JANUARY 2013 • VOL 214 • NUMBER 1

FEATURES E&MJ’s Annual Survey of Global Mining Investment Last year’s survey questioned whether the long boom in mining investment was starting to weaken, or just experiencing a temporary market adjustment. This year’s verdict: the boom has peaked...... 28 Tools to Assist in Planning and Design As mining companies face rising costs and volatile commodity markets, making the right design decisions is a must. E&MJ looks at worrying capex trends, and some of the software available to help keep costs under control. ....34 Exploring the Dimensions of Digital Solutions in Mine Mapping Apart from advantages in speed of data collection and analysis provided by digital technology, perhaps its greatest benefit is this: even as mine projects become more complex, the tools needed to map them are getting easier to use ...... 40 Microwave-based Moisture Measurement of Bauxite Ore on Conveyor Belts Field-proven analyzers offer improved accuracy, a wide measurement range suitable for many applications, and dependable performance in harsh environments...... 44 Special Report: Mining in Democratic Republic of Congo A journey to Africa’s mineral heartland ...... 51 In addition to the 2013 Project Survey, this month Preparing for Brazilian Growth E&MJ publishes a GBR report on developments in the Long before the BRIC acronym became popular, Liebherr was helping Democratic Republic of Congo. The cover photo is a Brazil build ...... 80 night time shot of a heavy media separation plant at Tiger Resources’ Kipoi project, which is processing ore LEADING DEVELOPMENTS mined from the Katanga Copper Belt. Vale Budgets $16.3 Billion Capex for 2013 ...... 4 Teck Liable in Upper Columbia River Litigation ...... 5 Record Number of Explorers Expected for PDAC 2013 in March...... 5 DEPARTMENTS Freeport-McMoRan Acquiring Two Oil and Gas Companies ...... 6 Calendar ...... 26 AROUND THE WORLD Classified Advertisements...... 94 U.S. & Canada: Ring of Fire Forms Focus for Far Northern Ontario Development ..8 Equipment Gallery ...... 92 From the Editor ...... 2 Latin America: Antapaccay Dispatches First Copper Concentrates ...... 14 Markets ...... 96 Australia/Oceania: Nyrstar Pursuing Transformation of Port Pirie Smelter....16 Operating Strategies ...... 86 Africa: Mimosa Agrees to Zimbabwe Indigenization Plan ...... 18 People ...... 12 Processing Solutions ...... 90 20 Asia: OceanaGold Produces First Concentrate at Didipio ...... Suppliers Report ...... 88 Exploration Roundup: Tahoe Resources Extends Mineralization at Escobal ..22 This Month in Coal...... 24

Digital Mapping....40 Brazilian Growth....80 Suppliers Report....88 www.e-mj.com JANUARY 2013 • E&MJ 1 FROM THE EDITOR

ENGINEERING AND Successful Leaders Make MINING JOURNAL Smart Decisions www.mining-media.com Mining Media International The new year is upon us and many people are wondering Editorial Office 11555 Central Parkway, Suite 401 what to expect in 2013. All of the major mining companies Jacksonville, Florida 32224 U.S.A. embarked on rationalization programs that began in earnest Phone: +1.904.721.2925 during the middle of last year and those efforts will contin- Fax: +1.904.721.2930 ue this year. They sold off “non-core assets” and began to Editor-In-Chief—Steve Fiscor, [email protected] focus on the key projects in the pipeline that hold the most Managing Editor—Russ Carter, [email protected] Steve Fiscor/Editor-in-Chief promise for the long term. This month’s lead news story European Editor—Simon Walker, [email protected] about Vale’s capital investment program for 2013 is a Latin American Editor—Oscar Martinez, [email protected] prime example (See Leading Developments, p. 4). Talking about the company’s deci- South African Editor—Antonio Ruffini, [email protected] sion-making process, Murilo Ferreira, Vale’s CEO, explains the company will invest in Australian Editor—John Miller, [email protected] world class assets with long lives capable of creating value through the cycles. He also mentions project execution, capital management and a reduced cost structure. Associate Editor—Gina M. Tverdak-Slattery, [email protected] Preparing for a softer market, mining companies are fine tuning their rock facto- Graphic Designer—Tad Seabrook, [email protected] ries. They are making sure that existing mines and mills are running at optimum lev- els, usually with an eye toward scalability, should demand suddenly increase. They are Mining Media International also making sure the projects they have waiting in the wings are the cream of the crop. Corporate Office 8751 East Hampden, Suite B1 These are also times that make or break great engineers. Hasty decisions can Denver, Colorado 80231 U.S.A. hurt an engineering team’s image, but most of the time a decision to suspend or Phone: +1.303.283.0640 divest is made for the right reasons. A scrappy mining company will pick up those Fax: +1.303.283.0641 divested non-core assets, thinking they can quickly turn it into a revenue generator. President/Publisher—Peter Johnson, [email protected] If they succeed, the market will reward them, much to the major’s chagrin. Failure VP-Sales and Marketing—John Bold, [email protected] would only reinforce the original decision. Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, [email protected] Annually, the January edition of E&MJ carries the Project Survey (See p. 28), Western U.S. & Canada, Sales—Mary Lu Buse, [email protected] the most comprehensive list of mining projects, their status and their capital budg- Scandinavia, UK and European Sales Manager—Colm Barry, [email protected] et. The survey is compiled by the expert consultants at IntierraRMG (formerly the German Sales Manager—Gerd Strasmann, [email protected] Raw Materials Group) in Sweden. The 2013 Project Survey verifies that investments Rest of World, Sales—Peter Johnson, [email protected] in the mining sector grew by only 9% in 2012, compared to 20% in 2011. But, what may (or may not) surprise readers is the information related to the escalating Classified Advertising—Norm Rose, [email protected] costs for projects. For the last two years, the survey has mentioned how costs Classified Advertising—Tanna Holzer, [email protected] increase dramatically between the feasibility and construction phases. The average Ad Traffic Manager—Erica Freeman, [email protected] increase this year for gold projects was more than 50%. This edition of E&MJ also carries two articles describing how technology is being used to better understand mine design and planning (See Mine Design, p. 34, and Digital Mapping, p. 40). In the mine design article, Simon Walker elaborates more directly about recent cost overruns, while Russ Carter describes how today’s mining engineers are successfully incorporating new digital technologies into mine survey- ing, mapping and design. These two articles conjure a scenario of today’s mining Engineering & Mining Journal, Volume 214, Issue 1, (ISSN 0095-8948) is published month- engineers being able to visualize a project as a living body of work with more para- ly except January and July by Mining Media, Inc., 10 Sedgwick Drive, Englewood, Colorado meters related to development of the ore body, metal values and mining costs. 80113 (mining-media.com). Periodicals Postage paid at Englewood, CO, and additional mailing offices. Canada Post Publications Mail Agreement No. 40845540. Canada return Mining projects are large projects that pose unique challenges that can be diffi- address: Station A, PO Box 54, Windsor ON N9A 6J5, Email: [email protected]. cult to solve. When one looks back at what went wrong with project execution, a lack Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available on the World Wide Web at www.e-mj.com. of leadership is usually one of the main culprits. The leaders of successful engi- SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. neering teams have confidence in their group and make fewer changes along the Non-qualified persons may subscribe at the following rates: USA and Canada, 1 year, project path. With a limited number of projects, today’s mining engineers will have $82.00, 2 year, $139.00. Outside the USA and Canada, 1 year, $134.00, 2 year, $249.00 sur- face mail (1 year, $191.00, 2 year, $352.00 airmail delivery). For subscriber services or to to improve project management skills to excel in a more competitive environment. order single copies, write to E&MJ, 8751 East Hampden, Suite B1, Denver, CO 80231 USA; call +1.303.283.0640 (USA) or visit www.mining-media.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of select- ed archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For microform availability, contact ProQuest at 800-521- 0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ, P.O. Box 1337, Skokie, IL 60076 USA. REPRINTS: Mining Media Inc, 8751 East Hampden, Suite B1, Denver, CO 80231 USA Steve Fiscor, E&MJ Editor-in-Chief, phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com [email protected] PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com.

EXECUTIVE OFFICE: Mining Media, Inc., 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com

COPYRIGHT 2012: Engineering & Mining Journal, incorporating 2 E&MJ • JANUARY 2013 World Mining Equipment, World Mining and Mining Equipment International. ALL RIGHTS RESERVED.

NEWS-LEADING DEVELOPMENTS Vale Budgets $16.3 Billion Capex for 2013

geted at $611 million during 2013. The project has an estimated nominal capacity of 4.3 million mt/y of potash and is scheduled to start up during the second half of 2014. Vale’s 2013 R&D budget includes $382 million for mineral exploration; $465 million for conceptual, pre-feasibili- ty and feasibility studies; and $206 million for research into new processes, technolog- ical innovation and adaptation. The explo- ration program will continue to have a glob- al reach, with efforts in the Americas, Africa, Asia, and Australasia but within fewer countries than in the recent past. Iron ore and nickel, given Vale’s very large deposits, are the main priorities for its brownfield exploration, which accounts for 41% of its planned explo- ration expenditures. Greenfield explo- ration, with 59% of the budget, will focus on finding copper deposits. Vale Asset Write Downs: Vale reported on December 20, 2012, that it would rec- ognize a fourth-quarter impairment charge Almost half of Vale’s 2013 project execution budget will go into its ferrous minerals project pipeline, while brownfield exploration for iron ore and nickel will account for as much as 41% of its total exploration budget. (Photo courtesy of Vale) before tax of $4.2 billion against its Onça Puma ferronickel operations in Pará, Vale has budgeted $16.3 billion for capital bution network, including new ships, will Brazil, and its 22% stake in Norwegian expenditures during 2013, including also see significant spending. aluminum producer HYDRO ASA. $10.1 billion for project execution, $5.1 Vale’s integrated nickel smelting and At Onça Puma, problems with the two billion for sustaining existing operations, refining project at Long Harbour, New- furnaces brought ferronickel production to and $1.1 billion for research and develop- foundland, which is scheduled to start up a halt in June 2012. After analyzing the ment (R&D). The R&D expenditures in- during the second half of 2013, is budgeted problems, Vale decided to rebuild one of clude the budget for mineral exploration. for $1.216 billion in capital spending during the furnaces at an estimated cost of $188 Vale’s 2013 capex budget is down from the year. Total estimated capex for the project million in 2013 and plans to start it up in an estimated $17.5 billion spent in 2012 has increased to $4.25 billion from $3.6 bil- the fourth quarter of 2013. and $18 billion spent in 2011. The lion due to cost pressures stemming from a “Given this event and in face of the cur- prospects for only moderate expansion in tight market for labor and engineering servic- rent market environment for ferronickel, the global demand for minerals and metals es in Newfoundland and Labrador. The plant valuation of Onça Puma determined the need over the medium-term require a stricter dis- will produce 50,000 mt/y of finished nickel, to recognize an impairment charge before tax cipline in capital allocation and a stronger plus associated copper and cobalt products. of $2.848 billion. The book value of Onça focus on maximizing efficiency and mini- Vale has budgeted $171 million during Puma was $3.778 billion as of September mizing costs, the Vale statement said. 2013 for the reopening of the Totten nick- 30, 2012,” the Vale statement said. Vale CEO Murilo Ferreira said. “We are el mine in Sudbury, Canada, at an estimat- Regarding HYDRO, the downward vola- now more than ever strongly committed to ed nominal capacity of 8,200 mt/y of nick- tility of aluminum prices and the macroeco- investing only in world-class assets, with el in concentrates. Production is scheduled nomic uncertainties about the European long life, low cost, expandability, and high- to begin during the second half of 2012. economy reduced the market value of Vale’s quality output, capable of creating value A project to double capacity at Vale’s stake in the company to a level below the through the cycles.” Salobo copper mine in Marabá, Pará, Brazil, book value of its investment. Based on Ferrous minerals projects account for to 200,000 mt/y of copper in concentrates HYDRO share prices at September 30, $4.9 billion (48.4%) of Vale’s 2013 pro- is budgeted at $401 million during 2013. 2012, Vale recognized an impairment ject execution budget, with major expendi- Production from the expansion is scheduled charge before tax of $1.3 billion. tures going toward iron ore projects in the to begin during the first half of 2014. The two impairments will not have any Carajás region and in the state of Minas Vale’s Rio Colorado potash solution min- cash flow impact and will be treated as Gerais, Brazil. Vale’s global iron ore distri- ing project in Mendoza, Argentina, is bud- exceptional items.

4 E&MJ • JANUARY 2013 www.e-mj.com NEWS-LEADING DEVELOPMENTS

Teck Liable in Upper Record Number of Explorers Expected for PDAC 2013 in March Columbia River Litigation The annual Prospectors & Developers PDAC delegate, Gallinger said it has be- The U.S. Federal District Court for Eastern Association of Canada’s (PDAC) Con- come “a massive focal point for the junior Washington ruled in mid-December 2012 vention is the mineral industry’s most pop- exploration sector. that Teck Metals, Ltd. is liable under U.S. ular networking and educational event. The “We have expanded programming with environmental law for contaminating the convention’s sheer size is impressive. Held an impressive list of speakers for our tech- Columbia river with millions of tons of at the Metro Toronto Convention Center, it nical sessions, and innovative touches like waste discharged by the Trail, British attracted more than 30,000 delegates last our mobile convention guide,” said Columbia zinc-lead smelter during the year—a record number. No other annual Gallinger. “Our goal is to maintain the period from 1930 to 1995. The smelter is convention for mineral exploration and quality of the Technical Program and the located on the Columbia River 10 miles mining draws a crowd of this size. overall convention experience.” north of the U.S.-Canada border. “Early indicators show both Canadian The PDAC Convention is actually a con- The Trail smelter stopped discharging and international interest is strong again vention, trade show and investors granulated slag into the Columbia River in this year,” said PDAC President Glenn exchange in one. The convention includes 1995. Teck reports that metal loads in cur- Nolan. “Trade Show and Investor Exchange a technical program (presentations, short rent discharges from the facility are lower exhibits sold out early on and we’re seeing courses and workshops), a corporate social than natural metal loads carried by the many of our 2012 sponsors returning this responsibility (CSR) event series, an abo- river and that water quality in the Columbia year. 2013 is shaping up to be another riginal program, a student program and river at the international border meets or exciting year for the convention.” networking events. exceeds stringent regulatory levels in both Now in its 81st year, PDAC attracts The Technical Program features talks by the United States and Canada. investors, analysts, mining executives, industry experts that reflect the PDAC’s year- The Consolidated Mining and Smelting geologists, prospectors and international round advocacy work as the industry associ- Company of Canada, which changed its government delegations from all over the ation representing the mineral exploration name to Cominco in 1966, owned and globe. In 2012, 25% of the delegates were and development sector in Canada. The pro- operated the Trail smelter during the peri- from outside of Canada. The largest num- gram opens with the Commodities and od in question. Teck acquired a 100% ber of attendees in 2012 came from the Market Outlook session, and includes other interest in Cominco in 2001. In finding U.S., Australia, England, China and Peru. sessions such as Land Access Challenges Teck liable under the Comprehensive, “The convention has really hit its stride in and Solutions, the keynote session on Risk Environmental Response, Compensation, terms of its place in the global mineral indus- and Reward in Mining Exploration and and Liability Act (CERCLA, also known as try,” said Nolan. “In the early 1990s, PDAC Development, Building Aboriginal Capacity Superfund), the court ruled that for began to build an international reputation— for Economic Independence, Financing in a decades the smelter operators treated Lake and the convention went international. Since Volatile Market, Geophysics, and Ontario’s Roosevelt in Washington state as a free, then, it has come to be known as the global Ring of Fire: Unlocking Potential and convenient waste disposal facility. networking opportunity for the mineral explo- Creating Opportunity. The court issued a declaratory judg- ration and development industry.” PDAC 2013 is offering a record num- ment that Teck is liable under CERCLA for PDAC Executive Director, Ross Gallinger, ber of short courses to assist delegates response costs, the amount of which will who came on board in August 2011, expe- with their professional development goals. be determined in the subsequent phase of rienced it from the inside for the first time Courses will be offered on everything from the case. The subsequent hearing, with in 2012. Having been part of the mineral respect to claims for natural resource dam- exploration industry for years and a regular (Continued on p. 6) ages and costs, has not been scheduled and is expected to be deferred until a remedial investigation and feasibility study with respect to environmental conditions in the upper Columbia river is substantially complete. That study, being undertaken by Teck American Inc. (TAI) pursuant to a 2006 agreement with the U.S. Environ- mental Protection Agency, is currently expected to be completed in 2015. Responding to the court ruling, Teck issued a statement that said, “TAI contin- ues to work the with the U.S. Environ- mental Protection Agency, the state of Washington, local tribes, and others on studies in the upper Columbia river, which to date have generally shown that the water in the river system meets appli- cable water quality standards in both Canada and the United States, that the More then 30,000 attended the 2012 PDAC in Toronto. This yearÕs conference will be held March 3-6. www.e-mj.com JANUARY 2013 • E&MJ 5 NEWS-LEADING DEVELOPMENTS beaches are safe for recreational activi- the compensable value of any damage Freeport-McMoRan Acquiring ties, and the fish in the river system are will not be material.” Two Oil and Gas Companies as safe or safer to eat than fish in other However, the company said, there can be Freeport-McMoRan Copper & Gold Inc. water bodies in Washington state. TAI has no assurance that Teck or its affiliates will not (FCX), Plains Exploration & Production Co. commissioned a study by experts in natu- be faced with further liability. If remediation (PXP), and McMoRan Exploration Co. (MMR) ral resource damage assessment and on is required and damage to resources is found, announced December 5, 2012, the signing the basis of that study it estimates that the cost of remediation may be material. of definitive merger agreements under which FCX will acquire PXP for approximately $6.9 (PDAC 2013 - from p. 5) 12-year mine life (See September 2012 billion in cash and stock and MMR for E&MJ, p. 52). approximately $3.4 billion in cash, or $2.1 health and safety to communications to Daniel G. Wood is the recipient of this billion net of the 36% of the MMR interests geophysics. year’s Thayer Lindsley Award for interna- currently owned by FCX and PXP. The trade show features 415 compa- tional mineral discoveries. Wood retired FCX is the world’s largest publicly traded nies, organizations and governments pro- from mineral exploration in late 2008 after copper producer, with assets that include the moting technology, products, services and 24 years with BHP and almost 18 years world-class Grasberg minerals district in mining jurisdictions worldwide. The oppor- with Newcrest Mining Ltd., leading teams Indonesia, the large-scale Morenci minerals tunity for convention delegates to learn exploring for a range of mineral resources district in North America, the Cerro Verde and about the global mineral sector while walk- in Australia, SE Asia/SW Pacific and the El Abra operations in South America, the ing the aisles of the trade show floor is Americas. Their efforts produced coal, high-potential Tenke Fungurume minerals phenomenal. The trade show receptions on gold, gold-copper and copper-molybdenum district in the Democratic Republic of Congo, Monday and Tuesday afternoon give atten- discoveries in Australia, Indonesia and and a leading global molybdenum business. dees the chance to network over a glass of Peru, including the large Cadia gold-cop- “The addition of a high-quality, U.S.- wine or beer on the show floor. per deposits in NSW. focused oil and gas resource base is There is no shortage of social events at Ronald P. Gagel is the recipient of this expected to provide exposure to energy the convention, including the Awards year’s Distinguished Service Award. Gagel markets with positive fundamentals, strong Evening, Mining Night and the Gala. Other is receiving the award for his outstanding margins and cash flows, exploration lever- ticketed events include a series of three contribution to the mineral industry in the age, and financially attractive long-term luncheons running Monday to Wednesday field of finance, and for his contributions investment opportunities,” FCX said in that feature popular speakers such as the to the PDAC. He was part of the team that announcing the transactions. Honorable Perrin Beatty, president and successfully lobbied the federal govern- On a pro forma basis for 2013, mining is CEO of the Canadian Chamber of ment to implement the Mineral Exploration expected to generate approximately 74% Commerce, who will be speaking at the Tax Credit, and is the chair of the Mining and oil and gas 26% of the combined com- Innovation Luncheon. Industry Task Force on International pany’s estimated EBITDA, with 48% of com- Recipients of the 2013 awards will be Financial Reporting Standards. bined EBITDA coming from U.S. operations. honored at the PDAC’s awards evening on Cameco Corp. is the recipient of this PXP’s major assets include established March 4, 2013, at the Fairmont Royal year’s Environmental and Social Respon- oil production facilities in California, a grow- York Hotel. sibility Award. Cameco is receiving the ing production profile in the onshore Eagle Pretium Resources is the recipient of award for its outstanding accomplishments Ford trend in Texas, significant production this year’s Bill Dennis Award for a in establishing good community relations to facilities and growth potential in the Gulf of Canadian mineral discovery or prospecting support its exploration and mining opera- Mexico, and large onshore resources in the success. Pretium is receiving the award for tions. Cameco’s five-pillar CSR model is Haynesville natural gas trend in Louisiana. advancing the Brucejack Property’s Valley designed to ensure local community sup- MMR is engaged in the exploration, of the Kings, which was first discovered in port and proactive environmental steward- development, and production of natural 2009, into a world-class, high-grade gold ship, and has led to recognition as an gas and oil in the shallow waters of the Gulf deposit. Since 2011, Pretium’s successful industry leader in CSR by Aboriginal asso- of Mexico shelf and onshore in the Gulf exploration program has seen the high- ciations and industry rankings. Coast area. grade Indicated Mineral Resource Base for Windigo Catering LP is the winner of The corporate headquarters of the com- the Valley of the Kings grow to the current this year’s Skookum Jim Award for bined company will be located in Phoenix, 8.5 million oz of gold. Aboriginal achievement in the mineral Arizona, and the combined company will New Gold Inc. is the recipient of this industry. Located in northwestern Ontario, maintain offices in Houston, Texas, and year’s Viola R. MacMillan Award for com- the company is solely owned by Windigo New Orleans, Louisiana, to support its oil pany or mine development. New Gold is First Nations and boasts an 83% First and gas operations and existing adminis- receiving the award for demonstrating Nations employment rate. Windigo special- trative functions. leadership in management and excellence izes in providing catering services to indus- The investment community responded in best practices in bringing the New Afton try, including remote camps, and is cur- negatively to the announcement of the FCX mine to production. Located in Kamloops, rently providing camp management, cater- transactions, and in the immediate after- B.C., New Afton is a large underground ing, housekeeping, laundry and light main- math of the announcement, FCX shares copper-gold deposit that is expected to tenance services to Goldcorp’s Mussel- sold off from above $38/share to under produce, on average, 85,000 oz of gold white mine at its remote fly-in camp on $31/share, before recovering to around and 75 million lb of copper per year over a Opapimiskan Lake. $33.50/share on December 21.

6 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - U.S. & CANADA Ring of Fire Forms Focus for Far Northern Ontario Development

“A new frontier area” is how Dr. Christine for diamonds; exploration that resulted in one facet of the overall infrastructure pack- Kaszycki, assistant deputy minister at the the development of the region’s only cur- age that will have to be put in place. provincial Ministry of Northern Develop- rent producer: Victor, 150 km to the east. Five First Nations communities stand to ment and Mines’ Ring of Fire Secretariat, Today, some 23 companies have ground be most affected by any mine develop- described the development potential in far holdings in the area, with current prospects ment, with others likely to be impacted by northern Ontario. Speaking to an interna- including eight for copper and zinc, five for transport route developments. On the pos- tional press gathering in Toronto in late chromite, and one each for vanadium and itive side, of course, will be vastly improved 2012, Dr. Kaszycki went on to cite the new nickel-copper. In addition, KWG Resources access to facilities such as health care, Ring of Fire prospects as being “one of the has staked out claims along a potential plus the potential for extending the existing most significant developments in Ontario line-of-rail from the existing transcontinen- provincial power grid to service communi- for decades,” providing the opportunity to tal railway near Geraldton, northward for ties that today rely on diesel generation. create a wholly new mining center— over 300 km to the Ring of Fire. Plans are already in hand for a C$1.1 bil- together with its infrastructure—within this As Dr. Kaszycki explained, infrastruc- lion grid expansion further west, to connect huge area in the north of the province. ture development will be critical to bringing communities as far north as Goldcorp’s Already, two projects are at EIA and fea- any mines on stream. At the moment, she Musselwhite mine, with the Wawatay News sibility-study stage: Cliffs Natural Re- said, Noront and Cliffs are looking at dif- reporting recently that the First Nations- sources’ Black Thor chromite property and ferent routings for all-weather road haulage owned company, Wataynikaneyap Power, is Noront Resources’ Eagle’s Nest, which is to supply the area and take products out to evaluating further expansions from this to being evaluated as a new nickel-copper a railhead, with Noront’s initial choice run- include the Red Lake and Ring of Fire producer. However, these are by far from ning some 450 km west and then south, camps at some stage in the future. being the only discoveries within the dis- while Cliffs’ preferred line runs 320 km Thus far, Cliffs has committed to estab- trict, where De Beers first found copper- due south. However, other factors are also lishing a ferrochrome smelter at Capreol, zinc mineralization during its exploration at play here, and transport links are just north of Sudbury, to handle the 2.2 million mt/y of chromite concentrates it expects even- tually to produce from its Ring of Fire proper- ties. Prefeasibility studies have indicated capex of US$3.3 billion, including US$1.8 billion for the smelter. As its side of the deal, the Ontario provincial government has agreed to invest in transport infrastructure, as well as a suite of commitments to the First Nations peoples, including regional environmental monitoring, infrastructure planning, social support and resource revenue sharing with directly impacted communities. Meanwhile, Noront’s recently complet- ed studies on Eagle’s Nest has indicated capex of C$609 million for an under- ground operation producing 150,000 mt/y of nickel-copper concentrates. As the keynote speaker at the meeting, Deputy Minister George Ross of the Ontario Ministry of Northern Development and Mines stated that the province is one of the world’s premier exploration destinations, with over C$1 billion spent in 2011. Recent amendments to the provincial min- ing legislation have produced one of the most competitive tax and fiscal systems anywhere in the world, he said, with tax concessions for new operations in remote locations. Consultation with First Nations groups is required for proposed develop- ments, he added, while environmental

8 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - U.S. & CANADA standards are high. “It takes more than of the Mt. Hope mining and processing Stornoway released the results of a feasi- good geology to promote sustainable devel- facilities and also granted the rights-of-way bility study that highlighted the potential of opment in mining,” he commented. for a 230-kV power transmission line. the project to become a significant pro- The value of Ontario’s mineral production The NDEP reclamation permit was ducer of high-value rough diamonds over a reached some C$10.7 billion last year, with issued on the basis of a site-specific appli- long mine life. mining and exploration providing more that cation detailing the reclamation methods NI 43-101 compliant probable mineral 27,000 direct jobs and another 50,000 to be used to return the land to safe and reserves stand at 18 million carats, with a indirect jobs in the province. More than 600 stable conditions and a productive post- further 17.5 million carats classified as exploration projects are currently active, mining land use. The permit also approved inferred and 23.5 million to 48.5 million mainly driven by the gold price, while the the reclamation cost estimate of approxi- carats classified as non-resource exploration current population of 42 mines is scheduled mately $73 million and established bond- upside. All kimberlites remain open at depth. to increase by at least a further eight over the ing requirements based on this estimate. Pre-production capital cost is estimated next decade. Three have opened this year The water pollution control permit was at C$802 million, with a life-of-mine operat- alone, with overall capital spending topping issued on the basis of a site-specific permit ing cost of C$54.71/mt, giving a 68% oper- C$3.8 billion during 2012. Add to that the application that demonstrated that the pro- ating margin over an initial 11-year mine life. C$5.6 billion annual value of Ontario’s mine posed facility will meet Nevada regulations supply and service sector, and mining’s role regarding design criteria for containment of Positive Feasibility Study within the provincial economy is clear to see. process fluids. The permit will also approve for Milestone Project the operational and closure plans for the Western Potash Corp. has received a posi- General Moly Moving Mt. Hope Mt. Hope mine and will establish monitor- tive feasibility study from AMEC Americas Toward Construction Start ing requirements. Ltd. for its 100%-owned Milestone primary General Moly announced on December Mt. Hope is a large-scale, high-grade and secondary potash solution mining pro- 18, 2012, that the U.S. Bureau of Land molybdenum project located 23 mi north- ject located about 30 km southeast of Management had accepted the company’s west of Eureka, Nevada. The project has Regina, Saskatchewan. The study confirms reclamation bonding for the Mt. Hope 1.3 billion lb of molybdenum in proven that the property has 137 million mt of molybdenum project in Eureka county and probable reserves and an expected recoverable KCL in proven and probable Nevada and granted authorization to pro- mine life of more than 40 years. Over the reserves and describes a 40-year mining ceed with surface-disturbing activities. first five years of operations, the project is project having an ultimate production rate Earlier in the month, General Moly expected to produce approximately 40 mil- of 2.8 million mt/y of KCl at a product announced its 80%-owned subsidiary lion lb/y of molybdenum in concentrate. specification of 98.1% KCl. Eureka Moly, LLC had received $100 mil- The Milestone feasibility study includes lion in contributory payments from its 20% Stornoway Receives Renard all facilities required to operate a potash joint venture partner POS-Minerals Corp. Certificate of Authorization solution mine, including cavern and wellfield Eureka Moly is the operating company that Stornoway Diamond Corp. announced in layout; a two-train, multiple effect evaporiza- is developing the Mt. Hope project. POS- early December 2012 that it has received tion-crystallization plant; a dry processing Minerals is a subsidiary of Korean steel the global Certificate of Authorization plant; product storage; load out; and all producer POSCO. for its 100%-owned Renard diamond pro- other necessary site infrastructure. Power, General Moly CEO Bruce D. Hansen ject from the Québec Ministère du natural gas, water and existing rail connec- said, “We continue to target spring 2013 Développement Durable, de l’Environne- tions are readily available near the project. for receipt of China Development Bank ment, de la Faune et des Parcs (MDDEFP). Initial capital to develop the Milestone funding. This coincides with the terrain at The certificate represents the principal reg- project is estimated at C$2.91 billion. Mt. Hope being adequately thawed to initi- ulatory approval required to begin mine Operating costs are estimated at ate heavy construction. In the weeks construction and was issued following more C$62.28/mt at full production capacity. ahead, we will start light construction activ- than two years of formal environmental The study assumes a 3.5-year con- ities better suited to the winter, including study, community engagement, and public struction period beginning in 2013, sub- early well-field development, clearing and consultation under the terms of the James ject to financing and permitting approval. grubbing, and the continuation of our cul- Bay and Northern Québec Agreement. Mining would start in 2016 and ramp up to tural clearance efforts as we prepare for Stornoway President and CEO Matt design capacity by 2022. heavy construction in the spring.” Manson commented, “The MDDEFP glob- Western Potash President and CEO The Mt. Hope project completed the per- al Certificate of Authorization is the most Patricio Varas commented, “Our project is in mitting process required for construction in important element of the permitting an enviable, low-risk geopolitical and regula- November 2012 when the U.S. Bureau of process for mining projects in Québec. As tory jurisdiction, which is a key advantage Land Management (USBM) issued the of today, we are able to say that the princi- for developers who look for long-term invest- Record of Decision (ROD) authorizing devel- pal regulatory hurdle for the Renard dia- ment predictability. The lower capital inten- opment of the project and the State of mond project is behind us.” sity of the project combined with the plant’s Nevada Division of Environmental Pro- The Renard diamond project is located efficient operations and high throughput tection (NDEP) issued the project’s recla- approximately 250 km north of the Cree produce a project with attractive rates of mation and water pollution control permits. community of Mistissini and 350 km north return and significant free cash flow.” The USBM’s ROD approved the Plan of of Chibougamau in the James Bay region of Operations for construction and operation north-central Québec. In November 2011, (Continued on p. 26)

10 E&MJ • JANUARY 2013 www.e-mj.com

NEWS - PEOPLE IN THE NEWS

Newmont Mining Corp. announced President and COO Centaurus Metals has appointed John Westdorp CFO. Gary Goldberg will become president and CEO, and join China Shen Zhou Mining & Resources, Inc. has appointed Hai Hu CFO. the board of directors March 1, 2013. He will succeed Richard O’Brien who will step down as CEO and retire Rubicon Minerals Corp. has appointed Mike Lalonde pres- from the board at that time. ident and CEO. David Adamson will resign his position as Xstrata plc announced that CFO Trevor Reid has decid- CEO and assume the position of non-executive chairman. Gary Goldberg ed not to take the position of CFO of Glencore Xstrata plc Fortune Minerals Ltd. has appointed Mike Romaniuk upon completion of the merger with Glencore International plc. He has agreed vice president of operations. to act as consultant to the combined group for a period of up to six months Great Basin Gold Ltd. has appointed Ray Dombrowski following completion of the merger. Mike Lalonde CEO and Peter Gibson CFO. Lou van Vuuren has Teck Resources Ltd. has appointed Dean Winsor vice resigned as interim-CEO and director of the company, but will assist with the president of human resources. transition on a consulting basis. Alamos Gold Inc. has appointed Jo Mira Clodman vice Mindoro Resources Ltd. has appointed Tony Climie CEO. president of investor relations. Tetra Tech, Inc. has appointed John M. Young vice pres- Centerra Gold Inc. announced that Ronald H. ident of mine closure. Colquhoun, vice president and COO, will retire in Jo Mira Clodman February 2013. Gordon D. Reid, vice president of opera- Quartz Mountain Resources Ltd. has appointed Scott tions, has been promoted to vice president and COO. Also, retiring from the Cousens to the board of directors. He has also been board of directors is Anthony J. Webb. The board has appointed Ian Atkinson, appointed chairman of the board, replacing Robert president and CEO, to fill this vacancy. Dickinson who is stepping down as chairman, but will John M. Young The Nickel Institute announced that Dr. Peter Cutler, remain a director. director of promotion and market development, has retired. Molycorp, Inc. has appointed Constantine Karayannopoulos interim presi- Colossus Minerals Inc. announced the following man- dent and CEO. He succeeds Mark A. Smith, who has left the company. agement and board changes: David Anthony has been Jamie Bradford, lead logistics manager at Sinclair appointed president and COO; Luís Albano Tondo has Knight Merz, has been awarded the Professional of the been appointed vice president of operations and country Year award at the Chartered Institute of Logistics and Dr. Peter Cutler manager, Brazil; and John S.M. Turner and David Transport Annual Transport and Logistics Industry Garofalo have been appointed to the board of directors. Excellence Awards. The award recognizes Bradford’s Aurcana Corp. recently announced that Dr. Sadek El Alfy has been appoint- innovation in identifying the potential to improve strate- ed vice president of operations; Ted Apodaca has been appointed general gic supply chain management through collaboration to Jamie Bradford manager for the Shafter mine; Sandy Hunter has been appointed corporate the benefit of the wider industry. The initiative revolves secretary; and Catalin Chiloflischi has been promoted to corporate commu- around potential benefits from an integrated approach to supply chain man- nications director. agement in collaboration by several key players in Western Australian logistics. Ivernia Inc. announced that current President and CEO The National Mining Association has appointed Nancy Gravatt senior vice Alan De’ath will be retiring and stepping down from the president of communications. She replaces Carol Raulston, who will remain board of directors. Wayne Richardson, a current mem- with the NMA until May 15, when she plans to retire. ber of the board of directors, has been appointed presi- dent and CEO. Mintec announced that Abdullah Arik recently passed away. He joined the company in 1982. In the late 1980s Toro Energy Ltd. announced that Managing Director Greg and 1990s, he collaborated with Andre Journel and Wayne Richardson Hall will resign in February 2013. Dr. Vanessa Guthrie, Danie Krige, pioneers in the field of geotstatistics. currently executive general manager-Wiluna project, will Earlier this year, he accepted a bronze commemorative assume the role of managing director. Hall will remain statue for his three decades of service to Mintec. on the Toro Energy board as a non-executive director. Royal Gold, Inc. announced that Vice President and Brigus Gold Corp. announced that Daniel Racine has Abdullah Arik Corporate Secretary Karen Gross will be retiring. been promoted to president and COO. Estrella Gold Corp. has appointed Mark T. Brown has Volga Resources Group has appointed Yury Tyamushkin CEO of Sakhatrans LLC. been appointed interim president and CEO. Keith South Boulder Mines Ltd. has appointed Paul Donaldson COO. Daniel Racine Laskowski has stepped down from his positions as director, president and CEO to accept an appointment with the International Sunward Resources Ltd. has appointed Gillyeard (Gil) Leathley senior advis- Finance Corp. er to the CEO. McEwen Mining Inc. has appointed Fernando Aguilar Jørgen Huno Rasmussen, Group CEO of FLSmidth & Co. operations manager (Mexico); Luke Willis director of A/S, will retire in 2013. Former Sandvik Construction resource modeling; and Nigel Fung director of mine President Thomas Schulz has been appointed Group planning. CEO. MMC Norilsk Nickel has appointed Vladimir Potanin Leica Geosystems Mining has appointed Dave Goddard general director. Vladimir Strzhalkovsky, who held this portfolio manager for the Leica J3autonomous Vladimir Potanin position since August 2008, has resigned. Dave Goddard (Intelligent Machine Systems) product portfolio.

12 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - LATIN AMERICA Antapaccay Dispatches First Copper Concentrates

of-mine leach pads. Copper cathodes are produced using the existing Lomas Bayas SX-EW plant. Anglo American Clears Final Hurdle for Minas-Rio Anglo American reported on December 21, 2012, that it had secured the removal of the third and final injunction that had been impeding construction activities at its Minas-Rio iron ore project in Brazil, allow- ing construction to proceed on the 90-km electricity transmission line that will pro- vide power for the project. Two other injunctions were removed in September, enabling construction of the primary crush- er and conveyor system and pre-stripping work to resume at the mine site and resolv- ing land access issues for the route of the 525-km slurry pipeline that will deliver ore Loading concentrate at Antapaccay. (Photo courtesy of Xstrata Copper) to the Port of Açu in Rio de Janeiro state. The Minas-Rio project is targeting pro- Xstrata Copper’s new Antapaccay copper The Antapaccay deposit has recently duction of 26.5 million mt/y of iron ore pel- mine in southern Peru began production of been expanded by 30% to an estimated let feed. Construction progress has remained commercial-grade copper concentrates at total mineral resource of more than 1 billion on schedule for elements of the project that the beginning of November 2012 and mt at a grade of 0.49% copper using a cut- were not affected by legal or land access delivered its first shipment to Matarani off grade of 0.15% copper, including gold constraints. Anglo American currently antic- Port for delivery to customers worldwide and silver byproducts. The mineral resource ipates that first ore will be delivered to port later in the month. Plant commissioning contains 5 million mt of copper metal. during the second half of 2014, the target was ongoing as Antapaccay progressively The Tintaya geological district also date having been pushed back from a previ- ramps up to its nameplate processing hosts the Coroccohuayco deposit, with a ous estimate of the second half of 2013. capacity of 70,000 mt/d in the first half of current mineral resource of 324 million mt In a mid-November 2012 project up- 2013. The mine will produce an average of at a grade of 0.93% copper, and a number date, Anglo American reported that current 160,000 mt/y of copper in concentrate, of additional exploration targets. indications are that capital expenditures for plus gold and silver byproducts, in its ini- Xstrata Copper Chief Executive Charlie the Minas-Rio project are unlikely to be less tial years of production. Sartain said, “I am delighted to announce than the $8-billion upper end of the range of Antapaccay operations include a new that we commenced production at our major analysts’ expectations. The previous esti- mine and state-of-the-art concentrator. Antapaccay project on schedule and in line mate for the project was $5.8 billion. Mine life is projected at more than 20 with the original budget of $1.5 billion.” Anglo American is carrying out a years. The project is located at an elevation Construction at Lomas Bayas: On detailed cost review to assess the impact of of 4,100 m above sea level in the Yauri dis- December 21, 2012, Xstrata Copper report- already announced delays and the other trict of Espinar province in southern Peru’s ed completion of construction and start of disruptive challenges faced by the project, Cusco region, approximately 10 km from commissioning of the $300-million Lomas which include high cost inflation across Xstrata Copper’s Tintaya open-pit mine. II project at its Lomas Bayas operations in the construction industry in Brazil. The Mining activities at Tintaya are winding northern Chile. The project will extend mine review includes an independent external down, and Antapaccay will benefit from life at Lomas Bayas by 16 years, until at assessment commissioned by the Anglo Tintaya’s existing administrative and least 2028, at existing production levels of American board. logistics infrastructure and experienced 75,000 mt/y of copper cathodes. Anglo American will provide further workforce. The Antapaccay mine will The Lomas II project involved develop- detailed information in relation to Minas- employ a permanent workforce of around ment of the Fortuna de Cobre open-pit, Rio when the review has been completed 1,400 people, with the majority of workers located 3 km from the operation’s original and any remaining challenges affecting the transferring from Tintaya as it closes, mine and infrastructure, and construction project timetable have been resolved. and will create further opportunities for of a new primary crusher, a new conveyor local employment. transport system, and new heap and run- (Continued on p. 27)

14 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - AUSTRALIA/OCEANIA Nyrstar Pursuing Transformation of Port Pirie Smelter Dugald River Project Gets Development Go-ahead The board of directors of MMG Ltd. has endorsed the development and construc- tion of the Dugald River zinc, lead and sil- ver mine 65 km northwest of Cloncurry, Queensland, subject to final financing arrangements. Interim funding has been approved to carry the project through early 2013, at which time full project financing is expected to be concluded. The MMG board also gave the com- pany or its subsidiaries approval to enter into major contracts for gas supply, power genera- tion, and rail haulage, to advance the project. Expenditures at Dugald River through mid-December totaled A$293 million, with an estimated A$1.2 billion in additional funding required, excluding working capi- Owner Nyrstar will move ahead on plans to transform the Port Pirie primary lead smelter into a poly-metallic pro- cessing plant capable of handling a wide range of feed materials tal, to take the project to first shipment of concentrate. Nyrstar announced in early December case, including detailed engineering stud- Dugald River is located about 235 km 2012 that it has reached an agreement-in- ies and final project documentation. southeast of MMG’s Century zinc-lead-sil- principle with the Australian federal gov- Nyrstar anticipates that a decision to pro- ver mine, which currently produces about ernment and the government of South ceed will be made in early 2014, with pro- 500,000 mt/y of zinc in concentrate. Australia with respect to funding for a pro- ject commissioning currently planned for Century mine life is currently expected to ject to transform the company’s Port Pirie, early 2016. end in 2016. South Australia primary lead smelter into Capital investment to develop the Port Dugald River will process an average of 2 an advanced poly-metallic processing and Pirie transformation project is estimated at million mt/y of ore to produce 200,000 to recovery center capable of processing a A$350 million, which would include A$150 220,000 mt/y of zinc in concentrate, 27,000 wider range of high-margin metal-bearing million via a structured investment by third- to 30,000 mt/y of lead in concentrate, and feed materials. These feeds would include party investors guaranteed by the federal 0.9 million oz/y of silver in concentrate. internal residues from Nyrstar’s global net- government; A$100 million via forward sale The project will be developed as an work of zinc smelters as well as external of some of the incremental free metal units underground mine accessed by two waste streams containing precious and to be produced at Port Pirie as a conse- declines. Run-of-mine ore will be hauled to other non-ferrous metals. quence of the transformation; and A$100 the surface for treatment through an on- Nyrstar had previously reported in July million in direct investment from Nyrstar. site concentrator. 2012 that it was in the early stages of Nyrstar expects the project to deliver Zinc and lead concentrate will be trans- investigating the technical and commercial returns that meet or exceed its investment ported by road to Cloncurry. A rail load-out merits of such redevelopment at Port Pirie criteria for mining acquisitions and compa- facility will be constructed at Cloncurry, (See E&MJ, August 2012, p.18) rable to margins generated in the from which concentrate will be transported Key elements of the Port Pirie transfor- advanced-materials processing sector. via rail to Townsville, Queensland, where it mation project now include replacing the Independent of the transformation pro- will be shipped or sold to local smelters. existing sinter plant with an oxygen- ject, Nyrstar will also investigate the techno- The Dugald River project is scheduled enriched bath smelting furnace, coupled to logical and financial feasibility of a series of for commissioning in 2015, with first ore an electricity cogeneration facility and a small, incremental investments to capture feed expected in the third quarter of that new sulphuric acid plant. The project additional metal streams by installing addi- year. Based on MMG’s current estimates, would be completed with only limited dis- tional metallurgical circuits. Metals under first concentrate is expected to be shipped ruption to existing operations and is consideration for such recovery include sele- in the fourth quarter of 2015. expected to deliver a significantly improved nium, platinum, palladium, rhodium, anti- The Dugald River project has a resource environmental footprint through reduced mony, germanium, indium and gallium. of 53 million mt, grading 12.5% zinc, airborne metal and dust emissions. These potential investments would be 1.9% lead, and 36 g/mt silver. The Port Pirie transformation project is driven by specific market opportunities and subject to completion of a final investment would be assessed on a case-by-case basis. (Continued on p. 27)

16 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - AFRICA Mimosa Agrees to Zimbabwe Indigenization Plan

Aquarius Platinum announced in mid- The 51% indigenization interest will be “A particularly pleasing aspect of the December 2012 that Mimosa Investment held 10% by the Zvishavane Community plan is that it includes an employee share Holdings, which it holds jointly in a 50:50 Share Ownership Trust, Zvishavane being ownership trust as well as a community partnership with Impala Platinum, had the community in which the Mimosa trust, so as to ensure all stakeholders ben- agreed to sell a 51% interest in Mimosa to mine is located; 10% by an employee efit from the continued operation of indigenous Zimbabwean parties for $550 share ownership trust to be established Mimosa. Mimosa’s relationships with the million. Mimosa’s primary asset is the for the benefit of all permanent indige- government of Zimbabwe, its employees Mimosa platinum mine on the southern nous employees; and 31% by the National and communities have been fundamental portion of the Great Dyke in Zimbabwe. Indigenization & Economic Empower- to its success in the past and will remain Production totals about 210,000 oz/y of ment Fund. important in the future.” platinum group metals. Assuming receipt of regulatory The sale price was based on an agreed approvals, the transaction is expected to Rio Tinto and Anglo American fair market value for Mimosa Holdings of close by the end of March 2013. Selling Palabora Interests $1.078 billion. Mimosa Investments will Jean Nel, CEO of Aquarius, said, Rio Tinto and Anglo American announced provide a vendor loan funding mechanism “Although the negotiations have taken on December 11, 2012, agreements to sell to facilitate the transaction, which has a some time, the final plan represents a sig- their interests in the Palabora Mining Co. term of 10 years. The loan will bear interest nificant milestone for Aquarius and in South Africa to a consortium of South at a rate of 9% annually and will be settled Mimosa as we work towards full compli- African and Chinese entities led by Hebei through the waiver of the right to receive ance with the law and regulations in Iron & Steel and the Industrial Develop- 90% of dividends due to the indigenous Zimbabwe. The indigenization plan, once ment Corp. of South Africa (IDC). entities in favor of Mimosa Investments. implemented, will offer Mimosa security Palabora operates a large block cave Any loan balance outstanding at the end of of tenure and is a true reflection of the copper mine and smelter complex employ- the 10-year period will be payable in cash. worth of our investment in Mimosa ing 2,200 people in Limpopo province, Mimosa Investments will continue to Investments, a valuable asset and one of South Africa. The company produces about provide management and technical servic- the lowest-cost producers in the PGM sec- 80,000 mt/y of refined copper, supplying es for the mine. tor globally. most of South Africa’s copper needs and exporting the balance. The refinery pro- duces continuous cast rod for the South African market and cathodes for export. Byproduct metals and minerals include zir- conium chemicals, magnetite, and nickel sulphate, as well as small quantities of gold, silver, and platinum. Rio Tinto will sell its 57.7% effective interest in Palabora for $373 million. Anglo American will sell its 16.8% effec- tive interest for ZAR893 million (about $103 million). Guy Elliott, CFO of Rio Tinto, said, “Palabora is a good business but is no longer a natural fit within Rio Tinto’s port- folio. Selling our stake reflects Rio Tinto’s policy of continually reviewing our portfolio to generate best value for shareholders.” The purchasing consortium includes Hebei (35%), a leading international steel producer owned by the Chinese govern- ment; General Nice Development Ltd. (25%), a privately-owned Chinese trading company; Tewoo Group (20%), a major diversified group wholly-owned by the Chinese government; and IDC (20%), a The Mimosa platinum operation in Zimbabwe produces about 210,000 oz/y. The two equal partners in the Mimosa development finance institution wholly- enterprise recently agreed to sell a 51% interest in it to a Zimbabwean indigenous group. owned by the South African government.

18 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - ASIA OceanaGold Produces First Concentrate at Didipio

enced a number of challenges since we submitted our mine project feasibility study. These have included restrictions on field activities resulting from security issues in the project area; the need to reconsider our preferred power supply options for the project; the on-going uncertainty created by a provincial ordinance [banning open-pit mining] that is in conflict with national law; and the denial of the Mine Environmental Compliance Certificate by the Philippine Department of Environment and Natural Resources, which is currently under appeal to the Office of the President. “Given strong local community support, if local government endorsement and final approvals from the national government are forthcoming, then subject to an invest- ment decision by Sagittarius shareholders, Copper-gold ore is conveyed to the mill at OceanaGold’s Didipio project in the Philippines. The facility produced first concentrate in December 2012. construction could potentially commence in 2015, enabling commercial production OceanaGold Corp. announced on Decem- The open-pit and underground mines will in 2019.” ber 18, 2012, production of the first cop- run concurrently during the last seven The Tampakan project is situated on the per-gold concentrate at its Didipio pro- years of operations. boundaries of four provinces: South ject on Luzon island in the Philippines. The open-pit mine is scheduled to deliv- Cotabato, Sarangani, Sultan Kudarat, and Commissioning was ongoing and continued er ore to the mill of sufficient grade to Davao del Sur. It is based on one of the to meet expectations. Processing plant achieve production of 200,000 gold equiv- largest undeveloped copper-gold deposits in construction activities were complete, and alent oz/y until the underground mine starts. the Southeast Asia-Western Pacific region. construction of the remaining infrastruc- Low-grade ore stockpiled during open-pit Resources total 2.94 billion mt, containing ture, such as plant and mine maintenance operations will be milled at the end of both 5 million mt of copper and 17.6 million oz workshops, will be completed as part of the open-pit and underground operations. of gold at a 0.2% copper cut-off grade. project’s 2013 capital budget, in conjunc- tion with the ramp up of the plant. Sagittarius Mines Eyes 2019 Ma’aden/Alcoa Joint Venture Commissioning of the plant’s gravity for Tampakan Start Produces its First Hot Metal gold circuit was in progress. Sagittarius Mines, the operating company The Saudi Arabian Mining Co. (Ma’aden) OceanaGold expects the Didipio project that is developing the Tampakan copper- and Alcoa announced in mid-December to produce 285,000 to 325,000 oz of gold gold project on Mindanao island in the 2012 that their joint-venture smelter pro- and 15,000 to 18,000 mt of copper in Philippines, has provided the national gov- ject at Ras Al Khair, Saudi Arabia has pro- concentrates in 2013, with cash costs of ernment’s Mining Industry Coordinating duced its first hot metal 25 months after the gold production estimated at $650 to Council with an updated project develop- pouring of the first concrete for the smelter. $800/oz net of copper by product credits. ment plan that outlines the potential for The milestone marked the successful com- The Didipio project is located about commercial production to begin in 2019. missioning of the first of 740 smelting fur- 270 km north-northeast of Manila. Re- The company had previously estimated naces or “pots” and is a key step toward serves total 1.68 million oz of gold and that production might start in 2016. commercial production at the smelter. 230,000 mt of copper. Measured and indi- A joint venture between Xstrata Copper In its initial phases, the Ma’aden/Alcoa cated resources total 2.14 million oz of (62.5%) and Indophil Resources NL joint venture is developing a fully integrat- gold and 290,000 mt of copper, and (37.5%) holds a controlling 40% equity ed, $10.8-billion industrial complex that inferred resources total 430,000 oz of gold interest in Sagittarius Mines. The 60% includes a bauxite mine with an initial and 70,000 mt of copper. non-controlling equity shareholders are capacity of 4 million mt/y; an alumina Mine life is estimated at 16 years at Tampakan Mining Corp. and Southcot refinery with an initial capacity of 1.8 mil- average life-of-mine production of 100,000 Mining Corp., known as the Tampakan lion mt/y; an aluminum smelter with an oz/y of gold and 14,000 mt/y of copper. Group of Companies. initial capacity of 740,000 mt/y; and a The Didipio deposit will be mined by Sagittarius President Peter Forrestal rolling mill, with an initial capacity of both open-pit and underground methods. said, “The Tampakan project has experi- 380,000 mt/y year.

20 E&MJ • JANUARY 2013 www.e-mj.com

REGIONAL NEWS - EXPLORATION ROUNDUP Tahoe Resources Extends Mineralization at Escobal

Tahoe Resources reports that recent uation of the Escobal vein over 400 m east action, Centerra will own 100% of the pro- wide-spaced drilling at its underground of the current resource limit. This zone is ject. Consideration for the purchase con- Escobal silver project in southeast untested at depth and remains open to the sists of a $20-million cash payment at clos- Guatemala has significantly extended the east where offset by post-vein faulting. ing and a 1% net smelter return royalty on Escobal vein laterally over 600 m west Extensional drilling in the deep West the project, subject to a $20 million cap. and 400 m east of the current resource zone will continue with one deep-capacity The Öksüt gold project is contained limits as well as down dip in the East and surface drill, while three drills will focus on within an oxidized, high-sulphidation West/Margarito zones. underground in-fill drilling to support epithermal system. The project’s Ortaçam Mineralization can now be traced over a mine-stope definition. North deposit was discovered in July 2011 3,000-m strike length and 1,600-m verti- The 2013 Escobal exploration budget and has been the focus of the joint venture cal range along the Escobal vein. The trend of $6.1 million will support continued drilling, which through November 2012 remains open laterally to the east and west, deep step-out drilling in the west and east totaled 22,480 m in 75 holes. Currently, and to depth. Escobal extensions as well as exploration five diamond drill rigs are drilling at the The new drill results show potential for in undrilled portions of the Escobal vein, Ortaçam North deposit. resource growth in several areas. First- satellite veins, and regional targets as they The majority of the diamond drill holes pass, wide step-out drilling in the Far West become available. are PQ and HQ diameter. Hole depths extension area identified mineralized veins (www.tahoeresourcesinc.com) generally average around 300 m, with 600 m west and 700 m below the west some deeper holes being drilled to 500 to limit of the current resource model, and Exploration Briefs 600 m. drilling in the East zone extended mineral- Centerra Gold has entered into a binding The drilling at Ortaçam North has out- ization below the East zone along a north- agreement to purchase Stratex Inter- lined a zone of oxide gold mineralization dipping dilational jog. national’s 30% interest in the Öksüt gold approximately 200 m thick over an area up Wide-spaced step-out drillholes in the project located in the Kayseri region of cen- to 600 m in length and 300 m in width. Far East zone confirmed the lateral contin- tral Turkey. Upon completion of the trans- (centerragold.com)

22 E&MJ • JANUARY 2013 www.e-mj.com REGIONAL NEWS - EXPLORATION ROUNDUP

AngloGold Ashanti reports that the mineral $1,550/oz pit optimization shell. Under- environment in Argentina at that time.” resource at the Tropicana gold project 330 ground mineral resources at Havana Deeps, (www.coeur.com) km east-northeast of Kalgoorlie, Western previously reported outside the Havana pit Australia has increased by a further 1.48 design, have been adjusted to reflect min- North American Palladium (NAP) reported in million oz to 7.89 million oz of contained eralization that lies outside this pit shell. December that greenfields exploration near gold in 118 million mt of material grading (www.anglogold.co.za) its Lac des Iles palladium mine north of 2.08 g/mt gold. The increase is the result Thunder Bay, Ontario, is well advanced, with of drilling completed in 2012 and greater Coeur d’Alene Mines is acquiring Mirasol the completion of airborne geophysical sur- confidence in the viability of a larger pit at Resources’ 49% interest in the Joaquin sil- veys, trenching, prospecting, quaternary and the project’s Havana deposit. ver-gold project in Santa Cruz province, bedrock mapping, and till and soil surveys The growth in the Tropicana mineral Argentina. Coeur currently has a 51% and the start of a 6,000-m drill program. resource primarily reflects additional drilling interest in the project. Coeur will pay NAP’s greenfields platinum group completed as part of a Havana Deeps prefea- Mirasol total consideration of $60 million, metals properties comprise more than sibility study targeting the down-plunge and being approximately $30 million in cash 21,000 ha of land and seven discrete along-strike extents of the Havana orebody and the remainder in Coeur shares. intrusive bodies, all believed to be relat- outside the current Havana open-pit design. The Joaquin project has a recently ed to a single, major mafic-ultramafic Detailed mining, metallurgical, and other updated NI 43-101 mineral estimate of magmatic event that occurred in the Late study investigations are under way and will 38.4 million oz of silver in measured and Archean. The company intends to lever- be completed during 2013, with a view to indicated resources and 31.3 million oz of age its advanced understanding of plat- updating the ore reserve. The prefeasibility silver in inferred resources. The project inum group metals mineralizing process- study will consider the trade-off between also has 39,600 oz of gold in measured es at Lac des Iles to explore other similar open-pit and underground mining options and indicated resources and 19,400 oz of mafic-ultramafic complexes. and will provide recommendations as to the gold in inferred resources. NAP now controls the mineral rights optimal mining approach. Coeur President and CEO Mitchell J. for much of the known Lac des Iles suite The results of 2012 drilling indicate Krebs said, “We intend to continue the of intrusions, which, despite intermittent that cutbacks on current pit designs for the drilling program at Joaquin in 2013 and historic work, have never been systemat- Havana, Tropicana, and Boston Shaker accelerate work on a feasibility study. The ically explored. All of these greenfields deposits are potentially economically subsequent development decision will be properties are located within 30 km of viable. Accordingly, 2012 open-pit mineral based on the economics of the project and the Lac des Iles mine and mill complex. resources are now being reported within a our assessment of the political and business (www.napalladium.com)

www.e-mj.com JANUARY 2013 • E&MJ 23 NEWS-THIS MONTH IN COAL Ship Damages Coal Loading System at Westshore Terminals

splitting its mining and property assets into separate entities. Faced with continu- ing operating losses, $220 million in debt and a $680 million deficit in its pension funds, UK Coal had risked breaching covenants had it not done so, with its min- ing operations liable to run out of cash early in 2013. Under the new structure, UK Coal Mine Holdings becomes a wholly-owned subsidiary of a new parent company, Coalfield Resources plc, with the property portfolio it acquired in the 1990s during the privatization of former state-owned British Coal being placed in Harworth Estates Property Group. Coalfield Re- sources retains a 90% economic interest in the mining division, although voting control has been passed to a newly estab- lished employee benefit trust. The compa- A large bulk carrier destroyed a section of trestle after crashing into a berth at Westshore Terminals. (Photo cour- tesy of Global BC) ny’s pension funds now have a 75.1% interest in Harworth Estates in return for a A large bulk carrier docking at Westshore stored at the site as a result. Westshore $50 million cash injection to the property Terminals in Vancouver, Canada, destroyed Terminals has filed a lawsuit against the business, with all surplus cashflow from a coal conveyor system December 7, Japanese owners of the ship. the mines to be used to fund the pension 2012, disabling the largest of the port’s The terminal is the main shipping point deficit for the foreseeable future. two berths. The mishap has put the berth for metallurgical coal from Teck Resources During 2011, UK Coal produced 7.5 out of service for an indefinite period of mines in eastern British Columbia. It is million mt of mainly power-station fuel, of time and diminished the port’s ability to also used by U.S. coal companies. Teck which 5.7 million mt came from its three export coal. The loss of the berth, which Resources said it would continue to use remaining underground mines. Although handles ships with a cargo capacity up to Westshore’s remaining berth, but will be the company reported net profits of US$87 260,000 metric tons (mt), is a significant shifting capacity to Neptune Terminals in million on revenues of US$770 million for blow to Westshore, which is North North Vancouver to maintain export vol- the year, its long-term performance has America’s largest coal exporting port. umes. It’s also investigating other options. been weak since the late 1990s. It report- Westshore has one remaining berth, that Teck Resources recently provided an ed a US$34 million loss for the first half of can handle ships with a capacity of update its coal sales, saying the company 2012, and warned that its deep mine with 180,000 mt. The bulk carrier Cape expects to exceed 6.2 million mt for the the longest potential resource life, Daw Apricot, with a capacity of 180,000 mt, fourth quarter of 2012, and production for Mill, will close in 2014 (or before) unless slammed into a trestle, the only link the first quarter of 2013 is not expected to be its performance improves and costs are cut. between the berth and the terminal, materially impacted by the damage to Berth If nothing else, the restructuring buys destroying more than 100 m of it. The ship 1. Teck will use alternative shipping options Coalfield Resources time. However, the went right through the causeway, taking a while Westshore repairs the damage, includ- company is saddled with high fixed costs at road, the coal-carrying conveyor belt, and ing securing additional capacity through its underground mines, problems with win- electric and water lines with it. Neptune, Pacific Coast, Thunder Bay and ning permits for new surface operations, Denis Horgan, general manager, Ridley Terminals. Based on Westshore’s esti- and a coal market in which imports com- Westshore Terminals, called the incident mated repair schedule and expected loading pete strongly for generators’ business. The “the biggest calamity in our history” and capacity for Berth 2, Teck expects to have question remains, of course, whether it will said the cleanup and repair is something total shipping capacity of approximately 6 be able to provide a ‘soft landing’ for its “that will take months, not weeks.” Noting million mt in the first quarter of 2013. remaining 2,500 workforce in the longer the coal port already operates 24/7, term as reserves run out, or whether Horgan said there’s no doubt the loss of the UK Coal Restructures imports—including increasing tonnages berth, which is the bigger of the two, will In December, the UK’s largest coal pro- from US suppliers faced with their own impact customers. Fewer trains will be ducer finally completed an eight-month shale-gas competition issues—will under- arriving at the terminal and less coal will be restructuring exercise that has involved mine the last pillar of Britain’s coal industry.

24 E&MJ • JANUARY 2013 www.e-mj.com

NEWS-CONTINUED

(U.S. & Canada Regional News - from p. 10) Queenston’s key asset is its Upper Lake district that are expected to provide Beaver project in the Kirkland Lake district additional feed for a central milling facility. Osisko Acquires Queenston of eastern Ontario, which is on trend with The company’s Kirkland Lake properties in Friendly Transaction Osisko’s flagship Canadian Malartic mine in aggregate host NI 43-101 compliant Shareholders of Queenston Mining in western Quebec. In February 2012, indicated resources of 2.1 million oz of gold approved acquisition of the company by Queenston completed a preliminary eco- in 13 million mt of material grading 5 g/mt Osisko Mining at a shareholders meeting nomic assessment of the project outlining and inferred resources of 1.9 million oz of on December 20, 2012. The friendly, all- an initial 10-year mine life operating at gold in 13 million mt of material grading share transaction, originally announced in 2,000 mt/d. Over the life of the mine, 4.5 g/mt. early November, was expected to close Upper Beaver is expected to produce a Osisko President and CEO Sean Roosen before year-end. The transaction valued total of 1.1 million oz of gold at an average commented, “Queenston is an excellent Queenston’s equity at approximately rate of 120,000 oz/y and average cash strategic fit within our existing Canadian port- C$550 million. Queenston shareholders costs of $386/oz net of byproduct credits. folio and, in our view, is one of the best unde- will own approximately 12% of Osisko fol- Exploration activities are ongoing at four veloped high-grade opportunities and signifi- lowing completion of the transaction. other Queenston deposits in the Kirkland cant open-pit targets in Canada.”

NEWS-CALENDAR OF EVENTS

FEBRUARY 10–13, 2013: 39th Annual Conference on Explosives and MAY 19–22, 2013: Haulage & Loading, Litchfield Park, Arizona, USA. Blasting Technique, Fort Worth, Texas, USA. Contact: International Contact: Tanna Holzer; Tel: 303-283-0640; Email: tholzer@mining- Society of Explosives Engineers; Tel: 440-349-4400; Web: www.isee.org. media.com; Web: www.mining-media.com. FEBRUARY 24–27, 2013: 142nd SME Annual Meeting and Exhibit and MAY 25–JUNE 1, 2013: ALTA 2013 Nickel-Cobalt-Copper, Uranium & Gold CMA 115th National Western Mining Conference, Denver, Colorado, Conference and Exhibition, Perth, Western Australia. Contact: Alan Taylor, USA. Contact: Society for Mining, Metallurgy & Exploration; Tel: 303-948- ALTA Metallurgical Services; Tel: 61 (0)418 126 284; Fax: 61 (0)3 9686 3008; 4200; Email: [email protected]; Web: www.smenet.org/meetings. Email: [email protected]; Web: www.altamet.com.au. MARCH 3–6, 2013: PDAC 2013, International Convention, Trade Show JUNE 11–13, 2013: Longwall USA Exhibition & Conference, Pittsburgh, & Investors Exchange-Mining Investment Show, Toronto, Canada. Pennsylvania, USA. Contact: Tanna Holzer; Tel: 303-283-0640; Contact: Prospectors & Developers Association of Canada; Tel: Email: [email protected]; Web: www.mining-media.com. 416-362-1969 ext. 1; Fax: 416-362-0101; Email: [email protected]; JUNE 17–21, 2013: Exponor, Antofagasta, Chile. Contact: Antofagasta Web: www.pdac.ca. Industrial Association; Tel: 55-454300; Web: www.exponor.cl. APRIL 15–21, 2013: bauma 2013, Munich, Germany. Contact: Messe JULY 28–AUGUST 2, 2013: Mercury 2013, Edinburgh, Scotland. München GmbH; Tel: 49 89 949-11348; Fax: 49 89 949-11349; Email: Contact: Marcus Pattison; Tel: 44 (0) 1727 858840; Fax: 44 (0) 1727 [email protected]; Web: www.bauma.de. 840310; Email: [email protected]; Web: www.mercury2013.com. APRIL 16–18, 2013: Minex Central Asia 2013, Astana, Kazakhstan. AUGUST 11–16, 2013: Extemin, Lima, Peru. Contact: El Instituto Contact: Arthur Poliakov; Tel: 44 (0) 207 520 9341; Email: de Ingenieros de Minas del Perú; Tel: (51 -1) 349 4262, ext 352; [email protected]; Web: www.minexasia.com. Web: www.iimp.org.pe. APRIL 16–19, 2013: IMCET2013, 23rd International Mining Congress AUGUST 20–23, 2013: AIMEX 2013 Asia-Pacific’s International and Exhibition of Turkey, Kemer/Antalya-Turkey. Contact: UCTEA Mining Exhibition, Sydney, Australia. Contact: Reed Exhibitions Chamber of Mining Engineers of Turkey; Email: [email protected]; Australia; Tel: 61 2 9211 7544; Email: [email protected]; Web: www.imcet.org.tr. Web: www.aimex.com.au. MAY 5–8, 2013: CIM 2013 Convention, Toronto, Ontario, Canada. SEPTEMBER 4–6, 2013: China International Mining Expo 2013, Beijing, Contact: Canadian Institute of Mining, Metallurgy and Petroleum; China. Contact: Beijing Hiven Exhibition Co. Ltd.; Tel: 86-10-6863 8450; Tel: 514-939-2710, ext. 1311; Email: [email protected]; Web: Email: [email protected]; Web: www.bjminexpo.com. http://web.cim.org/toronto2013. SEPTEMBER 11–12, 2013: EuroMining 2013, Tampere, Finland. MAY 6–10, 2013: SYMPHOS 2013, the International Symposium on Contact: Tampere Trade Fairs/Mikael Wänskä; Tel: 358 207 701 230; Innovation and Technology in the Phosphate Industry, Agadir, Email: [email protected]; Web: www.euromining.fi. Morocco. Contact: OCP Group, Morocco; Tel: 212 5 23 34 51 22; Fax: SEPTEMBER 23–26, 2013: Exposibram, Belo Horizonte, Brazil. 212 5 23 34 50 64; Email: [email protected]; Web: www.symphos.com. Contact: Kallman Worldwide Inc.; Tel: 201-251-2600 ext. 127 or MAY 7–9, 2013: Arminera, Buenos Aires, Argentina. Contact: Viewpoint 56 2 843 3300 ext.3303; Web: www.kallman.com. SA; Tel: (011)4814-3833/4816-5818; Email: [email protected]; OCTOBER 1–3, 2013: Minex Russia 2013, Moscow, Russia. Contact: Web: www.arminera.com.ar. Irina Yukhtina; Tel: 44 (0)207 520 9341; Fax: 44 (0)207 520 9342; Email: [email protected]; Web: www.minexrussia.com. MAY 11–12, 2013: Geominetech 13th Annual Symposium on New Equipment New Technology Management and Safety, OCTOBER 31–NOVEMBER 2, 2013: Mining 2013 Myanmar, Yangon, Bhubaneswar, India. Contact: JK Hota, editor and organizing secretary; Myanmar. Contact: Shaun White, Allworld Exhibitions; Tel: 44 2078402130; Email: [email protected] or [email protected]; Web: Email: [email protected]; Web: www.miningmyanmar.com. www.geominetech.webs.com. NOVEMBER 27–29, 2013: 9th International Heavy Minerals Con- MAY 11–13, 2013: Indaba 2013, Durban, South Africa. Contact: ference 2013,Vishakhapatnam, India. Contact: Mining Engineers Witch & Wizard Creative (Pty) Ltd.; Tel: 27 (0)11 467 5011 / 5024; Association of India; Tel: 91-9704928886; Fax: 91-08942283758; Email: Fax: 27 (0)11 467 5350; Web: www.indaba-southafrica.co.za. [email protected]; Web: www.meai.org.

26 E&MJ • JANUARY 2013 www.e-mj.com NEWS-CONTINUED

(Latin America Regional News - from p. 14) concerned about the level of capital and pre-production operating costs and $131 operating costs in the industry. We believe million of pre-production revenue. Minera Antucoya Suspends Antucoya’s decision to temporarily suspend Pitarrilla will use standard truck-and-shov- Project Development and review the project reflects an appropri- el open-pit mining methods. The expected Antofagasta plc announced on December ate and measured approach to addressing mining life is 20 years, including three pre- 21, 2012 that Minera Antucoya (70% these concerns. production years. The plant will be designed Antofagasta, 30% Marubeni Corp.) has to process 12,000 mt/d of direct leach ore decided to temporarily suspend development Silver Standard Reports and 16,000 mt/d of flotationleach ore. of the Antucoya copper project in Chile’s Positive Feasibility Study The two ore types will utilize a common Antofagasta region to enable a full review of for Pitarrilla crushing and grinding circuit. Initially, the project given existing and potential levels Silver Standard Resources has reported the highly-oxidized ore will be direct leached in of cost escalation. Antucoya immediately results of a positive feasibility study of its an agitated leach circuit. Silver will then be issued notices of termination under the prin- 100%-owned Pitarrilla open-pit silver proj- extracted from the pregnant leach solution cipal construction contracts for the project. ect 160 km north-northwest of the using the Merrill-Crowe process to produce The Antucoya project is based on a cop- city of Durango within the state of Durango, silver-rich doré bars. per oxide deposit located 45 km east of Mexico. The study evaluates a 32-year proj- Subsequently, the less oxidized and un- Antofagasta’s Michilla mine. Project devel- ect producing an average of 15 million oz/y weathered sulphide ores will be processed in opment was announced in December of silver during the first 18 years of produc- sequential lead and zinc flotation circuits to 2011. Production was expected to average tion. Life-of-mine production is estimated produce separate silver-bearing lead and of 80,000 mt/y of copper cathodes through at 333 million oz of silver, 582 million lb of zinc concentrates. Tailings from the flotation a standard heap-leach process over a mine lead, and 1.7 million lb of zinc. circuits will be processed in the agitated life of about 20 years, with production Probable mineral reserves at Pitarrilla leach circuit to recover additional silver. starting during the second half of 2014 currently total 43.4 million mt of direct Over the project’s life, the plant will Capital cost to develop the project leach ore grading 91.5 g/mt silver and produce an estimated 118.5 million oz of initially was estimated at $1.3 billion. In 113.2 million mt of flotation/leach ore grad- silver in silver-rich doré bars; 604,000 mt May 2012, the estimate was raised to ing 96.5 g/mt silver, for a total of 479 mil- of lead concentrate at average grades of $1.7 billion. lion oz of contained silver. Total construction 43% lead and 9,500 g/mt silver; and 1.5 Diego Hernandez, CEO of Antofagasta costs to develop the project are estimated at million mt of zinc concentrate at average Minerals S.A., commented, “We remain $741 million, including $157 million of grades of 46% zinc and 604 g/mt silver.

(Australia/Oceania Regional News - from p. 16) second stage of development, the 40-mil- tem for its Solwara 1 seafloor mining pro- lion-mt/y Kings deposit, will lift production ject in the Bismarck Sea, Papua New Fortescue Opens Rail Line at the Solomon hub to 60 million mt/y. Guinea. The project development agree- Serving Its Solomon Hub Fortescue slowed development of the ment calls for the State to earn a 30% Fortescue Metals dispatched the first train Kings mining operation in September interest in the project by contributing 30% load of iron ore from its Solomon mining 2012 because of volatile market condi- of the capital for project development. hub in Western Australia in early December tions. The company is now considering Nautilus reported that it had made sig- 2012, as it opened the new rail link from accelerating that development, with a view nificant progress in developing the Solwara the hub to an existing mainline railway to reaching its production target of 155 1 project and that the seafloor production from its Chichester hub to Herb Elliot Port. million mt/y of iron ore from all of its mines equipment build was 53% complete as of The train of 240 ore cars carried 23,000 by the end of 2013. the end of September. The company report- mt of ore from the Solomon hub’s Firetail In mid-December 2012, Fortescue ed that the State’s capital obligation totaled deposit 130 km along the new rail link and announced that it had begun a process to $51.5 million, excluding interest, as of that then 175 km along the existing mainline consider the potential sale of a minority date and that the State disputed that it was railway to the port. interest in its 100%-owned “The Pilbara required to meet its obligations at that time. The new rail link has been named the Infrastructure” (TPI) subsidiary that owns Lacking financial participation from the Fortescue Hamersley Line. the company’s rail and port assets. State, Nautilus decided to preserve its Following the ramp-up of the Firetail ore Fortescue CEO Nev Power said the compa- cash position by terminating construction processing facility at Solomon in March ny has received strong interest from a num- of the equipment for the seafloor produc- 2013, Fortescue will operate 11 trains per ber of strategic and financial parties inter- tion system. day from its three operations, the Cloud- ested in investing in TPI. Nautilus has other prospects in the break and Christmas Creek mines in the southwest Pacific, including exploration ten- Chichester hub and the Firetail mine at Nautilus Minerals Terminates ements in the territorial waters of the Solomon. The trains will each haul up to Equipment Build Kingdom of Tonga. On November 1, 2012, 33,000 mt of ore and will complete at least Nautilus Minerals announced in mid- the company announced the discovery of one trip each per day to the Herb Elliott Port. November 2012 that due to a financing two high-grade seafloor massive sulphide The Solomon hub, located 60 km north dispute with the State of Papua New systems on these tenements, with grab sam- of Tom Price, will produce an initial 20 Guinea, it has terminated construction of ples assaying up to 11.9% copper, 59.8% million mt/y from the Firetail deposit. A equipment for the seafloor production sys- zinc, 28.6 g/mt gold, and 673 g/mt silver. www.e-mj.com JANUARY 2013 • E&MJ 27 PROJECT SURVEY 2013 E&MJ’s Annual Survey of Global Mining Investment Last year’s survey questioned whether the long boom in mining investment was starting to fade, or just experiencing a temporary market adjustment. This year’s verdict: the boom has peaked. By Magnus Ericsson and Viktoriya Larsson

The investment boom in the global mining sector slowed down dur- is down compared with both the first half of the year and the ing 2012. The annual growth rate of the project pipeline was only same two quarters in 2011. However, it is important to remember: 9% in 2012 compared with 20% and 21% in 2011 and 2010. The 1) there is always a delay in reporting new projects; and 2) this number of projects in the pipeline even decreased between 2011 analysis is based only on figures captured up to late November/ and 2012—only by 1%, but marking the end of a continuous early December. increase over the past years. The slowdown, which continued The upward trend of increased project costs, highlighted in the throughout the year but accelerated in the last quarter, has includ- 2011 survey, continued in 2012. We previously noted that many ed a number of project deferrals such as the postponement of the projects have been enlarged in both announced cost and capacity high-profile $8-billion Olympic Dam project by BHP Billiton. Other when moving from the feasibility to the construction phase and examples are the Prioskolskoye iron ore project and the Sukhoi Log this tendency continues. Of all of the gold projects in this year’s gold project, both in Russia; Grupo Mexico’s El Arco copper project list, 10 experienced cost increases totaling more than $8 billion, in Mexico; Vale’s Vermelho nickel project in Brazil; and others. from an original total of $15.4 billion. The average increase was During 2012, 130 new mining projects with an estimated total 54%. Only one project managed to cut its cost, by a marginal 5%. cost of $47 billion were registered in Raw Materials Group’s (RMG) Six projects are new to the list and no comparison is possible. Raw Materials Data Metals (RMD Metals) ‘Mines/Projects’ database. Project cost increases are not entirely due to increasing unit Project investment in 2012 was considerably lower than in 2011, costs but also to rapid growth in metal demand. Other important when the number of new projects registered was 165 with an esti- cost drivers include more complex ore bodies, deeper lying deposits mated total investment cost of $110 billion. The final figures for with lower grades and increasingly remote locations of new mines. 2012 will most likely increase somewhat as a number of projects Equipment prices and construction costs are increasing and many from the end of 2012 will only be registered in the database early equipment suppliers are working at near full capacity. Problems in 2013. This correction has been as much as 15%–20% in some caused by lack of experienced mining staff, which disappeared in years, but most probably will be less than that this year. Although it 2009 and 2010, have re-emerged although not at the same seri- is too early to draw any detailed conclusions it is clear that the peak ous level as in late 2007 and early 2008. In some regions— in investments in the present cycle has been reached and we will Western Australia, for example—recruitment of staff has become a most likely see a slight decline in investment activities in 2013. serious problem and salary and wage levels are getting out of hand. However, this decline will not represent the start of a long-term The number of projects at the feasibility stage has increased trend. Mining and mining investments have always been and will strongly, to 28% of total investment. This growth is to be expect- remain cyclical businesses, and RMG remains optimistic for the ed given the high numbers of new projects announced in 2010 long-term outlook of the sector. Population growth, urbanization and 2011, which now have matured and evolved to the next stage and general economic development in the emerging economies in the development process. At the same time, the number of pro- are still positive and provide a strong base for continued growth in jects at the conceptual and pre-feasibility stages has decreased metal demand and hence the need for increased mine production because of a drop in new, early-stage projects, reflecting the and for new investment projects. declining investment appetite and increasing financial problems Economic Weakness, Lower Expectations Mining Project Investment Pipeline, 2012 As 2012 drew to a close, the total value of announced investment Investment Share Share Trend ( x US$ B) (Percent) (2011 to 2012) in the project pipeline of the global mining industry was $735 bil- lion, as registered in the RMD Metals ‘Mines/Projects’ database. Greenfield Projects The deepening financial crisis in Europe and the slow recovery in Early Stages North America seem to have slowed growth in 2012. Metal prices Conceptual & ↔ during the past year have, on the whole, not performed badly, with Prefeasibility 269 037 → gold prices higher than in 2011, copper and iron ore on slightly Feasibility 204 028 ↔ lower levels while nickel and zinc have been trending downward Construction 082 011 for about two years. Brownfield Projects

Industry expectations for 2013 are cautious and might have All Stages 180 024 → depressed investments toward the end of the past year. The num- TOTAL 735 100 ber of projects announced in the third and fourth quarters of 2012 Source: All table data provided by Raw Materials Data, Stockholm, Sweden, December 2012.

28 E&MJ • JANUARY 2013 www.e-mj.com PROJECT SURVEY 2013 of the junior companies that initiate most of these projects. This Mining Project Investment by Metal, 2012 will likely cause some problems in the future, as there will not be Investment Total Share Share Trend enough conceptual- or prefeasibility-stage projects in the pipeline (US$ billion) (Percent) (2011 to 2012) to meet the inevitable rising demand for metal. Iron ore 245 034 → The share of projects at the construction stage increased mar- Copper 200 027 →→ ginally compared with 2011. However, the investment value of Gold 125 017 ↔ this sector grew strongly in 2012. The average cost of projects Nickel 60 008 under construction in 2012 was $930 million—a large difference Uranium 25 004 ↔ → from the average of $645 million in 2011. The same situation is Lead/zinc 17 002 noticeable for brownfield projects, although for those the average PGMs 16 002 ↔ project cost is generally much lower, at $450 million, than for a Diamonds 9 001 ↔

Silver 8 001 → greenfield project. → Other 00 006 It is difficult to accurately monitor the progress of brownfield Total 735 100 projects from project studies to construction because they are often carried out internally and quickly, without public disclosure. Thus, more than four times the average investment cost of gold projects, the total investment figure for projects under construction is un- at $304 million—while average copper and nickel project costs doubtedly an underestimate, particularly for this project category. are $816 million and $777 million, respectively. All of this year’s survey statistics are based on projects with an The project growth rate for iron ore and gold both decreased con- announced investment estimate. The RMD Metals database also siderably in 2012, dropping to 14% and 13%, respectively, from includes approximately 1,900 projects—mostly in the conceptual 2011’s rate of 33% and 34%. The growth rate of the gold pipeline stage—for which no investment figure has been announced. The had started to recover in 2011 after a weak year in 2010, which had investment total for all mining projects, including projects for a growth rate of only 11%. New gold projects in 2012 totaled $14 bil- which no investment estimate has been published, is therefore lion compared with $28 billion in 2011 and only $7 billion in 2010. larger than the $735 billion recorded at the end of 2011—but it Given gold’s on-going high price, these swings are difficult to explain. is difficult to estimate how much larger. If it is assumed that the The iron ore sector had only $13 billion of new investment projects without published investment estimates have a similar enter the pipeline in 2012 compared with $53 billion in 2011, cost structure to those projects whose costs are known, the total while copper’s $10 billion of new investment in 2012 fell well figure would increase considerably. It could, however, also be below 2011’s $24 billion. argued that unannounced-project costs are lower, as most mega- Gold’s per-project investment, on average, is relatively small but projects are conducted by public companies that must publicly the number of gold projects is high. In 2012, 64 new gold projects disclose all significant expenditures. If this is indeed the case, the were announced—not at all surprising considering the record high total figure would be smaller. Projects involving metals not covered gold prices of 2012—compared with 53 in 2011. A total of 16 in this survey but included in the database also represent a spe- new iron ore projects and 21 new copper projects also were cific investment total but one that is estimated at a much lower announced in 2012, compared with 21 new iron ore and 24 new level than the major metals represented in the survey copper projects in 2011. It is obvious that copper is the metal that Given the continued strong metal demand from China, India has done best in terms of the number of new projects in 2012. and other emerging economies, RMG expects metal prices to mild- Somewhat surprisingly the number of new nickel projects ly decline in 2013 before possibly rising again in 2014. increased in 2012 after a downturn in 2011, with six new projects Many of the early stage projects included in this year’s total announced at a total investment of $3.7 billion. The rare earths con- investment figure will not pass from the conceptual study phase to tinued to attract interest after a slowdown in 2011 as well: eight new the construction stage for a number of reasons. However, histori- projects at a total of $3.6 billion were announced. If all of them are cally RMG has observed that 60%–75% of all projects announced carried through to construction an over-supply situation will quickly will materialize during a three-year period. develop. Also unexpected was a revival of interest in silver during 2012, with six new projects at a total announced investment of $1.2 Iron Ore Grabs a Bigger Share billion. Lead/zinc, uranium and PGMs continued to decline in 2012, As in previous years iron ore, copper, gold and nickel, in that order, with only one, three and two new projects announced, respectively. are the largest investment targets for mining companies. These four metals account for 86% of the total project pipeline, a small Latin America Still No. 1 increase from 84% in 2011. They also dominate the mining busi- Latin America remained in top position in 2012 with a 29% share ness in terms of total value of its output, which for these metals of the global investment pipeline, which is below its highest previ- only is $606 billion or 71% of the total value of all mine produc- ous share of 32% in 2010. North America is the only region show- tion of metals during 2011. ing strong, continuous growth for the past three years, up from 15% Iron ore project investment remains firmly in the top spot, as it in 2010 to 20% in 2012, with total investment value rising from has since 2010, and even increased its share in 2012 with a pro- $86 billion in 2010 to $146 billion in 2012. Africa’s share of total ject pipeline of $245 billion; while copper, in second place, mining project investment was down slightly to 14%, but increased accounted for $200 billion. Gold and nickel are at much lower lev- in value to $106 billion. Europe, including all of Russia, main- els ($125 billion and $60 billion respectively), followed by a sig- tained its position but Asia’s share fell from 11% to 10%; Asia nificant drop to the $15–$25 billion level where uranium, reached its peak of 14% in 2009 but has been falling since. lead/zinc and the PGMs, in that order, are to be found. The aver- The investment pipeline in North America grew by $24 billion age iron ore project demands an investment of $1.24 billion— in 2012, and in Oceania by $8 billion, a considerably slower pace www.e-mj.com JANUARY 2013 • E&MJ 29 PROJECT SURVEY 2013

Mining Project Investment by Region, 2012 share remained at the same level despite a slight decline by Investment Share Share Trend Australia, which was compensated by strong U.S. growth. (US$ billion) (Percent) (2011 to 2012) Australia has kept its standing as one of the most attractive Africa 106 014 ↔ countries for mining investments despite concerns anticipated by →→ Asia 075 010 the introduction of its ”super profit” tax, the final promulgated ver- Europe 077 010 sion of which was a much weaker version of the original proposal.

Latin America 210 029 → Iron ore projects continue to dominate, and of the top 20 projects

North America 146 018 → in Australia 15 are in iron ore and all of them demand investments ↔ Oceania 121 017 of over $1 billion each. Second-ranked Canada has a much broad- TOTAL 735 100 er mix of projects including several gold and base metal projects than the previous year. Latin America’s project pipeline shows the among the top 20 with seven iron ore projects as well as six gold highest average of all because there are more super large projects projects, two copper projects, two nickel projects, one diamond in this region than in any of the others. The average project invest- project and one niobium project on the list. The pipeline value of ment within the Latin America sector is $730 million, more than projects in both countries is more than $100 billion. twice Asia’s average of $363 million. The other regions fall There was little change in ranking of the Top 10 countries in between these two extremes: Europe, $450 million; Africa, $541 2012; in fact, the only change was Guinea moving up from ninth million; North America, $681 million; and Oceania, $583 mil- position from tenth, replacing the Philippines. Brazil’s mining lion, respectively. investment total, which fell in 2011, rebounded in 2012 to its In Europe (excluding Russia), focus is increasingly on the 2010 ranking with more than $50 billion in project funding. Nordic countries, including Finland, Sweden and Greenland. Russia, at 5% grew its investment share at a slower pace than Sweden has maintained its position among the top 20 countries. most of the Top 10 countries, and the volume of investments in Finland is likely to move up the list, as Anglo American has the South African pipeline declined by 7% or $23 billion, under- announced that its Sakatti copper/nickel/PGM early-stage project scoring the problems the country has experienced during past is among the most promising greenfield finds made by the com- years; calls from the ruling ANC party’s Youth League for national- pany globally in 20 years. In addition, Gold Fields has revitalized ization of the mining sector have had an impact on international its Arctic platinum project in northern Finland. investors’ perception of the country. Meanwhile, Guinea continued The European Commission’s renewed interest in the mining sec- its upward progress despite a slight drop in the $16 billion invest- tor has not resulted in any notable improvements in Europe’s invest- ment total for its three giant iron ore projects. ment climate, despite the Raw Materials Initiative having been in Below the Top 10 cutoff are Mexico, Papua New Guinea, Sierra place for several years. In Africa, the African Union has decided to Leone, Argentina, Indonesia, China, Sweden, Republic of the Congo, establish the Africa Mineral Development Center in Addis Ababa, Cameroon and Kazakhstan in that order, each with a portfolio of pro- the capital city of Ethiopia, to support the implementation of the jects between $8–$15 billion. (Please note that an error in the 2012 African Mining Vision. The World Bank has announced plans to project survey text made incorrect reference in this context to the spend $1 billion on mapping and exploration for metals and miner- Democratic Republic of the Congo (DR Congo) instead of Republic of als in Africa, which would give this underexplored region a boost. the Congo). The giant Zanaga iron ore project has propelled this Asia’s problems are clearly highlighted by the continuing uncertain- Central African country to such a high ranking, an example of how ty surrounding Mongolia’s Oyu Tolgoi copper project, which has just the start or completion of one large project can significantly alter been delayed several times due to the government’s on-going insis- the ranking of smaller countries relative to others in the survey. tence on renegotiating the project’s mine agreement. In Sierra Leone, for example, one new project during 2012 added more than $6 billion to its country total, illustrating that not Investors Wary of Resource Nationalism, a lot of importance should be associated with a country’s rank out- Unstable Environments side the top 10. The investment figure for China, it should be The total investment pipeline share of the 10 most attractive noted, is most certainly an underestimate since many of the pro- countries was static in 2012 at 71%, identical to 2011. Australia jects run by state-owned companies are never reported in such a and Canada continue to dominate both in terms of capex volumes way that they reach the international mining press. Chinese pro- and number of projects. Together, they account for more than jects are generally lower in project value at an average cost of $200 billion, divided among 326 projects. Although the promise of “spreading mining investments more Mining Project Investment by Country, 2012 evenly across the globe” has been mentioned in the previous three Investment Share Rank in (US$ billion) (Percent) 2011 project surveys, it has become clear that only a small number of Australia 105 14 01 countries continue to attract the largest share of the investments. Canada 104 14 02 The growing trend of resource nationalism is most certainly a key Chile 096 09 03 reason for this trend. Countries that are perceived as offering a sta- Brazil 052 07 04 ble political and economic environment receive growing attention. Russia 048 07 05 The United States has improved its share at a faster rate than any Peru 044 06 06 other country between 2010 and 2011, garnering a 38% share in United States 043 05 07 2011 and 34% in 2012. Chile is another example, with growth South Africa 023 03 08 during 2011 and 2012 at 20% and 27%, respectively. Australia, Guinea 016 02 10 Canada and the U.S accounted for 34% of the total project Philippines 015 02 09 pipeline at the end of 2011. In December 2012, their combined TOTAL 519 71

30 E&MJ • JANUARY 2013 www.e-mj.com PROJECT SURVEY 2013

$181 million; while in Canada, for example, the average project tion. It will take years before Chinese companies become powerful cost is $775 million. global players in the mining industry, but it will eventually happen. Chinese mining investment activity outside China remains most- ly marginal. China’s scramble for resources in Australia, Africa and Magnus Ericsson is CEO and a director of Raw Materials Group elsewhere involves minimal investment values despite rapid growth and a profesor at Sweden’s Luleå University of Technology. in recent years—but it is growth from an almost ‘zero’ starting posi- Viktoriya Larsson is a research analyst at RMG.

About This Survey Eligibility for a full listing requires each project to have an announced E&MJ’s annual review of metal mining projects is compiled from Raw investment cost estimate, reserve/resource data and an estimated annual pro- Materials Group’s Raw Materials Projects database (see demo at duction figure. Comparability of information from different companies, coun- www.rmg.se). The full database is available from RMG on an annual sub- tries and regions varies, as specific project information or definition may be scription basis and includes more than 4,400 projects as of December unclear for various reasons, or the project may also involve large unreported 2012, ranging from those in the prefeasibility stage to those currently infrastructure costs. Raw Materials Group attempts to resolve these factors, but under construction. Of the total number of projects listed in the database, cannot rectify all discrepancies arising from definitions and comparability. more than 1,300 include detailed descriptions of resources/reserves, Information contained in the survey is global in scope. However, it grades, planned investment cost, and completion date. should be noted that completely accurate coverage of some regions is dif- This survey includes all countries with known projects. In the process ficult to attain due to lack of information or corporate reporting standards chain from ore to metal, its main focus is on the mining stage. Pure smelter and requirements. In total, mine projects are included from more than 70 projects are not listed. In some cases, however, where the process is fully countries and the survey’s aggregate figures are considered to reflect over- integrated from mining to refining, such as acid pressure leach hydromet- all investment trends in the mining industry reasonably accurately. For allurgical nickel projects, all stages are included. more information, visit www.rmg.se or call +46-8-7440065. Major Mining Investment Projects Worldwide, Year End 2012 Project Name Location Status Type Products Controlled by Project Cost (US$ M) Gold Pascua-Lama Chile Construction OP Au, Ag Barrick 8,000 Cerro Casale Chile Prefeasibility OP Au, Ag Barrick, Kinross Gold 6,000 Donlin Creek USA Feasibility OP Au Barrick, NovaGold 5,845 KSM Canada Feasibility OP Au, Cu Seabridge 5,312 Galore Creek Canada Prefeasibility OP Au, Ag NovaGold, Teck 5,208 Dome Mountain Canada (Susp.) restart/feasibility UG Au Metal Mountain 4,187 Caspiche Chile Prefeasibility OP Au, Ag Exeter Resource 2,800 Metates Mexico Prefeasibility UG Au, Ag Chesapeake 2,701 Tasiast Mauritania Operating, exp/constr OP Au Kinross Gold 2,700 Olimpiada Russia Operating, expansion/plans OP Au PolyusGold Inter 2,500 Davidson-Blackwater Canada Conceptual OP Au, Ag New Gold Inc 1,800 Livengood USA Conceptual OP Au, Ag Intl Tower Hill 1,614 Courageous Lake Canada Prefeasibility OP Au Seabridge 1,520 Eleonore Canada Construction UG Au Goldcorp 1,414 Rosia Montana Romania Feasibility OP Au, Ag Gabriel Resources 1,400 Konevinskoye Russia Operating, expansion/plans OP Au Vertex, Rusfinansgrup 1,400 Natalka Russia (Susp.) restart/construction OP Au PolyusGold Inter 1,200 Detour Lake Canada Construction OP Au Detour Gold 1,157 South Deep South Africa Operating, expansion/plans OP, UG Au Gold Fields 1,156 Bakyrchik Kazakhstan (Susp.) restart/feasibility OP, UG Au Rio Tinto 1,124 Bystrinskoye Russia Feasibility OP Au, Cu Norilsk Nickel 1,100 Bloemhoek South Africa Feasibility UG Au Wits Gold 1,000 Hycroft Crofoot/Lewis USA Operating, expansion/feasibility OP Au, Ag Allied Nevada 0,985 Golden Meadows USA Closed, reopen/plans OP Au Vista Gold 0,879 Prosperity Fish Lake Canada Feasibility OP Au, Cu Taseko 0,807 Meliadine Canada Prefeasibility OP, UG Au Agnico-Eagle 0,793 Spanish Mountain Canada Prefeasibility OP Au, Ag Spanish Mountain 0,756 Cerro Negro Argentina Feasibility UG Au Goldcorp 0,750 Panimba Russia Conceptual OP Au PolyusGold Inter 0,739 Brisas Venezuela Feasibility OP Au, Cu Gold Reserve 0,731 Jiama China Operating, exp/feasib OP, UG Au, Cu CNGC 0,705 Tropicana Australia Construction OP Au Anglogold, Independence 0,702 Fruta del Norte Ecuador Prefeasibility OP Au, Ag Kinross Gold 0,700 Lobo/Marte Chile Prefeasibility OP Au Kinross Gold 0,700 Akyem Ghana Feasibility OP Au Newmont Mining 0,700 Lihir Papua New Guinea Operating, expansion/plans OP Au Newcrest 0,696 Rainy River Canada Conceptual OP, UG Au, Ag Rainy River Resources 0,680 Morelos Mexico Feasibility OP Au Torex Gold 0,675 Angostura Colombia Prefeasibility OP, UG Au, Ag Eco Oro 0,649 Kiaka Burkina Faso Prefeasibility OP Au Volta 0,610 Copper Andina Chile Operating, exp/constr OP, UG Cu, Mo Codelco 6,400 Cobre Panam‡ Panama Feasibility OP Cu, Au Inmet 6,181 Quebrada Blanca Chile Operating, exp/constr OP Cu Teck 5,600 Tampakan Philippines Feasibility OP Cu, Au Xstrata, Indophil Resources 5,200 Udokan Russia Prefeasibility OP Cu, Ag Metalloinvest 5,000 Golpu Papua New Guinea Prefeasibility OP Cu, Au Harmony, Newcrest 4,845 Oyu Tolgoi Mongolia Construction OP Cu, Au Rio Tinto, State of Mongolia 4,600 Pebble USA Feasibility OP, UG Cu, Au Anglo American, North Dynasty 4,500 Las Bambas Peru Feasibility OP Cu Xstrata 4,200 Cerro Verde Peru Operating, expansion/plans OP Cu FCX, SMM, Buenaventura 4,000 El Morro Chile Feasibility OP Cu, Au Goldcorp, New Gold 3,900 www.e-mj.com JANUARY 2013 • E&MJ 31 PROJECT SURVEY 2013

Project Name Location Status Type Products Controlled by Project Cost (US$ M) Chuquicamata Chile Operating, expansion/feasibility OP Cu, Mo Codelco 03,828 Escondida Chile Operating, exp/constr OP Cu, Au BHP Billiton, Rio Tinto, Mitsubishi, JX Nippon, Mitsub Materials 03,800 Ministro Hales Chile Construction OP Cu Codelco 03,500 Grasberg/Ertsberg Indonesia Operating, expansion/plans OP, UG Cu, Au FCX 03,175 El Teniente Chile Operating, exp/constr UG Cu, Mo Codelco 03,039 Resolution USA Prefeasibility UG Cu, Mo Rio Tinto, BHP Billiton Gr 03,000 Reko Diq Pakistan Feasibility OP Cu, Au Antofagasta, Barrick, Gov't. of Balochistan 03,000 Caserones Chile Construction OP Cu JX Nippon Mining, Mitsui Mining 03,000 Schaft Creek Canada Prefeasibility OP Cu, Au Copper Fox, Teck 02,892 Aynak Afghanistan Closed, reopen/feasibility OP Cu MCC, Jiangxi Copper 02,890 Sierra Gorda Chile Feasibility OP Cu, Mo KGHM, SMM 02,877 Los Azules Argentina Prefeasibility OP Cu, Au McEwen 02,851 Haquira Peru Conceptual OP, UG Cu First Quantum 02,824 Cumo USA Prefeasibility OP Cu, Mo Mosquito Cons 02,800 Frieda River Papua New Guinea Feasibility OP Cu, Au Xstrata 02,570 La Granja Peru Prefeasibility OP Cu Rio Tinto 02,500 Galeno Peru Prefeasibility OP Cu, Au Minmetals, Jiangxi Copper 02,500 Collahuasi Chile Operating, exp/feasib OP Cu, Mo Anglo American, Xstrata, Mitsui, JX Nippon Mining 02,400 Salobo Brazil Construction OP Cu, Au Vale 02,337 Quellaveco Peru Feasibility OP Cu, Mo Anglo American 02,200 Toromocho Peru Feasibility OP Cu, Mo Chinalco 02,150 Casino Canada Prefeasibility OP Cu, Au Western Copper 02,150 Agua Rica Argentina Feasibility OP Cu, Au Yamana 02,055 Aktogay Kazakhstan Feasibility OP Cu, Au Kazakhmys plc 02,000 Kamoa Congo (Dem Rep) Conceptual OP Cu Ivanhoe Capital 02,000 El Pachon Argentina Feasibility OP Cu, Mo Xstrata 01,900 Iron Ore Lac Otelnuk Canada Prefeasibility OP Fe Wugang, Adriana 13,032 Timir Russia Conceptual OP Fe Alrosa 10,000 Simandou Guinea Prefeasibility OP Fe Rio Tinto, Chinalco 10,000 Serra Sul Brazil Construction OP Fe Vale 08,039 Minas Rio [MMX] Brazil Construction OP Fe Anglo American 08,000 Zanaga Congo (Brazzav) Prefeasibility OP Fe Xstrata, ZIOC 07,545 Sino/Balmoral Central Australia Construction OP Fe Citic Pacific 06,207 Tonkolili Sierra Leone Operating, expansion/plans OP Fe African Minerals, Shandong I&S 05,000 Mbalam Cameroon Feasibility OP Fe Sundance Resources 04,686 Kalia Guinea Feasibility OP Fe Bellzone 04,300 Balmoral South Australia Feasibility OP Fe Clive Palmer 03,968 Jack Hills Australia Operating, exp/constr OP Fe Mitsubishi 03,809 KeMag Canada Feasibility OP Fe Tata Steel 03,800 Cape Lambert Australia Feasibility OP Fe MCC 03,765 Vetria Brazil Operating, expansion/plans OP Fe ALL, Vetorial, Triunfo 03,700 Cerro Ccopane Peru Conceptual OP Fe Cuervo Resources 03,500 Jimblebar Australia Operating, exp/constr OP Fe BHP Billiton 03,400 Pampa de Pongo Peru Conceptual UG Fe Nanjinzhao 03,280 Solomon Australia Construction OP Fe FMG 03,200 Extension Hill Australia Feasibility OP Fe Shougang 03,053 Nkout Cameroon Conceptual OP Fe Afferro Mining 03,000 Tonkolili Sierra Leone Operating, expansion/plans OP Fe African Minerals, Shandong I&S 03,000 Northern System [Carajas] Brazil Operating, exp/constr OP Fe Vale 02,968 Southdown Australia Feasibility OP Fe Grange, Sojitz Corp 02,936 Hawson Australia Prefeasibility OP Fe Carpentaria, BMG 02,887 Hopes Advance Canada Conceptual OP Fe Oceanic 02,850 West Pilbara - Mt. Stuart Australia Feasibility OP Fe AMCI, Aquila, Cullen 02,813 LabMag Canada Feasibility OP Fe Tata Steel 02,750 Nickel Weda Bay Indonesia Feasibility OP Ni, Co State of France, Mitsubishi 04,000 Koniambo New Caledonia Construction OP Ni Sud Pacifique, Xstrata 03,800 Voisey's Bay Canada Operating, exp/constr OP Ni, Cu Vale 03,600 Kalgoorlie [Heron] Australia Feasibility OP Ni, Co Heron Resources 03,574 Marlborough [Gladstone] Australia Feasibility OP Ni, Co QLD Nickel 03,400 Mindoro Philippines Feasibility OP Ni, Co Intex 02,455 Wingellina Australia Feasibility OP Ni, Co Metals X 02,269 Mount Margaret Australia Feasibility OP Ni, Co Glencore 02,035 Honeymoon Well Australia Feasibility OP Ni, Co Norilsk Nickel 01,506 Goongarrie Australia Prefeasibility OP Ni, Co Heron Resources 01,443 Araguaia [Lara] Brazil Conceptual OP Ni Teck 01,383 Ramu Papua New Guinea Construction OP Ni, Co MCC 01,370 Turnagain Canada Conceptual OP Ni, Co Hard Creek Ni 01,319 Rönnbäcken Sweden Prefeasibility OP Ni, Co IGE 01,260 Yerilla Australia Prefeasibility OP Ni, Co Heron Resources 01,200 Gag Island Indonesia Feasibility OP Ni, Co Antam 01,160 Dumont Canada Prefeasibility OP Ni, Co Royal Nickel 01,099 Talnakhskoye Russia Operating, expansion/plans OP, UG Ni, Cu Norilsk Nickel 01,000 Fenix Guatemala Feasibility OP Ni Solway 00,984 Mindoro Philippines Feasibility OP Ni, Co Intex 00,960

32 E&MJ • JANUARY 2013 www.e-mj.com PROJECT SURVEY 2013

Nonoc Philippines (Susp.) restart/feasibility OP Ni, Co Philnico 0,950 Nunavik Canada Conceptual OP Ni, Cu Jilin Haorong, Nearctic Nickel 0,950 Mayaniquel Guatemala Prefeasibility OP Ni, Co Anfield 0,946 Agata North Philippines Conceptual OP Ni, Co Mindoro Res 0,906 Canegrass Australia Prefeasibility OP Ni Nickelore 0,880 PGMs Bafokeng Styldrift South Africa Construction UG Pt, Pd Royal Bafokeng Nation, Anglo American 1,623 Ferguson Lake Canada Prefeasibility OP, UG Pd, Cu Starfield 1,500 Twickenham South Africa Operating, expansion/plans UG Pt, Pd Anglo American 1,248 Bakubung South Africa Construction UG Pt, Pd JNMC, Anglo American 1,087 Sheba's Ridge South Africa Feasibility OP Pt, Pd Aquarius, Anglo American, State of South Africa 0,972 Afplats South Africa Feasibility UG Pt, Pd Implats 0,741 Sedibelo West South Africa Feasibility OP Pt, Pd Pallinghurst Res 0,700 Garatau South Africa Feasibility UG Pt, Pd Nkwe 0,659 Akanani South Africa Conceptual UG Pt, Pd Lonmin, Shanduka 0,650 Fedorova Tundra Russia Feasibility UG Pd, Pt Barrick 0,640 Impala South Africa Operating, exp/constr UG Pt, Pd Implats 0,625 Impala South Africa Operating, exp/constr UG Pt, Pd Implats 0,518 Booysendal South Africa Construction UG Pt, Pd Northam 0,482 Western Bushveld Project 1 South Africa Feasibility UG Pt, Pd PGM Ltd, JNMC, Anglo American 0,443 Arctic Finland Prefeasibility OP Pd, Pt Gold Fields 0,429 Silver Konimansuri Kalon Tadjikistan Prefeasibility UG Ag, Pb State of Tadjikistan 2,000 Navidad Argentina Prefeasibility OP Ag, Pb Pan Am Silver 0,760 Pitarrilla Mexico Feasibility OP, UG Ag Silver Standard 0,741 Cordero Mexico Conceptual OP Ag, Pb Levon Resources 0,647 Corani Peru Feasibility OP Ag, Pb Bear Creek Mg 0,574 Brucejack Canada Prefeasibility OP Ag, Au Silver Standard 0,436 Diamonds Venetia South Africa Operating, exp/feasib OP Dia Anglo American, Ponahalo 2,100 Argyle Australia Operating, exp/constr OP Dia Rio Tinto 2,100 Star Canada Feasibility OP Dia Shore Gold 1,939 Verkhotina/Grib Russia Feasibility OP Dia Lukoil-Northwest 0,850 Renard Canada Feasibility OP, UG Dia Stornoway Diam 0,810 Cullinan South Africa Operating, expansion/plans UG Dia Petra Diamonds 0,632 Gahcho Kue Canada Feasibility OP Dia Anglo American, Mountain Prov 0,556 Jwaneng Botswana Operating, exp/feasib OP Dia Anglo American, State of Botswana 0,500 Ekati Canada Operating, expansion/plans OP, UG Dia BHP Billiton 0,323 Letseng Lesotho Operating, exp/feasib OP Dia Gem Diamonds, State of Lesotho 0,280 Liqhobong [Main] Lesotho Feasibility OP Dia Firestone Diamon, State of Lesotho 0,167 Uranium Viken Sweden Prefeasibility OP U, V Cont Precious 3,734 Elkonskoye Russia Conceptual ISL U Atomenergoprom OJSC 3,600 Imouraren Niger Construction ISL U Areva, State of Niger, KEPCO 1,553 Kvanefjeld Greenland Feasibility OP U, REO GGG 1,534 Rossing South [Husab] Namibia Prefeasibility OP U CGNPC, CADFund 1,480 Khiagdinskoye Russia Operating, expansion/plans ISL U Atomenergoprom OJSC 1,119 Cigar Lake Canada Construction UG U Cameco, Areva, Idemitsu, Tepco 1,111 Michelin Canada Prefeasibility OP, UG U Paladin 0,994 Etango Namibia Feasibility OP U Bannerman Resources 0,870 Roughrider Canada Conceptual OP U Rio Tinto 0,567 Eco Ridge Canada Closed, reopen/plans UG U, REO Pele Mtn Resources 0,563 Zinc Mehdiabad Iran Feasibility OP Zn, Pb State of Iran, UCL Resources 1,300 Dugald River Australia Feasibility UG Zn, Pb Minmetals 1,250 Ozernoye Russia Construction OP Zn, Pb IFC Metropol 0,948 Admiral Bay Australia Prefeasibility UG Zn, Pb Kagara Ltd 0,837 Selwyn Canada Conceptual OP Zn, Pb Selwyn Resources, Yunnan Chihong 0,672 Bahuerachi Mexico Conceptual OP Zn, Ag JNMC 0,619 Garpenberg Sweden Operating, expansion/plans UG Zn, Ag Boliden AB 0,600 Izok Lake Canada Feasibility OP Zn, Pb Minmetals 0,539 Citronen Greenland Feasibility UG Zn, Pb Nyrstar 0,502 Terrazas Mexico Prefeasibility OP Zn, Cu Andromeda 0,500 Hilarion Peru Prefeasibility UG Zn, Pb Votorantim 0,500 Asmara Gold Project Eritrea Prefeasibility OP Zn, Cu Sunridge Gold 0,489 Oued Amizour Algeria Feasibility UG Zn, Pb Terramin Aust, State of Algeria 0,413 Hackett River Canada Prefeasibility OP, UG Zn, Ag Xstrata 0,409 McArthur River Australia Operating, exp/constr OP Zn, Pb Xstrata 0,366 Accha Peru Conceptual OP Zn, Pb Zincore 0,351 Tulsequah Chief Canada Prefeasibility UG Zn, Ag Chieftain Metals 0,313 George Fisher North Australia Operating, exp/feasib UG Zn, Pb Xstrata 0,252 Zhairem Dalnezapadny Kazakhstan (Susp.) restart/plans UG Zn, Pb ENRC plc 0,250 Lombador Portugal Feasibility UG Zn Lundin Mining 0,228 Yukon Canada Prefeasibility OP, UG Zn Overland Resources 0,227 Dairi Indonesia Construction UG Zn, Pb Bumi plc, Antam 0,227 www.e-mj.com JANUARY 2013 • E&MJ 33 MINE DESIGN Tools to Assist in Planning and Design As mining companies face rising costs and volatile commodity markets, making the right design decisions is a must. E&MJ looks at worrying capex trends, and some of the software available to help keep costs under control.

By Simon Walker, European Editor

Optimizing resource utilization has In consequence, mine design sys- The development of mine design always been a challenge for mine tems have to be capable of addressing software, which has been on-going designers, with nature still eminently sudden amendments as well as provid- since the first systems such as Data- capable of throwing up surprises that ing the overall framework for getting mine were introduced over 30 years can both delight or confound. Brown- the most out of a given deposit, in both ago, has resulted in a strong supply field exploration is often the key to the tonnage and financial terms. Soviet- base of competitive concepts. Not sur- former—take Neves Corvo in Portugal or style planning focused on the former at prisingly, there has been a degree of Garpenberg in Sweden as examples the expense of the latter, while exam- consolidation within the mainstream here—while unforeseen stress regimes, ples abound of operations that have players in recent years, as well as acqui- water or weak strata are often the cause been run exclusively on financial rails sitions of suppliers by larger companies of forced changes in plan. Cameco’s and have closed early, only to find new who have realized that the mining-sec- flood-related tribulations at Cigar Lake leases on life under a different operat- tor market is no longer a niche. Such are a case in point. ing regime. moves can, of course, bring significant benefits in terms of having greater development resources available, as well as the potential to merge software systems with different focuses into more comprehensive packages. As with machinery manufacturers, the goal is often to be able to meet all of a cus- tomer’s needs from one source, rather than risking part of the business (and its potential for long-term support) going elsewhere. The Cost of Making Wrong Decisions Looking first at greenfield project development, one of the most obvious trends of the past 10 years has been the rapid escalation in capex costs that companies worldwide have had to face. One of the first examples to come to widespread notice was BHP Billiton’s Ravensthorpe nickel laterite project in Western Australia, where the initial $1 billion cost more than doubled between 2005 and 2008. The mine failed, and BHP sold it to First Quantum Minerals for $340 million in 2010. First Quantum in turn spent some $370 million on re-engineering it and bringing it back into production, which itself was nearly double the com- pany’s original $190 million re-engi- neering estimate. The latest release of GemcomÕs MineSched software, version 8.0, provides a number of speed and schedule-visu- In point of fact, cost overruns are alization enhancements that allow users to quickly generate short- (top) and long-term (bottom) schedules nec- more of the rule than the exception. In essary to meet a mineÕs development and production targets. November, the management consult-

34 E&MJ • JANUARY 2013 www.e-mj.com MINE DESIGN ants Accenture published a report titled is an issue in its own right), it is diffi- of acquisitions seems to have started in Achieving superior delivery of capital cult to understand how projects can fall April 2010 when CAE bought out The projects, which makes alarming reading foul of factors as obvious as ‘unconsid- Datamine Group. It followed this in if for no other reason that it highlights ered regulatory requirements’ and January 2011 by adding Century the scale of the overrun problem. ‘insufficient detail during the planning Systems Technologies to its portfolio, The survey that provided the founda- stage.’ Those, frankly, are fundamen- thereby boosting its capabilities in geo- tion for the report sought the views of tals that any company considering a logical data-management and gover- 31 senior industry respondents with major investment should be capable of nance systems. responsibility for capital projects addressing, and it begs questions that Shortly afterward, Switzerland- around the world. Of these, 22 respon- shareholders should be posing if they based ABB acquired the Australian dents were involved with mining pro- feel that their interests (and invest- mining-software developer, Mincom, jects, and the other nine with metals. ments) are not be husbanded properly. bundling it into its existing software According to Accenture, “less than a Still, there are some companies that systems unit as Ventyx. During 2012, third (30%) of the respondents report- can and do deliver projects on schedule meanwhile, the major change came ed staying within 25% of approved and budget, even faced with the pres- with the French 3-D specialist, budgets for all projects, and less than a sures of skilled-labor shortages and ris- Dassault Systèmes’, $360-million pur- fifth (17%) said they completed all ing equipment costs. According to chase of Vancouver-based Gemcom, projects within a 10% budget range.” Accenture, a number of common attrib- now part of Dassault’s Geovia brand. At Put in financial terms, the implica- utes identify them: the time, its CEO Rick Moignard tions—as well as the sums involved— • They make fewer revisions to the explained the potential benefits of the are huge. Accenture estimates that approved schedule; move: “Advanced technologies in 3-D capex for metals and mining projects • They make significantly fewer modelling and simulation will not only will have been more than $140 billion changes during construction; and enable engineers and geologists to last year, with the prospect of $1 trillion • They have greater confidence in their model and visualize resources but also to $1.5 trillion being spent between own culture in delivering projects. improve sustainable mine productivi- 2011 and 2025. “With $100–$200 bil- In addition, these companies make ty,” he said. lion in annual spend, the impact of pro- wider use of analytics, including key Orebody modelling led the way in ject delivery overruns on individual com- performance indicators, and have bet- bringing computerization into mine panies and the industry as a whole is ter access to performance data across design. Today’s mine engineers have a enormous,” the company commented. multiple dimensions, such as timeli- plethora of competing products to “When asked what typically causes ness, accuracy, range and source. assist them in interpreting geological delays in project schedules, survey In its report, Accenture defined five data and optimizing resource extrac- respondents cited the availability of tal- key recommendations for effective pro- tion. Some software focuses specifical- ent (57%), new or unconsidered regula- ject delivery: ly on geological resource data; other tory requirements (45%) and insuffi- • Establish strong project governance packages address surface-mine layouts; cient detail during the planning stage and risk-management tools; yet more take specific mining methods (42%),” Accenture added, while point- • Proactively manage external stake- such as block caving, providing the ing out that mining projects are often holders’ increasing expectations for design department with the tools to more complex than metals projects, so sustainability; model the resource and apply ‘what-if’ are more likely to experience longer • Optimize scarce talent through port- tests to determine the effects of pro- delays and higher cost overruns. In folio management, organizational duction schedule changes or commodi- some ways, though, that seems count- flexibility and training; ty-price movements on the operation’s er-intuitive since smelter and metallur- • Integrate information systems among viability and resource utilization. gy projects in general can be highly capital project players; and In the remainder of this article, complex and, in consequence, risk • Accelerate operational readiness. E&MJ looks at some of the mine-design budgets being broken. The high capex “Addressing cost and time objectives software packages that are currently requirements for today’s nickel-laterite of capital projects is a prime opportunity available. There are, of course, many treatment plants is a case in point, to achieve competitive advantage,” other providers; the common thread relying as they do on autoclaves and Accenture concluded. “Ideally, capital here is that each of the suppliers men- sophisticated hydrometallurgy. projects should be run as high-stakes tioned was among those that exhibited businesses with targeted objectives, clear at last year’s MINExpo. Leading Attributes delivery strategies and careful monitoring and Recommendations to track progress toward high perform- RungePincockMinarco However, that is by far from being the ance.” And this, of course, is where good In 2005, the Australian software devel- whole picture, since a host of other fac- design has a major part to play. oper, Runge, took the unexpected step tors can come into play. Looking purely of buying out U.S.-based mining con- at the key reasons for cost overruns, Sector Movements sultants, Pincock, Allen & Holt, with and setting aside the question of Among consolidations that have recent- the subsequent addition of Minarco- whether or not a company can attract ly taken place within the mine-design MineConsult boosting its consultancy competent staff and contractors (which software companies, the current wave arm. In December, the company, which www.e-mj.com JANUARY 2013 • E&MJ 35 MINE DESIGN today claims to be the world’s largest mine planning application, which will At MINExpo, Micromine presented independent group of mining technical launch in early 2013. its Coal Measure software which, it experts, announced a change of name Whittle 4.5, for open-pit mine plan- said, is coal-industry specific in terms to RungePincockMinarco (RPM). ning, now has the capability of produc- of terminology, features and functional- The company’s software suite in- ing more practical mine plans through ity. The suite combines the data man- cludes FRACSIS for visualizing geo- the use of a new mining direction fea- agement features and benefits of logical data, XPAC and XACT for ture and alternative pushback creation Micromine’s Geobank geological data- mine scheduling, TALPAC, HAULNET, capabilities, while MineSched 8.0 pro- handling software, integrating coal DRAGSIM and FACETS for simulating vides users with much faster response database management with three- loading, haulage, dragline and longwall times, with production scheduling up to dimensional geological modelling, grid- face operations, and XERAS for finan- 50-times faster and development ding, seam block modelling, resource cial analysis. At MINExpo 2012, it scheduling 10-times faster than before, categorization, resource reporting, pit released an update for its TALPAC according to Geovia. optimization, pit design and plotting. haulage and loading software which, it The upgrade to its InSite mine-pro- The software is also suitable for other says, is used by mining operations duction management software, version stratified resources, such as tin, miner- world-wide to evaluate the performance 4.2, has improved reporting and analy- al sands, uranium and potash, as well of mixed fleets. sis capabilities, the company adds, as those with complex tectonics or mul- According to RPM, it now has a helping to give users a closer view of tiple splitting and merging of seams. database of more than 500 trucks and material balances and stockpile man- 400 loaders, allowing virtually any agement for faster reconciliation and Post-mining Design from truck and loader combination to be end-of-the-month processes. Carlson Software simulated and evaluated. The up- With its center in Maysville, Kentucky, date includes Caterpillar’s Unit Rig Micromine 2013 USA, Carlson Software draws its mine MT4400D AC and 777G trucks, Available Soon design credentials from its background Komatsu’s 750E (AC) truck and From its headquarters in Western in surveying, and now offers a complete Hitachi’s EH 5000AC-3 truck, all of Australia, Micromine provided visitors software suite that covers data collec- which were launched at MINExpo, to its MINExpo exhibit with a preview of tion, surveying, engineering design and together with newly introduced or the latest edition of its namesake explo- drafting, mine planning and modelling, upgraded equipment from other manu- ration and mine design software. construction estimation and machine facturers such as Liebherr, Bell, Volvo, Micromine 2013 is scheduled for control. The company claims to be the Belaz and P&H. release early in the year, having still largest provider of design software for been at the development stage at the mines in the U.S., with increasing Geovia: A Raft of Upgrades Las Vegas show. applications in other countries. At MINExpo, Dassault Systèmes’ sub- The company reports that new fea- From its initial focus on U.S. coal sidiary Gemcom (now Geovia) intro- tures within Micromine 2013 will mining, Carlson Mining software is now duced updates to its Surpac, GEMS, include capabilities for rotated block used in designing operations for miner- InSite, Whittle and MineSched mining- models, with one, two or three-dimen- als such limestone, trona, clay, phos- industry applications. “With the mining sional rotations being supported. phate and other sedimentary deposits, industry facing higher costs and more Orientating the blocks to match the ore- with routines for block modelling gold, pressure on commodity prices, it is body means they are a better fit with silver, copper, nickel, iron and other imperative that they can unlock addi- reality, producing a smaller model and orebodies having been added to its tional efficiencies and economic value saving processing time and disc space, capabilities. The company also offers a from their mining operations,” said Micromine says. basic version of its mining package, Moignard. “The new features will pro- The new version will also contain allowing access to computerized design vide additional tools and functionality tools to simplify the creation of seam for operators who only need a low-cost for mining professionals to better quan- block models, including splits, plies, tool for simple mining practices. tify, plan and manage extraction of overburden and interburden, even in Aside from mine operating design, their orebodies.” stratigraphically complex areas. The Carlson said its Natural Regrade soft- Surpac 6.4 (geology and mine-plan- company says that Micromine’s strati- ware is unique as a tool for reclaiming ning software) will be available in the graphic modelling tools honor the origi- mine sites, regrading surface mines first quarter of 2013, and has a new nal data, with smart tools that handle back to natural land-forms. Natural integrated Dynamic Shells tool for sig- seam pinching and missing holes, pro- Regrade provides an affordable and nificant time savings when initially ducing a geologically correct model. natural way to achieve sustainability, evaluating deposits, Geovia said. It also There will also be a range of new with its GeoFluv fluvial geomorphic has increased memory handling for features and improved functionality for design method bringing back natural faster working with very large datasets, Vizex in Micromine 2013, including landforms while establishing stability and a new stereoscopic 3-D visualiza- seam correlation, annotation layers, against erosion and enhancing water tion capability. The company is also seismic SEG-Y, drillhole solid, color/ quality. The software enables users to introducing a Dynamic Shells tool for hatch/symbol sets, line styles and build with on-site materials, save costs its GEMS 6.5 collaborative geology and stereo 3-D. on material moving, reclaim steep

36 E&MJ • JANUARY 2013 www.e-mj.com MINE DESIGN slopes in a stable way, handle water and sediment naturally, and produce a self-maintaining, natural-looking result. New features include the ability to visu- alize vegetation growth in 3-D at vari- ous stages throughout reclamation. Mintec Adds New Plug-ins Mintec took the opportunity afforded by MINExpo to launch MineSight 7.5 which, it said, provides better visualiza- tion and compatibility between products. Version 7.5 includes improved versions of MineSight 3-D, Schedule Optimizer, Torque, Basis and Data Analyst. The Tucson, Arizona, USA-based company followed this in December with the 2013 update to MineSight, Mintec’s new activity and resource-based scheduler, MineSight Atlas, is one of several products scheduled for version 7.6, which features new plug- release in 2013. ins such as a surface resloping tool for MineSight 3-D’s engineering open-pit Digline Generator, used to assign a min- drillhole, polygon, point and fault-plane CAD. This allows engineers to reduce a ing sequence for cuts on every individ- data, and then interpret new geological shape, such as a waste dump, to a ual bench of each phase. scenarios. MineSight Performance desired final slope while balancing cut Mintec reports it also has four new Manager is used to assess and report on and fill requirements. MS3D also products scheduled for release early mining performance in near real time, includes plug-ins for auto cut genera- this year. as well as providing analytical tools that tion, used to create cuts starting from MineSight Implicit Modeler is a can answer why something has hap- polygons, polylines or solids, and mathematical tool for geologists to take pened. MineSight Atlas is a complete

www.e-mj.com JANUARY 2013 • E&MJ 37 MINE DESIGN package for manual scheduling and allows users to do resource modelling, of cost and productivity throughout the stockpile blending, while the company mine planning and reconciliation in the entire project lifecycle,” the companies describes MineSight Stope as being not same environment. said at the time, while pointing out that only a design tool, but also a very quick by integrating the two products in an first-pass scheduling tool for under- Hard Dollar: Counting Cash industry first, they had provided users ground engineers to look at alternatives Where it Counts with the opportunity to merge mine for stope locations. As noted earlier, plenty of mining com- design, scheduling, financial and pro- panies are feeling the combined effects ductivity modelling for both study and Maptek Moves Off-shore of soaring capex costs, upward pres- operational environments. Australia’s Maptek released the latest sures on operating costs and uncertain- According to Hard Dollar, PCM can version of its Vulcan geological model- ties over commodity markets. In a pres- reduce the time it takes to build, plan, ling and mine planning software at the entation given in April last year, Scotts- deliver and forecast cost and productiv- end of last year. The company noted dale, Arizona-based Hard Dollar com- ity by more than 300%, while increas- that a customer request for generating mented that “mining companies must ing profits by 15% or more. strategic pit and dump designs led to take measures to manage cash flow and the development of a new rapid pit conserve spending, while ensuring that CAE Moves Deeper design tool, which has been released in projects stay on schedule.” into Mining Vulcan 8.2. Mine planning engineers The company went on to point out A relatively recent entrant into the can quickly create mid-bench based that controlling costs and managing mine-design software market, in the designs, it said, as well as generating mining resources requires a robust past CAE has perhaps been better phases and reserve reports, and can tool, suggesting that its Project Cost known world-wide for its simulator and evaluate multiple designs in the same Management (PCM) package removes training technology. However, the com- amount of time previously needed for a common hurdles from cost controls, pany’s purchases of Datamine and single design. allowing mining companies to make Century Systems Technologies has “The new tool helps engineers to project decisions that easily avoid cost increased its interest in the mining sec- quickly create and analyze different overruns. tor, such that it now has a dedicated pit designs, allowing them to look at While not specifically a mine design business area, CAE Mining. many more alternatives before pro- package, PCM provides a way of pro- CAE Mining supplies software tools ducing a final design,” said Steve ducing detailed, timely project status for underground mine planning, includ- Uecker, Maptek’s Vulcan client experi- data, the company states. These data ing Mine2-4-D and its successor, CAE ence manager. immediately show what was estimated Studio 5-D Planner. The company’s Maptek reports that AuruMar, the and budgeted, versus actual project Mineable Reserves Optimizer (MRO) South African-based joint venture performance. Through customizable package determines the optimal mining established between AngloGold Ashanti daily reports, an entire project overview envelopes within which stopes should and De Beers to evaluate off-shore min- is displayed, clearly showing variances be designed, and can be used for pre- eral resources, has adapted Vulcan 3-D and forecasts at completion. liminary underground reserve estima- modelling software for its exploration In July 2012, Hard Dollar teamed tion. The Mineable Shape Optimizer on 26 mining leases off-shore Nome, up with Canadian company CAE to (MSO) automatically produces opti- Alaska. Vulcan GeoModeller provides a include its PCM in CAE Mining’s mine mized stope designs that maximize the complete set of tools for exploration design, planning and scheduling soft- value of recovered ore within the given and mining geologists, and can be used ware suite. “Hard Dollar’s integration geometry and design constraints. It on both stratigraphic and non-strati- with the new CAE Studio 5-D Planner supports massive, sub-vertical and flat graphic deposits. The Vulcan platform provides customers transparent delivery horizontal deposits and can quickly generate individual stope designs with- in a resource model, CAE Mining says. In terms of access design, Mine Layout Optimizer (MLO) produces opti- mal decline designs to satisfy access requirements and design criteria. The company suggests that this can be valu- able with rapid engineering during the analysis stages of a project, as well later once designs become more detailed. Good Designs Save Time and Money With so much pressure on exploration and mining companies to bring projects Maptek Vulcan 8.2 was released to customers in November 2012. Standout features include new rapid pit design on stream in a cost-effective, timely tools and improved grade estimation. manner, while working in increasingly

38 E&MJ • JANUARY 2013 www.e-mj.com MINE DESIGN remote and often logistically challeng- ing environments, it is hardly surprising that there is a strong market for com- prehensive software tools that can take some of the risk out of the design process. Each of the major suppliers has its own list of ‘satisfied customers’, working in locations from Nevada to Papua New Guinea, and from Australia to Appalachia. It is, of course, sensible to remem- ber that all of these software packages rely on having accurate data to work with, so it is essential that users ensure that their input information is not only clean, but is as accurate as can be achieved. After all, the old maxim ‘garbage-in, garbage-out’ applies to design software as much as it does to any other data-reliant process. Hard Dollar says its Project Cost Management (PCM) package enables mining companies to make project deci- In common with other sectors of sions that avoid cost overruns. mining and exploration technology, there appears to have been a steady ny has an over-riding position in the Shareholders should always be able trend toward consolidation within soft- wider world market. Software develop- to see where a project’s design has ware suppliers, usually with the aim of ment and computing power have gone not met the mark. Whether they can amalgamating complementary prod- hand-in-hand here as elsewhere in the do anything about it is, of course, ucts. Most suppliers claim dominance industry, with 64-bit technology becom- another matter. Perhaps the best thing in one particular aspect or another, ing mainstream where large amounts of about good design is that it just keeps although it is clear that no one compa- data have to be handled. paying dividends.

www.e-mj.com JANUARY 2013 • E&MJ 39 DIGITAL MAPPING Exploring the Dimensions of Digital Solutions in Mine Mapping Apart from advantages in speed of data collection and analysis provided by digital technology, perhaps its greatest benefit is this: even as mine projects become more complex, the tools needed to map them are getting easier to use

By Russell A. Carter, Managing Editor

For most people, ‘mining’ would probably planimetric and topographic mapping, There’s a lot going on beneath the not be a first choice to link with ‘digital’ in orthophotography, enterprise GIS and broad, quiet surface of GNSS, as more than a word-association quiz. Even for a mine remote sensing. At the bottom of that tool- 3,500 attendees at the sixth Trimble engineer or survey technician working on box lies one of the pioneering technologies Dimensions conference learned during the an active bench in a big open-pit mine, that started the digital transition: Global annual three-day event, held in early surrounded by noise, dust, vibration and Positioning System-based (GPS) navigation. November 2012 in Las Vegas. Dimensions possibly enduring extreme heat or cold, the GPS is one of many disruptive technolo- is designed to showcase the latest develop- digital domain can seem very far away. gies that, upon arrival, typically alter many ments in Trimble Navigation Ltd.’s position- But it’s clear that the technology of sur- of the fundamental ways in which individu- ing technology for the construction, mining, face mine design, planning and mapping is als and businesses deal with everyday situ- fleet operations, utility and other industrial fast becoming a largely digital enterprise, ations. GPS, like many of its disruptive rel- sectors. Although the conference is tightly driven by electronic and software innova- atives, has been absorbed into the fabric of focused on GNSS applications, the scope of tions that are permanently changing what our lives, becoming a common personal tool the Sunnyvale, California-based company’s was once an analog, down-in-the-dirt indus- for navigation and location-based social net- offerings extends to the use of optics, try into one that routinely adopts high-tech working as well as an essential service that lasers, unmanned aerial systems (UAS) and digital tools from other advanced sectors lies beneath the surface of countless indus- other technologies in mining activities that such as military, communications and trial activities, including many crucial appli- span everything from exploration surveying process automation, to name just a few. cations in mining. And, in the process, it’s to haul truck dispatch. As mineral producers come under become part of a larger family called GNSS A number of Trimble’s mining solutions increasingly severe economic, regulatory (Global Navigation Satellite System), which have been developed in collaborative and social pressures, their need to quickly is now the generic name for satellite navi- efforts involving its various subsidiaries, gather, analyze and present project-critical gation systems that provide autonomous and business partners through a technolo- geological and geographical data has inten- geo-spatial positioning with global coverage. gy alliance with Caterpillar—and, of sified (See Tools to Assist in Planning and GNSS includes the United States’ GPS, course, Trimble isn’t the only player in the Design, p. 34) Consequently, the industry’s Russia’s GLONASS, and Europe’s Galileo game; Leica Geosystems Mining, Maptek I- mapping and design toolbox has expanded systems. There will be an estimated 90 Site and other well-known technology over the years to include digital aerial GNSS satellites in orbit by 2015, and more providers offer various competing or com- imagery, LiDAR, digital elevation models, than 120 satellites by 2020. plementary solutions in a market sector that is evolving at quantum speed. At this year’s conference keynote pres- entation, Trimble CEO and President Steven W. Berglund described how the scope of GNSS applications is changing, and used examples of recent business developments at Trimble to illustrate his point. Technical advances have enabled GNSS product development to shift from a task-oriented to a process-oriented focus, and with the tra- ditional focus on simple data collection from geospatial sources shifting to increas- ingly sophisticated data-analysis capabili- ties, Berglund said Trimble is moving ahead in this area to take advantage of opportuni- ties offered by improvements in: • Sensor technology—providing a higher Advances in data collection and analysis can make mine plans ‘living documents,’ with changes and progress updated level of integration throughout a moni- in real time and available to all concerned. tored system.

40 E&MJ • JANUARY 2013 www.e-mj.com DIGITAL MAPPING

• Processing power—allowing higher vol- umes of data collection in real- or near real-time. • Data storage—Massive datasets enable ‘big data’ analysis benefits. • Connectivity—Migration to ‘the cloud’ reduces computing-capacity demands on enterprises. • Visualization—Data-analysis presenta- tion is moving away from traditional tables and charts, toward more refined and meaningful formats. The continued growth in volume and speed of data collection, concluded Berglund, will steadily redefine traditional methods of GNSS-based data usage in the future. But, for mine staffers who entered the industry at a point when data collec- tion, analysis and visualization for a specif- Trimble’s xFill technology can provide highly accurate interim positioning information when normal GNSS corrections are blocked. ic task often took days or even weeks to process—compared with today’s results in for these tasks that are user-friendly, large- survey pole is plumb. Simultaneously, pole minutes or less—the future is already here. ly foolproof and sufficiently advanced to tilt angle values are stored for every point provide information that can easily be collected to ensure data traceability. Boots on the Ground assimilated into modern data analysis and New, easier-to-use tools such as this, Characterizing an active surface mine as a reporting software systems. combined with advanced data-logging soft- “constantly evolving construction site,” with For example, last October Trimble intro- ware, create opportunities for other mine the mine model being updated as the opera- duced its next-generation ultra-light R10 work groups to perform non-critical tasks tion’s economic variables change, Michael receiver, featuring a new HD-GNSS process- that were traditionally assigned to the sur- Maier, mining technology engineer at ing engine that is claimed to provide more vey department, according to Maier. For SITECH Southwest / Empire Southwest accurate assessment of error estimates than example, personnel working on pipe instal- Caterpillar in Mesa, Arizona, noted in his traditional engines. Measurements collected lation and routing at a large Southwestern Dimensions presentation that one of the with Trimble HD-GNSS, according to the U.S. copper SX-EW operation used the more welcome aspects of higher tech in min- company, are precision-based and surveyors R10 receiver along with Trimble’s SCS900 ing is that, even as the projects become more can collect data in challenging environ- Site Controller software to map leach pad complex, the tools needed to design and ments where they may have been unable to infrastructure and piping without surveyor measure them are becoming easier to use. collect data before. Reduced convergence assistance. “Who better to locate the pipes The logical product of the evolving mine times and instantaneous point measure- than the pipefitters?” he asked. site, in the era of sophisticated machine- ments allow surveyors to start measuring This is an example of one step in a guidance systems and high-speed data col- sooner and up to 60% faster. Supporting process that begins with incorporating use- lection and analysis, is a mine plan that 440 channels, the R10’s technology is ful, precision survey-based civil engineer- can be regarded as a living document, pre- designed to enable consistent, reliable ing tools and techniques into the mine- senting changes and progress to the opera- tracking of available satellite signals for both design realm, and which eventually will tions and management staff in near real existing and future GNSS constellations. lead to what Maier calls the ‘3-D mine’—a time, said Maier. The expanding presence The new receiver also offers Trimble’s connected site that allows data from many of in-cab data displays showing a con- xFill technology, which employs a global net- sources to be universally shared to opti- stantly updated mining plan breaks down work of Trimble GNSS reference stations to mize mine performance. In the precision- communication barriers among work deliver position information via geostationary surveyed 3-D mine, for example, all terrain groups and essentially turns equipment satellites. xFill, according to Trimble, seam- surfaces from the pit floor to the stockpiles operators into ‘mobile surveyors’—which, lessly fills in for RTK or VRS corrections in will be designed to flow and control runoff. in turn, allows traditional mine surveyors to the event of a temporary connection failure Road design characteristics such as turn focus more on design work, consult with such as a radio dead spot. As of late 2012, radius and incline will be tailored to fit the operators about those designs and perform Trimble xFill coverage included most of capabilities of the haulage fleet—and in quality checks on other people’s work. Europe, Russia, the Commonwealth of this fully ‘connected’ mine, haulage equip- Although a number of available tech- Independent States (CIS), Africa, Asia and ment will achieve high availability because nologies have been developed to minimize Australasia, as well as most of North America it’s running on surfaces designed for maxi- the necessity of having surveyors walk the and all of South and Central America. mum efficiency. The mine plan will change pit or scramble across rough terrain, occa- Trimble’s SurePoint technology con- dynamically, taking advantage of the 3-D sions still arise that require conventional, stantly monitors pole tilt and prevents users mine’s comprehensive data-sharing capa- on-the-ground survey techniques. The goal from collecting erroneous information by bilities to ensure everyone is looking at the of Trimble, and others, is to provide tools only allowing data to be stored when the most up-to-date version. www.e-mj.com JANUARY 2013 • E&MJ 41 DIGITAL MAPPING

This scenario is very much within the top software for digital image processing and In particular, Bartlett noted, Newmont grasp of today’s mine operators, said analysis. The ultra-light X100 consists of an was interested in using a UAS for assessing Maier, although maximum benefit will be airframe; an integrated GPS, inertial system and mapping possible drill roads and pads, derived at sites that have been developed and radio packaged as an ‘eBox’; a 10- evaluating facility area-footprint characteris- from the start with peer-to-peer 3-D capa- megapixel camera; and battery. Using a tics, and recording prior-disturbance details bilities and maximum connectivity as tablet computer, users can define a flight on land tracts. In a recent field test, Bartlett’s basic operating strategies. plan that is automated from launch to land- crew used the Gatewing system to provide ing. Terrain features are recorded during par- digital imagery of a rugged jungle area near An Eye in the Sky allel flight paths by consecutive, overlapping one of Newmont’s African operations. Over An alternative to terrestrial surveying and camera shots. A ground control station (GCS) the course of 36 flights—which required traditional aerophotogrammetry involves is used to monitor the mission and allows an three airframe replacements due to damage the use of unmanned aerial systems on-site image quality check. In addition, the from landings—the crew gained experience (UAS)—small, remote-controlled airframes GCS provides the operator with the option to and insight into the benefits and drawbacks that can be programmed to fly in precise intervene and abort the flight if needed. The of UAS operations. These include: patterns over medium-sized areas, collect- image set consists of a number of digital • Careful attention to takeoff and landing ing raw digital images of the terrain which images that are tagged with GPS coordinates. sites—Because the UAS requires its can then be processed into high-quality The Stretchout desktop software auto- own ground-based launcher, takeoff orthophotos and digital terrain models mates processing of raw images taken in sites need to be reasonably unobstruct- (DTMs). The key technological advances flight to deliver georeferenced orthophotos ed; and, as landings are basically con- driving the rising popularity of these sys- and accurate DSM. As an alternative to the trolled crashes, certain kinds of ground tems include greater miniaturization of desktop software, users can upload images surfaces and vegetation (short to medi- components, flight automation and better to Gatewing’s cloud solution, which auto- um grass, for example) are better than integration with image-processing software. matically processes the images based on others (bare dirt). In addition, selecting Although UAS are not appropriate as a the users’ requirements. Within hours, different takeoff and landing sites may replacement for all applications that typi- users can download their orthophotos and confuse the system and result in crashes. cally would use conventional imaging or DTMs from the cloud server. • Awareness of atmospheric conditions surveying methods, they can provide highly The Gatewing UAS comes in a large suit- and ground elevation changes—Although useful data in areas that may previously case-sized kit which includes the 2-kg (4.4- a UAS can fly below cloud cover that have been accessible only at higher cost lb), 100-cm-wingspan airframes and its would prevent a conventional manned and involving longer project-planning eBox, an extra body, launcher, ground con- photogrammetry flight, because of its cycles. In suitable applications, UAS-based trol station, modem, calibrated digital cam- light weight it is very sensitive to air den- imagery can provide significant time sav- era, lithium polymer batteries and charger, sity, which can affect takeoff and landing ings over conventional methods, along with tracker tool, and spare parts and acces- performance at higher elevations; and worker and asset safety gained by eliminat- sories, along with the Stretchout software. thermal currents that can affect its flight ing human involvement in the actual flight. Mark Bartlett, director of open-pit min- path. And, because the number of pho- Although extremely lightweight UAS are ing innovation at Newmont Mining Corp., tos the system will take depends on its largely restricted to flights in good weather told a Dimensions conference audience distance from the ground, significant conditions, the slightly larger (2+ kg) air- that he began screening several types of changes in surface elevation along the frames typically used in mining applica- UAS about a year ago, looking for an flight path can cause it to take fewer tions can fly in almost any type of weather answer to the question “Is this an applica- photos than expected in some cases, and still provide 2–3 cm ground sample tion we can use in mining?” The Gatewing resulting in coverage gaps. resolution accuracy, according to experts. product, he explained, appeared capable • Data collection and processing—UAS To gain a foothold in this sector, Trimble of filling a niche in the company’s field and flights generate large files, so some fore- acquired UAS vendor Gatewing of Gent, mine-site surveying activities, and offered thought should be given to where these Belgium, in April 2012. Gatewing’s products some unique capabilities when compared files will be stored and how they will be include the X100 UAS and Stretchout desk- with conventional methods. processed. Because the processing is highly graphics-intensive, Bartlett sug- gested using a powerful computer with high-end graphics capabilities—possibly, a gaming computer. And, although the standard UAS kit may include basic pro- cessing software, users may want to pur- chase more sophisticated software solu- tions to save time and extract complete value from the data. Industry observers suggest that UAS solutions will compete more directly with ground-based laser scanning systems than The Gatewing X100 is one of several unmanned aerial system (UAS) products suitable for conducting low-risk digital with traditional aerial mapping service imagery of ground surface features. providers. Another presenter at the

42 E&MJ • JANUARY 2013 www.e-mj.com DIGITAL MAPPING

Dimensions conference, Mario Glenn Nunez, project engineer for DIP Engineering, described the results of a test comparing the application of a UAS and a conventional ter- restrial laser scanner to compile a DTM and calculate volume of a large, cone-shaped stockpile below the crusher discharge con- veyor at an open pit mine. UAS setup, programming, placement of ground-control points, flight time and data processing for the cone measurement took just under two-and-a-half hours, according to Nunez, while sight-point selection and planning, scanning and data processing took five hours with the laser scanner sys- tem. Surface-image generation from the point clouds of the two systems shows a clear visual advantage with the UAS image, which provided details within the cone’s interior spaces that could not be generated with the data collected by the laser scan.

Speed and Accuracy Pit-layout comparison tests between standard, conventional design software and Trimble’s forthcoming Open Pit Mine Design program produced results with 99% correlation, as shown here with the conventional program’s output on the Even with vastly quicker turnaround times left—but the design process took one-tenth the time using the Trimble product. for collecting and analyzing geospatial data collected by the most advanced pho- Richard Gawthorpe, principal mining engi- focused on several key characteristics for togrammetry and digital surface modeling neer at Anglo American, and colleagues at the program: it must be a ‘simple’ solution, solutions, a common issue for mine plan- Kumba Iron Ore, a member of the Anglo yet offer advanced editing capabilities; ners is the amount of time typically American group and operator of the huge employ automated tools with controlled required to generate or update a pit plan. Sishen open-pit mine in Northern Cape parameters; and require minimal training, For large open-pit operations this may take Province, South Africa. Looking for a similar yet provide sufficiently detailed results to weeks or more and generally requires users solution for pit design and optimization allow for options analysis. that have extensive training with the soft- tasks, Anglo American engineers joined The resulting program, said Gawthorpe, ware system, as well as long sequences of forces with a team from Trimble about one called simply Trimble Open Pit Mine mostly manual user input operations and year ago to develop a rapid pit design pro- Design, provides a ‘paradigm shift’ in pit time-consuming editing procedures. gram that would: design, allowing dramatic reductions in To reduce the time and effort needed to • Reduce required design time by at least time required. In on-site comparison test- generate accurate, revisable mine plans, 80%. ing against a conventional pit design pro- Trimble currently is in the final stages of • Not require extensive training or prior gram, Gawthorpe said Open Pit Design was developing a highly streamlined open-pit experience from users. able to produce a finished design in about design package that evolved from an infor- • Free-up staff with higher technical and four hours, compared with 40 hours for the mal conversation between some South analysis skills to perform review and conventional solution—and with 99% cor- African mine managers and engineers about optimization. relation between the two designs. a military project aimed at reducing the time In practical terms, the engineers wanted The development team is looking at required to design and construct emergency a tool that would allow mine staff to reduce adding several highly useful features to the airfields in remote locations. The Joint Rapid the amount of time needed to update pit existing program, said Gawthorpe. One of Airfield Construction (JRAC) program was a design for a large mine such as the Sishen these would essentially reverse common cooperative effort in the early 2000s by the pit, which measures roughly 5 x 17 km. The design practice by using a database that U.S. Army Corps of Engineers and their U.S. upgrade process for Sishen can take as long contains a complete set of physical param- Air Force counterparts to investigate meth- as three months, and once completed, the eters for the mine’s production equipment ods for rapid construction and upgrade of plan was tedious and difficult to edit. The fleet; instead of arbitrarily assigning a stan- airfields for tactical military operations. whole process took experienced engineers dard haul-road width during the design Although much of the program’s focus and technicians away from other more pro- process, for example, the user could simply was on construction and soil-stabilization ductive activities—a common problem in input the truck type and the program would techniques, one of its goals was to find ways an industry that is chronically short-staffed automatically assign road width and turn to speed-up the design/upgrade process and and increasingly dependent on less-experi- radius based on truck size. Other future develop engineering solutions that could be enced workers. features may include enabling risk-based applied by less-than-expert personnel, often To craft an effective software tool that slope optimization, geo-risk analysis and working under stressful conditions. This was could be easily grasped and applied by pit development strategy analysis from the portion of the program that interested non-expert users, the development team detailed designs. www.e-mj.com JANUARY 2013 • E&MJ 43 BAUXITE Microwave-based Moisture Measurement of Bauxite Ore on Conveyor Belts Field-proven analyzers offer improved accuracy, a wide measurement range suitable for many applications, and dependable performance in harsh environments

By Sidney A.A. Viana

Production and quality control of any indus- al. Moisture analysis relates to a variety of  Operating control of filtration, dewater- trial plant rely on the use of suitable field methods for measuring moisture content. ing, drying and pelletizing processes. instruments and analyzers to measure major The classic method for measuring moisture  Monitoring the moisture content of ores process variables. In mineral processing in solid or semi-solid materials is referred to regarding an upper limit, in ship load- plants, an important process variable is the as loss on drying (LoD). With this method, a ing operations. moisture content of bulk ores, which repre- sample of wet material is weighed, heated This paper outlines the application of sents the amount of water naturally for an appropriate time to become dry, and an on-line moisture analyzer in a bauxite absorbed by the ore, the measurement of then re-weighed. By comparing its initial ore processing plant. which is necessary to determine the mass of wet mass to its final dry mass, moisture the ore alone, referred to as dry mass. The content is then determined. This method Models for Microwave classic way to measure moisture content of provides good results and is used as a ref- Moisture Measurement ores is by drying them under specific condi- erence method, however, for industrial Microwaves are electromagnetic waves with tions and then comparing their initial wet applications it is considered difficult and frequencies in the range 0.3–300 GHz. mass to their final dry mass. Since this time-consuming due to the need for sam- When a microwave passes through any mate- requires the ore to be sampled, handled and pling, handling, preparation and drying. rial, its energy is partially dissipated dried, it is usually tedious and time-con- An on-line moisture analyzer is a device (absorbed) by the material, causing a suming. However, there are now field ana- that permits direct measurement of mois- decrease in wave intensity (attenuation) and lyzers for on-line measurement of moisture ture content for specific applications by an offset in wave displacement (phase shift). content that can be used to advantage over using methods others than LoD. Many The degree by which the wave is attenuated the classic method, provided they are prop- industrial processes may call for the use of and phase-shifted by a specific material erly designed for the application. on-line moisture content measurement, for depends on the wave frequency and on the This article describes the application of example: measuring coffee freshness (food electrical properties of the material, such as a microwave-based analyzer for on-line process), determining the composition of its “dielectric constant.” The higher the measurement of moisture content of baux- paint (chemical process), and determining dielectric constant of a material, the higher ite ore on a conveyor belt at HYDRO’s baux- the water content in ores (mineral process). the energy dissipation (attenuation and ite processing plant in Brazil. The equip- The relevance of use of a moisture analyz- phase shift) of microwave passing through it. ment was the first-ever, fully operating on- er depends on the nature and objectives of Water has a higher dielectric constant than line moisture analyzer installed at the the process. Some key applications of such many common materials, and is highly inter- plant. The results and benefits of using the analyzers in mineral processes are: active with microwaves. The basic model analyzer are also discussed.  Equalization of bulk ore masses in dry equation for microwave-based moisture basis for mass balance and production measurement can been seen in Model 1. Finding a Better Way accounting. Moisture content refers to the relative  Operating control of dilution water in Model 1. amount of free water contained in a materi- SAG and ball mills. Where: mc: moisture content by weight (%w) M: wet mass of material (Kg) α: microwave amplitude attenuation (dB) φ: microwave phase-shift (rad) b α0, i: model parameters The model does not consider ore densi- ty explicitly. Although different densities change microwave amplitude and phase in different ways, this effect is embodied by the mass M. The calibration of the model above is developed as follows: ore samples are dried, weighed, and then artificially Figure 1—Typical architecture of a microwave-based on-line moisture analyzer for belt conveyor applications. moistened by the addition of known masses

44 E&MJ • JANUARY 2013 www.e-mj.com BAUXITE

confidence, when they are well designed Model 2. and calibrated. This accuracy is very suit- able for process control and production accounting in mineral applications. Model 3.  Wide measurement range: Microwave moisture analyzers can work within of pure water, yielding a set of sample wet and the phase-shift of a microwave signal measurement ranges as wide as 0% to M mc masses { i} with moisture contents { i}. passing through the material. A microwave 90%w. Such a range can meet a large This is best done in laboratory, under con- moisture analyzer, shown in Figure 1, is an variety of applications. trolled conditions. The samples are subject- instrument that implements this principle.  Suitable for harsh environments: Harsh ed to a microwave analyzer, and the result- The analyzer has two microwave anten- industrial conditions are a major chal- ing set of microwave attenuations {αi} and nas—one for transmitting and one for lenge for instrument reliability, mainly in phase-shifts {φi} are measured. After these receiving—which are placed around the mineral applications. Microwave mois- laboratory tests, the set of experimental material flow (normally in a conveyor belt) ture analyzers are usually robust and can mc M data values { i, i, αi, φi} is statistically in a upper-lower orientation. handle severe applications, with proper analyzed to detect and eliminate possible The transmitting antenna generates a installation design. outliers. The remaining valid data set is known reference microwave signal which One limitation of microwave moisture then used in a multivariate regression to passes through the material, is attenuated analyzers is: b  determine values of the parameters α0, 1, and phase-shifted, and then reaches the Hard-to-perform calibration: A well- b and 2 that best fit the experimental data. receiving antenna. By comparing the designed, installed, configured and cali- To improve measurement accuracy, some received signal with the emitted signal, the brated microwave moisture analyzer sys- moisture analyzers have been designed to analyzer determines the overall attenuation tem can be reliable for long periods. operate with two simultaneous microwave and phase-shift of the microwaves due to However, due to its relative complexity signals of different frequencies, leading to a their interactions with both the material and the inherent need for material sam- more complex model, as seen in Model 2. and its water content. To distinguish the pling, handling, and drying, calibration Model 2 is used in applications in which attenuation and phase-shift due to only the of such analyzers is a multi-step, hard-to- the material mass M can be directly meas- water content in the material, the analyzer perform and time-consuming task. This ured and provided for the model. If this is needs information about the amount of limitation becomes a problem when, for not the case, but the material density ρ is material, which is provided by a “compen- whatever reason, the analyzer requires almost constant (has a small variance), sating signal” from an independent instru- frequent recalibrations. The best way to Model 2 can be rewritten in terms of mate- ment. All the signal processing and model avoid this problem is through care in the rial level (bed depth) h, as seen in Model 3. calculations are performed by a specialized design, installation, calibration and Where: algorithm implemented in the analyzer maintenance of the equipment. mc: moisture content by weight (%w) electronics, which also yields the moisture M: wet mass of material (Kg) measurements to the plant control system. The HYDRO Bauxite Plant ρ: material density (g/cm3) Some advantages of microwave mois- HYDRO’s bauxite processing plant, located h: material level (mm) ture analyzers are: 60 km from Paragominas in Pará state, αH: higher frequency microwave ampli-  Representative non-contact measure- Brazil, is shown in Figure 2. Plant construc- tude attenuation (dB) ment: Microwaves perform a reliable non- tion ran from August 2004 to December φH: higher frequency microwave phase- contact measurement because they are 2006, and commissioning began in March shift (rad) not subject to wear by contact. And, 2007. The plant receives raw bauxite ore αL: lower frequency microwave ampli- because they pass through the bulk of the from an open-pit mine, and performs a set tude attenuation (dB) material being measured, a very represen- of comminution and separation processes to φL: lower frequency microwave phase- tative measurement can be obtained. produce bauxite slurry, which is pumped shift (rad)  Accurate measurement: Microwave mois- through a 243-km-long pipeline from the b c α0, i, i: model parameters ture analyzers can reach accuracies from plant site to the HYDRO Alunorte alumina The calibration of Models 2 and 3 fol- 0.5% to 0.1%w, for 1-standard-deviation refinery, in the city of Barcarena, Pará. lows the same guidelines as for the simpler Model 1, with the difference that a larger set of sample data values is needed for the multivariate regression calculations, due to the greater number of parameter values to be determined. Microwave Moisture Analyzers for Mineral Applications An important attribute of microwaves is that they are highly interactive with water. The measuring principle of moisture content of a material relies on sensing the attenuation Figure 2—Aerial photo of the HYDRO Bauxite Processing Plant. www.e-mj.com JANUARY 2013 • E&MJ 45 BAUXITE

(a) (b) Figure 3—Relationship between attenuation (α) and phase-shift (φ) per unit mass and the moisture (mc) from experimental data used in the pre-calibration of the moisture analyzer.

Measuring the moisture content of the indicated incorrect belt scale measure- necessary to define the moisture range in ore at the input of grinding circuits allows ments were caused by mechanical mis- which the analyzer is intended to work for accounting of the actual dry mass fed to alignment in the conveyor structure and because the set of sample moisture values the circuits, from which the mass balance belt sliding, hence compromising the to be used in the model building must and the mass recovery of the circuits can moisture measurements. To overcome cover appropriately the intended moisture be computed. The mass recovery, given by those problems, two steps were taken: to range of the application. In this project, the ratio between the input dry ore fed to relocate the analyzer to another conveyor, this was done by checking historical mois- the grinding circuits and their output slur- TC-123-02 (See Figure 2), still at the ture data from the plant laboratory data- ry mass produced, is a key performance input of a grinding circuit; and to use base, for the conveyor on which the mois- indicator of the plant, since it indicates another compensating method for the ana- ture analyzer would be installed. It was how much of the total input ore has been lyzer, to avoid it being “slave” of unreli- found that the nominal moisture range of converted into product slurry. able belt scales. The new method chosen the ore was 10.5–13.5%w, with eventual The moisture analyzer was originally was material level compensation. higher values of no more than 17.5%w. installed on belt conveyor TC-121-02 (See Hence, the intended calibration range of Figure 2) in order to take advantage of an Calibration and Installation the analyzer was chosen as 0–18%w. existing belt scale on this conveyor, to pro- of the Moisture Analyzer The analyzer was originally delivered to vide the compensating signal required by The first step in the design of a moisture work with Model 2. However, the compen- the analyzer. However, after the analyzer analyzer system is the selection of the sating method would be changed from had been installed, its moisture measure- model that best suits the intended appli- material load compensation to material ments were found unreliable when com- cation. All further work involving the build- level compensation, and hence Model 3 pared with laboratory sample values. ing and calibration of the system will had to be developed. Development of a Further investigation of the entire system depend on the chosen model. It is also new model is done in three steps.

Figure 4—Installation of the moisture analyzer system on the conveyor: electronics cabinet, upper microwave antenna (the bottom antenna is not visible), and mate- rial level sensor.

46 E&MJ • JANUARY 2013 www.e-mj.com BAUXITE

(a) (b) Figure 5—Correlation between the sample data used in the calibration (a) and in the verification (b) of the moisture analyzer.

Step 1: Pre-Calibration (Initial Model The graphs show the relationship between method. A measurement check is per- Building)—The pre-calibration is the initial the quantities αL/M and φL/M versus the formed based on the deviations between determination of values for the parameters moisture content mc, for model (2). the analyzer measurements and the labora-

({a0, ci} in Model 3). This is best done with After sample data collection in labora- tory results. If necessary, the model param- the moisture analyzer at a laboratory work- tory, the set of experimental data values eter values {α0, ci} are adjusted to better bench. Using a set of material samples with {mci, ρ, hi, αi, φi} was statistically analyzed match the laboratory results. known moisture contents mci, achieved by to detect and eliminate possible outliers. The greater the number of samples col- the addition of known masses of pure water The remaining data set was then used in a lected from the conveyor, the more consis- to the dry masses of the ore samples, each multivariate regression to determine values tent the calibration would be. Ideally, a min- sample was put inside a non-metallic (fiber- of the model parameters {α0, ci} that best imum of 30 samples should be collected. In glass) box to form a layer of ore with known fit the experimental data. The model was this work, however, due to restrictions to height (level) hi. The box was then placed then loaded into the analyzer electronics stop the conveyor belt, a set of only 14 com- between the microwave antennas of the by the manufacturer, through Ethernet posite samples of wet ore, each one involv- analyzer to sense the microwave attenua- communication, from a laptop running a ing three cuts, were collected. The sampling tion αi and phase-shift φi corresponding to proprietary configuration software. uncertainty (σsampling) is given by the root the moisture content mci, level hi, and den- Step 2: On-Site Calibration (Model mean squared error (RMSE) of all the cut sity ρ of the ore sample. For this step, it’s Refinement)—Having concluded the pre- sample values of all the composite samples, σ not necessary to take the ore samples from calibration step, the moisture analyzer was and resulted as sampling = 0.391%w. stop belt sampling. One can use ore col- installed on conveyor TC-123-02. An over- The criterion to consider a cut sample lected from other easily accessible loca- view of the installation is shown in Figure 4. value as an outlier was a cut sample devi- tions, like the plant stockyard, provided that Because of some differences between ation greater than two standard deviations. the collected material has similar properties actual field conditions and the laboratory One of the samples was regarded as an (particle size distribution and density) to conditions of the pre-calibration step, an on- outlier and removed from the sample data the material carried by the conveyor on site calibration for model refinement is nec- set. The remaining 13 valid sample results which the analyzer would be installed. essary. This refinement is simply an adjust- are shown in Figure 5(a). This initial model building is difficult due ment on the model parameter values {α0, ci} For each of those valid composite sam- to the need for so many ore sample cre- determined in the pre-calibration step. ples, the error εi was computed between ations, for better representativeness within While the analyzer is running, a set of the moisture value from the analyzer and the intended measuring range for the analyz- composite samples is taken from conveyor its corresponding result from laboratory er (0–18%w). This task used seven reference belt stops, and their corresponding mois- moisture values (0, 7, 9, 11, 13, 15, and ture values measured by the analyzer are 17%w), five reference levels (within 60–390 recorded. The samples are sent to labora- mm), two sample box positions (front and tory to be analyzed through the LoD Equation 5. rear), and five sample measurement collec- tion, resulting a total of 350 sample meas- urements of microwave attenuation and Equation 5a. phase-shift values. It took seven days, with 12 hours/day of work, to complete the tasks. Figure 3 shows some pre-calibration data for the chosen set of reference moisture values. Equation 5b. www.e-mj.com JANUARY 2013 • E&MJ 47 BAUXITE

Figure 6—Trend graph of on-line moisture measurements. analysis. The sample errors had an average ple values from the analyzer and their cor- Step 3: On-site Verification (Model value µε = –0.449%w and a standard devi- responding values from laboratory. It Validation)—After on-site calibration is σ ation σε = 0.995%w. Two of the valid sam- resulted as measurement = 0.577%w. achieved, the model should be validated. ples (indicated by red points in Figure 5(a)) Finally, the measurement uncertainty is a This is done with a new set of material were out of the 2-standard-deviation region quadrature combination of the sampling samples, collected in the same way as for (|εi | > 2σε) and were regarded outliers. uncertainty and the calibration uncertainty the on-site calibration step. If the sample Excluding those outliers, the remaining 11 or analyzer accuracy (σanalyzer) as seen in measurements from the analyzer are con- sample values are the valid set of values Equations 5 and 5a. sistent with their corresponding sample from which the measurement uncertainty The moisture measurement accuracy moisture results from laboratory, then the should be determined. The measurement required by the plant operations was model is considered valid. Otherwise, a uncertainty or accuracy (σmeasurement) is ±0.5%w. Since the accuracy achieved by new model calibration should be done. given by the root mean squared error the analyzer had met this requirement, the A set of 10 three-cut composite sam- (RMSE) between the valid composite sam- calibration was regarded as suitable. ples of wet ore were collected from con- veyor belt stops, and the moisture meas- urements from the analyzer associated to those samples were recorded. The sam- pling uncertainty for all of the cut sample values of all the composite samples result- σ ed as sampling = 0.717%w. This uncer- tainty was greater than the one from the on-site calibration, suggesting differences in the sampling, storage or laboratory prac- tices between the two sampling cam- paigns. None of the composite samples presented cut sample deviations greater than two standard deviations (no cut sam- ple outliers). All the 10 valid sample results are shown in Figure 5(b). The sample errors εi between each moisture value from the analyzer and its corresponding result from labora- tory analysis had an average value µε = –0.354%w and a standard deviation σε = 1.258%w. One of the valid samples (indicated by the red point in Figure 5(b)) was out of the 2-standard-deviation region (|εi| > 2σε) and was regarded an outlier. Figure 7—Histogram of moisture for a 20-day period. Excluding this outlier, the remaining 9

48 E&MJ • JANUARY 2013 www.e-mj.com BAUXITE sample values were used to determine the To obtain useful results, it’s vital that Those issues must be addressed to keep an measurement uncertainty, which resulted the facility staff properly maintain the analyzer operating effectively. as σmeasurement = 0.855%w. Hence, the equipment. There are many reasons why Although this application pertains to analyzer accuracy can be seen in model 5b. workers may be reluctant to take proper bauxite ore, most of the information pre- Since this verified analyzer accuracy care of analyzer systems; classic excuses sented here can be applied to different resulted close to the accuracy from the cal- include: “It’s difficult to stop the conveyor ores or bulk materials. ibration step, and still within the ±0.5%w to take material samples,” and “It’s diffi- requirement from the plant operations, the cult to take too many material samples,” or Sidney A.A. Viana is a process control pro- analyzer was regarded as well calibrated. “We would waste too much time to recali- ject specialist at Norsk HYDRO ASA’s brate the analyzer” and “The analyzer is Paragominas, Brazil, bauxite operations. He Operating Results more complex than other instruments.” can be contacted at [email protected]. The analyzer yields its moisture measure- ments to the plant process control system (PCS) through an analog 4–20 mA signal. Figure 6 shows a trend graph of the mois- ture content of the bauxite ore over a peri- od of 20 minutes. Such variations are vir- tually impossible to detect from stop-belt sampling of ore, but are easily detected by an on-line analyzer. Trend graphs, like in Figure 6, are use- ful to understand short-term variations of the moisture content of the ore. To under- stand long-term variations, a histogram is best. Figure 7 shows a histogram of mois- ture for a period of 475 hours (≈ 20 days). The probability of the moisture being lower than 10.5%w was 1.11%; whereas the probability of being in the range 10.5–13.5%w was 95.81%; and the probability of being greater than 13.5%w was 3.08%. The histogram above clearly indicates that the moisture distribution is not Gaussian. Its asymmetrical form was expected because, from the plant process conditions, it is virtually impossible for the ore to have moisture values lower than 9%w, but there are many conditions that can increase the natural moisture content of the ore, such as rain or wash water on the conveyors. The statistics of this distribution are: median λ = 11.18%w, mean µ = 11.37%w, and standard deviation σ = 0.83%w. Before the implantation of the moisture analyzer, the nominal moisture value officially considered by the plant oper- ations was 12%w. However, the median and mean values computed from the analyzer measurements should be more confident. Care is Crucial Microwave moisture analyzer systems can be used advantageously provided that they are designed and calibrated thoroughly. The key issues for a successful calibration of a microwave analyzer are the collection of representative sets of samples, and care- ful laboratory analysis, to provide consis- tent sample data for the calibration. www.e-mj.com JANUARY 2013 • E&MJ 49

Current mining operations are focused on higher grade reserves at Kipoi Central, producing 35,000 mt/y of copper until 2014. Photo courtesy of Tiger Resources.

Copper is extracted predominantly from open-pit mines in the Katanga Province. Photo courtesy of Gecamines.

Rich copper oxides (seen above) can be found throughout Katanga’s copper belt. Photo courtesy of Tiger Resources.

The DRC’s future infrastructure investment needs will not be met by highway tolls. Photo courtesy of Katanga Province.

AEL Mining Services has an emulsion plant and several distribution centers in the Katanga Province. Photo courtesy of AEL.

The Katanga Province has placed a priority on education, with a new school in Lubumbashi. Photo courtesy of Katanga Province. BRAZILIAN GROWTH Preparing for Brazilian Growth Long before the BRIC acronym became popular, Liebherr was helping Brazil build

By Steve Fiscor, Editor-in-Chief

Estadio Mineirao in Belo Horizonte is one of 12 stadium construction projects Brazil is conducting to host the 2014 FIFA World Cup.

Because of the emergence of Vale as a leader, many in the mining During the last 50 years, Brazil has advanced from a dictator- industry already understand the importance of Brazil to the world ship to a consolidated democracy. It’s now not only a great place economy. The same generalization could be made for the agricul- to do business, but one of the world centers for capital investment. ture and petroleum industries as well. Then, of course, there is Brazilians number nearly 200 million and it’s a race, religion, edu- football and fans know that Brazil is the only country to hold three cation and age diversified population. They have an optimistic World Cup Championships. So, the decision to host the 2014 FIFA approach to life. In the next four years, a whole new generation will World Cup in Brazil seemed logical. Preparing for that event be exposed to a vibrant culture that deserves respect. should serve as a great transition for the 2016 Olympics, right? The growth that Brazil is about to experience, both domesti- Historical Perspective cally and abroad, will be staggering. The Brazilian government’s Brazil is the seventh largest economy. In 2011, the Brazilian GDP Growth Acceleration Program is expected to invest $486 billion for was $2.37 trillion, which placed it above the U.K.’s $2.26 trillion. infrastructure improvements during the next four years. These The IMF has predicted that the Brazilian economy could surpass activities will be complemented by on-going private investment the French economy in 2015. A weaker global economy caused from major Brazilian companies. Those that deal with the traffic the Real to lose value (R:$, 1.71:2.03) in 2012, which will prob- congestion in Sao Paulo and Belo Horizonte know that logistics ably push the country back to the seventh position, behind U.K., will have to improve to support these special events in addition to France, Germany, Japan, China and the U.S. the normal growth rates. Iron ore, energy and agriculture played a crucial role in pro- During November, Liebherr invited a group of journalists from pelling Brazil to its current status. During the late 1960s and early several international trade journals to see first-hand how it was 1970s, an economic modernization and growth cycle began in preparing to support its customers in the aerospace, shipping, con- Brazil. At that time large state-owned companies were created or struction and mining fields. Engineering & Mining Journal was rep- consolidated and a military dictatorship ruled the country. Plenty resenting the international mining industry. During a week-long of financial resources were available and the Brazilian Miracle is trip, the group toured different facilities, saw how Liebherr was well documented. investing in its factories and its people, and heard stories about the In the 1980s, democracy was re-introduced, but times were past and predictions for the future from executives and dignitaries. difficult. A downturn in the economy did not help the situation.

80 E&MJ • JANUARY 2013 www.e-mj.com BRAZILIAN GROWTH

Seeing that it could no longer service its debt, the Brazilian gov- tion targets with a floating currency exchange system. “Also, the ernment declared a debt moratorium in 1987. The country national financial system reform implementation and banking reg- entered in a period of economic stagnation and hyperinflation. ulation actions, together with the promulgation of the Fiscal A new phase began in 1994 with the Real Plan and the cre- Responsibility Law, were of fundamental importance for the suc- ation of a new currency, explained Maurício Novis Botelho, former cess of the economic reform,” Botelho said. The law holds elect- chairman for Embraer, which together with other strong healing ed officials responsible for budgets liable. measures, put an end to the unbridled inflation that corroded the During the years of hyperinflation, the Brazilian people lost economy and brought an enormous uncertainty and damage to the their way, Botelho explained. “Every day they saw prices climb and Brazilian society. Botelho spoke to the group at Liebherr’s recent- they lost touch with the true value of goods and services,” Botelho ly restored aerospace facility. said. “The Real Plan placed a fixed value on good services that the A mechanical engineer educated in Brazil, he worked his way people could relate to. It gave them something tangible.” to the top of Embraer. Botelho was president and CEO of Embraer With a stable financial structure and taking advantage of the from September 1995 to April 2007, where he was responsible world’s appetite for raw materials, the government was able to for the company’s reorganization involving the introduction of a stimulate growth, increase foreign trade and create jobs, Botelho new corporate culture oriented to customer satisfaction that repo- explained, promoting a social migration of great relevance. “About sitioned Embraer as one of the world’s leading aircraft manufac- 50 million people have left their poverty status migrating to mid- turers. In March 2006, Embraer was the first major Brazilian cor- dle class since 2003,” Botelho said. poration to go public. From March 2006 to January 2012, he As E&MJ is reporting this month (See Leading Developments, served as chairman of the board of Embraer. p. 4) Vale, the world’s second largest mining company by market The Real Plan adopted and implemented crucial measures to capitalization, has budgeted $16.3 billion for capital expenditures re-establish a solid economic and financial base, including infla- during 2013. Iron ore projects account for $4.9 billion (48.4%) of

Upcoming Changes for the Brazilian Mining Legal Frame By Affonso Aurino Barros da Cunha The market has been closely following the In any case, the planned transforma- discussions between the private and public tion would mean an essential step for the ends of the mining sector in Brazil with modernization of the Brazilian mining sec- regards to the proposed changes by the tor, bringing transparency and decreasing government for the country’s mining legal the level of bureaucracy. In the new regu- frame. Many believe these changes will latory agency (to be called National finally be submitted to the National Mining Agency or ANM), its president Congress during the first half of 2013. shall have more autonomy from the feder- It is a unanimous understanding that the al government, decisions shall be taken by Brazilian Mining Code is outdated and the collegiate boards of directors, and terms of country needs a clear and coordinated poli- office shall have pre-determined expira- cy that brings security to the private players, tion dates. Its performance shall be com- so as to enable the inflow of more invest- shall be taken into consideration as a pleted by the activities of CNPM, which ments in the sector. Even though a draft text whole by the Congress, once the govern- shall be composed of representatives from has not been formally disclosed yet, infor- ment wishes to submit them all at the several Ministries to conceive and coordi- mation released by the government indicates same time. And, this is at least one of the nate the implementation of a national the path it wishes to follow. The changes reasons for the delay in the process. While mining policy. would comprise three umbrella themes: the three Law Projects are being analyzed Obviously, in practical terms these • The revision of the collection system of by staff members of several Ministries, the changes will mean nothing if the ANM is the royalties paid by mining companies, Law Project on the DNPM is also causing not fully equipped to face the tasks to be known as CFEM, probably with the in- the federal authorities some difficulties. incumbent upon it, and Brazil’s federal crease of rates; Currently, the DNPM has its perform- government ought to find a way to finance • The implementation of a different system ance impaired by the lack of personnel, as it. After all, the market expects that the for the concession of mining tenements well as the lack of financial and adminis- country’s mining industry shall receive (leases), similar to public auctions, as well trative autonomy. While the government’s around US$68 billion until 2015. The sec- as the modernization of the Mining Code plan to transform it into a regulatory tor is far too important not to undergo this and the creation of the National Council of agency seems ambitious in a positive way, modernization and the government is cer- Mineral Policy (CNPM); and it has proven to be more expensive than tainly aware of it. • The transformation of the DNPM (the first calculated. Just to begin, such trans- government body linked to the Ministry formation would entail the increase of the Affonso Aurino Barros da Cunha is a part- of Mines and Energy that supervises min- salaries of DNPM’s employees, so they ner with the Brazilian law firm Siqueira ing activities in Brazil) into a regulatory match the remuneration of other regulato- Castro Advogados. He specializes in min- agency. ry agencies’ staff. This along with the mod- ing law, mergers and acquisitions, and for- Each one of such subjects shall be ernization of all DNPM’s structure exceed eign investment. For more information addressed by a specific Law Project, but the federal budget for the project. visit: www.siqueiracastro.com.br. www.e-mj.com JANUARY 2013 • E&MJ 81 BRAZILIAN GROWTH

The Liebherr Brazil factory assembles mining class excavators (inset). These days it’s also producing concrete trucks (foreground) for the oncoming Brazilian building frenzy.

Vale’s 2013 project execution budget, with major expenditures going toward iron ore projects in the Carajás region and in the state of Minas Gerais, Brazil. Vale’s global iron ore distribution network, including new ships, will also see significant spending. Discovering significant offshore oil and gas enabled the coun- try to become one of the few energy self-sufficient countries in the world. Petrobrás, the giant state-owned oil company, recently dis- closed its new investment program for the period between 2012 to 2016, which foresees $236.5 billion investment up to 2016. The Brazilian government is planning investments of $39 bil- lion in the next five years, where highways will receive about $20 billion and the railways will receive $45 billion. The original factory complex was devoted to manufacturing Brazil generates most of its electricity from hydroelectric power ship and offshore cranes, and in 1976 the first Liebherr ship crane plants. The National Interlinked System installed capacity be manufactured in Brazil was delivered to a local shipyard. From expanded from the 2010 existing 110,000 MW up to 171,000 there, the factory began to produce tower cranes before moving MW by 2020. The energy transmission system extension, around into telescopic mobile cranes. During the 1980s, the factory 100,000 km in 2010, will be expanded to reach 142,000 km by turned its attention toward earthmoving and mining equipment. 2020, that is the equivalent to 40% of the existing system will be “In 2005, we not only intensified the production of large min- built in the next 10 years. All of these investments will reinforce ing equipment but also extended our facilities with a modern Brazil’s status as one of the most advanced nations of the world. production building suitable for the production of such large machines,” Stroebele said. Liebherr Brasil The Brazilian factory was much more than construction and During the 1974, Liebherr established a presence in mining equipment. Liebherr created a joint venture with the Guaratinguetá, Brazil, an area halfway between the population Brazilian aircraft manufacturer Embraer, primarily to produce centers of Sao Paulo and Rio de Janiero. Today, Liebherr Brasil landing gear, in 1999. Liebherr Aerospace Brasil Ltda. construct- GMO LTDA, not only takes responsibility for the sales and service ed a plant (also at the Guarantinguetá facility) to produce aircraft activities of Liebherr’s construction and mining equipment divi- systems components for Liebherr’s Aerospace and Transportation sions for the Brazilian market and beyond, but has also assumed Systems division. Unfortunately, it was destroyed by fire in July engineering and manufacturing duties for various product lines 2011. “To fulfill our existing supply contracts, we improvised pro- from different Liebherr divisions. “This trans-divisional approach duction in other buildings on our campus and transferred another to marketing and local production can also be understood as a part of the production including 100 local staff to the division’s blueprint for Liebherr’s strategy of developing and intensifying its European facilities in Lindenberg, Friedrichshafen and Toulouse,” services for customers in emerging markets,” said Klemens Stroebele said. “The company re-started its regular manufacturing Stroebele, managing director, Liebherr Brasil. operations in a completely new building recently erected on the

82 E&MJ • JANUARY 2013 www.e-mj.com BRAZILIAN GROWTH original site. Today this company, with a labor force of more than 200, has regained the same level as prior to the fire, and we expect significant growth in the future.” Today, Liebherr Brasil GMO LTDA is a vital part of the joint pro- duction networks of four different Liebherr divisions: Earthmoving, Mining, Maritime and Construction Cranes, and Mixing Technology. “Our current manufacturing program includes the R 944 C, R 954 C and R 964 C crawler excavator models, the A 924 C material handler as well as the L 538 and L 580 wheel loaders,” Stroebele said. “For worldwide mining customers we currently pro- duce the R 9350 and R 9400 large hydraulic excavators.” The nationwide after-sales service network operates a total of 18 offices with experts in all of Brazil’s five regions. These branches employ a total staff of 590 employees to provide services for con- struction equipment as well as for the products of other Liebherr divisions in Brazil, which includes about 40 pieces of mining equipment most of which are operating in the iron ore mines. “At our Carajas location, we intend to erect a maintenance workshop and a spare parts store for our mining equipment at Vale’s iron ore operation—the largest of its kind worldwide,” Stroebele said. In the last 10 years, Liebherr Brasil has seen its business grow eightfold from $19.3 million in 2001 to almost $258 mil- lion in 2011. To meet this level of growth, Liebherr Brasil’s staff grew from 300 to 1,200 during the same timeframe. “Besides the volume of staff, one of our most persistent challenges is the question of qual- ification,” Stroebele said. “In contrast to Liebherr’s traditional European home markets, acquiring the qualified labor needed for our high product quality standards is a very difficult task. This is why we decided to establish our own training and education facil- ity, which was opened in 2011.” In addition to these efforts, Liebherr Brasil established a weld- ing course more than 10 years ago that helps maintain the weld quality for which the company is renowned. “We also created the Jovem Talento Programa (Young Talent Program) in 2008 in part- nership with SENAI—Serviço Nacional de Aprendizagem Industrial (National Industrial Training Service), to provide the after-sales service skills needed by our organization,” Stroebele said. “Last but not least we support the public ‘Aprendizes SENAI Program’ (Apprentice SENAI Program). This program is aimed at young people who wish to acquire technical and professional skills to facilitate their first career steps.” The success that Liebherr has enjoyed in Brazil was only pos- sible with a sound investment. Decisions were made in good time and a general commitment to this market was a matter of corpo- rate policy for Liebherr, Stroebele explained, long before the notion of BRIC as a synonym for dynamic markets was born. Vale’s Capão Xavier Iron Ore Mine The mining-related stop on the Liebherr tour was the Capão Xavier mine near Nova Lima, Brazil. Vale operates in all five of Brazil’s geographic regions. A large fleet of Liebherr mining excavators are employed at iron ore mines operated by Vale close to Belo Horizonte. One of those mines is Capão Xavier, which is part of the Paraopeba Complex, located on the east side of Minas Gerais. The mine is part of a region known as the Iron Quadrangle, which is adjacent to the municipalities of Belo Horizonte, Santa Bárbara, Mariana and Congonhas do Campo and covers an area of 7,500 km2. In 2011, Capão Xavier’s produced 8.4 million metric tons (mt) and contributed 2.6% to Vale’s total production of iron www.e-mj.com JANUARY 2013 • E&MJ 83 BRAZILIAN GROWTH

The Capão Xavier mine near Nova Lima uses specially outfitted Liebherr R 964 C excavators (inset) to load iron ore. ore. Before Capão Xavier went into operation in 2004, its capaci- For the loading process a fleet of 16 Liebherr R 964 C min- ty was estimated at 81.2 million mt of iron ore, which would be ing excavators is operating on site in the Paraopeba Complex. economically depleted by approximately 2014. These machines excavate both waste rock and the iron ore, load- The Capão Xavier mine is a shallow open-pit mine where iron ing the material into a fleet of 38-mt trucks that shuttles it to a ore is extracted from seven 10-m benches. Depending on the ore crushing installation. type, it can sometimes be loaded directly from the bench. Harder Three units of Vale’s Paraopeba Complex R 964 C excavator formations require drilling and blasting. fleet are allocated to the Capão Xavier mine site. At first glance, this particular model would be considered a standard-size con- struction excavator. To upgrade this machine for heavy-duty min- ing operations, Vale’s R 964 Cs are equipped with a 7-m goose- neck boom, 2.6-m stick and heavy-duty buckets of 4 m3 capaci- ty. To guarantee maximum security the equipment includes piston rod protection, fall-over protection structure (FOPS), the rear cam- era monitoring option and fuel coupling safety devices. The R 964 C is powered by a 320 kW (434 hp) Liebherr D9508 V8 diesel engine. With shovel attachment its opera- ting weight varies between 67,900 kg and 78,000 kg. Shovels are available with capacities up to 5 m3. This version of the R 964 provides a maximum digging force of 308 kN (31.4 mt) and a maximum breakout force of 335 kN (34.2 mt). Its maxi- mum reach values are 11.65 m at ground level and 7.7 m at dump height. The R 964 C excavators at Paraopeba Complex have proved their strength and dependability for almost 10 years in severe con- ditions. This excavator size perfectly matches the 38-mt trucks that are the preferred transport vehicles on smaller mining sites such as Capão Xavier. To ensure maximum availability for the Liebherr fleet at Vale, Liebherr has located a dedicated team of after-sales experts in the state of Minas Gerais. They provide services for nine different Vale mines from their headquarters in Belo Horizonte. Resources allo- cated there include 30 highly trained technicians. For all cus- tomers in Brazil, Liebherr also offers an efficient logistic system for spare parts that ensures maximum agility when responding to every client requirement.

84 E&MJ • JANUARY 2013 www.e-mj.com

OPERATING STRATEGIES Report Highlights Issues Ahead for Mining Industry

A series of immediate challenges facing ing investments today to meet the expected the global mining sector—including rising long-term demand for commodities. costs and increased demand uncertainty— Here are the top 10 issues the mining should not deter miners from making sector is expected to face in 2013, along investments today to fulfill future global with some responses companies can adopt commodity requirements, according to a to deal with them: new report from Deloitte Touche Tohmatsu • Higher costs: This remains the number Ltd. (DTTL) released recently. one trend for the second year in a row. The key to controlling project cost overruns, suggests a Tracking the trends 2013, which pro- Currency volatility, high operating costs recent report, may require management to improve vides commentary and analysis of what and lower grades are affecting decisions investment decisions by applying project rationaliza- tion, higher capital efficiency, data analytics and pro- DTTL views as the top 10 issues most like- around continued production, expan- ject delivery quality assurance. (Source for all data: ly to impact the mining sector in 2013, sions and the delinking of corporate Deloitte Touche Tohmatsu Ltd.) predicts the companies that will thrive into equity from commodity prices. To get the future will be those that set a solid costs under control, mining companies until commodity prices and government strategic direction and hold the course must pinpoint their cost drivers, auto- intentions settle and more about making amid shifting industry realities. The annu- mate, improve asset efficiency with ana- disciplined investment decisions through al report also provides a range of respons- lytics, improve their operating model and such measures as project rationalization, es that companies can adopt to prepare for streamline the supply chain initiatives. improved capital efficiency, data analyt- shifting industry dynamics. • Demand uncertainty: China’s decelera- ics and project delivery quality assurance. Now in its fifth year of distribution, the tion of growth, combined with the widen- • Increased M&A volumes: As a result of DTTL report notes that an ever-increasing ing gap between its official global limited debt financing, some mining wave of volatility—including declining demand data and observable reality, has companies are seeking to enter deals commodity prices, mounting cost pres- adversely affected commodity prices and pre-emptively with partners of their sures, the persistent Eurozone debt crisis investment decisions. Rather than halt- choice through “proactive and rescue and China’s economic slowdown—has led ing production and risking an inability to M&As,” with transaction volumes likely to some companies to put projects on hold meet future demand, mining companies rise into 2013 and Asian investors re- while others have pursued richer deposits should consider applying game theory to maining frequent providers of develop- and higher yields through projects in some enhance their scenario planning to guide ment capital. To improve the odds of trans- of the world’s toughest geopolitical and their capital project decisions. actional success, the report suggests en- operational environments. Coping with • Capital project deceleration: Although gaging in more comprehensive due dili- such a challenging situation requires a mining executives are hesitant to author- gence to assess potential partners and sophisticated level of analytic capability ize new capital expenditures at a time of planning in advance for the integration. that many mining companies fall short on. tightened margins and ongoing pressure • Resource nationalism: Governments “The endemic factors impacting the to pay shareholder dividends, the report around the world are exercising several global mining industry pose serious implica- suggests the correct response may be forms of resource nationalism, from min- tions for meeting future demand and prof- less about freezing projects or waiting ing industry privatization and expropria- itability,” said Philip Hopwood, DTTL Global Mining leader. “In the face of shifting industry dynamics, mining companies must determine where to focus during volatile times. An often overlooked way to improve their operations and reduce costs is to ensure they get the most out of existing and emerging information technologies.” “For the second year in a row, mounting costs tops the list of the key issues affecting the mining industry,” said Glenn Ives, Americas Mining leader, Deloitte Canada. “This is expected to worsen in the short term as commodity prices continue to dip, work- ers demand higher wages and regulatory costs rise. But rather than halting production The importance of mining to the economy of many developing nations, and an accompanying trend toward resource in the face of shareholder demands for more nationalism, will require miners to strengthen their relationships with national governments and demonstrate the immediate returns, miners should be mak- industry’s value to local organizations and citizens.

86 E&MJ • JANUARY 2013 www.e-mj.com OPERATING STRATEGIES

tion to windfall taxes, resource taxes and mands from Non-Government Organiza- should implement predictive modeling export controls, making it harder for min- tions (NGOs) and other relevant stake- and apply new analytical tools and tech- ing companies to accurately forecast pro- holders, and operating with higher levels nologies to existing processes to improve duction schedules, understand long-term of transparency and sustainability. Mining preventative maintenance, identify at-risk risk profiles, or develop models to guide companies will need to commit to a high- segments and improve safety outcomes. decision making over time. Miners need er level of responsible behavior by embed- • Getting the most out of emerging—and to work to strengthen their relationships ding sustainability into their internal met- existing—technologies: Despite demon- with national governments, diversify their rics, their capital project methodologies strated willingness to innovate, many min- commodity mix and geographic area of and their negotiations with local commu- ing companies fail to leverage back-end focus, and demonstrate the industry’s nities, governments, NGOs and regulators. technology such as data analytics or prop- value to local governments and citizens. • Skills shortages: While the immediate erly integrating disparate technology plat- • Combatting corruption: Mining compa- pressure on the labor force has tem- forms following an M&A. To improve oper- nies are already adopting global trans- porarily eased in some jurisdictions as ations while reducing costs, they should parency standards to counter the risks mining companies postpone projects or revisit their IT strategies and consider posed by corruption, but they will need reduce production, the looming skills investing in programmable logic con- even more responsible practices in the shortage in the long run remains chronic. trollers (PLCs), supervisory control and face of heightened regulatory scrutiny, Mining companies should tackle the data acquisition (SCADA) systems, manu- both of themselves and their partners, skills shortage by strengthening their facturing execution systems (MES), busi- suppliers, service providers, vendors, team’s skillset, re-training existing work- ness intelligence systems, data analytics agents and intermediaries. Combatting ers to fulfill different functions, recruit- and advanced manufacturing systems. corruption will require the adoption of ing from non-traditional labor pools, The report concludes that mining com- strong corporate practices and proce- sponsoring university programs and en- panies that proactively resolve these dures, including third-party relationship gaging in workforce planning. endemic issues will be better able to meet management, internal compliance pro- • Analytics to improve safety outcomes: The future commodity requirements despite grams, and investigation readiness. dangers associated with mining are on the today’s volatile conditions and are likely to • A new level of responsible behavior: rise, particularly as companies move to increase their role in the advancement of Corporate social responsibility extends be- more remote and less hospitable regions. local communities, support of undeveloped yond impact assessments and now re- To better understand the factors that economies and growth of jobs and skilled quires meeting the expectations and de- cause safety incidents, mining companies talent around the world.

www.e-mj.com JANUARY 2013 • E&MJ 87 SUPPLIERS REPORT Bridon Gains Foothold in South African Shaft Rope Market

equating to roughly 160,000 oz of plat- inum annually. Bridon noted that while the South African mining market has historically looked to domestic providers for its rope requirements, Afplats broke with tradition to find a rope solution that could meet the demands of the Leeuwkop project. Afplats, said Bridon, found its 24-strand ropes to be the most technically advanced available, offering a more highly engineered solution than com- petitors’ 18-strand offerings. Afplats confirmed that the support Bridon offered for the installation and appli- cation of the ropes played a major role in its choice of supplier. Bridon rope advisers were on hand to provide on-site expertise and assistance as the ropes were installed. Bridon said it was able to provide a far shorter delivery time than domestic com- petitors could offer, delivering the three Two Bridon sinking ropes will be used for shaft sinking at Afplats’ Leeuwkop underground project, shown here. ropes to the Leeuwkop site two weeks ear- lier than originally planned. Implats subsidiary Afplats has commis- been selected to supply sinking ropes for a The Leeuwkop mine is expected to sioned three 7,000-m (23,000-ft) sinking South African mine. employ about 800 workers at full produc- ropes from U.K.-based ropemaker Bridon Three Bridon Tiger Dyform 24LS tion, and has an estimated life of 22 years. International, which will be used in the ropes will be used to sink the mine’s It is the first phase of a major pro- twin mine-shaft system at the multi-billion 1,350-m-deep (4,430-ft) shaft system. ject, with exploration, drilling and seismic rand Leeuwkop development. According to Once it reaches full capacity, the surveys of the remaining areas planned Bridon, it marks the first time in 90 years Leeuwkop mine is expected to produce over the next five years to determine the an international rope manufacturer has 250,000 mt of platinum ore per month, viability of future mines.

Siemens Snags Peñasquito Service Contract Siemens has signed a five-year agreement for operation and main- tenance of crushing and conveying systems at Mexican mining company Minera Peñasquito, a subsidiary of Goldcorp, Vancouver, B.C., Canada. Although estimated at €40-million, the actual cost of the order will depend on the plant’s output, with the maintenance system serving to enhance the availability and reliability of the mine, according to Siemens. Under the contact, Siemens will be respon- sible for round-the-clock operation of the in-pit crushing and con- veying system, as well as maintenance, repairs and parts manage- ment. The mine is located in the Mexican State of Zacatecas. Siemens said the customer will benefit from flexible contrac- tual arrangements, which sets payment according to contractor compliance with production-based and performance-based key performance indicators such as plant output, productivity, avail- ability and environmental compatibility. Siemens noted that it has Siemens, following receipt of a recent contract, will operate and maintain the crush- had prior experience at the mine, having supplied drive systems ing and conveying systems at the Peñasquito mine for the next five years. and performed servicing and maintenance from startup. Peñasquito began commercial production in 2010. Full-year gold, 23 million–24 million oz of silver, 310 million–325 million 2012 production is estimated to include 370,000–390,000 oz of lb of zinc and 155 million–160 million lb of lead.

88 E&MJ • JANUARY 2013 www.e-mj.com SUPPLIERS REPORT

Bridgestone Expands Fordia Opens Drill Bit Plant will produce high-performance diamond OTR Investment in China drilling bits and other drilling equipment, Bridgestone Americas Tire Operations, Canada’s Fordia Group announced the at an annual capacity of some 150,000 LLC (Bridgestone Americas) said it plans opening ceremony for Fordia (Chang- units. Following the startup of the to invest an additional $27.3 million for zhou) Mining Machinery was held Changzhou enterprise, Fordia said it a second expansion project at its November 19 in Changzhou Export Pro- expects to increase its annual sales by Bloomington, Illinois, USA, off-the-road cessing Zone, located in China's Jiangsu 35% over the next three to five years. (OTR) plant. Most of the investment will province. Fordia, based in Montreal, Canada, is a go toward new machinery for the produc- An investment agreement, signed by global manufacturer and distributor of tion of giant loader tires (GLT). The Fordia and Changzhou National High-tech specialty mining and geological prospect- Bloomington plant currently specializes District in June 2011, calls for Asia Mining ing tools, including core drilling bits, dia- in production of bias-ply GLT. Tools Distribution Co. Ltd., a subsidiary of mond bits and drilling equipment as well “The strong demand for giant loader Fordia, to invest $5 million to set up Fordia as geological prospecting equipment and tires is currently exceeding supply,” said (Changzhou) Mining Machinery, which drilling gauges. Ken Weaver, president of Bridgestone Americas’ U.S. and Canada commercial tire sales division. “This additional expan- sion will better position us to respond to the continued market demand we expect to see, and to meet global growth in the mining sector.” This announcement follows news in April 2012 of a $19.5-million investment in the plant to increase production of tires used in heavy industry. Most of that in- vestment will also go toward new machin- ery and is expected to be completed in mid-2013. Bechtel to Manage Ma’aden Complex Construction California-based engineering firm Bechtel has been awarded the overall program management contract for the King Abdullah project for Waad Al Shamaal City development by Saudi Arabian Mining Co. (Ma’aden). Bechtel, which developed the mega-project’s master plan, will oversee the engineering and construction of the planned city and industrial complex, near Turayf in northern Saudi Arabia. The com- pany will also perform the front-end engi- neering and design of the planned city. The 170-mi2 (440-km2) industrial city will include commercial, housing and edu- cational facilities. The mining complex will feature seven world-scale phosphate pro- cessing plants. Prep work on the project is now under way and construction will begin in 2013. This project, said Bechtel, adds to its portfolio of work with Ma’aden over the last decade, which includes the Ras Al-Khair aluminum smelter. In addition, Bechtel noted that it has successfully delivered nearly 5,000 mining and metals and civil infrastructure projects around the world and is currently building Jubail Industrial City, the largest civil infrastructure project in the world. www.e-mj.com JANUARY 2013 • E&MJ 89 PROCESSING SOLUTIONS New F-Class Screen’s Modular Design Offers Multi-unit Configuration Flexibility

W.S. Tyler has developed a 10-ft-wide (3.05-m) version of its F-Class vibrating screen, describing it as an innovative, double eccentric screening solution for challenging applications that require minimal vibration transmission during operation. This, according to the compa- ny, allows for the use of multiple machines within the same building or structure without the reinforcing meas- ures required to house traditional vibrat- ing screens. Due to its consistent G-force, the F-Class has improved ability to keep screen openings clean, avoiding pegging and making the processing of sticky material possible. W.S. Tyler President Florian Festge said, “Our double eccentric technology has been so effective that customers expressed the need for larger screens as their operations grew. We answered with the largest double eccentric screen to A 10-ft-wide (3.05-m) version of W.S. Tyler’s F-Class screen is now available. date, the 10-foot-wide F-Class. Its size, paired with its versatility, make the exciter driven screens. For these clients, According to the company, it engi- F-Class a viable option for customers who the F-Class offers reduced capital expen- neered two completely new modules for were previously forced to invest in much ditures combined with enhanced screen- the new screen, measuring 10 x 12 ft more expensive technologies, such as ing performance.” (3.05 x 3.6 m) and 10 x 16 ft (3.05 x

First Concentrates Produced at Northland’s Swedish Iron Ore Project Northland Resources reported that the first leading to startup of the Kaunisvaara pro- “This is truly a remarkable achieve- iron concentrate was produced at its ject in less than two years. During this peri- ment by the Northland team together with Kaunisvaara, Sweden, process plant in od the company constructed the industrial our key suppliers Metso, Peab and Pon early December. area, removed more than 4,500,000 m3 of CAT in Kaunisvaara. Northland has, all Karl-Axel Waplan, president and CEO of overburden from the Tapuli mine site, and along, been able to keep up with the time Northland Resources, noted that the com- installed a primary crusher, conveyor belts, schedule that we set up three years ago,” pany was able to execute the processes grizzly building and ore sheds. said Waplan. Metso supplied and installed the min- eral processing equipment for the first process line at the Kaunisvaara process plant, consisting of a primary gyratory crusher, a semi-autogenous/autogenous (SAG/AG) grinding mill, two VTM3000 ver- tical grinding mills, magnetic separators and two VPA press filters. Northland said it will continue to work toward its next goal which is to begin ship- ping concentrate to customers early in the first quarter of 2013. Northland plans to produce 1.4 million dry metric tons of high- grade (69%) iron ore concentrate in 2013 and 3 million dmt in 2014. It expects to Two Metso vertical grinding mills, shown here during installation, are among the major processing equipment reach rated production capacity of 4 mil- items at Northland’s iron ore plant, which recently began producing concentrates. lion dmt/y in the third quarter of 2014.

90 E&MJ • JANUARY 2013 www.e-mj.com PROCESSING SOLUTIONS

4.9 m). By using any combination of assembly is strengthened with a reinforc- The Ramsey Micro-Tech 9000 platform these two modules, machine sizes of ing plate, which ties together the side features built-in USB for such tasks as 10 x 24 ft, 10 x 28 ft or 10 x 32 ft (3.05 plate, screen panel and shaft assembly. uploading set-up information, downloading x 7.3, 3.05 x 8.5 or 3.05 x 9.75 m) can All 6-ft, 8-ft and 10-ft wide units are event logging, setting up multiple systems be configured according to the process built on platforms that combine a at once and enhanced system configura- requirements. The F-Class, in tandem machine width and a drive type, consist- tion. The built-in Ethernet enables the design, can also be operated at variable ing of an eccentric shaft assembly. platform to support a wide range of com- speeds and with different angles of incli- Within the platform, the customer choos- mon protocols and tie equipment into nation between the modules, creating a es basic parameters, such as screen existing systems or establish new process banana screen-type effect. The result, length and the quantity of decks the systems. Other features include an according to the company, is a fully cus- application requires. To optimally adapt improved HMI interface that supports mul- tomized screening system adaptable to to each operation, the customer then tiple languages (English, Italian, Spanish meet the needs of almost any application. configures multiple variables such as and German, among others); global Overall, F-Class screening machines deck set-up, suspension systems, rein- approvals; and common technology among are now available in widths ranging from forcing plates, wear lining and stroke and components and enhanced hardware 3 to 10 ft, all offering standard features speed combinations. design for improved serviceability. that include proven four-bearing technolo- The F-Class’s standard 18-month war- The Ramsey Micro-Tech 9000 plat- gy, minimal structural vibration and con- ranty (from date of shipment, 12 months form includes 10 models that will be sistent stroke. The F-Class, says W.S. from the installation date, or 6,000 oper- launched over several months. The first Tyler, has an advanced eccentric shaft ation hours, whichever comes first) can three devices to be released include the: design, supported by four high-perform- be extended with optional customer-spe- • Micro-Tech 9101 scale Integrator used ance, double spherical roller bearings. The cific warranty upgrade packages, accord- with Thermo Scientific Ramsey Series double eccentric shaft creates a constant ing to the company. 10-101R, 10-20 and 10-17 conveyor positive stroke that handles material vol- belt scale systems; ume spikes without losing momentum. As Communication, Diagnostic • Micro-Tech 9105 weighbelt feeder con- the eccentric shaft turns, the screen body Features Improve Efficiency troller used with Thermo Scientific is forced to follow the shaft movement. Thermo Fisher Scientific recently Ramsey Model 90-100, 90-125 and While it travels upward, the counterbal- launched its Ramsey Micro-Tech 9000 90-150 weighbelt feeders; and ance weights move in the opposite direc- Electronics platform, designed to provide • Micro-Tech 9100 static weight indicator. tion and create an equal force to that gen- enhanced communication and connectiv- erated by the body. As a result, the forces ity for process weighing and monitoring cancel each other, allowing a dynamically applications. According to the vendor, balanced system that transmits minimal the Ramsey Micro-Tech 9000 Electronics vibrations into the structure—allowing platform improves communication and multiple screens to be placed side by side efficiency via built-in Ethernet and USB while minimizing the installation costs of and prevents system downtime with inde- heavy structures. The design keeps noise pendent load cell troubleshooting. The emissions low for a quieter system and new platform replaces both the Thermo reduced overall plant noise. Scientific Ramsey Micro-Tech 2000 and The continual circular screening action Ramsey Micro-Tech 3000 series of elec- provided by the eccentric design also pro- tronic instruments. duces a constant, optimized G-force. Not only does this further maximize screening efficiency, it allows the F-Class to be an effective solution in both wet and dry applications, according to the company. Designed for high tonnage outputs, the F-Class can process up to 1,200 tons per hour, and screens virtually any material from 6 in. (152 mm) down to 20 mesh. To provide maximum versatility, the F-Class can be run with up to three screen decks. The unit features inclines from 10°–25° and comes with a base frame that allows for simple installation in a cus- tomer’s existing structure. The F-Class fea- tures a Huck-bolted screen body, allowing for extra strength and rigidity. Side plates are constructed with high-strength carbon Thermo Fisher’s Micro-Tech 9105 weighbelt feeder steel. The area surrounding the shaft controller. www.e-mj.com JANUARY 2013 • E&MJ 91 EQUIPMENT GALLERY Exploration Drill Meets Latest ATEX Standards

Deister BFO1820 Screen with Isolation Base

Mechanism is designed for use with large linear stroke screens and feeders. Multiple units can be positioned in series, and linked by flexible shaft couplings to provide better bearing life in conjunction with aggressive G-force. According to Deister, high-tech CNC manufacturing processes ensure tight tolerances and precision fits for the entire assembly, while innovative seal, shaft and bearing designs provide a rugged unit that is easy to maintain, espe- cially when combined with the Deister System Saver Oil Filtration system. Removable external counterweight slugs allow for easy output force adjustment over a wide speed range. The Exciter Mechanism can be driven by V-belts or direct drive flexible shaft. Another option for large screens is the Deister Isolation Base, which incorporates a secondary set of support springs, as well as shock Sandvik announced its DE100 series of have been replaced by steel parts on the absorbers, further isolating the forces gen- compact core drills for surface and under- DE130x. Additional features include an erated by the vibrating screen frame from ground exploration applications now extra gauge for rod holder surveillance on the stationary structure. includes the ATEX certified DE130x drill the control panel and a wire emergency www.deistermachine.com rig. The DE130x, according to Sandvik, is stop on the feed boom for increased safety. a fully certified exploration drill rig for mining.sandvik.com Safety Eyewear Offers underground coal applications and is Bluetooth Connectivity compliant with the latest ATEX standards. New Options for Honeywell Safety Products says its Uvex The design is based on Sandvik’s proven Mine-duty Screens AcoustiMaxx Stereo Bluetooth eyewear is an DE130 core drill, pictured above. Deister Machine Co. has introduced two all-in-one solution combining maximum According to the company, its modular new equipment options for mine-duty impact protection with hands-free voice design, depth capacity of 815 m (2,674 ft) screens. The company’s Exciter Vibrating communication. Uvex AcoustiMaxx en- N-size rod, feed force of 4.7 mt (10,350 ables workers in remote or noisy environ- lbf) and pull force of 6.3 mt (13,820 lbf), ments to focus on the task at hand while makes the DE130x a highly capable unit, staying in contact with their teams, improv- featuring a completely redesigned power ing safety and productivity on the job. This unit which monitors hydraulic oil tempera- introduction, according to the company, is ture, electric motor temperature and in- the first Bluetooth-enabled eyewear available coming power. Intrinsic safety circuits are for industrial applications. The eyewear fea- also included. The drill unit is certified and tures a wrap-around lens design and meets designed for maximum surface tempera- the ANSI-Z87.1-2010 standard for impact ture of +150°C (class T4). In accordance protection. Uvex AcoustiMaxx provides in-ear with Europe’s ATEX standards, some of the voice communication with cell phones, parts included on the standard DE130 Deister Exciter Mechanism smartphones and any other Bluetooth-

92 E&MJ • JANUARY 2013 www.e-mj.com EQUIPMENT GALLERY

from one source to either two or three des- tinations, and is claimed to be an ideal solution for applications that require a pos- itive seal from dust and fine powders. The TLD diverter is engineered to channel the flow of material away from the leading edge of the flapper vane. This feature is critical to maintain seal integrity and inhib- it material leakage across the closed legs of enabled voice communication product. Dual- the valve. Competitive flapper diverters microphone technology reduces ambient have a tendency to leak past the vane shaft noise pick-up, while a high-performance bal- and trap material underneath, the TLD anced armature driver delivers superior includes a shaft seal to eliminate this prob- stereo sound. Water resistant, the product is lem. To extend the life of the diverter, the FCC and Bluetooth SIG certified. TLD has abrasion-resistant liners that can www.honeywellsafety.com be replaced when needed. The TLD also comes standard with two removable access Gear Lube Approved for panels for inspection, cleaning and main- ment and thermal expansion, the PinMount Process Equipment tenance. Adapting the valve to a system is line’s design incorporates self-aligning rock- Bel-Ray announced its Clear Gear Lubri- made easy with position indication switch- er-style load cells, ensuring accuracy in an cant, in grades medium and heavy, has es and flanges. The valve also offers a wide array of industrial applications. In addition, received OEM approval from mine process variety of modifications to accommodate a PinMount’s dual anti-lift devices and verti- equipment suppliers Outotec and Metso. range of temperatures, corrosive, humid cal downstops prevent damage due to envi- This endorsement, according to the compa- and explosive environments. Many materi- ronmental forces and component failure. ny, qualifies the products for use as ring al construction options are available. www.mt.com/pinmount gear and pinion lubricants in those compa- www.vortexvalves.com nies’ minerals and metals processing prod- Compact, Maneuverable ucts. Clear Gear Lubricant is a Very High Weigh Module for Tanks, Rough-terrain Crane Viscosity full synthetic fluid gear lubricant Vessels, Silos Badger Equipment’s CD4415 rough terrain designed for use in open gear systems, Mettler Toledo says weighing large tanks, crane is compact at just over 11 ft tall, but particularly in rotating equipment such vessels and silos presents safety chal- offers a number of features including four- as grinding mills, cement kilns, driers, lenges, and weigh modules can be difficult wheel drive/steering for maneuvering in agglomerators and pelletizers. Critical capa- to install. In response, the company has tight spaces, multiple boom configura- bilities of this lubricant, according to Bel- introduced a new 100-ton PinMount weigh tions, an ergonomically engineered two- Ray, are prevention of wear, halting of exist- module that offers an opportunity to easily door cab with joystick controls and inte- ing wear trends and reduction/elimination and safely convert such structures into grated safety features such as steps and of vibration. Additional benefits include high-capacity scales, even in harsh environ- handrails. In standard configuration, the reduction of gear tooth surface tempera- ments and hazardous areas. The models in crane offers a three-section hydraulic actu- tures by up to 20% and up to 35% less the PinMount weigh module family weigh ated boom reaching from 24 to 62.5 ft lubricant consumption. from 7.5 to 100 tons, are designed to be (7.3 to 19 m) and boom elevation angle www.belray.com easy to integrate onto existing structures, range of 0°–70°. An optional configuration and provide important safety features. provides a one-section, 20 ft (6 m) jib giv- Flow Diverter Handles Because it can be difficult to obtain accu- ing maximum tip height of 85.5 ft (20 m). Abrasive Materials rate readings on tanks due to lateral move- www.badgerequipment.com Vortex Valves’ Titan Series TLD Diverter is designed for use in gravity flow applica- tions where abrasive material is diverted

www.e-mj.com JANUARY 2013 • E&MJ 93 CONSULTANTS & SERVICES

PROFESSIONAL SERVICES

FOR SALE

TARGET YOUR MARKET WITH CLASSIFIED ADVERTISING!

For more information contact: Norm Rose at (770) 664-0608 or [email protected] Tanna Holzer at (303) 283-0640 ext. 206 or [email protected]

94 E&MJ • JANUARY 2013 www.e-mj.com ADVERTISING INDEX FOR ADVERTISING CONTACT YOUR Aden Services...... 61 Groupe Forrest Int’l (GFI) ...... 60 INTERNATIONAL SALES

REPRESENTATIVES: AEL Mining Services...... 11, 75 Haulage & Loading 2013...... 17

Midwest/Eastern U.S. & Canada - Victor W. Matteucci Astec Mining...... IBC ITT Goulds...... 22-23 5931 Christopher Court Mentor, OH 44060, USA Atlas Copco - Boomer E-series ...... IFC K.S Yanase Industries Co, Ltd ...... 3 Tel: +1 440-257-7565 Fax: +1 440-257-6265 Baldor Electric Co ...... 13 Katanga Province ...... 68-69 [email protected]

Western U.S. & Canada - Mary Lu Buse bauma 2013 ...... 15 Longwall USA 2013 ...... 25 1667 N. Las Virgenes Canyon #8 Calabasas, CA 91302 USA BIA Overseas s.a...... 55 Malabar Group...... 66 Tel: +1 818-871-0125 Fax: +1 818-880-4024 BinMaster ...... 84 MineARC Systems ...... 37 [email protected]

UK, Scandinavia, Europe - Colm Barry Brunner & Lay ...... 39 Mining Media Int’l ...... 87 Vallgaten 20, 234 32 Lomma, Sweden Tel: +46 (0) 40 414178 CAE Mining ...... 77 Mining Media Int’l - Social Media ...... 89 Fax: +46 (0) 40 414178 [email protected] Camfil Farr APC ...... 9 PDAC 2013...... 19

Germany, Austria & Switzerland - Gerd D. Strasmann Strasmann Media-Promotion GmbH Caterpillar Inc - Congo Equipment ...... 70 Polytra ...... 72 Berghausen 29 D-42859 Remscheid, Germany Chemaf ...... 62 Roymec Technologies ...... 73 Tel: +49 2191 931497 Fax: +49 2191 931499 Demimpex Equipment ...... 79 Sandvik Mining ...... BC [email protected] E&MJ Website...... 21 Shaft Drillers Int’l (SDI) ...... 91 Japan - Masao Ishiguro IRM Inc. 1-5-3-304 Roppongi Fondaf ...... 64 Shalina Resources ...... 62 Minato City, Tokyo 106-0032 Japan Phone: +813 3583-1161 Gatewing ...... 83 Somika...... 63 Fax: +813 3582-2576 [email protected] Gécamines ...... 53 SRK Consulting ...... 57

Rest of World - Peter Johnson Geological Sciences Consultancy Co Ltd ...... 76 Tiger Resources Ltd ...... 54 8751 East Hampden Ave, Suite B1 Denver, CO 80231, USA Phone: +1 303-283-0640 Geovia (Gemcom)...... 7 Trio Engineered Products, Inc...... 49 Fax: +1 303-283-0641 [email protected] Grand Karavia Lubumbashi ...... 78 Volvo ...... 74

Grande Cimenterie du Katanga (GCK) ...... 71 World Mining Equipment (WME)...... 50

Corporate Office - Mining Media 8751 East Hampden Ave, Suite B1 Denver, CO 80231, USA VISITVISIT WWW.E-MJ.COMWWW.E-MJ.COM Phone: +1 303-283-0640 Fax: +1 303-283-0641 FORFOR MOREMORE INFORMATIONINFORMATION

www.e-mj.com JANUARY 2013 • E&MJ 95 MARKETS Gold Finishes 2012 Higher than it Started

By Steve Fiscor, Editor-in-Chief

As this edition of E&MJ was going to press, gold prices had fallen for the sixth consecutive week. Analysts were speculating that investors were worried that the U.S. Federal Reserve may tight- en its monetary policies. After the Fed released the minutes from its last meeting (January 3, 2013), gold con- tracts for February delivery declined to $1,648.90/oz. Several officials dis- cussed discontinuing a bond-buying pro- gram sooner than the end of 2013. During intraday trading gold fell as low as $1,626/oz. Be that as it may, gold fin- ished higher than it did one year ago. Quantitative easing has helped boost gold prices since the 2008-2009 global financial crisis. Investors sought gold as a safe haven to shelter wealth from cur- down 3% on the record average third Third quarter demand for gold in the rency weakness. Gold exchange traded quarter 2011 price. technology sector was down on Q3 2011 funds (ETFs) have made it easier for Investment demand (the sum of by 6% at 108 mt though it remains sta- investors to buy bullion. With the global ETFs and total bar and coin demand) ble. Use of gold in electronics has shown economy regaining steam, bearish senti- was 429.9 mt, down 16% compared to a steady level of incremental growth ments have entered the gold market, the same quarter last year, but was since the fourth quarter of 2011, driven which has been on a 12-year bull run. 23% above the five year average. by demand for tablet devices and mobile The World Gold Council recently Demand for ETFs and similar products phones among others. Both the supply of reported global gold demand figures for in the third quarter was up by 56% on gold and recycling were down 2% in the the third quarter of 2012. Demand for the previous year to 136 mt. Demand in third quarter compared to year earlier lev- the quarter was 1,084.6 metric tons the jewelry sector was down 2% to els, with mine production down 1% for (mt), down 11% from the record third 448.8 mt compared to 458 mt in the third quarter 2012. quarter 2011 figure of 1,223.5 mt. The same quarter in 2011. The ongoing On January 4, 2012, spot gold value measure of gold demand was 14% slowdown in China continued to damp- opened the day at $1,603.60/oz. One lower year-on-year at $57.6 billion. The en demand in the second largest year later, the spot gold price stood at average gold price of $1,652/oz was regional jewelry market. $1,656.80/oz , a 3.3% increase in value.

(January 4, 2013)

Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,656.80 Aluminum $2,056.00 Molybdenum $26,000 Euro (€) 1.3070 Silver $30.18 Copper $8,026.00 Cobalt $25,500 U.K. (£) 1.6072 Platinum $1,559.00 Lead $2,343.00 Canada ($) 1.0131 Palladium $687.00 Nickel $17,325.00 Iron Ore ($/dmt) Australia ($) 1.0484 Rhodium $1,080.00 Tin $24,000.00 Fe CFR China $150.75 South Africa (Rand) 0.1169 Ruthenium $85.00 Zinc $2,027.00 China (¥) 0.1589

Gold and silver prices provided by KITCO Bullion dealers (http://www.kitco.com). Platinum group metals prices provided by Johnson Matthey (http://www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (http://www.lme.co.uk). Iron ore prices provided by Metal Bulletin Iron Ore Index. Currency exchange rates were provided by the GoCurrency.com.

96 E&MJ • JANUARY 2013 www.e-mj.com