November 2014

Industry at a glance

By Chris Balcom, Tom DiNardo, Chris Windeyer

Newmont resumes Indonesian exports

After a long standoff with the Indonesian government, Newmont Mining Corporation’s Indonesian subsidiary, PT Newmont Nusa Tenggara (PTNNT), has resumed exports of unprocessed copper concentrate from its Batu Hijau operation.

Exports were halted in January after a government law came into effect banning exports of unprocessed minerals. The ban was part of an ongoing effort to develop the country’s domestic processing industry.

In early September, the company signed a memorandum of understanding (MoU) with the Indonesian government whereby PTNNT will pay an export tax of 7.5 per cent on its copper concentrate, considerably less than the previous Indonesian demand for a 25 per cent tax. The company further promised to provide a US$25 million assurance bond to demonstrate its support for smelter development, and pay royalties of four per cent for copper, 3.75 per cent for gold and 3.25 per cent for silver, and a nominal dead rent per hectare.

Exports of existing copper stockpiles resumed at the end of September, but production at Batu Hijau, the site of the company’s only Indonesian mine and mill, is still ramping up after mining was stopped in June.

Newmont has said it supports the government’s efforts to improve the country’s processing capacity. The com­pany has signed agreements to supply two Indonesian companies plan­ning to build copper smelters, and has also signed an MoU with Freeport-McMoRan’s Indonesian subsidiary to develop a smelter, said Newmont spokesman Omar Jabara. Freeport, the other major exporter of Indonesian copper, reached a similar agreement with the government.

– Chris Balcom

Lake Shore Gold recognized for safety program

Workplace Safety North (WSN) recently presented its annual President’s Award in the mining sector to Lake Shore Gold of Timmins, Ontario. The award is bestowed on the highest performers among recipients of WSN’s Workplace Excellence Awards, granted to companies that receive higher than 80 per cent on a self-assessment survey of its safety practices across all operations. One company from each of the sectors overseen by WSN – forestry, mining and paper, printing and converting – wins the President’s Award.

The survey addresses a wide range of issues relating to health and safety, including worker training, injury investigation procedures and workplace inspections. Companies check boxes to confirm compliance with guidelines such as, “system is in place to encourage employees to report incidents (including non-injury or damage).” Points are awarded for each box ticked, out of a possible 150. The survey must be completed with input from both workers and management. A firm’s statistical performance in areas such as injury frequency is also taken into account.

“Winning the President’s Award comes with a great deal of pride and satisfaction on the part of everyone at Lake Shore Gold,” said Jamie Mortson, health and safety manager.

The company registered for the workplace excellence awards without any expectation of winning the President’s Award. “We participated in order to determine the progress with our safety program and to identify opportunities for improvement,” Mortson explained. “The President’s Award was not on our radar, but we were hoping for some recognition by qualifying for one of the Workplace Excellence Awards.”

Mortson said it was exciting to be recognized, especially considering the stiff competition from more established operations. The company, which began mining in 2007, currently operates two mines close to Timmins: Timmins West and Bell Creek. In the first half of 2014, Timmins West produced 76,000 ounces of gold. Bell Creek, in the first quarter of this year, produced 10,700 ounces of gold.

Mortson also acknowledged that health and safety standards require constant attention. “Yes, it’s a very prestigious milestone to reach,” he said, “but you know there’s always room for improvement.”

– C.B.

First production at Éléonore

Goldcorp Eleanore aerial Aerial view of Goldcorp’s Éléonore gold mine in the James Bay region of Northern Quebec | Courtesy of Goldcorp

Goldcorp recently moved one step closer to commercial production at its new Éléonore gold mine. On Oct. 2, the company announced it had achieved first production at the mine, having poured the first 70-ounce doré bar the previous day.

“I am pleased to announce first gold production at Éléonore, on schedule and in line with our capital cost guidance,” said Goldcorp president and CEO Chuck Jeannes in a press release following the gold pour. “The team has done a tremendous job bringing this mine into production safely, in partnership with the Cree Nation of Wemindji, the Grand Council of the Crees of Eeyou Istchee, the Cree National Government, and our suppliers and contractors from Quebec.”

Located in the James Bay region of northern Quebec, Éléonore has been under development for the last four years. The company anticipates the site will produce 40,000 to 60,000 ounces of gold in the remaining months of 2014, with commercial production beginning in 2015. By 2018, output is expected to reach 7,000 tonnes per day. 

– C.B.

Quebec government invests in phosphate project

Arianne Phosphate’s Lac à Paul project in Quebec recently received a boost of confidence from the provincial government. In September, Investissement Québec invested $2 million in the project, located in the province’s Saguenay region. The investment represents 25 per cent of the $8 million raised thus far in the first round of financing.

While the government’s investment is just a fraction of the $1.2 billion currently required to bring the project into production, Arianne chairman Pierre Fitzgibbon emphasized the strategic significance of the investment. “I think [the government investment] will lend legitimacy to the project in terms of social acceptability,” he said. “Having the gov­ern­­ment endorsement sends a message that [the project] is open for business.”

The company released the feasibility study for the phosphate rock project last October, which outlined an open-pit mine, processing operation and trans­port system that would yield three million tonnes of phosphate concentrate per year over nearly 26 years. Fitzgibbon said the company is aiming to have all the necessary permits from the government and begin construction before the end of next year. In the meantime, it has begun consultations with the local Innu communities.

– C.B.

FedNor supports supply and service startups

Onaping training facility

NORCAT’s underground mine training facility in Onaping, Ontario | Courtesy of NORCAT

The federal government recently stepped up to fund development of the mining service and supply sector of northern Ontario. Natural Resources Minister Greg Rickford pledged $1.25 million to the Northern Ontario Centre for Advanced Technology (NORCAT) and $681,644 to the City of Greater Sudbury in August. The funding will be distributed through the Federal Economic Development Initiative for Northern Ontario (FedNor) agency, which is also headed by Rickford.

NORCAT plans to put the money towards three projects. The first is the creation of the Fortin Discovery Lab, a manufacturing facility where local mining service and supply companies can access the latest technology, such as 3D printers, to help develop their products. NORCAT Commons, another new project, will serve as an incubator centre for tech start-ups, where entrepreneurs can collaborate and seek mentorship. Finally, NORCAT will also improve its underground mine training facility in Onaping with new technology and services.

As for the City of Greater Sudbury, the funds will help expand its Mining Supply and Service Export Assistance program, which aims to connect local companies with partners overseas and facilitate their expansion into international markets.

“This isn’t just an investment in studies and projects, it’s an investment in expansions and upgrades to increase capacity in key areas for the tech and innovation side of mining,” Rickford said, adding that he was ultimately interested in job creation. He expects the funding will create about 50 jobs for northern Ontario.

“When there’s a dip or a decrease in extractive activity, it’s technology and innovation, and supply and service that keep jobs and investment going in mining,” Rickford explained. “It’s a way of sustaining jobs in the sector when activity does slow.”

According to Rickford, the Sudbury project is expected to begin shortly while the NORCAT expansions and renovations are well underway.

– C.B.

Manitoba boasts two new mines

After seven short years, Hudbay Minerals commissioned two mines in northern Manitoba. The Reed and Lalor mines officially opened in ­September with a ceremony attended by representatives from the Manitoban government. Mineral Resource Minister Dave Chomiak cited the short pre-production phases as a testament to Manitoba’s effective regulatory regime and attractiveness as a site for mining investment.

Of the two new mines, Lalor has the larger deposit, the potential of which was first reported by Hudbay in the summer of 2007. The mine is located 15 kilometres from the company’s Snow Lake concentrator and has Probable gold, silver, zinc and copper Reserves of 11.3 million tonnes, Proven Reserves of 1.3 million tonnes and a projected mine life of over 15 years. The Reed copper mine, 45 kilometres west of Snow Lake, holds Probable Reserves of 2.1 million tonnes and a mine life of five years. VMS Resources announced the discovery of the deposit in 2007 and now holds a 30 per cent stake in the project.

Copper ore from the Reed mine will be transported to Hudbay’s existing concentrator in Flin Flon, where zinc and copper from the company’s 777 mine are already processed. The ore from Reed will bring the Flin Flon concentrator up to its capacity of 2.18 million tonnes per year. “As we had a little bit of room in our Flin Flon operation with which to treat the ore, the Reed deposit becomes quite attractive, and we’re able to quickly turn a small deposit into some relatively quick economic gains,” said Hudbay vice-­president, Manitoba Rob Winton.

– C.B.

Ontario funds canopy project

CEMI canopy

The Centre for Excellence in Mining Innovation’s (CEMI) canopy system consists of two steel canopies (one shown above) that expand laterally and vertically to fill the dimensions of a drift and allow rapid and safe underground development | Courtesy of the CEMI

Recent funding from the Ontario provincial government is going to help improve safety and efficiency in underground development. Premier Kathleen Wynne committed $783,916 to the Centre for Excellence in Mining Innovation (CEMI) in September through the Northern Ontario Heritage Fund Corporation to fund the completion of the first phase of its mobile canopy project.

The canopy system, once completed, will allow simultaneous drilling, blasting and ground support during underground development. The system involves two steel canopies – a larger one covering the jumbo drilling and loading the face, and a smaller one over the ground support team – that expand laterally and vertically to fill the dimensions of the drift under development. The canopy will push against the roof of the drift to protect workers within from falling rock.

Once drilling, loading and bolting are complete, the canopy closest to the face will retract and be placed within the bolting canopy to prevent any damage from the blast. Then the face is mucked, and the jumbo and ground support team return for another cycle. “We are trying to get more activities out of the critical path,” said Douglas Morrison, president and CEO of CEMI. Morrison predicts the canopy system will double the advance rate of underground development.

CEMI completed the design and construction of the first canopy in September and it plans to begin Phase 2 of the project in January in which it will create a second canopy, take it into a drift heading and trial the technology in an operational setting. The third and final phase, expected to begin next September, will be to build two canopies and to test the entire system.

– Tom DiNardo

Construction begins at Greenland ruby mine

Greenland’s nascent mining industry got a boost in September when Vancouver-based True North Gems announced it was beginning construction on its Aappaluttoq ruby mine near the southwestern coastal town of Qeqertarsuatsiaat.

Earlier in September, True North Gems announced an $11-million investment deal with LNS Greenland, a Norwegian mine construction firm. That investment is on top of an earlier agreement which saw LNS acquire a 20 per cent stake in Aappaluttuq in exchange for $23 million worth of planning, engineering and infrastructure investment. All told, LNS owns 27 per cent of the project.

It is not enough to fully finance the $41-million construction cost, but as Bent Olsvig Jensen, managing director of True North Gems Greenland, told the Arctic Journal, “At least it’s enough to get started.”

Aappaluttuq has the potential to become the first operating mine during Greenland’s latest push to develop a resource economy. North American Nickel is drilling near Aappaluttuq and the Greenland government last year lifted a moratorium on uranium mining. The True North Gems project has Probable Reserves of more than 161,000 tonnes of ore with a grade of 350 grams per tonne and a nine-year projected mine life. The company plans to begin production in 2015.

– Chris Windeyer

Student wins global recognition for oil sands tailings treatment method

Eighteen-year-old Hayley Todesco’s innovative research on tailings treatment has been getting a lot of attention in the past few months. The first-year University of Alberta student won the 2014 Stockholm Junior Water Prize in early September and the Google Science Fair prize for her age group just a few weeks later.

Todesco’s award-winning project involved testing the effectiveness of sand filters as bioreactors for tailings pond waste. The Calgary native has said that her research was motivated by environmental concerns in the oil sands of her home province.

Her findings demonstrate how slow sand filtration (SSF) technology can be used to biodegrade naphthenic acids (NAs), a toxic component of oil sands tailings water. The SSF acts as a filter as contaminated water passes through it, leaving a biofilm on top of the sand bed. Invented in 1804, SSFs have long been used for municipal water treatment.

Over the course of her two years of research, Todesco compared the sand filters with planktonic batch culture (PBC) bioreactors. In her experiment, SSF bioreactors reduced NA by 92.33 per cent in one week (from 100 milligrams per litre (mg/L) to 7.67 mg/L). In contrast, PBC bioreactors only reduced NA by 37.55 per cent in the same period.

While Todesco produced her findings on a fairly small scale, she maintains that the potential application of her discovery is highly significant: “Based on my results, 400 Olympic swimming pool-sized SSF bioreactors could potentially bioremediate the NAs in all oil sands tailings free water (as of 2025) in less than 20 years (14 times faster than PBC bioreactors),” she wrote in a summary of her research posted on the Google Science Fair website.

– C.B.

Ontario releases health and safety progress report

Ontario’s year-long examination of health and safety issues in underground mining is not yet complete, but the province’s Ministry of Labour has already begun recommending changes to improve worker safety. In September, George Gritziotis, Ontario’s chief prevention officer and chair of the Mining Health, Safety and Prevention Review, presented a progress report on the work it has done since it began in January.

According to the report, the Ministry of Labour has undertaken three key initiatives so far. The first has been to develop a best practice guide on high-visibility apparel for underground mining operations, which was released this summer. This includes issuing high-visibility clothing to workers operating close to vehicles without a physical separation and those who perform tasks that could divert attention away from an approaching vehicle. The review board plans to explore the potential of improving standards for high-visibility clothing in the coming months.

In May the ministry released the 2014 Joint Health and Safety Committee Certification Training Program and Provider Standards. Under these standards, training will be required on a minimum of six hazards specific to an individual’s workplace from a trained professional.

The ministry has also initiated a pair of research projects to increase health and safety knowledge in the mining sector. First was the creation of the Ontario Mining Exposure Database that is being developed by the Occupational Cancer Research Centre to centralize and track miners’ exposure to carcinogens. This data will be used to develop prevention strategies, predict the future burden of disease among mining employees and determine safe levels of exposure to certain hazards. The second project, being conducted at Laurentian University, is studying how protective equipment can reduce foot-transmitted vibration for operators of underground equipment.

A complete reporting of the review board’s findings is expected to be published early next year.

– T.D.

Rising demand from China and India likely to increase prices by 2020s

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