Engineering
Boosting profitability
In October 2023, the global consultancy firm EY published its Top 10 business risks and opportunities for the mining and metals sector in 2024. According to the report, ESG factors remain paramount, ranking first. Capital takes the second spot, followed by license to operate, with climate change, digital innovation, costs and productivity, geopolitics, cyber security, new business models, and workforce in the last place.
Thus, across all five top trends, a segment comprising consultancy firms, engineering companies, and constructors plays a pivotal role in assisting mining clients navigate complex permitting frameworks, develop strategic approaches, and ensure compliance with environmental stewardship, all while fostering positive relationships with stakeholders with different interests.
Unlocking Tailings
Mining Plus' US director, Scott Britton, is noticing two major industry trends in the Western USA. First, the increased potential for expanding existing mines and rising mining costs outweigh the potential for developing new mines. The second is that the times required for new mining projects are becoming longer. Thus, companies opt to sustain existing operational mines for longer, exploring deeper or at brownfield sites rather than investing in new greenfield projects.
S&P Global reports that in the early 2000s nearly half of the world's exploration budgets were allocated to grassroots exploration, but this has declined in recent years. According to PDAC's 2021 figures, the last year grassroots exploration peaked was in 2008 (around US$5 billion), followed by a drop to US$2 billion in 2020 and another peak in 2021, reaching US$3 billion. "Even though it seems grassroots exploration is recovering, operating companies focus on expanding deeper and larger operations to capitalize on favorable commodity prices," said Britton.
Anne Thatcher, senior vice president at Arcadis, has noticed that mines that were supposed to be closed 10 years ago have stayed open. Clients are exploring more in those sites, a decision also driven by the premium of producing in North America. "They are investing in the Western USA because they found that allocating their resources globally has not necessarily produced a return on investment," she said.
Arcadis, with expertise in tailings, is helping its clients to understand what type of critical minerals they have in their waste rock or tailings, as well as helping them to understand the geochemistry, how to reprocess it, and the chemical engineering needed to transform the waste into something profitable.
Tailings are a tricky asset or liability. They often contain harmful chemicals and heavy metals, and managing tailings is a critical concern. However, they can also contain value. In the Western USA, copper is the principal contributor to the total volume of tailings (33%). With a lack of new copper mines in the near term, technological advancements today have made it possible to extract value from what was once considered waste.
Arcadis has been busy helping its clients to meet the new Global Industry Standards on Tailings Management (GISTM) directrices: "Our clients are adapting to their evolving needs to comply with the 77 substandards of the GISTM. Many of those substandards relate to geotechnical engineering, but some also relate to community impact, risk, biodiversity, hydrology, and hydrogeological conceptual site models," stated Thatcher.
For Peter Kowalewski, Tierra Group International's founding principal, the GISTM represents a significant industry shift. "Companies have begun to understand the liabilities that tailing storage presents to operations, ranging from the risk they pose to workers and inhabitants around the facilities to the financial impact on the company. In response, companies have worked to reduce or eliminate (where possible) these liabilities", he explained.
Besides being an area where companies must comply with stringent regulations, especially after disasters like Brumadinho that affected the mining industry's reputation in the eyes of the international society, tailings represent an opportunity: They can be re-mined or processed to extract remaining ores that were previously deemed unprofitable. This approach could involve lower costs and risk than starting new grassroots or greenfield explorations.
“There has been a longstanding focus on pursuing higher yields with lower-grade ore in the realm of gold. However, inflation has affected this strategy: many projects that made economic sense with this higher-ounce, lower-grade approach are currently facing financial challenges.”
Daniel Kappes, President and CEO of Kappes, Cassiday & Associate (KCA)
Long-term relationship primes
Fostering long-term relationships has been the cornerstone of Practical Mining, a small geological and engineering service company based in Nevada that proves that size is not an impediment. "In the dynamic landscape of mining projects, needs often evolve over time. Our ability to swiftly address these challenges and keep the project on track is pivotal in benefiting all stakeholders," explained Dagny Odell, owner of Practical Mining.
In recent years, Practical Mining has been incorporating technology to enhance its LiDAR scanning capabilities, and with drones becoming more autonomous and capable of flying longer distances, they can now map inaccessible areas of underground mines without human intervention. "This convergence of technology is poised to revolutionize how we operate, making the mining industry more efficient, effective, and safer," explained Odell.
Another company that has seen the benefits of drones and LiDAR scanners is the high-tech geospatial engineering provider Darling Geomatics. The outcome becomes revolutionary when Artificial Intelligence is added to the equation. "When combined with other data sources, such as drone surveys with LiDAR and hyperspectral imaging coupled with exploration drilling, AI can be used for optimum pattern recognition for advanced geological mapping," said Mary Darling, CEO and principal owner of the company.
Richard Darling, the president and founding principal of the company, highlighted that with an AI model a company can monitor everything, from the motors and crushers in a mill to the pH levels in the ore: "AI and automation allow operators to sit in a control room and see exactly what is happening throughout an operation instead of being on the ground, taking tests, monitoring equipment, etc."
Improving operations amid rising inflation
When asked about the challenges she sees in the mining industry, Dagny Odell from Practical Mining argued that striking a balance between rising prices and escalating costs due to inflation is paramount to sustaining profitability. On the other hand, she also stated that permitting represents a significant challenge, regardless of location. To successfully navigate the permitting process, Odell emphasized that companies must customize the mine plan and design to align with the specific requirements of the permitting authorities, and the sooner this alignment is achieved, the better.
Inflation has posed a significant obstacle for junior and major mining companies, hindering their ability to unlock their full potential. For instance, juniors have faced challenges accessing dollars to fund activities such as drilling. On the other hand, inflation has lowered production margins for producers, impacting their profitability. "There has been a longstanding focus on pursuing higher yields with lower-grade ore in the realm of gold. However, inflation has affected this strategy. Many projects that made economic sense with this higher-ounce, lower-grade approach are currently facing financial challenges. As a result, there is a shift toward revisiting the concept of fewer ounces with higher-grade ore," commented Daniel Kappes, president and CEO of Kappes, Cassiday & Associate (KCA). "Operations managers often allow the ore to be stacked based on the tons stacked daily rather than the quality. If operations managers paid more attention to the stacking quality, they could produce more ounces at the same cost," he added.
Jim Norine, director of minerals and metals at Ausenco, noted that the traditional approach of clients seeking competitive bids from multiple firms solely based on price is becoming antiquated. The priority is to build long-term partnerships. Ausenco has been focusing on emerging mineral processing technologies to help its clients maximize the return on investment and minimize energy usage in the case of declining ore grades. One area gaining momentum is ore sorting, a process in which artificial intelligence and advanced instrumentation can improve. "It becomes possible to downsize the process plant. For example, mining 150,000 t/d can be sorted down to 50,000 t/d, reducing capital costs, lowering energy demand, and improving efficiency," Norine stated.
Another company that has been focusing on ore sorting is ABH Engineering. Besides working with Noram Lithium and Nevada Sunrise in Nevada with their NI 43-101 in Arizona, they have collaborated with MP Materials on ore sorting. Besides reducing capital costs, as Norine highlighted, Brent Hilscher, ABH's VP of mineral processing, pointed out that the technology could result in a smaller tailing pond and, in some cases, in eliminating tailings when coupled with co-disposal technology.
Ore sorting demonstrates that the industry can innovate to maintain profitability, and mining can be more sustainable. According to Hilscher: "This growing recognition could lead to political pressure on companies to consider this technology. While it may not be applicable 100% of the time, estimates suggest that around 80% of deposits could benefit from ore sorting system."
Article header image courtesy of Kappes, Cassiday & Associate (KCA)