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CONTENTS|CONTENU CIM MAGAZINE | NOVEMBER | NOVEMBRE | 2013
TOOLS OF THE TRADE 10
The best in new technology Compiled by E. Moore
NEWS 14 20
Industry at a glance Against the current Ambitious Albertan crude oil upgrading project hopes local refining will prove attractive by A. Livingstone
22
Regulators to join forces Collaborative Canadian securities regulator could help companies put more money into projects by A. Reitman
24
At home away from home Study finds increased communications and privacy important to remote workers by D. Kaufman
20 COLUMNS 26 28 30 32 34
MAC Economic Commentary Focused spending on mining innovation required by P. Gratton Eye on Business Approaches to lowering mining’s cost curve by T. Struttmann HR Outlook Why aren’t you meeting the HR components of your IBAs? by M. Sturk Finance CIM developing production cost reporting best practices by G. Clow Commodities The iron ore pricing roller coaster by P. Crowson
40
UPFRONT Iron ore 36
Heat seeking CSIRO technology aims to convert slag heat into useable energy by A. Lopez-Pacheco
38
Pelletization partners Vale and universities seek to perfect ball mill optimization by A. Lopez-Pacheco
40
Quebec’s iron-clad bond with China Both parties in iron ore business for the long haul by P. Blin and A. Dion-Ortega
42
4 | CIM Magazine | Vol. 8, No. 8
Amongst giants Partnerships sustain momentum for Dean Journeaux of New Millennium Iron by V. Danielson
44
TECHNOLOGY Materials handling 59
In-pit innovation In-pit crushing and conveying advances make the most of increased maneuverability and enhanced equipment monitoring by E. Moore
CIM COMMUNITY | LA COMMUNAUTÉ DE L’ICM 62
Solution mining Ideas, innovation and experience feed the conversation at MEMO 2013 by R. Bergen
64
A practised first impression Introducing CSR into geology and engineering programs would benefit industry by C. Baldwin
TECHNICAL ABSTRACTS | RÉSUMÉS TECHNIQUES
FEATURE | ÉDITORIAL 44
No safety in numbers For millions who labour in artisanal and small-scale mines, health and safety are still an afterthought, or worse. Can large-scale mining companies help? by C. Baldwin
49
71 72
Pas de sécurité en nombre Pour les millions de personnes travaillant dans des
CIM Journal Canadian Metallurgical Quarterly
mines artisanales ou de petite taille, la santé et la sécurité passent souvent au second rang, voire pire. Les grandes sociétés minières peuvent-elles aider ? par C. Baldwin
IN EVERY ISSUE 6 8
PROJECT PROFILE | PROFIL DE PROJET 53
73
Poised to compete Ontario Graphite is the first out of the gate in the renewed race to bring a secure supply of flake graphite to the manufacturing sector by A. Lopez-Pacheco
57
74
Editor’s letter President’s notes Mot du président Innovation Showcase Product file Mining Lore by R. Silke
Prêt à affronter la concurrence Ontario Graphite est la première société à intervenir dans la nouvelle course visant à garantir au secteur de la fabrication la sécurité de l’approvisionnement en graphite en paillettes par A. Lopez-Pacheco
66 PROGRAM | PROGRAMME 46th ANNUAL
CANADIAN MINERAL PROCESSORS CONFERENCE 46e CONFÉRENCE ANNUELLE DES
MINÉRALURGISTES DU CANADA
53
OTTAWA | JANUARY 21 – 24 JANVIER 2014 November 2013 | 5
editor’s letter
Editor-in-chief Ryan Bergen, rbergen@cim.org Executive editor Angela Hamlyn, ahamlyn@cim.org Managing editor Andrea Nichiporuk, anichiporuk@cim.org
In search of elegant solutions
A
man walking the trade show floor at the recent Maintenance Engineering/ Mine Operators (MEMO) Conference in Kamloops, B.C., stopped at one of the booths I was visiting and began to explain to the exhibitor the ventilation monitoring issue he was having at his operation, including the time-consuming, ad hoc solution his team had come up with. He was looking for a device that would resolve the problem. “Do you think you could make something like that,” he asked. The technical program at this year’s event provided evidence that elegant and innovative solutions resulting from such informal exchanges are not uncommon. Technical challenges like these are neat in their proportions and the industry is adept at responding to them. A solution built on past experience and technical expertise can be offered. And then there are questions where the terms of reference are still being developed, and there are relatively few successful case studies to draw from. These are the circumstances when taking on the challenging relationship between mining companies and artisanal and small-scale miners (ASM). It is an area that Correy Baldwin explores in “No safety in numbers” (p. 44) where, for example, AngloGold Ashanti, working on its Gramalote project, is trying to find a workable solution with the locals who have mined the area that hosts the greenfield project for generations – and where two sides with vastly different priorities and tolerance for risk must find some common ground. We ask how mining companies can best negotiate their inevitable relationships with ASMs, and whether they can bring some of their expertise to bear in developing better practices within this sector that represents the vast majority of the global mining workforce. It is a contentious issue, and we are grateful to those in the industry who volunteered their perspectives. Even within the editorial department here, it stirred up controversy as we debated which cover image best represented the story, and whether the one we chose was too abrasive. Ultimately, we reached a grudging consensus, which is not ideal, but, as the voices in the cover story make clear, the issue is one for which we as an industry are less practised at providing elegant solutions.
Section editors Peter Braul, pbraul@cim.org Herb Mathisen, hmathisen@cim.org Copy editor/Communications coordinator Zoë Koulouris, zkoulouris@cim.org Web editor Nathan Hall, nhall@cim.org Web support Maria Olaguera, molaguera@cim.org Contributors Correy Baldwin, Pierrick Blin, Graham Clow, Phillip Crowson, Vivian Danielson, Antoine Dion-Ortega, Pierre Gratton, Dave Kaufman, Andrew Livingstone, Alexandra Lopez-Pacheco, Eavan Moore, Anna Reitman, Ryan Silke, Thomas Struttmann, Melanie Sturk, Dinah Zeldin Editorial advisory board Alicia Ferdinand, Garth Kirkham, Vic Pakalnis, Nathan Stubina Translations Karen Rolland, SDL Published 9 times a year by the Canadian Institute of Mining, Metallurgy and Petroleum 1250 – 3500 de Maisonneuve Blvd. West Westmount, QC H3Z 3C1 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($174.00); Non-members (Canada), $220.00/yr (PE, MB, SK, AB, NT, NU, YT add $11.00 GST, BC add $26.40 HST, ON, NB, NL add $28.60 HST, QC add $32.95 GST + PST, NS add $33.00 HST) Non-Members USA and International: US$240.00/year. Single copies, $25.00. Advertising Sales Dovetail Communications Inc. 30 East Beaver Creek Rd., Ste. 202 Richmond Hill, Ontario L4B 1J2 Tel.: 905.886.6640; Fax: 905.886.6615; www.dvtail.com Senior Account Executives 905.886.6641 Janet Jeffery, jjeffery@dvtail.com, ext. 329 Neal Young, nyoung@dvtail.com, ext. 325 Account Manager Tristan Cater, tcater@dvtail.com, ext. 326
This issue’s cover Women pick through the waste rock dump of a cooperative artisanal and small-scale gold mine in southern Peru. Photograph: Valerian Mazataud / focuszero.com Layout and design by Clò Communications Inc. www.clocommunications.com
Ryan Bergen, Editor-in-chief editor@cim.org @Ryan_at_CIM_Mag
6 | CIM Magazine | Vol. 8, No. 8
Copyright©2013. All rights reserved. ISSN 1718-4177. Publications Mail No. 09786. Postage paid at CPA Saint-Laurent, QC. Dépôt légal: Bibliothèque nationale du Québec. The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.
Printed in Canada
president’s notes | mot du président
It is time to speak up Over the past couple of decades one of the most common themes that I have heard from mining industry spokespeople is that we need to do a better job of telling our story. Or, more specifically, people would not be so critical of the industry if they only realized the contribution it makes to their comfortable lifestyles. Lastly, I have heard some say, with a lot of exasperation, that people just do not understand mining! We always conclude that we do not communicate well as corporations or as an industry. Yet, when the chance arises to tell our story, usually as a response to a challenge from a green advocacy group or a politician trying to curry favour and win votes, we shy away from the opportunity and remain silent.
Robert Schafer CIM President | Président de l’ICM
The mining industry needs to be far more proactive and unified in its communications strategies. We need to adopt innovative ways to connect to society. Let us move beyond congratulating ourselves for providing the base materials for indispensible technologies like laptops, smart phones and communication networks. Let us put them to good use. We need to tell the world that we have the technologies to build, operate and close mines without harming the greater ecosystem. We must show that mining is providing jobs and improving skill levels and capacity in communities and nations. We should let governments know that mining-related investments multiply their tax and royalty proceeds through our stimulation of spin-off and support businesses. We have to convince the current and coming generations that employment in mining is modern, intellectually challenging, and uses the best of innovative, computer-driven technologies, and is a rewarding and fun career. We must do a better job of communicating all of this. Let us invest in telling our story. The results will be worth the time, dollars and commitment.
Il est temps de parler franchement Ces dernières décennies, les porte-parole de l’industrie minière semblent particulièrement déplorer le fait que nous ne nous appliquions pas assez à communiquer notre histoire. Ou plus précisément, ils pensent que les critiques à l’égard de ce secteur seraient sans doute moins virulentes si les gens réalisaient à quel point l’industrie minière contribue à leurs modes de vie bien confortables. Enfin, beaucoup de membres de ce secteur se disent exaspérés de constater que personne ne comprend l’exploitation minière ! Nous arrivons toujours à la conclusion que nous ne communiquons pas très bien en tant que sociétés ou industrie. Pourtant, lorsqu’on nous donne la possibilité de nous exprimer, en général en réponse à l’attaque d’un groupe de défense de l’environnement ou à un homme politique tentant de gagner les faveurs de l’industrie ou de récolter des voix, nous rechignons à le faire et nous enfermons dans le silence. L’industrie minière doit faire preuve de bien plus d’initiative et se montrer unifiée dans ses stratégies de communication. Nous devons adopter des façons innovantes d’établir le contact avec la société. Dépassons ce cadre où nous nous félicitons de fournir les matières premières pour des technologies indispensables telles que les ordinateurs portables, les téléphones intelligents et les réseaux de communication. Mettons-les à profit. Nous devons déclarer au monde entier que nous disposons des technologies nécessaires pour construire, exploiter et fermer des mines sans nuire à l’écosystème dans son ensemble. Nous devons montrer que l’exploitation minière génère des emplois et améliore les niveaux de qualification ainsi que la capacité au sein des communautés et des nations. Nous devons rappeler aux gouvernements que les investissements liés à l’exploitation minière multiplient d’une part le montant des taxes et des redevances qui leur sont versées grâce aux encouragements que nous accordons aux entreprises dérivées, et soutiennent d’autre part les entreprises. Nous devons convaincre les générations actuelles et futures qu’une carrière dans l’exploitation minière est une option moderne et intellectuellement complexe qui met à profit le meilleur des technologies innovantes et informatiques, et qu’il s’agit d’un métier valorisant et intéressant. Nous devons nous appliquer à communiquer tout cela. N’attendons plus pour raconter notre histoire. Les résultats vaudront la peine d’avoir investi autant de temps et d’argent et de s’être autant impliqués.
8 | CIM Magazine | Vol. 8, No. 8
the best in new technology
◢ Project control Construction progress modules and the ability to transform a cost curve to a cash flow curve by taking into consideration retention and delays in invoice payments are among the new features of versions 3.3 and 3.4 of ARES’ Prism G2 project management software. “You can go down to very small details of each contract and follow the physical progress,” explains Jean-François d’Entremont, project management software specialist at distributor ProjiContrôle. Also new is the ability to assign milestones at the engineering accounts level. Overall, d’Entremont says, Prism is a highly configurable tool for managing large projects. It integrates data from PC-based scheduling software, such as Primavera 6, and cost estimate tools into unique control accounts. “We have multi-user, multi-project, enterprise-wide software that will allow you to streamline all your cost processing to accelerate the process of issuing project reports,” he says. Courtesy of ARES
Courtesy of Cowan Dynamics
OF TOOLS THE TRADE
Rather than making a custom drawing and waiting one or two days for a manufacturer to send back pricing information, Cowan Dynamics customers can price out spring return pneumatic valve actuators online. This is possible because the company’s new AS Series of actuators is the first in the industry to be available in a set range of dimensions, according to marketing vice-president Jean Behara. “One of our goals with the AS series was to make the feasibility studies for engineers that much easier to do because they have the information at their fingertips now,” says Behara. The standard sizes also reduce manufacturing and ordering costs. Safety was incorporated into the AS design, with the spring contained inside a sealed cylinder to protect workers during servicing. 10 | CIM Magazine | Vol. 8, No. 8
◢ One-stop pit stop Go-Station fuel modules from SEI Industries Ltd. provide a controlled environment to house fuel pumping, filtration, metering and dispensing equipment. “In the past, if you couldn’t afford a custom unit, people would cobble together their own systems, buying parts from a bunch of different vendors and then building something in the field,” says Paul Reichard, remote site division manager. The Go-Station is built from an existing, configurable design. Reichard says the 40-foot insulated freight container can be shipped by land, sea or air more quickly than custom units. An onboard electrical room holds explosion-proof controls, and roll-up doors give access to dispensing units. Fuel tanks are not included; SEI sells collapsible bladder tanks separately. A 20-foot model is in the works.
Courtesy of SEI Industries Ltd.
◢ Standardized spring
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the best in new technology
Courtesy of IPF-Plasson
Courtesy of GFS Corp.
OF TOOLS THE TRADE
◢ Fast fusion For mine sites that use large-diameter pipes to transport water and tailings effluent, IPF-Plasson has created a 30-inch electrofusion pipe coupling that allows for a quick change-out. Unlike carsized butt fusion units, these polyethylene cylinders have built-in wires that weld the coupling to the pipe when electricity is passed through. Executive vice-president Tim Tipton says the electrofusion coupling method allows for quick pipe maintenance in confined spaces. “You can dig down, make a relatively small trench just big enough for the fitting and a little bit of the pipe,” he says. “You can cut out the section of pipe, slide the fitting in, and fuse it together, and you’re back to a full-pressure operating pipeline.” IPF-Plasson is also developing 28- and 32-inch sizes.
◢ Fuel flexibility Fuelled by the gaping price difference between natural gas and diesel, GFS Corp. has introduced the EVO-MT 8300 and 9300 – the first liquefied natural gas (LNG) retrofitting kits for Komatsu electric-drive trucks. By fitting some of their diesel-burning equipment with the LNG kits, customers in regions with wide price differentials will “save a ton of money,” says Kerry Hackney, director of marketing. The EVO system uses diesel as the ignition source but substitutes LNG for diesel at a rate of roughly 50 per cent while the truck is operating. GFS lets customers trial the retrofit on several trucks without putting in full LNG infrastructure immediately, but full commitment has a rapid payback, according to Hackney. He says Alpha Coal, a customer for its earlier Caterpillar fuel retrofits, plans to expand the program after experiencing substantial savings.
Geosoft has updated its Target for ArcGIS (TFA) geological modelling tool to add wire-framing and the ability to work with Esri file formats and threedimensional (3D) geosurface files across both Geosoft and Esri platforms. “There is strong demand for 3D workflows that make geological modelling faster and more effective in the Esri environment,” says Steve Randall, vice-president of marketing. “Geologists working in Esri need to integrate and share results, and using common formats makes collaboration a lot easier.” Users of TFA 4.0 can build a 3D wireframe model by clicking and joining features from two-dimensional section interpretations, creating either closed or open surfaces. Randall says another workflow feature allows users to refresh their drill hole data as new holes are added and quickly integrate them into the existing interpretation. 12 | CIM Magazine | Vol. 8, No. 8
Courtesy of Geosoft
◢ Quick, collaborative modelling
Compiled by Eavan Moore
news | industry at a glance Anglo American tosses Pebble After spending hundreds of millions of dollars on the Pebble project, Anglo American has decided to walk away from the massive copper-gold deposit, located 200 kilometres south of Anchorage, Alaska. While a prefeasibility study is expected later this year, the project has encountered strong opposition from some local environmental and aboriginal groups that have concerns about the project’s potential impacts on water quality and local fish habitat. “Our focus has been to prioritize capital to projects with the highest value and lowest risks within our portfolio, and reduce the capital required to sustain such projects during the preapproval phases of development as part of a more effective, value-driven capital allocation model,” said Mark Cutifani, Anglo American CEO, in a release. The company announced it expects to take a $300-million writedown due to this decision at the end of the year. Anglo American Pebble, a wholly owned subsidiary of London-based Anglo American and a 50 per cent joint venture partner in the Pebble project with Northern Dynasty Minerals, had spent roughly $541 million in exploration work on the proposed open pit project since it became a partner in July 2007. It has also spent around $150 million on environmental and socio-economic work to support its project development plans. With Anglo American’s move, Northern Dynasty, which took over the project in 2001, will now become Pebble’s sole proprietor. Pebble contains a Measured and Indicated Resource of 5.94 billion tonnes, containing 55 billion pounds of copper, 67 million gold ounces and 3.3 billion pounds of molybdenum. Following Anglo American’s exit, Northern Dynasty announced its intentions to move forward with the project and potentially seek a new partner. – Herb Mathisen
Outlook for Rosia Montana permits gets rosier Share prices of TSX-listed Gabriel Resources Ltd. have recovered from their low of 41 cents on September 9, which followed reports that the Romanian Parliament was suspending reviews of draft legislation required for the company’s Rosia Montana project to proceed. The legislation is now under review by a special committee, and Gabriel’s shares hovered above 80 cents in October. Rosia Montana, a world-class gold and silver project, could be one of the biggest gold mines in Europe, with a reported Measured and Indicated Resource of 17.1 million ounces of gold and 81.1 million ounces of silver. Gabriel owns 80 per cent of the project, with the remainder held by a Romanian state-owned enterprise. The company estimates the project will contribute more than US$24 billion to Romania’s gross domestic product (GDP) over its lifetime and generate thousands of jobs. Protests held in Bucharest, in September, opposed the company’s plans to change the topography of the mountainous site, and to use cyanide in the extraction process. Local 14 | CIM Magazine | Vol. 8, No. 8
industry at a glance | news miners have come out in support of the project though, and Prime Minister Victor Ponta said Romania has a duty to benefit from its natural resources. The committee may conduct site visits and invite representatives from interested parties, including NGOs, to participate in the review process. It will provide a recommendation to the Senate, with a final decision expected in early November. – Dinah Zeldin
Gibraltar celebrates completed expansion In September, Taseko’s Gibraltar mine hosted 600 guests for a grand opening of its new standalone concentrator, the cornerstone of the project’s third expansion phase. At a cost of $235 million, the new concentrator – commissioned in January and having started production in April – will increase throughput capacity at the B.C. coppermolybdenum mine by 30,000 short tons per day. As a result of this expansion, Taseko has hired around 150 new employees at the Cariboo-region mine. “Most of these positions are operations and maintenance-[related],” Brian Bergot, investor relations director. “They were hired to operate the new facility as well as the new mining equipment to feed the concentrator.” As part of its $325-million expansion, the company
also spent $90 million on a new fleet of haul trucks and a new mining shovel. Since the new standalone concentrator began operation in April, Taseko has been steadily ramping up production to full capacity and saw a 21 per cent production increase in the second quarter of this year from the previous quarter. “We expect continued increases until we achieve the new design capacity of both concentrators of 85,000 tons per day,” Bergot said. – H.M.
Mick Davis to turn mining’s lemons to lemonade Former Xstrata CEO Mick Davis has secured $1 billion in private funding for a new mining venture, X2 Resources. Davis plans to create a midtier diversified mining and metals group through the acquisition and development of unwanted and orphaned assets. X2 will aim to acquire projects dropped by majors looking to tighten spending in response to low commodity prices, as well as operations abandoned by smaller firms that have run out of money. The company plans to focus on commodities like copper, zinc and nickel that remain in demand. The company received US$500 million each from Noble Group, a Hong
Kong-based global supply chain manager, and Texas Pacific Group, a U.S.based private investment firm. The X2 team includes former Xstrata CFO Trevor Reid and four other former Xstrata executives. Financial advice is being provided by Goldman Sachs. Operations will be based in Johannesburg, South Africa. – D.Z.
Diamond, coal miners take gold The team from N.W.T.’s Diavik diamond mine took top spot in the underground mine rescue competition for the third straight time, while B.C.’s Coal Mountain Operations won on the surface mining side at the Western Region Mine Rescue Competition held in September in Fernie, B.C. In total, 18 mine rescue teams from Alberta, British Columbia, Manitoba, Northwest Territories, Saskatchewan, Yukon and Wyoming, U.S., participated in the biennial event. “Across Canada, all operating mines are required to have mine rescue,” said Al Hoffman, B.C.’s chief inspector of mines. “Local fire department, ambulance and other emergency responders are generally some distance away [from mine sites] and they don’t have the expertise to deal with mining [incidents.]” Mine rescue participants are
November 2013 | 15
Courtesy of B.C. Ministry of Energy and Mines
news | industry at a glance
Cameco’s Key Lake surface mine rescue team, from Saskatchewan, participates in a fire task at the Western Region Mine Rescue Competition in Fernie, B.C., in September.
required to be First Aid-certified and also to have completed – and regularly maintained – necessary mine rescue training. Hoffman said while the competition, which includes written, first aid and search events, provides mine rescue workers with esprit de corps and builds camaraderie amongst and within teams, it also serves more pragmatic purposes. It allows regulators to evaluate each team’s mine rescue skills while also ensuring they comply with recognized standard methodologies and communications methods. For instance, if a mine rescue team was to travel to another operation to provide assistance, it would want to use the same techniques and communications methods as the local mine rescue teams so that they could operate together smoothly. – H.M.
Feds make aboriginal and treaty lands web portal public Aboriginal Affairs and Northern Development Canada (AANDC) has launched its Aboriginal and Treaty Rights Information System (ATRIS), an information resource previously available only to government employees now made public. The web-based map 16 | CIM Magazine | Vol. 8, No. 8
tool lets users research the potential and established land and treaty rights of aboriginal groups across the country. The site informs users of each group’s specific treaty information, local land rights and agreements and progress on land claims negotiations. When companies propose projects, Canada has a duty to consult First Nations, Métis and Inuit land rights holders about the potential developmental effects on their traditional lands and, depending on the circumstances, it may accommodate them if there are impacts to their lands. “ATRIS provides access to information that will help governments, industry and other interested parties to determine which aboriginal groups they may need to consult about their activities across Canada,” said Erica Meekes, AANDC press secretary, although she could not say how often the site would be updated with new information. – H.M.
Renewable energy moves into mining mainstream “At the board level, green energy feels better,” Ross Beaty told the crowd gathered for his keynote speech at September’s Renewable Energy and Mining summit in Toronto. Beaty, chairman of both Pan American Silver and Alterra Power Corp., speaks from experience and his optimism was shared by the small, but focused, group of about 250 conference-goers. From Codelco’s recent forays into solar power to Rio Tinto’s wind project at the Diavik mine, there were plenty of real-world examples to prove what seemed to be the theme of the event: it is not just possible, but profitable, to use renewable energy in many cases. Rob Lydan, director of solar and wind at Hatch, addressed the need for power reliability in his presentation: “If you want to talk to the most conservative group of people you’ve ever met, talk to people in utilities, and these technologies are the same as the ones they use. They are proven.” And while most mining company representatives present were optimistic
towards the future of renewable energy on their sites, the majority expressed a desire to simply purchase energy and not to build utilities themselves. The onus was squarely put on renewable energy proponents to offer power purchase agreements that are competitive with conventional options. – Peter Braul
Reed copper mine starts production Initial production is underway at the Reed copper mine, located 120 kilometres east of Flin Flon, Manitoba. The 1,300-tonne-per-day underground mine, a $72-million Hudbay Minerals and VMS Ventures joint venture, is on time and on budget for full production to start in early 2014. VMS Ventures, which discovered the near-surface deposit and owns 30 per cent, reports that current activities include underground development of the mine, extracting and milling bulk samples, and fine-tuning the mill. The mine will be operated by Hudbay, which holds the remaining 70 per cent stake in the project. According to Scott Brubacher, director of corporate communications at Hudbay, Reed will create 75 jobs and has an estimated life of five years. It also promises to have a limited environmental footprint due to its proximity to the operator’s Flin Flon concentrator. – D.Z.
First bulk carrier traverses Northwest Passage It finally happened. In September, the Danish bulk carrier Nordic Orion, loaded with coal, left Vancouver, and arrived in Pori, Finland, via the Northwest Passage. Seamar Management, the operator of the Nordic Orion, also started shipping iron ore from Europe to China through the Northern Sea Route, in Russia’s Arctic, in 2010. For centuries, explorers have seen the Northwest Passage as a potentially quicker way to transport goods between Asia and Europe. But only relatively recently, due to the longer icefree season, has the Arctic shipping
industry at a glance | news
Officials prevent TB outbreak in Saskatchewan Last summer, the Saskatoon Health Region notified Cameco Corporation that a contract worker at its Cigar Lake
uranium mine in northern Saskatchewan had tested positive for active tuberculosis. The worker had contracted tuberculosis off site. Public health workers began tracing his contacts, starting with the person’s immediate household and continuing with his workplace. The process identified more than 100 people who were potentially exposed but tested nega- Cameco and the Saskatchewan Health Region acted quickly to prevent the spread of tuberculosis after one of the miner’s Cigar Lake contractors tive for tuberculosis. Tuberculosis is a rare tested positive for active tuberculosis last summer. condition in Canada. The active, symptomatic form of the disease Carey Hyndman, senior communihas an average prevalence of 4.7 cases cations specialist at Cameco, said the per 100,000 people. Johnmark company does not screen employees Opondo, medical health officer for the for any infectious diseases before or Saskatoon Health Region, said the after they arrive on site. Its prevention province has had only two prior cases strategy includes employing health of active tuberculosis in mining work- care workers on site and inviting pubplaces in the last 10 to 15 years. lic health officials to do training on Courtesy of Greg Knobloch
corridor seemed a viable route. Since the SS Manhattan, an oil tanker that was retrofitted as an icebreaker, sailed through the Northwest Passage in 1969, the marine route has also been the source of great debate. Canada claims sovereignty over what it calls internal waters of the Canadian Arctic archipelago, but Americans dispute this claim, stating the passage is subject to international shipping rules. Still, it is early days and it remains to be seen whether shippers will increasingly look to Canada’s North, plagued by minimal port, navigational and search-and-rescue infrastructure, as an alternative shipping corridor. – H.M.
November 2013 | 17
news | industry at a glance sleeve-coughing, handwashing and other basic hygiene practices. That cooperation is important, according to Opondo. He cited the H1N1 influenza pandemic of 2009 as an example. “Most mine sites worked with their local public health on strategy,” he said. Mines partnered with local health authorities to plan how to
deal with immunizing workers against the flu or where to secure antiviral drugs should they need them. “Even during the pandemic, I don’t think our mining operations stalled, mainly because they were proactive in planning,” he said. “I think it is really strategic for mines to always work with their local public health when it comes
to trying to plan around prevention of any infectious disease.” – Eavan Moore
Baffinland decides to build Mary River Following the successful negotiation of an impact and benefit agreement with the Qikiqtani Inuit Association on September 6, Baffinland’s brass officially announced it would proceed with construction of its massive open pit Mary River iron ore mine on northeast Baffin Island, Nunavut. Since then, the company has completed its summer sealift, shipping fuel and cargo north with four ships from Valleyfield, Quebec, in order to supply the mine during the winter. Baffinland, 70-per-cent-owned by ArcelorMittal and 30-per-cent-held by Nunavut Iron Ore Holdings, decided last year to build the project in phases, rather than build the entire mine at once, which would include constructing a railway 150 kilometres to the south to connect to a yet-to-be-built port at Steensby Inlet. The Mary River project has a resource of roughly 365 million tonnes of high-grade iron ore, which will be shipped directly to customers in Europe. The company expects to begin production in early 2015. – H.M.
Kinross opens fourth mine in Russia Kinross Gold Corporation’s $350million Dvoinoye underground gold mine, located in Russia’s Chukotka region, began commercial production in October, with CEO Paul Rollinson commending mine staff for reaching the important milestone on time and on budget. Dvoinoye, Kinross’ fourth mine in Russia, is located some 100 kilometres north of its Kupol mine. The mill at Kupol has been expanded to accommodate 3,500 to 4,500 tonnes per day, allowing it to add feed from the Dvoinoye mine that will contribute up to 1,000 tonnes per day. The mine has Proven and Probable Resources of 1.1 million gold ounces, and the company 18 | CIM Magazine | Vol. 8, No. 8
industry at a glance | news expects it to be profitable due to its high-grade ore, averaging 17.8 grams per tonne. The estimated mine life is seven years. According to Rollinson, the moderately sized, low-cost project “reflects the company’s focus on maximizing margins and cash flow.� – D.Z.
Quebec funds Labrador Trough railway study The government of Quebec announced plans to invest $20 million in a prefeasibility study for the construction of a third railway link from the Labrador Trough to the Sept-Iles port. The announcement is good news for iron developers in the region, who were left with limited transport options after CN Rail suspended plans to invest in a project earlier this year. CN’s study was originally shelved due to market volatility and uncertainties around the completion of iron ore
projects in the region. But with Champion Iron Mines Ltd.’s Consolidated Fire Lake North project slated to start production in 2016, and more projects in the pipeline, a rail line will be needed to transport iron ore to ports for export to Asian consumers.
Champion Iron CEO Thomas Larsen said the project will benefit mining companies, local communities and the province. “This type of message will further attract foreign investment that is essential to turn the Labrador Trough into a more cost-efficient iron ore centre,� he said. – D.Z.
MOVING ON UP Cliffs elects new board director Stephen M. Johnson became a director of the board at Cliffs Natural Resources Inc. Johnson, who is chairman and CEO of McDermott International Inc., is a member of the board’s audit committee and the governance and nominating committee. “Steve is a proven leader and brings forth exceptional experience with large international construction projects,� said James Kirsch, Cliffs’ chairman of the board. “Steve’s strategic counsel will be important to our board as we execute future expansion and growth plans.� Past roles included director of project operations at Fluor Corporation, senior vice-president at Washington Group, and president and COO at McDermott International.
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November 2013 | 19
news
Against the current Ambitious Albertan upgrading project hopes local refining will prove attractive
Before North West Redwater Partnership announced in November 2012 its plan to move forward with Phase 1 of its Sturgeon refinery, expected to cost nearly $15 billion, experts in the oil and energy industry said building refineries in Alberta was not economically viable. But the naysayers may have to eat their words as the project – set to become the first oil refinery built in North America in nearly three decades – begins construction. North West Upgrading Inc. will partner with Canadian Natural Resources Ltd. on the refinery, which will be built in three phases. The $5.7-billion first stage, which officially broke ground in September and is scheduled to be completed by late-2016, would see the Construction has begun on Phase 1 of the Sturgeon refinery, illustrated here. It is set to become the first refinery built in refinery convert 50,000 barrels of Canada in nearly 30 years. bitumen per day into low-sulphur diesel. This diesel would help feed Alberta’s need for diesel and it would increase the conversion capacity of its Hughes cited NOVA Chemicals’ Jofalso allow customers to send the product. “The structure allows for parfre, Alberta facility, which processes natupgraded product off to international ural gas from the province, as an ticipation without any reduction in our markets. By its third stage, the refinery ability to stay focused on developing example of maximizing opportunities in Alberta. It is now one of the largest ethwill have the capacity to convert our vast resource potential,” he said. ylene and polyethylene production 150,000 barrels of bitumen per day. The Alberta government, which plants in the world. “The long-term factors were in receives bitumen from oil sands operaThe Sturgeon refinery is more than favour of doing it here [rather] than tions as royalties, will also play a major just an opportunity to supply fuel to the part in the project. The government doing it on the Gulf Coast,” said Ian market, according to MacGregor. “It’s a MacGregor, chairman of North West would provide at least 40,000 barrels of chance to bring good-paying jobs to Upgrading, adding it will take about a bitumen per day for the next 30 years to thousands of people,” he said. Curdecade to complete all three stages of be upgraded. Estimates are the governrently, around 1,000 workers are on site the refinery. “Once people see it done, ment will bring in around $500 million and, at the peak of construction, nearly they’re going to wonder ‘Why aren’t we annually on top of what it currently 8,000 workers are expected to be makes in royalties (the province raked doing this?’” The diesel produced at the employed. in $4.5 billion in royalties in 2011-12) refinery, located north of Edmonton, MacGregor added that Sturgeon has over the next three decades. will be a mere 12 days from Asian maralso taken the environment into considAlberta Energy Minister Ken Hughes kets that rely heavily on imported fuels. eration with its design: “This is the first India’s liquid fuel consumption, for notes the government has “a very real refinery in the world that incorporates instance, was 42 per cent diesel in interest in seeing as much value added CO2 capture into the initial design. The to our natural resources as we can.” Get2012. facility will capture 1.2 million tonnes ting into the refining business “is a Steve Laut, president of Canadian of CO2 per year per phase, which will chance to create more value for Alberta Natural Resources, which will provide be sold for use in enhanced oil recovery and Canada than if we just shipped the bitumen to the refinery, said the project CIM before being sequestered.” raw bitumen out of the country.” gives the company the opportunity to 20 | CIM Magazine | Vol. 8, No. 8
Courtesy of North West Redwater Partnership
by Andrew Livingstone
news
Regulators to join forces Collaborative Canadian securities regulator could help companies put more money into projects by Anna Reitman Mining and investment groups are optimistic that Canada’s recently announced cooperative regulatory regime will make accessing capital markets more efficient for companies. The framework agreement between British Columbia, Ontario, and the Government of Canada envisions “a common regulator administering a single set of regulations designed to protect investors, support efficient capital markets and manage systemic risk,” according to Canada’s Finance Department. Currently, an inter-jurisdictional passport system allows listed companies automatic access to capital markets in every other province and territory, except Ontario, which
accounts for about half of all Canadian securities’ market value and 80 per cent of market activity. Access to Ontario markets for non-Ontarianlisted companies must instead be approved by the Ontario Securities Commission (OSC). In general, miners wanting to raise money from Ontario have to become reporting issuers locally and in Ontario, which is the priciest jurisdiction in Canada. Moreover, prospectuses are examined by two regulators for approvals. Gordon Keep, CEO at Fiore Management and Advisory Corp. and member of the working group that advised the B.C. finance minister during negotiations, said the existing passport system is efficient but Ontario’s refusal to join is a problem. Junior miners “have been hamstrung because most of the big funds are out of Ontario. The beauty of this system, if it is adhered to as per the framework agreement, is that Ontario no longer stands by NEED GLOBAL MINING SOLUTIONS? itself,” he said. JUST ASK GOLDER. The regulator will be headquartered in Toronto Remote sites, extreme weather and complex geology are some of the and led by an challenges in mining projects. Add to that, the social, environmental and expert board of regulatory processes faced by mining companies. Golder Associates’ integrated consulting, design, and construction solutions provide project independent direcstakeholders with the information to tackle challenges at every stage of tors with oversight their mining projects, not just for today but for the future. from a council of ministers from all Engineering Earth’s Development, Preserving Earth’s Integrity. participating jurisdictions. It will be self-funded by a single set of fees Canada + 800 414-8314 solutions@golder.com and will have an www.golder.com office in each participating province.
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PDAC is encouraged by the move and will look to contribute to the design and implementation of any future system as it takes shape. Nadim Kara, senior program director at PDAC, said there is a major opportunity for the new regulator to select the best of what is currently working across Canada. Based on discussions with PDAC members, he said there is widespread support for how British Columbia deals with prospectus exemptions, for example. “The B.C. model has some important features that help facilitate capital raising,” Kara said. “Will the new regime incorporate these or adopt the more conservative OSC model? That is what we would like to see more clarity on.” Regulatory changes to Canada’s capital markets cannot come soon enough, he added. PDAC research shows that fundraising for many junior companies is dire. With more than 75 per cent of TSXV-listed companies trading at or below 10 cents a share, some are engaged in desperation financing, sometimes for as little as $50,000. “Companies are financing just to pay the auditors,” Kara said. “There has got to be a creative way to help companies put more money into the ground instead of into regulatory compliance.” Ian Russell, president and CEO of the Investment Industry Association of Canada (IIAC), believes that the cooperative deal is attractive on several fronts, including that it respects provincial jurisdictions and strengthens enforcement of white-collar crime. Specific to the mining industry, one set of rules in the form of a uniform securities act is increasingly important in an environment of private placement financings, and where shareholders are solicited from across the country. “Transactions, be they financing transactions or restructurings, will move more smoothly and cost-effectively from
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a regulatory standpoint,” said Russell, though he is not optimistic about any cost alleviations associated with regulatory fees, at least in the short term. He acknowledged concerns from within the mining industry that Toronto will inevitably draw in the expertise and employment from other provinces, but pointed out that Vancouver has remained a junior mining hot spot despite the venture stock exchange being headquartered in Toronto. B.C. Finance Minister Michael de Jong explained that, as designed, the framework will have a permanent deputy chief regulator in Vancouver, who will, along with the rest of the national management team, have a strong, leading role in the development of national policies.
“Day-to-day decisions affecting B.C. market participants will continue to be made in British Columbia,” he said. “This cooperative approach will not only benefit the B.C. securities industry, but it will also benefit Canada’s securities industry by bringing our expertise and regional perspective to the rest of the country through the nationally integrated executive management team.” The move towards a national regulator in Canada has a history punctuated by legal disputes, fought particularly hard by Alberta, Quebec, and British Columbia, in the past. Among other objections to the proposed regulator, Quebec Finance Minister Nicolas Marceau pointed out the potential disruption to the existing passport system, and Alberta Finance Minister Doug
Horner has expressed concerns about how the national regulator might affect the future of the province’s regional oil and gas market. The fact that British Columbia, which represents between 15 and 20 per cent of Canadian securities’ market value, is on board now may prove significant for the agreement’s success. Federal Finance Minister Joe Flaherty has extended an invitation to all provinces and territories, and if other jurisdictions do join, Keep said Ontario has to prove it is not demanding a Toronto-controlled solution. “If we can get OSC to start acting as if it is part of the passport system, that gives other provinces comfort that it is willing to have it be a truly national dialogue,” he said. CIM
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November 2013 | 23
news
At home away from home Study finds increased communications and privacy important to remote workers by Dave Kaufman Courtesy of Raglan Mine
A recently released union committees, respecAustralian study has tively called ‘comité bonne pegged privacy and access entente’ and ‘comité organto communications as two ization du travail,’ that of the most important faceach meet eight times per tors in the long-term hapyear to discuss issues that piness of remote mine come up at the mine. The mine’s living faciliworkers. ties have been the focus of Philipp Kirsch, one of many initiatives to ensure the contributors to the the happiness of Raglan’s University of Queensfly-in, fly-out staff. For land’s Centre for Social instance, the only people Responsibility in Mining who share rooms at their study, said this data sheds living facilities are couples. light on how to improve “We have the capacity to the experience for fly-in, house 800 people,” said fly-out employees. “The Lucas. “We don’t force really key take-home Employee retention is crucial for remote operations like Glencore’s Raglan nickel mine in Quebec. An Australian survey of fly-in, fly-out employees has come up with anyone to share rooms.” message is that people northern suggestions for mine management that improve camp life and accommodations, with the aim Raglan has a full-sized want to be able to be in of retaining employees. The survey is now being introduced in Canada. gym for volleyball, basketcommunication,” said Kirsch. “When they’re not at work they ball, floor hockey and other sports, as lifestyle has a negative effect on their want to be able to communicate with home and family life. well as training facilities with aerobic their friends and families whenever machines, treadmills and full sets of One of the findings that surprised they feel like it.” Kirsch most was that 44 per cent of weights. He added that it was very Kirsch stressed the importance of respondents planned to change jobs in important to “have Wi-Fi throughout the what he calls “the 4 Ps”: privacy, percomplex, so people can stay connected the next 12 months, with a “desire for sonal space, permanent communica- better pay, greater work-life balance, and with families down south.” Once a month, Raglan will even fly in a cometion and peace. “You can have your career advancement.” dian, humorist, or band to give workers personal space in a shared room, but “These people are well paid, they a sense of normalcy while they are so far these people really don’t want to share essentially are quite satisfied in their a room,” he said. jobs, but some of them still intend to try from their homes. Designing improvements into camps The idea for the study came about to find something else,” said Kirsch. and accommodations that enhance To improve the living experience at when an Australian mining company work ers’ personal space, communicaGlencore’s Raglan nickel mine in northwanted to know if there was any relation channels and privacy are imporern Quebec, Marc Lucas, the operation’s tionship between the quality of its tant, found the authors of the accommodations and its employees’ HR manager, said the mine has made a Australian study. Mine management commitment to stay at their jobs. Long- point of seeking feedback from workers could also be more active in raising distance commuting employees, Kirsch about camp life rather than waiting for it. awareness of potential problems associ“We have had suggestion boxes in the explained, are non-resident workers ated with the long-distance commuting who travel some distance to work and past but now actively encourage an open lifestyle. The study suggests managesleep in temporary accommodations dialogue with HR or through the superment develop a physical and mental visory chain of command,” he said, during their rotation. health baseline in initial fitness assessadding a joint health and safety commitThe majority of the nearly 300 fly-in, ments of remote workers against which tee tackles problems before they become fly-out workers surveyed said that, overongoing physical and mental health can significant risks or irritants. He explained all, they were happy with the remote be measured as well. that management now holds formal and working lifestyle, and 75 per cent The team is conducting a similar informal meetings with both staff and reported they felt they were at a good or survey in Canada: https://www.survey unionized employees to hear from site very good level of mental and physical CIM monkey.com/s/FIFOinCANADA. health. But 60 per cent said their work workers. It has also formed staff and 24 | CIM Magazine | Vol. 8, No. 8
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M A C E C O N O M I C C O M M E N TA R Y
Focused spending on mining innovation required BY PIERRE GRATTON
anada’s productivity performance as a country is worsening due to a struggle to innovate, and the mining industry is no exception in this regard. This is made more acute in the mining sector by increasing regulatory requirements, rising energy costs, and deeper, lower grade and remotely located reserves, and it needs to be addressed. Further support to the Canada Mining Innovation Council (CMIC) – the industry’s response to this challenge – would help reverse this trend. Innovation matters because countries that do it well are surpassing Canada on performance measures like income per capita and productivity, and with the quality of their social programs. A recent Deloitte report indicates that the average Canadian worker contributes US$47.66 in gross domestic product (GDP) per hour compared to US$60.77 per hour in the United States. This is a large gap with significant economic potential lost. The Organisation for Economic Co-operation and Development has indicated in a report that lagging productivity is one
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of Canada’s most significant economic hurdles. Specifically, the study explains that Canada’s multifactor productivity (MFP) has been stagnant for decades, and has been declining since 2002. MFP infers technological advancement by holding that innovation improvements account for the increase in output from a fixed level of labour and capital inputs, which enhances economic growth. Since 1980, the United States has improved its MFP by 40 per cent, while Canada’s has decreased by four per cent. Using 21 innovation indicators, the Conference Board of Canada ranks Canada 13th out of 16 peer countries. Despite notable Canadian mining innovations, our mining industry’s MFP fell throughout the 2000s, alongside drops to both labour and capital productivity. According to a 2009 report by the Centre for the Study of Living Standards, U.S. mining labour productivity has been higher than Canadian worker productivity since 1995. Innovation matters to the Canadian mining industry because technical progress and productivity are key competitiveness
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factors. By its very definition, the mining industry faces environmental and technical challenges that require innovative solutions. Canada ranks above its peer countries on overall public R&D spending as a percentage of GDP, but it does not necessarily follow that spending more on R&D will make the difference. Spending that money differently may stimulate an increase in business-related investment in research, development and innovation, an area where Canada underperforms compared to other countries. CMIC was formed with the aim of investing mining industry R&D dollars more strategically. A non-profit organization comprised of a unique partnership between industry, academia and government, CMIC is Canada’s national mining innovation ecosystem, designed to enhance industry’s global competitiveness through collaboration and alignment of resources in education, research, innovation and commercialization. The council represents the mining industry’s recognition for a need to compete more intelligently in the global market. Many of the innovation avenues the organization was mandated to follow closely reflect focus areas of the federal government’s 2012 and 2013 Economic Action Plans. These include support for responsible resource development, Canadian small businesses as innovation drivers, and the need to create a larger skilled and professional domestic labour force that includes all Canadians. In 2011, Canadian mining and metals companies invested $590 million in R&D, surpassing various sectors such as motor vehicles and parts, machinery, and wood products and paper. The industry also employs over 6,000 people in R&D, more than the aerospace and pharmaceutical sectors, both of which receive extensive financial and policy support from government. Today, the mining sector is a primary contributor to government coffers, featuring multi-billion dollar investments, around which national governments are building strategic policies to attract global investment. Based on need, and by embracing outside-the-box thinking, the Canadian mining industry has reshaped its approach to innovation and created a new institution to deliver on that vision. The 2014 federal budget should include a funding commitment to enable Canada’s only open innovation mining ecosystem to help deliver new national programs focused on research, product and process development and commercialization and innovation crucial to industry’s competitiveness. Federal science and technology spending for the fiscal year 2013-14 is anticipated to be around $10.5 billion. The major funding agencies for research and innovation (NSERC, CIHR, SSHRC and CFI) have a combined budget of roughly $4 billion. CMIC’s request accounts for a fraction of Ottawa’s investment in research and innovation and could easily be achieved by redirecting existing funds, thus presenting a real opportunity to enhance innovation in a key Canadian sector. CIM
Pierre Gratton is president and CEO of The Mining Association of Canada.
November 2013 | 27
EYE ON BUSINESS
Approaches to lowering mining’s cost curve BY THOMAS STRUTTMANN
etween 2009 and 2012, mining companies increased their capital spending from $58 billion to more than $120 billion. Yet, return on capital, having peaked in 2006 at 23 per cent, dwindled during this period, falling to less than eight per cent by 2012. This decline can be attributed to a range of factors, including lower commodity prices, record capital spending, project cost overruns and a focus on growth. Unfortunately, the outcome is many mining companies have been left with large writedowns, increased debt-to-equity ratios, and lowered returns. To improve their margins, miners have embarked on numerous cost-cutting strategies, including project cancellations, reduced exploration budgets, deferred capital expenditures and staff layoffs. These actions may be effective in the short term but they do not fix the underlying problems facing the business today. Rather than relying on quick fixes, management should focus on effectively organizing their companies to reverse the decline of their margins and position themselves to capture the inevitable uptick in future demand. Cutting costs can be much better achieved through a systematic evaluation of a company’s
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business strategy, operational plan and operating environment, which are the underlying forces that determine its margins.
Business strategy A good business strategy is the foundation of any profitable organization, yet it is widely overlooked in the mining industry because management is often too focused on dealing with short-term problems. Developing an effective strategy begins with a rigorous review of a range of value drivers, such as grade and strip ratio, as well as price, costs and productivity. All of these variables may shift slightly or radically over time. An effective strategy will predict several scenarios, providing managers with insights on operational changes and enabling them to explore options for achieving margin and growth goals. For example, at the simplest level, if grades are declining while all other drivers remain constant, then some variable must be adjusted to maintain margins. It is management’s job to determine whether a variable can be tweaked to maintain margins or if a deeper examination of the company’s operating model is in order.
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28 | CIM Magazine | Vol. 8, No. 8
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Operational plan Even when a company has a business strategy in place, management often falters when it comes to translating it into an operational plan. Ideally, managers should be able to understand with a level of certainty what the company will face in the next six months. However, many operate with a six-week horizon. For most mines this is simply not enough time to make changes to achieve margin goals. To make accurate projections for a comprehensive operational plan, a high level of detail about financial, operational and geological data is required. When combined with other known data, such as productivity, costs, pricing, sales contracts and budgets, mining engineers can perform situational modelling. Through modelling, engineers can adjust a wide range of variables and simulate forecasts with a high degree of accuracy, thus gaining the necessary insight to make informed production decisions. Unfortunately, few mining companies have accurate operational and cost data. As a result, it is impossible to determine the factors that are causing variation, which is ultimately the most crucial element of reducing costs.
Operating environment On a day-to-day basis, the operating environment is constantly impacted by numerous factors that can bog down operations managers with details and prevent them from making solid production decisions. Processes like drilling, blasting, loading, hauling, crushing, grinding and floatation are all subject to variation. This situation is worsened when it is combined with unreliable assets, which are the foundation of the operating environment and one of the main sources of variation in overall production throughput. Too often, managers make decisions without keeping the bigger picture in mind. Instead of addressing variation, companies will implement a range of inefficient strategies such as increasing inventory through the production chain, raising capital expenditures by acquiring more assets, and relying on costly last-minute airfreight for repairs. Implementing asset monitoring technology is a key process that companies can put in place to control the operating environment. Predictive modelling can reduce asset failure rates and increase reliability. Another step toward better processes is designing an effective asset life cycle. When technology is combined with rigorous operational planning, mines can prioritize activities, which helps them minimize variation and achieve margin objectives. To improve margins, taking the long view is not only smart but essential to the industry’s future. A mining company is a complex and unique matrix of moving pieces. Without proper attention to every working element, it will inevitably drift off course into decline. CIM
A MINE OF SOLUTIONS Technical, e econo economic and feasibility studies NI 43-101 technical reports Mine planning, design and simulation Plant design and simulation Project management EPCM projects Commissioning assistance Power generation Power transmission and distribution Process optimization and control
Thomas Struttmann is CEO of Struttmann Consulting. With more than 30 years of industry experience, he has helped reduce his clients’ marginal costs by more than $700 million. Tom@Struttmann.com
November 2013 | 29
HR OUTLOOK
Why aren’t you meeting the HR components of your IBAs? BY MELANIE STURK
mpact and benefit agreements (IBAs) and other partnership agreements play an important role in establishing the ground rules that detail how a mining employer and aboriginal community will work together over the duration of a mining project. The creation of an agreement is a significant undertaking involving lengthy consultations and often a steep learning curve on both sides. Despite the mutual benefits of a local workforce, many partnerships still struggle to meet the HR components of their agreements. Why? To answer this question, MiHR conducted a research project examining the lessons learned from existing IBAs in Canada. The foundation for establishing a solid partnership agreement is the commitment to building and maintaining trust between the employer and the community through respectful communication. First contact should be made as early as possible – no later than after the company has selected the land during the early stages of prospecting and exploration – and preferably before entry on traditional territory. The importance of this approach was reinforced
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recently by the Supreme Court of Canada’s decision not to challenge a Yukon court’s ruling that the ‘free-entry’ claim staking process is counter to the Crown’s duty to consult with Aboriginal Peoples. Communicating and building trust cannot be a shortcut, and employers will struggle if they do not take the necessary time to understand cultural protocols. A simple move like sending in a community liaison instead of a senior executive to meet community leaders can cause offense and tarnish the relationship from the outset. Early dialogue and spending time in the community is likely to result in a more effectively negotiated partnership agreement. Haphazard decisions on training and hiring goals can also lead to disappointing results for everyone involved. Although the general intent of agreements is to create significant employment and training opportunities for as many community members as possible, goals must be realistic so that success metrics are fair. While an ambitious hiring goal is admirable, if a company is not aware of the education, housing or health challenges that may exist within the com-
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columns munity, such a goal will be hard to achieve. To establish realistic HR objectives, the company can share information on careers in mining and the mining cycle with the community – either directly or through a third party. The community also plays a crucial role in helping assess the skills makeup and career interests of its members. One mining professional in human resources told me that negotiating is easy, but implementation is the hard part. After time and resources have been invested in the training and hiring of community members, a retention and inclusion strategy is essential to minimize turnover and maintain the local workforce. As aboriginal employees start to learn about mine life, non-aboriginal co-workers need to learn about local cultures and traditions to develop a truly inclusive workspace. For example, an aboriginal employee may not speak to her supervisor about her interest in an advancement opportunity because her cultural background may frown upon bragging or putting one’s self above the group. Through understanding the cultural context that influences behaviours, the employer can instead recognize the individual’s merits, ask the employee if she is interested in advancement and assist with the employee’s progression. This process can be enhanced by creating a role for a trusted community liaison officer who acts as a bridge between the community and the employer and, additionally, can ensure
problems are managed before they escalate. Some mining employers have implemented thoughtful and effective inclusion and retention methods. Examples include translating company publications into aboriginal languages and introducing flexible schedules to allow time for the individuals to continue to support their community and take part in traditional activities. In an ideal scenario, companies will also provide the community with skills that are transferrable after the mine closes, or involve the creation of support services that are owned and managed by the community. The result of any partnership should be a win-win, but it does require time, resources and compromise. Early, open communication and spending time together builds the critical element of trust and often will set the tone for the duration of this working relationship. Companies and communities embarking on this process for the first time are fortunate in that they can learn from those who have walked the path before them. CIM
Melanie Sturk is the director of attraction, retention and transition at the Mining Industry Human Resources Council (MiHR), the national HR council for Canada’s minerals and metals industry.
November 2013 | 31
FINANCE
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CIM developing production cost reporting best practices BY GRAHAM CLOW
n January 1999, the Toronto Stock Exchange, Ontario Secu- industry. It is the intention that this review will lead to the rities Commission, and Canadian Securities Administrators establishment of standard practices for issuers in reporting (CSA), as a group, released Mining Standards Task Force – both gross and unit costs of production, thereby helping to “Setting New Standards.” This report and its recommendations clarify for investors current and potential profitability risks and gave rise to what became the NI 43-101 Standards for Disclo- opportunities. This sort of standardization of practices is simsure that set out requirements for dissemination of technical ilar to the CIM definitions developed and implemented for and cost information by mining reporting issuers on Canadian mineral resource and mineral reserve disclosure a number of stock exchanges. One of the recommendations in the report years ago. These definitions, as part of NI 43-101, have was to research the possibility of standardizing production cost become a worldwide standard. reporting for various commodities, and that CIM participate in this study. Historically, producers and developers The variations in reporting methodologies have have used two standards for reporting led to some confusion and misunderstanding unit costs of production. Those working with precious metals have relied on the on the part of investors and other interested parties Gold Institute standards that designate: who struggle to determine the actual costs of a cash operating costs as direct production producing mine or development project. costs less byproduct credits; total cash costs as cash operating costs plus royalties and production-based taxes; and total production costs as total cash costs plus depreciation, A CIM committee was reconstituted earlier this year to predepletion/amortization, and closure/reclamation. For base met- pare recommendations to CIM Council for the establishment als, the guidelines developed by consultancy firm Brook Hunt of best practices for cost reporting. It is expected that, once are generally considered the standard. They label net direct cash adopted by CIM as a best practice, CSA will consider whether costs (C1) essentially the same as the Gold Institute’s cash oper- the cost reporting best practices should be incorporated into ating costs; determine production costs (C2) as C1, plus depre- NI 43-101 Standards for Disclosure. ciation, depletion/amortization, and production based taxes; In June 2013, the World Gold Council published its “Guidand determine the fully allocated cost (C3) as the sum of C2, ance on Non-GAAP Metrics – All-In Sustaining Costs and Allcorporate costs, royalties and financing charges. In Costs.” This guidance is intended to provide a template for Under these standards, there has been a wide range of gold producers to voluntarily report standardized costs. reporting bases by producers and developers. In general, com- Importantly, the component costs of these two measures will panies have reported Gold Institute cash operating costs and be directly reconcilable to a company’s financial statement. Brook Hunt C1, with some reporting Gold Institute total cash The CIM committee is in the process of reviewing this for costs or Brook Hunt C2. The variations in reporting method- possible recommendation as best practice for precious metals ologies have led to some confusion and misunderstanding on producers and developers. For other producers and developthe part of investors and other interested parties who struggle ers, the committee will prepare a similar guidance for considto determine the actual costs of a producing mine or develop- eration as best practice. ment project. The process for the committee will be to prepare a draft Recent reporting of results by producers, particularly some report recommending best practices. This will be distributed precious metals producers, has shown that in many cases com- to CFOs of Canadian mining reporting issuers for review and panies report only Gold Insitute cash operating costs or Brook comment. Following that, a second draft will be submitted to Hunt C1 and do not include the related capital costs to con- CIM for a period of general comment by members and other struct a mine and sustain operation through equipment interested parties. It is intended that the cost reporting best replacement and ongoing underground development or strip- practices be finalized in 2014. CIM ping, and closure costs. As a result, while they may look like low costs producers, they struggle to generate cash due to high Graham Clow is chairman and principal mining engineer with RPA. He has capital investment requirements. more than 40 years’ experience in all aspects of the life cycle of mining and companies. In addition to providing strategy and direction for In consultation with and at the urging of CSA, CIM is lead- properties RPA, he leads the company’s due diligence and M&A practice, assessing and ing a review of production cost reporting methods in the advising on projects worldwide.
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The iron ore pricing roller coaster BY PHILLIP CROWSON
ver the last decade, iron ore miners have ramped up capacity to fill increasing steel production needs in Asia. During this time, they have benefited from higher iron ore prices due to both demand shortages and a more recent move to spot-related iron ore pricing. Having now addressed the global demand gap though, miners may soon see some negotiating power return to steel producers. In 2011, the world’s 10 largest non-fuel mineral mines – and 16 of the top 20 – produced iron ore, accounting for 16.4 per cent of the mining industry’s total sales, according to the latest available figures from the Raw Materials Group. Ten years earlier, however, there were only eight iron ore mines in the top 20, collectively supplying 3.8 per cent of that year’s value of sales. This marked rise in the iron ore producers’ share of the mining industry’s turnover was in part a natural consequence of the surge in Chinese steel production and demand for iron ore. Global output of iron ore more than doubled over the decade (from 934 Mt to 1,898 Mt). Many other commodities saw far more sedate rises during this period.
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Overall, rising volumes were accompanied by sharp price increases. In 2011, copper and gold prices were 5.6 times and 5.8 times higher, respectively, than in 2001, but the price of internationally traded iron ore was 12.9 times as high as in 2001. Iron ore producers can legitimately claim that prices had been depressed for many years prior to 2001, and had been falling in real terms, during a period when demand was stagnant or rising very slowly. Once demand started increasing more rapidly, and existing capacity became inadequate, producers needed – and received – substantially higher prices to encourage investment in additional capacity, both at existing mines and at greenfield sites. Up to the financial crisis in 2008, steel and iron ore prices kept broadly in step. Since then, they have followed different paths. Steel prices have fallen back from their 2008 peak. The London Metal Exchange’s cash settlement price for steel billet, admittedly only a rough guide to steel prices, has this year averaged only one third of its level reported in the second half of 2008. Iron ore prices, while volatile, remain substantially
columns higher. Spot iron ore prices peaked in early 2011, some three times above their 2008 average. Today, iron ore prices are roughly 20 per cent below their 2011 peak, but that is still more than double their 2008 average. Prior to 2008, prices for internationally traded iron ore were negotiated bilaterally between leading shippers and steel mills. Once one contract for the following year’s price had been agreed upon, other contracts were quickly settled on roughly similar terms. With the rapid rise in Chinese demand and a growing spread between contractual prices and spot delivery prices, iron ore producers seized the opportunity of the sellers’ market to move to spot-related pricing. This boosted their short-term profits, improving shareholders fortunes and no doubt management bonuses. Today, most sales are at prices closely linked to prevailing spot quotations. In the tight iron ore market conditions of 2008, steel mills were powerless to resist the move to spot-related pricing, however much they disliked it. Yet apart from minor uses, iron ore’s only market is in steel production. The longer-term health of the suppliers is inextricably linked with that of the steel industry. Will the balance of power remain in the iron ore suppliers’ favour while its customer industry remains weak? Since the benchmark system collapsed, spot prices have probably been much higher than those that would have been bilaterally
negotiated. That does not mean that they always will be, although a return to the old pricing system is unlikely. The rise in iron ore prices has not only greatly boosted the profits of the major shippers but it has also encouraged new entrants and a strong continuing increase in productive capacity. Once new capacity has been installed, the prices needed to keep that capacity operating are much lower than the prices needed to tempt in new production. Looking ahead, the majors should continue to earn reasonable-to-good profits, even with much lower prices. Some of the newer entrants may be squeezed but they are unlikely to close down – or at least not unless prices fall very low for an extended period. New capacity will be delayed, but then the dynamic of so-called cost reduction may take over, as companies expand to spread fixed costs so that unit costs go down and profits go up. One seductive danger is that the low-cost producers will continue producing flat out in the expectation of making profits, no matter what happens to total demand. The trouble is that such a view often prolongs the agony of weak markets for all concerned. CIM Phillip Crowson is a former chief economist of Rio Tinto, chairman of the European Copper Institute and president of the Mining Association of the United Kingdom. He has written several books and many published papers and articles on various aspects of the mineral industries.
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Heat seeking CSIRO technology aims to convert slag heat into useable energy By Alexandra Lopez-Pacheco
Courtesy of CSIRO
obviously a step forward, both environmentally and economically, but all that thermal energy in the hot slag is still lost with wet granulation, along with the fresh water used. Some 1,000 to 1,500 litres of water evaporate for each tonne of slag treated. The process can also be potentially hazardous, says Jahanshahi: “There’s the potential risk of explosions with wet granulation when the slag contains molten metals such as iron or mattes.”
The holy grail of efficiency
For every tonne of molten blast furnace slag cooled, 1.8 gigajoules of heat is lost.
esearchers at the sustainable metal production group in Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) are getting close to commercializing a dry granulation process that turns hot slag into a money-making product. The hundreds of millions of tonnes of molten slag created during steelmaking every year are currently a byproduct the industry has to live with, with limited benefits. “There are over a billion tonnes of steel produced in the world each year and that creates 200 to 300 million tonnes of slag, which is an enormous source of heat that is not being recovered,” says Sharif Jahanshahi, theme leader of sustainable metal production at CSIRO. Historically, the process for treating 1,500 C molten slag was simply to let it air-cool, but that left tonnes of solidified slag waste to be broken up and hauled away. It also wasted all that heat. In fact, according to CSIRO researchers, about 1.8 gigajoules of heat is lost for every tonne of molten blast furnace slag cooled. To put this waste in perspective, the global total of energy wasted during this step is roughly equivalent to one fifth of Canada’s electricity generation sector. The most common approach to cooling slag these days is to use water to both cool and granulate it. This way, the slag is turned into glassy granules that can be used as a substitute for Portland cement and for bringing in some revenues ($25 to $35 per tonne in Australia, for example). Morphing slag from disposing of it as waste into a product that can be sold is
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Since the 1980s, various researchers have attempted to develop a dry granulation process by breaking up molten slag into small droplets using mechanical means like air blasting, rotary drums or spinning discs, followed by solidifying the slag droplets and at the same time recovering the high-grade heat with air. But there were always snags, and none have come close to commercialization to date. In 2002, a team at CSIRO decided to take up the challenge. They initially analyzed and evaluated previously available research and then concluded the method closest to solving this problem was dry granulation using a spinning disc or cup. This method used the least amount of energy to atomize molten slag and provided a more efficient and controlled process. But previous attempts to use a spinning disc were hindered by significant design and operating issues such as the need to suppress slag wool and handle hot droplets and granules. “Dry granulation with a spinning disc is a very fast process that breaks up the slag to form fine droplets using centrifugal forces,” says Dongsheng Xie, project leader at CSIRO. “The slag spreads and breaks up in a fraction of a second. You want to produce small slag droplets for fast and efficient heat exchange, so that you can quench them very fast to produce the glassy product that can be used as a substitute for cement.” But because the process occurs very quickly, things can also go awry quickly. “Even if you produce droplets, how you handle them and recover the heat quickly is not a simple task.” says Xie. By 2006, his team had made major breakthroughs to enable them to design a process to achieve both dry granulation and heat recovery at the same time. The process they developed is based on a two-step operation. The first involves putting the molten slag in a dry granulator that atomizes it into
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small droplets. These are quenched with air rapidly and solidified. They are then processed through a moving bed countercurrent heat exchanger where they are further cooled almost to ambient temperature and the heat is captured. A key component to the process’s success is the precise use of air in both units. It has to be as minimal as possible in order to maximize the temperature of the output air stream.
Partners now crucial for success To prove their process, the CSIRO researchers built a pilot plant with a 1.2-metre diameter granulator that processed up to 0.6 tonnes of slag per hour in 2007. Armed with good results from these tests, in 2009 they scaled it up to a semiindustrial scale plant that could process slags at up to six tonnes per hour. “The next step is to take it to industry-scale so we can process 20 to 60 tonnes per hour and demonstrate the process at a blast furnace site. That will confirm the performance and from there we can proceed to commercialization. In reality, this will likely take about two or three years,” says Xie. Terry Norgate, a chemical engineer who was working as part of the project team before he recently retired, has carried out a detailed economic assessment of dry granulation’s benefits, which found that both the capital and operating cost of dry granulation will likely be roughly half of those for wet
granulation, while also reducing greenhouse gas emissions, water use and waste. Based on Norgate’s estimate, the operating cost of the dry granulation process would be about $4.74 per tonne of slag for a 300,000-tonne per year slag plant, with a capital cost of about $9 million, excluding any capital costs associated with use of the recovered waste heat. CSIRO is currently in confidential negotiations with potential industry partners to scale up and conduct industrial trials at a blast furnace site. “The next stage is critical,” says Xie. “We have to find a partner who can design and build a dry granulation plant and manage all the on-site operational challenges. With the process itself we need to demonstrate the design and make sure all the material processes will continue. We are limited in the lab tests by the amount of slag available, but in the next stage we will have [the] opportunity to test our design under continuous operation. Still, from laboratory to industry, there can be a lot of variations and fluctuations, and we will be looking to work closely with our industrial partners to overcome these challenges.” Should they succeed, those hundreds of millions of tonnes of molten slag around the globe could end up being part of a cost-effective solution that helps produce heat and power and builds foundations for buildings in a greener world, while generating revenues: a win-win-win. CIM
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Pelletization partners Vale and universities seek to perfect ball mill optimization
Courtesy of Patrícia Faria
By Alexandra Lopez-Pacheco
that Patrícia combined the right tools for such an important venture: great personal drive, high intellectual capacity and very good people skills. This later proved to be the key ingredients to successfully manage supervisors in two different continents (which she has so far), as well as to negotiate support for her test work, both online and offline, in the pelletizing plant,” says Tavares. “Pelletizing is becoming increasingly important,” explains Tavares about the relevance of Faria’s research. “Great attention is often devoted in a pelletizing plant to ensuring product quality by controlling and optimizing the formation of green pellets and their induration. In the pellet feed preparation, attention is mostly focused on guaranteeing that grinding generates a consistent product. HowPatrícia Faria is a Vale employee who has been conducting research at the University of Utah as part of a master's ever, it has been identified that, very degree focused on ball mill optimization. often, such milling circuits are not optimized, thus missing out on a very good opportunity to reduce costs and increase producimes are tight for the minerals industry, and optimiztion capacity.” ing equipment to increase efficiency and save energy is Faria set out to identify the best means to optimize an existbecoming central to doing more with less. So says Luís ing ball mill in order to save energy, increase production and Marcelo Tavares, associate professor of mining and improve iron ore pellet quality. She spent much of last year in metallurgy at the Universidade Federal do Rio de Janeiro Brazil, reviewing the literature and seeking the best optimiza(LTM/UFRJ) in Brazil, who leads the Laboratório de Tecnologia tion methodology. “In the past, most often industry lab work Mineral research group at the university. “Lower grades, larger for optimization was based directly or indirectly on the empirplants, and the push towards greater sustainability through ical Bond Work Index,” says Faria, who has been employed minimizing energy and water usage are requiring answers from with Vale since 2010. “This approach was used extensively, the whole mining community. These challenges call for skills but, according to some researchers, this methodology is useful that go from the depth of theoretical to highly practical knowlfor new design and not for optimization of operating mills.” edge. However, looking around the globe, very few groups reach the minimum size and skill base required to make a measurable impact.” Breaking Bond Two years ago, Brazilian mining company Vale, which has a Faria’s research led her to conclude the Bond Work Index long relationship with the Laboratório de Tecnologia Mineral, did not take into account two fundamental elements: mill set out to tackle this gap, offering some of its employees the transport and cyclone size classification. “Bond basically opportunity to pursue master’s degrees. Patrícia Faria, master assumes that the breakage kinetics transport in the mill and process engineer at Vale S/A was among them. The company classification of the processes is characterized by a single contacted Tavares, who seized the opportunity, bringing in his parameter, the [Bond] Work Index,” says Faria. alma mater, the University of Utah. He agreed to be one of Instead, she found the Population Balance Model is more Faria’s supervisors as she embarked on her degree, with her accurate. “It makes it possible to simulate the industrial mill in research focused on ball mill optimization. “I could recognize a laboratory mill with great accuracy,” notes Faria. “And this is
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important for optimization because it allows me to do all the experiments to determine the optimal conditions for the industrial mill in a very small, 10-inch batch mill, in a laboratory. If the results are good, I can then scale up and apply it to the industrial mill. So it is an economical way to simulate the best conditions to apply in the industrial mill without the potential loss of energy and production that would be associated with doing the tests in the industrial mill.” Tavares says the use of the Population Balance Model to improve grinding is seldom done in the context of grinding pellet feed and certainly not at the level of detail that Faria has pursued. “Among the reasons it is not done as often is the lack of skilled engineers, as well as the need to properly calibrate models at different levels before validating at an industrial scale,” he points out. “Only after that exercise can one confidently implant the technology in the plant and place methods to conduct calibration of the model to account for variations due to ore grindability.”
Large-scale results Faria spent the last year collecting extensive data from an industrial mill at Vale in Brazil. She measured the fresh feed size distribution and, using the Population Balance Model, predicted the mill size distribution and the cyclone overflow size distribution.
She is now using the results of her research and the data she collected at the University of Utah lab to simulate the potential improvements in an industrial-scale mill. Her goal is to meticulously test each parameter, such as solids concentration, mill speed, optimal top ball size and ball load, and a series of other possible variables to determine the exact operational conditions needed to optimize the industrial mill. In January, Faria will return to Brazil and apply her findings. “Validation of simulations using good data from industrial plants is a key prerequisite in her study,” says Tavares. “As such, collecting good data is often not a trivial task, since very few plants appreciate the effort and care required to conduct a good industrial survey. This will be particularly critical in the follow-up of her work back in Brazil, when she will work on the application of more advanced models of comminution to the plant.” Ultimately, the research has already been successful in the sense that it is affording Faria the opportunity to profoundly augment her knowledge and understanding. “I’m learning what is behind the theory and methodology,” she says. “There is software that is widely available for optimization. I think it has its limitations, but more importantly if I use the software at my work for the optimization, I don’t know the theory behind it. For me, this is far better and it is knowledge I can build on and share.” CIM
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Quebec’s iron-clad bond with China Both parties in iron ore business for the long haul
David Dennis
By Pierrick Blin and Antoine Dion-Ortega
Chinese investors are now more cautious when investing abroad and are looking to remain active in the investments they do make.
hina’s economy should continue to cool in 2013, with predictions from PricewaterhouseCoopers (PwC) indicating seven or eight per cent growth for the year. But while Chinese investors are growing more cautious that does not mean that demand for iron ore will decline, says Ari Van Assche, associate professor at HEC Montreal and an expert on the Chinese economy. “China’s economy will keep on slowing down in the coming years, but economic growth does not necessarily have an impact on foreign direct investment (FDI),” he points out. “Since Chinese companies are richer than before, they are going to invest abroad, including in North America.” In the mining sector, the decision to invest in Quebec will depend mostly on the health of the iron ore industry rather than on China itself, he adds: “As long as the industry is doing fine, they will invest. We should not focus solely on growth.” In fact, exports to China have been increasing rather than decreasing over the last few years despite the decline in Chinese growth. “There has been an intensification of trade between China, and the rest of the world,” says Michel Leblanc, president and CEO of Montreal’s Board of Trade. “In Quebec, iron ore has clearly been the vehicle for this increase.” In 2008, he recalls, ore from the iron-rich Labrador
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Trough that runs down northeastern Quebec made up just one per cent of the province’s total exports to China. By 2012, that proportion had soared to 30 per cent. Canadian exports to China increased by 15 per cent in 2012 alone, and are now worth almost $20 billion.
Cyclical by nature But globally, the end of 2012 and beginning of 2013 were tough for mining companies, and iron ore was no exception, with prices dipping below $100 per tonne in September 2012 – a low not seen since 2009. Steelmakers held back their buys, primarily because they had high inventories of steel, but also because there was some uncertainty on the credit market, says Patricia Persico, director of global communications at Cliffs Natural Resources. The steep decline in demand forced many mining companies to write off billions in assets, with Cliffs itself announcing in January of this year that it would write down $1 billion on its Bloom Lake property. That is just how the market works, notes Persico, who is confident that demand for iron ore will keep on intensifying, although not as aggressively as in 2011. “We believe growth is still healthy in China,” she says. “As China’s economy transi-
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tions from an emerging economy to a mature one, it will still have a need to consume steel, but this demand will be not without volatility in steel consumption and productivity, so there’s going to be a natural volatility in the pricing for steelmaking raw materials such as iron ore.” “We must stay the course,” Leblanc insists. “We are obviously experiencing a slowdown, some decisions are being delayed, but the demand of the [Chinese] middle class will continue in the future. We should be wary of pessimism.”
“We wanted to grow within China, and more generally the Asian market, and Consolidated Thompson was very attractive for us at the time,” says Persico, who notes that their partner in Bloom Lake is the fifth largest steel producer globally. All seven million tonnes of iron ore produced at Bloom Lake is exported to the Asian market. Wisco has also invested $91 million in the Otelnuk Lake project, which Adriana Resources is currently advancing through its feasibility stage, some 170 kilometres north of Schefferville. Even though iron ore from Quebec Dealing with a more savvy China costs up to twice as much as Australian ore, Chinese steelmakers will hold on In April 2012, Zhou Xiaochuan, to these strategic investments because governor of the Peoples’ Bank of – Nochane Rousseau they need to secure diversity of supply China, spoke out against the poor rather than depend on a handful of understanding Chinese investors had mining multinationals, says Van Assof the investment environment, legal che. Also, Quebec’ s deposits are high-quality, Rousseau systems and financial markets of the countries they invested notes, but less concentrated, meaning projects often need to in at the Boao Forum for Asia. “This will take some time to include an extra concentration step in their design. improve,” he said, yet this year those same investors have In any case, Cliffs is confident that the Labrador Trough been hard at work applying lessons learned. will continue to hold interest for foreign investors. “The “China has had some problems with return on some of advantage in the Trough is that you have an established infratheir investments abroad,” says Nochane Rousseau, leader of structure, so companies are attracted to that rail, to that the mining industry for Quebec at PwC. “They realized that port,” says Persico. “You don’t have to build that.” they might not have all the skills required to make these For the moment, Cliffs has put aside its expansion projbusiness decisions, so they are now more careful in their ect at Bloom Lake that would have doubled the output of investments. We also noticed that they are more active shareholders and that they stay involved in the projects’ the mine to focus on the stability of the original project and satisfy its investors. “We have no timetable for the management.” Though it is not in iron ore, the Nunavik Nickel project, Phase 2 expansion,” Persico admits. “We will probably owned by Canadian Royalties, is probably the best example make some determination within either this year or early of the new Chinese stance. Jilin Jien Nickel bought Canadian next year on a timeline. Right now, we are putting that on Royalties in 2010 through its Canadian subsidiary, but the hold. We are being much more prudent with our capital project faces financial problems that the China Development investment. We have had to pull back a little bit in the last Bank, which funded it initially, now refuses to take on. “We six months.” CIM would tend to expect that the Chinese banks will bail them out, but that is just not happening,” says Rousseau, adding ACHIEVEMENT Canadians should not expect China to save the day. “Since they will be more cautious in their investment, there will be Kidd wins safety award fewer projects chosen,” he notes. Glencore Canada’s Kidd Operations received the PresiCanadians have had good reason to expect a lot from China in the past. Quebec in particular owes a lot to Chinese dent’s Award from Workplace Safety North for being the top investments, which are foremost among foreign investors. “In performer in safety and for always making occupational the last few years, many major mining projects in Quebec health and safety a priority. “Everyone is really proud of the have been either developed or advanced thanks to Chinese win,” said Tom Semadeni, general manager of Kidd Operainvestment,” says Rousseau. tions. “It is really icing on the cake because earlier this year That was certainly the case for the Bloom Lake project, we won the John T. Ryan Award for the best safety performinto which Wuhan Iron and Steel Corp. (Wisco) invested ance for a Canadian metal mine. So it is further reinforce$240 million in 2009, taking a 20 per cent interest in Conment that we’re on the right track.” Workplace Safety North solidated Thompson – which owned the project at the time is a not-for-profit health and safety organization that brings – and signing up for a 50 per cent off-take agreement. It was together groups and communities to build safer, healthier an investment that certainly did not go unnoticed by Cliffs, and stronger workplaces. which took over Consolidated Thompson two years later for $4.9 billion.
Since they will be more cautious in their investment, there will be fewer projects chosen.
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Amongst giants Partnerships sustain momentum for New Millennium Iron’s Dean Journeaux By Vivian Danielson
ean Journeaux and Bob Martin, along with the other founders of LabMag Mining Corp. (LMC), acquired claims in Labrador and Quebec in 2002, and leapt into the iron ore industry. This came just before markets improved, driven by demand from emerging Asian economies, so the timing was good. Now known as the Millennium Iron Range and held by New Millennium Iron Corp. (NML), the acquisitions have enormous potential. The company started small, but Journeaux – now president and CEO of NML – helped establish a strategic partnership with India’s Tata Steel Limited, one of the world’s largest steel producers and now its biggest shareholder. They created Tata Steel Minerals Canada (TSMC) to take advantage of NML’s direct shipping ores (DSO). In September, TSMC celebrated its first DSO project shipment from Sept-Iles, Quebec, to Tata Steel Europe. It was a major milestone for New Millennium. Journeaux and his team have big plans for the 210-kilometrelong Millennium range that should keep them busy well into the future.
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CIM: What attracted you to this opportunity and how did it come about? Journeaux: Bob Martin [former president and CEO] became aware that iron ore claims in the Labrador Trough had become available in early 2002, and he worked with me and a few 42 | CIM Magazine | Vol. 8, No. 8
others in the belief that a crunch in iron ore markets would come at some point. We then set up a capital pool company, NML, and did desktop studies on several projects before deciding to qualify the LabMag project held by LMC [one of several taconite deposits in the Millennium Iron Range]. We knew we needed a partner and talked with potential parties from all over the world before making our agreement with Tata Steel. Our team has extensive iron ore experience. We know the market and the ore bodies. We’re lucky to have that knowledge, as business was bad in the 1980s and 1990s, resulting in a vacuum of industry experience. You won’t find many people in their 50s in this business. CIM: Describe the relationship NML has with Tata Steel, as this company is integral to your business. Is there anything unique in working with that company? Journeaux: When we looked for a partner, we concentrated on users that need captive supply. We know the big iron ore companies prefer higher grade ore bodies close to Asian markets. Ours are lower grade compared to others in Brazil and Australia; our ores are harder and require a lot of grinding, and we’re 600 kilometres from the ocean. On the other hand, we’re closer to Europe and the United States. Tata Steel was a good fit for us because they are the second-largest steel producer in Europe, but with zero captive [iron ore] supply.
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CIM: How has your four decades of experience with other companies and working in other countries translated to New Millennium Iron? Journeaux: I started with Quebec Cartier Mining and later MET-CHEM Canada, U.S. Steel subsidiaries, and worked all over the world, including India, where I lived for a time. I got to know a lot about the global steel industry, and that’s a real advantage. CIM: Your company recently reported the first shipment of product from the DSO project. Where do you see this project and the company in five years? Journeaux: DSO production could reach the rate of six million tonnes per year in 2015, and perhaps as high as eight million tonnes in five years. That’s the objective, and TSMC has the resources to do that. The taconite deposits [LabMag and KéMag] are at the feasibility stage. This will be a huge project at $5 billion, estimated in 2010, or more now. We’re working with Tata Steel, which has agreed to arrange the bulk of financing, and expect to release a study shortly. We are also looking at other partners to help de-risk it and arrange off-take agreements. CIM: The iron ore industry is dominated by giants. How do you fit in as a smaller company, and is there an advantage in being perceived as small, even as a producer? Journeaux: We may be small, but NML ranks roughly fifth in the world in terms of iron in the ground [in the Millennium Iron Range], and that’s an advantage. The big guys have big resources and big production but will run out of ore sooner or later. We have the potential for a hundred years or more, and that’s the kind of life people will be looking at long term. CIM: Power and infrastructure are essential to this project and some improvements are proposed or in the works, including a new deep water dock at Pointe Noire. Can you discuss those? Journeaux: This new deep-water dock will be capable of handling the largest vessels plying the seas. When it’s completed early next year, we’ll be able to ship product in larger vessels and extend our shipping range. We [NML and Tata Steel] have invested $50 million, or roughly 25 per cent of the total capex for the project. As for hydroelectric power, we’re looking at separate proposals for LabMag and KéMag; we’re not sure which would go first. We haven’t discussed rates, but don’t expect to be treated differently than other users. CIM: What relationships have you established with local aboriginal communities? Journeaux: The first agreement we made was with the Naskapi Nation to invest in the early stages of the LabMag project. They now have earned an ownership of 20 per cent of LabMag. Later, we also negotiated four impact and benefit agreements for the DSO project. They form a large part of the project
employment. We spend a lot of time and effort with First Nations and local communities and are very involved in promoting education for young people. So we have a strong relationship based on respect. CIM: How have current capital markets affected the company? Journeaux: We’re lucky that we raised considerable funding two years ago and have Tata Steel as a partner. We’re in good shape – we’ll need funding for the taconite projects at some point – and we don’t foresee going to the equity market anytime soon. CIM: Finally, how competitive is the company globally given that the previous operator of the DSO project was forced to close because of weak prices in 1982? Journeaux: One advantage is producing a higher quality product upgraded to 69 per cent iron for taconite concentrate with very low deleterious elements. The DSO has a natural iron content of 58 per cent or 59 per cent previously shipped without upgrading. TSMC is building an upgrading plant to reach at least 64.5 per cent iron to meet market specifications. Another advantage is our potential to produce a range of pellet products, including direct reduction grade pellets. We see the high-quality pellet market, especially for direct reduced iron, increasing over time and see that as our niche. CIM
Colorado School of Mines Department of Mining Engineering Assistant/Associate Professor The Mining Engineering Department at Colorado School of Mines (Mines) is accepting applications for an anticipated tenured or tenure-track faculty position at the rank of Assistant or Associate Professor with broad based expertise in surface and/ or underground mining of coal, metals/nonmetals, or industrial minerals. The successful candidate will advise/mentor undergraduate and graduate students, and teach select courses in mining engineering at all academic levels. Applicants must possess an earned Ph.D. degree in mining engineering or a related engineering discipline. A background and expertise in one or more of the following areas: underground or surface mine design, mine operations, ventilation, mine plant design, mineral processing and coal preparation, or rock fragmentation is highly desired. For the complete job announcement and directions on how to apply, visit: http://inside.mines.edu/HRAcademic-Faculty
November 2013 | 43
A group of women pick through the waste rock dump of a cooperative ASM mine in Nazca, Peru.
No safety in numbers For a select group of miners, safety culture has improved dramatically in recent years. Major mining companies are now some of the safest employers in the world, and their managers understand the cultural change that was needed to make that happen. But for the vast majority of the global mining workforce who labour in artisanal and small-scale mines, health and safety can still be an afterthought or worse. How much can we help?
Valerian Mazataud
By Correy Baldwin
44 | CIM Magazine | Vol. 8, No. 8
T
hough artisanal and small-scale mining (ASM) operations may What is artisanal and small-scale mining? seem insubstantial, their global presence is anything but. According to ASMAny mining and or processing activities undertaken by individuals who PACE, an NGO focused on the ASM sector, may have formed a collective or co-operative to undertake them. The there are an estimated 20 million ASM scale of activity can range from one individual to large collectives of workers around the world. In gold alone, hundreds or even thousands of individuals working an area with the there are 15 million ASM workers in 72 common denominator being a low level of mechanisation. countries, which is about nine times the number of people who work in large-scale Colloquially, ASM is referred to by many different names including gold mines. Such large numbers mean the galamsey (Ghana), orpailleurs (DRC), garimpeiros (Brazil), Zama challenges facing the ASM sector pose Zamas (South Africa) and Barequeros (Colombia). ASM activity can large-scale problems. be legal or illegal. “I’ve seen holes so deep, that you can hardly see the guys down in them who are digging and lifting out buckets full of orebearing material,” says Thabani Mlilo, AngloGold Ashanti’s manager of sustainability for the AmeriIn general, the two sides do not talk much. “There’s a real cas. This mining, he adds, is often done in rock that has never lack of engagement between the formal sector and the inforundergone geological testing and with unknown geological mal sector,” says Kevin Telmer, executive director of the Artiintegrity. sanal Gold Council (AGC), an NGO that works directly with ASM workers tend to lack training and technical skills, the ASM sector. and the sites often have no operational, safety, environmenThe complexity of the problem has made it especially hard tal or labour standards to speak of. In many cases, ASM ope- to address, says Peter Sinclair, Barrick Gold’s vice-president of rations are unable to gain legal title. In cases where they CSR. “I think a lot of people have looked at it and thought cannot sell their ore on the legal market, they must turn ins- that it’s too difficult. A lot of NGOs have looked at it from a tead to the black market – or to armed groups that profit development angle and said ‘Wow, that’s complicated.’ There from the trade. are a lot of nasty things involved in artisanal mining. Not in The safety risks are obvious, the liability risks less so. It is every situation, but it can be a nasty business, so it often disdifficult, for example, to know who is responsible if an illegal courages organizations from getting involved.” tunnel on a major company’s concession collapses, injuring African Barrick Gold’s North Mara mine in Tanzania has or killing miners. If a company provides any assistance to an required special attention to ASM issues. Of particular concern illegal mine, it runs the risk of being accused of colluding in to the company was a group of women who were entering the mine property illegally to collect rocks that they would then the illegal mining activity. It is little wonder, then, that many mining companies are take away to crush and sell as aggregate. Their trespassing was reluctant to engage with ASM, aside from at the exploration dangerous, both from a mine safety and personal security stage, when its presence is often an indicator of mineral perspective. In response, says Sinclair, the operation set up a potential. Once development begins, any interaction is often program to provide the women with equipment and training, seen as far too risky. Even the presence of illegal ASM activity to allow them to continue their work in safer conditions and on a concession comes with a multitude of risks, from safety, in a more regulated and sustainable way. The company supsecurity and environmental to liability and reputational. plied 10 motorized crushers and will provide waste rock for However, for mining companies that neighbour these vulne- the women to process. Sinclair and his team are currently worrable small-scale mines, engagement with the ASM sector is king to extend power to the site. “It is a win-win, because the a risk that also represents an opportunity to help local com- women are working in a safer environment, and the mining munities and have powerful impact on their health and well- activities are not unduly affected,” he adds. African Barrick Gold has also had to deal with a group that being. wanted to reprocess tailings from small-scale mining. “We saw Long histories clear environmental dangers with the practice,” says Sinclair. AngloGold Ashanti is developing its Gramalote project, a “So we helped design it in a way that was going to be safe. We joint venture with B2Gold, in the hilly region of Antioquia, helped them understand the use and handling of cyanide, and about 220 kilometres northwest of Bogota. “Artisanal mining helped them get the environmental permits as well.” is a generational activity in this part of Colombia,” says Nathan Monash, the company’s vice-president of sustainability. Good reasons for action Though the Gramalote project is new, ASM activity has When deciding how to address an ASM community in and been ongoing in Antioquia for a very long time. “There’s not around a prospective area, it is important to understand the a single family in the local community that doesn’t have some historic roots they may have there. In some cases, companies link to artisanal mining,” says Monash. may obtain concessions that have been mined informally by November 2013 | 45
Courtesy of the Artisanal Gold Council
ASM workers receive occupational health and safety training from Artisanal Gold Council in Ghana.
local populations for years, or even generations. Resettlement can thus represent a major disruption to local communities. “In places like Tanzania and Ghana, our international work with artisanal miners is more challenging,” says AngloGold Ashanti’s Mlilo. “We acquired a lot of our mines in Africa [rather than developing them from exploration projects], so the opportunity to implement best practice from the beginning was obviously lost.” At the Gramalote project, AngloGold Ashanti had the opportunity to take a new approach. Here, one of its first steps was to better understand local ASM activity, as well as the ASM community that would be affected by the project. The company looked at the historic conflict in the region, local stakeholders in the broader community, and the structure and value chain of the ASM. AngloGold Ashanti approached the ASM workers with the idea of alternative livelihoods – that is, moving the artisanals away from mining and into another economic activity. In the end, the community worked with the company to write the proposal, but only, says Monash, because Gramalote first formed a strong relationship with the community based on trust. Some of the miners were interested in working for the company, while others preferred to remain independent workers, and Gramalote partnered with two Colombian agencies to assist both requests. “This could be considered unusual,” says Monash. “Given the longstanding nature of artisanal mining in many areas, a shift into agricultural activities is often not viable. The required skill sets are simply not prevalent. Without subsidizing the alternative livelihood, which itself is likely to be unsustainable, making this transition becomes quite difficult.” At Gramalote, the company was working with a relatively small number of ASM workers. “[It was] in the hundreds and not in the thousands or tens of thousands,” says Monash. “The 46 | CIM Magazine | Vol. 8, No. 8
An ASM worker at a mine outside of Geita, Tanzania.
upshot is that we wanted to work with these artisanal miners towards a new future in which they are no longer mining.” Ensuring the idea was supported by the community was challenging. “There is a desire to move away from artisanal mining only if the alternative is better,” explains Monash. “That’s the challenge with alternative livelihoods: there is a reason why artisanal mining takes place – it is the best economic alternative for the people who are undertaking it. It is significantly more profitable than agriculture in many places.”
Strengthening the ASM sector According to Paleah Moher, AGC’s human and ecosystem health officer, ASM workers are eager to improve the conditions of their operations: “Whether you’re an artisanal miner or a CEO operating in Toronto, everyone wants access to fair employment opportunities and safe occupational conditions. Certainly the miners we work with are absolutely no exception. They have a desire for occupational health and safety; they just lack the resources, and the basic training. As soon as they’re given economic resources or technological provisions, they’re often readily taken up within the community, especially if there’s an economic incentive to do so.” The plight of artisanal miners is difficult to remedy without outside support. “Involvement from the formal sector is essential if artisanal mining is truly going to be improved at scale, so that it’s not just a development project here and there,” says AGC’s Telmer. “The large-scale sector has the resources, they’re in the field, they have expertise.” ASM workers also routinely lack access to several services that could be provided by large-scale mining companies including emergency and mine rescue assistance, affordable assaying or milling services, or workshop facilities. Large companies can purchase and treat tailings from ASM opera-
Valerian Mazataud
Evelyn Hockstein
A worker prepares feed for the mill in the Cotapata mining cooperative near LaPaz, Bolivia. This ASM operation is the world's first fair-trade-certified gold mine.
tions, help store explosives or help set up small-scale processing facilities. Modest financial assistance can help ASM operations purchase safety gear and other equipment or obtain training. “Companies can also help upgrade and formalize artisanal operations by promoting their participation in mineral certification schemes, which facilitates market access and safeguards better production standards,” says Nicholas Garrett, head of sustainability practice at RCS Global, which worked with AngloGold Ashanti at Gramalote and elsewhere. “This process can involve the provision of technical assistance to artisanal operations, often with the help of consultancy firms or NGOs.”
Too many people to simply relocate In some cases, the best scenario might involve cohabitation: when ASM miners are either allowed on company property to work, or the company releases a portion of their property to them. “Cohabitation is a great option that hasn’t been explored enough,” says Telmer. “It’s rare that the two groups are actually targeting the same resource. So there is plenty of possibility.” An ASM operation, he says, might profit from mining a tonne of ore a day from a single vein to eventually produce a couple hundred ounces of gold – an amount not worth accessing for a large company. “It’s becoming a more interesting approach,” suggests Garrett, “considering that large numbers of artisanal miners, in some contexts, makes it almost impossible to use more conventional approaches like resettlement. From a risk-mitigation perspective, it may often be better to look at ways and options of cohabiting.” Still, such a relationship comes with risks of its own, says Garrett: “If cohabitation is happening on your concession,
there will be a degree of association between the working conditions on the artisanal mining operation and the reputation of your company. “Cohabitation doesn’t necessarily mean that you’re entering into a business relationship with the artisanal miner. But it could involve technical and other assistance provisions to the artisanal operation, particularly on operational and mine safety – either through the company or, more likely, through third parties.” A similar notion has been taken up by governments, with mixed results. “In some places in Tanzania, the government has designated areas in which artisanal miners can mine quite safely,” says Mlilo, who suggests the idea has met with a number of challenges. “It’s a lot easier to obtain ore-bearing material from an existing concession than it is to break ground on land where you don’t even know what the quality of the mineral is.” According to Barrick’s Sinclair, the Tanzanian government is interested in understanding and regulating its artisanal sector better – something in which the industry can provide advice. “African Barrick Gold is working with AngloGold Ashanti and the World Bank and some others to advocate for a more regulated and more formalized approach to artisanal mining in the sector as a whole,” says Sinclair, “and the Tanzanian government is very supportive of that.”
Rigid formal structures not always effective ASM formalization is championed by the development community that is working to shift the industry from current ad hoc, localized initiatives to an organized, industry-wide approach. A formalized ASM sector with permitting and some safety oversight, it is argued, would also be economically beneficial to local governments which cannot tax concessions that are not ever registered. November 2013 | 47
Valerian Mazataud
A woman picks through the waste rock of the Cuatro Horas mining cooperative near Nazca, Peru. The value chain of ASM mines is often complicated and can vary dramatically in levels of formalization and safety.
Monash says optimistically that the future of ASM mining is one in which it continues to bring needed economic activity to local communities, while also addressing the environmental, social and security challenges that current artisanal mining presents. But he notes that achieving this vision requires collaboration between the ASMs themselves, government, civil society, international NGOs and large-scale miners. It is a task that is complex and requires compromise. In building up the required partnerships, cautions Monash, “We need to ensure that the perfect is not the enemy of the good.” Ironically, Sinclair points out, as large-scale companies implement more stringent policies for their own operations, working with ASM operations becomes more difficult. He says international guidance and standards – such as the recent OECD guidelines on conflict minerals and responsible supply chain and the World Gold Council’s conflict-free gold standard – struggle with how to deal with artisanal mining. “They’ve made it much more difficult for small-scale miners to operate in the supply chain because they’re basically trying to regulate the downstream flow of minerals, and that is affecting the source,” he explains. “The industry’s put these standards in practice for very good reasons, but it has had an impact. It’s likely to close off opportunities for artisanal miners, unfortunately.” Telmer says he believes NGOs will always play a crucial role, as mining companies are beholden to shareholders and cannot escape that reality. “Does using a risk lens to look at this issue allow for the types of innovations that are going to be required to make it a sustainable sector?” he asks. “I would say no; it’s not very helpful to look at it that way.” Development agencies have the flexibility to help mining companies and governments achieve positive outcomes. “Every location and small-scale mining community that we work with has a unique set of circumstances, with particular conditions and particular needs,” says AGC’s Moher. 48 | CIM Magazine | Vol. 8, No. 8
Understanding these circumstances, she says, allows her organization to act as an effective neutral third party. “The benefit of working directly with artisanals is that we can act as a bridge, or a voice, between these small-scale miners and the larger stakeholders in the area, such as government officials or industry, to help promote and foster healthy relationships and mutually beneficial situations.” Further, development agencies and governments cooperate to create appropriate health, safety and environmental standards, and to improve health and safety education. They help governments regularize and mainstream ASM by developing mining policy and legislation that recognize ASM, developing programs to upgrade their skills and increasing their access to financing and markets. Agencies can also influence intergovernmental negotiations. “Issues of environmental contamination, global health and the global gold supply chain are at a multinational level,” says Moher. “It’s not a localized issue or concern.”
Elusive answers Formalization is a challenging goal and one that requires multiple stakeholders at all levels – from local initiatives to global, intergovernmental policy and standards – but in the end it may be the only way to achieve a safe and viable ASM sector. “Some form of increased regulation over this industry is absolutely necessary,” contends Sinclair. “Call it formalization or call it just increased application of common sense rule of law, and basic standards.” “We’ve tried a lot of things as an industry but very few have been successful, to be honest,” says Sinclair. “There’s been a lot of studies, a lot of consultation and conferences on ASM. At the end of the day it is very difficult because it’s a basic livelihood, it’s very difficult to organize, and it involves so many people. It’s not a small challenge.” CIM
Valerian Mazataud
L’union ne fait pas la force Par Correy Baldwin
Une femme cherche des roches stériles dans la coopérative minière de Cuatro Horas près de Nazca, au Pérou.
Pour un petit groupe de mineurs privilégiés, la culture de la sûreté s’est considérablement améliorée ces dernières années. Les sociétés minières font maintenant partie des employeurs les plus sûrs au monde, et les directeurs de ces mines sont bien conscients du changement culturel qui était nécessaire pour y parvenir. Mais pour la plupart de la main-d’œuvre du secteur minier au niveau mondial qui travaille dans des exploitations artisanales et de petite taille, la santé et la sécurité passent souvent au second rang, voire pire. Étant donné que les sociétés continuent d’exploiter ces sites dangereux ou leurs alentours, dans quelle mesure pouvons-nous les aider ? L’exploitation minière artisanale et à petite échelle (ASM) marché légal, elles se tourneront vers le marché noir, ou vers des peut paraître sans importance, et pourtant sa présence à groupes armés qui profitent de ce commerce. l’échelle mondiale vient prouver le contraire. D’après ASMLes risques en termes de sécurité sont évidents, mais ceux PACE, une ONG axée sur le secteur de l’ASM, on compte au de la responsabilité pas autant. Par exemple, il est difficile de niveau mondial près de 20 millions de travailleurs dans le sec- savoir qui est responsable si un tunnel illégal s’effondre sur la teur ASM. Le secteur aurifère à lui seul emploie quelque concession d’une société, blessant ou tuant des mineurs. Si une 15 millions de mineurs ASM dans 72 pays, ce qui représente société offre son aide à une mine illégale, elle court le risque environ neuf fois le nombre de personnes travaillant dans des d’être accusée d’association à des activités minières illégales. mines d’or de grande envergure. Avec un effectif si important Il n’est donc pas surprenant que de nombreuses sociétés dans ce secteur, on peut imaginer les enjeux considérables aux- minières soient réticentes à s’engager avec des ASM, sauf à quels font face les travailleurs des petites mines. l’étape de l’exploration lorsque leur présence sert souvent d’in« Certains puits sont si profonds qu’on peut à peine discerner dicateur de potentiel minéral. Une fois que commence la phase les mineurs qui travaillent là-dedans et qui creusent et soulèvent de développement, toute interaction est souvent perçue comme des seaux remplis de minerai », déclare Thabani Mlilo, directeur bien trop risquée. Même la présence d’une activité d’ASM de la section Durabilité pour les Amériques à AngloGold Ashanti. Il ajoute que ce genre d’exploitation minière est souvent mené sur des roches qui n’ont L’exploitation ASM définie : jamais été soumises à des essais géologiques, et dont Toute activité d’exploitation minière ou de traitement menée par des l’intégrité géologique est inconnue. personnes qui peuvent avoir créé un collectif ou une coopérative afin Les travailleurs du secteur ASM n’ont générale- d’entreprendre ces activités. L’échelle de l’activité peut s’étendre d’une ment pas suivi de formation adaptée et manquent seule personne à des collectifs plus vastes composés de centaines, voire de qualifications techniques; par ailleurs, les sites ne de milliers de personnes travaillant dans un domaine dont le dénominateur sont souvent pas conformes aux normes opération- commun est un faible niveau de mécanisation. Plus familièrement, les nelles, de sécurité, environnementales et profession- mineurs d’ASM sont appelés par différents noms, dont galamsey (Ghana), nelles. Très souvent, les exploitations ASM ne orpailleurs (RDC), garimpeiros (Brésil), Zama Zamas (Afrique du Sud) et peuvent obtenir de titres valables en droit. Si elles Barequeros (Colombie). L’activité d’une ASM peut être légale ou illégale. ne parviennent pas à vendre leur minerai sur le November 2013 | 49
Avec l'aimable autorisation de l’Artisanal Gold Council
Un groupe de mineurs ASM reçoit une formation organisée par l’Artisanal Gold Council, qui porte notamment sur les façons de réduire l’exposition au mercure.
illégale sur une concession s’accompagne d’une multitude de risques, tant en termes de sûreté, de sécurité et de risques environnementaux que de responsabilité et de réputation. Cependant, pour les sociétés minières qui se trouvent à proximité de ces petites mines vulnérables, l’engagement avec le secteur ASM est certes un risque, mais il représente aussi une occasion d’aider les communautés locales; et cela peut donc avoir un fort impact sur leur santé et leur bien-être.
De longues histoires AngloGold Ashanti développe actuellement son projet de Gramalote, une entreprise commune avec B2Gold, dans la région montagneuse d’Antioquia, à environ 220 kilomètres au nord-ouest de Bogota. « L’exploitation minière artisanale est une activité qui se perpétue de génération en génération dans cette région de Colombie », explique Nathan Monash, vice-président de la société à la section Durabilité. Le projet de Gramalote est certes nouveau, mais l’ASM existe depuis très longtemps à Antioquia. « On ne trouve pas une seule famille dans la communauté locale qui ne soit pas liée aux activités minières artisanales », explique M. Monash. Cependant, on ne tient que rarement compte des besoins de la communauté locale des ASM. « On observe un manque d’engagement important entre le secteur formel et le secteur informel », explique Kevin Telmer, directeur général d’Artisanal Gold Council (AGC), une ONG qui travaille directement avec le secteur ASM. La complexité du problème le rend très difficile à résoudre, explique Peter Sinclair, vice-président de la RSE chez Barrick Gold. « Beaucoup de personnes se sont penchées sur le problème et pensent qu’il est trop complexe. De nombreuses ONG l’ont envisagé du point de vue du développement et ont constaté à quel point il était compliqué. L’exploitation minière artisanale recèle beaucoup de choses très dangereuses, pas dans toutes les situations bien sûr, mais elle peut se révéler très risquée, ce qui n’encourage pas les organisations à s’impliquer. » La mine de Mara-Nord en Tanzanie, propriété d’African Barrick Gold, a requis une attention particulière quant aux problèmes des ASM. La société s’inquiétait particulièrement de la présence d’un groupe de femmes qui venaient sur le site minier illégalement pour ramasser des roches qu’elles emportaient avec 50 | CIM Magazine | Vol. 8, No. 8
elles pour les concasser puis les vendre comme agrégats. Leur entrée non autorisée sur le site était dangereux des points de vue de la sécurité de la mine autant que sur le plan personnel. Ainsi, explique M. Sinclair, l’exploitation a mis en œuvre un programme visant à fournir à ces femmes l’équipement et la formation nécessaires pour qu’elles puissent poursuivre leurs activités dans des conditions plus sûres et aussi de manière plus régulée et durable. La société a fourni 10 concasseurs motorisés et donnera à ces femmes des roches stériles pour leur traitement. M. Sinclair et son équipe œuvrent actuellement au développement du réseau électrique jusqu’au site. « Tout le monde y gagnera; d’une part, les femmes travailleront dans un environnement plus sûr et d’autre part, les activités minières ne seront pas affectées outre mesure. » African Barrick Gold a aussi eu à faire à un groupe qui voulait retraiter les roches stériles provenant des petites exploitations minières. « Nous avons perçu les dangers évidents associés à cette pratique pour l’environnement », déclare M. Sinclair. « Aussi, nous l’avons structuré de manière à ce qu’elle soit plus sûre. Nous avons aidé les membres de ce groupe à comprendre l’usage et la manipulation du cyanure et également à obtenir les permis environnementaux nécessaires. »
De bonnes raisons d’agir Lorsque l’on décide de s’adresser à une communauté ASM au sein et autour d’une zone à potentiel, il faut bien comprendre les racines historiques du lieu. Dans certains cas, les sociétés peuvent acquérir des concessions qui ont été exploitées de manière non formelle par des populations locales depuis des années, voire des générations. La relocalisation peut donc représenter une perturbation majeure pour les communautés locales. « Dans des pays comme la Tanzanie et le Ghana, nos travaux internationaux avec les mineurs artisanaux sont bien plus complexes », explique M. Mlilo d’AngloGold Ashanti. « Nous avons racheté [et non développé à partir de projets d’exploration] une bonne partie de nos mines en Afrique, aussi nous n’avons évidemment pas eu la possibilité de mettre en œuvre les bonnes pratiques dès le début. » Dans le cadre du projet de Gramalote, AngloGold Ashanti a pu adopter une nouvelle approche. L’une des premières étapes a consisté à mieux comprendre l’activité locale des ASM, ainsi que la communauté ASM qui serait affectée par le projet. La société a examiné le conflit historique dans la région, les parties prenantes locales dans la communauté au sens plus large ainsi que la structure et la chaîne de valeur de l’ASM. AngloGold Ashanti a contacté les travailleurs d’ASM en vue de leur proposer des activités économiques de remplacement, à savoir les éloigner de l’exploitation minière pour les rapprocher d’une autre activité économique. En fin de compte, la communauté a collaboré avec la société pour la rédaction de la proposition, mais uniquement, comme l’explique M. Monash, car Gramalote avait en premier lieu établi une relation solide basée sur la confiance avec cette communauté. Certains des mineurs souhaitaient travailler pour la société, d’autres préféraient garder leur indépendance, et Gramalote s’est associé à deux agences colombiennes pour répondre aux souhaits des deux parties.
Renforcer le secteur ASM D’après Paleah Moher, agent de la santé des personnes et des écosystèmes à AGC, les mineurs artisanaux souhaitent améliorer les conditions de travail dans leur exploitation. « Que vous soyez mineur artisanal ou PDG à Toronto, tout le monde veut avoir accès à des possibilités d’emploi équitables et des conditions de travail sûres. Les mineurs avec lesquels nous travaillons ne font bien évidemment pas exception à la règle. Ils souhaitent bénéficier de la santé et la sécurité au travail, mais il leur manque les ressources nécessaires ainsi qu’une formation fondamentale. Dès qu’on leur donne les ressources économiques ou les dispositions technologiques requises, on constate qu’ils sont souvent facilement adoptés au sein de la communauté, surtout s’il y a une bonne raison derrière cette incitation économique. » Il est difficile de remédier au sort des mineurs artisanaux sans un soutien externe. « La contribution du secteur formel est essentielle si l’on souhaite réellement que l’exploitation minière artisanale s’améliore à grande échelle, aussi il ne s’agit uniquement d’améliorer un projet de développement de-ci delà », déclare M. Telmer d’AGC. « Les grandes exploitations du secteur disposent des ressources nécessaires; elles sont sur le terrain et ont l’expertise requise. » Les mineurs artisanaux manquent aussi d’un accès à plusieurs services qui pourraient être fournis par les plus grandes sociétés, notamment des services d’aide en cas d’urgence et pour le sauvetage minier, des services abordables de dosage ou de broyage du minerai ou encore des locaux affectés à d’éventuels ateliers. Les grandes sociétés peuvent acquérir et traiter les roches stériles des exploitations ASM, aider à stocker les explosifs ou mettre en place des installations de traitement à petite échelle. Une contribution financière modeste peut aider les exploitations ASM à acquérir l’équipement de sécurité ou autre nécessaire ainsi qu’à obtenir une formation.
Valerian Mazataud
« Cela peut sembler surprenant », déclare M. Monash. « Compte tenu du caractère très ancien des activités minières artisanales dans de nombreuses régions, un retournement vers des activités agricoles n’est souvent pas viable. Les compétences requises ne sont pas très courantes. Si l’on ne subventionne pas cette activité économique de remplacement, qui est elle-même fort susceptible de ne pas être durable, la transition devient relativement difficile. » À Gramalote, la société travaillait avec relativement peu de mineurs ASM. « [On en comptait] quelques centaines et non pas des milliers ou des dizaines de milliers », déclare M. Monash. « En fin de compte, nous souhaitions accompagner ces mineurs artisanaux vers un avenir nouveau, un avenir où ils ne travailleraient plus dans l’exploitation minière. » Il a été difficile de s’assurer que la communauté soutenait cette idée. « Le désir de s’éloigner de l’exploitation minière artisanale est bien présent, mais seulement si l’on propose une meilleure solution », explique M. Monash. « C’est là toute la difficulté avec les activités économiques de remplacement : les activités minières artisanales ont lieu pour une raison spécifique; il s’agit de la meilleure option économique pour les personnes qui l’entreprennent. Dans beaucoup de régions, cette activité est bien plus rentable que l’agriculture. »
Un travailleur prépare les matières premières pour le broyeur dans la coopérative minière de Cotapata dans la province de La Paz, en Bolivie. Cette exploitation ASM est la première mine au monde certifiée équitable.
« Les sociétés peuvent également contribuer à la modernisation et la formalisation des exploitations artisanales en promouvant leur participation à des systèmes de certification des minerais, ce qui facilitera leur accès au marché et garantira de meilleures normes de production », déclare Nicholas Garrett, responsable de la section Pratiques de durabilité à RCS Global, qui a travaillé avec AngloGold Ashanti à Gramalote et ailleurs. « Ce processus peut impliquer de fournir une assistance technique aux exploitations artisanales, souvent avec l’aide de sociétés de conseil ou d’ONG. »
Trop de personnes pour simplement relocaliser Dans certains cas, le meilleur scénario peut impliquer la cohabitation, lorsque les mineurs ASM sont autorisés à travailler sur la propriété d’une société, ou qu’une société leur cède une partie de sa concession. « La cohabitation est une très bonne option qui n’a pas été suffisamment explorée », déclare M. Telmer. « Il est rare que deux groupes ciblent la même ressource, aussi les possibilités sont nombreuses. » Une exploitation artisanale, ajoute-t-il, peut générer des profits en exploitant une tonne de minerai par jour à partir d’un seul filon, pour produire au final quelques centaines d’onces d’or, une quantité qui ne présente aucun intérêt pour une grande société. « Cette approche devient alors plus intéressante », suggère M. Garrett, « si l’on considère que dans certains contextes, il serait pratiquement impossible d’avoir recours à des approches plus traditionnelles comme la relocalisation si l’on se trouve en présence d’un plus grand nombre de mineurs artisanaux. Du point de vue de l’atténuation des risques, il est parfois plus intéressant de chercher des moyens et options de cohabitation. » Cependant, M. Garrett rappelle que cette relation s’accompagne de risques qui lui sont propres. « Si la cohabitation a lieu sur votre concession, on associera dans une certaine mesure les conditions de travail de l’exploitation minière artisanale et la réputation de votre société. » « La cohabitation n’implique pas nécessairement que vous développiez une relation commerciale avec le mineur artisanal, mais elle pourrait cependant impliquer que vous apportiez une November 2013 | 51
aide technique ou d’une autre nature à l’exploitation artisanale, particulièrement en matière de sécurité opérationnelle et minière, soit par le biais de la société soit, plus vraisemblablement, par le biais de tiers. » Une notion similaire a été adoptée par les gouvernements, et a engendré des résultats mitigés. « Dans certaines régions de Tanzanie, le gouvernement a désigné des zones où les mineurs artisanaux peuvent procéder à l’exploitation en toute sécurité », explique M. Mlilo, qui ajoute que cette idée a rencontré plusieurs obstacles. « Il est bien plus facile d’obtenir des matériaux contenant du minerai à partir d’une concession existante que de se lancer sur un terrain dont on ne connaît pas la qualité du minerai. » D’après M. Sinclair de Barrick, le gouvernement tanzanien souhaite mieux comprendre et réglementer son secteur artisanal, une approche à laquelle l’industrie peut contribuer en dispensant ses conseils. « African Barrick Gold collabore avec AngloGold Ashanti et la Banque mondiale ainsi que d’autres organisations pour préconiser une approche plus réglementée et formalisée de l’exploitation minière artisanale dans l’ensemble du secteur », déclare M. Sinclair, ajoutant que « le gouvernement tanzanien soutient totalement cette approche. »
Des structures formelles rigides qui ne sont pas toujours efficaces La formalisation des ASM est défendue par la communauté du développement qui cherche à faire évoluer le secteur de ses initiatives ad hoc localisées actuelles vers une approche organisée applicable à l’ensemble de l’industrie. Un secteur ASM formalisé ayant obtenu les permis nécessaires et disposant d’une certaine supervision de la sécurité pourrait aussi, selon certains, profiter sur le plan économique aux gouvernements locaux qui ne peuvent taxer les concessions qui n’ont jamais été enregistrées. M. Monash se veut optimiste et déclare qu’à l’avenir, les activités minières ASM continueront de constituer une activité économique nécessaire pour les communautés locales, tout en abordant les enjeux environnementaux, sociaux et de sécurité que connaissent les exploitations artisanales actuellement. Mais il fait également remarquer que pour atteindre cette vision, il convient d’établir une collaboration entre les ASM, le gouvernement, la société civile, les ONG internationales et les grandes exploitations minières. Il s’agit là d’une tâche complexe qui requiert des compromis. En développant les partenariats requis, prévient M. Monash, « nous devons nous assurer de ne pas laisser le mieux être l’ennemi du bien. » Ironiquement, M. Sinclair ajoute que dans un contexte où les grandes sociétés mettent en œuvre des politiques plus strictes pour leurs propres exploitations, il devient de plus en plus difficile de travailler avec des exploitations ASM. Les lignes directrices et les normes internationales, telles que le récent guide de l’OCDE sur les minerais provenant de zones de conflit et les chaînes d’approvisionnement responsables ainsi que la norme relative à l’exploitation aurifère sans conflit du World Gold Council (le Conseil mondial de l’or), luttent pour trouver le meilleur moyen de gérer l’exploitation minière artisanale. « Avec ces normes, il est bien plus difficile pour les mineurs de petites exploitations de travailler dans la chaîne d’approvisionnement car elles cherchent tout simplement à réglementer la circulation en aval du minerai, ce qui affecte la source », 52 | CIM Magazine | Vol. 8, No. 8
explique-t-il. « L’industrie a mis ces normes en pratique pour de bonnes raisons, mais l’impact s’est fait ressentir. En effet, elles risquent malheureusement d’anéantir les possibilités qui s’offrent aux mineurs artisanaux. » Selon M. Telmer, les ONG joueront toujours un rôle crucial étant donné que les sociétés minières sont redevables aux parties prenantes et ne peuvent échapper à cette réalité. « Si l’on observe ce problème en envisageant les risques, pourra-t-on assurer le type d’innovations qui sont requises pour rendre ce secteur durable ? Je suis tenté de dire que non; il n’est pas très utile de l’envisager ainsi. » Les agences de développement disposent de la flexibilité nécessaire pour aider les sociétés minières et les gouvernements à obtenir des résultats positifs. « Chaque lieu et petite communauté minière avec lesquels nous collaborons dispose d’un ensemble de circonstances uniques et s’accompagne de conditions et de besoins particuliers », déclare Mme Moher d’AGC. Comprendre ces circonstances, dit-elle, permet à son organisation d’agir en tant que tierce partie efficace et neutre. « L’avantage de travailler directement avec des mineurs artisanaux est que nous tenons lieu de lien, ou de voix, entre ces mineurs artisanaux et les plus grandes parties prenantes de ce domaine, par exemple des représentants officiels du gouvernement ou l’industrie, et nous pouvons promouvoir et encourager des relations saines ainsi que générer des situations mutuellement avantageuses. » Par ailleurs, les agences de développement et les gouvernements coopèrent afin d’établir des normes appropriées en matière de santé, de sécurité et d’environnement, et d’améliorer l’éducation en matière de santé et de sécurité. Elles aident les gouvernements à régulariser et à intégrer les ASM en développant une politique et une législation minières qui reconnaît les ASM, en établissant des programmes pour améliorer leurs compétences et en renforçant leur accès au financement et aux marchés. Ces agences peuvent aussi influencer les négociations intergouvernementales. « Les problèmes de pollution environnementale, de santé mondiale et de chaîne d’approvisionnement mondiale en or nous touchent à un niveau multinational », explique Mme Moher. « Il ne s’agit pas d’un problème ou d’une préoccupation localisés. »
Des réponses insaisissables La formalisation est un objectif difficile à atteindre qui requiert la participation de plusieurs parties prenantes à tous les niveaux (des initiatives locales aux politiques et normes mondiales et intergouvernementales), mais en fin de compte, cela pourrait être la seule façon de parvenir à un secteur ASM sûr et viable. « Une certaine forme de réglementation renforcée dans ce secteur est absolument nécessaire », prétend M. Sinclair. « Appelez-la formalisation, ou simplement application renforcée de la primauté du droit élémentaire et des normes fondamentales. » « Nous avons tenté de nombreuses options en tant qu’industrie, mais à vrai dire, peu ont abouti », déclare M. Sinclair. « Beaucoup d’études, de consultation et de conférences ont lieu sur l’ASM. En fin de compte, la tâche est loin d’être simple car il s’agit d’une activité économique de base qui est très difficile à organiser et qui implique beaucoup de personnes. C’est un enjeu de taille. » ICM
KEARNEY MINE
| project profile
Courtesy of Ontario Graphite
POISED TO COMPETE The Kearney Mine pit, pictured in 2012 with the de-watering process 90% complete
Just four kilometres west of Algonquin Park, near the town of Kearney, Ontario, lies one of the largest confirmed mineral resources of any North American graphite project. Discovered in 1979, it is rich with high-quality, large-flake graphite that commands top prices. Global market forces and production troubles frustrated the first attempt to exploit the resource, but now, 20 years after the Kearney mine shut down, Ontario Graphite is bringing the re-engineered operation back to life. BY | ALEXANDRA LOPEZ-PACHECO
hile graphite is considered a niche market, it is an essential one. The mineral’s heat resistance makes it a key material for the magnesia-carbon bricks that line steel-making furnaces, foils and gaskets. It is also used in lithium-ion batteries, lubricants, solar cells, fuel cells and, of course, the humble pencil – with about 14 billion sold annually. With all its major equipment on site, Ontario Graphite has been building its team and gearing to start operations in early 2014 and ramp up over the course of the year. “We
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have the management team in place, a mill manager, a mine manager and me,” said Jerry Janik, the mine’s general manager, in September. “Combined, we’re pushing 70 years of mining experience. We have about 20 other employees, a fairly good workforce in the area and a good training plan being put together for those used to heavy industry, such as logging. We will provide about 80 full-time jobs.” Also in September, the company released a new NI 43101 study completed by Golder Associates Ltd., using historical drill data as the well as the results of a dozen new
November 2013 | 53
drill holes. The report estimates the mine’s mineral inventory to be 51.5 million tonnes of Indicated Mineral Resources at an average grade of 2.14 per cent carbon graphite (Cg), plus an additional 46.8 million tonnes of Inferred Mineral Resources at an average grade of 2.0 per cent Cg – adding some 20 more years to the mine’s existing 30-year life. While the current permits for the operation are for 20,000 tonnes of material extracted annually for up to 10 years of mining activity, the company expects no issues in getting renewals when the time comes. Canada’s graphite production – currently about 20,000 tonnes per year – comes from two mines, one in B.C., and one in Quebec. In 1989, Cal Graphite began milling ore from the open pit at the Kearney mine, and over the next five years produced almost 17,000 tonnes of flake graphite for Canadian and U.S. customers. By the early 1990s, however, the company was under enormous pressure from an ever-growing giant in China, which was fuelled by the growing belief across the manufacturing sphere that the road to success was paved with lowcost and low-quality graphite. And in those days, China, which has the world’s largest graphite resources, was the mecca for cheap product. It flooded the market with mainly lower-quality small flake graphite. Prices crashed. Canadian exports dropped 10 per cent, and China strengthened its hold on the graphite market. Production and management problems at the Kearney mine compounded those market pressures, and in 1994 the operation was shut down. In the meantime, global demand for graphite has continued to grow rapidly. In fact, it increased from 600,000 tonnes in 2000 to 1.1Mt in 2011. By 2005, prices began to increase, and this renewed interest in past producers. The following year, the mine property was acquired by iCarbon, which was renamed Ontario Graphite Ltd. In 2009, the company’s plans to re-commission the mine were in high gear.
Getting ready Ontario Graphite, owned and financed by a consortium of private equity organizations, and led by an experienced management team, knew the first step to succeeding was to identify what had gone wrong in the original operation. “In the early 1990s, there was a confluence of unfortunate circumstances at the macro and the micro levels,” said Ellerton Castor, the company’s CFO. On the macro side, there was China’s dominance. The country still accounts for 80 percent of all graphite production in the world. As well, the Kearney mine was choking with inefficiencies and bottleneck problems, and it never did achieve its planned raw ore throughput rate of 3,000 tonnes per day. But today, fortune is smiling on graphite producers. Graphite prices have been on an uphill curve, despite fluctuations, with large flake prices at around $1,400-$1,800 per tonne in the last year. China’s graphite sector is undergoing changes that will remove a good chunk of graphite from the
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Courtesy of Ontario Graphite
project profile | K E A R N E Y M I N E
Low-risk reward In 2010, China began consolidating 200 to 250 illegal, privately owned graphite mining operations, reportedly in an effort to be more proactive in addressing the mines’ harmful environmental impacts by putting them under state control. The impact of this is estimated to be a reduction of roughly 200,000 tonnes per year in graphite put out to the world market. Further, in an effort to keep graphite – which is considered a critical manufacturing resource – for domestic use, China has imposed a 20 per cent export duty on graphite and a 17 per cent value added tax. “China has an impact not just on production, but also in terms of exporting and they can pull levers such as export duties, which ultimately affects how much gets exported and the landed price in North America,” says Jay Patel, who leads Ernst & Young’s mining and metals valuation practice in Canada. “So North American manufacturers using graphite in their projects have to look at the risk and volatility in the price they are getting. Is the price going to change on them? Is there a supply risk? And I think that’s where the North American graphite producers have an advantage. They assure the manufacturers there isn’t a supply risk.” In addition to all this, should the electric car market gear up in the coming years, the demand for lithium-ion batteries would take off – as would the need for graphite. All this has not been lost on project developers, especially since manufacturers in the United States are among the world’s top graphite users despite the country producing very little of its own. According to a July 2013 report by U.K.-based Roskill Information Services on the graphite industry, “There are now more than 70 flake graphite projects under development outside China, which have the potential to add 200,000 tonnes per year to global capacity by 2016.” Some 40 of those are in Canada, with almost all still in the early exploration stage. This puts Ontario Graphite at the head of the pack, with Ottawa-based Northern Graphite Corporation the runner-up. The company aims to be in production in early 2015, if it can finance the project.
| project profile
Courtesy of Ontario Graphite
KEARNEY MINE
The mine is located about 100 kilometres south of North Bay, Ontario.
global market (see sidebar). In recent years, scrutiny of the “cheaper at all costs” formula has been growing, including from the Chinese, who are reckoning with the environmental impact that follows from this approach. In addition, wages have increased in China, and the long-term and hidden costs
of complex supply chains dependent on products from China are now better understood. From transportation and warehousing costs to reliability of timely delivery and quality, no longer does the cost/value formula of importing from China seem as straightforward as it once did.
November 2013 | 55
project profile | K E A R N E Y M I N E PROJECT SPECS
Courtesy of Ontario Graphite
RE-COMMISSIONING COST: $67 million MINERAL RESOURCE INDICATED: 51.5 million tonnes at an average grade of 2.14 per cent carbon graphite INFERRED: 46.8 million tonnes at an average grade of 2.0 per cent carbon graphite MINE LIFE: 50+ years MINING FLEET: 4 Cat 775 haul trucks, 1 Cat 990 front-end loader, 1 Cat 390D excavator THROUGHPUT: 3,000 tonnes per day OUTPUT: 20,000 tonnes per year of large-flake graphite
The mine operated for five years before stiff competition and production problems led to the stoppage of production in 1994.
“Now you have a scenario where the North American and Power was a problem for the original operators of the mine. European clients to whom we plan on selling our graphite are Off the grid, the mine simply did not have enough generating interested in an industrialized-world supply they can count on power to maintain plant production. This time, Ontario as a secure source of large flake graphite Graphite will run three 1.24-megawatt provided over a long period of time,” says diesel generators for plant operations and Castor. “The logistics issue is coming into have a fourth on standby. play. They are looking to ensure that the A new 5.5-metre, hydraulically driven process of managing their supply line is as SAG mill has been installed on the existing efficient as possible. Quality control is the mill foundation. The company is also other issue. One of the biggest concerns in adding additional flotation circuits on the buying from China is getting exactly what it head end of the ball mill to improve both is you pay for. You don’t want to be in a sitrecovery and quality, especially of coarse uation where you prepaid for a product and graphite. “The coarser it is, the more it is then you wait six to eight weeks for it to worth,” says Janik. “So the challenge is to – Jerry Janik arrive via containers, and the product that liberate the graphite without breaking the you think you are getting is not exactly up flake. That is a processing and mining to snuff and has to be preprocessed prior to being introduced challenge. We’re addressing that right from the drill-blast through a manufacturing process. That costs money.” pattern, how we haul and how we crush and size the material for flotation and with the extra flotation we’re putting in Getting set by doing it right to capture what was lost in the previous operation,” he Ontario Graphite began its EPCM process with a small points out. engineering firm. It quickly realized, however, that the mine Other new equipment includes high-efficiency horizontal would need a comprehensive plan not to just re-commission it screens that are easy to maintain and fully enclosed to contain but also re-design the mine in order to address the bottleneck dust. Waste heat from the generators will be used to dry the issues that were largely engineered into the system, and to cre- graphite concentrate to make the most of the fuel burned for ate an operation capable of optimal production at all times. It power generation. hired international engineering firm DRA Americas Inc. and Vancouver-based project and construction management firm Go! Merit Consultants International Inc. The Kearney mine is about 100 kilometres south of the “We have spent a lot of time redesigning the plant to be much mining supply hub of North Bay and a few hours’ drive from more efficient, and that really goes from the mining methods, port facilities on the Great Lakes. Ontario Graphite expects a the drilling blasting methods, through to power generation,” return on investment within six months, once shipping says Janik. “We have built in some redundancy to the capital begins in early 2014. The bulk of the mine’s output will be equipment, so if we have to do repairs we can maintain produc- used in the production of graphite foil and gaskets. “Most of tion.” Contractors will handle the drilling and blasting, with the the Chinese material flooding the market is medium-sized company managing the mine planning and all subsequent min- product,” says Michael Coscia, the company’s senior viceing steps. “The goal is to use the rock stability to our advantage president of sales and market strategy. “Ours is predominantly and to maximize the pit angle in order to minimize the amount large flake (+50 to +80 mesh with purity between 92 and 97 of necessary waste removal,” he says. “We anticipate that the per cent). We still will never be as cheap as them, but we will new mine plan will include a 3:1 stripping ratio or less.” be very competitive.” CIM
“The challenge is to liberate the graphite without breaking the flake.”
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Avec l’aimable autorisation d’Ontario Graphite
LA MINE KEARNEY
| profil de projet
La mine de Kearney, propriété d’Ontario Graphite, est située à 100 kilomètres au sud de North Bay, en Ontario.
PRÊT À AFFRONTER LA CONCURRENCE PAR | ALEXANDRA LOPEZ-PACHECO
e graphite est considéré comme un marché peu étendu, mais il est pourtant primordial. La résistance à la chaleur de ce minerai en fait un matériau important pour les briques de magnésie-carbone qui entourent les fours dédiés à la fabrication d’acier, ainsi que pour les feuilles de métal et les joints d’étanchéité. On l’utilise aussi dans les batteries au lithium-ion (Li-ion), les lubrifiants, les cellules solaires, les piles à combustibles et bien entendu, le modeste crayon gris qui se vend à 14 milliards d’exemplaires chaque année. Tout l’équipement essentiel d’Ontario Graphite se trouve déjà sur le site, aussi la société s’est concentrée sur la création de son équipe et elle espère commencer l’exploitation début 2014, puis accélérer les opérations pendant l’année. « Notre équipe de direction, dont je fais partie et qui est aussi constituée d’un responsable des broyeurs et d’un responsable de la mine, est en place. À nous trois, nous réunissons près de 70 années d’expérience dans l’exploitation minière », expliquait en septembre Jerry Janik, directeur général de la mine. « Nous avons environ 20 employés, une main-d’œuvre relativement qualifiée dans ce domaine et un plan de formation fiable en cours de développement pour les personnes habituées à l’industrie lourde, comme la diagraphie. Nous prévoyons d’ouvrir environ 80 emplois à temps plein. » Ce même mois, la société a publié un nouveau rapport NI 43-101 réalisé par Golder Associates Ltd. à l’aide de données historiques sur le forage ainsi que de résultats provenant d’une dizaine de nouveaux trous de forage. Le rapport estime l’inventaire des ressources minérales de la mine à 51,5 millions de tonnes de ressources minérales indiquées à une teneur moyenne de 2,14 % de carbone-graphite (Cg), et à 46,8 millions de tonnes supplémentaires de ressources minérales présumées à une teneur moyenne de 2,0 % de Cg, ce qui vient ajouter quelque 20 années supplémentaires au 30 années d’existence de la mine. Les permis actuels d’exploitation autorisent l’extraction de 20 000 tonnes de matériaux sur une période allant jusqu’à 10 ans d’activité minière, mais la société pense pouvoir obtenir facilement des renouvellements le moment venu. La production de graphite au Canada (environ 20 000 tonnes par an actuellement) est assurée par deux mines, l’une en Colombie-Britannique et l’autre au Québec.
L
En 1989, la société Cal Graphite Corporation a commencé ses opérations de broyage du minerai de la mine à ciel ouvert de Kearney, et au cours des cinq années suivantes, elle a produit près de 17 000 tonnes de graphite en paillettes pour des clients canadiens et américains. Au début des années 1990 cependant, la société a subi la pression importante d’un géant chinois, lequel semblait être persuadé que la voie de la réussite passait par la production de graphite de mauvaise qualité à bas prix. À cette époque, la Chine, qui détient la majeure partie des ressources mondiales en graphite, était le paradis des produits à bas prix ; elle a envahi le marché avec des petites paillettes de graphite, principalement de mauvaise qualité. A suivi un effondrement des prix ainsi qu’une baisse des exportations canadiennes de 10 %, ce qui a permis à la Chine de renforcer ses bases sur le marché du graphite. Les problèmes de production et de gestion à la mine Kearney ont aggravé la pression du marché, et en 1994, l’exploitation fermait ses portes. Entre-temps, la demande mondiale en graphite a continué d’augmenter rapidement, pour passer de 600 000 tonnes en 2000 à 1,1 million de tonnes en 2011. En 2005, les prix ont commencé à augmenter, ce qui a généré un regain d’intérêt de la part des anciens producteurs. L’année suivante, la mine était rachetée par iCarbon, qui a par la suite changé son nom en Ontario Graphite Ltd. En 2009, le projet de la société de remettre la mine en service battait son plein.
Se préparer - Tirer des enseignements de nos erreurs passées La société Ontario Graphite est détenue et financée par un consortium d’organismes de capital-investissement, et gérée par une équipe de direction chevronnée. Elle savait que pour réussir, il lui fallait identifier les erreurs qui s’étaient initialement produites dans l’ancienne exploitation. « Au début des années 1990, nous avons été victimes d’un concours de circonstances malheureuses aux macro- et micro-niveaux », expliquait Ellerton Castor, directeur financier de la société. Au macro-niveau, nous avons subi la prédominance de la Chine, laquelle représente encore aujourd’hui 80 % de la production mondiale totale de graphite. November 2013 | 57
profil de projet | L A M I N E K E A R N E Y La mine de Kearney, par ailleurs, s’étouffait en raison de problèmes d’inefficacités et d’obstacles, et n’a jamais atteint le taux d’extraction de minerai brut prévu de 3 000 tonnes par jour. Mais aujourd’hui, au macro-niveau, la fortune sourit aux producteurs de graphite. Les prix du graphite sont sur une courbe ascendante malgré les fluctuations, et les grosses paillettes se vendaient l’année dernière entre 1 400 et 1 800 $ la tonne. Le secteur du graphite en Chine connaît des bouleversements qui risquent de mener au retrait d’une bonne partie du graphite vendu sur le marché mondial. Ces dernières années, beaucoup ont étudié de près la formule « moins cher à tout prix », y compris les producteurs chinois qui se rendent bien compte de l’impact environnemental qui découle de cette approche. En outre, les salaires ont augmenté en Chine, et l’on comprend désormais mieux les coûts cachés et à long terme des chaînes d’approvisionnement complexes dépendant de produits venant de Chine. Qu’il s’agisse des coûts de transport et d’entreposage ou de la fiabilité d’une livraison à temps et avec la qualité attendue, le rapport coût/valeur d’importation de Chine ne semble plus être aussi simple qu’auparavant. « Aujourd’hui, les clients nord-américains et européens à qui nous prévoyons de vendre notre graphite souhaitent assurer leur approvisionnement en grosses paillettes auprès de pays industrialisés sur lesquels ils pourront compter pour une longue période », ajoute M. Castor. « La question de la logistique entre aussi en ligne de compte. Les clients cherchent à s’assurer que le processus de gestion de leur voie d’approvisionnement est aussi efficace que possible. Le contrôle de la qualité est un autre problème. En effet, l’une des principales préoccupations lorsque l’on s’approvisionne en Chine est de s’assurer que la qualité du produit corresponde bien au prix que l’on paye. Personne ne souhaite se retrouver dans une situation où un produit est prépayé et où il faut ensuite attendre entre six et huit semaines pour qu’il arrive par conteneurs ; sans compter que le produit peut ne pas être à la hauteur de nos attentes et devra être prétraité avant d’être introduit par un processus de fabrication. Tout cela coûte de l’argent. »
afin de ne pas avoir à interrompre la production au cas où nous devrions effectuer des réparations. » Les contractants s’occuperont du forage et du dynamitage, et la société gèrera la planification de la mine et toutes les étapes ultérieures de l’exploitation. « L’objectif est d’utiliser la stabilité des roches à notre avantage et d’optimiser l’angle de talus de la mine afin de minimiser la quantité d’enlèvement des déchets nécessaire. Selon nos prévisions, le nouveau plan de la mine comprendra un coefficient de recouvrement de 3:1, voire moins », ajoute-t-il. L’énergie électrique était un problème pour les premiers exploitants de la mine. Lorsqu’elle n’était pas connectée au réseau, la mine ne disposait tout simplement pas de suffisamment d’énergie électrique pour maintenir la production. Cette fois-ci, Ontario Graphite utilisera trois générateurs diesel de 1,24 mégawatt pour les activités de l’exploitation et en aura un quatrième de secours. Un nouveau broyeur SAG hydraulique de 5,5 mètres a été installé sur la fondation du broyeur existant. La société ajoute également des circuits de flottation supplémentaires sur la tête du broyeur à boulets afin d’améliorer la récupération et la qualité du minerai, surtout pour le graphite en paillettes grossières. « Plus les paillettes sont grossières, plus elles ont de valeur », explique M. Janik. « Ainsi, il faut libérer le graphite sans détruire les paillettes, ce qui constitue une grande difficulté pour le traitement et l’exploitation. C’est exactement ce que nous essayons de faire avec la technique de forage et de dynamitage, dans la façon dont nous transportons, concassons puis calibrons le matériel pour la flottation et avec cette flottation supplémentaire, nous tentons de récupérer ce qui a été perdu dans l’opération précédente », fait-il remarquer. Le nouvel équipement compte des tamis horizontaux à haut rendement qui sont faciles à entretenir et totalement hermétiques de manière à contenir la poussière. La chaleur résiduelle provenant du générateur servira à sécher le concentré de graphite afin de tirer au maximum profit du carburant utilisé pour la production d’énergie électrique.
Se préparer en faisant ce qu’il faut
La mine de Kearney se trouve à environ 100 kilomètres au sud du centre d’approvisionnement minier de North Bay et à quelques heures de route des installations portuaires des Grands Lacs. Avec un tel emplacement stratégique, l’équipe de direction prévoit de resserrer les liens avec des clients d’Amérique du Nord, d’Europe et du Japon, et d’assurer la livraison juste-à-temps, orientée client et fiable de grosses paillettes de qualité supérieure (volume de la maille de + 50 à + 80 avec une pureté de 92 à 97 %). Ontario Graphite s’attend à un retour sur investissement dans les six mois, une fois que les expéditions commenceront début 2014. La majeure partie de la production de la mine servira à la production de feuilles et de joints d’étanchéité en graphite. « La plupart du graphite chinois envahissant le marché est un produit de petite taille ou de taille moyenne », déclare Michael Coscia, vice-président directeur de la société chargé des ventes et de la stratégie de marché. « Le graphite que nous proposons consiste principalement en de grosses paillettes. Nous ne serons jamais aussi peu chers que la Chine, mais nous leur ferons fortement concurrence. » ICM
La société Ontario Graphite a entamé son processus d’ingénierie, d’approvisionnement et de gestion de la construction (IAGC) à l’aide d’une petite société d’ingénierie. Elle a cependant rapidement réalisé que la mine aurait besoin d’un plan détaillé, non seulement pour sa remise en service mais aussi pour sa restructuration de manière à aborder les difficultés qui étaient largement intégrée au système et à créer une exploitation pouvant assurer une production optimale à tout moment. Elle a donc engagé la société internationale d’ingénierie DRA Americas Inc. ainsi que la société Merit Consultants International Inc. de gestion de la construction et des projets basée à Vancouver. « Nous avons passé beaucoup de temps à restructurer l’exploitation de manière à ce qu’elle soit vraiment plus efficace, et nous avons pour cela revu nos méthodes d’exploitation minière, de forage et de dynamitage et même la production d’énergie électrique », déclare M. Janik. « Nous avons aussi assuré une certaine redondance au niveau de notre équipement 58 | CIM Magazine | Vol. 8, No. 8
C’est parti !
TECHNOLOGY >> Materials handling
In-pit innovation By Eavan Moore
Courtesy of Metso
In-pit crushing and conveying (IPCC) experts say, with the technology proven, the challenge now is to integrate the systems into mine plans that acknowledge and make use of the special constraints IPCC imposes – in ways that are unique to each site, lending variety to the solutions demanded of suppliers.
Metso's Jorma Kempas says the company's line of Lokotrack fully mobile crushers, including the LT140 shown above, respond to the demand for relatively small mobile units.
The fuel savings, reduced traffic, lower road maintenance costs and fewer diesel emissions that in-pit crushing and conveying offer are persuasive arguments for surface mine planners considering this technology. However, IPCC, whether truly truckless or a hybrid of truck and conveyor use, is still rare compared to truckbased set-ups, especially in hard rock mines. Basic IPCC equipment – shovel, crusher and conveyor – has been in place for a while, points out David Tutton, consultant mining engineer, but the design specifications and capabilities have changed over time. Conventional semi-mobile crushers can be extremely expensive to move, with relocation costs in the hundreds of millions of dollars not unprecedented. This has prompted suppliers to move away from semi-mobile systems that require concrete and instead adopt steel structures. Glenn Davis, system solutions manager at FLSmidth Global Material Handling, says FLSmidth’s customers are asking for smaller, lighter, more easily relocatable equipment. Moreover, Davis says there are regions where mines need to keep it light, as in Indonesia, Malaysia, and other places where competent road-building material is scarce. That means relatively small, low-speed sizers, like FLSmidth’s ABON twin-roll sizer, have widened their scope. “These low-speed sizers have generally been soft rock applications,” he says. “Well, now they’re getting bigger and more robust, and we’re starting to get those into the hard rock application.” Maneuverability, elimination of cantilevered shock loading, and stability needs also drove the development of Sandvik Mining Systems’ PF300 fully mobile crushing station in 2007, according to Karl Ingmarsson, Sandvik’s product line manager of continuous mining and IPCC. “The main difference is that the discharge boom was completely removed to instead be a part of the conveyor bridge or belt wagon,” he says. “This has made the crushing station substantially more maneuverable.” November 2013 | 59
Courtesy of Sandvik
Sandvik's PX200 semi-mobile crusher, shown here at the Mae Moh coal mine in Thailand, relies on modular design to make its relocation easier.
Diverging development paths
Courtesy of Sandvik
David Morrison, manager of integrated mining systems at Sinclair Knight Merz, believes there will be an industry-wide trend toward small crushing equipment with output in the 4,000- to 5,000-tonne-per-hour range to match large hydraulic excavators. “The current cost paradigm in mines is that the big rope shovels, serving the biggest trucks you can buy, have the lowest unit operating cost,” he says. “Now, that’s true in the Western world. It’s not quite true in places like South Africa, where they’ve started looking more at the productivity of the units because labour is not such a large part of the cost structure. And the iron ore industry typically uses
smaller equipment as well. The second-tier miners producing 20 or 30 million tonnes a year will probably drive the definition of IPCC equipment in the next 10 to 15 years.” But Morrison’s suggestion is still larger than some mines prefer. Jorma Kempas, business manager, in-pit crushing solutions, mining and construction at Metso, says the company added a 3,000-tonne-per-hour, fully mobile crusher to its Lokotrack line last year. He says the LT200 jaw crusher platform, which can be moved as often as twice per shift, could be boosted to 5,000 tonnes on softer iron ores. But for harder ores, a large primary gyratory crusher would be required, cutting down on mobility. Metso will develop whatever proves feasible, but, Kempas says, “Our motto is ‘Bring the crusher to the rock,’” adding that “so far the call has been for multiple smaller units.” On the other end of the spectrum, John McCarthy, project manager, IPCC systems at Joy Global, says his customers want larger wares. “Mine operators are looking to reduce the number of vehicles and people in the pit,” he says. “To move 10,000 to 20,000 tonnes per hour or more, smaller equipment is not economically viable. Smaller equipment would require more active benches and the conveyor system becomes more complex.”
Increased maneuverability was integral to the development of Sandvik’s PF300 fully mobile crushing station.
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Future course But no one, Szalanski included, thinks the reason for slow uptake can be pinned on technology. Doug Turnbull, vicepresident continuous mining and IPCC at Sandvik Mining Systems, comments: “The pace of change in technology is not the issue. The real issue is the ability for change in mine planning techniques to cater for a different mining methodology that is accepted by industry in general. It does not help that IPCC as a mining methodology is not even taught at mining universities globally and is one reason Sandvik is creating such a curriculum due out for start of university year 2014. It took more than 30 years for underground longwall technology to be accepted by industry. IPCC can either wait 30 years for similar acceptance levels or learn from the underground coal implementation program, or, better still, learn from the more than 200 existing operational IPCC sites in the world today.”
Courtesy of Joy Global
Joy Global is working on a 9,000- to 11,000-tonne-perhour mobile crushing station that would be integrated with an electric shovel, using an automated swing-to-hopper sequence running on its Centurion control system.“It maximizes production because you’re optimizing that swing cycle,” he explains. “If you’re careful and come in slow, you’re not doing the optimal production. In addition to improved cycle times, the system also prevents impacts between the dipper and crusher, and minimizes spillage, which reduces time and effort required for cleanup between relocating the crusher.” McCarthy says basic engineering on the 4107C has been completed, but the company is still seeking a customer to partner with. Despite a wave of interest in fully mobile crushing four years ago, there have been “a minimal number of fully mobile mining crusher tenders,” he says. Regardless of the manufacturer, the legacy of past mistakes will have to be overcome, says Scot Szalanski, director of IPCC solutions at Peck Tech Consulting Ltd. He explains, “One of the historical problems with high-tonnage mobile crushers was that they were often being built using undercarriages based on spreaders or bucket-wheel excavators, which do not experience the same cantilever loads that high tonnage mobile crushers experience, A mobile crusher using an undercarriage designed for the digging demands of an electric shovel has proven to be more durable, and has been an important model for new high tonnage mobile crusher designs.” The other issue relates to performance expectations. “Mines will perform their total cost of operation analysis, comparing IPCC and a truck fleet, and select the IPCC option,” Szalanski points out. “But what is forgotten is that IPCC is a series operation, and if any one component is not available or not operating at full capacity the entire process suffers.” Remote health monitoring is gaining traction industry-wide and, suggests Szalanski, will both improve availability of IPCC and give mine operators the information they need to better optimize the technology. McCarthy agrees that building in sensors that could predict failures ahead of time is a useful trend. “This is something that we do currently on our shovel and we’re applying it towards our other products, which include crushers and conveyors,” he says. Metso’s Lokotrack equipment also logs and transmits performance data.
Joy Global is developing a mobile crusher that can handle 9,000 to 11,000 tonnes per hour and work in concert with its P&H electric shovel.
Miners have to resist thinking that they can treat IPCC like the off-the-shelf truck it is potentially replacing, suggests Turnbull. “Mine planning is different, mine layout is different, dump development is different, conveyor relocation is different, planning needs to be actually adhered to, which some call inflexibility,” he says. “There are existing mines in the world with IPCC that are exceedingly good at relocating cheaply, quickly and easily – yet there are industry personnel who refuse to accept this is possible.” Part of the problem, he adds, is that the term “semi-mobile” is too broad to be very useful when comparing current systems with those of the past. Tutton and Morrison agree that the specifics of the mine plan make or break IPCC. “Most suppliers generally look at the benefits of IPCC from a unit operating cost point of view, while what drives operating mines is net present value, and that’s very much dictated by the mine plan,” says Tutton, pointing out that the conveyor system cannot move with the vertical development rate usually dictated in copper and gold mines. Morrison proposes that careful, original thinking could help – as well as software better tailored to IPCC. “Because in IPCC cases, the capital cost is a very large component of the total life of mine cost, and because a large portion of the total life of mine cashflow is actually spent before the operations start, this is a substantial problem. Most of the analysis software that’s available for this sort of early-phase study doesn’t give you an answer that reflects this situation,” he says. “It often gives you the wrong answer, in fact. Until that situation’s sorted out, it’s really going to struggle to gain any traction. And so there’s a whole knowledge base that needs to be created in the support industry.” CIM November 2013 | 61
CIM community
Solution mining Ideas, innovation and experience feed the conversation at MEMO 2013 By Ryan Bergen
Kamloops hosted MEMO 2013, which brought roughly 700 mining professionals to south-central B.C.’s mining hub for three days of talks, technical sessions and a sold-out trade show.
Mining activity in south-central B.C. is booming and this activity was the backdrop for the latest Maintenance Engineering/Mine Operators (MEMO) conference, which attracted more than 700 exhibitors, delegates and visitors to Kamloops, the region’s mining centre.
In 2011, Copper Mountain went into production, and close on its heels New Gold commissioned the New Afton mine – Canada’s only block caving operation. KGHM International has proposed yet another project near Kamloops, and Teck Resources’ High-
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62 | CIM Magazine | Vol. 8, No. 8
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land Valley Copper, a long-time producer, is in the middle of a major mill upgrade. “Kamloops is the mining hub for B.C. right now,” confirmed metallurgical consultant Tom Shouldice, who is a member of CIM’s South Central British Columbia Branch and a director of business development group Venture Kamloops. The city, said Shouldice, has the advantage of being a supply hub for not only local mines but also for operations like Taseko’s Gibraltar mine and Imperial Metals’ Mount Polley mine, just a few hours to the north. MEMO’s technical program followed three tracks – maintenance and reliability; mining and process operations; and responsible mining – and balanced presentations from operations with those of equipment and service suppliers. All of the presentations, explained technical program co-chair Jo-Anne Boucher, were reviewed to make sure they were both factually accurate and also appropriate for the engineering and operations audience. “We wanted to ensure the program was technically sound, case study-based and met the needs of operators,” she explained.
Is your member profile up to date? of operators and technicians as apprenticeships at mining operations become rarer. Sean Waller, CEO of Candente Copper, lauded the longevity of mining in the Highland Valley as an “example of mining done right” and suggested that project planners should be more mindful of the social and economic impacts of high-volume, short-lived mines on the communities that host them. Robert Pease, CEO of Sabina Gold, and Keith Matthew, former chief of the local Simpcw First Nation, joined Knight and Waller on the panel that was moderated by Colin Joudrie, Teck Resources’ vice-president of business development. The sold-out trade show, which included roughly 80 product and service providers looking to connect with operations and maintenance professionals, demonstrated the industry’s innovative spirit. “Miners are very inventive people,” said Rob Taylor, president of RST Instruments. The company’s convergence monitoring system was the result of its collaboration with the operations team at the New Afton mine. “They are thinking stuff up all the time,” he said. “They ask us if we can do ‘x’, and we say ‘Why not?’” MEMO 2014 will be hosted by the Quebec North-East Branch in Sept-Iles, Quebec, September 11 to 14, 2014.
The MEMO lineup in Kamloops included the always lively Mining 4 Society (M4S) show. The interactive and educational open house is designed to introduce elementary and secondary school students to the essential role that mining and minerals play in day-to-day life. The event featured 25 pavilions with hands-on activities and instruction about the mining cycle, attracting 1,400 students and teachers and another 200 members of the public.
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Highland Valley Copper, a fixture of the B.C. mining scene, was a vital contributor to the technical proceedings. Brian Connors, a reliability engineer at the mine, outlined the operation’s work to replace its wornout flotation circuit and pebble crushers. This includes an extensive scaling up of reliability-centred maintenance (RCM) work – over 100 RCM sessions and counting – to ensure the new installation performs to expectations once the work is completed, which is scheduled to be in January. Another Highland Valley presentation detailed the impressive progress the operation has made in instituting a “no idling” policy to reduce diesel consumption and emissions. Whenever you gather miners at a conference, inevitably the topic of skills shortages arises. “Entry level miners aren’t getting lessons passed down,” said Redpath Group electrical engineer Jeremy Berg. In response, he described how the company has adapted its shaft sinking equipment to make it more familiar to workers from other industries. The need to innovate also animated the event’s plenary session. SMS Komatsu CEO Bruce Knight explained his company has established its own training program to sharpen the skills
p +200 membres corporatifs p +14 000 membres p +35 sections locales p 10 sociétés techniques p 1 communauté influente et dynamique
November 2013 | 63
CIM community
A practised first impression Introducing CSR into geology and engineering programs would benefit industry by Correy Baldwin
In May 2003, Meridian Gold abandoned its Esquel gold project in southern Argentina, faced with overwhelming opposition from the local community. Esquel residents argued the company had disregarded their concerns from the very beginning and demanded an end to development. Having lost its social licence, Meridian conceded. “That was a $381-million mistake and it was completely avoidable,” said Jan Boon, a scientist emeritus with Natural Resources Canada and a member of the executive committee for the Centre for Excellence in Corporate Social Responsibility. While companies tend to employ community engagement professionals to communicate with local communities, problems can begin early. For instance, the first impressions created by geologists and engineers, often the first employees to encounter locals, can have lasting effects on the success or failure of any future project in the area.
MINING 4 EVERYONE
“We call them the ambassadors of the mining industry because whatever they do is followed by the rest of the mining cycle, and they can leave a positive legacy or a negative legacy,” said Bernarda Elizalde, co-founder of Responsible Mineral Development. “They set the tone for what will happen in the future. If they do things wrong, they can damage the relationship with communities, but if they do things right, they can help the company gain their social licence to operate from the very beginning.” A greater knowledge of social responsibility among these first ambassadors would help companies avoid costly social problems, according to Boon. This is why he is heading up an initiative to push universities to include more social responsibility training in geology and engineering technical programs, and to offer CSR certificate programs. The idea is in its early stages, but working groups in Canada and Peru will be consulting with industry organi-
zations like MAC and PDAC, along with university and community groups, with the goal of eventually drafting and implementing CSR curricula into university programs. Some universities have begun to offer CSR training, and general CSR certificate programs like those offered at McGill and Queen’s also exist. But Boon said they tend to train CSR specialists rather than technical professionals, and he is instead advocating a more inclusive approach: “CSR really has to permeate the company, otherwise in the long run it won’t work.” Cooper Quinn, a senior geologist with McLeod Williams and 2009 B.Sc. graduate of Simon Fraser University’s earth sciences program, sees the benefit of such an initiative. “As a geologist, you might be thrown out into the field with a local or First Nations person from the community, so you need to have some kind of awareness of the issues,” he said. “And really, I don’t think people coming out of school have any awareness. There
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he said, “it’s just as important to explain to people what you’re doing. Sometimes it just takes 20 minutes.” The communication lines need to remain open too, said Boon: “The phrase ‘social licence to operate’ suggests
that you get something and that’s it. But in reality it’s not something that gets signed and then is over and done with. It keeps changing all the time. Dialogue is not a package and a project. It’s a way of life.” CIM
CIM Award names change, prestige remains the same he annual CIM Awards ceremony is a centrepiece of the CIM Convention. It is the opportunity to honour important figures from the rich history of CIM and mining, while also giving Canada’s brightest and hardest-working mining professionals the opportunity to receive some well-deserved recognition from their peers for their efforts. To ensure the tradition endures, CIM recently updated the names of more than a dozen of its awards to provide members seeking to nominate a colleague a clearer understanding of the nature of achievement each award recognizes. And do not forget, the awards nomination process is underway. To nominate someone who you think is deserving of recognition, visit the Awards section at cim.org.
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really isn’t any social responsibility education at the university level. “If people were more educated straight out of the gate, it would benefit the industry as a whole,” Quinn said, adding this would be especially helpful for the juniors, “where the resources are a little bit tighter. A junior mining company of 10 people isn’t going to have their own [CSR] specialists who do nothing but that for a small company.” Dialogue has to start at the very first moment, said Boon, but it must also be understood as a process. “The point of a dialogue is that you interact, that you understand the other party’s viewpoints and respect what they say,” he added. Basic CSR, Quinn suggested, is not complicated: “A lot of it comes down to common sense. Being nice to people. Treating people like human beings. If people have questions, explain things to them.” Most issues, he added, stem from a lack of communication. “Even if you’re just doing some soil sampling,”
Hendrick Falck (left) accepts the J.C. Sproule Memorial Plaque at the 2013 CIM Awards. The award, renamed the J.C. Sproule Northern Exploration Award, is one of several honours whose names have been changed to more clearly represent the spirit of the awards.
GLOBAL DIMENSIONS OF MINING • Social & Environmental Stewardship • NGOs - Partners in Development • Global Projects Update
INNOVATIONS • Green Mining/Mining Innovations Council • Innovations in Energy Minerals • Powering Your Mine
HARNESSING OUR DIVERSE WORLD • Diversity 101 • Maximizing the Workforce • Resource Nationalism & Transparency
REGISTRATION OPENS DECEMBER 1, 2013
MANAGING OPERATIONS - MINE TO MILL • Safety • Mining • Processing • Integration for Optimization
CONSTRUCTION TO PRODUCTION • Case Studies • Assessing the Construction Project • Developing in Non Mining Cultures (It’s All About the Water)
VANCOUVER2014.CIM.ORG
46th ANNUAL
CANADIAN MINERAL PROCESSORS CONFERENCE 46e CONFÉRENCE ANNUELLE DES
MINÉRALURGISTES DU CANADA We are pleased to invite you and your colleagues to attend the 46th Annual Conference of the Canadian Mineral Processors to be held at the Westin Hotel in Ottawa from January 21 to 23, 2014. For over 45 years, the CMP Conference has provided a forum for discussing best practices and the latest improvements in mineral processing technology. Over 600 delegates attended last year’s conference and profited from the outstanding opportunities in networking, knowledge sharing and personal development the CMP Conference consistently offers. The technical program will be the heart and soul of the conference with close to 40 technical papers presented by fellow mill operators and mineral processing professionals. In addition to discussions on Canadian milling practices, international speakers will weigh in on the mineral processing challenges they encounter abroad. We look forward to you joining us in the capital this January. – CMP Executive Nous sommes heureux de vous inviter, ainsi que vos collègues, à participer à la 46e Conférence annuelle des minéralurgistes du Canada qui aura lieu à Ottawa du 21 au 23 janvier 2014 à l’Hôtel Westin. Depuis plus de 45 ans, la CMP se fait un devoir de créer un lieu de discussion où les bonnes pratiques et les dernières techniques de minéralurgie sont à l’honneur. Plus de 600 délégués ont participé à la conférence l’an dernier pour profiter de cette occasion exceptionnelle de réseautage, de partage d’expériences industrielles et de développement professionnel.
JANUARY | 21-23 | JANVIER 2014 WESTIN HOTEL | OTTAWA, CANADA
Cette année encore, le programme technique sera au coeur de l’évènement avec près de 40 articles présentés par des opérateurs d’usines et autres professionnels de la minéralurgie. Pendant que plusieurs se concentreront sur des problématiques typiquement canadiennes, d’autres présentateurs discuteront des défis techniques auxquels ils font face à l’étranger. En espérant vous voir en grand nombre dans la capitale canadienne en janvier prochain. – Conseil d’administration de la Société canadienne du traitement des minerais
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www.cmpsoc.ca Les frais de préinscription sont de 525 $ pour les membres de l’ICM, TMS et AIME et de 730$ pour les autres participants (taxes incluses). Le tarif pour les non-membres comprend un abonnement d’un an à l’ICM. Ces frais donnent droit aux trois jours de conférence, à une copie des comptes rendus, aux pauses-café, aux dîners de mardi et mercredi ainsi qu’à la réception sociale du mardi soir de même qu’à la réception et au banquet des récompenses du mercredi soir. Veuillez vous inscrire en ligne à la conférence à l’adresse www.cmpsoc.ca, en précisant les évènements sociaux auxquels vous souhaitez participer.
REGISTRATION | INSCRIPTION The early registration fee including tax is $525 for CIM/AIME/TMS members, $730 for non-members (includes one-year membership to CIM). Registration includes the three-day meeting, coffee breaks, the Tuesday and Wednesday luncheons and evening social receptions, the Wednesday reception and awards banquet, as well as a copy of the proceedings. Conference registration and attendance at social events should be indicated when registering online at www.cmpsoc.ca. Registration kits for pre-registered delegates can be picked up at the conference registration desk, Fourth Floor, Westin Hotel, Monday evening between 19:00 and 22:00, and Tuesday to Thursday between 7:00 and 15:00. New registrations will be taken during these times.
Tous les délégués préinscrits pourront recevoir leur trousse d’inscription en se présentant au bureau d’inscription, 4e étage de l’Hôtel Westin, le lundi soir entre 19 h et 22 h et du mardi au jeudi de 7 h à 15 h. Les autres délégués qui désirent participer à la conférence pourront également s’inscrire à cet endroit, aux mêmes heures.
Note: Pre-registration forms must be received by December 18, 2013, and any requests for refunds must be made in writing prior to this date. An administration fee of $100 will be charged for new and/or cancelled registrations after this date.
Remarques : Veuillez envoyer vos formulaires de préinscription avant le 18 décembre 2013. Les demandes de remboursement doivent être faites, par écrit, avant cette date. Des frais de 100 $ s’appliqueront à toute nouvelle inscription ainsi qu’à toute annulation après cette date.
SHORT COURSES | COURS ABRÉGÉS Nine short courses are being offered at CMP 2014. Registration includes lunch, coffee breaks and course materials. Register early as space is limited. COURSE COURS
Neuf cours abrégés seront donnés au CMP 2014. Le dîner, les pauses-café et le matériel didactique sont inclus dans les frais d’inscription. Les places disponibles étant limitées, veuillez vous inscrire tôt.
PRESENTER PRÉSENTATEUR
DATE
LANGUAGE LANGUE
Frederic Flament
Sunday (full day) | Dimanche (journée complète)
French | Français
Bond-Based Grinding Models for Design and Geometallurgy
Alex Doll
Sunday (full day) | Dimanche (journée complète)
English | Anglais
Lime Slaking in Mining Applications
Ali Abbas
Monday (half-day, morning) | Lundi (demi-journée, matin)
English | Anglais
Flotation Fundamentals and Applications
Janusz Laskowski
Sunday and Monday (full days) | Dimanche et lundi (journées complètes)
English | Anglais
Tailings Preparation, Transport and Deposition
Robert Cooke
Monday (full day) | Lundi (journée complète)
English | Anglais
Gravity Concentration of Gold using Centrifugal Gravity Concentrators
Michael Fullam
Monday (full day) | Lundi (journée complète)
English | Anglais
Iron Ore Processing in Canada
Jan de Bakker
Sunday (full day) | Dimanche (journée complète)
English | Anglais
Tassos Grammatikopoulos
Monday (full day) | Lundi (journée complète)
English | Anglais
Michel Brissette
Monday (half-day, afternoon) | Lundi (demi-journée, après-midi)
French | Français
State of the Art Metallurgical Accounting
Applied Mineralogy using Automated Methods for the Mining Industry Dimensionnement de Broyeurs et Géométallurgie: la méthodologie SAGDesign™
November 2013 | 67
AUTHORS | AUTEURS Authors, session chairs and regional representatives must register as conference delegates. A speaker’s breakfast will be provided the day of their presentation at 7:00, tentatively held in the Quebec Room. Please contact John Chaulk for presentation information at 613.947.0394 or john.chaulk@nrcan.gc.ca. Tous les auteurs, les présidents de sessions et les représentants régionaux doivent s’inscrire comme délégués à la conférence. Un déjeuner sera servi le jour de leur présentation à 7 h, et ce possiblement dans le Salon Québec. Veuillez contacter John Chaulk au 613.947.0394 ou john.chaulk@nrcan.gc.ca pour obtenir des informations quant aux présentations.
COMPANION’S PROGRAM | PROGRAMME COMPLÉMENTAIRE The companion’s program offers a daily Coffee and Tea Social, so companions can arrange their activities for the day. The cost of this program is $25. Le programme complémentaire offrira une rencontre sociale thé/café quotidienne, ce qui permettra aux accompagnateurs d’organiser leurs activités pour la journée. Le coût de ce programme est de 25 $.
TECHNICAL PROGRAM | PROGRAMME TECHNIQUE GRINDING VXP Stirred Mill Optimization at Casmyn Mining Turk Mine SCOTT REDDICK
Innovative Gearless Drive Technology for Grinding and Conveying TIMO ROESCH
Predicting HPGR Performance and Understanding Rock Particle Behaviour through DEM Modelling AMIT KUMAR Towards an Integrated Framework for Asset and Process Health Monitoring and Optimization on a Milling Circuit SIMON FRANK Moly-Cop Tools Applications for the Assessment of Grinding Media Performance at Full Industrial Scale RICH MORROW Towards a Better Understanding of Stirred Milling – Estimating Power Consumption and Energy Use Technologies
NEW TECHNOLOGY Pneumapress Operation at the Highland Valley Copper Mine – Filtration DAVE HANFLAND The Effect of Lump Ablation on Pressure Gradient in Oil Sand Hydrotransport Pipelines DAN WOLFE The Aurora Super Pump – Part II: Field Performance of a New Hydrotransport Pump DAN WOLFE Wireless Communication in Mineral Processing Applications FRANÇOIS DUSABLON
Do You Need Advanced Control? MICHEL RUEL Real-Time Analysis of Conveyed Bulk Materials for Optimized Plant Performance HOWARD POWELL
PETER RADZISZEWSKI
RESEARCH
Investigation into Iron Ore Concentrate Moisture Issues ANNIE WANG Beneficiation of Oolitic Iron Ores VICTOR HERNANDEZ Significant Improvements are Possible from Process Optimization
Review of Self-Heating Testing Methodologies FRANK ROSENBLUM Gibraltar Development Plan 3 SIMON TYRRELL Commissioning of Sandfire Resources Copper Processing Plant at Degrussa, Western Australia SANJEEVA LATCHIREDDI Project Execution & Cost Escalation in the Mining Industry
JON MAKI
KEN THOMAS
Simulation of an Iron Ore Concentration Circuit Using Mineral Size Recovery Curves of Industrial Spirals CLAUDE BAZIN
A New Potential Standard in Monitoring and Optimizing Deposit Control in Mining Process Waters WILLIAM GONZALEZ Practical Operational Aspects of Dense Medium Cyclone Separation FAAN BORMAN
IRON ORE PROCESSING
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www.cmpsoc.ca ACCOMMODATIONS | HÉBERGEMENT A special rate of $197 (single/double) and $247 (deluxe), which includes complementary Internet, has been negotiated at the Westin Hotel (reference the Canadian Mineral Processors Conference). The Westin Hotel will only guarantee these rooms until January 6, 2014, so reserve today at 613.560.7000 or online through the CMP website. Un nombre limité de chambres a été négocié au tarif spécial de 197 $ (en occupation simple/double) et 247 $ (de luxe) incluant l’internet, avec l’Hôtel Westin (mentionnez la conférence des Minéralurgistes du Canada). Veuillez noter que les chambres sont retenues à votre intention jusqu’au 6 janvier 2014. Réservez votre chambre en communiquant directement avec l’Hôtel Westin au 613.560.7000 ou en ligne à partir du lien situé sur le site internet de CMP.
SOCIAL PROGRAM | PROGRAMME SOCIAL Monday | Lundi 20:00 – 23:00
FLOTATION
Student Mixer Fourth Floor, Westin Hotel Soirée « Student Mixer » 4e étage, Hôtel Westin
Tuesday | Mardi 12:00
Beer and Sandwich Luncheon Fourth Floor, Westin Hotel Diner bières et sandwichs 4e étage, Hôtel Westin
SIMON WELSBY
19:00
Including In-Process Inventories in the Metal Accounting of Flotation Plants LUC LACHANCE Necessity Driving Change and Improvement to the Cleaner Circuit at Lumwana Copper Concentrator RODRIGO ARAYA
Hockey Cup Challenge Carleton University Défi de hockey Université Carleton
21:00
Chairman’s Reception Governor General Ballroom Réception du président Salle de bal Governor General
Mineral Process Plant Monitoring at Greens Creek: By Looking at Minerals Themselves – Flotation Characterization CHRIS MARTIN Pilot Scale Frother Testing at Highland Valley Copper
Low pH Trial in the Ernest Henry Mining Copper Rougher Flotation Circuit JESSICA KINAL LEACHING AND ROASTING Problem Identification for Low Gold Recovery and Application of Treatment at Somita Plant CAROLINE OLSEN Methodology to Control and Prevent Ag Precipitation in Cyanidation Circuit Using UV Spectrophotometry BENOIT LEVASSEUR Evaluation of Bioleaching of Miduk Copper Ore MOSTAFA MOLLAEI Partial Roasting of Copper Concentrate with Stabilization of Arsenic LARS HEDSTROM Antiscalants for Calcium Scale Control in Gold Process Circuits
Wednesday | Mercredi 12:00
Business Meeting Luncheon Fourth Floor, Westin Hotel Dîner de réunion d’affaires 4e étage, Hôtel Westin
18:00
Executive Reception Colonel By Suite Réception des dirigeants Suite Colonel By
18:30
Reception Fourth Floor, Westin Hotel Réception 4e étage, Hôtel Westin
19:30
Annual Banquet Confederation Ballroom Banquet annuel Salle de bal Conféderation
WAYNE DICKINSON
Magnetic Gold: Losses from the Musselwhite Gold Recovery Circuit BRENT HILSCHER PLENARY CIM Leadership Program SCOTT MARTIN
November 2013 | 69
Certification in Ore Reserve Risk and Strategic Mine Planning Optimization Spread over a period of four months, this four-week course is designed for busy mining professionals who wish to update their skills and knowledge base in modern modelling techniques for ore bodies and new risk-based optimization methodologies for strategic mine planning. Gain practical experience by applying the following hands-on concepts and technical methods: methods for modelling ore bodies; stochastic simulations, case studies and models of geological uncertainty; and demand-driven production scheduling and geological risk. INSTRUCTOR Roussos Dimitrakopoulos, McGill University, Canada • DATES Week 1: May 5-9, Week 2: June 2-6, Week 3: July 7-11, Week 4: August 25-28, 2014 • LOCATION Montreal, Quebec, Canada • INFO & REGISTRATION http://www.mcgill.ca/continuingstudies/programs-and-courses/engineering0/certification-ore-reserve-risk-and-mine-planning-optimization
An Introduction to Cutoff Grade: Theory and Practice in Open Pit and Underground Mines (with a new section on blending optimization strategy) Cutoff grades are essential in determining the economic feasibility and mine life of a project. Learn how to solve most cutoff grade estimation problems by developing techniques and graphical analytical methods, about the relationship between cutoff grades and the design of pushbacks in open pit mines, and the optimization of block sizes in caving methods. INSTRUCTOR Jean-Michel Rendu, USA • DATE September 3-5, 2014 • LOCATION Montreal, Quebec, Canada
Geostatistical Mineral Resource Estimation and Meeting the New Regulatory Environment: Step by Step from Sampling to Grade Control Learn about the latest regulations on public reporting of resources/reserves through state-of-the-art statistical and geostatistical techniques; how to apply geostatistics to predict dilution and adapt reserve estimates to that predicted dilution; how geostatistics can help you categorize your resources in an objective manner; and how to understand principles of NI 43-101 and the SME Guide. INSTRUCTORS Marcelo Godoy, Golder Associates, Chile; and Roussos Dimitrakopoulos, McGill University, Canada • DATE September 8-12, 2014 • LOCATION Montreal, Quebec, Canada
Quantitative Mineral Resource Assessments: An Integrated Approach to Planning for Exploration Risk Reduction Learn about exploration risk analysis for strategic planning. Understand how to demonstrate how operational mineral deposit models can reduce uncertainties; make estimates of the number of undiscovered deposits; and integrate the information and examine the economic possibilities. INSTRUCTOR Don Singer, USA • DATE September 29-October 1, 2014 • LOCATION Montreal, Quebec, Canada
Strategic Risk Management in Mine Design: From Life-of-Mine to Mining Complexes Learn how you can have a significant, positive impact on your company’s bottom line by utilizing strategic mine planning methodologies and software; improve your understanding of strategic mine planning and life-of-mine optimization concepts, as well as your understanding of the relationship of uncertainty and risk, and how to exploit uncertainty in order to maximize profitability. Note: The strategic mine planning software used is Whittle. An optional half-day skills refresher workshop on Whittle may be available. INSTRUCTORS Tarrant Elkington, Snowden, Australia; and Roussos Dimitrakopoulos, McGill University, Canada • DATE October 15-17, 2014 • LOCATION Montreal, Quebec, Canada
TECHNICAL ABSTRACTS
CIM
journal
Excerpts taken from abstracts in CIM Journal, Vol. 4, No. 4. To subscribe, to submit a paper or to be a peer reviewer—www.cim.org
Comparison of uranium solvent extraction strip options D. van Tonder, AMEC Mining & Metals, Perth, Western Australia; and C. Edwards, AMEC Americas Ltd., Saskatoon, Saskatchewan, Canada
ABSTRACT Solvent extraction is used in many acid leach uranium circuits to upgrade and purify the uranium-bearing solution prior to final product precipitation. A number of strip options are available to recover the uranium from the loaded organic. This paper compares seven of these options on the basis of typical capital and operating costs for the solvent extraction circuit and downstream uranium processing and also considers other related issues. The aim is to provide an objective comparative assessment of these options that could be used as a qualitative guide in process selection or improvement.
RÉSUMÉ L’extraction par solvants est utilisée dans de nombreux circuits de lixiviation acide de l’uranium pour rehausser la teneur et purifier la solution uranifère avant la précipitation du produit final. Il existe plusieurs options pour retirer l’uranium du mélange organique. Le présent article compare entre elles sept de ces options en se basant sur les coûts typiques en immobilisations et d’exploitation pour le circuit d’extraction par solvants et le traitement subséquent de l’uranium; d’autres sujets connexes sont aussi abordés. Le but est de fournir une évaluation comparative et objective de ces options qui pourraient servir de guide qualificatif dans le choix ou l’amélioration d’un procédé.
From theory to practice: Designing for situation awareness to transform shovel operator interfaces, reduce costs, and increase safety E. Onal, C. Craddock, and M. R. Endsley, SA Technologies, Inc., Marietta, Georgia, USA; and A. Chapman, Barrick Gold Inc., Toronto, Ontario, Canada
ABSTRACT Mining equipment operators must interpret and respond to complex information delivered by technologycentric rather than user-centric systems. The ability to achieve high situation awareness (SA) in the face of this data overload is a key challenge to effective decision-making and information exploitation. Incidents attributed to human error that compromise safety and result in loss of revenue, or even life, are often the result of system designs that overload human cognitive capabilities. This paper defines SA as it relates to the operation of mining equipment and describes the design and preliminary evaluation of a new electric shovel operator user interface.
RÉSUMÉ Les opérateurs d’équipements miniers doivent interpréter et répondre à des informations complexes provenant de systèmes centrés sur la technologie plutôt que sur l’utilisateur. Face à cette surcharge de données, la capacité d’avoir une connaissance élevée de la situation (CS) constitue un défi majeur pour la prise efficace de décisions et l’exploitation de l’information. Des incidents attribués à l’erreur humaine, pouvant compromettre la sécurité et engendrer une perte de revenus ou des pertes de vies, sont souvent le résultat de conceptions de systèmes qui surchargent les capacités cognitives humaines. Le présent article définit la connaissance de la situation en ce qu’elle a trait à l’opération des équipements miniers et décrit la conception et l’évaluation préliminaire d’une nouvelle interface pelle électrique-opérateur utilisateur.
Processing history at Vale Europe’s (Inco’s) nickel refinery in Clydach, Wales K. Lascelles, Vale Europe Ltd., Clydach refinery, Clydach, West Glamorgan, Wales; and B. R. Conard, BRConard Consulting, Inc., Oakville, Ontario, Canada
ABSTRACT Nickel compounds vary significantly in their toxicological properties, so it is critical that continuing studies to accurately quantify worker exposures consider the processing that accompanies refining nickel-containing materials. The Clydach nickel refinery, which has operated for more than 100 years, was the first nickel-producing facility to show a high risk for lung and nasal-sinus cancers among workers employed since it opened in 1902. Process chemistry and equipment have changed dramatically over Clydach’s history. This paper describes the processing evolution at Clydach with a focus on the propensity for aerosol formation and the forms of nickel in airborne dusts.
RÉSUMÉ Les propriétés toxicologiques des composés de nickel varient considérablement, il est donc essentiel que les études en cours analysent les traitements qui accompagnent l’affinage de matériaux contenant du nickel afin de quantifier l’exposition des travailleurs de manière précise. L’affinerie de Clydach, en opération depuis plus de 100 ans, a été la première installation à produire du nickel à montrer un risque élevé de cancers du poumon et du nez/des sinus chez les travailleurs depuis son ouverture en 1902. La chimie du procédé et les équipements ont grandement changé au cours de l’histoire de l’affinerie de Clydach. Le présent article décrit l’évolution du procédé à l’affinerie Clydach; il souligne la tendance à la formation d’aérosols et les formes de nickel dans les poussières aéroportées.
November 2013 | 71
TECHNICAL ABSTRACTS
canadian metallurgical quarterly Excerpts taken from abstracts in CMQ, Vol. 53, No. 3. To subscribe – www.cmq-online.ca
Thermodynamic modelling of Fe-Sm and Fe-Dy systems B. Konar, J. Kim, and I.-H. Jung, Department of Mining and Materials Engineering, McGill University, Montreal, Quebec, Canada
ABSTRACT In order to understand the chemical interactions between Fe and Sm and Fe and Dy, the Fe-Sm and Fe-Dy systems were critically evaluated and optimized based on all available and reliable literature experimental data. The Modified Quasichemical Model was employed to model the liquid phase. From the thermodynamic modelling, a consistent thermodynamic description of the intermetallic and liquid phases occurring in the respective binary systems was obtained, which can be integrated in multicomponent rare earth metal systems.
RÉSUMÉ Afin de comprendre les interactions chimiques entre Fe et Sm et entre Fe et Dy, on a évalué de façon critique les systèmes FeSm et Fe-Dy et on les a optimisés en se basant sur toutes les données expérimentales fiables et disponibles dans la littérature. On a utilisé le “Modèle Quasi-chimique Modifié” pour modéliser la phase liquide. À partir de la modélisation thermodynamique, on a obtenu une description thermodynamique consistante des phases intermétalliques et liquides qui se trouvent dans les systèmes binaires respectifs, lesquelles on peut intégrer dans les systèmes de métal de terre rare à composants multiples.
Characterisation of rare earth minerals with field emission scanning electron microscopy H. Demers, R. Gauvin, N. Brodusch, and K. Waters, Department of Mining and Materials Engineering, McGill University, Montreal, Quebec, Canada
ABSTRACT Rare earth elements are becoming increasingly in demand, due to their prevalence in both renewable energy devices and high end electronics. The characterisation of the composition and morphology of the various phases that have valuable rare earth elements in the ores are needed in conjunction with the study of their physicochemical properties to optimise industrial process to extract the minerals containing the rare earth elements. Rare earth bearing minerals contain many elements with overlapping X-ray peaks (L- and M-lines) with an energy dispersive spectrometry detector, requiring a high degree of X-ray energy resolution. A program was developed to obtain the intensity of each peak by deconvolution of the X-ray spectrum. Low accelerating voltage of less than 5 kV and small beam diameter of less than 10 nm of a cold field emission scanning electron microscope allow x-ray microanalysis on the nanometre scale. A 100 nm wide phase was observed at 4 kV on a backscattered electron micrograph. Furthermore, a small beam diameter of less than 10 nm was used for identification of small phases of a few micrometres.
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RÉSUMÉ Les éléments de terre rare sont de plus en plus en demande, grâce à leur prévalence tant dans les dispositifs d’énergie renouvelable que dans l’électronique de haute gamme. On a besoin de caractériser la composition et la morphologie des différentes phases qui contiennent des terres rares de valeur dans les minerais, en combinaison avec l’étude de leurs propriétés physico-chimiques, afin d’optimiser le procédé industriel d’extraction des minéraux contenant les terres rares. Les minéraux porteurs de terre rare contiennent plusieurs éléments ayant des pics de rayons x qui se chevauchent (lignes L et M) avec un détecteur de spectroscopie à dispersion d’énergie, nécessitant une haute résolution énergétique. On a développé un programme visant à obtenir l’intensité de chaque pic par déconvolution du spectre de rayons x. Un faible voltage d’accélération de moins que 5 kV et un faisceau à faible diamètre de moins que 10 nm d’un microscope électronique à balayage par cathode froide permettent la microanalyse des rayons x à l’échelle du nanomètre. On a observé une phase de 100 nm de largeur à 4 kV sur une micrographe d’électrons rétrodiffusés. De plus, on a utilisé un faisceau de faible diamètre de moins que 10 nm pour l’identification de petites phases de quelques μm.
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IN THE NEXT ISSUE OUTLOOK As the current year comes to a close, we draw your attention to 14 crucial stories developing for 2014
PILOT PLANTS For every proven technology there is at least one pilot plant. We take a look at some innovative ideas that may one day be mainstays of the industry
TECHNOLOGY
ADVERTISERS OBC Mammoet Canada
11 Boart Longyear
18 Martin Engineering
13 Breaker Technology Ltd.
21 Metso Minerals Industries, Inc.
14-15 Cementation Canada Inc. 43 Colorado School of Mines 37 Conspec Controls Ltd 35 DMC Mining Services 55 DRA Americas Inc. 25 Dumas Contracting 33 Endress+Hauser
27 RedPath 17 Rosta Inc. IBC Schneider Electric 34 SME IFC SSAB 26 Suncor Energy 19 Valard Construction Limited
23 Goldcorp Inc.
31 Venture Kamloops
22 Golder Associates Ltd.
73 Petro-Canada
28 Hewitt Equipment 9 L&H Industrial, Inc.
Silvercrest Mines heads underground at its Santa Elena silver mine in northern Mexico
3 Petro-Canada
30 Eriez Manufacturing Co.
7 Hard-Line Solutions
PROJECT PROFILE
73 Innovation showcase 73 Product file B.I.D. Canada Ltd
Courtesy of Silvercrest Mines
29 BBA
Advances in ground control
November 2013 | 73
Yellowknife’s goldless gold mine by Ryan Silke
I
74 | CIM Magazine | Vol. 8, No. 8
Courtesy of NWT Mining Heritage Society – Fortens Collection
n 1945, Yellowknife the TSE for lax rules, but was the hotspot for others remained conmineral speculation, vinced that Ciglen was the following the discovery of one gaming the market. gold-bearing shear zones The Ontario Securities at Giant mine. The gold Commission launched an town, founded in the investigation, and while it 1930s, experienced a could not pinpoint frauddownturn during the war, ulent activities, it agreed but the Giant discovery that Ciglen had run up reignited interest, making Beaulieu’s share value and Yellowknife properties that short selling had also bestsellers on the Toronto taken place. The inquiry Stock Exchange (TSE). raised many questions, but And while enterprising Once the talk of the Toronto Stock Exchange, the Beaulieu mine – seen here in 1947 – it later showed that nothprospectors of that time was eventually done in by its own shoddy resource reporting. ing done was illegal. The could be creative in drumcase was closed and ming up capital, a few managed to cut out looking for gold Beaulieu was free to continue trading activities. Schnee recomaltogether. mended constructing a shaft, agreeing that a bulk sample was It was up to the investing public to provide capital for new necessary to reveal a true ore average, and the company set an mining projects, and in the 1940s, few rules existed to prevent ambitious development schedule. market manipulation. Enter Beaulieu Yellowknife Mines LimArt Ames was brought on as resident engineer to oversee ited, the brainchild of Emil Schnee, who secured an option on underground work. Ames had a good rapport with his workers a prospect near Beaulieu River, 75 kilometres east of Yel- despite his dubious job qualifications and his reputation as an lowknife. Well-reputed Toronto lawyer Samuel Ciglen provided alcoholic. Schnee with financial backing and became company president. Construction of a mill and shaft continued in 1947, while the Beaulieu’s purported gold zone was a quartz vein hosted in company re-evaluated its ore deposit and decided with great sedimentary strata. Early assays were impressive. Hole #57 was fanfare that the mine had potential for 104,000 tons of ore gradprobed to a depth of 185 feet, with grades of 1.25 ounces per ing one-ounce per ton to 250 feet depth. This figure appeared ton over 27 feet of vein. Chip sampling in old trenches revealed to materialize out of thin air, as no additional work had been up to 38 ounces per ton. Naturally, these incredible assays fos- accomplished since a 14,000-ton reserve was calculated the year tered investor intrigue. Intersections were publicized with prior. The assayer was unnerved by the dismal assays he was emphasis on high-width assays, and engineer reports were obtaining and staff expressed their concerns to Ames, but he carefully edited to highlight potential. Beaulieu stock, trading heard none of it. Feasibility be damned, Beaulieu would pour a on the TSE, climbed from 50 cents to $2.65 in May 1946 and gold bar by the end of 1947. A celebratory date was set, with became the hottest ticket in an otherwise depressed market. celebrities like former heavyweight boxing champion Gene TunCiglen did his best to boost the property, comparing ney on the guest list, and the media ran with the story. Beaulieu’s ore body to recent discoveries in South Africa. SkepThe mill started churning, but the results were so poor that, tical editors at The Northern Miner grew suspicious, questioning when it stopped a month later, only seven ounces of rough gold the “indefensible assumptions” in calculating an ore reserve by had been recovered. Ames was shame-faced. Out of desperaprobing the same ground repeatedly and ignoring the low tion, it is said he approached another mine asking if he could assays and short lengths, which did nothing but produce a flow borrow some gold. The party was cancelled. A brief geological of high-grade assays for market purposes. investigation followed and the ore reserve was revised to a mere Despite Ciglen’s defence of the company, Beaulieu stock 1,200 tons. began to tumble on the markets. By June 1946, it was trading Beaulieu, the goldless gold mine, was left to decay in the Yelat 73 cents per share. At its annual general meeting, Ciglen got lowknife bush, becoming both a local curiosity and a cautionan earful from investors who suffered heavy losses. The presi- ary tale. The embarrassment revealed flaws in the securities dent had theories of his own as to why the stock fell, arguing business, encouraging investors to pay more attention to inforthat short sellers were preying on the company. He criticized mation promoted by companies. CIM
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