Lack of reliable, affordable electricity is crippling metal production worldwide
A recent article in Reuters said it best: power, meaning electricity, is the Achilles heel of all industrial production plants, and all metals are to some extent impacted by the lack of reliable, affordable electricity affecting Europe and China.
The article states:
Europe’s power crunch is taking a rising toll on the region’s industrial metals sector, with two more smelters this week announcing plans to halt operations.
Nyrstar will place its Budel zinc smelter in the Netherlands on care and maintenance from the start of September until further notice, while Norsk Hydro will fully power down its Slovalco aluminum smelter in Slovakia by the end of the same month.
More closures will likely follow. Smelting raw materials into refined metal is an energy-intensive process and Europe’s power crisis shows no signs of abating and may indeed get worse heading into winter.
It’s hot summer weather that’s the problem for smelters right now in China though. Drought in Sichuan province has led to power rationing, forcing metals processing plants to curtail output. Lithium operators are included, a warning that the energy transition metals are themselves dependent on existing power availability.
Getting sufficient quantities of minerals out of the ground to meet green demand is challenging enough. Getting enough power to process them into refined metal is now fast emerging as a big new problem for supply.
American Experiment has stressed the importance of having massive quantities of reliable, affordable energy for Minnesota’s mining industry for years. We warned that bad energy policies designed to increase our reliance on wind and solar power would undermine the ability of these facilities to operate.
The regional electric grid that Minnesota belongs to is already experiencing a capacity shortfall, and our iron mines will be forced to shut down operations more frequently in the future if the shortfall gets larger. In order to have a strong mining industry, we need a strong electric grid.
Europe is a mess because it has become far too reliant upon unreliable wind and solar, and it has banned the use of hydraulic fracturing to produce its own oil and natural gas. Europe is an example of what not to do. Unfortunately, many liberal lawmakers in Minnesota have yet to get the memo.