Canadian Mining Journal February/March 2015

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February/March 2015

A SALINE

SOLUTION MINERS GO DEEP UNDER LAKE TO GET MORE SALT

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Departments 5 Editorial

This month Editor Russell Noble talks about being “too old to work” in reference to heavy mining equipment that’s still on many companies’ inventory and will possibly be disposed of because it’s too old to work and too expensive to repair.

CANADIAN Mining Journal CONTENTS

MINING IN ONTARIO

6 First Nations

A new monthly column by Chief Isadore Day, Wiindawtegowinini, Chief of Serpent River Anishinaabe First Nation, and Chief of Lake Huron Regional Grand.

8 Law

A column on: Advice for boards and management when facing financial distress by Dawn Whittaker, a senior partner and Canadian leader of mining and commodities practice, Norton Rose Fulbright, Toronto.

12

New shafts set for Lake Huron mine

Cementation Canada Ltd. prepares to restore shafts at deep Sifto Salt mine.

10 CSR and Mining

A regular column by Michael Torrance, a lawyer in Norton Rose Fulbright’s Toronto office, on Corporate Social Responsibility

34 New Technology

Soft-sided structures by Legacy Building Solutions provide answers to demanding Alberta prairie conditions.

38 Company Profile

This month’s featured company is Atlas Copco of Barrie, Ontario.

Stack’ 18 ‘ Sinuper Sudbury gets

return historic 20 Teams mine site to nature

closer look

Vale undertakes major environmental study of smelter emissions from its massive stack.

older Associates and G Ontario Ministry of the Environment and Climate Change work to clean up historic Deloro Gold Mine site.

42 Products

A look at what’s new in products and services available to the Canadian mining industry.

46 In My Mine(d)

Comments by Andrew Godfrey, an Associate in Norton Rose Fulbright’s Ottawa office.

50 Unearthing Trends

24 Ontario Mining Association Report

OMA looks at trends in mining and the economic impacts of a new gold mine.

A regular column by Ernst & Young LLP, Vancouver.

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February/March 2015

A SALINE

SOLUTION

ABOUT THE COVER Miners work deep beneath Lake Huron at Compass Minerals’ Sifto Salt Mine.

MINERS GO DEEP UNDER LAKE TO GET MORE SALT

Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240

Coming in April

Canadian Mining Journal’s April issue focuses on “Mine Safety.”

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

February/March 2015 • Canadian Mining Journal |

3

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Editorial

CANADIAN Mining Journal February/March 2015 Vol. 136 — No. 2 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 Mark Ryan

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. 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.

Too old to work

By Russell Noble

I

t’s awards season and similar to Hollywood’s almost weekly parade of Golden Globes, Peoples’ Choice, and Oscar ceremonies, plus our own Junos, the mining industry isn’t far behind when it comes to its own events; AME/BC’s RoundUp in Vancouver, SME’s Annual Meeting in Denver, and the grand daddy of them all, PDAC’s International Convention and Trade Show in Toronto, are just a few.

Clearly, the winter is just filled with reasons to get out of the office. And why not?

According to what I’m hearing from my regular sources, things are pretty slow right now and for nothing else, the various events I just mentioned are a good reason to slip away to be with peers to discuss the state of the industry; to reinforce that business in 2015 isn’t very good so far, and that next year looks just as sorry, if not worse for some.

As we’ve all been reading lately, many companies are reeling in their plans and expectations for this year because there are just too many expensive question marks out there.

Money is tight, many commodities are tanking and not worth going after, labour costs are rising, governments are uncertain and unscrupulous in many parts of the world, and closer to home and right under our noses, mining equipment is falling apart and too expensive to fix or replace.

That’s right, the seemingly indestructible machines that are needed to get the ore out of the ground are getting as worn and tired looking as some of the faces at Annual Meetings or on the Boards of Directors.

They, like the growing number of people running many of today’s mining companies, are getting a little too old to work and like it or not, should be retired and removed from the fleet, so to speak.

I know that’s not easily done with people, but with heavy machinery, it’s less of a problem thanks to ‘reality’ television and shows like “Gold Rush,” “Yukon Gold,” or “Yukon Men.”

I don’t know how many of you have watched any of those shows but for nothing else, they give a slight glimpse at mining and what some miners face when trying to discover and recover gold. It’s always gold on these shows.

In any event, and I guess the industry should be somewhat grateful for having mining featured on television, the one thing that underlines each of those shows that bothers me is the fact that almost every episode is based around an equipment failure that threatens the whole mining operation.

The shows rarely focus on mining per se, but seem to always dramatize equipment breakdowns and the panic they cause among the staged and scripted crew of placer miners working the claim.

The impression left with the viewers is that miners use crappy old machines to dig only for gold but ultimately have to work most of the short Arctic season just to pay for machine repairs.

Unlike reality shows, most miners use reliable equipment but that’s not to say that they don’t experience breakdowns too. In fact, like I briefly mentioned earlier, much of today’s equipment is getting old and tired and will be on many companies’ books for major repairs or replacement in the near future.

But the question is, will those costly repairs or replacements be possible under the current state of the economy?

Based on immediate forecasts, probably not. In fact, many of those tired old machines will more than likely just sit things out, rusting away or seizing up until mining rebounds and they’re called upon to try again to ‘dig in’ and produce like they once did.

The problem is, many of them will be too old to work in mining but in reality, they’ll probably end up on television where they’ll break down with the world watching, but at least with a certain degree of notoriety.

Too bad we all can’t go out that way. CMJ

February/March 2015 • Canadian Mining Journal |

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First Nations

Treaties mark legitimacy of First Nation jurisdiction

By Chief Isadore Day, Wiindawtegowinini

A

s Canada continues to be shaped by the need to expand its economic footprint in the global economy, First Nation jurisdiction is becoming a very real and deciding component of this expansion.

The distinguished MacDonald-Laurier Institute recently released a public policy paper called: “Sharing The Wealth; How resource revenue agreements can honour treaties, improve communities, and facilitate Canadian development,” authored by Ken S. Coates. The paper provides a great starting point for a national dialogue on benefits that derive from treaties. The document is a strong signal and recognition that First Nations need to be brought into the ‘fold of benefit’ when it comes to resource development in this country. It is currently being examined closely as a potential launch point for modernizing the “First Nation” interest when it comes to sharing of the benefits from resource development.

Mr. Coates and this critical policy discussion will also achieve another objective – debate.

While we understand that resource revenue sharing, as an element of development is critical, we can’t forget what is truly at the crux of much of the First Nation concern; Sustainable Development. This of course is a larger debate that isn’t so palatable in some circles of political power and control in Canada, including some of the provinces. Why? Because when it comes to the discussion of shared jurisdiction, the playing field becomes a bone of contention for crown governments; are they prepared to formally acknowledge the laws and jurisdictions of First Nations?

Domestic courts continually point to

Chief Isadore Day, Wiindawtegowinini is the elected chief of Serpent River Anishinaabe First Nation and also holds the position of Lake Huron Regional Grand Chief. He is a direct descendant of Chief Shingwauk and Chief Wiindawtegiwinini, signatories to the Robinson Huron Treaty of 1850.

the reality that First Nation jurisdiction is essentially a ‘right to self-determination.’

Essentially, federal and provincial governments in this country have to remain consistent and in line with the rulings that continue favouring arguments by First Nations that their laws are legitimate and that their jurisdictional authority is not arguable.

In Ontario, recent meetings that First Nations have held with Premier Kathleen Wynne and key cabinet ministers opened up formal dialogue about treaties and the role that they will play in shaping public policy in the province.

Chiefs and their experts are quick to point out that while policy will help, the most important ingredient in this new approach will be the respect for First Nation jurisdiction by Ontario. This is a significant step forward in the development of modern treaty relationships in Ontario and goes back to recommendations made by Justice Sidney Linden in the Ipperwash Inquiry stemming from the shooting death of unarmed First Nation protester Dudley George.

Linden’s recommendations were very pointed in that Ontario needed to respect the patchwork of treaties on which the province is situated and that First Nations need to be acknowledged as ‘equal partners.’ This further makes the discussion of First Nation jurisdiction solid in the context of where Ontario is headed on matters of development.

In this context of development of natural resources, First Nations refer to this jurisdiction as a ‘set of responsibilities and formal institutions in place to uphold indigenous rights, laws and obligations.’

In this case, we are speaking about the connection between treaty-making authority and the responsibilities of sustainable development.

First Nation chiefs have been clear in pointing toward a consistent principle in the treaties termed “Spirit and Intent.” First Nations have also been clear about the level and depth of that intent – it underscores the protection of the land and its resources for the next seven generations. There is no alternative to this approach.

To summarize, the new development landscape in Ontario does have a new emphasis on resource revenue sharing, but make no mistake that First Nations are speaking about that as only one aspect of treaty. The land and the people are of vital importance in the decisions made about any development.

It should be without mistake that Canada and the provinces must now begin chipping away at understanding this new reality – First Nation treatybased jurisdiction will continue to evolve and shape policy in this country and influence how development is authorized.

Chiefs in Ontario are expected to begin addressing specific examples and opportunities to implement models of sharedjurisdiction in months to come.

As a First Nation leader, I’ve come to conclude one clear obligation; that Sustainable Development is the only way forward that will protect humanity and ensure we are upholding the sacred obligation of treaties in Canada.

We must protect the land, provide for the people and share in the earth’s bounty; that’s what the treaties were about – nothing more, nothing less.

CMJ

February/March 2015 • Canadian Mining Journal |

7

LAW

Advice for boards & management facing financial distress Dawn Whittaker is a senior partner and the leader of Norton Rose Fulbright’s Canadian mining and commodities team.

By Dawn Whittaker

M

ining companies in Canada continue to face challenging markets.

Tough decisions sometimes need to be made, including potentially idling mining projects or restructuring a company. If financial distress or insolvency is looming, boards and management should add the following to their “to do” list.

Plan Forward planning is critical. While you must know in detail what the near term looks like, the focus should be on long term solutions. Occasionally, a bridge financing or a temporary “fix” is found and implemented. But sometimes these temporary fixes make longer term solutions even more difficult to implement and potentially deprive the company of its best alternatives.

There is a long lead time for any type of financing, extension, forbearance or restructuring. Lenders and other stakeholders don’t like surprises, and will be justifiably critical if management has not assembled the appropriate information and explored alternatives.

Forward planning requires a full understanding of options for selling assets, downsizing, or putting certain operations on a ‘care and maintenance’ program.

Reliable and current information is needed in order to know what is possible and what is not. For example, life of mine analyses may need to be up-dated, cash flow forecasts should be prepared and tested, and collective bargaining and employment agreements should be reviewed.

Understand Get familiar with your company’s loan and security documents. Assess what

defaults may occur and when (consider what can be remedied or not) and what strategies can be used to obtain any waivers or extensions.

Understand the remedies available to your creditors, and what options are available to the company if these remedies are taken. Understand the company’s history with its creditors, so that you can judge if they will be amenable to discussions, or if they will be aggressive in their actions. If you want to restructure loan or security documents, you must understand how this can be done by agreement, or by proceedings if necessary.

Evaluate Compliance (or the failure to comply) with environmental laws is of particular importance to mining companies.

Evaluate the company’s operational and historic environmental risks. Estimate the company’s future costs of remediation.

Are existing financial assurances adequate to address the company’s obligations?

Review the company’s environmental liability insurance policy (if it has one) and determine the scope of coverage.

If restructuring is required, consider the impact on environmental liability risks of proceeding by way of a restructuring process or bankruptcy, including whether any compromise or arrangement addresses potential claims against directors and officers.

Scrutinize Transfer assets, pay dividends, and undertake any non-arm’s length activity only after exceptionally careful scrutiny.

Examine which payables are critical and must be paid, and which payables can

8 | Canadian Mining Journal • February/March 2015

be deferred if necessary. If the company is contracting for goods and services, consider carefully if the suppliers will be paid.

Avoid allegations that the company ordered or contracted for goods and services while knowing that it could not pay.

Public companies must be more diligent than ever with respect to public disclosure and statements.

Pay attention Pay attention to potential personal liabilities.

Recent headline-grabbing cases in Canada have heightened the risk for directors and officers being held personally liable for contamination if a company is unable to undertake or fund environmental responsibilities including remediation of contaminated sites. Directors and officers may be liable even if they did not cause the contamination.

Directors and officers may be personally liable for unpaid wages, unremitted source deductions and unremitted sales taxes in certain cases. Payroll and remittance systems should be reviewed.

Understand your obligations and how to avoid liability.

Review the company’s director and officer insurance and understand the scope of coverage and claim procedures.

An opportunity to bring stability Although financial distress for a mining company is always stressful, and while a restructuring is a daunting process filled with potential risk, it is also an opportunity to bring stability to your company and resolve legacy issues. Your hard work and diligence, guided by solid professional advice, can yield positive results. CMJ www.canadianminingjournal.com

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CSR and Mining

CSR and the CFO Michael Torrance is a lawyer in Norton Rose Fulbright’s Toronto office.

By Michael Torrance

L

ast November’s release of the Government of Canada’s Enhanced Corporate Social Responsibility Strategy for the Extractive Sector (the “CSR Strategy”) may seem an un-noteworthy event for the Chief Financial Officers (CFO) of Canadian mining companies, but upon a closer look, it becomes readily apparent that CSR is more relevant than ever to the work of the CFO. The private sector lending arm of the World Bank, the International Finance Corporation (“IFC”), has applied CSR environmental and social standards in assessing its investment decision making since the 1990s. The size and scope of the IFC and its investment and financing activity (over $97 billion invested since 1956) made compliance with the IFC’s CSR standards an important consideration for any businesses seeking financing for projects in the developing world.

The IFC’s CSR requirements were codified into a very detailed set of regulationlike standards called the IFC Performance Standards on Environmental and Social Sustainability (“IFC Performance Standards”) in 2006, updated and restated in 2012. The relevance of the IFC Performance Standards grew exponentially when, in 2002, a coalition of private sector financial institutions launched the Equator Principles (the “EP”).

The EP requires signatories to apply the IFC Performance Standards in the assessment and management of certain asset based financings, including project financing over certain monetary thresholds. At present, the EP has been adopted by 80 global financial institutions (including all of Canada’s Chartered Banks and Export Development Canada), covering

over 70% of all global project financing that occurs in emerging markets. Of great importance to CFOs, this phenomenon makes compliance with the IFC Performance Standards a threshold qualifier for financing – thereby aligning CSR compliance with access to debt capital.

The IFC Performance Standards and the Guiding Principles were expressly endorsed by the Government of Canada as part of the CSR Strategy. In so doing, the Government of Canada has, of its own accord, pointed to the IFC Performance Standards as the appropriate benchmark for assessing CSR practices of Canadian miners. This adds another, but by no means the most significant, driver encouraging adoption of the IFC Performance Standards.

In 2012, the IFC Performance Standards were revised to incorporate the human rights due diligence requirements of the United Nations Guiding Principles on Business and Human Rights (the “Guiding Principles”). By consequence, the Guiding Principles were also incorporated into all EP financings. Again, the CSR Strategy follows this development with endorsement of the Guiding Principles as a benchmark for human rights performance – but the real significance of this human rights standards arises in its implication for access to capital.

CSR is also a growing focus of equity investors. Institutional investors, such as the Canadian Pension Plan Investment Board (CPPIB), regularly incorporate environmental and social risks and opportunities in investment analysis. The CPPIB is one of more than 1300 signatories to the Principles of Responsible Investing (PRI), which requires the incor-

10 | Canadian Mining Journal • February/March 2015

poration of CSR issues into investment decision making. The International Integrated Reporting Council, Global Reporting Initiative (GRI), and the Sustainability Accounting Standards Board, are spearheading the broad adoption of integrated reporting of financial and non-financial disclosure as standard accounting practice. Apparently following this trend, the CSR Strategy endorses the Global Reporting Initiative integrated reporting framework as a best practice for Canadian miners.

There are numerous government-led initiatives requiring greater disclosure of CSR related information from publicly listed companies beyond disclosure of material environmental and social information already required by existing securities rules. For example, in 2014 the Canadian government tabled its newly developed Extractive Sector Transparency Measures Act which requires that companies involved in the commercial development of oil, gas and minerals publicly disclose payments that they make to foreign and domestic government entities. Similar legislation has already been passed in the European Union and the United States.

Also in 2014, the European Parliament adopted a directive on non-financial disclosure, that will require European companies with 500 or more employees to disclose information on policies, risks and outcomes as regards environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity in their board of directors.

With so many CSR developments tied to financial matters, is increasingly in the domain of the CFO. CMJ www.canadianminingjournal.com

| Mining in Ontario

DEEP DRY

&

“Watertight” is the word as crews work to restore salt mine’s old shaft liners

By Eastern Correspondent D’Arcy Jenish

C

ementation Canada Ltd. of North Bay, Ont. bills itself as “one of the premier shaft sinking companies in the world,” and it has the track record to back up that claim.

With some 20 projects on the go in Canada, the U.S. and elsewhere around the world, Cementation is also on record for having sunk the deepest shaft in Canada at the Kidd Creek Mine in Timmins, the deepest single lift shaft in the U.S. at the Resolution Copper Project in Superior, Arizona, and the deepest single lift shaft in the world at the South Deep Gold Mine in South Africa.

12 | Canadian Mining Journal • February/March 2015

But by the end of March, Cementation crews will start a completely different sort of project at the Sifto Canada salt mine in Goderich, Ont., on the shore of Lake Huron. They will begin refurbishing the liners inside two of the mine’s three shafts, which will take almost four years, and rank among the most challenging work the company has taken on in recent years.

“Technically, this is a very different project,” says President and Chief Executive Officer Roy Slack. “It’s not like designing a shaft or shaft liner from scratch. We have to adapt to what’s there.”

In both cases, what’s there is a concrete liner that has deteriorated and sprung www.canadianminingjournal.com

A profile of the Sifto Salt Mine in Goderich, Ont., showing the process of mining salt from shafts, processing and conveying of materials to a ship ready for transport through the Great Lakes.

February/March 2015 • Canadian Mining Journal |

13

| Mining in Ontario leaks. In some places water is seeping in.

Elsewhere, it is surging through the concrete as though driven from a garden hose.

The problem is partly a function of age.

Shaft one, which is now out of commission, was sunk in the late 1950s, while shaft two, currently used to move miners and materials, was built in the early 1960s.

The construction standards of the day have also played a role, says Mike Marksberry, Director of Mine Engineering with Compass Minerals Inc., the Kansasbased company which owns Sifto Canada.

“They used thicker concrete where water was an issue and thinner concrete

where it wasn’t,” says Marksberry. “But over the years with ground movement from mining and everything, water has migrated everywhere.”

A third shaft, sunk in the late 1970s, remains in good shape and is not in need of repairs. It is equipped with a cage to transport miners and materials as well as skips to haul salt to the surface and will remain in operation while the other two are refurbished.

All three shafts were sunk to a depth of 543m to tap a vast, nearly pure salt deposit which is some 25m thick and extends for hundreds of square miles beneath Lake Huron.

A miner keeps a close eye on salt being transported deep beneath Lake Huron.

14 | Canadian Mining Journal • February/March 2015

www.canadianminingjournal.com

Miners currently have to travel some eight km from the bottom of the shafts to reach the mine face. In the future, they’ll be travelling even farther.

“The reserves under Lake Huron are almost endless,” says Marksberry. “We could literally mine all the way to Michigan if we kept going. One of the things driving this project is that we intend to operate this mine for 50 plus years.”

The headframes and other surface infrastructure are located on a narrow, L-shaped spit of land with the mouth of the Maitland River on the inside of the spit and Lake Huron on the outside and that adds another layer of complexity to the shaft rehabilitation projects.

Space is limited and Cementation must remove the headframes for shafts one and two, as well as several other aging structures, before the work below surface begins.

The mine will continue to operate throughout the project and salt destined for markets will be loaded onto ships and rail cars.

Compass initially intended to remove the old concrete liners in the two shafts and replace them with fresh concrete, but it would have had to stop the inflow of water until new hydrostatic liners were installed.

The company looked at two options for doing that and found problems with both.

The first was freezing in which a series of wells was drilled around the shaft and a refrigerant injected, a proven technology, but one that occasionally fails. Compass also considered using pumps at the surface to draw off enough water to prevent leaks, but concluded that that approach would not work.

Cementation came up with a solution that, while not unique, is also not very common.

Norm Rochon, who will supervise and manage the work, says the existing concrete will be left in place to a depth of 296m, which is the bottom of the waterbearing strata, and cylindrical steel liners will be installed to make the shafts impermeable.

First, though, Cementation must construct a concrete foundation ring to support the steel liners. It will be built into the native rock behind the existing concrete

Heavy machines working the face of the mine.

SOME OF CEMENTATION’S DEEPER JOBS

T

he world’s mining companies are delving ever deeper into the surface of earth in search of mineral wealth and Cementation Ltd. of North Bay, Ont. has designed and constructed some of the deepest shafts on record, including the following: On November 14, 2014, after six years work, Cementation completed the production shaft at the Resolution Copper project in Superior, Arizona. It is 8.7m in diameter and 2152m—the deepest single lift shaft in the U.S. The Resolution mine is expected to produce 25 per cent of annual U.S. copper output.

Cementation’s South African subsidiary broke ground on the twin shafts--production and ventilation--at Gold Fields’ South Deep Gold Mine in June 1995. They were commissioned in November, 2004. The production shaft is 3042m deep, the world’s deepest single lift shaft.

Glencore’s Kidd Creek Mine D--a copper-zinc producer--is now the world’s deepest base metal mine. Cementation designed and constructed D shaft, which starts 1456m below surface and plunges 1607m to a depth of nearly 3100m.

February/March 2015 • Canadian Mining Journal |

15

| Mining in Ontario A picturesque look at the mine’s main shafts.

SRK

16 | Canadian Mining Journal • February/March 2015

liner and will extend 230mm into the shaft, meaning that the widths of shafts one and two will be reduced to 4.5m from 5m when the project is complete.

Once the foundation ring is finished, Cementation can begin installing the new liner in sections, each of which will resemble an enormous steel ‘can.’

The steel will be 38mm thick and each ‘can’ will be 3.1m in height. Two sections (weighing a total of 42 tons) will be welded together at surface and lowered into place using giant cranes.

Cementation crews will be working in the shafts throughout the rehabilitation project and they will be lowered into place on a platform called a galloway. They will construct the foundation ring and will inject a thin layer of grout comprising cement, water and small amounts of sandlike aggregate between the exterior of the steel ‘cans’ and the existing concrete liner.

As well, each 6.2m-high ‘can’ must be welded to the one below it and Cementation workers will perform that task as well.

“This project is anything but typical,” says Rochon. “We’re not typically working in an existing shaft with existing infrastructure, with production ongoing and with water flowing into the shafts. This is a salt mine. It really has to be watertight.”

From the foundation rings to the bottom of each shaft--a distance of 248m--Cementation will chip out the old concrete and replace it with a new liner that is 457mm thick.

The mine will continue operating throughout the rehabilitation project. Shaft three will continue to be the main production shaft and will serve that purpose even after the work is complete.

Cementation will be working on shaft one first and it will be put back into operation as a production shaft afterward, which means a new headframe will have to be constructed along with all the associated infrastructure.

Shaft two will be reserved for ventilation.

“We can’t have any conveyance equipment in there taking up space,” says Marksberry. “It has to be stripped of everything to ensure the least possible resistance and to meet the safety regulations, which have become more stringent over time.”

CMJ www.canadianminingjournal.com

Did you know?

JBR Environmental and USKH are now Stantec.

| Mining in Ontario

FUTURE

FUMES? WILL SUPER STACK BE NEEDED BY VALE AFTER RETROFIT PROJECT?

A

t more than 388m high and just over 36m wide at base, Vale’s “Super Stack” in Sudbury is unquestionably the city’s most outstanding feature.

In fact, it’s also one of Northern Ontario’s more outstanding features because it’s literally the tallest structure in the north and can be seen for miles from every direction as it towers over the city.

Even Sudbury’s world-renown “Big Nickel” pales by comparison when it comes to size and impressive landmarks.

Built from almost 16,500m3 of concrete and strengthened with nearly 956 tonnes of 38mm and 13mm re-bar, the stack is a solid monument that has with-

stood the harshest of conditions that Mother Nature could throw at it.

Extreme cold and blowing snow, fierce winds and driving rain, heat and lightning, and even ground-shaking tremours, have barely made a mark on the stack.

And, the fact that it’s also lined from top to bottom with 6.4mm nickel stainless steel and that its walls are 1.1m thick at the base and 267mm at the top, have all added to make the stack almost indestructible.

It was clearly built to last and since it started rising on the horizon in 1970, and subsequently going into service on August 21, 1972, the stack has performed as planned by safely carrying sulphur dioxide from INCO’s (now Vale’s) Copper

18 | Canadian Mining Journal • February/March 2015

Cliff smelter high into the atmosphere and away from the city.

However, long before any SO(2) reaches the atmosphere, a complex steel flue system almost 1.1km long has been designed to handle the 725 deg (F) gases.

Travelling at more than 88 km/h through 88 nickel-stainless steel diaphragm-type expansion joints, the gases are carefully monitored by 13 environmental control stations strategically placed along the flue system to collect and determine the dust burden, temperature, and volume of the gas flow.

Clearly the super stack has been designed with the environment in mind, but Vale is moving forward to make things www.canadianminingjournal.com

Aerial gives scale of the ‘super stack’ in relation to the smelter and the neighbouring community.

in Sudbury even cleaner by embarking on a $1-billion AER (Atmosphere Emissions Reduction) Project to dramatically reduce emissions even further.

Eighty-five per cent further is what Vale is projecting as the company plans to capture sulphur-bearing gases from the smelter’s converter aisle at Copper Cliff and significantly reduce dust and metal emissions.

As mentioned earlier, the process of handling the gases is complex and involves a long and heavy system comprised of rectangular and circular sections, some as large as 7m in diameter, and flues, that combine to weigh 3,300 tons.

Trestles, bents and towers on which the flues are supported involve another 2,300

Vale is spending an estimated $1B on an Atmosphere Emissions Reduction (AER) Project to dramatically reduce emissions from its ‘super stack’ in Sudbury.

tons of steel, so once again, it’s not only a complex set-up, but a heavy one too.

Vale’s retrofit of its Copper Cliff smelter is a huge undertaking but one that the company is obviously committed to otherwise why would it have invested close to $100 million on research and development of the project even before it was approved by the Ontario Ministry of the Environment and other governing bodies?

Kelly Strong, Vale’s Vice-president of Ontario and U.K. Operations, knows why: As he recently told the Greater Sudbury Chamber of Commerce, Strong says: “As Sudbury’s largest private employer and mining company, Vale plays a large part in ensuring the community continues to thrive and prosper and we’re working to implement new and innovative solutions that will create the next generation of sustainable mining.”

Strong admitted that spending $1 billion on a project that “will not result in any new nickel” is a lot of money to spend on a project, “but it’s the right thing to do.”

He said that some may argue the AER Project is being driven solely by government regulations, Vale is actually going beyond compliance at the conclusion of the Project, down to 20 kilotonnes of SO(2) per year versus the regulatory limit of 66 kilotonnes per year.

Proudly, Strong repeats what was mentioned earlier, “that represents and an 85 per cent reduction from today’s rates and significantly cleaner air for our community.”

To further explain about the work that will be undertaken during the complete

retrofit of the converter aisle, Strong says: “Sulphur dioxide that currently goes up the super stack from our existing converters will be sent to our acid plant, converted to sulphuric acid, and sold.”

“A tremendous amount of work has already been completed on this project.

With the help of a local company, we’ve successfully installed our first new converter and it’s operating exactly as planned in terms of gas capture and increased efficiencies. Detailed engineering is currently underway on the next converter replacement and fabrication of the new vessel is on track.”

Strong continued by saying: “Engineering is also underway on a new state-of-the-art secondary bag house, which is essentially like a giant vacuum cleaner to capture dust and emissions. It will be about the size of an NHL hockey rink and one of the biggest of its kind in North America.”

“Given the tremendous reduction in emissions and change in the processes, Vale is working to figure out if it should continue to use the 338m super stack, or build something smaller that would operate more efficiently by using less natural gas to heat and maintain than the super stack?”

That’s a question Vale is working on now but should the answer be “go smaller,” then the next question around Sudbury will be: “What’s going to happen to the landmark Super Stack. Will it come down.?”

For the sake of notoriety, you can bet the “Big Nickel” hopes so.

CMJ

February/March 2015 • Canadian Mining Journal |

19

| Mining in Ontario — Deloro Mine Aerial view of the Deloro Mine site east of Peterborough, Ont. Golder Associates Ltd. is working in the waste consolidation area along the Moira River.

Deloro Mine Site, 1916, from east bank of the Moira River.

Workers at the former Deloro Smelting and Refining Company Ltd. 20 | Canadian Mining Journal • February/March 2015

www.canadianminingjournal.com

HANDLED CARE WITH

HISTORIC MINE RETURNS TO NATURE

By Russell Noble

O

A large operation once occupied the site.

ntario, like most provinces and territories in Canada, is riddled with working mines and an equal number of historic sites where mining was once the mainstay of economic activity and support.

From its northern-most reaches of Hudson Bay, to the new and promising lands of the “Ring of Fire,” to farther south and the world-famous regions near Timmins and Sudbury with their abundance of producing mines, Ontario is undoubtedly one of the richer mining areas in Canada, if not the world.

Historically, Ontario is known for big names like Hollinger, Noranda, Falconbridge and Inco, for helping develop the province into the powerhouse of mining that it is today, but there were also a number of smaller, yet equally significant companies that played an important role in giving Ontario its international status.

The Canadian Consolidated Gold Mining Company, for example, (a British-based company) started mining gold at its Deloro Mine near Peterborough, Ontario, in 1873.

In the “valley of gold” named Deloro, gold was first discovered in 1868 but it wasn’t until Canadian Consolidated Gold Mining came on the scene five years later and began mining in ernst did the southern Ontario site become known.

For nearly a quarter of a century, Consolidated Gold worked the site but in 1896, because of poor recovery methods, the company sold the Deloro Mine to Canadian Gold Fields Company and the first mill was built.

Using a new cyanide technology to extract the gold and with enough financial support to build roasting furnaces to remove the arsenic from the gold, the new owners were on their way to successfully operating one of the more modern mines of its time.

From 1896 until 1903 when the mill was closed due to the poor grade of the gold, Canadian Gold Fields worked hard and steady to make the mine work. However, following the closure of the mill, a number of uses were subsequently found for it, including the processing of silver ores and the production of cobalt and stellite. (stellite is an alloy of primarily cobalt and chromium). It was very important in the manufacture of munitions in the 1st and 2nd February/March 2015 • Canadian Mining Journal |

21

| Mining in Ontario — Deloro Mine Excavator begins demolition work on former mine workings in 2013.

World Wars. Deloro was the exclusive supplier of stellite to the Allied Forces.

The Deloro Mine’s original mill eventually became known as the Deloro Smelting and Refining Company Limited, and was enlarged to include a primary treatment plant, an oxide building, an oxide refining building, a silver refining building, an arsenic bag house, an arsenic chamber building, an arsenic pack house, and a variety of other buildings for precision casting and manufacturing of cobalt metal alloy.

But one problem still remained; what to do with the tons of arsenic* that remained from the manufacturing process?

Unthinkable by today’s standards, but stock piles of arsenic and other hazardous materials were buried or just left on the surface. (*Arsenic may have been a by-product but it was also a lucrative commodity. Deloro was the largest North American manufacturer of arsenic based pesticides. The problem with arsenic stock piles only emerged after organo-chloride pesticides became the preferred product).

REMEDIATION WORK PRIOR TO THE START OF FINAL CLEAN-UP

• Construction and on-going operation of an arsenic treatment plant to treat contaminated groundwater (currently operated under a service agreement with the Ontario Clean Water Agency); • Establishment of an extensive ground and surface water monitoring network; • Locating and sealing major abandoned mine shafts and mine workings; • Covering eight hectares of tailings with crushed limestone; • Demolishing derelict buildings; • Installing perimeter fencing and signage; • Conducting two major off-site assessment studies; • Developed the final integrated clean-up plan; • Completed an Environmental Assessment Study Report, in keeping with the Canadian Environmental Assessment Act, approved in 2009; • Obtaining the Water Nuclear Substance Licence from the Canadian Nuclear Safety Commission (2009) to possess, manage and store low-level radioactive waste on the property; • Upgrades to site-access road (2010); and • Obtaining a Provisional Certificate of Approval for the waste disposal facilities on the site (2011).

22 | Canadian Mining Journal • February/March 2015

Demolition of the former castings building in 2013 by Golder Associates Ltd. working with Demo Plus Inc.

Along with arsenic, the site had been polluted from various mining operations and included waste products with low-level radioactive properties, material stemming from the smelting of uranium ore operations. Compounding the problem were also approximately 90,000 tonnes of ferric hydroxide (red mud) that were pumped as waste slurry from the hydrometallurgical plant to the tailings area from 1914 to 1961 on the 202-hectare site.

Nearly a century's worth of hazardous by-products and residues - a complex blend of toxic compounds; metals like cobalt, copper, nickel; and low-level radioactive wastes. Each of these materials causing significant environmental impact at the site, including contamination of the site's soil, sediment, surface water and groundwater, posing a potential threat to nearby communities and watercourses.

In other words, a large scale environmental problem.

And that’s where the story of the Deloro Mine Site Cleanup begins.

In April 1979, the site was abandoned by the final private property owner, Erickson Construction Limited who declaring a lack of operating funds following Ministry of Environment orders, the property was escheated to the Crown in 1987 but the ministry was unsuccessful in recovering costs.

More than 30 years later, significant progress has been made at the site, with the Ontario Ministry of the Environment and Climate Change (MOECC) spending more than $75M to date on this project.

Robert Putzlocher, Deloro Project Engineer with the Ontario Ministry of the Environment and Climate Change says “The goal of the clean-up is to isolate and contain contamination on the site itself to keep it from getting into the environment. We’re doing that by building two engineered covers and an engineered containment cell, and by managing ground and surface water.”

A top priority of the ministry was protecting the neighbouring Moira River, which runs through the site and flows into the Bay of Quinte on Lake Ontario. As recently as 1983, an average of 52 kilograms of arsenic were going into the Moira River every day.

To help solve this problem, Putzlocher says that an arsenic treatment plant has been built and operates daily, to collect and treat arsenic-contaminated groundwater from the mine site. The www.canadianminingjournal.com

A map shows mine site (circled) and its proximity to Ontario Hwy 7 and the Town of Deloro.

plant includes an 80-metre underground concrete wall to stop groundwater from getting into the Moira River, a clay-lined contaminated-water holding pond, and nine pumping stations.

The plant removes 99.5% of the arsenic found in the contaminated groundwater.

In addition, the ministry has sponsored projects involving the installation of extensive ground and surface monitoring networks, locating and sealing all old abandoned mine shafts, demolishing derelict buildings and the construction of an on-site laboratory to analyze ground and surface water samples.

From 2011 to 2013, the ministry contracted Golder Associates Ltd. to perform the more specific tasks of the Tailings Area Clean-up and Phase 2 of the Industrial and Mine Area Clean-up.

Golder, while working as General Contractor for the MOECC, also self-performed the required QA/QC for the civil remediation works, radiation monitoring, water sampling and analysis and air quality monitoring required during the operations. For more than three years, Golder concentrated on securing the site contamination by building a groundwater collection system and upstream surface water flow diversions to meet the project’s objective of limiting infiltration to less than 10 per cent of annual precipitation and thereby reducing the discharge to neighbouring waterways.

At the large tailings area on the east side of the former mine site, Golder installed over 26 hectares of geosynthetics, 300,000 tonnes of fill material and planted more than 10,000 poplar trees to com-

Multiple excavation operations and remediation works alongside the Moira River’s east bank.

FINAL CLEAN-UP DESIGN INCLUDES:

• Construction of two engineered covers and one engineered containment cell on the site with an approved capacity of 750,000 m3.

• Tailings Area: A low permeability cap planted with a hydrid poplar tree plantation.

• A leachate collection system and groundwater pumping wells in the Tailings Area with conveyance to the arsenic treatment plant.

• Industrial and Mine Area: Excavation and backfill of about 30 hectares of contaminated material.

• Waste consolidated and topped with a low permeability engineered cover.

• Young’s Creek Area: Engineered containment cell with bottom clay layer.

• Contaminated sediments to be excavated.

• Slurification, drying and storage of sediments in geotextile containers.

• Low permeability cover constructed over the stacked geotextile containers.

plete the capping of the area and restore it to a natural condition.

Its work continued in the Industrial Mining Area (IMA) located to the west of the Moira River. Heavily contaminated wastes were placed within the site’s waste consolidation area (WCA), with final design planned to include a cap of engineered geotextile, geosynthetic clay liner, layers of clay fill, sand and revegetation of the area.

Golder Associates Construction Contracts Manager, Brian Daniels, says the $21M cleanup projects posed several challenges, specifically with workers and exposure to low-level radiation.

“We developed and executed an extremely intricate Radiation Protection Plan for workers at the Deloro project,” says Daniels, “resulting in 100% compliance with the Canadian Nuclear Safety Commission, the Ministry of the Environment regulations and most importantly, resulting in a safe working environment for our people over our years at Deloro.”

In 2013-14, work continued on the consolidation of waste into the Industrial and Mine Area WCA. In addition, the Ministry successfully commenced cleanup operations in Young’s Creek in preparation for a large scale dredging project focusing on removing impacted sediment from the creek bed.

The project is expected to be completed by 2017.

Putzlocher says: “Ontario is finishing the clean-up of the abandoned Deloro mine site so that we can continue to improve water quality in the Moira River. The site will be engineered to be safe for people and the environment for hundreds of years.” CMJ

Golder Associates Ltd. working with Drain Brothers Excavating Ltd.’s pipe crews during the installation of leachate collection systems with full personal protection equipment.

February/March 2015 • Canadian Mining Journal |

23

| Mining in Ontario

Riding the Tides Ontario’s miners have the right stuff to make the best of (all) times

By Chris Hodgson, President, Ontario Mining Association

O

ntario’s mining industry has repeatedly proven itself capable of riding out the low tides of recession while cresting with the high tides of booms and prospering through most phases of business and commodity price cycles.

Through economic thick and thin, it has been a significant factor in the development of Ontario since the late 1880s. While we can all get distraught over the current crisis of the day, or become over-elated with the golden opportunity around the next corner, the longer-term view shows mining is a steady and reliable contributor to Ontario’s foundation.

A recent conversation with Ontario Mining Association Manager of Communications Peter McBride, who is departing shortly to retire after spending more than 24 years with the Association, reminded me of this.

His time at the OMA has spanned two recessions, one financial crisis, one “super” cycle boom, the tenures of 13 OMA chairmen, nine provincial mines ministers and six Ontario premiers.

That provides perspective.

Over the decades, miners have made the most of Ontario’s mineral endowment to attract investment, create jobs, support communities, pay taxes, help build infrastructure and provide hope and opportunity to people with different skills

24 | Canadian Mining Journal • February/March 2015

and backgrounds.

Elsewhere in this issue, an article on the study “An Au-thentic Opportunity: The economic impacts of a new gold mine in Ontario” more fully explore the positive role just one mine can have in this province.

People in the business have adapted and innovated, while adjusting to changing circumstances not just technologically but also in the human resource sense. They make the difference.

To succeed, miners need to know local, national and international economics, business and politics. Actions taken anywhere in the world can impact the success of a mining venture.

A decision to move a road in Timmins, buy a diamond in Tokyo, open an electro-plating shop in Turin, make winter driving safer in Toledo, raise taxes in Tanzania, or improve port facilities in Tasmania can all impact mining operations in Ontario.

Miners have adapted to the times. The skills today of mine operators and mine managers are more advanced and more complicated than – with all due respect — their predecessors.

Succeeding in a genuinely international business and meeting the realities of modern society demand it.

While no one could dispute a high level of training, safety awareness and technical skill are essential to the successful operation of million-dollar-plus pieces of high-tech equipment underground, www.canadianminingjournal.com

A scenic ‘low-tide’ view depicts the message that mining in Ontario is a low point right now but like the tides, it will return to higher points of booms and prosperity.

think of the advancement in the skill sets of mine managers.

In many ways, these people are among the unsung heroes in their communities.

Only a few decades ago, mine managers could focus almost exclusively on their engineering skills. It may be a bit of an exaggeration but they could largely operate within their own worlds.

They could build a good team, promote safety, manage budgets and report to head office.

Think of the mine manager today. An abundance of “soft” skills are needed in addition to engineering and technical expertise. The list of mining industry stakeholders seems to be perpetually expanding.

In the modern age, mine managers must serve as the faces of companies in their communities. They need to manage in a constructive and fair way the sometimes competing requests of local charities.

Open houses, information sessions and public consultations both inside and outside of municipal government offices have become regular activities for mine management.

The complex world of First Nations relations is on the agenda for many at mine sites. Historical and cultural boundaries are crossed. While issues still abound, the facts that mining is the largest private sector employer of Aboriginals in Canada, and

that Aboriginals make up 9.7% of Ontario’s mining workforce, show progress is being made.

In the past, mine managers did not have to be conversant in the language and practice of corporate social responsibility. The management of safety of workers on the mine site has expanded to include efforts to protect and promote family safety and safer communities.

Along with safety, a strong and proactive concern for the environment and the impact mining activities can have on the environment -- that must be mitigated — are paramount.

In short, mine management in the 21st Century cannot operate only in its own world. It must operate in the real world and deal with issues well beyond mining engineering and metallurgical science.

The demands of the real world have been increasing and they are being met. The materials essential to our modern lifestyle and our well-being are being produced in more sustainable and transparent ways.

Mining in Ontario has proven itself to be adaptable and it is meeting the challenges.

Let’s all keep in perspective what the industry has done for Ontario and what it will continue to do going forward.

People make the difference.

CMJ February/March 2015 • Canadian Mining Journal |

25

| Mining in Ontario

GOLD POWER A look at the economic impacts of a new gold mine A Special Report

by Peter Dungan* and Steve Murphy*

O

pportunities for gold mining in Northern Ontario have risen remarkably in recent years, with new mines underway and the potential for several more in varying stages of the review process.

All stakeholders; including miners, Aboriginal and other local communities, governments and supplier industries, will benefit from an assessment of the economic impact of new gold mines for proper planning.

Building on the techniques employed in 2007 to examine the impact of a ‘representative’ Ontario nickel and copper mine, we estimate, using conservative assumptions, the impact on GDP, employment and government revenues of both the construction 26 | Canadian Mining Journal • February/March 2015

and the ongoing operation of a new gold mine in a relatively remote region of Northern Ontario.

The impacts are for the Ontario economy as a whole and, more generally, for the region in which the project is sited.

Impacts are also shown for Canada and selected other provinces.

Most gold mining in Northern Ontario up to this point has been ‘underground,’ but a number of newer projects (both operating and proposed) use ‘open-pit’ techniques. The choice between the two is determined by the geology of the ore body and mineral economics, but given that both types of mines will likely be developed, this study examines the impacts of each.

We consider a new open pit gold mine with a construction www.canadianminingjournal.com

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A spectacular view of a gold mine that has had an economic impact on the community.

cost of $750 million spread over three years (after and excluding all exploration, planning, permitting and other pre-construction expenditures).

The mine then generates sales of $300 million per year, potentially for over 20 years into the future and employs 440 people on site with total compensation of $142,200 per worker.

The combined direct, indirect and induced economic impacts of an open-pit gold mine are extremely large.

In its construction phase, the mine adds about $183 million to Ontario GDP and generates more than 1,900 jobs annually.

In its production phase, for each year of operation, the mine adds approximately $300 million to Ontario GDP and increases

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| Mining in Ontario Detour Gold’s Mine in Northern Ontario.

Ontario’s employment by more than 1,800 at a rate of compensation per employee well above the provincial average.

The combined impact on government revenues of a new open-pit gold mine is also large: In the construction phase, governments collect a total of $60 million a year from the mine’s direct, indirect and induced activity while in the production phase, this rises to $95 million per year.

The provincial government’s share is $25 million in the construction phase, and over $38 million in the production phase.

We also consider a new underground gold mine with a con28 | Canadian Mining Journal • February/March 2015

struction cost of $600 million, also spread over three years.

This mine also generates $300 million in sales per year over an extended period with on-site employment of 620 and total compensation per worker of $145,500.

The combined direct, indirect and induced impacts of an underground mine are also very large.

In the construction phase, the mine adds almost $150 million to Ontario GDP and generates more than 1,500 jobs in each of the three years.

In production, the mine contributes over $330 million per www.canadianminingjournal.com

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In the construction phase of a new underground gold mine, governments collect just under $50 million a year from the direct, indirect and induced impacts, with the provincial government receiving $20 million.

In the production phase, all governments receive over $100 million per year, with over $40 million going to the provincial government.

Just as a typical mine, whether open-pit or underground, has

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| Mining in Ontario Richmond Mines.

Kirkland Lake Mine.

multiple layers of activity, the analysis of a new mine’s impact extends down to several layers below the economic activity at the mine site itself.

The first level down is what could be characterized as the indirect impacts of the mine: These are the purchases that the mine must make in order to be built and to undertake its production (its ‘inputs’), and also the purchases that the industries producing these inputs must make to facilitate their own pro-

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duction (‘inputs into inputs’), and so on back along the production chain.

Included in these indirect impacts are the provision of transportation facilities to the mine, the purchase of a wide range of accounting, financial and scientific services, and the replacement of machinery and equipment that wears out at the mine in the course of production. Also included are all the inputs required to produce the mine’s purchased inputs.

For example, the replacement parts that are needed to maintain the machinery at the mine and the steel that goes into those parts and the energy and transportation services needed to produce the steel. This ‘backward chain’ of inputs into inputs is quite extensive.

The second level down can be termed the induced economic impacts. These are the economic impacts that result from the spending of wages and salaries by workers employed both directly by the mine and indirectly in all of the supplier industries.

To the extent that these consumer goods and services are produced in Ontario, there is a further economic impact on the province. Moreover, this level has a backward input chain to it as well, since consumer goods, or services, require their own inputs which may also be produced in Ontario and generate further wage earnings.

The third level down is to consider the regional impacts of a new gold mine where ‘regional’ for a mine in a relatively remote site must be considered as a broad enough area to include the nearest major town or city, as well as all the smaller communities within roughly the same distance.

Obviously the mine’s own building or production activity is

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| Mining in Ontario Goldcorp’s Red Lake Mine.

local, but so too will be at least some of the indirect and induced impacts identified at the first and second levels.

A significant share of the impacts of a new gold mine stay in the local area. For example, for an open-pit gold mine in production, more than 1,350 of the total of 1,800 jobs generated are

local. For an underground mine, almost 1,700 of the 2,200 jobs generated are in the broad local area.

Given that the mine is assumed to be located in a relatively remote area of Ontario, the local impacts can be seen to some extent as a proxy for opportunities for Aboriginal individuals

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and businesses in the broadly surrounding area.

An attempt has been made in this study to identify the skill mix for the jobs that have been identified as local. Some of these jobs will require considerable expertise and such individuals will likely come from outside the local area, although part of their spending will encourage local activity. However, an important share of the local jobs require less-specialized preparation or training that can be learned on the job.

For example, in the production phase of a new open-pit mine, of the more than 1,350 local jobs, 25 per cent require only Secondary School or Specific Occupation Training, and a further 12 per cent require only On-the-Job training.

Moreover, gold mines underway and planned are already attempting to outsource services to local entrepreneurs and to nurture new local supply and service enterprises.

At the fourth level down there are important but unquantifiable economic and social impacts that originate from the new mine. Most notable among these are the economic activity associated with maintaining the local community: Local government workers, teachers, police, fire and health care.

Beyond the employment impacts, and the encouragement of local entrepreneurship, there will also be direct monetary benefits to Aboriginal communities through Impact Benefit Agreements (IBAs). Such agreements, however, can vary widely, are subject to intense negotiations and historically have tended to be confidential (although changes to federal legislation are expected to make them more transparent in the future).

No attempt has been made to quantify the monetary flows resulting from them, but they will certainly occur and flow through to Aboriginal communities, which would add to the ‘induced’ effects we calculate purely from the respending of labour income.

Finally, there are the intangible benefits of the provision of key infrastructure, such as access roads and electrical grid connections, that are part of the costs of constructing either open-pit or under

ground mines in remote locations.

As with transferable skills, these remain behind to benefit individuals and the remote community even when the mine eventually closes down.

Briefly then, the contribution of a new gold mine to the province is large and significant, with important impacts on

employment and economic output, particularly in areas of the province that could benefit the most from them. CMJ Peter Dungan* is Director, Policy and Economic Analysis Program, Rotman School of Management, University of Toronto, and Steve Murphy* is Research Associate, Policy and Economic Analysis Program, Rotman School of Management, University of Toronto.

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| New Technology

Soft & SOUND Fabric structures provide answers to hard questions Staff Report

W

hen it comes building fabric structures, few places provide better proving grounds than the often cold and windswept Prairies of Canada.

From the driving snows of winter, to the equally strong forces of wind and rain during the summer months, the conditions North of the 49th Parallel provide many challenges when it comes to providing shelter from Mother Nature.

As tough and rugged as heavy mining equipment is, sheltering it from harsh environments often requires structures to protect it from the elements and on a similar note, so too do the supplies used in the day-to-day operation of a mining project.

Hydraulic fracturing (fracking) is one of those processes that relies heavily on

supplies (frac sand) to aid in the fracturing process and Source Energy Services (SES) of Summer, Wisconsin, is one company that has emerged as a leader when it comes to being a reliable source of sand.

In fact, (SES) is one of the faster-growing industrial sand suppliers in North America and is believed to have one of the larger production facilities for silica sand.

Its single location in Summer is set up to produce more than two million tons of proppant annually.

Sand from Wisconsin is delivered to storage terminals located near key shale plays across North America, including a new frac-sand distribution centre in Wembley, Alberta.

Local infrastructure in many cities and surrounding areas hasn’t developed fast enough to keep pace with increasing fracking activity and as a result, produc-

34 | Canadian Mining Journal • February/March 2015

tion and support companies have had to resorted to makeshift options, particularly when it comes to erecting any buildings required for their operations.

SES has been designed to avoid the pitfalls of growing too quickly. Rather than putting up lesser structures that only meet immediate needs, the company says it strives to be at the forefront of trends and facility builds, ensuring that its buildings will continue to serve well for the long haul.

“By today’s standards, the buildings we’re designing are of world-class caliber in Canada and the U.S.” says Mike Miller, Vice-president of Construction for SES. This was the mindset at work when determining how to proceed with the company’s new frac sand distribution facility in Wembley.”

The purpose of the building was to www.canadianminingjournal.com

A large-format sand storage facility constructed from fabric over a steel frame.

A dramatic view showing a conveyor system designed to handle vast amounts of frac sand.

provide large format sand storage for the area’s oil and gas industry. In fact, upon completion, it became the largest facility for this purpose in the Western Canada Sedimentary Basin.

The facility is capable of receiving several unit trains on a monthly basis, with each train usually carrying more than 10,000 tons of material. By contrast, Miller noted that most trans-load distribution centres in the area provide about 2,000 tons for an oil or gas frac.

“We have a ‘tank farm’ utilizing 300-ton tanks about 25 kilometers away that was constructed as a trans-load storage facility for many suppliers,” says Miller. “However, as drillers have been needing to facilitate larger frac silos, tank trans-loads do not have the operational capacity to fill those needs. The large-format facility in Wembley is designed to solve any supply issues.”

February/March 2015 • Canadian Mining Journal |

35

| New Technology

A clear span provides ample room for storing sand and for equipment to move around without any obstructions.

In keeping with its philosophy of advancing its construction methods and facilities to a higher level, while still taking into account the timeline that would be required to engineer and construct a new building, SES focused its search on tension fabric building contractors. After reviewing and comparing specifications, materials and costs from a handful of manufacturers, the company selected Legacy Building Solutions of South Haven, Minnesota, for the project.

“Legacy offered several features that put them at the top of the list,” says Miller. “We were very impressed by their engineering team. They are unique among fabric buildings in that they build on a rigid-steel frame. Everything looked good, from the eave and ridge ventilation system to the

method for installing fabric panels.

Combined with material delivery times and the time to construct, Legacy seemed like the perfect choice for our application.”

In the design phase, SES worked to define exact needs in order to narrow the parameters of the facility. One key goal was to house all workers and operations inside the building, protected from the constantly gusting winds of the Alberta prairie. This type of initiative could have resulted in a massive structure exceeding the scope of what was truly needed, but SES and Legacy worked together closely to come up with the appropriate heights and lengths, as well as multiple lean-to areas.

The outcome was a building designed to allow the full use of its storage volume of almost three million cubic feet. The

Interior view showing massive structural beams and a walkway and cable trays.

36 | Canadian Mining Journal • February/March 2015

main body of the fabric structure measures 140 by 480 feet, with three lean-to sections measuring 60 by 40, 60 by 80 and 24 by 200 feet, respectively – adding up to a total of 79,200 square feet. An offset peak and varying leg heights further characterize a building that is fully customized for the specific facility SES envisioned.

“We have a drive aisle that connects the entire building at its core and allows us access to our stock piles,” said Miller. “We utilize two of the lean-to spaces to load our feed hoppers, and the other lean-to is a heated shop that has lined walls and is equipped with infrared heating units. We have 18- by 18-foot access doors big enough for loaders and skid steers to enter. The whole design is very efficient for our operations.”

The rigid frame design of the Legacy building proved beneficial as SES implemented plans for a conveyor that would be suspended from the rafters and run the length of the building. After performing a structural analysis and determining load requirements, the structural design was easily modified to accommodate the conveyor system.

“Flexibility is key, especially when the building is a ‘first of its kind’ for this industry,” says Miller. “We had one design change after the whole plan was in place, to widen our trapeze in the structure that supports the conveyor, and Legacy was able to make that change without any problem. The conveyor system fits and www.canadianminingjournal.com

operates just as it was designed.”

According to Miller, SES is always looking to design facilities that use natural sunlight, which made Legacy’s 15-ounce, fire-rated polyethylene roof – which allows abundant daylight to permeate the structure – a perfect solution for the new facility.

“In far northern Alberta in the summer, the sun stays high for long period of time, so we take full advantage of any light we can get,” says Miller. “We believe naturally lit areas are good for worker morale, since they feel more connected to the outside environment. And, of course, it also saves on our facility operating cost, since the fabric allows us to work with the internal lighting systems off, even on cloudy days.”

The facility in Wembley officially opened on schedule last summer, despite a rough Canadian winter that set SES’s concrete contractor behind more than a month on installing the building’s foundation.

“Legacy knew our schedule and saved us over 30 days of downtime,” says Miller.

Fabric panels also allow natural light to penetrate the storage facility.

“They stood the frames for the entire structure in a single day, and everything – conveyors, electrical, fabric – was completed within five weeks of them coming to the site. It was a Herculean effort on Legacy’s part. It was fantastic.”

As part of its continued growth to support fracking operations and other exploration activity, SES is working toward several other new facilities in the near future, and Legacy figures to be a part of the picture. CMJ

February/March 2015 • Canadian Mining Journal |

37

| Company Profile – Atlas Copco

SITE

SERVICE WELL-TRAINED TECHNICIANS ARE THE KEY

By Russell Noble

One of Atlas Copco’s technicians works on one of the many components that are brought into the Barrie shop for repair or refurbishing.

38 | Canadian Mining Journal • February/March 2015

www.canadianminingjournal.com

S

ervice what you sell is almost mandatory for most of today’s equipment manufacturers and that’s especially true for the companies that actually make the machines and attachments designed for the mining industry.

From the smallest of drills and handheld tools to the monster trucks, shovels and other movers and crushers of heavy ore, the products used in today’s mines and quarries place a heavy demand for performance on equipment manufacturers.

In fact, never before has productivity and equipment reliability had such an impact on the bottom line.

One company that knows the importance of machines performing when expected is Atlas Copco, manufacturers of rock drills and bits, plus a full range of compressors, generators and pumps designed for everything from hand tools to massive units capable of powering mining camps or even small towns.

Since it was founded more than 142 years ago, the company has grown from a small garage in Stockholm, Sweden, to now an internationally known operation with more than 40,000 employees in 186 countries.

Being close to their global customers is what sets Atlas Copco apart from the rest and as Kelly Johnson, Service Supervisor and Coordinator, Mississauga, Ontario says: “Servicing what we sell, and with a smile, makes our customers feel comfortable in knowing that most of their problems will be solved with a simple phone call.”

With service centres scattered across Canada, the company is continually expanding its visibility in communities where mining and aggregate production are key to the local economy.

And one of the company’s more recent expansions went beyond its conventional mining and aggregate customers to include supporting the rental market where Atlas Copco also supplies a full line of air compressors and generators and its own technicians to provide critical, responsive support through a mobile fleet of fully equipped service vehicles.

From relatively easy coupling changes and refurbishments, to larger clutch

A fully equipped service truck is outfitted with just about every device needed to handle field work,

replacements and entire engine replacements, the company’s service vehicles are outfitted with cranes and hoists designed to provide on-site repairs without the need of taking the piece of equipment from the work site.

Johnson says that Atlas Copco’s Barrie, Ontario location is a perfect example of both the shop and mobile services the company provides to the rental market.

From its 100,000-square-foot facility adjacent to Highway 400, technicians can easily be dispatched to the major rental

and mining customers in Southern Ontario to either service the rental equipment or bring it back to Barrie for more extensive repairs.

Johnson says as Atlas Copco has expanded its service offerings, it has kept the end goal in sight: be as close to as many customers as possible to provide service to all within a day’s drive.

As mentioned earlier, the fleet of service trucks and technicians can handle most site repairs but equally equipped is the shop where technicians work in a spotless envi-

February/March 2015 • Canadian Mining Journal |

39

| Company Profile – Atlas Copco

All tools on the service trucks are also cleaned and placed in their right compartments.

All field service trucks are washed after every call.

ronment equipped with individual workstations specifically designed with parts and special tools for the rental equipment.

Again, Kelly Johnson says, it’s the skill of the technicians at Atlas Copco that separates its service centres from other, run-ofthe-mill outlets that offer little more than routine service and maintenance.

Every technician at the Barrie location

goes through approximately 80 hours of training per year and are supported by factory-trained Atlas Copco engineers to help should they run into particularly challenging or unfamiliar projects.

“Major repairs often required specialized knowledge to complete and our Barrie location is staffed with technicians capable of repairing or refurbishing

Field work often involves dealing with the elements, including frigid

winter conditions.

machines and return them to the customer with the least amount of delay as possible,” says Johnson.

He adds: “When repair isn’t enough, our service centre can often refurbish equipment, such as compressors, generators, hydraulic attachments and road equipment, to extend their life and reduce total cost of ownership. In fact, when it’s possible, refurbishment costs much less than buying a new piece of equipment and the end result is a machine that looks nearly new, operates optimally, and is extremely reliable.

“For example, when a piece of equipment is in the refurbishment “sweet spot” (between four and six years old) it will have depreciated down to 20 per cent of its original value. A refurbishment can bring that equipment’s value back to 80 per cent of its original price. That means the owner gets more value and utilization out of their old equipment.”

And what every equipment owner wants to hear: “We back-up the refurbished equipment with three- to five-year warranties that are comparable to what the company offers on new equipments,” says Johnson.

CMJ

40 | Canadian Mining Journal • February/March 2015 www.canadianminingjournal.com

Focused

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| Products Tire Handler

Iowa Mold Tooling Co. Inc. (IMT), an Oshkosh Corporation company is pleased to announce that IMT TireHand tire manipulators are featured on a new series of heavy-duty Hyster Company tire handling trucks. The new line of Hyster tire handlers includes 14 models with IMT TireHand tire manipulators. Eight IMT TireHand-equipped units are integral configurations ranging from 5,000 to 36,000 pounds of capacity for dedicated tire handling. The other six have hang-on quick connect IMT TireHand attachments for flexible transition between tire handling and forklift modes.

Safety Devices

Juniper Systems’ Archer 2 Hazloc hand-held devices are designed to perform safely in hazardous locations where flammable gases, liquids, vapours, dusts, or fibers may be present. Hand-helds are important to industries where workers regularly face environments that may contain flammable substances. The devices meet the safety regulations as required for Class I, II, and III hazardous locations.

Larger Scraper

ICON Industries introduces its AG-13 high-capacity scraper featuring a front gate and eject wall finished in dirt-resisting epoxy to maintain efficiency in the stickiest of soils. Meanwhile, the double-wall frame sidewall design increases overall strength and rigidity, while protecting hydraulics. The AG-13 features a frame engineered around 80,000- and 100,000-tensile-strength steel for maximum durability and reliability and it utilizes a front dolly that not only improves manoeuvrability via 50 degrees of horizontal movement and 70 degrees of lateral movement, but helps support the load, allowing the use of an average-sized tractor. At the same time, the unique design of the dolly allows about six percent of the scraper weight to be transferred to the drawbar for extra traction when loading. Finally, the dolly provides extra lift on the front of the bowl to provide a full 22 inches of ground clearance during transport.

42 | Canadian Mining Journal • February/March 2015

Thread Sealant

Oz Seals now provides miners with its new PTFE tape designed for sealing all hydraulic fluids, water, gas and steam leaks. Called Oz Pack 100 Gold, this tape is an absolutely leak-free, reliable solution for sealing gas pipe lines. Having 10-times the thickness of conventional PTFE tape means it needs only two wraps to seal. This 100% pure PTFE tape boasts hightensile strength and is non-hardening, making it the safer solution. It has three unique properties that make it an essential repairman’s tool: a high density of 100% pure PTFE, easy to apply and chemically inert.

www.canadianminingjournal.com

Connectors

HARTING North America announces the availability of its new Han® HMC rectangular connector designed to deliver consistently reliable performance through 10,000 mating cycles or more. Optimized for signal and power, the connector is designed for applications in environments where devices and machines are often disconnected and reconnected several times a day. For measurement and testing systems, each test step may entail one mating cycle.

The connectors are specially enhanced versions of the Han® industrial connectors, so any device or machine that can use a Han® connector can switch to the same size Han® HMC without modification. The complete Han® HMC series consists of Han® B HMC housings (sizes 10, 16 and 24), inserts with crimp connections, gold-coated crimp contacts with constant spring force, a choice of different docking frames, as well as Han-Modular® modules that have Han® HMC crimp contacts. All Han® HMC inserts contain high performance grounding contacts. These special properties assure the complete connector’s flawless performance, even beyond 10,000 mating cycles.

Mining Applications

Sensoray’s Model 2253P A/V Codec with GPS Receiver and Incremental Encoder Interfaces is now available for pipeline inspection, mining, robotics and more. In addition, all operating power is supplied by a single USB port, giving the device the necessary flexibility for these applications. The device can simultaneously encode, decode and preview A/V content and is housed in a rugged, compact exterior. Independent video processors allow for two different video streams to be produced simultaneously from a single composite input. One of the streams can remain uncompressed so as to be useful for real time previewing, or both streams may be compressed.

In addition, image transformations such as resolution, rotation and mirroring are independently configurable for each stream, as are compression type and bit rate.

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Impact Wrench

Chicago Pneumatic has just launched its new CP6135-D80 1-1/2” industrial impact wrench for use in mining and minerals processing and other heavy industries. The new tool has the highest power-to-weight ratio for its class of 167.1 ft-lbs / lbs [500Nm/kg] and provides a high maximum torque of 5,900ft-lbs [8,000Nm] for only 35.3lbs [16 Kg], and a high impact rate of 760 BPM. As a result, it meets virtually any super industrial bolting and unbolting need in heavy industry, helping maintenance engineers minimize downtime and therefore enabling companies to save associated costs. The wrench features a Rocking Dog clutch mechanism which is encapsulated with grease for constant lubrication, and its plain steel motor parts. The impact wrench also has a steel clutch housing and aluminum body.

A good investment is not determined by the price, but by the cost of ownership. That’s why we make pumps designed for the things that really matter: long operating time, less need for supervision and low costs for maintenance and spare parts.

Because quality pays in the long run.

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February/March 2015 • Canadian Mining Journal |

43

| Products

Equipment Upgrades

Atlas Copco has just upgraded and reintroduced its Dynapac compaction equipment line. On the F1000 series paver, for example, the low-profile deck and two, swing-out operator platforms give the operator the best visibility around the machine, and the controls feature systemgrouped switches that minimize operator fatigue during long work shifts. The new soil rollers, including the CA1300 and CA1500, have improved gradability, which allows operators to comfortably travel backwards and forwards up steep inclines.

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Motion Industries, a leading distributor of industrial maintenance, repair, and operation (MRO) replacement parts, is pleased to announce the newest Tom’s Toolbox video short, focusing on fall protection. Tom’s Toolbox videos are available for viewing on Motion Industries’ “https://www.youtube.com/ user/MIHow2”MiHow2 YouTube channel, which was established in 2012. In this video, https://www.youtube.com/watch?v=qHz4XML7gs”How to Properly Put on a Miller Air Core Harness from Honeywell,” Tom teaches the viewer the correct way to put on a safety harness. The video can now be viewed on the MiHow2 channel, under the Tom’s Toolbox heading. Tom’s Toolbox embodies the “how-to” format but in shorter time snippets. In the series, the humorous and always knowledgeable host Tom Clark demonstrates a broad range of solutions designed to save viewers money and time, and/or keep safe on the job. Each Tom’s Toolbox video short is filmed in a workshop setting or an appropriate off-site setting.

www.canadianminingjournal.com

Hose Couplings

Kurt Hydraulics is pleased to introduce its Push-On Hose and Push-Loc Hose Couplings for low pressure applications. The couplings have a very strong coupling retention thanks to a specially designed spiral polyester material inside the hose that locks onto the fitting. The tight grip remains constant under pressure up to 250 psi for leak-free operation. Flexible and versatile for a wide range of low pressure installations, the hose operates in temperature ranges from -20°F to +180°F (-29°C to +82°C).

Drill Rig Simulators

ThoroughTec Simulation announces the availability of its CYBERMINE simulators. With mine site safety and productivity being of paramount importance, these training simulators are vital tools in ensuring that operators know exactly how to operate a rig safely and efficiently without the mine having to take an actual rig out of production for too long. ThoroughTec has developed a significant number of simulator cabs. This includes five different models from three different OEMs: Atlas Copco, CAT and Sandvik. ThoroughTec’s range encompasses all aspects of both surface and underground mining operations for hard and soft rock and is capable of replicating a mine’s entire working fleet from load and haul through to the most complex production and ancillary equipment.

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info@denisonenvironmental.com February/March 2015 • Canadian Mining Journal |

45

In My Mine(d)

New Transparency Act puts pressure on Extractive Sector Andrew Godfrey is an associate in Norton Rose Fulbright’s Ottawa office.

By Andrew Godfrey

T

he Federal government recently tabled its newly developed Extractive Sector Transparency Measures Act (the Act), which requires that companies involved in the commercial development of oil, gas and minerals publicly disclose payments that they make to foreign and domestic government entities.

While the Act was only introduced in the House of Commons late last year, the Canadian government has committed to bring this piece of legislation into force by April 1, 2015.

Development of the Act The Act is part of a larger international movement towards increased disclosure by companies involved in the extractive industry. Similar legislation has already been passed in the European Union (the EU) and the United States, with both working through the implementation process.

In 2013, the EU approved its Transparency and Accounting Directives (the Directives) which seek to impose mandatory reporting requirements on oil, gas, mining and forestry companies. While countries belonging to the EU have until this year to incorporate the Directives into their national legislative frameworks, certain EU members, such as the United Kingdom, France and Germany, have already enacted draft legislation, with the United Kingdom tabling mandatory disclosure legislation in October, 2014.

The American Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) similarly requires that “resource extraction issuers” generate annual reports outlining the payments that they have made to domestic and foreign governments in relation to the commercial development of oil, natural gas, and minerals.

The American Securities and Exchange Commission (the SEC) is charged with creating rules to implement these disclosure requirements. While, the SEC’s initial attempt to mandate disclosure pursuant to the Act was vacated by the United States District Court for the District of Columbia on July 2, 2013, the SEC is expected to release new rules pursuant to the Dodd-Frank Act in March 2015.

Canada’s new Act was generated in the context of these international influences, and through stakeholder consultations that have taken place over the past year. The government has indicated that it intends to keep Canadian legislative requirements aligned with those of the United States and the EU. 46 | Canadian Mining Journal • February/March 2015

Norton Rose Fulbright LLP provided legal updates in June 2013 and January 2014 summarizing the Resource Revenue Transparency Working Group’s (the Working Group) recommendations for Canada’s new disclosure requirements, which were considered by the government in the creation of this new legislation.

Who must disclose?

The Act applies to a range of companies involved in the exploration and extraction of oil, gas and minerals, as well as to companies acquiring or holding rights to these resources. The Act will impose annual reporting obligations on companies that: 1. are listed on a stock exchange in Canada; 2. have a place of business in Canada, do business in Canada or have assets in Canada and that, based on their consolidated financial statements, meet at least two of the following conditions for at least one of their two most recent financial years: • they have at least $20 million in assets; • they have generated at least $40 million in revenue; and/or • they employ an average of at least 250 employees; and 3. a ny other prescribed entities.

These companies’ subsidiaries, and entities falling under their direct or indirect control will also be subject to the Act. Section 23(c) of the Act allows the Governor in Council to define the meaning of “control” by regulation.

What must be disclosed?

When the Act comes into force, the companies who fit the criteria outlined here will be obligated to publicly report the payments they make to all levels of domestic and foreign governments. They will also be required to disclose payments made to bodies established by two or more governments, and entities that have been established to exercise government functions, such as trusts, boards, commissions, or corporations. However, payments made to Aboriginal governments in Canada will not be subject to the Act until two years after the legislation comes into effect.

The Canadian government has specifically outlined certain categories of payments that must be publicly disclosed. These payment categories include: www.canadianminingjournal.com

In My Mine(d)

• taxes, other than consumption taxes and personal income taxes; • royalties; • fees, including rental fees, entry fees, regulatory charges as well as fees or other considerations for licenses, permits or concessions; • production entitlements; • bonuses, including signature, discovery and production bonuses; • dividends other than dividends paid as ordinary shareholders; • infrastructure improvement payments; and • any other prescribed category of payment.

gated pursuant to the Act to clarify whether disclosure will be required at the project level.

The Act currently states that absent any specific threshold prescribed by regulation, companies will only be required to disclose single or cumulative payments amounting to $100,000 or more. This threshold mirrors the EU Directives threshold of €100,000. The Act stipulates that companies must disclose the payments they make to government entities, regardless whether they are monetary or in kind.

While the Act does not currently include project-level payments in its mandatory reporting regime, section 9(5) does provide that project-level disclosure, under the form and manner of reporting, may be required by the Minister. We expect an administrative guidance document and the regulations promul-

Exemptions Throughout the consultation process, stakeholders raised concerns that Canada’s new disclosure obligations could conflict with another jurisdiction’s privacy or confidentiality requirements. Although the Act does not currently list any exceptions to its mandatory reporting requirements, the Act does allow for future exemptions to be added by regulation.

As noted above, the United States District Court for the District of Columbia vacated the SEC’s initial rules made pursuant to the Dodd-Frank Act in part because the SEC’s decision to deny exemptions to the American disclosure requirements was “arbitrary and capricious”.

What information will be made public?

The Act currently requires that its annual disclosure reports be made available to the public; however it does not specifically stipulate how or what information will be publicized. The Act provides that these details will be determined through regulations enacted by the Minister and Governor in Council. We also understand an administrative guidance document will be released by the Minister outlining many of the procedural requirements.

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February/March 2015 • Canadian Mining Journal |

47

In My Mine(d)

Will any other reporting regimes be considered equivalent?

Canada is one of several jurisdictions currently enacting legislation requiring disclosure by companies involved in the extractive industry. Section 10 of the Act allows the Minister to determine if another jurisdiction’s reporting requirements are an appropriate substitute for those mandated by the Act. This equivalency mechanism will minimize the administrative costs associated with the Act’s reporting requirements. Companies operating in multiple markets will be able to substitute one jurisdiction’s public disclosure requirements for another, instead of generating entirely different reports for each jurisdiction in which they operate.

How will the Act be enforced?

The Minister has broad investigative powers that he or she may exercise to ensure compliance with the Act. For example, once it is in force, the Act will allow the Minister to order audits of company reports and to conduct inspections of company offices.

The Act also allows the Minister to issue corrective orders to ensure that companies subject to the Act are taking steps to comply with its provisions. The Act will also impose fines of up to $250,000 on companies who fail to adhere to its reporting requirements, knowingly make false or misleading statements in their disclosure reports, or who structure their payments with the intention of avoiding disclosure under the Act.

Although the fines that may be imposed pursuant to this Act are less than those that may be imposed by other federal legislation, it is still important to note that this fine may be imposed per day that the offence is committed or continued.

As companies could be charged with multiple offences arising out of a single event that continues over the course of multiple days, the Act may result in cumulative fines amounting to more than $250,000.

When will the Act come into force?

The federal government has indicated that the Act will be considered by Parliament this winter and that its regulations will be developed in early 2015. The government plans to have this new legislation in force by April 1, 2015, with companies first issuing reports for the financial year following its enactment.

As the Act requires that companies submit their reports no later than 150 days after the end of their financial year, companies with fiscal years beginning in May 2015 may be required to generate their first reports by the year 2016.

The Canadian reporting template is expected to mirror that of the United Kingdom, which will likely be released in the coming weeks. We will continue to monitor both the Act’s progression through Parliament and the availability of draft templates in order to provide updates regarding the status of these new reporting requirements.

CMJ

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February/March 2015 • Canadian Mining Journal |

49

Unearthing Trends

Mining the right people: labour is a precious commodity

By Bruce Sprague

S

ince the early 2000s, productivity in the mining sector has declined significantly as companies focused on growth amid strong commodity prices.

These days, world metal prices have dropped and companies are focused on returning to productivity. When it comes to labour, cost-cutting exercises have led to headcount reductions creating the perception that the skills shortage of the boom era is over. But in reality, we’ve moved from a war for supply to the beginning of a war for talent – and companies must view labour as an important asset, rather than another cost. A singular focus on adjusting labour needs to the commodity price cycle will leave companies exposed to clear risks.

In Canada, a recent Mining Industry Human Resources Council report shows retirement to be the most significant contributor to the Canadian mining sector’s future hiring needs. Canadian mining

employers indicated that roughly 20% of their workforce was eligible to retire in the next three to five years and 6% of workers were currently eligible to retire. As noted in a new EY mining and metals report about productivity in labour, these retirements impact operational continuity and lead to a great loss of organizational know-how and operational experience for mining companies.

On top of that, today, the best people can cherry pick the top roles in a global marketplace. And the war for talent isn’t just between mining companies; it’s against other sectors as well. As wise, senior and experienced people retire or leave the industry for other opportunities, mining companies must make sure talent management and productivity programs work together.

Using semi-skilled people for skilled roles isn’t productive, and it’s not sustain-

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50 | Canadian Mining Journal • February/March 2015

Bruce Sprague is a Partner and EY’s Canadian Mining & Metals Leader. He is based in Vancouver.

able. As they deal with high turnover and an aging workforce, companies can’t underestimate the gap in skills and knowledge that needs to lead them through this period of turbulence. To effectively retain senior people, while at the same time attract and grow new talent for the skills of the future (and the next upturn), companies must optimize their inventory of skills for their most valuable projects, and implement sustainable people programs.

People with new skills and ways of thinking will continue to be important to adapt to changing needs, but retaining experienced people with deep knowledge of the mine and the sector – those who have “seen it all before” – is just as critical.

Effective retention strategies for senior talent might include secure flexible working arrangements, productivity-based performance incentives or personalized support to transition to retirement.

Meanwhile, things like formal mentoring and coaching can appeal to both new and experienced talent, while at the same time promoting intergenerational transfer of corporate and specialist knowledge.

Coupled with these strategies, companies must maintain a focus on breaking down their silo mentality. Encouraging greater collaboration around problemsolving, innovation and performance improvement is not only an excellent retention strategy, it’s critical to improving productivity.

Today, labour really is a precious and valuable commodity. Strong talent management programs that focus on retaining the right people for today’s challenges will be as critical to the future success of mining companies as investment in exploration.

CMJ www.canadianminingjournal.com

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