Mining Magazine September 2014

The mining industry’s leading magazine

Established

1909

Tyres

The end of the tyre shortage, why prices have dropped and how to get more for your money through the downturn

Process control

Choose the right level of automation for your processing facility, retrofit with confidence and avoid data overload

Pit to port

How to streamline ore transport and increase throughput across the value chain

Shovels & loaders

Optimise maintenance, select the right lubricants and learn about the latest in machine interfaces

MINING TIRE GROUP ISSN 0308-6631 CovIMM1409.indd 1

September 2014

www.miningmagazine.com 15/08/2014 08:55

CUT COSTS ON EVERY METER DRILLED. THIS WAY! Imagine if your drill rods and tubes for bench drilling lasted more than 30 percent longer.

You would drill more meters on every shift and reduce your cost per meter, increasing profit.

The new Sandvik +Range rods feature the company’s unique steel alloy, which is much more resistant to heat and wear. The alloy is designed to extend service life, requiring fewer rod changes while improving safety and reducing stock and handling costs.

The new +Range offering, which includes T38+, T45+, T51+ and GT60+, is compatible with standard drilling products.

Join the movement toward The Future of Mining.

It’s This Way: mining.sandvik.com

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CONTENTS

1

Finger pointing

N

early two weeks on from the colossal tailings spillage at Imperial Metals’ Mount Polley copper-gold mine in British Columbia, the full scale of the damage is starting to become clear. On the morning of August 4, the 16km2 tailings pond dam at the mine was breached and released 10 million cubic metres of water and 4.5 million cubic metres of fine sand into Polley Lake, Hazletine Creek and Quesnel Lake.

At the time of press, the flow had been decreased but not completely stopped, and Imperial had begun building a horseshoe-shaped temporary dyke inside the breach to stop flow out of the pond.

However, this was expected to take three weeks to complete.

News

2

A breach on this scale is extremely rare and officials with the British Columbia Ministry of Energy and Mines said that they do not recall anything of this magnitude in at least the past 40 years. British Columbia imposes some of the strictest environmental regulations in the world on mining companies, but it seems that Imperial may have become a little laissez faire with its housekeeping.

Features Mine of the month: Usolskiy

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Following reports of a previous breach at the mine, Ministry of Energy and Mines officials investigated an incident on May 24. This was determined to be a “period where the height of the effluent within the tailings pond was above regulation” and not a breach at all. The tailings were “A good reputation returned to within regulated levels by June 30, but if the height was great enough to be affected by a minor surge, surely closer is better than much monitoring should have been in place?

Interview: Rio Tinto

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Shovels & loaders

18

Process design

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Snapshot

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Ore-grade control

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Tyres

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Even more unusually, just days after the tailings spillage, engineering firm Knight Piésold went on record to talk about the disaster. The firm issued a fairly damning statement on August 8, saying that as the former engineer of record at the facility it felt it needed to clarify its position.

wealth; high esteem is better than silver and gold”

To cut a long story short, in February 2011, Knight Piésold informed Imperial Metals that it would not continue with the project, and it handed over design, construction and monitoring responsibilities to AMEC. The original engineering done by the firm accommodated a lower water volume than the tailings storage facility held at the time of the breach, and Knight Piésold felt that considerable design changes had been made since its involvement.

On completing its work at Mount Polley, the firm wrote to the mining company and British Columbia’s Chief Inspector of Mines to flag that “the embankments and the overall tailings impoundment are getting large and it is extremely important that they be monitored, constructed and operated properly to prevent problems in the future”. The letter is available on the Knight Piésold website for those interested.

When we contacted AMEC to ask about its involvement, the company gave the following statement: “The performance and stability of a dam is dependent on many factors including design, construction, operation and maintenance as well as the potential for unforeseen conditions.

“While AMEC serves as the engineer of record on the most recent raising of the dam, implementation of the design has not been completed and some construction activity was still taking place.

Investigations at or near the breach are currently prohibited due to safety concerns and we are awaiting the results of field surveys to determine the status of dam construction at the time of the breach.”

The incident will most certainly entail a fine for Imperial and the environmental impacts will be felt for many years. However, Knight Piésold’s reaction reminds us that there is more at stake here than meets the eye. As an old proverb says, “a good reputation is better than much wealth; high esteem is better than silver and gold”.

CARLY LEONIDA, EDITOR carly.leonida@mining-magazine.com

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Special report: acid mine drainage

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Pit to port

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Flashback & contacts

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Classified advertising

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Next month Underground development Solvent extraction & electrowinning Physical separation Engines & drives Surface miners

COVER Kal Tire’s objectives remain simple: with the constant change in commodity prices, miners must strive to maximise the full potential of the equipment they operate, including the tyres that ultimately carry the load. Kal Tire helps customers maximise the value of their tyre investment and increase their productivity by providing a fully outsourced solution including tyre supply, forecasting, management, fitting, tooling and innovative tyre monitoring system solutions, along with 24-hour service and training. www.kaltire.com

Twitter: @MM_Ed_Carly

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NEWS

Wenco nets Maules Creek FMS contract Wenco International Mining Systems has won a contract to provide the fleet-management system (FMS) for Whitehaven Coal’s Maules Creek project in New South Wales, Australia. The project, under construction, broke ground in January.

The Wencomine FMS will be installed on all vehicles at Maules Creek to provide real-time data about operations and maintenance, letting staff boost the productivity and reliability of their equipment.

The project will also use Wenco’s Maintenance Monitor, MobileST and other dispatching applications, along with the BenchManager high-precision dozer and shovel system.

One of the last major undeveloped coal deposits in the region, the project is authorised to extract up to 13Mt/y of coal.

Maules Creek

Ok Tedi extends deal with Wipro Ok Tedi Mining (OTML), a state-owned copper- and gold-mining company in Papua New Guinea, has extended its strategic partnership with Wipro, a global information technology, consulting and business-process services company.

OTML and Wipro have teamed up to improve business processes using advanced technologies.

OTML is establishing a new framework that embraces the role of technology – a new set of capabilities within the organisation to successfully use best practices and systems. It will also streamline the organisation’s operations across the entire value chain, eliminating waste and maximising shareholder returns.

SNC-Lavalin’s inclusive processing plant SNC-Lavalin is now offering an all-inclusive modular mineralprocess plants (MMPP) solution that is designed to help exploration operations transition into full-fledged revenue-earning mining companies within 12 months.

The company stated that this will bring significant benefit to clients who currently lack the investment necessary to establish large-scale operations.

SNC-Lavalin’s modularisation specialists design, fabricate, trial-erect and cold-commission the

How the MMPP might look plant. Next, it is partially dismantled and sent to the client’s site, together with all the other components needed to establish an operational mine.

G4S to provide housing facilities for African mines G4S has announced that it will be able to build, run, manage and maintain accommodation villages for employees working in remote sites, supporting its energy, mining and construction customers throughout Africa.

G4S’ remote site facilities services (RSFS) will be supported by a team of experts who will design and build camps. They will also provide a wide range of facilities-management services including catering, cleaning, maintenance, medical services, recreational activities and waste management.

The intention is to create a ‘home away from home’ for

people working in isolated, high-risk locations who often spend long periods of time away from their own homes.

The company aims to create these villages to ensure the comfort of its customers’ working and living environments.

G4S will be able to develop camps ranging in size from small 10-person seismic or drilling exploration camps to large construction projects of 15,000 staff or more.

As part of the move, G4S has trained dedicated experts across Africa who will lead on the development of RSFS and focus on supporting customers.

RPM moves into mine-design software RungePincockMinarco (RPM) has finalised the acquisition of a non-exclusive right to MineRP’s Mine2-4D design-software code.

This right will allow RPM to develop its own mine-design products and offer integrated design capability with its scheduling and simulation products.

Under the terms of the acquisition, RPM has acquired unrestricted rights to rebrand, commercialise and exploit the software code and any successor products developed by MineRP. The Mine2-4D design product

recently underwent a complete rewrite, using next-generation development tools to allow excellent levels of enterprise integration and processing capability.

RPM has historically provided export/import functionality for design tools of multiple thirdparty vendors, which allows feedback between the design and scheduling processes, and it will continue to do so.

The first release of the new RPM design product is planned for the June 2015 quarter, the company said.

Much of the plant is designed to rest on well-compacted ground, but where additional stability is required, the MMPP team has designed a series of pre-cast planks that interlock and can be manufactured as close as possible to the site, concurrent with the fabrication of the plant.

This allows sufficient time for the planks to cure and reach full strength by the time plant erection begins, reducing the time-consuming nature of constructing civil works.

Although the MMPP concept is particularly appropriate for gold ores, it also suits almost any commodity that can be upgraded using gravity-concentration techniques.

SLR and Wolf secure permit for UK tungsten site SLR Consulting has helped Wolf Minerals to secure a revised planning approval for a US$126.2 million processing facility at its Drakelands tungsten mine near Plymouth, UK. The planning application included the preparation of a full environmental impact assessment.

Situated on the third-largest tungsten resource in the world, the plant will produce up to 5,000t/y of tungsten concentrate and 1,000t/y of tin concentrate on completion.

SLR has worked closely with Wolf Minerals throughout the development of the mine, providing a wide range of multi-disciplinary consultancy services.

Along with planning and environmental permitting support, SLR developed a materials management plan for the excavation work, a construction environmental management plan and a compliance-monitoring tool.

Artist’s impression of the Drakelands tungsten mine

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In Brief ABB kits out Kiruna ABB will supply a new mine hoist to LKAB’s Kiruna mine in Sweden. The contract includes installing the new hoist, as well as the option to modernise the seven existing hoists in the CA hoisting plant within the coming eight to ten years. The initial delivery includes mechanical equipment, electrical and control equipment, construction, electrical installation, site management and commissioning.

Allmand changes hands Briggs & Stratton Corp is to acquire US-based industriallighting specialist Allmand Bros. Allmand has sales of approximately US$80 million.

Briggs & Stratton will acquire all outstanding shares for US$62 million in cash. The transaction is expected to close in mid- September.

Breathing gear certified Avon Protection’s closed-circuit escape breathing device (EEBD) has been approved under the new NIOSH standard 42CFR84 Subpart O. It is the first company to receive a product approval under this standard.

New conveyor skirt Martin Engineering has launched the Martin Self Adjusting Skirting, which prevents spillage and equipment breakdown caused by fugitive material on conveyor belts. The unit self-adjusts to rubber skirt wear, regardless of material volume and size diversity, allowing it to be an adaptable solution for an entire bulk-material processing system across many different industries.

Geoforce joins Terex Terex Trucks has appointed Geoforce Trading and Services Corp as the official distributor for its articulated and rigid haulers in the Philippines.

Headquartered in Makati, Geoforce also has two regional offices in Manila and Surigao del Norte.

Maptek previews its I-Site modular laser scanner system Maptek previewed its new I-Site 8820 long-range laser scanner on the first day of the Australian Institute of Mine Surveyors (AIMS) conference in Sydney, Australia.

Compared with a previous model, it offers a 20% increase in range, twice the data-acquisition speed, 25% better range accuracy and a new modular design.

The I-Site 8820 is a modular system that can be configured to match site survey requirements. Its controls are built-in and the laser scanner is light enough to be carried with one hand.

Other features include an integrated high-resolution panoramic digital camera for

The I-Site 8820 scanner

geotechnical and geological mapping and an in-built surveygrade telescope for traditional backsight work. The modular design allows customers to save on these options if they are not essential to their requirements.

Maptek also announced Maptek Sentry at the conference – a new system to help site personnel keep track of surface changes. It

Integrated simulator covers whole mining value chain CRC ORE has developed the Integrated Extraction Simulator (IES), a mining simulator that integrates mining and mineral-processing activities through the value chain, from drill and blast to the end of the concentration process.

IES overcomes a number of challenges that have previously made fast, reliable and accurate simulation of mineral processing challenging and time-consuming: • It assists the user to combine the entire mining value chain into one contiguous environment; • It enables the combination of multiple rock types in the ore stream and processes these through all simulation models, including those not designed for multi-component use;

• Deployed as a cloud-based

• •

service, it enables the user to access the service via a web browser to set up simulation runs and define how much computing power they want to use; It is designed for a wide range of users – regardless of their skill level – and usage scenarios; It captures all the stream flow and performance data of a full mill survey.

The IES will provide a single platform for mine planners to understand the effects of mining and processing ore. It will be commercialised in 2015, making it possible for sponsors of AMIRA and CRC ORE to access the software for their own use at modest pricing.

works with the I-Site 8820 laser scanner to monitor and report on movements that might interrupt mining activity.

An overview scan provides a starting point to establish multiple zones in an area of interest, and the user controls monitoring frequency and site tolerances for notification alerts. Displacement, velocity and inverse velocity can be used to trigger notifications, which are automatically sent when network connections are available.

A heat map provides an instant overview of surface movement in the selected area.

Maptek Sentry will be available from November 2014.

Hausherr launches blasthole drill rig Hausherr has The released the HBM HBM 160 drill rig 160 for both rotary and down-thehole (DTH) applications. The rotary-drilling variant, which is suitable for blasthole drilling, has a single-stage screw compressor supplying 35m³/ min (1,235 cfm) at 7bar (100psi).

The rig is powered by a Caterpillar C 15 diesel engine with 403kW. Various high-pressure compressors are also available for DTH use, and Tier 3 or 4 dieselengine options are available.

Adaptations can also be made to allow use at 2,500m above sea level, to counter power losses related to high altitudes.

MM ’s LinkedIn group reaches 10,000 members In July, Mining News & Networking, Aspermont’s LinkedIn group for the mining industry, reached a landmark with the arrival of its 10,000th member. Established in February 2013, the group provides a digital hub for mining professionals looking to make new contacts and drive excellence in their operations.

Aspermont, the world’s leading publisher and conference provider

for the resource sector, publishes 15 key mining print titles, including: Mining Magazine, Mining Journal, Australia’s Mining Monthly, Resource Stocks and International Coal News, and has offices on five continents.

Mining News & Networking fosters debate on industry topics

through discussions hosted by Aspermont journalists from the above print brands, as well as its digital products, MiningNewsPremium and MiningNews.net, and its Mines and Money conference series.

New discussions are posted daily.

Join the group to share your opinions and create discussions of your own: http://linkd.in/1rxBhCF

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EASER L Ever had an unsuccessful blast? The new Easer provides a 100% success rate when drilling opening holes. It is a completely mobile rig. The setup procedure does not require any site preparation and is done in less than one hour.

As Easy as that!

Read more on atlascopco.com

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NEWS

Five minutes with…

Bob Lowe, executive director of the Control System Integrators Association (CSIA) What is a control-system integrator and what does it do?

Control-system integrators design and implement sophisticated control systems for manufacturing, process and other industrial facilities. Using their knowledge of engineering, information technology, and business, they integrate plant equipment to automate manufacturing and processes from the plant floor to the enterprise level.

What is the Control System Integrators Association (CSIA)?

Founded in 1994, CSIA is a not-for-profit, global trade association for system integration companies. It has more than 400 member firms in 27 countries.

The CSIA seeks to enable industries everywhere to have access to low-risk, safe and successful applications of automation technology by advancing the business practices of the system integration industry.

CSIA helps its members improve their business skills, provides a forum to share industry expertise and promotes best practices for business management.

What are the advantages of choosing a CSIA certified member?

The advantage for a client in working with a CSIA certified system integrator is that it reduces the risk of project failure and increases the probability of success.

Technical abilities, certifications in applicable technologies, plus industry and application experience are all good, but serve little purpose to the client if the system integrator has poor business management skills. Nearly every automation product supplier can tell stories of having to clean-up after bad system-integration projects due to poor business management – but they do it to save their brand reputation.

CSIA certification provides reasonable assurance to a client that a system integrator has good skills in project management, engineering management, financial management, personnel-resource management, quality-assurance systems and general business management such as contracts, insurance and disaster recovery. Becoming CSIA certified requires passing an audit by a CSIA authorised auditor that tests 79 business criteria.

implementing automation strategies. A system integrator can bring years of proven automation strategies from other industries to help produce a safer, more reliable and more efficient mining operation, and engineer the right solution for the project requirements. Project management and execution skills, in collaboration with the mine company’s personnel, produce a positive outcome.

Project risk management identifies potential problems and establishes risk mitigation plans to improve the probability of project success. System integrators also contribute a wealth of knowledge on the available automation products, both hardware and software. System integrators are not bound to any particular supplier – they select what is best for the application.

For example, a CSIA member did a project in a Chile copper mining process. Gold was mined as a by-product – that gold was worth a phenomenal amount of money. If the project had not been designed/ programmed using CSIA best practices, the mine owners would have lost large amounts of money for every minute of downtime. Why risk that with someone that is not a CSIA certified system integrator?

Could you give some examples of control system integrator applications in the mining industry?

There are many components to automating mines. Criteria that are monitored and controlled by systems developed by system integrators include heating and ventilation controls, conveyor and equipment elevators for people and equipment, monitoring of the atmosphere to ensure safe breathing and working environments (making sure the air doesn’t turn combustible or explosive), motors-drives-power transmission equipment such as automated clutches, transporting mined materials to the right staging areas, automated start-up and shutdown systems and tracking of mobile equipment.

Lyons Salt Co is a salt mine located in Lyons, Kansas, US. Production volumes are critical to maintain a competitive advantage, so it needed to improve efficiency and increase output. Industrial automation implemented by CSIA member TEC Systems increased efficiency at the mine by 35% and production output by 32%. The efficiency and output improvements resulted from reduced time moving product, flexible operations, reduced downtime, improved worker safety and improved visibility of its operations.

How can a control system integrator benefit mining operations?

Automation helps manufacturers and processors to reduce cost, increase production, use less energy and lower their environmental impact.

The mining industry is traditionally behind in developing and

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MAKING A COMMITMENT TO THE MINING INDUSTRY As you strive to meet the world’s demand for commodities, Caterpillar is committed to being the partner you need to help you in your efforts.

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Special report

reduce, reuse, recycle Acid mine drainage has become an opportunity for water reclamation and reuse, particularly with less contaminated mines that have a higher pH and lower dissolved iron levels. Jeff Easton reports

A “The types and amounts of metals in the wastewater strongly influence the selection of an AMD treatment system”

The latest developments in high-rate thickeners effect rapid separation

cid mine drainage (AMD) from coal and mineral mining operations is a difficult and costly problem. The sheer volume of AMD sites and the contaminants associated with them has been described as the largest environmental problem facing the US mining industry by the US Environmental Protection Agency (EPA).

The US Forest Service estimates that in the eastern US, nearly 6,500km of streams are affected by AMD from coal mines, and in the western states, between 20,000 and 50,000 mines are currently generating acid on Forest Service lands. The drainage from these mines is thought to be impacting between 8,000km and 16,000km of streams.

In addition to the acid contribution to surface waters, AMD may cause metals such as arsenic, cadmium, copper, mercury, silver and zinc to leach, with potentially harmful effects on humans, animals and aquatic ecosystems.

AMD from mine waste rock, tailings, and mine structures such as pits and underground workings is primarily a function of the mineralogy of the rock material and the availability of water and atmospheric oxygen.

AMD is the formation and movement of highly acidic water, rich in heavy metals, which are leached from rocks that come in contact with the acid. This acidic water forms through the chemical reaction of surface water (rainwater, snowmelt, pond water) and shallow subsurface water, with rocks that contain sulphur-bearing minerals, resulting in sulphuric acid. The acid is generated when metal sulphide minerals, which are

present in the rock associated with most types of metal mining activity, become oxidised.

AMD is typically characterised by low pH and high dissolved iron. It may also contain high amounts of CO2 which forms carbonic acid, further depressing the pH. When the pH of AMD is raised past 3.0, either through contact with fresh water or neutralising minerals, previously soluble iron ions precipitate as iron hydroxide, a yellow-orange solid colloquially known as “yellow boy”.

Other types of iron precipitates are possible, including iron oxides and oxyhydroxides. All of these precipitates can discolour water and smother plant and animal life in the streambed, disrupting ecosystems. The process also produces additional hydrogen ions, which can further decrease pH. Elevated levels of heavy metals can only be dissolved in waters that have a low pH, as can be found, for example, in the acidic waters produced by pyrite oxidation.

TreaTmenT opTions A number of treatment methods can be employed to meet EPA and state mandated effluent discharge levels. The determination of treatment options is dependent upon the flow rate, the receiving stream’s flow and quality, availability of electrical power, the distance from chemical addition to where the water enters a settling pond, and the settling pond’s volume for water retention time. After evaluating these variables, the economics of different chemicals and alternative treatment systems can be assessed.

The types and amounts of metals in the wastewater strongly influence the selection of an AMD treatment system.

Enough alkalinity must be added to raise water pH and supply hydroxides, so dissolved metals in the water will form insoluble metal hydroxides and settle out. Because AMD contains multiple combinations of acidity and metals, each solution is unique, and its treatment may vary widely from site to site.

The simplest treatment of AMD involves: the neutralisation of acidity; and the precipitation of metal ions. The most commonly used neutralising agent is lime, which is added to previously

precipitated solids in a densification tank to produce a high-density sludge (HDS).

Excess CO2 dissolved in the AMD stream can be stripped out using a surface aerator. This step also begins to oxidise iron and manganese, and assists in their precipitation. After stripping, the HDS and the AMD stream are mixed in reaction/ aeration tanks. The combination of aeration, high pH, and mixing causes the iron, manganese and other heavy metals to precipitate to the fullest extent possible at a set pH level.

Treated water then flows to a thickener for sludge thickening and clarification of the water. The metal precipitates as sludge, and a portion of the sludge is recycled to the sludge densification tank. The remainder of the sludge goes to disposal.

Depending on the site conditions, the thickened waste may be redirected to another portion of the mine, dewatered and deposited prior to disposal in a landfill, or concentrated to paste and stacked.

A gravity sand filter may be used to polish the stream prior to discharge, depending on permit limits. If low total dissolved solids (TDS) is required for downstream processes, then ultrafiltration and reverse osmosis can be added to the system to produce this level of high-quality effluent.

Since AMD sites are often in mountainous, uninhabited areas, where access to the site may be difficult, many of these systems are built for ease of operation, with no on-site operator. This has led to the use of caustic soda for neutralisation, which is easier to feed into the AMD stream than lime. Caustic soda is also typically used for smaller AMD flows.

reclamaTion and reuse While the majority of wastewater streams generated from AMD are characterised by low pH (2-4) and high levels of dissolved iron (1,00010,000ppm), there are some streams that are not contaminated to these extremes. These streams may have relatively high pH levels (5-7) and dissolved iron levels as low as several hundred parts per million.

With water sources becoming harder to obtain for industrial applications,

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these marginal-quality water streams are becoming more attractive for reclamation and reuse.

Implementing sustainable and financially viable methods to reuse vast quantities of acid mine water is an area of relatively new, but growing, interest for mining operations. The technologies exist to economically treat any strength of AMD for industrial reuse. Recent technological refinements in such processes as CO2 stripping, aeration, thickening/clarification, sludge disposal, ultra-filtration and reverse osmosis are making these systems more streamlined and efficient, enabling full-scale AMD reuse projects to not only control, manage and reuse contaminated water streams, but also make these projects financially viable.

For example, the latest developments in high-rate thickeners, used to separate liquids and solids at very high rates, are highly effective in coal refuse thickening, gold recovery, copper leaching, molybdenum processing, and other mining and chemical applications.

Separation is effected rapidly because of the system hydraulics, which can be in excess of 20 times the hydraulics of conventional thickeners. As a result, the plant area required for this new generation of thickeners is greatly reduced. The smaller equipment size substantially reduces capital, installation costs, and plant space when compared with conventional thickening units sized for the same production rates.

Another is the most recent advancements in surface aerator technology. New impeller designs increase oxygen transfer efficiency and reduce axial and radial loads. Such a system can produce a minimum efficiency of 2.3kg/kWh (3.8lb/Hph). This improved transfer efficiency saves significant operational costs over the life of the equipment.

The reduced axial and radial loads increase the life of the drive unit and reduce the size of support structures and beams for the surface aerators. Systems like these are making AMD reuse more accessible for mining operations, which require systems to be financially feasible, as well as capable of efficiently handling waste streams within a confined footprint.

Such technology was recently put to use in a coal-fired power plant in West Virginia which was contracted to access wastewater from a large AMD reservoir at an abandoned coal mine. In addition to other processes, the plant utilised

surface aeration to treat the water prior to decanting to the power plant.

Consuming 11.4m3/min (3,000g/min), the entire reservoir was eventually depleted, at which point the coal mine went back into operation, but now producing coal for the power plant. The advanced surface aeration process was critical in facilitating an economically feasible solution for treatment of the AMD wastewater.

The reuse of AMD in hydraulic fracking for shale oil and gas production is quickly becoming a hot topic of interest. For example, more than 1.1 million cubic metres of polluted water is discharged daily from abandoned coal mines in Pennsylvania into the state’s waterways. The problem has persisted for decades, largely because costs associated with cleaning up the mess are so enormous.

In 2013, the Pennsylvania state Department of Environmental Protection issued new policies that support natural gas drilling companies in using abandoned mine drainage as a source of water for hydraulic fracturing.

Hydraulic fracturing uses vast quantities of water to create microscopic fissures in dense shale formations, allowing the hydrocarbons to flow freely from the formation and into the well bore. Until recently, in Pennsylvania, the use of AMD from abandoned coal mines had not been a viable option.

In addition, many Marcellus shale oil and gas hydraulic fracturing wells are in close proximity to AMD areas, creating a unique opportunity to beneficially use

these AMD waste-water sites for hydraulic fracturing.

According to a 2013 Duke Universityled study, much of the naturally occurring radioactivity (radium and barium) in fracking wastewater might be removed by blending it with waste-water from AMD. Blending them can bind some fracking contaminants into solids that can then be removed before the water is discharged back into waterways.

Blending AMD with fracking waste-water would also help to reduce the depletion of local freshwater resources by giving oil and gas drillers a source of usable recycled water for the hydraulic fracturing process.

As EPA mandates continue to tighten the allowable limits on dissolved minerals and toxicity in US watercourses, abandoned mines that were previously within EPA limits are now required to more aggressively treat their contaminated effluent to comply with the new standards.

Consequently, mine operators are under increasing scrutiny to embrace more streamlined and cost-efficient water treatment technologies to process their acid mine waste-waters prior to discharge.

With the advent of highly-optimised treatment technologies, however, new possibilities for water recycling and reuse have emerged that open up options for the safe disposition of these toxic wastewaters. And importantly, new options have been introduced that streamline the costs associated with AMD processing.

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New impeller designs increase oxygen transfer efficiency and reduce axial and radial loads

“The reuse of AMD in hydraulic fracking for shale oil and gas production is quickly becoming a hot topic of interest�

Jeff Easton is process engineering manager at WesTech Engineering. See www.westech-inc.com

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mine of the month

eurochem pushes on in Perm Ailbhe Goodbody visited EuroChem’s Usolskiy project near Perm, Russia, in June to see how the project is developing

E “The Usolskiy project is the most technologically advanced greenfield project in the industry, certainly for this region”

uroChem’s Usolskiy project began in 2008 with the purchase of the Palashersky licence area, situated in the Verkhnekamskoe deposit in the Perm region of Russia. As of June 30, EuroChem had invested Rb18.5 billion (US$620 million) in the project as per International Financial Reporting Standards, and the first output of approximately 175,000t of KCl is expected in late 2017.

The Verkhnekamskoe deposit is one of the largest potash deposits in the world – the only larger one is in Saskatchewan, Canada. At its longest point it is 136km long, and at its widest 40km; the total area of the deposit is 3,500km2, more than twice the size of London.

The potash reserves in the entire deposit are 52 billion tonnes, and the magnesium salts are 73 billion tonnes. As a percentage of Russian reserves, the deposit contains 70% of Russia’s potassium salt, 20% of its magnesium and 56% of its rock salt. As a result, the Perm region has a long tradition of potash mining; the Russian potash company Uralkali also mines the deposit.

Nikolay Limonov, technical director at EuroChem, said that the Usolskiy potash project is one of the first greenfield potash projects in Russia and Europe for 30 years. EuroChem’s total investment in the project will be US$2.9 billion.

In June, EuroChem also won the auction for the right to explore and

Palashersky facts Licence area: 132.9km2 Licence acquired: 2008, via auction Purchase price: Rb4.1 billion (US$172 million) Depth: 500m Average thickness: 4m Nutrient content: 30.8% KCl Distance to port: 1,600km JORC proven and probable reserves: 420Mt Measured and indicated resources: 1,075Mt Useful life of mine: 35+ years Estimated production start: late 2017 produce potash from the Belopashinsky potash licence area, which is also located in the Verkhnekamskoe deposit adjacent to the Palashersky licence area where the Usolskiy mine is currently being developed. EuroChem made a one-time payment for use of the licence area amounting to Rb885 million (approximately US$24.6 million).

The Belopashinsky licence area, which covers 65km2, brings the Usolskiy total licence area to 188km2 and is estimated to have an average potash content of 30.8% and an 85% recovery rate.

According to EuroChem, the two licence areas are estimated to have proven and probable reserves of around 2,500Mt of ore, allowing for a mine life of as much as 60 years at a 15Mt/y

production rate (3.7Mt/y KCl). The company plans to submit its plan and scheduling to the authorities for test holes and conducting seismic activity at the site in order to confirm and map the geology and begin efforts to get updated figures on the reserves estimate.

Clark Bailey, mining director at EuroChem, commented: “We are delighted to win the licence for another potash deposit. Its close proximity to our Usolskiy potash development will allow us to significantly expand our high-quality resource base.”

In a press briefing during the mine visit, Bailey highlighted some of the benefits of the Usolskiy potash project.

He stated: “The Usolskiy project is the most technologically advanced greenfield project in the industry, certainly for this region.”

He explained that it will produce good-quality ore with a competitive cost of production compared with the global market. He added: “We’re not coming up with anything spectacular – nothing extraordinarily new, just standard, proven technologies.”

The Usolskiy project is approximately 1,600km from the Ust-Luga port, on the Russian coast at the Gulf of Finland, where a EuroChem terminal with a transhipment capacity of 5Mt is currently under construction, and is expected to come online in two years.

Project history Inside one of the shafts

EuroChem is currently developing Phase I of the Usolskiy potash mine, which has a capacity of 2.3Mt/y of KCl. It involves

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the construction of social infrastructure, the cage shaft, skip shaft #1 (which will be a double skip shaft) and a processing facility, and has a total estimated investment of US$2.5 billion.

Phase II will add an additional capacity of 1.4Mt/y of KCl, bringing the project’s total capacity to 3.7Mt/y when it is completed; this stage involves the construction of the second skip shaft and a further expansion of the processing facility. The total estimated investment in Phase II is US$400 million.

As of mid-August, skip shaft #1 is at 533m deep, and is slightly ahead of schedule; the shaft will be completed in August, as it only needs to be sunk 15m further. The sinking of the cage shaft was completed in October 2013, to a depth

of 473m. Skip shaft #2 is currently on hold, and will probably be built in 2016-18; all the shafts are being constructed by Russian contractor US-30.

For the rest of the year, sinking operations will be mostly focused on the excavation of the haulage sections and loading stations, and contractor Thyssen Schachtbau is scheduled to abandon the freeze holes at both shafts this year. The back grouting is due to be finished in the March 2015 quarter.

On the surface, levelling for the future plant site is planned, along with other support work such as the rail system, ponds and piling for surface buildings.

The main site at Usolskiy has already been cleared, and temporary roads constructed. In addition, the beneficia-

tion-plant study has been completed, and documentation developed.

The headframes of the shafts are temporary and will be replaced later this year by permanent ones, and the buildings on site are also temporary. The shaft-sinking equipment currently in use will also be replaced at a later date with a permanent cage and skips.

The gathering pond for storm water is expected to be completed in the September quarter, and the mine administrative building in the December quarter.

The workshops and the permanent canteen are scheduled for completion in the March 2015 quarter, and the ore-product storage buildings in the December 2015 quarter.

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An overview of the Usolskiy site

Usolskiy project history to date – shafts Item

2008-11

2012

2013

2014

Skip shaft #1

Design approved by state; 44 freezing and four thermal boreholes drilled (freeze ring diameter 18m, depth 278m); Shaft sinking starts with US-30.

Continued shaft sinking; Thyssen Schachtbau operating freeze plants.

Reached potash levels; Purchased ventilation equipment; Waterproofing.

Excavation for underground bins at loading pockets; Cross-over drifts; Completion of shaft sinking; Freeze wall abandonment.

Cage shaft

Design approved by state; 44 freeze holes and four thermal boreholes drilled (freeze ring diameter of 18m and 278m depth); Construction started by Thyssen Schachtbau; Shaft sinking starts with US-30.

Continued shaft sinking; Thyssen Schachtbau operating freeze plants.

Reached level in halite for cross over to skip shaft; Waterproofing; Completed shaft sinking.

Freeze-wall abandonment; Cross-over drifts.

–

Incorporated proposed location into mine plan.

Evaluation of skip-shaft capacities, project timing and region’s geological prospects.

Decision to advance schedule to be taken.

Skip shaft #2

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mine of the month

Those taking part in the site visit, including MM’s Ailbhe Goodbody (sixth from left)

Buckets for transport between the surface and the bottom of the shaft

infrastructure So far, the infrastructure developed includes a high-voltage 220/10kV electricity line from the Yavinskaya substation to the processing plant; a 220/10kV 10MVA substation on the site for freezing; electricity lines and a communication network; and a supply of natural gas from the state-owned energy giant Gazprom.

The works currently under way include the construction of the core 220/10kV substation, along with design work for a gas distribution station, external gas pipeline and systems for the processing plant. In addition, EuroChem is terracing and levelling the site and conducting piling tests.

48km of railway is planned to connect the plant to the main railway network – 27km of it on the site. The rail sidings will handle 2.5 ‘unit trains’ per day, each train having 64 railcars with a capacity of 78t per railcar (approximately 3.6Mt/y capacity). Both state and railway approval have already been obtained for the building of the connecting railway.

For the mine itself, the ventilation

is planned when it is no longer being used for landfill, and this will be followed by the planting of forests on the land.

There will be minimal tailings on the surface – the tailings will be reclaimed and backfilled into the mine.

staff infrastructure is due to be completed in the September 2016 quarter.

health, safety, environment Bailey stated that EuroChem is committed to health, safety and the environment, with a management system certified to the ISO 9001, ISO 14001 and OHSAS 18001 standards. As at VolgaKaliy, safety is considered to be a core value at EuroChem, rather than a priority, and safety pertains to everyone on the sites.

To avoid pollution of the environment with industrial waste, the company plans to construct a salt pile and salt dump. Approximately 70% of waste will be stored in these, and the first stage of the salt pile has been constructed.

The construction of a biological treatment plant is planned for the treatment of domestic solid waste and industrial wastes, which will be collected from all the site’s facilities by a sewerage network. There will also be a wastewater cleaning system, and the treated water will be re-used for technological processes.

In addition, the company will build a landfill facility for domestic solid waste and industrial wastes, where waste from the plant and the nearest inhabited areas of the Usolskiy district will be dumped – the recultivation of this area

VolgaKaliy Mining Magazine visited EuroChem’s VolgaKaliy potash project near Volgograd, Russia, in April last year (see the June 2013 issue of MM for the full report).

EuroChem has since successfully completed the shaft-freezing stage of the cage shaft. The cage shaft sinking operations resumed from the 100m mark in August 2013, after an earlier suspension and a change in the technology used.

EuroChem is working on all three shafts at the moment with two being done by EuroChem’s own employees and the third shaft by contractor US-30.

Thyssen Schachtbau is in charge of freezing all three of the shafts down to 820m.

As of mid-August, skip shaft #1 is the furthest advanced at 749m deep – its final depth will be 1,147m. Skip shaft #2 is at 208m deep and sinking at approximately 1.5m/d. The cage shaft is at 308m deep and progressing about 1m/d with a

final planned depth of 1,117m. The freeze walls on all three of the project’s shafts are fully generated at this stage as well.

EuroChem’s planned work at VolgaKaliy for the rest of the year includes continued sinking of the cage shaft and skip shafts #1 and #2. In addition, the design work on the shaft’s lower water seals will be finalised to protect the shafts and the future potash mine from any risk of water inflow.

On the surface, work will continue on the foundations and structure of the main beneficiation plant, product storage buildings, water-treatment facilities, hoist buildings, various administration buildings and the fresh-water supply system. The construction of the workers’ accommodation is also expected to be completed this year.

From an initial production capacity of 2.3Mt/y KCI, VolgaKaliy’s capacity is set to double to 4.6Mt/y after the ramp-up of the project’s Phase II.

Eurochem wants to become the most attractive employer in the region, and to attract the best employees that the area has to offer. Bailey commented: “We’re well supported by the town of Berezniki, and vice versa.”

The town of Berezniki can support both construction and EuroChem staff at this point, and the company is also building its own community at a cost of approximately US$68 million; the implementation of this part of the project spans 2012-2019.

“That sounds like a lot, and it is a lot,” explained Bailey. “But to give you a reference point – in VolgaKaliy we are spending US$300 million on that same social infrastructure. That’s partly because Berezniki has some infrastructure already that we needed, but it is still a small city with a lot of industry support.”

EuroChem plans to build residential and social facilities for its staff and their families, including housing for 3,000 people on an 83,000m2 area. The accommodation will be a mixture of flats and cottages, and will be available for staff to buy or rent at below market price. In addition, the company will pay one-time relocation allowances to non-local professionals, along with a number of other benefits.

The development plan also incorporates a kindergarten for 260 children, sports centre, training centre, hotel with a leisure centre, shopping mall and facilities such as car parks.

The company has already won an auction for the leasehold of a 38.5ha land plot, and EuroChem’s residentialarea plans have been developed. The technical specifications for the gas, water and electricity infrastructure along with water disposal and road construction have been obtained, and the design of the facilities is nearly finished.

At the beginning of the project, in 2008, the Usolskiy project had 17 employees. As of May, there are 457 employees at Usolskiy, and including contractors there can be up to 1,100 people working on the site on any one day. There are projected to be 2,416 staff on site by first output in 2017, and when the mine reaches full development in late 2021, it will employ 3,150 people.

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INTERVIEW

I should be so lucky…

Stephen McIntosh, global head of exploration at Rio Tinto, explains to Carly Leonida why his team have some of the best jobs in the industry

Q “We’ve been investing since the mid-2000s in building a better gravity gradiometer, in partnership with the University of Western Australia”

Tell us about Rio Tinto’s approach to exploration and the role that your team plays within the group. How does this approach differ to those of other global miners?

My team looks after all greenfield exploration for the Rio Tinto group of companies, spanning the A-Z of commodities and countries. The group has a great track record going back to 1947, which marked the first professional discovery and that really set the way. In that case they used magnetometers – a technology that was developed during the Second World War for hunting submarines.

We have 65 years of discovery success.

The majority of the company’s large mining assets are things that it has found and developed, which is somewhat unique in our industry and it places my group uniquely amongst our competitors.

Brownfield exploration was, for a long time, the remit of Rio Tinto’s individual product groups. However, through the 2000s, Rio Tinto Exploration began to get more involved, not with reserve/ resource conversion or incremental extensions to existing orebodies, but with projects that are satellite to, but within the economic orbit of existing operations.

Q Exploration in Alaska

How many projects would Rio Tinto have in its exploration pipeline at any one time, and how do you prioritise them?

That’s a good question. On average in a typical calendar year we would have 50-60 projects at various stages of target testing, where we’re actually doing something on the ground, from soil

sampling and geophysical surveys through to drilling.

We place all of our projects into a pipeline and then have a series of stage gates for all of our projects across all commodities and geographies, even brownfields, so they’re all lined up against other projects globally and they have to meet certain metrics to get from one stage to the next and to be able to access additional funding.

The key is to be disciplined about making sure that projects meet those metrics, understand why they are or aren’t progressing to the next stage, and be quite ruthless about it. If they don’t meet the metrics, then exit those projects, because sitting behind those 50-60 projects are hundreds of ideas and new opportunities waiting to move into the pipeline.

Managing a really tight pipeline of opportunities in a disciplined way is an important part of what we do, and it’s something which has taken us over a decade to get right. In the mid-’90s we went through a major reorganisation and we had a period where we weren’t doing so well.

On reflection, what happened was we had strong budgets and we became busy being busy, not busy being successful. We were trying to move everything forward and not prioritising.

So we decided to refocus and implement the pipeline strategy that we have now, and it has served us extremely well.

The teams can become quite passionate about their projects and that’s why the portfolio decisions sit at my level.

I have five managing director level direct reports and they are accountable for four geographies. The fifth group is a project-generation group, which houses our technical experts whose skills are shared globally. The exploration directors that run these four groups are very passionate, they each want to see their projects progress and we don’t want in any way to impact that, so the dispassionate part really comes at my level.

Q

What are the three most important exploration projects within your portfolio and why?

We don’t tend to name projects specifically until they’re in order of magnitude studies. We have a lot of stakeholders to manage. However, we

can talk about some of the most recent handovers to our product groups, and the makeup of the Rio Tinto portfolio.

When we talk about discovery it’s not that eureka moment when you find the first outcrop or drill intersection, it’s about the handover of a resource typically at the inferred resource level as defined by the JORC code. A lot of work has gone into a project to that point to build an economic case. It needs to be something that is potentially viable and of interest for Rio Tinto to take forward to prefeasibility and beyond.

In the last few years, we’ve handed over projects such as the Amargosa bauxite discovery in Brazil. That’s really interesting because it’s a brand new terrain and it’s still giving up its secrets.

We’ve got an interesting nickel-copperPGM project in Minnesota – the Tamarack project – which has been on our books for a number of years. It’s interesting because it’s a couple of states across from our Eagle discovery of 2004, but it’s a different beast. It’s quite a bit larger in terms of the total size of the mineralisation system, and its giving up its secrets unwillingly but it’s a project that we remain very interested in.

Our focus at the moment is predominantly in copper. It’s a commodity that the group sees as highly investable, so we’ve got extensive grassroots exploration going on around the world.

At the start you asked what is unique about the exploration group – we have a unique history and DNA, but what we also have is a challenge that we set ourselves in the mid-’90s to make at least one tier-one discovery per year. In essence, we’ve been hitting that target since the late 2000s. Some of those are brownfield projects, so they’re not necessarily talked about by us as they sit within a business unit’s resource statement. There has been a range of major greenfield handovers to the group over the last decade and we’re very pleased with that performance.

Q

What would you say are the biggest challenges that your team is facing at the moment?

Having come out of an unprecedented boom, not just in mining but also on the exploration side of things, we were to a degree priced out of the market. The cost of services including drilling,

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transport, logistics and staff/contractors really became quite prohibitive, but we’re seeing that start to moderate in the current market and, for the first time in a decade, we’re seeing the opportunity to do more cost effective deals.

There were also issues with stakeholder expectations including national governments who were wanting to raise the bar and have a greater share of the pie, but we’re starting to see some unwinding of those expectations.

Another is the soft issues of old being the hard issues of today. Our social license to operate is critical to us and it’s one of the things that we’ve invested a huge amount into. We want to be the explorer of choice, as Rio Tinto wants to be the developed of choice. We have to make sure that everything we do in terms of stakeholder engagement is best practice and is consistent. We honour the concepts of free prior and informed consent before we enter peoples land and start our work.

The other part is in mature exploration environments: outcrops are pretty much gone, so exploration is a question of delving under cover. Post mineral cover can mask deposits very effectively, and while we have improving technologies, they aren’t perfect yet so we are investing in better geophysical methods to better probe and image the subsurface.

Whenever we drill a hole we aim to make the best possible use of it – not just standard core logging, but also peer even deeper into the mineralogy and alteration.

There are materials in some of these holes which can give an ability to understand what might be a false negative, or indicate that there’s a potential target nearby. We’re developing techniques around mineralogy, looking at the fertility of mineral systems and whether the alteration system that’s at work has the potential to contain metals in economic concentrations.

A lot of those concepts come from the diamond exploration industry. In that case they look for kimberlitic indicator minerals – special grains that are only found in kimberlites – and we’re looking for analogues in other commodities and rock types. We are really talking about the needle in the haystack, single grains that might present themselves in a creek drainage system, but which might have originated in an ore-forming system that hopefully has metals in it.

The good thing is that we’re able to leverage capability that Rio Tinto already has through its micro-analytical facility in Australia. This is focused on understanding the mineral concentrates that are coming out of our copper-production

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facilities, and it’s great that we can take some of that work into the exploration field and look at things through a different lens.

Rio Tinto feels quite confident in the technology development space, and it sees this as one of its key strengths. It’s something that we are turning into a competitive advantage through the mine of the future programme, the remote operations centre in Australia, and most recently the processing excellence centre in Brisbane. I think it’s fair to say that there’s a continuum there, and we will see a suite of similar facilities developed focusing on new areas for productivity improvement.

Q

How much does the average tier-one discovery cost and what would this figure comprise?

Our definition of discovery is when we hand over an order of magnitude study to our product groups. There’s a significant amount of drilling, metallurgy and mineralogy that takes place prior to this as well as stakeholder engagement and logistics, so to bring a project to that point, where it is then ready to go to prefeasibility would cost well under US$100 million. The original discovery would obviously be a much lower number, but it’s not the metric that Rio Tinto uses to define discovery today. We run our exploration activities as a business. We focus a lot on financial strength and I think that’s quite different to the rest of the industry, which is motivated by the thrill of the chase.

That’s not to say that we aren’t, but having discipline around management of our portfolio has allowed us to take our primary investment – the money that Rio Tinto gives us on an annual basis to invest in exploration – and recover a substantial amount of that through divestment income.

We divest a number of smaller projects each year which won’t make it through the Rio Tinto pipeline. Like everyone, we have our nemeses; projects that nearly get there but not quite, and some of those can be sold for reasonable amounts of money, certainly in the cycle we’ve just been through. We recycle that divestment income back into the portfolio, and that makes for a very cost effective model.

would expect us to be in – Canada, Chile, Australia etc – through to emerging ones. We have programmes in various parts of Africa, China, Mongolia, Russia and Kazakhstan, and some of those are about having a local presence and understanding the lie of the land.

I think the prospectivity is relatively well understood across the industry, the workability in some of these areas is perhaps the big question. We like to do a little more than just watch markets, we see if we can work there compliantly and safely, although there are some jurisdictions that we don’t enter because of commercial impediments or they’re too risky from a health and safety perspective.

The VK1 in laboratory tests

Steve McIntosh

Q

What jurisdictions are you monitoring over the next three years in terms of potential for greenfield exploration projects? And why these places specifically?

At the moment we’re in 18 countries.

These range from the jurisdictions you

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“To have Mount Tom Price on your CV in iron ore, Escondida in copper or Jwaneng in diamonds is one of the things geologists dream of”

However, we do watch them carefully.

We will also go into countries to pursue a single opportunity, test the water and if it’s found to be worthwhile we’ll deliver a new discovery across. If not we will withdraw and look for the next opportunity, we’re not particularly tied to our present footprint.

It is also worth bearing in mind the company is 140 years old, as such we probably have some of the best exploration archives in the world and it’s important that we put those to work.

Our insight into geological prospectivity is probably second to none in a number of jurisdictions.

Q

So if you had to name a jurisdiction…

It’s hard to ignore the belt of rocks that run through Kazakhstan, Mongolia, northern China and eastern Russia. The discovery of Oyu Tolgoi in Mongolia took a country that had no tier-one copper pedigree and put it on the map.

However, it’s a huge terrain; a lot of it is very remote so the challenges are enormous.

The Andes remains incredibly important to us, and we are also rejuvenating our efforts in the copper belt. Those are likely to remain the three big terrains in copper.

Q

Indicator minerals analysis testing in Australia

How do today’s exploration tools compare to those of 30 years ago and which tools/concepts will be key to future discoveries?

The advent of the personnel computer and satellite imaging really changed the game. In terms of geophysics, we’ve seen the development of more powerful transmitters, higher bandwidth receivers – things that can detect ever smaller signals and look deeper.

PCs have gotten faster, the software that converts geophysical data into something 3D is becoming ever more sophisticated, but I still think there’s work to do on integrating hard facts with the images that computers generate.

That’s the next great leap for us: to be able to take the known and integrate it

with geophysical inversions and 3D geological models and turn it into reality.

There’s one physical property of the earth which we don’t measure particularly well and that’s gravity. The industry has had access to instruments called gravity gradiometers for over a decade now. However, they are still an order of magnitude away from the sensitivity that they need to be in order to image the geology with sufficient resolution to deal with some of the uncertainties that exist.

We’ve been investing since the mid-2000s in building a better gravity gradiometer, in partnership with the University of Western Australia, called VK 1. Its super-high science, and exploits quantum physics, the properties of super conductance and has a liquid-helium cooling system. We’re a couple of years away from being able to apply it commercially, but we’re continuing to drive the project forward and it’s going to offer major benefits.

The VK 1 programme is managed by Rio Tinto’s innovation group, and the exploration team is also providing input into other R&D projects – taking our best-practice orebody knowledge and applying those insights into technologies that our head of technology and innovation, John McGagh, and his team are developing. There’s a close connection between the two teams.

However, we do also need to remember that boots on the ground remains of critical importance so all of this technology development is aimed at providing additional tools for our geoscientists.

Q

Are these projects funded by the exploration business, and if so, what proportion of your total budget goes toward this each year?

They are managed by the innovation group and funded by the exploration group. About 5% of our total exploration budget is spent on R&D, and that would range from the VK 1 and work on micro-analytical applications through to work in the data world.

It’s incredibly important to use what we’re good at today, but also that we’re always looking for that opportunity to get further ahead of the pack.

Q

How does Rio Tinto manage the vast quantities of data generated by its exploration team and how often would you revisit old data to re-evaluate opportunities?

We have a huge amount of legacy data, reports and hard copy archives – warehouses full of filing cabinets, warehouses

the size of a small aircraft hangar. So we started a programme in earnest in the mid-2000s to scan and digitise as much of that archive as possible. We’re about 90% of the way there, and there is no doubt that there are discoveries to be made in our own warehouses, so we’re breathing life back into the information we already have.

We can also access third-party data repositories where we have the right and pull their information. A good example is the Society of Economic Geology – they have over a century of papers which our teams can access from their desktops.

We’ve invested a lot in building a best-in-class technical system for dealing with all of our point and spatial databases and all of our GIS digital maps. However, the biggest challenge is taking that old information and integrating it with our current generation data to create a seamless, high-quality set of GIS products that we can then interface with digital records from individual countries. We’ve actually outsourced a lot of that work to a group in India.

I think our approach to data management is somewhat different to anyone else in the industry. We revisit data all the time. That’s one of the beauties of the Rio Tinto group; we have people all over the world who are continuously learning from new people, applications and insights, and they are then feeding that knowledge almost instantly to teams in other parts of the world. We really shouldn’t underestimate the strength that gives us. It’s an incredibly powerful advantage.

Q

Finally, on a more personal note, which discoveries would you say have been the highlights of your career and which other tier-one deposits would you love to have uncovered?

The first things you do are always defining in your career. I was lucky enough to work in Papua New Guinea. I started on a small island called Simberi exploring for gold. It just happened to be in the next group of islands up from Lihir, and I went from Simberi to support the latter stages of the feasibility study at Lihir.

The thrill of the hunt is great, but at the end of the day there has to be something that you hand over.

I’ve done project generation for discoveries, worked with discovery teams and worked in the projectevaluation stage inside Rio Tinto.

Las Cruces in Spain was memorable for several reasons. Firstly the deposit

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was undercover – about 100m down – and in a belt of rocks that weren’t considered to be part of the pyrite belt at the time. We basically redefined what the potential extent of the belt was.

We also undertook the field prospecting in a radically different way to what had been happening historically.

We used to do incredibly detailed little postage stamp gravity surveys, whereas on this project we moved to sparse gravity stations over much bigger areas to try and find the bigger anomalies.

It was thrilling to see such a mature terrain as the Spanish pyrite belt give up its secrets, just down the road from the Rio Tinto mine where it all started for the company in 1873. For me, there’s a connection and a tie to Las Cruces that I will never forget.

One of the more recent ones is a discovery in Serbia called Jadar. We were exploring for borates in the Balkans, and we found that it did indeed have borates, but we also found a new a mineral that had never previously been recorded. Normally when you find a new mineral you find a tiny little grain – it’s pretty unusual in the 21st century to discover a couple of hundred million

tonnes of a mineral never described before.

So Jadar is comprised predominantly of the mineral called Jadarite. It’s a lithium-rich borate mineral, it has two elements of significance and the project is going through the prefeasibility study.

However, because it’s a new mineral no one’s ever processed it before, so we now have to work out how to make a saleable product. It’s very exciting, and it reminds you that in nature we don’t know it all. There are still major new deposits to be discovered.

The one that you’d love to put your name on… it’s always got to be the alpha deposit. To have Mount Tom Price on your CV in iron ore, Escondida in copper or Jwaneng in diamonds is one of the things geologists dream of. I think that’s fantastic, because it’s what teams aspire to do. It’s something that really does get people out of bed in the morning.

I often describe this job as being similar to forensic science, because we are trying to take a few disparate facts and figures and make these amazing leaps of faith about what they could mean, then use the company’s money to

go out and test our ideas.

We are really just a big R&D business.

Every day the team gets to go out and test their ideas and concepts. There aren’t many people that get paid to go to such interesting places and meet such interesting people. I have the privilege to lead a great team of people. And it really is all about focused professionals working together for a common cause – to find those elusive company-making discoveries in order to create high-quality investment opportunities for Rio Tinto.

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Drilling at the Tamarack project, Minnesota, United States

Read an extended version of this interview in the Mining Magazine app. Download it for free at appstore.com/MiningMagazine2013

(Diesel + Water)’s a problem.

Hy-Pro’s the solution. hyprofiltration.com/mining

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shovels & loaders

Maintenance myth busters Assets need to be in working order to make money, but unreliable assumptions lead to faulty – and expensive – maintenance policies at too many companies. Scott McConnell, Joe Moser, Darryl Piasecki and Dan Roberts address some common myths A Caterpillar wheel loader and dump truck at work at a coal mine. An appropriate maintenance programme can maximise availability of such assets while keeping costs down

“We often see overactive maintenance programmes that result in costs 20-30% higher than even a mediocre maintenance programme would deliver”

M

ost organisations understand that the value of reliability is much greater than the cost of parts and labour for maintenance and repair activities. Effective maintenance increases asset availability, allowing companies to operate smaller fleets and keep fewer spare assets in reserve.

Reliable equipment is usually more efficient too: even single-figure percentage increases in fuel economy can produce savings several times greater than the maintenance costs required to deliver them. Harder to quantify, but just as important, are the improvements to service, customer experience and safety performance provided by well-maintained, reliable assets.

Despite their best intentions, however, many companies adopt maintenance policies and take actions that have exactly the opposite effect. We often see overactive maintenance programmes that result in costs 20-30% higher than even a mediocre maintenance programme would deliver. Let’s look at four maintenance myths that can lead companies to such expensive mistakes.

Myth one: effective and efficient maintenance is all about getting intervals right The adage that an ounce of prevention is worth a pound of cure leads many companies to adopt time-based replacement and overhaul policies for key components and assets.

Such policies are based on the assumption that the majority of failures occur as assets wear out, and that the probability of failure increases rapidly as the asset reaches a certain point in its service life.

The actual intervals chosen are often driven more by a fear of failures than any basis in evidence. In practice, however, failures tend to follow an entirely different pattern. Parts are seven times more likely to suffer early life, or premature failures, resulting from problems in their manufacture or installation as they are to die of old age.

Those parts that do survive their difficult infancy are likely to lead long and productive lives. By adopting a time-based approach to the replacement of these parts, companies are simply repeating their exposure to the riskiest

parts of the component’s life cycle while simultaneously pulling their best assets out of service.

Many companies default to time-based replacement because it seems to be the simplest option to implement, but a more effective solution need not be overly complex. A systematic approach to the identification of common failure modes and root causes of past failures will usually lead to better solutions.

These come in many different forms.

They can be internal, including condition monitoring, tailored inspection programmes, or shop quality improvement, or external, requiring collaboration with the original manufacturer to redesign the component.

Myth two: good reliability performance requires great data The availability of sophisticated tools for the collection and analysis of asset reliability data has undoubtedly helped many organisations refine and optimise their maintenance programmes.

Unfortunately, the complexity of ensuring detailed data entry into such tools leads some companies to focus on achieving a perfect data set, and to believe that they cannot make good maintenance decisions until they have comprehensive data in place.

In fact, even the very simplest set of historical data can be used to significantly improve the value delivered by maintenance programmes. A log of previous failures allows companies to answer two fundamental questions: which components fail the most and which are most critical to performance?

The addition of some information on when those failures occurred can reveal vital patterns. Are critical components wearing out (meaning that a time-based replacement approach could be

appropriate), or failing prematurely (suggesting more analysis is needed to identify the optimal approach)?

Finally, one of the most powerful tools in the reliability engineer’s armoury: failure modes and effects analysis (FMEA) does not rely on the availability of historical data. While historical data is helpful, a solid understanding of the way the asset works is all that is required.

FMEA is traditionally used in the design phase to minimise future failures.

However, this technique is also very effective once the system is in operation, to shape the maintenance programme and address failure modes that may have been overlooked during design.

By focusing on critical assets and components, and making the best of the data they have, many companies have transformed the efficiency and effectiveness of their maintenance programmes, often by eliminating a large number of unnecessary tests, interventions and component replacements.

Myth three: new assets are better assets Many operators assume that as their assets age, the cost of maintaining them will rise and reliability will steadily decrease. On this basis, they often plan to retire assets relatively early, replacing them with newer, and potentially more advanced, designs. Although there are instances when older assets are also bad assets, companies would be wise not to assume that correlation equals causation.

Often, older assets have important maintenance and reliability advantages.

Weak points and early-failure items are likely to have been identified and replaced, while the asset’s operating and maintenance teams will have become used to its particular quirks and will have developed operating protocols that keep it running smoothly.

New assets, by contrast, typically contain unfamiliar, untested elements that are prone to premature failures. When we studied the per-hour maintenance costs of more than a dozen large manufacturing assets at one company, for example, we found that four out of the six most costly assets were the most recently installed, while the oldest assets took three out of the four lowest-cost spots.

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shovels & loaders

Operators should look beyond traditional approaches to inspection and maintenance

There may be pressing commercial reasons to change an asset, such as customers demanding a new technology, but there is rarely a maintenance rationale to replacing an older asset that is running well.

Myth four: frequent inspection makes assets more reliable It is easy to assume that more maintenance leads to more reliable assets. Some maintenance departments pride themselves on their regular and rigorous inspection schedules.

It is common for many time-based maintenance programmes to focus more

on finding problems that have already occurred than on predictive actions designed to detect and prevent future failures. We often hear operators complain that “this equipment does not break until we touch it”, suggesting that defects are introduced when assets are taken out of service, opened up and adjusted. Often, they are.

Complex assets often require partial disassembly to perform the inspection.

These interventions are opportunities to introduce errors or accidental damage to components, not to mention the inevitable reduction in productivity associated with stopping an asset for inspection.

It can be better to move from a timeto a condition-based inspection schedule for many components, particularly as in-service and remote performance-monitoring technologies become more readily available. In the meantime, many companies have benefited from reducing the occurrence of failure-inducing tasks by rationalising their inspection programme and increasing intervals or removing tasks altogether.

Although it may be counter-intuitive to

reduce the number of preventive maintenance tasks to increase reliability, maintenance departments would do well to evaluate alternative approaches before rushing to add more preventative tasks.

see results By taking a fresh look at some of their long-held assumptions, companies can often improve their maintenance policies in ways that simultaneously cut direct maintenance costs and improve asset performance.

By rationalising requirements based on root cause and total cost of ownership (TCO) analysis for each asset type, one operator of heavy equipment was able to reduce the number of planned tasks by nearly 80%, reducing six-monthly inspections from 25 man-hours to six.

Across its fleet of 1,000 major assets, this freed up 40,000 man-hours per year and reduced the occurrence of maintenanceinduced equipment failures.

In another case, an operator of aged and highly critical oil-producing assets in the North Sea was able to reduce the total preventive maintenance man-hours by 50%, while increasing uptime.

Authors: Scott McConnell is associate; Joe Moser, associate principal; Darryl Piasecki, associate principal; and Dan Roberts, expert, at McKinsey & Co. See: www.mckinsey.com

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shovels & loaders

systems thinking

A

tool that enhances safety and productivity for shovel operators is taking an important step forward as the Global Mining Standard and Guidelines Group (GMSG)’s Unified Shovel Interface project moves into its next phase of development.

GMSG developed a functioning, manipulatable Unified Shovel Interface proof of concept (PoC) and unveiled it at the World Mining Conference, which was held in Montreal, Canada, in August 2013.

The PoC effectively provides a unified operator interface that pulls together the many divergent systems on board large shovels. Since then, the PoC has gained interest, through continued promotion and discussion at mining events around the globe, and has evolved into a more robust tool.

In their current environment, shovel operators are often faced with information overload, with numerous different interfaces, screens and alarms all vying for their attention.

Adding new and emerging technologies (such as production monitoring, payload monitoring, track elevation, bucket positioning, equipment health, missing-tooth detection and proximity awareness) in piecemeal fashion is both ineffective and unsafe, resulting in a low level of situational awareness.

GMSG, through collaborative work with a wide cross-section of industry

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Heather Wright explains how multi-stakeholder collaboration is developing a new era for onboard systems on shovels

stakeholders, is working on the next stages of development to address the need for a unified display that combines all these technologies so that immediate, important information takes precedence.

As the project moves into its next phase, GMSG has several separate but simultaneous short-term goals, including publishing a guideline for alarm management, testing the PoC in the field on a shovel as well as developing a specification document for the application programming interface (API) model for device and display management.

During the most recent phase of the project, GMSG acknowledged that the PoC was simplistic and needed additional elements to bring it to the next level.

The system needed to understand priorities between the different applications and the developers needed to address proprietary concerns from original technology manufacturers (OTMs) and original equipment manufacturers, while demonstrating that collaboration does not necessarily mean relinquishing control.

Building on the unified interface that was designed through visits to operating mines and discussions with shovel operators, guidelines were developed for combining the myriad of data feeds into a single display.

Peter Wan, principal advisor, mining technology at Teck Resources Applied Research & Technology, and leader of GMSG’s Onboard Technology and Connectivity Working Group, says: “One of the underlying principles of situation awareness is getting the right information at the right time. We need to define a priority or an alarm hierarchy so that information is presented at the right time.”

The nexT sTeps Canada-based firm Peck Tech Consulting, which specialises in the application of advanced technology to mobile equipment, will proceed with development of a draft API guideline, intended to be presented to industry stakeholders.

The GMSG working group headed by Wan plans to share this with industry stakeholders to promote discussion and to determine what the final API needs to look like to best service industry needs.

Peck Tech will define the key requirements for the API and evaluate a number of potential protocols (protocols commonly used in the industry as well as highly prospective ones) against these requirements.

The requirements will then be broken out into business requirements that answer the question ‘What does the system need to do to address the

21

Shovels in action at a Suncor oilsands mine in Canada

“In their current environment, shovel operators are often faced with information overload, with numerous different interfaces, screens and alarms all vying for their attention”

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shovels & loaders

real-life problem?’ as well as non-business requirements, which will cover quality aspects such as efficiency, performance and supportability, among others.

The group then aims to test the unified operator interface onboard a large shovel at Shell Canada’s oil-sands operation in Fort MacMurray, Alberta. A sub-committee of representatives from various mining companies is being led

by Iain Allen, senior manager, GIS, mining information technology at Barrick Gold.

The strategy will be to test the interface on a shovel by year-end, to prove the validity of the concept, and collect operators’ feedback about the user experience.

Participants in this initiative are numerous, demonstrating the level of industry-wide support in search of common solutions, and include a consortium of GMSG working groups, mining companies, consultants and mining equipment vendors including: Barrick , Teck, Goldcorp, Newmont, Freeport McMoRan, 3D-P, Azonix, Checkpoint Consulting, Finning, GuardVant, Honeywell Matrikon, Joy Global, Liebherr, Modular, Motion Metrics, Peck Tech, SMART Solutions, UBC and Wenco.

opened the door for potential improvements. Specifically, GMSG has determined through feedback from OTMs that an alarm-management guideline would be useful. This again underscores the value of building common solutions through standards that are made relevant, and most effective through collaboration and engagement of stakeholders involved.

23

C3 Human Factors Consulting (C3HF) will participate in this part of the project, employing tried and tested ergonomics.

A draft for the API guideline has a target date for completion for the end of October 2014, while the alarm-management guideline and in-the-field interface testing are intended to be completed by the end of 2014.

Heather Wright is managing director at Global Mining Standards and Guidelines Group (GMSG).

See: www.globalminingstandards.org

alarm management The initiative also includes the publishing of a guideline for alarm management in mining shovels, and it is planned that the next incarnation of the unified shovel display will feature a unified and intelligent alarm-management strategy.

Andrew Chapman, technical manager, mining solutions at Peck Tech Consulting and co-leader of GMSG’s Situational Awareness Group, says that these measurable steps are a mark of the business benefit of collaboration.

“The objective of a unified alarmmanagement strategy is to alert the operator to relevant abnormal operating situations as well as focusing the operator’s attention through the elimination of extraneous alarms, provision of better recognition of critical problems, and ensuring swifter, more accurate responses by the operator,” Chapman explains.

“Alarm management has traditionally been an afterthought in mining, with a variety of distinct, proprietary bolt-on technologies that are added with little to no consideration for the end configuration.”

Chapman adds that this has resulted in low situational awareness and has

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ShovelS & loaderS

dust busters Bruce Manser of BMT WBM and Tony Egan of ACARP report on a recent joint study to improve filtration efficiencies on draglines and rope shovels Fan layout on a dragline

I

n recent years, concern has been raised by dragline operators that ventilation systems used on dragline-machine houses are inefficient and inadequate at filtering dust from the outside environment. High dust levels within the machinery house have been known to cause problems with commutation and damage to electronic equipment.

Long-term dust levels and the effectiveness of filtration systems have never before been measured and reported in any comprehensive or objective way, which has led to a range of subjective opinions and beliefs within the mining industry as to which systems provide optimum performance.

Funded by the Australian Coal Industry’s Research Program (ACARP), BMT WBM has carried out several studies to address this issue. The findings provided a more comprehensive understanding of dragline cooling and dust control issues, and several design concepts involving alternative technologies were investigated to determine whether or not improvements in overall dust filtration were possible.

“Long-term dust levels and the parameterS effectiveness Study Dragline ventilation systems are needed of filtration to provide cooling air to both the systems machinery and operator, while filtration systems are needed to ensure that the air have never is clean. Both systems are fundamental to before been the successful operation of a dragline.

The effectiveness of the systems vary, measured particularly in relation to their basic and reported design and the level of maintenance/ in any cleaning effort which mines are prepared to undertake. In addition to the objective requirement to supply clean air, a way” positive pressure differential must be

maintained in the machine house to prevent dust from being drawn back in through the exhaust louvres.

BMT WBM was engaged by ACARP to complete three major projects looking at: dragline machine house cooling and dust control, dragline machine house dust control, and field testing of alternative cartridge technologies.

The initial package of work focused on how the air flowed through the machine house of a typical dragline, as well as investigating the air velocities around heat generating equipment, and the effectiveness of the air in carrying heat away from that equipment.

The study involved work at multiple sites with a number of draglines and one rope shovel measuring airflows and temperatures. It also used computational fluid dynamics (CFD) simulations to look at the air flowing from the ventilation fans situated on the roof of the draglines into the machine house, over and around gearboxes and the motor generator (MG) sets, as well as through the electric motors on swing, hoist and drag.

There were two main challenges: first, ensuring that dust collection and measurement activities did not have any adverse effects on the draglines or shovels during their operation; and second, establishing a simple but robust means of determining the overall dust collection efficiency of the filtration system on each machine tested.

It was found early on in the study that measuring short-term dust concentrations inside and outside the machine house was a very unreliable way of quantifying the overall dust collection efficiency of the filtration system. This particular challenge was overcome in a rather low-tech but logical way.

It was decided to measure the level of dust fallout both inside and outside the machine house (which was exactly what the dragline operators were complaining about), rather than the suspended dust concentrations and then compare the two readings. However, even implementing this was challenging since wind gusts outside the machine house, and gustiness inside the machine house caused by the ventilation system and windage from the drag and hoist drums, made it difficult to achieve repeatable results.

To effectively form a windbreak for the dust fallout gauges, large plastic buckets were secured to the dragline at the selected sampling locations in such a way

as not to become dislodged during normal machine movements. Each dust fallout gauge was a plastic jar that was held in place inside the plastic bucket by a flexible foam donut cut to shape.

The jar was readily removable and replaceable when the time came for the jars to be sent back to the researchers for analysis. An unexpected challenge early on with these ‘dust collection stations’ was to ensure that they weren’t mistaken for regular cleaning buckets and accidentally removed – to counter this, a number of signs were placed around the pails and adhesive used to prevent the buckets disappearing.

The large number of draglines and the one shovel covered under the study were spread across several mine sites and different operating companies.

Since these were operational machines, downtime was scarce and schedules had to be worked around.

This meant that a large amount of co-ordination and flexibility on the part of the researchers was required during the initial setup of the dust samplers, and a significant amount of assistance was required from key mine staff to regularly collect the jars at the appropriate times and send them back for analysis.

recommendationS Current systems are not adequately removing very fine dust from the outside air. This leads to dust accumulation within the machine house, which subsequently leads to re-entrainment.

Personal exposure levels within the machine house for total suspended particulate matter (TSP) at PM10 (particulate matter with less than 10μm diameter), PM2.5 (less than 2.5μm diameter) and PM1.0 (less than 1μm diameter) were found to be well within

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ShovelS & loaderS addreSSing filter deSign The more recent study moved on to identifying whether an alternative cartridge filter design with improved flow and pressure drop characteristics, compared to those normally used in the P&H AirScrubPro system, could be developed and then tested on an operating shovel.

On completion of the first stage of laboratory testing, it became evident that a significant reduction in pressure drop across a clean filter was unlikely to be realised by attempting to develop an alternative filter-cartridge design.

The focus of the study moved away from the manufacture and testing of an alternative cartridge filter to field testing of the cartridge filters used in a standard Air Scrub Pro system to establish how quickly the pressure drop across the filter changed with time as the filter elements tended to clog up with dust.

Perhaps the biggest surprise of the study was how much appearances can influence perceptions. One of the older machines that was deemed by mine staff to be one of the worst performers was found from early testing to indeed be the worst – only 70% dust collection efficiency compared to 75-85% for the other draglines. However, when the

filtration system was completely cleaned it became the best performer across all of the draglines tested, with 95% overall dust collection efficiency – only the shovel with the cartridge-based system performed better at 98-99% overall dust collection efficiency – yet only the researchers noticed the change.

The projects have provided the Australian coal industry with a better understanding of dragline cooling and dust control issues, and provided operators with tools to assess the potential for improving the situation on a particular machine. This has particular relevance for operators planning an overhaul or replacement of the ventilation system on a dragline in order to get the optimum benefit from the work.

Overall filtration efficiencies versus outside dust fallout rates

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the occupational limits set by the Australian National Occupational Health and Safety Commission (NOHSC).

However, PM10 concentration levels on all the machines would regularly exceed the more stringent criteria used in the wider community. They would exceed, for example, the Queensland Environmental Protection Agency (EPA) and New South Wales (NSW) Department of Environment, Climate Change and Water (DECCW) criteria for residential receptor locations adjacent to mines.

As to which of the two main filtration systems currently used on the draglines – Dynavane or Floseps – performs better, it was not possible to make a clear statement. This is because of the need to take into account the sensitivity of each system to blockage and its effect on airflow rate into the machine house.

However, both systems are susceptible to dramatically reduced filtration performance once blockage occurs.

Moths were also identified as a major problem – they clogged up intake screens and scavenge systems on the filtration units and reduced their performance.

Some practical means of addressing this include not positioning lighting too close to the intakes of the filtration units because it attracts the moths and, when modifying ventilation systems, maintainers should make the intake screens as large as possible so that moths can’t get trapped easily on the screen mesh.

The performance of existing filtration systems could also be improved by making them easier to maintain, re-configuring the air entry points, introducing weather protection, regular filter cleaning, utilisation of effective dust scavenge systems, and regular mechanical maintenance of fans to maintain adequate house pressurisation.

Several alternative concepts were investigated to determine whether technologies existed that could be readily incorporated into a dragline ventilation system in order to secure enhanced efficiencies. Such technologies included: acoustic agglomeration, cyclone designs, traditional bag houses and cartridge-filter based technology.

The latter ultimately became the preferred option of the researchers, after seeing the filtration results from an electric rope shovel that was part of the studied group of machines that had a small cartridge-filter system installed. To be viable on a dragline, it was felt that the normal operational pressure drop across the filters would need to be decreased from standard cartridge-filter design practice, so as to bring the fan power consumption within acceptable limits.

25

“Perhaps the biggest surprise of the study was how much appearances can influence perceptions”

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26

Process control

in search of process perfection Carly Leonida explains why process-automation systems and their design and implementation are so vital to the future of mining A control room provided

by Emerson Process Management

A

utomation is a given in most modern processing plants. Its benefits are well established in terms of ease of operation (automated start-up/shutdown), process stabilisation (regulatory control) and process optimisation (advanced process control).

With the current trend towards mining larger, lower-grade deposits with more complex mineralogy, processing plants need to be able to cope with higher production volumes as well as a greater variability in feedstock. Automation allows more efficient operation and adaptation to varying process conditions.

Automation can also provide a very effective means of reducing costs or increasing throughput without major capital investment. As grades decrease and production costs increase, it is likely that more operators will be forced to automate in order to remain competitive.

“Longer term, there is a general move to autonomous operation in mining and mineral processing, which will mean a much greater degree of automation than we currently experience,” says Gunter Metzner, one of Metso’s advanced process control market managers in Australia. “This will drive a paradigm shift in the way we think about and implement industrial automation systems.”

“There is a general move to autonomous operation in mining and mineral processing, which will mean a much greater choosing automation instrumentation, control and degree of The information systems required for effective automation” automation need to be incorporated into

plant design from the planning stage, and it is important that mines select a system with architecture capable of supporting an integrated enterprise. This encompasses the activities of individuals, process units, process areas, plant-level activities, mine management and business planning and accounting systems.

One of the biggest benefits this offers is the integration of multiple systems into one central data repository. The data generated can be used to drive process improvement, utilisation and maintenance practices across the value chain. Using an integrated approach also minimises risk during implementation, enabling benefits to be realised earlier, and facilitates ongoing support, ensuring that the initial

benefits of the system are maintained.

Processing plants are typically long-lived. Considering that hardware and software advancements are introduced every six months, it is prudent to select automation systems that adhere to open industrial standards versus proprietarybased systems.

Bob Cook, director of mining, minerals and metals at Schneider Electric, explains: “Open systems are regarded as having the ability to embrace any technology that has a positive impact on profitability, with minimal cost. The selected architecture must be able to support a variety of communication protocols, bring data into the system and convert it to standardised information, and supply that information to the plant’s control and information system.”

In short, the automation process must create a platform that provides consistency of operation, performance and standards for information access.

Andrew Bagley, industry marketing lead for mining, minerals and cement at Rockwell Automation, says that when designing systems for a concentrator, the first step is to understand the owner’s objectives and how much automation they want in their facility.

“We would determine if they are looking to add automation to a single part of the process and integrate it with their existing control system, or if they want complete integration of their entire operation,” he explains.

“We would start with an assessment of their present connected enterprise: do they use single or multiple communication protocols? What level of network security do they have? How will operational data be utilised? Will it be fed into their enterprise resource planning (ERP) system? Who will be viewing the

equipment data generated and from where – within the facility or in a different facility, city or country? Once we know the answers to these questions, we can help the customer define the system objectives and suggest an appropriate, safe and secure solution.”

Vincent Matthews, business manager for minerals marketing, grinding and cement technology at Siemens Industry, points out that how the operator views automation is key: “It is important to remember that automation allows for the immediate calculation of algorithms of multiple variables that are too timeconsuming or complex for humans alone.

But automation systems are tools, not the ultimate decision maker. The expertise of the mine operators is enhanced by automation, not replaced.”

Introducing automation into a greenfield operation might involve the use of a vendor with main automation contracting (MAC) experience, a concept commonly used in the oil-and-gas industry. A MAC is a single contractor that works with the end user and manages the lifecycle of an automation solution. This offers clear ownership for problem resolution, improved service and timing/ scheduling of project activities, more focused engineering, streamlined commissioning and post-start-up support.

It is common today for processing plants to be completely automated and controlled from a centralised facility. This gives operators a holistic view of the process, allowing them to react quickly to changes and avoid costly downtime.

Depending on the ore grade, operators can adjust the process to improve yield rates. Most importantly, it improves safety, as operators can analyse data and make process changes remotely instead of on the concentrator floor.

September 2014 Process_MM1409.indd 26

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Process control

That said, total plant automation is not necessarily suitable or feasible for every mine. Some older operations have introduced automation incrementally over the years, and the focus for implementation inevitably falls on more capital-intensive pieces of equipment such as mills and crushers. However, without integrated automation of the ancillary equipment as well as the upstream and downstream processes, it is difficult to achieve an optimal solution.

Doug Morris, director of marketing, mining and power at Emerson Process Management, says: “We most commonly see mines looking at automating grinding circuits and flotation circuits. Where they start depends on what part of the process a plant is having difficulties with, ore hardness and grade and where they are in the mine plan. The best approach is to look at automating the entire concentration process with measurement and control where possible.”

A good solution is to automate the full process, but add a higher level of instrumentation and automation (such as advanced process control) in the key process areas such as crushing, grinding and flotation, which determine overall plant throughput and recoveries.

Avoiding dAtA overloAd One of the limitations associated with automation is optimising use of the data that it generates; the more data that can be acquired, analysed and utilised, the faster plant owners can make system adjustments to improve processes, reduce operating costs and increase their earnings. However, it can be difficult to determine what data is important.

Morris says: “Plants can get bogged down with data and alarms, because insufficient time was spent deciding which data is right for operating the plant. For example, lots of devices have diagnostics available and if you make them all active, it may create a constant stream of alarms.

When you have too many alarms, pretty soon the operator starts ignoring even the critical ones.”

Neil Freeman, principal consultant for mining, minerals and metals at automation specialist Honeywell Process Solutions, agrees that one of the greatest challenges lies within alarms or incident analysis. “The Abnormal Situation Management (ASM) consortium has been studying this and produced guidelines for alarms to ensure that operators are effective under stressful or emergency situations. This requires a smart alarm system, taking advantage of alarm cut-outs and other techniques to ensure that the operator can recognise what is

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important for any given situation,” he explains.

Automating a process also creates online access to data on key process variables, and this allows the accurate tracking of equipment utilisation, process utilisation and efficiencies.

Historically, the industry has collected real-time data in process historians, which are sometimes linked together across an enterprise. “The challenge lies in extracting the most useful information from a large amount of data, and making it readily available to the relevant people for analysis and action,” says Metzner.

“The analytical tools to do this are now

more readily available, but the implementation has not always been successful. We see opportunities for increased intelligence at the equipment level, where complex pieces of equipment can be self-diagnosing, increasing availability and utilisation, as well as efficiencies. Metso is actively working in this area.”

Titus Crabb, president of US-based control systems integration firm Vertech, believes that there is a huge opportunity on the horizon for more data collection through the Internet of Things (IoT), and analysing this data using concepts developed by Big Data researchers.

“Mine management will have the data available to know everything about everything. The challenge for automation will be to filter out the noise and present the right data in the right format to the right person in a timely manner,” he says.

“As automation system technology catches up in this area, mines will see a step change in operational efficiency. The low-hanging efficiency fruit has been

29

Process-control station owned

by Swedish miner LKAB

Retrofitting and upgrading Retrofitting an automation system is largely about attention to detail. The cost and time required depend on the accuracy of existing electrical and software documentation, and the integrity of existing physical systems such as wiring.

Crabb says: “Our advice to mines looking to retrofit would be the following: • Check out new technology. The lowest initial cost to retrofit will probably be to upgrade with your existing automation supplier. Your lowest total cost of ownership might be with someone else, and you might get some valuable new features in the bargain. Technology changes quickly, and the odds are that a lot has changed since your system was implemented.

• Be realistic about the timeframe. Working around operation schedules, physical space limitations and solving legacy equipment integration problems takes time.

• Consider more than just the automation system.

Time and environment take a toll on instruments and wiring too.

• Account for operations and maintenance training costs for new software and hardware.”

In order to minimise disruption to an existing operation, retrofitting automation requires careful planning, and it is often advised to do the retrofit in phases rather than all at once. “This facilitates work as part of routine downtime and makes troubleshooting easier due to a reduced scope and complexity,” adds Matthews.

Freeman says: “Perhaps the biggest challenge is training operators to take full advantage of the new system. This is where dynamic simulation can assist, creating a simulated environment to train operators on how best to control the process. The

mineral-processing sector is starting to realise the benefits of this approach, particularly in alumina.”

It is not uncommon to see varying control infrastructures within the same organisation, making it challenging to communicate and co-ordinate within the same operation or business unit. Some challenges arise from the fact that old plants were only instrumented for basic control. As a result, many older plants are vastly under-instrumented. However, many new product and process technologies (including wireless) are being developed to help mining operations break down horizontally and vertically oriented technology silos in the organisation.

“In advanced process control (APC), we see interesting opportunities in processing plants that have existing automation infrastructure but are not fully utilising it,” says Metzner. “By adding APC and advanced sensors onto an existing regulatory control system, additional throughput and recoveries can be achieved with minimal capital outlay.”

Unlike greenfield projects, where automation design starts with a blank sheet, retrofits need careful planning for safety reasons, to minimise operational disruptions and to work within constraints imposed by the operation itself, e.g. the state of documentation, physical access, local hardware standards and maintenance outages.

However, with the right deployment plan, automating an existing plant is possible with little to no downtime. Bagley says: “The success of the retrofit will be highly dependent on the installation.

Executing things like factory acceptance testing is crucial to saving installation time, and will assist in identifying any wiring or programming errors before the solution arrives at the customer’s site.”

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Process control

A control room at the Talvivaara nickel mine in Finland

“One of the next big steps will be to integrate all mine systems into a common automation platform, providing a seamless view into all aspects of an operation”

harvested, but high-end data analysis is going to expose a whole new set of opportunities for improvement.”

the next stePs Looking forward, a key trend, particularly among major miners, is to remote-control and to automate mines as much as possible, as well as increase access to operational data from centralised locations. A high level of automation is required to run a remote operations centre or ‘centre of excellence’, and it is important that systems are able to support geographical diversity, as well as the workflows needed to connect remote operators with mine-based operators and support personnel.

With this in mind, one of the next big steps will be to integrate all mine systems into a common automation platform, providing a seamless view into all aspects of an operation. This approach will enable high-quality collaboration with personnel in the field or with experts in other locations. It could be especially useful for facilitating functions such as shift changeovers, operations meetings and troubleshooting, providing access to all control system displays and other business applications that include: • Enterprise historians;

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• Maintenance systems; • Closed-circuit television; • Permits to work; • Production planning; • Standard operating procedures; • Materials management; and • Reporting systems.

Technological changes will start at the sensor level, with smart-device technology (related to the IoT), cloud computing for detecting operational and business trends, and visualisation tools for process analytics.

“For those in the mining industry who grew up before distributed control systems (DCS) were commonplace, the revival of wall-sized ‘mimic panels’ with touchscreen displays and mobile-device interfaces may become commonplace,” says Cook. “These displays may integrate simulation models for ‘what if’ scenarios,

operator training, 3-D visualisation and situational awareness displays.”

Morris says that Emerson is seeing more wireless sensors deployed in mining.

“Most mines have a robust wireless network, so they know the technology works. Couple that with the fact that mining and mineral operations are located on large sites, and running wires doesn’t always make sense,” he explains.

“A good example is that heap-leach operations are not typically well automated, but we’ve seen some progressive companies install wireless measurement technology and they have seen significant improvements in recovery.”

The physical size of some mines means that they can also benefit from mobile supervisory control and data acquisition (SCADA). “Operators can use mobile system-visualisation tools in the field instead of in a control room,” says Crabb.

“Mobile SCADA will transparently provide the right data in the right location to the right person to create the most efficient use of the entire mine team.”

leArning from others While the mining industry is pushing ahead with new technological developments, the overall level of investment and rate of adoption for R&D still lag behind

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those of other industries. Particularly in the process-automation space, there are lessons that can be learned from peers.

“The oil-and-gas industry has been using process automation for nearly 30 years and is very strategic in its implementation,” says Cook. “It should be noted that for many years mining was sufficiently profitable to run blindly with very little view of optimisation, but times and circumstances have changed. This means that information and optimisation lessons from other industries have found a home in mining.”

Many sectors are now rapidly embracing data integration with business systems, enabling management to make more refined business decisions and run more efficient operations. However, many of the automation platforms used in the mining industry today rely on legacy technologies that deliver on stability and reliability, but were not designed with modern data integration in mind.

Mining companies are already looking to the manufacturing, food and automotive sectors to generate new ideas for mineral-processing applications.

Manufacturing in particular has evolved to the point where processes are consistent and self-correcting.

“The concepts of tweaking and tribal

knowledge are vanishing, product and process development is more disciplined and tightly controlled. In addition, a business is looked at as one holistic entity where the impact of one decision in one area can be measured and predicted for the other areas,” says Matthews.

Many of the instruments, hardware, control software and design standards currently employed in mineral processing originated in other industries. Technology transfer is facilitated by vendors that are industry-agnostic. However, mining has some specific issues; unlike petrochemical or manufacturing plants, feed stocks are much more variable in quality. This has forced the mining industry to develop novel sensors, more robust advanced control tools, and unique models for the unit operations and circuits normally employed.

Another major influence is that, unlike these other industries, mines tend to be located in remote regions. Without local support, these operations have to rely on proven technology, which has stunted development to some degree.

In mining there is definitely still a culture of wanting to be ‘first to be second’ with innovation, and until this changes, it will continue being second in realising productivity and efficiency gains.

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Limitations Although automation can be applied reliably and safely in almost any plant, there are some situations where it would not be cost-effective. “It can be used in any environment, as long as the process size, complexity and life span justify it,” says Metzner. “Automation is becoming increasingly important in remote environments where local skills are limited, as it can improve process stability and efficiencies, and the integrity and safe operation of capital equipment.

“I would only not recommend the use of automation if: the process was too small to justify the investment; the process equipment chosen is not designed to be automated or the circuitry selected precludes effective control; or if the process owner has a philosophy of operating manually.”

The goal of plant automation is to provide information and control to improve operations throughout the plant.

“The old adage, ‘you can’t manage what you don’t measure’, is vital to process optimisation these days,” says Morris. “While many equate automation to plant controls, closing the loop with process measurements is one way miners can realise improved recovery while reducing energy consumption and water usage.”

Cook explains: “Whether a unit requires automation or not should be determined by strategic decomposition. The decomposition of a process is a vital analytical tool that is widely applied to strategically determine which KPIs are important, and how best to achieve those metrics. For example, where a crusher is purchased from a vendor, certain additional automation may be required to automatically set the gap for proper particle-size adjustments.”

Maximize your plant performance Maximizing performance during the lifetime of an operation is key – now more than ever in light of spiralling operating costs.

FLSmidth offers a new level of expertise and unsurpassed knowledge within the minerals industry for maximizing process plant performance through mineralogical-metallurgical process optimization surveys.

By combining the capabilities of its Dawson Metallurgical Laboratories, Ore Characterization & Process Mineralogy Laboratories and Process Technology Group, FLSmidth will review your current process then design, plan, set up and carry out sampling, testing and analysis to provide findings, suggestions and technical recommendations that will maximize the performance of your operation.

For more information, visit us at www.flsmidth.com/OptimizeMyPlant

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SNAPSHOT

Second life Who says mines can’t be fun?

A cavern that is twice the size of St Paul’s cathedral at the 176-year-old disused Llechwedd slate mine in North Wales, UK, has been turned into a subterranean playground.

Trampoline nets are hung within two chambers at different levels – the highest is 54m from the bottom of the cavern – and linked together by walkways and slides. The train journey into the cavern takes about five minutes, where passengers disembark for an hour’s fun underground.

Photo: Bounce Below

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Love photography?

Each month Snapshot will feature the best image sent to us by MM’s readers.

For a chance to have your image featured, send your photo plus a 100-word caption to: carly.leonida@miningmagazine.com

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.com

September 2014 15/08/2014 09:06

In addition to more than twenty strategically located manufacturing facilities, our network of affiliates includes engineering services, resin manufacturing, rolled-steel and drillsteel manufacturing, custom steel fabrication, chemical roof support and sealing products, and even includes staffing solutions and our own trucking company.

• Coal and Hard Rock Mining • Tunneling • Civil Construction

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Ore-grade cOntrOl

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engineering productivity CRC ORE is working with the global mining industry to counter the trend of declining feed grade and quality through a novel new approach referred to as ‘Grade Engineering’

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he Cooperative Research Centre for Optimising Resource Extraction (CRC ORE) was established in 2010 to address key productivity challenges facing the mining industry.

The CRC programme is industry-led and impact-driven, with CRC ORE providing a bridge between technology development and industry implementation.

CRC ORE is the first large-scale integrated initiative to bring together orebody knowledge, mass mining, mineral processing and resource economics. Development and implementation is supported by a consortium of global mining companies, mining equipment technology and services (METS) providers and research organisations.

riding price cycles CRC ORE was set up to identify and deliver technology and innovation solutions that could be used to counter a significant trend towards decreasing productivity in the global minerals industry.

The ‘Millennium Super Cycle’ of commodity pricing from 2003 to 2011 resulted in an unprecedented period of accelerated growth in production and investment for the global minerals industry across a broad range of commodities. However, much of this growth was at the expense of underlying productivity, which was offset by historically high commodity prices.

As the price cycle transitions and the investment phase of the super cycle tapers off, fundamental structural problems are being exposed, including

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Striving to provide better feed grades is one key to more cost-effective mining

inflated operating costs, declining ore-feed quality and a failure to embrace and exploit innovations that address holistic value-chain solutions.

This is illustrated by comparing multifactor productivity trends for the Australian minerals industry against commodity price indices.

Before 2003, the minerals industry was characterised by a period of sustained productivity improvement in response to economies of scale and the advent of mass-mining technologies.

However, post 2003, in response to increasing commodity prices, production was viewed as more important than productivity, resulting in expansion and commissioning of new projects.

While these trends are particularly marked in Australia due in part to highly inflated operating costs, similar patterns are evident for other regions.

Quality as well as Quantity Resource quality depletion is one of the dominant intrinsic drivers of declining productivity in the minerals sector. This is a function of lower feed grades, longer haul distances as mines become deeper, and rising waste-strip ratios for large bulk-tonnage open-pit operations.

Of these factors, CRC ORE identified declining feed grade as the most important quality-depletion attribute that can be mitigated using new technologies.

The major intrinsic factor influencing feed-quality depletion (and eroding value) is a systematic trend of declining feed grade over the last 20 years as throughput has consistently grown.

This can be illustrated by normalised copper feed grades over the past decade for a selection of world-class porphyry copper producers. Relative grade decline between 20% and 50% is evident, and this decline is projected to continue based on current mine-scheduling concepts.

Current industry perception is that industry controls the quantity and nature controls quality. Grade depletion is regarded as an unavoidable consequence of net present value (NPV)-based mine planning and the geology of ore deposits, combined with the use of mass-mining technologies for increasingly mature mining operations.

CRC ORE has demonstrated that this is not necessarily true – Grade Engineering is a new systems-based approach to counter resource depletion

“Much of this growth was at the expense of underlying productivity, which was offset by historically high commodity prices”

Porphyry feed grades have declined significantly since 1999

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Ore-grade cOntrOl

Many metalliferous ore deposits comprise highly variable and heterogeneous materials compared with bulk aggregates

“The aim is to reject low-value material early in the load-hauldeliver value chain before energy- and costintensive processing activities”

Differential blast conditioning can improve mill feed grade

and deliver improved productivity for the current commodity pricing and investment cycle.

change agent Grade Engineering recognises that a major component of apparent grade depletion can be related to over-reliance on throughput as the main operating lever during the boom cycle.

Single-minded pursuit of throughput has driven a bulk-scale averaged view of grade linked to minimum mining units (MMU) designed to service optimal extraction efficiency; tonnes delivered to the mill has overridden a focus on feed quality.

Grade Engineering provides an alternative approach to reclaiming feed-grade control. This is based on coarse separation technologies and modified circuit designs with no significant impact on the rate of extraction.

The aim is to reject low-value material early in the load-haul-deliver value chain before energy- and cost-intensive processing activities.

Five main ‘levers’ that drive coarse separation are recognised in Grade Engineering, with response to individual levers (and resulting opportunity) as a function of ore-grade heterogeneity and the geology of a deposit. The use of

screening and sensor-based sorting for domains with high in-situ variability below the current perceived MMU generates new accept and reject stream feeds for what was once a single pre-determined destination such as the mill, leach or dump.

This partitions value and mass into new feed streams, and delivers a different view on dynamic operational control. Where the increased accept value is higher than separation cost, economic outcomes can have a major impact on productivity.

A key concept is value-exchange between previous destinations, which can include separating a low-grade stream component from mill feed, or recovering high-grade parcels from dump leach destinations.

This approach is particularly powerful for upgrading marginal ores and generating economic streams from mineralised waste, increasing mineable reserves and extending life of mine.

Measuring iMpacts CRC ORE has developed an integrated methodology that delivers the key economic indicators for understanding the potential impact of Grade Engineering. A significant outcome of a Grade Engineering solution is the provision of operating flexibility as a consequence of dynamic feed manipulation.

Although Grade Engineering is focused on improving quality of feed early in the manufacturing cycle, the concepts and outcomes have an effect on whole-of-business value-chain optimisation CRC ORE has worked on 20 global projects assessing Grade Engineering opportunities with Anglo American, BHP Billiton, Newcrest, Anglo Gold Ashanti, PanAust, Teck and Glencore. Results are driven by resource-specific ore heterogeneity, and outcomes from the

projects to-date have identified potential improvements in excess of US$800m in NPV for individual operations.

grade engineering levers Many metalliferous ore deposits comprise highly variable and heterogeneous materials compared with bulk aggregates. This can result in complex and preferential breakage behaviours that lead to specific minerals reporting to specific size fractions, depending on the type of breakage energy applied and resulting particle-size distributions.

While the propensity of valuable ore minerals to report to finer size fractions is well known, there is surprisingly limited understanding of the economic importance of this ‘grade by size’ phenomenon.

CRC ORE’s activities have generated a new understanding of the potential economic impacts of grade by size, which indicates that, for some operations, it can deliver transformational Grade Engineering opportunities.

This can be illustrated using a representative example of belt-scale testing for a low-grade gold operation.

Three screened size fractions show major preferential deportment of gold during blasting and crushing. Pie diagrams represent gold percentage and the bar charts represent percentage mass. In this case, 64% of the feed mass contains gold well below the economic cut-off. 88% of the gold is contained in 36% of the mass below 19mm in grain size. This is not a result of dilution - the in-situ feed grade represents current resource definition practice.

An opportunity to pre-concentrate feed grade by a factor of 2.4 and avoid milling of very low-value top size material offers new flexible processing circuit options and value drivers.

Differential blast design can be used to fragment higher-grade ores and enable grade separation using coarse screening (1-200mm). This requires identification of favourable in-situ grade distribution and heterogeneity.

The above example shows differential blast design applied to a reef-style precious-metal open-pit operation.

During the trial, screening of blast conditioned the run of mine (ROM) feed and resulted in a doubling of the grade received by the semi-autogenous grinding (SAG) mill. This also resulted in increased unit metal productivity and energy efficiency.

understanding systeM value Generating new feed streams and changing stream values is a disruptive

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approach. Realising the economic benefit requires a whole-of-operation system value. In addition, changing an operating culture that has come to rely on quantity and throughput as the primary operational response to optimising resource extraction is a major challenge.

To overcome this, CRC ORE has developed a range of technology solutions, software tools and integrated methodologies to deliver outcomes based on a business case. For example, CRC ORE’s Integrated Extraction Simulator (IES) is a cloud-based tool that can dynamically link existing unit-operation simulators to provide a new enabling level of system visibility.

A significant outcome of a Grade Engineering solution is the provision of operating flexibility as a consequence of dynamic feed manipulation. This can be used to enable a much wider range of operating scenarios compared with current practice.

Scenarios can be fitted to varying constraints over the life of the project.

These include reducing capital expenditure, improving energy efficiency or controlling bottlenecks.

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next-generatiOn sOlutiOns Grade Engineering provides a change agent to counter industry trends of long-term feed-quality depletion exacerbated by the current price cycle.

Although an integrated value-chain approach to coarse separation and feed-stream manipulation is novel, many of the key technology components are not new and are either being applied in other parts of the broader rock-based minerals industry (e.g. feed-belt telemetry in cement manufacture), or in manufacturing sectors (e.g. sensor-based sorting in industrial recycling).

In addition, many of the pre-concentration operational concepts in Grade Engineering have analogies at different scales in current mineral-processing practice. Examples include roughing and cleaning in flotation circuits or coal washing.

Realising the value of this change agent requires a next-generation operational culture linked to the design of new processing circuits and more dynamic mine scheduling.

To support this implementation phase, CRC ORE has submitted a bid for a further six-year term with the Australian

government starting in mid-2015.

The aim is to build on the Grade Engineering foundations laid to date. A key focus is on working with METS and end-user mining companies to undertake large-scale site-based design, commissioning and validation of next-generation Grade Engineering circuits with proven productivity benefits. This is characterised by a consortium approach with shared risks and benefits.

The bid has already received strong support from the industry, and organisations wishing to learn more should contact Dr Steve Walters at CRC ORE on s.walters@crcORE.org.au

Blast design is one area being studied as part of CRC ORE’s Grade Engineering effort

For more information see: www.crcore.org.au

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ore-grade control

U-pgrading uranium Perth-based Marenica Energy has embarked on a strategy to commercialise its innovative beneficiation process, writes Roger Murray Excavation of a test pit at the Marenica project

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he key driver for developing the U-pgrade process evolved primarily from extensive test work undertaken on Marenica Energy’s own low-grade Namibian yellowcake project.

Marenica owns a 75% interest in the project, which is located in the same province as Namibia’s two operating yellowcake mines (Rössing and Langer Heinrich), and to the north of Areva’s Trekkopje mine.

Earlier this year, Marenica applied for a five-year Mineral Deposit Retention Licence from Namibia’s Ministry of Mines and Energy.

This followed the firm’s determination at the end of 2012 that the project was “sub-economic at current and projected uranium prices” using conventional heap or tank leach processing, as originally proposed.

As with Marenica, the current low-price environment has left a number of yellowcake developers with low-grade deposits unable to move ahead. In this context, a beneficiation process that can reduce costs has obvious attractions to owners sitting on presently unproductive assets.

Marenica is confident that U-pgrade has broader applications and can add value to similar hard-rock, low-grade surficial deposits elsewhere.

“The process can potentially reduce operating costs by 50-70% road to U-pgrade and capital the A metallurgical consulting group costs by established in 2011 concluded that 30-50%” Marenica’s calcrete-hosted carnotite

mineralisation had unique characteristics that could be leveraged to upgrade the carnotite into a reduced-mass concentrate for tank leaching.

The concept was taken further with an assessment of new scoping-level capital and operating costs based on a proposed upgraded flowsheet. The outcome was encouraging with an expectation that the process could have a significant effect on project economics.

In 2012, Marenica initiated an R&D programme to develop a concentration process that could lower the extraction cost of uranium.

One of the metallurgical consultants, Murray Hill, believed so strongly in the success of the programme that he

accepted the position as Marenica’s CEO. Detailed test work was initiated at the Australian government-owned Commonwealth Scientific and Industrial Research Organisation (CSIRO) on a representative composite from five drill

holes. This work concluded that the mineralisation at Marenica has distinctive characteristics: • Uranium occurs as a single mineral, carnotite, which is well liberated and occurs in a distinct size band; • There are virtually no composites

One on one Marenica CEO and professional metallurgist Murray Hill is leading the development of U-pgrade. MM put some burning questions to him…

MM: Is U-pgrade only applicable to surficial calcrete-type uranium deposits?

MH: U-pgrade was developed on Marenica’s low-grade calcrete deposit, but subsequent work on other ores has confirmed that the necessary characteristics are present in secondary surficial deposits located in semi-arid to arid environments around the world.

MM: Is any special, non-standard plant and equipment required?

MH: U-pgrade utilises commonly used and well-understood units that you would find in many gold, mineralsands and base-metal plants around the world.

The equipment is all standard, and for this reason we believe there is limited scale-up risk. The intellectual

property is in the application of the units and the order in which they are included in the flowsheet.

MM: Does the present depressed price environment provide a better opportunity to commercialise U-pgrade than would be the case if prices were higher?

MH: Our new strategy is a direct response to the low uranium price and near-term negative outlook.

The directors believe that the strategy can be successful across all price ranges, especially at or below the current incentive prices for many of our target commercialisation partners.

The value of U-pgrade comes from an operating- and capital-cost reduction, which is compelling for producers across a range of uranium prices.

MM: Have discussions with potential investors led to any firm expressions of interest in UB at this stage? And are these likely to include Chinese

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of carnotite and gangue minerals;

• With a specific gravity of 4.2,

carnotite is heavier than the host rocks.

These presented an opportunity to concentrate the uranium into a high-grade, low-mass product, which, in turn, reduces the mass feeding the leach circuit, allowing a reduction in the size of the circuit and associated operating costs.

Marenica undertook considerable test work on 3t of its own project ore, resulting in the development of the U-pgrade process. The process was also successfully applied in bench-scale tests to seven other third-party ore types.

The results were consistent and confirmed that the process was capable of concentrating ore by a factor of up to 50 times.

The results showed that 1Mt of ore grading 100ppm would reduce to 13,000t grading 5,000ppm, with a small reduction in process recovery from 75% to 72% but a substantial reduction in operating costs from US$80/lb U3O8 to US$40/lb.

The process reduces the leach feed to about 1% of the beneficiation plant feed due to significant rejection of

firms given the Sichuan Hanlong Group is the major shareholder in Marenica?

MH: The company is exploring a range of funding options. It has received positive responses from many investors who have been impressed by the body of work undertaken by Marenica in recent years in support of U-pgrade, the powerful but simple solution, and the relatively low scale-up risk present in this process relative to other mineral processing breakthroughs.

MM: Extensive test work has been conducted on Marenica ore samples at CSIRO in Perth. Can you confirm which other firms provided samples for testing?

MH: Areva and Deep Yellow have provided samples, whereas other companies wish to maintain anonymity.

MM: What is the estimated cost of a pilot plant and where would it be built?

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the major gangue mineral, calcite.

This also enabled the proposed leach circuit to be changed from an alkali leach (with higher operating temperatures and slower kinetics) to an acid leach (at ambient temperature and rapid kinetics), reducing expected capital and operating costs.

The process can potentially reduce operating costs by 50-70% and capital costs by 30-50% and the firm’s board took the decision to lodge a patent for U-pgrade in 2013.

the U-pgrade opportUnity Despite putting its mining project on hold in 2012, Marenica continued testing the U-pgrade process and the firm has decided on a strategy to commercialise the technology and vend/license it to uranium project developers worldwide.

Marenica believes that there are “multiple pathways” open to establish joint ventures with undeveloped uranium asset owners. In addition, it regards the current depressed uranium price as offering “low entry prices and very attractive upsides”.

The firm has identified a number of companies waiting for a price increase to at least US$75/lb U3O8, before deciding to develop a mine. Using

MH: It is estimated to cost US$6 million (US$1 million capital cost, US$5 million to operate) and will be located at CSIRO’s facility in Perth. CSIRO has been instrumental in the development of U-pgrade and is a valuable and obvious partner for operation of the pilot plant.

MM: What is the anticipated timeframe for constructing a pilot plant and completing test work to the commercialisation stage?

U-pgrade could greatly reduce the price threshold for these developments.

As a first step, Marenica has formed a special project vehicle called Uranium Beneficiation (UB) to which the proprietary technology has been transferred. Initially, UB is 100%-owned

by Marenica, but the intention is to bring in new investors to secure the capital needed to build and operate a pilot plant. This would be used for processing ore from three uranium deposits other than Marenica, including Trekkopje and the Omahola project, also in Namibia. The third is an unidentified uranium firm in Australia.

The plant will enable UB to engage with yellowcake-resource owners with the aim of creating a portfolio of interests in operating mines (with a target of three to four in the first five years) with potential enterprise value estimated to be in excess of US$500 million.

Carnotite mineralisation

Carnotite in weathered bedrock

MH: The schedule is to complete three pilot plant runs inside 12 months from UB financing.

MM: How would Marenica aim to market U-pgrade via UB to uranium development firms?

MH: Marenica has looked at a number of commercialisation options including royalty, farm in, joint ventures or purchase of resources. Each case would be assessed individually and the most appropriate course of action taken with our development partner.

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Tyres

Burning rubber The mining-tyre market has gone through drastic supply and demand changes over the last few years.

Ailbhe Goodbody investigates

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“Since the second half of 2011, commodity prices and EM tyre demand have dropped by almost 30%”

he recent extreme changes in supply and demand in the off-theroad (OTR) tyre market have been difficult for all parties to adapt to. At the moment, however, there is effectively no shortage of mining tyres – virtually every size is now available to mine sites throughout the world, and lead times have been cut in half as compared with two years ago. In addition, tyre prices are much lower than those of two years ago as supply has grown to adequately meet the demand.

Dan Allan, senior vice-president, Kal Tire’s Mining Tire Group, says: “The painful process of having supply match demand has been achieved in two ways; more production capacity for large-size OTR tyres has been implemented, and the overall mining industry today is going through some difficult times, resulting in a lower overall demand.”

According to Tony Cutler, technical manager at Otraco International, it was Chinese growth and demand for commodities that initiated the earthmover (EM) tyre shortage in 2004, and it has been the drop-off in this demand, together with the expansion in US gas and oil produc-

tion over the past few years (adding to coal pricing woes), that has resulted in EM tyre demand sliding below current manufacturing capacity.

“Prior to the recent mining boom, large mines predominately operated one or more of the big-three, tier-one tyre brands (Bridgestone, Michelin, Goodyear) supplemented by the main second-tier manufacturers,” explains Cutler. “As demand for mining tyres grew – from 2004 – Bridgestone and Michelin were the first to expand their production capacity, mainly in the larger sizes covering 220t and ultra-class haul trucks.

“However, this was totally inade-

quate to satisfy growing global demand and a range of EM tyre manufacturers – approximately 40, mainly Chinese, but also American, eastern European and Indian – sprang up or expanded their output. While traditional manufacturers demonstrated a remarkable level of pricing restraint, this was not so for many of the newcomers (manufacturers and distributors) and price gouging became rampant.”

The global financial crisis that began in August 2008 caused an overnight drop in demand

Right: Otraco’s tyre training centre in Perth, Australia, which it says was built to address the Australian shortage of quality OTR tyre fitters, and to reinforce a culture of safety and best practice

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for commodities, a sudden reduction in mining output and the requirement for EM tyres. Meanwhile, Bridgestone and Michelin had increased large mining-tyre production by 20% since 2004. Michelin started production from a new mid-range mining-tyre plant at Campo Grande, Brazil, in 2007 just as Bridgestone was starting construction of a new large mining-tyre plant at Kitakyushu, Japan.

Demand for commodities returned in 2010, with mining-tyre demand again outstripping supply. By mid-2011, combined EM tyre production from Bridgestone and Michelin had increased by 40% since the start of the mining boom in 2004. Bridgestone had brought Kitakyushu on stream in 2009, completed two subsequent expansion phases and was commencing a third one in late 2010. In the US, Michelin had continued expansion of its Lexington facility in South Carolina and Goodyear had started production of 63in (1.6m) ultra-class tyres at Topeka, Kansas.

In 2012, Goodyear acquired 100% ownership of its Nippon Giant Tire (NGT) subsidiary in Tatsuno, Japan, and invested US$250 million to upgrade and expand its tyre manufacturing facility.

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Since the second half of 2011, commodity prices and EM tyre demand have dropped by almost 30%. Philip Wang from Techking Tires says: “Most major OTR tyre manufacturers, including tier-one brands, have enough production capacity and inventory since 2013.”

Current spot pricing of big-three tyres from third-party suppliers has fallen about 70-80% from its absolute peak in early 2008 and by 60-70% from its most recent high in early 2012. For example, according to Earthmover Tire Group, third-party pricing of a 53/80R63 tyre was US$270,000 in January 2008, US$160,000 in April 2012 and is currently less than US$60,000.

Dennis Sladek, head of sales and marketing at Rösler Tyre Innovators, adds: “The ongoing demand decrease has resulted in significant excess supply and to severe pressure on prices. The price for a 40.00R57 premium-brand tyre on the spot market was above US$100,000 – today it is available below US$30,000.”

As a result of the end of the global tyre shortage, lead times are not that long anymore. Christian Luther, key account manager, global operations UGM at Continental, says: “The current

downturn in the mining industry goes hand in hand with a reduction in overall tyre demand, which also makes it easier for customers to get the amount of tyres they need in a more reasonable lead time than several years ago.”

Many mining companies and dealers also built up an inventory of tyres in the past to cope with potential scarcity in mining-tyre supply, and are now able to draw down that inventory. As a result, manufacturers are working at trying to balance the production throughput with the new, lower demand.

Demand is expected to pick up again when commodity prices rise but, mainly due to the extra manufacturing output potential that has come on line over the past few years, it is unlikely that the mining industry will again experience the critical shortage levels seen over the past decade in the foreseeable future.

sourcing Mining companies’ attitudes to tyre sourcing have changed a lot in recent decades, and again in the last two years.

Johni Francis, global product manager at Titan Tire, explains: “Attitudes toward sourcing tyres have primarily been shaped by trends in pricing and supply over the last decade. Shortages have been cyclical, typically occurring every few years.”

Until the mid-1990s, mining companies generally sourced their tyres from local or regional suppliers, and prices could vary greatly depending on which part of the world they were bought in.

However, Cutler says: “One by one, the majors initiated global purchasing – not only of mining tyres but of other inputs and services such as fuel, explosives, flights, etc.” As a result, such companies typically buy their tyres on a set-price basis, no matter where in the world they are destined for.

Sladek remarks: “The focus is on procurement, with many mining companies shifting towards centre-led supply-chain organisation models that enable more effective management of materials and services purchases.”

Cutler explains that until the tyre-supply crisis became keenly felt in 2005, many mines – certainly those that had good tyre-management programmes in place – had supply contracts that incorporated performance-based warranty provisions with all of the big-three producers and, in some cases, tier-two companies as well. This allowed for ongoing performance comparisons between tyre brands, which was particularly important for the site’s major

41

Main photo: a close-up of the Magna Tyres MA02 tyre for articulated dump trucks

“The majors initiated global purchasing – not only of mining tyres but of other inputs and services such as fuel, explosives, flights, etc”

September 2014 15/08/2014 10:41

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Tyres

haulage fleet, which often accounted for 75% or more of the site tyre bill. Tyre contracts tended to run for a maximum of three-year terms.

“However, the supply crisis changed that,” notes Cutler. “If a mine, or mining corporation, wanted guaranteed supply of at least a portion of its tyre requirements, then it often had to partner with a single manufacturer for a minimum five-year contract with warranty restricted solely to materials and workmanship. Additional requirements were often sourced on the spot market from tier-three producers (usually in bias-ply construction) or third-party distributors. Manufacturers offered investment in tyre production capacity, and miners encouraged tier-three producers to develop radial-ply technology in the larger 57in and 63in tyre sizes. There was a general willingness to take some level of risk with unproven brands.”

The advent of the global financial crisis gave buyers more leeway in the selection of suppliers. By 2010 demand was again outstripping supply – while the major miners were generally receiving adequate provisions from one or more of the big-three, the medium to smaller players still had to rely on alternative manufacturers and distributors from time to time.

Since 2012, the situation has swung the other way and become a buyer’s market, with many mines able to shop around to seek the best deal. A spokesperson from Magna Tyres says: “The appearance of more providers and manufacturers has changed the market situation with the effect that mining companies have more alternatives compared with 10 years ago.”

During a shortage, mine sites usually have larger orders and stock tyres at their sites, whereas when supply is adequate and lead times are short, most mine sites purchase on an as-needed basis.

Luther comments: “The supply shortage during the last decade also showed how important it is for the mining companies to ‘invest’ in their supplier base and assure that there are several players on the market that can fulfil the demand they have to keep the operation running with highest efficiency.”

However, Cutler notes: “Tier-three tyres are being abandoned in the larger sizes where, despite 10 years of development, they have been unable to match, or even come close to, the tier-one producers in terms of tyre-life potential.”

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Titan Tire testing its new STL3 low sidewall (LSW) technology at the Cedar Lake mine in Alabama, US

ManageMent Tyres are one of the most important factors for the successful operation of haul trucks and other mining machinery.

They are a huge operating cost in any surface operation, and the sheer size of the investment warrants particular management and operational attention to ensure the best return on that investment.

Studies show tyre costs can exceed 25% of total haul-truck operating costs per tonne, and total tyre service and replacement costs over the useful service life of a haul truck can exceed the original purchase price of the truck.

The way a company runs its tyres often has more to do with tyre supply than it does the market conditions of the mining sector. During a tyre shortage, mine sites are much more careful with their tyres, and they are more apt to try to prolong tyre life by retreading and running their tyres within acceptable tonne-kilometre-per-hour (TKPH) levels. After the first tyre shortage, the importance of a professional tyre-management programme became stronger than ever before.

Sladek says: “Mining companies that did not pay too much attention to their tyres learned the value of proper tyre management, tyre repair, tyre service but also tyre retreading programmes have consequently risen several levels in their maintenance hierarchy.”

Allan explains: “In times of scarcity of tyres, tyre-management programmes designed to extend tyre life and proactive activities to prevent failures are very important. Similarly, the importance of quality repairs when damage occurs can allow the user to extend the life of a tyre rather than invest in a new one.”

When shortages are over, and tyres become more available, many of the

good practices that went into operations during the shortage should be maintained. They are all effective means of making the most of the investment in tyres. Eric Matson, manager, global field solutions, OTR at the Goodyear Tire & Rubber Co, says: “A good tyre-management and maintenance programme can make all the difference in lowering a mining operation’s overall cost of tyre ownership.”

With the current downturn in the mining industry, many mining operations, particularly in coal, are keen to reduce operating costs; increasing the fleet utilisation rate is one way to gain such improvements, which means that the tyre performance (or tyre lifetime) plays a significant role in reducing total cost of ownership.

Allan states: “Extending the lifetime or the performance of the tyres is very relevant in terms of increasing both the mine productivity and the return on investment of the tyres. Additionally, when mining companies are looking for ways to save on expenses, fuel costs can be greatly affected by whether or not the tyres are operating with correct tyre pressure.”

Matson says: “Because of their ‘mission-critical’ nature – and because tyres represent such a substantial investment – it pays for mining operations to do everything within their power to optimise their tyres’ performance. That’s why it’s important to establish maintenance programmes for mining tyres.”

Some mines however, mainly iron-ore operations, have opted to increase production at the expense of tyre and other equipment component life.

Francis suggests: “Now that the supply is once again adequate, mine sites are less concerned about being able to source tyres, and more concerned about boosting production levels, which

“A good tyremanagement and maintenance programme can make all the difference in lowering a mining operation’s overall cost of tyre ownership”

September 2014 15/08/2014 10:42

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Tyres

A Goodyear 63in OTR tyre

“It should be the task of every driver to report conditions that are not in line with best practice”

sometimes means running tyres beyond recommended TKPH levels.”

Cutler says: “This is fine providing that the consequences are properly costed and fully understood. For example, allowing road conditions to deteriorate will affect not just tyre and component life; it will also result in increased rolling resistance and impact negatively on average haulage speed and hence productivity.”

The correlation between tyre and truck-component damage is also not often understood. In respect of a haul truck’s interaction with a roadway, bench, loading or dumping area, tyres are the ‘front line’ component and damage to them is typically readily visible, often resulting in instantaneous failure.

Even where failure is not immediate, it tends to be a short-term process compared with that of second- or third-line

components such as suspension struts and linkages, and the chassis itself.

Hence when the condition of mining roads and working areas deteriorates, the rise in tyre damage cost becomes immediately evident. Cutler cautions: “Substantially more costly damage is being sustained by the truck’s suspension and chassis – although it will not manifest immediately and therefore is not as readily associated with any short-term deterioration in operating conditions.”

IncreasIng tyre lIfe There are a number of ways that mining companies can extend the life of their tyres to get the longest running time possible. Choosing the right tyre for the specific conditions of the mine is obviously important – this includes variables such as tread pattern, compound, load and speed rating – and

Tyre monitoring Mining operations should also track the performance of their tyres. One way of doing this is through tonne-kilometre-per-hour (TKPH) studies.

Matson explains: “Every mining tyre, regardless of application, has a specific TKPH rating that dictates how much weight the tyre can carry at a specific speed. This rating is the result of multiplying the vehicle’s average load by its average speed. Making sure that tyres do not exceed their TKPH rating can help optimise tyre performance and extend tyre service life.”

It is also possible to track variables such as inflation pressure or tyre temperature constantly by using a tyrepressure monitoring system (TPMS).

These are used to maintain constant and real time data on the air pressure and temperatures in a tyre. Allan says: “Every tyre has a range of acceptable operating conditions where the tyre can perform to its optimal lifetime.”

As tyres are worked hard, their pressure can increase and heat can build up, which results in them operating outside of the optimal performance range. A TPMS will allow for decisions to be taken in the pit before a catastrophic incident or damage is done to a tyre.

Magna Tyres cautions: “Tyre-monitor systems have always been a point of interest, but the way they operate under these extreme conditions is not always easy and subject to technical failures.”

Cutler agrees: “Unfortunately, for the majority of systems, the reality has not reflected the expectations. The main reason for this has been reliability issues – typically of the sensor/ transmitter units that are installed within the tyre air chamber. Other issues include the sizable resources that need to be dedicated to managing the system and a lack of analysis and reporting functionality.”

the choice will be dependent on the conditions of the mine site (including haul length and road inclination), the commodity being extracted and what equipment is used.

Air-pressure maintenance is also an important factor in maximising tyre life.

Tyres need the right air pressure to function at their optimal performance.

At an operation where pressure maintenance is very good, tyre costs will be 20-30% lower than on an otherwise identical operation where pressure control is poor. Hugo Morales, product marketing manager at Michelin NA Earthmover, stresses: “If no other tip is remembered, this is the one to note and to take steps to implement as quickly as possible.”

Over-inflation can lead to irregular wear, and under-inflation causes tyres to flex more, which results in internal heat build-up. Heat can cause a tyre’s components to deteriorate. Consistent, correct inflation can also influence fuel consumption.

Companies should regularly check and adapt inflation pressure if necessary to ensure it is correct for the application, with inflation checks part of every pre-shift vehicle inspection. The Magna Tyres spokesperson says: “Above all, mining operators are strongly recommended to respect the advised inflation pressure, maximum speed and maximum load capacity of the tyres in use.”

In addition, driver awareness is crucial to preserving the tyres – the tyre is engineered to exacting standards, and meant to be run within specific conditions.

Although an operator cannot necessarily control his or her environment, awareness of the factors that deteriorate tyre life can have a huge payback. For example, running tyres too fast when loaded, taking turns or corners at speed, and running tyres over- or underinflated are all areas that negatively affect tyre life.

The mine culture will influence the level and quality of training provided to operations and maintenance personnel to make them aware of how to maximise tyre life and minimise the risks associated with the tyre operation.

Operations that display the best cultures are typically those where culture is driven from the top down.

Morales advises: “Because the operators are on-site all the time, they see problems that need to be fixed, whether it’s in their pre-trip inspection or while operating the equipment.

“Managers and supervisors can draw their operators into the equation by

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asking for input and cultivating a team approach to tyre and vehicle maintenance. Operators should be kept in the loop on situations with their equipment or tyres, so they are aware when they conduct inspections or operate the equipment.”

Tyre-focused operator training is offered by various tyre manufacturers

and other tyre professionals to help companies to improve their tyre performance.

Regular inspections of the tyres will also help to pick up problems early.

Morales advises a thorough walkaround inspection of vehicles before beginning operation, looking for cuts, holes, cracks or any other damage to

Retreading Tyre repairing is commonly used to extend the life of a tyre following an injury. Certified tyre repairers can keep an injured tyre off the scrap pile and allow it to complete the rest of its lifetime.

Tyre retreading is part of a proactive tyre-management plan – the process involves applying a new layer of tread to a tyre that has worn down to roughly 20% remaining tread. The tyres are removed, remanufactured and have their tread restored to enable them to start a ‘second life’.

This can extend the life in excess of 40%-60%.

Sladek comments: “Tyre retreading has a long history and is an established business in many markets around the world. In Europe, for example, every third truck tyre on the road is a retreaded tyre. We believe that the same development will also happen in the mining industry.”

He adds: “An operator can easily cut down its tyre costs by 35% or more, just by starting to retread their used premium-brand tyres.”

Retreading is a complex process, which requires first of all that the tyre carcass is still adequate after its first life, and also that it was used under good operating conditions. Retreading can be very effective for mines where the conditions allow

for tyres to be worn out (rather than damaged).

Luther says: “Retreading is more common in surface mining than it is in underground mining, which is related to the even harsher operating conditions in underground mines, where the tyre carcass damage is a common reason for premature tyre failure.”

There are other limitations – for example, a tyre is only eligible for retreading if the belts are still intact. In addition, most retreaders will not apply tread to a tyre that has already been through the process once, or tyres that have had a sidewall repair in the past. It also requires a well-established retreader and a tyre-management operation that is prepared to plan ahead for the best results.

However, Francis notes that retreading is most popular during tyre shortages – right now, the supply is adequate and the prices are low, so retreading is not nearly as popular as it was two years ago.

“The decision to retread versus buying new comes down to the cost per hour,” he explains.

“For the cost to retread and the associated equipment downtime, it just doesn’t make sense to retread when tyre prices are this low.”

tyres or wheels that have the potential to grow into larger problems over time.

In addition to the condition of the tyre itself, good maintenance of the site’s haul roads can help to prevent tyre punctures. The better the roadways are designed and maintained, the fewer tyres will suffer from cuts, punctures and other damage.

The hardness, sharpness and competency of the road base and sheeting material and how well the surface material is maintained all influence tyre life. Roadway and working-area design is also important; including adequate road width and manoeuvring area, constant and moderate ramp grade, adequate super-elevation of corners and properly designed roadway intersections.

A spokesperson from Nokian Heavy Tyres suggests a daily haul-road sweep to identify any issues. Luther from Continental adds: “It should be the task of every driver to report conditions that are not in line with best practice.”

Haul-road design should be considered in concert with the tread compound of the tyres being used.

Certain compounds are better suited to short hauls as opposed to longer hauls.

If used in the wrong application, tyres can be damaged beyond serviceability.

Cutler says: “A longer haul requires a more heat-resistant compound or, at the limit, a more shallow depth of tread – both of which significantly reduce tyre life potential.”

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TyREs

Tyre pressure monitoring at a site in Canada

chasing customers Dan Allan, senior vicepresident of Kal Tire’s Mining Tire Group, speaks to Carly Leonida about the challenges and risks associated with following mining customers into new jurisdictions

“As our relationships with customers are proven, we are often asked to ‘follow’ them to new jurisdictions”

Dismounting right rear inner tyre on Cat 793 haul truck

I

n order to have a sustainable future, it is essential for mining companies to ensure the continuous process of mineral exploration and development of new mines. The implication of this is that as high-grade orebodies become more difficult to find, mining companies are forced to venture into new areas of the world to secure reserves.

In certain cases, some of the richest mineral finds exist in areas torn with war, or with foreboding geography. The demand for minerals and decent returns for shareholders creates new mining operations in sometimes very ‘foreign’ places.

Mining companies owe their existence and future to the development of these orebodies. They understand the implications of chasing these opportunities and, as such, they have experts who help them navigate through the various levels of risk involved (both perceived and real) to secure these finds.

In some cases, the risks are cultural; for example, where a mining company must learn how to do business in a nation very different from its own. The business customs might be very contrary to what is considered ‘normal’, and the concept of adapting the company’s work ethic, culture or practices may prove exceptionally difficult for local employees to accept.

In other cases, there are nations whose borders are only just starting to open up to foreign investment. The political regime may have changed, but challenges exist in presenting a business opportunity that is both good for the company and good for the populace. In some instances, the nation may have been through long periods of conflict and poverty, resulting in a world perception of security that is less than flattering.

A mining company also needs support services to keep it running. Large-scale miners that are chasing these ‘new frontiers’ have access to the expertise, people and processes that allow them to evaluate and effectively manage and mitigate these risks, and help them to navigate areas of socio-political difference.

While it is extremely important for operating mines to utilise the support and skills of the local population, the fact is that orebody discoveries are often in locations where expertise may not be readily available. For some of this

expertise, mining companies need other professionals to join them on their journey.

vEnTuRing FoRTH For many organisations that support mining companies or rely on the mining industry for their business, the idea of stretching services too far from their core markets or centres of expertise can be a difficult thing to grapple with.

Many of these companies have built a critical mass of expertise in a specific country or geography. As the mining world changes and shifts occur in jurisdiction focus, these supporting companies also need to develop a new adaptive skill and make their expertise transportable, sometimes to very remote locations.

Dan Allan, senior vice-president of Canadian firm Kal Tire’s Mining Tire Group, spoke to MM about his company’s experience. “At Kal Tire, we provide customers with tyre-management experience and expertise. We have a specialised area of knowledge that has been amassed over the past 40+ years.

We have worked hard in our current locations to train people to work safely, to develop skills and pass those skills along to new team members,” he explains.

“As our relationships with customers are proven, we are often asked to ‘follow’ them to new jurisdictions, where our expertise can really make a

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TyREs

“Larger issues too, such as the involvement of government and taxation; many times the outcome is the

same, but the way you must work through the system is very different.”

Now, like most other companies, Kal Tire looks to find ways to evaluate and mitigate risk before pursuing expansion into new markets. In other instances, this risk analysis also serves to put some risks into perspective – specifically security concerns – so that the enthusiasm of a new business never outweighs the very real necessity to ensure a safe working environment for team members.

Allan notes that Kal Tire is seeing

A Kal Tire supervisor completes a team safety audit

tracce.com

difference to operations – even if it is simply the peace of mind that we will take care of a portion of the operation so they can focus on the business of mining.”

For a company such as Kal Tire – and many others with businesses that mines depend on – the idea of risk has an entirely different meaning. For small- to mid-sized support or service companies, a request from a well-respected customer to help them in a new location presents a very difficult proposition.

Smaller companies may not have much experience in foreign operations or access to experts in the field, and they may be influenced heavily by what they have heard about risk in a specific place, rather than what is true.

In the past, the majority of risks associated with these types of ventures were contractually or financially related.

Today, companies are presented with risks that cover political uncertainty, cultural variety, and perhaps even issues of corruption and personal security.

The first port of call for companies when presented with this type of opportunity is usually the OECD Guidelines for Multinational Enterprises.

These detail not only the risks, but also the responsibilities that an organisation has when moving abroad. Mining companies have far more visibility and resources to deal with these issues than smaller enterprises, yet in the spirit of serving customers, many service providers are making moves away from their homelands and expanding their businesses.

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LEaRning cuRvE At Kal Tire, this approach has led the Canada-based organisation into 17 countries over the past 40+ years, each with their own unique challenges. Allan says that Kal Tire’s early expansions exposed the company not only to the ‘normal’ business risks of quoting and executing on a suite of services, but also pushed it to figure out how it could take its successful approach from Canada and apply the principles to business in a different culture.

“Our first push into Chile, for example, took many years to get right.

It paved the way for future expansions, but some lessons were learned the hard way,” says Allan.

“Chile was Kal Tire’s first opportunity to go outside Canada, and when you move outside your own culture, the first of many lessons you learn is perspective – what’s acceptable and what’s not – different cultures have very different expectations.

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TyREs

Visual inspection of a scoop-tram tyre in an underground mine in Mexico

“If you’re going to go frontiering, do it with customers who you trust, because they will share important information and resources with you”

more and more requests for support in new jurisdictions. The company recently entered into Suriname at the request of its client Iamgold. “We also recently went in on a single property in the Democratic Republic of the Congo (DRC), and we’ve been asked to expand our presence there,” he explains.

“We’ve had various other requests from customers moving into Burkina Faso, Liberia, Angola and Papua New Guinea. We can expect to see this wherever there is mining and exploration going on. Where there are large reserves, sooner or later the international mining houses will be there.”

BEsT pRacTicE So what steps can service providers take to assess these types of opportunities and make an informed decision? “When we decided to look at Suriname, we enlisted the help of a risk-management firm,” says Allan. “They perform country-wide risk assessments and give us an idea numerically and graphically of the risk ratings between countries so that we can get an idea of relative risk.

“From there, we look at those risks, we look at what can be mitigated and things that could be problematic for us, either because they involve team-member safety issues which we can’t mitigate

or because they are substantially against our ethos, for instance, corruption or large-scale violence.

“If we are interested, then following that we will arrange a site visit for members of our senior management team so we can get a first-hand look at the customer site, speak to the local people and gain some knowledge of the area. If it’s still interesting, then we prepare a proposal to put before our board of directors,” explains Allan.

For Kal Tire, these steps are about putting governance into the decisionmaking process. “We present our directors with a number of options and, if we choose to pursue an opportunity, then we’ll confirm that with the customer and begin to implement the necessary risk-mitigation strategies,” says Allan.

“That’s really where we use input from senior management, the board of directors and our local leaders to decide how many of the risks we’ve identified can be mitigated, and if that’s substantial enough to make sure that we’re protecting our teams when they’re operating in the area.”

Once it has set up a new operation, Kal Tire then follows up on its risk-mitigation actions at regular intervals to check whether the circumstances have changed

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and assess if further action is necessary.

“It’s an ongoing process, because circumstances can change very quickly,” Allan adds. “A case in point is somewhere like Liberia where there has recently been an outbreak of the ebola virus. If even the best mitigation strategies would still leave our team exposed, then we’ll withdraw pretty quickly.”

In other instances, the timing might not be right to pursue the opportunity, and Allan stresses that Kal Tire is not afraid to walk away if this is the case.

“For instance, if there’s large-scale violence or a war, then we’ll stay away.

We look for places where we can build a business sustainably,” he says. “What we’ve tried to do over the past few years is formalise the risk assessment and decision-making process, because we’ve found that once we enter a jurisdiction, we start to identify more risks that need to be mitigated. However, if we do that beforehand, then we can prevent some of these things becoming larger issues.”

sound advicE Allan details one of the most valuable lessons Kal Tire has learned: “If you’re going to go frontiering, do it with customers who you trust, because they will share important information and resources with you.” He explains that in the autumn of 2013, a mining customer asked Kal Tire to make an initial evaluation of a potential opportunity at a site in the DRC. “We were selling tyres to them from Zambia into the DRC. They were having substantial problems with tyre performance and were training an indigenous workforce, which didn’t yet have the necessary skills to tackle the issue,” Allan explains.

“So they asked us to come and see what we could do to help. We went through the risk-mitigation steps above, and then in late 2013, five of us went on a site visit to talk with the customer’s site manager and explore the local area.”

Allan believes that in cases such as the DRC, it is easy for an individual’s perception of the risk involved to be tainted by media coverage. “So many times, what you see is a lot less extreme than what you’re led to believe,” he says. “It’s amazing how a site visit can change your perspective. It makes talking about the opportunity in hand so much easier – especially when you see, and can build trust, in how well the local team is operating.”

However, he is quick to point out that a short site visit of a week or so will not teach you everything you need to know.

“That’s why you really need to rely on

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people who have experience there. In this example, the mine owner has expatriate workers in the DRC, and it has an evacuation plan should anything happen. We as a service provider are too small to arrange anything on that scale, so by partnering with our customers, some of those security concerns can be effectively mitigated.”

skiLLs dEvELopmEnT Other challenges in new markets centre on building a base of expertise. “Our learning management system is deeply rooted in our culture. We take that programme forward and bring expatriates with the necessary expertise to new operations to help train the workforce,” says Allan.

Kal Tire uses the curricula that it applies to employee skills development in established jurisdictions such as Canada and adapts them to train new recruits or enhance the skills of experienced employees.

“There’s no quick fix to the skills problem – that’s something you really need to understand when you go somewhere new,” says Allan. “Some of these workers were farmers one day and miners the next, so you have to start from scratch and be really patient.”

Allan adds that when mining companies (and service providers) move into a new location, they often feel a responsibility, and in many cases are

legislated, to help support local economies; this includes the skilling and development of people, and the care and health of family members of employees.

“As we saw in the DRC, this involved setting up schools and hospitals,” he says. “It’s a huge amount of responsibility and I think that sometimes mining companies aren’t recognised enough for this contribution.”

Despite the challenges and risks involved, for Kal Tire, growth into new markets is both exciting and a permanent part of the company’s future. “The world is a big place, and customers need our help in many more locations than in the past. We need to do everything we can to be ready to help them,” concludes Allan.

Lessons learned Experience is everything. MM asked Allan what advice he would give to companies in a similar situation looking to enter new markets to support clients.

• Be prepared for the cultural impact. “An organisation that’s not prepared for or tolerant of cultural differences is in for a very difficult time,” Allan says. “Sometimes it can be a very expensive financial lesson. We’ve learnt a lot about respecting and expecting other people’s cultures.”

• Employ the services of risk-assessment experts. “Many times you think you know a place, but you really don’t, so it’s great to get an objective view of what’s happening in a country. Don’t rely on your own perceptions or media experiences,” Allan cautions. “When you identify issues, look very seriously at what you can do to mitigate them. You can never eliminate every risk, but there’s a lot you can do to lessen

•

their impacts or make them more tolerable for people. Once you’ve taken mitigation steps, follow up on them later to see how the risks have changed. Many times people think they’ve got mitigating measures in place, then later find that they’ve overlooked a couple.”

Make sure you know and trust your customers. “If you have a great relationship with a customer, you can share things that will make that leap to operating in a new area easier than it could be otherwise. Mining organisations have done it all before and are better prepared than you are,” states Allen. “Mining companies undertake risk assessments on a regular basis and they have staff dedicated to it full time. Smaller companies like us don’t have those kinds of resources, so we have to look for ways to ensure the same level of diligence and reduce the cost involved.”

Tyre inspection and air-pressure checks on Cat 797 haul truck in northern Chile

“The world is a big place, and customers need our help in many more locations than in the past. We need to do everything we can to be ready to help them”

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Pit to Port

Shiploader, wharf and platform for Fortescue Metals Group in the Pilbara, Western Australia

No longer the weakest link

“The aim is to increase throughput across the whole mining value chain, while at the same time reducing product inventory and reducing operating expenses” Ailbhe Goodbody looks at the advantages of optimising material movement across the mine value chain

T

he main aim of taking an integrated approach to processes and systems involving material movement from pit to port is finding solutions to minimise cycle times and operational variation.

If thought of in terms of the theory of constraints, the aim is to increase throughput across the whole mining value chain, while at the same time reducing product inventory and reducing operating expenses – making the company more profitable overall.

An integrated approach provides a much better understanding of the complex systems and processes at work between the mine site, logistics operations and the port. It also means that the roots of the problems become easier to identify and correct.

A focus on reducing cycle times and operational variation means that assets, such as rolling stock, cycle more efficiently and fewer assets are needed to perform delivery tasks. This lowers the capital and operating costs per tonne of product, and helps mining companies to become more competitive in the global marketplace.

Proper integration planning upfront will ensure that the wastage of time, resources and capital in the whole process is eliminated and the cost of improvements/redesigns later on will also be eliminated. High-cost items such as demurrage for shipping can be reduced.

In addition, activities such as maintenance can be better co-ordinated across the supply chain to

minimise the capacity loss for the total logistics system.

Technology is an important component of resource-integration efforts. In the past, it was difficult to gather data, and visualise and optimise material movement across a mining value chain that might encompass many mines, plants, refineries, smelters and logistics.

The traditional silo structure of designing and modelling pit-to-port operations creates a risk of misaligning the subsystems – including material transport to the port via rail/road/ conveyor/barging and within the port itself – which will cause the planners to over- or under-estimate the performance of the system, and therefore under-design or over-capitalise the

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system and its capabilities. With the better networks, data collection, storage and processing available today, a more integrated approach is easier to achieve.

There is currently a range of computer simulation software, for example, that can model how the product moves from pit to port, to help better understand the potential capacity of the supply chain and how it can be improved, and minimising the risk faced in such a complex system.

Johan Fischer, senior consultant at Fischer Consulting, says: “With the use of simulation modelling, mining companies can plan for factors such as tides affecting rivers and shallow berths, rail, road, river and port traffic, maintenance, breakdowns and the butterfly effect – delays in one part of the system and the effects thereof on the opposite end.”

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This more realistic picture of the system’s capacity makes it easier for the merits of alternative infrastructure configurations to be assessed, as it includes a greater range of system elements to interact in its calculations.

The downside of such integration is related to the relatively high spend on studies, interpretation of the results and the implementation of solutions. In addition, the degree of informational flexibility offered by the integration of the processes and systems is paramount as the dynamic of the market could make the integration of processes redundant in the short to medium term.

Best Practice By definition, the optimisation of the mining supply chain is related to a maximisation of output (revenue) and minimisation of effort (costs), while maintaining a robust operational plan.

The system processes and capacity should be evaluated as a whole, using net present value (NPV) versus capital expenditure (CAPEX) trade-offs and simulation modelling. Fischer recommends: “Avoid using rules of thumb such as ‘10% of production needs to be in the port stockyard’, as there are better ways to determine the optimal storage capacity.”

Best practice includes the implementation of a solution to optimise schedules across the chain, then implementation of performance-management solutions to execute and improve. Greg Johnson, senior manager, operations optimization at Schneider Electric’s mining & metals center of excellence, says: “We call this the integrated planning and optimisation solution. This solution works on the core business of increasing throughput, while reducing operational expense.”

Designing the overall supply chain as a ‘pull system’ can help to make the port more efficient and optimise the overall supply chain at one of its most critical points. Pull systems, which are also known as ‘cargo assembly’, avoid the kind of large stockpiles of product common at traditional ports. Trains, or road trains, run on a fixed schedule to feed either smaller stockpiles or ideally load the products directly to the ship.

Pull systems involve a higher level of operating precision and synchronised co-ordination, but if achieved successfully then the savings for port operations costs can be substantial. As they reduce the port’s requirement to store stockpiles, pull systems help to shrink its land footprint.

Rob McAlpine, global freight rail director (Brisbane) at AECOM, explains: “Pull systems are about aligning the right type of product, with the right transport method at the right time for the right ship.”

The alternative approach is a ‘push system’, where the product is transported by rail to the relevant product stockpile at the port. This enables the efficient cycling of rolling-stock assets, but requires a greater land footprint at the port. The best operating model for a given supply chain depends on the specific circumstances.

The mining supply chain also needs to be flexible enough to allow for the maximisation of market opportunities during times of increased demand, and supple enough to allow for profitability during periods of market contraction.

Mirel Rusu, managing director at URB Mining Logistics Consulting, says: “Operationally, identification and relief

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“Pull systems are about aligning the right type of product, with the right transport method at the right time for the right ship”

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Pit to Port

Large stockpiles are common at traditional ports

“The trick is to balance the risks, current capabilities and goals in order to achieve the best commercial outcome”

of bottlenecks should lead to capacity optimisation. This is harder to achieve when the supply-chain infrastructure has multiple stakeholders with diverging interests, and easier when the supply chain is controlled by one entity only.”

Due to their interconnected nature, supply chains are only as strong as their weakest link. It is important that the system operator has an effective root-cause method of performance reporting, so that management focus can be directed to the most value-adding activities.

For instance, a poor locomotive performance with several breakdowns in service during a working day can impact other parts of the system, manifesting itself in a situation where train paths are ‘lost’ and leading to queuing of trains and a loss of system momentum. In some cases, this can result in a train cancellation due to crewing availability.

McAlpine notes: “At the port end, ships can be delayed at great cost as a result of demurrage charges. So a simple event like a locomotive failure can greatly affect the performance of other parts of the supply chain.”

A train carrying coal as part of the Central Queensland Coal Network

On the other hand, Paul Robson, director at SmartWorker, gives an example of a client – a major port authority responsible for the cargo handling of coal to overseas shipping routes. The ship arrived and docked at its nominated port, and was loaded with coal.

He explains: “However, the ship missed the ocean tide and was unable to leave on schedule. It had to stay docked for an extra six hours until the tide turned, so the entire supply chain endured a monetary hit.

“How was this anything to do with the mine site? Simply put, the cause was a domino effect from the start. The coal loading and train transport was delayed by 1.5 hours. The coal train then had a half-hour wait to unload at the port. The conveyor belt at the port had a one-hour shutdown to adjust a roller.”

streamliNiNg advice A good starting point for mining companies that are planning to streamline and integrate their operations is understanding how the operational goals align with the company’s statement and mission. Long-term goals

are achieved through decisions affecting short- and medium-term activities.

Some mining companies would benefit from streamlining and integration in the short term, some would benefit in the long term, and there may also be some operations where due to certain parameters the costs would outweigh the perceived benefits. The specifics are essential in this line of work.

Rusu says: “My advice always relates to specifics of the customer. The trick is to balance the risks, current capabilities and goals in order to achieve the best commercial outcome.”

Planning the streamlining well, and not rushing, is crucial for the system to work. Robson suggests: “Focus on the big-ticket items while trading off the benefit. Hundreds of vendors will promise the Earth in operational savings in streamlining operation time and costs, and the majority will and can do this, but these systems and implementations are only as good as the staff driving them.

Experienced and well-trained staff can drag every last drop out of performance.”

Fischer says: “Start with the process today. Cost wasted on inefficient systems will be lost forever. Use the correct tools and people to evaluate the process and do not underestimate the value such a project will bring; with such complex systems, savings that you have not thought of could arise.”

While the range of methodologies and technologies for optimising the mine supply chain is growing increasingly broader and more sophisticated, it is important for miners that their optimising efforts remain focused on minimising cycle times and operational variation.

A vision should be created, and support built for the changes that need to be made. There is a lot of help available for this from vendors and consultants. A consultant can work closely with a mine operator to identify the sources of operational variation in supply chains and to jointly develop strategies to lower cycle times and operational variation. Consultants can support this strategy work with measurement systems and change-management processes that are fundamental for effective execution.

McAlpine explains: “For instance, a simulation team typically works closely with operations managers of client organisations to ensure that the modelling is realistic and reflects the real-world factors affecting performance.”

People, processes and technology

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need to be aligned. Without these three factors working together, resource-tomarket optimisation will not be successful.

Johnson says: “Start with the basics.

You need to have a plan, execute against the plan, and analyse variances in order to improve in the next cycle. Once there is an understanding of these processes and people are committed to them, you can look at technology and systems.”

integration in a downturn Getting costs under control will always be a focus for mining companies, but this is particularly the case in downturn periods such as the one industry has recently experienced. This has resulted in a reduction in capital spending, but operational effectiveness is now more important than ever.

As streamlining and supply-chain integration generally deliver long-term cost savings, and increased visibility through the supply chain facilitates better supply-chain management, it is natural for more companies to examine this opportunity. This is particularly true for the larger companies; however, the uptake in smaller companies varies a lot depending on their commodity and current development focus.

Fischer comments: “We have had instances [with juniors] where the mineral logistics were considered to be ‘easy’ or ‘we will quickly solve it when we get there’, which led to them underestimating the risks and complexities.”

Evaluation, implementation time and costs are the key elements in this equation. Rusu says: “I’d say the current downturn acts as a natural selection tool.

Marginal operations set up in the effervescent market conditions of a few years ago by executives with strong will but little supply-chain understanding would pay the price and would fail to survive.”

trends Streamlining operations makes sense as long as it delivers cost savings and adds to the overall operational flexibility. The visibility of inventory, production, maintenance, energy and environment can be integrated into a single ‘value chain operations view’. Each discipline and each work centre are no longer being totally managed in isolation, but considered in the overall context of the operation.

New IT around mobility enables virtual teams from vendors, miners and other experts to work on problems. Johnson predicts: “In the future, we will see IT impacting even more on these types of

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solutions with services, not just software, delivered from the cloud.”

Automation will most likely continue to have an important role in both increasing the supply chain’s efficiency and safety.

McAlpine says: “Taking trains as an example, there is an obvious benefit in lowering the labour costs of train crew, but the total benefits are much larger and relate to operating assets exactly as they are designed to be operated. This can create lower fuel and energy consumption, lower wear and tear and the associated rolling-stock maintenance costs, and cycle-time reductions, which enable more product to be transported for a given level of rolling stock.”

Automation also eliminates human error, which is an ever-present safety risk in pit-to-port operations. Even the most diligent of employees can have a temporary lapse of concentration that creates the potential for a major safety incident. McAlpine explains: “An example would be a train driver that passes a signal at danger, creating the potential for a collision between trains.”

There may also be an increase in remote operation management in future.

Rusu notes: “This follows the Rio Tinto lead in utilisation of driverless haul trucks, trains and some other materialhandling activities in the Pilbara. The lessons learned from these experiments would eventually pave the way to more complex operations such as undersea mining and space mining.”

Robson says: “One of our mining clients has set up laser telemetry devices on the top of their fixed lighting towers.

These hover some 15m in the air. Their purpose is to send data about stockpile quantity, location, size, height and mix to a centralised repository. Information is

then calculated and electronically transported to the grader driver to ensure that the top of the stockpile is suitably modelled for optimised loading and coal blending processing.”

Another trend in saving infrastructure costs is the potential for mining and train companies to share infrastructure and facilities, which can avoid unnecessary spending and cut costs through economies of scale. Common user infrastructure can be applied with appropriate operating protocols and commercial mechanisms to ensure fair access for all operators. A potential downside to this is that it brings more complexity to the pit-to-port systems, so the need for proper integration planning and feasibility studies are emphasised.

Good examples of such common user models include the Central Queensland Coal Network and the Hunter Valley Coal Chain in Australia, by which several train operators and multiple miners use the same track to get their product to market.

The Hunter Valley Coal Chain involves approximately 35 coal mines owned by 11 coal producers. Four rail providers deliver the product to more than 1,400 ships per year via three coal terminals at the Port of Newcastle in New South Wales.

Fischer states that this is also a major trend in Africa. He explains: “Pit-to-port logistics will be a key driver to project feasibility in the future, and the signs are already visible in the African iron-ore sector. Thus an integrated approach is necessary, not just between subsystems (transportation/port) or mining companies close to each other or with the same commodity, but regional user requirements from other sectors will start to play an increasing role in mine and logistics/rail development planning.”

The jetty and a ship at the Port of Onslow, Western Australia

“Pit-to-port logistics will be a key driver to project feasibility in the future, and the signs are already visible in the African iron-ore sector”

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PIT TO PORT

How to mine economically

Bryan Pullman, associate and senior mining engineer at Golder Associates UK, outlines how an integrated approach can cut operating costs A team of mining engineers, geologists and rock mechanics inspecting an excavation underground

“The solution is not to downsize in order to economise, as has often been tried in the past”

M

ining optimisation, in many ways a buzzword, is sometimes overused and misunderstood. But at its heart remains a valid question: how can a company operate a mine to make it reach its full potential?

Ultimately, most businesses judge the success of their optimisation by reading the bottom line. Simply put, if a company runs a commercially successful operation, it is performing well. Of course, it could always be doing better, and optimisation to a point of perfection is perhaps not possible – but that is no reason not to try.

An effective way to optimise operations is to investigate the full operating cycle of a project and identify any areas where it is functioning at a sub-optimal level.

To do so, operators need an integrated approach that detects precisely where margins can be increased, and how. They need to involve all disciplines engaged in planning, developing and operating a mine – and operators need a level playing field on which to develop their projects.

AN INTEGRATED APPROACH The mining industry uses optimisation software widely – but this is focused on the mining and financial performance, so just employing software is not enough optimisation in itself.

The real challenge is to understand how to utilise the software and, essentially, how to interpret the results in a multidisciplinary setting. Companies need a broad investigation into technical, geological, environmental, financial and social issues simultaneously to accomplish this.

A common issue is that a problem in one area originates from a cause in another. Optimal financial decisions may, for instance, sacrifice technical objectives – while fulfilling local stakeholders’ expectations may lead to financial compromises.

Golder Associates recently worked on a mining project in Canada where it examined the mine production rate of an integrated open-pit and underground mining project.

The company assessed the original plan through a feasibility study by engaging a team with a wide range of competencies: mining, infrastructure,

tailings, geotechnics, hydrology and hydrogeology.

The team investigated how each discipline would be affected by a higher production rate and found that the tailings deposition rate would increase and total storage capacity would be exceeded.

To avoid this, they proposed a compromise plan. This was designed to enable ongoing operation at a higher production rate than before, while also allowing time to construct and manage the proposed tailings storage facility effectively.

EXCESSIVE COSTS Two of the chief issues facing mining companies in their efforts to optimise are costs and schedules.

A key to optimisation is first to identify what is costing more than forecasts or comparable operations, and second to identify why.

There will normally be a reason why some costs are greater than usual, such as high transportation costs in areas with poor infrastructure or transportation links. Importantly, what operators need to know is whether their excessive

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pit to port

costs are caused by an input that can be changed, or managed differently.

To this end, Golder helps operators increase efficiency by identifying aspects of their activities they can manage better. The solution is not to downsize in order to economise, as has often been tried in the past. Merely cutting costs will only do just that: cut costs. It will not optimise operations, but can act in direct opposition to this and be a detriment to a project.

Instead, companies need to utilise their existing resources more efficiently.

Golder recently reviewed a mine design for an underground gold project in Africa. The review revealed that the designers had not fully considered certain geotechnical and mine design inputs that could minimise the capital costs.

For various reasons, they had neither used a rock mechanics numerical analysis to consider the impact on mine stability nor had they fully analysed the productivity or feasibility of the proposed mining method.

Therefore, a team of Golder geologists and engineers completed drilling and mapping investigations analysing the geology of the deposit and the geotechnical properties of the host rocks and surrounding rock mass.

They used this information to advise the mine designers about maximum stope dimensions, infrastructure offset distances and other design inputs that were then applied to the mine design.

Golder paste backfill engineers also adapted stability considerations to design an appropriate and economic fill system for the mine.

The mining engineers were then able to re-evaluate the deposit reserves, mine production capacity and develop a design and schedule that reflected the improved understanding of the refined mine configuration.

The updated design delivered a practical and economic means to exploit the deposit, and the project reduced operating costs and rationalised the extent of mine development.

Co-ordinating sChedules In addition to making operations more cost-effective, companies look to optimise project schedules. A good way to do this is to consider mining operations as integrated environmental and engineering projects from discovery through to closure.

This incorporates regulatory requirements with site planning and engineering, and minimises the time required to get permits for projects. It also co-ordinates the project design with the environmental assessments at the earliest stages of the project.

While such an approach may seem obvious, it is difficult to manage all facets of a project at once, so engineering design may not keep in step with the permitting and vice versa.

It should also be highlighted that environmental and permitting issues sometime derail projects without a sound technical justification. Optimisation in those instances involves education of regulatory bodies and stakeholders, so as to make the whole process seem less intimidating.

Golder’s strategy is to initiate workshops with engineers, regulatory expertise and owners to identify critical constraints and issues at the beginning of a project. By undertaking this step early, Golder develops a schedule that is aligned with regulatory requirements, engineering design inputs and the owners’ commercial needs.

When completing engineering and regulatory tasks in parallel, environmental assessments become consistent with engineering design assumptions over the life of a project, as well as including design mitigation measures to address significant environmental and social concerns.

This also reduces the time required to position a site for development, construction and production. Golder has successfully applied this process to uranium projects in Canada, where the regulatory process is known to require significant regulatory consultation.

regulatory instabilities As an extension of the permitting risks, operators also need to be aware of political instabilities in certain countries.

Unfortunately, the world is not neatly organised in business-friendly governance units, but instead in more or less stable political states. This means that operators need to consider certain regulatory instabilities on their way to optimal performance, and these will vary from country to country.

Operators therefore require country-specific strategies to optimise production in these locations. Importantly, changes in government policy or inconsistent taxes can have an immediate impact in the middle of a project.

If cost-effective mining projects are to succeed on a broad basis, the costs of regulatory compliance have to be comparable across different countries.

Running a well-trimmed and economically optimal operation will not necessarily give operators success if they are competing with sub-optimal and heavily subsidised projects.

This is a challenge for the whole industry in the face of governments – and is something that companies should always have in the back of their minds while making efforts to optimise in many jurisdictions.

optimal optimisation The term ‘optimisation’ is sometimes used too widely to describe any results of project analyses – but it still provides important lessons for operators to understand.

At its core, optimisation is the ideal to mine as economically and efficiently as possible within numerous technical, economic, environmental and regulatory constraints. There may be several ways to achieve this, but in the end, the results always show up on the bottom line.

The biggest challenge for projects on the journey towards operational efficiency is often to minimise operating costs without limiting operating capabilities. This is possible for operators if they take a multidisciplinary approach and recognise that effects in one area may have their cause somewhere else.

Importantly, this can take place across seemingly unrelated areas of a project, meaning that causalities may not be discovered without an integrated approach. Examining the full picture using expertise from all involved disciplines will not simply minimise or maximise a particular aspect of a project, but can lead to optimal optimisation.

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“If costeffective mining projects are to succeed on a broad basis, the costs of regulatory compliance have to be comparable across different countries”

Bryan Pullman (pictured above) is associate and senior mining engineer at Golder Associates UK

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Annual subscription – UK and Europe £95.00 (160.00 euros) Rest of the world US$170.00. Additional current copies are available to subscribers at £12 (US$21) each Mining Magazine USPS 005-829 is published 10 times each year with combined issues in Jan / Feb and Jul / Aug – by Aspermont Media, 120 Old Broad Street, London EC2N 1AR, UK. Printed by Stephens & George Magazines, Merthyr Tydfil, UK The 2014 US annual subscription price is US$170.

Airfreight and mailing in the US by Agent named Air Business, c/o Worldnet Shipping USA Inc, 149-35 177th Street, Jamaica, New York NY11434 Periodicals postage paid at Jamaica NY 11431 US Postmaster: send address changes to Mining Magazine, Air Business Ltd, c/o Worldnet Shipping USA Inc, 149-35 177th Street, Jamaica, New York NY11434 Subscription records are maintained at Aspermont Media Ltd, Chancery Exchange, 10 Furnival Street, London EC4A 1YH, United Kingdom Aspermont Media, publisher and owner of Mining Magazine (‘the publisher’) and each of its directors, officers, employees, advisers and agents and related entities do not make any warranty whatsoever as to the accuracy or reliability of any information, estimates, opinions, conclusions or recommendations contained in this publication and, to the maximum extent permitted by law, the publisher disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any person or entity through relying on anything contained in, or omitted from, this publication whether as a result of negligence on the part of the publisher or not. Reliance should not be placed on the contents of this magazine in making a commercial or other decision and all persons are advised to seek independent professional advice in this regard.

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