Hands holding crushed rock
Business Environment

METS and miners partner for circularity

Why the METS-mining company relationship is crucial in creating circularity in the mining industry

It has come to my attention that there’s a fair bit of misunderstanding around the concept of circularity and what it looks like within the mining space; there is often an assumption that it revolves around recycling.

Recycling can be used in certain circumstances, but circular processes and business practices require much, much more…

According to the Ellen MacArthur Foundation: “a circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems”.

As a key part of global industry, the mining sector can and will participate in a much larger version of this model; a macro-version if you will. However, the concept can also be applied at a micro-level to mitigate the creation of waste and pollution internally within mining and within individual companies.

While it’s important that we are ambitious in our role in the macro-version going forward, and that we put plans and procedures in place now to ensure that vision becomes a reality in the coming decades, it is arguably more important that we focus on getting the micro-version right first; we need to walk before we can run.

Collaboration with stakeholders, governments, academia and with suppliers will be central to achieving this. And I wanted to delve more deeply into one particular area: the mining- METS company relationship.

METS companies – mining equipment, technology and service providers for the uninitiated – have excelled in recent years at introducing circularity into the design and production of their own solutions. And, given the longevity and complexity of mining operations, their influence often extends far beyond the usual producer-supplier model seen in other sectors.

Headshot for Kaisa Jungman
Kaisa Jungman is director of sustainable business development at Metso

Mineral processing expert, Metso, has been working to understand the benefits and impacts of circularity on its own processes. The company is also collaborating with its customers to help make their visions of carbon- and waste-free mines a reality, and director of sustainable business development, Kaisa Jungman, was happy to explore the subject with me.

“Recycling is only one part of the circular economy,” Jungman explained. “We really dug into the topic a year or so ago to understand the concept of circularity and how we could better apply that to our business.

“For us, it all starts from product design. So, as a technology company, we aim to supply equipment that is built to last a long time. Then, we add services so that customers can replace worn parts. They can rebuild, refurbish and upgrade the equipment so that it lasts even longer.

“There are also different kinds of optimisation that we can do once the equipment is installed to maximise its operating efficiency ensure less energy and water are consumed.

“And then, eventually, we take back some of the parts for recycling or reconditioning and maybe utilise them again. There are many aspects to product circularity, but those are some of the main things that we have been considering and we are already doing quite a lot.

“We also aim to maximise the efficiency of our own production processes and operations. If we do need to create waste, then maybe there is a way to use those materials elsewhere? Maybe there is another company or industry using that material that could take it. That is also a core part of the circular economy.

“From the mining company’s perspective… nowadays it’s harder to open a mine due to increased legislation and social pressure, and it’s not so easy to find new mineral deposits, so it makes a lot of sense for businesses and operations to be more efficient.

“And, of course, we all need to do our bit towards climate change mitigation, reducing CO2 emissions and using natural resources responsibly. All of these things go hand in hand.”

Awareness and demand

To me, it simply makes good business sense to work more efficiently and resourcefully wherever possible.

As with so many initiatives, I suspect it’s just that our efforts in this area have not been communicated to wider audiences until relatively recently; some mining and METS companies have been working to improve circularity in their businesses for decades.

I asked Jungman for her take on the growth in awareness and movement around circularity.

“Investors are playing a very active part in this drive,” she said. “Of course, there is legislation too and it’s important that we work alongside regulators to help them understand what is technologically possible and what’s not.

“But there’s also a new generation coming to work in the mining industry and many of these people have a greater awareness and understanding of the importance of circularity. There’s a lot of pressure coming from them as well; they don’t want to work in an industry that’s wasteful and polluting the environment.

“You can really see a shift in how people think. When I talk to people today and compare our discussions to those we were having ten years ago… I haven’t met a single person that wouldn’t consider sustainability a key issue at the company today.”

Investors are the most active group of stakeholders, but they are mainly looking into circularity as a means to financial stability or prosperity.

A storeman sorts through spare parts on a shelf
There are many small steps that mines can take to improve circularity in their businesses including better managing their spares inventories. Image: Metso

Reporting against sustainability measures, for instance, those set out in the Task Force on Climate Related Financial Disclosures (TCFD) framework, offers businesses the opportunity to show investors that, with the right measures, they will still be in business in 5, 10 or 20 years’ time and whether they will adapt well to the low-carbon, green-energy, waste-free future that is panning out globally.

But investors are not the only party concerned with circularity in mining, more important are the communities and landowners surrounding operations who are physically affected by the resource consumption and, potentially, by-products of mining processes.

And then there are the governments who will ultimately decide whether a mining project gets the necessary permits to proceed or not depending upon the responsible nature of its practices.

Social license to operate is every bit as important as financial viability in determining the sustainability of a mining company; EY ranked it number one in its list of top 10 business risks for companies operating in the mining sector during 2020 – the second time it has topped the chart.

Challenges & opportunities

As with most substantial changes, it’s best to start small and think big when it comes to circularity.

I asked Jungman, where should we start?

“There are lots of things that companies can do,” she said. “Maybe the operation of a piece of equipment could be planned better to make it more efficient?

“Maybe it has a modular design and some of the parts could be changed out or wear products added to extend the life…? Or we could optimise the wear part’s performance so that there’s not much waste, and production is more efficient.

“There’s also a lot of optimisation that companies can do in the short-term. Analytics can be used to plan maintenance activities and optimise warehouse inventories for the installed base.

“It’s also important to start being more precise and resource efficient in our supply chains to minimise waste and energy consumption there too.

“But then, there are bigger things like reprocessing material from legacy tailings dams and partnering, both internally and externally to find new opportunities.

“Even internally, companies can find new ways to do things. For example, Metso has a lot of different business areas: we have equipment for mining, recycling, aggregates etc. Maybe the mining equipment could be used in recycling or vice versa in some products?

“First, you need to realise your own competencies, and then look externally to suppliers, universities or research centres. It’s difficult for individual companies to change the world. But, through partnering and cooperation, we can create broader solutions.”

Photo showing scrap metal piles at a recycling plant
Metso is looking internally as well as externally for solutions that could help to improve circularity in its business. The company operates in the recycling space as well as in mining and minerals. Image: Metso

Miner-supplier relationship

The METS-mining company relationship is not only vital in helping miners to optimise their current processes and ensure they get the most from equipment. It’s also a springboard for innovation and change.

The real challenge lies in redesigning linear mining processes, some of which have remained fundamentally unchanged, although they may have evolved technologically, for 100 years or more.

Suppliers have a unique platform from which to influence their customers. If a trusted partner presents to you their vision of a more sustainable and resourceful mining process and asks you to partner with them in developing a new concept or technology, you are much more likely to take them up on that opportunity than a new contact you don’t know so well.

“I think suppliers have a role to play in being proactive, and presenting new ideas and visions, and getting mining companies interested,” said Jungman. “We need to motivate them a bit. Even if they don’t want to buy that product or service immediately, they will remember you as an innovator when the time is right. It takes courage to be a forerunner.”

As Apple founder Steve Jobs once said: “People don’t know what they want until you show it to them.”

That statement is clearly applicable in mining too.

The time is now

According to a May 2020 report from the World Bank, Minerals for Climate Action: the Mineral Intensity of the Clean Energy Transition, the production of minerals, such as graphite, lithium and cobalt, could increase by nearly 500% by 2050.

“Future increases in recycling rates can play an important role but even with large increases in metal recycling – including a scenario where 100% end of life recycling is achieved – there is still likely to be strong demand for primary minerals over the next 30 years as we transition to a low carbon energy model,” stated the report.

Which is precisely why companies in the mining space need to speed up the adoption of circular processes and business models. Without them, we’ll never keep up with future demand.

“Estimations of how much metal consumption will grow, how much the population will grow… it’s quite scary when you look at those numbers,” Jungman said. “I think the circular economy will play a role, not just in producing the metals needed, but also in managing demand for the end-products created using them.

“Goods today get broken far too quickly – we have a disposable culture – even with things like mobile phones. Consumer models are designed so that we keep buying new rather than upgrading or repairing equipment. We need to change that.

“And it’s not only the consumers who can instigate that change, companies need to think about their current behaviour and business models. We need to look at new ways of selling things and creating services from products… maybe renting or leasing could become more common?

“We need to make products modular so that when they do get broken, we can replace parts and recycle or reuse them.”

Of course, another reason we need to act is climate change. That is already having a negative impact on many companies and populations around the globe, and there are cases where investors have removed backing from certain companies/sectors that are not performing on the sustainability front.

“And then there’s the younger generation. If we don’t change, then in the future we could have a lack of talent in our companies,” Jungman added. “The younger generation might go into other industries.

“There are several reasons we need to start acting right away.”

Instigating change

The mining industry’s ability to participate fully in the macro-version of the circular economy and, to get models right at a micro-scale, depends heavily on our ability to collaborate and communicate; not just with our direct suppliers and customers but more widely, with end users of our products and the general public.

We need to get better at linking everyday items like mobile phones, electric cars, power lines – items that are part of peoples day-to-day lives – to the mining industry and to mining processes.

I doubt there are many other industries where the producers are so far removed from their end users.

“That’s a good point,” Jungman said. “People need to realise that the products of mining are everywhere. We need to tell them what resources go into producing the metal in their phones or cars. If they don’t know, they cannot make an informed choice as a consumer.”

This is where digital technologies like blockchain will make a difference in the coming years.

Cubes of scrap metal waiting to be shipped
Demand for primary minerals over the next 30 years will far outstrip what can be recovered through recycling. Image: Metso

Making metals and supply chains traceable will eventually allow consumers to ask and, reliably find out, where the metals they are purchasing come from and how they were produced. This will start to drive more conscious consumerism that will support and advantage companies that are producing metals responsibly.

We have seen a similar increase in interest in provenance in the food and fashion industries in recent years.

The rise in slow, sustainable fashion and the #whomademyclothes movement on social media can be directly traced to the collapse of the Rana Plaza factory in Dhaka, Bangladesh in 2013 where over 1,000 garment workers were killed and thousands more injured.

In that case, mainstream media coverage shocked the public into awareness, and people voted with their wallets. As a result, fashion brands were forced to start looking more closely at their supply chains and ensure better pay and working conditions for staff within them, or risk losing their customers.

Interest is growing in sustainably sourced metals too, and that interest accelerated notably following the Brumadinho tailings dam collapse in early 2019.

In December 2019, Apple bought the first commercial batch of aluminium produced using carbon-free processes through ELYSIS, a Rio TintoAlcoa joint venture.

It’s great that brands like Apple are asking for responsibly produced metals, but it would be even better, and large-scale change would come about much faster, if demand came direct from the end user.

I suggest we start a hashtag of our own and encourage people to ask: #howwasthismetalmade? when they buy a new phone or car.

Who’s with me?

0 comments on “METS and miners partner for circularity

Leave a Reply

%d bloggers like this: