Mineworx Technologies Ltd (TSX.V: MWX) has just revealed that it will move its pilot plant to its processing facility in Tennessee. This marks an important milestone for the company as it signals that all its tests have been successful. We are now waiting for the company’s commercial production to get underway in what will be the only plant of its type in the world.
People often think of “cleantech” only in terms of renewable energy sources like wind turbines or solar panels. But cleantech is much more than that. It can also refer to innovative new ways of mining, processing, or recycling with the aim of reducing greenhouse gas emissions as well as adverse land, water and air impacts.
For example, in the oil and natural gas industry, Cleantech can be anything from improvements in boiler technology (to save water and energy) to speeding up the rehabilitation of a forest through new planting techniques.
The many initiatives underway through Canada’s Oil Sands Innovation Alliance (COSIA) and the Carbon XPrize jointly sponsored by COSIA and NRG Energy in the U.S. are examples of ongoing work to develop and deliver cleantech innovations.
There are many more examples across the upstream resource industry of work being undertaken by individual corporations as well as by organizations such as the Clean Resource Innovation Network (CRIN), Petroleum Technology Alliance Canada (PTAC), the Natural Gas Innovation Fund offered through the Canadian Gas Association (CGA), the B.C. Oil and Gas Research and Innovation Society (BC OGRIS) and others from coast to coast.
In addition, Alberta Innovates Clean Energy program helps to fund and support a myriad of cleantech developments in the energy sector, from lower-carbon hydrocarbon production and innovative hydrocarbon products to renewable and alternative energy sources, land reclamation and biodiversity, and water innovations.
Metal recycling slow to catch on
In contrast to the oil and gas sector, the metal recycling business has been slow to move towards innovative and environmentally friendly technology. Most platinum and palladium from diesel catalytic converters, for instance, are still extracted at traditional smelters. These smelters are extremely difficult to convert and for obvious reasons have not been able to make the transition into a “cleaner” world fast enough.
Converting diesel catalysts is by no means a clean business, and smelters started getting a bad rap from environmentalists. The result: smelters are refusing to take in diesel catalytic converters. This has opened the gap for Mineworx and its new processing plant is a fantastic example of cleantech that aims to make the recycling of platinum and palladium more efficient and a lot more environmentally friendly. With ESGs top of mind for most investors, Mineworx is without a doubt onto something.
Not only that, but there is bound to be a great pile of spent diesel converters lying around with nowhere to go. And Mineworx and Davis Recycling plans to mop these up.
After gold and silver, platinum is the most traded precious metal. The market is massive. However, the platinum/palladium recycling business is often overlooked, despite the fact that it is a US$25-billion sector.
As the world desperately attempts to curb carbon emissions and the appetite to buy new cars returns after the Covid-19 hiatus, it is expected that demand for platinum and palladium in catalytic converters will continue rising.
Considering that a standard catalytic converter is made up of between 3 and7 grams of platinum/palladium (depending on the manufacturer and model), and that the world will continue purchasing vehicles according to more stringent emission standards (which requires more converters) there will be a sustained and consistent supply of spent converters in the future.
The multiple benefits of recycling metals
According to Greg Pendura, CEO of Mineworx, there will be mind boggling 27 million spent diesel catalytic converters per year only in the U.S. Even more outrageous is that only 3% of those converters will eventually be recycled. It means that there are unthinkable amounts of platinum and palladium locked up in these catalytic converters. Pendura says that close to 50% of the annual global platinum and palladium production is used in diesel catalytic converters. If you can, do the math, and try to figure out what Mineworx has stumbled upon. Moreover, the ability to be able to process these metals has multiple benefits.
Mineworx's big focus is thus assorted processing technologies based upon metal extraction. The company started off looking at reprocessing gold, which eventually evolved into the recycling of platinum and palladium. “Processing technology that will be able to extract precious metals like platinum and palladium in a cleantech environment will be well received on North American soil,” says Pendura.
Commercial production imminent
Mineworx is in the final stages of testing its pilot plant. The plant was recently moved to Mineworx’s partner Davis Recycling in Tennessee, where pre-commercial work on the pilot plant will begin. This will be the final stage for the design and development of the commercial plant and Pendura says they expect to be in full operation during the fourth quarter of 2021.
Right now, Mineworx is the only cleantech processing solution to recover platinum and palladium from spent diesel catalytic converters.
Once fully operational, it is expected that each plant will have the capacity to produce an estimated $100 million in revenue.
Environmental benefits front and center
Environmental benefits aside, the entire business model looks sound. Compared with physical mining, the operational costs in collecting and recycling platinum containing catalytic diesel converters are reduced substantially. The permitting process is a lot easier, while geopolitical and security risks are mitigated to a large extent. Most of the top platinum deposits are hosted in African countries, where political and regulatory instability are inextricably linked to a company’s risk profile. With rising input costs like labor, fuel, and electricity, it becomes costly to operate a platinum mine in a country like South Africa, for example.
With environmental concerns top of mind for investors today, it is telling that Mineworx has developed several solutions to soften the environmental impact of its extraction process. For one, the entire method is cyanide-free, and they use what they refer to as an eco-friendly grinding mill. In addition, the ore processing units are mobile, and use recycled water, which again reduces cost and lessens the environmental impact.
Without smelting, Mineworx (TSX:V: MWX) will produce a concentrate for upgrading at a refinery. The company expects that it will be able to process at least 10 tonnes per day. At current PGM [platinum group metal] prices this means that revenues per plant is estimated at over $100 million.
Lara Smith is the founder and managing director of Core Consultants. She has been an analyst for over fifteen years, starting her career as an equity analyst at Foord Asset Management and then as the lead analyst as for the Steinmetz Group, Group, where she was responsible for sourcing, analyzing and evaluating potential mining acquisitions in Africa and the Baltic regions.
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1) Lara Smith: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Mineworx.
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