CIM Magazine September/October 2012 by CIM-ICM Publications

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CONTENTS|CONTENU CIM MAGAZINE | SEPTEMBER/OCTOBER 2012 | SEPTEMBRE/OCTOBRE 2012

TOOLS OF THE TRADE 10

Water treatment Compiled by Z. Koulouris

22 NEWS 16 22

Industry at a glance Pride of ownership First Nation takes equity stake in Avalon Rare Metals by V. Danielson

25 26 28 30

Nova Scotia fishes for exploration talent Prospectors get a late-season boost from government by R. Brighton China’s oil sands CNOOC bids US$15.1 billion for Nexen by A. Reitman Ready for a close-up First large-scale hyperspectral maps of Afghanistan released by USGS by A. Reitman Back in action Satellite zones give Goldex a new lease on life by V. Danielson

COLUMNS 32 34 36

MAC Economic commentary Time to confront railway market power in Canada by P. Gratton Eye on business Today’s feasibility studies must take energy costs into account by M. Chiesa Standards NI 43-101 standards and best practice guidelines: data verification using geophysical

38 39 40 42

logs when sampling coal by G. Gosson and R. Parent HR Outlook WIM Canada creates HR strategies that work by A. Kennedy Marketing Successful communication starts with the right research by R. Simpson Safety Best practice basics for project construction safety by D. Welshons Voices from industry Raising a stink by J. K. Nixon

UPFRONT 44

Energy-focused EMBA targets international need University of Calgary program offers exclusive

From dust to dollars River Energy’s hunt for value

Total rehaul New training program improves safety

energy content in alternative format by K. Lagowski in the coal fines of South Africa by A. Lopez-Pacheco

50 52

46 4 | CIM Magazine | Vol. 7, No. 6

and efficiency at Suncor by D. Zeldin Mix and match OSLI tailings research probes technology combinations by A. Lopez-Pacheco All fired up Ann Marie Hann shares her vision for Canada’s coal industry by A. Dion-Ortega

CIM COMMUNITY 81 83

Homegrown CIM Saskatoon Branch supports next generation of mining leaders by D. Zeldin Mining law magnate Fasken’s Michael Bourassa three-time lawyer of the year by V. Heffernan Come together Networking by Design event unites Toronto’s mining networks by M. Dregischan and M. Cortes

From tunnels to the moon Hildebrant Memorial Scholarship recipient digs deep and aims high by D. Plouffe

FEATURE | ARTICLE VEDETTE

All for one, one for all Sherritt Coal’s Paintearth mine takes collaborative approach to safety by A. Lopez-Pacheco

The Athabasca Express New infrastructure and evolving strategies keep oil sands min-

ers on track by E. Moore & K. Lear L’Express Athabasca Des infrastructures neuves et des stratégies en constante évolution gardent les mineurs des sables bitumineux sur la bonne voie par E. Moore et K. Lear

Nouvelle approche des solutions RH à Québec Mines 2012 Module Maillage, recrutement et ressources humaines mobilise l’industrie par L. Charbonneau

A Fresh take on HR solutions at Québec Mines 2012 Networking, Recruitment, and Human 90

PROJECT PROFILES | PROJETS EN VEDETTE

Resources module engages industry by L. Charbonneau Des mines et des hommes L’histoire minière du Quebec revue et mise à jour par L. Charbonneau Constant change Tony Eltringham shares insights from four decades in copper mining by A. LopezPacheco

66 72

Eyes on the horizon Coalspur Mines’ thermal coal project in Alberta is designed to fuel distant furnaces by C. Baldwin Les yeux rivés sur l’horizon Le projet d’exploitation de charbon thermique de Coalspur Mines en Alberta alimentera les appareils de chauffage dans des régions éloignées par C. Baldwin

MiHR explores the oil sands Mining in Sands provides another perspective on labour shortage by M. Roberts

HISTORIES 94

Historical metallurgy The rush for gold: Part II by F. Habashi

TECHNICAL ABSTRACTS 96 98

66 74 74

Citrus twist A Calgary company opens up a new frontier in bitumen mining by G. Chandler

Le secret des agrumes Une compagnie de Calgary s’avance dans des territoires inexplorés de l’extraction de bitume par G. Chandler

CIM Journal Canadian Metallurgical Quarterly

IN EVERY ISSUE 6 8 85 92 99 100 102

Editor’s message President’s notes / Mot du président Calendar Obituaries Innovation showcase Professional directory Mining Lore: Sidney Ells – pioneer of oil sands research by C. Baldwin

September/October 2012 | 5

editor’s letter Editor-in-chief Angela Hamlyn, editor@cim.org Managing editor Wah Keung Chan, wkchan@cim.org Senior editor Ryan Bergen, rbergen@cim.org Section editors Features: Ryan Bergen, rbergen@cim.org News and Upfront: Peter Braul, pbraul@cim.org

Fuelling Canada’s energy industry

Columns, CIM Community, Histories and Technical Section:

Simply stated, the oil sands industry is a victim of its own success. Skilled workers cannot be hired quickly enough, and supporting infrastructure cannot be built fast enough to answer the ever-growing demand for oil. And although these are “good problems to have,” they are still big problems. Their significance is marked by the fact that some in the industry viewed the recent economic downturn as a blessing in disguise; it gave them the opportunity to play catch-up in various areas, namely recruitment, training and infrastructure development. Still, keeping up and catching up are just first steps, as the global appetite for energy that is powering growth and development in the Athabasca region will not be satiated any time soon. In our feature “The Athabasca Express,” we take a detailed look at some of the key challenges confronting the oil sands industry – from pipeline and roadway capacity to construction costs and regulatory hurdles – and how operators and suppliers are addressing them. We also explore developments in Canada’s other energy powerhouse, the coal industry, throughout the issue. Our coverage includes a new approach to converting coal fines to revenues, Sherritt Coal’s Paintearth mine’s collaborative approach to safety and a profile of Coalspur Mines Ltd.’s flagship Vista Coal project. We feature an interview with Ann Marie Hann, president of the Coal Association of Canada, whose deep understanding of both industry and government helps put current developments in context. You will also find calls for nominations for our prestigious CIM Awards, which recognize the outstanding achievements and contributions made by individuals and companies to the mining and minerals industry, and are handed out every year at our CIM Convention. Be sure to make your nomination before the December 1, 2012 deadline, so that you can shine the spotlight on an industry leader. And speaking of awards, I would also like to take the opportunity to pass along my congratulations to the CIM Magazine editorial and production teams for the recent acknowledgement by the 2012 Tabbies International Editorial and Design Awards. Our November “Quebec’s Plan Nord” issue was among the Top 25 in the “Best Single Issue” category, which is quite an accomplishment as there were over 500 entries from business and trade publications from around the world. It is an honour to be part of such a dedicated and talented team.

Dinah Zeldin, dzeldin@cim.org Copy editor / Communications coordinator

Zoë Koulouris, zkoulouris@cim.org Web editor Nathan Hall, nhall@cim.org Publisher CIM Contributors Correy Baldwin, Rachel Brighton, Graham Chandler, Luc Charbonneau, Mauro Chiesa, Manuel Cortes, CNW, Vivian Danielson, Antoine Dion-Ortega, Marty Dregischan, Greg Gosson, Pierre Gratton, Fathi Habashi, Virginia Heffernan, Alana Kennedy, Krystyna Lagowski, Kim Lear, Alexandra Lopez-Pacheco, Eavan Moore, John K. Nixon, Ron Parent, Dan Plouffe, Anna Reitman, Martha Roberts, Karen Rolland, Robert Simpson, Erik Stout, Mark Stout, Dan Welshons Published 8 times a year by CIM 1250 – 3500 de Maisonneuve Blvd. West Westmount, QC, H3Z 3C1 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($170.00); Non-members (Canada), $220.00/yr (PE, MB, SK, AB, NT, NU, YT add $11.00 GST, BC add $26.40 HST, ON, NB, NL add $28.60 HST, QC add $32.95 GST + PST, NS add $33.00 HST) Non-Members USA and International: US$240.00/year Single copies, $25.00. Advertising Sales Dovetail Communications Inc. 30 East Beaver Creek Rd., Ste. 202 Richmond Hill, Ontario L4B 1J2 Tel.: 905.886.6640; Fax: 905.886.6615; www.dvtail.com National Account Executives 905.886.6641 Janet Jeffery, jjeffery@dvtail.com, ext. 329 Neal Young, nyoung@dvtail.com, ext. 325

This issue’s cover A haul truck at Syncrude’s Aurora project transports oil sands to be processed. Todd Korol/Aurora Photos Layout and design by Clò Communications Inc. www.clocommunications.com

Angela Hamlyn, Editor-in-chief editor@cim.org

6 | CIM Magazine | Vol. 7, No. 6

Copyright©2012. 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.

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president’s notes

Heigh-ho, off to work we go Hopefully, after an exceptional summer, we have all refilled our energy reserves and are ready for the task before us. Metals and mineral prices have dropped in recent months and the global economic situation remains uncertain. It is all the more important that CIM and its members keep working towards improving the global competiveness of our industry. CIM continues to take on these large-scale challenges. This month, Bob Schafer, CIM presidentelect, and executive director Jean Vavrek will meet with our sister societies from around the world during MINExpo in Las Vegas to advance the effort to align industry technology standards and improve equipment interoperability. Fall is the time we kick off our awards nomination process. Every year, CIM honours long-time leaders, up-and-coming young talent and proven performers. I encourage all members to nominate individuals worthy of recognition for their current excellence, as well as lifelong

contributions. Details about the awards and the nomination process are available at www.cim.org. These awards serve many purposes: they bring well-deserved smiles to the faces of the recipients on awards night at the annual CIM Convention; they are a celebration of our pride in and commitment to our professions; and when we honour the accomplishments of our peers and bring them to the attention of the broader community, we illustrate the importance and relevance of our industry. The awards ceremony is one of the highlights of our annual event, but can only be successful if nominations are forthcoming. Branch activity will also pick up in September, and I want to mention that we have an excellent lineup of distinguished lecturers who are available to provide interesting insights to our members across Canada. Details about the lecturers and booking them to speak can also be found at www.cim.org. On a final note, former CIM president Don Worth is heading up the Canadian Mining Hall of Fame’s (CMHF) “Mining Song Contest” and is looking for worthy submissions by October 15th. He can be reached at dworth9@sympatico.ca. The contest winners will be awarded their prizes at the annual CMHF dinner in January 2013.

Terence Bowles, CIM President

Hé Ho! Hé Ho! On reprend le boulot Après un été exceptionnel, nous avons tous, espérons-le, refait le plein d’énergie et nous sommes prêts à affronter les tâches qui nous attendent. Au cours des derniers mois, les prix des métaux et des minerais ont baissé et la situation économique mondiale demeure incertaine. Il est d’autant plus important que l’ICM et ses membres continuent d’œuvrer au renforcement de la compétitivité de notre industrie dans le monde. L’ICM continue de relever ces défis à grande échelle. Ce mois-ci, Bob Schafer, président élu de l’ICM, et le directeur général, Jean Vavrek, rencontreront nos sociétés sœurs de partout dans le monde au salon MINEXpo, qui se tiendra à Las Vegas, afin de faire progresser les efforts d’alignement des normes technologiques de l’industrie et d’améliorer l’interopérabilité des équipements. L’automne est la période du lancement de notre procédure de mise en candidature des prix d’excellence. Chaque année, l’ICM honore des chefs de file de longue date, des jeunes talentueux à l’avenir prometteur et des professionnels qui ont fait leurs preuves. J’invite tous les membres à mettre en candidature des personnes dignes de mention que ce soit pour l’excellence de leur travail actuel ou pour leurs contributions de toute une vie à notre industrie. Vous trouverez des précisions sur les prix et sur la procédure de mise en candidature sur le site de l’ICM à www.cim.org. Ces prix servent plusieurs objectifs : ils font naître des sourires bien mérités sur les visages des gagnants pendant la soirée de remise des prix au congrès annuel de l’ICM; ils soulignent notre fierté pour notre profession et notre engagement envers elle; et 8 | CIM Magazine | Vol. 7, No. 6

quand nous soulignons les réalisations de nos pairs et que nous les portons à l’attention de la communauté à un niveau plus large, nous illustrons l’importance et la pertinence de notre industrie. La cérémonie de remise des prix est l’un des faits saillants de notre congrès annuel, mais elle ne peut être une réussite que si des mises en candidature nous parviennent. Les activités des sections locales reprennent aussi en septembre, et je souhaite mentionner que nous avons un excellent groupe de conférenciers qui seront disponibles pour présenter des exposés intéressants à nos membres dans l’ensemble du Canada. Vous trouverez de l’information sur les conférenciers et sur la procédure à suivre pour les inviter sur le site de l’ICM à www.cim.org. Enfin, l’ancien président de l’ICM, Don Worth, qui dirige le concours de chansons sur le thème de l’exploitation minière organisé par le Temple de la renommée du secteur minier canadien, attend vos œuvres qui doivent lui parvenir avant le 15 octobre. Vous pouvez le joindre à l’adresse dworth9@sympatico.ca. Les gagnants du concours recevront leur prix au souper annuel du Temple de la renommée du secteur minier canadien, en janvier 2013.

Terence Bowles, Président de l’ICM

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OF TOOLS THE TRADE

water treatment

Compiled by Zoë Koulouris

◢ Self cleaning filters

◢ Liquid asset The Optimized Pretreatment and Unique Separation (OPUS) technology from Veolia Water Solutions and Technologies is a proprietary process for desalination of feed water with high concentrations of silica, organics, hardness, boron and particulates. It uses a reverse osmosis process operated at an elevated pH, which allows the overall treatment solution to achieve over 90 per cent hydraulic recovery, even with total dissolved solids concentrations of up to 7,500 parts per million. By combining a proprietary high-rate chemical softening process – known as Multiflo – with filtration, ion exchange and reverse osmosis, OPUS generates high-quality water with low-waste volumes. Veolia also offers the option of using CeraMem ceramic ultrafiltration membranes for upstream oil and gas applications. “The OPUS technology is a proven process that provides a high-quality effluent for reuse or discharge to surface water,” explains Lnsp Nagghappan, who helped develop the technology. “It offers more uptime, greater reliability and longer membrane life than comparable systems.”

The Sofi Filter is a high cross-flow tool for polishing filtration in mining and minerals processing applications. The patent-pending design from Finnish company Sofi Filtration treats overflows from settlers, clarifiers and thickeners; clarifies wastewater before being released into the environment; pre-filters solid particles before desalination; and removes contaminants from the electrolytic process. “The Sofi Filter’s state-of-the-art self-cleaning ability provides automated microfiltration starting from one-micrometre pore size, and it has a high capacity of between three to 30 m3/h/m2,” says Ville Hakala, marketing manager, Sofi Filtration. “It also consumes less energy than traditional methods – at 0.05 kWh/m3 – and handles a wide range of concentrations, specifically from 1 mg/l to 100,000 mg/l.”

◢ Better together GE has integrated ultrafiltration (UF) and reverse osmosis (RO) technologies in its Seapak, Propak and Repak products for desalination, surface water, mine drainage and re-use. “These systems offer a 35 per cent footprint reduction, and 10 per cent to 20 per cent capital cost savings compared to independent UF and RO skids,” says Brian Wise, global product manager for GE Power & Water. “For over 30 years, GE has been manufacturing all of the individual components that go into these complete, integrated systems which we also manufacture,” Wise notes. “When you have that ‘bottom-up’ knowledge, it allows you to more completely understand the way these technologies work in concert.”

10 | CIM Magazine | Vol. 7, No. 6

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OF TOOLS THE TRADE

water treatment

◢ From problems to profits BioSulphide and ChemSulphide processes from Bioteq Environmental Technologies are sulphide precipitation technologies that clean and recapture the value of heavy metals from mining wastewater streams. They use biological or chemical sources of sulphide to selectively precipitate dissolved metals as saleable products, leaving treated water compliant with discharge requirements. “Sale of the metal products generates revenues to offset water treatment costs,” notes Andrew Hall, Bioteq’s vice-president of sales and marketing. “By recovering the metals, waste sludge volumes are reduced or eliminated as are the long-term sludge monitoring and storage costs. This has the potential to transform water treatment from a cost to a profit centre.”

◢ Remote disposal

◢ Worth its salt SaltMaker zero-liquid-discharge technology, developed by Saltworks Technologies Inc., concentrates brine and treats challenging industrial waters to produce fresh water and solid salts. Compared to traditional evaporators and crystallizers, SaltMaker can save up to 50 per cent capital and operating cost for industrial water treatment, according to Saltworks. The technology uses a moderate temperature humidificationdehumidification process to evaporate salt water and generate solid salt. “SaltMaker impacts mine tailings and oil and gas by providing a lower cost, lower energy solution for brine and discharge management with the potential to ease project permitting,” says Joshua Zoshi, co-founder and president of Saltworks Technologies Inc. “Its highly modular design supports rapid deployment to site, capacity expansion and simplified maintenance.” 12 | CIM Magazine | Vol. 7, No. 6

Since 1985, Cowater has specialized in water supply and sanitation services for mining sites, rural areas and small communities around the world. Its patented Flush Tank and Haul system has been used in remote northern communities for over 20 years. “The system,” explains Cowater’s vice-president Norman Looker, “allows communities to have a high level of service, while at the same time it uses simple, inexpensive technology. It avoids the need for expensive piped networks.” Wastewater is collected through a regular indoor plumbing network and transferred to an insulated outdoor holding tank. A small vehicle such as a snowmobile or an ATV with a haul tank on a trailer empties the household storage tank and transports the waste to its final disposal location (e.g. sewage lagoons). Particularly suited to areas in difficult terrain (permafrost, bedrock), the system is flexible and scalable, with tank sizes to meet a variety of needs.

OF TOOLS THE TRADE

water treatment

◢ Combined strength WetlandsPacific Corp.’s new Nayadic M6-Evolution is an all-in-one pre-treatment, treatment and dosing tank perfect for small camps. It is made of heavy-duty fiberglass for long life, making it both lightweight (550kg) and compact (2.1m high x 2.6m long x 1.7m wide). The 0.5-hp high-head pump uses a maximum of 110/230V 9.5A/4.6A, and the air compressor is rated at 110/230V, 100 W. It treats 1,890 litres per day of camp domestic wastewater, producing a clear, odourless effluent that meets biochemical oxygen demand/total suspended solids (BOD/TSS) 10/10 mg/L standards. To complete the wastewater cycle, all that is needed is a dispersal field or wetland. Ultraviolet treatment and custom field/wetland designs are available. “Compact size, ease of installation, rapid start-up, very high reliability and superior treatment ability make for a practical solution for smaller camps, both temporary and permanent,” says Curt Kerns, president and COO, WetlandsPacific Corp.

◢ Soft water for heavy oil Eco-Tec’s new RecoPur Super-Softening Technology is designed for oil sands companies that depend on produced water or low-quality well water in thermal extraction techniques. “Since Eco-Tec introduced its RecoPur technology, our clients have been pleased with the performance and safety associated with our systems,” says Mike Dejak, vice-president, business development, Eco-Tec. “But they also expressed a need to produce soft water with very low hardness, which helps reduce steam generator fouling, especially when the produced water has higher silica concentrations. Now, clients can realize the benefits of consistently feeding low hardness water to steam generators without compromising safety or economics. Super-Softening Technology also paves the way to eliminating the very costly silica removal processes commonly used in Alberta SAGD operations since very low hardness may offset high silica in steam generator feed water.”

14 | CIM Magazine | Vol. 7, No. 6

◢ Good gas guzzler Treatment of petroleum-contaminated wastewater just got easier thanks to Cypher Environmental’s latest UltraZyme Hydrocarbon Powder. “What sets UltraZyme Hydrocarbon Powder apart from the competition is that it consists of both enzymes and bacteria,” says Cypher Environmental president Todd Burns. “Enzyme-only or bacteria-only products, can produce mixed results.” The bacteria and enzymes work in synergy to digest hydrocarbons. With a cycle time of around three weeks and the ability to resist toxic shocks, this powder gives customers more control, eliminates “eyesores” that trouble regulatory authorities, treats contamination on-site instead of relocating the problem, and is equally effective in salt and fresh water, across a broad range of pH levels and temperature ranges.

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news | industry at a glance Impact of Argentina’s glacier law uncertain The Supreme Court of Argentina imposed glacier protection legislation in July that effectively bans mining activity on or around glaciers or peri-glacial areas. The court decision overturned temporary injunctions from Barrick that

had prevented the law from being applied since it was first passed in 2010. But until an inventory of glaciers required under the National Glacier Act is complete, it remains unclear how the new law will affect Barrick’s Pascua Lama gold-silver project and other projects under exploration and development in the Argentine Andes.

According to Barrick, the Supreme Court must still rule on the constitutionality of the act, and even if the law is ruled constitutional, construction at PascuaLama will not be affected. “We believe we are legally entitled to continue our current activities on the basis of existing approvals,” the company said in a statement. “The EIA for Pascua-Lama [...] determined that the project would not have any adverse impacts on glaciers.”

Armed robbers pillage Dynasty facility Thieves made off with dore bars containing 1,300 ounces of gold and 4,000 ounces of silver from the processing plant at Dynasty Metals and Mining Inc.’s Zaruma project in southwestern Ecuador. The theft happened in the early morning of July 23, and though there were some injuries, none were fatal. The gold storage facility was damaged but is repairable. Dynasty has three operations in the region, but Zaruma is the only one currently in production. The company has insurance to cover the loss and a claim is pending.

Canada to export uranium to China An agreement signed in late July by Foreign Affairs Minister John Baird and Liu Tienan, head of China’s National Energy Administration, will allow Canadian uranium miners to export their products to China. The deal expands on the existing Sino-Canadian nuclear cooperation agreement, in place since 1994. The expansion is good news for Cameco, which already has long-term supply deals with two Chinese energy companies for 52 million pounds of uranium concentrate through 2025. So far, that uranium has come from Cameco’s operations in other countries, although about 89 per cent of the company’s production originates in Canada. Even as Germany moves to phase out nuclear-generated power, Chinese growth makes no question of the demand for uranium; there are more than 25 nuclear reactors under construction in the Asian state. 16 | CIM Magazine | Vol. 7, No. 6

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news | industry at a glance Antofagasta Minerals welcomes new CEO Diego Hernandez, the former head of Codelco, joined Antofagasta Minerals as chief executive in August. Shares of the London-based copper miner rose 1.8 per cent following the announcement. Hernandez, a former BHP Billiton executive who resigned from his position at Codelco in May because of differences he had with the board of directors, will lead a number of projects currently being developed by Antofagasa, starting with the Antucova copper oxide deposit. â&#x20AC;&#x153;We are delighted that Diego has accepted our invitation to lead the mining division business as its CEO,â&#x20AC;? said Antofagasta chairman JeanPaul Luksic, who was CEO in the interim. In another development, Nelson Pizarro was appointed as an independent, non-executive director at the company. â&#x20AC;&#x153;This is a big score for Antofagasta Minerals,â&#x20AC;? said Prof. Gustavo Lagos from the Mining Center at Chileâ&#x20AC;&#x2122;s

Universidad Catolica. â&#x20AC;&#x153;They now have the two most reputed professionals in Chilean mining.â&#x20AC;?

US$4 billion expansion at Cerro Verde to commence in 2013

U.S. Silver combines with RX Gold & Silver

U.S.-based Freeport-McMoRan Copper & Gold Inc. (FCX) announced plans to start the expansion of concentrator facilities at its Cerro Verde copper operation in Peruâ&#x20AC;&#x2122;s Arequipa region. Once complete, the expansion will increase daily throughput capacity from 120,000 tonnes to 360,000 tonnes, and annual production to 600 million pounds of copper and 15 million pounds of molybdenum. According to Richard Adkerson, FCX CEO, an environmental impact study for the project was filed in Q4 2011 and is progressing well; permitting is being advanced and engineering and procurement of long-lead items are in progress. The US$4 billion project is slated to start in 2013 and to be completed by 2016. Adkerson said the expanded operation will be one of the worldâ&#x20AC;&#x2122;s largest concentrator and mil-

Hecla Mining Company terminated its unsolicited $110 million takeover bid for U.S. Silver Corporation after U.S. Silver shareholders voted to approve a merger with RX Gold & Silver in early August. The merger was set in motion in June, and Hecla had offered to buy U.S. Silver only if the merger deal did not go through. U.S. Silver shareholders will control 70 per cent of the new company, to be called U.S. Silver & Gold Inc. â&#x20AC;&#x153;The Hecla offer is simply not compelling enough for us to abandon our strategic plan going forward,â&#x20AC;? said Gordon Pridham, interim CEO of U.S. Silver. Hecla president and CEO Phillips Baker had said his companyâ&#x20AC;&#x2122;s offer was better than the U.S. Silver Corp-RX Gold deal.

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industry at a glance | news ling operations. FCX owns 53.7 per cent of Cerro Verde. The remainder is held by SMM Cerro Verde Netherlands (21 per cent), local precious metals miner Buenaventura (19.3 per cent) and various stakeholders.

Teck’s Lindsay remains tight-fisted Despite an apparent buyer’s market for mining stocks and delays in some of its key development projects, Teck Resources CEO Don Lindsay said the company remains cautious about boosting production by acquiring existing mines. “From a market value point of view, the landscape is tilted towards buy versus build,” said Lindsay during the company’s second-quarter earnings conference call. He added, however, that there are risks that the markets have not accounted for that operators must consider. According to Lindsay, resource nationalism, environmental

liabilities, as well as labour laws and health and safety conditions are only some of the elements that are taking the shine off potential acquisition targets. “Those who are trading in the market don’t have to deal with those issues, […] but we have to live with them for a long, long time.” Recently, Teck saw the timelines extended for both its Quebrada Blanca copper expansion project in Chile and the reopening of its Quintette mine in British Columbia due to additional requirements from regulators. Teck also reported a record total copper production of 90,000 tonnes for the quarter, due in part to expanded capacity at Antamina, as well as improved throughput at Highland Valley and Andacollo. For metallurgical coal, the company aims to expand output from its six mines to 28 million tonnes per year, and add another three million tonnes with the re-opening of the Quintette mine near Tumbler Ridge, BC in 2014.

New Certificate in Mining Management at Ryerson The Chang School of Continuing Education at Ryerson University is expanding for the coming year with a six-course post-graduate Certificate in Mining Management. The new certificate is motivated by the mining industry’s urgent need for employees who have practical as well as theoretical skills, and who understand and have been exposed to real-world cases and simulations. According to Philip Walsh, academic coordinator for the program, courses will be taught by professors along with executives from the mining industry. The courses are designed to create links between science and business as well as community development and business. The three required courses are: CSR, Sustainability and Mining; Resource Valuation, Financing, and Investor Relations; and Corporate Strategy in the Mining Sector. Students can choose elective courses covering

September/October 2012 | 19

news | industry at a glance exploration and development operations, risk management, managerial strategies in the mining sector, and mining in the global environment. In order to help students juggle their studies, work and family, Walsh says, they can take up to six years to complete the certificate.

Vancouver Island project looking for mineral potential The Northern Vancouver Island Exploration Geoscience project is off to a flying start with a total project budget of $930,000. It will generate new geoscience data for northern Vancouver Island, near the communities of Campbell River, Port Hardy, Port McNeill, Alert Bay, Port Alice and Zeballos. The first data set is scheduled to be released in early 2013. Geoscience BC contributed $530,000 to the project with the Island Coastal Economic Trust (ICET) providing the other $400,000.

Stakeholder engagement in the development phase will be supported by the BC Ministry of Jobs, Tourism and Innovation. The project includes an airborne magnetic survey, conducted by Geo Data Solutions GDS Inc. this past August, and a stream sediment geotechnical sampling and analysis program as well as community awareness sessions on geoscience, mineral exploration and mining. The aim of the project is to help attract mineral exploration interest and investment, increase the understanding of the mineral potential in the region, and provide local First Nations and communities with more information on the local geology.

CN heads study for proposed Labrador Trough rail line CN, with funding support from Cliffs Natural Resources, Labrador Iron Mines, New Millennium Iron, Cap-Ex Ventures and Alderon Iron Ore, will

lead a feasibility study into the construction of a rail line and a handling facility that would provide a continuous connection between the iron ore operations in the Labrador Trough and the Port of Sept-Îles in Quebec. The pension fund investor Caisse de Dépôt et Placement du Québec is also financing the study that will examine the cost and engineering demands of the project, as well as the best route. CN is now coordinating the environmental permitting requirements needed to set the study in motion. Currently, the Iron Ore Company of Canada operates the southern majority of the rail line between the port and Emeril Junction near its operations around Labrador City, and it acts as a common carrier for other mining operations including Cliffs’ Bloom Lake and Wabush mines and Labrador Iron Mines’ James mine near Schefferville. The final 212 kilometres to Schefferville is serviced by the aboriginal-owned Tshiuetin Rail Transportation Inc. CIM

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Pride of ownership First Nation takes equity stake in Avalon Rare Metals

A recently signed accommodation agreement between Avalon Rare Metals Inc. and the Deninu K’ue First Nation (DKFN) has raised the industry bar on Aboriginal engagement. Avalon’s agreement with the DKFN provides for business, employment and training opportunities, but it also goes beyond these typical components of Impact Benefit Agreements (IBAs) by proposing a limited partnership. The DKFN will acquire a 3.3 per cent limited partnership stake in the company. Along with the accommodation agreement, Avalon has agreed to transfer 10,000 of its common shares Avalon Rare Metals' exploration camp for its Nechalacho rare earth elements deposit beside Thor Lake in the Northwest Territories and 50,000 share purchase warrants to the DKFN, subject to various contractual and statu- model, used more widely in the energy recently articulated by Shawn Atleo, tory restrictions. chief of the Assembly of First Nations. sector, to mineral projects. The firm’s “This type of agreement is an adBut the promise of equity-based particiAboriginal practice group was strengthvancement of the IBA model as it offers ened by its 2000 merger with Vancoupation is no guarantee of future Aborigequity ownership rather than just cash ver-based Russell & DuMoulin, as many inal support, as proponents of some transfers,” said Avalon president Donald Aboriginal rights cases affecting resource high-profile energy and pipeline projBubar. “It’s new to the Northwest Terridevelopment originated in British ects have found. tories [NWT], and while there are other Columbia. In the case of Nechalacho, Chief examples in Canada, not many of them Avalon’s new accommodation agree- Louis Balsillie insists that development are in mining.” ment builds on the experience of Van- will not come at the expense of the traThe formal signing ceremony in July couver-based Polaris Minerals Corp., ditional lands where the DKFN conattracted local and federal politicians, which invited First Nations to partici- tinue to hunt and trap. He publicly including federal cabinet minister Tony pate in the development of its Orca stated in July, “The mitigation of the Clement and NWT Premier Bob sand and gravel project on Vancouver environmental impacts and provision McLeod. for environmental monitoring on these Island in 2005. Fasken Martineau Bubar says Avalon hopes to finalize DuMoulin was involved in the devel- lands are crucial to our members.” accommodation agreements soon with opment of a groundbreaking limited For Avalon, the DKFN agreement two other First Nations (Yellowknives partnership which resulted in the and the potential of others to follow Dene and Lutsel K’e Dene) near its Namgis First Nation holding 12 per are critical in the development of what Nechalacho project, situated about 100 cent of the project and Polaris holding is considered to be the world’s largest kilometres southeast of Yellowknife. the balance. The Kwakiutl First Nation rare earth element deposit outside These efforts are assisted by the VancouChina. Bubar says Avalon is well-fundparticipates in the Orca project ver office of Fasken Martineau (previed to complete a bankable feasibility through a traditional IBA. ously Fasken Martineau and DuMoulin). Many Aboriginal groups are seeking study by 2013. If all goes according to The law firm has helped apply the direct partnership roles in resource proj- plan, construction would follow with a equity-based Aboriginal partnership ects within their traditional lands, as production start in late 2016. CIM 22 | CIM Magazine | Vol. 7, No. 6

Courtesy of Avalon Rare Metals

By Vivian Danielson

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Nova Scotia fishes for exploration talent Prospectors get a late-season boost from government By Rachel Brighton Prospectors and junior miners in Nova Scotia will have to lace up their boots quickly to capitalize on a new $700,000 mineral incentive program from the provincial government before the season ends. Projects were not approved until August, after a hurried program launch in July. According to Fred Walsh, who is vice-president of the Nova Scotia Prospectors Association, the program is “extremely necessary” to close a funding gap with other provinces. But, he said, the program launch “will be pushing it in terms of this year’s season. It kind of should have been done at the beginning of the season – in April.” The program was oversubscribed, and a departmental panel was charged with finding the best prospects among a pile of some 70 applications: about 40 for prospector’s grants of up to $15,000 each and about 30 seeking public and private matched funding for advanced-stage exploration projects of up to $100,000. The advanced-stage exploration grants require applicants to find matching funding from the pri-

vate sector. To receive complete funding, reports for all exploration work will have to be submitted to the government by February. Gold was “the overwhelming commodity of interest,” said Donald James, who is the executive director of the province’s mineral resources branch in the natural resources department. Other targets were base metals, notably zinc, rare earth elements and gypsum. Despite the program’s delay, which one official put down to the usual processes of government, the strategic injection of funds may give industry a leg up in such a tight investment climate. Glenn Holmes, CEO of NSGold Corporation, said although equity markets are “effectively closed for junior explorers,” the funding sought by his company would enable a fall drilling program to assess the open pit potential of the West Zone of its Mooseland gold property, the site of the first recorded gold discovery in Nova Scotia in 1858. NSGold applied for a $50,000 advanced-stage exploration grant.

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According to Pat Mills of the Mining Association of Nova Scotia, the grant program signals the government is attempting to change the perception among investors that “Nova Scotia’s not really in favour of mining.” James affirmed that “most other jurisdictions in Canada have a mineral incentive program or tax incentives [and] we didn’t have one.” He hopes the new program, modelled on New Brunswick’s and crafted with industry support, will level the playing field among provinces competing for scarce investment dollars. One third of the $700,000 was earmarked for prospectors’ grants, just over half for advanced projects, and the rest for marketing and training grants. The latter include $30,000 to polish and market properties at mineral exploration events in the new year and $50,000 to train “a new cadre of prospectors,” said James, who noted that many prospectors in Nova Scotia got their start under a four-year prospectors’ assistance program launched in the late 1990s. CIM

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September/October 2012 | 25

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China’s oil sands CNOOC bids US$15.1 billion for Nexen

Courtesy of David Dodge and the Pembina Institute

By Anna Reitman

The upgrader facility at Nexen’s Long Lake project

Nexen and the Chinese National Offshore Oil Corporation (CNOOC) have been partners in the Long Lake oil sands project since 2011, when CNOOC bought out Nexen’s partner OPTI Canada. Now, the Chinese state-owned enterprise is set to gain a stronger foothold in Alberta with the recently announced US$15.1 billion cash acquisition of Nexen, which also has operations in the North Sea, the Gulf of Mexico and offshore Nigeria. It will be the largest overseas acquisition to date for China’s increasingly bold public enterprises, and will boost proven reserves by approximately 28 per cent to over four billion barrels and production up by approximately 23 per cent to about 1.1 million barrels of oil per day. And while Long Lake and Syncrude accounted for just one fifth of Nexen’s production in 2011, bitumen and synthetic oil make up the bulk of the company’s proved and probable reserves. During a conference call on July 23, Nexen’s CEO Kevin Reinhart told investors that CNOOC’s strong balance sheet means projects will 26 | CIM Magazine | Vol. 7, No. 6

get much needed capital. In other words, Nexen has desirable assets and CNOOC has lots of cash to develop them – the bid valued Nexen shares 61 per cent higher than their closing price on the NYSE. CNOOC chief executive Li Fanrong said, “We are in Canada to invest, to be a good employer and intend to continue Nexen’s commitments to the environment and communities just as we do in our own operations throughout the world.” In Long Lake, for example, the companies offer a youth scholarship program. When asked if any divestitures were planned, Fanrong said simply, “No.” Other assurances from Fanrong include servicing Nexen’s outstanding US$4.3 billion debt, keeping current employees, listing its shares on the TSX and establishing a head office in Calgary to oversee North and Central American operations which will represent a combined US$22 billion of assets after the acquisition. The next step for the deal is to get regulatory approval. Although initial phone calls were made to relevant ministries immediately before the deal’s announcement,

Oil sands foreign investment since 2004 in billions of dollars

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according to a spokesperson, CNOOC will not comment on the government’s reaction. There has been some opposition coming out of the U.S. surrounding the deal, which for some may bring back memories of CNOOC’s failed US$18.5 billion bid for Unocal, in competition with Chevron, seven years ago. U.S. Senator Chuck Schumer has moved to block CNOOC’s resulting ownership of Nexen-owned Gulf assets on the basis of a lack of reciprocity. However, only national security concerns could legally stop the transaction and, considering that U.S.based assets comprise under one tenth of Nexen’s portfolio, such an argument is unlikely to hold up. Almost half of Nexen’s assets are in the U.K. Malcolm Graham-Wood, an oil analyst at investment firm VSA Capital, pointed out that since the Unocal deal, the landscape has changed considerably. “North Americans need inward investment,” he said. “Recently, Exxon did a deal with Rosneft which allowed the Russian company to share assets in the U.S. That opens the floodgates. How can the U.S. stop CNOOC coming in and buying up assets?” CNOOC has already completed two large shale deals with Chesapeake Energy, without regulatory or political resistance. And although neither directly related nor likely to stop the deal from moving forward, recent actions by the U.S. Securities and Exchange Commission cast a shadow on the

announcement when the U.S. markets regulator obtained an emergency order to freeze a firm’s assets, alleging insider trading in Nexen shares immediately before the acquisition announcement. The complaint is against Hong Kong-based Well Advantage, controlled by Zang Zhi Rong, who also controls another company that the Commission says has a “strategic cooperation agreement” with CNOOC. Such headlines are anathema to large cross-border transactions already exposed to political risk, but Graham-Wood believes this acquisition is a “done deal.” “CNOOC is buying at the top end of the range and, if it goes well, there will be more,” said Graham-Wood. “Outside of Canada too, media and brokers have identified companies which might be next, such as African explorer Tullow Oil, which could end up being a US$20 billion deal.” He added that China’s investment is advantageous to Canada in particular because of a prevailing long-term investment mindset. If the oil price dips, he explained, CNOOC is unlikely to backtrack on development just because oil sands oil is expensive to produce. Nexen is not CNOOC’s only presence in Canada. It has a 14.2 per cent stake in the oil sands through MEG Energy and a 60 per cent stake in a conventional oil and gas play in the Yukon via Northern Cross. CNOOC is the third largest oil company in China and the largest offshore oil producer. CIM

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September/October 2012 | 27

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Ready for a close-up First large-scale hyperspectral maps of Afghanistan released by USGS By Anna Reitman

Courtesy of USGS

One of the USGS's hyperspectral maps of Afghanistan showing carbonates, phyllosilicates, sulfates, altered minerals and other minerals

The U.S. Geological Survey (USGS) released the first hyperspectral data maps ever made on a country-wide level in July, giving the mining industry a full-scale view of the mineralogical spread in Afghanistan. To create the map, data were collected in 2007 using a NASA aircraft – a WB-57 piloted by ex-space shuttle commanders – that was fitted with a HyMap hyperspectral sensor owned by Australian company HyVista Corporation. Rounding off the collaboration was the Afghan government, which approached the USGS in 2005 with funding of US$8.86 million for oil and gas, hyperspectral, airborne gravity and mag studies. Afghan officials are working hard to attract investors and junior miners to the region and the country’s 28 | CIM Magazine | Vol. 7, No. 6

Ministry of Mines is now using the maps in tender information packages. “It was an opportunity for Afghanistan to rejuvenate the mineral sector for the revitalization of the economy, and USGS was tasked with collecting data,” said Trude King, project lead of hyperspectral data collection at USGS, adding that the country’s lack of humidity and barren landscape is the perfect environment for the technology. About 70 per cent of Afghanistan’s surface has now been mapped. What sets this technology apart from traditional geophysical studies, King explained, is that collected data show the inner actions on the electron level of the minerals, enabling the identification of specific minerals and mineral assemblages. The hyperspectral sensors used to create the maps measure unique spectral signatures for different minerals, which are matched to the USGS’ data-

base. A user could, for instance, locate and quantify different types of building materials or minerals that might be present within an area of interest. On the shortwave end of the spectrum, the USGS team examines how cations vary in the mineral structure. They look at absorption features resulting from overtones of fundamental vibrations of the crystallographic structure of the minerals in the longer wavelengths. “When we look at this data, we can identify the intricacies of the composition, so we can tell several variations that are important in ore farming processes,” King said. “Mineral assemblages are identified so you can potentially tell what kind of materials are there – whether it is a gold deposit, copper porphyry or whether it is an iron deposit, for example.” Having the majority of Afghanistan mapped out, with data available to the public, could reduce the cost for prospective juniors to access the region. Terry Cocks, managing director at HyVista, said that though there are other applications for the technology, such as monitoring wildfires or

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changes in tailings, the company’s dayto-day operations are dominated by mining company clients. Most of the company’s Australian work is done in the area of geological mapping and mineral exploration for juniors. The cost of hyperspectral mapping is usually not prohibitive and can have major benefits for prospectors. For an area of 500 square kilometres at a flying height of 1.4 km, it took Lithex Resources of Western Australia approximately two months and AU$40,000 to identify the first group of targets for exploration at its Shaw River project. Brendan Borg, exploration manager at Lithex, explains that traditional geophysical methods were inadequate to get the results the company was looking for. “There weren’t any other studies we could’ve used and it was such a large area, we could’ve gone out there and spent three or four months walking along the ground trying to find the targets,” he said. “For us, this has helped narrow down the search and that is why it is a good value proposition for us.” In comparison, the area surveyed by the USGS – more than 450,000 square kilometres – is nearly 1,000 times the size of the Lithex survey. Cocks, of HyVista, explained that prices of surveys can vary widely and depend on location, size and scale of data being acquired, and what level of mapping is needed to meet a client’s exploration goals. For mineral exploration, semiarid areas are best for these surveys. “The sensor has to be able to see the rocks or soils and heavy vegetation makes that impossible,” Cocks said. “But surveys can still be successfully completed in the presence of some vegetation, say up to around 30 per cent to 40 per cent cover, and often this means choosing the dry season to undertake a survey.” Outside of juniors, HyVista has also done mineral mapping projects for other state and federal geological surveys. Earlier this year, it surveyed about

11,000 square kilometres for ONHYM [the Geological Survey of Morocco] and since 2004, has worked with the Geological Survey of Namibia on several occasions.

Whether other jurisdictions will collect and display data on a level like Afghanistan remains to be seen, but the potential research and investment benefits are clear. CIM

September/October 2012 | 29

news

Back in action Satellite zones give Goldex a new lease of life

Agnico-Eagle Mines announced it will develop two satellite zones at its Goldex property in Val d’Or, Quebec, less than a year after water inflow and ground stability problems forced the suspension of operations at the mine last October. The Goldex mine was a lowcost gold producer for the company before mining of the Goldex Extension Zone (GEZ) was halted. In the meantime, while the company performed monitoring, assessment and remediation work, it also got busy exploring its wholly owned property, resulting in a decision to develop the two zones for production in early 2014. Based on a preliminary economic assessment, the revived secondary crusher (pictured) and other existing facilites at Agnico-Eagle’s Goldex operation will continue to be used as mine will have higher costs and a The the mine develops new satellite zones by longhole open stoping with paste backfill. shorter life than the previous operation. But that could change with further success of this year’s $18“We’ll be taking a different ap- shaft and mill. Based on a proposed million exploration effort, notably at proach than we did with the GEZ, daily rate of 5,100 tonnes, the mine is the promising D zone where what the expected to generate 300,000 ounces which was mined as a [single] open through to 2017. company calls a “large and growing stope,” Paré said. “The new zones will Before the suspension, Goldex operresource” is being outlined about 150 be mined by longhole open stoping, ated at 6,786 tonnes per day and was metres below the GEZ. with paste backfill for additional on track to produce 184,000 ounces of “We have seven drills on site to ground support.” gold per year from the GEZ. The mine define and establish additional satellite The paste backfill plant to be built benefited from operating synergies on site is expected to cost around zones,” said Goldex general manager with Agnico-Eagle’ s nearby LaRonde Daniel Paré. “But we won’t have all the US$24 million, making it the largest mine, which had processed Goldex component of the estimated US$95 results in until next year, so don’t concentrates so as to eliminate the million capital expenditure required to expect any changes to the mining plan need for a cyanide circuit (the Goldex restore Goldex to production. Paré said this year.” mill has only grinding, gravity and The newly defined M and E zones roughly US$7 million will be spent on flotation circuits). host Measured and Indicated re- mobile underground mining equipUnder the M and E zone plan, mine sources of 2.1 million ounces of gold ment, with the balance allocated for site costs are estimated at C$41 per (36.8 million tonnes at 1.8 g/t), plus development and construction, and tonne, up from the C$20-per-tonne an Inferred resource of 1.6 million underground monitoring. life-of-mine forecast before the closure, “The mine design and ground supounces (31.1 million tonnes at 1.6 g/t) with cash costs projected at US$900 that is not included in the new mine port plan have been thoroughly reper ounce. Nevertheless, the after-tax plan. At start-up in 2008, the GEZ had viewed, including by a team of outside internal rate of return is still expected consultants, so we aren’t expecting any proven and probable reserves containto exceed Agnico-Eagle’ s 15 per cent surprises,” Paré added. ing 1.63 million ounces of gold investment target rate, assuming a The revived mine will make use of (averaging 2.2 g/t), plus additional CIM US$1,500-per-ounce gold price. existing infrastructure, including the Indicated resources. 30 | CIM Magazine | Vol. 7, No. 6

Courtesy of Agnico-Eagle

By Vivian Danielson

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Time to confront railway market power in Canada BY PIERRE GRATTON

ail freight service is a key determinant of the Canadian mining industry’s ability to compete internationally. Given the significant prospects for continued growth in mining operations, overcoming the obstacles posed by Canada’s vast geography to deliver products to ports and smelters effectively is crucial. This is especially relevant when competing against countries with significantly shorter logistical supply chains. Although many characteristics contribute to the quality of delivered service, a competitive market is perhaps the most essential in ensuring firms optimize their performance. As a general rule, the more competition there is, the more likely companies are to provide proficient service at lower prices. Railways are often considered a typical example of a natural monopoly, and the Canadian context is a case in point. The costs associated with building and running a rival rail network that can service Canada’s vast geography act as a barrier, making competition economically unviable in many regions. The remote locations of many mining operations often leave mines captive to one of two railways – Canadian National or Canadian Pacific – and frequently stranded without an alternative mode of shipping. The issue with natural monopolies boils down to market power. A firm with market power has the ability to influence prices, or to reduce service quality without losing customers. Given that shippers already pay significant freight rates to overcome obstacles posed by Canada’s vast geography, the use of market power exacerbates the situation. The current economic framework regulating the railway industry, the Canadian Transportation Act (CTA), has largely been ineffective in protecting captive shippers against high prices and unreliable service. The Government of Canada’s Rail Freight Service Review report serves as an excellent benchmark by which to assess how effective the CTA has been in regulating the railways. Beyond acknowledging that “it has long been

MOVING ON UP Shearer becomes interim Orusur chairman Orosur Mining Inc. appointed Tony Shearer as a non-executive director and chairman until a new chairman is selected. He was chairman of Orosur Mining from 2002 to 2009. “I am pleased to welcome Tony back to the board,” said Orosur Mining CEO David Fowler. “Having served as chairman for seven years, he knows the company well, and as a shareholder has continued to follow its progress since he stepped down in 2009.”

recognized in transportation law that regulations are required to address the potential abuse of market power by the railways” in Canada, the report reveals the following statistics: • On a week-to-week basis, each railway provided grain shippers with at least 90 per cent of cars ordered only 54 per cent of the time. CN performance was 57 per cent and CP performance was 51 per cent. • Railway performance in meeting shipper demand on a weekly basis for merchandise traffic differed between railways. CN provided at least 90 per cent of the cars ordered only 68 per cent of the time, while the figure for CP was 50 per cent. Although service levels can be measured in different ways, the above indicates very poor performance of rail cars supplied versus cars ordered on a week-to-week basis, over a two-year period. Think of this in another way: if your cable provider was only supplying the majority – not even all – of your television channels just over half the time, would you not switch providers? The above serves as one example of how the railways’ use of market power has persisted under the current CTA. The biggest problem rail customers have is that they do not know what they are getting for the rail rates they pay. Also, many have no alternative service provider. Under the current CTA, railways unilaterally impose rates and have no obligation to provide any particular level of service. Fortunately, the federal government appears poised to amend the CTA in order to rebalance the bargaining positions of those party to the monopoly market structure. Mining companies need more predictable and reliable rail service to maintain their customer relationships. To achieve these objectives, the mining industry is advocating that legislation tabled this fall enact a shipper’s right to negotiate service levels and a dispute resolution process should such negotiations fail. These enactments are big ticket items that can be remedied at no cost to government, allow for commercial negotiations, maintain Canada’s export success, and deliver revenues and jobs across the country. The Canadian mining industry relies heavily on the rail system. In 2010, shipments of coal and processed minerals represented 56 per cent of total Canadian rail-freight revenue and one half of overall volume. In a truly competitive environment, wouldn’t you expect much better service? It’s time to level the playing field. CIM

Pierre Gratton is president and CEO of The Mining Association of Canada

32 | CIM Magazine | Vol. 7, No. 6

EYE ON BUSINESS

columns

Today’s feasibility studies must take energy costs into account BY MAURO CHIESA

he past decade has brought three major economic shifts Land transport – Whether by rail or by road, transporting the that impact mining companies looking to expand existing end-product to tidewater adds additional energy expenditure – mines or develop greenfield projects: product-destination especially from a frontier location. The host country’s policy markets have expanded from Europe, North America and towards the pricing of transport fuels should be carefully Japan to include emerging markets in Asia, Africa and South considered; many countries in difficulty are pressured to America, which have nine times the population; energy costs remove or reduce such subsidies. Again, a market proxy may have increased from $17 per barrel of oil on September 9, be helpful in determining the project’s sustainability. 2001, to over $140/bbl and back Ocean transport – The global shift down to $100/bbl in the ecoin destination markets impacts nomic downturn; and public sec“Globalization’s demands and Cargo-Insurance-Freight pricing tors are running fiscal deficits and Freight on-Board Asian Port the rising cost of energy have while mining remains profitable, payment term costs. The greater disleading cost-sharing for capitalcombined to render efficient tance and the demurrage/queuing at intensive projects to be re-evalutransport and supply chain the destination port, and the price ated by governments. of fuel are new cost factors. These management essential and As mining companies prepare aspects are generally dismissed as a their feasibility studies (FS), they especially vital at a time of “working capital” (inclusive of should not underestimate the conservative capital markets.” works in progress) of 60 days to 90 potential impact of these trends. days, by the traditional FS. This is This requires a thorough review of no longer accurate. traditional cost and cost-sensitivity practices. To provide a starting point, the following factors Logistics – Rising fuel costs force bulk carriers to reconsider must be taken into account when preparing an FS. the Less-than-Cargo-Load term, to raise the threshold volume required for a stop and to add extra stops to reduce Milling costs – Energy costs are a major part of the millexcess capacity risk. For mining companies, this means more processing cost formula. Countries often support mining tonnage in the supply-chain, more inventory waiting at exitprojects by offering energy prices below cost as an incentive the-mill, in-transit while on rail or truck, and at tidewater, to industrial development. However, cost-recovery policies and longer ocean-transit periods to Asian destination ports. implemented due to public-sector deficits, combined with The traditional FS has tended to overlook the specific logisthe increasing cost of energy, may alter the economic sustaintical needs of a project’s situation relative to its markets. This ability of certain projects. An FS may require analysis using a would be an expensive oversight on capital requirements at a market proxy to confirm project viability should market time of scarce funding. costs prevail. Renewable and co-generated energy options In summary, globalization’s demands and the rising cost also warrant review. The national grid should also be assessed of energy have combined to render efficient transport and to see where the grid’s fuel bases and capacities stand, espesupply chain management essential and especially vital at cially in fast-growing, emerging economies whose fuel-base a time of conservative capital markets. Combined with a may be soon obsolete or taxed by the growth. public sector that may be less willing to subsidize, the FS Energy distribution – With projects assuming more remote must now include more relevant cost-proxy tests and releor frontier locations, and countries running fiscal deficits, it vant supply chain reviews to reflect the economic sustainis no longer viable to assume supporting infrastructure will ability of a project. Simplistic sensitivity assumptions of, come from the public sector. Even if it does, the private pro- say, +/- 10 per cent for cost variances and of three months curement option should still be assessed due to the timing of working capital are less applicable. A mining company advantage, as infrastructure availability must often precede looking for a complete and current FS must insist the conthe project’s construction. Private procurement will also re- sultancy group doing the study has supply chain and duce the risk of inflation and the “wish list” required of the energy expertise. CIM public sector, allowing the mining company to focus more on obtaining investors and permits. However, the cost of procur- The author is now a semi-retired consultant and has over 33 years of in financing and advising extractive and infrastructure projects ing private infrastructure must be weighed against the tighter experience around the world, having worked with multinational banks, the World Bank Group and EDC. He has an MBA and a BA from UBC. capital markets.

34 | CIM Magazine | Vol. 7, No. 6

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S TA N D A R D S

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NI 43-101 standards and best practice guidelines: data verification using geophysical logs when sampling coal BY GREG GOSSON AND RON PARENT

oal projects that require unique considerations be taken into account when it comes to disclosure of drill sampling procedures, quality control measures, data verification and the adequacy of the data to support resource estimation in compliance with NI 43-101. Companion Policy 43-101CP references the following guidance documents for coal: • Geological Survey of Canada Paper 88-21: A Standardized Coal Resource/Reserve Reporting System for Canada • Guidelines specific to coal in CIM Estimation of Mineral Resources and Mineral Reserves – Best Practice Guidelines, which also references ° ASTM standards Volume 05.06 – Coal and Coke These documents provide best practice guidelines on drillhole sampling procedures that should be considered when disclosing coal sampling results under NI 43-101. Specific disclosure requirements under NI 43-101 include: • Exploration Information (s.3.3(1)(c)): the quality assurance program and quality control measures applied during the execution of the work being reported on. • Data verification (s.3.2 (a) and (b)): a statement of whether or not a qualified person has verified the data disclosed, including the sampling, analytical and test data underlying the information; and a description of how the data was verified. • Item 11 of Form 43-101F1 Technical Report: sample preparation methods and quality control measures employed before dispatch of samples to an analytical or testing laboratory. Geophysical logs: Down-hole geophysical logs are an essential part of the quality control measures employed during coal sampling, before dispatch of samples for analysis. Variations in coal quality, such as high-ash beds that are difficult to detect visually, can be discerned from geophysical logs. Geophysical logs from nearby drill holes can ensure equivalent intervals are sampled consistently in each of the cored seams. Core recovery: Coal is one of the most difficult materials to core and sample because of its heterogeneity and brittle nature. Core recovery of 90 per cent to 95 per cent in the zone of economic interest would be considered acceptable for most mineral deposits but could yield misleading data for coal projects. Crushed core or core loss can cause an incorrect estimation of the coal interval. A core logger can determine that core

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is lost from the drilled interval, but without a geophysical log, it is not possible to determine whether or not the lost core is coal. Core recovery should be determined by comparing the total length of recovered core with the total length of the coal seam, as determined from the geophysical logs. QA/QC During sampling: Separating the coal samples into coal plies and partings based on geophysical logs during core sampling is best practice because a rock parting may be observed on the geophysical log, with no evidence of it in the core log. In addition, a parting may have been misidentified by the core logger, or not recovered at all during drilling. It is not good practice to sample two coal plies together and an internal parting separately. Individual coal plies and partings should be sampled independently, except for thin (<20 cm) partings that would not be separable during mining. Proper full seam composites can then be calculated during the modelling process. If desired, plies can be sampled together at the laboratory by combining the remains of the individual plies and analysing the coal quality. The geophysical log is an important part of the data verification process. Under NI 43-101, “data verification” means the process of confirming that data have been generated with proper procedures, have been accurately transcribed from the original source and are suitable to be used. When properly calibrated, the geophysical log is much less subject to human error than a visual core log. Inconsistencies between geologists’ descriptions, errors in the positioning of the core in boxes, lost core, et cetera, all introduce errors into the core log. These errors can be mitigated by the use of the geophysical log as the unbiased umpire when logging the core. The authors consider it best practice to have the core logged by the geologist using the geophysical log as a reference to determine core recovery and appropriate sample intervals, and to identify significant lithological changes appropriate for modeling of the coal seam thickness and quality, and the thickness and position of rock strata. CIM Greg Gosson, Ph.D., P.Geo. is the technical director of Geology & Compliance for AMEC Americas Limited. He is a frequent speaker on mining technical disclosure standards at mining industry forums. Ron Parent, P.Geo. is a principal geologist with AMEC Americas Limited, and has over 20 years experience in coal projects, primarily in Canada and Colombia. AMEC is a leading international consulting, engineering and project management company.

HR OUTLOOK

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WIM Canada creates HR strategies that work BY ALANA KENNEDY

This year’s Women in Mining Canada (WIM) plenary, held at the 2012 CIM Convention in Edmonton in May, took a fresh approach to engaging women in the industry’s challenges by running a forum structured like a focus group to encourage attendees to share their views and experiences on how to attract, retain and advance women in mining. “We wanted to take the conversation to the audience,” says Catherine Shaw, chair of the WIM Canada forum. “The forum was an opportunity to ask participants how they would address the three key challenges faced by employers in the areas of attraction, retention and advancement of women.” WIM plenary attendees were split into four focus groups to explore these issues and were overseen by an expert panel of mining HR representatives, geologists, engineers and diversity experts. Currently, women in the Canadian mining industry represent 14 per cent of the workforce – the lowest among primary industry categories and far less than the national average of 47.4 per cent. The mining industry will need over 100,000 new workers in the next decade. If women are truly an untapped resource, how can women and industry work together and attract bright minds for the future? Participants who were part of the discussion group that focused on attraction began by examining how they themselves MOVING ON UP Anglo American South Africa ops get new chiefs Anglo American Plc made several executive management changes at its businesses in South Africa. Chris Griffith, formerly of Kumba Iron Ore Ltd., was named chief executive at Anglo American Platinum Ltd., and Norman Mbazima, a former chief executive of Scaw Metals, was appointed CEO of Kumba Iron Ore. Godfrey Gomwe was named CEO of Anglo American’s Thermal Coal unit. Gomwe led the company’s operations in Zimbabwe. Khanyisile Kweyama was named executive director of Anglo American South Africa, where she will cooperate with the heads of the South African units to deliver the group’s strategy in the region. “I believe that this series of leadership changes will enable us to continue our success in driving operational performance across our portfolio of businesses in South Africa, in line with our clear strategic objectives,” said Anglo American CEO Cynthia Carroll. “I congratulate Chris, Norman, Godfrey and Khanyisile on their new roles – a clear demonstration of the depth of management talent within Anglo American. I thank them all for their strength of leadership and significant achievements in their current roles.”

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had entered the industry. Most agreed that they had fallen into a mining career, as opposed to making an intentional choice to learn about the industry. They felt a large-scale promotional campaign would attract more women to the mining industry. They also suggested employers target women in the classroom more aggressively; synergies could be achieved if companies collaborated in their approach. The discussion of retention focused on reducing mid-career attrition of women. Retention through innovative retention programs was first recommended in a WIM research study, 2010 Ramp-UP: A Study on the Status of Women in Canada’s Mining and Exploration Sector. Members of the focus group agreed with the study’s recommendations, suggesting employers could improve retention by implementing truly flexible work arrangements, and child care and parental leave practices. Participants stressed the importance of these arrangements for women in roles where travel to remote sites is part of the job. Discussions on advancement began with an alarming statistic: the Canadian mining, and oil and gas industries have less than 1.4 per cent of CEO roles occupied by females. Only 5.9 per cent of board positions and 12.3 per cent of senior roles are occupied by female staff. Leadership and mentoring quickly emerged as a possible solution to advancing women in the industry. In general, women in the group were not concerned about their mentors’ gender but indicated it was important for women to be given the tools and the opportunity to develop their own leadership style. Also, participants indicated a woman’s leadership style is different from the traditional masculine idea of leadership. If you are an employer reading this, what can you do to attract, retain and advance more females in your organization? “To be successful, organizations need the full engagement and commitment of their entire workforce – both women and men,” expressed Leanne Hall, Noront Resources’ human resources vice-president, who moderated the WIM forum. “The executive learning elements of these HR focus groups is meant to speed up that process. Together we can create practical solutions to the challenges many of our organizations face.” Women in Mining Canada would like to thank CIM for its support and BHP Billiton for sponsoring the event. For more information on WIM Canada and resources like the RampUP study, please visit www.wimcanada.org. CIM

Alana Kennedy, director of marketing and communications at the Mining Industry Human Resources Council, is responsible for promoting MiHR solutions and products through stakeholder communications. Alana was formerly head of marketing for a group of accountants in the UK. She is a Chartered Marketer (UK) with more than 14 years of experience.

MARKETING

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Successful communication starts with the right research BY ROBERT SIMPSON

o mining company would think of building a mine company in communication with local journalists who, without knowing what was in the ground. Why then until that point, had given more credence to the opposition’s do so many launch communication campaigns without point of view. having a clear understanding of target audiences? Companies The other goal in conducting the survey was to collect that take the time to understand stakeholders before launch- data about how stakeholders in the community gather and ing communication programs will be far more successful process information and use it to create an education prothan those that do not. Strategic, science-based research can gram focused on raising awareness about responsible mining make or break such programs. of metallurgical coal and to address Using stakeholder analysis as a some negative, outdated percep72% of respondents supported foundation for strategic corporate tions of the industry. the mine expansion project, communication is a relatively new It was discovered that the majorapproach for the coal mining indusity of those who opposed the project contradicting the company’s try. Its popularity is growing as processed information visually and perception of significant stakeholders become more sophisverbally. The company opted to community opposition ticated in how they process, deliver deliver its message in a format stakeand consume information. Compaholders would find relatable which, nies can use information gathered through qualitative and in this case, involved creating a narrative, using video, quantitative research to develop strategies for connecting images and online tools. with stakeholders that have the added advantage of aligning A three-part video series was created to meet the needs of with internal corporate strategic and operational goals. visual learners. The first video illustrated mitigation measures A metallurgical coal mining company recently contacted for dust, noise, protection and the protection of water; the our firm for assistance in responding to increased commu- second told the story of the company’s long-standing community opposition to mine expansion plans. Organized local nity involvement and commitment to environmental protecopposition to the project appeared to be gaining momentum, tion; the third focused on educating audiences about the use and the company was concerned about its potential to derail of metallurgical coal, as well as on modern extraction and the proposed expansion. reclamation methods. CDs of the series were distributed to The company already had a communication plan in place, each household in the area. The videos were also broadcasted but the community relations piece of the plan had been devel- on local television in high frequency over a four-week period. oped without baseline research. As a result, the company did For verbal learners, the company created interactive not clearly understand the extent of the community’s opposi- online tools, including a project-specific website that allowed tion to the project, or how this opposition could impact its for a two-way conversation with community members. ability to earn social licence and secure the necessary permits Questions posed by community members were answered to move forward. It also meant the company had no way to online on a daily basis. measure the success of its plan to change perceptions. For the verbal communicators, a telephone hotline was set Our first step was to design a statistically significant per- up to allow community members to discuss concerns ception audit to determine the level of community support of directly with a company representative. There were also and knowledge about the project. The audit also revealed the weekly town hall meetings to give people an opportunity to demographic makeup of the community, its perceptions pose questions directly to the company president. about the company’s outreach efforts to date, as well as its Research was used to measure the effectiveness of the attitudes towards the mining industry in general. tools. It revealed that 67 per cent of the households surveyed The survey data provided some surprising results. Most had viewed the videos and 88 per cent of community memsignificantly, it showed 72 per cent of respondents actually bers had seen the television broadcasts. Overall, impressions supported the mine expansion project, thus contradicting of the company and support for the expansion plans imthe company’s perception of significant community oppo- proved seven percentage points, up to 78 per cent. CIM sition. The research gave the company a more accurate picture of the community’s attitudes towards the project, and Robert Simpson is the president of PR Associates, a national public relations became the basis for its subsequent communication with firm that specializes in providing strategic communication for the extractive provincial and federal governments. It also helped the sectors.

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SAFETY

Best practice basics for project construction safety BY DAN WELSHONS

ach construction site is unique, so each project’s safety management system should be as well. When putting the system in place, many variables must be considered, beginning at the planning stages and continuing through to closeout. Environment, region, culture, workforce skill and ability, contractor experience and scope, regulations, budgets and politics are just some factors that influence a robust project safety management system. The industry has established a strong baseline of best practices that are a fundamental part of a safety system. These elements are key to successfully executing work safely. After decades of improving safety culture, we now know that a safe project construction site can be achieved through careful planning and consideration, as well as through investments by the project owner, the project company and the contractors. Of course, the evolution of best practices is never complete – the documented history of proven techniques and successful approaches on similar projects has helped identify key approaches, but each unique project can help refine and expand what we have. To get started, here are a few basic best practices that should be applied at any mine construction site:

Organize an initial alignment session It is important that owners, project teams and prime contractors agree – from top to bottom – on what the project will look like from a safety

perspective. Project stakeholders should provide their experiences, beliefs, values and commitment to building a project safety management system that fits the needs of the project. This will promote ownership of the project’s goals, policies, plans and work procedures.

Document the health and safety policy A written and signed health and safety policy, posted prominently on-site, demonstrates the project stakeholder’s commitment to safety. It also encourages leadership staff and other team members to become involved, and acts as a powerful reminder of the commitment to and the expectation of safety that all parties should maintain. Set project performance goals All incidents are preventable. Stakeholders must state zero harm as an overall goal to drive home the safety message. While there is nothing wrong with other statistical performance goals, or lagging indicators, significant emphasis should be placed on identifying leading indicators that support the desired behaviours of the project team. This approach will uncover gaps within the attitudes or competencies of the workforce, their degree of leadership involvement, their understanding of each individual’s role, as well as their knowledge of the overall safety management system. Actionable and measurable leading indicators allow the team to analyze results and look for improvement opportunities. The practice of setting goals, measuring against them, and taking advantage of the takeaways, is a key ingredient for developing a culture based on best practices.

Make safety planning a priority Planning is a critical component of everything we do. Strategic planning, from a project safety perspective, identifies the best tools for the job and documents how to use them in an organized approach. Typical safety planning documents deal with proper training, active leadership, roles and responsibilities, reporting, incident management, communication, auditing/gap analysis, and continuous improvement methods. Understanding the content of planning documents can be a challenge for those performing the work. Best practice suggests that clear concise procedures, documents and 40 | CIM Magazine | Vol. 7, No. 6

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tools are most readily implemented by field teams. It is important this gap is understood and that proper communication is prioritized during project initiation.

Learn from the project closeout It is very important to capture results in real time and to feed the information back into the safety management system in order to continuously improve the best practice approach. During the project closeout process, it is also essential to properly incorporate key takeaways back into the core structure of the stakeholder’s safety management systems. It is also necessary to share these takeaways with the mining construction community to allow others to capitalize on them. To reach the goal of no harm, we need to apply recognized best practices and allow our best practices to evolve as the safety practice grows, and as we learn how to better use or deliver them. It’s up to us, who take pride in our safety culture, to make game-changing moves and to keep raising the bar in construction safety. CIM Dan Welshons is the global director of health and safety for Hatch’s project delivery group.

GIVING BACK Cenovus Energy and the Calgary Youth Justice Society (CYJS) are working together to support vulnerable young people in the community through a leadership development program called “In The Lead.” Cenovus employees are volunteering as coaches to support students with high-risk behaviour. Under the program, the Cenovus coaches are matched with selected high school students, who are designated as “Young Leaders.” These students come from the Calgary Board of Education’s “Discovering Choices” schools, schools that offer outreach programs for young people that have difficulties with regular school programs. “I was looking for a company that was ready to engage its own people and its own values in a meaningful way and Cenovus was more than willing,” said CYJS executive director Denise Blair. “They made a significant financial investment in the project, though just as importantly, they invested their own human resources.” The program offers these students an environment where they are not judged, where they can explore and develop their skills. It is a program that helps them focus on their strengths, not on their weaknesses. In The Lead takes the coach-student pairs on a 16-week journey. Stories are shared, and coaches provide insight into life and approaches to leadership. Students also participate in a community project and work through a leadership curriculum. Cenovus is providing $700,000 in funding for the program.

September/October 2012 | 41

VOICES FROM INDUSTRY

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Raising a stink BY JOHN K. NIXON

ast May, I found myself in a conference room at the Four Seasons Hotel in downtown Vancouver, attending a CIM Vancouver Branch luncheon. John Tapics, president and CEO of Compliance Energy Corp., was set to speak about the company’s Raven underground coal project in Comox Valley. Seated at my table was Lisa, a first-year university mining engineering student. After the initial introductions, we dug into our meal. After lunch, Tapics began his presentation. He revealed the Raven mine would be an underground operation, mining coal seams 20 kilometres south of Courtenay. As he spoke, I recalled stumbling on a country fair south of Courtenay on a summer vacation. In a farmer’s field, dozens of tents and vendors’ stalls promoting natural foods, homeopathic medicines, handmade jewellery and tie-dyed tee shirts were interspersed with fortune tellers, pony rides and games for children. According to Tapics, Raven Coal’s production would reach 1.1 million tonnes of coal per year over a 16-year mine life. Raw coal would be upgraded in a surface processing plant five

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kilometres from the coast, and the product would be transported over land to Port Alberni for shipping to Asia. A bankable feasibility study had been completed and environmental permitting was underway. Tables of figures flashed on the screen, summarizing the economics of the project and extolling its benefits to the local economy. As the presentation ended, there was a commotion at the entrance to the room. Guests observed two young men walking between tables, tossing lumps of coal onto the carpet, chairs and tables, and screaming obscenities. Across the room, two young women poured a foul-smelling, lumpy, grey sludge from plastic jugs onto the carpet, splattering the clothes of nearby guests. The offending liquid was later, I believe, identified as poultry feces. The incident was over in a minute, and the intruders hastily departed after activating the hotel’s alarm system. As guests frantically attempted to clean their clothes, the chairman hurriedly closed the meeting, offering to pay the dry cleaning bills of those affected. Guests filed out, picking their way across sodden carpet and scattered lumps of coal, as sirens wailed. We were directed to an emergency exit leading to street level. Outside, there were fire trucks, and behind them, a HAZMAT truck approached, with specialists in hazardous materials donning white coveralls and masks. In a world obsessed with global warming and the probable role of humans in the process, coal mining has become a flashpoint for protest. Arguments concerning the availability of renewable non-polluting energy sources, the steady decline of fossil fuels and the rising demand for energy to support a growing world population, are well-documented and constantly debated. Surely, the solutions to these problems will be found eventually through reasoned discourse that weighs the costs and benefits of coal to society, and to the long-term health of our planet. So, Lisa, please believe me; there are people in mining dedicated to improving our collective welfare and sustaining the environment. I only hope that, after what happened that day, you will not be discouraged from a career in mining. The industry needs more young persons of your gender to help maintain a balanced view of its responsibilities to society. The fate of the Raven underground coal project should not be determined by outbursts of profanity and distribution of chicken manure. This is not the way to win friends and influence people – with the exception perhaps of those in the dry cleaning business! CIM John Nixon is a professional engineer with SNC-Lavalin Inc. in Vancouver. He has over 48 years of engineering experience, mostly in mining and metallurgy. He holds a B.Eng. degree from McGill University and an MBA from York University, and is a Life Member of CIM.

NEW – Certification in Ore Reserve Risk and Mine Planning Optimization Spread over a period of four months, this four-week course is designed for busy mining professionals who wish to update their skills and knowledge base in modern modelling techniques for ore bodies and new risk-based optimization methodologies for strategic mine planning. Gain practical experience by applying the following hands-on concepts and technical methods: methods for modelling ore bodies; stochastic simulations, case studies and models of geological uncertainty; and demand-driven production scheduling and geological risk. INSTRUCTOR: Roussos Dimitrakopoulos, McGill University, Canada • DATE: Returning May 2013 • CITY: Montreal, Quebec, Canada • INFO:

Geostatistical Mineral Resource/Ore Reserve 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; Jean-Michel

www.mcgill.ca/conted/prodep/ore

Rendu, Newmont Mining Corporation, USA; and Roussos Dimitrakopoulos, McGill University, Canada • DATE: Returning September 2013 • CITY: Montreal, Quebec, Canada

Strategic Risk Management in Mine Design: From Life-of-Mine to Global Optimization

Mineral Project Evaluation Techniques and Applications: From Conventional Methods to Real Options

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.

Learn the basics of economic/financial evaluation techniques, as well as the practical implementation of these techniques to mineral project assessments; how to gain a practical understanding of economic/ financial evaluation principles; and how to develop the skills necessary to apply these to support mineral project decisions.

INSTRUCTORS: Tarrant Elkington, Snowden, Australia; and Roussos Dimitrakopoulos, McGill University, Canada • DATE: March 2013 • CITY:

Montreal, Quebec, Canada

An Introduction to Cutoff Grade: Theory and Practice in Open Pit and Underground Mines 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, Newmont Mining Corporation, USA • DATE: Returning September 2013 • CITY: Montreal, Quebec, Canada

INSTRUCTOR: Michel Bilodeau, McGill University, Canada • DATE: October 22-25, 2012 • CITY: Montreal, Quebec, Canada

Quantitative Mineral Resource Assessments: An Integrated Approach to Planning for Exploration Risk Reduction Learn about exploration risk analysis for strategic planning. Understand how to demonstrate how operational mineral deposit models can reduce uncertainties; make estimates of the number of undiscovered deposits; and integrate the information and examine the economic possibilities. INSTRUCTOR: Don Singer, USA; and David Menzie, U.S. Geological Survey, USA • DATE: September 24-26, 2012 • CITY: Montreal, Quebec, Canada

upfront E D U C AT I O N b y K r y s t y n a L a g o w s k i

Energy-focused EMBA targets international need

Courtesy of Suncor

University of Calgary program offers exclusive energy content in alternative format

Global Energy EMBA group during a tour of Suncor Energy

n 2008, Harrie Vredenburg was working with PEMEX, Mexico’s state oil company, when he realized something was missing in the education of many oil executives. “PEMEX had a cohort of middle managers that required the kind of training and education in management skills traditionally provided by an MBA program, but the company didn’t want to send them away to study for two years,” he says. “There are a lot of state oil companies as well as multinational companies and smaller oil companies, not just in Mexico but in China and the Middle East, all over the world, with the same issues.” In the mid-1990s, when energy prices were low, many avoided careers in the sector and a gap in knowledge is the result. “That missing generation means that there’s a lack of people at a higher management level with management and leadership skills,” explains Vredenburg. In addition, “historically, multinationals operated in places like Latin America, Africa, the Middle East, China and India, which is where the industry is booming,” he explains. “Now these resources are being developed by national oil companies, which have a dearth of knowledge, management and strategy because they’re relatively new. They also have a

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new generation of people coming in, like at PEMEX, who are going to be the next generation to run these companies – they need high-level management education and training.” These insights landed Vredenburg where he is now, as the academic director of the University of Calgary’s Haskayne School of Business’ Global Energy Executive MBA program, a joint venture with IHS Cambridge Energy Research Associates (IHS CERA). This year, the program’s first 15 participants from across the world have enrolled. The school has a traditional Executive MBA program, where participants work full-time and meet every other weekend, and that serves as the foundation for the new program. “We took our classic Executive MBA and gave it an exclusive energy focus,” Vredenburg explains.

Tailor-made

The program is 18 months long, and participants meet intensively for approximately two-and-a-half weeks at three-month intervals in different parts of the world, including Calgary, Fort McMurray, London (U.K.), Saudi Arabia, Houston and India. Between visits, they attend online classes taught by both the Haskayne professors and IHS CERA consultants. Vredenburg says it is the only course of its kind in the world. “There are other energy MBA programs in Houston and Norway, but they’re majors in a general MBA program – so you do a regular MBA, and you have a couple of energy electives,” he points out. “There are none that are totally coordinated around energy, and structured over 18 months like ours.” Gary Cochrane, who is the chairman and acting CEO for Bounty Mining Ltd., an Australian junior coal mining company, is among the first cohort. “I like that this program offers block study time and that you study in a number of different countries,” he says. “I also like the connection with IHS CERA, with whom I’ve worked and I know is a large international firm.” Indeed, IHS CERA has been crucial to the program becoming a reality. “They have the kind of experts that couldn’t be found in a business school setting,” Vredenburg says. “For

upfront E D U C AT I O N

example, there isn’t a business school academic anywhere whose specialty is the nuance of supply and demand dynamics in the coal industry or the energy geopolitics of Russia – but IHS CERA has these experts.” According to Vredenburg, there is no other business school partnered with a non-university entity – in their case, a private industry consultancy – to offer a degree. The connection to the oil and gas sector in Canada and the U.S., especially the oil sands sector, is another valuable feature of the program, Cochrane says. “It’s great to work with guys who have worked in very different spheres, who have knowledge in oil and gas.” he remarks. “The other good thing is that we’re experiencing both the demand and supply sides – as well as London, which is a massive commodity trading hub.” Cochrane already has an MBA, as well as several other degrees, but he wants a deeper understanding of the oil and gas sector. “Visiting the oil sands, to see the scale of the operations and how that fits into the big picture of global energy – that’s invaluable,” he says. To ensure that all of the content is energy-related, the classic MBA courses, such as accounting and finance, have been tweaked to use energy examples. In the marketing course, the focus is on investor relations. There are no electives in the program, instead a spectrum of topics are focused through an energy lens. “We do a course on the geopolitics of energy, taught by Daniel Yergin, the founder of IHS CERA and author of the recent book The Quest: Energy, Security, and the Making of the Modern World,” says Vredenburg. “We also do a course on commodities trading, and one on managing socio-environmental issues in the global marketplace. These are critical to the industry, and no one should graduate without them.”

definitely suggest his clients put their top prospects through the Haskayne Global Energy Executive MBA program. “An engineer at five years’ experience in the oil and gas business probably has more responsibility and financial signing authority than an engineer in any other industry. They can make a company a million dollars, or cost their company a million dollars, so this kind of investment is not unreasonable.” He says programs like the one at Haskayne are good tools to aid staff retention as they help demonstrate that a company values, and is willing to invest in, its people. Tuition for the course is $105,000, in addition to the cost of travel to the various field sites, so altogether, the cost comes to about $150,000 or $160,000. But Vredenburg says that investment quickly pays off because employers avoid sending their high-flyers away for two years at a time. The program has been so successful that Vredenburg admits there have already been a couple of instances where a program participant has gotten a job offer from another company. “It’s a little sensitive, since the company is paying for it, so they have to work out the details of who exactly is going to pay for the program,” he says. “There is some risk for the companies that these individuals may leave. But philosophically, these are the high flyers that are most likely to be picked off – you have to work hard to retain these people by enrolling them in programs like this.” CIM

Real need Trevor Johnstone, managing partner of Calgary-based recruiting firm Johnstone Ritchie Professional Search Inc., has seen the shortage of trained energy executives first hand. “Some of the positions we’ve been working on in the past few months are for mid-sized oil and gas companies – they’re looking for someone they can promote to a manager or vice-president,” he says. His clients are typically looking for people who already have their skills in place, which means people who have been through a training and mentorship program at a senior or major company. Johnstone says he will now September/October 2012 | 45

upfront PROCESSING by Alexandra Lopez-Pacheco

From dust to dollars

Courtesy of White Energy

River Energy’s hunt for value in the coal fines of South Africa

White Energy's demonstration coal briquetting plant in Cessnock, Australia

n South Africa, it is estimated that some eight per cent of all thermal coal mined ends up as fines – a form that miners have struggled to convert to revenue for decades. In that country alone, there are 60 million tonnes of coal fines discarded each year from the crushing and washing processes of mining operations, and around two billion tonnes of existing discarded coal fines. These small particles, typically less than 300 microns in size, are ending up as waste in slurry ponds and they represent a significant untapped resource. “When the coal is put through a washing process to separate it from the rock portion, most of the equipment is based on the density of the rock or coal,” says Dale McLean, general manager of River Energy JV Pty Limited, a joint venture of White Energy Company Limited and Black River Asset Management. Coal as fines essentially slips through the cracks. “They are very difficult to process and handle and are generally discarded by the mines.”

Better briquettes To avoid throwing fines away, they need to be lumped together into briquettes – a concept that seems simpler than it is. Traditional briquetting technology has been around for a century but is based on using binders to hold the coal 46 | CIM Magazine | Vol. 7, No. 6

together, altering its properties and making it less attractive to end users. Besides, in the past, briquetting had been used to try to upgrade lowcalorific coal to a higher quality coal rather than for fines. And even in that, there was little success. This has put making briquettes out of fines pretty low on most to-do lists. But not at White Energy, which was borne out of the potential to commercialize binderless coal briquetting technology (BCB). White Energy has an exclusive worldwide licence for BCB technology, which began development in the 1990s through a consortium led by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia. CSIRO, along with U.S.-based briquetting company K.R. Komarek Inc., coal drying company TraDet Inc. and the Griffin Coal Mining Company Pty Ltd., was searching for a way to convert lowrank, high-moisture coal into an upgraded coal by turning it into a binderless briquette to add value to the end product. By 2006, the team had developed the patented BCB technology, which involves a simple thermal drying process, followed by the pressing of the briquettes that are held together by the natural bonding mechanisms of coal. According to Jason Nunn, White’s technical manager, BCB can essentially upgrade sub-bituminous coal to the heatvalue of bituminous coal with none of the adverse effects of using binders. “By taking the moisture out, you increase the energy and create a product that is much more attractive to the market,” says Nunn. The result is high-calorific content and quality that also retains the low emission profile of the feedstock subbituminous coal and can be used interchangeably with other high-ranking coals. Because the price of coal is based on its energy content, with the highest calorific count bringing in the top dollar, BCB technology does not just upgrade subbituminous coal’s heat-values – it also upgrades its price. At its demonstration plant in Cessnock, Australia, White Energy has tested and analyzed coal samples of over 100 coals of various types with a 95 per cent success rate in turning fines into briquettes. This has included the successful briquetting of coal fines samples from all the major coal players in South Africa, which to date is in excess of 200 tonnes.

In 2008, the U.K.’s Black River Asset Management agreed with White Energy on the potential of commercializing BCB to recover fine coal waste in Africa. The two formed a partnership that resulted in the formation of River Energy, which is 51 per cent-owned by White Energy and 49 per cent by Black River.

Tonnes of potential River Energy has been aggressively spreading the word on the many benefits of its technology for waste fines to South African mining companies. “There’s a lot of stress on coal operations with the amount of tailings and waste they’re producing,” says Nunn. This stress does not simply include reducing waste but also the costs of managing it. So even with each briquetting plant costing tens of millions of dollars, according to Nunn, the potential for a very attractive return on investment from processing waste coal is significant. “Waste material from coal processing plants has typically been placed into slurry ponds to allow the material to dry out,” says River Energy’s McLean. “Not only is this a missed opportunity to recover saleable coal, but it carries a significant cost and potential environmental and rehabilitation liability. There are licensing and permitting requirements around that as well, so I think the cost side of the equation is a very significant one when you look at the coal fines over their life.” Despite the potential, River Energy has to climb over a big hurdle. “There are always challenges but the main issue for us to overcome is that this will be the first-of-a-kind application of this technology to this particular material,” says Nunn, “And there could be apprehension on the part of a customer. We’re addressing this by working closely with potential customers on technical matters including running their coal fines through our pilot and demonstration plants in Cessnock, and rigorously testing the briquetting product. We are also willing to take on the risk of a first coal fines BCB plant by putting up significant capital.” And after South Africa: “There’s a potential for a huge market worldwide,” Nunn points out. “That’s the big prize. At this point, we need to get a commercial plant in South Africa going. Once we have that done, there’s Canada, the United States, Australia, China, India and Indonesia. There’s coal everywhere. The world’s our oyster.” The technology, say both Nunn and McLean, can also be applied to re-mining of previously abandoned operations to reclaim some of the remaining coal. “We can work with clients to increase the yield when the mining process creates additional fines,” says McLean, who adds that his company is in talks with around six of the major coal players in South Africa. Demand for River Energy’s products will also be driven by Eskom, the South African government’s energy company, and the largest consumer of coal in South Africa, which is looking closely at fine coal and briquettes as a potential supplementary feedstock for its power stations. According to McLean, River Energy is very close to a securing a deal with one of the major coal mining companies to build a plant that would process a minimum of 500,000 tonnes annually. CIM

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September/October 2012 | 47

upfront TRAINING by Dinah Zeldin

Total rehaul Courtesy of Vista Training Inc.

New training program improves safety and efficiency

Pre-operation inspection is part of the TruckLogic training curriculum at Suncor.

n the span of one month at Suncor Energy’s Millenium mine in 2011, haul truck operators from two shifts saw their productivity jump by 3.5 per cent. On top of that, the safety incident rate for new drivers, of which there were 65, plummeted 50 per cent and experienced operators recognized an improvement in the performance of new hires. Those numbers were a surprise to some, who had been skeptical a new haul truck operator training program called TruckLogic would not disrupt operations and actually make matters worse. But the proof is in the pudding and the success of the two-shift pilot project, which began in April 2010, means TruckLogic is now used at both the Millenium and Steepbank mines, and is making its way to more of Suncor’s operations.

Made for real people The TruckLogic program is designed by Vista Training Inc. with adult learning principles in mind. “Research found adults need to tie learning in a classroom to an experience they can relate to in real life,” explains Bruce Rabe, CEO of Vista. By pairing conceptual in-class learning with on-the-job activities, TruckLogic provides that experience-based learning. But the success of the program also relies heavily on the 48 | CIM Magazine | Vol. 7, No. 6

close collaboration between Vista, Suncor’s classroom trainers and mentors in the field. “We had been doing computerbased training programs since the early 2000s,” says Rabe. “According to customer feedback on those, students were able to answer ‘check your knowledge’ questions in the computer lab, but the next day, when they were out in the field, they couldn’t apply the training. We created TruckLogic to address that disconnect between the computer lab and the field.” Before TruckLogic was in the picture, Suncor’s haul truck operators were trained with a six-day, comprehensive computer-based training program, followed by time spent riding along with experienced operators on overburden hauls. “They did not really get to operate the truck until they were out in the field with their mentor,” explains Richard Mieklejohn, senior trainer/operator at Suncor. “Now we do it in segments.” With the old system, new operators continued driving on overburden runs until they gained experience and were only allowed to drive on ore runs once they had plenty of operating hours under their belts. But the TruckLogic program requires trainees to practise all aspects of their roles within five days. That means trainees drive on ore runs where, on some sections of the haul road, there is constant heavy truck traffic. This was a concern for many trainers, who feared fresh operators on the ore run could impact productivity and cause incidents. But Vista has found ways of mitigating that risk. “First they learn [in the classroom] how to drive the haul truck up and down the road, and then we will take them out with their mentors and all they can do is drive up and down the haul roads,” says Mieklejohn. “When they get to the shovel pits and the dumps, they switch operators.” “Switching operators could potentially cause safety or production issues, but within a month, I saw we had more production and better quality operators because of the quality time mentors were spending with each person,” Mieklejohn remembers. The new five-day program is divided into three modules: haul truck operation, dumping and loading. Each module consists of in-class instruction, simulator activities and on-thejob training with a mentor.

upfront TRAINING

Holistic, customized training

Logical next steps

While Vista’s team focused on refining the curriculum to McClain is heading an initiative to export the TruckLogic meet adult learning needs and on guiding Suncor’s trainers training template to other equipment operator training prothrough implementation, Suncor’s team acted as subject matter grams. He points out that Suncor has applied TruckLogic’s experts, providing details that needed to be incorporated into incremental learning approach to in-house shovel training. “We the program. “We spent six months to one year working with used the basic concept of doing it in small steps and giving our trainers to collect input on what the program should operators time to practise, and the preliminary results are fancover,” says Kirk McClain, manager of fixed plants operations tastic. The 15 shovel trainees that came out of the training are training, who led the program’s implementation at Suncor. running as well as or better than experienced operators.” “Trainers brought the operational experience needed to tweak Suncor and Vista are now collaborating on training prothe program to make sure it was comprehensive. They helped grams for dozers and utilities operations. McClain says the incorporate simple things, like how to back in to a shovel, into dozer training program will be piloted next spring, while the the program.” utilities program, which will cover all activities related to manVista provides a package of material, including a two- aging electrical cable supply to electric shovels in the mine, day training program for trainers, delivered on- or off-site, will be in development until next fall. and an information package for mentors, covering all Simultaneously, Vista is customizing the TruckLogic proaspects of procedures and policies. Trainees get a list of gram to meet other customers’ needs. Rabe says the company questions to ask the mentors as they ride along. And, is working with two new clients, one in British Colombia and according to Rabe, Vista has designed the program to another in the United States. “In each of those cases the cusensure that critical information gets passed on. tomer has a different loading practice and is mining a different “There is a lot of tacit knowledge an experienced oper- commodity, so we are working with them to customize the ator acting as a mentor has,” explains Chuck Frey, market- loading module of the course,” he explains. Pricing depends ing manager at Vista. “If you are just putting someone on on the level of customization required, but Rabe estimates cost the truck with the mentor you are counting on the fact that at $1,000 to $2,000 per trainee. knowledge transfer is going to happen. We structure the For Vista, TruckLogic is just the first step. The company question sheets to encourage narrative coaching, where the plans to create a suite of programs for all heavy equipment experienced operator is guided to really explain what they used at mine sites. “Our programs are applicable at any point are doing and why, so the trainee really gets the benefit of in the mine life cycle,” Rabe says, “and will be adaptable to that knowledge.” any commodity.” CIM Suncor awarded the team behind TruckLogic’s implementation the 2011 Suncor President’s Operational Excellence Award for the way it benefitted trainees, trainers and mentors. “TruckLogic’s implementation improved processes for our trainees so they learned HOW DO YOU BUILD MINES ON A FIRM FOUNDATION? better,” explains McClain. “The program JUST ASK GOLDER. provided additional flexibility to dispatch our operators across our site and helped mentors feel more confident about their role in the process. Now we have more people that are willing to help and World class mining needs world class solutions. The challenges faced by mentor.” mining companies include remote sites, extreme weather and complex The curriculum “provides the big picgeology. Miners strive for operating excellence, accountability and ture, so the truck operators see how they fit into the overall operation and how they transparency towards the environments and communities in which they contribute to the bottom line of the mine,” operate. Golder can help you achieve this. according to Rabe. Trainees work with more confidence because they understand Engineering Earth’s Development, Preserving Earth’s Integrity. what the people around them are trying to accomplish. In turn, supervisors and trainees recognize that the trainees’ performance is improved. The whole operating team recognizes the opportunity to Canada + 800 414-8314 improve production and is willing to supsolutions@golder.com www.golder.com port that, so the program becomes part of the operation’s culture.” September/October 2012 | 49

upfront TA I L I N G S b y A l e x a n d r a L o p e z - P a c h e c o

Mix and match OSLI tailings pond water research probes technology combinations Courtesy of Suncor

tions, which now account for approximately half of oil sands production.” Despite these advancements, the search for improvements continues, not just to recycle more, but also to reduce the number of existing tailings ponds. “Right now some of the legacy operators, such as Suncor, have an excess amount of tailings water that we want to be able to recycle for such uses as cooling water, utility water and in-situ operations,” says Prit Kotecha, Suncor’s manager of water strategy and solutions.

The next big idea

Suncor’s Pond 1 tailings facility in 2002

mixture of water, bitumen, clay and solvents cover some 170 square kilometres of Alberta’s landscape. These are the tailings ponds created by the Athabasca oil sands mining industry, and everyone agrees their volume needs to be reduced. In fact, thanks to recent advances in water recycling technologies, something is already being done. Up to 95 per cent of water used by the Athabasca region’s oil sands companies is recycled from these ponds – and that means less and less fresh water is being used in the first place. “Water use and treatment in the oil sands is an important issue, and one on which we’ve made much progress in the last several years,” says Travis Davies, spokesperson for the Canadian Association of Petroleum Producers. According to the 2010 Responsible Canadian Energy Report, fresh water withdrawal by mining operations decreased by six per cent between 2009 and 2010 while production increased by four per cent. “In-situ oil sands projects averaged 0.4 barrels of fresh water per barrel of oil produced in 2009–2010, our lowest rate achieved to date, which is actually lower than the 0.6 barrels of water needed for each barrel of oil in conventional production over same period,” Davies says. “This is reflective of increasing recycle rates and greater efficiency at in-situ opera-

50 | CIM Magazine | Vol. 7, No. 6

In 2010, five members of the Oil Sands Leadership Initiative (OSLI) launched a pilot project at Suncor’s Pond 2/3 to test the performance of a number of water treatment technologies. These were to be tried out in different conditions and combinations in an effort to determine an optimal solution for treating tailings pond water. The research was carried out by Suncor on behalf of OSLI during winter 2010 and spring 2011. The pilot project researchers’ first step was to choose a combination of water treatment technologies that have the potential of being developed commercially. “In water treatment, each technology is specifically chosen to attack one or two parameters,” says Kotecha, who was one of the project’s leaders. “You never use just one specific technology. It is always a train of technologies. We did a technology review, then an overall evaluation process to select the technologies. The first technology, the dissolved air flotation, was chosen to remove oil and grease. Then we tested a slew of other filtration technologies to remove total suspended solids and finally we had reverse osmosis, which was there to remove total dissolved ions.” The size of the equipment was chosen for each technology in proportion with what would be needed to build a hypothetical full-scale system. “So each technology had a different flow rate depending on its ability to be scaled up,” says Kotecha. “For example, the dissolved air flotation was 40 gallons per minute and the ultrafiltration was around 20.” When deciding how to configure the train of technologies, the team had to consider not just the desired quality of recycled water but also the requirements of each of the technologies. For example, because the high levels of suspended solids and other fouling contaminants in raw tailings water can clog up the membranes of a reverse osmosis system, the team chose to pre-treat the water with ultrafiltration.

upfront TA I L I N G S

Once the equipment was set up, the tests of the ultrafiltration and reverse osmosis’ performance began under a wide range of conditions. These included varying levels of water turbidity as well as adding chemicals upstream. The team wanted to identify not just how all of the variables could affect the performance of the equipment but also how they affected the need for cleaning and maintenance. The broad range of equipment in the system means optimization is an act of give and take between the technologies. The tests found that while ultrafiltration was able to remove the majority of suspended solids, it failed to do the same with a large portion of the organic components, including total organic carbon. In addition, when tailings water is highly turbid, ultrafiltration membranes are fouled at much higher frequency, which in turn slows the equipment’s performance. And when high doses of polymer were added to the tailings water to enhance floc formation upstream of dissolved air floatation, it also led to an increase in the fouling of the membranes, which is particularly difficult to reverse through regular cleaning and maintenance. On the up side, however, the tests showed the technology could produce a suitable water quality supply to feed the reverse osmosis unit. Reverse osmosis was successful in removing an average of 96 per cent of total dissolved solids and high levels of organic compounds, but removal of lower molecular weight and diameter organic compounds averaged just 66 per cent to 64 per cent. And, just as the team had expected, there were a number of performance and maintenance issues, including the fact that the high levels of total organic carbon left in the water by ultrafiltration resulted in a high fouling rate in the reverse osmosis membranes. All the problems identified were exactly the types of issues the researchers had set out to find. While they confirmed these existing technologies were capable of achieving the targeted water quality, the biggest challenge that remains is achieving good longterm performance of the membranes, says Kotecha. A lot of this has to do with the fact that changes in water chemistry and temperature affect the performance of the equipment, so the pilot project concluded that seasonal influences on tailings ponds are something that will need to be investigated further. “Moving forward, we’d look at testing for a longer period of time to see how the technologies perform,” says Kotecha.

Many paths to a common goal Suncor will continue to research and test the technologies, says Kotecha, and is in the process of developing its next steps in tailings pond water recycling. That said, “we know there are probably a number of different technologies that could achieve the same objective and they each have their operational constraints,” notes Kotecha. “We know the technology continues to evolve and we want to be a part of that.” Suncor is working on a number of other fronts in the research for technologies to treat tailings pond water, including working with the Canadian Oil Sands Innovation Alliance and the University of Alberta.“The university

is looking at a slew of different innovative technologies,” says Kotecha. One of these technologies is based on work by Tariq Siddique, an assistant professor at the University of Alberta’s department of renewable resources, and his colleague Julia Foght. Recycling water from mature tailings ponds, says Siddique, is particularly challenging because the heaviest material separates from the water and settles to the bottom rather quickly, within the first couple of years, but it is a very different story for what remains. The fine tailings, which are made up of about 70 per cent water and 30 per cent fine clay, can take decades to solidify on their own. According to Siddique, current technologies to accelerate the separation of water from the fine tailings includes the use of polymers, whose environmental impact remains uncertain – and which were an issue with fouling the membranes in the Suncor pilot – or more expensive technologies involving centrifuges. He believes his team has found a better way by using microbes to speed up the settling process in mature fine tailings, thereby helping increase the amount of water recovered. “We are just using the indigenous microbes that are present in the tailings,” says Siddique. “So environmentally, there’s no impact and it’s also cost effective.” At first blush, there is a catch, because another environmental issue associated with tailings ponds is greenhouse gasses like methane and, “when you increase the settling with microbes, methane gas outputs are increased,” says Siddique. “But we believe that can be captured and used as an energy resource.” In the meantime, Suncor is determined to successfully tackle the issue of recycling tailings pond water and reduce the number of legacy ponds in the region. “If one company makes a reduction, it’s great, but if all companies are able to do it then that’s where we are going to see the real impact,” says Kotecha. “We want to continue collaborating and sharing knowledge with others.” CIM MOVING ON UP Kinross welcomes new CEO J. Paul Rollinson joined Kinross as chief executive and a member of the board of directors, replacing Tye W. Burt, who played an instrumental role in fuelling Kinross’ growth since the mid-2000s, especially by strengthening the company’s foothold in the international markets. Rollinson’s experience in the mining industry is extensive, with a particular focus on investment banking and corporate development. “Paul understands all facets of the mining industry, including exploration and mining, mining finance and mining transactions,” said John Oliver, chairman of the board. “He is highly regarded and well-known throughout the industry, and he possesses the leadership qualities we need to oversee and implement our strategy.”

September/October 2012 | 51

upfront Courtesy of the Coal Association of Canada

Q&A by Antoine Dion-Or tega

All fired up Ann Marie Hann shares her vision for the nationâ&#x20AC;&#x2122;s coal industry ast September, when Ann Marie Hann became president of the Coal Association of Canada (CAC), she took the lead in an industry that faces an uncertain future. By the numbers, the Canadian coal industry is in good health: production is expected to keep growing, as nine new projects are in the pipeline, and exports increased by 22 per cent in 2010 to meet the Asian marketâ&#x20AC;&#x2122;s growing demand. Within Canada though, the prospects for coal are less clear, as the federal government is targetting the emission levels of coal-fired power plants across the country in an effort to reduce greenhouse gas emissions. An ex-deputy minister in the government of Newfoundland Labrador and pastpresident of the Propane Gas Association of Canada, Hann has been busy in her new role, setting the course for the CAC and leading the discussion about coal.

CIM: What are the top three goals you want to achieve as CAC president? How are you going to do this? Hann: The first thing I did when I arrived was develop a threeyear strategic plan, which had four goals. A very critical one is positioning the association to be the source for relevant in52 | CIM Magazine | Vol. 7, No. 6

formation about coal. We launched a website earlier this year, and are about to finish the first economic study done for the industry in a considerable period of time. Another important goal is making sure that we have an effective voice on issues that affect us, and to make sure that when the government works on regulations that affect coal, it automatically reaches out to the industry, as opposed to the industry not being involved in the up-front development and ending up caught in a reaction mode. Having worked in government for many years at the senior level, that knowledge of how government works will be very helpful in government relations and advocacy work. CIM: In 2010, Canada produced 40 million tonnes of thermal coal, mostly for its own domestic use, and 28 million tonnes of steel-making coal, mostly for export markets. How will global growth affect each of these? Should we expect a shift in their relative importance? Hann: The medium- to long-term forecast is quite strong, particularly in the Asian marketplace. There are significant plans by Canadian producers to increase their metallurgical

upfront Q&A

and thermal coal output, and considerable capital investment plans are underway by the transportation chain, i.e. railways, ports and terminals, to ship increasing amounts of products. The domestic challenge is that Environment Canada has a regulatory proposal which, if implemented, would come into effect on July 2015 and substantially tighten emissions standards for coal-fired electricity generation. Currently, no Canadian power plant using coal can meet the standards, because the technology is not yet commercially proven or available worldwide. If thermal coal is to continue being used, there will have to be substantial efforts in terms of technology development. Failing that, you will probably see more interest in coal being exported. The challenge will then be: can miners economically change from supplying domestic power plants to shipping that coal to port? For some of the mines, that won’t be an economical option. CIM: The proposed regulatory changes will be a serious challenge for the industry. How do you expect those impacts will be felt? Hann: The concern we have is that these changes concentrate almost exclusively on the environmental impacts but have ignored the social and economic implications. After 2015, any plant that is 45 years old, or that concludes a power contract, has to either meet the standards or shut down. So over the next 10 years to 20 years, unless there’s new carbon capture and storage technology developed, all coal-fired energy generation will have to shut down. That means a significant loss of jobs, stranding significant coal resources in the ground, and a loss of considerable royalties and tax revenues to governments. The other thing we are concerned about is that these regulations are in essence forcing power plants to switch to natural gas. Environment Canada is making the assumption that natural gas prices will stay where they are, or even be lower. Our concern with this is that natural gas prices are historically very volatile, and over the longer period, coal prices have been three to four times lower than natural gas. Nobody knows where the price of natural gas is going to go. By simply closing down coal plants, you are risking much higher prices in electricity for residents and industry. Coal has provided industry with low energy prices. It represents a competitive advantage to the Canadian industry, and we are introducing significant uncertainty. CIM: You are skeptical about carbon capture and storage (CCS) technology, knowing that the industry has until 2015 to refine it. Why? Hann: There is technology available, for example in the oil sands, but there is no known CCS technology that has been applied to power plants. The suggestion is that it could be another 10 years to 15 years away. We have always been supportive of the objective of reducing emissions from power plants, but what we are asking the government to do is to work with us. Government should apply the most stringent standards based on the technology available to the industry; but to go so far beyond with these standards, and to give the industry absolutely no opportunity to meet them, we think is unfair.

CIM: Besides the regulatory changes faced by the coal-fired power industry, what are the main challenges to industry growth in the next three years? Hann: Immediate challenges are access to skilled labour and gaining support from First Nations for projects. I would add land access, particularly in Alberta. There are significant coal reserves that are in land that is prohibited from development. We have engaged with the Alberta government to review its provincial coal policy. We’d like to see more land base made available for coal exploration and development activities. Another challenge is regulatory certainty. Coal mining projects are regulated both federally and provincially. It’s very important that the companies know what the rules of the game are. That is an issue right now, where there were considerable changes coming out of the 2012 federal budget implementation bill. We have to make sure that federal and provincial governments are aligned, and that the regulatory regimes support project development while at the same time continue to protect the environment. CIM: What do you see coal’s role being in Canada’s energy output being in 10, 20 or 50 years? Hann: It all depends on the final proposal from Environment Canada. There have been suggestions that in the three provinces that rely most heavily on coal-fired power generation – Alberta, Nova Scotia and Saskatchewan – they will be able to modify their individual approaches to emissions reductions by entering into equivalency agreements with the federal government. What we are looking for here is that the coal industry participate meaningfully in the discussions in the development of these equivalency agreements in all three provinces. CIM MOVING ON UP Pakalnis leads MIRARCO Vic Pakalnis joined Mining Innovation, Rehabilitation and Applied Research Corp. (MIRARCO) as president and CEO. He has previously worked at the Ontario Ministry of Labour, as well as at Inco Ltd., Iron Ore Company of Canada and Falconbridge Nickel Mines Ltd. “Vic’s experience and relationships in both the industrial and the public sectors will help shape strong and vibrant strategic objectives for the long-term success of MIRARCO,” said Marc Boudreau, MIRARCO board chairman and BESTECH president and CEO. Founded 14 years ago, MIRARCO is a not-for-profit group based at Laurentian University in Sudbury. “I am delighted to return to Sudbury, it’s a beautiful thriving community,” said Pakalnis. “I will work to ensure MIRARCO, which is already well known in Canada, is recognized worldwide as mining’s most trusted partner in innovation and applied research.”

September/October 2012 | 53

Courtesy of OSDG/Shell Canada

Operations

Barrelling ahead

The long view

While there is adequate pipeline capacity in the region, each new operation must secure its connection to the existing network. It is one reason the estimated cost of building Imperial Oil’s Kearl mine rose in 2012 from $5 per barrel to $6.20 for the 4.6-billion-barrel resource. “Our previously communicated $5 a barrel does not include the investments – which are significant – that we made in our tailings management plan, as well as an investment in some regional downstream pipelines,” says Pius Rolheiser, Imperial spokesperson. Regional pipelines will still need to connect to larger lines, but Rolheiser is optimistic that large-scale infrastructure will evolve over Kearl’s anticipated 40- to 50-year life. “Our plans are not tied to any one piece of infrastructure,” he says. “We believe that by the time Kearl volumes come on stream, there’ll be sufficient pipeline capacity to get that product to the market.” By the end of the year, Kearl’s initial development will be producing 110,000 bpd. An estimated $8.9 billion expansion phase will increase production to about 290,000 over the next several years. The debottlenecking of both phases will ultimately increase overall capacity to 345,000 bpd by about 2020. Suncor has also been pouring cash into new developments: the North Steepbank Extension mine will ramp up to 56 | CIM Magazine | Vol. 7, No. 6

a production level of 125,000 bpd this year. The company also continued site preparation on the much larger Fort Hills project and associated Voyageur upgrader, joint ventures with Teck Resources and Total E&P respectively, but those projects will not receive a final development decision until 2013. Total’s majority-owned Joslyn North project saw some initial construction following regulatory approval in December 2011. If the $7-billion to $9-billion project goes forward, it will feed the Voyageur upgrader with enough bitumen to produce 100,000 bpd for 20 years, beginning in 2018. A pair of heavy haulers dump their loads into a primary crusher.

Courtesy of Shell Canada

he bitumen-rich mining district around Fort McMurray is less than a tenth of one per cent of Alberta’s total area, but its industrial footprint is enormous and growing. With seven mines in operation, an eighth will start up by year’s end, and another five are in development. Infrastructure development, however, has needed time to catch up. Concerns about a secure and steady supply of labour remain, and scrutiny of environmental permitting and monitoring practices is only growing more intense. These constraints may shorten the developers’ stride but, nevertheless, production continues to accelerate. For 2012, the Canadian Association of Petroleum Producers (CAPP) predicts that crude oil production from surface mines will average 862,000 barrels per day (bpd), up 11 per cent from 2011.

Hunting the skilled trades

Construction costs continue to rise, despite materials being cheaper than they were during the boom of 2005 to 2008. It is people that remain in short supply. Industry producers have banded together to work with government on training programs, partnered with Canada’s Building and Construction Trades Department to locate and train construction workers, and have gone into schools to attract young people. Of course, there are also resources beyond the Canadian border. Suncor has reportedly looked into using Chinese engineering, procurement and construction firms. “Even today, there are many skilled trades workers that come to work in our industry on a temporary basis,” says Greg Stringham, vice-president of oil sands at CAPP. “The recent enhancements in the temporary foreign worker program will help, particularly for labour needed in large maintenance events or during major peak construction periods.” But the cost of attracting, training and housing employees does take its toll. In May, the president and CEO of contractor North American Energy Partners Inc., Rod Ruston, observed that some oil sands operators are deferring, re-engineering, or developing their projects in-house to save costs. Clients stung by the inflationary rush for contractors in 2008, says Ruston, are now prioritizing budget over timeline. That is the approach taken by Canadian Natural Resources Limited, which budgeted $1.88 billion this year for capital projects in the Horizon mine’s staged but untimed expansion toward 250,000 bpd.

Production heads underground

In-situ extraction (bpd)

2012 Bitumen mining (bpd)

While surface mining operations continue to grow, in-situ projects are adding capacity even faster and will soon produce the majority of bitumen. CURRENT

UNDER CONSTRUCTION

REGULATORY APPROVAL

UNDER REVIEW

1,303,000

222,000

1,010,000

595,000

925,400

544,905

1,245,949

1,615,270

Information from OSDG | Diagram by CIM

Shell also signalled caution in its approach to the Athabasca Oil Sands project, the joint venture it operates. “While we have approval for Muskeg River expansion, Shell’s current focus and priority in the near term is debottlenecking our existing assets,” says a company spokesperson.

Environmental challenges

Shell also proposed an expansion of its Jackpine mine and the new Pierre River mine. But these are still in the regulatory process, and may well experience delays. In July, the environmental watchdog group Oil Sands Environmental Coalition (OSEC) seized on the Jackpine expansion proposal as an opportunity to hold provincial regulators to account for recommendations past project review panels had made. Earlier projects, including Kearl and Joslyn North, had been approved contingent upon a long series of recommendations for issues, such as the management of wildlife, water and tailings. While the province has addressed some, the response to the recommendations has not been comprehensive. The coalition argued that new projects should not be approved until the cumulative effects of rapid oil sands development have been determined and addressed. A Shell statement responds that the panel was “established to assess Shell’s Jackpine mine expansion and not the implementation of the previous panels’ recommendations respecting other proj-

ects.” Simon Dyer, author of OSEC’s affidavit and policy director at the Pembina Institute, agrees that the project review panel is not the preferred venue to raise these issues, but says that the absence of regional planning has left little choice for environmental advocates. “The failure of the government to put regional rules in place is actually creating the risk of slowdowns for project proponents.” Ultimately, OSEC’s motion to review the status of past recommendations was denied by the Canadian Environmental Assessment Agency. Dyer, says, however that the group will continue to intervene in project approvals until cumulative effects rules are introduced and enforced. OSEC has already secured funds to participate in the review process for the Frontier project acquired by Teck in April.

Research and development

In the absence of conclusive research on the cumulative effects of development, oil sands companies focus on the environmental footprints of individual operations. Even Syncrude, the only bitumen miner without expansion plans, will spend $1 billion on emissions and tailings management projects this year. While finishing its emissions reduction project, a lengthy sulphur reduction retrofit of two cokers at Mildred Lake, Syncrude is also building a composite tailings plant at Aurora North and working on a commercial demonstration project for the centrifuge technology. The company promised regulators it would develop to meet the tailings performance criteria of Directive 74. Whether it is Syncrude addressing environmental regulations, Suncor rustling up a workforce, or Imperial finding pipeline solutions, the answers to existing challenges – from the operators’ point of view – is to build. Build cautiously, yes, with emissions in mind and costs under control, but the impetus in the oil sands continues to move toward building more, not less. BY EAVAN MOORE

September/October 2012 | 57

Infrastructure

Improved workflow

58 | CIM Magazine | Vol. 7, No. 6

Courtesy of Alberta Transportation

16 kilometres of 240 tep off a plane and into the Fort Mchave been twinned south Murray Airport and of Fort McMurray – for you will enter a scene that reasons ranging from tells the larger story of the budgetary to logistical to area’s development chalenvironmental – and lenges. Built to accomapproximately 50 more modate 250,000 trips people have died. A from its main terminal recent report, drawing on each year, the airport had comments from Alberta already moved more than drivers, residents, and 810,000 passengers in industries, recommends the first six months of that the province pick up 2012. the pace. Leading up to the Some members of the recession, oil sands deOSDG have offered to velopment in northeastern ease fiscal pressures on Alberta set a torrid pace the province by paying that the development of for smaller road projects local infrastructure could north of Fort McMurray, not match. This has left on the understanding the province and northern that compensation would municipalities to play A new multilane bridge over the Athabasca River and a pair of interchanges will help improve eventually come in the the flow of traffic in and through Fort McMurray. catch-up on transport, form of a tax or royalty housing, health and safety. rebate. But Bancarz points “I don’t think there was an appreciation of the consequences out that on a remote road surrounded by muskeg and heavy of how fast the oil sands industry was growing,” says Ken forest, limited by the seasons, work will take time regardless. Chapman, executive director of the Oil Sands Developers Group (OSDG). The organization represents a growing Current affairs cooperation among industry operators, local governments The cogeneration of electricity and heat at many extracand communities on addressing regional issues. tion facilities leaves a lot of operations with excess power. “In Alberta, the oil sands are a net provider to the electricity Roadwork ahead grid,” says Syncrude Canada spokesperson Cheryl Robb. “It’s As the oil sands expanded, workers and their families about 18 per cent of the time that we are supplying Alberta’s created a population explosion, while northbound trucks electricity grid with power.” hauling oversized loads often clogged provincial highways But facilities still need new transmission lines, both to and local roads. In Fort McMurray, the province is spend- carry away the power they generate and to receive backup as ing $75 million to rebuild two bridges across the needed. The Alberta Electric System Operator, responsible Athabasca River. While they are closed, a brand-new five- for long-term planning, proposed four separate transmission lane, $127-million bridge accepts the 45,000 to 50,000 projects that will run two 500 kV power lines to Edmonton vehicles that flow through daily. These projects, plus two and surround Fort McMurray with an additional 200 to 400 interchanges under construction, will create a freeway cor- kilometres of 240 kV lines. The Alberta Utilities Commission ridor through Fort McMurray when completed in 2014, has recognized the need for most of these projects, but they says Trent Bancarz, spokesperson for Alberta Transporta- continue to move through bidding, construction approvals tion. “It’ll separate highway traffic from local traffic, and and the process of negotiating which company’s lease the that’ll increase traffic flow. It will also increase safety quite lines will cut across. a bit, because you’re not going to be mixing variable speed traffic together.” New neighbourhoods Other projects are proceeding more slowly. Provincial The heaviest burdens continue to fall on the regional Highway 63 had achieved notoriety for its travel times and municipality of Wood Buffalo, home to Fort McMurray. The its death toll when, in 2006, the province committed to municipality’s population increased 28 per cent between twinning this two-lane link between the oil sands and the 2006 and 2011 and is projected to increase another 50 per junction with Highway 55 near Grassland. Since then, only cent by 2045.

“The municipality is by far the most advanced of any of the orders of government on dealing with the infrastructure needs that they have,” says Chapman. While the 2008–2010 recession distracted provincial attention, he says, it actually helped the municipality. “While it didn’t stop things, it slowed things down enough that everyone could catch their breath and start doing some more reflective planning.” The development plan for downtown Fort McMurray includes a new city hall, high-density housing, a new performing arts centre and an expanded recreation centre. Schools and hospitals are on the list for future construction, some of which will begin this fall. Earlier this year, 330 hectares of land were released for housing development and more is expected to be put on the market in the fall. An estimated 30,000 to 50,000 oil sands workers live in work camps, with more to come as further project construction begins. Representatives of Wood Buffalo would like to integrate more of these individuals into urban life, but the extremely tight housing market – in which a single family home runs $750,000 – shuts them out. Meanwhile, the province hesitates to rush housing growth, especially because the amenities that make housing developments into neighbourhoods are not built at the same hurried pace. Work camps do have their advantages. They take drivers off the roads, accommodate short-term construction workers,

and shorten the commute to more far-flung sites. While employees at Shell, Syncrude and Suncor tend to live in the region and commute by car or company-provided bus, expansion is rendering that increasingly impractical. Pius Rolheiser, spokesperson for Imperial Oil, said the decision to operate the Kearl project as a fly-in, fly-out operation was driven primarily by its distance from Fort McMurray. “Under current conditions, it would be about a 90-minute drive,” he says. “It makes for a pretty long day.” That means private airstrips are going up as well. As more aircraft fill the skies over the region, companies are looking to coordinate the use of these runways. Some, including Imperial, already share airstrips with other operators. A more formal effort between local governments and industry is underway. “They want to cluster airstrips so there are fewer of them, they’re used more extensively, and the commute to a site is a maximum of 45 minutes,” explains Chapman. New airstrips will not do much to ease the pressure at Fort McMurray Airport, however. Construction is underway on a new main terminal, five times larger than the airport’s current space. Airport CEO Scott Clements expects to be able to run international flights by the end of this year. The top three destinations in demand: Denver, Las Vegas and Mexico. A little business and a lot of money to burn. BY EAVAN MOORE

CALL FOR PRESENTATIONS & MEETING ANNOUNCEMENT

Important Deadline Dates: Submission of Abstracts: November 30, 2012

Notice of Acceptance: January 4, 2013

Society for Mining, Metallurgy & Exploration MINNESOTA SECTION

The Conference Planning Committee is accepting abstracts from potential presenters for the 86th Annual Meeting of the Minnesota Section of the Society for Mining, Metallurgy, and Exploration. Topics of interest for the program include, but are not limited to, current and potential advances in exploration, mining, processing, maintenance, mining regulations and the outlook for the mining industry. We are pleased to feature the 4th Iron Ore Symposium, following on the success of the 3rd Symposium held in Montreal in May 2011.

TECHNICAL CONFERENCE

To qualify for consideration, individuals interested in presenting at the meeting must provide the following information to the SME Minnesota Section Committee for each abstract submitted:

April 16-17, 2013 86th Annual Meeting of SME-MN Section featuring…the 4th

Iron Ore Symposium 74th Annual University of Minnesota Mining Symposium Duluth Entertainment Convention Center Duluth, MN USA

1. 2. 3.

Title of presentation Presenter’s name, mailing address, preferred phone number, and email address Brief description (150 – 250 words) of presentation

Please submit each abstract as a Word document attached to an email message to: hsmithst@d.umn.edu. Insert SME-MN 2013 Abstract into the subject line of your message. Selection will be based on the quality of the abstract and the relevance of the topic. During the SME – MN Section Conference, presenters will be allotted 20 minutes for their presentation and five minutes for questions.

Submission deadline: November 30, 2012 Contact: Helen Smith Stone, Conference Coordinator Phone: 218/625-1032 Email: hsmithst@d.umn.edu

UNIVERSITY OF MINNESOTA DULUTH

CONTINUING EDUCATION

The University of Minnesota is an equal opportunity educator and employer.

www.d.umn.edu/goto/sme September/October 2012 | 59

Human Resources Creative thinking

60 | CIM Magazine | Vol. 7, No. 6

Courtesy of Clark Builders

f all of the oil sands projwho are trained specifically ects that are currently on for oils sands-related work. the books go ahead, the Finning is also building its region will “need a heck of a capacity with a fly-in/fly-out lot of people […] a lot of labour force. Although attripeople,” says Dianne Clark, tion is relatively high – almost chief administrative officer of double that of a local labour both the Fort McMurray force – the company is attractChamber of Commerce and ing skilled tradespeople from the Fort McMurray Conacross the country with construction Association. tinuous shifts (seven on/seven But where are the people off, or 14 on/14 off). In addigoing to come from? And will tion to highly competitive they come soon enough for rates of pay, workers are goods and service companies enticed with healthy housing to avoid creating bottlenecks allowances and camp subsiin the supply chain for the dies that can cost the comoils sands? Sharing resources, Specialized tradespeople from the U.K. have helped Clark Builders bolster the pany up to $150 per creating strategic partner- technical skills of their locally hired workforce. employee per day. ships and thinking outside Currently, Finning does the box seem to be common themes in everyone’s plans for sta- not cover the costs of workers’ flights, however Suncor and ble growth. many other oils sands operators do. As a result, Finning and Finning – currently the largest non-oil sands employer in other goods and service providers are being forced to asses the the region, employing roughly 1,000 people – is slated to open return on investment of travel subsidy strategies to attract and a second facility in the Fort McKay Industrial Park this fall. retain high-demand tradespeople. This $112 million investment will allow Finning to grow its operations and add another 500 employees by 2015. Open to new ideas “That doesn’t come without challenges,” says Larry During the last oil sands boom Clark Builders, whose head Gouthro, Finning’s general manager of sales, oil sands. “We’re office is in Edmonton, tried a number of strategies to build its competing for labour with our customers and our competitors. workforce. It invested $25,000 in a program designed to train Everybody is a competitor for the people.” people in nearby correctional facilities, who were then hired Looking to grow a loyal and local labour force, Finning has by the company as carpenters when they were on work recently launched the FinnTech Apprenticeship program, in release. Gerald Clark, senior human resources manager for partnership with Keyano College and Caterpillar. The pro- field employees, admits that in terms of retention that was not gram’s goal is to graduate 48 heavy duty mechanics annually, one of their most successful strategies; however, it serves as a

good illustration of how people in the company are encour- floor,” says White. The key, he says, is connecting with the peoaged to think broadly. Having been named one of the 50 Best ple who have the contracts that will match that capacity. Employers in Canada three years in a row, it certainly has a lot In Fort McMurray, Dianne Clark, wearing both her conof successful HR strategies to build upon. struction and commerce hats, offers local goods and service One of Clark Builders’ plans for its Fort McMurray opera- providers this advice: “To make a good go of it, you have to tions is to attract specialized tradespeople from overseas to have a really good business plan.” Even though she sees some work with and train their local workforce. Earlier this year, business people keeping their heads down, just trying to keep Clark went on a recruiting trip to the U.K. “We brought [back] up, she says, “One of the things we do very well here is we about 12 individuals that are helping the metals side of our share information instead of working in isolation and that creBY KIM LEAR business,” he says. “Because there aren’t training programs for ates success.” CIM that particular trade in Canada, it has been hard to grow the business with skilled people and I think we’ll go back. We are also bringing people out of the United States and Ireland.” Beverly Nalder, corporate human resources manager at Clark Builders, adds, “One of our big goals is to bring the knowledge here, and train our current employees to bring them up to the same level as the [tradespeople] we’re bring from the U.K.” They have been successful with this strategy in the past. Five years ago, Clark Builders took on a project in the Grand Prairie area that was bigger than the local labour pool could bear. “When we first went in, we went in with people from other parts of Alberta and other parts of Canada,” says Clark. Now, five years later, they operate with an entirely local team. Endress+Hauser provides Clark Builders also looks broadly for efficient support for mines suppliers. From steel fabricators in Manand minerals/metals itoba to structural steel builders in PEI, processing, with best Nalder says casting the net wide to find practices in measurement Promag 55S partners is a good business strategy. “A (electromagnetic flow) lot of places in Alberta are not able to and automation solutions. Density measurement with Gammapilot keep up with the demand so it’s understandable that you have to look and • Optimize process performance, include suppliers from the other safety and reliability through provinces.” quality E+H products and A couple of time zones away, Peter innovative solutions Memosens (pH) for White, president of the London EcoFMR 250 (level) • Reduce costs with E+H expert analytical measurement nomic Development Corporation, is services and integrated life working to ensure businesses in his area W@M is lifecycle management. cycle management get noticed. His group recently hosted Try one of its functions for FREE: www.ca.endress.com www.ca.endress.com/ delegates from the Insitu Oil Sands deviceviewer Alliance touring southwestern Ontario with the aim of expanding the supply network for its members. White says businesses in the region have provided metal fabrication and electrical supplies for the oil sands in the past and they have Endress+Hauser Tel: 905-681-9292 Canada Ltd 1-800-668-3199 plenty of what the oil sands needs: avail1075 Sutton Drive Fax: 905-681-9444 able workers and workspace. “We’ve got info@ca.endress.com Burlington, Ontario L7L 5Z8 shops that are using only 50 per cent to 60 per cent of the machinery on the shop

Mine and process raw materials more efficiently

September/October 2012 | 61

L’Express Athabasca Opérations

On avance à toute pompe

e district minier riche en bitume situé en périphérie de Fort McMurray représente moins d’un dixième de un pour cent de la superficie totale de l’Alberta, mais son empreinte industrielle est gigantesque et ne cesse d’augmenter. Ce district compte sept mines en exploitation, une huitième qui le sera d’ici la fin de l’année, et cinq autres en cours de préparation. Cependant, les inquiétudes au sujet de la disponibilité régulière et stable de main-d’œuvre demeurent, et l’examen minutieux des pratiques de surveillance et d’attribution de permis environnementaux ne fait que s’intensifier. Ces contraintes peuvent freiner l’élan des promoteurs, et pourtant, la production continue d’accélérer.

À long terme

Suncor a également investi beaucoup d’argent dans le développement de nouveaux projets : la mine North Steepbank Extension atteindra une capacité de production de 125 000 b/j cette année. Par ailleurs, la société a poursuivi les travaux préparatoires du site du projet Fort Hills – de beaucoup plus grande envergure - et du projet connexe Voyageur Upgrader (usine de valorisation), menés en coentreprise avec Teck Resources et Total E&P respectivement, mais la décision finale concernant la mise en valeur de ces projets ne sera pas prise avant 2013. Sur le site du projet Joslyn Nord détenu majoritairement par Total, les premiers travaux de construction ont commencé 62 | CIM Magazine | Vol. 7, No. 6

après l’obtention des approbations réglementaires en décembre 2011. Si ce projet de 7 G$ à 9 G$ va de l’avant, il alimentera l’usine de valorisation Voyageur avec des quantités de bitume suffisantes pour produire 100 000 b/j pendant 20 ans, et ce à partir de 2018.

La recherche de travailleurs spécialisés

Les coûts de construction continuent d’augmenter, bien que les matériaux soient moins chers qu’ils ne l’étaient pendant le boom de 2005-2008. C’est la main-d’œuvre qui fait toujours défaut. Les producteurs du secteur se sont unis pour travailler avec le gouvernement à la mise en place de programmes de formation, pour collaborer avec les syndicats des métiers de la construction du Canada afin de trouver et de former des travailleurs de la construction, et ils sont allés dans les écoles pour attirer des jeunes vers ces métiers. Bien sûr, il y a aussi des ressources au-delà des frontières canadiennes. Suncor aurait envisagé de faire appel à des sociétés chinoises d’ingénierie, d’approvisionnement et de construction. « Même aujourd’hui, nous avons de nombreux travailleurs spécialisés qui viennent travailler dans notre secteur à titre temporaire », déclare Greg Stringham, vice-président des sables bitumineux à l’ACPP. « Les améliorations apportées récemment au Programme des travailleurs étrangers temporaires nous aideront, en particulier en ce qui a trait à la

Courtoisie de OSDG

Les opérations in situ et d’exploitation minière en cours de construction ajouteront 766 000 barils de bitume au taux de production actuel de 2,2 millions de barils par jour.

main-d’œuvre requise pour les grands travaux d’entretien ou pendant les principales périodes de construction. » Poussés par l’inflation des coûts ayant suivi la forte demande d’entrepreneurs il y a cinq ans, certains exploitants mettent désormais davantage l’accent sur le budget plutôt que sur un échéancier. C’est la méthode utilisée par Canadian Natural Resources Limited, qui a budgété cette année un montant de 1,88 G$ pour des projets d’investissement dans l’expansion progressive, mais sans délai prescrit, de la mine Horizon en vue d’atteindre une production de 250 000 b/j. Shell s’est également montrée prudente par rapport à la coentreprise qu’elle exploite : le projet d’exploitation des sables bitumineux de l’Athabasca. « Bien que nous ayons obtenu le feu vert concernant l’expansion de la mine Muskeg River, l’objectif prioritaire de Shell à court terme porte sur le déblocage de ses actifs actuels », souligne un porte-parole de la société.

Difficultés liées à l’environnement

Shell a également proposé l’expansion de sa mine Jackpine et le nouveau projet minier de la rivière Pierre. Mais ces projets sont encore au stade du processus réglementaire et pourraient bien connaître des délais. En juillet, le groupe de vigilance environnementale, Oilsands Environmental Coalition (OSEC), a saisi la proposition d’expansion de la mine Jackpine comme une occasion de tenir les organismes de réglementation provinciaux responsables des recommandations qui avaient été faites par de précédents groupes d’examen du projet. Des projets précédents, dont les projets Kearl et Joslyn Nord, avaient été approuvés sous réserve d’une longue série de recommandations portant sur des enjeux tels que la gestion de la faune, de l’eau et des résidus. Bien que la province ait donné suite à certaines d’entre elles, la réponse aux recommandations n’a pas été complète. La coalition soutient que de nouveaux projets ne devraient pas être approuvés tant que les effets cumulatifs de la mise en valeur rapide des sables bitumineux n’ont pas été déterminés et pris en considération.

En réponse, une déclaration de Shell souligne que le groupe d’examen avait été « établi pour évaluer l’expansion de la mine Jackpine de Shell et non pas l’application de recommandations précédentes pour d’autres projets. » Simon Dyer, auteur de l’affidavit de l’OSEC et directeur des politiques à l’Institut Pembina, convient que le groupe d’examen de projets n’est pas le meilleur endroit pour soulever ces questions, mais déclare que l'absence d'une planification régionale a laissé peu de choix aux défenseurs de l'environnement. « Le fait que le gouvernement n’a pas réussi à instaurer des règles régionales crée vraiment un risque de ralentissement pour les promoteurs de projets. »

Recherche et développement

En l’absence d’une recherche concluante sur les effets cumulés de la mise en valeur, les sociétés du secteur des sables bitumineux se concentrent sur l’empreinte environnementale des opérations individuelles. Même Syncrude, la seule société d’exploitation des sables bitumineux à ne pas avoir de plan d’expansion, dépensera 1 G$ cette année pour des projets portant sur les émissions et les résidus. Alors qu’elle achève son Projet de réduction des émissions, une longue amélioration du système de réduction des émissions de soufre de deux unités de cokéfaction à Mildred Lake, Syncrude construit aussi une usine de traitement de résidus composites à Aurora North. Elle prépare également un projet de démonstration commerciale pour les régulateurs qu’elle a promis de mettre au point pour la technologie de centrifugation afin de respecter les critères de rendement du traitement des résidus de la Directive 74. Qu’il s’agisse de Syncrude qui doit répondre aux règlements environnementaux, de Suncor qui se débrouille pour trouver de la main-d’œuvre, ou de la Pétrolière Impériale qui trouve des solutions d’oléoducs, la réponse aux difficultés existantes, du point de vue des exploitants, est de bâtir. Bâtir avec prudence, certes, en gardant en tête la question des émissions et en contrôlant les coûts; mais l’élan pris dans le secteur des sables bitumineux se poursuit et il s’agira de bâtir plus, pas moins.

Infrastructure

PAR EAVAN MOORE Traduit par CNW Group

Le flux de travaux s’améliore

ans la période qui a précédé la récession, l’exploitation des sables bitumineux dans le Nord-est de l’Alberta a connu une telle expansion que le développement des infrastructures locales n’a pu suivre le rythme. La province et les municipalités du Nord ont donc été plongées dans une situation les obligeant à rattraper leur retard en matière de transports, de logements, de santé et de sécurité. « On ne se doutait pas des conséquences de la rapidité à laquelle s’est développée l’industrie des sables bitumineux », affirme Ken Chapman, directeur général chez Oil Sands Developers Group (OSDG). Cet organisme représente une coopération croissante entre les exploitants de

l’industrie, les communautés et les gouvernements locaux sur les moyens d’affronter les enjeux régionaux.

Les routes et les ponts

Le développement des sables bitumineux s’est accompagné d’une explosion démographique en raison du nombre de travailleurs et leurs familles venant s’installer dans la région. De plus, les camions transportant des charges surdimensionnées qui circulent en direction du Nord empêchaient la circulation fluide sur les autoroutes de la province et sur les routes de la région. À Fort McMurray, la province investit 75 millions de dollars dans la reconstruction de deux ponts qui traversent la September/October 2012 | 63

64 | CIM Magazine | Vol. 7, No. 6

Courtoisie d’Alberta Transportation

rivière Athabasca. La circulation y est encore interdite, aussi les quelque 45 000 à 50 000 véhicules circulant quotidiennement empruntent un tout nouveau pont à 5 voies dont le coût s’élève à 127 millions de dollars. Ces projets, ainsi que deux échangeurs en cours de construction, créeront un couloir de circulation qui traversera Fort McMurray une fois achevés en 2014, défend Trent Bancarz, porte-parole d’Alberta Transportation. « Le trafic routier sur autoroute sera séparé de la circulation locale, ce qui facilitera les déplacements et les sécurisera puisqu’on ne mêlera plus la circulation à grande et à faible vitesse sur une même artère. » Deux nouveaux changeurs D’autres projets se développent plus lenteet un pont à plusieurs ment. L’autoroute 63 de la province d’Alberta a voies ont été conçus acquis une triste notoriété en raison de ses nompour améliorer le débit de la circulation à breux embouteillages et de ses accidents morFort McMurray. tels. Ainsi, en 2006, la province s’est engagée à jumeler ce tronçon de route à deux voies qui relie les sables bitumineux à la jonction avec l’autoroute 55 à falo s’accordent à dire que cela ne suffit pas. On estime qu’enproximité de Grassland. Depuis, seulement 16 des 240 kilo- tre 30 000 et 50 000 travailleurs de l’industrie des sables bitumètres ont été jumelés. mineux logent dans des campements de chantier, et ce nombre ne fera qu’augmenter dès le commencement de la construction de nouveaux projets. Les représentants de Wood Buffalo L’électricité La cogénération d’électricité associée à la chaleur générée souhaitent voir davantage de personnes s’intégrer à la vie par plusieurs installations d’extraction entraîne un excès urbaine, mais le marché immobilier l’en empêche : le prix d’énergie dans grand nombre des opérations. Mais les installa- d’une maison unifamiliale est de 750 000 dollars. Entretemps, tions nécessitent tout de même de nouvelles lignes de trans- la province hésite à précipiter la croissance du marché immomission pour évacuer l’énergie qu’elles génèrent d’une part, et bilier, notamment parce que les aménagements requis pour recevoir de l’énergie d’appoint en cas de besoin d’autre part. transformer un simple développement résidentiel en un L’Alberta Electric System Operator, responsable de la planifica- quartier ne peuvent être construits au même rythme effréné. Les campements ont toutefois leurs avantages : ils réduition à long terme, a proposé quatre projets de transmission sent la circulation, accommodent les travailleurs des chantiers distincts qui impliqueraient l’installation de deux lignes de sur le court terme et diminuent les temps de déplacement vers 500kV vers Edmonton et entoureraient Fort McMurray de 200 les sites plus éloignés. Les employés de Shell, Syncrude et à 400 kilomètres de lignes de 240kV supplémentaires. L’AlSuncor ont tendance à vivre dans la région et à se rendre sur berta Utilities Commission a approuvé l’importance de la leur lieu de travail en voiture ou en autocar fourni par leur majorité de ces projets, mais elle poursuit les négociations par entreprise, mais l’expansion vient compliquer cette habitude. des offres d’achat, des approbations concernant la construcPius Rolheiser, porte-parole de l’Impériale, explique que la tion, et des décisions concernant quelle entreprise verra sa décision d’exploiter le projet Kearl à l’aide d’un service de concession traversée par des lignes électriques. navette aérienne a été motivée par sa distance de Fort McMurray. « Le trajet en voiture prendrait environ 90 minutes La logistique Le plus lourd des fardeaux touche toujours la municipalité compte tenu des conditions actuelles », dit-il. « La journée régionale de Wood Buffalo, où se trouve Fort McMurray. La serait vraiment très longue. » Ceci implique donc la construction de nombreuses pistes population de la municipalité a augmenté de 28 pour cent d’atterrissage privées. Au vu du nombre croissant d’avions entre 2006 et 2011, et on estime qu’elle augmentera de 50 qui survolent la région, les entreprises cherchent à coordonpour cent supplémentaire d’ici 2045. ner l’usage de ces pistes. Certaines d’entre elles, dont l’Impé« Cette municipalité est de loin la plus développée de tous riale, partagent déjà leurs pistes avec d’autres opérateurs. les ordres de gouvernement en terme de gestion des besoins en Malheureusement, ces nouvelles pistes d’atterrissage ne vienmatière d’infrastructure », affirme Chapman. Il ajoute que, dront pas alléger la pression que connaît l’aéroport de Fort bien que la récession de 2008 à 2010 ait quelque peu détourné McMurray. En effet, un nouveau terminal principal, cinq fois l’attention provinciale, la municipalité a fini par en bénéficier. plus grand que l’espace actuellement occupé par l’aéroport, « Les travaux n’ont pas cessé, mais ils se sont suffisamment est en cours de construction. Le PDG de l’aéroport, Scott Cleralentis pour permettre à tout le monde de reprendre son ments, prévoit d’accommoder des vols internationaux d’ici la souffle et de réfléchir davantage à la planification. » fin de l’année. Plus tôt cette année, 330 hectares de terre ont été concédés PAR EAVAN MOORE pour la construction de logements, mais l’OSDG et Wood BufTraduit par Monika Auerspergova

Les ressources humaines Pensée créative

La concurrence pour recruter de nouveaux travailleurs est féroce, et la rétention continue à donner du fil à retordre à de nombreux employeurs.

À Fort McMurray, l’entreprise fait venir des travailleurs spécialisés de l’étranger, qui viennent travailler avec les employés locaux et assurer leur formation. Plus tôt cette année, Gerald Clark, directeur général des Ressources humaines, a entrepris un voyage de recrutement au Royaume-Uni. « Nous avons ramené une douzaine de personnes, pour nous aider au niveau de nos métiers liés au métal. Comme il n’existe pas de programme de formation dans ce domaine au Canada, nous avons eu du mal jusqu’ici à développer cette branche avec des travailleurs qualifiés, et je pense que nous répéterons l’expérience. Nous recrutons en outre des travailleurs aux États-Unis et en Irlande. » Beverly Nalder, directrice des Ressources humaines de Clark Builders, ajoute : « L’un de nos principaux objectifs est d’importer les connaissances et de former nos employés afin qu’ils atteignent le niveau de leurs collègues que nous faisons venir du Royaume-Uni. » Cette stratégie a fait ses preuves par le passé. En effet, Clark Builders a amorcé il y a cinq ans un projet dans la région de Grande Prairie, pour lequel la main-d’œuvre locale n’était pas suffisamment nombreuse. « Au départ, raconte M. Clark, nous avons recruté des travailleurs venus d’ailleurs en Alberta et au Canada. Cinq ans plus tard, nous opérons désormais avec une équipe entièrement locale. » En vertu de son expérience dans les domaines de la construction et du commerce à Fort McMurray, Dianne Clark offre le conseil suivant aux fournisseurs de biens et services locaux : «Pour réussir, vous devez disposer d’un bon plan d’affaires. » Si elle voit certaines entreprises faire preuve d’individualisme pour rester à hauteur de la concurrence, elle affirme néanmoins : « L’une de nos grandes qualités, dans la région, est de partager l’information, plutôt que de travailler chacun dans notre coin, et de générer ainsi la réussite. » ICM PAR KIM LEAR Traduit par Erik Stout

September/October 2012 | 65

Courtoisie de Syncrude

i tous les projets de sables bitumineux prévus actuellement sont effectivement lancés, la région va avoir « besoin d’énormément de monde... vraiment beaucoup de gens », explique Dianne Clark, directrice générale de la Fort McMurray Chamber of Commerce et de la Fort McMurray Construction Association. Mais où trouver tant de travailleurs? Et arriveront-ils suffisamment rapidement pour éviter aux entreprises de biens et services d’avoir à créer des goulots d’étranglement dans la chaîne d’approvisionnement en sables bitumeux? Le partage de ressources, la création de partenariats stratégiques et la recherche de solutions originales semblent être les thèmes communs du plan pour une croissance stable de toutes les parties concernées. Principal employeur de la région hors du domaine des sables bitumeux, Finning compte environ un millier d’employés. L’entreprise va ouvrir un second établissement dans le parc industriel de Fort McKay cet automne. Cet investissement de 112 millions de dollars lui permettra d’étendre ses activités et de recruter 500 employés de plus d’ici 2015. « Cette situation va apporter son lot de défis, note Larry Gouthro, directeur général des ventes de sables bitumineux chez Finning. Nous rivalisons avec nos clients et nos concurrents pour attirer du personnel. En effet, tout le monde cherche de nouveaux employés. » Pour se constituer une main-d’œuvre loyale et locale, Finning a récemment lancé le programme d’apprentissage FinnTech, en partenariat avec le Keyano College et Caterpillar. L’objectif est de conférer chaque année des diplômes à 48 mécaniciens de machinerie lourde, formés spécifiquement pour les tâches liées aux sables bitumeux. Finning développe en outre sa capacité avec une maind’œuvre venue de l’extérieur. Bien que celle-ci présente un taux d’attrition relativement élevé – quasiment le double de celui de la main-d’œuvre locale – l’entreprise parvient à attirer des travailleurs qualifiés de tout le pays avec des horaires de travail continus (cycles de 7 ou de 14 jours de travail, suivis de 7 ou 14 jours de congé). En plus de salaires très concurrentiels, les travailleurs ont droit à de généreuses indemnités pour l’hébergement et à des subventions de camp, qui coûtent 150 $ par employé, par jour. À l’heure actuelle, Finning ne prend pas en charge les déplacements en avion de ses employés, contrairement à Suncor et à plusieurs autres exploitants de sables bitumeux. Du coup, Finning et d’autres fournisseurs de biens et services sont contraints d’évaluer la rentabilité de stratégies de d’indemnités de voyage, afin d’attirer et de conserver des travailleurs spécialisés très en demande. Clark Builders, qui a été nommé l’un des 50 meilleurs employeurs au Canada trois années de suite, peut puiser dans son vaste réservoir de stratégies de RH.

Coalspur Mines’ properties are in the Rocky Mountain foothills near Hinton, Alberta.

Courtesy of Coalspur Mines

project proﬁle | V I S TA C O A L

Eyes on the horizon Coalspur Mines Ltd. is looking west, with its flagship Vista Coal project, to the markets across the Pacific where there is a strong and growing demand for high-quality thermal coal. Vista, located just south of the town of Hinton, Alberta, in the foothills of the Rocky Mountains, is set to be the largest export-oriented thermal coal operation in North America. BY CORREY BALDWIN

oalspur’s focus on exporting its coal is noteworthy in itself, as only high-quality thermal coal can be exported from Canada economically. Coal from Vista will have similar quality to Sherritt’s Coal Valley operations nearby, which has a long history of selling into the Asia-Pacific market. Vista will be the first new export-based thermal coal mine built in Canada in nearly three decades. “With 566 million tonnes in recoverable reserves and 12 million tonnes of clean coal production a year, Vista is a worldclass project that will compete with the largest thermal coal mines in Australia,” says Gill Winckler, Coalspur president and CEO. “Once at full capacity, Vista will be one of the largest export thermal coal mines in the world.”

66 | CIM Magazine | Vol. 7, No. 6

Winckler knows the competitive landscape well. Before joining the team at Coalspur in July 2012, she spent 15 years at BHP Billiton. One of her roles at BHP was chief development officer of the energy coal division where she was responsible for the business development of greenfield thermal coal projects globally and the oversight of BHP’s increase in thermal coal activities in Australia and South Africa. “There was a particular project in Australia that I oversaw that was similar to Vista,” she says. “The major difference in the projects really is that Vista has a highly attractive logistics chain – what we call a ‘path to the sea.’ This is a challenging factor for many South African and Australian projects, where rail service is close to capacity and port facilities are congested.”

V I S TA C O A L

PROJECT SPECS

MEASURED AND INDICATED RESOURCES: 1,055.9 Mt INITIAL DEVELOPMENT CAPEX: $870 million CONSTRUCTION STARTUP: early 2013 PRODUCTION STARTUP: 2.3 Mt in 2015 FULL PRODUCTION: 12 Mt by 2018

| project proďŹ le

MINE LIFE: 28 years COAL THERMAL VALUE: 5,700 - 5,800 Kcal/kg

VISTA SOUTH COAL PROJECT MEASURED AND INDICATED RESOURCES: 470.5 Mt

VISTA EXTENSION MEASURED AND INDICATED RESOURCES: 173.7 Mt

The business case â&#x20AC;&#x153;The most common issue that North American companies face is the high cost of transporting their product to tidewater,â&#x20AC;? says Winckler. â&#x20AC;&#x153;Vista will have the ability to profitably export its coal, as it has secured favourable port contracts, has access to an underutilized rail line, has attractive production costs, and will produce thermal coal that will attract a higher price than most of the producers from the Powder River Basin.â&#x20AC;? These factors, Winckler explains, separate Coalspur from many of its peers, and will allow it to sell its thermal coal to the Asia-Pacific market. As an added incentive to export, the domestic market itself is not as enticing for Winckler: â&#x20AC;&#x153;Although much of Albertaâ&#x20AC;&#x2122;s electricity generation is coal fired, the sale price for domestic coal is currently not high enough to be an incentive for the development of Vista or for any other new thermal coal mine developments.â&#x20AC;? â&#x20AC;&#x153;Exporting the coal also exposes us to many more potential customers,â&#x20AC;? says Chris Borowski, manager of investor relations at Coalspur. â&#x20AC;&#x153;Our ability to sell to domestic and international markets is a significant advantage as it will allow us to adapt to changing market conditions. For example, if the demand for domestic coal increases significantly and the price we can earn exceeds what we can earn on the export market, we will have the option to capitalize on that opportunity.â&#x20AC;? The majority of Coalspurâ&#x20AC;&#x2122;s employees are located in offices in Calgary, Hinton and Vancouver. The head office for the company, listed on both the Australian Securities Exchange and the Toronto Stock Exchange, is in Perth.

use an underutilized line that currently serves Sherrittâ&#x20AC;&#x2122;s nearby Obed Mountain and Coal Valley mines. Coalspur and CN are also cooperating on the design and construction of a rail siding and loading infrastructure, with construction scheduled to begin in 2013.

Expert. Quality. Advice. Mining Engineering Geotechnical Engineering Underground and Open Pit Feasibility Studies NI 43-101 Reports Due Diligence

Laying the foundation Coal from Vista will travel by rail to deepwater ports on Canadaâ&#x20AC;&#x2122;s west coast, which provide the vital link to the AsiaPacific market. Coalspur has completed a memorandum of understanding (MoU) with CN Rail, and expects to finalize a definitive transportation agreement in late 2012 or early 2013. A deal with CN will be equally advantageous for both parties: Coalspur will be a significant customer for CN and

The busi www.amcconsultants.com

September/October 2012 | 67

project proﬁle | V I S TA C O A L

Map courtesy of Coalspur Mines | Graphic additions from CIM

THE VISTA PROPERTIES

CN Rail

Ridley Terminals has allocated 13.5Mt/y of capacity to Coalspur. CN Rail has an MoU with Coalspur to transport the initial production of 2.3 Mt/, increasing to 12 Mt/y by 2018

68 | CIM Magazine | Vol. 7, No. 6

Map courtesy of Coalspur Mines | Graphic additions from CIM

BC Ministry of Transportation and Infrastructure

The CN line, located less than three kilometres from Vista’s boundaries, can manage trains of up to 175 cars, each with the capacity to haul over 100 tonnes of coal. The MoU allows for the transport of 2.3 million tonnes (Mt) of Vista coal in 2015 increasing to 12Mt/year by 2018, which is over twice the combined output of Sherritt’s two Mountain operations and nearly double the amount of thermal coal currently exported from Canada each year. Coalspur has also secured port allocation with Ridley Island Coal Terminals at the port of Prince Rupert, British Columbia, for up to 13.5Mt/year for as many as 21 years. Ridley Terminals is the nearest deepwater port to Vista (around 1,200 kilometres by rail). The terminal is expanding its shipping capacity from 11.2Mt/year

| project proﬁle

Diagram courtesy of Coalspur Mines

V I S TA C O A L

A cross-section of the Vista deposit

to 25Mt/year by 2015 – in time for Vista’s planned production start-up. Coalspur completed a bankable feasibility study on Vista at the start of this year, and is now in the process of completing detailed design engineering and regulatory approvals. Construction is scheduled to begin in early- to mid-2013, following regulatory and final board approval, and initial production should start in early 2015. Over its 28-year mine life, Vista will process 20.4 Mt of ore a year, producing 12.0Mt/year of saleable coal. The coal will be washed in the processing plant’s large cyclones and dried prior to rail transportation. The mine will be open-cast, and mined by dragline and truck and shovel methods. “The geology at Vista is extremely favourable,” says David Leslie, vice-president of corporate development. The coal seams, which dip at an average of just seven degrees, are continuous, and subcrop near the surface. “All these factors will allow Vista to be a low-cost, low stripratio surface mining operation,” he adds. Vista covers nearly 10,000 hectares, part of the approximately 55,000 hectares of coal exploration leases owned by Coalspur. The property is about 10 kilometres southeast of Hinton and has a strike length of approximately 12 kilometres.

conduct additional exploration drilling on the area to further confirm the geological structure in the area and provide data for future technical studies.

Growth potential Coalspur is also exploring two additional development options: the Vista South Coal project and Vista Extension. Vista South is located six kilometres southwest of Vista and covers approximately 23,300 hectares. Vista Extension, acquired in April 2012, is located along the northeast boundary of Vista and covers around 14,400 hectares. Coalspur has drilled 100 exploration holes and completed an assessment of the historical exploratory drilling, which first began in the 1970s, at Vista South. Coalspur will continue to September/October 2012 | 69

project proﬁle | V I S TA C O A L In July, the company released a scoping study on Vista Extension that confirmed the potential for an underground longwall mine that would produce an average of 3.8 Mt per year of saleable coal over 28 years. “The work done to date on Vista South and Vista Extension has been very positive,” says Leslie. “The two properties contribute significant value to Coalspur as they both provide optionality to increase future production growth and the life of mine on Vista. As well, any development on Vista South and Vista Extension can leverage off any infrastructure constructed for Vista.” The management at Coalspur is optimistic about the future development of these sites. “Vista Extension is on the same favourable geological structure as Vista and is expected to contain the same export-quality bituminous thermal coal,” says Leslie. As for Vista South, ongoing exploration drilling has already led to impressive coal resource upgrades. In May, Coalspur announced an increase to Vista South’s Measured and Indicated resource, from 93 Mt to 471 Mt. The Inferred coal

GIVING BACK Students get the BESTECH feel BESTECH announced it is offering 13 co-op placements and three graduation bursaries (one of $1,000 and two of $500 each) to students from universities, colleges and high schools in Sudbury, Ontario, to support their training and educational needs, specifically in the development of industrial projects for the community. Co-op placements will be given to students from Laurentian University, University of Guelph, Michigan State University (the student is a resident of Sudbury), Cambrian College and Lockerby Composite School. The Sudburybased engineering company took their efforts one step further this year by calling on the 2D/3D animation department at Collège Boréal to develop an animated video that would showcase the innovative capabilities of RopeInspectorTM, a mine hoisting-related product developed by BESTECH. The 2D/3D animation team rose to the challenge, asking six students to create videos. Jessica Verrier won the $1,000 bursary and a co-op placement for the summer. Since starting the BESTECH co-op placement in April, Verrier has been working on animated videos to help increase sales and further develop the marketing promotional materials inventory. “We understand the importance of grooming our future leaders in the community, and as such, we want to offer graduates a hands-on work environment in order to develop technical, administrative and management skills,” said BESTECH CEO Marc Boudreau. “We also want to facilitate further educational and training opportunities for local students so that they can refine their skills and broaden their knowledge to be ready for the workplace.”

70 | CIM Magazine | Vol. 7, No. 6

resource was also upgraded from 75 Mt to 605 Mt. This increased Coalspur’s total Measured and Indicated resources by 29 per cent to 1,700 Mt, and Inferred resources by 35 per cent to 2,035 Mt. The mine will be an economic boon to the region. Coalspur expects to employ over 900 people when Vista hits full operation. “The Hinton region has a population of over 20,000 people and provides Coalspur with access to numerous skilled potential employees,” says Winckler. “Part of our strategy for recruiting will be to have a corporate culture and a value proposition that make it attractive for employees to join the company and relocate to the Hinton area, if necessary.” CIM

Fuelling China’s furnace The seaborne thermal coal trade has been growing at about seven per cent per year for the last decade, and the trend is anticipated to continue. The expectation is that demand from the Asia-Pacific market will outpace the supply from the major thermal coal producing regions. “Since China consumes such a substantial amount of thermal coal and has recently become a net importer they have changed the supply and demand dynamic of the thermal coal trade,” says Coalspur’s Chris Borowski. “China currently consumes about 3.5 billion tonnes of thermal coal per year and has begun to rely on imports to meet its increasing demand. Given the magnitude of those volumes, even an increase of one per cent, which would equate to an incremental demand of 35Mt/year, is equivalent to about three Vistas at full production.” Today, the seaborne export trade is around 865 Mt, much of that provided by Australia and Indonesia. In 2009, Canada exported six million of the 41 million tonnes of domesticated mined thermal coal. Annual seaborne trade is estimated grow to over 2 billion tonnes by 2030, with the U.S., Russia, Australia and Indonesia expected to make up most of the supply growth. CIM

Courtoisie de Coalspur Mines

projet en vedette | V I S TA C O A L

Les terres de Coalspur Mines sont situées dans les contreforts des montagnes Rocheuses, près de Hinton, en Alberta.

Les yeux rivés sur l’horizon Coalspur Mines Ltd. a le regard tourné vers l’Ouest. Son projet phare, Vista Coal, vise les marchés de l’autre côté du Pacifique, où la demande en charbon thermique de haute qualité se fait de plus en plus forte. Situé juste au Sud de la ville de Hinton, en Alberta, dans les contreforts des Rocheuses, Vista est en passe de devenir le plus grand exportateur de charbon thermique d’Amérique du Nord. PAR CORREY BALDWIN

intérêt porté par Coalspur à l’exportation de charbon est remarquable si l’on considère que seul le charbon thermique de haute qualité peut être exporté hors du territoire canadien de manière rentable. Le charbon de Vista sera de qualité identique à celui de la mine voisine de Coal Valley – appartenant à Sherritt – qui exporte depuis longtemps son charbon vers le marché de l’Asie-Pacifique. Vista sera la première nouvelle mine de charbon thermique orientée sur l’exportation construite au Canada depuis près de 30 ans. « Avec sa production de 566 millions de tonnes de réserves extractibles et de 12 millions de tonnes de charbon épuré chaque année, Vista est un projet de classe mondiale qui fera concurrence aux plus grandes mines de charbon thermique d’Australie, déclare Gill Winckler, présidente et chef de la direction. « À pleine capacité, Vista sera l’une des plus grandes mines d’exportation de charbon thermique au monde. » Mme Winckler, qui a travaillé pendant 15 ans pour BHP Billiton avant de se joindre à l’équipe de Coalspur en juillet 2012, connaît bien le paysage concurrentiel auquel elle aura affaire. À BHP, elle a notamment occupé les fonctions de chef du développement du département Energy Coal, où elle était responsable du développement commercial à l’échelle mondiale des projets de construction liés au charbon thermique, et de la supervision du développement des activités de BHP dans le domaine du charbon thermique en Australie et en Afrique du Sud. « L’un des projets que je dirigeais en Australie ressemblait particulièrement à Vista », explique-t-elle. « La différence majeure est que Vista dispose d’une chaîne logistique extrêmement

L’

72 | CIM Magazine | Vol. 7, No. 6

intéressante – ce que nous appelons une ‘voie vers l’océan.’ Il s’agit là d’un facteur problématique pour de nombreux projets en Afrique du Sud et en Australie, où le service ferroviaire est à quasi pleine capacité et les installations portuaires sont congestionnées. »

Analyse de rentabilité « Le principal problème des entreprises d’Amérique du Nord réside dans les coûts élevés de transport jusqu’à la côte », explique Mme Winckler. « L’exportation de charbon par Vista sera profitable car le projet s’est assuré des contrats portuaires avantageux, a accès à un réseau ferroviaire sous-utilisé et bénéficie de coûts de production attrayants. En outre, son charbon thermique se vendra à prix plus élevé que celui de la plupart des producteurs du bassin de la rivière Powder. » Ces facteurs, fait remarquer Mme Winckler, distinguent Coalspur de nombre de ses concurrents, et lui permettront de vendre son charbon thermique au marché de l’Asie-Pacifique. « En exportant du charbon, nous serons exposés à de nombreux clients potentiels », explique Chris Borowski, directeur des relations avec les investisseurs chez Coalspur. « Notre capacité à vendre aux marchés intérieurs et internationaux constitue un avantage considérable qui nous permettra de nous adapter aux conditions fluctuantes du marché. Par exemple, si la demande en charbon à l’intérieur du pays augmente considérablement au point que son prix de vente dépasse celui des marchés internationaux, nous pourrons saisir cette occasion. »

V I S TA C O A L

| projet en vedette

Poser les bases Le charbon produit par Vista sera transporté par voie ferrée vers les ports en eaux profondes de la côte Ouest du Canada, laquelle constitue le lien vital vers le marché de l’Asie-Pacifique. Coalspur a signé un protocole d’entente avec CN Rail et prévoit de négocier une entente de transport définitive d’ici fin 2012 ou début 2013. Cette association profitera aux deux parties puisque Coalspur sera un client important de CN et emploiera un système sous-utilisé qui dessert actuellement les mines voisines d’Obed Mountain et de Coal Valley – appartenant à Sherritt. Coalspur et CN coopèrent en outre à la conception et la construction d’un embranchement particulier et d’une infrastructure de chargement. Le lancement des travaux de construction est prévu pour 2013. La voie ferrée, située à moins de trois kilometres (km) de Vista, permet la circulation de trains atteignant 175 wagons pouvant contenir chacun plus de 100 tonnes de charbon. Le protocole d’entente assure le transit de 2,3 millions de tonnes (Mt) de charbon produit par Vista par année au cours des premières années de production, et jusqu’à 12 Mt d’ici 2018, soit deux fois plus que la production cumulée des deux mines de Sherritt dans les Rocheuses, et près du double de la quantité de charbon thermique actuellement exportée par le Canada. Coalspur s’est également assuré une présence auprès des Ridley Island Coal Terminals, au port de Prince Rupert, en Colombie-Britannique, pour 13,5Mt/an sur une période pouvant atteindre 21 ans. Ridley Terminals est le port en eaux profondes le plus proche de Vista (environ 1 200 km en train). Le terminal procède à l’expansion de ses capacités de transport de 11,2Mt/an à 25Mt/an d’ici 2015 – ce qui correspond à la production de départ prévue par Vista. Coalspur a effectué une étude de faisabilité bancable pour Vista au début de l’année, et est maintenant en phase d’achever une étude de conception détaillée et d’obtenir les autorisations réglementaires nécessaires. Les travaux devraient commencer au début ou en milieu d’année 2013, une fois les autorisations réglementaires et l’accord final du conseil obtenus. La production initiale est prévue pour début 2015. Au cours des 28 ans de la durée de vie de la mine, Vista traitera 20,4 Mt de minerai par an, pour une production annuelle de 12 Mt de charbon vendable. Le charbon sera lavé dans les grands cyclones de l’usine de traitement, avant d’être séché puis transporté par voie ferrée. La mine sera à ciel ouvert, et l’extraction se fera à l’aide de câbles de dragage, de camions et de pelles. « La géologie à Vista est extrêmement favorable », déclare David Leslie, vice-président du développement commercial. Les filons de charbon – qui atteignent tout juste les sept

degrés en moyenne – sont continus et se trouvent à proximité de la surface. « Tous ces facteurs feront de Vista une mine à ciel ouvert, opérant à moindre coût et à un taux de recouvrement relativement bas. »

Potentiel de croissance Coalspur explore également deux autres options de développement : Vista South Coal (« Vista South ») et Vista Extension. Vista South se situe à six km au Sud-ouest de Vista et occupe une surface d’environ 23 300 hectares. Vista Extension, acquis en avril 2012, longe la limite Nord-est de Vista, sur environ 14 400 hectares . En juillet, l’entreprise a publié une étude de définition pour Vista Extension confirmant le potentiel de l’exploitation par longue taille d’une mine souterraine qui produirait en moyenne 3,8 Mt de charbon vendable par an, et ce pendant 28 ans. La direction de Coalspur se veut optimiste quant aux perspectives de développement de ces sites. « Vista Extension dispose de la même structure géologique favorable que Vista et devrait contenir du charbon thermique bitumineux d’exportation de même qualité », explique M. Leslie. Quant à Vista South, le forage d’exploration en cours a déjà mené à une augmentation impressionnante des ressources de charbon. En mai, Coalspur a annoncé une augmentation des ressources mesurées et indiquées de Vista South de 93 Mt à 471 Mt. Les ressources présumées de charbon ont également augmenté de 75 Mt à 605 Mt, ce qui correspond à une augmentation de 29 pour cent du total des ressources mesurées et indiquées de Coalspur pour un total de 1 700 Mt, et à une augmentation des ressources présumées de 35 pour cent pour un total de 2 035 Mt. ICM Traduit par Erik Stout

September/October 2012 | 73

project proﬁle | U S O I L S A N D S

Courtesy of US Oil Sands

US Oil Sands vice-president of operations Barclay Cuthbert inspects hydrocarbon distillation equipment at the company’s project in eastern Utah.

Citrus twist On the 9th floor of Calgary’s downtown Ford Tower, a company is at work planning a new bitumen venture. This is hardly unusual in Calgary. What sets the team at US Oil Sands Inc. apart from the crowd is that it is planning the first commercial oil sands production in the United States. And it will not be using the tried-and-true steam assisted gravity drainage or Clark methods to extract the bitumen. BY GRAHAM CHANDLER

e have a technology that allows us to do things much more efficiently than they’ve been done before,” says Cameron Todd, CEO of US Oil Sands. “With less cost, less complexity and, at the same time, huge benefits environmentally – it’s a win-win-win thing.” On the company’s 32,000-acre lease in Utah, just south of the town of Vernal, US Oil Sands will mechanically strip the ore using a Wirtgen surface miner. Marble-sized chunks, about two centimetres in diameter, will be trucked to a processing facility which de-lumps and heats the ore to loosen most of the bitumen. To complete the bitumen extraction from the sands, a bio-solvent will be used, which will be recovered and recycled. An important aspect of this process – no tailings ponds. Todd, with five years’ experience in oil sands development and operations on his long energy-centric resume, explains how they ended up applying the US Oil Sands process in Utah. “We came up with the process first,” he says, but with no

“W

74 | CIM Magazine | Vol. 7, No. 6

access to land in Canada, “we went to Utah.” To their surprise they found out no other process had worked in Utah, but theirs did. Utah’s bitumen is unlike Alberta’s but similar to the rest of the world’s. “Athabasca is the unique place,” says Todd. “Most places on earth are the way it exists in Utah where oil preferentially sticks to the rock. When you go to Utah and heat up the rock the bitumen will flow out of the pores but also will stay stuck to the grain.” The Clark hot water process, where the sand comes out relatively clean, does not work in Utah. “The thin layer of bitumen on each grain supports very little water in the system.” The difference is geology. “We sit on a plateau where we have a very thin overburden, about 20 feet (six metres) thick, then a layer of bitumen in sandstone below that,” explains Todd. “All around our lease we have deep eroded canyons and much of the water has run off so it’s undersaturated for water.

US OIL SANDS

| project proﬁle

aerobic bacteria and in the atmosphere by photochemical means.” It is added into the initial extracRESOURCE: 190 million barrels tion process with the hot water to TOTAL LEASES: 13,000 hectares make slurry. “The solvent dissolves ESTIMATED BITUMEN RECOVERY RATE: 96 % into the bitumen, changing both its viscosity and its specific gravity,” says WATER RECYCLING RATE: 95 % Cuthbert. “So it allows us to separate FIRST PRODUCTION the oil from the sand and water.” DATE: Late 2013 Once that is done, a distillation RATE: 2,000 bpd process is used to recover the solvent for reuse, a bonus because “in its pure CAPEX FOR PHASE 1: $30 million form it’s quite expensive,” according to Cuthbert. The solvent ensures a 96 per cent What’s left behind is a slightly weathered oil.” The bitumen is bitumen recovery, leaving sand particles clean enough to put in multiple layers, each up to 15 metres thick with rock in back in the mine right away. “So we can reclaim the mine as we go,” says Todd. “What you have is clean bitumen, clean between. water and clean sand.” In the Athabasca sands, fine clays are problematic. Utah Extracting with bio-solvent sands have much less, but content is variable, so different conUnlike the boot-sticking Athabasca oil sands, these ores are centrations are tested in the company’s Grand Prairie pilot more solid than asphalt. Todd shows off a chunk; it is black, plant. They have brought in sands from all over the world to hard like sandstone and smells faintly of oil. He says it is test the process, typically running about a tonne and a half of between 0.3 per cent and 0.4 per cent sulphur, which makes ore, about a barrel of bitumen per hour. “We have done a huna huge difference at the refinery; there is no need for the dred different pilots in Grand Prairie where we can test a lot of energy-intensive process of stripping that out. different variables like temperature and flow rates, how much Because the ore is relatively hard, the surface miner is ideal and what kinds of solvents, and low fines and high fines,” says for ripping it up. The machine’s teeth can be adjusted to proTodd. “So we know to optimize the process for whatever ore vide different-sized material. In US Oil Sands’ case, marble-size suits the processing with no need to crush it further. Instead it deposit we have to work with. That makes the pilot really valuwill go to a de-lumper, which consists of counter-rotating able.” In Utah, the company has run extraction pilots up to drums that break up the ore that may have compacted during 500 barrels per day (bpd) and tested the continuous mining hauling and reduce it back to the desired size. Todd displays a equipment up to 3,700 tonnes per day. jar containing the conditioned ore as it will appear off the de-lumper; it feels much like Athabasca oil sands but drier and more crumbly. During processing, unlike in Alberta, application of hot water removes only some of the bitumen and much remains stuck to the sand grains. “So you are left with low recoveries and an oily mess of sand that you can’t dispose of,” says If you’re planning to build a small ofﬁce building, a millionTodd. “I would guess maybe 20 per cent square-foot distribution center, or anything in-between, now sticks to the grains.” is a great time to look at everything a Butler® building has to This is where the company’s creative offer. Faster schedules. Lower construction costs. Reduced use of a bio-solvent comes in. Barclay maintenance. And virtually unlimited exterior options, Cuthbert, US Oil Sands’ vice-president of including concrete, brick, and glass. Want to hear even more? operations, describes it as a by-product of Give us a call—your local Butler Builder®. the global citrus industry. “Once the Contact us at 1-855-BUILD-86 or visit us on the web. orange juice etcetera is out and you’re left with the pulp and peel, a naturally occurring chemical can be extracted; it’s prowww.clarkbuilders.com duced in the thousands of tonnes annually. ©2011 BlueScope Buildings North America, Inc. All rights reserved. Butler Manufacturing™ is a division of BlueScope Buildings North America, Inc. It breaks down readily, both in soil by MINING PROJECT AREA: 2,400 hectares

Courtesy of US Oil Sands

PROJECT SPECS

Discover the

top reasons

to build with Butler.

September/October 2012 | 75

project proﬁle | U S O I L S A N D S

All images courtesy of US Oil Sands

1. A 50-person camp facility supports site work; 2. Ore at the company’s PR Spring site naturally weeps bitumen when exposed; 3. Bitumen weeps from the exposed sandstone of the Upper Wasatch formation.

A question of scale Todd estimates that, from construction to installation, the skid-mounted modules for the first commercial unit of 2,000 bpd can be ready for operation in 14 months. Fabrication on site is expected to be complete by mid-2013. “We can move it to different locations to try and get the deposit out of the ground as fast as we can,” he says. Portability helps minimize ore truck hauling distances. As the concept proves itself, “we will be able to put in 10,000 bpd units,” says Todd. “Those might be multiple 2,000 bpd models, or likely there will be individual pieces of equipment that are bigger.” He points out cost differences with the Canadian oil sands plants: “Some of them are over $10 billion 76 | CIM Magazine | Vol. 7, No. 6

for a 100,000-bpd-capacity – that’s $100,000 per barrel of capacity. Our first unit is going to cost us a little over $30 million for 2,000 bpd so that’s $15,000 per barrel, an enormous savings in capital cost. It now becomes possible to go after smaller deposits, and there are many in Canada that are much smaller than the minimum threshold of 100,000 bpd. And you can build them without a tailings pond.” Building the smaller units, especially the pilot plant, has its challenges. Cuthbert works closely with the design team. He says procurement has been a challenge due to the project’s small size. “We had to either make [components] or find other sources and get them to work together.”

US OIL SANDS

The company reckons 2,000 bpd is the minimum commercial size. “Our next stage will be to put a couple of sister units beside this one,” says Todd. “And expand to 6,000 bpd; we have the permits for that.” Power will be supplied by natural gas; a pipeline runs within a hundred yards of the lease. Cuthbert says all permits are in place for the initial operation. “The master umbrella project called the Notice of Intention to Conduct Large Mining Operations is in place. Our leases are all on state lands and those approvals were granted in 2009.” And because tailings are to be put back in the mine site, some groundwater permitting was required. But the area is very dry. “Last year, we drilled 147 holes on the property and hit no water,” says Cuthbert. “We are sourcing our water from 600 metres deep and we will recycle 95 per cent of it.” Reclamation will consist of replacing the topsoil and vegetation within the first three years after the start. “Then after that you’re filling in behind you as you go,” says Todd. “You have to wait to get to the bottom of the deposit before you put the clean sand back in, so you have to store it for about three years.”

| project proﬁle

jurisdiction, a new type of deposit and a new process, and that means it’s more challenging to raise money.” He says they are looking to bring in a joint venture partner. Oil price sensitivity should help attract one. “We can run this thing at breakeven, at under $50 a barrel,” says Todd, “but to get a reasonable return we’d look for a better price. When you are more operationally efficient your ability to compete at lower prices is enhanced.” CIM

Precise Product Sized for Maximum Yield

Lonesome pioneer Bitumen off-takes are still under negotiation, says Todd. First production is expected next fall and likely be destined for Salt Lake City refineries by truck. As production ramps up, he expects to access West Coast refineries by train. “We are working with existing refiners,” he says. “It’s a big benefit to working in Utah.” The royalty rate is about 6.5 per cent on most of the company’s lands, which is much lower than in Alberta. And unlike in Alberta, royalties are payable to the state through the School and Institutional Trust Lands Administration instead of general coffers. “It’s used for public education, that’s one of the reasons why the regulators and the government are very strongly pro-development,” says Todd. Capital depreciation and tax rates are similar to Alberta. What keeps the CEO awake at night? “Building the first,” he says. “Our biggest problem is getting people to believe in us, because when you’re first there are no comparatives. You are the pioneer. And that’s a challenge. You have a new

Gundlach at MINExpo Visit Gundlach MINExpo,, Central Hall, C4, Booth #7985 #7985,, any time online GundlachCrushers.com/cim GundlachCrushers.com/cim or any TOLL-FREE: 1-877-GUNDLACH 1-877-GUNDLACH TOLL-FREE: s@GundlachCrushers.com Email: BetterCrusher BetterCrushers@GundlachCrushers.com

September/October 2012 | 77

projet en vedette | U S O I L S A N D S

Courtoisie d’US Oil Sands

L’année prochaine, US Oil Sands prévoit de débuter les travaux d’extraction de bitume sur ses terres dans l’est de l’Utah.

Le secret des agrumes PAR GRAHAM CHANDLER

u 9e étage de la Ford Tower au centre-ville de Calgary, une compagnie travaille à la mise en place d’une nouvelle entreprise d’exploitation de sables bitumineux. Ces préparatifs n’ont rien d’étonnant en soi de telles entreprises sont relativement courantes à Calgary. Ce qui distingue l’équipe de US Oil Sands Inc. du commun des mortels, c’est qu’elle établit la toute première production commerciale issue des sables bitumineux à voir le jour aux États-Unis. De plus, pour ce faire, elle ne se servira ni de la méthode drainage par gravité au moyen de vapeur ni de la méthode Clark – des méthodes qui ont pourtant fait leurs preuves – pour extraire le bitume. « Nous avons la technologie qui nous permet d’obtenir une efficacité bien supérieure à celle des méthodes pratiquées jusque-là », explique Monsieur Cameron Todd, PDG de US Oil Sands Inc. Sur le site de la concession de la compagnie – un terrain s’étalant sur près de 13 000 hectares situés juste au sud du village de Vernal, dans l’état d’Utah – le procédé mis en œuvre arrachera le minerai au moyen d’un mineur de surface Wirtgen. Des morceaux de la taille d’une bille – environ 2 cm de diamètre – seront ensuite transportés par camion à une installation de traitement où le minerai sera

78 | CIM Magazine | Vol. 7, No. 6

chauffé et tamisé pour desserrer la majeure partie du bitume. Pour compléter l’extraction du bitume des sables, un solvant bio sera employé, puis récupéré et recyclé par la suite. Un facteur important : il n’y aura pas de bassin à résidus. Le bitume trouvé dans l’Utah ne ressemble pas à celui de l’Alberta mais ressemble bien au bitume trouvé ailleurs dans le monde. « Quand on se rend dans l’Utah et qu’on chauffe la roche, le bitume coule des pores mais en même temps reste collé aux grains de sable. » Le procédé Clark à l’eau chaude, où le sable sort relativement propre, ne fonctionne pas dans l’Utah. « La mince couche de bitume sur chaque grain ne tolère que très peu d’eau dans le système. » C’est attribuable à la géologie des terres dans l’Utah. « On est assis sur un plateau où le mort-terrain est très mince – ayant à peu près 20 pieds d’épaisseur – avec, en-dessous, une couche de grès contenant du bitume », explique Monsieur Todd. « Tout autour des terres de notre concession, nous avons des canyons profonds érodés, et pratiquement toute l’eau s’est écoulée ; donc le sol est sous-saturé en eau. Ce qui reste est du pétrole un peu altéré. » Le bitume se trouve dans des strates d’épaisseur variable atteignant parfois les 15 mètres, avec, entre les strates, de la roche.

US OIL SANDS

| projet en vedette

Extraire le bitume à l’aide d’un solvant bio Monsieur Todd nous montre fièrement un morceau de minerai. Il est noir, dur comme le grès, et sent vaguement l’huile. Il nous dit qu’il contient entre 0,3 et 0,4 pour cent de soufre – ce qui fait une différence énorme à la raffinerie, car du coup, il n’y a aucun besoin de passer par le procédé d’arrachage du soufre. Comme le minerai est relativement dur, le mineur de surface est idéal pour l’arracher. Les dents de la machine peuvent être réglées pour fournir des matériaux de dimensions différentes. Dans le cas d’US Oil Sands, la taille d’une bille est bien adapté au traitement, et il n’y a aucun besoin de concassage supplémentaire. Plutôt, il sera acheminé au tamiseur, composé de tambours à rotation inverse, et qui concasse le minerai, qui a pu être compacté pendant le transport, pour le réduire de nouveau à la bonne dimension. Lors du traitement, à la différence de l’Alberta, l’application de l’eau chaude ne décolle qu’une partie du bitume, et il en reste toujours une quantité non négligeable collée aux grains de sable. « On se retrouve donc avec un taux de récupération bas et un gros tas de sable huileux dont on ne peut se débarrasser », raconte Monsieur Todd. « Je dirais que peut-être 20 pour cent du bitume reste collé aux grains. » C’est là que l’utilisation inventive du solvant bio fait son apparition. Monsieur Barclay Cuthbert, vice-président chargé des opérations chez US Oil Sands, raconte que le solvant est un produit récupéré de la culture mondiale des agrumes. « Une fois que le jus d’orange et tout ça a été retiré et on se retrouve avec rien que la pulpe et la peau, on peut en extraire un produit chimique qui se produit naturellement, on en produit des milliers de tonnes chaque année. Il se décompose aisément, soit dans le sol à l’aide de bactéries aérobies, soit dans l’atmosphère de façon photochimique – c’est-à-dire, le contact de la lumière du soleil déclenche la décomposition. » Le produit est ajouté au procédé d’extraction initial avec l’eau chaude pour faire une boue. « Le solvant se dissout dans le bitume et en modifie et la viscosité et la densité », explique Monsieur Cuthbert. « Ainsi, il nous permet de séparer l’huile du sable et de l’eau. » Ensuite, un procédé de distillation est employé pour récupérer le solvant, qui peut alors être réutilisé. C’est un bénéfice appréciable, car « le coût du produit dans sa forme pure est très élevé. » Le solvant assure un taux de récupération du bitume de 96 pour cent, laissant des particules de sable qui sont suffisamment propres pour être remis dans la mine sans attendre. « Du coup, on peut remettre la mine en état au fur et à mesure qu’on avance », explique Monsieur Todd. « On se retrouve avec du bitume propre, de l’eau propre, du sable propre. » Dans les sables bitumineux de l’Athabasca, l’ultrargile est problématique. Les sables de l’Utah en contiennent beaucoup moins, mais le contenu n’est pas constant, donc on teste des concentrations variées à l’installation pilote de US Oil Sands à Grande Prairie. Ils ont fait venir des sables d’un

peu partout au monde pour tester le procédé. Typiquement, ils passent environ une tonne et demie de minerai, puis un baril de bitume toutes les heures. « Nous avons fait une centaine de programmes pilotes à Grande Prairie, où on peut tester un grand nombre de variables différents, tels la température et le débit, la quantité et le type de solvant, des taux de fines faibles et élevés », raconte Monsieur Todd. « Donc on sait optimiser le procédé pour le type de gisement de minerai qu’on a entre les mains, ce qui fait que le programme pilote est vraiment précieux. » Dans l’Utah, la compagnie a mis sur pied des programmes pilotes d’extraction atteignant jusqu’à 500 barils par jour (bpj) et a testé le matériel d’exploitation minière en continu jusqu’à un niveau de 3 700 tonnes par jour.

Une question d’échelle Monsieur Todd estime que, depuis la construction jusqu’à l’installation, les modules montés sur pattes pour la première unité commerciale de 2 000 bpj peuvent être fonctionnels en l’espace de 14 mois. La fabrication sur le site sera complétée, selon les prévisions, en milieu d’année 2013. « On peut déplacer le module d’un site à l’autre, puis essayer d’extraire le gisement du sol le plus rapidement possible », explique-t-il. La portabilité permet de minimiser les distances de transport des camions de minerai. « Notre première unité va nous coûter un peu plus de 30 million de dollars pour 2 000 bpj – ça fait 15 000 $ le baril, une économie énorme de coût en capital », explique Monsieur Todd. « Il devient alors possible de poursuivre avec les gisements plus petits, et il y en a pas mal au Canada qui sont bien plus petits que le seuil minimal de 100 000 bpj. De plus, on peut les construire sans bassin à résidus ! » Monsieur Cuthbert raconte que tous les permis nécessaires sont en place pour l’opération initiale. « Le projet maître d’encadrement appelé Notice of Intention to Conduct Large Mining Operations (Avis d’intention d’entreprendre une opération d’exploitation minière d’envergure) est en place. Nos concessions sont toutes sur les terres de l’État d’Utah, et les approbations pour celles-ci ont été octroyées en 2009. » De plus, comme des résidus devront être remis au site de la mine, il a également fallu obtenir des permis concernant l’eau souterraine. Cependant, la région est très aride. « L’année dernière, on a percé 147 trous sur le terrain sans jamais tomber sur de l’eau », raconte Monsieur Cuthbert. « Nos sources d’eau sont à 600 mètres de profondeur, et on recyclera 95 pour cent de l’eau. » La remise en état comprendra le remplacement de la couche de terre arable, ainsi que la végétation, dans les trois ans suivant le début du projet. « Puis, par la suite, on remet tout de suite au fur et à mesure qu’on avance », ajoute Monsieur Todd. « Il faut attendre d’être arrivé jusqu’au fond du gisement avant de remettre du sable propre, donc, il faut l’entreposer pendant à peu près trois ans. » ICM Traduit par Mark Stout September/October 2012 | 79

Canadian Metallurgical Quarterly The Canadian Journal of Metallurgy and Materials Science

Canadian Metallurgical Quarterly publishes original contributions on all aspects of: metallurgy and materials science, including: Mineral processing Hydrometallurgy

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Subscription information Institutions can subscribe online at www.maney.co.uk/journals/cmq or by emailing subscriptions@maney.co.uk. Institutional print & online: £486.00/US$768.00 Institutional online-only: £445.00/US$695.00 Members should contact the CIM: www.cim.org

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Journal information Volume 51 (2012), 4 issues per year Print ISSN: 0008-4433 Online ISSN: 1879-1395 Editor: Professor J D Boyd, Queen’s University, Canada For further information, visit the journal homepage: www.maney.co.uk/journals/cmq

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CIM community

Homegrown CIM Saskatoon Branch supports next generation of mining leaders By Dinah Zeldin

Who’s who? 2012 Saskatoon Executive CHAIR Jeff Spence VICE CHAIR Michelle Sturby TREASURER John Cairns PAST CHAIR Michael Castleberry SECRETARY Tara Stratton CIM Saskatoon Branch: From left, Mike Castleberry, Dean Gay, Dennis Lammers, Sonny Wilson, Paul Labbé, Doug Milne, Brad Hill, Tara Stratton, John Cairns

A lot has happened since the CIM Saskatoon Branch was established in 1965. From the rapid expansion of potash mining through the 1970s, to the recent breakthrough at Cameco’s Cigar Lake mining project, the region has seen a lot of action – and so has the Saskatoon Branch, which has grown to be 400-members strong and has a jampacked technical and social program, with special emphasis on attracting students. “I think the growth and success of Saskatchewan and the Saskatoon area has certainly contributed to the branch

Saskatoon CIM Branch Events 2012 September 20 October 25 November 15 November 16

General Interest Night Potash Night Mineral Processing Night Annual Ball

2013 January 17 February 28 March 21 April 18 July

Safety Night Uranium Night Student Paper Night Spring Social at the Centre East room CIM Golf Tournament organized by Dean Gay and Brad Hill

being so active and growing,” says past branch chair Michael Castleberry, who is production superintendent at Mosaic Potash Colonsay. Castleberry and the Saskatoon Branch’s executive and volunteers put a lot of work into organizing activities for branch members. Each year, there are monthly technical presentations, an annual ball in November, a spring social night and a golf tournament in July. Branch members benefit from events by learning from peers and presenters at technical events and by building bonds with industry stakeholders over drinks or a friendly game of golf. “Because our members make up such a large group from the local mining industry there is a great opportunity to network at our meetings and social events,” explains Castleberry. “We are fortunate to have a great group of industry and technical experts and innovation leaders that can deliver top-notch presentations in Saskatoon and the surrounding area.” According to Castleberry, the branch’s current priority is to involve local university students. “We are working on developing our scholarship and sponsorship committees to distribute and fund future scholarships,” he says.

PROGRAMMING Sonny Wilson STUDENT PROGRAMMING Doug Milne MEMBERS AT LARGE Dave Mackintosh Richard May

Key volunteers Rob Carey: Monthly program audiovisual and hardware coordinator Brad Hill, Dean Gay and Dennis Lammers: Golf Tournament organizers, IT support Doug Kramble: MEMO chairman Fraser Markham, Robert Carey and CIM National: MEMO support

“We are really making strides to prepare and guide the next generation of leaders in the mining industry.” The branch has strong ties with the academic community: members are closely linked with the University of Saskatchewan, having distributed $5,000 in scholarship funds to its students over the past year, and are focused on building stronger ties with the Saskatchewan Institute of Applied Science and Technology (SIAST). “Future plans are to build a sustainable CIM scholarship program and to continue to look for ways to increase student involvement in our local branch,” Castleberry explains. CIM September/October 2012 | 81

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Mining law magnate Fasken’s Michael Bourassa three-time lawyer of the year By Virginia Heffernan

If this year’s mining lawyer of the year recipient Michael Bourassa could give young lawyers establishing a career in mining one piece of advice, it would be to join as many industry associations as possible. “Get to know people in the industry, not just the other lawyers, but the geologists,” says Bourassa, a partner at Torontobased Fasken Martineau, who has been named Who’s Who Legal’s Mining Lawyer of the Year for three years running. Bourassa says his involvement with organizations, such as CIM and PDAC, is one of the most satisfying aspects of his career and helps him understand what makes exploration and mining stakeholders tick. He sits on PDAC’s Board of Directors and is vice-chair of the International Bar Association’s mining law committee. His dedication to these organizations, expertise in case work, and extensive network of international contacts place Bourassa as a leader among his peers. When polled by Who’s Who Legal, one respondent characterized him as a “force of nature in the mining world.” Bourassa is an expert in commercial agreements, including joint venture, royalties and options. He has extensive experience in due diligence for title, technical matters and environmental risk, and he has written articles on corporate social responsibility trends in the industry – many of which have appeared in CIM Magazine. “We canvass private practice lawyers of repute in the field, as well as general counsel, in all the major jurisdictions to identify a select group of practitioners clients and peers consider pre-eminent in the area,” Who’s Who

“Get to know people in the industry, not just the other lawyers, but the geologists.” Legal’s assistant editor Richard Woolley explained. “We attempt to provide an accurate snapshot of those lawyers who are particularly active and have impressed respondents over the past year to 18 months.” Speaking from a hotel room in the Austrian capital of Vienna, where he was vacationing in June, Bourassa told CIM Magazine that the most interesting deal he recently stickhandled was the joint venture between Adriana Resources and WISCO, one of the major subsidiaries of China’s Wuhan Iron &

Steel group. The deal gives WISCO a 60 per cent interest in Adriana’s Lac Otelnuk iron ore property in Nunavik, Quebec and a 20 per cent interest in Adriana in exchange for $120 million. “It’ll probably be the largest iron ore project in Canada once it’s built and it’s an example of how China is working with Canadian companies to acquire and develop major assets,” says Bourassa who was negotiating on behalf of Adriana for almost a year. “It was a complex deal in terms of how we managed to structure it and there were several lawyers involved.” Bourassa has come a long way from his prairie roots. Born into a farming family in Saskatchewan, he earned a BSc in physical geography from the University of Saskatchewan in 1976 and went on to work for Uranerz Exploration and Mining in the Athabasca uranium fields in the province’s north region. That early industry experience made Bourassa a perfect fit for a legal job at Ontario’s Ministry of Northern Development and Mines after he graduated from the university’s law school in 1984 and was called to the Ontario Bar two years later. He stayed with the ministry until 1990, and then took a position at Aird & Berlis. He moved to Fasken Martineau in 2003 where he is now coordinator of the firm’s global mining group. In addition to Bourassa, eight of Fasken’s mining lawyers were listed in Who’s Who Legal 2012 including: John Turner and Charles Higgins in Toronto; Andrew Gabrielson and Josh Lewis in Vancouver; Jean Gagné in Quebec City; Thomas Wexler in London; Tanneke Heersche in Johannesburg; and JeanClaude Petilon in Paris. CIM September/October 2012 | 83

CIM community

Come together Networking by Design event unites Toronto’s mining networks By Marty Dregischan and Manuel Cortes

There is strength in numbers. No one knows that better than mining professionals, who have a long history of banding together to address key issues, share knowledge and collaborate on initiatives. But, in a global environment where mining projects are often developed by multidisciplinary, cross-cultural teams, it is more essential than ever to break down the silos of experience and expertise that can sometimes inhibit progress. Networking by Design, launched this year in Toronto, aims to do just that

by giving existing networking groups an opportunity to come together at a series of face-to-face events.

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Our first Networking by Design meeting was held in June at the Watermark Irish Pub in Toronto, drawing nearly 200 attendees from across the mining sector to network and to identify opportunities for collaboration. Members of four groups helped organize the inaugural event, including: Women in Mining (Toronto Branch); Canadian Council for Aboriginal Business; CIM Hispanics in Mining Toronto; and CIM Mining Professionals, the Next Generation (Toronto). “The turnout of mining professionals at the recent Networking by Design event was impressive,” said Kathy Chapman, co-chair, Women in Mining, Toronto Branch. “Women in Mining Toronto members are looking forward to the next event.” Our event attracted a wide range of professionals from across the industry – not only those associated with the four founding groups. Attendees included government approval agency representatives, engineers, lawyers and other stakeholders. The broad range of specialists at the event allowed attendees to discuss complex issues from multiple perspectives, in an informal atmosphere. Topics such as new development in remote regions were brought to the fore, and government approval agents and other stakeholders shared perspectives on the development of these projects. Attendees told us they were excited to meet people from all of the groups involved and to have the opportunity to connect with individuals working at various levels, and in various specialties in the mining industry. We were very happy with the outcome of the event and aim to continue

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to build the momentum by bringing more independently operating groups together. We hope that the Networking by Design platform will not only increase communication within the Toronto mining community but will also help attendees build solid, long-lasting relationships with key industry stakeholders. “We were pleased to be collaborating with other groups on this initiative,” said Clint Davis, president and CEO of the Canadian Council for Aboriginal Business (CCAB). “CCAB is the largest employer of Aboriginal people. Events like this one provide invaluable opportunities for our stakeholders to connect with key individuals in the industry.” The Hispanics in Mining Toronto group was equally thrilled with the collaborative event. The recently formed group aims to unite Spanish-speaking mining professionals and strengthen their connections with the industry in Toronto. We would like to extend a sincere thank you to our sponsors, Coffey Mining, AMC Consultants and the CIM Toronto Branch for helping to bring this first event to fruition. We plan to organize a networking evening every three to four months, to be held at various downtown Toronto venues. Upcoming events may also be integrated into other mining conferences taking place in the city. CIM Marty Dregischan is chair of Mining Professionals – The Next Generation, Toronto, 2nd vice-chair of CIM Toronto Branch and chair of M4S, CIM. Manuel Cortes is chair of Hispanics in Mining Toronto.

Join us! The next Networking by Design – Mining Toronto event will be held at 6 p.m. on September 26, 2012 at the Watermark Irish Pub in downtown Toronto. RSVP: MiningToronto@NetworkingByDesign.ca. For more information, contact Marty Dregischan at marty.dregischan@rogers.com or +1-647-448-2887.

CALENDAR CIM EVENTS COM2012: 51st Conference of Metallurgists Sept. 30 – Oct. 3 | Niagara Falls, Ontario www.metsoc.org Process Mineralogy 2012 Nov. 7 – 9 | Cape Town, South Africa www.min-eng.com/processmineralogy12 Precious Metals 2012 Nov. 12 – 13 | Cape Town, South Africa www.min-eng.com/preciousmetals12 CIM/SME Safety and Reliability Conference 2012 Nov. 13 – 15 | Minneapolis, Minnesota www.smenet.org CIM Calgary Branch Technical Luncheon Dec. 12 | Calgary, Alberta cimcalgary@gmail.com CIM 2013 Convention May 5 – 8 | Toronto, Ontario www.cim.org/toronto2013

INTERNATIONAL EVENTS 3rd Annual WipWare Training Seminar Sept. 18 – 21 | North Bay, Ontario www.wipware.com MINExpo INTERNATIONAL Sept. 24 – 26 | Las Vegas, Nevada www.minexpo.com 7th International Conference on Mine Closure Sept. 25 – 27 | Brisbane, Australia www.mineclosure2012.com 2nd Focus on West Africa Oct. 8 | London, UK www.mineafrica.com 2nd Annual Newfoundland and Labrador/ Québec Mining Forum Oct. 16 – 17 | Happy Valley-Goose Bay, Newfoundland www.insightinfo.com/nlmining2012 Québec Mines Nov. 26 – 29 | Québec, Québec www.QuebecMines.mrnf.gouv.qc.ca

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CIM community Scholarship Winner

From tunnels to the moon Hildebrant Memorial Scholarship recipient digs deep and aims high By Dan Plouffe

Jessica Steeves, one of this year’s recipients of the Maintenance and Engineering Society’s Ken Hildebrant Memorial Scholarship, is headed into her fourth year of geological engineering at Queen’s University. The Oakville, Ontario native spent this summer working at Vale’s nickel operations in Thompson, Manitoba, where a major highlight was planning and executing several blasts. Steeves is involved with numerous student groups at her school, and has her Star Trek uniform ordered and ready to go for NASA’s 2013 Lunabotics competition where she will serve as Queen’s Space Engineering Team captain. CIM Magazine caught up with Steeves to get her perspective on her industry experience so far and on where she thinks we need to boldly go in the future. CIM: What did you want to be when you were five years old? Steeves: When I was five, I think it was probably Britney Spears. I remember dressing up as Britney for Halloween several times.

years to come, and we’re going to need the metals to make those. I think space mining is only going to become more important because the things we’re mining on earth aren’t renewable. CIM: What do you think is the biggest misconception the public has about mining? Steeves: That we just dump everything and leave it. A lot of these misconceptions arise because negative events are publicized and the positive ones are not. I believe the public thinks that we don’t think before we do things, but they’d be surprised how much education, research and thought goes into solving problems and improving our mining processes each year to become more sustainable, more environmentally friendly, more productive and safer. Sustainability and safety are big priorities. I don’t think people see all the work that goes on behind the scenes. CIM: If you had a blank cheque, what mining sector or project would you invest in, and why? Steeves: I would probably invest in mining cleanup because I feel like that would be an investment, not only in the environment, but also in changing the public’s view of the mining sector. Investing in remediation could also help develop technologies that make make it even easier and perhaps even less costly.

“Sustainability and safety are big priorities. I don’t think people see all the work that goes on behind the scenes.”

CIM: So, how and when did you move on to pursuing a career in mining? Steeves: Well, I was also really interested in archaeology as a child. My parents took me to a lot of ancient history museums and I really liked that. I was always interested in digging in the ground, which is also something you end up doing as a geologist. Since my dad was an engineer, he taught me about engineering and the sciences. When I went to Queen’s I decided to study engineering and took a variety of courses. I took geology and mining, and even electrical. That year, I realized that geology is what I love. I really enjoyed going to lectures and learning about the mining industry. CIM: In 100 years from now, how important will space mining be to our world? Steeves: I think it will be very important. We’re all still going to want the newest and coolest cell phones and gadgets in the 86 | CIM Magazine | Vol. 7, No. 6

CIM: How are you enjoying living in Thompson while working at Vale? Steeves: Honestly, I like it a lot, which is weird for me because I’m so used to living in suburbia. It’s been really fun up here. I’ve been fishing and to the shooting range – things I never would have expected to do. I even own camouflage clothing now. When I told my dad I own camouflage, he was like, ‘No you don’t! What has happened?’ You just have to go into these things with an open mind. There’s a wonderful group of students up here, and we have so much fun together. I’ve had a blast. CIM

CIM community

All for one, one for all Sherritt Coal’s Paintearth mine takes collaborative approach to safety

When Sherritt Coal’s Paintearth mine, a conventional surface strip mining operation with an annual production capacity of 3.5 million tonnes of coal, received The John T. Ryan Trophy for being the country’s safest coal mine this past May, many wanted to know the secret to its safety record. After all, Paintearth has received the John T. Ryan Trophy – awarded for having had the lowest reportable injury frequency per 200,000 hours worked in the previous year – seven times since 2001. “Mine inspectors have come on site and asked ‘what works for you guys?’” says Chris Chapman, safety supervisor for both Paintearth and Sherritt’s Sheerness coal mine, which received the award for the fourth time in 2009. His answer is always the same: “It’s the communication, and the way everyone works together from the corporate level, to management and hourly employees.” But listen to Chapman expand on what that means, and a far more complex paradigm begins to show – one that points to the difference between a checklist approach to safety, and a culture of collaboration and commitment that ensures safety awareness and action permeate every individual’s approach at every level of the organization. In other words, there is constant communication between highly informed people who are keenly aware and alert and are investing the time and effort to maintain that level of awareness. It all starts at the corporate level, says Chapman. Sherritt sets a Lost Time Injury (LTI) index target of zero and a Total Recordable Injury (TRI) index target of less than 0.75. In 2011, the company achieved an average LTI index of 0.05 and a TRI index of 0.32. “We have a lot of support from our corporate office,” he says. “They come out here a lot, tour the mine site, talk with the employees about safety issues

Courtesy of Sherritt Coal

By Alexandra Lopez-Pacheco

Sherritt Coal’s Paintearth mine is a unionized operation with 140 staff. The average employee age is 41 and the average length of employment is 12 years.

and celebrate with us when we achieve our targets.” There are also monthly audits, which are reviewed by the mine’s crew at safety meetings so that staff become aware of the findings and have the chance to provide input. On top of all that, there are meetings with the mine manager and the maintenance manager every Monday and Friday, and an open-door policy is maintained at all times. While Paintearth uses the Alberta Mine Safety Association’s safety program to educate its employees, it also promotes mentoring and sharing insights and experiences from one generation of workers to the next. “We have employees who have been working at the mine for 35 years, so they pass on the safety culture to the new employees,” explains Chapman. “Because we’re a small operation, we have a lot of good one-on-one interaction. It is a huge investment, but the employees look forward to seeing the outcomes of the audits because they know they are not just a guy walking

around checking off boxes, and they’re also involved with them. And they know if a problem is identified, it will be addressed.” It has been four years since the mine had an incident reported. Prior to that, it had been nine years. “So they are very few and far between,” says Chapman. “When an incident is reported to our general manager, there’s a modified work program available, if it is required. Our employees know that any problem will be addressed, so there’s a level of trust.” The mine’s commitment to fostering ongoing awareness and knowledge sharing extends beyond its own operations. “We belong to the Alberta Mine Safety Association and we meet quarterly and discuss our safety records and what issues other mines are having. We share our experiences,” says Chapman. “But we don’t have a canned safety program. It just comes down to the communication between the corporate office, the managers and the hourly employees.” CIM September/October 2012 | 87

Photo: Roch Théroux

CIM community

Nouvelle approche des solutions RH à Québec Mines 2012 A fresh take on HR solutions at Québec Mines 2012 Par/By Luc Charbonneau Le congrès Québec Mines, qui se déroulera au Centre des congrès de Québec du 26 au 29 novembre 2012, innove cette année en ajoutant à son programme un module portant sur un enjeu d’importance pour le secteur minier : le manque actuel et annoncé de maind’œuvre spécialisée. Le module Maillage, recrutement et ressources humaines vise à aider les compagnies à trouver des solutions pour pallier ce manque. Il permettra aux participants de mieux cerner les enjeux du marché du travail, de trouver des solutions concrètes à leurs difficultés de recrutement et de rencontrer des candidats potentiels. Les différentes activités de ce programme sont réparties sur les quatre jours du congrès. Au menu : des activités de maillage, comprenant un carrefour de l’emploi et des carrières, ainsi qu’une foire d’affaires, des ateliers et des conférences.

The 2012 Québec Mines conference, which will take place at the Quebec City Convention Centre from November 26 to 29, is innovating with a module on an important issue for the mining sector: the current and projected shortage of skilled labour. The module Networking, Recruitment, and Human Resources aims to help companies find solutions to make up for this shortage. It will help participants better identify job market issues, find concrete solutions to their recruitment problems and meet potential candidates for recruitment. The various activities are spread out over the four days of the conference. On the menu are networking activities, including a job and career fair, a business fair, workshops and lectures.

Activités de maillage Les activités de maillage prévues au programme de Québec Mines permettront des échanges entre les acteurs de l’industrie minière et les chercheurs d’emplois ainsi qu’avec les diverses organisations en mesure de les soutenir dans leurs démarches. Ainsi, le Comité sectoriel de main-d’œuvre de l’industrie des mines, l’Institut national des mines et Québec International organisent un carrefour de l’emploi et des carrières pour les chercheurs d’emploi et les employeurs potentiels. La Chambre de commerce et d’industrie de Québec organisera une foire d’affaires pour mettre en contact les entreprises de la région de Québec et celles du secteur minier.

Networking activities The networking activities will facilitate interactions between decision-makers in the mining industry, job seekers and support organizations that serve the mining industry. The Comité sectoriel de main-d’œuvre de l’industrie des mines, Quebec’s Institut national des mines and Québec International are organizing a job and career fair for job seekers and potential employers. The Quebec City Chamber of Commerce and Industry will organize a business fair to facilitate communication between businesses from Quebec City and surrounding areas, and businesses in the mining sector.

Carrefour de l’emploi et des carrières Ce carrefour regroupera, sous un grand chapiteau, une douzaine d’établissements d’enseignement (commissions scolaires, cégeps et universités) qui offrent des formations dans les différents métiers et 88 | CIM Magazine | Vol. 7, No. 6

Job and career fair The job and career fair will bring together over a dozen institutions of learning (school boards, general and vocational

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professions du secteur minier. Un service de réception des CV sera offert sur place pendant la durée du congrès. Ces CV seront distribués aux compagnies intéressées par ce service spontané. Des conférences s’adressant aux chercheurs d’emploi seront également offertes. Elles traiteront de la rédaction d’un CV percutant et présenteront un bilan des métiers et des professions les plus en demande dans le grand secteur des géosciences et de l’industrie minière.

colleges and universities) that offer training in various trades and professions of the mining sector, under one roof. An application drop-off centre will be available on site throughout the conference. CVs dropped off at the centre will be distributed to companies interested in this service. Lectures on topics like how to write an effective CV, and a summary of the most in-demand trades and professions in the sector of the geosciences and the mining industry will be presented.

Foire d’affaires La foire d’affaires de Québec Mines rassemblera les marchés privés et publics avec les entreprises régionales qui fournissent des biens et des services. Selon le principe du « réseautage express », elle offrira l’occasion aux entreprises régionales participantes de devenir des fournisseurs potentiels des grands donneurs d’ordres actifs au cœur du Plan Nord et des grands projets miniers du Québec. À l’inverse, elle procurera aux grands donneurs d’ordres l’occasion de découvrir de nouveaux fournisseurs.

Business fair The Québec Mines business fair will bring public and private markets together with companies providing goods and services in the region. Following a model of “express networking,” the business fair will offer participating regional businesses the opportunity to sign on as potential suppliers to those awarding major contracts as a part of Plan Nord and other major mining projects in the province. The event will also provide contractors an opportunity to discover new suppliers.

Ateliers et conférences Le module Maillage, recrutement et ressources humaines comporte près d’une vingtaine d’ateliers et de conférences portant sur le recrutement et les ressources humaines et axés sur la recherche de solutions aux problèmes de l’industrie en ressources humaines. Le contenu, présenté par des conférenciers experts, abordera la réalité du secteur minier sous divers angles. Plusieurs conférences et présentations interactives brosseront un portrait de la main-d’œuvre présentement et bientôt disponible, faisant notamment le bilan des diplômés du Québec qui entreront à court terme sur le marché du travail. D’autres présenteront un éventail des différentes formations existantes adaptées aux besoins de l’industrie minière. Une conférence et deux ateliers permettront d’obtenir des réponses aux questions qui préoccupent les entreprises en matière d’attraction et de rétention de la main-d’œuvre. Au programme : l’utilisation des nouvelles technologies et les stratégies à employer pour attirer de futurs employés et communiquer avec eux. Les moyens de séduire et de fidéliser une main-d’œuvre répartie entre les générations X, Y et C et les baby-boomers seront également étudiés. De plus, des conférenciers internationaux mettront en lumière les bassins de main-d’œuvre disponibles à l’échelle mondiale et présenteront des outils novateurs pour aider l’industrie minière dans la recherche d’une main-d’œuvre expérimentée. ICM

Workshops and lectures

Luc Charbonneau est directeur de l’information géologique, Ministère des Ressources naturelles et de la Faune du Québec.

Luc Charbonneau is director of the Department of Geological Information at Quebec’s Ministry of Natural Resources and Wildlife.

The module also includes a score of workshops and lectures on recruitment and human resources that will focus on finding solutions to the industry’s human resource problems. The content, presented by expert speakers, will address the realities of the mining sector from diverse perspectives. Interactive presentations and lectures will draw a portrait of the labour force now and in the near future, including providing a summary of newly qualified Quebecers who will soon be entering the job market. Other presentations will detail a wide array of training programs adapted to the needs of the mining industry. One lecture and two workshops will provide answers for businesses concerned with the problem of how to attract and retain qualified candidates. On the program is the use of new technologies and strategies to attract and communicate with future employees. Methods for attracting and retaining candidates from generations X, Y, and C, as well as baby boomers, will also be examined. In addition, international speakers will describe the current state of labour pools available worldwide and will present sophisticated tools to help mining industry representatives find experienced workers. CIM

Découvrez le programme complet de Québec Mines sur le site

Discover www.QuebecMines.mrnf.gouv.qc.ca the complete Québec Mines program at www.QuebecMines.mrnf.gouv.qc.ca/ english/index.asp September/October 2012 | 89

CIM community

Des mines et des hommes L’histoire minière du Québec revue et mise à jour Par Luc Charbonneau

En 1989, le professeur du Département d’histoire de l’Université Laval, Marc Vallières, a publié un ouvrage sur l’histoire minière du Québec intitulé Des mines et des hommes : Histoire de l’industrie minérale québécoise, des origines au début des années 1980. Ce livre de 400 pages constitue la première synthèse historique de la contribution de l’industrie minière à l’économie et à la société québécoise. L’auteur y aborde l’exploration et l’exploitation minières, de même que leurs retombées sociales dans le monde du travail et dans le développement des régions et des localités touchées. L’accent est mis sur le rôle de divers acteurs dans le développement de l’industrie : intervenants gouvernementaux, entreprises minières, prospecteurs, géologues, ingénieurs miniers, mineurs, autres travailleurs et habitants des villes et des villages avoisinants. Une nouvelle édition de ce document historique sera lancée en 2012, à l’occasion du congrès Québec Mines. Le nouveau texte aborde les mêmes thèmes tout en actualisant le contenu, incorporant les recherches des trente dernières années. Il met à

jour jusqu’en 2012 l’histoire d’une industrie qui a affronté de grands défis dans plusieurs domaines et qui a connu, depuis le milieu de la décennie 2000, une croissance remarquable à la faveur d’une hausse marquée des prix et de la demande. Récemment, le contexte de l’industrie a changé au point où les considérations environnementales, les relations communautaires et l’acceptation sociale des projets jouent un rôle déterminant dans leur réalisation. Un regard sur le passé d’une industrie parfois controversée permettra, souhaitons-le, de cerner les enjeux de son développement futur. La thématique de Québec Mines 2012 – Des mines et des hommes, un thème à dimension humaine – s‘inspire de cet ouvrage historique. Elle met en relief la relation entre l’évolution de l’être humain et le développement minier et, plus spécifiquement, la relation historique entre les Québécois et les mines, d’hier à aujourd’hui et d’aujourd’hui à demain. ICM

26 au 29 novembre CENTRE DES CONGRÈS DE QUÉBEC

Québec Mines, le Carrefour des géosciences et des ressources minérales, présente : Plus de 80 conférences et ateliers Deux pistes en parallèle

s s acteur e d s u o nier ez-v Le rend loppement mi es Des min e – du déve s 2012 – in

e a ébec Min dimension hum e de Qu à m e l’humain è e m è th d e L es, un th ntre l’évolution m m iale, o h on e on spéc et des f la relati t, de faç e e li r mines re ie s n in le e met écois, ment m b e é u p p Q lo s e le ier et le dév istorique entre inier, d’h nh ement m la relatio rs du développ . in teu i à dema et les ac ui, d’aujourd’hu ’h à aujourd

Un module recrutement et ressources humaines adapté au secteur minier

PRIMEUR

Des activités de maillage programmées entre entreprises et chercheurs d’emploi, fournisseurs et établissements d’enseignement Plus de 300 exposants commerciaux, gouvernementaux et géoscientiﬁques Québec Mines pour tous, un volet éducation, emploi et grand public d’envergure Plus de 2500 participants sont attendus Inscrivez-vous avant le 16 octobre 2012 pour proﬁter du tarif préférentiel! QuebecMines.mrnf.gouv.qc.ca/inscription.asp

POUR NE RIEN MANQUER Suivez-nous sur Facebook www.facebook.com/QuebecMines

90 | CIM Magazine | Vol. 7, No. 6

Visitez notre site Internet www.QuebecMines.mrnf.gouv.qc.ca

CIM community Distinguished Lecturer

Constant change Tony Eltringham shares insights from four decades in copper mining By Alexandra Lopez-Pacheco

Fresh out of Cambridge University’s physics program, George Anthony Eltringham’s first job in mining was in the Zambian Copperbelt. From there, he went on to build a 40-year career, spanning a wide range of operations and involving all levels of the value chain. In the last decade of his career, he was sought out by BHP Billiton as a troubleshooter, “helping to solve problems by learning to think differently and helping others see problems in a different frame,” he says. In 2009, he retired with plans to write a book, but four days later, the company phoned him to do some consulting work. He has been busy working as a consultant for a number of companies around the world ever since. Eltringham’s breadth and depth of experience has given him unique perspectives to bring to audiences as he explores “Four decades, four continents, four copper operations – a personal perspective on constraints” in his CIM Distinguished Lecturer presentation. CIM: That is an interesting title, and a lot of ground to cover. Can you give us an overview of what you will be discussing? Eltringham: I will be using four different copper operations on four continents as

examples of the changes in thinking and approaches the industry has developed over the past 40 years. When I started my career in Zambia in the late 1960s, the country was one of the largest copper producers in the world but had only been so for 35 years. I saw a very young producing area, where technology had been applied pretty rigorously to enable it to catch up with the rest of the world. The example I reference for the second decade is Kennecott, Utah Copper’s Bingham Canyon copper operation near Salt Lake City. That mine had been operating for 70 years and had changed smelter technologies four times in 30 years. So, in that case, technology was used to update the operation to comply with new environmental laws. The third decade highlights the example of the Chilean discovery of Escondida, the first large mine to be developed in Chile after the country nationalized mining in 1971. The spotlight then turns to the story of the Australian Olympic Dam operation, which was discovered by a very technologically driven company called Western Mining Corp.

The story of Olympic Dam illustrates that even in a country such as Australia, which encourages private development, a small-to-medium-sized company cannot develop a large find to the best financial advantage on its own. Even a big company such as BHP, which bought out that mine in 2005, will struggle if the deposit is large. BHP is still trying to develop Olympic Dam to the size it wants it to be. Ironically, BHP now owns 57.5 per cent of Escondida, so they have learned about the benefits of partnerships but are unwilling to apply this knowledge to the Olympic Dam.

CIM: The first two decades seem to focus on thinking related to technology, but what about the third and fourth? Eltringham: In the Escondida example, a country had nationalized its copper mining industry, but in order to continue growing the industry, it had to bring foreign companies back in, which Chile did with Utah International in the 1980s. Escondida has become the largest copper mine in the world but, to make it work, Chile had to develop partnerships with BHP and others. That isn’t something people in the 1960s and 1950s cared about much. Most back then wanted to be the sole owner and operator.

CIM: The title of your presentation also mentions you provide “a personal perspective on constraints.” Could you elaborate? Eltringham: In all companies there are constraints which limit the organization in maximizing its effectiveness. They are not just tangible constraints, like equipment or process restrictions, but can be policies, procedures, systems and operating practices. My runthrough of four decades in the industry showcases examples where identifying and removing constraints provided significant results and a deeper understanding of complex systems. CIM

CIM: You have a strong focus on alternative approaches to thinking. Why is “thinking differently” so critical? Eltringham: If you are going to achieve different results, you’re going to need different behaviours, and in order to have different behaviours, you have to think differently. Thinking differently is only achieved when we listen more generously to what people are telling us, especially to people with a new perspective or one that, up until that point, we haven’t always listened to.

September/October 2012 | 91

CIM community Obituaries

Obituaries Kenneth E. Eade became a member of CIM in 1952 and a life member in 1989. He died on February 10, 2011. T. L. Horsley became a member of CIM in 1955 and a life member in 1990. He died in 2012. Dr. Lisle Thomas Jory became a member of CIM in 1952 and a life member in 1989. He died on March 22, 2012. Torstein Amfinn Utigard became a member of CIM in 1998. He died on April 11, 2012. Christopher Gleeson became a member of CIM in 1969 and a life member in 2011. He died on May 19, 2012. Theo Lehner became a member of CIM in 1985. He died on June 17, 2012. Gordon French became a member of CIM in 1970 and a life member of CIM in 1999. He died on July 3, 2012.

CIM staff extend our sincere condolences. If you know of any CIM member who has recently passed away, send information to obits@cim.org. Going forward, extended tributes will be published in our online version at www.cim.org/magazine

92 | CIM Magazine | Vol. 7, No. 6

Anthony (Tony) Banks Tony was a wonderful, loveable man. He was my mentor the first time I was a consultant and remained a good friend always. He was a force in potash mining and (especially) processing. He was also a long-time and engaged member of CIM and received the CIM District Distinguished Services Award in 1977. Tony was born and raised in Nelson, BC. He attended Queen’s University where he graduated in 1958 with a B.Sc. in Mining Engineering, and went on to earn a B.Sc. in Metallurgical Engineering at the University of British Columbia in 1963. Following graduation, Tony started working at Cominco in Kimberly, BC. He became involved in the Cominco Potash project in Saskatoon in 1968. In 1979, Tony started a new career with Kilborn Engineering, which later became SNC-Lavelin. Back when I was chair of the CIM Saskatoon Branch, it was with Tony’s enthusiastic support. I would like to share with you an example of Tony’s management style: A few weeks after I started with Kilborn in Saskatoon, I collapsed in the office from blood loss from an ulcer I didn’t know I had. Luckily, I was found on the bathroom floor because I had collapsed against the door and a friend had to push my person across the floor to get the door open. After an ambulance ride to the hospital and two days of unstoppable bleeding, I had surgery on Christmas Eve. Tony arrived at my bedside on Boxing Day with a stack of about 10 of his favourite books for me to read. Tony retired in 2000, but continued his career as an independent consultant. His expertise was sought after both locally and abroad, specifically for projects in England, Germany, India Thailand, Brazil, Argentina, the Middle East and the United States. He died on July 15, 2012. Chuck Edwards, immediate past-president of CIM

*** Dr. S. Ramachandra (Ram) Rao I met Ram in early 1990 at the MetSoc board, where he was the chair of mineral science and engineering section, while I was chair of the MetSoc environment committee. I had the privilege of working with Ram to put together our first International Symposium in Waste Processing and Recycling in the Minerals and Metallurgical Industries, which took place in Edmonton in 1992. Ram’s strong leadership, sheer determination and tireless efforts were instrumental in the creation of a series of six symposia. MetSoc considers these symposia as among its most successful. Ram devoted himself to this series, becoming involved in all the symposia’s aspects and earned a reputation as a dedicated editor. Ram was an active researcher in the advancement of environmental science and engineering, and a great advocate of green technologies. He made a major contribution in the field of resource recovery from mine effluents and advanced micro device streams, and published extensively in this area of research. Ram was a very honest, principled and disciplined individual. He never hesitated to express his opinion in public, in board meetings or in question periods at conferences. He was very passionate about fairness and loathed injustice, and he had a great appreciation for people who worked hard. Ram went on to become a mentor of many students. He died on June 25, 2012. Laxman (Lucky) Amaratunga, professor at Laurentian University and CIM member

CIM community

MiHR explores the oil sands Mining in Sands provides another perspective on labour shortage By Martha Roberts

The emerging labour shortage, if not managed, could significantly impact both oil sands mining and the Canadian mining industry as a whole. The number of people employed in oil sands mining continues to increase, but recent labour market reports from the Petroleum HR Council predict a shortage of 2,000 surface mining and related workers in the oil sands by 2020. Furthermore, the Mining Industry Human Resources Council (MiHR) forecasts a need for more than 9,000 surface mining and related workers elsewhere in the Canadian mining industry over the same time period. This alarming need for workers not only creates a labour challenge for oil sands companies, it intensifies the strain on all Canadian mining employers. Employers have indicated that they cannot compete with the high wages, extensive benefits and rewards, and other employment perks offered by oil sands employers. Furthermore, fly in/fly out arrangements are drawing talent from as far away as Atlantic Canada to the oil sands. It is imperative that we consider workforce planning and labour market issues in the oil sands when addressing human resources issues across the domestic mining industry. In response, MiHR is collaborating on the Mining in Sands project with mining and oil sands employers. The project will create a demographic profile of

the oil sands mining workforce and determine the short-and long-term HR challenges and opportunities facing oil sands employers. In addition, the study will determine the type and extent of labour market pressures that the oil sands place on other mining stakeholders. Finally, the project members will identify the challenges in meeting current and future workforce needs felt by other industry employers as a result of oil sands employment activities, and they will examine proactive and crossindustry strategies to manage the looming labour challenges. A steering committee of industry volunteers and labour market experts at MiHR will govern the project. Activities

will include surveys, interviews, focus groups and consultation discussions with oil sands employers, as well as other mining employers impacted by labour pressures in the oil sands. Project activities will result in a comprehensive report on the mining labour market in the oil sands and its impact on the rest of the Canadian mining labour force. Finally, the group will develop an industry action plan through active consultation and facilitated discussions. A full report, as well as an industry action plan, is expected to be released in spring of 2013. To view previous labour market reports please visit www.mihr.ca or email research@mihr.ca. CIM

September/October 2012 | 93

HISTORICAL

metallurgy

The rush for gold: part 2 The gold rushes of Australia and New Zealand By Fathi Habashi

Location map of Dunedin, New Zealand

The Australian gold rushes began a few years after the 20, 1861. The deposit California Gold Rush. In 1851, prospector Edward Hamwas in a creek bed at mond Hargraves discovered gold near Bathurst, New South Gabriel’s Gully, close to the Wales. This initial discovery set the trend for what was to banks of the Tuapeka river. come: gold was found in Victoria at Ballarat just six months By Christmas of that year, after, followed by a discovery at Bendigo Creek. Gold was 14,000 prospectors were on then discovered in all the other Australian colonies. the Tuapeka and Waipori fields. Hargraves was born in Gosport, Hampshire, EngA second major discovery took land. He went to sea at 14 and arrived in Sydney in place in 1862, close to the mod1832. He worked on a property at Bathurst and, in ern town of Cromwell. By the end 1834, took up 100 acres near Wollongong. In of 1863, the rush was over, but 1839, he and his wife moved to East Gosford companies continued to mine the where he became an agent for a navigation alluvial gold. The company. A decade later, they sailed for number of miners California during the California Gold reached its maxiRush but his prospecting in Calimum – 18,000 – in fornia was not successful. The February 1864. geological similarities of the The city of Dunedin California goldfields to the reaped many of the benefits, Macquarie Valley in New briefly becoming New Dunedin South Wales inspired him Zealand’s largest town, even to return to NSW to though it had only been prospect. On February 12, founded in 1848. Many of 1851, Hargraves claimed to the city’s stately buildings have found gold near Bathurst, date from this period of prosat Ophir Valley, and the Ophir Township was later estab- perity. New Zealand’s first lished there. In 1853–54, Hargraves visited England and university, the University of Gabriel Read (1824-1894) was received by Queen Victoria. He published Australia and its Gold Escorting gold in Australia by Australian artist Tony Crago Fields in 1855. Gold was originally discovered in Australia in 1841, but local authorities did not want to let the largely convict population know for fear of creating chaos in the area and suppressed the news. For a while, Ballarat was the richest place on earth in terms of gold output. Gold was responsible for Melbourne’s growth to one of the great cities of the British Empire.

New Zealand Gabriel Read, an Australian who prospected for gold in both California and Victoria, Australia, discovered gold in New Zealand on May 94 | CIM Magazine | Vol. 7, No. 6

Courtesy of Combustion Air Pty., Perth

Australia

HISTORICAL

metallurgy An Australian gold coin to commemorate the discovery of gold

Otago, was founded in 1869 with wealth from the goldfields. However, the rapid decline in gold production from the mid-1860s on led to a drop in the region’s population. Gold was discovered in the Wakamarina river in Marlborough in 1862, and 6,000 miners flocked to the district. Although they found alluvial gold, there were no large deposits. Gold was also discovered at Okarito, Bruce Bay, around Charleston and along the Grey river in 1865. The west coast of South Island became the second-richest gold-bearing area of New Zealand after Otago, attracting miners from Victoria, Australia, where the gold rush was nearing its end. In 1867, more gold was discovered on the west coast but it was in quartz veins, so few miners had the capital to extract it. Some miners stayed on as workers for large mining companies that could fund the cost of processing gold found in quartz veins. After the main gold rush, miners began laboriously reworking the goldfields. In 1871, there were about 5,000 European miners remaining in the region. They were joined by thousands of Chinese miners whom the province invited to help rework the area. Attention turned to the gravel beds of the Clutha river, and miners worked it with a steam-powered dredge. In 1881, the Dunedin became the world’s first commercially successful gold dredge. The Dunedin continued operation until 1901. CIM

Suggested Reading F. Habashi, Gold. History, Metallurgy, Culture, Métallurgie Extractive Québec, Québec City 2009, 277 pages. Distributed by Laval University Bookstore “Zone”. www.zone.ul.ca

September/October 2012 | 95

CALL FOR PAPERS Submit your technical paper for peer review in the CIM Journal The CIM Journal is a leading multidisciplinary publication of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM). Now in its third year and published quarterly in full colour, the CIM Journal has become a recognized international resource for high-quality scientific and engineering papers, covering all facets of the mining and minerals industry, such as geology, mining, processing, maintenance, environmental protection, reclamation, mineral economics, corporate responsibility and project management.

Subscriptions to CIM Journal are included for regular CIM members. Visit www.cim.org for non-member and library subscriptions.

For more information on how to submit your paper or to order a technical paper, visit www.cim.org.

TECHNICAL ABSTRACTS

CIM Overhead protection systems (OPS): some recent applications W. Roelofs, Minvent Solutions, Como, Australia, and M. C. Walton, RefMet, Prahran, Australia

journal

ABSTRACT In most cases, a refractory repair involves dealing with used refractory linings above shoulder height, defining these as overhead refractories. This paper details a method of personnel protection involving a low-pressure inflatable balloon system, installed to prevent the dislodgement and freefall of in-situ refractories. This system has been successfully applied to numerous types of vessels in the process industries in the last three to four years. This paper, prepared for the CIM Conference of Metallurgists held in Vancouver, British Columbia in October 2010, outlines details of the system and gives examples of successful applications. RÉSUMÉ Dans la plupart des cas, la réparation d’un réfractaire implique de travailler avec des revêtements réfractaires situés à une hauteur supérieure aux épaules; ils sont donc définis comme était des réfractaires en hauteur. Le présent article explique une méthode de protection personnelle qui comprend un système de ballons gonflables à basse pression installé pour empêcher le délogement et la chute des réfractaires in situ. Ce système a été utilisé avec succès dans de nombreux types de vaisseaux des industries de traitement au cours des 3 à 4 dernières années. Cet article, préparé pour la Conférence des métallurgistes de l’ICM à Vancouver, Colombie-Britannique, en octobre 2010, donne des détails sur le système et des exemples d’applications réussies.

Using passive seismic to evaluate surface equipment braking performance T. G. Joseph, Alberta Equipment – Ground Interactions Syndicate, Edmonton, AB, and M. J. Bolster, Worley Parsons (CoSyn) Consultants, Edmonton, AB

ABSTRACT This paper explores passive seismic measurement as an alternative, nonintrusive approach to conducting annual brake testing on surface mine sites. Dictated by the test site location, this evaluation adhered to the brake testing procedure as per British Columbia occupational health and safety regulations. Results showed excellent correlation to those reported via conventional practice: Comparing stopping distance, time, and velocity for the proposed instantaneous passive seismic versus conventional approaches, less than a 0.5% variance was evident. A viable alternative, the passive seismic approach, allowed an entire fleet of trucks to be sequentially evaluated for annual brake testing without disrupting operations by installing mechanical testing equipment. RÉSUMÉ Le présent article étudie les mesures sismiques passives en tant qu’approche alternative, non intrusive, pour effectuer les essais annuels de freins à des sites de mines à ciel ouvert. Selon l’endroit du site d’essai, cette évaluation suivait la procédure de vérification des freins tel que stipulé dans les règlements sur la santé et la sécurité au travail de la Colombie-Britannique. Les résultats montrent une excellente corrélation aux essais obtenus par la pratique conventionnelle : la comparaison des distances de freinage, de la vitesse et du temps obtenus par l’approche sismique passive instantanée proposée par rapport aux valeurs obtenues par l’approche conventionnelle; une variance inférieure à 0,5 % était évidente. L’approche sismique passive, une autre solution pratique, a permis d’évaluer toute une flotte de camions, les uns après les autres, pour les essais annuels de freinage sans perturber les opérations par l’installation d’équipements d’essais.

Excerpts taken from abstracts in CIM Journal, Vol. 3, No. 3. To subscribe, to submit a paper or to be a peer reviewer—www.cim.org

September/October 2012 | 97

TECHNICAL ABSTRACT

canadian metallurgical quarterly Effect of Different Cooling Rates on the Microstructure of Cu-Al-Fe alloy I. Cenoz, Department of Mech. Eng., Energy and Materials, Public University of Navarre, Spain

ABSTRACT The phases obtained in copper aluminium bronze alloy (Cu-Al10-Fe2) cast into a permanent die were investigated. The parameters examined were the pre-heating temperatures of the die and the graphite coating thickness. The phases a and g2 were detected as well as the metastable phases b¢ and g¢. The intermetallics of the system Fe-Al were obtained in various stoichiometric compositions. The different cooling rates of the casting resulted in two mechanisms of transformation to a grains out of the unstable b phase, one being nucleation and growth producing needle shaped a grains, the other exhibiting a massive transformation to spherical a grains. RÉSUMÉ On a étudié les phases obtenues dans l’alliage de cuivre aluminium bronze (Cu-Al10-Fe2) coulé dans un moule permanent. Les paramètres examinés incluaient les températures de préchauffage du moule et l’épaisseur du revêtement de graphite. On a détecté les phases a et g2 ainsi que les phases métastables b¢ et g¢. On a obtenu les composés intermétalliques du système Fe-Al sous des compositions stoechiométriques variées. Les différentes vitesses de refroidissement du moulage ont résulté en deux mécanismes de transformation en grains a à partir de la phase b instable, l’un étant la nucléation et la croissance produisant des grains a en forme d’aiguille, l’autre exhibant une transformation massive en grains a sphériques.

Formation Mechanism of IDZ During Coating of IN738 by Single Step Gas Phase Aluminizing H. Rafieea*, S. Rastegaria, H. Arabib of Metallurgy and Materials Engineering, Iran University of Science and Technology (IUST), Narmak, Tehran, Iran b Center of Excellence for Advanced Materials Processing (CEAMP), School of Metallurgy and Materials Engineering, IUST, Tehran, Iran a School

ABSTRACT Formation mechanism of interdiffusion zone (IDZ) during gas phase aluminizing of nickel base superalloy IN738LC and also the effects of temperature and Al-activity on microstructure of IDZ were investigated in this research. For this purpose a single step gas phase aluminizing technique was applied for coating the surfaces of IN738LC specimens at two different processing temperatures (i.e. 850ºC and 1050ºC) and various pack compositions. Then the coating microstructures were evaluated using scanning electron microscope (SEM), EDS and XRD techniques. The results showed that at low temperature, coating were formed by inward diffusion of Al; whereas at high temperature both outward diffusion of Ni and inward diffusion of Al occurred, resulted in the formation of a columnar structure or interdiffusion zone (IDZ). By increasing Alactivity in the powder mixture, it is shown that the amount of Al within the inner layer of the coating increased. RÉSUMÉ Au cours de cette recherche, on a étudié le mécanisme de formation de la zone d’interdiffusion (IDZ) lors de la calorisation en phase gazeuse du superalliage à base de nickel, IN738LC ainsi que les effets de la température et de l’activité de l’Al sur la microstructure de l’IDZ. Dans ce dessein, on a appliqué une technique de calorisation en phase gazeuse à étape unique pour revêtir les surfaces des échantillons d’IN738LC à deux températures différentes de traitement (i.e. 850°C et 1050°C) et avec diverses compositions de poudre. Ensuite, on a évalué les microstructures du revêtement en utilisant les techniques du microscope électronique à balayage (SEM), de l’EDS et de l’XRD. Les résultats ont montré qu’à basse température, le revêtement était formé par diffusion de l’Al vers l’intérieur alors qu’à haute température, tant la diffusion du Ni vers l’extérieur que la diffusion de l’Al vers l’intérieur se produisaient, résultant en la formation d’une structure en colonnes ou zone d’interdiffusion (IDZ). En augmentant l’activité de l’Al dans le mélange en poudre, on montre que la quantité d’Al à l’intérieur de la couche interne du revêtement augmentait.

Excerpts taken from abstracts in CMQ, Vol. 50, No. 1. Subscribe—www.cmq-online.ca

98 | CIM Magazine | Vol. 7, No. 6

INNOVATION SHOWCASE

KLOHN CRIPPEN BERGER Klohn Crippen Berger (KCB) provides engineering, geosciences and environmental solutions for global mining projects globally from strategic locations in Canada, Australia, Peru and England. Innovative solutions are realized through integrated professional teams pragmatically tackling challenges faced by mining companies. Thinking outside the box while being aware of the obvious leads to solutions, such as the STP Wetlands, an award-winning wetland solution in Alberta’s oil sands. By mimicking nature, utilising natural landscapes, and applying sound engineering and environmental design to a river diversion and environmental compensation challenge, KCB developed a sustainable wetland system providing operational water diversion, environmental compensation, and a landscape for closure at half the construction cost of previous project concepts. Whether its tailings or mine waste, pit dewatering or water supply, environmental assessment or mine closure, our experienced teams bring a fresh approach to your old and new challenges, optimising resources and reducing costs, hence increasing success.

NORSEMAN STRUCTURES Norseman Structures in the mining industry www.norsemanstructures.com The mining and exploration industry understands and values the need for engineered products, quality manufacturing, on-time and on-schedule projects, and a strong safety philosophy and record. Designed for industrial use in mind, Norseman Structures’ buildings accommodate needs for large entrance ways, straight sidewalls, height requirements, the ability to relocate the structure, and customized building access. Our structures provide massive open work space for mining equipment and maintenance, storage of equipment and commodities, and warehousing. The F-Series building is the premier wide-span engineered building solution for industrial operations. This model is designed for large-scale operations requiring clear-span indoor space. The 18-foot high straight side wall design allows for side overhead door openings, metal cladding on end and side walls, as well as the ability to store oversized items and materials against walls with maximum clearance. The F-Series is available in widths from 70 feet to 130 feet and can be manufactured to any length.

ADROK Adrok uses advanced Atomic Dielectric Resonance (ADR) technology to supply pioneering geophysical services for the location, identification, mapping and exploration of subsurface natural resources. The ADR Scanner is used for detecting and analyzing the electromagnetic radiation absorbed or emitted by a substance. This accurate method offers clients a better understanding of the shape and contents of materials examined. Within the oil and gas, and mining sectors, substances can be identified and quantified before extraction. The ADR scanner penetrates both soft and hard rock, allowing higher resolution geological mapping, and can easily be used with a boat, plane, helicopter or truck for all-terrain exploration. The technology can also be used to develop new reserves and monitor producing fields. Adrok has established a client-validated track record of locating coal seams in the ground at depths up to 1,000 metres from the surface. www.adrokgroup.com September/October 2012 | 99

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100 | CIM Magazine | Vol. 7, No. 6

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IN THE NEXT ISSUE From Ontario’s Ring of Fire to Quebec’s extreme north, we explore the mineral potential of some of Canada’s most promising mining regions

FEATURE We survey the rich but challenging terrain of Ontario’s Ring of Fire

PROJECT PROFILE Noront Resource’s Eagle’s Nest mine development SPECIAL REPORT A close look at the current and future developments in Quebec

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September/October 2012 | 101

Sidney Ells: pioneer of oil sands research by Correy Baldwin

Provincial Archives of Alberta (A12023)

hen World War I began in 1914, a young mining tute of Industrial Research in Pittsburgh, Pennsylvania, engineer at the Geological Survey of Canada where he and other engineers and scientists came up with a (GSC) was informed that, due to the importance separation process using hot water combined with acidic or of his current work, he would not be allowed to enlist in the alkaline reagents to strip the bitumen off the finer particles. army. Sidney Ells had been overseeIt was the beginning of the process still ing a study of the Athabasca oil in use today. sands, and the Canadian governElls’ work was uninterrupted until ment was on the hunt for an oil supApril 1917, when he was finally sent to ply to sustain the war effort. the war. After receiving news of his A year earlier, Ells explored the upcoming departure, he had little time Athabasca region to assess the potento compile his research findings and tial of the oil sands. He had set out quickly wrote a sprawling, two-volume north, up the Athabasca River from report. Athabasca Landing, with a crew of Ells did not serve on the front lines three and a Native guide. Over the but as an engineering instructor at the next three months they surveyed Khaki University, an educational serv300 kilometres of wilderness frontice the Canadian Army set up overseas age along the Athabasca and its tribto teach demobilizing troops. utaries, studying 247 outcroppings Karl Clark, a young GSC engineer, and taking 200 core samples using reviewed and evaluated Ells’ work hand augers. while he was away. Clark waded In September, a 22-man crew through Ells’ unwieldy report and arrived to help pack and load the unorganized notes, and criticized them nine tonnes of core samples and haul heavily. They were, he said, a hopeless them back upstream. The return trip mess. Ells was removed from the projwas horrendously difficult, due in ect, and the portfolio was given to part to the 14 sets of rapids along Clark. Ells returned from the war to that stretch of river. It took 23 days, find his research discredited, and his with the men often working for 20 work taken over. straight hours. By the time Ells After the war, oil sands research arrived at Athabasca Landing, he was Dr. Sidney Ells at the Fort McMurray oil sands, 1928. was consolidated at the University of short 12 of his men – three had been Alberta, whose president, Dr. Henry injured and five had simply walked away. Tory, had also organized Khaki University. Tory fought to But for Ells, the effort had been worth it. He sent his sam- oversee oil sands research, and when the Canadian governples to Ottawa and wrote a glowing report about what he ment recommended Ells head up the research, Tory had found. The oil sands, he said, were ripe for large-scale refused, and instead offered the position to Clark. The GSC commercial development. Ells became a passionate advocate engineer picked up the mantle and saw oil sands research for oil sands research and ensured it became a priority for through another important stage. Ells, however, never the GSC. worked on the project again. CIM The next spring, entrepreneurs William Herron and Archibald Dingman discovered oil at Turner Valley, Alberta, thus taking pressure, and some interest, off the oil sands. But this did not last long. By August, Canada had joined Britain at war with Germany, and the Allies needed all the oil they could get. Ells stepped up his research and experiments to separate the bitumen. He took his work to the modern Mellon Insti102 | CIM Magazine | Vol. 7, No. 6

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