With metals demand ramping up rapidly in the face of the energy transition, new processing technologies can help meet the supply shortfall from existing operations, said McKinsey’s & Company in a mid-February article titled, “Bridging the copper supply gap”.
The global management consulting firm predicts global electrification to increase annual copper demand to 36.6 million metric tonnes by 2031.
The increase in copper demand can benefit Namibia as one of the exporters of copper ores and concentrate. Namibia exported N$754 million worth of copper between December 2022 and January 2023.
The firm explained that although current supply projections based on restarts, certain or probable projects, and recycled production offer a pathway to 30.1 million metric tonnes, another 6.5 million metric tonnes of capacity (an additional 20%) remains to be found.
The electrification gap also exists in Namibia with about 300,000 households in Namibia still un-electrified with an estimated 70% to 80% of rural households not having access to electricity.
The Ministry of Mines and Energy has set a target to have all the households in Namibia electrified by 2040.
The Namibia Statistic Agency’s (NSA) 2019/2021 Census Mapping Report revealed that about 53% of households in Namibia use firewood as the main source of energy for cooking, and 31% of the households use electricity from mains.
This highlights that there is a demand for finished copper products in Namibia to fulfil the country’s electrification programme.
McKinsey & Company indicated that the expected increased demand can be smoothened by the adoption of new emergent technologies such as coarse particle recovery, sulphide leaching, and process optimisation with machine learning.
The only obstacles to commercialisation and widespread adoption are not trivial. However, the researchers indicated that technological levers should be recognised alongside new mine development as part of the solution.
The researchers said the trend of declining copperhead grades is well-established and unlikely to be reversed.
Similarly, oxide ore bodies, which do not require concentrators and can be processed through less capital-intensive routes, are being exhausted.
The mining industry has responded to these challenges by processing ever-increasing volumes of sulphide ores.
The assessment by the firm revealed that over the past 10 years, the volume of ore sent to concentrators has increased by 1.1 billion metric tonnes, representing 44% growth.
“Nevertheless, to supply via traditional methods the copper needed for the energy transition, miners will have to repeat this feat again, increasing the volume of ore processed by another 44% by 2031,” the firm stressed.
“Of the 1.6 billion additional metric tonnes of ore required, 0.6 billion metric tonnes can be provided by recently announced mines or expansions.
“However, a gap of one billion tons per annum remains-an imperative to extract more metal from the ore being mined,” it added.
McKinsey & Company said that for major mining companies, the new technologies mentioned, such as coarse particle recovery, sulfide leaching, and process optimisation with machine learning, highlight the importance and potential contribution of internal innovation groups.
“Such roles can go far beyond incremental improvements—at their best, they stand alongside exploration and capital projects as drivers of future growth—and will likely be the key to taking these technologies from promising pilots to standard industry practice.”
Major miners can also continue to look for flexible, agile ways to work with juniors or service providers to ensure that they are drawing on the best ideas from across the industry.
In addition, these technologies reaffirm the importance of brownfield developments.
The potential to maximise the benefits in this space—with a lower environmental footprint and continued livelihoods for local communities—remains attractive.
As commodity prices increase and technology makes more possible, even sites that have fully ceased production can once more generate economic value.
For developers – juniors, service providers and research institutions – major mining companies are open for business, looking for partners, and creating opportunities.
“In this way, major companies can provide access to scale projects and support the growth of mining-tech unicorns,” the firm said.
“These technologies also offer new options for greenfield projects. The ‘mine of the future’ could require much lower ball mill capacity for the same output based on grind-circuit roughing technology, reducing capital requirements, water usage, and CO2 emissions.”
“Likewise, sulphide leaching offers the possibility of an incremental, low-capital-expenditure approach to the development of low-grade copper deposits that previously required the construction of capital-intensive concentrators.”
Mckinsey advised this approach can enable an incremental development model similar to that often used for gold deposits—especially in high-risk areas, where the capital at risk and the payback period are critical investment criteria.
“Similarly,for local communities that would accept some mining but are not sure they want to commit to a megaproject, the option for an incremental mine development pathway could be attractive,” the firm said.
As for metal buyers, the supply constraints facing the metals necessary for the energy transition can appear daunting, but new mineral-processing technologies through human ingenuity and the market economy tend to find a way to smoothen the hurdles faced.
“However, this is not an invitation for passive optimism: buyers have a role in working with the supply chain by funding and promoting technological breakthroughs where they can,”the firm said, adding that it requires careful analysis and staying abreast of industry trends.
Mckinsey indicated that as the world electrifies, the demand for copper will be difficult to meet, however, with innovative new mining and processing technologies, there is hope.
They recommended that players from across the industry, from mine operators to developers to metal buyers, can make moves today to support the implementation of these new technologies and to innovate further.
“If they do, they could provide humanity with the key resources it needs for the future.”