Tag Archives: sustainability

ERM on executing the mining sector’s sustainability strategies

With sustainability close to the number one topic shaping the business landscape, the mining industry faces perhaps more scrutiny today than ever before. From stakeholder engagement to employee welfare and the emissions generated from using mined commodities, there is a spectrum of issues on which mining companies are judged. Not just by traditional critics such as NGOs, but increasingly by policymakers, investors and consumers themselves.

As a result, mining companies are seeking the advice of consultants that live and breathe environmental, social and governance (ESG) issues to adapt to this evolving backdrop (see the mining consultants focus in IM October 2021 for more on this).

In this regard, they don’t come much bigger than ERM, which calls itself the largest global pure play sustainability consultancy. With a remit that goes into strategic, operational and tactical challenges, the company’s services have been in serious demand of late.

Louise Pearce, ERM Global Mining Lead; Jonathan Molyneux, ERM Mining ESG Strategy Lead; Peter Rawlings, Low Carbon Economy Transition Lead; and Geraint Bowden, Regional Client Director – Mining, were happy to go into some detail about how the company is serving the industry across multiple disciplines.

In demand

According to the four, there is increasing demand for services from miners interested in energy/battery minerals (lithium, cobalt, nickel, copper, platinum, palladium and rhodium (PGMs)) on the back of rising numbers of new mines coming onto the scene, “shorter supply chains to customers”, the perceived need to secure domestic supply of these minerals, and requirements of “evidence of responsibly-produced certifications from industry organisations such as the Initiative for Responsible Mining Assurance (IRMA)”.

Such trends have been underwritten by a shift in both the requirements and considerations around the extraction of these minerals, according to Molyneux.

“In the last five to seven years, the main ESG incentives for change have come from access to capital (ie investor ESG preferences, especially in relation to catastrophic incidents),” he said.

“Over the last three years, we have seen a strong rise in expectations from downstream customers, particularly leading brands.”

Jonathan Molyneux, ERM Mining ESG Strategy Lead

Automotive original equipment manufacturers like BMW and Daimler are placing sustainability at the centre of their brands, according to ERM. Their initial focus has been on ‘net-zero’ driving/electrification – and they have made progress on this with several major electric car launches. They then shifted to examining the carbon emissions and ESG, or responsible practices, of tier-one and tier-two component manufacturers. The last step has been a full analysis of the ESG credentials of input materials right back to source, ie the mine.

“We see a shift from the historic lens of customers managing supply risk by sourcing from organisations which ‘do little/no harm’ (eg human rights compliance, catastrophic incident avoidance) to supply partners that can contribute to the ‘do net good’ or ‘create value for all stakeholders’ (ie communities, workforce, nature positive),” Pearce said.

Such a shift has resulted in more clients considering “circular thinking” in their operational strategy, as well as carrying out risk reviews and transformation projects focused on a company’s social or cultural heritage. Tied to this, these same companies have been evaluating their water use, biodiversity requirements and, of course, decarbonisation efforts.

It is the latter on which the steel raw materials companies predominantly have been looking for advice, according to ERM.

The focus has been on ‘green’ iron ore, low-carbon steel and ‘circular’ steel, according to Molyneux and Bowden, with ERM providing input on how companies in this supply chain can integrate sustainability into their strategy and operations.

On the thermal coal side, meanwhile, it is a very different type of ERM service in demand: mine retirements, closure/local/regional regeneration transitions and responsible disposals.

Delivering on decarbonisation

The mining industry decarbonisation targets have come thick and fast in the last 18-24 months, with the latest announcement from the International Council on Mining and Metals (ICMM) seeing all 28 mining and metals members sign up to a goal of net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement.

Many have gone further than Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company) emissions, looking at including Scope 3 (all other indirect emissions that occur in a company’s value chain) targets.

Fortescue Metals Group, this month, announced what it said is an industry-leading target to achieve net zero Scope 3 emissions by 2040, for example.

These are essential goals – and ones that all interested parties are calling for – in order to deliver on the Paris Agreement, yet many miners are not yet in the position to deliver on them, according to Pearce, Molyneux, Rawlings and Bowden.

“Miners need to look at decarbonisation at a holistic level across their operations and value chain, and cannot just delegate the net zero requirements to individual assets,” Rawlings said. “The solutions needed require investment and are often at a scale well beyond individual assets/sites.”

Much of this decarbonisation effort mirrors other industries, with the use of alternative fuels for plant and equipment, accessing renewable electricity supplies, etc, they said.

Process-specific activities can present challenges and is where innovation is required.

“These hard to abate areas are where a lot of efforts are currently focused,” Rawlings said.

Tied into this discussion is the allowance and estimates made for carbon.

There has been anecdotal evidence of miners taking account of carbon in annual and technical reports – a recent standout example being OZ Minerals inclusion of a carbon price in determining the valuation of its Prominent Hill shaft expansion project in South Australia – but there is no current legislation in place.

“We are seeing a broad spectrum of price and sophistication (targeted audience, knowledge level), but it is an active board level discussion for most clients,” Bowden said on this subject. “Most clients view this as market-driven requirements as opposed to a voluntary disclosure.”

This has been driven, in part, from the recommendations of the Task Force on Climate-Related Financial Disclosures, which many miners – including all the majors – are aligning their reporting with.

Some clients are also looking into scenarios to work around carbon regimes such as the Carbon Border Adjustment Mechanism, which proposes a carbon-based levy on imports of specific products.

Having acquired several companies in recent months focused on the low carbon economy transition – such as E4tech, Element Energy and RCG – ERM feels best placed to provide the technical expertise and experience to deliver the sustainable energy solutions miners require to decarbonise their operations.

“With these companies, combined with ERM’s expertise, it means we can support clients on the decarbonisation journeys from the initial strategy and ambition development through to implementation and delivery of their roadmaps,” Rawlings said. “We can support clients from boots to boardroom as they assess decarbonisation options and technologies; help them understand the financial, policy and practical aspects linked to deployment of solutions; and access the financing necessary to support deployment.”

ESG dilemmas

There is more to this evolving backdrop than setting and meeting ambitious environmental goals, yet, in ERM’s experience, the advice provided by consultants – and requested by miners – has historically been focused on individual ESG domains.

“This has often been driven by their realisation that their (miner’s) in-house policies and standards require updating,” Pearce said.

Louise Pearce, ERM Global Mining Lead

A siloed or disaggregated approach to ESG strategy development often reduces risk, but rarely generates value for the enterprise at hand, according to Pearce.

“What we have learned is that in order for organisations to create value, they need to focus on value drivers for the corporation,” she said. “These value levers are typically influenced by an integrated suite of ESG dimensions. For example, this could be looking at carbon emissions, connected with water use and nature, connected with local socio-economic development.”

“Sustainability and ESG are about understanding the inter-relationships between our social, natural and economic environments over the longer term. It cannot be about addressing one topic at a time or responding to the loudest voices.”

This is where ERM’s ‘second-generation’ ESG advice, which is driven by data and opportunities to create value as well as manage risk, is fit for the task.

“We are also finding that, at its heart, the central issue to second-generation ESG performance delivery/improvement for our clients is not just the strategy, but a willingness of organisations to reflect on their core values, how these have driven their traditional approaches and decisions and how they will need to evolve these if they want to achieve a genuine brand and reputation for ESG and achieve impact on the value drivers they have selected,” she added.

Such thinking is proving definitive in ERM’s mining sector mergers and acquisition due diligence.

“We have multiple experiences where clients have asked us to carry out an ESG review of a target portfolio, only to find that there is too great a gap between the target’s ESG asset footprint to align them with the client’s standard – or, that the carbon, water, closure or tailings profile of the target carries a too high-risk profile,” Molyneux said.

This is presenting clients with a dilemma as they want to increase their exposure to certain minerals, but are, in some instances, finding M&A is a too high-risk route. At the same time, the lead time to find and develop their own new assets is longer than they would wish for building market share.

Such a market dynamic opens the door for juniors looking for assets early in their lifecycles, yet it places a high load on the management teams of these companies to think strategically about the ESG profile of the asset they are setting the foundations for to eventually appeal to a potential acquirer.

“This is, in itself, a dilemma because, typically, the cash scarcity at the junior stage leads management teams to focus on the immediate technical challenges, sometimes at the cost of also addressing the priority non-technical challenges,” Bowden said.

Those companies who can take a strategic view on the ESG requirements of the future – rooted in a deep understanding of how to deliver change on the ground – will be best placed in such a market, and ERM says it is on hand to provide the tools to develop such an appropriate approach.

(Lead photo credit: @Talaat Bakri, ERM)

Maptek brings mining software knowledge to CEEC

Maptek has become the latest company to join the Coalition for Eco Efficient Comminution (CEEC) as a new sponsor, signing on for three years of sponsorship.

Announcing the Maptek sponsorship, CEEC CEO, Alison Keogh, welcomed the company to CEEC’s worldwide network of miners, mining supply companies and researchers working toward more sustainable practices.

“Maptek is the first mining design software company to sponsor CEEC’s important work,” she said. “It delivers advanced tech solutions to people making key decisions at mine sites, and has a truly global reach, which means Maptek can help drive large, positive impacts.

“High-impact Maptek technologies are used at thousands of sites worldwide, so Maptek is in a great position to work with miners to find and implement new ways to create value and reduce footprint. Together, we see exciting opportunities for mining companies to leverage technology as we all strive to decarbonise and achieve the best possible ESG outcomes.”

Maptek solutions cover the whole mining cycle, and the company’s vision is to change the way mining is done, forever, CEEC says.

Maptek CEO, Eduardo Coloma, said these aims can be best achieved by considering comminution outcomes from the earliest stages of mining.

“Building eco efficiency and sustainability into a mine’s operating model is more than possible,” he said. “The latest technologies allow us to predict energy and productivity improvements by linking the orebody to the plant. There are a lot of opportunities, and we hope to contribute to sharing the world’s leading practices and technology options to accelerate these through our support of CEEC.

“CEEC objectives to drive efficiency, productivity and sustainability throughout the whole mining life cycle are well aligned with Maptek aspirations.”

Coloma believes the industry can share site knowledge and practical ways to optimise energy consumption and reduce operating costs, with better downstream cost efficiencies.

He added that partnerships and collaboration are key to success. Maptek brings established partnerships with miners and collaborators, including CEEC Sponsor PETRA Data Science, and is looking forward to working with others to help share practical site optimisation and industry decarbonisation options, CEEC says.

Coloma said understanding its customers’ future energy plans now enables users to incorporate solar and wind energy usage into mine scheduling tools, and predict better plant and energy performance.

“Maptek solutions already include multi-objective optimisation for blast design and fragmentation prediction and analysis, all helping to drive improved productivity and performance from mine to mill,” he said. “Tracking fragmentation on a blast-by-blast basis helps operations improve mining performance.

“We’re keen to share inspiring ideas and solutions like this, to help encourage uptake of best practice, which is fundamental to increasing sustainability for the future of the mining industry.”

Keogh said Maptek coming on board as a CEEC sponsor highlights the huge potential to translate improvement goals around mining footprint and productivity, and connect them across the silos into real actions on the ground at mine sites.

She noted that industry now has advanced technology to make decisions that drive big impacts downstream: from blast design and execution, to ore-waste delineation, efficient excavation and fleet use, through to energy and water use in the mill and beyond.

“Technology options available now offer exciting and tangible options,” she said. “We can leverage advanced, practical software at sites, and extend this further with new knowledge from big data and digital twins. I look forward to mine sites sharing their work to not only test and plan, but also put in place these positive changes across mine sites worldwide.”

FLSmidth looks for sustainable gains with thyssenkrupp mining buy

The subtleties behind FLSmidth’s acquisition of thyssenkrupp’s mining business appear to have got lost within the financial community.

The company’s Denmark-listed shares, since announcing the transaction in late July, lost 16% of their value to August 20.

This downward move is hardly surprising when focusing on pure financials: FLSmidth is looking to acquire a company for an enterprise value of $325 million that is only expected to return to profitability two years after financial close.

Yet, this narrow train of thought discounts the well-timed strategy behind the move.

A combination of the two companies will undoubtedly create a leading global mining technology provider with operations from pit to plant. It will also see FLSmidth re-geared towards a mining sector on the up at a time when the cement business it serves is exhibiting flattish demand.

While this won’t be lost on analysts, most of them will only be able to factor in short-term profitability projections into their financial models, meaning, as far as they’re concerned, FLSmidth will be weighed down by the transaction until 2024.

Yet, for FLSmidth and mining, 2024 is practically ‘just around the corner’.

In FLSmidth’s recently released June quarter results it registered an order backlog of DKK16.7 billion ($2.6 billion), the majority of which was associated with mining orders. Of the backlog amount attributable to the mining sector, 16% would not be realised until 2023 and beyond.

This could mean many of the orders FLSmidth registered in the most recent June quarter will only be realised (read: delivered) in 2024, the year thyssenkrupp’s mining business is expected to be back in the black.

This is just one of the subtleties that may have got lost by shareholders fixated on the short term.

The second is how the transaction sets the company up as a mining sustainability leader at a time when the industry is calling out for one.

At the top end of the mining industry, the ability to decarbonise operations is becoming as – if not more – important as returning cash to shareholders. Every tonne of copper extracted and processed, and every ounce of gold mined and refined is likely to come with an associated carbon content/price in future years. The battery materials supply chain tied to the likes of lithium, cobalt and nickel will come under even more scrutiny.

Blockchain-type traceability platforms will mean investors and any interested party can interrogate where the raw materials came from and how they were produced.

These same miners will also be judged on how they use water, with freshwater use being rationalised in many regions where such resources are scarce.

FLSmidth, should the acquisition complete next year, is arming itself to compete in this brave new sustainable world.

The company started this journey all the way back in November 2019 when it announced its MissionZero program at its Capital Markets Day in Copenhagen.

Central to MissionZero is FLSmidth’s focus on enabling its customers in cement and mining to move towards zero emissions operations in 2030.

The OEM planned to do this by leveraging the development of digital and innovative solutions tied to sustainable productivity, offering its customers in the mining sector the technological solutions to manage zero emissions mining processes by 2030 – with a specific focus on water management.

For the latter, dry-stack tailings was the order of the day, with FLSmidth’s EcoTails® solution expected to reduce water costs, tailings dam risks and minimise environmental footprint. The development of the largest filter press plate ever built, the 5 m x 3 m AFP, was a signal of just how confident FLSmidth was on this emerging market trend becoming fully embedded across the globe.

Digital products such as SAGwise™, SmartCyclone™, BulkExpert™ and Advanced Process Control would, in the meantime, allow miners to become that more efficient with every resource (water, energy, etc) they used, again, improving their sustainability credentials.

Close to two years after making the MissionZero declaration, Thomas Schulz, CEO of FLSmidth, says the company has been seeing the program’s effects come through in its order book.

“Actually, this has been translated in orders for a few years already,” he told IM.

“When we look into sustainability, we define it as making productivity improvements. If you don’t adopt these sustainability solutions, you effectively have to pay more to keep operating at the same levels, or you have to stop operating – there is a productivity element to it, and quite a big one.

“For us, as a lifecycle provider, it is important that we offer to our customers at any point in time and any point of our offering, the right solution to make more money. That can be with dry-stacked tailings, tailings management, IPCC (in-pit crushing and conveying) systems, electrification of the pit, reducing emissions or dust, etc.”

Many of these solutions will enable companies to produce the same amount of product, or more, with the same input costs and energy draw, according to Schulz.

Coping with further restrictions on the industry’s access to freshwater will require more than step-change initiatives, and that is why the company is working on how its equipment can use “different types of water” and technologies that use less freshwater to ensure operations can abide by incoming legislation.

The company has been working on providing these zero-emission and resource-efficient solutions since 2019 to enable its customers to become sustainable operators by 2030.

“For many people, that sounds very long,” Schulz said. “In the mining industry, it’s not.”

Factor in the two-to-three years to build a pilot plant to prove such technology, two-to-three years to get a full-scale plant approved and the associated construction time, and a decade has passed.
Sustainability represents the ‘long game’ for mining OEMs, and technology is the key to achieving that sustainability, Schulz said.

Which brings us back to the thyssenkrupp mining business acquisition.

One of the big pillars

FLSmidth, in adding thyssenkrupp mining to its portfolio, is providing a whole host of decarbonised options for its mining customers to consider in their own sustainability drive.

It is adding mine planning expertise to its portfolio, ensuring that the IPCC and continuous surface mining technologies it puts forward are optimised for the operation at hand. These technologies are further complemented by semi-continuous and mobile crushing options from thyssenkrupp mining, adapted to the pit profile at hand.

Heavy-duty overland conveyors from thyssenkrupp mining complement other bulk handling solutions FLSmidth might be providing at stockyards or ports to reduce truck haulage and shift the transport dynamic to ‘green’ grid power.

“The culture in project service companies is you are the hero if you come to the table with the next big project,” Thomas Schulz says. “In product service companies, you are the hero if you come with the next big profit”

Then, when it comes to comminution, a crushing (including primary jaw crushers) and screening portfolio, plus smaller milling options and expertise in high pressure grinding rolls (HPGRs) through the globally renowned Polysius business, is bolted onto FLSmidth’s own crushing and grinding (including vertical roll milling technology) portfolio. This puts the combined offering up there with any global OEM around, while also providing the potential ‘dry grinding’ technologies the industry has been on the lookout for.

All these solutions come with sustainability benefits that can be felt throughout the mining value chain.

They also provide options and flexibility to an industry that cannot just suddenly retire a fleet of ultra-class haul trucks at a deep open-pit operation in favour of a fixed IPCC solution, or build a new process plant fitted with HPGRs to replace a typical SAG and ball mill grinding circuit.

Schulz said as much to IM.

“One of the big pillars of the whole acquisition lies in sustainability,” he said. “Normally, the process plants where we play big are all electrified, so if the energy resource coming into these plants is a green one, the process is already sustainable.

“When we look into the pit, in-pit crushing and transporting of material is where we can focus a lot.

“I’m not saying you can replace every truck, but some of the surface mines and the ones underground can be made significantly more continuous and sustainable from a transport perspective.

“thyssenkrupp is leading in that. They are quite big in the pit; we are quite big in the processing plant. Both, together, are complementary.

“If we can integrate the offering – and we will do – and make it more sustainable, that is a big step towards the 2030 MissionZero target.”

This increased spread of solutions will also provide FLSmidth with more opportunities to refine the entire flowsheet, providing further sustainability benefits to its customers.

“When we design solutions, or offer replacement equipment or a new process, we can now rely on expanded competences to look at what the best overall system for the entire flowsheet is,” Schulz said. “For instance, if we change the gyratory on a mine site and then look into the pit, we know how to size the equipment in the pit and the concentrator upstream.”

This increasing flowsheet focus must be complemented by an aftermarket approach that ensures the process remains efficient and sustainable throughout a product’s, solution’s or mine’s lifetime.

This was one of the obvious disparities between the two companies when the announcement was made in late July. It is also one of the biggest opportunities that comes with the planned transaction, according to FLSmidth.

Whereas capital business represented 37% of mining revenue in 2020 for FLSmidth, it was 66% of revenue for thyssenkrupp’s mining business. Services represented 63% and 34% of the two businesses’ 2020 revenue total, respectively.

Schulz has seen such a contrast – and opportunity – before, referencing his arrival at FLSmidth in 2013.

“When I came here to FLSmidth, it was actually quite similar,” he said. “I was at Sandvik for 16 years where the aftermarket was actually seen as the most important. They realised the importance of the customer relationship: the capital equipment sales team may meet the customer for a few hours per year, but the service technician has that interaction over weeks and months in terms of aftermarket.”

He also recognises the cultural shift needed to capture many of the profitable aftermarket dollars that the company is forecasting with the planned acquisition.

“The culture in project service companies is you are the hero if you come to the table with the next big project,” he said. “In product service companies, you are the hero if you come with the next big profit.

“You need both – we need profit, and our customers need profit to invest, while you need the projects to spur these aftermarket opportunities.

“We calculated what the aftermarket potential of the thyssenkrupp mining business is and understood it was not covered as they were all looking for the next big project, which we understand.

“But this is not what we will accept in the future. We have to have a strong aftermarket and strong customer link.”

Which all comes back to MissionZero.

“If you focus on MissionZero, then you invest there where you can impact MissionZero. Wherever you have aftermarket, you impact MissionZero. Where you don’t have aftermarket, you don’t impact MissionZero.”

At the same time, Schulz is not losing sight of the company’s end goal with all the business it coordinates in the mining sector.

“Whatever we do with the customer, they have to be more efficient, more productive and make more money.”

It just so happens that in doing this, the mining sector will become that much more sustainable.

Beca and Black & Veatch to collaborate on sustainable solutions for Australian mining sector

Beca and Black & Veatch (B&BV) have announced a collaboration to deliver sustainability and decarbonisation solutions, combined with a strong local presence, to service minerals and metals operations across Australia.

Beca is an employee-owned professional services firm that has been delivering engineering, advisory and management consulting services across Asia-Pacific for over 100 years, while Black & Veatch is an employee-owned global engineering, procurement, consulting and construction company with, it says, a more than 100-year track record of innovation in sustainable infrastructure.

“Clients recognise the need for more sustainable operations and more efficient resource management approaches from extraction and processing through to delivery,” Paul Language, a Business Director at Beca, said. “Our collaboration brings sustainability expertise, at scale, to mining operations across Australia.

“We understand what it takes for miners to succeed in Australia.”

Jim Spenceley, Senior Vice President of Black & Veatch’s Mining Business, added: “Clients have set ambitious sustainability and decarbonisation goals and we are helping them develop and implement the sustainability roadmaps that will make these goals attainable. For many years B&BV have collaborated for the benefit of clients in New Zealand and we look forward to extending our services to Australia.”

Part of B&BV’s strength is a strong shared culture. Both are employee-owned, a business model that has been delivering success for more than a century for each organisation. Both companies are committed to the safe delivery and management of critical infrastructure and embracing reconciliation in the minerals and metals sector.

“Sustainability and responsible corporate stewardship are core to both companies’ operations, in the way they act and the projects they deliver,” they added.

Jeffrey Dawes looks forward to a sustainability-focused MINExpo 2021

As the world’s largest mining event, MINExpo INTERNATIONAL is used as an industry barometer for the health of the sector. While this year’s event will be a little different given the impacts of COVID-19, the anticipation continues to build for an in-person gathering that will highlight the biggest and best mining has to offer.

Ahead of this year’s event, sponsored by the National Mining Association (NMA) and due to take place on September 13-15, in Las Vegas, IM put some questions to Jeffrey Dawes, MINExpo INTERNATIONAL 2021 Chair. Dawes is also VP of Komatsu’s Global Mining Business Division and President and CEO of Milwaukee-based Komatsu Mining Corp.

IM: How will this MINExpo be different to previous editions? How are companies planning to ‘open up’ their exhibits and presentations to the widest audience possible considering COVID may restrict some of the in-person international attendance seen in previous years?

JD: MINExpo offers the mining industry the unique opportunity to experience, in person, the newest mining equipment and talk directly with the technical experts behind the most innovative technology and solutions. NMA has done a great job adapting plans this year as COVID restrictions have evolved, so they were prepared for a very different experience if need be, but fortunately it looks like we will be able to have a fairly normal show experience, albeit from a North American perspective – we will be missing some of our international friends who cannot join this year’s event. Part of what has always made our industry great is a strong sense of community, so it will be great to be able to get together in person after such a long time.

To accommodate our friends and colleagues who won’t be able to make the show in person, exhibitors this year have plans to utilise the latest in virtual technology to showcase what will be at the show. Exhibitors will also be able to upload product information, videos and other materials to the online directory, which will be available and open to anyone for a year after the show. Finally, the Opening Session will be live streamed.

Jeffrey Dawes, MINExpo International 2021 Chair

IM: What will be the big innovation themes at the event and what do these themes say about the future direction of the mining industry? 

JD: Digitalisation, electrification and automation will be the big innovation themes this year. Full enterprise optimisation can only be achieved by connecting tasks, processes, systems and people across the value chain. Solutions that leverage digitalisation, electrification and automation are the key to that full enterprise optimisation. They also play a crucial role in creating sustainable systems that support society’s growing needs in the most environmentally responsible ways.

IM: In a general sense, what positive impacts do you think COVID has had on the mining sector’s innovation/technology uptake? Has it accelerated the rate of innovation through necessity (remote working, increased HS&E considerations, shift to cloud-based network infrastructure, etc)? Is this likely to shine through at MINExpo in terms of what companies are showcasing and talking about?

JD: COVID really gave the mining industry a chance to reflect on its goals and take a deeper look at the tools now available to help it reach those goals. I think it also helped us gain a better understanding of the importance of aligning our business objectives – to extract the minerals needed by society – with society’s need for us to do that in the most sustainable, efficient and least intrusive ways possible. I’m certain that the products and solutions presented by the exhibitors at MINExpo this year will centre on the innovations and technology available now and in the near-term future that will help mines meet both their own and society’s needs.

IM: How do you see Komatsu’s contribution shaping/influencing the event? Are your solutions likely to be the ‘talk of the show’?

JD: We think so, yes. This year at MINExpo, Komatsu will focus on the power of smart technology and connected systems, the freedom of interoperability on an open platform, and the equipment and solutions that will help our industry move forward toward a more sustainable future. I’m particularly looking forward to sharing our newest haulage concepts, which are designed to help meet our customers’ needs for autonomy and the drive toward zero emissions. We’re also excited to give attendees their first in-person look at our newest surface blasthole drill, with 122,000 lb (55,338 kg) of pull-down force, the ZR122. Also, our newly branded WE1850 Gen3 wheel loader with switched-reluctance hybrid drive technology, with a bucket capacity of 60 tons (54 t), and our latest offerings for underground hard-rock and soft-rock operations.

Ultimately, at Komatsu we believe in providing our customers with the technology, solutions and flexible support they need for the lifecycle of their equipment and mining operations. Our customers need a reliable partner they can trust with whom to invest for the future of mining. We aim to be that partner.

IM: Aside from being a topic of discussion on the stands and in the conference rooms, how will sustainability be on show at MINExpo? Will this be the most ‘sustainable’ MINExpo yet in terms of organisation, emissions, etc?

JD: Mining has always been an essential part of keeping modern society moving forward. As we say, if it’s not grown, it’s mined. As an industry we have to focus on how to evolve to continue to meet those needs sustainably. The mining industry is already finding new ways to extract the minerals needed to meet the requirements of the world’s more energy conscious and environmentally friendly future. I am sure that many of the exhibits at this year’s show will showcase those new sustainability-focused solutions.

IM: Are you able to provide any preliminary expectations of attendee numbers?

JD: Varying country restrictions – and the US’ own restrictions – are obviously making this a year unlike any other, placing unusual limitations on attendance. However, we were pleased to have nearly 90% of our 2020 planned exhibitors re-book for this year and new exhibitors are booking space every day. We’re looking forward to welcoming representatives from 32 countries as both exhibitors and attendees. We hope to see even more attendees register as vaccination rates continue to rise, case numbers fall and an increasing number of countries lift travel restrictions as evidenced by recent changes in Canada.

International Mining is a media sponsor of MINExpo INTERNATIONAL 2021

Drilling innovation directs Alamos to golden goods at Island

John A McCluskey, President and CEO of Alamos Gold, tends to look forward, not back, when talking about strategic decisions the Toronto- and New York-listed miner has made during his 18 years heading up the company.

When discussing the acquisition of Richmont Mines, which included the flagship Island Gold Mine asset in Ontario, he allows himself a brief rumination on the market’s first impressions of the deal: “We acquired the asset for around $620 million in November of 2017. The consensus view in the market was we had overpaid for the asset.”

That consensus view considered 1.8 Moz of mineral reserves and resources and production around the 100,000 oz/y mark, among other factors.

“In less than three years, we had Island over the 4 Moz reserve and resource threshold – we’re now nearer to 5 Moz – and the consensus valuation for the asset from analysts covering us is around $1.4 billion.”

That new valuation factors in a production rise – the company is anticipating gold output of 130,000-145,000 oz this year – and long-term growth prospects for the asset. The latter is evidenced by an Island Phase Three Expansion study published last year that envisaged a 2,000 t/d operation (currently 1,200 t/d) able to produce 236,000 oz/y starting in 2025.

While McCluskey says the company was aware of these growth prospects back in November 2017, most market observers will be surprised they have been proven up so quickly after the Richmont Mines transaction.

They probably underestimated what the use of surface directional drilling could do at Island.

Originally leveraged by Richmont Mines’ Chief Geologist and now Island Gold Chief Geologist, Raynald Vincent, back in 2015, the exploration technique has allowed Alamos to successfully step out from and infill holes Richmont and predecessors previously drilled.

Scott R.G. Parsons, VP of Exploration for Alamos, says surface directional drilling, in combination with the exploration team’s understanding on the controls on gold mineralisation at Island and Alamos’ financial backing for exploration, has helped the company grow the asset rapidly.

“The significant resource and reserve growth at Island in the last three years – adding 3 Moz net of 500,000 of mining depletion – was largely driven by surface directional drilling,” he told IM. “We could not have moved the asset forward in such a significant way without it.”

The use of what Parsons says are “standard” surface drill rigs and Devico’s DeviDrill™ steerable wireline core barrels are allowing the company to hit mineralisation far below the mine’s existing underground infrastructure. The DeviDrill tool can make multiple branches from a pilot hole, dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods. At the same time, no time is lost on moving the drill rig between branch holes, as the core barrel can be steered from surface to complete the optimal drill patterns.

The DeviDrill tool can make multiple branches from a pilot hole, dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods (photo: Devico)

The company has drilled 240 surface directional drill holes at Island for about 200,000 m of drilling using only 27 drill sites, Parsons explained.

“Using conventional surface drilling, the 240 holes would have required significantly more drill sites,” he said.

This would have involved moving the rig more frequently, making the process that much slower and expensive.

Instead, thanks to this directional drilling technique, the company is sitting on an additional 3 Moz of gold resources and reserves garnered in the last three years. This has come with a discovery cost of just $11/oz.

Accuracy, as Devico indicated, is another benefit of this technology.

“Surface directional drilling is not only more effective than standard drilling practices, but we can hit our targets with 1% accuracy,” Parsons added. “So, if we’re drilling a 1,500 m hole, we can typically intersect our target within 15 m from plan, 1,500 m downhole. This predictable drilling spacing is critical for defining a mineral resource with the appropriate confidence level.

“You’d never be able to do that with standard surface drilling.”

This technique is not a silver exploration bullet, though. According to Parsons, it does not work everywhere.

“It really all hinges around the quality of the orebody and our understanding of the deposit and the controls and the mineralisation,” he said. “Knowing we require a certain drill spacing to be able to define inferred mineral resources, we strategically target the down-plunge extensions of the ore shoots.”

At Island, these ore shoots – which are the high-grade portions of the deposit – are laterally extensive in the lateral and vertical sense, Parsons explained.

“With the surface directional drilling, we are able to specifically target these down-plunge extensions,” he said. “With one or two pilot holes and branch patterns, we can evaluate a large area down-plunge and along strike of the existing mineral reserves and resources. In some cases, other gold deposits can have ore shoots that are less predictable, or are not as extensive, so it would be a challenge to apply surface directional drilling without having a strong understanding of the controls of these shoots for targeting.”

And, it should not be forgotten, it requires an investment in exploration that goes beyond simply reserve and resource replacement on an annual basis. Richmont, a much smaller company, was unable to bankroll such a strategy.

Alamos has made a commitment to do this, as evidenced in the 16-year mine life outlined in the Island Phase III study and the $25 million it intends to invest in exploration this year.

The use of surface directional drilling looks set to continue paying off beyond this study, with the company recently drilling its best-ever hole to date by leveraging the technique.

Drill hole MH25-08 – 71.21 g/t Au (39.24 g/t cut) over 21.33 m – in addition to MH25-04 (28.97 g/t Au (26.89 g/t cut) over 21.76 m) have true widths approximately four times greater than the average width of the large high-grade inferred resource block defined up-plunge of them (photo: Alamos Gold)

Drill hole MH25-08 – 71.21 g/t Au (39.24 g/t cut) over 21.33 m – is the hole in question. This hole, in addition to the previously reported MH25-04 (28.97 g/t Au (26.89 g/t cut) over 21.76 m), have true widths approximately four times greater than the average width of the large high-grade inferred resource block defined up-plunge of them. This, the company said, demonstrates the zone has widened in this area, providing even further potential beyond the company’s current growth plans.

“That one – MH25-08 – is the best drill hole ever drilled at Island,” Parsons said. “And that is after 1.3 million metres of drilling and over 7,000 drill holes dating back nearly 100-years.

“That speaks to the potential of this deposit to continue to grow through exploration, and also highlights the prospectivity of the Michipicoten Greenstone Belt.”

More to come

With 27,500 m of surface directional drilling scheduled for 2021 – and only 6,683 m carried out as of May 31 – more of these high-grade intercepts could soon come to the fore.

And Parsons says the company can continue to use surface directional drilling some 500 m below where it is currently drilling down to at Island.

On top of that, the company, having established the necessary underground exploration infrastructure, is equipping its underground drill rigs at Island for directional drilling, with 24,000 m of underground directional drilling planned this year (3,233 m completed as of the end of May).

“This is allowing us to reduce our cost per metre compared with surface directional drilling and allowing us to drill more targets in a shorter amount of time,” Parsons said. “We will continue applying directional drilling technology as long as the orebody is continuing at depth to drill off those ore shoots.”

At Young-Davidson, the company’s other core asset in Ontario, Canada, the company is also making plans to use underground directional drilling.

“One of our plans going into 2022 is to evaluate opportunities to utilise directional drilling from underground exploration drifts established in lower and mid mines at Young-Davidson to target mineralisation down-plunge at depth,” Parsons said.

More broadly, Parsons thinks the company’s exploration team can leverage their understanding of the technology at other assets.

“For us, it is a competitive advantage,” he said. “With a solid geological understanding of the deposit you are looking at and an understanding of the application and the benefits of directional drilling, we can recognise opportunities of what could be occurring at depth where others might not see potential until well into the future after underground infrastructure is established at depth.”

There are obvious cost, time and accuracy benefits to using directional drilling, yet there is another benefit that may get lost along the way.

Without the need to constantly move the surface drill rigs between drill pads, the footprint of these rigs is reduced.

McCluskey says the technology has brought another ESG advantage to Island too.

By being able to quickly drill off more targets and convert these into the resource base, Alamos has been able to think long term with its Island Gold Phase III Expansion and justify the expense of a shaft and paste backfill plant.

This comes with a 35% reduction in emissions compared with using the mine’s existing ramp and diesel-powered truck haulage, he said, explaining that much of the Ontario grid is powered by renewable hydroelectricity.

“This technology has given us the exploration success that has been converted into scale and allowed us to think longer term and afford the infrastructure to make it a ‘greener’ operation,” he said.

With such a long list of benefits, more companies will be looking at directional drilling to prolong the life of their assets and make long-term decisions that make economic and sustainable sense.

Trevali weighing battery-electric vehicle use in expanded Rosh Pinah plan

Trevali Mining has flagged the potential use of battery-electric vehicles at its Rosh Pinah underground zinc-lead-silver mine, in Namibia, as one route to further reduce the operation’s greenhouse gas emissions if an expansion of throughput goes ahead.

Writing in its just-released 2020 Sustainability Report, the company said the Rosh Pinah expansion, known as RP2.0, could lead to an increase in the underground mining fleet and, with that, the potential use of battery-electric vehicles.

In addition, the company said it was considering increasing the capacity of the underground mobile fleet from 30 t to 60 t trucks for more efficient transportation of material to surface, resulting in better fuel efficiency and reduced ventilation load. The company was also looking to use solar power for at least 30% of the annual energy consumption as a starting point – an aspect the company is close to achieving after signing a a 15-year renewable Power Purchase Agreement with Emerging Markets Energy Services Company (EMESCO) for the supply of solar power to Rosh Pinah in April.

In 2020, Trevali published a positive prefeasibility study on RP2.0, which is projected to increase the throughput of the mine from 700,000 t/y to 1.3 Mt/y, with an 11-year life of mine, post-expansion.

Trevali intended to achieve this through the modification of the processing plant, construction of a paste fill plant, and development of a dedicated portal and ramp to the WF3 deposit.

A feasibility study for the RP2.0 project is underway and is expected to be completed in the second half of this year, with an investment decision thereafter. If approved, construction could commence in the March quarter of 2022, with commercial production potential achieved by the June quarter of 2024, Trevali said.

Metso Outotec takes next sustainability steps with Planet Positive

Metso Outotec has introduced a new approach to sustainability that, it says, covers the environmental, social and financial aspects of the topic area.

Its ‘Planet Positive’ efforts enforce the company’s purpose to enable sustainable modern life, the company says, building on Metso Outotec’s commitments to limit global warming to 1.5°C, with targets validated by the Science Based Targets initiative.

To serve customers’ sustainability needs and to increase the size of its ecological handprint, Metso Outotec focuses on further growing its sustainable offering. The Planet Positive portfolio focuses on the most environmentally efficient technologies – of which there are more than 100 – in the company’s current portfolio, responding to the sustainability requirements of its customers in the aggregates, mining and metals refining industries. The customer requirements relate to energy or water efficiency, reduction of emissions, circularity and safety, it says.

Correspondingly, Metso Outotec focuses on minimising the environmental impact of its own operations and supply chain to diminish its ecological footprint. Already today, Metso Outotec’s handprint is significantly bigger than its footprint, it says.

Piia Karhu, SVP, Business Development at Metso Outotec, said: “We have a wide Planet Positive offering available for our customers and, with strong R&D focus, we continue to strengthen our sustainable offering for aggregates, mining and metals refining industries. We also have high targets for sustainability in our own operations and supply chain. There is a growing demand in our industry for environmentally efficient solutions.”

AFRY strengthens its digital offering with ProTAK acquisition

Engineering, consulting and design company AFRY is to expand its digital offering for process industries with the acquisition of Sweden-based ProTAK.

ProTAK’s web-based software for production optimisation will support AFRY’s strategic ambition within digitalisation and sustainability, as well as further strengthen the AFRY Smart Site digital product portfolio further, AFRY said.

“ProTAK’s web-based software is designed for production process continuous improvement and aims to increase production efficiency,” it explained. “The software measures the effectiveness of industrial plant’s machines to enable analysis and optimisation of the production processes. Together with AFRY’s production support software, AFRY Pulse, this will improve process industry customer production even further.”

The acquisition follows the purchase of ITE Østerhus AS earlier in the month, a Norway-based company that specialises in electrical engineering, automation and digitalisation for industrial customers. ITE Østerhus’ largest market areas are smelting plants and process and food industries.

David Andersson, Manager of Business Unit Digitalisation, AFRY Process Industries, in Sweden, said of ProTAK acquisition: “There is a strong demand for digital solutions within the process industry sector to reach sustainability goals by improved production efficiency. With this co-operation, we can jointly develop our offering further to support our customers even better in this constantly changing environment.

“We see great potential and synergies by combining the expertise and digital offering from both companies.”

Per Gannå, CEO at ProTAK, said becoming part of AFRY would allow the company to further develop its products and expand its offering to global clients.

“We have developed the digital offering and are now ready to take the step to the next level,” Gannå said. “We look forward to the opportunities we can create together.”

Metso Outotec strives for cost synergies, emission cuts with warehouse optimisation

Metso Outotec says it is proceeding with its program to consolidate its warehouse locations and transportation processes for spare parts, wear parts and related services globally, targeting increased availability, improved customer service and reduced CO2 emissions.

The optimisation of logistics is included in the company’s €120 million ($146 million) cost synergy target, accounting for more than €20 million of this amount.

The combined Metso Outotec network has covered more than 40 distribution centers. Once the network is optimised, the company will have 18 warehouses or distribution centres located in all main customer markets, it says.

The new operating model is using strong partners who have recognised global capabilities in providing competitive warehouse services, Metso Outotec added.

Consolidation work in Asia, Africa, China and Europe will be concluded in the near future, the company says. Metso Outotec already announced that warehouse operations in Finland will be consolidated and outsourced, and a new warehouse will be established in Helsinki. Simultaneously, the current spare and wear parts warehouse in Tampere will be closed.

The new model will be fully implemented by the end of the first half of 2021, it says.

Jarkko Aro, Senior Vice President of Customer Logistics at Metso Outotec, said: “Our target is to enable world-class logistics with easily scalable operations. Flexible, state-of-the-art warehouse operations will allow orders to be collected and dispatched to customers directly from central warehouses. The new model enables considerable savings in the end-to-end freight costs, streamlines transportation, and significantly reduces CO2 emissions.”

Aro added: “By the end of the third (September) quarter of 2020, we already achieved a 7% reduction of CO2 emissions in our logistics compared to 2019. We are extremely happy to be at the forefront with our CO2 reduction targets.”

Metso Outotec has announced it is targeting a net positive impact on the planet with a commitment to the 1.5 °C journey. This will be implemented through a sustainable offering, innovations and actions, and be measured by Science Based Targets aiming at a 50% reduction of emissions in its own operations by 2030, compared with 2019, and a 20% reduction of logistics emissions by 2025.