Mining is a popular sector for capital markets, particularly within early-stage and venture markets.
Due to the sector’s business activities of acquiring property for the purpose of mining, it is reasonable to assume equity financing would be favorable.
Securing a property is typically the first order of operations. Then follows the materials, tools, and labor required to initiate the act of drilling.
Once a project has begun, operators hope to discover valuable minerals and resources such as copper, gold, silver, or palladium. Often, early-stage financing for mining companies involves selling shares of the company to investors in exchange for the capital required for these acquisitions and upfront costs.
For investors, drilling is the exciting part. However, investors’ anticipated results can send the company’s share price swinging in either direction. Like any early-stage venture investment, it can be a gamble at times.
While there are advantages to owning shares in a liquid market – as you can manage your position to avoid losing a chunk of your investment – there is still plenty of inherent speculation that comes with investing in a traditional mining company.
Now there is nothing wrong with speculation. Plenty of mining companies have proven to become very lucrative for their shareholders…
However, an exciting, modern approach has been conceived recently and we’re digging deeper into it.
Why Are We Talking About This?
According to a 2020 Global E-waste Monitor report, there are about 53.6 million tons of e-waste (electronic waste) dumped each year.
Only 17.4% of that is recycled.
Chemists are working to develop an economically viable recovery process to extract and purify the metals from e-waste while meeting the necessary ESG (Environmental, Social and Corporate Governance) standards.
Gold is still a practical metal in today’s world, especially with electronics. According to Wendy Lee Queen, an American chemist and material scientist, gold is important due to “its highly efficient electrical properties and corrosion resistance, which are unmatched by any other metal.”
However, gold has always been a scarce element. According to the US Geological Survey, the below-ground stock of gold is estimated to be around 50,000 tonnes. To put that into perspective, about 190,000 tonnes of gold have been mined to date – giving about 20% of the estimated reserves still to be mined.
Did you know: The 190,000 metric tons of gold that have been mined to datecan fit into a cube that is approximately 20 meters on each side. That is almost 1/5 the height of the Statue of Liberty.
There is Room for Growth in the Process
The religious world, the jewelry world, and the electronics industry are all in competition now. According to Queen, even though it only takes forty cell phones to conjure up 1 gram of gold, the amount of mined ore it takes to produce the equal quantity is far greater.
Aside from a few innovators, there are two primary industry processes for extracting gold from electronic scraps. Both methods have ample room for improvement, especially in respect to meeting ESG standards.
Pyrometallurgy burns off the gold using high temperatures. Not only is this method energy intensive, but it’s also not cost efficient and releases dioxins into the air.
Hydrometallurgy uses leaching chemicals such as cyanide solution or aqua regia (concentrated nitric acid and hydrochloric acid). According to Foley, this process is pricey and toxic; not to mention non-recyclable.
Like most things in today’s world, there is a pot of gold at the end of the rainbow everyone is trying to capture. Because mining precious metals and battery metals from e-waste is proving to be increasingly crucial to maintaining the well-being of the earth, more time, money, and effort is being invested in the well-needed revamp of current methods to continue synthetic mining.
We are sure that supporting the development of synthetic mining is an easier cheque to cut, considering the process of extracting and purifying metals from e-waste carries less speculative risk versus traditionally buying mining properties in hopes of hitting the jackpot.
For starters, a few early-movers such as Li Cycle are looking at a non-thermal process that can recover 95% of the metals in e-waste. Most other processes require the use of heat, which burns away the metals that are unwanted, leaving about half of the metals recovered.
The former process releases 1.8 tons of greenhouse gas for every battery produced, vastly outperforming the latter method which produces 6.8 tons for the same yield.
Where’s The Value in Synthetic Mining?
According to Benedette Cuffari of AZoNetwork, 1 million recycled cellphones can recover the following quantities of valuable metals.
- 16,000 kilograms of copper (US$152,640 worth)
- 350 kilograms of silver (US$260,050 worth)
- 34 kilograms of gold (US$1,940,618 worth)
- 15 kilograms of palladium (US$1,277,910 worth)
You can see why there is a high degree of motivation to give the synthetic mining process a big upheaval towards true efficiency and sustainability. If this industry can satisfy ESG requirements, it will truly prove to be an asymmetrical bet for resource fanatics, retail, and institutional investors alike.
Although psychology, the nature of the human experience, and the gold standard all account for part of why gold has historically always held its value; the facts remain grounded.
Gold is the least reactive of all metals, bringing it great industrial value. Although plenty of other inflation-resistant assets exist, gold remains the popular market leader for a safe bet for the preservation of wealth.
With the demand for gold unwavering, and the need for battery metals flying through the roof, we have our eyes on this intriguing industry that seems poised to disrupt the resource sector.
Until next time,
-Edge