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CONTENTS|CONTENU CIM MAGAZINE | AUGUST 2013 | AOÛT 2013
TOOLS OF THE TRADE 10
The best in new technology Compiled by E. Moore and H. Mathisen
NEWS 13 18 20 22 24
Industry at a glance Slow road to the Ring of Fire What happens now
25
that Cliffs has put its chromite project on hold? by E. Moore Hot on the trail Researchers track the footprints that lead to mineral discoveries by V. Heffernan The right to privacy Who benefits from confidential impact and benefit agreements? by A. Livingstone The green path to China China’s environmental policies open up opportunities for Canadian suppliers by I. Ewing
25
Seeing the light Industry and civil society agree Canadian transparency regulations moving in the right direction by A. Livingstone
COLUMNS 26 28 29 30 31
MAC Economic Commentary Countries, companies, citizens benefit from greater transparency by B. Marshall Jurisdictions Will Pascua-Lama fines have a chilling effect on mining in Chile? by I. Grbeši´c and P. Leyton Eye on Business Quebec’s new Mining Act would increase uncertainty and costs by C. Kazaz Un oeil sur les activités La nouvelle loi sur les mines du Québec pourrait augmenter l’incertitude par C. Kazaz Workplace Culture Seeing gender differently by D. Laplonge
36
UPFRONT Education/Training 32
Primed for B.C.’s future BC AMTA aims to fill
34
Make it official Universities push to keep com-
36
Three days can make a career Field trip
mining industry skills gap by V. Danielson munity relations programs going by B. Simon designed by and for geophysics students connects them with jobs by A. Lopez-Pacheco
38
Sustainable mining is gay-friendly Joshua Collins urges companies to put academic HR theories to the test by P. Braul
4 | CIM Magazine | Vol. 8, No. 5
FEATURE | ARTICLE VEDETTE
40 TECHNOLOGY Drilling & blasting 63
NAMES TO KNOW LES NOMS À CONNAÎTRE
Value in pieces Smarter tools and bold ideas promise better blasting results by C. Baldwin
CIM COMMUNITY 66
Have wisdom, will travel CIM’s distinguished lecturer lineup stacked with industry expertise by H. Mathisen
14 FIGURES WHO HAVE SHAPED TODAY’S MINING INDUSTRY – AND WHO ARE PUSHING IT IN NEW DIRECTIONS.
66
nents conférenciers de l’ICM bénéficie d’une expertise industrielle hors pair par H. Mathisen
14 PERSONNES QUI ONT FAÇONNÉ L'INDUSTRIE MINIÈRE D'AUJOURD'HUI ET LA POUSSE VERS DE NOUVEAUX HORIZONS.
TECHNICAL ABSTRACTS
by/par P. Braul, G. Chandler, A. Dion-Ortega, I. Ewing, K. Lagowski, A. Lopez-Pacheco
72
PROJECT PROFILE | PROJET EN VEDETTE
Le parcours du savoir Le groupe d’émi-
56
56
Southern exposure Hudbay Minerals chose the Constancia copper mine in the Peruvian Andes to be its first major development project abroad.The 85-year-old company is already at work to prove it will not be its last. by P. Blin and A. Dion-Ortega
60
Plein cap vers le sud Hudbay Minerals a choisi la mine de cuivre Constancia située
CIM Journal
IN EVERY ISSUE 6 8 73 73 74
Editor’s letter President’s notes | Mot du président Calendar Professional directory Mining lore by A. Fitzpatrick
dans les Andes péruviennes en tant que premier grand projet de développement à l’étranger. Cette société, fondée il y a 85 ans, est déjà à l’œuvre pour prouver qu’il ne s’agira pas de son dernier travail. Par P. Blin et A. Dion-Ortega
68
August 2013 | 5
Editor-in-chief Ryan Bergen, rbergen@cim.org Executive editor Angela Hamlyn, ahamlyn@cim.org Managing editor Andrea Nichiporuk, anichiporuk@cim.org
editor’s letter Section editors
Character study
Tools of the Trade:
Peter Braul, pbraul@cim.org Herb Mathisen, hmathisen@cim.org News, Columns and CIM Community:
“N
ames to know” (p. 40) is our latest of the “Who’s Who” series we began in 2011. And with this feature, rather than simply compile a list of the biggest companies, or the most richly rewarded CEOs, we made a point of profiling people – some well known and others not – whose work or influence are emblematic of the trends that define and continue to shape the industry. That is why you will find Anglo American CEO Mark Cutifani sharing space with Sergio Campusano, a community leader in Chile’s Huasco Valley. Cutifani stands in for the latest class of CEOs: one which must calm shareholders angered by slumping share prices, and map out a different, more conservative course for some of the world’s biggest mining companies. Campusano, a member of the indigenous Diaguitas, has been a thorn in the side of such majors by sparking opposition to mining and frustrating the development of projects in the mountains of northern Chile. He is one example of the on-the-ground leaders whose resistance has played a part in the head office upheavals. Together the 14 figures on our watch list reveal the character and complexity of the industry at this moment. A theme that surfaces throughout this issue, beginning with Bob Schafer’s “President’s Notes,” is diversity in the workforce. No one can deny that the industry has been explicit in stating its intentions to be more inclusive, but the project has proven hard to execute. Both mining veterans, such as former Xstrata Nickel chief Ian Pearce, and those with a more removed perspective, like our Q&A subject Joshua Collins, take the industry to task for old habits and a certain lack of self-reflection, which tend to frustrate the best intentions to change. They, as well as Dean Laplonge in his column, “Seeing gender differently,” (p. 31) lay out the problems that must be confronted and offer the requisite first steps to making the workplace more inclusive. Most of you will have also received the latest edition of the CIM Journal. The eight papers that comprise the special issue on gold provide a great survey of current practices in processing and mineralogy, as well as more concentrated coverage of specific projects. In sum, it is a fine collection of end-of-summer reading. Enjoy.
Herb Mathisen, hmathisen@cim.org Feature and Upfront: Peter Braul, pbraul@cim.org Project Profile and Technology: Ryan Bergen, rbergen@cim.org Technical Section: Andrea Nichiporuk, anichiporuk@cim.org Copy editor/Communications coordinator Zoë Koulouris, zkoulouris@cim.org Web editor Nathan Hall, nhall@cim.org Web support Maria Olaguera, molaguera@cim.org Contributors Correy Baldwin, Pierrick Blin, Graham Chandler, Vivian Danielson, Antoine Dion-Ortega, Ian Ewing, Aaron Fitzpatrick, Ivan Grbeši´c, Virginia Heffernan, Charles Kazaz, Krystyna Lagowski, Dean Laplonge, Patricio Leyton, Andrew Livingstone, Alexandra Lopez-Pacheco, Brendan Marshall, Eavan Moore, Anna Reitman, Bernard Simon Editorial advisory board Alicia Ferdinand, Garth Kirkham, Nathan Stubina, Vic Pakalnis Translations SDL and Karen Rolland Published 9 times a year by the Canadian Institute of Mining, Metallurgy and Petroleum 1250 – 3500 de Maisonneuve Blvd. West Westmount, QC, H3Z 3C1 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($174.00); Non-members (Canada), $220.00/yr (PE, MB, SK, AB, NT, NU, YT add $11.00 GST, BC add $26.40 HST, ON, NB, NL add $28.60 HST, QC add $32.95 GST + PST, NS add $33.00 HST) Non-Members USA and International: US$240.00/year. 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 Janet Jeffery, jjeffery@dvtail.com, ext. 329 Neal Young, nyoung@dvtail.com, ext. 325 Account Manager Tristan Cater, tcater@dvtail.com, ext. 326
This issue’s cover Sandstorm Gold and Sandstorm Metals & Energy CEO Nolan Watson Photograph by Jeff Vinnick Layout and design by Clò Communications Inc. www.clocommunications.com
Ryan Bergen, Editor-in-chief editor@cim.org @Ryan_at_CIM_Mag
Copyright©2013. 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.
Printed in Canada 6 | CIM Magazine | Vol. 8, No. 5
errata news | industry at a glance Detour Gold president and CEO, in a release. “We are looking forward to the future as we move closer to becoming Canada’s leading intermediate gold producer.� Located roughly 260 kilometres northeast of Timmins, Ontario, the Detour Lake operation is poised to become Canada’s largest operating gold mine, according to the company. While it expects to produce between 350,000 to 400,000 ounces of gold this year, the company aims to produce 657,000 ounces per year once the mine reaches full-scale production. The mine life is projected for 21.5 years, with open pit mineral reserves of 15.6 million ounces of gold. – H.M.
The Brunswick Mine will close its doors for good this month after operating for 49 years.
Courtesy of Terry MacDonald, Brunswick mine/Xstrata
Zinc blot
miner. “It was one of the biggest zinc mines in the world. At one point in time, it was employing 1,700 workers.� – H.M.
Suncor grounds Voyageur In late March, Calgary’s Suncor Energy announced its intention to scrap the construction of its planned Voyageur upgrading plant near Fort McMurray. The project, with a 2008 price tag of about $11 billion, was a joint venture between Suncor (51 per cent) and France’s Total SA (49 per cent). It proposed to upgrade product from Suncor’s mines at a rate of 200,000 barrels per day into premium synthetic crude, ultra-low sulphur diesel and low sulphur diluent. “The global market has shifted,� said Sneh Seetal, spokesperson for Suncor. “A rise of tight oil has increased competition for light sweet refining capacity and margins are decreasing.� Suncor took a writedown of $1.48 billion on the project last February. “We considered our commitment to allocate capital according to our priorities of funding the base business, developing higher-return growth projects and accelerating the return of cash to shareholders through dividends and – H.M. share buybacks,� said Seetal.
In “Brunswick mine to close in Mayâ€? (p. 26, May 2013), we incorrectly stated that the mine had produced 148 million tonnes of zinc SAFEETY STOP L over its lifetime. As reader Phillip Crowson points out, “that not only suggests an ore grade of over 100% zinc – a degree of salting that would shame even the most blatant fraudster – but that the mine produced the equivalent of some 12 years’ global output of zinc metal at present rates.â€? Mr. Crowson is indeed correct. The statement should have read that the mine had put 148 million tonnes of ore through its mill over its 49 years. We apologize for the oversight. >> opened in 1964 and, over its 49 years, operators mined 136 million tonnes from the no. 12 ore body and produced 148 million tonnes of zinc from its mill. The mine has outlived expectations. “We’ve been able to stay productive and cost-effective in mining essentially low-grade ore that was left behind and was never part of any of the mining After nearly 50 years of operation, plans,â€? said James Cormier, superintenXstrata’s Brunswick mine near Bathurst, New Brunswick, has put the last of its dant for the environment and community affairs. The mine is currently ore through the mill. The zinc mine first working through its transition plan, hoisting all of its underground cable operated equipment to the surface for recycling and re-use. A third-party company will be demolishing the mine’s infrastructure and the tailings basin will be secured. “All in all, it’s a five-year project for the reclamation of the site, which then basically puts us into a care-andmaintenance mode that will go Broken Cable Detection into perpetuity,â€? Models Available v )3/ 2EGISTERED said Cormier. “It’s a big loss,â€? Write r or Call today for fo More Information! said Yvon Godin, CONVEYOR COMP PONENTS COMP PANY A NDP member of 3%,4:%2 2$ s 0 / "/8 s #2/37%,, -) nÂŁĂ¤Â°ĂˆĂ‡Â™Â°{Ă“ÂŁÂŁĂŠUĂŠnää°ÓÎΰÎÓÎÎÊUĂŠ 8ĂŠnÂŁĂ¤Â°ĂˆĂ‡Â™Â°{x£ä parliament for www.conveyorcomponents.com Acadie-Bathurst info@conveyorcomponents.com and a former Brunswick mine
Brunswick mine to close in May
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Vote for mining in B.C.
To prepare for British Columbia’s May 14 election, mining organizations in the province have teamed up to raise voter awareness about mining issues. The Mining Association of BC (MABC), the Association for Mineral Exploration BC, Mining Suppliers Association of BC and the Coal Association of Canada are behind the VoteMining.ca website, a resource where residents can access facts and information about the importance of a thriving mining industry to the province and its economy. “This is not intended to support the election of a particular party,â€? said ZoĂŤ Younger, MABC vice-president of corporate affairs. “It’s intended to be entirely non-partisan but focused on the objective of supporting the industry.â€? Younger added the election will feature many first-time candidates and the website can inform those new candidates about the mining industry. It will
26 | CIM Magazine | Vol. 8, No. 3
TECHNOLOGY Shafts & Hoists Lifeline of the mine By Eavan Moore
Line item Courtesy of ABB
Our May Technology feature “Lifeline of the mine� (p. 83) stated that AngloGold Ashanti’s Moab Khotsong mine has the world’s deepest continuous shaft at 3.5 kilometres. In fact, the mine has the deepest single lift shaft.
Underground mining has its ups and downs – and that is by design. Hoist systems shoulder the burden of transporting people, equipment and ore kilometres underground, while meeting heavy production demands.
A construction crew installs a drum hoist, a system well suited for today’s deep mines.
As miners dig deeper, their hoists must keep up with the change in scale. The modern standard of digital control gives systems built-in flexibility to cope with new conditions, but the greatest challenge, and the frontier in research and development, is the rope on which all else hangs. “It’s a bit clichĂŠ to say it, that hoist ropes are the lifeline of the mine,â€? says Allan Guse, principal engineer, hoisting group, Vale Canada Ltd. “But the fact is, the rope really is the key element of the whole system, around which much of the rest of the system is designed and configured.â€? Rope strength and longevity are the factors that limit the efficiency of a hoist system. Typical hoist rope designs surround a steel core or fibre with additional clusters of steel wires. With use, the metal corrodes. On a drum hoist, the coils rub against each other where they wrap around the drum, resulting in wear stresses. Deeper shafts – now extending beyond 3,000 metres – put even more strain on hoist ropes. It helps that staying on top of rope condition has gotten easier. Canadian R&D firm C-Core developed a camera network that saves the hour or so each day that a person would normally spend visually inspecting the rope on the shutdown hoist. The system, called RopeInspector, is marketed by Bestech. Electromagnetic inspection systems have also advanced. Both CANMET and South African firm Ansys have developed systems that provide ongoing monitoring during normal operation. Ansys’ Continuous Rope Monitoring System is installed at a number of mines, including AngloGold Ashanti’s Moab Khotsong, which boasts the world’s deepest continuous shaft at 3.5 kilometres. The system generates a constant magnetic field to expose broken wires, corrosion and other problems. It shows a basic status display on the operator’s screen, sends out an alert when it sees deviations from its designated safety parameters, and stores more detailed data for reference. “If you can [monitor] that continuously, then you can see May 2013 | 83
ACHIEVEMENT Mosaic wins philanthropic award The Committee Encouraging Corporate Philanthropy (CECP) presented the Mosaic Company with a 2013 Excellence Award in Corporate Philanthropy for its fruitful efforts in helping smallholder farmers in Guatemala, India and eight African countries become more productive by using enhanced farming techniques to increase their average yields. The support came via The Mosaic Villages project, which was launched in 2008, and partners with HELP International, the Institute of Rural Research and Development (IRRAD), and Millennium Promise. The Mosaic Villages project seeks to overcome the challenges of food security and water scarcity. Farmers who take part in the program receive no-interest loans to purchase crop nutrients as well as agronomic education to improve their understanding about the 4Rs: right time, right place, right source and right rate. Loans are repaid when the farmers sell surplus crop yields at harvest. Farmers have either trebled or quintupled their yields since they started participating in the project.
August 2013 | 7
president’s notes | mot du président
Opening the door “Diversity” is one of the latest buzzwords that periodically creates upheaval in the realm of human resources. This is especially true for the mining industry which, perhaps more than most business sectors, has long been the domain of men of European heritage. At CIM we recognize the need to address this legacy and to promote a more diverse workforce. This takes many forms such as the development of forums to push people to break with tradition; the endorsement of programs that promote the recruitment, skills training and mentoring of aboriginal peoples; the fostering of the recruitment and retention of women; and international outreach to bring new talent to the operating environment. The term “diversity,” I believe, is helpful for launching discussions about change in the workplace, but it will only take us so far. “Diverse” implies differences or separateness that must be overcome. I like to think along the lines of “inclusiveness,” as it captures the potential that many kinds of people, cultures and ideas can bring to an organization. It implies a bringing together of various intellectual, cultural and technical perspectives in a workforce, creating a powerful dynamic that promotes productivity improvements and innovation. In our places of employment, inclusiveness is an opportunity to maximize the workforce.
Robert Schafer CIM President | Président de l’ICM
Inclusiveness is essential to the mandate of CIM and to me as its president. With the recent creation of a steering committee to tackle this issue, we have formalized our commitment to this goal and made it one of the organizing principles for Vancouver 2014, our next annual convention, and its theme “Mining 4 Everyone.” It is also guiding my outreach to current and potential members, encouraging them to share and participate in activities at the CIM branch and national levels. It is, I hope you will agree, the key to a successful and satisfying future.
Ouvrir la porte La « diversité » : un des derniers mots à la mode qui bouleverse régulièrement l’univers des ressources humaines. C’est valable notamment pour l’industrie minière qui, peut-être plus que la plupart des secteurs d’activité, a toujours été l’apanage des hommes d’origine européenne. À l’ICM, nous reconnaissons qu’il faut se pencher sur cet héritage et promouvoir une main-d’œuvre plus diversifiée. Ce processus peut prendre plusieurs formes, notamment : le développement de forums visant à inciter les gens à rompre avec la tradition; l’adoption de programmes qui favorisent le recrutement, la formation et le mentorat des peuples autochtones; la promotion du recrutement et de la rétention des femmes; et une sensibilisation internationale visant à attirer de nouveaux talents au sein de l’environnement d’exploitation. Le terme « diversité », à mon sens, est utile pour lancer les discussions sur le changement en milieu de travail, mais ne nous mènera pas bien loin. La notion de « divers » implique celle de différence ou de séparation, qui doit être surmontée. J’aime parler du concept d’« inclusivité » qui traduit bien le potentiel qu’un mélange varié de types de personnes, de cultures et d’idées peut apporter à une organisation. Le concept renferme le rapprochement des différents points de vue intellectuels, culturels et techniques au sein d’un groupe de travail, créant une dynamique puissante qui favorise l’amélioration de la productivité et l’innovation. Dans nos lieux de travail, l’inclusivité est une occasion de maximiser la main-d’œuvre. L’inclusivité est essentielle au mandat de l’ICM et pour moi en tant que président. Avec la création récente d’un comité directeur chargé de cette problématique, nous avons confirmé notre engagement envers cet objectif et en avons fait l’un des principes phares de Vancouver 2014, notre prochain congrès annuel, dont le thème est « Mining 4 Everyone » (L’exploitation minière pour tous). L’inclusivité est également le fil conducteur de mes efforts de sensibilisation s’adressant à nos membres actuels et potentiels et visant à encourager ceuxci à échanger et à participer aux activités de l’ICM au niveau local et national. Je suis d’avis, et j’espère que vous serez d’accord, qu’il s’agit là de la clé d’un avenir prospère et réjouissant.
8 | CIM Magazine | Vol. 8, No. 5
Courtesy of Ruukki
the best in new technology
Courtesy of Victaulic
OF TOOLS THE TRADE
◢ A fitting accompaniment
◢ A perfect circle
◢ Harder steel Finnish steelmaker Ruukki has extended its directquenching method to a thicker range of Raex wear-resistant steel plates suitable for heavy mining equipment. “We now have the widest range in the market, from two to 80 millimetres,” says Josu Piña, vice-president, Americas. “We pioneered the direct-quenching method in the thinner metal. Now we have proven it with the thicker range.” Direct quenching cools the steel from 900 C to ambient temperature immediately after it is rolled, instead of letting it cool, re-heating it, and then quenching it. The process makes steel very hard and strong for its weight. Piña says the direct-quenched heavy steel also has superior surface quality compared to steel from traditional quenching methods. Ruukki suggests using its new steels for various parts including excavator buckets, conveyor systems, crushers, silos and hoppers. E.M.
The F-Class vibrating screen manufactured by W.S. Tyler now comes in a four-foot-wide version for operations with small footprints and capacities. The F-class screen’s double eccentric shaft assembly delivers consistent acceleration that helps prevent even sticky particles from blocking openings, according to Duncan High, applications manager, vibrating screens. “Typical two-bearing-type pieces of machinery develop their circular flow by calculating how much weight to put onto the balance wheel,” he says. “On the F-class, the circle is developed by the eccentricity of the shaft assembly. You have a consistent circle, whereas on a twobearing screen it tends to fluctuate to a certain degree with the amount of material that comes onto the deck.” The counterbalance works together with shear rubber mounts to keep down vibration and noise, which is especially useful when multiple screens are placed side by side. One four-foot model can process up to 300 tonnes per hour. E.M. 10 | CIM Magazine | Vol. 8, No. 5
Courtesy of W. S. Tyler
Victaulic has announced new full flow fittings to match the VicRing flexible pipe couplings it released last year. Both work within the advanced groove system (AGS) designed to simplify large-diameter pipe installation. Instead of welding pipes directly to one another, AGS pipes each have a ring buttwelded to their ends, and then the rings are coupled together. This speeds up the installation dramatically, according to Scott Frey, marketing communications manager. He says a test-run pipe replacement saw the AGS coupling done in minutes, when the same 40-inch pipe had taken seven hours to weld into place using conventional methods. Since cutting a connector groove into the pipe weakens its walls, Victaulic developed a groove pattern for the Vic-Rings that maintains wall thickness even at joints, mitigating abrasion from slurries and extending the pipe’s service life. The flexible version of AGS accommodates expansion, contraction and deflection; when more than gentle bending is needed, carbon steel fittings are available in sizes from 12 to 48 inches. Eavan Moore
OF TOOLS THE TRADE
the best in new technology
◢ Seal the deal
Courtesy of Micromine
Courtesy of Metso
Courtesy of 3M
The unique chambered design of Metso’s new ESF mechanical slurry pump seal extends its life even in abrasive, heavy slurry applications, says Bill Schlittler, business development manager, pump solutions. Water-conscious customers that need to pump slurry are demanding the type of mechanical seals originally designed for lighter applications. “Normally mechanical seals see some process fluids,” Schlittler explains. “To put heavy slurries around the face of a mechanical seal becomes very risky. So the idea behind this is to put the seal in the existing stuffing box, and then to put water into that chamber. Now it’s acting more like a water pump seal, because it’s totally isolated from the slurry.” The water gently flowing through the chamber does not dilute the slurry and tungsten carbide makes the new seal hardy. It fits into the existing gland housing on Metso’s Orion Series pumps to allow inexpensive retrofitting. E.M.
◢ Ultra-hold spray 3M has released a polymeric composite membrane (PCM) spray to complement – and perhaps one day replace – welded wire mesh or shotcrete ground support in underground hard rock mines. “PCM helps retain the rock in place between rock bolts as a method of local ground support,” says James Bradley, technical leader of mining markets. “As the rock moves or fails, PCM is able to capture that rock mass by elongating – or bagging – up to 200 per cent elongation, under loads that exceed 20 megapascals.” This improves on traditional sprayable concrete methods, which Bradley says do not have very high tensile strength. “Concrete can’t stretch.” 3M’s pumpkin-orange polymer spray has an equal or quicker cure time than shotcrete and it also enhances visibility underground, letting workers know which areas have been supported. While the product is currently limited for use in underground areas already supported by shotcrete and wire mesh, once an application method is fully adopted for unsupported areas, the company hopes PCM can replace traditional ground support methods. Bradley says the advantages are obvious: the thickness of PCM spray applied is generally four millimetres, whereas shotcrete applications are two inches thick, which improves underground logistics. “Essentially, one coat of PCM would be the same as four tractor-trailer loads of shotcrete.” Herb Mathisen 12 | CIM Magazine | Vol. 8, No. 5
◢ Full-cycle mining software Released in late May by Micromine, the Micromine 2013 software package includes more than 100 enhancements for three-dimensional (3D) mapping, interpretation, modelling and design. Micromine 2013 accounts for the full mining cycle, says Frank Bilki, training and support manager, “beginning at target generation, early stage exploration, all the way through to geologic and resource modelling, mine planning, design and mine production.” It introduces two new modelling methods – implicit and stratographic – on top of the traditional 3D modelling the software had previously employed, allowing users to combine the three independent and complementary methods to improve results. “A user with the right module configuration has a complete tool kit to model virtually any mineral deposit; it doesn’t matter what the style, geology, or the minerals are,” says Bilki. The software also introduces four new layers to the software’s 3D display, including seismic SEG-Y file format and annotation, to bring the overall number of layers to roughly two dozen. Fully certified by Microsoft as Windows 8 compatible and Microsoft Surface Pro touch-screen-supported, the overall performance of the software has been upgraded too. “It can handle bigger amounts of data while using less memory than before,” says Bilki. H.M.
industry at a glance | news
A massive forest fire in Northern Quebec that threatened communities and caused closures to the James Bay Road also forced Goldcorp to evacuate 760 employees from its Éléonore site. All but 35 workers, who stayed on-site as an emergency measures crew, were preventatively flown from the site on July 3 and 4, when the fire was just 100 kilometres away. Goldcorp is currently constructing the Éléonore mine, which it expects to begin production in late-2014. A period of rain helped to extinguish the blaze and with shifting winds pushing smoke from the site, delivery of fuel and supplies picked back up on July 8, and the company reported that the construction schedule would not be effected. – Herb Mathisen
Ghana cracks down on illegal mining During a six-day operation in June, Ghana arrested 168 Chinese citizens for illegal gold mining, to combat a problem that Ghanaian officials say has reached alarming proportions. The arrests did not come entirely without warning. In May, Ghanaian president John Dramani Mahama spoke of his country’s heightened efforts to address the issue. “I am sending a clear signal to the offending individuals and groupings that the government will not allow their activities to cause conflict, dislocation, environmental degradation and unemployment when in fact the sector should rather benefit our communities and our country,” he said. The June operation, coupled with the arrest of 120 illegal miners in March, is still just the tip of the iceberg. Chinese media estimate some 50,000 of its citizens have flocked to Ghana’s “gold rush” since 2005, most of them from Shanglin, an impoverished county in Guangxi province. “Across West Africa, the problem of illegal artisanal mining and illegal small scale mining can be traced back
Courtesy of NASA
Forest fire forces evacuation of Goldcorp’s Éléonore
Northern Quebec forest fires seen from satellite on July 4. Goldcorp’s Éléonore mine was evacuated that day due to a massive forest fire near Upper James Bay. The mine site is located under the giant cloud of smoke from the cluster of fires on the upper left side of the photo.
to poor regulation and weak oversight on the part of governments,” says Avril Cole, a Toronto-based lawyer with Norton Rose Fulbright Canada LLP. “Governments in these jurisdictions also often lack the financial resources and administrative capacity to monitor artisanal and small scale mining and fund the initiatives necessary to combat the problem of illegal artisanal – Alexandra Lopez-Pacheco mining.”
Cliffs’s Carrabba to step down In early July, Joseph Carrabba announced he will be leaving his post as president and CEO of Cliffs Natural Resources effective Dec. 31, 2013. The Cleveland-based company revealed that Laurie Brlas was also retiring as executive vice-president and CFO, effective immediately. No successor to
August 2013 | 13
news | industry at a glance Carrabba was named. “This is an important transition for our company, and the board believes it is appropriate and in the interests of the company and our shareholders to take the time to conduct a thorough search for the best possible candidate,” said Jennifer Mihalcin, public affairs representative. Carrabba started with Cliffs as COO in April 2005. He has led the company since September 2006, including through its C$4.9 billion acquisition of Consolidated Thompson Iron Mines Ltd. in 2011. The company took a US$1 billion writedown on the deal earlier this year and, with sluggish iron ore prices, laid off workers at the Bloom Lake iron ore mine in Quebec by delaying the project’s expansion. More recently, Cliffs suspended environmental assessment work on its massive chromite deposit in Ontario’s Ring of Fire region, due to delays on important decisions from the provincial government. See Slow road to the Ring of Fire (p. 18) for more details. – H.M.
Orbite signs offtake deal with Glencore Though Orbite Aluminae has not yet determined where it will build its proposed smelter-grade alumina processing plant, the Quebec-based company has, in Glencore International, found a buyer for the plant’s eventual output. Orbite plans to process ore from its Grand-Valleé aluminous clay deposit in Quebec’s Gaspé region using a proprietary extraction technique rather than the standard Bayer process. This acid process is able to extract alumina, while also recovering oxides, hematite and rare earth elements as byproducts without generating red mud. The subsidiary of GlencoreXstrata agreed in June to purchase all the smelter-grade alumina produced over the first ten years. According to Orbite, the agreement is also the starting point to negotiate Glencore taking a potential stake in the proposed 7,000 tonne-per-day smelter facility. In addition to putting the pieces in place for the planned smelter-grade plant, the company is currently shopping the high-purity alumina (HPA) it produces at its plant near CapChat, Quebec to potential buyers. However, scaling up the HPA plant next year to three tonnes per day, the construction of the smelter-grade facility and the future of the GrandValleé mine depend on the company finding ready buyers for the premium alumina product that can fetch up to $300 per kilogram. – Ryan Bergen
No mining IPOs in Q1 2013 The first quarter of 2013 saw no initial public offerings (IPO) from Canadian mining companies on the TSX and TSXVenture exchanges – the first time this has occurred since the TMX Group acquired the Venture Exchange in 2002, according to Carolyn Quick, TMX Group communications director. “What we noticed was mining equities were probably performing just as well as other TSX stocks, but sometime around January 22 onward, mining equity returns were actually slowing or dropping,” said Jay Patel, partner at Ernst and 14 | CIM Magazine | Vol. 8, No. 5
industry at a glance | news Young, upon release of the firm’s quarterly Canadian Mining Eye report. “What we see happening in a situation like that is people take a wait-and-see approach,” he added. “Even if you are ready to do an IPO, you might sit on the sidelines to wait and see how things pan out.” Despite the lack of IPOs, Patel said he still believes the outlook for mining is relatively positive. “Mining is a longterm business and we think good assets will get funded,” he said. “Certainly some of the mining companies that are taking a longer-term view and have the ability to withstand the current market will benefit themselves in the long run.” – H.M.
Centerra talks partnership with Kyrgyzstan Following the unrest at its Kumtor gold mine this spring, Centerra Gold has entered into discussions with the
Kyrgyzstan government about potentially having it become a joint venture partner in the mine. Under the current agreement, the government, through a wholly-owned subsidiary, holds a 37.2 per cent equity stake in the project. In late May, hundreds of Kyrgyz citizens – some on horses – stormed the gold mine, with some calling for its nationalization. On May 28, the road to the mine was blockaded by protesters, and two days later, power was cut off, suspending mining operations and causing US$4 million in damages, according to the government. Kumtor, which according to Toronto-based Centerra is the largest private employer and foreign investment in the Kyrgyz Republic, produced more than 315,000 ounces of gold in 2012. Earlier this year, a parliamentary decree called for a renegotiation of the project’s operating agreement so the government could increase revenues. The company was also hit with a $315-mil-
lion environmental claim. Discussions are now centered on the Kyrgyz government possibly trading its current stake in the mine to become a joint venture partner, which according to early reports from the government could double cash flows to the country. – H.M.
Teck appoints new executive VP and COO Vancouver-based Teck Resources has appointed Ian Kilgour as its new executive vice-president and COO as of June 20, 2013. Kilgour leaves his two-year role as senior vice-president of Teck’s coal operations to take on this new position, which puts him at the helm of all Teck’s mining operations and joint ventures in its steelmaking coal, copper and zinc business units. Kilgour, a metallurgical engineer who holds a Master of Science from the Royal School of Mines in London and a
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August 2013 | 15
news | industry at a glance political events in Egypt continue to unfold and the company’s licence challenge moves through the courts. Vancouver-headquartered Alexander Nubia is exploring in the Eastern Desert, 500 kilometres south of Cairo. CEO Alexander Massoud played down the impact of the upheaval on operations, explaining the company is not in a permitting or licensing stage and hot summer months tend to be low-activity anyway. “I’ve already been through this once. I think change was expected because there was a lot of dissatisfaction and this will be good for the country.” Some gold exploration activities in Egypt are on the back burner, though. SMW Gold has two licences north of Sukari. Operations director Mohammed Hadi said the hold-up results from the political situation, though he expects work to resume in two or three months. Egypt’s fragile democracy has not been helped by the coup, said Maarten-Jan Bakkum, senior emerging market strategist at ING Investment Management, and risk of an economic blow-up has increased. He added however that, in the commodities sector, companies are used to operating in countries with grim political environments. Ownership of assets, he said, will be the primary concern. Courtesy of Centamin
Bachelor of Applied Science from the University of Melbourne, has more than 30 years of experience in the mining sector. He has served in senior roles with the BHP Billiton Mitsubishi Alliance, BHP’s Goonyella Riverside Mine and at Minera Escondida. “Ian brings a strong track record of consistently driving results, a focus on cost management and global experience to the COO role,” said Don Lindsay, Teck president and CEO. – A.L.P.
Centamin’s Sukari gold mine in Egypt.
Coup for gold Egypt’s only modern gold producer is proving adept at weathering political storms. In the immediate aftermath of the country’s military intervention to oust President Mohamed Morsi in July, Centamin’s shares went up by 11 per cent. The company had been battling the
administration over the legality of its permit to operate the Sukari gold mine – its only revenue-generating asset. It helps that Centamin announced solid second-quarter performance. Total gold production was up 39 per cent year-on-year at 93,624 ounces and analysts noted targets have been met throughout political turmoil. Broker RFC Ambrian wrote in a client note that share price volatility is likely though as
– Anna Reitman
Kinross walks away from Fruta del Norte After more than two years of negotiations with the Ecuadorian government, Kinross Gold Corp. has halted development of its Fruta del Norte gold project, which it acquired in 2008 for $1.2 billion. The two parties hit an impasse over the government’s plan for a 70 per cent windfall tax on revenue and its subsequent decision to not extend the negotiation deadline beyond August 1, 2013. “We have 16 | CIM Magazine | Vol. 8, No. 5
industry at a glance | news said that we will exert strict capital discipline across our company, that we will allocate our capital only to projects which meet our investment criteria, and that we will only enter into agreements that are in the best interests of the company and its shareholders,” said Kinross CEO J. Paul Rollinson. “After a great deal of effort to arrive at a mutually agreeable outcome, it is unfortunate that the parties were unable to reach an agreement on Fruta del Norte which would have met those criteria.” With any sale of Fruta del Norte subject to government approval, and the government indicating it will not support efforts by Kinross to solicit a potential new partner or a buyer, Kinross said it would incur a charge of approximately $720 million in the second quarter, with $700 million expected to be a non-cash charge. “It’s been a tough negotiation,” Rollinson told Reuters. “Sometimes the best
deal is the one that you don’t sign, and that seems to be the case here.” – A.L.P.
New Gold acquires Rainy River Resources On May 31, New Gold and Rainy River Resources announced they had entered into an agreement that would see New Gold acquire Rainy River through a friendly take-over bid. The offer comes in at a 67 per cent premium to Rainy River’s 20-day volume weighted average trading price. New Gold picks up Rainy River’s advancedstage gold project located in northwestern Ontario’s Richardson Township. “The acquisition of Rainy River is consistent with our strategy of identifying opportunities to create shareholder value,” said Randall Oliphant, New Gold executive chairman. “We have followed Rainy River for some time
and see this as an opportune time to add this great asset to our portfolio. We view the combination of Rainy River’s ideal location, sizeable reserve, robust production potential and experienced team as presenting a truly compelling opportunity.” Dale Peniuk, a Rainy River director, described the acquisition as a great outcome for the company’s shareholders. “To be able to realize a meaningful premium, while gaining the ability to combine with a well-established mine builder in New Gold, is a win-win scenario for our shareholders,” he said. – A.L.P.
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August 2013 | 17
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Slow road to the Ring of Fire What happens now that Cliffs has put its chromite project on hold?
Cliffs Natural Resources Inc. announced in June it would suspend environmental assessment work at its Black Thor chromite project in Ontario’s Ring of Fire, saying that several uncertainties had to be resolved before it could justify further spending. “While most aspects of the chromite project have advanced according to plan, temporarily suspending the environmental assessment work acknowledges that certain critical elements of the project’s future are not solely within our control and require the active support and participation of other interested parties such as government agencies and impacted First Nation communities,” said Bill Boor, Cliffs’s senior vice-president of global ferroal- Chromite samples from Cliffs Natural Resources’ project in the Ring of Fire. The company recently suspended work on its loys. “We remain excited about environmental assessment. this project and its potential for Cliffs and northern Ontario. However, given the current unresolved to Noront Resources on a toll basis. The Nations in 2011 to force a more rigorissues, we cannot and will not unilaterenvironmental assessment Noront will ous assessment of the project. Boor said ally move the process forward and must any one of these issues alone could have submit for its smaller Eagle’s Nest nickel project in August or September incormanage our resources appropriately.” justified Cliffs’s decision. “The anporates an alternative westward road The mineral-rich Ring of Fire region nouncement was an attempt to explain rejected by Cliffs as unviable for its has almost no existing infrastructure, to everyone that we’ve got to get movchromite ore project. Neighbouring and the companies exploring there ing,” he said. require government assistance to deDespite Cliffs’s frustration, Michael First Nations prefer the westward option because it links up more comvelop their projects. Despite enthusiasm Gravelle, Ontario’s northern developmunities while crossing fewer major ment and mining minister, expressed from the province, Boor said it has confidence in the existing process: “This rivers. Asked whether the province proven harder than expected to hamwould commit financial aid to Noront’s mer out the details of an agreement is a transformational project. It’s imporcovering critical questions like access to tant that we recognize that taking a little alternative, Gravelle said, “It’s too early to have that kind of conversation.” more time to get this right is as imporelectricity, power rates, and the financial If the torch were passed to Noront, tant as anything else.” burden of building transportation the company and its shareholders He refused to speculate on a future infrastructure. would be prepared to take it and run without Cliffs’s involvement in the Ring Meanwhile, at the time of its deciwith it, according to Paul Parisotto, sion, Cliffs was awaiting approval by of Fire. “Cliffs has made it clear they’re chairman and interim CEO. “We have Ontario’s Environment Ministry on the committed to the project,” Gravelle to have plans in place in the event that said. “Based on my own conversations terms of reference for its environmental Cliffs doesn’t proceed with its project for assessment, a decision by the province’s with them, I’m confident that we will be whatever reason,” he said. “And we are able to move forward.” mining and lands commissioner on an extremely confident that we can proOntario had already promised to easement needed to build its planned ceed with our plans to develop the Ring help fund a proposed north-south access road, and the next phases of a of Fire.” access road built by Cliffs and available judicial review filed by the Matawa First 18 | CIM Magazine | Vol. 8, No. 5
Courtesy of Cliffs Natural Resources
by Eavan Moore
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When asked about these developments, Kirk McKinnon, president and CEO of junior explorer MacDonald Mines, worried that investors would lose interest in the Ring of Fire without decisive leadership from the provincial and federal governments. All types of infrastructure proposals – ranging from obvious to creative – are on the table, including a railway that an organization of northern Ontario transportation unions proposes to build under the auspices of a port authority. Any option would help MacDonald Mines; the urgent need, argued McKinnon, is to pick one infrastructure option and finance it. But the local First Nations’ fight for more inclusion and input into the road’s environmental assessment process – including community hearings in their own languages – will likely impact such decisions. Ontario and nine First Nations, represented by the Matawa Chiefs Council, have agreed to broad regional strategy negotiations that could rewrite the environmental assessment requirements for Cliffs and future projects. Both Cliffs and the First Nations expressed hopes for a mutually satisfactory agreement that could circumvent the judicial review wending its way through court. Judith Rae, a lawyer working on the judicial review, said: “Whether we can get a negotiated outcome will depend on, one, government willingness to change the environmental assessment process, and two, industry willingness to work with a new environmental assessment process. The problem is that we don’t know the answers yet.” Project proponents may take some comfort that in July the province gave the task of leading its negotiating team to Frank Iacobucci. The appointment of the former Supreme Court justice follows Bob Rae resigning as a member of Parliament to devote his energies to
leading negotiations for the Matawa Chiefs Council. “In my opinion, something must be happening, because he
wouldn’t be resigning to take on that role if nothing was going to happen,” said McKinnon. CIM
August 2013 | 19
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Hot on the trail Researchers track the footprints that lead to mineral discoveries
With funding for the $13-million Footprints project in place, geoscientists have gathered at the Canadian Malartic mine in northern Quebec to investigate the subtleties of the low-grade disseminated gold deposit and its surrounding rocks. In late June, researchers also headed for the Highland Valley copper porphyry camp in British Columbia, and the McArthur River uranium trend in the Athabasca Basin of Saskatchewan, to examine how characteristics surrounding those ore bodies could potentially be interpreted as signals of economic mineral deposits. The Canadian Mining Innovation Council (CMIC), which spearheaded the Footprints research project, chose the three camps as areas of focus because they represent the most significant deposit types in Canada. Funding for the project was provided by a $5.1-million grant from the Natural Sciences and Engineering Research Council (NSERC) – the largest grant ever awarded through NSERC’s Collaborative Research and Development program – and $7.5 million in cash and in-kind contributions from industry sponsors. The project aims to improve the odds of finding buried ore deposits by identifying subtle indicators, or footprints, in the surrounding rocks. “Commonly, buried deposits are so deep that you can’t detect the actual mineralization and you have to look for peripheral signs that define the ore system, such as the halo of alteration in the surrounding rocks,” explained Alan Galley, CMIC’s exploration research director. To detect these signs, researchers will tease indicators out of both new and existing data using sophisticated processing and interpretation tools and techniques, like Gocad three dimensional (3D) earth modelling software, to integrate geological and geophysical data at different resolutions, and multi20 | CIM Magazine | Vol. 8, No. 5
Courtesy of Osisko
by Virginia Heffernan
This summer, researchers fanned out across Canada to visit three major mineral deposits, including Osisko’s Canadian Malartic mine in northern Quebec, as part of CMIC’s Footprints exploration project. The research teams are investigating the characteristics surrounding deposits that might signal significant buried ore bodies and potentially inform future exploration work.
variate statistics to query different types of data simultaneously. Although the legacy data collected over the years in these mature camps will play a significant role, the teams will be gathering new information as well. Filling in petrophysical data gaps like magnetic properties and density, for example, will make 3D geophysical inversions more meaningful, explained Michael Lesher, professor of economic geology at Laurentian University. Lesher, who is co-leading the project with the University of Ottawa’s Mark Hannington, said: “We want to bring added value to what the companies have already done. We’ll be defining the footprint so that companies know what parameters to look for.” Lesher and Hannington will be working closely with industry project leader Francois Robert, vice-president of global exploration for Barrick Gold. Robert came up with the initial footprints concept when he identified the need for a different approach to exploration at a time of declining discovery rates.
By the time the Footprints project received official approval in May, the number of participating universities had grown to 24, while the number of industry sponsors had increased to 27, including 14 service providers that will assist with data processing. Having service providers on board will help ensure the project results have commercial spin-offs, said Galley. “This is a great way for the research community to work with industry: a logical thing for Canada to be doing given that we are world leaders in mineral exploration and mine financing,” added Lesher. To foster communication between the two groups, lead researchers will work in the offices of the three main industry partners – Osisko (Canadian Malartic), Teck (Highland Valley) and Cameco (McArthur River) – for about 50 per cent of their time. Mira Geoscience, an industry partner that has customized the Gocad 3D geological modelling system for the mining industry, will provide software training
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for research project staff from its Montreal office. The project will differ from most one-on-one collaborations between universities and industry in that all the partners will be working together, constantly sharing data and ideas. Exploration insights from the Highland Valley area, for instance, could well apply to low-grade disseminated gold deposits such as Canadian Malartic that some believe may be porphyry-related. As for accessibility, industry partners will have the opportunity to use the results exclusively for one year before they are released to the public. Students will be permitted to publish their theses as soon as they are fin-
MOVING ON UP Herchak named NexGen CFO NexGen Energy Ltd. named Andriyko Herchak the chief financial officer of the B.C.-based company, replacing Bethany Kitto, who will stay with NexGen and support the accounting services. Herchak’s last role was as CFO at Hathor Exploration Ltd., which discovered the Roughrider uranium deposits in Saskatchewan. “The appointment of Mr. Herchak as CFO to our executive team is another significant appointment,� said NexGen CEO Leigh Curyer. “Mr. Herchak is extremely well qualified and experienced for the position at NexGen, with an excellent knowledge of our portfolio and corporate activities given his previous role at Hathor. It is with pleasure that I welcome Mr. Herchak aboard.� Herchak received 200,000 stock options under a fiveyear term. One common share can be purchased for $0.40 per share.
ished. Lesher said the first results should be coming out in a matter of months, and a full progress report will
be released to the partners at an annual general meeting at the PDAC conference in March 2014. CIM
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August 2013 | 21
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The right to privacy Who benefits from confidential impact and benefit agreements? by Andrew Livingstone While not a legal requirement, the confidentiality of impact and benefit agreements (IBAs) between mining companies and aboriginal groups in Canada is the status quo. Although some of the details of the deals are made public – namely, job creation and training opportunities for community members and contracts available for aboriginal-owned companies – there is disagreement over whether payments made to aboriginal groups by mining companies should be revealed. Management at Agnico-Eagle Mines Ltd. thinks these terms should be made public. Currently negotiating an agreement with Inuit in Nunavut for its Meliadine project – the second planned gold mine in the Kivalliq region after the company opened its Meadowbank project near Baker Lake in 2010 – the company wants the final agreement out in the open. Portions of its first agreement are public, but not the financial terms. (Terms are nearly always disclosed internally to First Nations members before an agreement is approved.) “We want to have this thing public so people know what is going on, and where the money goes and how much money,” Louise Grondin, the company’s senior vice-president for sustainability, told The Globe and Mail in early June. Indeed, companies like Agnico-Eagle have compelling reasons for making the agreements public. Such disclosure lets investors know where and how companies are spending their money and improves transparency between companies and First Nations organizations. However, it could become problematic for First Nations negotiators if agreements become public knowledge and are used for reference purposes at future bargaining tables, said Shawn Batise, executive director of the Wabun Tribal Council. The council represents six First Nations in the Timmins, Ontario region, and has signed multiple IBAs in the past decade. Batise said there is no cookie22 | CIM Magazine | Vol. 8, No. 5
cutter approach to negotiating an agreement, and while he might wish it could be that easy, such an approach would not benefit First Nations across the country. For one, the project impacts are different in each case. Batise explained that where “the impacts are low in a particular instance, and we negotiated something that’s acceptable to the community and the company,” those benefits would be suited only to that specific project. And those same benefits may not be relatable to other projects, due to the individual needs of each company and the impact the development will have on the community. “Every time we sit down, it’s a different story,” Batise said. But if companies developing a project were able to access previous agreements and make comparisons between the one being proposed and a previous venture, it could create issues. Essentially, First Nations and companies could start off on different pages in terms of what a fair agreement should be, and agreements could become difficult to reach. For this reason, confidentiality in IBAs needs to be maintained for aboriginal groups, agrees Paul Wilson, a British Columbia-based lawyer who works with companies and aboriginal groups to reach agreements, both small and large. Wilson said payments made by a company to a First Nations group do not legally have to be kept confidential, but in most cases it is left up to the First Nations to decide whether to do so. “And they usually decide to,” he said, adding that to First Nations, an IBA is a business deal. “They don’t want people being privy to what they believe should be something only they and the companies know. They view it as their business and no one else’s. There’s no compelling need to make it public.” Confidentiality in agreements may actually suit both sides in negotiations, despite claims from companies and First Nations that the other wants confiden-
tiality, said Ben Bradshaw, founder of the IBA Research Network and professor at the University of Guelph. “The practice of maintaining confidentiality around the financial terms of IBAs persists because it appears to work to the benefit of both industry and community signatories,” he said. “Industry signatories suggest that aboriginal signatories want confidentiality to avoid clawbacks of government program funds, and aboriginal signatories suggest that industry signatories want confidentiality to avoid ever-rising expectations from project to project,” he said. Bradshaw admits he has had more conversations about the topic in the past few weeks than he had in the past five years and suggests this topic may fall within Prime Minister Stephen Harper’s recently announced commitment to mandatory reporting requirements for payments extractive companies make to governments. Still, he said, “We are seeing no evidence of one signatory group loudly calling for disclosure against the wishes of the other – at least for now.” CIM MOVING ON UP Alderon appoints new CFO François Laurin was named chief financial officer of Alderon Iron Ore Corp., replacing Keith Santorelli, who decided to pursue other opportunities. Laurin’s most recent positions were as president and CEO of Cap-Ex Iron Ore Ltd. and CFO of Copper One Inc. “François’ project finance experience with large-scale mining projects adds considerable expertise to our executive team,” said Alderon president and CEO Tayfun Eldem. “Additionally, his background in capital markets and financial reporting further bolsters the company’s executive capabilities.”
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An Introduction to Cutoff Grade Estimation: Theory and Practice in Open Pit and Underground Mines (with a new section on blending optimization strategy) Cutoff grades are essential in determining the economic feasibility and mine life of a project. Learn how to solve most cutoff grade estimation problems by developing techniques and graphical analytical methods, about the relationship between cutoff grades and the design of pushbacks in open pit mines, and the optimization of block sizes in caving methods. INSTRUCTOR: Jean-Michel Rendu, USA • DATE: September 4 - 6, 2013 • CITY: Montreal, Quebec, Canada
Geostatistical Mineral Resource Estimation and Meeting the New Regulatory Environment: Step by Step from Sampling to Grade Control Learn about the latest regulations on public reporting of resources/ reserves through state-of-the-art statistical and geostatistical techniques; how to apply geostatistics to predict dilution and adapt reserve estimates to that predicted dilution; how geostatistics can help you categorize your resources in an objective manner; and how to understand principles of NI 43-101 and the SME Guide. INSTRUCTORS: Marcelo Godoy, Golder Associates, Chile; and Roussos Dimitrakopoulos, McGill University, Canada • DATE: September 9 - 13, 2013 • CITY: Montreal, Quebec, Canada
Quantitative Mineral Resource Assessments: An Integrated Approach to Planning for Exploration Risk Reduction Learn about exploration risk analysis for strategic planning. Understand how to demonstrate how operational mineral deposit models can reduce uncertainties; make estimates of the number of undiscovered deposits; and integrate the information and examine the economic possibilities. INSTRUCTOR: Don Singer, USA • DATE: September 23 – 25, 2013 • CITY: Montreal, Quebec, Canada
2014 – Certification in Ore Reserve Risk and Strategic Mine Planning Optimization Spread over a period of four months, this four-week course is designed for busy mining professionals who wish to update their skills and knowledge base in modern modelling techniques for ore bodies and new risk-based optimization methodologies for strategic mine planning. Gain practical experience by applying the following hands-on concepts and technical methods: methods for modelling ore bodies; stochastic simulations, case studies and models of geological uncertainty; and demand-driven production scheduling and geological risk. INSTRUCTOR: Roussos Dimitrakopoulos, McGill University, Canada • DATE: Week 1: May 5-9, Week 2: June 2-6, Week 3: July 7-11, Week 4: August 25-28, 2014 • CITY: Montreal, Quebec, Canada • INFO:
http://www.mcgill.ca/continuingstudies/programs-and-courses/engineering-0/ certification-ore-reserve-risk-and-mine-planning-optimization
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The green path to China China’s environmental policies open up opportunities for Canadian suppliers by Ian Ewing A growing push in China for more eco-friendly mining has some Canadian mining suppliers seeing green and hoping to get a foothold in the Chinese market. Earlier this year, the CanadaChina Green Mining Innovation Workshop saw around 50 delegates, including 35 Chinese representatives, meet in Toronto to network and hear presentations from Canadian green mining experts. Such exchanges are key to putting mining suppliers on the fast track to growth in Asia. CanmetMINING, a division of Natural Resources Canada (NRCan), organized the workshop held at the PDAC convention in conjunction with the China Mining Association (CMA). “We’re looking to open up a huge market for Canadian companies,” said Xavier Daignault-Simard, a policy analyst at CanmetMINING. “We know market access can be difficult abroad, so if we can open up the market for Canadian suppliers and they can reap the benefits of that, it’s beneficial for all of us. We’re creating an edge, basically, for Canadian companies and creating a brand [by] positioning the country as a leader on green mining.” The difficulty of getting into the Chinese market is well known to Canadian suppliers, according to Spencer Ramshaw, information and communication director at the Canadian Association of Mining Equipment and Services for Export (CAMESE). “China is a highly competitive market that many Canadian and other companies don’t engage with. Many companies focus on other countries where their competitive advantages are more appreciated,” he said. Now, however, the Chinese are focusing on green mining techniques and technologies, due in part to concerns about severe and widespread water and air pollution in that country. The Chinese Ministry of Land and Resources, in conjunction with the 24 | CIM Magazine | Vol. 8, No. 5
CMA, has developed an official green mining program to help clean up the industry. Since 2009, when the program was first rolled out, 462 Chinese mines have been certified “green,” including over 150 non-ferrous operations, according to Hatch senior advisor Chris Twigge-Molecey. The benefits of getting certified include access to land and lower interest rates on loans. The upshot is that miners are becoming increasingly interested in technology solutions that may not be available locally. “There are a huge range of opportunities for Canadian suppliers of equipment and services,” TwiggeMolecey added. “The needs are enormous, from exploration through mining, processing, clean-up and longterm remediation.” “They recognize that Canada has expertise in terms of green mining,” noted Daignault-Simard. “They recognize the environmental challenges in the mining sector, and they want to try to address those in China. So they’re trying to see what is available and what kind of technologies they could use to address the environmental challenges.” Cypher Environmental is one company hoping to take advantage. The Winnipeg-based firm presented at the Toronto workshop after developing some interest from a major Chinese distributor at MINExpo in Las Vegas last September. Later this year, the company will be demonstrating its Dust Stop product in China and training representatives from the product’s local supplier, said Cypher president Todd Burns. “The market over there is huge, and it’s perfectly suited for our product,” Burns said. Dust Stop is an environmentally-friendly binding agent sprayed on unpaved roads to keep dust down. The impact of breaking into China will be undeniable for Cypher. “We’re looking at a very significant increase in
the percentage of our global exports by entering the market there,” Burns added. “I would say anywhere from 10 to 20 per cent.” The March workshop at PDAC, cochaired by the director general of CanmetMINING, Magdi Habib, and Chen Xianda, secretary general of the China Mining Association, was viewed as a positive first step for connecting Chinese miners with Canadian suppliers. “We definitely felt there was interest from the delegates,” said DaignaultSimard. “[Chen] expressed a lot of support. He was quite pleased with the workshop and the technologies that were presented. “We [also] had a visit in China after the workshop,” he added, “and the China Nonferrous Industry Association (CNIA) indicated interest in having some sort of collaborative agreement with us.” Already, there is appetite from the Chinese side to organize similar events. Plans are underway to hold a bigger session, with more suppliers, miners, and other stakeholders, at either China Mining, a large conference in Tianjin near Beijing in November, or possibly at PDAC again next March. Besides Cypher’s Dust Stop product, the Chinese have expressed interest in Canadian hybrid-diesel underground vehicles, ventilation-on-demand technologies and explosives-free rockbreaking products, according to Twigge-Molecey, who along with Habib visited the Fankou lead/zinc mine, a certified green mine, in China this spring. Cypher’s Burns sees an opportunity for other Canadian suppliers to penetrate the Chinese market. “Especially with the support of NRCan,” he said, “there’s a real push to collaborate and help introduce technologies that have been used here to benefit Canadian mines. We’re offering them solutions that really are in high demand at the moment.” CIM
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Seeing the light Industry and civil society agree Canadian transparency regulations moving in the right direction
Prime Minister Stephen Harper announced in June his government’s plan to implement new transparency regulations that will require mining and oil and gas companies to disclose payments they make to foreign governments. This includes all taxes, bonuses, licence fees, royalty payments, dividends and infrastructure payments made on international projects, which is a sharp change from current voluntary reporting requirements. While Harper’s statement, made prior to a G8 summit focused on transparency, was broad and vague about process, it marked a turning point in the government’s stance on the issue. The mining sector and civil society organizations, working together as the Resource Revenue Transparency Working Group, released draft recommendations for mandatory reporting requirements on the heels of Harper’s announcement. Launched in September 2012, the group had been working on the recommendations for nine months, and had been in discussions with the federal government leading up to the announcement. The group’s hope is that the final set of transparency regulations will reduce corruption and ensure local governments benefit from resource extraction, while showcasing the positive contributions mining companies make to the countries in which they operate. The regulations are geared toward keeping governments with mining projects and prospects in their nations honest, said Ross Gallinger, executive director for the Prospectors and Developers Association of Canada, which, along with the Mining Association of Canada, is a member of the working group. “It’s about host governments building an [argument] to show what they’re doing with those revenues and for communities to show what portion is flowing back into the communities as well,” he added.
Courtesy of PMO – Jason Ransom
by Andrew Livingstone
Prime Minister Stephen Harper has committed to establishing mandatory reporting requirements for payments made by extractive companies to foreign governments. The move was applauded by both industry and civil society groups.
For a number of burgeoning mining nations, like Mongolia and Papua New Guinea, “mining is a big part of their transformational growth,” said Andrew Bauer from Revenue Watch, a member organization in the working group. “In most cases, they haven’t reached their potential because these monies don’t go into schools and hospitals and roads, they just end up disappearing and being mismanaged. It’s key that these rules are in place so citizens can hold their governments to account for this money.” The regulations need to be in place to improve transparency, but the reporting thresholds also need to be fair and scaled, said Gallinger. The working group has recommended reporting requirements kick in once payments reach $100,000 for larger companies and $10,000 for smaller junior companies. “This acknowledges that we have a lot of small junior exploration companies that aren’t making large payments but are making payments that can be material to communities,” he said, pointing to a company that may build a road and improve local transportation networks. Improved transparency also levels the playing field for countries, noted Jamie Kneen, spokesperson for Mining Watch Canada, and “could make players more honest.” The rules would open
up companies, so governments thinking about doing business with a mining company would be able to look at its track record on how compliant it is with paying taxes and contributing to host nations through infrastructure improvements and benefit payments. Establishing a global standard with the Europeans and the Americans could “eliminate the bad actors and really forces them to comply,” said Kneen. It is also about project-by-project disclosure, added Kady Seguin, spokesperson for Publish What You Pay Canada. For companies with multiple projects in one country, it will be crucial that “they show specifics to each project so they know what kinds of payments are being made.” Otherwise, it would be easy for payments to get lumped together and the actual effect and use of the funds would be lost. However, Seguin said the regulations still would not uncover “illegal payments some companies might make to get what they want.” While Seguin is pleased with Harper’s announcement, she said it will take months – and perhaps as long as two years – for Canada to get ready to implement any new rules. In the United States and the European Union, national governments manage securities. However, each of Canada’s 13 provinces and territories manages its own securities commission, “and that’s where the challenge of implementation comes in,” she said. “In order to create a reporting standard that is harmonized with all the jurisdictions, and without reinventing the wheel, there needs to be more discussions with the provinces to make it work.” While a national securities disclosure standard is what the working group is pushing for, it is not necessarily the direction the regulations will take. But with the group’s constant communication with the federal government in the months leading up to the announcement, Seguin said the lawmakers are listening. CIM August 2013 | 25
M A C E C O N O M I C C O M M E N TA R Y
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Countries, companies, citizens benefit from greater transparency BY BRENDAN MARSHALL
esource extraction is a powerful ally of international development if done responsibly. Tremendous potential exists for the sector to assist many of the world’s resourcerich but poor countries in elevating their living standards. For this to occur, however, a number of conditions need to be met. Transparency through financial disclosure, when implemented properly, enhances responsible resource development and helps address a key challenge impacting the broad social acceptance that underpins many companies’ privilege to operate. But this privilege can be compromised when the consequences of mismanaged resource revenues create an atmosphere of distrust among project stakeholders and, in some instances, escalate into events that disrupt operations or delay project development. Part of the privilege to operate lies in the project-generated benefits the host communities receive by virtue of development and continued operation. By creating jobs and business opportunities, developing infrastructure, providing skills training and building capacity, resource development can meaningfully reduce poverty through direct and indirect social and economic impacts. In many instances, governments accrue significant benefits through the collection of mining taxes and royalties. These revenues have the potential to be transformed into valuable public investments such as health and education services and infrastructure. Such investments would reinforce a company’s privilege to operate while also addressing local challenges through investment. Barriers remain, however, that prevent the potential benefit from such investments in the public interest from being realized. Some developing countries have weak civil society institutions. Poor governance and mismanagement have, at times, meant that the expenditure of extractive sector revenues have not always enhanced the public good as one might expect. In some cases, revenues collected by public officials have not made their way into government coffers. Secrecy around flows of funds from the extractive sector has also contributed to mistrust between local citizens, their governments, and companies, at times leading to outright conflict. These challenges are systemic and, lying within the host country’s jurisdiction, have historically been beyond the purview of any single company to address independently. Acknowledging this, organizations such as the Extractive Industries Transparency Initiative, Publish What You Pay (PWYP) and the Revenue Watch Institute (RWI) have promoted their vision for the transparent and accountable management of natural resources and the revenues generated there from. Efforts have sought to equip communities with the information necessary to hold governments accountable for the expenditure of extractive sector revenues. This entails developing
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credible frameworks for the public disclosure of company payments to governments, and government reporting of payments received. By developing an accountability framework, the theory holds that resource revenues will be more likely to benefit the citizens and rightful proprietors of the resources. As these frameworks become mainstream, investors managing significant portfolios that are key to the development of resource projects have been more vocal about their desire for strong disclosure rules. Both the ethical dimension of goodconscience investing and the desire to avoid risk associated with projects operating under volatile regimes have come to the fore. Many countries and companies are now participating in these frameworks, and individual countries, like the U.S., have implemented their own rules independently. This momentum has raised the profile of transparency over the last decade, culminating with the G8 adopting it as the theme for recent meetings held in June. Immediately prior, Canada announced its intention to implement a transparency framework for company payments to foreign governments, with consultations beginning later this year. Given that roughly 60 per cent of the world’s mining companies are registered in Canada, and more than 800 Canadian exploration companies are active in 100 countries, Canada’s commitment to this initiative is significant. Canadian stock exchanges, the Toronto Stock Exchange and TSX Venture in particular, host the lion’s share of the total global value of mining sector market capitalization, and mining equity capital raised. In July 2012, the Mining Association of Canada, the Prospectors and Developers Association of Canada, PWYP and RWI signed a memorandum of understanding to develop a Canadian framework for mining and oil and gas companies to disclose payments made to governments. The working group recently completed the draft framework and has made it publicly available for comment. The aim is to make informed policy recommendations to federal government policymakers and/or provincial security regulators for the Canadian adoption of mandatory disclosure requirements based on the framework. CIM View the document at: http://www.mining.ca/www/media_lib/Press _Release/2013/RRTWGDraftforConsultationJune2013.pdf
Brendan Marshall is director of economic affairs at MAC. He works to advance the mining industry’s interests and understanding of key economic issues such as taxation, transportation, innovation, international trade and investment and energy and climate change.
JURISDICTIONS
Will Pascua-Lama fines have a chilling effect on mining in Chile? ´ AND PATRICIO LEYTON BY IVAN GRBEŠIC
hen Barrick Gold Corporation was fined $16.4 million in May by Chile’s Superintendent of the Environment (SMA) for nearly two dozen violations of its environmental impact agreement, many in the mining industry were surprised. Not only was the fine levied against the world’s largest gold miner, but the amount levied set a record for Chile. SMA also passed a resolution requiring Barrick to complete Pascua-Lama’s water management system in accordance with the project’s environmental permit before resuming construction activities. Barrick ultimately paid $11.6 million under a provision that grants a 25 per cent discount if the fine is paid within five working days.
to implement an improved environmental compliance assurance system. The Chilean government approved significant reforms to the legislation five years later by creating a Ministry of Environment, an environmental assessment agency, environmental courts and a compliance agency – the SMA. The maximum fine per infraction rose from US$20,000 to almost US$9 million. SMA became operational in December 2012, significantly enhancing environmental enforcement in the country. The Pascua-Lama fine is the first under this new system, so it has wider implications because it does set a precedent and a base standard. However, the fine is very much specific to Barrick and its failure to comply with its environmental commitments. Indeed, rather than contesting the fine, “This is neither a situation of heavy-handed Barrick recognized 22 of the 23 charges and promptly paid the reduced fine or arbitrary regulatory action nor, available in Chile for quick payment. as is increasingly common, fallout from This is neither a situation of heavythe enactment of new adverse legislation – handed or arbitrary regulatory action nor, as is increasingly common, fallout resource-nationalism-rooted or not. from the enactment of new adverse legRather, it is the rule of law in action islation – resource-nationalism-rooted and an industry giant being held accountable or not. Rather, it is the rule of law in action and an industry giant being held for failure to abide by its legal commitments.” accountable for failure to abide by its legal commitments. The lasting impact of the Pascua-Lama This kind of decision has the potential to scare away foreign fine will be subject to debate. For domestic or foreign investment, particularly in a sector that is already under stress investors, the message from the newly empowered SMA is that from declining gold prices. The decision and fine will initially Chile will take environmental enforcement seriously, and will make foreign investors nervous about their ability to develop not shy away from seeking compliance from the largest global and operate in Chile – traditionally considered one of the best companies. However, will this enforcement deter foreign minjurisdictions for mining in the world. But while that initial ing companies from seeing Chile as a preferred destination for reaction is understandable, a deeper review of the issue sug- mining investment? Probably not. gests that any broad industry concern is overdone. It is also important to note that Chile’s environmental law The fine applied to Pascua-Lama must be taken in con- considers the financial resources of the entity committing the text. The environmental legislation in Chile is fairly young; infraction – fines should be proportionate to the nature of the the government only enacted the Environmental Frame- infraction. In this case, the fine was high because the infracwork Law in 1994. The Environmental Impact Assessment tions were significant and numerous, and the investment in System (EIAS) began operating in 1997, following the pres- the project is close to US$9 billion. Investors should not view ident’s approval of its regulations. This system has been the Pascua-Lama fine as a precedent for multi-million-dollar praised because it significantly raised the environmental fines for small infractions. standards required of new mining projects in Chile. SMA ’ s Nevertheless, SMA has sent a clear message to the industry fine against Barrick was in respect of breaches of Pascua- that environmental enforcement in Chile is coming of age. CIM Lama’s environmental permit that had been received following the EIAS process. Ivan Grbeši´ c is a partner in Stikeman Elliott’s Toronto office practising and securities law, with emphasis on corporate finance transactions, When Chile was a contender to join the Organization for corporate mergers and acquisitions, and corporate reorganizations. Patricio Leyton is a Economic Co-operation and Development in 2005, it sought partner of FerradaNehme, based in Santiago, Chile.
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EYE ON BUSINESS
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Quebec’s new Mining Act would increase uncertainty and costs BY CHARLES KAZAZ
n late May, the Government of Quebec unveiled its longexpected new Mining Act (Bill 43), hot on the heels of recently announced changes to its mine royalty regime. This is Quebec’s third attempt in four years to revamp its mining legislation. The two previous efforts (in December 2009 and May 2011) were met with strong opposition from municipal, environmental and mineral development stakeholders. This new bill seeks to maintain the current mineral tenure system, including the rights and obligations of mining rights holders. But, with that said, it proposes a number of technical changes that threaten to drive up costs and undermine confidence of miners expecting their long-term investments to be rewarded.
The proposed legislation also calls for all mineral processing plant construction and operation projects, as well as mine development projects, to be subject to an environmental impact assessment (EIA) regardless of the nature of the product or of the project’s production capacity. In addition, a lease cannot be issued until a mine closure plan has been approved and environmental approvals have been issued. It is intended that the mine rehabilitation plan be publicly available as part of the EIA review process. The purpose is to ensure that environmental approvals to operate the mine will be issued before a lease is granted. Earlier this year, the natural resources ministry proposed to amend its regulations to increase financial assurance requirements for mine closure. The bill proposes incorporating these changes into “Given the desire for predictability when developing the legislation. Financial guarantees must and operating a mining project, some of the cover 100 per cent of the closure cost of entire mine site rather than the curproposed changes will need to be clarified and the rent 70 per cent of the closure cost for perhaps pared back.” accumulation areas. Also, the guarantee must be paid in the first three years of For example, the bill would require companies to conduct mining operations rather than the current regime’s requirea feasibility study on the processing of ore in Quebec, when ments, which allows the assurance to be paid in instalments applying for a lease and at the time of each renewal. Based on based on the life of mine. These proposed measures are in line the feasibility study, the ministry may call for an agreement to with financial assurance requirements in other Canadian jurismaximize economic spinoffs in Quebec. In addition, a moni- dictions. Previous attempts to amend the Mining Act were delayed toring and maximization committee that includes regional government representatives will monitor the work performed because of opposition from exploration companies to the to maximize jobs, contracts and other economic benefits for demands of local municipalities to have a greater say in landlocal communities. Failure to comply with an agreement can use decisions that involve mineral development. The proposed constitute grounds for the revocation of a mining lease. In con- bill will allow regional county municipalities (RCMs) to desigtrast, Ontario requires that ores be treated and refined in nate lands on their territory as incompatible with mining and Canada, unless an exemption is obtained. on which prospecting, exploration and operations cannot be Quebec’s proposal raises concerns about the scope of the carried out. The powers given to RCMs will affect the security feasibility study. There is no indication as to the extent of of tenure and create a degree of uncertainty for mining rights downstream processing that must be considered as part of a holders. In response to this concern, the bill provides that local study. Also, the requirement for a feasibility study at the time land-use designations be subject to review by the ministry. of renewal creates uncertainty for operating mines, as this may Public consultations on the bill are scheduled for late allow the refusal of a lease renewal after significant capital August and early September. Stakeholders and opposition investment has been made in mine development. parties have not shown strong support for the bill, and amendThe bill also grants the minister broad powers to refuse or ments will likely be proposed. Given the desire for predictabilterminate mining leases for reasons of public interest. Where ity when developing and operating a mining project, some of the lease is terminated, the minister must grant a lessee a lease the proposed changes will need to be clarified and perhaps on another parcel of land that would presumably have similar pared back. With the current minority government in Quebec, value, failing which the minister will be required to compen- support of at least one major opposition party will be required, sate the lessee for the loss suffered. Since the notion of “public making it difficult to predict if and when the bill will pass. CIM interest” remains undefined, these powers will affect the security of tenure that a title holder seeks when developing and Charles Kazaz is a partner at Blake, Cassels and Graydon LLP and specializes operating a mine. in mining and environmental law.
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UN ŒIL SUR LES ACTIVITÉS
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Nouvelle loi sur les mines du Québec – plus d’incertitude ? PAR CHARLES KAZAZ
la fin du mois de mai, le gouvernement du Québec a dévoilé sa nouvelle loi sur les mines (projet de loi n° 43) tant attendue, qui suit de très près les modifications annoncées récemment à son régime des redevances minières. Il s’agit de la troisième tentative du Québec en quatre ans de reformer sa loi sur les mines. Les deux précédents efforts (en décembre 2009 et en mai 2011) avaient suscité une vive opposition des intervenants municipaux et des acteurs du secteur de l’environnement et de la mise en valeur des ressources minérales. Cette nouvelle loi cherche à maintenir le système actuel de titres miniers, dont les droits et obligations des détenteurs de droits miniers. Toutefois, elle propose un certain nombre de changements techniques qui menacent d’augmenter les coûts et d’ébranler la confiance des mineurs quant à la perspective d’une récompense qu’ils sont en droit d’attendre pour un investissement à long terme. Le projet de loi prévoit par exemple d’imposer aux sociétés de mener une étude de faisabilité de la transformation du minerai au Québec au moment du dépôt d’une demande de bail minier et à chaque renouvellement. Sur la base de cette étude de faisabilité, le ministère pourrait exiger la conclusion d’une entente afin d’optimiser les retombées économiques au Québec. En outre, un comité de suivi et de maximisation constitué de représentants du gouvernement régional suivra les travaux réalisés en vue d’optimiser les emplois, les contrats et les autres retombées économiques pour les communautés locales. Le non-respect d’un accord pourrait constituer un motif de révocation du bail minier. En revanche, l’Ontario exige que les minerais soient traités et raffinés au Canada, à moins qu’une dérogation ne soit obtenue. La proposition de Québec soulève des questions importantes quant à la portée de l’étude de faisabilité. On ne dispose d’aucune indication quant à l’étendue de la transformation en aval qui doit être prise en compte dans le cadre d’une étude. Par ailleurs, l’exigence d’une étude de faisabilité au moment du renouvellement engendre une certaine incertitude pour les mines en exploitation, car cela pourrait donner lieu au refus de renouvellement du bail après un investissement de capitaux important dans le développement minier. Le projet de loi accorde également de grands pouvoirs au ministre, qui pourra refuser une demande de bail minier ou encore y mettre fin pour un motif d’intérêt public. La résiliation du bail minier sera toutefois assujettie à l’octroi d’un bail sur une autre parcelle de terrain dont la valeur serait présumée identique, ou, à défaut, au versement d’une indemnité au locataire en réparation du préjudice subi. La notion d’« intérêt public » restant indéfinie, ces pouvoirs affecteront la sécurité d’occupation qu’un détenteur de titre exige lorsqu’il développe et exploite une mine.
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La loi proposée prévoit également que tous les projets d’exploitation et de construction d’usines de transformation des minerais, ainsi que tous les projets d’exploitation du développement minier, soient soumis à une évaluation de leur incidence sur l’environnement (EIE), indépendamment de la nature du produit ou de la capacité de production du projet. En outre, un bail ne pourra être délivré à moins qu’un projet de fermeture de la mine ait été approuvé et que les approbations du point de vue de l’environnement aient été accordées. Le plan de réhabilitation de la mine devra être mis à disposition du public dans le cadre du processus d’évaluation EIE, et ce afin d’assurer que les approbations du point de vue de l’environnement concernant l’exploitation de la mine sont accordées avant de conclure un bail. En début d’année, le ministère des ressources naturelles a proposé de modifier ses réglementations afin de renforcer les modalités de garantie financière pour la fermeture d’une mine. Le projet de loi propose d’intégrer ces modifications à la loi. Les garanties financières doivent couvrir la totalité (100 %) des coûts de fermeture de l’intégralité du site minier, et non plus 70 % du coût de la fermeture des aires d’accumulation comme c’est le cas actuellement. En outre, la garantie doit être réglée dans les trois premières années de l’exploitation minière et non pas tel que le stipulent les exigences du régime actuel, qui permettent de régler cette garantie en versements sur la base de la vie d’une mine. Ces mesures proposées sont conformes aux exigences de garantie financière en application dans les autres juridictions canadiennes. Les tentatives précédentes de réformer la loi sur les mines ont été retardées en raison de l’opposition de certaines sociétés d’exploration face aux revendications des municipalités pour exercer une plus grande influence dans les décisions sur l’occupation des sols impliquant la mise en valeur des minéraux. La proposition de projet de loi permettra aux municipalités régionales de comté (MRC) de délimiter sur leurs terres tout territoire incompatible avec l’activité minière sur lequel la prospection, l’exploration et l’exploitation minière ne pourront avoir lieu. Les pouvoirs accordés aux MRC affecteront la sécurité d’occupation et feront peser une certaine incertitude sur les détenteurs de droits miniers. En réponse à cette préoccupation, le projet de loi propose que la délimitation de l’occupation des sols fasse l’objet d’un réexamen par le ministère. Les consultations publiques sont prévues pour la fin du mois d’août et le début du mois de septembre. Étant donné le désir de prévisibilité lors du développement et de l’exploitation d’un projet minier, certains des changements proposés devront être clarifiés et éventuellement limités. ICM Charles Kazaz, partenaire de Blake, Cassels et Graydon LLP, est spécialisé en droit minier et environnemental.
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Seeing gender differently BY DEAN LAPLONGE
hen the term “gender” comes up, we are used to discussing women: women in the workplace, women in mining, equal pay for women, and discrimination against women. All these issues are important. That women still do not enjoy full equality in the workplace is unacceptable. But gender does not equal women. And, until we move beyond this obsession, we will never achieve gender diversity in the workplace.
report issued by the Canadian Centre for Policy Alternatives identified that, with current practices, Canada will close the gender equality gap between men and women by the year 2241. Do we really want to wait that long? People working in highly masculinized industries continue to have a higher risk of injury and depression. Bullying and harassment are commonplace. The long work hours, the isolation and the time spent away from families are often cited as reasons for this. But the pressure on employees to work like “real men” also plays a role. Yet all we seem to want to do is bring in “All we seem to want to do is bring in a few more a few more women, as if to suggest women, as if to suggest that women, whom we wrongly that women, whom we wrongly are all softer than men, will assume are all softer than men, will tame our assume tame our workplaces. workplaces.” To begin to address this problem, we need to move this topic out of human resources. This is a workplace-wide issue. Gender impacts on safety – what it means to Efforts to improve gender diversity in male-dominated be a “real man” in a workplace – can affect the risks a person industries like mining and construction are going nowhere. If will take to get the job done. It affects business planning, deciwe compare reports on women in mining today with those sions about production, budgeting and the wider workplace released almost 20 years ago, we find the same issues being culture. discussed. We uncover the same problems and we recommend Those who are responsible for workplace gender programs the same solutions. We continue to talk about numbers of must study more about the histories of gender, gender movewomen, insisting on the need for changes in recruitment practices, availability of more mentors and provision of awards for ments and the different ideas about gender that have emerged women who have “made it.” The discussion about gender in in a wide range of disciplines over the past few decades. They these industries, and others like them, is always and only need to be able to recognize that gender means more than about what to do with women. The methodologies used in the women in the workplace. They need to be able to explain and research see women as the problem and women as the solu- respond to gender as it permeates the organization. tion. The result is that we allow the men and the masculine We also need more people who have extensive knowledge structures of these industries to continue with business as about gender to be working at all levels in our industries – as board directors, managers, consultants and general employees. usual as if gender has nothing to do with them. But the term “gender” has long been understood as some- It is extremely rare to find experts on gender working in malething far more complicated and diverse than the masculine- dominated industries. We should be asking why. Gender has played an important part in determining how feminine binary will allow. Gender is cultural – the culture we live in expects us to practise and play out our genders in cer- industries like mining, oil and gas, and construction have tain ways. We can say that we do gender, but it is definitely not developed. In all these industries, assumptions about gender something we are. Gender is also structural – it is embedded have affected production processes, leadership and managein our organizations and institutions and affects the way they ment styles, safety, workplace cultures and the design of work run. A critical aspect of freedom for women was always to sites. If we fail to consider gender as something more than argue that women (and men) could do gender differently. We women, we fail to scrutinize and respond to all this. And we now live in a world where many people have discovered very fail to find ways to develop real gender diversity that can benefit many more women and many of our men. CIM different ways of doing gender. These ideas should be impacting the way we respond to Dean Laplonge, PhD, is a leading researcher and consultant in the field of gender in male-dominated industries. But they are not. gender, safety and communications. He is the director of Factive Industries like mining are engaging in a debate about gen- (www.factive.ca), a cultural research consultancy that works with resource in Canada and Australia to address cultural issues in the industry. der in a cocoon. And the results are devastating, not only for companies His book, So, you think you’re tough: getting serious about gender in mining, is women, but also for these industries as a whole. A recent due out later this year.
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Primed for B.C.’s future Aboriginal training program aims to fill mining industry skills gap
Courtesy of BC AMTA
by Vivian Danielson
needed in the B.C. mining industry over the next 10 years, as aging workers retire. That translates to between 1,500 and 2,000 new hires per year. The BC AMTA model – conceived in partnership with industry, aboriginal groups, government and educators – was designed to fill skills gaps and match aboriginal candidates with industry needs, ideally at a local level. Regardless of which job a trainee eventually aims for, BC AMTA provides basic life skills training and supportive coaches who help trainees overcome barriers to success. In many cases, these barriers include an incomplete education, or a lack of transportation or child-care support. The candidates are then assessed to determine their skills, aptitudes and career goals. “We work with individuals to find BC AMTA candidates participate in an environmental monitoring program near Smithers, BC. something that interests them and also test to find what jobs and training suit ince late 2009, the British Columbia Aboriginal Mine them best,” says BC AMTA CEO Laurie Sterritt. While programs are demand-driven, Sterritt says the Training Association (BC AMTA) has helped more than 560 aboriginal candidates find employment and regis- choice of career options is broad, “from site security and tered more than1,600 for training and job opportuni- environmental monitoring to heavy trades and [heavy] ties in B.C.’s mining and minerals sector. But so far at least, equipment operators.” most of the new hires are working at operating mines in B.C.’s central interior, where the BC AMTA partnership model Coaches play critical roles in Kamloops The largest group of new hires to date is from the Kamloops achieved initial success. The non-profit association has since launched initiatives to expand into remote and sparsely popu- office, where BC AMTA first set up shop. Sterritt said this reflects the fact that anchor-funding commitments came from lated regions where many proposed new mines are situated. major and mid-tier producers with producing mines in the Program finds a way in region including New Gold and Teck Resources. Some candiSome efforts are modest, such as software donations to help dates were hired by Teck’s Highland Valley Copper, one of the candidates from isolated communities develop basic technol- world’s largest open-pit mines, while others found jobs at New ogy skills. Others are broad-based and long-term in scope, Gold’s New Afton copper-gold mine, recently developed as a including a five-year funding agreement with Northern Devel- block-caving operation beneath the site of a past-producing opment Initiative Trust, a regional economic development cor- open pit. poration focused on stimulating growth and job creation in Korah DeWalt, a member of the Tk’emlups te Secwepemc central and northern B.C. signed up as a BC AMTA candidate in 2010, and was hired by Janine North, CEO of the trust, says the agreement is a New Gold as a summer student soon after. “BC AMTA pro“good fit” for her organization, as these regions are resource- vided me with coaching and financial support,” DeWalt says. rich and have large aboriginal populations. “We were aware of “The support from the coach is the most important thing. The the traction BC AMTA was getting with job placement in the belief that someone believes in you is really motivating.” south and saw the momentum shifting further north.” DeWalt completed a bachelor’s degree in business in June A report from the Mining Industry Human Resources 2011 and is presently employed by New Gold as a human Council predicts that at least 13,000 new employees will be resources and community relations generalist. “One of the
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great things about my role in community relations and human resources is seeing other people successfully complete the program,� DeWalt says. New Gold has a 23 per cent aboriginal employment rate at New Afton and aims to meet or beat this at its advanced Blackwater gold project near Vanderhoof, in central B.C. Earlier this year, the company and BC AMTA were presented the inaugural BC Mining HR Diversity Award by the Mining Association of British Columbia.
Moving into less familiar territory
partners including BC Hydro and Walter Energy joined Teck and other companies to help cover the costs for 20 local aboriginal candidates to take the association’s Environmental Technician Certificate program in Chetwynd. “Environmental training programs are always very popular and fully subscribed,� Sterritt says. “Combining traditional knowledge of the land and water with industry-approved technical training provides a benefit both to the communities and the companies.� Through band offices, the Internet and word of mouth, BC AMTA is starting to attract candidates from remote and isolated communities. “Our coaches pull out the stops to bust down barriers in these regions,� Sterritt says. “We bring training to remote communities or we assist candidates to travel to urban areas for training.�
BC AMTA has also garnered attention for its 93 per cent retention rate for hired employees, a remarkable achievement considering that two thirds of the candidates transitioned from unemployment. But maintaining this rate in remote and northern regions could be a challenge, given weak capital markets for exploration and development companies and competition for skilled workers from neighbouring Alberta. Spreading the word “It is more difficult to find people for the exploration BC AMTA is preparing to release a report documenting side,� Sterritt said. “But people find they are able to transfer results of its initiatives to date. Sterritt says the program has their skills to other jobs through networks and relationship proven itself a strong business case, with costs averaging they’ve built.� $15,000 per candidate leading to average salaries of $53,000 BC AMTA is now tapping into a larger pool of potential can- per year for hired employees. didates since opening up offices in Cranbrook, Merritt, New The Internet has helped BC AMTA share the success stories Aiyansh (a Nisga’a community in northwestern B.C.) and of its graduates. At BCAMTA.ca, the organization promotes the Williams Lake. Candidates from 150 bands are currently rep- personal, community and societal benefits that no financial resented, of which 122 are B.C.-based, with other candidates accounting can capture. Publishing graduate testimonies has travelling to B.C. for training. Sterritt says there is a lot of inter- also led to many word-of-mouth referrals, Sterritt notes. est from women, citing female participation well above the “We’re proud of that. It shows our program is making a differindustry norm at 37 per cent. ence in people’s lives.� Earlier this year, the Williams Lake office celebrated its first BC AMTA has steadily increased the number of industry graduating class, with 37 candidates from four local First partners, but Sterritt says more are needed: “We’d love to see Nations communities receiving certificates for successfully more companies do business with First Nations through a new completing the Mining Skills for an Entry-Level Workforce and respectful approach.� CIM program. More than 20 went on to BC AMTA’s Heavy Equipment Operators (HEO) program, with women comprising one fifth of total enrolment. Job offers came in for some before the HEO candidates graduated. Candidates also filled positions that '&%$#"%! %& $#"$ %& "" % " % ! " %$!% include environmental monitors, core &"% " $ ! % ! %" & " % "% % ! "% cutters, exploration field assistants and " % $ %& "" % " &% &$" %$# % ! " various entry-level posts.
% % ! %& "" % " % "& &% " $% %&$! Sharon McLeod, BC AMTA’s northeast
% ! &$! % " %! " &%&# " % % %$!% % "" & regional manager, says the flexibility of
% " " %&" "% " the organization’s model allows programs % ! %& $#"$ %& "" % to be delivered beyond regional offices, as " % ! " % !%$# $ in Anahim Lake in the Carrier/Chilcotin Region, where 105 Ulkatcho First Nations members signed up as candidates. “We are always looking for ways to meet a community’s need in a way that works for them,� she says.
BC AMTA is also expanding into northeastern B.C.’s coal fields. Twelve August 2013 | 33
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Make it official Universities push to keep community relations programs going
Courtesy of Synergy Global Consulting Inc.
by Bernard Simon
munities, especially indigenous people, in a way that benefits both the mining company and the community. Other topics include social impact assessments and codes of conduct. Case studies are a key component. The University of Queensland program, now in its sixth year, sprang from a growing awareness in Australia that many personnel dealing with community relations – from geologists to former school teachers and journalists – were illequipped either to negotiate with outside groups or to champion sound social responsibility policies within their own companies. Jeffery Davidson, professor of applied mineral economics and mining sustainability at Queen’s University, who helped University community relations programs can bring together students from a variety of companies and set up the University of Queensland probackgrounds. gram says, “Part of the challenge that community relations staff face is the way their s community relations (CR) emerges as a crucial part role and credibility is seen by their engineer-manager colof any mining operation’s success, universities world- leagues.” He cites the example of a past colleague at a remote wide are finding ways to build a set of internationally uranium mine in Australia, who was a former meat plant recognized qualifications to guide professionals in the inspector but had extensive connections with aboriginal field. Four respected universities in Australia, Canada, Chile communities in the Northern Territory and “wanted to do and South Africa now offer programs that seek to improve something good.” Davidson says such CR staffers are often the skills of mining (and other resource) professionals in the viewed as “fire fighters,” sent in to deal with difficult situaoften-sensitive dealings with local communities and politi- tions, but without science, discipline or credentials. cians as well as human-rights, environmental and other More programs are rolling out advocacy groups. The success of the Australian program has helped spawn These programs “have helped to reinforce the view that community relations is a profession that requires specialist post-graduate programs at Queen’s University in Kingston, skills,” says David Brereton, founding director of the Univer- Ontario, and the Catholic University in Santiago, Chile, sity of Queensland’s Centre for Social Responsibility in Min- which both launched last year. There has been collaboration ing (CSRM), the pioneer in formalized corporate social between these programs, through staff exchanges and sharing of resources. More recently in May, Wits University in responsibility education for the industry. “It’s not just anybody that’s ‘good with people,’ which is Johannesburg began offering in May a short community how the industry thought about it when we first started,” relations certificate program, comprising four one-week modules. The Wits program is designed and delivered by Brereton adds. A series of upheavals in mining communities around the U.K.-based Synergy Global Consulting and the university’s world – from last year’s killings at Lonmin’s Marikana mine Centre for Sustainability in Mining and Industry (CSMI). The road to developing these programs and gaining in South Africa, to protests against the Pascua-Lama project in Chile, and the proposed Pebble gold and copper mine in acceptance for them has been a long and at times bumpy southwest Alaska – have underlined the need for community one. Queen’s is looking at ways of tweaking its graduate certifirelations expertise. The university curriculums typically have a heavy empha- cate in community relations to boost enrolment and industry sis on techniques for building relationships with local com- interest. Though enrolment targets were met in 2012, this
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year has proven more difficult, as professional development budgets in community relations have been slashed. Davidson regrets this approach. He says community relationships for the industry are “increasingly conflictive,” and adds they “are not going away, even if the economy falters.” Enrolments have not been an issue in Australia, Chile and South Africa. Whereas the University of Queensland program was designed for and attracted mainly community relations field practitioners, at Queen’s the first intake of students included a mix of head office staff, consultants, government employees and non-governmental organization (NGO) people. This meant adapting the curriculum, assignments and even the online discussions to reflect the student body. The Wits program is focused on community relations practice in an African context, and this has been reflected in the makeup of the participants taking the first course.
Universities can complement in-house training Companies have typically provided their own CR training to employees via short courses from outside consultants. According to Brereton, in-house courses have their place, but there is a lot to be gained from peer-to-peer learning across companies. “One of the reasons people really like the CSRM program is that we bring together people from different companies and they share experiences,” he says. “They actually discover that their experiences are often remarkably similar.” He adds that CR skills apply not only to relations with outside groups but also within a company: “You have to be bringing the rest of the organization along. You have to know how to argue the business case for what you’re doing – how to get human resources and local procurement and so on to change their practices.” Ed O’Keefe, a Synergy director closely involved in designing the Wits program, says: “We could have developed a kind of Synergy course. But it was very important for us to do it in partnership with an academic institution so that it had that cachet of being a university course.” Much can also be gained by bringing together students with different backgrounds for either a diploma or certificate program that stretches beyond the usual two- or threeday in-house course. The 30 participants at Wits’s first program included community relations practitioners for oil, gas and mining companies, and also consultants, an official from Kenya’s Human Rights Commission and two representatives of South African traditional authorities. Chilean government mining officials have enrolled in the program at the Catholic University of Chile in Santiago for the first time this year. There is widespread agreement that the success of community relations education hinges on industry involvement and a curriculum focused on day-to-day practice.
Industry cash the key to sustainable future The Minerals Council of Australia – whose 50 members include such industry giants as BHP Billiton and Rio Tinto –
has played a pivotal role in the start-up of the CSRM program, including a guarantee to make up any financial losses for the first five years. Similarly, the Chilean program has benefited from the sponsorship of seven of the biggest companies operating in the country including Anglo American, Antofagasta Minerals, Barrick Gold and Codelco. “To be honest, [finding the support] wasn’t hard, since they were already aware of the need,” says Ignacio Irarrazaval, who heads the program at the Catholic University of Chile. While Synergy and CSMI are bearing the risk of losses from running the courses at Wits, Anglo American, AngloGold Ashanti and Xstrata have funded the development of the program, despite the turmoil enveloping the South African mining sector. O’Keefe says this “is a testament to the interest companies have in these issues.” When Davidson was setting up the Queen’s program, however, the Mining Association of Canada forewarned him that its mandate and resources were not as comprehensive as those from the Minerals Council of Australia. The same kind or degree of support provided by MCA to the University of Queensland during the planning, start-up and operating phases of its program was not available here in Canada. Davidson acknowledges that the Queen’s program may be a “higher risk venture,” and he adds that “this year, enrolments have not been as robust as we would have hoped for, but the university’s commitment to running the program remains firm.” To try to boost interest, Queen’s is changing things this year, offering its residential week, to be held August 26 to 30, as both a less time-intensive professional development seminar, and as a point of entry into the full graduate certificate program. Students enrolling for just the five days can opt to convert later to the full graduate program if they choose. Davidson hopes that participation in a shorter program – similar to the Wits modules – may be more appealing to companies in Canada. CIM
ACHIEVEMENT Twigge-Molecey inducted into Canadian Academy of Engineering Chris Twigge-Molecey, senior advisor at Hatch and pastpresident of CIM, was inducted as a fellow into the Canadian Academy of Engineering (CAE) for his leadership in developing international groups that are introducing principles of sustainability, environmental engineering and assessment for the mining and metallurgical sectors, and for his support of university research, innovation and green mining. The ceremony was held in Montreal in June, in conjunction with the academy’s 2013 annual general meeting and symposium. In total, 47 fellows were inducted.
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Three days can make a career Field trip designed by and for geophysics students connects them with jobs
Daniel Loas
by Alexandra Lopez-Pacheco
and industry as well as introduce them to industry professionals so they could network and begin to build relationships that could hopefully lead to a job one day,” says Loas. With the support of the CSEG Foundation, the Geophysical Industry Field Trip (GIFT) was born. In its first year, in 2009, the field trip was a small, one-day event with just a few Calgary students. Within a few years, it had grown more intensive, covering every aspect of geophysics on the ground. Major industry leaders such as Canadian Natural Resources, Osum, Petrobakken, Talisman, Imperial Oil, Bonavista and Jason a CGG Company Students learn from award-winning author, geologist and Rocky Mountains expert Ben Gadd during a hike near Canmore. have joined in as industry sponsors and, in some cases, as venue hosts that prepare presentations for participants. here was a time when a university degree in a special“You’re able to see from the field where they are gathering ized field such as geophysics was a bridge that helped the data to the final product where they say this is a good young graduates cross over from the world of acadeprospect for drilling,” says Loas, who took the trip last year mia and secure a job in the industry. Today’s reality, and was the chair of its planning committee this year. “You however, is that geophysics graduates can step out of univerget to see the big picture.” sity with a degree in hand and still plunge into an unemployment abyss between the two worlds. “There’s the cycle where the graduates don’t have a job 2013: GIFT gets bigger because they don’t have experience, but they don’t have When Loas was handed the baton to organize the 2013 experience because they don’t have a job,” says Daniel Loas, field trip, he was determined to work with his teammates to a University of Calgary fourth-year geophysics student. build it bigger and stronger. “I think I can contribute someIt is especially tough for Loas and his geophysics peers to thing nice to GIFT and make it better,” he said in the leadup get that first-hand industry experience. Geology students “will to the trip, which occurred June 6 to 8. “The committee and often do summer jobs in field work or they’ll do field schools I have put a lot of hours into it because there are so many and look at rocks and things,” explains Tiffany Piercey from people coming that we know and I wouldn’t want to disapCold Lake Geoscience at Imperial Oil Resources, “but for geo- point them. I want them to learn as much as I learned last physical students, because it involves a lot of high-tech equip- year, so I’d like to share the same opportunities and same ment, the exposure they get can be limited.” knowledge. The better GIFT becomes, the better for future So with this in mind, five years ago, a handful of Univer- students.” sity of Calgary geophysics students, who were also Canadian The biggest change for 2013 was that the field trip was Society of Exploration Geophysicists (CSEG) outreach volun- extended to three days that included technical presentations in teers, decided it was time to develop a way to get that expo- seismic survey design, acquisition, processing, and interpretasure. “They wanted a field trip that would expand their tion, as well as a tour of the Canmore Museum and Geoscience technical knowledge and bridge the gap between academia Centre. The tour included a history of the museum and expla-
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nation of significant local geological features from the museum’s president, Rick Green, and a geology hike in Canmore was led by award-winning author, geologist and Rocky Mountains expert Ben Gadd. “He’s quite well known in the geological world and having him lead us on the hike was great,” says Meaghan Wright, who studies geophysics at the University of Calgary. “There were lots of opportunities for networking too. The first night, they had a sponsor event in the pub, so we were able to talk to people from the different companies that help fund this. It was a huge opportunity for all of us.” Loas and his fellow student organizers – with the support of Piercey and Stephen Kotkas as the CSEG Foundation and industry reps – reached out to more students than ever from across the country to attend GIFT. The field trip cost each student $150, and the CSEG Foundation also offered travel subsidies to out-of-province students. The trip provided an opportunity for students from other parts of Canada to experience Alberta’s oil and mining industries and the Rocky Mountains, and that was particularly rewarding for Loas and fellow participants from Calgary. It was also rewarding for the sponsors, particularly Imperial Oil, which was a venue host. “We actually look at GIFT as one of our main geophysical recruiting opportunities,” says Piercey. “This year especially, since we had a very broad reach of students from Canadian universities attend. And being a venue host was also a great opportunity for us to showcase Imperial and what we do and hopefully show the students that we are an employer of choice.” In all, GIFT hosted 42 participants, from B.C. to New Brunswick, and included not just undergrads but also students working on their doctorates. “There are lot of graduate students in geophysics who have a math or physics background and they come in to do very specific research in their graduate programs, so bringing them back to basics and showing them the progression of how the geophysical industry works – from planning to acquisition, to processing to interpretation – shows them the big picture,” Piercey says.
tations and built a 3D geological model. When we showed the students the model, they were quite in awe. We also brought them into our visualization room, which has a big panorama screen. Students can probably do interpreting in the schools, but in order to do the kind of high-end geological modelling [that] we do, you need really high-performing computers. We also have global experts on modelling who have worked on this project, so without their expertise and the high computing power we have, it would be impossible for the students to see something like this.” At Jason, one of the four corporate venues, students were given an interactive presentation of technology used to accurately tie wells and seismic information – an important step in reservoir characterization. “They showed us some seismic and said ‘We’d like you to pick the horizon and interpret it for us’ and ‘do you see something that stands out?’” says Wright. “I really liked that. They explained a theory, and then let us try it.” While Dennis Ellison, a geophysicist who attended GIFT last year before graduating from the University of Calgary, does not credit GIFT directly with helping him land a job at Calgary-based Thrust Belt Imaging, he says it gave him a better idea of how the industry works. “It definitely gave me the experience and built on the knowledge I had,” he says. “I also met some new people there and reinforced relationships I’d already made.” CIM
From classroom to world-class high tech Piercey helped plan Imperial’s presentations: “We wanted to show them something really interesting, so what we did was choose two different heavy oil assets: one that’s been producing for a long time and one in the exploration development phase. We split the group in two, and sent one group to see the exploratory work and all that goes into defining where the oil is and the work that goes into that, then the other group looked at how we do surveillance on an oil field that’s been producing for a long time. Then we swapped the groups.” Students were able to see world-class 3D seismic data technology at use. “We showed them a seismic cube, where you’re able to pick out different geological features really well,” she explained. “There’s such high definition, so they are able to see the slices and what the data looks like and how we scientists go about interpreting the data and what we see when we look at it. Then we took the data and interpre-
Britannia Mine Museum encourages public engagement around the contributions of mining and minerals to society.
www.BritanniaMineMuseum.ca
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Sustainable mining is gay-friendly Joshua Collins urges companies to put academic HR theories to the test
Meg Pukel
by Peter Braul
hough not a mining expert, Joshua Collins is doing his best to reshape the culture of the industry, which he describes as masculinized. As the managing editor of the journal New Horizons in Adult Education and Human Resource Development and an EdD candidate at Florida International University, he has an outside perspective on how HR in mining can and ought to change. With research published in many academic journals, some of Collins’ recent work focuses on the case of Lord John Browne, the former CEO of BP who resigned in 2007 once the fact he is gay was made public.
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CIM: What is a masculinized industry? Collins: I define a masculinized industry as one that sustains masculine norms based on a history of being male-dominated and obsessed with the notion of masculine authority. This sustainment is intentional on the part of a few in order to keep certain “types” of people out of work in these industries. Normally this includes women, and I would say it also includes gay men and lesbians. The basis for many of the HR issues in 38 | CIM Magazine | Vol. 8, No. 5
these industries stems from a history that favoured and even justified in policy the employment of only certain types of people: usually white men with overtly masculine work styles. CIM: How would you respond to those who would argue academic research is out of touch with the reality of the workplace? Collins: Hostility toward inclusiveness is in some ways understandable in these industries, where those in power are likely to believe the old adage about not fixing things that are not broken. This is short-sighted. Mining takes place in rural communities, many of which are getting smaller, meaning that employers have no choice but to begin to look at “different” types of workers if their intent is to keep production at a certain level. Policies must be put into place to support a workforce that looks and works differently than those in the past. Inclusiveness is about doing what is best for individual workers, their families, their crews and co-workers, and
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even the community at large. An organization that takes these things into account will be more successful and could perhaps leverage support and resources in places and people where they had not before. The harsh realities out there make identifying and addressing new trends and issues in masculinized industries worthwhile and, frankly, better for everyone in the long run. CIM: It is easy to imagine mining sites with hundreds of employees, very few of them women, and none of them openly gay. What is the first step to a more inclusive workplace? Collins: The first step is to create and make known policies that are explicitly supportive of all workers and job applicants across gender, race, sexual orientation, disability status, age, national origin, et cetera. If a person can do the work, they can do the work, and that has to be the attitude of the organization from the top down. After policies are in place, there needs to be training. In settings like mining sites, I see no reason why humanistic policies like this should be enforced or valued any less than policies that keep people safe in the mine itself. Here’s an example of why: in the United States defence industry up until the 1970s, it was actually policy that if you were even suspected of being gay, it would hinder your ability to get certain clearance levels. The military created a culture where people are very distrustful of disclosing personal information, because it could in some way affect their work. Many gays in the military are still choosing not to disclose their sexual orientation unless they’re asked directly because in the military, and also in mining, you depend so much on other people that you work with, especially for safety. CIM: What are the elements of a good diversity training program put on by a company? Collins: In general, a program should aim to increase awareness rather than to change peoples’ minds or to make them feel like they are wrong. These programs also have ground rules such that participants feel free to express what they are feeling and thinking about new information without feeling judged, and knowing that what they say will not leave the safe space of the training. When I facilitate these, I give the same respect and attention to the person who completely agrees with what I’m saying as I do to the person who vocalizes something that is completely racist. I’ll ask the same questions of both of those people: Why do you think that? How do you think you came to believe that? What do you think the impact of that belief is on those around you? At least the person who does not agree with what I said is able to leave respecting me and feeling comfortable enough to ask me questions afterward. Delivery and evaluation methods can be one on one, in big or small group settings, or through workplace observation to see if the training is “sinking in.” A good diversity training program also occurs more than once, especially in rural areas or in a work setting where previous exposure to diverse populations may be lower.
CIM: “Diversity” is often referred to as a catch-all for any minority groups in the workforce. How useful is this? Collins: Personally, I hate the word “diversity.” It is such a watered-down term at this point that it almost means nothing. While on the one hand I see the value of the word because it is inclusive of many different kinds of groups, it also takes away from what it actually means to accept and work with the individual groups themselves. In my experience, when employees hear “diversity training,” they almost always immediately roll their eyes or feel like it does not really apply to them. It is an interesting problem, though, because at this time I offer no real solutions. Maybe diversity training could be divided up into several smaller training sessions, so that you have a day on “gender and work” and another on “sexuality and work” and another on “age and work” and so on. Each could build on the other, while also paying homage to the fact that different groups of people will experience unique issues. Whatever the solution is, I think it involves breaking down that catch-all label of diversity in some way. CIM: Why is lesbian-, gay- and bisexual (LGB)-specific training particularly important? Collins: The effects of discrimination or maltreatment based on sexual orientation are different than those based on race or on gender. All are inexcusable, but here in the United States at least, of those three, sexual orientation is the only one that is not a protected class. That’s a term used in the U.S., in laws that protect people based on gender, disability, race, ethnicity and national origin. In many states, people can still get fired for being gay. And in 38 out of 50 states gay people still cannot go to the courthouse, get a marriage licence, and be married under federal law. So, I think at this particular socio-political moment, for many the effects of homophobia and heterosexism are simply much more visceral. CIM: Is having Lord John Browne’s case available a tool that could help move LGB-training forward in mining? Collins: Absolutely. Lord Browne’s case highlights the need for holistic approaches to LGB-inclusivity at work. This could take place by establishing multi-layered mentoring programs, truly inclusive policies, training explicitly for the purpose of addressing lesbian and gay issues, and more. Reading over the circumstances leading to his resignation is also a valuable experience. Lord Browne was a hard worker and his sexual orientation had nothing to do with his ability to do the job well. He would not have become CEO of BP if his sexual orientation affected his ability to do the work. What ultimately affected his ability to do the work was homophobia and heterosexism; that is what forced him to step down. Had he felt freer to be out in his career, he arguably wouldn’t have been in the compromising legal position that he faced at the time of his resignation. It highlights the importance of supporting people for who they are and of allowing them to do the work. CIM August 2013 | 39
14 FIGURES WHO HAVE SHAPED TODAY’S MINING INDUSTRY – AND WHO ARE PUSHING IT IN NEW DIRECTIONS. 14 PERSONNES QUI ONT FAÇONNÉ L'INDUSTRIE MINIÈRE D'AUJOURD'HUI ET LA POUSSE VERS DE NOUVEAUX HORIZONS.
NAMES TO KNOW LES NOMS À CONNAÎTRE PENGGUI YAN THE FIRE STARTER | L’ÉTINCELLE
STEPHEN HARPER THE TIGHTROPE WALKER | LE FUNAMBULE
YOUCEF LARBI THE IDEAS MAN | L’HOMME AUX IDÉES
SUSAN SHABANGU THE REALIST | LA RÉALISTE
NOLAN WATSON THE DEALMAKER | LE NÉGOCIATEUR
SERGIO CAMPUSANO THE UNBELIEVER | LE SCEPTIQUE
ZOË YUJNOVICH THE PROVIDENT GUIDE | LA GUIDE PRÉVOYANTE
MARK CUTIFANI THE FIXER | LE SAUVEUR
LEWIS ROY THE HEART AND SOUL | LE CŒUR ET L’ÂME
IAN PEARCE THE FREE THINKER | LE LIBRE-PENSEUR
KARA FLYNN THE COLLABORATOR | LA COLLABORATRICE
GERRY HATCH THE INNOVATOR | L’INNOVATEUR
TSAKHIA ELBEGDORJ THE OPPORTUNIST | L’OPPORTUNISTE
GERALD PANNETON THE PATHFINDER | L’ÉCLAIREUR
PENGGUI YAN Huiyong Holdings China, the parent of Canadian-incorporated HD Mining International Limited, has nine operating mines in China, and many use the longwall coal-mining method. In March 2012, HD chairman Penggui Yan got permission to bring in 201 Chinese workers under Canada’s Temporary Foreign Worker Program (TFWP) in order to produce a bulk test sample from the Murray River project near Tumbler Ridge, B.C. The longwall method is not currently used in Western Canada, so he reckoned Murray River qualified. But some negative publicity and a court challenge by the International Union of Operating Engineers and the Construction and Specialized Workers Union has soured feelings all around. The case against HD Mining was dismissed but it prompted changes to TFWP. “Clearly with the changes made, it is going to be tougher, not easier, to bring in temporary foreign workers,” says Gordon Houlden, director of the China Institute at the University of Alberta. Changes include eliminating the 15 per cent-reduced wage and establishing that employers cannot require employees to speak languages other than English or French. “You won’t be able to say ‘I need Chinese speakers,’” Houlden points out. HD took a public relations hit that has impacted Chinese investors’ perceptions of Canada, and repairing the company’s image will fall on both Yan and the board. “I think they were not equipped for the PR storm they found themselves in,” says Houlden. Consequently, the China Institute is drafting a best practices guide for Chinese companies in Canada. Labour and environmental issues are the top priorities. “I think it’s in everyone’s business interest – companies like [the Chinese state-owned] CNOOC want to be seen as good corporate citizens. It’s not just about being right or wrong, it’s about public criticism,” concludes Houlden. By Graham Chandler
Rafal Gerszak
THE FIRE STARTER L’ÉTINCELLE
Huiyong Holdings China, la société mère de l’entreprise canadienne HD Mining International Limited, possède neuf mines en exploitation en Chine, parmi lesquelles plusieurs ont recours à la méthode d’extraction du charbon par longue taille. En mars 2012, Penggui Yan, président de HD Mining, a obtenu la permission de faire venir 201 travailleurs chinois en vertu du Programme canadien des travailleurs étrangers temporaires (PTET) pour produire un échantillon d’essai global dans le cadre du projet Murray River près de Tumbler Ridge en Colombie Britannique. Cette méthode n’étant pas utilisée actuellement dans l’ouest du Canada, la société pensait que le projet serait admissible au programme. Mais la mauvaise presse associée à cette méthode et une contestation juridique de l’International Union of Operating Engineers (IUOE, l’Union internationale des opérateurs-ingénieurs) et de la Construction and Specialized Workers Union (l’Union des ouvriers en constructions et spécialisés) ont alourdi le climat. Les poursuites contre HD Mining n’ont pas donné suite, mais elles ont entraîné des changements au PTET. « Il est clair qu’avec les modifications apportées au programme, il sera bien plus difficile de faire venir des travailleurs étrangers temporaires », déclare Gordon Houlden, directeur du China Institute à l’université de l’Alberta. Parmi les changements, citons l’élimination de la réduction des salaires de 15 pour cent et le fait que les employeurs ne pourront plus exiger que leurs employés parlent une autre langue que l’anglais ou le français. « On ne pourra plus dire qu’on a besoin de travailleurs parlant le chinois », explique M. Houlden. Le coup dur qu’ont subi les relations publiques d’HD a terni l’image du Canada chez les investisseurs chinois, et il reviendra à Yan et au conseil d’administration de redorer l’image de l’entreprise. « Je crois que la société était mal préparée à la tempête médiatique dans laquelle elle s’est retrouvée », indique M. Houlden. En conséquence, le China Institute prépare un guide des meilleures pratiques à l’intention des sociétés chinoises implantées au Canada. Les questions de droit du travail et d’environnement sont prioritaires. « Je crois que c’est dans l’intérêt de tous – les sociétés comme [la société d’État chinoise] CNOOC veulent être perçues comme de bons citoyens. Il ne s’agit pas seulement de savoir qui a tort ou raison, mais bien d’éviter les critiques du public », conclut M. Houlden. Par Graham Chandler August 2013 | 41
Courtesy of Jason Ransom/PMO
THE TIGHTROPE WALKER LE FUNAMBULE
STEPHEN HARPE R
Despite his 2011 election majority, Stephen Harper still has a fine line to walk when supporting the oil sands.
“Being prime minister of Canada is not a pleasant job,” says Frank Atkins, associate professor in the University of Calgary’s department of economics. “You’re balancing all kinds of interests all the time. You can rah-rah and say the oil sands are really good but you can’t be seen to be directly interfering in the process.” Nevertheless, by standing up to environmental fringe groups, the Prime Minister has made an important statement. “Harper’s not anti-environment, but I don’t think it’s wrong to say he’s anti-rabid environmentalist – the groups that want the whole oil sands shut down,” says Atkins, who was Harper’s thesis supervisor during his master’s degree. Harper stood up to these groups and started removing their charitable status. And rightly so, Atkins feels. “They have big publicity machines and are being funded by deep-pocketed environmentalists and parading around like they are charities, but they’ve got millions of dollars.” In his U.S. lobbying for the Keystone XL pipeline, along with European pitches for oil sands products, Atkins sees Harper as having managed to assert himself as a proponent of good business, and not simply an oil sands shill. “I think his contributions are effective.” By Graham Chandler 42 | CIM Magazine | Vol. 8, No. 5
Malgré une élection majoritaire en 2011, Stephen Harper se trouve encore sur la corde raide lorsqu’il soutient ouvertement les sables bitumineux. « Être premier ministre du Canada n’est pas une partie de plaisir », explique Frank Atkins, professeur agrégé d’économie à l’université de Calgary. « Il faut constamment mettre en balance toute sorte d’intérêts. Vous pouvez acclamer et vanter les bienfaits des sables bitumineux tant que vous le voulez, mais prenez garde à ne pas vous ingérer directement dans le processus. » Néanmoins, en s’opposant aux groupes environnementaux marginaux, il a clairement pris position. « M. Harper n’a rien contre l’environnement en soi, mais selon moi, on peut certainement affirmer qu’il en a contre les environnementalistes enragés – ces groupes qui veulent à tout prix mettre fin aux sables bitumineux », ajoute M. Atkins, qui était directeur de thèse de M. Harper pendant sa maîtrise. M. Harper a tenu tête à ces groupes et a entrepris de leur retirer leur statut d’organisme de bienfaisance. Et à juste titre d’ailleurs, estime Frank Atkins. « Ces groupes, dotés d’importants moyens publicitaires et financés par des environnementalistes aux bourses bien garnies, se proclament organismes de bienfaisance alors qu’ils possèdent des millions de dollars. » À la lumière de son lobbying aux États-Unis en faveur du projet de construction de l’oléoduc Keystone XL, ainsi que de ses efforts de promotion des produits issus des sables bitumineux en Europe, M. Atkins considère que le premier ministre Harper a réussi à s’affirmer en tant que partisan des bonnes pratiques commerciales, et pas uniquement comme porte-parole des sables bitumineux. « Selon moi, ses contributions sont efficaces. » Par Graham Chandler
With a broad mandate to develop mining in Cree territory and facilitate communication and relationships between miners and Cree communities near James Bay in northern Quebec, the board has expanded their mission. This is due in large part to the efforts of Youcef Larbi, the board’s chief geologist. Larbi has been the driving force behind initiatives like prospecting training sessions for trappers and competitions for local youth to find rocks of geological or mineralogical significance. It is all part of a link that he sees between the traditional relationship the Cree have with the land and understanding modern geological science. “We try to be faithful to ideas of the Crees,” he explains. “I think there is a way to connect the two.” Larbi’s vision and efforts are producing results. Today, there are a handful of active Cree mining companies involved in prospecting, exploration and supply, and a growing cohort of prospector-trappers who keep their eye out for significant mineral formations while tending their traplines. “Our objective is to motivate the community members to be a part of mining,” he says. His successes show the vast potential for the wider involvement of First Nations in the mining industry, far beyond the role of simply granting permission for projects. By Ian Ewing
Le Conseil cri sur l’exploration minérale redéfinit le rôle des Premières Nations dans l’exploitation minière. Sa mission s’est élargie et vise maintenant à développer l’exploitation minière sur le territoire des Cris ainsi qu’à faciliter la communication et les relations entre les mineurs et les communautés Cries près de la baie James, au nord du Québec. Cette évolution est en grande partie attribuable aux efforts de Youcef Larbi, le géologue en chef du Conseil. M. Larbi a été l’instigateur de projets tels que des séances de formation sur la prospection à l’intention des trappeurs et des compétitions organisées pour les jeunes de la région afin de trouver des roches présentant une importance géologique ou minéralogique. Ces projets reflètent le lien qui, selon lui, existe entre la relation traditionnelle que les Cris entretiennent avec la terre et une meilleure compréhension de la géologie moderne. « Nous essayons de rester fidèles aux idées des Cris », explique-t-il. « Je crois qu’il est possible de concilier ces deux concepts. » La vision et les efforts de M. Larbi donnent de bons résultats. Aujourd’hui, il existe une poignée de sociétés minières cries actives qui font de la prospection, de l’exploration et de l’offre, et un nombre croissant de prospecteurs-trappeurs qui sont à l’affût de formations minérales importantes en parcourant leur réseau de piégeage. « Notre objectif est d’encourager les membres de la collectivité à participer à l’exploitation minière », explique Youcef Larbi. Ses réussites montrent les possibilités d’une plus grande participation des Premières Nations à l’exploitation minière, bien au-delà d’un rôle consistant simplement à accorder des autorisations pour la réalisation de projets. Par Ian Ewing Courtesy of Youcef Larbi
The Cree Mineral Exploration Board is redefining the role of First Nations in mining.
THE IDEAS MAN L’HOMME AUX IDÉES
South Africa’s mineral resources minister Susan Shabangu began her job as a positive, investor-friendly and likeable political figure.
THE REALIST LA RÉALISTE
La ministre des ressources minérales d’Afrique du Sud a commencé son mandat comme une personnalité politique positive, sympathique et favorable aux investisseurs. Pourtant, alors qu'elle faisait initialement campagne contre le nationalisme, elle a par la suite menacé de révoquer les droits des sociétés minières qui procèdent à des restructurations et réduisent leurs effectifs. D’après Peter Attard Montalto, économiste des marchés émergents à Nomura International, ce n'est pas la ministre Shabangu qui a fondamentalement changé sa vision, mais plutôt la réalité dans laquelle elle évolue ; en effet, les retombées de la grève de l’année dernière et de la
SUS A N SHAB A N G U
But she has shifted from campaigning against nationalism to threatening to revoke mining rights from mines that restructure and cut their workforces.
Courtesy of the Government of South Africa
YOU CE F LAR B I
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Jeff Vinnick
However, Peter Attard Montalto, emerging market economist at Nomura International, does not believe Shabangu herself has fundamentally changed, but the reality around her has, as the fallout from last year’s strike and shootings at Lonmin’s Marikana mine continues to upset traditional alliances and shift the power of organized labour movements. “Policy is ultimately dictated to her from the wider African National Congress (ANC) executive and above from President Jacob Zuma, with an eye on maintaining the tripartite alliance and election next year,” he says. “As an ANC deployee, she’s expected to carry out such orders regardless of what she believes.” He does not foresee the mining labour crisis in South Africa improving, since the fundamental issues persist – perceptions of large inequality within union structures, mines and management, and the country as a whole. “Interacting with the Department of Mineral Resources is extremely difficult because it is dysfunctional,” Montalto says. “There need to be reforms around the labour system and the mining code regarding the requirements of unions and of companies with wage negotiation – right now, policy is too short term.” Shabangu’s actions may, in fact, help her in the next election. “She’s positioning mining policy in a more populist bent that’s more pro-union and pro-worker, and anti-corporate,” Montalto says. “It’s likely Shabangu has some good ideas, but is heavily constrained by political reality. She has to do what she’s told.” By Krystyna Lagowski
After serving as the CFO of Silver Wheaton, Nolan Watson founded Sandstorm in 2008 and has seen his metals streaming business take off.
THE DEALMAKER LE NÉGOCIATEUR
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fusillade à la mine de Marikana de la société Lonmin continuent de bouleverser les alliances traditionnelles et de modifier les pouvoirs des mouvements ouvriers organisés. « En définitive, la politique lui est dictée par le comité exécutif du Congrès national africain (ACN) et, à un échelon supérieur, par le président Jacob Zuma qui veille au maintien de l’alliance tripartite et à l’élection de l’année prochaine », explique-t-il. « Au service de l’ANC, on s’attend à ce qu’elle mette à exécution les ordres, peu importe ce qu’elle en pense. » M. Montalto ne s’attend pas à une amélioration de la crise qui touche la main d’œuvre minière en Afrique du Sud, car les problèmes fondamentaux tels que les importantes inégalités perçues au sein des structures syndicales, des mines et au niveau de la gestion ainsi que du pays même persistent. « Il est très difficile d'interagir avec le ministère des ressources minérales, car il est dysfonctionnel », explique M. Montalto. « Il faudrait réformer le régime du travail et le code minier concernant les exigences des syndicats et des sociétés quant aux négociations des salaires ; à l’heure actuelle, la vision appliquée est une politique à court terme. » Les actions menées par la ministre Shabangu pourraient en réalité lui être favorables pour les prochaines élections. « Elle donne à la politique minière un aspect plus populiste, en faveur des syndicats et des travailleurs et contre les entreprises », ajoute M. Montalto. « La ministre Shabangu a probablement de bonnes idées, mais elle est fortement limitée par la réalité politique. Elle doit faire ce qu’on lui ordonne de faire. » Par Krystyna Lagowski
Now, with markets in a slump, he is busy as ever evaluating new opportunities that will drive his business’s next growth spurt.
CIM: When markets look as grim as they do today, what do you do to adapt? Watson: There’s no company I’d rather be at than Sandstorm in this environment. To adapt, we reduce the amount
Après avoir occupé le poste de directeur financier de Silver Wheaton, Nolan Watson a fondé Sandstorm en 2008 et a été témoin de l’essor du secteur de l’octroi d'une avance en espèces aux sociétés minières d’exploitation des métaux en contrepartie d'une part de leur production (le streaming business en anglais). Aujourd’hui, au vu de l’effondrement des marchés, il est plus occupé que jamais à évaluer les nouvelles opportunités pouvant stimuler un regain de croissance prochain.
ICM : Comment vous adaptez-vous dans un contexte aussi peu réjouissant que celui des marchés actuels ? Watson : Dans cet environnement, je ne pourrais trouver meilleure entreprise que Sandstorm. Pour nous adapter, nous réduisons le montant des capitaux investis dans les nouvelles exploitations et nous tentons de trouver des occasions de réaliser des profits en octroyant des capitaux à nos partenaires actuels s’ils
of capital that we spend on new streams and we sit there and we wait and try to find opportunities to make money off of providing capital to our existing partners, if they run into trouble. So we keep our stream, keep our mines going, and make money out of it when the industry turns around.
sont en difficulté. Nous conservons nos capitaux, assurons le fonctionnement de nos mines et réalisons des profits lorsque l’industrie se remet en marche.
CIM: Do you mostly approach mining companies or are they coming to you? What is the breakdown? Watson: Probably 50 per cent of the opportunities that come
présentent proviennent d’une sollicitation à froid de personnes de l’industrie à la recherche de capitaux. Environ 40 pour cent proviennent de preneurs fermes qui cherchent à financer des clients travaillant sur des projets régionaux, et nous prenons l’initiative dans environ 10 pour cent des cas. Cependant, si l’on regarde l’origine des ententes que nous concluons, aucune d’entre elles n’est issue de la sollicitation à froid et environ la moitié résulte des contacts que nous avons établis.
in our door are cold calls from people in the industry who are looking for capital. Another 40 per cent of them come from investment bankers who have clients with regional projects they’re looking to finance, and about 10 per cent is generated by us. But if you look at where the deals we close come from, none of them ever come from cold calls and probably half are from the ones that we initiated.
ICM : Qui fait le premier pas, vous ou les sociétés minières ? Watson : Probablement 50 pour cent des occasions qui se
ICM : Combien de projets évaluez-vous chaque année ? Watson : Nous recevons environ deux appels par jour, soit
“… if you look at where the deals we close come from, none of them ever come from cold calls…”
plus de 500 par an. Nous rejetons immédiatement 90 pour cent de ces appels. Nous évaluerons sérieusement environ 50 projets par an, et ne visitons qu’une dizaine de sites annuellement.
ICM : Y a-t-il des produits qui n’intéressent pas Sandstorm ? Watson : Nous tentons d’éviter les produits moins bien CIM: How many projects do you evaluate a year? Watson: We’re getting about two calls a day, so over 500 a year. Of those calls, we say ”no” immediately to 90 per cent of them. We’ll look seriously at probably 50 projects a year, and only visit about 10 sites a year.
CIM: Is there any commodity that’s not attractive to Sandstorm? Watson: We try to stay away from more obscure commodities where there’s not a lot of clarity in terms of future pricing, and the markets are more opaque. So, we stay away from things like niobium and vanadium.
CIM: What is absolutely fundamental to making a deal? Watson: What we’re looking for are assets we think have exploration upside that the market doesn’t fully understand; that’s where we find our best opportunities. We don’t set minimum rules like it has to be a 10-year mine life because if we can find a four-year mine life that we think is going to turn into a 20-year mine life, then we’ll make a lot more money doing that deal.
CIM: Some characterize the streaming business as the mafia of the mining industry. How do you respond? Watson: It’s completely the opposite of what you would think the negotiating dynamic would be, because we’re the ones saying “No.” Management teams are usually so concerned about getting as much money up front as possible. They’re always trying to tell us “Okay. We’ll sell you 25 per cent of our production.” We don’t want more than 13 per cent of
connus pour lesquels il est difficile d’établir clairement la tarification future et où les marchés sont plus opaques. Ainsi, nous nous abstenons d’investir dans le niobium et le vanadium.
ICM : Quel est l’élément fondamental pour conclure une entente ? Watson : Nous recherchons des actifs qui, selon nous, présentent un avantage en matière d’exploration que le marché n’a pas complètement réalisé ; c’est là que nous trouvons nos meilleures occasions. Nous n’imposons pas d’exigences minimales, par exemple que le cycle de vie de la mine doit être de 10 ans, car si nous trouvons une mine ayant un cycle de vie de quatre ans et que nous pensons que ce dernier pourra s’étendre jusqu’à 20 ans, nous réaliserons de plus grands profits en acceptant cette entente.
ICM : Certains considèrent ces activités d’octroi d'espèces en contrepartie d'une part de la production des sociétés minières comme la mafia du secteur. Qu’en pensez-vous ? Watson : C’est tout le contraire de l’idée qu’on se fait de la dynamique des négociations, car c’est nous qui rejetons les propositions. Les équipes de direction se soucient généralement davantage d’obtenir le plus d’argent possible à l’avance. Ils tentent toujours de nous dire « D’accord. Nous vous vendrons 25 pour cent de notre production. » Nous ne voulons pas plus de 13 pour cent de votre production car notre objectif est que vous bénéficiez de la majeure partie des profits. Dans chaque entente, nous sommes contraints d’avoir ce même débat et de dire « Désolés, nous ne sommes pas disposés à en accepter autant. » August 2013 | 45
CIM: With Nations Cry, the humanitarian organization you founded, you’ve focused on educating people in Sierra Leone, and a school is currently under construction there, but Sandstorm doesn’t invest in that country. Why? Watson: Most of the gold operations in Sierra Leone are currently owned by Chinese groups and they don’t need our capital. We have looked at a number of West African countries, including Sierra Leone and other neighbouring countries but just have not yet found a combination of a high-enoughquality mine and a high-enough-quality counterparty and low-enough political risk to want to step in.
CIM: Could financing a project help your philanthropic cause? Watson: I certainly think it would, but I am always very careful never to mix charity and business. I do a lot of charity work on my personal time, but not on Sandstorm’s dollar.
CIM: Have you ever said no to a deal just because of ethical reasons? Watson: Absolutely. We’ve said no because we think a mine is potentially going to kill someone and we’ve said no for environmental reasons. But most deals get killed because the mines are just uneconomic. If it looks like we have an economic mine, then we start saying “no” for ethical reasons and other issues. By Peter Braul
Sergio Campusano, the head of the Diaguita Huascoaltinos community in Chile, was among the first indigenous leaders to oppose Canadian mining projects in the gold-rich Huasco Valley. It was years before environmental groups launched a series of internationally publicized campaigns against the Pascua-Lama project. Within the opposition movement, he has acquired the stature of a lone wolf, choosing to represent himself alone and not associate with other Diaguita and environmental groups with similar interests. Nevertheless, his actions have contributed to an
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ICM : Nations Cry, l’organisation humanitaire que vous avez fondée, œuvre pour l’éducation de la population de la Sierra Leone, où la construction d’une école est en cours, mais Sandstorm n’a aucun investissement dans ce pays. Pourquoi ? Watson : La plupart des exploitations d’or à la Sierra Leone sont présentement la propriété de groupes chinois qui n’ont pas besoin de nos capitaux. Nous avons envisagé un certain nombre de pays d’Afrique de l’ouest, y compris la Sierra Leone et d’autres pays voisins, mais nous n’avons pas encore trouvé la combinaison idéale, à savoir une mine de qualité élevée, une contrepartie intéressante et des risques politiques faibles pour y investir des capitaux.
ICM : Le financement d’un projet pourrait-il servir votre cause philanthropique ? Watson : Assurément, mais je me garde toujours de mélanger les activités de bienfaisance et les affaires. Je participe à de nombreuses activités de bienfaisance à titre personnel, mais jamais avec l’argent de Sandstorm.
ICM : Avez-vous déjà refusé de conclure une entente pour des raisons éthiques ? Watson : Absolument. Nous avons déjà refusé des ententes car nous pensons qu’une mine pourrait faire des victimes et rejetons l’accord pour des raisons environnementales. Toutefois, la plupart des ententes échouent parce que les mines ne sont pas rentables. Si la mine semble rentable, nous commencerons par refuser pour des raisons éthiques ou d’autres problèmes. Par Peter Braul
Isabel Orellana
your production because we want you to have most of the profit. Every deal, we have to have that discussion saying “Sorry, we just aren’t willing to take that on.”
SE RG I O CA M PUSA NO Sergio Campusano, le dirigeant de la communauté Diaguita Los Huascoaltinos au Chili, était parmi les premiers chefs autochtones à s’opposer activement aux projets miniers canadiens dans la vallée de Huasco – bien avant que les groupes environnementaux ne lancent une série de campagnes internationales contre le projet Pascua-Lama. Au sein du mouvement d’opposition, il a acquis la stature d’un loup solitaire, suivant sa propre voie et ne s’associant guère aux
“…we realized that they were abusing our peoples’ innocence…” When Barrick Gold’s Pascua-Lama project was approved in 2006, Campusano filed a complaint with the Inter-American Commission on Human Rights, stating that the environmental assessment did not take into account the impacts of the project on his community. His case was heard in Washington D.C., in October 2011 and could be taken to the Inter-American Court. On similar grounds, he compelled the Chilean Supreme Court to cancel the environmental assessment for Goldcorp’s El Morro project in April 2012, which suspended construction. Many other Diaguita communities have since taken his lead and adopted a blanket adversarial stance towards mining projects. And though he is a catalyst for campaigns against major projects, Campusano has mostly stayed away from the limelight. “I have always been a guarded leader,” he says. “We first thought that with our capacities, we would be able to discuss as equals with the companies. But we realized that they were abusing our peoples’ innocence, taking advantage of our most basic needs. So I prefer to stay away from them.” Because of this, Campusano himself is fairly unknown to the Chilean public – chances to speak with him are extremely rare. “Community struggles have always been understated [in the Chilean press],” says Nancy Yañez, Campusano’s legal adviser. “The Huascoaltinos have been depicted as a small, isolated group. The community has been wary of journalists ever since.” By Antoine Dion-Ortega
Iron Ore Company of Canada CEO Zoë Yujnovich is the new chair of the Mining Association of Canada (MAC) and her long-term vision will be particularly important during uncertain times. Pierre Gratton, MAC president and CEO, admires Yujnovich’s skill in moving conversations towards a consensus
autres groupes Diaguitas ou aux environnementalistes. Toutefois, ses actions ont contribué à alimenter le scepticisme de la population, Diaguita ou non, à l’égard des sociétés minières de la région. Quand le projet Pascua-Lama de Barrick Gold a été approuvé en 2006, M. Campusano avait déjà déposé une plainte à la Commission interaméricaine des droits de l’homme, alléguant que l’étude environnementale ne prenait pas suffisamment en compte les impacts du projet sur sa communauté Diaguita. Son cas a été entendu en octobre 2011 à Washington et pourrait être soumis à la Cour interaméricaine. Pour des motifs similaires, il a obtenu de la Cour suprême du Chili, en avril 2012, qu’elle annule l’évaluation environnementale du projet voisin El Morro, de la société Goldcorp, ce qui a abouti à la suspension des travaux de construction. D’autres groupes Diaguitas ont depuis adopté une position similaire, recourant à divers tribunaux pour faire valoir leurs droits à l’encontre des projets. Malgré son rôle catalyseur dans les campagnes d’opposition, M. Campusano préfère se tenir à l’écart des feux de la rampe. « J’ai toujours été un chef réservé », dit-il. « Nous avons d’abord cru qu’avec nos capacités, nous pourrions discuter d’égal à égal avec les sociétés. Mais nous avons réalisé qu’elles abusaient de l’innocence de nos communautés, profitant de nos besoins les plus élémentaires. Alors maintenant, je préfère me tenir à distance ». C’est la raison pour laquelle M. Campusano est assez peu connu au Chili et les occasions de s’adresser à lui directement sont extrêmement rares. « Les luttes des communautés ont toujours été négligées [par la presse chilienne] », déclare Nancy Yañez, la conseillère juridique qui accompagne M. Campusano dans son combat. « Les Huascoaltinos ont été dépeints comme un petit groupe isolé, aussi la communauté se méfie depuis des journalistes. » Par Antoine Dion-Ortega The Image Commission
atmosphere of distrust between mining companies and local populations, Diaguita or not.
Zoë Yujnovich, chef de la direction de la compagnie minière IOC (Iron Ore THE Company of Canada), PROVIDENT GUIDE est la nouvelle présiLA GUIDE dente du Conseil PRÉVOYANTE d’administration de l’Association minière du Canada (AMC) et sa vision à long terme prendra une importance particulière dans les périodes difficiles. Pierre Gratton, président et chef de la direction de l’AMC, admire l’aptitude de Mme Yujnovich à orienter les conversations vers un consensus, et est persuadé que ses conseils seront précieux pour l’organisation. « Nous devons composer avec la baisse du prix des matières premières et le recul de l’industrie, mais il s’agit d’un phénomène
Z OË Y UJ N OV I C H August 2013 | 47
cyclique », indique-t-il. « Bien que l’industrie tourne au ralenti actuellement, tout le monde envisage l’avenir avec optimisme. Zoë travaille dans le domaine du minerai de fer, aussi elle sait se projeter sur le long terme. » Mme Yujnovich est également la première femme à assurer ce poste, et M. Gratton reconnaît que le fait de voir une femme présidente reflète l’évolution de l’industrie, qui voit de plus en plus de femmes occuper des postes de cadres supérieurs et de dirigeantes. « Avoir une main d’œuvre plus diversifiée nous aidera à répondre à nos besoins en matière de ressources humaines, sachant que nous devons composer avec le vieillissement de nos travailleurs », ajoute M. Gratton. « Zoë se fera une joie de relever ce défi, d’autant qu’elle en est le symbole. La moitié des membres de la direction générale de sa société sont des femmes. » Par Krystyna Lagowski
Mark Cutifani has taken the reins at Anglo American at a tumultuous time.
Mark Cutifani a pris les rênes d’Anglo American dans une période tumultueuse. En avril, il a quitté son poste à hautes responsabilités à AngloGold Ashanti pour remplacer Cynthia Carroll, qui était alors en grande difficulté et vient maintenant s’ajouter à la longue liste des chefs de sociétés minières importantes se retrouvant sans emploi en raison de la chute du cours des actions dans tout le secteur. Au cours de l’année qui s’est écoulée, de nouveaux chefs de la direction ont pris la tête de Rio Tinto (Sam Walsh), BHP Billiton (Andrew McKenzie), Kinross (J. Paul Rollinson) et Barrick Gold (Jamie Sokalsky). Avant que M. Cutifani accepte de relever le défi à Anglo American, la valeur de l’entreprise avait chuté de 14 milliards de dollars en cinq ans. Il l’a reconnu dans son discours aux actionnaires lors de l’assemblée générale annuelle d’Anglo American le 19 avril, admettant que « le cours [de nos] actions perdait du terrain par rapport à celui de nos pairs ». Beaucoup surveillent de près comment il compte s’y prendre pour redresser la barre, ou s’il sera en mesure de le faire. Dans l’optique de rassurer les investisseurs, il déclarait que « si aucune des possibilités d’investissement ne vient compenser le taux de rendement minimal en fonction des risques engagés, nous reverserons l’argent investi à nos actionnaires. » Une évaluation des activités de la société en juillet a mis l’accent sur un aspect en particulier : la valeur. Comme l’expliquait M. Cutifani à Bloomberg, « le mot d’ordre qui orientera les décisions que nous allons prendre sera la “ valeur ”. Il ne sera question ni de “ croissance ”, ni de “ prise de contrôle ”, ni de “ développement ”. Mais bien de “ valeur ”. » Il serait bon que l’ensemble de l’industrie en prenne note. Par Ian Ewing Courtesy of Anglo American
and is confident her guidance will be helpful to the organization. “We’re facing lower commodity prices and the industry is pulling back, but it’s always been cyclical,” he says. “Even though we’re in a down cycle, everyone’s bullish about the future. Since Zoë is in the iron ore business, she knows to think on a long-term basis.” Yujnovich is also the first woman to hold the position and Gratton acknowledges that having a female chair reflects industry change, with more women taking executive and leadership positions. “Having a more diverse workforce will assist in meeting our human resource challenges, since we are dealing with an aging workforce,” Gratton says. “Zoë will enjoy taking on that challenge, especially since she’s a symbol of it. Half of the senior management at her company is female.” By Krystyna Lagowski
In April, he left the top position at AngloGold Ashanti to replace the embattled Cynthia Carroll, who is among a host of major mining company leaders now without a job as share prices sink sector-wide. The last year has seen new CEOs brought in at Rio Tinto (Sam Walsh), BHP Billiton (Andrew McKenzie), Kinross (J. Paul Rollinson) and Barrick Gold (Jamie Sokalsky). Before Cutifani took on the challenge at Anglo American, the company’s value had plummeted by $14 billion in five years. He acknowledged as much in a shareholder address at Anglo American’s AGM on April 19, admitting that “our share price has been languishing compared to our peers.” Many are watching closely to see how – or if – he can right the ship. With an eye toward reassuring investors, he noted, “If there are no investment opportunities that deliver above our risk/return hurdles, we should return cash to our shareholders.” A review of the company’s business in July focused on one thing: value. “The one word that will drive decisions we will make will be value,” Cutifani told Bloomberg. “The word won’t be ‘growth’ or ‘takeover’ or ‘development’. It will be ‘value.’” The industry as a whole might take note. By Ian Ewing
THE FIXER LE SAUVEUR
MARK CUTI FA N I
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Courtesy of GlencoreXstrata
LEWI S ROY
THE HEART AND SOUL LE CŒUR ET L’ÂME
“It was like home,” says Lewis Roy. “I would come to work, know all the guys, chat with them, feeling no stress about the work.” For the 66-year-old, the closure of Xstrata Zinc’s Brunswick mine in May was a life-changing event, having worked there for 46 years without ever missing a day. “It was a shock, especially for the older ones. It was our home. It is hard to explain.” The Brunswick mine, near Bathurst, New Brunswick, changed owners many times since opening in 1964, and was one of the world’s largest zinc mines in its time, as well as the largest private employer in the northern part of the province. Roy was 20 when he moved from Kedgwick, New Brunswick, to
Bathurst, to work at the mine as an industrial mechanic in 1967. Over his career at Brunswick mine, he was witness to sweeping changes in the industry. “We were in charge of maintaining the pneumatic air drills,” he recalls. “They have since been replaced with diesel motors. We were easily 1,800 to 2,000 employees in 1974. At the end of the 1970s, that dropped to 800 workers. Mechanization has cut the labor force by half.” Still, the mine was the pillar of the local economy. “Some people were commuting from as far as TracadieSheila, more than 70 kilometres away,” Roy says. “They would bring back their wages to their village. It was keeping the economy rolling.” Roy is hopeful that other mining projects will soon be developed in the region to take the place of the Brunswick mine. “We are expecting three to four projects to be launched soon, hopefully at the beginning of autumn. If these can open, we will all be fine,” he says, but he wonders what fate holds for mine workers like him if they do not. By Antoine Dion-Ortega
« La mine, c’était comme chez nous » , dit Lewis Roy. « J’allais là-bas, je connaissais tout le monde, je discutais avec les autres mineurs, et je ne stressais pas sur le travail. » Pour le sexagénaire qui, en 46 ans de carrière, n’a jamais manqué un seul jour de travail, la fermeture de la mine Brunswick de Xstrata Zinc en mai dernier a été un véritable bouleversement. « Ça a été un grand choc, surtout pour les plus âgés. La mine, c’était notre deuxième chez nous. C’est dur à expliquer. » La mine Brunswick, à proximité de Bathurst au Nouveau-Brunswick, a changé plusieurs fois de propriétaires depuis son ouverture en 1964. À l’époque, il s’agissait de l’une des plus grosses mines de zinc au monde, et du plus important employeur privé de tout le nord de la province. M. Roy avait 20 ans quand, en 1967, il a déménagé de Kedgwick pour aller travailler à la mine à Bathurst comme mécanicien industriel. Durant sa carrière de 46 ans à la mine, il a assisté à des changements profonds dans l’industrie. « Nous devions assurer l’entretien des marteaux perforateurs à air comprimé », se rappelle-t-il. « Avec la modernisation, ils ont été remplacés par des moteurs diesel. En 1974, la mine employait 1 800 ou 2 000 personnes. À partir de 1977, le personnel a été réduit à 800 personnes. L’automatisation a entraîné une réduction de moitié de la main d’œuvre. » La mine était tout de même le pilier de l’économie locale. « Certains arrivaient d’aussi loin que Tracadie Sheila, à 70 kilomètres de la mine, pour venir au travail », évoque M. Roy. « Tout le monde rapportait ses revenus au village, ce qui maintenait l’économie sur les rails. » M. Roy espère que d’autres projets miniers viendront prendre le relais de la mine Brunswick. « Trois ou quatre autres projets sont en phase d’être lancés d’ici le début de l’automne », dit-il. « Si ces projets se réalisent, nous aurons tous du travail. » Mais il ignore ce qu’il adviendra des mineurs de sa région si ces projets n’aboutissent pas. Par Antoine Dion-Ortega August 2013 | 49
Courtesy of Ian Pearce
THE FREE THINKER LE LIBREPENSEUR
Perhaps the most qualified unemployed person in the mining industry today, Ian Pearce, formerly Xstrata Nickel CEO and Mining Association of Canada chair, has time on his hands for the first time in years. Not one to dally, he is now channelling his ambition into building the business case for a more diverse mining industry, hoping his newfound freedom following Xstrata’s merger with Glencore will allow him to make an even bigger difference.
CIM: What has being away from Xstrata given you the leeway to do that you weren’t able to before? Pearce: I’m trying to set up a forum with Canadian mining sector CEOs in September to discuss diversity in mining. I believe there is a business case for this industry to seriously address gender inclusivity. When you look at where we’re going to draw future talent, there’s no doubt that it will have to come from a broader population group. Success stories from the rest of the business world abound, and by using some of these examples, we can show that it can be done in mining too. I’ve drawn up a list of CEOs who I believe can make a meaningful difference to the Canadian mining sector’s approach. Five CEOs have already responded positively to the formation of this forum.
CIM: So what was the catalyst for this? Pearce: I had every intent, for the last six years, of doing something about diversity, including addressing gender 50 | CIM Magazine | Vol. 8, No. 5
IA N PE A RCE Pour la première fois depuis des années, Ian Pearce, le chômeur sans doute le plus qualifié de l’industrie minière à ce jour, anciennement chef de la direction de la société Xstrata Nickel et président de l’Association minière du Canada, ne manque pas de temps. M. Pearce, qui n’est pas du genre à se laisser aller à ne rien faire, consacre maintenant son énergie à la préparation d’une analyse de rentabilité pour une industrie minière plus diversifiée, dans l’espoir de mettre à profit la liberté qu’il a acquise depuis la fusion de Xstrata et Glencore.
ICM : Depuis votre départ de Xstrata, avez-vous eu la liberté de faire certaines choses que vous ne pouviez vous permettre auparavant ? Pearce : J’essaie de mettre en place un forum destiné aux dirigeants du secteur minier canadien pour septembre afin de discuter de la diversité dans l’industrie. Selon moi, ce secteur a besoin d’un plan organisé pour régler une bonne fois pour toute la question de la disparité entre hommes et femmes. Quand on cherche d’où viendront les futurs talents, il est clair qu’il faudra envisager un groupe de population plus large. Les autres secteurs d’activités ne manquent pas d’exemples de réussite en la matière, aussi en suivant certains de ces modèles, on pourra en faire de même dans l’industrie minière. J’ai établi la liste des dirigeants qui, selon moi, peuvent avoir un impact sur l’approche que privilégie l’industrie minière canadienne. Cinq chefs de la direction ont déjà confirmé qu’ils participeront au lancement de ce forum.
ICM : Et quel en a été l’élément déclencheur ? Pearce : Depuis six ans déjà, j’ai la ferme intention de faire quelque chose pour encourager la diversité, notamment pour réduire la disparité entre les genres. J’ai eu beaucoup de discussions parfois très animées avec mon équipe de direction, où je leur disais: « Je ne veux plus en parler ; il faut régler ce problème une fois pour toute. » Et en fin de compte, la question n’a jamais été réglée car ce n’est pas quelque chose que l’on ajoute tout simplement à la liste d’activités quotidiennes ou
inclusivity. I had lots of discussions, sometimes heated, with my management, saying, “I don’t want to talk about this again. I want you to address it.” And ultimately, it didn’t get addressed because it wasn’t something that you just add on to the day-to-day activities or just do naturally. It’s something that has to be embedded in an organization strategically. In years gone by, these things were typically done in an ad hoc way; health and safety was to be dealt with by the health and safety departments. Management eventually realized that health and safety was their ultimate responsibility, and so health and safety became very much ingrained in the business plan. You discussed it. Diversity is no different.
CIM: What have been the most encouraging things you’ve seen actually happen? Pearce: Cameco comes to mind, not only in terms of hiring women, but diversity as a whole, including the engagement of Aboriginal Peoples. That is a great example of who is doing things right and heading in the right direction. Another example, within my business, was a new operation in New Caledonia, where there are over 35 per cent women in the workplace. When you get up to 35 per cent, you’ve got some momentum and you can actually start addressing how to set up the work environment and aspects surrounding the work place. We had talked about setting up a simple thing like a daycare service that, for example, recognizes shift cycles. Early on in my career, both my wife and I were professionals. It was my responsibility to collect my son at the end of the day and was forever paying late collection fees as business activities delayed me. This is the type of stress that couples undergo and penalties they incur to try and keep careers. Eventually, one of the parents quits their job because it just becomes too difficult.
CIM: And what are some of the problems you’re surprised to see sticking around? Pearce: There are some things that we’ve got to do, simple things that are not in place today. I was recently visiting an operation, and we had a woman engineer with us when we went underground. And when I came to surface, I asked my management, “So what about latrines for women underground?” And they admitted there weren’t any! Another example: generally, our industry has coveralls for men. When women come into the workplace, they’re basically given a men’s coverall and told to live with it. They’re uncomfortable, as they’re not properly designed. Put a shirt on backwards and see how comfortable that is. How do we expect women to want to work for us when simple things like these don’t get addressed?
CIM: Can you share any info about your next career move? Pearce: Ultimately, I wouldn’t mind getting onto some boards. Those could be not-for-profit, they could be with academic institutions, or with government. I’m not going to
qui se règle naturellement. Il faut s’y atteler au niveau de l’organisation, de manière stratégique. Auparavant, les choses se réglaient de manière ad hoc : les questions de santé et de sécurité étaient déléguées aux services de la santé et de la sécurité. Avec le temps, les dirigeants ont pris conscience du fait que les responsabilités en matière de santé et de sécurité leur incombaient, aussi ces aspects du travail ont-ils été intégrés aux plans d’activités. On en parlait. Il en va de même pour les questions de diversité.
ICM : Quels sont les changements les plus encourageants auxquels vous avez assisté ? Pearce : Cameco me vient à l’esprit, pas seulement en termes du taux d’emploi de femmes, mais de la diversité en général, et notamment de l’emploi d’autochtones. C’est un très bon exemple d’une entreprise qui agit de la bonne manière et évolue dans la bonne direction. Un autre exemple dans mon secteur d’activité est celui d’une nouvelle exploitation en Nouvelle-Calédonie, où plus de 35 pour cent des employés sont des femmes. Atteindre 35 pour cent donne une certaine impulsion qui permet de vraiment commencer à organiser l’environnement de travail et tous les aspects qui vont avec. Nous avions évoqué l’idée d’organiser des choses simples comme un service de garde qui, par exemple, tiendrait compte des cycles des postes. Au début de ma carrière, ma femme et moi travaillions tous les deux. J’étais chargé de récupérer mon fils à la fin de la journée et je payais constamment des frais de retard à cause de mes activités professionnelles. C’est le genre de contrainte que les couples subissent, et les coûts qui découlent de leur volonté de préserver leur carrière. Souvent, l’un des parents sera contraint de quitter son emploi car la situation devient trop difficile.
ICM : Et quels problèmes êtes-vous surpris de voir perdurer ? Pearce : Nous devons faire certaines choses, des choses simples qui n’existent toujours pas. Je visitais dernièrement un site d’exploitation, et une ingénieure nous a accompagnés dans la mine. Quand nous sommes remontés, j’ai demandé aux directeurs s’il y avait des toilettes pour femmes dans le puits. Ils ont bien dû admettre qu’il n’y en avait pas ! Un autre exemple : en général, notre industrie fournit les bleus de travail aux hommes. Quand des femmes arrivent au travail, elles se voient remettre une combinaison pour homme et on leur dit de s’en accommoder. Ces vêtements ne sont pas confortables, car ils ne sont pas adaptés aux femmes. Mettez votre maillot à l’envers et vous verrez que ce n’est pas très confortable. Comment pouvons-nous espérer que des femmes viennent travailler pour nous si nous ne sommes pas capables de régler ce genre de petits détails ?
ICM : Pouvez-vous nous parler de la prochaine étape de votre carrière ? Pearce : À terme, j’aimerais bien intégrer un comité, d’un organisme à but non lucratif, d’un établissement d’enseignement ou encore d’une société gouvernementale. Je ne ferme aucune porte. August 2013 | 51
close any door. I’m looking to get a job where I can influence outcomes. I don’t want to just be in a position. I’m not chasing titles. I’m not chasing money. I’m chasing a career opportunity where I feel I can make a difference and add value.
CIM: So you’re not necessarily looking to head up another mining business? Pearce: I’d been on this treadmill running as the CEO of a
ICM : Alors, vous ne cherchez pas nécessairement à diriger une autre société minière ? Pearce : J’ai été chef de la direction d’une entreprise et j’ai bien failli sauter d’un poste à un autre. J’ai pris du recul et me suis dit qu’il était hors de question que je continue dans cette voie. Cette période d’introspection m’a permis de me détendre et d’envisager mon avenir avec soin. Mon toit fuit et je suis en train de le réparer ; je m’occupe de mon jardin, ce que j’adore, et j’ai décidé de répertorier mes vins. J’ai déjà trouvé 25 bouteilles qui ont dépassé leur période idéale de consommation et j’ai bien l’intention de rectifier cette situation ! Par Peter Braul
Courtesy of Syncrude
business and I was very close to jumping from one treadmill onto another. I stepped back from it and said, “Whoa, you know I’m not gonna do that.” What this period has allowed me to do is just really decompress and think carefully about my future options. I have a leaky roof which I’m fixing; got stuck in my garden, which I love, and I decided to index my wine. So far, I’ve identified 25 bottles already past their enjoy-by date and I fully intend to rectify that! By Peter Braul
Je cherche un emploi où j’aurai une influence sur les résultats. Je ne cherche pas seulement un poste. Je ne cours pas après les titres ni l’argent. Je cherche une opportunité professionnelle où j’aurai le sentiment d’apporter des améliorations et de créer de la valeur.
KARA FLY N N It has been a year and a half since Syncrude promoted Kara Flynn to the role of vice-president of government and public affairs – a title created specifically for her. She leads the company’s communications, community and aboriginal relations, and public policy work. The decision to elevate Flynn to a vice-president position on Syncrude’s executive committee reflects the intensifying public attention that the oil sands industry has been receiving in the last years. “Our relationships with local stakeholders and governments are clearly growing areas of work,” she says. “There is heightening dialogue across the spectrum of perspectives and opinions on our industry, heightening awareness, and the need to have robust consultation with our local aboriginal communities.” As one of Syncrude’s 12 executive committee members, Flynn has seen the scope of her work expand across the 52 | CIM Magazine | Vol. 8, No. 5
THE COLLABORATOR LA COLLABORATRICE
Voilà un an et demi que Syncrude a promu Kara Flynn au rôle de vice-présidente des affaires publiques et gouvernementales – un titre spécifiquement créé pour elle. Elle est depuis en charge des communications, des relations avec les communautés et les autochtones et des politiques publiques. La décision de hisser Mme Flynn au rang de vice-présidente siégeant au comité exécutif de Syncrude illustre l’attention publique croissante que reçoit l’industrie des sables bitumineux depuis quelques années. « Nos relations avec les acteurs locaux et les gouvernements sont clairement des domaines qui gagnent en importance », dit-elle. « Le dialogue qui englobe l'ensemble des perspectives et des opinions sur notre industrie s’est intensifié ; la sensibilisation est plus forte et nous ressentons le besoin de consulter davantage les communautés autochtones locales. » Siégeant parmi les 12 membres du comité exécutif de Syncrude, Mme Flynn a vu ses responsabilités s’étendre tant au sein de l’organisation qu’aux différents niveaux du gouvernement. Ses nouvelles fonctions incluent une grande implication dans les questions de durabilité et les relations avec les divers intervenants, ainsi qu'un engagement au sein de Syncrude et avec le gouvernement afin d'aborder les enjeux majeurs. Dans
organization and with all levels of government. She says her new role entails broad involvement with sustainability and stakeholder relations, as well as engagement across Syncrude and with government to address key issues. In her government outreach, Flynn has been working to address the infrastructure needs around the oil sands, including upgrades to Highway 69 to allow for housing development to progress. On the aboriginal side, she is developing a new, earlier engagement and consultation strategy for Syncrude’s proposed Mildred Lake mine extension project that will provide a replacement supply of bitumen for upgrading when its North mine approaches the end of its life. In order to carry out growing responsibilities, her team has been expanded and now includes more staff working on aboriginal relations files, a sustainability adviser, and additional communicators. Flynn has also been a board member of the Canadian Council on Aboriginal Business since 2005, a member of the Alberta government’s Athabasca Oil Sands Area Transportation Coordinating Committee and the vice-chair of the Oil Sands Developers Group since 2008 – three titles that are intimately tied to her work at Syncrude.
ses échanges avec le gouvernement, Mme Flynn s'efforce de traiter les besoins en infrastructure autour des sables bitumineux, notamment les travaux d'amélioration de la route 69 afin de pouvoir poursuivre la construction de groupes d'habitation. Du côté des autochtones, elle développe une nouvelle stratégie d'engagement et de consultation plus précoce avec ces groupes pour le projet d’expansion de la Mildred Lake Mine, qui permettra à Syncrude de remplacer ses réserves de bitume lorsque sa mine Nord arrivera en fin de vie. Afin d’assumer ces responsabilités supplémentaires, l'équipe de Mme Flynn a été élargie pour accueillir davantage de membres chargés des dossiers autochtones, un conseiller en développement durable et quelques agents de communication supplémentaires. Mme Flynn siège par ailleurs au conseil d’administration du Conseil canadien pour le commerce autochtone depuis 2005. Elle est également membre du Comité de coordination des transports pour la région des sables bitumineux de l’Athabasca, mis sur pied par le gouvernement d’Alberta, et vice-présidente de l'Oil Sands Developers Group (le groupe de développeurs des sables bitumineux) depuis 2008 – trois titres intimement liés à son travail à Syncrude.
By Antoine Dion-Ortega
Par Antoine Dion-Ortega
Early in his career, he realized the power of chemical thermodynamics in metallurgical engineering for process analysis, obtaining his doctorate in the subject at MIT, which was rare in the 1940s. Once out of school, he joined Quebec Iron and Titanium, helping them implement a new smelting process that had not worked well until his arrival. In 1958, he entered the consulting business in an era when the entire field of engineering was shifting from design based on what had been
GERRY HATCH
mique chimique en génie des métaux pour l’analyse des procédés, ce qui lui a valu de décrocher son doctorat au MIT, chose rare dans les années 1940. Une fois sorti de l'institut, il s’est joint à l’entreprise Québec Fer et Titane (QIT-Fer et Titane, anciennement appelée Quebec Iron and Titanium) et l'a aidé à mettre en œuvre une nouvelle méthode de fusion qui n’était pas au point avant son arrivée. En 1958, il a fait ses débuts dans le domaine des services-conseils, à une époque où tout le secteur du génie connaissait un changement profond de la conception fondée sur ce qui avait été fait auparavant à la conception basée sur les THE INNOVATOR sciences de l’ingénieur. L’INNOVATEUR Dans le secteur de la consultation, Gerry Gerry Hatch, fondateur de Hatch Hatch s’est entouré d’une Ltd., a joué un rôle majeur dans la équipe composée des rares transformation de la métallurgie extracpersonnes hautement qualifiées à tive en un secteur d’activité basé sur des l’époque qui savaient mettre en pratique techniques d’ingénierie de pointe qui, leurs connaissances des notions fondaaujourd’hui, font du Canada l’un des mentales pour résoudre les problèmes chefs de file mondiaux dans ce domaine. particuliers que leur soumettait chaque Dès le début de sa carrière, M. Hatch client. a réalisé la puissance de la thermodynaCourtesy of Hatch
Gerry Hatch, founder of Hatch Ltd., helped transform process metallurgy into the sophisticated engineering-sciencebased industry that it is today, and helped position Canada as a global leader.
August 2013 | 53
done before to design based on the engineering sciences. In consulting, Hatch surrounded himself with a team of exceptional, highly educated people who could apply their fundamental understanding to solve each client’s individual challenges. One client at a time, Hatch and his team developed revolutionary technologies, especially during the 1960s. Canadian mining companies had begun exploring internationally and needed new technologies for the different types of ore deposits they encountered. For example, when Falconbridge embarked on a project in the Dominican Republic, Hatch and his team worked closely with the company’s research engineers to develop shielded-arc smelting, which tripled furnace capacity. They also developed Hatch coolers, further improving efficiencies and reducing operating costs. “It is a widely used technology today that has been installed in well over 100 furnaces worldwide,” says Gord Irons, director of the Steel Research Centre at McMaster University. “Canadian companies benefitted from being Hatch clients in the early days and this certainly helped them become major global players,” he adds. “Gerry Hatch is a large part of Canada’s global reputation in metallurgical process engineering.” By Alexandra Lopez-Pacheco
TSAKHIA ELBEGDORJ THE OPPORTUNIST L’OPPORTUNISTE
Candidates campaigning on the renegotiation of the country’s stake in Rio Tinto’s Oyu Tolgoi copper mine fanned the flames. However, now that the race has ended with the re-election of President Tsakhia Elbegdorj, the nationalist sentiment and mistrust of foreign mining investment in the mineral rich nation may also have run its course. The rewriting of mining legislation seems to be a fact of life for miners today, and in Mongolia’s case, new rules were introduced in 2012 that would have significantly tightened foreign investment rules. But commodity prices began dropping and the country saw “a significant slowdown in foreign investment,” notes Peter Markey, China and Mongolia 54 | CIM Magazine | Vol. 8, No. 5
À l’approche des élections parlementaires qui ont eu lieu en Mongolie en juin 2012, la ferveur nationaliste à l’égard des ressources a redoublé et a été attisée par la campagne des candidats sur la renégociation des intérêts du pays dans la mine de cuivre d’Oyu Tolgoï de Rio Tinto. Cependant, maintenant que la course s’est achevée avec la réélection du président Tsakhia Elbegdorj, ce sentiment nationaliste et la méfiance envers les investissements miniers étrangers dans ce pays qui regorge de ressources se sont également essoufflés. Il semble que la réécriture de la législation minière fait partie du quotidien des mineurs aujourd’hui, et dans le cas de la Mongolie, les nouvelles règles instaurées en 2012 auraient considérablement renforcé celles régissant les investissements étrangers. Toutefois, le cours des produits de base a commencé à chuter et le pays a connu « un ralentissement marqué de l’investissement étranger », fait remarquer Peter Markey, responsable du secteur Mines et métaux en Chine et en Mongolie chez Ernst & Young. Selon lui, le parlement de la Mongolie a finalement fait marche arrière sur les changements les Courtesy of Asia Society
Resource nationalism fervour was burning hot in Mongolia in the run-up to a June 2012 parliamentary election.
Servant un seul client à la fois, M. Hatch et son équipe ont mis au point des technologies révolutionnaires, particulièrement dans les années 1960. Les sociétés minières canadiennes avaient commencé leurs travaux d’exploration sur la scène internationale et avaient besoin de nouvelles technologies pour les différents types de gisements de minerai qu’elles rencontraient. Par exemple, lorsque Falconbridge s’est lancée dans un projet en République dominicaine, Gerry Hatch et son équipe ont travaillé en étroite collaboration avec les ingénieurs de recherche de la société pour concevoir un procédé de fusion à l’arc avec protection qui triplait la capacité du four. Ils ont également mis au point les refroidisseurs Hatch pour la société, lesquels ont permis d’améliorer les rendements et de réduire les coûts d’exploitation. « Aujourd’hui, c’est une technologie largement utilisée qui a été installée dans plus de 100 fours à l’échelle mondiale », explique Gord Irons, directeur du centre de recherche appliquée sur l'acier de l’université McMaster. « Les sociétés canadiennes qui ont été clientes de Hatch ont énormément bénéficié de ses connaissances à leurs débuts, et cela leur a certainement valu de se hisser aux premiers rangs des acteurs mondiaux dans ce domaine », renchérit-il. La réputation mondiale du Canada en matière de génie des procédés métallurgiques est largement attribuable à Gerry Hatch. Par Alexandra Lopez-Pacheco
plus draconiens proposés, et Oyu Tolgoï n’a pratiquement pas été affectée. « Comme beaucoup de Mongols, M. Elbegdorj est d’avis que les richesses minières doivent profiter aux habitants du pays », fait-il remarquer. Or, comme le parti démocratique de M. Elbegdorj contrôle les trois unités constituantes du gouvernement, M. Markey prévoit que le sentiment nationaliste à l’égard des ressources cède peu à peu la place à la conclusion de marchés. « Tout bien considéré, M. Elbegdorj est conscient de l’importance de l’investissement étranger dans le pays. » Par Ian Ewing
When Detour Gold hit the market in mid-May with a bought deal that raised $153-million to help fund the start-up of its new mine, it was easy to criticize CEO and president Gerald Panneton for not THE having acted a week PATHFINDER earlier, when shares L’ÉCLAIREUR were trading higher.
Quand Detour Gold est arrivé sur le marché à la mi-mai avec une convention de prise ferme de 153 millions $ pour financer le lancement de sa nouvelle mine, le directeur général et président Gérald Panneton a été fortement critiqué pour n’avoir su prendre les devants une semaine plus tôt, alors que le cours des actions était plus élevé. « C’est important de pouvoir prendre du recul », explique Phil Russo, analyste financier dans le domaine des métaux précieux chez Raymond James à Toronto. Mais M. Russo fait remarquer que c’était la meilleure chose à faire. « Je crois qu’en fin de compte, il a pris la bonne décision. La société a atténué la menace qui planait sur son financement et à laquelle on pouvait attribuer le faible cours de ses actions, et elle est maintenant en bonne voie pour assurer la mise en service de la mine de Detour Lake. » Fort de 25 années d’expérience en exploration et en projets miniers au Canada et à l’étranger, notamment à la direction de sociétés comme Hunter Dickinson, Continental Minerals et Barrick Gold, M. Panneton a su tirer parti de ses acquis chez Detour depuis qu’il en a pris la direction il y a sept ans, ce qui lui a permis de choisir le bon chemin dans des temps difficiles. M. Russo fait remarquer que les personnes ayant investi dans les dernières parts de marché ont rapidement réalisé un bénéfice de 20 pour cent. « [Le cours des actions] a de nouveau baissé, mais Detour se projette sur le long terme, et je pense que les actionnaires ayant participé à ce marché ont payé le juste prix. » Il ajoute que d’après les derniers rapports, l’augmentation du rendement du broyeur de Detour Lake à 55 000 tonnes de minerai par jour est dans les temps : « Si la société n’avait pas fait [ce financement], elle se trouverait aujourd’hui dans une position difficile. »
Courtesy of Detour Gold
mining & metals leader for Ernst & Young. He says the Mongolian Parliament eventually backed down from the most draconian of the proposed changes, and Oyu Tolgoi has been essentially unaffected. “Like many Mongolians, Elbegdorj has really strong views that the mine’s wealth should benefit the people of the country,” says Markey. Now that Elbegdorj’s Democratic Party controls all three branches of government, however, Markey expects overblown resource nationalism to take a back seat to deal-making. “On balance, Elbegdorj has an awareness of the importance of foreign investment to the country.” By Ian Ewing
G E RA L D PA N N E TON
“Hindsight is a wonderful thing,” says Phil Russo, precious metals equity analyst with Raymond James in Toronto. But, he points out, it was the right thing to do. “I think it was a good decision in the end; they alleviated the financing overhang that arguably weighed on their share price, and they should now be positioned to successfully complete the commissioning of Detour Lake.” With 25 years in exploration and mining projects in Canada and abroad, including senior positions with such companies as Hunter Dickinson, Continental Minerals and Barrick Gold, Panneton has leveraged his experience at Detour since he took its helm seven years ago, enabling him to pick the right path in unpleasant circumstances. Russo points out that people who bought the latest deal actually made a quick 20 per cent. “[The share price] has come off again but Detour is a long-term story, so I think it’s a good price if you are a shareholder who participated in the deal.” He adds reports to date are that the ramp-up at the Detour Lake mill to 55,000 tonnes of ore per day is on schedule: “If they hadn’t done [the financing], things would CIM be very tough.” By Graham Chandler
Par Graham Chandler
ICM
August 2013 | 55
SOUTHERN EXPOSURE BY PIERRICK BLIN AND ANTOINE DION-ORTEGA
The Constancia mine, as its name suggests, is a critical part of Hudbay Minerals’ long-term plans. The Toronto-based company bought the concession from Norsemont in March 2011 and began construction last August. The project, located 4,300 metres above sea level in the Cuzco region of Peru, is the 85-year-old company’s first project abroad. Despite the heavy rains of the Peruvian Altiplano, construction work is well underway thanks to a management team that is ambitious as it is adaptable.
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| project profile
he extent of the Yauri-Andahuaylas copper belt, and the vast opportunities it offers for further exploration work, were the main reasons why Hudbay decided to settle in this rather remote, wet region. “We felt that the area had huge potential,” says Cashel Meagher, Hudbay’s vice-president for South America. The Norsemont property happened to lie in the middle of the 300-kilometre belt, right between GlencoreXstrata’s Las Bambas mine, northwest of the Apurimac region, and its Tintaya and Antapaccay operations, in the Cuzco region. “We felt that if we established ourselves in a mining belt, we could reproduce what Flin Flon had done for Hudbay in the past, by having several mines, even several generations of mines, over a long time,” Meagher adds. Since 1930, Hudbay has proven its ability to process volcanic massive sulphide (VMS) copper ore deposits in the Flin Flon greenstone belt of northern Manitoba. With Constancia though, Hudbay took on the challenge of porphyry copper as a means to diversify its portfolio while staying close enough to its field of expertise. “Porphyry deposits are a little bit like VMS deposits, since they are both sulphide-bearing minerals,” says Meagher. “They require the same type of milling.” Hudbay had money to spend in 2010 and was actively looking to invest in the right property. “We had over a billion dollars in cash and we wanted to go out and acquire and build something,” points out Meagher. The company was pursuing a project that would align with the Toronto time zone, and be located in an investmentfriendly, politically stable country. The Constancia project emerged as close to ideal. “Norsemont had its environmental impact assessment permit in December 2010, which was a major milestone, and we recognized that it was a project ready to move ahead,” he says. Hudbay acquired Norsemont three months later. A $750-million streaming agreement with Silver Wheaton ended up completing the business package. The royalty company has claim to all the silver Hudbay produces from its 777 mine in Manitoba, as well as from the Constancia and Pampacancha pits.
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Finding the right partners In order to reduce the potential risks arising from a lack of experience abroad, Hudbay has opted for an uncommon business strategy and arranged for an alliance with Peruvian company StraconGyM. “We have a sort of unique situation here,” says Meagher. “In the first two and a half years, they will do our civil earthworks, and then for the next two and a half years, our mining.” Based in Lima, most of the earthworks and mining expert’s operations are located in Peru. It boasts a workforce of 4,500 people. “Besides reducing the risks [of having no experience in Peru], it gives us more insurance on our capital cost because StraconGyM actually does mining, whereas when an engineering firm estimates these things, they usually underestimate them,” explains Meagher. “These guys actually have real experience with real dollars.” Besides the earthworks, StraconGyM is in charge of
The Constancia project sits 4,300 metres above sea level. The largely organic material of the bog at the site tends to get soaked with water, thus becoming too unstable to resist heavy tailings. In response, the construction team is stabilizing the material by compacting and retaining it behind a dam. All images Valérian Mazataud
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project profile | C O N S TA N C I A
Cashel Meagher (centre), Hudbay’s vice-president for South America, and Patrick Merrin (top), the company’s vice-president for technical services, monitor the evolution of the earthworks.
supplying some mining equipment and training the operators. “All of this is on a fee basis, and we jointly manage the program.” Once the five-year alliance ends, the labour force and key supervisors will become Hudbay employees. The remaining construction work has been handed over to EPCM contractor Ausenco. “The reason why we are using an EPCM is because our project down here is new to us,” says Meagher. “We are thus relying on people that have done these types of things before: Ausenco on the engineering and StraconGyM on the execution.”
The construction Preliminary work began a year ago, following the approval of a $1.5-billion investment by the board. The company plans to begin production in the second quarter of 2015, after a near three-year construction phase. Nearly 3,500 workers – 1,100 of them from neighbouring villages – were hired for the heavy work. The mine recently received the main components of the processing plant, as well as the first pieces of its mining fleet,
which will eventually include 18 Caterpillar 793F haul trucks, two Terex SK-L drills, three Hitachi EX5600-5 shovels and two Caterpillar D10T bulldozers. The delivery of the largest pieces of equipment will follow the completion of the main access road. “The idea,” explains Meagher, “is that in January, we begin our pre-strip, and for that we will need our drill, our front-end loaders, and a couple of trucks and shovels.” The construction of the processing plant is also well underway, as the company has decided to go with something “not too fancy,” according to Terry Linde, the project director. “Our primary crusher is a 60-inch-by-89-inch gyratory,” he explains. “From the stock pile, the ore will report directly in two lines to the concentrator. We’ve got two SAG mills and two ball mills, all of which are manufactured by FLSmidth. Our SAG mills are 36 feet in diameter and 24 feet long. Out of the SAG mills, the ore reports to the ball mills, which are 26 feet by 20 feet. Both the SAG mills and the ball mills are 16 megawatts.” The ore will then report to the flotation unit, provided by U.S.-based Orotech. The 82,000-tonne capacity plant will produce a concentrate between 27 and 29 per cent copper, with about eight per cent moisture, according to Meagher. The recovery rate is estimated at 91 per cent. Building the two power lines needed to run the 96megawatt project is a significant risk for Constancia. The first line has been awarded to Peruvian engineering company Abengoa, while the second is being built by the government to connect the neighbouring Tintaya mine to the grid. Given the limited control Hudbay has over scheduling, the project managers had to devise a backup plan in case the power is
PROJECT SPECS
MINERAL RESERVES* Proven Probable Total
Ore (M tonnes) 349 54
Cu (%) 0.37 0.24
Mo (g/t) 100 60
Ag (g/t) 3.29 2.98
Au (g/t) 0.043 0.035
403
0.35
96
3.25
0.042
CONSTRUCTION BUDGET: US$1.5 billion (est.) PLANT CAPACITY: 80,000 tpd INITIAL PRODUCTION: late 2014 CASH COST: US$0.92 per pound of copper
LIFE OF MINE: 16 years ANNUAL COPPER OUTPUT: 90,000 t FULL PRODUCTION: mid-2015 * as of August, 2011
The Chilloroya River will run through the giant culvert being installed along the main road between the plant and the tailings pond.
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C O N S TA N C I A
not connected by their March 2014 deadline. “If, for some reason, one of those two lines doesn’t meet that timeline, we can still commission the movement of the mills and the operation of the plant for inspection using generators until August,” says Meagher. “That way we have three to six months of contingency. What we can’t do is to start introducing ore and make the plant work.” Up to this point, the biggest challenge has been earthworks. The valleys upon which the 445-million-tonne tailings pond will be built are currently covered with bog that cannot support the tailings and their dam. Hudbay will have to remove the bog and store it behind a dam in order to have a stable, functioning tailings pond in the future. The job of stripping the bog has proven to be a bigger one than first thought. “We had estimated 80,000 cubic metres of unsuitable material, and we have encountered well over 300,000 cubic metres,” says Meagher. “So we had to change some of our plans on managing that area and the storage dam, which is key to the beginning of the construction of the tailings management facility.” The weather has added its own complications. Earthworks such as the building of dams are quite tricky in this region due the rainy season, which has grown steadily wetter. According to Meagher, the December precipitation has increased to 285 millimetres from 185 millimetres in the last five years.
Keeping an eye on the future The inevitable obstacles of mine development, however, have not distracted the company from its long-term ambitions. Stripping work on the mine’s main pit has not yet begun, but a second feasibility study, this time for the neighbouring Pampacancha pit, is underway. “One of the major selling points about this project was essentially the exploration upside,” says Meagher. “It is in the 26,500 hectares that came with the project, but also in the adjacent claims, where some juniors and majors are working. So we are building a database on all of the area, its geology and its mines, whereby we can start targeting, in the next few years, the area we would like to go to.” One the main hurdles to the expansion of the project was the tailings pond’s limited capacity. But Hudbay already has a mid-term plan to overcome that, which has to do with its work at Pampacancha. There, explains Meagher, “The plan is to mine as fast as we can. When it is completed, we will do studies to see if there is an opportunity to use it as another tailings base for us.” This would give Hudbay the ability to mine both the Constancia and any other potential pit for a much longer period of time than the 16 years contemplated in the current feasibility study. “We believe that we are in the middle of a major copper belt and we want to be what we call an early mover,” concludes Meagher. “We want to use that leverage to be able to get other satellite deposits that can feed the plant we are currently building. We are definitely here to stay.” CIM
| project profile
The blue tarps protect the earthworks from the heavy rains. Construction of the dam that will eventually store the bog materials has been delayed due to the rainy season.
Come rain or shine Raise the subject of weather with the members of the management team at Constancia and they will respond a humourless smile. Heavy rains that sweep across the high plains are a constant threat to the progress of the project’s earthworks, especially those that have not yet been compacted. “When you see a cloud coming, it is just like Wimbledon,” says Meagher. “Someone has got to get out there and pull a tarp over the field, and you have to wait. If you don’t, it washes away all of your work.” “From November till March, we get rain nearly every day, sometimes several times per day, so we have to plan for any earthworks that we have to do,” explains Linde. Managers first wanted to recover the time lost to rain delays by having night shifts. “But guess what, at night you can’t see the clouds coming,” says Meagher. “So we had to stop the major earthworks at nighttime. There is no doubt that the rain has put us behind schedule on the earthworks.” Undeterred, the team has found ways to adapt and prepare for the next stage of development. “We are reworking our execution strategies so that we are processing clays during the dry season and put it under tarps for placement of material during the wet [season],” explains Linde. “We also have a robust program for monitoring lightning storms.” This will be essential as progress on the construction of the processing plant will require cranes and crews working at height.
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Valérian Mazataud
projet en vedette | C O N S TA N C I A
PLEIN CAP VERS LE SUD PAR PIERRICK BLIN ET ANTOINE DION-ORTEGA
’étendue de la ceinture cuprifère de Yauri-Andahuaylas, ainsi que les vastes possibilités d’exploration qu’elle recèle, sont les principales raisons qui ont mené Hudbay à s’installer dans cette région pluvieuse et reculée. « Nous sentions que ce secteur avait un potentiel énorme », déclare Cashel Meagher, vice-président de Hudbay pour l’Amérique du Sud. La propriété de Norsemont se trouvait au cœur de cette ceinture de quelque 300 kilomètres de long, entre les mines de Las Bambas, au Nord-ouest de la région d’Apurimac, et celles de Tintaya et d’Antapaccay, dans la région de Cuzco – toutes trois propriétés de GlencoreXstrata. « En nous établissant au sein d’une ceinture minière, nous pensions pouvoir reproduire ce que Flin Flon avait fait pour Hudbay dans le passé, à savoir disposer de plusieurs mines, voire même de plusieurs générations de mines, sur une longue période ». Depuis 1930, Hudbay se consacre exclusivement au traitement de gisements cuprifères de sulfures massifs d’origine volcanique (SMV), caractéristiques de la ceinture de néphrite de Flin Flon, au nord du Manitoba. Avec Constancia, la minière s’attaque au porphyre cuprifère dans le but de diversifier son portefeuille tout en restant suffisamment proche de son domaine d’expertise. « Les gisements porphyriques sont similaires aux gisements de SMV puisqu’ils sont tous deux sulfurifères », explique M. Meagher. « Ils requièrent le même type de broyage. » Hudbay disposait de liquidités importantes en 2010 et cherchait activement à investir dans un projet prometteur, si possible dans une propriété se trouvant dans le même fuseau horaire que son siège de Toronto, et située dans un environnement
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politiquement stable et favorable aux investissements étrangers. Le projet Constancia semblait idéal. « Norsemont avait déjà obtenu les permis nécessaires après son étude d’impact environnemental en décembre 2010 », ajoute M. Meagher. « Ce projet était prêt à passer à l’étape suivante. » Hudbay acquérait Norsemont trois mois plus tard. L’octroi d’une avance en espèces de 750 millions de dollars par la société Silver Wheaton en contrepartie de la totalité de la production d’argent extrait par Hudbay à sa mine 777 au Manitoba, ainsi que celle de Constancia et Pampacancha au Pérou, achevait de compléter le montage financier.
Trouver les bons partenaires Afin de réduire les risques inhérents à son manque d’expérience à l’étranger, Hudbay a signé une alliance avec la société péruvienne StraconGyM. « Pendant les deux premières années et demie, les membres de leur équipe vont mener nos travaux de génie civil et de terrassement, puis durant les deux années et demie suivantes, nos opérations minières », explique M. Meagher. StraconGyM effectue la plupart de ses opérations spécialisées en matière d’exploitation minière et de travaux de terrassement au Pérou. « En plus de réduire les risques [résultant de notre manque d’expérience au Pérou], nous sommes rassurés quant à notre coût d’investissement, car StraconGyM exploite déjà des mines, alors qu’une société d’ingénierie aura généralement tendance à sous-estimer les coûts », poursuit-il. « Cette société a une véritable expérience dans ce domaine, avec des ressources concrètes». StraconGyM est également chargée de fournir certaines machines d’exploitation minière et
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d’assurer la formation des opérateurs, le tout évalué sur une base forfaitaire, avec une gestion commune du programme. À la fin des cinq années de cette alliance, la main-d’œuvre et les principaux superviseurs deviendront des employés à part entière de Hudbay. Le reste des travaux de construction est pris en charge par la société australienne Ausenco en vertu d’un contrat IAGC. « La raison pour laquelle nous avons opté pour un contrat IAGC est, encore une fois, que ce projet est nouveau pour nous », dit M. Meagher. « Nous misons ainsi sur des personnes qui ont fait ce genre de choses auparavant : Ausenco pour l’ingénierie et StraconGym pour l’exécution. »
La construction Les travaux préliminaires ont commencé il y a un an, suite à l’approbation par le conseil de direction d’un investissement de 1,5 milliard de dollars. La production devrait suivre au cours du second trimestre 2015, après environ trois ans de construction. Près de 3 500 travailleurs, parmi lesquels 1 100 viennent de deux villages voisins, ont été engagés pour les travaux. La mine a récemment reçu les principales composantes de son usine de traitement ainsi que les premiers éléments de sa flotte minière, qui comptera à terme 18 tombereaux Caterpillar 793F, deux foreuses Terex SK-L, trois pelles mécaniques Hitachi EX5600-5 et deux bulldozers Caterpillar D10T. La livraison des pièces les plus volumineuses devra attendre que soit achevée la route d’accès principale. « L’idée est de commencer le décapage préliminaire en janvier », explique M. Meagher. « Pour cela, nous aurons besoin de nos foreuses, de nos chargeuses frontales ainsi que de quelques tombereaux et pelles. » La construction de l’usine de traitement suit aussi son cours. La société a décidé de ne rien faire de « très sophistiqué ». « Notre principal concasseur, de type giratoire, mesure 60 par 89 pouces », explique Terry Linde, directeur du projet. « De la station de culbutage, le minerai sera convoyé sur deux lignes de traitement vers le concentrateur. Nous disposons de deux broyeurs SAG et deux broyeurs à boulets, tous deux fabriqués par FLSmidth. Ensuite, le minerai sera convoyé vers les broyeurs à boulets. Chacun des broyeurs requiert une alimentation de 16 mégawatts. » Le minerai sera finalement transporté vers l’unité de flottation, fabriquée par la société américaine Orotech. L’usine, qui a une capacité de 82 000 tonnes, produira un concentré de 27 % à 29 % de cuivre avec un taux d’humidité d’environ 8 %, selon M. Meagher. Le taux de recouvrement est estimé à 91 %. La construction de deux lignes électriques qui alimenteront le projet de 96 mégawatts (l’une confiée à la société péruvienne Abengoa, et l’autre au gouvernement péruvien pour relier la mine voisine de Tintaya au réseau national) représente un risque important pour Constancia. Étant donné le contrôle limité qu’a Hudbay sur la programmation des activités, les directeurs du projet ont dû prévoir un plan de secours dans l’éventualité où le courant ne serait pas disponible avant mars 2014. « Si, pour une raison quelconque, l’une de ces deux
| projet en vedette
lignes n’était pas achevée avant l’échéance, nous pourrons toujours procéder à l’inspection des broyeurs et l’exploitation de l’usine en utilisant les génératrices, et ce jusqu’en août », dit M. Meagher. « Ceci nous laisse trois à six mois de marge de manœuvre. Par contre, nous ne pourrons pas commencer à alimenter l’usine en minerai ni la mettre en service. » Mais jusqu’ici, les travaux de terrassement ont été les plus complexes. En effet, le fond de la vallée, qui deviendra éventuellement un bassin à résidus d’une capacité de 445 millions de tonnes, est recouvert de tourbière, une matière organique trop instable pour supporter un tel poids. Hudbay devra donc la retirer et l’entreposer derrière un barrage. Or, les travaux de décapage de la tourbière se révèlent être plus importants que prévu. « Nous avions estimé la quantité de matière à 80 000 mètres cubes, alors qu’il y en a en réalité 300 000 », explique M. Meagher. « Nous avons donc dû changer nos plans de gestion de la zone et du barrage de retenue, des éléments clés dans le calendrier de construction de l’installation de gestion des résidus. » La météo aussi s’en est mêlée. Les travaux de terrassement tels que la construction de barrages s’avèrent bien délicats dans la région à cause de la saison des pluies, de plus en plus fortes depuis quelques années.
Vision à long terme Les obstacles inévitables rencontrés lors du développement de la mine n’ont cependant pas détourné l’entreprise de ses ambitions à long terme. Le décapage du puits de mine principal n’avait pas encore commencé qu’une seconde étude de faisabilité pour le gisement voisin de Pampacancha était déjà entreprise. « L’un des arguments de vente majeurs de ce projet était son potentiel d’exploration », dit Meagher. « Cela concernait les 26 500 hectares qui venaient avec le projet, mais aussi toutes les concessions adjacentes, où travaillent quelques sociétés juniors et séniors. Nous sommes en train de créer une base de données consacrée à toute la région, autant à sa géologie qu’à ces mines, qui nous permettra de cibler, dans les années à venir, les zones où nous souhaiterions nous étendre. » L’un des obstacles majeurs à l’expansion du projet est la capacité limitée du bassin à résidus de Constancia. Hudbay a déjà un plan à moyen terme, en lien direct avec les travaux menés à Pampacancha. « Le plan est d’exploiter Pampacancha le plus vite possible », explique M. Meagher. « Une fois l’exploitation terminée, nous allons étudier la possibilité d’utiliser cette nouvelle fosse comme un second bassin à résidus. » Ceci permettrait à Hudbay d’exploiter Constancia, ainsi que tout autre gisement potentiel, pour une période bien plus longue que les 16 années envisagées dans l’étude de faisabilité actuelle. « Nous pensons nous trouver au milieu d’une ceinture cuprifère majeure et voulons être un précurseur dans la région », conclut Meagher. « Nous souhaitons utiliser ce levier pour pouvoir exploiter d’autres gisements satellites qui pourront alimenter l’usine que nous sommes en train de construire. Nous avons la ferme intention de rester. » ICM
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CALL 4 ABSTRACTS MINING 4 EVERYONE
GLOBAL DIMENSIONS OF MINING • Environment & Social Acceptance • NGOs - Partners in Development • Global Projects Update
INNOVATIONS • Green Mining/Mining Innovations Council • Innovation in Energy Minerals • Power Your Mine
HARNESSING THE POWER OF DIVERSITY • Diversity 101 • Expanding the Workforce • Resource Nationalism
CONSTRUCTION TO PRODUCTION
>
SUBMIT YOUR ABSTRACT B4 SEPTEMBER 30, 2013
Vancouver2014.cim.org A selection of papers presented at CIM Convention 2014 will be available online through cim.org’s Technical Paper Library. The CIM Convention is owned and operated by the Canadian Institute of Mining, Metallurgy and Petroleum
• Case Cas Studies • Assessing the Construction Project • Developing in Non-Mining Cultures
MANAGING OPERATIONS– MINE TO MILL • Mining • Processing • Integration for Optimization • Safety
TECHNOLOGY >>
Drilling and blasting
Value in pieces By Correy Baldwin
Courtesy of WipWare
Smart blasting is proving to be an essential tool for operations bent on improving their margins. A mill runs best when it is fed ore that has been properly fragmented, with particles of consistent size, within a range best suited to that plant. Improve fragmentation during blasting and mineral recovery rates will go up, while energy costs of crushing and grinding will be kept in check.
WipWare’s Reflex technology measures and quantifies the size distribution and shape measurements of ore on haulage trucks. Merging the data from all the truckloads provides the most statistically valid measurement of blast results.
“It’s far cheaper to use explosive energy to break rock than electrical energy in crushers and mills,” explains Gavin Yuill, the North American technical services manager for Orica. Blasting specialists are honing their technology – from the drilling of blast holes, and the use of explosives toelectronic detonators and post-blast image analysis. Controlling fragmentation can begin at the drilling stage through measurement-while-drilling (MWD) technology. MWD analyzes geological conditions as blast holes are drilled, creating a more accurate, detailed picture than traditional geological assessments. “MWD technologies have the potential to change how blasting is done, as we have immediate real data around the geology in the blast,” says Yuill. This detailed information allows companies to design more efficient blast sequences and choose the most effective explosives, as tying blasting energy to geological variations results in a more optimum blast.“It’s theoretically possible to custom load every hole, instead of using the same product across the whole bench,” says Yuill. Another evolving technique involves setting up an array of seismographs around a blast site and firing a single “signature” hole. “You take the trace that comes on the seismographs and measure the transmission of the energy coming through the rock,” explains Austin Powder general manager Keith Taylor. “There are now programs such as our QED program where you can enter that data and it will give you the optimum firing time for that specific rock, across for every hole. We have found out in many cases that we should shorten the row-to-row or hole-to-hole firing, from a more traditional 25 milliseconds down to 10 milliseconds or even less.”
Greater range and precision Explosive products have become much more sophisticated as well. “The biggest change in the last few years in explosives has been in emulsions,” explains Austin Powder general manager Keith Taylor. Emulsion explosives can be sensitized to detonate to produce an individualized blast strength, providing a versatility and control not available with conventional explosives. With the modern loading equipment, the emulsion can be programmed to different densities in the various parts of the hole. August 2013 | 63
Bigger blasts Ultra high-intensity blasting (UHIB) is another advance that could have major promise. “The UHIB philosophy is to pack a lot more energy into the rock volume compared to traditional blasting,” explains Marcin Ziemski, who was part of the research team at the University of Queensland that modeled the method. “It maximizes rock fracture through explosive energy, thus reducing the amount of work required of traditional crushing and grinding. However, he notes: “To be practically usable, it must alleviate high energy blast problems associated with overt flyrock, blast movement and vibration.” This involves layering a conventionally charged level of blasts on top of a deeper layer that features powder factors four to five times higher. The blast begins with the detonation of the top layer which fragments the overlying rock. Following a delay, the lower, high-intensity charges are detonated and the top layer, like a heavy blanket, buffers the explosion and limits flyrock. The researchers’ models of the approach found that, though it inevitably pushes up the cost of drilling and blasting, it could improve fragmentation and increase mill throughput between 25 per cent for hard ores to 40 per cent for softer ones. In February 2012, UHIB had its first field trial at Codelco’s Andina mine in Chile, where it was applied as part of a larger conventional blast. The test included tighter-spaced drill holes and a powder factor of 2.3 kilograms per bank cubic metre of rock on the lower layer – three times the amount of a conventional blast. According to the Orica team that conducted the test, excavation of the UHIB section was reported to be easier, produced more fines less than 25 millimetres, and generated lower vibration levels than the conventional blast. The first full 64 | CIM Magazine | Vol. 8, No. 5
Courtesy of Marcin Ziemski/AMSRI
Advances in emulsion explosives not only allow for greater detonation sensitivity, but greater explosive strength and range as well. Traditional explosives have a limited relative bulk strength (RBS) of between 100 and 170. New emulsion explosives greatly expand this range. Orica’s Flexigel explosive, for example, has a low RBS of 30, better suited for softer ground or sensitive areas, while their Vistis explosive can reach RBS 275, ideal for hard rock. But more sophisticated explosives require more sophisticated detonation. “Electronic detonators have to be the biggest advance in drill and blast planning,” says Yuill. Electronic systems are more reliable, have a large delay range, remote blasting capabilities and, most importantly, incredible accuracy. Electronic detonation can be programmed down to the thousandth of a second, something simply not possiblewith standard non-electric detonators. “This allows an engineer to design the interaction between shock waves,” explains Yuill, “leading to a much more efficient usage of the explosive energy.” According to Taylor, the industry has yet to use electronic detonation to its full potential: “On the whole we have yet to take advantage of what the increased timing accuracy allows us to do. In most cases, we’ve just timed the electronic detonators to the old firing times. That’s ok, but that’s not using the detonator to its optimum.”
Proponents of ultra-high intensity blasting argue reduced overall energy intensity in comminution and increased throughput will offset higher blasting costs.
scale UHIB blasts were carried out by Orica in May 2013 at Goldcorp’s Peñasquito mine in Mexico, where, according to Yuill, the same benefits were seen.
Improved feedback Blast design software is essential to create sequences and anticipate end results, though developing an ideal model is an ongoing process which relies on improving the information used by the software. “The models are good,” says WipWare president Tom Palangio,“but every operation has its own set of conditions, and there are so many variables that they can’t all be easily accommodated by a mathematical formula. There’s the hardness of the rock, the jointing in the rock, the explosive you’re using, the way the explosive couples to the rock – it’s the biggest jigsaw puzzle in the world.” A number of size distribution analysis systems have the ability to quantify and analyze blast results, and thus help in modifying prediction modelling. For example, WipWare’s Reflex and WipFrag technology measures and quantifies the size distribution and shape measurements of the fragments on haulage trucks, scoop trams and rail cars. “You can tell exactly what’s on the vehicle, and exactly where it came from. By taking that data from each vehicle and merging it all together, you can quantify the blast and get an exact idea of what the total blast was like.” The image analysis can accurately measure very fine particles, down to the micron range. Comparing the prediction models to the measured results of a blast, explains Palangio, allows you to fine-tune your blast design. “You can start to benchmark. As you change the variables – maybe you change the pattern or the explosives or the timing – you can track and see the cause and effect. This really opens up some doors, because not only do you start to improve things, you start to understand the variables better.” Still, presenting new technology can be a struggle. “The uptake is there, though the first question we still often get is not ‘what does it save us?’ but ‘what does it cost?’” says Taylor. There may be cost increases with the new technology, he says, but the end unit cost is cut dramatically, making for a quick return on investment. CIM
CIM community Distinguished Lecturer
Have wisdom, will travel CIM’s Distinguished Lecturer lineup stacked with industry expertise by Herb Mathisen The Distinguished Lecturer program, now in its 46th year, has returned with a new lineup of subject matter experts, eager to share their wisdom and experience with mining professionals and students around the world. This year’s program includes presentations on safety best practices, mineral resource and reserve estimation standards, leadership, technology standards in mining, the future of sustainable mining and the evolution of legislation relating to conflict minerals. Bruce Conard, consultant, Bruce R. Conard Consulting “The future of sustainability”
Hoping to lift complacent individuals out of their doldrums, Conard discusses some of the most serious challenges facing society – population growth, freshwater availability and climate change – and asserts that the future of sustainable mining relies on the sustainability of our global society. Conard insists the time to act is now. Companies, he says, will only be as healthy as the general population, and scientists and engineers need to work on solving the aforementioned global issues and others like clean energy supply in order to ensure the future of humanity. Gord Winkel, chair and industrial professor, University of Alberta “The journey to highperforming safety cultures in mining”
Celebrating the 10th anniversary of CIM’s first Distinguished Lecturer series on safety, Winkel highlights successful initiatives companies have taken over the last decade to improve their safety culture. He also provides an overview of the six foundational elements essential to the development of a successful safety culture, and discusses how a company’s tolerance of procedural shortcuts can undermine its safety program. Garth Kirkham, president, Kirkham Geosystems Ltd. “NI 43-101 mineral resources estimation and CIM best practices”
Chair of CIM’s Best Practices Committee, Kirkham discusses the changes to mineral resource and reserve estimation 66 | CIM Magazine | Vol. 8, No. 5
Le parcours du savoir Le groupe d’éminents conférenciers de l’ICM bénéficie d’une expertise industrielle hors pair par Herb Mathisen Aujourd’hui dans sa 46e année, le programme des éminents conférenciers nous revient avec de nouveaux experts impatients de partager leur savoir et leur expérience avec les professionnels et les étudiants du secteur minier du monde entier. Le programme de cette année comprend des présentations sur les meilleures pratiques en matière de sécurité, sur les normes relatives aux ressources en minerais et aux estimations des réserves, sur le leadership, sur les normes relatives aux technologies minières, sur l’avenir du développement minier durable et sur l’évolution de la loi quant aux minerais alimentant les conflits. Bruce Conard, expert-conseil chez Bruce R. Conard Consulting « L’avenir de la durabilité » Dans l’espoir de faire sortir les personnes complaisantes de leur marasme, M. Conard les interpelle en présentant quelques-uns des enjeux les plus graves auxquels est confrontée la société : la croissance démographique, la disponibilité de l’eau douce et le changement climatique. Il affirme que l’avenir du développement minier durable dépend de la durabilité de la société dans son ensemble. M. Conard insiste sur le fait qu’il faut agir dès maintenant. Selon lui, la santé des entreprises dépend de celle de la population, aussi les scientifiques et les ingénieurs doivent-ils s’atteler à résoudre les problèmes mondiaux susmentionnés ainsi que d’autres tels qu’un approvisionnement en énergie propre afin d’assurer l’avenir de l’humanité. Gord Winkel, directeur de département et professeur industriel à l’université de l’Alberta « La voie vers des cultures de la sûreté à haute performance dans le domaine de l’exploitation minière » Pour célébrer la 10e année de la première série d’éminents conférenciers consacrée à la sécurité de l’ICM, Winkel présente des initiatives couronnées de succès que les entreprises ont mis en place au cours des dix dernières années pour améliorer leur culture de la sûreté. Il offre également une vue d’ensemble des éléments fondateurs essentiels au développement d’une culture efficace de la sûreté, et explique comment la tolérance d’une entreprise envers les détournements procéduraux nuit à son programme de sûreté. Garth Kirkham, président, Kirkham Geosystems Ltd. « L’estimation des ressources minérales NI43-101 et les meilleures pratiques de l’ICM » M. Kirkham, président du Comité de l’ICM sur les meilleures pratiques, traite de l’évolution de l’estimation des ressources minérales et des réserves au cours des trente dernières années (de la transition de techniques principalement manuelles à des approches géostatiques complexes), ainsi que de l’introduction de la norme NI43-101 qui définit un ensemble de règles visant à contribuer à la production de rapports sur les ressources. Il passe en revue les meilleures pratiques associées aux ressources minérales et aux estimations des réserves, ainsi que les rôles et les responsabilités des personnes qualifiées.
CIM community
over the last 30 years – the move from mainly manual techniques to complex, geostatistical approaches, along with the introduction of NI 43-101 that set out a list of rules to guide the reporting of resources. He reviews best practices associated with mineral resource and reserve estimations along with the roles and responsibilities of Qualified Persons. Heather Ednie, managing director, Global Mining Standards and Guidelines Group, and Peter Wan, principal advisor of mining technology, Teck Metals “Technology standards for operational excellence”
Ednie and Wan discuss how having original equipment manufacturers, mining companies and suppliers collaborate to create global technology guidelines and standards provides opportunities for companies to learn from each other and to solve common problems. They present case studies from other industries’ successes in implementing such standards, and also propose strategies for mining companies to contribute to developing global mining standards, specifically in terms of operations, systems integration and safety. Rosie Steeves, president, Executive Works “Leadership matters. How to ensure quality leadership leads to individual, organization and industry success”
Quality leadership translates to happier, more engaged and productive employees, which makes an organization more profitable. Unfortunately, recent studies point to a systemic lack of adequate leadership, as companies often see leadership development as a one-time event rather than as an ongoing process. Steeves presents strategies and shares ways that individuals can develop into better leaders and improve their own companies. Chris Twigge-Molecey, senior advisor, Hatch “Conflict minerals: what are they and why should we care?”
CIM past-president Twigge-Molecey traces the history of conflict minerals that have partly funded civil wars and the arms trade in Africa. He discusses the evolution of reporting measures that allow consumers to make informed decisions when purchasing such minerals. The Responsible Jewellery Council and World Gold Council have both recently released their own conflict-free standards for diamonds, gold and platinum. Twigge-Molecey talks about what these developments mean for the mining industry. CIM To find out more about CIM’s distinguished lecturers and their presentations – in their own words visit cim.org. To book a distinguished lecturer, visit www.cim.org, call (514) 939-2710, or email dist_lecturer@cim.org.
Heather Ednie, directrice-générale du « Global Mining Standards and Guidelines Group », et Peter Wan, conseiller principal, technologie minière, Teck Metals « Des normes technologiques pour une excellence opérationnelle » D’après Mme Ednie et M. Wan, la collaboration des fabricants d’équipements d’origine, des sociétés minières et des fournisseurs au niveau de l’élaboration des directives et des normes technologiques internationales donne la possibilité aux entreprises d’apprendre les unes des autres et de résoudre d’importants problèmes communs. Ils présentent des études de cas sur la mise en œuvre réussie de normes semblables dans d’autres secteurs, et proposent également des stratégies pour que les sociétés minières contribuent à l’élaboration de normes internationales relatives à l’exploitation minière, particulièrement en termes d’opérations, d’intégration de systèmes et de sécurité. Rosie Steeves, présidente, Executive Works « L’importance du leadership, ou comment s’assurer que le leadership mène au succès sur les plans personnel, de l’organisation et du secteur » Un leadership de qualité se traduit par des employés plus satisfaits, plus engagés et plus productifs, ce qui renforce la rentabilité de l’entreprise. Malheureusement, des études récentes ont montré un manque systématique de leadership adéquat, car les entreprises considèrent souvent le développement du leadership comme un événement ponctuel et non comme un processus continu. Mme Steeves présente des stratégies et des méthodes pouvant être appliquées pour renforcer les capacités de dirigeants et ainsi améliorer les entreprises. Chris Twigge-Molecey, conseiller supérieur, Hatch « Les minerais stratégiques : de quoi s’agit-il ? Pourquoi s’en soucier ? » Dans sa présentation, M. Twigge-Molecey, ancien président de l’ICM, retrace l’histoire des minerais alimentant les conflits (les minerais stratégiques) qui ont en partie alimenté les guerres civiles et le trafic d’armes en Afrique. Il traite de l’évolution des mesures de signalement qui permettent aux consommateurs de prendre des décisions éclairées au moment de l’achat de tels minerais. Le Conseil pour les Pratiques Responsables en Bijouterie-Joaillerie (RJC - Responsible Jewellery Council) et le Conseil mondial de l’or (World Gold Council) ont récemment publié leurs normes anticonflits relatives aux diamants, à l’or et au platine. M. Twigge-Molecey évoque ce que cette évolution implique pour l’industrie minière. ICM
Pour de plus amples informations sur les éminents conférenciers de l’ICM et leur présentation, consultez www.cim.org. Pour solliciter la participation d’un éminent conférencier, consultez www.cim.org, appelez au (514) 939-2710 ou envoyez un courriel à dist_lecturer@cim.org. August 2013 | 67
CONFERENCE PLENARY Advanced Materials and Manufacturing for Extreme Environments Monday, October 28 Speakers include: Kevin G. Bowcutt, senior technical fellow, Chief scientist of Hypersonics, The Boeing Company Hypersonic flight: the final frontier of aeronautics; Tresa M. Pollock, ALCOA professor, University of California, Santa Barbara Materials in turbine engine environments; John Sarrao, associate director for theory, simulation, and computation, Los Alamos National Laboratory The co-design of experiment and theory at the mesoscale: a MaRIE perspective
@ REGISTER NOW!
BE SURE TO RESERVE YOUR TICKETS FOR ACTIVITIES AS QUANTITIES ARE LIMITED. REGISTER BEFORE SEPTEMBER 27 TO SAVE!
www.metsoc.org
THE PREMIER MATERIALS AND EXTRACTIVE METALLURGY CONFERENCE OF THE YEAR
COM TECHNICAL PROGRAM
HARD COPY PROCEEDINGS
Shaping the future with technological breakthroughs in metallurgy and materials
AVAILABLE FOR SALE BY METSOC OF CIM ONLY
This year’s COM technical program is integrated into the MS&T program that covers biomaterials, ceramic and glass materials, electronic and magnetic materials, energy issues, fundamentals and characterization, iron and steel, materials performance, materials – environment interactions, nanomaterials, processing, and product manufacturing. COM sessions appear in the grid below. SYMPOSIUM
MON, OCT 28 AM
TUE, OCT 29 PM
PLENARY ADVANCED MATERIALS, PROCESSES AND EVALUATION METHODS FOR AEROSPACE AND DEFENSE APPLICATIONS
ADVANCES IN HYDROELECTRIC TURBINE MANUFACTURING AND REPAIR
APPLIED NEUTRON SCATTERING IN ENGINEERING AND MATERIALS SCIENCE RESEARCH
MAGNESIUM TECHNOLOGY
RALPH LLOYD HARRIS MEMORIAL SYMPOSIUM
RARE EARTH ELEMENTS
AM
ALLOY DEVELOPMENT: SUPERALLOYS, SHAPE MEMORY ALLOYS, AND DESIGN FOR CORROSION PROTECTION I (10:40-12:00)
ALLOY DEVELOPMENT: SUPERALLOYS, SHAPE MEMORY ALLOYS, AND DESIGN FOR CORROSION PROTECTION II (14:00-15:20)
MULTIFUNCTIONAL MATERIALS (8:00-12:00)
RESIDUAL STRESSES (14:00-15:20)
MICROSTRUCTURE AND PROPERTIES (8:00-9:40)
NUMERICAL SIMULATION (15:40-17:20)
MANUFACTURING TECHNOLOGIES (10:00-12:00)
NOVEL TECHNOLOGIES (10:40-12:00)
ND IN MATERIALS SCIENCE AND TECHNOLOGY I (10:40-12:00)
ND IN MATERIALS SCIENCE AND TECHNOLOGY II (14:00-16:20)
SOLVENT EXTRACTION, ELECTROWINNING AND RELATED TECHNOLOGIES (14:00-17:20)
PRIMARY METALS PROCESSING (10:40-12:00)
NEW ALLOY AND MICROSTRUCTURE I (10:40-12:00)
OPENING AND PLENARY ADDRESS (11:00-12:00)
KEYNOTE (10:40-11:20)
SOLIDIFICATION & RESIDUAL STRESSES (8:00-9:40) DEFORMATION BEHAVIOR (10:20-12:00)
STRUCTURAL MATERIALS PERFORMANCE (14:00-16:00)
PROCESSING AND MANUFACTURING (8:00-9:20)
HEAT TREATMENT (14:00-16:00)
CAVITATION EROSION (8:00-12:00)
THU, OCT 31 AM
EMERGING ALLOY DEVELOPMENT: MATERIALS & DESIGN APPROACHES TECHNOLOGIES 4 AND INTERMETALLICS HIGH ENTROPY ALLOY (14:00-17:00) (8:00-9:40)
HYDROGEN STORAGE (14:00-16:00)
LEACHING MATERIALS CORROSION IN TECHNOLOGIES, HYDROMETALLURGICAL EQUIPMENT AND APPLICATIONS DESIGN (8:00-12:00) (14:00-16:00) FABRICATION AND MATERIALS CHARACTERIZATION I (8:00-12:00)
ADVANCED MANUFACTURING II (14:00-15:20)
FABRICATION AND CHARACTERIZATION II (10:40-12:00)
ALLOY DEVELOPMENT AND CASTING TECHNIQUES II (15:40-17:20)
NEW ALLOY AND MICROSTRUCTURE III (8:00-9:20 and 10:40-12:00)
THERMODYNAMICS AND PHASE TRANSFORMATION (14:00-17:20)
PROCESS MODELLING AND SIMULATIONS (14:00-17:20)
ALLOY DEVELOPMENT AND CASTING TECHNIQUES I (8:00-12:00)
ADVANCED MANUFACTURING I (14:00-16:00)
NEW ALLOY AND MICROSTRUCTURE II (14:00-15:20)
DEFORMATION I (8:00-12:00)
DEFORMATION II (14:00-16:00)
FORMING (15:40-17:20)
CORROSION AND BIO-APPLICATION (8:00-12:00)
SOLIDIFICATION AND WELDING (14:00-16:00)
TECHNOLOGY AND LEARNING / MINOR ELEMENTS (INCLUDING VACUUM METALLURGY) (8:00-12:00)
INJECTION PHENOMENA (14:00-16:00)
GENERAL METALLURGY (8:00-9:20 and 10:40-12:00)
RECYCLING / CLOSING REMARKS (14:00-16:00)
RECYCLING AND RARE EARTH MINERAL BENEFICIATION (8:00-12:00)
RARE EARTH HYDROMETALLURGY (14:00-16:00)
ADVANCED MATERIALS AND REE RECYCLING (8:00-9:20 and 10:40-12:00)
ADVANCED MATERIALS AND REE SEPARATION (14:00-17:20)
EXTRACTIVE METALLURGY OF LIGHT METALS (14:00-15:20) EXTRACTIVE METALLURGY OF BASE METALS (15:40-17:20) ADVANCED MATERIALS AND INTERNATIONAL WORKING GROUP (14:00-17:20)
INDUSTRY OVERVIEW AND RARE EARTH HYDROMETALLURGY (8:00-12:00)
TECHNOLOLGY TECHNOLOGY CROSSCROSS-POLLINATION I POLLINATION II (8:00-12:00) (14:00-16:00)
TECHNOLOGY CROSS-POLLINATION
WATER AND ENERGY IN MINERAL PROCESSING
WED, OCT 30 AM PM
PM
PLENARY I (8:00 – 10:20)
HYDROMETALLURGY: MATERIALS AND EQUIPMENT
LIGHT METALS FOR TRANSPORTATION
• RALPH LLOYD HARRIS MEMORIAL • HYDROMETALLURGY: MATERIALS & EQUIPMENT • RARE EARTH ELEMENTS
PLANT OPERATION AND CIRCUIT DESIGN I (8:00-12:00)
PLANT OPERATION AND CIRCUIT DESIGN II (14:00-17:20)
GRINDING AND ENERGY IN MINERAL PROCESSING I (8:00-12:00)
POSTER SESSION
WATER CHEMISTRY IN MINERAL PROCESSING I (14:00-17:20)
WATER CHEMISTRY IN MINERAL PROCESSING II (8:00-9:20) POSTER SESSIONS
POSTER SESSIONS
Schedule is subject to change; visit the website for the complete technical program and for the list of presenters.
www.metsoc.org
August 2013 | 69
COM SHORT COURSES A PRACTICAL INTRODUCTION TO MODERN COLD GAS DYNAMIC SPRAY (COLD SPRAY)
This half-day course helps attendees understand the science and practical benefits of Cold Gas Dynamic Spraying (cold spray) technology for protecting and enhancing surfaces of industrial products. MANAGING TECHNICAL AND FINANCIAL RISK IN A NEW TECHNOLOGY PROJECT ENVIRONMENT
This full-day course reviews the past performance of major mining and metallurgical projects, helping participants identify the root causes of risk in mining and metallurgical projects, and particularly those with a high component of new technologies. CORROSION PREVENTION AND MAINTENANCE RELIABILITY IN HYDROMETALLURGICAL PLANTS
This full-day course provides an overview of corrosion issues in hydrometallurgical operations. Topics include: corrosion fundamentals, corrosion prevention methods, case histories of failures of hydrometallurgical plant equipment and failure prevention through engineering specifications and maintenance practices. Courses are held on Sunday, prior to the start of the conference. More information on presenters and timing is available www.metsoc.org.
COM STUDENT PROGRAM Your career starts here The fun starts here
Take full advantage of being in direct contact with industry leaders to grow your network of contacts. As an added bonus, financial assistance is available to support your travel to the conference. You may also partially defray expenses by serving as session monitors. UNDERGRADUATE STUDENT POSTER CONTEST DISPLAY
All Material Advantage and MetSoc–CIM student members are eligible to enter the poster contest being held on Sunday. STUDENT NETWORKING MIXER
On Sunday, join in this relaxed, casual and fun atmosphere designed for students, material advantage faculty advisers and society volunteer leaders. Students are encouraged to wear their school colors. MUG DROP CONTEST
On Tuesday, mugs fabricated by students from ceramic raw materials are judged on aesthetics and breaking thresholds. Mugs are dropped from varying levels until the breaking threshold is reached. The mug with the highest successful drop distance wins! CERAMIC DISC GOLF CONTEST
Students create discs from ceramic or glass materials to meet certain specifications and the discs are then thrown into a regulation disc golf basket. STUDENT AWARDS CEREMONY
Come and congratulate the winners of this year’s contests. METSOC STUDENT MIXER
Industry representatives and students are invited to meet informally at the mixer. Students get the opportunity to network with industry leaders, so don’t forget your resume! PROFESSIONAL RECRUITMENT & CAREER PAVILION
Visit booths, talk to company reps and view job postings in the career pavilion while you explore the exhibit hall. This is your chance to make valuable contacts with potential employers.
=
s
SPECIAL METSOC EVENT FOR CANADIAN UNIVERSITY STUDENTS
BOOST YOUR RECRUITMENT EFFORTS BY EXHIBITING AT THE PROFESSIONAL RECRUITMENT & CAREER PAVILION
Contact Brigitte Farah at bfarah@cim.org for further details. 70 | CIM Magazine | Vol. 8, No. 5
www.metsoc.org
COM INDUSTRIAL TOURS Three industrial tours are planned in conjunction with the conference. All are limited in capacity, so register early.
National Research Council of Canada’s Aerospace Manufacturing Hydro-Québec’s Research Institute (IREQ) McGill Metals Processing Centre (MMPC)
EXHIBIT AT
COM SOCIAL PROGRAM … MORE THAN JUST A TECHNICAL CONFERENCE
REACH THE MOST COMPREHENSIVE GROUP OF DECISION-MAKERS
INVOLVED IN MATERIALS SCIENCE AND ENGINEERING TECHNOLOGIES AT THE MS&T TRADE SHOW.
MS&T WELCOME RECEPTION
On Sunday, network with your colleagues, meet new people and learn about the exciting membership offerings of the organizing societies. METSOC ANNUAL GENERAL MEETING & AWARDS BANQUET
MetSoc honours its outstanding members by presenting the Society Awards on Monday evening and the inauguration of Priti Wanjara as president of the society. METSOC HYDROMETALLURGY LUNCHEON
On Tuesday, the Hydrometallurgy Section of MetSoc holds its Annual General Meeting and presents the Hydrometallurgy scholarships and the 2013 Gordon Ritcey Award. RALPH HARRIS SYMPOSIUM BOX LUNCH
The Non-Ferrous Pyrometallurgy Committee hosts a box lunch featuring guest speaker Ernest Mast, vice-president of operations for New Gold Inc., who discusses ‘’Improvements through mentoring, lessons from Ralph Harris.’’ DR. RAM RAO MEMORIAL LUNCH
A lunch is held in memory of the achievements of the late Ram Rao of McGill University. By invitation only. RALPH HARRIS CHILI NIGHT AT MCGILL UNIVERSITY
This will be a great opportunity for people to raise a glass to the late professor Harris, share some personal moments with others and connect with those whom he touched. A trust fund supporting those affected by DiGeorge Syndrome will be in place. Visit www.metsoc.org for additional activities.
%
94 % 83
150 >1,755
of attendees spend more than one hour at the exhibition* of attendees have significant purchasing power*
exhibitors presenters
3,300 attendees Contact Brigitte Farah to exhibit
bfarah@cim.org *Statistical data from MS&T 2012 Conference Survey
www.metsoc.org
August 2013 | 71
TECHNICAL ABSTRACTS
CIM
journal Excerpts taken from abstracts in CIM Journal, Vol. 4, No. 3. To subscribe, to submit a paper or to be a peer reviewer—www.cim.org
Current status of the chemistry of gold flotation in industry R. Kappes, C. Fortin and R. Dunne, Newmont Mining Corporation, Englewood, Colorado, USA
ABSTRACT This paper reviews current gold flotation practice and research advancements and discusses how these applications tie in with the current understanding of gold flotation chemistry. Survey results from worldwide gold flotation operations are analyzed. Potential future areas of gold flotation research are highlighted.
RÉSUMÉ Le présent article analyse les pratiques actuelles de flottation de l’or et les progrès de la recherche; on y discute aussi les liens entre ces applications et la compréhension actuelle de la chimie de la flottation de l’or. Les résultats d’un sondage effectué auprès d’installations de flottation de l’or à travers le monde sont analysés. Des secteurs potentiels de recherche future sur la flottation de l’or sont soulignés.
Goldex, the GRG jewel F. Robichaud and G. Belzil, Agnico-Eagle Mines Ltd., Goldex Division, Val-d’Or, Quebec, Canada; and M. Fullam, FLSmidth Knelson, Langley, British Columbia, Canada
ABSTRACT This paper presents results of gravity audits and the development of a model linking gravity and overall gold recovery, and outlines improvements made to increase gravity performance and to reduce operating costs.
RÉSUMÉ Cet article présente les résultats d’audits et du développement d’un modèle reliant le circuit de gravité et la récupération totale de l’or; il souligne des améliorations effectuées pour augmenter le rendement du circuit de gravité et réduire les coûts d’exploitation.
Mineralogy and predictive metallurgy of major types of gold ores J. Zhou, Joe Zhou Mineralogy Ltd.
ABSTRACT This paper summarizes the bulk mineralogy and gold deportment in some major types of gold ore and discusses the potential impact of gold deportment on gold metallurgy.
RÉSUMÉ Cet article résume la minéralogie en vrac et le comportement de l’or dans plusieurs principaux types de minerais aurifères; il traite aussi de l’impact potentiel du comportement de l’or sur la métallurgie de l’or.
RESIDING OUTSIDE OF NORTH AMERICA? THE CIM CYBER MEMBERSHIP IS FOR YOU. Stay connected to the Canadian mining, metals and energy industry and its esteemed professionals through the CIM Cyber Membership. Take advantage of the Institute’s wide array of online resources – anywhere, anytime. +200 corporate members t +14,000 members t +35 branches t 10 technical societies t 1 dynamic and influential community
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Together, the Future is in Our Hands.
72 | CIM Magazine | Vol. 8, No. 5
professional directory | ad index UPCOMING EVENTS MINING A N D M E TA L S
PERUMIN: 31st Mining Convention September 16-20 | Arequipa, Chile www.convencionminera.com/perumin31
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ENERGY
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Heap Leach 2013 September 22-25 | Vancouver, British Columbia www.heapleachconference.com
OIL, GAS AND CHEMICALS
Renewable Energy and Mining Summit September 25-26 | Toronto, Ontario www.renewablesandmining.com World Gold 2013 September 26-29 | Brisbane, Australia www.ausimm.com.au/worldgold2013 MEMO 2013 Maintenance Engineering/Mine Operators’ Conference Colloque sur l’ingénierie de maintenance et l’exploitation minière September 29-October 2 | Kamloops, British Columbia www.memo2013.cim.org International Mine Rescue Body Conference October 5-10 | Niagara Falls, Ontario www.imrb2013.ca 3rd Annual Symposium on Safety in Mining October 20-22 | Toronto, Ontario safety.cim.org Exploration, Resources and Mining Geology 2013 Conference October 21-22 | Cardiff, United Kingdom www.ermg2013.com COM 2013 Conference of Metallurgists October 27-31 | Montreal, Quebec web.cim.org/com2013 Congrès de l’Association de l’exploration minière du Québec (AEMQ) 11-14 novembre | Québec, Québec www.congresaemq.ca/fr/accueil Québec Mines 2013 11-14 novembre | Québec, Québec quebecmines.mrn.gouv.qc.ca
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B.I.D. Canada Ltd. BDP Industries Boart Longyear Canadian Natural Resources Ltd. Goldcorp Inc. HLS Hard-Line Solutions Inc. Hatch L&H Industrial, Inc. Motion Industries Polydeck Screen Corporation Redpath Group Snowden Stantec Valard Construction Limited Professional Directory BBA Inc.
IN THE NEXT ISSUE
August 2013 | 73
Project Oilsand: an atomic answer to Alberta’s oil sands by Aaron Fitzpatrick
I
74 | CIM Magazine | Vol. 8, No. 5
Courtesy of U.S. Patent and Trademark Office
n the late 1950s, Dr. Imperial Oil owned Manley Natland, a the land proposed for the passionate, lifelong project. Backed by the geologist working for the U.S. Atomic Energy ComRichfield Oil Corpomission, which had been ration, hatched a gonzo looking for projects that idea to harness the power promoted the peaceful of a nuclear explosion for use of nuclear energy, it the benefit of bitumen approached Alberta Preextraction in Alberta’s oil mier Ernest C. Manning sands. He proposed a in June 1958. He enthusiplan to plant an atomic astically appointed a combomb deep below the oil mittee of high-level sands, set it off and start provincial bureaucrats to pumping the oil freed up oversee the proposal, by the intense heat of the including Alberta’s Ecoexplosion. nomic Affairs and Mines At the time, excavaand Minerals ministers. tion of the Alberta oil Despite efforts to sands was moving at a downplay the risk of the measured pace. Bitumen Illustration from Manley Natland’s patented “Process for Recovering Petroleum Utilizing a project, the plan to detoextraction was in its early Nuclear Explosion.” nate the bomb in an isodays; people thought tralated area sparked ditional mining could recover only about five per cent of all genuine fear. The town of Chard, with its 12 residents, was extractable oil. In situ methods in the oil sands were still just 10 kilometres northwest of the site. The plan for a test unproven, with the concept of steam-assisted extraction con- explosion was approved by both Alberta’s technical committee sidered a radical and costly concept to apply. and the Federal Mines Department in 1959, but in the meanIn the vaporizing power of a nuclear explosion, however, time the growing tension of the Cold War dampened the Natland saw the potential for a cleaner, safer and more eco- enthusiasm for nuclear explosions of any kind. In the midst nomic bitumen extraction method. He spoke persuasively of his of a rapidly changing political climate, planning for the det“eureka” moment: sitting in a desert in Saudi Arabia, watching onation of U.S.-owned nuclear weapons under Canadian soil the setting sun crest the horizon, “sinking” its nuclear energy proved too controversial; the Nuclear Non-Proliferation deep underground. The image proved impossible to shake. Treaties of the 1960s were the scheme’s ultimate undoing. Natland’s pilot plan provided for a single nine-kiloton (KT) Vestiges of the plan linger, however. Natland filed a test explosion (Hiroshima and Nagasaki are estimated to have patent on January 3, 1958 – not officially approved until been 15KT and 21KT, respectively) to be detonated six metres October 26, 1965 – which called not for the use of a nuclear below the Beaverhill Lake Limestone layer – 372 metres under- bomb but instead of a nuclear reactor. The concept was to ground – at a well site in Pony Creek, near the town of Chard, involve “nuclear reactors which are operational below the roughly 100 kilometres southeast of Fort McMurray. Natland surface of the earth,” with the reactors providing heatestimated the explosion would generate nine trillion calories of generative support to the extraction systems we are accusheat, which would vaporize the rock and create a cavernous tomed to today. Recently, Toshiba Corporation has been underground well, with the bitumen superheated to a liquid developing its line of “4S” nuclear reactors – “Super Safe, slurry – all the easier to be extracted through traditional means. Small and Simple” – as a potential means to power steam Dubbed “Project Oilsand,” Natland proposed detonating multi- extraction in the oil sands. ple bombs along an oil sands formation, “thus establishing across And so, while Natland’s ambitious plan was eventually the entire horizon of the formation a multiplicity of heated areas, buried, the decades-old atomic approach to bitumen extracthereby stripping the petroleum from the entire formation.” tion may yet prove its worth to Alberta’s oil patch. CIM
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