mines vs mineralisation - mccuaig, vann & sykes - aug 2014 - centre for exploration targeting
DESCRIPTION
Resources added to the global metal inventory through exploration over the past 15 years have been generally of poor quality (declining grades, recoveries and lack of acceptable financial return). Similarly, companies opting for an acquisitions-based strategy have had to pick from a group of poorer quality resources left from previous exploration booms, and will struggle to deliver this metal to market economically. Increasing difficulty in obtaining sufficient social and community acceptance of mining projects and potentially an energy-constrained future may exacerbate this problem, redefining what is considered ‘ore’. There will need to be more focus on deposit quality, defined as sustainable margin in the future business environment.TRANSCRIPT
Mines versus Mineralisation: Deposit
Quality, Mineral Exploration Strategy
and the Role of ‘Boundary Spanners’
T. Campbell McCuaig1,2, John E. Vann1,3,4,5, John P. Sykes1,6,7
1Centre for Exploration Targeting, The University of Western Australia 2ARC Centre of Excellence for Core to Crust Fluid Systems, The University of Western
Australia 3 Anglo American PLC
4WH Bryan Mining and Geology Research Centre, The University of Queensland 5School of Civil Environmental and Mining Engineering, University of Adelaide
6Department of Minerals and Energy Economics, Curtin Graduate School of Business,
Curtin University 7Greenfields Research Ltd.
Adelaide August 2014 AusIMM 9th International Mining Geology Conference
The Problem
Project Pipeline Quality – need to find new high quality districts
Schodde, 2013
More metal staying in the ground
Burgess (2009)
Increasing gap between global promised and actual production performance.
Is this reflecting declining quality of maturing mines and new discoveries?
Price rises alone are not a Panacea
McCuaig (2009)
External social pressures in an energy
constrained world Physical and socio-economic footprint
Carbon footprint
Changing the definition of ore…success will
look different in the future!
- A focus on high quality deposits required
Failure of Agency
Current industry practice not inline with ‘new ore’ paradigm:
External (equity market) and internal (remuneration packages
and KPI) measures foster short-term thinking and short term
results
Results in focus on brownfields AT EXPENSE of greenfields
Trend of majors away from exploration to acquisition, focus on
extraction technologies
Expectation that Juniors will fill the greenfields gap
A common belief that metal prices will sort out supply
All of these ideologies are fundamentally challenged looking to the future
Whole of Value Chain System
Four Key Elements to
Value Realisation
If we do not satisfy 1, 2, 3 and
4, then the positive value realisation at 5 is impossible : the project cannot progress – e.g. we have no social license – or there is value destruction – e.g. some combination of 2, 3 and 4 renders the operational cash-flow insufficient to deliver positive NPV.
Production
Rate
kWh/tonne
Depth
Geometry
Social
Licence
Recovery
Future
Commodity
Prices
Geometallurgy Capex
Opex
Ge
olo
gic
al F
acto
rs
Fin
an
cia
l En
gin
ee
ring
Future
Energy
Prices
Op
era
ting
Fa
cto
rs
Mineral Deposit
Value Realisation
1 2
3
4
5
Water and
Geotech
A high
quality
deposit
successfully
links these
elements to
deliver value
Systemic Factors All the factors in the preceding diagram are systemically
interlinked – thus linked to deposit geology.
However factor 1 (Social Licence) is a key constraint
UNDISCOVERED
UNECONOMIC but
ACCESSIBLE
RESOURCES
DISCOVERED
ECONOMIC but
INACCESSIBLE
UNDISCOVERED
INACCESSIBLE but
ECONOMIC
DISCOVERED
ACCESSIBLE but
UNECONOMIC
UNDISCOVERED
UNECONOMIC
but ACCESSIBLE
GEOLOGICAL CERTAINTY
EC
ON
OM
IC F
EA
SIB
ILIT
Y
DISCOVERED
ACCESSIBLE
and ECONOMIC
(Behind)
DISCOVERED but
INACCESSIBLE
UNECONOMIC
UNDISCOVERED
INACCESSIBLE
and
UNECONOMIC
UNDISCOVERED
but ACCESSIBLE
ECONOMIC
Sykes and Trench (2014)
The Criticality of Social Licence
Historically, we seek financially optimal projects that are socially and environmentally acceptable
Increasingly we will seek Socially and environmentally optimal projects that are financially acceptable.
Without social licence … there is no sustainable mining business.
Bottom Line: The best technical /financial project in the world can be killed by this issue
Can We Explore For Quality?
Mapping quality and value through deposits (e.g. Ehrig et al.,
2014) is now possible (and we need to do more of this!)
Challenge: extracting knowledge from large multiparameter
datasets that map to the whole system value chain
Traditional barriers to translating this to exploration:
Technical - Inherent interdeposit variability
Heuristics – ‘Software’ problem
Exploration for Quality
McCuaig et al., 2010
LOW
BROAD REGIONAL
PREDICTION
HIGH
PROSPECT SCALE
SCALE
RE
LA
TIV
E
EF
FE
CT
IVE
NE
SS
DETECTION
Camp scale decision
COST
FLEXIBILITY
Alteration halos
High definition
geophysics
Drilling
Geochemistry
?
Where do we focus the more systematic,
detailed and expensive detection technologies?
We should now be able to
detect quality earlier here
But can we
predict quality
here?
The Problem
How to predict location and geometry of new high quality mineral districts – camps – ore shoots?
2.7-2.6 Ga Ni and Au in the Yilgarn WA
Craton / district scale
150km
400km
New
Ho
llan
d A
u
(He
nso
n, 2
00
8)
St.
Ive
s A
u
(Mill
er
et a
l. 2
01
0)
(McC
ua
ig e
t a
l. 2
01
0)
Deposit scale
Oreshoot scale
100m
2km
Camp scale
We can measure their shape and size, but….
Remember Ore Deposits are Fossils
…the real question is - How fast did they run?
Answer: <104 yrs – 105 yrs!
= dynamic complex systems
Remember Ore Deposits are Fossils
Understanding dynamic complex
systems
Many complex natural systems develop structure and
patterns, despite a wide range of initial starting conditions and controlling parameters
These patterns are: fractal in nature
Show scale invariant power law distributions
Often show ordering around a critical point or phase
transition (e.g. ductile to brittle failure of crust in the case of earthquakes)
Example: Fault size
populations
Needham et al., 1996
Power-law size frequency distributions in Earth Systems
Understanding dynamic complex systems
Malamud & Turcotte 2006
Example: Gutenberg-Richter
earthquake scaling. Example: Superior craton,
greenstone-hosted lode gold
Robert et al., 2005
Robert et al., 2005
• The tendency of complex systems to order around a critical
point is termed self-organised criticality (SOC; Bak et al 1987)
• Key drivers of SOC behaviour are:
– Energy is added slowly over long timeframes
– A barrier (threshold barrier) to energy flux is present that stops
dissipation into the energy sink, forming extreme energy gradients
– Energy is released over very short timeframes in dramatic pulses
termed ‘avalanches’
• These systems will remain SOC systems as long as the energy
flow is maintained, and the threshold barrier is intact.
A new understanding of physics of complex systems
Understanding dynamic complex
systems
A new view on how fluid flow is
organised in mineral systems
Mineralisation events are transient events (avalanches)
within much longer barren deformation-magmatism-
alteration events.
• Multiple repeated pulses.
• Scale-invariant power law distribution of deposit sizes
(e.g. Guj et al, 2011).
• Deposits display fractal spatial geometry (Carlson, 1991).
• These are all attributes of self-organised critical systems.
Energy Sink
Energy Source
Potential Energy
Gradient Self-Organized System
Entropy (exported to environment
as diffuse heat)
Energy Flux – fed into system at a slow rate
Energy Flux – Released in transient “Avalanches”
Threshold Barrier
A B
McCuaig and Hronsky, 2014
Deposit formation as a product of self-organising critical systems
Understanding dynamic complex
systems
Electric Charges Accumulate Slowly
Threshold Barrier:
Resistive Air
Ground
Transient Rapid Breach of Threshold Barrier
The Lightning Analogy for Ore-Forming Systems
Understanding dynamic complex
systems
Electric Charges Accumulate Slowly
Threshold Barrier: Resistive Air
Ground
The Lightning Analogy for Ore-Forming Systems
Transient Rapid Breach of Threshold Barrier
Understanding dynamic complex
systems
Focused system with little lateral dispersion – high quality ore formed
Broad halo,
metal
anomalism,
no high
quality ore
Main ore events are transient in a larger magmatic/hydrothermal event
McCuaig and
Hronsky, 2014
High Quality Deposits Forms Under Specific
Conditions
Advances in Understanding Mineral Systems
• Mineral systems are complex dynamic systems exhibiting self-
organised critical (SOC) behaviour
• Critical elements of mineral systems are whole lithosphere
architecture, transient geodynamic triggers, fertility, and preservation
of primary depositional zone
• In application of the mineral system concept to find high quality
deposits, SCALE of exploration decision (and data used) must be
matched to scale of relevant geological process
Fertility
Favourable
Whole-lithosphere
Architecture
Favourable
(Transient)
Geodynamics
Ore Genesis
Preservation (of
primary
depositional zone) +
McCuaig and Hronsky, 2014
Spreading Rate on the MAR
increased rapidly in
Cretaceous
This pushed
South America
hard to the west
Which made the
western margin
compressional
Andean Cu since the cretaceous – anomalously compressive margin
Nested Scales of Control on High Quality
Deposits
McCuaig and Hronsky 2014
Transient extreme anomalous compression causing high quality ore formation
Nested Scales of Control on High Quality
Deposits
El Teniente: A well documented example of multiple, superimposed focused fluid exit events all using the same plumbing
Vry et al (2010)
Quality Deposits as Exit Conduits
Advances in Understanding Mineral Systems
• Mineral systems are complex dynamic systems exhibiting self-
organised critical (SOC) behaviour
• Critical elements of mineral systems are whole lithosphere
architecture, transient geodynamic triggers, fertility, and preservation
of primary depositional zone
• In application of the mineral system concept to find high quality
deposits, SCALE of exploration decision (and data used) must be
matched to scale of relevant geological process
Fertility
Favourable
Whole-lithosphere
Architecture
Favourable
(Transient)
Geodynamics
Ore Genesis
Preservation (of
primary
depositional zone) +
McCuaig and Hronsky, 2014
www.science.org.au/policy/documents/uncover-report.pdf
Endorsement by federal government, government surveys, CSIRO, major geoscience research groups nation-wide
Collaborative Network Independent Strategic Vision
UNCOVER: A Vision for Exploration
Geoscience in Australia
Currently undertaking a
roadmapping exercise
with industry through
AMIRA
Focussing Geoscience talent towards a common vision
Characterising Australia’s cover: new knowledge to confidently explore beneath the cover.
Investigating Australia’s lithospheric architecture: a whole-of-lithosphere architectural framework for mineral systems exploration.
Resolving the 4D geodynamic and metallogenic evolution of Australia: understanding ore deposit origins for better prediction.
Characterising and detecting the distal footprints of ore deposits: towards a toolkit for minerals exploration.
Risk and Value – an analysis of the value of mineral exploration
Producing critical data, knowledge and products for the mineral
exploration industry
UNCOVER: A Call to Arms
Making it Happen:
The Need for Boundary Spanners
The mining industry is discipline-based
Each discipline has its own language, and different ‘mental
models’ of the business – different ‘software’
Boundary spanners are individuals who can link across
disciplines, and recognise connections between apparently
unrelated systems – they break down the barriers
The Need for Boundary Spanners
Two types:
Inside-Outsiders – individuals outside a community who bring
new ideas into it – often met with resistance!
Outside-Insiders - individuals within a community who bring in
ideas from other fields – usually more accepted
Boundary Spanners
Daniel Kahneman – Inside-Outsider
Psychologist who introduced (with Amos
Tversky) concepts of heuristics and decision-
making under uncertainty – Nobel Laureate in
Economics
Richard Thaler – Outside-Insider
Economist who worked with Kahneman to
develop the field of Behavioural Economics
Boundary Spanners
Alfred Wegener – Inside-Outsider
Meteorologist who first postulated theory of
continental drift – much maligned by
geoscientists
Arthur Holmes – Outside-Insider
First earth scientist to grasp the mechanical
and thermal implications of mantle
convection, which put context around
Wegener’s empirical observations
Fundamental
Geoscience
Research
Mineral
Deposit
Research
Mineral Deposit
Systems
Science
Exploration
Targeting
Science
Mineral
Exploration
Technology
Development
Business of
Mineral Deposit
Exploration and
Discovery
Mineral
Deposit Value
Realisation
Other
Fundamental
Science
Engineering
Research
Whole of Value
Chain Systems
Modelling
Mineral Exploration Domain of Thinking
Project Development Domain of Thinking
Critical components of
interface
Nurturing Boundary Spanners