Articles tagged with: EIA

69. Power Generation & Desalinization – An Idea that Floats

Access to a fresh water supply and a power supply are issues that must be addressed by many mining projects. Mining operations may be in competition with local water users for the available clean water resources. In addition, the greenhouse gas emissions from mine site power plants are also an industry concern. If your project has both water and power supply issues and it is close to tidewater, then there might be a new solution available.
I recently attended a presentation for an oil & gas related technology that is now being introduced to the mining industry. It is an innovative approach that addresses both water and power issues at the same time.
The technology consists of a floating LNG (liquefied natural gas) turbine power plant combined with high capacity seawater desalinization capabilities. MODEC is offering the FSRWP® (Floating Storage Regasification Water-Desalination & Power-Generation) system.
MODEC also has associated systems for power only (FSR-Power®) and water only (FSR-Water®)

FSRWP capabilities

The technology is geared towards large capacity operations that have access to tidewater. It provides many tangible and intangible operational and environmental benefits.  It can:
  • Generate fresh water supply (10,000 – 600,000 m3 /day)
  • Generate electrical power (80 to 1000 MW) using LNG
  • Can provide power inland (>100 km) from a tidewater based floating power plant
  • Can provide natural gas distribution on land via on-board re-gasification systems
  • Has LNG storage capacity of 135,000 cu.m
  • Has a refueling autonomy of 20 to 150 days
  • Allows low cost marine delivery of bulk LNG supply

Procurement & Application

The equipment can be procured in several ways. For instance it can be contracted as an IPP (Independent Power Producer), purchased as an EPCI (Engineering, Procurement, Construction and Installation), BOO (Build, Own and Operate) or BOOT (Build, Own, Operate and Transfer).
Typically it takes 18-24 months of contract award to deliver to the project site, although temporary power solutions can be provided within 60-90 days.
From a green mining perspective, the FSRWP produces clean power with the highest thermal efficiency and lowest carbon foot-print.
See the table for a comparison of different power generation efficiencies and carbon emissions per kW.
Gas turbines are not new technology to MODEC.  They currently own & operate 42 such generators, which can produce roughly 43 MW (each) in combined-cycle mode.

Mooring options

Currently there are three mooring options for the floating system that should fit most any tidewater situation.
Jetty or Dolphin mooring is suitable for protected areas or near-shore applications where the water depth is in the range of 7 to 20 meters.
Tower Yoke mooring is ideal for relatively calm waters where the water depth is between 20 to 50 meters.
External Turret mooring is similar to a Tower-Yoke and is ideal for water depths exceeding 50 meters or where the seabed drops off steeply into the ocean.

Power transmission

Twenty years ago it was impractical to transmit AC power long-distances and subsea power cable technology was not as advanced as it is today. Hence an offshore power plant like a FSRWP was not technically viable. Due to R&D efforts over the last 15 years it is now possible to economically transmit AC. For example it is possible to transmit up to 100 MW over 100 miles through a single subsea cable. In addition, it is also viable to transit 200 MW at 145 kV from a vessel to shore.

Water treatment

Modern FSRWP’s use reverse osmosis membrane technology to produce industrial or potable water.  This is similar to most conventional onshore desalination plants.
The main benefits of floating offshore desalination are increased overall thermal efficiency if both power and water production are combined on a single vessel. In addition, seawater sourced offshore and rejected brine discharged offshore minimizes risk to coastal marine life.

Conclusion

The bottom line is that if your mining project is near shore, and has both water supply and power issues, take a look at the FSRWP technology. One might say it is greener technology by using LNG (rather than coal, heavy fuel oil, or diesel) to generate power.  At the same time it avoids competition with locals for access to fresh water.
This technology won’t be suitable for all mining situations, but perhaps your mine site fits the model. Reportedly rough costs for power are in the range of $0.10-$0.14/kwh with a capital cost of $1M-$1.5M per MW.
There will be minimal closure costs associated with dismantling the power plant.  One just floats it away at the end of the mine life.
Check out the MODEC website if you wish to learn more: https://www.modec.com/fps/fsrwp/index.html
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46. Tailings Disposal Method Risk

mine tailings
After the Mt Polley and Samarco tailings failures, there have been ongoing discussions about the benefits of filtered (dry stack) tailings as the only way to eliminate the risk of catastrophic failure. Mining companies would all like to see risk reductions at their projects.

Filtered tailings stack

However what mining companies don’t like to see are the capital and operating costs associated with dry stacking. The filtering cost and tailings transport cost are both higher than for conventional tailings disposal. Obviously this cost increase gets offset against improved environmental risk and simpler closure.

So what is a company to do?

In my experience when designing a new mining project, all companies at some point complete a trade-off study for different tailings disposal methods and disposal sites. Contrary to some environmental narratives, mining companies really do want to know about their different tailings options.  They would all adopt the dry stack approach if it was the most advantageous method.
The mining companies are fully aware of the benefits but the dilemma is the cost and being able to somehow justify the technology. Complicating their decision, companies also have other options for reducing their tailings risk.

The  final decision can get complex.

In a tailings risk analysis, people will use a risk-weighting approach to assign an expected economic impact to their tailings plans. For example, if the cost of a failure is $200 million and the risk is 0.1%, then the Expected Cost is $200,000. The problem with this is its based on a theoretical calculation on an assumed likelihood of failure.   In reality either the dam will fail or it won’t.  So failure remediation money will be spent ($200M) or it won’t be spent ($zero), it won’t be partially spent ($200k).
The accepted tailings risk therefore becomes a subjective factor.
While implementing a dry stack may reduce the risk of catastrophic failure to near zero, implementing a $100,000 per year monitoring program on a conventional tailings pond will reduce its risk.
Implementing a $500,000 per year monitoring program would reduce that risk even further.
Installing in a water treatment plant to enable periodic water releases may further lower the tailings risk.
The company can look at various mitigation options to keep lowering their risk, although none of the options would necessarily bring the risk down to zero. Ultimately the company could compare the various risk mitigation options against the dry stack costs in order to arrive at an optimal path forward.

What level of risk is acceptable?

So the question ultimately becomes how low does one need to reduce the tailings risk before it is acceptable to shareholders, regulators, and the public. I don’t think the answer is that one must lower the risk down to zero. There are not many things in today’s world that have zero risk. Driving a car, air travel, shipping oil by ocean tanker, having a gas furnace in your house..none of these have zero risk yet we accept them as part of living.
Environmental groups continually discuss ways of forcing regulators and mining companies to take action against the risk of tailings failure. This is commendable.
However they generally fail to provide any guidance on what level of risk would be acceptable to them or to the public. It seems to be difficult for these groups to define what an acceptable risk is. They offer no solutions, other than either zero risk or shut down all mining.

Conclusion

We know that mining is here to stay so we all should work together towards solutions.
The solutions need to be realistic in order to be taken seriously and to play a real role in redefining tailings disposal. Dry stack may not be the only solution and we should be looking for more ways to improve tailings disposal.
Since these other options don’t seem to be available yet, dry stack tends to offer the best solution in most circumstances.  I have written another blog on this topic “Fluid Tailings – Time to Kick The Habit?”
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30. Mining Takeovers – Should Governments Be (Heavily) Involved?

Mine acquisition
I have seen some on-line discussions about whether governments should be regulating corporate takeovers, some of which may be outside their own borders. The fear from some groups is that mine assets may be acquired by less than desirable acquirers.
One specific example that I have seen is related to the 2015 disposition of foreign resource assets by both Barrick and Ivanhoe to Zijin, a Chinese company.  I don’t know much about Zijin, other than having heard Norway’s government directed its $790 billion oil fund to sell holdings in some companies because of their environmental performance. Zijin was one of these companies.
In light of the Norway decision, some groups are questioning whether Zijin should be allowed to buy mining assets currently owned by Canadian or American companies.

Its a balancing act

It appears that some groups would like their governments to step in and prevent a company from selling their mining assets to another company that may have a poor reputation or limited financial capacity. The fear is the new company would operate in a non-sustainable manner and ignore local environmental rules.
Government sanctioning of deals gets tricky in that how do they define which companies have poor reputations and which don’t.  Also how can they dictate to the shareholders of a company, possibly nearing bankruptcy, that they cannot sell their assets to a certain interested party?
Governments have stepped in and blocked acquisitions in the past but these were mainly related to deals involving antitrust issues or technology of national interest.
It will be interesting to see whether the idea of governments sanctioning the acceptability of acquirers in the mining industry will gain traction.
It may be an overstep for the government of one country to block the acquisition of a foreign property when the owner may not have the capability to develop the project while the acquirer does.
The foreign government may want to see their own resources  developed but another government may be hindering that by blocking transfer of ownership.
The last thing we want are more country-to-country disputes. I presume the only option in this case is to revoke the mineral concessions and assign them to someone willing to develop them.  One company will lose an asset, which creates new issues related to compensation.  It also harms the reputation of that country as a place to invest in.  Unfortunately it had no choice if a foreign government was getting in the way.

Conclusion

The bottom line is whether the government of one country have the veto rights to prevent development in another country?  Does the government of one country have the right to decide the environmental standards in another via prevention of an asset sale?
This will be an interesting issue to continue to watch in the future.
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28. Mine Approvals May Be Hinging on the Corporate Bank Account

EIA EIS EISA
A few months ago there were some discussions on a now defunct blog site  “I THINK MINING” and on a website (https://lindsaynewlandbowker.wordpress.com) regarding whether mine environmental approvals should be linked to the overall financial health of the parent company.
This point was raised in regards to the Mount Polley tailing dam incident as well as other notable tailings failures.   The logic behind the idea was that the potentially high cleanup cost for tailings failures could exceed the financial capacity of a small mining company and then the failure cleanup cost would need to be borne by the taxpayer.

Are reclamation bonds of sufficient size?

Closure bonds for final reclamation are standard practice in current permitting approvals and part of the normal course of business.  However what is being newly proposed is the requirement to have sufficient corporate funds in the bank account to pay remediation costs for some hypothetical failure.  This has not been part of the current environmental approval process as far as I know. Depending on the type of failure scenario one envisioned, the hypothetical cleanup cost could range from low to enormous.

A failure cleanup fund

One of the options being proposed is that the various mining companies in a jurisdiction each contribute money to a failure cleanup fund that could be used for mitigation purposes.
The ultimate goal of this idea may be better environmental practice or simply as a means to curtail mine development by handcuffing smaller companies.
Many deposits are too small for the major miners so the intermediate companies are the only ones interested in them.  However if they don’t have the financial reserves in the corporate bank account, then their projects would not get approved.

Small companies would only be explorers

It would impact on the ability for the smaller or intermediate miners to develop new mines if the corporate bank account of the parent company becomes a large part of the mine permitting process.  Not only would they need to finance the construction capital cost, which is not easy these days, but they would also need to finance a tailings failure cleanup fund.
It will be interesting to see if this suggested permitting approach gains any traction in the future because it could have a significant impact on the operating approach of the junior industry.  Perhaps everyone could really only be exploration companies.

Filtered tailings stack

One impact from this might be that new operators will be pushed towards dry stack tailings.  Possibly the added costs for dry stacking could be offset against the need for the tailings failure fund.
Regardless of how it would be done, this would become an added cost to the mining industry at a time when it doesn’t need more cost pressures.
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