emerging green mining innovation

Emerging green mining innovation

2013 11 07

Dallas Kachan

Managing Partner

Kachan & Co.

+1 415-390-2080 x.5

[email protected]

This document is confidential and intended solely for the information and use of client companies and others as assigned.

It is part of a working review and presentation and is incomplete without accompanying verbal comments.

2© 2013 Kachan & Co., all rights reserved

Agenda

• Overview of report findings – 50 mins• Discount code for Kachan green mining

report• Q&A – 10 mins

NOTES• Audio is over your computer speakers• Can also dial in to +1 (415) 655-0063, access code: 760-618-291• Questions submitted by text chat• Recording of webinar and slides made available on Kachan website


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About the report

Emerging Green Mining InnovationManaging risk and profiting from new mining technology breakthroughs

September 2013

52 pages

104 footnotes

15 tables, charts & figures

47 companies profiled

Executive summary 5

Defining mining cleantech 5

Mine life cycle summary 7

Mining operations 8

State of the art in mining technology today 9

Cleaner mining technology market sizing 12

Sector profiles and leading emerging companies 14

• Power reduction

14

• Fuel and maintenance reduction

20

• Toxicity reduction

29

• Emissions reduction

33

• Water reduction

36

Shortcomings & potential challenges 44

Recommendations 45

Conclusions 48

Methodology & bibliography 48


Mining hasn’t changed much in 100 years


Definitions

• Mining - extracting metals or minerals from the earth, includes finding the material, extracting the ore, separating the desired metal from the rock, refining or processing the metal to its final state, and reclaiming the land once the mine is closed.

• Technology - methods, tools and knowledge used to perform a specific function or improve the performance of an existing system. Physical machines, proprietary methods and information, and services.

• Cleantech (clean technology) - new technologies and business models to provide solutions to climate, resources, or efficiency challenges, while offering competitive returns for customers and investors. Strive to simultaneously provide superior performance at lower cost, and reduce or eliminate negative ecological impacts, thereby making productive use of the world’s natural resources in a responsible manner.


Cleantech in mining

• Mining cleantech describes innovative technologies in the mineral and mining sector that demonstrably enhance the sustainability of the practice while serving as efficient, cost effective and productive solutions for the industry

• The following criteria have been used to differentiate cleantech developments from generic mining innovations:– Improved efficiency of resource use– Reduced waste production and toxicity – Enhanced profitability– Smaller carbon footprint


Mine life cycle summary


Mining operations

Excavation and Handling

Loading and Hauling

Bulk Products (Coal, gravel, etc.)Size Reduction (Comminution)

Separation and Concentration

Processing and Refining Refined Products (Iron, gold, etc.)Waste Rock or Tailings

Figure : Stages of a mine operation. Source: Kachan analysis


Drivers of mining industry’s interest in new clean technology

• Market volatility • Rising operational costs and falling commodity prices• Decreasing productivity and efficiency • Abrupt policy changes• Resource nationalism• Societal scrutiny

Some companies are experimenting with clean technologies in mining. But most are reluctant.

In 2012, investment in innovation by the mining industry was only 0.2% of revenue.


Three clean mining technology case studies


Kachan taxonomy of green mining innovation


Comminution efficiency

Crushing and grinding to transform run-of-mine materials into smaller particles for further downstream processing • Sandvik – Vibrocone

• Can be used to replace rod mills, commonly used in the grinding process of comminution, or to perform the first steps of the grinding process without water consumption

• By improving size reduction during crushing processes, savings can be achieved downstream in more expensive grinding stages

• According to Sandvik, the crusher can achieve 30% energy savings in downstream processing


Low power separation

Extraction of valuable minerals from waste rock and other materials. Common processes include gravity separation, flotation, and chemical separation, which often use toxic chemicals such as mercury or cyanide.• Orbite Aluminae• Canada’s Orbite Aluminae’s patented extraction process is able to

pull both smelter-grade and high-purity alumina (HPA), as well as rare earth metals from the same aluminous clay feedstock

• Orbite’s extracted materials have a diverse and large market including use for lighting, industrial and high-tech components, and fiber-optic communications


Hydrometallurgical processes

Extraction of desired metal from ore using water solutions or solvents. Operate at much lower temperatures and therefore consume less power. • MetaLeach • UK-based, claims its process, “AmmLeach,” is environmentally

friendly and cost effective• Primarily for extraction of copper, nickel, gold/copper and

silver/zinc• Ammonia reagent that the company claims is largely recycled in

the process and, heaps can also be washed and ore put back in the ground and the residual ammonia can be used for vegetation regrowth

• Copper-cobalt mine in the Democratic Republic of Congo using system

• Significant annual reductions in capital costs (around 30%) vs. sulphuric acid and operating cost savings US$29-51m (around 42%)

• Recent non-exclusive royalty licence agreement with Metalvalue to build another commercial copper and cobalt processing plant in the DRC

• Company claims to have signed numerous confidential and test work agreements with other large and small mining co’s


Equipment route optimization

• RungePincockMinarco • RPM’s product HAULNET allows engineers to build complex 3D

haul networks and produces visualizations allowing users to analyze haulage options based on the designated destination

• Determines the most efficient use of trucks by highlighting the fastest and shortest routes

• Minimizes haulage costs and emissions, overall benefitting the operations’ bottom lines

• Management team of miners


Fuel additives/filters

• FiltaGreen• Develops bypass fuel and oil filter systems that remove

contaminants and particles• Claims its oil filter system can increase engine life by as much as

five lifetimes and hydraulic life spans by 50 times. • Has also introduced a fuel additive that uses borate particles to

protect engines and reduce coating. Claims it can increase fuel efficiency by 5 to 15%.

• PT Pamapersada has apparently saved 5% on fuel costs and doubled the length of time between engine overhauls from 12,000 hours to 24,000 hours, decreased downtime by over 38% and increased productivity of the fleet from 70% to 93%, and doubled the useful life of the equipment.

• Past clients include Newmont Mining, Gold Barrick, Gold Strike, Rio Tinto and Green Corp.


Electric vehicle conversion/electric vehicles

• Atlas Copco • Massive Swedish equipment

supplier Atlas Copco offers a leading line of trucks and loaders powered by electricity

• Claims to double the productivity of diesel trucks in the capacity range. In addition

• Trucks are said to reduce energy use by up to 70% and decrease cost of ownership by up to 50%

• Equipped with regenerative braking, meaning 30% of energy consumed moving up the ramp is regenerated going back down


Training simulators

• ThroughTec• Simulators that replicate conditions at a

mining operation for both surface and underground mining operations, hard rock and soft rock. Able to replicate a mine’s entire working fleet.

• Operator’s movements are recorded and monitored; including reporting of the user’s economic performance

• Achieved simulation of complex mining operations drawing from the company’s 50+ year military simulation industry experience.

• Simulates equipment from many major manufacturers

• Used by companies like Anglo-American, BHP Billiton, Rio Tinto, Vale, Newmont


Other fuel reduction approaches

• Rail-Veyor Technologies • Canadian co. has developed

an electrically powered remotely operated, light-rail system

• Eliminates loaders, trucks and conveyor belts and reduces tunnel size and infrastructure.

• Automatic operation that runs on GPS and sensor technologies and can operate 24/7; requires one operator above ground, yielding safer operations and reduced labor costs.

• Zero diesel emissions• Installed and working in

Sudbury, Ontario for 2 years


Carbon sequestration

• Calera • Process that captures CO2 emissions from coal or gas-fueled power

facilities and turns it into calcium carbonate for building materials• Claims the process also removes minerals from water to produce

fresh water• Working with Peabody Energy and China Huaneng Group on a

green coal energy project in Mongolia• Significant funding from high profile sources: $15 million from

Peabody Energy, and $50 million from Khosla Ventures


AMD/ARD remediation

• BioteQ• Vancouver-based co. using sulfide

precipitation tailored for each site to recover valuable metals and remove metal contaminants, sulphates and silica from large flows of water

• Can eliminate residual sludge waste and contaminants including lead, arsenic, and mercury to help companies reduce potential sources of acid mine drainage and meet stringent discharge limits

• Produces commercial grade metal concentrates that can be sold to refineries and create a revenue source

• According to BioteQ, its processes remediate water to levels that can be reused in the mining operation or released into the environment

• Projects in Canada, US, Mexico, Australia and China


Tailings remediation

• BacTech Environmental Corporation• Bioleaching process using bacteria to remediate toxic tailings from

abandoned mining operations• Can also neutralize sources of potential acid mine drainage while

recovering metals such as gold, silver, cobalt and nickel• Uses naturally occurring bacteria that are harmless to both the

environment and human health• Can break down sulphides in 5 to 6 days, in contrast to 20 years

that would be required under natural conditions.• Revenues can be generated from the recovery of the metals found

in tailings. By recovering valuable materials from the tailings, BacTech is able to offer the mine remediation services to governments at no charge

• Used at sites in Armenia, Guatemala, Chili, Mexico and the U.S. • Currently anticipating commissioning a $22 million plant in

Manitoba, Canada to remediate arsenic tailings


Shortcomings & potential challenges

• Proof of commercial viability of vendors• Proof of return on investment• Assurance of vendor longevity • Continued depressed capital markets


Conclusion

• Many green mining technologies are now able to effectively compete with conventional products

• Majority of companies have yet to adopt newer processes; leading companies have recognized the need to invest in new technologies as a response to the shifting industry

• With increasing operational costs and environmental expectations, demand for cleaner technologies by the mining industry is expected to grow at an accelerated pace


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