The Mining Executive
"Global Mining Decisions In Your Palms"

Chasing Net ZERO: Mind the Reality Gap

“There is a desire in the world to decarbonize, but the reality is that to get there we need to produce more of the commodities in the next 10 to 20 years than we ever have,”

Dr. Dave Lawie, 

Chief Geoscientist, 


Between the idea and the reality falls the shadow; between the desire to decarbonize and the reality of achieving such an outcome is the shadow of supply shortages, declining ore grades, deeper and more expensive mining of the minerals and metals required.  

The Reality Gap is at the heart of the modern mining malaise, burdened by the weight of expectation to deliver, the wider lack of understanding of its central role in a net-zero future, and the fluctuating market and geopolitical realities that make investment decisions inherently dangerous. Inflationary pressures are now forcing up costs, leading to a slew of negative announcements on cost blow-outs, impairments and delays at the very time project certainty is required. 

Those at the heart of the mining sector have been skeptical for some time that metals and minerals such as nickel and copper can be found and mined in sufficient quantities to meet the demand of a low-carbon world. Supply questions also remain around critical minerals including lithium, manganese and cobalt, and rare earth elements as well as the diversity of their supply chains. The warnings are becoming louder and the potential Reality Gap more apparent. 

IMDEX Chief Geoscientist Dave Lawie has been one of those sounding the alarm for some time. 

“There is a desire in the world to decarbonize, but the reality is that to get there we need to produce more of the commodities in the next 10 to 20 years than we ever have. I really don’t think governments, investors, analysts and even some mining companies understand the extent of the problem.  Ivanhoe’s Robert Friedland has been sounding the alarm, but I wonder if anyone has been listening”, Dr Lawie said. 

In an interview with Bloomberg recently to discuss copper supply and demand Mr Friedland said: “We’re heading for a train wreck.” 

A recent report by consultants McKinsey, The Net Zero materials transition: Implications for global supply chains, said “it is crucial to ensure the timely scale-up of projects that have already been announced, which will require mining to accelerate beyond historical growth rates for many materials while simultaneously doubling down on exploration to ensure further scale-up of supply beyond 2030. Investments in mining, refining, and smelting will need to increase to approximately $3 trillion to $4 trillion by 2030.” 

The report concludes that “an assessment of supply–demand balances shows that most materials within the scope of this report would face a shortage by 2030 across all scenarios”. 

McKinsey assessed a range of materials including copper, lithium, cobalt, nickel, manganese, and graphite, and some rare earth elements. The International Energy Agency’s recently released Critical Minerals Market Review 2023, revealed a 30 per cent increase in investment in critical minerals development in 2022, following a 20 per cent increase in 2021. 

“A host of newly announced projects indicate that supply is catching up with countries’ clean energy ambitions, but the adequacy of future supply is far from assured,” the report said. 

On the downside, it said the supply chain continues to lack diversity, with China dominating processing of REE, graphite, lithium, cobalt and copper, and the extraction of graphite and REE.  From 2018 to 2021 Chinese investment to acquire lithium assets was twice that of the United States, Australia, and Canada combined. It is also investing in processing, refining and downstream facilities in other regions, often with an aim to secure strategic access to raw materials. Both reports agree that everything must go right for planned mining projects – no cost overruns, schedule delays, ESG challenges – for the looming supply-demand deficit to be addressed. 

Dr Lawie errs on the side of the Reality Gap rather than on the market responding to avoid a train wreck, and he is increasingly concerned about China’s continued and increasing dominance, and its propensity to embark on cartel-like behavior to protect its position. 

“Everything would need to go right to avoid shortages,” Dr Lawie said. “And we know from history that that is not the case. Supply-demand issues may have eased now, but issues will arise to throw that out of alignment, not the least of which is the extraordinarily long lead times between discovery and production and the ever-present threat of geopolitical instability. And now rising costs and the realities of finding and mining critical minerals, some with complex geology, are beginning to materialize. 

“The bad news is not confined to Australia; projects in other countries are reporting cost blowouts and impairments, which will dent investor confidence at a time when projects everywhere need access to capital”, he said. 

The challenges were another reminder that obtaining real-time, reliable ore body knowledge was critical. 

Dr. Lawie said, “Some of the recent impairments can be linked to ore body knowledge – or the lack of it. A write-down pushes future production further out, depresses Net Present Value and adds to the overall cost of production when it does start. Obtaining the best ore body knowledge as far upstream from the production process as possible at least gives resource companies a clear understanding of the challenges they face – and it could be the difference between an uneconomic or economic mine.”  

Dr Lawie has grave concerns for future copper supply, but he says nickel has the potential to face similar problems. 

“I don’t think the world quite gets the situation in Indonesia. In the blink of an eye, they are going to control most of the global nickel supply – and there are major environmental issues in the country,” he said. 

The IEA report says Indonesia is on track to control nearly 90 per cent of the world’s nickel refining projects by 2030.  There is another, largely unexplored, mining opportunity – the seabed. Proponents say it is a more sustainable way of mining the minerals needed to meet carbon reduction targets, while opponents warn of the potential for wide-spread and long-lasting environmental damage. 

“In some ways, the debate on deep-sea mining confirms the Reality Gap argument. If there were no concerns about supply/demand imbalance and the potential for us to meet future targets, would we even be having this discussion? At some point there is going to be an existential truth that the globe needs to face up to and that is are we prepared to destroy some parts of our planet to protect the remainder?”, he said.



IMDEX™ is a leading global Mining-Tech company, which enables successful and cost-effective operations from exploration to production. The ASX listed company develops cloud-connected sensors and drilling optimisation products to improve the process of identifying and extracting mineral resources for drilling contractors and resource companies globally. IMDEX’s unique end-to-end solutions for the mining value chain integrate its leading AMC™ and REFLEX™ brands. Together they enable clients to drill faster and smarter, obtain accurate subsurface data and receive critical information in real-time. 

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