We hear a lot about the need for the mining industry to adopt sustainable mining practices. Is everyone certain what that actually means? Ask a group of people for their opinions on this and you’ll probably get a range of answers. It appears to me that there are two general perspectives on the issue.
Perspective 1 tends to be more general in nature. It’s about how the mining industry as a whole must become sustainable to remain viable. In other words, can the mining industry continue to meet the current commodity demands and the needs of future generations?
Perspective 2 tends to be a bit more stakeholder focused. It relates to whether a mining project will provide long-term sustainable benefits to local stakeholders. Will the mining project be here and gone leaving little behind, or will it make a real (positive) difference? In other words, “what’s in it for us”?
There are still some other perspectives on what is sustainable mining. For example there are some suggestions that sustainable mining should have a wider scope. It should consider the entire life cycle of a commodity, including manufacturing and recycling. That’s a very broad vision for the industry to try to satisfy.
How might mining be sustainable?
The solutions proposed to foster sustainable mining depend on which perspective is considered.
With respect to the first perspective, the solutions are board brush. They generally revolve around using best practices in socially and environmentally sound ways. A sustainable mining framework is typically focused on reducing the environmental impacts of mining.
Strategies include measuring, monitoring, and continually improving environmental metrics. These metrics can include minimizing land disturbance, pollution reduction, automation, electrification, renewable energy usage, as well as proper closure and reclamation of mined lands.
Unfortunately if the public hates the concept of mining, the drive towards sustainability will struggle. Trying to fight this, the industry is currently promoting itself by highlighting the ongoing need for its products. Unfortunately some have interpreted this to mean “We make a mess because everyone wants the output from that mess”. I’m not sure how effective and convincing that approach will be in the long run.
Focusing on localized benefits
If one views sustainable mining from the second perspective, i.e. “What’s in it for us”, then one will propose different solutions. Maximizing benefits for the local community requires specific and direct actions. Generalizations won’t work. Stakeholder communities likely don’t care about the sustainability of the mining industry as a whole.
They want to know what this project can do for them. Will the local community thrive with development or will they be harmed? Are the economic benefits be short lived or generational in duration? Can the project lead to socio-economic growth opportunities that extend beyond the project lifetime? Will the economic benefits be realized locally or will the benefits be distributed regionally?
One suggestion made to me is that all mining operations be required to have long operating lives. This will develop more regional infrastructure and create longer business relationships. A mine life of ten years or less may be insufficient to teach local entrepreneurship. It maybe too short to ensure the long term continuation of economic impacts. Mine life requirement is an interesting thought but likely difficult to enforce.
Nevertheless the industry needs to convince local communities about the benefits they will see from a well executed mining project. Ideally the fear of a mining project would be replaced by a desire for a mining project. Preferably your stakeholders should become your biggest promoters. Working to make individual mining projects less scary may eventually help sustain the entire industry.
What can the industry do?
We have all heard about the actions the industry is considering when working with local communities. Some of these actions might include:
-
Being transparent and cooperative through the entire development process.
-
Using best practices and not necessarily doing things the “cheapest” way.
-
Focusing on long life projects.
-
Helping communities with more local infrastructure improvements.
-
Promoting business entrepreneurship that will extend beyond the mine life.
-
Transferring of post-closure assets to local communities.
There are teams of smart people representing mining companies working with the local communities. These sustainability teams will ultimately be the key players in making or breaking the sustainability of mining industry. They will build and maintain the perception of the industry.
While geologists or engineers can develop new technology and operating practices, it will be the sustainability teams that will need to sell the concepts and build the community bridges.
The sustainability effort extends well beyond just developing new technical solutions. It also involves politics, socio-economics, personal relationships, global influences, hidden agendas. It can be a minefield to navigate.
Conclusion
It’s always open to debate who these 43-101 technical reports are intended for. Generally we can assume correctly that they are not being written mainly for geologists. However if they are intended for a wider audience of future investors, shareholders, engineers, and C-suite management, then (in my view) greater focus needs to be put on the physical orebody description.
I would like to suggest that every technical report includes more focus on the operational aspects of the orebody.
Improving the quality of information presented to investors is one key way of maintaining trust with investors. Accordingly we should look to improve the description of the mineable ore body for everyone. In many cases it is the key to the entire project.
Process water supply, water storage and treatment, and safe disposal of fine solids (i.e. tailings) are major concerns at most mining projects.
Electrostatic separation is a dry processing technique in which a mixture of minerals may be separated according to their electrical conductivity. The potash industry has studied this technology for decades.
The recovery of non-ferrous metals is the economic basis of every metal recycling system. There is worldwide use of eddy separators.
Given the contentious nature of water supply and slurried solids at many mining operations, industry research into dry processing might be money well spent.
In the past there would be binders with detailed calculations and backup for the different parts of the study. Typically there was a binder for the Executive Summary and separate sections (i.e. binders) for Geology, Mining, Processing, Infrastructure, Capital Cost, Operating Cost, Environmental, Project Execution, and Economic Analysis, etc.
The original intent of the 43-101 Technical Report was for it to be a summary document, only about 80-150 pages in length. The intent was to simplify all the technical work for the benefit of non-technical investors. Currently I have noticed that in many cases the 43-101 report is now the entire feasibility study document.
My recommendation is that, where budgets permit, mining companies return to the days of preparing the comprehensive feasibility study document. It’s the right thing to do.
If any mining industry credibility has been lost, re-establishing it should be important. One way to start doing this is to focus on creating the type of reports that best serve the needs of the industry stakeholders.
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.
From a green mining perspective, the FSRWP produces clean power with the highest thermal efficiency and lowest carbon foot-print.
Currently there are three mooring options for the floating system that should fit most any tidewater situation.
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.
Each year business leaders are queried about what they view as their major risks. The survey results are summarized in the Global Risk Report.
It is also interesting to look at the detailed 10 year table in the report to see how the risk perceptions have changed over the last decade.
Mining companies are always on the hunt for new projects to grow their cashflows. They would all like to find the “perfect” project; one with ideal conditions and great attributes.
Now take an honest look at some recent (or past) projects that you have been involved with. How many of the perfect attributes listed above would be represented? It would be surprising to see them all checked off. Unfortunately that means certain flaws (risks) must be accepted when developing a project.
The bottom line is that management understandably have a difficult task in making go/no-go decisions. Financial institutions have similar dilemmas when deciding on whether or not to finance a project.
You a create your own checklist but if you would like a copy of mine just email me at KJKLTD@rogers.com and let me know a bit about how you plan to use it (for my own curiosity). Specify if you would prefer the Excel or PDF versions.
Mining due diligence exercises can be interesting and great learning experiences, even for senior people that have seen it all. However they can also be mentally taxing due to the volumes of information that one must find, review, and comprehend, all in a short period of time.
Over the years of working on studies and reviewing them, ore dilution often does not see much discussion but it is one of the most important technical and operational issues. It plays a key role in the success of a mining operation, particularly underground operations. In studies, it can be too low or too high, too optimistic or too pessimistic.
The goal of dilution estimation is not to demonstrate fancy mathematics, but to forecast what it will actually be. My personal experience is that people tend to focus on the value of the dilution percentage and whether it seems reasonable in the end. There seems to be less focus on the logic for the dilution approach used. It is not easy to forecast dilution yet it can be an incredibly important number.
His topic is interesting and relevant to today’s mining industry. Paul raised many thoughtful points supported by data. He gave me permission to share his information.
I agree with many of the points raised by Paul in his study. The mining industry has some credibility issues based on recent performance and therefore understanding the causes and then repairing that credibility will be important for the future.