mining environmental management - 2006

Counting the cost of managing HIV/AIDS in South Africa

Theory into practice: sustainable development in Australia

Reducing emissions from China’s coal mines

March 2006

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2 Mining Environmental Management March 2006

contents

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THERE is a semi-qualitative relationship known to environmental scientists as Kuznets Curve, fi rst hypothesised 50 years ago.

The relationship is based on the principle that, as an economy develops in a poor nation, there

is a corresponding increase in pollution. But as it becomes more prosperous, there is a natural desire for a better quality of life, which includes an improved environment. In the end, social pressure on governments gradually increases regulations and reduce pollution. This process could be considered a form of sustained development, although not necessarily sustainable in the long term. The alleviation of poverty has become the global humanitarian cause replacing the previously popular, but nebulous phrase of ‘sustainable development’.

Many view mining as a sustainable industry only to the extent that it regulates the speed it mines deposits. That said, the extractive industries are often the fi rst to enter a new frontier through exploration, and serve as ambassadors of western economic concepts.

The mining industry is often criticised for not suffi ciently alleviating poverty and promoting sustainable development in poor countries and emerging nations. But what has been the success rate among the scores of well-meaning humanitarian agencies and non-governmental organisations (NGOs) throughout the world with respect to alleviating poverty, reducing corruption, and instituting the rule of law?

According to multiple studies, the many billions of dollars spent by these groups and others have fallen short in reducing poverty and human suff ering. It is estimated that over two billion people are living on less than US$1/d and over four billion people are living on less than US$2/d.

EditorPeter McCready

Consulting editorChris Hinde

Technical adviserTerry Mudder

ContributorKeith Nuthall

ProductionKeith Baldock

Tim Peters

Advertising production Simon Smith

Mining Environmental Management(ISSN 0969-4218) is published quarterly by

Mining Communications LtdAlbert House,1 Singer Street,

London EC2A 4BQ, UK.Tel: +44 (0)20 7216 6060Fax: +44 (0)20 7216 6050

E-mail: [email protected]: www.miningenvironmental.com

© Mining Communications Ltd 2006

Printed by Stephens & George,Merthyr Tydfi l, UK

Mining Environmental Management acknowledges the signifi cant support of:

Anglo American plcAMEC Earth & Environmental

Golder Associates

The cover shows the seaward approach to Baffi nland Iron Mines Corp’s Mary River iron project in Baffi n Island, Nunavut, Canada. The company will be negotiating an Impact and Benefi ts Agreement with the regional Inuit association. This accord is an essential document to allow local communities to maximise benefi ts by developing business and employment opportunities with any mineral development project. The company says it is important to train the local workforce to maximise benefi ts and mitigate the impacts to local communities and environment if the multi-generational development goal is to be achieved

Poverty, pollution and prosperity

2Comment

3Enviromine

10Still Life

18Technology

19Tailings

regu

lar features

BY TERRY MUDDER

There should be no disagreement about the moral requirement to improve the quality of life worldwide. However, neither the more pragmatic approach by the mining industry, nor the more philosophical approach by humanitarian agencies and NGOs, have been successful to the extent desired.

Nevertheless, each approach has distinct and useful attributes that should be combined. There also is tendency to move too fast and too far with respect to environmental regulations.

The industry could simply show more respect when entering poorer countries and sensitive environments.

Much of the resistance and many of the traditional barriers can be overcome by winning the hearts and minds of the locals. On the other hand, the humanitarian agencies and NGOs should recognise that the basic infrastructure provided by the mining industry is essential to alleviating poverty and makes an key contribution to sustainable development.

The approach taken should involve both of these diverse entities working together to provide the basic infrastructure and requirements of life, such as drinking water.

Although it may not be interesting to discuss sanitation at the annual fund raiser, this is exactly what is needed.

One example is the concept of the International Finance Corporation or the European Bank of Reconstruction and Development working with the extractive industries.

These relationships have not always worked perfectly, but they provide a valuable template upon which to build.

Attempts immediately to implement the most stringent western standards and regulations in countries where people are merely trying to survive is counter-productive. Existing environmental standards and regulations were developed, applied and refi ned over decades. Empirical data collected via extensive environmental monitoring has documented many of these standards as being too stringent and unwarranted, particularly in developing nations.

The end result is frustration within the industry, recalcitrance within the struggling governments, and continued unrest from the general public. Although we might walk over the same ground at diff erent times, it is still common to us all.

Terry Mudder, MEM technical adviser, is based in Wyoming, US

“The humanitarian agencies and NGOs should recognise that the basic infrastructure provided by the mining industry is essential to alleviating poverty and makes an key contribution to sustainable development”

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March 2006 Mining Environmental Management 3

envirominea round-up of the latest environmental news aff ecting the extractive industries

■UN HEAD APPOINTEDA German conservationist has been appointed to head the UN Environment Programme. Achim Steiner is currently director general of the World Conservation Union (WCU). He will assume his new role this June and will be based in Nairobi. The WCU is the world’s largest environmental network with over 1,000 members in 140 countries, including governments and advocacy groups. The UN said Mr Steiner had worked both at the grass-roots level and at the highest levels of international policy-making to address the connections between environmental sustainability, social equity, and economic development.

■SANDBROOK DIESRichard Sandbrook, a co-founder of Friends of the Earth in the early 1970s and one of the most infl uential environmentalists of his time, died in London on December 11, 2005. In 1976 he joined the London offi ce of the International Institute for Environment and Development, eventually becoming executive director from 1989 to 1999. Following this he became a freelance consultant. His portfolio includes acting as co-ordinator to the Minerals Mining and Sustainable Development Project (1999-2003), and he spoke on the subject at Mining Journal’s Mines and Money conference in 2003.

■ABN AMRO WINS AWARDABN Amro has won the Gold Medal Award for International Corporate Achievement in Sustainable Development from the World Environment Centre, an independent, not-for-profi t, non-advocacy organisation promoting sustainable development. The award is in recognition of the bank’s leading role in the creation and implementation of the Equator Principles. ABN spearheaded the global programme in the private sector. Subsequently, more than 30 international banks, representing 80% of project fi nancing in the world, have agreed to adopt the principles.

ANALYSTS at Citigroup have identifi ed fi ve sustainable development factors, which they claim have the potential to ‘destroy or add’ investment value to mining and metals companies, and thereby for investors.

The banking group said the groundswell of public opinion has made sustainable development a serious business consideration for the mining and metals industry, and for its investors.

Furthermore, they said the industry’s reaction has been mixed, with a wide range of responses to these emerging business risks and opportunities.

In a research report entitled ‘Towards Sustainable Mining’, the equity analysts argued that sustainable development has traditionally been limited to immediately obvious issues such as environmental pollution, health, safety and human rights.

However, here they argued that it actually has a far broader scope and off ers to those companies (and their share prices) the potential to outperform if they can react eff ectively to the challenges these fi ve factors pose.

The fi ve factors take into account areas which include commodity and country exposure, as well as mine development, and corporate responsibility with regard to sustainable governance and HSEE (health, safety, employment and the environment) in operations.

By combining these factors the analysts were able to create the Citigroup Sustainability Mining Index (CSMI) to evaluate how metals and mining companies are conducting their business relative to sustainable development priorities – those that are in the best position to create value or are at risk of destroying it.

The analysis suggested there is a trend towards accepted standards of good practice around ‘sustainability governance’ and ‘HSEE in operations’. And it also suggested that while commodity exposure can have some impact,

it is the country exposure that causes most variation in the company scores. This, however, can be exacerbated or softened by the company’s management processes.

The report said that traditionally an unconsolidated mining sector has kept costs low by clamping down on unionisation, cutting corners with health and safety and taking risks with waste disposal etc.

However, the mining sector is now moving from an externalising environment towards one where environmental and social costs typically have to be included in the cost of doing business.

This is increasing the costs of mining, limiting land access, and extending the lead times for developing new or expanding existing mines.

The sustainable development agenda presents companies with a number of choices:■ Seeking out low-regulation, low-cost environments for

their future development.■ Developing a new business model that places a premium

on environmental responsibility and social progress.■ Trying to operate in the old way in the new world and

going out of business.

Corporate benefi ts of sustainable mining identifi ed

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ICMM calls for greater collaborationTHE International Council on Mining & Metals (ICMM) said the mining industry has much to off er the drive towards sustainable development in the mining and metals industry, but signifi cant progress cannot be achieved by the industry alone.

Speaking at the World Mines Ministries Forum in Toronto this month, ICMM secretary general Paul Mitchell said: “I believe we are now reaching the limits of what companies working alone can do to tackle the economic, social and environmental impacts of mining.”

He called for more collaboration between companies and other stakeholders – governments, communities, non-governmental organisations and international agencies.

“Such partnerships are needed if we are to truly realise the positive potential mining off ers. This will of course require a greater willingness by all parties to engage substantively, thus necessitating a commitment and openness that has not always characterised the sector to date,” he said.

Mr Mitchell also argued for a more discriminating response towards the leading companies from some non-stakeholders.

He said it is in their interest to be able to distinguish between those companies with which it is worth collaborating, and the ones to be avoided as partners, those who have no deep interest in sustainable development.

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enviromine

■LEARNING CURVEMadagascar hopes to speed up its development by urging mineral companies to help fi ght poverty and protect the environment. Its mines and energy minister said the country would try to learn from the poor experiences of other African mining and petroleum hotspots. The minister told Reuters that Madagascar was overhauling its mining code to put obligations on mining companies to contribute to local development. He said: “We want to put soft pressure on the extractive industries to accept this new challenge and put in place a model, so that when mining companies come to Madagascar there is always something for them to integrate themselves into.”

■ALCOA’S LARGESSEThe Alcoa Foundation will donate US$8.6 million to create the Alcoa Conservation and Sustainability Fellowship programme. It will fund the study of global conservation and sustainability research by 30 academic and non-governmental organisation (NGOs) fellows from around the world over the next six years. The research will then be given away to all companies and NGOs worldwide in an eff ort to spur better sustainable development practices globally. Initial studies include sustainable energy technology development in China, a new marine protected area for Blue whales in Chile and community-based resource management in Zambia.

■DIAMOND COMPROMISEThe Brazilian Government has said it may concede a diamond-rich area in Minas Gerais state to an organised group of wildcat miners (garimpeiros), in a move to prevent fi ghting over land. President Lula’s government is planning to grant space and rights to garimpeiros organised into co-operatives as part of its 2003 programme to regularise small companies and independent miners who do not cause social problems, smuggle drugs or damage the environment. Big companies have agreed to give up part of their land in a number of cases involving garimpeiros in a bid to improve Brazil’s image as a mineral exporter following concerns about pollution. Before the programme there were an estimated 1.5 million unoffi cial mines in the country.

FREEPORT McMoRan was forced to halt operations at the Grasberg gold and copper mine in Indonesia last month after hundreds of illegal miners blocked access to the site.

The miners were protesting against the company’s eff orts to clear them from an area where they pan for gold in Freeport’s tailings.

The protests have come at a time when the company faces criticism from human rights and environmental groups over its practices at the mine in Papua. Concerns have been raised over its relationship with the Indonesian military, which it pays to maintain security at the mine.

The Indonesian Government had also threatened to bring legal action against the company and close the mine. However, in a move that will please investors but disappoint some human rights and environmental activists, the government now says it will not close the Grasberg mine despite the recent violent protests that have already seen the deaths of four protesters.

According to Indonesian news agency Antara, Energy and Mineral Resources Minister Purnomo Yusgiantoro said: “We want to show that we respect contracts and the decision not to close PT Freeport (the US producer’s 91%-owned subsidiary) is to give foreign investors a sense of legal certainty.”

In January, the company’s chief executive, Richard Adkerson, responded to what the company called “disturbing and provocative mis-statements” about its

operations in Papua by The New York Times.He said: “Our affi liate, PT Freeport Indonesia, operates the

world’s second-largest copper mine on the island of New Guinea, where rainfall averages in excess of 200 in annually. Signifi cant volumes of gold are included as a by-product in our copper concentrate, which we produce in a physical separation process that does not involve the environmental impacts of cyanide leaching used in traditional gold-mining operations.”

Furthermore, he added: “The New York Times similarly mischaracterised the support we provide for Indonesian security forces and ignored the practicalities of conducting business in a remote area.

“Indonesian law prohibits us from employing armed private security or arming our employees to protect our people and their families, 98% of whom are Indonesian, including more than 25% from Papua.”

NEWMONT Mining Corp has reached an agreement with the Government of Indonesia to settle a civil action brought by the government against the company’s local subsidiary, PT Newmont Minahasa Raya (PTNMR).

The US giant has agreed to pay US$30 million in an out-of-of court settlement after the government claimed US$133 million in damages for alleged pollution in Buyat Bay from the now-closed Minahasa gold mine.

The agreement ends the government’s civil lawsuit against PTNMR. In November 2005, the South Jakarta District Court dismissed the lawsuit on jurisdictional grounds, but the government issued a notice of appeal.

Newmont has maintained that its marine tailings disposal system did not pollute the bay or harm local people. “We are not walking away from Buyat Bay,” said Robert Gallagher, Newmont’s vice president of Australia and Indonesia operations. To the contrary, this agreement reaffi rms our commitment to environmental responsibility and our confi dence that we have fulfi lled that commitment at Buyat Bay.”

However, the settlement does not aff ect the criminal action under way against PTNMR and its president, Richard Ness, who faces a 10-year jail sentence if convicted.

Under the terms of the agreement, the government

and PTNMR will nominate members to an independent scientifi c panel that will develop and implement a ten-year environmental monitoring and assessment programme.

The company will provide initial funding of $12 million to cover the cost of the monitoring and community development programmes. Over a ten-year period, Newmont will contribute an additional $18 million. The funds will be managed by an organisation governed by interested stakeholders.

Accountability for the fund will be ensured through yearly reports that will be made available to the public, and the transparency of the scientifi c panel’s activities will also be assured through annual reports to the public, the company said in a statement.

Protests halt operations at Grasberg

The closed Minahasa gold mine

Newmont dispute settled out of court

The Grasberg mine

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enviromine

■LAFAYETTE OFF THE HOOKThe Philippines said there was not enough evidence to prove mercury contamination around a mine owned by a unit of Lafayette Mining Ltd. The country’s Mines and Geoscience Bureau issued a statement after a local environmental group said analysis of water samples it had taken from the area showed the presence of cyanide and toxic heavy metals.

■HONDURAS CLAMPDOWNHonduras will not grant new permits for open-pit mines without stricter environmental laws and clearer social benefi ts. The Honduran president, Manuel Zelaya, said: “They can say we are sleeping on a mountain of gold. Well, we are going to be sleeping there … but this gold has to serve the Honduran people, and it has to serve the poor of Honduras to develop our nation.” The president of the country’s National Mining Association said various sectors were supporting a bill to put stricter conditions on new mining operations.

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THE Australian coal industry will spend up to A$300 million over fi ve years to help cut harmful emissions from coal-fi red power stations, according to a statement by the Australian Coal Association (ACA).

Through a project called the ‘COAL21 Fund’ the industry will work with the electricity generation industry to demonstrate “promising technologies” for cutting greenhouse gas emissions.

Most of the technology is known about but demonstrations are necessary to speed their take-up by the generating industry. As such: “A number of potential demonstration projects are now being assessed for funding support,” said Mark O’Neill, executive director of the ACA.

The new fund has been secured through a voluntary levy on coal producers, based on the volume of their production – a world fi rst, said the statement. “Already there is signifi cant buy-in, with companies representing around 90% of Australian black-coal production having signed on, and others expected to follow,” said Mr O’Neill.

The project will help develop technologies that increase the use of energy in a sustainable way. “Australia could make a diff erence and complement international eff orts”, he added.

Some technologies that may acquire funding include:■ Capture and permanent geological storage of carbon

dioxide.

■ Coal gasifi cation for either electricity or liquid fuels production.

■ Oxy-fuel combustion.■ Post-combustion capture and storage of carbon dioxide.■ Advanced clean coal preparation technology.

“What now remains is for the Australian electricity generators to join Australian coal producers in funding and developing the package,” said Milton Catelin, chief executive of the World Coal Institute.

Initially, the fund will target mature projects although newer ideas will be considered as the fi ve-year life of the project proceeds.

CS Energy/InterGen’s Callide Power Station in Queensland: the fi rst power station in Australia to employ supercritical technology to reduce coal consumption and reduce greenhouse gas emissions. It was commissioned in 2001

Aussie coal to invest in clean technology

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Drill/blastBord/pillar

RocksplittingRockcutting

SOUTH Africa continues to face its greatest challenge of the modern era: HIV and AIDS. With national prevalence rates reaching 23% of the population in 1998, the epidemic is worsening and the economy could slowly be edging towards the brink of collapse.

As South African mining companies supply over 40% of the world’s commodities, it is imperative to maintain a competitive position in the global market place. Therefore, the risks associated with the HIV/AIDS epidemic must be mitigated. Mines typically have higher prevalence rates of 25%, mitigated. Mines typically have higher prevalence rates of 25%, which predominantly aff ects their young and powerful male workforce.

With the uncertainty of illness, death and decreasing productivity, most mines have actively responded to the situation by preventing any further transmission of the

infection and by providing treatment to infected employees with antiretroviral drugs and other forms of medication.

Research undertaken in 2003 aimed to ascertain the cost of HIV and AIDS management programmes on a platinum-mining operation platinum-mining operation and its impact on mining project and its impact on mining project fi nance. The South African Bushveld Igneous fi nance. The South African Bushveld Igneous Complex (BIC) is a unique ore system extending Complex (BIC) is a unique ore system extending over 67,000 km2 at surface, holding about 80% of the at surface, holding about 80% of the world’s platinum-group metals (PGM) reserves and supplies, world’s platinum-group metals (PGM) reserves and supplies, and contains extensive reserves of chromium, iron, titanium, and contains extensive reserves of chromium, iron, titanium, vanadium and tin.

The BIC comprises two principal PGM-bearing reefs: The BIC comprises two principal PGM-bearing reefs: ■ The Merensky Reef, typically 7.5-11 g/t.■■ The Upper Group 2 (UG2) Reef, The Upper Group 2 (UG2) Reef, The Upper Group 2 (UG2) Reef,

3.5-19 g/t. The average grade and

platinum content of the Merensky reef mined is typically

Three years on from major research into counting the cost of managing HIV/AIDS programmes in South African mining,

risk managementrisk management

Controlling an epidemic in the southThis article is based on research by the author in 2003 for her masters dissertation at the Royal School of Mines. Despite numerous developments in the platinum mining industry over the ensuing three years, the results still have relevance to views on HIV and AIDS today

BY CARINA FEARNLEY

An AIDS patient sits in a An AIDS patient sits in a Médicins Sans Frontières consulting room with a doctor at a clinic in Khayelitsha, Cape Town, South AfricaPhoto: Bloomberg News


Fig 1

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Drill/blastBord/pillar

RocksplittingRockcutting

Three years on from major research into counting the cost of managing HIV/AIDS programmes in South African mining, MEM assesses its progress and implications

Controlling an epidemic in the south

“South Africa has one of the continent’s best healthcare infrastructures, yet one of the world’s worst HIV epidemics. Around fi ve million people, about 12% of its total population, are HIV+”

higher than that of the UG2 reef. The UG2 reef is, however, higher than that of the UG2 reef. The UG2 reef is, however, wider and more amenable to mechanised mining. wider and more amenable to mechanised mining.

South African platinum mines have increasingly used South African platinum mines have increasingly used mechanised mining techniques within the UG2 reef, despite mechanised mining techniques within the UG2 reef, despite a lower platinum concentration, to accommodate the strong a lower platinum concentration, to accommodate the strong rise in global demand for platinum. From an HIV and AIDS rise in global demand for platinum. From an HIV and AIDS perspective, a material consequence of mechanised mining perspective, a material consequence of mechanised mining techniques is that a smaller but more skilled workforce is techniques is that a smaller but more skilled workforce is required when compared to the traditional labour-intensive required when compared to the traditional labour-intensive techniques used in mining the platinum-rich Merensky reef. techniques used in mining the platinum-rich Merensky reef.

One of the key questions posed by the research conducted One of the key questions posed by the research conducted was whether the HIV/AIDS epidemic and its associated manage-was whether the HIV/AIDS epidemic and its associated manage-ment costs were enough to justify increasing the level of mech-ment costs were enough to justify increasing the level of mech-anised mining. The analysis was based on the Merensky and anised mining. The analysis was based on the Merensky and UG2 reefs at the Rustenburg Section of Rustenburg Platinum UG2 reefs at the Rustenburg Section of Rustenburg Platinum Mines Ltd, a wholly-owned subsidiary of Anglo Platinum. Mines Ltd, a wholly-owned subsidiary of Anglo Platinum.

MINING ON THE BICIn 2003, Anglo Platinum planned to expand UG2 production In 2003, Anglo Platinum planned to expand UG2 production at Rustenburg Section by 395,000 oz/y of refi ned platinum at Rustenburg Section by 395,000 oz/y of refi ned platinum by 2006, in line with its strategy to increase production to by 2006, in line with its strategy to increase production to meet the growing global platinum demand. The planned meet the growing global platinum demand. The planned expansion would allow existing resources to be used with expansion would allow existing resources to be used with little modifi cation, resulting in a lower capital expenditure little modifi cation, resulting in a lower capital expenditure requirement to establish the new UG2 mining areas.requirement to establish the new UG2 mining areas.

At the Rustenburg Section, conventional hand-held mining At the Rustenburg Section, conventional hand-held mining techniques dominate mining of the Merensky reef and include longwall, breast and down-dip mining (see fi g 1). The stopes are normally less than 1 m high, making the area too cramped for machinery; hand-held

pneumatic drills remain the most eff ective approach. As mining technology develops

and global health and safety trends and global health and safety trends become more stringent, there is an increasing become more stringent, there is an increasing

industrial interest in mechanisation techniques that industrial interest in mechanisation techniques that improve worker safety. Where mechanisation leads to higher improve worker safety. Where mechanisation leads to higher

productivity and lower unit costs, its implementation improves productivity and lower unit costs, its implementation improves international competitiveness.international competitiveness.

SOUTH AFRICAN MINING AND HIV/AIDSSouth Africa has one of the continent’s best healthcare infrastructures, yet one of the world’s worst HIV epidemics. Around fi ve million people, about 12% of its total population, are HIV+. Had South Africa moved quickly to fi ght the epidemic, it may have prolonged innumerable lives; instead, it now fi nds itself recording over 1,000 AIDS deaths daily.

Despite the slow approach of the government, the mining industry, along with the Department of Minerals and Petroleum, has developed a progressive, far-sighted policy and legislative environment to manage the epidemic eff ectively. The mine population is young and almost exclusively male, with both regional and local migrant workers. The isolation of many ore deposits leads to inhospitable locations, which historically have prevented family accompaniment.

Returning migrants often contribute further to the growth of HIV/AIDS.

Most South African mining companies have benefi ted workers and the related communities with extensive HIV and AIDS programmes. These companies are consequentially gaining positive exposure by developing eff ective manage-ment methods to preserve life.

ANGLO PLATINUMAnglo Platinum launched its HIV programme in 1998, despite managing the problem for over 20 years, to protect the group and its stakeholders by containing and managing HIV/AIDS. It is able to ensure the long-term sustainability of its business operations by reducing the infection rate among employees and surrounding communities. Anglo Platinum’s strategic plan encompasses economic impact and epidemic impact containment, including reducing fears and dispelling myths

Virtually unknown 25 years ago, AIDS is the leading cause of death in sub-Saharan Africa and the fourth-largest global killer. AIDS is caused by the human immunodefi ciency virus (HIV), which lives and multiplies primarily in white blood cells, the immune cells that normally protect our bodies from disease. As HIV develops, it slowly wears down the immune system so that ‘opportunistic infections’ can make HIV+ people very sick. AIDS is a fatal disease, but there are interventions that can prolong and improve quality of life, including clinical management of common opportunistic infections, highly-active anti-retroviral therapy (HAART), palliative care and counselling (above).

Community and home-based care can relieve local communities and health authorities by providing a social safety net for poor households aff ected by the disease, AIDS orphans and vulnerable children. HAART is a particularly complex treatment that requires sophisticated administration and monitoring. With discounts and generic drugs, the cost of HAART has been reduced to US$500-1,000/y per patient in some developing countries; this, however, excludes the appropriate administration costs, which remain signifi cantly high, and therefore are not available to all who require such treatment.

AA

1A

2

Time

Numbers

HIV prevalence

AIDS – cumulative

T1

T2

B1

B

Fig 2

THE HIV/AIDS EPIDEMIC

Continued on page 8

Fig 1: Mechanisation of the UG2 Fig 1: Mechanisation of the UG2 using bord and pillar techniques using bord and pillar techniques Source: Anglo Platinum

Fig 2: The epidemic curves of HIV and AIDS. ART will drive the curves to the rightwww.und.ac.za

MEM0603.indd 7 22.3.06 1:13:49 pm


“The Mineral and Petroleum Resources Development Bill states that all single-gender hostels should be replaced with family units due to the non-ideal psychological conditions and the fast spread of HIV”

risk managementrisk management

about the disease, respecting employees’ rights, assisting with access to appropriate and aff ordable healthcare and supporting eff orts to stop the disease spreading further.

Today, Anglo Platinum off ers regular HIV tests, counselling and, if needed, HAART, to keep workers healthy and productive. The programme is now expanding from the workplace to clinics in towns and villages near mines, often in partnership with AIDS charities.

THE MODELThe 2003 research evaluated the fi nancial impact on the value of the Rustenburg section expansion project through four models: 1: Developing a base case where no epidemic is assumed. 2: Managing the epidemic as conducted by Anglo Platinum in

2003.3: Incorporating family housing and care for orphans in the

above model.4: Ignoring the epidemic completely, ie no direct costs; only

those related to increased absenteeism, death, training and lower productivity.

The aim was to determine the fi nancial impact of these scenarios on both the Merensky and UG2 reefs, to test whether managing the epidemic is more cost-eff ective than ignoring it, and if mechanisation can, as a secondary eff ect, reduce HIV/AIDS management costs due to a smaller workforce.

As mechanisation is currently not economically viable within the Merensky Reef due to geological and engineering constraints, a critical question was whether, despite higher platinum grades associated with the Merensky reef, UG2 mechanisation could facilitate higher production at lower HIV/AIDS operating costs.

The above scenarios were modelled within a discounted cash fl ow to place a value on the Merensky reef maintaining its current production levels, and the UG2 layer, starting production in 2002 and stepping up until 2006, when full capacity was expected to be achieved.

ASSUMPTIONSAlthough Anglo Platinum provided its HIV/AIDS costs and projections as of 2003, most of the assumptions in using the data are entirely based on the author’s own research.

The cost estimations supplied incorporated additional leave and absenteeism, HAART and voluntary counselling and testing (VCT), death and medical incapacity benefi ts, replacement of personnel, prevention, education and other inventions, medication and hospitalisation.

The cost-model used assumed that management would take the necessary steps, either by increasing the labour complement or using overtime, to maintain the required production levels.

Costs not incorporated due to their complexity included

pensions, further benefi ts for the family, larger administrative costs and a further decrease in staff morale. However, it is clear that, in reality, the costs of the models developed are likely to be higher.

The model did not take into consideration any loss in on-the-job productivity of the workforce caused by the side eff ects of HAART treatment or associated general illnesses. HIV prevalence testing is anonymous; and while specifi c workers cannot be identifi ed for treatment, the data is useful in quantifying and mitigating operational, social and fi nancial risks. By ignoring the epidemic, high costs would be incurred through extensive recruiting and retraining, additional leave and absenteeism.

The Mineral and Petroleum Resources Development Bill, enacted in October 2002, states that all single-gender hostels should be replaced with family units due to the non-ideal psychological conditions and the fast spread of HIV. Tests at Rustenburg, however, demonstrated that there are no signifi cant diff erences in prevalence between HIV workers staying at single-gender hostels and family homes. Therefore, these added costs were not incorporated into the research models.

Model three assumes that 70% of orphans will be cared for by informal fostering, 25% by statutory adoption and foster care and 5% on statutory care. The numbers of orphans were based on death rates as predicted by studies in 2003.

The discounted cash-fl ow models developed as an integral part of this analysis were based on simplifi ed versions of the company projects under study. As such, they do not incorporate all the variables that are present and therefore performance indicators do not necessarily accurately refl ect the reality of the Merensky and UG2 mining projects at Rustenburg Section. The models were used simply as a platform to apply a simulation of an independent valuation and to evaluate the practical application of the techniques.

The cash fl ow for the model was developed based on real operating performance data, ie reserves and resources, mining rates, grades, operating costs, working capital, capital expenditure, production schedules, effi ciency etc, as disclosed in the annual and interim reports.

As future prices and costs are unknown, in order to account for risk and uncertainty, a sensitivity analysis and Monte Carlo simulation (MCS) was conducted which randomly generates values, within consensus limits, for uncertain variables repeatedly to simulate a possible real-life scenario.

Projected AIDS and non-AIDS deaths in South AfricaSource: Whiteside, 2002

Continued from page 7

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2005 2010 2015

MEM0603.indd 8 22.3.06 1:13:52 pm


FINANCIAL ANALYSISThe analysis showed that costs associated with managing the HIV/AIDS epidemic in model 2 for both reefs are minimal relative to the base case (model 1), with project value reduced by around 3% for the UG2 project and 10% for the Merensky reef.

Model 3 reduces project value as determined by model 2 by less than 1% for both reefs, indicating that, should Rustenburg have to account for the costs of housing and caring for orphans under its current HIV/AIDS programme, it would have little impact on the current project value.

By ignoring the epidemic in model 4, the project value is reduced by about 6% for the UG2 and and about 23% for the Merensky. Huge assumptions in creating model 4 aside, it is clear that, by ignoring the epidemic, project value signifi cantly deteriorates, although the impact is lower in the UG2 than in the Merensky reef.

Despite the costs in managing the HIV/AIDS epidemic, a sensitivity analysis demonstrated that volatility in commodity prices and currency exchange rates have the greatest impact on the net present value of the project. Both factors are generally outside the control of mine management but Anglo Platinum’s stated strategy of increasing production to meet growth in global demand should reduce the long-term volatility in metal prices.

The MCS demonstrated that failure in a project is most likely to stem from metal price volatility, increased costs of production and high interest rates all of which signifi cantly reduce fi nancial returns. The risk associated with the relatively low absolute cost of HIV and AIDS management is less for the UG2 than the Merensky reef. Although associated HIV/AIDS costs are expected to rise it can be argued that the proposed introduction of a 4% plat inum royalty charge by the South African Government is a larger fi nancial threat than the costs of managing the HIV/AIDS epidemic.

CONCLUSIONSDespite the ethical argument that a life is priceless, in fi nancial modelling, it is necessary to place a value on an inherently unquantifi able risk. There are still so many unknowns relating to the mining environment and such a wide-scale and devastating epidemic that the only control that can be achieved is by managing the situation as best as possible.

The 2003 research has shown that, by managing the epidemic as Anglo Platinum has, its cost is relatively low, and lower still within the UG2 reef when exploiting new mechanisation techniques.

Yet although mechanisation can provide the added benefi ts of a smaller workforce and greater operational effi ciencies, it requires more skilled labour. And Merensky reef still remains highly profi table due to the higher platinum grades.

In 2003, mechanised mining of the UG2 reef was in its early stages and adapting to the geological, grade and structural constraints of the reef proved to be the largest challenges. The high chrome content of UG2 also presented challenges in the smelting process, addressed to a large extent by separate slag processing and higher smelter temperatures.

Therefore, a primary conclusion of the 2003 research was that moving to a mechanised UG2 mining environment cannot be justifi ed by lower HIV/AIDS management costs alone because of the many other mining and economic variables that drive profi tability.

As a result of diligent mine HIV/AIDS programmes, the impact of the epidemic on mining and the South African economy remains stable, with continued growth in the production and trading of commodities and the associated secondary industries. With the government’s slow and gradual realisation of the extent of the epidemic, the possibility of economic collapse becomes less likely. South African mining companies are global leaders in addressing the epidemic, thereby providing business models for other regions where HIV/AIDS is a problem. The success of eff ective HIV/AIDS management appears to be the early identifi cation of impact and potential impact, and early appropriate response.

Carina Fearnley is an analyst at Fox-Davies Capital, a corporate broker and fi nancial adviser specialising in natural resources and emerging markets

Left: Anglo Platinum manage-ment and members of trade unions and associations after the signing of the HIV/AIDS AgreementSource: Anglo Platinum

“A primary conclusion of the 2003 research was that moving to a mechanised UG2 mining environment cannot be justifi ed by lower HIV/AIDS management costs alone because of the many other mining and economic variables that drive profi tability”

We see solutionswhere others don’t

MEM0603.indd 9 22.3.06 1:13:54 pm

Ministers from the 17 European Space Agency member states gathered in Berlin late last year and approved a robotic exploration mission to Mars carrying a drill which will study surface materials for evidence of life.

DUE for launch from Kourou, French Guiana, in 2011, the ExoMars mission will deploy a highly mobile rover with an exobiology instrument suite and a drill that will reach soil samples up to 2 m below the planet’s surface in search of traces of extinct or still existing life.

Separately, NASA’s twin Mars rovers have so far explored the surface of the red planet for more than a full Martian year. The rovers’ original mission was scheduled for only three months.

Both rovers keep fi nding new variations of bedrock in areas they are exploring on opposite sides of Mars. The geological information they collect increases evidence about ancient Martian environments, including periods of wet, possibly habitable, conditions.

The rovers are equipped with a rock abrasion tool, which is fi tted to the arm of the rover and weighs less than 720 g. It uses a powerful grinder able to create a hole 45 mm (almost 2 in) in diameter and 5 mm (0.2 in) deep into a rock on the Martian surface.

Space agency approves drilling mission to Mars

still life

Photo montage: the European Space Agency headquarters; (main photo) view of the Martian landscape taken by the panoramic camera aboard a NASA rover; grinding of the rock dubbed ‘Mazatzal’ (top)Photos: Bloomberg News; Design: Tim Peters


MEM0603.indd 10 22.3.06 1:14:16 pm


methane extraction

IT IS not always the case that an initiative tackling a mining environmental problem also directly improves the health and safety of miners, but this is true for a new World Bank project to remove methane from Chinese coal mines.

The bank has signed a memorandum of understanding with China’s fi nance ministry for designing and developing a Clean Development Fund, where sales of credits for emission reductions, generated by projects such as coal-mine methane (CMM) reduction, will be used to support sustainable develop-ment projects, including the mining projects them selves. Under the deal, 65% of these revenues would be earmarked for climate-change projects, including CMM recovery, creating an economic and environmental virtuous circle.

Senior Chinese fi nance ministry offi cial Ju Kuilin says: “The government of China attaches a high priority to participation in global eff orts under the Kyoto Protocol. We are glad that it has been possible to bring forward this project…[making it] … a signifi cant contribution to these eff orts.”

This is another sign of a recent sea-change in a government for whom environmental controls have been a low priority in the past.

After all, methane explosions in China’s mines are notorious. In 2004, 6,027 workers were killed in the industry, the over-whelming majority from gas accidents. In February 2005, 203 miners were killed in one methane explosion, at Fuxin, in Liaoning province, northeast China.

Two reasons for securing World Bank assistance for extract-ing methane from Chinese mines are:■ HFC-23 (trifl uoromethane) is one of the most potent greenhouse gases around, having a global warming potential 11,700 times that of carbon dioxide. It is abundant in Chinese mines, and when it is not blowing up China’s miners, it is seeping or being directed to the surface and into the atmosphere, trapping sunlight and heat.■ Because of the Kyoto Protocol and its related greenhouse gas emissions trading systems, HFC-23 is actually quite a valuable commodity. This allows organisations transferring technology to developing countries, which reduce greenhouse gas emissions to claim carbon credits, which then can be traded, and eventually be set against a country’s commitments to reduce global-warming pollution. This is especially the case where the gas can be burnt and converted into electricity or for other industrial and domestic uses.

To fi nd out how the umbrella agreement might work in practice, Mining Environmental Management spoke to senior Mining Environmental Management spoke to senior Mining Environmental ManagementWorld Bank environmental specialist Kentaro Yabe about how his organisation operates potentially similar CMM reduction projects already in place.

The bottom line is that the bank, acting through funds operated by its Carbon Finance Unit (CFU), helps fi nance the purchase and installation of CMM reduction technology, by agreeing to buy carbon credits generated by this new equipment. This means there is a constant revenue stream to help operate and maintain the systems.

Mr Yabe says the problem with CMM is that it is not seen as an attractive fuel. This is because, historically, the equipment to extract and then utilise methane for power generation has been expensive and the gas is of variable quality, with only an average methane concentration of 40%.

The result of this, says the World Bank offi cial, is that prices for CMM are often too low “to make sense for mines to install an expensive recovery system, power generator and pipelines”

associated with extraction and energy recovery schemes. This situation can be exacerbated by complex national or

local administrative systems regulating the sale of any surplus electricity generated by such technology, he adds. As a result, simple venting systems have generally been more popular among mine operators in developing countries such as China, with all the resulting energy wastage, greenhouse gas generation potential for accidents.

Mr Yabe notes: “We are trying to give mines incentives to invest in recovery/utilisation system by [creating an] additional revenue stream: carbon fi nance.”

EMISSIONS-TRADING PROJECTS: HOW THEY WORKMr Yabe explains that CMM project joint ventures, mines and mine operators end up owning the sequestration and utilisation technology and participants are usually free to decide which technology they want to install. He says: “We assess if the project meets our safeguard policy but do not instruct the project [to choose certain] technology as long as the project chooses good, reliable, safe and environmental-friendly technology. If the project asks us to fi nd a technology, we will co-operate in some way. We always respect project owners’ interests and decisions.

He continues: “Local technology is the cheapest in many cases”, so a policy favouring the purchase of domestically-produced technology maybe in the interest of a project operator. “On the other hand, carbon fi nance often gives an incentive to project owners to introduce foreign state-of-the-art technology.”

As for selecting mines for World Bank-supported methane projects, he says there is no minimum size restriction on projects, regarding coal or methane production.

“Any size” of mine could apply. There is a longevity issue here, however. The bank purchases emission reductions in advance – up to 2012 and sometimes beyond – to secure good fi nancing. Therefore, mines with a solid guaranteed future “good enough to continue their operations [both mining and utilisation of CMM] until around 2012 are desirable”, he says.

Another consideration is obvious: underground mines are the key focus: it is pretty hard to trap methane from an open-cast pit. As for geography, the bank does not discriminate between regions in a country. However, it can only work with countries offi cially support ing the Kyoto Protocol, which include China, as well as other big developing-country coal producers like India, Russia and Ukraine.

Progress has already been made. Operating independently of the new umbrella agreement, the bank is working with a mine in Jincheng, north-central Shanxi province. It involves the capture of methane and its conversion into 120 MW of on-site power production.

This has eff ectively been fi nanced by the CFU’s Prototype Carbon Fund contracting to buy a minimum of 4.5 Mt in carbon dioxide credits, creating 60 jobs at the power plant, and helping to “improve the safety of miners by establishing a better way to eliminate explosive methane from the mine”, said a CFU report.

The bank is also negotiating another standalone CMM project in Shanxi. Offi cials are about to carry out a feasibility study for the project, which will recover CMM and use it to replace coal as a fuel for household and industry users.

BY KEITH NUTHALL

Cleansing China’s coal minesWorld Bank funding to reduce emissions from China’s coal mines will simultaneously address issues regarding the health and safety of the nation’s mining workforce

While awaiting news, relatives of trapped coal miners weep near the state-owned Chenjiashan mine in Tongchuan City. Methane explosions are notorious in China’s minesPhoto: Bloomberg News

MEM0603.indd 11 22.3.06 1:14:21 pm


CASE studies that demonstrate how the various elements of sustainable development are being implemented across the Australian mining and minerals processing industry are well documented. Lessons learned from these are that environmental

and social improvements at operation levels, and within the communities in which they operate, can realise short- and long-term economic benefi ts.

The most commonly-used mechanisms for implementing sustainable development across the case studies surveyed were the cleaner production elements of technology modi-fi cation and on-site recycling (or re-use) of wastes, as well as stakeholder engagement.

The scope of the sustainability agenda fully integrates ecological, social and economic objectives in a way that provides both challenges and opportunities for the mining industry. Sustainable development in the minerals industry means that investments should be profi table, technically appropriate, environmentally sound and socially responsible.

The Australian mining industry, through the Minerals Council of Australia (MCA) (a member of the International Council of Mining and Metals; ICMM), introduced a code of practice in 1996 to facilitate greater environmental stewardship across the industry.

In 2004, the MCA released a framework for sustainable development called “Enduring Value”, which further underpins the Australian industry’s commitment to sustainable development. Enduring value was based on the ICMM’s ten principles of sustainable development published in May 2003. Putting these principles into action has been a challenge for the industry globally and in Australia, and much has been achieved in meeting it.

This article summarises the fi ndings from a survey of 13 case studies across Australia’s industry that show how sustainable development can be successfully implemented at the opera-tional level of a mining or minerals-processing operation, using cleaner production tools and stakeholder engagement.

sustainable developmentsustainable development

MEM takes a look at the sustainable development mechanisms that have been put in place in Australia’s mining and minerals-processing industry

Realising mineral theories ‘down under’

BY TURLOUGH GUERIN

Case-study focus Minerals sector Company and location Summary description of case study (activity and outcome)Air emission reduction Aluminium Comalco Aluminium Ltd (Rio Tinto) Use of dry-scrubbing technology led to A$11 million in savings and Bell Bay Smelter – Bell Bay, Tasmania contributed signifi cantly to the local community.Dust management Lime Blue Circle Southern Cement Plant modifi cations enabled removal of fi ne dusts from the process and – Marulan, NSW the collection of the limestone dust for sale as a by-product.Energy and materials Industrial Tiwest Joint Venture Pigment Plant Modifi ed process to recover synthetic rutile uses waste acid fromeffi ciency minerals – Kwinana, Western Australia neighbouring company to produce ammonium chloride for use in pigment production. Iluka Resources Ltd Synthetic Adopting technology to capture waste heat power and installed Rutile Plant – Kwinana, Western Australia an electrostatic precipitator. Generated 6.5 MW returning 16% on capital saving A$1.5 million/y. Coal BHP Billiton Coal – Illawarra region, NSW Capture of coal-seam methane and piping it to surface where it generates 94 MW of energy through electricity generation (energy for 60,000 homes). Energy Xstrata’s Mount Isa Mines Program of innovations enabled opening of new mine, increase capacity – Mt Isa, Queensland while cutting electricity use, CO2 emissions and delaying demand for new power station.Water effi ciency Steel OneSteel Whyalla Steelworks Reed beds were introduced for treatment of industrial waste water to – Whyalla, South Australia reduce water consumption and increase quality of discharged water.

Copper and BHP Billiton Olympic Dam Mine Production processes were modifi ed so less water is used in fl otation/ uranium – Roxby Downs, South Australia separation; recycling acid and saline water from mine tailings for drilling and dust control. Waste minimisation Aluminium Alcoa Portland Aluminium Reduction in waste going to landfi ll by evaluating processes, through – Portland, Victoria gaining the commitment of its workforce and combining with waste minimisation concepts.Integrated sustainable Aluminium Alcoa World Alumina Implemented range of cleaner production initiatives at bauxite mines development – various locations in Western Australia and alumina refi neries, led to saving of about A$0.5 million annually.

Gold JV between Delta Gold & Placer Dome Developed range of sustainability practices, taking holistic approach to Granny Smith Mine mining. Created opportunities for indigenous communities and reduced – Laverton, Western Australia landfi ll waste.

Oxiana Golden Grove Operations Initiatives reduced pollution and landfi ll waste, improved energy – Western Australia effi ciency and reduced greenhouse-gas emissions, and improved rehabilitation processes. Diamonds Argyle Diamond Mine (Rio Tinto) Mine was threatened with closure in 2001 but is still operating in 2006 as – Kununurra, Western Australia a result of eff orts by management implementing a range of initiatives.

TABLE 1: CASE STUDIES OF SUSTAINABLE DEVELOPMENT AND CLEANER PRODUCTION IN AUSTRALIA’S MINERALS INDUSTRY

“An important means for making sustainable development operational is through the use of cleaner production approaches”

MEM0603.indd 12 22.3.06 1:14:22 pm


A SURVEY OF AUSTRALIAN CASE STUDIES Table 1 provides a summary of how sustainable development is being implemented in Australia from the outcomes from the 13 case studies surveyed. The case studies presented cover a wide range of the environmental, social, community and business issues facing modern mining operations in Australia.

The studies demonstrate:■ That a wide range of companies, representing a cross-section of the mining and minerals-processing sector, have embarked on the sustainable development journey. ■ That there is a need for an integrated response by mining companies to the environmental, social and economic impacts at their operations. This includes a co-ordinated internal eff ort within the organisation to implement sustainable development but also across the industry.■ The fi nancial, environmental and social benefi ts of implementing sustainable development initiatives can be signifi cant, particularly when the impacts are considered across a mine and the region in which it is operating.■ Diff erent operations face diff erent challenges, depending on the location of their operations, and indicates the need for mining operations to work with the natural environment in their area. For example, the BHP Billiton Olympic Dam case study illustrated measures undertaken to improve water effi ciency in remote regions, which suff er water shortages.■ The importance of mining operations working with and providing employment for indigenous communities. This is becoming an increasingly important expectation for many mining companies striving to be sustainable.■ Cleaner production and stakeholder engagement are the key mechanisms for embedding sustainable development initiatives.

WAYS TO EMBED SUSTAINABLE DEVELOPMENTAn important means for making sustainable development operational is through the use of cleaner production approaches. Cleaner production is a preventive strategy, and to improve its success in contributing to a business’ sustainability, it should be linked to the core activities of the business. The elements of cleaner production, as applied to the mining and the minerals industry, are summarised in table 2 (p14) and the diagram above.

Cleaner production is an environmental improvement strategy, which leads to specifi c solutions applicable to any given business. However, cleaner production also draws upon, and is linked to social and economic drivers. Cleaner production is one of a number of ways in which an organisation can move toward sustainable development and its success is linked to both internal and external stakeholders of a mining or minerals processing organisation.

takes a look at the sustainable development mechanisms that have been put in place in Australia’s mining and minerals-processing industry

Realising mineral theories ‘down under’

Cleaner production

Productmodification

Inputsubstitution

Technologymodification

Goodhousekeeping

Onsiterecovery

First tier: source reduction

Second tier: recycling and re-use

Above: Five cleaner production approaches. Cleaner production aims at making more effi cient use of natural resources (raw material, energy and water) and reducing the generation of wastes and emissions at the source. This is generally achieved through a combination of product modifi cation, input substitution, technology modifi cation, good housekeeping and (on-site) recycling and reuse

Continued on page 14

MEM0603.indd 13 22.3.06 1:14:24 pm



Cleaner production complements life-cycle analyses (LCA), product stewardship programmes and initiatives, as well as social ‘tools” including stakeholder engagement. Stakeholder engagement, which has become more and more important in the global mining industry, is now being recognised by mining managers as a critical tool, enabling them to operate their mines. The type of stakeholders relevant to mining operations include local, state and federal governments, communities, suppliers and customers. The way in which these relationships within and external to an operation are managed, is critical as these will impact upon all initiatives to enhance the operation’s future viability.

The main mechanisms for implementing sustainable

development in the case studies are given in table 3. Based on an analysis of these case studies, the following observations can be made about the use of cleaner production, LCA, product stewardship and stakeholder engagement in the Australian minerals industry:■ Technology modifi cations, including process equipment redesigns and on-site recycling (or recovery), are the most common applications of cleaner production tools with more than 60% of the 13 case studies using these approaches.■ Stakeholder engagement was an important approach used with more than 50% of case studies demonstrating its important role. ■ Resource use optimisation was also an important cleaner production tool, with 46% of the reported case studies using this as a major means of implementing sustainable development initiatives. This included optimisation of how ore resources and other process raw materials are used, as well as improvements in how other inputs were used including energy sources and chemical reagent inputs into downstream processes. ■ Input substitution, good housekeeping, LCA and product stewardship were less prominent; under 35% of case studies demonstrated that they were used for contributing to sustainable development at mining and minerals-processing operations.■ Pigment production at the Tiwest joint venture in Western Australia demonstrates an example where numerous tools for implementing sustainable development were eff ectively used in an integrated manner.■ Coal-seam methane capture at BHP Billiton’s operations in the Illawarra region of NSW, and effi cient waste use at its Olympic Dam operations in South Australia, both demonstrate operations where cleaner production technologies and stakeholder engagement have been integrated eff ectively.

HIGHLIGHTS AND TAKE-HOME MESSAGESThe case studies highlight the following about implementing sustainable development in Australian minerals industry:■ Mining and minerals companies in Australia are putting

Cleaner production element Application Mining Minerals processingResource use optimisation Improved separation of overburden and Sequential leaching to recover multiple other wastes/materials to produce minerals/metals from ore higher-purity ore

Enhanced modeling of orebody to optimise Conversion of process wastes and emissions ore recovery into useful by-products

Sourcing customers to match range of Residue processing into geochemically-stable grades ores produced forms for storage with minimised impactInput substitution Fluids selection for operating plant in process Use of environmentally-friendly reagents and non-process areas and process auxiliariesTechnology modifi cation Effi cient mine design to minimise minerals Alternative metallurgical processes movement during operation and for closure (eg biotechnological)

In-pit milling and separation Use of energy-effi cient fi xed/mobile plant

Design of mine refuelling and lubricant Application of fuel-effi cient furnaces dispensing facilities to enable lowest cost and and boilers safe supply to mobile plant Enhanced monitoring and control of leaching and recovery processesGood housekeeping Monitoring and benchmarking of haulage Use of inventories to manage and control all fl eet fuel effi ciency inputs into processOn-site recycling Composting of green wastes to produce Recovery and reprocessing of un-reacted heat/steam generation ore from processing waste

Reuse of overburden/waste rock in progressive Counter-current use of water for washing rehabilitation of mine site operations

TABLE 2: GENERIC APPLICATIONS OF CLEANER PRODUCTION IN THE MINING AND MINERALS INDUSTRY


Continued on page 16

Copper being smelted at WMC Resources Ltd’s Olympic Dam Copper mine, South Australia, where cleaner production technologies have been integrated eff ectively

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Above: Illawarra Coal produced 6.07 Mt of saleable coal in 2004-05Above right: dust suppression at Illawarra Coal’s product stockpile, Port Kembla Coal Terminal

sustainable development into operation at their sites. The extent to which this is being done varies from operation to operation and it is reasonable to state that no one operation reviewed has implemented a fully sustainable operation.■ Environmental and social improvements at operations and communities in which they operate, can realise economic benefi ts and will not always incur a major fi nancial cost for a mining operation or its corporate function. For example, improvements to waste-management practices and waste prevention can lead to cost reductions and often increased revenues.■ Local communities provide the means by which a mining or minerals-processing operation can realise its full potential in

contributing to a region’s economic and social well-being. ■ Water-effi ciency improvements will be needed by any mining company planning to remain viable in future, particularly in Australia where water is major limiting resource. Similarly energy effi ciency improvements will also be important.■ At the operations level, there needs to be clear commit-ment from senior management to make the case for change to a more sustainable mining or minerals-processing operation. Such commitment is needed if eff ective operation-wide engagement and participation is sought for a sustainable development initiative.■ Mining companies need to work closely with other businesses (eg neighbours and others processors and manufacturers in minerals supply chain) and suppliers to identify new processes, products and knowledge that will increase the sustainability of their businesses. For example, there were relatively few examples where a mining operation had engaged explicitly with suppliers to enhance its own move towards sustainability. This suggests that there are barriers to the current way in which suppliers are engaged by mining operations and that these barriers need to be overcome before the benefi ts to sustainability, of closer engagement with suppliers, will be realised.

Turlough Guerin works for Shell’s Commercial Fuel business in Sydney, and supports the mining and heavy industry marketing and sales team in Australia. He can be contacted via e-mail at: [email protected]

TABLE 3: A COMPARISON OF THE 13 CASE STUDIES AND THE SPECIFIC TOOLS EMPLOYED AT EACH OF THESE

Note: major (■) and minor (■) emphasis of the particular tool or approach evident from the case studies

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este

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)

Was

te h

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uka

Rutil

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ant,

Wes

tern

Aus

tral

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Coal

-sea

m m

etha

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tilis

atio

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HP

Billi

ton,

NSW

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Effi c

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Aus

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Inte

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Min

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Cleaner Production Resource use optimisation ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Input substitution ■ ■ ■ ■ ■ ■ ■ Technology modifi cation ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Good housekeeping ■ ■ ■ ■ ■ ■ ■ On-site recycling (recovery) ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Life-cycle analysis (LCA) ■ ■ ■ ■Product stewardship ■ ■ ■Stakeholder engagement ■ ■ ■ ■ ■ ■ ■ ■ ■

Australian mining case studiesAustralian mining case studiesAustralian mining case studies

Tools and approaches used


Right: Tiwest’s pigment processing plant is where numerous tools were eff ectively used for sustainable development in an integrated manner

MEM0603.indd 16 22.3.06 1:14:36 pm


A NEW method has been used to reposition two mineshaft vents on a former colliery site in West Yorkshire. The two closed valves on the vents were not only unsightly, but could also have constituted a hazard, as the area they were in is to become a

children’s play park.The task faced by the main contractor, Cheetham Hill

Construction (CHC) and consultant White Young Green (WYG), was to remove the vents and valves, which were under a vacuum of about 0.33 bar, caused by the extraction of methane from the disused Wheldale/Fryston colliery, some 4 km away, at the rate of 2,500 m3/h.

Opening the valves would create an infl ow strong enough to suck anything or anyone nearby into the old shaft, and the pressure drop would also interfere with the extraction process which is due to continue for another six to ten years. After this, the vent stacks will be required to act as conventional vents, with the valves open, to release any methane and prevent a build-up of pressure which could cause it to permeate through the ground.

Initially the two valves were at ground level, with the 600 mm diameter stacks extending down approximately 4 m to the caps, and up to a height of about 3 m above ground.

CHC had already laid two plastic pipes, which will connect the shafts to new vents outside the site boundary. The objective of this contract was therefore to remove the existing stacks and reposition the valves immediately on top of the mineshaft caps, so that the new venting system could be connected to the mineshafts with nothing visible above ground.

Pipe Equipment Specialists Ltd (PESL) off ered a solution to the safe and leak-free removal and replacement procedure using a steel cylinder (launch tube) about 2 m in length, with a fl ange at one end and a blanking plate at the other. In the centre of this plate was a glanding system that would allow a steel tube (support rod) to pass through while providing a good seal. A pressure gauge and release valve were also fi tted.

The launch tube was long enough to contain two infl atable stoppers, which were connected by short chains, with the infl ation hose of the lower one passing through a small central tube built into the upper one. The support rod, which passed through the gland, and was fi xed to the uppermost stopper, was used as the means of lowering and raising the pair of stoppers within the launch tube and the vent pipe.

With the vent valve closed, the launch tube containing the two stoppers was bolted on to the top of the valve, which was then opened to allow the stoppers to be pushed through the valve and into the 600mm diameter pipe below. Once in position, just below the top of the mineshaft cap, the stoppers were infl ated, thereby sealing the pipe and allowing the valve to be removed.

Several additional safety measures were adopted. First, a specially fabricated steel plate could be placed over the exposed vent pipe or valve at any time, so that nothing could be drawn into the shaft if the stoppers suddenly failed.

Second, clamps were fi tted to the support rod and at least one of these was in use at any given time to secure the rod to either the metal plate or to scaff olding erected above the shaft.

Third, the airlines to the stoppers were permanently connected to nitrogen cylinders through automatic valves

which ensured that the correct pressure was maintained, the system was also fi tted with a low pressure alarm which sounded in the main site offi ce if the pressure dropped for any reason.

Finally, safety harnesses and lines were used by all personnel working in proximity to the shaft.

Once the section of vent pipe above the cap had been removed, the valve was lowered into its new position directly on the cap itself. After bolting it in place, the launch tube previously used to install the stoppers was fi xed to the top of the valve which could then be opened. The pressure in the stoppers was then released, and the airlines were connected to the release valve on top of the launch tube. This ensured that the pressure within the stoppers was the same as that outside them – ie, a partial vacuum – so that they defl ated fully and could be lifted up through the open valve and back into the launch tube.

After the retrieval of the stoppers within the launch tube, the vent valve was closed and the launch tube containing the stoppers was removed. Although the process took a little time because of the need to ensure that the rod attached to the stoppers was always secured in at least one place at all times, the operation was completed successfully and with no risk of pressure loss or danger to personnel.

WYG’s resident engineer, Barry Lazenby, says: “As far as I know, this is the fi rst time that this procedure has been used to seal mineshaft vents while replacing or repositioning the associated valves and pipework. Although there was a learning curve for everyone involved, the system worked well and very safely, and we would be happy to use it again.”

Steve Kent managing director of PESL is understandably hopeful that the method will fi nd favour elsewhere. “There is an ongoing programme of redeveloping former colliery sites, many of which have vent stacks similar to these,” he remarks.

“Methane pumping, with the associated negative pressures within the mineshaft and vent stack, is also fairly common, and we now have a technique that allows alterations to be carried out simply and safely.”

case studycase study

Tips on eff ecting a vacuum clean-up job

Vent stack immediately prior to removal

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technologyAtlas rig to make European debut in ParisATLAS Copco’s new surface drill rig, which operates at substantially reduced noise levels, will receive its European launch at this April’s Intermat show in Paris.

According to the company, the ROC-series rig will be the quietest-running and most intelligent rig of its kind in the world. The rig was initially launched in Finland late last year.

The SmartRig ROC D7C has noise levels that are about 10 db(A) below that of other rigs on the market and comes with a lower fuel consumption and increased drilling capacity.

Operationally, it suits environ ments such as urban areas, where strict noise restrictions are enforced. In some cases, noise reduction can equate to as much as 50%, depending on conditions and position from the rig.

Drilling noise created by

the hammer and drillstring generates vibrations in the feed system, boom and body of the rig. The rig’s silencer consists of many diff erent components which reduce the overall noise level, the most noticeable of which is the hood that covers the mast.

The advanced and more effi cient hydraulic system, and a new, powerful engine (CAT 6.6) makes it possible to lower the idling rev/min

and select the optimal power needed according to rock conditions. This makes it possible to reduce the fuel consumption by up to 30% compared to similar rigs.

The rig also has an updated intelligent system, which makes it possible to increase the shift capacity through faster positioning. Other ‘smart’ features include a GPS system for position monitoring.

INGERSOLL Rand (IR) has launched two com pressor models, based on a redesigned common platform, to meet this year’s European noise regulations*.

The 7/26E and 7/31E portable compressors use a ‘serviceless’ direct-driven 85 mm airend (the 7/26 model used a belt-driven airend). For environmental safety, the new ‘bunded base’ option provides a

fully-contained base to ensure all operating fl uids (fuel, oil and water) stay within the compressor.

The generator variants meet specifi c needs for compressors that provide power for lights, tools and fusion welding and compressed air for powering

breakers and other pneumatic equipment.

*Portable compressors are among the 57 types of outdoor equipment for which most noise limits and labelling requirements have been set by European Directive 2000/14EC. With a view to reducing noise levels, the Directive has been introduced

New IR compressors meet Euro noise ruling

The SmartRig ROC D7C: boasts

noise levels about 10 db(A) below

that of other rigs on the market

MEM0603.indd 18 22.3.06 1:14:41 pm


DATES FOR YOUR DIARY

tailingsMERCURY pollution from artisanal gold mining will feature prominently on the agenda of The International Conference on Mercury as a Global Pollutant this August. In advance of this meeting in Wisconsin, US, Simon Handelsman and Dr Marcello Veiga highlight the work being carried out by the Global Mercury Fund to tackle the problems associated with mercury contamination.

There are estimated to be some 15 million people involved in artisanal and small-scale gold mining (ASM) in more than 55 developing countries and they use mercury extensively. This results in as many as 100 million people whose health may be damaged by mercury contamination.

To address the problems, the GEF/UNDP/UNIDO-supported Global Mercury Project (GMP) was set up in August 2002. Six countries (Brazil, Lao PDR, Indonesia, Sudan, Tanzania and Zimbabwe) are participating in a pilot project to remove barriers to the introduction of cleaner technologies for ASM. Other neighbouring countries (including Venezuela and Ecuador; and Mozambique and Guinea in collaboration with Blacksmith Institute of NY) are also receiving some assistance.

The free trade of mercury from developed countries, especially Europe, makes mercury readily available. In most cases, mercury enters developing countries through legal channels for legitimate uses (eg dental fi llings), but is diverted to ASM operations.

While the amount of mercury produced from mining (including by-product production) fell from 6,066 t in 1990 to 1,849 t in 2000, the availability of recycled mercury from chlor-

alkali plants and other sources increased from 440 t in 1990 to 910 t in 2000.

GMP is introducing best practices and pollution prevention measures to limit mercury contamination from ASM. During the past four years, as a practical measure, it has promoted the use of a retort that can be made locally from inexpensive materials and developed in collaboration with the University of British Columbia’s Department of Mining Engineering, training programmes to make miners sensitive to the health risks and adopt new practices.

International guidelines are being developed to minimise mercury use in ASM and reduce environmental and occupat-ional hazards.

Provisions include: mercury emission and exposure controls; recycling and reusing mercury; reduction of mercury in tailings; prevention of combined uses of mercury and cyanide, constraints on where mercury is used (emphasising protecting village/residential areas and water sources); safe storage, disposal, clean-up and rehabilitation; guidelines to manage mercury in gold shops; and conducting environmental and health assessments.

2006APRILApril 2-6Symposium on the Application of Geophysics to Engineering and Environmental Problems (SAGEEP)Seattle, USEnvironmental and Engineering Geophysical Society, 1720 South Bellaire, Suite 110, Denver, CO 80222-4303, USTel: +1 303 5317517 Fax: + 1 303 8203844 E-mail: staff @eegs.org Visit: www.eegs.org/sageep

April 3-79th International Seminar on Paste and Thickened TailingsLimerick, IrelandTel: +44 113 3432377E-mail: [email protected]: www.paste06.com

April 19-21Mineral Economics and Management Society Annual ConferenceColorado, USIssue discussed will include reducing costs and emissions Tel: +1 303 2733321E-mail: [email protected]: www.minecon.com

MAYMay 19th International Symposium on Environmental Issues and Waste Management in Energy and Mineral Production (SWEMP)Athens, GreeceContact: Prof George Panagiotou, National Technical University of Athens, Department of Mining Engineering, GR-15780, Athens, GreeceTel: +30 210 7722198 Fax: +30 210 7722191E-mail: [email protected]: www.metal.ntua.gr/swemp2006

May 10-12Clean Coal 2006Vancouver, Canada‘What is the future of clean coal?’Contact: Doug SanbornTel: +1 207 781 9603E-mail: [email protected]: www.intertechusa.com

May 142006 Canadian Institute of Mining (CIM), Metallurgy and Petroleum Conference and ExhibitionVancouver, CanadaThe event will help individuals and industry create value with values by: creating and

demonstrating wealth and alleviating poverty; responsible practice; and environmental integrityContact: Jean-Marc Demers, CIM’s director of commercial operations. Tel: +1 514 9392710 E-mail: [email protected] Visit: www.cim.org

JUNEJune 28-30Second International Conference on Quantifi ed Eco-Effi ciency Analysis for SustainabilityEgmond aan Zee, The NetherlandsEsther Philips, CML, Leiden University, PO Box 9518, NL 2300 RA Leiden, The NetherlandsTel: +31 715277477E-mail: ee-conf@eco-effi ciency-conf.orgVisit: www.eco-effi ciency-conf.org

JULYJuly 2-6Australian Earth Sciences Convention 2006Melbourne, AustraliaVisit: www.earth2006.org.au

SEPTEMBERSeptember 13-15First International Seminar on Mine ClosurePerth, AustraliaVisit: www.mineclosure2006.org

Hot topic: mercury pollution

GMP team teaching miners in Mozambique

Simon Handelsman is senior policy adviser, Global Mercury Project; and Dr Marcello Veiga is chief technical adviser, Global Mercury Project, and is associate professor, Dept Mining Engineering, University of British Columbia. For more details about GMP, please visit: www.globalmercury.orgwww.globalmercury.orgwww.globalmercury.or

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