CIM Magazine September/October 2007 by CIM-ICM Publications

www.cim.org

Publications Mail No. 40062547

February/février Sept/Oct • sept/oct 2006 2007

More development

More sustainability

More coal & oil sands

Boyd Payne on met coal • New projects and expansions: Fort Hills, Suncor, Kearl, etc. • Canadian coal action

Syncrude SO2 levels plummeting • Foothills Model Forest • Clean coal means a new energy era

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CONTENTS CIM MAGAZINE | SEPTEMBER/OCTOBER 2007 SEPTEMBRE/OCTOBRE

FEATURES 49 54

57 62

Oil sands industry overview Forget Uncle Sam, this industry wants you! Emerging practices and technologies are enabling production rates to keep climbing. See how it’s growing in leaps and bounds. by D. Zlotnikov Survol de l’industrie de sables bitumineux Oubliez l'oncle Sam, c'est cette industrie qui a besoin de vous! De nouvelles pratiques et technologies facilitent l'augmentation de la production. Voyez on y arrive. Coal in Canada—production staying strong in the West Looking for the 4-1-1 on the Canadian coal industry? Look no further—it’s all spelled out here. by D. Zlotnikov Le charbon au Canada : la production demeure forte dans l’Ouest À la recherche du 4-1-1 de l'industrie canadienne du charbon? Ne cherchez plus. Vous trouverez tout içi.

NEWS 12

Offshore operations might face new taxes Proposals in ’07 federal budg-

Design planned for Fort Hills project This integrated oil sands mining proj-

et could hit mining companies by H. Ednie

20 22 26 28 30

ect could be one of the next to enter production by C. Hersey Branding Elk Valley Coal An interview with Elk Valley’s president and CEO Boyd Payne by H. Ednie Recruitment in the oil sands industry Learn how Syncrude is securing its future workforce by H. Eve Robinson Shell Canada/ESA partnership offers a new perspective Satellite imagery aids in sustainable development reporting by D. Zlotnikov Major SO2 reductions underway at Syncrude Hefty investments will lead to a greener future by C. Hersey P&H adds AC drives to shovel line A development project comes to fruition by H. Ednie

The new face of coal Coal Association of Canada chair discusses proposed new

Going clean—the changing face of coal Putting forth potential applications

The coal gasification process Understanding the technology behind coal

The search for low-cost CO2 storage Learn how CO2 sequestration works

solutions to reduce coal emissions by G. White of clean coal technology by H. E. Robinson gasification by H. E. Robinson by H. E. Robinson

Looking forward to Voyageur South expansion Construction could begin soon on this 120,000 bpd project by H. Ednie

Foothills Model Forest—research for a sustainable tomorrow

Making Canada a leader in sustainable forest management by C. Hersey Kearl gearing up to be a producer Meet the next behemoth oil sands project by H. Ednie

COLUMNS

CIM NEWS

TECHNICAL SECTION

64 66 68 71 72 74 76 77 78 80 81 110

MAC Economic Commentary by P. Stothart Mining Lore by A. Nichiporuk Canadians Abroad by H. Ednie Innovation Page by G. Winkel and T. Demorest HR Outlook by M. Sturk Eye on Business by D. Podowski and A. Derksen Student Life by S. Vetter Parlons-en par S. Perreault Engineering Exchange by H. Weldon The Supply Side by J. Baird Standards by A. Simón and G. Gosson Voices from Industry by J. Carter

New members of the CIM family

This month’s contents

HISTORY

IN EVERY ISSUE

89 92

4 8 10 85 109

95 98

California gold by R.J. Cathro The evolution of shaft sinking systems— Part 2 by C. Graham and V. Evans History of metal casting—Part 2 by F. Habashi Mining in Canada—New online series

Editor’s Message President’s Notes/Mot du président Letters to the Editor Calendar Professional Directory

by P. Nowosad

CIM Magazine n Vol. 2, N° 6

Our tradespeople are the safest, most experienced and competent in the business. Our contractors are our partners and together we provide HIGH-VALUE skills that are superior to our competition. We are the experts in providing Alberta with world-class tradespeople through our excellent apprenticeship programs. We spend millions of dollars each year on training and upgrading our union membersâ&#x20AC;&#x2122; skills. Our union members and their families appreciate the health/welfare and pension benefit plans provided by our affiliates. These are some of the reasons why weâ&#x20AC;&#x2122;ve been around since 1906.

Alberta Building Trades Council OF UNIONS T R A I N I N G A L B E R TA N S A N D C A N A D I A N S S I N C E 1 9 0 6 w w w . a l b e r t a b u i l d i n g t r a d e s . c o m

Editor-in-chief Heather Ednie hednie@cim.org Assistant Editor Andrea Nichiporuk anichiporuk@cim.org Technical Editor Joan Tomiuk Publisher CIM

High energy in coal and oil sands ach year the September/October CIM Magazine is a special issue dedicated to the coal and oil sands industry, and this issue’s no exception. As Alberta continues to explode with growth and development, the oil sands industry maintains its position as the primary hub of activity for Canada. This high energy of Alberta’s industry will drive the CIM Conference and Exhibition next year, as it is being held in Edmonton, from May 4 to 7, with the Mining in Society public show and Career Fair running May 2 to 4, kicking off the event. There, leaders of the oil sands and coal industries will share with their peers from base metals, diamonds, uranium, potash, gold… the whole minerals industry will be participating. In the face of the current focus on global warming issues, the minerals industry is stepping up to the plate, demonstrating its commitment to sustainable practices. The coal industry is no exception. Often targeted for GHG emissions, the clean coal technology now promises to ensure coal’s place as an energy producer well into the future. A number of articles in this issue share insight into the opportunities; in particular, please see page 32 for an article on the opportunities for coal, written by George White, chairman of the Coal Association of Canada. Coal gasification and CO2 sequestration aren’t the only technologies promising to further our industry’s environmental performance. Syncrude’s currently working on a major project to reduce SO2 emissions (see page 28), while the Foothills Model Forest (see page 42), was the first-ever winner of CIM’s Syncrude Award for Excellence in Sustainable Development this past year— demonstrating industry’s commitment to a sustainable future. Please read on and enjoy this issue of the magazine. I’d like to thank all the contributors, advertisers, and the people who helped develop story ideas. True to most CIM products and events, this has truly been a group project.

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 ($140.00); Non-members (Canada), $171.20/yr (GST included; Quebec residents add $12.84 PST; NB, NF and NS residents add $24.00 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 Account Managers: (905) 886-6641 Joe Crofts jcrofts@dvtail.com ext. 310 Janet Jeffery jjeffery@dvtail.com ext. 329

This month’s cover Elk Valley Coal’s Greenhills Operations. Photo credit: Daniel Wiener, Montreal, Quebec Layout and design by Clò Communications.

Have an autumn full of colour, Heather Ednie Editor-in-chief

Copyright©2007. All rights reserved. ISSN 1718-4177. Publications Mail No. 09786. Postage paid at CPA Saint-Laurent, QC. Dépôt légal: Bibliothèque nationale du Québec. The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.

Printed in Canada

CIM Magazine n Vol. 2, Nº 6

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president’s notes Recognizing sustainable practices

Jim Popowich CIM President Président de l’ICM

Sustainability, sustainable development, sustainable mining. Just what do these words mean? We all have our own ideas and they can vary widely depending on what roles we have in the minerals or petroleum industries. One thing is certain: the use of our natural resources is an essential and integral part of society (always has been and always will be). It is also my belief that the well-being of any country is directly related to how effectively and responsibly they utilize their natural resources. Another certainty is that eventually any mine will close or an oil well will run dry. We should never mislead any of our stakeholders in this regard. So the real question becomes one of how do we sustain our industries in such a way that we as individuals, or as companies (or collectively), balance economic wealth and socio-economic benefits while mitigating environmental impacts. This also includes understanding the use of products during their life cycle. Through CIM we have an obligation to promote the science and the understanding of sustainability as an ongoing process. We are committed to finding answers and I believe the answers will come from within, as well as from our partnerships and relationships outside our industries. To assist in meeting this objective, Syncrude Canada has sponsored an annual award that would recognize groups or individuals who come up with innovative ways that assist all of the resource industries in developing better sustainable processes. The 2007 Syncrude Award for Excellence in Sustainable Development was the Grizzly Bear Research Program as part of the Foothills Model Forest project in Alberta. You will read more about it in this issue on page 42. I congratulate Syncrude for their leadership in this area and I would ask all members to keep an eye open to the efforts of the communities, institutions, companies, and academics who are working to our common goal and help us to recognize success!

mot du président Reconnaître les pratiques durables Durabilité, développement durable, développement minier durable. Que signifient ces mots au juste? Nous avons chacun notre propre interprétation et elle varie grandement en fonction de notre rôle dans l’industrie minière ou pétrolière. Une chose est certaine, l’utilisation des nos ressources constitue une partie essentielle et intégrale de notre société (il en a toujours été ainsi et cela va continuer). Je crois aussi que le bien-être de tout pays est directement relié à l’efficacité et la responsabilité de l’exploitation des ressources naturelles. Une autre certitude est que toute mine fermera un jour et que tout puits de pétrole s’asséchera. Nous ne devrions jamais tromper la confiance des intervenants à cet égard. La véritable question revient donc à la manière dont nous soutenons nos industries afin qu’en tant qu’individus ou compagnies (ou collectivement) nous trouvions l’équilibre entre les ressources économiques et les bénéfices socio-économiques, tout en atténuant les impacts sur l’environnement. Cela comprend aussi bien comprendre l’utilisation des produits durant leur cycle de vie. Par l’ICM, nous avons l’obligation de promouvoir la science et la compréhension de la durabilité en tant que processus continus. Nous devons absolument nous engager à trouver des réponses et je crois que des réponses proviendront tant de l’intérieur que de nos partenaires et nos relations à l’extérieur de nos industries. Pour aider à atteindre ces objectifs, Syncrude Canada commandite un prix annuel qui reconnaîtrait les groupes ou les individus qui proposent des manières innovatrices aidant toutes les industries basées sur les ressources à développer de meilleurs procédés durables. Le prix Syncrude 2007 pour l’Excellence en développement durable est le Programme de recherche sur les grizzlys de la Forêt modèle des Foothills en Alberta. Vous pouvez aussi consulter la page 42 de cette édition du Magazine pour en savoir plus. Je félicite Syncrude pour son esprit d’initiative dans ce domaine et je demanderais à tous les membres de surveiller les efforts des communautés, des institutions des compagnies et des académiciens qui travaillent à l’atteinte de nos but communs et ainsi nous aider à reconnaître les réussites!

CIM Magazine n Vol. 2, N° 6

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letters Steeped in history Andrea, The article on Rossland, B.C. (August issue, Mining Lore, CIM Magazine) is very interesting particularly since I am from this area and my grandfather was a miner at the IXL. I have a photo in my collection of the IXL Drilling and Mining Crew taken in 1921 which includes my grandfather. He was both a single jack and double jack miner in the Rossland area for many years. I also have a specimen of ore that he had from the IXL which I keep tucked away in a secure place as it is estimated to contain 10 ounces of gold. These are the kind of articles that make CIM Magazine more interesting to read. Jim Cullinane DSI Mining & Tunneling Products

Errata In the article Getting it there: some challenges of equipment logistics and export (p. 20, June/July issue, CIM Magazine) we regretfully printed some errors. The Hitachi plant is correctly called “Hitachi Construction Truck Manufacturing Ltd.” and they supply Hitachi EH4500-2 trucks, not Euclid trucks. Kim Bell’s proper title is manager, marketing support for the Hitachi Global Mining Center, and their customer mentioned in the article is Equinox Minerals Ltd. – Lumwana Project, located in Zambia. CIM would like to apologize for these errors to both Hitachi and to Equinox Minerals Ltd. •••

K1 Mine making safety performance the priority for Mosaic Potash Heather, My August edition of CIM Magazine arrived on my desk this morning. I loved seeing the headline on the cover – The culture of safety: What makes a John T. Ryan winner (Les exploitations les plus sécuritaires). We need more articles of this nature which emphasize safe production and how mining is a leader in safety training and development. Upon reading the article, it contains great interviews which reflect how seriously safety is regarded in these winning mining operations and how a culture of safety is vital. A salute is extended to you as editor and the author for her work. The only quibble I have with the article (page 31) is that the K1 Mine in Esterhazy, Saskatchewan, is owned by Mosaic Potash not PCS and the mine is not located in Sussex, New Brunswick.

Heather, I received my copy of CIM Magazine August 2007 issue today. Your article on the winners of the John T. Ryan awards contains several errors under the “Esterhazy” heading. The K1 Mine is located in Esterhazy, Saskatchewan, not Sussex, New Brunswick. It is my understanding that the mine is owned by Mosaic Potash which was formed by a merger of Cargill Crop Nutrition and IMC Global. It was formerly an IMC-owned mine. PCS Potash, the largest producer of potash in Canada, does have a mine in Sussex, New Brunswick, and several potash mines in Saskatchewan. Your first paragraph is very confusing as facts and errors appear to be intertwined.

Take care, Peter McBride Ontario Mining Association

Regards, Jim Seeley Dynatec Corporation

Note from editor: I appreciate the feedback from Peter and Jim, and have had discussions with the folks at Mosaic. We greatly regret the errors in the article. I’m glad our members picked up on this when I didn’t—the K1 Mine deserves proper recognition for its achievements in safety. 10

CIM sincerely apologizes for errors in the article The safety culture–John T. Ryan winners for safety performance (p. 29, August issue, CIM Magazine). The Mosaic Potash Esterhazy K1 and K2 mine operations are located approximately 225 kilometres northeast of Regina near the town of Esterhazy, Saskatchewan. Production at K1 started in 1962 and in 1967 for K2. Seventeen continuous mining machines extract a 2.4 metre high ore seam using long room-and-pillar methods at extraction ratios ranging from 40 to 50 per cent. Typical composition of the ore is 55 per cent halite (NaCl), 40 per cent sylvite (KCl), 4 per cent carnallite (KCl.MgCl2.6H2O), and 1 per cent insolubles (clays, anhydrites). The ore zone (Esterhazy Member) is Middle Division in age and located within the upper Prairie Evaporate Formation, at a depth of 1,032 metres. There are just over 400 Mosaic employees and staff at the K1 site, who worked 733,000 hours during 2006. The K1 Mine Department has worked without a Lost Time Injury since December 2005, and the K1 Mill Department has worked without a Lost Time Injury since June 2004. Our apologies again to all the workers at this outstanding operation. CIM Magazine I Vol. 2, Nº 6

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news Offshore operations might face new taxes by Heather Ednie

anadian mining companies with operations outside the country may face increased tax payments depending on how the Department of Finance implements a proposal in the 2007 federal budget. “We’re seeing a risk, based on how the proposal is implemented, for Canadian-based companies with operations in countries that don’t have tax treaties with Canada,” explained John Gravelle, tax services partner and Canadian tax leader for the mining industry, PricewaterhouseCoopers. “Many of these countries are in Africa, Central America, and Asia—places with tremendous mineral potential.” Subject to a phase-in period, the provision could require foreign sub-

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sidiaries of Canadian companies to pay current Canadian tax on all earnings in a country that lacks a treaty and does not enter into a Tax Information Exchange Agreement with Canada. The immediate tax would equal tax computed under Canadian rules, less a credit for foreign tax paid. Under existing law, the current tax paid is the tax of the countries they do business in. Incremental Canadian tax is paid only when such earnings are paid to the Canadian shareholder by dividend. “One concern with the Tax Information Exchange Agreements is that they allow the government to obtain information on wealthy Canadians with money in tax havens such as the Caymen Islands,” Gravelle suggested. “There is a feeling that, in

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truth, the government wants information of wealthy individuals with nest eggs offshore, but they are using the companies with foreign operations to obtain it.” Complicating the issue is whether or not all countries will agree to Canada’s request, and what happens if they don’t. “There are trust issues with outside governments, so I doubt that all these countries will comply,” Gravelle noted. “However, if those agreements aren’t concluded immediately, then the companies will be subjected to new taxes.” The proposed new approach will mean companies lose the benefit of a foreign tax holiday, since lower foreign tax immediately results in increased Canadian tax. CIM

Giving back Teach them well and let them lead the way Syncrude announced donations totaling almost $600,000 towards educational initiatives in the Wood Buffalo region. Beneficiaries include Science Alberta Foundation’s Science-ina-Crate program; the YMCA to help start a preschool program; and Keyano College’s Emergency Medical Technician Support program.

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news Design planned for Fort Hills project by Carolyn Hersey On June 28, Petro-Canada, on behalf of the Fort Hills Energy L.P., announced their formal design basis for the new Fort Hills Project. Located in Alberta, Fort Hills is an integrated oil sands mining project, which includes a mine and bitumen extraction plant 90 kilometres north of Fort McMurray and an upgrader in Sturgeon County, northeast of Edmonton. “This milestone marks the partnership’s commitment to proceed with the front-end engineering and design (FEED) stage,” said Petro-Canada spokesperson Chris Dawson. The FEED stage is expected to take about 12 months, after which a definitive cost estimate will be produced. The final “go-ahead” decision on the project will be based upon that cost estimate. The mine had received regulatory approval from Alberta Environment and the Alberta Energy and Utilities Board in 2002, and the first cut (initial mine site when production begins), has been cleared of trees and vegetation. They’re presently in the process of ditching and draining to remove surface water; office infrastructure, heavy haulers, and some other earth-moving equipment have already been put in place. The next step is to drain and contain the subsurface water and remove the excess soil to reveal the precious bitumen ore. Thus far, the mine has ordered 25 of the heftiest trucks they could find, and plans on ordering other long-lead equipment over the next year—and let’s just say the order’s a tall one. About $800 million will be spent on heavy equipment for the mine and upgrader sites over the next year; the preliminary capital cost estimate for the first phase of Fort Hills is $14.1 billion. This first phase is expected to produce about 140,000 barrels per day (b/d) of synthetic crude oil, with production from the Sturgeon Upgrader foreseen in the second quarter of 2012. Bitumen production is anticipated at 160,000 b/d 14

Photo courtesy of Petro-Canada

and is expected to begin in the fourth quarter of 2011. The mine site is located in the Athabasca fairway of prime oil sands mining operations, one of the largest of the few remaining undeveloped leases in the area. Dawson said that so far, the surrounding communities have been mostly supportive. Just before achieving mine approval in 2002, the Alberta Energy and Utilities Board held a public hearing in which opinions were voiced

and concerns addressed. Most people aren’t putting up much of a fuss about the opening of the Fort Hills mine, especially with all the opportunities it has to offer. About 1,100 new permanent jobs will be created, some of which will have to go to foreign workers, but the mine plans on making good use of all the skills and talent around them, which means the surrounding communities get first pick when it comes to employment. The mine also has formal comCIM Magazine I Vol. 2, Nº 6

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news munity partnership agreements with three regional First Nations: Fort McKay, Mikisew Cree, and Athabasca Chipewyan. Petro-Canada and its Fort Hill partners are committed to responsible development, and so they’ve taken it upon themselves to make promises they can be sure to live up to. The company will relocate fish species desirable to First Nations, ensure wildlife use of river valley habitats isn’t disrupted by setting back the mine, and work with First Nations to ensure that reclamation planning and design meets their needs and expectations. In the Fort McKay First Nations’ case, transportation will be provided to and from the Fort Hills mine site for employees and contractors working there. Petro-Canada provides funds and sponsors the Fort McKay First Nations daycare facility; they also work with their school industry group to identify areas to provide funds for projects such as the science fair, year book, earth education

Photo courtesy of Petro-Canada

camp, and more. Mikisew Cree and Athabasca Chipewyan First Nations also benefit from the agreement. Funding is provided for the Aboriginal Summer Student Program, and Petro-Canada made sure to sufficiently distance the mine from the Athabasca River Valley wall so as to maintain the river’s stability. It is perC O R P O R A T I O N haps still very early Resourceful Solutions ~ Global Perspective into the project, but Dawson said that Energy & Natural Resource Consultants “throughout the life Resource Evaluations of the project—and Geology & Hydrogeology as mandated prior to Geostatistics construction—we’re Reservoir Engineering bound by more than Simulations 100 environmental EOR/IOR compliance condiMine Engineering tions set forth by the Geotechnical Engineering Contaminant Remediation Energy and Utilities Data Management Board and Alberta Environmental Management Environment.” Reclamation We can rest easy Project Management knowing the surField Services rounding communiProcess Engineering & Design ties and natural enviFinancial Evaluations ronment are well CO2 Sequestration GHG Management protected, but what about the workers www.norwestcorp.com and their operational Calgary/Vancouver/Salt Lake City/Denver/Golden/Charleston/ environment? Fort Houston/Newcastle NSW/Beijing Hills has it covered. “Workforce safety is

the number one priority at Petro-Canada in all phases of our operations,” said Dawson. The company’s “Zero-Harm” philosophy stems from the belief that almost all injuries are foreseeable and avoidable, both at work and at home. This reflects how Petro-Canada values its workers. To them, occupational illness and injury are unacceptable and are therefore not considered an unavoidable company risk. This philosophy is reinforced by their Total Loss Management (TLM) performance standards. TLM aims to provide a safe and healthy working environment and is also committed to reducing risks to the point where there is “ZeroHarm” to any and all people. In accordance with “Zero-Harm,” Petro-Canada also identifies workplace hazards and monitors the health of the working environment and individual employees. Ongoing industrial hygiene samplings to measure workplace exposures (and provide solutions to those exposures) are all a part of keeping everything and everyone squeaky clean. All employees who are at risk of exposure to potential health hazards are recommended to undergo individual health assessments. In 2006, the company’s “overall total recordable injury frequency (the number of employees and contractors injured on the job per 100 people— TRIF) decreased to 0.85, breaking the 1.0 barrier and putting them among the best safety performers in their industry. This CIM Magazine I Vol. 2, Nº 6

news represents a decrease of 25 per cent compared with 2005.” They plan on continuing to make significant headway. Petro-Canada emphasizes their pledge to safety by regularly participating in safety standdowns—occasions where senior management visits field sites and facilities, to talk with employees about health and safety issues. Thus, PetroCanada reinforces their position on the list of safety leaders. Fort Hills Energy L.P. consists of Petro-Canada (with a Photo courtesy of Petro-Canada 55 per cent working interest), UTS Energy Corporation (with a 30 per Corporation was very much involved in cent working interest), and Teck the re-establishment of the Fort Hills Cominco Limited (with a 15 per cent Oil Sands Project and is the principal working interest), with Petro-Canada founder of the Fort Hills Energy Oil Sands Inc., a wholly-owned sub- Partnership. When all’s said and done, sidiary of Petro-Canada, as the contract partners in the project will most likely operator for the project. UTS Energy be grinning from ear to ear. Once the

final phase is complete, the project is expected to produce up to 280,000 barrels of synthetic crude oil per day by the year 2015. Once the dust has settled, the Fort Hills Project will be running like a well-oiled machine—a very safe, environmentally savvy, machine. CIM

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news Branding Elk Valley Coal by Heather Ednie On August 17, 2006, Boyd Payne took over the leadership of Elk Valley Coal, the second largest producer on the seaborne high-quality coking coal market. Payne’s history in the coal industry is impressive—originally a chemist, he left the oil industry for coal in 1974, found it a fascinating industry, and has been an avid participant since. Originally from Coleman, Alberta, in the Crowsnest Pass and not far from the bulk of Elk Valley’s operations, he gravitated to marketing in the 1990s and spent five years in Singapore for BHP Billiton in their coal marketing department. It offered him the vantage point to see things from another angle and develop a different perspective. He brought that global focus back to Elk Valley last year, and the company’s been driven by renewed energy since his arrival. CIM caught up with Payne on his one-year anniversary with Elk Valley, to discuss the global metallurgical coal market and his approach to maintaining a leading position for the company.

Boyd Payne

development in the BRIC nations (Brazil, Russia, India, and China) has seen the global steel industry prices increase, and steel companies are much healthier today, resulting in a change in their operational approaches. One way is they are seeking more higher quality raw materials, and the price of hard coking coal has virtually doubled.

CIM: What is the situation for Elk Valley Coal today and the Photo taken at Elk Valley Coal’s Greenhills hard coking coal market? Operations. Credit: Daniel Wiener, Montreal, Quebec Payne: We’re selling 23 million tonnes annually, making us the second largest supplier of seaborne high-quality coking coal, after BMA (BHP Billiton/ Mitsubishi). We live in the export world; 35 per cent of our product goes to Europe and the surrounding areas, 10 per cent to South America, and another 10 per cent to North America, while the remainder is shipped to Asia. Hard coking coal has realized indirect benefits from the China phenomenon. The increase of rapid 20

CIM: What situation do you foresee for the future? Are there any risks that might threaten today’s strong market conditions? Payne: Going forward we will have increasing demand, but increasing volatility as well. The situation in China exhibits the opportunity for huge changes, due to the immaturity of their financial structures. History predicts there will be discontinuities, resulting in volatility. As we sit here today, the entire market is affected by global developments—the sub-prime crisis out of the United States is an example. If China were to experience a major banking crash, we’d see major changes in our markets. CIM: So how does a company prepare for potential market fluctuations and shifts? Payne: You have to look at where you are on the cost curve. In our case, we also looked at the quality of our product, and are now driven to produce the best quality as fast as we can, at the best costs we can achieve. It means continuous improvement. You can’t be

news lulled by today’s prices—that’s a trap. You have to first understand your role and position on the marketplace to then best situate yourself to deal with any fluctuations. Over the past year, we’ve dramatically increased the quality of our products and improved our capabilities to produce the high-quality product. Most of our reserves, about 90 per cent, are hard coking coal. We have been working to create the best products from those reserves. Our plan, logistics, port facilities—everything is now blended for the customers’ benefit. It’s about building your brand. We’ve built a strong brand and must be a slave to maintaining consistency. We have repositioned this year as the reliable second largest supplier of seaborne high-quality coking coal in the world. The world is moving at an ever-faster pace. We must up our game.

September/October 2007

CIM: Everyone is talking about climate change today. How has Elk Valley Coal responded to the call for action? Payne: Certainly we all have to pay attention to climate change and take responsibility for our part. At Elk Valley Coal, we export our product to other countries to be consumed by the steel industry. So we work with our customers to provide value to decrease their footprints. The focus is on technologies and efficiencies. In our operations it’s just good business. CIM: You speak about repositioning the company, of continuous improvement, and quality. How do you manage such focused change across existing operations? Payne: The focus must be on quality, excellence of execution, understanding our role in the world, and doing the right thing with it. We have the knowledge and the team to execute. At Elk

Valley, we’ve recognized that true behavioural change and improvement strategies must be across every aspect of the company. People traditionally thought of our assets as the hard tangibles, such as trucks and shovels, but today, we know our assets are everywhere—they include the people, customer equity, and so on. Everything must be examined from the same knowledge perspective and we must keep on improving. CIM: It sounds like you have your hands full at Elk Valley and are relying on your team to realize some major changes. Payne: It’s true, and we have the right people to make it happen. I love this business. The global mining community is relatively small and full of fascinating people. Business is business—what matters is the people. And so I’ve enjoyed my years in the mining industry. CIM

news Recruitment in the oil sands industry by H. Eve Robinson Natural resource industries in Canada rely on a qualified and skilled workforce. These industries are growing and, as a result, they continuously seek capable people for jobs across the country. In order to contend with an increasingly competitive market, companies must develop effective recruitment strategies. Last year, Syncrude Canada Ltd., an Alberta-based company that currently supplies 15 per cent of the nation’s petroleum requirements, hired 750 new people to join their workforce of about 4,500. In response to the job openings, they received 45,000 applications. This year, they hope to hire as many as 1,000 new employees. “Like everyone else in Canada’s resource industry, the recruitment of skilled workers has become more challenging in recent years,” said Alain Moore, a public affairs advisor for Syncrude. ”But we have been successful in finding high-quality people coast to coast. With such a large response to our job openings, we have obviously done a good job at establishing ourselves as an employer of choice and attracted a lot of attention. Our recruitment approach is very strategic and it plays a key role in our business.” Recruitment has significantly increased in the past few years. One of the reasons for this increasing demand is because oil sands operations are expanding, which requires more people to run the facilities. Since the first oil sands project in 1967, the output of marketable oil sands production has increased to 1.1 million barrels per day (bpd) in 2006. According to the Canadian Energy Research Institute (a 2005 study), production could reach up to 3.6 million bpd by 2020. Based on this projection, the global oil sands industry would create approximately 6.6 million years of employment (both direct and indirect) between the years 22

Journeymen welders with an assembled clam bucket for a hydraulic shovel. Photo courtesy of Syncrude Canada Ltd.

2000 and 2020. As much as 56 per cent of this employment would be in Alberta. An added challenge is an increasingly competitive job market combined with demographic realities. There is a large contingent of people currently working in the oil sands industry that will be retiring over the next few years. Moore explained, “This industry had a massive hiring phase back in the late 1970s and early 1980s. These people are getting ready to retire now, after a 25 to 30 year career. To manage replacing a retiring workforce, we actively recruit new employees and provide opportunities where they can be mentored, to gain some of the knowledge people have learned from experience over the years.” Syncrude addresses these challenges by using a specific recruitment approach in order to attract people to the oil sands industry. One of these ways is that the company hires within the mining industry. These employees come from all across Canada with many years of experience. There are differences between operations in the oil sands

industry and other natural resource industries. However, Moore said this works to everyone’s advantage. “It is a two-way street, where people experienced in other types of mining are able to share their experience with our existing workforce, and vice versa.” The company also works very hard to build the capacity for their operations by supporting local employment. Preference is given to qualified applicants who live in the Wood Buffalo Municipality and approximately two out of three of the people hired are local residents. In order to maintain this level of community investment, Syncrude concentrates efforts to help local residents gain the skills they need for a fruitful career in the oil sands. “It starts with finishing high school, then entering a trade, or post-secondary training,” said Moore. “The oil sands is a high-tech industry so we need very highly skilled people. If people are looking for opportunities in the oil sands, they need to receive training, which could involve attending university to CIM Magazine I Vol. 2, Nº 6

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news become an engineer, doing a business degree to gain financial or accounting skills, or learning a trade.” He emphasized “getting a trade is a very valuable skill anywhere in Canada, especially in the oil sands industry. Trades people are very marketable in Alberta.” Another recruitment approach happens in the classroom. Representatives from the company go to schools to inform students of the various opportunities available in the oil sands industry. A number of Grade 9 students are able to tour the facilities to see what is involved; there is also a program that allows employees to take their sons or daughters through the site. “This allows [young people] to see some of their career options,” said Moore. “They might have a good idea of traditional job opportunities such as becoming a welder, mechanic, or electrician, but we enjoy showing them the tremendous range of career paths that we offer.”

Syncrude is also the only oil sands company accredited at the Gold Level for the Progressive Aboriginal Relations (PAR) Program. This recognizes the company’s commitment to “increasing aboriginal employment, assisting business development, building individual capacity, and enhancing community relations,” as outlined by the Canadian Council for Aboriginal Business. Currently, aboriginal people compose about nine per cent of the Syncrude workforce. Syncrude collaborates with government agencies and educational institutions to offer training programs specifically designed to be effective and lead to employment. The Aboriginal Development Program focuses on key areas such as encouraging corporate leadership, employment, business development, education and training, community development, and the environment.

Academic scholarships are also available for aboriginal students interested in pursuing specific career goals. In addition, Syncrude produces an ‘aboriginal review’ each year. This update informs stakeholders about the company’s work with aboriginal relations and provides an overview of yearly performance in the commitment areas outlined in the Aboriginal Development Plan. Recruiting and maintaining a welltrained and productive workforce is essential in the resource industry, and companies such as Syncrude recognize this importance. As stated in their vision and values, “We are in a race with other new sources of energy and our performance over the next three to five years is going to be critical for our long-term success. Syncrude employees have demonstrated ‘heart’ many times in the past, and we are going to rely on this continued dedication to ensure our future success.” CIM

CIM Magazine I Vol. 2, Nº 6

Her view of the world includes ours.

YOU can see it right there in the stainless steel appliances, the children’s metal swing set, the minivan’s smooth curved lines and the bicycle speeding by. Our world is the Elk Valley, and we’re Elk Valley Coal, the northern hemisphere’s single-largest producer and exporter of hard coking coal. Our coal products are found in railroads, shopping carts, automobiles and trucks, and they’re essential to building our skyscrapers, our ferries and even wind turbines. It’s been this way since the Iron Age, when coal was first used to transform raw iron ore into steel, an event that changed the lives of the world’s inhabitants. The rest, as they say, is history – 2,500 years using hard coking coal to create steel.

It’s how our products make it into hers...and yours...every day.

P R O U D LY O W N E D B Y F O R D I N G C A N A D I A N C O A L T R U S T A N D T E C K C O M I N C O L I M I T E D

w w w. e l k v a l l e y c o a l . c a

news Shell Canada/ESA partnership offers a new perspective by Dan Zlotnikov

n late June, Shell Canada and Albian Sands announced a new technology being put into use at the Muskeg River Mine. With the goal of enhancing the company’s reclamation monitoring program, Shell and Albian have contracted the European Space Agency (ESA) to provide regular satellite imagery updates of the project site. The project was born when the ESA, in an effort to expand its satellite imagery customer base, solicited new sustainability-related contracts. Hatfield Consultants, an environmental consulting firm in Vancouver, was one of the groups contacted with the proposal. Hatfield then approached Albian Sands

A sample of the satellite imagery generated for Albian Sands 26

Environmental Manager Darrell Martindale. “Hatfield Consulting does a lot of work with the various satellite image producers, and I’ve been working with them for a long time,” said Martindale. “The ESA put out a solicitation for sustainable development projects, and Hatfield came to me and asked, ‘Do you think this is something we could do?’” Because the Muskeg River Mine is still a relatively new site, said Martindale, the primary function of the imagery data is to supplement the data collected by the monthly ground-based survey teams. The benefit of the satellite data will become more prominent in the

future, when the mine is beginning reclamation activities. “This environmental team may not be here in 30 years,” said Martindale, “but the satellite imagery data will be available, and the analysis can be used in conjunction with the technologies that may be available in the future. At the moment, if aerial photographs are not available, the mine engineers rely on the satellite data for site development planning.” Andy Dean, Hatfield’s remote sensing scientist who has been working with Martindale on the project, explained another benefit offered by this approach. “Satellite imagery presents the information in a more visual, transparent form, which allows Shell and Albian use the information in corporate sustainable development reporting.” This benefit lies at the heart of the original project proposal. The ESA, looking to expand its Earth Observation services to new areas, was seeking to demonstrate not only its ability to generate the relevant measurements, but also show that the data could be incorporated into the standard sustainability reporting done by major corporations. Satellite imagery is well situated for this, said Dean. “It’s important to stakeholders that the data itself comes from an independent source. The analysis of that data, on top of being done by a third party, is audited. All CIM Magazine I Vol. 2, Nº 6

news the analysis methods and statistics produced by Hatfield were audited by PricewaterhouseCoopers. That gives both the company and the stakeholders confidence that the information is correct.” Albian Sands commissions two data sets per year, which provide a complete picture of the changes in vegetation and landscape over the course of the year. But what the company gets is much more than can be seen with the naked eye. “When I purchase the imagery,” explained Martindale, “I’m not just getting photos, I am getting seven or eight spectrum bands of detailed information.” With the continuing improvements in remote sensing technology, the bands can be focused to an extremely fine resolution. “The near-infrared spectrum is a very good indicator of vegetative health. A lush green field will be a bright read in false-colour infrared. In the past five to seven years,” said Dean, “the resolution available to the civilian sector has improved drastically. Where you once had a resolution of 30 metres, now you can have a resolution of a metre or less. Image quality has also improved.”

Other advantages offered by the technique come in the form of standardization. Dean explained that there are standard methods for handling atmospheric and terrain distortion, as well as the nearly fixed position of the satellite. Finally, satellite imagery allows Shell to gain insight into potential cumulative effects of Muskeg River Mine opera-

tions, information that could be used in future expansions. According to Dean, Albian Sands is currently the only project in the region using satellite imagery, but if the project continues to do well, his hope is that other operators take another look at the technique and its potential value to oil sands development and reclamation. CIM

Movin’ on up Janice Dunn Lee became deputy director-general of OECD Nuclear Energy Agency. Prior to taking on the position, Lee had been director of the United States Nuclear Regulatory Commission Office of International Programmes since 1999. Irvine Annesley was appointed director of exploration at JNR Resources. He brings 19 years’ experience as a senior research geologist to the company. Tim Watson became senior vice president of project development at Teck Cominco. He made the move after occupying the position of COO, power and process, at AMEC PLC. September/October 2007

news Major SO2 reductions underway at Syncrude by Carolyn Hersey In a region known for behemoth oil sands projects, construction crews are literally building the foundation of improved environmental performance 35 kilometres north of Fort McMurray. Syncrude is pouring concrete foundations as part of its Syncrude Emissions Reduction Project estimated to cost $772 million. Despite the hefty price tag, Syncrude’s general manager of regulatory and external affairs, Don Thompson, believes it’s an important investment. “This endeavor isn’t about increasing production. Its sole purpose is to make a further reduction in our emissions,” he said. It was taken as a proactive step ahead of regulatory requirement The operator of the Kroll 10000 will have a bird's eye view of Syncrude from a perch 320 feet above grade. and involved a detailed Photo courtesy of Syncrude Canada Ltd. review to find the approscrubbed flue gas flows into a bag “the construction team is using innopriate opportunity and technology. house, which uses fabric filters (much vative solutions to work within that In a nutshell, the Syncrude like massive vacuum bags), and any space while also meeting our commitEmissions Reduction Project (SERP) remaining gypsum and particulate mat- ment to safety and reliability,” said will retrofit sulphur reduction technolter is trapped. Thompson. ogy (flue gas desulphurization) on Particulate emissions should also be It’s an example of innovation. their two original cokers. It will retrofit cokers 8-1 and 8-2 with flue gas scrub- reduced by about 50 per cent as a result Consider the use of the world’s largest bing technology, and along with the of the use of those fabric filters. When tower crane—the first of its kind in flue gas desulphurization unit already all’s said and done, Syncrude’s cur- Canada and only twice before in North attached to its newest coker (coker 8- rently approved SO2 emission level of America has a tower crane of this size 3), the company expects to reduce SO2 245 tonnes per day will drop to 100 and magnitude ever been used. emissions by 60 per cent. tonnes per day. This reduction is also After studying the complexity of the The process involves “dry lime” being achieved at the same time that job and the very minimal space they scrubbing technology, which uses a Syncrude has increased its production had to work with, Syncrude concluded lime solution inside the spray dryer to by more than 40 per cent. that a tower crane was the best option absorb sulphur. This in turn results in Because SERP involves a retrofit, the for the majority of their lifts, and so the the production of gypsum, which is project is currently being constructed Kroll 10,000 was brought in. Only 15 of withdrawn from the dryer. The leftover within an operating facility. As a result, these massive machines were ever built, 28

CIM Magazine I Vol. 2, Nº 6

mostly for the nuclear power industry, but the constructability team found one available in Denmark, and Syncrude purchased it to help with the construction of the project. Tower cranes such as this are normally used to construct skyscrapers in areas where there is very limited working space. This type operates very much like a crane tower, in that it hoists and sets loads, but in the Kroll 10,000’s case, the operator sits 320 feet above the ground. The foundation of the tower itself will be octagonal in shape, and measure about 50 feet wide. While most lifts for the Emission Reduction Project will be in the 90 to 100 ton range, the Kroll 10,000 will stick out like a sore thumb— a very innovative and capable sore thumb. At a radius of 330 feet, the Kroll has a lifting capacity of 104 tons and a hook height of 300 feet. At a 150-foot radius, the lifting capacity more than doubles, to 240 tons. You can bet that with such heavy-duty machinery involved, Kroll technicians will properly train all selected crane operators. With its outstanding lifting capacity, along with the various radii, the tower crane will allow for more pre-assembly to be done off site, thereby avoiding an overcrowded working environment. Ernie Sheaves, a crane and rigging specialist and also a member of the constructability team who recommended the Kroll 10,000, said that Syncrude “will be able to perform more than 90 per cent of their heavy lifts for the project with this tower crane without having to relocate.” He also notes that about two-thirds of the Emission Reduction Project construction site would have been covered by crane mats just to get things up and running. “We’re eliminating the need to build massive crane pads each time we want September/October 2007

to move a crawler crane.” The less time it takes to start reducing emissions, the better. Construction for the Kroll 10,000 is expected to be complete by the middle of September 2007 and ready for use by October. Site preparation for SERP began in 2006, and the civil construction phase of excavation, pilings, and foundation work is scheduled for completion in mid-2007. It will come on line in stages starting in 2009 up until 2011, to allow appropriate tie-ins to the operating cokers. “Syncrude started its leading-edge environmental work since its beginning,” said Thompson. “Our land reclamation and other environmental scientists were the first employees on our site more than 30 years ago.” So, the oil sands pioneer sees this project as a natural and obvious step forward for their organization, which has always been committed to its environmental responsibilities. “We feel this project will help reinforce Syncrude’s position as a leader in the responsible development of the oil sands,” Thompson stated. When it comes to learning more about the environment, their impact, and finding ways to mitigate that impact, Syncrude has long been dedicated to the cause. I suppose, when it comes to the environment, more really is less. CIM

Achievements Top that! Following an analysis of environmental, governance, and social practices and performances of some of the world’s largest mining and metals companies, Innovest Strategic Value Advisors rated Alcan the top metals and mining company. Alcan attributes the triple-A rating it received to the significant efforts made by its 68,000 employees around the world.

news P&H adds AC drives to shovel line by Heather Ednie A new shovel from P&H Mining Equipment is proving its mettle at Suncor’s oil sands operations this summer. The 100-ton payload 4100 BOSS oil sands shovel has been outfitted with an AC drive, and so far it’s been up to the challenge of moving material more quickly than other shovels in the region to help Suncor meet its rising production targets, said Tom Barnes, manager, OE products, P&H Mining Equipment. “At P&H we’ve traditionally offered DC drive technology, and will continue to do so on our electric shovel line,” said Barnes. “We’ve often been asked ‘when’ P&H might move forward on AC drives, as it’s been the general trend for fixed power applications. But we’re cautious. We’ve never been willing to jeopardize the reliability of our equipment.” Over the past few years, as computer technology has advanced, P&H continually found ways to obtain more performance out of their DC drives, and didn’t see a need to switch to AC. However, upon requests from cus-

P&H pilot shovel in action at Suncor

tomers and with growing evidence that AC drive technology had arrived at a point where its reliability and performance matched P&H requirements, they decided it was time to move forward with an AC drive.

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The P&H AC drive development project began in 2004, and the pilot unit was shipped to Suncor last November to be up and running and used in production by March this year, which was achieved. Overall, Barnes said, “We’re very pleased, and the shovel is doing very well—the AC drives are extremely responsive and reliable, and the motors, designed and built by P&H, are performing equally well.” “There was one minor issue in the motor design, but we detected it early, found the root cause, and made the correction.” Barnes recalled. “But the availability and productivity goals set for the pilot shovel have been exceeded—we have a real winner here.” P&H worked with Suncor on the shovel design, primarily for decisions related to maintainability. Suncor was regularly at the table throughout the development process and provided valuable input. With one currently in operation, two more have been sold, and P&H is working on plans to extend AC drives to other models. CIM CIM Magazine I Vol. 2, Nº 6

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news The new face of coal by George White, Chair of the Coal Association of Canada Worldwide coal consumption is expected to increase by 74 per cent from 2004 to 2030.1 It is very difficult to envision how rapidly developing economies such as India and China will be able to reduce their dependence on coal and coal-based technologies. All indicaGeorge White tions are that the 74 per cent is a good number. By its very nature, coal is abundant, available, and affordable. It is widely distributed around the globe and it is particularly abundant in western Canada. As a solid material found relatively close to the surface, the locations of coal deposits are well known. Coal has been in place for millions of years and it is increasingly being exploited by countries throughout the world to drive economic growth. And yet, this consumption of coal is at odds with the worldwide demand to reduce greenhouse gas emissions. Each tonne of coal consumed for combustion has the potential to produce between 1.8 and 3.2 tonnes of CO2, depending on the quality of the coal. At today’s global consumption of approximately 5 billion tonnes per year,2 this amounts to at least 10 billion tonnes of CO2 emissions per year from coal alone. Almost none of this CO2 is captured and it ultimately ends up in the earth’s atmosphere where many of the world’s experts believe that it is contributing to global warming. And much of the world’s coal is used directly for electricity production. Electricity supply and demand are growing on all fronts and 32

along with them the CO2 emissions from fossil fuels. So here we have the issue: how can we reduce the CO2 footprint of coal while at the same time expanding consumption at a rate of 74 per cent over 25 years? Some solutions exist and they may be more plausible than we might think.

Some history

as was the solution. CO2 is a global issue. • ES&N volumes were measured in thousands of tonnes of emissions. CO2 output is measured in billions of tonnes. • There is an immediate local impact of effluent (visible pollution), SOx (acid rain), and NOx (smog) that provides instant feedback on cleanup progress. No so with CO2, whose impact is still disputed by some and has a secondary nature (reduction in ice caps as a result of warming for example). • Finally, the opportunities to resolve the issues associated with ES&N were readily available as add-ons to existing processes. The fact is, we have no technology that will rid us of CO2 emissions once the CO2 is formed. If we are going to utilize carbon-based fuels for energy production, the best we can do is reduce our consumption and capture the CO2 that is produced. All of this supports a conclusion that it will take more than the 30 years to effect a real change in this complex issue. This conclusion is entirely consistent with the progress made in the first 17 years.

In Canada, many remember the pollution issues in the Great Lakes that resulted from effluent releases by neighbouring large industries and municipalities. We can also remember the excessive sulphur dioxide and nitrogen oxide emissions into the atmosphere leading to acid rain and smog. Later, there was the depletion of the ozone layer, a global issue. To a great extent, these issues have been repaired or, at least, been made acceptable, by the implementation of good policy, regulations, and technology. If the pollution and SO2 and NOx issues were prevalent in the 1970s, and they are now under control, we know that it takes 30 years or so to implement effective change. Now, 17 years after the initial attempts of the United Nations to deal with the economic benefits of growth in carbon utiBoundary Dam mine and dozer lization versus the consequential damages associated with CO2 emissions, we are becoming aware of how challenging it is to find a solution for coal-produced CO2. Furthermore, our past successes at cleaning the environment do not offer much assistance with regards to the CO2 predicament for a number of reasons: • Effluent, SOx and NOx (ES&N) issues were local in nature,

CIM Magazine I Vol. 2, Nº 6

news Long-term CO2 reduction scenarios for coal-fired power capacity Leaving the policy and regulatory decisions to others, and solely dealing with thermal electricity production from coal, how are the technology leaders responding to the concurrent demand for more coal consumption and the reduction of greenhouse gas emissions? This question—from a coal perspective—has to be answered in two parts. Firstly, how are we going to reduce the emissions from the existing fleet of coal-fired power plants in Canada and, secondly, what are we going to do to reduce or eliminate the carbon footprint of new coal plants planned to satisfy growth.

The existing fleet Conventional coal combustion, the type used in almost every coal-fired power plant in the world, is becoming more efficient. This allows less fuel to be burned to make the same amount of energy, resulting in fewer CO2 emissions. The impact of this is significant. Worldwide, we find that the newest plants can be as much as 90 per cent more efficient than the oldest. Older plants are usually smaller than the newest plants, largely because advanced materials of construction were not available years ago. As a consequence, operating temperatures and pressures were lower and, in the world of power generation, this means that the older plants are less efficient. Smaller plants were prevalent years ago because demand growth for power was much less than now and the market could not support large plants. Smaller plants are less efficient because they lack economies of scale. Efficiency has a notable impact on emissions. A modern 600 MW ultrasupercritical power plant will produce about 500 tonnes of CO2 per hour at full load, while somewhere in the world, four, smaller, older 150 MW (say circa 1970) plants, producing the same amount of power, create as much as 850 tonnes of CO2 per hour. When each of these older plants is retired there is a significant opportunity to reduce CO2 September/October 2007

emissions, even if the retired unit is replaced by another coal plant. Some would argue that no new coal plants should be built. However, this position belies the economic benefits of coal and ignores the fact that the massive replacement of the world’s oldest plants would result in significant GHG reductions without the risk of implementing different technology. In Canada, there are many coal-fired power plants with heat rate efficiencies in the order of 10,200 KJ/kWh, each producing 0.90 tonnes of CO2 per kWh. A new coal plant, recently commissioned in Japan, has a comparable efficiency of 8,187 KJ/kWh and makes 0.72 tonnes of CO2 per KWh. While the opportunities for GHG reduction are greater in developing nations (where plants are generally older, smaller, and less efficient), even in Canada a potential 20 per cent reduction in CO2 emissions will result if Canada’s oldest plants are replaced with best available new coal combustion technology.

THE SUN NEVER SETS

The good news is that almost all of Canada’s coal-fired plants will require replacement on an economic basis within the next 30 years. This gives us at least a modicum of ability to meet some GHG reductions without additionally taxing our natural gas resources or resetting our electricity supply mix portfolio. This, in turn, translates into significant savings in transmission and distribution infrastructure. The age of Canada’s coalfired fleet is skewed towards the 1970s (older, less efficient plants), so a replacement strategy applied to these plants would have better than average impact when efficiencies are considered. This is a powerful scenario for all concerned. Replace existing coal-fired power plants with new efficient ones at the end of their economic life and save up to 20 per cent in GHG emissions over the next 30 years.

New supply New power supply is another matter. Developed countries, especially

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news Canada, have suffered from the CO2 issue on two fronts. We have always been big consumers of fossil fuels for power generation, but in addition to our high historical consumption, our

ment mix in a stock portfolio. It can be done, but in doing so, the risk profile of the portfolio changes. Changing the supply mix by favouring one type of electricity generation process over

ural gas, nuclear, hydro, etc. would stay pretty much the same in the long term. How can this be achieved while reducing the CO2 footprint of coal? The proponents of cleaner natural gas are quick to point out that, on an equivalent power production basis, natural gas produces less than half of the CO2 that coal produces. The reason for this is that natural gas contains more energy than coal (each of the natural gas carbon atoms is surrounded by four hydrogen atoms and all are combustible) and the processes for making power from natural gas are more efficient than the coal-fired process. If coalâ&#x20AC;&#x2122;s share of the new power generation supply were to be turned over to natural gas, it would represent a significant and problem-solving solution to the GHG reduction commitment in Canada. The

Replace existing coal-fired power plants with new efficient ones at the end of their economic life and

save up to 20 per cent in GHG emissions over the next 30 years real rate of growth in consumption is high. Canadaâ&#x20AC;&#x2122;s size and climate assure this. In essence, we have always produced a lot of CO2 and our growth rate is adding to the problem year over year. Should we therefore reduce our dependence on coal for new supply? If we do so, we will inevitably change our electricity supply mix, something akin to changing the invest-

another can have costly and long-term implications for the operability of an established power grid. Policy-makers in Ontario found this out when they discovered that closing centrally located coal plants would negatively impact power production from other sources in the existing interconnected power grid. Maintaining the supply mix means that the proportions of coal, nat-

CIM Magazine I Vol. 2, NÂş 6

news Paintearth Mine dragline Brutus

only issue with this scenario is that natural gas may not be with us for the duration, and even if it is, it has a tendency to be very expensive, just at the times that our economy can least afford it. Instead of thinking only about converting coal-fired electricity production to gas we must start to think about converting coal to gas. Coal can be converted to a form of gas called synthesis gas, and this synthesis gas, can be transported and, with a few plant modifications, easily be used in natural gas, fired power plants to make electricity. The gasification process itself has been known for years, but until the emergence of the CO2 issue, there has never been an economic reason to develop it fully. This has changed in todayâ&#x20AC;&#x2122;s carbon constrained world. Major players in the global energy market, including General Electric, Siemens of Germany, and Sasol in South Africa, have fully developed gasification processes now available, and the interest in these processes worldwide is growing. The coal gasification process has a secondary major advantage. Along with the production of the synthesis gas, which is much cleaner than coal, the process also produces a pure stream of CO2, which can be captured as a byproduct. When the by-product CO2 is sequestered in the earth and prevented from seeping back to the atmosphere,

we then have a solution that exploits the availability, abundance, and affordability of coal without suffering the consequential damages of the carbon emissions. CO2 sequestration is a proven technology and is currently being done with large quantities of CO2 from an operating gasification plant in North Dakota. The CO2 is being piped from North Dakota to the Weyburn oil field in Saskatchewan, where it is not only being stored, but also used to enhance the recovery of oil from the depleted field. The synthesis gas from coal behaves similarly to natural gas, and therefore the power production process is as efficient as the natural gas process. This further reduces the carbon footprint of the coal. This new supply scenario would call for the construction of integrated gasification combined cycle (IGCC) power plants, fuelled by gasified coal, to serve coalâ&#x20AC;&#x2122;s share of future power generation growth in Canada. CO2 from the process would be stored in the ground instead of being released to the atmosphere. Acid gases and particulate matter from the gasification process are negligible, and even existing natural gas power plants can be converted to utilize synthesis gas from coal. To meet immediate pent-up demand for new generation (and there is much of this), new natural gas plants could be built immediately adjacent to coal fields. The gas plants could be

fired on natural gas in the early years when the gasification processes are nascent, but they would be converted to synthesis gas operation at the earliest opportunity.

The benefits Over the next 30 years, Canada can become a leader in CO2 mitigation strategies. The coal strategy, if implemented as described above, would result in significant CO2 reductions where no current plan exists. This coal strategy does not have to stand on its own. When it is combined with other important efforts such as conservation, the use of renewables, development of new hydro, refurbishment and newbuild of nuclear, along with judicious use of precious natural gas, Canada has a real opportunity to meet the challenge that is Kyoto while maintaining its economic prosperity. CIM Photos courtesy of Sherritt.

United States Energy Information Administration, International Energy Outlook 2007 2 World Coal Institute September/October 2007

news Going clean New technology makes coal greener by H. Eve Robinson As noted in George White’s article (page 32), clean coal technologies are pointing to a strong future for this long-time source of energy. The science and technology is proven, and applications are being found. All indications suggest we’ll be seeing the development of coal projects, such as CO2 sequestration and coal gasification, growing in the near future. Paul Clark, president of Ripley Canyon Resources Ltd. and a veteran in the coal industry with over 30 years of experience, said “coal is ubiquitous in the world; it appears almost everywhere and that is why we turn to coal [as an energy source]. There is more energy in coal in the world than there is in oil.” Coal has played an important role in development. It is a widely distributed resource, fuelling industrial development in many countries. Most devel-

oped nations have built their economies on coal. The relative availability and abundance of coal has made it a reliable resource for centuries. It is also an affordable source of energy, costing less than US $2.00 per GigaJoule (GJ). These factors ensure that coal will remain a valuable resource as the demand for energy increases. Clean Coal Technology (CCT) presents a more efficient and ‘green’ way to use coal by recycling by-products and reducing the emissions of carbon dioxide (CO2). Several examples of clean coal technology are oxy-fuel combustion, amine scrubbing (the use of amine compounds to isolate CO2), and coal gasification. Although these methods use different approaches, they all achieve the same outcome, which is the production of energy while emitting a CO2 gas that is relatively pure and can

be easily captured for storage, thereby preventing emission to the atmosphere. The Canadian Clean Power Coalition determined that oxy-fuel combustion and the use of amine scrubbers are expensive processes that also use more energy. This results in a reduced efficiency that in turn means more coal has to be processed in order to produce the same amount of output. A more effective option for clean coal technology is coal gasification, which has enormous potential, particularly in Canada. Alberta sits above some of the largest coal and oil reserves in the world. Maximizing the efficiency of coal processing can free up resources such as natural gas for commercial and export markets. Gasification involves heating up a coal feedstock at high temperatures and pressure, in the presence of water in the form of steam. In the process, syn-

The coal gasification process by H. Eve Robinson The Canadian Clean Power Coalition, a group of industry suppliers and consumers interested in finding ways to reduce the negative impacts of coal processing, suggested the use of coal gasification techniques. This process has the potential to mitigate environmental effects such as the emission of greenhouse gases, and generate by-products that are useful in other areas of the carbon industry. Gasification breaks down coal into hydrogen (H2), a synthetic gas called ‘syngas,’ and carbon dioxide (CO2). While the H2 can be used for bitumen upgrading, a high-purity CO2 is released during H2 production that can be captured for enhanced oil recovery or storage. The syngas can be used as a fuel to replace natural gas or go through further refinement to produce more H2 and CO2. All three products in the gasification process have commercial applications. The initial step involves combining dried and pulverized coal, oxygen, and high-pressure water or steam in a gasifier. The coal is exposed to the steam under high temperatures, 36

CIM Magazine I Vol. 2, Nº 6

news thesis gas is produced, which can be used as a natural gas substitute. Further processing can produce highpurity hydrogen (H2), which has applications for upgrading bitumen to synAbove: Bienfait Mine dragline; right: Bienfait Mine aerial view thetic light crude oil. CO2 is still produced but it is being considered by some heavy oil concentrated in a way that makes it rela- processors; [one] can gasify the petrotively easy to capture and store in the leum coke produced as a by-product of earth’s crust rather than allowing it to be bitumen synthetic crude; or [one] can emitted into the atmosphere. Such CO2 gasify coal. All these feedstocks have can also be used to enhance the recovery different characteristics and properties of oil from previously depleted oil wells. that determine their ease of gasification. “There is a tremendous interest in Coal is cheap, abundant, and available gasification and there are numerous car- in large quantities throughout the bon-based materials available for gasifi- province where H2 is needed. Our cation in Alberta,” explained White. research and development has demon“[One] can gasify liquids such as bitu- strated that Alberta sub-bituminous coal men or bitumen residuals, which is is an ideal candidate for gasification.”

while the pressure and oxygen levels are carefully controlled. This produces a mixture of H2, and a combination of CO2 and CO (carbon monoxide) which makes up syngas. The syngas is then cooled using water. The waste water is either treated at a waste management plant, or recycled back into the gasification process. Any particles and trace metals are removed from the syngas before it is ready to be marketed as a substitute for natural gas, or it can be refined again to convert H2 to CO2. Hydrogen can be used to upgrade a heavy crude oil (bitumen) into petroleum products such as gasoline. Carbon-rich bitumen is extracted from oil sands deposits as a thick and viscous semi-solid fluid. Treating the crude oil with H2 helps remove sulphur and nitrogen, and then upgrades it into a synthetic crude. This, in turn, can be converted into gasoline, jet fuel, and other petroleum products. Natural gas is typically used to produce H2 for this process; however, recent fluctuations in the price and the relatively limited supply of natural gas have made the use of H2 from coal gasification more economic. The CO2 produced by coal gasification is concentrated, has a high purity, and can be captured so that it is not September/October 2007

“In Alberta, we not only have all the industries that need hydrogen for feedstock, but we have the Western Sedimentary Basin, which provides a vast storage for pure CO2,” added Clark. The technology involved in coal gasification is not new. About 200 years ago in England, the gas produced by gasification was called ‘town gas’ and was used for lighting and heating homes in London, resulting in a technological highlight of the day. However, town gas was relatively expensive, and was ulti-

released into the atmosphere or transported by pipeline for further use. Carbon dioxide is used in enhanced oil recovery (EOR) operations where it is injected into declining oil fields in a process called ‘miscible displacement.’ The gas dissolves the oil, which reduces oil viscosity and maintains reservoir pressure. This improves the flow of oil from the reservoir and results in increased production. One of the criticisms to this technique is that pumping CO2 into the ground often requires the use of more energy, while EOR also frees more fossil fuels for consumption, which only leads to more CO2 being emitted. However, the economic advantages of using CO2 in EOR can compensate for the expense of injecting CO2 into the ground. Both H2 and CO2 are marketable gases and the coal gasification process produces them in relatively pure forms. While H2 can be used for many applications outside the mining industry, CO2 needs to be captured and stored (see “The search for low-cost CO2 storage” article, page 40). The final step in coal gasification is converting the remaining ash from the original coal feed into a stable and inert solid that can be used for backfilling, or as asphalt for roads. CIM 37

news mately replaced by natural gas in the mid-1950s. During World War II, the German government used a gasification process called ‘Fischer-Tropsch’ to turn coal into gasoline and diesel fuel. South Africa began using coal gasification methods during colonial development, as the country is rich in coal but limited

atmosphere,” agreed Clark. “[Clean coal] processes and technology all have the ability to capture and store CO2.” Another factor supporting coal gasification has been the fluctuating prices of oil and gas. Recent increases in petroleum prices make gasification projects economically viable. Coal is relatively

Above: Transporting coal; right: Paintearth Bigfoot dragline

in petroleum resources. The embargo on shipping to South Africa during Apartheid solidified the use of coal gasification as there was no other alternative fuel source. It has been very successful (South Africa produces 160,000 bbl of oil per day from coal) and is still heavily relied upon to this day. The conventional processes of generating electricity from coal are now much more efficient than they were last century. High demand, increasing energy prices, and environmental concerns have driven the development of new technological methods that make every new coal plant more efficient than the previous ones. The development of coal gasification technology represents a step change in this advancement and because of greenhouse gas issues, has received renewed interest in the past two decades. Gasification is the only current technology that will have the ability to significantly reduce the amount of greenhouse gases released into the atmosphere from fossil fuels. Reduction of greenhouse gases is the key motivator in seeking clean coal technologies. “The emphasis is on reduction of emissions of CO2 into the 38

cheap and is a local resource so that the price of feedstock can be better controlled. Coal’s abundance and availability means that feedstock prices can be set out in very long-term contracts, thereby reducing the price volatility of the gasification products. Lower carbon products, including hydrogen, synthesis gas, methanol, or even ultra-clean diesel fuel, which also lowers CO2 emissions, are a consequence. Coal gasification can also play an important role in bitumen upgrading and enhanced oil recovery. Bitumen is a heavy oil that needs to be upgraded before it is refined. The first upgrading process is to add hydrogen to turn it into synthetic crude, which can then be refined into gasoline and other petroleum products. Natural gas has traditionally been used as the feedstock for the production of hydrogen in this process. But natural gas is in relatively limited supply and is subject to price fluctuations. Substituting a H2 source produced by coal gasification would free bitumen upgrading from swings in natural gas prices as well as opening up the reserves for other markets.

“It is a highly capital-intensive technology but is more attractive when [taking into consideration] the value it brings to bitumen upgrading,” said White. “There is much demand to replace natural gas as a source of primary energy for bitumen production and upgrading. Oil sands projects are based on long-time scales, and yet there is no certainty in natural gas availability or cost 20 years from now. Coal is a cheap and abundant feedstock, there is available technology that is being improved, and we have a desire to reduce the carbon footprint through capture and sequestration.” These factors combined can justify some of the capital costs associated with starting a coal gasification plant. Clark noted “the biggest roadblock now is the capital cost of building these gasification facilities. People struggle to find ways to lower the capital costs, such as ways to improve technology and have higher efficiency. If natural gas and oil prices start to become volatile again, there would be a lot more activity [in coal gasification projects], but so long as the prices are relatively stable, it is going to be difficult to make these kinds of projects economic.” Another advantage for gasification is enhanced oil recovery (EOR). During the gasification process, CO2 formed by H2 production is in a pure form, suitable for capture and sequestration. CO2 is captured and injected into declining oil fields, which improves the flow rate of oil. The increase in production from an oil field can be enough to offset the price of carbon capture because, in this process, CO2 has a value. Transport of the gas to an oil field can be difficult, but is not necessarily applicable in Alberta because of the high density of carbon resources. In other words, sequestration opportuniCIM Magazine I Vol. 2, Nº 6

news ties exist very close to CO2 sources. For example, the newly proposed coal gasification plant outside of Edmonton by Sherritt International Corp. (DoddsRoundhill Coal Gasification Project) is close enough to oil fields to enable CO2 transportation through a pipeline. White explained “there has always been a desire in Alberta to have an integrated resource development plan where all of the various components of the energy business (coal, bitumen, oil and gas, along with other factors such as technology, infrastructure, people, and processes) all come together to promote optimization of the resources.” In a public disclosure document, senior vice president of Sherritt International Corporation, Barry Hatt, stated, “The DoddsRoundhill gasification project represents a key step towards Alberta’s future as a global centre of excellence in innovative ‘clean coal technology.’ Such technology can lead to a critical mass of jobs and intellectual capital with tremendous export potential. This new technology will help preserve natural gas resources for higher value uses and unlock the full energy potential of coal.” CIM

The search for low-cost CO2 storage by H. Eve Robinson It is impossible to mention clean coal technology without discussing the challenges of carbon capture and sequestration (CCS). While the development of new technologies in coal processing address how to reduce emissions and make the best use of by-products, CCS deals with long-term storage of carbon dioxide. Carbon dioxide (CO2) is a greenhouse gas associated with the increase in global temperatures. In an attempt to reduce the negative effects of fossil fuel burning, CO2 produced by this process can be stored to prevent emissions to the atmosphere. Coal gasification is one method of producing high-purity CO2 that can be used for applications such as enhanced oil recovery. One of the ways to manage captured CO2 is storing it in geological formations. These may include oil fields, coal seams, or saline formations. Redistributing CO2 in soil beneath the surface traps the gas and prevents it from escaping to the atmosphere. Enhanced oil recovery is an example of this method being used by projects such as the International Energy Agency’s Weyburn project in Saskatchewan. Carbon dioxide is injected into depleted oil fields in order to improve the flow of oil, which can then be extracted. Because this method enhances oil field production, it can offset the cost of injecting CO2. Similarly, CO2 can be stored in unminable coal seams where the gas releases methane, which can be recovered and used as compensation for the cost of CO2 storage. Other methods of geo-sequestration include storage in saline formations; however, there are no economically viable by-products to offset the costs associated with carbon sequestration. Geo-sequestration has a great deal of potential for Alberta. The Western Sedimentary Basin can provide storage for CO2 in large quantities. Paul Clark, president of Ripley Canyon Resources Ltd. and a proponent of clean coal technology, said “Alberta has unlimited storage or sequestration in aquifers.” He also noted “carbon capture and sequestration is not cheap. Examples like the Weyburn project put a value on CO2 by using it in enhanced oil recovery.” Using old oil fields for carbon storage can present problems such as leakage. This means that all entrances and pipes leading from the surface to the oil field must be entirely sealed. For storage sites that are selected and managed well, CO2 can be retained for hundreds of years. Another alternative for CO2 storage is deep in the oceans. Water at these depths can circulate for hundreds of years before reaching the surface. However, little is known about the effects that this would have on marine life. Also, CO2 reacts with seawater and could increase the acidity of the oceans, which would affect organisms that have calcium bicarbonate structures, such as snails, clams, and corals. There are several different options for carbon storage that are currently being explored. The challenges any effective measure will have to overcome are primarily the cost of CSS and the potential long-term effects to the environment. CIM

mac facts

The oil and gas industry paid over $26 billion to Canadian governments in 2006 in the form of royalties, lease bids, income taxes, and other payments.

In 2005, more than 1,300 aboriginal people were directly employed by oil sands developers and contractors— a 60 per cent increase since 1998. CIM Magazine I Vol. 2, Nº 6

news Looking forward to Voyageur South expansion by Heather Ednie Suncor’s planned Voyageur South expansion, once it gets the go-ahead, targets 120,000 barrels of bitumen per day at a preliminary capital cost estimate of $4.4 billion. The company filed for regulatory approval this summer, with aims to begin site preparation and construction activities in 2009 to 2010, with commissioning and startup planned between 2011 and 2013. “We believe the project has firm benefits for Suncor and for the regional, Alberta, and Canadian economies,” said Rick George, president and CEO. “As we work to manage the impacts of industrial development, we’re also working to mitigate environmental and social impacts of the project through new technologies.” Of several new technologies proposed for the project, the most significant change planned is the use of mobile ore preparation equipment instead of a truck-and-shovel mining system, which should reduce noise pollution and air emissions, in particular, nitrogen oxides. This approach should require a smaller workforce and will help Suncor to better manage the costs of oil sands mining, from road maintenance to fuel expenditures. The bitumen produced at the proposed project will join the bitumen feed from other Suncor mining and in-situ operations and third-party supply to provide feedstock flexibility for the company’s upgrading facilities, which have a planned capacity to produce 500,000 to 550,000 barrels of crude oil per day by 2010 to 2012. As well, this increase in bitumen supply will help form the foundation for potential future increases in crude oil production beyond 2012. At its peak, the expected construction workforce will be approxiSeptember/October 2007

mately 1,800 contractors, to be housed in Suncor camps. The

planned operational workforce is approximately 650. CIM

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news Foothills Model Forest Research for a sustainable tomorrow by Carolyn Hersey What’s green, covers 2.75 million hectares of the province of Alberta, and is recognized by only 30 per cent of the surrounding population? It’s the Foothills Model Forest of course! In 1992, through the Canadian Forest Service, Natural Resources Canada initiated Canada’s Model Forest Program in an effort to establish our country as a leader in the area of sustainable forest management. The Canadian Model Forest Network aims at successfully building partnerships and continuously coming up with new ideas and tools to advance sustainable land management. The Foothills Model Forest land base includes the whole of Jasper National Park, West Fraser Mills Ltd., Hinton Wood Product’s working forest, Willmore Wilderness Park, William A. Switzer Provincial Park, and other public areas.

The partnership is broad; it includes both the federal and provincial governments of Alberta, forest and oil and gas industries, even the coal mining industry. Now in its sixteenth year, Foothills was self-sustainable within its first 60 months of life. Since 1992, over $40

million has been invested in research to better our understanding of the ecological, economic, and social values of the landscape. Yet despite being in existence for over 15 years, only about 30 per cent of the surrounding population is even aware of the presence of this model forest. This is most likely

The research partnership It all began when Natural Resources Canada was looking to fund projects from one end of the country to the other. They initially started with 10 model forests. After reviewing all 54 of the submitted proposals (many of which were from Alberta), they finally decided upon one that best met their required criteria. Hence, the Foothills Model Forest was added as number 11 on the list. Most of the models are self-sustainable by now, but some never will be. Foothills is not one of them. General Manager Don Podlubny said step one in setting up was to write up the proposal and get partners to buy in. The proposal required matching dollars, which luckily they were able to do, after which they brought in the partnership. The Foothills Model Forest was then established as a private, nonprofit company. From there, the company established a board of directors and they started looking at what could be done to reach their main objective of sustainable land management. 42

Foothills was

self-sustainable within its

first 60 months of life.

news due to the fact that Foothills is a research firm—non-profit, not sales focused, and with no major advertising campaign. Podlubny stated that anyone who wants to access information on the model forest can easily do so. They have a website that is updated on a continual basis, they hold presentations to the general public, and also run articles in local newspapers. He also noted that “even though we have a defined area to do our research in, the research has gone well beyond those boundaries, extending all the way down to the U.S. border near Montana, and even into British Columbia. Yes, the research is being done in Alberta, but the information gathered can be and is being applied throughout Canada, throughout all of North America.” The Foothills Model Forest also has a program called the ‘Aboriginal Involvement’ program, enabling consultation negotiations with industry and governments. It started over five years ago and there are presently agreements with five different aboriginal communities, both inside and outside the model forest land base. The model forest says that they are taking everything they’ve learned thus far and showing a wide range of stakeholders how these lessons can be applied in the forest.

Wildlife and wildfire: a balance But what about wildlife? How is it affected by all this research and what’s being done to protect the animals? Where does everyone stand when it comes to natural disasters, such as wildfire, which are vital to a forests’ survival and re-growth? Since the early 1930s, wildfires have been strictly and aggressively suppressed, over time, creating a forest which is unnaturally too-even aged. Wildfires create an assortment of young, mature, and old forests, each of which serves its own purpose in providing a habitat for a diversity of plants and animals. So, if this natural occurrence is disrupted, things just don’t September/October 2007

function as the planet intended them to. With all this suppression since the ‘30s, unnaturally old forests have been on the rise. Based on research, in 1930 old forests (100 years and older) covered about 20 per cent of the Foothills Model Forest land base. In 2000, they covered at least 60 per cent of West Fraser Mills Ltd.’s forest management area and 77 per cent of Jasper National Park. In an effort to restore stability, Alberta Sustainable Resource Development, Jasper National Park, and West Fraser Mills Ltd. are working to restore the forests they manage to the range of age classes that would naturally occur. Podlubny said that although the provincial government, along with Jasper National Park, make most of the management decisions when it comes to wildfire suppression in the Foothills Model Forest area, they’ve done research of their own. After establishing a program called ‘Natural Disturbance,’ they have accumulated data covering the last 200 years of fire and disturbance events. From that, the program has models that emulate natural disturbances on the landscape—the program has been quite successful. Companies are beginning to change their harvesting regimes to mimic fire patterns as closely as possible; instead of clear cutting with square boundaries, the natural pattern is

mimicked by leaving small islands of vegetation and individual trees standing. These strategies will help maintain biodiversity while at the same time protecting people, communities, and natural resources from catastrophic wildfire.

news

As far as wildlife goes, it hasn’t really been directly affected by the research. In 1999, no one was entirely sure how much or how little animals were being influenced by human

activities. The Foothills Model Forest Grizzly Bear Research Program was started and is now one of North America’s most comprehensive wildlife studies. In the past eight

years, research has shown that it is not so much the resource activities that have had much of an effect, but more the individual human interactions. The area is still used publicly for activities such as hiking, fishing, or camping, but even this doesn’t seem to be the problem. Things like illegal hunting and poaching are what seem to be taking a toll on the grizzlies. In 2002, a research grizzly and one of her two cubs were victims of a poaching incident. A total of seven bears have been found shot and two have been killed by vehicle accidents. Studies show that one of the greatest threats to the animals is fatalities along roads caused by humans. The Foothills Model Forest and its partners are now starting to use maps and computer models to better position and utilize roads, so as to minimize interaction and diminish the threat to their survival.

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news Not stopping now The Canadian Model Forest Program, through Natural Resources Canada, was completed at the end of March 2007, but Podlubny said “we’ll still be around,” as will the Canadian Model Forest Network. So, what does the future hold for the Foothills Model Forest? They’ve already secured financial commitment from their partners, Alberta Sustainable Resource Development, Jasper National Park, and West Fraser Mills Ltd., plus five energy companies (Petro-Canada, Encana, ConocoPhillips, CNRL, and Talisman) to continue for another five years, from April 1, 2007, to March 31, 2012. The Model Forest does plan to regroup all of its activities into the following program themes: landscape dynamics; wildlife; water; forest communities program; and data, information, and knowledge management. Podlubny said “the organization will build upon its goals of sustainable land management, knowledge, and technology transfer, communications and outreach, and policy support influence.” Hundreds of partners across the country are doing their best to uphold healthy, thriving communities, economies, and lands both for this generation and for those to come. The purpose of the Foothills Model Forest is not to preserve the landscape, but to find ways to continue utilizing the land, while at the same time keeping it sustainable. Animals and humans alike, I’m sure we can all live harmoniously. CIM

September/October 2007

Movin’ on up Bringing 50 years’ experience to Pure Nickel is Constantine Salamis, who joined the company’s board of directors this past August. Appointed to develop and manage Barrick Gold’s exploration programs in Canada and Alaska is Glenn Asch. He has been with the company since 2003, most recently as district geologist at the Cortez Mine. William Caughill was appointed director, accounting, at Western Canadian Coal. He will be responsible for internal controls and procedures, in addition to management accounting functions. With over 30 years’ field experience under his belt, professional geologist Rodney Thomas was appointed director of Young-Shannon Gold Mines. Jacques Perron was appointed president and CEO of St. Andrew Goldfields, a position he takes on this October.

news Kearl gearing up to be a producer by Heather Ednie The Kearl Oil Sands Project is poised to be one of the next mammoth construction projects to charge down the road to production. In February, the project received conditional approval from the Alberta Energy and Utilities Board, following a joint federal and provincial review. “This decision is a significant milestone for our project and our company,” said Randy Broiles, senior vice president of resources, Imperial Oil— the designated operator of the project. “Our next steps involve reviewing the decision and the attached conditions, and further advancing engineering work to define the project design, execution strategies, and project cost estimate.”

The potential mine project, owned by Imperial Oil Resources Ventures Limited (70 per cent) and ExxonMobil Canada Properties (30 per cent), could start initial mine production as early as 2010. Imperial is the only original owner of Syncrude still involved in the Kearl project and, as a result, has a long history of oil sands operation and of contributing to the Fort McMurray community and Wood Buffalo region.

Project details The open-pit mining operation will have an expected eventual production, based on a phased development plan, of approximately 300,000 barrels per day. The initial mine development will have a design capacity of 100,000 barrels per

day, with two more phases planned to be in production by 2020. The total recoverable bitumen before royalties is estimated at 4.6 billion barrels. True to the oil sands tradition, the initial cost estimate for construction of Kearl is nothing to sneeze at—$5 to $8 billion, in 2005 dollars. Work is ongoing to revise this preliminary cost estimate, and to fully understand the impact of the high industry and construction activity in the province, and specifically, in the region. The design concept for Kearl is similar to today’s existing oil sands mines in the Fort McMurray region, using state-of-theart large-scale shovels, trucks, crushers, and a hydrotransport system. There are no current plans for onsite upgrading

CIM Magazine I Vol. 2, Nº 6

news

Above: Community consultation is an important part of the Kearl project; right: aerial view of a portion of the Kearl lease

facilities. Under the staged approach to mine development, the initial step (the first train) will involve clearing and draining the surface area and removing the muskeg overburden and stockpiling it for use in future reclamation. Conventional tailings treatment technology will be used until tailings can be stored in a depleted mine pit, at which time consolidated tailings technology will be implemented. Other infrastructure development planned for the project includes a water intake and water pipeline, to bring water from the Athabasca River, as well as water storage, an operations camp, and roads. The Kearl site is located within a 90-minute drive from Fort McMurray, leading to the decision to develop it as a camp-based operation with a workforce on a rotating schedule. Currently, Imperial is working with other oil sands operators in the region on a joint industry airstrip that would be located just south of the Kearl leases. Like any major project, the Kearl operation will create many jobs. At the construction peak, an estimated 1,700 people will be onsite, and once the operation is in full production with three trains, approximately 1,100 to 1,300 permanent jobs will be created.

Investing in innovation Positioned as a leading company in the oil sands industry, last winter Imperial announced the creation of the Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation September/October 2007

research centre at the University of Alberta. Of note, the centre is mandated to find more efficient, economically viable, and environmentally responsible ways to develop Canada’s oil sands resources. Expectations are to invest over $15 million in research over the next five years and recruit more than 50 faculty, graduate students, and researchers.

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One focus area of the centre will be the evaluation of the use of non-aqueous solvents to separate and extract bitumen from oil sands, thereby reducing the water usage onsite. Another project will involve the use of nanostructured materials to both reduce energy requirements and improve operating efficiencies in bitumen upgrading. CIM

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Oil sands T

Shovel tread close-up. Images courtesy of Syncrude Canada Ltd.

industry overview

by DAN ZLOTNIKOV

he oil sands sector in Alberta is a booming, growing business, with expectations of continued long-term growth. Already accounting for over half (58 per cent) of oil production in the province back in 2005, the oil sands are predicted to account for as much as 80 per cent of that total by 2020. A presentation by Natural Resources Canada states that between 2005 and 2020, oil sands production is expected to quadruple.

That much growth in one place, however, is not without its challenges. With 35 major companies already active and investing in Alberta’s three oil sands regions, and $150 billion worth of new projects (both planned and under construction), the shortages being felt by mining companies worldwide are particularly acute here. The first and foremost of these, according to communications and research specialist of the Alberta Chamber of Resources (ACR) Lloyd Dick, is the growing demand for qualified construction workers. September/October 2007

An industrial construction project workforce graph, available on the Construction Owners’ Association of Alberta (COAA) website, lists 53 projects expected to be under construction by 2011. Virtually all of the projects are related to oil production and will, at the peak of demand (predicted to be around the first quarter of 2009), require 34,000 workers. To put things in perspective, Dick said that “right now, the graph puts the demand at around 18,000 workers, which is pretty accurate, and that’s barely able to fill that.” 49

Fort Hills. Photo courtesy of Petro-Canada

If all the projects listed on the graph reach the production stage, and do so on time, the demand will almost double in two years. Brad Anderson, ACR’s executive director, added that “the graph is just the tip of the iceberg. It only lists the mega-projects, those worth over $100 million. That doesn’t include hospital or road construction, since they’re usually less than that.” With such a sharp spike in the near future, it is hard to disagree with Dick’s prediction that “labour costs are going to go up.” With the anticipated cost increase, as well as recent events on the political front, it is no surprise that Anderson is concerned for the well- being of the industry.

“Oil sands oil is the hardest and most expensive to get out of the ground, and always will be,” he said. “Once it is out of the ground, this oil is the hardest and most expensive to do anything with, and always will be.” This is no surprise to the companies working the oil sands today, who know that there will be a need for greater, longer term investment in these projects. It takes, as Anderson put it, “sticktuitiveness.” Anderson pointed out that the success the oil sands industry is seeing today is not luck, as some have suggested to him. “It’s pure sweat equity” that got the oil sands to their current stage. Anderson’s experience includes working with AOSTRA (Alberta’s Oil Sands Technology and Research Authority), the organization formed by then-premier Peter Lougheed. “He said,” Anderson recounted of Lougheed, “‘go and figure out how to produce and upgrade the oil sands from each of the deposits in Alberta.’ At the time, AOSTRA was the largest focused research project in the country.” At its peak, AOSTRA’s research budget was $100 million with the amount matched from the industry side, despite the project being considered high risk and a long shot. The results of that, said Anderson, are the oil sands of today. AOSTRA’s successes include the Underground Test Facility, where Anderson said the SAGD technology was first developed and tested. Despite a history of working with the industry and most commonly on industry-initiated projects, AOSTRA did not get much initial support for its SAGD research. Only towards the end of the project, when the positive results were produced, did the industry express an interest. Anderson contrasted the situation with the U.S. oil shale development attempts, where the government support wasn’t as significant. “Arguably, the shale is harder to develop than the sands,” he said, “and they gave up. We didn’t. And now the oil sands are more than half of the province’s oil production, and that will continue to grow.” The dedication and the vision were there not just on the part of the government, but also within the industry. “Initially, there were a few very brave companies,” said Anderson. “Sun Oil, the precursor of Suncor, was there. Mr. Pew, the president of Sun Oil, had a vision of what the oil sands could become, so he took on what was considered a very high-risk project. Syncrude, Imperial Oil, and Canada Oil Sands all came along soon after.” These companies are today reaping the significant benefits of being there and growing their projects as the technology developed. CIM Magazine n Vol. 2, Nº 6

One of the major turning points in Alberta’s oil sands industry, continued Anderson, was the National Oil Sands Taskforce. Organized by ACR, this taskforce brought together the oil sands industry, and both the provincial and the federal governments, in an attempt to create a common vision for the oil sands. “The results of the taskforce speak for themselves,” said Anderson, who attributes most of today’s oil sands activity to that vision. The taskforce’s report was released in 1996, after more than a decade of work. “We had literally hundreds of people from ACR working on this,” said Anderson, “especially in the last three years. Oil sands coker towers. Photo courtesy of Suncor Energy Inc. Alberta’s government accepted ACR’s recommendations and created the generic oil sands royalty policy, combined with high risk.” Anderson fears that the combination which created a very stable and predictable royalty regime. They of tightening environmental restrictions, rising project costs, and recognized the very high cost of doing an oil sands project. The the withdrawal of ACCA incentives will combine to depress royalty was set at 1 per cent of gross until the project paid out, future growth of the sector. and then it went to 25 per cent of net profits.” But why, if the costs are so high and the business is still a On the federal side, the result of the taskforce’s work was the risky proposition today, do companies continue to sink money accelerated capital cost allowance (ACCA). To put it very simply, into all three of Alberta’s oil sands regions? “The size of the the ACCA allowed oil sands projects to subtract the project costs prize,” Anderson replied. “Shell’s Albian Sands project has enough from revenue and only pay income tax on the difference. reserves to continue to produce for the next 50 years.” Introduced in 1996, this incentive was repealed on March 19 of Today, Alberta’s Department of Energy lists proven oil this year, with the change due to take effect in 2010. The impact, reserves at 176 billion barrels, with the total recoverable Anderson said, will amount to $300 million, which the oil sands reserves at almost twice that, at 335 billion barrels. On top of industry will now have to carry. that, said Dick, there are a lot of resources currently listed as “Canada used to offer stability,” he said. The stability of the “non-recoverable.” However, he added, “with recent improveregulatory and political climates balanced out the high risk ments in mining technology, a lot have moved from noninherent in an oil sands project. “But now you have high cost recoverable to being listed as recoverable.” Dick expects the trend to continue. Anderson agrees that with such a wealth of resources, even when all his concerns are taken into account, the longterm outlook seems very promising. In the end, Anderson said, there isn’t much the producers can do about the regulatory shift. The tax burden “will be what it will be,” and the companies will deal with it as best they can. And the first thing they can do is try to cut production costs. Anderson named some projects that are doing just that, mainly through technological improvements and innovation. “Suncor, for example, started mining with a machine to go right at the face of the mine.” Photo courtesy of Petro-Canada September/October 2007

Before this, the operation used the common truck-and-shovel approach. Another project of note is the Nexen/OPTI partnership, which combines a SAGD operation with an on-site upgrader. “We wanted to get away from having to burn expensive natural gas to create steam,” said Sean Noe, an analyst at Nexen. In a SAGD operation, a pair of horizontal wells are drilled into the deposit, and then steam is run into the upper—or injector—well. The heated bitumen flows down into the “producer” well, from which it is extracted to the surface. The most commonly used fuel in the evaporation of the water is natural gas. “What OPTI brought to the table,” said Noe, “what made the process unique at a high level, is that we will be utilizing the entire barrel of bitumen.” After the barrel goes into the distillation column, the outputs are a medium crude off the top and an “asphaltene” off the bottom. The asphaltene is placed into a solvent deasphaltor and is thermally cracked. The product is then fed back into the distillation column and the process is repeated until all of the bitumen is converted to sour crude oil. The sour crude is fed into a hydrocracker, where hydrogen is added to the crude, to produce an approximately 38° API sweet synthetic crude. The interesting part is where the hydrogen comes from. “If we follow the liquid asphaltene stream, and the key word here is ‘liquid,’” said Noe, “we send that to a gasification unit. Liquid

asphaltene goes in, and you add a little bit of heat, and you add a little bit of steam. The by-product coming out of the gasifier is hydrogen and a synthetic fuel.” The heating content of that synthetic fuel is low, only a third natural gas, but that is sufficient to evaporate the water and generate the steam used in the injector well. “We’re not completely self-sufficient,” said Noe, “but we are close.” The steam-to-oil ratio Nexen’s technique achieves is roughly 3.3, a significant improvement on previously used technology. “We would require a little bit of natural gas, but nowhere near the amount someone would use without gasifying,” explained Noe. “We would buy 0.4 MCF (thousand cubic feet) of natural gas per barrel produced, whereas someone without a gasifier would use 2 to 2.4 MCF.” The total savings, according to Noe, will amount to roughly $10 per bbl once peak production is achieved. Already impressive, the number is even more so when one considers that the total recoverable reserve at the Long Lake site is 5.5 billion barrels, and that similar projects not using this technology are paying $22 to $24 per bbl to Nexen’s $12 to $14. These savings are a combination of not using natural gas and using a hydrocracker instead of a coker. “The output of a coker is petroleum coke, a solid, and that gets land filled,” said Noe. “Whereas we’re taking it in a liquid form and gasifying it. People are looking at possibilities of gasi-

Numerous oil sands projects are in production and/or construction. Listed below are a number of them. This list excludes SAGD projects.

achievement for what is projected to be a $30 billion project. At the end of this year’s second quarter, the first phase of the project has completed 75 per cent of the work, and is projected to hit the 88 per cent point by the end of the third quarter. This phase, slated to begin operations in 2008, is expected to have a peak of 110,000 barrels per day. Future expansions are projected to increase that to as much as 500,000 barrels per day. Current internal estimates of six to eight billion barrels of recoverable reserves serve to ensure Canadian Natural with a long-term supply of crude oil.

Oil sands project pipeline ALBIAN SANDS Albian Sands Energy, Inc. was created through a joint venture between Shell Canada Ltd., Chevron Canada Ltd., and Western Oil Sands, Inc. Albian Sands operates the truck-and-shovel Muskeg River Mine. The 155,000 barrels per day the mine produces are sent to the Scotford upgrader down at Ft. Saskatchewan. The mine and upgrader together comprise the Athabasca Oil Sands Project. The first barrel of bitumen was produced by the mine on December 29, 2002. Today, an expansion project is underway to increase mining capacity by 100,000 barrels per day, and Shell has applied for approval to construct a second Scotford upgrader. Albian Sands is also making use of satellite imagery data to assist with future reclamation and to provide unbiased environmental information to the project stakeholders. FORT HILLS In March 2005, Petro-Canada added the Fort Hills integrated mining and upgrading project to its list of oil sands assets. Through a limited partnership agreement, Petro-Canada will operate and lead development of Fort Hills with a 55 per cent interest. Other partners include UTS Energy Corporation (30 per cent) and Teck Cominco (15 per cent). Fort Hills leases contain more than four billion barrels of recoverable bitumen resource. Approval from the Alberta Energy and Utilities Board to develop a project of that scale is in place. Associated synthetic crude oil production is estimated at 140,000 barrels per day. HORIZON PROJECT Canadian Natural’s surface mining Horizon Project, begun in 2005, is slated for commissioning in the third quarter of 2008. Construction and overburden removal have remained on schedule and within budget: something of an 52

KEARL OIL SANDS PROJECT A 70/30 joint project between Imperial Oil and Exxon Mobil Canada, respectively, the Kearl Oil Sands Project will be a combined surface mining, pipeline, and upgrader development, with anticipated maximum production of 345 thousand barrels per day. Imperial Oil, who will be the project operator, submitted the mine applications and environmental impact assessments to Alberta’s EUB in July of 2005, and received conditional approval in February of this year. Mine development is planned to begin in early 2010, with additional development phases slated for 2012 and 2018. The current cost estimates for the project are set at $5 to 8 billion, with estimated labour requirements of 1,700 workers at the peak of construction. (see page 46)

NORTHERN LIGHTS Synenco’s Northern Lights Project consists of an oil sands mining and bitumen extraction project north of Fort McMurray. Pending the outcome of an options review begun May 1, 2007, an upgrading facility near Edmonton may be included. When fully completed, Northern Lights will produce 100,000 barrels per day of light, sweet synthetic crude oil for 30 years. In December 2006, a capital cost estimate for the mining and extraction project was estimated at $5.6 billion if built in the ‘traditional’ industry manner. If an overseas modularized construction strategy is used, the project is estimated at $4.4 billion. SUNCOR Suncor has been in the oil sands mining business for a very long time indeed. Suncor’s original operation, started in 1967, was the world’s first commercially successful oil sands project. In 2006, Suncor announced the achievement of a milestone – the production of their four billionth barrel of oil. CIM Magazine n Vol. 2, Nº 6

fying a solid, but that has not reached commercial production yet.” The technology has already gained the Nexen/OPTI partnership a 15 per cent gain in efficiency, and the advantages are obvious in the cost savings. As the Long Lake operation moves towards its second phase, Noe says the plan is to continue tweaking the process. With technology having such profound impact on oil sands production, Anderson emphasized the importance of the resource not just to Alberta’s economy, but to Canada as a whole. Fort Hills. Photo courtesy of Petro-Canada “We’re producing over 1 million barrels Technology is also why Anderson is convinced that the longper day right now, and the prediction is to be producing 5 milterm prognosis for the industry is excellent. “Right underneath lion by 2020.” Improvements in extraction techniques, as well as the Ft. McMurray/Athabasca oil sands deposit is the Grosmont carbon sequestration technologies, will play a major role as time carbonate deposit,” he said. “There is as much oil in the carbongoes by. Today, Natural Resources Canada predicts that despite ate as there is in the oil sands being mined directly above it. that the amount of greenhouse gases emitted per barrel will That’s the next target.” continue to drop, the overall amount originating with the oil There is no technology today that can economically extract sands industry will rise, due to the continued production growth. oil from the carbonate, but 30 years ago, there was no technolToday, Dick said, the Alberta government has a partial solution ogy to economically mine the oil sands either. With proper supin place, under which producers who cannot stay below the CO2 emissions restriction must pay into a technology fund used to port and the right vision, said Anderson, that technology will be fund CO2 reduction technologies. found. CIM

Suncor operates the Steepbank and Millennium surface mines and the Firebag in-situ SAGD project. The combined production of the sites in 2006 was averaging 260 thousand barrels per day. Today, the majority of Suncor’s production comes from the surface mines, but the in-situ operation is expected to continue to increase in significance, accounting for as much as 30 per cent of all of Suncor’s production by 2012. The in-situ reserves also account for the greater proportion of the total; of the 15 billion barrels Suncor has on record today, 9 billion are located in in-situ deposits. Suncor is continuing aggressive growth in the oil sands sector. Of the $5.3 billion slated for capital spending for 2007, $4.4 billion is dedicated to the oil sands operations. Suncor received regulatory approval from the EUB for the Voyageur project, focused on construction of a third upgrader at the site. The increase in processing capacity is expected to allow Suncor to reach production levels of 350 thousand barrels per day. Also planned is a coke gasification plant, intended to supplement the operation’s energy and steam supply and lower the demand for expensive natural gas. SYNCRUDE CANADA Syncrude Canada is the operator of the largest crude oil production facility in the world. Syncrude’s operation is a joint venture between a group of seven companies: Canadian Oil Sands Ltd. (36.74 per cent), Imperial Oil Resources (25 per cent), Petro-Canada Oil and Gas (12 per cent), Conoco Phillips Oilsands Partnership II (9.03 per cent), Nexen Oil Sands Partnership (7.23 per cent), Mocal Energy Ltd. (5 per cent), and Murphy Oil Company Ltd. (5 per cent). Syncrude operates two sites owned by the partnership, both in northern Alberta. The Mildred Lake mine site has been in mining the Base Mine since 1978, with the North Mine at the site beginning operation in 1997. The Aurora Project began operations on its North Mine in 2000. All three mine projects are surface, truck-and-shovel operations, following last year’s retiring of the final dragline and bucketwheel reclaimer system at the Base Mine. There are also plans to expand the upgrader capacity (currently at 230,000 barrels a day) to as much as 500,000 barrels per day by 2015. September/October 2007

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Survol de l’industrie des

sables bitumineux

Source : Syncrude Canada Ltd.

e secteur des sables bitumineux est en plein essor en Alberta. En 2005, il représentait déjà 58 % de la production de pétrole de la province et il pourrait atteindre 80 % en 2020. Selon Ressources naturelles Canada, la production des sables bitumineux devrait quadrupler de 2005 à 2020.

Toute cette croissance en un seul endroit représente des défis. Trente-cinq grandes compagnies déjà actives investissent dans les régions productrices de l’Alberta; des nouveaux projets d’une valeur de 150 milliards de dollars sont au stage de planification ou de construction. Les diverses pénuries ressenties par les compagnies minières à travers le monde sont particulièrement sévères ici, notamment, selon Lloyd Dick, de la Chambre des Ressources de l’Alberta (ACR), la demande pour des ouvriers qualifiés Un graphique de la Construction Owners’ Association of Alberta, représentant la main-d’œuvre travaillant sur les projets de construction industrielle, liste 53 projets qui devraient démarrer d’ici 2011. La demande en main-d’œuvre, soit 34 000 travailleurs, devrait atteindre un sommet au début de 2009. Selon M. Dick, la demande actuelle est de 18 000 travailleurs et elle est difficile à combler. 54

Brad Anderson, directeur exécutif de l’ACR, ajoute : « Le graphique n’est que la partie émergée de l’iceberg; il ne liste que les projets valant plus de 100 millions de dollars. Il n’inclut pas les hôpitaux ou les routes. » « Le pétrole des sables bitumineux est le plus laborieux à extraire et aussi le plus coûteux », dit-il. « Une fois sorti de terre, il est le plus difficile et le plus onéreux à traiter. » M. Anderson signale que le succès dans l’industrie n’est pas le fruit de la chance comme certains le pensent. « C’est grâce aux apports de compétences que les sables bitumineux en sont à leur stage actuel. » M. Anderson a travaillé avec AOSTRA (Alberta’s Oil Sands Technology and Research Authority), un organisme fondé par Peter Lougheed, alors premier ministre. M. Lougheed nous a dit : « Trouvez comment produire et valoriser les sables bitumineux de l’Alberta. » À cette époque, AOSTRA constituait le CIM Magazine n Vol. 2, Nº 6

plus gros projet de recherche du pays avec un budget de 100 millions de dollars. Les succès de l’AOSTRA comprennent la technologie de séparation gravitaire stimulée par injection de vapeur (SAGD – Steam Assisted Gravity Drainage). M. Anderson compare la situation avec le développement des schistes bitumineux aux États-Unis, où le soutien gouvernemental n’était pas aussi significatif. « Il est vrai que les schistes sont plus difficiles à développer que les sables. Ils ont abandonné, pas nous. Maintenant, les sables bitumineux représentent plus de la moitié de la production de pétrole de la province. » L’industrie aussi a cru à la vision. « Au début, il y avait quelques braves compagnies, dont Sun Oil, le précurseur de Suncor », dit M. Anderson. « M. Pew, le président de Sun Oil, entrevoyait la possibilité des sables bitumineux, il a entrepris un projet à risque très élevé. Syncrude, Imperial Oil et Canada Oil Sands ont suivi et ces compagnies en récoltent aujourd’hui les bénéfices. » Source : Suncor Energy Inc. L’un des points tournants de l’industrie albertaine a été la création d’un groupe de travail, le National Du côté fédéral, l’équipe a réussi à obtenir une déduction Oil Sands Taskforce. Le rapport du groupe de travail a été difpour amortissement accéléré, permettant de déduire les coûts fusé en 1996 après plus d’une décennie de travail. Le du revenu et de payer de l’impôt uniquement sur la différence. Gouvernement de l’Alberta a accepté les recommandations Cette initiative a été présentée en 1996 puis abrogée en mars et a établi la politique des redevances sur les sables bitudernier. Le changement entrera en vigueur en 2010. Selon M. mineux tout en reconnaissant les coûts élevés de travailler les Anderson, l’impact sera de 300 millions de dollars, somme que sables. La redevance a été établie à 1 % du prix brut jusqu’à l’industrie devra assumer. ce qui le projet soit rentable; elle passe alors à 25 % des Si les coûts et les risques sont si élevés, pourquoi les combénéfices nets. pagnies continuent-elles à mettre de l’argent dans les sables bitumineux? « C’est la taille de la récompense », répond M. Anderson. « Le projet des sables bitumineux Albian de Shell a assez de réserves pour produire pendant 50 ans. » Le Department of Energy de l’Alberta liste des réserves de pétrole prouvées de 176 milliards de barils, et des réserves récupérables de 335 milliards de barils. M. Dick ajoute : « Avec les récentes améliorations aux techniques minières, de nombreuses ressources ont passé de `non récupérables à récupérables. » Il faut aussi mentionner le projet du partenariat Nexen/OPTI; ce projet combine une exploitation SAGD avec une usine de valorisation sur place. « Nous avons toujours voulu faire autre chose que de brûler du gaz naturel pour faire de la vapeur », dit Sean Noe, un analyste chez Nexen. Dans une exploitation SAGD, deux puits horizontaux sont forés dans le gisement; de la Source : Syncrude Canada Ltd. vapeur est ensuite injectée dans le puits September/October 2007

supérieur. Le bitume chauffé s’écoule vers le puits inférieur, le puits « producteur », duquel il est extrait. Le gaz naturel est le carburant le plus utilisé pour évaporer l’eau. « Le procédé unique utilisé par OPTI est d’utiliser tout le baril de bitume. » Une fois que le baril entre dans la colonne de distillation, les produits sont un brut de densité moyenne et des asphaltènes. Ces derniers produits sont soumis à un craquage thermique. Le produit obtenu est ensuite retourné à la colonne de distillation et le processus est répété jusqu’à ce que tout le bitume soit converti en pétrole brut corrosif. Le pétrole brut corrosif est acheminé à un hydrocraqueur, de l’hydrogène est ajouté pour produire un pétrole synthétique non corrosif d’environ 38° API. Ce qui est intéressant est la provenance de l’hydrogène. On ajoute un peu de chaleur et de vapeur aux asphaltènes liquides et le sous-produit est de l’hydrogène et un carburant synthétique. Le contenu en chaleur de ce carburant synthétique est faible mais il suffit pour évaporer l’eau et générer la vapeur utilisée dans le puits supérieur. « Nous ne sommes pas complètement autosuffi sants, mais c’est bien proche », dit M. Noe. Les économies seront d’environ 10 $/baril une fois que la pleine production sera atteinte. Ces chiffres sont encore plus impressionnants lorsque l’on considère que la réserve récupérable totale au site Long Lake est de 5,5 milliards de

barils et que des projets semblables qui n’utilisent pas cette technologie paient de 22 à 24 $/baril comparativement à Nexen qu paie de 12 à 14 $/baril. Le procédé continuera à être peaufiné. « Nous produisons plus de 1 million de barils par jour et les prévisions sont de 5 millions d’ici 2020. » Les améliorations des techniques d’extraction et le piégeage du carbone joueront un grand rôle. Selon Ressources naturelles Canada, la quantité de gaz a effet de serre émis par baril chutera, mais la quantité totale provenant des sables bitumineux augmentera en raison de la croissance de la production. Le gouvernement de l’Alberta a une solution partielle : les producteurs qui ne peuvent demeurer sous les restrictions des émissions de CO2 doivent contribuer à un fonds technologique de réduction du CO2. M. Anderson est convaincu que la technologie est garante de l’avenir de l’industrie. « Le gisement de carbonate de Grosmont se trouve tout juste sous les sables bitumineux de Ft. McMurray/Athabasca », dit-il. « Il y autant de pétrole dans le carbonate que dans les sables. C’est la prochaine cible. » Aucune technologie actuelle ne permet d’extraire le pétrole du carbonate, mais il y a trente ans, il n’existait pas de technologie économique pour exploiter les sables bitumineux. Selon M. Anderson, avec un bon soutien et la bonne vision, on découvrira la technologie. CIM

La liste suivante énumère quelques projets de sables bitumineux au stade de la production ou de la construction.

tions. Northern Lights produira 100 000 barils/jour de pétrole synthétique léger, non sulfuré pour 30 ans. En décembre 2006, les dépenses en immobilisations pour l’exploitation et l’extraction étaient estimées à 5,6 milliards de dollars, si la construction était effectuée selon les méthodes « traditionnelles »; une stratégie de construction modulaire coûterait 4,4 milliards de dollars.

Les projets de sables bitumineux ALBIAN SANDS La compagnie Albian Sands Energy, Inc. est une co-entreprise entre Shell Canada Ltd., Chevron Canada Ltd. et Western Oil Sands, Inc. Elle exploite la mine Muskeg River, dont la production de 155 000 barils/jour est acheminée à Ft. Saskatchewan. Le premier baril de bitume a été produit en décembre 2002 et la mine a déjà un projet d’expansion de 100 000 barils/jour. FORT HILLS En mars 2005, Petro-Canada a ajouté le projet Fort Hills à ses actifs; cette compagnie exploitera et dirigera le développement de Fort Hills, dont elle détient un intérêt de 55 %. D’autres partenaires incluent UTS Energy Corporation (30 %) et Teck Cominco (15 %). La réserve de bitume récupérable est de plus de quatre milliards de barils. HORIZON PROJECT La construction et le décapage du projet Horizon de Canadian Natural, un projet de 30 milliards de dollars, suivent l’échéancier et respectent le budget. L’exploitation devrait débuter au troisième trimestre de 2008 et atteindre 110 000 barils/jour. Des expansions futures permettraient d’atteindre 500 000 barils par jour. KEARL OIL SANDS PROJECT Le projet conjoint de sables bitumineux Kearl (70/30 Imperial Oil et Exxon Mobil Canada), une exploitation à ciel ouvert, un pipeline et une usine de traitement produira 345 000 barils/jour. Imperial Oil a soumis les demandes de permis et les évaluations d’impact environnemental et a reçu une approbation conditionnelle pour le projet. Le développement devrait débuter en 2010 et mobiliser 1700 travailleurs; les coûts estimés pour le projet sont de 5 à 8 milliards de dollars (voir page 46). NORTHERN LIGHTS Le projet Northern Lights de Synenco comprend une exploitation de sables bitumineux et l’extraction du bitume au nord de Fort McMurray; une usine de traitement pourrait être ajoutée aux autres installa56

SUNCOR La première exploitation de Suncor, en 1967, était le premier projet réussi de sables bitumineux. En 2006, la compagnie a annoncé l’atteinte de son quatre milliardième baril de pétrole. Suncor exploite les mines à ciel ouvert Steepbank et Millennium ainsi que le projet SAGC Firebag. En 2006, la production combinée moyenne de ces sites était de 260 000 barils/jour. Suncor croît de manière dynamique; elle a reçu les approbations de l’Alberta Energy and Utilities Board pour le projet Voyageur, soit la construction d’une troisième usine de traitement sur le site. L’augmentation de la capacité de traitement devrait permettre à Suncor d’atteindre 350 000 barils/jour. Une usine de gazéification du coke est aussi planifiée pour réduire la demande en gaz naturel. SYNCRUDE CANADA Syncrude Canada exploite la plus grosse installation de pétrole brut au monde. Cette exploitation est une co-entreprise de sept compagnies : Canadian Oil Sands Ltd. (36,74 %), Imperial Oil Resources (25 %), Petro-Canada Oil and Gas (12 %), ConocoPhillips Oil Sands Partnership II (9,03 %), Nexen Oil Sands Partnership (7,23 %), Mocal Energy Ltd. (5 %) et Murphy Oil Company Ltd. (5 %). Syncrude exploite trois projets miniers à ciel ouvert, tous par pelles et camions après le retrait de son système de dragues et d’excavateurs à roue-pelle de la mine Base l’an dernier. La capacité de l’usine de traitement pourrait aussi être augmentée pour atteindre 500 000 barils/jour d’ici 2015. CIM Magazine n Vol. 2, Nº 6

Photo credit: Daniel Wiener, Montreal, Quebec

Coal in Canada Production staying strong in the West by Dan Zlotnikov

September/October 2007

When it comes to coal, most of Canada’s production happens in the West, said Canadian Coal Association CEO Allen Wright. “Most of the operations are in Saskatchewan, Alberta, and British Columbia. Besides one small producing coal mine in New Brunswick and some ongoing reclamation mining in Nova Scotia, there is also the prospect of a significant underground mine in the northern end of Cape Breton in Nova Scotia. While the Donkin coal project will be primarily a thermal coal operation, the project proponents are optimistic about the metallurgical (met) prospects.” In Saskatchewan, Wright said, all coal mines are “mine-mouth” thermal operations supplying coal to the province’s coal-fired power plants. “These power plants are built as close to the mines as possible, to minimize transportation costs.” All of Saskatchewan’s production is consumed within the province, with the exception of some production from the Bienfait mine, which supplies the Atikokan and Thunder Bay coal-fired power plants in northern Ontario. Operations in Alberta are a mix of the eight thermal mines and two Met mines: Elk Valley Coal Corporation’s Cardinal River operation near Hinton and Grande Cache Coal’s mine in Grande Cache. 57

an appropriate coal technology that will provide for their growth in electricity demand, while at the same time allowLeft, top: Poplar River reclamation; left, bottom: Genesee 1; below: Poplar River 1. ing for the capture of CO2 Photos courtesy of Sherritt. emissions. Currently, they are considering a super-critical coal-fired project with postcombustion capture and storage of CO2. If this project proceeds, it will be the first of its kind in the world. A decision is expected this fall. A few similar facilities, said Wright, are in the planning stages, some as replacements for aging plants and others intended to increase the available power supply. Due to technological improvements, these new power plants will be able to generate more power while using less coal and producing less CO2. Overall, Canadian coal production has been relatively British Columbia is primarily a supplier of met coal for the steady, with a very slight downward trend since 1997. There was export market. The province has three main areas of activity, a partial reversal of the trend in 2003, with small, but continusplit between the southeast, where Elk Valley has five mines, and ous increases, primarily accounted for by met coal. On the conthe northeast, where a number of small coal companies are sumption side, thermal coal in the provinces of Nova Scotia, working to expand existing operations and to develop new propNew Brunswick, Saskatchewan, and Alberta has increased erties as well. The northeast is home to the Peace River Coal steadily, year after year. Ontario, still a big coal consumer, has operation (a joint venture by Anglo Canada, NEMI, and seen reduced consumption in recent years because of higher Hillsborough Resources), Western Canadian Coal, and a few output from their nuclear fleet. other, smaller ventures. “The rule of thumb that we use is that coal consumption The third area is Hillsborough Resources’ Quinsam Mine on tracks coal-fired power generation one to one,” said George Vancouver Island. This underground mine, one of only two operWhite, chairman of the board of the Coal Association of ating underground coal mines in Canada, produces thermal coal Canada, “and power generation goes up at one half of GDP per for export to the U.S. Hillsborough also has a large thermal asset year. Of course, coal doesn’t attract all the growth because of under development in northeastern BC. other sources such as wind, hydro, and demand-side manageWright mentioned that there has also been considerable ment. In general, the thermal coal industry growth has been activity on the utilization side, with the first super-critical coalvery predictable.” fired plant commissioned in 2005, another in development, and Other factors may influence the growth distribution, adds a strong interest in developing more coal gasification projects. White. “In Ontario, for example, the provincial government has an off-coal policy, so in that case the supply growth will have to “Genesee 3, a 450 MW super-critical unit, replaced two existcome from somewhere else, perhaps nuclear or natural gas ing units, resulting in a decrease of CO2 emissions by 18 per power generation.” cent. Keephills 3, another supercritical project, is expected to There is a very clear delineation between the types of coal decrease emissions by over 20 per cent. Both plants are and their eventual recipients. While metallurgical coal is primadesigned to significantly reduce pollutants such as Nox, Sox, parrily exported, Canada’s thermal coal production is largely conticulate matter, and mercury.” sumed internally, almost exclusively for power generation purSherritt International is in the planning stages for a coal gasification facility, said Wright. The facility’s main purpose will be to poses. The reasons for this split are the relative costs. It should produce hydrogen for the oil sands industry, where it can be also be pointed out that coal is used in the manufacture of used as a feedstock for upgrading bitumen as an alternative to cement. natural gas. (More information on p. 36). Each variety of coal has a set of properties by which it is Finally, Saskatchewan Power has long been studying various judged. The foremost is the thermal content of the coal—how clean coal technologies. Their main focus has been on selecting much energy a unit of coal will generate when burned. 58

CIM Magazine n Vol. 2, Nº 6

Considering the relatively low cost of extraction and processing, transporting coal from the mine to the power plant accounts for a significant part of the buyer’s cost. The lower the thermal content of the coal, the more tonnage the plant has to purchase and transport, and the bigger the chunk taken out of its bottom line. An inescapable reality for many years, transportation costs have become particularly significant in today’s world of US$75+ per billion barrels crude oil. Transportation costs have also risen because of competition for transport infrastructure from the magnitude of commodities now being shipped worldwide. The second property to be taken into account is the nature of the impurities in the coal. These are constituents such as ash, moisture, and sulphur. Canada’s coal is known for its low percentage of sulphur, a quality that until recently attracted a premium price. “With new technology, impurities such as sulphur content are less important now,” White said about the change. “Many new plants have been fitted with scrubbers to remove the sulphur dioxide particles from the emissions. Power plants with this technology can forego the low sulphur coals because the scrubbers allow them to process cheaper high-sulphur coals.” “Utilities’ customers have many reasons to diversify their coal supply,” said White. “They have power plants that are optimized for certain characteristics. So they’ll try to optimize their fuel mix, while keeping the price down. Quality and heating value are important because each power plant is designed for certain coal characteristics. Other factors include long-standing relationships between the buyers and sellers, based on the reliability of delivery and customer service.” While Canada’s lowsulphur thermal coal can find a market in the Asia Pacific, improvements in processing technology at power plants have somewhat decreased the advantage it had in the past. The final quality of the coal to be considered is whether the coal has very specific, highly sought-after “coking” properties. Coke is a high-carbon residue, produced from very low-ash, low-sulphur bituminous coal. Coke is used exclusively as a

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reducing agent in steel production, and the coal from which coke is derived is known both as coking and metallurgical coal. Because of the much more restrictive requirements placed on the coal by the process, metallurgical coal (or met coal, as it is called in the industry) is less abundant than thermal coal and is far more expensive. While met coal can also be burned for its thermal content (which is excellent), to use it for that purpose would be unwise, to say the least—the 2005 average price for met coal was US$122 per tonne. The average price for thermal coal was less than a third that amount, around US$40. The situation is likely to remain the same, according to White. “When it comes to international supply and demand of thermal coal, the market is pretty much in balance, resulting in prices that do not provide producers with high margins.” Met coal also enjoys a geographical advantage—it is mainly produced in British Columbia, whereas thermal coal mostly comes from Alberta, on the far side of the Rockies. ”Once the coal is seaborne on a ship, it can range into the Asia Pacific,” White said. Ships can move the large tonnage for a fraction of the cost of either rail or truck transportation. The same holds true for the higher grades of thermal coal, which Sherritt sells to clients as far away as Japan and South Korea. But at the same time as Canadian producers are exporting coal, Canadian steel mills and power plants are importing it, and in significant amounts. The preliminary figures for 2006 show the western provinces exporting 27.7 million (metric) tonnes, of which just over 24.5 million tonnes were met coal and 3 million tonnes were thermal. In the same year, eastern provinces have imported almost 21 million tonnes of coal, 16.5 million tonnes of which were thermal and only 4.2 million tonnes were met coal. Part of this is due to the power plants’ desire for diversification of supply, but the biggest reason is the massive shipping bill associated with moving the coal across the Prairie provinces and into eastern Canada. The vast majority of Canada’s thermal coal production, however, is directed to mine-mouth operations—power plants that

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were built in the immediate vicinity of the mine in order to keep transportation costs as low as possible. Because of the variation in the properties of coal, there is no single “coal price” said Wright. Instead, the coal market relies on long-term contracts between producers and buyers. These contracts may have “escalator clauses” in them, to account for inflation, growth and demand increases, and to add stability to both sides of the industry. For coal sold in the export seaborne markets, the prices are generally negotiated annually and are influenced by supply and demand fundamentals and global events. The seaborne coal markets, both for thermal and metallurgical coal, have seen a revival over the past few years. The single largest driver is the phenomenal growth in China and the associated demand for raw materials to fuel the growth. Prices for metallurgical coal have more than doubled from historical levels, and thermal coal prices in the seaborne market are at record levels. All of this bodes well for the health of the Canadian export coal industry.

Specific Producers The major coal producers in Canada are Elk Valley Coal, focusing on the metallurgical variety, and Sherritt International Corp., a producer of thermal coal. Of the 26.7 million tonnes of met coal Canada exported in 2005, Elk Valley’s production accounted for 24.5 million. Almost all the thermal coal produced in the same year, 40 million tonnes of the total, was produced

by Sherritt mines, either owned directly or via the Royal Utilities Income Fund. Elk Valley operates five open-pit mines in British Columbia and another one in Alberta, all of which are met coal operations. Elk Valley is owned by the Fording Coal Trust (60%) and the mining giant Teck Cominco (40%), who is also the managing partner. The creation of the Elk Valley Coal Partnership in 2003 was a complex multi-party agreement, under which met coal properties of Sherritt International, Consol Energy, Luscar Energy, and Teck Cominco were consolidated, creating the world’s second largest producer of seaborne coking coal. Global events, such as the growth in Asia and in particular China, have seen the global steel industry return to profitability over the past five years, resulting in a change in the demand for seaborne coking coal, not only in quantity but in quality as well (see interview with Elk Valley Coal president and CEO, Boyd Payne, p. 20, for more details). As global steel production has increased and steel prices have risen, the value of highquality coking coal to a steel mill has become more important than ever. “High-quality coking coal allows for the production of highquality coke and ultimately results in increased blast furnace productivity and improved steel quality, two factors that can improve the financial health of the steel mill,” said Paul Armstrong, director of investor relations, Fording Canadian Coal Trust. “Elk Valley Coals’ response to the changing marketplace

CIM Magazine n Vol. 2, Nº 6

has been to focus on our role as a significant supplier of high-quality hard coking coal. We are realigning our internal processes to achieve the production of consistently highquality coking coal products that bring value to our customers.” One of the sites that has recently returned to production is the Grande Cache Coal operation, at a 22,000 hectare site of the same name. Previously owned by Smoky River, the mine ceased operations in March 2000, before Grande Cache purchased the assets in July 2000. “The timing was good for redeveloping the mine and seeking investors,” said the company’s vice president of marketing and Line Creek North refuse reclamation area. Photo credit: Daniel Wiener, Montreal, Quebec. transportation, Eugene Nagai. “It was a private company until the IPO in May 2004.” After permitting was Grande Cache has faced some challenges on the marketing completed, Grande Cache began operation in the summer of side when demand dropped off. “Many of our customers are in 2004, selling the first shipment of coal in November of the Korea and Japan,” said Nagai. “We had established contracts same year. with steel mills but as demand dropped off, so did vessel shipTraditionally, the Smoky River operation had both surface ments. The decision was made to have planned closures, to and underground components. Grande Cache developed a match production to demand.” With demand up once again, new, greenfield underground mine with company-owned Grande Cache is gearing up. The goal, according to Nagai, is to equipment and Grande Cache employees. Surface mine opersell 1.4 to 1.6 million tons between this April and the end of next ations were contracted to North American Energy Partners March—roughly a 50 per cent increase over last year’s figures. (NAEP). When the high strip ratio phase of the surface opera“We want to be a company with long-term contracts,” he said. tion was completed in November of last year, Grande Cache “We need to have a constant revenue stream with which to terminated the contract and made preparations to take over grow our business.” surface operations. Grande Cache is facing the same labour and equipment short“There’s a shovel being assembled at the site right now,” said ages as the rest of the industry, but is also affected by the geograNagai. “We’ve also purchased some trucks that were delivered phy. “Like most export coal mines, we’re 1,100 kilometres from the during August.” Stockpiled raw coal from the surface operations coast,” Nagai said. “Transportation costs are definitely a concern for is being used to supplement underground production. Surface the industry.” There’s also some concern that such rapid growth in operations will resume in September, with the goal being to sales and production may strain the available transportation achieve full production capacity in the last quarter of 2007. capacity and affect some of the company’s expansion plans. CIM

September/October 2007

Le charbon au Canada La production demeure forte dans l’Ouest « Au Canada, le charbon est produit dans l’Ouest, surtout en Saskatchewan, en Alberta et en Colombie-Britannique », dit Allen Wright, président et directeur général de l’Association canadienne du charbon. « Un autre projet qui débutera possiblement est le projet Donkin, au Cap Breton, une exploitation surtout de charbon thermique, mais les promoteurs sont optimistes quant aux perspectives de charbon métallurgique. » En Saskatchewan, les mines, généralement à ciel ouvert, sont situées à proximité de centrales au charbon et la production de cette province est consommée à l’interne. La mine Bienfait alimente toutefois deux installations en Ontario. La situation est semblable en Alberta avec huit mines de charbon thermique et les propriétés Elk Valley et Grande Cache qui produisent du charbon métallurgique pour l’exportation. La Colombie-Britannique, la province produisant le plus de charbon, extrait surtout du charbon métallurgique pour l’exportation, à partir de trois centres d’activité. Elk Valley, le principal producteur de cette province, possède cinq mines dans le secteur Sud-Est. Dans le Nord-Est, de plus petites compagnies cherchent à développer de nouvelles propriétés et agrandir les propriétés existantes. C’est dans ce secteur que se trouve l’exploitation Peace River Coal (une co-entreprise Anglo Canada, NEMI et Hillsborough Resources). Une mine souterraine – la mine Quinsam – propriété de Hillsborough, se trouve sur l’île de Vancouver; elle forme le troisième centre d’activité. La mine produit du charbon thermique qu’elle exporte aux États-Unis. M. Wright mentionne aussi les projets de gazéification et les systèmes supercritiques. « Genesee 3, un projet de 450 MW, 62

remplace deux installations existantes et permet de réduire les émissions de CO2 de 18 %. Keephills 3, un autre projet de combustion supercritique, devrait réduire les émissions de CO2 de 24 % en plus réduire les émissions de polluants tels que NOx et SOx, les particules et le mercure. « Sherritt International planifie actuellement une installation de gazéification du charbon », dit M. Wright. Le but premier de l’installation sera de produire de l’hydrogène pour l’industrie des sables bitumineux; il servira pour traiter le bitume, en remplacement du gaz naturel. Saskatchewan Power étudie depuis longtemps les technologies de charbon propre. Cette compagnie est à étudier un projet supercritique avec capture et séquestration du CO2 émis. D’autres installations sont aussi au stade de planification, certains pour remplacer des installations vieillissantes, d’autres pour augmenter la capacité énergétique. Selon George White, président du conseil d’administration de l’Association canadienne du charbon, « La consommation de charbon suit de près la production d’énergie. Le vent et l’hydroélectricité contribuent à la croissance de la production d’énergie mais la croissance de l’industrie du charbon thermique est très prévisible. » La distinction entre les types de charbon est très claire, tout comme la distinction entre les récipiendaires éventuels. Le charbon métallurgique, connu en tant que charbon cokéfiable, est surtout exporté, le charbon thermique est principalement consommé au pays, presque uniquement pour produire de l’électricité. Les coûts relatifs sont la raison de cette distincCIM Magazine n Vol. 2, Nº 6

tion; il faut aussi mentionner que le charbon entre dans la fabrication du ciment. Chaque variété de charbon est jugée par un ensemble de propriétés, tout d’abord le contenu thermique du charbon – la quantité d’énergie produite par unité brûlée. Étant donné les faibles coûts d’extraction et de traitement, le prix du transport devient très significatif. Plus le contenu thermique du charbon est bas, plus la centrale devra en acheter, abaissant ainsi les bénéfices nets. Il faut aussi tenir compte des impuretés dans le charbon. Le charbon canadien a une basse teneur en soufre, permettant de le vendre à meilleur prix. « Avec les nouvelles technologies, ce point est moins important de nos jours » dit M. White. « Les nouvelles usines ont des épurateurs qui enlèvent les particules d’anhydride sulfureux. Les compagnies ne sont donc pas tenues d’acheter du charbon à faible teneur en soufre puisque les épurateurs leur permettent de traiter le charbon à teneur élevée en soufre. » Les propriétés de cokéfaction doivent aussi être considérées. Le coke est un résidu à haute teneur en carbone produit à partir de houille à basse teneur en soufre. Il est utilisé comme réducteur dans la production de l’acier. En raison des exigences des procédés, le charbon métallurgique est moins abondant que le charbon thermique et il est beaucoup plus cher. Bien que le charbon métallurgique puisse être brûlé pour son excellent contenu thermique, il serait malavisé de le faire. En 2005, le prix moyen du charbon métallurgique était de 122 $US/t alors que le prix moyen du charbon thermique était de 40 $US/t. Le charbon métallurgique jouit aussi d’un avantage géographique – il est surtout extrait en Colombie-Britannique, plus près des ports que le charbon thermique produit en Alberta. Les navires peuvent déplacer de grandes quantités à une fraction des coûts du transport par rail ou par camion. Sheritt a des clients au Japon et en Corée du Sud. Cependant, alors que les producteurs canadiens exportent du charbon, les aciéries canadiennes en importent. Les données préliminaires pour 2006 indiquent que les provinces de l’Ouest ont exporté 27,7 Mt de charbon, dont 24,5 Mt de charbon métallurgique, et que les provinces de l’Est ont importé 21 Mt de charbon, dont seulement 4,2 Mt étaient du charbon métallurgique. La raison principale est le coût de transporter le charbon par voie terrestre à travers les prairies. « Il n’existe pas de prix ‘unique’ pour le charbon », dit M. Wright. Le marché du charbon est basé sur des ententes entre les producteurs et les acheteurs; elles comportent des clauses d’indexation qui tiennent compte de la croissance et de la demande. Ce qui influence le plus les prix est la croissance phénoménale de la Chine et la demande pour des matières premières pour alimenter cette croissance. Les prix pour le charbon métallurgique ont plus que doublé et les prix du charbon thermique sont à des niveaux sans précédant.

Principaux producteurs Les principaux producteurs canadiens sont Elk Valley Coal, surtout du charbon métallurgique, et Sherritt International Corp., un producteur de charbon thermique. September/October 2007

Elk Valley exploite cinq mines à ciel ouvert en ColombieBritannique et une autre en Alberta. Cette compagnie appartient à Fording Coal Trust (60 %) et à Teck Cominco (40 %). La création d’Elk Valley Coal remonte à 2003; cette compagnie est le résultat d’une fusion complexe des propriétés charbonnières de Sherritt International, de Consol Energy, de Luscar Energy et de Teck Cominco. Au cours des cinq dernières années, les événements mondiaux, tels que la croissance en Asie et plus particulièrement en Chine, ont vu le retour à la rentabilité de l’industrie de l’acier, ce qui a changé la demande pour du charbon cokéfiable acheminé par voie maritime (voir l’entrevue avec le président et chef de la direction d’Elk Valley Coal, Boyd Payne, à la page 20, pour plus d’information). « Un charbon cokéfiable de qualité élevée permet la production de coke de grande qualité e qui en retour accroît la productivité de l’aciérie et améliore la qualité de l’acier, deux facteurs qui augmentent la rentabilité de l’aciérie », dit Paul Armstrong, directeur des relations avec les investisseurs, Fording Canadian Coal Trust. « La réponse d’Elk Valley Coal est de se concentrer sur son rôle de fournisseur de charbon à coke de qualité. Nous révisions nos processus internes pour produire un charbon cokéfiable de grande qualité dont bénéficieront nos clients. » L’exploitation reprend à Grande Cache. Cette mine, anciennement propriété de Smokey River, était fermée depuis quelques mois lorsqu’elle a été achetée en mars 2000. Selon Eugene Nagai, vice-président, marketing et transports, « Le moment était propice à un nouveau développement de la mine. Une fois les permis obtenus, la production a débuté à l’été 2004. » L’exploitation originale était à ciel ouvert et souterraine. Grande Cache a développé une nouvelle mine souterraine avec ses propres employées et équipements. La compagnie a décidé de donner l’exploitation en surface en sous-traitance à North American Energy Partners. En novembre dernier, Grande Cache a mis fin au contrat et devrait reprendre l’exploitation en surface. « Nous assemblons une pelle et nous avons acheté des camions. Nous utilisons les stocks de charbon brut accumulés comme supplément à la production souterraine », dit M. Nagai. Grande Cache a connu des difficultés lorsque la demande a chuté. « De nombreux clients étaient en Corée du Sud et au Japon. Nous avions des contrats avec des aciéries mais lorsque la demande a chuté, nos expéditions ont chuté aussi. Nous avons planifié quelques fermetures pour contrebalancer l’offre et la demande. » Avec la reprise, Grande Cache se prépare. « Le but est de vendre 1,4 à 1,6 millions de tonnes entre avril cette année et mars l’an prochain, une augmentation d’environ 50 % par rapport à l’an dernier. Nous voulons être une compagnie de contrats à long terme », dit-il. Grande Cache est confrontée aux mêmes problèmes de main-d’œuvre et d’équipements que le reste de l’industrie, mais elle dit aussi tenir compte de sa géographie. « Nous sommes à 1 100 km de la côte. Les coûts des transports sont une grande préoccupation », dit M. Nagai. CIM 63

MAC economic commentary The government’s climate change and clean air plan avoids reality by Paul Stothart, vice president, economic affairs, Mining Association of Canada chlorofluorocarbons and was addressed through technological improvements to air conditioners and refrigerators. Acid rain was caused by pollution from a relative handful of coal-fired power plants and smelters and was addressed through introduction of technologies to reduce sulphur dioxide emissions. Local water pollution problems, such as in the Great Lakes or nearby rivers, also offer relatively easy solutions—invest in better wastewater treatment, some new storm sewers, and a few marine regulations, and the problem is on the way to resolution. Unfortunately, climate change does not hold the promise of such an easy fix. Indeed, in one critically important respect, it resides at the opposite end of the spectrum from previous environmental challenges. Simply put, climate change is caused not by a few “bad actors” but by the everyday actions of average people. Every day, hundreds of millions of average people make decisions that increase greenhouse gas (GHG) emissions and therefore contribute to climate change. They buy a house in suburbia. They demand improved highways. They drive to the corner store for bread. They charge their GIW Industries, Inc. cell-phone battery. Grovetown, GA 30813 USA They buy imported 1.706.863.1011/1.800.241.2702 fruit. They fly to a www.giwindustries.com business meeting. They play hockey. A KSB Company v They crank up the

The climate change issue has always been unique among environmental challenges in that, more than any other issue, it is a direct byproduct of our modern lives. Other highprofile environmental issues generally have a limited set of contributors and an obvious choice of fixes. Depletion of the stratospheric ozone layer, for example, implicated emitters of

furnace or the A/C at home. They log on to the Internet. They watch the evening news while sipping a coffee. Each of these seemingly benign actions places a demand upon the supply from electricity grids, pipelines, oil companies, and gas stations. Each of these billions of daily decisions increases the release of GHGs into the atmosphere. In this sense, with the possible exception of a few hermits living in mud huts, the staunchest of environmentalists is playing in the same societal arena as the most right wing of business tycoons. Shopping, eating, heating, driving, living—and contributing to GHG emissions growth. More critical still is the reality that 1.3 billion Chinese citizens and one billion Indian citizens desire the pleasures and comforts that we take for granted in western society. Over the coming decade, the existing ratio of two autos per 100 people in China will move towards the U.S. intensity of 100 autos per 100 people. This, and the similar gradual narrowing of the gap in hundreds of other consumer benchmarks, will mean very dramatic increases in global GHG emissions. As has been evident in Canada and most other advanced countries over the past 15 years, governments are not particularly proficient in dealing with environmental issues such as climate change. Governments do not like antagonizing those who elect them. A politician, whether Liberal, Conservative, or other stripe, does not like telling the 120,000 residents in his constituency how to change their lives, let alone forcing these changes, knowing he will be seeking their votes a few short months down the road. The climate change and clean air regulatory plan proposed by the federal government in April 2007 provides the latest evidence of this fundamental flaw. Despite its ostensible priority focus on CIM Magazine n Vol. 2, Nº 6

MAC economic commentary reducing air pollutants and smog, the plan leaves aside the consumer element of Canadian societyâ&#x20AC;&#x201D;in other words, the exact element that is the main contributor to smog! As such, Canadians will face no constraints using inexpensive gasoline to cruise with total inhibition on the countryâ&#x20AC;&#x2122;s roads and highways, joining millions of other Canadians driving in Toronto, Montreal, Vancouver, Windsor, Hamilton, Calgary, and other high-smog zones. These consumers may be comforted to know, however, that a smelter or iron ore company located hundreds of miles from urban smog zones is being hit by the plan with severe smog-reduction requirements! A few other basic realities of political life are also implicit within the governmentâ&#x20AC;&#x2122;s plan and broader strategy. First, the government is actually encouraging greater economic consumption and GHG emissions through investing billions of dollars in new infrastructure for cars, trucks, airplanes, and consumers.

Second, governments adhere to a fundamental political requirement to be seen as â&#x20AC;&#x153;doing the right thingâ&#x20AC;? and, in the present minority government situation, are competing to unveil environmental plans that are â&#x20AC;&#x153;the toughest on industryâ&#x20AC;? while leaving average voters comfortably on the sidelines. In this context, it is telling that three of the most symbolic examples by the government of â&#x20AC;&#x153;being seen to do the right thingâ&#x20AC;? will have virtually zero impact in reducing GHG emissions: â&#x20AC;˘ New tax subsidies to users of urban transit have been judged by most analysts as insufficient to entice new riders. â&#x20AC;˘ The fees associated with a new vehicle feebate program are insufficient to change car-purchase practices in any significant way. â&#x20AC;˘ New subsidies to encourage ethanol use will increase food prices and reward farmers, while offering minimal life-cycle GHG benefits over standard gasoline.

Each of these measures ranked low on the governmentâ&#x20AC;&#x2122;s own internal effectiveness assessment that was conducted a few years ago; however, the measures are benign to Canadian consumers and they are symbolically positive for voters who want to see their governments do the right thing. The measures, therefore, have been adopted. Other actions, such as buying some new twisty lightbulbs for oneâ&#x20AC;&#x2122;s home, fall into this do-good category as well. A further consequence of a fixation on â&#x20AC;&#x153;being seen to do the right thingâ&#x20AC;? is that governments inevitably tread into each otherâ&#x20AC;&#x2122;s turf in their search for votes on high-polling issues. In this sense, the proposed federal plan is destined to lead to federal-provincial duplicationâ&#x20AC;&#x201D;and a potential hodgepodge of regulatory and reporting obligations placed upon Canadian businesses. And how will Canadaâ&#x20AC;&#x2122;s valueadded mining industry survive all of this? Stay tuned. CIM

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September/October 2007

Bankhead—mining for coal by Andrea Nichiporuk Banff National Park, which happens to be Canada’s first national park, owes its existence to Canadian Pacific Railway workers who discovered hot springs in Alberta’s Rocky Mountains in the early 1880s. From there grew one of today’s most popular Canadian tourist destinations. However, unbeknownst to many, an area about seven kilometres east of the town of Banff was a hotbed of activity about 100 years earlier. Bankhead, one of the first communities in Alberta that sprang to life because of mining, was founded in 1903 by the Canadian Pacific Railway (CPR) on Cascade Mountain in the Bow River Valley of Banff National Park (then called Rocky Mountains Park). Pacific Miners in Bankhead, Alberta. Source: Glenbow Archives NA-705-13. Coal Company, a subsidiary of CPR, also developed a mine there— $6. Being situated in a national park, the Mine No. 80. scenery was nothing short of breathtakAlthough the town and mine were ing. The town was as multi-cultural as located only three kilometres east of the they come and there was little or no conCPR mainline, many visitors preferred flict. People simply got along. The only getting off in Banff and taking the scenic exception to this picture-perfect town route. Whereas the mine buildings were was Chinatown, which, in the beginning, what greeted visitors to Bankhead via probably had more to do with the lanthe direct route, the roads that linked guage barrier than anything else. The the two towns bordered such natural Chinese kept to themselves and the rest beauty as ponds, beaver dams, and of the Bankheaders never, or rarely, venCascade Falls. tured to that part of town. Unfortunately, Bankhead was truly a model town. the only serious crime to speak of Stylishly designed homes rested on large occurred in Chinatown where a man was lots and were equipped with indoor killed after a night of gambling. plumbing; there was a municipal water At its peak, Bankhead was home to supply and sewage system, as well as about 1,000 residents. The town comelectricity. Rent was inexpensive varying prised a hotel, a post office, a branch of between $7.50 and $10 per month, how- the Bank of Montreal, a general store, a ever, in the area nearest to the mine, pool hall, a restaurant, a doctor’s office, which was unserviced, rent was lower at and a saloon. Protection came in the 66

form of the Northwest Mounted Police who were posted in Bankhead. Residents also benefited from having their own library, school, and community hall. A strong sense of community brought neighbours and co-workers together on the baseball and soccer fields, tennis courts, and curling and hockey rinks.

The mine they called “No. 80” Mine No. 80 was opened in 1904, mainly to fuel CPR’s steam engines. Coal mining was allowed in the national park at that time and the government received $0.10 per tonne of coal from industry in the form of royalties. The seams in Cascade Mountain were steep, varied in thickness, and had faults. To avoid flooding the mine, it was decided to mine up instead of down. CIM Magazine n Vol. 2, Nº 6

mining lore Less than 50 workers were hired to carry out the blasting and by yearâ&#x20AC;&#x2122;s end, an additional 135 men were hired to work underground and 39 to work at the surface. These numbers quickly rose when the mine entered full production during 1905. Each miner worked with an assistant; the more they dug, the more they made. For a miner around 1910, that meant about $3 to $4 per day. There wasnâ&#x20AC;&#x2122;t much in terms of safety equipment. Miners wore hobnail boots and a cloth capâ&#x20AC;&#x201D;no hard hat, even when breaking off loose pieces of coal from the walls and ceilings with a pick. A tipple built in 1905, in which over 100 men worked, produced such a high decibel level that many of the men lost their hearing. And, without masks, nothing prevented the workers from breathing in coal dust or getting it in their eyes. There were many accidents, and 15 men lost their lives at the mine. During the mineâ&#x20AC;&#x2122;s almost 20-year life, miners went on strike six times, once even striking for eight months in order to receive a $0.10 increase, which they got. During World War I, miners received a $1.18 per day bonus from the government. These were prosperous times for coal miners as coal was used to fuel the Navyâ&#x20AC;&#x2122;s warships. As well, they were exempt from the draft. However, once the war was over, the miners demanded that the company take over paying them the extra $1.18 per day. The company refused and a strike ensued. Two months later, workers were given an ultimatum: if they didnâ&#x20AC;&#x2122;t get back to work, the mine would shut down. Thinking it was but another scare tactic, they refused to go back. On June 15, 1922, Mine No. 80 was closed, permanently.

A second blow

move everything; many of the buildings and homes were moved to Banff. During its peak production year, Mine No. 80 produced about a half million tons of coal. Little is left of the former town of Bankhead, but its history as a model

mining town remains. Bankhead was also once home to Frank and Joe Jerwa, who played for the Boston Bruins in the early 1930s. CIM Credit: Numerous online sources were used in the writing of this article, including www.ourroots.ca.

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The shock of the mineâ&#x20AC;&#x2122;s closure had not yet worn off when a second blow struck. When it became apparent that the mine would not reopen, CPR was ordered to clear out. That meant moving not only mining equipment but houses, buildingsâ&#x20AC;&#x201D;the entire town essentially. Industry would no longer be allowed in national parks. It took two years to September/October 2007

canadians abroad The tale of two continents by Heather Ednie Gene Wusaty felt it was time for a career change and is now near the top of the Mongolian coal industry. When the opportunity presented itself to join Ivanhoe Mines to develop their coal resources in Mongolia, it was an obvious step. Ivanhoe has a world-class copper/gold project at Oye Tolgoi in the southeast part of the Gobi. As COO of SouthGobi Energy Resources, which is the result of Asia Gold’s acquisition of the coal division of Ivanhoe Mines that finalized last May, Wusaty is now living on two continents. “We’re (SouthGobi) the biggest holder of coal lands under exploration in Mongolia, with 2.3 million hectares, comprising 54 exploration licences,” he said. “Our properties are located in Visiting the Great Wall in Beijing the southern part of Mongolia in the Gobi Desert, close to things would be booming, and now the Chinese border. Our proximity to there are excellent opportunities develChina is our main advantage and should oping for coal from Mongolia to be sold work in our favour, easing the require- to China. We are carrying out a $9.5 ment to ship our coal to market in west- million exploration program in 2007 to further advance our projects.” ern China.” Ovoot Tolgoi is the most advanced of With six current exploration and SouthGobi’ s projects and is located 950 development projects, including the kilometres south of the nation’s capital Ovoot Tolgoi (formerly Narin Sukhait) city, Ulaan Bataar. To date, a 43-101 has mine development, Wusaty is looking to been completed, with 150 million China as the market of choice for his tonnes of coal resources measured and company. This year China will produce indicated. The initial plan is for the 2.2 billion tonnes of coal, and the indusdevelopment of a surface mine. A try is growing. So too is the amount of detailed environmental impact assesscoal China now imports. ment has been completed and been “I see a major window of opportunity approved. The local communities have for us,” Wusaty said. “When we started accepted the development plans, and as development we had indications that 68

required by the Minerals Law, the government has signed off on its audit of the Geology Resources. SouthGobi has applied for its mining licence, which is expected to be granted in September. Mining equipment purchase is the next step. An initial camp, power, and airport are already established. The coal outcrops at surface so very little pre-stripping is required. The operation will start small at one million tonnes per year, then increase to five million tonnes per year in five years. The coal is continuous at depth, and planning for an underground operation has already begun. “We’re targeting first quarter next year for preproduction development; I think a six month schedule is feasible,” Wusaty said. “The proof in the pudding will be when we put our first operation in production and ship our first coal to

Onsite accomodations CIM Magazine n Vol. 2, Nº 6

China. We will be the first western coal mining company in Mongolia to do so.”

Living on two continents Wusaty’s enthusiasm about his work is obvious, though it’s a life that can be very difficult to lead. Just a glimpse at his travel schedule gives a lot away. From November 2005 to February 2007 he traveled from Canada to Mongolia and China 13 times, let alone some trips to Japan, Indonesia, etc., to look at prospects. His average is ten days to two weeks in Asia every month. “I’m the rover in the company,” Wusaty admitted. “We have six senior expats from Canada, the United States, and Australia living in Mongolia now, working out of our operations office in Ulaan Bataar. Combined with our group of 41 Mongolians, we have enough talent there to start an operation and keep our other exploration projects going.” Wusaty himself is of Ukrainian decent and his wife is of Russian decent, which has been an advantage during his time in Mongolia. “Most of our Mongolian staff are well educated and most speak English. Mongolia was part of the Soviet Bloc until 1991 and the older people understand and speak Russian. The Mongolian alphabet is Cyrillic, as is Russian, and I can read and understand Russian,” he explained. Though he said the expats stick together somewhat, forming a small community; the country is safe and culturally Mongolia has been relatively simple to grow accustomed to. “In Ulaan Bataar many of the restaurants are similar to ours but once outside the capital, the food becomes very ethnic. The favourite sport is Mongolia-style wrestling. The Sumo Champion in Japan is Mongolian.” In China, however, it’s quite different. The company has a small office in Beijing which is very cosmopolitan and easy to get used to but the customers are located in Gansu province and western Inner Mongolia, over 1,500 kilometres west of Beijing. In China he must travel with interpreters, and the culture September/October 2007

canadians abroad

Mongolia Coal property map

and language in western China is tougher to adapt to. “That being said, we’ve been successful in developing relationships with several large companies that will be our future customers.”

Improving Mongolia’s infrastructure Mongolia is the size of Alaska, with 2.5 million people, making it more sparce than Canada. It is very cold in the winter and the Gobi can be very hot in the summer. The country has only one major railway, which is part of the Orient Express but it is not located in SouthGobi’s operating area. There are no paved roads in the south part of the country, which necessitated the construction of an airport at Ovoot Tolgoi in the Gobi. There is no Canadian Embassy in Mongolia, although a large contingent of the mining companies 70

operating in Mongolia are Canadian. With a number of new mining projects planng to start up, the infrastructure will develop. “Mongolia needs something to spur its development, and the mining industry just may be the catalyst,” Wusaty said. “Some things could be done more efficiently. For example, at this time only Mongolians and Chinese are allowed to drive across their border. So even though the border is only 45 kilometres south of Ovoot Tolgoi, when we need to travel to China to visit our customers from our sites in the Gobi, we have to fly back to Ulaan Bataar, then to Beijing, and then to western Inner Mongolia and Gansu Province. We are hoping to get the governments to allow expats to cross the border once we get into production.”

Another area in need of development is the workforce. In Mongolia, you are required by law to employ nine Mongolians per every one expat. “Except for a few expats, we plan to engage a total Mongolian workforce, but that will require a lot of training,” Wusaty said. “Most of the people we will be employing have no skills for operating mining equipment, and maintenance will be even more difficult. We initially plan to contract our maintenance.” His work is cut out for him, and Wusaty appears up for the challenge. After two to three decades in the North American coal industry, he wanted the opportunity to travel and experience other cultures. And today he’s making the most of that unique experience. CIM CIM Magazine n Vol. 2, Nº 6

innovation page Sensors for mining by Gord Winkel, technology manager, Kearl Oilsands Project, and Tom Demorest, senior advisor, mining and tailings, Syncrude Canada Ltd.

Missing tooth detection

The mining industry has benefited from continued innovations that effectively address operating challenges. The Alberta Research Council (ARC) is one group that is working to deliver creative solutions for mining through the development of associated technologies that are commercially viable. The latest focus areas for ARC supports surface mining operations with the next generation of technologies to improve the detection of shovel bucket tooth condition and tramp metal in ore streams.

Missing tooth detection Shovel bucket tooth breakage or unchecked premature wear at a tooth location can result in significant and harmful impacts to a mining operation. In addition to the risk of damage to the bucket itself, a lost tooth entering an ore production system can cause catastrophic damage to sizing, conveying, and processing equipment. The Alberta Research Council has developed a system to detect the incidence of missing, broken, or partially broken teeth on a shovel bucket. They have worked closely with the mining industry to continuously improve this product through increased reliability in detection. It works by utilizing a remote “machine vision” technology that captures images of the “tooth line” on every upswing of the shovel and then, through the use of September/October 2007

specialized computer algorithms, com- would be a direct benefit to preventing pares it against a base case, fully intact downstream equipment damage. Good work has been done by many tooth line to check for differences. In this way, when a tooth is partially or com- to provide tramp metal detection. pletely broken off, the system alerts the However, this type of detection is not shovel operator and steps can be taken to easy. As much of the mining equipment prevent the broken tooth from entering is constructed of metal, it can be challenging to differentiate tramp metal from the mining/processing stream. The latest innovation developed by the material handling systems themARC for this technology greatly selves. This, in turn, can restrict where enhances the capability to monitor even effective tramp metal detection can be small changes to a bucket tooth profile. accomplished. In addition, systems may It does this through the use of a new fail to detect metal material or, consoftware system that uses new dual-layer processing algorithms that are new to this technology. Couple this with a hardware design that has undergone thousands of hours of in-field testing, and you have the next generation of missing tooth detection technology. And it doesn’t stop there! Based on this new technology platform, development work is being carried out to differentiate between the suddenness of A double roll crusher in operation a broken tooth versus the gradual tooth versely, can be oversensitive and cause wear that is incurred during operation. unnecessary mining system shutdowns. In response, ARC is also investigatBuilding in this next layer of sophistication will give the system the ability to ing technologies for enhanced tramp also measure, track, and display infor- metal detection, with the support of mation regarding shovel tooth wear. mine operators associated with the Further work is also being done to have Surface Mining Association for Research the system analyze the mine face as the and Technology (SMART) group. shovel excavates, to identify oversized Proposed innovations consist of leveragrock as a means of testing blasting effec- ing technologies that can adapt to tiveness and preventing oversized mate- changing operating and environmental rial from entering the downstream min- conditions and essentially “learn” from past operating events, to effectively ing systems. identify tramp metal and alert/intervene Tramp metal detection in the process control system. In addition to shovel teeth, any inadOnce again, innovation in developvertent introduction of sizable metal ing new technologies, as evidenced from material (from components to beams the previously discussed efforts to leverand wear plates) can have equally seri- age sensor development for mining, has ous consequences to a mining train. the promise of supporting mining Detection of this so-called “tramp metal” industry effectiveness. CIM 71

HR outlook Virtual mentoring to address today’s skills shortage by Mel Sturk, project manager, recruitment and retention, Mining Industry Human Resources Council

Mentoring should be a key component of any comprehensive recruitment and retention strategy. The

process of matching a new recruit with an experienced advisor to guide new employees as they make their way in a new workplace environment can be a rewarding and mutually beneficial experience for both mentor and protégé. The mining sector is facing critical shortages of skilled workers. In fact, the industry must recruit approximately 10,000 new workers per year over the next 10 years in order to meet anticipated labour growth and replace retiring workers. One of several contributing factors to this crisis is the dramatic rate of attrition in mining-related programs at Canadian colleges and universities. The industry is losing an estimated 28 per cent of its students from miningrelated disciplines, such as geoscience, engineering, and technician/technologist programs across the country through mid-program attrition. Furthermore, up to 37 per cent of the students who do graduate from mining-related programs will go on to work in other sectors. The Mining Industry Human Resources Council, through the Mining Industry’s Attraction, Recruitment, and Retention Strategy (MARS Project) is developing a men-

toring program to mitigate this problem. This element of the MARS project will facilitate the creation of one-onone relationships between students (as early as their first year of study) and industry leaders. Establishing that first link to our industry is critical. In addition to providing the students with general guidance and advice, the mentors will be able to offer the students with a working world context that relates back to their field of study, thereby creating a stronger bridge from school to work. The program will be rooted in mentoring best practices, but will deviate from tradition by using non-standard pairing conventions and by using modern communication technology. Instead of pairing a seasoned worker with a new employee, MiHR’s Mentorship Program will match experienced workers with post-secondary students in mining-related disciplines. Mentors and protégés will be matched based on the protégés’ career goals and field of study and the mentors’ career experience, education, career path, position, and more. Traditionally, mentorship requires the matched mentor and protégé to spend time together, in the same physical space. MiHR will be utilizing virtual mentoring, which allows participants to communicate over long distances and in real time. Virtual mentoring incorporates both e-mentoring, where communication occurs via telephone and email, and web-based mentoring, which incorporates web-based communications such as web forums and “blogging.” Because virtual mentoring requires no face-to-face contact, it is the optimal choice when connecting to participants in remote areas. This type of mentoring is also beneficial due to the fact that it CIM Magazine n Vol. 2, Nº 6

HR outlook increases the frequency and speed of communication. Mentors will receive guidance through training modules developed by MiHR and industry -steering committee members, in order to provide professional, quality mentoring to their respective protégés, and will have ongoing access to support resources on the MiHR website. The mentors will work to achieve the following: • Provide general guidance, support and advice. • Promote the exploration of career possibilities within the minerals and metals sector. • Be a first point of contact for networking within the industry. • Act as a role model. Mentors should have excellent communication skills, be open and tolerant, and, most importantly, they should possess an infectious love for their work and sector. They must be willing to invest their time to inspire and engage. Research shows that mentors realize great intrinsic value in guiding their protégés. They truly make a difference. The pride and gratification experienced by the mentor can also result in increased retention of the mentors and in an improvement in their perception of their employer. “In organizations with mentoring programs there is a greater sense of belonging, loyalty, encouragement for all employees to grow and be recognized by someone other than within their working group.” 1 To ensure the best possible results, MiHR’s program will undergo a pilot phase with a specific field of study (TBA) in 2008. Findings from the pilot will be incorporated before broadening the participant base and expanding the program across the country. As with all MiHR projects, the virtual mine mentoring program will be devel-

oped under the guidance of a national steering committee that will include significant industry representation. The program will be created with industry for industry. Collaboration and innovative initiatives, such as the virtual mentoring

program, are key to addressing the current labour shortage. CIM For more information on the MARS project or other MiHR initiatives, please visit www.mihr.ca or contact Mel Sturk: msturk@mihr.ca

Review of measurement practices in the mining industry being conducted by Measurement Canada Measurement Canada has begun a review of the rules and practices that govern the buying and selling of mineral and metal products and services based on measurement. We are inviting stakeholders, like you, to express their views on the level and type of involvement needed in this area. If you would like to provide input on the role that Measurement Canada should take in your industry, please visit our website at www.mc.ic.gc.ca or contact Sam Stouros, Leader, Mining and Metals Trade Sector Review, at 613-952-2627. This is a great chance to get involved and voice your opinions. We look forward to hearing from you!

Examen des pratiques de mesure dans l’industrie minière effectué par Mesures Canada Mesures Canada a entamé un examen des règles et des pratiques régissant l’achat et la vente de produits minéraux et métalliques, de même que l’achat et la vente de services facturés en fonction de quantités mesurées. Nous invitons les intéressés, comme vous-même, à nous faire part de leurs commentaires et suggestions sur le niveau et sur le type d’intervention que vous jugez nécessaires dans ce domaine. Si vous souhaitez vous exprimer sur le rôle que Mesures Canada devrait jouer dans votre industrie, veuillez consulter notre site Web à : www.mc.ic.gc.ca, ou communiquer avec Sam Stouros, chef de l’équipe d’examen du Secteur des mines et des métaux, au 613-952-2627. Il s’agit là pour vous d’une « occasion en or » de participer et de faire entendre votre opinion. Nous espérons sincèrement votre participation à cette consultation!

1 Mentoring

Programs in the Federal Public Service: Government of Canada. Found online at: http://www.psagency-agencefp.gc.ca/hrrh/hrtr-or/mppssbp-pmespe1_e.asp#28. September/October 2007

eye on business East Kootenay coal projects Agitation by Montana against East Kootenay development and the U.S. Federal Court decision extending liability to Teck Cominco in Trail, B.C. by Darrell Podowski (Vancouver), Chuck Higgins (Toronto), with assistance from Andrew Derksen, student-at-law (Toronto), Fasken Martineau DuMoulin LLP

Coal demand and East Kootenay development Favourable price outlooks for metallurgical coal and coalbed methane (CBM) have reinforced interest in the southeastern corner of B.C. (East Kootenay) as an attractive area for exploration and development. The East Kootenay contains three coalfields (Crowsnest, Elk Valley, and Flathead), which together contain over 50 billion tonnes of coal and 19 trillion cubic feet (tcf) of CBM resource.1 Several companies are active in the East Kootenay including Elk Valley Coal, Western Canadian Coal, Cline Mining, and BP Energy Canada. Cline is in the preapplication phase of the development of a metallurgical coal mine, while BP hopes to begin exploration on what could be a $3 billion CBM project in the Crowsnest coalfield. Two issues could affect future developments. The first is the breakdown of negotiations between Montana and B.C. regarding developing a joint environmental framework for the Flathead River ecosystem, an area in southern East Kootenay that straddles Montana and B.C.. The second is the potential effect of Pakootas v. Teck Cominco Metals, a decision in which a U.S. statute was held to apply against pollution caused by an upstream, Canadianbased smelter.2

Divergent approaches to environmental assessment The British Columbia Environmental Assessment regime (BCEAA) is a two-stage process that reviews projects on a case-by-case basis.3 The pre-application stage focuses on issue identification and is based on consultations with interested and potentially affected parties (Montana was a party in the pre-application stage of the Cline project). The pre-application stage leads to a terms of reference document that is used for the formal assessment application. Montana believes the B.C. approach under-evaluates ecosystem-wide damage from coal projects in the Flathead River. It would like to see a joint scientific panel established for the transboundary watersheds of the Kootenay and Flathead river basins that would conduct a comprehensive, quantitative assessment of baseline environmental conditions of the trans-boundary waters. Talks seeking consensus have broken down and B.C. is continuing with its stated approach. However, a powerful coalition has formed in opposition to the B.C. assessment and approval process. In addition to various Canadian and U.S. activist groups, Brian Schweitzer, Montana state governor, and Max Baucus, U.S. senator and chairman of the Senate Finance Committee, have

Darrell Podowski

Chuck Higgins

spearheaded efforts to force B.C. to change its assessment policy. Secretary of State Condoleezza Rice has become involved and has requested a federal Canadian environmental assessment, as well as a federally brokered solution to the negotiations. Even President George Bush, an erstwhile supporter of coal-based solutions to rising energy demand, spoke against Canadian-situated Flathead River coal development projects.

The International Joint Committee (IJC) In addition to its political pressure, Montana has threatened to refer the dispute to the International Joint Commission (IJC).4 Doing so would achieve little from a legal perspective,

Globe and Mail, August 8, 2007, Report on Business. “B.C.’s coal bed dreams inch ahead amid border impasse.” Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1066 (9th Cir. 2006). 3 R.S.B.C., S.B.C. 2002, c.43. 4 The International Joint Commission (IJC) is an international body set up by the U.S. and Canada under the 1909 Boundary Waters Treaty which has several functions including: (1) assessing and approving applications for structures, such as dams, in border waters which could affect waters levels; (2) carrying out studies (references) in regards to questions put to the IJC at the behest of one or both governments, often to determine whether a project violates the U.S.-Canada Boundary Waters Treaty; and (3) acting to alert both countries of potential disputes and offering a mechanism within which the dispute can be discussed at a political level. 2

CIM Magazine n Vol. 2, Nº 6

eye on business however. The IJC has no binding judicial powers. It can conduct fact-finding investigations, but its reports and recommendations are non-binding. If B.C. wanted to continue with its current environmental assessment process in the Flathead River ecosystem, the IJC has no judicial means to prevent it from doing so. While the IJC holds no inherent jurisdiction over B.C., the reference process and the hearings associated with it could galvanize activists and political opponents from B.C. and Montana and provide an effective ral-

port U.S. arguments and U.S. ability to pressure B.C. against the region’s coal and CBM projects.

The impact of Pakootas v. Teck Cominco Metals: transboundary liability?

In Pakootas, The U.S. Environmental Protection Agency (EPA), under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), had ordered Teck Cominco to carry out a remedial investigation feasibility study on slag discharged from a Canadian smelter Coal and CBM companies, as well as the up the government of B.C., will face Columbia from the various forces River that organized against Flathead development h a d ended up lying point against coal and CBM in the U.S. and subsequently leached development policies. Such a possibil- heavy metals in U.S. waters. The U.S. ity should not be underestimated: in Ninth Circuit Court affirmed the dis1988, an IJC reference was released trict court’s decision and found Teck that had been carried out on the pro- Cominco liable for slag discharged, posed Cabin Creek coal mine, a pro- despite the EPA having no obvious posed 2.2 million tonne per year ther- jurisdiction over Teck Cominco, a mal coal mine.5 The IJC determined Canadian company. In coming to this that the proposed development would conclusion, the Court applied a threeviolate Article IV of the Boundary part test for a finding of an extra-terWaters Treaty between the U.S. and ritorial origin of the source of damCanada, which says that “waters flow- ages: first, that hazardous substance ing across the boundary shall not be “be deposited, applied …placed or polluted on either side to the injury or otherwise come to be located” on a health or property of the other.” The site called a “facility” (the Court conreport recommended that regulatory sidered the Columbia River to be a approval be denied until potential “facility”); second, that there be a trans-boundary impacts were at a level “release” or threat of release of the acceptable to both governments. The substance from the facility into the mine was never developed. environment; and third, that the B.C. could ignore Montana or agree defendant belong to one of the four to a compromise. A compromise could categories of persons who are subject include giving in to ecosystem-wide to CERCLA liability (such as corporabaseline standards. However, doing so tions).6 could allow the U.S. to pressure Whether such reasoning can be Canada and B.C. in the future should applied to coal and CBM developments baseline comparisons indicate contam- has yet to be determined. However, it is ination. Such an outcome would sup- possible that baseline data gathered as

political pressure

significant

a result of a baseline data agreement between Montana and B.C., or from reference findings by the IJC, could act as evidence in the future to establish that coal or CBM projects caused damages in the U.S.—whether CERBA or otherwise.

Conclusion Coal and CBM companies, as well as the government of B.C., will face significant political pressure from the various forces organized against Flathead development, most notably the U.S. State Department and the State of Montana, if B.C. and Montana do not agree to an assessment framework. While Montana possesses no legal means from which it can stop the B.C. preference of approving coal and CBM projects on a case-by-case basis, Montana could ask the State Department to refer a question to the IJC, which could lead to a report with IJC recommendations. Such a report would not be binding. However, the process of creating the report could act as a catalyst to various project opponents (U.S. government and both U.S. and Canadian NGOs), galvanizing them around the issue, leading to media and public relations difficulties, and pressure upon the proponents and on the B.C. government to change its approach and move towards the Montana proposal. Another issue the coal and CBM companies will have to evaluate in the context of East Kootenay is the potential effect of Pakootas (if the case survives the appeal that has been launched by Teck Cominco to the U.S. Supreme Court). An understanding of the liability triggers created by the Ninth Circuit Court could help coal and CBM companies in crafting appropriate early-stage strategies potentially mitigating cross-border down-stream problems in the future. CIM

“Impacts of a Proposed Coal Mine in the Flathead River Basin,” International Joint Commission: December 1988, Ottawa.

It should be noted that while the Ninth Circuit affirmed the lower court’s decision, it rejected the district court’s reasoning that CERCLA applied extraterritorially. The Ninth Circuit found instead that CERLCA was not being applied extra-territorially because the “release” of hazardous substances occurred in the United States. The release had occurred after the slag had come to rest in the U.S. waters.

September/October 2007

student life From Russia with gold by Sabine Vetter, 3rd year PhD student in geology, University of New Brunswick Fredericton Forty participants from 13 countries joined geologists from the Ukraine. We visited five different gold mines, and looked at drill cores and the surrounding geology to understand the genesis of the deposits. The field trip gave me the chance to compare gold values with the gold deposits in my study area in northern New Brunswick. I highly recommend that all geoscience students, as well as Sabine Vetter professional geoscientists, particAt the Martin-Luther-University ipate in this type of field trip—comparHalle, Germany, where I obtained my isons can be very valuable and lead to a Master’s in geology and paleontology, scientific understanding of the diverse my professors pointed out that geolo- elements that influence geological gists “have to go out into the field on the processes. On the field trip, I jumped at rocks, feel them and talk to them, to the chance to do what my professors understand the genesis and its relation- had always told me to do—carry out ship to tectonic and structure.” As I am hands-on observation of rocks and parnot an office person and as I like being ticipate in animated scientific discusin the great outdoors, this suited me sions. It should be said that my idea of perfectly. science and of teaching geology is, During my geology studies in “Never totally trust another geologist. Germany, I visited Canada twice and Learn to question what you are told fell in love with this country. In my and taught.” Students have to learn to final year, Dr. Helmstaedt, at Queen’s compare their book knowledge with University, gave me the opportunity to real-world observations, voice their do my degree mapping in the area opinions with their co-workers, profesaround the Holleford meteorite crater sors, and bosses to become skilled in Ontario and, therefore, a further geologists themselves. This conference chance to study in Canada. When I taught me that students have to hold saw the PhD thesis advertisement their own ideas and use their underfrom the University of New standing and enthusiasm at work. Brunswick, I jumped at the chance. My poster, which was entitled My supervisor at UNB, David Lentz, “Preliminary Comparison of Alteration suggested I attend the 12th and Mineralization of two Shear ZoneQuadrennial International Association hosted Gold Occurrences, Brunswick on the Genesis of Ore (IAGOD) Subduction Complex, New Brunswick, Symposium, which was held in Canada,” garnered a lot of interest due Moscow, Russia, in August of last year. to the exponential climb of gold prices Thanks to funding obtained from over the past few years. During some NSERC, Stratabound Minerals Corp., very interesting discussions with world First Narrows Resource Corp., and class industry scientists and academics, IAGOD, Dr. Lentz and I flew to Kiev to I got objective feedback and fostered attend a nine-day pre-conference field potential research linkages for my thetrip in the Ukrainian Shield and the sis. Another student working under Dr. Carpathian Mountains. Lentz also attended the conference, 76

where she talked about her thesis. She was amazed at the feedback she got from other scientists and members of industry. The scientists offered her support and encouragement to pursue her studies, and also recommended papers for her to consider in the refining of her thesis. I believe it is very important to see other mines, to network with exploration geologists and scientists from around the world, and to exchange research ideas and knowledge. The sessions were very informative and gave me a summary about general ideas, as well as starting points for more research and concepts to include in my work. For us students, it was a great opportunity to talk to others, see excellent presentations, present our research, and get feedback. A ‘Doctor in Philosophy’ means that we have to share our ideas, defend them against others, and be open for what we think is the right answer with the knowledge at hand. Such conferences and field trips are the best time to do this with colleagues. Student participation is very important, as we are the future geologists and geoscientists that will be making the “big” decisions in the future. People may ask, “Why is it necessary to go on such trips and conferences?” My answer is this: we, as scientists, do not live in a bubble. The world and the people around us influence our thoughts and ideas. Interaction with an international audience is essential for the dissemination of scientific concepts and ideas to a greater audience. This conference has given me the opportunity to voice my opinions, challenge my thought patterns, and interact with people who will no doubt be an inspiration and guide to me in the future. I am grateful to Dr. Lentz for giving me the opportunity to present a poster at the IAGOD conference. As well, my studies have been greatly enriched thanks to the financial support from industry. CIM CIM Magazine n Vol. 2, Nº 6

parlons-en Un été irradié au Québec : l’exploration pour l’uranium par Serge Perreault, adjoint au directeur général, Direction générale de Géologie Québec, Ministère des Ressources naturelles et de la Faune la Fosse du Labrador (Orogène du Nouveau-Québec) au nord-est de Chibougamau et au nord de Schefferville respectivement; • dans les roches archéennes et paléoprotérozoïques, du vaste territoire compris entre la rivière Georges et la frontière avec le Labrador, jusqu’à la côte de la baie d’Ungava; et • dans les roches archéennes de la Baie-James.

Le bassin d’Otish, l’Athabasca du Québec? L’intérêt de la communauté minière pour l’uranium connaît une montée fulgurante au Québec, après 22 ans de relative inactivité. Cet engouement pour l’uranium est lié directement à son prix sur le marché au comptant (Spot market) qui connaît une croissance depuis 2004 avec un sommet à 138 $US la livre en juillet 2007. Il en résulte une augmentation des dépenses en exploration pour l’uranium qui n’étaient que de quelques dizaines de milliers de dollars en 2000, de 1,36 M$ et de 4,3 M$ en 2004 et 2005 respectivement, et finalement de 16 M$ en 2006 (données réelles provisoires de l’Insitut de la Statistique du Québec pour 2006). Les dépenses en 2007 consacrées à la recherche d’uranium seront largement supérieures à celles de 2006 selon les prévisions des différentes compagnies actives sur le territoire québécois. Les activités d’exploration pour l’uranium sont réparties sur une cinquantaine de projets situés principalement dans le sud-ouest, le nord-est et le nord du Québec, dont : • au Témiscamingue (Kipawa), dans les Laurentides (Mont-Laurier) et sur la Côte-Nord (dont le secteur compris entre Baie-Johan-Beetz et Natashquan), dans la province géologique de Grenville; • dans les bassins sédimentaires paléoprotérozoïques des monts Otish et de September/October 2007

Le potentiel uranifère du bassin sédimentaire paléoprotérozoïque des monts Otish est souvent comparé avec celui du bassin sédimentaire mésoprotérozoïque de l’Athabasca en Saskatchewan (la production d’uranium dans le bassin de l’Athabasca représente le tiers de l’approvisionnement mondial). Le bassin des monts Otish recèle plusieurs indices uranifères typiques des gîtes d’uranium associés à des discordances. Plus d’une dizaine de compagnies majeures et junior sont actives dans le secteur des monts Otish. Les résultats prometteurs obtenus par Ressources Strateco sur la propriété Matoush mettent en relief le potentiel des minéralisations du type filonien associé à une zone de cisaillement dans des roches sédimentaires.

La région de la rivière Georges, un nouveau Rössing? Le vaste territoire de la rivière George, au nord-est de Schefferville, est composé de roches archéennes et paléoprotérozoïques métamorphisées. Ce territoire représente une nouvelle cible d’exploration pour l’uranium, mis en évidence à la suite de la découverte de zones anomales en uranium dans les sédiments de fonds de lacs prélevés par le Ministère en 1997. De plus, les nouveaux indices uranifères qui y ont été mis au jour au cours de 2006, par les compagnies minières actives dans cette

région, laissent présager que ce vaste territoire pourrait devenir une province métallogénique uranifère. Pendant près de 750 millions d’années, l’uranium a pu être mobilisé et transporté lors d’épisodes d’érosion, de déformation et de métamorphisme, puis déposé et concentré sous la forme de minéralisations dans des roches sédimentaires, dans des granites et pegHélicoptère avec les instruments de mesures de radiométrie au décollage, région de Kangiqsualujjuaq, côte est de la baie d’Ungava.

matites ou dans des pièges structuraux. Ainsi, le vaste territoire de la rivière George, représente un terrain fertile pour divers types de minéralisations uranifères dont celles associées : • à des intrusifs granitiques de type Rössing situé en Namibie (la mine Rössing, du Groupe Rio Tinto, produit 7,7 % de la production mondiale d’uranium); • à des pegmatites du type Madawaska, en Ontario (production totale de 4,54 tm à 0,0997 % d’U3O8 et de 4.295.281 kg d’U entre 1957 et 1982); et • à de l’uranium filonien rattaché à des zones de cisaillement majeures de type Beaverlodge. Afin de faire le point sur l’exploration de l’uranium au Québec, le comité organisateur de Québec Exploration 2007 (du 26 au 29 novembre 2007 à Québec) vous a concocté une session spéciale sur l’exploration de l’uranium au Québec et dans l’est du Canada. CIM 77

engineering exchange Making things better in the oil sands Colt Engineering by Haidee Weldon Make a plan and work to it! Sometimes you get lucky and sometimes you don’t. In the early eighties, Colt Engineering made a strategic decision to get involved in the oil sands; they believed that the oil sands were the future, and their decision paid off. On the flip side, there’s a certain Texas oil baron who, in the late seventies, said that mining the oil sands would never be profitable, and opted out of investing. He must be kicking himself now…

A powerful partnership Colt began its foray into the oil sands by working for Syncrude. Larry Benke, managing director, WorleyParsons Canada, was a project manager at the time. “Since then, the company has participated and grown with the industry, successfully working on multiple projects for several of the industry leaders.” When Colt first arrived on the scene, Syncrude was moving away from draglines to the truck-and-shovel method of mining. That was a huge change that contributed strongly to making the oil sands profitable. Today, the expanding mine faces are kilometres away from the processing plants, making the truck-and-shovel system, once so practical, potentially inefficient on its own. Cosyn, a division of Colt, worked with Syncrude in developing the hydrotransport system to pipeline an oil sands slurry from truck “dumps” to the plants—again an enabling improvement to the mining system. “The holy grail for the future,” Benke explained, “is to separate the sand from the oil right at the mine face, eliminating the need to transport it at all.” Many of the oil sands producers are now experimenting with various ways of accomplishing this. In 1991 Colt secured an important alliance with Syncrude, eventually building a dedicated team of 500 people dubbed “CoSyn,” and devoted to 78

Syncrude’s sustaining capital projects. CoSyn’s I3 initiative is a special program that encourages individuals to innovate—and recognizes them for it. The ideas that CoSyn’s people have come up with have translated to annual cost savings for their customer in the range of $25 million per year. An example is the replacement of “hard” metallurgy liners in the enormous bins and primary separation vessels. Traditionally, this involved cutting out the old liner and welding in plates to create a new liner. Workers needed to spend long hours inside the bin, using scaffolding to get to the bottom, and working in a confined space. The forward-thinking people at CoSyn designed a way to laser scan the vessel to get the exact dimensions. Once they had that data, a complete new liner could be prebuilt to spec and then popped into the bin. The result was a marked decrease in manhours spent at the bottom of a vessel and less use of scaffolding. They won a Presidents Safety Award from Syncrude for lowering the risk to the employees, and just as importantly, shaved weeks off the turn-around time—something that’s always appreciated. Colt Engineering is focused on assisting their customers in developing new technology, or tweaking existing technologies, in the interest of improving efficiency and to continue to drive down the cost of mining the oil sands. These days, Colt is involved in a number of projects related to managing tailings. By developing ways to maximize the re-use of water, and speed up the process for recovering the sand component, less fresh water is required and the land can more quickly be returned to its natural state.

Multiple projects on the go Colt has been a leader in applying new geomatics technology to the oil

sands. Information is gathered via satellite imagery, or other automated means, and the data is then processed to paint a picture of the site. This technology can be used to develop and manage mines or to model the progression of tailings ponds. “By overlaying on satellite imagery, we can work out what the ponds will look like over the years,” Benke explained. At Suncor, Colt engineers have been busy executing projects in tailings and debottlenecking. They have also completed 75 per cent of the engineering on a new extraction plant and are conducting scoping studies for a potential new mine. Similarly, in a joint venture with another engineering firm, Colt is designing the next expansion phase for the Athabasca Oil Sands project (a Shell, Chevron and Marathon joint venture).

Merging creates synergies Colt’s recent merger with WorleyParsons has brought exciting synergies. New capabilities acquired through WorleyParsons have given Colt a broader spectrum of knowledge and service offerings such as in-mine materials handling. HGE, part of the new family, is a minerals engineer active in Canada and globally. Benke is looking forward to new possibilities: “We are excited about working

engineering exchange with HGE and expanding into a more diverse minerals capability.” Colt is also now working closely with FlintTransfield Services as part of the “One Team” alliance performing asset management services for Suncor. WorleyParsons and Transfield have been leaders in this combined engineering and construction approach in Australia. “We are thrilled to now bring these ideas and concepts to the oil sands” says Benke. In an age where technology is advancing in leaps and bounds, it’s nice

to see that something you worked on over 20 years ago is still being used today. In the mid-eighties, Larry Benke was part of a team that designed some very large modules that needed to be transported from Edmonton to the Syncrude site. The logistics challenge was to transport the 250-modules, and specifically getting them over a bridge with no more than half of the truck/train on the bridge at any given time. Much tinkering to the design was necessary before the truck/train and modules were within the weight limits,

as well as long enough to go over the bridge. The entire procession set off, police escort and all, with the intention of going through the town of Fort McMurray very early in the morning. To their surprise, the people of Fort Mac had gotten wind of this and turned out to watch. “It was like a parade!” Benke exclaimed. Over the years, Benke has witnessed similar hauling of large modules and was recently surprised to see the same bridge beams he utilized for his truck/train are still being used today. CIM

the supply side

The state of Canada’s trade— thank God for natural resources!

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

by Jon Baird, managing director, CAMESE

he 2007 annual report entitled Canada’s State of Trade – Trade and Investment Update is available online at www.international.gc.ca/eet. It is a comprehensive 70-page document about where the government thinks Canada stands in the world of trade. Here is a brief review with a focus on the contribution of the mining industry. For Canada’s international commercial performance, 2006 was, to a large extent, a resource story. Although Canadian exports were up by 1.1 per cent to a record $523.7 billion, Canada would have seen a decline in overall exports in 2006 if it were not for the high prices realized for exports of resources and resource-based products. The expansion of resource exports was also largely responsible for Canadian exports diversifying away from the U.S. as their share of our exports fell to 81.6 per cent, compared to a peak of 87.1 per cent in 2006. 80

As a result of a stronger growth in imports, compared to exports, Canada’s trade surplus narrowed to $37.2 billion in 2006. In fact, Canada’s trade surplus in resources and resource-based products is now equivalent to the country’s entire global trade surplus. Resources, along with merger and acquisition activities in a variety of sectors, were the primary drivers of the surge in foreign direct investment (FDI) flows into Canada in 2006, which reached $78.3 billion, more than double the $35.0 billion witnessed the previous year. If I recall correctly, the sale of Inco and Falconbridge alone amounted to over half of the 2006 FDI into Canada. The report makes a special note of the rise of global value chains. The world is moving away from shipping

outpaced by our competitors: not just by fast-growing emerging economies like China and India, but also by our more traditional competitors such as the U.S. and Europe, who are aggressively pursuing international policies to strengthen their competitive advantage.” Minister Emerson refers to the government’s Advantage Canada initiative, including the Global Commerce Strategy that was mentioned in the spring budget. As far as I can see, as yet without any specifics announced, these plans are still in the making. In the meantime, here is a quote from the July 4, 2007 issue of Embassy, Canada’s Foreign Policy Newsweekly: “Senior foreign affairs and trade officials are working overtime to defend the department’s existing programs and strategies and prove they

Senior foreign affairs and trade officials are working overtime to defend the department’s existing

programs and strategies

and prove they are on board with the Conservative government goods manufactured in one country to a destination in another. Rather, trade is increasingly in incremental inputs and services, and investments are made for location-specific advantages which, in turn, feed into regional or global production networks. In his introductory message, David Emerson, Minister of International Trade said, “On the global front, we are being

are on board with the Conservative government. The priority is to find ways to support the government’s focus on Afghanistan, North America, and the Hemisphere, as well as growing and emerging markets, especially China and India, while fitting in $42 million in cuts and outlining to Treasury Board why its resources are allocated where they are.” CIM CIM Magazine n Vol. 2, Nº 6

standards Quality control reporting requirements by the mining industry by Armando Simón, principal geologist, AMEC International (Chile) S.A., and Greg Gosson, technical director, geology and geostatistics, AMEC Americas Limited

Quality assurance (QA) and quality control (QC) are the two major components of any quality management system. According to ISO’s definition, QA is “the assembly of all planned and systematic actions necessary to provide adequate confidence that a product, process, or service will satisfy given quality requirements,” and QC refers to “the system of activities to verify if the quality control activities are effective.” While QA deals with prevention of problems, QC aims to detect them, in the event that they occur. In practical terms, geological quality control procedures are intended to monitor precision and accuracy of the assay data, as well as possible sample contamination during preparation and assaying. NI 43-101 Standards of Disclosure for Mineral Projects requires exploration and mining organizations with Canadian investors to report their QA/QC program. The relevant sections are as follows. Section 3.3 of NI 43-101 – Requirements Applicable to Written Disclosure of Exploration Information: The issuer (company) must include a description of the quality assurance program and quality control measures applied during the execution of the work being reported on. Section 1.5 of Companion Policy 43-101CP provides guidance to a September/October 2007

qualified person classifying a mineral deposit as a mineral resource or mineral reserve to follow the Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines adopted by CIM. The section relevant to QA/QC in those guidelines follow. The resource database–QA/QC: This program should be concerned with, but not limited to data verification, drill sample recovery, sample size, sample preparation, analytical methods, the use of duplicates/ blanks/standards, effects of multiple periods of data acquisition and consistency of interpretation in three dimensions. Item 15 of Form 43-101F1 Technical Report – Sample Preparation, Analyses, and Security. Describe sample preparation methods and quality control measures employed before dispatch of samples to an analytical or testing laboratory, the method or process of sample splitting and reduction, and the security measures taken to ensure the validity and integrity of samples taken. Include: • A summary of the nature and extent of all quality control measures employed and check assay and

other check analytical and testing procedures utilized, including the results and corrective actions taken. • A statement of the author’s opinion on the adequacy of sample preparation, security, and analytical procedures.

Internal lab procedures Competently managed laboratories have their own internal QC protocols, and the assay certificates commonly include the results of at least some of the internal laboratory QC. However, laboratories will commonly reveal those checks that pass their internal controls, but not the failures. Results of batches that fail laboratory QC are re-

standards run, and the re-run results, along with new passing QC results, are reported. Thus the laboratory QC provides a picture of what the laboratory considers acceptable performance, rather than a direct measurement of the quality. Independent measurements of the data quality are typically poorer than the QC reported by the laboratory because they detect some instances of poor performance that slipped through the laboratory QC. How different these results are depends upon how effective the laboratory QC was at eliminating poor performance. Thus the external QC provides an assessment of the efficacy of a laboratory’s QC, as well as an independent assessment of the data quality. AMEC regards sole reliance on the internal laboratory QC as unacceptable practice. This has been proven by AMEC’s direct experience in revealing deceptive practices by laboratories generally considered to be ‘professional.’

Additional evidence comes from a recent review of industry QA/QC practices in NI 43-101 technical reports. AMEC could not find relevant details on QA/QC programs in half of the consulted SEDAR-filed technical reports. Although the overall cost increase of the implementation of a QA/QC program is relatively small, usually not exceeding one to two per cent of the total exploration costs, the percentage increase to the assay budget evokes a negative response by the cost-conscious company. As a result of disclosure standards in place and the expected scrutiny by due diligence providers for investment banks in support of a finance, junior and major companies should be increasingly interested in implementing effective QA/QC programs. Confidence in the analytical data mandates it. CIM

Regardless of the intentions of laboratory management or laboratory owner management, the incidence of poor sample preparation practices and unreported blank, duplicate, and Certified Reference Material (CRM) failures is actually higher than commonly acknowledged.

Quality control in the real world AMEC’s experience with numerous recent audits and due diligence studies conducted on projects in South America, Asia, Africa, North America, and Europe (many of them managed by North American and Australian exploration and mining companies) indicate that comprehensive geological quality control programs are still infrequent. Out of 26 projects from South America and Europe audited or reviewed by AMEC between 2003 and 2007, only four had established QA/QC programs that would allow precision and accuracy to be properly assessed.

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T 82

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! CIM Magazine n Vol. 2, Nº 6

cim news CIM welcomes new members Aerkar, Chaitanya, Québec Afshar, Fred, Ontario Aloi, Dina, Ontario Archer, Paul, Québec Arrieta, Barbara, Québec Barber, Michael, Ontario Barczak, Thomas, USA Bastien, Brad, Ontario Beaudin, Jean, Québec Beaudoin, Marcel, Québec Belanger, Julie, Québec Bellhouse, Erika, Ontario Benny, Jean-Sebastien, Québec Bilodeau, Carl, Québec Bissiri, Yassiah, Ontario Blacksmith, Jack R., Québec Boivin, Suzel, Québec Bolduc, Nicolas, Québec Bonnet, Anne-Laure, Québec Boucher, Marie-Eve, Québec Boulianne, Tommy, Québec Bourassa, Yan, Ontario Bourgault, Eve, Québec Boutin, Mathieu, Ontario Bowerman, Darcy, Ontario Boyd, Ramon, Saskatchewan Brown, Wayne, Ontario Cacchion, Frank, Québec Cantin, John L., Ontario Cataford, David, Québec Cauchon, Alain, Québec Champagne, Michel, Québec Charuk, Jan G., Québec Chehab, Dania, Ontario Chiasson, J.P., Ontario Clarke, Robert, Ontario Colinet, Jay, USA Coniconde, Edwin, Ontario Corbeil, Robert, Québec Coté, Alaine, Québec

Courville, Allan, Ontario Coxford, Richard, Ontario Dacunha, Ivor, Ontario Dahata, Nilesh, Ontario d’Amours, Mathieu, Québec Dasyam, Nagender, Ontario David, Jean-Sebastien, Québec de Bakker, Jan, Ontario De Chavigny, Benoit, Québec Derycke, Virginie, Québec Diagana, Bocar, Québec Difrancesco, Robert, USA Donovan, Jaimie, Ontario Doucet, Roger, Ontario Drouin, Paul, Québec Dubé, Mathieu, Québec Dubé, Benoît, Québec Dubuc, Andre, Québec Dufour, Carl, Québec Dutil, Jack, Québec Eastwick, Doug, Ontario Edmin, Roger, Ontario Either, Jean, Ontario Fairchild, Jamie, Ontario Fatehi, Arya, Québec Feghali, David, Québec Gaetan, Raymond, Ontario Gagnon, Pierre, Québec Garbutt, Mike, Ontario Gauthier, Pierre, Québec Geitz, Matt, Ontario Gilbert, Patrice, Ontario Gogal, Jason, Saskatchewan Gonzalez, Jorge Eduardo Martin, Ontario Gorjian, Masoud, Ontario Grenier, Richard, Québec Guy, Jean-Sebastien, Québec Gwizdkowska, Liliana, Québec Halder, Achinta, Ontario

Hamel, Alan, Québec Herzog, Ricardo, Ontario Hosseini, Zahra, Québec Hunter, Richard, Ontario Jacobsen, Hans, Québec Jafari, Rouzbeh, Québec Johnson, Jeffery C., USA Joly, Mario, Québec Jorgenson, John, USA Kampe, Henry S., Ontario Kasuya, Hatsue, Ontario Khoury, Sam, Ontario Kocsis, Charles, Ontario Krogman, Jim, USA Labonté, Marcel, Québec Lacroix, Roger, Québec Laflamme, Marcel, Québec Lafleche, Andre, Québec Landry, Jean-Pierre, Québec Langevin, Frederic, Québec Laplante, Benoit, Ontario Lapointe, Emilie, Québec Lapointe, Bernard, Québec Lavoie, Yolaine, Québec Laycock, Andrew, Ontario Letourneau, Michel, Québec Levesque, Sylvie, Québec L’Heureux, Marc, Québec Lilly, Gus, USA Live, Patrice, Québec Luo, Jun, Ontario Macaskill, Leonard, Ontario MacDonald, Claude, Québec MacPherson, George, Ontario Mariglia, Carlo, Ontario Martin, Barbara, Québec Matyas, Gabor, Québec McLaughlin, Bob, Ontario Millier, Linda, Québec Mischler, Steven, USA

A look back in time 35 YEARS AGO… • Readers learned of the newly formed committee within CIM on computer applications and process control. • M.W. Bartley resigned as president-elect of CIM. He was replaced with J.P. Nowlan. • The 24th Canadian Conference on Coal featured presentations and discussions on the present and future potential for Canadian coal in the international coal market. • Winners of the annual Student Essay Competition were M.J.E. Hughes, B.H. Sanden, and D.L. Sangster. • The CIM Bulletin reported on the discovery of the Star of Sierra Leone, a 2 1⁄2 by 1 1⁄2 inch diamond weighing 968.9 carats. • Saskatoon played host to the Annual Western Meeting; its theme was western minerals in the computer age. • Raymond Price was appointed head of the Department of Geology Sciences at Queen’s University. • CIM Bulletin readers learned of F.A. Forward’s death. He served as president of CIM for the 1965-1966 term.

Miville-Deschenes, Denis, Québec Moe, Denis, Ontario Monast, Patrice, Québec Mulligan, Catherine N., Québec Nakai-Lajoie, Patti, Ontario Nascimento Leite, Andre, Québec Oliazadeh, Manochehr, Ontario Pabst, Thomas, Québec Paquet, Johanne, Québec Parker, Norman, Québec Pauzé, Louis, Québec Pauzé, François, Québec Peloquin, Louis, Québec Petukhov, Andrey, Saskatchewan Plante, Benoit, Québec Pohl, Daniel, Ontario Poxleitner, Gary, Ontario Privé, Michel, Québec Proudfoot, Dawson, Ontario Proulx, Eric, Québec Raymond, Jocyelyn, Québec Raymond, Jasmin, Québec Raynald, Jean, Québec Reyes, Juan Carlos, Ontario Rioux, Martin, Québec Rogers, Brad, USA Rowson, Lloyd, Saskatchewan Roy, Yoan, Québec Safizadeh, Fariba, Québec Savoie, Armand, Québec Scheepers, Rene, Saskatchewan Shaw, Catherine, Ontario Shierman, Mark, Ontario Simard, Jean-Marc, Québec Snyder, Gregg, Ontario Stochmal, Michael, Ontario Sullivan, Tim, USA Sultan, Safdar, Ontario Tang, Baoyao, Saskatchewan Tesarik, Douglas R., USA Thibault, Michel, Québec Thurston, Malcolm, Ontario Timusk, Markus, Ontario Tremblay, Enrick, Ontario Tremblay, Eric, Québec Uddin, Salah, Québec Vachon, Bernard, Québec Vadjaraganian, Fanny, Québec Valeyev, Oleg, Ontario Vankempen, Terry, Ontario Van Koppen, Marten, Ontario Vignola, Jacques, Québec Waldie, Scott, Ontario Walker, John, Ontario Waram, Ryan, Ontario Wedzicha, Jerry, Ontario Wetelainene, Henry, Ontario Whittom, Jacques, Québec Wiebe, Susan, Ontario Wilhelmy, Jean-François, Québec Williams, Ted, USA Williamson, Miranda, Ontario Willis, Luke, Ontario Wyeth, Jeremy, Ontario Zahovskis, Christopher, Québec

Corporate Members The above was taken from the September and October 1972 issues of CIM Bulletin. September/October 2007

North Fringe Resources Inc. 83

CIM Distinguished Lecturers The Distinguished Lecturer Program provides members with up-to-date, relevant information by outstanding speakers.

Éminents conférenciers de l’ICM Programme des éminents conférenciers offre aux membres de l’ICM

de l’information pertinente et courante grâce à des conférenciers hors pair.

Design and Installation of the World’s Largest Friction Hoist David W. Butler | Cook Engineering, Thunder Bay

Developing the Orogenic Gold Deposit Model: Insights from R&D for Exploration Success

2007 2008

David R. Lentz | University of New Brunswick, Fredericton

Holistic and Sustainable Mining Technology Douglas M. Morrison | Golder Associates, Toronto

Engaging First Nations Communities Glenn K. Nolan | Missanabie Cree First Nation, Missanabie

David W. Butler

David R. Lentz

Douglas M. Morrison

Glenn K. Nolan

Conception et installation de la plus grosse machine à extraction à poulie d’adhérence (Koepe) au monde David W. Butler | Cook Engineering, Thunder Bay

Développement du modèle de gisement d’or orogénique : aperçus d’exploration réussie à partir de recherche et développement (R&D) David R. Lentz | Université du Nouveau-Brunswick, Fredericton

Technologies minières holistiques et durables Douglas M. Morrison | Golder Associates, Toronto Sponsored by / Commandité par:

Engagement des communautés des Premières Nations Glenn K. Nolan | Première nation crie Missanabie, Missanabie

AROUND THE WORLD CIM EVENTS World Gold 2007 In conjunction with AusIMM and SAIMM October 22-24 Cairns, Australia Contact: Alison McKenzie, AusIMM Tel.: +61.3.9662.3166 Fax: +61.3.9662.3662 Email: conference@ausimm.com.au Website: www.ausimm.com Mineral Resources Review 2007 November 1-3 St. John’s, Newfoundland Contact: Len Mandville Tel.: 709.729.6439 Fax: 709.729.3493 Email: lenmandville@gov.nl.ca Calgary Branch Technical Meeting November 12 Calgary, Alberta Contact: Andrew Hickinbotham Tel.: 403.267.3891 Email: cimcalgary@gmail.com CMP 40th Annual Canadian Mineral Processors Operators’ Conference/40e Conférence des minéralurgistes du Canada January 22-24, 2008 Ottawa, Ontario Contact: Janice Zinck Tel.: 613.995.4221 Fax: 613.996.9041 Email: jzinck@nrcan.gc.ca Website: www.c-m-p.on.ca MEMO Maintenence Engineering-Mine Operators’ Conference/ Colloque sur l’ingénierie de maintenance et les exploitations minières February 24-28, 2008 Val-d’Or, Québec Contact: Chantal Murphy, CIM Tel.: 514.939.2710, ext. 1309 Fax: 514.939.2714 Email: cmurphy@cim.org CIM Conference and Exhibition—Edmonton 2008 May 4-7, 2008 Edmonton, Alberta Contact: Chantal Murphy, CIM Tel.: 514.939.2710, ext. 1309 Fax: 514.939.2714 Email: cmurphy@cim.org

September/October 2007

Mining and the Environment IV International Conference October 20-27 Sudbury, Ontario Contact: Jackie Richard, conference coordinator Tel.: 705.675.1151, ext. 2014 Fax: 705.675.4866 Email: sudbury2007@laurentian.ca Website: www.sudbury2007.ca Flotation ‘07 November 5-9 Cape Town, South Africa Contact: B.A. WIlls Tel.: +44.7768.234121 Fax: +44.1326.318352 Email: bwills@min-eng.com Website: www.min-eng.com/conferences 4th International Seminar on Deep and High Stress Mining November 7-9 Perth, Western Australia Contact: Josephine Ruddle, marketing manager Tel.: +61.8.6488.3300 Fax: +61.8.6488.1130 Email: acg@acg.uwa.edu.au NEWGENGOLD2007 November 14-16 Perth, Western Australia Contact: Kay Matheson, marketing & conference manager Tel.: +61.8.9321.0355 Fax: +61.8.9321.0426 Email: kay@paydirt.com.au American Mining Hall of Fame Banquet December 1 Tucson, Arizona Contact: Jean Austin, office manager Tel.: 520.577.7519 Fax: 520.577.7073 Email: admin@miningfoundationsw.org SWEMP2007 December 11-13 Bangkok, Thailand Contact: Raj Singhal, symposium chair Tel.: 403.239.3849/403.461.2981 Fax: 403.241.9460 Email: singhal@shaw.ca Website: www.mpes-cami-swemp.com

Travailler ensemble vers

2020

du 24 au 28 février 2008 | Val-d’Or, Québec | February 24 to 28, 2008

Operation and Maintenance: A winning synergy for the future Moderator: Jacques Nantel A plenary session featuring five distinguished mining industry veterans is scheduled for the second day of the technical program. These mining experts will share their vision of a vital synergy, essential for successful operations and maintenance practices. Our panel of keynote speakers will be led by Jacques Nantel, president, Nantar Engineering. His expertise and knowledge of the mining industry will allow for a stimulating exchange between the panellists and those in attendance, who will be invited to actively participate. Our keynote speakers are as follows: Jacques Perron, senior vice president, Americas, IAMGOLD Corp. Daniel Racine, vice president of operations, Mines Agnico-Eagle Claude Lemasson, general manager - projects, Canada/USA, Goldcorp Inc. Neil Miller, manager, maintenance and performance contracts, USA and Canada, Sandvik Andrew Thorne, general manager, Fuel Services Division, Port Hope, Ontario facility, Cameco Corp.

Production et maintenance : Une synergie gagnante pour l’avenir Moderateur: Jacques Nantel

Working together towards

2020

Une plénière réunissant cinq personnalités reconnues pour leur expérience par les gens de l’industrie minière, se déroulera lors de la deuxième journée du programme technique. Ces experts du domaine minier ont accepté de partager leur vision sur la synergie vitale et essentielle des fonctions de maintenance et d’exploitation. Pour bien encadrer ce panel de vedettes, Jacques Nantel, président, Nantar Engineering, agira à titre de modérateur. Son expertise et ses connaissances du domaine minier permettront de stimuler les discussions entre les panélistes et l’assistance qui sera appelée à participer activement. Voici nos vedettes : Jacques Perron, vice-président principal, Amériques, IAMGOLD Corp. Daniel Racine, vice-président, exploitation, Mines Agnico-Eagle Claude Lemasson, directeur général, projets, Canada/États-Unis, Goldcorp Inc. Neil Miller, directeur, offre de services, États-Unis et Canada, Sandvik Andrew Thorne, directeur général, Division des services de combustible, Ontario, Cameco Corp.

www.cim.org/memo2008

2007 Seminar Series

PROFESSIONAL DEVELOPMENT

STRATEGIC RISK QUANTIFICATION and MANAGEMENT for ORE RESERVES and MINE PLANNING

For information please contact: Delores LaPratt Department of Mining, Metals and Materials Engineering McGill University, Montreal, QC Email: admcrc.mining@mcgill.ca Phone: 514.398.4755, ext. 089638 Fax: 514.398.7099 Website: www.cim.org For registration please contact: Chantal Murphy Meeting Coordinator, CIM Suite 855, 3400 de Maisonneuve Blvd., W Montreal, QC H3Z 3B8 Email: cmurphy@cim.org Phone: 514.939.2710, ext. 1309 Fax: 514.939.2714 Website: www.cim.org

Mining Engineering

Upcoming 2007 Seminars

• Mineral project evaluation techniques and applications: From conventional methods to real options September 11-14, Montreal Michel Bilodeau, McGill University, Canada and Michael Samis, AMEC, Canada Learn the basics of economic/financial evaluation techniques, as well as the practical implementation of these techniques to mineral project assessments. Learn: • How to gain a practical understanding of economic/financial evaluation principles. • How to develop the skills necessary to apply these to support mineral project decisions. • About the real options approach to valuing mining projects. • Geostatistical mineral resource/ore reserve estimation and meeting the new regulatory environment: Step by step from sampling to grade control September 24-28, Montreal Michel Dagbert, Geostat Systems Int, Canada; Jean-Michel Rendu, Consultant, USA; and Roussos Dimitrakopoulos, McGill University, Canada Learn about the latest regulations on public reporting of resources/reserves through state-of-the-art statistical and geostatistical techniques. Learn how to: • Apply geostatistics to predict dilution and adapt reserve estimates to that predicted dilution. • Learn how geostatistics can help you categorize your resources in an objective manner. • Understand principles of NI43-101 and SME Guide. • Theory and practice of sampling particulate materials October 1-3, Montreal Dominique François-Bongarçon, AGORATEK, USA Develop an understanding of the theory of sampling particulate materials, its practice, scope, limitations and appropriate applications. Learn: • Eye-opening facts you may have overlooked or ignored until now about the consequences of bad sampling and the difficulties of good sampling. • The unsuspected amplitude of economic ramifications of poor sampling.

Upcoming 2008 Seminars • Applied risk assessment for ore reserves and mine planning: Conditional simulation for the mining industry May, Montreal Roussos Dimitrakopoulos, McGill University, Canada • Strategic risk management and applied optimization in mine design May, Montreal David Whittle, BHP Billiton, Australia; Roussos Dimitrakopoulos, McGill University, Canada; and Manuel Arre, Gemcom Software Int., Canada • Computer simulation and animation for the mining industry: Mine design, mine planning and equipment selection June, Montreal John Sturgul, University of Idaho, USA

CIM Conference and Exhibition Edmonton, Alberta May 4â&#x20AC;&#x201C;7, 2008

Last call for submissions to technical program The abstract submission deadline is September 30, so go online to www.cim.org/edmonton2008 and get yours in today. This is your chance to share your knowledge with peers throughout the industry. The technical session topics are outlined below.

TIME SESSION HR: Managing the greatest resources Mon PM Tues AM1 Tues AM2 Tues PM Wed AM1 Wed AM2

Health and Safety Human Resources Human Resources Strange Bedfellows, Unusual Partnerships The Student-Industry Partnership First Nations and Mining

Prospects for a strong future Mon PM Tues AM1 Tues AM2 Tues PM Wed AM1 Wed AM2

Community Engagement Geology Geology Geology Effective Risk Management for Mining Projects New Practices for Sustainable Operations

Operational excellence Mon PM Tues AM1 Tues AM2 Tues PM Wed AM1 Wed AM2

New Developments in Oil Sands Uranium: Great Power in Saskatchewan New Projects in Industrial Minerals and Potash New Operations Creating Wealth in BC World-class Metal Mining The Global Coal Industry

The tools to build on Mon PM Tues AM1 Tues AM2 Tues PM Wed AM1 Wed AM2

Towards Zero Emissions New Practices in Environmental Management Realizing Savings through Energy Management Next Generation Technology: the Future of Mining Innovative Products and Solutions Innovative Products and Solutions

Process improvement Mon PM Tues AM1 Tues AM2 Tues PM Wed AM1 Wed AM2

Improving Onsite Reliability Rock Engineering Rock Engineering SMART-led Forum Innovation Forum: Creating a Sustainable Future Innovation Forum: Creating a Sustainable Future

www.cim.org/edmonton2008

history California gold (Part 1) by R.J. “Bob” Cathro Chemainus, British Columbia

During the decade of the 1850s, gold mining changed from a treasure hunt to an industry. While shovelling dirt into their toms and sluices, many miners could hear the steady thumping of giant stamp mills crushing gold-bearing ore dug by wageearners in underground tunnels. In contrast to partners engineering their own dams and ditches to deliver a stream of water, hydraulic mining corporations purchased millions of gallons every day from heavily capitalized water companies… These mining efforts— some stubbornly primitive, others experimentally sophisticated—employed one hundred thousand men year after year… Never had there been a frontier so quickly industrialized, employing such a force of educated and skilled workers, all of them dependent on one elusive and curious commodity—as was the entire economy of California (HOLLIDAY, 1999, P. 151).

Dredge tailings, Bonanza Creek, Yukon September/October 2007

Placer Mining Total gold production from California has been estimated by Böhlke to be about 115 million ounces (3,575 tonnes), of which approximately 60 per cent came from placer deposits. Most of the placer gold was derived from the erosion of lode gold deposits that occur in the three main quartz vein camps—the Mother Lode at the south end, the Grass Valley camp in the middle, and the Alleghany camp to the north. They form a belt that is situated on the western slopes of the Sierra Nevada Mountains and lies close to, and roughly parallels, the west side of the Sierra Nevada Batholith. Hydrothermal micas from the quartz veins have given K-Ar dates from the end of the Jurassic Period (144 to 145 Ma; Ash, 2001). Erosion during the Cretaceous Period removed as much as three kilometres from the metmorphic roof of the batholith. The coarser alluvial gold mined during the early years of the Gold Rush was trapped by bedrock riffles relatively close to its source,whereas the finer gold was transported for much greater distances and some eventually reached the sea, which occupied the Great Valley during the Tertiary Period. Approximately 75 per cent of the placer gold was found in Quaternary gravels; the balance occurred in gravels of Tertiary age (Jenkins and Wright, 1934). California placer mining evolved through three different phases, the first of which employed traditional gold pans, sluice boxes, and toms (screened hoppers). This technique was most applicable to paystreaks lying close to bedrock under thin gravel cover. About 12 million ounces (370 tonnes) were recovered in this way during the first five years. As production of the easiest gold began to decline, larger sluice boxes and diversion dams were needed and the operations became more labour-intensive. As a result, corporations with large workforces began to appear. As the amount of gravel that had to be moved began to exceed what could be handled by that approach, placer gold mining entered an industrial stage called hydraulic mining. It used the abundant water resources in the region to cheaply remove thicker deposits of younger gravel that covered the paystreaks and wash it through ever larger sluice boxes. Hydraulic mining was first introduced in March 1853 at American Hill, near Nevada City, in the Grass Valley camp. Although many people claim to have invented this technique, Californians have always regarded its father to be a miner, Edward Mattson, with assistance from Anthony Chabot, a sailmaker, and Eli Miller, a tinsmith (Young, 1970). Hydraulic mining required ditches and wooden flumes to transport water, in some cases for considerable distances. When the water reached the mining area, it was directed at the gravel face using high-pressure hoses, ball-and-socket joints, and nozzles (also called monitors, or giants). By 1859, about 9,150 kilometres of canals, ditches, and flumes had been constructed at a cost of $13.5 million, and by 1865, gravel deposits as thick as 150 to 250 metres were being attacked. An estimated 11 million ounces of gold (340 89

geology Perry, of the Indiana Company, had a much improved model built by the Bucyrus Company (machinery) and Griffin & Cameron (dredge) for work on the Yuba River. This design became known as the California dredge. By 1910, 72 dredges were working on the Yuba, Feather, American, Bear, and other tributaries of the Sacramento and San Joaquin rivers, which occupy the Central Valley. Similar dredges were soon shipped elsewhere, including the Klondike Gold Field, Yukon Territory, in 1905. Dredges are scow-like sluicing plants weighing up to 800 tonnes that float on ponds in Dredge on Trinity River. From the Eastmanâ&#x20AC;&#x2122;s Originals Collection. Courtesy of the University of California, Davis. the creek bed, which they carry tonnes) were recovered by hydraulic mining, but at a con- with them as they work. Digging is done with a continusiderable cost in environmental degradation. By 1880, ous bucket-line that scoops up gravel and the upper more than 125,000 hectares of farmland and settlements metre or so of bedrock, and discharges it into a hopper had been buried or severely damaged by the outwash, and inside the dredge. This material is then fed into a revolvthe resulting protest led to a ban on hydraulic mining in ing, inclined screen drum where it is washed, sorted, and January 1884. Although the introduction of strict new reg- passed through sluice boxes and tables, where the gold is ulations on the disposal and storage of gravel resulted in collected. The remainder is carried out the back of the the ban being partially rescinded in 1893, the days of dredge on a conveyor belt and stacked in the creek bed hydraulic mining were essentially over. As it declined, its behind the dredge. Powerful winches are used to raise or extensive water supply system became the basis of the lower the bucket line and to manoeuver the dredge from early California power and irrigation networks (Hill, side to side in the creek valley using cables attached to 1926; Parmelee, 1934) anchors on the shore. The dredge pivots in an arc on a During the removal of the overlying Quaternary gravels, huge steel pin, or spud, which has to be lifted when the it was discovered that the modern drainage system was dredge advances for the next cut. Dredges were able to quite different in many places from the Tertiary pattern. mine profitably in gravel worth only 10 or 15 cents per Many of the Tertiary streams had been disrupted by rapid cubic yard because they operated with a small crew and uplift or buried under volcanic flows that preserved them were remarkably productive. from erosion. As a result, many buried gold-bearing Tertiary The success of dredge mining was due, in large part, paystreaks were discovered and mined underground using to improvements developed in California, including conventional timbered drifts. This work took place mainly manganese-steel lips on the buckets, the belt conveyor or between 1876 and 1890 until rising costs of labour and tim- stacker to dispose of tailings, electrification, and improved ber made it uneconomic. electrical equipment. The size of the dredges was steadily In order to extract the fine gold from the bed of the increased to permit deeper digging. Bucket sizes, which larger streams and rivers, a third type of industrial mining were 3.5 to 5 cubic feet in 1901, had increased to 13 cubic was developed. Early attempts to use steam shovels were feet by 1910. By 1934, buckets with a capacity of over 18 unsuccessful and the solution proved to be the dredge, cubic feet were used to mine at depths of more than 30 which was essentially a floating sluice box. The first prim- metres below creek level (Romanowitz & Young, 1934; itive prototype had been built about 1867 on the Clutha Green, 1977). Dredging ended in California in 1968 and is River in the Otaga gold district of New Zealand, which uncommon everywhere now because most large deposits had been discovered six years earlier. Plans for a larger of gold- or tin-bearing gravel have been mined, and model were brought to California by R.H. Postlethwaite, because of environmental objections (the valley floors take who had it built by the Risdon Iron Works in San a very long time to revegetate). It has been estimated that Francisco. His new dredge began to work on the Feather about 20 million ounces (645 tonnes) of gold were recovRiver near Oroville in the spring of 1898. By 1902, O.B. ered by dredging. 90

CIM Magazine n Vol. 2, NÂş 6

geology Although the Mother

Lode

was the largest and best known, Lode Mining

After marrying the daughter of The California gold belt was U.S. Senator Thomas Hart Benton one of the first major mineral in 1841, his family connections vein system was the most helped him establish a colourful districts in the world that was subjected to systematic and as a surveyor, explorer, and productive gold mining district in career intensive ‘modern’ geological pioneer military officer in research while mining was California, and purchase the California and, in fact, the underway, a process that 4,600-hectare ranch in 1847 for extended for over a century and $3,000. According to legend, he involved many of the pioneer bought it, sight unseen and was economic geologists in North astounded to discover that it was America. Studies of the distribunot on the ocean as he had tion and genesis of the deposits in three dimensions and assumed, but his disappointment was brief since he was petrological research of hydrothermal alteration were sigable to sell it in 1863 for a reported $6 million. In 1850, a nificant advances in the science. Cornish mining engineer, Captain James Rickard (Thomas It is important to remember how much was learned a Rickard’s grandfather), brought the first stamp mill to mere 50 years after Sir Robert Impey Murchison, the second California, a sectional type, to sample the Mariposa minerdirector of the Geological Survey of Great Britain (1855 to alization. 1871) who was considered the the English authority on The Mariposa discovery is situated at the south end of gold, had expounded his unscientific theories. For exama 190-kilometre long series of more or less continuous ple, he wrote that) deep mining for gold could never be gold deposits that occur within a belt approximately 1.5 profitable because it was the last metal created and would kilometres wide. It strikes northwesterly, parallel to the only occur, therefore, in the uppermost parts of any formaregional trend, and lies about 190 kilometres east of San tion; and that the main recipients of gold were the Silurian Francisco and 65 kilometres east of the Central Valley. and associated Paleozoic strata, together with the igneous Because of the great wall-like masses of quartz that crop rocks that penetrated them (see Part 18, June/July 2007 out at intervals, the idea developed in the 1850s that the issue, CIM Magazine). Since the geological study of the belt was a continuous quartz vein. It became known as California gold-quartz deposits was an important milestone the Mother Lode, a name first applied to veins near in the history of economic geology, a brief summary of this Placerville in 1851. The term Mother Lode is of Mexican complex subject is in order. Much of what follows is derivation, where each of the great silver mining districts derived from Knopf (1929) and Ash (2001). had its veta madre. When a journalist wrote in 1857 of a Although the Mother Lode was the largest and best great vein that traversed California from end to end, it known, the Grass Valley-Nevada vein system was the most reflected the optimism of the times. Because the gold productive gold mining district in California and, in fact, mineralization is not continuous and occurs in a considthe entire North American Cordillera. Though much more erable variety of deposits, the term Mother Lode system is restricted in area, it was relatively high in grade and was more appropriate. CIM mined to considerable depths. The Alleghany camp, though much smaller, was incredibly rich. The three References camps were all discovered within two years of the start of Ash, C.H. (2001). Relationship between ophiolites and gold-quartz veins in the North American the Gold Rush, a clear indication of how easy the goldCordillera, Bulletin 108. Victoria: British Columbia Geological Survey. rich veins were to find. Most of the early effort and investBöhlke, J.K. (1999). Mother Lode gold. In E.M. Moores, D. Sloan, & D.L.Stout, D.L. (Eds.), ment remained focused on the placer gold, however, since Classic Cordillera Concepts: A view from California (Special Paper 338). Boulder, Colorado: Geological Society of America. it was cheaper to mine and most of the newcomers knew next to nothing about lode prospecting or mining. As Green L. (1977). The Gold Hustlers. Anchorage: Alaska Norhwest Publishing Company. propectors and timber merchants continued to expand Hill, J.M. (1926). California gold production 1849-1923, Economic Geology, 21, 172-179. away from the creeks in search of new opportunities, their Holliday, J.S. (1999). Rush for riches: Gold fever and the making of California. Berkeley: University of California Press. incursion into the Yosemite Valley led to its protection Knopf, A. (1929). The mother lode system of California, U.S. Geological Survey Professional from development in 1864 and its creation as the first Paper 157. Washington: Government Printing Office. National Park in 1872.

the Grass

Valley–Nevada

entire North American Cordillera

The Mother Lode The first discovery on the Mother Lode was made on the Mariposa Grant (ranch), in Maricopa County, in August 1849. The ranch owner, John Charles Frémont (18131890), was born in Georgia, the son of a French immigrant. September/October 2007

Jenkins, O.P., & Wright, W.Q. (1934). California’s gold-bearing Tertiary channels. Engineering and Mining Journal, 135, 497. Parmelee, H.C. (1934). Eighty-six years of gold production in California: California gold continues to enrich the nation. Engineering and Mining Journal, 135, 483-485. Romanowitz, C.M., & Young, G.J. (1934). Gold dredging receives new impetus. Engineering and Mining Journal, 135, 486-490. Young, O.E. Jr. (1970). Western mining. Norman: University of Oklahoma Press.

mining The evolution of shaft sinking systems in the western world and the improvement in sinking rates and early 18t

Part 2—1600 to 1800: a skilled profession by Charles Graham, managing director, CAMIRO Mining Division, and Vern Evans, general manager, Mining Technologies International

was during this period of time that the first mining schools were opened in North America and the first technical societies for mining were formed. The first School of Mines in the United States was opened in 1864 at Columbia University in New York. In Canada, McGill University opened a mining engineering program in 1871. This was followed by the University of Toronto in 1892, and Queen’s University in 1893.

Also helping to spread the expertise involved in shaft sinking were the mining technical institutes. In Canada, the first of these to be formed was “The Gold Miners Club of Nova Scotia” in 1887. This organization was reorganized the following year as “The Gold Miners Association of Nova Scotia.” A number of other provinces also set up provincial mining associations in the 1890s. In 1898 the Canadian Mining Institute was formed. A horse whim

Shaft Sinking from 1600 to 1800— The Industrial Revolution One of the early improvements to shaft sinking techniques during this period was the introduction of horse whims for the removal of material from the shaft bottom. This development occurred in the late 17th and early 18th centuries. A well-designed horse whim could remove material from the shaft bottom many times faster than windlasses operated by manpower. The second improvement to take place during this period was the replacement of fire setting with drilling and blasting. It took three centuries after gunpowder became known in Europe before some resourceful miner, probably in the late 1500s, thought to stuff some into the cracks in rocks, ignite it, and let chemistry do the work. Eventually, miners realized that if, instead of relying on natural cracks, they used an iron tool to make a deep hole with a small outer opening that could be plugged to confine the combustion gases, they could break even more rock. It is thought that the first use of blasting with black powder in mines was in Hungary in 1627. For various reasons, such as high cost, lack of suitable drilling tools, and fear of roof collapse, the use of black powder in mining and shaft sinking did not spread rapidly, although it was generally widely accepted by 1700. One man swinging a four-pound hammer and holding his own drill rod was called single jacking. A two-man 92

team was called double jacking. One man would swing a hammer that might have a nine pound head while his partner held the drill rod and rotated it in the hole. In average rock, one man might drill eight inches in an hour, while a two-man crew might make two feet. On average, it might take 40 to 60 holes, 1 to 11/2 inches in diameter, to be able to blast away enough rock to advance an eight foot by six foot shaft two feet. Drilling these 120 feet of holes might use up to 400 pieces of sharpened steel and require the better part of a week. Sometimes a third man was added, also with an eight or nine pound hammer, to further increase the drilling speed. For almost 250 years, this method of drilling blastholes was improved upon only in the composition of drill steels and the manner of tempering them. Black powder was an extremely dangerous blasting medium. It had to be ignited either by flame or intense heat. The original fuse systems were thin lines of the powder itself or crude fuses made of straw, goose quills, paper, or other combustible material combined with sprinklings of powder. Burning speed of this type of fuse was extremely unreliable. The first reference to blasting in America is contained in a committee report on the purchase of the Simsbury Connecticut copper mine for conversion into Newgate CIM Magazine n Vol. 2, Nº 6

mining The shaft sinking system utilized at the end of the 17th century Drilling Rock breaking Mucking Permanent lining Protection from ground falls Hoisting Hoist rope Ventilation Water handling Water control Average advance rate

1100–1600 No Fire quenching Hand Wood Platforms in shaft Man-powered windlass Hemp Bellows Buckets None 3–4 ft per month

1600–1800 Double jacking Black powder Hand Wood Platforms in shaft Horse-powered windlass Hemp Bellows Buckets None 3–4 m per month

Prison in 1773. This report stated “by blasting rocks they had prepared a well-finished lodging room about 15 feet by 12 in the caverns and had secured the west shaft of the mine with a large door.” The Spanish had discovered large reserves of both silver and gold in both Mexico and Peru in the late 16th century. In Mexico, a number of substantial shaft sinking projects were carried out in the latter part of the 18th century. Alexander von Humboldt visited these shafts and was full of praise for them in his Essai Politique sur le Royaume de la Nouvelle Espagne. “Over the mother lode, Obregon opened the shaft known as El Santo Cristo de Burgos, 493 feet in depth and later the hexagon Nuestra Senora de Guadalupe, which reached a depth of 1,130 feet. Lastly he dug the octagonal general shaft called Senor San Jose, with a perimeter of 88 feet and an eventual depth of 1,685 feet.” Humboldt called this last shaft one of the greatest undertakings in the history of mining. A number of the improvements in shaft sinking techniques achieved during this period occurred near the end of

A Newcomen steam-powered water pumping engine September/October 2007

the period with the Industrial Revolution. The date often given for the start of the Industrial Revolution in Britain is 1760. It was after this date that steam replaced muscle power as the primary power source in the mining industry. As early as 1689, English engineer Thomas Savery created a steam engine to pump water from mines. The Savery engine was very small and lacked sufficient power to be of much use in the mining industry. Thomas Newcomen, a Cornish engineer, was developing a steam-powered machine at the same time as Savery. Newcomen’s first steam-powered water pump was erected at a coal mine in Staffordshire in 1712. It was much more efficient than the Savery machine and raised 120 gallons a minute over a distance of 153 feet. Thomas Newcomen developed an improved version shortly after, and by 1769, there were 120 Newcomen engines operating in English mines. James Watt made some improvements to the Newcomen engine and set up his own company building steam-powered engines. By 1800, the firm of Boulton and Watt had built 496 engines, of which 164 were employed for pumping water out of mines. Boulton and Watt also developed a steam-powered mine hoist, the first one of which was produced in 1784. Steam-powered mine hoists were to be in common use in the next period—1800 to 1900. Along with steam engines being used to power pumps, the Industrial Revolution brought about the requirement for coal to power steam engines and other industrial applications such as mills and furnaces. Because the higher grade coal was to be found underground, it was accessed by shafts. Many of these shafts had to negotiate a heavy waterbearing formation above the coal. To provide a waterproof shaft lining in these sections of shaft, cast iron shaft tubbing was used. In 1759, the first cast iron tubbing shaft lining was installed in a shaft in what is now Germany. Similar tubbing linings were installed in the Saskatchewan potash shafts in the 1960s and 1970s. Perhaps the most important reason for the improvement in sinking techniques during this period was the improvement in the status of the shaft sinker and miner alike. By the end of the 15th century, shaft sinking and mining in general had become a respected occupation. Particularly in

A typical tubbing ring 93

mining the area of modern-day Germany, the Czech Republic, and Slovakia, shaft sinking techniques improved greatly. Mining became a skilled and valued profession. As early as the Middle Ages, miners in many European countries were freed from paying certain taxes, were allowed to carry arms, and did not have to serve as soldiers. A miner was also free to choose the mine in which he preferred to work. In England, as early as 1201, organizations of miners were protected from outside interference by the King of England himself. The first eight schools of mines

Year of Foundation 1736 1756 1765 1770 1773 1782 1783 1792

Location

Remarks

Schemnitz, Austrian Empire Potosi, New Spain Freiberg, Saxony Berlin, Germany Saint Petersburg, Russia Vergara, Spain Paris, France Mexico City, Mexico

Moved to Miskolc, Hungary Now in Bolivia

Now Leningrad

An illustration from Die Bergknappen depicting shaft sinking

N s

shaft sinking is

Although published in the mid-1800s, the book Die Bergknappen, by Peter Heuchler, illustrates the typical life of a miner during the latter part of the 18th century. Eduard Heuchler (1802–1879) published a number of books describing the life of a miner in the Freiberg area during this period of time. Heuchler started his career as a mining boy but then studied at Freiberg Bergschule (School of Mines) and subsequently at the Freiberg Bergakademie (Mining Academy). Later, he became architect and professor of civil engineering at the Freiberg Mining Academy. It would also appear that by this time, shaft sinking was considered a separate occupation from mining. In a book published in 1708, The Compleat Collier; The Whole Art of Sinking, Getting and Working Coal-Mines, & c., As is Now Used in the Northern Parts, Especially Sunderland and Newcastle, the master sinker in the book speaks of using only experienced shaft sinkers. The reason for using experienced sinkers, as explained by the master sinker to the mine owner, are as follows: “Only experienced sinkers would be employed for if he [the sinker] be altogether unacquainted with this sort of sinking labour, he may lose his life by styth, which is a sort of bad, foul air or fume, exhaled out of some mineral, or partings of stone, and here an ignorant man is cheated of life insensibly; as also he, by his ignorance, may be burnt to death by a surfeit, which is another sort of bad air, but of a fiery nature like lightning, which blasts and tears all before it, if it takes hold of the candle… If $1,000 or more be spent in carrying down a pit or shaft almost to the coal expected, and then by an ignorant man should be blasted by a strong blast or surfeit, so that it may, as has been known, tear up your timber work and shatter the gins, and shake the stone-work or framework, so as to let in feeders of water, besides the destruction of the persons in the shaft, this would be a dismal accident with a witness, as well as loss of all labour and costs by ignorance.” There are a number of references to sinking using hand drilling and black powder. Monthly sinking rates varied between 3.2 and 4.5 metres per month. It appears that a satisfactory sinking rate was between 3.0 and 4.0 metres per month. This was a fourfold increase over the advance rates of the previous period. CIM

Universities and mining schools were opened where the techniques of shaft sinking and mining were taught and, in Bibliography general, these techniques improved greatly during the Chadwick, R. (1983). Copper: the British contribution, CIM Bulletin, 76, (858), 84–88. period. Habashi, F. (1997). The first schools of mines and their role in developing the minerals and The purpose opening of these& c., schools wasUsed to in the metals industries—Part 1. CIM Bulletin, 90, (1015), 103-114. Sinking, Gettingfor andthe Working Coal-Mines, As is Now graduate engineers capable of developing and operating the Heuchler, E. (1857). Die Bergknappen. Essen: Verleg Gluckauf GmbH. mines which had become essential to the prosperity of the J.C. (1708). The Compleat Collier: The Whole Art of Sinking, Getting and Working Coal Mines, & various countries in which the schools were located. Shaft c As Is now Used in the Northern Parts, especially about Sunderland and Newcastle. London: Printed for G. Conyers at the Ring in Little-Britain. sinking methods were an important aspect of the mining Morhard, R. (1987). Explosives and Rock Blasting. Maple Press Company. engineer’s education at this time because a successful shaft Paul, W. (1970). Mining Lore. Portland: Morris Printing Co. sinking project was essential in the development of mining Preito, C. (1973). Mining in the New World. New York: McGraw–Hill Book Company. properties. 94

CIM Magazine n Vol. 2, Nº 6

metallurgy

History of metal castingâ&#x20AC;&#x201C;Part 2 by Fathi Habashi, Department of Mining, Metallurgical, and Materials Engineering, Laval University

A variety of forms of ancient Chinese bells. The barrelshaped bell originated in the Chou Dynasty (1122-255 BC).

September/October 2007

Casting of Bells The development of the bell-casting skill ushered in the Bronze Age around 3,000 BC. Bells were frequently buried in the tombs of Chinese royalty and noblemen, but not in ancient Egyptian tombs. As metal-casting techniques improved, the size of bells increased; bells weighing many tonnes were suspended in front of temples and palaces. Both drums and bells announced the time of day and warned of fires, floods, or an approaching enemy. The ancient Chinese were also successful in controlling the pitch of bells by controlling the relationship between size and thickness. Chinese bells were cast in a variety of forms. In addition to stationary bells, small ornate hand bells with clappers were used in temple ceremonies. These are rung by Buddhist and Taoist priests during services, in conjunction with cymbals, gongs, and other instruments. It was believed that bells could cast or remove a spell and increase fertility. Muslims and Jews have refrained from using bells. Muslims associated bells with pagan rites and beliefs, while in Judaic practice, the ramâ&#x20AC;&#x2122;s horn and the metal trumpet have always been used. The casting of large temple bells in China reached its zenith during the Ming dynasty (1368-1620). The largest such bell, cast during the reign of the Emperor Yon-gle (1403-1424), weighed 52 tonnes. Because bells were utilized so much in pagan cultures, Christendom initially disapproved of them. It was not until the second century that the bell was adopted as the symbol of preaching the gospel and used as a call to assemble. The popularity of bells increased enormously in the ninth century after being promoted by Charlemagne. One of the earliest works describing the casting of bells and the problems of its harmonics was written by the Benedictine monk Theophilus Presbyter in the latter part of the eleventh century. This work and subsequent treatises indicate the concern for proportions and the proper mixture of copper and tin for producing the best ring, and how to change a bellâ&#x20AC;&#x2122;s pitch by varying its dimensions and wall thickness. Since the fifteenth century, it has been possible to influence the musical tone of the bell through precise design of its form. When larger bells were required, it became imperative to cast them in the church yard to eliminate their transport. 95

metallurgy The Casting Method For casting large bells, the moulds were formed in deep pits directly in front of the furnace to simplify the pouring process. The process first called for the preparation of the core, usually formed with vertical sweeping, which consisted of a top and bottom bearing, the latter supporting a spindle on which the strickel board was mounted. The board was shaped to the interior contour of the bell. Loam, based on a brick interior, was plastered on until the board could be revolved with clearance. A new board was placed on the spindle, shaped to the outer contour of the bell. Clay was again added until the outer shape was attained. Rods were placed in the mould for reinforcement and the entire mould baked. When the bells were cast, the molten metal was directed through a trough from the furnace into the gates. After cooling, the castings were removed. Famous Bells The Peace Bell, which weighs more than a tonne, is located in Peace Park in central Hiroshima. It is rung by visitors as part of their wish for peace. Just outside Sofia, Bulgaria’s capital, is the Bell Garden containing a large number of bells donated by different countries.

The Liberty Bell In 1751, the Pennsylvania Assembly ordered a bell from a foundry in England to commemorate the 50th anniversary of William Penn’s Charter of Privileges, Pennsylvania’s original Constitution, which speaks of the rights and freedoms of people. The bell, however, cracked on arrival. It was then given to a Philadelphia foundry for recasting. When the new bell was raised in the belfry, apparently nobody was pleased with its tone and so it was sent back to the foundry for recasting. The new bell, weighing 2,080 lb, cracked in 1846. It achieved special status when abolitionists adopted it as a symbol for the movement. Big Ben After a fire destroyed the Palace of Westminster, the seat of the British government, Parliament decided in 1844 that the new building should incorporate a tower and clock. The clock was completed and the bell was cast in 1858; it weighed 13.76 tonnes. The Parliament had a special sitting to decide on a suitable name for the great bell. During the debate and amid the many suggestions that were made, Sir Benjamin Hall, a large and ponderous man known affectionately in the House as “Big Ben,” rose and gave a long speech on the subject. When he finished, a wag in the chamber shouted out: “Why not call him Big Ben and have done with it?” The house erupted in laughter and the name ‘Big Ben’ had been adopted.

Left: The Liberty Bell. Top right: Casting of a large bell: 1) arbor brace; 2) bearing board; 3) strickel board; 4) spindle; 5) brick work of core; 6) loam core face; 7) clay and wax bell pattern; 8) bell pattern; 9) cope; 10) pouring gate; 11) supporting rods; 12) metal profile block; 13) baking fire. Bottom right: The Peace Bell. 96

Russian Bells After his marriage in 1472 to Sophia (Zoe) Palaeologus, niece of Constantine XI, the last Byzantine emperor, Ivan III took interest in the development of the Kremlin. In 1474, he invited a group of skilled workers from Italy to introduce the Western techniques of casting. By 1533, an 18-tonne bell was cast in the Kremlin. The seventeenth century was the greatest period of Russian bell CIM Magazine n Vol. 2, Nº 6

metallurgy casting. In Moscow and its suburbs there were about 4,000 churches, each having up to as many as ten bells. On Paschal night, it was customary for the bell in the Tower of Ivan the Great to strike the first sound at midnight, followed by the ringing of the bells of all the other churches, announcing the Resurrection of Christ.

The state

confiscated church bells and many were sold

Other Bells The oldest bell in Korea was cast in 723 AD in the Shilla Dynasty. King Sung-Tug’s Great Bell was cast in 771 AD in the Chosen Dynasty and weighed about 22 tonnes; it is on display at the National Museum in Seoul. Korean bells were struck by wooden hammers. The Great Bell of Dhammazedi in Burma (now Myanmar) may have been the largest bell ever made. It was lost in a river after being removed from a temple by the Portuguese in 1608. It is reported to have weighed about 300 tonnes. One of the largest bells still in existence may be the Mingun Bell, located in the Mingun temple, Myanmar, which weighs 90 tonnes. The bell in St. Stephen’s Cathedral in Vienna was cast in 1711 from the metal of cannon iron balls used by the Turks during the siege of the city in 1683; it weighed 22.5 tonnes and was destroyed during World War II when the cathedral was damaged by fire. The new bell weighs 21.4 tonnes, was cast from the metal of the old bell in 1951 in the St. Florian foundry in Upper Austria, and was ceremonially transported from Linz to Vienna. It is popularly called “Pummerin” because of its deep tone. It is the largest bell in Austria and the second largest in Europe, after the one in Cologne cathedral.

The giant bell on display in the Moscow Kremlin is actually the last of the four bells that bore the nickname “Tsar-Kolokol” or “Tsar-Bell.” It was cast in 1599 during the reign of Boris Godunov and weighed 35 tonnes; however, it fell during a fire near the middle of the seventeenth century. Its metal was used in the casting of a second bell in 1654 that weighed 128 tonnes; however, it Bell Museum cracked as well and fell into pieces when first tested. It In 1599, Bartlme Grassmayr established the Bell was again re-cast a year later, this time weighing 160 Foundry in Innsbruck, Tyrol. His casting expertise was contonnes, but another fire caused it to fall down and crack tinually improved and handed down from father to son. in 1701. In 1730, Empress Anna Ivannovna gave the The foundry museum relates the history of bell casting. CIM order to re-cast the remains of this bell into a new 220tonne bell; however, while it was in the pit, the scaffolding caught fire in 1737 and the bell fell. People started to pour water over it and as a result, the bell cracked and a big chunk fell off. By the mid-eighteenth century, the expansion of Russia to the east caused an increase in the demand for church bells in newly developing villages, towns, and cities. Also, a new bell industry had emerged, that of small bells for horse carriages. Farmers along the new travel routes to Siberia started to cast horse bells in their farmyards. At annual fairs, hundreds of bells were put on display, suspended from scaffolding so that the customers could ring the bells and buy the ones to their liking. During World War I, over a hundred bells were sent from churches in the Baltic provinces and Poland to save them from the advancing Germans. Russian bell founding ended after the October Revolution in 1917. The state confiscated church bells and many were sold. Left: cope and core; centre: sweeping cope of bell mold in pit; right: furnace. September/October 2007

AN ONLINE MEMOIRE

MINING IN CANADA a personal history This is the true story of one man’s arrival in Canada, his experiences stemming from a career in the Canadian mining industry, with vivid descriptions of people, places, and technologies. The author, Peter Nowosad, has been retired since 1986 and has travelled extensively with his wife Michaelene. Nowosad is also the author of With Ukraine in my Heart, written in Ukranian and published in 2005.

Mining in Canada: a personal history will be published on the CIM website as a series of articles beginning this September.

My roommate’s name was John. He had begun working at the mine around the same time as me. Canadian born, John had worked for the Canadian National Railway. He met some miner and was told about the ‘big money’ in it. He was also told to tell the mining company that he had many years’ experience working in mines; this way he would get a job that paid a bonus. “Bonus” in the mine was what one would get over the hourly rate. It was a set price in the contract, for example, one ton of ore (muck) equaled $10 and wages for eight hours was eight dollars, so the extra $2 was known as the bonus. When John and I came to work that first day we were interviewed by the mine superintendent. I told him that I had never worked in a mine and John introduced himself as a miner; he was sent with one man to pull chutes. When we returned to the living quarters we talked about our day in the mine. That was when he told me he had never worked in a mine. He was very disgusted and cursed the man who had told him about working in a mine, about how good it was and the good money he would make. He was hysterical, yelling about how he had given up fifteen years of seniority and that S.O.B. had lied to him about how nice it was in the mine. John did not stay long. When he quit, I was left alone in the room. When I started working at the Pioneer Mine, I had no money. The miners in the bunkhouse were drinking and some of them had invited me to join them for a drink. They knew that I was broke but still bought me drinks. When I got my first pay, I returned their kindness with a bottle of Scotch. I went with some fellows by taxi to Bralorne to the hotel beer parlour and liquor store. It was my first visit to such a store in Canada. A bottle of White Horse scotch was $3.65. I remember thinking this must be a mistake as the same bottle in Scotland cost 3 pounds and 5 shillings (65 shillings) and in 1951 it was still rationed. At that time there was little on display at the liquor store and to purchase liquor you had to fill out a slip of paper. When I approached the clerk’s desk I asked him how many bottles I was allowed to buy. He looked at me and said: “A whole case if you wish.” In my head I kept thinking that this was not possible, it must be a mistake. I bought six bottles of White Horse and went home to tell my friends, who upon seeing all my whiskey and hearing my story, had a good laugh.

YOUR

GUIDE

TO INDUSTRY KNOWLEDGE Peer reviewed by leaders in their fields CIM Bulletin Abstracts 100

Effect of biological gas generation on oil sand fine tailings C. Guo, R.J. Chalaturnyk, J.D. Scott, and M. MacKinnon

101

A new approach to waste dump site selection according to the fuzzy decision-making process K. Shahriar and F. Samimi Namin

102

Mucking efficiency in open pit blasting P. Segarra, J.A. Sanchidri谩n, J.J. Montoro, and L.M. L贸pez

103

Optimization of cable bolting pattern for cut-and-fill stopes in a manganese mine using observational, empirical, and numerical modelling approaches M.R. Saharan, A.K. Chakraborty, A. Sinha, N.K. Babar, H.R. Kalihari, and C.P.N. Pathak

104

Data mining, mining data: energy consumption modelling S. Dessureault

106

Exploration and Mining Geology Journal Volume 16, Numbers 1 and 2

107

Canadian Metallurgical Quarterly Volume 46, Number 2

Complete CIM Bulletin papers are posted in the online Technical Paper Library

www.cim.org September/October 2007

executive summaries Effect of biological gas generation on oil sand fine tailings

With the increases of microbial activity and

C O A L

A N D

O I L

S A N D S

The Mildred Lake Settling Basin (MLSB) is the largest disposal site for mature fine tailings (MFT) at the Syncrude Canada Ltd. oil sands plant. Over the past years (since 1996), there has been a marked change in the densification behaviour of MFT in the MLSB. Methane-producing microorganisms, known as methanogens, have become very active, and large amounts of biogas (mainly methane) have been produced. In certain regions within the MLSB, gas bubbles are released to the water surface of the tailings pond. Continued field monitoring of the MLSB has provided convincing evidence of the rapid densification process (rapid water drainage from the tailings) at the area with intense microbial activity. This phenomenon contradicts the consolidation models for MFT developed over the past 20 years. This rapid densification has caused pumping challenges in the transfer of fine tailings from the Mildred Lake Settling Basin for the creation of composite tailings. It may also have potential positive effects in accelerating the reclamation of the oil sands fine tailings. A field and laboratory research program was performed to study the mechanism leading to the rapid densification phenomenon. Systematic field investigations were performed to determine the distribution and characteristics of the rapidly densified MFT. A number of small-scale column tests were carried out to observe the gas evolution and to measure the changes of some geotechnical parameters under different microbial activities. Also, a series of gassy MFT densification tests were conducted to study the mechanism of the rapid densification of the MFT under microbiological activity. A review and discussion of the research program is given and some results of the field investigations and small-scale column tests are presented in the paper. Field observations were used to map the gas bubble distribution on the water surface of the MLSB. Based on the presence and the relative number of the gas bubbles and the ongoing gas bubble release rate, two zones with different microbial activities were determined. It was found that the microbial activity at the southern part of the tailings pond was more active than that at the northern part. Also, steel

Profiles of final solids contents in small-scale columns

plate penetration tests were used to investigate the densification properties of the MFT at the tailings pond. These field tests showed that rapid densification has progresed the most in the southern region of the pond. Five small-scale column tests were conducted to study the influences of microbial activity on MFT densification. Columns 1, 3, and 5 were incubated at 25ÂşC room temperature and with 0, 0.52 g, and 1.52 g sodium acetate amendments per litre MFT, respectively. Columns 2 and 4 were placed at 4Â°C room temperature with 0.52 g and 1.52 g sodium acetate amendments, respectively. For columns 1, 3, and 5, with the increase of acetate amendments, total gas generation volume increased. However, there was no visual gas generation in columns 2 and 4 even after different amounts of sodium acetate were added. The figure shows the solids content profiles in the columns (the initial solids contents were the same) at the end of testing. With the increases of microbial activity and biogas generation in columns 1, 3, and 5, the solids contents at the end of testing also increased. The field investigations and smallscale column tests demonstrated that microbial activity and gas generation and migration can help densification of the MFT. The in-depth mechanism of the rapid densification of the MFT under microbial activity was further studied by gassy MFT densification tests.

C. Guo, R.J. Chalaturnyk, J.D. Scott, Department of Civil and Environmental Engineering, University of Alberta, Edmonton, Alberta, and M. MacKinnon, Syncrude Canada Ltd., Edmonton Research Center, Edmonton, Alberta 100

CIM Magazine n Vol. 2, NÂ° 6

executive summaries A new approach to waste dump site selection according to the fuzzy decision-making process

E N G I N E E R I N G

The decision theory offers a rich collection of techniques and procedures to reveal preferences and to introduce them into models of decision. Decision theory is not concerned with defining objectives, designing the alternatives, or assessing the consequences; it usually assumes they are known. Given a set of alternatives, a set of a consequences, and a correspondence between those sets, decision theory conceptually offers simple procedures for choice. Many methods of decision-making may be considered, such as: ELECTRE, MAUT, PROMETHEE, Multiple Objective Mathematical Programming, among others. The focus of this paper is on the inspection of suitable criteria for finding a waste dump site and the presentation of a method, based on the Yager method. This method is one of fuzzy multiple attribute decision-making (FMADM). The aim of FMADM is to obtain an optimum alternative that has the highest degree of satisfaction for all of the relevant attributes. This technique has been used to solve selection problems of decision makers in different areas such as politics, town planning, communication, and mining engineering.

imately 280 km away. The mentioned complex is situated on the Sanandaj-Sirjan metamorphic zone, which has played an important role in the tectonic development of Iran’s plate margin. Iron ore has been mined for at least the past 900 years. Some historians believe that mining activity was carried on in the district of study as far back as 2,500 years ago, during the time of the great Persian Empire at Persepolis. Modern exploration activities, predominant since 1974, have focused on six magnetic anomalies in the district. For ten years, Area 1 ore has been mined and processed in order to achieve recovery of dry as well as wet concentrate. The proven reserves of Area 1 are about 265 million tonnes, whereas nearly 100 million tonnes have already been mined. About 5 km north of Area 1 is the Area 3 deposit (Goharzamin Mine-GZ). Deposit No. 3 is located approximately 1,728 m above sea level in an area of planar desert topography. The landscape is interrupted by ridges and mesas of folded and uplifted metamorphic rocks of Paleozoic and Mesozoic ages, which rise 300 to 400 m above the surrounding plain. The general shape of Deposit No. 3 GEG is generally semi-lenticular. Overall, its dimensions are 2,200 x 2,400 m. The maximum vertical thickness of the orebody ranges from 80 to 100 m and is 40 m thick in the centre. This orebody has, and continues to be, explored by core drilling techniques, whereby the 28,000 m of proven reserves hold 586 million tonnes of ore, and about 200 million tonnes can be mined via open-pit mining.

R O C K

During the process of open-pit mine development, some sites are considered for dumping of surface soils and for waste disposal. Mine spoils include overburden, waste rock, low-grade materials, and tails from the process plant, each of them having their own unique characteristics. For each type of overburden, waste rock, low-grade materials, and process tail, separate storage sites are considered so that it becomes possible to transport or reuse the individual items. Parameters that affect waste dump site selection are environmental, operational, and social factors. Decision-making is commonly explained as a selection process, in which the best alternative is chosen in order to reach a goal. Decision theory, as a specialized field of operation research (OR), is the process of specifying a problem or opportunity, identifying alternatives and criteria, evaluating alternatives, and selecting a preferred alternative. The Society for Judgment and Decision Making (SJDM) defines decision theory as: “… a body of knowledge and analytical techniques of different degrees of formality designed to help a decision-maker choose among a set of alternatives in light of their possible consequences.”

In order to determine initial alternatives to selecting the best dump site, existing maps of the GZ mine were studied. Analysis of these maps allowed for four locations to be selected for waste dumps and, in accordance with FMADM, the most suitable one was chosen. At the end of the evaluation, the waste dump will be located north of the pit at a distance of 200 m from the crest of the pit. The dump will be around 353 Mt of waste and overburden by the end of the first 15 years of mining. The dump will have a considerably higher capacity suitable for storing waste from future mine expansions.

The iron ore district of Gol-E-Gohar (GEG) is located about 60 km southwest of the city of Sirjan, in the Kerman Province of the Islamic Republic of Iran. This complex lies at a point approximately equidistant from the cities of Bandar Abbas, Shiraz, and Kerman, each of these points being approxK. Shahriar and F. Samimi Namin, Amirkabir University of Technology, Tehran, Iran

September/October 2007

101

executive summaries

R O C K

E N G I N E E R I N G

Mucking efficiency in open pit blasting

Mining operations are under constant pressure when it comes to optimization and cost reduction. Drilling and blasting, though by themselves comprise a minor percentage (about 15%) of mining costs, have a strong influence on the downstream operation costs, as they are responsible for the fragmentation of the blasted rock. Strong emphasis has been put on the fragmentation of the muckpile (e.g., the mine-tomill approach), despite the difficulties for measuring it, in order to establish its relation with downstream processes. One such process is the digging and loading of the muckpile. An alternative analysis is followed in the present work, focusing on directly monitoring the excavator’s efficiency as a quality parameter of the blasting operation. Such an indicator, though influenced by external factors like the operator’s skills, is a measurement of the rock movement and fragmentation achieved by the blast; together with hauling they encompass about 60% of mining costs (ore processing costs excluded). A literature survey shows this topic as challenging due to the lack of models to guide drilling and blasting towards a specific mucking productivity. This is contrary to what happens with fragmentation, where models exist that relate drilling and blasting parameters with the fragment size distribution characteristics. Powder factor and delay between rows appear to be the key parameters, although there are some contradictory indications regarding the influence of the powder factor. The excavators’ efficiency, given as the mucking rate and bucket payload, is investigated in this paper in terms of the influence of the blasting parameters on it. Quantitative data are given for 11 blasts in an open pit iron ore mine. The predominant rocks in the blocks, itabirite and hematite, are described by point-load strength and density measurements from about 40 samples collected in the bench levels where the blasts took place. Blasting parameters, drilling, charging, and timing were carefully monitored in all blasts. ANFO was used in three blasts, ANFO/emulsion blend in one blast, and

watergel in seven, with a range of powder factor between 0.98 and 1.45 kg/m3. The explosive performance is assessed from in situ VOD measurements. The explosive energy has been rated as heat of explosion and useful work to expansion pressures of 100 and 20 MPa, considering both full and partial reaction. The non-ideal energy delivery has been obtained from the VOD measurements. Rope shovels and front-end loaders were used to dig and load the blasted rock into trucks. Their work is assessed by in situ measurements of the time elapsed from the moment in which the excavator dumps the first bucket until the 240 t truck is filled, and of the number of buckets required. From those, the mucking rate (bank cubic metres mucked per hour) and the mean bucket load (bank cubic metres loaded in each bucket operation) are determined. The data measured correspond to samples of 6% to 22% of the total muckpile mass. The mean bucket load is independent of the blasting parameters, whereas it is sensitive to variations in the dipper size. Besides the relation with the mean bucket load, the mucking rate has been found to be positively correlated with the explosive energy; other blasting parameters also correlate with the mucking rate, though their influence can be explained in terms of their usual variation in blast design practices driven by explosive energy variations. No significant correlation of the mucking rate with the rock properties has been found. The analysis of the data, combined with other published data, suggest a non-monotonic relation of the mucking rate with the powder factor, or amount of explosive per unit volume of rock. An acceptable explanation of the experimental mucking rates can be obtained with quadratic or with bell-shaped functions, if powder factor is given in the form of explosive energy loaded above grade per unit rock volume (energy powder factor) rather than in the classical form of explosive mass per unit volume. Of the different explosive energy ratings, the useful work in a partial detonation regime appears to be the best suited to group the mucking rate data, especially when the cut-off pressure is 100 MPa. Mucking rates increase with the energy powder factor above grade towards a maximum, beyond which an additional increase of the powder factor does not result in improved mucking rates.

P. Segarra, J.A. Sanchidrián, Universidad Politécnica de Madrid–E.T.S.I. Minas, Madrid, Spain, J.J. Montoro, MAXAM International, Madrid, Spain, and L.M. López, Universidad Politécnica de Madrid–E.T.S.I. Minas, Madrid, Spain 102

CIM Magazine n Vol. 2, N° 6

executive summaries Optimization of cable bolting pattern for cut-and-fill stopes in a manganese mine using observational, empirical, and numerical modelling approaches

September/October 2007

Safety factor contours for 15 m stope width in lower RMR values of ore and rock

ing into consideration the lower bound RMR values. Further, the aforementioned results have also been compared with field observations. The mine has already completed an experimental stope design and construction, using an open stoping operation. The roof (crown pillar) of this stope has been standing without any sign of failure for the past six months (i.e., six months subsequent to the completion of the stopping). Also, the measurements from hanging cables in the cutand-fill stopes further indicate that the cables are not carrying a load over 5 t.

E N G I N E E R I N G

The orebody in Chikla Mine, particularly between the -70 and -170 ft levels, displays two systematic joint sets: one has an average spacing of 2.5 m, with its strike direction along N60°E and dipping almost vertical due east; and the other has an average spacing of 2.0 m, with its strike direction along N80°W and dipping almost vertical due south. Schistocity planes, which are horizontal and sub-horizontal, form the third plane of weakness in the orebody. Such planes exhibit a spacing varying from 5 to 30 cm. All these weakness planes are devoid of any infillings, have rough, planar, and wavy surfaces, and are very tight in nature. The orebody has an average uniaxial compressive strength (UCS) value of about 120 MPa, as found from rebound values of a standard Schmidt Hammer. Results of preliminary rock mass characterization tests indicate that the orebody has Barton’s Q value ranging from 16 to 38 (good rock mass), while Bieniawski’s RMR values range from 80 to 87 (very good rock mass). The host rock has been determined to be weaker than the orebody with Q values ranging from 5 to 8 (fair rock mass) and RMR values ranging from 49 to 63 (fair rock mass). Based on these classifications, it is observed that the orebody of Chikla falls under the engineering categories of “no supports require” and “spot bolting.” Numerical modelling results are in line with the results of rock mass classification, which indicate skin failures at roof level for the cut-and-fill stopes, tak-

R O C K

Results of scientific investigations on the optimization of the rock reinforcement system (cable bolting) at Chikla Mine, MOIL, India, are presented in this paper. The mine is implementing a systematic roof support program that primarily contains cable bolting in a 2.0 m square grid pattern. The fully grouted cables are 16 mm in diameter and 12 m in length. Additionally, 20 mm diameter, 1.5 m long, full column grouted rock bolts in the centre of the cable bolting grid are also implemented for the manganese orebody with widths ranging from 9 to 24 m (average width 12 m) and a dip angle of 55° to 90°. Manganese ore mineralization, primarily in the form of braunite and gondite minerals, is flanked by muscovite schist/quartz muscovite, and schist in Chikla Mine, MOIL. The depth of workings is in between 40 and 70 m from the surface, and a cut-and-fill stoping operation is being practiced to produce average stope widths of 12 m. Field and laboratory investigations are carried out to obtain empirical rock mass classification parameters and input parameters for numerical modelling. The safety factor contouring method, using a failure criterion suggested by Sheorey (1997), is used for plain strain numerical modelling in a general purpose finite difference method-based numerical modelling code— FLAC3D.

It is concluded that the practice of central-grouted rock bolting may safely be discontinued as it appears to be an overly conservative design. Moreover, the grid of cable bolting may be safely increased from 2.0 m x 2.0 m to 2.5 m x 2.5 m before adopting the category of “no supports require.” It has been suggested to mine management that the above results should be verified from a rock mechanics instrumentation program covering instrumented cable bolts, stress metres, and strain bars in an experimental stope, prior to the adoption of the “no supports require” category.

M.R. Saharan, A.K. Chakraborty, A. Sinha, Central Mining Research Institute (CMRI), Dhanbad, India, and N.K. Babar, H.R. Kalihari, and C.P.N. Pathak, Manganese Ore India Limited (MOIL), Nagpur, India 103

executive summaries

I N N O V A T I V E

M I N I N G

T E C H N O L O G Y

Data mining, mining data: energy consumption modelling As increasingly more data tracking production and business processes continue to be collected, mines are facing a problem seen in other businesses: being data-rich while information-poor. As additional efforts and technology are placed at developing even more information sources, a new technological focus should emerge: how to concentrate data into information; analyze information sufficiently to become knowledge; and finally, act on that knowledge (data→information→knowledge→action). New technologies, developed in non-mining industries, have begun to redress some of these data-rich–information-poor issues, specifically data warehousing (the enabling technology) and data mining (the analytical technology). An approach to develop applications and skills, wherein data is transformed into action, continues to be performed and tested at the Mining Information Systems and Operations Management (MISOM) lab at the University of Arizona. The data-to-action approach was exercised in the development of an energy consumption model (ECM), in partnership with a major US-based copper mining company, two software companies, and the MISOM lab, funded by the U.S. Department of Energy (DOE). The project, called Infrastructure for Integrated Data Environments and Analysis (IIDEA) for Mining and Processing Systems, began as a oneyear pilot study that used a copy of the 1.2 Terabyte corporate data warehouse containing all records from every major information system (IS) used at all the operations of the partner mining company. The data-to-action approach begins by integrating several key data sources using data warehousing techniques, namely the highly granular fleet management system (FMS, namely Dispatch®) and all cost transactions for the past four years from the enterprise system (ES, namely Ellipse®). The project began by increasing the existing level of integration and data cleaning. The information step involved the creation of online analytical processing (OLAP) cubes to investigate the data and identify a subset of several million records. Data mining algorithms, mostly neural-network based, were applied using the information that was isolated by the OLAP cube. The data mining results showed that traditional cost drivers of energy consumption, namely tons and distance for diesel, and tons for kWhrs, are poor predictors. A comparison was made between the traditional means on predicting energy consumption and the prediction formed using data

Predicted versus actual diesel fuel by week using six variables, such as truck class and time of year.

mining. Traditionally, in the mines for which data were available, monthly averages of tons and distance are used to predict diesel fuel consumption. New information technology can be used to incorporate many more variables into the budgeting process, whereby far more accurate predictions can be made. The figure shows the predicted (using NN) versus actual using neural networking and includes other variables such as distance travelled up or down, time of year, and truck class, predicted by week. The data mining results are far closer to actual than when using traditional means of prediction. The final step in evolving data into action is using the newly created knowledge. The most valuable knowledge will not generate real value unless it is acted upon. Other business sectors were transformed by IT only once workflows were re-engineered to take advantage of the new capabilities. The project undertook a deliberate work and data-flow mapping of the budgeting process at the mines under study. An idealized workflow was then engineered considering data availability, technical skills of the local personnel, and cultural considerations. The ECM was developed to help mine planners improve the prediction of energy use in the materials handling system. Business management processes, such as improvement initiatives and mine engineering, can be greatly improved through more data integration, measure development, and workflow analysis. This has been the experience in other industries such as in retail and marketing. The enabling technology is now available. What remains is solidifying and deploying data to action procedures.

S. Dessureault, University of Arizona, Tucson, Arizona 104

CIM Magazine n Vol. 2, N° 6

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105

emg abstracts

Exploration and Mining Geology Journal Volume 16—Numbers 1 and 2 Geophysical Case Study of the Gallen Deposit, Québec, Canada L.Z. Cheng, Université du Québec en Abitibi-Témiscamingue; R.S. Smith, Fugro Airborne Surveys; M. Allard, Noranda Inc., Division de l’Exploration; M. Chouteau, École Polytechnique de Montréal, Département des Génies civil, géologique et des mines; P. Keating, Geological Survey of Canada, Natural Resources Canada; J. Lemieux, Fugro Airborne Surveys; M.A. Vallée, Fugro Airborne Surveys; D. Bois, Université du Québec en Abitibi-Témiscamingue; and D.K. Fountain, Fugro Airborne Surveys As part of a larger research program, a number of MEGATEM airborne electromagnetic (EM) test flights were flown over the Gallen massive sulfide deposit in northwest Quebec. A particularity of this test site is that a major part of the ore body was extracted before the MEGATEMII survey. Therefore one of the purposes of this study was to verify the ability of the system to detect the remaining massive sulfides below the water in the open pit. The open pit is also surrounded by a metallic fence, and a power line is present in the vicinity. A large part of the case study involved accounting for the impact of infrastructure and acidic water on the survey, which will help in the interpretation of airborne EM responses in complex exploration situations. Stratigraphic and Structural Constraints on Limestone Exploration: a Case Study from Northern New Brunswick, Canada I. Dimitrov, Department of Geology, University of New Brunswick, and S.R. McCutcheon, Geological Surveys Branch, New Brunswick Department of Natural Resources Industrial-grade limestone is found in both the Lower Silurian La Vieille Formation and Upper Silurian LaPlante Formation of the Chaleurs Group in northern New Brunswick. Currently, between 150,000 and 200,000 tonnes of limestone are produced per year from the proximal facies of the LaPlante Formation at the Sormany quarry of Elmtree Resources Ltd., located west of Bathurst. A variety of prospecting techniques was used to locate new limestone resources, including geological mapping, airborne and ground electromagnetic surveys, and satellite remote sensing. Clastic rock units above and below the LaPlante Formation have distinctive properties that help to trace the intervening limestone along strike. Because of water-saturated glacial cover, thick vegetation, and the small size of targets, airborne geophysical methods did not prove effective in delineating limestone beds, but aeromagnetic surveys helped map the underlying clastic unit. The remote-sensing data and especially highresolution digital elevation models helped in identification of karst topography related to limestone. Production Trends and Economic Characteristics of Canadian Gold Mines M. Doggett, Department of Geological Sciences and Geological Engineering, Queen’s University, and and J. Zhang, Natural Resources Canada All 231 Canadian primary gold mines that produced from 1946 to 2004 were analyzed with respect to their production and economic characteristics. Trend analysis revealed that the average annual capacity of Canadian gold mines as measured by ore processed or gold produced has increased over time. Conversely, the average grade of gold mines has decreased over time. Each historical mine in the database was evaluated on the basis of a set of economic and technical assumptions to determine if it would be economic to develop today. Based on net present value using an 8% discount rate, only 103 of the 231 mines were determined to be economic. About 80% of the uneconomic mines had less than 10 t of contained gold, and 63% had less than 5 t. It was concluded that these small mines would not be viable today due to a combination of real capital cost increases and more stringent permitting and environmental regulations. The implication is that future gold supply in Canada will hinge on the discovery and development of a new generation of Excerpts taken from abstracts in EMG, Vol. 16. larger mines. Given that only one giant mine has been discovered Subscribe—www.cim.org/geosoc/indexEMG.cfm in the past 20 years, it seems likely that gold output will decrease in the future. 106

CIM Magazine n Vol. 2, N° 7

cmq abstracts

Canadian Metallurgical Quarterly Volume 46—Number 2

Liquid Film Migration in a Cu-5 At.% Sb Alloy U. Chintababu, V.R. Chary, and S.P. Gupta, Department of Materials and Metallurgical Engineering, Indian Institute of Technology Liquid film migration was studied in a Cu-5 at. % Sb alloy by both down-quenching and up-quenching from the initial liquation temperature in the two-phase, α + liquid, field. The time and temperature dependence of the migration distance and the rate of migration were studied in the temperature range of 440 to 760°C. A near parabolic growth behaviour was observed. The coherency strain energy as calculated from the composition of the trailing grain was observed to be one order of magnitude higher than the interfacial energy of the cylindrical liquid film. The total chemical free energy was calculated to be one to three orders of magnitude higher than the coherency strain energy. A substantial part of the total chemical free energy is used for volume diffusion in front of the liquid film in the receding grain. The diffusion coefficients and the activation energy calculated at 730 to 760°C correspond to those of the diffusion of Sb in liquid Cu. The activation energy is close to those of self diffusion in liquid Sb and Cu. Dynamic and Metadynamic Recrystallization of a Martensitic Precipitation Hardenable Stainless Steel A. Momeni, S.M. Abbasi, and A. Shokuhfar, Advanced Materials Research Laboratory, Mechanical Department, KNT University of Technology The dynamic (DRX) and metadynamic (MDRX) recrystallization behaviour of an as-cast precipitation hardenable stainless steel has been investigated by conducting continuous and interrupted hot compression tests in the temperature range of 900 to 1150 °C and under strain rates of 0.001 to 1 s-1. The effects of temperature and strain rate and the Zener-Hollomon parameter (Z) on the flow behaviour and peak strain were investigated by continuous tests and the equation εp = 4.3 x10-4 Z0.14 was proposed. The kinetics and fractional softening of MDRX were found to increase with temperature and strain rate. The Avrami exponent n was determined as 0.5 and the equation X = 1 – exp [-0.693(t/t0.5)]0.5 was proposed. From the variation of t0.5 with deformation temperature and strain rate, the equation t0.5 = 1.73 x . 10-7ε-0.33 exp(191000/RT) was proposed. The Influence of Ni Alloying on Corrosion Behaviour of Low Alloy Steels under Wet/Dry Cyclic Conditions X. Chen, J. Dong, E. Han, and W. Ke, Environmental Corrosion Center, Institute of Metal Research, Chinese Academy of Sciences The atmospheric corrosion of Ni-bearing low alloy steels was investigated by wet/dry cyclic corrosion tests (CCT) in a 0.3%NaCl solution at 30 °C and 60% relative humidity (RH). The prepared samples were studied using gravimetry, electrochemical corrosion tests (polarization curves (PC), electrochemical impedance spectroscopy (EIS)) and analytical techniques (SEM and XRD). The Ni bearing steels showed higher corrosion resistance than that of mild steel in the test. The results of electrochemical tests demonstrated that the addition of Ni to mild steel restrained anodic dissolution of iron, shifted the corrosion potential (Ecorr) in a noble direction and increased the corrosion resistance of rust layer by improving the adhesion and compactness of the rust layer and ameliorating the physicochemical property of the substrate/rust interfaces. The rust analysis demonstrated that Ni alloying ameliorated rust composition by facilitating the formation of fine NiFe2O4, α-FeOOH and decreasing the β-FeOOH, γ-FeOOH and Excerpts taken from abstracts in CMQ, Vol. 46, No. 2. Fe3O4. In addition, Ni alloying could retard the crystallization of Subscribe—www.cmq-online.ca α-FeOOH, Fe3O4 and γ-FeOOH to a certain extent.

107

CIM Magazine n Vol. 2, N° 6

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professional directory & ad index CORRIVEAU J.L. & ASSOC. INC. Land & Mining Surveyors GYRO & GPS SERVICES • SALES • RENTALS UNDERGROUND and SURFACE CONTROL • BOUNDARY and LEGAL SURVEYS • TOPOGRAPHIC SURVEYS • PHOTOGRAMMETRIC MAPPING 3D SCANNING and MODELLING • BOREHOLE DEVIATION • BATHYMETRIC SURVEYS 1085 - 3rd. Avenue Val d’Or, Quebec J9P 1T5 E-Mail: bureau@corriveaujl.com

Tel:(819) 825-3702 Fax:(819) 825-2863 Web: www.corriveaujl.com

In next month’s issue Coming in November Digging deep in Saskatchewan and Manitoba – the mining industry is working hard in the Prairie provinces.

MEMO 2008 preliminary program: find out why you’ll be sure to attend the Maintenance Engineering/Mine Operators’ event next February.

CMP 2008 program: get ready to

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book your spot at Canada’s top mineral processing event held in January.

109

33 4 IFC 31 13 60 IBC 34 72 47 21 29 11 81 67 25 69 27 50 105 64 3 61 19 59 45

Aeroquest International Alberta Building Trades Council Alberta Fuel Distributors Inc. ANSUL / Tyro Fire Suppression Group Atlas Copco Construction & Mining Breaker Technology (BTI) Bridgestone Bucyrus Canada Limited BV Print Management Canadian Society for Unconventional Gas Cardinal Distribution Cattron Group International Coneco Equipment EBA Engineering Edmonton Exchanger Elk Valley Coal Corporation Emeco Canada Endress + Hauser FMC Technologies Gemcom GIW Industries, Inc. Hatch Ltd. Hedweld Engineering Pty. Ltd. Imperial Oil Industrial Equipment Manufacturing Ltd. Klohn Crippen Berger Ltd.

9 82 73 24 OBC 46 15 65 16 44 7 43 35 41 17 53 30 23 39 18 12

Komatsu Canada Ledcor CMI Ltd. Measurement Canada Mecanicad Metso Minerals Nardei Fabricators Ltd. Newalta Corporation North American Construction Group Norwest Corporation Precismeca Limited Schlumberger Oilfield Services SNC-Lavalin (Oil & Gas Division) Specific Speed Enterprises Ltd. (Polaris Pumps) Suncor Energy Inc. TARM Inc. TIC Holdings, Inc. TOPAX Export Packaging Systems Transwest Mining Systems University of Missouri-Rolla UTS Energy Corporation Vancouver Island Conference Centre

109 Professional Directory Corriveau J.L. / 3D Survey & Scan

109 Product File Jet Lube

CIM Magazine n Vol. 2, N° 6

voices from industry

Mining’s contributions to society by Jim Carter, retired president and COO, Syncrude Canada Ltd. aving retired in May from a rewarding 36-year career in the mining and oil industries, I would like to share some reflections on my work-life experiences. There is much debate these days about the rate of pace of resource development and the positive or negative effects on our society. As CIM members, I believe it is incumbent on us to get some important facts out to our friends, colleagues, business associates, and elected officials to achieve more balance in public opinion. I spent the last 27 1⁄2 years with Syncrude Canada Ltd. and served ten years as president and chief operating officer. Before my oil sands involvement, I spent 5 1⁄2 years in mountain coal mining in Grande Cache, Alberta. One of the many great things about Canada is the vastness of our natural resources and particularly our mineral wealth. In mining, Canada is rich in coal, uranium, iron ore, copper, lead, zinc, nickel, diamonds, and gold, not to mention the vast reserves of oil in Alberta’s Athabasca oil sands and conventional oil and gas. The recent strong run in commodity prices is playing a significant role in driving the buoyant Canadian economy. Unemployment in Canada is at historically low levels and the Canadian dollar has recently seen its highest level in 30 years. By virtue of the multiplier effect on other sectors of the economy, just about every region of Canada either directly or indirectly benefits from resource industry investment. The mining industry alone in this country employs approximately 400,000 people and accounts for about 60 per cent of all rail transportation revenue and about 70 per cent of all seaport volume. The mining industry also accounts for approximately four per cent of Canada’s Gross Domestic Product. It is also an industry that over the past two decades has demonstrated significantly stronger productivity gains than many other industries due in part to research and development spending and capital investment, enabling its current economic impact. The industry also provides good, solid employment opportunities. It has pro-

110

vided opportunities for visible minorities, particularly Canada’s First Nations people, partially due to the location of many northern mining operations, but also because this industry was one of the first to realize the benefit of this largely untapped human capital pool. The industry also has a track record of developing and implementing more environmentally beneficial and cost-effective processes and equipment. Several examples are as follows: The integrated mining and upgrading oil sands operations in Fort McMurray have demonstrated a dramatic reduction in sulphur dioxide emissions over the last 15 years by implementing scrubber technology. In fact, Syncrude, through the addition of ammonia, is converting SO2, a former waste stream, into ammonium sulphate fertilizer for the agricultural market. Water conservation practices applied in the oil sands have reduced the water consumed per barrel of oil produced dramatically with Syncrude demonstrating reductions of 60 per cent over the past five years. In another example, the economies of scale of larger haul trucks in oil sands, coal, copper, and iron ore mining have greatly reduced the fuel required to move ore and waste, resulting in lower carbon dioxide and nitrous oxide emissions as well as lowering the cost of production. As a final example, I cite the latest leading-edge technology for coal-fired electricity generation implemented by Epcor at the Genesee 3 generator. Pulverized coal is used to generate supercritical steam at 3,600 pounds per square inch, which drives energy efficient turbines that generate electricity with 20 per cent lower CO2 emissions than previously available technology. Future opportunities for coal-fired power generation will likely employ coal gasification, which will enable steam turbines and gas turbines to be driven by the same fuel source while carbon dioxide is sequestered for enhanced oil recovery from conventional oil reservoirs. As an engineer with many years of experience, I am a firm believer in the power of technological advancement. Technology development and application will enable Canada to continue to reap the benefits of our vast natural resources while at the same time enabling good stewardship of the environment. There are some naysayers that are against forms of energy like oil from the Athabasca oil sands and coal-fired electric power. It is interesting to note that the energy represented in Canada’s coal deposits outweighs all other forms of hydrocarbon energy including the massive oil sands deposits. To those who would like to relegate these forms of energy to the back-benches, I say “We can do this!” Through science and engineering we can continue to support a strong Canadian economy and be good stewards of the environment. As CIM members and Canadians with a vested interest in the outcomes, please join me in the crusade. CIM CIM Magazine n Vol. 2, N° 6

FirST IN MAKING TIRES LAST.

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