Engineering and Construction
Market challenges necessitate business evolution
Ontario's reputation as a jurisdiction where companies have consistently delivered successful projects has made it a top destination for contractors. As a result, competition in the province is intense as businesses strive to secure contracts and establish a foothold in the market. From the mining company perspective, the expertise EPCM’s offer is another factor that makes Ontario an attractive location. Ultimately, the knowledge and experience that contractors and consultants bring to the table increases a miner’s chance of success in managing budget and schedule, and enables companies to continually reconsider pathways to optimization as assets mature. This is key in maintaining operations that function profitably over long periods.
Zimi Meka, co-founder and CEO of Ausenco, which has expanded into the Ontario market, and has the EPC contract on Argonaut’s Magino project, observed that raising finance on the junior end of the client base has been increasingly difficult, especially in the latter half of 2022. Nevertheless, good projects are progressing despite capital being more expensive. His perspective on future projects in the province: “Ontario is the engine room of the Canadian mining industry, and it will keep being that.”
Optimizing and Innovating Underground
As companies go to increasing depths to mine, this presents an opportunity for contractors specialized in that space. Technica Mining, Cementation, Redpath Mining, Dumas Mining and DMC Mining Services each have a strong history delivering underground projects to customers. For example, Redpath will provide engineering services and design work for infrastructure that they ultimately end up building. Redpath also does a significant amount of tunneling and lateral development work, different types of vertical excavation, as well as underground contract mining. The benefit of working with a company like Redpath is that it can provide both management and execution of a project. A former mine operator himself, Paul Healy, president Americas at Redpath Mining, highlighted: “Mine operators are great at operating mines, but are not necessarily as effective at building them. We have great expertise in design, procurement and construction to help clients not only execute the work, but also to manage the work.”
Redpath sees a promising future underground and is already exploring ways to boost the safety profile of a mine by using new technologies. One of the areas Healy finds most promising is the progression of automated equipment. “Using automated equipment reduces risks for operators as they do not necessarily have to be underground. It also increases productivity as the equipment can continue operating even during shift changes or if the operator is unavailable for a period of time,” said Healy. “In light of the global skills shortage, finding people that are qualified to operate equipment is not easy. If the equipment can do the tasks without human control, then the knowledge and training requirements are not as significant as before.” Michal Jezioro, president and managing director at DMC Mining Services, seconded Healy’s view with regards to the impact automation will have in underground mining. “Technology, especially automation, has significantly improved mine safety, allowing operators to work remotely - away from dangerous underground conditions. Equipment and underground vehicles are also designed with operator safety in mind and are most likely the safest place to be in an underground mine,” he said.
“There are innovative technologies today which optimize the extraction processes and impact a project’s economics. Coarse particle flotation is one area in which DRA has gained significant expertise, but companies first want to see proven results before adopting these technologies.”
Pierre Julien, President - DRA Americas, DRA Global
DMC is particularly well known for having successfully executed shaft sinking projects of varying depths and diameters in some of the most challenging conditions and geologies around the world. While innovation is important, Jezioro underscores the fact that advances must be pragmatic and practical considering safety, cost, and schedule. Most recently, DMC pioneered the world’s first Shaft Boring Roadheader (SBR) machine with Herrenknecht and sank the first two mechanically excavated shafts at BHP’s Jansen mine. Cementation also has a core competency in shaft sinking, and is currently sinking one of the deepest shafts in the Sudbury Basin. In outlining the advantages of shaft sinking, Cementation managing director Eric Smith noted: “Depending on orebody depth and size, constructing a hoisting shaft is a bit more capital-intensive upfront versus using diesel trucks to haul ore to surface, but over time, less energy is required for hoist haulage and it carries a lower carbon footprint. Using a shaft or other haulage solution that relies on electricity can be greatly beneficial to our clients in the long run.”
Dumas Mining distinguished itself for its work on The Hudbay Lalor mine project after being awarded the sinking of the main production shaft in 2011. The company successfully executed the sinking of a 1,000 m deep, 6.7 m diameter, concrete line production shaft, which was completed in 2014. Because of the quality work Dumas demonstrated, it was contracted to return to site in 2016 to assist Hudbay in mine development, mine production, and several other mine construction and infrastructure projects. “One of the things that stands out from that project, outside of all the mine physicals we achieved, is the relationship and the supporting contract structure. It is truly a testament to how a mine owner and a mine service provider can work in complete unison realizing a one team approach,” said Jeff Huffman, president and COO of Dumas Mining, which is now majority owned by STRACON.
“Training at the levels and the quantities required to feed this industry for the future is going to be a huge challenge. There are thousands of jobs that are going to be required to feed projects coming online.”
Jeff Huffman, President and COO, Dumas Contracting Ltd.
Contract Labor
While the technical achievements are deservedly celebrated, Huffman’s observation is that one of the biggest threats to the industry in recent years has been the skilled labor shortage. As a contractor, Dumas is often looked upon as a feeder of skilled workers to operating mines, and as demand for workers continues to outstrip supply, the company finds itself in an increasingly competitive environment. “We are specialists in recruiting, and we have a high skillset for training. We also own a lot of mining equipment, but we do not own a mine,” explained Huffman, who went on to speak of the added issue that the large cost associated with training poses. “Training at the levels and the quantities required to feed this industry for the future is going to be a huge challenge. There are thousands of jobs that are going to be required to feed projects coming online,” he said.
Pierre Julien, president of DRA Americas at DRA Global, which completed the Kamoa-Kakula mine in the DRC this past year, and has grown its Americas presence from about 45 employees four years ago to over 350 employees today, conveyed that from a human capital perspective, the mining industry is putting in the effort to engage society. However, more needs to be done to increase the flow of people into mining specific sectors. “One suggestion is to fast-track immigrants with specific mining area capabilities through the process if they commit to working in mining. The other suggestion for getting our own Canadian students into mining programs is to offer them student loan forgiveness if they work in the mining industry for three years following graduation,” Julien offered.
Best Practices
When it comes to best practices at a mine site, it is exceedingly clear that in the current market companies must be careful in how they manage risks. Cementation managing director Eric Smith’s advice to companies contemplating projects to develop or build mines is that they must have a sound understanding of the risks, and then be realistic about putting contingency against those risks. “There is the temptation to “goal seek” a project budget to align with pre-determined finance limitations. However, this leads companies and contractors to leverage themselves on committing to project budgets and schedules that are difficult to achieve.”
Exploring New Models
Sudbury-based Technica Mining began with the goal to be the best contractor in underground infrastructure and construction with a specialty in planned and emergency plant maintenance, but continues to evolve with respect to offerings and contracting models. Technica Mining CEO Mario Grossi recalled: “We hit a pivotal point in 2010 when we realized that we needed to add mechanized development into our suite in order to be a full-service underground mining contractor,” he said. Today, the company has expanded to approximately 400 employees, with additional offices in Timmins, and Val d'Or, Québec.
Much of this growth came from executing large-scale, complex planned and unplanned plant maintenance shutdowns. “Millions of dollars a day in revenue are put on hold when mines shutdown production to work on their ore handling systems (grizzlies, ore passes, chutes, conveyors, loading pockets, shafts, headframes etc.) and every minute counts. We have consistently delivered these highly technical and very complex projects ahead of schedule and on budget,” Grossi commented.
Today, Technica is in a position financially to help juniors with alternative financing models. Grossi explains that he identified a gap in service offerings for the transition from junior exploration to advanced exploration bulk samples, and then into early-stage production. This gap came in the form of either knowledge, skills, and experience, and or money, and sometimes both. “We have a fantastic in-house geologist, which is rare in the contractor world. He evaluates junior mining projects that have good potential to move forward into production, and we then offer our services with the option of our fees being paid through equity. We realized that this model works really well when used with extreme discipline, and has been a fantastic tool to help take Technica Mining to the next level,” Grossi highlighted.
Article header image courtesy of Technica Mining