Nickel Mining in Russia – Norilsk Nickel & Amur Minerals

Russian Nickel Reserves and Production Map with EEZ

World Nickel Reserves and Production in 2011

Reserves – World nickel reserves, according to the latest data by the USGS, amount to 80,000,000 mt.  From the chart on the right, one can see that Russia holds currently 7% of the world’s nickel reserves amounting to 6,000,000 mt, coming in fourth place after Australia, New Caledonia, and Brazil.

Production – World nickel production in 2011 amounted to 1,800,000 mt.  From the chart on the left one can see that Russia produced 16% of the world’s nickel production at 280,000 mt.  All of the nickel producing countries increased production from 2010 to 2011.  Canada, for instance, increased their production by 26% from 158,000 to 200,000 mt, whereas Russia only increased production by 7% from 269,000 to 280,000 mt.

Russian Nickel Reserves and Production – 2010

Norilsk Nickel – Of the 269,000 mt of Russian nickel production in 2010, Norilsk Nickel Russian operations were responsible for 88% at 236,000 mt.  Norilsk Nickel is currently Russia’s largest mining company, operating Nickel mines at both their Kola MMC and Polar Division (of the Taymyr Peninsula) locations.  Russian enterprises received an average price of 21,997 USD per tonne of nickel in 2010 compared with only 15,853 USD per tonne in 2009.

Norilsk Nickel Polar Division Map – http://www.nornik.ru/_upload/editor_img/file0181.jpg

  • Polar Division – Within the Russian Taymyr Peninsula, the Polar Division oversees three nickel-copper-sulfide ore deposites that are currently being mined.  These consists of the Oktyabrsky, Talnakh, and Norilsk-1 deposits.  Talnakh deposits are considered to be of the largest in the world.  Proven and probable nickel reserves amount to 4,700,000 tonnes.  Nickel production in 2010 amounted to 124,200 tonnes or 46% of total Russian nickel production.

Port Dudinka – The Polar Division relies almost entirely on the Yenisey River to export production to the rest of the world via Port Dudinka (shown in above map) and then via the Northern Sea Route (read more).  Norilsk’s Polar Division thus shipped 124,200 tonnes of the worlds nickel production (8.7%) through the port in 2010.  The port closes for only one month each year, during the ice thaw that occurs through May to June.  During the winter months, icebreakers are used to clear the Yenisei River that links port Dudinka with port Dikson, and thus the Northern Sea Route.  Icebreaker-like cargo ships are used as well that do not usually require any assistance from standard icebreakers.

  • Kola MMC – Within the Russian Kola Peninsula, the Kola MMC division oversees the mining of the Zhdanovskoe, Zapolyarnoe, and Kotselvaara and Semiletka deposits.  Nickel reserves amount to 1,400,000 tonnes.  Nickel production in 2010 amounted to 111,300 tonnes or 41% of total Russian nickel production.  The Kola MMC division is fully integrated into the well-developed regional transport infrastructure.

Amur Minerals (updated – July, 2012) – With operations in Russia, the firm operates and is exploring the Kun-Manie nickel-copper-sulphide ore deposit in the far east Russian province of Amur.  Joint Ore Reserves Committee (JORC) compliant probable ore reserves and resources amounted to 170,500 and 341,000 tonnes respectively, of contained nickel as of Dec, 2011.  An application for a license extension was submitted in May, 2012, as the current exploration license expires at the end of 2012.  It is probably worth looking at the reserve grades and resource % Ni content here in the 2011 Annual Report for a better idea of ore quality.

In March of 2011, the Kustakskaya license, just east of the Kun-Manie deposit in the region of Khabarovsk, was returned to Russia.

Sources

  • Norilsk Nickel – Kola MMC – http://www.nornik.ru/en/our_products/kola__mmc/
  • Norilsk Nickel – Polar Division – http://www.nornik.ru/en/our_products/polar_divisions/
  • USGS – Mineral Commodity Summaries 2012 – Nickel – http://minerals.usgs.gov/minerals/pubs/mcs/2012/mcs2012.pdf
  • Amur Minerals – 2011 Annual Report –  http://www.amurminerals.com/Downloads/2011%20_Annual_Report.pdf
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Coal Mining in Svalbard – Store Norske & Arktikugol – Norway

Svalbard Map with Operating Mining Companies Norway

With only a population of 2,753, 423 of those being either Russian or Ukrainian, Svalbard is what is referred to as Norway’s Arctic archipelago of islands.  According to the Svalbard Act of 1925, Svalbard is established as both a free economic zone, and a demilitarized zone.  The economy relies mainly on the coal production of two mining companies.  One Russian, one Norwegian.  The map above displays the property claims of the mining companies operating in Svalbard.

Store Norske  Spitsbergen Kulkompani AS (SNSK) – The Norwegian state-owned mining company fully owns the following 3 subsidiaries.

  • Store Norske Spitsbergen Grubekompani AS (SNSG)- Owns properties that encompass an area of approx. 2000 sq. kilometers within Svalbard.  Operates the Svea Nord coal mine, along with the Gruve 7 coal mine.  Measured coal reserves and probable resources in 2010 were measured to be 20.4 and 3.5 million tonnes respectively.  Coal sales in 2010 and 2009 were 1.7 and 2.5 million tonnes respectively.  In 2010, 1.5% of coal was kept in Svalbard for energy use, where 53% of coal was exported to Germany.
  • Store Norske Boliger AS – Manages Store Norske owned lodgings which are rented out to company employees.
  • Store Norske Gull AS – Gold, nickel, and PGM operations in Troms and Finnmark.

Arktikugol – This Russian state-owned coal mining company operates an area of 251 sq. kilometers in which the mainly Russian and Ukrainian settlement Barentsburg (Баренцбург) is located.  Russia currently works to increase its presence within Svalbard by improving the living conditions of those that work there, supporting economic growth, and attracting Russian and foreign investments.  The company is heavily subsidized by The Russian Federation.  Arktikugol consists of 3 parts.

  • Barentsburg Mine – Coal reserves are estimated to measure 2 million tonnes. Most Barentsburg coal is exported to Denmark, Portugal, and Spain.
  • Grumant Coal Field – This undeveloped field is assumed to hold coal reserves of approx. 30 million tonnes.
  • Pyramiden – Abandoned in 1998, the mining settlement used to be home to over 1000 people.

Climate-Gas Emissions – One would assume that a micro-economy based off of coal production would yield significant climate gas emissions such as CO2, methane, and SO2.  From the Norwegian Ministry of the Environment, we have the following climate gas data for Svalbar for 2007.  Emissions are quite obviously a strong function of local mining industry dynamics and thus vary from year to year.

  • CO2 – 424,787 tons, 42% of which comes from coal-based energy production.  International marine cruise traffic accounts for 15%, marine coal transport from Svalbard to other countries accounts for 13%,  marine cruise/research vessels account for 8%.
  • SO2 – 1,255 tons, 91% of which comes from coal-based energy production.
  • Methane – 3400 tons, 98% of which comes from coal production.

In addition to mining activities, the tourism industry provides economic support, along with the two major research facilities located near the town of Longyearbyen which are listed below.

  • University Centre in Svalbard – Norwegian state-owned university focusing on Arctic studies.
  • The Svalbard Global Seed Vault – Commonly referred to by conspirators as the global doomsday seed vault, the Global Seed Vault is a store of plant seeds that are to be a form of insurance against a major global crisis.  Many different organizations provide funding for the operation which include the government of Norway, and the Bill and Melinda Gates Foundation.

Sources

  • Store Norske 2010 Annual Report – http://www.snsk.no/getfile.php/1669680.1589.qrrvvcscua/AR_2010.pdf
  • Арктикуголь Шпицберген – http://www.arcticugol.ru/
  • Klima OG Forurensnings Direktoratet – Climate Influencing Emissions, Scenarios and Mitigation Options at Svalbard – http://www.klif.no/publikasjoner/2552/ta2552.pdf
  • The University Centre in Svalbard – http://www.unis.no/

Aluminium Smelting in Iceland – Alcoa, Rio Tinto Alcan, & Century Aluminum Corp.

We’ve all heard about Alcoa’s aluminium smelter in Iceland along with it’s environmental implications.  We have not, however, heard all of the facts along with some of the beneficial reasons for having such smelters in Iceland.

Refining & Smelting – From Bauxite to Aluminium

Aluminium itself (Al) is not exactly a naturally occurring element.  It is most commonly derived from Bauxite which consists of gibbsite Al(OH)3, boehmite γ-AlO(OH), and diaspore α-AlO(OH).  World bauxite reserves are given in the chart to the right.  (Data from a 2012 USGS report)  What we see is that Guinea, Australia and Brazil together have over 50% of the world bauxite reserves.

Bauxite must first be refined into alumina Al2O3 by means of the Bayer process.  This mainly requires sodium hydroxide NaOH and the energy required to heat intermediate products as inputs.  ‘Red mud’ waste with a pH of 10 – 13 is produced as a byproduct and stored in holding ponds.  On average, 2 units of red mud are produced for every 1 unit of alumina.

Alumina Al2O3 is then smelted into aluminium (Al) through the Hall-Héroult process.  Although somewhat complicated, the alumina is disolved into a mixture of molten cryolite, and then electrolysed to end up with pure aluminium.  These reactions take place in cells which are set up in series in a plant.  Given the nature of aluminium smelting, the rate of Al production is proportional to the very powerful electric current that must pass through each cell.  Electric current must be supplied continually and reliably.  Hydrogen fluoride (HF) and CO2 are both given off as fumes.  HF, if untreated, is toxic and corrosive.  Other cyanide-forming materials are also produced as byproducts.  There are methods that are used to treat these products.  (Read more about the Hall-Hérault process here)

For the Hall-Hérault process to function, an electric current of low voltage but from 200,000 to 500,000 amperes must pass continuously through each cell.  On average it takes about 15.7 kWh of electricity to produce 1 kg of aluminium.   This is what makes aluminium smelting such an energy intensive process.

Due to the nature of the process, power outages have the potential to cause damage to production cells as the molten liquids could solidify in absence of adequate current.  For this reason, production facilities need to be near secure and reliable sources of energy.

Aluminium Smelting in Iceland

Why Iceland?  From what we know about the energy requirements for smelting aluminium, countries such as iceland that have untapped hydroelectric dam potential stand to be perfect contenders in the search for low cost electricity.  When profit is your bottom line, lower input costs are what you seek.

There are currently 3 operating aluminium smelters in Iceland.  As much of the world’s bauxite is refined into alumina in other countries, Iceland smelts solely the alumina into aluminium rectifying the problem of red mud waste on Icelandic ground.  (Iceland would not have the comparative advantage in refining, as refining is not energy intensive as is smelting)  In 2010, Iceland only contributed about 2% of the world’s aluminium smelting production (780 thousand metric tons).  The chart on the right shows this information.

The following table summarizes all three Icelandic aluminium smelters. What is notable is that the aluminium industry’s total power usage amounted to roughly 73% of Iceland’s total power consumption in 2010. Employment is sizeable, yet it still attracts a sizeable amount of foreign labour.  It has been criticized by many sources that a large enough percentage of labour used for the construction of these projects was not sourced in Iceland.  What is more, is that high profits in years of particularly high aluminum spot prices have fled the country to it’s foreign owners.  Years of low aluminum prices, however, would result in subsidies from these foreign firms in keeping company operations afloat.

Alcoa’s Fjarðaál Smelter

Alcoa’s Fjarðaál smelter located in eastern Iceland has received a lot of attention.  This is due to the fact that the state owned energy company Landsvirkjun built the 630 MW Kárahnjukar hydropower station along with it’s associated dams in order to accomodate Alcoa’s smelter and thus caused the flooding of a sizeable area that contained various natural wild and plant life.  (Dam reservoirs are shown in red) Water from the hydroelectric dams is diverted through underground tunnels to the underground Kárahnjukar power station.  Water flow comes from the slow melting of the nearby Vatnajokull glacier.  Power is then sent through high voltage transmission lines to the Fjarðaál smelter.

Rio Tinto Alcan and Century Aluminum Corp’s Aluminium Smelters

Less commonly discussed are the Grundartangi and Straumsvik smelters of western Iceland.  Power source data was not available, but it likely comes from the hydroelectric dams that hold up the water reservoirs that are show in red on the above map.

Environmental Concerns

  • Renewable Energy Use – All 3 aluminium smelters rely wholly on hydroelectric and geothermal power.  This carbon footprint from using these power sources is almost nonexistent when compared with the footprints of other smelters that rely on coal-fired power stations in other countries.  Other worldly smelters use nuclear power as well.
  • Some of the main environmental criticisms stem from the flooding of lands following the construction of large hydroelectric dams.
  • Fluoride byproducts, if untreated, can devastate local environments.
  • Most environmental publications start by citing the CO2 and energy consumption emissions per capita of Iceland in comparison with those of other countries.  With a population of under 300,000, it is clear that these statistics will be high.

When you look at Iceland’s scenario with respect to the world as a whole, it can be argued that Iceland is relieving some of the pressure that other smelters in other countries may be facing.  If world production were to be held constant, would it not be better for the world as a whole to have as large of a percent of aluminium smelting as possible fed by non-CO2 emitting energy sources?  If Iceland does not accomodate 2% of world production, will this 2% be moved and thus smelted with the help of dirty third-world coal-fired plants?  China, smelting 41% of the world’s aluminium in 2010 used mainly coal as a power source.  Iceland currently only uses a small percentage of it’s possible hydroelectric capacity.  Would it not be better for the world as a whole to see an even greater percent of world production transferred to a region that would be able to supply this type of energy?  CO2 emissions worldwide would in-fact decrease.  Is this not the goal?  Theoretically, yes it is.

Unfortunately, the reality is that we only have so few locations on the planet that are ecologically pristine.  Iceland is to a large extent one of these locations.  With several new plans currently under development to build new dams and aluminium smelters, there is likely to be much debate ahead related to ecological feasibility.  In 2010 I visited Iceland, and was able to drink arguably some of the best tasting water I had ever had.  Iceland prides itself of the purity of their water, having impressively low traces of heavy metals or contaminates.  It is tough to imagine a future where this would no longer be possible.  Heavy industry is in some ways the fast-track to this future.  For this reason, it is very important that Iceland be strong in evaluating the economic benefits from hosting such an industry.

Sources