CIM Magazine September/October 2009

MINING

SAFELY

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CONTENTS

CIM MAGAZINE | SEPTEMBER/OCTOBER 2009 | SEPTEMBRE/OCTOBRE 2009

18

15

NEWS 11

Power from within the earth Geothermal energy promises to be a cleaner energy source for oil sands

by P. Caulfield

13

15

Giving back to secure a strong future Queen’s University receives a historic donation from a distinguished alumnus by M. Paduada New blood, new money A small company with big plans represents the future of the oil sands industry

by P. Caulfield

16

Growth is in the cards Already in the midst of one very large expansion, Shell Canada is planning another

by P. Caulfield

18

Change is in the air Syncrude Canada has its eye on the sky with two environmental initiatives

by P. Caulfield

20

Fostering responsibility The Centre of Excellence will raise the game on corporate social responsibility

by H. Ednie

UPFRONT 24

Balancing the flows An examination of Athabasca’s

28

Unconventionally unconventional Nexen Inc.

Water Management Framework by D. Zlotnikov

32

36

innovates to improve SAGD yields and cut production costs at Long Lake by D. Zlotnikov Practising what we preach CIM treats the current downturn as an opportunity to do its own bidding and hire students by M. Kerawala A fine balance Don Thompson discusses his efforts to set the record straight on the oil sands debate

by M. Paduada

4 | CIM Magazine | Vol. 4, No. 6

28

COLUMNS 71 72 73 74 76 78 80 82 83 84 86 88 90

Supply Side by J. Baird MAC Economic Commentary by P. Stothart First Nations by J.C. Reyes HR Outlook by J.P. Chabot Eye on Business by R.G. Powers & A.E. Derksen Student Life by R. Veitch Engineering Exchange by M. Eisner Standards by E. Sides Safety by R. Bergen Canadians Abroad by R. Andrews Innovation by M. Kerawala & G. Winkel Parlons en par L. Laverdure Mining Lore by R. Bergen

CIM NEWS 93

COAL AND OIL SANDS

39

95

CHARBON ET SABLES BITUMINEUX 39 46 53

94

by C. West

Going strong at 122 The Mining Society of

97

Supporting science and young scientists A student award sustains knowledge-

Dark matter, bright future New economic and demographic realities

Nova Scotia holds its 122nd AGM by F. Sigut

are reshaping Canada’s coal industry by R. Bergen The road ahead Canada’s oil sands industry strides ahead into a confident future by P. Caulfield Innovations in tailings management The oil sands industry is moving towards reducing water use and advancing reclamation time

98

Part of the “green” plan How suppliers help the coal and oil sands

99

industries to address environmental concerns by M. Sabourin 65

Matière noire à avenir brillant De nouvelles réalités économiques

67

L’avenir de notre industrie L’industrie canadienne des sables

The CIM Walkers team raises over $15,000 to support breast cancer research by H. Ednie Fundraising on the fairway CIM Crowsnest Branch holds its annual golf tournament and scholarship fundraiser by C. Ryan Active in Fort McMurray CIM’s Fort McMurray Branch is still thriving after 30 years

96

by M. Eisner

58

CIM steps up in the fight against cancer

100

et démographiques redéfinissent l’industrie canadienne du charbon

sharing in geological sciences by R. Pillo Parley in Prince George The CIM North Central BC Branch AGM features presentations and charity fundraising by G. Zervas From business to pleasure CIM Northern Gateway Branch works hard and plays hard by R. Slack Keeping the flame burning The winner of the CIM Coal Award fuels neighbourly spirit by R. Pillo

HISTORY

bitumineux file vers l’avenir avec confiance

102 105

Porphyry deposits (Part 1) by R.J. Cathro The historical mines of Almadén

by O.P Riart, L.F.M. Martínez, P.K. Echevarría & E.O. García

46

TECHNICAL SECTION 108

This month’s contents

IN EVERY ISSUE 6 8 10 92 101 112 113

Editor’s Letter President’s Notes / Mot du président Letters Welcoming new members Calendar Bookshop Professional Directory

September/October 2009 | 5

editor’s letter Giants that do not sleep ach issue of CIM Magazine begins as a blank slate, with only the theme that has been predetermined. As an editor, I derive great satisfaction from witnessing the metamorphosis of what is simply a conceptual direction — a few words on a page — into the final product, which is a compilation of articles and photos that capture that topic and pertinent industry news at that particular point in time. The process is pretty exciting because, even though we subsequently develop a specific lineup for each issue, we can never really anticipate the precise unfolding of each article, and hence the final product

E

(the magazine) as a whole.

This September/October issue serves as a great illustration of this creative process. Already one of the constants on the annual editorial roster, the Coal and Oil Sands issue is also one of our most anticipated. Although the theme may be unwavering, the nature of the content is anything but. In the 12 months since our last Coal and Oil Sands issue, the face of both of these mammoth industries has changed considerably as they have been forced to adapt to the realities of challenging economic times.

What we discovered is that notwithstanding the fact that some projects have been put on hold and economic and operational adjustments have needed to be made, these two giant sectors have certainly not been sleeping.

In spite of economic constraints, both industries have maintained unwavering commitments to R&D, technological innovation and environmental excellence.

They have been supported in their efforts by a plethora of suppliers, industry associations and academic institutions. Whether it is research into clean energy sources or improved tailings management, hard economic times did not soften the industry’s resolve in the area of best practices.

We hope that you are as inspired as we were by these articles, as well as by the optimism regarding an anticipated recovery in the coming months that is expressed by many.

Finally, thanks to all of the readers who took the time to send an email in response to the last issue. Your feedback, good wishes and suggestions were greatly appreciated. Once again, I invite you to weigh in, and please keep sending us your story ideas and become part of the creative process that helps to shape the editorial in future issues.

Regards,

Editor-in-chief Angela Gordon editor@cim.org Section Editors News, Upfront and Features: Angela Gordon agordon@cim.org Columns and CIM News: Joan Tomiuk jtomiuk@cim.org Andrea Nichiporuk anichiporuk@cim.org Histories and Technical Section: Minaz Kerawala mkerawala@cim.org Technical Editor Joan Tomiuk Publisher CIM Contributors Richard Andrews, Jon Baird, Ryan Bergen, Louise Blais-Leroux, R.J. Cathro, Peter Caulfield, Jean Pierre Chabot, Andrew E. Derksen, P. Kindelán Echevarría, Heather Ednie, Marlene Eisner, E. Orche García, Fathi Habashi, Louise Laverdure, L.F. Mazadiego Martínez, Mike Paduada, Robbie Pillo, R. Greg Powers, Juan Carlos Reyes, O. Puche Riart, Chris Ryan, Michelle Sabourin, Edmund Sides, Florence Sigut, Roy Slack, Paul Stothart, Ryan Veitch, Christian West, Gord Winkel, George Zervas, Dan Zlotnikov Published 8 times a year by CIM 855 - 3400 de Maisonneuve Blvd. West Montreal, QC, H3Z 3B8 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($150.00); Non-members (Canada), $168.00/yr (GST included; Quebec residents add $12.60 PST; NB, NF and NS residents add $20.80 HST); U.S. and other countries, US$180.00/yr; Single copies, $25.00.

Advertising Sales Dovetail Communications Inc. 30 East Beaver Creek Rd., Ste. 202 Richmond Hill, Ontario L4B 1J2 Tel.: 905.886.6640; Fax: 905.886.6615 www.dvtail.com National Account Executives 905.886.6641 Joe Crofts jcrofts@dvtail.com ext. 310 Janet Jeffery jjeffery@dvtail.com ext. 329

This month’s cover Haul trucks ascending from Natal West and Elk Pit Photo courtesy of Teck Coal Layout and design by Clò Communications.

Angela Gordon Editor-in-chief

Copyright©2009. All rights reserved.

ISSN 1718-4177. Publications Mail No. 09786.

Postage paid at CPA Saint-Laurent, QC. Dépôt légal: Bibliothèque nationale du Québec.

The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.

Send your feedback and suggestions to

editor@cim.org 6 | CIM Magazine | Vol. 4, No. 6

Printed in Canada

president’s notes Strength in numbers The importance of the coal and oil sands industries to Canada’s future prosperity cannot be overstated. Their economic significance can only increase with the decline of the automotive and other manufacturing sectors. Furthermore, industry insiders believe that China’s escalating appetite for iron ore and metallurgical coal will make the kind of coal mined in western Canada a scarce commodity.

While the oil sands hold the promise of energy security for North America, their development is not without its challenges. Innovation will be imperative if we are to tap this vast resource responsibly and efficiently. That’s where I believe CIM and its members can make a big difference. Already, various associations with strong links to CIM are charting the course collaboratively with industry, government and academia. The Surface Mining Association for Research and Technology (SMART), under Gord Winkel’s leadership, should be acknowledged for the work they are doing in sharing best practices and knowledge in large-scale open pit mining.

Similarly, the Canada Mining Innovation Council, with its president, Engin Özberk, is working to make our mining industry more competitive and responsible through excellence in mining innovation.

There are several items on CIM’s agenda in the coming months. The revision of our by-laws to comply with pending legislation for non-profit societies is expected to be tabled

before the membership later this year.

The review of National Instrument 43101 by the Canadian Securities Administrators is underway, and we are ensuring that CIM provides the appropriate input.

On the corporate social responsibility (CSR) front, multiple stakeholders are rallying around the Government of Canada’s strategy to deliver on the CSR roundtable recommendations. A cornerstone of the strategy is the development of a Centre of Excellence, in which CIM has been asked to play a pivotal role.

On another note, CIM’s past, present and incoming presidents will aim to visit as many CIM branches as possible throughout the year. The branches represent the industry’s grassroots, and we look forward to hearing about your plans and needs. Please inform us about your upcoming meetings so we can plan ahead to be there.

Michael J. Allan CIM President

L’union fait la force Il serait difficile d’exagérer l’importance des industries du charbon et des sables bitumineux pour la prospérité future du Canada. Leur importance économique ne peut qu’augmenter avec le déclin du secteur de l’automobile et des autres secteurs manufacturiers. De plus, les initiés de l’industrie croient que l’appétit croissant de la Chine pour le minerai de fer et le charbon métallurgique fera du type de charbon exploité dans l’Ouest du Canada un bien difficile à trouver.

Bien que les sables bitumineux détiennent la promesse d’une sécurité énergétique pour l’Amérique du Nord, leur développement comporte de nombreux défis. Il sera impératif d’innover si nous voulons tirer parti de cette vaste ressource de manière responsable et efficace. C’est là où je crois que l’ICM et ses membres peuvent faire une grande différence.

Déjà, diverses associations ayant de forts liens avec l’ICM tracent la voie en collaborant avec l’industrie, le gouvernement et le monde universitaire. La Surface Mining Association for Research and Technology (SMART), dirigée par Gord Winkel, devrait être reconnue pour le travail effectué dans le partage des meilleures pratiques et des connaissances dans les grandes mines à ciel ouvert. De même, le Conseil canadien de l’innovation minière (CCIM) et son président Engin Özberk travaillent à rendre notre industrie minière plus compétitive et responsable par l’excellence en innovation minière.

8 | CIM Magazine | Vol. 4, No. 6

L’agenda de l’ICM est bien rempli pour les prochains mois. La révision de nos règlements pour se conformer à la législation en instance visant les sociétés à but non lucratif devrait être soumise aux membres plus tard cette année. La révision de la Norme canadienne NI 43-101 par les Autorités canadiennes en valeurs mobilières est en cours et nous nous assurons que l’ICM fournit les intrants appropriés.

Du côté de la Responsabilité sociale des entreprises (RSE), de nombreux intervenants se rallient autour de la stratégie du Gouvernement du Canada de mettre en œuvre les recommandations de la table ronde sur la RSE. Une pierre angulaire de la stratégie est le développement d’un Centre d’excellence, dans lequel l’ICM a été mandaté pour jouer un rôle clé.

Sur un autre sujet, les anciens présidents, le président actuel et les présidents élus visent à visiter autant de sections de l’ICM que possible durant l’année. Les sections représentent la base de l’industrie et nous avons hâte d’entendre parler de vos plans et de vos besoins. Aviseznous de vos prochaines rencontres afin que nous puissions planifier d’y assister.

Michael J. Allan Président de l’ICM

letters Northern exposure

CIM Magazine goes back to school

Hi Angela, I want to thank you again for the offer of having Alexis Minerals highlighted in the CIM Magazine (May 2009, pp.

67-70). I have a copy now and it looks great! And, I have mentioned it to shareholders who have recently called, as having the article in your magazine certainly enhances the credibility of the company.

Again, I appreciate the article and the exposure it created.

Hopefully a year from now you may want to update how Alexis has grown even more. Thanks again.

I recently joined the faculty at Queen’s University as the Kinross Professor in Mining and Sustainability. I teach Occupational Health and Safety in Mining Practice with Professor John Peacey and an introductory course in mining and mineral processing (second year course — engineers of all disciplines have a common first year).

I’d like to introduce my students to the profession and the industry by making membership in CIM mandatory — could you refer me to the person who might make that happen? As well, I’d like to give them copies of your August issue (very well-crafted) and build an assignment around it.

There are 35 students in the second year… I’d be pleased to pay for the membership fees and the issue.

Finally, in your editorial you requested ideas for topics in future editions. Here are a few: public policy and mining engineers; interview with the new national chief of the AFN, Shawn Atleo — he is an amazing person (http:// www.queensu.ca/sps/events/first_nations/2009/video/shawn _atleo.php). You could transcribe the interview and place it in a future issue or I can write an article on it. He would also be a great speaker for next year’s CIM Conference in Vancouver.

I’ve just re-joined CIM recently and I agree with your editorial — much like Newfoundlanders are a tight community, so is the mining community in Canada — small, intimate, good-hearted and proud.

I made a small detour in my career 30 years ago and it is good to be back. It is also nice to know some things have improved — the CIM Magazine for one.

Best regards, Bruce Barch Vice-President, Investor and Corporate Affairs Alexis Minerals Corporation Toronto, Ontario

Cheers, Vic Pakalnis, P.Eng., MBA, M.Eng. Professor Kinross Professorship in Mining and Sustainability Queen’s University, Kingston, Ontario Hi Vic, Thanks so very much for the positive feedback, it is greatly appreciated. Regarding membership — actually student memberships are now FREE of charge... The person who coordinates it can be contacted at lfoley@cim.org.

As for the magazines, it would be our pleasure to send you 35 complimentary copies of the August issue. I am thrilled that you want to build an assignment around it. I’d love to hear the details and the feedback afterwards, if you have the opportunity.

Finally, thanks very much for the story leads… I would love to discuss them further with you and would really welcome your offer to write for the magazine.

Regards, Angela Gordon 10 | CIM Magazine | Vol. 4, No. 6

Power from within the earth

news

LEGO offers promise of cleaner energy source for oil sands

By Peter Caulfield

www.nexeninc.com

www.shell.ca

Photo courtesy of Nexen Inc.

Nexen Inc. and Shell Canada, along with the Alberta Energy Research Institute (AERI), are studying the use of environmentally friendly low-enthalpy geothermal energy for oil sands (LEGO). Low-temperature geothermal energy, as it is also known, comes from underground sources less than 300 metres deep.

“Geothermal energy is a clean source of heat and could offset the carbon dioxide emissions caused by natural gas combustion,” says Rick Nelson, program director of water use and renewable energy at AERI. “In addition, geothermal systems that are integrated with a thermal chiller could be used to offset CO2 emissions which are by-products of electrical refrigeration.”

SAGD valves AERI’s research shows that shallow geothermal wells could provide space and building heating at oil sands facilities. The companies using it are now examining the potential of LEGO through an on-site demonstration of the technology.

Alison Thompson, project development manager of asset management at Nexen, says her company is interested in geothermal systems as a possible new energy source.

“Nexen looks at a variety of energy alternatives,” she says.

“In addition to our oil and gas portfolio, we also have power generation assets. This study appraises a new form of energy in the oil sands area that could make our operations more energy-efficient and reduce our carbon footprint and operating costs.”

Thompson says LEGO has potential benefits for the oil sands industry as a whole, too. “Geothermal energy allows more resources to be extracted from the same footprint because it can be harnessed in conjunction with other oil sands applications,” she explains. Thompson, who is also the chair and executive director of CanGEA, a not-for-profit association that promotes geothermal energy in Canada, is an ardent fan of LEGO. “Geothermal energy can replace heat and power that is derived from oil or natural gas,” she says. “Researchers are garnering the skills and experience needed to expand its use to other geothermal energy targets in Canada.” Her confidence in the technology is reflected by the fact that AERI put up one-third of the cash for the pilot project. Nexen and Shell together contributed the remainder. CIM www.aeri.ab.ca September/October 2009 | 11

Giving back to secure a strong future Robert Buchan’s historic donation to his alma mater will help preserve and propagate knowledge in Canada’s mining industry

By Mike Paduada The department of mining engineering at Queen’s University has been renamed the Buchan Department of Mining, in recognition of a historic $10 million donation by Robert Buchan, university alumnus, philanthropist and former CEO of Kinross Gold Corporation. Buchan’s generous gift was announced by principal and vice-chancellor of Queen’s University, Tom Williams, during a press conference at the Toronto Stock Exchange on July 14, 2009.

“This gift will provide for both the department’s long-term and shortterm needs,” said Williams in his announcement. “An $8 million endowment will be created to fund academic and staff positions, and a $2 million fund will allow for immediate expenditures on student-focused programs and curriculum development, course materials and distance-learning infrastructure.”

This largest single donation ever to mining education in Canada is intended to maintain this country’s leadership in mineral extraction.

“We are the leader and we intend to stay that way,” says Buchan. “I think we’ve got the best mining department in the country. We can have the most innovative mining education in the world.”

Laeeque Daneshmend, head of the department of mining engineering, adds, “we must offer the most up-todate and relevant programs, taught in state-of-the-art facilities, by talented faculty with first-hand experience in industry.”

Buchan agrees with Daneshmend and believes that Canadian mining engineers will need to meet challenges with a heightened awareness of current social and environmental realities, if they are to lead the world.

“The world that we live in today is materially different from the world I started out in,” said Buchan in a speech. “The need for corporate responsibility, while never far from us in the past, is right in the forefront today. It is really important that our engineering students are taught the need for awareness of what the communities’ needs are.”

When asked if corporate social responsibility (CSR) is necessary, Buchan had no doubt. “110 per cent,” he said. “We’ve got no choice. And I don’t say that in a negative sense. It is a reality. Like rock mechanics and ventilation, you have no choice.

Those are all part of the new world. It should always be integral.”

To help Canada’s mining industry cope with social, environmental and economic challenges, the new Buchan Department of Mining will introduce professional master’s programs in mineral resources management and applied sustainability. “One of the programs that Bob’s very generous gift is going to help us support is a master’s in applied sustainability, which is going to have an internship,” explains Kim Woodhouse, dean of applied sciences. “Those internships are either to be in developing countries or in Canada where we have significant challenges within the Aboriginal community.”

They will also help keep existing courses up-to-date and to bring relevant experience into the lecture halls.

“In the past two to three years, we recognized the need to integrate issues such as CSR and sustainability, and to enhance the mineral economics content,” Daneshmend acknowledges. “There are challenges there, because if you’re talking about practitioners who’ve actually lived and September/October 2009 | 13

news experienced this, they are few and far between, and they’re in high demand.

One of our challenges has been in giving students exposure to people who actually have some depth of understanding that they can pass on to our graduating students.”

Fortunately, many mining engineering students, through their undergraduate internships and from attending technical sessions at CIM confer-

ences, already grasp the importance of these aspects. “Our graduates know that their reputations and their career paths will depend on their adherence to the highest professional and personal standards of conduct,” says Daneshmend.

Jessa Vatcher, a Queen’s graduate student who also completed her undergraduate mining engineering degree there, shares Daneshmend’s views. “A

lot of the sustainability issues mentioned here were brought up at the CIM [Toronto 2009] conference. I found a lot of the information on Aboriginal outreach very interesting. It is stuff we’re starting to get exposure to, but we could always use more.”

Maintaining connections with alumni to tap into real-world experience and for donations is one of the constant challenges a university faces.

Robert Buchan, who has an M.Sc. in mining engineering from Queen’s University, explains why it was important for him to give back. “One of my favourite phrases is one from Ghana, which translates to, ‘when an old man dies, a library burns down.’ That’s what we need to stop happening.

People with a lot of experience, myself included, need to pass on their experience through mentorship programs and guest lecturing.”

The key, as Kim Woodhouse explains, is appealing to the alumni’s passion. “They want to give where their passion lies. So, I think it’s important for universities to provide alumni something that will meet their passions.” Indeed, Bob Buchan confirmed in his speech that passion will move Canadian mining education forward.

“It’s something I feel quite passionate about, and Laeeque, thankfully, agrees with me. We’re going to aquire a real understanding of the cultural needs of the communities we move into and incorporate it into the education of the students. So, I’m very pleased to be able to help fund that today. As a new immigrant I came to Canada with $100. I’m delighted to give back 40 years later.” CIM www.queensu.ca

mac facts

Alberta’s oil sands production is projected to increase from around 1.3 million barrels per day at present to 4.7 million in 2025.

14 | CIM Magazine | Vol. 4, No. 6

news New blood, new money North Peace Energy — a small company with big plans

By Peter Caulfield

Photo courtesy of North Peace Energy Corporation

Red Earth cyclic steam stimulation pilot facilities – oil production and sales tanks (with tanker truck hook-ups in foreground)

Most of the major producers have been active in the Alberta oil sands since the industry’s inception, more than 30 years ago. That they are still going strong is testament to their tenacity and the industry’s viability.

However, the industry’s future prosperity depends also on an infusion of new blood. Fortunately, there has been no shortage of enthusiastic newcomers. One such company, North Peace Energy Corporation, is piloting a project on its Red Earth property, where it has a 100 per cent working interest in 86,400 acres of Crown oil sands leases.

Discovered petroleum initially-in-place is estimated to be between two and 3.1 billion barrels.

North Peace began acquiring leases in the Peace River area right after its inception in December 2005. Despite its large ambitions, the Calgary-based company started small and has stayed small, with a staff of only 12. This June, the little company made a big score, raising equity financing of $11.6 million.

“Raising that amount is quite an achievement for a small company with little production,” says president and CEO Louis Dufresne. “It shows that we deliver on our promises and that the capital markets recognize that. Right now the future looks good.”

North Peace will use the money to advance front-end engineering work and the regulatory approval process for a 3,000 barrel-per-day pilot expansion, which, according to Dufresne, is more viable in the current economic conditions than the originally planned 10,000 barrel-per-day first-phase commercial project. “The reality is that the capital markets are constrained at the moment. We’re therefore going to move forward in smaller steps than we had originally planned,” says Dufresne.

North Peace intends to submit its application later this year or early next year and expects the project to start up in 2012. The company is advancing resource development using cyclic steam stimulation (CSS) thermal recovery. Two horizontal CSS wells have been drilled and are producing bitumen. If the pilot project is successful and Red Earth proceeds to full commercial production, it will become a 30,000 barrel-per-day facility with a projected 25-year life. CIM www.northpec.com

mac facts

The Canadian mining industry exported $95 billion worth of metals and nonmetals in 2008, including $6 billion in coal, which equates to 19 per cent of total Canadian goods exported.

September/October 2009 | 15

news Growth is in the cards Current and proposed expansion will help Shell Canada increase production at its Athabasca and Peace River operations

By Peter Caulfield Shell Canada has operations in all the three main oil sands deposits in Alberta — Athabasca, Peace River and Cold Lake. Shell’s Athabasca Oil Sands Project (AOSP) is the site of one of the largest oil and gas expansion projects in North America and the company is also planning another expansion project at its Peace River leases.

Building the future

Photo courtesy of Shell Canada

AOSP Expansion 1, a fully integrated, 100,000 barrel-per-day

expansion, is being undertaken by Shell and its joint-venture partners, Marathon Oil Sands LP and Chevron Canada Limited.

The main components of the project are the construction of mining and extraction facilities at the Albian Sands operation (for the future Jackpine mine); the expansion of froth treatment facilities at the Muskeg River mine; the expansion of the Scotford Upgrader; and the development of common infrastructure, such as power lines, roads, camps

and pipelines to support future expansion.

Started in 2006 and slated for completion in 2010/2011, AOSP Expansion 1 will increase the bitumen output of the Albian Sands mining operation and the Scotford Upgrader by 100,000 barrels per day, of which Shell’s share will be 60,000 barrels per day.

“AOSP Expansion 1 is the future of Shell’s oil sands business,” says Laurieanne Lynne, Shell Canada’s corporate communication advisor.

“It’s among the largest, most technologically advanced oil and gas construction projects underway in North America.”

A significant development opportunity

Peace River operation 16 | CIM Magazine | Vol. 4, No. 6

Shell Canada has held leases in the Peace River area since the 1950s. By 2004, Shell’s 100-employee Peace River Complex had produced 50 million barrels of bitumen. That year, Shell began to consider expanding its bitumen production. In 2006, it acquired the assets of another operator and added more leases and two cold production facilities to its Peace River holdings.

Later in 2006, the company submitted an application for the Carmon Creek project, a 100,000 barrels-perday expansion plan. However, last year, following additional technical and review work, Shell withdrew its original Carmon Creek application and began work on a new one, which it is planning to submit to regulators later in 2009. Under the proposal, Shell will bump up daily production from the currently licensed cap of 12,500 barrels of bitumen to 80,000 barrels per day.

“The Peace River oil sands represent a significant development opportunity for Shell,” Lynne says. “The

news existing thermal facility is a relatively small operation that has been in operation for more than 20 years. The expansion project is designed to allow us to expand our production in the most cost-effective way and ensure the efficient long-term development of this resource.”

The Carmon Creek project is still only being contemplated. Shell’s decision to proceed or not will depend on several factors, according to Lynne.

“They include the outcome of the regulatory review, market conditions and project costs,” she explains. “We are working to submit our new regulatory application in late 2009 and expect the review to take upwards of 18 months.”

Joined-up thinking The proposed Carmon Creek project is a complex, everythingconnects-to-everything-else example of sophisticated bitumen-recovery technology at work. It will use vertical well steam-drive technology in which vertical deviated wells are clustered into well pads. To minimize the number of wells and the resultant environmental footprint, the well arrangement patterns will be carefully designed before installation. With longer term productivity in mind, Shell proposes to construct and tie in new well pads as they become necessary so that production can be sustained over the project’s lifespan.

Next, the well pads will be connected to central processing facilities by a system of pipelines. The pipes will distribute steam to the well pads, gather produced fluids and route them to the processing facilities. The processing facilities will separate the fluids into oil, water and gas, each of which will receive further treatment.

A diluting agent will reduce the viscosity of the oil before it is piped to a terminal in Haig Lake, Alberta.

The water will be reused to make steam after solids and residual hydrocarbons are removed. Finally, hydrogen sulphide (H2S) and carbon dioxide (CO2) will be removed from the gas, which will be used to fuel steam production. The H2S and CO2

will be re-injected into empty underground reservoirs.

Most of the required steam will be generated by new, environmentally friendly cogeneration facilities, which simultaneously produce electricity and useful heat. The bitumen pumps will use power from the cogeneration units and surplus power will be exported to the provincial grid.

On the infrastructure front, Shell plans to either upgrade an existing municipal airstrip or build a new private airstrip; upgrade tankage facilities at the Haig Lake terminal; and erect several electrical transmission lines, including a connection to the provincial grid. While the project’s human resources requirement will vary, Lynne estimates it will peak at 1,400 during the construction phase.

Green thinking Although the launch or the timing of the Carmon Creek project are uncertain, Shell is totally committed to environmentally and socially responsible design, construction and

operations. This commitment is a natural extension of the company’s track record in the Peace River area.

Over more than 25 years, Shell’s Peace River operations have deployed numerous measures to protect the environment. Examples include the construction and monitoring of wildlife crossings; the use of existing disturbances to the environment, wherever practical, when building new facilities; conducting pre-disturbance assessments; aligning linear disturbances into a single right-ofway; and drilling multiple wells per pad to minimize surface impact.

Currently, Shell is working with other companies to assess the cumulative ecological effects of projects and to explore integrated, impactminimizing land management strategies. The company also partners with other organizations to support research into wetland reclamation, wildlife crossing use and amphibian and reptilian habitats. CIM www.shell.ca

September/October 2009 | 17

news Change is in the air Syncrude Canada has its eye on the sky with two environmental initiatives

Photo courtesy of Syncrude Canada

By Peter Caulfield

Syncrude staff are engaged on a year-round basis to observe areas of open water and ensure bird deterrents are in place.

Among the scores of environmental initiatives being implemented by Syncrude Canada are two creative measures designed to keep the air clean and the birds in good health.

At the Mildred Lake upgrader, Syncrude has been rolling out a measure that promises to change the very air — the sulphur dioxide emissions reduction project (SERP).

Syncrude has three carbon-cracking cokers at the Mildred Lake upgrader, which process bitumen from the Mildred Lake and Aurora mines. SERP involves retrofitting a three-train flue gas scrubbing system into the operation of the two oldest and original Mildred Lake cokers, which were built in the late 1970s. The program, which was started in 2006, is expected to reduce emissions of sulphur compounds to an annual average of less than 100 tonnes per day when it is completed in 2011.

Coker 8-3, the third coker at Mildred Lake, is outfitted with a flue gas desulphurizer, a new type of environmental unit that eliminates SO2 emissions. It went into production in 2006. Environmentally friendly technology at all three cokers is expected to reduce stack emissions of sulphur compounds by 60 18 | CIM Magazine | Vol. 4, No. 6

per cent from the current approved levels of 245 tonnes per day. In addition, emissions of particulate matter should be reduced significantly.

Cheryl Robb, Syncrude media relations advisor, says the retrofitting of SO2 reduction technology at the two cokers will cost $1.6 billion. “It is very expensive, difficult and time-consuming work because the site is already developed,” Robb says. “Large, bulky equipment has to be moved up and over other buildings on the site. To do so, we are using one of the largest cranes in the world for the job.”

In addition to the SO2 reduction project, Robb says that one dollar out of every four spent on the upgrader expansion went towards new environmental technology. “We are always looking for ways to minimize our

impact on the environment while continuing to offer economic benefits,” Robb says. “The quality of our air at Mildred Lake is already good and we want to keep it that way.”

Syncrude is also expanding its already-comprehensive waterfowl protection program with additional resources and revised protocols. The objective is to strongly discourage fine feathered friends from setting down on tailing ponds areas, where they can come to possible harm.

In addition to keeping a deterrent system in place all year, Syncrude deploys 190 shore-based sound cannons at all tailings settling basins and areas of open water. Scarecrows and effigies are also fitted with reflectors and placed in open water to deter waterfowl from landing. A number of staff, including a field wildlife advisor, is engaged year-round to observe areas of open water and ensure bird deterrents are in place.

Syncrude has also purchased a radar-based migration monitoring system that will assist the company in its ongoing research into migration patterns. The pilot project will enable the company to analyze migration trends and adjust its deterrent system to ensure the best protection measures are in place. This system is already in operation at some of North America’s largest airports. CIM www.syncrude.ca

Moving on up Jac Nasser will take over the role of chairman of the board at BHP Billiton in early 2010. Nasser, who had joined the board as a non-executive director in 2006, serves on the risk and audit committee. An executive of international repute, Nasser worked for the Ford Motor Company for 33 years, retiring as its president and CEO in 2001. He was also the chairman of Polaroid a director of Brambles Limited and Quintiles Transnational Corporation until 2008. Currently, Nasser is a partner of One Equity Partners, a director of British Sky Broadcasting plc and a member of the international advisory board of Allianz A.G.

news Achievements Photo courtesy of BioteQ Environmental Technologies

Hatch designed and constructed two tunnel plugs to separate the active mine from high water levels in the depleted mine. The company’s engineers successfully optimized an extensive near-field and contact grouting program for the two tunnel plugs.

Diavik to the rescue

BioteQ water treatment tank

Cleaning water is a social responsibility BioteQ Environmental Technologies has been named one of Canada’s Top 50 Most Socially Responsible Corporations in the 2009 Jantzi-Maclean’s Corporate Social Responsibility Report. The company was recognized for helping resource companies turn contaminated industrial wastewater into a useful resource using patented technologies that recover dissolved metals while producing clean water that can be reused or safely discharged to the environment.

The 50 Most Socially Responsible Corporations report, compiled by the independent investment research firm Jantzi Research, appeared in the June 22, 2009 issue of Maclean’s magazine. BioteQ has also won the Globe Award for Environmental Excellence, the PDAC Award for Environmental and Social Responsibility, the China Mining Environmental Protection Award and the Mines and Money Sustainable Development Award.

Diavik’s mine rescue team secured the top position in the underground and surface events at the 52nd annual Workers’ Safety and Compensation Commission Mine Rescue Competition, registering its first overall victory since the mine’s teams began participating in the competition in 2003.

Of the seven underground event tasks, Diavik won four — the written, rope and rigging, smoke, and obstacle. In the surface event, Diavik won five of seven tasks including obstacle/extrication, fire, rope and rigging, bench, and smoke.

The victorious team included underground captain Kelsey Loessl, surface captain Brad Rogers, coach John Arnold, Diavik emergency response team coordinator Alex Clinton, Yuri Kinakin, Erika Tamboline, Dean Coles, Chris Ethier, Jesse Lepine and Matt Reed. Congratulating them, Diavik president and COO Kim Truter said, “Our highly skilled mine site emergency response team trains

Suncor makes A-list of responsible companies Suncor has also been named to the 2009 list of the 50 Most Responsible Corporations in Canada compiled by Jantzi Research and published Maclean’s magazine.

Suncor was lauded for its renewable energy operations, which include four wind-power projects and one of Canada’s largest ethanol plants, for the extent of its spending with Aboriginal businesses and for its research into technologies to reduce the environmental impact of its operations and to evaluate the potential environmental, social and economic impacts of major projects.

Award-winning dewatering The Consulting Engineers of Manitoba have awarded Hatch Inc. an Award of Merit in the industrial category for its 777 mine dewatering project in Flin Flon, Manitoba.

Retained by HudBay Minerals to implement a new minedewatering scheme that would allow the safe and costeffective decommissioning of a deteriorating mine shaft, September/October 2009 | 19

news Fostering responsibility CIM collaborates with the Government of Canada to develop the Centre of Excellence on Corporate Social Responsibility

By Heather Ednie Operating scores of projects across the globe, Canada’s mining companies are a force to be reckoned with in the international arena. In recent years, these companies have come to be recognized not only for their expertise in mining, but also as benchmark-setters in the area of corporate social responsibility (CSR). Acknowledging the Canadian mining industry’s global reach and the exemplary nature of its CSR efforts, the Government of Canada recently sought CIM’s expertise in the creation and operation an online Centre of Excellence on Corporate Social Responsibility.

This past summer, work got underway to create the web-based centre. Two stakeholders meetings held in Ottawa and Vancouver brought together representatives from the industry, civil society organizations and the government. The message was clear — people see the need for such a centre to promote best practices, facilitate knowledge sharing and foster greater environmental and social responsibility.

“Our mission of knowledge sharing and networking, grounded in the intention to see better practices developed and applied, makes this initiative something that is very much aligned with our core purpose,” says Jean Vavrek, CIM executive director. “CIM has achieved much in terms of researching, developing and sharing best practices in many areas of the industry. That is what we bring to CSR. We can build on existing networks, relationships, systems and

20 | CIM Magazine | Vol. 4, No. 6

activities in an affordable way, even with little funding up front. Our members and our industry want to see CSR woven into how we do things day-to-day.”

Andrea Baldwin, the director of advisory services for Canadian Business for Social Responsibility (CBSR), has been engaged with CIM from the onset in its efforts to create the vision of the centre. She recently moderated the stakeholder meeting in Ottawa that was attended by over 70 people. Baldwin believes that the Centre of Excellence can “raise the game” in terms of CSR-related practices across industries and among stakeholders.

“There is growing recognition among companies that they are being held responsible for their behaviour, both environmentally and socially,” Baldwin says. “The stakeholders — investors, customers, communities — are demanding responsible practices. The Centre of Excellence will make it easier for companies to be responsible by sharing tools and best practices and by enabling access to experts in the field. This opportunity for collaboration will be especially advantageous for smaller companies.”

CBSR is a mission-based organization focused on CSR in Canada and abroad. Baldwin says that the centre will fit with their mission and respond to their members’ demands. “It’s a logical extension of our mission,” she explains. “We want to be collaborative — to have one single ‘go to’ source for information.”

The Centre of Excellence is one of the four pillars of the government’s “Building the Canadian Advantage” strategy on CSR announced last March. CIM is working with the Department of Foreign Affairs and International Trade (DFAIT) to formulate the centre’s vision and ensure the proper engagement of all stakeholders.

“Canadian companies are often instrumental in bettering the lives of people in the communities in which they operate,” says Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway. “We have created this centre to help provide the tools, guidance and advice they need to meet and exceed their social and environmental responsibilities abroad.”

Vavrek commented that CIM’s very nature positions it as a natural leader in the development of the centre. As a volunteer-based, not-for-profit, multi-stakeholder organization, CIM thrives on grassroots connections throughout communities across Canada. “This allows CIM to develop the centre in an inclusive way, which is a critical aspect of the concept,” Vavrek adds. “It is the sort of thing CIM was created for and in which we have proven ourselves in past.”

The creation of the centre has only just begun. Over the next year, it is expected to develop rapidly. Throughout the summer, the focus was on identifying which key organizations should be involved, defining roles and identifying avenues for contribution. Because CSR is itself a broad-sweeping term, ensuring that the centre remains sharply focused is quite a challenge. Efforts have therefore been made to assemble the right leadership team to help identify a portfolio of short-term priorities and longer term challenges.

Vavrek’s list of next steps in the creation of the centre includes identifying alternative sources of funding to support new and expanding initiatives, ensuring the participation of the oil and gas sector, and identifying geographical areas to focus on where immediate value can be had.

Baldwin adds that during the first stage of the centre’s development, the focus will be on transitioning from the theoretical to the practical, ensuring practical tools are provided to be applied in the field. “The centre will bring together case studies, best practices, tools and access to experts,” she explains. “It’s an opportunity to pull together information and be a place where material will be developed to fill information gaps, to be identified by the multi-stakeholder group.”

The Centre of Excellence is to grow into a practical tool to help the advancement of Canadian best practices and will help maintain Canada’s position as a global leader. “It is noncompetitive,” adds Baldwin. “It provides the opportunity for collaboration.” You too can contribute to the process. Please visit the website and bookmark the page. Remember that your feedback and contributions are always welcome. They will be needed to shape the Centre of Excellence on Corporate Social Responsibility. CIM

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www.cim.org/csr September/October 2009 | 21

news Moving on up The Right Honourable Jean Chrétien has been appointed a senior international adviser to Ivanhoe Mines. Since retiring in 2003 from politics and the positions of Prime Minister and leader of the Liberal Party of Canada, Mr. Chrétien has practised as a lawyer with the international law firm, Heenan Blaikie. As a parliamentarian, he had held several senior posts, including Minister of Finance, Minister of Justice, Attorney General, Minister of Energy, Mines and Resources and Minister of Industry, Trade and Commerce. At Ivanhoe, Mr. Chrétien will provide advisory services through a contract with Global Mining Management, a private service company based in Vancouver.

Dumont Nickel Inc. appointed Nicholas Tintor as a director. Tintor’s 30 years of experience include management, finance and project acquisition. Currently the president and CEO of Homeland Uranium Inc., he also serves on the boards of Macusani Yellowcake Inc., San Anton Resource Corporation and Anaconda Mining Inc. Tintor is also a member of several national professional associations and is a member of the University of Toronto’s department of geology’s Industry Steering Committee.

David McAdam has been appointed interim CFO at Hawthorne Gold Corp. McAdam, who had earlier provided financial consultancy services to Hawthorne, has over 25 years of high-level international financial experience. He was the CFO of Eastern Platinum Limited, and has held executive and advisory positions at Yellowcake Mining Inc., Photon Holdings and several other American and Canadian companies.

Richard Klue is the new manager of strategic development in the mining division of the engineering consultancy Wardrop, which is now part of the Tetra Tech Group. Klue will lead Wardrop’s technical services group and help guide the the company’s international initiatives. Richly experienced in technical, project, international and general management, Klue was most recently director and general manager of North American operations at a large international engineering company. Earlier, he had served as a chief consulting metallurgist to a major mining investment group.

James Fazzino has been appointed managing director and CEO of Incitec Pivot Limited (IPL). Fazzino, who has 20 years of experience in the chemicals industry, has been with IPL for the past six years, during which time he played key roles realizing synergistic benefits from the 2003 merger that created IPL, the purchase of Southern Cross Fertilisers from BHP Billiton in 2006 and the acquisition of the explosives company, Dyno Nobel.

Chartered accountant Stacy Stone has been appointed CFO at Acadian Mining Corporation. She is currently the CFO of Royal Roads Corp.

Duane Lo is the new CFO at Luna Gold Corp. As a controller at First Quantum Minerals Limited, Lo assisted in the completion of two major acquisitions and saw three mines commence commercial production. He obtained his chartered accountant designation in Deloitte & Touche’s audit and assurance practise.

Toronto-based exploration junior Eloro Resources Ltd. has appointed Denis Potvin to its board of directors.

Potvin, a former National Hockey League player, recently appeared as a hockey analyst with Fox Sports Network. From 1973 to 1988, he played with the New York Islanders Hockey Club, captaining the team from 1980 to 1983. He was inducted to the Hall of Fame in 1991. From 1993 to 2005, Potvin served at Raymond James & Associates as financial advisor, a position he had also held at First Capital Advisors New York, from 1989 to 1993. After retiring from hockey, he worked as a commercial real estate broker for Cushman Wakefield (New York).

22 | CIM Magazine | Vol. 4, No. 6

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upfront SUSTAINABILIT Y by Dan Zlotnikov

Balancing the flows Photo courtesy of Suncor

An examination of Athabasca’s Water Management Framework water is added, causing the bitumen to float off. The water stays with the remaining material – the tailings.” More water is needed for the high-pressure chemical upgrading processes, which converts bitumen into lighter crude.

Currently, all the operations draw their water from the Athabasca River.

The framework’s rationale is that as more projects come online, the pressures on the river will increase, necessitating the evaluation and control of the cumulative, rather than just individual, effect of the water withdrawal licenses.

To this end, the framework introduces three colour-coded conditions which, along with associated restrictions, are adjusted weekly.

Under the “green condition,” when Suncor’s primary extraction plants separate raw bitumen from the sand in giant separation cells. flow rates run high, each operator may withdraw water up to the limit set by its water usage license, as long as the cumulative withdrawals ike other regions rich in natural resources, Alberta of all the operating projects are less than 15 per cent of overhas had to strike a balance between protecting the all river flow.

Given that historically, as McEachern notes, environment and embracing economic growth. “withdrawals have accounted for less than one per cent of Previously, this equilibrium would have been defined annual flow,” the cumulative limit is unlikely to overly conby Canada’s strict regulations on emissions and water withstrain operators. drawals. But the situation in the Athabasca Basin was unique During “yellow conditions,” when river flow decreases to in the rapidity and concentration of its economic developthe lowest 20th percentile of historical values, the cumulament. One of the greatest areas of concern for local stakeholders and for national and international non-governmen- tive constraint is more likely to be felt. During such times, tal organizations was the welfare of the Athabasca River. combined withdrawals must not exceed 15 cubic metres per The Athabasca experiences significant seasonal variations second (cumecs) during the ice-covered periods, or 34 in flow rates, explains Preston McEachern, a section head in cumecs during other times. the Oil Sands Environmental Management Division at Restrictions are strictest during the dry “red condition,” Alberta Environment. McEachern is one of the primary when river flows are in the bottom fifth percentile of historiauthors of that ministry’s response to the ecological chal- cal rates. The withdrawal limit is set at the lesser of 15 cumecs lenge of protecting the river — The Water Management or five per cent of median flow in each week. During winter, Framework. this would typically amount to between 8 and 12 cumecs.

The framework, currently in the first of two phases, The main focus of the framework, McEachern explains, focuses on the Athabasca’s overall flow during any given was identified through years of extensive study. “We examweek. The flow is highest in summer, explains McEachern, ined the entire spectrum of what makes the river function,” due to the contribution of snowmelt and various surface he says. “There are water quality concerns, for example. water bodies and tributaries. In winter, when these addi- Reduced volumes can increase the concentration of certain tional inflows are absent, the flow rate drops significantly. parameters of concern in the river. Channel maintenance and Water is an integral part of the extraction process used channel-forming flows must be considered. You need high today, explains Chris Fordham, manager of strategy and flows to scour the bed. You need to clean off fish habitat for regional integration at Suncor. “The ore is mined, broken up spawning. There are connectivity issues. You need higher in sizers, and water is added to it to create the lumpy slurry flows to maintain the trees. And then, of course, there’s that goes to the extraction plant,” he says. “There, more hot habitat, which is water required for animals to live in.”

L

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upfront SUSTAINABILIT Y

Because the framework mainly focuses on the lowestflow periods, a number of these areas will be unaffected, according to McEachern. “Channel-forming flows are not an issue,” he explains. “Connectivity, being related to higher summer flows, is also not an issue. We therefore investigated water quality and habitat issues. We determined that because of the small size of the withdrawal, as compared to the overall amount of water in the river, water quality was a less pressing issue. That leaves habitat as the main area of focus. However, we will be addressing water quality in Phase 2.”

With the framework being in its trial phase, data are still being collected. The second phase of long-term regulation will begin in early 2011, and some areas of impact still need to be evaluated. “We are continuously re-evaluating the data and working on the water quality aspect as we investigate the future of water returns to the river,” says McEachern.

No pain…yet Despite the framework’s first phase coming into effect, Fordham says that Suncor’s and its neighbouring companies’ operations have not been significantly affected. “In the Phase 1 framework, we are permitted to use eight to 15 cumecs and are already drawing less than that,” he explains. The true impact of the restrictions will not be felt until more projects enter the picture. When the framework came out, there were only three companies — Syncrude, Suncor and Shell — operating and withdrawing water.

Since then, CNRL came online, but that’s it so far.”

McEachern agrees that the restrictions are designed for significant future growth. “The peak withdrawal of around seven cumecs occurred after CNRL started up in 2007,” he says. This amount is still below the lowest restriction set by the framework.

The specifics of how the limit is met are left up to operators, says Stephen Daughney, technical director for the Water Group within Hatch’s engineering consultancy. “The operators have come together and allocated intake based on worst-case limits,” he says. “They’ve agreed to divvy up the allowance and set their individual company limits, such that the cumulative intake does not exceed the yellow and red conditions.”

Alberta’s water license structure accords the highest priority to the oldest license-holders, but there is room for cooperation, according to Les Sawatsky, a principal at Golder Associates’ Engineering Design and Construction Group. “The framework has resulted in excellent collaboration and cooperation among the oil sands firms,” Sawatsky says. “The framework’s constraints are being addressed by the Oil Sands Developers Group (OSDG), who contracted Golder to investigate how its members can meet the requirements more effectively by cooperation.”

Sawatsky adds, “some tailings technology sharing agreements are also taking shape.”

Smoothing out the extremes The most direct and immediate work-around, says Fordham, would be to collect extra water in summer and store it on site for the winters. According to McEachern, this is a less damaging alternative to the more traditional countermeasure of damming the river. In addition to minimizing the impact on the river, maintaining a constant withdrawal rate would allow operators to maintain a constant production rate.

“Generally, these companies pull a constant average amount of water and don’t stray from that very much,” says McEachern. “They have an operation that generally works consistently. They have nightmares about any kind of variance in the system.”

Another way would be to restructure the process, completely removing the need for water. Unfortunately, that may be harder than it sounds. “A few options have come and gone in terms of water replacement,” Fordham says. “A technology called Bitmin, for example, was built around the concept of solvent-based extraction and used a lot less water. But none of these alternatives have been shown as commercially viable yet.”

Improved efficiency Recycling is certainly something the operators are getting better at. Already, 80 per cent of the water used in

September/October 2009 | 25

upfront SUSTAINABILIT Y

bitumen extraction and processing is recovered from within the operation.

“There has been a striking decline in water use by existing companies over the last seven years,” notes McEachern.

“Added up for all the companies, some years the water withdrawal has gone down even as new companies have come online. Overall, the trend is stable or decreasing, simply because companies have improved their efficiency.”

This is excellent news, but there is still room for improvement. Daughney identifies tailings ponds as a place where water use can be made more efficient. “The biggest driver for decreasing water intake is the ERCB Directive 074 on tailings,” he explains. “The directive came out in final form early this year. It seeks to make the tailings areas recoverable much more rapidly than before. It is focused on fluid tailings and especially on mature fine tailings or MFTs. The goal is to move tailings deposition strategies to something that will produce more trafficable deposits that can be reclaimed much more quickly in the post-deposition period.”

MFTs are the finer waste particles that remain after the bitumen is extracted. Because of the nature of the Athabasca region’s soil, MFTs trap a lot of water in their structure. Up to 80 per cent of the material in the tailings ponds is water.

Fordham says that Suncor is working to concurrently recover this trapped water and speed up tailings

reclamation; they have moved to a new process called consolidated tailings in which mature fines are added back to the tailings stream. “Gypsum is then added, allowing the clay structure to consolidate much faster. You free up the water and get a trafficable surface much faster,” he explains.

“The result is a much less moist mixture,” adds McEachern. “Suncor is on track to reclaim its oldest tailings pond, going from MFTs, with 70 to 75 per cent water, to densified tailings that are 70 per cent solid. “That will be ready for surface soils next year.”

Water removed from tailings ponds must either be reintroduced into the process or remediated and returned to the river. McEachern is hopeful that there will be further cooperation between operators on this front too. “Previously, new companies would have very poor water use efficiency because they have to withdraw a lot of water before they could recycle it from the tailings,” he explains. “Instead, we want them to bypass that stage, utilizing some of the excess water from mature sites. Flying over Suncor and Syncrude operations, you’ll see the large volumes of water that they have in their tailings ponds.”

Fordham acknowledges that this is possible, but also sounds two notes of caution. The first concern he notes is that not all water is the same. The chemistry of Suncor’s recovered water might not suit the needs of neighbouring projects. “Of course, if we clean up the water and put it back in the river and someone downstream takes it back out, it would almost serve the same purpose,” he says. Doing so would also avert Fordham’s other concern — having to build pipelines to move recovered water from one project to another. On the other hand, returning water to the river would require a license from regulators — something no operator has at this time.

Even with all possible recycling, some fresh water would still have to be drawn from the river, acknowledges McEachern.

“Salinity is a major problem for extraction, in the Clark hot water process. It’s absolutely horrid for the upgrader.”

Fordham also points out that recovered water can only be recycled so many times before other issues appear. “The problem with water is that as you continually recycle it, you gradually build up various ion concentrations,” he cautions.

“The advantage of bringing some fresh water in is that you dilute it to some degree. Recycling forever is probably not an option without some water treatment or fresh water input.”

Fordham also highlights that the operators themselves have a desire to minimize water use, regardless of government regulations. “I think there’s a view that the oil sands companies suck the water out of the river because we want to. If we could find a way to operate without water, we’d do it. Bringing the water in, moving it around and storing it all cost money. If we didn’t have to do that, we wouldn’t. But right now, we have to, so we just try to maximize the efficiency of using the water we take in.” CIM www.suncor.com www.environment.alberta.ca

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www.golder.com www.hatch.ca

upfront TEC HNOLOGY by Dan Zlotnikov

Unconventionally unconventional Nexen Inc. improves on SAGD yields and cuts production costs at Long Lake Photo courtesy of Nexen Inc.

Twin challenges

Long Lake skyline with well pad in foreground

s more and more conventional oil resources dry up, Alberta’s oil sands gain more attention and significance in the eyes of the world’s oil producers.

Benefitting from over 40 years of continuous research, the vast oil sands resources have become ever more economical to mine. Today, a number of companies are reaping the benefits, and various operators are expected to develop many more projects in the near future.

With only 20 per cent of the vast bitumen reserves accessible via surface mining, the need for alternative approaches has long been recognized. Among the more promising approaches is steam-assisted gravity drainage (SAGD), in which operators drill horizontal well pairs deep underground, one a few metres above the other. The top well is pumped full of hot steam, decreasing the viscosity of the bitumen. The liquefied bitumen then seeps into the bottom well, and is pumped to the surface for processing.

SAGD has allowed for far greater access to the resource.

Expectations are that within two decades, the majority of Alberta’s oil production will come from SAGD operations.

But the method is not without its challenges.

A

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The two main challenges with SAGD pertain to its cost and direct usability. SAGD is comparatively expensive, mainly because it needs vast quantities of steam. The steam generators use natural gas, which is relatively costly. There are also concerns that its supplies may become constrained as more and more SAGD projects begin operations. Furthermore, the same natural gas is used for household heating and cooking. If the oil producers’ demand drives the price of this resource up, it may strain relations between operators and local residents.

The second issue with SAGD is that the bitumen produced from oil sands can not be used directly by refineries. To be usable the bitumen must be upgraded, that is, converted from bitumen into a synthetic crude oil. As part of this process, the bitumen is split into its component parts and the lighter distillates are chemically treated to produce sweet synthetic crude oil. However, the nature of the upgrading process is such that only half of all the bitumen can be easily made into synthetic crude. The remainder is generally processed through a coker where it is converted into additional distillate and solid coke. The coke is sold to coal power plants or steel smelters, at a price far lower than that of oil.

A new solution With such costly overheads, it is no wonder that companies like Nexen, Inc. are attempting to boost the efficiency of the upgrading process. Nexen has partnered with OPTI Canada to develop a process called OrCrude™ — a technique that promises to decrease waste, cut costs and improve the product quality, in concert with hydrocracking and gasification. The technology is being deployed at the jointly owned Long Lake oil sands facility, some 40 kilometres southeast of Fort McMurray, Alberta. Originally, Nexen operated the extraction side and OPTI ran the upgrader, but in January 2009, Nexen acquired an additional 15 per cent stake from OPTI. With a working interest of 65 per cent,

upfront Diagram courtesy of Nexen Inc.

TECHNOLOGY

OrCrude™ upgrading process

Nexen is now the sole operator of Long Lake. “Most of the technical and operational expertise that OPTI had at the site was simply transferred to Nexen,” explains Nestor Zerpa, Nexen’s senior advisor of synthetic oil process technology.

“Rather than having two groups, we now have one. There was a lot of duplication, and we are now able to optimize our work more.”

Optimization is very much the name of the game for Nexen, as the company strives to maximize the amount of usable crude it can produce from the extracted bitumen.

“With typical bitumen, if you take 100 barrels, you’ll get 50 barrels of distillates,” explains Zerpa. “Their API [American Petroleum Institute gravity — a measure of the relative density of a petroleum liquid with respect to water] would be about 20, which is pretty low, though better than the 7 to 10 API of the original bitumen. Through OrCrude™, we can turn 100 barrels of bitumen into 85 barrels of distillates, not 50.”

This 70 per cent yield improvement is a huge advantage on its own, but there’s more. “The quality of the distillates improves from 20 API and 3.3 per cent sulphur to 40 API and nearly no sulphur — just around 10 parts per million,” Zerpa explains. At 40 API, the product is nearly identical to the 35 to 45 API of conventional oil and brings with it a corresponding boost in sale price. The resulting by-products are also more manageable. Instead of solid coke, the remaining 15 barrels come in the form of asphaltene, or liquid coke.

“Liquid coke is transportable in its liquid form via pipeline, Zerpa reports. ”Solid coke would require far more equipment and money to transport.”

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upfront TECHNOLOGY

Better, cheaper and cleaner too

Photo courtesy of Nexen Inc.

Impressive as they are, the yield improvements did not address the extraction side of the operation until Nexen decided to exploit the synergies made possible by OrCrude™. “The asphaltene is transformed into syngas through gasification,” says Zerpa. “That syngas is used to generate power and steam and to produce hydrogen.”

Hydrogen is an essential feedstock component in the upgrading process. Normally, Nexen would have to buy the gas from an external supplier. But with the gasification system in place, Zerpa explains, “all our hydrogen needs, all our power and most of the fuel for steam are not imported. Instead, they’re generated from the bottom of the barrel — the worst part of the bitumen. This brings us huge cost savings.” Zerpa estimates these savings to be about $10 per barrel — a very significant boost to Nexen’s competitiveness.

The asphaltene-generated syngas is not quite sufficient to meet the project’s steam generation needs, Zerpa says.

Hydrogen, on the other hand, is produced in greater quantities than those needed for hydroprocessing, so Long Lake burns a mix of hydrogen and syngas. Combined, the two offset a major portion of the project’s natural gas demand.

Zerpa estimates that Long Lake imports only 31 per cent of the natural gas it would have needed without OrCrude™.

The issue of contaminants is also addressed during gasification. Zerpa points out that “30 per cent of the total sulphur in the bitumen is concentrated in the liquid coke, as are 60 to 90 per cent of the nitrogen and all of the nickel and vanadium. You have all the usual contaminants concentrated in these heavy hydrocarbon molecules.”

Rather than invest in costly equipment to convert more of these heavy hydrocarbons to distillates, Nexen opted to consume the asphaltene portion in the gasifiers. “The syngas has three main components — carbon monoxide, hydrogen, and hydrogen sulphide (H2S). Carbon monoxide and hydrogen have fuel value — they’re what we burn.” The syngas and H2S are separated by a Universal Oil Products-patented process called Selexol. The cleaned syngas is burned as fuel, and the H2S is sent to a Claus unit, where it is turned into liquid sulphur and shipped by rail to the sulphur market.

Insider insight

SAGD wellhead equipped with electric submersible pump (shown in red) 30 | CIM Magazine | Vol. 4, No. 6

Despite all its benefits, no other operator has as yet adopted OrCrude™ technology. Zerpa thinks that this is in part due to its novelty. “Most new technologies usually require new pieces of equipment, and there’s a risk of that equipment not working,” he explains. But in the case of OrCrude™, Zerpa feels it may be more a matter of perception than of actual risk. “The advantage of this technology is that it relies on well-proven equipment. OrCrude™ is based on distillation, thermal cracking and solvent de-asphalting,” Zerpa points out. “Thermal cracking was developed in 1910 and patented by Universal Oil Products in 1913. Solvent de-asphalting was created by Shell in the 1920s. And of course, distillation has been available since the beginnings of civilization. These are the three basic steps. What makes OrCrude™ unique is that it puts these three existing basic components to work in a new way.”

That last step has not yet been demonstrated to be a commercial success, says Zerpa, but because Nexen was involved in the development from the very beginning and had a lot of inside information, “we always felt very comfortable with the technology.” As Long Lake expands, Zerpa is certain that more operators will be taking an active interest in OrCrude™.

upfront TECHNOLOGY

Looking beyond the fence Despite the benefits offered by the syngas, Nexen is working on further improving distillate yields. This means the company might lose some of the benefits from the liquid coke, a point Zerpa readily acknowledges. “It’s a trade-off. By increasing yield, we’d lose the syngas production feedstock. However, the economics of the two are different. Though we gain a lot of value out of asphaltenes, transforming them to distillates would give even more value. The difference between the two is such that producing distillates is more favourable.”

Zerpa’s point applies not just to the economics of the production, but also to its ecological aspects. One charge levelled against OrCrude™ is that the technology causes a significant increase in a project’s carbon footprint. The asphaltenes are a high-carbon feedstock, and significant amounts of carbon are released during the gasification and the burning of the syngas.

However, Zerpa feels that the current view of an operation’s carbon impact is improperly limited in scope, failing to account for the impact of the products once they leave the production facility. If a project wasn’t using OrCrude™ it would coke the asphaltene, Zerpa contends.

“A true environmental point of view should consider how much of the carbon that came out of the ground will end

up in the atmosphere,” he says. “That happens via different routes. You have the carbon in gasoline and diesel that gets burned in a vehicle and ends up in the atmosphere.

You also have carbon in coke that is burned in power plants or cement kilns, and that too ends up in the atmosphere. The carbon contained on every barrel of bitumen that comes out of the ground is going to end up in the atmosphere by some route.”

Instead, Zerpa suggests, we should be looking at the entire life cycle of a molecule of carbon, to get a more realistic view of an operation’s overall impact. “We do a lot of the operation within our fence, unlike a bitumen producer who takes the bitumen out and sells it,” he says. “If you only track that bitumen until it leaves their refinery fence, then yes, their footprint would look very small compared to ours, because they’ve done almost no transformation on the product. The intensity level of the CO2 is low. But we take that bitumen, upgrade it, increase the yields and transform the molecules into more useful forms, so the carbon intensity within our fence is high. But that shouldn’t be the true environmental view. We should look beyond the fence to what happens with the molecule after it leaves the fence.” CIM www.nexeninc.com

www.opticanada.com

September/October 2009 | 31

upfront OUTREACH by Minaz Kerawala

Practising what we preach CIM treats the current downturn as an opportunity to do its own bidding and hire students Vavrek subsequently got the OK from the CIM Council to sanction funds to hire students over this summer. “Council supported the idea, as long as it fit with CIM’s long-term strategy,” he explains.

Vavrek had no trouble squaring the decision with CIM’s strategy. “CIM has always supported students in many ways,” he says. “Giving them summer jobs seemed like a natural extension. By working with us, students get to learn more about the industry while helping us with From left to right: Neil Desai, Ali Haider Malhi, Stephen David, Lei Jin, Vadim Taskaev and Ian Durocher work we need to get done anyway.

So why not hire students and help IM has often made the case for offering summer them get industry-relevant work?” Vavrek recalls thinkjobs to mining engineering students. By and large, ing. Thus, in late June, CIM hired six students, five from the industry has responded to this call admirably. McGill University’s mining engineering program and one As a result, in addition to gaining rich real-world from Dawson College. experience, students have been able to defray much of the cost of their education. This remained true for years, A totally awesome summer job until the economic crisis threw a wrench in many mining For CIM, the students’ assistance was timely. Many companies’ works. individually small but collectively significant tasks had Faced with low commodity prices, constrained credit been pending for a while. There were databases to be and sluggish cash flows, many companies have struggled. built, documents to be scanned, stories to be researched Unfortunately, this also curbed their capacity to offer and contacts to be collated. Consequently, the students summer jobs and scholarships. were thrown in at the deep end. To their credit, they not Ferri Hassani, Webster Professor of mining engineer- only coped with, but also enjoyed, their work. ing at McGill University, has been observing the situation McGill student Stephen David help CIM Magazine closely. “Most universities are facing problems in placing researched potential stories. “My work increased my students in summer jobs,” he observes. “We promised understanding of current industry issues, such as the students co-op opportunities and jobs. Now, suddenly, potash boom in Saskatchewan and new technologies in this has become difficult.” Fearing student disillusion- the coal and oil sands sectors,” he reports. David also ment and dropout, Hassani approached several industry appreciated the bird’s-eye-view that CIM provides. “I bodies to “keep these students in jobs.” have gained a bigger understanding of the industry as a whole and I have a better understanding of the imporCIM steps up tance of associations like CIM,” he says.

Among Hassani’s first ports of call was CIM. His timDavid’s classmate, Neil Desai, also works with the CIM ing could not have been better, as the Institute had also Magazine staff. “I helped the media team conjure up news been monitoring the problem. “We started thinking about on the mining industry in Canada. I also created and this late in 2008,” recalls Jean Vavrek, CIM’s executive managed a pictorial database,” he says. Desai appreciated director. “We had indications from industry that the eco- the opportunity for learning. “While researching nomic downturn would make it difficult to provide stu- various subjects, I learned a great deal about the industry. dents with work terms and summer jobs. This was fur- Each task gave me an understanding of the mining world ther emphasized by exchanges around the table at the that could not be gained in classrooms.” Desai also feels Canada Mining Innovation Council (CMIC).” Hassani’s he has developed important career-relevant skills. “I have learned to gather ideas and express them in meetings. request brought matters to a head.

C

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upfront OUTREACH

Research and development is an important aspect that I learned,” he says.

Dawson College student Ian Durocher is compiling a database of companies for the marketing team. Hailing from an arts background, he has no prior exposure to mining. The future sociologist is quite impressed with what he has seen. “Working at CIM has been enjoyable and instructive. I have learned about a major industry that doesn’t enjoy too much public attention. I have seen how it fits into society.”

McGill co-op student Lei Jin took on the challenge of scanning and digitizing back issues of the CIM Bulletin.

“Scanning seems to be boring, but I often find something interesting in those old magazines,” comments Jin. “Sometimes, some pages can be torn or scribbled on.

Then, I utilize my computer skills to fix them.” Jin appreciates his supervisor’s support and his workmates’ camaraderie and found that, “The most beneficial thing was learning how to communicate. I sometimes experience difficulty in expressing myself properly. Over this work term, I have made some progress. It will definitely contribute to my growth.”

Ali Haider Malhi worked on a mineral research database that will be part of CIM’s contribution to CMIC. Malhi describes his experience as being “totally awesome”.

“Meeting new people who have plenty of experience and learning from them is what I enjoyed most” he says. “I have drastically improved my ability to communicate and share ideas, to work individually or in a group, and to do research more effectively.”

Malhi’s fellow McGill classmate, Vadim Taskaev, is also responsible for database development. “Autonomy and independence are aspects of the job that I enjoyed quite a lot,” says Taskaev. He declares that he has “learned a lot about the mining industry,” and adds that the experience has educated him about the industry and, its techniques its companies and associations. “I think CIM differs from other associations in that it deals with a broad and international industry,” he adds.

Given the students’ reviews, their teacher, Ferri Hassani, need not have worried, even though he admits he would have liked his students to secure jobs at mines.

He is not playing hard-to-please; it is just that he is thinking ahead. “In the next three years or so, we are going to face a major human resources problem,” says Hassani.

“Now is the time to keep these students in jobs.”

Hassani is thankful that CIM has taken up the employment slack. “Vavrek and his team have hired our students,

and that really helps a lot. These students need the money, and it is better for them to be in relevant jobs than to be selling hamburgers.” But he continues to appeal to the industry. “Although the times are hard, the industry should hire students. They are the backbone of the future.”

A positive outlook Until the corporations are able to heed Hassani’s exhortations, Vavrek has a few ideas. “We could set up similar summer work terms in every city that has a university with a mining program. I would suggest including a mining field trip and bringing in a few industry representatives for luncheon discussions. Good times or bad, I think the sector can create a more integrated and powerful work term program. Understanding corporations’ basic needs would probably help us find or create work terms that we presently do not even consider. Let’s work creatively.”

Meanwhile, Hassani’s message to students is upbeat.

“Things are not as bad as they seem; the future is bright.

If anything is going to pick up first, it’s going to be the mining industry. People are already beginning to hire again. I am very positive and hopeful.” CIM www.mcgill.ca

Moving on up Deepak T. Kapur has been elected to the board of directors at Bucyrus International, Inc. Kapur, an engineer, is the president of Navistar Inc.’s Truck Group and serves on the board of the U.S. National Association of Manufacturers.

September/October 2009 | 33

upfront Q & A by Mike Paduada

A fine balance OSDG president Don Thompson discusses his efforts to set the record straight on the oil sands debate Over the last few years, oil sands development has attracted a lot of debate in the media and in policy forums. Current oil sands projects are a significant component of the Canadian economy, supporting hundreds of thousands people in directly and indirectly related jobs. Approved and proposed oil sands projects promise to increase that impact substantially and maintain it for decades. However, oil sands critics cite concerns about emissions, land use and water management, presenting reports advocating measures that would slow down or halt oil sands development.

Enter Don Thompson. Thompson is the president of the Oil Sands Developers Group (OSDG) and general manager of regulatory and external relations at Syncrude. In his role at the OSDG, he has been meeting with people and giving presentations across Canada, the American Midwest and Europe to ensure that the industry’s perspectives are factored into the debates. He was invited to be a CIM Distinguished Lecturer and is slated to meet CIM members at local branches from fall 2009 through 2010. CIM Magazine recently spoke with Thompson to discuss some of the hot topic issues surrounding the oil sands.

CIM: The title of your presentation is called “Setting the Record Straight.” What are you trying to set straight?

Thompson: I’ve been an oil sands employee for 30 years.

During that time, I believe I played a role in fostering the development of an industry that is now the cornerstone of the Canadian economy. What bothers me is that a lot of that success has attracted detractors, most of whom are not providing the full story. What they are providing is misinformation around oil sands issues that I think have been well-managed. I’m seeking to create a balance in the discussion by providing the full perspective on whatever the particular issue of concern may be.

The OSDG has tried to address some of the concerns that people raise, whether it involves land disturbance, water use or greenhouse gas emissions, by laying out the other side of the story: Here’s the concern that we’ve heard, here’s what the facts are, and here’s what we’re doing to make it better. My presentation and other information provided by the OSDG are available at www.oilsandsdevelopers.ca.

CIM: Groups that advocate slowing down or stopping oil sands development seem to be at direct odds with the OSDG. Is it even possible for you to engage them in a dialogue?

Thompson: First of all, I find that a lot of the assertions being made are somewhat naïve. I don’t deny that, as a society, we will eventually move to an increased use of renewable energy sources. In fact, I encourage that. The industry’s critics would advocate that it can be accomplished overnight and that we can dramatically reduce the use of fossil fuels or oil sands in a very short time period. I think that is economically naïve. I believe that the better thing to do is to use the time that oil sands reserves will allow us, and the wealth that they will bring us, to move towards alternate forms of energy. So what I argue most about is timescale — it’s simply not practical, in a short period of time, to move the whole North American energy economy. In addition, we can’t do so unless our economy

34 | CIM Magazine | Vol. 4, No. 6

upfront Q & A

is robust and generating a tremendous amount of wealth. I think the oil sands’ role is in providing that timeframe and providing that wealth.

CIM: Is it possible for oil sands companies to take a more direct role in building capacity for renewable energy sources?

Thompson: Our members are energy companies, and to the degree that they see the energy economy moving in other directions, they will naturally seek to invest in profitable energy forms for the future. As an industry association, that is not something we can have a role in. But, for the companies that invest in energy production, this will naturally be something that our members would look at to the degree that it fits their investment futures.

SPECIALIZING IN

CIM: Do you think the work you’ve done has improved the quality of the dialogue, and is that visibly impacting opinions?

Thompson: I probably give 10 to 12 speeches a month throughout Canada, the American Midwest and Europe, and I do a lot of media work. I think in that process I have at least managed to get the dialogue a little more balanced — and that’s really all I want. People can form whatever opinion they like on their own, but I want them to do so in a fully informed manner. In other words, I want them to

hear both sides of the story and then go away and think for themselves. I feel we’re seeing many more instances of balanced discussion in the media and other forums over the last year or so as a result of our efforts and those of many others who have attempted to inject balance into the story.

CIM: Where does consensus occur? Is that something that is purely left to legislative and regulatory bodies, or is there a public forum where people and organizations may be able to find it?

Thompson: I think the consensus lies in the regulatory forum because that’s where projects are approved. That’s where governments lay out society’s expectations in the form of terms and conditions, approvals and the like. So, from a formal point of view, I think the consensus forum is where it’s at.

CIM: Can you explain how the oil sands provide jobs across Canada?

Thompson: For every direct job in the oil sands, there are three jobs in the local northern Alberta area, six jobs in Alberta as a whole and nine jobs across Canada and the rest of the world. We purchase a lot of mining equipment as well as utilize engineering and maintenance

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September/October 2009 | 35

upfront Photo courtesy of Syncrude Canada

Q & A

CIM: To what extent is capacity being built in the local communities? How many of those jobs are highly skilled jobs, and is that number increasing?

Thompson: For all the jobs in the oil sands, I believe employers effectively require Grade 12 or a Trade ticket. The vast majority of the jobs available are highly skilled because oil sands plants are very sophisticated, so most of the employees must have a reasonable level of education to perform the job. Currently, there are about 27,000 direct employees involved in the industry. There are also about 20,000 construction workers in camps in Fort McMurray, and a lot of those are in process operation, engineering, managerial or professional jobs. So, a tremendous capability exists and is being developed there.

Additionally, the OSDG members have 1,500 Aboriginal employees; we have spent over $100 Wood bison graze on land reclaimed by Syncrude million in contract work with local Aboriginal firms over each of the last several years. In fact, Suncor and Syncrude have both gone over the $1 billion services from across Canada and in the American mark.

So, the reality is that there is a tremendous capacity Midwest. So, we also contribute to job creation everybeing built in the local Aboriginal community as well. where across the country.

36 | CIM Magazine | Vol. 4, No. 6

upfront Q & A

CIM: How much of that activity can be sustained when oil sands activity plateaus or declines as alternative energies are developed?

Thompson: I think the job skills, the employability skills and the technical and trade skills are fully transferable to other industries. If you’re a good, solid boilermaker welder, you can be a boilermaker welder in any industry. Good workers will always find good jobs. A lot of this is transferable base capacity that will carry.

CIM: Does the OSDG have an opinion on carbon taxes and capand-trade systems?

Thompson: No, but one of the things that people should be clearly aware of is that, regardless of where you get that barrel of oil, about 80 per cent of greenhouse gas emissions result from its consumption and not its production. The reality is that whether it is cap-and-trade or carbon capture, you have to deal with that full 100 per cent of greenhouse gas emissions, and not just the small percentage that results from production. The real solution to carbon emission reduction is first, reducing consumption and then, increasing the technology.

CIM: What’s on the agenda for you and the OSDG? Thompson: We focus a lot on making sure that Fort McMurray is an attractive and successful community, and that we’ve dealt

with local issues in an effective manner, because we need that to draw and retain the workforce needed to operate in a safe, reliable manner. Of course, we continue to work beyond on some of the things that may slow down or impact oil sands development in the big picture.

CIM: Do you find social media is helping you — for example, through your blog — to engage people?

Thompson: To a degree; however, I still feel face-to-face meetings — with small and large groups — are more important. First of all, I think people are hungry for balance in the dialogue and they appreciate that industry is trying to set the record straight. People are smart and they can make up their own minds, but they desire to be fully informed in doing so. I think the second thing I’ve learned is that it’s a very big country, and you have to work pretty hard to get the message out in enough forums to make a difference.

CIM: How do you feel about being appointed as a CIM Distinguished Lecturer?

Thompson: I am honoured. Mining is one of the cornerstones of the Canadian economy. Visiting the branches will give me the opportunity to speak to people across the country, which I am really looking forward to. CIM www.oilsandsdevelopers.ca

September/October 2009 | 37

Photo courtesy of Teck Coal

coal and oil sands

New economic and demographic realities are reshaping Canada’s coal industry

Cougar South operation

by Ryan Bergen

T

he landscape of its origins helps tell the story of Canadian coal. The steep peaks, perilous drops and hidden valleys in the mountain ranges of British Columbia and Alberta that bear the bulk of Canada’s metallurgical coal outline the fortunes of those who extract it. To the east, on the plains of west-central Canada where much of the thermal coal is mined, the contour of the land is more subdued. The horizon lacks the drama of the West, but allows a much longer view.

Metallurgical (or coking) coal is low in sulphur and phosphorous content and fuels blast furnaces that convert iron ore to iron, the primary material in steel alloy. It represents about 40 per cent of the 68 million tonnes of coal mined in Canada and the vast majority of the coal exported to the world market. The recent dizzying pace of industrial development, girded by the appetite for fundamental materials like steel, fired demand for metallurgical coal, while the subsequent slump dampened it.

Steady domestic demand for electricity generated from thermal (or steam) coal provides some insulation against the global economic climate. Thermal coal, which represents 20 per cent of Canada’s coal exports, is also used to fire the kilns for cement production and other industrial applications.

For either type of coal, last year was like no other. “The 2008 fiscal year for both metallurgical and thermal coal was exceptional,” reflects Ernie Lalonde, mining analyst and senior vice-president of the rating agency DBRS. “For met coal, it broke all the records. Unprecedented growth, demand in China, bad weather in Australia — everything came together.

We are going to remember 2008 as an extraordinary year.”

Now, with far more modest, but still strong prices, Chinese steelmakers — after a dramatic pause — are again shopping for relative bargains in coal. “The 2009 story will be the surge in spot market activity related to coking coal exports to China,” declares Robert Stan, president of September/October 2009 | 39

Photo courtesy of Grande Cache Coal

Photo courtesy of Teck Coal

coal and oil sands

Left to right: Cardinal River coal wash plant; looking east at the previously mined 12 South A Mine; mechanic Candido Canteras shows apprentice Russ Mendoza the finer points on an 830E

Grande Cache Coal. “And for a certain number of coking coal producers, that will make their year.”

“If you are not talking about China, you are on the wrong page,” echoes Boyd Payne, CEO of Teck Coal, the second largest supplier of metallurgical coal to the global steel

40 | CIM Magazine | Vol. 4, No. 6

industry. “China is carrying everything. It is the only country in the world where massive stimulation money could be put to work quite quickly. It has happened and has created demand. Commodities suppliers are all looking at China and wondering how long it can last, but certainly in highquality hard coking coal it has had a dramatic impact in the last six months or so.”

For Grande Cache, the turnaround was stunning. The company reported sales of only 110,000 tonnes in the first three months of the year. “It was our worst quarter ever since we started production,” says Stan. The following quarter, with prices down more than $200 per tonne, sales increased to just over a half million tonnes. “To go from the worst quarter to the best quarter in our company’s history was a bit of a surprise,” he adds. “The combination of some good sales to traditional customers helped but, without question, it was the spot market activity related to China that really pushed us over the top.”

“Is this a sign of a turning point where China will become a net importer rather than a net exporter?” wonders Lalonde. “The second question is, with the great use of commodities in the first and second quarters of 2009, is this just a building of stockpiles at low prices, or will this go towards consumption and be a part of an ongoing recovery? It’s the big question in all the commodities businesses.

The marketplace does not know the answers yet.”

The whipsaw market has tossed met coal producers about, but there is not much to be done except to brush off the dirt and get back to work. “We will continue our traditional maintenance shutdowns but are cancelling shutdowns we had initiated in the first half of the year to control inventory,” says Payne. “Now, we are ramping up because inventory is going to be too low. My only concern is that I don’t think anybody can predict with certainty what will happen six months from now. I think we have learned that lesson in spades.”

Photo courtesy of Teck Coal

coal and oil sands

Building bridges The current challenge is in carrying the momentum forward, keeping pace with slower, though still steadily developing, economies. “You are dealing with China, which is growing at seven or eight per cent a year,” explains Pierre Gratton, president of the Mining Association of British Columbia. “While it is no longer 11 or 12 per cent, it is still phenomenal growth. The fundamentals for long-term growth in the steelmaking coal sector are great. China is rapidly industrializing and they can’t afford for it to stop. India is not far behind, and if it’s not India, it’s Brazil.”

The connection between Chinese markets and Canadian suppliers continues to get stronger. With its foot in the door, Stan says Grande Cache is generating

contacts overseas as it increases capacity. “We are busy trying to turn spot cargoes we’ve made into China into longer term contractual obligations and longer term relationships,” he says. A new Grande Cache mine is set to go into production this fall.

In July, China’s state-owned investment fund, China Investment Corp, spent CDN$1.74 billion to acquire a 17 per cent equity stake in Teck. Beyond the cash bump for Teck, the deal was significant for many because neither the government nor the public offered any resistance. This is in conspicuous contrast to the failure of a similar deal between Australia’s Rio Tinto and the Chinese stateowned Aluminum Corp.

“Canada has the resources the world requires,” says Lalonde. “I expect Chinese and other international investors

September/October 2009 | 41

coal and oil sands to look to Canada for resource development investment opportunities, including in coal. Given that current production is concentrated in relatively few hands — Teck and Sherritt being the largest — international investors seeking large-scale investments in Canadian coal may find more opportunities to focus on property development, rather than acquiring existing production capacity.”

“We’re coming out on the other end of a worldwide recession with increased demand for infrastructure and the necessity for steel and cement,” says Allen Wright, president and CEO of the Coal Association of Canada. “That, along with our industry’s strong commitment to research and advancement of new, cleaner coal technologies on the thermal side, mean that the Canadian coal industry is well-placed to meet the challenge of future global coal demands.”

Smooth transitions In addition to the effects of flooding that hit Australia last year, exports there have been hampered by ports that cannot handle the surging volume. By contrast, some coal producers in British Columbia and Alberta have the advantage of shipping to the underused Ridley Terminal in Prince Rupert. “Ridley is by far the best point of access for that region,” claims Gratton. “There is capacity also with CN to ship it there. You don’t have the same rail congestion that you see down south towards Vancouver.”

A GIANT MILESTONE

1,000,000 Hours LTI Free August 2009

In an effort to avoid that congestion, Teck Coal recently reworked its rail agreement. “We have 3.5 million tonnes that will be handed from CP to CN in Kamloops, for the first time ever,” explains Payne. “Most of that will go into the Neptune Terminal in Vancouver, where we own coal handling rights.

It is easier to schedule the shipment to Neptune and it enhances our ability to use our port.”

In northeastern British Columbia, the evolution of the coal industry has also led to adaptations in how properties are brought into production.

The contracting company Ledcor, recently active in a pair of projects near Tumbler Ridge, is in the final stages of handing over operations of the Perry Creek mine to Western Canadian Coal. Engaged there since 2005, Ledcor used a novel approach to developing the mine with the growing company, says Randy Daggitt, Ledcor’s vice-president of mining. “We weren’t the contractor, rather we were the operators of the Perry Creek mine, similar to what we did at the Gibraltar mine, which is a new approach for this industry in British Columbia. The intent of the contract was to provide a turnkey operation to the owners that they would take over once they had all of their systems and people in place. It was unique because it was a fully integrated team. Staff at Perry Creek were hired by Ledcor but interviewed by Western management because they were bound to be Western employees.”

Daggitt expects the approach will gain traction as more junior mining companies enter the market. “They are trying to start up but they don’t have the people or the systems to put a mine into operation,” he explains. “We will bring in things like our safety system, maintenance systems, HR, payroll and financial systems, and then eventually turn it over.”

Help wanted

www.minepro.com ©

42 | CIM Magazine | Vol. 4, No. 6

If commodity prices are volatile, those who have the skills to keep the industry running remain as valuable as ever. Naturally, the precipitous drop in the market has many facing tough decisions about their workforce. The question is often not whether layoffs should occur, but what is the appropriate number.

“It’s never easy to find really good people,” acknowledges Stan. Nevertheless, the recession forced Grande

Photo courtesy of Teck Coal

Photo courtesy of Teck Coal

coal and oil sands

Workers returning from shift at Fording River operation

Cache to lay off 75 workers this spring. With renewed demand, the company has since restored more than half of those jobs.

Allan Cullen of Cullen Diesel Power has tried to hold fast against the downsizing current. Up until August, the company, which sells and services mining trucks and diesel engines, had retained all of its 275 employees. The cost savings of a significantly leaner workforce would come at the price of competitive advantage, he feared.

Haul trucks ascending from Natal West and Elk Pit

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Meanwhile, Ledcor has revamped its training and operations processes to safely and effectively transition new, and sometimes less experienced recuits into the roles

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September/October 2009 | 43

required for the project. “We have standard operating procedures for everything, from the most basic tasks to the most complex,” explains Daggitt. “We’ve had to do that because people just don’t have the experience.”

Companies anticipating the steady retirement of baby boomers are already jostling to recruit not only tradespeople, but seasoned executives as well. Payne says that he has heard of headhunters coming around, not offering positions, but developing contacts. “This is quite novel,” he says. “A large mining company had recognized that in the next three to five years, they will have significant holes in their senior operating executive group. It was almost like they were doing an inventory check of talent. I thought that was pretty farsighted of them. We all have workforce planning tools, but somebody out there is using theirs at an executive level to position themselves for the future.”

Shouldering the load Many in the industry acknowledge that mining is a temporary use of the land. As such, it is up to them to add substance to that claim by controlling and managing the inevitable environmental legacy of scouring millions of tonnes of coal from the land.

At the Genesee mine-mouth operation west of Edmonton, a reclamation program initiated by Sherritt and power generator Capitol Power is shortening mining’s claim to the land. Last fall, soil rich with seeds, root structures and organic material from soon-to-be-mined land was transferred to a prepared reclaimed area to speed up the re-establishment of plant life. A preliminary survey conducted during this past summer by Dean MacKenzie of Navus Environmental found about 80 per cent of species common to undisturbed land on the three-hectare test plot.

Pending the results of a more rigorous audit as the growing season winds down, he says the process will be finetuned, but is confident that it can be applied cost-effectively at oil sands projects as well. “You can build the forest without planting — transplant the soil and the native plants come free,” he explains.

Such innovation will mark the road ahead for thermal coal, claims Lalonde. “There is no end to the research going on to find ways to use coal better. If you look at the energy markets at all, you know that coal use is growing steadily and strongly because it is an abundant and inexpensive resource. Those economics drive the technology needed to utilize the resource, so there is innovation everywhere from tire technology that allows you to use bigger trucks, to people looking at ways to treat coal more like gas, removing the impurities before we use energy.”

Slowly, a monument to fossil fuels is taking shape in the heart of Calgary. The Bow, Encana’s future corporate headquarters, continues to grow. Explicitly, it is a statement of the heft of the oil and gas industries and the windfall of the oil sands. But, says Wright, “All I can think of as each level of the structure goes up is the amount of coal that was used to make the steel for those girders.”

With every storey added, it is a more compelling testament to the essential role coal plays, and will continue to play, in global growth. CIM 44 | CIM Magazine | Vol. 4, No. 6

Photo courtesy of Boart Longyear

coal and oil sands

Canada’s oil sands industry strides ahead into a confident future

by Peter Caulfield

A

lberta’s oil sands are vital to Canada’s present and future energy needs and economic prosperity.

Consider their role in just two aspects of the economy — employment and investment. Every permanent position created in the oil sands results in the creation of nine more direct, indirect or induced jobs. As a result, some 240,000 Canadian jobs are directly or indirectly linked to this industry. On the investment front, $59 billion were poured into the sector between 1997 and 2006. The industry also has the potential to generate at least $123 billion in royalty and tax revenues between 2001 and 2020, representing a major boost to the public coffers.

Down, but not out Despite their scale, the oil sands have not been immune to the storms buffeting the global economy. Most 46 | CIM Magazine | Vol. 4, No. 6

producing operations are surviving, but many construction and development projects have been placed on hold, as their owners wait for investor and consumer confidence to rebound.

No longer as bullish as it was a year ago, the industry is definitely not all gloomy, either. Nancy Lever, managing director of ARC Financial Corp., a Calgary-based energyfocused private equity firm, is clearly optimistic. “There’s been a bit of a slowdown, but the long-term outlook is very positive,” Lever says. “Recently, the industry was challenged by huge capital cost overruns due to an overheated economy, but labour and material prices are starting to come down again. That’s a very good sign.”

Affected by the slowdown, industry suppliers too are looking forward to better times. “We think the recession will be short-lived,” says Greg Lucyshyn, contracts

coal and oil sands manager with drilling service provider, Boart Longyear Canada. “There’s going to be a pick-up in activity pretty soon.”

Paraphrasing Mark Twain, Chris Yellowega, North American Construction Group’s (NACG) vice-president of operations says, “Rumours of the death of the oil sands have been greatly exaggerated. The outlook is still very positive. Most players are taking advantage of the slow-down to increase operational efficiencies, preparing to take advantage of new opportunities when things pick up again.”

David McColl, research director at the Canadian Energy Research Institute in Calgary, sees the slowdown as “a golden opportunity.” He explains, saying: “The credit crisis and collapse in energy prices can be a chance for the industry to step back and focus on the next moves in the development of the oil sands.” McColl thinks the time is ripe to secure highquality labour that has been released by other companies, to obtain supplies and inputs at reasonable costs and to prepare for the return of higher oil prices and economic activity. He cites Imperial’s decision to proceed with its Kearl Oil Sands project as an example of such strategic thinking.

construction activity will be in 2010 and 2011, with startup in 2012. Activity will continue to ramp up until then.”

Imperial conducted extensive consultations before and during the regulatory review and continues to talk with key stakeholders. “In particular, we consulted with First Nations communities, on whose traditional lands much of the development will take place,” Rolheiser says. “Their concerns, shared by other stakeholders, focused on the environmental and socioeconomic impacts of the proposed development.”

Stakeholder input significantly informed the project’s design considerations. For example, Kearl will have significant

Straight ahead at Kearl Lake The Kearl Oil Sands, a surface mining project northeast of Fort McMurray, is being developed by Imperial Oil Ltd. in three phases and could produce more than 300,000 barrels of bitumen per day when complete. The first phase is expected to begin production in late 2012 at an annualized average rate of 110,000 barrels per day.

Construction costs associated with Phase 1 are expected to be about $8 billion, or approximately $4.50 per barrel of reserves.

Current work on the project includes preliminary site preparation including muskeg drainage, road and other earth works, as well as utility installation.

“Elsewhere, detailed engineering, planning and procurement, and contracting work is very active,” reports Pius Rolheiser, Imperial’s media team lead in Calgary. “In total, we have more than 1,000 employees and contractors working on Kearl. The period of major September/October 2009 | 47

Photo courtesy of Imperial Oil Ltd.

coal and oil sands

The Cold Lake heavy oil operation has more than 4,500 wells drilled from some 200 multi-well pads, four plants that generate steam and process bitumen, and a cogeneration unit.

capability to store water, helping Imperial curtail its water withdrawals from the Athabasca River during low-flow periods. “Imperial will also add a ‘compensation lake’ to the existing Kearl Lake, enabling us to replace the fish habitat we need to remove,” says Rolheiser.

“As requested by the First Nations communities, we will make the new lake deeper than the existing one, so that fish can survive the winter freeze. The fish species that will be stocked in the lake have also been suggested by the First Nations.”

“The Kearl project will provide superior shareholder value,” continues Rolheiser. “We have a large, high-quality, fully delineated resource, which gives us a natural cost advantage. Key regulatory approvals are in place and a world-class project team has already completed the execution planning. With startup in late 2012, we expect to be the only significant new oil sands operation coming onstream, and we anticipate strong demand for Kearl bitumen at that time.”

Hot times at Cold Lake Imperial is also proceeding with potential expansion plans at Cold Lake, where it currently operates four plants: Leming, Maskwa, Mahihkan and Mahkeses. In 2008, bitumen production from these averaged about 150,000 barrels per day. While no final decisions have been made yet by the company on whether or not to proceed, work is underway to help make that decision. The proposed three48 | CIM Magazine | Vol. 4, No. 6

phase Cold Lake expansion will open up a new area called Nabiye.

Rolheiser says that, when completed, Nabiye will add 30,000 barrels of bitumen per day to Cold Lake’s production. “Imperial received regulatory approval for Nabiye in 2004, after completing a full environmental impact assessment and extensive public consultation,” he explains. “Since the Nabiye approval was received, Imperial has been progressing technology enhancements and is proposing three environmentally friendly modifications to the project design.”

The first proposed change is designed to minimize the surface footprint of the field development plan. “This will reduce the potential effects of the project on soils, vegetation and wildlife in the development area,” Rolheiser elaborates. “In addition, the use of horizontal wells will decrease the number of well bores required to access the reservoir.

As a result, the effects on groundwater will also be reduced.”

The second proposed change is the addition of a 170megawatt steam and electricity cogeneration facility equipped with two heat recovery steam generators. “The cogeneration plant will supply power for the Nabiye operation, and feed surplus power back into the provincial grid,” Rolheiser says. Cogeneration of steam and electrical power is more efficient and results in reduced greenhouse gas emissions compared to separate generation of steam and power. Cogeneration will increase emissions from the

coal and oil sands Nabiye plant compared to the steam generators included in the approved project. However, the stack parameters for the cogeneration units will significantly improve dispersion, thereby reducing ground-level concentrations.

The third proposed change, the addition of sulphur removal facilities, will further reduce emissions from the plant. Liquid scavengers will be used to recover 70 per cent of the inlet sulphur in the produced gas that is burned as fuel. Rolheiser says that Imperial will honour all environmental commitments made in the original Nabiye application. “We are not seeking an increase in licensed volumes for fresh water withdrawals from Cold Lake for the Nabiye development. Instead, we will expand our use of brackish water as the main water source. Our commitments to gather baseline environmental data and monitor groundwater in the area have been ongoing since 2002 and will continue as the project progresses.”

Good results on the Horizon Capitalizing on a unique opportunity, Canadian Natural Resources Limited (CNRL) won a rich payoff in the form of positive second quarter results in 2009, delivered, in part, by its Horizon Oil Sands project. In August 2009, the company announced that earnings for the three months ending June 30, 2009, were $162 million. The

previous six months’ earnings were $467 million. Earlier in 2009, CNRL had started shipping synthetic crude from Horizon.

Horizon, located 70 kilometres north of Fort McMurray, is a surface oil sands mining operation with attached bitumen extraction and upgrading facilities. Reporting on production at the project recently, CNRL chairman Allan Markin said, “The ramp-up of production at Horizon continued to go well during the second quarter, with production exceeding our corporate guidance.”

CNRL owns and operates 115,000 acres of leases at Horizon. Drilling indicates the estimated presence of 16 billion barrels of bitumen, of which about six to eight billion are recoverable with existing technologies.

The Horizon project will proceed in stages. Phase 1 will see production of 110,000 barrels of synthetic crude per day. Daily production is expected to expand initially to 250,000 barrels, and eventually to 500,000 barrels.

Capital investment for Phase 1 was originally budgeted at $6.8 billion. Reflecting inflation and rising service costs, it is now estimated to be $9.7 billion.

Horizon will generate important economic benefits for Alberta and Canada over its 40-year life span, creating about 25,000 person-years of direct employment during primary construction. At full capacity, the project is expected to employ approximately 2,400 people.

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coal and oil sands 24,000 hands on deck

From paper to oil

In an industry of huge employers, the Athabasca Oil Sands Project (AOSP) Expansion 1 stands out. Laurieanne Lynne, Shell Canada’s corporate communication advisor, characterizes the company’s AOSP Expansion 1 as an extremely complex project involving thousands of workers over many years. “AOSP Expansion 1 is among the largest trade union projects in Canada,” she reports. ”We are using mainly Canadian contractors to build it and all our oil sands projects.” Half of the project’s equipment and materials have come from Canadian companies, including 20 Aboriginal companies that won contracts worth a total of $20 million.

As of the end of July 2009, Shell had more than 12,000 skilled craft workers working on AOSP Expansion 1. “We are among the largest trainers of new skilled workers in Canada. Currently, we host over 30 per cent apprenticed workers,” says Lynn.

Started in 2006, AOSP Expansion 1 is scheduled for completion by 2011. The mammoth project comprises new mining and extraction facilities at the future Jackpine mine, the expansion of froth treatment facilities at the Muskeg River mine and the expansion of the Scotford Upgrader.

Upon completion, the project will increase bitumen capacity at the Albian Sands mining operation and the Scotford Upgrader by 100,000 barrels per day.

One challenge faced by all oil sands operators is finding and keeping adequate numbers of trained and motivated workers. The issue has caught the attention of the Calgary-based national, not-for-profit Petroleum Human Resources Council of Canada. “There is still a shortage of skilled labour,” says council executive director and CEO Cheryl Knight. “The economic slowdown has affected construction more than operations. Producers don’t stop producing when prices fall. They just try to be more efficient.”

The council has been exploring new sources of oil sands labour, including former workers from British Columbia’s collapsed pulp and paper industry. “Many of the skills these workers possess are transferable to the oil sands,” Knight says. “Because many oil sands operators use steam, they want people who have their steam tickets.”

Also in high demand are other certified tradespeople, such as millwrights, welders, pipe fitters and heavy-duty mechanics.

Former pulp and paper workers can often find employment in the oil sands, without even having to relocate. “Oil sands employers are very flexible. You don’t have to leave your home to take a job. Producers will fly you in and out,” Knight explains.

In Alberta, the industry employs about 11,000 permanent workers, including geologists, technologists and

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coal and oil sands technicians, process control engineers, tradespeople, heavy equipment operators and health and safety and regulation specialists. Unlike the conventional oil industry, which, according to Knight, resembles the mining industry in the transience and mobility of its employees, the oil sands are a plant-based environment.

Here, workers are encouraged to plant roots and work their way up, rather than heading off to the next gig when their current one is completed. Consequently, many oil sands workers are older than their conventional petroleum industry counterparts. “Many workers are between 30 and 39, and even over 50,” Knight notes.

The oil sands also fare better than the conventional oil industry at employing Aboriginals and other under-represented groups. “Five per cent of oil sands employees are Aboriginals, compared to 2.5 per cent for the overall work force,” she says. Syncrude and Suncor are especially noteworthy for their 10 per cent Aboriginal employment targets. Knight also points out that more and more producers are targeting under-represented workers.

A measure of vision In addition to high-quality day-to-day management and skilled labour, excellent leadership is needed for the oil sands to prosper. “Every now and then, special people came along who were game-changers, putting their

careers and reputations at risk,” says Clement Bowman, retired vice-president of Esso Petroleum Canada. He believes that the industry has succeeded because these strong-willed visionaries helped it surmount obstacles.

Bowman thinks the industry needs just their sort of courage, persistence and far-sightedness.

“Maybe the issues are now beyond the capacity of a single individual. Perhaps a group of private sector leaders could band together to find and support an individual who could galvanize the national will and commitment to make the next big leap forward. I am astonished that a national leader has not emerged and taken this on as a Canadian ‘moon shot’,” says Bowman. He sees the industry’s current situation as being unique because the challenges probably cannot be resolved internally.

“Some of the current problems can be met by integrating energy resources,” says Bowman. “For example, hydrogen is essential for the oil sands. Producing it from natural gas is not a viable long-term solution, but it can be produced by coal gasification or by water electrolysis,” he observes, concluding that individual companies cannot be expected to meet all the current challenges through their own efforts. “A new form of public-private sector partnership will be necessary. And it’s worth undertaking, because energy is Canada’s last chance.” CIM

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coal and oil sands

Photo courtesy of EarthRenew

EarthRenew CEO Christianne Corin and president and COO Al Fedkenheuer holding bucket of fertilizer at the Strathmore facility

by Marlene Eisner

L

ast February, Alberta’s Energy Resources Conservation Board (ERCB) issued a new directive outlining aggressive criteria for managing tailings in the oil sands industry. Among other things, the ERCB focused attention on reducing fluid fine tailings at oil sands operations and set timelines for reclamation of designated disposal areas. These measures are aimed at accelerating the transformation of tailings into reclaimed land.

There are currently more than 130 square kilometres of tailings disposal areas in the oil sands region. After open pit mining, hot water is used to separate very heavy oil (bitumen) from the sticky sand. Following its use in the process, this water — which also contains clay, sand and residual bitumen — is then sent to a tailings pond, often a discontinued mine pit. A percentage of the tailings water is recycled back for use in the bitumen extraction process.

Several research facilities and businesses have been developing and applying new reclamation techniques and attempting to reduce the use of fresh water in oil sands extraction.

Water, water everywhere Shell Canada’s Athabasca Oil Sands project in northern Alberta exemplifies the company’s efforts to produce “trafficable” tailings. Such tailings can eventually be walked on or driven over, and can go a long way in meeting the objective of accelerated reclamation of excavation pits and tailings ponds.

In 2008, Shell commissioned a $100 million tailings pilot plant at the Muskeg River mine in order to meet the new government guidelines. “While the directive is technically challenging, Shell has invested substantially in tailings research,” says Laurieanne Lynne, communications advisor, September/October 2009 | 53

coal and oil sands Corporate Shell Canada Limited. “Engineering work started before the ERCB issued its tailings directive as part of Shell’s commitment to sustainable oil sands development. So far, the results of our efforts to create trafficable tailings have been encouraging.”

One of the goals is to improve fresh water management at Shell’s oil sands mining operations and the Scotford Upgrader. New technologies and processes are being developed to increase water treatment, recycling and storage at both facilities. Shell typically uses large volumes of water, primarily from the Athabasca River, to separate bitumen molecules trapped in the sand and clay. “On average, the oil sands industry uses two to three barrels of fresh water to extract one barrel of bitumen,” Lynne reports. “But we work hard to manage our water use by recycling as much water as possible from the tailings ponds.”

All water recovered from the tailings ponds and within the process is recycled back through the operation.

Nevertheless, some of it is lost to evaporation and to the interstices between clay and sand particles that were originally occupied by the bitumen. For even more significant reduction in the use of fresh water, the water loss has to be minimized. This is another reason why Shell is developing technologies to produce drier tailings. Currently, Shell’s tailings ponds measure about 12 square kilometres, with a government-approved extension underway.

And while the tailings get drier and drier, Shell is also recycling water more diligently. At the Scotford Upgrader, effluent from a wastewater treatment plant is being reused, resulting in a 10 to 15 per cent reduction in its water intensity. The company is also exploring opportunities to implement a “zero liquid discharge” system.

Squeezed dry In 2002, BDP Industries introduced the Sahara model belt press, specifically designed for the mining industry and used for dewatering waste tailings to produce a dry, stackable, compactable waste. “Instead of discharging the waste to sediment ponds, the belt press makes a stackable material you can landfill or fill back in the mine at the time of reclamation,” explains Kelly Brown, director of sales at BDP Industries.

Although belt presses have been used in the mining industry for years, they were problematic and unable to hold up well under rigorous mining conditions, typically breaking down after three or four years. “To address this problem, we decided to specifically design the Sahara press for the mining industry,” says Brown.

Rick Allen manages Vulcan Materials’ engineering services in South Carolina. He reports that since the company began using two three-metre Sahara belt presses in October 2008, tailings ponds have become a thing of the past. “We originally had about three and a half acres of tailings ponds that we’ve eliminated,” he says. “The Sahara belt press produces a product you can handle with a dozer or a front-end loader. We put this in a pit we’ve abandoned.

Our waste, which is about seven per cent solid, goes over to a clarifier that makes it 40 per cent solid. This is then sent to the Sahara press and comes out as a nice dry cake that is 75 per cent solid,” Allen explains.

In addition to producing waste that is easier to handle, the process has allowed Vulcan to recover and recycle more of the water that would otherwise end up in the tailings ponds.

The Sahara belt press can also be used in oil sands production to produce drier waste and reduce or eliminate tailings ponds. While it is not yet widely used in the oil sands industry, Brown affirms that the Sahara could recover liquid in the slurry stream that could be reused. “What the belt press does is recover 95 per cent of the liquid that can then be sent back to the front end of the plant, plus you have a dry cake that can be compacted and driven on. You significantly reduce your tailings footprint and the volume of your waste stream.”

Baked to perfection Christianne Carin is the CEO and primary inventor of technologies at EarthRenew, a Calgary-based private clean technology company. EarthRenew has developed, patented and implemented energy-efficient heat processing technologies that can be applied to the oil sands industry, combining the reuse of water with a high-powered fertilizer that promotes faster reclamation.

54 | CIM Magazine | Vol. 4, No. 6

Diagram courtesy of EarthRenew

coal and oil sands

“The primary strength of our technologies is heat processing efficiency,” explains Carin. “It turns organic waste materials, like manure, into high-value customized reclamation products.”

Manure is cooked at 1,000 degrees Fahrenheit. This flashes off the water and changes the composition of the material, breaking down most chemical compounds, rendering them nonviable. The result is a concentrated organic matter and fertilizer in granule or pellet form. Applied to coarse and fine tails, it particularly promotes the growth of native plants, thus facilitating rapid reclamation of a self-sustaining ecosystem.

While the technology is used primarily in agriculture, Carin says it is transferable to the oil sands industry. “The machine doesn’t care if it’s manure or oil sands material. It’s a rapid drying system that would dehydrate the tailings.” Carin contends that up to 98 per cent of the water, which would be removed and purified by the high heat, could be recycled back into the operation. The high heat would also burn off September/October 2009 | 55

coal and oil sands the petrochemicals and break down other chemicals, rendering them non-viable. The resultant dry product could be incorporated into the reclamation site, where it would be mixed with the high-powered organic matter fertilizer. “Because it’s concentrated organic matter, it helps reclaim the land quickly as vegetation grows back easily.”

Experimental application of this technology to the oil sands has yielded positive results in the laboratories of Dr. Anne Naeth, a professor of ecology at the University of Alberta. However, Carin says the process is “fairly new in the sense that we’ve applied it to waste renewal, but we haven’t applied it to tailings ponds.”

Convinced nonetheless of its transferability, Carin patented the technology’s oil sands application last year.

“The new regulations are all about moving

more quickly

Water to walk on Seeing the possibilities Suncor has nine existing tailings ponds that cover a total of 31.8 square kilometres and contain approximately 230 million cubic metres of mature fine tailings. The company’s Pond 1, which began undergoing progressive reclamation in 2007, is currently on track to mark a milestone. In 2010, it will become the first trafficable oil sands tailings pond with progressive surface reclamation underway. This will be accomplished by removing enough

56 | CIM Magazine | Vol. 4, No. 6

to reclaiming ponds to create dry, useable landscapes” — C. Fordham

of the mature fine tailings to make the “slush” solid enough to support people, animals and trees.

Suncor has been focused on exploring the possibilities of accelerating tailings pond reclamation long before the directive issued by the ERCB. In the 1990s, the company pioneered the use of consolidated tailings (CT) technology to hasten settling. The addition of gypsum sped up the release of water from the tailings, reducing to years, instead of decades, the time required to achieve a solid surface.

“CT technology is working, but it’s still too slow for our liking,” says Chris Fordham, Suncor’s manager of strategy and regional integration. “That’s why we’ve been investing in research on new de-watering technologies.

These could result in another quantum leap in how fast we can reclaim existing and future tailings ponds.

We are now looking for opportunities to test if these technologies can work on a commercial scale.”

Technologies that Suncor is investigating include dry tailings, centrifuges, enhanced CT technology and petroleum coke capping.

Suncor’s goal of eliminating the need for new tailings ponds as the ultimate objective fits in with Alberta’s new regulations. “The new regulations are all about moving more quickly to reclaiming ponds to create dry, useable landscapes. The technologies we’ve been developing should help achieve that objective,” says Fordham.

“Frankly, even with recent advances in technology, these regulations are going to be challenging,” he admits. “But it’s a challenge we welcome. Holding the entire oil sands industry to a high standard of performance will benefit everyone and will hopefully improve the public perception of this industry.” CIM

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Photo courtesy of EBA Engineering Consultants Ltd.

coal and oil sands

Employees from EBA Engineering Consultants Ltd. monitor water quality to assess if there are any environmental impacts from mining-related activities.

Suppliers are helping the coal and oil sands industries to address environmental concerns

by Michelle Sabourin

M

ining companies active in the oil sands and coal sectors have long been concerned about and doing much to mitigate their impact on the environment. Assisting them greatly in their endeavours is a growing number of “green” suppliers — vendors and consultants who are working diligently with industry and government to reduce, or even eliminate, potentially negative environmental impacts. They offer a plethora of generally applicable and highly specialized products and services that help mining companies work towards a cleaner, greener and more sustainable future.

Water: protection and management The Canadian coal and oil sands industries operate in one of the world’s most stringent environmental regulatory frameworks. These regulations exist to ensure that our energy resources are developed safely, responsibly and efficiently. Protecting water supplies and aquatic life are among their primary objectives.

58 | CIM Magazine | Vol. 4, No. 6

Monitoring and permits Companies like EBA Engineering Consultants Ltd. help mining companies comply with strict environmental regulations and assist them in obtaining the necessary permits.

Among EBA’s expansive list of environmental services is environmental baseline data acquisition. Before any development on a project occurs, natural sciences teams collect comprehensive ecological data such as surface and groundwater quality and chemistry, fish and aquatic resources, and stream and river flows. “That way, when you’re monitoring during construction and operations, you have the baseline background data to compare with operational data,” explains Martin Jarman, EBA’s senior project manager and market director of mining environmental services. “This helps ensure that you’re maintaining status quo as much as possible.”

The baseline data can also help weave mitigation measures into the mine design. Roads and buildings can be constructed to avoid disrupting stream or river flows, particularly

coal and oil sands Photo courtesy of Layfield Group

near sensitive wetlands. Tailings ponds can be designed and located for minimal environmental impact.

EBA also develops and conducts environmental effects monitoring programs to establish, for example, whether effluents from a mine are affecting aquatic environments.

Hydrocarbons and heavy metals are of concern with discharges from oil sands, whereas with coal mining, the selenium content of waste must be monitored.

Numerous regulatory standards accompany any government approvals for effluent discharges from mines.

However, as Rick Hoos, a principal consultant at EBA, points out, meeting those standards is not always enough. â&#x20AC;&#x153;When it comes to regulatory concentrations, the numbers themselves are designed to protect the environment. But sometimes, those numbers might not be safe enough,â&#x20AC;? he explains. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s why we do additional monitoring to confirm that even if the requirements are met, the effluents still cause no problems downstream.â&#x20AC;?

Containment The Layfield Groupâ&#x20AC;&#x2122;s silt and sediment control products help prevent fine soil particles from running off into and clouding local water courses. Such run-offs occur when vegetation is removed or construction takes place, and can damage aquatic ecosystems. They can also damage the habitats of fish such as trout and salmon that

The Layfield Group provides a myriad of specialty liners for different environmental functions at mine sites. This liner is being installed as the waterproof core in a dam for a tailings pond at a gold mine in Siberia.

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September/October 2009 | 59

coal and oil sands Wind and aeration Mines often store the overburden removed during construction and production for reuse during reclamation.

Sometimes the topsoil is only temporarily stockpiled, such as in the case of short-term land stripping for pipeline installations. Regardless of whether overburden is stored for weeks or years, wind erosion on stockpiles poses a significant environmental problem.

Photo courtesy of IW Kuhn Environmental Ltd.

require clean gravel to lay eggs on. Layfield-supplied silt fences, silt curtains and turbidity barriers prevent most of the fine sediment from flowing into the water and covering the gravel.

The company’s Aqua Dam® product altogether stops sediment from flowing into rivers and streams. The waterfilled dam that can block or divert streams is typically used at shoreline worksites or in works that cross streams, such as pipeline installations. “With this product, you can work in a relatively dry area in the middle of the stream,” explains Andrew Mills, research and technology manager for the Layfield Group. “And when you’ve finished, you can go in and fix the streambed, before the Aqua Dams® come down.”

Layfield also makes liners that can be used in tank berms, sumps, waste water ponds and detention ponds. A specialty liner for high-temperature applications withstands the heat below heavy oil tanks and prevents any environmental release of bitumen.

Land reclamation and remediation Like all Canadian mining operations, oil sands and coal producers are legally required to return any land they disturb to equal or greater productivity. A multitude of companies help the two industries to successfully restore the land and reduce their overall footprint.

Hydroseeding involves the sowing of seeds with a hosed jet of water

“ROCK SOLID” SOLUTIONS FOR YOUR CHALLENGES Expertise in pump hydraulic calculation and selection plus continuous investment in developing new materials have made GIW a leader in the oil sands industry. GIW’s pump systems have been transporting oil sands slurry for over 20 years and doing it more effectively than any other slurry pump running today.

GIW knows downtime is expensive. Located in the heart of Ft. McMurray, the GIW REGEN service centre can have pumps and systems back online quickly. REGEN offers emergency parts and service on a 24/7 basis. With a complete stock of standard parts and lubricants, there is no need to maintain extra parts in costly on site inventory.

Keep your replacement wear parts close to home. Use GIW’s slurry pump expertise.

GIW Canada 220 MacLennan CR Fort McMurray, Alberta T9H 4E8 Canada 780.713.3457 www.giwindustries.com

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60 | CIM Magazine | Vol. 4, No. 6

2:54 PM

coal and oil sands

Photo courtesy of Denbow Transport Ltd.

IW Kuhn Environmental Ltd. provides a few solutions to this problem. For example, steep topsoil piles can be revegetated via hydroseeding — the sowing of seeds with a hosed jet of water. Alternatively, especially if the topsoil piles are temporary, spray-on tackifiers can combat wind erosion. “Tackifiers have a calcium lignosulfonate base — tree sap,” explains Roger Didychuk, vice-president of corporate development at IW Kuhn. “The stuff is completely environmentally friendly so, when you put the topsoil back, it won’t pose a problem.”

IW Kuhn also offers soil remediation services. In the event of a pipeline break, or other small-scale hydrocarbon spills, the company can aerate the soil by turning it with twister buckets, windrow turners or a microenfractionator. Usually at the time of turning, chemical agents are added to the soil to accelerate the natural attenuation of the hydrocarbons.

WSE also provides completely degradable erosion control blankets that are held in place by biodegradable stakes made from a modified corn starch. One such blanket that they often recommend is made from a 100 per cent biodegradable, wildlife-friendly organic fabric whose loose weave allows entangled reptiles or other animals to wiggle free without injury.

Compost and Terraseeding™ Denbow Transport Ltd. provides innovative products and services for landscaping and environmental projects, including mine site land reclamation. One of the company’s unique services is on-site composting and the beneficial reuse of materials such as land-clearing debris and wood waste for land restoration.

“We take woody debris generated from land-clearing activities that would normally be burnt or buried and turn it into a valuable resource — engineered materials for erosion and sediment control and reclamation,” says Jared Taylor, manager of landscape and environmental services at Denbow. In addition to being used as compost erosion control blankets, the compost can also be utilized in socks, berms or retaining walls for sediment control purposes.

Denbow also specializes in a seeding method called Terraseeding™, a process in which seed, proprietary additives such as minerals and tackifiers, and growing mediums

Land reclamation project at Britannia mine in British Columbia. Seeds were supplied

by Western Seed and Erosion Ltd. and were sown by Denbow Terraseeding™.

Seeding and biodegradability Seed suppliers such as Western Seed and Erosion Ltd. (WSE) play a vital role in helping mines reclaim disturbed land into sustainable, vegetated and bio-diverse landscapes. When it comes to reclamation, Alberta-based projects face the added constraint of having to use provincially mandated seed mixtures that guarantee successful vegetation growth and prevent the introduction of foreign species or the overuse of any one species.

WSE provides consultation on proper site-specific seed selection and supplies the seeds, fertilizers and additives to go with it. WSE president Russ Paton calls this service a complete reclamation prescription. “We put it all together in one package so that from an expertise point of view it is really effective,” says Paton. “It is also logistically effective, especially when dealing with revegetation at exploration sites, where the quantities required can be low but the challenges of getting them to the site are high.”

September/October 2009 | 61

Diagram courtesy of Alter NRG Corp.

coal and oil sands

Alter NRG’s process takes waste streams and converts them into high-quality Syngas – a fuel source for other downstream processes such as steam or power generation.

are electronically combined and placed simultaneously.

Taylor says that Terraseeding™ offers many advantages over conventional seeding methods due to the fact that seed is planted rather than placed on the soil surface where it is subject to weather conditions. The result is quicker, healthier vegetation establishment and ultimately sustainable landscapes.

Energy savings Some companies are facilitating environmental stewardship by offering alternative energy solutions. Backed by extensive research, such suppliers provide ways to use and even produce energy more efficiently.

Heat and efficiency EarthRenew has developed and commercialized myriad “green” technologies applicable to coal and oil sands projects. Their patented Waste Renew ™ facilities can process and “cook” manures, biosolids or green wastes into organic fertilizers that could be used in land repair applications.

Another of the company’s solutions, Energy Renew™, offers considerable savings and environmental benefits by delivering more energy-efficient fuel usage.

“Our Energy Renew™ process uses a gas-fired turbine engine to generate electricity,” explains Mark Kennedy, EarthRenew’s CFO. “The electricity can then be sold to offset the cost of fuel, whereas the heat 62 | CIM Magazine | Vol. 4, No. 6

exhaust off the turbine engine can be used directly in an industrial process.”

“Right now, the coal and oil sands industries are burning natural gas, for example, for the production of steam,” adds Don Dabbs, EarthRenew’s vice-president, special projects.

“We burn natural gas too — only we get far more use out of it. Our process is 85 per cent efficient — 60 per cent more efficient than just burning natural gas — because we generate electricity at the same time.”

Innovation and waste streams Alter NRG Corp. has commercialized a revolutionary technology that provides environmentally responsible industrial energy solutions. Their process converts waste streams, like wood debris or even by-products such as coke, into fuels.

“Typically, waste streams are disposed of at high cost,” says Alex Damnjanovic, vice-president of strategic alliances at Alter NRG. “Now, the waste stream can be used as feedstock for our gasifier. From the waste source, we generate syngas, which can be used to create valueadded products such as steam or even biofuels, such as diesel.”

Rather than being dumped in landfills at the risk of further environmental impacts and greenhouse gas emissions, waste streams are converted into useful energy and products. As an added benefit, the process

lors du Congrès et Salon commercial 2010 de l’ICM

Rencontrez les principaux « joueurs » de l’industrie en participant au programme technique Accédez aux fournisseurs, entrepreneurs et consultants de l’industrie au Salon commercial

Discutez avec les gourous de la finance pendant la Journée Finance et Gestion des mines Étendez votre réseau de contacts en rencontrant des congressistes internationaux Échangez des idées et établissez de nouveaux contacts durant les ateliers Faites de nouvelles connaissances pendant les excursions sur le terrain Frayez avec les leaders de l’industrie lors des événements sociaux Ajoutez à la visibilité de votre entreprise grâce aux commandites Recrutez du personnel au Salon de l’emploi

Congrès et Salon commercial 2010 de l’ICM

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Camion de transport à la mine Coal Moutain

De nouvelles réalités économiques et démographiques redéfinissent l’industrie canadienne du charbon

L

es sommets abrupts et les vallées cachées des montagnes de la Colombie-Britannique et de l’Alberta contiennent la plus grande partie du charbon métallurgique du Canada; ce paysage est à l’image des fortunes de ceux qui l’extraient. Vers l’est, sur les plaines du centreouest du Canada, qui contiennent le charbon thermique, le relief est plus estompé mais permet de voir plus loin.

Le charbon métallurgique, connu aussi comme charbon cokéfiable, possède une faible teneur en soufre et en phosphore; il sert de carburant pour les hautfourneaux des aciéries. Il représente environ 40 pour cent des 68 millions de tonnes de charbon extraites au Canada et la plus grande partie du charbon exporté.

La demande stable pour l’électricité produite par le charbon thermique le protège un peu contre le climat

économique mondial morose. Ce charbon représente 20 pour cent des exportations canadiennes de charbon; il sert dans les fours à ciment et autres applications industrielles. « L’année fiscale 2008 a été exceptionnelle pour le charbon, métallurgique et thermique », dit Ernie Lalonde, analyste du charbon et vice-président principal de l’agence de cotation DBRS. « Le charbon métallurgique a brisé tous les records. La croissance sans précédent, la demande de la Chine, tout y a contribué. » Les aciéristes chinois magasinent de nouveau pour des aubaines. « L’année 2009 verra une hausse de l’activité des marchés au contant pour les exportations de charbon métallurgique vers la Chine », déclare Robert Stan, président de Grande Cache Coal. « Cela représentera une manne pour plusieurs producteurs de charbon métallurgique. » September/October 2009 | 65

Photo courtoise de Teck Coal

charbon et sables bitumineux

charbon et sables bitumineux « La Chine est le seul pays au monde où l’aide financière peut être rapidement mis au travail. Les fournisseurs de biens de base regardent tous la Chine et se demandent combien de temps cela va durer. Pour le charbon métallurgique, l’impact a été impressionnant au cours des six derniers mois », dit Boyd Payne, PDG de Teck Coal, le deuxième plus grand fournisseur de charbon métallurgique à l’industrie mondiale de l’acier.

Pour Grande Cache, le revirement a été surprenant. La compagnie rapportait des ventes de seulement 110 000 tonnes dans les trois premiers mois de l’année. « C’était notre pire trimestre depuis que nous avons commencé à produire », dit M. Stan. Le trimestre suivant, malgré des prix abaissés de plus de 200 $, les ventes ont augmenté pour atteindre un peu plus d’un demi-million de tonnes. « C’est sans contredit les marchés au comptant avec la Chine qui nous ont fait atteindre ce sommet. Est-ce que cela signifie que la Chine deviendra un importateur net plutôt qu’un exportateur net? Les marchés ne connaissent pas encore la réponse. » Le défi actuel est de continuer sur notre lancée et de maintenir le pas avec les économies en développement, plus lentes mais stables. « Nous faisons affaire avec la Chine dont le taux de croissance est de 7 à 8 pour cent par année », explique Pierre Gratton, président de la Mining Association of British Columbia. « Bien qu’il ne s’agisse plus de 11 à 12 pour cent, c’est quand même phénoménal. Les bases pour une croissance à long terme dans le secteur du charbon métallurgique sont excellentes. La Chine s’industrialise rapidement et elle ne peut s’arrêter; l’Inde et le Brésil suivent de près. » Le lien entre les marchés chinois et les fournisseurs canadiens continue à se renforcer. Grande Cache essaie de convertir les affrètements au comptant ou à la demande en contrats à long terme. « D’ailleurs, une nouvelle mine Grande Cache doit entrer en production cet automne », dit M. Stan.

En juillet, le fonds d’investissement de la Chine a dépensé 1,74 milliards de dollars canadiens pour obtenir 17 pour cent des actions de Teck, sans résistance de la part du public ni du gouvernement. « Le Canada possède les ressources dont tous ont besoin », dit M. Lalonde. « Puisque la production actuelle est dans les mains de relativement peu de compagnies — Teck et Sherritt étant les plus grosses — les investisseurs internationaux cherchant des investissements d’envergure dans le charbon canadien devront cibler le développement de propriétés. » Dans le nord-est de la Colombie-Britannique, l’évolution de l’industrie du charbon a aussi nécessité des adaptations quant à la mise en production des propriétés. La compagnie contractante Ledcor est actuellement dans les dernières étapes du transfert des opérations de la mine Perry Creek à Western Canadian Coal. Embauchée depuis 2005, Ledcor a utilisé une approche novatrice pour développer la mine. « Nous nous sentions plus les 66 | CIM Magazine | Vol. 4, No. 6

exploitants de la mine qu’une compagnie contractante », dit Randy Daggitt, vice-président – mines, Ledcor. Le mandat du contrat était de livrer une exploitation clé en main pour que les propriétaires effectuent toutes les opérations. La situation était unique en raison de la pleine intégration de l’équipe. Le personnel de Perry Creek avait été embauché par Ledcor mais les entrevues avaient été réalisées par la direction de Western puisqu’en bout de ligne les employés relèveraient de Western. » La chute récente des marchés a fait réfléchir de nombreux gestionnaires. Allan Cullen, de Cullen Diesel Power, a travaillé fort pour lutter contre la réduction des effectifs. Les économies générées par une réduction de sa main-d’œuvre auraient pu lui coûter son avantage concurrentiel. « Nous devons maintenir notre clientèle », dit M. Cullen. « Pour ce faire, nos employés de métier spécialisé doivent être prêts à travailler immédiatement lorsque le travail reprendra. » En attendant, Ledcor réorganise sa formation pour tenir compte des nouveaux travailleurs. « Nous avons des procédures normalisées pour tout, des tâches les plus simples aux plus complexes. » Les compagnies prévoyant la retraite de la génération du baby-boom se bousculent pour embaucher du personnel de direction à contrat. « C’est assez innovateur, nous avons tous des outils de planification mais certains s’en servent pour les niveaux exécutifs », dit M. Daggitt.

Selon plusieurs, une exploitation minière utilise temporairement un terrain donné. Il faut donc soutenir cette affirmation en contrôlant et en gérant bien le legs environnemental inévitable du soutirage de millions de tonnes de charbon du sol. À la mine Genesee, à l’ouest d’Edmonton, Sherritt et Capitol Power ont initié un programme de remise en état du terrain. L’automne dernier, le sol riche en graines, en matière organique et en racines d’arbres d’un terrain bientôt exploité a été transféré vers un secteur préparé afin d’accélérer le rétablissement de la flore. Un relevé préliminaire effectué cet été a trouvé que le site d’essai comportait environ 80 pour cent des espèces végétales trouvées sur les terrains non perturbés. « Vous pouvez rebâtir la forêt sans planter – transposez le sol et les arbres pousseront gratuitement », explique Dean MacKenzie de Navus Environmental. « Nous recherchons constamment comment mieux utiliser le charbon thermique. Si vous analysez les marchés un tant soit peu, vous verrez que son utilisation croît de façon constante. C’est une ressource abondante et à bon marché », dit M. Lalonde.

The Bow, le futur siège social d’Encana, est en construction au cœur de Calgary. C’est un témoignage à la robustesse des industries du gaz et du pétrole. « À mesure que monte la structure, je ne pense qu’à la quantité de charbon qui a servi à fabriquer l’acier de ces poutres », dit Allen Wright de la Coal Association of Canada. ICM

Photo courtoise de Boart Longyear Canada

charbon et sables bitumineux

L’industrie canadienne des sables bitumineux file vers l’avenir avec confiance

L

es sables bitumineux de l’Alberta sont essentiels pour les besoins énergétiques actuels et futurs du Canada. Pensons à leur rôle uniquement dans deux aspects de l’économie – les emplois et les investissements. Chaque emploi permanent créé dans cette industrie en génère neuf autres; quelque 240 000 emplois canadiens y sont donc reliés directement ou indirectement.

Du côté des investissements, 59 milliards de dollars ont été investis dans ce secteur entre 1997 et 2006. Cette industrie a aussi le potentiel de générer au moins 123 milliards de dollars en redevances et en revenus fiscaux entre 2001 et 2020.

Malgré la taille de cette industrie, elle n’a pas été épargnée des crises qui ont assailli l’économie mondiale.

La plupart des exploitations survivent mais de nombreux projets de construction et de développement ont été mis sur la glace, alors que les propriétaires attendent le retour de la confiance des investisseurs et des consommateurs.

Nancy Lever, directrice principale chez ARC Financial Corp., une société privée de capitaux propres ciblant l’énergie, est optimiste. « Il y a eu un ralentissement, mais les perspectives à long terme sont très positives. Les prix des matériaux et de la main-d’œuvre ont commencé à baisser.

C’est un bon signe. » Touchés par le ralentissement, les fournisseurs de l’industrie croient aussi à un bon avenir. « Nous croyons que la récession sera de courte durée »,

dit Greg Lucyshyn, directeur des contrats avec le fournisseur de services de forages, Boart Longyear Canada.

Paraphrasant la célèbre citation de Mark Twain, Chris Yellowega, vice-président des opérations, North American Construction Group, dit : « Les rumeurs de la mort des sables bitumineux ont été grandement exagérées. La plupart des intervenants profitent du ralentissement pour accroître l’efficacité opérationnelle et ils se préparent à tirer profit des nouvelles occasions qui se présenteront. » Selon David McColl, directeur de la recherche - Institut canadien de recherche énergétique, Calgary : « La crise du crédit et l’effondrement des prix de l’énergie peuvent constituer une occasion pour l’industrie de prendre du recul et de cibler les prochains développements dans les sables bitumineux. » Il croît que c’est le bon moment de recruter la main-d’œuvre de haute qualité qui a été mise à pied par d’autres compagnies, d’obtenir des fournitures à coût raisonnable et de se préparer au retour de l’activité économique. Il cite la décision d’Imperial Oil d’aller de l’avant avec le projet des sables bitumineux Kearl comme un bon exemple de pensée stratégique.

Ce projet avait été mis en veilleuse en raison des coûts élevés de construction. Il sera développé en trois étapes et la production pourrait atteindre plus de 300 000 barils de bitume par jour. Les coûts de construction devraient être d’environ 8 milliards de dollars, soit approximativement 4,50 $ par baril.

September/October 2009 | 67

charbon et sables bitumineux Les travaux en cours comprennent la préparation du site, le drainage de la fondrière et l’installation des services. « Les plans détaillés, les achats et les travaux à contrat vont bon train », rapporte Pius Rolheiser, chef de l’équipe médiatique d’Imperial Oil à Calgary. « Au total, plus de 1000 personnes travaillent au projet Kearl. » Imperial effectue des consultations poussées avec les intervenants. « Nous avons surtout consulté les communautés des Premières nations; c’est sur leurs terres qu’une grande partie du développement sera effectué. Leurs préoccupations portaient principalement sur les impacts environnementaux et socio-économiques », dit M. Rolheiser.

Les interventions ont influencé la conception du projet.

Par exemple, Kearl aura un réservoir pour entreposer l’eau, diminuant la quantité d’eau prise dans la rivière durant les périodes d’étiage. « L’Imperial aura aussi un ‘lac de compensation’; selon les suggestions des membres des Premières nations, nous l’avons fait plus creux que le lac existant afin que les poissons survivent à la période de gel; ils nous ont aussi conseillés quant aux espèces de poissons à y introduire. » L’Imperial poursuit aussi ses plans d’expansion à Cold Lake. En 2008, ses quatre usines produisaient une moyenne de 150 000 barils par jour. Lorsque prêt, le nouveau secteur, Nabiye, ajoutera 30 000 barils de bitume par jour à la production de Cold Lake. « La compagnie rehausse la technologie et propose trois modifications écologiques », dit M. Rolheiser. « La première réduira les effets potentiels sur les sols, la végétation et la faune du secteur à développer », explique M. Rolheiser. « De plus, l’utilisation de puits horizontaux diminuera le nombre de forages pour atteindre le réservoir. Les effets sur l’eau souterraine seront aussi amoindris. » La deuxième modification est l’ajout d’une installation de cogénération d’électricité et de vapeur de 170 mégawatts avec deux récupérateurs de vapeur. « L’usine alimentera l’exploitation Nabiye et le surplus d’énergie sera retourné au réseau provincial », dit M. Rolheiser. Cet ajout augmentera les émissions mais les paramètres des cheminées des unités de cogénération amélioreront la dispersion, abaissant ainsi les concentrations au niveau du sol. La troisième modification proposée est l’ajout de capteurs liquides pour retirer 70 pour cent du soufre dans le gaz de précombustion produit.

En août 2009, Canadian Natural Resources Limited (CNRL) a annoncé que, grâce en partie au projet des sables bitumineux Horizon, les revenus du trimestre se terminant le 30 juin avaient été de 162 millions de dollars.

Horizon, situé à 70 kilomètres au nord de Fort McMurray, est une exploitation de surface avec des installations connexes d’extraction et de traitement du bitume. Le président de CNRL, Allan Markin, a dit récemment : « L’accroissement de la production progresse bien et dépasse même les estimations corporatives. » Des forages estiment une présence de 16 millions de barils de bitume dont 6 à 8 sont récupérables avec les technologies existantes. Horizon générera des retombées économiques 68 | CIM Magazine | Vol. 4, No. 6

importantes pour l’Alberta et le Canada au cours de sa vie de 40 ans, créant environ 25 000 personnes-années d’emplois directs durant la construction. À pleine capacité, le projet devrait employer environ 2400 personnes.

Dans une industrie de gros employeurs, le Projet 1 d’expansion des sables bitumineux de l’Athabasca ressort clairement. Selon Laurieanne Lynne, conseillère corporative en communication pour Shell Canada, ce projet extrêmement complexe impliquera des milliers de travailleurs sur plusieurs années. « Cette expansion figure parmi l’un des plus grands projets syndiqués au Canada.

Nous employons surtout des entrepreneurs canadiens pour ce projet et tous nos projets de sables bitumineux. » La moitié des équipements et des matériaux proviennent de compagnies canadiennes, dont 20 compagnies autochtones qui détiennent des contrats d’une valeur totale de 20 millions de dollars. « Nous sommes parmi les plus importants formateurs de main-d’œuvre spécialisée au Canada. Dans le moment, 30 pour cent des travailleurs sont des apprentis », dit-elle.

Ce projet gigantesque, commencé en 2006 et devant être complété en 2011, comprend les nouvelles installations minières de la mine Jackpine, l’agrandissement des installations de traitement des mousses à la mine de la rivière Muskeg et l’expansion de l’usine de valorisation de Scotford.

Le défi de trouver et de garder des employés formés et motivés a attiré l’attention du Conseil canadien des ressources humaines de l’industrie du pétrole. Le conseil explore de nouvelles sources de main-d’œuvre pour les sables bitumineux, incluant d’anciens travailleurs du secteur des pâtes et papiers de la Colombie-Britannique. « Plusieurs des habilités de ces travailleurs sont transférables aux sables bitumineux, surtout le travail avec la vapeur », dit Cheryl Knight, présidente-directrice générale du conseil. Il existe aussi une forte demande pour des mécaniciens d’outillage, des soudeurs, des tuyauteurs et des mécaniciens de machinerie lourde.

Les sables bitumineux emploient aussi de nombreux Autochtones et membres d’autres groupes sous-représentés. « Cinq pour cent des employés des sables bitumineux sont des Autochtones, par rapport à 2,5 pour cent pour l’ensemble de la main-d’œuvre », poursuit-elle; Syncrude et Suncor visent 10 pour cent.

En plus de bons gestionnaires et de travailleurs qualifiés, les sables bitumineux ont besoin de leadership pour se développer. Selon Clement Bowman, ancien vice-président à la retraite d’Esso Petroleum Canada, l’industrie a réussi parce que des visionnaires l’ont aidé à surmonter les obstacles. « Les enjeux dépassent maintenant peutêtre la capacité d’un seul individu. Un groupe pourrait trouver et soutenir un individu qui mobilisera la collectivité et qui prendra l’engagement d’entreprendre la prochaine grande étape. Une nouvelle forme de partenariat publicprivé sera nécessaire; ça vaut la peine de l’entreprendre parce que l’énergie constitue la dernière chance du Canada. » ICM

supply side Mining suppliers are suffering just like explorers and producers

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

❚ Jon Baird According to an article in the Globe and Mail on June 12, 2009, just 55 per cent of Canada’s mining capacity is currently in use. The Canadian mining industry’s capacity utilization rate fell by 18.1 per cent in the first quarter of this year from the previous quarter.

The production of potash, zinc, coal and nickel has been slashed in response to the commodity price crash. Depending on what happens to mined commodity prices (which are set by the global market in US dollars), this slackness in production may build even further if our dollar continues to rise.

In Sudbury, major operations have ground to a standstill. Xstrata has permanently shut its mines as it develops a new deposit. Vale Inco is in the midst of a two-month shutdown of its facilities. Instead of producing 1.8 million tonnes of ore this year, FNX expects to produce just 700,000 tonnes — nearly all of it copper and precious metals — as it waits for nickel prices to stabilize.

Natural Resources Canada reports that surveys of 795 operators estimate total exploration expenditures in Canada in 2008 at $2.8 billion, virtually the same as the previous year’s record. However, as of March, their estimates were that spending in 2009 would reach only about half of last year’s level.

Canadian mining suppliers depend on exploration spending, the construction of new and expanded mines, and ongoing production for their livelihood. All of these activities are now at very low levels and have been for about a year now. Although you will not be reading about it in the general press, mining supply firms

were likely the first and hardest to be hit in the current downturn.

IndexMundi’s (www.indexmundi. com) Commodity Metals Price Index (comprising copper, aluminum, iron ore, tin, nickel, zinc, lead and uranium) dropped by 50 per cent, from a high in February 2008 to the

On the supply side, exploration is now largely on hold and major deposits are becoming more and more difficult to find.

On a positive note, the June 10, 2009, weekly commentary of Peter Hall, Export Development Canada’s vice-president and chief economist, held out hope that some of the largescale projects that have been shelved because of the commodity bust will be re-started. His thesis is that when prices for mined commodities fell, so did input costs.

Everything from steel to copper and other base metals, fuel and building materials, and machinery and equipment has seen price compression in the last year. Thus, on the cost front, projects are now viable at much lower commodity price levels than they were a year ago. Thus, low prices may have cancelled some projects but, ironically, may also bring them back to the table.

Of course, mining suppliers will welcome the rejuvenation of projects currently on hold, as well as news that shuttered operations will resume production. CIM

When the recovery does come,

I expect that it will be bigger and better than ever. recent low in February 2009. From February to May, however, a 17 per cent recovery has been registered.

Hopefully, commodity prices will continue to rise, although they are still a long way from the giddy heights seen throughout 2006, 2007 and 2008. But production will not be turned on quickly. In the Globe and Mail article, Canaccord Adams analyst Orest Wowkodaw predicts that “most Canadian mines’ reaction to a sustained pickup in metals demand will be delayed by about six months.”

When the recovery does come, however, I expect that it will be bigger and better than ever. Both demand and supply have roles to play. The demand for mined commodities continues to rise over time, fuelled by developing economies like China and India.

www.camese.org

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

September/October 2009 | 71

MAC economic commentary The oil sands and climate change — some important considerations ❚ Paul Stothart The development of the western oil sands constitutes one of the world’s most significant economic stories of recent decades. Technological advances and increases in crude oil prices from $20 per barrel in the 1990s to to $140 in mid-2008 together reinforced the oil sands’ economic viability and, through hundreds of billions of dollars of investment, sustained its production growth from test-well quantities to volumes exceeding one million barrels per day.

As with any source of energy, the process of extracting oil from oil sands raises a range of environmental issues.

Its rapid development has served to position this sector as target number one among some environmental groups. In this respect, it is important that NGOs and public policy stakeholders not ignore some key realities.

Economic contribution Oil sands development has increased wealth and economic activity in western Canada during the past decade, creating 200,000 jobs, including many in central Canada that helped to offset job losses in the manufacturing sector. It is also estimated that each direct job translates to nine additional jobs among suppliers and indirect beneficiaries. While the ongoing recession may extend these timelines, Alberta’s oil sands production is projected to increase from around 1.3 million barrels per day at present to 4.7 million in 2025 and potentially 6.3 million barrels by 2035, depending on longer term economic growth and oil price trends.

The Canadian mining industry, including oil sands mining, paid an estimated $11.5 billion to federal and provincial/territorial governments in 2008 in the form of taxes and royalties.

Around $3 billion of this total relates directly to oil sands mining, with additional amounts linked to in situ production. The provincial share of revenues has increased in recent years — 72 | CIM Magazine | Vol. 4, No. 6

in the oil sands, many projects have repaid investors’ initial capital spending and thus have entered a higher royalty bracket. The oil sands industry pays large sums — as high as $2 billion in some years — to the Alberta government in the form of land sales payments. It is estimated that oil sands developments between 2000 and 2020 could generate over $120 billion in royalty and tax revenues for governments. In an age of mounting government deficits, this important source of revenue cannot simply be wished away by those opposed to the oil sands.

Aboriginal dimension The Canadian mining industry is the largest private employer of Aboriginal Canadians. As of 2007, over 1,500 Aboriginal employees worked in permanent oil sands operations jobs, representing a 90 per cent increase over 1998 levels. Companies such as Syncrude and Suncor have important benefit-sharing agreements in place with Aboriginal groups.

Oil sands companies have also awarded an estimated $1.5 billion worth of contracts to local Aboriginal companies over the past decade.

These contracts are increasing each year. In 2007 alone, $606 million in contracts were awarded to local Aboriginal companies.

The growth rate of the Aboriginal population is double that of the nonAboriginal Canadian population and many communities are located near mining operations. There remains potential in the coming years to fill anticipated worker shortages through the training and skills enhancement of Aboriginal Canadians.

Environmental and trade considerations Some NGOs in the United States and Canada have argued

that carbon-intensive fuels such as oil from oil sands should be disadvantaged, trade-wise, for environmental reasons. Whether this sentiment evolves into a significant trade issue remains to be seen — particularly given the U.S. energy dependency on Canada and the fact that under longterm plans, some 90 per cent of oil refined in the U.S. Midwest is projected to come from Canada. As well, all sources of energy production, including fossil, hydro, nuclear, solar and wind, could conceivably raise tradeactionable environmental questions relating to materials, noise, land use, safety, climate, air or water impacts.

The scale of the challenge of oil sands GHG emissions faced by Alberta and Canada, while significant, is placed in context through noting that it is comparable to the coal emissions challenge faced individually by 15 U.S. states and smaller than the GHG challenge faced by each of Texas, Missouri, Illinois, Indiana, Ohio, Kentucky, Tennessee, Alabama, Georgia, Florida, Ohio, Michigan, West Virginia, Pennsylvania and North Carolina.

This places the emerging debate over “trade barriers against GHG-intensive oil” in a more realistic context. The U.S. faces comparable or greater challenges in 30 of its own states drawing electricity from coal combustion. This calculation would obviously become relevant in any conceivable environmental trade dispute. CIM www.mining.ca

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

first nations A large need for education on mining and exploration ❚ Juan Carlos Reyes Last month, the Waubetek Business Development Corporation hosted its 4th Annual Economic Development Officers’ Conference in Sault Ste. Marie. I was honoured to be selected as a speaker at this conference, which is attended by almost all of the First Nations’ representatives in economic development from across the province.

Waubetek spends a great deal of time studying needs and opportunities within First Nations in Ontario. The information gathered is used to develop workshops that assist communities in identifying ways of bringing about their economic development.

In my opinion, exploration and mining should have received greater coverage at the conference. Only one brief workshop on impact benefit agreements was held, in which there seemed to be a surprising lack of interest among many of the participants. My belief is that they were interested in more basic information on exploration and mining.

Although I broached the topic with conference organizers, they did not see the need for further coverage, as the program already addressed numerous other areas. This is unfortunate as the conference is a perfect venue to encourage dialogue between the mining industry and First Nations groups.

While at the conference, I seized the opportunity to speak with other participants and get a feel for their views on exploration and mining. The results were mixed. Many of them had very negative opinions on the topic. An incident like Kitchenuhmaykoosib Inninuwug (KI) — where six KI activists were jailed after they tried to stand in the way of government resource companies’ plans to develop the North — was not one they were prepared to deal with. As such, exploration and mining were low on their list of possible avenues for economic development.

Another popular concern among the participants was the disruption of regional habitat. Those who shared this concern probably have not visited First Nations communities that have recently hosted exploration or mine development.

As Ontario is a hotbed of exploration activity, it is vital that we bring awareness about exploration and mining to First Nations communities. There are a great many tools at our disposal to accomplish this, one of them being CIM’s Mining in Society show. It has the potential to have tremendous positive impact on First Nations communities.

During my presentation at the conference, I emphasized the fact that mining can occur anywhere, even if a community believes that they do not have mineral resources. One day, a discovery could be made and the affected community could be dragged kicking and screaming into negotiations without knowing the fundamental processes involved. I firmly believe, along with the rest of the Learning Together Board of Directors, that mining can be a way for First Nations communities to solve issues of poverty. First Nations communities affected by mining have benefited

from high-paying jobs and skills training, whether members live on or off the reserves. It can potentially lead to the return of many members to First Nations communities.

We should all do our part in welcoming future long-term partners in the industry. First Nations communities have a right and a need to be part of the development that takes place on their lands. It is a legally mandated obligation for the industry to not only take notice of, but also to consult and accommodate the communities. It truly is in the best interest of the mining industry to invest in mechanisms that increase awareness of the positive side of exploration and mining. Those of us who have been in this industry for any length of time can attest to this win-win partnership. CIM

About the author Juan Carlos Reyes is an aboriginal consultant with efficiency.ca and the organizer of Learning Together. He is passionate about human rights and works tirelessly to help improve the lives of Canadian Aboriginal people.

September/October 2009 | 73

HR outlook Coal mining employment A socioeconomic and geographical position â?&#x161; Jean Pierre Chabot The current recession may increase the average age of workers in the coal mining industry, since those with less seniority are often the first to be laid off. In the near future, coal mining companies will need to pay particular attention to their efforts to attract youth. There are numerous socio-economic and geographic factors that affect the efficiency of the Canadian coal industry and its human resources situation.

Challenges faced include the aging workforce and the fact that the western provinces are also major oil sands producers â&#x20AC;&#x201D; a big source of competition for labour. According to Statistics Canada, in 2006 half of the

coal mining workforce was over the age of 45, while about one-quarter was less than 34 years of age.

Geography has the potential to contribute not only the natural endowment of coal but also a solution to future pressures on the human resources of the industry.

The top coal producing provinces in Canada are Alberta, British Columbia and Saskatchewan. Most coal mines are located in the southern parts of these provinces and, in many cases, straddle the mountain range that borders British Columbia and Alberta. This geographic setting, its proximity to urban centres and the subsequent lifestyles that it permits could be used by companies in

the coal industry to position themselves as employers of choice.

According to Statistics Canada, the average annual salary in coal mining is more than $10,000 higher than that of non-metallic mining and quarrying, but nearly $8,500 less than the average annual salary in metal ore mining. Salaries of oil sands workers are higher, on average, than those in mineral extraction. The existence of such salary differentials for similar skill sets could make it difficult for the coal industry to attract and retain sufficient skilled labour.

Coal mining accounts for 11 per cent of employment in mineral extraction in Canada. Women comprise

W.M. KECK CHAIR DEPARTMENT OF CIVIL ENGINEERING, UNIVERSITY OF TORONTO The Department of Civil Engineering at the University of Toronto invites applications for a prestigious W.M. Keck Chair to be associated with the Lassonde Institute for Engineering Geoscience and the Lassonde Mineral Engineering Program. This appointment is a tenure stream position at the Associate or Full Professor level.

The appointment to this position will be made 1 July 2010, or as soon as possible thereafter.

The Lassonde Institute promotes and facilitates cross-disciplinary research related to challenges facing the mineral and energy sectors. Construction is currently in progress for the new home of the Lassonde Institute, a $20-million mining innovation centre to be completed by early 2011. The Lassonde Institute has already established unique research infrastructure, for example, the Rock Fracture Dynamics Laboratory, an integrated facility for experimental rock mechanics and advanced modeling.

The Lassonde Mineral Engineering Program is an interfaculty and interdepartmental course of study offered by the Department of Civil Engineering that crosses traditional barriers in university education.

Graduates gain a diversified education in the areas of mining, geology, and other relevant applied science and engineering that makes them highly sought out by industry, consulting and research establishments.

Candidates for the Chair should be exceptional researchers in areas such as mining engineering and rock mechanics, where the University has internationally recognized research strength, or other areas of the engineering geosciences that relate to the mineral and energy sectors. The successful candidate must have a distinguished record of scholarship including undergraduate and graduate teaching and significant experience in managing major multi-disciplinary research projects.

Candidates should hold a doctoral degree, be eligible for registration as a Professional Engineer in Ontario, and must have demonstrated leadership, administrative capabilities, communication skills and a strong vision to develop the potential synergies that are available at the University of Toronto - Canadaâ&#x20AC;&#x2122;s #1 research intensive university.

Salary will be commensurate with qualifications and experience.

All interested parties are encouraged to apply on-line at http://www.jobs.utoronto.ca/faculty.htm. If you are unable to apply online, please send your application to Professor Brenda McCabe, Chair, Department of Civil Engineering, University of Toronto, 35 St. George Street, Room GB107, Toronto, Ontario, M5S 1A4. Application should include a detailed curriculum vitae (including publications and evidence of capacity and impact), a description of research, teaching and professional interests, and, a list of at least four professional and character referees. The closing date for receipt of applications is November 30, 2009.

The University of Toronto is strongly committed to diversity within its community. The University especially welcomes applications from visible minority group members, women, Aboriginal persons, persons with disabilities, members of sexual minority groups, and others who may contribute to further diversification of ideas.

All qualified candidates are encouraged to apply; however, Canadians and permanent residents will be given priority.

74 | CIM Magazine | Vol. 4, No. 6

HR outlook 12.3 per cent of the coal mining workforce, while Aboriginal and immigrant identity groups comprise five and eight per cent, respectively.

Notably, levels of education in the coal mining workforce are on par with non-metallic mineral mining and quarrying — 47 per cent of the workforce has some form of postsecondary education or training.

However, this lags behind metal ore mining, which has a post-secondary achievement rate of 66 per cent.

The World Coal Institute states on its website that the prices of thermal coal have historically been more stable than those of oil and gas prices. The institute claims that coal is likely to remain the cheapest fuel source for power generation in the coming decades.

The relative stability of coal prices in comparison with oil and gas is primarily due to the fact that thermal coal is generally sold through multi-year contracts, typically to public utilities. However, the coal mining industry has not been immune to the negative impacts of the current recession.

The demand for metallurgical coal is highly correlated with the global production of iron and steel, which fluctuates according to worldwide economic output. Therefore,

prices for coal overall can exhibit fairly large and abrupt changes compared to other minerals and metals.

The current recession clearly presents serious challenges to the domestic coal industry. According to the Centre for the Study of Living Standards, a non-profit research organization based in Ottawa, the industry experienced phenomenal productivity growth during the 1980s and 1990s.

Growth in output per hour between 1989 and 2000 was 7.4 per cent per year in coal mining as compared to 1.0 per cent and 0.1 per cent in electricity generation and logging. This substantial growth in productivity was largely due to the significant shift from underground to surface coal mines, which allowed the industry to increase its level of capital intensity by way of

larger equipment and subsequent economies of scale in extraction. the human Consequently, resources needs of the coal and oil sands industries have begun to converge. For this reason, the coal mining industry will need to find new ways of marketing its employment opportunities. One of the ways the industry can do this is to use the natural endowments that come with the geographic location of their mines to attract younger workers looking for a balanced lifestyle. CIM www.mihr.ca

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

Moving on up Vancouver-based Ventana Gold Corp. appointed Stephen Orr to the position of president and CEO. Orr, who has 30 years of international experience in the gold mining industry, was, most recently, the CEO of OceanaGold Ltd. Earlier, he was vice-president of North American operations, then managing director of Australia and Africa for Barrick Gold Corporation. Prior to joining Barrick, Orr spent 20 years with Homestake Mining Company in various positions, including president and CEO for Homestake Canada Inc.

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September/October 2009 | 75

eye on business Some implications of the U.S. climate change legislation for oil sands producers ❚ R. Greg Powers and Andrew E. Derksen Commodity prices, market availability and costs have always had a direct effect on the scale and pace of Canadian oil sands project development. Over the years, social, political, legal and regulatory issues relating to such things as water use, land use, social impact and community health have increasingly contributed to project costs. However, climate change legislation emanating from the United States, partially influenced by the debate over “dirty oil,” could have an even greater impact upon the development of oil sands projects in the future. Such legislation could limit or even curtail access by oil sands products1 to the U.S. market, which currently is the only viable market.

The U.S. measures Of particular concern are three laws: the Energy Independence and Security Act (EISA), the American Clean Energy and Security Act (ACESA) and California’s Low-Carbon Fuel Standard (LCFS) (collectively, the

“U.S. measures”). The Energy Independence and Security Act was signed by President Bush to become law in December 2007. Of concern to the oil sands industry is section 526, prohibiting U.S. government agencies, including the military, from procuring fuel that is produced from “non-conventional petroleum sources.” The concern is that section 526 might be interpreted broadly so as to exclude oil sands products from use by U.S. government agencies. While federal U.S. agencies currently consume a small proportion of total daily U.S. oil consumption, oil sands products are commingled with regular crude in the distribution chain and would therefore need to be separated — a difficult and costly undertaking.

The American Clean Energy and Security Act, currently before the U.S. Senate, aims to cut greenhouse gas emission levels via a cap-and-trade system, to a level that is 83 per cent below 2005 levels, by 2050. ACESA would lower the margins of U.S. refiners of oil sands products,

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76 | CIM Magazine | Vol. 4, No. 6

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eye on business making such products less competitive against lower cost sources such as Middle Eastern oil. ACESA could also levy “carbon tariffs” on imports from countries without analogous GHG legislation in place. The carbon tariff provisions could force U.S. trading partners, such as Canada, to adopt similar legislation, targeting heavy domestic emitters such as oil sands producers.

In California, a Low-Carbon Fuel Standard applying to transport fuel comes into effect on January 1, 2010. The LCFS requires that carbon content in fuel be reduced by 10 per cent from current levels by 2020, with further reductions required thereafter. The LCFS would penalize the oil sands products by making their usage much more costly. Other states have been examining the LCFS, with Oregon introducing an LCFS modelled on the California standard in spring 2009.

NAFTA and the WTO The U.S. measures may or may not be compliant with U.S. international trade obligations. A WTO paper suggested that carbon tariffs could, in theory, be compatible with WTO and GATT rules, provided that they did not violate the core principle of non-discrimination, but in practice, it would be hard to prove they were not an illegal disguised restriction on international trade.2 A NAFTA Chapter 11 case could also be attempted against the U.S. measures. However, previous NAFTA Tribunal decisions dealing with similar facts indicate otherwise. In Methanex Corporation v. United States of America, a NAFTA Tribunal upheld a California law banning methanol, a feedstock used to make MTBE, a gasoline additive (the law was enacted for purposes of environmental protection).3 Methanex, the Canadian complainant, argued that the California law in effect barred them from the Californian market and violated Article 1102 (national treatment), Article 1105 (treatment in accordance with international law) and Article 1110 (a measure tantamount to expropriation without compensation). The tribunal said that because the ban applied to all methanol producers (i.e. in California and outside of

1

Alberta’s bitumen, heavy crude oil produced from bitumen and lighter crude oil upgraded from bitumen (synthetic crude oil).

2

“What role does the WTO have to play in combating climate change?”

(2009) World Trade Organization background paper, Asia-Pacific Model United Nations Conference, The University of Queensland, July 12-17, 2009.

3

Methanex Corporation v. United States of America, in the matter of an arbitration under Chapter 11 of the North American Free Trade Agreement and the UNCITRAL Arbitration Rules, Final Award of the Tribunal, August 7, 2005. Available at http://www.naftaclaims.com/disputes_us_6htm.

4

Alberta and the oil sands industry were caught unaware of the implications of EISA Section 526 and only became aware of and reacted to it after it had become law.

it) and because non-discriminatory regulation for a public purpose enacted in accordance with due process was permitted under NAFTA and International Law, the law did not violate NAFTA.

Alberta’s response Alberta and the oil sands industry have lobbied hard to improve the oil sands’ image and counter the negative aspects of the U.S. measures.4 A recent report commissioned by the Alberta Energy Research Institute has concluded that on a full life-cycle basis, GHG emissions from Canadian synthetic crude against other heavy oils refined in the United States compare favourably. In order to reduce GHG emissions, Alberta has committed $2 billion in funding to advance carbon capture and storage (CCS) technology — an unproven technology but one that the oil sands industry hopes will significantly reduce GHG emissions. In any case, social and political pressure to improve the environmental performance of oil sands operations continues to grow.

Conclusion While the U.S. measures have yet to directly affect exports of oil sands products to the U.S., it is clear that U.S. policy is changing and could significantly impinge upon such exports.

Canadians have tended to assume that the U.S. market would always be open to oil sands products. However, if the U.S. measures make Canadian oil sands products less competitive in the U.S. and if CCS or other GHG-limiting technologies prove unviable, then that belief will have to be re-evaluated and other options, such as a West Coast pipeline opening access to East Asian markets, may become more attractive and may need to be considered. CIM www.fasken.com

About the authors Greg Powers is a partner in Fasken Martineau’s Calgary office. His practice is focused on oil and gas, securities, mergers and acquisitions, corporate commercial and project finance. His experience includes advising private and publicly listed clients on issues related to acquisitions, investments and joint venture structures in connection with conventional projects and projects for the extraction and upgrading of heavy crude oil and bitumen.

Andrew Derksen is an associate at Fasken Martineau in Toronto and is part of the Global Mining and Energy Group.

His practice focuses on corporate, commercial, international and securities law matters.

September/October 2009 | 77

student life A summer to remember A first-year student’s perspective ❚ Ryan Veitch When someone told me six months ago about the great summer they had working in the oil sands of northern Alberta, I was confused.

After all, who would want to spend a vacation in some town six hours north of Edmonton? However, after having spent the summer in Fort McMurray, I found myself missing the town and the people I met there.

As a first-year mining engineering student at McGill University, I was offered a co-op position this past summer with Suncor Energy as a heavy equipment operator. While the immense scale of everything in the mine took some getting used to, the hardest thing to cope with was the schedule. We worked three 12-hour day shifts, followed by three 12-hour night shifts, followed by six days off.

78 | CIM Magazine | Vol. 4, No. 6

And I used think that my university schedule was gruelling! The 24-hour “short change” that separated the day

and night shifts was quite useful, either for getting some much-needed sleep or visiting one of the town’s famous landmarks (I’m sure The Oil Can Tavern is familiar to some).

This being only my first year of involvement with the mining industry, I feel that there is very little I can say authoritatively about mining or engineering. Instead, I hope I can share with you something that not many people in this industry have — a newcomer’s perspective.

If there is one thing I would like to stress in this article, it is the need for more companies to consider hiring first-year students as operators. This not only gives companies the first pick of the top students, but it also helps them in the long run when the students return to them for a job upon graduation and already have valuable experience at their mines.

It is well-known that the mining and energy sectors have an aging workforce and that there will be a shortage of trained workers in the near future. The opportunities and salaries that are offered to mining engineering graduates are unmatched in any other discipline. Yet, mining engineering remains one of the

student life programs with the lowest enrolments across the country. So, where might the problem lie?

I believe that one of the major reasons students choose another industry is because of the remote locations of many mining-related jobs. Few people entering university are interested in moving to small towns or to camps. Yet, after spending a few months at one such location, I realize how wrong my thinking about this was. I was completely surprised by the level of culture in Fort McMurray and the diverse group of people found there. It really is a modern-day gold rush town, with people coming and going from all over the world.

New apartment buildings and houses appear to go up every day.

Many arrive without knowing anyone else, which makes it easy for strangers to get along, as most people around are strangers. With much of the population working in shifts, there are interesting activities going on every night of the week. I think if more students had the chance to spend time in a mining town, they would reconsider a career in this industry.

My experience working in the oil sands was also very rewarding on an educational level. As Chris Kissel, a summer student with Syncrude, put it, â&#x20AC;&#x153;Other students and mining companies in general tend to underestimate the mining experience that can be gained by working as an operator.

Hands-on production experience provides an excellent introduction to the industry.â&#x20AC;? Rarely do students get the chance to work in the mine and truly see how things are done. I believe this is something that will be very useful for me if I get to work for Suncor as an engineer in the future.

I am very thankful to Suncor for giving me this great opportunity and this great summer experience. As for Fort McMurray, I sincerely hope to go back one day. I think Samantha Larkin, another summer student at Syncrude, who also happens to have grown up here, describes it better than I ever could: â&#x20AC;&#x153;Growing up here let me get to the heart of this town â&#x20AC;&#x201D;

the part no one really gets to see, the best part. This town is a beautiful, growing community with tons to do, if youâ&#x20AC;&#x2122;re only willing to look for it. It truly is what you make of it. Itâ&#x20AC;&#x2122;s a great opportunity for anyone who wants to experience something completely different from the norm. They might one day be proud to call it home, like I do.â&#x20AC;? CIM

About the author Ryan Veitch is a first-year mining engineering student at McGill University.

He hopes to complete an arts degree, in addition to mining engineering. He enjoys writing and works part time as a sports journalist.

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September/October 2009 | 79

engineering exchange A multi-disciplinary design Creating a long-term, sustainable lake from scratch takes good communication and a multi-teamed approach ❚ Marlene Eisner

Photo courtesy of Shell Canada Energy

Environmental sustainability is lake and the Muskeg River. perhaps one of the most important, The lake will have a primary and most challenging, aspects of inlet as well as a secondary the mining industry. From water inlet to handle high flood conservation and innovations in flows. Both inlets will use tailings management to the reclaexisting Muskeg Creek chanmation of land, the goal is to meet nels, which will flow into the the present needs of society withnortheast portion of the lake. out compromising the capacity of In the south, a primary outlet future generations to meet their will connect the lake to needs.

Muskeg River. Within the When Norwest Corporation erosion control berm, secwas hired by Shell Canada to ondary outlets have been develop and create a lake able to designed at specific elevasupport year-round fish habitat for tions to correspond to varithe Athabasca Oil Sands Project, ous flood frequency levels Norwest knew it was being preand allow for uninterrupted sented with a unique and exciting flow between the lake and challenge. The lake, to be built river during flood events. directly east of the Muskeg River at The design of the lake also the confluence of the Muskeg includes habitat complexing Creek and Muskeg River, will utito accommodate various lize the Muskeg Creek as its pri- Aerial view of the compensation lake project site — the Phase 1 drainage types of fish habitats. mary inlet. Once the lake is con- network drains west to the Muskeg River.

Reclamation will be adapstructed and filled, it will begin to tively managed, with natural balance the habitat lost during mining Shell’s environmental group. There were vegetation monitored to determine in portions of the Khahago, Shelley, a lot of aspects that had to be evaluated, further reclamation needs.

Pemmican, Blackfly and Green so there was a long design process.”

Stockings watersheds.

There were regulatory components Location, location, location Compensating for lost fish habitat to consider as well with agencies such “The biggest challenge to the projwas an essential requirement in the as the Department of Fisheries and ect as a whole was the location,” authorization for Shell’s Jackpine Mine Oceans, Alberta Environment, Alberta explains Twyla Hutchison, water – Phase 1 project, located about 75 Sustainable Resources Development resource engineer and engineering design team member on the project. kilometres northwest of Fort and the Energy Resources and The lake is situated immediately McMurray, Alberta. The lake needed Conservation Board. “It was a fairly upstream of the confluence of the to be a sustainable feature of the area cutting-edge design — a very cusand maintain fish passage from the tomized solution for a very unique set Muskeg River and Muskeg Creek.

Once the lake is in place, the Muskeg Muskeg River through the lake and of challenges,” says Bedard.

Creek will be its primary inlet and will upstream along the Muskeg Creek for Essential features connect back to the Muskeg River by a minimum of 100 days of the year.

The lake is designed to be com- the primary lake outlet. “The lake is in Designing ways prised of three main sections — a a naturally existing flood plain of the “It [the design] certainly was a northern basin, a shallow interconMuskeg River,” says Hutchison. unique, multi-disciplinary project,” says necting narrow section and a larger “Being in the flood plain, it’s a very Adam Bedard, vice-president of water deep southern basin. The total surface wet area, and there were a lot of chalresource engineering at Norwest. “It area is expected to be 47.3 hectares lenges with managing the water durrequired civil and mining engineers, and an erosion control berm has been ing our first phase of construction.” hydrologists, geotechnical engineers, designed along the lake’s west shoreThe first phase was to pre-drain the fisheries biologists, hydrogeologists and line to manage interaction between the project site for lake construction 80 | CIM Magazine | Vol. 4, No. 6

engineering exchange purposes, prepare the foundation for the spoil piles and to divert natural waters away from construction activities. The surface drainage system, which was constructed between January and March of this year, is a network consisting of a series of ditches that lead to two sedimentation ponds that discharge into the Muskeg River.

Keith Wilson, Norwest vice-president of mining and mine development.

“That’s the intention of starting now [August 19],” agrees Tim Fitzgerald, vice-president of oil sands and a lead player on the project’s construction. “Basically, it gives us the required amount of time between now and March to get the lake built.”

Timing is everything

Communication is key

Phase 2 of lake construction began the week of August 19, 2009. “It’s been draining since March,” says hydrogeologist and project manager Sara McCartney. “Construction will start in the highland areas and move towards the Muskeg River. It will get more and more saturated, so we’ll stay in dry areas until winter will improve construction conditions.”

Probably the biggest challenge now is the completion of the lake in time for spring. The Muskeg Creek has quite high flows in the spring, and routing it into the lake is the very last step of construction. Timing is essential, since once the creek is flowing into the lake it could fill in as little as one week. Construction must be completed by mid-March 2010 to ensure everything is in place prior to spring flows.

Current priorities surrounding construction include the handling of all the materials that are being excavated. “There are numerous materials that are being managed during construction,” explains McCartney. “The first step involves stripping suitable reclamation material and stockpiling it for use when the lake is completed.

It’s going to be a staged approach,” she says. “As they enter into a new area, they’ll strip reclamation material prior to excavation and then segregate remaining materials depending on characteristics such as construction suitability.” A total of five distinct onsite stockpiles will be utilized.

Having the bulk of the lake construction take place during the fall and winter months was done purposely to give the project a positive edge in meeting the spring deadline. “It does get quite cold in the winter, but that facilitates the construction,” explains

The design of the lake has involved many elements, from water resources, environmental, civil, geotechnical and mining engineering, to fisheries and geology, which has led to an iterative approach for the successful management of the project. It was essential to have a team that worked closely together, with consistent, ongoing communication, in order for everyone to understand how their portion of the design affected the other design components.

“The key word is communication,” says Fitzgerald. “From Norwest’s point of view, there is the recognition that a lot of this work is a joint effort between

Norwest and Shell. It’s just good project planning that the consultants and the client communicate. The interaction between Shell, Norwest, and North American Construction Group is literally a daily thing.”

A rewarding experience With the project well into the final phase, a lot of excitement is building up to see the end result.

Although it has been a long process — it will be three years from the initial work on site to the completion in March — and a technically challenging one at that, Bedard says the experience has been especially rewarding.

“We’ve learned a lot and developed significant experience with regard to habitat construction,” he says. “It’s an integrated project and will leave a lasting legacy for Shell and the surrounding community. It’s very rewarding and exciting and we’re looking forward to building it and getting to see it happen in real time.” CIM www.norwestcorp.com

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standards The centenary of Proved and Probable Reserves ❚ Edmund Sides Most readers will be familiar with one or more of the codes that are recommended and, in many cases, legally required by relevant stock exchanges for the public reporting of Mineral Resources and Ore Reserves, including: PERC 2008 (Europe); SAMREC 2007 (South Africa); International Reporting Template 2006 (CRIRSCO); CIM 2005 (Canada); JORC 2004 (Australia and New Zealand); and Certification Code 2004 (Chile). For details, go to www.crirsco.com/national.asp.

All of these codes require a twofold division of Ore Reserves (or Mineral Reserves) into Proved (or Proven) and Probable categories. A review of the evolution of reporting terminology highlights the fact that these terms have now been used in a similar context for exactly a century.

Little has been published on the reporting terminology used in the 19th century. However, a wellreceived paper published in 1901 on the usage of the term “ore in sight”1 gives several examples of the approaches and terminology used in the valuation of mining properties.

The processes described by Kendall and contributors to the discussion on his paper are likely to reflect the practices used during the latter part of the 19th century. Following discussion of his paper, the Council of the Institution of Mining and Metallurgy (IMM) adopted a resolution requiring its members to standardize their usage of the term “ore in sight.”2 “That as the term “Ore in Sight” is frequently used to indicate two separate factors in an estimate, namely: (a) Ore

References 1

Kendall, J.D. (1901). Ore in sight (plus subsequent discussion). Transactions of the Institution of Mining and Metallurgy, Vol. X, 101-201.

2 IMM (1902). Appendix: Ore in Sight. Transactions of the Institution of Mining and Metallurgy, Vol. X, 202.

3 Hoover, H.C. (1909). Principles of Mining: Valuation, Organization and Administration. New York: McGraw Hill Book Company (available from http://www.gutenberg.org).

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Blocked Out — that is Ore exposed on at least three sides within reasonable distance of each other — and (b) Ore which may be reasonably assumed to exist though not actually ‘blocked out.’

These two factors should in all cases be kept distinct, as (a) is governed by fixed rules, whilst (b) is dependent upon individual judgement and local experience.”

The IMM resolution also required that the data on which estimates of ore in sight were based should be presented in accompanying reports in the form of plans and sections (foreshadowing the transparency requirement of current codes), and that ore should meet the criterion of being “capable of being profitably extracted.” This resolution appears to mark the first attempt by a professional body in the mining industry to regulate the public reporting of estimates of the magnitude (and inherent value) of mineral properties.

Seven years later, Herbert Hoover published Principles of Mining3 in which he noted that the term “ore in sight” was considered to be too broad and that “The legitimate direction of reform has been to divide the general term of ‘ore in sight’ into classes, and give them names which will indicate the variable amount of risk of continuity in different parts of the mine.”

He went on to list some of the terms used in such classifications, namely: • “Positive Ore / Ore Developed: Ore exposed on four sides in blocks of a size variously prescribed; • Ore Blocked Out: Ore exposed on three sides within reasonable distance of each other;

• Probable Ore / Ore Developing: Ore exposed on two sides; • Possible Ore / Ore Expectant: The whole or a part of the ore below the lowest level or beyond the range of vision.”

Hoover presented his preferred classification as: • “Proved Ore: Ore where there is practically no risk of failure of continuity; • Probable Ore: Ore where there is some risk, yet warrantable justification for assumption of continuity; • Prospective Ore: Ore which cannot be included in the above classes, nor definitely known or stated in any terms of tonnage.”

Hoover concluded his discussion of “The Classification of Ore in Sight” with the following statement: “Although the expression ‘ore in sight’ may be deprecated, owing to its abuse, some general term to cover both ‘positive’ and ‘probable’ ore is desirable; and where a general term is required, it is the intention herein to hold to the phrase ‘ore in sight’ under the limitations specified.”

From the above, it is noted that that the IMM’s pioneering resolution on professional reporting standards, which was adopted in September 1902, laid the foundation for the development of the reporting standards that are in current usage.

Hoover’s textbook, published exactly a century ago, gave definitions of Proved and Probable Ore, which have survived in a similar context to the present day. CIM www.crirsco.com/national.asp

About the author Ed Sides is a resource geologist with AMEC's Mining Services team in the United Kingdom. During his career, he has worked on various projects, from grassroots exploration through feasibility studies to operating mine. He has a special interest in the incorporation of geological controls into computerized resource estimation procedures.

safety Rare and well-done Sheerness mine captures the John T. Ryan Trophy

Despite the millions of work hours spent mining tens of millions of tonnes of coal from the deposit just outside of Hanna, Alberta, the Sheerness mine has managed to keep its safety record virtually spotless. This spring, the mine, owned by Sherritt Coal, claimed the John T. Ryan Trophy as the country’s safest coal mine for the fourth time in its short history. “In over 14 years, we have never lost a day of work,” says Chris Chapman, safety supervisor for Sherritt’s Sheerness and Paintearth coal mines. As with the previous milestones, employees observed the event with a company-sponsored Sheerness mine employees proudly display their John T. Ryan Trophy. steak barbeque.

Chapman has been in his position for the last three J.T. Ryan employees,” he offers as explanation procedures or behaviours are modified Trophy victories at Sheerness and for how the mine maintains its high with the cooperation of the workforce, another three at Paintearth, all within standard. within a clearly defined timeframe. As the last eight years. He is at pains to The culture beneath this record, an example, Chapman shares the emphasize how this achievement is like the coal beneath the plains, was result of a recent audit. “On our built on the foundation laid by the there long before the operation began draglines, we discovered that not workers on the ground. “We’ve had mining its potential, says Chapman. everyone was doing the lockout procepeople come to see us to find out what “The employees here have a culture dure in the same way. So the commitmakes us so different that we can go of hard work. Hanna is a farming tee came back and discussed why this 14 years without a lost-time incident,” community and these guys are used was happening and designed a group says Chapman. “There’s nothing that to working. They come to work and lockout system and wrote up a new we can put on a piece of paper; there is they put in a full day. I’ve been to work procedure. So now, when certain nothing we can videotape or put into a other operations where somebody’s major jobs are done on the dragline, canned program and give them to been injured and they’ve gone off there is a group rather than an individwalk away with. They learn, just by work. If one of our employees is ual lockout system.” talking to them, that how our employ- injured, he’ll want to be a part of the Together, the unionized workers, ees think and talk about safety is what modified work program to make sure staff and management number 110. makes the difference at the mine site. that he stays at work.”

The mine runs 24 hours a day, seven Obviously, it makes my job a lot easier Beyond the committed workforce, days a week, with four different 12when the employees buy into safety.”

Chapman explains, the mine’s joint hour shifts. It produces about four milAccording to Chapman, no outside safety committee, comprised of manlion tonnes of coal each year that are occupational safety consultants have agement and labour representatives, burned at the neighbouring Sheerness been brought in. Safety initiatives, he performs monthly safety audits to sur- Generating Station, owned by Transalta explains, tend to be generated inter- vey how effectively past processes and and ATCO Electric. And all this is done nally. “Employees aren’t afraid to come modifications are put in place, and without a jolt or spill. It is indeed rare forward with questions, and supervi- also to locate and address any areas of for things to be so well done. CIM sors aren’t afraid to bring up safety risk. The results of these audits are issues and reminders with the posted for workers to review. Risky www.sherritt.com September/October 2009 | 83

Photo courtesy of Sheerness mine

❚ Ryan Bergen

canadians abroad You have to be a little bit crazy…

A chemist seeks adventure (and finds it) in mining ❚ Richard Andrews

From the highlands of Papua New Guinea and the steppes of Siberia to African jungles and paradise islands, the career of metallurgist Christopher Campbell-Hicks reads like the synopsis of an Indiana Jones movie. His exploits are also a reminder of the challenges faced by mining’s field workers to get the job done.* African coups, knife attacks by operation in the world with 100 murderous tribesmen, tropical per cent service by helicopters. cyclones and long journeys on While I was examining a damaged frozen Siberian rivers — just pipeline, a local tribesman came another day in the office for up and cut me open pretty Christopher Campbell-Hicks. seriously with his knife. My gut The son of a Canadian pilot was hanging out. and an English teacher, “It turned out that he had Campbell-Hicks grew up in mistaken me for someone else who had apparently insulted him.

Australia, where a trip through When he realized I was the wrong the outback in the 1960s led to man, he bandaged me with his his life’s calling. “I ran short of shirt and carried me down the money and started hopping mountain to the mine site. They freight trains and hitchhiking to flew me to Port Moresby, where I reach Darwin,” he says. “Broke, was stitched up. in the middle of the Northern “The police arrested the guy — Territory desert, I asked for a job let’s call him John — and wanted at the old Peko copper and gold me to press charges for attempted mine outside Tennant Creek.” murder. I refused. After all, he had The rugged area was renowned saved my life. In gratitude, John for its equally rough-and-ready individuals, who took the made me his wontok, which is a adventurous teenager under their kind of blood brother. The weird wing and showed him the ropes. thing was that every time I went “I started off shovelling tailings back there, John was always and looking after the lime plant waiting at the airport to look after before graduating to mill me. I have no idea how he knew operator,” recalls Campbell-Hicks. when I was arriving.”

“When they learned that I had Mineral-rich French Guinea studied chemistry in high school, Campbell-Hicks outside a Moscow banya (public bath) was also memorable for they put me to work in the gold Campbell-Hicks, who was on a lab. You could call it all a lifejob in the West African country defining experience, as I knew what I wanted to do after during one of its periodic bouts of instability. “I was an that. I returned to Melbourne to finish a chemistry degree.” evacuation leader to get people across the border into Mali, Campbell-Hicks went on to become a consulting in case there was a coup and foreigners were threatened. I metallurgist in many countries, including Australia, French didn’t feel endangered, although I did come down with both Guinea, Fiji, Indonesia and Turkey. Earlier this decade, he typhoid and cerebral malaria in the same week. Cerebral also worked in Chihuahua, Mexico, for a Canadian company. malaria will kill you pretty quickly so they had to rush me One job along the way, during the early 90s, left him to the American Hospital in Conakry.” scarred for life — literally. “I was brought in to help with a The emergency trip took nine hours by Land Cruiser gold recovery operation at a remote site in the highlands of down rough jungle tracks. “It wasn’t real nice,” says Papua New Guinea,” he says. “At that time, it was the only Campbell-Hicks, with typical understatement. “But after a whole bunch of injections, both diseases were gone in 96 *Note: Owing to possible sensitivities linked to some aspects of hours and I was fine. No problem.” this article, it was decided to be in the best interest of companies Most recently, Campbell-Hicks has been with a major to not name them.

Canadian gold mining company for four years, including a 84 | CIM Magazine | Vol. 4, No. 6

canadians abroad three-year stint in Russia. During that time, he worked at a site in Siberia that was reachable only by an eight-hour flight from Moscow to Yakutsk, followed by another 20 hours by truck.

“We drove on the frozen River Lena because it was smoother than the road. I asked the driver what happens if the ice breaks. ‘You must get out of the truck and walk away very quickly,’ he replied. At minus 60 degrees, it was so cold that if you threw a cup of coffee in the air, the liquid turned to ice before it hit the ground. It’s no wonder everyone drinks vodka there.”

Ironically, civilization posed more of a threat than the wilds of Siberia. Back in Moscow, Campbell-Hicks learned about the city’s security problems the hard way. “I was walking to the rear entrance of my apartment building near Red Square when this guy tried to snatch my mobile phone. I pushed him away and then two others jumped me. They got me down, put the boot in and broke three ribs. Luckily they ran off when some people passed by, but I ended up in the hospital again.”

Such incidents don’t discourage Campbell-Hicks as he believes they are more than outweighed by the interest and excitement of his work. “It’s not the life for everyone,” he says. “I guess you have to be a little bit crazy.”

But you don’t have to be “crazy” to enjoy some of the most beautiful places on the planet, whether it’s scuba diving in Fiji’s coral reefs, watching game in Africa, or exploring spectacular beaches, rainforests and gorges in northern Australia’s Gove Peninsula.

“I was working at an alumina refinery in Gove. It was an amazing experience. The place was a tropical paradise.

Except for Cyclone Doris, which gave us a bit of a lashing.

Twenty-four inches of rain came down in 24 hours. We had to fill the conveyor belts up with ore and shut them down fully loaded so the winds wouldn’t rip the belts off.”

Campbell-Hicks acknowledges that constant travel to far-flung locations creates challenges to family life. He

Campbell-Hicks (at the age of 18) working at the Peko Mines lime plant in 1965.

flies family members over to join him whenever he can.

Now that his two children are older, he says it’s easier to maintain contact, and they remain close. “As for friends, you meet a lot of Canadians and Australians at mining sites all over the world. I’m always running into someone I know.”

At the age of 62, Campbell-Hicks shows little sign of slowing down. He prefers sky diving to golf and is now assessing a potential copper mining project that will take him to Pakistan. “I’ve got no thoughts of retiring and intend to keep on going until I’m 90,” he says.

In fact, one suspects that Campbell-Hicks goes out of his way to find excitement when things are too quiet. Not long ago, he visited southern Africa’s Victoria Falls, which are more than twice the height of Niagara Falls.

But just watching the waters plummet 111 metres, was not enough. “When you get to the bridge they have a bungee jump there,” says Campbell Hicks. “So you’ve got to do it. Right?” CIM

September/October 2009 | 85

innovation Bringing science to an art An Officer of the Order of Canada has spearheaded innovation in oil sands processing through cutting-edge collaborative research ❚ Minaz Kerawala and Gord Winkel

Retirement does not keep Jacob Masliyah from his laboratory at the University of Alberta.

“Jacob Masliyah has … been researching the complex interactions between oil, water and sand particles to improve oil recovery from Alberta’s tar sands.

Equally important, he has shared his knowledge with his students and colleagues and has fostered partnerships with industry leaders. His scientific contributions, as well as his leadership in national collaborative programs, have brought significant benefits to the Canadian oil sands industry.”

This impressive précis of a remarkable career sums up the opinion of the Governor General of Canada. It is mentioned on the citation Professor Masliyah received upon his investiture as an Officer of the Order of Canada last year.

At the dawn of an industry The Alberta oil sands have enjoyed a rich history in the development of the mineral processing technologies that we have come to refer to simply as bitumen extraction. Although the oil sands have attracted curiosity and commercial interest over more than 200 years, scientific inquiry into the possibility of harvesting the bitumen from them only began in the early 1920s. This early innovative research developed the foundational processes for so-called hot water bitumen extraction, providing the basis for the design of large commercial oil sands plants.

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Operating experience in the relatively new oil sands application showed bitumen extraction to be a challenging process. Different grades and types of ore proved difficult to process, extraction performance could not be predicted from available measured parameters, and energy intensity and chemical treatment costs were significant. Oil sands operators recognized that a more thorough understanding of the mechanisms that drove bitumen extraction processes was required for the industry to improve overall performance.

A processing pioneer In the 1970s, Jacob Masliyah, then a professor of chemical engineering at the University of Alberta, clearly recognized that bitumen extraction, froth treatment and tailings processes would benefit from the understanding of

fundamental physical phenomenan that drove their respective behavior to previously unanticipated results and consequences.

Over the last three decades, Masliyah has done more to understand, describe, improve and advance oil sands processing than perhaps any other individual. One could, without exaggeration, say that Alberta’s oil sands industry stands on foundations that he helped lay.

Masliyah came to Canada from England in 1964 to pursue his master’s degree in chemical engineering, and later went on to earn his doctorate at the University of British Columbia in 1970. “After a few years of teaching in Saskatchewan, I came to the University of Alberta in 1977,” he recalls.

There, Masliyah met a professor who was on secondment to Syncrude, working on a research project in the oil sands industry. Studying the separation of light particles using a polymer, the professor encountered some inexplicabilities. Because of his expertise in fluid particle dynamics, Masliyah’s assistance was sought. He developed a particle model that accurately mimicked and helped explain the intriguing observations. This was the first step in what was to become Masliyah’s life’s journey.

In those days, the industry was only beginning to find its footing. “The first oil sands project run by Great Canadian Oil Sands [now Suncor], in 1967 was a mammoth operation,” recalls Masliyah.

“To make the equipment run effectively at minus 40 degrees was a huge challenge. The first few years were devoted to just getting it all going. It was only after they got everything working that the oil sands companies started worrying about the processes.”

Drawn to oil sand’s research, Masliyah enlisted a team of bright

innovation minds from both academia and industry. Mentoring them through increasingly diverse and innovative investigations, he helped reveal the true nature of bitumen interactions with solids and water for different processes. He made significant and rapid progress in revealing the fundamental characteristics of the phenomena he examined.

His findings have been applied to fullscale process characteristics and have guided operating efforts towards dramatically improved results.

Great strides ahead Since the early days, Masliyah has witnessed many advances. “The first major breakthroughs were in energy efficiency. In the 1970s, energy efficiency was as low as 45 per cent,” Masliyah recounts. “Now, it is up to 85 per cent.” Another game-changer, in his opinion, was the halving of operating temperatures. “In the 1960s and through the 1980s, the operating temperature used to be about 80ºC. Today, it is down to as low as 40ºC. Low temperatures mean less energy input and a smaller carbon footprint,” Masliyah explains.

Remarkably, recovery rates have jumped from about 70 per cent to 90 to 92 per cent and at times up to 95 per cent. This is substantially higher than conventional crude oil, the primary recovery rates of which are about 25 per cent. This is why, Masliyah feels, the bad press that the oil sands gets is unjustified. He cites independent studies recently commissioned by the Alberta Energy Research Institute.

The studies found that on accounting for all energy inputs and outputs from “well to wheels,” oil from mined oil sands compared equitably or favourably with conventional crude oil in terms of per unit carbon footprint.

Even in situ production fared only slightly worse than conventional crude oil.

Moreover, adds Masliyah, “People need to understand that most of the carbon dioxide produced in the fuel life cycle is produced by you and me in our cars. It is we who emit 80 per cent of all that carbon. It is not the oil sands industry.”

Evaluating his life’s work, Masliyah concludes that his most significant contributions have been in enhancing recovery rates. “We tried to improve recovery and understand why certain ores do not process well,” Masliyah notes. “We came up with proper scientific answers to that question and determined the lowest possible efficient operating temperatures. We also developed and advanced the concept of using chemicals in aiding the recovery and cleaning of bitumen and in the settling of solids. We distilled the art of oil sands processing into a science.”

A productive partnership Not surprisingly, Masliyah picked up innumerable awards along the way.

Of course, his investiture into the Order of Canada is, for him, “the crowning honour.” Among his many academic distinctions is the Senior Canada Research Chair and the NSERC Oil Sands Industrial Research Chair, both of which he has had the privilege of holding.

The latter is an industry-university collaboration initiated in 1996 with support from Syncrude Canada Ltd. So successful was the program that it was renewed twice and is currently slated to continue until 2011, with the participation of five oil sands companies and three suppliers.

“The industry recognizes this as a win-win situation,” says Masliyah.

“We train people, saving the industry considerable HR development costs.

We also spun off a training program of short courses for industry personnel.

Over the last ten years, we have trained over 500 people.” All this is in addition to the technical advances that the program has regularly produced.

“The industry has been extremely supportive,” Masliyah testifies. “We wanted oil sands samples, water from the tailings, and many other things that were very difficult for them to supply. But they always provided what we asked for.” Perhaps more importantly, from the perspective of a man of science, is the academic freedom the program enjoys. “The industry partners never held us back from publishing anything or putting our

research in the public domain. They were amazing.”

Masliyah also credits his colleague, Professor Zhenghe Xu, for the program’s success. “He has been involved with me since the program started and has contributed much to the research,” says Masliyah, adding that Xu now carries on the work, having succeeded him in the NSERC Chair.

A guru looks ahead Over the years, the rigour and brilliance of his research have earned Masliyah the respect of his scientific peers and the industry. But there is another group among whom Masliyah is popular — his students. “Teaching is my passion,” he avers. “I am enthused by the idea of transmitting my knowledge to young minds. Teaching is like acting in a theatre. You have to make your audience enjoy themselves,” says the professor. To ensure that the fostering of the next generation of scientists continues, Masliyah helped set up the University of Alberta’s oil sands engineering program.

Looking ahead, Masliyah thinks that change will come incrementally rather than through breakthroughs, given that the industry has reached a point where “everything costs billions of dollars.”

According to Masliyah, one area in which improvement is important is the tailings pond. “We have done our best in an environment where stakeholder expectations are outpacing technology delivery, so our best is not really good enough. The timely reclamation of tailings ponds is a priority in the long run.

The industry recognizes this and there is a lot of good work being done. I am confident that, in a few years, we will be able to put forward technologically sound methodologies that are practical and cost-effective.”

On the personal front, Masliyah looks forward to a future of sustained scientific productivity. Recently retired from his Chair, he continues to advise the industry and work with colleagues at the university. Masliyah says fervently, “I will never leave the oil sands, as long as there are problems to resolve.” CIM September/October 2009 | 87

parlons en Qu’est-ce que l’Initiative mines vertes ? ❚ Louise Laverdure Ressources naturelles Canada a lancé l’Initiative mines vertes (IMV) afin de réduire les répercussions environnementales ainsi que les coûts d’exploitation et de fermeture des sites miniers. L’initiative est axée sur la réduction de l’empreinte écologique, l’innovation en gestion des résidus, la gestion des risques pour les écosystèmes ainsi que la fermeture et la restauration des sites.

Pourquoi maintenant ?

Même en période d’incertitude économique, le niveau d’attente des citoyens et des groupes écologistes vis-à-vis l’impact environnemental du secteur minier est très élevé. En fait, ces attentes nécessitent la proposition de techniques de remplacement relatives à l’élimination des résidus, à l’utilisation de l’eau et à la qualité de l’air. La population canadienne est préoccupée par l’impact qu’ont sur la santé les émissions atmosphériques industrielles, la qualité de l’eau et les changements climatiques, ainsi que par la production d’énergies propres.

Pour aborder ces préoccupations grandissantes rattachées à l’exploitation des ressources minérales et à l’empreinte laissée, il faut trouver de nouvelles solutions technologiques dynamiques permettant d’atteindre les objectifs suivants : • favoriser une exploitation minière durable; • répondre à des normes et à des règlements environnementaux plus stricts; • réduire les coûts; • accroître la valeur ajoutée; • protéger les travailleurs et le public.

Bienfaits attendus La réduction au minimum des résidus, la conception de techniques de traitement et de gestion plus efficaces et l’approfondissement des connaissances sur le comportement des métaux dans l’air, l’eau et les sols amélioreront considérablement la performance environnementale de l’industrie et sa réputation auprès du public. L’IMV visera le développement de techniques et de technologies pour : • réduire le fardeau environnemental des générations à venir; • promouvoir un rendement économique qui aidera l’industrie minière à continuer de soutenir des collectivités durables; • appliquer des principes scientifiques éprouvés préalables à une réglementation efficace; • développer un savoir-faire et concevoir des équipements qui viseront à stimuler les exportations canadiennes; • établir un leadership en matière de techniques écologiques, de protection environnementale et de développement durable des ressources au Canada et à l’étranger.

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Recherche de la source d'un effluent

L’IMV se fera en collaboration avec l’industrie minière et les instances fédérales, les gouvernements provinciaux et territoriaux, les organismes de réglementation, les universités et les organismes non gouvernementaux, dont le Conseil canadien de l’innovation minière (CCIM).

Thématiques de recherche et d’innovation L’IMV se divise en quatre thématiques de recherche et d’innovation.

Réduction de l’empreinte L’exploitation minière produit une grande quantité de résidus, dont la manutention et l’entreposage sont coûteux et qui ont d’importantes répercussions environnementales. En produisant moins de roches stériles, les exploitants réduisent les besoins et les répercussions rattachés à l’entreposage des résidus, les émissions de gaz à effet de serre (GES) ainsi que leurs coûts d’exploitation.

Cette mesure contribuerait à la réduction des résidus toxiques et des métaux liés au procédé de traitement des minéraux. Les coûts d’entreposage et d’exploitation peuvent aussi être réduits grâce à l’adoption d’une stratégie qui vise

parlons en la production de remblais inertes et d’une eau propre, ainsi que la diminution des particules émises par les fonderies et des émissions de GES associées aux procédés de broyage du minerai. On pourra en profiter aussi pour mettre en valeur des sous-produits minéraux à valeur ajoutée.

Innovation en gestion des résidus L’entreposage de millions de tonnes de résidus s’avère extrêmement coûteux et pose des problèmes de volumes, d’espace et de stabilité. Le perfectionnement des méthodes de traitement, de gestion et d’entreposage des résidus permettrait de réduire les coûts d’exploitation et de fermeture et ceux liés aux responsabilités civiles et au fardeau environnemental.

Gestion des risques pour les écosystèmes Il y a des lacunes scientifiques concernant les données de risques pour les écosystèmes. Notamment, les connaissances sont sporadiques en ce qui a trait à l’évaluation des dangers et des risques posés par les métaux, à la mobilité et à la mobilisation des métaux dans l’environnement, à certains aspects de la toxicologie des métaux et à la surveillance des impacts environnementaux.

En particulier, une meilleure connaissance du comportement des métaux est essentielle à une sélection judicieuse des méthodes de gestion des résidus. On pourra ainsi réduire les impacts environnementaux, améliorer les méthodes de fermeture et de restauration des sites et réduire les coûts pour les secteurs privés et publics.

Fermeture et restauration des sites Le Canada compte actuellement des milliers de sites miniers orphelins ou abandonnés. Les répercussions pour les générations à venir et les responsabilités liées aux coûts de restauration des mines abandonnées, orphelines ou en exploitation au Canada se chiffrent en milliards de dollars.

C’est pourquoi il faut élaborer des techniques et des méthodes de fermeture plus efficaces. ICM Pour obtenir de plus amples renseignements sur l’IMV, prière de s’adresser à : canmet-lmsm@rncan.gc.ca.

L’auteur Diplômée en ingénierie de l’École Polytechnique en 1980, Louise Laverdure a obtenu un doctorat en géophysique de l’université de Montréal en 1990. Louise a entrepris sa carrière au sein de Ressources naturelles Canada à Elliot Lake en 1991, comme chercheur scientifique en sismologie minière, en travaillant sur le projet ‘Coup de Toit’. En 1999, elle s’est jointe au groupe responsable du développement commercial des Laboratoires des mines et des sciences minérales de CANMET. Depuis 2004, elle a occupé le poste de directrice de recherche minière puis directrice en procédés métallurgiques et environnement. Elle est présentement directrice générale intérimaire à CANMET-LMSM.

September/October 2009 | 89

Digging in for a fight Industry slump fuelled Cape Breton clashes

The immediate cause of William Davis’ death on June 11, 1925, was precise: a bullet pierced his heart. What sparked the confrontation outside of New Waterford, Nova Scotia, that led to his death is less clear.

Five years earlier, with the First World War over, a race was on. Industrialists and investors were scrambling to strengthen their positions in coal and steelmaking operations. The British Empire Steel Corporation (BESCO), with capital from both sides of the Atlantic, was conceived to be a force in the coal fields and steel mills of Nova Scotia and the shipbuilding centres of Britain, as speculation pushed prices higher. The plan, one promoter declared, was to “combine the capital and experi- The monopoly of the company store got miners' hackles up from the start. BESCO stoked this smoldering ence of the Old Motherland with resentment when it cut off credit at the "Pluck Me" shops. the resources of our Overseas Dominions.” the beginning of the 1920s judged fair. of the latest labour contract promised The bubble, however, had burst by Naturally, BESCO’s goal of clawing more friction between an increasingly the time BESCO took control of coal back those gains met ample resistance. radical union and an equally deterand steel production in Cape Breton in The company’s president, Roy mined company. The previous year, 1920. Coal prices dropped, the Wolvin, was set on ridding its operaBESCO, struggling to meet its costs, demand for steel went slack, and the tions of organized labour, and he had had riled investors by no longer ambition to develop a presence in new the tacit support of the Nova Scotia paying dividends on its stock. markets withered. BESCO had to cut government; Bolshevism had turned In March, BESCO cut off credit to costs and cut them aggressively. In the Russia red and had to be quelled the company stores in the particularly labour-intensive operations of Cape before it could catch fire elsewhere. militant labour enclaves. Within a Breton, that meant significant wage By 1922, Canadian soldiers were a week, 12,000 miners had walked off reductions for the legions of miners fixture at BESCO’s operations. The the job. Each side baited the other. working the seams. following year, the United Mine The company declined the chance to For Cape Breton coal miners, the Workers Association leader was congo to arbitration in June and soon war in Europe had been a boon. The victed of seditious libel for trying to after, the strike became total. Aptly, it thinner workforce and demand for foment a province-wide miners’ was the power station that became wartime production had pushed wages strike. By 1925, BESCO workers had the main front in the labour battle. up to a level that many coal workers at already struck 58 times and the end Some accounts suggest BESCO had 90 | CIM Magazine | Vol. 4, No. 6

Photo courtesy of Cape Breton Miners' Museum

❚ Ryan Bergen

turned off the power and water to miners’ homes; others say that the general strike had compelled the company to rally forces and take control of the power and pump station or face a mine full of water. Some 700 to 3,000 people reportedly converged on the station that was guarded by mounted and armed company police.

The immediate catalyst that sparked the violence is unknown — a rock may have been thrown, a horse may have bolted, or the police may have charged the crowd. Three hundred rounds were reportedly fired by the company police. One of those struck Davis, killing the father of nine — soon to be ten.

Davis’ death was the climax of the strike, but not its conclusion. In the following days, angry miners defying company and provincial police, as well as hundreds of Canadian soldiers, raided BESCO stores and operations. The next month, the governing provincial Liberals, an important ally for the company, were pushed from power. Financial backers lost patience with BESCO’s management and stopped extending it credit. The new Tory government worked out a temporary settlement between the two sides and established a commission to investigate the circumstances of Davis’ death and the broader labour conflict that had plagued Nova Scotia since BESCO began operations.

Before long, the company was in receivership, its president Roy Wolvin ousted and by 1930, BESCO had ceased to exist.

People, however, still gather in Cape Breton each spring to observe what is now provincially recognized as William Davis Memorial Miners’ Day. This year, the small village of Port Morien hosted the official ceremony to honour the day’s namesake and all the other men who lost their lives working the Nova Scotia mines.

The town is the site of Cape Breton’s first coal operation that had started nearly 300 years ago. A few kilometres away lies the Donkin mine, in the early stages of exploration which, like many in Cape Breton, remains under care and maintenance. CIM September/October 2009 | 91

cim news CIM welcomes new members Adetunji, Lukemon, Alberta Ahmad Nadri, Moho Safwan, Ontario Anderson, William S., British Columbia Badami, Zain, Ontario Blouin, Michael, Québec Bonci, Gheorghe, British Columbia Chakowski, Sean, Alberta Chan, Lok Si, Ontario Cheong See, Esther, Ontario Conteduca, Melissa, Québec Cottrell, Ben, Ontario Coulombe, Jean-Guy, Ontario Daigle, Paul, Ontario Dakane, Abdulkadir, Alberta Dawood, Ihassan, Québec Desroches, Dany, Québec Duchesne, Rémi, Québec Durlik, Damian, Ontario Esfahani, Shaghaycah, Ontario Eyong, Christos, Cameroon Fletcher-Kyle, Joshua, Québec Ford, Andrew N., Ontario Francis, Tristan A., Ontario Genoway, Whitney R., Québec Gervais, Raphael J., Québec Godard, Mike, British Columbia Gravel, Dominic, Québec Ho, Bernadette, Ontario Hodges, Gregg, British Columbia Houlding, Julian, British Columbia Hussain, Sadakat, Ontario Jacques, Alexandre, Québec Janiuk, Szymon, Ontario Jarry, Gilles, Ontario Kang, Jidong, Ontario Keech, Julianne E., Ontario Kelly, Andrew, USA King, Keith E., Ontario Landry-Tolszceuk, Nicolas, Québec Lapointe, Ugo, Québec Lopez, Irwin, Québec Machado, Gabriel, Québec MacPhee, Joseph, Nova Scotia Manhas, Jaylem, British Columbia Maqsoud, Abdelkabir, Québec Marquis, Robert, Québec Martin, Jim, Ontario Miller, Warren, Australia Mohamed, Ahmed, Québec Morris, Natasha, Alberta Munduomisjoory, Rohan, Ontario Noor, Meskatun M.N., Ontario Oluwaseyi, Iyimide, Nigeria Patel, Avakash, British Columbia Pépin, Nicolas, Québec 92 | CIM Magazine | Vol. 4, No. 6

Pépin, Genevieve, Québec Peyronnard, Olivier, Québec Pipo, Benjamin B., Ontario Poirier, Sylvie, Québec Posadowski, Tamara D., Ontario Potvin, Robin, Québec Prairie, Robert, Québec Quevedo, Ricardo, Saskatchewan Raiche, Julie, Québec Renaud, Michel, Québec Richer, Daniel, Québec Rispoli, Katherine, Québec Rivard, Jessica, Québec Robert, Stéphane, Québec Rochon, Paul, Québec Rodriguez, Jerome, Ontario Roy, Emmanuel, Québec Roy, Mélanie, Québec Roy, Pierre, Québec Royer, Luci, Québec Rubenstein, Josh, British Columbia Saavedra, Lilian, Québec Savoy, Daphne, British Columbia Schaefer, Philip R., USA Seleh Mbemba, Faustin, Québec Sharifi, Erfan, Ontario Shockley, James M., Québec Simard, Christian, Québec Simoneau, Vincent, Québec Smarandescu, Mihaela, Romania Smirnova, Evgeniya, Québec Spiegle, Thérèse, Québec Stockermans, Michael A., Ontario

Sukhram, Mitren, Ontario Tabachnik, Nadya N.T., Ontario Tan, Jonathan, British Columbia Tetley-Gérard, Kim, Québec Thao Dang Nghiem, Linh, Québec Therrien, Denis, Québec Therrien, Patrick, Québec Thibodeau, Eric, Québec Thomassin, Yves, Québec Ting, Yen-Jui, Ontario Trang Pham, Tracy, Ontario Trépanier, France, Québec Van De Walle, Édith, Québec Veilleux, Stephan, Québec Verburg, Rens, USA Villeneuve, Mathieu, Québec Visnovec, Karl, Ontario Wang, Shize, Ontario Wilson, Mytes M.W., Québec Wong, Wilbur, Ontario Yong Shin, Da, Québec Yugo, Nick, Ontario Zampini, Jordan, Québec Zhan, Johnny, USA Zheng, Shipeng, Nova Scotia

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A look back in time 20 YEARS AGO… • A technical paper by J.G. Bensley and K.S. Detheridge advocated the implementation of integrated process information and control systems, dwelling on the benefits of getting computerized process control and MIS components to interact with one another.

• E. Wright’s paper on the practical application of computers in mining geology predicted that “some day the coreshack may contain an analytical station to aid the geologist in estimating mineral percentages and logging characteristics such as grain size, texture and structure.”

• The historical metallurgy article reviewed the conservation of iron from shipwrecks.

• CIM advertised the position of Manager of Membership Development, whose responsibilities were to include developing and implementing a membership recruitment strategy and a continuing education plan for members.

The above were taken from the September 1989 issue of CIM Bulletin.

cim news CIM steps up in the fight against cancer

WORLD HEAVY OIL CONGRESS 2009

With the support of members and industry, CIM staff put their best feet forward in the fight to end cancer. On August 22 and 23, the seven-member “CIM Walkers” team participated in The Weekend to End Breast Cancer, a 60-kilometre walk through the streets of Montreal and surrounding communities. The event raised a grand total of $5.7 million in support of research for breast cancer and all women’s cancers at the Jewish General Hospital.

Almost 2,200 men and women shared a high-spirited sense of community. “What an incredible experience,” said Robbie Pillo. “The support we received throughout — from the crew, the volunteers and the organizers — was unbelievable.”

“What really struck me was the outpouring of support from people on the street — complete strangers encouraging us,” added Joan Tomiuk. “This event is not just about the fight against women’s cancers, but about living and bringing the community closer together.”

Even plagued with blisters and tender feet, everyone agreed it was well worth their efforts. In fact, the team members are already gearing up for next year’s event. The CIM Walkers were led by team captain Anne Brosseau and included Heather Ednie, Chantal Murphy, Dawn Nelley, Robbie Pillo, Joan Tomiuk and Jean Vavrek. Thanks to the

A final team cheer before the walk begins. From left to right: Anne Brosseau, Chantal Murphy, Heather Ednie, Robbie Pillo, Jean Vavrek, Dawn Nelley and Joan Tomiuk.

support of friends, family, CIM members and industry, the team raised close to $16,000.

The Women in Mining network of Toronto participated in the Toronto event on September 12 and 13, continuing the minerals industry’s demonstration of its commitment to a healthy society. Together, we truly do make a difference. CIM

NEW LOCATION AT PUERTO LA CRUZ, VENEZUELA

November 3 - 5, 2009

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This November, the globe’s most prestigious gathering of heavy oil professionals descends on Puerto La Cruz, Venezuela for the World Heavy Oil Congress. Previously held in Beijing, China and Edmonton, Canada, this event brings together the industry’s entire global supply chain for a threeday exhibition, conference and networking experience.

When representatives from 17 countries assemble in the energy hub of Latin America, ensure your company is represented.

Visit worldheavyoilcongress.com today to register or exhibit.

2009 Congress Stakeholders:

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September/October 2009 | 93

cim news Fundraising on the fairway CIM Crowsnest Branch holds its seventh annual golf tournament and scholarship fundraiser

By Chris Ryan

Left to right: Todd Weatherby, Don Osbourne, Martin Zral, Dave Swail

Each year, the CIM Crowsnest Branch hosts a golf tournament and scholarship fundraiser in Fernie, British Columbia. The popular daylong event gives industry members the opportunity to reconnect with colleagues, make new acquaintances and simply have a good time. Held on June 25, this year marked the seventh anniversary of the event.

One of the major objectives is fundraising for the long-standing CIM Scholarship that is awarded annually to a student entering a postsecondary earth sciences-related field of study. Recently, the branch also created an annual Trades Scholarship, which is awarded to a student entering a trade school. Both scholarships entail a $1,000 award in the first year, with the CIM Scholarship awarding an additional $2,000 for the second year of studies.

This year, the CIM and Trades scholarships were awarded to Ben Campbell of Crowsnest Pass and Dustin Zuffa of Fernie, respectively.

With golf being the other order of business, we were fortunate to have the weather on our side — for the most part. The day, starting warm and 94 | CIM Magazine | Vol. 4, No. 6

Left to right: Jason Kruszelnicki, Harvey Langdon, Bill Fleming, Blaine Beranek

sunny, did end with some light showers. All in all, the downturn in weather seemed to have little effect on the overall mood of the golfers, even if their game performance may have been dampened.

At the end of the game, everyone enjoyed a sit-down dinner at the clubhouse restaurant. Boyd Payne, CEO, Teck Coal, who returned for the second year as the event’s keynote speaker, had the audience rapt with his inspirational style.

Amidst it all, trophies donated by P&H were awarded for the top team, the longest drive, the longest putt and for “closest to the pin.” In keeping with the format of the tournament

over past years, the many donations from local and distant sponsors allowed every golfer to go home with a prize. Some of the key prizes were put into our ever-popular silent auction, which has been a huge success for the past two years.

At the close of a good day of golfing, dining, inspiration and just plain fun, the sun set on the event and all who had worked to make it happen could take a deep breath and relax.

Many thanks go out to those who volunteered their time and effort to the planning and execution of the event.

Looking ahead, we hope, at some point, to expand the event into a full weekend of activities. CIM

Moving on up Copper Fox Metals Inc. has appointed Elmer B. Stewart as its president and CEO and Ernesto Echavarria to its board of directors. Stewart, a geologist with 35 years of experience, has been involved in exploration and mining in North America and internationally throughout the America’s, Africa and Asia. Echavarria currently owns 39 per cent of the issued and outstanding common shares of Copper Fox. High River Gold Mines Ltd., a Toronto-based gold operator with interests in Burkina Faso and Russia, has appointed Andrei Maslov as its new CFO.

cim news Active in Fort McMurray CIM’s Fort McMurray Branch is still going strong after 30 years

By Christian West Despite the ongoing recession, Fort McMurray remains the economic engine of the country. The ability of the community’s flourishing economy to attract workers from all over Canada, especially Newfoundland, has earned it the tongue-in-cheek tag of Newfoundland’s third largest city. According to the 2008 census, the Regional Municipality of Wood Buffalo, in whose jurisdiction Fort McMurray falls, is home to over 100,000 residents, the vast majority of whom are connected, in some way or other, to the mining industry.

A thriving mining boomtown creates both opportunities and challenges for a CIM branch. The Fort McMurray Branch enjoys significant corporate support for its technical presentation series and social events. We are very grateful to the operating companies and suppliers who line up to sponsor events and donate prizes and supplies. On the other hand, our prosperous economy necessitates long work hours for our significant membership base. This means that it is a challenge for many of our members to find the time to attend CIM events.

The Fort McMurray Branch aims to host approximately six technical talks each year, drawing on local experts, suppliers and the CIM Distinguished Lecturers to bring timely and meaningful topics to our membership. For just $5, members can enjoy an enlightening technical talk and network over a pizza and drink reception.

We also host two very popular social events each year. The Curling Funspiel is held at the end of January and sees 32 rinks participate in a fun-filled day of roundrobin curling and socializing.

Equally popular is the annual golf tournament held at the end of June.

With a few extra holes worked into the game, 42 teams participate in this event, working their way around a course sprinkled with sponsored holes, aiming to take home fantastic prizes. Both events, organized by long-time branch executive members, have become fixtures on the local CIM calendar.

A great mining centre like Fort McMurray is fortunate to have numerous CIM societies active in the region. For several years now, the annual conference for the Alberta, Nunavut and Northwest Territories region of the Canadian Mineral Processors Society has been held here. The day-long event features presentations by regional operating companies and suppliers, with participants flying in for the meeting from all parts of the territory. This year, the event will be held on October 29.

The Coal and Oil Sands Society has always drawn a lot of attention from local members who flock to its annual conferences and meetings held in the southern parts of the province. With the recent split in the society that was brought about by a 2008 CIM Council motion, the new Oil Sands Society has begun to take form with John Rhind at the helm.

The Fort McMurray Branch has been successful for the past three decades because of the dedication of a core group of volunteers. We are very proud of our member Ken Chekerda who won the Coal Award at the CIM Conference and Exhibition this year. The award recognized Chekerda’s unfailing support of CIM at the branch, society and national levels over the past 30 years. As longstanding executives like him prepare for impending retirement, a “changing of the guard” is taking place within our branch executive. CIM

Top: Ken and Lonnie Chekerda enjoy a crowd-pleasing treat at the annual golf tournament; Middle: Annual Curling Funspiel; Bottom: Hitching a ride at the annual golf tournament September/October 2009 | 95

cim news Going strong at 122 The Mining Society of Nova Scotia holds its 122nd AGM

By Florence Sigut The Mining Society of Nova awarded the 2009 CIM Scotia (MSNS) has the distinction Fellowships. Shane MacLeod, a of being the oldest formally organrepresentative of the legendary ized mining association in Canada. choral ensemble, The Men of the Starting out as the Gold Miners Deeps, was presented with a Club in 1887, the society has been CIM Special Recognition award affiliated with CIM since 1918. for his group’s contribution to The 122nd annual general preserving and popularizing the meeting of MSNS, chaired by its cultural heritage of the mining president, Gordon Dickie, was industry. held from June 4 to 6, 2009, in The students’ Centennial Dundee, Nova Scotia. During the Scholarship Medals were AGM, council elections were held, awarded to David Walker the annual financial report was (Dalhousie University, mining presented by secretary-treasurer engineering), Ryan Kennedy (St. George Sigut, and a report on the Francis Xavier University, geolFletcher Fairbault Memorial Fund Gordon Dickie congratulates Bob MacDonald, the new president ogy) and Cheley Fougere was tabled. As well, a minute of of The Mining Society of Nova Scotia.

(Acadia University, geology). silence was observed in memory of Adam Doyle, who is pursuing a Gerald Logan, his wife Abigail and all Providers’ Innovative Approaches, bachelor’s degree in materials engideceased members of the society. and Atlantic Canada’s Mining neering, won the Donald MacFadgen In addition to conducting the soci- Opportunities — included over a Memorial Scholarship for 2008. Sam ety’s business, a major objective of dozen presentations on cutting-edge Schwartz and Fenton Isenor, both of every MSNS AGM is knowledge-shar- applications, emerging trends and Sydney, Nova Scotia, won the Mining ing through technical presentations. new developments on the technical, Society Medal and the President’s This year’s technical program chair, operational, investment and human Citation, respectively.

Dan McLeod (who is also the society’s resources fronts. The technical sesAmong the dignitaries who spoke second vice-president), with the help sions were followed by a panel discusat the conference were Peter of incoming president Bob sion moderated by David Forrester.

Underwood, Nova Scotia’s Deputy MacDonald, put together an excellent The highlight of the meeting was Minister of Natural Resources, and technical program under the theme the Thursday evening awards dinner CIM past president Jim Popowich.

“Economic/ Social Challenges — where, over a sumptuous banquet A full list of the newly elected office Mining Our Way Forward with and amid great pomp and circumbearers will be available shortly on the Innovation.” stance, homage was paid to the MSNS website. CIM Three sessions — Mining Operations year’s outstanding achievers. Bob From Cradle to Grave, Industry Service MacDonald and Alan Davidson were www.miningsocietyns.ca

MSNS would like to acknowledge the continuing support of their sponsors ADI Amirault Ventures Atlantic CAT Atlantic Hardchrome CBCL Contestoga-Rovers Dexter Construction

96 | CIM Magazine | Vol. 4, No. 6

LaFarge Canada Logan Drilling Merrex Gold

NS Department of Economic and Rural Expansion Sansom Equipment Limited Shaw Resources

Mining Association of Nova Scotia (MANS)

Wilson Equipment

National Gypsum

Xstrata Coal

S & M Trucking

Supporting science and young scientists Student award sustains knowledge-sharing in geological sciences

By Robbie Pillo

Eric Hoffman, the founder of Activation Laboratories (ACTLABS), knows the recipe for success in industry research and development.

Providing contract analytical testing and development services to the mining and mineral exploration industries, ACTLABS has become a name to reckon with in all aspects of analysis, from academic research applications to quality control functions. Not content to rest on its success, ACTLABS is hard at work developing new methodologies and innovative techniques. The company has recently expanded the range of services it offers to cater to the pharmaceutical, biotechnology, forensic, material and environment markets.

One indicator of ACTLABS’s commitment to advancing scientific research is its generous sponsorship of the CIM Geological Society’s ACTLABS Best Student Paper Award since 2005. This $1,000 prize rewards student authors for research publications in the peer-reviewed Exploration and Mining Geology (EMG) journal.

Hoffman viewed the twin problems of an aging population of geologists and the relative scarcity of new talent entering the field as a call

to action, which he felt compelled to answer. “If we do not invest in the industry’s future, we risk losing the standing the Canadian minerals industry has gained over the past several years,” he cautions.

While research and development are widely recognized as important factors in the advancement of any industry, the fact that the transfer of new knowledge is equally vital is often overlooked. According to Hoffman, the goal of this award is to “entice students to publish their research theses and consequently advance mineral exploration and technology by contributing to the reserve of geological information.”

As the learned journal published

by CIM through its Geological Society, EMG was the obvious choice.

“We wanted to increase the geological content offered by CIM by promoting the publication of mineral depositand exploration geology-related papers,” explains Hoffman.

Hoffman has made it company policy to give back to an industry which, he feels, has been instrumental in his own success. In addition to sponsoring this award, ACTLABS has provided direct aid for research projects through the Canadian Mining Industry Research Organization (CAMIRO), with a $10,000 donation to Lakehead University for the purchase of new microscopes, and several grants to universities in support of geological science research.

Once a PhD student himself, Hoffman received numerous awards and scholarship funding, including the NSERC Postdoctoral Industrial Fellowship, which helped him commercialize the technology he had employed for his doctoral research thesis. CIM www.actlabs.com September/October 2009 | 97

Parley in Prince George The CIM North Central BC Branch AGM featured informative presentations and charity fundraising

By George Zervas The CIM North Central BC Branch Annual General Meeting was held from June 26 to 28. Hosted at the Coast Inn of the North in Prince George, this year’s AGM continued on the success of last year’s signature regional event.

Prince George mayor Dan Rogers delivered a welcome address at the wine-and-cheese reception. Taking advantage of the gathering, long-lost colleagues and friends revived memories and updated one another on current projects and business developments. Remarkably, given the current economic situation, the branch succeeded in keeping the delegate registration levels it had achieved in 2008, with 115 participants signing up.

The theme of this year’s AGM, “Surviving the Economic Downturn,” resulted in a call for presentations related to cost-saving and efficiencyimprovement initiatives.

Theme-based presentations were given, centring on topics that included reformed drilling and blasting practices at Gibraltar mine, oxide copper flotation at Mt. Polley Mining, and a session on economic prospects and risks by the local Bank of Montreal branch. Presentations on the progress of future mining projects in the northern BC area included a Mt.

Milligan update by Wes Carson (Terrane Metals Corp.) and an update on the Prosperity Project by Keith Merriam (Taseko Mines Ltd.). Both of these projects are in the federal environmental assessment process.

The CIM North Central BC Branch presented a donation of $5,200, which was raised during the 2008 AGM, to the Northern BC Friends of Children Society, and announced the raising of an additional $2,000 at the 2009 AGM. Based in Prince George, the Northern BC Friends of Children Society assists families with exceptional costs related to the medical needs of ailing children.

At the AGM, branch executive reelections saw the return of Grant Carlson (Gibraltar mine) as secretary, Jamie Hull (Wolftek Industries) as vice-chairman and Clarke Anderson (Univar Canada) as treasurer.

Outgoing chairman Greg Rasmussen (Xstrata Technology) passed the baton to George Zervas (Gibraltar mine), the 2009-2010 branch chairman.

With Vancouver hosting the CIM Conference and Exhibition 2010 next May, the branch executive is inspired to carry the momentum into June so that the 2010 North Central BC Branch AGM is as successful and interactive as the last two meetings have been. CIM

Obituaries CIM expresses its sincere condolences to the families and friends of the following members: John Bolger joined CIM as a student member in 1966. He died in May 2009.

Richard Bray joined CIM in 1944 and became a life member in 1979. He died in June 2009.

Alain Claveau became a member of CIM in 1975.

Rupert Wiseman joined CIM in 1946, became a life member in 1983 and was the recipient of a CIM District Distinguished Service Award (District 1) in 1989. He passed away on June 30, 2009.

From business to pleasure CIM Northern Gateway Branch works hard and plays hard

By Roy Slack

Tracy Watkins and Charlie Toeppner cruising on the Chief Commanda

In its quest to improve the industry’s image and extend its public outreach the CIM Northern Gateway Branch hosted Paul Hébert, executive director of the Federated School of Mines, on May 20. The objective of the Federated School of Mines — a collaborative effort between seven post-secondary institutions in northern Ontario is to attract people to the region, strengthen communities and assist the industry in meeting its educational needs.

Hébert, who was formerly the executive director of the Mining Industry Human Resources Council (MiHR), has a wealth of knowledge and experience in the area of mining industry human resources needs and trends. His presentation, “Human Resource Requirements in the Mining Industry,” examined the problem of forecasting human resources supply and demand in our industry. He described the role the Federated School of Mines will play in addressing some of the mining industry’s future requirements. Although the present economy has taken some immediate pressure off the recent labour pool shortfalls, all major indicators point to an upcoming rise in skilled labour shortage.

Sponsored by the City of North Bay, the lunch meeting drew many attendees who, in addition to being enlightened by Hébert, were treated to the Davedi Club’s famous Italian buffet.

Although the branch is usually tirelessly involved in painting a more accurate public image of the industry, it sometimes gives its members the chance to unwind and hit the deck, so that they may return to their tasks refreshed.

On June 5, over 170 people boarded the Chief Commanda for the branch’s annual Lake Nipissing Boat Cruise Social. This year’s theme, PartiGras, featured fiery music and a flaming hot barbeque. The balmy weather and gentle breezes set the stage for a fun-filled and festive evening, which gave new meaning to the term “rock the boat.” A 50/50 draw was held, where half the proceeds benefitted the North Bay food bank and the other half was awarded to the winner of the draw.

At the end of the evening, as the boat returned to the dock, the group was treated to one of North Bay’s famous Lake Nipissing sunsets, bringing the event to a glorious conclusion. CIM

cim news Keeping the flame burning The winner of the Coal Award fuels neighbourly spirit

By Robbie Pillo

Engaging the community

Ken Chekerda, an active and dedicated CIM volunteer, was the winner of CIM’s 2009 Coal Award. The prestigious honour recognizes his contributions to the social and technical endeavours of the former CIM Coal and Oil Sands Society and to Canada’s resource industry.

Photo courtesy of Normand Huberdeau

Chekerda’s passion and involvement are not restricted to his beloved industry. He is just as committed to his local community. Through the CIM Oil Sands Branch and the CIM Coal and Oil Sands Society, Chekerda has been involved in many fundraising initiatives benefitting the Northern Engaging the industry Lights Regional Hospital, Ever since he attended his Keyano College scholarships first CIM meeting in 1974, and the Fort McMurray Chekerda has enthusiastically Public Library reading incendone his part to carry out tive program. He and his wife CIM’s aims and objectives.

Lonnie were recently presented with a civic award From Sparwood, British CIM Past President Jim Gowans (right) presents Ken Chekerda with the Coal from the Municipality of Columbia, to Edmonton and Award.

Wood Buffalo for their comthen Fort McMurray, wherever munity improvement efforts. his profession took him, he A graduate of the Northern Alberta called the local CIM branch his home. people it had long invested in,” he Institute of Technology, Chekerda Chekerda believes that “CIM is a recalls. “It was a big blow to a small worked in the coal sector for 13 years common link to just about every min- group.” before shifting to oil sands, where he ing community you can go to.” has been for the past 23 years.

Ever the team player, Chekerda Engaging youth has taken on many roles within his Having learned the value of engag- Planning to retire and move to branch executive. As chair of the Oil ing potential members early on, Victoria, British Columbia this fall, he Sands (Fort McMurray) Branch and Chekerda now turns his attention looks forward to this new adventure the former Coal and Oil Sands towards increasing student participa- with both excitement and trepidation.

Society, Chekerda faced all the chal- tion in the branch. “We try to get “It’s a little scary. But I am eager to get lenges that come with the territory. young people more involved, so that to know a new community. There is “If you don’t keep members inter- when we leave, the branch will be in always a group that needs our help.” ested and active within the group, a solid position,” says Chekerda, who the branch will eventually dwindle is confident that the branch will be Forever engaging and die,” he says, adding, “My prileft in capable hands. “There are some His commitment to CIM has not falmary focus was to increase the numgreat young movers and shakers tered. “One of the most important benber of people involved within the within the group who will become efits of being part of CIM is the relaexecutive.” By combining its efforts the next generation of industry and tionships that develop over the years. with other local organizations, the CIM leaders.”

Wherever your life takes you, there is a branch gained access to more people, Among his many roles as a mingood chance you will encounter some broadened the reach of its membering specialist at Syncude Canada, of your past colleagues, whether at an ship and elevated its profile in the the one Chekerda values and enjoys industry event or some obscure airport community. most is mentoring. Whether guid- when a CIM logo on someone’s carryKeeping members active was not ing his young charges through on bag catches your eye.” engineering solutions or people As another chapter of his life the only challenge Chekerda’s team skills, Chekerda revels in the freshbegins, Chekerda moves on with faced. At times, it was quite difficult ness of their perspectives. “They hopes of renewing a CIM Victoria to simply keep them as members. have such energy. We work off each Branch. ”It’s a big world out there, but “When the turnover rate was at a other like that.” with CIM it’s a little friendlier.” CIM high, the branch lost so many 100 | CIM Magazine | Vol. 4, No. 6

calendar CIM EVENTS

AROUND THE WORLD

South Central BC Branch Annual Meeting September 23-25 Kamloops, British Columbia Contact: Peter Witt Email: peter.witt@teck.com

Heavy Minerals Conference 2009 September 20-23 Drakensbourg, South Africa Contact: Julie Dixon Tel.: +27.11.834.1273 Email: julie@saimm.co.za Website: www.saimm.co.za

APCOM 2009 October 6-9 Vancouver, British Columbia Contact: Chantal Murphy Tel.: 514.939.2710, ext. 1309 Email: cmurphy@cim.org Website: www.cim.org/apcom2009 Red Lake Branch Annual General Meeting October 22 Red Lake, Ontario Contact: Mollie Isaac Tel.: 807.735.2077 Email: redlake@cim.org Vancouver Branch Luncheon Meeting October 22 Vancouver, British Columbia Contact: Patty Moore Email: patty.moore@wardrop.com World Gold 2009 October 26-30 Johannesburg, South Africa Contact: Jackie van der Westhuizen Tel.: 27.11.834.1273/7 Email: jackie@saimm.co.za Website: www.worldgold2009.com Saskatoon Branch Annual Ball October 27-28 Saskatoon, Saskatchewan Contact: Stephanie Oleniuk Email: stephanie.oleniuk@wardrop.com Newfoundland Branch: Mineral Resources Review November 5-7 Delta St. Johnâ&#x20AC;&#x2122;s Hotel and Conference Centre St. Johnâ&#x20AC;&#x2122;s, Newfoundland Contact: Len Mandville Tel.: 709.729.6439 Email: lenmandville@gov.nl.ca

Enviromine 2009 September 30-October 2 Santiago, Chile Contact: Olga Cherpanova Tel.: +56.2.652.1519 Email: info@enviromine2009.com Website: www.enviromine2009.com International Mine Water Conference October 19-23 Pretoria, South Africa Contact: Cilla Taylor Tel.: +27.0.12.667.3681 Email: confplan@iafrica.com www.wisa.org.za/minewater2009.htm Mine-Tech International Conference and Exhibition November 2-4 Johannesburg, South Africa Contact: Nadia Boucher Tel.: +27.21.700.3541 Email: nadia.boucher@spintelligent.com Website: www.minetechexpo.com MAPLA 2009 November 4-6 Antofagasta, Chile Contact: Fabiola Bustamante Email: info@mapla.cl Website: www.mapla.cl Flotation09: International Flotation Conference November 9-12 Cape Town, South Africa Contact: Barry Wills Email: bwills@min-eng.com Website: www.min-eng.com/flotation09/

September/October 2009 | 101

history Porphyry deposits (Part 1)

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

In the May 27, 1899 issue of the Engineering and Mining Journal [a weekly technical magazine that was the bible of the international mining industry at the time], the respected editor, Richard P. Rothwell, commented on a report by Thomas Weir, manager of the Boston Consolidated Copper & Gold Mining Co., Ltd., which owned claims that became a key part of the Bingham Canyon mine in Utah in 1910. In his report, which was the basis of a prospectus that was being used to raise development funds in London, Weir stated that “a mass of ore 2,000 ft long, 3,500 ft wide and 500 ft deep” … had an average grade of between 0.75 and 2.5% Cu… and contained about 291.7 million tons of copper (ore). In the words of Mr. Rothwell: “Mr. Weir’s assumptions are certainly on an exceedingly liberal scale, and it may well be questioned whether a good deal more development work is not needed to prove the existence of so great a mass of ore. But even if we accept the statement and admit that the company has a very large body of lowgrade ore, it does not seem to better the case ….

Even if the greater part — or even the whole — should reach 2 per cent, it would not better the situation. It would be impossible to mine and treat ores carrying 2 per cent or less of copper under existing conditions in Utah …. Allowing for the greatest cheapness of mining, which can be made possible by the large size of the orebody, one cannot figure out anything but a heavy loss on 1.5 and 2 per cent copper ore. Moreover, it is not probable that the price of copper is going to stay permanently at 17 or 18 c.; and with every fall the loss on operations would be greater …. Therefore, the more ore it has of the kind it claims, the poorer it is. Undoubtedly, our London friends who are buying the stock at high prices will realize this a little later.”

The point of major significance, however, is that at that period, 99 engineers out of 100 who had considered the problem would have frankly held that it was impossible to exploit profitably any deposit containing 40 lb of copper per ton …. The editor unquestionably reflected with accuracy the judgement of the mining engineering profession as a whole. Perhaps the most tangible factor that they failed to appraise was the economy that might be affected by operation on a large scale .…

But the fact remains that in 1900, the identical deposits that in recent years have contributed 35 per cent of the world’s copper were regarded as so much recalcitrant waste rock! ~ Parsons, 1933, p. 4-7

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Porphyry-type mineral deposits are generally thought to have been first recognized and mined at the beginning of the 20th century in the southwestern United States, where the name was first applied to relatively large and low-grade copper deposits containing small amounts of molybdenum, silver and gold. Most people in the mining industry would be surprised to learn that porphyry-type mineralization was actually first discovered around the year 1440 and mined shortly thereafter at Altenberg, in the eastern Ore Mountains (Erzgebirge), about 32 kilometres south of Dresden, on the eastern border of Germany (Kühn and Seltmann, 1993; Altenberg home page, 2009; Cathro, 2006). It is not surprising that early explorers in the United States would not have read about the Altenberg tin mine because the best reference had been published in Latin by Agricola in 1556 (Hoover and Hoover, 1912).

A large part of the Altenberg deposit consists of disseminated cassiterite in a greisenized (altered) granitic porphyry and rholite that is intensely fractured into countless minute, randomly oriented stringers. According to the Hoovers, Agricola called the altered and fractured assemblage zwitter. It occurred in the cupola of a granite stock that was about 350 metres in diameter, with flanks that dipped outward at about 70 degrees. Mining was conducted almost continuously for about 550 years, until the end of March 1991, and totalled about 37 million tonnes. The average grade at closure, when about 60 million tonnes remained, was about 0.3% Sn (Kühn and Seltmann, 1993).

The authors of the earliest geological textbooks attempted to divide mineral deposits into obvious categories but found that the Altenberg deposit was difficult to classify. One of the first compilers, Bernhard von Cotta (1870), created a new category for Altenberg that he called impregnations/disseminations, and stated that it differed from all other metallic deposit types in having undetermined limits that were not sharply defined. In his textbook, Arthur Phillips (1884) placed it in a new category that he called unstratified deposits, and subdivided it into impregnations and stockworks. He defined a stockwork as a network of small veins interlacing one another and traversing the rock in various directions, and generally traversed by numerous thread-like veins containing cassiterite. He also noted that the mineralization was not always confined to the veins and that a considerable portion could occur in the host rock, which was generally porphyrytic and surrounded by granite and different varieties of porphyry.

Parsons (1933) was one of the first to provide a clear definition of porphyry copper deposits and to describe the origin of the title. He pointed out that much of the mineralization can be described as disseminated although, in many cases, most of the ore coats the walls of cracks and minute fractures. The first four porphyry mines to be developed — Bingham, Utah; Morenci, Arizona; Ruth (Robinson/Ely), Nevada; and Braden (El Teniente), Chile — were all associated with porphyritic rocks. The term porphyry refers to a granitic texture that consists of conspicuous phenocrysts in a fine-grained or aphanitic groundmass.

The next three porphyry mines developed in Arizona were also included in the definition, even though most of the ore occurred in the schistose wallrocks adjacent to the intrusions. Parsons suggested that any deposit that met the following six criteria could be considered a porphyry deposit: 1) of such magnitude and shape that it could be mined advantageously by large-scale methods, either by underground caving or in open pits; 2) the distribution of minerals

economic geology

Location map of the Bingham Canyon mine, Utah (from Parsons, 1933)

was so general and uniform that “bulk” methods of mining would be more profitable than selective methods; 3) an intrusion of porphyry or closely related igneous rock has played a vital part in the genesis of the ore; 4) “secondary enrichment” had concentrated the ore; 5) the extent of the orebody was usually determined by economic limits rather than by geological structure; and 6) the average copper content was comparatively low (with three per cent as the maximum) and grinding and mechanical concentration were necessary to produce a suitable smelter feed if the ore was a sulphide. He did not mention tin.

As porphyry-type deposits were discovered around the world, the original definition developed in the southwestern United States has had to be modified to accommodate many regional variations. The original U.S. discoveries were mainly copper deposits containing some molybdenum, silver and gold, whereas examples discovered elsewhere exhibited many variations. Moreover, it became obvious that supergene enrichment resulted from regional weathering history and, while it had an important impact on grade and economics, it was not an essential part of the porphyry deposit type. According to Kirkham and Sinclair (1995), porphyry deposits can be subdivided into ten subtypes according to the metals that are essential to the economics of the deposit (metals that are by-products or potential by-products are listed in brackets):

Map of the southwestern United States showing the location of the principal porphyry copper mines (from Titley and Hicks, 1966, p viii).

• Cu (±Au, Mo, Ag, Re, PGE) • Cu-Mo (±Au, Ag) • Cu-Mo-Au (±Ag) • Cu-Au (±Ag, PGE) • Au (±Ag, Cu, Mo) • Mo (±W, Sn) • W-Mo (±Bi, Sn) • Sn (±W, Mo, Ag, Bi, Cu, Zn, In) • Sn-Ag (±W, Cu, Zn, Mo, Bi) • Ag (±Au, Zn, Pb) Thus, a tin porphyry such as Altenberg is now a member of the family.

Many geological axioms have been handed down from generation to generation, including: “Gold is where you find it” (in other words, it can occur anywhere), and “The best place to look for a mine is near other mines.” A favourite axiom that miners never tire of reminding geologists of is “Mines are made, not found.” In other words, prospectors and geologists find mineralization, but it requires a miner or mining engineer to turn that shiny or heavy rock into ore.

The earliest porphyry mines were probably the best examples of this axiom because they were uneconomic mineral occurrences that prospectors and geologists had unwittingly walked over for decades, or perhaps centuries.

In the early days of underground lode mining in North America and elsewhere, the principal targets had been rich September/October 2009 | 103

economic geology Lavender Pit, which produced from 1917 until 1975 (Bryant and Metz, 1966).

A few mining engineers and financiers with remarkable vision recognized that the size of these overlooked, low-grade mineralized zones was often substantial, in some cases many orders of magnitude larger than the production from the historic mining camp. They reasoned that these huge, lower grade areas could be considered as mineral deposits in their own right if economies of scale would make them profitable to develop, just like a surface iron or coal mine, or a gravel pit. This theory was first Sketch map showing the claim groups held by the Utah Copper Co. and the Boston Consolidated Copper & Gold tested and proven feasible, to the Mining Co. prior to their merger in 1909. The location of the original mining area is indicated, with the Utah portion astonishment and chagrin of the in the valley and the Boston portion on the upper slopes of the mountain (from Parsons, 1933). skeptics at Bingham Canyon, Utah.

It was a revolutionary accomplishveins that were narrow enough to be mined safely without ment that dwarfed all previous mining advances and fundamachinery or sophisticated timber support. The Comstock mentally changed the economics of copper mining. Porphyry Lode in Nevada was one of the first examples of successful, mining not only lowered the production costs of copper, large-scale mining of wide veins in “weak” ground with the aid molybdenum, silver and gold, but also ensured that the of mechanization and square-set timbering. Like all pioneering world would have abundant supplies far into the future. CIM achievements, it represented an important advance in mineral economics because it lowered the cost of mining, increased the References depths at which mining could be conducted, and expanded Altenberg. (2009, April 11). Wikimedia Commons. Retrieved 13:22, July 22, 2009 from the number of targets worth exploring (Cathro, 2008). http://commons.wikimedia.org/w/index.php?title=Altenberg&oldid=20174545 In many extensive vein systems, particularly those rich in Bryant, D. G., & Metz, H. E. (1966). Geology and ore deposits of the Warren Mining copper, the best veins are surrounded and encompassed by District. In S. R. Titley, & C. A. Hicks (Eds.), Geology of the porphyry copper deposits, Southwestern North America (pp. 189-203). Tucson: The University of Arizona Press. innumerable thinner veins and narrow fractures that are too Cathro, R. J. (2006). The Central European (Erzgebirge) tin deposits. CIM Bulletin, 98 low grade to be individually mineable. After the richest (1091), 78-80. veins had been exploited, the weakly mineralized areas were Cathro, R. J. (2008). The Comstock lode, part 1. CIM Magazine, 3 (2), 61-63. usually abandoned after the miners moved on with any Hoover, H. C., & Hoover, L. H. (1912). Footnotes to their English translation of Agricola’s equipment that was salvageable. As a result, many mining 1556 mining book De Re Metallica. London: Mining Magazine (reprinted by Dover Publications, Inc., New York, 1950), p. 110. camps in the southwestern United States quickly became ghost towns, even though vast amounts of low-grade minerKirkham, R. V., & Sinclair, W. D. (1995). Porphyry copper, gold, molybdenum, tungsten, tin, silver. In O.R. Eckstrand, W. D. Sinclair, & R. I. Thorpe (Eds.), Geology of Canadian alization remained. One of the best examples was the San mineral deposit types (pp. 421-446). Ottawa: Geological Survey of Canada, Geology of Manuel district in Arizona, which was explored on and off Canada, No. 8. from the 1880s until about 1918, then abandoned until Kühn, K., & and Seltmann, R. (1993). The Altenberg tin deposit — geology, mineralization and mining history; in R. Seltmann, and K. Breiter (compilers), Hercynian Tin underground development was carried out from 1948 to Granites and Associated Mineralisation from the Saxonian and Bohemian Parts of the 1956 (Thomas, 1966). That resulted in a large porphyry Erzgebirge (pp. 51-57). Potsdam: GeoForschungsZentrum, Excursion Guide, International Association on the Genesis of Ore Deposits. mine that produced between 1956 and 1999.

Parsons, A. B. (1933). The Porphyry coppers. New York: The American Institute of Mining Other porphyry camps in Arizona, such as Bisbee, and Metallurgical Engineers. evolved gradually from underground mining of rich lenses Phillips, J. A. (1884). A Treatise on ore deposits. London: MacMillan and Co. of “limestone replacement” oxide ore to surface mining of Thomas, L. A. (1966). Geology of the San Manuel ore body. In S. R. Titley, & C. A. Hicks porphyry mineralization. The oxide deposits, discovered in (Eds.) Geology of the porphyry copper deposits, Southwestern North America (pp. 1331877, were structurally controlled and arranged in a semicir142). Tucson: The University of Arizona Press. cular pattern around the Sacramento stock and several Titley, S. R., & C. A. Hicks (1966). Geology of the porphyry copper deposits, Southwestern North America. Tucson: The University of Arizona Press. nearby porphyritic intrusions. Exploration of the porphyry von Cotta, B. (1870). A Treatise on ore deposits (translated from the second German edimineralization began as early as 1909 and resulted in the tion by Frederick Prime Jr.). New York: Van Nostrand.

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metallurgy The historical mines of Almadén

By O. Puche Riart, L. F. Mazadiego Martínez, P. Kindelán Echevarría, Universidad Politécnica de Madrid, Madrid, Spain; and E. Orche García, Universidad de Vigo, Vigo, Spain

Introduction The historical mines of Almadén, which were actively functioning for over two millennia, produced a third of the world’s mercury — a total of 7,500,000 flasks (Hernández, 1995). After mining and metallurgical production ceased in 2003, the mines were turned into a museum. Efforts are currently underway to have the mines declared a World Heritage Site.

Almadén is situated in the southwestern part of the province of Ciudad Real in Spain. A Roman roadway passed by the Alcudia Valley, to the south of Almadén, between the cities of Emérita Augusta (now Mérida) and Cástulo (now Linares). Another roadway, a bit further to the west, started in the Alcudia Valley and went via Cordova to the centre of the Iberian Peninsula, with a branch going to Almadén. This exceptionally well-networked geographical location contributed to the discovery, exploitation and commercialization of the extensive resources at Almadén. Although these historic Roman roadways are no longer in use and have been replaced by modern roads, along many stretches they remain quite well-preserved.

In geological terms, Almadén is situated in the central area of the Iberian Peninsula, a part of the Central Zone of the Hercynian mountain range. It is part of the Vertical Folders Domain. However, in northern Spain, this area abuts the Recumbent Folders Domain. The succession of compact quartzite and soft slate beds found in this setting, together with the vertical position of the layers, results in a characteristic and spectacular Appalachian landscape. Unique minerals such as massive cinnabars (extraordinary pieces of crystallized mercury sulphide) and barites with cinnabar inclusions are found in abundance in this region. The epigenetic mineralization of cinnabar and other minerals (barytes, dolomites, etc.) is associated with Hercynian orogeny. An exceptional universal geochemical anomaly has generated the deposit.

Historical heritage The first known use of the resource was in making the mineral pigments that were used in

numerous prehistoric paintings. The name Almadén comes from the Arabic word for mine. The Almadén mine was described by the Arab geographer Al Idrisi of Ceuta in the 12th century. At that time, more than a thousand men worked at the mine, which had already been excavated to a depth of 420 metres. Centuries earlier, the Romans had begun extracting cinnabar in this area after vermillion had been successfully commercialized throughout the Mediterranean. Pliny the Elder (AD 23-79) had described the distillation of native mercury from cinnabar in marmites. Lead, silver and copper were also obtained at the mines of Quinto del Hierro and El Mesto, east of Almadén.

Although there were many other mines in Spain, the one at Almadén was the largest and most extensively developed.

In the Middle Ages, alchemists were preoccupied with concocting the philosopher’s stone — a magical substance that could purportedly transmute base metals into gold.

Mercury was thought to be one of the basic reagents of philosopher’s stone. Mercury was also an important ingredient in many medieval medicines. The Swiss chemist and doctor Theophrastus Bombastus von Hohenheim (14931541), who was better known as Paracelsus, rejected traditional medical orthodoxy and successfully identified the main symptoms of various illnesses such as goitre and syphilis. To treat them, he used sulphur and various mercury-based compounds.

The importance of Almadén is evident from its role in one of the defining events of Western civilization — Christopher Columbus’ voyage to the Indies. In The History of the Indies (Book 1, Chapter LXV and LXVI), Father Bartholomew de las Casas (1474-1566) reports that Columbus, before embarking on his journey to the New World, had asked the Catholic Monarchs Ferdinand and Isabella to furnish him with the services of gold panners and miners from Almadén (Prieto, 1968). Between 1525 and 1645, under the reign of Charles I, Almadén was controlled by the Fugger family. Later, from 1835 to 1911, control of the mines was vested with the Rothschild family.

With the discovery of mercury mines in Huancavelica in 1563, colonial South America’s needs of mercury were Cinnabar crystals, Mina Vieja de Almadén (Puche, 1989) September/October 2009 | 105

metallurgy met by the Vice Royalty of Peru. However, New Spain (as Mexico was then called by the Spanish), continued to rely on the mercury supply from Almadén.

Quicksilver would be transported from Almadén to Seville. Protected by warships, a flotilla bearing mercury and other goods would leave from Seville and sail to Veracruz, Mexico. The cargo would A drawing depicting the xabecas furnaces at Huancavelica, Peru then head to Mexico City and the rest of the territory over the Royal Roadway. On the return trip, the ships would carry silver ingots bearing the royal stamp.

Even in those early days, there was great cultural exchange between South America and Europe. At the beginning of the 16th century, a special type of mercury furnace, called xabecas, was introduced to Almadén.

In the xabecas furnaces, ceramics pots were filled with cinnabar, sealed with clay and heated from below.

These furnaces found their way to the Huancavelica mine in 1598.

Another such example was the use of gunpowder in mining. First employed in 1626 in the town of Schemnitz ˘ (now known as Banská Stiavnica in present-day Slovakia), gunpowder reached Almadén in 1689; it was also used to build the drainage gallery of the Our Lady of Bethlehem adit at Huancavelica. Technology also flowed in the opposite direction. Kilns invented in 1633 by the prospector Lope Saavedra Barba in Peru were introduced at Almadén in 1646 by Juan Alfonso de Bustamente.

For a very long time, the Spanish economy subsisted on the mining of mercury and precious metals coming from the Indies. To ensure its sustenance, the best Spanish scientists were sent there to develop mining activity. Examples of Spanish scientists who played important roles as expatriates include Antonio Ulloa (1716-1795), who mentioned the existence of platinum in his work Historical Account of the Trip to Southern America (1748); the Elhuyar brothers, Juan José (17541796) and Fausto (1755-1833), who discovered tungsten in 1783; and Andrés Manuel del Río (1764-1849), who discovered vanadium in 1801.

Another important Spanish scientist who travelled to conduct research in America was Jerónimo Ayanz (15131613), who in 1606 invented a steam pump for the extraction of water in the Potosí mine. His invention was one step ahead of the pumps that Thomas Savery invented in 1698 and Thomas Newcomen invented in 1712. All of these pumps were the precursors of the steam engine that Watt famously invented in 1768 (García Tapia, 1992). The 106 | CIM Magazine | Vol. 4, No. 6

Watt pump itself was introduced in Almadén at the beginning of the 19th century.

Almadén as a centre of teaching In the 18th century, Mexican silver mining was expanding rapidly and there was a growing need for quicksilver to extract silver through amalgamation. However, in 1755, a major fire at the Almadén mines created serious supply problems for the next two years. Several projects were implemented in the area during that period to forestall the labour migration. The Buitrones de Almadenejos enclosure was raised, the San Rafael hospital for miners was built and a hard labour prison camp was set up. Another venture undertaken at that time was the search for new mineral deposits. It resulted in the discovery of the Las Cuevas (1774) and La Nueva Concepción (1779) deposits in the Almadén region. The second half of the 18th century also bore witness to the development most of Almadén’s mining infrastructure and architectural heritage including the hexagonal bullring (1752), the Mining Academy (c. 1785), the door of King Carlos IV (1795) and the winch at San Carlos, Almadenejos.

Also in the second half of the 18th century, German miners were hired to restore Almadén’s mining works.

They introduced systematic mining using the compass, the theodolite and other modern instruments. In addition, they introduced the teaching of mining engineering, which resulted in the founding of Almadén’s Mining Academy by King Charles III in 1777, just a couple of years after the foundation of a similar academy at Freiberg.

Between 1745 and 1747, there was an unsuccessful attempt to create a School of Mines in Guatemala (López, 1983). In 1757, an Academy of Mines was created in Potosí (Habashi, 2003), but it proved to be short-lived (Serrano, 1994). The Mining Academy of Almadén, being the first Spanish school of mines, was significant enough to influence the reopening of the Mining Academy of Potosí in 1779) and the creation of the Royal Seminary of Mining in Mexico in 1792.

A fire at the Almadén mines provided the impetus for the introduction of new methods of timbering (in 1790) and extraction.

In the Larrañaga method (c. 1804), large brick arches were used instead of wood to eliminate the presence of combustible material. This technique would be supplanted later on by other methods such as cutand-fill (at Mina Vieja, around 1914), open pit mining (El Entredicho The door of Carlos IV (1795)

metallurgy mine, 1978) and vertical crater retreat (Mina Vieja, 1981; Las Cuevas mine, 1986).

Modern installations, machinery and technologies deployed at Almadén contributed greatly to the development of mines and mining in general. Idria furnaces (1806), mine shaft extractions machines (about 1870), Cermak Spirek furnaces (1905), compressed air (1914), electrification (1918), workshops and compressor rooms (1924), mercury stores (1941), San Joaquin’s shaft (1952), Pacific-Herrshof furnaces (1954), and the structural reform of San Theodor’s shaft (1962) were some of the more influential developments at Almadén. Many of these still exist and have shaped the cultural and technical landscape of the mining industry in this territory.

Other patrimonial values In addition to its natural, archaeological, historical and architectonic heritage, nonmaterial cultural heritage has also been significant. The religiousness of Almadén’s miners remains an important spiritual force among the people.

The miners entrust their lives to the protection of the Virgin Mary in the form of various local Madonnas like the Virgin of Linarejos, the Virgin of the Caridad del Cobre, the Virgin of Candelaria, etc. The most important patroness of miners, the Virgin of Estrella de la Mina (or Virgin of the Star of the Mine), continues to be present at all opencast mines. Similarly, because of the association of her legend with lightning, Saint Barbara became the patron saint of artillerymen, military engineers, miners and others who work with explosives. Interestingly, the patron saints of mineral extraction shafts were the

Your Source For Metallurgy and Materials Science

Germanic saints of Freiberg — Saint Joachim, Saint Theodore and Saint Aquilinus. They were introduced by German technicians who worked at Almadén during the second half of the 18th century.

Almadén today Until recently, neither the archaeological and industrial heritage of Almadén nor its monumental architectonic patrimony had received any recognition from Spain’s central government or the region’s local authorities. In fact, important parts of the Almadén heritage were destroyed in the 20th century, especially during the early years of Spanish democracy. The hard labour prison camp was demolished at the end of the 1960s to make room for the new School of Mines. The winch at Vadeazogues mine was pulled down to facilitate the opening of the El Entredicho mine.

Finally, at the beginning of the 1990s, the large gate of El Pozo mine was destroyed to accommodate the widening of the road from Cordova to Almadén.

Fortunately, by the 1980s, attempts to safeguard the site’s mining heritage were underway. A mining historical museum was founded in 1985. The Spanish Society for the Defence of the Geological and Mining Heritage was constituted a decade later. The Society issued a comprehensive list of monuments that it considered essential to conserve.

In 1999, the Fundación Almadén was established to commence several restoration projects. Among its first tasks was the restoration of the San Raphael mining hospital.

Using funds put up by the Spanish ministry of science and education, the Foundation assembled a team of architects in 2002 to guide the restoration work. CIM

Suggested Readings García Tapía. N. (1992). Del dios del fuego a la máquina de vapor: la introducción de la técnica industrial en Hispanoamérica. Valladolid : Ámbito, Instituto de Ingenieros Técnicos de Espagña.

Habashi, F. (2003). School of Mines: The beginnings of mining and metallurgical education. Quebec City: Métallurgie Extractive Québec.

Hernández, S. A. (1995). Las minas de Almadén. Madrid: Minas de Almadén y Arrayanes, S.A (MAYASA).

López A. J. M. (1983). Los hermanos Elhuyar, descubridores del wolframio. 1782-1783.

Madrid: Fundación Gómez-Pardo.

Maffei, E. and Rúa de Figueroa, R. (1871). Apuntes para una biblioteca española de libros, folletos y artículos impresos relativos al conocimiento y la explotación de las riquezas minerales y à las ciencias auxiliares. Madrid: J. M. Lapuente Nemitz, R. (1997) Santa Bárbara a través de los tiempos. Madrid: Encuentro Ediciones.

Prieto, C. (1968). La Minería en el Nuevo Mundo. Madrid: Revista de Occidente.

For more details visit:

www.metsoc.org or www.cmq-online.ca

Puche Riart, O. (1989). Mecanismos estructurales del volcanismo paleozoico en la región alcudiense. Unpublished doctoral dissertation, Universidad Politécnica de Madrid, Spain.

Serrano, C. (1994). Transferencia de tecnología y relaciones de intercambio. Caso de estudio: la amalgamación y las escuelas de minería de la colonia. In S. Figueiroa & M. Lopes (Eds.), Geological Sciences in Latin America — Scientific relations and exchanges (pp 201-233). Campinas Brazil: Universidade Estadual de Campinas, Instituto de Geociencias.

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executive summaries

YOUR

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TO INDUSTRY KNOWLEDGE

Peer reviewed by leaders in their fields CIM Bulletin abstracts 109

Three-dimensional numerical modelling of joint spacing and orientation effects on rock cutting process by a single TBM cutter

by M. Sharifzadeh and A. Iranzadeh

110

Exploration and Mining Geology Journal Volume 18, Numbers 1 to 4

111

Canadian Metallurgy Quarterly Volume 48, Number 2

Complete CIM Bulletin papers are posted in the online Technical Paper Library

www.cim.org 108 | CIM Magazine | Vol. 4, No. 6

executive summaries Three-dimensional numerical modelling of joint spacing and orientation effects on rock cutting process by a single TBM cutter

In accordance with previous studies and pressure core theory, the fragmentation and indentation process is complicated. Tensile cracks are the main cause of crack initiation and chip formation. To evaluate crack initiation and propagation in rock by a TBM disc cutter, three parameters (induced tensile stress, induced shear stress and maximum displacement) were calculated. Based on pressure core theory, induced tensile stress played an important role in forming tensile cracks.

Tensile stress values were recorded in periodic steps, in the plane section that the cutter force enters and in parallel planes at distances of +0.15, -0.15, +0.3 and -0.3 metres.

Using the innovate algorithm, the stress level with the probability of creating chips was established as critical stress in each section and the values of these critical stresses were compared in different joint orientations, spacings and sections to determine critical joint orientation and spacing.

Naturally, some differences between the results of the numerical model and the observations were witnessed. The main reason for these differences is that, with numerical modelling, the filling and aperture of joints are not taken into account, nor is the continuous boring process considered.

According to the provided results, the following conclusions can be drawn: • The critical angle of joint orientation is in the range of 45 to 60º, where the possibilities of the highest penetration rate can be reached.

• The critical spacing of joints, which has important effects on the value of critical stress, is 200 mm.

• Joint orientation generally has a greater effect than does spacing, as joint orientation affects the induced stress field.

E N G I N E E R I N G

The performance of TBMs depends on the efficiency of the cutters, which can be influenced by geological conditions and rock mass properties. In this study, a three-dimensional numerical model, based on the discrete element method, was used to evaluate the effects of a TBM cutter on joint orientation and spacing of the fragmentation process. Several models were constructed to study the effects of variable orientation. These models included different spacings, variable spacings, different orientations of the fragmentation process and different sections of the block model.

Results show that initiation and propagation of cracks is generally located along the tensile break zone. Two modes of crack initiation and propagation are possible. In the first mode, cracks initiate from the joint surface and develop up to the free surface; in the second mode, cracks initiate from the broken section and develop up to the cracked surface.

R O C K

With the significant advances in capacities of thrust and torque, as well as the development of large-diameter rolling cutters, tunnel boring machines (TBMs) are now extensively utilized in tunnelling. The prediction of TBM performance in different rock masses was considered an important part of project schedulling and the selection of tunnelling methods. In the past, various models have been proposed based on field observations and laboratory tests. These models are generally divided into two categories: empirical and theoretical-empirical.

M. Sharifzadeh and A. Iranzadeh, Department of Mining, Metallurgical and Petroleum Engineering, Amirkabir University of Technology (Tehran Polytechnic), Tehran, Iran

September/October 2009 | 109

emg abstracts

Exploration and Mining Geology Journal Volume 18, Numbers 1 to 4 Post-Early Cretaceous Mississippi Valley-type Zn-Pb Mineralization in the Bongara Area, Northern Peru: Fluid Evolution and Paleo Flow from Fluid Inclusion Evidence N.I. Basuki and E.T.C. Spooner, Department of Geology, University of Toronto, Toronto, Ontario The Bongara area, northern Peru, contains Zn-Pb mineralization with characteristics typical of Mississippi Valley-type (MVT) systems. The northwest-southeast-trending late Triassic-Jurassic carbonate host rocks of the Pucará Group were locally replaced by early (D1) and late (D2) dolomite. Fluid inclusion microthermometric data from dolomite and sphalerite are typical of MVT ore fluids (78–1870C; ~15–23 wt.% CaCl2 equivalent), and do not show apparent covariation between temperature and salinity.

Homogenization temperature data from D1 and D2 dolomite show a decrease from northern (mean Th = 138°C) to central (mean Th = 126°C) to southern areas (mean Th = 102°C), suggesting fluid flow from north to south. Assuming a geothermal gradient of ~30°C/km and an average surface temperature of ~20°C, the lower temperature limits may approximate the ambient host rock temperatures, whereas the upper temperature limits may represent minimum temperatures of a deeper aquifer, probably at a maximum depth of ~6000 m. The lower temperature limits are also similar to the estimated temperatures if dolomitization and mineralization took place in the Late Cretaceous at ~2000-3000 m depth, probably during the formation of the Peruvian fold and thrust belt near the present day Peru-Ecuador border.

Fluid inclusion data show that the fluids in each studied location had relatively uniform temperatures and salinities during dolomitization and mineralization. A significant salinity drop and a slight temperature decrease are observed during late calcite precipitation, suggesting mixing of brines with dilute, cooler fluids.

Résumé — La région de Bongara, dans le nord du Pérou, contient des minéralisations qui présentent des caractéristiques typiques des systèmes de type Mississippi Valley (MVT). Les roches carbonatées encaissantes du Groupe de Pucara d’âge Triasique Supérieur à Jurassique d’orientation nord-ouest – sud-est ont été localement remplacées par de la dolomite précoce (D1) et tardive (D2). Les données de microthermométrie des inclusions fluides provenant de la dolomite et de la sphalérite sont typiques des fluides associées aux MVT (78–187ºC; ~15–23 % poids équivalent CaCl2) et ne semblent pas présenter de covariance entre la température et la salinité.

Les données de température d’homogénéisation provenant des dolomites D1 et D2 décroissent en allant du nord (Th moyenne = 138°C) au centre (Th moyenne = 126°C) puis au sud (Th moyenne = 102°C), suggérant que ces fluides ont circulé du nord vers le sud. En assumant un gradient géothermique de ~30°C/km et une température moyenne à la surface de ~20°C, la température la plus basse pourrait constituer une approximation de la température ambiante de l’encaissant alors que la température la plus haute pourrait représenter la température minimale d’un aquifère plus profond, lequel aurait été situé à une profondeur maximale de ~6000 m. Les limites inférieures de température sont également comparables aux températures estimées si la dolomitisation et la minéralisation ont eu lieu au Crétacé Supérieur à une profondeur de ~2000–3000 m, en supposant qu’ils ont eu lieu durant la formation de la ceinture de plis et de failles de chevauchement Péruvienne près de la frontière actuelle entre le Pérou et l’Équateur.

Les données d’inclusions fluides montrent que les fluides présents à chacune des localités étudiées présentait des températures et des salinités relativement homogènes au cours de la dolomitisation et de la minéralisation. Une baisse de salinité importante combinée à une faible baisse de température ont été notées durant la précipitation de la calcite tardive, ce qui suggère le mélange des saumures à des fluides moins salins et plus froids.

Excerpt taken from abstracts in EMG, Vol. 18, Numbers 1 to 4.

Subscribe—www.cim.org/geosoc/indexEMG.cfm

110 | CIM Magazine | Vol. 4, No. 6

cmq abstracts

Canadian Metallurgical Quarterly Volume 48, Number 2 Formation of Massive Gunningite-Jarosite Scale in an Industrial Zinc Pressure Leach Autoclave: A Characterization Study L. Becze, M.A. Gomez, J.F. Le Berre, McGill University, Montreal, Quebec; B. Pierre, Xstrata Copper Division, Timmins, Ontario; and G.P. Demopoulos, McGill University, Montreal, Quebec Recent attempts to increase the throughput in an industrial zinc pressure leach autoclave resulted in massive scale formation not encountered previously. According to a comprehensive characterization study, the results of which are presented in this paper, in addition to jarosite and elemental sulphur that commonly form and report in the residue of this process, the scale samples contained significant amounts of the mineral gunningite (ZnSO4· H2O) plus minor amounts of szomolnokite (FeSO4·H2O). SEM-EDS examination of cross sections made from the reduced scale revealed gunningite which acted as a binder forming a matrix within which the natrojarosite lenslike particles were embedded. The presence of gunningite and the other major phases (natrojarosite, hematite, elemental sulphur and szomolnokite) were established unequivocally by applying vibrational (ATR-FTIR and Raman) spectroscopic analysis in additional to conventional XRD method. Finally the quantitative abundance of each of these phases was determined via the development of a 3-step extraction-dissolution procedure. According to this quantitative method, the composition of the bulk of the scale consisted of gunningite (23-55%), natrojarosite (13-37%), hematite (13-26%), elemental sulphur (3-10%), szomolnokite (3-7%) and sphalerite (0.7-3%).

Material Balance of Silicon in Aluminum Reduction Cells F. S˘imko, Slovak Academy of Sciences, Bratislava, Slovakia; and M. Stas˘, Slovalco a.s., Z˘ iar nad Hronom, Slovakia The material balance of silicon in the aluminum reduction cells at Slovalco Inc. related to the production of 1000 kg of aluminum was performed and the distribution of silicon between the bath, the aluminum and the anode gases was evaluated using a statistical analysis. The total silicon material balance (inputs – outputs) in the entire investigated period is not zero (265 g of Si on behalf of the outputs). The excess of silicon in the output materials is caused by secondary sources of silicon, which were not incorporated into the balance. From a statistical point of view, the content of silicon in aluminum is rather invariable during the investigated period.

The small difference in content of SiO2 between primary and secondary alumina indicates that the loss of silicon by entrainment of particles from the bath is an unlikely process. The crushed bath seems to be a very important flow in the process as it accumulates most of the silicon content.

Precipitate Volume Fraction Estimation in High-Strength Microalloyed Steels K. Poorhaydari and D.G. Ivey, University of Alberta, Edmonton, Alberta Many attempts have been made in the past to estimate the volume fraction of small precipitates in steels, both theoretically and experimentally. Theoretical analysis can be very complicated, while experimental analysis can be either difficult or can yield numbers that are inaccurate. In this paper, a simple method is presented to estimate the precipitate volume fraction of nanosize microalloy carbides. The method is based on a combination of simple and well-established thermodynamic calculations for high-temperature precipitation and a simple experimental method for the determination of solutes remaining in solid solution in the steel. Upper bound and lower bound values, as well as the results obtained from an extraction replica method, are presented and discussed.

Excerpts taken from abstracts in CMQ, Vol. 48, No. 2.

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September/October 2009 | 111

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