COAL ASIA MARCH 25 - APRIL 25, 2015 133

COMMENTARYBy George Barber

Marketing Partner Terra Energy & Resource Technologies Plc.

The Challenge of Modern Exploration

B efore moving onto the title subject, somehow or the other I have ended up writing articles for two extremely

enterprising and informative magazines that are produced in Indonesia, namely CoalAsia and OGE. As most of my articles will be focused around early exploration and new technology, there is the danger of some overlap month by month, although in reality the mineral business is different to the hydrocarbon business, although they are both involved in exploration beneath the surface of the earth. I am sure that there are people who do read both magazines, therefore, I do make an apology in advance, where one month you read CoalAsia and you think you have read this previously, you may well have, but it will have been written in a different format from the hydrocarbon article in OGE. Also to write two completely different articles each month is a drain on my brain cells (whatever I have left).

Onto the title subject:Exploration and mining companies

worldwide face the challenge of finding mineral deposits to support a global population expected to grow beyond 9 billion in 2050. Most of the shallow, easily accessible deposits close to existing infrastructure have been found. New reserves are likely to be found much deeper below the surface and in extreme or challenging environments. These reserves may well be smaller in size to what has been discovered previously.

It is fair to say that the capabilities of existing exploration tools and methods

are stretched to their limits, which means that new ways of exploration have to be developed. The cost of finding new discoveries is rising and the number of major new discoveries is decreasing. Despite mineral exploration expenditure reaching close to US $16 billion dollars in 2012, triple the level of the 1980s, discovery rates have continued to decline.

Geologically, Indonesia is a potential and relevant region for the formation of various energy and mineral resources. Exploration activities have been carried out since the 1800’s up to the present time, with a huge success rate in numerous areas. Among these various resources, oil, gas, coal, tin, nickel, copper, and gold have so far given an important contribution to the Indonesian economy.

When we say that the easy resources have been discovered, at the time of discovery most of them was not easy to discover and exploit. Today the majority of Indonesian territory has not been explored thoroughly, and therefore the chance to discover new economical energy

and mineral deposits are likely to be substantial. To do this, exploration should be carried out in a sustainable and non-invasive manner for all the reasons that we are all aware of.

In my opinion, Indonesia is a geologist’s dream; the volume of published material on the geology of the Indonesian Archipelago is overwhelming and has such diversity. The reasons for this include Indonesia’s unique position at the convergence of three major tectonic plates, making it a natural laboratory for the study of mountain building and active tectonic processes.

Indonesia is truly a wonderful and magical country that needs to be appreciated for what it is. With over one hundred active volcanoes and many more extinct ones, with frequent earthquakes, with basins that have more than 10 km of Tertiary sediments adjacent to outcrops of deep ocean floor sediments and mantle material, with Pleistocene coral reefs now uplifted a kilometer above sea level, etc., it is a spectacularly active area indeed. In addition, it is well endowed with natural

COAL ASIA MARCH 25 - APRIL 25, 2015134

resources such as oil and gas, coal, and a variety of economic minerals. Then there are the country’s natural beauty, the diversity of cultures and the abundance of fossil faunas and floras, which vary significantly throughout the archipelago. All this has attracted many of the world’s great geologists for more than 150 years and many new geological concepts were formulated in this region. Personally I only have admiration for the early explorers, the conditions that they endured and the accuracy of the information that they collected is totally astounding.

But having said that, a lot of the information available is outdated. The classic ‘The Geology of Indonesia’ by Van Bemmelen (1949) was comprehensive, but is now more than 60 years old. Many of its outcrop descriptions are still useful, but the tectonic concepts are out of date, and a wealth of new material has been gathered since, but as far as I can see from reading various articles on the geological history of Indonesia, the references have not been updated, or if they have, they have not been published.

We do need to remember that a lot of information available today is from these early explorers and geologists, which surely is not sufficient for a country that

wants to develop. Indonesia is a geology paradise, but modern geologists need help if resources are to be discovered. They also need help in achieving results at a faster rate than they can when utilizing traditional methods, going out into the wilderness, chopping down trees, in some cases not knowing where or indeed what they are looking for, using information that is outdated, along with some updated data acquired by air gravity and air magnetics to assist them in their quest is not the solution.

Therefore in a world of depletion, rising costs of exploration and market instability, modern or up to date technologies address some of the more difficult challenges of modern exploration, which enables a company, its clients, its investors and partners to identify and explore natural resource deposits accurately, cost effectively, and quickly.

New technology used in modern exploration

Some of the features of new technology used in modern exploration include:• It does not require invasive,

environmentally or socially damaging techniques

• It can be done on a remote basis (utilizing remote sensing data acquired via satellites, digital elevation data, topographic maps, etc.).

• It reduces exploration timing from years to months and reduces costs to a fraction of those posed by traditional methods.

• It enables governments to realize certain strategic goals in relation to the assessment of energy (oil, gas, geothermal) and mineral resource potential for areas of any size in a discrete fashion.

• It’s competitive advantage rests on the utilization and combination of proprietary, innovative and proven exploration technologies, not available to most explorers.

• By combining some “Old School” tools and some “New School” tools with different methods (up to 8) and unique data sets, all of which will reduce the inherent risks of traditional methods.

• Each method identifies anomalies if they are present. When anomalies from different methods coalesce within the same area for a specific mineral, the confidence rises. From this perspective, the process is simple. The more data and the more agreements that can be found will simply increase the confidence in the results.

• A comprehensive knowledge will lead to the maximization of the economic value of the mineral resources and lends the ability to a country or company to protect itself from unscrupulous exploitation.

The ChallengesExploration is a challenge in

more ways than one, there are many components to a project before production commences and a return of costs are made. Any company that

[ COMMENTARY ]

COAL ASIA MARCH 25 - APRIL 25, 2015 135

can save time and cut costs by carrying out less unproductive exploration has to profit in the long-term. This is the challenge of modern exploration, how to find resources that are and will increasingly become more difficult to find and produce, whilst at the same time decreasing the time frame, which of course reduces the cost of the overall project.

Companies have no choice, they have to find new ways, otherwise exploration will not progress along the path that it should. The aircraft industry, the shipping industry, the car industry are always looking at new ways to make the mode of transport more efficient, the components that they construct for the planes, ships and cars are made lighter materials to give more fuel efficiency and to cut the operating costs down whilst at the same time cramming more of us into or onto the transport. The exploration industry should be doing the same, but it appears that the exploration industry is working differently from other industries; they are spending more and coming up with less.

I know that all of us explorers like to go to different parts of the archipelago, we like to travel along the bumpy dirt tracks, get into the not so fast speed

boats and imagine ourselves as Tarzan or Jane of the Jungle, oh and by the way, complaining throughout the trip. The questions to the investor are: is this efficient, do we know what we were looking for, if we did, did we find it? Hopefully yes, but would the same exploration trip have been more efficient if there was something positive to justify the trip. The challenge of the modern day explorer is to explore something that you have more than a 70% change of being successful in and not a less than 20% chance.

Of course the moneymen will be happy to save money, but then again most bean counters do not understand anything outside of counting and saving money, no matter how much one tries to convince them. Therefore another challenge to exploration is to convince the “Bean Counters” that we have done everything possible to ensure that our long and expensive Tarzan/Jane of the Jungle trip is worth it.

In the writers view, the only way of doing this is to utilise modern day exploration methods that will give you something to go and look at instead of hoping that you will find something. After all, can a trip on the river into the jungle enable you to see beneath

the ground that you are standing on, in my experience it can not, although we do see traces of minerals in a river, we do see outcrops and we do see other tell-tale signs that may justify the cost for mobilizing costly seismic and maybe drilling equipment as well as the exploration team.

Would it not be far more effective to know in advance that there is something that will make the trip worth it, I know the answer to this. Do not get me wrong, I am not a Bean Counter, I love going on all of these jungle trips, especially the river trips, but I would prefer to do these trips knowing full well that I am going for something that is reasonably positive and in fact the trip is about confirming our next steps towards production. This is what a modern day field trip should be about, not looking for a needle in a haystack scenario.

Modern exploration combines the traditional methods, it has to combine the Tarzan /Jane of the Jungle trips, there is very little choice to this, but it is far better to do all of this whilst embracing modern exploration methods, unless of course the CEO of the company is happy to waste the shareholders money, unfortunately at this moment of time this is what is happening, although the CEO does not know this as he does not know how to meet the challenge of modern exploration.

Whilst we should admire the past explorers and we can imagine ourselves as Tarzan or Jane, we really should move with the times, many industries have, they have made our life’s more pleasant in most circumstances, although as we all know a river trip is far better than being sat in a modern day car stuck in the traffic of Jakarta going to our modern day aeroplane, although we may be more comfortable than we would be in the boat.