Research, Innovation and Improving Productivity - Douglas Morrison, CEMI – th...
01-Mining-An-Industry-in-Distress
1. IAEA
International Atomic Energy Agency
Leadership Academy on Sustainable Uranium and
Critical Materials Production from Phosphates and
Other Sources
24-28 August, Nanchang, China
Mining: An Industry in Despair
Hari Tulsidas, IAEA
2. IAEA
Commodity prices near 14 year low
Bloomberg Commodity Index; The index currently represents 20 commodities, which
are weighted to account for economic significance and market liquidity.
Base year 1990.
3. IAEA
Commodity metal price index
Commodity Metals Price Index, 2005 = 100, includes Copper, Aluminum, Iron Ore, Tin, Nickel, Zinc,
Lead, and Uranium Price Indices
Source: International Monetary Fund
5. IAEA
Mineral industry under stress
Low commodity prices to stay
Oil & Gas, Copper, Iron ore, gold, uranium …
Declining quality of new mineral
discoveries
Focus only on a few high quality discoveries
challenging
Declining productivity and efficiency
Mining boom since ~2004 made the industry
complacent
Cost of production high – Cost cutting brings
in modest, short-term results
“The integration gap”
Passion for innovation lost
License to operate becomes critical
Sustainability, global environmental
concerns, transparency, participation
Commodity Low
2000
June
2015
Highs Year
of
High
Iron Ore $/t 12.45 60 187 2011
Met Coal $/t 38 93 156 2008
Thermal Coal $/t 25 62 192 2008
Gold $/oz 265 1203 1941 2011
Copper $/t 1427 5728 9881 2011
Uranium$/lb 10 36.60 138 2007
6. IAEA
“Sawtooth” cycle
Loss of confidence
No investment for innovation
Write downs
~$50 billion / year for big mining projects
Loses and leakages
~$30 billion/year for natural gas
~12 000 tU in phosphates (~$1.5 billion)
Layoffs
A few 10 000s loose job every year
Socio-economics
Contracting economy
MDG goals not met
Conflicts
7. IAEA
“Darkest hour is before the dawn”
“Mines have failed to invest sufficiently during the
good times in technology and training, which would
have created a sounder foundation for higher
productivity in tough times like these”
Roger Dixon, Chairman, SRK Consulting (SA), Mining Indaba, Feb 2015
8. IAEA
Is sustainable mining possible?
Mineral resources are essential to our modern industrial society and they are used
everywhere.
Can mining be done differently?
Bingham Canyon copper mine in Utah, USA. At
4 km wide and 1.2 km deep, it is the world’s
deepest open-pit mine. It began operations in
1906.
Acid Mine Drainage. The water in Rio Tinto
River, Spain is highly acidic (pH = ~2) and the
orange colour is from iron in the water.
9. IAEA
Change the 100+ year old mining industry narrative ?
"Tackling important factors
such as remuneration, social
license to operate,
sustainability, resource rents
and delivering shareholders
returns, running a mining
operation that is profitable
and rewarding for all
stakeholders, remains hugely
challenging”
Paula Munsie, CEO, Mining Indaba
10. IAEA
Case study – Ash problem
North Carolina, from Duke Energy’s 14
plants
Unlined pits in 32 sites, 100 million
tonnes
Dan river spill in 2014, $ 15 million to
contain
$ 100 in fines and restitution for the spill
Move or cap 24 sites by 2029 at a cost
of ~ $10 billion
“Contaminants”
Boron
Sulphur
Arsenic ~ 1000 ppm
Chromium ~ 200 ppm
Selenium ~ 200 ppm
Mercury ~ 1 ppm
Lead ~ 100 ppm
Uranium ?
11. IAEA
Case study: Grootvlei in ruins
• Economically viable plan to clean
polluted mine water and at the same
time provide work in urban agriculture
was proposed by MINTEK
• Treating AMD at zero cost to the mines
and providing ongoing employment in
this job-starved region.
• Also to produce red ferric oxide,
cobalt, copper, nickel, uranium and
calcium, leaving what was virtually
distilled water, ideal for agricultural
irrigation because of its built-in
ammonium sulphate fertiliser, in very
dilute form.
• Would have given jobs to about 7 000
people
• The mine decided to use a
conventional process for water
treatment, which failed and the
company was liquidated in 1995
Grootvlei gold mine, Springs, South Africa
12. IAEA
Case study: Rio Tinto is also a miner
Agriculture – Making hay when sun shines
in Pilbara, Australia
• 2012 - Hamersley Agricultural Project
- innovative use for excess water from
Marandoo mine as it is developed below
the water table. 800 hectares; 30000 t
hay /year.
• 2014 - Nammuldi Agricultural
Project - utilises mine water from the
below water table component of the
Nammuldi mine. 900 hectares
Cattle stations
• Runs 6 stations in Western Australia
with 25,000 head of cattle in 1.5 million
hectares.
The company is not wasting any
resources. While the water extracted will
be used to grow stock feed, the hay—in
turn— will be given to cattle on the six
stations
Rio Tinto
farmers with
hard hats
13. IAEA
Mine of the Future
Exploration
One in 100 000 discoveries
become a mine.
Can every discovery become a
mine?
Innovative mining
Can there be zero wastes?
Innovative processing
Can the recovery be 100%?
Can it be energy neutral?
Can the mine produce finished
products?
14. IAEA
Towards zero wastes
Projects for managing any waste in isolation from the processes that
generate them are running against the policy objectives of the waste
hierarchy (e.g., EU Waste Framework Directive, 1975; US Non-
Hazardous Waste Management Hierarchy)
disposal as the last, and least desirable of the management options
projects showing signs of “not performing well when undertaken purely as waste
management tasks”
15. IAEA
CX – A new mining paradigm* ?
CX is an new, integrated, technology-independent,
procedure for discovery, recovery and use of mineral
wealth from a target area and for their efficient and
equitable management across the entire product value
chain, including cyclical and end of life outcomes, in
compliance with the objectives of the waste hierarchy. .
16. IAEA
What is CX?
• Comprehensive extraction is a new mining business paradigm
• Based on an equitable distribution of benefits
• Reinforced by an appropriate policy, regulatory framework,
stakeholder acceptance and a selection of technologies
• Focus on social, economic and environmental outcomes and not
on one-off processes or particular technologies.
• Disturb the ground minimally, maximize advantages and leave no
legacy wastes.
• Achieve equilibrium by optimising the returns and dividends by a
strategic approach to resource extraction, processing and
conservation by emphasising on range and resilience.
• Delivers value-add across the entire resource life-cycle, which is
in part cyclical and adapts and responds to social-economic needs
through continual improvement.
17. IAEA
Seven principles of CX
• CX should provide benefits that outweigh the associated costs and
risks.
• CX should be based on open and transparent communication.
• CX should ensure that people and the environment are protected.
• CX should take due account of the risk of the malicious use and acts of
sabotage.
• CX should take due account of the risk of the proliferation.
• CX should be efficient in using resources.
• CX should pursue advances in technology to continually improve.
18. IAEA
Five Pillars
• Creating a competitive edge: Establish a new business paradigm based on
the premise of disturbing the ground minimally, recovering multiple resources
and leaving no wastes.
• Promoting sustainability: Ensure equitable returns and dividends by focusing
on triple bottom line social, economic and environmental outcomes.
• Establishing an improved policy and regulatory framework: Improve
extractive industry management strategies and apply “constructive regulation”.
• Stimulating innovation: Ensure value-add across the entire resource life-cycle
by integrating all processes and controlling the entire value-chain.
• Fostering social acceptability: Ensure “Social Licence to Operate” is earned
and retained throughout the life-cycle.
19. IAEA
Over 45 million tonnes of U; and what else?
No Type Number of reported
world deposits
No of U
deposits in
UDEPO
Total Resources
in UDEPO (t U)
Average Grade
(ppm U)
Remarks
1 Intrusive (Plutonic
sub-type)
646 – Porphyry copper
depositsb
125 – Peralkaline
complexeC
527 - Carbonatitesy
32 651 773 40 – 6 400 REE, Nb, Ta, Zr, U,
Cu, Au, Ag, Mo
2 Polymetallic Iron
Oxide Breccia
Complex
33 z (Over 1003) 16 2 438 773 60 - 850 Cu, Au, Ag, U
3 Lignite-coal 27004 (23 057 billion
tonnes Reserves +
Resources a)
35 7 378 159 20 – 1 700
4 Phosphate 16355 (300 billion
tonnesx)
57 13 941 025 10 – 3 033 P, S, F, REE, U
5 Black shale 50 20 962 042 17 - 1200 Ni, Co, Cu, U
6 Heavy mineral sands 777 REE, Ti, Th, Zr, Sn
7 Lignite-coal ash 21 billion tonnes8
Ge, U
8 Mine tailings 89 250 000 30 - 80 U, Ag
9 Mine wastes U
10 Mine water U
11 Phosphogypsum 2.6 – 3.7 billion tonnes
10
REE, F, S, U
12 Metal slags Sn, Nb-Ta slags with
U
13 Sea water 4 500 000 000 3.3 ppb Multiple elements, U
Total (excluding seawater) 45 621 772