Good advice and quality data – applied early in the planning phases – sets a mining project on track not just for profitable operation, but also for longevity and sustainability through both the ups and downs of the commodity cycle.
According to Andrew van Zyl, partner and principal consultant at SRK Consulting, the value of upfront input from experts is that developers and investors “find out what they don’t know” and gain the assurance that technical and financial studies are optimally conducted the first time round.
From left to right: Andrew van Zyl, SRK Consulting partner and principal consultant; Corporate consultant Roger Dixon; Marcin Wertz, partner and principal mining engineer; and Norman (Noddy) McGeorge, principal mining engineer.
It also ensures that a full 360° mining perspective, taking into account the technical, financial, environmental and social risks, can be addressed timeously so that they are fully exposed and factored into project planning.
SRK will be showcasing its 360° mining perspective at its exhibition booth at the 2017 Investing in African Mining Indaba in Cape Town in February 2017.
“It is difficult enough to prove a discovery and bring a project on-stream within the available budget,” says Van Zyl, “but the real test of success is whether that mine can be designed to operate within the lowest possible cost quartile.”
Achieving a profitable operation starts with finding the right strategy as early as possible, which must address all the modifying factors that stand between the project’s in-the-ground mineral resource and its economically mineable mineral reserve.
“Among the increasingly important strategic factors is the social license to mine,” he adds. “Recent stoppages and disruptions at Anglo American’s Los Brancos mine in Chile show that social licence is becoming more tenuous and difficult to maintain.”
He says increasingly onerous regulatory frameworks applied by many lenders and governments pushing mines to move ‘beyond compliance’ to fully integrating environmental and social management into their business philosophy and practice.
Van Zyl believes it is increasingly vital for project champions to seek professional guidance from a very early stage, even before the formal technical studies are initiated. “Benefits from early consultation in the exploration phase, for instance, could relate to the extraction, sampling and storage of drill cores in a way that allows for further testing and checking of results at a later stage.”
Indeed, technology itself needs to be high on the agenda of choosing the optimal project strategy – as falling productivity in mining globally threatens the industry’s sustainability, according to SRK corporate consultant Roger Dixon.
“With productivity levels today 25-30% lower than they were a decade ago, it is not enough for mines to focus on isolated areas of operation for a magic bullet. Progress in mining will shift from how well the operation moves material to how well it collects analyses and acts on information to move material more productively.”
Marcin Wertz, partner and head of the mining unit at SRK, highlights the team approach to mining studies, with each team-member being keenly aware of the impact of their decisions on other aspects of the project: “Advances in technology allow more sophisticated modelling and integration of various key aspects of mine planning – from orebody, structural geology, geohydrology and geotechnical engineering to mine planning and scheduling.”
“The ‘holy grail’ is to have one sophisticated model comprising elements of all these disciplines; this optimises the mine plan, secures better efficiencies, and reduces project risk. Too often, costly mistakes occur at implementation stage due to, for example, insufficient orebody knowledge.”
Access to water and energy are also key factors for new projects, as competition for these scarce resources grows and the likelihood rises of conflict with stakeholders.
“Many of the most prospective mining areas in Africa, for instance, are water-scarce – and it is no simple matter to secure long-term access to affordable water,” says Van Zyl. “Channels of communication with other users must be closely managed, while on-site usage strategies must prioritise conservation and strict environmental compliance.”
Similarly, energy constraints in much of Africa – and rising electricity prices in countries like South Africa – mean that today’s mine energy designs must address higher risks, better efficiencies and smarter application.
According to SRK principal mining engineer Noddy McGeorge, energy planning could include altering production plans to meet the needs of load balancing, exploring energy recovery systems and installing more secure power sources on-site. “Savings can be valuably found where energy usage is highest. A good example is in fuel consumption in open-pit operations; about 70% of diesel consumed is used in elevating waste material to be dumped – so any design innovations that reduce the amount or position of waste can help cut the diesel bill.”