Canadian Mining Journal April 2017

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April 2017

aggregate

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CANADIAN Mining Journal

APRIL 2017 VOL. 138, NO. 03

www.canadianminingjournal.com

FEATURES 10 PDAC 2017

Optimism returns to the world’s biggest mining convention.

QUARRIES AND AGGREGATES 12 We look at the challenges, trends and potential of mining’s sister industry, aggregates.

16 St Marys Cement in Bowmanville, Ont., gives CMJ a tour

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of its facilities, which have been supplying the Greater Toronto Area with building materials for nearly 50 years.

20 Newfoundland gold miner adds income by selling waste rock as aggregate.

MATERIAL HANDLING 24 An investment in portable vibrating screens can boost productivity in quarries.

27 How the mining sector could lower costs by adopting in-pit

crushing and conveying methods from the aggregate industry.

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DEPARTMENTS 5 EDITORIAL | An introduction to CMJ’s new editor Alisha Hiyate.

6 IN MY MINE(D) | Guest columnist Monica Ospina, director of O trade, discusses the importance of investing in community relations early on in exploration.

8 UNEARTHING TRENDS | EY’s mining and metals transaction leader for B.C., Michelle Grant, looks at how miners can prepare for a predicted uptick in M&A activity this year.

29 FIRST NATIONS | Wahnapitae First Nation in Ontario is having success with its strategy to connect the community and the mining industry, reports the Chiefs of Ontario.

32 CSR & MINING | Michael Torrance, a lawyer with Norton Rose Fulbright highlights the mounting human rights risks for Canadian miners operating abroad.

33 LAW | Simon Foxcroft, a partner at Bennett Jones in Edmonton, examines employer liability in workplace accidents.

24 ABOUT THE COVER

This month’s cover provided by BME.

Coming in May Canadian Mining Journal looks at mine automation and safety, plus a feature report on pumps and water management.

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

APRIL 2017

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CANADIAN Mining Journal

FROM THE EDITOR

April 2017 Vol. 138 — No. 3

38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5 Tel. (416) 510-6789 Fax (416) 510-5138 www.canadianminingjournal.com Editor-in-chief Alisha Hiyate 416-510-6742 ahiyate@canadianminingjournal.com Twitter: @Cdn_Mining_Jrnl Production Manager Jessica Jubb jjubb@glacierbizinfo.com Circulation Manager Cindi Holder 416-510-6789, ext. 43544 cholder@glacierbizinfo.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Toll Free Canada & U.S.A.: 1-888-502-3456 ext 2 or 43734 Group Publisher Anthony Vaccaro

Established 1882

Canadian Mining Journal provides articles and information of practical use to those who work in the technical,

administrative and supervisory aspects of exploration, mining and processing in the Canadian mineral exploration and mining industry. Canadian Mining Journal (ISSN 0008-4492) is published 10 times a year

by BIG L.P. Mining. BIG is located at 38 Lesmill Rd., Unit 2. Toronto, ON, M3B 2T5.

Phone (416) 510-6891.

Legal deposit: National Library, Ottawa. Printed in Canada.

All rights reserved. The contents of this magazine are protected by copyright and may be used only for your personal non-commercial purposes. All other rights are reserved and commercial use is prohibited. To make use of any of this material you must first obtain the permission of the owner of the copyright. For further information please contact Robert Seagraves at 416-510-6891.

Subscriptions – Canada: $51.95 per year; $81.50 for two years. USA: US$64.95 per year. Foreign: US$77.95 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: 1-888-502-3456 ext 2; Fax: 416-447-7658; E-mail: cholder@glacierbizinfo.com 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.

An industry on the cusp Alisha Hiyate

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tarting something new can be both exhilarating and scary, but I’m pleased to say that as the new editor of Canadian Mining Journal, all I feel right now is enthusiasm.

Part of that is because I feel ready to grow into this new, challenging role. But it’s also exciting because of recent changes in the mining industry.

For the past 11 years, I worked at CMJ’s sister publication, The Northern Miner (incidentally, sometimes at the desk right next to the editor of CMJ). I edited several publications while at the Miner, visited exploration projects and mines in Canada and abroad, met and interviewed colourful personalities and accomplished professionals (sometimes both in one package), and covered stories ranging from exploration results to new mining technology, government expropriations of projects and First Nations relations.

During that time, I also witnessed the supercycle-stoked buildup of commodity prices, the junior mining bubble, and the M&A frenzy among the majors that resulted in mounting debt, and then writedowns.

Then came the downturn of the last five years. The retrenchment of the past few years has been painful, but there was a positive side to the bust: It forced the sector to do some hard thinking.

Finally, because of the prolonged slump, the slide of commodity prices, and social and environmental pressures all coming to bear at once, the sector as a whole is seriously thinking about innovation. A new openness to doing things differently has begun to take hold. As a result, it feels like mining is on the cusp of answering some big, fundamental questions that have been a long time coming around social licence, environmental sustainability, new technology, and the industry’s fundamental business model.

Of course, it’s an open question whether innovation can truly become the mining sector’s mantra, especially now that it seems we are finally beginning a recovery in the sector.

Nonetheless, it’s exciting to take over CMJ at such a time, and I truly believe we’ll be covering some fascinating and transformative developments in the industry in future issues.

For now, I owe a special acknowledgement and thank you to Interim Editor Marilyn Scales (now news editor), who has been very generous with her time and knowledge acclimatizing me to my new role.

Lastly, I’d like to invite CMJ readers to get in touch with me via email at ahiyate@ canadianminingjournal.com or via Twitter at @CdnMiningJrnl. Let me know what you’d like to see in the magazine and I’ll do my best to make it happen.

Or if you’re at the CIM convention Apr. 30-May 3, come by booth 1220 and say hello. I would love to meet you in person.

CMJ ERRATA: The Geological Survey of Canada was created in 1842, as more than one

sharp-eyed reader pointed out. The date was erroneously given as 1877 in the February 2017 print issue.

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IN MY MINE(D)

Early stakeholder engagement equals exploration success

By Monica Ospina

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and access, access to capital, and local support are key elements to ensure successful exploration projects. But why are socioeconomics becoming so important when the goal is to find minerals?

Regardless of the nature of their interests, investors, communities and local governments agree that having longterm, sustainable projects is a prospect no one wants to miss.

This common ground is an opportunity for mineral exploration companies. But how do we secure long-term sustainability? The answer is simple – a good governance framework and professional risk management.

Companies aware of the importance of managing social risk find early stakeholder engagement provides a means of assessing the social landscape, social risk and impacts of a project through open dialogue with stakeholders. This assessment becomes the pillar for planning and successful execution of social management.

In reality, mineral exploration companies haven’t embraced planning around social risk. Small companies in this sector find it difficult to budget social management and, even worse, they don’t know what this means in terms of resources, processes and results.

The reader might be familiar with this: “As part of our team we hired a local person responsible for CSR. This person is great because she/he knows everybody in the community and has done or can do projects with the school and church.” For some, this might sound right as it is cost effective and makes them believe that this is the magic formula to obtain a social licence to operate.

Unfortunately, managing social risk and planning for land access takes more than this.

I have met many of these local professionals. They are good individuals who are enthusiastic about the job and do their very best to maintain good relations between the company and the community. But in many cases they lack a social management plan and budget, not to mention knowledge of conflict resolution and global CSR standards. In some cases, they even face personal threats because they don’t know how to address key issues for the community. In extreme cases, they are labelled as traitors, for acting in favour of the company and ignoring their own people. Why does the industry do this? Because hiring one local professional seems cost effective as well as efficient, since this individual knows everybody.

There is an underlying misunderstanding – the fact that mining companies see social issues as soft and believe that anyone can handle such issues. Here we find companies not

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having a strategic plan on how to approach land access. They lack collaboration between geologists, mine engineers and social professionals to define strategies. Nor do they understand the social landscape. Even worse, they haven’t defined their social area of influence and social impact. As a socio-economist, I find it difficult to understand how one of the oldest industries in the world can make big plans about mineral deposits without having land access. Companies invest in calculations around technical and financial estimates, but they fail to invest in understanding the social landscape and they ignore planning for land access.

My question is: What is the purpose of having a valuable mineral asset if local communities won’t welcome you as new neighbour, leading to conflict? This is a breaking point for an industry that can mine for opportunities above and below ground.

Today shareholders, investors, governments and civil society are paying more attention to good management practices than the mineral deposit. This justifies why to invest here and not there. Projects that can guarantee sustainability and long-term opportunity are well planned and ready for execution. Social management is key to supporting efforts made by technical exploration teams. Early stakeholder engagement combined with technical exploration draws a fuller picture around a mineral deposit, above and below ground, allows for realistic timelines and budgets, consideration of social issues and mitigation of risks. As a result, management proves to be able to handle technical and non-technical challenges.

On the other side, communities and local governments involved in early stakeholder engagement become more open to support mineral extraction projects as they are part of assessing the potential. These early discussions with local stakeholders open avenues for future collaboration and speed the process to obtain land access. Both are important when measuring efficiencies in finance, mineral exploration, and long-term project stability.

As a result of all these efforts, the picture becomes clear – early stakeholder engagement allows the industry to anticipate social conditions above ground and early exploration offers potential underground. Does it sound good to you? Because it CMJ does to me.

MONICA OSPINA is the director of O Trade, a socioeconomic development firm that works with industries and communities across the globe.

She can be reached at Monica@Otrade.ca.

WWW.CANADIANMININGJOURNAL.COM

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UNEARTHING TRENDS

With a brighter end to 2016, 2017 is full of potential

By Michelle Grant

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acroeconomic factors weighed heavily on the commodities markets in 2016, creating much of the volatility that continued to pose a challenge for mining companies and the transaction environment. In the face of these challenges, we still saw many transactions close in 2016 and we expect the upward trend to continue in 2017. Based on an analysis of last year’s trends, EY’s recent report on global M&A (Mergers, acquisitions and capital raising in mining and metals – 2016 trends, 2017 outlook) predicts a cautious return to deal making and capital raising this year – welcome news for this industry.

2016 mining M&A trends Let’s look at last year’s numbers. Canadian deal volume rose 16% last year, to 153 deals from 132. Deal value, on the other hand, essentially stayed the same, declining by 1% to just over US$6 billion in 2016. More interestingly, there was only one deal in 2016 that was valued at over US$1 billion, and several deals that were greater than or equal to US$500 million. These numbers underscore how difficult it was to get deals done in a challenging macroeconomic environment and illustrate a shift away from the mega deals we saw during the last cycle. This year we expect to see a higher volume of deals but similar values. In other words, we’ll see smaller deals, but more of them.

Gold continued to rule the commodity space last year – nine out of Canada’s top ten deals were in gold. We also know that Canadian mining companies were looking to diversify their portfolios. Half of all deals last year were done to diversify either geographically or from a commodities perspective. And most deals were business acquisitions or combinations, instead of the pre8|

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dicted divestment boom. Only one out of the top 10 deals in Canada was a divestment last year.

Increase in transactions If commodity prices continue to consolidate in 2017 as has been predicted, they will improve the sector outlook and strengthen investor confidence. As a result, there will be more and better options for access to capital and mining companies will start looking to invest in long-term capital expenditure projects again.

With higher confidence and more activity, transaction volume will increase as the valuation gap between buyers and sellers will close. Companies that strengthened their balance sheets may consider strategic acquisitions to bolster their portfolios. Mid-tier companies may opt to consolidate, in an effort to become major players in their respective commodities at the peak of the next cycle.

The only exception could be the Chinese domestic producers, where large-scale consolidation could happen this year.

Despite the renewed optimism, we expect investors to be cautious, shying away from mega deals in favour of smaller transactions.

What’s a miner to do?

Mining companies need to optimize their capital structure and regularly evaluate their portfolio of assets to facilitate better capital allocation decisions.

Securing the proper form of financing for existing projects and for acquisitions will be critical to their long-term health and success.

As debt and equity markets rally, companies will need to think about how to best combine traditional financing options with some of the alternatives that have gained traction over the past few years. The right capital structure will help companies execute successful projects and fund growth opportunities.

Having the right portfolio of assets is a critical success factor. Mining companies need to perform rigorous and regular portfolio reviews to ensure that assets continue to align with the overall strategy of the organization and to allow for proper capital allocation decisions. Adopting a best in class portfolio review strategy is one way for mining companies to ensure they have the right CMJ asset mix to weather any storms ahead.

MICHELLE GRANT is BC Mining and Metals Transactions Leader at EY. WWW.CANADIANMININGJOURNAL.COM

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PDAC 2017

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CAUTIOUS

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idence

OPPOSITE: Shots from PDAC 2017.

Centre right: Cementation won the People’s Choice Award at the Disrupt Mining event. Steve Blackburn/ YYZEvents; Bottom Right: Amec Foster Wheeler demos Virtual Reality tech; Bottom left: The Shark Tankstyle panel at Disrupt Mining.

BELOW: North Trade Show BOTTOM:Mark Cutifani, CEO of Anglo

American at the launch of the Development Partner Institute.

CREDIT: GLENN SAKAKI

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his year’s Prospectors & Developers Association of Canada convention, held Mar. 5-8, marked a return to optimism for the mining sector, with more than 24,000 attending, up from 22,000 last year and 23,500 in 2015.

While the numbers were a far cry from peak attendance above 30,000 in 2012 and 2013, the energy and enthusiasm in the Investors’ Exchange was palpable. As one delegate said: “You’d think there was a boom on!”

But the industry is still smarting from the smack down it suffered over the last few years, as commodity prices retreated from the historic highs of the supercycle and poor capital spending decisions came back to bite.

With that sting still fresh in mind, there seemed to be an air of cautious/tempered confidence at the convention. One of the big themes of PDAC 2017 was an effort to dissect what went wrong to avoid repeating same mistakes as things get better, or as one of the technical sessions was named: “Seeking better outcomes in the next cycle.”

Other key themes of PDAC 2017 included:

Innovation All agree that innovation and bringing new ways of thinking into the industry are crucial to its future success. Some of the innovations highlighted at PDAC included the use of Big Data and artificial intelligence in mineral exploration. Another notable trend was the use of virtual/ augmented reality experiences being offered, either for training or planning purposes.

Off site, Goldcorp and Integra Mining held the Disrupt Mining event, with five mining innovators competing for $1 million in prize money.

Social Licence There was also a growing recognition that the industry has to do a lot better on the social and environmental front to earn its social licence. The need for partnership with communities and the creation of shared values with all stakeholders over just “engagement” was stressed by the Development Partner Institute and others during the CSR programming.

Reconciliation This session in the aboriginal program highlighted reconciliation as the new context for building relationships with First Nations communities, as well as the potential for the mining sector to play an important role in the process of reconciliation across the country.

Government goodies Federal Minister of Natural Resources Jim Carr announced the Mineral Exploration Tax Credit (METC), which was set to expire at the end of March, for another year.

CMJ

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Querying THE QUARRY SECTOR

By Alisha Hiyate

CMJ TAKES THE PULSE OF THE AGGREGATE INDUSTRY IN CANADA 12 |

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t’s not an exaggeration to say that the high standard of life in this country depends on the extractive sectors – including the aggregate sector.

The sector supplies the sand, gravel and crushed stone that’s used for all types of construction: roads, highways and bridges, residential housing, office buildings, and other structures.

However, the importance of the sector is largely unrecognized by much of the population.

“We continue to be challenged by the public for permitting,” says Paul Allard, executive director of the British Columbia Stone, Sand and Gravel Association (BCSGA). “We haven’t done a very good job of educating the public on the importance of the aggregate industry to promoting the good life they’re living out here in B.C.” It’s not just in B.C. that the sector is underappreciated.

A recent survey by the Ontario Stone, Sand & Gravel Association (OSSGA) showed just how unpopular quarries are as community development projects. The survey asked 1,000 Ontario residents how they felt about four different types of development projects: windmills, aggregate operations, big box retail stores, and bio-waste facilities.

As reported by industry publication Rock to Road, 52% opposed sand and gravel operations – the highest of any type of project, with urban populations more opposed than rural.

The association has rolled out a pilot “GravelFacts” marketing campaign based on the results to counter misperceptions

about the environmental impacts of pits and quarries.

A lot of the opposition to quarries centres around their unavoidable proximity to the markets where their products will be used – usually urban and suburban communities.

Being more visible than mines makes aggregate operations a target for NIMBY groups.

But the industry is stepping up its efforts not just to educate the public, but also to be a good neighbour.

The Alberta Sand & Gravel Association (ASGA), for example, encourages municipalities to collect a levy of 25¢ per tonne.

CONTINUED ON PAGE 14

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AGGREGATES INDUSTRY “We recommend the funds go into making sure that our impact on the community is mitigated and also be used as general funds to help the town develop,” says ASGA executive director John Ashton.

The association also works with members on reclamation projects, and operates a truck registry program that allows people to report gravel trucks that may not be behaving properly on the road.

Norm Cheesman, executive director of the OSSGA, notes that the aggregates sector is becoming more focused on working through issues at the municipal level.

“There is such a divergence of regulations and bylaws,” he says. “The relationships with the municipalities are really, really important.”

The OSSGA, along with the Top Aggregate Producing Municipalities of Ontario (TAPMO), is calling for an increase in aggregate levies to 54¢ per tonne. The current levy in Ontario is only 11.5¢ compared with Alberta’s 25¢ and 53¢ in Quebec.

“If we are successful in getting increases in fees, there will be more revenues for the municipalities to support their infrastructure needs,” Cheesman explains.

The two organizations are also coming together to discuss issues that are important to communities, such as hours of operation, and wear and tear on roads.

While the associations are increasingly engaged at the municipal level, they also lobby their respective provincial governments on proposed regulatory and legislative changes.

In B.C., Allard’s members have concerns about the implementation of the province’s Water Sustainability Act, which was passed in 2016. The act requires existing operations that use groundwater to wash aggregate to reapply for permits. However, not one had received permits as of mid-February, Allard said, despite applying over a year ago.

In Ontario, the OSSGA is keeping an eye on the Aggregate Resources and Mining Modernization Act, which was before committee at presstime. One of the main concerns with the act is it could give the minister the power to require further studies from existing, permitted sites, creating uncertainty around reserves and the book value of companies.

New restrictions on extracting aggregates have also been proposed under the 14 |

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Co-ordinated Provincial Plan Review, which deals with land-use planning in southern Ontario.

“Our concern is that if they go ahead with the changes as they initially proposed, we’re going to basically be sourcing aggregate from 200 miles away instead of close to market,” Cheesman says.

Potential infrastructure boost

As the economy goes, so does the aggregates sector. Where the housing, retail and commercial construction is strong and big infrastructure projects such as pipelines, mass transit extensions or upgrades, or new highways are being built, the sector is more robust.

In Canada, the market is very segmented with demand lower in the Atlantic provinces and stronger farther west, especially in British Columbia. B.C.’s strong housing market and infrastructure projects such as the $3.5 billion George Massey Tunnel replacement, are expected to keep the market buoyant. Other provinces, such as Alberta and Ontario are expecting aggregate demand to remain more or less flat this year. One thing that could have a big booster effect on the sector is government infrastructure spending, which tends to cause spikes in demand for aggregate.

The federal government has pledged to spend a total of $186.7 billion on infrastructure over 12 years, including new and existing projects.

In addition, it announced the creation of the Canada Infrastructure Bank last year.

The bank is expected to invest $35 billion – $20 billion of that new money – into infrastructure projects through loans, loan guarantees and equity stakes, and should be up and running by the end of 2017.

Some provincial governments have also promised new infrastructure spending, and while infrastructure money tends to be slow to actually be distributed and spent on projects, with provincial elections coming up this year in B.C. and next year in Ontario, the provinces could see more money flow.

Equipment Trends

Regardless of the market, aggregates producers are always trying to improve their cost per tonne.

This is driving current trends in the market, with operators looking to increase their capacity by buying just one or two pieces of new equipment says Sandvik’s Daoust.

“More and more now customers want to optimize their plants,” he says. “They’re looking for very high-production crushers so they can just do a quick modification of their existing plant, remove the existing crushers and add newer technology crushers – high performance, higher power and of course more capacity and more reduction.”

The other driving factor is that regulations for aggregate specifications have become more stringent over the years, making it harder to produce high-quality aggregate with older technology, says Stephen Dobbler, Sandvik’s product manager for crushing and screening in Canada.

Because of the need to produce specific sizes and shapes to meet customer demand, rather than just crushing the rock as much as possible to liberate metals as in mining, Dobbler notes that the aggregate sector has long been a leader in crushing automation.

“It’s a much more demanding crushing process in the aggregate industry, as well as more demanding screening process, so it requires higher level of attention to ensure that they’re really maximizing their revenue for what they’re putting into it,” Dobbler says.

Now, aggregate producers want the higher level of automation that comes with newer, high-performance technology.

“Operations today want to be able not just to operate their equipment – they want to be able to see what’s happening, how it’s WWW.CANADIANMININGJOURNAL.COM

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Sandvik CH550 portable plant.

CREDIT: SANDVIK

performing, what are the reasons they’re not getting the performance that they expect,” Dobbler says. “The technology now in the market offers a level of automation that provides the kind of feedback that gives them the opportunity to further improve their process and reduce their costs.”

Automation systems that include scheduled maintenance features and GPS uplinks to track equipment in real time are also increasingly being offered to aggregate clients, Dobbler says.

In addition to efficiency, safety is another big concern in the industry, says

Matthew Hanson, business development, mining, at Superior Industries, a leading supplier of conveyors.

“Right now, safety is one of the largest driving factors – the safer you can make any type of crushing, conveying, seems to be a very good thing.”

Hanson says that includes guarding to keep people away from machinery or to keep material from a conveyor from falling on people or equipment.

And to counter the dust and noise that can serve as irritants to the neighbours there are products like Sandvik’s telescopic chute.

“It’s pretty tough to dampen the noise of a crusher, but there are different ways to build shelters around to dampen the noise or to put encapsulation to keep the dust within a confined area and dust collection,” Daoust says. “So it’s not necessarily through changes to the crusher itself or to the screen itself, but it’s more with the components around them we can deal with these problems.”

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SITE VISIT

By Alisha Hiyate

Aerial shot of the St Marys Cement site.

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ike all the vehicles at Votorantim Cimentos’ St Marys Cement plant and quarry in Bowmanville, east of Toronto, a new Caterpillar 993K wheel loader makes a strange noise when it backs up.

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Instead of the customary loud beeping noise that most equipment makes – a safety feature to warn anyone who may be in proximity – vehicles at this operation make a loud squawking/barking sort of sound.

With the nearest neighbour only 250

metres away from the quarry, which operates six days a week and between 10 and 20 hours each day, some residents found the beeping noises too piercing and constant.

So the company devised a way to modify the sound so that it would be less botherWWW.CANADIANMININGJOURNAL.COM

2017-04-25 4:39 PM

VOTORANTIM CIMENTOS’

ST MARYS

CEMENT

legacy BUILDS A LASTING

Quarry Manager Ernie Hamilton and Heavy Equipment Mechanic Ken Heeriga.

Cement plant a sustainability leader in North America

CREDIT: CHERISSE DIARAM

some to the neighbours while still meeting safety requirements.

That’s just one example of the ways in which the Bowmanville quarry and cement plant tries to be a good neighbour.

While not as much can be done to mufAPRIL 2017

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fle the noise from twice weekly blasting that takes place at the limestone quarry, the company does its best to minimize the impact on neighbours.

“We are right in the middle of a community, so we pay particular attention to

the wind direction and the wind speed,” says quarry manager Ernie Hamilton. “The audible from a blast is usually what people notice the most.”

In addition to sharing the blasting CONTINUED ON PAGE 18

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SITE VISIT

The central control room at the plant.

CREDIT: ALISHA HIYATE

schedule in the local paper and responding to community concerns, there are independently monitored stations scattered around the quarry that measure ground and air vibrations to ensure the operation stays within regulatory limits.

“There’s been a lot of work done over the years to try and minimize the noise,” says plant manager Jim Storey, who has worked in the industry for 28 years. “We’ve been here since 1968 and that’s how we’ve been extracting the rock through that period of time – through blasting.”

Being accustomed to the remote location of most mines, the urban location and ease of access to markets is the first thing that strikes Canadian Mining Journal about the Bowmanville facility. Just off highway 401, the plant also has onsite rail loading facilities and access to Lake Ontario for barge shipping.

St Marys Cement was founded in 1912 in the southern Ontario town of the same name.

The company opened the Bowmanville plant at a time when the Greater Toronto Area (GTA) was rapidly expanding.

In fact, the plant, which will celebrate its 50th anniversary in 2018, has secured a place in local history. The facility supplied material for such Toronto landmarks as the CN Tower, Ripley’s Aquarium and Roy Thompson Hall – as well as the neighbouring Darlington nuclear plant. Its products have also been used to make countless roads and bridges in Southern Ontario, the GTA and the Great Lakes Region.

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materials supplier Votorantim Cimentos, which bought St Marys and its six locations (four in the U.S. and two in Canada) in 1991, the Bowmanville plant has roughly 130 employees, including 15 that work in the quarry.

During CMJ’s mid-February visit, the quarry wasn’t running at full tilt as the plant was closed for its annual maintenance shut down until early March.

But the quarry is where the cement-making process begins.

By mining standards, the Bowmanville quarry is small. Permitted for 4.5 million t/y, only about 3.45 million tonnes of rock was extracted last year. The majority of that, 2.84 million tonnes, went into the cement plant onsite. The remainder, 616,000 tonnes, was processed into aggregate for St Marys’ sister company, Canada Building Materials or CBM, which is also part of Votorantim Cimentos’ North American operations.

Currently at around 73 metres deep (at the top of Level 6), the quarry is permitted down to the 12th level, or 190 metres deep.

Drilling and blasting in the quarry usually takes place on Tuesdays and Thursdays, subject to weather and production demand.

Each blast is aimed at freeing between 40,000 and 60,000 tonnes of limestone.

The large chunks of material are moved with the company’s fleet of six 100-ton haul trucks (both Caterpillar and Hitachi models), two 22-ton wheel loaders, and a new 30-ton Cat 993K loader – the largest in eastern Ontario.

The vehicles take the blasted material to the primary crusher, a 300-kW, 54” FullerTraylor gyratory crusher that can handle up to 1,500 t/h. The resulting -8” fragments are then processed down to -4” by a 450-kW Pennsylvania hammer crusher and then stored in one of three rock silos, based on the amount of calcium carbonate in the limestone.

“Two of the silos have low-carb rock and one has high-carb,” Hamilton says.

Underneath the silos, feeders transport the rock to the 3,000-kW raw mill that crushes it into a fine powder and combines it with other materials – shale or clay, iron and sand.

The chemistry of the materials is critical and the raw mill (an FLSmidth Atox 45 vertical spindle mill) has an analyzer that allows it to continuously sample and control the chemical mix of the material by running the feeders at variable speeds.

From there, the material goes into an FLSmidth preheater/precalciner kiln, which is fuelled primarily by coal.

The kiln can produce 230 tonnes of clinker per hour. Some clinker – a nodular material that must be finely ground and combined with gypsum to make cement is shipped to St Marys’ Detroit plant by barge.

The rest is further processed into cement using a 225 t/h Koppern roll press, three FLSmidth ball mills (up to 65 t/h) and separators, and then shipped in bulk by barge, truck or rail.

The whole process is highly automated and overseen from a central control room WWW.CANADIANMININGJOURNAL.COM

2017-04-25 4:39 PM

The Bowmanville quarry, permitted for 4.5 million tonnes per year.

CREDIT: CHERISSE DIARAM

that is manned 24 hours a day.

As a bulk supplier, the plant makes up to 1.25 million tonnes of Portland cement annually – Type GU, Type I (both general use) and Type HE (early high-strength cement). Any further customization of cement is done at CBM’s Ready-Mix division. During the busy summer construction season, demand for product from the Bowmanville plant outstrips demand. To deal with these periods, the company invested in an expansion several years ago – not of the plant, but of its onsite storage capacity.

“One thing that you can do to increase the output of the plant is to run it longer, you don’t necessarily have to expand it,” Storey explains.

The plant has storage capacity for up to 210,000 tonnes of clinker and 120,000 tonnes of cement, allowing inventory to build in preparation for busy periods.

Energy leader Unlike mines, quarries are dependent on local markets because of the cost of shipping their heavy products.

The growth of the Bowmanville operation has mirrored that of the communities around it, in particular the GTA. When it opened in 1968, the plant had a single wet kiln with a capacity of about 900 tonnes per day. In 1972, capacity was doubled with the addition of a second kiln.

A plant upgrade between 1988-91 again increased capacity, this time to 5,000 t/d as the wet kilns were replaced with a single preheater/precalciner kiln. At the time the APRIL 2017

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biggest in North America, the kiln remains the biggest single-kiln operation in Canada.

The kiln was last upgraded in 2000 to a capacity of 5,600 t/d.

What’s also changed over the years is the thought given to the plant’s energy consumption.

Producing cement is energy intensive – energy represents about 35% of the plant’s production costs. The kiln gets up to 1,500 °C – hot enough to melt steel. And the plant isn’t immune to the rising energy prices that have affected all of Ontario.

The operation pays spot prices for electricity which can vary from negative pricing on occasion, to over $300 per MWh. (During CMJ’s visit it was around $20-30 per MWh during the day.)

“Certainly, we are seeing that our electricity prices are on the rise,” Storey says.

“So we’re fortunate that we’ve had an energy initiative that’s well established and well engrained in our culture for better than 10 years now. It’s paying dividends.”

Those efforts have saved well over 16 million kWh over the past decade.

In 2011, the operation demonstrated its leadership in this area by earning its ISO 50001 certification for energy management.

“We’re very proud that the Bowmanville plant was the first business ever in North America to receive this certification,” Storey says. “As a company, our goal is to have a positive, long-term impact on people and our planet.”

To achieve the ISO 50001 certification, the company worked closely with Natural

Resources Canada and a third-party registrar to manage the audit process and verify the plant’s continuous improvement over a three-year period.

The certification was a natural extension of efforts the plant was already making to save energy.

In 2005, the company started to pay even closer attention to its energy use and costs and, a year later, it formed an Energy Management Conservation Committee dubbed E=MC2. The committee established baseline measurements for the plant’s typical consumption of electricity and thermal energy, and found early success with low-cost measures such as installing occupancy sensors and monitoring and control software that would automatically turn off inactive equipment.

The company also hired Burlington, Ont.-based consultants 360 Energy to help it reduce its energy consumption.

The effort earned St Marys the UK-based National Energy Foundation’s silver level Certification in Energy Excellence (CEE).

Next year, St Marys is installing a new, more efficient raw mill and a new scrubber to further reduce emissions. It’s also continuing work on the use of alternate fuels and using CO2 from the plant’s processes to grow algae to use as fuel.

The company has also worked with FLSmidth to reduce its SO2 emissions by producing its own hydrated lime, which is used as a cost-effective alkali to treat flue gas emissions from the cement plant. “Given the scale of our operations, it’s incumbent upon cement producers to constantly look for new and innovative ways to mitigate our environmental impact,” Storey says.

The efforts are in keeping with the company’s long-term point of view, expressed by its purpose statement, “Life is made to last.”

When the facility celebrates its semicentennial next year, it will still be less than halfway through its expected lifespan. At current production rates, the quarry is estimated to last for another 70 years.

When operations are done, the pit will become an extension of Lake Ontario – likely a deep-water marina.

“Today, the quarry supports the growth and construction of highly desirable developments. Eventually, as part of the Bowmanville lakefront, it will become one!” Hamilton says with a laugh. CMJ CANADIAN MINING JOURNAL

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money

FOR WASTE ROCK

Profitable aggregate sideline adds to bottom line for gold miner Anaconda

J

unior gold producer Anaconda Mining is getting noticed for all the right reasons. The company opened a small gold mine 6 km east of Baie Verte on Newfoundland’s Ming’s Bight Peninsula in 2008. It is called the Point Rousse project and includes the Pine Cove gold mine and the 1,200-tonne-per-day mill.

The Point Rousse project is a small, reliable operation pouring slightly more than 16,000 oz. in 2016 with plans to double production to 30,000 oz. in the works. There is potential for expansion and longer life as Anaconda continues to explore five additional deposits and several showings within 8 km of the mill.

Recognition is coming quickly. The CIM Newfoundland Branch named Anaconda the 2016 Miner of the Year. The company is one of the best places to work in Atlantic Canada, as rated

by Progress Magazine and Best Companies Group last year. The company’s president and CEO Dustin Angelo was named to the list of 2016’s Top 50 CEO’s in the region by Atlantic Business Magazine. And earlier this year Angelo was named Industry Per-

son of the Year by Natural Resources Magazine.

Besides building an award winning gold enterprise, Angelo has also created a thriving aggregate ventures for the company. It is located at the Point Rousse port facility where crushed waste from the mine is loaded onto ocean-going vessels.

Anaconda is working with Shore Line Aggregates (a subsidiary of its contract miner, Guy J. Bailey Ltd.) and Phoenix Bulk Carriers to supply 3.5 million tonnes of gravel to a construction project on the eastern seaboard of the United States. The final environmental and construction permits for the port were received last December.

Point Rousse is located in the Baie Verte Harbour, one of the deepest harbours in Atlantic Canada. The depth makes the site suitable for loading ships up to 199 metres long and carrying 60,000 tonnes per trip. So far Anaconda has shipped about 1 million tonnes of aggregates.

The aggregate contract will add approximately $2 million to Anaconda’s treasury by the end of this year, and that is without

Anaconda’s Point Rousse ship loading facility for aggregates headed to the United States.

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CREDIT: ANACONDA GOLD

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having to commit capital to the project.

“With water export access at Port Rousse, our waste rock is now a competitive product in the seaborne aggregates market, resulting in an additional revenue stream for Anaconda while also reducing mining costs, Angelo said in a release. “The aggregate that will be shipped under this project would otherwise require approximately 100,000 tri-axle tractor trailer loads if transported over land. The marine shipping option makes this a safe, green, and competitive means to move vast amounts of product.

“The establishment of Port Rousse also opens up new economic diversification opportunities for Anaconda and the Baie Verte region. Water access now positions Anaconda to explore other export and import ventures, including potentially importing gold ore for processing at the Pine Cove mill,” he added.

The aggregate business created more than 70 new jobs, 60 at Shore Line and 12 more at Sealand Shipping Services as tug operators, harbour pilots, and hand-lining services. Vessels are loaded continuously at a rate of about 20,000 tonnes per day.

Anaconda’s gold prospects, too, are good. The Pine Cove deposit has probable reserves of 858,855 tonnes grading 1.46 g/t gold, indicated resources of 1.5 million tonnes at 1.61 g/t, and inferred resources of 220,700 tonnes at 1.59 g/t gold (0.7 g/t cutoff). All in there are almost 125,000 contained ounces of gold.

LabServiesAd.qxp_Layout 1 3/9/17 9:42 AM Page 1

Anaconda is working with Shore Line Aggregates and Phoenix Bulk Carriers to supply 3.5 million tonnes of gravel to a construction project on the eastern seaboard of the United States.

Also within the Point Rousse project is the Stog’er Tight deposit, which is in an advanced stage of exploration merely 3 km east of the Pine Cove mill. This mineralization totals 204,100 indicated tonnes grading 3.49 g/t gold and containing 23,540 oz. as well as 252,000 inferred tonnes at 3.27 g/t gold and containing 26,460 oz. (0.8 g/t cut-off).

The company optioned the Viking gold project from Spruce Ridge Resources in February 2016. The property is 100 km away by water or 180 km away by road from the Pine Cove mill. Resources there have been calculated at 937,000 indicated tonnes grading 2.09 g/t gold and 350,000 inferred tonnes grading 1.79 g/t (1.0 g/t cut-off). Together the CMJ contained gold totals 53,000 oz.

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• Grinding equipment (cone, ball, and rod mills) • The CPT Mini Pilot Plant • XRF analytical capabilities

CANADIAN MINING JOURNAL

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ADVERTORIAL

BME’S SUCCESS TAKES IT GLOBAL

S

outh Africa-based blasting company BME has built a solid reputation and growing footprint in recent decades with its highquality emulsion explosives and its exciting range of electronic detonation technologies; now has Canada in its sights.

Joseph Keenan, Managing Director, BME

As the largest supplier of emulsion explosives to South Africa’s opencast mining sector, BME has established a significant presence in various parts of Africa – and is also now extending its products and services into underground mining.

According to BME’s managing director, Joe Keenan, the continent will remain the core focus area for the business, but it has identified a number of new international markets for expansion as a result of customer interest; these included Canada , Australia (where BME already has substantial presence), and the western coast of South America.

The bid to acquire Canada-based Nordex Explosives last year was a demonstration of BME’s intentions, and it is actively pursuing other opportunities in the country.

“We’re hopeful to have a business with production capacity in Canada in the near future,” said Keenan. “An indicator of our commitment has been the finalisation last year of our product registration and licensing agreements for North America.

Following our recent company and product registration in Colombia, we also finalised our first purchase order to the South American region.”

Keenan said that many of BME’s Canadian, Australian and American clients are expanding their African footprints, which bodes well for the company’s ability to prove itself in Africa as part of its reputation-building efforts in other parts of the world. Blasting contracts as far afield as Singapore have already demonstrated the company’s expertise and capacity; BME even supplied emulsion explosive to the remote island of St Helena as part of the airport construction project.

Permanent innovation BME’s permanent state of innovation recently led BME to formally establish a Blasting Science unit which is dedicated to applying its hi-tech know-how to solutions in the field. Its application of AXXIS™ electronic detonators recently allowed BME to earn the world record for the largest ‘electronic blast’ to date – at an Australian coal mine.

Last year, Daunia opencast coal mine in the north-eastern state of Queensland, Australia fired 5,665 detonators in 2,683 blastholes using its in-house AXXIS™ digital detonation system from BME. Having already set the industry precision-blasting benchmark with its AXXIS™ system, BME has now added a Centralised Blasting System (CBS) to the AXXIS™ package. The system allows mines to plan and initiate simultaneous underground blasts from surface, and now facilitates real-time communication of blast-related data and reports to and from the workings.

BME has leveraged the power of mobile technology and internet ‘cloud’ storage to develop mobile applications for monitoring and analysing blasting activities. These applications, such as Blastlog, are stepping beyond the pen and paper methods currently common on mine sites – to bring real-time reports and notifications to decisionmakers in time to improve their decisions.

The system allows data to be captured on mobile devices in the field, and to be presented to end-users on a mobile platform that renders the data immediately useful.

From opencast to underground Making the leap opencast blasting to an optimal underground solution has involved innovations such as a vertical pipeline from surface to underground workings, the design of underground storage and delivery systems, and the development of light-weight charging units to charge blastholes in narrow-reef stopes.

In conjunction with underground gold miner Gold One, BME recently engineered the world’s deepest vertical emulsion pipeline, and worked with Gold One to implement a range of systems to

About BME – www.bme.co.za: BME is the leading supplier of explosives and services to the African mining, quarrying and construction industries. Focusing on safety, supply security and value adding technical services, BME strives to remain at the forefront of technology by regularly participating in the research and trials of new blasting techniques and products, as well as attending and presenting at technical conferences worldwide. BME has operations in over 23 countries including Australia, Singapore, Indonesia, Columbia and 20 countries in Africa.

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A controlled blast using BME’s AXXIS initiation system

deploy emulsion explosives across the mine’s work-faces at its Modder East mine east of Johannesburg.

The use of emulsions at Modder East has drastically streamlined the handling BME’s application of AXXIS™ electronic detonators recently allowed BME to earn of explosives on the the world record for the largest ‘electronic mine, laying the way for blast’ to date efficiency improvements on various fronts. As emulsions are not classified – under most country’s regulations – as explosives until they are sensitised in the blasthole, they can be transported more safely and without disrupting mine operations. Neither do they consume any shaft time, freeing up this valuable facility for other vital functions.

Capacity and quality BME’s expansion has been made possible by evolving its processes and building its capacity to keep up with demand, while enhancing the final manufactured quality of its products. Last year, the company commissioned a world-class, world-scale automated emulsion facility at its Dryden premises in Mpumalanga province east of Johannesburg. It also installed two automated assembly APRIL 2017

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machines for non-electric detonators at its Losberg facility in North West province, to improve the quality and predictably of its non-electric products. The company has subsequently produced a million units without a customer complaint.

The success generated as a result of these new automated processes has resulted in the installation of a similar automated machine for the company’s AXXIS electronic product line with another one on order.

“We are investing in our future to deliver greater capacity within the organisation with better standards and quality to accomplish a greater presence and better value-add,” said Keenan.

By June this year, BME will have tripled the output of its electronic detonators, and by September it will be producing four times more non-electric detonators.

“We have been successful in improving the quality of our products through the implementation of innovative systems like our proprietary automated production lines,” he said. “To be part of a long-term solution for our customers, we need to provide the same high quality of blast everywhere, no matter how far the client is from BME’s nerve centre in Gauteng.” n CANADIAN MINING JOURNAL

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MATERIAL HANDLING

S

PROFIT OU G TO IN T IF

F

T A N I U N O S M

W

hat does an operation do when its profits are buried in millions of tonnes of sand and its equipment needs to be portable enough to move on a moment’s notice? Figuring that out is a daily task at Lonesome Prairie Sand & Gravel, a 35-year-old aggregates company in Canada.

The mountains of sand are especially troublesome for the company’s operation in Big Boy quarry, Wakaw, Sask. Profits are a challenge because though crews sift through more than a million tonnes of material every year, only about 180,000 to 270,000 tonnes is sellable aggregates. In most circumstances, the quarry would also

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sell the sand, but because Big Boy is too far from large sand-buying markets, they are only able to sell about 45,000 tonnes a year, severely limiting profitability.

The site is in western Canada, where pits are generally non-sustainable and gravel is becoming harder and harder to find, meaning most aggregates operations must use portable equipment so they can quickly move to the next job. A single Lonesome Prairie crew could operate in as many as 15 to 20 pits per year, so it’s important that they’re able to move everything in as little time as possible.

Lonesome Prairie had been using two portable vibrating screens in the Wakaw location, but the equipment wasn’t hold-

ing up to conditions. The machines regularly bogged down, leading to sand going through the crushers and contaminating the sellable material, resulting in wasted product and lost profit. In order to maximize yields, the operation used screen media with opening sizes as large as 7, 8 and 9 mm and overloaded the screens with as much as 4,500 tonnes of material a day. The larger opening sizes meant smaller rock – about 5% to 8% of the sellable rock – was falling through with the sand the operation considers waste material. The issue cost Lonesome Prairie about $200 an hour in production losses.

Production rates and lost revenue were only compounded by high maintenance WWW.CANADIANMININGJOURNAL.COM

2017-03-20 11:06 AM

Portable vibrating screen boosts aggregates operation’s productivity and profits

costs. The sand caused the vibrating screens to wear quickly and require nearly continuous replacement of screen media. Crews needed to change screen media every two weeks, resulting in two to three hours of downtime and 900 to 1,400 tonnes of lost production for each change-out.

“The many issues were frustrating for our crew and our customers,” said Henry Derksen, Lonesome Prairie Sand & Gravel operations manager. “Contamination meant our material wasn’t as clean as it should be and we were concerned the issues would drive away our buyers.”

Lonesome Prairie management approached Hikon Industries. They explained what they were looking for: a APRIL 2017

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user-friendly, portable vibrating screen that would meet production requirements and be manufactured out of as many modular components as possible to allow for inexpensive repair.

Lonesome Prairie provided their desired tonnage rate, gradation samples and other specifications, and Hikon started looking for a vibrating screen to match. They talked to several manufacturers, including Haver & Boecker. They were also aware of the company’s Tyler F-Class vibrating screen, which features an advanced double-eccentric shaft design, supported by four high-performance, double-spherical roller bearings. The technology minimizes structural vibrations and delivers a consis-

tent stroke, virtually eliminating surging, blinding, pegging and material contamination. Hikon and Haver & Boecker agreed to work together and started to design a Tyler F-Class portable plant.

Hikon custom-built the chassis around the 1,825 by 6,100-mm, three-deck F-Class. Haver & Boecker engineers factored in the desired tonnage and the material that Lonesome Prairie processes to determine what the machine’s stroke should be, the speed and general mounting guidelines. Hikon took feedback from CONTINUED ON PAGE 26

The 30.5-metre-deep pit at Lonesome Prairie Sand & Gravel’s Big Boy quarry sharply contrasts with shallower pits in the region. CREDIT: HAVER & BOECKER

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MATERIAL HANDLING

the aggregates company, including adding a specially sized jaw crusher on the chassis. Lonesome Prairie also asked that the bottom deck of the vibrating screen be end-tensioned. In the company’s operation, the design results in longer lasting screen media and 30% more productivity than side-tensioned machines. Haver & Boecker customized the machine for Lonesome Prairie’s specific needs. When the engineering design was in place, both manufacturers got to work.

The finished plant included a hydraulic system to lift and position the vibrating screen at the optimal angle. Crews use the hydraulic system to set up the portable vibrating screen in less than 30 minutes, with the entire plant – including conveyors and other peripheral equipment – taking about half a day. The same task can take around two weeks for fixed equipment – a length of time Derksen said could mean a loss of about $300,000 in production during the busy season for a 24/7 operation.

The F-Class portable plant arrived at Big Boy quarry in April 2016, and Lonesome Prairie began testing immediately.

They were skeptical of the results the manufacturers had promised, thinking it was too good to be true. Doubts vanished when they found the single vibrating screen increased aggregates production by about 25%. The improved screening action allowed the operation to maintain needed production rates while using screen media with an open area of about 26 |

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Top left: Haver & Boecker’s portable F-Class conveyor. CREDIT: HAVER & BOECKER Top right: Haver & Boecker’s F-Class vibrating screen features four-bearing technology, which minimizes structural vibrations. CREDIT: HAVER & BOECKER Bottom right: Lonesome Prairie Sand & Gravel screens about 450 tonnes of material per hour, of which about 270 to 320 tonnes is sand. CREDIT: HAVER & BOECKER

4 mm, preventing waste of the smaller sellable material the company lost while using larger open area screens.

“Price can be a problem in western Canada because our competitive market often calls for cheaper equipment that fit the budget. But despite the higher price tag, I have no doubts we’re improving profits with this machine,” Derksen said. “We couldn’t believe our eyes; bad weather didn’t even faze it. People don’t believe us when we tell them our costs are so far down and we’re getting more productivity out of

one 1,825 by 6,100-mm vibrating screen than the 1,825 by 6,100-mm and 1,825 by 4,875-mm units we were using before.”

Derksen said the two prior units together produced about 360 t/h. The F-Class virtually eliminated blinding and maintained consistent g-force during surging. This boosted material processing to 450 t/h, including about 270 to 320 t/h of sand with the rest being clean, sellable CMJ material.

This article was provided by Haver & Boecker.

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Metso in-pit crushing and screening solution in Russia.

MATERIAL HANDLING

DELIVERING A STEP CHANGE IN OPERATING COSTS Mining evolves, but sometimes a step change happens

By Erik Isokangas

M

ining is as old as human civilization. In the Stone Age, flint was mined by hand to make tools. Mining expanded through the Bronze Age when stones and metals were mined for their beauty, tin and copper to make bronze for weapons, marble for construction, and silver and gold for commerce and trade, in ever larger quantities, but still by hand. Mining organically grew through the sheer number of hands, with some mines using tens of thousands of slaves. But early in the first century, a step change occurred: the Romans developed large-scale mining methods using hydraulics. The technique was called, hushing, where water was used to sluice away overburden to expose the veins of metal. Heated rock was then quenched to fracture it through thermal shock. The discovery of black powder in the 17th century finally ushered in the era of blasting. Another step change happened.

Until the early 20th century, transporting waste and ore was done by hand, water, wheelbarrows, horse-drawn carts and ore cars

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on rails. The invention of the internal combustion engine led to another step change in mining: the development of haul trucks as we know them today.

Organic growth in haulage

Haul trucks have been a pillar of mining for almost 100 years.

They’ve grown from the 6 ton capacity trucks of the 1920s to the 400+ ton giants of today. They’re incredibly flexible, big, and exciting. We’ve grown-up as young boys and girls with a Tonka truck in our sand pits and LEGO dump trucks in our bedrooms. At university we were taught how to design and plan using trucks.

But trucks are also incredibly inefficient, spending half their time driving empty, wasting diesel to move hundreds of tons of steel, and needing a driver in every seat. It wasn’t long ago that tires were more scarce than the proverbial hen’s tooth, and when oil hit $100 a barrel our beautiful truck was starting to lose its shine.

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Conventional truck haulage can account for up to 50 to 60% of the operating cost of mining. Oil won’t stay at today’s low prices forever and truck tires limit haulage distance or capacity. Trucks are and will become more expensive.

The next step change

Over recent years the mining industry has seen a significant negative trend in the value of commodities. Pits are becoming deeper, grades lower, and costs of inputs increasing. So the industry is exploring new ways to mine at lower cost, looking at new equipment systems, methods, and technologies. Conventional truck haulage is becoming unviable at many mines.

There is a solution to the challenge of these ‘mega-trends’: reduce reliance on trucks as the main method of transportation. Put the mineral or waste material on a conveyor as early as practical in the mining process. The savings can be substantial, about 15-35% or sometimes more, mainly from the improved energy efficiency of conveying and reduced maintenance and labor costs.

A case in point

Here’s an example. Let’s consider a mining operation where 10 million cubic meters (in-situ) per year of material needs to be transported 3 km; thus a 6-km, 20-minute, return trip for trucks. This job might be achieved using two 350-ton excavators and a fleet of twelve 140-ton trucks, operating 5,800 hours per year. To support this fleet, water trucks and graders are also needed for road maintenance and, say, a few dozers for dump maintenance and pit cleanup.

If this mine employed a fully mobile solution to move the same volume of material with the same class of excavators, the system might include a 2,000 t/h mobile crusher/sizer, such as Metso’s LT160E, for each excavator (one on each of two benches), connected to a Lokolink articulated mobile conveyor feeding a shiftable conveyor. An inclined bench conveyor would feed material from the second bench and portable conveyors needed to exit the pit. A 2-km overland conveyor would take the material to a waste dump. A-1 km shiftable conveyor on the dump would then feed a spreader. Dozers and other equipment would also be needed for conveyor shifting and cleanup. This scenario assumes 5,200 operating hours per year due to the additional time required to move conveyors.

Comparing these two scenarios, using energy and labor costs typical in an Asian country, the in-pit crushing and conveying (IPCC) solution would be around 20% or EUR 0.25/ton cheaper to operate, including the cost of the capital funded at an interest rate of 7% over seven years. In a country with higher costs of inputs, IPCC is even more cost effective.

This is a very significant cost saving.

Figure 1 shows a comparison in costs between the two scenarios.

Although there is an additional cost of crushing or sizing the material, this is vastly outweighed by the savings in transport. Utilities costs are also cheaper in the IPCC scenario, particularly due to the reduction in road maintenance costs.

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Life of Mine Cost (€/TONNE)

MATERIAL HANDLING

1.40 1.20

0.27

1.00

0.00 0.79

0.80 0.60

0.37

0.40 0.20

0.17 0.25

0.23

0.25

CTH (Truck/Excav)

IPCC (Fully mobile)

0.00

• Utilities • Crushing • Transport • Loading

Figure 1: Comparison between conventional truck haulage (CTH) and a fully mobile (IPCC) solution for waste handling (graphed by work category)

Every mine will have different cost inputs, pit geometry, material characteristics, lithology, equipment, and mining targets, but this example highlights the potential for IPCC to deliver a step change in operating costs.

Changes and challenges

Conveyors are not a new invention. Thomas Robins is credited with having developed a conveyor belt for carrying coal and ore in 1892, pre-dating the first haul trucks. Nor is the idea of loading a conveyor by shovel a new idea, with examples in mining and construction from the early 1900s.

With relatively homogeneous resources and very tight margins, the quarrying industry has been a significant employer of mobile IPCC methods. However, the mining industry has been much slower to adopt IPCC – perhaps for good reasons. Trucks offer the flexibility needed for selective mining, adapting to changes in market conditions and for the uncertainty inherent in any resource.

Trucks also offer scalability and redundancy to ensure targets can be met in uncertain times.

Another challenge for IPCC is the lack of site experience. Only recently have universities started to teach IPCC mining methods and pit designs, and mining software companies are slowly introducing IPCC concepts into their design tools.

However, as horses were replaced by steam engines to pull carts there are also methods to get the “best of both worlds” from trucks and conveying, the semi-mobile solution.

Step changes don’t happen overnight. The Romans developed hushing over centuries, and drilling and blasting has only recently turned from an art form into science. As mines and identified resources are becoming unviable due to the costs of haulage, IPCC may be the only way to significantly reduce costs and continue to produce the ingredients that modern society needs.

IPCC solutions also come with a range of other benefits: less dust, less environmental emissions, less water consumption, less noise, and less energy consumption. They also open the door to new opportunities for mining automation and pre-concentration techniques.

It’s time for the next evolution in mining transport systems.CMJ Erik Isokangas was Director, In-the-pit Solutions at Metso at the time of writing. This article was originally published in September 2016 on the Metso Mining Blog at www.metso.com. To contact a Metso expert for more information, email Jorma Kempas at jorma.kempas@metso.com.

WWW.CANADIANMININGJOURNAL.COM

2017-03-20 11:07 AM

FIRST NATIONS

Balancing economic development with environmental protection Wahnapitae First Nation crafts community mining industry strategy

by Kyle Edwards

W

ith only about 60 band members living on reserve, Wahnapitae First Nation in Ontario is smaller than most, but it’s a community becoming known for its innovative approach to fostering company partnerships within the mining industry.

At this year’s Prospectors & Developers Association of Canada convention in Toronto – one of the world’s largest conventions for mineral exploration and finance – representatives from Wahnapitae delivered a presentation highlighting their recipe for community engagement that helps to foster mutually beneficial and successful industry partnerships.

“It’s about first reaching out and starting to talk to us at the very early, early stages of the project and then organizing a working group that can figure out what this relationship is going to look like,” said Cheryl Recollet, the director of sustainable development at Wahnapitae, who led the presentation in front of an audience made up of mining industry representatives and community members.

This means defining the individual interests of both sides and how the project will benefit both parties. And from there, Wahnapitae hopes to build the structures needed for a healthy relationship with industry partners, Recollet said.

“A lot of our relationships will have an environmental committee,” Recollet said. “That committee will consist of two members from our community, as well as two members from the company, and we’ll review their closure plans, their permits and their CVAs.” Wahnapitae is currently involved in several advanced exploration projects, having just completed an environmental baseline study for Wallbridge Mining. Since establishing its mining industry strategy in 2005, Wahnapitae’s mining industry working group has developed key relationships with Glencore’s Sudbury Integrated Nickel Operations, KGHM International, Vale and Cliffs.

Although Wahnapitae First Nation is a small community, it has “big boots in the Indigenous mining sector,” says Regional Chief Isadore Day. “The leadership, Elders and community experts have demonstrated years of commitment to a balance

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Wahnapitae is a model First Nation that sets the treaty implementation bar effectively and secures a rightful place for future generations of First Nation mining experts.

– ONTARIO REGIONAL CHIEF ISADORE DAY

between protection of the land for future generations and claiming rightful benefit and livelihood through direct industry participation. WFN is a model First Nation that sets the treaty implementation bar effectively and secures a rightful place for future generations of First Nation mining experts.”

One of the many priorities when it comes to partnering with industry on a particular project, Recollet said, is making sure Indigenous knowledge of the land is incorporated into the environmental aspects of the process.

“Often they will just be looking at impacts to aboriginal and treaty rights when they’re doing these projects,” Recollet said.

“We’re saying, ‘No, we want you to use our knowledge to integrate into your project design, like you would do with science.’”

The relationship, Recollet said, is a two-way street, one that emphasizes knowledge-sharing between two groups. In the past, Wahnapitae’s relationship with industry partners has been used CONTINUED ON PAGE 30

Wahnapitae First Nation administration office.

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FIRST NATIONS

SINCE ESTABLISHING ITS MINING INDUSTRY STRATEGY IN 2005, WAHNAPITAE’S MINING INDUSTRY WORKING GROUP HAS DEVELOPED KEY RELATIONSHIPS WITH GLENCORE’S SUDBURY INTEGRATED NICKEL OPERATIONS, KGHM INTERNATIONAL, VALE AND CLIFFS.

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s Cheryl Recollet, director of sustainable development at Wahnapitae.

s Wahnapitae First Nation.

by making homemade wind turbines.

“We are trying to get them aware of their sacred responsibilities to care for the Earth and how we can support them in doing that,” Recollet said.

“We want to give them that foundation to fully understand what is happening in our territory, and so that way they can actively participate and contribute to that dialogue.”

CMJ KYLE EDWARDS is a journalism student working with the Chiefs of Ontario Communications department.

The Chiefs of Ontario (www.coo.org) is an advocacy forum, and a secretariat for collective decision making, action, and advocacy for the 133 First Nation communities in Ontario.

CREDIT: WAHNAPITAE FIRST NATION

to inform community-based projects, for example mining partners have been brought in to give advice to the community on how it can better manage its landfill sites in post-production.

But even after the mine site is closed, one of Wahnapitae’s core requirements of industry partnership is having a continuous relationship after the work is done, which often includes consistent environmental monitoring of the area.

“We want to make sure we are involved in that process and have a relationship structure that can also handle it in postproduction, so once nothing is being pulled out of the ground, what happens to us and what happens to our relationship?”

Recollet asked.

For Wahnapitae, achieving environmental capacity while also meeting economic development goals starts with ensuring that their community members have the knowledge to participate in the planning process. At the community level, this has meant an effort to get youth engaged in science and in the environment around them.

Wahnapitae boasts several initiatives for youth engagement such as their Sustainability Superheroes program, which hosts workshops about once per month where youth have had opportunities to learn about biodiversity and renewable energy

WWW.CANADIANMININGJOURNAL.COM

2017-03-20 3:59 PM

CSR & MINING

Legal trends highlight human rights risks for miners operating abroad

By Michael Torrance

M

ore cases out of British Columbia highlight the growing legal risks related to human rights practices abroad and the adoption of CSR standards covering global mining operations.

New British Columbia decisions The B.C. Court of Appeal recently reversed a lower court’s decision in Garcia v Tahoe Resources Inc., allowing a claim to be pursued in Canada for damages relating to alleged human rights violations occurring in Guatemala. The trial judge granted Tahoe’s motion to bring the matter to an end in Canada, finding that Guatemala was a clearly more appropriate forum for the litigation. On appeal, the Court of Appeal disagreed with the finding of the trial judge that a separate civil suit would be a more appropriate forum than a proceeding in Canada.

The Court found that the trial judge did not give adequate consideration to (1) the limited ability under Guatemalan civil procedure to discover documents in the possession of a foreign company; (2) the expiry of the one-year limitation period under Guatemalan law; and (3) evidence of corruption in the Guatemalan judiciary. The Court of Appeal further held that the trial judge had not applied the correct legal test for assessing the risk of corruption as one of the forum non conveniens factors. The trial judge had asked herself whether the foreign forum was “capable of providing justice,” but the Court of Appeal held that the correct legal test is whether there is a “real risk” that the proposed alternative forum would not provide justice. The Court noted that the claim arose in a highly politicized environment surrounding the government’s grant of a permit to a large foreign-owned mining operation in rural Guatemala and found that there was a measurable risk that the plaintiffs would encounter difficulty in receiving a fair trial against a powerful international company whose interests aligned with the political interests of the state.

In an earlier but still recent decision by the British Columbia Supreme Court (a lower court in B.C.) in the ongoing claim of Araya v Nevsun Resources Ltd., the Court also refused to strike proceedings based on human rights abuses alleged to have occurred at a mine located in Eritrea and owned and operated by an indirect subsidiary of a Vancouver-based mining company, allowing the claim to proceed to trial. The plaintiffs claim that the mine using forced labour, and alleging that Nevsun’s “mind and management” are primarily in Canada, Nevsun allegedly had oversight of the conditions at the mine. The plaintiffs point to

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evidence that Nevsun’s CEO chaired the board of its Eritrean subsidiary, statements in Nevsun’s public disclosure that Nevsun was involved in all aspects of the Bisha mine’s operations and Nevsun’s adoption of the 2006 International Financial Corporation’s Performance Standards on labour practices and working conditions. Nevsun denies the allegations and claims, in part, because the Bisha mine is an asset of a subsidiary which is party to the relevant commercial arrangements and makes all operational decisions (including in selecting the contractor). The B.C. Supreme Court dismissed a motion brought by Nevsun to dismiss the claim, concluding that the claims passed the very low threshold of it not being plain and obvious that they are bound to fail. Subject to any appeal, Nevsun will face a trial on the merits of the issues.

These cases are not just being seen in British Columbia, one of the first decisions allowing a claim to proceed in Canada was Choc v Hudbay Minerals Inc. that was decided by an Ontario court. In that case, the court found it was not plain and obvious the claim would fail and it is proceeding to trial.

Key takeaways for miners operating abroad These cases show there is an emerging willingness for Canadian courts to take on cases where they are convinced the plaintiffs will not obtain justice in their home forum and highlight the importance of forethought in how human rights are managed by Canadian companies, considering: w What legal obligations exist regarding human rights and international standards that could have bearing on their duty of care for their global operations; w What voluntary or international standards, such as the UN Guiding Principles, can affect their legal position and how they should be correctly applied prior to public adoption; w Whether the company is conducting adequate human rights due diligence on international operations, foreign subsidiaries, business partners and supply chains; and w How transparency and reporting should be handled to meet disclosure expectations (from regulators and stakeholders more broadly) balanced against legal risk mitigation.

Getting ahead of the curve in managing human rights risk is not just good for a company’s reputation, but an important part CMJ of legal risk management as well.

MICHAEL TORRANCE is a lawyer with Norton Rose Fulbright, Toronto.

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2017-03-22 10:57 AM

LAW

Is your safety system about to let your workers down?

By Simon Foxcroft

T

he ability of Canadian mining companies to demonstrate the requisite level of due diligence following a workplace incident is of paramount importance. So what should mining companies do?

Firstly, occupational health and safety systems need to be looked at closely to see if there are any shortcomings. Problems may lie with the system itself in that it does not meet the requirements of the current law. Alternatively, the system may be satisfactory but there could be a failure to implement and deploy it appropriately. To assess where an OHS system stands, it is helpful to ask the following questions.

Do your written policies and procedures meet the laws of the jurisdiction where the work is being performed?

Provincially regulated companies should be particularly mindful of the material differences between regulatory requirements in the various Canadian jurisdictions. For example, subject to the satisfaction of a number of requirements, a worker in Saskatchewan may work alone at the working face of an underground mine. In contrast, in Alberta only a worker who is conducting very specific tasks at a working face (sampling, testing or inspecting) may work alone, and workers are prohibited from producing coal while working alone at a working face in an underground mine.

Are your policies and procedures being clearly communicated to employees?

The development of comprehensive written policies and procedures that comply with law is a key component of an effective safety system. However, the production of such documents alone is likely not enough to prove due diligence. It must be shown that the information in the policies was communicated clearly and effectively to employees and was implemented through training (see for example: R v Procrane Inc. (Sterling Crane), 2011 ABPC 28; R v RD Longard Services Ltd., 2015 NSPC 20; R v.

Saskatchewan Power Corporation, 2016 SKPC 002; R v. Spruce Products Ltd., 2015 MBPC 40; and R v Lonkar Well Testing Ltd., 2009 ABQB 345). It is also critical that supervisors understand and implement progressive discipline policies for employee infractions of OHS policies and procedures.

Are your policies and procedures current?

Once appropriate written policies and procedures have been developed, they need to be updated on a regular basis. Consider

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when your policies were last revised and who within your organization is tasked with monitoring the changing requirements of the applicable OHS regulator. One practical tip is to subscribe to the free electronic update services offered by most regulatory bodies. Examples include the Ontario Ministry of Labour email alerts, the Alberta Labour OHS updates, and the WorkSafeBC update enews.

Are you placing undue reliance on adopted policies?

Following a merger or acquisition there needs to concerted effort to avoid a situation whereby workers must rely on a mishmash of policies from predecessor companies that have little or no common thread. Be wary of reliance on adopted written policies and procedures from a predecessor without appropriate consideration. Don’t assume that they meet the requirements of law or are accurate.

Are you placing undue reliance on industry standards?

An employer should be wary of relying solely on accepted industry standards. Accepted industry standards may not meet the current requirements of the law and unquestioned reliance on them may result in an inability to demonstrate reasonable care (see for example: R. v. General Scrap Iron & Metals Ltd., 2003 ABQB 22).

Are you placing undue reliance on third-party safety audits?

Beware safety audits without substance and third-party consultants who are simply checking boxes. Impressive scores on external safety audits are relatively meaningless in the context of a due diligence defence if the audit itself did not identify potential regulatory breaches or areas of material concern.

Close attention to these matters will ideally result in mining operations in which the risks to workers are readily identified and addressed. In the unfortunate circumstance that a mine site incident should occur, a properly designed and implemented OHS system will help to establish that the mining company exercised CMJ due care in relation to the safety of its workers.

SIMON FOXCROFT is a partner in Bennett Jones’ Edmonton office and spent time as in-house counsel for a Canadian coal mining company.

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