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Critical needs could go unmet as talent pipeline runs dry | EV supply chain could add 250,000 jobs, $59B to economy by 2030 HUMAN RESOURCES
From left: Jamie Keech, executive chairman of Vida Carbon Corp, Karora Resources executive VP for corporate development Oliver Turner, Inventa Capital managing partner and co-founder Michael Konnert and Star Royalties CEO Alex Pernin. PHOTO BY HENRY LAZENBY
Miners should hedge future carbon offset costs, execs say BEAVER CREEK
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| Level of demand means prices will only escalate
BY HENRY LAZENBY
s the energy revolution gathers momentum, so too intensifies the pressure from the investment community on miners to create net-zero emissions operations that produce sustainable upstream products feeding the new green economy, a panel heard during the Precious Metals Summit in Beaver Creek, Colo. Sept. 13-16. Jamie Keech, executive chairman of Vida Carbon Corp., told delegates there’s a pool of about US$39 trillion of capital that has been committed to de-investing from oil and gas. “That money all has to go somewhere, and there’s tremendous pressure on capital allocators to put that money to more environmentally friendly uses,” he said. Keech noted that investors, limited partnerships and governments are in turn, applying that pressure on corporations, particularly in the mining space. Even top investment funds such as Larry Fink’s Blackrock have said that if a company in their portfolios didn’t have a carbon reduction strategy in place by 2030, then the finance taps are getting turned off. “These materials and metals we’re mining are critical for the transition to a renewable and a netzero future. So, suppose you are a mining company involved with this transition and put a climate action strategy on top of that. In that case, you bet your bottom dollar that large capital allocators will look at you instead of companies without such policies,” said Keech. Karora Resources’ (TSX: KKR)
executive VP for corporate development, Oliver Turner, stressed that the rise of the carbon credit market all boils down to reducing the cost of capital. “If you are raising money from debt, you will have a reduced cost of capital if you abide by these principles and all that ties into the ESG theme. And I think the most important part of this must be the carbon credits and how those contribute to achieving these goals and lowering the cost of capital,” he told the summit. “It’s lowering dilution and creating higher returns for shareholders.” Star Royalties’ (TSXV: STRR) CEO Alex Pernin said the market was developing exponentially. According to Pernin, the market is growing via two main drivers — those companies that seek to comply with regulations and those seeking to voluntarily comply to improve their investability status from an ESG perspective. “On the compliance side, the market is at a several US$100 billion level right now,” he told the summit. “What’s more exciting to talk about,” said Pernin, “is voluntary growth. Five years ago, in 2017, the voluntary [sector] was a $200 million market — very tiny. Two years ago, it doubled to about US$500 million and quadrupled to a US$2 billion market last year. So, in five years, this market has gone up 10 times, and then there’s an expectation the market could balloon to US$30 or US$50 billion by the end of this decade.” According to the panel, fossil fuels multinational Royal Dutch
Shell recently said it would require about 120 million tonnes in carbon credit offsets a year to be carbon neutral. That is about US$1.2 billion in investment from one company alone to offset its carbon emissions at today’s average carbon unit price. “It’s unreal to have a single company expressing the need to buy half the carbon market in a given year,” Pernin said. “Because of the level of demand for it, there’s a natural escalator, as you would expect, for carbon prices to come up. What’s interesting with the carbon world is that these technological solutions we’ve discussed require higher pricing based on the economic need. Not US$40 carbon but US$100 to US$150 [per tonne] pricing for it to be viable. And we need these products to be viable to meet the Paris Agreement targets,” he added. Advice for miners The panel offered advice for mineral explorers and miners, saying compliance starts via physical emissions reduction at site by using new technologies such as electrified and autonomous equipment and renewable energy sources to power operations. “There’s absolutely no doubt that it’s becoming economical to do that versus the combustion engine counterparts,” Keech said. “You must offset what you cannot reduce in emissions to be carbon neutral, and ultimately, to be net zero.” Inventa Capital managing partSee CARBON / 6
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BY BLAIR MCBRIDE
ust as Canada is attracting key investments to build up its critical minerals infrastructure, a shortage of critical expertise could hinder the country’s lofty ambitions. A case in point is the burgeoning battery hub of Bécancour, Que., where new developments could end up competing for skilled labour. In that southern Quebec city, just east of Trois-Rivières, GM and Posco are planning to build a $400-million battery materials production facility and Nouveau Monde Graphite (TSXV: NOU; NYSE: NMG) is advancing a spherical graphite purification plant. But from a human resources perspective, the skills that will be needed for those developments are hard to find across North America and if all three facilities go into production at the same time there could be “serious issues,” said Philippe Legault, Nouveau Monde’s vice-president of human resources. “Just to staff those plants will be a challenge. That could jeopardize or put at risk our country’s capacity to embark on the EV revolution. We have the resources but we don’t have the expertise to embark on that,” he told The Northern Miner in a phone interview. Nouveau Monde CEO Eric Desaulniers also flagged the issue at the Prospectors and Developers Association of Canada conference in Toronto in June, when he said Nouveau Monde has had to rely on workers from China. “The only big player is China,” Legault said. “Transforming this graphite concentrate into… spherical graphite requires expertise that exists — and a process that exists — only in China. We’re currently developing our own process for the purification. That’s more on the chemicals [and] materials engineering side of the conversation side than the mining engineers.” It could be a challenge, Legault believes, for the North American EV industry to fulfill its potential after U.S. President Joe Biden signed into law in August the Inflation Reduction Act, which
WEST AFRICA EMERGES AS A HAVEN FOR GOLD MINERS / 6
offers US$7,500 rebates for EV buyers. Only vehicles that are manufactured in North America, with a certain proportion of critical minerals and battery components sourced in North America, are eligible for the incentive. “That’s good for the industry,” Legault said. “However, we have a lack of chemical engineers, process engineers, materials engineers… specifically for the critical minerals niche like for graphite and lithium.” Looking at the industry as a whole and from the mining to the manufacturing stage, Legault believes more immigration of skilled individuals could help meet future needs. But if enough positions aren’t filled then projects could be delayed or even shelved. To steer the mining industry in Canada towards a more prosperous destination, Legault thinks it has to promote itself more effectively, focus more on diversity and See TALENT / 7 PM40069240