Mining Global magazine - July 2017

July 2017 • www.miningglobal.com

THE BIG MINING INNOVATIONS OF 2017

AMUR MINERALS CORP. COMMUNITY ENGAGEMENT IN A MISUNDERSTOOD INDUSTRY SPECIAL FEATURES

Peak Resources and Xanadu Mines

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FOREWORD WELCOME TO THE July issue of Mining Global. Our cover stars this month are Amur Minerals, with the Kun Manie project in the Far East of Russia, Amur Minerals strives to create a strong community engagement programme throughout its operation.

Also featured is the revolutionary IMP@CT Project that, with its switch on/switch off method, looks set to transform the global industry, and improve its image in the process.

Another exclusive interview comes from Xanadu Mines of Mongolia. John O’Hanlon talks to Managing Director Dr Andrew Stewart.

And finally, we look at the 10 mining innovations of 2017 as the industry heads into a future that is embracing the future with both hands wide.

As always, tweet your feedback @miningglobal

Enjoy the issue!

www.miningglobal.com www.bizclikmedia.com

F E AT U R E S

COMMUNITY ENGAGEMENT IN A MISUNDERSTOOD INDUSTRY PROFILE

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12 TECHNOLOGY

Switching on sustainable mining 4

July 2017

20 Mining

LIST

Innovations 2017

C O M PA N Y PROFILES

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XANADU MINES ASIA

PEAK RESOURCES Limited AFRICA

28

PT Merdeka Copper Gold Tbk ASIA

AMG Mining BRAZIL

Guinea Ministry of Mines and Geology AFRICA

46 82

58 92

SMB Société Minière de Boké AFRICA

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COMMUNITY ENGAGEMENT IN A MISUNDERSTOOD INDUSTRY Written by: JESS SHANAHAN

Amur Minerals Corporation is working with local communities to minimise the impact of its mining operations while creating jobs. We speak to CEO Robin Young about the company’s Amur Kun-Manie project in Russia

PROFILE AMUR MINERAL CORPORATION (AMC) is a nickel copper sulphide mineral exploration company listed on the London Stock Exchange, but focused on the far east of Russia.

The company’s principal asset is the Kun-Manie project located in Amur Oblast, where drill-defined resources have been uncovered.

Now the deposits have been identified, the next stage is to take this through to production. CEO Robin Young says: “As we develop the project, I would anticipate a point in time where someone approaches us to purchase it from the project. Until that point, the main mission is to enter production.”

Young is a geological engineer with 40 years’ experience working in the international mineral and resource sector, having worked his way from core logging through to executive management. He says: “I inherited the role and started as a consultant to the company. As the company decided to go public, the owners asked me to be the CEO. The rest is history.”

AMC’s presence in the Amur Oblast area is creating jobs for locals, along with several other achievements.

The project is also generating a lot 7

PROFILE of interest within local communities and the press. Young says: “We have been getting positive television press out of the Russia 2 television channel. They’ve been to our project site, interviewed us and have been very excited about the fact we are creating up to 2,000 jobs.

There’s a great deal of curiosity and excitement as to what our project can do for the community.”

Working with the locals is of the utmost importance to AMC, as it’s integral to the success of the project that the community is consulted and engaged. Young says: “There are three communities located near our project site, all within 300km, and most of our summer help is hired from this area.

“We are proactive in providing gainful employment to a significant number of people in the local area and when people go home from these programmes, their quality of life is affected from working with us. That in itself is a good way of engendering a desire for us to offer full time jobs in the area. The communities have a very strong positive feeling towards the company and what we can bring moving forward with the project.”

This kind of community 8

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“IT’S ABOUT BEING THERE AND BEING SUPPORTIVE OF THE PEOPLE. THERE’S A LOT OF UNEMPLOYMENT IN THE REGION SO WE AREN’T GOING TO BRING IN 1,000 FOREIGN PEOPLE TO DO THAT WORK” engagement not only benefits the people in the local area, but keeps stakeholders supportive as the project slowly unfolds. The company intends to set up specific programmes in the future where it’ll be even more involved in the community as Amur Kun-Manie develops. Young says: “We want to be ahead of the game and have the backing of the communities by

COMMUNITY ENGAGEMENT IN A MISUNDERSTOOD INDUSTRY

providing education programmes and improving schools. These are small villages of 200-500 people, not major cities or towns.

“It’s about being there and being supportive of the people. There’s a lot of unemployment in the region so we aren’t going to bring in 1000 foreign people to do that work.

It’s going to be 990 local, and 10 foreign. Over time we will work those

numbers to be 100 percent Russian.”

As well as working closely with the communities to show how the mines will work for them, AMC is maintaining an ongoing dialogue with the appropriate Russian authorities and agencies, which will help to provide information for the public.

AMC looks at the impact of the project on each village, town and city individually. Young says: “We 9

PROFILE

looked at what part of the plan could affect the people of the city of Zeya, which provides hydroelectric power to our smelter. Is there anything in that plan that is going to create a problem?

We develop a detailed design plan to understand what and who we are going to impact and then address any issues before going into the final details. This way the community is actually part of the plan to advance the 10

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project. It’s a very important aspect.”

As with any project, there are challenges. For instance, being a western company in Russian presents its own problems. Young explains: “Everyone thinks, inappropriately, that we have a political agenda. In actuality, we do not. Most of the people, contractors etc., we’ve worked with don’t see us as a foreign company. There’s a concern that

COMMUNITY ENGAGEMENT IN A MISUNDERSTOOD INDUSTRY

“IF A PERSON DOESN’T WANT MINES TO BE ACTIVE THEN THEY’D HAVE TO GIVE UP THEIR MOBILE PHONE, GOLD JEWELLRY AND SO MUCH MORE. IT’S A WEIRD WAY OF LOOKING AT IT BUT IT’S THE TRUTH” we are not there to simply create jobs and to mine the project – when that’s exactly what we’re doing. The challenge has been to communicate that we are a positive company with a positive influence on the community.

We are not a bunch of bad guys.”

It’s not just this perception that brings difficulties, but the worldwide view of mining as a whole. According to young, many people don’t understand

the benefits the industry brings to our modern world. Young says: “If a person doesn’t want mines to be active then they’d have to give up their mobile phone, gold jewellery and so much more. It’s a weird way of looking at it but it’s the truth. People don’t see this and that’s the reason why there is such a negative view of the industry.”

AMC are working to combat industry myths with media coverage and community engagement. Young concludes: “Success is in the relationships. Good, transparent, positive, open clean relationships. It’s really important to have that trust.”

As a late stage exploration project with detailed engineering work being undertake, Kun-Manie represents one of the largest potential sulphide nickel operations in the world which could place it among the top ten nickel producing companies on an annual basis. Yet, Young insists that AMC’s focus is ensuring that the mine benefits the local community and busts prominent mining myths.

So far, AMC has completed 5,903 metres of drilling (about 30 percent of the planned programme), so the advantages of Kun Manie are not yet fully formed. Watch this space.

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TECHNOLOGY

Switching on sustainable mining WE SPEAK TO DR KATHRYN MOORE FROM IMP@CT PROJECT ABOUT SUSTAINABILITY, BREXIT, MINING’S IMAGE ISSUES, AND MORE W R I T T E N B Y: S T A F F W R I T E R

A PIONEERING UK venture, the IMP@CT project is determined to spark an ethical, sustainable, and global mining revolution. The project is led by University of Exeter geology experts and looks to tap into a number of small metal deposits in Europe and beyond.

Furthermore, they aim to establish SOSO (switch on, switch off) mining as a widespread industry method.

SOSO could potentially enable mining companies to excavate materials that are most in demand in any given period.

For further details, Mining Global quizzed project lead Dr Kathryn Moore.

What is your role and involvement with the IMP@CT PROJECT? In 2012 I took up a new position (funded by the British geological survey) as a lecturer on critical and green technology metal, which was a slight step from my previous role as a geologist. The role was quite a diverse role, a lot of it looking at the geological origins of the critical metals that we use in all the new technologies.

The role’s involved into a whole systems perspective, so it’s not really just about the geology it’s about access or the peripheral topics around 13

TECHNOLOGY

mining that actually make it work.

How did your background in geology prime you for work on the IMP@CT project?

I’ve been through several years of thinking about these issues and talking to a lot of people from a lot of different perspectives, from the raw material producers to the end product manufacturers. That’s not often 14

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something we would do as geologists - there does seem to be a little bit of a disconnect between the raw material production and manufacturing.

Several years of talking to a lot of related people across the value chain has put me in a good position to link to all of the disparate partners that are in this consortium, because this consortium is very much about taking this whole system to you, and thinking, “if you can actually deal with

S W I T C H I N G O N S U S TA I N A B L E M I N I N G

“The mining industry has to be very careful about how its perceived, because its perceived generally very negatively”

the technology, if you can actually understand them geologically, what does it take for that new mining approach to actually work in practice?”

There’s a widespread, blanket perception that mining is an unethical practice. While working in on the IMP@CT project, what has been your experience of this?

It’s a huge issue and particularly for Europe, it on the top five challenges facing the mining community. In terms of accidents and environmental contamination, if you look at the statistics, it’s not actually the worst industry out there. However, when incidents do happen, they have the tendency to be absolutely awful.

The mining industry has to be very careful about how its perceived, because its perceived generally very negatively. There’s good reasons for it - obviously we have the occasional catastrophic incident.

Historically, where mining was operating in societies that didn’t have environmental protection and through the industrial revolution it was all about people having jobs and staying alive basically. There weren’t the same checks and balances as we had now. The problem that we have now is that the checks and balances we have in place are very different in different places in the world.

Mining communities that are based in Canada, Australia and Europe are very conscientious and like to employ best practice, but that isn’t the case across the globe, so you need to think very carefully about the whole 15

TECHNOLOGY

SOSO (switch on, switch off mining)

THE IMP@CT PROJECT’S (SOSO) ‘SWITCH ON-SWITCH OFF’ METHOD TO MINE MANY CRITICAL METAL AND OTHER SMALL COMPLEX DEPOSITS WILL LOOK TO DEVELOP TARGETED, TECHNOLOGICAL INNOVATIONS IN MINING EQUIPMENT DESIGN, AS WELL AS MINE PLANNING. THE INNOVATIONS WILL NOT ONLY REDUCE THE FEASIBILITY STUDIES REQUIRED, BUT ALSO IMPROVE THE QUALITY OF THE EXTRACTED MATERIAL, INFRASTRUCTURE, LAND USE, RESOURCE CONSUMPTION AND WASTE. THE TEAM BELIEVE THAT THIS MODEL CAN BE ADOPTED BY EUROPEAN AND NATIONAL POLICY MAKERS, AS WELL AS THE WIDER MINING INDUSTRY IN GENERAL.

S W I T C H I N G O N S U S TA I N A B L E M I N I N G

acceptability of mining to society.

What specific challenges does the industry face when mining in Europe as opposed to say, Australia, or Africa?

The issue we have in Europe is that our supply root is generally from other countries and that means that we have an inherent risk in European manufacturing. The issue in Europe is that the world class huge deposits are generally mined out, as the world class deposits are in other countries. Europe has vast resources, but they’re largely in small high-grade complexes, which don’t attract as much investment.

We have the potential to mine for ourselves, however the small deposits we have aren’t necessarily going to be competitive with the world class deposits in the production costs-pertonne. With the world class deposits you’re working with economies of scale essentially. The only way for Europe to be competitive in terms of production is to find a way of mining that can be done in a very cost-efficient way that doesn’t require as much investment - that’s what the technological side is about.

The benefits of world class deposits

are that you’re going to employ a large work force over a long space of time. If that’s not the case, we’ll have to design the mining approach to work around the community and increase the life of mines by decreasing production. There’s a lot to work out, but if we can do that, then the small European deposits could theoretically operate in competition to international world class deposits.

Can you talk about the timescales involved in the IMP@CT project?

This has really come from debates with manufacturers. The manufacturers at the very end of the value chain are making decisions about the release of products based on how long they can be sure to have reliable access based on particular metals. They may be deciding whether or not to take a particular product to market or if their supply from one particular mine runs out, where do they go elsewhere?

The issue is that geologically we don’t have a problem in access to resources. Geologically the resources are available for all these technologies.

The real issue is how long it takes from identifying a new deposit geologically 17

TECHNOLOGY to having that mineral deposit actually in production. Going from identification in the ground to mine production can take decades. That’s on a completely different timescale from the manufacturers - if they design a new product, they might want to release it in just a couple of years. Or, if a conflict arises in a metal producing country, that can cut off supply in a matter of months or even less. The timescale of establishing production and the time scale of manufacturing need are a complete mismatch.

The idea was if we can target small deposits and get them up and running and operating quickly (which you can never do for world class deposits) we have the opportunity to actually respond, in terms of production at the start of the value, to rapid changes and the end of the value chain. Basically, the manufacturing demand and the production risks create the economic sphere in which you have to decide whether a product is economic or not economic.

Who are IMP@CT project’s partners?

We’ve got five industry partners, four universities and one geological 18

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“The Horizon 2020 programme is something that the UK bought into, so even with a hard Brexit, that’s going to be a commitment that the UK has” survey. The industry partners are mining company Mineco; Metal Innovations, who build and design mining equipment; Rados International who design and build ore sorters; Extracthive, who deal with minerals and processing, and EPSE deal with minerals and processing as well. The University of Exeter and Imperial College London also do mineral processing.

S W I T C H I N G O N S U S TA I N A B L E M I N I N G

IMP@CT project received €7 million funding from the EU’s Horizon 2020 programme. Will Brexit have any impact on this?

No, this particular project is safe.

We actually found out that we got this funding a week before the Brexit referendum, even with the trigger for Article 50. We’ve started

the project, and as you know, we’re not out until we’re out.

The Horizon 2020 programme is something that the UK bought into, so even with a hard Brexit, that’s going to be a commitment that the UK has. For this particular project, which ends in 2020, we’ll be able to see it through. We don’t really have to worry about.

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TOP 10

TOP 10 Mining Innovations 2017 MINING IS CRUCIAL TO RETRIEVING THE ORES AND MINERALS THAT KEEP IMPORTANT INDUSTRIES RUNNING SMOOTHLY, BUT RETRIEVING THOSE PRODUCTS ISN’T ALWAYS SIMPLE OR STRAIGHTFORWARD. MINING INNOVATIONS DO MORE THAN INCREASE EFFICIENCY; THEY ALSO PROTECT WORKERS AND ENSURE CONSISTENT YIELD THAT SUPPORTS FURTHER MINING EXPLORATIONS. HERE ARE 10 OF 2017’S BEST OFFERINGS FOR THE FUTURE OF THE MINING INDUSTRY W r i t t e n b y : S TA F F W R I T E R

TOP 10

09 ECO10 TUNNEL

BORER AUTOMATION

While tunnel boring itself is a concept that’s familiar to the industry, automating the process increases several beneficial verticals: precision, particularly in areas where excavation poses stability risks, miner safety, and that all-important efficiency metric, speed. While the world isn’t quite ready for a push-button solution to tunnel creation, automated borers are getting the possibility closer than ever before. In fact, global mining group Rio Tinto and the Centre of Excellence in Mining Innovation (CEMI) have already teamed up to put this innovation to good use: visit the Northparkes Mine in Australia and you might just catch a glimpse of a borer in action.

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FRIENDLIER ORE CONSUMPTION

Energy and water are two of the biggest demands required of ore processing, but new processes are gradually changing that. Rio Tinto is using a new method, called Copper NuWave™, in Utah at its Kennecott Copper mine.

The process uses microwaves to determine the copper content of ore, allowing them to quickly determine rich ore and discard worthless ore, cutting back on the resources wasted on fruitless searches.

T O P 1 0 M I N I N G I N N O V AT I O N S

07 EXCAVATOR

REDESIGNS

08 MINING

SIMULATORS

An excellent tool for trailing new mining professionals in situations that are difficult to commit to paper, mining simulators are also invaluable for contingency and emergency training. They can also be easily used to determine worthwhile candidates during the hiring process, and to judge reaction times and accuracy for existing mine employees. 2017’s versions offer incredibly lifelike projected, 360-style visuals that are as close to the “real thing” as possible without actually going underground.

Hydraulics are leading the way in excavator reinvention, with big names like Hitachi committing R&D resources into optimizing the balance between energy consumption and peak task performance. Doosan and Volvo have also tossed their hats into the proverbial ring, furthering previous designs that used unique features like independent tracked wheel controls for unprecedented control through obstacle-littered sites and heavy site traffic.

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06 RAIL SYSTEM

AUTOMATION

Once again, Rio Tinto is leading the charge with reinventing the mining site as we know it, but make no mistake, they’re definitely not the only ones looking into automated heavy rail systems. Offering busy mining groups the ability to quickly and safely move ore from excavation to processing and beyond, automating trolleys and rail systems on-site is a smart move that makes efficiency not just possible, but the norm.

05 THE USE OF X-RAY DIFFRACTION Diffraction technology, much like the Copper NuWave™, helps identify the amount of useful resources in a given piece of ore, cutting down on wasted hunting by targeting rich materials. Well-known diamond mining group ALROSA is already using diffraction in its mining sites, with others looking to broaden their use of the technology in 2017. With so much of a site’s success riding on spending minimal effort and time for maximum yield, technologies that make that process easier are transforming mining from the (literal) ground up.

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T O P 1 0 M I N I N G I N N O V AT I O N S

04 THREE-DIMENSIONAL MAPPING TECH

As important as on-site technologies are, entering mining efforts with a plan in hand minimizes issues and maximizes targeting for rich ore and lucrative veins. 3-D mapping helps the entirety of the mining team - from administrators to miners - get on the same page instantly. By highlighting the most promising areas for excavation before the machinery is ever powered up, resources are intelligently used to zero in on the best mining areas in the least amount of time.

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EQUIPMENT POWERED WITH ALTERNATIVE ENERGY

As the Copper NuWave™ demonstrates, energy conservation and successful mining operations are not necessarily mutually exclusive.

South African mining group Harmony Gold has embraced solar for direct power, and is piloting a program to use mining land for biocrops that will later produce natural gas, another form of alternative energy, to further power their machinery. This cyclical system helps to not only drive down operational costs, but minimize environmental impact company-wide.

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02 IMPROVEMENTS IN MINER SAFETY GEAR

In addition to overall site safety, modern approaches to mining worker safety also take into account the quality of each job day and the impact of repetitive stress injuries. SmartCap, a sensor-rigged PPE helmet, continually monitors common signs of fatigue and measures alertness to cut down on distractionrelated incidents. Centennial Coal has also introduced a special mining-specific boot this year, offering the sole stability, ankle support and waterproof design needed to protect worker’s overall health while on the job.

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01 CENTRALIZED SITE AUTOMATION

Much like urban planning, a mining site requires intelligent movement of workers, equipment, and excavated materials to maximize efficiency while cutting down on waste. Until now, that endeavor usually resembled a cobbledtogether series of systems and several individuals at the controls of each. Full site automation is closer than ever before, incorporating other innovations mentioned above, such as heavy rail transport and tunnel boring. When algorithms can be immediately implemented across all aspects of a job site, costs are driven down to levels that maximize profitable enterprise without sacrificing worker comfort or safety - and that’s potentially the best mining innovation in the industry in 2017 and beyond. 27

Ngualla: Uncovering Tanzania’s rare earths Written by Catherine Rowell Produced by Richard Deane

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We speak to Peak Resources’ Managing Director Darren Townsend regarding the company’s development of the Ngualla Project in Tanzania

S

ince listing onto the Australian stock exchange back in 2006, Peak Resources Ltd has come a long way. Whilst exploring for phosphate minerals in East Africa, the company discovered rare earth minerals, creating a significant buzz across the mining industry that led to the establishment of its flagship Ngualla Project. Managing Director Darren Townsend explains how the company has taken the project, located in southern Tanzania, from discovery, all the way through to the recent completion of a Bank Feasibility Study.

“We found that there were very high grades of the magnet metal rare earths, neodymium (Nd) and praseodymium (Pr), called NdPr. There are seventeen different rare earth elements, but NdPr are the most important,” he says.

Quickly becoming one of the world’s largest undeveloped neodymium and praseodymium rare earth

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projects, the company has received its environmental permit for the project and is now moving ahead with the submission of the mining license application. With plans to export approximately 28,000 tonnes of rare earth concentrate throughout a 30-year mine life, the company will undertake the initial processing in Tanzania, through an on-site multistage processing plant. “The high grade processed rare earth concentrate will then be shipped to the United Kingdom to a refinery that will use solvent extraction technologies to complete further processing,” says Townsend.

He adds further, “I don’t like to use the term ‘world-class’, but Ngualla simply is a world class deposit. It’s extremely high grade and our aim is to get this project up and into production, whilst looking at additional opportunities to grow the company and build out the business further within the rare earths

MINING

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Number of staff at PEAK RESOURCES LIMITED

Peak Resources Corporate Video

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PEAK RESOURCES LIMITED

“I don’t like to use the term ‘world-class’, but Ngualla simply is a world class deposit”

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space. We see the development of Ngualla as a starting position for us.”

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Increased demand Whilst prices in cobalt have recently surged up by 150 percent, the demand for other metals including rare earths will ultimately also increase due to the same transforming driver – the electrification of the automotive industry. Rare earths are used to make highstrength magnets, which are 10 times stronger than traditional iron boron magnets. Such advantages enable this

MINING

technology to be utilised in a number of applications. Townsend explains that with 90 percent of drive motors for the new models of electric and hybrid cars using rare earth magnets, this energy efficient alternative transportation system is brought to the forefront of building and design.

“The world hasn’t yet worked out that we need rare earths in the same way as everybody’s been talking about lithium, graphite and cobalt. If you want to get the energy from your lithium battery to the road, 90 percent of the time you’re

going to be using a rare earth magnet drive motor,” comments Townsend.

Investors have not yet cottoned on to this potential investment opportunity, where NdPr will drive significant growth for companies and investors through the rise of electric vehicles.

With this in mind, Townsend adds that “if we had 100 percent electric vehicles within global production, we would need to mine seven times the amount of rare earths as we do today.”

“We will start to see a larger share of electric vehicles coming into the market, which will have a big impact over time on the supply side and quality. Projects like ours are going to be very important to keep up with this expected demand growth.”

Peak Resources is developing Ngualla in partnership with two key strategic and high quality investors; International Finance Corporation (IFC) and Appian Natural Resources Fund, a private equity group based in London. Nonetheless, raising funding is not without its challenges. “When you’re a junior developer, you need to raise funds from the stock market to move the project forward,” explains

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PEAK RESOURCES LIMITED

Townsend. “There are times when rare earth prices are quite low, which makes raising equity a little bit more challenging. However, we’re really lucky in having Appian and IFC as partners to help us with that funding.”

Giving back to the community Throughout the 30-year project, the Ngualla Project in Tanzania will directly employ an estimated 209 people, predominantly from the local area, and the company will also undertake a significant amount of community projects, as well be an enabler of sustainable development activity that will provide economic and employment opportunities beyond the mining project. Over the next 30 years, the company will no doubt have a major role in making a positive long-term contribution to the local community.

Additionally, Peak Resources aim to become a clean, ethical, sustainable

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source of rare earths to global industry. All processes will operate at top tier environmental standards, which will match well and feed into the supply chains of the products low carbon technological applications.

“The project involves quite small scale, open cut mining,” adds Townsend. “With less than a two to one waste to ore strip ratio, it has quite a small mining footprint.” The processing will also be completed without the use of chemicals such as cyanide, and the naturally very low level of radionuclides in the deposit avoids any issues some projects have with their high contents of uranium or thorium. Peak Resources’ long-term investment in the local community and its strong environmental focus will support future business growth whilst bringing benefits to the local communities and enable the company to expand their operations and go from strength to strength.

MINING

Community investments by Peak. TOP LEFT: Ngwala Primary School classrooms built in 2012. TOP RIGHT: Waiting area built for the Nwala village maternity clinic.

BELOW: First bucket of water accepted by villager at handover ceremony for Madodomia village water bore and pump donated by Peak.

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CAVERNS, MEASURED

BY MAN Written by John O’Hanlon Produced by Mariana Lee

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XANADU MINES

Xanadu Mines is indeed defining the value hidden in the soil of Mongolia, and discovering enough copper and gold to build untold numbers of pleasuredomes

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n 10 February 1922, the People’s Government of Mongolia signed a landmark resolution that brought a significant coal deposit in Nalaikh city under state control. By the end of the year, exploration on the deposit was complete, ushering in what is today considered the birth of the mining sector in the country.

In the 96 years that have followed, the mining industry has undergone

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a number of transformations as its role in Mongolia’s economy has steadily grown into one of its leading sectors of growth, responsible for producing 21 percent of its GDP, 70 percent of its total industrial output and 90 percent of its export product.

Coal, copper and gold form the principle reserves that are mined in abundance across Mongolia.

The country hosts approximately ten percent of the world’s known

ASIA

2010

The year that XANADU MINES was founded

coal reserves at an estimated 162 billion tonnes.

It took Mongolia a while to shake down since shaking off Soviet influence in 1990 and ceasing to call itself a people’s republic, but today this huge, sparsely populated country is democratic, peaceful and stable. Its readily accessible mineral wealth has started to attract major mining companies seeking new resources and with copper and gold prices firming up following a four-year downturn, Mongolia is looking increasingly attractive.

Since it floated on the Australian Stock Exchange in May 2010, the Australian exploration company Xanadu Mines has been singlemindedly pursuing its goal of adding value to its properties in the South Gobi district of Mongolia.

Its Managing Director and CEO Dr Andrew Stewart has long held the view that Mongolia had the edge on other comparable regions: “In exploration, a good principle is to have a counter cyclical approach,” he says. “That might seem like a truism but very few companies actually do it.”

The lean years which saw large projects mothballed and investment drying up are coming to an end, but when Xanadu acquired its assets, he and his team saw their opportunity to get established ahead of the curve.

“We like Mongolia because it is a very underexplored exploration location, even though it has been shown to host some of the biggest

w w w. x a n a d u m i n e s . c o m

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“We like Mongolia because it is a very underexplored exploration location, even though it has been shown to host some of the biggest copper deposits in the world”

copper deposits in the world,” adds Stewart.

He points for evidence to Rio Tinto’s massive Oyu Tolgoi project, only 100 kilometres from Xanadu’s flagship Kharmagtai project in the south of the country. With the cost of bringing it into production estimated at close to $10 billion, the Oyu Tolgoi mining project represents the largest financial undertaking in Mongolia’s history.

Discovered in the early 2000s, the mine’s copper production is projected to come in at 450,000 tonnes per annum for the next 50 years.

Stewart’s commitment to Mongolia is only matched by his excitement.

“Mongolia is God’s gift to explorers! A junior company like Xanadu can explore relatively cheaply,” he says.

There are comparable reserves in the world, but most of these are located in remote jungle,

ANDREW STEWART MD & CEO

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Andrew Stewart Managing Director & Chief Executive Officer BSc, PhD, MAIG, MSEG & MAICD

Dr Andrew is an exploration geologist with over 15 years’ experience in mineral exploration; primarily focused on project generation, project evaluation and exploration strategy development throughout Asia and Eastern Europe. Andrew has particular expertise in porphyry copper-gold and epithermal gold deposits, but has worked across a diverse range of commodities. He holds a BSc (Hons) from Macquarie University and a PhD from the Centre of Ore Deposits and Exploration Studies at the University of Tasmania. During his time at Ivanhoe Mines and Vale, Andrew held various technical and management positions in Mongolia and Indonesia and has been involved in several green fields discoveries. After providing technical and program management for Vale in Indonesia and Mongolia, Andrew joined Xanadu Mines as Chief Geologist leading the gold and base metals project generation and evaluation team in Mongolia. Andrew has been Managing Director and Chief Executive Officer of Xanadu Mines since 2016 and prior to that had been Chief Executive Officer.

at high altitude, places with high rainfall or, like the beleaguered Grasberg mine in Indonesia, beset with political disruption.

While Xanadu’s peers are drilling at a cost of up to $600 a metre, Xanadu’s costs come in at around $100, thanks to the open nature of the terrain plus the fact that all of the roads, power, water and other services that are required are already in place.

“Particularly at Kharmagtai, this is the benefit gained from the infrastructure that goes in when one of the world’s biggest mining

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companies builds a tier one asset next door to our project,” he admits.

All three projects that Xanadu is developing are in highly prospective deposits. The gold element is a critical differentiator between these Mongolian resources and others in South and Central America for example.

“These porphyry copper resources we see in Mongolia are probably the biggest gold resources globally,” he says.

These are precisely the type of deposit that the major mining

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21%

Proportion of Mongolian GDP generated by mining

companies are turned on by at a time when there is a scarcity of new resources on the one hand while on the other global economic uncertainties are encouraging investors to take refuge in gold.

Kharmagtai, with a 30-year mining licence and a registered water resource, is the most active currently, and he estimates that it will take another year to define.

The deposit starts at the surface, giving the opportunity for early production upside from an open pit, but in the longer term there is a great deal more value deeper down. Xanadu’s local drilling contractor Litho Resources has already gone down 650 metres, with some excellent intercepts, but by mid-2018 he expects it to reach as far as a kilometre below ground.

Eventually Kharmagtai could rival or surpass Oyu Tolgoi, he believes.

“Kharmagtai is a big deposit and getting bigger,” he explains. “We are getting a lot of interest from strategic investors. With the shortage of genuine discoveries out there the majors are on the hunt for new assets. Xanadu is very much an exploration company and our job is to provide those assets for the future.”

A second project on the South Gobi porphyry belt, Oyut Ulaan (Red Mountain), is close to Kharmagtai, and here the emphasis is on gold rather than copper. It is at an earlier stage of

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“With three of them in a single company, Xanadu, this represents a fantastic portfolio. Most companies would die to have just one of them!”

ANDREW STEWART MD & CEO

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exploration. The third is in the north of the country – Sharchuluut Uul. The point is that Xanadu is not just sitting on a single project but three entire mineral districts that have never been explored at depth, and each promise potential mining opportunities of upward of 30 years duration. That is precisely what the majors are looking for, and the fact that they promise returns at relatively low capital investment adds to their juiciness.

“We have three projects, each of which would support a single company,” Stewart concludes. “With three of them in a single company, Xanadu, this represents a fantastic portfolio. Most companies would die to have just one of them!”

The coming year will see work continuing at Kharmagtai to understand the depth and potential of that system. At the same time exploration will continue at Oyut Ulaan, while Sharchuluut Uul, he confidently hopes, will emerge as a major new district in the north of the country.

The demand for copper from Japan, China and Russia, with ready logistical access to all of these markets, boosted by the global thirst for gold, will make Xanadu Mines a tempting target for the majors, though he does not by any means rule out the possibility that the company might build its own mines either alone or in partnership.

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Investing for the next century Millionaire project seeks to place AMG Mining as the largest Lithium concentrate producer in Brazil

Written by Flรกvia Brancato Produced by Glen White

Fabiano Costa, President of AMG Mining

AMG MINING

A

s the leader in the supply of critical materials for many applications involving technological innovations and focused on smart reduction of CO2 emission, AMG Mining stands out in the management of a diversified portfolio of products, having been recognized worldwide as the largest producer of Ta2O5 concentrate

AMG Brazil operates two business units in the state of Minas Gerais. The mining unit produces mineral concentrates from Tantalum, Niobium and Tin, as well as a byproduct composed of minerals

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such as Feldspar, Albite, Quartz, Micas, with a wide application in the national ceramic and glass industry. The other operating division consists of a chemical transformation plant that produces high quality and purity oxides of Tantalum and Niobium, and a metallurgical plant that produces special Aluminum alloys.

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“The total investment is over U$ 60 million” – President of AMG Mining, Fabiano Costa

LITHIUM PROJECT

Since 2011 the company has been working tirelessly in what is known as the largest investment in the history of the AMG Group worldwide.

“The total investment, which involves the construction of an ore treatment unit for the concentration of Spodumene (Lithium Mineral), expansion of the existing operational support infrastructure and construction of a dam, is over U$ 60 million,” says the President of AMG Mining, Fabiano Costa.

According to the president, the project outcome will make them the largest producer, marketer and, potentially, the largest exporter of lithium concentrate in Brazil. “We are

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already working on the conceptual design of doubling the capacity of the future plant and we will become the largest producer in the chemical transformation sector, which is currently the fastest growing in the world, focusing in the batteries manufacturing and the electric vehicles market,” Costa adds.

The project itself has generated more than 500 jobs during the deployment phases and when completed will increase the company’s revenue by almost five times, breaching the $300 million mark. Costa continues in celebratory voice: “The expectation is an increase of EBITDA in even greater proportions due to the

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cost savings based on the growth.

OUTSTANDING MANAGEMENT The solid foundations established The responsible management lately justify this investment for the critical materials portfolio period, which will soon result in focusing on sustainable long-term sustainable growth of more than value generation is a unique feature 100 percent of its current revenue.” of AMG. “Developed by a highly The first production of the raw qualified team, constantly supported material is expected for by strategic information and the first half of 2018. specialty of our business, The president also plus our logistics and About highlights the the constant and importance of almost obsessed positioning in practice of our this increasingly values in our promising market. routine - Security, Annual revenue He says: “If we Transparency, look at the metal Integrity, Focus commodity trend on Results and line lately, it has been a Innovation - also has to be decline in demand which raises highlighted,” explains Costa. the metals prices in general, with AMG Mining’s “green” the exception of lithium. This puts management concept, although us in a prominent position with with a 25 percent increase in CO2 an extremely strategic metal.” production in its own operations, exclusively produces critical materials that have enabled

U$95 MILLION

BRAZIL

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TECHNOLOGY AND SERVICES TAILORED FOR YOU Ensure you get the best technology and services for producing high-purity lithium carbonate from various raw materials. Our beneficiation, calcination, leaching, solution purification, and lithium recovery technologies support your process needs, from raw materials to end products.

Garanta que a planta receba as melhores tecnologias e serviços para a produção de carbonato de lítio de alta pureza a partir de várias matérias-primas. Nossas tecnologias de benficiamento, calcinação, lixiviação, purificação, e recuperação de lítio suprem as suas necessidades de processo, desde as matérias-primas até o produto final.

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“This puts us in a prominent position with an extremely strategic metal” – President of AMG Mining, Fabiano Costa

significant reductions for customers in the automotive sector and mainly commercial aviation, reaching a total savings of almost 30 million cubic meters of CO2. “Our environmental responsibility is reversed in product innovation that can effectively result in substantial savings in CO2 emissions,” says Costa.

AMAZING JOURNEY

The Mining Engineer with a Masters Degree in Planning and Mining

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Operations and a postgraduate in Mineral Processing, at University of Queensland in Australia, Fabiano Costa, has much to be proud of.

He began his young career, still at the age of 16, working in the family mining business and later on as an operator of heavy equipment in the extinct Ă guas Claras Mine,

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former MBR, which today is the giant Vale. For six years he was a Mining Engineer at Samarco until he left to explore other horizons in Chile, Canada and Australia, through BHP Billiton, a global leader in natural resources. In Laos, Southeast Asia, he was part of the implementation of the largest copper

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and gold mining in that region.

Later in 2011 he took over the operations of the AMG mine in Brazil (former CIF Mining), and over his management the mine became the most profitable company in the group. Soon he took over the second unit, becoming the president of AMG in Brazil. He is currently

leading a project that, along with other business of the Brazilian unit, will account for almost half of the group’s total outcome in 2020.

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INDONESIAN MINING

ON THE WORLD STAGE Written by Nye Longman

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PT Merdeka Copper Gold Tbk: Financially and environmentally sound, the Tujuh Bukit Project in East Java is set to be one of Indonesia’s finest mines

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ith production already underway at Indonesia’s Tujuh Bukit Project in East Java, the company in charge, PT Merdeka Copper Gold Tbk, is already proving its worthiness for such an important undertaking. An Indonesian-owned operation, the company is set to oversee a profitable, safe, and sustainable mine that will pay dividends for shareholders as well as the local community. We speak to Merdeka’s CEO Colin Moorhead to discover how one of the country’s most promising mines in recent years will make the grade.

With an estimated Mineral Resource of some 99

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million tonnes of ore at an average grade of 0.8 grams per tonne of gold, and 25 grams per tonne of silver, the near-surface ore deposits contain approximately 2.45 million ounces of gold and 79 million ounces of silver.

The underlying porphyry deposit has an Inferred Mineral Resource of some 1.9 billion tonnes at estimated grades of 0.45 percent copper and 0.44 grams per tonne gold making it one of the largest projects of its kind in the world.

All told, the porphyry is estimated to contain 28 million ounces of gold and 19 billion pounds of copper.

“I come from 30 years mining experience working on some of the largest mines in Australia and PNG,” he explains. “I’ve been asked to build a technical team capable of taking Tujuh Bukit to those standards. I’m proud to say we could take anyone from Australia and they would be impressed with our

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ATTITUDE. RELIABILITY. KINDNESS. AWARENESS. TEAM WORK. ORGANIZED We are a Heavy Equipments Rental company with more than 300 Units of Equipments. We also experienced in Earth Work Construction services, Toll Road, Dam and Mining Services.

PT UNITEDA ARKATO www.arkato.com | uniteda@arkato.com Rumah Gadang Office @ Jalan Pinang Ranti II no 44 Jakarta Timur 13560 – Indonesia Tel: (+62-21) 801 1647, 809 8049

PT Arkadaya Hak www.arkadaya.co info@arkadaya.co

kato Persada om om

PT Arkadiya Fourhaka Indonesia www.arkadiya.co.id info@arkadiya.co.id

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construction and operating standards”. Operations Merdeka is listed on the Indonesia Stock Exchange following a successful IPO in 2015 and controls the companies that hold the Tujuh Bukit mining leases. These consist of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits.

The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life.

“The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the

“What we aim to do is create an internationally respected, high standard and high integrity mining company” – Colin Moorhead, CEO

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biggest gold and copper deposits This could set us up as a 30 plus in the world. What we aim to do is year copper-gold producer.� create an internationally respected, The oxide gold silver development high standard and high integrity commenced operations in December mining company. Tujuh Bukit has a and produced its first gold in March typical epithermal gold oxide cap 2017, just 18 months after construction that has been developed as an open work started. This mine offers low pit mine, overlying a two billion tonne costs and high margins. Using sulphide porphyry copper conventional open pit mining, deposit that could be the ore is crushed and The number of developed in stages agglomerated before staff at PT Merdeka as a series of mass being stacked on a underground mines. heap leach pad where Copper Gold Tbk

1,500

PT MERDEKA COPPER GOLD TBK

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the gold is dissolved in a weak cyanide solution.

The pregnant solution is then pumped to an ADR (absorption, desorption, recovery) plant where gold and silver is recovered and produced as dorĂŠ. Initially the operation will process four million tonnes of ore annually and will produce on average 100,000 ounces of gold and up to 300,000 ounces of silver per year over the next decade.

Looking further ahead, Merdeka is also conducting a study on expanding the mine’s heap leach capacity to 50 million tonnes and its production

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PEOPLE ACHIEVEMENT DEDICATION

Madhani provides clients with a complete pit to port mining solution. Our modern fleet of mining equipment includes hydraulic excavators ranging up to 350 tonne & haul trucks up to 150 tonne capacity.

Madhani construction services cover all commodity types and include mine site infrastructure and ore processing/handling facilities. Construction capabilities include airstrips, containment dams, equipment maintenance workshops, site camps, fuel storage tank-farms, explosive magazine facilities and site office complexes. We can supply, install and operate crushing plants, conveyor systems and port loading facilities.

We are always ready to meet the needs of our clients no matter where they are located.

Office Address: PT Madhani Talatah Nusantara, Alamanda Tower 12th Floor, Jl. TB Simatupang Kav. 23-24, Jakarta 12430, Indonesia Web: www.madhani.co.id | Email: info@madhani.co.id

CONSTRUCTION AND MINING CONTRACTORS

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rate from four million tonnes to six million tonnes per annum.

The second opportunity at Tujuh Bukit is to develop a series of underground mines to exploit the massive porphyry copper gold deposit that underlies the oxide mine. “We are currently doing the pre-engineering to put an exploration decline into the porphyry which sits below the oxide mine we are operating,” Moorhead adds. “That upper high grade zone (UHGZ) of that deposit is estimated to contain about 300 million tonnes at 0.8 percent copper and 0.8 grams

of gold.” The decline will help Merdeka acquire the data needed to support a prefeasibility study for the first mass underground mine.

Sustainable mining The journey to developing one of Indonesia’s best deposits, and with that, one of its most reputable mining companies, has not been easy. Issues over ownership and permitting slowed progress before a single brick was laid. And once that had been taken care of, the company had the weather to contend

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PT MERDEKA COPPER GOLD TBK

of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit.

The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits.

The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life.

“The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the biggest gold and copper deposits in the world. What we aim to do is create an internationally respected, high standard and high integrity mining company.

Tujuh Bukit has a typical epithermal gold oxide cap that has been developed as an open pit

“We have a commitment to spend 1.5 percent of our return revenue capital on local projects” – Colin Moorhead, CEO

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TOTAL EXPLOSIVES SOLUTION! WHY DAHANA? DAHANA’s line of business covers Explosives Manufacturing, Drilling & Blasting Services and Related Services for customers throughout Indonesia and ASEAN Region. Dahana’s explosives users comprise of Mining Industry, both metal and non metal; Quarry & Construction such as cement, asphalt and andesite quarries and construction projects such as dams, roads, tunneling, irrigation, harbor and building demolition; Oil & Gas Sectors such as oil well perforating, seismic prospecting and also defense related.

Owing to its 25-year experience, DAHANA enjoys extensive customer’s trust for its proven exemplary integrated explosives services for various purposes and conditions, including bench blasting, trench blasting and underwater blasting, which are quite complex. Dahana has been able to handle the whole blasting process, starting from the designing, calculation, drill hole preparations, explosive configuration, explosives supply, blasting, up to the operational security.

DAHANA has been in operation for drilling and blasting work in more than 20 sites scattered in Indonesia under the support of its On Site Plant (OSP) and Mobile Manufacturing Truck (MMT), among others, is the one in operation at Mine Site of PT Bumi Suksesindo (BSI) in Banyuwangi, East Java.

Local Content

Customization

Go Green

As a domestic company, DAHANA uses local materials in the country for the products and services it produces. It is a form of approbation and support for the independence of the domestic industry.

With the support of Energetic Materials Center (EMC) as a center for production and research and development of energetic materials, DAHANA is able to answer the challenge for explosive material tailored to a variety of terrains and purposes.

DAHANA constantly grows along with the environment in their business activities The Green Concept applied to both of the management of buildings and products has resulted in numerous awards both nationally and internationally.

Menara MTH 17th floor, Jl. MT Haryono Kav. 23 Jakarta, Indonesia

www.dahana.id corporate@dahana.id

Total Service Solution The integrated Services of DAHANA range from production of explosives, drilling and blasting services to related services such as demolition,warehousing, consulting and licensing as well as the mobilization of explosives, also the explosives services for defense as propellants for large munition and small munition, rocket, PETN and warplanes bomb.

PT MERDEKA COPPER GOLD TBK

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OUR CLIENTS LIKE OUR VALUES • Openness • Trust and Integrity • Passion for Quality • Teamwork • Responsibility for our Actions • Can-do: Safely PT Prasmanindo Boga Utama, established in 1985, is one of Indonesia’s preferred Catering and Camp Services partners in the Mining and Oil & Gas industries. We strive to be a best-in-class provider of contract foodservice and support services; renowned for our professionalism.

Better known in the market as PBU we predominantly operate in remote locations across the archipelago with leading Indonesian, Multinational and International clients.

Our vast experience can be applied to the most demanding of challenges and we are committed to consistently deliver superior service in the most efficient way, for the benefit of all our stakeholders.

PT. Prasmanindo Boga Utama,Wijaya Graha Puri Block F 33 - 34 Jl Wijaya II , Kebayoran Baru, Jakarta 12160, Indonesia +62-21-7206621 | www.ptpbu.com | pbujkt@ptpbu.com

Email: info@psi-ind.com Website: www.psi-ind.com

PSI Drilling Services & Support Consistently providing successful, cost effective drilling solutions throughout the South East Asian mining & energy sectors. Currently operating in Indonesia, Malaysia, Thailand, Laos & Myanmar

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with. Having centuries of experience locked into its workforce, Merdeka has been able to shrug off these risks, and ensure that the project has a positive impact on local businesses, the community, and the surrounding environment. No small order.

“We had the wettest year on record which hampered our earth works considerably,” Moorhead says. “We were able to handle those impacts and

delays by using our status as an owner-executor. I think if we were using an EPCM arrangement we could have had a large cost blowout.”

Unlike many players operating in the country’s mining space, Merdeka is fully owned by locals, with expats making up less than one percent of its workforce. But the company’s commitment to Indonesia doesn’t end there, as Moorhead explains: “On

2012

The year that PT Merdeka Copper Gold Tbk was founded

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SODIUM CYANIDE SUPPLY AND SERVICES • Dedicated production and supply to the gold mining industry • Secure, certified and robust supply chains • Unmatched safety and environmental performance • Sodium Cyanide handling and awareness training • Facility advice and technical support 24/7

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the community side we have a commitment to invest 1.5 percent of our revenue on community social responsibility (CSR) projects. “We are tailoring those projects to the needs of the people, which include capacity building, scholarships for kids, and helping businesses. We are in the early days of that.�

The company initially also granted 10 percent of its shares to the government of The Regency of Banyuwangi, which has effectively granted rights for local people to participate in these mining projects. The further intention of the share grant is to provide the community of Banyuwangi Regency with sustainable economic benefits from the gold mining project.

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Protecting local water supplies is essential, and no fewer than six dams have been constructed with this specific purpose in mind. Moorhead adds: “We have two process water dams which take water from the catchment, one storm water pond which is a clay and plastic lined, and three environmental control dams that collects all the runoff. These can also handle the extreme rainfall events up to three times over. “We

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also have a detox system to manage cyanide and arsenic levels in excess process water, backed up by mercury scrubbers if required. Merdeka has also spent over 15,000 man-hours on safety training and continues to build skills and awareness in this regard.

With the Tujuh Bukit Project now in production, Merdeka has its sights confidently set on the future dividends that a mine of this size and quality is certain to bring. Its shareholders

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own and control a number of other Indonesian mining companies with assets and are looking for where it makes sense to consolidate those under Merdeka. “In three to five years’ time we will have that copper project to pre-feasibility level and ready to construct and potentially multiple operating mines producing a significant amount of gold per annum. If we are successful at that we could be a $3 billion company.�

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FOREWORD: AN INTERVIEW WITH GUINEA’S MINISTRY OF MINES AND GEOLOGY

WE ASKED DIAKHABY MAÏMOUNA OF THE MINISTRY ABOUT ITS ROLE IN THE COUNTRY’S MINING AND HOW IT GOES ABOUT CHAMPIONING RESPONSIBILITY Produced by Richard Deane 83

G U I N E A M I N I S T RY O F M I N E S A N D G E O L O G Y

Tell us briefly about the history of the Guinean mining Mining and the role that the Ministry plays in promoting and protecting it.

Guinea’s mineral tradition is centennial. Since ancient times, Guineans have been exploiting gold; a fact notoriously recorded in the legendary voyage of King Kankan Moussa in 1325 to Mecca.

However, it was not until colonial times that the mining industry was developed and the minerals riches of the country discovered, uncovering in the soil:

• 4 0 billion tons of bauxite, at more than 40 percent content of Al203, which represent over a third of global reserves of bauxite • 2 0 billion tons of iron ore, the largest and highest grade of untapped deposit of iron ore in the world • 700 tons of gold, and between 30 to 40 million carats of proven reserves of diamonds.

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The diversity and quality of the minerals coupled with 320 km of seacoast on the Atlantic allowing for evacuation through deep-water ports has helped the development of the Guinean mining Mining.

Over the years, Guinea has risen to become both Africa’s largest producer and the World’s second-largest producer of bauxite. The mining industry accounted for about 15 percent of the country’s gross domestic product in 2016. Mineral exports of bauxite, diamonds and gold accounted for 80 percent of the nation’s total exports in 2016.

With the advent of its transition into a democratic state in 2010, Guinea, through its Ministry of Mines and Geology, has undergone a series of reforms to promote transparency, accountability and sustainability in the mining Mining. The Ministry is keen on protecting and ensuring the judicious use of these resources for sustainable economic growth and development.

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G U I N E A M I N I S T RY O F M I N E S A N D G E O L O G Y

Outline the importance of the forthcoming Symposium of Mines in raising the profile of Guinea.

The organisation of this event in 2017 is pivotal to the department’s mining promotion policy. The Symposium Mines Guinée (SMG) is designed for a better understanding of Guinea’s mining and investments potential.

The SMG will draw a clearer picture of Guinea’s business climate as well as the government’s strategic orientations and reforms.

The Ministry’s goal is to appeal to More information about SMG is available online:

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key mining players and connect qualified investors to Guinea’s largely untapped resources and promising projects. Industry leaders, junior companies, investors, institutions will receive detailed briefings on mining and exploration projects. In short the SMG will allow us to develop a strong networking value chain.

The aim is to organise the event on annual basis and make it West Africa’s definitive meeting place for mining professionals.

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Can you give us an overview of national industry developments and investment?

The Ministry of Mines and Geology has implemented comprehensive and courageous structural and institutional reforms to enhance productivity, accountability and sustainability in the extractive industry. Those steps include among others: The modernisation of its mining cadaster which is now available online at www. guinea.miningcadastre.org The creation of a one-stopshop for mining projects, with an internet portal covering all relevant information on permits and authorisations. In total, 107 permits and various authorisations issued by 13 ministerial departments during the year 2016 can be found on the portal.

The implementation of the Master Plan for Mine-Related Infrastructure Development, notably through the signing of the agreement to pool infrastructures

related to mines between major companies such as CBG, GAC, Rusal Dian-Dian and the State.

The establishment of a fully operational National Mining Commission for greater transparency.

The consolidation of these reforms initiated since 2010 has favored investment commitments in 2016 of more than $2.4 billion in the bauxite industry alone. Mining companies such as Dadco, Alcoa, Emirates Global Alumina, Anglo Gold Ashanti, Managem have all heavily invested in the Guinean mining Mining. Lenders such as IFC, Société Générale, BNP Paribas, UFK, Overseas Private Investment Corporation, Société Générale de France, Natixis, Crédit Agricole, ING, Africa Finance Corporation have in the past year alone financed many major mining projects in Guinea.

Production in the bauxite industry is predicted to reach 60 to 80 million tons by 2020. Production in the gold Mining is expected to reach 65 millions tons by 2020.

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G U I N E A M I N I S T RY O F M I N E S A N D G E O L O G Y

What are the Ministry’s regulations and/or views on the importance of environmental responsibility?

As stipulated in the Mining Code, any mining activity undertaken must comply with the legislation and regulations governing environmental protection and management as well as health.

In particular, any application for an authorisation or mining operation permit must include an Environmental and Social Impact Study in accordance with the Environmental Code and its implementing regulations as well as internationally accepted standards in this area.

Administrative requirements depend on the extent of the scheduled work, ranging from simple Environmental Impact Notice for an Exploration Permit to a detailed Environmental and Social Impact Study including for example a Hazard Study, a Risk Management Plan.

Aside from these regulations and legislation, the Ministry of Mines

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and Geology has implemented an environmental and social strategic evaluation (ESES) process, as a tool of sustainable development enabling a better consideration at the national level of environmental and social concerns.

The ESES aims to: (I) a ssist the Government in identifying nationally the environmental and social impacts of existing and future mining activities so as to avoid, so as to avoid, mitigate or compensate them by adopting an appropriate mode of governance; (Ii) p rovide the necessary information and knowledge to support ongoing dialogue with stakeholders.

Can you describe any current, relevant legislation?

Guinea adopted a new mining code on 9 September 2011, which was amended by the 2013 Bill. The new amended code has been widely acclaimed.

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How important is sustainability?

What is your major goal? Â The Ministry of Mines and Geology main goal is to transform the non-renewable resources of Guinea into sustainable development gains for all stakeholders. In that spirit, the government in partnership with the World Economic Forum, the International Finance Corporation, UNDP, the African Minerals Development Center and GIZ, launched and achieved the Responsible Mineral Development Initiative (RMDI) during 2016-2017.

The Ministry with its partners gathered together for seven months mining operators, local communities, civil society and the state around a shared mining vision to identify priority themes, areas for joint actions and approaches to sustainably advance Guinea mineral development. The recommendation that emanated from this initiative is informing the government’s national strategic plan for the mining Mining. The Ministry has a win-win and effective business approach to the development of the industry. In that respect, it has create a one-stop shop to promote greater efficiency in the delivery of non-mining permits and cut down on cost for mining companies.

For a sustainable approach to community development, the Ministry in collaboration with the PNUD, elaborated last month a CSR policy for the mining Mining.

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GUINEA GOES INTERNATIONAL Written by Wedaeli Chibelushi Produced by Richard Deane 93

We talk to SOCIÉTÉ MINIÈRE DE BOKÉWINNING AFRICA (SMB-WAP) about its fastpaced strict compliance bauxite mining project in Guinea. Managing Director Frederic Bouzigues and CEO of the group’s Winning Logistics Services Bosco Lau explain the process

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ccounting for 26.9 percent of the world’s total reserves, Guinea is the number one bauxite producing country globally. The small, yet-resource rich West African country exceeds competitors like Australia, and furthermore, Guinea is predicted to rapidly increase its bauxite exports in the coming years. Asian-Guinean consortium Société Minière de Boké-Winning Africa (SMB-WAP) plays a major role in this future.

The consortium, consisting of four international entities, is currently mining bauxite in Guinea’s Boké region, then transporting it to China. SMB-WAP prides itself on “fast-tracking”, but “with strict compliance” – that is going from excavation to export in minimal time. To find out how SMP-WAP balances speed, compliance, sustainability and spending, we spoke to Managing Director Frederic Bouzigues and Bosco Lau, CEO of the group’s Winning Logistics Services.

SMB-WAP was established in 2014. Frédéric Bouzigues, who has lead the group for two years,

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Members of the SMB-WAP consortium: • Winning Shipping Ltd • UMS International Ltd • Shandong Weiqiao • The State of Guinea

calls the consortium “a union of some of the strongest companies in their respective sectors”. Said firms are the Chinese Wei Qiao Group (biggest aluminium manufacturer in the world), Singaporean Winning International Group (transporter of 90 percent of Chinese bauxite imports), UMS Guinée SARL (leader in West African logistics) and the State of Guinea, which is a 10 percent shareholder in the project.

A year after forming, SMB-WAP’s first barge carried bauxite from

Guinea’s port of Katougma. Before the consortium could achieve this goal, it needed to acquire permits from the government. “We firstly obtained a surveying permit so that we could do reconnaissance ourselves on an area that was not limited to the main mining body area in Guinea, in fact the first mine we explored and exploited had never been fallen into the radar of any other party – when the others sit on the country’s high grade reserves for decades without

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VERMEER TERRAIN LEVELER SURFACE EXCAVATION MACHINES (SEM) DELIVER MORE THAN ROCK-PENETRATING POWER. ®

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SMB Winning is working with the Vermeer T1255 Terrain Leveler SEM in West Africa. At this moment they have 2 Terrain Levelers working in their mines in Guinea-Conakry. Since they started working with Vermeer in October 2016 they know the benefits of working with the Vermeer Terrain Leveler SEM first-hand, starting with their ability to bypass primary crushers. “Most material is less than 200mm and the biggest part even less than 100mm. This enables SMB Winning to

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to load the material directly on barges for ocean transport to the refinery in China”, says Ruben de Meijer, General Manager Vermeer West Africa.

Another advantage is the selective mining.

With the help of GPS and the patented tilted drum it is possible to follow ore-bodies and select the high-grade ore from the lower grade. “The patented tilted drum makes it also possible to make mining floors on-grade. Especially in the rainy season in Guinea-Conakry which enables SMB Winning to continue their operation”.

The Vermeer Terrain Leveler SEM is a very maneuverable and stable 2 track machine with a low center of gravity. SMB Winning has been cutting 21% / 12 degrees, but the machine is able to cut up to 36% / 20 degrees. “The bauxite mines in Guinea-Conakry are hilly, so this is an extremely important benefit. It allows you to mine in all places of the mine without preparation work needed”

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While starting to work with the Vermeer Terrain Leveler SEM SMB Winning had 3 Vermeer people on site to train the operators and technicians about operation and maintenance of the machine for 6 months.

After the training SMB Winning continued to operate with 1 supervisor on site (24/7 support). And both machines are operating 24/7 from day 1. By setting up operation this way they are able to react quickly.

downtime in the mining industry can cost a lot of money and it is our job as a partner to support the customer to lower operating costs” says Ruben de Meijer, General Manager Vermeer West Africa. “Vemeer West Africa also offers factory support for in-depth training and advice about mine planning, GPS sysems etc. to get our customers work most efficiently”.

The co-operation with SMB Winning has been a great partnership. “They give us the tips and ideas to improve the machine. Every environment has its own particular circumstances and from that we can learn as distributor and manufacturer”.

SMB Winning is using the Vermeer Terrain Leveler SEM for mining, but the machine can also be used to construct haul roads etc. as well. With the creation of a smooth surface it can increase the average speed of the trucks and lowers the wear and tear of these trucks. As the speed increases a lower amount of trucks is needed, which can lower the CAPEX. Vermeer also offer a wide range of trenchers and HDD drilling rigs, which can be used for utility installation (electricity, water, telecommunication etc.) and for drainage purposes. In addition, Vermeer also offers land-clearing equipment, like forestry mulchers, grinders and chippers to make your mine ready for operation in an early stage.

Vermeer machines are used to work in the most remote areas where you can’t take anything for granted. Vermeer West Africa is co-operating with SMB Winning to have a good parts availability on site to keep the machine running. “We know that 1 hour

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orporation. All Rights Reserved.

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doing anything, we said we ‘boleh’ (Malay word for ‘can do’)” Bouzigues says. “This took almost nine months. Subsequently, we obtained our exploration permit and followed the mining code to the letter, giving the government regular updates.”

SMB-WAP’s pooled financial resources (Lau notes that the project’s capital expenditure is $600700 million) and in-house competences enabled it to progress rapidly from this point. The consortium carried out rapid drilling campaigns with its own equipment and staff, and with the help of its on-site laboratories, staff were easily able to determine which areas were prospects. “Once the results were positive, we applied for the The year that SMBmining license since we did WAP was founded not need to waste time for raising construction funds, seeking consultants/contractors, nor securing offtake. This came six months after obtaining the research permit and starting the production phase,” Frédéric Bouzigues says.

To enable production, the consortium established two entities in Guinea. Frédéric Bouzigues explains: “We have Boké Mining Company (SMB), which mines bauxite in the Boké region, and Winning Africa Port SA (WAP), which manages all of the river port terminal operations on the Rio Nuñez for the shipping of bauxite.”

The bauxite mining industry does not use any

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products, processing, drying or burning. Thus, excavation is the sole element in the process.

Frédéric Bouzigues adds: “It’s worth remembering that at SMB we are dealing with people whose main task is logistical. We mine (moving ores from underground to the ground) the bauxite, load it in trucks that transport it to the ports, and from ports to boats it is transported by barges.”

With a field strength of more than 350 trucks (e.g.

HFO tank trucks, fuel tanks and cement tanks), UMS carries out the land transport process. The West African company’s trucks travel via the only road leaving the mine, and transport the bauxite to the port of Katougouma. After they arrive, The Winning Group takes over the process. Winning built the river port of Katougouma with consortium funds. The harbour covers an area of ​​41 hectares and has four quays for the 17 bauxite boats of 8,000 tons. Winning’s boats ship the bauxite to China to be processed.

According to Lau, trans-shipping is a major component of the process. “It is the world’s biggest transhipment system,” he says. “Similar standard operation models can be found in USA, Europe, Middle East, Australia and Indonesia. However, there is no match of scale.” Furthermore, the Winning Group’s 30 odd cape size vessels ensure ocean freight competitiveness and stability of Guinean products going to the far away PRC market.

After the bauxite arrives in China, it is finally processed into aluminum by the Wei Qiao Group.

“In all aspects, the process is in compliance of all regulations and CSR. We do this to unlock the country’s mineral and river transportation worth, and for the country to fund the development of other business sectors” BOSCO LAU

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Bauxite is transformed into alumina development of other business sectors, in a refinery, and then transformed like agriculture, industry and tourism.” into aluminium with a smelter.

The journey from bauxite to Custodians aluminium is achieved by “prudent, Frédéric Bouzigues explains that disciplined, quick and timely SMB-WAP is heavily involved with the decisions”. Lau explains: “This is communities at all of its sites (“near possible because of the mutual the river terminals, in extraction trust with the country areas, in the construction of [Guinea] and the people, living and logistics bases”). and the consortium’s The consortium own fund, mainly focuses on competence employment The number of jobs that and SMB-WAP is SMB-WAP has created skilled staff committed to to physically employ in all the construct the project localities in which the without the need of project operates. It has external assistance.” also built a literacy centre SMP-WAP stresses that which enables young people its “fast-track” process does not without training to gain skills, then be come at the expense of corporate hired by the consortium. In association social responsibility. “Fast-track is with the Jiantsu Marine Institute, the not achieved by cost saving,” Lau Winning Group offers courses to train says. “In all aspects, the process is future Guinean tugboat and oceanin compliance ‎of all regulations and going ship sailors: a worldwide market.

CSR. We do this to unlock the country’s Lau describes further community mineral and river transportation efforts. “We support the state worth, and for the country to fund the mineral reserves survey and initiated,

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sponsored and supported city planning studies

by Surbana of Singapore and the Boké ‎special economic zone. The consortium has also arranged for Chinese and Singaporean potential investors to explore investment opportunities in Guinea,” he states. SMB-WAP also uses its logistics system to bring reliable, competitive two ways flows of goods and materials between Guinea and Asia.

We ask how SMB-WAP ensures minimal environmental damage. “The environmental impact is minimal because we primarily have an operation which is exclusively excavation without transformation,” Frédéric Bouzigues answers.

“No drying, burning or adding chemicals. We are lucky to have bauxite treated as a block, which does not spread much dust in the air.” Moreover, making use of the unique high temperature high pressure high traffic volume operation environment, the consortium innovatively caused the haulage road to basically a dust free corridor.

Additionally, SMB-WAP has built programs for the rehabilitation and reorganisation of excavated areas.

It will replant crops such as cashew and palm trees.

The consortium also recognises that it has an economic responsibility to the people of Guinea.

Professional services network PwC monitors the payment of foreign exchange taxes from SMB-WAP to the state and SGS analysis of cargoes. “It is interesting to refer to an important point which was made precisely by PwC on the bauxite market,”

“The project has attracted and worked with stakeholders of international standard from all over the world” BOSCO LAU

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Frédéric Bouzigues says. “SMB’s entry into production has enabled Guinea to double its exports of bauxite from 2016 with about 12 million tonnes of bauxite already exported.”

SMB-WAP presents other impressive statistics. As of 2017, the consortium will increase its production, by adding one more port (the port of Dapillon) and another set of marine logistics equipment, making it the first bauxite company in the Guinea to export 30 million tons. Bouzigues expects this total to rise to 35 million

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from 2018 to 2022. In 2016 alone, SMB contributed US $30 million in mining and export taxes.

None of these achievements would have been possible without SMB-WAP’s partners. “The project has attracted and worked with stakeholders of international standard from all over the world,” Lau comments. The consortium is supported by the expertise and resources of its partners, which are all leaders in their respective sectors.

These partners include Vermeer (USA),

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Sinotrucks (China), Terex (Germany) and Bureau Veritas (France).

Despite substantial support from partners, SMB-WAP must retain some credit for itself. The consortium has defied borders in order to create an international team of mining experts, while priding itself on giving back. The consortium recognises the potential of Guinea and its people, thus it empowers communities and boosts the countries overall bauxite exports.

SMB-WAP plans to continue on the economically responsible trajectory.

“We have two river terminals, each with a processing capacity of about 25 million tons of bauxite. So, if we have enough reserves, our consortium will be able to reach a production of 50 million tons. Combined with taxes this would have a considerable impact on the country’s economy and its development,” Frédéric Bouzigues concludes. With this success and the consortium’s logistics strength, SMB-WAP has decided to kick off an intensive feasibility study of building a refinery in Guinea.

Beyond bauxite, the established infrastructure can and will be used for import of capital goods and CKDs (for the assembling industry to be developed), and the development of a regional hub in Boke for the West Africa region. For instance, fertilizers and pesticides can be imported cheaply and reliably to support a cashew nut project in the pipeline.

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