The price of gold sharply declined this week, settling just above the $1,900 per troy ounce mark. This is nearly 7% lower than the historical highs recorded in early August.
According to most experts, the wave of sell-offs sweeping the market is more of a correction after an overly rapid surge rather than the beginning of a downward trend. Despite Russia’s development of a COVID-19 vaccine, the timeline for global economic recovery from the current crisis may be longer than initially anticipated. This uncertainty in forecasts will likely support renewed demand for gold, including physical gold, which, in turn, may drive prices back up.
Is it possible to increase gold production? Or are we facing a metal shortage and, consequently, a rapid rise in its value?
"In reality, more than a quarter of all gold in the world is now produced by extracting it from discarded electronics and other waste. Last year, according to WGC data, recycling companies supplied 1,304 tons of gold to the market—an 11% increase from 2018 (while traditional mining accounted for 3,463 tons). Despite these impressive figures, Russia has hardly engaged in this practice on an industrial scale, even though the complete processing of electronic waste is crucial for improving the environmental situation in cities and on the planet as a whole. This issue is especially relevant today, given the shift in technological paradigms toward environmental sustainability and sustainable development goals," says Dmitry Sidorov, a student at the Mining University..
He is part of the "Miners" team from the St. Petersburg university, which shared first place with representatives from MISIS in the case competition "Mineral Resources: More Than Just Raw Materials from the Subsoil." The event was organized by the International Center for Competence in Mining Engineering Education under the auspices of UNESCO, in collaboration with the Institute of Materials, Minerals, and Mining (IOM3, UK).
Eight teams participated in the final stage of the tournament. They were tasked with determining the amount of gold that could be extracted from electronic waste found in St. Petersburg’s landfills and calculating its value in British pounds. The next step required them to estimate the necessary investment for organizing a collection process for this technogenic waste, as well as setting up a facility for extracting precious metals. The teams were given two weeks to prepare their solutions and presentations, followed by the competition itself, which was conducted remotely.
"It turned out that selling the extracted gold and other precious metals from electronic waste allows for a surprisingly quick return on investment in equipment and generates substantial long-term profits. Thus, our enterprise would simultaneously free the ecosystem from hazardous waste while benefiting from its environmental protection activities. Additionally, there is an opportunity to act as a supplier of other raw materials found in the scrap—ranging from ferrous metals to various plastics. Therefore, we considered it logical and appropriate to allocate more funds to purify the accompanying materials for their subsequent sale," said Artur Lyubin from Oilteam of Ugra (Ugra University), which secured second place.
The city on the Neva produces about 400,000 tons of electronic waste per year. This is an excellent source of metals such as gold, copper, aluminum, and several others, but only 5-10% of this volume is actually recycled. Among the factors contributing to this situation are the need to purchase specialized high-precision equipment, a shortage of skilled professionals capable of operating it, the heterogeneous nature of waste in terms of hazard classification and size, and several other challenges. However, as representatives from MISIS believe, all investments will undoubtedly pay off.
"We studied the logistical, technological, and economic aspects of the project. The capacity of our production facility, hypothetically located in Kovalëvo, is 40,000 tons per year, meaning its daily raw material requirement is 161 tons. Therefore, to ensure timely delivery of materials to the plant, 30 collection points need to be established, each with a daily processing capacity of 5.37 tons per point," explained the team captain from Moscow, Mikhail Belokrys.
The MISIS students not only presented a detailed technological blueprint covering all stages of production but also calculated the costs required for both its establishment and ongoing operations. The projected profit margin is known as well—ranging from 10 to 12.9% annually. The presentation is so meticulously detailed that it resembles a serious techno-economic feasibility study rather than just a case competition entry.
According to Ian Bowbrick, Director of the Qualification Assessment Department at the British Institute IOM3—one of the three experts evaluating the quality of the presented ideas—"all participants of the competition carried out extensive preparatory work, managed to demonstrate the practical significance of recycling, and provided technically sound justifications for their proposals." However, "the financial models presented by the teams from Saint Petersburg Mining University and MISIS stood out in terms of quality, which ultimately secured their victory."
"The case competition made Russian students realize that it is not always necessary to travel thousands of kilometers to obtain such a valuable material as gold. It also prompted them to consider the business potential that such an untapped resource can offer. Overall, all teams approached the task methodically and demonstrated the level of thinking expected from a professional mining engineer. It would be interesting to see how they present their proposals to each other face-to-face in front of a jury and audience, and perhaps this will happen next time once all restrictions are lifted," noted Ian Bowbrick.
He also announced that in September, a similar competition would be organized for students from the United Kingdom. The winners, like their Russian counterparts, will participate in the case tournament, which will be held as part of the IV Russian-British Raw Materials Dialogue in October. Due to the COVID-19 pandemic, the event will take place in a remote format.
На фото: Октябрь 2019 года. Санкт-Петербург. III Российско-Британский сырьевой диалог