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20

CONTENTS|CONTENUCIM MAGAZINE | NOVEMBER | NOVEMBRE | 2013

NEWS 14 Industry at a glance 20 Against the current Ambitious Albertan crude

oil upgrading project hopes local refining will proveattractive by A. Livingstone

22 Regulators to join forces Collaborative Cana-dian securities regulator could help companies putmore money into projects by A. Reitman

24 At home away from home Study findsincreased communications and privacy importantto remote workers by D. Kaufman

TOOLS OF THE TRADE 10 The best in new technology Compiled by E. Moore

COLUMNS 26 MAC Economic Commentary Focused spending on mining innovation required by P. Gratton

28 Eye on Business Approaches to lowering mining’s cost curve by T. Struttmann

30 HR Outlook Why aren’t you meeting the HR components of your IBAs? by M. Sturk

32 Finance CIM developing production cost reporting best practices by G. Clow

34 Commodities The iron ore pricing roller coaster by P. Crowson

40

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

UPFRONT Iron ore

36 Heat seeking CSIRO technology aims to convert slag heat into useable energyby A. Lopez-Pacheco

38 Pelletization partners Vale and universities seek to perfect ball mill optimization by A. Lopez-Pacheco

40 Quebec’s iron-clad bond with ChinaBoth parties in iron ore business for thelong haul by P. Blin and A. Dion-Ortega

42 Amongst giants Partnerships sustainmomentum for Dean Journeaux of NewMillennium Iron by V. Danielson

November 2013 | 5

PROJECT PROFILE |PROFIL DE PROJET 53 Poised to compete Ontario Graphite is the first out of the gate in the renewed race to

bring a secure supply of flake graphite to the manufacturing sector by A. Lopez-Pacheco

57 Prêt à affronter la concurrence Ontario Graphite est la première société à intervenirdans la nouvelle course visant à garantir au secteur de la fabrication la sécurité de l’approvisionnement en graphite en paillettes par A. Lopez-Pacheco

53

FEATURE | ÉDITORIAL 44 No safety in numbers For millions who labour in artisanal and small-scale mines,

health and safety are still an afterthought, or worse. Can large-scale mining companieshelp? by C. Baldwin

49 Pas de sécurité en nombre Pour les millions de personnes travaillant dans desmines artisanales ou de petite taille, la santé et la sécurité passent souvent au secondrang, voire pire. Les grandes sociétés minières peuvent-elles aider ? par C. Baldwin

44 TECHNOLOGY Materials handling 59 In-pit innovation In-pit crushing and

conveying advances make the most ofincreased maneuverability and enhancedequipment monitoring by E. Moore

CIM COMMUNITY |LA COMMUNAUTÉ DE L’ICM 62 Solution mining Ideas, innovation and

experience feed the conversation at MEMO2013 by R. Bergen

64 A practised first impression IntroducingCSR into geology and engineering programswould benefit industry by C. Baldwin

TECHNICALABSTRACTS |RÉSUMÉSTECHNIQUES 71 CIM Journal 72 Canadian Metallurgical Quarterly

IN EVERY ISSUE 6 Editor’s letter 8 President’s notes Mot du président 73 Innovation Showcase

Product file 74 Mining Lore by R. Silke

46th ANNUAL

CANADIAN MINERAL PROCESSORSCONFERENCE

46e CONFÉRENCE ANNUELLE DESMINÉRALURGISTES DU CANADA

66

OTTAWA | JANUARY 21 – 24 JANVIER 2014

PROGRAM | PROGRAMME

Aman walking the trade show floor atthe recent Maintenance Engineering/Mine Operators (MEMO) Conference

in Kamloops, B.C., stopped at one of thebooths I was visiting and began to explain tothe exhibitor the ventilation monitoring issuehe was having at his operation, including thetime-consuming, ad hoc solution his teamhad come up with. He was looking for adevice that would resolve the problem. “Doyou think you could make something likethat,” he asked.

The technical program at this year’s eventprovided evidence that elegant and innovative solutions resulting fromsuch informal exchanges are not uncommon. Technical challenges likethese are neat in their proportions and the industry is adept at respond-ing to them. A solution built on past experience and technical expertisecan be offered.

And then there are questions where the terms of reference are stillbeing developed, and there are relatively few successful case studies todraw from. These are the circumstances when taking on the challengingrelationship between mining companies and artisanal and small-scaleminers (ASM). It is an area that Correy Baldwin explores in “No safety innumbers” (p. 44) where, for example, AngloGold Ashanti, working on itsGramalote project, is trying to find a workable solution with the localswho have mined the area that hosts the greenfield project for generations– and where two sides with vastly different priorities and tolerance forrisk must find some common ground. We ask how mining companiescan best negotiate their inevitable relationships with ASMs, and whetherthey can bring some of their expertise to bear in developing better prac-tices within this sector that represents the vast majority of the global min-ing workforce.

It is a contentious issue, and we are grateful to those in the industrywho volunteered their perspectives. Even within the editorial departmenthere, it stirred up controversy as we debated which cover image best rep-resented the story, and whether the one we chose was too abrasive.Ultimately, we reached a grudging consensus, which is not ideal, but, asthe voices in the cover story make clear, the issue is one for which we asan industry are less practised at providing elegant solutions.

Ryan Bergen,[email protected]

@Ryan_at_CIM_Mag


editor’s letter Editor-in-chief Ryan Bergen, [email protected] editor Angela Hamlyn, [email protected] editor Andrea Nichiporuk, [email protected]

Section editors Peter Braul, [email protected] Mathisen, [email protected]

Copy editor/Communications coordinator Zoë Koulouris, [email protected]

Web editor Nathan Hall, [email protected]

Web support Maria Olaguera, [email protected]

Contributors Correy Baldwin, Pierrick Blin, Graham Clow, PhillipCrowson, Vivian Danielson, Antoine Dion-Ortega, Pierre Gratton, DaveKaufman, Andrew Livingstone, Alexandra Lopez-Pacheco, EavanMoore, Anna Reitman, Ryan Silke, Thomas Struttmann, Melanie Sturk,Dinah Zeldin

Editorial advisory board Alicia Ferdinand, Garth Kirkham, Vic Pakalnis,Nathan Stubina

Translations Karen Rolland, SDL

Published 9 times a year by theCanadian Institute of Mining, Metallurgy and Petroleum 1250 – 3500 de Maisonneuve Blvd. WestWestmount, QC H3Z 3C1Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: [email protected]

Subscriptions Included in CIM membership ($174.00); Non-members (Canada),$220.00/yr (PE, MB, SK, AB, NT, NU, YT add $11.00 GST, BC add$26.40 HST, ON, NB, NL add $28.60 HST, QC add $32.95 GST +PST, NS add $33.00 HST) Non-Members USA and International:US$240.00/year. Single copies, $25.00.

Advertising SalesDovetail Communications Inc.30 East Beaver Creek Rd., Ste. 202Richmond Hill, Ontario L4B 1J2Tel.: 905.886.6640; Fax: 905.886.6615; www.dvtail.com Senior Account Executives 905.886.6641Janet Jeffery, [email protected], ext. 329Neal Young, [email protected], ext. 325Account Manager Tristan Cater, [email protected], ext. 326

This issue’s coverWomen pick through the waste rock dump of a cooperative artisanaland small-scale gold mine in southern Peru.Photograph: Valerian Mazataud / focuszero.com

Layout and design by Clò Communications Inc.www.clocommunications.com

Copyright©2013. All rights reserved.

ISSN 1718-4177. Publications Mail No. 09786. Postage paid at CPA Saint-Laurent, QC.

Dépôt légal: Bibliothèque nationale du Québec.The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.

Printed in Canada

In search of elegant solutions

president’s notes | mot du président

Il est temps de parler franchementCes dernières décennies, les porte-parole de l’industrie minière semblent particulièrement déplorer le fait

que nous ne nous appliquions pas assez à communiquer notre histoire. Ou plus précisément, ils pensent queles critiques à l’égard de ce secteur seraient sans doute moins virulentes si les gens réalisaient à quel point l’in-dustrie minière contribue à leurs modes de vie bien confortables. Enfin, beaucoup de membres de ce secteurse disent exaspérés de constater que personne ne comprend l’exploitation minière !

Nous arrivons toujours à la conclusion que nous ne communiquons pas très bien en tant que sociétés ouindustrie. Pourtant, lorsqu’on nous donne la possibilité de nous exprimer, en général en réponse à l’attaqued’un groupe de défense de l’environnement ou à un homme politique tentant de gagner les faveurs de l’in-dustrie ou de récolter des voix, nous rechignons à le faire et nous enfermons dans le silence.

L’industrie minière doit faire preuve de bien plus d’initiative et se montrer unifiée dans ses stratégies decommunication. Nous devons adopter des façons innovantes d’établir le contact avec la société. Dépassons cecadre où nous nous félicitons de fournir les matières premières pour des technologies indispensables tellesque les ordinateurs portables, les téléphones intelligents et les réseaux de communication. Mettons-les à profit.Nous devons déclarer au monde entier que nous disposons des technologies nécessaires pour construire,exploiter et fermer des mines sans nuire à l’écosystème dans son ensemble. Nous devons montrer que l’ex-ploitation minière génère des emplois et améliore les niveaux de qualification ainsi que la capacité au sein descommunautés et des nations. Nous devons rappeler aux gouvernements que les investissements liés à l’ex-ploitation minière multiplient d’une part le montant des taxes et des redevances qui leur sont versées grâceaux encouragements que nous accordons aux entreprises dérivées, et soutiennent d’autre part les entreprises.Nous devons convaincre les générations actuelles et futures qu’une carrière dans l’exploitation minière est uneoption moderne et intellectuellement complexe qui met à profit le meilleur des technologies innovantes etinformatiques, et qu’il s’agit d’un métier valorisant et intéressant.

Nous devons nous appliquer à communiquer tout cela. N’attendons plus pour raconter notre histoire. Lesrésultats vaudront la peine d’avoir investi autant de temps et d’argent et de s’être autant impliqués.

Robert SchaferCIM President | Président de l’ICM


It is time to speak upOver the past couple of decades one of the most common themes that I have heard from miningindustry spokespeople is that we need to do a better job of telling our story. Or, more specifi-cally, people would not be so critical of the industry if they only realized the contribution itmakes to their comfortable lifestyles. Lastly, I have heard some say, with a lot of exasperation,that people just do not understand mining!

We always conclude that we do not communicate well as corporations or as an industry. Yet,when the chance arises to tell our story, usually as a response to a challenge from a green advo-cacy group or a politician trying to curry favour and win votes, we shy away from the opportu-nity and remain silent.

The mining industry needs to be far more proactive and unified in its communications strate-gies. We need to adopt innovative ways to connect to society. Let us move beyond congratulat-ing ourselves for providing the base materials for indispensible technologies like laptops, smartphones and communication networks. Let us put them to good use. We need to tell the worldthat we have the technologies to build, operate and close mines without harming the greaterecosystem. We must show that mining is providing jobs and improving skill levels and capacityin communities and nations. We should let governments know that mining-related investmentsmultiply their tax and royalty proceeds through our stimulation of spin-off and support busi-nesses. We have to convince the current and coming generations that employment in mining ismodern, intellectually challenging, and uses the best of innovative, computer-driven technolo-gies, and is a rewarding and fun career.

We must do a better job of communicating all of this. Let us invest in telling our story. Theresults will be worth the time, dollars and commitment.


TOOLS OFTHE TRADE the best in new technology

◢ Project controlConstruction progress modules and the ability to transform a cost curve to a

cash flow curve by taking into consideration retention and delays in invoice

payments are among the new features of versions 3.3 and 3.4 of ARES’ Prism

G2 project management software. “You can go down to very small details of

each contract and follow the physical progress,” explains Jean-François

d’Entremont, project management software specialist at distributor Proji-

Contrôle. Also new is the ability to assign milestones at the engineering

accounts level. Overall, d’Entremont says, Prism is a highly configurable tool

for managing large

projects. It integrates

data from PC-based

scheduling software,

such as Primavera 6,

and cost estimate tools

into unique control

accounts. “We have

multi-user, multi-project,

enterprise-wide software

that will allow you to

streamline all your cost

processing to accelerate

the process of issuing

project reports,” he says.

◢ One-stop pit stopGo-Station fuel modules from SEI Industries Ltd. provide a controlled

environment to house fuel pumping, filtration, metering and dispensing equipment.

“In the past, if you couldn’t afford a custom unit, people would cobble together

their own systems, buying parts from a bunch of different vendors and then

building something in the field,” says Paul Reichard, remote site division manager.

The Go-Station is built from an existing, configurable design. Reichard says the

40-foot insulated freight container can be shipped by land, sea or air more quickly

than custom units. An onboard electrical room holds explosion-proof controls, and

roll-up doors give access to dispensing units. Fuel tanks are not included; SEI sells

collapsible bladder tanks separately. A 20-foot model is in the works.

◢ Standardizedspring

Rather than making a custom

drawing and waiting one or

two days for a manufacturer to

send back pricing information,

Cowan Dynamics customers

can price out spring return

pneumatic valve actuators

online. This is possible

because the company’s new

AS Series of actuators is the

first in the industry to be

available in a set range of

dimensions, according to

marketing vice-president Jean

Behara. “One of our goals

with the AS series was to make

the feasibility studies for

engineers that much easier to

do because they have the

information at their fingertips

now,” says Behara. The

standard sizes also reduce

manufacturing and ordering

costs. Safety was incorporated

into the AS design, with the

spring contained inside a

sealed cylinder to protect

workers during servicing. Cour

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TOOLS OFTHE TRADE the best in new technology

Compiled by Eavan Moore

◢ Fast fusionFor mine sites that use large-diameter pipes to

transport water and tailings effluent, IPF-Plasson

has created a 30-inch electrofusion pipe coupling

that allows for a quick change-out. Unlike car-

sized butt fusion units, these polyethylene cylinders

have built-in wires that weld the coupling to the

pipe when electricity is passed through. Executive

vice-president Tim Tipton says the electrofusion

coupling method allows for quick pipe

maintenance in confined spaces. “You can dig

down, make a relatively small trench just big

enough for the fitting and a little bit of the pipe,”

he says. “You can cut out the section of pipe, slide

the fitting in, and fuse it together, and you’re back

to a full-pressure operating pipeline.” IPF-Plasson

is also developing 28- and 32-inch sizes.

◢ Fuel flexibilityFuelled by the gaping price difference between natural

gas and diesel, GFS Corp. has introduced the EVO-MT

8300 and 9300 – the first liquefied natural gas (LNG)

retrofitting kits for Komatsu electric-drive trucks. By fitting

some of their diesel-burning equipment with the LNG kits,

customers in regions with wide price differentials will

“save a ton of money,” says Kerry Hackney, director of

marketing. The EVO system uses diesel as the ignition

source but substitutes LNG for diesel at a rate of roughly

50 per cent while the truck is operating. GFS lets

customers trial the retrofit on several trucks without putting

in full LNG infrastructure immediately, but full

commitment has a rapid payback, according to Hackney.

He says Alpha Coal, a customer for its earlier Caterpillar

fuel retrofits, plans to expand the program after

experiencing substantial savings.

◢ Quick, collaborative modellingGeosoft has updated its Target for ArcGIS (TFA)

geological modelling tool to add wire-framing and the

ability to work with Esri file formats and three-

dimensional (3D) geosurface files across both Geosoft

and Esri platforms. “There is strong demand for 3D

workflows that make geological modelling faster and

more effective in the Esri environment,” says Steve

Randall, vice-president of marketing. “Geologists

working in Esri need to integrate and share results, and

using common formats makes collaboration a lot easier.”

Users of TFA 4.0 can build a 3D wireframe model by

clicking and joining features from two-dimensional

section interpretations, creating either closed or open

surfaces. Randall says another workflow feature allows

users to refresh their drill hole data as new holes are

added and quickly integrate them into the existing

interpretation.

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Anglo American tosses PebbleAfter spending hundreds of millions of dollars on the Peb-

ble project, Anglo American has decided to walk away fromthe massive copper-gold deposit, located 200 kilometressouth of Anchorage, Alaska. While a prefeasibility study isexpected later this year, the project has encountered strongopposition from some local environmental and aboriginalgroups that have concerns about the project’s potentialimpacts on water quality and local fish habitat. “Our focushas been to prioritize capital to projects with the highestvalue and lowest risks within our portfolio, and reduce thecapital required to sustain such projects during the pre-approval phases of development as part of a more effective,value-driven capital allocation model,” said Mark Cutifani,Anglo American CEO, in a release. The company announcedit expects to take a $300-million writedown due to this deci-sion at the end of the year.

Anglo American Pebble, a wholly owned subsidiary ofLondon-based Anglo American and a 50 per cent joint ven-ture partner in the Pebble project with Northern DynastyMinerals, had spent roughly $541 million in explorationwork on the proposed open pit project since it became apartner in July 2007. It has also spent around $150 millionon environmental and socio-economic work to support itsproject development plans. With Anglo American’s move,Northern Dynasty, which took over the project in 2001, willnow become Pebble’s sole proprietor. Pebble contains aMeasured and Indicated Resource of 5.94 billion tonnes,containing 55 billion pounds of copper, 67 million goldounces and 3.3 billion pounds of molybdenum. FollowingAnglo American’s exit, Northern Dynasty announced itsintentions to move forward with the project and potentiallyseek a new partner. – Herb Mathisen

Outlook for Rosia Montana permits gets rosier

Share prices of TSX-listed Gabriel Resources Ltd. haverecovered from their low of 41 cents on September 9, whichfollowed reports that the Romanian Parliament was suspend-ing reviews of draft legislation required for the company’sRosia Montana project to proceed. The legislation is nowunder review by a special committee, and Gabriel’s shareshovered above 80 cents in October.

Rosia Montana, a world-class gold and silver project,could be one of the biggest gold mines in Europe, with areported Measured and Indicated Resource of 17.1 millionounces of gold and 81.1 million ounces of silver. Gabrielowns 80 per cent of the project, with the remainder held bya Romanian state-owned enterprise. The company estimatesthe project will contribute more than US$24 billion to Roma-nia’s gross domestic product (GDP) over its lifetime and gen-erate thousands of jobs.

Protests held in Bucharest, in September, opposed thecompany’s plans to change the topography of the mountain-ous site, and to use cyanide in the extraction process. Local

news | industry at a glance

November 2013 | 15

miners have come out in support of theproject though, and Prime MinisterVictor Ponta said Romania has a dutyto benefit from its natural resources.

The committee may conduct sitevisits and invite representatives frominterested parties, including NGOs, toparticipate in the review process. It willprovide a recommendation to the Sen-ate, with a final decision expected inearly November. – Dinah Zeldin

Gibraltar celebratescompleted expansion

In September, Taseko’s Gibraltarmine hosted 600 guests for a grandopening of its new standalone concen-trator, the cornerstone of the project’sthird expansion phase. At a cost of $235million, the new concentrator – com-missioned in January and having startedproduction in April – will increasethroughput capacity at the B.C. copper-molybdenum mine by 30,000 shorttons per day. As a result of this expan-sion, Taseko has hired around 150 newemployees at the Cariboo-region mine.“Most of these positions are operationsand main tenance-[related],” BrianBergot, investor relations director. “Theywere hired to operate the new facility aswell as the new mining equipment tofeed the concentrator.” As part of its$325-million expansion, the company

also spent $90 million on a new fleet ofhaul trucks and a new mining shovel.Since the new standalone concentratorbegan operation in April, Taseko hasbeen steadily ramping up production tofull capacity and saw a 21 per cent pro-duction increase in the second quarterof this year from the previous quarter.“We expect continued increases until weachieve the new design capacity of bothconcentrators of 85,000 tons per day,”Bergot said.

– H.M.

Mick Davis to turn mining’slemons to lemonade

Former Xstrata CEO Mick Davis hassecured $1 billion in private fundingfor a new mining venture, X2Resources. Davis plans to create a mid-tier diversified mining and metalsgroup through the acquisition anddevelopment of unwanted andorphaned assets.

X2 will aim to acquire projectsdropped by majors looking to tightenspending in response to low commod-ity prices, as well as operations aban-doned by smaller firms that have runout of money. The company plans tofocus on commodities like copper, zincand nickel that remain in demand.

The company received US$500 mil-lion each from Noble Group, a Hong

Kong-based global supply chain man-ager, and Texas Pacific Group, a U.S.-based private investment firm. The X2team includes former Xstrata CFOTrevor Reid and four other formerXstrata executives. Financial advice isbeing provided by Goldman Sachs.Operations will be based in Johannes-burg, South Africa. – D.Z.

Diamond, coal miners takegold

The team from N.W.T.’s Diavik dia-mond mine took top spot in the under-ground mine rescue competition forthe third straight time, while B.C.’sCoal Mountain Operations won on thesurface mining side at the WesternRegion Mine Rescue Competition heldin September in Fernie, B.C. In total,18 mine rescue teams from Alberta,British Columbia, Manitoba, North-west Territories, Saskatchewan, Yukonand Wyoming, U.S., participated in thebiennial event.

“Across Canada, all operating minesare required to have mine rescue,” saidAl Hoffman, B.C.’s chief inspector ofmines. “Local fire department, ambu-lance and other emergency respondersare generally some distance away [frommine sites] and they don’t have theexpertise to deal with mining [inci-dents.]” Mine rescue participants are

industry at a glance | news


required to be First Aid-certified andalso to have completed – and regularlymaintained – necessary mine rescuetraining. Hoffman said while the com-petition, which includes written, firstaid and search events, provides minerescue workers with esprit de corpsand builds camaraderie amongst andwithin teams, it also serves more prag-matic purposes. It allows regulators toevaluate each team’s mine rescue skillswhile also ensuring they comply withrecognized standard methodologiesand communications methods. Forinstance, if a mine rescue team was totravel to another operation to provideassistance, it would want to use thesame techniques and communicationsmethods as the local mine rescue teamsso that they could operate togethersmoothly. – H.M.

Feds make aboriginal andtreaty lands web portalpublic

Aboriginal Affairs and NorthernDevelopment Canada (AANDC) haslaunched its Aboriginal and TreatyRights Information System (ATRIS), aninformation resource previously avail-able only to government employeesnow made public. The web-based map

tool lets users research the potentialand established land and treaty rightsof aboriginal groups across the country.The site informs users of each group’sspecific treaty information, local landrights and agreements and progress onland claims negotiations. When com-panies propose projects, Canada has aduty to consult First Nations, Métisand Inuit land rights holders about thepotential developmental effects ontheir traditional lands and, dependingon the circumstances, it may accom-modate them if there are impacts totheir lands.

“ATRIS provides access to informa-tion that will help governments, indus-try and other interested parties todetermine which aboriginal groupsthey may need to consult about theiractivities across Canada,” said EricaMeekes, AANDC press secretary,although she could not say how oftenthe site would be updated with newinformation. – H.M.

Renewable energy movesinto mining mainstream

“At the board level, green energyfeels better,” Ross Beaty told the crowdgathered for his keynote speech at Sep-tember’s Renewable Energy and Miningsummit in Toronto. Beaty, chairman ofboth Pan American Silver and AlterraPower Corp., speaks from experienceand his optimism was shared by thesmall, but focused, group of about 250conference-goers.

From Codelco’s recent forays intosolar power to Rio Tinto’s wind projectat the Diavik mine, there were plentyof real-world examples to prove whatseemed to be the theme of the event: itis not just possible, but profitable, touse renewable energy in many cases.

Rob Lydan, director of solar andwind at Hatch, addressed the need forpower reliability in his presentation: “Ifyou want to talk to the most conserva-tive group of people you’ve ever met,talk to people in utilities, and thesetechnologies are the same as the onesthey use. They are proven.”

And while most mining companyrepresentatives present were optimistic

towards the future of renewable energyon their sites, the majority expressed adesire to simply purchase energy andnot to build utilities themselves. Theonus was squarely put on renewableenergy proponents to offer power pur-chase agreements that are competitivewith conventional options.

– Peter Braul

Reed copper mine startsproduction

Initial production is underway atthe Reed copper mine, located 120kilometres east of Flin Flon, Manitoba.The 1,300-tonne-per-day undergroundmine, a $72-million Hudbay Mineralsand VMS Ventures joint venture, is ontime and on budget for full productionto start in early 2014.

VMS Ventures, which discovered thenear-surface deposit and owns 30 percent, reports that current activitiesinclude underground development ofthe mine, extracting and milling bulksamples, and fine-tuning the mill. Themine will be operated by Hudbay,which holds the remaining 70 per centstake in the project. According to ScottBrubacher, director of corporate com-munications at Hudbay, Reed will create75 jobs and has an estimated life of fiveyears. It also promises to have a limitedenvironmental footprint due to its prox-imity to the operator’s Flin Flon concen-trator. – D.Z.

First bulk carrier traversesNorthwest Passage

It finally happened. In September,the Danish bulk carrier Nordic Orion,loaded with coal, left Vancouver, andarrived in Pori, Finland, via the North-west Passage. Seamar Management, theoperator of the Nordic Orion, alsostarted shipping iron ore from Europeto China through the Northern SeaRoute, in Russia’s Arctic, in 2010.

For centuries, explorers have seenthe Northwest Passage as a potentiallyquicker way to transport goodsbetween Asia and Europe. But only rel-atively recently, due to the longer ice-free season, has the Arctic shipping


Cameco’s Key Lake surface mine rescue team, fromSaskatchewan, participates in a fire task at theWestern Region Mine Rescue Competition in Fernie,B.C., in September.

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corridor seemed a viable route. Sincethe SS Manhattan, an oil tanker thatwas retrofitted as an icebreaker, sailedthrough the Northwest Passage in1969, the marine route has also beenthe source of great debate. Canadaclaims sovereignty over what it callsinternal waters of the Canadian Arcticarchipelago, but Americans disputethis claim, stating the passage is subjectto international shipping rules.

Still, it is early days and it remainsto be seen whether shippers willincreasingly look to Canada’s North,plagued by minimal port, navigationaland search-and-rescue infrastructure,as an alternative shipping corridor.

– H.M.

Officials prevent TBoutbreak in Saskatchewan

Last summer, the Saskatoon HealthRegion notified Cameco Corporationthat a contract worker at its Cigar Lake

uranium mine in northernSaskatchewan had testedpositive for active tuber-culosis. The worker hadcontracted tuberculosis offsite. Public health workersbegan tracing his contacts,starting with the person’simmediate household andcontinuing with his work-place. The process identi-fied more than 100 peoplewho were potentiallyexposed but tested nega-tive for tuberculosis.

Tuberculosis is a rarecondition in Canada. Theactive, symptomatic form of the diseasehas an average prevalence of 4.7 casesper 100,000 people. JohnmarkOpondo, medical health officer for theSaskatoon Health Region, said theprovince has had only two prior casesof active tuberculosis in mining work-places in the last 10 to 15 years.

Carey Hyndman, senior communi-cations specialist at Cameco, said thecompany does not screen employeesfor any infectious diseases before orafter they arrive on site. Its preventionstrategy includes employing healthcare workers on site and inviting pub-lic health officials to do training on


Cameco and the Saskatchewan Health Region acted quickly to preventthe spread of tuberculosis after one of the miner’s Cigar Lake contractorstested positive for active tuberculosis last summer.

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sleeve-coughing, handwashing andother basic hygiene practices.

That cooperation is important,according to Opondo. He cited theH1N1 influenza pandemic of 2009 asan example. “Most mine sites workedwith their local public health on strat-egy,” he said. Mines partnered withlocal health authorities to plan how to

deal with immunizing workers againstthe flu or where to secure antiviraldrugs should they need them. “Evenduring the pandemic, I don’t think ourmining operations stalled, mainlybecause they were proactive in plan-ning,” he said. “I think it is reallystrategic for mines to always work withtheir local public health when it comes

to trying to plan around prevention ofany infectious disease.” – Eavan Moore

Baffinland decides to buildMary River

Following the successful negotiationof an impact and benefit agreementwith the Qikiqtani Inuit Association onSeptember 6, Baffinland’s brass offi-cially announced it would proceed withconstruction of its massive open pitMary River iron ore mine on northeastBaffin Island, Nunavut.

Since then, the company has com-pleted its summer sealift, shipping fueland cargo north with four ships fromValleyfield, Quebec, in order to supplythe mine during the winter. Baffinland,70-per-cent-owned by ArcelorMittaland 30-per-cent-held by Nunavut IronOre Holdings, decided last year tobuild the project in phases, rather thanbuild the entire mine at once, whichwould include constructing a railway150 kilometres to the south to connectto a yet-to-be-built port at SteensbyInlet.

The Mary River project has aresource of roughly 365 million tonnesof high-grade iron ore, which will beshipped directly to customers inEurope. The company expects to beginproduction in early 2015. – H.M.

Kinross opens fourth minein Russia

Kinross Gold Corporation’s $350-million Dvoinoye underground goldmine, located in Russia’s Chukotkaregion, began commercial productionin October, with CEO Paul Rollinsoncommending mine staff for reachingthe important milestone on time andon budget.

Dvoinoye, Kinross’ fourth mine inRussia, is located some 100 kilometresnorth of its Kupol mine. The mill atKupol has been expanded to accom-modate 3,500 to 4,500 tonnes per day,allowing it to add feed from theDvoinoye mine that will contribute upto 1,000 tonnes per day. The mine hasProven and Probable Resources of 1.1million gold ounces, and the company


November 2013 | 19

expects it to be profitable due to itshigh-grade ore, averaging 17.8 gramsper tonne. The estimated mine life isseven years.

According to Rollinson, the moder-ately sized, low-cost project “reflectsthe company’s focus on maximizingmargins and cash flow.” – D.Z.

Quebec funds LabradorTrough railway study

The government of Quebecannounced plans to invest $20 millionin a prefeasibility study for the con-struction of a third railway link fromthe Labrador Trough to the Sept-Ilesport. The announcement is good newsfor iron developers in the region, whowere left with limited transport optionsafter CN Rail suspended plans to investin a project earlier this year.

CN’s study was originally shelveddue to market volatility and uncertain-ties around the completion of iron ore

projects in the region. But with Cham-pion Iron Mines Ltd.’s ConsolidatedFire Lake North project slated to startproduction in 2016, and more projectsin the pipeline, a rail line will beneeded to transport iron ore to portsfor export to Asian consumers.


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Champion Iron CEO ThomasLarsen said the project will benefitmining companies, local communitiesand the province. “This type of mes-sage will further attract foreign invest-ment that is essential to turn theLabrador Trough into a more cost-effi-cient iron ore centre,” he said. – D.Z.

Cliffs elects new board director

Stephen M. Johnson became a director of the board at Cliffs Natural Resources Inc.Johnson, who is chairman and CEO of McDermott International Inc., is a member ofthe board’s audit committee and the governance and nominating committee. “Steveis a proven leader and brings forth exceptional experience with large internationalconstruction projects,” said James Kirsch, Cliffs’ chairman of the board. “Steve’sstrategic counsel will be important to our board as we execute future expansion andgrowth plans.” Past roles included director of project operations at Fluor Corporation,senior vice-president at Washington Group, and president and COO at McDermottInternational.

MOVING ON UP


Before North West RedwaterPartnership announced in Novem-ber 2012 its plan to move forwardwith Phase 1 of its Sturgeon refin-ery, expected to cost nearly $15billion, experts in the oil andenergy industry said buildingrefineries in Alberta was not eco-nomically viable. But the naysayersmay have to eat their words as theproject – set to become the first oilrefinery built in North America innearly three decades – begins con-struction.

North West Upgrading Inc. willpartner with Canadian NaturalResources Ltd. on the refinery,which will be built in three phases.The $5.7-billion first stage, whichofficially broke ground in Septem-ber and is scheduled to be com-pleted by late-2016, would see therefinery convert 50,000 barrels ofbitumen per day into low-sulphurdiesel. This diesel would help feedAlberta’s need for diesel and it wouldalso allow customers to send theupgraded product off to internationalmarkets. By its third stage, the refinerywill have the capacity to convert150,000 barrels of bitumen per day.

“The long-term factors were infavour of doing it here [rather] thandoing it on the Gulf Coast,” said IanMacGregor, chairman of North WestUpgrading, adding it will take about adecade to complete all three stages ofthe refinery. “Once people see it done,they’re going to wonder ‘Why aren’t wedoing this?’” The diesel produced at therefinery, located north of Edmonton,will be a mere 12 days from Asian mar-kets that rely heavily on imported fuels.India’s liquid fuel consumption, forinstance, was 42 per cent diesel in2012.

Steve Laut, president of CanadianNatural Resources, which will providebitumen to the refinery, said the projectgives the company the opportunity to

Against the currentAmbitious Albertan upgrading project hopes local refining will prove attractive

by Andrew Livingstone

increase the conversion capacity of itsproduct. “The structure allows for par-ticipation without any reduction in ourability to stay focused on developingour vast resource potential,” he said.

The Alberta government, whichreceives bitumen from oil sands opera-tions as royalties, will also play a majorpart in the project. The governmentwould provide at least 40,000 barrels ofbitumen per day for the next 30 years tobe upgraded. Estimates are the govern-ment will bring in around $500 millionannually on top of what it currentlymakes in royalties (the province rakedin $4.5 billion in royalties in 2011-12)over the next three decades.

Alberta Energy Minister Ken Hughesnotes the government has “a very realinterest in seeing as much value addedto our natural resources as we can.” Get-ting into the refining business “is achance to create more value for Albertaand Canada than if we just shipped theraw bitumen out of the country.”

Hughes cited NOVA Chemicals’ Jof-fre, Alberta facility, which processes nat-ural gas from the province, as anexample of maximizing opportunities inAlberta. It is now one of the largest eth-ylene and polyethylene productionplants in the world.

The Sturgeon refinery is more thanjust an opportunity to supply fuel to themarket, according to MacGregor. “It’s achance to bring good-paying jobs tothousands of people,” he said. Cur-rently, around 1,000 workers are on siteand, at the peak of construction, nearly8,000 workers are expected to beemployed.

MacGregor added that Sturgeon hasalso taken the environment into consid-eration with its design: “This is the firstrefinery in the world that incorporatesCO2 capture into the initial design. Thefacility will capture 1.2 million tonnesof CO2 per year per phase, which willbe sold for use in enhanced oil recoverybefore being sequestered.” CIM

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Construction has begun on Phase 1 of the Sturgeon refinery, illustrated here. It is set to become the first refinery built inCanada in nearly 30 years.

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Mining and investment groups areoptimistic that Canada’s recentlyannounced cooperative regulatoryregime will make accessing capitalmarkets more efficient for companies.

The framework agreement betweenBritish Columbia, Ontario, and theGovernment of Canada envisions “acommon regulator administering a sin-gle set of regulations designed to pro-tect investors, support efficient capitalmarkets and manage systemic risk,”according to Canada’s Finance Depart-ment.

Currently, an inter-jurisdictionalpassport system allows listed compa-nies automatic access to capital mar-kets in every other province andterritory, except Ontario, which

Regulators to join forcesCollaborative Canadian securities regulator could help companies put more money into projects

by Anna Reitman

accounts for about half of all Canadiansecurities’ market value and 80 percent of market activity. Access toOntario markets for non-Ontarian-listed companies must instead beapproved by the Ontario SecuritiesCommission (OSC). In general, minerswanting to raise money from Ontariohave to become reporting issuerslocally and in Ontario, which is thepriciest jurisdiction in Canada. More-over, prospectuses are examined bytwo regulators for approvals.

Gordon Keep, CEO at Fiore Man-agement and Advisory Corp. andmember of the working group thatadvised the B.C. finance minister dur-ing negotiations, said the existing pass-port system is efficient but Ontario’s

refusal to join is aproblem. Juniorminers “have beenhamstrung becausemost of the bigfunds are out ofOntario. Thebeauty of this sys-tem, if it is adheredto as per the frame-work agreement, isthat Ontario nolonger stands byitself,” he said.

The regulatorwill be headquar-tered in Torontoand led by anexpert board ofindependent direc-tors with oversightfrom a council ofministers from allparticipating juris-dictions. It will beself-funded by asingle set of feesand will have anoffice in each par-ticipating province.

PDAC is encouraged by the moveand will look to contribute to thedesign and implementation of anyfuture system as it takes shape. NadimKara, senior program director atPDAC, said there is a major opportu-nity for the new regulator to select thebest of what is currently workingacross Canada. Based on discussionswith PDAC members, he said there iswidespread support for how BritishColumbia deals with prospectusexemptions, for example.

“The B.C. model has some importantfeatures that help facilitate capital rais-ing,” Kara said. “Will the new regimeincorporate these or adopt the moreconservative OSC model? That is whatwe would like to see more clarity on.”

Regulatory changes to Canada’s cap-ital markets cannot come soon enough,he added. PDAC research shows thatfundraising for many junior companiesis dire. With more than 75 per cent ofTSXV-listed companies trading at orbelow 10 cents a share, some areengaged in desperation financing,sometimes for as little as $50,000.“Companies are financing just to paythe auditors,” Kara said. “There has gotto be a creative way to help companiesput more money into the groundinstead of into regulatory compliance.”

Ian Russell, president and CEO ofthe Investment Industry Association ofCanada (IIAC), believes that the coop-erative deal is attractive on severalfronts, including that it respects pro -vincial jurisdictions and strengthensenforcement of white-collar crime.

Specific to the mining industry, oneset of rules in the form of a uniformsecurities act is increasingly importantin an environment of private placementfinancings, and where shareholders aresolicited from across the country.

“Transactions, be they financingtransactions or restructurings, will movemore smoothly and cost- effectively from

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Horner has expressed concerns abouthow the national regulator might affectthe future of the province’s regional oiland gas market. The fact that BritishColumbia, which represents between15 and 20 per cent of Canadian securi-ties’ market value, is on board now mayprove significant for the agreement’ssuccess.

Federal Finance Minister Joe Fla-herty has extended an invitation to allprovinces and territories, and if otherjurisdictions do join, Keep saidOntario has to prove it is not demand-ing a Toronto-controlled solution. “Ifwe can get OSC to start acting as if it ispart of the passport system, that givesother provinces comfort that it is will-ing to have it be a truly national dia-logue,” he said. CIM

a regulatory standpoint,” said Russell,though he is not optimistic about anycost alleviations associated with regula-tory fees, at least in the short term.

He acknowledged concerns fromwithin the mining industry that Torontowill inevitably draw in the expertise andemployment from other provinces, butpointed out that Vancouver hasremained a junior mining hot spotdespite the venture stock exchangebeing headquartered in Toronto.

B.C. Finance Minister Michael deJong explained that, as designed, theframework will have a permanentdeputy chief regulator in Vancouver,who will, along with the rest of thenational management team, have astrong, leading role in the developmentof national policies.

“Day-to-day decisions affecting B.C.market participants will continue to bemade in British Columbia,” he said.“This cooperative approach will notonly benefit the B.C. securities industry,but it will also benefit Canada’s securi-ties industry by bringing our expertiseand regional perspective to the rest ofthe country through the nationally inte-grated executive management team.”

The move towards a national regula-tor in Canada has a history punctuatedby legal disputes, fought particularlyhard by Alberta, Quebec, and BritishColumbia, in the past. Among otherobjections to the proposed regulator,Quebec Finance Minister NicolasMarceau pointed out the potential dis-ruption to the existing passport system,and Alberta Finance Minister Doug


A recently releasedAustralian study haspegged privacy and accessto com mu nications as twoof the most important fac-tors in the long-term hap-piness of remote mineworkers.

Philipp Kirsch, one ofthe contributors to theUniversity of Queens-land’s Centre for SocialResponsibility in Miningstudy, said this data shedslight on how to improvethe experience for fly-in,fly-out employees. “Thereally key take-homemessage is that peoplewant to be able to be incommunication,” saidKirsch. “When they’re not at work theywant to be able to communicate withtheir friends and families wheneverthey feel like it.”

Kirsch stressed the importance ofwhat he calls “the 4 Ps”: privacy, per-sonal space, permanent communica-tion and peace. “You can have yourpersonal space in a shared room, butthese people really don’t want to sharea room,” he said.

The idea for the study came aboutwhen an Australian mining companywanted to know if there was any rela-tionship between the quality of itsaccommodations and its employees’commitment to stay at their jobs. Long-distance commuting employees, Kirschexplained, are non-resident workerswho travel some distance to work andsleep in temporary accommodationsduring their rotation.

The majority of the nearly 300 fly-in,fly-out workers surveyed said that, over-all, they were happy with the remoteworking lifestyle, and 75 per centreported they felt they were at a good orvery good level of mental and physicalhealth. But 60 per cent said their work

At home away from homeStudy finds increased communications and privacy important to remote workers

by Dave Kaufman

lifestyle has a negative effect on theirhome and family life.

One of the findings that surprisedKirsch most was that 44 per cent ofrespondents planned to change jobs inthe next 12 months, with a “desire forbetter pay, greater work-life balance, andcareer advancement.”

“These people are well paid, theyessentially are quite satisfied in theirjobs, but some of them still intend to tryto find something else,” said Kirsch.

To improve the living experience atGlencore’s Raglan nickel mine in north-ern Quebec, Marc Lucas, the operation’sHR manager, said the mine has made apoint of seeking feedback from workersabout camp life rather than waiting for it.

“We have had suggestion boxes in thepast but now actively encourage an opendialogue with HR or through the super-visory chain of command,” he said,adding a joint health and safety commit-tee tackles problems before they becomesignificant risks or irritants. He explainedthat management now holds formal andinformal meetings with both staff andunionized employees to hear from siteworkers. It has also formed staff and

union committees, respec-tively called ‘comité bonneentente’ and ‘comité organ-ization du travail,’ thateach meet eight times peryear to discuss issues thatcome up at the mine.

The mine’s living facili-ties have been the focus ofmany initiatives to ensurethe happiness of Raglan’sfly-in, fly-out staff. Forinstance, the only peoplewho share rooms at theirliving facilities are couples.“We have the capacity tohouse 800 people,” saidLucas. “We don’t forceanyone to share rooms.”

Raglan has a full-sizedgym for volleyball, basket-

ball, floor hockey and other sports, aswell as training facilities with aerobicmachines, treadmills and full sets ofweights. He added that it was veryimportant to “have Wi-Fi throughout thecomplex, so people can stay connectedwith families down south.” Once amonth, Raglan will even fly in a come-dian, humorist, or band to give workersa sense of normalcy while they are so farfrom their homes.

Designing improvements into campsand accommodations that enhancework ers’ personal space, communica-tion channels and privacy are impor-tant, found the authors of theAustralian study. Mine managementcould also be more active in raisingawareness of potential problems associ-ated with the long-distance commutinglifestyle. The study suggests manage-ment develop a physical and mentalhealth baseline in initial fitness assess-ments of remote workers against whichongoing physical and mental health canbe measured as well.

The team is conducting a similar survey in Canada: https://www.surveymonkey.com/s/FIFOinCANADA. CIM

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Employee retention is crucial for remote operations like Glencore’s Raglan nickel mine innorthern Quebec. An Australian survey of fly-in, fly-out employees has come up withsuggestions for mine management that improve camp life and accommodations, with the aimof retaining employees. The survey is now being introduced in Canada.

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of Canada’s most significant economic hurdles. Specifically, thestudy explains that Canada’s multifactor productivity (MFP) hasbeen stagnant for decades, and has been declining since 2002.

MFP infers technological advancement by holding thatinnovation improvements account for the increase in outputfrom a fixed level of labour and capital inputs, which enhanceseconomic growth. Since 1980, the United States has improvedits MFP by 40 per cent, while Canada’s has decreased by fourper cent.

Using 21 innovation indicators, the Conference Board ofCanada ranks Canada 13th out of 16 peer countries. Despitenotable Canadian mining innovations, our mining industry’s MFPfell throughout the 2000s, alongside drops to both labour andcapital productivity. According to a 2009 report by the Centre forthe Study of Living Standards, U.S. mining labour productivityhas been higher than Canadian worker productivity since 1995.

Innovation matters to the Canadian mining industry becausetechnical progress and productivity are key competitiveness


Canada’s productivity performance as a country is worsen-ing due to a struggle to innovate, and the mining indus-try is no exception in this regard. This is made more

acute in the mining sector by increasing regulatory require-ments, rising energy costs, and deeper, lower grade andremotely located reserves, and it needs to be addressed. Fur-ther support to the Canada Mining Innovation Council(CMIC) – the industry’s response to this challenge – wouldhelp reverse this trend.

Innovation matters because countries that do it well are sur-passing Canada on performance measures like income per capitaand productivity, and with the quality of their social programs. Arecent Deloitte report indicates that the average Canadian workercontributes US$47.66 in gross domestic product (GDP) per hourcompared to US$60.77 per hour in the United States. This is alarge gap with significant economic potential lost.

The Organisation for Economic Co-operation and Develop-ment has indicated in a report that lagging productivity is one

Focused spending on mining innovation required

BY PIERRE GRATTON

M A C E C O N O M I C C O M M E N T A R Y

November 2013 | 27

factors. By its very definition, the mining industry faces environ-mental and technical challenges that require innovative solutions.

Canada ranks above its peer countries on overall publicR&D spending as a percentage of GDP, but it does not neces-sarily follow that spending more on R&D will make the differ-ence. Spending that money differently may stimulate anincrease in business-related investment in research, develop-ment and innovation, an area where Canada underperformscompared to other countries.

CMIC was formed with the aim of investing mining industryR&D dollars more strategically. A non-profit organization com-prised of a unique partnership between industry, academia andgovernment, CMIC is Canada’s national mining innovationecosystem, designed to enhance industry’s global competitive-ness through collaboration and alignment of resources in edu-cation, research, innovation and commercialization.

The council represents the mining industry’s recognition fora need to compete more intelligently in the global market. Manyof the innovation avenues the organization was mandated to fol-low closely reflect focus areas of the federal government’s 2012and 2013 Economic Action Plans. These include support forresponsible resource development, Canadian small businesses asinnovation drivers, and the need to create a larger skilled andprofessional domestic labour force that includes all Canadians.

In 2011, Canadian mining and metals companies invested$590 million in R&D, surpassing various sectors such as motorvehicles and parts, machinery, and wood products and paper.The industry also employs over 6,000 people in R&D, morethan the aerospace and pharmaceutical sectors, both of whichreceive extensive financial and policy support from government.

Today, the mining sector is a primary contributor to govern-ment coffers, featuring multi-billion dollar investments, aroundwhich national governments are building strategic policies toattract global investment. Based on need, and by embracingoutside-the-box thinking, the Canadian mining industry hasreshaped its approach to innovation and created a new institu-tion to deliver on that vision.

The 2014 federal budget should include a funding commit-ment to enable Canada’s only open innovation mining ecosys-tem to help deliver new national programs focused on research,product and process development and commercialization andinnovation crucial to industry’s competitiveness. Federal sci-ence and technology spending for the fiscal year 2013-14 isanticipated to be around $10.5 billion. The major fundingagencies for research and innovation (NSERC, CIHR, SSHRCand CFI) have a combined budget of roughly $4 billion. CMIC’srequest accounts for a fraction of Ottawa’s investment inresearch and innovation and could easily be achieved by redi-recting existing funds, thuspresenting a real opportunityto enhance innovation in a keyCanadian sector. CIM

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

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Approaches to lowering mining’s cost curve

BY THOMAS STRUTTMANN


E Y E O N B U S I N E S S

business strategy, operational plan and operating environment,which are the underlying forces that determine its margins.

Business strategyA good business strategy is the foundation of any profitable

organization, yet it is widely overlooked in the mining indus-try because management is often too focused on dealing withshort-term problems. Developing an effective strategy beginswith a rigorous review of a range of value drivers, such asgrade and strip ratio, as well as price, costs and productivity.All of these variables may shift slightly or radically over time.

An effective strategy will predict several scenarios, provid-ing managers with insights on operational changes andenabling them to explore options for achieving margin andgrowth goals. For example, at the simplest level, if grades aredeclining while all other drivers remain constant, then somevariable must be adjusted to maintain margins. It is manage-ment’s job to determine whether a variable can be tweaked tomaintain margins or if a deeper examination of the company’soperating model is in order.

Between 2009 and 2012, mining companies increasedtheir capital spending from $58 billion to more than$120 billion. Yet, return on capital, having peaked in

2006 at 23 per cent, dwindled during this period, falling toless than eight per cent by 2012. This decline can be attributedto a range of factors, including lower commodity prices, recordcapital spending, project cost overruns and a focus on growth.Unfortunately, the outcome is many mining companies havebeen left with large writedowns, increased debt-to-equityratios, and lowered returns.

To improve their margins, miners have embarked on numer-ous cost-cutting strategies, including project cancellations,reduced exploration budgets, deferred capital expenditures andstaff layoffs. These actions may be effective in the short term butthey do not fix the underlying problems facing the business today.

Rather than relying on quick fixes, management shouldfocus on effectively organizing their companies to reverse thedecline of their margins and position themselves to capture theinevitable uptick in future demand. Cutting costs can be muchbetter achieved through a systematic evaluation of a company’s

November 2013 | 29

Thomas Struttmann is CEO of Struttmann Consulting. With more than 30 yearsof industry experience, he has helped reduce his clients’ marginal costs bymore than $700 million. [email protected]

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Operational planEven when a company has a business strategy in place,

management often falters when it comes to translating it intoan operational plan. Ideally, managers should be able to under-stand with a level of certainty what the company will face inthe next six months. However, many operate with a six-weekhorizon. For most mines this is simply not enough time tomake changes to achieve margin goals.

To make accurate projections for a comprehensive opera-tional plan, a high level of detail about financial, operational andgeological data is required. When combined with other knowndata, such as productivity, costs, pricing, sales contracts andbudgets, mining engineers can perform situational modelling.

Through modelling, engineers can adjust a wide range ofvariables and simulate forecasts with a high degree of accuracy,thus gaining the necessary insight to make informed produc-tion decisions. Unfortunately, few mining companies haveaccurate operational and cost data. As a result, it is impossibleto determine the factors that are causing variation, which isultimately the most crucial element of reducing costs.

Operating environment On a day-to-day basis, the operating environment is con-

stantly impacted by numerous factors that can bog down oper-ations managers with details and prevent them from makingsolid production decisions. Processes like drilling, blasting,loading, hauling, crushing, grinding and floatation are all sub-ject to variation. This situation is worsened when it is com-bined with unreliable assets, which are the foundation of theoperating environment and one of the main sources of varia-tion in overall production throughput.

Too often, managers make decisions without keeping thebigger picture in mind. Instead of addressing variation, com-panies will implement a range of inefficient strategies such asincreasing inventory through the production chain, raisingcapital expenditures by acquiring more assets, and relying oncostly last-minute airfreight for repairs.

Implementing asset monitoring technology is a key processthat companies can put in place to control the operating envi-ronment. Predictive modelling can reduce asset failure ratesand increase reliability. Another step toward better processes isdesigning an effective asset life cycle. When technology iscombined with rigorous operational planning, mines can pri-oritize activities, which helps them minimize variation andachieve margin objectives.

To improve margins, taking the long view is not onlysmart but essential to the industry’s future. A mining com-pany is a complex and unique matrix of moving pieces.Without proper attention to every working element, it willinevitably drift off course into decline. CIM


recently by the Supreme Court of Canada’s decision not tochallenge a Yukon court’s ruling that the ‘free-entry’ claimstaking process is counter to the Crown’s duty to consult withAboriginal Peoples. Communicating and building trust can-not be a shortcut, and employers will struggle if they do nottake the necessary time to understand cultural protocols. Asimple move like sending in a community liaison instead ofa senior executive to meet community leaders can causeoffense and tarnish the relationship from the outset. Earlydialogue and spending time in the community is likely toresult in a more effectively negotiated partnership agreement.

Haphazard decisions on training and hiring goals canalso lead to disappointing results for everyone involved.Although the general intent of agreements is to create signif-icant employment and training opportunities for as manycommunity members as possible, goals must be realistic sothat success metrics are fair. While an ambitious hiring goalis admirable, if a company is not aware of the education,housing or health challenges that may exist within the com-

Impact and benefit agreements (IBAs) and other partner-ship agreements play an important role in establishing theground rules that detail how a mining employer and abo-

riginal community will work together over the duration of amining project. The creation of an agreement is a significantundertaking involving lengthy consultations and often asteep learning curve on both sides. Despite the mutual ben-efits of a local workforce, many partnerships still struggle tomeet the HR components of their agreements. Why?

To answer this question, MiHR conducted a research proj-ect examining the lessons learned from existing IBAs inCanada. The foundation for establishing a solid partnershipagreement is the commitment to building and maintainingtrust between the employer and the community throughrespectful communication. First contact should be made asearly as possible – no later than after the company hasselected the land during the early stages of prospecting andexploration – and preferably before entry on traditional ter-ritory. The importance of this approach was reinforced

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munity, such a goal will be hard to achieve. To establish real-istic HR objectives, the company can share information oncareers in mining and the mining cycle with the community– either directly or through a third party. The communityalso plays a crucial role in helping assess the skills makeupand career interests of its members.

One mining professional in human resources told me thatnegotiating is easy, but implementation is the hard part.After time and resources have been invested in the trainingand hiring of community members, a retention and inclu-sion strategy is essential to minimize turnover and maintainthe local workforce. As aboriginal employees start to learnabout mine life, non-aboriginal co-workers need to learnabout local cultures and traditions to develop a truly inclu-sive workspace. For example, an aboriginal employee maynot speak to her supervisor about her interest in an advance-ment opportunity because her cultural background mayfrown upon bragging or putting one’s self above the group.Through understanding the cultural context that influencesbehaviours, the employer can instead recognize the individ-ual’s merits, ask the employee if she is interested in advance-ment and assist with the employee’s progression. Thisprocess can be enhanced by creating a role for a trustedcommunity liaison officer who acts as a bridge between thecommunity and the employer and, additionally, can ensure

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Melanie Sturk is the director of attraction, retention and transition at the MiningIndustry Human Resources Council (MiHR), the national HR council forCanada’s minerals and metals industry.

problems are managed before they escalate. Some miningemployers have implemented thoughtful and effective inclu-sion and retention methods. Examples include translatingcompany publications into aboriginal languages and intro-ducing flexible schedules to allow time for the individuals tocontinue to support their community and take part in tradi-tional activities. In an ideal scenario, companies will alsoprovide the community with skills that are transferrableafter the mine closes, or involve the creation of support serv-ices that are owned and managed by the community.

The result of any partnership should be a win-win, butit does require time, resources and compromise. Early, opencommunication and spending time together builds the crit-ical element of trust and often will set the tone for the dura-tion of this working relationship. Companies andcommunities embarking on this process for the first timeare fortunate in that they can learn from those who havewalked the path before them. CIM


industry. It is the intention that this review will lead to theestablishment of standard practices for issuers in reportingboth gross and unit costs of production, thereby helping toclarify for investors current and potential profitability risks andopportunities. This sort of standardization of practices is sim-ilar to the CIM definitions developed and implemented formineral resource and mineral reserve disclosure a number ofyears ago. These definitions, as part of NI 43-101, havebecome a worldwide standard.

A CIM committee was reconstituted earlier this year to pre-pare recommendations to CIM Council for the establishmentof best practices for cost reporting. It is expected that, onceadopted by CIM as a best practice, CSA will consider whetherthe cost reporting best practices should be incorporated intoNI 43-101 Standards for Disclosure.

In June 2013, the World Gold Council published its “Guid-ance on Non-GAAP Metrics – All-In Sustaining Costs and All-In Costs.” This guidance is intended to provide a template forgold producers to voluntarily report standardized costs.Importantly, the component costs of these two measures willbe directly reconcilable to a company’s financial statement.

The CIM committee is in the process of reviewing this forpossible recommendation as best practice for precious metalsproducers and developers. For other producers and develop-ers, the committee will prepare a similar guidance for consid-eration as best practice.

The process for the committee will be to prepare a draftreport recommending best practices. This will be distributedto CFOs of Canadian mining reporting issuers for review andcomment. Following that, a second draft will be submitted toCIM for a period of general comment by members and otherinterested parties. It is intended that the cost reporting bestpractices be finalized in 2014. CIM

I n January 1999, the Toronto Stock Exchange, Ontario Secu-rities Commission, and Canadian Securities Administrators(CSA), as a group, released Mining Standards Task Force –

“Setting New Standards.” This report and its recommendationsgave rise to what became the NI 43-101 Standards for Disclo-sure that set out requirements for dissemination of technicaland cost information by mining reporting issuers on Canadianstock exchanges. One of the recommendations in the reportwas to research the possibility of standardizing production costreporting for various commodities, andthat CIM participate in this study.

Historically, producers and developershave used two standards for reportingunit costs of production. Those workingwith precious metals have relied on theGold Institute standards that designate:cash operating costs as direct productioncosts less byproduct credits; total cashcosts as cash operating costs plus royal-ties and production-based taxes; andtotal production costs as total cash costs plus depreciation,depletion/amortization, and closure/reclamation. For base met-als, the guidelines developed by consultancy firm Brook Huntare generally considered the standard. They label net direct cashcosts (C1) essentially the same as the Gold Institute’s cash oper-ating costs; determine production costs (C2) as C1, plus depre-ciation, depletion/amortization, and production based taxes;and determine the fully allocated cost (C3) as the sum of C2,corporate costs, royalties and financing charges.

Under these standards, there has been a wide range ofreporting bases by producers and developers. In general, com-panies have reported Gold Institute cash operating costs andBrook Hunt C1, with some reporting Gold Institute total cashcosts or Brook Hunt C2. The variations in reporting method-ologies have led to some confusion and misunderstanding onthe part of investors and other interested parties who struggleto determine the actual costs of a producing mine or develop-ment project.

Recent reporting of results by producers, particularly someprecious metals producers, has shown that in many cases com-panies report only Gold Insitute cash operating costs or BrookHunt C1 and do not include the related capital costs to con-struct a mine and sustain operation through equipmentreplacement and ongoing underground development or strip-ping, and closure costs. As a result, while they may look likelow costs producers, they struggle to generate cash due to highcapital investment requirements.

In consultation with and at the urging of CSA, CIM is lead-ing a review of production cost reporting methods in the

CIM developing production cost reporting best practices

BY GRAHAM CLOW

F I N A N C Ecolumns

Graham Clow is chairman and principal mining engineer with RPA. He hasmore than 40 years’ experience in all aspects of the life cycle of miningproperties and companies. In addition to providing strategy and direction forRPA, he leads the company’s due diligence and M&A practice, assessing andadvising on projects worldwide.

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Overall, rising volumes were accompanied by sharp priceincreases. In 2011, copper and gold prices were 5.6 times and5.8 times higher, respectively, than in 2001, but the price ofinternationally traded iron ore was 12.9 times as high as in2001. Iron ore producers can legitimately claim that prices hadbeen depressed for many years prior to 2001, and had beenfalling in real terms, during a period when demand was stag-nant or rising very slowly. Once demand started increasingmore rapidly, and existing capacity became inadequate, pro-ducers needed – and received – substantially higher prices toencourage investment in additional capacity, both at existingmines and at greenfield sites.

Up to the financial crisis in 2008, steel and iron ore priceskept broadly in step. Since then, they have followed differentpaths. Steel prices have fallen back from their 2008 peak. TheLondon Metal Exchange’s cash settlement price for steel billet,admittedly only a rough guide to steel prices, has this yearaveraged only one third of its level reported in the second halfof 2008. Iron ore prices, while volatile, remain substantially

Over the last decade, iron ore miners have ramped upcapacity to fill increasing steel production needs in Asia.During this time, they have benefited from higher iron

ore prices due to both demand shortages and a more recentmove to spot-related iron ore pricing. Having now addressedthe global demand gap though, miners may soon see somenegotiating power return to steel producers.

In 2011, the world’s 10 largest non-fuel mineral mines – and16 of the top 20 – produced iron ore, accounting for 16.4 percent of the mining industry’s total sales, according to the latestavailable figures from the Raw Materials Group. Ten years ear-lier, however, there were only eight iron ore mines in the top 20,collectively supplying 3.8 per cent of that year’s value of sales.

This marked rise in the iron ore producers’ share of themining industry’s turnover was in part a natural consequenceof the surge in Chinese steel production and demand for ironore. Global output of iron ore more than doubled over thedecade (from 934 Mt to 1,898 Mt). Many other commoditiessaw far more sedate rises during this period.

The iron ore pricing roller coasterBY PHILLIP CROWSON


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negotiated. That does not mean that they always will be,although a return to the old pricing system is unlikely.

The rise in iron ore prices has not only greatly boosted theprofits of the major shippers but it has also encouraged newentrants and a strong continuing increase in productive capac-ity. Once new capacity has been installed, the prices needed tokeep that capacity operating are much lower than the pricesneeded to tempt in new production.

Looking ahead, the majors should continue to earn reasonable -to-good profits, even with much lower prices. Someof the newer entrants may be squeezed but they are unlikely toclose down – or at least not unless prices fall very low for anextended period. New capacity will be delayed, but then thedynamic of so-called cost reduction may take over, as compa-nies expand to spread fixed costs so that unit costs go downand profits go up. One seductive danger is that the low-costproducers will continue producing flat out in the expectation ofmaking profits, no matter what happens to total demand. Thetrouble is that such a view often prolongs the agony of weakmarkets for all concerned. CIM

higher. Spot iron ore prices peaked in early 2011, some threetimes above their 2008 average. Today, iron ore prices areroughly 20 per cent below their 2011 peak, but that is stillmore than double their 2008 average.

Prior to 2008, prices for internationally traded iron orewere negotiated bilaterally between leading shippers and steelmills. Once one contract for the following year’s price had beenagreed upon, other contracts were quickly settled on roughlysimilar terms. With the rapid rise in Chinese demand and agrowing spread between contractual prices and spot deliveryprices, iron ore producers seized the opportunity of the sellers’market to move to spot-related pricing. This boosted theirshort-term profits, improving shareholders fortunes and nodoubt management bonuses. Today, most sales are at pricesclosely linked to prevailing spot quotations.

In the tight iron ore market conditions of 2008, steel millswere powerless to resist the move to spot-related pricing, how-ever much they disliked it. Yet apart from minor uses, ironore’s only market is in steel production. The longer-term healthof the suppliers is inextricably linked with that of the steelindustry. Will the balance of power remain in the iron ore sup-pliers’ favour while its customer industry remains weak? Sincethe benchmark system collapsed, spot prices have probablybeen much higher than those that would have been bilaterally

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Researchers at the sustainable metal production groupin Australia’s Commonwealth Scientific and IndustrialResearch Organisation (CSIRO) are getting close tocommercializing a dry granulation process that turns

hot slag into a money-making product. The hundreds of mil-lions of tonnes of molten slag created during steelmaking everyyear are currently a byproduct the industry has to live with,with limited benefits.

“There are over a billion tonnes of steel produced in theworld each year and that creates 200 to 300 million tonnes ofslag, which is an enormous source of heat that is not beingrecovered,” says Sharif Jahanshahi, theme leader of sustainablemetal production at CSIRO.

Historically, the process for treating 1,500 C molten slagwas simply to let it air-cool, but that left tonnes of solidifiedslag waste to be broken up and hauled away. It also wasted allthat heat. In fact, according to CSIRO researchers, about 1.8gigajoules of heat is lost for every tonne of molten blast furnaceslag cooled. To put this waste in perspective, the global total ofenergy wasted during this step is roughly equivalent to onefifth of Canada’s electricity generation sector.

The most common approach to cooling slag these days is touse water to both cool and granulate it. This way, the slag isturned into glassy granules that can be used as a substitute forPortland cement and for bringing in some revenues ($25 to$35 per tonne in Australia, for example). Morphing slag fromdisposing of it as waste into a product that can be sold is

obviously a step forward, both envi-ronmentally and economically, but allthat thermal energy in the hot slag isstill lost with wet granulation, alongwith the fresh water used. Some 1,000to 1,500 litres of water evaporate foreach tonne of slag treated. The processcan also be potentially hazardous, saysJahanshahi: “There’s the potential riskof explosions with wet granulationwhen the slag contains molten metalssuch as iron or mattes.”

The holy grail of efficiencySince the 1980s, various re searchers

have attempted to develop a dry gran-ulation process by breaking up moltenslag into small droplets using mechan-ical means like air blasting, rotarydrums or spinning discs, followed bysolidifying the slag droplets and at thesame time recovering the high-grade

heat with air. But there were always snags, and none havecome close to commercialization to date.

In 2002, a team at CSIRO decided to take up the challenge.They initially analyzed and evaluated previously availableresearch and then concluded the method closest to solving thisproblem was dry granulation using a spinning disc or cup.This method used the least amount of energy to atomizemolten slag and provided a more efficient and controlledprocess. But previous attempts to use a spinning disc were hin-dered by significant design and operating issues such as theneed to suppress slag wool and handle hot droplets and granules.

“Dry granulation with a spinning disc is a very fast processthat breaks up the slag to form fine droplets using centrifugalforces,” says Dongsheng Xie, project leader at CSIRO. “Theslag spreads and breaks up in a fraction of a second. You wantto produce small slag droplets for fast and efficient heatexchange, so that you can quench them very fast to producethe glassy product that can be used as a substitute for cement.”

But because the process occurs very quickly, things can alsogo awry quickly. “Even if you produce droplets, how you han-dle them and recover the heat quickly is not a simple task.”says Xie. By 2006, his team had made major breakthroughs toenable them to design a process to achieve both dry granula-tion and heat recovery at the same time. The process theydeveloped is based on a two-step operation. The first involvesputting the molten slag in a dry granulator that atomizes it into

upfrontI R O N O R E V

For every tonne of molten blast furnace slag cooled, 1.8 gigajoules of heat is lost.

Heat seekingCSIRO technology aims to convert slag heat into useable energyBy Alexandra Lopez-Pacheco

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small droplets. These are quenched with air rapidly and solid-ified. They are then processed through a moving bed counter-current heat exchanger where they are further cooled almost toambient temperature and the heat is captured. A key compo-nent to the process’s success is the precise use of air in bothunits. It has to be as minimal as possible in order to maximizethe temperature of the output air stream.

Partners now crucial for successTo prove their process, the CSIRO researchers built a pilot

plant with a 1.2-metre diameter granulator that processed upto 0.6 tonnes of slag per hour in 2007. Armed with goodresults from these tests, in 2009 they scaled it up to a semi-industrial scale plant that could process slags at up to sixtonnes per hour. “The next step is to take it to industry-scaleso we can process 20 to 60 tonnes per hour and demonstratethe process at a blast furnace site. That will confirm the per-formance and from there we can proceed to commercializa-tion. In reality, this will likely take about two or three years,”says Xie.

Terry Norgate, a chemical engineer who was working aspart of the project team before he recently retired, has carriedout a detailed economic assessment of dry granulation’s bene-fits, which found that both the capital and operating cost ofdry granulation will likely be roughly half of those for wet

November 2013 | 37

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granulation, while also reducing greenhouse gas emissions,water use and waste.

Based on Norgate’s estimate, the operating cost of the drygranulation process would be about $4.74 per tonne of slag fora 300,000-tonne per year slag plant, with a capital cost ofabout $9 million, excluding any capital costs associated withuse of the recovered waste heat.

CSIRO is currently in confidential negotiations with poten-tial industry partners to scale up and conduct industrial trialsat a blast furnace site. “The next stage is critical,” says Xie. “Wehave to find a partner who can design and build a dry granu-lation plant and manage all the on-site operational challenges.With the process itself we need to demonstrate the design andmake sure all the material processes will continue. We are lim-ited in the lab tests by the amount of slag available, but in thenext stage we will have [the] opportunity to test our designunder continuous operation. Still, from laboratory to industry,there can be a lot of variations and fluctuations, and we will belooking to work closely with our industrial partners to over-come these challenges.”

Should they succeed, those hundreds of millions of tonnesof molten slag around the globe could end up being part of acost-effective solution that helps produce heat and power andbuilds foundations for buildings in a greener world, while gen-erating revenues: a win-win-win. CIM

upfrontV I R O N O R E


Times are tight for the minerals industry, and optimiz-ing equipment to increase efficiency and save energy isbecoming central to doing more with less. So says LuísMarcelo Tavares, associate professor of mining and

metallurgy at the Universidade Federal do Rio de Janeiro(LTM/UFRJ) in Brazil, who leads the Laboratório de TecnologiaMineral research group at the university. “Lower grades, largerplants, and the push towards greater sustainability throughminimizing energy and water usage are requiring answers fromthe whole mining community. These challenges call for skillsthat go from the depth of theoretical to highly practical knowl-edge. However, looking around the globe, very few groupsreach the minimum size and skill base required to make ameasurable impact.”

Two years ago, Brazilian mining company Vale, which has along relationship with the Laboratório de Tecnologia Mineral,set out to tackle this gap, offering some of its employees theopportunity to pursue master’s degrees. Patrícia Faria, masterprocess engineer at Vale S/A was among them. The companycontacted Tavares, who seized the opportunity, bringing in hisalma mater, the University of Utah. He agreed to be one ofFaria’s supervisors as she embarked on her degree, with herresearch focused on ball mill optimization. “I could recognize

that Patrícia combined the righttools for such an important venture:great personal drive, high intellec-tual capacity and very good peopleskills. This later proved to be thekey ingredients to successfully man-age supervisors in two different con-tinents (which she has so far), aswell as to negotiate support for hertest work, both online and offline, inthe pelletizing plant,” says Tavares.

“Pelletizing is becoming increas-ingly important,” explains Tavaresabout the relevance of Faria’sresearch. “Great attention is oftendevoted in a pelletizing plant toensuring product quality by con-trolling and optimizing the forma-tion of green pellets and theirinduration. In the pellet feed prepa-ration, attention is mostly focusedon guaranteeing that grinding gen-erates a consistent product. How-ever, it has been identified that, veryoften, such milling circuits are notoptimized, thus missing out on a

very good opportunity to reduce costs and increase produc-tion capacity.”

Faria set out to identify the best means to optimize an exist-ing ball mill in order to save energy, increase production andimprove iron ore pellet quality. She spent much of last year inBrazil, reviewing the literature and seeking the best optimiza-tion methodology. “In the past, most often industry lab workfor optimization was based directly or indirectly on the empir-ical Bond Work Index,” says Faria, who has been employedwith Vale since 2010. “This approach was used extensively,but, according to some researchers, this methodology is usefulfor new design and not for optimization of operating mills.”

Breaking BondFaria’s research led her to conclude the Bond Work Index

did not take into account two fundamental elements: milltransport and cyclone size classification. “Bond basicallyassumes that the breakage kinetics transport in the mill andclassification of the processes is characterized by a singleparameter, the [Bond] Work Index,” says Faria.

Instead, she found the Population Balance Model is moreaccurate. “It makes it possible to simulate the industrial mill ina laboratory mill with great accuracy,” notes Faria. “And this is


Patrícia Faria is a Vale employee who has been conducting research at the University of Utah as part of a master'sdegree focused on ball mill optimization.

Pelletization partnersVale and universities seek to perfect ball mill optimizationBy Alexandra Lopez-Pacheco

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important for optimization because it allows me to do all theexperiments to determine the optimal conditions for theindustrial mill in a very small, 10-inch batch mill, in a labora-tory. If the results are good, I can then scale up and apply it tothe industrial mill. So it is an economical way to simulate thebest conditions to apply in the industrial mill without thepotential loss of energy and production that would be associ-ated with doing the tests in the industrial mill.”

Tavares says the use of the Population Balance Model toimprove grinding is seldom done in the context of grindingpellet feed and certainly not at the level of detail that Faria haspursued. “Among the reasons it is not done as often is the lackof skilled engineers, as well as the need to properly calibratemodels at different levels before validating at an industrialscale,” he points out. “Only after that exercise can one confi-dently implant the technology in the plant and place methodsto conduct calibration of the model to account for variationsdue to ore grindability.”

Large-scale resultsFaria spent the last year collecting extensive data from an

industrial mill at Vale in Brazil. She measured the fresh feedsize distribution and, using the Population Balance Model,predicted the mill size distribution and the cyclone overflowsize distribution.

She is now using the results of her research and the data shecollected at the University of Utah lab to simulate the potentialimprovements in an industrial-scale mill. Her goal is to metic-ulously test each parameter, such as solids concentration, millspeed, optimal top ball size and ball load, and a series of otherpossible variables to determine the exact operational condi-tions needed to optimize the industrial mill.

In January, Faria will return to Brazil and apply her find-ings. “Validation of simulations using good data from indus-trial plants is a key prerequisite in her study,” says Tavares. “Assuch, collecting good data is often not a trivial task, since veryfew plants appreciate the effort and care required to conduct agood industrial survey. This will be particularly critical in thefollow-up of her work back in Brazil, when she will work onthe application of more advanced models of comminution tothe plant.”

Ultimately, the research has already been successful in thesense that it is affording Faria the opportunity to profoundlyaugment her knowledge and understanding. “I’m learningwhat is behind the theory and methodology,” she says. “Thereis software that is widely available for optimization. I think ithas its limitations, but more importantly if I use the softwareat my work for the optimization, I don’t know the theorybehind it. For me, this is far better and it is knowledge I canbuild on and share.” CIM

November 2013 | 39


China’s economy should continue to cool in 2013,with predictions from PricewaterhouseCoopers(PwC) indicating seven or eight per cent growth forthe year. But while Chinese investors are growing

more cautious that does not mean that demand for iron orewill decline, says Ari Van Assche, associate professor at HECMontreal and an expert on the Chinese economy. “China’seconomy will keep on slowing down in the coming years,but economic growth does not necessarily have an impact onforeign direct investment (FDI),” he points out. “Since Chi-nese companies are richer than before, they are going toinvest abroad, including in North America.” In the miningsector, the decision to invest in Quebec will depend mostlyon the health of the iron ore industry rather than on Chinaitself, he adds: “As long as the industry is doing fine, they willinvest. We should not focus solely on growth.”

In fact, exports to China have been increasing rather thandecreasing over the last few years despite the decline in Chi-nese growth. “There has been an intensification of tradebetween China, and the rest of the world,” says MichelLeblanc, president and CEO of Montreal’s Board of Trade. “InQuebec, iron ore has clearly been the vehicle for thisincrease.” In 2008, he recalls, ore from the iron-rich Labrador

Trough that runs down northeastern Quebec made up justone per cent of the province’s total exports to China. By2012, that proportion had soared to 30 per cent. Canadianexports to China increased by 15 per cent in 2012 alone, andare now worth almost $20 billion.

Cyclical by natureBut globally, the end of 2012 and beginning of 2013

were tough for mining companies, and iron ore was noexception, with prices dipping below $100 per tonne inSeptember 2012 – a low not seen since 2009. Steelmakersheld back their buys, primarily because they had highinventories of steel, but also because there was some uncer-tainty on the credit market, says Patricia Persico, director ofglobal communications at Cliffs Natural Resources. Thesteep decline in demand forced many mining companies towrite off billions in assets, with Cliffs itself announcing inJanuary of this year that it would write down $1 billion onits Bloom Lake property.

That is just how the market works, notes Persico, who isconfident that demand for iron ore will keep on intensifying,although not as aggressively as in 2011. “We believe growth isstill healthy in China,” she says. “As China’s economy transi-


Chinese investors are now more cautious when investing abroad and are looking to remain active in the investments they do make.

Quebec’s iron-clad bond with ChinaBoth parties in iron ore business for the long haulBy Pierrick Blin and Antoine Dion-Ortega

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nnis

tions from an emerging economy to a mature one, it will stillhave a need to consume steel, but this demand will be notwithout volatility in steel consumption and productivity, sothere’s going to be a natural volatility in the pricing for steel-making raw materials such as iron ore.”

“We must stay the course,” Leblancinsists. “We are obviously experienc-ing a slowdown, some decisions arebeing delayed, but the demand of the[Chinese] middle class will continuein the future. We should be wary ofpessimism.”

Dealing with a more savvy ChinaIn April 2012, Zhou Xiaochuan,

governor of the Peoples’ Bank ofChina, spoke out against the poorunderstanding Chinese investors hadof the investment environment, legalsystems and financial markets of the countries they investedin at the Boao Forum for Asia. “This will take some time toimprove,” he said, yet this year those same investors havebeen hard at work applying lessons learned.

“China has had some problems with return on some oftheir investments abroad,” says Nochane Rousseau, leader ofthe mining industry for Quebec at PwC. “They realized thatthey might not have all the skills required to make thesebusiness decisions, so they are now more careful in theirinvestments. We also noticed that they are more active share-holders and that they stay involved in the projects’ management.”

Though it is not in iron ore, the Nunavik Nickel project,owned by Canadian Royalties, is probably the best exampleof the new Chinese stance. Jilin Jien Nickel bought CanadianRoyalties in 2010 through its Canadian subsidiary, but theproject faces financial problems that the China DevelopmentBank, which funded it initially, now refuses to take on. “Wewould tend to expect that the Chinese banks will bail themout, but that is just not happening,” says Rousseau, addingCanadians should not expect China to save the day. “Sincethey will be more cautious in their investment, there will befewer projects chosen,” he notes.

Canadians have had good reason to expect a lot fromChina in the past. Quebec in particular owes a lot to Chineseinvestments, which are foremost among foreign investors. “Inthe last few years, many major mining projects in Quebechave been either developed or advanced thanks to Chineseinvestment,” says Rousseau.

That was certainly the case for the Bloom Lake project,into which Wuhan Iron and Steel Corp. (Wisco) invested$240 million in 2009, taking a 20 per cent interest in Con-solidated Thompson – which owned the project at the time– and signing up for a 50 per cent off-take agreement. It wasan investment that certainly did not go unnoticed by Cliffs,which took over Consolidated Thompson two years later for$4.9 billion.

November 2013 | 41

“We wanted to grow within China, and more generally theAsian market, and Consolidated Thompson was very attrac-tive for us at the time,” says Persico, who notes that theirpartner in Bloom Lake is the fifth largest steel producer glob-

ally. All seven million tonnes of ironore produced at Bloom Lake isexported to the Asian market.

Wisco has also invested $91 millionin the Otelnuk Lake project, whichAdriana Resources is currently advanc-ing through its feasibility stage, some170 kilometres north of Schefferville.

Even though iron ore from Quebeccosts up to twice as much as Australianore, Chinese steelmakers will hold onto these strategic investments becausethey need to secure diversity of supplyrather than depend on a handful ofmining multinationals, says Van Ass-

che. Also, Quebec’s deposits are high-quality, Rousseaunotes, but less concentrated, meaning projects often need toinclude an extra concentration step in their design.

In any case, Cliffs is confident that the Labrador Troughwill continue to hold interest for foreign investors. “Theadvantage in the Trough is that you have an established infra-structure, so companies are attracted to that rail, to thatport,” says Persico. “You don’t have to build that.”

For the moment, Cliffs has put aside its expansion proj-ect at Bloom Lake that would have doubled the output ofthe mine to focus on the stability of the original projectand satisfy its investors. “We have no timetable for thePhase 2 expansion,” Persico admits. “We will probablymake some determination within either this year or earlynext year on a timeline. Right now, we are putting that onhold. We are being much more prudent with our capitalinvestment. We have had to pull back a little bit in the lastsix months.” CIM

Since they will be more cautious

in their investment,there will be fewer projects chosen.

– Nochane Rousseau

Kidd wins safety award

Glencore Canada’s Kidd Operations received the Presi-dent’s Award from Workplace Safety North for being the topperformer in safety and for always making occupationalhealth and safety a priority. “Everyone is really proud of thewin,” said Tom Semadeni, general manager of Kidd Opera-tions. “It is really icing on the cake because earlier this yearwe won the John T. Ryan Award for the best safety perform-ance for a Canadian metal mine. So it is further reinforce-ment that we’re on the right track.” Workplace Safety Northis a not-for-profit health and safety organization that bringstogether groups and communities to build safer, healthierand stronger workplaces.

ACHIEVEMENT



Dean Journeaux and Bob Martin, along with the otherfounders of LabMag Mining Corp. (LMC), acquiredclaims in Labrador and Quebec in 2002, and leaptinto the iron ore industry. This came just before mar-

kets improved, driven by demand from emerging Asianeconomies, so the timing was good. Now known as the Mil-lennium Iron Range and held by New Millennium Iron Corp.(NML), the acquisitions have enormous potential.

The company started small, but Journeaux – now presidentand CEO of NML – helped establish a strategic partnershipwith India’s Tata Steel Limited, one of the world’s largest steelproducers and now its biggest shareholder. They created TataSteel Minerals Canada (TSMC) to take advantage of NML’sdirect shipping ores (DSO). In September, TSMC celebrated itsfirst DSO project shipment from Sept-Iles, Quebec, to TataSteel Europe. It was a major milestone for New Millennium.Journeaux and his team have big plans for the 210-kilometre-long Millennium range that should keep them busy well intothe future.

CIM: What attracted you to this opportunity and how did it comeabout?Journeaux: Bob Martin [former president and CEO] becameaware that iron ore claims in the Labrador Trough had becomeavailable in early 2002, and he worked with me and a few

others in the belief that a crunch in iron ore markets wouldcome at some point. We then set up a capital pool company,NML, and did desktop studies on several projects beforedeciding to qualify the LabMag project held by LMC [one ofseveral taconite deposits in the Millennium Iron Range]. Weknew we needed a partner and talked with potential partiesfrom all over the world before making our agreement with TataSteel. Our team has extensive iron ore experience. We knowthe market and the ore bodies. We’re lucky to have thatknowledge, as business was bad in the 1980s and 1990s,resulting in a vacuum of industry experience. You won’t findmany people in their 50s in this business.

CIM: Describe the relationship NML has with Tata Steel, as thiscompany is integral to your business. Is there anything uniquein working with that company?Journeaux: When we looked for a partner, we concentrated onusers that need captive supply. We know the big iron orecompanies prefer higher grade ore bodies close to Asianmarkets. Ours are lower grade compared to others in Braziland Australia; our ores are harder and require a lot of grinding,and we’re 600 kilometres from the ocean. On the other hand,we’re closer to Europe and the United States. Tata Steel was agood fit for us because they are the second-largest steelproducer in Europe, but with zero captive [iron ore] supply.


Amongst giantsPartnerships sustain momentum for New Millennium Iron’s Dean JourneauxBy Vivian Danielson


CIM: How has your four decades of experience with othercompanies and working in other countries translated to NewMillennium Iron?Journeaux: I started with Quebec Cartier Mining and laterMET-CHEM Canada, U.S. Steel subsidiaries, and worked allover the world, including India, where I lived for a time. I gotto know a lot about the global steel industry, and that’s a realadvantage.

CIM: Your company recently reported the first shipment ofproduct from the DSO project. Where do you see this projectand the company in five years?Journeaux: DSO production could reach the rate of six milliontonnes per year in 2015, and perhaps as high as eight milliontonnes in five years. That’s the objective, and TSMC has theresources to do that. The taconite deposits [LabMag andKéMag] are at the feasibility stage. This will be a huge projectat $5 billion, estimated in 2010, or more now. We’re workingwith Tata Steel, which has agreed to arrange the bulk offinancing, and expect to release a study shortly. We are alsolooking at other partners to help de-risk it and arrange off-takeagreements.

CIM: The iron ore industry is dominated by giants. How do youfit in as a smaller company, and is there an advantage in beingperceived as small, even as a producer?Journeaux: We may be small, but NML ranks roughly fifth inthe world in terms of iron in the ground [in the MillenniumIron Range], and that’s an advantage. The big guys have bigresources and big production but will run out of ore sooneror later. We have the potential for a hundred years or more,and that’s the kind of life people will be looking at longterm.

CIM: Power and infrastructure are essential to this projectand some improvements are proposed or in the works,including a new deep water dock at Pointe Noire. Can youdiscuss those?Journeaux: This new deep-water dock will be capable ofhandling the largest vessels plying the seas. When it’scompleted early next year, we’ll be able to ship product inlarger vessels and extend our shipping range. We [NML andTata Steel] have invested $50 million, or roughly 25 percent of the total capex for the project. As for hydroelectricpower, we’re looking at separate proposals for LabMag andKéMag; we’re not sure which would go first. We haven’tdiscussed rates, but don’t expect to be treated differentlythan other users.

CIM: What relationships have you established with localaboriginal communities?Journeaux: The first agreement we made was with the NaskapiNation to invest in the early stages of the LabMag project. Theynow have earned an ownership of 20 per cent of LabMag.Later, we also negotiated four impact and benefit agreementsfor the DSO project. They form a large part of the project

employment. We spend a lot of time and effort with FirstNations and local communities and are very involved inpromoting education for young people. So we have a strongrelationship based on respect.

CIM: How have current capital markets affected the company?Journeaux: We’re lucky that we raised considerable fundingtwo years ago and have Tata Steel as a partner. We’re in goodshape – we’ll need funding for the taconite projects at somepoint – and we don’t foresee going to the equity marketanytime soon.

CIM: Finally, how competitive is the company globally given thatthe previous operator of the DSO project was forced to closebecause of weak prices in 1982?Journeaux: One advantage is producing a higher qualityproduct upgraded to 69 per cent iron for taconite concentratewith very low deleterious elements. The DSO has a naturaliron content of 58 per cent or 59 per cent previously shippedwithout upgrading. TSMC is building an upgrading plant toreach at least 64.5 per cent iron to meet market specifications.Another advantage is our potential to produce a range of pelletproducts, including direct reduction grade pellets. We see thehigh-quality pellet market, especially for direct reduced iron,increasing over time and see that as our niche. CIM

November 2013 | 43

The Mining Engineering Department at Colorado School of Mines (Mines) is accepting applications for an anticipated tenured or tenure-track faculty position at the rank of Assistant or Associate Professor with broad based expertise in surface and/or underground mining of coal, metals/nonmetals, or industrial minerals. The successful candidate will advise/mentor undergraduate and graduate students, and teach select courses in mining engineering at all academic levels.

Applicants must possess an earned Ph.D. degree in mining engineering or a related engineering discipline. A background and expertise in one or more of the following areas: underground or surface mine design, mine operations, ventilation, mine plant design, mineral processing and coal preparation, or rock fragmentation is highly desired.

For the complete job announcement and directions on how to apply, visit: http://inside.mines.edu/HR-Academic-Faculty

Colorado School of MinesDepartment of Mining Engineering

Assistant/Associate Professor


No safety in numbersFor a select group of miners, safety culture has improved dramatically inrecent years. Major mining companies are now some of the safest employ-ers in the world, and their managers understand the cultural change thatwas needed to make that happen. But for the vast majority of the globalmining workforce who labour in artisanal and small-scale mines, healthand safety can still be an afterthought or worse. How much can we help?

By Correy Baldwin

A group of women pick through the waste rock dumpof a cooperative ASM mine in Nazca, Peru.

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Though artisanal and small-scalemining (ASM) operations mayseem insubstantial, their global pre-

sence is anything but. According to ASM-PACE, an NGO focused on the ASM sector,there are an estimated 20 million ASMworkers around the world. In gold alone,there are 15 million ASM workers in 72countries, which is about nine times thenumber of people who work in large-scalegold mines. Such large numbers mean thechallenges facing the ASM sector poselarge-scale problems.

“I’ve seen holes so deep, that you canhardly see the guys down in them who aredigging and lifting out buckets full of ore-bearing material,” says Thabani Mlilo,AngloGold Ashanti’s manager of sustainability for the Ameri-cas. This mining, he adds, is often done in rock that has neverundergone geological testing and with unknown geologicalintegrity.

ASM workers tend to lack training and technical skills,and the sites often have no operational, safety, environmen-tal or labour standards to speak of. In many cases, ASM ope-rations are unable to gain legal title. In cases where theycannot sell their ore on the legal market, they must turn ins-tead to the black market – or to armed groups that profitfrom the trade.

The safety risks are obvious, the liability risks less so. It isdifficult, for example, to know who is responsible if an illegaltunnel on a major company’s concession collapses, injuringor killing miners. If a company provides any assistance to anillegal mine, it runs the risk of being accused of colluding inthe illegal mining activity.

It is little wonder, then, that many mining companies arereluctant to engage with ASM, aside from at the explorationstage, when its presence is often an indicator of mineralpotential. Once development begins, any interaction is oftenseen as far too risky. Even the presence of illegal ASM activityon a concession comes with a multitude of risks, from safety,security and environmental to liability and reputational.However, for mining companies that neighbour these vulne-rable small-scale mines, engagement with the ASM sector isa risk that also represents an opportunity to help local com-munities and have powerful impact on their health and well-being.

Long historiesAngloGold Ashanti is developing its Gramalote project, a

joint venture with B2Gold, in the hilly region of Antioquia,about 220 kilometres northwest of Bogota. “Artisanal miningis a generational activity in this part of Colombia,” says NathanMonash, the company’s vice-president of sustainability.

Though the Gramalote project is new, ASM activity hasbeen ongoing in Antioquia for a very long time. “There’s nota single family in the local community that doesn’t have somelink to artisanal mining,” says Monash.

In general, the two sides do not talk much. “There’s a reallack of engagement between the formal sector and the infor-mal sector,” says Kevin Telmer, executive director of the Arti-sanal Gold Council (AGC), an NGO that works directly withthe ASM sector.

The complexity of the problem has made it especially hardto address, says Peter Sinclair, Barrick Gold’s vice-president ofCSR. “I think a lot of people have looked at it and thoughtthat it’s too difficult. A lot of NGOs have looked at it from adevelopment angle and said ‘Wow, that’s complicated.’ Thereare a lot of nasty things involved in artisanal mining. Not inevery situation, but it can be a nasty business, so it often dis-courages organizations from getting involved.”

African Barrick Gold’s North Mara mine in Tanzania hasrequired special attention to ASM issues. Of particular concernto the company was a group of women who were entering themine property illegally to collect rocks that they would thentake away to crush and sell as aggregate. Their trespassing wasdangerous, both from a mine safety and personal securityperspective. In response, says Sinclair, the operation set up aprogram to provide the women with equipment and training,to allow them to continue their work in safer conditions andin a more regulated and sustainable way. The company sup-plied 10 motorized crushers and will provide waste rock forthe women to process. Sinclair and his team are currently wor-king to extend power to the site. “It is a win-win, because thewomen are working in a safer environment, and the miningactivities are not unduly affected,” he adds.

African Barrick Gold has also had to deal with a group thatwanted to reprocess tailings from small-scale mining. “We sawclear environmental dangers with the practice,” says Sinclair.“So we helped design it in a way that was going to be safe. Wehelped them understand the use and handling of cyanide, andhelped them get the environmental permits as well.”

Good reasons for actionWhen deciding how to address an ASM community in and

around a prospective area, it is important to understand thehistoric roots they may have there. In some cases, companiesmay obtain concessions that have been mined informally by

What is artisanal and small-scale mining?Any mining and or processing activities undertaken by individuals whomay have formed a collective or co-operative to undertake them. Thescale of activity can range from one individual to large collectives ofhundreds or even thousands of individuals working an area with thecommon denominator being a low level of mechanisation.

Colloquially, ASM is referred to by many different names includinggalamsey (Ghana), orpailleurs (DRC), garimpeiros (Brazil), ZamaZamas (South Africa) and Barequeros (Colombia). ASM activity canbe legal or illegal.


local populations for years, or even generations. Resettlementcan thus represent a major disruption to local communities.

“In places like Tanzania and Ghana, our international workwith artisanal miners is more challenging,” says AngloGoldAshanti’s Mlilo. “We acquired a lot of our mines in Africa[rather than developing them from exploration projects], sothe opportunity to implement best practice from the begin-ning was obviously lost.”

At the Gramalote project, AngloGold Ashanti had theopportunity to take a new approach. Here, one of its first stepswas to better understand local ASM activity, as well as the ASMcommunity that would be affected by the project. The com-pany looked at the historic conflict in the region, local stake-holders in the broader community, and the structure and valuechain of the ASM.

AngloGold Ashanti approached the ASM workers with theidea of alternative livelihoods – that is, moving the artisanalsaway from mining and into another economic activity. In theend, the community worked with the company to write theproposal, but only, says Monash, because Gramalote first formed a strong relationship with the community based ontrust. Some of the miners were interested in working for thecompany, while others preferred to remain independent wor-kers, and Gramalote partnered with two Colombian agenciesto assist both requests.

“This could be considered unusual,” says Monash. “Giventhe longstanding nature of artisanal mining in many areas, ashift into agricultural activities is often not viable. The requi-red skill sets are simply not prevalent. Without subsidizingthe alternative livelihood, which itself is likely to be unsustai-nable, making this transition becomes quite difficult.”

At Gramalote, the company was working with a relativelysmall number of ASM workers. “[It was] in the hundreds andnot in the thousands or tens of thousands,” says Monash. “The

upshot is that we wanted to work with these artisanal minerstowards a new future in which they are no longer mining.”

Ensuring the idea was supported by the community waschallenging. “There is a desire to move away from artisanalmining only if the alternative is better,” explains Monash.“That’s the challenge with alternative livelihoods: there is areason why artisanal mining takes place – it is the best eco-nomic alternative for the people who are undertaking it. Itis significantly more profitable than agriculture in manyplaces.”

Strengthening the ASM sectorAccording to Paleah Moher, AGC’s human and ecosystem

health officer, ASM workers are eager to improve the condi-tions of their operations: “Whether you’re an artisanal mineror a CEO operating in Toronto, everyone wants access to fairemployment opportunities and safe occupational conditions.Certainly the miners we work with are absolutely no excep-tion. They have a desire for occupational health and safety;they just lack the resources, and the basic training. As soonas they’re given economic resources or technological provi-sions, they’re often readily taken up within the community,especially if there’s an economic incentive to do so.”

The plight of artisanal miners is difficult to remedywithout outside support. “Involvement from the formal sectoris essential if artisanal mining is truly going to be improvedat scale, so that it’s not just a development project here andthere,” says AGC’s Telmer. “The large-scale sector has theresources, they’re in the field, they have expertise.”

ASM workers also routinely lack access to several servicesthat could be provided by large-scale mining companiesincluding emergency and mine rescue assistance, affordableassaying or milling services, or workshop facilities. Largecompanies can purchase and treat tailings from ASM opera-

ASM workers receive occupational health and safety training from Artisanal Gold Council in Ghana. An ASM worker at a mine outside of Geita, Tanzania.

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tions, help store explosives or help set up small-scale proces-sing facilities. Modest financial assistance can help ASM ope-rations purchase safety gear and other equipment or obtaintraining.

“Companies can also help upgrade and formalize artisanaloperations by promoting their participation in mineral certi-fication schemes, which facilitates market access and safe-guards better production standards,” says Nicholas Garrett,head of sustainability practice at RCS Global, which workedwith AngloGold Ashanti at Gramalote and elsewhere. “Thisprocess can involve the provision of technical assistance toartisanal operations, often with the help of consultancy firmsor NGOs.”

Too many people to simply relocateIn some cases, the best scenario might involve cohabita-

tion: when ASM miners are either allowed on company pro-perty to work, or the company releases a portion of theirproperty to them.

“Cohabitation is a great option that hasn’t been exploredenough,” says Telmer. “It’s rare that the two groups areactually targeting the same resource. So there is plenty of pos-sibility.” An ASM operation, he says, might profit from mininga tonne of ore a day from a single vein to eventually producea couple hundred ounces of gold – an amount not worthaccessing for a large company.

“It’s becoming a more interesting approach,” suggests Gar-rett, “considering that large numbers of artisanal miners, insome contexts, makes it almost impossible to use moreconventional approaches like resettlement. From a risk-miti-gation perspective, it may often be better to look at ways andoptions of cohabiting.”

Still, such a relationship comes with risks of its own, saysGarrett: “If cohabitation is happening on your concession,

there will be a degree of association between the workingconditions on the artisanal mining operation and the reputa-tion of your company.

“Cohabitation doesn’t necessarily mean that you’re ente-ring into a business relationship with the artisanal miner. Butit could involve technical and other assistance provisions tothe artisanal operation, particularly on operational and minesafety – either through the company or, more likely, throughthird parties.”

A similar notion has been taken up by governments, withmixed results. “In some places in Tanzania, the governmenthas designated areas in which artisanal miners can mine quitesafely,” says Mlilo, who suggests the idea has met with a num-ber of challenges. “It’s a lot easier to obtain ore-bearing mate-rial from an existing concession than it is to break ground onland where you don’t even know what the quality of themineral is.”

According to Barrick’s Sinclair, the Tanzanian governmentis interested in understanding and regulating its artisanal sec-tor better – something in which the industry can provideadvice. “African Barrick Gold is working with AngloGoldAshanti and the World Bank and some others to advocate fora more regulated and more formalized approach to artisanalmining in the sector as a whole,” says Sinclair, “and the Tan-zanian government is very supportive of that.”

Rigid formal structures not always effectiveASM formalization is championed by the development

community that is working to shift the industry from currentad hoc, localized initiatives to an organized, industry-wideapproach. A formalized ASM sector with permitting and somesafety oversight, it is argued, would also be economicallybeneficial to local governments which cannot tax concessionsthat are not ever registered.

A worker prepares feed for the mill in the Cotapata mining cooperative near LaPaz, Bolivia. This ASM operation is the world's first fair-trade-certifiedgold mine.

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Monash says optimistically that the future of ASM miningis one in which it continues to bring needed economic activityto local communities, while also addressing the environmen-tal, social and security challenges that current artisanal miningpresents. But he notes that achieving this vision requires col-laboration between the ASMs themselves, government, civilsociety, international NGOs and large-scale miners. It is a taskthat is complex and requires compromise. In building up therequired partnerships, cautions Monash, “We need to ensurethat the perfect is not the enemy of the good.”

Ironically, Sinclair points out, as large-scale companiesimplement more stringent policies for their own operations,working with ASM operations becomes more difficult. He saysinternational guidance and standards – such as the recentOECD guidelines on conflict minerals and responsible supplychain and the World Gold Council’s conflict-free gold standard– struggle with how to deal with artisanal mining.

“They’ve made it much more difficult for small-scale minersto operate in the supply chain because they’re basically tryingto regulate the downstream flow of minerals, and that is affec-ting the source,” he explains. “The industry’s put these stan-dards in practice for very good reasons, but it has had animpact. It’s likely to close off opportunities for artisanalminers, unfortunately.”

Telmer says he believes NGOs will always play a crucialrole, as mining companies are beholden to shareholders andcannot escape that reality. “Does using a risk lens to look atthis issue allow for the types of innovations that are going tobe required to make it a sustainable sector?” he asks. “I wouldsay no; it’s not very helpful to look at it that way.”

Development agencies have the flexibility to help miningcompanies and governments achieve positive outcomes.“Every location and small-scale mining community that wework with has a unique set of circumstances, with particularconditions and particular needs,” says AGC’s Moher.

Understanding these circumstances, she says, allows herorganization to act as an effective neutral third party. “Thebenefit of working directly with artisanals is that we can actas a bridge, or a voice, between these small-scale miners andthe larger stakeholders in the area, such as government offi-cials or industry, to help promote and foster healthy relations-hips and mutually beneficial situations.”

Further, development agencies and governments cooperateto create appropriate health, safety and environmental stan-dards, and to improve health and safety education. They helpgovernments regularize and mainstream ASM by developingmining policy and legislation that recognize ASM, developingprograms to upgrade their skills and increasing their access tofinancing and markets.

Agencies can also influence intergovernmental negotia-tions. “Issues of environmental contamination, global healthand the global gold supply chain are at a multinational level,”says Moher. “It’s not a localized issue or concern.”

Elusive answersFormalization is a challenging goal and one that requires

multiple stakeholders at all levels – from local initiatives toglobal, intergovernmental policy and standards – but in theend it may be the only way to achieve a safe and viable ASMsector.

“Some form of increased regulation over this industry isabsolutely necessary,” contends Sinclair. “Call it formalizationor call it just increased application of common sense rule oflaw, and basic standards.”

“We’ve tried a lot of things as an industry but very few havebeen successful, to be honest,” says Sinclair. “There’s been alot of studies, a lot of consultation and conferences on ASM.At the end of the day it is very difficult because it’s a basic live-lihood, it’s very difficult to organize, and it involves so manypeople. It’s not a small challenge.” CIM

A woman picks through the waste rock of the Cuatro Horas mining cooperative near Nazca, Peru. The value chain of ASM mines is often complicated and can varydramatically in levels of formalization and safety.

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marché légal, elles se tourneront vers le marché noir, ou vers desgroupes armés qui profitent de ce commerce.

Les risques en termes de sécurité sont évidents, mais ceuxde la responsabilité pas autant. Par exemple, il est difficile desavoir qui est responsable si un tunnel illégal s’effondre sur laconcession d’une société, blessant ou tuant des mineurs. Si unesociété offre son aide à une mine illégale, elle court le risqued’être accusée d’association à des activités minières illégales.

Il n’est donc pas surprenant que de nombreuses sociétésminières soient réticentes à s’engager avec des ASM, sauf àl’étape de l’exploration lorsque leur présence sert souvent d’in-dicateur de potentiel minéral. Une fois que commence la phasede développement, toute interaction est souvent perçue commebien trop risquée. Même la présence d’une activité d’ASM

L’union ne faitpas la forcePar Correy Baldwin

November 2013 | 49

Une femmecherche desroches stérilesdans la coopérativeminière de CuatroHoras près deNazca, au Pérou.

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L’exploitation minière artisanale et à petite échelle (ASM)peut paraître sans importance, et pourtant sa présence àl’échelle mondiale vient prouver le contraire. D’après ASM-PACE, une ONG axée sur le secteur de l’ASM, on compte auniveau mondial près de 20 millions de travailleurs dans le sec-teur ASM. Le secteur aurifère à lui seul emploie quelque15 millions de mineurs ASM dans 72 pays, ce qui représenteenviron neuf fois le nombre de personnes travaillant dans desmines d’or de grande envergure. Avec un effectif si importantdans ce secteur, on peut imaginer les enjeux considérables aux-quels font face les travailleurs des petites mines.

« Certains puits sont si profonds qu’on peut à peine discernerles mineurs qui travaillent là-dedans et qui creusent et soulèventdes seaux remplis de minerai », déclare Thabani Mlilo, directeurde la section Durabilité pour les Amériques à Anglo-Gold Ashanti. Il ajoute que ce genre d’exploitationminière est souvent mené sur des roches qui n’ontjamais été soumises à des essais géologiques, et dontl’intégrité géologique est inconnue.

Les travailleurs du secteur ASM n’ont générale-ment pas suivi de formation adaptée et manquentde qualifications techniques; par ailleurs, les sites nesont souvent pas conformes aux normes opération-nelles, de sécurité, environnementales et profession-nelles. Très souvent, les exploitations ASM nepeuvent obtenir de titres valables en droit. Si ellesne parviennent pas à vendre leur minerai sur le

L’exploitation ASM définie :Toute activité d’exploitation minière ou de traitement menée par despersonnes qui peuvent avoir créé un collectif ou une coopérative afind’entreprendre ces activités. L’échelle de l’activité peut s’étendre d’uneseule personne à des collectifs plus vastes composés de centaines, voirede milliers de personnes travaillant dans un domaine dont le dénominateurcommun est un faible niveau de mécanisation. Plus familièrement, lesmineurs d’ASM sont appelés par différents noms, dont galamsey (Ghana),orpailleurs (RDC), garimpeiros (Brésil), Zama Zamas (Afrique du Sud) etBarequeros (Colombie). L’activité d’une ASM peut être légale ou illégale.

Pour un petit groupe de mineurs privilégiés, la culture de la sûreté s’est considérablement améliorée ces dernières années.Les sociétés minières font maintenant partie des employeurs les plus sûrs au monde, et les directeurs de ces mines sont bienconscients du changement culturel qui était nécessaire pour y parvenir. Mais pour la plupart de la main-d’œuvre du sec-teur minier au niveau mondial qui travaille dans des exploitations artisanales et de petite taille, la santé et la sécuritépassent souvent au second rang, voire pire. Étant donné que les sociétés continuent d’exploiter ces sites dangereuxou leurs alentours, dans quelle mesure pouvons-nous les aider ?


illégale sur une concession s’accompagne d’une multitude derisques, tant en termes de sûreté, de sécurité et de risques envi-ronnementaux que de responsabilité et de réputation. Cepen-dant, pour les sociétés minières qui se trouvent à proximité deces petites mines vulnérables, l’engagement avec le secteur ASMest certes un risque, mais il représente aussi une occasion d’aiderles communautés locales; et cela peut donc avoir un fort impactsur leur santé et leur bien-être.

De longues histoiresAngloGold Ashanti développe actuellement son projet de

Gramalote, une entreprise commune avec B2Gold, dans larégion montagneuse d’Antioquia, à environ 220 kilomètres aunord-ouest de Bogota. « L’exploitation minière artisanale est uneactivité qui se perpétue de génération en génération dans cetterégion de Colombie », explique Nathan Monash, vice-présidentde la société à la section Durabilité.

Le projet de Gramalote est certes nouveau, mais l’ASM existedepuis très longtemps à Antioquia. « On ne trouve pas uneseule famille dans la communauté locale qui ne soit pas liée auxactivités minières artisanales », explique M. Monash.

Cependant, on ne tient que rarement compte des besoinsde la communauté locale des ASM. « On observe un manqued’engagement important entre le secteur formel et le secteurinformel », explique Kevin Telmer, directeur général d’Artisa-nal Gold Council (AGC), une ONG qui travaille directementavec le secteur ASM.

La complexité du problème le rend très difficile à résoudre,explique Peter Sinclair, vice-président de la RSE chezBarrick Gold. « Beaucoup de personnes se sont penchées sur leproblème et pensent qu’il est trop complexe. De nombreusesONG l’ont envisagé du point de vue du développement et ontconstaté à quel point il était compliqué. L’exploitation minièreartisanale recèle beaucoup de choses très dangereuses, pas danstoutes les situations bien sûr, mais elle peut se révéler très ris-quée, ce qui n’encourage pas les organisations à s’impliquer. »

La mine de Mara-Nord en Tanzanie, propriété d’African Bar-rick Gold, a requis une attention particulière quant aux pro-blèmes des ASM. La société s’inquiétait particulièrement de laprésence d’un groupe de femmes qui venaient sur le site minierillégalement pour ramasser des roches qu’elles emportaient avec

elles pour les concasser puis les vendre comme agrégats. Leurentrée non autorisée sur le site était dangereux des points devue de la sécurité de la mine autant que sur le plan personnel.Ainsi, explique M. Sinclair, l’exploitation a mis en œuvre unprogramme visant à fournir à ces femmes l’équipement et la for-mation nécessaires pour qu’elles puissent poursuivre leurs acti-vités dans des conditions plus sûres et aussi de manière plusrégulée et durable. La société a fourni 10 concasseurs motoriséset donnera à ces femmes des roches stériles pour leur traite-ment. M. Sinclair et son équipe œuvrent actuellement au déve-loppement du réseau électrique jusqu’au site. « Tout le mondey gagnera; d’une part, les femmes travailleront dans un envi-ronnement plus sûr et d’autre part, les activités minières neseront pas affectées outre mesure. »

African Barrick Gold a aussi eu à faire à un groupe qui voulaitretraiter les roches stériles provenant des petites exploitationsminières. « Nous avons perçu les dangers évidents associés àcette pratique pour l’environnement », déclare M. Sinclair.« Aussi, nous l’avons structuré de manière à ce qu’elle soit plussûre. Nous avons aidé les membres de ce groupe à comprendrel’usage et la manipulation du cyanure et également à obtenir lespermis environnementaux nécessaires. »

De bonnes raisons d’agirLorsque l’on décide de s’adresser à une communauté ASM

au sein et autour d’une zone à potentiel, il faut bien compren-dre les racines historiques du lieu. Dans certains cas, les socié-tés peuvent acquérir des concessions qui ont été exploitées demanière non formelle par des populations locales depuis desannées, voire des générations. La relocalisation peut doncreprésenter une perturbation majeure pour les communautéslocales.

« Dans des pays comme la Tanzanie et le Ghana, nos travauxinternationaux avec les mineurs artisanaux sont bien plus com-plexes », explique M. Mlilo d’AngloGold Ashanti. « Nous avonsracheté [et non développé à partir de projets d’exploration] unebonne partie de nos mines en Afrique, aussi nous n’avons évi-demment pas eu la possibilité de mettre en œuvre les bonnespratiques dès le début. »

Dans le cadre du projet de Gramalote, AngloGold Ashanti apu adopter une nouvelle approche. L’une des premières étapesa consisté à mieux comprendre l’activité locale des ASM, ainsique la communauté ASM qui serait affectée par le projet. Lasociété a examiné le conflit historique dans la région, les partiesprenantes locales dans la communauté au sens plus large ainsique la structure et la chaîne de valeur de l’ASM.

AngloGold Ashanti a contacté les travailleurs d’ASM en vuede leur proposer des activités économiques de remplacement,à savoir les éloigner de l’exploitation minière pour les rappro-cher d’une autre activité économique. En fin de compte, lacommunauté a collaboré avec la société pour la rédaction dela proposition, mais uniquement, comme l’expliqueM. Monash, car Gramalote avait en premier lieu établi une rela-tion solide basée sur la confiance avec cette communauté. Cer-tains des mineurs souhaitaient travailler pour la société,d’autres préféraient garder leur indépendance, et Gramalotes’est associé à deux agences colombiennes pour répondre auxsouhaits des deux parties.

Un groupe de mineurs ASM reçoit une formation organisée par l’Artisanal GoldCouncil, qui porte notamment sur les façons de réduire l’exposition au mercure.

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« Cela peut sembler surprenant », déclare M. Monash.« Compte tenu du caractère très ancien des activités minièresartisanales dans de nombreuses régions, un retournement versdes activités agricoles n’est souvent pas viable. Les compétencesrequises ne sont pas très courantes. Si l’on ne subventionne pascette activité économique de remplacement, qui est elle-mêmefort susceptible de ne pas être durable, la transition devient rela-tivement difficile. »

À Gramalote, la société travaillait avec relativement peu demineurs ASM. « [On en comptait] quelques centaines et nonpas des milliers ou des dizaines de milliers », déclareM. Monash. « En fin de compte, nous souhaitions accompagnerces mineurs artisanaux vers un avenir nouveau, un avenir oùils ne travailleraient plus dans l’exploitation minière. »

Il a été difficile de s’assurer que la communauté soutenaitcette idée. « Le désir de s’éloigner de l’exploitation minière arti-sanale est bien présent, mais seulement si l’on propose une meil-leure solution », explique M. Monash. « C’est là toute ladifficulté avec les activités économiques de remplacement : lesactivités minières artisanales ont lieu pour une raison spécifique;il s’agit de la meilleure option économique pour les personnesqui l’entreprennent. Dans beaucoup de régions, cette activitéest bien plus rentable que l’agriculture. »

Renforcer le secteur ASMD’après Paleah Moher, agent de la santé des personnes et

des écosystèmes à AGC, les mineurs artisanaux souhaitentaméliorer les conditions de travail dans leur exploitation. « Quevous soyez mineur artisanal ou PDG à Toronto, tout le mondeveut avoir accès à des possibilités d’emploi équitables et desconditions de travail sûres. Les mineurs avec lesquels nous tra-vaillons ne font bien évidemment pas exception à la règle. Ilssouhaitent bénéficier de la santé et la sécurité au travail, maisil leur manque les ressources nécessaires ainsi qu’une formationfondamentale. Dès qu’on leur donne les ressources écono-miques ou les dispositions technologiques requises, onconstate qu’ils sont souvent facilement adoptés au sein de lacommunauté, surtout s’il y a une bonne raison derrière cetteincitation économique. »

Il est difficile de remédier au sort des mineurs artisanauxsans un soutien externe. « La contribution du secteur formelest essentielle si l’on souhaite réellement que l’exploitationminière artisanale s’améliore à grande échelle, aussi il ne s’agituniquement d’améliorer un projet de développement de-ci de-là », déclare M. Telmer d’AGC. « Les grandes exploitations dusecteur disposent des ressources nécessaires; elles sont sur leterrain et ont l’expertise requise. »

Les mineurs artisanaux manquent aussi d’un accès à plu-sieurs services qui pourraient être fournis par les plus grandessociétés, notamment des services d’aide en cas d’urgence et pourle sauvetage minier, des services abordables de dosage ou debroyage du minerai ou encore des locaux affectés à d’éventuelsateliers. Les grandes sociétés peuvent acquérir et traiter lesroches stériles des exploitations ASM, aider à stocker les explo-sifs ou mettre en place des installations de traitement à petiteéchelle. Une contribution financière modeste peut aider lesexploitations ASM à acquérir l’équipement de sécurité ou autrenécessaire ainsi qu’à obtenir une formation.

« Les sociétés peuvent également contribuer à la moderni-sation et la formalisation des exploitations artisanales en pro-mouvant leur participation à des systèmes de certification desminerais, ce qui facilitera leur accès au marché et garantira demeilleures normes de production », déclare Nicholas Garrett,responsable de la section Pratiques de durabilité à RCS Global,qui a travaillé avec AngloGold Ashanti à Gramalote et ailleurs.« Ce processus peut impliquer de fournir une assistance tech-nique aux exploitations artisanales, souvent avec l’aide de socié-tés de conseil ou d’ONG. »

Trop de personnes pour simplementrelocaliser

Dans certains cas, le meilleur scénario peut impliquer lacohabitation, lorsque les mineurs ASM sont autorisés à travaillersur la propriété d’une société, ou qu’une société leur cède unepartie de sa concession.

« La cohabitation est une très bonne option qui n’a pas étésuffisamment explorée », déclare M. Telmer. « Il est rare quedeux groupes ciblent la même ressource, aussi les possibilitéssont nombreuses. » Une exploitation artisanale, ajoute-t-il, peutgénérer des profits en exploitant une tonne de minerai par jourà partir d’un seul filon, pour produire au final quelques cen-taines d’onces d’or, une quantité qui ne présente aucun intérêtpour une grande société.

« Cette approche devient alors plus intéressante », suggèreM. Garrett, « si l’on considère que dans certains contextes, ilserait pratiquement impossible d’avoir recours à des approchesplus traditionnelles comme la relocalisation si l’on se trouve enprésence d’un plus grand nombre de mineurs artisanaux. Dupoint de vue de l’atténuation des risques, il est parfois plus inté-ressant de chercher des moyens et options de cohabitation. »

Cependant, M. Garrett rappelle que cette relation s’accom-pagne de risques qui lui sont propres. « Si la cohabitation a lieusur votre concession, on associera dans une certaine mesure lesconditions de travail de l’exploitation minière artisanale et laréputation de votre société. »

« La cohabitation n’implique pas nécessairement que vousdéveloppiez une relation commerciale avec le mineur artisanal,mais elle pourrait cependant impliquer que vous apportiez une

Un travailleur prépare les matières premières pour le broyeur dans la coopérativeminière de Cotapata dans la province de La Paz, en Bolivie. Cette exploitation ASMest la première mine au monde certifiée équitable.

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aide technique ou d’une autre nature à l’exploitation artisanale,particulièrement en matière de sécurité opérationnelle etminière, soit par le biais de la société soit, plus vraisemblable-ment, par le biais de tiers. »

Une notion similaire a été adoptée par les gouvernements, eta engendré des résultats mitigés. « Dans certaines régions de Tan-zanie, le gouvernement a désigné des zones où les mineurs arti-sanaux peuvent procéder à l’exploitation en toute sécurité »,explique M. Mlilo, qui ajoute que cette idée a rencontré plusieursobstacles. « Il est bien plus facile d’obtenir des matériaux conte-nant du minerai à partir d’une concession existante que de se lan-cer sur un terrain dont on ne connaît pas la qualité du minerai. »

D’après M. Sinclair de Barrick, le gouvernement tanzaniensouhaite mieux comprendre et réglementer son secteur artisa-nal, une approche à laquelle l’industrie peut contribuer en dis-pensant ses conseils. « African Barrick Gold collabore avecAngloGold Ashanti et la Banque mondiale ainsi que d’autresorganisations pour préconiser une approche plus réglementéeet formalisée de l’exploitation minière artisanale dans l’ensembledu secteur », déclare M. Sinclair, ajoutant que « le gouverne-ment tanzanien soutient totalement cette approche. »

Des structures formelles rigides qui ne sontpas toujours efficaces

La formalisation des ASM est défendue par la communautédu développement qui cherche à faire évoluer le secteur de sesinitiatives ad hoc localisées actuelles vers une approche organiséeapplicable à l’ensemble de l’industrie. Un secteur ASM formaliséayant obtenu les permis nécessaires et disposant d’une certainesupervision de la sécurité pourrait aussi, selon certains, profitersur le plan économique aux gouvernements locaux qui ne peu-vent taxer les concessions qui n’ont jamais été enregistrées.

M. Monash se veut optimiste et déclare qu’à l’avenir, les acti-vités minières ASM continueront de constituer une activité éco-nomique nécessaire pour les communautés locales, tout enabordant les enjeux environnementaux, sociaux et de sécuritéque connaissent les exploitations artisanales actuellement. Maisil fait également remarquer que pour atteindre cette vision, ilconvient d’établir une collaboration entre les ASM, le gouver-nement, la société civile, les ONG internationales et les grandesexploitations minières. Il s’agit là d’une tâche complexe quirequiert des compromis. En développant les partenariats requis,prévient M. Monash, « nous devons nous assurer de ne pas lais-ser le mieux être l’ennemi du bien. »

Ironiquement, M. Sinclair ajoute que dans un contexte oùles grandes sociétés mettent en œuvre des politiques plusstrictes pour leurs propres exploitations, il devient de plus enplus difficile de travailler avec des exploitations ASM. Les lignesdirectrices et les normes internationales, telles que le récentguide de l’OCDE sur les minerais provenant de zones de conflitet les chaînes d’approvisionnement responsables ainsi que lanorme relative à l’exploitation aurifère sans conflit du WorldGold Council (le Conseil mondial de l’or), luttent pour trouverle meilleur moyen de gérer l’exploitation minière artisanale.

« Avec ces normes, il est bien plus difficile pour les mineursde petites exploitations de travailler dans la chaîne d’approvi-sionnement car elles cherchent tout simplement à réglementerla circulation en aval du minerai, ce qui affecte la source »,

explique-t-il. « L’industrie a mis ces normes en pratique pourde bonnes raisons, mais l’impact s’est fait ressentir. En effet, ellesrisquent malheureusement d’anéantir les possibilités qui s’of-frent aux mineurs artisanaux. »

Selon M. Telmer, les ONG joueront toujours un rôle crucialétant donné que les sociétés minières sont redevables aux par-ties prenantes et ne peuvent échapper à cette réalité. « Si l’onobserve ce problème en envisageant les risques, pourra-t-onassurer le type d’innovations qui sont requises pour rendre cesecteur durable ? Je suis tenté de dire que non; il n’est pas trèsutile de l’envisager ainsi. »

Les agences de développement disposent de la flexibiliténécessaire pour aider les sociétés minières et les gouvernementsà obtenir des résultats positifs. « Chaque lieu et petite commu-nauté minière avec lesquels nous collaborons dispose d’unensemble de circonstances uniques et s’accompagne de condi-tions et de besoins particuliers », déclare Mme Moher d’AGC.

Comprendre ces circonstances, dit-elle, permet à son orga-nisation d’agir en tant que tierce partie efficace et neutre.« L’avantage de travailler directement avec des mineurs artisa-naux est que nous tenons lieu de lien, ou de voix, entre cesmineurs artisanaux et les plus grandes parties prenantes de cedomaine, par exemple des représentants officiels du gouverne-ment ou l’industrie, et nous pouvons promouvoir et encouragerdes relations saines ainsi que générer des situations mutuelle-ment avantageuses. »

Par ailleurs, les agences de développement et les gouverne-ments coopèrent afin d’établir des normes appropriées en matièrede santé, de sécurité et d’environnement, et d’améliorer l’éduca-tion en matière de santé et de sécurité. Elles aident les gouverne-ments à régulariser et à intégrer les ASM en développant unepolitique et une législation minières qui reconnaît les ASM, enétablissant des programmes pour améliorer leurs compétences eten renforçant leur accès au financement et aux marchés.

Ces agences peuvent aussi influencer les négociations inter-gouvernementales. « Les problèmes de pollution environne-mentale, de santé mondiale et de chaîne d’approvisionnementmondiale en or nous touchent à un niveau multinational »,explique Mme Moher. « Il ne s’agit pas d’un problème ou d’unepréoccupation localisés. »

Des réponses insaisissablesLa formalisation est un objectif difficile à atteindre qui requiert

la participation de plusieurs parties prenantes à tous les niveaux(des initiatives locales aux politiques et normes mondiales etintergouvernementales), mais en fin de compte, cela pourrait êtrela seule façon de parvenir à un secteur ASM sûr et viable.

« Une certaine forme de réglementation renforcée dans cesecteur est absolument nécessaire », prétend M. Sinclair. « Appe-lez-la formalisation, ou simplement application renforcée de laprimauté du droit élémentaire et des normes fondamentales. »

« Nous avons tenté de nombreuses options en tant qu’in-dustrie, mais à vrai dire, peu ont abouti », déclare M. Sinclair.« Beaucoup d’études, de consultation et de conférences ont lieusur l’ASM. En fin de compte, la tâche est loin d’être simple caril s’agit d’une activité économique de base qui est très difficile àorganiser et qui implique beaucoup de personnes. C’est unenjeu de taille. » ICM

have the management team in place, a mill manager, a minemanager and me,” said Jerry Janik, the mine’s general man-ager, in September. “Combined, we’re pushing 70 years ofmining experience. We have about 20 other employees, afairly good workforce in the area and a good training planbeing put together for those used to heavy industry, such aslogging. We will provide about 80 full-time jobs.”

Also in September, the company released a new NI 43-101 study completed by Golder Associates Ltd., using his-torical drill data as the well as the results of a dozen new

W hile graphite is considered a niche market, it is anessential one. The mineral’s heat resistance makes ita key material for the magnesia-carbon bricks that

line steel-making furnaces, foils and gaskets. It is also usedin lithium-ion batteries, lubricants, solar cells, fuel cells and,of course, the humble pencil – with about 14 billion soldannually.

With all its major equipment on site, Ontario Graphitehas been building its team and gearing to start operations inearly 2014 and ramp up over the course of the year. “We

November 2013 | 53

K E A R N E Y M I N E | project profile

POISED TO COMPETE

Just four kilometres west of Algonquin Park, near the town of Kearney, Ontario, liesone of the largest confirmed mineral resources of any North American graphiteproject. Discovered in 1979, it is rich with high-quality, large-flake graphite thatcommands top prices. Global market forces and production troubles frustrated thefirst attempt to exploit the resource, but now, 20 years after the Kearney mine shutdown, Ontario Graphite is bringing the re-engineered operation back to life.

BY | ALEXANDRA LOPEZ-PACHECO

The Kearney Mine pit, pictured in 2012 with the de-watering process 90% complete

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drill holes. The report estimates the mine’s mineral inven-tory to be 51.5 million tonnes of Indicated MineralResources at an average grade of 2.14 per cent carbongraphite (Cg), plus an additional 46.8 million tonnes ofInferred Mineral Resources at an average grade of 2.0 percent Cg – adding some 20 more years to the mine’s existing30-year life. While the current permits for the operation arefor 20,000 tonnes of material extracted annually for up to 10years of mining activity, the company expects no issues ingetting renewals when the time comes. Canada’s graphiteproduction – currently about 20,000 tonnes per year –comes from two mines, one in B.C., and one in Quebec.

In 1989, Cal Graphite began milling ore from the openpit at the Kearney mine, and over the next five years pro-duced almost 17,000 tonnes of flake graphite for Canadianand U.S. customers.

By the early 1990s, however, the company was underenormous pressure from an ever-growing giant in China,which was fuelled by the growing belief across the manufac-turing sphere that the road to success was paved with low-cost and low-quality graphite. And in those days, China,which has the world’s largest graphite resources, was themecca for cheap product. It flooded the market with mainlylower-quality small flake graphite. Prices crashed. Canadianexports dropped 10 per cent, and China strengthened itshold on the graphite market.

Production and management problems at the Kearneymine compounded those market pressures, and in 1994 theoperation was shut down. In the meantime, global demandfor graphite has continued to grow rapidly. In fact, itincreased from 600,000 tonnes in 2000 to 1.1Mt in 2011.By 2005, prices began to increase, and this renewed interestin past producers. The following year, the mine propertywas acquired by iCarbon, which was renamed OntarioGraphite Ltd. In 2009, the company’s plans to re-commis-sion the mine were in high gear.

Getting ready Ontario Graphite, owned and financed by a consortium

of private equity organizations, and led by an experiencedmanagement team, knew the first step to succeeding was toidentify what had gone wrong in the original operation. “Inthe early 1990s, there was a confluence of unfortunate cir-cumstances at the macro and the micro levels,” said EllertonCastor, the company’s CFO. On the macro side, there wasChina’s dominance. The country still accounts for 80 per-cent of all graphite production in the world.

As well, the Kearney mine was choking with inefficien-cies and bottleneck problems, and it never did achieve itsplanned raw ore throughput rate of 3,000 tonnes per day.

But today, fortune is smiling on graphite producers.Graphite prices have been on an uphill curve, despite fluctu-ations, with large flake prices at around $1,400-$1,800 pertonne in the last year. China’s graphite sector is undergoingchanges that will remove a good chunk of graphite from the


project profile | K E A R N E Y M I N E

Low-risk rewardIn 2010, China began consolidating 200 to 250 illegal,

privately owned graphite mining operations, reportedly inan effort to be more proactive in addressing the mines’harmful environmental impacts by putting them understate control. The impact of this is estimated to be a reduc-tion of roughly 200,000 tonnes per year in graphite put outto the world market. Further, in an effort to keep graphite– which is considered a critical manufacturing resource –for domestic use, China has imposed a 20 per cent exportduty on graphite and a 17 per cent value added tax.

“China has an impact not just on production, but alsoin terms of exporting and they can pull levers such asexport duties, which ultimately affects how much getsexported and the landed price in North America,” says JayPatel, who leads Ernst & Young’s mining and metals valu-ation practice in Canada. “So North American manufactur-ers using graphite in their projects have to look at the riskand volatility in the price they are getting. Is the pricegoing to change on them? Is there a supply risk? And Ithink that’s where the North American graphite producershave an advantage. They assure the manufacturers thereisn’t a supply risk.”

In addition to all this, should the electric car market gearup in the coming years, the demand for lithium-ion batter-ies would take off – as would the need for graphite. All thishas not been lost on project developers, especially sincemanufacturers in the United States are among the world’stop graphite users despite the country producing very littleof its own. According to a July 2013 report by U.K.-basedRoskill Information Services on the graphite industry,“There are now more than 70 flake graphite projects underdevelopment outside China, which have the potential toadd 200,000 tonnes per year to global capacity by 2016.”Some 40 of those are in Canada, with almost all still in theearly exploration stage. This puts Ontario Graphite at thehead of the pack, with Ottawa-based Northern GraphiteCorporation the runner-up. The company aims to be in pro-duction in early 2015, if it can finance the project.

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of complex supply chains dependent on products fromChina are now better understood. From transportation andwarehousing costs to reliability of timely delivery and quality,no longer does the cost/value formula of importing fromChina seem as straightforward as it once did.

global market (see sidebar). In recent years, scrutiny of the“cheaper at all costs” formula has been growing, includingfrom the Chinese, who are reckoning with the environmentalimpact that follows from this approach. In addition, wageshave increased in China, and the long-term and hidden costs

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K E A R N E Y M I N E | project profile

The mine is located about 100 kilometres south of North Bay, Ontario.

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Power was a problem for the original operators of the mine.Off the grid, the mine simply did not have enough generatingpower to maintain plant production. This time, Ontario

Graphite will run three 1.24-megawattdiesel generators for plant operations andhave a fourth on standby.

A new 5.5-metre, hydraulically drivenSAG mill has been installed on the existingmill foundation. The company is alsoadding additional flotation circuits on thehead end of the ball mill to improve bothrecovery and quality, especially of coarsegraphite. “The coarser it is, the more it isworth,” says Janik. “So the challenge is toliberate the graphite without breaking theflake. That is a processing and mining

challenge. We’re addressing that right from the drill-blastpattern, how we haul and how we crush and size the mate-rial for flotation and with the extra flotation we’re putting into capture what was lost in the previous operation,” hepoints out.

Other new equipment includes high-efficiency horizontalscreens that are easy to maintain and fully enclosed to containdust. Waste heat from the generators will be used to dry thegraphite concentrate to make the most of the fuel burned forpower generation.

Go! The Kearney mine is about 100 kilometres south of the

mining supply hub of North Bay and a few hours’ drive fromport facilities on the Great Lakes. Ontario Graphite expects areturn on investment within six months, once shippingbegins in early 2014. The bulk of the mine’s output will beused in the production of graphite foil and gaskets. “Most ofthe Chinese material flooding the market is medium-sizedproduct,” says Michael Coscia, the company’s senior vice-president of sales and market strategy. “Ours is predominantlylarge flake (+50 to +80 mesh with purity between 92 and 97per cent). We still will never be as cheap as them, but we willbe very competitive.” CIM

“Now you have a scenario where the North American andEuropean clients to whom we plan on selling our graphite areinterested in an industrialized-world supply they can count onas a secure source of large flake graphiteprovided over a long period of time,” saysCastor. “The logistics issue is coming intoplay. They are looking to ensure that theprocess of managing their supply line is asefficient as possible. Quality control is theother issue. One of the biggest concerns inbuying from China is getting exactly what itis you pay for. You don’t want to be in a sit-uation where you prepaid for a product andthen you wait six to eight weeks for it toarrive via containers, and the product thatyou think you are getting is not exactly upto snuff and has to be preprocessed prior to being introducedthrough a manufacturing process. That costs money.”

Getting set by doing it rightOntario Graphite began its EPCM process with a small

engineering firm. It quickly realized, however, that the minewould need a comprehensive plan not to just re-commission itbut also re-design the mine in order to address the bottleneckissues that were largely engineered into the system, and to cre-ate an operation capable of optimal production at all times. Ithired international engineering firm DRA Americas Inc. andVancouver-based project and construction management firmMerit Consultants International Inc.

“We have spent a lot of time redesigning the plant to be muchmore efficient, and that really goes from the mining methods,the drilling blasting methods, through to power generation,”says Janik. “We have built in some redundancy to the capitalequipment, so if we have to do repairs we can maintain produc-tion.” Contractors will handle the drilling and blasting, with thecompany managing the mine planning and all subsequent min-ing steps. “The goal is to use the rock stability to our advantageand to maximize the pit angle in order to minimize the amountof necessary waste removal,” he says. “We anticipate that thenew mine plan will include a 3:1 stripping ratio or less.”


project profile | K E A R N E Y M I N E

PROJECT SPECSRE-COMMISSIONING COST: $67 million

MINERAL RESOURCE

INDICATED: 51.5 million tonnes at an averagegrade of 2.14 per cent carbon graphite

INFERRED: 46.8 million tonnes at an averagegrade of 2.0 per cent carbon graphite

MINE LIFE: 50+ years

MINING FLEET: 4 Cat 775 haul trucks, 1 Cat990 front-end loader, 1 Cat 390D excavator

THROUGHPUT: 3,000 tonnes per day

OUTPUT: 20,000 tonnes per year of large-flakegraphite

The mine operated for five years before stiff competition and production problems led to the stoppage of production in 1994.

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November 2013 | 57

L A M I N E K E A R N E Y | profil de projet

En 1989, la société Cal Graphite Corporation a commencéses opérations de broyage du minerai de la mine à ciel ouvertde Kearney, et au cours des cinq années suivantes, elle a produitprès de 17 000 tonnes de graphite en paillettes pour des clientscanadiens et américains.

Au début des années 1990 cependant, la société a subi lapression importante d’un géant chinois, lequel semblait êtrepersuadé que la voie de la réussite passait par la production degraphite de mauvaise qualité à bas prix. À cette époque, laChine, qui détient la majeure partie des ressources mondialesen graphite, était le paradis des produits à bas prix ; elle aenvahi le marché avec des petites paillettes de graphite, princi-palement de mauvaise qualité. A suivi un effondrement des prixainsi qu’une baisse des exportations canadiennes de 10 %, cequi a permis à la Chine de renforcer ses bases sur le marché dugraphite.

Les problèmes de production et de gestion à la mine Kearneyont aggravé la pression du marché, et en 1994, l’exploitationfermait ses portes. Entre-temps, la demande mondiale engraphite a continué d’augmenter rapidement, pour passer de600 000 tonnes en 2000 à 1,1 million de tonnes en 2011.En 2005, les prix ont commencé à augmenter, ce qui a généréun regain d’intérêt de la part des anciens producteurs. L’annéesuivante, la mine était rachetée par iCarbon, qui a par la suitechangé son nom en Ontario Graphite Ltd. En 2009, le projet dela société de remettre la mine en service battait son plein.

Se préparer - Tirer des enseignements de noserreurs passées

La société Ontario Graphite est détenue et financée par unconsortium d’organismes de capital-investissement, et gérée parune équipe de direction chevronnée. Elle savait que pour réus-sir, il lui fallait identifier les erreurs qui s’étaient initialementproduites dans l’ancienne exploitation. « Au début desannées 1990, nous avons été victimes d’un concours de circon-stances malheureuses aux macro- et micro-niveaux », expli-quait Ellerton Castor, directeur financier de la société. Aumacro-niveau, nous avons subi la prédominance de la Chine,laquelle représente encore aujourd’hui 80 % de la productionmondiale totale de graphite.

L e graphite est considéré comme un marché peu étendu,mais il est pourtant primordial. La résistance à la chaleurde ce minerai en fait un matériau important pour les

briques de magnésie-carbone qui entourent les fours dédiés à lafabrication d’acier, ainsi que pour les feuilles de métal et lesjoints d’étanchéité. On l’utilise aussi dans les batteries aulithium-ion (Li-ion), les lubrifiants, les cellules solaires, les pilesà combustibles et bien entendu, le modeste crayon gris qui sevend à 14 milliards d’exemplaires chaque année.

Tout l’équipement essentiel d’Ontario Graphite se trouvedéjà sur le site, aussi la société s’est concentrée sur la créationde son équipe et elle espère commencer l’exploitation début2014, puis accélérer les opérations pendant l’année. « Notreéquipe de direction, dont je fais partie et qui est aussi constituéed’un responsable des broyeurs et d’un responsable de la mine,est en place. À nous trois, nous réunissons près de 70 annéesd’expérience dans l’exploitation minière », expliquait en sep-tembre Jerry Janik, directeur général de la mine. « Nous avonsenviron 20 employés, une main-d’œuvre relativement qualifiéedans ce domaine et un plan de formation fiable en cours dedéveloppement pour les personnes habituées à l’industrielourde, comme la diagraphie. Nous prévoyons d’ouvrir environ80 emplois à temps plein. »

Ce même mois, la société a publié un nouveau rapportNI 43-101 réalisé par Golder Associates Ltd. à l’aide de donnéeshistoriques sur le forage ainsi que de résultats provenant d’unedizaine de nouveaux trous de forage. Le rapport estime l’inven-taire des ressources minérales de la mine à 51,5 millions detonnes de ressources minérales indiquées à une teneurmoyenne de 2,14 % de carbone-graphite (Cg), et à 46,8 mil-lions de tonnes supplémentaires de ressources minérales pré-sumées à une teneur moyenne de 2,0 % de Cg, ce qui vientajouter quelque 20 années supplémentaires au 30 années d’ex-istence de la mine. Les permis actuels d’exploitation autorisentl’extraction de 20 000 tonnes de matériaux sur une périodeallant jusqu’à 10 ans d’activité minière, mais la société pensepouvoir obtenir facilement des renouvellements le momentvenu. La production de graphite au Canada (environ 20 000tonnes par an actuellement) est assurée par deux mines, l’uneen Colombie-Britannique et l’autre au Québec.

La mine de Kearney, propriété d’OntarioGraphite, est située à 100 kilomètres

au sud de North Bay, en Ontario.

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PRÊT À AFFRONTER LA CONCURRENCEPAR | ALEXANDRA LOPEZ-PACHECO


profil de projet | L A M I N E K E A R N E Y

afin de ne pas avoir à interrompre la production au cas où nousdevrions effectuer des réparations. » Les contractants s’occuper-ont du forage et du dynamitage, et la société gèrera la planifica-tion de la mine et toutes les étapes ultérieures de l’exploitation.« L’objectif est d’utiliser la stabilité des roches à notre avantageet d’optimiser l’angle de talus de la mine afin de minimiser laquantité d’enlèvement des déchets nécessaire. Selon nos prévi-sions, le nouveau plan de la mine comprendra un coefficient derecouvrement de 3:1, voire moins », ajoute-t-il.

L’énergie électrique était un problème pour les premiersexploitants de la mine. Lorsqu’elle n’était pas connectée auréseau, la mine ne disposait tout simplement pas de suffisam-ment d’énergie électrique pour maintenir la production. Cettefois-ci, Ontario Graphite utilisera trois générateurs diesel de1,24 mégawatt pour les activités de l’exploitation et en aura unquatrième de secours.

Un nouveau broyeur SAG hydraulique de 5,5 mètres a étéinstallé sur la fondation du broyeur existant. La société ajouteégalement des circuits de flottation supplémentaires sur la têtedu broyeur à boulets afin d’améliorer la récupération et la qual-ité du minerai, surtout pour le graphite en paillettes grossières.« Plus les paillettes sont grossières, plus elles ont de valeur »,explique M. Janik. « Ainsi, il faut libérer le graphite sans détru-ire les paillettes, ce qui constitue une grande difficulté pour letraitement et l’exploitation. C’est exactement ce que nousessayons de faire avec la technique de forage et de dynamitage,dans la façon dont nous transportons, concassons puis cali-brons le matériel pour la flottation et avec cette flottation sup-plémentaire, nous tentons de récupérer ce qui a été perdu dansl’opération précédente », fait-il remarquer.

Le nouvel équipement compte des tamis horizontaux à hautrendement qui sont faciles à entretenir et totalement hermé-tiques de manière à contenir la poussière. La chaleur résiduelleprovenant du générateur servira à sécher le concentré degraphite afin de tirer au maximum profit du carburant utilisépour la production d’énergie électrique.

C’est parti ! La mine de Kearney se trouve à environ 100 kilomètres au

sud du centre d’approvisionnement minier de North Bay et àquelques heures de route des installations portuaires desGrands Lacs. Avec un tel emplacement stratégique, l’équipe dedirection prévoit de resserrer les liens avec des clientsd’Amérique du Nord, d’Europe et du Japon, et d’assurer lalivraison juste-à-temps, orientée client et fiable de grosses pail-lettes de qualité supérieure (volume de la maille de + 50 à + 80avec une pureté de 92 à 97 %). Ontario Graphite s’attend à unretour sur investissement dans les six mois, une fois que lesexpéditions commenceront début 2014. La majeure partie de laproduction de la mine servira à la production de feuilles et dejoints d’étanchéité en graphite. « La plupart du graphite chinoisenvahissant le marché est un produit de petite taille ou de taillemoyenne », déclare Michael Coscia, vice-président directeur dela société chargé des ventes et de la stratégie de marché. « Legraphite que nous proposons consiste principalement en degrosses paillettes. Nous ne serons jamais aussi peu chers que laChine, mais nous leur ferons fortement concurrence. » ICM

La mine de Kearney, par ailleurs, s’étouffait en raison de prob-lèmes d’inefficacités et d’obstacles, et n’a jamais atteint le tauxd’extraction de minerai brut prévu de 3 000 tonnes par jour.

Mais aujourd’hui, au macro-niveau, la fortune sourit auxproducteurs de graphite. Les prix du graphite sont sur unecourbe ascendante malgré les fluctuations, et les grosses pail-lettes se vendaient l’année dernière entre 1 400 et 1 800 $ latonne. Le secteur du graphite en Chine connaît des bouleverse-ments qui risquent de mener au retrait d’une bonne partie dugraphite vendu sur le marché mondial. Ces dernières années,beaucoup ont étudié de près la formule « moins cher à toutprix », y compris les producteurs chinois qui se rendent biencompte de l’impact environnemental qui découle de cetteapproche. En outre, les salaires ont augmenté en Chine, et l’oncomprend désormais mieux les coûts cachés et à long terme deschaînes d’approvisionnement complexes dépendant de pro-duits venant de Chine. Qu’il s’agisse des coûts de transport etd’entreposage ou de la fiabilité d’une livraison à temps et avecla qualité attendue, le rapport coût/valeur d’importation deChine ne semble plus être aussi simple qu’auparavant.

« Aujourd’hui, les clients nord-américains et européens àqui nous prévoyons de vendre notre graphite souhaitentassurer leur approvisionnement en grosses paillettes auprès depays industrialisés sur lesquels ils pourront compter pour unelongue période », ajoute M. Castor. « La question de la logis-tique entre aussi en ligne de compte. Les clients cherchent às’assurer que le processus de gestion de leur voie d’approvision-nement est aussi efficace que possible. Le contrôle de la qualitéest un autre problème. En effet, l’une des principales préoccu-pations lorsque l’on s’approvisionne en Chine est de s’assurerque la qualité du produit corresponde bien au prix que l’onpaye. Personne ne souhaite se retrouver dans une situation oùun produit est prépayé et où il faut ensuite attendre entre six ethuit semaines pour qu’il arrive par conteneurs ; sans compterque le produit peut ne pas être à la hauteur de nos attentes etdevra être prétraité avant d’être introduit par un processus defabrication. Tout cela coûte de l’argent. »

Se préparer en faisant ce qu’il fautLa société Ontario Graphite a entamé son processus

d’ingénierie, d’approvisionnement et de gestion de la construc-tion (IAGC) à l’aide d’une petite société d’ingénierie. Elle acependant rapidement réalisé que la mine aurait besoin d’unplan détaillé, non seulement pour sa remise en service maisaussi pour sa restructuration de manière à aborder les difficultésqui étaient largement intégrée au système et à créer uneexploitation pouvant assurer une production optimale à toutmoment. Elle a donc engagé la société internationaled’ingénierie DRA Americas Inc. ainsi que la société Merit Con-sultants International Inc. de gestion de la construction et desprojets basée à Vancouver.

« Nous avons passé beaucoup de temps à restructurer l’ex-ploitation de manière à ce qu’elle soit vraiment plus efficace, etnous avons pour cela revu nos méthodes d’exploitationminière, de forage et de dynamitage et même la productiond’énergie électrique », déclare M. Janik. « Nous avons aussiassuré une certaine redondance au niveau de notre équipement

November 2013 | 59

The fuel savings, reduced traf-fic, lower road maintenance costsand fewer diesel emissions thatin-pit crushing and conveyingoffer are persuasive arguments forsurface mine planners consider-ing this technology. However,IPCC, whether truly truckless or ahybrid of truck and conveyor use,is still rare compared to truck-based set-ups, especially in hardrock mines.

Basic IPCC equipment –shovel, crusher and conveyor –has been in place for a while,points out David Tutton, consult-ant mining engineer, but thedesign specifications and capabil-ities have changed over time.Conventional semi-mobile crush-ers can be extremely expensive to

move, with relocation costs in the hundreds of millions of dollars not unprece-dented. This has prompted suppliers to move away from semi-mobile systemsthat require concrete and instead adopt steel structures.

Glenn Davis, system solutions manager at FLSmidth Global Material Handling,says FLSmidth’s customers are asking for smaller, lighter, more easily relocatableequipment. Moreover, Davis says there are regions where mines need to keep itlight, as in Indonesia, Malaysia, and other places where competent road-buildingmaterial is scarce. That means relatively small, low-speed sizers, like FLSmidth’sABON twin-roll sizer, have widened their scope. “These low-speed sizers havegenerally been soft rock applications,” he says. “Well, now they’re getting biggerand more robust, and we’re starting to get those into the hard rock application.”

Maneuverability, elimination of cantilevered shock loading, and stability needsalso drove the development of Sandvik Mining Systems’ PF300 fully mobilecrushing station in 2007, according to Karl Ingmarsson, Sandvik’s product linemanager of continuous mining and IPCC. “The main difference is that the dis-charge boom was completely removed to instead be a part of the conveyor bridgeor belt wagon,” he says. “This has made the crushing station substantially moremaneuverable.”

TECHNOLOGY >> Materials handling

In-pit innovationBy Eavan Moore

In-pit crushing and conveying (IPCC) experts say, with the technology proven, the challengenow is to integrate the systems into mine plans that acknowledge and make use of thespecial constraints IPCC imposes – in ways that are unique to each site, lending variety tothe solutions demanded of suppliers.

Metso's Jorma Kempas says thecompany's line of Lokotrack fully mobilecrushers, including the LT140 shownabove, respond to the demand forrelatively small mobile units.

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Increased maneuverability was integral to the developmentof Sandvik’s PF300 fully mobile crushing station.


smaller equipment as well. The second-tier miners producing20 or 30 million tonnes a year will probably drive the defini-tion of IPCC equipment in the next 10 to 15 years.”

But Morrison’s suggestion is still larger than some mines pre-fer. Jorma Kempas, business manager, in-pit crushing solutions,mining and construction at Metso, says the company added a3,000-tonne-per-hour, fully mobile crusher to its Lokotrackline last year. He says the LT200 jaw crusher platform, whichcan be moved as often as twice per shift, could be boosted to5,000 tonnes on softer iron ores. But for harder ores, a large pri-mary gyratory crusher would be required, cutting down on

mobility. Metso will develop whatever provesfeasible, but, Kempas says, “Our motto is‘Bring the crusher to the rock,’” adding that “sofar the call has been for multiple smaller units.”

On the other end of the spectrum, JohnMcCarthy, project manager, IPCC systems atJoy Global, says his customers want largerwares. “Mine operators are looking to reducethe number of vehicles and people in the pit,”he says. “To move 10,000 to 20,000 tonnesper hour or more, smaller equipment is noteconomically viable. Smaller equipmentwould require more active benches and theconveyor system becomes more complex.”

Diverging development pathsDavid Morrison, manager of integrated mining systems at

Sinclair Knight Merz, believes there will be an industry-widetrend toward small crushing equipment with output in the4,000- to 5,000-tonne-per-hour range to match largehydraulic excavators. “The current cost paradigm in mines isthat the big rope shovels, serving the biggest trucks you canbuy, have the lowest unit operating cost,” he says. “Now, that’strue in the Western world. It’s not quite true in places likeSouth Africa, where they’ve started looking more at the pro-ductivity of the units because labour is not such a large part ofthe cost structure. And the iron ore industry typically uses

Sandvik's PX200 semi-mobile crusher, shown here at the Mae Moh coal mine in Thailand, relies on modular design to make its relocation easier.

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Joy Global is working on a 9,000- to 11,000-tonne-per-hour mobile crushing station that would be integrated with anelectric shovel, using an automated swing-to-hopper sequencerunning on its Centurion control system.“It maximizes pro-duction because you’re optimizing that swing cycle,” heexplains. “If you’re careful and come in slow, you’re not doingthe optimal production. In addition to improved cycle times,the system also prevents impacts between the dipper andcrusher, and minimizes spillage, which reduces time and effortrequired for cleanup between relocating the crusher.”

McCarthy says basic engineering on the 4107C has beencompleted, but the company is still seeking a customer to part-ner with. Despite a wave of interest in fully mobile crushingfour years ago, there have been “a minimal number of fullymobile mining crusher tenders,” he says.

Regardless of the manufacturer, the legacy of past mistakeswill have to be overcome, says Scot Szalanski, director of IPCCsolutions at Peck Tech Consulting Ltd.

He explains, “One of the historical problems with high-ton-nage mobile crushers was that they were often being built usingundercarriages based on spreaders or bucket-wheel excavators,which do not experience the same cantilever loads that hightonnage mobile crushers experience, A mobile crusher using anundercarriage designed for the digging demands of an electricshovel has proven to be more durable, and has been an impor-tant model for new high tonnage mobile crusher designs.” Theother issue relates to performance expectations. “Mines willperform their total cost of operation analysis, comparing IPCCand a truck fleet, and select the IPCC option,” Szalanski pointsout. “But what is forgotten is that IPCC is a series operation,and if any one component is not available or not operating atfull capacity the entire process suffers.”

Remote health monitoring is gaining traction industry-wideand, suggests Szalanski, will both improve availability of IPCCand give mine operators the information they need to betteroptimize the technology. McCarthy agrees that building in sen-sors that could predict failures ahead of time is a useful trend.“This is something that we do currently on our shovel andwe’re applying it towards our other products, which includecrushers and conveyors,” he says. Metso’s Lokotrack equip-ment also logs and transmits performance data.

Future courseBut no one, Szalanski included, thinks the reason for slow

uptake can be pinned on technology. Doug Turnbull, vice-president continuous mining and IPCC at Sandvik MiningSystems, comments: “The pace of change in technology is notthe issue. The real issue is the ability for change in mine plan-ning techniques to cater for a different mining methodologythat is accepted by industry in general. It does not help thatIPCC as a mining methodology is not even taught at mininguniversities globally and is one reason Sandvik is creating sucha curriculum due out for start of university year 2014. It tookmore than 30 years for underground longwall technology to beaccepted by industry. IPCC can either wait 30 years for similaracceptance levels or learn from the underground coal imple-mentation program, or, better still, learn from the more than200 existing operational IPCC sites in the world today.”

Miners have to resist thinking that they can treat IPCClike the off-the-shelf truck it is potentially replacing, sug-gests Turnbull. “Mine planning is different, mine layout isdifferent, dump development is different, conveyor reloca-tion is different, planning needs to be actually adhered to,which some call inflexibility,” he says. “There are existingmines in the world with IPCC that are exceedingly good atrelocating cheaply, quickly and easily – yet there are indus-try personnel who refuse to accept this is possible.” Part ofthe problem, he adds, is that the term “semi-mobile” is toobroad to be very useful when comparing current systemswith those of the past.

Tutton and Morrison agree that the specifics of the mineplan make or break IPCC. “Most suppliers generally look atthe benefits of IPCC from a unit operating cost point of view,while what drives operating mines is net present value, andthat’s very much dictated by the mine plan,” says Tutton,pointing out that the conveyor system cannot move with thevertical development rate usually dictated in copper andgold mines.

Morrison proposes that careful, original thinking couldhelp – as well as software better tailored to IPCC. “Because inIPCC cases, the capital cost is a very large component of thetotal life of mine cost, and because a large portion of the totallife of mine cashflow is actually spent before the operationsstart, this is a substantial problem. Most of the analysis soft-ware that’s available for this sort of early-phase study doesn’tgive you an answer that reflects this situation,” he says. “Itoften gives you the wrong answer, in fact. Until that situation’ssorted out, it’s really going to struggle to gain any traction. Andso there’s a whole knowledge base that needs to be created inthe support industry.” CIM

Joy Global is developing a mobile crusher that can handle 9,000 to 11,000tonnes per hour and work in concert with its P&H electric shovel.

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CIM community

Mining activity in south-central B.C. isbooming and this activity was the back-drop for the latest Maintenance Engineer-ing/Mine Operators (MEMO) conference,which attracted more than 700exhibitors, delegates and visitors to Kam-loops, the region’s mining centre.

Solution miningIdeas, innovation and experience feed the conversation at MEMO 2013

By Ryan Bergen

In 2011, Copper Mountain went intoproduction, and close on its heels NewGold commissioned the New Aftonmine – Canada’s only block caving oper-ation. KGHM International has pro-posed yet another project nearKamloops, and Teck Resources’ High-

land Valley Copper, a long-time pro-ducer, is in the middle of a major millupgrade. “Kamloops is the mining hubfor B.C. right now,” confirmed metallur-gical consultant Tom Shouldice, who isa member of CIM’s South Central BritishColumbia Branch and a director of busi-ness development group Venture Kam-loops. The city, said Shouldice, has theadvantage of being a supply hub for notonly local mines but also for operationslike Taseko’s Gibraltar mine and Impe-rial Metals’ Mount Polley mine, just afew hours to the north.

MEMO’s technical program followedthree tracks – maintenance and reliabil-ity; mining and process operations; andresponsible mining – and balanced pre-sentations from operations with those ofequipment and service suppliers. All ofthe presentations, explained technicalprogram co-chair Jo-Anne Boucher,were reviewed to make sure they wereboth factually accurate and also appro-priate for the engineering and opera-tions audience. “We wanted to ensurethe program was technically sound, casestudy-based and met the needs of oper-ators,” she explained.

Kamloops hosted MEMO 2013, which brought roughly 700 mining professionals to south-central B.C.’s mining hub for three days of talks, technical sessions and a sold-outtrade show.

The winners will be recognized at the 2014 CIM Convention in Vancouver.Les gagnants seront honorés au gala du Congrès de l’ICM 2014 à Vancouver.

LAST CALL SUBMIT YOUR NOMINATIONS AT WWW.CIM.ORG

DERNIÈRE CHANCE SOUMETTEZ VOS CANDIDATURES AU WWW.CIM.ORG

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DEADLINE: DECEMBER 1, 2013 DATE LIMITE : 1ER DÉCEMBRE 2013

: 1ETIMIE LTAD ER MECÉ D

310E 2RBM

Highland Valley Copper, a fixtureof the B.C. mining scene, was a vitalcontributor to the technical proceed-ings. Brian Connors, a reliability engi-neer at the mine, outlined theoperation’s work to replace its worn-out flotation circuit and pebble crush-ers. This includes an extensive scalingup of reliability-centred maintenance(RCM) work – over 100 RCM sessionsand counting – to ensure the newinstallation performs to expectationsonce the work is completed, which isscheduled to be in January. AnotherHighland Valley presentation detailedthe impressive progress the operationhas made in instituting a “no idling”policy to reduce diesel consumptionand emissions.

Whenever you gather miners at aconference, inevitably the topic ofskills shortages arises. “Entry levelminers aren’t getting lessons passeddown,” said Redpath Group electricalengineer Jeremy Berg. In response, hedescribed how the company hasadapted its shaft sinking equipment tomake it more familiar to workers fromother industries.

The need to innovate also animatedthe event’s plenary session. SMSKomatsu CEO Bruce Knight explainedhis company has established its owntraining program to sharpen the skills

November 2013 | 63

of operators and technicians as appren-ticeships at mining operations becomerarer. Sean Waller, CEO of CandenteCopper, lauded the longevity of miningin the Highland Valley as an “exampleof mining done right” and suggestedthat project planners should be moremindful of the social and economicimpacts of high-volume, short-livedmines on the communities that hostthem. Robert Pease, CEO of SabinaGold, and Keith Matthew, former chiefof the local Simpcw First Nation,joined Knight and Waller on the panelthat was moderated by Colin Joudrie,Teck Resources’ vice-president of busi-ness development.

The sold-out trade show, whichincluded roughly 80 product and serv-ice providers looking to connect withoperations and maintenance profession-als, demonstrated the industry’s innova-tive spirit. “Miners are very inventivepeople,” said Rob Taylor, president ofRST Instruments. The company’s con-vergence monitoring system was theresult of its collaboration with the oper-ations team at the New Afton mine.“They are thinking stuff up all the time,”he said. “They ask us if we can do ‘x’,and we say ‘Why not?’”

MEMO 2014 will be hosted by theQuebec North-East Branch in Sept-Iles,Quebec, September 11 to 14, 2014.

Ryan

Ber

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p+200 membres corporatifs p +14 000 membres p +35 sections locales p 10 sociétés techniques p 1 communauté influente et dynamique

p+200 corporate members p +14,000 members p +35 branches p 10 technical societies p 1 dynamic and influential community

The MEMO lineup inKamloops included thealways lively Mining 4

Society (M4S) show. The interactive andeducational open house is designed tointroduce elementary and secondary schoolstudents to the essential role that mining andminerals play in day-to-day life. The eventfeatured 25 pavilions with hands-onactivities and instruction about the miningcycle, attracting 1,400 students and teachersand another 200 members of the public.

CIM community

In May 2003, Meridian Gold aban-doned its Esquel gold project in south-ern Argentina, faced with overwhelmingopposition from the local community.Esquel residents argued the companyhad disregarded their concerns from thevery beginning and demanded an endto development. Having lost its sociallicence, Meridian conceded.

“That was a $381-million mistakeand it was completely avoidable,” saidJan Boon, a scientist emeritus with Nat-ural Resources Canada and a member ofthe executive committee for the Centrefor Excellence in Corporate SocialResponsibility.

While companies tend to employcommunity engagement profession-als to communicate with local com-munities, problems can begin early.For instance, the first impressionscreated by geologists and engineers,often the first employees toencounter locals, can have lastingeffects on the success or failure ofany future project in the area.

A practised first impressionIntroducing CSR into geology and engineering programs would benefit industry

by Correy Baldwin

“We call them the ambassadors of themining industry because whatever theydo is followed by the rest of the miningcycle, and they can leave a positivelegacy or a negative legacy,” saidBernarda Elizalde, co-founder ofResponsible Mineral Development.“They set the tone for what will happenin the future. If they do things wrong,they can damage the relationship withcommunities, but if they do thingsright, they can help the company gaintheir social licence to operate from thevery beginning.”

A greater knowledge of socialresponsibility among these first ambas-sadors would help companies avoidcostly social problems, according toBoon. This is why he is heading up aninitiative to push universities to includemore social responsibility training ingeology and engineering technical pro-grams, and to offer CSR certificate pro-grams. The idea is in its early stages, butworking groups in Canada and Peruwill be consulting with industry organi-

zations like MAC and PDAC, along withuniversity and community groups, withthe goal of eventually drafting andimplementing CSR curricula into uni-versity programs.

Some universities have begun tooffer CSR training, and general CSR cer-tificate programs like those offered atMcGill and Queen’s also exist. But Boonsaid they tend to train CSR specialistsrather than technical professionals, andhe is instead advocating a more inclu-sive approach: “CSR really has to per-meate the company, otherwise in thelong run it won’t work.”

Cooper Quinn, a senior geologistwith McLeod Williams and 2009 B.Sc.graduate of Simon Fraser University’searth sciences program, sees the benefitof such an initiative. “As a geologist, youmight be thrown out into the field witha local or First Nations person from thecommunity, so you need to have somekind of awareness of the issues,” he said.“And really, I don’t think people comingout of school have any awareness. There

MINE 4 EDUCATIONTECHNICAL PROGRAM AT A GLANCE

MINING 4 EVERYONE

Join the Mining Community Conversation!

CIM community

really isn’t any social responsibility edu-cation at the university level.

“If people were more educatedstraight out of the gate, it would benefitthe industry as a whole,” Quinn said,adding this would be especially helpfulfor the juniors, “where the resources area little bit tighter. A junior mining com-pany of 10 people isn’t going to havetheir own [CSR] specialists who donothing but that for a small company.”

Dialogue has to start at the very firstmoment, said Boon, but it must also beunderstood as a process. “The point ofa dialogue is that you interact, that youunderstand the other party’s view-points and respect what they say,” headded.

Basic CSR, Quinn suggested, is notcomplicated: “A lot of it comes down tocommon sense. Being nice to people.Treating people like human beings. Ifpeople have questions, explain things tothem.” Most issues, he added, stemfrom a lack of communication. “Even ifyou’re just doing some soil sampling,”

he said, “it’s just as important to explainto people what you’re doing. Sometimesit just takes 20 minutes.”

The communication lines need toremain open too, said Boon: “The phrase‘social licence to operate’ suggests

that you get something and that’s it. Butin reality it’s not something that getssigned and then is over and done with.It keeps changing all the time. Dialogueis not a package and a project. It’s a wayof life.” CIM

REGISTRATION OPENS DECEMBER 1, 2013

VANCOUVER2014.CIM.ORG

GLOBAL DIMENSIONS OF MINING• Social & Environmental Stewardship• NGOs - Partners in Development• Global Projects Update

INNOVATIONS• Green Mining/Mining Innovations Council• Innovations in Energy Minerals• Powering Your Mine

HARNESSING OUR DIVERSE WORLD• Diversity 101• Maximizing the Workforce• Resource Nationalism & Transparency

MANAGING OPERATIONS - MINE TO MILL• Safety• Mining• Processing• Integration for Optimization

CONSTRUCTION TO PRODUCTION• Case Studies• Assessing the Construction Project• Developing in Non Mining Cultures (It’s All About the Water)

CIM Award names change, prestige remains the same

The annual CIM Awards ceremony is a centre-piece of the CIM Convention. It is the opportu-

nity to honour important figures from the richhistory of CIM and mining, while also givingCanada’s brightest and hardest-working miningprofessionals the opportunity to receive somewell-deserved recognition from their peers fortheir efforts.

To ensure the tradition endures, CIM recentlyupdated the names of more than a dozen of itsawards to provide members seeking to nominatea colleague a clearer understanding of the natureof achievement each award recognizes.

And do not forget, the awards nominationprocess is underway. To nominate someone whoyou think is deserving of recognition, visit theAwards section at cim.org.

Hendrick Falck (left) accepts the J.C. SprouleMemorial Plaque at the 2013 CIM Awards.The award, renamed the J.C. SprouleNorthern Exploration Award, is one ofseveral honours whose names have beenchanged to more clearly represent the spiritof the awards.

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We are pleased to invite you and your colleagues to attendthe 46th Annual Conference of the Canadian MineralProcessors to be held at the Westin Hotel in Ottawa fromJanuary 21 to 23, 2014. For over 45 years, the CMPConference has provided a forum for discussing bestpractices and the latest improvements in mineral processingtechnology. Over 600 delegates attended last year’sconference and profited from the outstanding opportunitiesin networking, knowledge sharing and personal developmentthe CMP Conference consistently offers.

The technical program will be the heart and soul of theconference with close to 40 technical papers presented byfellow mill operators and mineral processing professionals.In addition to discussions on Canadian milling practices,international speakers will weigh in on the mineralprocessing challenges they encounter abroad.

We look forward to you joining us in the capital this January.

– CMP Executive

Nous sommes heureux de vous inviter, ainsi que voscollègues, à participer à la 46e Conférence annuelle desminéralurgistes du Canada qui aura lieu à Ottawa du 21 au23 janvier 2014 à l’Hôtel Westin. Depuis plus de 45 ans, laCMP se fait un devoir de créer un lieu de discussion où lesbonnes pratiques et les dernières techniques de minéralurgiesont à l’honneur. Plus de 600 délégués ont participé à laconférence l’an dernier pour profiter de cette occasionexceptionnelle de réseautage, de partage d’expériencesindustrielles et de développement professionnel.

Cette année encore, le programme technique sera au coeurde l’évènement avec près de 40 articles présentés par desopérateurs d’usines et autres professionnels de laminéralurgie. Pendant que plusieurs se concentreront surdes problématiques typiquement canadiennes, d’autresprésentateurs discuteront des défis techniques auxquels ilsfont face à l’étranger.

En espérant vous voir en grand nombre dans la capitalecanadienne en janvier prochain.

– Conseil d’administration de la Société canadienne du traitement des minerais

www.cmpsoc.ca

JANUARY | 21-23 | JANVIER 2014WESTIN HOTEL | OTTAWA, CANADA

46th ANNUAL

CANADIAN MINERAL PROCESSORS CONFERENCE46e CONFÉRENCE ANNUELLE DESMINÉRALURGISTES DU CANADA


www.cmpsoc.ca

SHORT COURSES | COURS ABRÉGÉSNine short courses are being offered at CMP 2014.

Registration includes lunch, coffee breaks and course materials.Register early as space is limited.

Neuf cours abrégés seront donnés au CMP 2014. Le dîner, les pauses-café etle matériel didactique sont inclus dans les frais d’inscription. Les placesdisponibles étant limitées, veuillez vous inscrire tôt.

COURSECOURS

PRESENTERPRÉSENTATEUR DATE LANGUAGE

LANGUE

State of the Art Metallurgical Accounting

Frederic FlamentSunday (full day) |

Dimanche (journée complète)French | Français

Bond-Based Grinding Models for Design and Geometallurgy

Alex DollSunday (full day) |

Dimanche (journée complète)English | Anglais

Lime Slaking in Mining Applications

Ali AbbasMonday (half-day, morning) | Lundi (demi-journée, matin)

English | Anglais

Flotation Fundamentals and Applications

Janusz LaskowskiSunday and Monday (full days) |

Dimanche et lundi (journées complètes)English | Anglais

Tailings Preparation, Transport and Deposition

Robert CookeMonday (full day) |

Lundi (journée complète)English | Anglais

Gravity Concentration of Gold using Centrifugal Gravity Concentrators

Michael FullamMonday (full day) |


Iron Ore Processing in Canada

Jan de BakkerSunday (full day) |

Dimanche (journée complète)English | Anglais

Applied Mineralogy usingAutomated Methods for the Mining Industry

Tassos GrammatikopoulosMonday (full day) |


Dimensionnement de Broyeurs et Géométallurgie: la méthodologie SAGDesign™

Michel BrissetteMonday (half-day, afternoon) |

Lundi (demi-journée, après-midi)French | Français

REGISTRATION | INSCRIPTIONThe early registration fee including tax is $525 for CIM/AIME/TMSmembers, $730 for non-members (includes one-year membership to CIM).Registration includes the three-day meeting, coffee breaks, the Tuesdayand Wednesday luncheons and evening social receptions, the Wednesdayreception and awards banquet, as well as a copy of the proceedings.Conference registration and attendance at social events should beindicated when registering online at www.cmpsoc.ca.

Registration kits for pre-registered delegates can be picked up at theconference registration desk, Fourth Floor, Westin Hotel, Monday eveningbetween 19:00 and 22:00, and Tuesday to Thursday between 7:00 and15:00. New registrations will be taken during these times. Note: Pre-registration forms must be received by December 18, 2013, and any requests forrefunds must be made in writing prior to this date. An administration fee of $100 will be chargedfor new and/or cancelled registrations after this date.

Les frais de préinscription sont de 525 $ pour les membres de l’ICM, TMSet AIME et de 730$ pour les autres participants (taxes incluses). Le tarifpour les non-membres comprend un abonnement d’un an à l’ICM. Ces fraisdonnent droit aux trois jours de conférence, à une copie des comptesrendus, aux pauses-café, aux dîners de mardi et mercredi ainsi qu’à laréception sociale du mardi soir de même qu’à la réception et au banquetdes récompenses du mercredi soir. Veuillez vous inscrire en ligne à laconférence à l’adresse www.cmpsoc.ca, en précisant les évènementssociaux auxquels vous souhaitez participer.

Tous les délégués préinscrits pourront recevoir leur trousse d’inscriptionen se présentant au bureau d’inscription, 4e étage de l’Hôtel Westin, lelundi soir entre 19 h et 22 h et du mardi au jeudi de 7 h à 15 h. Les autresdélégués qui désirent participer à la conférence pourront égalements’inscrire à cet endroit, aux mêmes heures.Remarques : Veuillez envoyer vos formulaires de préinscription avant le 18 décembre 2013. Lesdemandes de remboursement doivent être faites, par écrit, avant cette date. Des frais de 100 $s’appliqueront à toute nouvelle inscription ainsi qu’à toute annulation après cette date.

November 2013 | 67

AUTHORS | AUTEURSAuthors, session chairs and regional representatives must register asconference delegates. A speaker’s breakfast will be provided the day oftheir presentation at 7:00, tentatively held in the Quebec Room. Pleasecontact John Chaulk for presentation information at 613.947.0394 [email protected].

Tous les auteurs, les présidents de sessions et les représentants régionauxdoivent s’inscrire comme délégués à la conférence. Un déjeuner sera servi lejour de leur présentation à 7 h, et ce possiblement dans le Salon Québec.Veuillez contacter John Chaulk au 613.947.0394 ou [email protected] obtenir des informations quant aux présentations.

COMPANION’S PROGRAM |PROGRAMME COMPLÉMENTAIRE

The companion’s program offers a daily Coffee and Tea Social, socompanions can arrange their activities for the day. The cost of thisprogram is $25.

Le programme complémentaire offrira une rencontre sociale thé/caféquotidienne, ce qui permettra aux accompagnateurs d’organiser leursactivités pour la journée. Le coût de ce programme est de 25 $.


TECHNICAL PROGRAM | PROGRAMME TECHNIQUE

IRON ORE PROCESSING

Investigation into Iron Ore Concentrate Moisture Issues ANNIE WANG

Beneficiation of Oolitic Iron Ores VICTOR HERNANDEZ

Significant Improvements are Possible from Process OptimizationJON MAKI

Simulation of an Iron Ore Concentration Circuit Using Mineral SizeRecovery Curves of Industrial Spirals CLAUDE BAZIN

GRINDING

VXP Stirred Mill Optimization at Casmyn Mining Turk Mine SCOTT REDDICK

Innovative Gearless Drive Technology for Grinding and ConveyingTIMO ROESCH

Predicting HPGR Performance and Understanding Rock ParticleBehaviour through DEM Modelling AMIT KUMAR

Towards an Integrated Framework for Asset and Process HealthMonitoring and Optimization on a Milling Circuit SIMON FRANK

Moly-Cop Tools Applications for the Assessment of GrindingMedia Performance at Full Industrial Scale RICH MORROW

Towards a Better Understanding of Stirred Milling – EstimatingPower Consumption and Energy Use Technologies PETER RADZISZEWSKI

NEW TECHNOLOGY

Pneumapress Operation at the Highland Valley Copper Mine –Filtration DAVE HANFLAND

The Effect of Lump Ablation on Pressure Gradient in Oil SandHydrotransport Pipelines DAN WOLFE

The Aurora Super Pump – Part II: Field Performance of a NewHydrotransport Pump DAN WOLFE

Wireless Communication in Mineral Processing ApplicationsFRANÇOIS DUSABLON

Do You Need Advanced Control? MICHEL RUEL

Real-Time Analysis of Conveyed Bulk Materials for OptimizedPlant Performance HOWARD POWELL

RESEARCH

Review of Self-Heating Testing Methodologies FRANK ROSENBLUM

Gibraltar Development Plan 3 SIMON TYRRELL

Commissioning of Sandfire Resources Copper Processing Plant at Degrussa, Western Australia SANJEEVA LATCHIREDDI

Project Execution & Cost Escalation in the Mining Industry KEN THOMAS

A New Potential Standard in Monitoring and Optimizing DepositControl in Mining Process Waters WILLIAM GONZALEZ

Practical Operational Aspects of Dense Medium CycloneSeparation FAAN BORMAN

www.cmpsoc.ca

November 2013 | 69

SOCIAL PROGRAM |PROGRAMME SOCIALMonday | Lundi 20:00 – 23:00 Student Mixer

Fourth Floor, Westin HotelSoirée « Student Mixer »4e étage, Hôtel Westin

Tuesday | Mardi12:00 Beer and Sandwich Luncheon

Fourth Floor, Westin HotelDiner bières et sandwichs4e étage, Hôtel Westin

19:00 Hockey Cup ChallengeCarleton UniversityDéfi de hockeyUniversité Carleton

21:00 Chairman’s ReceptionGovernor General BallroomRéception du présidentSalle de bal Governor General

Wednesday | Mercredi 12:00 Business Meeting Luncheon

Fourth Floor, Westin HotelDîner de réunion d’affaires4e étage, Hôtel Westin

18:00 Executive ReceptionColonel By SuiteRéception des dirigeantsSuite Colonel By

18:30 ReceptionFourth Floor, Westin HotelRéception4e étage, Hôtel Westin

19:30 Annual BanquetConfederation BallroomBanquet annuelSalle de bal Conféderation

FLOTATION

Mineral Process Plant Monitoring at Greens Creek: By Looking atMinerals Themselves – Flotation Characterization CHRIS MARTIN

Pilot Scale Frother Testing at Highland Valley Copper SIMON WELSBY

Including In-Process Inventories in the Metal Accounting ofFlotation Plants LUC LACHANCE

Necessity Driving Change and Improvement to the Cleaner Circuitat Lumwana Copper Concentrator RODRIGO ARAYA

Low pH Trial in the Ernest Henry Mining Copper Rougher FlotationCircuit JESSICA KINAL

LEACHING AND ROASTING

Problem Identification for Low Gold Recovery and Application ofTreatment at Somita Plant CAROLINE OLSEN

Methodology to Control and Prevent Ag Precipitation inCyanidation Circuit Using UV Spectrophotometry BENOIT LEVASSEUR

Evaluation of Bioleaching of Miduk Copper Ore MOSTAFA MOLLAEI

Partial Roasting of Copper Concentrate with Stabilization ofArsenic LARS HEDSTROM

Antiscalants for Calcium Scale Control in Gold Process CircuitsWAYNE DICKINSON

Magnetic Gold: Losses from the Musselwhite Gold RecoveryCircuit BRENT HILSCHER

PLENARY

CIM Leadership Program SCOTT MARTIN

ACCOMMODATIONS |HÉBERGEMENT

A special rate of $197 (single/double) and $247(deluxe), which includes complementary Internet,has been negotiated at the Westin Hotel (referencethe Canadian Mineral Processors Conference).

The Westin Hotel will only guarantee these roomsuntil January 6, 2014, so reserve today at613.560.7000 or online through the CMP website.

Un nombre limité de chambres a été négocié au tarif spécial de 197 $(en occupation simple/double) et 247 $ (de luxe) incluant l’internet, avecl’Hôtel Westin (mentionnez la conférence des Minéralurgistes duCanada).

Veuillez noter que les chambres sont retenues à votre intention jusqu’au 6janvier 2014. Réservez votre chambre en communiquant directement avecl’Hôtel Westin au 613.560.7000 ou en ligne à partir du lien situé sur le siteinternet de CMP.

Certification in Ore Reserve Risk and Strategic Mine Planning OptimizationSpread 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 modernmodelling techniques for ore bodies and new risk-based optimization methodologies for strategic mine planning. Gain practical experience by applying the followinghands-on concepts and technical methods: methods for modelling ore bodies; stochastic simulations, case studies and models of geological uncertainty; anddemand-driven production scheduling and geological risk.INSTRUCTOR Roussos Dimitrakopoulos, McGill University, Canada • DATES Week 1: May 5-9, Week 2: June 2-6, Week 3: July 7-11, Week 4: August 25-28,2014 • LOCATION Montreal, Quebec, Canada • INFO & REGISTRATION http://www.mcgill.ca/continuingstudies/programs-and-courses/engineering-0/certification-ore-reserve-risk-and-mine-planning-optimization

An Introduction to Cutoff Grade: Theory and Practice in Open Pit and Underground Mines (with a new section on blending optimization strategy)Cutoff grades are essential in determining the economic feasibility and mine life of a project. Learn how to solve most cutoff grade estimation problems bydeveloping techniques and graphical analytical methods, about the relationship between cutoff grades and the design of pushbacks in open pit mines, and theoptimization of block sizes in caving methods.INSTRUCTOR Jean-Michel Rendu, USA • DATE September 3-5, 2014 • LOCATION Montreal, Quebec, Canada

Geostatistical Mineral Resource Estimation and Meeting the New Regulatory Environment: Step by Step from Sampling to Grade ControlLearn about the latest regulations on public reporting of resources/reserves through state-of-the-art statistical and geostatistical techniques; how to applygeostatistics to predict dilution and adapt reserve estimates to that predicted dilution; how geostatistics can help you categorize your resources in an objectivemanner; and how to understand principles of NI 43-101 and the SME Guide.INSTRUCTORS Marcelo Godoy, Golder Associates, Chile; and Roussos Dimitrakopoulos, McGill University, Canada • DATE September 8-12, 2014 • LOCATION Montreal, Quebec, Canada

Quantitative Mineral Resource Assessments: An Integrated Approach to Planning for Exploration Risk ReductionLearn about exploration risk analysis for strategic planning. Understand how to demonstrate how operational mineral deposit models can reduce uncertainties;make estimates of the number of undiscovered deposits; and integrate the information and examine the economic possibilities.INSTRUCTOR Don Singer, USA • DATE September 29-October 1, 2014 • LOCATION Montreal, Quebec, Canada

Strategic Risk Management in Mine Design: From Life-of-Mine to Mining ComplexesLearn how you can have a significant, positive impact on your company’s bottom line by utilizing strategic mine planning methodologies and software; improveyour 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 refresherworkshop on Whittle may be available.INSTRUCTORS Tarrant Elkington, Snowden, Australia; and Roussos Dimitrakopoulos, McGill University, Canada • DATE October 15-17, 2014 • LOCATIONMontreal, Quebec, Canada

November 2013 | 71

Excerpts taken from abstracts in CIM Journal, Vol. 4, No. 4.To subscribe, to submit a paper or to be a peer reviewer—www.cim.org

T E C H N I C A L A B S T R AC T S

CIM journal

Comparison of uranium solvent extraction strip optionsD. van Tonder, AMEC Mining & Metals, Perth, Western Australia; and C. Edwards, AMEC Americas Ltd., Saskatoon, Saskatchewan, Canada

ABSTRACT Solvent extraction is used in many acid leach ura-nium circuits to upgrade and purify the uranium-bearingsolution prior to final product precipitation. A number ofstrip options are available to recover the uranium from theloaded organic. This paper compares seven of these optionson the basis of typical capital and operating costs for the sol-vent extraction circuit and downstream uranium processingand also considers other related issues. The aim is to providean objective comparative assessment of these options thatcould be used as a qualitative guide in process selection orimprovement.

RÉSUMÉ L’extraction par solvants est utilisée dans de nombreux cir-cuits de lixiviation acide de l’uranium pour rehausser la teneur etpurifier la solution uranifère avant la précipitation du produit final. Ilexiste plusieurs options pour retirer l’uranium du mélangeorganique. Le présent article compare entre elles sept de ces optionsen se basant sur les coûts typiques en immobilisations et d’exploita-tion pour le circuit d’extraction par solvants et le traitementsubséquent de l’uranium; d’autres sujets connexes sont aussi abor-dés. Le but est de fournir une évaluation comparative et objective deces options qui pourraient servir de guide qualificatif dans le choixou l’amélioration d’un procédé.

From theory to practice: Designing for situation awareness to transform shovel operator interfaces, reduce costs, andincrease safetyE. Onal, C. Craddock, and M. R. Endsley, SA Technologies, Inc., Marietta, Georgia, USA; and A. Chapman, Barrick Gold Inc., Toronto, Ontario, Canada

ABSTRACT Mining equipment operators must interpret andrespond to complex information delivered by technology-centric rather than user-centric systems. The ability toachieve high situation awareness (SA) in the face of this dataoverload is a key challenge to effective decision-making andinformation exploitation. Incidents attributed to humanerror that compromise safety and result in loss of revenue, oreven life, are often the result of system designs that overloadhuman cognitive capabilities. This paper defines SA as itrelates to the operation of mining equipment and describesthe design and preliminary evaluation of a new electricshovel operator user interface.

RÉSUMÉ Les opérateurs d’équipements miniers doivent interpréteret répondre à des informations complexes provenant de systèmescentrés sur la technologie plutôt que sur l’utilisateur. Face à cette sur-charge de données, la capacité d’avoir une connaissance élevée dela situation (CS) constitue un défi majeur pour la prise efficace dedécisions et l’exploitation de l’information. Des incidents attribués àl’erreur humaine, pouvant compromettre la sécurité et engendrerune perte de revenus ou des pertes de vies, sont souvent le résultatde conceptions de systèmes qui surchargent les capacités cogni-tives humaines. Le présent article définit la connaissance de lasituation en ce qu’elle a trait à l’opération des équipements minierset décrit la conception et l’évaluation préliminaire d’une nouvelleinterface pelle électrique-opérateur utilisateur.

Processing history at Vale Europe’s (Inco’s) nickel refinery in Clydach, WalesK. Lascelles, Vale Europe Ltd., Clydach refinery, Clydach, West Glamorgan, Wales; and B. R. Conard, BRConard Consulting, Inc., Oakville, Ontario,Canada

ABSTRACT Nickel compounds vary significantly in their tox-icological properties, so it is critical that continuing studiesto accurately quantify worker exposures consider the pro-cessing that accompanies refining nickel-containingmaterials. The Clydach nickel refinery, which has operatedfor more than 100 years, was the first nickel-producing facil-ity to show a high risk for lung and nasal-sinus cancersamong workers employed since it opened in 1902. Processchemistry and equipment have changed dramatically overClydach’s history. This paper describes the processing evolu-tion at Clydach with a focus on the propensity for aerosolformation and the forms of nickel in airborne dusts.

RÉSUMÉ Les propriétés toxicologiques des composés de nickel vari-ent considérablement, il est donc essentiel que les études en coursanalysent les traitements qui accompagnent l’affinage de matériauxcontenant du nickel afin de quantifier l’exposition des travailleurs demanière précise. L’affinerie de Clydach, en opération depuis plus de100 ans, a été la première installation à produire du nickel à montrerun risque élevé de cancers du poumon et du nez/des sinus chez lestravailleurs depuis son ouverture en 1902. La chimie du procédé etles équipements ont grandement changé au cours de l’histoire del’affinerie de Clydach. Le présent article décrit l’évolution du procédéà l’affinerie Clydach; il souligne la tendance à la formation d’aérosolset les formes de nickel dans les poussières aéroportées.

Excerpts taken from abstracts in CMQ, Vol. 53, No. 3.To subscribe – www.cmq-online.ca

T E C H N I C A L A B S T R AC T S

canadian metallurgical quarterly


Thermodynamic modelling of Fe-Sm and Fe-Dy systemsB. Konar, J. Kim, and I.-H. Jung, Department of Mining and Materials Engineering, McGill University, Montreal, Quebec, Canada

ABSTRACT In order to understand the chemical interactionsbetween Fe and Sm and Fe and Dy, the Fe-Sm and Fe-Dysystems were critically evaluated and optimized based on allavailable and reliable literature experimental data. The Mod-ified Quasichemical Model was employed to model theliquid phase. From the thermodynamic modelling, a consis-tent thermodynamic description of the intermetallic andliquid phases occurring in the respective binary systems wasobtained, which can be integrated in multicomponent rareearth metal systems.

RÉSUMÉ Afin de comprendre les interactions chimiques entre Fe etSm et entre Fe et Dy, on a évalué de façon critique les systèmes Fe-Sm et Fe-Dy et on les a optimisés en se basant sur toutes lesdonnées expérimentales fiables et disponibles dans la littérature. Ona utilisé le “Modèle Quasi-chimique Modifié” pour modéliser laphase liquide. À partir de la modélisation thermodynamique, on aobtenu une description thermodynamique consistante des phasesintermétalliques et liquides qui se trouvent dans les systèmesbinaires respectifs, lesquelles on peut intégrer dans les systèmes demétal de terre rare à composants multiples.

Characterisation of rare earth minerals with field emission scanning electron microscopyH. Demers, R. Gauvin, N. Brodusch, and K. Waters, Department of Mining and Materials Engineering, McGill University, Montreal, Quebec, Canada

ABSTRACT Rare earth elements are becoming increasingly indemand, due to their prevalence in both renewable energydevices and high end electronics. The characterisation of thecomposition and morphology of the various phases thathave valuable rare earth elements in the ores are needed inconjunction with the study of their physicochemical proper-ties to optimise industrial process to extract the mineralscontaining the rare earth elements. Rare earth bearing min-erals contain many elements with overlapping X-ray peaks(L- and M-lines) with an energy dispersive spectrometrydetector, requiring a high degree of X-ray energy resolution.A program was developed to obtain the intensity of eachpeak by deconvolution of the X-ray spectrum. Low acceler-ating voltage of less than 5 kV and small beam diameter ofless than 10 nm of a cold field emission scanning electronmicroscope allow x-ray microanalysis on the nanometrescale. A 100 nm wide phase was observed at 4 kV on abackscattered electron micrograph. Furthermore, a smallbeam diameter of less than 10 nm was used for identificationof small phases of a few micrometres.

RÉSUMÉ Les éléments de terre rare sont de plus en plus endemande, grâce à leur prévalence tant dans les dispositifs d’énergierenouvelable que dans l’électronique de haute gamme. On a besoinde caractériser la composition et la morphologie des différentesphases qui contiennent des terres rares de valeur dans les minerais,en combinaison avec l’étude de leurs propriétés physico-chimiques,afin d’optimiser le procédé industriel d’extraction des minérauxcontenant les terres rares. Les minéraux porteurs de terre rare conti-ennent plusieurs éléments ayant des pics de rayons x qui sechevauchent (lignes L et M) avec un détecteur de spectroscopie àdispersion d’énergie, nécessitant une haute résolution énergétique.On a développé un programme visant à obtenir l’intensité dechaque pic par déconvolution du spectre de rayons x. Un faible volt-age d’accélération de moins que 5 kV et un faisceau à faiblediamètre de moins que 10 nm d’un microscope électronique à bal-ayage par cathode froide permettent la microanalyse des rayons x àl’échelle du nanomètre. On a observé une phase de 100 nm delargeur à 4 kV sur une micrographe d’électrons rétrodiffusés. Deplus, on a utilisé un faisceau de faible diamètre de moins que 10 nmpour l’identification de petites phases de quelques μm.

November 2013 | 73

innovation showcase | product file

29 BBA

11 Boart Longyear

13 Breaker Technology Ltd.

14-15 Cementation CanadaInc.

43 Colorado School ofMines

37 Conspec Controls Ltd

35 DMC Mining Services

55 DRA Americas Inc.

25 Dumas Contracting

33 Endress+Hauser

30 Eriez Manufacturing Co.

23 Goldcorp Inc.

22 Golder Associates Ltd.

7 Hard-Line Solutions

28 Hewitt Equipment

9 L&H Industrial, Inc.

OBC Mammoet Canada

18 Martin Engineering

21 Metso MineralsIndustries, Inc.

3 Petro-Canada

27 RedPath

17 Rosta Inc.

IBC Schneider Electric

34 SME

IFC SSAB

26 Suncor Energy

19 Valard ConstructionLimited

31 Venture Kamloops

73 Petro-Canada

73 Innovation showcase

73 Product file B.I.D. Canada Ltd

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PROJECT PROFILESilvercrest Mines heads underground at itsSanta Elena silver mine in northern Mexico

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In 1945, Yellowknifewas the hotspot formineral speculation,

following the discovery ofgold-bearing shear zonesat Giant mine. The goldtown, founded in the1930s, experienced adownturn during the war,but the Giant discoveryreignited interest, makingYellowknife propertiesbest sellers on the TorontoStock Exchange (TSE).And while enterprisingprospectors of that timecould be creative in drum -ming up capital, a few managed to cut out looking for goldaltogether.

It was up to the investing public to provide capital for newmining projects, and in the 1940s, few rules existed to preventmarket manipulation. Enter Beaulieu Yellowknife Mines Lim-ited, the brainchild of Emil Schnee, who secured an option ona prospect near Beaulieu River, 75 kilometres east of Yel-lowknife. Well-reputed Toronto lawyer Samuel Ciglen providedSchnee with financial backing and became company president.

Beaulieu’s purported gold zone was a quartz vein hosted insedimentary strata. Early assays were impressive. Hole #57 wasprobed to a depth of 185 feet, with grades of 1.25 ounces perton over 27 feet of vein. Chip sampling in old trenches revealedup to 38 ounces per ton. Naturally, these incredible assays fos-tered investor intrigue. Intersections were publicized withemphasis on high-width assays, and engineer reports werecarefully edited to highlight potential. Beaulieu stock, tradingon the TSE, climbed from 50 cents to $2.65 in May 1946 andbecame the hottest ticket in an otherwise depressed market.

Ciglen did his best to boost the property, comparingBeaulieu’s ore body to recent discoveries in South Africa. Skep-tical editors at The Northern Miner grew suspicious, questioningthe “indefensible assumptions” in calculating an ore reserve byprobing the same ground repeatedly and ignoring the lowassays and short lengths, which did nothing but produce a flowof high-grade assays for market purposes.

Despite Ciglen’s defence of the company, Beaulieu stockbegan to tumble on the markets. By June 1946, it was tradingat 73 cents per share. At its annual general meeting, Ciglen gotan earful from investors who suffered heavy losses. The presi-dent had theories of his own as to why the stock fell, arguingthat short sellers were preying on the company. He criticized


the TSE for lax rules, butothers remained con-vinced that Ciglen was theone gaming the market.

The Ontario SecuritiesCommission launched aninvestigation, and while itcould not pinpoint fraud-ulent activities, it agreedthat Ciglen had run upBeaulieu’s share value andthat short selling had alsotaken place. The inquiryraised many questions, butit later showed that noth-ing done was illegal. Thecase was closed and

Beaulieu was free to continue trading activities. Schnee recom-mended constructing a shaft, agreeing that a bulk sample wasnecessary to reveal a true ore average, and the company set anambitious development schedule.

Art Ames was brought on as resident engineer to overseeunderground work. Ames had a good rapport with his workersdespite his dubious job qualifications and his reputation as analcoholic.

Construction of a mill and shaft continued in 1947, while thecompany re-evaluated its ore deposit and decided with greatfanfare that the mine had potential for 104,000 tons of ore grad-ing one-ounce per ton to 250 feet depth. This figure appearedto materialize out of thin air, as no additional work had beenaccomplished since a 14,000-ton reserve was calculated the yearprior. The assayer was unnerved by the dismal assays he wasobtaining and staff expressed their concerns to Ames, but heheard none of it. Feasibility be damned, Beaulieu would pour agold bar by the end of 1947. A celebratory date was set, withcelebrities like former heavyweight boxing champion Gene Tun-ney on the guest list, and the media ran with the story.

The mill started churning, but the results were so poor that,when it stopped a month later, only seven ounces of rough goldhad been recovered. Ames was shame-faced. Out of despera-tion, it is said he approached another mine asking if he couldborrow some gold. The party was cancelled. A brief geologicalinvestigation followed and the ore reserve was revised to a mere1,200 tons.

Beaulieu, the goldless gold mine, was left to decay in the Yel-lowknife bush, becoming both a local curiosity and a caution-ary tale. The embarrassment revealed flaws in the securitiesbusiness, encouraging investors to pay more attention to infor-mation promoted by companies. CIM

Yellowknife’s goldless gold mineby Ryan Silke

Once the talk of the Toronto Stock Exchange, the Beaulieu mine – seen here in 1947 –was eventually done in by its own shoddy resource reporting.

Cour

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WT

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ing

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age

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s Col

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ion

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BC Vancouver 778-828-6516

Saskatchewan Regina 306-523-4511

www.mammoet.comHead Office for Western CanadaEdmonton 780-449-0552

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cim magazine november 2013

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