CIM Magazine May 2009 by CIM-ICM Publications

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CONTENTS CIM MAGAZINE | MAY 2009 | MAI 2009

NEWS 11

Federal government announces new CSR strategy Measures to help Canadian companies fulfill social and environmental responsibilities when operating abroad by P. Caulfield A sparkling part of Ontario history De Beers Canada donates diamonds for refurbished legislative mace by A. Gordon

The National Geographic article on oil sands mining An open-letter response to a report that portrays

MOU signed for Warren Township calcium feldspar project Avalon Rare Metals Inc. and the

the heavy oil industry in poor light by G. Winkel

Chapleau Cree First Nation reach agreement by M. Eisner

12 UPFRONT 20

Doing well by doing good Rockwell Diamonds’ social responsibility initiatives in

Getting it down to a fine grind OceanaGold uses IsaMill™ technology to

The world has BGAN Satellite communications keep even the most far-flung out-

South Africa by P. Caulfield streamline operations at Reefton by M. Eisner

26 28 32

22 24

4 | CIM Magazine | Vol. 4, No. 3

posts connected by R. Bergen Ask the experts University of Alberta mining engineering students learn decisionmaking skills from industry executives by P. Caulfield Turning fiction into reality Mining on the moon is fast becoming much more than a dream by G. Baiden Making a world of difference NRCan’s Assistant Deputy Minister Stephen Lucas discusses the global role of the Canadian mining industry by D. Zlotnikov

CANADA’S GLOBAL IMPACT L’IMPACT MONDIAL DU CANADA 37

Canadian mining’s worldwide reach An overview of the challenges involved and strategies deployed in keeping the industry’s global lead by D. Zlotnikov

La portée mondiale de l’exploitation minière canadienne Prendre un rôle de premier plan sur la scène mondiale

COLUMNS 49 50 52 54 55 58 61 63 64 90

Supply Side by J. Baird Canadians Abroad by R. Bergen MAC Economic Commentary by P. Stothart Eye on Business by R.L. Shirriff & A.E. Derksen Innovation by G. Winkel Student Life by M. Chowdhury HR Outlook by J.P. Chabot Parlons-en par I. Milord & R. Simard Mining Lore by R. Bergen Voices by L. Raitt

CIM NEWS 74

A breath of fresh air A profile of CIM Distinguished Lecturer Jan Nesset and his work by R. Pillo

Molybdenum, served with beer CIM Los Andes Branch rings out 2008 with a lecture and some ale by S. Tarbutt For the love of mining CIM Sudbury Branch hosts its popular annual Valentine’s Day ball by G. Darling

Bridging the gap A magnanimous donation strengthens the Canadian Mining and Metallurgy Foundation by R. Bergen

CIM 2008 membership survey highlights What members think of CIM’s service and performance

HISTORY 81 84

Butte, Montana (Part 2) by R.J. Cathro Platinum in Bophuthatswana by F. Habashi

TECHNICAL SECTION 86

This month’s contents

IN EVERY ISSUE 6 8 10 73 73 80 89

FEATURED MINE MINE EN VEDETTE 67

Golden opportunites Alexis Minerals Corp.’s Lac Herbin mine entered full production late last year by P. Diekmeyer

Occasions en or La mine Lac Herbin, propriété de la Corporation minière Alexis, est entrée en pleine production à la fin de l’an dernier

Editor’s Message President’s Notes / Mot du président Letters Welcoming new members Obituaries Calendar Professional directory

A nation of innovators am Canadian. Proudly! Though I wear many labels, that is one I feel most strongly about. There are plenty of reasons to be proudly Canadian, and this issue tells that story. The minerals industry is a shining example of how our fellow Canucks have built a strong reputation globally. As positive leaders. As innovative thinkers. As responsible operators. We can be confident of what we do, and of the people who came before us. Canadians have long been leaders in the global minerals industry, and as a group, we’re committed to maintaining that leadership. The Canada Mining Innovation Council (see interview with ADM Stephen Lucas, p. 32) will bring industry, government and academia together to achieve that goal. We’re a nation of innovators. Canadians have driven the industry’s leadership in corporate social responsibility. Globally, Canadian mining companies have set the bar when it comes to community involvement and responsible practices. Barrick and IAMGOLD are but two of the many companies improving conditions for local communities worldwide. Some of their stories are shared in this month’s feature article, Canada’s Global Impact, on page 37. Going forward, we have what it takes to maintain our country’s international reputation and to ensure continued success of our operations. We have the right people to make it happen. The Honourable Lisa Raitt, Canada’s Minister of Natural Resources, makes it clear in her editorial on page 90. I can’t wait to see the market recovery unfold, and to witness the further developments that will arise, developments I know will be driven in great part by my fellow Canadians.

Editor-in-chief Heather Ednie hednie@cim.org Senior Editor Angie Gordon agordon@cim.org Section Editors News and Features: Angie Gordon agordon@cim.org Columns and CIM News: Joan Tomiuk jtomiuk@cim.org Histories and Technical Section: Minaz Kerawala mkerawala@cim.org Technical Editor Joan Tomiuk Publisher CIM Contributors Greg Baiden, Jon Baird, Ryan Bergen, Louise Blais-Leroux, R.J. Cathro, Peter Caulfield, Jean Pierre Chabot, Mohsen Chowdhury, George Darling, Andrew E. Derksen, Peter Diekmeyer, Marlene Eisner, Fathi Habashi, Isabelle Milord, Robbie Pillo, The Honourable Lisa Raitt, Robert L. Shirriff, Régis Simard, Hal Steacy, Paul Stothart, Simon Tarbutt, Gord Winkel, Dan Zlotnikov Published 8 times a year by CIM 855 - 3400 de Maisonneuve Blvd. West Montreal, QC, H3Z 3B8 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($150.00); Non-members (Canada), $168.00/yr (GST included; Quebec residents add $12.60 PST; NB, NF and NS residents add $20.80 HST); U.S. and other countries, US$180.00/yr; Single copies, $25.00. Advertising Sales Dovetail Communications Inc. 30 East Beaver Creek Rd., Ste. 202 Richmond Hill, Ontario L4B 1J2 Tel.: 905.886.6640; Fax: 905.886.6615 www.dvtail.com National Account Executives 905.886.6641 Joe Crofts jcrofts@dvtail.com ext. 310 Janet Jeffery jjeffery@dvtail.com ext. 329

Sincerely, Heather Ednie Editor-in-chief This month’s cover IAMGOLD’s Rosbel gold mine in Suriname at sunset. Photo courtesy of IAMGOLD Layout and design by Clò Communications. Copyright©2009. All rights reserved. ISSN 1718-4177. Publications Mail No. 09786. Postage paid at CPA Saint-Laurent, QC. Dépôt légal: Bibliothèque nationale du Québec. The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.

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president’s notes Dear Members, This month’s issue is all about Canada’s global impact. Our resource industry is as influential as it is far-reaching. Canada is a producing nation, a hub for equity financing and trading, and a preferred hot spot for exploration. The mining industry contributed $42 billion to the national GDP in 2007 and accounted for 19 per cent of all Canadian exports (or about $81 billion). Exploration expenditure in Canada was $2.6 billion and, worthy of note, one in 20 exploration dollars worldwide was invested in the northern territories. It’s also interesting to note that even when exploration takes place outside of the country, much of the capital is raised in Canada. More than 1,300 mining companies from around the world are listed on the TSX alone — which equates to 35 per cent of the worldwide mining equity. Canadian mining and exploration companies operate all over the world. There is also a strong secondary industry in Canada with about 3,000 supplier companies providing technology, equipment and data to companies around the world. We should all be proud of what this industry has accomplished in Canada and beyond its borders. In an ever-changing world, we are a part of something bigger, something

global, and Canada’s influence within the worldwide mining industry is substantial. This is my last message to you as CIM president. I have enjoyed meeting and working with many of you over the past 12 months and my thanks goes out to the CIM team and volunteers for all their hard work, much of it behind the scenes. I would also like to take this opportunity to wish my friend and colleague, Mike Allan, all the best as our new CIM president. Finally, I would like to leave you with my encouragement to continue being involved in CIM and the CIM Foundation. It is also important to keep using this unique platform for knowledge sharing and networking for the sustainability of Canada’s resource industry.

Photo taken by Gary Mulcahy

Canadian mining — part of something bigger

All the best, Jim Gowans CIM President

Les mines canadiennes — une partie d’un grand ensemble Chers membres, Ce mois-ci, l’édition du Magazine porte entièrement sur l’impact global du Canada. Notre industrie des ressources a autant d’influence qu’elle a de portée. Le Canada est une nation productrice, un carrefour pour le financement par actions et l’inscription à la bourse; c’est aussi un point chaud préférentiel pour l’exploration. L’industrie minière a contribué 42 milliards de dollars au PIB national en 2007 et elle représente 19 pour cent de toutes les exportations canadiennes (soit environ 81 milliards de dollars). Au Canada, les dépenses en exploration ont atteint 2,6 milliards de dollars; il faut mentionner qu’un dollar d’exploration sur vingt à travers le monde a été investi dans les territoires nordiques. Il est aussi intéressant de noter que même lorsque I’exploration a lieu à l’extérieur du pays, une grande partie des capitaux a été levée au Canada. La Bourse de Toronto (TSX) compte à elle seule plus de 1300 compagnies minières de partout au monde – ce qui représente 35 pour cent des valeurs minières mondiales. Les compagnies minières et d’exploration canadiennes exploitent partout à travers le monde. Le Canada comporte aussi une forte industrie secondaire d’environ 3000 compagnies fournissant de la technologie, des équipements et des données à des compagnies à travers le monde.

Nous devrions tous être fiers de ce que cette industrie a accompli au Canada et à l’étranger. Dans ce monde en perpétuel changement, nous faisons partie d’une entité plus grande, d’une entité mondiale, et l’influence du Canada au sein de l’industrie minière mondiale est importante. Ce message constitue mon dernier en tant que président de l’ICM. J’ai vraiment aimé vous avoir rencontrés et d’avoir travaillé avec plusieurs d’entre vous au cours des 12 derniers mois; j’adresse mes sincères remerciements à l’équipe de l’ICM et aux bénévoles pour tout leur travail acharné, dont une grande partie a été effectuée en coulisse. Je voudrais aussi saisir cette occasion pour souhaiter mes meilleurs vœux à Mike Allan, un ami et collègue, en tant que nouveau président de l’ICM. Finalement, j’aimerais vous laisser avec des encouragements à persévérer dans votre implication avec l’ICM et la Fondation de l’ICM. Il est important aussi de continuer à se servir de cette plate-forme unique de partage et de réseautage pour assurer la durabilité de l’industrie canadienne des ressources. Mes meilleures salutations, Jim Gowans Président de I’ICM May 2009 | 1

letters A job well done I just received my March/April issue of CIM Magazine and have read the Q&A article on Professor Jim Finch — a very nicely done story. I have known Jim Finch, as well as the details of his research over the years, and your writer, Minaz Kerawala, is to be congratulated on capturing the essence of both the man and his contributions, as well as his insights, very well. Sincerely, Jan Nesset, P.Eng, F.C.I.M. NesseTech Consulting Services Inc.

Props for processing Congratulations on the contents of the latest CIM Magazine. Finally an issue that emphasizes processing instead of exploration or mining. Keep up the good work! Special appreciation to Nathan Stubina for including the “Sulphide Spotter” in his write-up. Thank you, Gus Van Weert Mining Consultant and President ORETOME Ltd.

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news Federal government announces new CSR strategy CIM to host Centre of Excellence Canada’s Minister of International Trade, Stockwell Day, recently announced new measures to help Canadian mining and oil and gas companies meet their social and environmental responsibilities when operating abroad. The four-fold strategy will focus on: • Creating a new Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor to help resolve social and environmental issues relating to Canadian mining and oil and gas companies operating abroad. • Supporting a new Centre of Excellence as a one-stop shop to provide information to companies, non-governmental organizations and other relevant parties. • Continuing Canadian International Development Agency (CIDA) assistance to foreign governments to develop their capacities to manage natural resource development in a sustainable and responsible manner. • Promoting internationally recognized, voluntary guidelines for corporate social responsibility performance and reporting. In an announcement, Day said, “Canadian companies are often instrumental in bettering the lives of people in the communities in which they operate. These complementary initiatives will provide the tools, guidance and advice they need to meet and exceed their obligations with respect to corporate social responsibility.” The federal government has already taken steps to promote and support CSR abroad, including initiatives undertaken by the Department of Foreign Affairs and International Trade, CIDA and Natural by Peter Caulfield Resources Canada. Canada has also held discussions with free trade agreement partners on how to address CSR during negotiations. In the future, these strategies will be expanded to include, among other programs, initiatives to enhance the capacities of developing countries to manage the development of minerals and oil and gas, and to channelize the benefit from these resources to reducing poverty.

CIM to host Centre of Excellence CIM recently agreed to host the new Centre of Excellence, and is well-positioned to assume that role. The Centre will be a forum through which resource extraction industry stakeholders can provide CSR tools and information to clients in industry and government in Canada and abroad. It has also been suggested that the Centre could serve as a source of technical advice to CIDA to assist it in enhancing the capacities of developing countries to manage their natural resources.

“In recent years, CIM has built a foundation on the development of guidelines and best practices in the area of resource/reserve valuation,” explained CIM executive director, Jean Vavrek. “We have also identified areas where we felt we can be more proactive, including safety, outreach, innovation and CSR. In our latest strategic plan, CIM discussed how the Internet could be used to fulfill these goals most effectively.” Vavrek pointed to CIM’s Mining in Society outreach efforts as a successful benchmark program on which future efforts could be modelled. “We look forward to bringing a wide spectrum of interested parties together to provide this very valuable window for the world.” The functions of the Centre of Excellence will be: • To develop and disseminate CSR-related information and tools for clients in government and industry. • To develop CSR information packages and to actively sponsor business briefings. • To develop an inventory of Canadian company CSR contacts, activities and best practices. • To create a web-based public platform for companies and Canadian CSR practitioners to share experiences and best practices. It is expected that the efforts of the Centre will initially be focused on high-priority sectors and issues, such as the mining and oil and gas sectors, and developing materials for high-risk countries.

MAC gives strategy its thumbs-up Responding to the federal government’s CSR announcement, the Mining Association of Canada (MAC) said it appreciates the improved clarity the strategy gives to the government’s expectations for the resource extraction industry’s performance on human rights and the environment. MAC was one of several organizations that contributed to developing the new CSR strategy through its participation in the National Roundtables on Corporate Social Responsibility and the Canadian Extractive Sector in Developing Countries. MAC president Gordon Peeling said: “The Government of Canada has done a good job in responding to some difficult issues, such as human rights and security, which were raised by the National Roundtables on CSR.” Peeling said the strategy’s focus on capacity building “provides an essential building block in helping countries achieve their poverty reduction goals and development objectives through responsible development of their natural resources.” CIM May 2009 | 11

news A sparkling part of Ontario history Photo by Ingrid Hann

De Beers Canada donates diamonds for refurbished legislative mace

Two spectacular diamonds serve as the mace’s crowning glory.

Two diamonds from the De Beers Canada Victor mine have been installed in the legislative mace, presented to Parliament in a special ceremony at the Ontario Legislature on March 24. The by Angie Gordon mace was scheduled to undergo replating and repair when the House adjourned for the winter recess in December 2008. The setting, designed by De Beers jewelry award winner, Reena Ahluwalia, features one cut and polished diamond and another in its natural rough form. A third polished stone was donated for a display to be created later this year in the Ontario legislature building. The three

diamonds were among the first commercially produced from the Victor mine, the province’s first diamond mine. “The De Beers Canada Victor mine is extremely proud of the superior quality diamonds we produce and equally proud to be able to share them with the people of Ontario in this historic way,” said Jim Gowans, De Beers Canada president and CEO. “As Ontario’s first diamond mine, we will continue to set high goals for our team to ensure we maximize the benefits of this world-class operation for our employees, our community partners and the people of Ontario.” No business may be conducted in the House unless the mace is present. While the Speaker is officiating, it must be in its proper place on the table before him, with its “crown” pointing towards the government of the day. This is actually the Ontario Legislature’s third mace, which has a long and colourful history. The first mace, which was introduced to Upper Canada’s first Parliament in 1762, was captured by the Americans during the War of 1812, and not returned until 1934 by U.S. President Franklin D. Roosevelt. It is still available for public viewing in the main lobby of the Legislative Building. The second mace was stolen in 1849 during a riot in Montreal, but was quickly returned. However, it was eventually lost to fire in 1916. The current mace was created in 1867, and was last refurbished over 100 years ago in recognition of King Edward VII’s ascension to the throne when Queen Victoria died in 1901. CIM

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news The National Geographic article on oil sands mining An alternative view The following open letter was written in response to an article and accompanying photo essay that appeared in National Geographic Magazine in March, 2009 entitled: “The Canadian Oil Boom — Scraping Bottom.” * Photo courtesy of Syncrude Canada Ltd.

or of the 300 bison grazing on these lands, or of the reconstructed watersheds that win awards for environmental innovation and cutting-edge reclamation research? What in the article shows a thriving and vibrant community in Fort McMurray, a safe environment for children, quality health care, educational opportunities, and a place that people are proud to call home? Fort McMurray provides a setting that rivals many cities in terms of quality of life for its residents. What is communicated to explain the commitment of industry leaders and the vision that inspired the development of new and innovative technologies to synergistically improve both environmental and economic perMeasuring tree growth to monitor reclamation success on the slopes of Syncrude’s Southwest Sand Storage formance in the oil sands? From an environmental standpoint there are imporWhat a disappointing article on the oil sands. tant considerations to share. Actual land disturbance to Through the years we have grown to appreciate the date of the North American boreal forest totals less than quality of this magazine’s efforts to showcase the world, a couple of hundredths of one per cent — an area less displaying the diversity of its people, portraying the forces and complexity of nature, and sharing the emerg- than that of either of the two nearest major cities, ing research that seeks to understand our rich history Edmonton and Calgary. Also, it should be borne in mind and origins. Now, surprisingly, this article departs from that significant areas have already been reclaimed as the publication’s usually sound efforts to provide a bal- operations progress and all disturbed land will be anced view: one that considers both challenge and reclaimed as operations conclude. Syncrude Canada Ltd. opportunity. The oil sands has recently been the target alone has planted some five million trees and shrubs, of misinformation and flawed representations, and the reclaimed 4,500 hectares (22 per cent) of disturbed current article has unfortunately worked to favour these lands, recycles 88 per cent of its process water, has sigdistorted perspectives. nificantly reduced energy intensity by researching and I, like so many, have lived and worked in Alberta, pioneering low-temperature extraction technologies, has Canada’s Athabasca oil sands, and the cited article does a spent $100 million on reclamation since 2003, and will real disservice to the people, communities and industry in spend an estimated $1.6 billion to reduce sulphur dioxthe region. ide emissions by 60 per cent. While the editorial in question provides some balance From a community perspective, the people in the region in its written content, it contains descriptions that are demonstrate their care and commitment through signifimetaphorically damaging, and the accompanying photo cant volunteerism and often contribute more than any essay ignores the reality of responsible development that is other community in Canada to annual United Way camavailable for all to understand. Where, for example, are the paigns, based on per capita donations. There are significant pictures of reclaimed land returned to a boreal forest state, efforts to support education regionally and provincially, and 14 | CIM Magazine | Vol. 4, No. 3

news equally significant is the work done to encourage Aboriginal education, employment and business development. It has been a wonderful experience to work with an army of community volunteers that helps those in need of support, provides an impressive array of wholesome activities for young and old, and makes improvements to the utility and appearance of local facilities. Additionally the air quality in Fort McMurray is also rated as good or better than that in Edmonton, Calgary or Toronto. Contrary to the impression portrayed in the article, this is truly a great place to work and raise a family. The oil sands also contribute positively to the economy of Canada. Within the confines of the minimal land disturbance described previously comes some 50 per cent of Canada’s energy requirements. There are approximately a quarter of a million jobs linked to the oil sands, and development there in the period from 2000 to 2020 has the potential to generate an estimated $123 billion for provincial and federal governments in the form of royalty and tax revenues. Contrary to the article, industry leaders whom we have had the pleasure and privilege of working with are also genuinely focused on the future, and have supported education, community investment, regional infrastructure working groups and environmental consortiums to ensure responsible development of the oil sands. This is the story that also needs to be told on behalf of the people, communities and industry that have worked to develop the oil sands into the success it is today, providing a safe and sustainable energy source serving our society now and into the future. CIM

The Canadian Mining Hall of Fame C A L L

F O R

N O M I N A T I O N S

Candidates for induction into the Canadian Mining Hall of Fame must be individuals who have demonstrated outstanding lifetime achievements to the benefit of the Canadian and/or world minerals industry in one or more of the following categories: • Exploration • Building the corporation • Technical contribution • Supporting contribution • Mining in society Anyone may nominate a candidate but nominations must be submitted through a sponsor or associate sponsor (see list below). June 1, 2009: Deadline for nominator of proposed inductee to contact a sponsoring organization June 30, 2009: Deadline for nominating material to be delivered to sponsoring organization for review July 20, 2009: Deadline for sponsoring organizations to deliver nomination package to the Canadian Mining Hall of Fame January 14, 2010: 22nd Annual Induction Dinner Further information is available at www.halloffame.mining.ca under Criteria for Selection or at Tel.: 519•599•3050 or Email: cmhf.info@sympatico.ca Sponsors Canadian Institute of Mining, Metallurgy and Petroleum • The Mining Association of Canada • The Northern Miner • Prospectors and Developers Association of Canada Associate Sponsors Association for Mineral Exploration British Columbia • Mining Association of British Columbia • Ontario Mining Association • Quebec Mining Association • Saskatchewan Mining Association

Gord Winkel Fort McMurray, Alberta Chair, Surface Mining Association for Research and Technology * Kunzig, R. (2009, March). The Canadian Oil Boom — Scraping Bottom. National Geographic. Photography by Peter Essick.

May 2009 | 15

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news MOU signed for Warren Township calcium feldspar project Company awaits provincial operation permit before moving forward Avalon Rare Metals Inc. and the Chapleau Cree First Nation (CCFN) signed a Memorandum of Understanding (MOU) on March 3 regarding the co-operative development of the Warren Township Calcium Feldspar project near Foleyet, Ontario, 125 kilometres west of the city of Timmins. The project consists of three claims totalling 727 hectares located in the traditional territory of CCFN and other local First Nations and Aboriginal groups that are represented by CCFN. Under the terms of the MOU, CCFN has agreed to support the development of the project if two conditions are met: CCFN and other First Nations and Aboriginal groups with an interest in the land benefit equitably from the operation; and environmental risks associated with the project’s development, operation and closure are deemed acceptable. "We are pleased to have the support of CCFN and other local Aboriginal groups, as well as the community of Foleyet, in advancing the project and look forward to developing mutually beneficial partnerships," commented Avalon's president, Don Bubar, in a February press release. However, in a recent telephone conversation, Bubar said that the project has been stalled because the province’s Department of Natural Resources has said that it will only issue an operation permit for one- third of the by Marlene Eisner 727 hectares. “This particular mineral is regulated under the Aggregate Resources Act and administered by the Ministry of Natural Resources,” explained Bubar. “They are only giving us a permit to cover a portion of the total resources and that creates a big problem.”

Previous work on the project demonstrated the presence of a significant resource of high-purity calcium feldspar amenable to a low-

cost, small-scale quarrying operation, which would include the development of a processing plant near a major railway line at Foleyet. This

May 2009 | 17

news would facilitate shipping the product to potential markets in southern Ontario and the northeastern United States. Capital costs are estimated to be approximately $10 million. Aside from providing jobs to the community of Foleyet, the project will have far-reaching environmental benefits for the province. According to Bubar, calcium feldspar is used in fiberglass manufacturing where it has been demonstrated to reduce energy consumption and CO2 emissions, which is a primary goal of the province's proposed new Green Energy legislation. As well, the fiberglass products are used in manufacturing energy-efficient composite construction materials for wind turbines, which is another major green energy initiative being promoted by Ontario. The company has an anchor customer in a glass company and is currently looking at other applications for the mineral in ceramics and as a potential mineral filler in certain types of industrial papers.

Tests on the site have shown no negative environmental factors and although the company has applied for a license to cover the entire 727 hectares where the mineral lies, the ministry has said they will only issue a permit for one-third of the area. Bubar said the company needs to have access to the whole calcium feldspar site to attract and keep its customers. “In order to enter into a supply contract, customers want to know that if they commit to this product, then we will be able to supply the mineral in the long term,” he explained. “By only giving us a permit for part of the resource, we can’t demonstrate that, which compromises the opportunity for us to move forward with the project. The customer and the financial institution want 100 per cent certainty that they [the government] will extend the coverage.” As a compromise, Avalon said it requested that a permit be granted for

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18 | CIM Magazine | Vol. 4, No. 3

the entire site, but with provisions that would require the company to reclaim as they move along in development. “So far they haven’t agreed with it,” commented Bubar. Contacted by telephone, Chapleau Cree First Nation Chief Keith Corston said he “champions Avalon” for their co-operative nature in the Warren Township project. “Don actually came to us and asked us if we had a concern,” said Chief Corston. “Warren Township is in our core territory, and we said we are interested in a MOU, but that it has to be culturally positive, have more in it than just jobs, include a revenue-sharing component, and be environmentally sound.” Chief Corston continued by saying that when he sat down with Avalon, the government’s concerns were discussed, and it was decided that an equitable solution would be for the company to work on no more than 60 hectares at a time and reclaim that area before proceeding to work on the next 60 hectares. “I can tell you that I was satisfied then that the integrity of Mother Earth was being looked after,” he added. With the Chapleau Cree First Nation’s and Avalon’s will to work together to see this project come through, the major sticking point right now is the operation permit. “When you look at what the mineral is being used for, it’s kind of ironic that there are barriers of development by the government that are being advocated by the new Green Energy Act,” noted Bubar. “Hopefully, at the end of the day, that sort of irony will register at some higher form of government, but in the meantime, I don’t think we’d be able to go ahead with the project. Right now, there’s also the economic recession in terms of access to capital, and our customer’s market has seen some decline, but that will turn around. Sooner or later the government will want to see the province’s footprint reduced.” CIM

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upfront SUSTAINABILIT Y by Peter Caulfield

Doing well by doing good Photo courtesy of Rockwell Diamnods Inc.

Rockwell Diamonds’ social responsibility initiatives in South Africa ancouver-based Rockwell Diamonds Inc. has three operating alluvial diamond mines in South Africa as well as an operation on care and maintenance and a pipeline of brownfield projects. Rockwell is notable not only for being the second-largest publicly listed diamond producer in South Africa, but also for its socially responsible programs in that country. Headed by president and CEO John Bristow, Rockwell has four properties in Northern Cape Province: Holpan and Klipdam, which are some 70 kilometres northwest of Kimberley, the capital of the province, and Wouterspan and Saxendrift, which are about 160 kilometres southwest of Kimberley. Due to poor market conditions, Wouterspan is currently on care and maintenance.

Addressing a legacy of injustice Years of legally sanctioned Apartheid have left a legacy of poverty and underdevelopment in South Africa. Until 1994, when Apartheid was replaced by a democratic legal and political system, mineral rights in South Africa were predominantly in the hands of large mining companies, largely owned and controlled by Whites. After 1994, the ownership of mineral rights became vested in the State. To acquire and hold such rights today, a mining company needs to have a Black empowerment partner, who must have a share of at least 26 per cent in the business and be comprised of a broad-based group, not a single individual. These changes are part of a government program called Black Economic Empowerment (BEE), which was launched to redress the inequalities of Apartheid by providing previously disadvantaged non-White groups economic opportunities that were not available to them in the past. Rockwell’s BEE partner is Africa Vanguard Resources (AVR), which is led by mining engineer Sandile Zungu. AVR holds 26 per cent of Rockwell’s prospecting and mining rights and the company holds the remaining 74 per cent.

Good works make good sense Going beyond its government-stipulated obligations, Rockwell has developed a number of innovative programs that benefit its African mine-site employees, their families and the communities in which they live. Bristow explained why Rockwell decided to undertake its program of good works. “It’s just the right thing to do,” he said. “It is part of our commitment to creating a better allround environment in which we operate. I’ve had a long career in mining and it’s been good to me. It was time to give something back.” In one such initiative, since 2007 Rockwell has operated a program that educates employees and their families about 20 | CIM Magazine | Vol. 4, No. 3

The play park is the only dedicated recreational facility available for the 1,200 primary school children in the community.

the dangers of HIV/AIDS and the benefits of self-protection. Led by Rockwell’s health and safety manager Iris Ross, it also provides counseling and, where possible, directs participants to appropriate screening and treatment. “HIV/AIDS afflicts many South Africans,” said mineral resource manager, Glenn Norton. “About 20 per cent of the population is infected with the virus, and that includes Rockwell’s employees and the people in the communities in which they live.” Norton admitted that it is difficult to gauge the results of the program so far. “In South Africa, it was traditionally taboo to talk about things such as AIDS and sex, but attitudes are changing and there has been slow but steady progress towards making people more aware of the disease and its consequences,” he said. “There seems to have been a decrease in AIDS-related mortality in the past few years.” Another upshot of Rockwell’s good works is the Windsorton Play Park, which the company built in late 2007 in a part of Northern Cape Province that is challenged by alcohol and drug abuse and their associated problems. One hectare (two-and-a-half acres) in area, the park has a playground for children and barbeques and picnic tables for family and community gatherings. There are also plans to build a clinic adjacent to the park that would offer basic medical services and dispense

upfront

Photo courtesy of Rockwell Diamnods Inc.

SUSTAINABILIT Y

Workers at Bokomoso Bricks loading a palette of completed bricks.

HIV/AIDS-related information and advice and would be staffed by the South African Ministry of Health. Rockwell also created non-mining employment opportunities with the 2006 founding of the Bokomoso Brickworks at the site of the Holpan mine. The spin-off company (whose name means “working together”) uses the large quantities of sand that are created at the mine. Rockwell provided the funding for a brick-making machine and a new business was born. “Bokomoso Brickworks employs 22 people from a poor local community,” said Norton. “Eighteen are women — the wives of mine workers — and four are men, who do the heavy lifting.” Once the start-up capital has been paid off, all of the profits from the operation will go to the local community, which will decide how to best spend them. Many district councils in the Northern Cape Province are poor and lack the money and equipment to maintain their roads and highways properly. Rockwell helps to keep local infrastructure in shape by sending out its own equipment from the mines to maintain the roads. “That makes us the de facto Ministry of Transportation in some districts,” Norton observed. Rockwell also supports a miningrelated heritage project in Northern Cape Province. It provides and maintains the signage at Canteen Kopje, site of the 1860s discovery of alluvial diamonds at Klip Drift, today the site of the town of Barkly West. The site is 35 kilometres

northwest of Kimberley and is one of the first alluvial diamond mines in South Africa. “It’s a monument of important significance to Rockwell, the mining industry and to South Africa,” claimed Norton. “Our mines at Holpan and Klipdam are only 30 kilometres away.” The area features not only historical tailings heaps, but also evidence of early homo erectus, San people, and unusual trees and plants. Finally, in 2008, Rockwell donated a school bus to Niekerks Hoop Primary School. Located 100 kilometres west of Wouterspan, the school is in an out-of-the-way rural area and attended by the poor. Bristow admitted that the results of the company’s program are hard to quantify and measure, but he is certain that the benefits are significant. “We’ve developed good relationships with the communities where our employees live,” he said. “Those relationships make it easier to deal with local authorities, regulators and other stakeholders down the line. There are important benefits to being proactive. We’ve learned that Rockwell can benefit from our good works, because they give us tangible accomplishments to point to when we’re pitching a new project to local authorities. They also increase our credibility with socially conscious funders and investors.” CIM

May 2009 | 21

upfront PROCESSING by Marlene Eisner

Getting it down to a fine grind hen OceanaGold expanded its gold operations in 2007 to include the Reefton deposit, it was confronted with an interesting challenge: how to process the mine’s refractory gold ore deposit. The company had been operating an open-cut mine at its Macraes site at east Otago in New Zealand since 1990, processing the ore on site. However, the situation was slightly different at the Reefton goldfield. Although ore from that mine is treated at an adjacent 1.0 Mtpa plant, the gold concentrate is sent 800 kilometres by rail to the Macraes pressure oxidation plant for final processing. This proved to be more of a challenge than initially expected, as regrind limitations at Macraes meant the mill could not handle all the ore from Reefton. Without adequate regrinding ahead of pressure oxidation, gold recoveries would be lower than forecast.

Photo courtesy of Xstrata Technology

IsaMill™ offers OceanaGold flexibility and efficiency

The IsaMill (blue) is in the front, with the Jameson Cell (green) at the top. (Prominent Hill, Australia)

Finding the right solution Processing at Macraes utilizes a grinding and flotation circuit employing SAG and ball mills, followed by sulphide flotation, fine grinding, a pressure oxidation autoclave and then a carbon-in-leach circuit for the gold extraction. While there was some capacity in the autoclave to treat Reefton product, the mill did not have the regrind capacity to handle the mine’s ore. That is when OceanaGold began to look for additional milling equipment to handle the Reefton product for final processing. The company wanted a mill that could achieve a very fine grind size, was power and energy efficient, and had a low capital cost. Ideally, they also needed something that was simple to operate with a small layout, as space limitations restricted the use of a lot of ancillary equipment normally associated with other grinding methods. Using a traditional ball mill would have required a set of cyclones, pumps for large re-circulating loads and thickeners, which would not have fit at the site. That is when they began to consider the IsaMill™, marketed by Xstrata Technology, and developed with Netzsch.

If the mill fits “The IsaMill has a lot of benefits, especially for flotation,” said Greg Rasmussen, principal metallurgist at Xstrata Technology, Canada. “The grind is finer and with the inert grinding, you can improve the kinetics in leaching and flotation circuits. Depending on the application, you can grind down to as small as seven microns with a 22 | CIM Magazine | Vol. 4, No. 3

float of 92 to 96 per cent recovery, but the action inside the mill produces a sharp discharge sizing curve, with minimal slimes, even at fine product sizes. As you put more power into it, the IsaMill™ particle size distribution curve steepens without over-grinding.” The grinding action in the IsaMill™ is based on high intensity stirred milling, in which the shell remains stationary, while inside, discs rotate on a central shaft at speeds up to 20 metres per second. An internal classifier ensures only fines pass out of the mill while the oversize and media stay in the mill for further regrinding. Compared with conventional grinding, the IsaMill™ reduces the energy usage, media cost and capital cost of fine grinding. Just as importantly, the processing advantages of inert grinding greatly improve metallurgical performance in leaching and flotation circuits, as compared with conventional steel media. Feed sizes on some applications are as coarse as F80 of 300 µm, while product sizes can be as low as 7 µm (P80) for materials including lead and zinc sulphides, copper sulphides, nickel concentrates, platinum concentrates, industrial minerals, iron oxide and refractory gold concentrate. Sequential grinding in the IsaMill™ does not flatten the product size distribution like other grinding methods. Instead, it sharpens it, even in an open circuit, which can have important implications for energy efficiency and downstream processing such as filtering and pumping. The combination of tight size distribution, small footprint and inert media has profound implications for circuit design. Mills can be easily distributed throughout a

upfront PROCESSING

flotation circuit, grinding only those particles that need it, and producing a tight size distribution (without cyclones), ideal for subsequent flotation. The use of inert media means that less reagents are required downstream of the mill, with the flotation chemistry better to control. Similarly the tight size distribution is crucial in leaching applications, where recovery is usually determined by the coarser end of the size distribution (best measured by P98 or P95, not P80).

would mean we would have needed at least three times the ground area for the equipment.” They would also have needed a full-time operator. With the IsaMill™, the operator who looks after the mill also runs the autoclave. From an operational point of view, the mill has proven to be a winner as well. “It’s quite simple,” said Carr. “Most of the operational and maintenance challenges over the last two years haven’t been related to the IsaMill™. It’s been related to the concentrate handling, not in getting the mill to grind.”

Facing challenges pays off “As a company, OceanaGold has generally been very open to adopting new technology to gain an advantage,” said Dave Carr, corporate metallurgist at OceanaGold, adding that the Macraes site was one of the first to go with flash floatation and 300 m3 flotation cells. They were also the first to purchase the IsaMill™ M1000 model from Xstrata Technology, which features a 500 KW motor. “It certainly has paid off,” said Carr. “One of the challenges of the Reefton project was the concentrate sizing. The company planned for 70 to 80 micron F80, but in the design we allowed for it to go coarser. The IsaMill™ gave us the flexibility to treat a range of feed sizes with the same machine.” Such flexibility was a key factor in the purchasing of the IsaMill™. The feed size of the concentrate from Reefton ranges between 90 and 180 microns and 17 to 26 per cent sulphur. The IsaMill™ allows OceanaGold to run the mill for a wide range of pulp densities. Additionally, the speed and power draw can be changed, which means the mill can maintain the same feed rate and product size, regardless of how coarse the feed is. Another advantage is that the mill runs in a single line open circuit to achieve the final product. Using a ball mill in this situation would have required a balsa mill, cyclones, large pumping, and re-circulating load and product thickening. “With the IsaMill™, we were able to re-pulp and regrind the concentrate quickly,” continued Carr. “We receive it and it gets pumped through the mill in three minutes.” What comes out at the other end, he said, is the right size for the autoclave. “It’s very fast, especially since what emerges is the final product size and density, and therefore is ready to go. The concentrate that we are feeding it has an F80 of 180 microns in size and the IsaMill™ is able to get it down to that 15 to 18 micron range. In a conventional mill, we would struggle to do that. We may even have to have made it a two-stage grinding operation.” The operating layout required for the IsaMill™ works well also. Since it is a horizontal, rather than vertical piece of equipment and does not require cycloning equipment, less space is needed for setup. “We’re treating 10 tonnes per hour,” reported Carr. “To do it with a ball mill, with its associated cycloning and thickening equipment,

A win-win situation For Rasmussen, the new Xstrata technology means a move in the right direction, especially in today’s ecoconscious culture. “Basically, the IsaMill™ can be used for most ore types,” he said. “If you can reduce the amount of power you need, you will drastically reduce your cost. There are very strong incentives for customers to use this.” Carr agreed, claiming: “When we were looking for new equipment, we looked for one with the best power efficiency, and the IsaMill™ left everything else for dead.” OceanaGold’s decision to explore a new technology has turned an interesting challenge into a profitable solution. CIM

2502 Elm Street, Regional Road 35, PO Box 670 STN B, Sudbury, ON P3E 4R6 Phone: 705.682.0671 email: info@mansourmining.com

www.mansourgroupinc.com

May 2009 | 23 MansourMiningSupply.indd 1

4/20/09 10:41:24 AM

upfront TECHNOLOGY by Ryan Bergen

The world has BGAN Satellite communications network connects the globe

24 | CIM Magazine | Vol. 4, No. 3

Photo courtesy of Inmarsat

ifty years ago, a crackling broadcast of U.S. President Eisenhower wishing radio listeners “Peace on earth and goodwill toward men everywhere” beamed around the world. The message, transmitted via satellite, might have been as effectively related in a greeting card, but the choice of medium hailed a new era in communications. At the time, only Ike — the leader of the “free world” — had access to it. Over the decades, that accessibility has trickled down to millions of users. With very little effort, messages flash to mobile devices through networks across the globe. However, those working beyond these webs, such as surveyors, prospectors and explorers, The terminals simply need an unobstructed line to the regional satellite to establish a connection. have not been spared the inconvenience and inherent expense required to receive Phoenix soaring and relay field data to laboratories and head offices. The new technology has paid immediate dividends to Toronto-based Phoenix Geophysics. Its magnetotulleric Where in the world survey division purchased some BGAN terminals and Almost a half-century after Eisenhower’s first public now subscribes to Inmarsat’s satellite service. Ron transmission, a global communications network is now a Goulard, a technology officer for Phoenix, said that the reality. The broadband global area network (BGAN) was advantages offered are clear, including: the requirement activated globally in February, 2009 by the satellite commu- of fewer people in the field, more efficient troubleshootnications company Inmarsat. The constellation of three geo- ing, faster transmission of data, and transportation time stationary Inmarsat-4 satellites enables subscribers with a and costs savings. portable terminal to establish a satellite connection for their “Before we had the quality assurance that the BGAN laptop computers, which can be used to send and receive now affords us, we often wouldn’t be aware, for example, data, emails, phone calls, photos and video, from nearly any- that a sensor had gone bad and was recording zero data or where on the globe. extraneous data,” explained Goulard. “Sometimes it would Until February, the communication service has been take two or three days before we could identify a defective available for much of the planet; however, with the addition sensor. In the meantime, we might already have travelled of the third satellite, it enabled the network to cover 95 per to several other sites during that time. That would have cent of the earth. Though the coverage does not extend meant three or four days of lost data and a lot of unnecesentirely to the poles, it does serve the Canadian Arctic. sary legwork. Now, we can identify when there is a probFor the mining industry, the timing could not be better. lem right away.” Closing distances and cutting transportation costs can According to Goulard, not only are there fewer boots reduce the financial risk of exploration that is hard to bear, spending less time on the ground, the cost of filling them with valuable experts has become unnecessary. “Traditionally, even in the best of times.

upfront TECHNOLOGY

when you begin a survey you choose sites based on data from a map,” he explained. “However, sometimes when you actually get on the ground, you find that you may have to move the site 200 metres because there is a lake or some obstruction on the site that did not show up on the map.”

Making connections Much like the cellular phone market, a number of communications’ manufacturers produce the small, lightweight satellite terminals that enable someone to access the Inmarsat network, and require very little expertise. “If there is a mountain ridge and you’re at the bottom of the valley, or if you’re in a jungle and the canopy is thick, that could be a problem; but if you have a clear line of sight, you’re pretty much gold,” said Goulard. “They are pretty much waterproof and heatproof,” added Inmarsat’s Simon Curran, of the BGAN terminals designed for field work. “They were designed for the military, so they are used to being used and abused.” Solarpowered battery rechargers can ensure a steady supply of power for even long trips. Unlike the preceding generation of VSAT technology, cumbersome dishes, and the trained specialist to install them, are not required. The computer connects to the ter-

minal through a simple USB port. The data uses standard Internet Protocol (IP) and connects at speeds of up to 492 kilobytes per second. That may not be as fast as a standard office connection, but it demands less patience than spending five hours bouncing around in the back of a truck to reach a reliable communications link. Currently two companies, Stratos and Virgin Technologies, are licensed to offer subscriptions to the Inmarsat network and a variety of satellite terminal options through retailers across the country; other distributors are expected to be licensed shortly. Service contracts are tailored to suit various uses, and prices depend upon the amount of data transferred over the connection and the volume in which the bandwidth is purchased. Both standard IP and streaming IP (a guaranteed data rate required for smooth videoconferencing) are available, along with phone and text messaging capabilities. A software application included in all BGAN terminal options also helps users position terminals in the field, manage the speed of their connection and monitor their usage. With the introduction of BGAN, President Eisenhower’s propitious message takes on new significance, as people truly “everywhere” are offered the peace of mind and practicality that accompanies global connectivity. CIM

Giving Back A billion-dollar partnership Suncor Energy Inc. has achieved the milestone of spending $1 billion acquiring goods and services from Aboriginal business partners in the Wood Buffalo region. Rick George, president and CEO of Suncor, acknowledged: “By tapping into the regional skills and experience of these communities, we’re making progress on a number of shared economic, social and environmental goals.” Gerry Gionet, president and CEO of Aqua Industrial Ltd., a local Métis entrepreneur who has long been one of Suncor’s suppliers, said of his business relationship with Suncor: “I found that Suncor’s vision was similar to mine. We have built a strong relationship that has taught me better business practices, and I use these skills and experience to be a mentor to others in the community.”

May 2009 | 25

upfront OUTREACH by Peter Caulfield

Ask the experts U of A mining engineering students learn decision-making skills from industry executives and got into the real world of decision-making, something he felt the mining engineering curriculum needed to address more. “Students need to learn there are many intangible considerations in decision-making,” he said. “I want to make them think about what types of information they need, where that information is and how to obtain it. Buying a facility or a piece of equipment in the Northwest Territories or Northern Alberta is different than when it is in Africa or New Guinea.”

Expert input

Guest lecturer, Jim Carter (former president & COO of Syncrude) addressing U of A class.

n December 2008, Tim Joseph, associate professor of mining engineering at the University of Alberta’s School of Mining and Petroleum Engineering, was faced with a challenge. He needed to create a final-year course in mineral economics in a hurry. The professor who normally taught the course had gone on leave and it fell to Joseph to take over her course, which was set to commence the following month. “I hadn’t taught mineral economics for ten years and I didn’t have any materials on hand,” explained Joseph. Out of that necessity was born the invention of an innovative course that invites mining experts with experience in different facets of the industry to address the students and introduce them to the real-world challenges of decisionmaking. The executives’ participation exposes the students to the mining industry as it actually is and gives them a learning experience beyond the conceptual, previously received from their text books.

Time for a change Joseph said the circumstances were ripe for a novel approach to teaching mineral economics to mining engineering students in the last semester of their final year. “There was an opportunity to take a new approach to teaching the subject,” he said. He was assisted by retired mining engineer Jim Popowich, former president and CEO of Elk Valley Coal (now part of Teck Coal), and past president of CIM. Joseph said he wanted to create a course for his 25 final year students that went beyond number-crunching 26 | CIM Magazine | Vol. 4, No. 3

Joseph invited 10 mining industry experts to address the class. The first speakers were Popowich and Michael O’Shaughnessy, senior financial analyst with Teck Coal in Calgary, who spoke for one hour on commodities and commodity cycles. “We discussed how all commodities are subject to cycles,” Popowich said. “We also talked about how government regulations can affect commodity cycles.” Popowich and O’Shaughnessy explained that commodity cycles can actually be learning opportunities. “During down cycles you really learn how things work and what drives costs,” Popowich said. “Any down cycle is a time for learning, because history really does repeat itself in commodity cycles.” Popowich spoke again later in the course about operating costs and how to minimize costs and maximize profit. He also discussed the importance of communicating clearly with local communities, which are important sources of labour and supplies to mining companies. Among the other speakers was Chuck Edwards, director of metallurgy at AMEC Americas Limited in Saskatoon. Edwards spoke about economic evaluations of extraction and processing plants. “We discussed what information you need in order to perform an economic evaluation at the different stages of a project, from concept to prefeasibility to feasibility to definite design,” Edwards recalled. “You need different types of information at each stage in order to proceed to the next. You gradually get a clearer picture and so you’re able to perform a better project evaluation as you move along.” Edwards also discussed the perils of skipping steps. “It’s a bad idea, because it leads to mistakes,” he said. “I told the students to always remember the iron rule of engineering: Of good, fast and cheap, you can have two at the same time, but never three. So pick the two you want.” He also advised the students to take note of the difference between economic

upfront OUTREACH

evaluations for new builds and for existing operations, pointing out that they are very different tasks. Peter Read, general manager of mining at Syncrude Canada, discussed new project economics and what happens when actual capital costs exceed those projected on paper. Read and the students talked about how to make adjustments that can enable the project to go ahead. Domenico Baruffaldi, tax services partner with PricewaterhouseCoopers LLP, enlightened students about mining taxation and royalties at the federal and provincial levels and how Canada compares to the rest with world. Former president and COO of Syncrude, Jim Carter, spoke about the effects of the recent economic downturn on the Canadian mining industry and how well he feels the mining economy bounces back after a down cycle. Bill Hume, director of business development for North American Construction Group, talked about managing contractor operating costs. Some of the queries he considered included those surrounding the costs related to owning mining and processing equipment and whether it is more economical to purchase equipment and do the work oneself or to hire a mining contractor.

The studentsâ&#x20AC;&#x2122; evaluation Fifth-year student, Chris Pichurski, called the speakersâ&#x20AC;&#x2122; program a great idea. â&#x20AC;&#x153;Since the speakers come directly from industry, they conveyed the practical tools we need and placed the concepts within the context of real examples,â&#x20AC;? Pichurski said. â&#x20AC;&#x153;It gave us an idea of how things really get done in industry.â&#x20AC;? He continued by saying that another positive outcome of the program was the opportunity it afforded students to network with mining industry executives. Colline Petryshen, another fifthyear student, gave the course an A as well. â&#x20AC;&#x153;The program has taught me more about the costs and economics from a company level,â&#x20AC;? she said. â&#x20AC;&#x153;It has also taught me about some of the qualitative concerns with respect to vendors and customers. Overall, I think the speakersâ&#x20AC;&#x2122; program is a good idea. Much of the knowledge required for economics is gained from many years of industry experience. The cooperation from the industry personnel for this program also speaks highly of their approval of the program.â&#x20AC;?

remarked Edwards. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been doing the same thing for quite a while at the University of Saskatchewan, so I was used to it.â&#x20AC;? Edwards said he strongly recommends other mining engineers to follow suit. â&#x20AC;&#x153;Donâ&#x20AC;&#x2122;t wait for university representatives to come to you, go to them first,â&#x20AC;? he urged.â&#x20AC;? â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a great way to attract new blood into the industry.â&#x20AC;? Popowich hailed it an extremely worthwhile experience. â&#x20AC;&#x153;Students are interested in learning about the practical side of the business, which is difficult to teach from a textbook,â&#x20AC;? he said. â&#x20AC;&#x153;Universities need to reach out more to the industry and make use of the experience and expertise thatâ&#x20AC;&#x2122;s there.â&#x20AC;?

The professorâ&#x20AC;&#x2122;s assessment Joseph said the course has been, by and large, a great accomplishment. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s been a successful process,â&#x20AC;? he proclaimed. â&#x20AC;&#x153;I can tell by what the students are saying and by the sorts of questions theyâ&#x20AC;&#x2122;re asking.â&#x20AC;? During the next academic year, Joseph will be going on a sabbatical and the professor who normally teaches mineral economics is returning from leave. â&#x20AC;&#x153;I intend to hand over the course materials to her and suggest she adopt a similar format,â&#x20AC;? he said. Whatever the future holds for the lineup of this particular course, there can be no doubt that many very valuable lessons have been gleaned by all involved â&#x20AC;&#x201D; lessons that will hopefully inspire other mining industry representatives to get involved to share their valuable experience and insights with tomorrowâ&#x20AC;&#x2122;s leaders and innovators. CIM 3(7(5 .,(:,7 6216 &2

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The speakersâ&#x20AC;&#x2122; verdict Popowich and Edwards said they enjoyed speaking to U of A students very much. â&#x20AC;&#x153;It was lots of fun,â&#x20AC;? May 2009 | 27

upfront NEW FRONTIERS OF MINING by Greg Baiden

Turning fiction into reality ©Mafic Studios, Inc.

Opportunities for mining the moon Going underground

The success of the private/public partnership to build orbiting space solar power was accompanied by increased confidence. New space mining companies turned their eye to the moon with ideas of extracting the water it felt would propel the orbital transportation fleet of the space age. International space agencies collaborated to enhance our scientific understanding of the moon and options regarding the construction of lunar outposts. After careful study, subterranean outposts became the preferred approach due to the environmental complications associated with putting An artist’s rendering of what space-based solar panels may look like. personnel on the surface of the moon, This article presents a futuristic scenario in which readers such as exposure to radiation and solar flares. Much of the outpost conare transported forward in time. This optimistic outlook struction was done with teleoperated demonstrates how the answer to some of humanity’s chal- rock construction robots that were controlled from earth. lenges might lie in the stars — or, at least, on the moon. These safe and secure underground facilities can now be used to develop experimental in-situ The year is 2040 and I am standing in our newly comagricultural techniques that will enable long-term, self-susmissioned Lunar Mining Operations Centre (LMOC) in the taining lunar operations and new scientific exploration facilheart of Canada’s mining capital, Sudbury, recalling those ities such as the latest telescopes for observing the solar sysinitial meetings early in the century, when many ideas were tem. This has significantly reduced the amount of personnel being proposed about how to mine the moon. At the time, people were concerned about where our future energy necessary for mining, construction and manufacturing that requirements were going to come from. Bold plans were would have been necessary to be launched from earth. made in those early days that pushed the boundaries of our technological abilities, and some of those plans involved Robotic technology the moon. In particular, they entailed the creation of spaceMany of the lofty plans for mining the moon appeared based solar power and the lunar mining of hydrogen. to be unattainable at the time of their conception, but gradually people began to gain confidence. Led by the Here comes the sun Canadian mining industry, collaborative efforts between Many early twenty-first century scientists had proposed the international space agencies and private businesses space-based solar power. The idea was to create orbiting began to solve these critical problems. Projects utilized the solar panels that beamed totally “green” power back to robotic technologies that grew from the seeds of ideas that earth using microwaves or light. This power was put had germinated back in the late 1990s in Canada and were directly on the grid, much in the way hydroelectric plants later refined by the international mining industry. did at the turn of the century. The project resulted in the Now, thanks to this robotics technology, major mining creation of technologies necessary to teleconstruct these companies are able to largely run operations situated in the orbiting power plants and represented the largest engineer- High Arctic from the comfort and convenience of operaing undertaking in space history. But the gamble paid off as tion centres located in major cities. This not only solved a the system now provides enough power to enable a higher variety of logistical and safety issues, but also helped operstandard of living for most of humanity than during any ations exact a smaller environmental footprint. Likewise, time in the history of civilization. undersea mines are now operated from the deck of a ship. 28 | CIM Magazine | Vol. 4, No. 3

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These new operational methods boast fully underground mining and processing that are completely selfcontained. Few — if any — personnel are required on site. Undersea mining now uses natural biological processing to ensure the ecosystem is protected. Environmental responsibility has continued to grow in the mining industry with new agreements being signed to ensure other planetary bodies will also be managed effectively.

machines conceptualized in the first decade of the 21st century were later built and deployed to the moon. With all the ingredients in place we are able to mine and process our first H2O, H2 and O2 to be used for rocket fuel. This greatly reduced launch costs, as it is significantly cheaper to launch from the moon, avoiding the necessity of breaking the bonds of earth’s gravity.

Coming back down to earth Man on the moon — again In the year 2020, after nearly two decades of robotic missions to map the moon for minerals and chemicals, the first humans returned to the moon since the Apollo missions of the previous century. The initial objectives were to establish a moon outpost that was safe for humans and begin detailed exploration and delineation. It had long been postulated that the Shackleton Crater, located at the Lunar South Pole, was home to hydrogen and potentially water. The Shackleton site had been selected for its 365-day, 24-hour sun exposure, which enabled it to generate solar power and its main resource, water. It also allowed for full communication with earth at all times. The equatorial regions were thought to contain He3, H2 and CH. Specialized robotic drills and breakage systems, rock removal equipment and new microwave ground support

While much of the scenario presented above may seem a bit far fetched, one thing remains true: whenever and wherever the pioneering of new territory is needed, mining will be there to answer the call. It is one of a variety of potential scenarios being developed by our next generation of explorers. In the meantime, these dreams can evoke some very tangible outcomes for the mining industry in the short term, including: • the potential to research and develop new prospecting and exploration technology; • joint investment in new telerobotic mining and construction equipment for terrestrial use in extreme environments such as the High Arctic; • the achievement of more sustainable mining development practices that leave a smaller environmental footprint;

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• the ability to research and develop the techniques for mining undersea and at high altitude; • an opportunity to transform the public view of our industry; • the creation of an exciting visionary environment for Canadian research and development in academia and commercial circles; and • provide a source of industry and national pride and capture the imagination of our youth, attracting them to the mining industry. The mining industry has been seeking to solve many of these practical issues for a very long time. Our involvement in this futuristic research could help the Canadian mining industry benefit not only technologically, but also to gain the national and international recognition it deserves. CIM

About the author Dr. Greg Baiden is a professor in mining engineering at Laurentian University and the president of Penguin Automated Systems Inc. CIM May 2009 pwr.qxp

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Moving on up Grant Isaac, currently the dean of the Edwards School of Business at the University of Saskatchewan, has been named senior vice president corporate services at Cameco Corporation. Isaac, who will assume his new role in July 2009, joined the University of Saskatchewan in 2000 and was named dean of the former College of Commerce in 2006. He piloted the college through its transition to the Edwards School of Business in 2007 and is credited with attracting significant private sector support to the institution. Larry Messinger has been appointed senior project manager at Norwest Corporation. With over 34 years’ international experience in the coal industry, Messinger recently retired from Peabody Energy. His areas of expertise include facilities construction, domestic and international mining property acquisitions, federal coal leasing, and planning and permitting for new coal-fired power plant and coal conversion facilities. Rescan Environmental Services Ltd. announced the appointment of Andrew Duthie to its management team. Duthie, an experienced environmental assessment manager and integrative report writer from South Africa, has over 16 years’ experience in environmental assessment and mining, industrial, water and tourism project management. He is a leading environmental practitioner in the mining sector, having conducted assessments for a number of landmark projects. Potash One Inc. appointed John S. McEwan as vice president of solution processing for its Legacy Potash project in southern Saskatchewan. McEwan’s 30-year career in the chemical processing field has included solution mining from pilot plant to commercial operation, process, project, and research engineering, and production and technical management. Most recently, he was the principal process engineer for Rio Tinto, responsible for process and project engineering duties for potash deposits in Argentina and Canada.

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Making a world of difference Dr. Stephen Lucas, ADM Minerals and Metals sector, NRCan, discusses the Canadian mining industry’s role on the global stage tephen Lucas’ background ranges from his early work as a geologist and a researcher to his involvement in policy and planning. This broad spectrum of experience has given him a unique perspective and prepared him for his dual role as Assistant Deputy Minister, Minerals and Metals Sector, with Natural Resources Canada and a member of the transitional board of directors for the Canada Mining Innovation Council (CMIC).

CIM: Can you tell us how you came to be involved with the CMIC? Lucas: One of the things I took on when I joined NRCan as ADM was working with a community of interested leaders from industry, universities and governments — both federal and provincial — who were concerned about the state of mining research and innovation in Canada and wanted to

do something about it. That led to the notion of the Canada Mining Innovation Council, which was initially endorsed in concept by both federal and provincial mines ministers in the fall of 2007, and advanced to the development of the Pan-Canadian Mining Research and Innovation

Strategy and the governance model for the Council. The beauty of this is that the CMIC is not a Government of Canada initiative, but rather a Canadian mining community initiative. NRCan supports it, as do federal, provincial and territorial governments across Canada, through the endorsement of the mines ministers and leaders from industry and universities. We’ve also had endorsements from the Mining Association of Canada (MAC) and the Canadian Mining Education Council (CMEC), so I’d say it’s strongly supported by the mining community in Canada. CIM: The theme of this issue is “Canada’s Global Impact.” Perhaps we can start by getting your input on the Canadian mining industry’s role on the global stage. Lucas: Canada has a very long history in mining, mineral exploration,

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Executive Director The candidate should possess the following qualifications: • Comprehensive knowledge and understanding of the mining industry, especially in the fields of exploration, • • •

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Any interested candidates should provide his/her letter of interest and resume to CMIC co-chairs (Mr. Engin Özberk and Dr. John Thompson) at CMIC@NRCan.gc.ca For more information, please see the CMIC website www.cmic-ccim.org, under Executive Director. Participate in this great opportunity to actively shape the future of mining R&D in Canada. 32 | CIM Magazine | Vol. 4, No. 3

upfront Q&A

mineral processing, and related technologies and services. In fact, itâ&#x20AC;&#x2122;s woven in with the history of our country. During the 1990s, and into this decade, Canadian firms â&#x20AC;&#x201D; including mineral exploration, mining developers, service industries and support providers â&#x20AC;&#x201D; moved significantly onto the global stage. A year ago, before the current economic downturn, we had about $110 billion of assets globally. In 2008, Canada raised about 37 per cent of the equity on the global stage for mining or exploration through the strong cluster of financial and related industries, in centres like Toronto and Vancouver. By number, about 57 per cent of the worldâ&#x20AC;&#x2122;s exploration or mining companies are based out of Canada. It has evolved such that, numerically, Canadian business expertise is the globally dominant force in mining. CIM: How do you see Canadaâ&#x20AC;&#x2122;s mining industry changing and evolving in the future? Lucas: The demand of nations and societies across the world for minerals and metals will, if anything, increase going forward, particularly as developing and emerging economies â&#x20AC;&#x201D; including the emerging middle classes in countries such as China and India â&#x20AC;&#x201D; increase their consumption and use of metals in areas such as building infrastructure, automobiles and many other applications. That is going to continue the drive for finding new deposits, so opportunities for mineral exploration, exploration financing and related services will continue to grow. In the meantime, some of these deposits are going to be harder to find, as a lot of the easier deposits around the globe have already been found. The challenge is to discover the ones that are more deeply hidden and perhaps more challenging to extract. So there is a call for innovative technologies to look for these harder to find deposits.

Increasing expectations from public and governments in terms of reducing the environmental footprint of mines will continue to drive the development of new technologies, processes and approaches. There will be clear benefits to early adopters and nations that support the research and innovation needing

to bring these on-stream. We think Canada is well positioned for that. CIM: Can you tell us about some of the new initiatives that the CMIC is looking at both in the short term and the years ahead? Lucas: In its strategy outline, the council, highlights a number of key

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areas. There is a critical need for people in the industry and, in particular, highly qualified ones, such as engineers, geologists and skilled trades people. Notwithstanding the challenges brought on by the economic downturn, we expect increased demand in the medium and longer term. Demographics suggest that there will still be shortages in the next five to ten years in a number of these key areas, both in Canada and around the world. Clearly, we want to ensure that through the CMIC’s work we can continue to attract and help support the ongoing professional development of researchers, geologists and engineers. A key part of that is keeping students interested in careers in this industry. The second area of focus is on improving collaborative efforts, thereby enabling us to better multiply the benefits of Canada’s research brainpower and industry work in

some of the key areas. We are developing critical mass around some of these issues and have been bringing technologies into demonstration and commercialization, such as in the areas of green mining. Another of the strategic areas of focus is that of targeted research — looking at some of the breakthrough areas where key advances might need to be made over the next number of years. The goal is to reduce the cost of production, improve competitiveness and productivity, and meet environmental standards. Among those areas, the environment is a key focus. This includes things such as improving energy efficiency, not only in an effort to reduce costs to companies, but also to reduce their greenhouse gas emissions. We are also looking at water management issues — minimizing water use and ensuring the quality of water discharge from mining opera-

tions. That’s a targeted area that is very much in line with what future opportunities on the global stage are expected to hold. Finally, we’re also looking at where companies can improve their productivity and competitiveness through improvements in the efficiency of their operation — right from the exploration stage through to mine closure. CIM: In times of economic difficulty, R&D and innovation can sometimes be one of the first things on the chopping block. What are the implications of this? Lucas: That kind of challenge is one that often manifests itself in the longer term because of the need, in many cases, for patient investment in research and technology development and demonstration. Certainly the Government of Canada has recognized that fact in the most recent federal budget. There were measures to

said they could get me “aMetso 3-5 percent improvement… they gave me 7 percent.” I have complete confidence in Metso. We needed improvements in our plant feed and equipment discharge and Metso helped us perfect the process. Our crushers and grinding mills are now optimized to provide the best output for the next piece of machinery. Our overall plant production is up and energy use is down.

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34 | CIM Magazine | Vol. 4, No. 3

help provide government support to a variety of programs with investments in clean energy technology and a variety of other projects across the spectrum. In short, it’s more a case of opportunity cost. Projects in areas where advances could be made — such as systematic improvements in the energy efficiency of mining operations through new approaches like ventilation on demand (targeting areas where air is needed at the time rather than ventilating the entire mine all of the time) — could be postponed. Some of the cost savings or technology market opportunities for Canadian suppliers could be deferred, or in some cases lost, if suppliers in other countries sustain the effort and corner those markets. That is not to underplay the challenge that is faced by companies working through these types of decisions. I think that’s in part why the CMIC was created. It recognizes that a real threeway partnership is needed between industry, governments and educational institutions. CIM: We’ve witnessed a lot of fallout on the HR front. What message should we be sending to the industry, suppliers and government about the impact of hiring freezes etc.? Lucas: It’s an unfortunate consequence of the economic downturn that companies are working to address their bottom line to make it through a period of very depressed prices and markets. A number of companies and government institutions are working to try to step up and sustain student employment opportunities. John Hadjigeorgiou of the CMEC and Malcolm Scoble of CMIC recently sent out an open letter to companies and universities, encouraging them to hire students. So there is some leadership action being taken. I also think the message that the industry didn’t want to have history repeat itself was one we heard loud and clear during the consultations that the CMIC did in the spring of

2008. As a consequence of the economic downturn in the late 1990s and the early part of this decade, people shed a lot of labour and plenty of folks left mining. Then, during the more recent upswing, the industry experienced challenges in finding and attracting people and we witnessed an inflation in wages. So I think the single message is about making small investments in the longer term, knowing that things will turn around. It’s also about helping to keep the students who have flocked to our schools in mining engineering and geology programs, by offering summer work experience positions. CIM: Although nobody has a crystal ball, what do you predict the short- and longterm future holds for the Canadian mining industry on the global stage? Lucas: I’m not going to prognosticate on when things are going to turn around, but definitely all signs are that the next year is going to continue to be challenging, particularly for base metals mining. There will be opportunities for acquisitions and growth in companies that are well positioned, so the current situation is one of weathering the storm and for those who are well-positioned to take advantage of it. The longer term picture is more positive. The expectation is that demand and growth will resume, fuelled by countries such as China and brought on by infrastructure growth, which is very metals-intensive. Through their global reach, Canadian firms are well-positioned to continue to take advantage of that. I think through that strong cluster of expertise, along with the leadership of the industry associations, the CMIC, NRCan’s green mining initiatives, and the Canadian government’s focus on corporate social responsibility strategy for extractive industries, we’ll see a continued strengthening of opportunities for competitive and responsible industry, both at home and on the global stage. CIM May 2009 | 35

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canada’s global impact

Reprinted with permission of Beyond Borders

Taking a lead role on the global stage by Dan Zlotnikov Anyone even peripherally involved with Canadian mining knows that the industry is a vital part of this country’s economy and that Canada is a major world player. However, even if one is looking at the big picture from the perspective of a multinational operator, the full scale of the industry may be difficult to comprehend. According to Gavin Graham, director of investment, BMO Asset Management, of the CDN$27 billion that the company’s Canadian arm has under management, approximately $2 billion is attributed to mining equity. “It’s not necessarily because we’re enthusiastic fans of mining,” explained Graham, “but rather, because the mining industry is a very big percentage of Canadian stock market capitalization.” Between mining and energy, Graham estimated that about half of the total Canadian stock market is exposed to resources.

With so much current and historical activity in the mining sector, Canada has a well-established reputation as a great source of mining expertise. Over the years, Canadian mining engineers, geologists and various other mining-related professionals have travelled the globe, working on projects everywhere from the Australian plains to the Chilean mountains. Many Canadian mining firms have done the same. In 2007, Canadian companies held interests in 360 mining projects outside of its borders, and you’d be hard-pressed to find a country that did not have a Canadian mining company working in it. But recent years have brought many changes to the industry, both inside and outside of Canada. What does the future hold then for Canadian mining on the global stage? May 2009 | 37

canada’s global impact

Photo courtesy of Barrick Gold

dations specifically for local development,” he said. This means looking beyond the mine site and reaching out to support — and in some instances even create and operate — community-focused initiatives addressing the needs of the local residents. “Unfortunately we operate in certain parts of Africa that have a very significant AIDS problem,” said Conway. “Again, we work through the local governments to make sure that there is a high level of education around the issue and help people who do have the virus to deal with it.” In Botswana, IAMGOLD is also one of the major supporters of a local orphanage, where all the children have lost their parents to AIDS. “There’s no question,” said Conway, “you do Barrick will work with Un Techo para Chile to provide 700 families (representing an estimated 3,000 people) with new have to be socially responsible.” homes in safe neighborhoods as part of its Atacama Commitment. (Photo reprinted with permission of Beyond Borders) This view is shared by Barrick Gold, the world’s largest gold producer, a company that is also on the front lines in the batBig impressions Given the relative scale of the parties involved, it is tle against HIV/AIDS in Tanzania, Papua New Guinea and important to first consider what changes Canadian miners South Africa. It operates 27 producing mines around the bring to the global mining industry. Take for example world, which means its community relations projects are IAMGOLD’s Sadiola project in Mali, West Africa. Joe many and varied. According to Nancy White, the company’s director of Conway, IAMGOLD president and CEO, said that when the communications for responsible mining, such projects company began operating there, the country was very poor. are a major area of focus for Barrick. Aside from the “In terms of GDP the impact of the project was tremendous,” observed Conway. “It resulted in about a 20 to 30 per cent increase in that country’s GDP. ” Sadiola had more than financial implications for the region — literally thousands of people moved closer to the mine in hope of benefiting from the activity. “You definitely see a large impetus for people coming into these communities,” said Conway. “I think when we were initially building the project there might have been 1,000 people, and now there are probably 20,000.” The challenge, Conway pointed out, goes beyond that of dealing with underdeveloped infrastructure, to that of creating some sustainability at the local level. “In many of our operations, we have Rampant unemployment in the Atacama region means many families have had no choice but to live in “campamentos” — found it necessary to set up foun- slums of substandard housing in unsafe neighborhoods. 38 | CIM Magazine | Vol. 4, No. 3

canada’s global impact But getting the right government licensing is only the economic benefits resulting from job creation, taxes and the purchase of local goods and services, in 2007 the beginning. Environmental assessments must be comcompany reports to have contributed over US$40 million pleted, but those are often far from straightforward. Leon to communities through community programs (e.g. Botham, mining sector leader at environmental engineerhealth and education), scholarships, infrastructure proj- ing firm Golder Associates, explained. “If some of the fundects to build roads and supply power to developing ing comes from the World Bank or any of the signatories regions, as well as charitable donations. That same year, to the Equator Principles, then the international environthe company spent almost half a billion dollars on goods mental standards must be met.” Botham said that these and services from businesses in developing countries in standards are rarely identical to the national ones, and that keeping with its “buy local first” policy. a company must first determine which of the two sets of Of particular note is Barrick’s partnership with local non- guidelines is the more stringent and meet those — which governmental organizations to help alleviate the pockets of poverty that exist in the Atacama Region of northern Chile where thousands of residents live below the poverty line. Called the Atacama Commitment, this effort of targeted programs and initiatives focuses on housing, education, health and socio-economic developNorth American Construction Group is the premier provider of mining, heavy construction, ment and is part of Barrick’s commitindustrial, piling and pipeline services in Canada. ment to improve economic and social conditions in the regions where it WE’RE MORE THAN JUST BIG EQUIPMENT. operates. The difference is in our unique talent and Many of the issues that Canadian knowledge, combined with an unmatched history of over 50 years as an industry leader. operators face abroad are not that different from ones faced domestically; the more promising deposits are frequently in remote areas with little existing infrastructure. Environmental assessments must be completed and licenses must be received. Local laws must be obeyed. Simple, really…except when it is anything but.

Due diligence due The type of issues a company might encounter varies greatly by jurisdiction, remarked Michael Bourassa, a lawyer with the global mining group at Fasken Martineau DuMoulin. Some of the most geologically promising jurisdictions may be less politically stable than others; sometimes, a great deal less, which means paying careful attention to what one agrees to. “The first issue would be: what are the laws that relate to the security of the tenure itself,” Bourassa explained. “When it comes to developing a property in a foreign jurisdiction, you want to make sure you’ve got good counsel that can do thorough due diligence to make sure that nobody else has acquired these rights and that they can’t just be taken away at the government’s whim.”

MINING & HEAVY CONSTRUCTION INDUSTRIAL – PILING – PIPELINE

May 2009 | 39

Photo courtesy of Barrick Gold

canada’s global impact requirements,” Botham explained by way of example. “And to actually complete the assessment for the project you have to be a Mongolian company; Western consulting firms are not allowed to do that. But most of these companies would not be able to prepare an assessment to World Bank standards. So you essentially have to have two separate environmental impact assessments.”

Corporate social responsibility But suppose all of the environmental assessments are completed and approved. Next comes another challenge: securing the social license to operate. To do its part, the mining company must meet its corporate Barrick's Buzwagi mine in Tanzania constructed a rainwater harvester that will capture rainfall and channel it into a covered reservoir that holds 1.5 million cubic metres of water. (Photo reprinted with permission from Beyond Borders) social responsibility (CSR) obligations to the local community, governfrequently means switching from one to the other and back ment and stakeholders. again numerous times on the same project. However, according to White, at that stage, this is one Then, there may also be other requirements. “There task that should have already commenced. Being granted, are consultants in Mongolia that provide environmental and then maintaining that social license, White said, is cruimpact assessment work to the Mongolian government’s cial to Barrick’s continued operations. “There has been a shift in public attitudes that’s been occurring over the last decade or more,” she observed. “There is a growing public perception that success in business today is being measured in more than financial terms and that the private sector has an important role to play in society. Mining operations can be a powerful catalyst for economic and social development, particularly in developing regions.” To meet its commitments, Barrick has implemented a whole range of initiatives, but the central part of the company’s activities can be summed up as follows: Consult early, consult often, and consult continuously to understand local needs and concerns and build programs that reflect the aspirations of the community. “Consultation and engagement are really a critical part of our community relations approach,” said White. “We begin that process of engagement very early, and we consult extensively with communities, leaders, and a host of stakeholders. That starts at the exploration phase and continues throughout the life of the mine.” But according to Conway, this process can present challenges. “Sometimes the benefits of mining go to the federal government and the local people don’t profit from them as much as the country as a whole does,” he explained. The solution, he said, is through education. “We spend a lot of the time with the governments talking about transparency. We have to be transparent in terms of what benefits we are providing, and the government has to be transparent on the funds that are coming in and what they are doing with them. In any case, the welfare of local communities is always of concern as we 40 | CIM Magazine | Vol. 4, No. 3

canada’s global impact facilities.” Within six months, Conway said the trainees had acquired the basics. By the end of two years’ training, IAMGOLD operations that previously relied heavily on expatriate workers were able to cut the expat numbers by as much as half. “At the Rosebel mine in Suriname, we had 693 nationals employed in 2005 (or about 85 per cent of the workforce),” Conway pointed out. “This has increased to 1,150 Surinamese, representing almost 96 per cent of Rosebel`s workforce today.” Barrick has seen similar successes with its training program. The soon-to-be-opened Buzwagi mine in Tanzania expects to employ 700 full-time staff. Of these, Photo courtesy of IAMGOLD

deal with them on a day-to-day basis and they are often an important source of employees. Conway suggested that in the future, the CSR expectations placed on mining operators abroad will continue to increase. Graham agreed, and also highlighted the inherent benefits in operating in an ethical and sustainable manner. “Not only is it good corporate citizenship, but it can also help a company’s profile with investors,” he explained, and pointed to the growing number of investment companies specializing in ethical investment portfolios. “You can put a substantial premium on your share price or valuation if you do follow good corporate governance and social responsibility.”

Local training initiatives One CSR initiative that is underscored by many mining companies offers clear benefits to both the local community and the operator. Training local residents provides skilled job opportunities in what are frequently remote and undeveloped areas and reduces the operator’s reliance on expatriate workers. Enlarging the available labour pool also serves as a hedge against future competition for the operator. Graham acknowledged that the labour shortages of early 2008 have been greatly alleviated because of the current economic situation, but warned that this availability of skilled workers was likely to disappear as soon as the markets begin to show signs of recovery. “Any company that is doing development or prospecting in foreign jurisdictions is very foolish if they don’t train the local workforce — and it’s very encouraging to hear that they are.” According to Conway, IAMGOLD has implemented a number of programs at its operations to train people with virtually no mining-related experience to eventually be able to fill highly technical positions. “You’re literally taking some people who have probably never operated a machine to driving large equipment,” Conway explained. “That requires pretty extensive training

Children attending class at the new primary school built by IAMGOLD’s Rosebel mine for the local village of Nieuw Koffiekamp in Suriname. May 2009 | 41

Photo courtesy of Barrick Gold

canada’s global impact

At the North Mara mine in Tanzania, Barrick works in close partnership with the African Medical and Research Foundation to combat HIV/AIDS. Peer health educators raise awareness about HIV/AIDS at the mine site and within the Mara community.

White said 40 per cent will be Tanzanians from the local community and a further 50 per cent from other parts of the country, with the remaining workers coming from outside Tanzania. To address the skills shortage in Tanzania, Barrick is sponsoring two- and three-year vocational training programs and offering apprenticeships (in conjunction with the Tanzanian government, the Tanzanian Chamber of Minerals and Energy and AngloGold Ashanti) to increase the number of accredited skilled workers in the country.

Mitigating political risks But all these training efforts carry a hidden political risk, suggested Graham. “One of the issues surrounds the security of your legal possession of that resource,” he explained. “Is a company going to expend lots of time and resources only to find out once they’ve actually discovered something and started to get it into production, that the local government says, ‘you know, I think we’re going to change the rules on this; I think we want a larger slice.’?” In a way, training the local community creates a hedge not just for the company but also for the government. Should that government decide to take over the project, it would find itself with a pre-trained, experienced workforce capable of taking over some, or possibly even all, of the mine operations. Graham suggested that to mitigate the risk, a mining company should diversify its portfolio. The greater the number of national zones in which a company has oper42 | CIM Magazine | Vol. 4, No. 3

ations, the lower the risk of all its holdings being seized or its royalty agreements forcibly renegotiated. “Ideally, a company would have some properties in developed markets, with secure legal systems, like North America, Western Europe or Australia,” he said. “They could then have some intermediates in emerging markets that have a pretty good track record of working with major foreign investors. And then, if they’re feeling adventurous or lucky, they might go with some of the higher-risk, highreward plays.” Graham acknowledged that this approach does not apply to smaller outfits with one or two projects. “Then the question comes down to how strongly you believe in your relationship with the local government,” he said. Bourassa pointed to international arbitration tribunals as a way to mitigate the political risk. “One aspect that companies need to look at if they are ultimately in a dispute pertaining to the rights in a foreign jurisdiction, is how can they go to a court to get a ruling that is just and fair,” he said. “Frequently in these jurisdictions, the courts don’t have capacity to deal with these issues or deal with them in a fair way.” But even an international arbitrator might be powerless to enforce a judgment. This is why, Bourassa said, it is important that companies consider existing bilateral trade agreements. If such agreements exist between the country in which the company or its subsidiaries are registered and the country in which it operates, an international arbitration tribunal would have much greater power over the parties involved.

Photo courtesy of IAMGOLD

If the political risks are so great, the infrastructure is lacking — if not absent outright — and the mineral demand trying to crawl off the bottom of the graph, why go outside of Canada in the first place? The reasons, according to Bourassa, are two-fold. First and foremost, of course, is the mineral potential of a geographical area. This is not to say that Canada’s resources have been exhausted, but there are vast opportunities elsewhere. Even in high-risk areas, sometimes the mineral wealth is such that companies feel the risk is worth it. Bourassa pointed to the Democratic Republic of the Congo as one such case. “The political risk there is huge, the infrastructure is poor, and there is political instability,” he explained. “But the mineral potential is enormous: copper, gold and diamonds, to name a few. So if they know that they can get good title to their properties, they are prepared to take that risk.” The second, possibly more important factor, according to Bourassa, is the knowledge and relationships the people in the company may have in a particular area. “It may be a gold-focused company, and the management has a lot of knowledge and comfort operating in Latin American countries, for example. They will look for opportunities in jurisdictions that they know and understand.” With the exception of the multinational giants, Bourassa said most companies often tend to focus on particular geographical areas.

Photo courtesy of Barrick Gold

canada’s global impact

Credit crunch, recession, economic downturn or a sharp correction — no matter what you call it, it is on everyone’s mind, and the implications are the same: the money that was available two years ago for new and existing mining projects has now all but vanished. “A lot of projects have been killed stone dead by the economic crisis and the lack of access to capital,” acknowledged Graham. “These projects — or rather, their absence — will create a gap in new supply coming online, and the normal project start-up times will be extended by the lack of skilled workers. This means that there will be little to no new supply entering the market in the first two to three years following the recovery in demand.”

Photo courtesy of Barrick Gold

Feeling the crunch

1. A crew at Barrick's Buzwagi mine in Tanzania assembles the site's sag mill, part of the mine's 12,000 ton-per-day process facility. 2. Almost 96 per cent of the work force at IAMGOLD's Rosebel mine in Suriname is comprised of Surinamese nationals. 3. Blades and towers for the construction of 10 wind turbines at Barrick’s Punta Colorada wind farm have arrived at the Port of Coquimbo in Chile. May 2009 | 43

Photo courtesy of IAMGOLD

canada’s global impact

Minimizing the impact on the environment is an important component of IAMGOLD's operations.

44 | CIM Magazine | Vol. 4, No. 3

The green planet Botham emphasized the importance of continuing development into the area of sustainable mining practices and claimed there is already a great deal of interest from the industry on the subject. Examples include Barrick’s clean energy initiatives, including a solar power project in Nevada, the construction of the world’s highest altitude wind turbine in Argentina and a $70 million wind farm in Punta Colorada, Chile. When completed, this latest project will consist of 18 wind turbines and generate 36 megawatts of power. It will be connected to the Chilean Central Interconnected System to help meet the power needs of the mining, industrial and residential sectors. “The greening of industry has been taking place for years now,” said White. “In the mining industry, environmental responsibility is vital to maintaining the trust of the community.” The combination of a positive long-term outlook and increasingly strict operating conditions present both challenges and opportunities for Canada’s mining industry. More technical expertise will be required to meet the environmental guidelines and greater efforts will have to be made to meet social responsibility commitments. But Canada’s reputation for ethical, responsible operation, and the industry’s focus on long-term investment will help ensure Canadian mining companies continue to make a positive difference not just within our borders but all across the globe. CIM

Photo gracieuseté de Barrick Gold

l’impact mondial du Canada

L’éolienne de Veladero

Prendre un rôle de premier plan sur la scène mondiale

’importe qui le moindrement impliqué dans l’industrie minière canadienne sait que celle-ci forme une partie essentielle de l’économie du pays. Il peut cependant être difficile pour une multinationale non minière d’en apprécier l’ampleur. Selon Gavin Graham, directeur des investissements chez BMO Asset Management, environ 2 milliards des 27 milliards de dollars (canadiens) gérés par la compagnie au Canada sont attribués aux valeurs minières. « Ce n’est pas que nous aimions les mines, c’est que l’industrie minière forme une grande partie des capitaux boursiers. Entre les mines et l’énergie, environ la moitié du marché canadien des valeurs mobilières touche aux ressources », dit-il. La réputation du Canada en tant qu’expert en mines est bien établie. En 2007, les compagnies canadiennes détenaient des intérêts dans 360 projets miniers à l’étranger. Cependant, l’industrie change; que lui réserve l’avenir?

Impressions Il faut tout d’abord évaluer les changements apportés par les mineurs canadiens à l’industrie minière mondiale. Par exemple, le projet Sadiola d’IAMGOLD au Mali, en Afrique occidentale. Selon Joe Conway, présidentdirecteur général d’IAMGOLD, l’impact du projet dans ce pays très pauvre a été énorme et a fait croître le PIB de 20 à 30 pour cent. Le projet comportait plus que des implications financières; des milliers de personnes ont déménagé pour pouvoir bénéficier de cette activité. 46 | CIM Magazine | Vol. 4, No. 3

Les défis vont bien au-delà des infrastructures sousdéveloppées. « Dans de nombreuses exploitations, il a été nécessaire de bâtir des fondations spécifiquement pour le développement local, voire même créer et exploiter des initiatives communautaires pour répondre aux besoins de la population locale. Malheureusement, nous exploitons dans des régions à forte incidence de SIDA. Nous travaillons avec les gouvernements pour éduquer les gens pris avec le virus. Au Botswana, IAMGOLD supporte un orphelinat local où les parents des enfants sont tous morts du SIDA. Nous devons absolument être socialement responsables », dit M. Conway. Ce point de vue est partagé par la Société Aurifère Barrick, le plus grand producteur d’or au monde, avec 27 mines en production à travers le globe. Selon Nancy White, directrice des communications pour une exploitation minière responsable, de tels projets sont dans la mire de la compagnie. En 2007, la compagnie a contribué 40 millions de dollars US en bénéfices aux communautés, sous forme de projets d’amélioration des infrastructures à des bourses et des dons à des organismes locaux. L’impact d’un tel soutien va bien au-delà de la vie de la mine. « Nous avons hérité de l’ancienne mine Homestake dans le Dakota du Sud avec l’entente que nous la fermerions. Nous avons ensuite donné la mine à l’État pour la construction d’un laboratoire de recherche sur les neutrinos. Ce projet devrait avoir des retombées de plus de 1 milliard de dollars US.

l’impact mondial du Canada Plus ça change, moins c’est pareil Les enjeux rencontrés varient selon la juridiction, signale Michael Bourassa, un avocat de la firme Fasken Martineau DuMoulin. Des gisements géologiquement prometteurs peuvent être situés dans des juridictions politiques très instables. « Le premier enjeu est de s’assurer du mandat. Lorsque vient le temps de développer une propriété, il faut s’assurer d’en détenir les droits et que le gouvernement ne pourra pas tout simplement changer d’idée. » Obtenir les bons permis n’est qu’un début, suivent les études d’impact environnemental, qui sont souvent loin d’être faciles. Leon Botham, chef du secteur minier – génie environnemental, Golder et Associés explique : « Si des fonds proviennent de la Banque mondiale ou d’un des signataires des Principes de l’Équateur, il faut alors satisfaire aux normes environnementales internationales. » Ces normes sont rarement identiques aux normes nationales; la compagnie doit donc déterminer lesquelles seront plus exigeantes et s’y soumettre. Il y a souvent d’autres exigences. Par exemple, en Mongolie, l’évaluation doit être effectuée par une compagnie mongolienne; cependant, les compagnies locales ne peuvent pas préparer des évaluations selon les normes de la Banque mondiale. Il faut donc effectuer deux évaluations d’impact distinctes.

La responsabilité sociale des entreprises Une fois les évaluations complétées, un autre défi se manifeste : l’obtention de l’aval de la société pour exercer les activités. Selon Mme White, ce processus devrait déjà être enclenché. « Les attitudes publiques ont évolué. La perception du public est que le gouvernement et le secteur privé ont un rôle important à jouer; la compagnie minière doit remplir ses obligations sociales. Barrick a mis en place diverses initiatives qui peuvent être résumées ainsi : consultez tôt, consultez souvent et consultez continuellement. Nous établissons des consultations avec les communautés et leurs chefs. Cela commence avant même l’exploration et se poursuit tout au long de la vie de la mine. » Barrick supporte de plus de nombreux programmes sociaux. Les bénéfices de l’exploitation minière vont parfois aux gouvernements et les communautés locales en bénéficient moins. Selon M. Conway, « La solution est dans l’éducation, dans la transparence; nous devons expliquer les bénéfices que nous apportons et le gouvernement doit être transparent quant aux fonds que nous fournissons et ce qu’il en fait. Avec une bonne gouvernance corporative et un engagement à être une entreprise responsable, vous pouvez mettre une prime sur la valeur de votre action. »

La main-d’œuvre Une initiative de responsabilité sociale est de former les résidents locaux, diminuant ainsi le besoin d’importer de la

main-d’œuvre et servant de protection par rapport à une compétition future de la part d’autres compagnies. Bien que le manque de main-d’œuvre ait été atténué par la crise économique actuelle, la disponibilité des ouvriers spécialisés disparaîtra avec la reprise économique. IAMGOLD a élaboré des programmes de formation pour des gens sans aucune expérience des mines. « Des gens qui n’ont jamais tenu un marteau conduisent maintenant des équipements lourds. Après deux années de formation, IAMGOLD a pu couper de moitié le nombre d’expatriés. » Barrick a obtenu des résultats semblables. À la mine Buzwagi en Tanzanie, seulement 7 % des travailleurs proviendront de l’extérieur du pays.

Atténuer les risques politiques Cependant, tous ces efforts de formation cachent un risque politique, la sécurité de votre possession légale de la ressource. Est-ce qu’une compagnie va dépenser beaucoup de temps et de ressources pour apprendre que les règles ont changé, que le pays veut une plus grande redevance? La formation de la main-d’œuvre profitera grandement au gouvernement s’il décide de s’approprier la mine. M. Graham suggère d’atténuer le risque en diversifiant le portfolio. « Idéalement, une compagnie aurait quelques propriétés dans des marchés développés avec des systèmes légaux sûrs, par exemple l’Amérique du Nord, l’Europe de l’Ouest ou l’Australie et quelques propriétés dans les marchés en émergence qui ont une bonne réputation de travailler avec des investisseurs étrangers. Puis, si elle se sent aventureuse, elle pourrait avoir quelques propriétés plus à risque. » Il reconnaît cependant que cela ne s’applique pas aux petites compagnies qui n’ont qu’un ou deux projets. Les tribunaux internationaux peuvent être incapables de forcer l’exécution d’un jugement. Il est alors important que les compagnies étudient la possibilité d’ententes bilatérales entre le pays où se situe l’exploitation et le pays d’origine de l’exploitant. Les tribunaux d’arbitrage internationaux auraient alors plus de pouvoirs. Si les risques politiques sont élevés, les infrastructures, inexistantes et la demande, faible, alors pourquoi chercher à l’extérieur du pays? Selon M. Bourassa, c’est premièrement en raison du potentiel minéral : au Canada, les gisements les plus faciles à exploiter sont déjà exploités. Deuxièmement, il y a les connaissances et les relations que peuvent avoir des gens de la compagnie, par exemple, se sentir très à l’aise en Amérique latine. La richesse minérale est parfois telle que la compagnie juge que le risque en vaut la peine. « En République démocratique du Congo, le risque est énorme, les infrastructures sont mauvaises et le climat politique est instable », explique M. Bourassa. « Le potentiel minéral est cependant extraordinaire : argent, cuivre, métaux de base, or et même des diamants. Les compagnies sont prêtes à courir le risque si elles peuvent avoir un solide titre pour la propriété. » May 2009 | 47

Ressentir la récession

Photo gracieuseté de Barrick Gold

l’impact mondial du Canada Resserrement du crédit, récession, correction des marchés, peu importe le mot, les implications sont les mêmes : l’argent disponible il y a deux ans pour de nouveaux projets a presque disparu. Cela signifie qu’il y aura peu ou pas d’offre sur les marchés durant les deux à trois premières années suivant la reprise. Les gouvernements de plusieurs pays perçoivent la poussée de l’exploitation minière comme une source de revenus, par les redevances et les permis; les règlements portant sur l’environnement ont aussi été resserrés. Même si la récession assouplissait les politiques de certains pays, ce ne sera pas le cas pour les contraintes environnementales, surtout que de nombreux projets sont financés par des sources internationales telles que la Barrick a investi 600 000 $ pour construire un meilleur environnement d’apprentissage pour les écoliers de Buzwagi. Banque mondiale. Jumeler des perspectives positives et des conditions mais la réputation du Canada à exploiter de manière d’exploitation strictes est à la fois un défi et une occasion éthique et responsable aidera à assurer que les compagpour l’industrie minière canadienne. Il faudra encore plus nies minières canadiennes font une différence positive, au d’expertise technologique pour honorer les engagements, pays et à l’étranger. CIM

Canada Mining Innovation Council Conseil canadiende l’innovation minière Le CCIM est un réseau de chefs de file des milieux industriels, académiques et gouvernementaux créé en vue de renforcer la compétitivité d’une industrie minière canadienne responsable grâce à l’excellence en recherche, en innovation, en éducation et en commercialisation.

Le Conseil recherche un individu dynamique qui serait intéressé par une expérience initiale d’un an comme

Directeur exécutif pour un joueur, récemment incorporé, dans le domaine de la recherche minière canadienne. Des candidats ayant les qualités suivantes : • Bonne connaissance et compréhension de l’industrie minière, spécialement dans les domaines de l’exploration, de l’extraction minière, de la métallurgie et/ou de l’environnement; • Bonne compréhension de l’importance et des enjeux relatifs à la R-D et l’innovation dans les domaines de l’exploration, de l’extraction minière, de la métallurgie et/ou de l’environnement; • Bonne aptitude actuelle au réseautage au niveau national (et international); et, • Forte compétence aux nivaux des communications (avec les milieux industriels, académiques et gouvernementaux). Tous les candidats intéressés doivent envoyer leur lettre d’intention et leur CV aux co-présidents du CCIM (M. Engin Özberk et Dr John Thompson) à l’adresse : CMIC@NRCan.gc.ca Pour de plus amples renseignements, veuillez aller au site du CCIM, www.cmic-ccim.org, sous Directeur exécutif. Participez à cette occasion exceptionnelle de modeler l’avenir de la recherche minière au Canada.

48 | CIM Magazine | Vol. 4, No. 3

supply side Prepare for the recovery The current lull is an opportunity for mining companies to do some serious thinking and smart positioning The mining industry is a cyclical thing and we are now entering a low period that may last for some time. Mining suppliers need strategies, not only to get them through the difficult time, but also to prepare them for the recovery. Here are some things that you may wish to think about. First of all, the downturn will not eliminate the current skilled labour shortages in the industry. The Mining Industry Human Resources Council projects an annual labour demand of 4,600 people until 2016, even under conditions of industry contraction. Based on retirement alone, the mining industry will continue to experience pressures in attracting, recruiting and retaining skilled workers through 2009. Each job that you save today is one that you won’t have to pay to fill later. Do everything you can to be a good employer and retain staff. Despite the current negative commodities, financial and economic situations, there is every reason to stay positive. Based on the five cycles over the last 50 years, there will be another expansion in mineral exploration, development and production. Convey your confidence in this to your employees and colleagues, even though it is difficult to predict when things will pick up. Prices of most commodities — other than gold — while lower than a year ago, are quite high by historical standards, although production costs have risen substantially. The fundaby Jon Baird mentals for a continuing strong demand for mined products are still in place due to the growth of developing economies. Because exploration will suffer heavily, the world may find itself even further behind in its resource requirements and an even bigger boom may result.

It takes time to develop new products and services. The initial stages of marketing also take time before an initial sale, particularly if the development is a quantum jump from previous technology. Now is the time to be innovative. Time and people are becoming more available. If money is lacking, search out partnerships. Investigate federal and provincial programs that assist with R&D. Be ready with new offerings when markets pick up.

Each job that you save today is one that you won’t have to pay to fill later. Mining companies are cost-conscious, even in the best of times. In good times, it is the only way they can make more money. Now, it is essential to keep costs low in order to keep mines open. Thus, any new ways that you can invent to save time and money in extracting or processing will give you a competitive advantage. When faced with shrinking revenues, some managers find it wise to reduce their marketing efforts. Others know that stopping marketing is like not paying your electricity bill — eventually the lights will go out. Develop strategies that will ensure that you retain your key clients. Ensure that your presence in the marketplace is maintained through advertising at trade shows, in print and on the web. Marketing need not be expensive if it is well planned and executed. If you have time, you should consider

A page for and about the supply side of the Canadian mining industry

attending more business events and making cold calls on new potential clients. Another idea is to use extra time to prepare that technical paper to publish or present at the next convention. A slow period is the time to improve your selling punch. When was the last time you or your employees took a sales course to sharpen your skills? What about your network of sales agents or distributors? You could motivate them by running a meeting at your plant where they could learn more about you and your products or services, to help them sell better. The world is a big place. There are opportunities in places that you may not have thought of. Do some research. Investigate foreign markets. Ensure that you are aware of all the services that governments offer to help exporters, and that you use those services that will help your business. The current spate of mine closures, mothballing of development projects and slashing of exploration spending will not have hit all supply firms equally, because many are working against backlogs. However, do not ignore the fact that the low part of the mining cycle is upon us. The earlier that you realize that the approaches that you have been using in the past few years of expanding markets will probably not serve you well in the next year or two, the better. Prepare now for tough times, followed by a recovery. CIM

About the author Jon Baird, managing director of CAMESE and president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining. May 2009 | 49

canadians abroad From Kamloops with mucho gusto Career development has global impact for mining veteran

Work continues on the mill that Rondestvedt hopes will be the first of many he sees completed in the Americas.

Scholastic underachievers and human resource people alike take note of Craig Rondestvedt. Not long ago, he was comfortably employed at Teck Cominco’s Highland Valley Copper mine outside of Kamloops, British Columbia. He knew his stuff. He had worked his way up to superintendent with the knowledge and skills he had acquired over his 31-year career on the site. Rondestvedt figured he’d carved out his niche at the mine and gone as far as could be expected. “I was one of the few people that made it to the superintendent level who didn’t have an engineering degree,” he explained. “Frank Amon, operations manager, believed that you should take at least one course per year. I by Ryan Bergen decided I’d take one in Toronto — I thought he would say no, due to cost, and he wouldn’t ask me anymore.” Rondestvedt didn’t have any illusions about the future. “I was 46 years old and felt that my chances of moving higher than a superintendent were slim to nil. For a person with my education (GED 12) at that time, becoming a superintendent of mill operations

50 | CIM Magazine | Vol. 4, No. 3

was unheard of, as the tendency was to have metallurgical engineers.” The three-day course on project management lit a fire in Rondestvedt that he has been feeding ever since. He followed the course up by earning a Master’s certificate and then a Project Management Professional designation, making the eight-hour drive from Kamloops to Calgary every other weekend for five months to attend his course. Currently, he is taking advantage of the Business Administration Graduate Diploma program that Teck offers through Simon Fraser University. Rondestvedt related his story on a late summer morning in March. If that sounds a little backwards, it is. That trip to Toronto turned his world upside down, both professionally and geographically. “For the last three years I’d been saying that my ideal job would be just going around the world starting up new mills for Teck,” said Rondestvedt over an Internet phone connection from his ocean-side apartment in La Serena, Chile. He is now just a few months into his ‘ideal job’ as commissioning manager at the Carmen de Andacollo copper mine. For the next two years, he will oversee the startup

of a new semi-autogenous grinding mill at the mine in north-central Chile, and mentor those who will take over once his term there ends. Current economic conditions have made the future less clear for Rondestvedt, but he is content with his choice, enthusiastic about the broadened horizon and excited about the challenges in South America. The impact of Rondestvedt’s new worksite — the Andacollo mine — on the area is broad and deep. It sits next to the village of the same name, about 80 kilometres southeast of La Serena. The proximity allows Teck to draw many of its nearly 900 employees and contractors from the mountain town, but it creates a unique challenge. Though the area is rich in minerals, it gets very little rain. Dust raised from blasting and transportation in the open pit truck-and-shovel operation can linger and settle over the town. Teck now uses dust suppressants on unpaved roads and varies its blasting techniques depending on wind conditions. The arid climate also imposes a specific challenge for the new SAG mill that will up the amount of material processed from 12,000 to 55,000 tons per day. The increased volume will demand more water and put the mine in competition for the scarce resource. Teck is still in the process of working out a sustainable water agreement with the government and local stakeholders. On a smaller scale, Rondestvedt, the only Canadian that Teck has working at the mine, said he has already made an impression. Since he began at the end of December, he has been busy ironing out some cultural and linguistic wrinkles at work. The language of the workplace is Spanish. A six-week blitz of full-time Spanish lessons in Santiago last fall had Rondestvedt swooning, but he

canadians abroad said with his new language and broad experience, he’s now able to “muddle through” day-to-day operations. He admitted he does rely on the forbearance of his colleagues the odd time when he tramples over the subtleties of Spanish — unlike Rondestvedt, a Chilean probably wouldn’t be forgiven for calling a co-worker’s girlfriend (novia) a man (novio). Only three months in, Rondestvedt boasted he has won the battle for punctuality in a culture well known for its indifference to it. “It drives me insane that they don’t think about being late,” he laughed. “One day somebody came to a meeting 15 minutes late, so I just sat there, not speaking until someone asked me what was going on. I told them ‘if you waste 15 minutes of my time, I’ll waste 15 minutes of yours.’ They come on time now.” Despite the initial differences, Rondestvedt said he has a high regard

Craig in his office in Carmen de Andacollo

for his workmates and he, in turn, has a standing invitation to join them at the local place of worship — the football stadium. He and his wife Louise keep in touch with their two grown children and family over the Internet and are eager tour guides for visiting family, particularly those interested in sampling the offerings of the various Pisco

distilleries — the local alcohol made from grapes. For the moment, he is content walking the beach, playing golf with his wife and exploring the area around his new home. Louise, a retired bookkeeper, said she has reinvented herself as a Spanish student, an English teacher and an exterminator. “The ants! The ants!” she declared, are the biggest domestic challenge, constantly blazing trails up and down and across the apartment. The other is the shopping — their furniture was chosen in La Serena, but had to be shipped in from Santiago, 400 kilometres to the south. The little nuisances are part of the adventure that Rondestvedt said he wants to pursue for a long time. “I would like to do this even when I retire,” he said of his work getting the new SAG mill going. “They could just give me a call and I’d be there in a heartbeat to do it.” CIM

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MAC economic commentary Is there light at the end of this tunnel? Amidst the doom and gloom of present economic times, it can be difficult to find signs of optimism that could generate light at the end of the proverbial tunnel. While economic predictions can be easily contradicted, it seems evident that there are some positives emerging from the present recession and that, more importantly, mineral prices are destined to rebound in the not-too-distant future.

Sanity is returning to input costs and waiting lists The business environment that existed until mid-2008 was one of frenzy, cost explosion and waiting lists. Companies seeking to buy mining equipment were assigned lengthy delivery times. Basics such as large tires for mining trucks carried a oneby Paul Stothart year or longer delivery lead time. As noted in 2005 by the president of a Virginia machinery company, “there are eight people trying to get the same tire.” Capital projects that began with cost budgets in the hundreds of millions ended with budgets in the billions. Companies reported that capital investment cost projec-

tions were doubling or more during the 2005 to 2007 timeframe. The need for $16 per hour fast food workers in oil sands country was going unmet. Marine shipping costs and timelines were expanding rapidly. These realities were the by-product of both a U.S. economic model that was amassing business debts, personal mortgages, government deficits and shady financial business practices at record levels, and the corresponding growth of Asian manufacturers supplying to this model. One benefit of the collapse of this model is that business costs and timelines are moving towards more sustainable levels. In marine shipping, for example, the Baltic Exchange Index shows that U.S. to China freight rates of $94 per tonne in early 2008 fell to $26 by the end of the year. BHP Billiton noted that the build-up of iron ore stockpiles in China that prompted suppliers to defer shipments last year is ending — causing ore shipments to rise. In one highly important Canadian business sector, the oil sands, the effect of the present slowdown is that Peter Lougheed’s vision may ultimately be realized — that an orderly, sustainable and manageable growth takes the place of the recent frenzy.

Most companies are in a mode of battening down the hatches and returning attention to their properties and assets

Developing countries are focusing on their own consumption In the case of China, several million people are moving from rural to urban regions each year. To prevent potential social unrest associated with growing unemployment in its export-oriented manufacturing sector, the country is turning attention to its own internally generated growth. The potential is enormous. Consumers in the United States own 765 motor vehicles per 1,000 people, while Chinese consumers own 10. There are 20 times more personal computers per capita in Canada than in China. Chinese banks have healthy balance sheets, and the corporate and consumer sectors have low debt loads. The $586 billion economic stimulus plan announced by the Chinese government in November reinforces the notion of the country playing a significant catalytic role on a global scale through investing in roads, housing, railways, airports, power projects and other domestic areas. A similar transition will be seen in other developing countries. 52 | CIM Magazine | Vol. 4, No. 3

MAC economic commentary The reality emerging from the present global slowdown is that there remains a significant need for metals and minerals in China and other countries that will feed internal demand for infrastructure and consumer/industrial products.

Foreign governments are building more realistic investment environments A by-product of the mineral price boom of the 2003–2008 years was that a number of national governments sought to dramatically increase their share of resource revenues. Ecuador cancelled concessions, suspended mining and imposed a windfall profit tax. Mongolia introduced windfall profit taxes on copper and gold. The Democratic Republic of Congo examined dozens of mining contracts in the aim of increasing the government share. Argentina imposed a tax increase on exports. Venezuela welcomed the nationalist Chavez revolution. Bolivia spoke of a desire for “nationalization without expropriation.” The governments of Uzbekistan and Russia presented numerous tax and equity control challenges to foreign investors, while the Kyrgyz government proposed new taxes and possible state consolidation. In the present downturn, with fewer companies spending fewer global investment dollars, overly aggressive governments will find themselves with significantly reduced exploration and capital expenditures taking place in their countries. Those countries that wish to attract business investment in mineral development are choosing to move along a different path — namely, creating attractive investment regimes and enhancing the breadth and accuracy of their geological mapping databases. Smart governments are also trying to reduce permitting delays and improve regulatory efficiencies — actions that should ultimately improve the industry’s ability to respond to future demand growth.

ing smelting and other process efficiencies, prioritizing properties for future development as mineral prices increase — these are the types of activities that are increasing in importance for senior management. The recession is forcing companies to focus on getting their costs under control. Geology and process engineering expertise is becoming more important — M&A expertise less so. The combination of these four factors will put the global mining industry in a much stronger position to benefit from the inevitable upswing that will become evident during the coming 12 to 18 months. CIM

About the author Paul Stothart is vice president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues.

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Companies are returning to their knitting The frenzy of recent years was reflected as well in the mergers and acquisitions activity that surrounded the mining industry. In Canada, Xstrata bought Falconbridge for $20 billion, CVRD bought Inco for a similar amount, and Rio Tinto bought Alcan for $38 billion. A possible global alignment between Rio Tinto and BHP Billiton was in discussion, valued at well over $100 billion. Worldwide, in 2006 there were 1,145 M&A deals in mining, valued at some $176 billion. Boards of directors of many leading companies were seeking aggressive acquisitions plans from senior management. The slowdown of the past six months is causing companies to return to their knitting. While M&A activity will undoubtedly continue (there are felt to be many bargain targets for cash-rich companies, with gold companies particularly well positioned), most companies are in a mode of battening down the hatches and returning attention to their properties and assets. Increasing mine yield, improv-

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eye on business Canada: a global mining centre of excellence Why Canadian mining retains its leadership position despite the global economic crisis The ongoing global economic crisis has hit the mining industry hard. Most commodity prices are down significantly from historic peaks and many mining companies are scrambling for financing or seeking mergers to stay alive. Canadian companies have not been spared, with numerous bankruptcy and CCAA filings highlighting cash flow and financing problems. The Canadian mining industry has been through many booms and busts in the past, always emerging strong and resilient. While it is premature to declare an imminent end to the crisis, conditions will improve eventually. When they do, any mining industry upswing is certain to have a large Canadian stamp on it. Canada remains among the world’s foremost mining nations. The Canadian mining industry — with its concentration of knowledge, services, capital, effective policy and research and development centres — forms what Michael Porter, in his groundbreaking study in The Competitive Advantage of Nations, would call a “cluster” or a “centre of excellence.” While global mining financings have all but dried up since the economic crisis escalated in the fall of 2008, in Canada, gold financings have recently begun to sprout and multiply. In January and February 2009, over $2 billion was raised through financings in Canada, primarily, by Robert L. Shirriff, but not exclusively, assisted by by gold companies. Andrew E. Derksen For example, Kinross Gold recently completed a US$415 million public equity offering, Rubicon Minerals raised C$40 million through a bought deal, and IAMGOLD announced a C$300 million financing in March. Clearly, investor appetite for gold has been a key reason. Canada is a 54 | CIM Magazine | Vol. 4, No. 3

jurisdiction of choice to raise financing because of investor confidence in its capital markets, largely due to Canada’s securities regulatory framework, which favours relevant, transparent disclosure. The driver for this was the implementation of National Instrument 43-101 in 2001, which governs disclosure standards for mineral projects. The Instrument has raised the bar on mining technical disclosure requirements globally, boosting investor confidence in Canadian capital markets. To maintain Canada’s edge, the Canadian Securities Administrators launched an initiative to review the Instrument, inviting minerals industry comments on possible changes to it so as to keep technical disclosure requirements relevant and effective with regard to mineral industry development. Professional services and mining technology companies also form a key part of the Canadian mining centre of excellence. Canada has a significant concentration of the corporate and technical intellectual talent required by mining. Canadian-based companies have captured significant world market shares for geophysical equipment and software and are key providers of drilling and other critical services.1 Much of this is created or refined at Canadian universities, providing the industry the further advantage of highly skilled people. Canadianbased mining companies carry out more international mineral exploration, and more mining finance is raised in here than anywhere else in the world. Canadianbased companies Robert L. Shirriff

carry out over 40 per cent of global exploration, with over 8,000 projects in various states of development in over 100 countries.2 Canadian government mining policy sets global standards. The Fraser Institute Annual Survey of Mining Companies for 2008-2009 ranked seven Canadian jurisdictions in the world’s top ten for attractiveness of mining policy, with Quebec ranking number one in the world.3 This has helped make Canada the world’s largest recipient of mining investment, with a 20 per cent share of the total. Canada is a one-stop mining shop: it has the human resources, the technology and the capital to fund exploration leading to the discovery and development of economic ore bodies. While Canadian and non-Canadian miners are currently being hit hard by the economic crisis, the global mining industry will survive. We can be confident that, with its centre of mining excellence, Canada will continue to play a major role within it. CIM \1 Canada in the World of Mineral Exploration: A Growing Industry with a Rock Solid Foundation, Department of Foreign Affairs and International Trade, Trade Commissioner Service (March, 2003). 2 Facts & Figures 2008, a Report on the State of the Canadian Mining Industry, the Mining Association of Canada. 3 Seven Canadian Provinces remain in the top 10: Ontario (10), Saskatchewan (9), Manitoba (8), New Brunswick (6), Nfld. Labrador (5), Alberta (4), and Québec ranked (1) in the top spot overall.

About the author Robert L. Shirriff has been a member of Fasken’s Global Mining Group since its inception. His love of the practice comes from his love of mining people, whom he believes are some of the most interesting and creative problem-solvers in the world. Andrew E. Derksen is an associate at Fasken Martineau DuMoulin LLP.

innovation Making mining innovation happen The Canadian Mining Innovation Council is committed to facilitating the generation and dissemination of knowledge for and about the industry This year’s Distinguished Lecturer Program proved to be a real opportunity to meet some of the many mining people across our fine country. At every stop, there was always something new and interesting — yet another improvement where people have leveraged a new technology or best practice, or where they have invented that next step for mining effectiveness that becomes a benchmark for the rest of industry to strive for. In other words, innovation is happening all across Canada, and that’s a good thing for mining as a whole. A question arises as to whether we are living up to our national potential to become a global mining leader. Consider that we attract more global mining exploration spending than any other country in the world, and that we rank in the top five countries globally, in terms of supply, of 14 important metals and minerals. We are well positioned to take a global mining leadership role, with innovation as a key to staying globally competitive. Yet there is a sense that our effectiveness and support for mining research and technology development could be better. That is where a group of mining leaders from industry, academia and government stepped in to find out why. Under the banner of the Canada Mining Innovation Council, 17 of these minby Gord Winkel ing leaders formed a transition board that went across Canada to enlist the help of some 150 other mining leaders in defining the opportunities for achieving global innovation leadership in mining. In seven workshops across the country, the following issue areas were identified: • having highly qualified people

• realizing a strong culture of collaboration among firms, academia and government • a limited ability to network on research and technology work • a lack of widely supported targeted focus areas for research • low brand recognition for mining as an important industry in the country With the above opportunity areas identified, five subgroups were formed to focus on each. Good work is proceeding in each subgroup to advance actions that will address these areas, and we shall hear more about this in subsequent articles. Now, we shift gears and directly examine the brand recognition of mining as an industry player in our country. As part of the Distinguished

Lecturer series on innovation, attendees were asked to pretend that they were living in a large population centre in Canada, and that their views on mining would be formed from commonly utilized information sources such as the media and the web/Internet. Participants were then asked to give a pass, fail or neutral response to the following statements: • Mining is important to society (important economic contribution and a supplier of resources). • Mining responds responsibly to society (environmental performance supported). • Mining is a high-technology business (a leader in research and development). • Mining is excellent in risk management (achieving safe work).

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innovation Participants, acting out their roles, responded at seven different sessions to rate the above four statements with a failing grade, and occasionally a neutral grade at best. This needs to change. Those of us in the mining and mineral processing industry all know the above statements to be true, and the word needs to get out. Mining is in fact an economic engine for Canada, supplying 4.8 per cent of our GDP, 55 per cent of rail tonnage, 70 per cent of port volumes and 19 per cent of exports. Further, we acknowledge that mining supplies the materials and means for everything from vehicles, computers and electricity to the latest equipment for green technologies like solar cells, hybrid cars and wind farms. Mining has responsibly integrated new technologies to significantly reduce the release of materials into the environment. From 1993 to 2006, reductions were achieved in materials such as mercury (91 per cent), lead (84 per cent), zinc (76 per cent),

hydrogen sulphide (70 per cent), copper (58 per cent) and cadmium (51 per cent). Greenhouse gas intensity index reductions over a 15-year period for the metal smelting and refining sector were an impressive 36 per cent. On the technology front, we spent $538 million in research and development, employing some 4,600 people. This expenditure is six times that of agriculture, forestry and fishing combined. If you have ever seen first-hand the technologies that go into a 400-ton truck or supporting shovel, deep mining, mine plans or tailings management, it would become clear that mining employs the latest and best technologies available. Finally, on the safety front, it is instructional to note that many mining firms are achieving extended runs with no lost time injuries and operating at injury frequencies far below the provincial averages that report aggregate industry performance. The CIM J.T. Ryan awards are a testament to this achievement.

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The real story of the importance of mining and its related performance achievement needs to be communicated widely. In this regard, the Mining Association of Canada, which compiled many of the statistics quoted herein, has done wonderful work to promote mining in Canada. Now itâ&#x20AC;&#x2122;s up to us. We need a better scorecard result in the above dimensions of public perception if we are going to attract the support from society and government on a national scale to spur on innovation in mining through wellcoordinated targeted research and technology development. Every one of us can be an ambassador for mining in our society by presenting the facts towards providing a more balanced and representative perspective on mining in Canada. The Canada Mining Innovation Council has set as its vision that â&#x20AC;&#x153;Canada is a Global Leader in the Mining Industry Through Leading Edge Research and Innovation.â&#x20AC;? It is a picture of the future we can readily subscribe to, and it can be achieved through the unified commitment and support of industry, society and government. Itâ&#x20AC;&#x2122;s a vision that we can all help support to keep innovation happening in mining. CIM

About the author Gord Winkel is chair of the Surface Mining Association for Research and Technology (SMART). He is a strong supporter of workplace safety and the advancement of mining technology as a means to improve both mining industry effectiveness and the quality of life for mining people.

student life A student of the industry A future mining engineer realizes that industry involvement is an essential component of his education

UBC mining engineering students view equipment demonstrations at Highland Valley Copper.

As a class that entered the mining department at the University of British Columbia at the peak of a commodity boom, we were sold on the benefits of becoming a mining engineer. Students tuned in with satisfaction as professors and industry leaders promoted financially rewarding careers, boundless travel opportunities and immense voids in the corporate sector waiting to be filled. We listened to graduating students present the lineup of offers they had to choose from while desiring that our by Mohsen Chowdhury own futures follow a similar trail. Having witnessed the recent meltdown in the mining world, this trail has led students to an unforeseeable end, if any. Captivated by the glamour and glory of this sparkling industry, we may have overlooked the true meaning of being a mining engineering student. Upon entering university, many of us knew very little (if anything) 58 | CIM Magazine | Vol. 4, No. 3

about mining engineering. Our knowledge of this field has increased manyfold since joining this department, yet there is much to be understood about the industry. We often speak of linking to the industry, but in order to effectively establish this connection, we must understand the fabric on which this industry is built. In his “Introduction to Mine Engineering” class, Professor Malcolm Scoble challenges secondyear students to explore this fabric made of the relations between major, intermediate and junior mining players, through assignments and presentations. Combining practical assignments with memorable fieldtrips, such as our annual trek to Highland Valley Copper, has been a sure way to spark our interest in the industry we will soon enter. At UBC, these activities are paired with regular student participation in industry events to give us a better under-

standing of the importance of mining in our society. One industry group that particularly encourages active student involvement is CIM. In Vancouver, the local CIM branch creates opportunities for us to associate with experienced professionals and gain insight into the future of mining. From organizing industry-sponsored student nights to engaging us in volunteer roles within the organization, CIM helps bridge the gap between students and industry. At the first annual UBC-CIM panel held in March to discuss the benefits of CIM, Tom Broddy of Taseko Mines presented a key message that the mining industry is a community and, like most communities, it is run by volunteers. He mentioned that new mining engineers must contribute more than math, science, analysis and good judgment to their regions of practice in order to be successful. Another speaker on the panel, Patricia Dillon of Teck, stated that we need to become students of the industry in order to understand our place in this tight-knit community. Indeed, the industry plays a large part in defining the role of a mining engineer, but is there a place for students in this commune? We are often told of the skilled labour shortages facing the mining industry around the world. In Canada, the retirement of babyboomers is increasing the demand for new faces to fill familiar positions. In order to walk in the shoes of these highly experienced industry leaders, it is crucial for today’s students and graduates to get trials and test runs through summer jobs and EIT placements. Otherwise, the large gaps in practical “know- how” that retiring professionals leave behind

student life may never be closed, and the promise of pulling young individuals into senior level roles may end in a leadership meltdown. Truly, it is a triple combination of education, experience and involvement that will help define the trail of a mining engineer from student to industry and ultimately to society. So what is the true essence of being a mining engineering student? Simply put, it is to learn. Rather than filling cover letters with company facts, we must demonstrate our core purpose: to study how we, as contributing members of a worldwide community, can recover the building blocks of technology and infrastructure. Responsibly doing so from summer jobs to upper management, we

can help sustain economic growth and promote social prosperity across the board. No longer holding claims to the glory and glamour of our history, we must hold ourselves accountable for positively transforming the way we practice and the way society perceives our profession. The industry is in need of students who value the meaning of mining and, as students of the industry, we are preparing to deliver. CIM

About the author Mohsen Chowdhury is a second-year mining engineering student at UBC. He is an active member of the NB Keevil Institute of Mining Engineering, CIM and Engineers Without Borders. Working with smallscale gold miners in Ecuador this summer, he hopes to gain an international outlook on the industry.

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HR outlook Labour mobility and innovation clusters The Canadian mining industry is facing significant chal- linkages between research centres and exploration sites lenges. As we sit tight to weather the storm, itâ&#x20AC;&#x2122;s worth con- and/or producing mines, then the mobility of highly sidering if this cloud actually has a silver lining, albeit one skilled workers will require continued attention. The thatâ&#x20AC;&#x2122;s hard to see. The industry has faced challenges in the past, for example the recessions of the 1990s and the early 2000s, and managed to resurface with renewed vigour. According to the Centre for the Study of Living Standards, the significant restructuring that took place, through the increased use of technology, resulted in increased productivity and a higher capital/labour ratio. During the 1989 to 2000 period, the gold mining sector increased its labour productivity by an average annual rate of 5.7 per cent and the coal mining sector, on average, by 7.4 per cent. A second outcome of the restructuring and higher capital/labour ratio was a significant increase in the demand for highly skilled people capable of using and manipulating the new technologies and processes. According to a Statistics Canada report entitled The Changing Profile of Canadaâ&#x20AC;&#x2122;s Workforce, highskilled jobs led the growth in employment in the 1990s. The mining industry will likely undergo a similar restructuring process The Mining as a result of the current recession. Industry Human This may result in a greater need for a Resources Council highly skilled and mobile workforce and for clusters of innovation. Your source for Human Innovation clusters focus on developResource solutions and ing and researching information to build strength, the means to facilitate by Jean Pierre Chabot competitiveness and the implementation of sustainability throughout technologies in these restructured workplaces. An example of an innovathe Canadian mining industry. tion cluster is the Ontario Mineral Industry Cluster Council, which gathJoin us at the Visit www.MiHR.ca ers its strength from strong education CIM Conference for valuable resources. and training networks, dynamic HR Sessions on research and development supports, May 12 & 13, 2009 engaged and collaborative industry players, and its infrastructure of knowledge. If there are to be increased

The Power of Collaboration

May 2009 | 61

HR outlook importance of labour mobility can be evidenced by the extent of fly-in/fly-out work arrangements used by the mining industry in Canada. The exploitation of market efficiencies requires the free flow of business investment and access to the factors of production: resources, capital and labour. The sustainability of the Canadian mining industry has a significant impact on the global mobility of these factors. The TSX and TSX-Venture exchanges are arguably the most miningfriendly exchanges of open market economies. According to the Canadian Association of Mining Equipment and Services for Export, Canadian mining equipment and service companies are major global exporters and provide highly specialized services and technology to both the domestic and international markets. In Canada, there is usually a high degree of access to the second factor of production — capital. As a result, ensuring the free flow of labour will continue to be a significant challenge for industry, especially over the long run. According to the Fraser Institute’s Survey of Mining Companies 2008/2009, seven of the top ten mining jurisdictions around the world are in Canada. Although the survey considers the policy attractiveness of mining jurisdictions in terms of their ability to attract and generate

free flows of business investment, it does not address the issue of labour mobility. By August 2009, recent government efforts to develop a Labour Mobility Agreement will have borne fruit, and provinces and territories will be given until June 2010 to enact legislation that increases the mobility of workers in designated occupations. In turn, MiHR is facilitating efforts at increasing labour mobility for non-designated occupations through the work of the Canadian Mining Credentials Program. In a global and interconnected market economy, barriers to the mobility of human resources impede the development of clusters of innovation, which are necessary to sustain Canada’s leadership role in mining. Furthermore, according to Human Resources and Skills Development Canada, international mobility will continue to play an important role in ensuring Canada’s economic competitiveness. As a major player in the global mining industry, Canada will need to attract and facilitate the free flow of highly skilled workers across its international and domestic borders to preserve this position. The current downturn is a time for industry to invest in human resources, research and innovation so that the technologies, processes and skills are available to the industry when the investment climate improves. CIM

About the author Jean Pierre Chabot is manager of research and policy analysis at MiHR, responsible for the analysis of HR policy options and constraints that impact the mining industry in Canada. Formerly the project coordinator for a number of Latin American projects, he brings an international perspective to issues facing the Canadian mining industry.

Achievements David Garofalo, senior vice president, finance and CFO of Agnico-Eagle Mines Ltd., has been named Canada’s CFO of the Year™ for 2009. The award is presented annually by Financial Executives International Canada, Pricewaterhouse Coopers LLP and The Caldwell Partners International to an outstanding financial professional who is passionate about the future of Canadian business. The criteria by which nominees were judged are: Vision and Leadership, Corporate Reporting and Performance, Social Responsibility, Innovation and Business Complexity. 62 | CIM Magazine | Vol. 4, No. 3

parlons-en Un moteur du développement régional du Nord-du-Québec La Table jamésienne de concertation minière (TJCM) est l’interlocuteur privilégié pour la Conférence régional des élus de la Baie-James en ce qui concerne toutes les questions d’ordre minier sur le territoire jamésien. La mission de cet organisme est de soutenir le développement de l’industrie minière sur le territoire de la BaieJames dans une optique de développement durable tout en assurant la maximisation des retombées socioéconomiques sur les populations qui l’habitent. Les représentants qui siègent sur la TJCM proviennent des compagnies, des organismes et des ministères concernés par le développement de l’industrie minière sur ce territoire. Les partenaires qui nous supportent financièrement sont la Conférence régionale des élus de la Baie-James, Emploi-Québec, le ministère du Développement économique, de l’Innovation et de l’Exportation, la Société de développement de la BaieJames, le ministère des Ressources naturelles et de la Faune et Développement économique Canada. Les principaux champs d’action de la TJCM à l’heure actuelle sont : • Le développement d’une culture de veille stratégique en ce qui concerne l’évaluation des besoins de maind’œuvre durable des par Isabelle Milord projets de développeet Régis Simard ment minier jugés significatifs et des exploitations minières actuelles. • Le projet d’extension de la route 167 sur une distance de 250 kilomètres pour atteindre le secteur des monts Otish et ses nombreux projets d’exploration minière. • Les enjeux environnementaux relatifs à l’exploitation de l’uranium dans la région Nord-du-Québec. • Les nombreux comités de développement actifs sur le territoire dont le comité ACCORD de l’indus-

trie minière du Nord-du-Québec et la Commission régionale des ressources naturelles et du territoire du Nord-du-Québec. L’une des principales réalisations de la TJCM au cours des dernières années est la mise en place du premier Centre d’étude appliquée du Quaternaire (CÉAQ) au Québec. La création du CÉAQ, en décembre 2007, découle d’une concertation de l’industrie minière, qui manifestait, dans le passé, le besoin criant de développement d’une expertise dans le domaine de l’exploration du Quaternaire. L’élaboration de la démarche ACCORD Nord-du-Québec a également été une motivation supplémentaire pour le développement d’un créneau d’excellence dans ce domaine. Le CÉAQ est un organisme de recherche appliquée sans but lucratif qui s’intègre actuellement à la structure de la TJCM. Les principales missions du CÉAQ sont le développement des connaissances des dépôts quaternaires sur le territoire de la Baie-James (spécialement leur stratigraphie et leurs patrons de dispersion) et la mise au point d’approches novatrices dans l’échantillonnage et le traitement de ces dépôts pour l’exploration minière. Afin de réaliser ses objectifs, le CÉAQ s’est doté d’une structure qui se divise en quatre secteurs d’activités : acquisition de données géoscientifiques, recherche et développement de connaissances, formation et laboratoire (incluant traitement des dépôts meubles et préparation d’échantillons de roche). Depuis 2004, la région Nord-duQuébec, principal lieu d’intervention du CÉAQ, est au premier rang quant aux investissements miniers totaux effectués au Québec selon le MRNF. Les projets d’acquisition de connaissances que nous réalisons à chaque année depuis 2002, en collaboration avec différents parte-

naires financiers dont la Société de développement de la Baie-James (SDBJ), le ministère des Ressources naturelle et de la Faune (MNRF), le Conseil Cri sur l’exploration minérale (CCEM), le Conseil régional des élus de la BaieJames (CRÉBJ), le ministère du Développement économique, de l’Innovation et de l’Exportation (MDEIE) nous ont permis de développer une expertise qui nous positionne stratégiquement considérant l’activité d’exploration minière grandissante dans la région Nord-du-Québec. Le CÉAQ travaille en collaboration avec des organismes de recherche et des laboratoires collégiaux, universitaires et privés afin d’accroître la synergie de recherche dans ce secteur au Québec et au Canada. Le travail du CÉAQ est guidé par l’innovation technologique et par le respect des normes de qualité standard de haut niveau. ICM

Les auteurs Isabelle Milord est directrice du CÉAQ. Bachelière en géologie de l’Université de Montréal (1995) et en voie d’obtenir un doctorat en ressources minérales de l’Université du Québec à Chicoutimi. Au cours de son cheminement académique, elle a été lauréate de plusieurs bourses et mérites. Régis Simard est directeur général de la TJCM depuis 2001. Il compte plus de 23 années d’expérience professionnelle diversifiée en exploration et en exploitation minière ainsi qu’en développement régional. May 2009 | 63

Boys in the pits

Photo courtesy of Nova Scotia Museum of Industry

The role of children in the history of the Canadian coal industry

Boys of the coal mines, Pictou County, ca. 1900

hrough modern eyes, their black and white images are unsettling. Disguised by the coal dust on their faces and cut of their clothes, their proportions betray their youth. Their heads are too large for their bodies; their cheeks are too round. Today, Canadian children of the same age are expected to carry their backpacks to by Ryan Bergen school and return weighted down by the inhumane burden of homework — the idea that they should be working or might even be eager to take on 40 hours or more of work each week seems absurd. Of course, “the past is a foreign country, they do things differently there.” “To keep young persons from work till they are 12 years of age will, I fear, 64 | CIM Magazine | Vol. 4, No. 3

create the objection to labour which through their life they will be unable to overcome,” argued a British mining inspector in 1870. From the height and centre of the empire, this sentiment travelled with the Welsh, English and Scottish coal miners who brought their skills and traditions to the coalfields in Canada. The number of boys working in the mines in the late 19th century depended on the region. In the collieries of Vancouver Island, most of the menial labour fell to Chinese or Japanese men, who were on average paid less than boys. In 1895, at the Nanaimo Colliery, boys could make up to two dollars per day; Chinese men were limited to $1.25. The mines of Nova Scotia, with more established Anglo communities around them, employed many more boys. At the

Sydney mines in Cape Breton, a full quarter of the mine workers in the 1880s were under 18. What compelled them to go underground varied, noted Robert McIntosh in his authoritative Boys in the Pits: Child Labour in Coal Mines. Some parents may have exploited their children; others needed the income to sustain the household. Often accidents injured or killed fathers, which forced sons to help make ends meet. However, there were perks to becoming a wageearner. “It represented a change in their status at home,” explained one historian in McIntosh’s book. “Now their sisters waited on them and they were treated like men.” The youngest, sometimes only as old as ten, were often initiated as ‘door-boys’ or trappers. They would sit by the doors that controlled the ventilation of the mining shafts and listen for the approach of horses hauling coal tubs, pulling open the doors and then shutting them once the load was clear. Sitting in the dark for hours at a time, the primary challenge was staying awake. Those who did fall asleep where shaken awake by the impatient curses of the older boys waiting at the door. Once strong enough, the boys would become drivers who guided the horses through the mine shafts. The job entailed more responsibility and considerably more risk. They had to protect the horses from being run over by tubs full of hundreds of kilograms of coal, and they had to protect themselves from the heavy equipment and the sometimes unpredictable animals. Accidents were common.

The career ladder led to the coal face. Young helpers cleaned the coal, fetched tools, minded the lamps, kept blasting powder cans full and made sure the coal tubs were rolling in and out. Once their apprenticeship was complete, they graduated to mining themselves. In mining communities, the largely abstract advantages of formal education had limited relevance to families, who for generations had sustained themselves with the lessons passed on in the dark mines. Above ground, the industrial age they were fueling would eventually make this tradition obsolete. In urban centres like Halifax and Montreal, social reformers pushing for compulsory education had been gaining momentum in the 19th century. The middle class was growing in size and influence and their quality of life was underwritten by literacy and numeracy â&#x20AC;&#x201D; skills understood to have universal value. By these new standards, the manners and language learned in the mines were coarse and unfit for children. The culture of childhood was being redefined â&#x20AC;&#x201D; the playground was invented; compulsory school attendance and laws limiting child labour were on the books, even if they were not being enforced. Then, as now, parents resented being told by the state how they should raise their children. Work in the mines, however, changed as well. In the 1880s and â&#x20AC;&#x2122;90s mechanization and a shift from the bord-and-pillar technique to longwall mining replaced the handson skills of individual miners. Engineers and managers, beneficiaries of formal education, now directed production. Over the next few decades, with the exception of the First World War, steady employment was reserved for men, and boys, just as women had been a century before, were cut from the eligible workforce.

Social attitudes kept pace; new expectations of childhood and the concept of â&#x20AC;&#x2DC;adolescenceâ&#x20AC;&#x2122; took root. It is difficult now to see the grimy, chubby black and white faces and consider the

boys as anything but children and victims â&#x20AC;&#x201D; a characterization they would likely bristle at and might respond with a string of curses, the colour rising in their cheeks. CIM

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Business Intelligence tools for LatAm mining opportunities: Daily newsletters Weekly summaries / Executive Q&As News Alerts Company profiles 12 â&#x20AC;&#x201C; year news archive Monthly mining intelligence reports Events calendar and moreâ&#x20AC;Ś

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All photos courtesy of Alexis Minerals Corp.

featured mine

An arial view of the Lac Herbin operation

Golden Opportunities Alexis Minerals has big hopes for its Lac Herbin gold mine, which went into full production late last year. Building a good reputation so as to attract the right people with the right skill sets is an integral component of realizing its aspirations. by | Peter Diekmeyer

One market truism, from which the mining industry is certainly not exempt, is that reputations generally have to be earned. So, while rising gold prices quickly boost the market caps of larger, diversified players, smaller ones often have to work harder to get noticed. One such company is Alexis Minerals Corp, whose Lac Herbin mine, located in Quebec’s Val-d’Or region, went into full production late last year. Led by CEO and long-time industry veteran David Rigg, Alexis Minerals’ strategy is to use the cash flows generated from its Lac Herbin mine and its Lac Pelletier reserves, slated to go into production this year, to fund a full-scale research, development and operations player. “These are substantial ore bodies,” said Rigg. “We call mines with the resource potential of Lac Herbin “company makers” because they have

the potential to be the backbone of long-term integrated mining businesses.” Rigg isn’t kidding. Gold is being discovered at the Lac Herbin operation faster than it is being extracted. As of the end of last year, measured resources at the Lac Herbin mine stood at 124,800 tonnes, grading 9.2 g Au/t for 37,100 ounces of gold — an impressive 180 per cent increase as compared to December 2007. Furthermore, the grading of those measured resources represented a sharp increase from the previous measurement (6.8 g Au/t).Total measured and indicated resources at the mine by year end 2008 were 856,300 metric tonnes, at an average yield of 7.5 g Au/t. That works out to 206,600 contained ounces of gold, or five years’ supply at the company’s projected production rate of 40,000 ounces per year. May 2009 | 67

featured mine 1.

3. 1. Gold bars from Lac Herbin gold pour; 2. Workers view a large underground quartz vein; 3. When the mill comes into full operation, Alexis expects to decrease its overall milling and shipping cost by between $10 and $15 per tonne by next year.

Val-d’Or: a long-time active mining district Quebec’s Val-d’Or region (the rough translation is “valley of gold”), where Lac Herbin is located, hosts an abundance of highly attractive mineral resource deposits. The area has been an active mining district since the early 1930s, when the Lamaque mine first began production. Since then, with the help of the Quebec government, the region has attracted a steady flow of investors seeking to leverage those resources. According to the Fraser Institute, Quebec is the number one location in the world in which to conduct mineral exploration, development, extraction and processing. The lead time required to get permits and to round up the required authorizations are respectable by international standards. Furthermore, although the generous tax credits that the provincial government offers pure exploration companies have decreased as Alexis has graduated to becoming a producing mining company, these were a significant factor in attracting Alexis Minerals to the province. That said, according to Patrick Sévigny, mine manager at the Lac Herbin operation, the Val-d’Or region offers developers advantages that go far beyond the resources available there. “Because there are so many mines already in operation around here, it’s a great place to do business,” observed 68 | CIM Magazine | Vol. 4, No. 3

Sévigny, who grew up in Val-d’Or and considers himself fortunate to able to pursue his career in his home town. “There are a lot of suppliers here that support the industry,” said Sévigny, pointing to buildings bearing names such as Komatsu, Hewitt Equipment and, with a chuckle, one marked Molsons. “There are also between 30 and 35 reputable drilling and other mining contractors around town, which helps out a lot.”

Golden history The area around Lac Herbin has been known to contain gold deposits for some time. Two other operations, Dumont and Ferdeber, had previously been mined on the Alexis Minerals properties, not far from the Lac Herbin site. But it was only in 2003 — the year that CEO Rigg joined — that the company first took a stake in them. Since then, Alexis has amassed the largest land package in the area, totalling over 1,000 square kilometres. By the middle of 2007, a feasibility study of the Lac Herbin project, conducted by Golder Associates, was completed. The study, which focused on the measured and indicated mineral resource estimates compiled earlier by InnovExplo, concluded that the deposit was economic to produce at then prevailing gold prices. A similar study,

featured mine 1.

3. 1. The recently purchased Aurbel mill has a potential capacity of 1,400 tonnes per day; 2. Drilling two kilometers of rods; 3. Core stacks at Lac Herbin

conducted around the same time, concluded that another nearby site, the Lac Pelletier gold deposit, to which Alexis Minerals also held the rights, was economical to operate and could generate results roughly similar to Lac Herbin.

The right stuff According to Sévigny, one of the major attractions of the Vald’Or region is its labour force, which encompasses substantial mining industry skills sets. Furthermore, a good crop of potential employees is currently available, due to recent layoffs by many non-gold base metals producers in the region. Additionally, new talent is constantly coming down the pipeline. “There are many families whose key breadwinners were employed in mining and related sectors, which offer fairly highpaying jobs for this region,” said Sévigny. “We also have a steady flow of students from the local school board coming to work at the mine on unpaid internships, to learn about how the industry operates in the real world. This gives us an opportunity to identify talent early and to pick out the best people available.” Although one might rightfully consider mining to be first and foremost a resources industry, Rigg offers a different perspective. “These are extremely complex exploration and development mandates,” he explained. “It is crucial that when a new company comes into an area, they attract the

right people with the right skill sets. So building a good reputation quickly is very important.” According to Rigg, when a new mining operation begins to set up shop in a town, the first hires are the most significant, as they are the ones who will provide the feedback to the rest of the community about what kind of operation the company is running. The commentary they bring back to the town’s school association meetings, bars and bowling alleys will determine in large part how easily the company will be able to fill its ranks. “If you pick one or two good leaders, then a lot of the others tend to follow,” said Rigg. “The key for us was hiring the right department heads. If you get good people there, you can generally pick and choose from the contacts that they have worked with over the years.”

New synergies Alexis Minerals officers are also quite excited about work being done on the Lac Pelletier gold deposit, which is located in nearby Rouyn-Noranda. Bringing this deposit into production would substantially boost cash flow at the company, as well as set the stage for synergies with Lac Herbin projects, stemming in particular from combined milling of output from the two bodies. The company expects results from a new and updated pre-feasibility study commissioned May 2009 | 69

featured mine

last year to be positive, and projects the extraction of between 35,000 to 40,000 ounces of gold per year from the deposit starting in 2010. One of the biggest questions related to the Lac Herbin site was how Alexis was going to conduct its milling operations. As a short-term measure, company officials decided to contract out this key part of the supply chain. The ore produced at Lac Herbin is currently batched for a couple of months, and then shipped out to the mill where it can be batch processed all at once. However, the milling contractor recently raised its prices to the point that outsourcing was no longer the ideal solution economically. Over the longer Drill barge on Lac Herbin term, as output from the Lac Pelletier operations begins to money ($4.5 million). That said, when the mill comes into full come on stream, as well as potential for new discovery near the operation, Alexis expects to decrease its overall milling and Dumont and Ferdeber mines, a more permanent solution will shipping costs by between $10 and $15 per tonne by next year. be needed. With this in mind, Alexis Minerals recently purDespite Lac Herbin’s status as a relative newcomer, Rigg is chased the Aurbel gold mill, mothballed since the 1990s, which very optimistic about the operation’s future. “It takes a while is located just one kilometre east of the Lac Herbin mine and to build market confidence,” he said. “Once we have a couple has a replacement value of $36 million. of quarters of consistent production under our belts, and The Aurbel mill has an impressive potential capacity of when Lac Pelletier comes on stream and the new milling 1,400 tonnes per day, and getting it running again will require operation is fully upgraded and operating, the value inherent only a modest investment of both time (five months) and in our shares will become increasingly apparent.” CIM

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70 | CIM Magazine | Vol. 4, No. 3

mine en vedette

Chargement du minerai à l’usine de la mine Lac Herbin

Une vérité commerciale qui va de soi, même pour l’industrie minière, est qu’il faut gagner sa réputation. Pendant que les prix de l’or croissants amplifient la capitalisation du marché boursier des plus grandes compagnies, les plus petites doivent travailler plus fort pour se faire remarquer. Une telle compagnie est la Corporation minière Alexis, dont la mine Lac Herbin, située dans la région de Val-d’Or, est entrée en pleine production à la fin de l’an dernier. Selon David Rigg, président et directeur général, la stratégie de la Corporation minière Alexis est de se servir des flux de trésorerie générés par la mine Lac Herbin et les réserves de Lac Pelletier, laquelle mine devrait entrer en production cette année, pour financer une compagnie de premier plan en recherche, développement et exploitation. « Ces gisements sont substantiels, ils peuvent signifier la réussite de la compagnie », dit M. Rigg. Il ne badine pas, on découvre de l’or à la mine Lac Herbin plus rapidement qu’on ne l’extrait. À la fin de 2008, les ressources mesurées et indiquées étaient de 856 300 tonnes métriques, à une teneur moyenne de 7,5 g Au/t. Cela signifie que le gisement contient 206 600 onces d’or, soit une durée de vie de cinq ans au taux de production planifiée de 40 000 onces par année.

Val-d’Or : un district minier actif depuis longtemps La région de Val-d’Or est un district minier actif depuis les années 1930 alors que la mine Lamaque entrait en production. Depuis ce temps, et avec l’aide du gouvernement du Québec, la région a constamment attiré des investisseurs. Selon le Fraser Institute, le Québec est la meilleure place au monde pour explorer, développer, extraire et traiter. Les délais pour obtenir les permis et les autorisations requises sont tout à fait dans les normes internationales. De plus, même si les généreux crédits d’impôt offerts par le gouvernement provincial ont diminué depuis qu’Alexis est devenu une compagnie minière productrice, ils ont contribué à attirer la compagnie dans la province. Selon Patrick Sévigny, directeur de la mine Lac Herbin, la région de Val-d’Or offre des avantages bien au-delà des ressources disponibles. M. Sévigny vient de Val-d’Or et se compte chanceux de poursuivre sa carrière dans la ville natale. « De nombreux fournisseurs supportent l’industrie », dit-il en pointant aux immeubles portant leurs noms : Komatsu, Hewitt. « Et même Molson », ajoute-t-il avec un sourire. « La ville comporte aussi une trentaine May 2009 | 71

mine en vedette d’entrepreneurs en forage et autres services miniers, ce qui aide beaucoup. » On savait depuis longtemps que la région contenait des gisements d’or. Deux anciennes mines, les mines Dumont et Ferdeber, avaient déjà été exploitées à proximité. Mais ce n’est qu’en 2003 — l’année où M. Rigg s’y est joint – que la compagnie a acquis de nombreux terrains, soit une superficie de plus de 1 000 km2. La firme Golder et Associés a terminé une étude de faisabilité du projet Lac Herbin vers le milieu de 2007. L’étude, qui ciblait les ressources minérales mesurées et indiquées compilées auparavant par InnovExplo, concluait que le gisement était Inspection d’un large filon de quartz à la mine Lac Herbin. rentable à exploiter au prix de l’or alors en vigueur. Le projet du gisement aurifère Lac ce gisement augmenterait les liquidités de la compagnie en Pelletier, aussi propriété de la Corporation minière Alexis, plus d’établir des synergies avec le projet Lac Herbin, spéciétait également rentable et pourrait donner des résultats fiquement le traitement du minerai des deux gisements. Les semblables à ceux obtenus pour le projet Lac Herbin. résultats d’une étude de pré-faisabilité sont positifs et le gisement Lac Pelletier devrait produire de 35 000 à 40 000 Les bons employés onces d’or par année à partir de 2010. Selon M. Sévigny, l’un des principaux attraits de la région L’une des principales préoccupations était le traitement est la main-d’œuvre. En raison des récentes mises à pied du minerai de Lac Herbin. À court terme, cette opération a dans des mines non aurifères et des étudiants qui effectuent été donnée à un entrepreneur; cependant la hausse des prix des internats; la compagnie peut identifier et choisir ses fait que cette option ne constitue plus la solution idéale. À meilleurs futurs employés. long terme, à mesure du progrès de la mise en production L’exploitation minière est considérée, avec raison, princi- de Lac Pelletier et de potentielles nouvelles découvertes à palement une industrie de ressources. M. Rigg offre un autre proximité des mines Dumont et Ferdeber, il faudra trouver point de vue. « Les mandats d’exploration et de une autre solution. La Corporation minière Alexis a donc développement sont extrêmement complexes. À son acquis l’ancienne usine Aurbel, inactive depuis les années arrivée dans une région, la nouvelle compagnie doit attirer 1990; elle est située à un kilomètre à l’est de la mine Lac les bons employés. Il est donc très important d’établir une Herbin et sa valeur de remplacement est de 36 millions de bonne réputation. » Les premières personnes embauchées dollars. L’usine Aurbel peut traiter 1400 t/j; sa remise en signaleront le fonctionnement de la compagnie aux autres état d’opération demandera cinq mois et des déboursés de dans la communauté. « Si vous choisissez une ou deux per- 4,5 millions de dollars. Une fois en pleine opération, Alexis sonnes-clés, les autres suivront. Pour nous, ce fut l’em- s’attend à une réduction des coûts de traitement et de bauche des chefs de service; ces derniers se servent alors de transport de 10 à 15 dollars par tonne grâce à la proximité leurs contacts pour choisir des personnes avec qui ils ont de l’usine Aurbel. déjà travaillé. » Malgré le statut de nouveau joueur de Lac Herbin, M. Rigg est très optimiste quant à l’avenir de l’exploitation. « Il De nouvelles synergies faut du temps pour établir la confiance des marchés. Après La Corporation minière Alexis est aussi enthousiaste à quelques trimestres et avec la mine Lac Pelletier, la valeur propos des travaux effectués sur le gisement aurifère Lac inhérente de nos actions en bourse sera de plus en plus Pelletier, situé à Rouyn-Noranda. La mise en production de apparente. » ICM 72 | CIM Magazine | Vol. 4, No. 3

cim news CIM welcomes new members Ahmed, Rahem, Quebec Almaguer, Isaias, Mexico Andreas, Mark, Saskatchewan Ariss, Sabrina, Manitoba Atanasov, Stefan Stoychev, Turkey Baker, Paul, Newfoundland & Labrador Balderas, Ricardo, Mexico Burrows, Alistair, Australia Cacace, Carmine, Ontario Cardinal, Angela, Manitoba Catrina, Bogdan, Alberta Cheverie, Joey, Ontario Cummings, Alison, Ontario Das, Goutam, Australia Douville, Patrice, Quebec Dries, Greg, USA DuBois, Michel, Belgium Engelbrecht, Lance, Manitoba Filiatreault, Pierre, Ontario Flores, Manuel Eduardo, Mexico Folnovic, Milan, Saskatchewan Fournier, Antoine, Quebec Fournier, Dan, Quebec Gagnon, Denis, Manitoba

Gholipour, Javad, Quebec Goodwin, Carolyn, Ontario Gulathy, Rajinder, Ontario Harris, Chris, Ontario Henry, Philippe, Belgium Heppner, Kevin, Saskatchewan Janusauskas, Daniel, Quebec Jasmin, Robert, Quebec Keane, Brian, Ontario Kennedy, Dave, Ontario Kleicker, Johann, Germany Koushavand, Behrang, Alberta Larissis, George, Greece L’Écuyer, Pierre Alexandre, Quebec Low, Eric, Ontario MacLean, Andrew, British Columbia Majoko, Primo, British Columbia Malvaso, Emile, Ontario Mazurek, Cameron, Manitoba McDonough, Barry, British Columbia Micale, David, USA Montgomery, Alexander W., Ontario Moore, Christine, Nova Scotia Neufeld, Marvin, British Columbia

A look back in time 20 YEARS AGO… • In his valedictory observations, president René Dufour recommended that CIM pay close attention to enhancing the significance of branches, its services to members, the self-evaluation of its divisions, continuing education and the public understanding of the industry. • Winners of the CIM/EMR Journalism Awards were announced. The awards recognized excellence in writing and broadcasting that enhanced the public’s understanding of the resources industry and its contribution to Canadian society. • CIM Council adopted as CIM’s Mission Statement, “To provide the highest quality service and support to all those engaged or employed in, or associated with the mining, metallurgical and petroleum industries, having particular regard to their professional, technical and social needs.” • The historical metallurgy article presented a potted history of Falconbridge Ltd., on the occasion of its 60th anniversary. The above were taken from the May 1989 issue of CIM Bulletin.

Nico, Vervoort, Belgium Niemi, Markus, Finland Noiseux, Guy, Quebec Patel, Kruti, British Columbia Pehlivanov, Stoyan Georgiev, Bulgaria Roberts, Robert, Ontario Roy, Raja, Ontario Seddon, Christine, USA Shepherd, James, Ontario Spanring, Alfred, Austria Svens, Kurt Runar, Finland Takala, Heikki, Finland Tariq, Amjad, Ontario Taylor, Curtis, Saskatchewan Tuuppa, Eero, Finland Vassenine, Nikolai, Ontario Verscheure, Karel, Belgium Wu, Xiaozhu, Quebec Zou, Feng, Ontario

Corporate ACC Burkina Faso BHP Billiton Polar Star Mining Corp.

Obituaries CIM expresses its sincere condolences to the families and friends of the following members: Brad Bjornson recently passed away. He had been a member of CIM since 1979. Dennis Michael Gorc, who joined CIM in 1987, has passed away. Guy A. Ehmann became a member of CIM in 1967, achieving life member status in 1999. Mervin Keys joined CIM in 1946 and had achieved life member status. He passed away last October. W. Ralph Lewis recently passed away. He had been a member of CIM since 1972, becoming a life member in 1992. May 2009 | 73

cim news A breath of fresh air

Sponsored by:

CIM Distinguished Lecturer Jan Nesset speaks of his passion for acquiring and sharing knowledge CIM Distinguished Lecturer Jan Nesset is not only an engineer of unquestionable accomplishment but also a man of indomitable spirits. His appetite for life and his zest for mineral processing are reflected in his presentation “100 Years of Blowing Bubbles for Profit.” Nesset keenly breathes fresh air into a century-old story — the evolution of froth flotation.

tion, training and the required tools before he fully needed them.

The story

Froth flotation, a great revolution in the minerals industry, radically changed the fabric of mining and the global economy at the turn of the last century. Through his presentation, Nesset captures the pivotal moments in its history, threading together the stories of the countries and individuals The spirit that were instrumental in its developAfter obtaining his bachelor’s ment. He guides us back in time, to the degree in metallurgical engineerlate 1800s, where the supply of metals ing from McGill University, Nesset could not meet the boost in demand, put his part-time earnings to good due to the emerging automobile indususe by spending the next six try and the developing electrical distrimonths backpacking across bution system. The centuries-old Europe. Returning with a reinmethods used to upgrade good-quality ores were highly inefficient and, forced passion for the great outaccording to Nesset, “the world was doors, he entered graduate school crying out for improvement.” at McGill and soon completed his Nesset then takes us on a journey master’s degree. It was his love for from flotation’s early inception in the open air that drew him to metAustralia through its evolution into allurgical engineering and mineral the vital process we know today. He processing, in particular. “In this — J. Nesset piques our interest with intriguing industry, you do not need to be facts and unveils buried connections, such as the pivotal buried behind a desk and weighed down by pecking roles played by Herbert Hoover, the 31st president of the orders,” said Nesset. United States, and his brother Theodore, and Ralph In 1979, he landed a job with Noranda Inc. at their Brunswick (Cu-Pb-Zn-Ag) mining operation, which, at Diamond, the Canadian metallurgist who unlocked the the time, was involved in a gamut of projects and opera- enormous potential of the Sullivan deposit for Cominco. tions — the perfect choice for an eager engineering graduate. Nesset remained with Noranda for the next 23 The motive years, tapping into abundant opportunities and working In addition to his consulting practice, Nesset recently with single-minded dedication and substan- returned to McGill to pursue his PhD, working in the tial talent. Following 15 years at various area of flotation cell hydrodynamics. He has also taken by Robbie Pillo mining operations, his keen mind, drawn by over teaching a required course on mineral processing research, led him to the R&D sector. He took up the posi- that was on the brink of cancellation. “I wanted to ensure tion of program manager in mineral processing at the that the class would not disappear from the mining and now-closed Noranda Technology Centre in Montreal. materials engineering program. It teaches material that I Nesset refused to be defeated when he was diagnosed consider essential for every process engineer.” with pseudo xanthoma elasticum (PXE), a rare genetic His thirst for knowledge sharing has driven Nesset disease similar to macular degeneration that causes loss to join the Distinguished Lecturer program. “I believe of vision in the central area of the retina. He got everyone should try to give something back to this straight to work, tackling this hurdle like “any other wonderful industry. If I can get people interested, espeengineering project.” He contacted the Montreal cially students, then this story will transcend another Association for the Blind to register and get informa- 100 years.” CIM

“I believe everyone should try to give something back to this wonderful industry”

74 | CIM Magazine | Vol. 4, No. 3

A founding member of CIM Cordially Invites you to attend our

122 Annual General Meeting Held at

Dundee Resort and Golf Club Cape Breton, Nova Scotia

June 4th, 5th and 6th, 2009 Events: Golf Tournament Dundee Golf Course Technical Sessions Presidents Dinner and Dance Lobster Dinner Nightly Entertainment

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FOR MORE INFORMATION CONTACT: AGM REGISTRATION: GEORGE SIGUT (florence@ns.sympatico.ca) DUNDEE RESORT AND GOLF COURSE: Phone: 1-800-565-5660 Email: Info@capebretonresorts.com Nova Scotia Tourism: 1-800-565-0000

cim news Molybdenum, served with beer A transition metal and a Germanic elixir enliven the CIM Los Andes Branch annual meeting On December 15, the CIM Los Andes Branch held the last monthly meeting for 2008. A lecture was given by Gabriel Gutierrez, vice president, engineering development for Molibdenos y Metales S.A., or Molymet, as it is more generally known. The company produces various molybdenum commercial products as well as rhenium. Molymet was formed in 1937 to process molybdenum concentrates in Chile, and has grown in by Simon Tarbutt size to represent some 34 per cent of the molybdenum and 70 per cent of the rhenium world markets. It now has other plants in Mexico, Germany and Belgium, and operates in the United States and China. It is listed on the Santiago stock exchange, and has ISO 14001 as well as OHSAS 18001 accreditation. An interesting and varied review was presented using PowerPoint graphs and photos of the organization,

Branch executive (from left to right): Armando Valenzuela, director; Gonzalo Muñoz, director; Paula Quijada, executive coordinator; Simon Tarbutt, director; John Selters, chair; and Jaime Arias, director.

the processes, the plants in the various countries, future expansion plans — including a new plant in northern Chile at Mejillones port — as well as the uses, and the shrinking market and price of molybdenum. The presentation was followed by questions from a clearly attentive audience of 50 people that included students, suppliers, engineering and mining companies, and accounting and legal personnel.

To fulfill the other objective of the meeting — that of providing a setting for an open exchange among industry personnel — the evening concluded with a buffet prepared by the Radisson Santiago Hotel and was accompanied by an excellent Chilean beer, a worthy heritage of the German settlements that made their home in the middle south of Chile in the 19th century. CIM

For the love of mining CIM Sudbury Branch holds its popular Valentine’s Day Sweetheart Dance The CIM Sudbury Branch held its 8th Annual Sweetheart Dance on Valentine’s Day. Despite it being held on a Saturday instead of a Friday, as is usually the case, 380 people attended this increasingly popular event that is widely supported by the local industry. by George Darling Planning starts three months before the event, with tickets distributed to the executive to sell. Local businesses sponsor the tickets, and tables are set up under their banner. Additional sponsorship is obtained for the entertainment, food and prizes. Companies are proud to see their name on a wine bottle at their table. The local hall, the Caruso Club, is now quite used to the nature of our 76 | CIM Magazine | Vol. 4, No. 3

event, which helps considerably in the planning. The Italian heritage of the venue seems to add to the romance of the evening. An event planner was hired for the hall decorations and this year they outdid themselves in the quality of their work. A special section was set up for pictures, with a beautiful Valentine’s Day theme. Guests were greeted by a reception line and directed to their tables. All the women were treated to corsages that were sponsored by Bestech, a local company. The reception line fed into a cocktail area that again set the romantic tone of the evening. Guests then moved into the huge ballroom, set up with tables decorated with candles and hearts. The light music provided a mellow backdrop

to conversations and the ladies got to catch up on events of the winter. A full buffet was served, highlighted by roast beef cooked to perfection. The event was followed by dancing, with breaks to allow for the drawing of prizes. The wife of Brian Buss, head of Vale Inco’s Project group, was delighted to win the door prize. The success of a social night can be judged by the time of the last dance. Those who made it to the 1:30 a.m. final number closed the night in the spirit of the evening. The work that the executive put into making the evening a success was greatly appreciated. Requests are already coming in for tickets to next year’s event. CIM

cim news Bridging the gap Major donation to sustain professional development Civil engineer Scott cycles, mining schools across McIntosh has made a very good North America closed; the career of solving problems. attendance level at mining Ever since he took his first job schools has been poor and that’s 34 years ago at a Colorado what put us in the difficult posimolybdenum mine, he has tion over the last three years. done his part to help make There just weren’t people out things work better and more there because so many had been efficiently. driven away from the industry.” McIntosh, the man behind McIntosh acknowledged that McIntosh Engineering, donated in relation to the scale of the $750,000 to strengthen the problem, his donation repreCanadian Mining and sents a “drop in the bucket,” but Metallurgy Foundation (CMMF) he hopes the money will help and help it ensure that the minmaintain the educational infraing industry can attract and structure during slow times, and develop its most valuable he challenged others to keep an resource — future generations of eye on the horizon. “Anyone well-trained professionals. The interested in the future of our donation was made possible due business — the mining compato the acquisition of McIntosh nies in particular — needs to do “Anyone interested Engineering by Stantec last year, in the future of our business – more rather than less to invest in and is a portion of the $2 million the future.” the mining companies McIntosh made available to the Born and raised in the United in particular – Society for Mining, Metallurgy States, McIntosh joined the and Exploration (SME) in the Ontario-based Redpath Group needs to do more United States, CMMF, as well in the late 1970s. He named Jim rather than less as schools on both sides of the Redpath, group founder, as his to invest in the future.” border. professional mentor. McIntosh — S. McIntosh “The initial idea for the later spun off the engineering fund,” explained McIntosh, division of Redpath as McIntosh “came about early last year when Engineering, which specialized the industry was growing at an incredible rate and mining in underground mining. He has lived in North Bay, companies around the world were wondering, ‘Oh my gosh, Ontario, and has broad professional and personal connecwhere are we going to get the people to engineer, tions to Canada, a country that, he insists, runs in build and operate these mines that are trying to his blood. by Ryan Bergen come on stream?’ The urgency of the issue has He turned to CIM for help in administering the funds changed, but with any sort of a long-term perspective, I’m because it has a strong presence and a solid history. “CIM absolutely convinced there is a need for more rather than is a respected organization with a national reach that for fewer young professionals to come into this business.” decades has been dedicated to the mining industry. And Thanks to the generosity of CIM members and others, the CMMF is a great organization to focus the efforts the Canadian Mining and Metallurgical Foundation, aimed at developing the industry.” administered by a board of trustees, funds programs aimed Though the sector has experienced ups and down, at supporting professional development and raising public McIntosh, now the vice president of Stantec Mining, said awareness about the industry and the spectrum of career his life in mining has offered steady rewards and he seems opportunities it offers. a ready mentor, himself. “There are opportunities for anyLike any who have sustained a career in the industry, one who has the bug to travel around the world, and there McIntosh has endured slumps that have scared people away are plenty of opportunities for somebody who wants to in the past. The demand for metals and minerals returns, stay in one place and raise a family. It is a tremendously but the hard times leave a legacy. “During the past down rewarding career.” CIM May 2009 | 77

CIM 2008-

Survey Highlight As the leading representative of Canada’s mining resources industry for over a century, CIM understands that its purpose revolves around its members. To ensure that CIM is delivering the appropriate member value, we commissioned Association Management Consulting and Evaluation Services (AMCES), a consulting service that caters exclusively to the non-profit sector and has supported more than 120 organizations for over 150 such projects, to survey current, past and non-members. The findings of the survey, while generally reassuring, tell us that some expectations still remain to be met. The information will guide CIM’s efforts to set a renewed strategic direction that will take us into the future that you envision for yourselves, for the industry and for CIM.

About the survey

495 of 9,121 CIM members responded to the survey, which was geographically homogenous with the total membership, yielding a response rate of 5.4 per cent. Beginning in November 2008, the study involved: ◆ Reviewing background material and interviewing CIM staff ◆ An online survey to understand members’ expectations ◆ Telephone interviews with past members to identify reasons for attrition ◆ Contacting prospective members to understand what might motivate them to join ◆ Comparing CIM policies and practices to best practices in the associations sector

◆ In terms of overall satisfaction, 87.5 per cent of respondents were satisfied or very satisfied with CIM. 78 | CIM Magazine | Vol. 4, No. 3

Communication and concerns ◆

◆

Email is preferred for individual specific communication that requires some action and the website is preferred for more general information. Respondents very clearly affirmed CIM’s vision, purpose, values, principles and strategic goals, but also commented that: — The current strategic goals cannot be measured. — CIM needs to attract more young people to the industry. — CIM has an important role to play in promoting the importance of the mining industry and the professionalism of its members.

What you want CIM to do ◆ ◆ ◆ ◆ ◆ ◆

Promote the role and benefits of the mining industry Increase the relevance of CIM for students Increase networking opportunities and the sharing of technical papers, guidelines and standards Improve communications about CIM programs and services Play a leadership role with respect to other industry associations Collaborate with other associations to promote higher standards and a better public perception of the mining industry

What you like With regards to 22 programs and services offered by CIM, 89.4 per cent of respondents are satisfied or very satisfied. Here’s a look at the top five CIM programs or services you participate in or use. The table below also shows how you rank the importance you accord to them and how satisfied you are with them. Some programs and services were ranked high in importance and satisfaction even though the participation was quite low. These include: ◆

Networking opportunities via technical interest groups/societies

◆

Professional development programs

◆

Outreach (Mining in Society)

◆

Membership directory (print version)

◆

The CIM awards

What we could do better Based on the results of the research, a review of CIM policies and processes, and comparison to best practices, a list of key potential improvements were noted: ◆

CIM should develop criteria and a policy to determine the feasibility of new programs and services.

◆

A policy for program and service abandonment should be developed and current programs and services should be reviewed according to this policy.

◆

CIM should develop a member recruitment strategy for its key segments that involves volunteers and staff that is measurable and evaluated on an ongoing basis.

◆

Program fees and membership dues should be reviewed annually to ensure that they are in line with real costs and market conditions.

◆

CIM should allocate adequate resources to successfully deliver its programs and services.

Top five CIM programs/services Participation Rate (Ranking)

Importance (Ranking)

Satisfaction (Ranking)

CIM Magazine (print version)

Conferences

Program or Service

CIM Website

CIM Membership Directory (print version)

Trade Exhibition

Programs were ranked from 1 to 22 in importance and satisfaction, with 1 being the highest ranking.

May 2009 | 79

calendar CIM EVENTS

AROUND THE WORLD

Los Andes Branch Meeting Guest Lecturer: Rodrigo Rivas May 19 Santiago, Chile Contact: John Selters Email: jselters@vtr.net

Alta 2009 Nickel – Cobalt, Copper and Uranium Conference May 25-30 Perth, Western Australia Contact: Alan Taylor Tel.: +61.3.5472.4688 Email: alantaylor@altamet.com.au

Ottawa Branch Meeting CIM Distinguished Lecturer Robin Sheremeta May 20 Ottawa, Ontario Contact: Mario Riopel Email: mario.riopel@nrcan.gc.ca Tournoi de golf annuel de la section de Thetford Mines 29 mai Club du golf du Mont Adstock, Québec Personne-ressource : François Jacques Tél. : 418.338.7500 Courriel : francois.jacques@globetrotter.net Tournoi de golf amical de la section d’Harricana 30 mai Le Golf du Belvédère, Val-d’Or, Québec Personne-ressource : Jean-François Lagueux Tél. : 819.874.7822 poste 3258 Courriel : jean-francois.lagueux@agnico-eagle.com Northern Gateway Branch Blues Cruise June 12 North Bay Waterfront Marina, Ontario Contact: Bernie Robertson Email: Bernie.robertson@kibl.com Sudbury Branch 11th Annual Lobster Dinner and Dance June 12 Sudbury, Ontario Contact: George Darling Tel.: 705.691.1812 Email: George.Darling@Stantec.com North Central BC Branch Annual General Meeting June 24-26 Prince George, British Columbia Contact: Greg Rasmussen Email: greglrasmussen@gmail.com

Using DCF and Real Options to Value and Manage Mining and Petroleum Projects May 27-29 Colorado School of Mines, USA Contact: Graham Davis Tel.: 303.273.3321 Email: space@mines.edu 4th Industry Summit on Mining Performance June 9-11 Toronto, Ontario Contact: Kathy Pollard Tel.: 814.863.1009 Email: kjp5@outreach.psu.edu First International Seminar on Geology for the Mining Industry June 10-12 Antofagasta, Chile Contact: Isis Galeno Email: info@geomin2009.com Canadian Mining Law and Finance Conference June 10-11, Toronto, Ontario June 15-16, Vancouver, BC Contact: Linda MacLachlan Tel.: 416.367.5613 Email: lmclachlan@cambridgeforums.com Physical Separation 09 June 16-17 Falmouth, Cornwall, UK Contact: Barry Willis Email: bwills@min-eng.com Materials Characterisation 2009 June 17-19 Wessex Institute of Technology, UK Contact: Rachel Swinburn Email: rswinburn@wessex.ac.uk

history Butte, Montana (Part 2) “Litigation usually frequented the great American mining centers, usually eroding profits and sometimes paralyzing operations. What happened at Butte, though, seemed to be in a class by itself. Before the carnival of litigation had run its course from 1896 to 1906, tens of millions of dollars worth of mining properties would shut down; thousands of employees would lose their income; the camp would stare into the abyss of outright warfare; and the Amalgamated trust itself would face imminent disaster. … With its hundreds of rich claims and its many well-established mine owners, the sprawling Butte district staged the greatest of all legal-political battles in the history of western mining. The final result, though hard won, was preordained: consolidation under one central management.” ~Malone, 1981

The history of Butte has resulted in an extensive bibliography. Most of that has focused on the Battle of Butte between 1896 and 1906, when the development and consolidation of the camp was marked by corruption, disagreements, threats, intimidation, legal challenges, the buying of judges and elected politicians, fraud, theft, murder and political intrigue. That story has been well summarized by historians such as Joralemon (1934), Glasscock (1935), Marcosson (1957), Greever (1963), and Malone (1981), and in the autobiography of Sales (1964), and is beyond the scope of this series. George Hearst and James Haggin were so impressed by the copper potential of the strong vein zone that Marcus Daly showed them that the Hearst Syndicate purchased the Anaconda claim from Daly for what he had paid and agreed to finance its development. They also gave him a carried 25 per cent interest (in effect making him an equal fourth partner in the syndicate), and appointed him general manager. The initial interests were Hearst, 39 per cent; Haggin, 26 per cent; Daly, 25 per cent; and Lloyd Tevis (who wasn’t as enthusiastic), 10 per cent. This happened in spite of efforts by William Clark to discredit Daly with the syndicate, as he had tried to do earlier when Daly bought the Alice mine for the Walkers. Clark was also purported to have said some disparaging things about Haggin’s heritage because of his given names, James Ben Ali, which was bizarre because Haggin’s pedigree was better than Clark’s. Haggin’s father was a successful lawyer in Louisville, Kentucky, while his mother was the daughter of a Christian Turk with a medical practice in Philadelphia, who had been forced to move to England to study medicine because of his religion. These attacks probably contributed to the long feud between Daly and Clark. When Clark wrote his memoirs 50 years later, he never mentioned Daly by name, referring to him only as “a representative of the Walkers.” Daly sank a production-size shaft at a site reportedly selected by Hearst and drove crosscuts 90 to 150 metres long on levels 30 metres apart. Nothing but a little oxidized silver ore with some copper stain was found initially, but it was enough to justify leasing the nearby Dexter mill from Clark. At a depth of 30 metres, where the silver started to disappear, a narrow seam of chacocite, which was called ‘copper glance’ by prospectors, was intersected. Chalcocite is the richest copper sulphide mineral, The headframe and surface plant at the Neversweat mine, Butte, ca. 1900. May 2009 | 81

Courtesy of World Museum of Mining, Butte, Montana

by R.J. “Bob” Cathro, Chemainus, British Columbia

economic geology containing almost 80 per cent copper by weight compared When a temporary oversupply of copper occurred that with up to 35 per cent for chalcopyrite and about 50 per drove the price below 10 cents/lb between 1887 and 1889, cent for bornite. This mineral had seldom been seen a group of French investors and banks enlisted 37 of the before in large amounts anywhere. The chalcocite vein leading producers that controlled 80 to 85 per cent of the was still narrow at the 61 metre level, but a year later, at a global supply to establish a copper cartel. Anaconda was depth of about 90 metres, it had widened to 1.5 metres. one of the companies that agreed to sign a three-year conOn the next level, it widened to 15 metres and was tract. The cartel managed to raise the price to 21 cents between 15 and 30 metres thick when the shaft reached before it collapsed in 1903, causing the copper price to the 180 metre level in the spring of 1883. It had become plunge to 7.5 cents and resulting in a financial panic in the largest chalcocite deposit the world had ever seen. New York. The Butte mines were able to withstand the Encouraged by the good results, Daly began to purchase financial damage relatively well until the bankers agreed to adjacent claims, including the St. Lawrence and support the price at the 12 cent level. Neversweat along strike, just as Hearst had done at Sadly, George Hearst died in 1891 before he could see Homestake in order to avoid legal problems caused by the how great the Butte camp would become. A few months Apex Law (see CIM Magazine, Vol. 3, No. 6, page 113, prior, the partners had agreed to convert their interests in September/October 2008). their private syndicate into a public corporation. His The initial ore produced from the Anaconda mine averwidow Phoebe sold his 7/16 interest in Anaconda to the aged 12 per cent copper and up to $30 per London branch of the Rothschild banking ton in silver, and some zones ran from 45 empire for $7.5 million to enable their to 55 per cent copper. During 1882-84, son, William Randolph Hearst, to pur37,600 tonnes were shipped to a smelter at chase a New York newspaper that became Swansea, Wales. In 1883, construction of a key piece in his newspaper empire. That a smelter and a new town named left Phoebe with the balance of the $18 Anaconda began at Warm Springs, 42 million in his estate at George’s death, kiolmetres west of Butte, where there was plus large interests in the Homestake and abundant water. The smelter initially other mining properties, and huge treated ore averaging 8 to 10 per cent copranches in California and Mexico. One of per. A silver smelter was added later and them was the 40,000 square kilometre the tracks of the Great Northern Railway ranch at San Simeon, California, where reached the smelter in 1887. In 1892, the her son built the Hearst Castle after Anaconda operation produced 50,800 Phoebe died in 1919. To honour her hustonnes (100 million pounds) of copper, band, Phoebe built the Hearst Memorial which made it the largest copper mine in James Haggin (1827-1914); (from Malone, Mining Building at the University of the United States. Daly invested heavily in 1981). Photo courtesy of the Montana California, Berkeley between 1901 and Historical Society, Helena new mines, acquired coal lands and a tim1907. ber supply, established banks, built power plants and Efforts to consolidate the ownership of the camp by comstarted an irrigation system, quickly establishing bining large holdings were initiated by financiers in Boston, Anaconda as one of the largest copper producers in the who controlled the Michigan copper mines, and Wall Street. world. By the early 1890s, the syndicate was smelting With both Hearst and Tevis already dead, Daly sold his share 3,000 tonnes per day and consuming 75,000 tonnes of for about $17 million in 1899, only a year before his death. coal and 15 million board feet of lumber per year from Haggin exchanged his Anaconda interest for shares worth company-owned operations. Although Anaconda dwarfed $15 million in the new company, the Amalgamated Copper other large mining operations in the camp, including Company. Controlled by former executives of John D. Clark’s, the structural geology of the camp, which conRockefeller’s Standard Oil Trust, Amalgamated was actually a sisted of a huge stockwork of countless small intersecting monopoly posing as a holding company. Haggin died in veins, meant that there were scores of small independent 1914, the last survivor of the original Hearst Syndicate. mines operating on single claims. Further consolidation might have proceeded smoothly The significant silver content of the Butte ores gave it an but for the efforts of the third Butte mining mogul, important cost advantage over the other major U.S. copper Frederick Augustus (Fritz) Heinze. Born in Brooklyn in camps in Michigan and Arizona. Mineralization in Michigan, 1867 of German-Irish heritage, he moved to Butte in 1889 the second largest producer, consisted of native copper, as a surveyor after graduating from the Columbia School of which had a negligible precious metal content but didn’t Mines. He then returned to New York to join the editorial require smelting. Even though the Michigan mines were sitstaff of the Engineering & Mining Journal, where he develuated much closer to the eastern markets, their production oped some important financial contacts. After inheriting costs were twice as high as those at Butte’s (Hyde, 1998). some money, Heinze returned to Butte where he organized 82 | CIM Magazine | Vol. 4, No. 3

economic geology the Montana Ore Purchasing Company in 1892, built a custom-smelting business, leased several mines and quickly became wealthy. In his spare time, he built a smelter at Trail, B.C. to treat ore from the isolated Rossland coppergold camp, constructed a railway to connect the mine and smelter, and sold the entire enterprise at a high price to the Canadian Pacific Railway. It became the nucleus of the Consolidated Mining & Smelting Company, now part of Teck Cominco Limited. Heinze was a personable, charming, brilliant and tireless mining engineer and businessman who became legendary for his lavish entertaining and his ability to party all night and work all day. He was also a gifted orator. His surveying experience had given him an intimate familiarity with the complexity of the Butte vein system and he combined that experience with his keen nose for ore potential. Sensing how vulnerable mineral titles were to Apex Law challenges in a complex vein system like that present at Butte, he exploited the opportunity aggressively with predatory litigation. At the height of his influence, Heinze and his two brothers employed 37 attorneys and he became known as a courthouse miner. His clever efforts, which kept Butte and Wall Street in turmoil for ten years, has been dubbed by historians as ‘The Battle of Butte.’ The history of the Apex Law and how it was adopted in the United States, but not in most other major mining countries, is not well understood. It was designed to protect the rights of a prospector who had located the top of a vein at surface, known as its apex, by guaranteeing him the right to follow the vein downward forever, even when it passed onto a neighbouring claim. This is known as an extraterritorial right. The earliest record found for such a law was the one proclaimed for the town of Iglau by the King of Bohemia (Czechoslovakia) in 1249 (Parry, 2004). Previous articles in this series have shown that German mining experts managed Royal mines in parts of England, such as the lead mines in Darbyshire (but not Cornwall) between the 14th and 16th centuries, and that the Apex Law was adopted in the mining camps of California, subsequently spreading throughout the United States (see CIM Magazine, Vol. 1, No. 5, p. 70, August 2006; and Vol. 2, No. 5, p. 66, August 2007). It is unclear if the apex idea was brought to California from England or directly from Germany. In any case, the Apex Law was unworkable for a complex vein system such as Butte, where numerous branching and bifurcating veins and unmineralized faults were encountered underground, and their apices were often impossible to determine until the vein was mined out. Expediency forced Heinze to become a close business and political ally of William Clark in their joint opposition to the Amalgamated Copper Co. The battle for control of Butte finally ended in 1906 when Heinze agreed to sell his interests for about $10 million plus the dismissal

of 110 lawsuits. He lost most of his fortune in a New York banking collapse (the Panic of 1907) and died in 1914. In the words of Malone (1981), Heinze was “a remarkably gifted man (who) flew fast and high before his early fall.” William Clark, the most notorious of the founders and fathers of Butte, outlived them all. In 1900, he ranked as the world’s greatest independent mine operator, worth an esti- Augustus Heinze (1869-1914); (from Malone, 1981). Photo courtesy of the mated $50 million. The Montana Historical Society, Helena consolidation of the key mineral claims at Butte was almost completed when he sold his holdings to Amalgamated in 1909. The holding company then reverted to the name of Anaconda Copper Mining Company. In addition to his Butte interests, Clarke controlled the hugely profitable United Verde copper mine at Jerome, Arizona, held other mining and land interests, and owned a railway he built from Salt Lake City to Los Angeles. In addition, he had served one term in the U.S. Senate. In 1906, he built a 131-room mansion, with 21 bathrooms, in New York that burned 17 tonnes of coal per day. At his death in 1925, he was worth $200 million. In 1907, Mark Twain described Clark in this fashion: “as rotten a human being as can be found anywhere under the flag … (and) the most disgusting creature that the republic has produced since Tweed’s time” (Malone, 1981). Unlike Daly, who was remembered as an empire builder and father figure, Clark never won respectability. CIM

References Glasscock, C.B. (1935). The war of the copper kings: builders of Butte and wolves of Wall Street. New York: Grosset & Dunlap. Greever, W.S. (1963). Bonanza west: the story of the western mining rushes 1848-1900. Moscow: University of Idaho Press. Hyde, C.K. (1998). Copper for America. Tucson: University of Arizona Press. Joralemon, I.B. (1934). Romantic copper: its lure and lore. New York: D. Appleton-Century Company Incorporated. Malone, M.P. (1981). The battle for Butte: mining and politics on the northern frontier, 1864-1906. Seattle: University of Washington Press (reprinted in 1995 by the Montana Historical Society Press, Helena). Marcosson, I.F. (1957). Anaconda. New York: Dodd, Mead & Company. Parry, W.T. (2004). All veins, lodes, and ledges throughout their entire depth: geology and the apex law in Utah mines. Salt Lake City: The University of Utah Press. Sales, R.H. (1964). Underground warfare at Butte. Caldwell, Idaho: Caxton Printers, Ltd.

May 2009 | 83

metallurgy Platinum in Bophuthatswana by Fathi Habashi, Department of Mining, Metallurgical, and Materials Engineering, Laval University

Four postage stamps commemorating platinum, issued on source in the Bushveld Igneous Complex, and by 1930, he August 15, 1979, are of particular historical interest. One had traced it for several hundred kilometres. Extensive minstamp shows pouring of platinum and an African worker, ing of the reef took place when an upsurge in the demand for while other stamps summarize the importance of platinum in platinum group metals, used in exhaust pollution control in the chemical industry, in telecommunications satellites and the 1950s, made exploitation economically feasible. It was in jewelry. The stamps were issued by Bophuthatswana, a not until the 1970s that major advances in metallurgy made bantustan (homeland) in the Republic of South Africa. At the the extraction of metals from the UG2 chromitite possible. time, Bophuthatswana consisted of seven enclaves dispersed Impala Platinum Limited has its primary operations conin northwest South Africa. The homeland was set up to centrated on the Impala lease area on the western limb of the house Setswana-speaking peoples, with its capital, Bushveld Complex, near the town of Rustenburg. Some Mmabatho, situated in an area bordering Botswana. 28,000 people are employed by Impala Platinum. Mining at Bophuthatswana was given nominal self-rule in 1971, and Impala focuses primarily on two reefs, the Merensky Reef became independent on December 6, 1977. A head of state and the UG2 Chromitite Layer, which are contained in the was appointed by the South African government, but the new Rustenburg Layered Suite, a well-layered ultramafic to mafic country was not recognized as independent by any govern- igneous succession of the Bushveld Complex. The majority ment other than that of South Africa and Israel. In 1983, it of mining operations extend to a depth of around 1,000 had more than 1,430,000 inhabitants. Two attempted coups metres below surface. were suppressed by South Africa. Bophuthatswana’s wealth came from the number of platinum mines on its soil. The Bushveld Complex is a large igneous intrusion that contains some of the richest ore deposits on earth. The reserves of platinum group metals are the world’s largest, with vast quantities of iron, tin, chromium, titanium and vanadium. The geographic centre of Use of platinum as a catalyst in the Processing a platinum ore the complex is located north of Pretoria. It covers chemical industry over 66,000 square kilometres, an area the size of Ireland. The complex varies in thickness, sometimes reaching nine kilometres in thickness. The ore bodies within the complex include the UG2 Reef, containing up to 43.5 per cent chromite, and the platinum-bearing horizons, the Merensky and Plat reefs. The Merensky Reef Use of platinum in jewelry varies from 30 to 90 centimetres in thickness. It is Use of platinum in the space industry a norite with extensive chromitite and sulphide layers or zones containing the ore. The reef contains an averHans Merensky (1871-1952), South Africa’s most famous age of 10 ppm platinum group metals in pyrrhotite, pent- prospector and mining geologist, was born in Botshabelo, landite and pyrite, as well as in rare platinum group minerals South Africa. He studied at the State Academy of Mining and and alloys. The Merensky and UG-2 reefs contain approxi- the University of Berlin, and was a consulting geologist in mately 90 per cent of the world’s known PGE reserves. About Johannesburg. While conducting some geological surveys, 80 per cent of the platinum and 20 per cent of the palladium he discovered tin near Pretoria and reported it to the Premier mined each year are produced from these horizons. The ini- Diamond mine regarding possible mining prospects. In 1924, tial recovery of platinum took place on several of the large he was tipped off about some platinum deposits near East Rand gold mines; the first separate platinum mine was a Lydenburg. There, he discovered a 48-kilometre reef that was short-lived venture that worked small quartz reefs. later named for him. The discovery of the Bushveld Igneous Complex deposits In his later years on his farm, Westfalia, he contributed was made in 1924 by a district farmer. This was an alluvial much to South Africa’s agriculture industry through his deposit but its importance was recognized by Hans research into preventing erosion, new grass types, fruit and Merensky, whose prospecting work discovered the primary animal breeding. During his lifetime, he donated much of his 84 | CIM Magazine | Vol. 4, No. 3

metallurgy Bophuthatswana resisted re-incorporation into South Africa. However, on April 27 of the same year, all ten homelands, including Bophuthatswana, became part of post-apartheid South Africa. Sun City, which lies deep in the rugged Bushveld, in the heart of an ancient volcano, is a unique resort complex with a spectacular casino, restaurants, swimming pools, botanical gardens and extensive sporting facilities, including two world-class golf courses. In conclusion, postage stamps are an important means of communication; numerous countries have recorded important events, honoured worthy individuals and Map showing the Bushveld platinum mines in Bophuthatswana: Impala, Rustenburg, etc., and described interesting facts through this medium. Many Pretoria. Johannesburg is a little below Pretoria. historical facts, sometimes obscure, can be found on wealth to universities, schools, libraries, hospitals, charities, stamps; some of these may not be easily located in a history or cultural organizations and people in need. One of his greater a science book. Stamps have artistic value, they are used every contributions was to the University of Stellenbosch, enabling day and can be found everywhere. CIM it to create a forestry faculty. Bophuthatswana also made money from the Sun City Suggested Readings Casino, which was a short drive of 150 kilometres from F. Habashi, D. Hendricker, & C. Gignac (1999). Mining and Metallurgy on Postage Stamps. Quebec City: Métallurgie Extractive Québec/Laval University Bookstore. Johannesburg and Pretoria, where gambling was illegal. O. Lehmann (1959). Look Byond the Wind, the Life of Dr. Hans Merensky. Cape Town: In the beginning of 1994, when South Africa was Howard Timmins. heading for democratic elections, the president of

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Peer reviewed by leaders in their fields 87

Canadian Metallurgy Quarterly Volume 47, Number 4

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cmq abstracts

Canadian Metallurgical Quarterly Volume 47—Number 4

Pre-Ageing to Improve the Microstructure and Tensile Properties of Al-0.72Mg-0.42Si-0.1Cu Artificially Aged Alloy C.-H. Shen, Department of Mechanical Engineering, Army Academy, Jhongli City, Taiwan; and B.-L. Ou, Department of Mechanical Engineering, National Central University, Jhongli City, Taiwan This paper describes a low temperature pre-ageing method that can improve the strength of artificially aged Al-Mg-Si-Cu alloys. The precipitation behaviour of the alloy samples was analyzed by use of differential scanning calorimetry (DSC) and the results were confirmed by microstructural observations using high resolution transmission electron microscopy (HRTEM). Tensile testing was performed to determine the mechanical properties of the samples. The results indicate that GP zones (I) formed in the alloy matrix with either natural ageing or pre-ageing at 50°C and the formation of GP zones (I) retarded precipitation of the β” phase during artificial ageing: it can be concluded that increasing the holding period would significantly decrease the strength after artificial ageing at 170°C. Pre-ageing either at 70 or 90°C, however, immediately after quenching of nuclei for precipitation of the β” phase formed in the alloy matrix, showed that the precipitate particles formed in the pre-ageing condition grow in the subsequent artificial ageing process. It was concluded that in this case, increasing the preageing time would increase the strength after artificial ageing at 170°C. Corrosion Resistance of the Skin and Bulk of Die Cast and Thixocast AZ91D Alloy in Cl- Solution Using Electrochemical Techniques A.-M. Lafront, D. Dubé, R. Tremblay, E. Ghali, Department of Mining, Metallurgical and Materials Engineering, Université Laval, Quebec City, Quebec; C. Blawert and W. Dietzel, GKSS Research Centre, Geesthacht, Germany The corrosion resistance of die cast and freely solidified or electromagnetically stirred thixocast AZ91D alloy has been studied using electrochemical noise technique and electrochemical impedance spectroscopy in a 0.05 M NaCl solution. Specimens polished at different depths were immersed in the solution in order to assess the influence of the microstructure on corrosion kinetics and morphology. At depths between 10 and 50 µm (skin), all specimens showed general non-uniform corrosion with the lowest corrosion resistance. Between 100 and 200 µm (interior skin), the observed corrosion was accompanied by superficial undefined pits due to metastable pitting. The corrosion form in the interior skins gave the best corrosion resistance. Stable pitting corrosion was observed beyond 400 µm deep on the bulk specimens. The skin of all thixocast specimens prepared from both types of billets showed a more corroded surface than that of die cast. On the other hand, the interior skin as well as the bulk of thixocast specimens showed better corrosion performance than that of the die cast specimens. Creep Behaviour and Stress Analysis of a Seventeen-Year Service-Exposed Primary Super Heater Tube in a Thermal Power Plant A.K. Ray, National Metallurgical Laboratory, Jamshedpur, India; K. Diwakar, Department of Mechanical Engineering, National Institute of Technology, Jamshedpur, India; N. Roy, H.K. Das, J.K. Sahu and R.N. Ghosh, National Metallurgical Laboratory, Jamshedpur, India The elastic, inelastic deformation and stress distribution pattern of a seventeen year service-exposed primary super heater tube in a 120 MW boiler of a thermal powerplant have been evaluated by using both analytical and numerical techniques. The commercial finite element computer code ANSYS® was used for stress analysis. The methodology is a valuable design tool for development of new boiler tubes as well as for considering the effects of numerous operating variables on creeplife. The health of the tube was also assessed based on microstructure, hardness and a few conventional creep tests carried out at 500°C at various stress levels (40 May 2009 | 87

cmq abstracts to 177 MPa). Results revealed that there was not much variation in the microstructure and hardness of the service-exposed tubes compared to the virgin material. Creep deformation behaviour of the service-exposed and virgin tubes of the same material at 40 MPa revealed that deterioration of the creep properties fell within the 20% scatter band, which is well within the specified limits of ASTM standard. The service-exposed primary super heater tube is thus in a good state of health. Damage Resistance of a Thermal Barrier Coated Super Alloy for Combustor Liners in Aero Turbines during Fatigue and Creep A.K. Ray, National Metallurgical Laboratory, Jamshedpur, India; B. Goswami, R.V.S. College of Engineering and Technology, Jamshedpur, India; A. Kar, A.K. Ray, H.K. Das, P.K. Roy, National Metallurgical Laboratory, Jamshedpur, India; S.B. Kumar, National Institute of Foundry and Forge Technology, Ranchi, India; and S.C. Bose, National Metallurgical Laboratory, Jamshedpur, India This paper deals with an evaluation of the lifetime of a thermal barrier coated (TBC) C263 superalloy under fatigue and creep loading. Results revealed that both TBC and bond-coated substrate had higher endurance limits than the base alloy, while the opposite was found for high stress, low cyclic lifetimes. At high stress, the premature failure for these two materials is possibly due to high stress crack initiation/growth in the TBC/bond coat layers. Oxidation is the cause of the reduced life of the bare substrate as compared to the coated substrate while fatigue and creep experiments are carried out in an oxidizing environment. During 800°C fatigue, the bare specimens behave differently from the coated specimens, but both the bond-coated only and bond coat + TBC specimens seem to exhibit very similar results that are within experimental scatter. Delamination of the bond coat, oxidation of the substrate and spallation of the ceramic layer were evident at very high fatigue and creep stresses. Lateral cracks that grew in the ceramic layer parallel to the stress axis were responsible for spallation of the top coat (TBC) at a very high fatigue stress, whereas, at low creep stress, spallation of the top coat was due to the growth of alumina scale (of thickness >3 µm) at the top coat (TBC)/bond coat interface. Sliding Wear Response of Spheroidal Graphite Cast Iron as Influenced by Applied Pressure, Sliding Speed and Test Environment B.K. Prasad, Advanced Materials and Process Research Institute, Bhopal, India The present investigation pertains to the sliding wear response of spheroidal graphite (SG) cast iron in varying test conditions. The wear rate increased with pressure in general while sliding speed produced a mixed influence. Dry sliding caused the highest wear rate followed by one in oil and oil plus graphite lubricated conditions. The severity of frictional heating increased with pressure and speed. The influence of test environment on frictional heating was practically similar to that on wear rate. The operating wear mechanisms were observed to be adhesion associated with smearing of graphite particles and lubricating film formation. Microcracking also contributed to material removal, its severity being the highest in dry condition. Technical Note: High Temperature Electric Conductivity of Pure Silicon S. Fan, Materials Science and Engineering, University of Toronto, Toronto, Ontario; G. Plascencia, Centre for Research and Technical Innovation, CIITEC-IPN, Mexico City, Mexico; and T. Utigard, Materials Science and Engineering, University of Toronto, Toronto, Ontario The electric conductivity of high purity silicon has been measured at elevated temperatures. Thin silicon rods were heated in a horizontal electric resistance furnace up to temperatures of 1120°C. By passing a current through the rods and by measuring the resulting voltage drop, the conductivity was determined in the temperature range from 550 to 1120°C. The data compare very well with reported literature values.

Excerpts taken from abstracts in CMQ, Vol. 47, No. 4. Subscribe—www.cmq-online.ca

88 | CIM Magazine | Vol. 4, No. 3

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voices from industry

Maintaining Canada’s position as a global mining giant by The Honourable Lisa Raitt, Minister of Natural Resources anada is occasionally referred to as a “global mining giant,” a phrase I always maintain is an understatement. From our strong domestic base, Canada’s mining industry has grown to straddle the globe. Today, nearly 60 per cent of the world’s mining companies are Canadian and these companies are active in over 100 countries. There is no question that our geology has played a major role in establishing Canada’s dominance, but an abundance of resources alone cannot account for the success of the industry. Our natural resources may be the foundation, but the powerful industry that stands on that foundation would not exist without the systems and infrastructure that attract mineral and mine exploration and development, a positive investment climate, a highly skilled workforce, strong research capacity, and the long history of innovative public geoscience that has made Canada a preferred target for mineral exploration. Canada’s mining industry has many strengths, but it will take more than momentum to maintain our position of leadership in the face of some serious challenges. The most immediate of these is the impact of a global recession that has affected almost all sectors of Canada’s economy. Credit markets have tightened and, with few exceptions, commodity prices have declined dramatically. As a consequence, many companies are moving to cut their operating costs and conserve cash. During our government’s extensive pre-budget consultations, we heard again and again about mine cutbacks and closures and their impacts on local communities. Having been born and raised in Cape Breton as the coal industry was shutting down, these are stories I know all too well. Our government has responded with an Economic Action Plan that sets out the clear, decisive steps we need to take to protect Canadians from the immediate economic threat, while further strengthening the economic fundamentals essential to support longterm growth and prosperity. This includes initiatives to assist the people and communities that depend on the mining industry for their economic well-being, as well as measures to position the industry for a strong recovery. Our new Community Adjustment Fund will invest $1 billion over the next two years in local efforts to explore and develop new economic opportunities in communities

90 | CIM Magazine | Vol. 4, No. 3

that have been most affected by the global restructuring. We have extended the 15 per cent Mineral Exploration Tax credit until March 2010, and the accelerated capital cost allowance for business investments in machinery and equipment for another two years. We are further strengthening our financial system with measures such as the $200 billion Extraordinary Financing Network. These initiatives will provide immediate benefits and reinforce our government’s ongoing efforts to create one of the most competitive tax regimes in the G7 — by 2010, Canada will have the lowest overall tax rate on new business investment of all major industrial nations. To fully exploit the economic rebound that will occur once demand for minerals and metals ramps up again, government and industry alike must continue to think and act strategically to address some longer term challenges. Our government is moving to address these challenges, which include: insufficient investments in R&D representing missed opportunities to improve our productivity, our environmental performance and the growing demand for green technologies; uncertainty in the regulatory system, which discourages investment and erodes cost competitiveness; and base metal reserves in longterm decline. One example is the new five-year, $100 million public geoscience program that Prime Minister Harper announced in Budget 2008 to map the mineral and energy resource potential of Canada’s North. Results of seven new surveys are available already. After only a year in operation, the Major Projects Management Office is providing overarching management of the federal regulatory review process for over 40 projects. We are also supporting the industry’s efforts to exercise greater social and environmental responsibility with initiatives such as the “Green Mines Green Energy” research project launched by my department’s CANMET division. Our recently released Corporate Social Responsibility Strategy provides tools and advice Canadian companies need to meet and exceed the unique social and environmental challenges they face when operating in developing countries. These are the investments — in people, in knowledge, in systems and in social and environmental responsibility — that are the key to assuring the strength of our mining industry in both the short and long term. With our ongoing commitment to partnership — between an innovative industry and a responsive government — we can assure that this “global mining giant” continues to grow in stature and importance. CIM

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