What does Canada need to do today to ensure that it has a sustainable nickel industry 100 years from now?
By Patrick Whiteway
Happy 144th birthday Canada. Here's a few things government can and should do to improve the nation's chances of profiting from its vast nickel resource potential well into the future:
- Prepare for the inevitable low-carbon economy by building more hydro-electric capacity and greater interconnectedness between provincial electricity grids (develop a national energy policy);
- Encourage mineral exploration companies to invest in grassroots nickel exploration that will find the next 100 years of reserves;
- Impose World Trade Organization-proof export restrictions (quotas and duties) on the export of nickel concentrates to countries that have higher greenhouse gas emissions than does Canada when those concentrates are processed; and
- Become a major producer of the 'greenest' stainless steel on the planet by creating the economic and regulatory conditions for the makers of nickel alloys and stainless steels to set up shop in Canada over the next 10 years.
Are the world's nickel producers major emitters of greenhouse gases today? For nickel pig iron (NPI) producers in China the answer is yes, but for nickel sulphide producers in Canada (in the provinces of Manitoba, Newfoundland & Labrador, Quebec and Ontario) the answer is a resounding no.
In 2006, greenhouse gas emissions worldwide totaled 51 giga tonnes (Gt). Lumping nickel producers together with the steel, copper and aluminum industries, these accounted for 2.62 giga tonnes, or about 5.2% of total greenhouse gas emissions.
Breaking it down:
The metals industry is an energy-intensive enterprise. As a result, significant amounts of greenhouse gases are emitted in the process of mining, concentrating, smelting and refining metals.
The steel industry emitted 2,250 megatonnes (Mt) of carbon dioxide equivalent in 2006, while the copper, aluminum and nickel industries emitted much less (see table below).
Nickel is by far the best actor of the four and could do even better if production were to shift to jurisdictions that have plentiful sources of renewable energy such as Canada.
The intensity of greenhouse gases emitted by the world's primary nickel producers varies widely. They range from a low of six tonnes of carbon dioxide per tonne of nickel produced to a high to 110.
The intensity of emissions in 2006 by country is illustrated in the graph below. It shows that four countries: Canada, Finland, Russia, Norway and Columbia are in the lowest two quartiles of greenhouse gas emitters among nickel producers.
That means (theoretically) that if demand for primary nickel were to fall by half, demand could then be satisfied by producers that emit less than 20 tonnes of carbon dioxide per tonne of nickel produced. In other words, the atmosphere would be spared the thousands of tonnes of carbon dioxide that are presently emitted every year by the other producers.
Why are Canada, Finland and Russia such great places to produce primary nickel?
The following table provides an explanation.
You'll see that the energy used to mine, concentrate, smelt and refine nickel in Canada is generated mainly by facilities that are fueled by natural gas, coal, petroleum and nuclear. The energy used in China, in contrast, comes mainly from high-carbon-emitting coal.
Viewed in a different way, greenhouse gas emissions from primary nickel production actitivity is lowest among sulphide nickel producers and highest among laterite nickel producers.
If the G20 nations were to set binding targets for greenhouse gas emission reductions, what impact would a carbon tax have on nickel producers? The answer depends on the level of such a tax. If it were to be US$50 per tonne of carbon dioxide emitted, then about 120,000 tonnes of nickel production would become uneconomic (at prices of US$7.50 per pound).
So, Canada has a great opportunity to use its natural advantages to become a sustainable producer of nickel over the long term. And, if those same advantages can be used to encourage the users of nickel (primarily the makers of stainless steel), then this country could become the 'greenest' producer of stainles steel on the planet.
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