August 2007

Micro-mining builds sustainability into extraction processes

By E. Hinton and K. Palmer

Large-scale mining such as this is not the only way to extract mineral resources. Mining on a smaller scale has a role to play in creating wealth for companies and communities.

In many parts of the world, communities are taking a “just say no” approach to the usual boom-and-bust style of mining. Rather than accepting a large influx of outside people, who may bring with them economic disruption and social problems, they are looking for a more sustainable future.

Resistance to traditional mining is made more acute as governments increasingly feel obligated to listen to their peoples’ wishes and heed them. Some of this is due to the growing power of non-governmental organizations, which can quickly mount Internet-savvy publicity campaigns that reach into mining companies’ boardrooms, to object to developments that local people are resisting. Some of it is also due to the growing influence of the Equator Principles, under which lending institutions refuse to provide financing for projects that do not pass accepted sustainability thresholds.

Do the words “mining” and “sustainable” fit together?

They can, through what we can call “micro-mining.” This involves a search for small, concentrated deposits that can be extracted at relatively low cost. This keeps the financial commitment relatively small. Aside from some startup capital, financing stays organic, through earned revenues. This means living within the means of the deposit. The workforce is largely local, backed by sufficient outside expertise.

While it may seem radical, this is actually a long-established model. The world’s first mines were probably family businesses, with equipment and workforce financed through revenues. Many communities grew up around the slow, sustainable extraction of a resource. Consider the wealth of Salzburg, Austria - with a name that just means “Salt City” and which grew over the centuries as local entities mined the “white gold” of nearby deposits - continuing today.

So, while many juniors and majors are busily chasing elephants, pressures are gradually building to force another look at previous mining models that may form a glimpse of an alternative future for part of the mining sector.

What distinguishes a micro-mine from a business-as-usual mine is most saliently the size of the deposit. It should be of a size that flies below the radar of conventional mining, so that a company seeking to extract it will not wind up in a bruising price war with a larger company with deeper pockets. The deposit also needs to be relatively high grade, so that excessive amounts of startup capital and earned revenues are not lost in the need to pay for long access drifts and other infrastructure. It must be near the surface - we think within 200 metres. Because the financial pockets of the proponents are also likely to be shallow, the rock should be relatively free of hydrogeological concerns such as fractures that will cause excessive de-watering requirements and acid-rock drainage issues.

The kinds of mineral wealth that can be sought are quite broad. Pods of gold ore, with concentrations of perhaps two to three times the usual levels, could work well. The same goes for other minerals, such as tin, possibly diamonds and other gemstones, as well as rare earths.

In other ways as well, the mine needs to be low key and, in some ways, low tech. The shaft, which can be a significant expense in most mines, becomes a lower cost item with micro-mining. It may be just three metres in diameter. A 25-metre headframe can be assembled in a couple of days, with the hoist itself costing about $150,000 and the hoist-room $40,000.

In keeping with the “small-is-beautiful” micro-mining philosophy, a gravity concentration process - a “dirty con” - is all that is necessary, at least to start with. When there are more retained earnings available, it may be possible to move to a more advanced type of mill. To make the plan as sustainable as possible, it is important right from the start to re-invest earnings in further exploration, either to try to extend the mineralization being worked by the current mine or find other likely nearby deposits.

Just as important as these “hard” aspects of success are the “soft” issues such as community support. The nearby people must be convinced that the mine is a positive thing for their future. Going one step further, it becomes, in effect, a community mine providing long-term stable employment for people in the community. This can be highly attractive to First Nations entities, which can provide a small, closely knit workforce from the local community. This suits the values of many First Nations people in that they are working with team members who are also neighbours, possibly relatives.

The mine may “work” best from a community perspective if it fits into the community’s lifestyle and values. This may include shutting down for the winter or during hunting season, when many community members fill their freezers with a year’s meat supply. The mining will also need to be done in a way that respects the community’s perspective on the value of nature.

If the idea of the mine is presented locally as a way to help provide municipal revenues and well-paying jobs for community members, the local municipality will likely be eager to support the project. Leaders may see this as a way to breathe new economic life into their community, where unemployment rates may be high and the only formal jobs available may be with the local Band or municipal offices and other public-sector entities such as the schools. With this possible future in front of them, the community can be encouraged to press for startup funding and training investment from the provincial or federal government.

Successful micro-mining requires the right kind of consulting support. This means finding someone with a wide range of skills and understanding, able to contribute to all aspects of success, right from exploration through to closure. The consultant needs to know more than geology; it is important to understand the finance world and be able to help present the concept to financial sources as well as government entities. The consultant also needs to support the overall philosophy, which includes skills transfer, so that local people develop marketable capabilities they can apply to other projects.

Many people in the mining sector, schooled in the “go big or go home” way of mining, will find the idea of micro-mining slow and unattractive. But for those who want to contribute to a community’s well-being and build a sustainable business model, it may be a glimpse of a better future.

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