Tag Archives: Shefa Siegel

Can Mining Be Saved?

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TeslaGigafactory

The Tesla Gigafactory, currently under construction in Storey County, Nevada.

Andrew Critchlow, Commodities Editor at The Telegraph, speculates in a recent article that Elon Musk and Tesla might “save the mining industry” by ushering in a new age of renewable energy. Domestic battery power production at the Tesla Gigafactory (now scheduled to go into production in 2016) is bound to create such demand for lithium, nickel and copper, Critchlow thinks, that the mining industry will find a way out of its current (price) slump and into new growth, or possibly a new supercycle.

“Major mining companies are already ‘future proofing’ their businesses for climate change by focusing more investment into commodities that will be required by the renewable energy industry,” writes Critchlow; and the “smart commodity investor” will follow suit, with investments in “leading producers” such as — this is Critchlow’s list — Freeport-McMoRan, Lundin Mining and Fortune Minerals.

It’s a credible scenario, but it’s also terribly short-sighted. The big switch over to domestic solar power and battery storage Musk is hyping in the run up to the opening of the Gigafactory would no doubt give miners a short-term boost, but it will also take a lasting toll on the places where copper and nickel are mined, raise serious human rights concerns, and put even more pressure on the world’s freshwater resources.

After all, the copper and nickel used to make Tesla’s batteries are going to come from places like the Democratic Republic of Congo, where Lundin and Freeport-McMoRan operate a joint venture at Tenke Fungurume, and which has been at the center of the recent debate in the EU parliament over conflict minerals; Peru, where protests against Southern Copper Corporation’s Tia Maria project led the government to declare a state of emergency in the province of Islay just last Friday; or the nickel and copper mining operations around Lake Superior that I’ve been following here, where there are ongoing conflicts over free, prior and informed consent, serious concerns that sulfide mining will damage freshwater ecosystems and compromise one of the largest freshwater lakes in the world, fights over haul routes, and repeated complaints of lax regulatory oversight and political corruption.

Rice farmers clash with riot police in Cocachacra, Peru. The fight is over water. (AP Photo/Martin Mejia)

These are just a few examples that come readily to mind. It wouldn’t take much effort to name others (Oyu Tolgoi, Oak Flat, Bougainville) and to see that the same problems arise, to a greater or lesser degree, no matter where copper and nickel mining — sulfide mining — is done.

The mining industry and commodities investors have historically tended to minimize and marginalize the environmental and social costs of sulfide mining; so it’s really no surprise that Critchlow should argue that increased demand by battery producers is all it will take to “save” mining. Leave it to others, I guess, to save the world.

But the supply and demand model is reductive and misleading, even for those looking to make a fast buck. A recent Harvard study of company-community conflict in the extractive sector summarized by John Ruggie in Just Business suggests just how costly conflict can be. A mining operation with start-up capital expenditures in the $3-5 billion range will suffer losses of roughly $2 million for every day of delayed production; the original study goes even further, and fixes the number at roughly $20 million per week. Miners without authentic social license to operate lose money, full stop. So Critchlow’s is at best a flawed and myopic investment strategy that ignores significant risks. It also appears to shrug off legitimate human rights claims, and turn a blind eye to environmental degradation, and deadly violence of the kind we’re seeing in Peru right now. That’s irresponsible, if not downright reprehensible.

A Macquarie Research report cited by Critchlow claims that the switch away from fossil fuels to battery power in the home is all but inevitable. But if we make the switch to renewables and fail — once again — to address the ethics of mining, what exactly will we have saved?

A Reply to Dan Blondeau

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When I sat down to reply to a comment from Dan Blondeau of Eagle Mine on my Mining Renaissance post, I found that I’d written what is, essentially, a new post. So I’m running my reply here instead of in the comments thread.

Here is Dan’s comment:

Louis and others commenting here – is there any way you would support mining anywhere? I highly doubt it. Large, long-life deposits are few and far between now. Smaller projects such as Eagle, Polymet and so on are becoming the typical scale of mining. Instead of just bashing the industry and focusing on events that happened decades ago, perhaps you could take a more positive and collaborative approach to your concerns. Thank you

Here’s my reply:

I take it that by “events that happened decades ago,” you are referring to the story told in my film 1913 Massacre. That story from what you correctly characterize as a bygone era of mining first drew me to the Upper Peninsula, and it would be dishonest or disingenuous to say that it doesn’t still color my thinking. But since completing that project I’ve tried to stay focused on what’s happening in the area now.

At the same time, the unresolved past and the present are not so easily kept apart. For example, the conversation after our screening of 1913 Massacre at the DeVos Art Museum last October went almost directly and without any prompting to the new mining up around Big Bay and across the Peninsula. I believe the film resonates with people in the UP (and in other parts of the country) not just because the immigrant experience it documents is the quintessential American experience, but also because the basic questions it raises are still very much alive today.

That aside, I am not sure why you read me as “bashing the industry” here. My post focused on sloppy and hopelessly compromised journalism. I don’t think of mining as something I would “support” or not support.  It would never occur to me to put it that way, and I’m not for or against mining per se. In some of my posts, especially those on Shefa Siegel’s work, I try to acknowledge mining’s crucial role in what Orwell calls “the metabolism of civilization”; and I’m trying to understand how bigger changes in the commodities markets and the global economic picture are driving the new mining around Lake Superior. But I also think it’s important to appreciate the real risks and the potential cost of copper and nickel mining operations in the Lake Superior watershed, and to question whether it really will create lasting prosperity for the UP or the Lake Superior region. Those are (for me) the big issues the new mining raises, and I think they are issues that any honest conversation about mining (or the development that mining brings) needs to take into account.

As I tried to suggest in my post, Kocazek just ignores them, and I wondered why she didn’t try to take them on – especially since she writes for a publication dedicated to water issues. And not just any publication: Circle of Blue, which was founded by J. Carl Ganter (who served as vice-chairman of the World Economic Forum Global Agenda Council on Water Security) and which has ties to – it is a “non-profit affiliate” of – the prestigious Pacific Institute.

As for taking “a more positive and collaborative approach,” I am all for it, or at least I am all for genuine collaboration. I don’t really know what a “positive…approach” would entail in this case apart from boosterism. As I say, I don’t consider myself a mining booster or a mining basher, but an observer, still (and no doubt always) an outsider, despite my many trips to the UP, exploring a place and trying my best to document what’s happening there. I’m open to having my views challenged and being shown where I am wrong or where there’s a better way to talk about or do things. (And for that reason I appreciate you taking the time to comment here.) I don’t think there can be any collaboration unless each party is willing and able to listen and – this is important – ready to yield to the other. In other words, listening goes beyond making concessions to the other in conversation: it means doing things differently in response to the other’s demands. (This is a theme I’ve been exploring in my posts on The Power of Asking, and one that I come up against over and over again when I write about mining issues.)

Am I often critical of what mining companies are doing in the UP and around Lake Superior? Sure, and I am troubled, as well, by the almost hubristic level of confidence the mining industry places in technology and engineering, even in the face of disasters like the Bingham Canyon collapse; its worrisome record on environmental and human rights issues nearly everywhere in the world mining is done; and the power and distorting influence it exerts on politicians and public debate – in the UP and elsewhere.

I still think there’s plenty of opportunity for collaboration and dialogue. If I did not, I would just call it quits; but giving up on dialogue is tantamount to giving up on people. In the area of human rights, for instance, I believe there’s still opportunity for collaboration around the Ruggie principles (despite the doubts I’ve expressed about them) and – in the Lake Superior region – around the United Nations Declaration on Indigenous Rights. Both frameworks (as well as the work done by the Lake Superior Binational Forum on Responsible Mining in the Lake Superior Basin) are decent places to start enumerating in a serious way the responsibilities and obligations that mining companies have in a region where human rights concerns and freshwater issues are intertwined.

In fact, I think genuine and ongoing collaboration on these efforts is essential, because I don’t think the mining industry can do it alone, or is the appropriate party to set the agenda here.

Reading Orwell On Mining and the Metabolism of Civilization

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I just finished George Orwell’s Road to Wigan Pier. I wanted to track down the passage about mining and the “metabolism” of civilization that Shefa Siegel refers to in his essay on “The Missing Ethics of Mining” (which I quoted at length in a previous post). It comes early in the book, at the start of chapter two:

Our civilization, pace Chesterton, is founded on coal, more completely than one realizes until one stops to think about it. The machines that keep us alive, and the machines that make the machines, are all directly or indirectly dependent upon coal. In the metabolism of the Western world the coal miner is second in importance only to the man who ploughs the soil. He is a sort of grimy caryatid upon whose shoulders nearly everything that is not grimy is supported. For this reason the actual process by which coal is extracted is well worth watching, if you get the chance and are willing to take the trouble.

There is some uncertainty about the reference to Chesterton here. The editors of one anthology point to a debate about coal mining between Chesterton and George Bernard Shaw. Mark Bernstein and Scott Rosenberg trace the reference to Chesterton’s assertion that civilization “is founded upon abstractions”. I like this better. Pace Chesterton, Orwell anchors civilization in the dark rock world below — the “necessary counterpart of our world above” — and in the hard work of the miners he witnesses: the stooping, the “travelling,” the dust, the deafening noise and the grimy air, the excruciating shovel work at the coal face, which the miners or “fillers” perform kneeling, and in hot, stuffy, dirty cramped spaces, stripped to the waist, sometimes down to their drawers, for 7 hours at a stretch.

Of course what Orwell wrote of coal in the 1930s could now easily be said of oil and gas, and, as Siegel would have it, many minerals as well — minerals we do not see or even give a moment’s thought, but which, like oil and gas, are extracted from the earth (and now, with rare earth metals, from the sea-bottom) at great hazard and great cost. The metabolism of the world (now the whole world, not just the West) has changed, as well as the materials that we now require to keep things up and running. That’s largely because things have changed.

That ordinary expression deserves some careful consideration. It’s safe to say that, although things have changed, we are, for the most part, blithely unaware of the hard, dirty world on which the things that make up our world depend. Or at least we prefer to act as if we are.

We still tend to believe, or I should say we would like to believe that that which does not appear grimy somehow comes into the world clean, the outcome of a great idea, the product of abstraction or an innovative approach, a flash of insight drawn on a cocktail napkin. That belief in the power of great ideas to make up the things of this world makes us especially ill equipped and nowhere near ready to deal with the increasing scarcity of the resources on which the shiny, fast world of things depends.

Postscript:

The Big Slide at Bingham Canyon

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Bingham Canyon slide

“This is something that we had anticipated,” said Rio Tinto-Kennecott spokesman Kyle Bennett, when asked about the huge landslide that shut down the Bingham Canyon Mine last week.

If we are to believe the Rio Tinto press release, it was nobody’s doing. The Canyon Mine simply “experienced a slide along a geotechnical fault line.” The mining company saw this trouble coming since February, we’re told, and once the movement “accelerated…pre-emptive measures were taken.”

Still, the enormity of the slide took Ted Himebaugh, Kennecott’s general manager of operation readiness, by surprise: he told the Deseret News that “he had seen nothing like it in his 36 years with the company.” A black swan event, then — a wonder. Who could have foreseen this?

It’s telling and a little disturbing that the statements the Rio Tinto issued after this disaster (and disaster is the right word here) make no mention of what was going on prior to the slide at Bingham Canyon, which is — it’s hard to believe this needs saying — a whole lot of mining and a whole lot of earth disturbing in close proximity to a geotechnical fault line. In fact, the Bingham Canyon operation is the world’s largest man-made excavation.

Rio Tinto has been very careful to sidestep any acknowledgement of its role, any connection of the mining operation with the slide, any accountability or responsibility for the slide: the Canyon experienced something; Rio Tinto watched. It’s as if some greater powers were at work in the Canyon — as if the earth in Bingham Canyon moved entirely on its own. The company of course moved everyone to safety, and now plans to get the mine up and running again, to “provide not only the jobs for the people but money to the state of Utah and economy.” The only thing that might hold things up is if they can’t resume operations safely: “we will not take a risk.”

I suppose that’s meant to be reassuring. It makes me shudder. What’s missing here is any deeper appreciation of just how risky these industrial mining operations always already are, even when things are running perfectly and according to plan. People concerned about the dangers of subsidence posed by the Eagle Mine operation on the Yellow Dog Watershed (another Rio Tinto /Kennecott project, which I’ve blogged about before — here and here, for instance) might want to have a good look at this Bingham Canyon slide and think about the risks they’re about to run. But it goes beyond — way beyond — the very serious risks of spawning streams collapsing, acid mine drainage, or other kinds of environmental degradation. Industrial mining operations put everything at risk: peace, agriculture, and social stability in many parts of the world, environmental sustainability everywhere mining is done.

That doesn’t mean mining shouldn’t be done at all. It means that when it is done, and done at this scale, people, communities, companies and investors need to understand fully how mining will affect them, what it will require of them, what it will involve, what it will bring and what it will leave behind. Company- and industry-sponsored community outreach and corporate responsibility efforts are insufficient; they are created to conceal the real risks and the true costs of mining.

“Mining is the material basis for life, making it difficult to exaggerate its significance. George Orwell called it part of the ‘metabolism’ of civilization,” Shefa Siegel writes; and yet “the ethics of mining are nowhere to be found.” His essay is a must-read, especially this week, in the wake of Bingham Canyon and the run up to the Rio Tinto Annual General Meeting.

One outcome of mining’s omission from environmental and development ethics is that as other disciplines and sectors gradually integrated concerns about sustainability into their knowledge communities, mining engineering, mineral economics and processing, geochemistry, and other sub-disciplines associated with mining have remained static. As a result, there is less experience with the study and practice of sustainable mining than, say, forestry, agronomy, or soil ecology. There is no mining equivalent, for example, of the Yale School of Forestry & Environmental Studies. And while there is much anxiety about the failure to enact the ethics of climate change or environmental health, mining does not even have an ethical roadmap that we do not follow. With climate change there is broad agreement that exceeding a 2 degree Celsius rise in temperature breaks the planet. Pollution experts know to a microgram the tolerable level of exposure to mercury, lead, and arsenic. But what is expected of a mine?

Only in the last decade has vocal public discourse about global resource policy emerged. The effort to build an ethics of sustainable extraction is structured around two principal concepts: transparency and corporate social responsibility. While transparency initiatives concentrate on exposing revenue transactions between the private and public sectors in extractive industry projects, corporate responsibility efforts focus on the improvement of relations between companies and communities. The transparency movement has sparked advocacy and legislative activity in the United States, United Kingdom, and Canada—the host markets for much of the world’s trading of mining shares. Meanwhile, companies are dedicating more staff and resources to ensure the benefits of mine development reach communities in the form of improved services, infrastructure, and education. These twin concepts are intended to transform resource extraction from a winner-takes-all model to one in which all parties benefit.

The problem is that neither corporate responsibility nor transparency speaks to the reconciliation of extraction with ecological limits, or to the fact that we have entered a period of resource scarcity that necessitates nothing short of monopolization to make the business of industrial mining profitable. This order of magnitude leaves no room for multiple uses of land and resources, especially the smallholder farming and mining economies upon which people depend in mineralized places. Endemic poverty, conflict, and ecological collapse in these regions are rooted in the inequitable allocation of resources. In such cases, win-win solutions are an illusion.

I’ll be live-tweeting the Rio Tinto meeting on Thursday.