shifting value creation downstream; plans that exist in countries like Indonesia or Botswana. Governments also need to consider incentivizing growth in the recycling sector and to drive the shift to more beneficiation, while informal recycling must be kept at a minimum.

The drive towards more sustainable consumption will be a dominant theme in a more sustainable world. Resources will last longer while increased reuse and recycling drive a more circular economy. A strong move towards recycling and circularity is likely, but fundamental changes are required to support this transition, including appropriate infrastructure, regulation and legislation, and competitive cost economics.

“Irrespective of the range of possible scenarios, conclusions can be drawn for the industry: Mining will not disappear; primary extraction will continue but volumes are unlikely to grow in line with GDP growth. This means that pressure to realize scale effects and cost efficiency will remain in the foreseeable future. Demands for cost-effectiveness will exist in parallel with demand for environmentally and socially responsible actions, leading to new partnership and operating models.” – World Economic Forum

The evolution of the circular economy will be governed by many external factors within and beyond the mining and metals industry. Nonetheless, the industry has a key role to play in shaping future circularity.

Thanks for reading!