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Visualizing the Size of Mine Tailings

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VCE Mine Tailings V2

Visualizing the Size of Mine Tailings

On January 25th, 2019, a 10-meter tall wave traveling 120 km/h, washed 10 million m3 of mining waste from the Brumadinho tailings dam over the Brazilian countryside killing somewhere between 270 and 320 people.

This was a manmade disaster, made from mining the materials we use daily. Every copper wire in your house, steel frame in an EV, or any modern appliance comes from mining.

Mining leaves behind waste in the form of tailings stored in dams or ponds around the world. This infographic takes a look at the estimated size of one part of this waste, tailings, visualized next to the skyline of New York City as a benchmark.

Quantifying Mining’s Material Impact

In the wake of the Brumadinho tailings failure, the International Council on Mining and Metals (ICMM) began a review with institutional investors and the United Nations Environment Programme (UNEP), to survey tailings facilities around the world.

The Global Tailings Review tracked a total of 1,743 unique facilities containing 44,540,000,000 m3 of tailings. This dataset represents only 30.2% of global commodity production.

However, the review estimated the total number of active, inactive, and closed facilities is around 8,500. If we use the assumptions for the 1,743 estimate to calculate for the 8,500 facilities, a total of 217,330,652,000 m3 of tailings are in storage globally.

What are Tailings?

Not all rock that comes out of the ground is metal. Miners find, remove, and refine rocks that carry a small amount of metal we need.

According to the USGS, 72 billion tonnes of material produced just over 10 billion tonnes of ore. Only 14% mined material makes it to processing for metals.

Waste rock (tonnes)Material Sent to Mill (tonnes)Ore Produced (tonnes)Tailings (tonnes)
72,000,000,00018,800,000,00010,180,000,0008,850,000,000

Tailings are what is left over after mills separate the metal from the mined rock. The processed material “tailings” comes from the “tail” end of a mining mill and comprise fine particles mixed with water forming a slurry. Mining companies will store this waste in dams or ponds.

Not All Minerals Are Equal: Tailings Contribution by Commodity

Not all minerals are equal in their contribution to tailings. The grade, quantity, and the process to extract the valuable metals affect each metal’s material impact.

Mineral% Contribution to Global Tailings
Copper46%
Gold21%
Iron9%
Coal8%
Phosphate4%
Lead and Zinc3%
Nickel2%
Platinum Group Elements1%
Bauxite1%
Uranium<1%
Chromium<1%
Molybdenum<1%
Tin<1%
Vanadium<1%
Manganese<1%
Niobium<1%
Rare Earths<1%
Lithium<1%
Other minerals1%
Total100%

A renewable future will be mineral intensive and will inevitably produce more mining waste, but growing awareness around mining’s true cost will force companies to minimize and make the most of their waste.

Turning a Liability into an Asset

While tailings are waste, they are not useless. Researchers know there remains economic value in tailings. Natural Resources Canada estimated that there is $10B in total metal value in Canadian gold mining waste.

Rio Tinto has produced borates from a mine in the Mojave Desert which has left behind more than 90 years’ worth of tailings. The company was probing the tailings for gold and discovered lithium at a concentration higher than other U.S. projects under development.

According to UBC’s Bradshaw Initiative for Minerals and Mining professor Greg Dipple, the mining industry could help society store carbon. For over a decade, he has researched a process in which tailings naturally draws CO₂ from the air and traps it in tailings.

A Material World

While the majority of mining companies manage tailing dams safely, the issue of the material impacts of mining on Earth remains.

Mining of metal has grown on average by 2.7% a year since the 1970s, and will continue to grow. The importance of the size of tailings is critical to address proactively, before it comes rushing through the front door, as it did in Brazil.

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Real Assets

Visualized: Real Interest Rates by Country

Currently, over half of the major economies have negative real interest rates.

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Visualized: Real Interest Rates of Major World Economies

Interest rates play a crucial role in the economy because they affect consumers, businesses, and investors alike.

They can have significant implications for people’s ability to access credit, manage debts, and buy more expensive goods such as cars and houses.

This graphic uses data from Infinity Asset Management to visualize the real interest rates (ex ante) of 40 major world economies, by subtracting projected inflation over the next 12 months from current nominal rates.

ℹ️ Ex ante is Latin for “before the event”, and in this case refers to the fact that this data uses projected inflation rates to calculate real interest rates.

Nominal Interest Rates vs. Real Interest Rates

Nominal interest rates refer to the rate at which money can be borrowed or lent at face value, without considering any other factors like inflation.

Meanwhile, the real interest rate is the nominal interest rate after taking into account inflation, reflecting the true cost of borrowing or lending. Real interest rates can fluctuate over time and are influenced by various factors such as inflation, central bank policies, and economic growth. They can also influence economic growth by affecting investment and consumption decisions.

According to the International Monetary Fund (IMF), since the mid-1980s, real interest rates across several advanced economies have declined steadily.

historical declining rates

As of March 2023, Brazil has the highest real interest rate among the 40 major economies shown in this dataset.

Below we look at Brazil’s situation, along with the data of the four other major economies with the highest real rates in the dataset:

Nominal Interest RateReal Interest Rate
🇧🇷 Brazil13.75%6.94%
🇲🇽 Mexico 11.00%6.05%
🇨🇱 Chile 11.25%
4.92%
🇵🇭 Philippines6.00%2.62%
🇮🇩 Indonesia 5.75%2.45%

In general, countries with high interest rates offer investors higher yields on their investments but also come with higher risks due to volatile economies and political instability.

Below are the five countries in the dataset with the lowest real rates:

Nominal Interest Rate Real Interest Rate
🇦🇷 Argentina78.00%-19.61%
🇳🇱 Netherlands3.50%-7.42%
🇨🇿 Czech Republic7.00%-7.17%
🇵🇱 Poland 6.75%-6.68%
🇧🇪 Belgium3.50%-6.42%

Hyperinflation, as seen in Argentina, can lead to anomalies in both real and nominal rates, causing problems for the country’s broader economy and financial system.

As you can see above, with a 78% nominal interest rate, Argentina’s real interest rates remain the lowest on the planet due to a staggering annual inflation rate of over 100%.

Interest Rate Outlook

Increasing inflation and tighter monetary policy have resulted in rapid increases in nominal interest rates recently in many countries.

However, IMF analysis suggests that recent increases could be temporary.

Central banks in advanced economies are likely to ease monetary policy and bring interest rates back to pre-pandemic levels when inflation is brought under control, according to the fund.

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Visualizing the Assets and Liabilities of U.S. Banks

Banks play a crucial role in the U.S. economy, and understanding their balance sheets can offer insight into why they sometimes fail.

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Zoomed in crop of a voronoi diagram of the assets and liabilities of U.S. banks

Understanding the Assets and Liabilities of U.S. Banks

The U.S. banking sector has more than 4,000 FDIC-insured banks that play a crucial role in the country’s economy by securely storing deposits and providing credit in the form of loans.

This infographic visualizes all of the deposits, loans, and other assets and liabilities that make up the collective balance sheet of U.S banks using data from the Federal Reserve.

With the spotlight on the banking sector after the collapses of Signature Bank, Silicon Valley Bank, and First Republic bank, understanding the assets and liabilities that make up banks’ balance sheets can give insight in how they operate and why they sometimes fail.

Assets: The Building Blocks of Banks’ Business

Assets are the foundation of a bank’s operations, serving as a base to provide loans and credit while also generating income.

A healthy asset portfolio with a mix of loans along with long-dated and short-dated securities is essential for a bank’s financial stability, especially since assets not marked to market may have a lower value than expected if liquidated early.

ℹ️ Mark-to-market means current market prices are being used to value an asset or liability on a balance sheet. If securities are not marked to market, their value could be different once liquidated.

As of Q4 2022, U.S. banks generated an average interest income of 4.54% on all assets.

Loans and Leases

Loans and leases are the primary income-generating assets for banks, making up 53% of the assets held by U.S. banks.

These include:

  • Real estate loans for residential and commercial properties (45% of all loans and leases)
  • Commercial and industrial loans for business operations (23% of all loans and leases)
  • Consumer loans for personal needs like credit cards and auto loans (15% of all loans and leases)
  • Various other kinds of credit (17% of all loans and leases)

Securities

Securities make up the next largest portion of U.S. banks’ assets (23%) at $5.2 trillion. Banks primarily invest in Treasury and agency securities, which are debt instruments issued by the U.S. government and its agencies.

These securities can be categorized into three types:

  • Held-to-maturity (HTM) securities, which are held until they mature and provide a stable income stream
  • Available-for-sale (AFS) securities, which can be sold before maturity
  • Trading securities, held for short-term trading to profit from price fluctuations

Along with Treasury and agency securities which make up the significant majority (80%) of U.S. banks’ securities, banks also invest in other securities which are non-government-issued debt instruments like corporate bonds, mortgage-backed securities, and asset-backed securities.

Cash Assets

Cash assets are a small but essential part of U.S. banks’ balance sheets, making up $3.1 trillion or 13% of all assets. Having enough cash assets ensures adequate liquidity needed to meet short-term obligations and regulatory requirements.

Cash assets include physical currency held in bank vaults, pending collections, and cash balances in accounts with other banks.

Liabilities: Banks’ Financial Obligations

Liabilities represent the obligations banks must fulfill, including customer deposits and borrowings. Careful management of liabilities is essential to maintain liquidity, manage risk, and ensure a bank’s overall solvency.

Deposits

Deposits make up the largest portion of banks’ liabilities as they represent the money that customers entrust to these institutions. It’s important to note that the FDIC insures deposit accounts up to $250,000 per depositor, per insured bank, for each type of account (like single accounts, joint accounts, and retirement accounts).

There are two primary types of deposits, large time deposits and other deposits. Large time deposits are defined by the FDIC as time deposits exceeding $100,000, while other deposits include checking accounts, savings accounts, and smaller time deposits.

U.S. banks had $17.18 trillion in overall deposits as of April 12th 2023, with other deposits accounting for 74% of the overall liabilities while large time deposits made up 9%.

Borrowings

After deposits, borrowings are the next largest liability on the balance sheet of U.S. banks, making up nearly 12% of all liabilities at $2.4 trillion.

These include short-term borrowings from other banks or financial institutions such as Federal Funds and repurchase agreements, along with long-term borrowings like subordinated debt which ranks below other loans and securities in the event of a default.

How Deposits, Rates, and Balance Sheets Affect Bank Failures

Just like any other business, banks have to balance their finances to remain solvent; however, successful banking also relies heavily on the trust of depositors.

While in other businesses an erosion of trust with customers might lead to breakdowns in future business deals and revenues, only in banking can a dissolution in customer trust swiftly turn into the immediate removal of deposits that backstop all revenue-generating opportunities.

Although recent bank collapses aren’t solely due to depositors withdrawing funds, bank runs have played a significant role. Most recently, in First Republic’s case, depositors pulled out more than $101 billion in Q1 of 2023, which would’ve been more than 50% of their total deposits, had some of America’s largest banks not injected $30 billion in deposits on March 16th.

It’s important to remember that the rapidly spreading fires of bank runs are initially sparked by poor asset management, which can sometimes be detected on banks’ balance sheets.

A combination of excessive investment in long-dated held-to-maturity securities, one of the fastest rate hiking cycles in recent history, and many depositors fearing for and moving their uninsured deposits of over $250,000 has resulted in the worst year ever for bank failures in terms of total assets.

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