Friday, December 01, 2017

The Copper Opportunity

Hello again. This is Anthony Day and this is the Sustainable Futures Report for Friday, 1st December. Not long till Christmas! 
Last week I spoke about hydrogen, the lightest, simplest and one of the most common elements in the world, and one that could be vital to our low carbon future. This week I'm going to talk about copper, another element which will be equally important as we rely less on fossil fuels and more on electricity. Next week I have an interview with George Monbiot, but more about that later.

First let's talk about copper.

Anthony Day (ACD): Well, my guest today is Fleming Voetmann, who is Vice President of Public Affairs for the International Copper Association. Welcome, Fleming!
Fleming Voetmann (FV): Thanks so much. Thanks for having me.
ACD: OK, can you start off just by telling the listeners exactly what the International Copper Association is and what its objectives are?
FV: Absolutely. So, we represent the entire copper industry – that meaning everything from the mining of copper to the production of copper products and also the recycling industry, which is quite significant. So, you can really say it’s the entire value chain of copper. And the aim of the industry is, of course, to work on the interests of the industry – so that is both in terms of technology development, market development, but also, you could say, in tag team with government in Washington and Brussels and Beijing and other places around policy issues, regulatory issues that would impact the copper industry. 
ACD: Right, I see, and no doubt, promoting the sale, development, and use of copper. 

Low Carbon

FV: Yeah, and you could say that the big thing for our industry, of course, is that transitioning towards a low-carbon future. And for us, you could say, one thing is, it’s the right thing to do. But for us, it’s also a really, really good business case. Basically since Thomas Edison and, you know, his peers back in the 1880s rolled out the electricity grid. Copper has been very essential to modern life and goes in everything we would use, whether it’s electricity, you know, powering different kinds of functions – housing, heating, cooling – but when you move into low-carbon future, you’re actually going to use significantly more copper. So, McKinsey estimates about 40% more copper is needed in the low-carbon future. So, to kind of simplify it for the listeners, one of the reasons is that if you take a combustion engine car, and you now go to an electric vehicle, you actually end up using approximately four times more copper. So, for obvious reasons, we support that transition into low carbon, and we’re also committed to actually help that transition. 

Electric Cars

ACD: Right, ok – well, there’s been a lot in the press and the media recently about the electric car. The copper, presumably, goes into the motors, but it also goes into the transmission network because we need all these charging points. And the current grid is just not up to that. Is it?
FV: No, absolutely not. So, you could say the car itself – the powertrain, the cables, the wires, and, of course, it’s the charging infrastructure and so on which is quite essential.

Air Conditioning

ACD: Yeah, ok. You also mentioned on your website about air conditioning. This is copper tubes rather than copper wires.
FV: Yeah. You could say that copper is the best conductor of electricity but it’s also the best conductor of heating and cooling. So, I guess historically a lot of the development in the world, in the United States and Europe, of course, we had a lot of heating demand, but also a lot of air conditioning and how the world develops with what you could say hundreds of millions of people who were in poverty in China, Southeast Asia, moving into the middle class, which is a good thing to lift them out of poverty – that’s the part of the world where in the future you’ll see a big demand for air conditioning, but also refrigeration of food and other essentials. So, you see good development there but that also just requires that you can say some of the other things that other people might take for granted – where there’s air conditioning, refrigeration, and so on – that we talk about maybe close to a billion new people in the middle class. And that requires, of course, that we provide it to them. But we also need to provide it to them in a sustainable fashion. And they shouldn’t make our mistakes. That’s also a key thing into that sort of sustainability challenge that we have in front of us.
ACD: Yeah, an interesting thing is, of course, the other side of it is that if we are actually going to move to electricity for heating, and I think we probably will, then there may well be a lot of scrap copper pipes coming out, which will be recycled because…
FV: Hopefully.


ACD: I believe that something between two-thirds and three-quarters of all copper that’s ever been mined is still in use because it’s been recycled.
FV: That’s correct. 
ACD: How does your industry actually support and encourage recycling?
FV: You could say you have, you mentioned the buildings and stuff like that that hopefully is around for a very, very long time so that might take a lot of time before it’s recycled. What may be recycled today is the installations from the 1950s and the 1960s. So, what’s important for us is, you could say, that that is actually collected so it doesn’t end up in a landfill to begin with, and then our members, of course, are looking at sort of maximizing and getting the most out of their copper, but also trying to eliminate any kind of contaminations that were due to whatever environmental practices we had in the past. Lead is one thing, mercury, and so on. But then, the other huge business, of course, is – one thing is the buildings, and they’re hopefully a many hundred years – but the other thing is dealing with electronic waste. So, where people today are buying a phone, and, you know, 18 months later they need a new phone; they buy a computer, and two years later, they need a new computer. And there we also need to optimize how we collect and recycle all the materials. A couple of our members in Europe – Boliden in Sweden, Aurubis in Germany – they’re they world’s two largest recyclers of electronic waste. And we’ve recycled a lot of waste, but there’s still a lot of waste out there that could be recycled and that for sure shouldn’t end up in a landfill and it’s actually quite a good business case to recycle that. So, that’s one of the things that we work with the industry, but also work with policymakers – whether that’s in Beijing, Brussels, or elsewhere – to kind of facilitate and actually get that recycling going.

Design for Recycling

ACD: Right, now do you work with people like the phone and computer manufacturers to assist them to design things so they can be more easily recycled? Because that’s really one of the foundations of the circular economy. If you can’t take it to bits, then you can’t recycle it, in many cases.
FV: No. That’s a huge challenge. Are we there yet? I think no. We’re absolutely not there yet. I still figure there’s way more room for improvement when it comes to design for recycling, right? And of course one of the main points there is the batteries themselves. So, yes, that’s definitely something we talk with the electronics industry about. That’s something we talk with the auto manufacturers about, that you need to design for recycling. That would simply make it more environmentally friends, and of course often also a better business case. We try and eliminate whatever toxic materials that could be entwined into some of these products, so we’re doing ok, but there’s still room for improvement with the sort of design. 

Mining for More

ACD: Now, looking at the infographic on your website, which talks about the circular economy, it suggests that a third of global demand is met through recycling. But that means that two-thirds has to come from virgin material, if you’d like. And some people are already talking about peak copper – in other words, the fact that as you search for more and more, the ores are of lower and lower grade, you have to dig out more and more material. But global demand is steady, if not increasing. So how are you going to sort that problem out?
FV: Sure, so I think there are a couple positive attributes of the global copper research. We estimate – or rather, the U.S. Geological Service has estimated this resource for about 200 years. And you’re right that you could say that the quality of some of the copper ores is less than what it was maybe 50-100 years ago. But of course, at the same time, the production mechanisms also become more and more efficient. So, it becomes complicated, but of course, you know that the efficiency also goes up. So, I still think that there’s reason to be fairly optimistic, that you still have an abundance. Because I think that’s important because in addition to that is that you have copper mining literally all over the world in all of the continents. I think that’s equally important. Of course, you need the abundance, but you also want to avoid any geopolitical risks, and I think that’s a huge benefit of copper. You have Chile, of course the world’s largest mining country, other countries in Latin America, you have copper mining in Europe, you have copper mining in the U.S., in Asia and Africa. So, there’s an abundance and you avoid some of those geopolitical risks to your supply chain. 

And the Environment?

ACD: On the website, again, you talk about environmental conditions and concerns. You talk about copper pollution. You talk about bio availability, and you admit that in some cases copper can actually get to a level where it poisons plants and organisms. But equally, I think I’m right that copper is essential as a trace element to help some plants actually grow. I think, I know environmentalists listen to this, and I’m sure they’re going to have some questions. And I don’t think they’re going to be so concerned with the contamination from copper itself. It’s the byproducts of the actual refining, and extraction and smelting.
FV: Sure.
ACD: Now, the trouble is, of course, this has been going on for hundreds of years. There’s a case in point – there’s a refinery in Peru, which you probably know about. It’s Arroya. It’s been there a hundred years. It’s gone bankrupt, and nobody will touch it because during the hundred years, the contamination is absolutely immense. I’m quite sure you do an awful lot these days to prevent that level of contamination in new minings, but there’s this legacy problem, and obviously people are going to be very concerned that extraction is a dirty business.
FV: Yeah, absolutely. So I think a couple of points to that. I think absolutely there is a legacy of how people were operating in the 1920s and 1950s and the 1960s. And in all fairness, there’s also been huge improvements ever since. We, every year, do a survey among our members and see how much money do they invest in making their operations more sustainable, and that follows simply just the accounting rules set out by GRI and others and so on, and it’s around $20 billion every year. $20 billion they spend on that. And of course, a lot of that has to do with environmental regulation, labor safety, and so on. So, I think, $20 billion, that’s a lot of money that goes into it. And there’s a constant improvement of all of that. Some of the factories you go to Hamburg, you have Aurubis, we said before is one the world’s largest recycler of electronic waste, they are in the middle of the Hamburg city. The city, of course, was very different a long time ago. Now, all of the sudden, they’re in the middle of the city. That, of course, means they every year invest a lot of money in you can say reducing any kind of air pollution, but also noise, water, whatever. So there’s just been a development over the decades of, you know, when you started the business it was outside the city. All the sudden you’re inside the city. And you want to develop with the cities, right? I’ve visited a lot of these mines. I visit a lot of the production sites. I’m quite impressed with what they do. Is there still work that needs to be done? Absolutely. And, you know, they continue and are very committed to doing that. One of the dilemmas that I think would be to your listeners is of course is that also some of our members are the big multinational companies that maybe years ago a lot of people were slightly unhappy about, but one of the advantages they have of being the multinationals is that they are held accountable in many different jurisdictions across the globe by people like yourself, by the NGOs, and by other people. And that has an enormous advantage because they need to pay attention. And of course they have the leverage of being large scale, so one improvement they do at one mine in the world is easier for them to transfer that know-how to another mine in some other part of the world – whether it’s air pollution, whether it’s water recycling, and so on, and so on. But I think there’s a lot of progress being made out there, and they will continue to do that. 

Sustainability Report

ACD: Ok, well that’s good news. Can we expect the industry – or your organization, perhaps – to publish a sustainability report? An annual report? 
FV: Yeah, we do that actually already. So we have on what’s called, we have what is the equivalent of a sustainability report in there with 10 different indicators. The listeners can go into and have a look at those different indicators. So we have about I think 5 years we’ve done the indicators so people can also track progress over time. The good news is, for example, when you come to labor conditions, working safety, you see improvement year by year. Water recycling you see significant improvement on that. Investments in sustainability goes up. The only weak spot we have, in all fairness, is actually energy and carbon emissions. And the other is of course what some people say is the most important – and that’s just in full disclosure – is absolutely one of the biggest challenges that we have. That we are an energy-intensive industry. And we are very much dependent on the host country – so to say the regions we’re in, what kind of energy mix they have. Because some of the mines might have on-site production and a lot of them are sourced from local grid. So there, you can say our carbon emissions are often a reflection of whatever the decisions of the surrounding societies have made. 
ACD: Right, yes. Because I imagine you use quite a lot of energy, and while you might be able to put up solar panels and wind turbines you’d need a lot for the sort of things you’re doing.
FV: That’s true.
ACD: But, what about the water aspect? Because, from my limited knowledge, water is a major component of the refining process. You actually use electrolysis, don’t you? You use sulfuric acid. What happens to the sulfuric acid afterwards?
FV: So the sulfuric acid is a byproduct that’s actually sold today for – well, one of the applications would be for fertilizers. The water recycling is in our sustainability indicators, and the water recycling goes up year by year. And a lot of the sites have very, very high rates of water recycling. And, again, that’s the right thing to do but it’s simply also a good business case and it’s kind of the commitment they have to the local communities because a number of big mines are located in areas where water is a scarce resource.
ACD: Exactly.
FV: So that also means that if you look at Latin America today, some of the mines are in areas that are basically desolate – where water is simply scarce. So, water recycling is strategy #1. The second strategy is desalination. And there, of course, you know with desalination, which is great, but the challenge with desalination is that it is again energy intensive. So that puts more pressure on than if we need to convert to renewable energy and we need to be even more innovative in the desalination process, but also how do we handle that? And there are things, you know – there are opportunities in front of us also to work with the local communities – the farmers who need the water, they might be closer to the ocean, so they might get the desalinated water so they don’t have to pump it all the way to the mine. Then the mine can use a little bit more of the local water. There’s many ways to do that, but again the key to it is try to work with the local communities to figure out how do we do that. But water is really, really important.
ACD: Yes, so in summary, then, are you confident that industry is going to be able to meet the challenge of this move to – well, basically – a move to a greater usage of electricity?
FV: Yeah, I think so. I think the – again, you know, there is abundance. There is copper in many places all over the world, you know. So you could say some of the issues that you may have on other materials – that could be like phosphate, or others – where you know the abundance might be in a few countries here. We work in quite a number of countries. I think that’s a huge, huge advantage. There’s still also a pretty significant untapped potential for recycling. We see that with all of the electronic waste – the amount of electronic waste is just going up. But there is also iPhones and computers that unfortunately end up in a landfill where they shouldn’t end up. So let’s start recycling them. And there, I think there’s a number of countries across the globe that can improve on actually the collecting of all that waste. So there again there’s an untapped potential and actually a pretty good business case for that. 

The Future

ACD: But all in all, you’re optimistic about the future.
FV: I’m super optimistic only because I think, again, the world is going to need copper, and my members are very committed to providing it but also providing it in a very sustainable fashion. And again, you know, that also comes from – I think it comes from a very good relationship with the NGOs and with loads of environmentalists is that we want electric vehicles, we want wind and solar energy. But we only want it if it’s produced sustainably. So we have good alignment of our interests here. We want to facilitate that low-carbon transition, but we also know that we need to deliver on that sustainability all the way back to the mine sites.
ACD: Fleming, that’s been a very interesting conversation. Thank you very much for your time. I’m sure it will lead – I hope it will lead to some responses and questions when we broadcast this, but that’s great. Thank you.
FV: Excellent, thank you so much.

And finally...

That was Fleming Voetmann, who is Vice President of Public Affairs for the International Copper Association. You can find out more at and those recycling companies he mentioned are Aurubis in Germany,, and Boliden in Sweden,
Next week, as I mentioned at the start, we have an interview with George Monbiot. He’s an author and campaigner on environmental, sustainability and political issues. He’s written eight books and there’s a new one just out, and he’s a regular columnist for The Guardian newspaper. That’s next week - Friday 8th December.
For now that’s all from the Sustainable Futures Report. If you like what I do please don’t forget and don’t forget to listen next week.
I’m Anthony Day.

Bye for now.

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