Dec '14/Jan '15

Editor's letter

The year ahead

By Ryan Bergen

Ryan Bergen Exploration budgets in 2014 were some $4.5 billion smaller than they were in 2013, according to the estimates of a recent report from SNL Metals and Mining. The study focused on the spending decisions of 2,000 companies exploring for non-ferrous metals and has charted a steep decline from the impressive peak in 2012 when more than $22.8 billion was portioned out to mining and exploration companies to find new deposits.

The report also reveals that the pile of money dedicated to exploration last year – $12.9 billion – towers over those that were commonly available in the 1990s and early 2000s. In other words, times have been better and they have been worse.

Despite the huge sums that have flowed into the mining markets in the last few years, that new investment has not been very productive, writes Doug Pollitt in his piece “Where did all the gold money go?” He dismisses the argument that rising costs cancelled out the advantage of extra capital. Much of the cash, he argues, served as fuel for bad decisions.

Today, in operations as in exploration, the money that prompted those decisions is harder to find. In its absence, the problem of decreasing productivity has become more pronounced. The response seems to be an increasing urgency to the discussion of step changes across the industry: whether it is devising a more energy-efficient approach to haulage or comminution, liberating minerals by putting microbes to work, or dreaming up a smarter way to locate drill targets. Metallurgists challenged each other on the subject at their latest annual conference. Ian Ewing chronicles the debate in “Step change vs. operational improvement.”

The industry orthodoxy holds that innovations are best when someone else takes the risk, but as veteran metallurgist Terry McNulty discusses in an interview with Correy Baldwin, this idea is not really supported by the evidence. From what he has discovered through his observations on plant start-up performance, the risk in implementing new technologies relates to its management.

Whether the start-up is of a proven technology or a novel one, the rigour applied to the implementation goes a long way to determining its success.

While today may not be the best time for reinvention, McNulty’s findings make it hard to argue it is the worst if discipline and good judgement are designed into ambitious projects. We at CIM Magazine are eager to detail how such developments unfold.

Ryan Bergen

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