MARI : Industry-Leading Low-Carbon Emissions, thoughts ... Hi all,
From the same connect. Interesting topic.
Best,
B
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Hello,
Earlier this month, on Thursday 4 November, Marimaca released an announcement titled "Marimaca Targeting Industry-Leading Low-Emissions". For the full announcement
Click Here.
I just a few thoughts on this news :
- A very real issue, industry wide - within a relatively short period of time the world has changed dramatically. Where once you could have been forgiven as seeing such announcements as virtue signalling, or worse green-washing ... the reality now is that the issue of carbon emissions is an inescapable part of the industry. It is worth noting that we have already seen most of the major western mining groups announce targets to meaningfully reduce their emissions (BHP, RIO, VALE). I firmly believe that the focus around this subject is only just beginning, and it will inevitably percolate down into the mid cap and junior markets.
- Marimaca Project, industry leading low-emissions - summary of the news : a recent study by consultancy firm Wood Mackenzie has shown the Marimaca Project to be placed in the lowest 10% of projects globally for expected carbon intensity per tonne of refined copper produced. There are several reasons for the standout result, but they are all very easy to understand - 1) The Atacama Desert (where Marimaca is located) has one of the highest levels of solar irradiance in the world. This has led to an abundance of cheap solar energy being supplied to the grid. Marimaca has been assured that they will be able to source 100% renewable energy from the national grid of northern Chile. 2) As discussed before, location. Marimaca is 40km from the main industrial port of Mejillones. Easier and shorter logistic chains equal lower emissions. 3) Also as discussed, Marimaca's processing route is via SX-EW (solvent extraction and electrowinning). The SX-EW processing route is "on average, approximately 38% less carbon intensive per tonne of refined copper, when compared to the traditional route" of smelting and refining concentrates. All of these factors have led to the Marimaca Project having a very low-carbon footprint. An extremely enviable position.
- McKinsey report on carbon in mining - as mentioned above, carbon emissions are now very much an industry wide issue. I must admit that I haven't found very much high quality commentary on the subject ... but a friend did recently forward me a very interesting report from McKinsey. They look at the issue from several different angles - covering mining's current carbon footprint, outlining the main contributors, and also how emission could be reduced. Some good analysis. Well worth a read. For the full McKinsey report Click Here.
Summary of thoughts - the issue of carbon emissions within the mining industry will only build in significance. Ultimately, I personally believe low-carbon intensity units of copper production will trade at a meaningful premium to their peers. I believe they will also attract a lower cost of capital. Marimaca Copper has already clearly shown how their project is peer-group leading from an economic return standpoint. They are now underway in demonstrating how their project is also industry leading from the point of view of carbon emissions.