Benign by design (or how to put ‘green’ into nickel mining)

Jon Steen Petersen, CEO and COO of Intex Resources ASA, is a soft-spoken man in an industry rippling with raised voices, especially when it comes to the subject of environmental impact.

Petersen, in an interview with Business Monday, says he prefers to let Intex’s Philippine venture speak for itself as a nickel mining project that could actually produce carbon credits.

The Danish geologist envisions the Oslo-based company’s Mindoro nickel project, which could become one of the world’s largest nickel mines, as a standard setter for what he calls the new generation in the mining industry.

It apparently took some 21 months of detailed studies and tests by international experts and their Philippine counterparts to design a unique, innovative process that Petersen says provides “the smallest carbon footprint of any existing nickel processing plant.”

The Mindoro nickel project is located in an area with limonite and saprolite nickel ore. Limonite ore appears on the ground surface as brown clay and tends to have iron as well as lower grade nickel.

Limonite ore can be processed through hydrometallurgy, a technology that extracts metal from ore using a liquid solution. In the case of limonite ore, Intex will use acid. Deeper into the ground is saprolite ore, which is basically weathered rock that is richer in nickel than the limonite above it. Miners traditionally extract saprolite separately and ship it overseas for smelting, a process that extracts metals through heating.

Intex’s plan is to mine both ore types in the order and ratio in which they occur in order to minimize stockpiles and rehandling. The unique process has been patented as it combines traditional hydrometallurgical processing of limonite ore alongside atmospheric leaching for saprolite, followed by saprolite neutralization before metals extraction.

The combination results in higher-grade nickel output plus three other products: chromite, cobalt, and ammonium sulfate fertilizer.

The mine plan is defined by natural drainage fields, in separate blocks, to minimize impact to local freshwater flow. The mining will be done over 100 hectares of land at a time (about five times smaller than the usual footprint).

The extraction will be followed by immediate rehabilitation and replanting as soon as mining moves to another 100-hectare area until the target areas in the 30-square-kilometer mine site are utilized.

Petersen says the locals are already undergoing training in tree farming even before mine development. Intex is also working with the University of the Philippines Tropical Rainforest Department to identify the species of trees and plants that were in the original rainforest before logging happened in the target site some 30 years ago.

What’s more, Petersen says, the low-energy hydrometallurgical processing of limonite avoids the use of fuel oil or coal since no smelting is required. The acid required for this process will be manufactured on site, using sulfur. Sea water is used for processing, which minimizes use of fresh water.

The water and the heat that escapes from the chemical reaction will be recycled into steam to drive the turbines on a 110-megawatt (MW) power generation plant.

Thus, without using heavy fuel oil or coal, the Mindoro nickel project can generate more than enough power for the operation. Petersen says the power generated can be shared with the rest of the province, which at present uses diesel-hungry generators located on barges.

The steam-based energy will also move a cable conveyor for ore haulage to avoid the use of diesel-powered machines. The cable conveyor will also minimize the use of trucks, further limiting carbon emission, with no traffic as a “bonus.”

The final part of the production cycle neutralizes the acid used in the process that was earlier used to leach nickel from limonite ore. Traditionally, limestone is used for this, but the carbonate liberates carbon dioxide and may have to be imported.

Intex’s innovative process uses the saprolite, which already exists on site, doing away with limestone importation. This further minimizes carbon footprint while adding more nickel to processing.

Lastly, the unique process will produce ammonium sulphate fertilizer as a byproduct, limiting sulphate in residue products and providing material for local agriculture.

“We are not banking on the carbon credits but we know that, being a uniquely low-carbon project, it could earn carbon credits, which would signal a new standard for the mining industry,” Petersen says.

As Intex continues to engage its host community and other stakeholders, he says, the company is considering putting up a small-scale module which would have an even smaller environmental impact that the full-blown, $2.5-billion Mindoro nickel project.

Beyond making the process “benign by design,” Petersen says that, as processing will be done locally, the project supports the Philippine government’s push for downstream industries. Even now, before the mine operates, Petersen says Intex has already put up potable water systems and started education and health programs. When operations go full blast, he says, the host communities will get the maximum benefit from the infrastructure, jobs, taxes, and royalties as mining and processing take place.

A beautiful plan, yes, but how to implement it within the politically charged, capital intensive Philippine mining industry is another story.

Petersen pauses upon hearing the comment, as if weighing his response.

Minerals are part of nature, Petersen says, as is the soil, wood, water, and everything else that man harnesses to live well. Humans must use these resources responsibly, he says.

“It’s true that many people are still haunted by the sins of the past, so to speak, but I believe there is no winner in an emotional argument on whether irresponsible mining is bad. We all agree that mining, when done irresponsibly, is bad. That is precisely why new, innovative solutions are in order,” Petersen says.

Finally, Petersen says, “Perhaps the carbon-free energy which we could share with the province, the by-product fertilizer, the infrastructure, the social programs, the taxes and royalties, and all other benefits of the project would speak more strongly than we ever could.”