BE.Americas

ACHIEVING BUSINESS EXCELLENCE ONLINE

AMERICAS EDITION Issue No.49

PDAC 2013 preview: american coal council: barrick south america: canada Fluorspar:

a most exciting Vying to become a major player in what is fast becoming a hugely important market

special report: chile mining focus

Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

Be seen throughout our portfolio of magazines: •BE Mining Directory •BE Mining •BE Weekly •BE Monthly •

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Editor In Chief

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Editor

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John has contributed to Business Excellence since its inception: he joined the in-house editorial team in February 2013. johanlon@bus-ex.com

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Chief Executive

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features

8 22

8 Food safety

Food for thought

Best practice in document management drives quality and business performance in the food industry.

16 Automation

Automation in retailing

The lessons of ergonomics learned in manufacturing plants and distribution centers are rapidly being put to use in retail operations.

30

22 Distribution

Best practice in distribution

The rapid rise in the number of products available requires new delivery systems to improve driver longevity and fleet efficiency.

30 Event preview

getting the right price

Learn the principles of corporate valuation.

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contents pdac special preview: 32 Event preview

PDAC 2013

An insight to the annual PDAC event held in Canada, where the world’s mineral industry meet.

32

34

34 canada fluorspar inc (CFI) A most exciting prospect

Canada Fluorspar vies to become a major player in what is fast becoming a hugely important market.

42 cAE Mining

Training the next generation

How CAE Mining is building further upon the legacy of its parent company.

42

50 east asia minerals ACCESS TO INDONESIA

The Vancouver based mineral exploration company has located major gold and silver deposits in Indonesia.

60 special report:

chile mining Exploring the worlds’ copper capital

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business showcases

164

164 Barrick South America The jewel in the crown

Barrick has a significant investment programme for South America in 2013, much of which is targeted to advance the construction of Pascua-Lama.

174

174 VALE Brazil

Simply ore-inspiring

184

A monumental project, possessing over seven billion metric tonnes of iron ore reserves.

184 Southern Copper Corporation Expanding horizons

RaĂşl Jacob highlights the massive expansion programmes the company is undertaking, both in Peru and in Mexico.

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contents

194

194 Inorganic Ventures

Blending knowledge with passion

How this leading manufacturer of certified reference materials is targeting the mining sector.

202 Bentley Systems A source of inspiration

Bentley has all of the top five mining companies as customers for its comprehensive software solutions.

212 American Coal Council Power struggles

Finding a way to overcome the challenges facing the coal industry in the United States.

222 C.C. JENSEN

Cleaning up the competition

202

Having made its name in several industry sectors over the last 60 years, C. C. JENSEN is attracting greater attention from mining companies throughout the world.

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Food thought

w

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Food safety

d for

written by: Thomas R. Cutler

Best practice in document management drives quality and business performance in the food industry, as JIFFY Mix maker Chelsea Milling can testify

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T

he Center for Disease Control (CDC) estimates that each year roughly one in six Americans (48 million people) gets sick, with 128,000 being hospitalized and 3,000 who die of foodborne diseases.

Food companies are quickly discovering that the right ingredient, with the best specifications, at the lowest risk and the best price, equals maximum knowledge and leverage.

Relying on quality and food safety departments to provide supplier performance feedback is no longer sufficient. Instead best practice food industry leaders are sharing an information platform with food safety quality assurance (FSQA) departments that provide real-time insights on supplier performance.

These data ensure that suppliers are meeting company specifications, compliant with all company business requirements (such as allergen, kosher, or halal documentation). Instead of evaluating supplier performance purely based on cost and on-time delivery,

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companies must further measure how well suppliers perform against other critical business needs.

A leader in food industry supplier document management platform, TraceGains’ CEO, Gary Nowacki, suggested the paradigm has shifted and that full insight on supplier performance at the corporate, lot shipment, and ingredient attribute levels is the best

3,000 People who die of foodborne diseases in the US every year methodolog y ensuring food safety and business information. This consolidated view of data typically resides in multiple departments, formats, and silos.

Automated purchase order acknowledgement solutions further assist in the planning of purchases and inventory. Armed with supplier performance data for risk, compliance, and cost industry sector leaders, such

as Chelsea Milling (makers of JIFFY Mix) are able to source the exact ingredients with the exact specifications when needed; this practice optimizes inventory and keeps the lines going.

The Chelsea Milling Company is a 110 year old family-owned business, with a mantra to provide the highestquality affordable product.

The company is a complete vertical manufacturer; it stores the majority of the wheat it uses, processes it into flour for production, and manufactures its own packaging. It ships over 150 million pounds of JIFFY Mixes per year, and its products are available at over 30,000 retailers and foodservice outlets.

Chelsea M i l l i n g ’s commitment to customers means extra attention to quality. But insuring that all suppliers continuously comply with all quality requirements meant that Chelsea Milling staff members were swamped with manual tasks. The company needed a solution that permitted 24/7 quality control without adding personnel or compromising on quality.

Food safety

Chelsea Milling was challenged by too many certificates of analysis (COAs) that needed to be manually checked against the firm’s ingredient specifications.

Manual and inefficient processes to retrieve data to support customers’ GFSI audits required additional effort. The inability to predict future performance or to evaluate suppliers on more than price and on-time delivery was troublesome.

There was no early warning of impending problems, which

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meant operating reactively instead of proactively.

“When suppliers are out of compliance or nearing a violation,” said Nowacki, “the system automatically initiates supplier corrective action requests (SCARs), sends eNotifications to both internal and supplier personnel, and can automatically place suppliers on probation, suspend them, or reject any of their shipments.”

The solution also measures the financial impact of noncompliance and monetizes

the potential damage done in areas such as manufacturing efficiency, finished goods quality, and product safety. It provides a comprehensive purchase order acknowledgement tracking function, with alerts for supplier late or shortshipments that may cause supply chain disruptions.

Supplier document management impacts Average certificate of analysis latency (receipt of COA after material received)

Food safety

“When suppliers are out of compliance or nearing a violation, the system automatically initiates supplier corrective action requests” at Chelsea Milling was reduced from 22.3 days to same-day. The company now deals with problems before they are introduced into its supply chain. Proactive quality, food safety, and risk management are standard operat i ng procedu re.

COAs are no longer just backup documents used to investigate problems; rather they have become instant alerts to potential issues.

Digitizing COAs and making them actionable has resulted in a 75 percent reduction in outof- specification lots on the receiving dock. Since COAs are often analyzed even before the shipment arrives, Chelsea Milling can now reject shipments even before they are received, saving the supplier reverse logistics charges and returns processing.

• Significant reduction in ingredient variability makes product output more consistent, thus increasing customer satisfaction.

This also reduces the cost of goods manufactured (COGM).

• L abor needed to check COAs is reduced and COAs are checked with accuracy

and efficiency.

• Staff focused on clerical tasks are redeployed to higher-value problem solving.

• Suppliers receive immediate and collaborative feedback so that they can make adjustments, improving the quality of products while also strengthening their partnerships with Chelsea Milling.

• A ny dangerous materials are immediately identified t h rough cont inuous compliance monitoring, thus eliminating those materials and their suppliers from use.

Most critically, overall risk to the company has been measurably reduced, and the food company continuously receives praise f rom regulatory and downstream auditors for being able to produce complete supplier compliance documentation

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at a moment’s notice.

In today’s fast-paced business the ability to rapidly prove control of the supply chain, wherever it originates is vital. Increasingly, customers require GFSI or similar up-to-date audit on file, as well as the ability to prove that suppliers are similarly compliant with GFSI, HACCP, SOPs, regulatory, and other business-critical requirements.

“In case of a noncon for ma nce of a ny nature, the system can

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automatically generate and send a supplier corrective action request,” Nowacki noted, “which specifies the problem(s) detected, and highlights the necessary corrective actions to be taken. Suppliers complete the corrective action form and submit the document back.” SCAR automation speeds conflict resolution, allowing all parties involved to return to normal business as quickly as possible, thus minimizing any disruption and business impact.

Supplier documentation storage, whether in file cabinets or in digital formats, may satisfy regulatory retention requirements; it does little to systematically unlock the wealth of business, compliance, and regulatory information contained and required on a daily basis to operate successfully.

Automatically analyzing and score-carding supplierprovided documentation, as it is received, helps food manufacturers and ing redient processors

Food safety

aut o m at e do c u m e n t management. It meets regulatory and industry compliance requirements, identifies best and worst suppliers, creates better sourcing with less risk; it automatically raises product quality. Lean best practice

food companies are able to painlessly perform or participate in audits, all without needing to involve the IT department for assistance.

Food leaders experience on average a 56 percent reduction in out-of-spec lot receipts,

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

and a 20 percent reduction in attribute variability, resulting in enhanced continuous improvement, better performing ingredient and raw material inventory, improved cash f low, and long-term brand protection.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

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written by: Tho

Autom

The lessons of ergonomics lear and distribution centers are ra operations by companies lik

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Automation

omas R. Cutler

mation

rned in manufacturing plants apidly being put to use in retail ke Retail Handling Solutions

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T

he Retail Industry Leaders Association ( R I L A ) conducted an important distribution automation benchmark survey which explored how successful retailers use automation in logistics and distribution systems.

Issues related to the state of automation, satisfaction with previous automation, leading practices, metrics, and key trends revealed the drivers behind automation, operational issues that justify automation, impediments to automation, skills required to support automation, and plans for future automation.

Similarly, the National Retail Federation (NRF), addressed automation among retailers of all types and sizes from the United States and more than forty-five countries abroad including department stores, specialty, apparel, discount, online, independent, grocery and chain restaurants, among others. According to NRF, retailers operate more than 3.5 million US establishments that support one in four US jobs – 42 million working Americans. Contributing $2.5

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trillion to annual GDP, retail is a daily barometer for the nation’s economy. Keeping these retail employees safe is vital; learning the lessons from manufacturing and distribution essential. The lessons of ergonomics in plants and distribution centers are now growing rapidly at retail operations.

Shelf stocking requires automation “The way retailers stock shelves has not changed greatly over the past century,” says to Brian McNamara, founder of Retail Handling Solutions, based in Falmouth, Maine. He concedes that the process is time-consuming, labor intensive, and fraught with productivity road blocks and the potential for injury and product breakage. With all the advances made in other areas of the store, this key operation function has been largely ignored. (Retail Handling Solutions is focused on making this critically important job faster, safer, and easier.)

Product display & promotion Presenting products in attractive, neat, displays

“The way r stock shelv changed gr the past c

retailers ves has not reatly over century”

Automation with clear signage is a proven technique for increasing sales. Unfortunately, this is more difficult than it sounds, and rarely a concern at the manufacturing or distribution center level. Placing pallet loads on the floor can get messy and display requires constant attention and replenishment. Cardboard signage is often f limsy a nd almost never reusable.

One solution is the ADS Box (pictured inset), a product display and promotion system. It is a floor mounted, fully portable, four sided in-store display box which continuously repositions the remaining goods on a pallet at the convenient height of a shopping cart as the displayed products are removed by the consumer.

In addition to maintaining goods at a comfortable, convenient height, ADS Box also provides retailers with a 4-sided customizable “billboard” that can be used to further promote its contents.

Shoppers are offered a bold, clear product message while

never needing to bend or lift the goods into shopping carts. ADS Box is completely reusable, minimizes display material refuse and will last for years. Changing displays is simple and can be done in seconds. Products can be loaded into the display box with a fork truck, pallet stacker, or by hand. Stocking can be done on the store floor or out back. The box is easily moved by pallet truck around the store and just as easily transferred to a different store. The design is shopper friendly, store rugged, and requires almost no store maintenance.

Palletizing/ depalletizing Pallets are everywhere.

While manufacturers and distribution center personnel are accustomed to this situation, the typical grocery store receives hundreds of pallet loads per week.

According to McNamara of Retail Handling Solutions, “They are faced with the job of getting goods from the pallet to the shelf. Whatever

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“Level loading requires consideration in the retail environment, that manufacturers and warehouse distribution center executives neglect to consider” method is used, it involves breaking down pallet loads which is time consuming, difficult work.”

Here are just a few of the problems associated with manually unloading pallets: • Frequent bending, reaching and stretching • Awkward posture when lifting loads • Walking around pallets in tight quarters to access loads on the far side • Worker fatigue • Increased risk of injury.

PalletPal Level Loader

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McNamara suggests that the solution for these retailers is a PalletPal Level Loader which makes the job of loading and unloading pallets faster, safer, and easier. These unique devices have been used in thousands of manufacturing and warehousing facilities for over twenty years. They use an internal spring mechanism to automatically

Automation adjust the height of pallet loads as boxes are added or removed. Simply by allowing workers to load and unload at a comfortable height and posture dramatically reduces fatigue and the risk of injury.

• Works with pallet loads from 400 - 4500 lbs.

• A u t o m a t i c spring mechanism requires no power • Turntable with anti-friction bearings allows employees workers to spin loads so they are always working on the nearside • Compact design fits tight spaces - The PalletPal 36” x 36” footprint is smaller than a standard pallet • Stable base design requires no lagging - works on uneven floors.

Level loading often requires special considerations in the retail environment, that manufacturers and warehouse distribution center

42 Million Americans working in retail executives neglect to consider.

McNamara suggests a simple, automatic unit which uses a system of springs and shock absorbers to lower and raise loads as boxes are added or removed from pallets. A turntable allows nearside loading and unloading.

No power or air supply is required. Pallet loads up to 4,500 pounds can be handled.

• Rugged tubular steel frame for loads up to 4,500 lbs.

• H eav y- dut y spr i ngs calibrated to bring pallet to most convenient loading and unloading height • P roven linkage design maintains level under uneven loading • Dampener provides smooth,

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

gradual raising and lowering action, without overshoot or spring bounce • L ow-friction bearing supported turntable for near-side loading and unloading • Phenolic frame cover (optional) • Fork pockets for relocation by fork truck also extend base for free standing stability • L eveling feet (optional) allow use on sloping or uneven floors.

• Free standing, can be easily relocated by fork truck.

Automation has long been utilized in the manufacturing and distribution world; this fact was often instigated by regulatory compliance, OSHA, and fear of other punitive fines and assessments. Worker safety is in everyone’s best interest and that reality is quickly at the doorstep of retailers worldwide.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

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Best practic

in distributio 22 | Be americas

ce

on

Distribution

The rapid rise in the number of products available requires new delivery systems to improve driver longevity and fleet efficiency

written by: Thomas R. Cutler Be americas | 23

Distribution

T

he beverage industry has seen an explosion of new products and SKUs in recent years as craft brewers assume a larger market share and electronic inventory management becomes more critical. These data result in a new complex reality about truck loading and delivery. As fuel costs rise, it is increasingly essential that distributors make effective use of space, manpower, and trucks. These factors have generated a need for more efficient and flexible delivery systems.

Industry changes like warehouse automation, SKU proliferation, and an increase in alternative store types, along with work force dy na m ic s, combine to necessitate route distribution systems that increase productivity and decrease operating

costs. New lift-pallet systems offer the biggest promise for supporting product innovation in the marketplace.

Customer demand for package and size options The need for improved route distribution systems results from extraordinary growth in the number of product innovations. Food and beverage segments have seen the greatest growth, with chips now available in twelve or more flavors, to beers offered in different sizes (with multiple flavors in each size), to a boom in single serve packages; customers are purchasing a much wider variety of products.

This change in how consumers want to purchase has introduced complexity into the supply chain, with resulting impacts to warehouse management systems as well as route

“The change in how consumers purchase has introduced complexity into the supply chain”

distribution systems that get the goods onto the shelves.

The rapid rise in SKU growth from increased product options over the past few years is illustrated below.

The average number of SKUs on a route has more than doubled between 2003 and 2011. This increase makes it more difficult to move goods through the supply chain and is causing the need for innovation in route distribution systems. The two-wheel hand truck in use since the 1940s is not sufficient and store managers believe distribution equipment is taking up valuable aisle space, creating a desire to get product delivered to the shelf faster.

“The SKU proliferation has intersected with the need to speed up delivery by taking it out of the route drivers’ hands,” noted Greg Ecker, executive vice president of Magline. “Those companies which efficiently pre-pick and package the large number of different items in the warehouse differentiate themselves by meeting the growing demand for packaging variety.”

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Best practice in beverage distribution Watkins Distributing Sales and Service, a family-owned and operated distribution business in Idaho, was investigating ways to improve efficiency and driver longevity. Watkins has more than 130 employees and delivers approximately four million cases of beer per year.

Wat k i n s began e x p e r i me nt i n g w it h warehouse and delivery changes several years ago. Like other beverage distributors looking for best practices, the company delivered for major companies like AnheuserBusch, as well as shipments for craft breweries, such as Craft Brewers Alliance and Firestone Walker. The variety of beverage products being delivered required Watkins

4 Million Cases of beer delivered

by Watkins Distributing Sales and Service to organize both warehouse and trucks quickly and effectively. The company began to phase out 16- and 18-bay trucks, typically sideload, in favor of end-loader trucks with lift gates.

Convenience stores and large grocery stores Cont i nued process improvement mandated that the company find easier methods for drivers to deliver products at their many stops.

Watkins experimented with various options, including

pallet jacks, six-wheel carts, and the Magliner CooLift Delivery System. These new pallets are smaller than traditional pallets; CooLift holds about 35-50 cases, as opposed to up to 75 cases on a regular pallet. Larger traditional pallets require the assistance of an electric pallet jack, however, and cannot fit into the back rooms of most convenience stores.

Watkins found that these smaller pallets allowed them to create “hybrid� routes, tailored to the realities of this delivery model.

According to Mitch Watkins, president of Watkins Distributing, “We have a lot of routes where a driver has to deliver to ten smaller stores and one or two large grocery stores. The smaller pallets are perfect for the convenience

Impact of SKU growth on delivery and warehousing Side load aggregate build

2003

2007

2008

2011

Average # of unique SKUs at distribution center

220

312

337

365

Average # of SKUs on route

105

153

165

212

Average # SKU picks per customer stop

12

14

21

29

Source: Magline

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Distribution

“We have a lot of routes where a driver has to deliver to ten smaller stores and one or two large grocery stores” stores, because the driver can roll the pallets right through the front door and into the back room before he even has to touch a case. Meanwhile, we can also load regularsized pallets for the grocery stores, next to the CooLift pallets on the truck. It allows

us to be flexible and pack for different kinds of routes.”

The system allowed product to be delivered to the store with a 50 percent reduction in driver product touches.

At the delivery location, drivers transfer product to the final destination through The Magliner CooLift delivery cart

a standard sized door, unlike with full-size pallets, because of the pallets’ compact size.

The system was designed around the footprint of getting through a doorway easily, maneuvering store aisles, and turning in tight radius corners.

The system’s pallet height is 13.5 inches, judged by major ergonomic studies as the best height from which to lift products, as compared with a standard pallet height of 4-6 inches. Customers have reported an astounding 60 percent reduction in worker lost time events, directly tied to the driver avoiding bending when lifting a case of product.

Happy drivers yields best practice delivery Watkins ran an in-house comparison with six-wheel carts and hand carts, and drivers responded most favorably to CooLift. With

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“The shrinking workforce means tenured employees tend to stay on the job longer” hand carts, every case still had to be transferred one at a time onto a hand cart.

Drivers had to wheel that cart into the store, move the empty cart back to the truck, and manage the empty carts as they accumulated over the route. A convenience store might receive a hundred cases in a delivery and a driver will typically have to go back and forth from his truck eight times before checking with the manager. Afterward, there is still an additional eight to ten runs into the cooler to put product away.

Watkins reported that with the new solution drivers had a lot less physical and organizational stress and strain. When drivers do not have to pull every case of beer off a truck one at a time drivers deliver more stops with less impact on their bodies.

Several pallet lengths with differing weight capacities are available, which

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optimizes space on the trailer as products can be “cubed” out most efficiently on the truck. The optimum build on the pallet can optimize space on the trailer.

The system has been in use for several years and several new innovations to increase warehouse productivity have been introduced, based on process observation and customer feedback. For example, a pallet adapter tool allows the warehouse to use a forklift or walky rider to move two pallets at once from a warehouse picking process. With more than 1000 of the systems on the ground, customers

15% Increase in overall productivity using the CooLift system

reported an increase of about 10 percent in the number of deliveries made, with about a 20 percent increase in product moved by each vehicle, for an overall productivity increase of about 15 percent. Fewer trucks on the road result in smaller fuel bills, and less physical impact on the driver.

Attracting and retaining employees At the same time as SKUs are proliferating and new outlet types are developed, there

Distribution

is a growing concern about the employees performing distribution jobs. Seeking produc t iv it y gains, companies have turned to warehouse automation, which is resulting in fewer trucks and trailers out on

the road and a potentially shrinking workforce with fewer route distribution drivers. The shrinking workforce means tenured employees tend to stay on the job longer and, as the workforce ages, it becomes

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

more difficult to do the work at the same level with the amount of bending and twisting involved. These new best practice solutions keep dedicated hardworking delivery drivers on the road.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

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EVENTS getting the price right Principles of Corporate Valuation: Developing a 360˚ Perspective Getting the Price Right 21-22 march 2013 Sentry Center, 730 3rd Avenue New York, NY 10017 Course Overview What price will it take to get a deal done? This seminar’s primary objective is to learn how practitioners in the financial services industry apply various valuation techniques in the context of an eminent transaction. Heavy emphasis will be placed on demystifying the theory behind the analytics and ultimately gaining an understanding of their impact

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on a transaction. After gaining a working knowledge of the “scientific” analytics, participants will gain a new appreciation for the “art” of valuation through an in-class simulation.

Course Content and Organization This two day course will use several different teaching methods: theoretical presentations to confirm the base line understanding; hands-on examples and Excel financial models to reinforce the theory; practical review of past M&A deals to provide realworld examples; a course-pack to support content and finally mock presentations used to demonstrate the impact of valuation techniques in a “live-deal” scenario.

Participants will negotiate the best deal for their shareholders using buy-side and sellside guidance they developed themselves.

The course content will broadly include common valuation techniques and topics such as: • Intrinsic valuation: stand alone financial analysis and discounted cash flow analysis registration for all individuals is done at one time and for the same course on the same date • Relative valuation: public comparable analysis and acquisition comparable analysis • Deal structuring techniques: synergy

Special preview

Case Study Approach

roll-outs, shareholder value math, merger consequences analysis, debt capacity and affordability analysis • Sell-side and buy-side process.

Objectives By the end of this session, course participants will be able to: • Understand the valuation framework commonly used by finance professionals • Use live date and create a public market valuation: public comparable analysis, acquisition comparable analysis and discounted cash flow analysis • L everage sell-side and independent research to reach an informed view of the case study company and its sector/ industry • Learn how different structuring techniques effect valuation.

Designed to provide an overview of financial modeling and corporate valuation to corporate development officers, strategic planning officers, investor relations professionals, M&A specialists, investment bankers, investment analysts, lawyers, accounting professionals, management consultants and academics - and taught by industry practitioners with extensive, real-world experience, this highly interactive, two-day seminar combines lectures, case studies, exercises, group discussion culminating in a mock presentation of a “live deal” scenario where participants negotiate the best deal for shareholders using buy-side and sell-side valuation techniques.

Coursework developed and instruction coordinated with Training The Street. www.trainingthestreet.com Prerequisite Basic knowledge of Excel, finance and an understanding of basic valuation techniques are recommended to maximize the benefits of this program.

CLICK HERE to register: www.capitaliq.com

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EVENTS

Where the world’s min pdac 2013 3-6 march 2013 metro toronto convention centre - south building, toronto, canada PDAC International Convention, Trade Show & Investors Exchange is the world’s leading convention for people, companies and organizations in, or connected with, mineral exploration.

The four-day annual convention held in Toronto, Canada has grown in size, stature and influence since it began in 1932 and today is the event of choice for the world’s mineral industry. In addition to meeting over 1,000 exhibitors and 30,000 attendees from

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125 countries it allows you the opportunity to attend technical sessions and short courses as well as social and networking events.

Who exhibits The Trade Show appeals to companies, organizations and governments promoting the latest technology, products, services and mining jurisdictions to the global mining industry. Exhibitors include: • Air transportation services • Associations • Consulting services • Drilling equipment & services • Exploration/mining companies • Exploration/mining equipment & supplies • Geological surveys • Geophysical services & equipment • Governments • Insurance companies • Internet services • Laboratories/laboratory suppliers & analytical services • Law firms • Publications • Remote sensing/mapping • Research organizations • Satellite communications • Software companies • Universities/colleges

Special preview

Photography by Envision Digital Photography

neral industry meets

Who attends The annual show has grown into a respected institution with an international reputation for networking, deal-making and scientific exchange. Meet like minded people such as: • Company decision makers • Consultants • Exploration and development professionals from around the globe • Exploration managers • Geoscientists • International government representatives • Mining media

• Mining service sector representatives • Prospectors • Sales and marketing professionals • Students The PDAC International Convention, Trade Show & Investors Exchange is a ‘must attend’ annual event for anyone woking in the mining industry.

For more information about PDAC 2013 visit: www.pdac.ca

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13

V st isi PDACand t ou at r 20 :

Canada Fluorspar Inc (CFI)

A most exciting

prospect The release of a Preliminary Feasibility Study of its St Lawrence fluorspar project in Newfoundland has provided Canada Fluorspar Inc (CFI) with even greater cause for optimism as it vies to become a major player in what is fast becoming a hugely important market

written by: Will Daynes research by: Marcus Lewis

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View of the facilities

Canada Fluorspar Inc (CFI)

W

ednesday 30th January 2013 was a particular significant date for Canada Fluorspar Inc (CFI). It was on this day that the company proudly announced the results of a newly completed Preliminary Feasibility Study (PFS) for its St Lawrence fluorspar project in Newfoundland.

Historically used in aluminium production, protective clothing containing Kevlar, Teflon for non-stick frying pans, and refrigerants and air conditioning, fluorspar is a halide mineral of increasing importance, specifically when it comes to new manufacturing technologies.

In the last decade the fluorspar sector has become largely vertically integrated as more major chemical companies have sought to secure supply. While not by any means a scarce resource, fluorspar projects of significant scale do remain rare, and as China continues to reduce its exports and cut supply as consumption in China continues to grow, the rest of the world is increasingly being forced to develop limited new fluorspar resources.

An essential component in lithium batteries, fluorspar currently has a global consumption rate of over six million tonnes a year, a figure that is predicted to increase rapidly to over seven million tonnes by 2015, as the market for smart phones and tablet PCs continues to expand unabated.

CFI has formed a 50/50 partnership called Newspar with French chemical giant Arkema Inc. Together they own the mineral rights to the extensive St Lawrence fluorspar veins next to the town of St Lawrence, one

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kilometre from the Atlantic Ocean. It is here that the company benefits from the existence of substantial infrastructure, including access to the provincial power grid, a mill, tailings pond and a range of buildings.

Prepared by independent engineering firm Roscoe Postle, the PFS conducted on the St Lawrence project is based on updated capital and operating costs, as well as the existing resource estimate. Taking these figures into account, the PFS estimates that CFI is looking at a 131,000 tonnes per annum fluorspar production, which is an increase from its previous estimate of 122,000 tonnes per annum.

“The results of this PFS,” states President and Chief Executive Officer, Lindsay Gorrill, “highlight the economics of the project, which combined with the size, quality, logistical and infrastructure advantages make this a hugely significant fluorspar asset. In addition to this, we are bullish on the long term demand of fluorspar as world consumption continues to grow.”

The PFS base case pre-tax NPV is $124 million, while the pre-tax IRR is set at 16.4 percent, assuming a 5.0 percent discount rate.

The capital costs associated with the preproduction phase are estimated to be $154 million with on-going capital costs expected

to be $72.5 million, which will be paid from cash flow generated by the project.

The base case has been constructed under the assumption that the long term price of fluorspar will average around $500 per tonne. This prediction is supported by long-term demand estimates and the relatively stable prices that the mineral enjoys compared to others.

”Fluorspar is a halide mineral of increasing importance, specifically when it comes to new manufacturing technologies” 38 | be americas

Canada Fluorspar Inc (CFI)

Core samples from the drilling programme

The PFS proposes that for the ore body geometry of CFI’s assets as it is believed initial production from the Blue Beach North mine will to provide the safest, more provide the first six-and-aefficient and cost effective half years of production, method of extraction. The Estimated lifespan followed by an additional actual processing operation of the project seven-and-a-half years of will initially require the production from the Tarefare upgrading of the mill feed No. 2 mine. via a dense media separation The run of mine (ROM) production over plant, followed by grinding and floatation, the mine life is anticipated to average around to produce a high quality concentrate. The 386,000 tonnes per annum of ore, 412,000 company will benefit from the significant cost at Blue Beach and 365,000 at Tarefare, advantage of being within close proximity providing an average concentrate production to tide water less than two kilometres away of 131,000 tonnes per annum. from the mill site.

In developing the PFS it was decided that the Given the size of the resource estimate, Alimak mining method would be the suitable the project is expected to have a mine life of

14 years

be americas | 39

Flotation reagent area, upstairs

“Based on the positive results that CFI has received, it now begins work on its 2013 drilling programme with renewed optimism” approximately 14 years, however there are significant resources in addition to currently defined mineral reserves which will provide the opportunity to extend the mine life further still.

In addition to the PFS, as previously announced, an additional review is currently being undertaken by Newspar, in order to

40 | be americas

establish a more precise understanding of the St Lawrence project’s anticipated cost and scope. That review process is considering of a range of mining, milling and infrastructure options that may be applicable to the project. As a result, no final decision on the project’s cost and scope has been made as of yet, nor will it be made

Canada Fluorspar Inc (CFI)

Flotation area

until such time that the review process has been completed in full.

Following on from the positive results the company collected from the samples it took from one of its trenches within the Director Vein of the St Lawrence project during the early part of 2012, results that revealed CFI was standing on top of a 90.7 percent fluorspar vein measuring approximately 9.4 metres in width, it carried out surface trenching of the vein during its 2012 exploration programme.

At press time, this had led to the uncovering of fluorspar mineralisation at eight locations.

The trenches are located over an area that extends more than 1,050 metres to the south of the old workings of the Director

Vein, and indicate surface mineralisation with widths varying from 3.4 metres to a massive 23 metres.

Based on the positive results that CFI has received from both its PFS and from its surface trenching operations, it now begins work on its 2013 drilling programme on the southern extension of the Director Vein with renewed optimism and an even greater sense of excitement for what the years ahead will hold.

For more information about Canada Fluorspar Inc (CFI) visit: www.canadafluorspar.com

be americas | 41

13

V st isi PDACand t ou at r 20 :

Training the next generation CAE President, Damian McKay, discusses how CAE Mining is building further upon CAE’s legacy in simulation and training

written by: Will Daynes research by: Paul Bradley

42 | be americas

CAE Mining

The CAE Terra Mining simulator is the latest evolution of CAE’s leading-edge training solutions

CAE Mining

W

herever life may take us, we are all born with the same basic skill set. However it is from this point onwards that we each develop and progress as human beings in hugely different ways from one another. Nevertheless, the vast majority of us will one day find ourselves in a similar position to when we were young in that we will require training to embark on our future career paths. Indeed, whether the person you meet on the street is a call centre worker, a surgeon or a mine operator they will all share in common the fact that they had to undertake the necessary training in order to excel at what they do.

Throughout the world there are countless bodies, organisations and institutions that cater for the training needs of people entering all manner of professions, yet it takes something special to be recognised as a global leader in your field when you exist in such a populous market. One such company is CAE, a foremost provider of modelling, simulation and training for civil aviation and defence, employing approximately 8,000 people at more than 100 sites and training locations in 30 countries.

Founded in 1947, CAE today boasts a highly diversified business, ranging from the sale of simulation products to providing comprehensive services such as training and aviation services, integrated enterprise solutions, in-service support and crew sourcing.

The company applies simulation expertise and operational experience to help customers enhance safety, improve efficiency, maintain readiness and solve challenging problems.

be americas | 45

It is these simulation capabilities that CAE is now leveraging in new markets such as healthcare and mining. From exploration to resource modelling, optimisation, mine design, scheduling and financial modelling, CAE Mining offers cutting edge software solutions that enable users to rapidly generate robust scenarios in a secure governance framework. These software solutions are integrated with adjacent offerings in

consulting and training to ensure that CAE Mining offers the best support in the industry, maximizing the potential of mining assets.

“There are two key points of heritage that we have leveraged in order to develop into the business that we are today,” explains president, Damian McKay. “The first is the fact that CAE is recognised for training over 100,000 people a year to the highest regulatory standards. The second comes from

“Since the acquisition of The Datamine Group, CAE Mining has continued to invest significant capital into expanding its software portfolio”

CAE Terra Mining simulator in an underground vehicle

46 | be americas

CAE Mining

Mining simulator in container design for portability on site

the 25-plus years of history that we acquired through the purchase of The Datamine Group, a leading geological mine planning package that really led the field in terms if geology software, in April 2010.”

Since the acquisition of The Datamine Group, CAE Mining has continued to invest significant capital into expanding its software portfolio. In doing so it has strived to focus on the core themes of safety and productivity, looking at how it can help mines become smarter in regards to having better trained operators, a safer working environment and achieving higher productivity from existing asset bases. Meanwhile, from a geology perspective the focus is on helping clients discover what is actually under the earth, before identifying how best to execute

work on a deposit by utilising CAE Mining’s consultant services and software tools.

“All across the mining industry,” McKay continues, “the primary message today is safety first. This is being driven by several factors, not least of all the hugely different levels of experience that exists in developing countries and the unique nature of the training environments themselves. What we are also witnessing within the mining sector is an increasing client focus on costs and productivity, and on getting the most out of all of their operators.”

As operations have spread across the world so too has a wealth of new technologies and approaches to mining. With each new industry development or innovation comes the need to provide fresh training of those

be americas | 47

CAE Terra Mining simulator-revolutionary classroom design

““One sure-fire way to bring any project to its knees,is to have untrained operators using multi-million dollar equipment in the wrong way” workforces impacted by the changing landscape of the sector. “One sure-fire way to bring any project to its knees,” McKay stresses, “is to have untrained operators using multi-million dollar equipment in the wrong way. Therefore, being able to take people and using simulation to bring them up to speed with the latest techniques and methods has never been more essential.”

One of the most important and successful

48 | be americas

ways that CAE Mining offers high-quality training is through its CAE Terra Mining simulators. By building on CAE’s near 65 year history of perfecting the science of simulation, the company has been able to develop the next generation of fully-integrated simulation products for the mining industry, ranging from desktop trainers and e-learning to parttask trainers and high-fidelity simulators, all running on the same high-fidelity software.

CAE Mining

Ergonomic instructor station

The CAE Terra Mining simulators are the latest evolution of CAE’s leading-edge training solutions. The mining simulators cover a range of mining equipment and provide unparalleled realism with the most authentic experience, faithfully and fully replicating the equipment’s performance in normal and abnormal operations.

Backed up by the financial resources and added levels of diligence and oversight that you would expect to come from being part of a $1.8 billion global enterprise, CAE Mining continues to be greeted with a high level of excitement from mining companies of all sizes that it received when first entering the market. Understandably, it is this excitement that the company remains committed to building upon in the months ahead.

Six degrees of motion

“We have experience some strong levels of growth in our different solution segments,” McKay concludes, “and we fully expect this to remain the case going forward. In an environment where we envision that the cost of bad decisions and poor training will increase in the years to come, we feel it is inevitable that the type of services that we provide will only gain in popularity. As such we will continue to expand the size of our team and our global reach, while at the same time investing in the research and development that will allow us to build upon our existing range of products.”

For more information about CAE Mining visit: www.cae.com/mining

be americas | 49

13

V st isi PDACand t ou at r 20 :

East Asia Minerals

ACCESS TO

INDONESIA East Asia Minerals has come through the rapids and is now headed into smoother waters: the Vancouver based mineral exploration company has located major gold and silver deposits in Indonesia and has cleared the route to develop them

written by: John O’Hanlon research by: Jeff Abbott

be americas | 51

A scenic view from the mountain on the Island of Sangihe

East Asia Minerals

O

ne year can make a big difference: when Ed Rochette, accepted his current role as chairman of East Asia Minerals (EAS) his burden seemed heavy. Today it is a lot lighter. Let us recap. When Rochette came in as the chairman of the company in 2010 he was alarmed by the heavy burn rate of capital.

When he saw that $2.5 million a month was being spent and the share price had fallen dramatically he decided to take on the role of CEO and set about the task of making sense out of this fundamentally sound mining company, with its potentially world class gold deposits in Indonesia as well as some uranium and phosphate assets in Mongolia.

He stopped all drilling activities and cut staff levels by 60 percent. With the management team’s efforts thereafter focused on resolving the permitting impasse the Indonesian operations had reached, the shareholders and the market were expected to respond positively. Once he was able to reduce the monthly burn rate down to $400,000 by the end of 2011, he was able to raise $13 million in a private placement.

By the time the third quarter of 2012 had arrived things were looking up and the situation then was captured in the Business Excellence article that we published in October. Basically EAS was by then focused strongly on Indonesia, where Rochette was spending most of his time. The two main projects the company has there are located far apart from one another. One is on the small island of Sangihe at the north-eastern tip of the Indonesian archipelago in Sulawesi

be americas | 53

province, while the larger Miwah project is in the province of Aceh in westernmost Sumatra, the largest of Indonesia’s 17,000-odd islands.

However both projects promise to yield richly, with Sangihe currently estimated to contain nearly a million ounces of gold plus eleven million of silver and Miwah thought to have more than three million ounces of gold and almost nine million of silver. These are truly potential world class deposits even without taking their considerable development upside potential into consideration.

Through the efforts of the strengthened management team that Rochette has brought on, work at Sangihe has been progressing smoothly, with a 4,600 metre drilling programme that started in late 2012, bang on Rochette’s predicted schedule and directed towards increasing the inferred reserve.

“Look out for the preliminary results from that drilling programme,” he advises. “We will be announcing those during the last week in February.” The work is being carried out under the eye of Frank Rocca, appointed VP of Exploration in September 2012 and a key member of the strong team now being built.

That team will be further cemented shortly with the appointment of a new COO to replace Dave Anthony, whose move to the Board of Directors was announced at Christmas.

Miwah presented more problems, as we noted last year. While Sangihe has been permitted under Indonesia’s pre-2009 Contract of Work (CoW) system with a 27year licence, the work at Miwah is governed by an eight-year exploration IUP, the local licensing format that was adopted by the government more recently.

The IUPs at Miwah were due to expire at the end of 2012. Had it not been possible

“Had it not been possible to renew the licence, all of the data and IP that had been accrued would be forfeit” 54 | be americas

East Asia Minerals

Local ship transporting relief supplies to earthquake victims across Sangihe Harbour

to renew them there would when it comes to securing be a danger not only that operating licences and the concession would revert negotiating terms. Even so, to the government but that had he not had the invaluable support of his management all of the data and IP that Current drilling team coupled with the local had been accrued would programme at Sangihe partner, the strategic advisors be forfeit. Closer spaced drilling is needed to confirm and the officials in Aceh, the the findings and upgrade the resource from result might have been different. ‘inferred’ to ‘indicated’. Additionally, Miwah There was cause for celebration when on is what is called an ‘open’ resource which 8 January 2013 EAS was able to announce means that drilling outside the area already that it had obtained agreements, signed by the explored could add significantly to the ore elected Bupati, or Regent of Pidie confirming body that has already been defined. his verbal assent to renewing the licences for It was a delicate situation, and retaining the an additional two years until 30 November, good will of the authorities at all levels was 2014. “This signed extension was the result crucial. Fortunately Ed Rochette is a lawyer of a sustained effort by the Company over with one of the best records in the industry the past year,” said Rochette. “The tenure

4,600m

be americas | 55

“I am a great believer in making the local people ambassadors for the company right from the start” issues at Miwah are now behind us. We can immediately re-start our exploration programme for the project and our team can move forward to seek removal of the surface use restrictions imposed by the Ministry of Forestry.”

The deforestation of Indonesia, which since 1900 has lost millions of hectares of some of the world’s most diverse rain forest in the world, is a matter of global importance.

A collection of recent core smaples

56 | be americas

However the main threat has been the paper and pulp industry, plantation agriculture and logging. The strict regulations that have been rightly introduced are aimed at saving the remaining trees and wildlife habitat for posterity. But mining has a light footprint compared with other industries: drilling requires very few trees to be removed and any mining project comes with a robust rehabilitation plan. Compared to the palm oil

East Asia Minerals

EAS management team at ceremony for donation of supplies for earthquake victims. (Left to right) Mike McAllister-Manager IR, Dave Anthony-Chief Operating Officer, Edward Rochette-Chairman & CEO

plantations that change the landscape for all time, mining is environmentally sustainable.

Nevertheless permission for any surface disturbance activity in the areas classified as “protected forest” has to be obtained from the Ministry of Forestry, and this process can easily take two years. Ed Rochette is sympathetic with the principles behind the regulations, however it is as much in the Indonesian government’s interest to facilitate the development of a major gold mine as of any of EAS’s other stakeholders involved with the project. “We believe we may have been able to identify a way forward, working with the government officials, that will bring the

time-scale well below six months,” he says diplomatically. “The new drilling programme, which has already started in areas without surface restrictions, will confirm the viability of this project, and it should also demonstrate significant extension to the resource.”

As well as contributing positively to Indonesia’s GDP, EAS’s activities will benefit local communities. “I am a great believer in making the local people ambassadors for the company right from the start,” he says. “If you get them on your side before something happens or someone organises a protest it is a lot better than having to make amends after the event.” This is an extension of the

be americas | 57

Core sample detail from 120m

East Asia Minerals person-to-person principle that was crucial in resolving the tenure problems and is well illustrated at Sangihe where at Christmas 300 children and their parents were given a dinner hosted by EAS, the first time any overseas company has done this on that island.

Now a clean water scheme has been initiated for villagers living near the operation, and 42 local jobs have been created. Already 500 bags of cement have been given to villagers to help them repair houses damaged in a recent earthquake. Equipment has been purchased for the local medical clinic; sports equipment has been obtained for the local team; fertiliser has been purchased and distributed for local farmers; and other community engagement projects are currently being implemented which are geared towards local content objectives. Miwah will benefit in a similar way as the project matures.

East Asia Minerals is no longer a turnaround case, but a lean company, well organised and financed, with an aggressive exploration, acquisition and growth strategy. Monthly expenditure has been maintained at around $400,000, and the company had $10 million in the bank at the end of last year. Above all, it has achieved 90 percent of the goals that Ed Rochette set out for himself and East Asia Minerals just a year ago. The next challenge is “to grow the company�, a goal that the management team, along with its strategic advisors, are currently working on.

For more information about East Asia Minerals visit: www.eaminerals.com

be americas | 59

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Our quality system exceeds current market expectancies, with a strict Health, safety and environmental standards. The experience and integrity of our professionals are key elements that have made SERVINCA to position as a leading company in the construction industry.

The commitment and purpose is SERVINCA ensure timely delivery of projects adding a high quality end product following the best performance criteria free of defects, free of occupational hazards that currently exist in the market for construction services. Such deliveries involve a file meeting scheduled completion dates. The constant motivation of human talent, continuous improvements in management techniques and project management and construction methods more rigorous maintenance of the equipment and machinery have propelled the success in several recent projects of our company

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special report

chile MINING focus produced by:

special report: chile focus 64 chile at a glance

the vital statistics

Some key facts and figures about exports and operations in Chile.

66

66 q&a

alberto salas

The president of La Sociedad Nacional de Minería discusses Chile’s mining potential, economic growth and investment opportunities.

70

70 mining in chile

the copper capital

Thanks to its huge copper resources and a healthy investment environment, Chile has become the copper mining capital of the world.

78 codelco

THE COPPER CONDUCTOR

Almost a third of the world’s copper production comes from Chile whose state copper production company Codelco dominates world supply

92 Anglo American: Los Bronces

78 62 | special report

Snow capped copper

GM Sam Rasmussen talks about the special challenges of mining at altitude in the Chilean Andes.

contents

112

112 KGHM POLSKA MIEDZ: SIERRA GORDA PROJECT Into the deep

The on-going development of the Sierra Gorda open pit copper mine in Chile.

126 MINERA FLORIDA: YAMANA CHILE Going for gold

A vitally important asset in the portfolio of Yamana Gold, the Minera Florida mine continues to grow and evolve, 26 years since operations commenced.

134 Mina Invierno Energy security

126

This Chilean coal project will create energy security and increase the economic activity of a region that has long been stagnated.

146 Aminpro

Passing the test

How Aminpro finds itself pursuing expansion of not only its service offering but its regional presence also.

154 Enaex

146

The value of good service

For over 90 years Enaex has played a critical role in serving Latin America’s mining industry.

special report | 63

the vital statistics Area 756,096.3 km2 Population 17.2 million (2011, src World Bank)

official language Spanish

10 9 6

currency Peso (CLP)

8 14

12

Capital Santiago

3

2 4 11 1 5

7

Key mining operations Antofagasta Mining 1. Los Pelambres, 2. El Tesoro, 3. Michilla, 4. Esperanza Codelco 5. Andina, 6. Chuquicamata, 7. El Teniente, 8. Minera Gaby, 9. Ministro Hales, 10. Radomiro Tomic, 11. Salvador Compañía Minera San Esteban Primera 12. San José Escondida 13. Escondida mine, 14. Zaldívar mine, 15. Escondida Norte

64 | special report

13

15

chile at a glance the price of copper 2012-2013 4

high 3.93 USD/lb

3.8

low 3.29

3.6 3.4

down 0.64

infomine.com

3.2 Feb 2012

Mineral Exports 2012 (src Sonami)

May 2012

Jul 2012

Oct 2012

Jan 2013

Did you know...

40%

Copper

91%

Gold 3.5% Iron 2.8% Silver 1.3% Molybdenum 0.7% Lithium Carbonate 0.5% Salt 0.2%

Of the World’s copper deposits are in Chile

$100 billion Expected investment over the next 12 years

8%

Of Chile’s GDP is represented by the mining sector

special report | 65

Alberto Salas

president, La Sociedad Nacional de MinerĂ­a

Q&A What is the historical role of SONAMI? La Sociedad Nacional de Minería (SONAMI) is one of the oldest business organizations in Chile. This year we’ll have been running for 129 years and during that time we have played a key role in the development of the mining sector.

Since our establishment we have actively participated in successive modernizations of the mining legal system which regulates us.

We did so with the codes of practice from 1888 and 1930, which joined the Ley Orgánica Constitucional (common constitutional law) about mining concessions and the current mining code, enacted in 1983. With this same spirit, SONAMI has satisfied a variety of needs of small, medium and large mining companies.

What are SONAMI’s objectives?

The strategic objectives of our organization are to promote the development of private mining; to be the focal point of all mining activity in our country and represent all of our associates before the authorities and national and international organizations; to offer information services and to support our members with technical issues, legal issues, work issues, environmental issues, and tax and economic issues.

How important is mining in Chile?

Mining is the main economic activity in Chile, so we are strongly committed to the development of the mining sector and

in creating good conditions for foreign investment. In the last six years (20062011), the mining industry contributed 16.4 percent of gross domestic product, generated 64.3 percent of total exports and contributed to 23.4 percent of the total tax revenue. In conclusion, mining is the most competitive and relevant activity in international trade that the country has, so we are committed to becoming a mining power at a world level.

What makes Chile a good place to invest?

Chile is a great place to invest because national and local politics give investors confidence in our competitive environment through our institutional stability and social conditions as well as our balanced economy, free competition and open international trade.

Similarly, the law relating to mining concessions and the code of practice for mining in Chile have established a clear line of ownership of the mining concessions.

Last but not least, Chile is proud of its geological potential and the quality of its workers, engineers and professionals, all of whom are highly qualified to carry out these activities at a world class level.

How do you maintain dialogue with your members?

In order to make our administration more efficient we have organized work groups in different professional categories who analyze the concerns of our members.

special report | 67

Q&A For example, small, medium and large company mining committees have been formed and each one analyzes their main concerns and informs the directors.

Additionally, they carry out two general meetings during the year, in which all of our associates meet to discuss different points of interest.

What are the important issues for the mining industry in Chile?

The most important point is that today we have a $100 billion portfolio of investments for the period 2012-2020, which will generate 100,000 new jobs.

This impressive portfolio of investment is very important not only for its significant monetary value, but also for its multiplying effect on other production sectors and services.

As a result of this boom in mining, however, other challenges emerge which need to be dealt with to secure the competitiveness of our industry, especially relating to human capital, water and energy resources.

What is your position on responsible mining?

Mining today looks towards sustainability, which is a very significant current concern.

Mining companies know they should develop their projects alongside communities, with due regard to the environment and take an integrated approach, not only from the point of view of the shareholders but from all interested groups.

How does SONAMI support local communities?

We have created the SONAMI Foundation to support our initiatives in social responsibility, especially in regard to educational issues, culture and art. For their part, our associate companies have incorporated social responsibility as a central element of their activities.

In playing this momentous role in the development of our country, mining has clearly declared it is fully behind the concept.

Social responsibility is demonstrated by their active contributions to the sustainable development of the country, the improvement in the quality of life of its people by means of efficient ethical initiatives, which enable the community to benefit from the socio-economic profits derived from mining operations.

How do you see the future of the mining industry in Chile?

The numbers speak for themselves.

The current investment portfolio is very encouraging and with China leading the world’s economic growth, commodity demand is likely to remain solid in the future.

Alberto Salas, president, La Sociedad Nacional de MinerĂ­a: www.sonami.cl

special report | 69

The copper capital Thanks to its huge copper resources and a healthy investment environment, Chile has become the copper mining capital of the world, but other minerals are making a significant contribution, too written by: Martin Ashcroft

70 | Special report

mining in chile

Special report | 71

C

hile is currently responsible for over a third of worldwide c o p p e r production. It has been the leading global producer of copper since the 1990s when the government’s l i b e r a l i s at ion p ol ic y opened the country to the international mining community.

The state owned copper mining company Codelco (Corporación Nacional del Cobre de Chile) is the world’s largest single copper producer in its own right. Not only is Chile the largest producer of copper in the world, however, but it also has the world’s largest reserves. According to the US Geological Survey (USGS), Chile has 28 percent of the world’s reserves of copper, more than twice those of neighbouring Peru, the second global copper

producer. At the current rate of extraction, even if no more is found, Chile can continue mining copper for another 100 years.

With almost six million tonnes mined every year, copper represents over 40 percent of the country’s exports, and is its major source of income. The country’s recent political stability, along with a steady increase in price and demand for copper, has helped the Chilean economy become the strongest on the continent, with the highest nominal GDP per capita. The Global Competitiveness Report by the World Economic Forum for 2011-2012 ranks Chile 31st, well ahead of every other South American country; Brazil ranks 53rd, Peru 67th and Argentina 85th. Meanwhile The Ease of Doing Business Index of the World Bank for 2012 lists Chile as the 29th most

“At the current rate of extraction, Chile can continue mining copper for another 100 years” 72 | Special report

competitive country in the world and number one in Latin America.

Looking as far ahead as 2020, according to the Chilean Copper Commission (COCHILCO) Chile has a copper mining investment portfolio worth US$66.8 billion, including projects already under construction and others expecting to start construction by 2015.

COCHILCO’s projections up to 2025 expect copper production to rise by around 45 percent as a result of new construction projects.

Codelco plans to invest US$3.5 billion in expansion projects every year over the next six years, and private sector investment is on a similar scale. Antofagasta Minerals spent US$2.6 billion constructing Esperanza, and plans to double its production by 2020 with an investment plan of US$15 billion. Collahuasi, owned by Xstrata (44 percent), Anglo American (44 percent) and Mitsui (12 percent), is also undergoing expansion to double its production capacity from 500,000 mt/y of fine copper, to over a million metric tonnes per

mining in chile Road to Andina copper mine in chilean Andes

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Leonardo Flores - General Manager +56-2-2958 2471 | info@aminpro.cl www.aminpro.cl | www.tailpro.com

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mining in chile

year with an investment of US$3.2 billion.

The expansion of BHP Billiton’s Escondida is another huge project, likely to reach US$5 billion in investment, and Anglo American has already invested around US$2.8 billion in its Los Bronces development, which is expected to be the fifth largest copper mine in the world, with reserves and resources supporting a mine

life of more than 30 years, with further expansion potential.

Having established Chile’s credentials as the world’s major copper producer, let’s not forget the country’s other mineral resources.

In 2011, Chile ranked first globally in lithium and rhenium as well as copper, third in molybdenum, fifth in silver and 15th in gold.

Chile was also one of the world’s significant producers

and exporters of potassium nitrate and sodium nitrate and ranked second after Japan in world production of iodine. Over the next four years, a substantial increase is anticipated in silver, copper and, especially, gold output.

According to recent US Geological Survey statistics, Chile is now fourth in the world in untapped gold reserves. In 2011, Chile mined 50 tonnes of gold, but

“Gold mines are staying in production for longer, producing gold that would not have been viable a few years ago” Special report | 75

its potential is estimated at up to 3,750 tonnes. The same statistics project that Peru, currently South America’s largest gold producer with 165 tonnes mined in 2011, has only 2,000 tonnes of gold reserves left to be extracted.

Gold production in Chile is expected to grow by 19 percent from 2011 to 2015, cementing the country’s position as a significant producer. With no national champion dominating the gold mining industry to the same degree as Codelco does

in copper, Chile offers a level playing field for foreign gold explorers and producers.

With the price of gold continuing to rise, the impact of new technology and the ability to mine

50 Tonnes Gold mined in Chile in 2011

Aerial view of open-pit copper mine in Atacama desert, Chile

76 | Special report

greater depths, gold mines are staying in production for longer, producing gold that would not have been viable a few years ago.

Increasing productivity and reducing production costs have ensured Chile’s mining competitiveness in international markets, but the Chilean mining industry does have some challenges to face, including access to water, energy and qualified personnel. With most mineral deposits located in the Atacama Desert in

mining in chile

“This impressive portfolio of investment is very important for its multiplying effect on other production sectors and services” the north of the country, one of the driest places on earth, water availability has become a critical factor.

Mining companies have t raditionally obtained water from aquifers, but the scarcity of fresh water and competition from agriculture

and manufacturing has led them to look at alternatives including seawater, water recirculation and innovative waste disposal solutions.

Overall, Chile has a positive combination of substantial mineral reserves and a favourable business environment. “Today we have a $100 billion portfolio of investments for the period 2012-2020, which will generate 100,000 new jobs,” said Alberto Salas, president, La Sociedad Nacional de Minería (the national mining society of Chile). “This impressive portfolio of investment is very important not only for its significant monetary value, but also for its multiplying effect on other production sectors and services.”

The mining sector is a pillar of the Chilean economy. The government strongly supports foreign

investment in the sector and has modified its mining industry laws and regulations to create a favourable investment environment for foreign companies. This context has also attracted the largest international suppliers of business services and equipment as well as the mining operators themselves. A highly competitive market has developed over the past 20 years and has led to the sophistication of the service sector, through new technologies, integrated suites of equipment and more sophisticated assistance and maintenance services.

The stable political and economic climate and the mining regulation framework have supported investors’ confidence in the country. With a huge production potential, Chile’s mining future looks like a safe bet.

Special report | 77

THE COPPER

CONDUCTOR 78 | special report

Codelco

Almost a third of the world’s copper production comes from Chile whose state copper production company Codelco dominates world supply

written by: John O’Hanlon research by: Richard Halfhide special report | 79

Codelco

C

Autonomous mining trucks

opper fundamentals are highly buoyant. Demand for copper is increasing at over half a million tones annually, most of it driven by China, which consumes 20 percent of global supply.

Demand for copper shows no sign of levelling off in the opinion of researchers at Yale, who calculated from 2006 consumption figures that global demand for copper would exceed the amount extractable from the ground by 2100.

Codelco (Corporación Nacional del Cobre de Chile or the National Copper Corporation of Chile) was founded in 1976, five years after the Chilean government nationalized the entire copper mining industry. Codelco grouped the existing deposits into a single mining, industrial and commercial corporation and today it is the biggest copper producer in the world controlling a tenth of known global reserves. Codelco has more than $20.835 billion in assets and in 2011 its equity totalled $6.065 billion. In the same year the company produced 1.79 million metric tons of refined copper - over ten percent of world copper production. And at today’s investment levels it estimates it has the capacity to maintain current production rates for a further 70 years at least.

But that can’t be done without strategic investment, and a number of specific projects are being targeted. The Andina Division is located at 3,000 metres above sea level a little to the north of the Chilean capital Santiago and at the base of the chain of operations that is strung out along the Andes in the northern half of Chile. It

special report | 81

CodelcoCODELCO

FINNING, CONTRIBUTING TO THE FUTURE OF MINING benefits to the mining companies, it permits that the workers operate from securer places and the possibility that the processes are conducted in a more constant manner” In addition, Finning and Caterpillar have been working on the design, development, validation and implementation of new processes, equipment and technologies, for the exploitation under a new concept called “continuous mining”. This implies a very big technological change, which will permit the extraction of mineral without detentions.

This technology addresses several of the current challenges that the mining industry Mining companies are continuously looking faces: increase of the costs, derived from for different ways to improve security, fall in the quality of the mineral extracted , reduce costs, increase profitability, and promoting efficiency. Also, new technologies requirements of sustainability and the need for always improving the standards of safety are always required to increase production, and occupational health of the operators and improve the recovery of the minerals and to mining workers. keep the workers secure.

Finning and Caterpillar have understood this “Finning’s aim is to fulfill the markets needs challenge. That’s why they have implemented with excellence in equipment and services, so that their customers may reach each an important technological plan, which facilitates advancing towards an automated of their goals. To be able to do this in an accurate manner technology plays a key mining industry using the latest technology role, that’s why Finning and Caterpillar are in systems, which allows control and command of the operations of various mining working so hard in that dimension. Last but not least, Finning is playing an important role tasks from a central office.. in tackling the challenge of lacking qualified Currently Finning´s offerings includes professionals for the mining business in semiautonomous technology that allows general, by investing in Technical Formation, for operation of LHD equipment, this suite to be able to ensure and deliver the best is called Command. Command permits the operator to do the loading work cycle from a service in the market and to offer formation remote location, operating the machine using for operators and technicians on the client´s side.” a control.

“It is positive to be incorporating process www.finning.com automation, since it brings important

WEEKLY| |832 specialBEreport

$4.3 Billion Invested by Codelco in 2012

Employee at the Ventanas division

84 | special report

is a combined open-pit and underground mining operation. Andina Expansion Phase I project involved expanding its mining and processing capacity from 72,000 tonnes per day to an average 94,000 tonnes per day and was completed in 2012 at a cost of $1.2 billion. But this was just the first part of a major expansion programme aimed at increasing annual production at the mine to around 680,000 tonnes over the next 30 years. Andina Phase II is truly a megaproject involving the shifting of more than half a million tonnes of ore daily once it is completed in 2018 – by then Codelco will have invested $6.27 billion at Andina.

Chuquicamata, 1,600 kilometres to the north of Santiago near the port of Antofagasta, is an open pit operation that has been mined for a century and is close to being mined out.

But lying at a deeper level Codelco estimates there is a further 1.7 billion tonnes of copper ore. So from 2019 and for the next 50 years after that Chuquicamata will operate as an underground mine, a change that will cost $3.8 billion. The method to be used here is block caving, which involves driving access tunnels below fragmented ore that is crumbly enough to flow under gravity to the waiting trucks. It is an increasingly favoured way of dealing with high volume, relatively low

Codelco

Construction of the underground tunnels at Chuquicamata

grade ore deposits (Chuquicamata comes in at around 0.7, with molybdenum at around 500 ppm) as long as the geology is right Going underground at Chuquicamata will give Codelco potential production of 340,000 tonnes of fine copper and more than 18,000 tonnes of fine molybdenum a year from an expected throughput of 140,000 tonnes of ore a day. During its

construction it will create a maximum 3,767 jobs. From 2019, the operation will provide work for up to 4,837 employees.

It is being designed to the highest safety standards, and will have a very positive environmental impact – by going underground Chuquicamata will reduce its dust emissions by no less than 97 percent.

Another older mine, this time an

“From 2019 and for the next 50 years after that Chuquicamata will operate as an underground mine, a change that will cost $3.8 billion” special report | 85

ENGINEERING-ENVIRONMENTAL

www.pochcorp.com

• Analysis and Project Evaluation

• Sustainable Development

• Engineering and Design

• Environmental Engineering and

• EPCM Projects • Implementation and Commissioning • Project Management • Procurement • Construction Management

Management • Natural Resources and Cultural Heritage • Strategies for Businesses and Communities relations • Green Building

Chile - Peru - Colombia - Brazil - Mexico - United States - Australia

CodelcoCODELCO

ENGINEERING-ENVIRONMENTAL A Latin American leader in engineering, construction, project management and environmental.

POCH is a Chilean enterprise specialized in providing Engineering and Environmental consultancy services.

With more than 23 years of experience, POCH is a leading company in the South American market, with a team of over 600 professionals and experts in the developing of integral services which include Engineering, Project Management, Construction Management, Technical Inspection of Works, EPCM Projects, Environmental Management, Natural Resources and Sustainable Development, among others.

The company has participated in the development of important investment projects and services for many recognized Chilean, Latin-American and worldwide companies, in many different industries, such as Mining, Food and Beverages, Telecommunications, Infrastructure, Energy, Edification, among others.

Privately owned and with headquarters in Santiago, Chile, POCH has offices also in Peru, Colombia, Mexico, Brazil, Australia and the United States.

The company´s commitment to face new challenges and to constantly diversify its

services has allowed it to sustainably and organically grow in a 15% relation per year.

Looking forward to constantly attend the Mining industry needs, a very important economic sector in Chile and South America, the company has an experienced and professional team of experts and specialists in the fields of Engineering and Environmental services, also in all the different engineering specialties, such as civil, structural, electrical, mechanical and piping, robotics and hydraulics, among others.

In the Chilean mining industry, POCH has participated with an important number of firms mainly offering them Engineering and Environmental Services, growing step by step in the development of solutions for this industry.

In another matter, POCH has a very important commitment to develop a sustainable business and to contribute to the development of economies and communities where it develops projects and studies. The company is also a member of the Global Compact initiative of the United Nations, which brings together companies around the world to work in relation to the respect of human rights, labor, environment and anti-corruption.

E. poch@pochcorp.com www.pochcorp.com

WEEKLY| |872 specialBEreport

underground operation, is the El Teniente property that traces its origins as far back as 1819, though commercial mining has been done there since 1905. The existing mine near Rancagua south of Santiago is the world’s largest underground copper

mine containing 2,400 kilometres of tunnels and lies at an altitude of nearly two kilometres. The new mine level (NML) will involve cutting a massive two million square metre slice deeper into the mountain, accessed by two parallel

“It seems inconceivable that the demand for Chilean copper could fail to justify the massive expansion projects that are in the pipeline�

Copper production at Chuquicamata

88 | special report

Codelco

Operations office at the Andina division

nine-kilometre tunnels, one for access and the other for the conveyor that will take the ore out to the concentrator site.

Between 2011 when construction started and its commissioning in 2017 the project will build 98,450 metres of tunnels and 3,454 metres of vertical ventilation shafts and transfer shafts. Most of the $3.5 billion investment will go on this underground work: surface work includes

the construction of a new, faster road from Rancagua with associated tunnels and bridges – this will make life easier for the mine’s 5,500 employees. To a great extent the new El Teniente operations will be remotely operated from a control room at Rancagua, 50 kilometres away from the mine. The NML project adds 2.02 billion tonnes of reserves, at a 0.86 percent copper grade. Codelco estimates that at over 50

special report | 89

Codelco’s Radomiro Tomic division

Codelco

1,809

million tonnes Codelco’s Cu 2011 production years of operation starting from the end of 2017 it could produce more than 17 million tonnes of fine copper.

In all Codelco’s current portfolio involves 30 studies and projects aimed at keeping the Chilean national mining giant in a leadership position globally, not only in terms of production numbers but also in environmental, technological and safety best practices right across the value chain. Emissions, water usage and energy conservation are all at the heart of Codelco’s strategy – however it seems inconceivable that the demand for Chilean copper could fail to justify the massive expansion projects that are in the pipeline.

The company’s recently appointed CEO Thomas Keller has been busy courting world markets and especially the Chinese market which according to Keller accounts for 40 percent of world demand an can be expected to grow between five and seven percent annually based on China’s predicted GDP growth of up to eight percent.

For more information about Codelco visit: www.codelco.com

special report | 91

Anglo American: Los Bronces

SNOW CAPPED COPPER

It may not be quite the highest mine in the world, but Los Bronces in the Chilean Andes has its own set of challenges for its new general manager Sam Rasmussen

written by: Alan Swaby research by: Daniel Finn

Special report | 93

Exploration geologist EsmĂŠ Tristram examines copper bearing ore near Los Sulfatos, high in the Chilean Andes

Anglo American

R

eaders of this publication will be long familiar with arduous mining ventures. Normally, this means somewhere miles from nowhere in some hard to reach corner of the country. But in the case of one of the richest copper mines in the world, all the challenges and feelings of remoteness stem from the fact that it lies some 11,000ft above sea level.

“The Andes are practically on the doorstep,” says Sam Rasmussen, general manager of Anglo American’s Los Bronces mine, “and they create a wonderful backdrop to life in the city. The mine is only some 65km from Chile’s capital Santiago and just around the corner from one of the country’s skiing playgrounds. But working at about 3,500m, with several meters of snow a year, is challenging in anybody’s book.”

Not that the location has ever been a complete barrier to mining. As long ago as 1867, prospectors took their picks and shovels up the mountain to stake out a claim to the riches up there. So antagonistic did the rush for glory become that the area became known as La Disputada de Las Condes, with fights frequent and life cheap. Anglo American has been operating in Chile since 1980 and over the years has strengthened its holding through a series of acquisitions until, in 2002, it added the Los Bronces mine to its operations.

Los Bronces is an open-cut copper and molybdenum mine. In 2011, Los Bronces produced 221,762 tonnes of fine copper, including high-purity cathodes and copper concentrate, as well as 948 tonnes of

Special report | 95

OVER 20,0 FOR ANGL

Vapor Procesos is a Chilean company that provides innovative and efficient solutions to the biggest mining producers. Our principal service is focused on identifying revenue leakage areas inside the main mining processes, minimizing environmental liabilities and ensuring business sustainability.

Once opportunities are identified, integral solutions are implemented at site - including engineering, development, financing, installation and operation generating additional revenue to our customers.

Vapor Procesos is a constantly growing company, with young and qualified personnel who strive to be at the top of their field and guarantee a service of excellence.

Av. Nueva Costanera 3832 Of. 32, Vitacura, Santiago-Chile | Phone +56 2 478 71 00 | Fax +56 2 478 71 01

www.vaporprocesos.cl

000 TONS OF FINE COPPER RECOVERED SINCE 2007 LOAMERICAN AT DIVISION LOS BRONCES – CHILE

VAPOR PROCESOS, STRATEGIC PARTNER IN MINING SUSTAINABILITY

Anglo American down – making a project that molybdenum concentrate.

In November 2007 the board would normally take about approved an expansion three years spin out to just under four to start producing. plan aimed at increasing Rasmussen’s job is to iron the mine’s annual copper out the wrinkles and ramp output by some 278,000 the plant up to production tonnes in its first three capacity. “Even though we years and by around are dealing with the same 200,000 in the first 10 years. Molybdenum output ore,” explains Rasmussen, is expected to rise to some “there is always a long 5,400 tonnes annually.

Confluencia close up period of fine adjustments With a total startup capex necessary and a slow of US$2.8 billion, the project produced its build-up of volumes to give the production team chance to spot potential problems. first concentrate in November 2011.

But shortly after construction began the This is necessary because once up to speed, 2008 global recession started to bite and the new grinding facility in the Confluencia while work never actually stopped, it did slow sector will have to process 87,000 tonnes

FORACO Seven years of Anglo American and Foraco.

Trust and continuous improvement.

I can proudly say that, for the last seven years, we have maintained a strategic alliance with Anglo American, specifically División Los Bronces. We have built a working relationship founded on continuous improvement, with emphasis on delivering excellent work, as we do with all our clients. This relationship is based on values that are fundamental to our company and that go through the focus of our lives: working to comply with safety policies, take care of the environment and the communities close to our field work; technological innovation, adding value to our service; having integrity above all and mutual commitment with our strategic partners.

Our relationship with Anglo American has generated important development experiences, new work opportunities in this industry, in which we have been able to be leaders in the management and execution of national and international drilling projects, achieving the recognition from our peers due to our excellent services and the professional and technical training of our workers.

I strongly believe that working with companies who are fully committed to safety, the care of the environment and concerned about always improving is an important contribution, not only to the industry, but also to the people and the entire country.

Pablo Hamilton G. Senior Vice President - Latin America

Special report | 99

Napoleon 3200 of 202 , Las Condes, Santiago, CHILE CP: 755 02 15 Tel: 562-233-1584 Fax: 562 - 233 - 1206

Comprehensive service in exploitation and mining projects TREBOL MINERALS SA is a service company, delivering crushing and mining projects for large and medium scale mining operations in Chile and abroad.

Our services include the construction and assembly of crushing plant and the transportation of minerals.

TREBOL MINERALS SA. We have provided services and advice to our customers on the crushing of minerals for over 10 years.

• Engineering for the design and construction of crusher plants.

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• To be the strategic partner of companies wishing to invest in mining projects.

Marco Urenda - Executive Director murenda@inbsa.cl | Tel: 562-233-1584 anexo (215) Gonzalo Barriga Barriga - General manager gbarriga@inbsa.cl | Tel: 568-199-3647 56- 9-8199-3647

Homero Iriarte - Sales assistant. hiriarte@inbsa.cl | Tel: 56-2-233-1584 566-629-0060 Juan Carlos Lagos - Supply Department Head jlagos@inbsa.cl | Tel: 56-2-233-1584

Anglo American of ore a day.”

Nevertheless, the grinders In many ways, production bristle with sensors and at Los Bronces is very circuits to control speed, flow and lubrication. traditional. It’s an openAt its peak of output, pit mine where ore is Los Bronces will become transported by truck to a bank of two crushers – one the fifth largest copper Total daily processing old plus one new installation mine in the world. Based capacity – and later by conveyer to on the latest expansions, grinding facilities, for a despite having mined total processing capacity of there for the best part of 148,000 tonnes per day.

150 years, Anglo American estimates the The new SAG mill (of 12.2m x 7.6m) mine will be productive for roughly a uses the latest gearless drive technology, further 30 years whether or not further where the axis of the mill is mounted with deposits are discovered.

Perhaps the most novel aspect of the whole induction windings and becomes the motor drive rotor; but this in itself is very much Los Bronces project is the way that slurry proven technology rather than experimental. is transported to the Las Tórtolas flotation

148,000 tonnes

Routine cleandown of the exploration access tunnel

Special report | 103

PLASTRO MINING IS A LEADER FOR INTEGRAL SOLUTIONS (TURN-KEY PROJECTS) IN THE HEAP-LEACHING MINING BUSINESS The integral solution of Plastro Mining includes best in class quality products such as the Hydromine drip-line product produced in South-America (Argentina, Chile and Brazil), the Tornado sprinkler product, design, installation, hydraulic and maintenance services.

Our products are designed for the special climate conditions in the mines and for the liquid materials involved in the heap-leaching process under ISO 9001-2000 certifications.

Our design services involving engineering technology together with advanced hydraulic knowledge.

Telephone: + 56-2 446 44 44 / +56-2 738 53 00 ext. 112 Email: huertafernando@johndeere.com

The installation and maintenance services are based on strong quality working procedures, controls, safety and internal policies.

Plastro Mining employees’ long term experience, products and services with the mining Heap-Leaching operations (mainly in Chile) have proven results to optimize the mines production.

Our hydraulic design linked to the production process of heap leaching using irrigation materials and implementing certified quality.

Anglo American

Yuri Varas in the processing plant at the leaching stage - Inspecting copper anodes

plant, where copper and molybdenum which the slurry travels from grinding concentrates are produced. “There is no facilities at an altitude of some 3,500m to real problem crushing the rock at the about 750m above sea level (the latter being altitude we do,” says Rasmussen, “but the altitude of Las Tórtolas’ two flotation the separation process involves water and plants where copper concentrate is finally tailings. With so much of the time spent at produced) five choke stations were installed freezing temperature and below, anything along the pipeline route to slow the speed at that relies on free access to water is going which the slurry travels.

A key part of the initial project to be a stop/start process at some 3,500m.”

Therefore, the slurry evaluation process was an (produced from ore ground environmental impact study. at both the new and old This was carried out in 2006 and approved by the Chilean grinding plants) goes on a National Environmental roughly 54km ride down Agency the following year. two pipelines to the valley Slurry pipeline journey below, where concentration It considers the use of areas from grinding to facilities are located. Due intervened to date and concentration facility to the force of gravity with therefore does not affect

54km

Special report | 105

Quality Tech Services for Mining Industry Since 1991 developing successful turn key projects and operation/ maintenance services in Telecom area in open pit and underground mines.

Strong background on Fiber Optics, Microwave links, Wireless Networks, Digital and analog Two Way Radio, Solar Energy and Telecom infrastructure.

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106 | January 2012

other environmental assets. Most of the additional water needed for the new grinding plant comes from greater recirculation from the Las Tórtolas tailings dam to the mine.

In comparison to the older mills, the new set-up is much more water efficient and the quantity of fresh water used per tonne of copper produced will therefore drop by an estimated 25 percent.

Being on the side of a mountain means that there isn’t much space to spare. In fact, one of the biggest constraints Rasmussen has is working in such a confined space.

“Effectively we are digging two pits,” he says, “although at some stage the ore bodies will merge and things will open up a bit more. Then, because of the number of snowy days we get, we have to maintain a sizable

Anglo American

General view of the open pit at Los Bronces

stock pile of ore to keep the crushers running during days when mining can’t take place.”

The one good aspect of Los Bronces’ location is that it is possible to commute if you are inclined to negotiate the mountain road on a daily basis. Rasmussen and some of the other managers usually take this option but for the majority of the 3,300person workforce (roughly 50/50 staff and contractors) who work various shift patterns,

daily life means staying at the Anglo hotel during the working week.

Los Bronces is just one of five operations Anglo American operates in four regions of the country with shareholding in a sixth, all managed from a head office in Santiago.

In fact, Anglo American is one of the most important copper producers in Chile. Its vertically integrated structure means the Group covers every aspect of the process

“All supervisors must provide effective leadership on safety for those who report to them” Special report | 107

Andres Carrion inspecting the copper sheets

“The Emerge Program aims to give communities the tools needed to kick start new businesses” internally - exploration, mining, processing and marketing of copper cathodes, anodes, blister and concentrates, molybdenum concentrate and sulfuric acid.

Once, safety in the mining business was treated in a cavalier manner – and still is in some parts of the world. But for an organization such as Anglo American, where any incidents that do occur are highlighted in the company’s annual

108 | Special report

report, safe working conditions are uppermost in everyone’s mind. “Managers are all held accountable for the safety of workers,” says Rasmussen. “It is expected that all supervisors must provide effective leadership on safety for those who report to them, and acknowledge that good safety conduct is the responsibility of everybody working in the company. It’s their job to make technical inspections in each work

Anglo American

Working on the ore conveyor

unit to identify places and personnel with the highest risk exposure.”

Being such an important part of the Chilean economy, Anglo American recognizes and honors its social responsibilities. Over the years, the company has developed its own methodology, in conjunction with an environmental consultant, on how best to identify, assess and manage the impacts of its operations on the surrounding communities.

It uses what is known internally as the ‘Socio-Economic Assessment Toolbox’ (SEAT) which helps identify the major issues in communities in the vicinity of mining operations and proposes efficient responses to their development. In fact, in 2004, the Casa de la Paz Foundation applied SEAT to all five operations in Chile,

Pulp thickener at Los Bronces, Confluencia facility

making it the first company within the Anglo American group to deploy this methodology across the board.

Since 2006, Anglo American has been running the ‘Emerge’ program, inspired by its experience in South Africa in 1980.

The aim is to contribute to the economic development of communities near its operations by encouraging individuals to start their own commercial activities and to help existing small and medium-sized businesses to improve their performance.

The scheme uses a mix of financial support and business development training and is currently operating in a dozen parts of the country. “The Emerge Program,” says Rasmussen, “aims to give communities the tools needed to kick start new

Special report | 109

Anglo American The processing plant over looking the ball mill

3,500 metres Altitude of Los Bronces mine

businesses which not only support the entrepreneurs themselves but also create wider employment opportunities.�

A key component of this program is the strategic partnership Anglo American has with Fondo Esperanza, an institution which grants micro-credits and provides business education to community banks or groups of 18 to 25 people who live in the same area and come together for mutual support. In each community bank, members must serve as co-guarantors, committing to pay back the loan. So if one defaults, the others must step in and make up the shortfall.

Other more conventional aid programs are also undertaken, such as work to eliminate shanty towns or the backing of organizations devoted to improving educational opportunities. Back at Los Bronces, though, with the Southern hemisphere winter just around the corner, Rasmussen and his team are pleased with the progress that is being made with the new installations constructed with the expansion, which is nearing the end of its first six months of working life and on target to meet production schedules.

For more information about Anglo American: Los Bronces visit: www.angloamerican.com

Special report | 111

Into the deep written by: will daynes research by: abi abagun

112 | Special report

KGHM Polska Miedz - Sierra Gorda Project Business manager Roberto Luna discusses the on-going development of the Sierra Gorda open pit copper mine project

Special report | 113

Salt water pool - Earth work

KGHM Polska Miedz

A

s well as having the distinction of being known as the driest desert in the world, the Atacama Desert of Northern Chile is home to the Sierra Gorda project. “A large tonnage, open pit copper mine development,” explains business manager Roberto Luna, “it boasts deposits that total up to 2.2 billion tonnes of measured and indicated resources, and reserves amounting to some 1.3 billion tonnes.”

Estimated to have a useful life of 20 years, two phases of activity have been proposed.

The first of these will run from 2014 until 2017 and will feature an ore throughput rate of 110 kilotons per day. The second phase will then commence in 2017 and is expected to involve ore throughput reaching levels of 190 kilotons per day on average.

The main plant equipment needed to be brought together for the first phase of the project includes one primary crusher, four secondary crushers, three ball mills, four high-pressure grinding rolls and 32 floatation cells. In turn, six 73 cubic yards shovels, 41 cubic metre front loaders, six drills, and 29 trucks with a 300 tonne capacity are being considered for the mine.

As is the norm for an open pit mine, the ore from Sierra Gorda is hauled by trucks to a primary crusher. By means of conveyors over the ground the ore is then transported from the crushing stages to the concentrator plant, before grinding is carried out through ball milling using hydrocyclone classification circuits. The ore released from wet grinding is then recovered during the bulk copper and

Special report | 115

SIERRAMiedz GORDA KGHM Polska

SalfaCorp As an industry leader, Salfa Montajes, a SalfaCorp subsidiary working in industrial construction and assembly in mining and energy, has been awarded construction and installation of the Sierra Gorda Processing Plant (110,000 ton per day capacity) dry and wet areas. With a contract totaling over $350 million dollars, the Sierra Gorda project covers all multidisciplinary areas with a commitment of over 10,000,000 man-hours from the start of Civil Works to the launch of the plant, including raw materials stockpiling, secondary and tertiary grinding (HPGR), secondary and tertiary sieves, crushing, floatation, filtration and tailings thickeners, among other areas.

As part of this process, for the past two years Salfa Montajes has taken part in the project’s constructability with Sierra Gorda S.C.M., both in Chile and Canada.

Salfa Montajes has been involved in every stage of the project, including construction strategy, organizational structure, logistics, as well as assessment and awareness of the construction CAPEX in each of the engineering stages.

With 83 years of experience behind it, SalfaCorp is ranked in the top 5 in Latin America companies in engineering and construction, leading the Chilean market with annual sales of more than $1.7 billion dollars, and with a workforce of over 44,000 and 2,400 professionals.

Constant evolution and innovation has permitted Salfa Montajes to be an industry leader in its areas of specialty and service. It has reached successful international expansion to key regional markets such as Peru, Colombia, Panama, and Uruguay, with active participation and dedicated client service.

Throughout its history, the company has demonstrated an outstanding ability to grow in a sustainable manner and offering solutions for a variety of services, including construction and industrial assembly, civil construction, infrastructure, industrial maintenance, mine development, marine works, earth moving and EPC projects.

E. salfacorp@salfacorp.com www.salfacorp.com

OCTOBER 2012| 117 |1 Special report

KGHM Polska SIERRAMiedz GORDA molybdenum flotation stage.

Sierrafinal Gorda feature is text.....Lorem ipsum The product a mixed copper dolor sit amet, consectetur adipisicing elit, and molybdenum concentrate that is sent sedado eiusmodplant tempor incididunt ut labore to flotation where molybdenum is et dolore magna aliqua.

Ut enim ad minim recovered and copper concentrate remains veniam, quis nostrud exercitationare ullamco as the tails.

Both concentrates then laboris nisi ut aliquip ex ea commodo conveyed to marketing areas by a railway consequat. aute Antofagasta. irure dolor in line located inDuis the nearby reprehenderit in voluptate esse Polska cillum A joint venture betweenvelit KGHM dolore fugiat nulla pariatur.

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consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

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Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor Prestripping

HATCH HELPS SIERRA GORDA BECOME ONE OF WORLD’S LARGEST MOLYBDENUM PRODUCERS Sierra Gorda has turned to Hatch’s EPCM expertise to support its ambitious copper / molybdenum plant project in the Antofagasta region of Chile. This is a unique opportunity for the company, since the mine’s molybdenum ore grade for the first three years is about 900 ppm, which is significantly higher compared to the industry standard of less than 90 ppm.

Working with a tight timeline between July 2012 and May 2013, Hatch is responsible for all detailed engineering duties of the molybdenum flotation plant, including a thorough analysis of the basic engineering stage, and delivering all documentation needed for procurement and construction.

During its first three years of operation, the 110-ktpd ore throughput copper and molybdenum concentrator is expected to produce 450 ktpa of collective concentrate, of which 7 percent is molybdenum

concentrate. For the remainder of its estimated 22-year life, the plant will continue processing at 190 ktpd of ore generating 790 ktpa of collective concentrate with 1.5 percent being molybdenum concentrate. That transition will require a flexible design in order to accommodate the different ore throughput to be processed from year four onwards.

“We have always believed that Hatch delivers strong engineering capabilities and expect they will fulfill their commitment to design this plant, a critical part of the project, within the tight schedule,” said Joe Tis, vice president of development for Sierra Gorda.

Equipment covered under the project includes thickeners, flotation cells, molybdenum concentrate filters, regrinding mill, dryers, packing maxi bags equipment and associated infrastructure. www.hatch.cl

Special report | 119 OCTOBER 2012 | 2

Knight PiĂŠsold S.A. Knight PiĂŠsold S.A. is currently developing the detailed engineering of the tailings transport, tailings storage and water management systems for the operation of the Sierra Gorda Project. In order to address this project and comply with the expectations of Sierra Gorda, we have formed a multidisciplinary team composed of specialists from the following disciplines: civil, electrical, instrumentation, water and tailings transport, geotechnical and geology, construction, risks, project control, quality and safety.

The strengths of our team, coupled with the collaboration and participation of the team from Sierra Gorda, have

enabled us to comply with the objectives defined at the outset of the project, in terms of both the agreed upon goals and deadlines. This has resulted in a final design of the deposit that meets the highest standards of both safety and constructability.

E. santiago@knightpiesold.com www.knightpiesold.com

KGHM Polska Miedz

Workers

parties’ expansion, internationalisation from the fast-track status of this particular and position strategy for the global copper greenfield project where deadlines are and molybdenum market. The project incredibly demanding and shorter than the presents the ideal opportunity to bring industry average.”

Of equal importance is the need to capture, about increased resources, reserves and production, and ultimately raise the value retain and train the employees required for of the three companies on a global scale. the construction, operation and development “The primary challenge at the heart of of the project. At present, over 3500 people this venture,” Luna continues, “is being are assisting in the construction phase, with this number expected able to design, procure, to peak at around 7000 in construct, commission and successfully start up a large the near future. Once into scale project for a foreign the operational stage, a total of 2000 individuals are due company, where different to be active in carrying this visions inherent to the Length of pipeline cultures of each participant stage of the project through. carrying sea water are successfully integrated.

As a result of internal and to the project Another challenge stems external factors in Chile, and

141 km

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SIERRA GORDA: SEAWATER TRANSPORT PROJECT

BRASS Chile S.A. was contracted by Sierra Gorda S.C.M. for the Detailed Engineering of the 145 km – 36� diameter Seawater Transport with a maximum capacity of 1,500 l/s.

The pipeline utilizes a RFP Pipe at low pressure and CS at high pressure section. To enable delivery from coast to mine site at 1700 masl, 3 pump stations connected in booster mode are utilized: one at the coast and 2 intermediate. Each intermediate station has 7 high pressure pumps in parallel with 3,160 kw motor capacity each.

A chemical treatment plant with high efficiency filters are located at the first intermediate pump station. Operation is controlled through a SCADA system connected through fiber optic cables.

www.brassengineering.com

KGHM Polska Miedz the mining world in general, Ingeniería Civil Vicente (ICV) there is an increasingly Ingeniería Civil Vicente S.A. (ICV S.A.) is proud to have strong demand for qualified been able to participate, from the very beginning, in the labour and mining supplies, Sierra Gorda mining project in Chile, providing earth which has conspired to movement services for the construction of its preliminary produce an increase in platforms and infrastructure. prices. This has impacted The implementation of this important contract implied major logistics and engineering challenges for our company directly on projects that are and its successful completion reflects the joint efforts of currently under execution.

ICV and the client, Minera Quadra Chile Limitada.

“The Sierra Gorda project This key milestone in ICV’s history has added to our has not escaped the effects company’s experience, enhancing its capacity to undertake of this,” Luna highlights. “As other similar projects for Chile’s large-scale mining industry. a hedge against potential www.icv.cl f luctuations that could impact upon project costs and completion, moves have been made to commit purchase orders and contracts at the earliest stage possible.”

Nor t he r n C h i le ’s ge og r aph ic characteristics, namely the scarcity of water and energy, have also raised several issues.

To overcome these, the project follows the current trend of using seawater in the mining process. This water will be carried by means of a 141 kilometre pipeline with a flow rate of 1500 litres per second. Furthermore, two industrial water supply contracts have been entered into with Aguas Antofagasta and FCAB respectively. Processed at its on-site water treatment plant, this water will be made suitable for human consumption.

Meanwhile, the power required for the project will be generated by a coal-fired thermoelectric power plant located in Mejillones. From here a 140 kilometre long, 220 kilovolt transmission line will supply energy to a primary substation that will also be located on-site.

Flotation cells

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CAT shovel

KGHM Polska Miedz To date, 2012 has seen the project achieve several milestones, all of which revolve around the mine area itself. In addition to the mine loop now being in operation, March 2012 saw the start-up of the pre-stripping stage. Looking towards the years ahead, by the end of 2013 it is hoped that pipeline construction will be complete, plant mechanics in place and the pre-commissioning stage will have begun.

These events will then be followed in 2014 with the starting up of the commissioning phase, the opening of port facilities and the completion of ramp up operations.

“The project has been progressing as planned and in accordance with the schedule put in place by the joint venture partners,” Luna says. “The project’s critical path remains unchanged with originally scheduled deadlines still maintained and entry into production expected to begin during the first semester of 2014.”

As it relates to the immediate future, the goal for the rest of 2012 is to have the entire necessary infrastructure in place in order to allow the normal development of construction work. This requires the completion of camps, mesh halls, offices, recreational areas and a polyclinic. “In addition,” Luna says, “prestripping, pipeline and civil construction work in dry and wet areas have begun with our own equipment and personnel, while the project will continue to meet its expected output levels.”

For more information about KGHM Polska Miedz - Sierra Gorda Project visit: www.quadrafnx.com

Special report | 125

written by: Will Daynes research by: Richard Halfhide

Going for go 126 | Special report

old

minera florida: yamana chile

The Minera Florida mine continues to grow and evolve, 26 years since operations commenced Special report | 127

Minera Florida is an underground gold and silver mine that began operations in 1986

Minera Florida

V

ery much a pillar of Chile’s Located 73 kilometres south of Santiago, economy, the countr y ’s Minera Florida is an underground gold and mining sector has played an silver mine that began operations in 1986. important role throughout Commencing production at a processing the history of a nation that rate of 10,000 tonnes per month, the came into being some 10,000 years ago mine developed rapidly in the subsequent when migrating Native Americans settled decades with this rate increasing to 35,000 in the long and narrow coastal strip of land tonnes per month by 2003. Purchased by that lies between the Andes Mountains Meridian Gold from a private Chilean and the Pacific Ocean. company in July 2006, the mine was While the Spanish conquistadors that subsequently absorbed into the Yamana arrived and took possession of the region Gold company little more than a year later. in the middle of the 15th century came For its part, Yamana Gold boasts a diverse up short in their hunt for the extensive portfolio of assets, providing sustainable reserves of gold and silver gold production, supported that they believed to be by a large resource base. under Chile’s soil, the event With operations in some in many ways marked the of the world’s most stable dawn of Chile’s mining m i n i ng ju r i s d ic t ion s, legacy. Several years after including Brazil, Argentina Increase in total gaining independence from and Mex ico, Yamana gold equivalent Spain in 1818, commercial Gold also operates with reserves in 2011 relations bet ween the industry-low cash costs. country and the rest of the Ta k i ng i nto accou nt world were formally established, kick- expansions across all of its current starting the significant exploitation of operations and projects that are minerals such as silver and copper. under development, the company’s Most mining in the country is today production volume is expected to increase concentrated in and around the Norte by more than 60 percent to a level of Grande region, which spans much of approximately 1.75 million gold equivalent the Atacama Desert. Mining products of ounces by 2014.

Chile include copper, gold, molybdenum, In 2010, workers at Minera Florida iron, coal and silver, of which Chile is uncovered an extremely high grade Victoria the world’s fifth largest producer. Gold is vein structure. This discovery has since mainly produced as a by-product from the led to the company adding to previous country’s many copper mining operations, exploration success and has increased with approximately 1.5 million ounces grade and total mineral resources of gold to produced per year. over 842,000 proven and probable ounces

28%

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Total solutions for each company FOOD AND CATERING CLEANING AND GROOMING HOTEL, HOUSEKEEPING COFFE SHOP AND SNACK BAR COURIER AND POSTBAG RECREATION AND LEISURE

www.aliservice.cl contact (56 2) 913 5500 comercial@aliservice.cl

FOOD AND

TO TA L

SERVICE

Minera Florida and a further 529,000 Quimetal measured and indicated Quimetal is a well-known Chilean company with over ounces. Levels of silver 60 years of experience in fabrication and commercialization meanwhile have increased of specialized chemical products used in various industries to 6.3 million proven worldwide. For the mining industry, Quimetal offers sodium and probable ounces and bisulfite and sulfur dioxide (SO2), manufactured only with 2.8 million of measured selected raw materials and produced under the highest quality standards. For further information please and indicated ounces. contact us at: Combined, this provides comercial@quimetal.cl the mine with an estimated strategic life of over eight years, according to Yamana Gold.

More good news followed a year later with total gold equivalent mineral reserves at the mine increasing by 28 percent over the course of 2011. This was largely due to the inclusion of historic tailings, which would go on to be re-processed in April 2012. It is believed that these tailings will ultimately add around 40,000 gold equivalent ounces per year to the mine’s production volumes over the next five years.

New mineral resources outlined in the main core of the mine during 2011 also contributed significantly to a 46 percent increase in its total measured and indicated volumes. Over the course of 2011 nearmine exploration focused predominantly The mine has an estimated strategic on delineating extensions to the ore bodies life of over eight years

“Located 73 kilometres south of Santiago, Minera Florida is an underground gold and silver mine that began operations in 1986�

Special report | 131

Original discovery teams are still involved in exploration and development

in the Portzuelo, El Robie and Tribuna zones. During 2012, exploration has extended to the company’s newly acquired Mila claims, situated five kilometres south of the current mining operation.

Several other developments at Minera Florida have grabbed the headlines in recent months including the construction of a new re-process tailings facility and the large investments that have been

made in new power generation facilities.

The diesel-fired plant will optimise the power supply for a $56 million project to process old tailings at the operation. The new power plant will ensure operational continuity at the tailings processing plant as well as independence from the country’s Central Interconnected Grid.

Minera Florida’s tailings re-treatment plant was completed in May 2012, with

“During 2012, exploration has extended south of the current mining operation to Yamana Gold’s newly acquired Mila claims” 132 | Special report

Minera Florida

Construction in progress

Exploration drill holes

ramp up to design capacity will be augmented by the delayed in part due to ramping up of the processing of relatively low-cost the installation of a zinc historical material. recovery plant that was not initially contemplated.

Internally, the recently The zinc recovery plant strengthened leadership Of proven and probable is expected to further team t hat has been gold reserves within improve costs through the established at senior the mine application of additional management level in Chile zinc by-product credits. continues to focus on the Overall costs meanwhile mine’s operations, making are expected to improve when taking into the expansion and success of Minera account the addition of tailings production Florida their utmost priority. given the lack of mining costs associated with the process of re-treating tailings. In the For more information about months to come, it is believed that mine grade Minera Florida: Yamana Chile visit: will remain consistent with Yamana Gold’s www.yamana.com estimates, while overall site performance

842,000 ounces

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A Chilean coal project that is going to create a greater level of energy security while increasing the economic activity of a region that has long been stagnated

written by: alan swaby research by: Abi Abagun

134 | Special report

mina invierno

Special report | 135

Estancia Invierno

mina invierno

I

t must have been a nightmare for the first settlers who opened up the very far south of Chile. The country has something like 6,000 islands and most of them seem to be in the south. It no doubt came as a huge relief to set foot on what is today known as Riesco Island.

At almost 200,000 square miles in area, it is big enough to feel like terra firma and, although the explorers didn’t know it at the time, it is home to Chile’s largest coal deposits.

The island has been populated by sheep and cattle farmers for a hundred years, who stripped half the island of its trees to create grazing space. When the wood ran out, life in this cold part of the world was kept reasonably comfortable thanks to outcrops of coal that were easily found on the surface. In fact, it was because of coal that the region’s capital – Punta Arena – was established in the mid-1800s as a penal colony.

These coal deposits have been mined commercially in the past but never on a massive scale. At one point 100,000 tons a year was being taken, but from deep underground, and it got to a point where it wasn’t economical. It’s not particularly surprising that the venture never took off in a big way, as Punta Arena is closer to Antarctica than it is to the capital Santiago.

Then, since the 1960s, the government spent a considerable amount of money prospecting and discovered three large deposits of coal on the island with a minimum of 300 million tons, and some estimate there could be as much as a billion

Special report | 137

EMPRESA CONSTRUCTORA BELFI S.A. LEADING COMPANY IN CONSTRUCTION OF MARITIME WORKS

“ALWAYS PRESENT IN LARGE ENGINEERING PROJECTS”

WWW.BELFI.CL

mina invierno

Construction of the new port

tons – certainly enough to keep the lights reserves, enough to operate for the long term, providing around a third of Chile’s on in Chile for many years.

Around the turn of the millennium, BHP coal needs.” Considering that 96 percent of Billiton was given a lease to mine for coal coal for power generation currently has to and in 2006 the other two deposits were be imported, this will have a huge impact sold by public tender. “We acquired the on the country’s finances, and still leave rights for the two outstanding leases,” says sufficient capacity to generate export sales.

Ian Philippi, commercial Mina Invierno is actually a joint venture between director of Mina Invierno, E mpr e sa s C op e c (f ue l “and we also bought from BHP the mine lease already distributor) and Ultramar in place and the option to (shipping company) – take over BHP’s lease when which already successfully Coal for power developed a similar coal it expires in 2017. Together generation currently they form a base of 250 mine venture in Chile in imported by Chile million metric tons of coal the early 1990s. “Many of

96%

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EMPRESA CONSTRUCTORA BELFI S.A. Empresa Constructora Belfi S.A. is the company in charge of construction for the Project Mina Invierno under EPC contract, the coal loading mechanized pier in Riesco Island, Punta Lackwater sector in Chilean Patagonia.

The company: Empresa Constructora Belfi S.A. started operations in Chile since 1950, first as a limited company and since 1965 as a private corporation. During its long history, the company has built important projects in almost all fields of engineering, such as port and maritime works, architectural works, earthworks, road surfaces, bridges, tunnels, hydraulic and sanitary works, civil works, electrical, structural, electromechanical, pipe assemblies, instrumentation and automation.

The company is certified under standards ISO 9001:2008 and OHSAS 18001:2007

Experience: The wide experience gained by the company in more than 60 years, together with an efficient work team and appropriate machinery, guarantees good execution of any project.

Belfi has successfully carried out about 50 EPC projects.

Belfi S.A. is a leading company in Chile in building maritime works, such as ports, mechanized piers, submarine outfalls for wastewater and industrial effluents and big siphons for thermal power stations and desalination plants. We believe that 90% of outstanding works in this field in Chile have been carried out by our company.

For almost 10 years, Belfi has been executing works outside Chile, firstly in Peru, then Uruguay and Ecuador, countries where we are currently working. Next, we will be working in Colombia.

MEJILLONES PORT COMPLEX - CHILE

140 | Special report

mina invierno

PUNTA CHUNGO SEAPORT - LOS VILOS - CHILE

Mining: The mining industry has always featured in our history; firstly, through projects with Codelco - Chile and then big private mining companies, for which we have built works like access roads for mines in mountains, massive earthwork for esplanades to built offices, camps and industrial facilities for the mine, tailing dams, very long mineral pipelines, industrial facilities for important civil works and structural assemblies, electrical lighting and power, mechanics installations and instrumentation, mechanized piers for loading concentrate, coal loading and unloading, etc.

Works: The scope of works under construction by Belfi for Project Mina Invierno, is the following: 1.Crushing tower: The project involves the construction of two primary and secondary crushing towers to crush material extracted from the mine. These crushing towers include the construction of auxiliary works: - Electromagnet tower. - Conveyor belts.

2.Material transport system: A system of two conveyor belts with more than 1,120 meters of belts, from the crushing tower to the loading platform at the pier. Throughout the transport system, the material will go through the following complementary works: - Transfer tower. - Weight meters.

- Sampling tower. - Counterweight tower.

GNL MEJILLONES SEAPORT - CHILE

3. Pier: Mechanized, capable of serving vessels such as Handy type, Panamax and Capesize.

The pier will have the following elements: - Loading platform adequate to attend bulk carriers.

- Two cargo platforms with enough surface to serve a shiploader each.

- Access bridge for the loading platform with 411 meter length, adequate to erect transport belts with transfer capacity of 3000 metric tons of coal per hour.

- Pedestrian walkways between access bridge and anchor poles.

- Two breasting dolphins with flexible defense to dock vessels.

- Four anchor poles with release hooks.

- Docking cleat, buoys, poles and/or other mooring systems.

- Navigating lights for emergency signals and to protect the facilities.

- Pedestrian walkways between breasting dolphins, between anchor poles and between breasting bridge and anchor pole.

4. Auxiliary infrastructure and facilities: Access and circulation roads, power room, changing room and offices, warehouse and workshop. www.belfi.cl

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EBCOSUR SA is a company created in 2006 under the wing of the EBCO Construction SA, with the aim of providing construction services in the areas of construction, development and civil works.

Our projects are present throughout Chile www.ebcosur.cl

inspired Your weekly digest of business news and views

www.bus-ex.com

mina invierno the engineers and managers ARA WorleyParsons who worked on that project,” ARA WorleyParsons, a recognized authority in the design says Philippi, “are involved of infrastructure for mining operations, is proud to have with Mina Invierno. We have successfully delivered its front end consulting, engineering, experience with the climate, purchasing, costing, scheduling and site services with the local communities capabilities to the Mina Invierno Project. and with the logistical www.ara-worleyparsons.com demands that come from the geography.”

Almost all Chile’s coal fuelled power stations are in the north of the country – around the capital Santiago and beyond.

The only way to get the coal there from Riesco is by ship – a journey of 2000 to 3000km, taking seven or eight days. So the Mina Invierno project consists of two parts – the mine itself and a new port and loading facilities.

“Despite our Chilean customers being restricted to Panamax sized vessels, or 70,000 tons dead weight,” says Philippi, “the port at Mina Invierno will be able to accommodate much larger ships of up to 140,000 tons. This gives us the option, which we are already actively pursuing, of exporting part of the mine’s output.”

The $550 million project is being financed by a $450m loan from Chile’s Itaú Bank and work is already underway. The port has the longest lead time and in April 2012 is around 40 percent complete, as is the civil construction work at both locations. The Riesco Island nursery

“The port at Mina Invierno will be able to accommodate ships of up to 140,000 tons” Special report | 143

Invierno pit area

“We keep the local community very well informed and there is a high level of awareness and acceptance of what we are doing” mine won’t be going underground but has identified coal deposits starting at around 30 to 40m below the surface, down to a maximum depth of 180m. Pre-stripping of overburden has started and the material is being used in the construction of a new 7km long road between the mine and the port.

“The mine will eventually have a fleet of 15 x 240 ton trucks to move the overburden,”

144 | Special report

says Philippi, “and three shovels with 34m3 buckets. To move the coal to the port there will be two smaller shovels and 11 x 100 ton trucks.” All the equipment is already in Chile, most of it assembled on site.

Phase I of the project should see the first coal being shipped by the end of the year and production will gradually ramp up to six million tons per annum over a four year

mina invierno

The mine’s modern greenhouse

Livestock are part of the company’s environmental strategy

period. With reserves in Phase I of over 70 million tons, there is enough to be going on with for a decade.

Despite its strategic importance to the country’s balance of payments, the project hasn’t been given the go-ahead without some opposition. Environmentalists are concerned that the mine will lead to de-forestation on the island, but Philippi argues that the farmers have done that job for them long ago. Nevertheless, Mina Invierno has undertaken to refill the open pit mine using the removed overburden, and re-forest more than 500 hectares on the island as part of its exit plan. It is already growing thousands of saplings for that purpose.

Away from the cozy comforts of Santiago,

where most of the vocal opposition comes from, the local population is strongly in favor of the project and trying desperately to keep the discussions with Mina Invierno strictly at the local level. “We keep the local community very well informed,” says Philippi, “and surveys show us there is a very high level of awareness and acceptance of what we are doing. There will be a workforce of 1000 during construction and once complete, 700 permanent jobs in an area that is otherwise stagnant.”

For more information about Mina Invierno visit: www.minainvierno.cl

Special report | 145

aminpro

Passing

the test

With the mining industry in South America growing at a faster rate than ever before, the services of Aminpro have never been in higher demand. It is because of this that the company today finds itself pursuing expansion of not only its service offering but its regional presence also

written by: Will Daynes research by: Richard Halfhide

special report | 147

aminpro

W

hen we last spoke to Roger Amelunxen, owner of Canadianbased A melunxen Mineral Processing (Aminpro), in March 2012, he spoke about the raft of changes that has occurred in his field of expertise over the previous 15 years.

Now, as we enter 2013, he is just as keen to discuss how the business has evolved in little more than 10 months since.

“In the time since we last talked,” he states, “we have begun work at our pilot plant and this has resulted in considerable growth for the business, with our workforce increasing to almost 100 people and our sales figures tripling. This has partly been as a result of the tremendous level of interest in what we do here in Chile from companies in Europe and the US. This interest has led to Aminpro undertaking work with phosphate ores and graphite processing, something that was unheard in Chile before now.”

Established in 2000, Aminpro has since provided consulting services on a global scale to the mineral processing industry. It has done so both on its own and in partnership with other leading entities such as Minnovex Technologies, Hatch Engineers, Fluor, JKTech and Project Nexus. “Today,” explains general manager, Leonardo Flores, “we are in a position to provide both laboratory pilot test work and engineering consulting for most of the stages in the value chain of a mining project.”

A major development within the business that has given Aminpro the ability to provide this complete service offering was the creation

special report | 149

of Tailpro Consulting, a new business within the company. “What Tailpro has allowed us to do,” Amelunxen continues, “is provide a wide range of specialist tailings testing solutions, both on a laboratory and industrial scale.”

Generally, almost 99 percent of a metalliferous based ore that goes through a processing plant is an uneconomical waste material. “Every mine,” explains general

manager of Tailpro, Jon Engels, “is required by law to manage and store their tailings in an environmentally safe way and they tend to do this by storing them in earth-filled retaining dams. What the industry is particularly concerned with now is the consumption of water in mineral processing and with finding methods of reducing the amount that is sent to tailings storage facilities.”

“A major development within the business that has given Aminpro the ability to provide this complete service offering”

150 | special report

aminpro

Focused on supporting the the point where some mines existing work of Aminpro, are pumping ocean water or desalinated ocean water over Tailpro is looking into methods of recovering more 200 kilometres and up some water that can be sent back 3000 metres above sea level The year that Aminpro to the processing plant to be to their locations in order was established reused. By identifying such to fuel their processes. The sheer cost and complexity of methods the industry will such a process makes it all the not only be able to reduce levels of water consumption, but also reduce more important that they find ways of saving the threat of instability when it comes to the water. It is this urgency that is attracting the attention of people within the mining sector dams used to store waste materials.

“What you have to remember,” Amelunxen to the work we are doing here.” says, “is that most mines in Chile are located Another major project for Aminpro sees it within the high Andes where water levels are working in unison with other companies to already running low. In fact, it has gotten to develop new techniques for test work. “As ore

2000

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“While the industry continues to undergo dramatic changes, many of Aminpro’s core philosophies and practices remain the same” bodies throughout the world become more and more depleted,” Amelunxen highlights, “more tonnage is being treated and more tests are required to forecast production levels, and the test work required can prove expensive. What we are doing is coming up with methods of doing test work in a faster, more efficient and more cost effective manner. It is this work that we believe will result in huge changes in how ore bodies are

152 | special report

developed over the next decade.”

While the industry continues to undergo dramatic changes, many of Aminpro’s core philosophies and practices remain the same.

“Here at Aminpro,” Flores enthuses, “we are very proud of the responsible approach we take towards the community here in Chile.

Just one of the things we do is sponsor a technical high school where young people are taught the skills that will allow them to

aminpro

enter the industry after they finish school.

What we do is provide these individuals with on-site experience where they partner with our own technicians and more often than not this results in these youngsters coming back to work for us once their education is complete. This is one of the ways that we continue to develop what is, at the end of the day, our key asset and that is our people.”

As Aminpro’s operations in Chile flourish, it has begun to cast its eye towards areas where it can expand further as a business.

This has led to the creation of Aminpro Peru, a new company that is set to begin mobilising employees imminently into a market that it sees as possessing tremendous growth potential.

Looking further ahead, the company

also admits that it already has its eyes set on establishing itself elsewhere within Latin America, following a successful start-up of Aminpro Peru. As Amelunxen concludes, this incredible growth has not gone unnoticed. “We are increasingly being approached by companies inquiring as to whether we are for sale or not. The truth though is that with the amount of ideas we have, the expansion plans we have and the work we are doing with new technologies, we are just having far too much fun right now to seriously consider it.”

For more information about Aminpro visit: www.aminpro.cl | www.tailpro.com

special report | 153

The value of good service 154 | special report

enaex

For over 90 years Enaex has played a critical role in serving Latin America’s mining industry. General manager, Juan Andrés Errázuriz, discusses the growth of the company in recent years and how it continues to provide its customers with value-added solutions

written by: Will Daynes research by: Abi Abagun special report | 155

enaex

A

s a result of the boom in customers’ strategic partner. In order to do so mining, the South American we aim to contribute through the use of our nation of Chile today holds products and the skills of our people, putting a number of important titles. at our customers’ disposal a combination of These include being the innovative, experience and excellence that world’s largest producer of copper, 32 percent drives our on-site solutions.” of the world’s production to be exact, its only, As the global mining industry has and therefore leading, producer of natural skyrocketed, so too has Enaex’s international nitrates and its leading producer of iodine, presence. Today the company is present in rhenium and lithium. over 40 countries, from Argentina and Bolivia With Chile also being the third largest to Indonesia and Japan, in which it holds 35 producer of molybdenum and fifth largest percent of the market. “In 2011,” Errázuriz in terms of silver production, it goes continues, “we added Colombia to our without saying that mining is at the heart portfolio of existing markets, where we have of the country’s economy, contributing developed a new cartridge emulsions plant in partnership with Indumil. approximately 16.4 percent of its gross domestic product In 2012, we also began in the last six years alone. embracing the Brazilian market with the acquisition This figure means that the industry contributes the same of Britanite, together with as the gas, water, electricity, the Breca Group.”

Of the world’s copper industrial and agricultural Enaex’s long, distinguished is produced in Chile sectors put together. history has allowed the With nearly a century of company to build up an almost experience within the marketplace, Enaex unrivalled degree of experience and market is the planet’s third largest producer of understanding. “This level of understanding,” industrial-grade ammonium nitrate, and the Errázuriz says, “means that we have a detailed most important integral services provider knowledge of the social and environmental for rock fragmentation in Chile and Latin challenges that our customers face on a day-toAmerica, providing services to the main open day basis. This in turn means that we are able pit and underground mines that operate in to offer customised, innovative and flexible countries such as Chile, Peru and Argentina. solutions that address their individual needs Enaex is also recognised as having the largest and concerns. By doing so we are able to work productive industrial complex of industrial in close collaboration with our customers in grade ammonium nitrate, which boasts a order to improve their efficiency and generate nominal capacity of 800,000 tonnes per year. increased value for all parties.”

“At Enaex,” states general manager, Juan Ever since its inception, Enaex has prided Andrés Errázuriz, “we strive to act as our itself on its visionary approach. This pride

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remains firmly in place as the company strives to be one step ahead of changes within the industry and at the forefront of innovation.

“Just one of our many innovations,” Errázuriz enthuses, “is the Milodón, the largest mixer and triple truck in the world. Developed by our own skilled engineers, the Milodón’s unmatched ability to transport raw materials, its charging speed and its industry-leading safety features make it the premier choice when it comes to

conducting safe and efficient blasting.”

Elsewhere within the company, Enaex’s engineers have, for the past several decades, developed a number of solutions and methods of working to ensure the company maintains sustainable operations. These include ecoplants that reuse residual lube oils, which helps reduce the level of fuel consumption during the manufacturing of explosives by as much as 75 percent.

“Mining is at the heart of Chile’s economy, contributing approximately 16.4 percent of its gross domestic product in the last six years alone” special report | 159

“When you also factor in our air wave remote monitoring systems, powder emission controls and vibration control solutions,” Errázuriz explains, “it highlights just how we have also become leaders when it comes to environmental care.”

At present, Enaex is recognised by the United Nations in Chile as being the leading force behind its Certified Emissions Reduction

programme, and was recently announced as being the second most sustainable company in all of Chile by the Third Ranking of Climate Change Leaders, as conducted by Fundación Chile together with the Revista Capital local review board.

In the last year, the company has launched a new Company Development Cycle. Designed to strengthen and consolidate Enaex’s

“Enaex’s engineers have developed a number of solutions and methods of working to ensure the company maintains sustainable operations” 160 | special report

enaex

growth as a primary service to expand our Milodón provider to the mining sector, mixer truck fleet, which this launch will enable the will we believe will allow company to continue to our customers to reduce focus on delivering integral, the labour demands at their The number of countries mining operations. These value-added services to all of in which Enaex is present are the kind of value-added its customers.

“Our core objective,” products that we have a Errázuriz says, “has always long history of bringing to been to provide our customers with on-site the fore and will continue to do so as our solutions. As a way of continuing our customers’ needs and requirements change mission to meet that objective we are now in the years to come.” preparing to introduce a range of products to the marketplace including our Panfo For more information about product, which will allow our customers to Enaex visit: increase the level of accuracy on blast sites. www.enaex.com In addition to this launch we also intend

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BEST PRACTISE IN MINING

The jewel in

Barrick has a significant investment programme for So of which is targeted to advance the construction of Pas bi-national mine, expected to be operational in the sec

written by: Martin Ashcroft research by: Dan Finn

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Barrick South America

n the crown

outh America in 2013, much scua-Lama, the world’s first cond half of 2014

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Barrick Gold’s Veladero mine in San Juan province, Argentina

Barrick South America

W

ith the acquisition of Placer Dome in 2006, Barrick Gold Corporation became the largest gold mining company in the world.

Barrick’s holdings in South America include the Pierina and Lagunas Norte gold mines in Peru, the Veladero gold mine in Argentina, the Cerro Casale project in Chile, and the world class Pascua-Lama project on the Chile/Argentina border.

With a mine life estimated at 25 years, Pascua-Lama is the current jewel in the crown, but as the world’s first bi-national mine it has required a complex series of negotiations with two national governments. At an elevation of up to 5,200 meters, this is also the highest altitude project Barrick has ever tackled, and it raises many unique logistical challenges.

Nevertheless, it is destined to become one of the most important mines in Barrick’s global portfolio, with proven and probable reserves of 17.8 million ounces of gold, and an additional prize of 671 million ounces of silver. Construction has advanced steadily, with production expected to commence in the second half of 2014. At the end of November 2012 the tunnel to transport the ore between Argentina and Chile was approximately 60 percent complete, and 90 percent of the materials and equipment required for the process plant had already been committed.

During the first five years of production, Barrick expects an average of 800,000 and 850,000 ounces of gold per annum.

Another project in development is Cerro Casale, 130 kilometres north of the

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Engineering - Construction - Erection

Always working for a better future fabrications, tanks, electromechanical erections, piping, maintenance, industrial installations and turn key projects.

HAUG S.A. www.haug.com.pe Av. Argentina 2060, Callao – Peru t: (511) 6134545 comercial@haug.com.pe

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Barrick South America Pascua-Lama project in HAUG S.A. the Maricunga district of HAUG S.A. was contracted by Barrick Exploraciones Chile. This project holds Argentinas S.A. for the fabrication and erection works of 38 estimated gold reserves that field welded tanks and 14 thickeners for the Pascua Lama currently stand at a massive Project, an open pit mining project that straddles the border 23.2 million ounces, but of Chile and Argentina. HAUG’s offices for the project are exploration is still in progress located in the Province of San Juan on the Argentinean side, where they have over 400 highly specialized and there may be even more. employees and workers, a number that will double as the Cerro Casale was originally project advances. a 50/50 exploratory joint comercial@haug.com.pe venture between Barrick and Kinross Gold Corporation, but early in 2010, Barrick acquired an additional 25 percent interest from Kinross, increasing its interest in the project to 75 percent. The construction phase will last about three years and the life of the mine is estimated at approximately 20 years, with average annual production expected to reach one million ounces of gold and 110,000 tonnes of copper.

Now with a controlling interest, Barrick is keen to use the lessons learned in PascuaLama to good effect and where possible, leverage synergies in the design and construction of Cerro Casale. This is one of the largest undeveloped gold-copper deposits in the world and it is envisaged that it will one day exceed the production anticipated at Pascua-Lama.

Mine construction As well as these two stellar development

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957,000 Ounces of gold produced at Veladero in 2011

The Pascua-Lama project zone

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projects, Barrick can also count on a solid portfolio of mines already in production.

The Veladero mine, located in the San Juan Province of Argentina, is immediately south of the Pascua-Lama property in the highly prospective Frontera District. Veladero has two open pits, Filo Federico and Friendly and has an estimated life of 14 years. The mine has been in production since 2005 and in 2011 produced 957,000 ounces of gold at a total cash cost of $353 an ounce.

The proven and probable mineral reserves at 31 December, 2011 were 10.6 million ounces of gold.

Moving to Peru, Barrick has the Pierina mine, located in the Andean Cordillera in the Department of Ancash. This mine has proven and probable mineral reserves of 791,000 ounces of gold, and although it is relatively more expensive to produce than in other mines, rising gold prices have recently seen the mine’s life extended to the end of 2014.

This is a standard open-pit, truck-and-loader operation, similar to Veladero.

Also in Peru is the Lagunas Norte mine, located on the Alto Chicama property in north-central Peru and 175 kilometers north of Pierina. The property lies on the western flank of the Peruvian Andes at an elevation

Barrick South America

Zaldivar copper process facility

of 4,200 meters above sea level. The open pit mine began operations in the second quarter of 2005, ahead of schedule, and involved an investment in construction of $340 million.

In 2011, Lagunas Norte produced 763,000 ounces of gold at an attractive total cash cost of $269 per ounce, and had proven and probable reserves of 6.2 million ounces of gold at 31 December 2011.

In all its operations in South America, Barrick is guided by a vision to lead the industry in finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner.

The company wants to see the region’s natural resources play a key role in supporting longterm sustainable economic development and facilitating this process is a corporate priority.

Barrick is already a signatory to a number of voluntary codes and initiatives that address a range of economic, social and environmental issues. These include the Carbon Disclosure Project, the International Cyanide Management Code, Transparency International (Canada) and the Voluntary Principles on Security and Human Rights. The company has also been an active member of the UN Global Compact (UNGC) since 2005.

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Barrick’s primary focus is on gold

Barrick South America

25 years Estimated life of Pascua-Lama mine This is an initiative which directly involves business in tackling some of the major social and environmental challenges that arise from globalization.

Barrick’s achievements were publicly acknowledged yet again in 2012 when it was ranked as a global leader in corporate social responsibility for the fifth consecutive year by the Dow Jones Sustainability World Index. The DJSI World Index independently evaluates 2,500 companies using rigorous criteria in the areas of corporate, economic, environmental, and social performance to identify the top 10 per cent of performers.

Although its primary focus is on gold, Barrick also has significant interests in copper in South America. The Atacama desert has some of the largest porphyry copper deposits ever found, a geological legacy that has made Chile and Peru the first and second largest exporters of copper in the world.

In 2011, Barrick’s Zaldívar copper mine in Chile produced 292 million pounds of copper at a total cash cost of $1.50 per pound. The proven and probable mineral reserves at 31 December 2011 were 6.6 billion pounds.

For more information about Barrick South America visit: www.barricksudamerica.com

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Simply ore-ins

A monumental project, possessing over seven billion metri tonnes of iron ore reserves, the Carajås Iron Ore Mine is one of South America’s most exciting ongoing developmen

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Vale Brazil: Carajรกs Iron Ore Mine

spiring

written by: Will Daynes research by: Abi Abagun

ic

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Iron ore dry beneficiation plant, a new technology developed by Vale

Vale Brazil: Carajás Iron Ore Mine

T

he most widely used of all minerals, iron accounts for approximately 95 percent of the world’s metal production in terms of weight. As the world’s third largest iron ore producer and exporter, Brazil has long reaped the financial benefits provided by one of its largest export products.

The Carajás region of the country boasts some of the richest reserves and concentrations of iron ore anywhere on the planet, with the Carajás Mine, located in the state of Pará in Northern Brazil, holding the distinction of being the world’s largest iron ore mine.

Fully owned by Vale, the mine holds up to 7.2 billion metric tonnes of iron ore in proven and probable reserves.

The Carajás Mineral Province was originally discovered entirely by accident when a US Steel helicopter was forced to land on a hill in the area to refuel in 1967, with the first iron ore mine called N4E Mine coming into operation in 1985. In the mine’s first year output reached one million metric tonnes of iron ore, which was processed at a semiindustrial plant. During the second year an industrial-scale processing plant was brought online and this resulted in production rising to 13.5 million metric tonnes of final product.

Mining operations in Carajás are open-pit, with 15-meter-high benches. The off-highway trucks that Vale uses, each capable of carrying loads of over 240 metric tonnes, unload ore at crushing facilities located inside the mines.

After this, the material is transported on conveyor belts for further processing.

At this stage, the ore is crushed once more and classified using screens, cyclones

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Vale Brazil: Carajás Iron Ore Mine

Operational Control Center in Carajás

and spiral classifiers. The end result is have come under environmental scrutiny. three classes of products, these being Operations at the Carajás iron mines conform sinter feed, pellet feed and lump ore. Now to an environmental quality management spanning five simultaneous open-pit mine system that has been implemented, and operations, the Carajás Mining Complex is certified, to ISO 9000 and ISO 14001 standards and procedures. produces approximately Vale’s activities in Carajás 300,000 metric tonnes of include an extensive iron ore per day and was programme to restore responsible for producing vegetation on former mining a record 109.8 million sites using species that are metric tonnes in 2011, an native to Carajás National increase of 8.5 percent on the year before.

Forest. Meanwhile, the With its mines located company also maintains Metric tonnes of proven a well-structured inside the 400,000 hectare and probable reserves Carajás National Forest, Vale’s environmental monitoring inside the mine operations understandably network that systematically

7.2

Billion

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evaluates aspects such as air quality, noise pollution, vibrations and water quality.

In partnership with the Chico Mendes Institute for Biodiversity Conservation (ICMBio), Vale contributes to managing

Carajás National Forest and the development of research, thereby expanding overall knowledge of the region’s biodiversity.

Just as importantly, this partnership also enables work to occur that monitors and

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Vale Brazil: Carajás Iron Ore Mine

Iron ore beneficiation plant

fights forest fires.

Vale is also proud to be in partnership with not only ICMBio, but Brazil’s environment regulator, Ibama, as well in their work to help conserve an area of forest that spans around 1.2 million hectares, three times the size of the Carajás National Forest and ten times the size of the state capital of Pará.

One of the more recent developments involving the mine is the Carajás S11D iron project. The project represents an expansion in iron ore mining and processing at the Carajás Mining Complex. Continuously,

since it first began operations back in 1985, the complex has produced the best quality iron ore in the world, which has been supplied to both the domestic and international markets. Similarly during that time Vale’s presence in the municipalities of Parauapebas and Canaã dos Carajás in southeast Pará has underpinned a strong cycle of economic and social development in Brazil’s North region.

The Carajás S11D iron project has a key role to play in a new cycle of sustainable development in the states of Pará and

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Off road truck with 400 tons of loading capacity

Vale Brazil: Carajás Iron Ore Mine Maranhão, and in the continuation of Brazil’s position as a major player in the global iron ore market. S11D will ultimately produce 90 million metric tonnes of iron ore per year, meaning that upon reaching full capacity, Vale’s total ore production in Pará will have reached approximately 230 million metric tonnes per year.

This ore will help meet the growing global demand for iron that is being generated by rising investment in construction and in the production of machinery, equipment, aircraft, mobile phones and other essential everyday products that are central to our way of life.

Together with the other projects that are planned to come on-stream in the region, the new mine will help place southeast Pará on the same level as the iron quadrangle region in the state of Minas Gerais.

As Vale looks to the future of its Carajás iron ore mine activities, it is abundantly clear that the S11D project is at the heart of its plans and ambitions. The S11D project, named after its location, ore body S11, block D, is easily one of the most exciting developments occurring anywhere in South America. The mining potential of ore body S11 equates to ten billion metric tonnes of iron ore, while block D alone contains 2.78 billion metric tonnes of reserves that will be mined by Vale. It is believed that this project alone will enable Vale to maintain its leading position in the global iron ore market for many years to come.

For more information about Vale Brazil: Carajás Iron Ore Mine visit: www.vale.com

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Expand

co

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Southern Copper Corporation

ding horizons

RaĂşl Jacob, CFO of Peruvian operations and company omptroller, highlights the massive expansion programmes the company is undertaking, both in Peru and in Mexico

written by: Will Daynes research by: Abi Abagun

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Southern Copper has the highest reserve base for copper of any listed company in the world

Southern Copper Corporation

C

ommercial metal mining has been a business closely associated with Central America dating back to the region’s colonisation by the Spanish.

A fixture of the region’s export market throughout the decades since, the industry has experienced various peaks and troughs in recent years. In the face of waning interest in Central American metal ores during the 1980s and 1990s, it was the World Bank and other international financial institutions that encouraged governments to revise their laws to make metal mining more profitable.

This collective approach has created an environment where today a host of metal mining operators are active in countries throughout the region. One such organisation is Southern Copper Corporation (SCC), a world class mining metallurgical company.

Incorporated in 1952, the company has the highest reserve base for copper of any other listed company in the world.

“At the current production rate these reserves,” explains Raúl Jacob, CFO of Peruvian operations, “equate to around 100 years of life for the operation and are derived from the company’s operations in Peru and Mexico, where all of its activities are fully integrated.” Copper itself, of which it currently produces 640,000 metric tonnes per year, represents approximately 75 percent of SCC’s total sales. In addition, its mines produce various quantities of molybdenum, zinc and silver.

As one of the lowest cost producers in the world, operating in two very mining friendly countries and boasting excellent reserve rates,

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SOUTHERN COPPER Southern Copper Corporation Southern feature est laborum. Lorem ipsum SCC finds Copper itself focusing dolor sit amet, consectetur text toongoachieving here.....Lorem heavily organic adipisicing elit, sed do ipsum One dolorof the sit ways amet, growth. it consectetur eiusmod tempor incididunt is doing this is adipisicing through the elit, sed do of eiusmod tempor ut labore et dolore magna expanding its Toquepala aliqua. Ut enim ad minim incididunt ut labore et dolore mine in southern Peru. veniam, quis nostrud magna aliqua. Ut enim ad In operation since 1960, exercitation ulla mco minim veniam, quis the mine operated as nostrud initially laboris nisi ut aliquip ex exercitation ullamco designed until 2003,laboris when ea commodoPlant consequat. nisi ut aliquip ex of ea commodo an expansion its plant expansion Duis aute irure dolor in consequat.production Duis aute by irure increased 33 dolor in“At reprehenderit in This is a caption is a caption percent. present, Toquepala possesses a this achieved by notreprehenderit only opening in up voluptate the mine velitgreater esse levels cillum dolore voluptate velit esse cillum total copper production capacity of 160,000 in order to handle of mineral fugiat nulla pariatur.

Excepteur sint dolore euJacob fugiat nulla pariatur.

Excepteur tonnes,” continues, “and the purpose eu production, but also by doubling the capacity cupidatat non proident, circuit.” sunt in sintthis occaecat non proident, sunt of browncupidatat field expansion project is occaecat of the Toquepala plant’s concentrator qui officia deserunt mollit anim id in culpa qui this officia deserunt mollit id culpa Working to a planned schedule that would to increase substantially.

This anim will be

BREAKER TECHNOLOGY INC. Technology is our middle name Breaker Technology Inc. and our authorized dealer for Peru Cana Dyne S.A. are committed to building and supporting some of the best rock breaking systems in the world. Having already successfully deployed several stationary rock-breaker boom systems at Southern Peru sites since 1998, we have new systems to be commissioned in the near future, and are proud to a play a part in the ongoing success of Peruvian mining, and more specifically Southern Copper.

Whether the application is an above ground stationary rock breaker boom system over a gyratory crusher, dealing with oversize materials or underground, our goal remains the same, ensuring increased production and

safer working conditions. Beyond our excellent range of rock-breaker boom systems are our full fleet of underground mining support vehicles. BTI’s mobile range includes mobile rock breakers, shotcrete truck, ANFO loaders, scissor lifts, crane trucks and most notably mobile rock scalers.

Cana Dyne and BTI have pioneered the use of mechanized scaling in Peru, with its signature RMS18 scaler system, which has one of the largest degrees of scaling flexibility, reduced repositioning time and increased production output. It’s our passion to continue to advance both service and innovation because we realize that results both in output and safety matter to us and our customers. www.rockbreaker.com

NOVEMBER 2012| 189 |2 Be americas

Show the world what your company has to offer with our tailored packages

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Southern Copper Corporation see the project completed by the middle of 2014, SCC’s OSSA is a leading specialist company in the underground expansion of Toquepala construction sector specialized in three business segments: represents a considerable construction, energy and mining. investment for the company.

After 60 years of success, our strategy is to continue “Recent figures suggest that expanding internationally, and to support large civil the company is spending engineering and mining industry clients at all levels, contributing our vast technical expertise and our equipment some $10,000 per tonne of fleet, while prioritizing health and safety and innovation in additional installed capacity,” all our projects. The best example is our track record: more Jacob says. “The end result of than 600 km of tunnels, 75 km of shafts and 500,000 m3 this investment will be the of caverns in hydropower plants.

Toquepala mine producing Internationally, OSSA has executed works in Portugal, an additional 100,000 tonnes Greece, Jordan, Peru, Colombia, Panama, Costa Rica, of copper, bringing its total Nicaragua, Chile, Hong Kong, and Taiwan. www.ossaint.com annual production capacity to 260,000 tonnes.”

Worldwide, SCC spends close to $30 million on exploration projects each year. The rewards that stem from this approach can be seen not only in Peru, but in Mexico as well.

“At the same time as it expands its Toquepala mine,” Jacob states, “it is also increasing the capacity of its Buenavista operation. Currently delivering 180,000 tonnes of copper per year, it is the company’s mission to increase this to more than 480,000 tonnes.”

In order to achieve this not inconsiderable goal, SCC is expanding its two existing SX-EW plants and constructing a third plant

OSSA

$6 Billion Six-year investment to increase output to over 1.1 million tonnes Mineral production continues to expand

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at Buenavista that will have a capacity of 120,000 tonnes per year alone and will be operational by the start of 2014. Further to this, the company plans to upgrade its concentrator capabilities by building a new facility that will increase capacity from 125,000 tonnes to 313,000 tonnes of copper per year. This second project is expected to be completed by the middle of 2015, thus bringing Buenavista to a point where it can reach its full potential.

The integrated nature of its operations is not the only thing that links SCC’s operations in Peru and Mexico. One of the most important values held throughout the organisation is its commitment to sustainable development.

“In everything it does,” Jacob enthuses, “SCC’s activities are carried out with the aim of having the least possible effect on the environment. With the Toquepala project, for example, the company is increasing copper production by 100,000 tonnes, yet it is not using any additional water supplies to do so.

Rather it is increasing the amount of recycled water it uses for that purpose.”

Across all of its locations the company has been actively replacing its raised haulage activities with conveyor belt transportation systems, while its SX-EW plants operate without emissions. In 2007, SCC undertook a comprehensive programme to modernise

its smelting operations in Peru. This came in the wake of the country’s government introducing new environmental guidelines.

As a result of its actions, the company is now able to capture over 95 percent of the gases emitted during the smelting process.

Another recent environmental milestone has been the introduction of a pipeline system used to transfer sulphuric acid produced by the company’s plants directly to cargo ships

“The company is increasing copper production by 100,000 tonnes, yet it is not using any additional water supplies to do so” 192 | Be americas

Southern Copper Corporation

Copper cathodes

that then export this product. over 1.1 million tonnes over “Previously, railroad haulage the course of the next six was used to transport the acid, years. “To do this,” Jacob almost one million tonnes of concludes, “SCC is spending in excess of $6 billion. it per year, through a nearby In the meantime, it will residential area,” Jacob says. endeavour to maintain the “While the process itself was Estimated life of characteristics and qualities safe, the company deemed it copper reserves a better idea to have a pipe that have brought it to where network that would run it is today. This will allow from its smelters to the cargo it to expand its operations, ships. This methodology has not only proven retain its strong operating costs and ensure more cost effective and less time consuming safer environmental results.” in the long run, it also eliminates all of the associated environmental risks.”

For more information about Under its current production plans, SCC’s Southern Copper Corporation visit: focus is to increase its copper output from www.southernperu.com an estimated level of 640,000 tonnes to

100

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written by: Will Daynes research by: Stephen Vivian

Blending knowledge with passion For the better part of three decades Inorganic Ventures has been a leading manufacturer of certified reference materials and is now targeting the lucrative mining sector

194 | Be americas

Inorganic Ventures

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QC chemist Heather Fisher-Clarke prepares a sample for the ICP

Inorganic Ventures

R

egardless of the size of the operation or where on the planet it is taking place, one of the most fundamentally important, but often overlooked, phases of the mining process is the testing of materials that are extracted from the earth. It may sound like one of the least important undertakings companies have to face, what with the massive costs and labour intensive nature of processes such as exploration and production, yet it is only after accurate tests have come back with positive results that these phases of the project can commence.

Headquartered in Christiansburg, Virginia, Inorganic Ventures has, since 1985, been manufacturing high quality certified reference materials. It is capable of making almost any reference material for inductively coupled plasma (ICP), inductively coupled plasma mass spectrometry (ICP-MS), ion chromatography (IC), atomic absorption, wet chemistry and quality control applications.

The company’s distribution network, operated from its foreign distribution centre in Madrid, covers North America, Europe, Asia, South America and Africa.

The first inorganic certified reference materials manufacturer to be accredited to ISO Guide 34 and to offer a 100 percent satisfaction guarantee, it is quality and customer service that defines Inorganic Ventures. “Our speed of delivery and turnaround times,” explains executive vice president, Michael Scott, “are second to none and really help differentiate ourselves from others in the industry.”

With stock items leaving the same day as ordered and custom blends taking no more

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than five days to manufacture, the company is able to guarantee these turnaround times anywhere in the world. “As a business,” states vice president of operations, Christopher Gaines, “we focus on doing one thing and we believe very firmly on doing it the best.”

Rather than being a catalogue house, what Inorganic Ventures does is manufacture one product and that is inorganic certified reference materials for certain instrumentations. In complementing this it places a great deal of time and resources into delivering technical support and educating clients on how to do a better job of analysing their test results through various books and articles.

“A lot of companies in this field handle both organic and inorganic materials,” Scott continues, “but I personally don’t know of anyone else on the market that concentrates solely on inorganic reference materials the way we do. We live, eat and breathe this business and it is that degree of focus that makes us truly unique.”

It is this dedication that today sees Inorganic Ventures turning increasingly towards international expansion. “While there is certainly still room for growth in the US market,” Scott states, “it is on the international stage where we are identifying enormous potential through the activities

of our distributors who are present in more than 50 countries.”

Where the company identifies much of the growth coming from in the future is from the mining sector, particularly in regions such as South America, South Africa and parts of Europe. “Our largest customer account to date,” Scott says, “is with a large multinational mining company, and it is these kinds of

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Inorganic Ventures

Group discussion on a custom CRM quotation

clients that we are looking to importance to the business target going forward.” achieving its long term In order to achieve its goals, Scott is just as keen growth targets the company to emphasise that this is a has taken, and continues to company that understands take, proactive steps to better that it has to go if it wants Countries in which the company has position itself to capitalise to grow. “The way we will distributors present on the vast number of grow the business in the opportunities it has identified short-to-medium term is by throughout the world. “In travelling, by introducing the last few months,” Scott says, “we have Inorganic Ventures to people all over successfully finished doubling the capacity the world and by building long-lasting of our US facility. Meanwhile, we are in the relationships with customers. Any good process of moving our European distribution business can display product quality and centre from Madrid to Santander on the good delivery capabilities, but it is strong, border of France.” mutually beneficial relationships that every While such developments are of critical client cherishes and this is what we build.”

50

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Technical support chemist Thomas Kozikowski reviews ICP data

Manufacturing chemist Briana

“While there is room for growth in the US market, it is on the international stage where we are identifying enormous potential” Travelling to those regions and territories where the company has seen the potential to grow will be fundamental to Inorganic Ventures’ ability to identify distributors that can assist in the company gaining a foothold within the marketplace. “We are a member of the Economic Development Process here in the US,” Scott reveals, “and it is through some of the international visits organised through this that we have been able to reach out to

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the right kind of people. Then what we find is that once these people have our product in their hands they recognise just what it is that we have and what we can offer.”

By emphasising things like the building of relationships and by providing high quality technical support it is clear that the way Inorganic Ventures does business is about more than just the end result. It is equally about doing the little things that seem to have

Inorganic Ventures

M. Hudson mixes a custom CRM

Michael Scott (far) and Christopher Gaines review quarterly figures

gotten lost or been forgotten about over the past 20 to 30 years.

Up until now there has been little evidence to suggest that there has been a concerted effort from companies within this highly technical, niche industry to broaden their scope outside of what is admittedly a healthy home market. “There are locations out there,” Scott says, “in South America for example, which people assume are a decade behind in terms of technology and innovation. In truth, that is perhaps how we felt until we began travelling and exploring these places, whereas now we know first-hand that these parts of the world are a lot further along than some give them credit for.”

With the knowledge that there are opportunities outside of its home market

waiting to be grasped, Inorganic Ventures is now in the process of aggressively targeting potential distributors and clients, both near and far. The company is equally aware that with its soon to be relocated European facility it is perhaps better placed than any other business of its type. “Having a facility outside of the US doesn’t sound like that big of a deal,” Scott concludes, “but what it does is allow us to be just as competitive as any local or multinational manufacturer and to bring our knowledge, expertise and dedication to customer service to a worldwide audience.”

For more information about Inorganic Ventures visit: www.inorganicventures.com

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A source of inspiration

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Bentley Systems

From buildings and bridges to clean energy and clean water, Bentley Systems has been sustaining some of the world’s most significant infrastructure projects for close to 30 years

written by: Will Daynes research by: Will Kirby

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Bentley Systems

W

Finsch mine project, courtesy of Petra Diamonds Limited, Lime Acres, South Africa

hen we think of infrastructure we tend to think about the hardware involved, be it the materials used or the equipment and tools to bring structures and buildings to life. What we tend to take for granted are the software solutions involved and how crucial they are to the entire process.

A global leader in its field, Bentley is dedicated to providing architects, engineers, constructors, geospatial professionals and owner-operators with comprehensive solutions for sustaining infrastructure.

Founded in 1984, the company has grown to the point where it now employs almost 3000 people in more than 45 countries.

At its core, Bentley’s mission is to give its clients the ability to leverage information modelling through integrated projects for high-performing intelligent infrastructure.

Since 2003, the company has invested more than $1 billion in research, development and acquisitions in order to grow both organically and through successful takeovers.

The solutions offered by the company encompass its MicroStation platform for infrastructure design and modelling, its ProjectWise platform for infrastructure project team collaboration and work sharing, and its AssetWise platform for infrastructure asset operations. These platforms support a broad portfolio of interoperable applications and are complemented by global professional services.

Bentley’s expertise and capabilities have seen it extend its reach into all manner of industry sectors, from power generation and

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rail to utilities and communications. One area of particular significance is the mining and metals industry. It is here that the company has been striving to deliver solutions that will allow its clients to meet the unprecedented level of demand for raw materials from both the manufacturing and construction sectors.

Driven by the high commodity prices that have occurred as a result of this demand, the

industry’s priority, at least in the short-term, is to obtain the necessary capacity required to bring as much raw material to market as quickly as possible. While it is doing so the company also incorporates the longer term view of overall sustainability of the industry and the environment as the resources get extracted and assets need decommissioning.

Bentley’s mining and metals solution is

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Bentley Systems

Vale Cristalino Project, courtesy of SEI Engenharia Ltda, Canaa dos Carajas, Brazil

compelling in that it offers both short and long-term benefits to help increase the efficiency of capital projects associated with the design, procurement and construction of mines and processing plants, as well as solutions for supporting the operations and maintenance of the built assets, and their subsequent decommissioning.

Addressing both the areas of mining and transportation, and ore processing and refining, what Bentley has found is key to bringing value is a combination of consistent, accurate and available engineering data across the lifecycle, coupled with the most comprehensive set of interoperable design and analysis tools. With these at a users’ disposal they have a far greater chance of

their assets reaching optimum potential.

Bentley’s mining and metals products expand across a wide spectrum of disciplines, from plant design, engineering and operation, land development to geospatial information management, water modelling and structural analysis. A major supplier to both owner organisations and EPC companies that serve this industry, Bentley can boast having ten of the top 20 mining companies, as measured by market capitalisation, as customers, including all of the top five.

Bentley’s success across the mining and metals sector over the last several years has been well documented through the innovative uses of its products by its users submitting to the Be Inspired Awards programme.

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Recognising the world’s most outstanding infrastructure projects, submissions are judged by a jury of independent experts who determine which examples best exemplify innovation, superior vision and a commitment to quality and productivity.

In the category of Mining and Metals, projects in Australia included, in 2011, the $630 million crushing plant at Fortescue in Western Australia where modeling in

3D resulted in 30 percent time savings and overall cost savings of 20 percent. In 2012, AMEC fast-tracked project delivery at FMG’s Cloudbreak ore-handling plant in Western Australia with rapid deployment of MicroStation, Structural Modeler, and Bentley PlantSpace to reduce steelwork drafting time by 31 percent. In 2009, the award went to the Hatch Africa, QMM Ilmenite Project in Fort Dauphin, Madagascar. The primary goal

“Bentley users have achieved both short and long-term benefits that improve the performance of engineering and construction capital projects”

Vale Cristalino Project, courtesy of SEI Engenharia Ltda, Canaa dos Carajas, Brazil

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Bentley Systems

Finsch mine project, courtesy of Petra Diamonds Limited, Lime Acres, South Africa

of this project involved the Project in Canaa dos Carajas, development of a productive Brazil. The goal of this ilmenite mine consisting of project is to build a $2.6 billion copper plant that will a mining extraction pond, produce 16 million tonnes per dredger, wet plant and a Invested in research, mineral separation plant. annum with average annual development and In order to improve production of 340,000 tonnes acquisitions since 2003 workflows and reduce costs, of copper concentrate. As Hatch deployed 3D plant part of this undertaking, Vale design using MicroStation as the CAD platform contracted SEI Engenharia to perform frontand software including Bentley Structural, end loading and deliver a 3D model.

TriForma, PlantSpace and Bentley Navigator.

This 3D model was used to advance the The 3D models used reduced the number of concept studies during the detailed design 2D drawing deliverables and streamlined the phase, which helped achieve the goal of steel fabrication and construction processes. accelerating project execution. In order to This enabled the steel fabrication contract to do this, SEI trained its design team to use be placed earlier than anticipated, improving Bentley software such as MicroStation, Bentley the critical path of the construction schedule. Architecture and Bentley Navigator to carry The winning project in 2011 was from SEI out the modelling of infrastructure, concrete Engenharia, working on Vale’s Cristalino and steel structures, substations and industrial

$1 Billion

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QMM Ilmenite Mine, Fort Dauphin, Madagascar, courtesy of Hatch Africa

Bentley Systems installations. Ultimately, the integrated workflow that Bentley’s solutions helped create saved approximately 5100 man hours and reduced front-end loading costs by $400,000.

In 2012, Petra Diamonds Limited, Finsch GIS, in Lime Acres, South Africa won the Be Inspired Award for Mining and Metals.

Located in the Northern Cape province of South Africa, the Finsch mine is operated by majority owner Petra Diamonds, which developed a 700,000 South African rand integrated spatial data management system to manage geospatial data for five departments that were functioning in isolation. The company also co-manages the mining town of Lime Acres, for which the GIS-based system captures data and bills residents for water and electricity usage. Survey and plan data are captured and digitized in MicroStation, with Bentley Map links features representing the mining lifecycle, town layout, and residential setup, and Bentley Geo Web Publisher makes the geospatial mining and town information accessible to the whole mining group.

Engineering professionals strive to shorten project schedules and lower operating costs through improved access to mission-critical information. Bentley users have achieved both short-term and long-term benefits that not only improve the performance of engineering and construction capital projects, but also increase the efficiency of operations for mines and metals processing and refining plants.

For more information about Bentley Systems visit: www.bentley.com

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Power st

This is a difficult time for the States. Janet Gellici, CEO of talks about finding a way

written by: Ma research by: Ric

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American Coal Council

truggles

e coal industry in the United f the American Coal Council, y to overcome the challenges

artin Ashcroft chard Halfhide

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T

he coal industry provides over 40 percent of the United States’ electricity, but it seems to be under attack from all quarters.

Just because you’re paranoid, the saying goes, it doesn’t mean they’re not out to get you.

“It is challenging,” says Janet Gellici, CEO of the American Coal Council, with some understatement. “I’ve been in the business for thirty years. It’s been more challenging recently than I’ve known it before, but these things ebb and flow. We’re running into some headwind, but we’ll find a way or we’ll make one – I think Hannibal said that about driving his elephants across the Pyrenees.” He got there, remember.

The American Coal Council is an industry body with a broad remit. “We represent companies from the hole in the ground to the plug in the wall,” says Gellici. While The National Mining Association is focused exclusively on coal and mineral suppliers, the American Coal Council is also concerned with power generation and industrial users of coal, railroads, ports, barge transporters and energy traders. “We have about 180 member companies so we represent a significant portion of the US coal industry,” she says.

The power generation market is currently a major concern, with coal under severe pressure from all sides. “There are a number of factors impacting where we are today with coal fired power generation,” says Gellici. “Top of my list would be the transition away from coal to natural gas. This is partly propelled by policy, but also because natural gas is so abundant and cheap.”

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American Coal Council

The United States has about five to ten gigawatts of new coal generation coming online between now and 2014, but it’s going to lose between 30-80 gigawatts of coal fired power by 2030 as older plants are shuttered— mostly due to replacement by natural gas but also to some extent by renewables.

The Obama administration is keen to encourage the transition to natural gas, which it does through subsidies, tariffs, tax exemptions and other financial measures. It is up to the individual states, however, to set their own policy and regulations concerning energy generation, and most states have set mandatory renewable energy targets in the form of a “renewable portfolio standard” (RPS) or “alternative energy portfolio standard” (AEPS) which require a certain percentage of a utility’s power plant capacity or generation to come from renewable or alternative energy sources by a given date. Colorado is the highest at 30 percent. “They vary from state to state,” says Gellici. “Some of the states count hydro, too, and some count energy efficiency or conservation measures into that percentage.”

Natural gas and renewables are a threat to coal simply by being alternatives, but you would expect an industry like coal to be able to respond to competition, given a level playing field. The field is skewed in this case, however, by the campaigns being mounted by environmental groups, targeted specifically at coal. You might think that restrictions on the use of coal in the United States would open the door to exports, bringing many benefits to an economy with high unemployment that is struggling for growth, but it’s nowhere near as straightforward as that.

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American Coal Council

Coal-fired steam plant near Page, Arizona

“There are significant export opportunities for coal,” says Gellici, “especially out of the West, but we’re running into opposition there from the environmental community. There are one and a half billion people in the world without access to electricity and here we sit on the world’s largest coal reserves, but we can’t sell it to them.” The environmental groups are opposed to coal being burned anywhere in the world, she explains, not just in the United States, so they are trying to curtail the development of ports, particularly on the west coast, so that coal can’t be shipped out for export. Legislation has been proposed in

California, for example, which would mean that coal could not be exported to countries that don’t have equally stringent regulations on greenhouse gas emissions.

“There are a number of barriers being thrown up in opposition to export,” continues Gellici. “People are objecting to the number of trains used to transport coal in their communities, they are trying to stop coal trains coming through, and allowing only cargo trains. They’re all focusing on coal.”

The coal industry has made tremendous progress in emission reductions in recent years, but gets no credit for it whatsoever.

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“We’ve decreased our emissions of NOx, SO2 and mercury significantly, at the same time as the use of coal has been increasing,” says Gellici. “Billions of dollars have been spent in the development of clean coal technology, but we’re not even being permitted to build new cleaner coal facilities.”

The great hope for the future of the coal industry is carbon capture and storage technology (CCS), but although much progress has been made, it’s not commercially available yet. That does not inhibit the Environmental Protection Agency from introducing requirements for new power plants that cannot possibly be met without it, however.

“Everyone I speak to says that eliminating coal is not going to get us where we need to be in

Power plant on Lake Michigan

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terms of greenhouse gas emissions, so we need that carbon capture and storage technology to be perfected,” says Gellici, “but it’s not ready yet, and the regulations are written in such a way that it will be impossible for any utility company to consider building a coal power plant at this point. So after 2014-2015 there will be no new coal power plants being built.”

It makes you wonder, as Butch Cassidy and the Sundance Kid did while being tracked, who are these guys? Whoever they are, they are certainly in pursuit of coal. “There’s one regulation that illustrates this well,” says Gellici, “the Stream Buffer Zone Rule, which bans mountaintop mining. The EPA came out with some water quality guidelines which were specifically applied to six Appalachian States in

American Coal Council

“Every time a piece of legislation gets passed in the House, it pretty much dies in the Senate” the US, and only to coal mining.” Mountaintop removal may offend the green lobbies in San Francisco, New York and Washington, but it’s an integral part of the economy in West Virginia, Kentucky and the Carolinas.

The recent US elections have not done the coal industry any favors, either.

Although a Republican dominated House of Representatives has proposals that would

benefit the coal industry, says Gellici, “every time a piece of legislation gets passed in the House, it pretty much dies in the Senate, which will be Democratically controlled again for the next session of Congress.”

The legislative process is gridlocked by court actions anyway, as Gellici explains. “We will not have any new legislation on energy and environmental policy issues,” she says. “What we will have are court cases.” When regulations are proposed by the administration, the EPA, the Department of the Interior, et al, they are immediately challenged in the courts. “That means that the courts will be the deciding factor,” she says. “They will be dictating policy for the next two to four years.”

This deadlock means that new environmental safeguards cannot be put in place. “There are New Source Review (NSR) regulations in the US that preclude us from making changes or improvements to existing power plants,” says Gellici, “so companies are not willing to upgrade their turbines or improve their boiler performance, in case they are hit by lawsuits.

“Another thing that is really objectionable to us as an industry,” she continues, “is that we’re starting to see very incremental benefits with these regulations. Balancing the costs of the regulations with the economic value we’re receiving from them has become very lopsided.

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Coal power station

American Coal Council The Mercury Air Standard Toxic Rule (MATS), for instance, is currently in the courts. EPA is projecting that it will cost something from $10 to $11 billion for our industry to comply with this regulation, but the health benefits are less than one percent.”

Despite all the obstacles, Gellici still believes in the ebb and flow principle. “As power costs rise I would expect there to be some push back from citizens,” she says, and of course, it’s votes that count.

The communications industry is already voting with its feet, as it were. “We’re seeing hugely increasing power demand from companies like Google, Facebook and Apple,” says Gellici. “Greenpeace brought out a study earlier this year that said if the cloud were a country it would be fifth largest electricity user in the world.” It’s a trend that’s likely to continue for the foreseeable future as more people download audio and video files, and companies use the cloud for data storage. “As these companies rely on a secure source of power, they’re locating their power facilities in places where there is cheap and reliable coal and nuclear power available. They’re not depending on wind or solar.”

The coal industry may have to endure another four years of siege, but if carbon capture and storage technology continues to be advanced and supported by government and industry, we may see the pendulum swing back the other way.

For more information about American Coal Council visit: www.americancoalcouncil.org

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C.C. JENSEN

Cleaning up the competition Account Manager, Caren Caffrey, discusses how, having made its name in several industry sectors over the last 60 years, C.C. JENSEN is attracting GREATER attention from mining companies throughout the world

written by: Will Daynes research by: Gareth Hardy

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C.C. JENSEN

T

MFU, also in cold climates, Canada

hey say that in order to get a job done well you have to get your hands dirty from time to time, and a truer statement was perhaps never spoken than when it comes to the mining industry. The sheer scale of the equipment used and the nature of the environments that are being operated in make mining a highly maintenance intensive undertaking. This inevitably results in a large concentration of dirt being produced. With this dirt having the ability to contaminate virtually everything in the surrounding area, it is clear that it takes more than a bit of soap and elbow grease to remedy the problem.

A family-owned, international business established in 1953, C. C. JENSEN has been manufacturing lubrication oil filters for marine engines for 60 years. In the time since, it has refined off-line depth filtration for a wide range of applications in the wind, power, industrial and mining sectors. Today, its CJC™ Fine Filters and CJC™ Filter Inserts are available through a worldwide network of sales consultants and service professionals.

Mine and quarry customers today use CJC™ Fine Filters to maintain clean oil in drilling equipment, crushers, haul and dump trucks, excavators, conveyor belts, bulk storage tanks and other miscellaneous equipment. “To date,” explains Account Manager, Caren Caffrey, “we have been active in the mining sector in Mexico, Chile, South Africa and Australia. Meanwhile, we are strengthening our market position in the US and Canada as never before.”

What C. C. Jensen has introduced to the industry, and what has already brought it

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success in the aforementioned markets, is the ability to provide Clean Oil. “The filter media that we use,” Caffrey continues, “is very unique in that it possesses a large surface area in comparison to other filter media. This allows the system to capture a greater amount of dirt, particulates, water and varnish from the oil in question. Incorporating the CJC™ Fine Filters allows the customer to reduce oil consumption and equipment downtime, which naturally increases operation productivity.”

Over the last decade or so, significant changes have occurred within the mining sector as it relates to oil cleanliness. Driven by the likes of Caterpillar and other equipment manufactures that have established minimum standards of oil cleanliness for their products, large mines are now beginning to set their own minimum oil cleanliness standards across their organisations. What they often find however, is that the filtration systems they have in place do not meet the new standards.

“Those companies that have tried our products love them,” Caffrey enthuses, “mostly because they help the company meet or exceed today’s standards of oil cleanliness.

Our products can filter any viscosity oil, meaning that where a lot of other systems, particularly inline filters, are limited to lower

weight oils, ours can tackle those thick, heavy duty lubricants at ISO 320 or ISO 680 and above that others can’t.”

C. C. JENSEN’s products also boast significant environmental benefits, the first being the fact that their filter inserts are made from a renewable, sustainable resource.

A combination of pulp fibre and cotton, this organic material can be disposed of in a green manner that avoids the use of landfill sites.

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C.C. JENSEN

MFU flushing CAT dumper

The other primar y have been working with a benefit from a sustainability company operating with perspective is, of course, that the Canadian oil sands.

Here we have put to use one the company’s products’ core purpose is to create Clean Oil. of our more recent product Year C. C. JENSEN “By keeping that oil clean,” launches, which is a large, was established Caffrey highlights, “the first Mobile Flushing Unit with thing you do is reduce the an on board heated reservoir and particle counter. With frequency at which the oil has to be replaced. This subsequently reduces this unit, we pump warm, heavy lubricant your carbon footprint by scaling back your into the rear differentials of the big haul demand for these lubricants.” trucks during scheduled PM outages and As Caffrey goes on to state, the company clean the oil to recommended levels within is observing a greater degree of open a few hours. Cleaning the oil rather than mindedness from the mining sector to try simply replacing it has increased the new things when it comes to oil filtration, lifespan of these differentials from 18,000 and where this is occurring, the results to 25,000 hours. Based on the size of their have been very positive. “Recently, we fleet, the company has calculated that this

1953

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MFU during PM in workshop

Mobil SHC

“C. C. JENSEN sees great potential for mining companies in North America to take control of reliability by controlling contamination” will help save them an average of $500,000 dollar per year.”

Other avenues that C. C. JENSEN is currently looking into include the installation of filtration systems on diesel storage tanks and the development of heavy duty filtration systems for mobile equipment.

“We already have some small, heavy duty

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filters in service,” Caffrey says, “and larger units that are in the design stage. With their stronger mounting brackets and stabiliser packages, these systems will withstand the tough conditions encountered while installed onto mobile equipment such as drilling rigs and excavators.”

With respect to the immediate future,

C.C. JENSEN

C 680 after 90 min MFU flushing

the next big push for the company will be in the field of explosion proof motors, which will be required for the underground coal mining sector.

“Right now,” Caffrey says, “we see great potential for mining companies in North America to take control of reliability by controlling contamination.

These improvements in reliability and productivity will have a significant impact on the bottom line for mining operations.

We have a wealth of knowledge, case studies and practical experience that we are eager to use to help our customers solve their oil related problems. In addition, C. C. JENSEN provides a 100 percent satisfaction

HDU on mining truck, undercarriage

guarantee on all products.”

Caffrey concludes, “I really believe that there is a Clean Oil revolution occurring.

Machine reliability is no longer a desire, but a demand. Effective contamination control is a key enabler to success. I expect that CJC™ Filters will become a standard solution that all engineering companies and mines will expect to have as a filtration solution on all of their critical equipment.”

For more information about C. C. Jensen visit: www.cjc.dk

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Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

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