CIM Magazine September/October 2010

MINING

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CONTENTS CIM MAGAZINE | SEPTEMBER/OCTOBER 2010 | SEPTEMBRE/OCTOBRE 2010

NEWS 12

Spotlight on Peru With large silver and gold deposits and a free trade agreement in place, Peru is a country that Canadian mining companies are looking at with interest for opportunities. by J. Borsato

14

Cenovus to investigate large bitumen deposit in northeast Alberta Cenovus receives provincial government approval to drill a test well on an untapped reservoir that could contain 900 million barrels of bitumen.

by P. Caulfield

16

Caterpillar to produce line of mining shovels Caterpillar is re-entering the shovel market with a lineup of five mining shovels aimed squarely at emerging markets in Asia. by P. Caulfield

14

18

Canadian entrepreneur looks to Utah oil sands

20

Glen Snarr of Earth Energy Resources sees the vast potential in the oil sand reserves in Utah. by P. Diekmeyer Directive 74 Imperial, Suncor and Syncrude receive conditional approval for their management plans under a new provincial directive aimed at reducing tailings.

22

Supply constraints Canada and Australia are each

by M. Eisner

facing their own set of logistics and capacity challenges in dealing with the global demand for coal. by J. Borsato

UPFRONT 24 28

30 34

36

Capacity building in the midst of a crisis Golder Associates employees raise one million dollars to help fund AIDS/HIV projects for orphans in Sub-Saharan Africa. by H. Ednie Cutting a niche in a tough market Bucyrus International’s longwall automated plow system is being seen as a safe, costeffective and environmentally friendlier alternative to the traditional shearer. by A. Lopez-Pacheco Advancing extraction techniques Groundbreaking new in situ extraction processes are presenting new cost and environmental options for bitumen extraction. by P. Caulfield Shining a light on oil sands production Spectroscopy offers the ability to pinpoint and identify the variations and material makeup of the oil sands, which can have a large impact on the extraction process by D. Zlotnikov A witness to history Suncor’s first reclamation of a tailings pond is no small achievement. The 220 hectare area has been reclaimed and now has spruce trees and shrubs planted in it.

by M. Eisner

40

Exploring the frontier Dr. Eddy Isaacs heads Alberta’s new energy and environment research authority, Alberta Innovates — Energy and Environment Solutions. CIM spoke to him about his work and current mandate. by E. Moore

4 | CIM Magazine | Vol. 5, No. 6

24

COLUMNS 72 74 76 77 78 80 82 84 86 87 88 89 90 118

MAC Economic Commentary by P. Stothart Standards by G. Gosson Supply Side by J. Baird First Nations by L. Eagle HR Outlook by L. Forcellini Innovation by N. Beier & D. Sego Eye on Business by M. Gagné Safety by H. Ednie Women in Mining by H. Ednie Student Life by J. Parreira Canadians Abroad by H. Ednie Parlons-en par S. Perreault Mining Lore by C. Baldwin Voices from Industry by G. Winkel

CIM NEWS 93

The butterfly effect Vancouver area schoolchildren

94

Follow the yellow brick road to Eldorado COO

dig deep into mining culture and lore. by A. Nichiporuk

44

of Eldorado Gold speaks about gold mining in China by A. Doll

95

FEATURES

96

COAL AND OIL SANDS LE CHARBON ET LES SABLES BITUMINEUX

97

44 52

The two faces of coal While the pricing for thermal coal remains stable, metallurgical is volatile. One thing remains clear, Canadian coal producers have a competitive edge over their counterparts. by D. Zlotnikov Back in the black After a difficult year of low prices and projects placed on hold, the oils sands producers are braced for expansion. by G. Woodford

50

Les deux aspects du charbon L’incertitude – une perspective commune pour les charbons

60

Fini d’être dans le rouge Après une année de bas prix et de projets reportés, les sables

métallurgique et thermique.

98 99

Phasing in a new IT system CIM’s information technology restructuring project, geared to offering the best service for its members, is coming in on time and on budget. by A. Nichiporuk Le passage progressif Le point sur le projet du nouveau système du TI. CIM says farewell to a past leader Walter Riva, industry leader and past CIM president, passes away at age 88. by A. Nichiporuk Building an audience CIM Distinguished Lecturer David Rodier discusses the importance of fostering corporate social responsibility in the mining industry. by R. Pillo

Ottawa Branch gets groundbreaking lesson An in-depth look at recent earthquakes in high-risk countries. by J.-F. Fiset

100

Students embrace industry opportunities Three young, bright and talented students are already making their presence felt in the industry. by H. Ednie

bitumineux sont prêts non seulement pour une reprise, mais pour une expansion.

101

Dominic Gravel reprend le flambeau familial

102

Un étudiant de l’Université Laval recoit une bourse de la Section Thetford Mines de l’ICM par M. Eisner et M. I. Anelli Painting coal in a brighter shade Allen Wright has dedicated his time to making people understand the importance of the coal industry to Canada and the world. by R. Pillo

104

25e Édition du tournoi de Golf ICM–Section Harricana un grand succès Et l’équipe gagnante est … par J.-F. Lagueux

HISTORY

62 FEATURED PROJECT PROJET EN VEDETTE 62

Focused growth MEG Energy’s Christina Lake second phase of expansion is fully financed and ready to go. by D. Zlotnikov

68

Croissance ciblée La deuxième phase d’expansion de MEG Energy Corp. à Christina Lake est pleinement financée et prête à démarrer.

106 110

Nevada-type gold deposits (Part 3) by R. J. Cathro Pyotr Romanovich Bagrationi (1818–1876): a pioneer hydrometallurgist by F. Habashi & M. Milashvili

TECHNICAL SECTION 113 114

Canadian Metallurgical Quarterly CIM Journal

IN EVERY ISSUE 6 8 10 94 117

Editor’s message President’s notes / Mot du président Letters Welcoming new members Professional directory June/July 2010 | 5

editor’s letter Editor-in-chief Angela Hamlyn, editor@cim.org Section Editors

Fall favourite

News, Upfront and Features:

Ryan Bergen, rbergen@cim.org

mong our most anticipated issues, the annual Coal and Oil Sands-themed edition has served as one of the cornerstones of the CIM Magazine editorial lineup for close to a decade. There is no question that these two mammoth sectors have a stronghold on our national (and even global) economy and psyche. As such, they provide a portrait of the many issues, initiatives and indicators that will be — or ought to be — on our collective radar. So what better way to gauge the status of the broader industry in our aprèssummer editorial ramp-up than to take the pulse of these two vital sectors.

This issue is packed with stories about the latest developments, including operational improvements, economic performance, environmental advancements, innovative developments, and more.

In “The two faces of coal,” writer Dan Zlotnikov digs deeply into the two characters of the Canadian coal industry — metallurgical and thermal. He uncovers the different drivers for these powerhouses and what the implications could be for their prospects over the coming months and years.

In her feature, “Back in the black,” writer Gillian Woodford takes a comprehensive look at some of the hurdles the oil sands industry faces, and the changes operators must undertake as they are poised for major expansion and subject to growing scrutiny. Primary among these issues are project execution rates, environmental concerns and labour costs.

You will also read a lot about the latest innovations in extraction, tailings management, reclamation and workforce diversity in our Upfront and Columns sections.

MEG Energy Corp.’s Christina Lake project takes centre stage as our featured project. With a cache of fresh financing and an expansion plan in the works, this comparatively small operator has big plans for its in situ oil sands operation. Learn how a belief in the future of the oil sands provided the impetus to transform the early legwork in the covered walkways of Calgary’s business district into a project producing 25,000 bpd, and likely to expand.

On a final note, I’d like to acknowledge the stellar efforts of our dedicated and talented CIM Magazine editorial, production and sales team. Putting together an issue of this scope and magnitude — including dealing with last-minute changes during the dog days of summer — is no simple task. Even though the theme remains consistent from year to year, they have once again infused it with fresh perspectives and relevant commentary. We would love to hear your thoughts. In that way, you can also play a part in the continued evolution of this fall favourite.

A

Keep the mail coming! cim.org editor

@

Columns, CIM News, Histories and Technical Section:

Andrea Nichiporuk, anichiporuk@cim.org Technical Editor Joan Tomiuk, jtomiuk@cim.org Publisher CIM Contributors Jon Baird, Correy Baldwin, Nick Beier, Louise Blais-Leroux, Jeff Borsato, R.J. Cathro, Peter Caulfield, Rosalind Cooper, Peter Diekmeyer, Lana Eagle, Heather Ednie, Marlene Eisner, Lindsay Forcellini, Martin Gagne, Greg Gosson, Fathi Habashi, Jean-François Lagueux, Miranda Lightstone, Eavan Moore, Alexandra Lopez Pacheco, Juliana Parreira, Serge Perreault, Robbie Pillo, Steve Stecyk, Paul Stothart, Gordon Winkel, Gillian Woodford, Dan Zlotnikov Published 8 times a year by CIM 1250 – 3500 de Maisonneuve Blvd. West Westmount, QC, H3Z 3C1 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($150.00); Non-members (Canada), $168.00/yr (GST included; Quebec residents add $12.60 PST; NB, NF and NS residents add $20.80 HST); U.S. and other countries, US$180.00/yr; Single copies, $25.00.

Advertising Sales Dovetail Communications Inc. 30 East Beaver Creek Rd., Ste. 202 Richmond Hill, Ontario L4B 1J2 Tel.: 905.886.6640; Fax: 905.886.6615 www.dvtail.com National Account Executives 905.886.6641 Janet Jeffery, jjeffery@dvtail.com, ext. 329 Neal Young, nyoung@dvtail.com, ext. 325

This month’s cover Canadian Pacific coal train travels through the Columbia Valley enroute to the west coast.

Photo courtesy of CP Rail.

Layout and design by Clò Communications.

Copyright©2010. 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.

Angela Hamlyn, Editor-in-chief Printed in Canada

6 | CIM Magazine | Vol. 5, No. 6

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president’s notes Fueling the future It is a fitting time to focus on coal and the oil sands, a major part of the Canadian mining sector. This country is a well-established, global-scale energy supplier, primarily to the United States. The axis of global demand has shifted, however. In July, the International Energy Agency reported China used four per cent more energy than the recession-hobbled U.S. last year. In the future, the primacy of China will become even more pronounced.

China’s per capita energy use is still one-third of that in the United States and Canada. In other words, they will need our energy resources. To meet the demand, Sinopec, China National Offshore Oil Corporation and PetroChina all have taken significant positions in the oil sands already, dwarfing the scale of Chinese investments in other Canadian-produced commodities such as iron ore, base metals and potash. Behind China will be India and other emerging economies for decades to come.

The resulting challenges of supply expansion will, however, be ours. We will need to ramp up development and construction in a balanced way in order to: • Avoid the overheated labour markets we lived with only three years ago.

• Balance the competing water requirements of the energy developments, the agricultural sector and cities.

• Meet the needs of local communities, particularly with respect to employment and local issues such as the Gateway Pipeline to Kitimat and shipping oil to the Pacific Rim. • Reduce our greenhouse gas emissions while meeting the escalating hydrocarbon demands.

As we in the industry rise to these challenges, the oil sands and coal producers among us need to tell their environmental and geopolitical stories clearly and often, while continuing to reduce the sectors’ environmental footprint. A look at the latest in extraction advances in the in situ sector, reclamation successes and industry-supported research initiatives are among such stories you will find in this issue.

Before closing, I would like to congratulate Doug Boyd, Torstein Utigard, Alan Plumtree, Stavros Argyropoulos and David Wilkinson, all longstanding CIM members recently appointed Fellows of the Canadian Academy of Engineering.

I hope you find this issue both interesting and thought-provoking.

Chris Twigge-Molecey CIM President

De l’énergie pour le futur Le contexte actuel est tout indiqué pour parler du charbon et des sables bitumineux, lesquels représentent une composante importante du secteur minier canadien. Notre pays est un fournisseur d’énergie solidement établi à l’échelle mondiale, les États-Unis étant son principal client. Cependant, l’axe de la demande mondiale s’est déplacé. En juillet, l’Agence internationale de l’énergie a en effet annoncé que la Chine a utilisé quatre pour cent d’énergie de plus que les États-Unis, freinés par la récession l’an dernier. Dans les années à venir, la prédominance de la Chine deviendra encore plus prononcée.

La consommation d’énergie de la Chine par habitant ne représente encore qu’un tiers de celle des États-Unis et du Canada.

Autrement dit, la Chine aura besoin de nos ressources énergétiques.

Pour répondre à la demande, Sinopec, China National Offshore Oil Corporation et Petrochina ont déjà acquis des participations importantes dans les sables bitumineux, reléguant au second plan les investissements chinois dans d’autres produits canadiens tels que le minerai de fer, les métaux de base et la potasse. L’Inde et d’autres pays émergents suivront la Chine dans les décennies à venir.

Cependant, les défis qui en résulteront en ce qui a trait à l’augmentation de l’approvisionnement seront les nôtres.

Nous devrons accélérer les travaux de construction et de mise en valeur d’une manière équilibrée pour : • éviter une surchauffe du marché de l’emploi comme celle que nous avons connue il y a seulement trois ans; 8 | CIM Magazine | Vol. 5, No. 6

• parvenir à un équilibre des besoins en eau entre le développement énergétique, le secteur agricole et les villes; • répondre aux besoins des communautés locales, en particulier en lien avec l’emploi et les enjeux locaux tels que l’oléoduc « Gateway Pipeline » allant jusqu’à Kitimat pour transporter le pétrole jusqu’au littoral du Pacifique; • réduire les émissions de gaz à effet de serre tout en répondant à la demande croissante en hydrocarbures.

Alors que nous, dans l’industrie, aurons à relever ces défis, les producteurs de charbon et de sables bitumineux devront parler souvent et clairement des aspects environnementaux et géopolitiques de leurs activités, tout en continuant à réduire l’empreinte écologique du secteur. Parmi les articles que vous trouverez dans ce numéro à ce sujet figurent un aperçu des tout derniers progrès en matière d’extraction in situ, des remises en état réussies et des projets de recherche soutenus par l’industrie.

Avant de conclure, je tiens à féliciter Doug Boyd, Torstein Utigard, Alan Plumtree, Stavros Argyropoulos et David Wilkinson, tous membres de longue date de l’ICM, nommés récemment membres de l’Académie canadienne du génie.

J’espère que vous trouverez le contenu de ce numéro à la fois intéressant et stimulant.

Chris Twigge-Molecey Président de l’ICM

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Reliability at work

letters Tally-ho!

Dear Mr. Bergen and Ms. Nichiporuk The legacy of a Newfoundland prospecting family Correy Baldwin n 1969, Ted Keats and his son Allan showed up in Gander, Newfoundland, at the newly opened Noranda office — one of the largest mining and exploration companies in Canada. They met with Ron Hawkes, the district geologist, and explained to him that there was silver in the area.

The story went that Keats’ grandfather, a trapper by the name of Soulis Joe, had come across a silver deposit in the bush but had never revealed its location to anyone. Keats’ brought out a silver sample to prove that it was not just a story — Soulis Joe’s original nugget had become something of a family heirloom.

Ron Hawkes was intrigued, but he knew that Noranda would need more to go on than a silver nugget and a family story. The company was looking for prospectors, however, and Keats’ and his son were offered the job.

They were given a canoe, supplies and $250 a month, and were flown to upper Terra Nova River.

The father-and-son team had to rough it in the backcountry — they were alone and had to hunt for their own food. It was a life that Ted Keats knew well. He had begun working in

Photo courtesy of Newfoundland and its Untrodden Ways, by J.G. Millais, New York: Longmans, Green, 1907

I

Photo courtesy of Library and Archives Canada (PA-195497).

I am writing to add some clarification to a sentence in an article entitled “Soulis Joe’s lost silver” published in the August 2010 issue of CIM Magazine (Mining Lore, p. 56).

My intent is not to diminish the overall spirit of the piece; it is an interesting and colourful story.

I cannot comment on the Point Leamington and Boundary deposits, but I have first-hand knowledge about the exploration programs that were conducted in the Tally Pond area from 1984 to 1990, and I want to clarify that Ted and Allan Keats did not discover the Tally Pond deposits (Duck Pond and Boundary) solely on their own. Ted and Allan did find weakly mineralized, rounded to sub-angular, massive pyrite boulders at the north end of Tally Pond in 1974. Subsequent drilling in the mid-70s and early 80s in the vicinity of these boulders encountered graphitic sediments.

At its highest elevation, the top of the Duck Pond deposit is located approximately 250 metres below surface.

Although the deposit was first intersected in the fall of 1985

Soulis Joe’s lost silver

Above: Mi'kmaq trappers from Conne River, ca. 1906. Left: Portrait of Mi'kmaq Man photographed on board the French naval vessel Sésostris, Newfoundland, 1859.

the woods at an early age, and had tried his hand at prospecting for the first time when he was 12, looking, of course, for his grandfather’s lost silver.

Keats’ and his son were sure that Soulis Joe’s silver was out there, and now that they were prospecting for Noranda, they were intent on finding it.

The family tree The Keats family traces its ancestry back to a Mi’kmaq man from Nova

Scotia named Soulis Joseph — a name given to him by the French priests to whom he had spent several years in servitude. He was later sold to the captain of a merchant ship who called him Black Soolie — a reference to the low status that he shared with the other black slaves on the ship. In 1760, when the ship docked at St. George’s Bay, Newfoundland, he escaped into the wilderness.

Soulis Joseph made a home for himself in the Mi’kmaq settlement of Conne River on Bay d’Espoir on Newfoundland’s south coast. He became a trapper, as did his sons and grandsons.

In the mid-1800s, a young man named Soulis Joe from the same family left Conne River and headed into the

interior in search of good trapping territory. He travelled far, becoming an expert trapper, woodsman and guide. He also built a reputation for finding mineral deposits, seeking them out whenever he checked his trap lines. Eventually he made his most famous discovery, returning to Port Blandford on Bonavista Bay after a hunting trip, carrying a high-grade silver sample. He claimed to have found a quartz vein deep in the bush that contained a massive silver showing.

He told few people about his find, but the story of his silver grew, and people became determined to find it. Soulis Joe, however, was not interested in giving away his secret, especially not to anyone whose attitude he did not like, and especially not to a white man. He was known to play tricks on people and lead them astray. He became an expert at losing those who tried to follow him into the bush in hopes of finding his silver.

The elusive deposit The silver had eluded prospectors ever since. Ted and Allan Keats were hoping to change this in 1969 while prospecting for Noranda.

But after a month and a half in the backcountry, Soulis Joe’s silver remained elusive, and father and son emerged from the bush without finding it. They did not come out empty-handed, however, but found several other impressive samples that proved invaluable to Noranda. More than that, a family legacy of prospecting had begun.

Keats and his son had become an excellent team and the two discovered the Point Leamington and Tally Pond deposits together. Keats worked for Noranda throughout the 1970s and 80s, and was involved in the Burnt Pond and Duck Pond discoveries. When it came time to retire, Keats was working beside all four of his sons — Allan, Fred, Calvin and Suley — and he opted to remain as camp cook to be close to them. When Ted Keats died on February 4, 2010, he was described as an independent, industrious, adventurous and generous man.

Each of Keats’ sons has made a name for himself as a prospector, and together they have racked up an impressive list of finds.

They also married into the Stares, Crocker, Barrett and Smith families, all involved in mining and prospecting. Now, Keats’ grandchildren and great-grandchildren are involved in the industry, four of them as CEOs. Twenty-one members of the five families over four generations have been involved in prospecting and mining, and in 2007 the Prospectors and Developers Association of Canada awarded the Keats-Stares family the Bill Dennis Prospector of the Year Award.

Soulis Joe’s legacy remains as strong as ever. Although his silver remains lost, he has come to inspire what has been called Newfoundland’s first family of prospecting.

Soulis Joe eventually settled down in the Bonavista Bay area, where he married and spent the rest of his life hunting, trapping, guiding and prospecting. A few modest landmarks bear his name: Soulis Brook flows out of Soulis Pond near Benton on the way to Gander, and another Soulis Pond lies west of Conne River, his original home on the south coast. Even though he has left his mark on the map of Newfoundland, his gravesite is unknown. His final resting place, just like his silver find, remains a mystery.

56 | CIM Magazine | Vol. 5, No. 5

August 2010 | 57

at a depth of 262 metres in hole 373-77, it took a number of drill phases before the significant intersection in hole DP95 (approximately 23 metres of high-grade copper and zinc mineralization) was encountered in the spring of 1987. The placement of the discovery holes was based primarily on the geological interpretation of the alteration, mineralization, lithogeochemistry and complex structure encountered in the 1975-76 drilling program and the drilling that took place in 1984 through to 1987 on the Duck Pond property.

The boulders at Tally Pond played absolutely no role in the decision, budget defense and planning process related to the 1984 through to 1987 drilling programs. Although Noranda had completed extensive ground exploration and drilling programs in the immediate and surrounding area, the exploration teams had no firm idea where these boulders came from. The Boundary deposit, located several kilometres to the north east at surface, was considered a likely candidate (partially removed by glaciation) as were geochemical/geophysical targets south west of Tally Pond.

Sincerely yours, A. Colin MacKenzie, Retired geologist who worked for Noranda Exploration from 1980 to 1994

Dear Mr. MacKenzie, Thank you for the clarification and the additional information. Although we see how the wording could be misleading, the author’s intention was really to show how father and son formed a successful team and that they were working together when the large deposits were discovered. Meanwhile, your commentary helps to add even more substance to the story.

Regards, Andrea Nichiporuk Section Editor 10 | CIM Magazine | Vol. 5, No. 6

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news Spotlight on Peru Free trade pact, expanding infrastructure spur exploration

As the world’s second largest silver and fifth largest gold producer, Peru is at the forefront of an increasing interest in mining opportunities in Latin America. That was the message from a host of Latin American-focused mining companies and industry specialists at On the Ground Group’s “mineSouthAmerica” seminar held recently in Toronto. The seminar focused on mining and investment opportunities in Peru, highlighting current and future developments in the mining and energy industries in the country where, in 2008, mining and mineral exploration activity contributed about seven per cent to GDP. The keynote address, given by Jose Zlatar, president of the Peruvian-Canadian Chamber of Commerce, highlighted the longstanding relationship between Canada and Peru and our $2.3 billion in bilateral trade in 2008.

Noting the recent approval of a Canada-Peru Free Trade Agreement (CPFTA), Zlatar stressed how an FTA “would create a more stable environment for investors and protect them from discrimination and expropriation without fair compensation.”

An emerging economy of 28 million people, Peru is fast becoming a hot spot for foreign investors from the mining and electrical generation industries. Seminar chairman Brian Levett, a partner at Macleod Dixon LLC, spoke of the need to be on the ground in each locale. “[Macleod Dixon] has offices throughout Latin America because we need to be where our clients are in the board room and the project site,” he said.

Country risk and community engagement were often repeated themes during the half-day seminar. Keith Laskowski of Canadian Shield Resources focused on Peru’s advantages: “Being a politically stable state with good infrastructure and 12 | CIM Magazine | Vol. 5, No. 6

Photo courtesy of Andean American Mining Corp.

By Jeff Borsato

On the lookout for opportunities in Peru

excellent access make Peru an attractive place to do business,” he said.

Patrick Burns, president of Condor Resources, provided an update on what he called “my ongoing search for bonanza grades in Peru” with photos and survey results from two of Condor’s six projects in the country.

Focused exclusively on mineral exploration in South America, Burns stressed Condor’s ongoing efforts at community involvement and engagement as part of its work on over 720 square kilometres of land it is actively exploring. “Maintaining close ties with the community is critical for our future success in the region; we have several full-time staff dedicated to community relations at our Peruvian and Chilean project sites,” said Burns.

Andean American Mining CEO John Huguet pointed to Peru’s talented labour pool and community support as key features in development of their fully owned Invicta Project 250 kilometres northeast of Lima.

Stephen Mlot of Alto Cercapuquio S.A.C. noted Peru’s surging economy as part of his company’s hydroelectric generation projects in the region.

“Peru is becoming an exporter of liquefied natural gas and developing a burgeoning petrochemical industry while working towards a national rural electrification plan.”

Strait Gold has three active projects in Peru. The company’s CEO, Jim Borland, described potential discoveries at their Alicia project, a copper, gold and silver package 60 kilometres south of Cusco.

There were nine presentations in total, seven updates from mining companies with Peruvian projects in development, and two presentations regarding financing mining projects in South America and dual listing on the TSX and BVL (Lima Stock Exchange), which, like the TSX Venture Exchange, is heavily weighted in mining and junior exploration companies. CIM

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news Cenovus to investigate large bitumen deposit in northeast Alberta Company plans to test drill Grand Rapids oil sands

Calgary-based Cenovus Energy Inc. recently received approval from the Alberta Energy Resources Conservation Board (ERCB) to build a test well into a large and mostly untapped bitumen deposit in northeastern Alberta. In late 2010, Cenovus plans to drill the well into the Grand Rapids oil sands, which lie southwest of the Fort McMurray oil sands and 300 kilometres north of Edmonton. The pilot, which falls under the company’s existing Pelican Lake operating license, is 100 per cent owned by Cenovus and will determine whether the Grand Rapids formation A Cenovus drilling pad like this one at Foster Creek will soon become a feature at the Grand Rapids deposit west of Fort McMurray. can be commercially produced using the steam-assisted gravity very important deposit for Cenovus. million barrels of bitumen. The comdrainage (SAGD) technique.

It has the geological advantage of pany is preparing to file a regulatory If the test is successful, Grand being a consistent and continuous application next year for 180,000 barRapids has the potential to become a reservoir and contains nearly 900 rels per day (bpd) of commercial pro-

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14 | CIM Magazine | Vol. 5, No. 6

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By Peter Caulfield

news Custom Dewatering duction from Grand Rapids. The first phase of the project is expected to produce 60,000 bpd. The pilot is slated to be up and running in 2011 and take from six to 24 months to complete.

One of the measures of the efficiency of SAGD technology is the steam-to-oil ratio, which calculates the amount of steam needed to produce a barrel of oil. Cenovus’ SAGD projects have achieved a steam-to-oil ratio of approximately 2.5, which means the company uses approximately 2.5 barrels of water to produce one barrel of oil, which, the company says, is one of the lowest in the industry.

The company’s first SAGD project, at Foster Creek, Alberta, began full commercial operation in the fall of 2001. Cenovus has a second SAGD operation in Christina Lake, Alberta.

“Cenovus believes there may be the opportunity to use SAGD to produce the resource,” said Cenovus spokesman Reg Curren. “The company plans to apply the knowledge we gained at the Foster Creek and Christina Lake SAGD projects that have shown a high-efficiency recovery process.”

Curren said the oil in the Grand Rapids bitumen is not accessible through water flood or polymer injection, which is the technology being used at the company’s Pelican Lake project. “It’s too thick to flow using that technique,” he explained. “The API [American Petroleum Institute] gravity of Grand Rapids is between seven and 8.5 degrees, which is heavier than the oil produced from the Wabiskaw Formation [Pelican Lake].” (Note: API gravity is a measure of how heavy or light a petroleum liquid is compared to water).

Cenovus hopes it can begin producing Grand Rapids oil by 2017, and says it should be able to make a nine per cent return in the area with oil prices at US$60 to US$70 per barrel. CIM

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news Caterpillar to produce line of mining shovels Equipment manufacturer eyeing growth markets in India and Asia

Caterpillar Inc. of Peoria, Illinois, recently announced it will produce a line of five mining shovels, ranging from a 113tonne model to a 725-tonne model. The move marks the company’s re-entry into the mining shovel market, from which it had exited seven years ago. Production of the shovels will take place, at least initially, at Caterpillar’s Aurora, Illinois, manufacturing facility. The company is also looking at producing the shovels in other parts of the world.

Caterpillar will begin pilot production of the new 113-tonne class shovel in early 2011, The new line of shovels will draw on design elements from the previously manufactured 5000 Series of machines. which is expected to be commercially available later that year. McCord, truck and shovel product intention is to match the new shovels The larger shovels are expected to be manager in the Caterpillar Global to its existing line of trucks — from introduced in 2013 and 2014. Ed Mining Division, said the company’s the 90-tonne class 777F to the 360tonne class 797F. Chris Curfman, president of the Caterpillar Global Mining Division, said much of the shovel production is intended for expanding markets overTetra Tech is a leading provider of consulting, engineering, construction, and technical services. Tetra Tech has the seas. “The economies in India and the capabilities and professionals to support oil shale projects. rest of Asia are growing, and the market for shovels is moving in that direcThese services include: tion, too,� he said. But at the same t 8BUFS .BOBHFNFOU 1MBOOJOH %FTJHO time, McCord noted, Caterpillar is not seeing a decrease in its traditional mar t #SJOF *OKFDUJPO 8FMM 1MBOOJOH 5FTUJOH kets. t 1FSNJUUJOH 3FHVMBUPSZ $PNQMJBODF 4VQQPSU Curfman said Caterpillar stopped t *OGSBTUSVDUVSF %FWFMPQNFOU 4JUF 3FTUPSBUJPO producing mining shovels in 2003 because the market was “minimal� at the time. “But the market grew by a factor of three between 2003 and 2008 Contact our Oil Shale Specialists: and we expect it to keep growing,� he explained. “The mining industry rapNJOJOH!UFUSBUFDI DPN idly came out of the recession and www.tetratech.com accelerated in 2009.�

Oil Shale Engineering & Consulting

16 | CIM Magazine | Vol. 5, No. 6

Photo courtesy of Caterpillar

By Peter Caulfield

news The shovels will be tested at the company’s two proving grounds in the United States, one of which is near Peoria, Illinois, and the other near Tucson, Arizona. The 2,428-hectare Tucson Proving Grounds, which are set up for testing large mining equipment, include waste dumps left over from an old copper mine. Adjacent to the Proving Grounds is Freeport McMoRan’s Sieritta Mine, an active copper mine that has taken part in the later stages of some equipment testing. Caterpillar says southern Arizona is a good location for testing the shovels because of its high ambient temperatures and difficult digging conditions.

After initial testing and development of the shovels at the Proving Grounds, Caterpillar will test pre-production models at customer sites, which are selected on the basis of site conditions and the willingness of mining companies to participate in testing programs.

Generally, a Caterpillar test unit works in the regular production cycle, but an onsite company engineer will pull the unit periodically from production to assess the condition of the machine and to calibrate its monitoring systems. The usual practice at Caterpillar is for a number of test units of a new equipment model to accumulate several thousand operating hours before a new model is released for commercial manufacturing.

The Caterpillar dealer network is equipped to support the new line of shovels. A company spokesman said “many Cat dealers now sell and support O&K (Terex, now Bucyrus) shovels, so the large shovel experience will not be new to them. Also, many Cat mining dealers have 5000 Series Cat shovels in their territories, and the dealers provide full support for those machines, even though Caterpillar stopped manufacturing them in

2003.” Parts inventory and some training will be needed to support the new shovels properly.

“But Cat dealer technicians already are well versed in the maintenance of engines, hydraulics and structures,” he said. “The Cat engines used in the shovels are the same engines used in Cat dozers, wheel loaders and mining trucks. And all Cat mining dealers have component rebuild-centres that can rebuild engines, hydraulics, undercarriages, structures and other components. All in all, Cat dealers’ steps to support the new shovels will be incremental rather than major additions.”

The company is also accelerating its previously announced truck manufacturing expansion plans in Decatur, Illinois. Together, the long-term shovel development program and added truck capacity represent investments of nearly US$700 million in Caterpillar mining products. CIM

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September/October 2010 | 17

news Canadian entrepreneur looks to Utah oil sands Possible hurdles include gaining acceptance for a new technology, funding and regulatory approval

Alberta’s massive oil sands have attracted a multitude of energy sector players interested in developing them or in supplying businesses that do. So, at first glance, it is no surprise that Earth Energy Resources would choose to set up shop there. What is interesting, however, is that according to its president, Glen Snarr, the company’s first major development may be in Utah.

“Utah has excellent oil sands resources,” said Snarr. “However, most of these cannot be economically extracted using conThe Utah oil sands deposits are less concentrated, but sweeter than those in the Athabasca region, according to Earth Energy's Glen ventional methods. The Snarr. new technologies, processes and workflow methods we Utah School and Institutional Trust The company estimates that getting are proposing would make them so.” Lands Administration (SITLA) in the production going would take Earth Energy Resources currently PR Spring deposit. Snarr estimates between 18 and 24 months, after holds a 100 per cent interest in 3,170 that these include 250 million barrels funding (totalling $35 million) is hectares under lease from the State of of recoverable high-quality bitumen. obtained.

Oil Sands

& Heavy Oil

18 | CIM Magazine | Vol. 5, No. 6

Photo courtesy of Earth Energy Resources

By Peter Diekmeyer

news While Utah is hardly known as an energy powerhouse, according to Snarr, the state contains more than half of America’s known oil sands.

However, the profile of the Utah reserves is different than the Athabasca oil sands. “The Utah oil sands are relatively disaggregated and spread out over a relatively wide area,� said Snarr. “Although bitumen quality is very similar to that found in Athabasca, it has a much lower sulphur content, which means that it is a ‘sweeter’ oil that provides a more favourable feedstock for refineries.�

To deal with the challenges of bringing Utah’s resources to market, Earth Energy Resources proposes using what it calls the Ophus Process, which differs from the Clark Process used in conventional Athabasca oil sands extraction. The proposed workflow involves establishing a series of small 2,000 barrel per day production facilities that can be easily set up, and moved as the resources in one particular area are recovered. Production could be expanded as needed by the addition of more facilities, which would scale up the overall extraction capacity. “Digging up the ore and hauling it away in 400-ton trucks like they do in Alberta just won’t work,� said Snarr. “We need a more resource-focused methodology.�

To extract the sweeter Utah bitumen, Earth Energy Resources proposes using an environmentally friendly citrus-based extraction chemical to replace the substantial mechanical energy and caustic soda mixture used in the Clark Process.

This new process sharply reduces the quantity of middlings produced in the process, and thus eliminates the need for tailings ponds. “The result is a more compact overall footprint, which means reduced environmental impacts and a process that is both energy and water efficient,� said Snarr.

That said, despite the promising Utah resources and new extraction technology, raising funds to finance the venture has not been easy. Private equity money has been tight since the

global financial meltdown, and the idea of investing in innovation, with its associated increased business risk, does not sit well with some right now.

However, Snarr remains optimistic. “Sure, there are hurdles, but we are a bit ahead of our time: sort of like where Athabasca was 40 years ago, when people were scratching their heads wondering if it would

work,� said Snarr. “We are profitable at $50 per barrel oil. With the high oil prices we have seen lately, we will definitely get this off the ground.�

After that, if all goes well, Snarr hopes to partner with a company that is interested in using the Ophus technology to do resource development in Athabasca itself, where he is convinced it can also be applied. CIM

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news Directive 74 Industry projects gain conditional approval on tailings management plans

By Marlene Eisner As of early September, three of six companies have received conditional approval from Alberta’s Energy Resources Conservation Board (ERCB) on plans submitted under Directive 74, an industry-wide set of guidelines issued in 2009 for managing oil sands tailings.

Directive 74 requires operators to prepare tailings plans and report annually on tailings ponds. As well, operators must reduce fluid tailings through fines captured in dedicated disposal areas, and convert tailings into trafficable deposits that are ready for reclamation five years after the deposits have ended. Specific enforcement actions can be taken against companies if tailings performance targets are not met.

This spring, the ERCB gave conditional approval for Syncrude’s Mildred Lake and Aurora North sites. Suncor gained similar approval for its Fort Hills oil sands project as well as its plan for the construction and operation of the company’s first commercial application in the oil sands of its new Tailings Reduction Operations (TRO) technology, designed to reduce fluid tailings volumes.

In August, the ERCB conditionally approved a tailings management plan for Imperial’s Kearl project, slated to begin operation in 2012, involving one tailings pond that will be decommissioned by 2038.

In the case of the Kearl project, Imperial was unable to meet Directive 74’s annual targets to reduce fine tailings because its new Tailings from Solvent Recovery Unit technology (TSRU) would take time to implement. In response to the delay, and as one of the eight conditions attached to the approval, the ERCB “has directed Imperial to submit an updated plan by January 2012 that evaluates alternatives and proposes measures to further accelerate fines tailings treatment.”

The same leeway for time constraints was given to Suncor for its TRO technology, due to the implementation and testing requirements. “The ERCB believes that the application of TRO will enable Suncor to reduce the volume of fluid tailings remaining at the end of the project life by 33 million cubic metres, or about 30 per cent,” said ERCB communications advisor, Davis Sheremata. He added that Suncor has committed approximately $450 million to TRO technology and other measures designed to improve tailings management to meet Directive 74 requirements.

However, the ERCB has imposed two conditions, focused on coke conservation and sand disposal, in its approval of the tailings plan.

It has also placed two conditions on Suncor’s Fort Hills’ plan for one tailings pond with a storage capacity of 322 million cubic metres, which is expected to operate for 20 | CIM Magazine | Vol. 5, No. 6

approximately 22 years. Suncor Energy Ltd, UTS Energy Corporation, Teck and Fort Hills Energy Corporation are partners in the project, which is in the pre-construction stage and located 90 kilometres north of Fort McMurray.

Syncrude’s Mildred Lake and Aurora North sites have been approved, with six conditions on each project. Syncrude currently utilizes Composite Tailings (CT) technology to convert fluid tailings to a solid deposit, but the company’s original plans, filed on September 30, 2009, did not meet the ERCB requirements. After a series of consultations with the government agency, Syncrude made the

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Moving on up changes necessary to allow it to meet and exceed Directive 74 requirements by 2014.

Syncrude has also proposed the addition of new technology to comply with Directive 74, which includes the full operation of a commercial demonstration plant for Mature Fine Tailings Centrifugation by August 2012, as well as the construction and startup of a full-scale supplemental tailings plant by June 2015.

The three remaining tailings plans still under review were submitted by Canadian Natural Resources Limited for its Horizon project and Shell for the Jackpine and Muskeg River projects. CIM

Vancouver-based Greystar Resources Inc. has appointed David Newbold as its CFO. Newbold, a chartered accountant with over 36 years of international experience in mining and finance, will lead the effort to secure financing for the Angostura gold and silver project. He was most recently a consultant assisting companies on their overseas business development and mining investment opportunities.

Goldcorp Inc. has appointed David Deisley as its executive vice-president, corporate affairs and general counsel and Timo Jauristo as its executive vice-president, corporate development. Deisley will assume the responsibility for the company’s government relations and sustainability functions, in addition to continuing to manage legal affairs. Jauristo has been the architect of a variety of valueadding transactions for Goldcorp since joining the company in June 2009 and will continue to seek out opportunities to enhance the company’s high-quality asset portfolio.

Brant Hinze has been appointed executive vice-president and COO of Kinross Gold Corporation. An accomplished industry leader with significant operating experience in several key mining regions of the world, Hinze was most recently senior vice-president, North American Operations, for Newmont Mining Corporation.

Philippe Monier has been appointed vice-president, corporate affairs and CFO of Anvil Mining Limited. With over 25 years of international finance experience within the resource sector, Monier’s past positions include CFO for Bateman Engineering, Dynatec and BHP Billiton Base Metals.

Jean-François Boursier has been named CFO of ADF Group. A chartered accountant, Boursier brings solid experience in financial management. He recently held the position of corporate controller at Héroux-Devtek and previously worked at Holcim Canada (St-Lawrence Cement) for more than 16 years, where he held various positions, including corporate controller from 2001 to 2005.

Vancouver-based Redzone Resource Limited has named Pauline Pasetka as its CFO. A certified accountant with over 10 years of finance and management experience, Pasetka was formerly a director of Brett Resources Inc., a mineral exploration company, until its recent acquisition

by Osisko Mining Corporation.

news Supply constraints Australia and Canada coal industry face logistics and capacity challenges

The number of ships Installation of the slew deck of stacker-reclaimer 1 at delayed at Australian the new coal export terminal operated by Newcastle Coal Infrastructure Group in the Port of Newcastle ports hit a record of 223 bulk carriers in early 2010. “The situation has drastically improved,” said Commodore Research & Consultancy’s Jeffrey Landsberg. As of midAugust, that number had come down to about 145 vessels congested at Australian coal and iron ore ports, but he added that “things in this market can change very quickly.”

Canada’s coal shipping facilities Ridley Island near Prince Rupert, and centre around three major terminals: the Neptune and Westshore terminals

22 | CIM Magazine | Vol. 5, No. 6

Photo courtesy of NCIG

By Jeff Borsato

in the Vancouver area. Allen Wright, president and CEO of the Coal Association of Canada, believes the difference between Australia and Canada’s export levels is one of supply versus logistics: “Westshore and Neptune have some additional capacity while Ridley Island has considerable potential to carry more coal, whereas Australia faces greater logistical issues getting coal into port and onto ships.”

With an estimated 5.9 billion tonnes of hard coal consumed globally last year, Australia and Canada continue to benefit from a global commodity boom but face different issues with respect to coal and coal export capacity. The mineral remains Australia’s biggest export commodity, accounting for over 50 per cent of world coking coal exports, with almost 75 per cent of those exports destined for Asian markets (primarily Japan).

As the largest coal exporter in the world, the coal industry in Australia is serviced by nine loading terminals located in Queensland and New South Wales. It also houses the Port of Newcastle, the world’s largest coal port. Freight bottlenecks have increasingly occurred in the past five years,

news

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primarily at the Dalrymple Bay Coal Terminal (DBCT) and at Newcastle’s Port Waratah. A pair of capacity management systems were developed to cope with the problem of how to reduce queues. They insure that each stage of the exporting process — from loading and rail logistics to demurrage costs — is factored into the execution of shipping operations.

The responsive development of new mine sites and logistical support in the form of rail and port infrastructure are critical to Australia’s coal export industry. Seeking to ease congestion at the Port of Newcastle, the Newcastle Coal Infrastructure Group (NCIG) has committed $850 million to increase the capacity of the Hunter’s coal export chain in anticipation of 30 million tonnes per year in shipping capacity. This was confirmed in a May 2010 announcement of a third terminal opening at Newcastle, along with a second phase of expansion set for 2011 and 2012.

With 98 per cent of all coal moved by rail in Australia, rail issues continue to hinder growth. A national approach to planning freight transport on both roads and rail is gradually being developed. Capacity at The Port of Abbot Point is upgraded being from 21 to 50 million tonnes, through construction of the $1.1 billion Missing Link railway slated for 2012.

While infrastructure issues remain the single greatest barrier to export growth for Australia’s coal sector, Canada’s most pressing issues pertain to mine permitting and mine-site expansion, said Wright. “Efficiency is essential at each port in regards to capacity concerns, but right now, mine expansion is critical to addressing the increased demand for coal; our exporting capacity can still absorb it,� he said.

In 2009, Canada exported 28 million tonnes of coal, 90 per cent of it metallurgical. With approximately 70 million tonnes of annual production, centred largely in British Columbia

and Alberta, coal remains the number one commodity carried by rails and shipped from ports.

Recent expansions at Westshore have resulted in total annual increases in handling capacity from 24 million tonnes to 29 million tonnes. Potential developments at Ridely include the South Kaien, Coast, and Lelu islands.

This represents almost 1,000 hectares of land available for a variety of terminal activities. Additional production from openings at The Hermann and Willow Creek mines will help feed additional demand from Asian markets as they ramp up steel production following declines in 2008.

Economic Development Canada (EDC) expects the 2010-11 contract prices for coal to rise, but the forecast notes that they will remain below the 2008-09 highs. If a commodity supercycle is truly in its building stage, then both Australia and Canada stand to benefit greatly if they can keep apace of rising demand. CIM

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upfront EDUCATION/OUTREAC H by Heather Ednie

Capacity building in the midst of a crisis Golder employees support sustainable enterprise development to aid orphans Developing expertise

Photo courtesy of Golder Associates

Funding is awarded to projects based on a set strategy. Organizations seeking funding for their projects are referred to GTO manager and Golder Africa employee, Jon Howcroft, who meets with the organization for an initial evaluation to determine if the baseline criteria are met. Following that, at least one of the other trustees meets with the organization for a second-look assessment, and Howcroft then requests a proposal with a proper business plan. Projects must focus on orphan support and caring and have at least a five-year history to be considered for funding. In addition, its directors must be open to an interview as well as a site inspection. The board of trustees then evaluates the proposals and awards funding annually.

“Our strategy is to work with a small number of organizations and continue to help them through multiple projects,” Chambers explains.

“This way, we can see real benefits from our efforts. We see them grow, and we grow with them over time.”

Golder representatives sit on the board of directors of some of the organizations the company supports, offering business advice. “We have varying expertise to help them, and fill their ‘need’ gaps,” Chambers says.

Carlos Vilanculos's mission station, with the aid of GTO, supports 180 children.

t is a daunting statistic: By the end of 2007, nearly 12 million children were orphaned in sub-Saharan Africa due to the HIV/AIDS pandemic. Recognizing this growing disaster, in 2003 Golder Associates founded the Golder Trust for Orphans (GTO) to provide support to orphaned and displaced children and families in Africa. The GTO provides financial aid to non-governmental organizations (NGOs) caring for orphans through one-time grants and equity funding directed towards development projects that help them sustain their own activities. To date, the GTO’s efforts have supported over 1,000 children through 10 projects.

In 2005, when Lea Chambers, a marketing and communications professional with a passion for sustainable development, joined Golder Associates, few employees knew about the GTO. So Chambers helped to create a strategy to raise awareness for the program. This included developing a network of champions at each of the 160 global offices. These champions took on the challenge of raising funds for, and boosting awareness of, the GTO within the organization.

By the end of 2009, over US$1 million was raised for the GTO. About 40 per cent came from monthly payroll deductions offered by Golder staff, and another 40 per cent from local Golder office fundraisers. “We have offices doing stuff every month — from bake sales to volleyball tournaments,” says Chambers. The final 20 per cent was raised through external donations, mainly from clients and friends of employees.

I

24 | CIM Magazine | Vol. 5, No. 6

Mission Station of Carlos Vilanculos – Massinga District, Mozambique Since 2002, Carlos Vilanculos has been using his family’s farm to help his community. He dug a well to access clean water, cleared a large area to grow food, taught reading and writing, and launched a medical aid service for people with HIV/AIDS. Some of his patients asked Vilanculos to take care of their children when they died. He currently has six orphans living with him, and is supplying food and clothing to 180 more.

With financial support from the GTO, Vilanculos built an irrigation system, basic greenhouse facilities and planted a field of pineapples. Proceeds from the sale of produce generate funds to care for the children.

In 2009, the GTO donated US$15,000 to fund the construction and maintenance of three chicken coops.

Vilanculos now supplies broiler chickens raised on the farm to the local community. Proceeds from the sale of the chickens are used to buy food, clothing, notebooks and pencils for the children.

upfront EDUCATION/OUTREAC H

This year, Vilanculos submitted a proposal to buy pigs, in order to generate more income, and solar panels to reduce his reliance on petrol.

Bulembu Ministries – Swaziland Bulembu, Swaziland, was built on a mine operation that closed in 2001. With no jobs, the town was largely abandoned in the midst of the HIV/AIDS pandemic, and the resulting orphan crisis. However, through the efforts of a number of organizations led by Bulembu Ministries Swaziland and support from corporate donations, Bulembu aims to become self-sustaining by 2020, with the ability to provide care for 2,000 orphaned children.

Since 2006, the community has been assisted in a number of ways, including the construction of a medical clinic, daycare, school and infrastructure. In addition, economic stimulus has created over 500 jobs.

The GTO began its close partnership with an investment of US$70,000 to build a honey business. The funds seeded the creation of a production facility with 350 hives and the employment of a beekeeper. Proceeds from the business support six homes in the community, with eight orphaned children in each home. In 2009, the project grew to become the largest honey producer in Swaziland.

“Bulembu Honey provides monthly funding of nearly US$3,000,” says James Woller, director of operations at Bulembu Ministries. “An indirect benefit is that honey is used as a healthy sugar supplement for the children’s care program.”

In 2009, the GTO provided another US$20,000 to build a bakery in Bulembu. Prior to this project, the closest loaf of bread for Bulembu residents was in the next town, a fivekilometre walk. “One of the most visible impacts Bulembu

26 | CIM Magazine | Vol. 5, No. 6

Bakery has had on the community is establishing a storefront for community members to gather, socialize and congregate,” says Woller. “Sales of Bulembu Dairy and Bulembu Maize now occur at the bakery on the account system. To date, there are over 400 customers on account, who are invoiced at the end of the month.”

Woller says a number of new projects are in the works for 2011, including the development of an integrated community agriculture program and the rehabilitation of the old mine tailings.

The GTO joined a handful of companies providing critical support for the development of sustainable businesses in Bulembu, including Caterpillar, The Jim Pattison Group, G&J Parking and Teldon Media Group.

Lewa Children’s Home - Kenya The Lewa Children’s Home shelters approximately 120 children and includes a 200-hectare farm. The GTO has been helping the operation since 2006 through a variety of projects, including the acquisition and startup of beehives and honey extracting equipment, as well as renovating the children’s dormitory.

“The agricultural sector in Kenya for the domestic market is difficult,” explains Phyllis Chepkoech Keino, manager at Lewa Children’s Home. “Value-adding — which we started in 1999 after the collapse of the giant Kenyan creameries — has been a better option to generate income and makes us more independent.”

Currently, the farm primarily processes about 700 litres of milk daily into fermented milk and Gouda cheese to sell to hotels in Nairobi. This year, the GTO is providing a US$100,000 donation to enlarge the dairy and cheese facilities to nearly 2,500 litres of milk per day. “The expansion of our milk processing plant will not make us immediately independent from help from the ‘outside,’ but at least less dependent and less vulnerable,” Keino explains. “We will be able to overcome periods when fundraising will be more difficult — at least we will not have to refuse babies because of lack of funds or food.”

Keino says it is thanks to the GTO’s support to improve the existing facilities that the Home has been able to take in an increasing number of children. “The GTO is, in my belief, different in the sense that they are very supportive of the idea of starting/financing something that is income-generating,” she adds. “A lot of NGOs and/or financial institutions would not touch [the facility] once they heard [their money] will be managed by a Children’s Home. I guess we are doing something unique here.” CIM

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upfront TECHNOLOGY by Alexandra Lopez-Pacheco

Cutting a niche in a tough market The Bucyrus automated longwall plow arrives in North America

Photo courtesy of Bucyrus

Cliffs Resources currently uses the longwall plow at its Pinnacle mine in W. Virginia.

Bucyrus hopes to carve a deeper niche in the North American market.

or years, Bucyrus International, Inc. has known it had developed cutting-edge longwall automated plow systems capable of outperforming the system typically used today in longwall coal mining: the shearer. Here, the company believed, was the future of low-to-medium seam coal mining — offering tremendous improvements in everything from safety to productivity, cost-effectiveness and environmental responsibility. On the international market, many agreed; the company’s plow systems — one for extremely thin seams, one for thin-to-medium seams and another for extremely hard coal — operate in China, Czech Republic, Germany, Kazakhstan, US, Mexico, Poland, Ukraine and Russia. But back home, in North America, the South Milwaukee, Wisconsin-based Bucyrus hit a stone wall when it came to generating more market interest and acceptance.

“In North America there’s a mind block,” says Keith O’Neil, director of product management, longwall product group, Bucyrus International Inc. “There are still people in the industry who view plows as being unproductive, not powerful enough, all based on experiences from back in the 1970s when we didn’t have all the automation, the power that we do today. So they have a false perception that the plow still cannot compete with a shearing machine. And that’s absolutely not the case. We have completely reinvented the plow using today’s technology. We’re now able to produce systems that can rival and actually exceed the productivity capabilities of shearing machines in low and even medium seams up to 71 inches in height.”

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28 | CIM Magazine | Vol. 5, No. 6

An informed, contrary decision This past July, however, Cliffs Natural Resources, an international mining and natural resources company, joined Bucyrus in a noteworthy announcement that could just mark the beginning of the end of that North American mind block. After exhaustive analysis, Cliffs had selected Bucyrus’ plow system for its Pinnacle coal mine near Pineville, West Virginia. The plow is not new to Cliffs. For decades, the Pinnacle mine was the only one in the U.S. — and only one of two in all of North America — that operated a longwall plow system; albeit one it had developed with partners in Germany that was far more efficient than the stereotypical plow most in the North American coal industry imagine.

But when it came time to update its equipment, Cliffs seriously considered switching to a shearer.

“When we started this selection process back in 2007, there were a lot of people looking at the reserves who said we may need to switch to a shearer,” says Russell Combs, Pinnacle Mine’s general manager. “We were very close to making the decision to go to a shearer but we decided to back up and take a look at a few things.”

One of the first things Cliffs considered was safety. The plow is operated remotely, requiring no operators at the face. “With today’s automation technology, the plow is a very safe system,” says Combs. “The shearer requires that you have people going back and forth with it. There’s a lot of dust generation, rock that can fall in and come over on the folk. In a shearer, there are a lot of moving parts, so you have to be very diligent with your safety lockouts. With a plow, you’re able to use sprays that follow it along for dust suppression. And you don’t have electric motors and other electrical components on the plow itself; those are at the ends where there are people in controlled conditions to monitor the gasses. With a shearer, there are electrical cables and motors right on that shearer that keep moving back and forth all the time so you do have the potential for gas accumulation that could ignite with an electrical current. In a plow, you have some electricity that goes across on the shields but it’s not moving back and forth all the time. It’s safer.”

In the past, the performance of conventional plows was often compromised by variations in coal hardness, which led to different cutting depths, resulting in overloading of the conveyor and downstream equipment or jamming of the

upfront TECHNOLOGY

plow. Because the Bucyrus system is based on incremental plowing, it is able to avoid these complications. “The plow works great on our site,� says Combs. “It follows the seam without manually having to control exactly where it is mining. With this plow, you just set it up, and it will go up and down with the seam. It follows the seam very well to keep us with a good clean product, not taking the rock. It will mine as much or more coal, certainly more in lower seams but as much in the higher seams as a shearer.�

A cleaner cut Historically, plows often lacked the horsepower to proceed when they encountered extremely hard-cutting conditions. The resulting manual intervention and slowdown in production was one of the reasons the industry turned to the shearer, which has the horsepower to cut rock — and cut rock in abundance it does. This means the rock has to be removed from the coal in the preparation process, energy has to be used in moving it and eventually all that rock has to go somewhere. “What’s happening is that with the regulatory agencies gaining more and more influence over issues like rock impoundment, reject piles, refuse piles — the whole nine yards in terms of environmental impact — the cost of

preparation of coal, not only the preparation cost itself in terms of washing the coal but also the disposal of the reject, is becoming a major expense,� says O’Neil.

The horsepower in today’s Bucyrus plowing systems exceeds the specific energy that a like-sized shearer can deliver, says O’Neil, explaining that the plow basically works as a slicer attached to a continuous loop chain up to 42 mm in diameter that allows as much as 2,160 horsepower to be put into the cutting action. That means that the powerful Bucyrus longwall plows permit far more precision, minimizing reject material, resulting in energy cost-savings both in the mining process as well as in the preparation of the product. “With the shearer, it was going to be such that we might not have enough room for storing rock in our impoundment area for the life of the mine,� says Combs. “And right now, there’s a lot of concern about the storage and new areas and where do you store this rock properly to not affect streams and such. So environmentally, this was a good choice for us also. With this system, they’ve cleaned up a lot of things. It’s very modular in changing parts, very ergonomic for getting up and down the conveyer, more room, no protrusions hanging down so you can quickly move across the face without a lot of obstructions. It’s a lot of really good technology.� CIM

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September/October 2010 | 29

upfront NEW FRONTIERS by Peter Caulfield

Advancing extraction techniques New technologies vie for a piece of the growing in situ pie ince the 1990s in situ operations have relied heavily on steam-assisted gravity drainage (SAGD) for bitumen extraction in the Athabasca oil sands. In the Cold Lake and Peace River oil sands areas, cyclic steam stimulation (CSS) also has its niche. Across the regions, in situ extraction is projected to surpass mining as the primary source of bitumen production by 2016, according to the Canadian Association of Petroleum Producers, and SAGD operations and CSS, to a lesser extent, are set to lead the industry to that milestone.

However, other technologies, including toe-to-heel air injection (THAI™), combustion overhead gravity drainage (COGD) and enhanced solvent extraction are increasingly ready to break new ground. Each of these processes was developed by Calgary-based organizations and each claims to offer economic, environmental or operational improvements over more traditional insitu extraction technologies.

All three technologies rely on heat to help make the bitumen sufficiently mobile to bring it to surface. But they differ in the methods they use to heat the reservoirs and the amount of heat required to recover the bitumen.

S

Toe-to-heel

Image courtesy of Petrobank

In 2001-02, Petrobank Energy and Resources Ltd., an oil and natural gas exploration and production company with operations in Colombia and western Canada, acquired the toe-to-heel air injection (THAI™) technology from the Alberta Research Council. The technology uses combustion initiated from vertical air injection wells to heat in the reservoir, and gravity to collect the oil in the horizontal production wells to recover heavy oil and bitumen.

In THAI™, horizontal production wells are drilled to the base of the reservoir. Then air injection wells are drilled vertically at the “toe” of the production wells. A small amount of steam is injected through the vertical and horizontal wells

Toe-to-heel air injection (THAI™)

30 | CIM Magazine | Vol. 5, No. 6

for two to three months to heat the reservoir near the well bore and create a path of “communication” between the injector and the producer. Once the heavy oil or bitumen is hot enough to become mobile, air is injected into the formation through the vertical air injection well.

When the air contacts the heavy oil or bitumen, it starts a combustion reaction. As more air is injected into the formation, the vertical combustion front moves along the horizontal well, from the toe to the heel of the production well. As temperatures increase, the heavy oil or bitumen reaches a high temperature at which partial upgrading occurs.

The partially upgraded oil, along with vapourized water and gases that form during combustion, drains into the horizontal well. Once it has made its way to the surface, the oil is piped through the plant facilities where it is treated and then sent to market.

According to Petrobank, the THAI™ process has proven important benefits. They include an estimated 70 to 80 per cent recovery oil rate, lower capital and operating costs, and lower environmental impacts, such as no water and natural gas use. Furthermore, the process upgrades the oil within the reservoir itself, making a higher quality oil that requires less upgrading at surface.

Petrobank says the patented THAI™ process has been tested and field proven at its Whitesands pilot project south of Fort McMurray since 2006 and, more recently, at its Kerrobert project in Saskatchewan. The company has other THAI™ projects in addition to Whitesands: the upcoming 7,000 barrel per day Kerrobert expansion; the 10,000 barrel per day May River Phase 1 project near Whitesands; and the Dawson project in the Peace River area of Alberta. All together, Petrobank has the potential to recover approximately one billion barrels of oil from its leases.

Chris Bloomer, senior vice-president and COO heavy oil, says Petrobank’s strategy is to capture a global portfolio of heavy oil resources where the application of THAI™ could lead to both improved recovery rates and third-party licensing agreements.

Combustion overhead Excelsior Energy Limited is a small (four full-time employees) publicly listed company that has big plans. It wants to develop oil sands resources on its leases in northern Alberta using a new process called combustion overhead gravity drainage (COGD), a proprietary technology developed by Excelsior in consultation with the In Situ Combustion Research Group in the Schulich School of Engineering at the University of Calgary.

upfront

Image courtesy of Excelsior Energy

NEW FRONTIERS

Combustion overhead gravity drainage (COGD)

Excelsior operates 58 sections of Athabasca oil sands assets in the Hangingstone and West Surmont areas south of Fort McMurray. The leases hold over two billion barrels of bitumen in place as of July 31, 2009. The company says the Hangingstone property has the potential for 50,000 to 80,000 barrels per day.

COGD employs a set of vertical air injector ignition wells above a horizontal production well that is located at the base of the bitumen pay zone. A multi-step pre-ignition heating cycle that uses steam — a proprietary technology for which

Excelsior has filed for a patent —prepares the cold bitumen in the reservoir for ignition and makes it more mobile.

Upon ignition, a combustion chamber develops above and along the length of the horizontal well. Combustion gases are separated and segregated in the upper part of the reservoir and hot bitumen flows by gravity into the horizontal production well. Combustion gases can be collected in vertical vent wells on the sides of that part of the reservoir under exploitation, and returned to the surface for treatment.

COGD is like SAGD in that the pre-ignition heat cycle uses cyclic steam and steam flood techniques to predispose the viscous oil reservoir to form a combustion chamber. But, says Excelsior vice-president engineering and COO Rob Bailey, COGD has important environmental advantages over SAGD. “COGD can reduce water consumption by 90 per cent and fuel gas consumption by 69 per cent,” he says. “And it can produce a barrel of bitumen with 45 per cent fewer CO2 emissions.”

In addition, he says, there are significant savings in capital and operating costs and economic viability at a price of West Texas Intermediate (a type of crude oil used as a benchmark in oil pricing) as low as US$40 to $45 per barrel.

In June 2009, Excelsior submitted an application to develop an experimental COGD pilot project on its

September/October 2010 | 31

upfront NEW FRONTIERS

Hangingstone asset. The company says the pilot project will produce up to 1,000 barrels per day.

from the injection well to the colder perimeter of the chamber where it condenses, delivering heat and fresh solvent directly to the bitumen extraction interface. Nenniger says this part of Enhanced solvent the process is up to three times faster than SAGD. The conThe enhanced solvent method of N-Solv Corporation densed solvent and oil then drain by gravity to the bottom of builds upon the commercially proven gravity drainage and the chamber and are recovered through the production well. horizontal well technologies, says CEO John Nenniger.

Compared to other in situ processes, Nenniger says, temHeated solvent (propane) vapour is injected at moderate pres- perature and pressure using the N-Solv process are very sures into the gravity drainage chamber. The vapour flows gentle. “GHG emissions are directly linked to the amount of energy consumption (i.e. extraction temperature),â€? he explains, “so N-Solv at 40ÂşC, provides a huge GHG improvement over steam at 200 to 300ÂşC and combustion at 400 to 600ÂşC. N-Solv has 86 per cent fewer GHG emissions than SAGD.â€?

In addition, the solvent extracts only the valuable components of the bitumen and leaves behind most asphaltenes. As a result, the oil that is produced contains less sulphur, heavy metals (nickel, vanadium, iron) and carbon residue. It is also 100 times less viscous, which means it requires less diluent for transportation by pipeline to the refinery.

Other benefits of the process claimed

by N-Solv include no water consumption; 30 per cent reduction in capital cost ($360 million savings for a typical SAGD); 80 to 95 per cent less energy than steam processes; and synergy with co-generation, whereby all of N-Solv’s thermal ĞůĞÄ?ĆŒÄ‚Ć&#x;ĹśĹ? ĎŻĎą zÄžÄ‚ĆŒĆ? ŽĨ 'ĆŒĹ˝Ç ĆšĹš ĂŜĚ džÄ?ĞůůĞŜÄ?Äž requirements are supplied from waste Custom Steel Forming | Plant Maintenance | Machining | Heat Exchangers heat. At current prices, Nenniger calculates the propane solvent, which is Edmonton Exchanger features a wide range of products and services for applications recoverable, will cost less than the natural in various industries that include oil and gas, petrochemical and power generation. gas burned for steam generation in SAGD. Our custom steel forming division specializes in the fabrication of large-scale pressure Nenniger says that because N-Solv is an vessel components and features steel forming capacities that are some of the largest environmentally friendly technology, profit of their kind. We offer the most extensive one-stop head forming and shell rolling capabilities in North America, and one of the largest inventories of pressure vessel margins are expected to be five times greater quality steel plate in the world. than steam-based alternatives. The next step is to prove as much. N-Solv has an agreeAdditionally, we offer a wide range of machining services and specialize in largement to run a field pilot program at Suncor’s scale milling and CNC tube sheet drilling for heat exchanger applications. Edmonton ([FKDQJHU DOVR SURYLGHV RQ VLWH SODQW PDLQWHQDQFH VHUYLFHV IRU UHÂżQHULHV IHUWLOL]HU Dover site, where SAGD was originally plants and the petrochemical industry. Our services range from controlled bolting and piloted, in order to provide a benchmarking SRUWDEOH ÂżHOG PDFKLQLQJ WR FRPSOHWH WXUQ NH\ SODQW DQG UHÂżQHU\ VKXWGRZQ SURMHFWV comparison. Once the capital is secured to www.edmontonexchanger.com get the project running, it will take several years to run the test pilot through a depletion cycle, Nenniger says. But it will require only one or two years to discover if the process is commercially viable.

If the pilot shows N-Solv is commercially viable, the company intends to license the technology widely to ensure that cleaner technology is accessible to producers. CIM 32 | CIM Magazine | Vol. 5, No. 6

upfront P RO C E S S I N G by Dan Zlotnikov

Shining a light on oil sands production

Photo courtesy of Imperial Oil

Spectroscopy could bring flash of insight to ore processing tion readily available. Myers points out that the clay lenses or poor processing ores can be small enough to slip through, even when the mine geologists are taking core samples a mere 50 metres apart. The obvious answer — decreasing the spacing between core samples — becomes prohibitively expensive very quickly.

Rivard says a unique aspect of the oil sands makes the current spectroscopy project possible. “The reason we’re able to see how much there is of each particle size is that the fines are dominated by a certain type of mineral — clay minerals,” he explains. “The sands are dominated principally by quartz and feldspars.” Each has a unique signature that allows one to be distinguished from the other and appropriate processing The unique light signatures of high-grade ore (left) and low-grade ore from a clay lens could be the answer to adjustments made. quickly identifying and separating the two.

Rivard says that the researchers are not examining grain espite being known as the oil sands, Alberta’s bitu- sizes directly but are able to extrapolate from the mix of minmen-rich ore is more than just plain sand. Rather, eral types in the sample. In other contexts, says Rivard, a single the soil is largely a mix of silts, sands and clay, and mineral type would be spread across multiple grain sizes, makthe variability can present serious challenges to the ing the technique inapplicable.

Of course it is one thing to show that something works in surface mine operator. Ron Myers, manager, facilities and the lab and entirely another to implement it in the field. environment research at Imperial Oil, says the variation in What Imperial wants from the project is a way to provide the mix being mined can have enormous impact on the extraction plant. real-time ore composition and particle size readings from the That is where the project led by Benoit Rivard, professor mine face, says Myers. These can then be used to adjust the and associate chair of Earth and Atmospheric Sciences at the processing conditions at the extraction plant or froth treatUniversity of Alberta, offers much promise. The underlying ment facility, ensuring optimal recovery levels and smooth science is pretty straightforward: shine a very narrow wave- operation. length of light at an ore sample, record the intensity of the light being reflected, and repeat the process across a range of Bringing the lab to the mine face wavelengths. The result is a spectrographic “fingerprint” of Of course, putting the spectroscopic equipment at the the sample which, Rivard says, “can be informative in regard mine site presents a number of significant challenges, says to the material makeup,” helping to anticipate and avoid Rivard. The first of these is the limited time available to costly interruptions at the extraction stage. examine a given sample. The ore is constantly moving from the dragline to the processing plant and if the sensors cannot A fine solution keep up with the pace, the data they produce will arrive too “If you go from what’s a good processing ore to suddenly late to do any good. The issue, he explains, is that the less hitting a clay lens with a very high fines content, and that time a sensor spends collecting reflected light at any given goes into the plant without any warning, you could upset wavelength, the higher the chance of measurement errors extraction to the point where your bitumen recovery per- creeping in. centage goes from the mid-90s to as low as 50 per cent,” The situation is going to be further exacerbated by the Myers explains. uneven nature of the chunks of ore being sampled, Rivard The financial impact of a major recovery drop can be adds. “The ore will be blocky, with different sizes of blocks. enormous, with no cost-effective ways to address the situa- When you shine a light on it, there will be shadows; some

D

34 | CIM Magazine | Vol. 5, No. 6

upfront PROCESSING

parts may be well illuminated while others are in shadow,� all of which will alter the amount of reflected light and decrease the accuracy of the measurements.

The other major issue is one of the sensors themselves.

Rivard and his team are working with both the short-wave infrared (SWIR) and long-wave infrared (LWIR) parts of the spectrum, in addition to visible light. But according to Rivard, there is no single detector array capable of handling both parts of the infrared spectrum, requiring twice the equipment and far more than twice the cost. Rivard says that while a SWIR sensor array may cost $100,000 to $150,000, the LWIR sensors start at $300,000 and can be as much as one million dollars each. These costs are for equipment, which would not last long in the harsh conditions of the mine, Rivard says. How much do the rugged-duty versions cost? No one knows for certain — they do not exist at this time.

While the challenges are significant, they are certainly not insurmountable, and Rivard and his team are preparing for the field trial stage. Sensor improvements are also set to help the project, Rivard adds. “In the last two years we’ve started seeing imaging cameras as opposed to point spectrometers, which is what we’ve been doing for many years and what I have in my lab,� he explains.

The cameras allow researchers to collect measurements from multiple points on the sample simultaneously, potentially speeding up the process significantly. Rivard says he has received a Canadian Foundation for Innovation grant to purchase a long-wave camera and is now starting to plan the field trial stage, which he expects to begin in a year’s time.

A COSI partnership It was no accident that brought Rivard to Imperial Oil. Myers explains that five years ago, Imperial’s CEO at the time, Tim Hearn, came to the company’s oil sands R&D group with a task. “He said, ‘I see a need to do some breakthrough research that could lead to improved environmental and economic performance, and I think we could do that at a university, and I think we could leverage our research dollars’� Myers recalls, “and he asked us to develop a proposal on how to do that.�

The result of that initiative was The Centre for Oil Sands Innovation (COSI), a partnership between Imperial Oil and the University of Alberta. Imperial contributed $10 million in funding over the following five years, with the governments of Alberta and of Canada joining in to contribute additional funds. Rivard’s research is one of the more than 20 projects currently comprising the portfolio at COSI. While COSI is based at the University of Alberta, Myers adds, the centre funds research with partner universities across Canada. “We go where the capability exists and solicit those projects from researchers who have the right skills and capabilities,� he says.

Myers also highlights the nature of the research conducted under the umbrella of COSI — the work is

fundamental in nature, focusing more on the underlying concepts than specific industrial implementations.

Imperial’s intent with COSI, he explains, is to fund breakthrough projects with potential for major environmental and efficiency improvements.

Myers adds that Imperial accepts the risk associated with this type of research. “We also recognize that not all projects will be successful. We may fund a project for two or three years and when completed, although there has been some very good work done, we will wrap up the research, as a promising new lead may not have emerged.�

It is also worth noting that Imperial is not the only beneficiary of COSI research. “All the work that comes out of COSI is ultimately published,� Myers says. “A lot of the work is being done by graduate students, and it’s important for them to publish their work. That’s an important aspect of COSI projects.�

Nor are other oil sands operators going to be locked out of the advances. “There is an obligation for Imperial — for any projects that result in commercial technology — for that technology to be made available to third parties,� adds Myers. “These parties would typically pay a reasonable royalty or license fee, the proceeds of which would be shared by Imperial and the universities.� CIM

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September/October 2010 | 35

upfront SUSTAINABILIT Y by Marlene Eisner

A witness to history The reclamation of Suncor’s Pond 1

The site prior to reclamation

Photo courtesy of Suncor

The very first tailings pond Suncor’s Pond 1, adjacent to the Athabasca River in northeastern Alberta, covers 220 hectares (about 2.2 square kilometres). It was part of the first commercial-scale oil sands operation in Canada, commissioned in 1966 when it The reclaimed tailings pond includes wetlands for waterfowl and an array of grasses, trees and shrubs. was owned by Great Canadian Oil Sands think we slayed a dragon,� says Matt LeBlanc, general Limited, a subsidiary of the Sun Oil Company, and now manager, Reclamation Mine Operations Oil Sands, owned by Suncor.

Suncor Energy. “A lot of people thought we couldn’t Reclamation of the pond dyke walls began in the late reclaim an oil sands tailings pond.� But proof to the 1960s when very little was known about how to go about contrary is taking root in the oil patch north of Fort planting a sustainable vegetation cover on the dyke’s surMcMurray. There, among hundreds of thousands of trees face. At the time, reclamation goals were considerably more and shrubs, animals now inhabit what had been a tailings modest, and environmental regulations were in their pond for the last 43 years. infancy.

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Leblanc says that 35 years ago no one really knew the steps to reclaim a tailings pond. “One of the first jobs I had in 1976 was standing in Pond 1 and blocking up a tailings line. I never expected to be back reclaiming it.”

After decades in operation, the pond is now being closed in a highly regulated environment with a substantial knowledge base of reclamation techniques, well-defined reclamation goals and clear end land use targets. With nine existing ponds that cover 31.8 square kilometres, the reclamation of Pond 1 is a monumental step forward for Suncor as it begins to decommission its ponds.

Learning on the fly The initial design of the Pond 1 tailings storage facility consisted of a 12-metre high retention dyke built over Tar Island. The dykes were constructed to contain the sand and water tailings released from the bitumen removal process. Initially, overburden from the mining operation was used in the construction. It soon became obvious that using tailings sand with an overburden core was a more appropriate method of building the dam enclosure. “This allowed us to safely build the pond higher,” says LeBlanc. “It now stands 91 metres above the river.”

The decommissioning Suncor took a three-phase approach to accelerate reclamation activities. In phase one, the northern half of the pond began receiving reclamation material in 2007.

During the next phase, the southern half of the pond continued to receive tailings while the phase one area underwent surface reclamation. The final phase consisted of a small area of soft tailings that was mechanically stabilized using geo-grid and tailings sand, and was the last area to undergo surface reclamation.

Once the water and fine tailings had been removed, infilling – 30 million tonnes of clean sand – was used to fill the pond. This was completed in October 2009. “We removed the water and transferred a portion of the mature fine tailings to be used as a feedstock in our consolidated tailings process,” explains LeBlanc.“BGC Engineering Inc. provided us with the design for the surface topography and landscaping details for the pond,” says LeBlanc. “One of the first tasks we undertook was to construct the drainage system and swales. As we were completing those, we started to place topsoil.”

A total of 1.2 million cubic metres of topsoil, to a depth of 50 centimetres, was placed on the pond, so that trees and shrubs could be planted. In spite of the best laid plans, no one factored deer into the equation. “In 2009, we planted standard jack pine seedlings, which are high up on the menu of the local deer,” explains LeBlanc. “They walked through and ate every tree that we planted. Fortunately, only a small area of the pond

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upfront SUSTAINABILIT Y

had been planted at the time.” In 2010, the area affected was replanted with white spruce, which the local deer population will only eat if nothing else is available.

Looking ahead Although LeBlanc considers the reclamation of Pond 1 a success, a series of on-site monitoring systems will allow Suncor to track the site. “We’ve put in a significant amount of instrumentation to monitor what’s happening,” he explains. “Physical and chemical properties are being monitored, as well as the growth of trees and shrubs and rate of return of the wildlife.”

The total cost of the project was within expectations and LeBlanc says money has been put aside so that five years down the road, there will be funds available if touch-ups are needed.

Over the past three years, Suncor has fulfilled the request of the local Aboriginal community to turn the area into something nearer to what it once was. “We had the resources and the support we needed to get the job done,” says LeBlanc. “It is performing very well and is currently exceeding our expectations.” CIM

On to Pond 5 No two tailings ponds are alike, so the reclamation process for each is different, says Suncor’s Matt LeBlanc.

Suncor began work in January on Pond 5, which was decommissioned in November 2009. The pond, which measures 440 hectares, is a consolidated tailings pond where coarse sand and mature fine tailings were combined with gypsum to accelerate the release of water. “What we’re going to do is place petroleum coke over the surface of the pond where it is soft, and dewater using wick drains,” says LeBlanc.

The coke is only applied during the winter months and will continue in this fashion until the surface becomes solid enough to safely support construction personnel and equipment for reclamation activities, such as further dewatering.

“We’ve had some real breakthrough successes in Pond 5,” says LeBlanc. “We established coke roadways on the soft structure by starting construction in the wintertime, resulting in a road on which we can drive large trucks. We laid out some geo-fabric and geo-grid on the frozen tailings, and then placed three metres of coke on top.” These roadways will provide a solid platform to support future dewatering activities on the pond.

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upfront Q&A by Eavan Moore

Exploring the frontier

Photo courtesy of Alberta Innovates

Eddy Isaacs’ at the helm of Alberta’s re-branded energy and environmental R&D authority Dr. Eddy Isaacs has spent his career in research and technology. After two decades of working in heavy oil and oil sands at the Alberta Research Council (now Alberta Innovates Technology Future), Isaacs came on board the former Alberta Energy Research Institute (AERI). This year, AERI morphed into a new Alberta Innovates corporation, Energy and Environment Solutions (EES), picking up the Alberta Water Research Institute along the way. Appointed CEO of the group, Isaacs leads staff and consultants in developing research and technology projects that meet Alberta’s economic and environmental needs. CIM spoke to him in August about his work.

CIM: How is EES different from its predecessor?

Isaacs: The corporations were created to be able to carry funds forward from year to year. That’s important in research and technology; you don’t always have good projects when you want them.

We are at arm’s length from the province and have a greater freedom to operate, including less administrative requirements that are typical of a government system. The province provides EES with funds and we are accountable to deliver on programs that position Alberta for the future in energy and environment. We have a very business-savvy board that provides important oversight to ensure we achieve our goals and targets.

CIM: What is the budget for EES? Isaacs: Our base budget will be around $20 million. We get additional funds from time to time, which are then allocated to specific areas. For example, we have invested around $35 million in a City of Edmonton waste-to-biofuels project, next generation upgrading technologies and a front-end engineering study for a clean coal plant, with funds made available through the Department of Energy.

The amount of additional funding will generally depend on the fiscal health of the province.

40 | CIM Magazine | Vol. 5, No. 6

CIM: How are projects chosen for funding?

Isaacs: We focus on three strategic areas: energy technologies, environmental technologies and renewable and emerging resources. We investigate what technologies are out there and how we can best adapt them to Alberta’s needs, so we’re constantly monitoring what’s happening globally. Sometimes we formulate initiatives that respond to the Alberta government’s strategic priorities, then issue an expression of interest or a request for proposal.

Another way is for people to come to us with an idea. If it fits our framework, we work with them to jointly develop a project.

CIM: What are your plans for clean coal research and what will be the impact of new federal requirements for coal-fired plants’ emission performance?

Isaacs: We work very closely with the Canadian Clean Power Coalition (CCPC) looking at technology options to maintain coal as a viable and important Canadian resource into the future. A number of projects analyze and examine the feasibility of both current and next generation technologies such as gasification with carbon capture and storage that can be adapted to Canadian coal needs. We are involved with work in coal cleaning and have a number of research projects at the University of Alberta. We are also supporting a newly established centre on carbon/coal and mineral processing at the university.

Traditionally, we have done a lot of work on carbon management and especially carbon capture and storage (CCS). One such project is the Shell Quest project, which is delineating CO2 injection into deep saline formations, basically to learn more about the rates of CO2 injection and the volumes that the saline aquifer(s) will take. The Shell Quest project is a CCS project that will move from field trials to commercial-scale application in the coming years. Results from these studies will be important for the future of coal as companies such as TransAlta look at the feasibility of using CCS in their operations.

With lower natural gas prices, the simplest thing is to switch to natural gas. But the requirements do motivate looking at newer and more efficient technologies.

CIM: In what direction do you see research work following?

Isaacs: EES’ mandate has expanded over that of AERI in that the environment is considered beyond the energy industry. The addition of the Alberta Water Research Institute, whose mandate includes water quality and safety of Alberta’s water resources, exemplifies that.

upfront Q&A

When we started out as AERI, maybe 75 per cent of the work we were doing was in oil sands. But now, a large portion of our projects is in renewable energy. With the Water Research Institute’s work and our planned work in tailings, a larger chunk is taken up by clean water and water recycling and reuse. We are also now much more involved in land use, biodiversity and sustainable development.

In renewable and emerging resources, we are looking primarily at bioenergy, geothermal and small projects related to electrical storage — how communities can produce their own electricity on a smart grid.

The emerging resources include the important area of underground coal gasification, which has the potential to change the dynamics of managing carbon while still producing power from deep coal resources.

We’re still very much involved in oil sands, because our work is all interconnected. For instance, our work in next-generation coal gasification technologies also has direct application to oil sands upgrading.

CIM: What past projects from AERI would you classify as success stories?

Isaacs: The recently completed lifecycle analysis comparison between oil sands and other North American crudes was a critical project for us and for the province. We are still working on a project with Pratt & Whitney Rocketdyne on a more cost-effective, next-generation gasifier, looking at the use of Alberta coals and petroleum coke from upgrading operations.

We have sponsored a number of projects with the

CIM: How do you judge the effectiveness of completed projects?

Isaacs: If you’re in research and technology, you don’t expect everything to move forward to commercial application. Our recent study of an integrated gasification combined cycle with CCS concluded that with current natural gas and electricity prices, it is not economic to build the clean coal facility. But the data is there, so it will be possible to revisit this in the future. I consider that part of the learning.

You need very few successes to pay off the investments that governments and industry are making in research and technology. Steam assisted gravity drainage technology, which essentially led to the development of the in situ industry in the oil sands, was one of around 16 less successful field pilots.

We just started a project to study how people measure sustainability, in general. We think this needs to be done sector by sector, not company by company. We also think it all has to be done through third-party verification so that the numbers generated are realistic.

September/October 2010 | 41

Department of Energy looking at in situ oil sands development. Some of them have gone past the pilot scale to a commercial demonstration scale. They involve the use of solvents with steam to reduce water use, reduce GHG emissions and improve overall recovery, while reducing natural gas use.

The underground coal gasification pilot with Swan Hills Synfuels is about gasifying coal in the deep underground to produce a synthesis gas that can be used for electrical generation. It proved successful as a pilot, and is now being funded through Alberta’s $2 billion investment in CCS looking at a commercial-scale project with the CO2 by-product to be used for enhanced oil recovery and storage.

We are currently assessing Alberta’s coal resources in view of underground coal gasification technology. We have a huge amount of coal that has probably not been recognized internationally because it was deeply buried and of not much use in thermal power generation. But with a new technology like underground gasification, it can be counted as reserves. As well, because it’s amenable to CCS, it makes a much more cost-effective way of producing electricity. Of course, it still needs a lot of work to make it commercial. That’s why we are involved, essentially, to make sure that, moving forward, we reduce the risk of applying more sustainable technologies. CIM

Achievements Top prize for rolling stone Bridgestone has won the Volvo Premium Supplier Award for 2009, which recognizes suppliers who book the best measured performance in the areas of quality, safety, environmental performance, costs, logistics and corporate social responsibility. Close attention is also paid to the supplier’s capacity to work with Volvo’s teams in the spirit of continuous improvement.

Bridgestone is the first tire manufacturer to receive the award. “This is a great honour and Bridgestone looks forward to maintaining its high level of quality service and its status as one of the Volvo Group’s long-term strategic partners,” said Takashi Tomioka, senior vicepresident, sales and marketing, Bridgestone Europe.

Having a conscience pays Suncor Energy is one of several successful mining companies and suppliers named on the 2010 Jantzi-Macleans list of the Top 50 Socially Responsible Corporations demonstrating that corporate social responsibility (CSR) is no longer a boardroom buzzword, but part of their business. The companies were selected on the basis of their performance across a broad range of environmental, social and governance indicators tracked by Jantzi-Sustainalytics. For complete listing, visit www2.macleans.ca/2010/06/14/socialresponsible-corp-2010.

42 | CIM Magazine | Vol. 5, No. 6

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Uncertainty the common prospect for metallurgical and thermal coal

By Dan Zlotnikov

O

n first blush, thermal and metallurgical coal are easy to lump together. While the methods used in producing the two are essentially the same, when the time comes to sell them one is destined to cross the world; the other is often consumed just a short hop from where it was mined.

Thermal coal is, as the name suggests, mainly valued for its heat-generating capability and used as a fuel in power plants. Alec Kodatsky, a commodities analyst with CIBC, explains that because for the most part thermal coal is a low-price product, shipping costs comprise a major part of the final price.

“In Canada, the bulk of thermal coal mined is literally shipped across the street and put directly in a power plant,” he says,

describing what are known as “mine-mouth” operations.

That said, there have recently been indications that Canada’s export market for thermal coal is on the upswing.

Metallurgical coal, on the other hand, is a must-have for steelmakers the world over. Because steel producers are prepared to pay a much higher price for their coal — and because metallurgical coal is far less abundant — this type of product frequently travels halfway around the globe on its way from mine to blast furnace.

The factors influencing the price of these two coals are also quite different. Mine-mouth operations are essentially a symbiosis between mine and power plant; transportation cost and low unit price of most thermal coals keep the two tied to each other. The main source of price fluctuation for the operator of a mine-mouth coal mine instead comes from the customers of the power plant.

Photo courtesy of Western Coal Corp.

The two faces of coal

coal

Photo courtesy of Sherritt Coal

exporter,” he explains. “But given their growth rates and their steel industry outpacing their own domestic production the requirement really shifted to needing to import coal.”

This need for more coal to fuel an economy growing despite the global economic slowdown meant that producers were diverting excess supply from European markets to China. One company that has seen this first-hand is Teck, the world’s second-largest coking coal exporter. Bob Bell, chief commercial officer and vicepresident of Teck Coal, says that in 2008, 45 per cent of the company’s metallurgical coal production was going into North Asia, mostly Japan, South Korea and Taiwan.

“During the financial crisis of 2009, we’d found that our European customer base was very heavily impacted by the downturn of the steel industry, where in China they actually

Genesee mine-mouth operation

“Thermal coal tends to be energy related as far as the overall level of pricing, and that’s of course probably much more closely linked to oil prices,” Kodatsky explains.

Mark Plamondon, senior vice-president of Sherritt Coal, agrees, explaining that “coal-fired power plants typically provide low-cost base-load electricity, which remains relatively stable during economic cycles.” As a result, he adds, production from Sherritt Coal’s Prairie operations has remained steady during the economic crisis.

Things can be much more volatile when it comes to metallurgical coal, demand for which is directly related to the demand for steel products. The two primary uses of steel — construction and the automotive industry — are in turn very sensitive to the state of the overall economy. If the economy grows faster, so does the demand for steel and the price offered for coking coal. A slowdown in the economy? Metallurgical coal producers are sure to start looking worried.

This story played out to dramatic effect over the past 18 months. The global credit crisis brought economic growth the world over to a grinding halt, and steel producers saw demand for their products plummet. Metallurgical coal producers soon felt the pinch, as demand dropped off sharply and spot prices dropped from $250 to $300 per tonne to below $130 per tonne. To put the figure in perspective, multinational mining giant Teck described 2009 in its annual report as “the worst year for the global steel industry in over 70 years.”

Asia-bound While things were difficult for both consumers and producers of metallurgical coal, the news was not all equally grim. China in particular, says Kodatsky, hit a landmark in early 2008 and became a net importer of coking coal. “Historically, they had been a fairly significant net September/October 2010 | 45

coal Photo courtesy of Western Coal Corp.

our product into North Asia, and had quite a dramatic decrease into Europe.”

Teck’s other Asian markets were not significantly impacted either, Bell adds. The raw tonnage amounts going to Japan, for example, remained roughly the same.

But at the same time, China went from buying very little to purchasing 20 per cent of Teck’s 19 million tonnes of 2009 coal production.

Going forward, Bell expects European demand to recover, but says North Asia will continue to account for over half of Teck’s coal sales. “In 2010, when our traditional customer base in Europe found that they required more material, they had demand for more of our products, so our sales into Europe started to pick up again,” he says.

“Although by that time, we had actually allocated a fair portion of our tonnage into Chinese markets, so we were not able to go back to the traditional levels.”

According to Kodatsky, the utilization rates of the steel industry are continuing to increase, both in North America and Europe. “It has been a steady increase from the bottoms that you saw in early 2009, and to date we haven’t seen a market slowdown of those rates,” he adds.

With utilization rates in the United States back up to 70 to 75 per cent — typically 90 per cent is the peak says Kodatsky — the Western countries’ steel industry is still not at optimal performance rates, but clearly headed that way. Couple that with an expectation of continued strong demand from China, and the need for more coking coal is clear.

Western Coal expects to reach an annual production of 10 million tonnes The prospect of continued strong demand is not lost on by the spring of 2013. the producers, who are putting a lot of effort into increasing production. Teck Coal, says Bell, is in the midst of an had very little impact,” Bell says. “There was just a brief expansion program that began in 2008 and is aiming to slowdown, but then Chinese steel production ramped up increase the company’s production volumes 50 per cent by very quickly. So in 2009, we actually sold 70 per cent of 2013. “That really comes from expansion of existing active mining facilities,” Bell says, but adds that Teck is also looking at reopening its Quintette Mine in northeastern British Columbia. The company is in the ŽǁŶ ƚŽ ĂƌƚŚ͘ hƉ ƚŽ ƚŚĞ ŚĂůůĞŶŐĞ͘ middle of a feasibility study and expects to make a decision on the reopening in late 2011.

Western Coal is in the middle of an aggressive expansion program of its own, says CEO Keith Calder. The company produced 3.2 million tonnes in its 2010 fiscal year (ended March 31, 2010), is on track to almost double that with six million tonnes of production in the 2011 fiscal year, and expects to <ůŽŚŶ ƌŝƉƉĞŶ ĞƌŐĞƌ ŚĂǀĞ Ă ƐƚƌŽŶŐ ƉĂƌƟĐŝƉĂƟŽŶ ŝŶ ůŽĐĂů ƉƌŽũĞĐƚƐ͕ ĂƐ ǁĞůů ĂƐ Ă ƌĞƉƵƚĂƟŽŶ ĨŽƌ ƋƵĂůŝƚLJ ƐĞƌǀŝĐĞ ĂŶĚ ƐƚƌŽŶŐ ŝŶƚĞƌŶĂƟŽŶĂů ƌĞƉƵƚĂƟŽŶ͘ tĞ ǁŽƌŬ ŽŶ reach its target of 10 million tonnes per ƚĞĐŚŶŝĐĂů ĞdžƉĞƌƟƐĞ ŝŶ Ă ƌĂŶŐĞ ŽĨ ƐĞƌǀŝĐĞ ƐŽŵĞ ŽĨ ƚŚĞ ůĂƌŐĞƐƚ ĂŶĚ ŵŽƐƚ ĐŚĂůůĞŶŐŝŶŐ year by March 31, 2013. ŝŶĐůƵĚŝŶŐ WŽǁĞƌ͕ DŝŶŝŶŐ͕ ŶǀŝƌŽŶŵĞŶƚĂů͕ ĞŶŐŝŶĞĞƌŝŶŐ ƉƌŽũĞĐƚƐ ŝŶ ƚŚĞ ǁŽƌůĚ.

Western’s operations currently cover tĂƚĞƌ͕ dƌĂŶƐƉŽƌƚĂƟŽŶ ĂŶĚ Kŝů ĂŶĚ 'ĂƐ͘ three geographic regions, with the &ŽƌŵĞĚ ŝŶ ϭϵϱϭ͕ ǁĞ ŚĂǀĞ Ă ůŽŶŐ ŚŝƐƚŽƌLJ ŽĨ majority of its production originating in northeastern British Columbia. The www.klohn.com company also operates two surface

Engineering & Environmental

46 | CIM Magazine | Vol. 5, No. 6

and two underground mines in West Virginia in the U.S. and has just moved from its 55 per cent stake in the Energybuild Group — the Welsh operator of the Aberpergwm anthracite mine — to full ownership. Welsh developments notwithstanding, Calder explains that Western’s focus today remains on the Canadian properties. “We have great growth capacity in northeastern British Columbia and we can ultimately push ourselves to nearly six million tonnes of high-quality metallurgical coal coming out of that area,” Calder says.

in the United States and globally as an energy source, and the key is not whether we’re going to continue to use it — the key is how do we use it better,” he says. “They’re setting standards and we just have to go forward and meet those standards. We’ve done it in the past, and I have every confidence we’ll do it in the future.”

Sherritt has already taken steps to meet the expected restrictions and to capitalize on the opportunities these will offer, says Plamondon. “Sherritt is using its extensive expertise to develop, adapt and implement clean energy

Cleaner coal, cleaner air The production expansions are not limited to metallurgical coal. Plamondon points out that much like coking coal, the international market for thermal coal is subject to the fluctuations in economic growth, and prices for export-oriented thermal coal have recovered significantly from 2009.

Higher-end thermal coal offers lower sulphur content and higher energy content, both highly desirable traits for power utilities facing ever-stricter emissions controls.

Sherritt has been expanding in an effort to capture more of the export thermal market, says Plamondon. To meet the growing demand for its production, the company reopened its Obed Mountain Mine in August of last year, and recently purchased the outstanding 50 per cent of the Coal Valley Partnership, making it the sole owner of the Coal Valley and Obed Mountain mines.

At the same time, Plamondon points to regulatory uncertainty as an area of concern among Canada’s thermal coal producers and power plant operators.

“A stable regulatory environment is needed to facilitate investment decisions for industry,” he explains. A recent announcement by the federal government is one uncertainty the coal power industry faces. The proposed legislation would require all coal power plants that reach their end of economic life to meet the newer, more stringent emissions guidelines without the use of offsets, or shut down.

This does not mean the end of coal power for Canada, says Allen Wright, president of the Coal Association of Canada. “On the thermal side, coal is still the most abundant here in Canada,

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September/October 2010 | 47

Coal country Coal fueled generating stations Manitoba Brandon Generating Station

Nova Scotia Lingan Generating Station Point Aconi Generating Station Point Tupper Generating Station Trenton Generating Station

Ontario Atikokan Generating Station first in ON switch to wood pellets in 2012 Hearn Generating Station Lakeview Generating Station Lambton Generating Station Nanticoke Generating Station Thunder Bay Generating Station

‘Mine-mouth’ operations Alberta* Battle River Generating Station - Paintearth mine Genesee Generating Station - Genesee mine H. R. Milner Generating Station - Coal Valley mine Keephills Generating Station - Highvale mine Sheerness Generating Station - Sheerness mine Sundance Power Station - Highvale mine

Saskatchewan* Boundary Dam Power Station - Boundary Dam mine Poplar River Power Station - Poplar River mine Shand Power Station - Boundary Dam mine

New Brunswick Grand Lake Generating Station - Minto mine - NB Coal Operations at the generating station and mine ended in June.

Source: Sherritt, Wikipedia.org

*Sherritt operates all Alberta and Saskatchewan mines

48 | CIM Magazine | Vol. 5, No. 6

technologies, which will enhance the value of its significant coal reserve assets and increase the utilization of coal in a long-term sustainable manner,” he explains, offering the examples of the recently opened Clean Coal Technology Centre in Fort Saskatchewan, Alberta.

Sherritt is also developing a number of “pre-combustion beneficiation processes,” Plamondon adds, aimed at reducing moisture and ash in low-rank coal. This offers benefits such as lower carbon dioxide emission intensities and lower operating and maintenance costs for coal-fired facilities.

A matter of price The recent shift by coal producers to a quarterly pricing contract structure from the previous annual approach is one development that has affected both sides of the coal world. “It’s more of a Chinese approach to buying raw materials, where they much prefer to buy on spot,” says CIBC’s Kodatsky, pointing out that while most steelmakers were strongly opposed to the change, Chinese acceptance of shorter periods of fixed pricing left other steel producers with little choice in the matter.

While the quarterly pricing adjustments will allow the producers to capture more profits if the market goes up, adds Calder of Western Coal, there is another important advantage to the structure if prices drop. “As the prices come down, you don’t have as abrupt a change halfway through the year,” he explains. “If you look at last year, when we had a major drop in pricing down to about $128 per tonne, the market really struggled to adjust to that.”

On the flip side, Calder says he wishes for the longer term certainties of annual contracts because of the position Western is currently in. “The stability of an annual price for us is better right now during our growth program. Would I say the same thing in three or four years, when we’re a much larger producer? Perhaps not. But right now, I would prefer to have annual pricing.”

In fact, Calder adds, the company does have some annual pricing contracts in Europe and remains focused on its long-term relationships – an understandable desire, given it is supplying six of the world’s top 10 steelmakers.

Why Canada?

Wright and Calder point out that one of Canada’s major advantages is the available transportation capacity, both in its west coast ports and on the CN Rail network – a freedom Calder says few other places can boast. Wright adds that Canada’s west coast is closer to the Asian markets, allowing for shorter lead times on orders. Finally, Canada also has enormous reserves of very high-quality coal, the sort that is becoming ever more important to China, says Teck’s Bell, as the country is moving to larger, more efficient and modern blast furnaces.

Canadian coal producers bring with them the last piece of the puzzle: the expertise needed to capitalize on these competitive advantages. Already a major player on the coal export scene, Canada looks set to do its part for the world’s economic recovery. CIM

Photo courtoisie de Teck

le charbon

Les vastes réserves de l’Ouest canadien et les capacités de transport augurent bien pour l’avenir.

Les deux aspects du charbon L’incertitude – une perspective commune pour les charbons métallurgique et thermique

À

première vue, il est facile de confondre le charbon métallurgique et le charbon thermique. Bien que les deux soient produits sensiblement de la même manière, quand vient le moment de la vente, l’un ira à l’autre bout du monde et l’autre sera souvent consommé tout près d’où il a été extrait.

Comme son nom le suggère, le charbon thermique est prisé pour ses capacités de génération de chaleur. Alec Kodatsky, un analyste chez CIBC, explique que ce charbon est un produit peu coûteux et ce sont les frais de transport qui constituent la grande partie du prix final.

50 | CIM Magazine | Vol. 5, No. 6

« Au Canada le gros du charbon thermique est envoyé presque ‘de l’autre côté de la rue’ et est brûlé dans une centrale. Cela dit, il existe des indices que le marché d’exportation du charbon thermique est en hausse. » Le charbon métallurgique est essentiel aux aciéristes mondiaux. Puisque les producteurs d’acier sont prêts à payer leur charbon beaucoup plus cher et qu’il est bien moins abondant, ce type de produit voyage souvent de très grandes distances vers les hauts fourneaux.

Les facteurs influençant le prix de ces deux charbons sont aussi très différents. Le prix du charbon thermique est

le charbon essentiellement déterminé par les clients des centrales et par le prix du pétrole.

Le vice-président de Sherritt Coal, Mark Plamondon, explique : « une centrale au charbon fournit typiquement de l’électricité pour la charge de base, laquelle demeure stable durant les cycles économiques. » La situation est plus volatile pour le charbon métallurgique dont la demande est directement reliée à la demande pour les produits d’acier. Les principales utilisations de l’acier, la construction et l’industrie automobile, sont à leur tour très sensibles à l’état général de l’économie.

Au cours des 18 derniers mois, la crise mondiale du crédit a mis un frein à la croissance économique globale et les producteurs d’acier ont vu chuter la demande. Les producteurs de charbon métallurgique ont aussi connu une baisse de la demande et ont vu les prix au comptant tomber de plus de 250 $/tonne à moins de 130 $/tonne. Dans son rapport annuel 2009, le géant international Teck a décrit l’année comme étant « la pire année pour l’industrie mondiale de l’acier en plus de 70 ans. »

En route vers l’Asie Malgré la situation difficile pour certains, la Chine est devenue, au début de 2008, un importateur net de charbon cokéfiable, dit M. Kodatsky. « Historiquement, la Chine était un exportateur de charbon cokéfiable. Son taux de croissance et son industrie de l’acier demandant plus que sa production interne font qu’elle doit importer du charbon. » Une compagnie à en bénéficier a été Teck, le deuxième exportateur mondial de charbon. Bob Bell, principal délégué commercial et vice-président de Teck Coal, dit qu’en 2008, près de la moitié de la production de charbon métallurgique de la compagnie était expédiée vers l’Asie du Nord. En 2009, la Chine a même acheté 20 pour cent de la production de 19 millions de tonnes de Teck.

Pour l’avenir, M. Bell s’attend à une reprise de la demande européenne, mais l’Asie du Nord continuera de représenter plus de la moitié des ventes de charbon de Teck. « En 2010, lorsque nos clients européens traditionnels ont demandé plus de nos produits, nos ventes à ces pays ont repris; cependant, une bonne portion de notre production allait vers les marchés chinois et nous ne pouvions pas retourner aux niveaux européens traditionnels. » La perspective d’une forte demande soutenue n’est pas restée lettre morte chez les producteurs qui travaillent fort à augmenter leur production. M. Bell dit que Teck Coal a un programme d’expansion en cours qui vise à accroître le volume de production de 50 pour cent d’ici 2013. Il s’agit d’expansions aux mines actives mais Teck pense aussi à rouvrir la mine Quintette dans le Nord de la Colombie-Britannique.

Western Coal a aussi un programme d’expansion en cours, dit Keith Calder, chef de la direction. La compagnie a produit 3,2 millions de tonnes (Mt) durant l’exercice comptable 2010 (terminé le 31 mars 2010); elle prévoit atteindre 6 Mt en 2011 et atteindre sa production cible de 10 Mt au 31 mars 2013. La compagnie exploite surtout dans le Nord

de la Colombie-Britannique mais elle possède aussi des mines souterraines et en surface en Virginie Occidentale, aux États-Unis, et la mine Aberpergwm au Pays de Galles.

Charbon plus propre, air plus propre M. Plamondon signale que, tout comme pour le charbon cokéfiable, le marché international pour le charbon thermique subit les fluctuations de la croissance économique et que les prix récupèrent depuis 2009. Le charbon thermique haut de gamme contient moins de soufre et possède un fort contenu énergétique, des traits désirables pour répondre aux exigences environnementales de plus en plus sévères.

Pour répondre à la demande, Sherritt a réouvert la mine Obed Mountain en août 2009 et a récemment acquis le dernier 50 pour cent du Coal Valley Partnership, faisant de Sherritt le propriétaire unique des mines Coal Valley et Obed Mountain.

M. Plamondon attire l’attention sur une législation proposée exigeant que toute centrale au charbon qui arrive à la fin de sa vie économique rencontre de nouvelles lignes directrices plus exigeantes ou cesse d’opérer. « Cela ne signifie pas la fin des centrales au charbon », dit Allen Wright, président de la Coal Association of Canada. « En ce qui concerne le thermique, le charbon demeure la source d’énergie la plus abondante – l’enjeu est de mieux s’en servir. » Sherritt a déjà entrepris des démarches pour rencontrer les nouvelles restrictions. « Sherritt utilise sa vaste expertise pour développer, adapter et mettre en place des technologies énergétiques propres qui rehausseront la valeur de ses importantes ressources et accroîtront l’utilisation du charbon de manière durable à long terme », dit M. Plamondon.

Cette compagnie développe aussi plusieurs « procédés de valorisation précombustion » visant à réduire l’humidité et les cendres dans les charbons de rang bas, ce qui contribuera à réduire les émissions de dioxyde de carbone ainsi que les frais de manutention des centrales au charbon.

Pourquoi le Canada?

MM. Wright et Calder signalent que l’un des principaux avantages du Canada est la grande capacité de transport disponible, à la fois aux ports de la Côte Ouest et sur le chemin de fer du CN. Peu de pays peuvent se vanter d’avoir cette liberté de choix, dit M. Calder. M. Wright ajoute que la Côte Ouest est près des marchés asiatiques permettant un court délai d’approvisionnement. Le Canada possède aussi d’énormes réserves de charbon de très haute qualité, la sorte qui devient de plus en plus importante pour la Chine, dit M. Bell, alors que ce pays construit des hauts-fourneaux plus gros et plus efficaces.

Les producteurs canadiens de charbon détiennent le dernier morceau du casse-tête, soit l’expertise requise pour capitaliser sur ces avantages compétitifs. Déjà l’un des grands joueurs sur la scène de l’exportation du charbon, le Canada semble bien positionné pour participer à la reprise économique. ICM September/October 2010 | 51

Back in the black

Photo courtesy of Syncrude Canada - Bob Nyen

oil sands

Shift change at Syncrude’s Aurora Mine

Oil sands projects ready to grow again, but big changes needed to make it happen

By Gillian Woodford

A

fter a grim year of low prices and shelved projects, the oil sands industry is not only officially in recovery but poised for major expansion. According to a recent report by energy analysis firm IHS Cambridge Energy Research Associates (CERA), Canada’s oil sands stand to become the largest supplier of oil to the US by 2030, taking as much as 36 per cent of the market.

However, the industry must leap a lot of hurdles before it is able to meet that demand. The main issues are project execution rates; environmental concerns (especially water supply and land reclamation); and labour costs.

“These limits to growth need to be alleviated to meet this aggressive growth target,” says Jackie Forrest, director of global oil for IHS CERA. “There are technology and management changes that must be made.”

52 | CIM Magazine | Vol. 5, No. 6

Supply and demand Second-quarter results for 2010 have been by and large very good, but petroleum investors are still jittery after riding a roller-coaster of crude prices for the past two years. And although prices seem to have stabilized, nerves are still frayed.

“With a recession as hard and fast as we had, there’s a tremendous amount of confidence lost,” explains Oil Sands Developers Group (OSDG) president, Don Thompson. “But at the same time, capital costs remained high while crude prices fell. That’s a scary scenario for investors.”

But companies are again starting to take chances on new projects. “In 2010, about half the projects of the summer of 2008 are back on,” says Forrest. Some, like Imperial Oil’s $8-billion Kearl operation, are going ahead,

oil sands taking advantage of lower operating costs. “The cost of a number of commodities — labour, steel, anything you can name — tend to be lower,” says Imperial spokesperson Pius Rolheiser.

Meanwhile, other companies are resuming expansion work planned before the crash. “The level of spending has rebounded, and today activity is approximately back to where it was,” says Thompson. “Capital expenditures went from some $30 billion in 2008 to about $15 billion last year,” Thompson notes. “We expect peak spending next year to be about $25 billion, with the peak year moved forward to 2013.”

Most analysts think US demand for oil probably reached its zenith in 2005 at nearly 20.8 million barrels per day (bpd). Analysts also expect that the US will remain the world’s biggest consumer of oil, well ahead of China, the second biggest oil importer. Canada is already the United States’ largest crude source, accounting for 21 per cent of oil imports. Most of this is from conventional sources, with about eight per cent coming from oil sands.

With imports from other top suppliers such as Mexico and Saudi Arabia falling in recent years, and Canada’s conventional oil supply expected to diminish in the short term, the oil sands are set to fill the gap. Many companies have also expressed interest in supplying to China, which does not yet consume half of the oil as the United States.

There are talks of expanding and adding pipelines to carry the oil, and production growth has already begun.

Despite the downturn, oil sands production reached about 1.35 million bpd in 2009, an increase of 14 per cent compared to that of 2008. The Canadian Association of Petroleum Producers forecasts 1.5 million bpd for 2010. CERA’s report predicts that by 2030 oil sands production will grow to 3.1 million bpd, in a moderate growth scenario, or as many as 5.7 million bpd if Canada chooses to “barrel ahead” with development. The growth figure would represent 36 per cent of anticipated American imports. In its annual report, Alberta’s energy regulator, the Energy Resources Conservation Board (ERCB), offers a slightly more aggressive projection of 3.2 million bpd by 2019.

If oil prices stay low, will the oil be worth extracting?

Estimates vary hugely on the price per barrel the industry needs in order to remain profitable. It has become cheaper to extract bitumen from the sand, but it remains costlier than conventional drilling. Forrest says at US$65 per barrel she would not expect to see upgraded oil coming out of the oil sands, only upstream projects. “But we’ll still see some growth,” she adds.

The ERCB predicts that raw bitumen production will outstrip refining capacity in the coming years. In its annual report, the regulator estimates that just 1.3 million bpd of the 3.2 million bpd it projects for 2019 will be upgraded.

The discrepancy reflects a lack of motivation in oil sands companies to invest in building upgrading facilities, despite the Alberta government’s efforts to convince them

to do so. High construction and labour costs and a toonarrow profit margin are keeping most companies from adding upgrading facilities to their plans.

The limits of labour “The biggest constraint to growth is labour,” Forrest says. “The industry has to find a way to need less labour.”

During the boom time, desperate companies vied to offer the best wages, benefits, bonuses and travel allowances.

Nobody wants to return to those days, but companies may have little choice.

CERA predicts that even under a moderate growth scenario, oil sands companies will face big shortages in all their core occupations. A June report on labour supply and demand by the Petroleum Human Resources Council of Canada projects that between 5,000 and 105,000 new workers will be needed in the next 10 years, depending on the rate of growth. In their high-growth scenario, no fewer than 65,000 of these will be in core occupations, such as engineers, skill trades, equipment operators and field workers.

Crunch time is predicted to be between 2010 and 2014 when projects currently under construction begin operations. Another report released in June by human resource consultants Mercer and based on a survey of

September/October 2010 | 53

oil sands

Photo courtesy of Imperial

seasonal nature of many field jobs make the situation even more difficult.

Many analysts agree the shortfall can only be met by bringing in temporary foreign workers. But some oil sands companies are looking closer to home for staff and paying to train people who already live in the oil patch area — primarily Aboriginal Canadians — in high-demand trades. Last year, Syncrude donated $2 million to Keyano College for the Syncrude Aboriginal Trades Preparation Program. In April, the first 22 students graduated from the program and completed work placements at Syncrude.

“Thirteen were hired by Syncrude,” says program coordinator Teresa Outhouse.

“Three have yet to complete their work placement and will be doing so soon. The remaining students, for various reasons, were not eligible and are working elsewhere.”

At least wages will be lower, right? Maybe. After the slow-down, most industry watchers expected that labour costs would fall, but it remains unclear whether they really have. Some, like Imperial Oil, decided to plow ahead with

The river water intake facility for Imperial Oil's Kearl project was completed this year.

135 oil companies, predicts a shortage of 24,000 workers by 2014 in Alberta’s energy sector as a whole.

Petroleum HR Council expects that competition will be fierce for skilled workers, especially as other industries begin to recover and start hiring as well. The aging workforce, a nationwide dearth of skilled tradespeople and the

A little cogen credit Oil sands operations are feeling pressure to reduce their greenhouse gas (GHG) emissions. In situ operations’ dependence on steam to extract bitumen makes it particularly energy-intensive. “The average mining operation produces about half the GHGs in situ does for oil extraction,” says Jackie Forrest of Cambridge Energy Research Associates. “Overall, on a well-towheel basis, from extraction to combustion, mining is only about five to 10 per cent less than in situ.” She adds that, “For in situ operations, we’ve already seen reductions in emissions. There is definitely still room to reduce the amount of emissions per barrel.”

Cogeneration systems are one way companies are reducing emissions and saving money on energy. “Oil sands operations provide tremendous opportunities for cogeneration of steam and electricity,” says Lambert.

Cogeneration works by burning natural gas in a turbine that generates heat. The bypass heat produces the steam needed for bitumen extraction and also electricity, which is either used for operations or sold back to the grid. Cogeneration has been used by oil sands producers since the 1970s, and according to a recent report on GHG by the Canadian Association of Petro-

54 | CIM Magazine | Vol. 5, No. 6

leum Producers (CAPP), “All existing oil sands mines and all but a few small in situ projects have cogeneration facilities (over 98 per cent of oil sands production has associated cogeneration).” These are frequently tied to sites with upgraders simply because they can benefit more from the excess electricity than an extractiononly operation.

A Pembina Institute report from August states that “Calculations suggest that the mining and upgrading operations that made the switch [to cogeneration] could be responsible for nearly 13 per cent of the total 39 per cent improvement in greenhouse gas emissions intensities.”

Apart from generating their own power, companies also offset their costs by selling their excess electricity.

“There’s an open supply system in Alberta, so anyone can produce power to the grid,” says Suncor’s vice president of sustainability Gord Lambert. About 25 to 30 per cent of this waste electricity is currently being sold to the grid and, according to CAPP, “provides approximately 18 per cent of Alberta’s total electricity supply.”

Lambert notes that it is cheaper to set up a cogen operation in a new plant, so that is where there is likely to be more growth. However, the Oil Sands Developers Group’s (OSDG) 2010 cogen report observed that

oil sands its multi-billion-dollar Kearl project and believe they are reaping the benefits of the recession.

“Imperial indicated that labour costs for their Kearl project dropped 20 per cent in their final cost estimate for the 2008/2009 time frame,” says Pete Howard, interim president of the Canadian Energy Research Institute, which annually reports on oil sands production and cost trends.

Canadian Oil Sands Trust, which is the largest partner in Syncrude’s oil sands operations, recently announced its operating costs fell 39 per cent to C$31.18 a barrel.

However, other projects that continued construction through the recession have seen their costs rise. The Athabasca Oil Sands Project, for instance, has reported rising labour expenses.

Layoffs in the industry were not as high as expected either. Syncrude, for example, increased rather than reduced its staff. “We actually hired – there were no layoffs,” says spokesperson Cheryl Robb. The OSDG surveys the number of people in construction camps and found that in the year after the 2008 crash, there were only around 12 per cent fewer workers in the oil sands.

“In 2008, there were 26,000-27,000,” says Thompson.

In 2009, the number dropped by about 3,000. By this winter, the number is expected to jump to 27,00028,000.

Tailings tech Tailings management R&D has been a big focus for oil sands investment in the last decade. Even before Directive 74 obliging oil sands miners to deal with tailings ponds made it on the books, companies began seriously looking at ways to reduce their footprint.

Suncor has invested $300 million to develop a tailings technology called tailings reduction operations (TRO). “It’s a polymer treatment of the tailings stream,” explains Sustainability vice president Gord Lambert. “This dewaters the tailings at a tremendously accelerated rate.”

“Clays take 40 years to settle to the point you can work with them,” continues Lambert. “With TRO, tailings can be dewatered in weeks versus decades and reclamation can proceed at an accelerated pace.” The company announced that it will spend $1 billion over the next two years to deploy this new technology and has recently obtained all of the permitting required to proceed. Lambert notes that, “There will be a smaller pond footprint as a result of applying this technology to tailings from current operations and to our historic tailings.” Suncor’s tailings management plan was accepted by the ERCB, with a few conditions, based on the use of TRO. One of these, mature fine tails (MFT) centrifuging, moved from testing to the field in early August. In this approach a

“Actual operating cogeneration capacity in 2009 is lower over the prior survey.”

This cogen trend is expected to continue for a couple of reasons: First, there is a lack of financial motivation because the price of power in Alberta has stagnated along with the economy. “It’s more expensive to use cogen than [it is] to just boil the water,” says OSDG president Don Thompson. “To get extra value, we’d need the price of power to come back.” The government currently does not recognize a carbon credit for cogen’s coal offset, which would also motivate the industry to build more cogen units.

The second hurdle is transmission problems. “They’re having a hard time selling the electricity,” says Thompson. “There are not enough wires.” Since power lines are the purview of the grid operator, oil sands companies cannot do much about this problem.

Imperial is one company that is bucking the trend of reducing cogen plans. Its Kearl mining project will include a cogen system without an upgrader. “We’ll be able to produce our own electricity,” says Rolheiser.

“We’re also advancing work on a major expansion of our Cold Lake operation.” Cold Lake has been using cogen since 2002.

September/October 2010 | 55

oil sands

“Source – The Oil Sands Developers Group”

Photo courtesy of Syncrude Canada

flocculant is added to the clay. “The clay looks like yogurt,” Lorentz explains.

“When you add the flocculant it turns to something more like cottage cheese.

It goes from 30 per cent solid to 40 per cent solid.”

The clay is then subjected to dewatering by centrifuge from which two streams emerge: a cake that is about 58 per cent solid, and the water which is recycled back into plant operations. “The cake is spread out over the ground, dried for a year, then repeated to create a lift,” says Lorentz. The layers could be placed at the bottom of ponds and eventually capped with At the end of the cable in Syncrude Canada Ltd.'s Aurora mine, a Bucyrus electric shovel loads ore into a Cat 797B heavy hauler. sand and reclaimed.

Syncrude has also had its tailings plan conditionally ogy development team leader, Jim Lorentz, the company approved by the ERCB. According to Syncrude’s technol- has several tailings technologies in development and test-

Wild Rose resurgence Oil sands projects moving into production Company

Project

Region

Status

Start Up

Connacher Oil and Gas

Great Divide Pod 2 (Algar)

Athabasca

Recently completed

2010

Cenovus Energy Inc.

Christina Lake 1C

Athabasca

Under Construction

2010

Statoil Canada Ltd.

Kai Kos Dehseh - Leismer Demo

Athabasca

Under Construction

2011

Suncor Energy Inc.

Firebag Phase III

Athabasca

Under Construction

2011

Suncor Energy Inc.

North Steepbank Mine Expansion

Athabasca

Suspended

TBD

Suncor Energy Inc.

Voyageur Upgrader

Athabasca

Suspended

TBD

Shell Canada Energy

Jackpine Mines Phase I Train I

Athabasca

Near completion

2010

Imperial Oil

Kearl Phase I

Athabasca

Under Construction

2012

Devon Canada Limited

Jackfish 2

Athabasca

Under Construction

2011

MEG Energy Corp.

Christina Lake Phase 2

Athabasca

Recently completed

2009

56 | CIM Magazine | Vol. 5, No. 6

oil sands ing. One of these, mature fine tails (MFT) centrifuging, moved from testing to the field in early August. In this approach a flocculant is added to the clay. “The clay looks like yogurt,” Lorentz explains. “When you add the flocculant it turns to something more like cottage cheese.” The clay is then subjected to dewatering by centrifuge from which two streams emerge: a cake that is about 58 per cent solid and the water that is recycled back into plant operations. “The cake is spread out over the ground, dried for a year, then repeated to create a lift,” says Lorentz. The layers could be placed at the bottom of ponds and eventually capped with sand and reclaimed.

Syncrude has commercialized composite tails technology and has a commercial demonstration underway of water-capped lakes. In composite tails, a coarse mixture of gypsum and sand is added to the fine clay. “This acts as a viscosity modifier and allows the clay to be trapped,” Lorentz says. Over the last 10 years, Syncrude has implemented this technology and has been filling one of its first mine pits in with this material. Work is currently underway to shape the land, add a soil cap and plant trees and vegetation in the next three to five years.

Water-capped lakes are mined-out pits that have been filled with clays and topped with water. “This bio-remediates the residual hydrocarbons,” says Lorentz. Syncrude has been testing this technology for 20 years. “Syncrude’s

Method

Capex

Production in bpd (thousand)

In situ

$350M

10

In situ

$1,400M

40

In situ

$350M

10

In situ

$2,244M

68

Mining

$11,500M

180

Mining

$11,500M

N/A

Mining

$6,000M

100

Mining

$20,000M (3 phases)

100

In situ

$1,225M

35

In situ

$770M

20

test ponds have demonstrated they evolve into natural ecosystems and within 10 years support aquatic life including fish.” By comparison, land reclamation takes about 15 to 20 years.

A river runs through it “If oil sands mining production is going to grow, we’re going to need a large amount of water storage,” says Forrest. “We’re already seeing this in new approvals.”

At its Kearl site, for instance, Imperial will use waterstorage reservoirs to reduce its use of water from the Athabasca, a first for the company. “We’ll be able to store a three-month supply,” explains Rolheiser. “This means we can withdraw at a higher rate at high-flow season and temporarily curtail water intake in the winter.”

Rolheiser says Imperial will also recycle water as much as possible. Its Cold Lake in situ site already recycles 95 per cent of the water it uses every day.

According to Suncor’s Lambert, who is also committee co-chair of the Oil Sands Leadership Initiative’s (OSLI) coordinating committee, one of the keys to making some real progress is for companies to start sharing their environmental technologies. OSLI was created earlier this year through the cooperation of ConocoPhillips Canada, Nexen, Statoil Canada, Suncor and Total E&P Canada to improve collaboration across the industry.

September/October 2010 | 57

oil sands “We need to accelerate the pace of innovation,” Lambert says. “What would the economic and environmental benefits be if we created a regional industrial water treatment and distribution system as compared to each oil sands site being independent?” It is an idea the water management working group at OSLI is studying, he says and adds, “We’ve had good buy-in from companies outside OSLI as well.”

Ramping up R&D Breaking paradigms requires new ideas and new ideas cost money. The oil industry has on average a much lower investment in R&D than other industries — 0.36 per cent versus around 4 per cent — according to a recent report by Northwest and Ethical Funds. The report also noted that R&D spending decreased between 2006 and 2008, when the industry was booming.

CERA is currently conducting research on this phenomenon. Forrest notes that some areas oil sands companies invest in — such as leases and understanding its sites — are not counted as R&D. Another argument is that because of the difficulty in extracting bitumen from the ground, the whole industry is one big innovation project. “It depends on how you define R&D,” says Lambert. “The big

spend is at the development stage, but that’s not counted as R&D.” “Investing in new technologies is a good strategy,” says Don Thompson of OSDG, because the investment is offset by the long-term financial benefits. He notes that on the mining side there is a huge need to produce dryer tailings and reduce energy costs. For in situ operations, waterless extraction and alternative power sources like geothermal energy are key. Forrest agrees, adding that the built-in financial incentive for in situ companies to get their steamto-oil ratio down means that, unlike tailings management, “The government doesn’t really need to mandate it.”

A new approach Suncor’s Lambert thinks that in order to meet both market and environmental demands, oil sands companies are going to have to change the way they think about their business. For example, OSLI’s technology breakthrough working group is looking at ways to reduce the steam-tooil ratio for in situ operations. “We need to change the design for operations,” says Lambert, adding that the industry needs to challenge itself: “How can we accelerate the pace and scope of environmental performance improvement through innovation?” CIM

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58 | CIM Magazine | Vol. 5, No. 6

Photo courtoisie de Suncor

les sables bitumineux

À l’usine Suncor de sables bitumineux, des pipelines d’hydrotransport acheminent le minerai broyé et classifié à l’extraction primaire.

Fini d’être dans le rouge Les sables bitumineux prêts à croître, mais de grands changements seront requis

A

près une année de bas prix et de projets reportés, les sables bitumineux sont prêts non seulement pour une reprise, mais pour une expansion. Selon un rapport de IHS Cambridge Energy Research Associates (CERA), les sables bitumineux canadiens sont bien placés pour devenir le plus grand fournisseur de pétrole vers les États-Unis d’ici 2030.

Il reste cependant beaucoup à faire avant de satisfaire cette demande : l’avancement des projets, les préoccupations environnementales (l’approvisionnement en eau et la restauration des terrains) et les coûts de la main-d’œuvre. « Ces limitations à la croissance doivent être atténuées pour atteindre la cible », dit Jackie Forrest, directrice chez IHS CERA. « Il faudra des changements technologiques et de gestion. »

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« Avec une récession comme celle que nous venons de traverser, il y a eu beaucoup de perte de confiance », explique Don Thompson, président du Oil Sands Developers Group (OSDG). « Cependant, les coûts d’immobilisation sont demeurés élevés alors que les prix du brut chutaient, un scénario épeurant pour les investisseurs. » Les compagnies recommencent à prendre des risques. « En 2010, environ la moitié des projets de l’été 2008 ont été repris », dit Mme Forrest. Certains nouveaux projets, comme le projet Kearl d’Imperial Oil, progressent en raison des coûts moindres d’exploitation. « Le coût de nombreux biens, l’acier et la main-d’œuvre, sont à la baisse », dit Pius Rolheiser, porte-parole chez Imperial.

Selon la plupart des analystes, la demande des ÉtatsUnis pour le pétrole a probablement atteint son sommet en

les sables bitumineux 2005, à près de 20,8 millions de barils par jour (Mb/j) et ce pays devrait demeurer le plus grand consommateur mondial, dépassant la Chine. Le Canada constitue déjà la plus grande source de brut des États-Unis, soit 21 % de ses importations, dont environ 8 % provenant des sables bitumineux.

Malgré la récession, la production des sables bitumineux a atteint environ 1,35 Mb/j en 2009, une augmentation de 14 % par rapport à 2008. L’Association canadienne des producteurs pétroliers prévoit 1,5 Mb/j pour 2010 et CERA prédit qu’en 2030, la production atteindra de 3,1 à 5,7 Mb/j selon des scénarios de développement plus ou moins agressifs.

Si les prix restent bas, est-ce que ça vaudra la peine d’extraire le pétrole? Les estimations varient grandement quant au prix requis, par baril de pétrole, pour demeurer profitable. Le prix d’extraction du pétrole des sables bitumineux demeure plus élevé que celui par forage conventionnel.

Selon l’Energy Resources Conservation Board (ERCB,) la production de bitume brut dépassera les capacités de raffinage au cours des prochaines années. Selon cet organisme de réglementation, en 2019, seulement 1,3 Mb/j des 3,2 Mb/j prévus seront valorisés. Les compagnies hésitent à investir dans la construction d’installations de valorisation en raison des coûts élevés de construction et de main-d’œuvre. « La plus grande contrainte demeure la main-d’œuvre », dit Mme Forrest. Durant la période de boom, les compagnies rivalisaient pour les meilleurs salaires et conditions de travail; elles ne veulent pas revenir à cet état de choses mais elles n’auront peut-être pas le choix.

Un rapport récent du Conseil canadien des ressources humaines de l’industrie du pétrole stipule que de nombreux travailleurs spécialisés seront requis entre 2010 et 2014, lorsque les projets actuellement en construction entreront en production.

Selon plusieurs analystes, cette pénurie ne peut être comblée que par des travailleurs étrangers temporaires.

Cependant certaines compagnies recherchent et forment des travailleurs vivant près des sites d’exploitation – surtout des Autochtones. L’an dernier, Syncrude a donné 2 M$ au Keyano College pour un programme de formation. Plusieurs Autochtones ont été embauchés après des stages de travail, dit Teresa Outhouse, la coordonnatrice du projet.

Après la période de ralentissement, les analystes s’attendaient à une baisse des coûts de la main-d’œuvre; estce arrivé? « Imperial a indiqué que les coûts de la main-d’œuvre avaient chuté de 20 % dans l’estimation finale pour l’année 2008-2009 », dit Pete Howard, président par intérim du Canadian Energy Research Institute.

Aussi, Canadian Oil Sands Trust, le plus grand partenaire de Syncrude dans les sables bitumineux, a récemment annoncé que les coûts d’exploitation avaient chuté de 39 %, à 31,18 $ du baril. Les mises à pied étaient moins

nombreuses qu’attendues. « Nous avons même embauché », dit Cheryl Robb, porte-parole chez Syncrude.

Même avant l’adoption de la Directive 74, obligeant les exploitants de sables bitumineux à prendre des mesures concernant les résidus, les compagnies cherchaient sérieusement à réduire leur empreinte.

Suncor a investi 300 M$ dans une nouvelle technologie pour assécher les résidus. « Il s’agit d’un traitement à base de polymère », dit Gord Lambert, vice-président, durabilité. « Les argiles prenaient 40 ans pour sédimenter assez pour permettre leur manipulation; les résidus peuvent maintenant être asséchés en quelques semaines. » La compagnie dépensera 1 milliard de dollars au cours des deux prochaines années pour appliquer cette nouvelle technologie.

Selon Jim Lorentz, chef de l’équipe de développement technologique chez Syncrude, la compagnie développe et met à l’épreuve plusieurs nouvelles technologies, dont une de centrifugation qui sera bientôt prête pour des essais sur le terrain. Un floculant est ajouté à l’argile, la rendant solide à 40 %. Une centrifugation produit ensuite un gâteau, à environ 58 % de solides, et de l’eau qui est retournée à l’usine. Syncrude a aussi commercialisé d’autres technologies : les résidus composites, où un mélange de gypse et de sable est ajouté à l’argile, et les excavations tapissées d’argile et recouvertes d’eau douce. « Nous espérons que les bassins expérimentaux évolueront en écosystèmes naturels et supporteront une faune aquatique », dit M. Lorentz.

Imperial Oil a reçu une approbation conditionnelle pour ses résidus à Kearl. La compagnie vérifiait diverses technologies dont la centrifugation, la filtration sous pression et les épaississeurs pour traiter les fines du processus de flottation ainsi qu’une unité pour récupérer les solvants de son procédé breveté de traitement des mousses par solvant paraffinique à haute température. « Si la production des sables bitumineux croît, nous devrons entreposer beaucoup d’eau », dit Jackie Forrest.

Par exemple, au site Kearl, Imperial aura des réservoirs d’entreposage pour réduire l’utilisation de l’eau de la rivière Athabasca. La compagnie recyclera aussi l’eau autant que possible; à Cold Lake, elle recycle déjà 95 % de l’eau utilisée tous les jours.

M. Lambert, de Suncor et coprésident du comité de coordination de l’Oil Sands Leadership Initiative, dit qu’il faut que les compagnies partagent leurs technologies environnementales. « Nous devons accélérer le taux d’innovation. » Selon un rapport de Northwest and Ethical Funds, l’industrie pétrolière investit beaucoup moins en R et D que les autres industries — 0,36 % par rapport à environ 4 %. Le rapport stipule aussi que les dépenses en R et D ont chuté entre 2006 et 2008, alors que l’industrie allait bien. « C’est une bonne stratégie d’investir dans les nouvelles technologies », dit M. Thompson, puisque l’investissement est compensé par des avantages financiers à long terme. ICM September/October 2010 | 61

Photo courtesy of MEG

Photo courtesy of MEG

featured project

MEG Energy's Christina Lake plant now processes over 25,000 barrels of oil per day.

Focused growth by | Dan Zlotnikov

With $700 million of fresh financing and an approved planned second expansion in the works, MEG Energy Corp. is poised to significantly ramp up production at its Christina Lake project.

This is just the beginning for the 11-year-old company.

T

Two storeys above the streets of downtown Calgary’s business district there is a walkway system that connects the city’s office buildings and shelters the foot traffic from the winter wind and cold. “We call it the +15 because it’s about 15 feet above the ground,” explains Dale Hohm, CFO of MEG Energy Corp.

62 | CIM Magazine | Vol. 5, No. 6

It was in the +15 that the future of MEG was decided, Hohm says. After forming the company in 1999, oil sands veteran William McCaffrey and his cofounders spent the next four years hustling through the overpasses of the city’s business district, making what deals they could to secure a land base for the fledgling firm.

featured project In the late 1990s future development of the oil sands was far from a sure thing, says Hohm, both due to unproven extraction technology and the very low — by today’s standards — price of oil. In fact, the lack of interest from the industry played an important role in the creation of MEG. According to Hohm, McCaffrey formed MEG when his previous employer, Amoco Canada, sold much of its oil sands holdings to Canadian Natural Resources and got out of the oil sands business just as it was bought up by BP. In contrast to that, McCaffrey was convinced the in situ technology held great promise. So in 1999, McCaffrey, Dave Wizinsky [MEG’s corporate secretary and a director] “and a few others put together their personal capital to start acquiring land,” says Hohm.

From up in the air to on the ground

Photo courtesy of MEG

Eleven years later, McCaffrey’s belief has proven itself many times over. Today, MEG is the 100 per cent owner of 2,175 square kilometres of leases in the Southern Athabasca region, and a 50 per cent owner of a 345-kilometre oil pipeline.

The company has been using the pipeline to ship oil since 2008, when it completed its 3,000 bpd pilot plant at its Christina Lake in situ development, going up to 25,000 bpd by mid-2010, when it completed the first of a series of planned expansions.

In 2009, MEG received regulatory approvals for its Phase 2B expansion — a further 35,000 bpd to The heat recovery steam generator uses heat from the GE turbine to generate steam for the SAGD process. begin construction early next year. The company has also just completed a $700 million initial public offering — Canada’s second largest for the year to date and more than sufficient cash to fund the upcoming Anticipating and adjusting capital investment.

Being a specialized, comparatively small operator can also But taking Christina Lake to 60,000 bpd is far from the end, make a big difference. MEG’s vice-president of reservoir and says Hohm. The deposit was recently evaluated by GLJ production, Chi-Tak Yee, who has spent many years working Petroleum Consultants Ltd., an independent reservoir engi- on major projects, is familiar with the drawn-out process that neering firm. According to the GLJ assessment, Christina Lake can precede a decision in a large company. In contrast, he has 1.7 billion barrels of proved and probable reserves and a says, MEG is a very nimble company, with just one producing project that is occupying virtually all of its attention. further 1.4 billion barrels of contingent resource.

“While we did run into our share of difficulties, we were The size of the deposit means there is plenty of room for growth and MEG is intending to make use of the oppor- first able to foresee a lot of these and prepare for them, and tunity: the company filed an application in 2008 for its second, if something unexpected did happen, we were able to Phase 3, three-stage expansion at Christina Lake and is adapt to it rather quickly,” says Yee. expecting approval later this year or in early 2011. Each of He offers the example of a peculiarity of the reservoir that the three stages of the Phase 3 expansion is planned to the company encountered in Phase 2. “A portion of the bituadd a further 50,000 bpd of capacity, says Hohm, with the men reservoir overlies water, and the consequence of that is final goal being 210,000 bpd, a level the reservoir can sup- an impact on how high or low a pressure you need in order to port for 30 years. operate efficiently,” he explains.

September/October 2010 | 63

Photo courtesy of MEG

featured project

Inside the control room at Christina Lake

The optimal pressure differed from what was observed in Phase 1, Yee continues, and so the company had to adjust its practices to suit. The solution was to place electric submersible pumps inside each production well to increase the flow of the bitumen out of the well. Yee says the whole process of outfitting over 20 well pairs with the pumps was done within a couple of months, far faster than it would have been in the case of a large firm.

Lessons applied One of the most noteworthy aspects of MEG, says Hohm, is how the company has been managing risk and trying to address potential challenges in parallel with its expansion program.

Major areas of concern have all been addressed, he explains.

“From a reservoir standpoint, we’ve done a lot of core hole drilling in the Phase 2B area, so it’s fair to say we’re confident that the reservoir is comparable to what we’re already producing from,” Holm says. “It would be a risk, but that’s something we think we’ve addressed.”

Yee adds that Christina Lake is also adjacent to two other producing projects, all a few years ahead of MEG. This gives MEG a better idea of what to expect, he explains.

“With Cenovus, they’ve been operating their Christina Lake project since 2002, about six years ahead of us,” Yee says.

64 | CIM Magazine | Vol. 5, No. 6

“And then Devon Energy’s Jackfish is also a couple of years ahead of us. So we’re kind of unique in the sense that we have someone in a similar reservoir setting who can show us the way a little bit to start with.”

A number of other operational areas — steam generation, oil and water processing, and power generation — have also been evaluated, Hohm says, but points out that all of these will be replicating approaches fine-tuned during the first two phases, which allows the company to minimize the risk of any unwelcome surprises.

Hohm continues to the next big challenge — construction: “We're using Worley Parsons, the same engineering firm we'd used for Phases 1 and 2, and we strengthened that by getting a very strong project management and controls group, that is, MEG's own employees. For the construction, we're using Kiewit Construction, whom we'd used for Phase 2 as well.“ Finally, on the financial front, there were financing risks, he says, “but with our IPO that just closed a few weeks ago, we have the financing in place to develop Phase 2B, so the financing risk is off the table.”

“There are certainly lots of risks in each of these projects,” Hohm concludes, “and management’s job is to identify and control these risks. And I think we’ve got that under control.”

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It takes water Arguably one of the biggest challenges in situ operators face, says Yee, is not in finding oil but in managing their supply of water. “It takes oil to produce oil” is an oft-heard phrase in the energy industry, but when it comes to in situ oil sands projects, it might as well be “It takes water to produce oil,” instead. Water, more than any other factor, is a crucial part of the in situ operation. SAGD, the most commonly used in situ technique, requires the operator to boil the water into steam and pipe the steam deep underground, into the bitumen-bearing strata.

One of the advantages of Christina Lake, says Yee, is that there are bodies of non-potable, subsurface water in close proximity to the central plant that the project can draw upon. In addition, Yee continues, Christina Lake’s high-quality reservoir means that the project can boast a very high efficiency. The operation’s current steam-to-oil ratio (SOR) is 2.4, one of the lowest among the oil sands operations. On top of that, the operation recycles over 80 per cent of its process water, taking in only 0.5 to 0.6 units of new water for every unit of oil produced.

MEG is also improving operational efficiency and reducing its emissions intensity with its steam and power cogeneration facility. Hohm explains that SAGD projects burn natural gas to create steam. “If you’re burning gas, why not obtain the best efficiency from that energy,” he says. MEG is using a General Electric gas turbine at its Christina Lake operations. The “waste” heat from the turbine provides approximately 70 per cent of the heat needed for SAGD steam generation. At the same time, it generates 85 MW of power — only 10 MW of the output is consumed in MEG’s operations and the excess is sold back to the Alberta energy grid.

“It helps us in economic terms, since it generates both heat for steam and electricity to run the operation with surplus to sell back to the grid,” explains Hohm. “From the environmental standpoint, it’s also very helpful because we get credit for the more efficient use of natural gas, with respect to the CO2 emissions standards established for the company.”

Looking beyond Christina Lake, MEG is working on the nearby Surmont project and is expecting to file a development application next year, with a 100,000 bpd goal in mind. Surmont’s 80 square kilometres are believed to contain over 640 million barrels of contingent resource. But due to McCaffrey’s and his co-founders’ efforts, MEG boasts a huge land base — with nearly 1,900 square kilometres still to be explored.

When it comes to MEG’s continued growth, one thing is for sure: the company has left itself plenty of room to do so. CIM

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Photo courtesy of MEG

projet en vedette

Le Site A de Christina Lake a six paires de puits horizontaux en production.

V

Croissance ciblée

Vers la fin des années 1990, l’extraction des sables bitumineux n’était pas chose faite en raison de la technologie non prouvée et du très bas prix – par rapport à maintenant – du pétrole. Le manque d’intérêt a joué un rôle important dans la fondation de MEG Energy Corp. Selon Dale Hohm, directeur financier de MEG, William McCaffrey, convaincu que la technologie in situ était prometteuse, a fondé MEG lorsque son ancien employeur, Amoco Canada, a vendu une grande part de ses avoirs à Ressources naturelles Canada et s’est retiré des sables bitumineux. En 1999, William McCaffrey, Dave Wizinsky, secrétaire général et directeur MEG, et quelques autres ont réuni de leur propre argent pour acquérir des terrains.

MEG est aujourd’hui propriétaire à 100 pour cent de 2175 km2 de baux dans la région du sud de l’Athabasca et propriétaire à 50 pour cent d’un pipeline d’une longueur de 345 kilomètres. La compagnie utilisait le pipeline depuis 2008 pour expédier du pétrole lorsqu’elle a terminé la construction d’une usine pilote de 3000 b/j à Christina Lake, atteignant 25 000 b/j en 2010.

Le gisement pétrolier a récemment été évalué par GLJ Petroleum Consultants Ltd. et, selon cette firme de génie conseil, Christina Lake a 1,7 milliard de barils de pétrole en réserves prouvées et probables et une ressource éventuelle de 1,4 milliard de barils.

Chacune des trois étapes de la Phase 3 d’expansion devrait ajouter une capacité de 50 000 b/j; l’objectif final est de 210 000 b/j, un taux que le réservoir peut soutenir pendant 30 ans. Être un exploitant spécialisé et relativement petit peut aussi faire une grande différence, affirme Chi-Tak Yee, vice-président, réservoir et production; la compagnie peut alors se concentrer complètement sur un projet. « Bien que nous ayons eu notre part de difficultés, nous avons pu nous y préparer. » M. Hohm poursuit : « Nous avons fait beaucoup de forages et nous sommes confiants que le réservoir est comparable à

68 | CIM Magazine | Vol. 5, No. 6

celui que nous exploitons déjà. » M. Yee ajoute que Christina Lake est adjacent à d’autres projets en production : Jackfish de Devon Energy et le projet, aussi nommé Christina Lake, de Cenovus; donnant à MEG une meilleure idée de ce à quoi s’attendre.

Le prochain gros défi sera la construction. « Nous prenons Worley Parsons, la même firme de génie-conseil que pour les Phases 1 et 2; la gestion et le contrôle du projet seront effectués par les propres employés de MEG. Quant à la construction, nous prenons Kiewit Construction, avec qui nous avons déjà travaillé durant la Phase 2. » Du côté financier, il y a des risques, « mais avec notre premier appel public à l’épargne, qui s’est terminé il y a quelques semaines, nous avons le financement nécessaire pour développer la Phase 2B », conclut M. Hohm.

L’un des plus gros défis des exploitants n’est pas de découvrir du pétrole mais de gérer l’eau. Plus que tout autre facteur, l’eau est une composante cruciale des opérations de drainage par gravité à l’aide de vapeur (SAGD), la technique d’extraction la plus fréquemment utilisée. Il faut chauffer l’eau en vapeur et acheminer cette vapeur dans le sol, dans les strates porteuses de bitume.

De l’eau non potable se trouve à proximité de l’usine; de plus, la haute qualité du réservoir signifie que le projet peut être très efficace. Le rapport vapeur/eau est de 2,4, parmi les meilleurs des exploitations de sables bitumineux. De plus, l’eau de procédé est recyclée à plus de 80 pour cent; il faut donc de 0,5 à 0,6 unités de nouvelle eau pour chaque unité de pétrole produite.

Pour l’avenir, MEG travaille au projet Surmont à proximité; l’objectif est de 100 000 b/j. Les 80 km2 de Surmont pourraient éventuellement contenir des ressources de plus de 640 millions de barils. Cependant, grâce aux efforts de M. McCaffrey et de ses cofondateurs, MEG possède un terrain de 1900 km2 encore à être exploré. ICM

Le meilleur congrès de l’industrie auquel j’ai participé au Canada.

Le réseautage fût fantastique. Tous nos représentants ont rencontré de nouveaux clients potentiels.

Répondant du sondage - Vancouver 2010

“

“

COLUMNS | MAC economic commentary Greenhouse gas emissions No progress in policy, some progress on the ground Paul Stothart Throughout the history of the global environmental movement, no issue has seen anything approaching the elaborate policy structure and negotiation frameworks that surround the climate change and greenhouse gas mitigation area.

International climate change policy has been focused around the UN Framework Convention on Climate Change (UNFCCC) and the Intergovernmental Panel on Climate Change (IPCC) for over 20 years. IPCC is a United Nations entity created in 1988 that writes extensive reports, drawing upon input from 2,500 scientific experts, 800 contributing authors, 450 lead authors and 620 expert reviewers.

IPCC reports typically stretch into the thousands of pages.

The UNFCCC has coordinated 15 Conference of the Parties (CoP) sessions over the past 15 years, which have featured hundreds of environmental groups, business delegations and government departments. Thousands of bureaucrats congregate at CoP sessions, often held in exotic locations that entail enormous travel distances and related airline GHG emissions. Between CoP sessions, numerous working groups interact and themselves congregate in sub-committee meetings at locations around the world. There are some 192 countries engaged in the UNFCCC process and

these individual countries in turn support their policy discussions and documents with equally substantial resources and bureaucracies. Some countries, such as Australia and the United Kingdom, have created entire government departments around climate change policy.

In Canada, at least eight â&#x20AC;&#x153;climate change strategiesâ&#x20AC;? have been unveiled since the mid-1990s â&#x20AC;&#x201D; five by Liberal governments and three by Conservatives â&#x20AC;&#x201D; each plan outlining targets, actions and commitments supported by the loftiest of communications rhetoric and printed on the glossiest of paper. Through the years, the federal government has outlined plans and

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72 | CIM Magazine | Vol. 5, No. 6

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MAC economic commentary | processes for clean development mechanisms, offset systems, early action credits, technology funds, reduction targets, emission trading systems, cap and trade systems and carbon taxes. One particularly memorable offset document contained a 34page glossary. The combined worth of these documents, plus a toonie, would today buy a Starbucks coffee.

Globally, for all of this bureaucracy, for all of the costs and all of the time elapsed, it is difficult to claim much return on investment beyond the production of a decade-old scientific conclusion regarding anthropogenic climate change. After 15 years of discussion, there are no emission reductions targets bound through any form of global agreement. There is no carbon emissions trading regime anywhere in North America or Asia, and the Emissions Trading Scheme (ETS) in Europe has been so fraught with exemptions and wiggle room that its overall effect in a decade-plus has been negligible There have been no national carbon pricing schemes introduced in the past decade and there are none on the horizon. Large emerging economies such as China have implemented no GHGreduction measures of note, and whatever energy efficiency measures that have been introduced were internally driven by energy supply concerns.

Looking ahead, the regional GHG mitigation initiatives in the United States are generally in disarray, there are no signs of any effective GHG policy or compromise emitting from Washington, and the prospect of any real Copenhagen Accord targets or actions being bound on the world’s key emitters is remote.

Ironically, outside of this bloated climate change policy apparatus, there are some signs of progress in the real world — where some old-fashioned vehicle emission standards may have effect and where there are real prospects of moving towards lowercarbon fossil fuels. Two illustrations are worth highlighting.

First, it is interesting to note that shale gas has become an increasingly important source of natural gas in the

United States over the past decade, and interest has spread to potential reserves in Canada, Europe, China, India and Australia. One noted economist has called the emergence of U.S. shale gas development “the biggest energy innovation of the decade.” Some estimate that shale gas could supply half the natural gas production in North America by 2020.

Given that there are 30 U.S. states facing major carbon challenges (where their coal-fired power plants have as large or larger carbon footprint than Alberta’s oil sands), it is evident that any potential transition towards lighter forms of fossil fuel in the United States could have beneficial impacts in GHG emissions.

Coal similarly fuels 70 per cent of China’s power grid and the ability to shift in any significant way to traditional natural gas or shale gas would have major impacts on that country’s carbon footprint. In India, as well, the potential shale gas supply and GHG impact is noteworthy. In Canada, with potential new shale gas supplies in British Columbia and elsewhere, federal regulations to phase out thermal coal combustion over the coming decades could presumably be accommodated through such lower carbon fuel developments.

Second, it is worth highlighting the recent momentum seen in the United States to enhance vehicle fuel efficiency

COLUMNS

standards. The United States government finalized new fuel standards in April 2010 that will take effect in 2012 model years — these will require roughly five per cent improvement per year and, in 2030 GHG terms, would equate to taking 30 million cars and light trucks off the roads. Canada will also move to harmonize with these standards. In heavy-duty trucks and buses, the United States announced in May that new regulations would apply to 2014 model years. These vehicles presently average only six miles per gallon efficiency and offer significant, yet untapped, efficiency improvement potential.

Given the lack of GHG mitigation results on the policy side over the past two decades, it is encouraging to at least see some progress driven through more traditional forces. Measures to encourage the discovery and development of lower carbon fuels and government regulation of vehicle efficiency standards are two such forces that are having an effect and that will contribute positively to Canadian and global GHG mitigation efforts over the coming decades. CIM

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

mac facts

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

Alberta’s oil sands deposits are estimated to contain 2.5 trillion barrels of bitumen that, using existing technologies, would yield 300 billion barrels – larger than Saudi Arabia’s reserves.

September/October 2010 | 73

COLUMNS | standards Meeting disclosure requirements Forward-looking information on mineral projects Greg Gosson In the past five years, there have been important new securities laws passed in Canada regarding the disclosure of “forward-looking information” (FLI). Recently, the Canadian Securities Administrators (CSA) took the opportunity to include new general guidance on disclosing FLI on mineral projects in the proposed changes to the Companion Policy 43101CP to National Instrument 43101 Standards of Disclosure for Mineral Projects. The guidance points out that another National Instrument in Canada, NI 51-102 Continuous Disclosure Obligations, contains specific requirements for disclosing FLI on mineral projects. FLI from a mining study would include forecasts of mine production rates, the amount of metals or minerals to be produced or recovered, and the resulting cash flows. These types of information are an essential component of preliminary assessments, preliminary feasibility and feasibility studies on undeveloped deposits, and life-of-mine plans for developed or operating mines.

Reasonable basis for FLI Section 4A.2 of NI 51-102 requires companies to have a reasonable basis for their FLI. This would include the assumptions used and the study supporting FLI. In the case of mineral projects, assumptions would include: metal or commodity price and currency exchange rates; capital and operating costs; mining method and dilution; process method and recoveries; mine production rates; and the time frame for permitting and constructing a mine.

A reasonable basis for metal price assumptions used in a mining study, for example, is to use industry consensus price, as determined by averaging the long-term metal price fore74 | CIM Magazine | Vol. 5, No. 6

casts published by investment banks and mining analysts.

Identifying FLI Section 4A.3 of NI 51-102 requires companies to present the FLI in a way that investors readily identify it as such. CSA Staff Notice 51-330 provides guidance that general or generic statements are not considered effective in meeting this requirement. The Staff Notice provides the following examples of commonly used, but ineffective statements: “This document may contain forwardlooking statements. Forward-looking statements are often, but not always, identified by words such as “believes,” “may,” “likely,” “plans” or similar words.”

or

“All statements, other than statements of historical fact, that address activities, events, or developments that Company X expects or anticipates will or may occur in the future are forward-looking statements.”

Statements identifying FLI involving a mineral project would be more effective if the statements are specific in the content that is forward-looking, for example, the information in a table containing mine production forecasts and expected cash flows from preliminary feasibility or feasibility studies.

Disclosing material factors, assumptions and risks Section 4A.3 also requires companies to state the material factors or assumptions used to develop FLI, and identify material risk factors that could cause actual results to differ materially from the FLI presented. The uncertainty regarding the assumptions used in mining studies should reduce as a project progresses. For example, the

collection of geotechnical data should reduce the risks associated with the geomechanical assumptions used for the mine design, in the same manner that metallurgical testwork improves the confidence (reduces the risk) in the process design and metallurgical recovery assumptions. Some assumptions are not project-specific, such as currency exchange rate or commodity price assumptions. The CSA has provided guidance that the risk factors should not be so “boiler plate” in nature so that FLI could apply to any type of business. Companies are not expected to anticipate and discuss everything that could conceivably cause the results to differ, and the risks identified should be specific to the FLI in the particular disclosure document.

As well, the type of risks should change as the mining project progresses. Increasing amounts of test work, engineering design and discussions with permitting authorities and impacted communities should reduce risk in more advanced projects, and FLI statements should reflect such risk changes.

Carve-outs for the mining industry Part 4B of NI 51-102 limits the time period that future-oriented financial information (FOFI) can be reasonably estimated, and provide guidance that this time period should generally not go beyond the end of the company’s next fiscal year. Fortunately, the CSA recognized that it is accepted practice in the mining industry to project cash flows over a life-of-mine, which can, and frequently does, exceed a decade or more. A carve-out to this time limitation is provided in NI 51-102 for disclosure subject to NI 43-101.

Section 5.2 of NI 51-102 requires companies to provide an update of previously disclosed material FLI in their management’s discussion and

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analysis. The update must discuss events and circumstances that could cause actual results to differ materially and discuss the expected differences. Many inputs to preliminary assessment, preliminary feasibility and feasibility studies on mining projects can be expected to be become out of date soon after the study is completed. The CSA recognized that it would be particularly onerous for a mining company to review the mining studies on material mineral projects each quarter for material differences. Therefore, the carve-out to this requirement was provided for FLI subject to NI 43-101.

Shelf life of FLI in technical reports In spite of the above carve-outs in NI 51-102 for FLI subject to NI 43-101, mining companies should assess whether FLI statements have become stale-dated. In the proposed changes to the Companion Policy 43-101CP of NI 43-101, the CSA included the following guidance: â&#x20AC;&#x153;Economic analyses in technical reports are based on commodity prices, costs, sales, revenue, and other assumptions and projections that can change significantly over short periods of time. As a result, economic information in a technical report can quickly become outdated. Continued reference to outdated technical reports or economic projections without appropriate context and cautionary language could result in misleading disclosure.â&#x20AC;?

Civil liability for misrepresentations in FLI Most provinces and territories in Canada have passed, or are considering passing, changes to their Securities Act that provide civil liability for misrepresentations in FLI. The same legislation provides a defence against that civil liability by offering a safe harbour for FLI disclosure. To take advantage of this defence, a company must include certain disclosure in close proximity to the FLI. In general, the required information for the safe harbour is the same information required by Part 4A of NI 51-102. However, mining company management should discuss with their legal counsel how to meet the disclosure requirements in their particular circumstances. CIM

About the author Greg Gosson is technical director, geology and geostatistics, mining and metals consulting, for AMEC Americas Limited.

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September/October 2010 | 75

COLUMNS | supply side Taking on the productivity challenge A Canadian mining supplier leads by example A page for and about the supply side of the Canadian mining industry

Jon Baird To succeed in this globalizing, competitive world, Canadian mining suppliers have to be highly pricecompetitive and provide excellent customer service, which includes delivering the highest quality products on time. And yet, Canadian productivity has inched ahead by only 0.7 per cent a year over the past decade. In 2008, it actually shrank by 0.6 per cent, according to the OECD, which ranks our country’s performance behind such economic basket cases as Greece and Spain. That same year, the United States, Canada’s biggest trading partner, boosted its productivity by 1.3 per cent, widening an already large gap. However, CAMESE member Wabi Iron & Steel Corp. of New Liskeard, Ontario, is doing something to ensure that they are chosen over their competitors from countries with low-cost labour.

Founded in 1907, Wabi currently employs about 120 workers. Focusing mainly on the mining industry, they custom design, engineer and fabricate conveyances and material handling systems, as well as produce a wide variety of cast wear products in more than 100 alloys in their iron and steel foundry.

Last year, Wabi undertook a $450,000 productivity improvement project with the help of a $50,000 grant from the Canadian Manufac-

turers & Exporters’ (CME) SMART program. The goal of their project was to “improve processes, management systems and management skills to create a continuous improvement culture.” The work involved extensive management training and indepth analysis of processes and systems to eliminate waste and improve on-time delivery.

One of the rewards of Wabi’s progress was to be featured in an extensive front-page article in the June 29, 2010 issue of the Globe and Mail’s Report on Business. Including many photos, the article occupies the equivalent of two full pages of the newspaper and showcases “Wabi’s daily fight for higher productivity, which is being duplicated at many Canadian companies. The outcome of their struggles will determine how Canada fares in the global market against growing competition from low-wage countries such as Mexico, China and India.”

The Globe suggests that if Bank of Canada governor Mark Carney wants an example of Canadian companies that are addressing the problem head on, he should visit Wabi, where president Peter Birnie and his team have discovered that improving productivity can be deceptively simple, even for smaller companies without access to huge amounts of capital. An example

mac facts Teck Resources Limited is one of the world’s leading producers and exporters of metallurgical coal, used in steel making.

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of a simple improvement was the installation of a new entrance so that incoming supplies and finished products were not moving through the same door. This change has improved manufacturing efficiency by creating linear material flow directions in the shop.

Wabi has used the 5S strategy of LEAN Manufacturing systems to organize its manufacturing departments. Tooling has been centralized to work areas thereby limiting workplace “traffic.” Also, workers are now able to use three-dimensional imaging technology on the shop floor to better interpret work instructions.

Employee movement is now more focused on adding value to the manufacturing process.

Proof of the project’s success was that sales grew without the need to increase the workforce. Revenue from the mechanical business has tripled since the productivity project began.

Total revenues in 2009 were about $18 million and the company targets more than doubling this over the next five to six years. Wabi’s key to success is productivity improvements combined with a focus on world-class customer service, innovation and the passion to win.

This example is one that should be heeded by other Canadian mining suppliers. CIM

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

first nations |

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Scratching the surface: aboriginal women in mining Lana Eagle Women in Mining Canada and the Mining Industry Human Resources Council recently launched “RampUP: A Study on the Status of Women in Canada’s Mining and Exploration Sector.” One of its primary objectives is, among other things, to increase employment opportunities for women, a group that is vastly underrepresented in the mining industry.

Even more affected are Aboriginal women.

Currently, training programs for Aboriginal Peoples in Canada exist on job sites and through colleges. However, in response to the increased training needs of communities and industry, Northwest Community College has developed the School of Exploration & Mining (SEM) where 65 per cent of its student body is First Nations. One of the courses offered at SEM is the Environmental Monitor Assistance Program. Students taking this course spend 25 days out in the field, followed by one week in the classroom, and then an additional 25 days in the field. For the last two-year period (2008 and 2009 field seasons) 21 per cent of SEM students were female; 15.5 per cent of SEM students identified themselves as Aboriginal females.

Of the female students that identified themselves as Aboriginal, 65 per cent found employment or returned to school. This percentage is traditionally lower than SEM’s average employment rate of 70 per cent; however, this can be attributed to the economic crisis and significant downturn in the industry last year. When asked what were the barriers for Aboriginal women entering the program, Tanya Reedy, the schools’ coordinator, said the biggest concern was “Who is going to do what I do when I am gone?" — for example, in terms of childcare, caring for elders and other extended family, as well as the daily tasks of

marginalized in Canada. The AP cooking, cleaning, canning, smokidentifies poverty, substandard housing, berry picking, etc. ing, health and mental challenges, According to the NWT Bureau of and low educational attainment as Statistics, three per cent of people the current realities and experiences working in trades positions are of Aboriginal women. They continue women. Fewer still are Aboriginal to be the most at risk group in women who face many barriers in Canada for issues related to violence accessing employment in the indusand complex issues linked to intertrial and trades occupations of the generational impacts of colonization mining, oil and gas industries. Such and residential schools. While the barriers include being the primary, AP identifies the mechanism for and possibly the only, caregiver in the change to occur at the provincial, family. Lack of support from partners territorial and federal government and family in pursuing rigorous levels, industry, as a key stakeholder, training, limited education levels and has a role to play as well in building opportunities, limited financial partnerships with equitable outresources to further one’s developcomes between the private sector ment, and the perception that trades and Aboriginal Peoples. And when it and industrial occupations are best comes to access to training and suited to men can also pose restricdevelopment, there should be opportions on women. And in some cases, tunities that will allow individuals to there are significant social issues that stay in their home community if they exponentially increase barriers: so choose. issues such as violence and substance Despite the challenges that Aboaddictions. riginal women face, women have Together with its partners, the Staproven that they can be successful in tus of Women Council of the NWT the workplace.

In trades and indushas designed a highly innovative pilot trial occupations, women succeed project — the Northern Women in because of their concern for safety Mining Oil & Gas Project (NWMOG) and their attention to detailed work.

— where it will be determined if the We have only just scratched the surnumber of northern women face on what could prove to be a sigemployed in skilled trades can be significant employee resource for minnificantly increased through a dediing companies. It will take compacated women-only, partnership-based nies that are both open-minded and strategic approach to training and innovative to help in removing barridevelopment. ers that face Aboriginal women. CerThe Native Women’s Association tainly, government and educational recently completed their Action Plan institutions can play their part in (AP). The AP is a clear and compreaffecting change as well. CIM hensive plan that aims at reducing violence, improving economic secuAbout the author Lana Eagle rity and achieving is vice-president of Learning Together, higher educational a national Aboriginal grassroots outcomes for Aboorganization that is focused on mining riginal women relationships. She is also a consultant who, as a group, to mining companies and advises on are the most relationship building between industry socially, politically and Aboriginal communities. and economically September/October 2010 | 77

COLUMNS | HR outlook Workplace diversity: a core value at Suncor Energy An increasingly competitive labour market is affecting all industry sectors, but particularly those that rely on skilled trades and highly educated professionals. The Canadian mining industry, with its strong commodity market and current growth projections, is particularly vulnerable to labour shortages.

In addition, the industry is facing a demographic challenge; an aging population means that in the next ten years alone, 40 per cent of the mining workforce will be eligible for retirement, driving the need for approximately 100,000 new workers by 2020, according to MiHR’s latest labour market information report released in August.

In Canada’s oil sands alone, approximately 13,000 additional workers will be required by the producers by 2020, says Anne Marie Toutant, vice-president, mining operations for Suncor Energy, located in Fort McMurray, Alberta.

Diversity is good business Diversity is an integral component of the HR solution and “people” falls under one of Suncor’s four areas of operational excellence. “People are at the heart of each piece of equipment you operate, so for us, having an engaged, competent and effective team of people is really important,” Toutant explains. Attracting and retaining nontraditional sources of talent that have previously been under-represented in mining is critical to ensure the necessary people and skills are available in the short and longer term for the sustainability of the industry.

But for Toutant, addressing the HR challenge is merely one advantage of building a diverse workforce. “We believe that better business decisions are made when a team is comprised of people who come from different backgrounds, have different educational 78 | CIM Magazine | Vol. 5, No. 6

Photo courtesy of Suncor Energy

Lindsay Forcellini

A female heavy hauler welder at work at Suncor’s oil sands site in Fort McMurray, Alberta

training and different problem-solving techniques,” affirms Toutant. “With that kind of diversity, you bring a unique view of the challenges and a more thorough and robust approach to finding solutions.”

Revitalizing the workforce There are many opportunities to revitalize the workforce and diversify the potential talent pool. A number of groups that are currently underrepresented in the mining industry, yet available in the general labour force, include women, youth, new Canadi-

ans, Aboriginal Peoples and workers from comparable industries that have experienced a downturn. Suncor is making strides in workplace diversity.

It recruits from seven to eight universities across Canada to tap into the full spectrum of talent students can offer.

About eight per cent of Suncor’s mining workforce self-identifies as Aboriginal, which is slightly higher than the industry average of 6.5 per cent. Toutant says the company also encourages an open dialogue with Aboriginal communities by inviting elders to visit the mine site to share

MiHR takes on the diversity challenge Earlier this summer, MiHR received $850,000 in funding from Human Resources and Skills Development Canada for its new diversity project, SHIFT: Changing the Face of Canada’s Mining Industry. The project will be developed over the next three years and includes a number of outcomes to reduce barriers to workplace diversity. Building upon MiHR’s previous work, Mining for Diversity, SHIFT will address technology and intergenerational workforces, barriers to workplace diversity and best HR practices to increase Aboriginal inclusion in mining.

HR outlook | their knowledge about the local environment and cultural practices.

The company is a strong supporter of the National Aboriginal Achievement Foundation, which provides scholarships and bursaries to help Aboriginal Peoples pursue further education. It also supports Women Building Futures, a pre-trades program for under-employed or unemployed women, 20 to 40 per cent of which are Aboriginal. This program provides an entry skill set for candidates to enroll in an apprenticeship program.

Diversity is an important factor at all levels of an organization and Suncor is creating opportunities for female leaders to network, explains Toutant.

At its oil sands mining operations, women make up about 22 per cent of the professional or staff positions and 12.4 per cent of the total workforce.

Sixty women hold management or senior management positions at the oil

sands site. Partnering with the Suncor Energy Foundation, Toutant and Shelley Powell, vice-president, extraction operations, invited female leaders to participate in the Famous 5 Speaker Series, allowing them to share their experiences and providing opportunities for them to partner together.

A core value Enhancing workplace diversity offers many benefits, but it can be challenging.

Toutant’s advice: Don’t get caught up in

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the numbers. “It’s important to know where you are and be focused on building towards a new future, but our aim is to get the best person for the job all of the time,” Toutant explains. “If you hold [diversity] as a core value, you have fewer pitfalls.”

MiHR is committed to supporting the industry’s ability to actively engage non-traditional sources of labour, and its newly funded diversity project is poised to tackle this challenge and offer industry-wide benefits. CIM

About the author As marketing and communications coordinator, Lindsay Forcellini is responsible for supporting MiHR’s communications and online media initiatives, and coordinating the production of marketing and communications materials.

Formerly a writer for Natural Resources Canada, she holds a bachelor’s degree in journalism from Carleton University.

September/October 2010 | 79

Photo courtesy of Michael Holly

COLUMNS | innovation

Preparing an in-line dewatering experiment at the OSTRF

Innovations in tailings management Nicholas Beier and Dave Sego The vast amount of disturbed land and the quantity of oil sands tailings being stored presents a challenge for the industry and an opportunity for the University of Alberta’s Oil Sands Tailings Research Facility (OSTRF).

Industry endeavours to study the fundamentals of particular issues associated with tailings management require coordinating the efforts of researchers from diverse backgrounds and graduate students from various disciplines. This impediment was recognized by the stakeholders who came together to support the OSTRF. The OSTRF is a unique academic and industrial research facility dedicated to collaborative and multidisciplinary oil sands tailings research.

The facility provides crucial infrastructure for research opportunities at the intermediate scale not previously 80 | CIM Magazine | Vol. 5, No. 6

available for university research in Canada. Between 2003 and 2010, the OSTRF has reported on 32 separate research projects. As a result of these projects, 16 students have graduated and are currently working for oil sands companies, regulators, oil sands industry consultants or have continued their graduate studies at the PhD level.

The need to enhance tailings management is now even more important than when OSTRF was established in 2003. Due to what it perceived to be limited progress in reclamation efforts, the Energy Resources Conservation Board (ERCB) — via Directive 74 — recently began requiring that the industry improve tailings (fines) management and its documentation of the progress of dealing with tailings on each mine site.

The initial OSTRF research program focused on improving the understanding and management of the massive inventories of mature fine tailings (MFT) or “legacy tailings.”

The greatest research emphasis was on the geotechnical and chemical behaviour of engineered tailings and the management and treatment of process affected water (PAW).

The current research projects are topical given the media’s attention on the environment and the emphasis of the ERCB’s Directive 74. While research efforts on the quality and treatment of water have increased, an appreciation of the necessity to understand and deal with the legacy tailings remains. This focus on water relates to its characterization (naphthenic acids [NA]), its treatment with coke and rapid removal

innovation | of water from the total tailings stream.

In 2009, a NA fluorescence sensor was developed by an OSTRF research team. The device is a bench scale instrument with a detection limit of less than 4 mg/L of NAs in PAW. The technology offers a cost-effective, compact, non-invasive and continuous water quality monitoring tool that can detect, characterize and track changes of NAs in PAW. Reducing or eliminating the formation of new MFT during conventional tailings deposition poses a challenge due to the segregating nature of the total tailings stream.

Additionally, the use of hydrocyclones to generate dewatered tailings sand results in water and fines discharging as cyclone overflow into a tailings pond where additional MFT is formed.

Using the principles of cross-flow filtration, a novel, in-line tailings dewatering technology is currently under development by an OSTRF research team to address these issues.

The in-line dewatering process aims to rapidly dewater the total tailings en route to the disposal area while ensuring the released water is low in fines (for immediate recycle to extraction) leading to deposition of a dewatered total tailings (containing sand and fines) as a non segregating mix.

Benefits of achieving this include the prevention of new MFT inventory, the rapid release of heated water — thus reducing energy demand and greenhouse gas (GHG) release — and the potential to deposit total tailings without requiring water retention containment dykes.

The next phase of research to be undertaken by OSTRF researchers will continue efforts towards reducing the volume of tailings and their stabilization in a timely manner for reclamation. Research projects will include: • Reduction or elimination of volatile organic carbons and GHG from tailings ponds.

• Further development and scaling of the novel in-line tailings

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Table 1. Current OSTRF projects Water treatment options and their applicability to oil sands operations for recycle and safe discharge Foam tailings: a new methodology of stabilization of tailings Dewatering behaviour of oil sands tailings from different processes Implications of tailings management and planning options Dewatering non-segregating mixtures of oil sands Fluorescence characterization of naphthenic acids Characterization of petroleum naphthenic acids in oil sands process-affected waters using fluorescence technology The removal of naphthenic acids in oil sands process-affected water by coke adsorption Freeze-thaw dewatering of Albian mature fine tailings Sand and slurry jets in artificial and real MFT without water-capping Consolidation behaviour of MFT using centrifuge Advanced treatment of oil sand tailings water

dewatering system and alternative methods to release water from the MFT inventory.

• Treatment technologies for re-use of PAW in utilities and for upgrading while also developing quality standards for eventual discharge of PAW off lease.

• Stabilization and capping of soft tailings deposits in preparation for

reclamation, including methods of dewatering the upper surface of soft tailing to enhance its strength.

In an era of heightened environmental awareness and increasingly stringent regulations, the OSTRF is well poised to develop novel approaches for tailings management and to educate and train the future leaders of the industry. CIM

About the authors Dave Sego (left) is the principal investigator of the Oil Sands Tailings Research Facility and a professor emeritus in the Department of Civil & Environmental Engineering at the University of Alberta.

Nicholas Beier works with Dr. Sego at the OSTRF on developing novel approaches to tailings management.

September/October 2010 | 81

COLUMNS | eye on business The Quebec Utica Shale gas play — recent developments Martin R. Gagné Parts of Quebec have long been known as having geological features indicative of potential hydrocarbon reserves. Efforts to better identify and explore this potential have been ongoing for many years. Interesting developments are now coming out of these endeavours, including those involving the Gaspé Peninsula and Anticosti Island. The St. Lawrence Gulf and Estuary1 also have strong potential.

The following general overview (as of mid-July) focuses on the St. Lawrence Lowlands play which, according to many, may lead to Quebec joining the ranks of producing jurisdictions within a relatively short time frame.

The St. Lawrence Lowlands The St. Lawrence Lowlands are an area of Quebec located mainly along the St. Lawrence River’s shores (more extensively the south) between Montreal (to the west) and Quebec City (to the east). The Quebec Minister of Natural Resources and Wildlife, under the applicable provisions of the Quebec Mining Act, has issued 186 petroleum, gas and underground reservoir exploration licences to 17 holders covering a large part of the lowlands.

In terms of exploration and development needs, the lowlands are easily accessible, with all infrastructures in place and close by, including the two main Quebec East-West highways and Gaz Métro’s gas distribution system. A large part of the surface is privately owned, fairly developed and occupied with a variety of land uses, including many farms, cities and towns.

1

Under exploration moratorium in Quebec. There are certain unresolved issues concerning the gulf — including federal-provincial jurisdictional and Quebec-Newfoundland territorial limit issues — which may have an impact on hydrocarbon development in the gulf, such as, for example, at the Old Harry deposit. Newfoundland is refusing to acknowledge that such deposit may, in part, be in Quebec’s territory.

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The Utica Shale Formation The extensive geological formations — Trenton Black River (HTD), Lorraine Shale and Utica Shale — are favourable to the presence of hydrocarbons and, as such, explain the interest in this play. Horizontal drilling and fracture stimulation technology and its use have, in recent years, evolved and successfully and profitably produced substantial quantities of gas from shale plays (for example, Barnett in Texas and Marcellus in Pennsylvania and New York). These, plus the fact that production from such formations may help NorthAmerica become more independent in its long-term energy needs, have heightened the attractiveness of shale plays such as Utica.

Licence holders, sometimes in conjunction with other exploration companies, are involved in programs throughout the lowlands, several of which include completed or ongoing horizontal well drilling and fracture stimulation of the Utica Shale.

Recent announcements in this regard include some by Junex, a Quebec-based junior exploration company that holds extensive exploration licences (on approximately 4,000 square kilometres) in the lowlands (some in conjunction with Forest Oil Corporation). For example, in November 2009, Junex announced the completion of a successful propane fracture stimulation of the Utica Shale (a first for the formation and for eastern Canada) from a well located in a town close to Quebec City; initial production testing yielded some light crude oil and natural gas. More recently, based on reports it commissioned from an independent engineering firm, Junex also announced the best estimates for a large part of its licences as being 48.34 trillion cubic feet (TcF) of undiscovered original gas in place and 3.7 TcF, at an effective 10 per cent recovery factor (low: 1.23 TcF,

4 per cent; high: 10.98 TcF, 25 per cent), of potentially recoverable gas (gross unrisked prospective resource).

Other announcements came from Questerre Energy/Talisman Energy regarding their ongoing exploration program on lands in the central part of the play and its five horizontal wells with fracture stimulations, some already drilled and completed. A production rate of approximately five million cubic feet per day of natural gas has been announced further to the initial production testing of a completed well and fracture stimulation in SaintÉdouard, a town southwest of Quebec City. The completion of a long-term production test of this well was announced in early July, with results (some still being analyzed) said to have at least met expectations. Questerre is also reviewing pipeline options that would allow it to connect the well to the Gaz Métro distribution system.

Plans for the construction of this connecting pipeline, which now may also involve a second well located in nearby Leclercville, are said to be fairly advanced. The connection, representing an investment in the order of $22 million, is expected to be in place by mid-2011 with initial volumes flowing by the end of summer 2011 (a year earlier than anticipated) and more important quantities some time in 2014.

Other exploration programs, some with drilling of horizontal wells and fracture stimulation (either ongoing or planned), in other parts of the play have also been announced recently. This includes programs by Canbriam Energy and Quebec-based Gastem on licences in the vicinity of Saint-Hyacinthe in the western part of the play.

What the future holds Estimates of recoverable natural gas from the Utica Shale are now said to range from 10 to 25 TcF. These estimates do not include the hydrocarbon potential of the other formations

eye on business | (such as Lorraine and Trenton Black River) of the lowlands and possible increased recovery rates as technology improves.

Although it is still early, ongoing exploration work and announcements show that those involved are making good progress, and the necessary knowledge base on accessing and extracting gas from the Utica is growing (by October 2010, there should be 12 announced completed horizontal wells and fracture stimulations in the Utica). At the very least, there are strong indications that Questerre/Talisman are getting closer to the production stage.

The Quebec government seems to be solidly behind this new activity, given its anticipated large and longterm economic development and employment opportunities (7,500 estimated direct jobs) as well as the government’s expectation that recoverable natural gas from the Utica could mean long-term self-sufficiency for Quebec’s gas needs (presently, gas supplied from Alberta at an annual cost of about $2 billion).

Financing, risk reduction and limited availability of the specialized equipment required for more horizontal drilling and fracture stimulation are among the challenges to moving forward with this play.

Locally, the industry and shale gas production methods and their implications are not well known or understood by Quebec’s population; issues such as environmental impact, social acceptability, other land uses, in particular agricultural, and land owner rights need to be better addressed.

Both the industry and government are intensifying their efforts to better inform the population and address such issues.

With this in mind, the Minister of Natural Resources and Wildlife has announced that new legislation specific to the oil and gas industry should be introduced this fall; the government’s stated objective is the modernization of the legislative framework in a sustainable development context (which includes long-term environmental and

community consultation considerations). In proposing such legislation, the government will take into account not only the representations, concerns and proposals of industry representatives, but also those of interest groups (environmental, citizens and others), municipal or regional authorities, and the citizens themselves and their elected representatives. The government will also take into account the experiences of other shale plays and the way certain aspects (including environmental) of some of these plays have recently been reported on in Quebec. Given the various points of view, it will be interesting to see the extent of the proposed changes and the solutions the government will propose in order to arrive at a balanced legislative framework, which will certainly be compared by the industry to that of other relevant jurisdictions.

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That being said, recent developments, along with the Quebec government’s current position and interest, the growing importance major players are giving to North America’s shale plays, and the involvement of certain larger exploration companies (for example, Talisman) in the Utica play indicate that Quebec’s potential for becoming a producing jurisdiction, at least for natural gas from the St. Lawrence Lowlands, seems to be progressing towards realization. Expectations are that production could begin in as early as five years; some say perhaps even sooner. CIM

About the author Martin R. Gagné is a partner at Fasken Martineau DuMoulin LLP’s Quebec office and a member of the firm’s Global Mining Group. His practice includes Quebec oil and gas matters.

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September/October 2010 | 83

COLUMNS | safety Challenge accepted Genesee Mine working to maintain clean record

Sometimes striving to maintain a good record is an even greater challenge than attaining it. Such is the case at Genesee Mine, which has successfully achieved 22 consecutive years without a lost time accident — which is, in fact, how long the mine has been in operation. How does the mine ensure it keeps that perfect record going? By making safety priority number one.

In recognition of the prominence it places on safety — even over production — Genesee Mine has been awarded its tenth John T. Ryan National Trophy this year. Owned jointly by Sherritt and Capital Power Corporation, and operated by Sherritt Coal, Genesee produces approximately 5.5 million tonnes of coal annually for the Genesee Power Plant run by Capital Power. Over the past 22 years, the mine has grown to employ 160 people and has accumulated 3.4 million manhours, mined 76 million tonnes of coal, and moved over 700 million banked cubic metres of material. All that and a clean safety record too.

Enemy number one: complacency After accepting its most recent John T. Ryan Trophy this past spring, management knew it faced a key challenge — avoiding complacency. Not an operation to rest on its laurels, it went directly to its employees for input.

“We held discussions over four days with our four crews and asked them: ‘In light of winning the J.T. Ryan Trophy ten times, if you were interviewed and asked what the key is to the safety record we have, what would you say?’” explains Chris Barclay, general manager, Genesee Mine.

Overwhelmingly, the employees shared their views on what they felt contributed to the safe work environment, including: • Positive attitudes and mutual respect.

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Photo courtesy of Normand Huberdeau/NH Photographes

Heather Ednie

Genesee Mine receives the John T. Ryan National Trophy at this year’s CIM Awards Gala. From left to right: Gord Winkel, chair, John T. Ryan Safety Trophies Committee; Ken Martens, manager, mine operations, Genesee; Laura Carter, HR and safety advisor, Genesee; and Michael Allan, CIM past president.

• Competent trainers (senior operators train new hires).

• Employees care about the condition of the equipment and recognize that the maintenance department cares and is compliant.

• Field staff see that different departments work well together: engineering/maintenance/administration, etc.

• Good communication and cooperation within the office.

• Taking pride in work.

• Viewing management hierarchy as flat and recognizing the open-door policy.

• Good leadership among the crew.

• Valuing rescue and response team.

• Hiring good people — taking the time to find those that fit the company’s site, culture, safety goals and objectives.

• Safety is taken seriously. It’s not just a lip service or a poster on the wall.

• Using the right tools for the job.

• Appreciation is shown for hard work and dedication — in many forms, but the most simple is being direct — “Thanks for a job well and safely done.”

“We synthesized our results from the four meetings, and in the end, one key common thread emerged,” says Ken Martens, manager, mine operations. “This site started with a group that was committed to safety; that culture has been maintained and expanded by the senior operators to include the juniors as they come on board. We have no more of an advanced safety program or processes than others; it’s about a culture that cares, and knows we do.”

Even so, the focus on safety must be maintained and continuously cultivated. “Over the last seven years we’ve doubled the workforce, and we see safety as a challenge on an ongoing basis,” Barclay says. “We must always work towards improvement and ensure safety issues are dealt with as noticed — that field-level risk assessments (FLRA) are done on a regular basis and management always follows up.”

Barclay adds that they must continually remind employees that safety truly is prioritized over production.

“You need to tell them over and over again, encouraging them to not be

An evolving program According to Barclay, the growing workforce at the mine has brought safety to a new, slightly more complex level. In response, Genesee has just hired its first safety advisor — an operator who has been brought on in a staff position. “We need our formal training programs updated. We’re held to higher standards of health and safety today than before,” he adds. “To be compliant, we see the need for a person dedicated to it full time, plus, of course, safety remains a component of everyone’s job.”

Safety is a priority for Sherritt at all its sites. “More and more of our management goals and objectives are tied to safety, and it’s the first item of business at any meeting,” Barclay admits.

Weekly reports sent to the corporate office include any environmental or safety incidents. “We see the little things going on as indicators and we respond,” he adds. “It’s best to get involved early. And employees will bring them to our attention. Their willingness to bring items forward stems from them knowing action will be taken.” CIM

Safety: an operator’s responsibility Heather Ednie Dragline operator Al Williams has worked at Genesse Mine since before its opening.

He signed on in 1982 during the construction of the main power plant. Williams recalls the early days, when the mine first went into production. “There were a few supervisors and a handful of employees from the pit,” he says. “We had lots of conversations about how to create an environment without lost time accidents for the term of the mine. We thought it was impossible, but as our record shows, here we are — it’s been quite an achievement.”

Even with a focus on safety at the onset, numerous changes have occurred throughout the years.

Informal meetings between a handful of people have evolved to safety committees; the on-site workforce now encompasses over 160 employees, and ISO 9000 and 14001 and other standards and policies have not only driven the safety program, but the safety performance to date has set the bar high.

Williams says the hazard assessment program means the crew must be responsive to safety indicators every day. “If anything — as small as tripping — happens, we stop, assess, Marion 8750 dragline write it down, so that management can seek improvements,” he explains. “That’s one of the great things here at Genesee. We can always go to management. They don’t only listen, but work with us for solutions.”

“Everything changes, and we’ve changed with it,” Williams adds. “One thing that has remained constant, though, has been the great open-door policy and the recognition that safety is up to us. I think in many places, production comes first. But here, we work safely and fit production in.”

Williams believes the openness and high level of communication and cooperation between management and the people working in the field is the number one reason for the stellar safety record to date. In the end, everyone works towards the same goals.

“We all strive to supply our customers with good quality coal, safely,” he explains.

“Safety is all of our responsibility and duty — to ourselves, our families, customers and community.”

That commitment is becoming even greater as the latest generation of employees has begun working onsite. In addition to a number of his colleagues’ children now working at Genesee, Williams’ own son is employed as a heavy-duty mechanic. “We all hope we’ve created a base so that now the second generation can carry on with a strong safety record,” he admits. “We want them to be as safe, and even safer, than we were.”

Photo courtesy of of Sherritt Coal

afraid to ask for help when needed,” he says.

Martens agrees, adding that when employees do buy into the idea of a safety priority, it leads to a more productive site. “You can’t be ashamed to say that’s a strategy,” he adds. “It empowers people to stop, and to address safety.

Our 22-year record by no means gives us the right to complacency,” Martens asserts. “Rather, each year, we’re more aware of the need to maintain that record. Complacency is the ultimate enemy in a situation like this.”

It takes frequent communication.

In fact, Martens says the meetings held this past spring with the crews about the factors contributing to safety were not only intended for management to gain information, but also to demonstrate that the key to a safe workplace lies with all employees. “They control what goes on in the field,” Martens says. “We can manage the system, but the day-by-day is up to them.”

September/October 2010 | 85

COLUMNS | women in mining Up to the challenge Syncrude’s Kim Farwell takes on new role Heather Ednie Syncrude’s Kim Farwell likes a challenge. Currently an advisor with the company’s Organizational Effectiveness Team, she says her primary motivation is derived from surmounting the hurdles she faces on the job. “Oil sands isn’t a broad industry, so we do a lot of troubleshooting ourselves and with experts from other organizations, such as the University of Alberta and the Alberta Research Council,” she explains. “We also do a lot of grassroots engineering. I’ve stayed here because the challenge never stops.”

Soaking it all up Farwell’s search for a stimulating career is what brought her west to Syncrude Canada Ltd. Since joining the company 15 years ago as a chemical engineering co-op student from the University of Waterloo, Farwell has benefited from many opportunities, including working on projects and in operations, research and management.

Although she has gained experience in many aspects of oil sands mining and extraction, Farwell has chosen to spend the better part of her career in the extraction plant.

There, she works closely with the mining and geology departments, focusing on how to blend ore and control the mine plan. She has also been the technical leader of the tailings and hydroprocessing areas, giving her a broad understanding of the overall operation.

One of the key challenges she enjoys tackling is her role in the extraction plant’s role as the link between the mine operation and processing; however, the two have very different time horizons. “In processing, you talk in minutes and days, while in the mine and tailings planning process, minutes are weeks and days are years,” she says.

“The two have very different philosophies that need to be combined to be successful. In the extraction plant, we’re the meat in the sandwich between the two, acting as a buffer. It leads to some very unique moments.”

Playing a leading role This past June, Farwell became the 91st president of the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA), and, with Syncrude’s support, she dedicates 50 per cent of her time to the one86 | CIM Magazine | Vol. 5, No. 6

year term. As president, she heads the Council and works on projects and events, while adjusting her schedule to accommodate a number of speaking opportunities.

As a regulatory body, APEGGA is at arm’s length from the government and helps maintain a strong worldwide reputation for the professions it represents. However, the organization is struggling in terms of its communications and, as such, Farwell has made improving communications with members a priority for the coming year. “As a regulatory organization, we need to focus on how to communicate our role to our members,” she says. “Some members may not see how we support them — it takes communications; we need to explain why we’re here.”

Passing of the torch In her youth, Farwell thought it would have been fun to have taken part in the gold rush. “Well, it’s the same level of excitement and challenge here [Fort McMurray, Alberta] — developing the technology, the community,” she laughs. “It’s the modern day boom town.”

It is this sense of excitement and adventure that Farwell wishes to pass on to the next generation entering the industry. Mentorship has played a fundamental role throughout her career. “I had the fortune of having some very good mentors who drew me in at an early stage,” she recalls. “I was invited to get involved in things early on in my career, such as APEGGA, where I joined the local branch and was then asked to run for Council in 2002. It created a lot of contacts.”

Farwell now strives to provide mentorship to young engineers entering the industry. “We all need role models to be able to picture ourselves doing new things,” she adds. “Unfortunately, women in senior management positions are not there in great numbers, so we need to promote women role models and coaches much more to lead the way for the younger women joining industry’s ranks.”

Ready for the next new opportunity This year, APEGGA is demanding most of Farwell’s time, and while the challenge is greatly rewarding, she is looking forward to next year when she will be back full time at Syncrude. What else will fill her schedule remains to be seen.

“At each turn in your career path, new opportunities to get involved in different ways present themselves,” she explains. “Life is all about choices, and you choose how you respond. I enjoy change — it’s exciting. New opportunities will be opened to me that weren’t there before this year — we’ll see what they look like.” CIM

student life |

COLUMNS

Challenges in the graduate program Tips for surmounting the hurdles Juliana Parreira Photo courtesy of Juliana Parreira

To obtain better job opportuend, participate in poster nities, many graduates are competitions and present returning to university for papers at conferences, and advanced study. Graduate proalways talk about your projgrams open doors to expanding ect when you have the knowledge, new ways of seeing opportunity. the world, and improving skills Presenting your work at a such as writing, public speaking conference is a good learnand teaching. However, while ing experience and an studying, students face special opportunity to receive feedchallenges. back and eventually to pubI had an opportunity to work lish your work. I presented a on two projects in the oil induspaper at the 2010 CIM Contry, and although they were ference and Exhibition and challenging, my academic also participated in the CIM research project is much more Student Poster Competition. difficult. An academic research It was very interesting to see On a week-long visit to BHP Billiton’s Mount Keith Mine, Parreira got to project can quickly change; if familiarize herself with the mine site and collect data for her research project. how people in the industry you are not focused and aware responded to my research — of these sensitive changes, you may measured by tracking the different many questions were raised and I was experience a lack of motivation — for project activities. This strategy has exposed to many new ideas and viewme, motivation is the key to success. kept me organized and motivated. points. I was also able to obtain imporIn industry, you are required to proUsing English is another challenge tant data for my research. Overall, I duce results in a very short time since for some foreign students. TOEFL cerwould say that attending industry-led your colleagues are waiting for these tification does not always prepare stuconferences is very rewarding. results to do their jobs — you are part dents for the reality of using English at To summarize, the best way to of a team. However, in a graduate pro- university. Although the first semester avoid future problems is to be honest gram, your team is usually you and can be very challenging, it is not with yourself, make sure that you like your supervisor; your common goal is impossible. Students should not be too the topic, the institution, and your to make a new contribution in your hard on themselves; they need time to supervisor, and be ready to do what it field in order to earn your degree. This adapt. An approach that worked for me takes to succeed. Keep in mind that is a lot of responsibility for a new grad- during my first term was to study the you will spend a great deal of time uate student. As a consequence, frus- subject one or two days before class. and effort on this. Also, be aware of tration can arise when an experiment This gave me an opportunity to learn the opportunities that conferences does not work. new vocabulary, which helped me betpresent, write papers related to your Students often complain that they ter understand the professor’s lecture. project and participate in poster do not know where and/or how to Some students still complain about competitions. CIM begin their academic projects. An challenges with English, even after approach that I found very helpful is two terms. “I wish I could give my About the author Juliana Parreira is to develop a detailed schedule to ana- presentation in my own language.” I a first-year PhD student in automation lyze activity sequences, durations and do not share the same thinking. If Engapplied to the mining industry at the schedule constraints. Such a schedule lish is not your first language, try to University of British Columbia under the can be created using any project man- improve it. There are many good supervision of John Meech. She agement software, such as Microsoft courses that can help, such as workgraduated in industrial electrical Project, and it allows better manage- shops on how to write theses. For me, engineering (Brazil) and has worked as a ment of the research project. Project a teaching-skills workshop helped planning engineer at Petrobras, the management software reports improve improve my public speaking ability. largest oil company in Brazil, and for a communication between student and Keep in mind that the more you pracprovincial power company in Brazil. supervisor, and progress can be tice, the more you improve. To this September/October 2010 | 87

COLUMNS | canadians abroad Seizing every opportunity to learn Pascal Coursol views the world as his classroom Heather Ednie

Live and learn

No place like home

According to Coursol, a major benefit of working on international projects is learning about various cultures.

“I’ve gained a better view of the world,” he adds. “One of the toughest things when travelling for work is learning how to adapt to different cultures. Sometimes you speak to plant engineers and your message is conveyed up; at other times, you can only negotiate with directors or general managers to get things done. The speed of the flow of information, and the types of communication road blocks, can be challenging; you need to spend time right at the beginning to understand the culture around you.”

In October 2009, Coursol joined Aluminerie Alouette, in Sept-Îles, Quebec, where he manages a process group of 65 people. Feeling the need for more stability in his life, Coursol says it was the right time to cut back on all the travel. In his current position, he is building on all the experience he has gained.

“I was able to travel all over the world because of what I learned in Canada,” he smiles. “Then, I landed a job in Canada due to my varied experience acquired around the world.”

Life can be ironic sometimes. CIM

Coursol with guides on safari in the Botswana bush

Habla español At 39 years of age, Coursol has fast become a leader in process plant optimization. In his previous position at Xstrata Process Support, his group focused on global plant optimization for Xstrata and non-Xstrata customers.

Recognizing the leadership role Chile plays in copper production, Coursol decided to learn Spanish to increase his effectiveness within that community.

“In December 2006, I spent one month with a family in Playa del Carmen, Mexico, and the following December I spent a month lodging at a hostel in Val Parizo, Chile,” he recalls.

“I took lessons and immersed myself in the culture and it paid off. I hardly spoke English when I started with Alcan in 2003; today, I speak three languages.”

The globe trotter Using his new language skills as a lever, Coursol visited most of the smelters in Chile and Peru, and attended a Chilian conference in late 2007. When the economic downturn hit in late 2008, work in North America slowed tremendously, but Coursol and his team were busier than ever, focused on plant optimization projects around the globe.

88 | CIM Magazine | Vol. 5, No. 6

“Late 2008 was a time of intense travel,” Coursol remembers. “Starting in August with a pilot plant campaign in Finland for Barrick Gold, I then travelled to Germany and South Africa for two other pilot campaigns for Xstrata Nickel. From there, I flew to the BCL smelter in Botswana to initiate a plant optimization project. I was only back in Canada a short while before returning to Chile and Peru in early 2009 for two other projects with Codelco and with the Southern Peru Copper Corporation.”

Although he views each trip as an opportunity to learn, one particular trip to Botswana, where he was one of only a few white people in the town, was a true learning experience for Coursol. “I’d never had that feeling before — of being so visibly different,” he recalls. “It was eye opening. And everyone was really nice — as I walked in the town, children would run around me, smiling. I was just amazed at how welcoming the people were.”

Coursol spent a full month in Botswana on that trip, and feeling the need for a little down time, he went on safari and even slept in tents in the jungle. At dinner one evening, a local woman told him that she would never sleep in one of those tents, because the previous week, a snake had entered one of them. “I said, ‘your ad says they are insect proof,’ and she said ‘yes, but a snake can pass through anywhere,’” he recounts. Luckily, no snakes found their way into his tent on the trip.

Photo courtesy of Pascal Coursol

If life is one long learning experience, then the entire world is the classroom setting.

Opportunities for self-improvement abound for those who are willing to work for it, and Pascal Coursol, process superintendant – reduction at Aluminerie Alouette, is firmly dedicated to continuous learning. “When opportunities to learn present themselves, it’s very difficult to say no,” he says. “I want learning opportunities to continue throughout my career.”

www.alouette.qc.ca

parlons en |

COLUMNS

Le 3e Symposium sur le minerai de fer de Montréal arrive à grand pas Serge Perreault La croissance ininterrompue des années 2003 à 2008, alimentée principalement par la croissance économique phénoménale de la Chine, a été suivie d’un ralentissement économique et d’une forte diminution des prix du minerai de fer. Après l’échec en 2009 des négociations annuelles visant à établir les prix du minerai de fer entre les trois grands producteurs et les aciéristes, l’année 2010 représente le début d’une nouvelle ère avec le prix du minerai de fer négocié sur une base trimestrielle.

Après 30 années marquées par des fermetures de mines de minerai de fer en Amérique du Nord et dans le nord de l’Europe, le Québec a vu l’ouverture d’une nouvelle mine (Lac Bloom par Consolidated Thompson Iron Mines) et la Suède s’apprête à ouvrir une nouvelle mine. Plusieurs projets miniers sont aussi en développement en Afrique de l’Ouest, en Australie, au Brésil et en Inde afin de satisfaire l’appétit des aciéristes chinois.

L’ICM est fière d’accueillir le 3e Symposium sur le minerai de fer. Ce symposium est une partie intégrante du Congrès et Salon commercial de l’ICM 2011.

Sous la présidence d’honneur de M. Yves Harvey, directeur général de COREM, ce symposium représente un forum de discussion pour les professionnels des compagnies privées et publiques, du gouvernement, du milieu universitaire et des institutions de recherche. Il représente une unique opportunité de développer un réseau de contacts, de discuter des enjeux cruciaux et d’obtenir des conseils techniques.

Le programme technique couvrira tous les aspects du minerai de fer : l’exploration, la mise en valeur, l’exploitation, la concentration, le bouletage et finalement l’application des meilleures pratiques en santé et sécurité et en développement durable. Les grands thèmes élaborés seront :

1. Les ressources en minerai de fer : disponibilité et projets en développement Des conférenciers provenant des milieux gouvernementaux et de l’industrie dresseront un portrait des ressources mondiales de minerai de fer disponibles maintenant et dans un futur rapproché. Plusieurs petites sociétés minières explorent et développent des ressources découvertes voilà près de six décennies au Canada ou récemment découvertes à l’étranger. Certains de ces projets sont à l’étape de mise en valeur et représentent d’importantes ressources futures pour les aciéristes.

2. Les opérations minières Les compagnies de minerai de fer sont confrontées à des défis quotidiens.

Dans notre environnement économique mondial très compétitif, les minières canadiennes doivent abaisser leurs coûts de production le plus possible, miser sur le développement et optimiser leurs pratiques minières, en plus d’assurer un environnement sécuritaire à leurs employés. Cette session traitera des opérations minières à ciel ouvert gigantesques, de l’optimisation des pratiques minières et des meilleures pratiques en santé et sécurité.

3. La concentration et le bouletage Plusieurs concentrateurs sont au stage de démarrage ou agrandiront au cours des prochaines années. Les procédés utilisés ont fondamentalement peu changé mais le choix d’équipements s’est multiplié. Dans un marché fortement compétitif, les producteurs, les compagnies d’ingénierie, les fournisseurs, les centres de recherche et les universités travaillent tous à optimiser le procédé et réduire les coûts. La

quantité d’énergie thermique nécessaire au bouletage est un élément clé de l’amélioration de ce procédé.

L’amélioration de la qualité des boulettes cuites, un meilleur contrôle de la production et la recherche de procédés de cuisson nécessitant moins d’énergie demeureront pour plusieurs années encore parmi les grands défis de cette industrie.

4. La session plénière – Le nouvel accord sur les prix du minerai de fer : quels seront les impacts sur les producteurs de fer ?

Un panel exceptionnel d’experts formé de producteurs et d’aciéristes locaux et internationaux dirigera de vives discussions sur les thèmes suivants : • Quel impact auront les nouveaux joueurs?

• Auront-ils un impact sur le nouvel accord intervenu concernant les prix du minerai de fer?

• Finalement, qui bénéficiera le plus de l’abandon des contrats annuels après 4 décennies d’une telle pratique?

Un déjeuner clôturera le symposium; un conférencier invité fera le point sur les perspectives d’avenir du marché du minerai de fer et des défis concernant la concentration et le bouletage. Ce déjeuner sera suivi de quatre conférences traitant des opérations minières, des développements à venir et des meilleures pratiques en développement durable. Nous vous attendons en grand nombre. ICM

L’auteur Serge Perreault est géologue senior à la SOQUEM Inc., co-fondateur du symposium sur le minerai de fer avec Guy Saucier du Groupe Roche ltée, et vice-président sortant du district 2 de l’ICM. September/October 2010 | 89

Chinese labourers in BC’s coal mines Correy Baldwin

I

90 | CIM Magazine | Vol. 5, No. 6

Photo courtesy of Cumberland Museum and Archives (0040-003N)

n the late 1800s, British Like other mine owners, Columbia was rich in “ChiDunsmuir realized that he natowns” — vibrant places could hire Chinese labourwhere Chinese labourers who ers to work under condiworked in industries throughtions and at wages that out the province could find other miners would not familiar food, medicine and accept. Their wage scale entertainment, as well as the was often less than half of comfort of fraternity. In Chinathat received by white mintowns, they worked as barbers, ers, and they were largely tailors, launderers, grocers and employed in low-skill jobs. restaurant owners.

The mine camps were segNeighbouring white resiregated, and at Cumberdents who wandered into Chiland Dunsmuir alotted natowns discovered a new culthem the swampy area on ture. In February 1891, the the edge of the camp.

Miner standing outside his cabin in Cumberland’s Chinatown Nanaimo Free Press reported When a large strike that “a great number of our citbroke out at the Wellington izens” visited Chinatown to witness the Chinese New Year Mine in 1883, Dunsmuir replaced striking white miners celebrations. Their curiosity was welcomed, and they were with Chinese from Victoria. This fed already brewing antitreated to cigars, liqueurs and firecrackers.

Chinese sentiments, and the striking miners eventually Chinese opera houses (Victoria alone had three) hosted withdrew their demand for higher wages and insisted only acting troupes who had travelled from China to perform that Dunsmuir rid his mine of the Chinese. Dunsmuir Cantonese opera. Among the performance halls and readrefused, held out, and broke the strike. ing rooms were other forms of distraction: gambling The BC Legislative Assembly, in which Dunsmuir sat as houses, brothels and opium shops. an MLA, was soon debating anti-Chinese bills. Some The first Chinese labourers came for the Cariboo gold wanted to exclude Chinese from positions of responsibility rush in British Columbia’s Fraser Valley in the 1860s, where or high skill (and thus higher pay) or to remove them from they stayed to mine jade, the value of which was unknown the mines altogether. Others wanted to rid the entire to white prospectors. More labourers — almost exclusively province of the Chinese. When an anti-immigration bill male — arrived to work in the coal mines around Nanaimo. was passed in 1884, the Canadian government decided to Most came from Guangdong province in southeast step in.

China, which had been devastated by the first Opium War The Canadian government had its own motivations for with Britain and the years of upheaval and economic ruin keeping Chinese labourers in the country: they were that followed. A 60-day journey at sea brought them toward employed on the railway. Prime Minister MacDonald had desperately needed employment. lured British Columbia into confederation with the promise One major employer was coal baron Robert Dunsmuir, to build a railroad that would connect it to the rest of the whose Wellington mine was the province’s largest. His country. It seemed an impossible feat, and it was an enorempire was built on Vancouver Island’s richest coal seam. It mous political gamble. If the railway failed, so would the was also partly built by the Chinese, who made up more Prime Minister’s career, along with his National Dream. than half his employees. His Cumberland mine was known Chinese labourers were essential to the railway’s success. as the Chinese Tunnels because it was worked entirely by Thousands were hired to overcome a shortage of white Chinese miners. labour. Not only were they assigned the most dangerous

work through the most difficult terrain, but their low wages (again half those of white workers) saved contracters $3 million, making construction economically feasible.

And yet, just a few weeks after blocking British Columbia’s antiimmigration bill, the Canadian government passed its own Chinese Immigration Act, knowing that it would not come into effect until after construction was completed. Timing was everything.

The Act restricted and regulated Chinese immigration, and imposed a $50 head tax on any Chinese entering the country, making it unaffordable to bring a wife and family to Canada.

When the railroad was completed, thousands of Chinese labourers were left unemployed. Most never received the return passage that they were promised by the Canadian government, and the US Exclusion Act of 1882 meant that the Chinese in British Columbia could not enter the United States. They had nowhere to go.

The first winter was especially difficult: lack of employment led to lack of food and shelter. A soup kitchen set up by Victoria’s mayor was objected to by the newly formed Anti-Chinese Union, one of many such groups formed to counter the “yellow peril.”

In 1887, an explosion at a Nanaimo mine killed 150 employees. The miners blamed the Chinese, claiming that their lack of English made them a safety hazard — a logic that was not applied to many European miners — and they called for the Chinese to be banished from the mines. After another deadly explosion, Nanaimo and Wellington miners refused to work unless the Chinese were removed, and several mine owners complied. The miners then took their demands to the provincial legislature.

The public was not always in favour of these measures — many people enjoyed friendly relations with the Chinese community.

But the political influence of the lobby groups was strong. The head tax was increased to $100 in 1901 and to $500 in 1903. In 1923, the Chinese Immigration Act (known as the Exclusion Act by the Chinese) banned most forms of Chinese immigration.

To deal with the rising animosity and the needs of the unemployed, the Chinese community in Victoria formed the Chinese Benevolent Association. Community associations had long been a part of the Chinese community, arranging travel to and from China, transferring wages to relatives, or simply offering a bed.

The Benevolent Association provided general welfare assistance and opposed discriminatory laws, supporting the community through the worst years.

Chinese labourers were essential to Canada’s industries while the nation developed, and yet they were often exploited and treated poorly. In 2006, the Canadian government took a step toward repairing that rift by offering an official apology and compensation to the Chinese community. CIM

Works cited Dunae, Patrick A. 2007. Reconstructing a Harbour City in the Pacific Northwest with GIS: Nanaimo in the 1890s. Paper presented to the Historical Geography Network of the Social Sciences History Association, Chicago, November 16, 2007

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cim news The butterfly effect The far-reaching effects of CIM’s MIS show

By Andrea Nichiporuk

Photo courtesy of Mary Ringwald

Since its inception in 2005, CIM’s Mining in Society (MIS) initiative has educated the public on the importance of mining to everyday life, primarily through an annual show held in conjunction with the CIM Conference and Exhibition. After attending MIS last May in Vancouver, Mary Ringwald, a kindergarten teacher from Coquitlam, British Columbia, decided to introduce mining into the class curriculum. The result went beyond what she expected, showing how important (and successful) initiatives like MIS are. She sent CIM the following letter: Mary Ringwald with one of her students

What lies beneath a trip to MIS 2010?

The learning continued at school with a visit from Sheila Stenzel and Laura Estrada of MREP Vancouver, who supported further mineral exploration with magnets, magnifying glasses and computer research.

The children’s curiosity guided our investigation to the origins and history of coal mining in Canada. They were introduced to folk songs from Cape Breton’s Men of the Deeps Choir and Ian Wallace’s story about The Boy of the Deeps. The children also worked closely with their big buddies to dig up soil samples and later design unique patterns on strips of paper, which evolved into an interactive cross-section of the earth’s layers, coal seams and diamond deposits.

Weeks of sharing fiction and non-fiction books, talking about fathers and sons, and playing at the “coal wall” and under tables, resulted in an impromptu drama performance. With a few props and camera in hand, movement was set to the haunting ballad “A Miner and A Miner’s Son,” and the children re-enacted the story of little James and his coal mining ‘Da’. The children’s ability to work together and engage quickly showed a deep understanding of their learning and what makes Canada great — its people and its industry, its energy and its heart, its natural gifts and strong origins. I have no doubt that when these youngsters watch themselves at play on DVD, they will recall something rather momentous about mining and their kindergarten year thanks in part to their trip to Mining in Society at the CIM Conference and Exhibition 2010.

Photo courtesy of Mary Ringwald

Kindergarten children from Eagle Ridge Elementary in Coquitlam, British Columbia, prospered from this year’s visit to the CIM Conference in Vancouver. Not only did they play with reclaimed metal objects to create over-sized Olympic “Metal Medals,” but they also visited the amazing place where their art was displayed — Mining in Society at the Vancouver Convention Centre! Dozens of children and parent volunteers uncovered a range of exciting activities, including how rocks and minerals are used in our daily lives, ways to re-think and re-use metal, and a sneak peak at real Olympic medals — thanks to Teck.

~ Mary Ringwald, kindergarten teacher, SD43 Coquitlam (July 2010)

Students playing the matching game at the Tech booth.

September/October 2010 | 93

cim news Follow the yellow brick road to new Eldorado

By Alex Doll The CIM Vancouver Branch held its final luncheon meeting of the 2010 spring session at the Four Seasons Hotel on June 17. More than 70 branch members were treated to a presentation by Norm Pitcher, COO of Eldorado Gold, on the company's three operating (and one nearly operating) projects in China.

Although each project possesses its own challenges, they all defy some of the

western stereotypes associated with mining in China. Pitcher demonstrated that the development of safe and profitable gold mines in China is possible.

Branch Chair Tom Broddy thanked the many volunteers, sponsors, students and

speakers who made this past spring session a success and who have helped shape the branch into a vital part of the Vancouver mining community. A special thanks went to event sponsor Wardrop Engineering. CIM

Alex Doll is the CIM Vancouver Branch webmaster.

CIM welcomes new members Abdel-Maksoud, Mohamed, Egypt Abougharam, Ahmed, Ontario Aguirre, Carlos, Peru Ahmed, Uzair, Pakistan Ahmed, Sameen, Québec Alesdi, Hande, Ontario Ambroszkiewicz, Eric, Ontario Andronescu Jr., Dan, Ontario Archibald, Dave, British Columbia Arel, Ghislain, Québec Bagchi, Anujit, India Bakary Dao, Seydou, Algeria Bédard, Marc-Antoine, Québec Bédard, Johannie, Québec Bhattacharya, Sandeep, Ontario Bhowmick, Sukanta, Ontario Bigdeli Karimi, Majid, Ontario Bolandi, Mahboob, Ontario Brunet, Alexandre, Québec Brunet-Ladrie, Marie-Claude, Québec Bryan, Jordan, Northwest Territories Carrillo, Richard, USA Carson, Blair, USA Chakera, Ali, Alberta Changizi, Ahmad, Ontario Chen, David, Québec Chin, Cheyang Regan, Saskatchewan Das, Sarmistha, Ontario De Los Santos, Matthew, Québec de Wit, Benjamin, British Columbia Denehy, Tim, Alberta Dey, Sanjib, Ontario 94 | CIM Magazine | Vol. 5, No. 6

Downie, Mark, USA Eckert, Thomas, Ontario Eliyan, Faysal, British Columbia Emigholz, Johannes, British Columbia Farbridge, Bryan, British Columbia Farokhzadeh, Khorameh, Ontario Finlay, Glenn, British Columbia Fortin, Gabriel, British Columbia Francis, Victor, Ontario Gagnon, Gabriel, Québec Garrow, Terry, USA Gaudreau, Donat, British Columbia Gauthier, Jason, Ontario Guimaraes e Cunha, Fabiano, Finland Gunson, A.J., British Columbia Hann, Ingrid, Ontario Hendricks, Graeme, British Columbia Herzig, Robert, Ontario Jordan, Geoff, Alberta Kearns, Ian, Ontario Kinyon, John, Yukon Territories Kwan, Millie, British Columbia Laflamme, Jacques, Québec Laghari, Ali Raza, Pakistan LaMarsh, Jeffrey, British Columbia Lamba, Zitin, British Columbia Lee, Ryan, Alberta Leung, Victor, British Columbia Li, Jiajie Gloria, British Columbia Li, Diana, Québec Liu, Qingxia, Alberta Lopez, Bernabe, Chile

Luthra, Bhawuk, India Macedo, Claudia, Québec MacKenzie, Shawn, Ontario MacLean, Andrew, Alberta Mahmud, Shakir, Bangladesh Martin, Zacharie, British Columbia McCreedy, Jessica, British Columbia McGill, Jacqui, Australia McIntyre, David, Ontario Mohee, Faizul, Ontario Molinari, Hugo, Québec Newman, Gregory, British Columbia Ng, Kimberly, British Columbia Niemi, Erin, British Columbia Nowicki, Melissa, Ontario Oh, Eunha, British Columbia Oliver, Chad, Ontario Panozzo, David, British Columbia Paracha, Muhammad Taha, British Columbia Paramita, Dyah, Indonesia Parkhill, John, Ontario Pascua, Danica, Ontario Paul, Patrick, British Columbia Phifer, Maurie, British Columbia Prevost, Normand, Québec Qureshi, Hani, Québec Rae, Johnson, Ontario Reade, Nathan, Ontario Roeland, Vanessa, British Columbia Roy, Justin, British Columbia Rukhlov, Alexei, Alberta

Samei, Javad, Ontario Schmitt, Erich, British Columbia Scorrar, Brendan, British Columbia Sen, Fatih, Ontario Shah, Salman, Pakistan Shaw, Kerry, Ontario Smith, Adrian, British Columbia Smith, Jason, Saskatchewan Smuk, Katherine, British Columbia Sohi, Mojan, British Columbia Steele, John, Ontario Stevens, Justin, British Columbia Stewart, Grant, Alberta Tobin, Thomas, Alberta Toor, Dapinderpal, British Columbia Tsai, Rita, British Columbia Tse, Wilhelm, British Columbia Van Bui, Truong, British Columbia Varley, Richard Scott, British Columbia Vert, Peter J., Ontario Wang, Chengtie (Fisher), British Columbia Weymark, Richard, British Columbia Wong, Amy, British Columbia Xiao, Qianyi, British Columbia Zebardast, Hamid Rea, British Columbia

Corporate Members Maryn International Ltd. Sentry Equipment Corp ShotCrete Plus

cim news

PHASE 1 STAGE 1 Membership functions

STAGE 2 Implement multi-language features

STAGE 3 CIM website, product sales and exhibits

STAGE 4 Events, Technical papers (abstracts) and registration

STAGE 5 Onsite registration

PHASING IN A NEW IT SYSTEM A project update

by Andrea Nichiporuk Work on CIM’s information technology infrastructure overhaul project is moving forward on schedule and on budget, bringing CIM one step closer to providing an optimal level of service to its members. However, to attain this goal, it is necessary to progressively migrate these services to the new systems over time. Currently in the first stage of Phase 1, CIM’s Membership Department is fully immersed in the review and transfer of data to the new association/contact relationship management (CRM) system and new exhibitor management system.

A STAGED APPROACH Successfully implementing a project of this magnitude requires going a step beyond a phased approach. Each phase of the IT project has been broken down further into stages, five of which make up Phase 1: • Stage 1: Transfer membership, subscriber and benefactor information into the association/contact relationship management (CRM) system.

• Stage 2: Implement multilingual features into the association/ contact relationship management (CRM) system.

• Stage 3: Build structure of new CIM website; create “product sales” portion of the website (such as purchasing of special volumes and technical papers); and integrate the exhibitor management system.

• Stage 4: Create events and event registration portions of the website; and create the “abstract upload” portion of the technical paper management system.

• Stage 5: Set up new association/ contact relationship management (CRM) system for onsite registrations.

WHAT’S HAPPENING In addition to data conversion, a lot of work has gone into building the association/contact relationship management (CRM) system over the past couple of months.

At the time of writing this article (early August), CIM is working on the website design aspect of the project, including the viewing of its first wireframe/prototype by CIM National Office staff.

To validate the changes, 12 members of the focus groups consulted during the most recent CIM Conference and Exhibition are being re-assembled and will review the design of the new CIM website. The website design was developed based on their feedback, the website card sorting exercise and one-on- one interviews.

The outcome of this round of consultations will be available in a future issue of CIM Magazine.

Discussions have also begun with integrated team members representing all of CIM’s societies to start building internal competencies to support the systems and website.

The new information technology infrastructure will allow for capabilities the current system lacks, such as increasing and easing interaction between all members of CIM at all levels, and providing quick and easy access to vital industry information. Knowledge and networking are key to growth.

Providing a higher level of service to members will not only help them grow professionally, it will lay the foundation for a more relevant and resourceful CIM. CIM

CIM – A COMMUNITY FOR LEADING INDUSTRY EXPERTISE September/October 2010 | 95

PHASE 1 ÉTAPE 1 Fonctions des membres

ÉTAPE 2 Application des fonctions multilingues

ÉTAPE 3 Site Web de l’ICM, ventes de produits et expositions

ÉTAPE 4 Événements, documents techniques (résumés) et inscription

ÉTAPE 5 Inscription sur le site

LE PASSAGE PROGRESSIF AU NOUVEAU SYSTÈME DES TI Le point sur le projet Le travail entrepris dans le cadre du projet de réorganisation de l’infrastructure des technologies de l’information de l’ICM progresse selon les délais et le budget prévus, rapprochant l’ICM de son objectif consistant à offrir des services d’une qualité supérieure à ses clients. Toutefois, pour atteindre cet objectif, il est nécessaire de transférer graduellement ces services vers les nouveaux systèmes. Se trouvant actuellement à la première étape de la phase 1, le service de l’adhésion des membres à l’ICM est en plein travail d’examen et de transfert des données vers le nouveau système de gestion de la relation association/contact (CRM) et du nouveau système de gestion des exposants.

UNE MISE EN ŒUVRE PAR ÉTAPES Pour réussir la réalisation d’un projet de cette envergure, une approche par phases ne suffit pas. Chaque phase du projet de TI a donc été décomposée en étapes, soit cinq pour la phase 1: • Étape 1 : Transfert de l’information sur les membres, les abonnés et les bienfaiteurs dans le système de gestion de la relation association/contact (CRM).

• Étape 2 : Application des fonctions multilingues dans le système de gestion de la relation association/contact (CRM).

• Étape 3 : Construction de la structure du nouveau site Web de l’ICM; création d’une partie « vente de produits » sur le site Web (tels que l’achat de volumes spéciaux et de documents techniques) et intégration du programme de gestion des exposants.

• Étape 4 : Création des sections du site Web consacrées aux événements et à l’inscription aux événements et création d’une partie « téléchargement de résumés vers l’amont » du système de gestion des documents techniques.

• Étape 5 : Mise en place du système de gestion de la relation association/contact (CRM) pour les inscriptions sur le site.

LE POINT SUR LES DERNIÈRES ACTIVITÉS En plus de la conversion des données, on a consacré beaucoup d’efforts à la création du système de gestion de la relation association/ contact (CRM) pendant ces derniers mois.

Au moment de la rédaction de cet article (début août), l’ICM travaillait à l’aspect conceptuel du site Web et le personnel du bureau national de l’ICM a pu visionner un premier modèle/prototype. Pour valider les modifications, 12 membres des groupes de consultation consultés pendant le dernier Congrès et salon commercial de l’ICM se rassembleront pour examiner la conception du nouveau site Web de l’ICM. Le design du site Web a été élaboré en tenant compte de leurs commentaires, de l’exercice de classement de cartes du site Web et des entrevues individuelles. Le résultat de cette ronde de consultations sera communiqué dans le prochain numéro de CIM Magazine.

Des discussions ont également commencé avec des membres d’équipe intégrés représentant toutes les sociétés de l’ICM afin de commencer à développer des compétences internes pour appuyer les systèmes et le site Web. La nouvelle infrastructure des technologies de l’information permettra de disposer de capacités qui font défaut au système actuel. Ainsi, elle permettra d’augmenter et de faciliter l’interaction entre tous les membres de l’ICM à tous les niveaux et d’offrir un accès rapide et facile à de l’information indispensable sur l’industrie.

Savoir et réseautage sont des clés de la croissance. Le fait de fournir un service de qualité supérieure aux membres contribuera non seulement à leur croissance professionnelle, mais jettera aussi les bases qui feront de l’ICM un organisme plus pertinent et offrant plus de ressources. ICM

ICM — UNE COMMUNAUTÉ POUR UNE EXPERTISE DE PREMIER PLAN 96 | CIM Magazine | Vol. 5, No. 6

CIM says farewell to a past leader Walter Riva dies at age 88

By Andrea Nichiporuk In 1984, a year when the world saw Brian Mulroney become Canada’s 18th Prime Minister, Marc Garneau become the first Canadian in space and the Edmonton Oilers win their first Stanley Cup, a third-generation coal miner named Walter Joseph Riva took on the presidency of CIM. Walter Riva was not one to sit back and let the life pass him by. By the time he graduated (with Distinction) in mining engineering from the University of Alberta at age 27, he had already worked in a mine, served as a navigator with the Royal Canadian Air Force in WW II, gotten married and had three children.

A natural born leader, Riva rose through the ranks to become executive vice-president and CEO of The Canmore Mines Ltd., the company at which he began his career. He later moved on to Denison Mines Ltd. as vice-president (1972) and then Kaiser Resources Ltd. (1973), where he became president of the company’s coal division (1979), followed by president and CEO (1980), and finally chairman and CEO (1981). He also served as the president of the Coal Association of Canada (1980-1981) and was the 77th president of CIM (1984-1985), which he became a member of in 1950.

A man concerned with safety, productivity and the environment, Riva accumulated a long list of accomplishments during his illustrious career: he forged new ground by selling Canadian coal to Asian markets; was part of a team that successfully reclaimed and revegetated minedout areas in Western Canada; introduced new technologies and procedures; took part in industry governance; invented/patented form-coke processing and was the co-inventor of a pelletizing process; and was a founding member of the Canadian Carbonization Research Association, to name but a few.

Riva was active within CIM, first as chairman of the Coal Division from 1963 to 1965, then as a councillor from 1965 to 1967 and as a CIM Distinguished Lecturer in 1970, and finally as vice-president of District 5 in 1973. Recognized for his achievements, CIM awarded Riva the Selwyn G. Blaylock Medal in 1973 for “his distinguished service to Canada through exceptional achievement in the field of mining, metallurgy or geology.” He also received the Coal Award in 1991, established to “honour CIM members who have made outstanding contributions to the coal industry of Canada and who have also been long-standing, active participants in the Coal and Oil Sands Division of CIM.” Riva strongly believed in giving back to one’s community, his being Canmore, British Columbia. Calling upon his honed leadership skills, he led the construction of a Catholic Church and rectory, with 100 per cent of the project’s labour being volunteered and served as choir director at the Church for approximately 20 years. He led a volunteer labour project to install artificial ice in the hockey arena, was involved in obtaining land and seeing the construction through to completion on a new community golf course and was a minor hockey league coach. In Sparwood, British Columbia, he led company efforts to assist the community in obtaining a recreation centre, swimming pool and golf course.

In the few years leading up to his retirement in 1986, Riva “retired” from management and served as vice-chairman of Westar Mining and chairman of B.C. Resources. More recently, he was inducted into the Canadian Mining Hall of Fame in 2004 and published a book on the history of mining in the Bow Valley in 2008.

Walter Riva was a family man, industry leader and role model. He passed away peacefully on May 15, 2010. CIM September/October 2010 | 97

cim news Building an audience For CIM Distinguished Lecturer David Rodier, CSR benefits everyone

By Robbie Pillo For over three decades, David Rodier has been working tirelessly to shape the global norm on corporate social responsibility (CSR) in the minerals industry. Formerly senior vice-president, environment safety and health for Noranda Inc., he served as the company’s representative on many CSR-related initiatives, including the World Business Council for Sustainable Development, the International Council for Mining and Metals, the Mining Association of Canada’s (MAC) Towards Sustainable Mining (TSM) initiative and the chemical industry’s Responsible Care program. After retiring in 2002, Rodier spent his time consulting on external outreach and sustainable development for Noranda Inc. until 2005, as well as for Hatch until 2007. Currently, as part of this season’s CIM Distinguished Lecturer Series, Rodier is looking at ways to manage risk through sustainable development principles in his presentation “Sustainable development — a passing fad or a strategic way forward?”

CIM: Starting off with the obvious question, is sustainable development a passing fad or a strategic way forward?

Rodier: If you allow it to be a passing fad, you let yourself be put at risk. Sustainable development will be a commercial differentiator — only the companies who are responsible will be allocated the permits to build new projects. Strategically, it is the process of looking at a business from a “risk and threat” perspective, and making plans to address the issues. And by risk, I mean trends that will impact the costs of a business, for example increasing energy costs. It is a way of analyzing the environment we are operating in and expect to be in, and doing things to avoid the anticipated negative impacts.

CIM: How do you respond to critics that say CSR is an insurance policy for image-sensitive companies buying protection from advocacy actions?

Rodier: CSR won’t save anyone without the performance record to show their progress. You can’t buy a good reputation; you have to earn it through performance.

98 | CIM Magazine | Vol. 5, No. 6

CIM: So, then, CSR is not just a means for mining to improve its image; it is a strategy that goes beyond good corporate PR? Rodier: CSR is not an image issue; it is a systematic way to help manage a company for the long term. CSR is not window dressing — if it is, it will fail miserably. It requires a commitment to transparency. The company’s reputation rests on performance not advertising. If the performance isn’t in evidence, the reputation will suffer. It has to become part of the corporate culture.

CIM: As you say, CSR requires a commitment to transparency. However, wouldn’t a company leave itself open to scrutiny by divulging any risks and safety issues related to a project?

Rodier: Without information, people start making up scenarios that are much worse than what the actual scenario is. One of the tenets of community outreach is to let people know your worst-case scenarios. It informs the community about what’s going on and forces your own management team to take the issues more seriously and try to eliminate some of these risks.

You also need to talk about the ins and outs: what the risks are, what you are going to do about them, how you manage the risks that you are not aware of, etc. Give them full access to your information; it opens up the right channels. Suddenly you are no longer the problem company, but an organization they can look up to.

CIM: One of the main points in your presentation is social strategy. How important is community outreach at the preliminary phase of development projects?

Rodier: It is a way to avoid possible impacts from community outrage. The sooner it is initiated, the better, and it allows you to develop a sense of common trust. It gives people the opportunity to ask pointed questions and voice their concerns at every phase of the project, instead of letting them fester. You are able to deal with any issues before they get blown out of proportion. In doing so, the community essentially becomes a partner. MAC’s work with communities has repeatedly demonstrated that the communities want our businesses to succeed, but not at the expense of health, the environment and long-term continuity issues. Their input is vital to establishing a balanced approach to development.

Community outreach also addresses the question of investor confidence because they can see that risks have been identified and dealt with. It will increase profits in the long term. All this community interaction at the beginning costs nothing. But if a big disaster occurs at the end of a project, it can get very expensive.

cim news CIM: Switching gears to an industry hot topic, what are your thoughts on the controversial Bill C-300?

Rodier: I believe that it is not necessary, as anyone who has tried to get financing for a mine can tell you. The hurdles created by the Equator Principles, which the majority of major banks insist on as their risk management protection, achieve what the bill proposes. Putting unnecessary regulations on Canadian companies will discourage external investment and encourage the subsequent loss of jobs and sales of engineering equipment and technology. It will also push Canadian companies to direct these types of investments through offshore vehicles, if at all. Imagine if the U.S. government tried to do this to us in Canada? These same people would be howling sovereignty!

CIM: What is your advice to companies looking to make the transition to sustainable practices?

Rodier: If one is starting out it may seem an onerous task, but consider what you already have in place —maybe a safety program, an environmental program, a product quality program, your financial reporting regime, etc. Build on these and ask for help from your industry association(s) such as MAC, CCPA, ICMM, PDAC, the World Bank and CIM. It is a necessary step in the right direction. CIM

Ottawa Branch gets groundbreaking lesson

By Jean-François Fiset On May 6, the CIM Ottawa Branch hosted Maurice Lamontagne of the Geological Survey of Canada whose presentation, “Haiti, Chile, Canada — Earthquakes seen on a global scale” took an in-depth look at recent earthquakes in high-risk countries such as Haiti and Chile. Plate tectonics is the major driver of most earthquake activity, and parts of Canada are located in places where major earthquakes can occur. In the past 100 years, at least nine earthquakes in or near Canada have registered a magnitude greater than seven Lamontagne provided useful information on how to survive this natural disaster. CIM Jean-François Fiset is the CIM Ottawa Branch chair.

CIM DISTINGUISHED LECTURERS 2010–2011 ÉMINENTS CONFÉRENCIERS DE L’ICM 2010–2011

MAHESH C. CHATURVEDI

MICHAEL DOGGETT

JAMES M. FRANKLIN

NORMAN O. LOTTER

DAVID D. RODIER

University of Manitoba, Winnipeg, MB

HanOcci Group, Vancouver, BC

Franklin Geosciences, Nepean, ON

Xstrata Process Support, Falconbridge, ON

Retired, Noranda Inc. (38 years); Hatch, (5 years), Mississauga, ON

The Role of Boron in Design Superalloys

Long and Short of the Minerals Industry: A Tale of Two Extremes

Future Mineral Resources Discoveries: New Knowledge Needed for Discovery

Modern Flowsheeting Technology

Sustainable Development – A Passing Fad or the Strategic Way Forward?

Le rôle du bore dans la conception de superalliages

D’un extrême à l’autre : l’histoire du secteur minier

Futures découvertes de ressources minérales : appel à de nouvelles connaissances

Technologie moderne en matière de schémas de traitement

Développement durable : mode passagère ou mode d’évolution stratégique?

BOOK NOW / RÉSERVEZ DÈS MAINTENANT: www.cim.org/activities/lecturers2011.cfm September/October 2010 | 99

cim news | scholarships Students embrace industry opportunities CIM Edmonton Branch scholarships awarded

By Heather Ednie

Photo courtesy of C. Huber

The CIM Edmonton Branch awards three scholarships to support bright students working towards a career in mining. Two $2,000 scholarships are handed out each spring to third- or fourth-year mining engineering students at the University of Alberta, and a $1,000 scholarship, also awarded in the spring, is open to students pursuing resource-related careers at the Northern Alberta Institute of Technology (NAIT; second year) or the University of Alberta (third year). This year’s winners are already making their mark on Canada’s minerals industry.

The learner Having grown up close to the Paintearth Coal Mine near Stettler, Alberta, Carson Sutton was always interested in mining. “I enjoy using my brain to solve practical, real-world problems — that is a major reaCarson Sutton son I chose the mining industry,” he explains. “I feel like I have accomplished something if I can apply my academic skills to a problem or project and then go into the field and make it happen. I don’t want to sit in an office all day.”

This past summer, Sutton worked with Syncrude’s Mining and Tailings Project Development Team modelling the pour plan for one of the future ponds. “The complexity of tailings has definitely been my biggest challenge yet,” he states. “I first learned the characteristics of the tailings composition and then I went into the field to get a better understanding of the line layout and the pond design. I’m now modelling many different cases to find the optimum plan, and have been working with a team of four trying to learn from their experiences and add some new insight so we can put forward a solid plan to develop the pond.”

The work at Syncrude has taught Sutton how mining engineering applies to projects several years before they are started. He has gained valuable computer skills, allowing him to model projects to make more informed decisions.

Sutton returns to the University of Alberta this fall but is looking forward to graduating so he can gain field experience over the next several years. He aims to work at a mine as a field engineer and live in a rural community. “I want to understand the operational issues and practical problems associated with mining,” he says. “I feel looking at a problem from both the engineering side and operational side is vital for making the best decision possible. Unique mines, like the diamond mines in the territories or the uranium mines in northern Saskatchewan, interest me.”

100 | CIM Magazine | Vol. 5, No. 6

Left to right: Al Brown, senior general manager, mining, Sherritt; Cory Huber; and Mark Plamondon, senior vice-president, coal, Sherritt

The planner Camrose, Alberta, native Cory Huber is well on his way to his planned career. The mining industry was an obvious choice for him. “It was as easy as finding the career with the largest scale projects, best people and most respected companies in Canada,” he says.

Huber has a focused approach to learning and is using his work-term jobs to complement the skills and knowledge gained at the University of Alberta. To date, his co-op terms have included four months as a CAT 797 operator and another four months as a short-range planner for Syncrude, and this past summer’s job with Sherritt Coal. There, he worked on a project to model the productivity of custom vehicles over various grades of road to determine what their performance is going to be like on a new haul road that is currently under construction. These vehicles feature custom boxes on haul trucks, allowing for a much heavier load than the truck is rated for.

“Because these trucks are so unique, the manufacturer doesn’t have charts available that reach these high-tonnage numbers, so I am forced to find a model that works using empirical data from the field, and a little creativity,” he explains.

Together, each of his work terms has formed the foundation on which Huber will build his career. “The most important thing you learn as a heavy equipment operator is patience, as well as a humble understanding of what actually goes on in the field,” he says. “The most important thing you learn as an engineer in terms of planning is communication skills. Being clear and concise, while maintaining consistency, is key.”

Huber’s goal is to push his career towards management, and he vows to do whatever it takes to ensure he will be a competent leader. “This usually involves mastering the jobs of the ones that you must lead,” he adds. “In five years’ time, I hope to have those mastered.”

boursier Kyle Penner

A recent graduate from the University of Alberta, Kyle Penner has already gained diverse experiences as only the mining industry offers. With the goal of completing his professional accreditation requirements, he says it is too early in his career to pinpoint exactly where he will be or what he will be doing in the future. He is keeping his options open.

“Mining is a very unique industry,” he says. “In my short career, I’ve worked thousands of feet above and below sea level, mined three very different minerals using very different methods, and come across many diverse and interesting challenges. My favourite part is working through these challenges, using the various tools I’ve gained through my experience, and applying and adapting them to solve new problems.”

Throughout his time at the University of Alberta, Penner has gained valuable knowledge.

He spent two eight-month terms with Teck Coal in the Elk Valley — first at Greenhills Mine surveying for four months and then working on special projects, including justifying the purchase of a Caterpillar 24M grader and working with mine planning software; then at Line Creek working as a surveyor and helping in the pit doing layouts, pickups and reconciliations; and finally working in the geology department on a coal recovery project. “I also was fortunate enough to spend some time working on a pilot plant project for exploration bulk sample testing,” he recalls. “The combination of these two projects really let me see in great detail how coal goes from ‘in situ’ through to a finished product.”

His other work term was at Xstrata Copper’s Kidd Mine in Timmins, Ontario. His first time working at an underground operation, he spent the summer in the ventilation department taking surveys, working on drawings and plans, and assisting on various projects.

Having grown up outside of Coaldale, Alberta, Penner has left the province to start his first postgraduation job at PotashCorp’s Rocanville operation in southeast Saskatchewan, where he is currently in a rock mechanics position. “I’m really enjoying it so far, and I’m excited to see where it takes me,” he says. “Beyond that, I’ve recently joined a classic rock/folk band and I’m getting into the small town life in Saskatchewan — although I just cannot bring myself to cheer for the Roughriders.” CIM

Photo courtoisie de D. Gravel

The problem solver

| cim news

Dominic Gravel reprend le flambeau familial Par Marlene Eisner et Maria I. Anelli La section Thetford Mines de l’ICM remettait en janvier dernier quatre bourses aux jeunes de la région, sélectionnés grâce à leurs résultats académiques, leur dynamisme et leur implication dans les activités para-académiques.

Dominic Gravel, âgé de 25 ans et étudiant en troisième année à l’Université Laval en génie minier, fut l’heureux récipiendaire d’une bourse de 1500 $. « C’est toujours spécial d’être élu parmi ses confrères et j’en suis très flatté », a dit M. Gravel qui souhaite rembourser ses dettes d’études et de réparations d’automobile.

Les deux grand-pères, et le père de M. Gravel ont travaillé dans les mines d’amiante. En fier héritier, il savait dès son entrée au CEGEP de Thetford Mines en Technologie minérale à l’âge de 18 ans, qu’il perpétuerait la tradition. « Ma passion s’est épanouie surtout durant mes stages à la mine Raglan1 et sur le projet Éléonore2 », a dit M. Gravel. « Après le CEGEP, j’ai vécu pendant un an à Rouyn-Noranda où j’ai travaillé chez Goldcorp Canada. J’ai décidé alors, de poursuivre mes études en génie. J’aime l’immensité des chantiers et l’ambiance des mines. J’adore la complexité de cette industrie qui présente une foule de défis. » Parmi ceux-ci, M. Gravel considère qu’il est primordial que l’environnement fasse partie intégrante de l’industrie dans le respect des communautés où sont exploités les gisements.

Dans un ans, M. Gravel aimerait demeurer dans sa région qui lui tient à cœur et œuvrer dans l’industrie de l’amiante chez LAB Chrysotile. Aussi, le projet Éléonore où il a travaillé deux ans, l’intéresse beaucoup. « J’aimerais prouver qu’il est possible d’utiliser le chrysotile, ce minerai industriel de façon sécuritaire, et qu’il est encore viable de l’exploiter », a-t-il conclut. À noter, l’équipe de M. Gravel s’est classée 7e au terme des 20 épreuves lors des 20th Annual Canadian Mining Games à Halifax en février. Des 10 universités canadiennes participantes, l’École Polytechnique et l’Université McGill ont terminé respectivement au 4e et 9e rang. ICM 1 Gisement 2

de sulfure de nickel au Nunavik Gisement aurifère à la Baie James September/October 2010 | 101

cim news | award winner Painting coal in a brighter shade Allen Wright is working to improve the industry’s image

Photo courtesy of Normand Huberdeau/NH Photographes

By Robbie Pillo

Allen Wright (left) receives Coal Award from CIM past president Michael Allan.

Working tirelessly to promote the Canadian coal industry, this year’s winner of CIM’s Coal Award, Allen Wright, is no stranger to the challenges encountered when trying to change the face of this sector. Since joining the Coal Association of Canada (CAC) as executive director in 2001 and later becoming its president and CEO, Wright has dedicated a lot of his time to revitalizing the industry and giving it the voice it deserves.

A political science graduate from Brock University, Wright has a tremendous amount of experience in public and government relations. He directed the government relations efforts for Dome Petroleum and Amoco Canada (now BP Canada), and was a member of the external affairs team with Imperial Oil. He began his public affairs career in 1975 serving as a senior member on the staff of two Federal Cabinet Ministers in Ottawa. CIM Magazine talked to this visionary on a range of issues affecting the industry.

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CIM: What are your thoughts on the recent anti-oil sands billboard campaign in the United States?

Wright: Much of the information is twisted and inaccurate. It is hard for the industry to compete with such groups. Nobody believes us and the BP scandal certainly did not help.

People are skeptical and cynical about the industry — they will believe environmental NGOs before they believe us.

CIM: What can the industry do to improve its public image in the wake of such a scandal?

Wright: The coal industry is spending a great amount of time and effort on reducing its carbon footprint at mine sites. The technologies and methods used by the coal industry to do so is not something that will grab the attention of your average “Joe Public.” What does are numbers — not just the jobs we create but the community benefits that arise from the royalties we pay to the local govern-

ment, such as new daycare spots and teachers’ positions — things that people can relate to.

Another way is educating the public by creating industry literacy programs in local schools and engaging the teachers in a way that they can provide a balanced perspective on resource development. Right now we [CAC] offer coal kit modules that were specifically developed for middle school students. Our big focus for 2011 is to digitize them, make them more interactive and touch screenfriendly — a program that appeals to younger audiences.

We [CAC] are in the process of evaluating our next step — realizing that we can’t be all things to all people. It is really important for us to find opportunities where we can work with other organizations, whether it’s with the oil and gas industry or CIM or MAC — somehow we have to pool our resources and talk about some fundamental messages we have to deliver.

CIM: What are some of the biggest misconceptions about coal?

Wright: There are several, but the biggest is that coal is only used for power generation. If you conducted a poll, I am certain only a fraction of those polled will know its other main uses: steel and cement making. Many people who are advocating for the environment do not realize that a myriad of the products they use are made from steel — the bikes they ride, the cars they drive or the buses and airplanes they take.

Another misconception is how the industry is raping and pillaging most of our country’s land. A recent report urges the BC government to protect 50 per cent of its land, yet mining in BC counts for 0.04 per cent of the land base. We have not done a good enough job in conveying to the public

our commitment to stewardship, especially as it relates to our reclamation effort. Safety is another issue. People believe the industry is very unsafe. Our commitment to safety is priority number one. You are actually more likely to get hurt in a shopping mall than a mine — that’s how safe coal mining really is.

Coal is still the most inexpensive energy option. While many people, especially in government, are advocating for more renewable energy, these sources tend to be significantly more expensive and cannot provide baseload power. While we support the development of alternate energy sources, coal should and will continue to be an important part of the energy mix. Coal will be the bridge to the future if we want to keep the lights on.

CIM: Earlier this year, Environment Minister Jim Prentice announced that Canada must phase out older coal-fired plants as it moves to make natural gas-fired plants the new clean power standard. How will this affect the industry?

Wright: The industry must upgrade their plants to comply with government standards by the time they reach the end of their economic lives in and around 2025. In order to meet the new standards, significant technological changes to older plants will be required. Power companies have to decide whether it makes more sense to retrofit old plants with new technologies or to invest in new plants. Since new standards cannot be met by using credits or offsets, the reality is that, as plants get older, you reach a point where economically it does not make sense. Building new plants with the latest technology may be the more attractive option.

CIM: Are there any new developments that do use coal more effectively?

Wright: Besides building more efficient plants, such as TransAlta’s Genesee 3 and the soon to be commissioned Keephills 3 here in Alberta, much of the effort in Canada is being focused on carbon capture and sequestration or storage. Governments, industry and academia are spending a great deal of time and money to make this technology commercial.

CIM: In your opinion, how does natural gas compare to coal?

Wright: The big challenge with natural gas is its price volatility. The price of coal tends to be much more predictable. The big question for coal is what happens to the price when you add in the cost of new technologies. Those are issues that are still being worked on.

CIM: What’s next for CAC? Wright: The Association’s goal is to provide a window to coal in Canada, a portal if you will. A key part of that will be a redesign of our website so that it can be a useful tool for our members, providing key information, data and statistics to those representing the industry in business environments or in the community — making sure they have the right information. We want to give it a clean and simple look — providing the public with clear messages that they can relate to, which, hopefully, will start shedding a better light on the industry. CIM

25e Édition du tournoi de golf ICM – Section Harricana un grand succès Par Jean-François Lagueux

De gauche à droite : Éric Blondin, Stéphane Lance, Jean-François Lagueux, Nancy Audet et Thomas Cormier.

Le 5 juin dernier avait lieu au Club de Golf Belvédère de Val-d’Or, la 25e édition du tournoi de Golf de la Section Harricana de l’ICM. Ce tournoi, qui est maintenant une tradition à Val-d’Or, a attiré près de 170 personnes venant des 4 quatre coins de l’Abitibi. Les participants ont tous eu droit à une ronde de golf sous des cieux cléments et à un délectable souper préparé par l’équipe du Club de Golf Belvédère. Par la suite, il y a eu la traditionnelle remise des prix de participation qui cette année, fut exceptionnelle tant par la qualité que par l’originalité des prix.

Bien que l’objectif principal de ce tournoi soit la participation, nous tenons à signaler la performance du quatuor de la firme GÉNIVAR, composé d’Éric Blondin, Stéphane Lance, Nancy Audet et Thomas Cormier, (photographiés ici de gauche à droite avec JeanFrançois Lagueux au centre) qui sont repartis avec le trophée de l’équipe ayant le meilleur pointage. Nous espérons les revoir l’année prochaine afin qu’ils défendent leur titre lors de la prochaine édition.

En dernier lieu, nous désirons remercier l’ensemble de nos participants et commanditaires, qui encore une fois cette année, ont contribués au succès de cette journée et nous leur donnons rendez-vous l’année prochaine pour la 26e édition du tournoi de golf de la section Harricana qui se tiendra le 4 juin 2011 au club de Golf Belvédère. ICM Jean-François Lagueux est directeur de la section Harricana de l’ICM.

Obituaries Daniel A. Bradley became a member of CIM in 1958 and a Life Member in 1990. He passed away on April 30, 2010.

George Mitchell Furnival joined CIM in 1936 and became a Life Member in 1972.

René Lavertu joined CIM in 1965 and became a Life Member in 1996. He died on July 29, 2010.

E.S. Short became a member of CIM in 1961 and achieved Life Member status in 1991.

â&#x20AC;&#x153;

The most valuable industry conference I have attended in Canada.

The networking was brilliant. My entire sales team met potential business customers.

â&#x20AC;&#x153;

Vancouver 2010 survey respondent

HISTORY OF

economic geology Nevada-type gold deposits (Part 3) “Well, of course, you have to be an optimist to be a geologist. And if you don’t find what you’re looking for in some place, you always think, well, the next time it will be the one.

But plenty of geologists, very good geologists, spend practically their whole careers without coming up with a prospect which developed into a mine…

There’s an awful lot of luck in it. Looking at the (Carlin) program as a whole, we were fantastically lucky because the whole program only lasted three or four months. On a program like this, you might be working on it for a couple of years and end up with nothing. But we got onto this very quickly, and that was - that’s part of the game.” ~Livermore, 2000

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Early prospectors found numerous insignificant gold occurrences throughout northeastern Nevada during the last half of the 19th century, some of which were associated with base metal mineralization. It was not until Newmont discovered the Carlin deposit in 1961 that it became clear that the important gold deposits in this region were of the “invisible,” “noseeum” or “Nevada” type.

This is mineralization composed of flakes of gold that are so fine grained that they float on water, cannot be collected in a gold pan and do not concentrate as placer deposits in creeks. The earliest discoveries of this type of gold were at Maggie Creek in 1926, Gold Acres several years before the first production in 1936, Getchell in 1934 (which Newmont mined briefly starting the next year), and Standard in 1934.

This type of mineralization was first recognized

by W. O. Vanderburg (1939) of the U.S. Bureau of Mines. Although he predicted that there was probably similar mineralization waiting to be found because it was so hard to recognize, his report generated little interest because the grades were too low and the deposits were small. The Vanderburg report was particularly important to John Livermore of Newmont because, as luck would have it, he had visited both the Getchell and John Livermore Standard occurrences early in his career and had been intrigued by this type of mineralization. He read the report in the late 1940s, which was fortuitous because R. J. (Ralph) Roberts and other geologists of the U.S. Geological Survey had commenced regional mapping studies in Nevada in 1939 and had covered the area enclosing northeastern Nevada by the late 1940s and early 1950s. They began to publish their results in 1955, culminating in the most important paper (Roberts, 1960). Livermore attended a lecture by Roberts in Elko in the spring of 1961, which gave him an opportunity to have a private discussion about the complicated geological history of this region, particularly the relationship between stratigraphy, the invisible gold mineralization, and a major fault called the Roberts Mountain Thrust (RMT; not named after Ralph).

The RMT is a regional, east-dipping, low-angle fault of Devonian to Mississippian age that was produced by the Antler Orogeny. The RMT had emplaced a low-permeability, fine-grained, siliciclastic assemblage of Ordivician and Silurian age, called the Upper Plate, over a permeable, thin-bedded package of Ordovician to lower Mississippian silty dolomite or limestone (the Lower Plate). Because of lower permeability and reactivity, the Upper Plate has impeded fluid flow and trapped mineralizing fluids within the Lower Plate. The gold is often associated with high-angle faults and replacement zones nearby.

In addition to mapping the RMT, Ralph Roberts and his colleagues recognized that rocks of the Lower Plate had been exposed in places by erosion and that these “windows” through the Upper Plate hosted the known invisible gold occurrences. Livermore became convinced that the USGS mapping had narrowed the best target areas for invisible gold mineralization sufficiently to make it practical to search for larger deposits.

Photo courtesy of Newmont Mining Corp.

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

HISTORY OF

economic geology One of the most interesting facets of the Carlin discovery was that it was not accomplished with a large crew and budget and all the newest, most sophisticated equipment.

Fred Searls, who had joined Newmont in 1925 and been the chief geologist who pushed the company into gold mining in the California Motherlode in 1929, had become the president of Newmont in 1946 and was now chairman.

While he was still keenly interested, exploration was now the responsibility of Robert Fulton, a 1941 mining engineering graduate of the University of Nevada, who (like Searls) had been raised in the Motherlode gold camp.

Kaufman (1992) described the Newmont approach as follows in a chapter titled “The Nevada Noseeum Jackpot”: “Newmont’s exploration budget under Bob Fulton’s guidance was skeletal. … Fulton often used the word ‘parochial’ to describe his desired modus operandi, and in the western U.S. he outdid himself, budgeting for only two full time geologists to cover the whole region. … Newmont of this era was your classic lean and mean organization. There were no frills and no extras; just enough to do the job efficiently.”

John Sealy Livermore was born in the San Francisco area in 1918 and graduated from Stanford University with a geology degree in 1940. After serving in the navy during World War 2, he worked at a number of mines and exploration projects in the southwest United States, including a stint at the Standard Mine. He joined Newmont in 1952, choosing it over other large U.S. mining companies because it was strong on exploration but was not so big that it was bureaucratic. Most of his work for Newmont was spent on foreign assignments until 1960, when he was sent to Nevada and told to scout around for opportunities.

Livermore soon convinced Fulton that exploring for noseeum gold mineralization in Lower Plate windows along the RMT could be an important target for Newmont. Fulton agree to a small, cheap program of detailed geological mapping and prospecting in Eureka and Elko counties, supported by fire assays for gold and geochemical analyses for associated metals.

Fulton assigned J. Alan Coope, who was investigating the potential of the Marigold and Buffalo Valley properties Alan Coope, circa 1970 in the Battle Mountain district, to be his assistant. In spite of their different backgrounds, he and Livermore made a highly effective team. Coope was born in Derbyshire, England, in 1935, received a B.Sc. in geology from King’s College London in 1956 and a PhD in the new science of applied geochemistry from Imperial College London in 1958. During his university years, he

Location map of mines and other significant deposits along the Carlin trend; from Coope (1991)

developed new exploration techniques for nickel in Africa for Falconbridge and Anglo American. After he joined Newmont in 1959, his first assignment was on copper exploration in the Phillipines.

The target area selected for the 1961 program included the Lynn and Carlin windows, located 12 to 40 kilometres northwest of the town of Carlin on US Highway 40.

Because the low price had discouraged exploration for gold everywhere and no significant discoveries had been made in Nevada for years, Newmont had no serious competition.

The earliest gold discovery in the Carlin area was a placer occurrence staked by Fred Lynn in 1907 on Lynn Creek, about 2.5 kilometres north of the future Carlin Mine. Subsequent prospecting led to similar placer discoveries on neighbouring creeks, all of which were derived from narrow veins and stockworks. Total production from the creeks and bedrock showings probably amounted to less than 10,000 ounces.

The only exploration in the Carlin area in 1960 and early 1961 was limited work by others at the Maggie and Bootstrap occurrences, six and 14 kilometres northwest of the Carlin minesite, respectively. Antimony had been discovered at Bootstrap in 1918 but visible gold was not identified until 1948, which led to the production of about 90 tonnes averaging 22.3 g/t (0.65 oz/ton) gold. Following more underground development and several options, including one with Homestake Mining Company in 1956, R. R. Reed built a 90-tonne mill and mined about 35,000 tonnes at a recovered grade of approximately 8.5 g/t (0.25 oz/ton) by early 1960.

September/October 2010 | 107

HISTORY OF

economic geology The Blue Star (No. 8) Mine was initially explored for turquoise in the 1920s but gold was not identified there until 1957. In 1960, Messrs. Lage, Morris and Scott obtained gold assays of up to 15.1 g/t (0.44 oz/ton) across a 3.3-metre interval in a percussion hole and up to 22.3 g/t (0.65 oz/ton) from a 2.9-metre underground channel sample. None of this gold was pannable. Efforts to treat this material in a 180-tonne cyanide mill in early 1961 were thwarted by sliming problems, and the owners were unable to attract any interest from mining companies.

After a brief examination of the Blue Star property, Fulton and Searls agreed with Livermore that Newmont should explore it, and he and Coope began three weeks of detailed geological mapping and extensive sampling in June. The samples were delivered to Henry Treweek, a reliable fire assayer who lived 80 kilometres away at Gold Acres and was one of the few still operating in Nevada.

They estimated that the deposit contained at least 450,000 tonnes averaging about 5.1 to 6.9 g/t (0.15 to 0.2 oz/ton) gold. While this was a marginal underground grade at the current gold price, it was a good enough start to make Newmont try, albeit unsuccessfully, to acquire the property.

Livermore and Coope next used their newly acquired knowledge from Blue Star and the USGS mapping to develop a simple geological model to guide exploration in the surrounding area. This consisted of the precipitation of large concentrations of fine-grained gold caused by the pooling of upward migrating hydrothermal fluids beneath the RMT. The fault was readily mappable throughout most of the Lynn window due to marked differences between the lithologies in the two plates, so systematic prospecting and sampling was performed along this contact. Within a few weeks, anomalous gold values in excess of 1 g/t (0.03 oz/ton) were encountered in strongly silicified (jasperoidal) and barite-veined outcrops approximately four kilometres southeast of Blue Star. Grab and channel samples produced gold assays of up to 7 g/t (0.2 oz/ton). Searls and Fulton returned in late September and agreed to stake a 138 ha (340 acre) property that was destined to become part of the Carlin minesite.

Bulldozer trenching was used to enable more detailed mapping and sampling. One key trench (B) was cut across a quartz porphyry dyke that appeared to be related to the mineralization, but detailed sampling revealed that the assays were produced by invisible gold in the adjacent hornfelsed sedimentary rock, which averaged 7 g/t (0.2 oz/ton) across a length of 24.4 metres. After heavy snowfall in late November ended the program, Livermore was transferred to Toronto and promoted to manager of exploration of Newmont Mining Corporation of Canada. That was a clear indication of what a low a priority Fulton placed on the Carlin project at that point.

Soon after the 1962 program began in April under Coopeâ&#x20AC;&#x2122;s direction, Newmont acquired the adjoining 42 ha (80 acre) Popovich homestead, which was mapped in 108 | CIM Magazine | Vol. 5, No. 6

Location of the Carlin Mine in relation to nearby creeks worked for placer gold prior to the discovery; from Coope (1991)

Reconnaissance geological map of the Bootstrap, Lynn, and Carlin windows, prepared by Livermore and Coope in October 1961, showing the location of active and dormant mines and prospects; from Coope (1991)

detail. This showed that the geology was complex due to intensive silicification and a strongly sheared fault that gave gold assays of about 2.4 to 2.7 g/t (0.07 to 0.08

oz/ton). The footwall was composed of poorly exposed, gray, silty limestone that had a porous appearance because of the leaching of the carbonate matrix. When assays of grab samples showed that it had a surprising gold content of 7.5 g/t (0.22 oz/ton), a line of 11 holes was drilled across the structure in September.

The third hole produced an intercept of 35.3 g/t (1.03 oz/ton) across an interval of about 30 metres in the immediate footwall of the fault, which marked the discovery of the Carlin deposit.

The mine began production in April 1965 at the rate of 1,800 tonnes/day, with ore reserves of 10 million tonnes at an average grade of 11 g/t (0.32 oz/ton). Total cost was about $10 million.

Alan Coope was also transferred to Toronto early in 1963, which proved to be an important addition to Canadian geoscience. He was based there for 24 of the 33 years he worked for Newmont and was active in exploration programs in all regions of Canada while traveling to many parts of the world on consulting geochemical assignments to other Newmont subsidiaries.

His principal contribution to Canadian geoscience was his great leadership, which led to the formation of the Association of Exploration Geochemists (now called the Association of Applied Geochemists) between 1967 and 1970. He became the first president and continued to guide its growth into a major international technical society, with over 1,000 members in about 60 countries. He was awarded the association’s Past Presidents’ Medal in 1995 and made an Honorary Member in 2001. It was inevitable that Canadians would play an important role in AAG. In addition, he served in executive positions in most of the Canadian geology and mining societies. He was later transferred to Tucson and Denver before retiring to Tucson, where he died in 2001. Coope remained a champion of the science and an influential mentor until his death.

Acknowledgments The main source of information on the history of the Carlin discovery was Coope (1991). Coope’s biography was compiled with the assistance of his widow Carol and a small army of his friends and associates, led by Terry Macauley, Bob Garrett and Colin Barnett. CIM

References Coope, J. A. (1991). Carlin Trend exploration history: discovery of the Carlin deposit. University of Nevada, Reno; Mackay School of Mines. Nevada Bureau of Mines and Geology, Special Publication 13, 16.

Kaufman, M. A. (1992). Mountains of ore and rivers of gold: stories of a contemporary prospector. Spokane: Dos Vulturos Company and The Arthur H. Clark Company, 119-124.

Livermore, J. S. (2000). Prospector, Geologist, Public Resource Advocate: Carlin Mine Discovery, 1961. An oral history conducted in 1992, 1997, and 2000 by Eleanor Swent and Maurice Fuerstenau, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 2000. Available at http://content.cdlib.org/view?docId=kt796nb3xp&brand=oac&doc.view=entire_text Price, J. G. ( 2008). Overview, in The Nevada Mineral Industry 2008. Reno: Nevada Bureau of Mines and Geology, Special Publication MI-2008.

Roberts, R. J. (1960). Alignments of mining districts in north-central Nevada. U.S. Geological Survey Professional Paper 400-B, part 9, B17-19.

Vanderburg. W. O. (1939). Reconnaissance of mining districts in Lander County, Nevada. U.S. Bureau of Mines Information Circular IR 7043, 82-83.

Weiland, E. (2001). In memory of Dr. J. Alan Coope. The Association of Exploration Geochemists, Explore Newsletter #113, October 2001, 1-2.

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HISTORICAL

metallurgy Pyotr Romanovich Bagrationi (1818–1876): a pioneer hydrometallurgist

By Mariam Melashvili, Department of Metals and Materials Engineering, University of British Columbia, and Fathi Habashi, Department of Mining, Metallurgical, and Materials Engineering, Laval University

Pyotr Romanovich Bagrationi

Although the solvent action of alkali cyanide on gold seems to have been known to Carl Wilhelm Scheele (1742-1786) as early as 17831, it was the work of Pyotr Romanovich Bagrationi in 1843 that paved the way for the development of the cyanidation process for treating gold-bearing ore.

Prince Pyotr Romanovich Bagrationi was a descendant of Georgian kings. In 1783, with his country under constant attack by its Moslem neighbours, Georgian King Erekle II (1720-1798) established an alliance with Catherine the Great of Russia. However, years later, on December 18, 1800, Russian Tsar Paul I annexed Georgia. That same year, Giorgi XII, the last of the Bagrationi kings, died.

Most of the Georgian nobility entered into the Russian military service.

Among them was Major General Roman Bagrationi (1778-1834) and Pyotr Bagrationi (1765-1812), Pyotr Romanovich Bagrationi’s father and uncle, respectively. In 1827, Roman Bagrationi was assigned to the position of assistant to the governor of Tbilisi and, therefore, relocated to that city; his son, Pyotr, was only nine years old at the time. Five years later, the Georgian nobility was betrayed by one of its own. The conspiracy resulted in numerous arrests and subsequent exile to Siberia. Nikoloz Baratashvili wrote a satirical poem about it, which his classmate, Pyotr Bagrationi distributed. Due to their young age (they were only 14 and 15 years old), they were not jailed; however, they were punished severely.

Pyotr Bagrationi then headed to St. Petersburg in 1833 and entered military school. In 1842, with a military degree in hand, he started working in physics and chemistry. The following year, he was awarded the Order of St. Stanislav (Third Class) for his achievement in galvanic examination.

While conducting galvanic experiments in the Laboratory of Physics at St. Petersburg Academy of Sciences (now the Russian Academy of Sciences) under academician Moritz Hermann von Jacobi2 (1801-1874), Bagrationi discovered that a saturated solution of potassium cyanide left in a gold-plated cup for one week resulted in the dissolution of the gold from the cup. Following this discovery, he prepared gold powder by precipitating gold from its chloride solution using iron sulphate and found that the powder quickly dissolved in the cyanide solution. He also noted that air agitation and heating accelerated the dissolution and that potassium ferrocyanide dissolved gold, albeit at a slower rate.

Bagrationi published his work entitled “Sur la properiété que possédent les cyanures potassiques et ferrosopotassiques de dissoudre les metaux” in Bulletin de 1’Académie des Sciences (Classe Physico - Mathematique), St. Petersburg, Volume 2, in 1843 and 1844. The paper was also translated into German and published in Zeitschrift für praktische Chemie. Although Franz Elsner (1802-

Bagrationi’s galvanic cell 1 According

to J. W. Mellor, Comprehensive Treatise on Inorganic and Theoretical Chemistry, Vol. 3, p. 500 (1923), the solvent action of aqueous solution of alkali cyanides on gold, silver and copper was noted by C.W. Scheele in his memoir, De material tingente coerulei Berolinensis (1783). It should also be mentioned that Scheele discovered hydrogen cyanide.

2

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Russian style: Boris Semyonovich Jacobi

HISTORICAL

metallurgy 1874) of Berlin carried on the research, it was John Stewart MacArthur (1856-1920) who applied this knowledge to gold ores in 1887.

Bagrationi invented the first dry galvanic cell in 1843 and began examining its reactions. This led to his publishing a monograph about it a couple of years later. The cell consisted of copper and zinc cylinders placed one inside the other in clay or any nonmetallic vessel, and the space in between was filled with sand soaked with an ammonium chloride solution. This produced a weak but continuous current that was used as a power supply for the first telegraph line between St. Petersburg and Tsarskoe Selo (Tsar’s Village), at Leichtenberg’s plant, and in various public and private laboratories. The cell itself is a modification of Daniell’s Cell, an invention by British chemist John Frederic Daniell (1790-1845) in 1836.

In 1844, Bagrationi was sent on a scientific mission to Germany, France and England to study galvanic currents for engineering purposes. He was assigned to the position of aide to Maximilian Leichtenberg, Duke of Bavaria, the following year and spent the next seven years abroad; Leichtenberg had been made a manager of the Institute of Mining in Russia. During this time, Leichtenberg published his works on galvanic currents and its further application, and established a galvanoplastic plant in St. Petersburg. He died in 1852. Bagrationi, who was awarded the Prize of the Petersburg Academy of Sciences two years earlier, was then called back to St. Petersburg and later promoted to the rank of major-general.

In 1862, Bagrationi was made governor of the Tver province, where he took part in establishing social services: building a dam to prevent flooding; building a new railway; setting up a telegraphy system; erecting a library and museum; conducting geological surveys; etc. He rose to the rank of lieutenant-general three years later and in 1870, he was made governor of the Baltic countries Courland, Livonia and Estonia. He died suddenly during a business trip to St. Petersburg in 1876, at the age of 58. CIM

Suggested readings Bagration, P. (1844). Ueber die Eigenschaft des Cyankaliums und des Cyaneisenkaliums, die Metalle aufzulösen. Zeitschrift für praktische Chemie, 31, 367370.

Elsner, F. (1844). Beobachtungen über das Verhalten regulinischer Metalle in einer wässrigen Lösung von Cyankalium. Zeitschrift für praktische Chemie, 31, 441-446.

MacArthur, J. S., Forrest, R. W., & Forrest, W. (1887). Process for Obtaining Gold and Silver from Ores. British Patent 14,174.

Parkadze, V. (1956). Peter Bagrationi [in Georgian], Tekhnika da Shroma, Tbilisi, Georgia.

Petrushevski, F. F. (1874). Course of Observative Physics, Saint Petersburg.

Petrushevski, F. F. (1876). Experimental and Practical Course of Electricity, Magnetism, and Galvanism, Saint Petersburg. von Jacobi, M. H. (1843). Bulletin de 1’Académie des Sciences (Classe Physico Mathematique), St. Petersburg.

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Mineral Project Evaluation Techniques and Applications: From Conventional Methods to Real Options Learn the basics of economic/financial evaluation techniques, as well as the practical implementation of these techniques to mineral project assessments; how to gain a practical understanding of economic/financial evaluation principles; and how to develop the skills necessary to apply these to support mineral project decisions.

Instructors: Michel Bilodeau and Sabry A. Abdel Sabour, McGill University, Canada • Date: November 8-11 • City: Montreal

University, Canada • Date: Starts in May • City: Montreal • Info: www.mcgill.ca/conted/prodep/ore

Theory and Practice of Sampling Particulate Materials (Part 1)/QA-QC, Mine and Project Audits (Part 2) Instructor: Dominique François-Bongarçon, AGORATEK, United States • City: Montreal

Strategic Risk Management in Mine Design: From Life-of-Mine to Global Optimization Instructors: Gelson Batista, AMEC, Canada; Roussos Dimitrakopoulos, McGill University, Canada; and Gerald Whittle, Whittle Consulting, Australia • City: Montreal

Upcoming 2011 Seminars NEW — Certification in Ore Reserve Risk and Mine Planning Optimization Spread over a period of four months, this fourweek course is designed for busy mining professionals who wish to update their skills and knowledge base in modern modelling techniques for ore bodies and new risk-based optimization methodologies for strategic mine planning. Gain practical experience by applying the following hands-on concepts and technical methods: methods for modelling ore bodies; stochastic simulations, case studies and models of geological uncertainty; and demand-driven production scheduling and geological risk.

Instructor: Roussos Dimitrakopoulos, McGill

An Introduction to Cutoff Grade Estimation: Theory and Practice in Open Pit and Underground Mines Instructor: Jean-Michel Rendu, Executive Consultant, Snowden, Australia • City: Montreal

Geostatistical Mineral Resource/ Ore Reserve Estimation and Meeting the New Regulatory Environment: Step by Step from Sampling to Grade Control Instructors: Michel Dagbert, Geostat Systems Int., Canada, Jean-Michel Rendu, Executive Consultant, Snowden, Australia, and Roussos Dimitrakopoulos, McGill University, Canada • City: Montreal

technical abstracts CANADIAN METALLURGICAL QUARTERLY Kinetic Modelling of Different Bauxite Types in the Bayer Leaching Process

ABSTRACT The dissolution of aluminum hydroxides from bauxite ores constitutes a key process in the aluminum industry. Generally, aluminum minerals in bauxites are present in the form of gibbsite, boehmite or diaspore. Usually, these mineral forms are mixed in bauxite as a boehmite-diaspore or a gibbsite-boehmite mixture with different weight ratios. In this paper an attempt was made to develop a mathematical model which enables calculation of the Al2O3 recovery from boehmite-diaspore or gibbsiteboehmite bauxite based on kinetic parameters available for leaching the “pure” bauxite types (containing only diaspore, boehmite or gibbsite as the main alumina bearing mineral form) and the mineral composition of the bauxite mixture.

Evaluation of Acid Leaching of LowGrade Chalcopyrite Using Ozone by Statistical Analysis

ABSTRACT Several attempts have been made to optimize the process and reduce operating costs of the acid leaching of low-grade sulphide copper ores. In this study, we conducted acidic leaching of low-grade chalcopyrite by using ferric ion and ozone as oxidants, at 25ºC. In particular, we used a Taguchi L9 experimental design (four factors, three levels) to determine the effects of particle size, ferric ion and sulphuric acid concentrations ([Fe+3] and [H2SO4]) and ozone (O3) mass flow rate, on the amount of copper extracted. Statistical analysis showed that [Fe+3] had the greatest effect on the amount of copper extracted followed by particle size and O3 mass flow rate.

I. Djuri´ c, I. Mihajlovi´ c and ´ Z. ´ Zivkovi´ c, University of Belgrade, Technical Faculty in Bor, Serbia

F. R. Carrillo-Pedroza, Facultad de Metalurgia, Universidad Autónoma de Coahuila, M. A. Sánchez-Castillo, Facultad de Ciencias Químicas, Universidad Autónoma de San Luis Potosí, M. J. Soria-Aguilar, Facultad de Metalurgia, Universidad Autónoma de Coahuila, A. Martínez-Luévanos, Facultad de Ciencias Químicas, Universidad Autónoma de Coahuila, and E. C. Gutiérrez, Facultad de Metalurgia, Universidad Autónoma de Coahuila

Effect of Magnesium on Pressure Leaching of Moa Laterite Ore M. E. Chalkley, M. J. Collins, Sherritt Technologies, Sherritt International Corporation, Fort Saskatchewan, Alberta, C. Iglesias, Moa Nickel S.A., Holguin, Cuba, and N. E. Tuffrey, Sherritt Technologies, Sherritt International Corporation, Fort Saskatchewan, Alberta

ABSTRACT The magnesium content of laterite ore has a significant impact on the quantity of sulphuric acid required to achieve the target nickel extraction by the high pressure acid leach (HPAL) process, both through direct consumption of acid when magnesiumbearing minerals are dissolved and through “buffering” effects via bisulphate ion equilibria at temperature in the leach reactor. This paper presents the results of HPAL batch tests conducted by Sherritt Technologies in Fort Saskatchewan, Alberta, Canada with ore samples from the Moa Nickel Pedro Sotto Alba plant at Moa, Holguin, Cuba along with a comparison of the laboratory results with operating data from Moa. A significant variation in acid requirement has been demonstrated over a relatively narrow range of feed magnesium content. Further, the quantitative results of the laboratory tests allow a model to be formulated for the most economic consumption of acid at Moa.

Effect of Additives on Kinetics of LiquidLiquid Extraction in a ZnSO4/D2EHPA/Kerosene System

ABSTRACT The influence of Na2SO4 and TBP additives on zinc extraction kinetics was investigated in the ZnSO4/D2EHPA/kerosene system. Data for a solution of zinc at a concentration of 50 mol/m3 were fitted to the chemical kinetic model to determine the kinetic constants. It was found that kinetics of the process is chemically controlled.

Using additives resulted in a better agreement between the model and the experimental results as compared to the previous models. In the presence of additives, the model predicts the zinc concentration satisfactorily with a correlation coefficient equal to 0.95.

Gaseous Reduction of Synthetic Lead Slags and Industrial Lead Sinters

ABSTRACT In conventional practice primary lead production is carried out in a lead blast furnace using sinter feed. At the Yunnan Metallurgical plant the ISASMELT furnace is used to produce lead bullion and a high-lead slag from lead concentrate. The highlead slag is cast into lumps to provide a suitable feed for the blast furnace. In the present study the relative microstructures and reduction characteristics of industrial lead sinters and synthetic lead slags in CO/CO2 gas mixtures have been measured and compared. The microstructure and property changes and the mechanisms of reduction in each case are examined and discussed. The results of the study are used to explain the successful implementation of cast slag feed in a commercial ISASMELT-lead blast furnace practice.

E. Vahidi, F. Rashchi and K. Pashayi, Department of Metallurgy and Materials Engineering, College of Engineering, University of Tehran, Tehran, Iran

B. Zhao, Pyrometallurgy Research Centre, School of Engineering, The University of Queensland, Australia, B. Errington, Xstrata Technology, Brisbane, Australia, E. Jak and P. Hayes, Pyrometallurgy Research Centre, School of Engineering, The University of Queensland, Australia

Excerpts taken from abstracts in CMQ, Vol. 49, No. 2.

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technical abstracts CIM JOURNAL Development, testing and applications of an induction-balance sensor for low-grade nickel ores A. S. Bamber, University of British Columbia, British Columbia, and D. J. Houlahan, MineSense Technologies, British Columbia

ABSTRACT This paper presents the outcomes of a collaborative project to develop an induction-balance sensor specifically for low-grade copper and nickel ores. A review of the basic principles of induction-balance sensing and of the sensor-rock interaction is presented. Early development and testing of the sensor on ores from the Thompson nickel belt in northern Manitoba is discussed. Shortcomings of the prototype identified in early testing have now been overcome, leading to improvements in design and construction, as well as sensor accuracy. The improved sensor has now been tested on additional ores from the Sudbury Basin, with good results. A discussion of potential applications is presented and recommendations for future development are made.

RÉSUMÉ Cet article présente les résultats d’un projet en participation pour développer un détecteur à balance d’induction spécialement conçu pour les minerais de cuivre et de nickel à basse teneur. Une révision des principes de base de la balance d’induction et de l’interaction roche-capteur est présentée.

On discute des premiers développements et essais du capteur sur des minerais de la ceinture de nickel de Thompson dans le nord du Manitoba. Les faiblesses qui ont été identifiées sur le prototype lors des premiers essais ont été corrigées, menant à des améliorations de conception, de construction et de la précision du capteur. Le capteur amélioré a été mis à l’épreuve sur d’autres minerais du bassin de Sudbury avec de bons résultats. On discute des applications potentielles et on présente des recommandations pour un développement futur.

Ground penetrating radar investigations at the planned Unki platinum mine, Great Dyke, Zimbabwe D. Eisenburger, C. Grissemann, V. Gundelach, W. Kahnt, and T. Oberthür, Federal Institute for Geosciences and Natural Resources, Hannover, Germany, and R. Thierbach, Ronnenberg, Germany

Ground penetrating radar investigations at the planned Unki platinum mine, Great Dyke, Zimbabwe D. Eisenburger, C. Grissemann, V. Gundelach, W. Kahnt, and T. Oberthür, Federal Institute for Geosciences and Natural Resources, Hannover, Germany, and R. Thierbach, Ronnenberg, Germany

ABSTRACT The ground penetrating radar (GPR) method was used in a platinum mine in Zimbabwe by members of the Federal Institute for Geosciences and Mineral Resources. The measurements were carried out in boreholes and drifts. Electromagnetic reflections from a fault that consistently trends parallel to the mineralization zone permitted the mapping of the economically minable parts of the deposit. An introduction is given to the geology of the studied area and the application of the GPR method. The electrical parametres of the rocks are measured in situ, the GPR measurements are displayed with radargrams, and the visible structures are explained in illustrations.

RÉSUMÉ La méthode géoradar a été utilisée dans une mine de platine au Zimbabwe par des membres du Bundesanstalt für Geowissenschaften und Rohstoffe [Institut fédéral (allemand) pour les géosciences et les ressources naturelles]. Les mesures ont été effectuées dans des trous de forage et les galeries d’accès. Les réflexions électromagnétiques d’une faille qui a une direction constante parallèle à la zone minéralisée ont permis de cartographier les parties économiquement exploitables du gisement. L’article donne une introduction à la géologie du secteur à l’étude et à l’application de la méthode géoradar. Les paramètres électriques des roches sont mesurés en place, les mesures géoradar sont présentées au moyen de radargrammes et les structures visibles sont expliquées dans les illustrations.

ABSTRACT An overall study was conducted to evaluate the properties and processes influencing the rate and magnitude of consolidation for oil sands fine tailings produced using different extraction processes.

As part of the overall study, a comprehensive description of physical and chemical characteristics of fine tailings generated by caustic and non-caustic processes was carried out. Ultimately, the influence of these fundamental properties on the compressibility, hydraulic conductivity and shear strength properties of the fine tailings was assessed. The characteristics of the fine tailings are presented in terms of index properties, mineralogy, specific surface area, water chemistry, liquid limits, particle size distribution and structure.

RÉSUMÉ Une étude détaillée a été réalisée afin d’évaluer les propriétés et les processus influençant le taux et l’ampleur de la consolidation des résidus fins de sables bitumineux produits par différents processus d’extraction. Dans le cadre de l’étude détaillée, les caractéristiques physiques et chimiques des résidus fins générés par les processus caustiques et non caustiques ont été décrites de manière très complète. De plus, l’influence de ces propriétés fondamentales sur la compressibilité, la conductivité hydraulique et la résistance en cisaillement des résidus fins a été évaluée. Les caractéristiques des

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résidus fins sont présentées en termes de leurs propriétés de base, de la minéralogie, de la surface spécifique, de l’hydrochimie, des limites liquides, de la granulométrie et de la structure.

Effect of extraction water chemistry on the consolidation of oil sands fine tailings W. G. Miller, WorleyParsons Services, Perth, Australia, J. D. Scott and D. C. Sego, University of Alberta, Edmonton, Alberta

ABSTRACT An overall study was conducted to evaluate the properties and processes influencing the rate and magnitude of consolidation for oil sands fine tailings produced using different extraction processes. As part of this overall study, consolidation tests using slurry consolidometers were carried out for caustic and non-caustic fine tailings. The influence of a change in bitumen extraction process (caustic versus non-caustic) on consolidation properties, namely compressibility and hydraulic conductivity, was determined, as was the effect of adding a coagulant (calcium sulphate [CaSO4]) to caustic fine tailings. The biggest advantage of non-caustic fine tailings and treating caustic fine tailings with coagulant is an increased initial settlement rate and slightly increased hydraulic conductivity at higher void ratios. Thereafter, compressibility and hydraulic conductivity is governed by effective stress.

RÉSUMÉ Une étude détaillée a été réalisée afin d’évaluer les propriétés et les processus influençant le taux et l’ampleur de la consolidation des résidus fins de sables bitumineux produits par différents processus d’extraction. Dans le cadre de cette étude détaillée, des essais de consolidation ont été effectués sur les boues en utilisant des oedomètres; les essais portaient sur des résidus fins caustiques et non caustiques.

L’influence d’un changement dans le procédé d’extraction du bitume (caustique p/r non caustique) sur les propriétés de consolidation a été déterminée, soit la compressibilité et la conductivité hydraulique, en plus de l’effet de l’ajout d’un coagulant (sulfate de calcium [CaSo4]) aux résidus caustiques fins. Le plus grand avantage des résidus fins non caustiques et du traitement des résidus fins caustiques avec un coagulant est un accroissement du taux initial de tassement et une légère augmentation de la conductivité hydraulique à des indices des vides supérieurs. Ensuite, la compressibilité et la conductivité hydraulique sont une fonction de la contrainte effective.

Analyse des modèles économiques des coûts de minage pour les études de préfaisabilité S. Planeta, Université Laval, et J. Szymanski, University of Alberta

RÉSUMÉ L’estimation la plus précise possible des coûts de minage est d’extrême importance pour les études de préfaisabilité afin de diminuer les risques financiers des projets miniers. Les méthodologies existantes d’évaluation des coûts de minage ne permettent pas de les évaluer avec des marges d’erreur acceptables tout au long de l’évolution des projets miniers. Elles visent à évaluer les coûts unitaires de minage des études préliminaires de faisabilité, pour les principales méthodes d’exploitation, en prenant pour l’hypothèse que ces coûts dépendent principalement du taux d’extraction journalière. Si cette hypothèse peut être justifiée pour l’évaluation du coût d’opération, elle est fort discutable pour l’évaluation des coûts de minage. Pour démontrer que cette hypothèse est inadéquate nous avons analysé la méthode d’exploitation la plus populaire sur le continent nord-américain c’est à dire celle par chambres vides avec retrait horizontal (HR – Horizontal Retreat), ou « Longhole » et celle avec retrait vertical (VCR - Vertical Crater Retreat). Il ressort de cette analyse que les coûts unitaires de minage dépendent principalement des conditions géotechniques du massif rocheux et de la largeur du gisement et non pas du taux d’extraction journalière du minerai.

ABSTRACT The most precise possible estimation of mining costs is of extreme importance for prefeasibility studies, to decrease the financial risks of the mining projects. The existing methodologies to evaluate the mining costs do not allow estimating them with acceptable margins of error throughout the evolution of the mining projects. The methodologies aim at estimating the mining unit costs of the preliminary feasibility study, for the main mining methods, by supposing that they depend mainly on the daily extraction rate.

If this hypothesis can be justified for the evaluation of the operating costs, it is highly questionable for the evaluation of the mining costs. To demonstrate that this hypothesis is inadequate we analyzed the “open stope” mining method, which is the most popular method on the North American continent. The results of this analysis show that the unit costs of mining depend mainly on the geotechnical conditions of the rock massif and the width of the deposit and not on the daily ore extraction rate.

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technical abstracts CIM JOURNAL Analyse technique et économique du triage photométrique du minerai S. Planeta, Université Laval, et J. Szymanski, University of Alberta

RÉSUMÉ Cet article traite d’une analyse technique et économique du concept du triage optique en vue d’améliorer la rentabilité des opérations minières. Le principe du tri optique et les principaux systèmes et modules servant au fonctionnement de l’appareil de triage sont décrits. Un modèle a été développé pour analyser l’intérêt économique d’une opération de triage optique. L’étude est basée sur des données provenant d’une halde de minerai à faible teneur en or, déposé à la surface, et de minerai extrait des opérations souterraines courantes de la mine Beaufor au Québec. Les résultats de cette analyse indiquent que l’opération de triage optique permet d’améliorer grandement la performance économique; l’opération devient alors rentable pour des teneurs en or relativement petites.

ABSTRACT This article concerns a feasibility analysis of using optical sorting to separate the economic and non-economic ore in order to increase the profitability of mining operations and to reduce the negative impact of mining discharges on the environment.

The optical sorting equipment available on the market and the main characteristics are presented. A model was developed to analyze the economic benefits of optical sorting.

The study is based on data relative to low-grade ore piles, stored on the surface, and on ore extracted from the current underground mining operations at the Beaufor Mine in Quebec. The results of this analysis indicate that optical sorting greatly improves economic performance and becomes profitable for relatively low-grade ores. In addition, the separation efficiency of sterile/ore is high and can greatly improve the economic performance of mines.

Low-temperature geothermal energy in mining environments J. Raymond, R. Therrien and L. Gosselin, Université Laval, Québec, Québec

ABSTRACT The ground-source heat pump is a low-carbon technology that uses the earth’s renewable geothermal energy to heat and cool buildings, with an efficiency of three to 4.5 times that of conventional systems. These high performances are achieved by exchanging heat with the earth using a fluid that is groundwater, surface water or closed loop water. Examples of system design calculations using data from the Mouska and Doyon mines in Abitibi show significant installation cost savings using dewatering mine water or ground heat exchangers installed below oxidizing waste rocks. Groundsource heat pump technology is reviewed and scoping calculations are presented to illustrate how such systems can be installed in mining environments.

RÉSUMÉ Une pompe géothermique est une technologie à faible utilisation de carbone qui utilise l’énergie géothermique renouvelable pour chauffer et refroidir des immeubles; ce système est de 3 à 4,5 fois plus efficace que les systèmes conventionnels. Ces hauts rendements sont obtenus en échangeant de la chaleur avec le sol au moyen d’un fluide : eau souterraine, eau de surface ou une boucle d’eau en continue.

En utilisant des données des mines Mouska et Doyon en Abitibi, des exemples de conception de systèmes montent des économies importantes de coûts d’installation en utilisant l’eau d’exhaure de la mine ou des échangeurs de chaleur installés sous les roches stériles qui s’oxydent. La technologie des pompes géothermiques est passée en revue et des calculs de la portée sont présentés afin d’illustrer comment de tels systèmes peuvent être installés dans des environnements miniers.

Excerpts taken from abstracts in CIM Journal, Vol. 1, No. 2.

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