2019-09-02 Bloomberg Businessweek

Bloomberg Businessweek

/

SEPTEMBER

2,

2019

THE

ELEMENTS

38

◼ Cobalt $32.12 / kg London MetalExchange cashspot ◼ Nickel $15.88 / kg London MetalExchange cashspot ◼ Copper $5.68/ kg London MetalExchange cashspot ◼ Zinc $2.22/ kg London MetalExchange cashspot generals,and fromwarlords.” The IslamicStategroupandtheTalibanare estimatedtomakemillionsofdollarsa yearfromsubstancessuchaschromium andtalc,whilewarlordshaveseizedlapis lazuliminesandotherresources. Nehan’simmediateprioritiesincluded sortingoutwhichmining operations werelegitimatebusinessesandexpe- ditinglicensesforthem.She’soptimis- ticthat,eventhoughthegovernment doesn’tcontrollargeswathsofthecoun- try,securityforcescandealwiththewar- lordsandmilitants.“Wearegoingtohave operations,andwe’regoingtocleanup thoseareas,”shesays. It willbeatleastaschallengingtoget large-scaleprojectsunderway.Twohuge concessions,atHajigakandMesAynak (whichhasanestimated 690 million tonsofcopperore),wereawardedby thepreviousadministrationtoanIndian consortium andChina Metallurgical GroupCorp.,respectively.Manyobserv- erssuspectedthebidswereunrealis- tic,morerelatedtoIndia’sandChina’s playsforregionalinfluence.Theterms lookedgenerous—theChinesecompany promiseda powerstationanda trans- Himalayan railway—but had caveats that made backing out easy. “Yes, we will build a railway, but only if the feasibility study says to go ahead,” Nehan says. “The feasibility study came and said none of them were feasible. So was it a good deal for the country? No.” A decade or so later, Hajigak remains almost untouched, while Mes Aynak has stalled

initspreparatoryphase,inpartover archaeologicalconcerns.Nehanhopes toresolvethoseissuesthisyearandsays she’spressuringtheIndianconsortium toresumenegotiationsunderthreatof cancelingthetender.(ChinaMetallurgical andtheSteelAuthorityofIndia,leaderof theIndianconsortium,didn’trespondto emailedrequestsforcomment.) ContractssignedunderGhanihave alsoprovedcontroversial.Inlate 2018 the governmentgavetwohigh-profile deals, for gold and copper, to U.S.-based Centar Ltd. But Centar’s local partner, Sadat Naderi, had been minister of urban development and housing until earlier in the year, and Afghan law forbids the government from signing contracts with former ministers for five years after their ser- vice. “Our first position was that it’s ille- gal,” Timory says. “The second was that Afghanistan was not ready, in terms of state capacity, to award large contracts.” He acknowledges that, with President Trump threatening to withdraw U.S. troops, Ghani’s administration needed to show the potential benefits of remain- ing engaged. Timory surmises that the pressure on Nehan, one of several cab- inet members involved in the bidding, was overwhelming. “I think she tried, she was genuine,” he says. “At a certain point in time, she had to go along.” The government has argued that, because an earlier version of the contract was approved in 2012, before Naderi became a minister, it didn’t run afoul ofthefive-year rule. And Nehan says

Naderi’s resignation meant there was no conflict of interest. “He had zero influ- ence over the process,” she says, calling Integrity Watch’s criticism “very unfair.” (Centar has said the contract was nego- tiated “in strict adherence to Afghan law and international standards.”) Nehan acknowledges her country is a difficult sell to foreign investors but expresses hope for the generation of Afghans who made fortunes from the international contracts flowing in since

These people, she says, are looking
to diversify their investments. She cites
several recently approved projects in
the eight- to nine-figure range for things
such as cement and talc plants. “It’s just
important that wegothrougha transpar-
ent process,” she says,“andgivethemthe
confidence that oursystem is fair.”

28 Ni Nickel

ABUNDANCE MININGPRACTICES RECYCLING& REUSE

ETHICAL BATTERIES: THE SUBSTITUTE USED IN: Lithium-ion battery cathodes. WHAT IT DOES: Boosts energy density to help electric vehicles travel faster and farther while also allowing battery makers to reduce their dependence on cobalt.

ACHILLES’ HEEL: Unproven production processes. If miners in Indonesia are unable to bring a steady supply of cheap, battery-grade nickel into production, the market will likely face a severe shortage, which could lead to a dearth of high-nickel batteries broadly believed to be the future of EVs.

29 Cu Copper

ETHICAL BATTERIES: THE SAFE BET USED IN: Electrical wiring in electric vehicle engines, charging stations, and cables. WHAT IT DOES: Copper is the most conductive metal after silver and about one-hundredth of the price.

ACHILLES’ HEEL: People who insist climate changeisn’treal.If theEVrevolutionproceeds apace,copperwillbeneededforwhichever typesofbatterieswinout.Electricvehicles require about 80% more copper than fossil fuel- burning cars.

30 Zn Zinc

ETHICAL BATTERIES: THE WILD CARD USED IN: Zinc-air batteries for renewable energy installations and maybe EVs. WHAT IT DOES: It’s used in the battery anode and reacts with air during the discharging process, yielding power.

ACHILLES’ HEEL: Investment. Billions of dollars continue to pour into the development of lithium- ion batteries, and advances in the incumbent technology are still coming hard and fast. If zinc-air batteries are going to take market share, they’ll need to prove themselves with far less money behind them.

27 Co Cobalt

ETHICAL BATTERIES: THE MORAL PROBLEM USED IN: Lithium-ion batteries as part of the battery cathode. WHAT IT DOES: Helps the battery maintain its structure and keeps it cool during charging and discharging.

ACHILLES’HEEL:Congo,theworld’stopproducer, bringswithitscobalta raftofsocialand environmentalconcernsgiventheterrible, toxic conditions for mine workers, including children as young as 4. Related fatalities are rising; the industry has few answers.

2019-09-02 Bloomberg Businessweek

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