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April 2015
MINE SAFETY JUST HOW SAFE ARE
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Departments 5 Editorial
This month Editor Russell Noble talks about Mine Safety and looks at some countries with less-thanimpressive safety records and how mining companies and governments here in Canada take a more serious approach to protecting miners.
CANADIAN Mining Journal CONTENTS
MINE SAFETY
6 First Nations
This month Walter Naveau, Chief of Mattagami First Nation, looks at recent freight train derailments involving crude oil and says these types of repeated accidents are causing great concern over the longterm impacts to the environment.
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Safety is the First Priority
Safety blitzes detect some violations, but get quick responses.
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8 Law
A column by Norton Rose Fulbright Partner Madeleine Lowenberg on worker safety and the courts.
Fire and heat challenge rescue teams
Mine rescue teams undergo extensive training in preparation for the dreaded call into action.
9 CSR and Mining
A regular column by Michael Torrance, a lawyer in Norton Rose Fulbright’s Toronto office, on Corporate Social Responsibility.
30 Company Profile
This month’s featured company is Atlantic Minerals Limited of Port au Port, Newfoundland.
Hazard Awareness
Cementation Canada Inc. North Bay, offers practical guidelines for strainburst awareness for development miners and shaft sinkers.
Safety Management
DuPont talks about well-structured safety management systems and why they are vital to the mining industry.
34 Maintenance
Hitachi provides some guidelines on how to keep heavy mining equipment operating as specified.
36 In My Mine(d)
Comments on Health and Safety by Peter Kavanagh, a principal consultant, North America, for Dynamiq, a global emergency response company in Ottawa.
38 Unearthing Trends
A regular column by Ernst & Young LLP, Vancouver. ABOUT THE COVER The question of “Mine Safety” is clearly etched on the face and in the eyes of the miner on this month’s cover.
Coming in May
Canadian Mining Journal’s May issue focuses on “Coal and Oil Sands.”
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TRANSPORTATION & LOGISTICS
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Ports of all Ports
B.C.’s deep sea ports are considered world-class when it comes to handling huge volumes of cargo, including massive amounts of ore from the mines.
Ore from shore to ship
Newfoundland’s Atlantic Minerals expands its Lower Cove Quarry on Newfoundland’s southwest coast to improve exports via ship to offshore customers.
For More Information
Please visit www.canadianminingjournal.com for regular updates on what's happening with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com
www.canadianminingjournal.com
April 2015 • Canadian Mining Journal |
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Editorial
CANADIAN Mining Journal April 2015 Vol. 136 — No. 3 38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5 Tel. (416) 442-5600 Fax (416) 510-5138 www.canadianminingjournal.com Editor Russell B. Noble 416 510-6742 rnoble@canadianminingjournal.com Field Editor Marilyn Scales 613-270-0213 mscales@canadianminingjournal.com Art Director Stephen Ferrie
Production Manager Steve Hofmann
Print Production Manager Phyllis Wright Circulation Manager Cindi Holder 416 442-5600, ext. 3544 cholder@bizinfogroup.ca Publisher Robert Seagraves 416 510-6891 rseagraves@canadianminingjournal.com Sales Western Canada, Western U.S.A. and Quebec Joelle Glasroth 416-510-5104 jglasroth@canadianminingjournal.com Toll Free Canada: 1-800-268-7742 ext 6891 or 5104 Toll Free USA: 1-800-387-0273 ext 6891 or 5104 Group Publisher Anthony Vaccaro Established 1882
Canadian Mining Journal provides articles and information of practical use to those who work in the technical, administrative and supervisory aspects of exploration, mining and processing in the Canadian mineral exploration and mining industry. Canadian Mining Journal (ISSN 0008-4492) is published 10 times a year by BIG L.P. Mining BIG is located at 38 Lesmill Rd., Unit 2. Toronto, ON, M3B 2T5. Phone (416) 510-6891. Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved. The contents of this magazine are protected by copyright and may be used only for your personal non-commercial purposes. All other rights are reserved and commercial use is prohibited. To make use of any of this material you must first obtain the permission of the owner of the copyright. For further information please contact Russell Noble at 416-510-6742. Subscriptions — Canada: $47.95 per year; $76.95 for two years. USA: US$60.95 per year. Foreign: US$72.95 per year. Single copies: Canada $10; USA and foreign: US$10. Canadian subscribers must add HST and Provincial tax where necessary. HST registration # 809744071RT001. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-268-2742 x3544; Fax: 416-510-5138; E-mail: cholder@bizinfogroup.ca Mail to: Cindi Holder, BIG Mining LP, 38 Lesmill Rd, Unit 2, Toronto. ON, M3B 2T5 We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund toward our editorial costs.
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The word “safe” is all relative By Russell Noble
“A
ll 486 trapped miners found safe” is what the headline read on a recent story about an underground fire at a gold mine in South Africa. Normally stories about a mine fire, especially one as deep as the 2300-metre level as this one was at the Harmony Gold Mine’s Kusasalethu mine west of Johannesburg, usually result in tragic news and even worse headlines. Luckily this time, however, the Kusasalethu story is a good one for Harmony Gold Mines and its miners but as many of you know, that’s not always been the case for South African miners as they work in the deepest and more questionably safe mines in the world. Perhaps “questionably safe” are not the proper words to use because many South African mines have been notorious for being outright ‘dangerous’ because of their depths, their insane production schedules, and most of all, their lack of care and attention to safety for their miners. Like the Chinese in many respects, South African mines have a bad reputation for being the most dangerous in the world and until just a couple of years ago, the mining industry recorded more than 100 deaths per annum. That’s far too many, and while Mine Minister Ngaoko Ramatlhodi proudly announced late last year that the number of fatalities had dropped to its lowest in the mining industry’s history, with 84 deaths, he also admitted that deaths in the gold mining sector alone rose in 2014 to 44 from 37 in the previous year. The Kusasalethu fire could have easily set an all-time record had those 486 trapped miners not made it back to the surface. The electrical fire that threatened their lives could have probably been avoided through proper service and maintenance of underground equipment. I’m just speculating, but given past reports of deaths and their causes in the deep mines of South Africa, it’s probably safe to say that they
weren’t; at least to Canadian standards. In fact, I’m willing to bet that many of the mines around the world for that matter, wouldn’t pass what health and safety inspectors in this country consider ‘safe to operate’ conditions. In Ontario, for example, the Ministry of Labour is hell bent on making sure that the 38 mines currently operating in the province (with another eight scheduled to open in the next decade) meet its tough safety conditions. Much like a quarterback ‘blitz,’ the Ministry is sending in ‘special teams’ of inspectors and engineers to tackle the problems associated with mine safety. However, unlike in football where the ‘blitzes’ come relatively unannounced, those by the Ministry are pre-arranged but with tough consequences should the targeted mine not comply with health and safety legislation. In other words, mine owners and operators in Ontario are given a head’s up about what’s coming and that they’d better respond accordingly to what the government wants in terms of a safe workplace. During last year’s blitz, Ministry inspectors conducted 55 visits to 49 mines and related workplaces and issued 169 orders under the Occupational Health and Safety Act and Regulations for Mines and Mining Plants for various violations; including four ‘stop work’ orders. In addition to the 169 orders, the inspectors also issued an additional 256 orders for violations, including explosives storage and handling sections of the mining regulations. Many of those violations, according the Ministry of Labour, could have resulted in serious injuries to workers and the public. As of January 2015, however, approximately 90 per cent of the orders issued during the blitz have been complied with. Even with Canada’s safety reputation, there is still room for improvement but I’m sure if our safety standards were applied around the world, headlines with the word “safe” in them would appear more regularly when talking about mines. CMJ April 2015 • Canadian Mining Journal |
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First Nations
Freight transport, oil spills, and the James Bay Treaty No. 9 Agreement
Walter Naveau is Chief of Mattagami First Nation, an Ojibway and OjiCree Nation community located in James Bay Treaty No. 9 near Timmins, Ontario. He was first elected on April 10, 2007 and has served his community for four consecutive terms.
By Walter Naveau
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n the early hours of Sunday, February 15, 2015, my community of Mattagami First Nation (a signatory to the 1905 James Bay Treaty No. 9) bore witness to a CN Rail freight train derailment involving 29 newer-style tankers, known as CPC1232, carrying crude oil. The tankers, according to the Transportation Safety Board (TSB), were supposed to be an upgrade in the standards for carrying crude oil and other flammable liquids. Suffice it to say, of the 29 derailed tankers, 19 were breached, seven caught fire igniting 14 more tankers. It took six days to extinguish all the fires. In the end, the TSB estimated that more than 1 million litres of crude oil product was released into the ground or atmosphere. Because the derailment took place on our traditional territory and ancestral homelands we share with Flying Post First Nation, our Indigenous laws, existing since time immemorial, automatically became triggered. These laws, which pre-date Treaty No. 9, contain strong responsibilities to future generations, water/plant/animal life and natural resources. Elders saw the derailment as a serious breach of Indigenous natural law and are working towards mitigating the spill site and surrounding area in their own way. Although assurances were provided by the Ontario Ministry of Environment and Climate Change (MOECC), and CN Rail, that the crude oil spillage will not affect waterways, our community was advised to refrain from eating fish from the creek 6 | Canadian Mining Journal • April 2015
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adjacent to the rail line which is a tributary to the Upper Kasasway Lake and Mattagami River Watershed. This infringes on our ability to exercise our rights under Section 35 of the Canada Constitution Act, 1982, along with our pre-existing jurisdiction prior to Canada’s repatriation of its Constitution. Mattagami and Flying Post First Nations remain concerned that there will be undetermined long- term impacts to the environment and are not satisfied with the process the MOECC and CN Rail will be implementing to monitor the site in the short and long term. This is why we called for a direct role in monitoring the spill site and surrounding area and are working with Nishnawbe Aski Nation, our Treaty organization, to ensure this takes place. When the derailment happened, it raised a question amongst First Nations about just how much do Treaty Agreements, Section 35 of the Canada Constitution Act, 1982, and the United Nations Declaration on the Rights of Indigenous Peoples mean to government and the private sector (in this case CN Rail) as they discharge their responsibilities to mitigate, restore and monitor the environment when oil spills take place. It also raised a question on the respective role of First Nations as global trade opportunities intensify and the demand for transportation and logistics increase over our traditional territories and ancestral lands via rail, and as new regulations and legislation come into effect after the Lac-Mégantic disaster.
British Columbia Coastal First Nations, under the Great Bear Initiative, have raised similar questions regarding marine freight transportation as crude oil is being considered for transport to Asian refiners through the pristine waters within their territories. Of the many private sector businesses that exist in Canada, CN Rail proudly boasts as being one of the oldest with more than 100 years under their belt. In fact, many of the Nations who entered into Treaties throughout Canada were part of building rail infrastructure which today has become more unstable due to permafrost degradation as a result of climate change and over 10 decades of use. Days after the derailment first happened, up to present, it became clear to me that First Nations people are still considered as third-party stakeholders; and that the Treaties and Indigenous peoples’ domestic and international rights do not appear to be a real consideration. As Canada evolves its transportation policy and infrastructure in order to be competitive and align itself with global trade opportunities, this will be a major problem for First Nations whose lands and waters the transportation network cross. This issue must be considered in decision making, in the socio-economic agenda, and in the next federal campaign. It is time for Canada and the private sector to know that the cost of transportation includes major consideration for the Treaty Agreements and rights of First Nations. CMJ www.canadianminingjournal.com
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Law
Worker safety and the courts Madeleine Lowenberg is a partner, Norton Rose Fulbright, Toronto.
By Madeleine Lowenberg
A
dvances in mine safety take many forms. Two recent court decisions demonstrate a willingness to enforce the Occupational Health and Safety Act (OHSA) and its regulations by imposing jail terms against those who violate the legislation. Although the convictions did not arise in the mining industry, the decisions apply equally to mining employers. The decisions make clear that mine safety may be compelled through the imposition of jail terms against supervisors, officers and directors of organizations where health and safety compliance is proven to be deficient. The decisions In January 2015, two company directors of New Mex Canada Inc. were each sentenced to 25 days in prison after pleading guilty to safety violations that led to the death of a warehouse worker. Those violations included failing, as directors, to take reasonable care that the corporation complied with the OHSA and its industrial regulations. In addition to the jail terms imposed, both directors were ordered to take a health and safety course. The corporation employing the workers pleaded guilty to other offences giving rise to a fine of $250,000, to which a victim fine surcharge of $62,500 was applied. In November 2013, the court in R. v. Roofing Medics Ltd. and Paul Markewycz, sentenced the supervisor of a roofing company to 15 days in jail following the death of a worker on a construction project. A fine of $50,000 was imposed on the company, to which a victim fine surcharge of $17,500 was applied. Both accused were convicted of offences relating to the use of 8 | Canadian Mining Journal • April 2015
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fall-arrest systems. In addition, the company was convicted of failing to comply with statutory reporting obligations after the accident and Mr. Markewycz was convicted of furnishing a Ministry of Labour inspector with false information. Of particular interest in the decision are the following comments by the sentencing judge: The major reason a jail sentence is necessary…is to deter others from ignoring the legislated fall protection requirements. Others in the industry must pause to consider that…they may go to jail if one of their employees does not use [safety protection]…Since the industry has not been able to accomplish prevention to date, it is appropriate for the Court to send a message that offenders will be dealt with harshly. Lessons learned Both decisions serve as reminders that it is not only corporate employers that face liability for breaches of the OHSA and its regulations. Supervisors, officers and directors of mining companies face equal liability should they fail to comply with their obligations pursuant to the legislation. As a result of the movement towards imposing jail terms, those employed in the mining industry, including those who do not hold traditional ‘safety roles,’ should be more aware than ever of their obligations under the OHSA. This may prove especially challenging for officers and directors, who may not have direct oversight in the day to day operations of an organization. Achieving compliance, avoiding liability Supervisors, officers and directors should
review the OHSA and its regulations, including the Mines and Mining Plants regulation (“Regulation”). When an individual lacks a sufficient understanding of the obligations imposed by the OHSA and its regulations, specialized expertise should be sought out. Notably, it would be inappropriate to delegate one’s health and safety obligations to that expert. Rather, the expert should serve to educate and inform those with statutory responsibilities for health and safety. Board meeting minutes and health and safety committee reports should be regularly reviewed and acted upon, to ensure that identified health and safety deficiencies are corrected. Board of Directors should request regular reporting concerning health and safety compliance, so as to remain informed about incidents that may require corporate attention. All workplace parties should be trained in the basic requirements of the OHSA and its regulations. This is especially important in light of recent amendments to the OHSA which made training mandatory for workers and supervisors (including those employed by mining companies). Organizations should be prepared to support their supervisors, officers and directors by ensuring that appropriate monetary and non-monetary resources are dedicated to health and safety compliance. Recommended steps include, but are not limited to, creating and promoting health and safety policies and programs; safety training; monitoring the workplace for ongoing compliance with the OHSA and its regulations; and correcting identified health and safety deficiencies. CMJ www.canadianminingjournal.com
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CSR and Mining
Converging expectations at home and abroad Michael Torrance is a lawyer in Norton Rose Fulbright’s Toronto office.
By Michael Torrance
O
ccupational Health and Safety (OHS) is a core component of any Corporate Social Responsibility (CSR) strategy for Canadian mining companies, in Canada and abroad. Domestically, occupational health and safety is governed by provincial and federal laws and regulations. In Ontario, occupational health and safety legislation establishes an “internal responsibility system” approach to regulation, necessitating the development of OHS management systems, including policies, procedures, training and other due diligence steps, with the objective of taking every precaution reasonable in the circumstances to protect the health and safety of workers. With the introduction into law of Bill C-45, OHS has also been addressed in the Criminal Code of Canada, creating the potential for criminal liability for injuries or deaths in the workplace. For Canadian miners doing business abroad, particularly in countries that do not have an effective regulatory system, other standards beyond domestic laws may be relevant. The Canadian Government’s CSR Strategy for the Extractive Sector (the “CSR Strategy”) endorses the International Finance Corporation (“IFC”) Performance Standards on Environmental and Social Sustainability (the “IFC Performance Standards”), which contain detailed expectations regarding OHS. For example, IFC Performance Standard Two, Labour and Working Conditions, establishes an overarching obligation on adherents to provide a safe and healthy work environment, including management of physical, chemical, biological and radiological hazards, as well as gender specific threats, in the workplace.
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This necessitates the identification of potential hazards in the workplace and taking steps, including incident investigation, to eliminate them. Where elimination is not possible, other steps are required to manage identified hazards, such as the use of personal protective equipment. In addition, IFC Performance Standards compliant OHS management systems should address training, documentation and monitoring of OHS in the workplace. Compliance with the OHS elements of the IFC Performance Standards will also involve the application of “Good International Industry Practice” (GIIP), and the development of OHS management systems, which usually means the Environmental, Health and Safety Guidelines established by the World Bank (the “EHS Guidelines”). The EHS Guidelines provide a very detailed set of industry specific standards, including those dealing directly with mining operations. In addition to the OHS specific provisions of IFC Performance Standard Two, IFC Performance Standard Four details additional standards for protecting Community Health, Safety and Security. This includes developing emergency preparedness and response plans, monitoring community exposure to hazards and disease agents and ensuring the management of security personnel vis-à-vis their interactions with the community. Community security is also identified in the CSR Strategy as a human rights issue, addressed by other standards endorsed by the Government of Canada, namely the Voluntary Principles on Security and Human Rights and the Guiding Principles on Business and Human Rights. These standards are, by virtue of the CSR Strategy, part of the Government of
Canada’s CSR expectations for Canadian mining companies operating outside of Canada, particularly in developing countries. They are also reflected in international legal instruments such as the Occupational Safety and Health Convention, 1981 (No. 155), or the Safety and Health in Mines Convention, 19995 (No. 176), promulgated by the International Labour Organisation (ILO). Importantly, mining companies seeking financing for their operations in emerging markets may be also be contractually required to comply with these standards by their financiers. This will be true where financing is provided by Equator Principles Banks, the IFC or certain Export Credit Agencies governed by the OECD Common Approaches. Looking ahead, the application of such international standards could become the subject of disputes within Canada. This could occur through non-judicial grievance mechanisms such as the complaints process of the CSR Counsellor for the Extractive Sector or the Canadian National Contact Point for the OECD. There is also emerging case law in Canada that could conceivably see judicial claims for negligence against Canadian companies, concerning activities outside of Canada that lead to harm against foreign nationals. While such case law is far from settled, the possibility of such claims is sufficient to make the application of international standards by Canadian companies outside of Canada legally relevant. While the benchmark for performance may be set by local law, international standards, or contractual terms, there is clear convergence towards industry best practices in OHS management no matter where a company operates. CMJ April 2015 • Canadian Mining Journal |
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| Mine Safety Mine rescue teams continuously train for the dreaded day they may be called upon to demonstrate the skills they have been taught during hundreds of hours of classroom and in-mine training.
SAFETY FIRST
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A properly equipped miner works at reinforcing the underground workings at a Canadian mine.
A LOOK AT MINE SAFETY AND WHAT’S BEING DONE TO MAKE IT A PRIORITY BY RUSSELL NOBLE
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W
hat’s more important than mine safety? It’s a straightforward question that shouldn’t be difficult to answer but unfortunately it’s one that still goes unanswered every day around the world as mining accidents and fatalities continue to broad brush the industry as being a dangerous and potentially lethal profession. Granted there are some undeniably blatant abusers of mine safety; China, Africa, South America and most recentApril 2015 • Canadian Mining Journal |
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| Mine Safety
Heavy equipment working in the darkness of an underground mine can be potentially dangerous, particularly if the operator is not fully aware of others working in the same area of the mine.
ly, the Ukraine, are just a few places that immediately come to mind, but even those countries that have been notorious for negligence and disregard for the safety of miners in the past are making an effort, albeit small in most cases, but efforts nonetheless to take mine safety more seriously.
Here in Canada where most mines are temples by comparison to some of those found in aforementioned countries, there are still some safety issues that must be addressed on an on-going basis. For example, The Ontario Ministry of Occupational Health and Safety says that
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12 | Canadian Mining Journal • April 2015
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because miners work in artificial, manmade environments that are subject to geological forces, the health and safety of the miners is extremely important. So important, in fact, that the Ministry has accelerated an ‘enforcement blitz’ it started a few years ago to check for hazards involving the use, handling and storage of explosives at surface and underground mines across Ontario. Improper storage or handling of explosives can result in serious injuries or death to mine workers. Even worse, in terms of liability, it can also injure members of the public and damage property outside an underground mine, open pit mine, or quarry. As I mentioned earlier in my Editorial, Ministry inspectors conducted 55 visits to 49 workplaces late last year and during those visits, they issued 169 orders under the Occupational Health and Safety Act and Regulations for Mines and Mining Plants for various violations. They even went so far as to issue four ‘stop work’ orders, and that’s serious! But on a positive note, about 90 per cent of all of the orders issued during the blitz were compiled with. Taking these blitzes seriously is part of the Ministry’s mandate to get mining companies to comply with legislation and best-work practices, but they’re also in place to get workers to self-govern their own work environment for their own safety. As George Gritziotis, Chief Prevention Officer and Associate Deputy Minister, Ontario Ministry of Labour, says: “The mining industry is now more sophisticated and complex than in the past, and this trend is likely to continue, but new technologies and approaches all have implications for health and safety.” With more than 50 per cent of Ontario’s current workforce of miners expected to leave the industry within the next three years (more than half through retirement), there will be a greater need for new miners than ever before, and with new recruits comes the need for increased training; and that includes in all areas of health and safety. Understandably, training new recruits will be a monumental task and www.canadianminingjournal.com
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one that the Ministry of Labour says will require input from mining companies, labour groups, the general public, and individual organizations with a focus on health and safety in mining. One of the more prominent and well-respected organizations is Workplace Safety North, (WSN), an organization formed in 2010 in North Bay by the amalgamation of three safety associations; Mines and Aggregates Safety and Health Association (ASHA); Ontario Forestry Safe Workplace Association (OFSWA); and the Pulp and Paper Health and Safety Association (PPHSA). WSN is an independent not-for-profit health and safety organization that provides health and safety services to businesses in all sectors across Northern Ontario. The following article by WSN’s Meg Parker is the type of work the organization provides in terms of guidelines to workplace health and safety. CMJ
Enforcement blitzes of mines by Ontario’s Ministry of Occupational Health and Safety have resulted in the discovery of a number of safety violations. Thankfully, most mining companies have taken the blitzes seriously and have compiled with the orders to rectify the problems.
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| Mine Safety
FACING
Photo: Russell Noble
THE HEAT 14 | Canadian Mining Journal • April 2015
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VOLUNTEERS ARE CONSIDERED TO BE THE ELITE MINERS By Meg Parker*
M
ine rescue volunteers are considered elite miners; the best at performing difficult tasks under difficult conditions underground. But, regardless if they’re volunteers or not, they are no less susceptible to the dangers that all workers face under extreme heat exposure. In fact, because of the nature of mine rescue work, mine rescuers may be considered at greater danger of heat stress than any other job, certainly within the mining industry. In Poland in 1998, 10 mine rescuers under oxygen were overcome by heat during an exploration activity and on several subsequent rescue attempts, temperatures peaked only at 31.5°C (88.7°F), but the
relative humidity was in the high 95 to 98 per cent range. Six died and one suffered severe injuries. Several years later, in October 2002, two members under oxygen of a mine rescue team collapsed in the heat while exploring an abandoned mine stope in Nevada. They encountered temperatures exceeding 39.4°C (103°F). One of the members died on site, while the second died a week later in hospital. In 2011, three mine rescuers died of heat stroke while fighting a coal mine fire in China’s Shandong province, and heat exposure was a factor in the deaths of two South African mine rescuers during an emergency in 2012. Incidents such as these, and a growing awareness of the issue as Ontario mines encounter hotter mineral formations and
reach deeper depths, prompted Ontario Mine Rescue to join others in supporting research by the University of Ottawa into heat exposure and heat stress in mining and mine rescue. Several significant reports into workload, heat-stress management, and the effect of garments in mine rescue, have been completed and further research is ongoing. Understanding how the body responds to heat, the dangers posed by heat stress, recognizing the factors that contribute to heat stress, and taking preventive measures should not only safeguard mine rescue volunteers, but also the mine rescue team, and allow the best opportunity for safe and successful missions. Normal core body temperature is 37°C (98.6°F), though there is slight
Teams of firefighters train for the day when they may have to fight a mine-site fire, either on the surface and deep within the workings of the operation.
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| Mine Safety
A three-member team puts out a test blaze using a chemical foam.
variation among individuals of about half a °C. This temperature must remain relatively constant for the body to work well. As body temperature rises, the body automatically takes a combination of steps to cool or lose heat to maintain a
relatively constant temperature. Mine emergency and emergency training situations tend to place mine rescue team members at a higher risk of heat stress than ordinary mining activities. Team members can face extreme
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heat loads not only due to environmental factors that will be less than ideal, but also due to their metabolic work output and clothing. In a rescue environment, existing engineering controls: fans, ventilation, heat shields and barriers, may have limited effectiveness or no longer work. Environmental factors may also be subject to new influences: fire and flooding, that pose increased variables and dangers. Mine rescuers may have already have put in partial or full-work shifts when called to action, contributing to fatigue and dehydration. The emotional urge and psychological stress to respond quickly to an emergency may inhibit a rescuer’s ability to self-assess his or her personal situation. During rescue operations, mine rescuers may travel long distances on foot over uneven terrain, wearing breathing apparatus and under oxygen. They usually carry heavy loads, and do extreme physical and often psychologically demanding work. Muscular work can increase the heat production in the body 10 to 20 times that of when at rest. The breathing apparatus and additional protective clothing worn by mine rescuers can also add to the heat burden by increasing a rescuer’s metabolism, containing the perspiration, and preventing or reducing cooling. Protective equipment and clothing can also make it difficult for mine rescuers to recognize heat stress symptoms in each other until heat stress reaches a critical level. Ontario Mine Rescue has a number of sets of the recently developed Dräger hydration masks for use with Dräger BG4s, which may not be available, therefore mine rescuers may have no opportunity during an assignment to drink fluids to rehydrate their bodies. As well, during an assignment, rest conditions are often less than ideal. Since work in a hot, humid environment will create a higher heat-stress level than the same work in a normal environment, occupational health authorities, industrial hygienists, and researchers in different jurisdictions have developed work level/time expowww.canadianminingjournal.com
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Using the safety of an equipment bucket, firefighters extinguish a potentially explosive container during a training exercise.
sure guidelines and standards to limit the likelihood of people suffering heat stress disorders while working. Within Canada, provinces and various agencies have established guidelines and standards to regulate heat exposure in the workplace, including mines. To fulfil their health and safety responsibility to workers as required under the Occupational Health and Safety Act (OHSA), Ontario mines use a range of measures, principally ventilation, exposure time limits, training and acclimation to hot environments to control heat exposure for workers. None of these guidelines/standards, however, are directly and easily applicable to the dynamic conditions and situations faced by mine rescuers, but would require relatively complex adjustments, most involving multiple subjective evaluations
unique to the emergency situation and specific mine site, to be adapted for use in mine rescue. In contrast internationally, different countries, several of which have conducted substantial research into heat exposure and heat stress in mine rescue activities, have developed standards and protocols specific to their own legislative requirements, and the occupational health and safety needs of mine rescuers. A straight comparison of standards among international mine rescue organizations is difficult due to different approaches and methods used in research efforts. Various standards are often expressed using different combinations and formulas of dry bulb and wet bulb temperature, relative humidity and dry bulb, wet bulb globe temperature (WBGT), and other environmental measurements.
As well, some jurisdictions have attempted to target their research and subsequent heat exposure limits or tolerance times to be appropriate for their “standard” of mine rescuers, such as fitness level, age, and heat acclimation, as well as other jurisdiction-specific criteria such as breathing apparatus, cooling vests, protective clothing, and type of mine. Mine Rescue Services Ltd. (MRSL), which administers mine rescue in the United Kingdom, had a comparison prepared in 2008 by the Institute of Occupational Medicine (IOM), a leader in heat exposure research in mining and mine rescue activities in the U.K. since the 1950s. Though the comparison revealed a variance in approved safe working durations among the surveyed jurisdictions at relatively lower wet bulb temperatures (25 to 30°C), the variance quickly diminishes in the mid-range and upper range of wet bulb temperatures. It should be noted that South Africa, which has the longest safe working duration limits for most of the temperature range, has specific age, fitness and acclimation requirements for its mine rescuers. All personnel involved in mine rescue activities, as well as mine management, should be aware of the risk of heat stress, and take appropriate control and preventive measures to identify, evaluate and reduce the hazards that may lead to an incident of heat stress disorder during all mine rescue activities. CMJ *Meg Parker is a writer/editor of WSN’s monthly newsletter.
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| Mine Safety
ort* p e R l ia Spec
HAZARD
AWARENESS
PROACTIVE SAFETY PROGRAMS PROVIDED TO HELP PROTECT WORKERS AT THE FACE By Alun Price Jones, Ryan R. Lyle and Steve Wrixon
I
n the course of new mine construction or of expanding mine workings, the mine development crews are the first to encounter the realities of stress-related strain behaviour of the rock. These hazards are encountered generally before the more comprehensive seismic monitoring and rockburst management systems, common in production areas, are in place. As such, strainbursting must be considered an important hazard facing mine personnel. The nature of such hazards, although broadly foreseeable, is that their occurrence is unpredictable. Using a risk-based approach, Cementation Canada Inc., a mining contractor based in North Bay, 18 | Canadian Mining Journal • April 2015
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Ontario, has developed practical guidelines for strainburst hazard awareness for development miners and shaft sinkers. The objectives are to raise awareness, to highlight observable indicators, and to minimise exposure and mitigate the negative impacts of strainbursting, with the ultimate goal of zero harm. This article has been written to cover the background to this challenge, explain how it fits into the Internal Responsibility System (IRS), and to provide details of how the program is being implemented. The intent is to share this program to help improve safety in the Canadian mining industry and to gather feedback in order to continuously improve upon this initiative. Around the globe, numerous incidents,
injuries and fatalities have been associated with rockbursting. As noted by Potvin et al. (2000), despite all the excellent research and progress in the past decades, the problem is still not well understood. Brady (1990) suggests that given the pervasiveness of rockbursting, it remains the major unresolved ground control problem in underground mining. In the past few years, Cementation’s workers have been in close proximity to several rockburst incidents at various operations. Fortunately most have been close calls but everyone will agree that even one injury is one injury too many. For a number of years, Cementation has carried out development and shaft sinking at significant depths in several different mining areas known historically for their seismicity. www.canadianminingjournal.com
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province of Ontario that every worker returns home safe and healthy every day (Workplace Safety North vision). At Cementation, the belief in working safely and eliminating injuries must pervade everything we do. Such safety values are shared throughout the mining industry. It is these values that have guided this initiative.
Miners working deep underground are thoroughly trained in the realities of stress-related strain behaviour of rocks.
As a mining contractor, we strive to safely develop and construct mines. The company has a responsibility for the safety of its workforce. One initiative that it is currently advancing is strainburst hazard awareness training following a rational, risk-based approach. Development miners are the most exposed to the hazard and they are the primary target of the training. However, all employees at underground projects, including maintenance, construction, supervision, safety professionals, management and technical staff, are potentially exposed, and the training is to be provided to all of the underground team. Values It is a value common to everyone in the
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Objectives The objectives of this strainburst awareness initiative are as follows: •Promote awareness of the strainburst hazard amongst the workforce. •Coach all levels of underground workers to recognise factors that are commonly associated with strainburst occurrence. •Provide guidance on what they can do to reduce both the probability of becoming exposed and the consequences of strainbursting. •Improve communication amongst all levels of the company and the mine owners about the strainburst hazard. The objectives culminate in an effort to reduce the frequency or number of indicents involving workers in proximity to strainburst-prone rock by raising awareness to their possible causes, and to reduce associated consequences to achieve zero harm. This initiative also follows the regulatory guidelines of training workers in rockburst awareness in the Province of Ontario (Deck 1997). The challenge Due to its unpredictable nature, rockbursting is an especially challenging hazard to manage as explained in North America by Blake and Hedley (2003). From a South African perspective, Wagner (1982) states that rockbursts are the most serious and least understood problem facing deep mining operations all around the world. This presents an outstanding challenge. The rockburst phenomena A rockburst is described by Hoek (2007) as “an explosive failure of rock which occurs when very high stress concentrations are induced around underground opening.” This is a technical definition based on the ‘cause,’ which contrasts with the
more practical ‘effect’ definition provided by Kaiser et al. (1996); “Damage to an excavation that occurs in a sudden or violent manner and is associated with a seismic event.” Rockbursts commonly are classified into three types: fault slip, pillar, or strainburst (Kaiser & Tannant 1999). Fault slip bursts will occur when mining induced stress changes induce movement along a fault or slip. Pillar bursts occur where pillars, in whole or in part, suddenly fail due to rock mass strength being exceeded by the stress in the pillar. And finally, strainbursts occur along excavation boundaries where rock mass strength is exceeded by the stresses. A brittle, violent failure of rock adjacent to the boundary causes the damage. Three distinct damage mechanisms may be encountered as described by Kaiser et al. (1996) – seismic shake down (rockfall), rock fracturing with rock mass dilatation (bulking), and violent ejection of rock. Mine contractor’s perspective As development miners, Cementation’s workers are mainly exposed to the boundary strainburst type and are most concerned with events involving violent ejection of rock. Development mining generally does not induce fault slip bursts or create bursting pillars. In the course of new mine construction or of expanding mine workings, the mine development team is the first to encounter the realities of stress-related strain behaviour of the rock. These hazards are encountered generally before the more comprehensive seismic monitoring and rockburst management systems, common in production areas, are in place. As such, strainbursting must be considered an important hazard facing mine contracting personnel. As recognised in the guideline issued by the Ontario Ministry of Labour (Deck 1997), only a rough evaluation of the potential for bursting at a mine can be made before mining begins. Rockbursting is dependent on the interaction between rock properties, geological structure, mine layout and sequencing etc. April 2015 • Canadian Mining Journal |
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| Mine Safety
Training and the understanding of rock properties are key to safely working with all rock formations, especially in underground situations where miners are in direct contact with rock faces.
The full assessment of bursting potential is not possible until a considerable amount of data has been collected in the course of operations, which occur later than the execution of initial development work. Contractors are able to bring varied experience from other projects to each new job. However, they do not have the level of site-specific knowledge, nor the technical expertise the owner may have for rockburst hazard planning at any given mine site. However, it is the contractors’ workers and contracting crews working at the face. They rely on clients to share their site specific knowledge. The nature of this site specific expertise may include geological, geotechnical, ground control, seismic monitoring, mine planning and so forth. So the question is posed – what can we do as contractors? We can implement strategies with the underground team to raise their awareness of the strainburst hazard using general guidelines. This is especially important given the nature of the workforce in mine contracting, with miners moving from project to project – all with differing ground condi20 | Canadian Mining Journal • April 2015
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tions. Cementation can continually update the guidelines by tapping into its clients’ knowledge and with experience gained on multiple sites. Our goal is to share this development with all of our clients as well as the industry in general. It is all about the common safety values that we all share. Internal responsibility system The basis of the Occupational Health and Safety Act in the province of Ontario is the IRS which was described by Dr. James Ham when his Royal Commission looked into mining health and safety in the mining town of Elliot Lake in 1976. Strahlendorf (2013) describes the IRS as meaning: “Everyone is personally and directly responsible for health and safety as an intrinsic part of their job. Work and occupational health and safety are not separate activities. Everyone is doing occupational health and safety 100% of the time.” Cementation promotes the IRS as an important part of any safety management system, and more importantly, as a crucial part of a healthy safety culture. It believes that management has a duty to provide the knowledge and tools for workers to
complete tasks safely, each and every day. In turn, it expects its employees to communicate concerns and hazardous conditions to their co-workers and supervisors. This approach is the basis of Cementation’s Strain Bursting Hazard Awareness sessions. It wants to inform employees of this difficult to predict hazard with significant consequences. Cementation will encourage its employees to actively participate in the identification of key indicators and communication of them to the appropriate personnel, and will introduce a process to facilitate this. Risk-based appproach The company has chosen to follow a riskbased approach as commonly applied in mine safety. Risk is the product of the probability of some thing occurring and the consequences of it happening. Using a risk approach, it asks key questions whose answers formulate the guidelines. For the challenge of reducing harm from strainburst incidents, we ask the following questions about the probability and consequence of strainbursting: *What factors increase the likelihood of strainburst occurrence? www.canadianminingjournal.com
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*What indicators can be recognised and how do we ensure that our underground workers, especially those at the face, can recognise these factors? *What can we influence that might reduce the probability of a strainburst occurence? If a strainburst is likely to occur, what can we do to reduce the consequence of that event? What can be done so that the worker might avoid the hazard? What controls can be applied to reduce the hazardous consequences of strainbursting? It is these questions and their answers that form the basis of the hazard awareness training program. Probability What factors increase the likelihood (probability) of strainburst occurrence? To answer this fundamental question, look at the underlying cause of strainbursting – it occurs where the rock stress exceeds the rock mass strength in brittle rock. So where should we look? Look for factors that induce increased stress or decreased rock-mass strength. What are the factors causing high stress? A general rule is that you get higher stress with depth. However, locked in stresses from previous geological history can lead also to high stress at shallower depths. Stress fields can change near faults and other structures. There are stress changes, risers, etc. induced by excavating holes in the ground. These mine induced stress patterns are higher with over extraction, poor pillar layout, poor excavation shape, etc. Also, sudden changes in excavation profile shape/size can all lead to high stress conditions locally around the excavation. As was mentioned previously, hard brittle rocks are most prone to bursting. Strainbursts are less likely in weak, yielding rock such as evaporites. Contrasting rock types where weaker and stronger rocks are in contact – the stronger (stiffer) rocks will take on more stress from the weaker rock and become susceptible to bursting. Intrusive geological structures such as the trap dykes in Sudbury that tend to be stronger and more brittle. Also, weak zones may shed stress to
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nearby brittle rocks or allow very small scale slips that result in strainbursts. While drilling, miners can look for changes in drill behaviour such as lower drilling speeds, jerking/jamming of rods, pitching/caving of holes, or even face splitting or cracking. These may be an indication of ground changes or high stresses. Thus having recognised the main causal factors, what can be seen underground, what observations can be made that may indicate strainbursting conditions? There are many indicators; the presence of any one of these indicators does not necessarily mean that bursting is imminent. However, the more indicators that are present, the more likely that bursting will occur. Mines with seismic and micro-seismic monitoring systems in place can note increased levels of local mine seismicity or swarms of regional seismicity that may indicate that bursting is more likely. As development mining contractors we rely on timely communications from the mine operator of these indicators. Having looked at the factors and indicators of burst-prone ground, can we now reduce the probability of strainburst occurrence? We can reduce the probability of strainbursting by: •Minimising the effect of rock stress: using proper geometry, sequence and rate of mining. Examples include: avoiding
narrow sill pillars, using proper backfill, crossing structures/faults at favourable orientations and/or locations, use seismic data in mine planning, layouts, etc. •Attempt to drive high stress away from the excavation boundary by using destress blasting or drilling. Generally the mine owner controls these variables based on their site-specific knowledge. However, observations by development miners and input from contractors can provide feedback which will help mine owners improve the mine design and thus the safety of the workplace. Consequence If a strainburst is still likely and despite steps to reduce the likelihood, what can be done to reduce the consequences of such an event? One approach is to avoid the consequences by retreating, barricading or using remote equipment. These methods require judgment and re-entry protocols. Often mine operators have good experience with re-entry protocols that is shared with contractors. Another approach is to try to induce the strainburst activity in a safe controlled manner. An example is hosing down the rock face in question with cold water from a safe distance. If the face is close to bursting, the thermal shock of the cold water can be used to induce the burst. A third option is to reduce the extent of the damage by installing energy absorbing
As mines go deeper and deeper, it becomes increasingly important that miners are fully aware of special hazards.
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| Mine Safety ground support. There are many new innovative products on the market for such dynamic ground support. These systems have held up well in bursting conditions. However, as a development miner, one must be aware that we are in burst-prone ground when installing these support elements. We must continue to educate development miners on these new ground control processes and materials. Implementation An employer has a duty to inform its employees of all workplace hazards. In the mining industry, those hazards typically include operating mobile equipment, working at heights, and falls of ground to name just a few. Cementation Canada has developed a presentation to guide its crews in a conversation regarding the dangers of strainbursting. To do this, Cementation focused on enabling employees to recognise the hazards and in addition to reporting those hazards to management, to consider what else they themselves can do to keep safe when such hazards are encountered. Communication A large part of the awareness discussion centres on communication. It’s stressed to the employees that they be aware of the factors which may lead to strainbursting and should they be identified, to communicate those signs to a supervisor and management so they can get the proper people involved in order to mitigate the risks. The primary communication method available to workers is a Five-Point Safety System card. Each employee is given a Five-Point Card at the beginning of their shift which has a written line-up from their supervisor for the upcoming shift. There is a series of questions and checks which the worker and supervisor sign off on over the course of the shift. These checks, along with an area for Further Action Required, enables the worker to express any safety concerns they may have, including sections specific to ground control. Each card is submitted to the supervisor at the end of the shift to report on the 22 | Canadian Mining Journal • April 2015
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shift’s work, and to ensure there are no outstanding concerns. Additional means of communicating potential strainbursting hazards includes the use of the ground control log book located near the wicket. Provided the worker is aware of relevant factors related to strainburst risk, they can be written down. Notes on ground conditions for specific areas are written after each shift by the supervisor and checked by other supervisors, management, and departments like geology and ground control. For these systems to be effective, it is essential for all personnel to contribute to the process, while it is important that the miners at the face are able to communicate what they see and hear to their front line supervisor. This information then goes up the line to management to ensure that the proper professionals can get involved to minimise the potential risk to workers. Safety System Card Of course, supervisors are required to visit the face on a regular basis. They are also responsible to recognize these hazards and are therefore included in this training program. Management is responsible for ensuring that the workers recognize the hazards (the main premise of this program, training workers to be able to do so) and creating a work environment where they are comfortable in reporting their observations. Discussion generated During the awareness sessions held at the project site, it was found that one of the ways to generate discussions with the crews was to engage them with questions about their own experiences of strainbursting events. Experienced miners were quick to share some of their past experiences from working at other mines across Canada. Many stories were shared from deep mines in various areas across the country. Sharing of these stories is very important to raising awareness of the risks of strainbursting, especially for those miners who are relatively new to the underground environment.
A first-hand explanation from an employee who has seen and experienced the powerful consequences of a strainburst is extremely valuable. It was eye-opening to hear the stories come forth, with statements like, “The scary part when working in some of those headings was when things became quiet, because you were so used to the face and walls spitting.” The hope is that in providing the crews with additional information and raised awareness about strainbursts, that more incidences will be reported and measures can be put into place which will reduce the chance of loss. Feedback from awareness sessions In general, the sessions have been well received. The amount of discussion generated is above average as compared with typical safety meetings, which is a positive sign. One Superintendent who attended a session stated that he felt there was some really good information provided to the crews, and thinks the crews were provided with knowledge that they will be able to take with them to different mines as their mining careers move forward. A client safety coordinator echoed this notion in stating, “I think it is important that Cementation is educating its employees on the risks of strainbursting because the work force moves around so much. They are bound to see examples of it over the course of their careers.” A site safety supervisor simply commented, “this is good, we need to keep reminding ourselves of this.” Plan forward Cementation’s plans are to continue to develop this initiative to educate its employees regarding the risks of strainbursting. In continuing with a risk-based approach, it will work with its clients’ ground control engineers in order to identify areas where strainbursting will pose a significant risk. By having the Corporate Safety and Training department involved, the awareness level of strainbursting hazards has been increased with many individuals www.canadianminingjournal.com
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who can then carry this knowledge forward into the workplace and to share with other projects. Conclusions It is known that strainbursts are a significant safety hazard and they are challenging to predict. However, there are several indicators that assist with the identification of this hazard. Cementation is developing a strainburst hazard awareness initiative to improve workplace safety for underground workers – this will include hazard awareness training for workers, and the introduction of a strainburst hazard awareness card to help report and communicate observations from underground. This approach is to empower the worker, through awareness and knowledge to report upon, communicate and act on areas of concern. This abides by the intent of the internal responsibility system. The guideline will be generic and it plans to use it across relevant projects. Site
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specific input for each mine is always required in addition to the guidelines, while incorporating and using the expertise of clients. Like all guidelines, this initiative is under continuous development, so feedback is essential and welcomed. The focus is to encourage the early reporting of key identifiers of strainbursting potential by educating employees as to what are those identifiers, so that actions can be put in place to help achieve the goal of zero harm. CMJ
Information for this Special Report* provided by Alun Price Jones, Technical Director, Ryan R. Lyle, Senior Geotechnical Engineer, and Steve Wrixon, Superintendent of Safety and Training, Cementation Canada Inc., North Bay, ON. The article is based on a technical paper presented at a recent conference of The Australian Geomechanics Centre (ACG).
References
Blake, W & Hedley, DGF 2003, Rockbursts: case studies from North American hard-rock mines, Society for Mining, Metallurgy and Exploration, Littleton. Brady, BGH 1990, Rockbursts and Seismicity in Mines, A.A. Balkema, Rotterdam. Deck, BK 1997, Management of Rockbursts – Statement of Policy and Health and Safety Guidelines, Ontario Ministry of Labour Health and Safety Guideline. Hoek, E 2007, Practical Rock Engineering, RocScience Inc., Toronto, viewed 14 July 2014https://www.rocscience.com/hoek/cor ne r/Prac tic al_ Rock _ Engineering.pdf Kaiser, PK & Tannant, DD 1999, ‘Lessons learned for deep tunnelling from rockburst experiences in mining.’ Proceedings Vorerkundung und Prognose der basistunnels am Gotthard und am Lötschberg, A.A. Balkema, Rotterdam, pp. 325-337. Kaiser, PK, Tannant, DD & McCreath, DR 1996, Canadian rockburst support handbook, Geomechanics Research Centre, Laurentian University, Sudbury. Potvin, Y, Hudyma, M & Jewell, RJ 2000, ‘Rockburst and seismic activity in underground Australian mines-an introduction to a new research project.’ Proceedings of the International Conference on Geotechnical & Geological Engineering, TechnomicPublishing, Lancaster, on CD- ROM. Strahlendorf, P 2013, ‘The Internal Responsibility System’, Presentation given to the Workplace Safety North Mining Health and Safety Conference, Sudbury. Wagner, H 1982, Rockbursts and Seismicity in Mines, South African Institute of Mining and Metallurgy, Johannesburg.
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| Mine Safety
ort* p e R l ia c Spe
LOOKING
FOR DANGER A WELL-STRUCTURED SAFETY MANAGEMENT SYSTEM IS VITAL FOR THE EXTRACTIVE INDUSTRY
S
afety plays a significant role in all industries, affecting both reputation and bottom line, but it is particularly vital to the extractives sector. Unfortunately, when it comes to building and sustaining a culture of safety, some mining companies have a long way to go. One step to improving the safety of their facilities and operations is for businesses to recognize conditions that compromise safety performance. Demographic changes, for instance, are a key reason for declining institutional knowledge among managers and workers. These include a rapidly aging workforce; the lack of skilled workforces within process and extractive industries; stringent local employment requirements; and increased reliance on contractors to perform specialized tasks. Another issue for extractive and process industries is the belief that engineers best understand the technologies of these industries and how they operate. As a result, only those with the appropriate education or qualifications tend to be trained in advanced safety management. Other individuals, who may have knowledge and experience with specific 24 | Canadian Mining Journal • April 2015
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processes and understand their associated hazards and risks, may not be called upon to share this information. While most companies recognize the need to expand their safety training and skills development processes, the lack of a structured approach often hinders their progress. Often, discrete safety programs are not followed up with additional training to reinforce and sustain required skills. This can be especially apparent when merging safety processes during a corporate acquisition. This was the case for Rio Tinto, Alcan, Inc. (RTA), a global leader in aluminum production. RTA was created in 2008 when Rio Tinto acquired Alcan Inc. The RTA global headquarters is located in Montreal. Since 2000, Alcan had been steadily improving in safety performance on its construction projects. For example, in 2008 Alcan had completed its latest project with an all-injury frequency rate in the 4.0 range. In comparison, the construction industry average in Québec at that time was greater than 20.0. Nonetheless, following the acquisition, RTA wanted to accelerate Alcan’s safety performance. The Major Projects Group (MPG) within RTA approached DuPont Sustainable Solutions
(DDS) to assess MPG’s newly combined contractor safety management system. Pursuing Industry Best Practices The initial assessment by DSS included comparing MPG’s current construction safety management system and resources to DuPont’s proven 12 Essential Elements of Safety Management, the DuPont 6-Step Contractor Management Process reference model, and RTA’s own 17 element HSEQMS (Health, Safety, Environment and Quality Management System). The DuPont and RTA Safety Management System reference models each emphasized leadership, structure, process and action. Based on the comparative assessment, DSS reported the degree of competency in each process, and provided MPG with initial coaching and counseling at both the corporate and project site levels. Recommendations for transforming MPG’s safety management system included the following: Create a safety management structure, composed of a Health, Safety and Environment (HSE) Council and Process Improvement Teams, in which top leadership takes responsibility for and actively www.canadianminingjournal.com
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Safety on any mine site requires routine inspections and detailed reporting on the equipment and movement of other machines and personnel in and around the site.
manages the key safety activities necessary to achieve safety excellence. Engage all management and both MPG and contract employees in the Rio Tinto HSE Interaction Process and in risk identification and management for workers. Strengthen the company’s incident investigation process by creating a field guide that explains what to do when an incident occurs and implementing a training process to improve the skills of local line management personnel. Develop a Construction HSE Execution Manual, specified within the terms of all contracts, outlining enforceable performance standards to which all contractors must comply. Another recommendation was the appointment of project directors to lead the Process Improvement Teams. The teams were charged with identifying best practices based on their knowledge of the project, developing consensus for safety processes and systems, and supporting the implementation of these tools on their respective projects. The identification and use of these best practices and safety management tools helped foster a culture of safety and provided
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MPG with a project playbook for future projects, eliminating the need to reinvent the process and standards at the beginning of every new project. The adoption of all of these recommendations happened progressively over time. By implementing the RTA HSEQ management system, supported by DuPont best practices and consultants, the MPG has undergone a remarkable transformation. There has been a clear cultural shift; from reliance on a pure Engineering, Procurement and Construction Management model, to one where project owners are actively engaged in setting the safety standards. Safety Performance Improves In 2011, RTA improved its all-injury frequency rate (AIFR) by 31 per cent over the prior year. One standout example was the company’s Shipshaw project that went 26 consecutive months, representing more than 850,000 man hours, without recording a single injury. In addition, under the safety leadership of its director, Alain Gaboury, the site went from the worst performing to the best, and the achievement earned Shipshaw the Rio Tinto CEO Safety Award.
Perhaps the best example of the safety cultural shift at RTA is a story told by several Shipshaw contract employees. They said that during a three week hiatus before starting the next portion of another contract, they signed up at a local industrial facility for a maintenance turnaround project that was supposed to last more than a week. But after two days, they quit because they said it was so unsafe compared to the MPG construction site and did not want to risk injury. Shifting an organization’s culture toward one in which leadership and employees believe that all injuries are preventable begins with a change from focusing on compliance to focusing on values and beliefs. RTA leadership approached DuPont with the commitment that a good safety record could be made even better by recognizing the changing dynamics of the workplace, implementing clear, uniform standards and best practices, and using behaviourbased safety interactions and training as tools for cultural change. CMJ This Special Report* provided by Mieke Jacobs, Employee Safety Global Practice Leader, DuPont Sustainable Solutions. April 2015 • Canadian Mining Journal |
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| Transportation & Logistics
PORTS of all PORTS Port of Vancouver continues to provide essential services by Western Correspondent David Godkin
A detailed look at the shipping capabilities from B.C.’s west coast.
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T
here’s no question that Canadian coal, met or thermal, is among the best in the world and that the Port of Vancouver is better positioned to deliver it to the U.S. and coal-hungry Asian markets than most other ports along the Pacific Northwest. Plus, the Port of Vancouver is a full day-and-a-half closer to China, and that’s a huge bonus. As Daniel Rusz, a senior research manager at Wood MacKenzie put it at a meeting of the Coal Association of Canada in Vancouver three years ago, “High-growth Asia markets will be the primary markets for Canadian coal” as the net trade flow “swings” from the North American ports in the Atlantic to the Pacific. But Rusz said something else at that meeting which might give us pause. While affirming that long-term fundamentals for coal exports remained strong, he also admitted that “metallurgical export capacity is saturated globally” and that “Canada is no different.” Since then of course, the price of coal has continued to decline, prompting Canadian firms such as Teck Resources and Anglo American PLC to put coal mining projects on hold, all of which begs a clear question: Why do we continue to talk up additional coal-handling capacity at the Port of Vancouver? In this issue we try to find out by speaking with principals involved in three significant coal capacity upgrades at the Port of Vancouver. Westshore Terminal It’s been more than a year since Westshore Investment Corporation upped its estimates for replacement of aging production equipment at Westshore Terminal from $230 to $275 million. Nevertheless, if things go right over the next four years, Corporate Secretary Nick Desmerais said at the time, 30-40-year-old stacker reclaimers would be replaced by three new stacker reclaimers which will easily offset the increased price tag by improving improve productivity. How much more productive? “At the end of the day we’re going to have a capacity of 2-3 million tonnes more than our current run rate,” says Desmerais. “But most of that is going to come from having new equipment that doesn’t need as much maintenance downtime.”
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| Transportation & Logistics
The Port of Vancouver is one of the world’s more active facilities known for its handling of both materials and passengers on cruise ships.
Desmerais has been associated with plans for the upgrade since its inception, handling among other things corporate contracts with offshore fabricators. Cautious about referencing too much about the expansion beyond existing facts, Desmerais dutifully mentions the terminals 44-year history of feeding coalhungry markets around the world and points us to the facilities that make that possible today: two twin-rotary dumpers, each with an unloading capacity of 63 cars per hour, two deep sea loading berths (including a new shiploader at Berth One) and seven kilometers of high-speed conveyor systems. The corporation’s continued goal, Desmerais says, will be to send coal to Asia from BC’s coal mining hub in the Elk Valley, but also from mines in Alberta and Montana. A year ago Desmerais acknowledged that the terminal was vulnerable to forces beyond its control, including the slide in coal prices. Still, he adds, fixed, long-term contracts out to 2024 should help to insulate Westshore from fluctuations in price and demand. Another concern: increased tax costs and a Canadian-U.S. dollar exchange rate which by 2014 had deteriorated about 10% year over year. With so much of the new equipment coming from the U.S., increased import costs “did cause concern a year ago, says Desmerais, “But since the contracts have been entered into before the end of the year and before the further deterioration of the Canadian dollar, that doesn’t have any incremental impact on us.” Meantime, work has begun on a spate of 40-year-old offices, employee facilities and maintenance shops. “Right now they’re under many roofs and it’s inefficient,” Desmerais says. Carried out within the terminals existing footprint, the upgrade will include consolidation of those facilities within a single complex by the end of this year. Might all of this be still delayed because of slowing growth in China and delayed coal development projects in B.C. “Hopefully 28 | Canadian Mining Journal • April 2015
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not,” says Desmerais, “but thank goodness for fixed-volume, fixed-rate contracts that carry us beyond 2019.” Fraser Surrey Docks Desmerais is quick to deflect any questions about what all this activity might mean for local contractors, except to talk about what coal means to smaller companies and workers across B.C.; roughly 26,000 people in high-paying jobs and generating combined tax revenues up to $900 million. Equally guarded about why, when coal companies are delaying expansions plans, upgrades at Fraser Surrey Docks are needed, Director of HR & Communications Jill Buchanan will only say “the need for metallurgical coal” in Asia “is not gone,’ and that where shipping coal to China is concerned, “we’re not in a place where there is an alternative.” Not everyone agrees. The plan at Fraser Surrey Docks is for coal from the Powder River Basin in Wyoming and Montana to be delivered and unloaded by the Burlington Northern Santa Fe Railway at a new Direct Transfer Coal Facility at the southwest end of the existing Fraser Surrey docks. But in a report released in November, the Institute for Energy Economics and Financial Analysis (IEEFA) warned “ambitious” expansion plans, like the one for the Fraser Surrey, “are challenged by the same risks faced at the other Canadian ports and U.S. new projects,” that is, a decline in a demand for coal-port capacity. “Port capacity in British Columbia will likely remain available to U.S. coal companies,” said the report’s author IEEFA Director of Finance Tom Sanzillo, “but that capacity and the planned expansions are unlikely to benefit U.S. coal shippers as there is little market for their product either now or for the foreseeable future.” Despite the warning, the State of Washington continues with its ambitious plans for moving U.S. coal from Powder River basin as well. And, but for the fact that low coal prices hurt them too, www.canadianminingjournal.com
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delays in B.C. would come as good news to developers of the $650-million U.S. Gateway Pacific Terminal at Cherry Point, just 17 miles south of the Canadian border. However, with their eyes equally fixed on lucrative Asian coal markets, project advocates are currently mired in a lengthy environmental approval process involving federal, state and local governments and well behind developments at the Port of Vancouver. Will U.S. ports like the proposed Gateway Pacific Terminal compete one day? Probably, Buchanan says, but not soon. For one thing, Fraser Surrey Docks is a brown space terminal. “We’ve got the infrastructure in place while a lot of the ports in the U.S. are years behind in getting up and running. We’re more of a turnkey solution to provide the product at this time.” The man in charge of making all that happen is Jürgen Franke, P Eng, Director Engineering and Terminal Development. Franke says once the 12-month construction schedule is complete, the new Direct Transfer Coal Facility will easily handle up to four million additional metric tonnes of coal per year. In addition to installing new rail track and realigning existing track within the FSD lease area, 12 new fender piles will be installed for the new barge loading system at Berths Two and Three. “We have about a metre-and-a-half to two-metre tide and when the barges pull up against the berths, there’s the potential for the barges to slip underneath the berths during a rising tide. The piles are placed vertically along the length of the berth to prevent that.” The receiving pit for the rail cars and conveyors systems will all be brand new, he adds, with most of that manufactured in Canada, and thus safeguarding the project “to some degree” against high import costs from U.S. manufacturers. But when all this might get underway Franke, like Buchanan, cannot say. Neptune Terminal Neptune saw its metallurgical coal-handling capacity jump from 8.5 to 12.5 million metric tonnes after installation of a new
stacker reclaimer in 2013. The terminal will see that capacity rise by another six million tonnes with one additional railcar dumper, an additional rail track, new conveyors and replacement of a longer mobile shiploader boom at Berth One. How much of that work will go to B.C. contractors and workers? “The best predictor of the future is the past,” answers Neptune President Jim Belsheim. “Where we were doing the stacker reclaimer, the phosphate building and years before, we would spend $15-20 million or more at the peak of the project on 126 small North Vancouver businesses.” “Plus, we have an impact on businesses right across the province. In construction alone, we order components from Kelowna, we order components from Fort Langley and Surrey. And long term, Neptune has increased its workforce to this point by about 100 full-time equivalent jobs over four years ago.” Enclosed in a shed, the new railcar dumper will be located on an inbound rail track at the northeast corner of the terminal. It will be approximately 12 metres high and rely on automated electric railcar positioning equipment. Like Surrey, Fraser Docks and Westshore, Neptune is anxious to ship more coal to Asia, in particularly China with its seemingly insatiable appetite for steel making coal for China’s vast industrial sector. Most of Neptune’s coal will come from Canada, notably Teck operations in the Elk Valley. What may complicate that, according to the French-based International Energy Agency, is China’s recent embarkation on a campaign to diversify its energy supply (increases in gas, nuclear and renewable energy) but also to reduce its energy intensity. Does that give Belsheim pause? Only momentarily. “Clearly the demand for steel is impacted by a number of variables,” he admits, at Korean and Japanese steel mills as well as Chinese. Nevertheless, “We’re long-term thinkers on the process and I’m pretty optimistic that long-term demand for steelmaking coal, particularly high quality Canadian steel, will be good.” CMJ
B.C.’s Westshore Terminal.
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| Company Profile: Atlantic Minerals Limited
SHORE to SHIP Atlantic Minerals’ expands Lower Cove Quarry to keep ore flowing to offshore customers By Russell Noble
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Atlantic Minerals’ Lower Cove Quarry is located 200 feet above the Gulf of St. Lawrence where ocean-going carriers dock to pick up ore destined for offshore customers.
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t may be located in a place called Lower Cove, but there’s nothing ‘low’ about where Atlantic Minerals’ Lower Cove quarry is on the southwest coast of Newfoundland. In fact, the 2,900-acre limestone and dolomite quarry is strategically located 200 feet above the Cabot Strait and directly connected to the south shipping lanes leading to the Atlantic Ocean from Newfoundland’s Port au Port peninsula. It’s from this ideal and picturesque location that Atlantic Minerals has been supplying its customers along North America’s eastern seaboard and to the Caribbean and into South America, with a steady supply of aggregates since 1995. With more than a billion tonnes of reserves, including Proven Reserves of more than 157 million metric tonnes of chemical-grade, high-calcium limestone, and over 89 million metric tonnes of chemical-grade dolomite on the property (plus massive quantities on an additional 13,000 acres of Licensed Claims elsewhere on the Port au Port peninsula), Atlantic Minerals is well positioned to be supplying limestone and dolomite for decades to come. For now, Sales Manager Chad Elliott says the company is satisfied
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| Company Profile: Atlantic Minerals Limited
A view from Atlantic Minerals’ new primary crusher showing the new stacker and reclaim tunnel that is under construction.
with the scale of the operation but he emphasizes that the company is not sitting still and becoming complacent with its current production levels. In fact, quite to contrary because Elliott says, “The company is concentrating on improving its production capabilities to help ensure we remain a reliable supply for many years into the future.” The most noticeable addition to improve production at the Lower Cove site is a massive Lippmann 5062 jaw crusher and surge tunnel designed to produce approximately 1200 tons per hour from the quarry to the new surge area. It replaces the A close look at the new crusher installed at Atlantic Minerals Lower Cove Quarry.
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previous 42x48 Hewitt Robbins jaw crusher which had been in use since 1988. Raymond Fitzpatrick, Atlantic’s Plant Engineer says, “Previously, our old crusher was on an ‘inline’ circuit which fed directly to two screen units and secondary cone crusher. This brought with it the inherent deficiencies in that at any time there was downtime at either screen, cone crusher, or any conveyor in the circuit, the jaw crusher had to shut down accordingly. “By adding a surge reclaim tunnel between the screens/cone and the primary crusher, the crusher is no longer dependent on the operating status of down-
stream equipment. We will also now be able to produce a stockpile of material after the crusher and control the feeders in the tunnel to provide a steady and continuous flow rate of material as opposed to the surges of material coming through the old crusher directly.” To further improve production at the quarry, Fitzpatrick says the company has also added a Komatsu PC2000-8 200-ton class excavator to replace its previously used 120-ton class excavators. “The excavator allows us to more efficiently load the 100-ton trucks which we are using to haul material from the quarry to the primary crusher. Furthermore, it also decreases waiting time while loading and helps us develop a more efficient cycle time from the quarry to the crusher. Our intent is that the new excavator and new primary crusher will allow the company to eliminate the existing 12-hour hour shift through the night-time hours,” says Fitzpatrick. To further make the Lower Cove quarry more efficient and productive, Fitzpatrick explains, “Our new scalping screen, which is located between our primary jaw crusher and cone crusher, is used to separate the oversize material which needs to go through the cone from the smaller material which can bypass it. This screen is also used to scalp off any clays or wet material www.canadianminingjournal.com
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from our product if needed. It was replaced last year with a KPI 8’x24’ horizontal screen. The previous screen was a smaller inclined screen, but the larger screen is giving us a far more efficient screen process before the cone.” But that’s not all. Two years ago Atlantic Minerals installed an 8’ x 24’ horizontal triple deck screen after the cone crusher. This screen allowed the company to stockpile two finished products earlier in the process before going through the processing plant. Fitzpatrick said the efficiencies of this process are the result of the material which does go to the plant being stockpiled over another reclaim tunnel where it can be drawn down and sent into the plant at a controlled rate. And naturally, control is what Fitzpatrick says is the key to the Lower Cove operation. “We plan to install a new control tower for our processing plant. This tower will give us a logistical improvement allowing our control room operators to sit at an elevated height of approximately 35 feet with a 360 degree view of the plant, the VSI (Vertical Shaft Impactor), and plant surge pile and the two radial stackers on the S1 screen. This will be a great improvement as previously the operators were on ground level with windows only on one side, making them much more reliant on radio contact without being able to ‘see for themselves’,” says Fitzpatrick. Like all progressive mining operations, the Lower Cove Quarry will continue to move forward and again, Fitzpatrick says, “There are a few other projects of varying sizes coming in the future.” “We are looking at adding a loader-fed belt feeder to the VSI circuit. This will benefit us by giving us a redundant alternate feed point to the VSI, which is a small circuit of its own. Currently the only feed for the VSI system comes through the main plant. With a belt feeder we could continue VSI production during plant maintenance.” In addition to improving its production processes, Fitzpatrick says there are also a few yard logistic improvements scheduled for the near future. “Currently a number of products must be loaded and trucked to stockpiling loca
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tions from their production point. We are looking into logistical improvements so that we can use conveyors to stockpile more material and to reduce the handling by trucks and loaders that we currently are forced to do,” said Fitzpatrick. The company is currently working on centralizing its diesel and gasoline pumps into a single centralized location with
modern dust proof high flow pumps. All in all, Atlantic Minerals’ Lower Cove Quarry is not only a safe and productive operation, it’s personally one of the most beautiful sites I have ever visited in my travels for coast-to-coast in Canada. Aside from being neat and orderly, the view is fantastic. CMJ
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| Equipment Maintenance
KEEPING it CLEAN
D
iesel particulate filters (DPFs) are designed to clean themselves through a two-step regeneration process but when significant amounts of ash have collected, an alert light on the cab dashboard should tell the operator to stop for service. This may occur beyond the 3,000- or 5,000-hour EPA minimum. During the cleaning, the filter should be thoroughly inspected to determine whether it can be cleaned or has become defective and needs to be scrapped. The cleaning process begins by subjecting the DPF to pin-gauging and air-flow testing. This determines how plugged the filter has become. At this stage, It will then either undergo thermal or pneumatic cleaning, or both. After cleaning is complete, the filter should be retested with the pin-gauging technique to measure the cleaning results.
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Eliminate contaminants and extend machine life. Particle contamination is as equally destructive to a fleet of machines as moisture contamination. Corrective action usually involves an expensive, messy, time-consuming cleanup process that doesn’t even guarantee success. But there’s an alternative: a portable oil-filtration system that will trap the smallest of particles and clean the oil at a fraction of the cost. Use portable oil-filtration systems: •To salvage contaminated oil •To clean the machine after catastrophic failure (flush first) •To evacuate oil from a system •To clean a system contaminated by attachments •To extend the life of hydraulic oil Not all oil can be cleaned. When a system has severe moisture contamination, a portable filtration system will alert the operator www.canadianminingjournal.com
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DISCOVER
MERLO IN ACTION
when the water-saturation level has hit 75 per cent and the oil must be replaced. The thick and thin of oil viscosity When oil viscosity test results are abnormal, chances are something else is wrong in the system or engine. Factors can include: •Fluid dilution of water, fuel, or coolant, or the addition of incorrect oil •Contamination from soot, sludge, or additives •Operating temperature colder or warmer than typical or recommended operating conditions •Oxidation when oxygen from water, air, or contaminants attaches to the oil, thickens, and forms deposits (sludge) •Oil moving through a pump or motor system, or exposed to high heat, causing the molecular units to break or cut (shear), lowering the viscosity, and thinning the oil Be sure to perform frequent oil sampling relative to machineusage hours and oil type to see if abnormal viscosity, is alerting you to a problem. CMJ *Information for this article provided by Hitachi.
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In My Mine(d)
Health and Safety are about prevention and response
Peter Kavanagh is the Principal Consultant North America for Dynamiq, a global emergency response company, Ottawa.
By Peter Kavanagh
M
ining companies in Canada have invested millions of dollars in developing safety management systems to support personal safety, process safety and literally transform workplace culture. Hazard and identification risk assessment (HIRA) is a core process. A strong, verifiable and audited management system supporting health and safety is an absolute must, both morally and from a regulatory standpoint. And this investment has paid off. We are arguably one of the safest mining jurisdictions in the world. In Ontario, according to the Ontario Mining Association (OMA) there has been a 96% improvement in lost time injury frequency over the last 30 years. Other mining provinces can boast similar statistics. But despite the regulatory framework, the culture and the safety management systems, accidents and disasters happen. The eight fatalities on Canadian mine sites in 2014 and the Mount Polley tailings breach in B.C. brings this point home very clearly. That’s why health and safety programs have to include response as well as prevention. All Canadian mining companies have emergency response procedures. Most have wider emergency response plans and crisis management plans – the Mining Association of Canada (MAC) Towards Sustainable Mining (TSM) program requires a crisis management plan in place and exercised. 36 | Canadian Mining Journal • April 2015
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But yet, a common complaint within health and safety business areas is that emergency management is not exercised enough and that this component in the health and safety management program is not given the same priority as prevention. Management teams are extremely busy leading safe production. It is a real challenge coordinating all team members to be in the same place at the same time and focus on yet another activity that is not directly linked to their core roles. But there are several reasons why management teams should take the time to exercise emergency and crisis response plans. Emergencies and crisis can escalate rapidly and the need for immediate decision and rapid development of action plans is greatest at the time when information management and situational awareness is most challenging. In other words, having to make decisions that could impact safety of people, environment and assets without having all the information needed to do it. This is not skill that comes through day-to-day leadership experience. Emergency events are tense and emotions are heightened. Exposure to the challenges of developing situational awareness and triaging numerous critical decisions in a short period of time is difficult. Familiarization with plan, process and procedure goes a long way to preparing for a response role but this familiarization
doesn’t come from just reading the plan and then putting it on the shelf. It can only come from using it. Training saves lives. If an event occurs that threatens safety, the people that need to identify strategies to stabilize a situation will be more efficient if they’ve trained to the event – or similar event – than a team who has little training in problem solving and high stakes decision making. Emergency exercises often reveal vulnerabilities and exposures not picked up in risk assessments. That supports more effective prevention and mitigation. Procedural deficiencies in response plans are also detected and the procedures themselves validated. You cannot get this without exercising the plan. Any analysis of companies that have suffered emergency and crisis clearly shows that those with management teams who were trained and exercised were more competent, took care of their people more efficiently and led their organizations to recovery more rapidly than those companies who had teams that had not exercised. Research by Oxford University also shows that companies who respond to emergencies and crisis effectively are more likely to actually increase market value over the long term, while companies that don’t, lose value. Of course, this kind of evidence makes the argument that supporting the response side of a health and safety management system is the smart thing to do. Not just the right thing to do. CMJ www.canadianminingjournal.com
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Unearthing Trends
Canada punches above its weight in global deals Jay Patel is a Partner and EY’s Canadian Mining & Metals Transactions Leader. He is based in Toronto. For more information and to access Mergers, acquisitions and capital raising in mining and metals: 2014 trends, 2015 outlook, visit ey.com/ca/mining.
By Jay Patel
I
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n 2014, volatile commodity prices and an uncertain economic outlook provided the backdrop to a fourth consecutive year of falling deal activity and the lowest deal volume since 2003. Meanwhile, risk aversion and capital discipline among investors and producers alike stymied both the availability and spending of capital. Fortunately, the global scenario didn’t quite play out the same way in Canada, where the sector punched above its weight in 2014. In fact, Canada topped global mining deal volume and finished as the most prolific buyer of mining and metals assets in terms of volume and second in terms of value. This was in spite of subdued metal prices leading to weaker financial performance and slowing investment. Companies remained cautious about new investment but looked for attractive opportunities to strengthen their core business. According to EY’s report Mergers, acquisitions and capital raising in mining and metals: 2014 trends, 2015 outlook, Canada had the top gold deal and second biggest deal of the year with the joint acquisition of Osisko Mining Corp by Yamana Gold and Agnico Eagle Mines for $3.6 billion.
Gold remains the most-targeted commodity by volume in Canada and in global markets. The majority (88%) of gold deals, however, were valued at less than $50m, reflecting distress among gold juniors as capital remained scarce at the junior end. Looking ahead With gold prices rallying early in the first quarter 2015 got off to a good start, albeit gold seems to have settled downward and the metal is looking for price support. Renewed investor enthusiasm early in the quarter raised much-needed capital for a brief period for project developments and debt repayments. While base metals are likely to witness continued weakness, miners will benefit from the lower input and freight costs resulting from lower oil prices, helping shield some margin erosion. Majors are expected to stay focused on their core businesses, balance sheets and liquidity through cost rationalization, consolidation of core assets, improved operational efficiencies and disciplined investment. Companies are likely to fund development of new projects and attractive acquisition through operating cash
Columbia Steel................................................ 40............................................... www.columbiasteel.com Frutiger Company AB..................................... 37....................................................... www.mobydick.com Golder Associates.......................................... 12............................................................. www.golder.com Grace Industries............................................. 23........................................... www.GraceIndustries.com Grieve Corporation......................................... 37.....................................................www.grievecorp.com Hard-Line.......................................................... 39........................................................ www.hard-line.com Hercules SLR................................................... 13.................................................... www.herculesslr.com Manulift............................................................ 35............................................................. www.manulift.ca Mechanix Wear................................................ 4.................................................. www.mechanixwear.ca Mobil Industrial Lubricants............................ 7.......................................................www.mobildelvac.ca Montt CIA S.A.................................................. 37....................................................www.monttgroup.com Petro Canada.................................................... 2....................www.lubricants.petro-canada.ca/mining SRK Consulting(Canada) Inc......................... 37...................................................................www.srk.com St Lawrence Seaway..................................... 33.......................................................... www.hwyh2o.com Strata................................................................ 16...........................................www.strataworldwide.com WSP Canada.................................................... 17...................................................... www.wspgroup.com
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flows and the disposal of non-core assets instead of high-cost debt and equity dilution, where practical. Globally, deal activity shows little sign of picking up, but we expect to see more joint ventures emerge as a way of sharing the costs and risks associated with accessing new markets and secure new supply. Long-awaited funding from private capital funds could begin to deploy across the sector as sellers align their value expectations with the market, and assets continue to be sold by the large cap producers in search of optimum portfolios. Current market conditions are putting mining companies in a quandary – investing for the next stage of growth is potentially unpopular with shareholders, but it could prove to be a masterstroke if they want to fully capitalize on the next uplift in the cycle. Focus on creating value For the past few years, companies have been focused on cost-reduction programs, internal capital allocation and productivity measures – short-term corrective and shareholder appeasement measures, which have yielded some results. But with the global industry facing a period of historic restructuring, companies positioning themselves to win will need to cast a different lens over their “buy, build or return” decisions – with a broader focus on total shareholder return – and make capital decisions that will support longer-term value creation. One thing is certain: standing still is not an option. CMJ www.canadianminingjournal.com
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