What are the main operations that KPM is known for in the mining sector?
We are an integrated chemical process development company for new process development and existing process improvements - for example finding new ways to make high purity materials or to recover critical metals from recycled materials. We are integrated, in that we have to do capital and operating cost estimates and technical reviews to find the major process drivers and issues to help guide the lab and pilot work. So we are known for giving clarity to potential mining or processing projects, and helping guide the path forward. For example, we a lot of work in the recycling space, from Li-Cycle, a battery recycling company that we helped scale from two people to four plants and growing Cyclic Materials, rare earth recycling company that just raised $27 million to Jeosal, a fibreglass and carbon fibre recycling start-up in our KPM-Accelerator.
What is the overarching narrative of the current mining context and how are you envisioning its future ramifications?
It is important to understand where the money is. Except for Glencore, all of the big five mining companies are iron ore companies, but the development of critical materials, like graphite, rare earths, and lithium, relate more to the downstream processing context rather than to the mining one. However, mining companies are at the front end and they are often guiding the process all the way through a mining mentality. Across this green transition, we are moving from a mining story to a processing story, similarly to how the automotive industry is shifting from the ICE mechanical engineering world to a software electrical engineering platform. All across these changes, some of the big players are having a difficult time adapting their business practices to the new reality. While the political side is seeing the importance of mining, they seem to overlook the processing, and this one-sided vision can lead to failures, like was the case with two lithium Quebec based ventures that were closed before they came to fruition. Processing is a difficult and heterogenous operation and although we are trying to westernize the entire production, we are going to bump into many obstacles due to costs, ESG factors, and energy aspects.
In this abrasive context, what main challenges are you expecting you would need to address in the years to come?
Thirty years ago, when I started in this industry, in Canada there were around 1,000 corporate researchers, but today there remain probably fewer than 100. By the same token, there are fewer on-site process engineers and, on top of that, the abundance of startups leads to hoovering up talent and locking them in for one-time-only projects, thus widening the workforce gap. Considering all these, we tend to be cautious when selecting projects, and we can be even deemed techno skeptic to an extent, given that we are wary about new technologies and their potential commercial success. Because projects can get to demonstration level without all the economic and energy constraints, among others, being properly incorporated, we see how downstream processes can get ahead of themselves. Another challenge is that these new processes require a lot of multidisciplinary expertise and this is not always available to companies at a high experience level.
The processing seems to be the fulcrum of graphite mining. What role does this play in the future of the green transition?
Graphite needs to have a high degree of purity to be considered useful for battery applications and trying to completely onshore its processing would imply a multitude of steps. Trying to approach this from the mine side up requires the input of various players and, at this point in time, it is extremely difficult to create a localized supply chain.
The types of graphite are also quite varied and respond differently to processing. But domestic production of graphite is complicated, and the methods used in Asia are not really transferrable to the west. So processing of graphite needs to be “Westernized” to some extent without bearing too much risk in the processing.
Rare earth separation companies need feed but if nobody is leeching and purifying, they cannot have a business. Besides these, there is a non-linear drop in grades, and as you drop down linearly, the costs go up exponentially. Unfortunately, there are fewer and fewer metal discoveries, so, besides the usual supply chain shortages, we now have to take on downstream processing hardships as well.
What are some of the main questions that keep you up at night and their potential solutions?
I am mostly concerned about finding some feasible ways to kickstart this complicated supply Chain over a number of critical materials, that could be either approached from a piecemeal perspective or from a recycling point of view. For instance, we are involved in a rare earth magnet recycling project that will come in at a level that is not reliant on the mine side, being able to back fill the demand. The extent to which governments are involved in the mining sector and the different countries' strengths are also my food for thought as of late, as I am especially interested about the relation between the mining sites and the processing plants. Do they need to rely on close domestic supplies? Again, any break in a domestic supply chain makes the effort difficult to sustain and really eliminates the advantages. However, tackling these problems always makes for an interesting and demanding day at work.
