Παρασκευή, 18 Οκτωβρίου 2019

Current challenges and opportunities for the Minerals Industry (I)

[This article is based on a distinguished lecture delivered at an AusIMM Melbourne Branch lunch in June 2019]

The greatest challenge our industry faces today is the growing public antipathy to mining projects, exacerbated by events such as tailings dam failures and facilitated by social media. This challenge can be overcome by changing the way we operate through technical innovation and through better two-way communication with our community. We can accelerate the process of innovation through the free communication of ideas between mining companies, researchers, consultants, contractors and manufacturers. We also need to revisit the concept of value, and to question the drive for large developments to achieve economies of scale. A review of the history of innovation in mining gives insights into how changes occur and what the business case for innovation should look like. To understand the opportunities, we must explore the concept of the ‘adjacent possible’: the new and emerging technologies that have not yet been adopted by the minerals industry.

Our biggest challenge
People are never going to love the mining industry. There will always be vocal and committed groups who oppose everything we do. Logic cannot sway them, even as they buy cars, mobile phones and the many products of our society that depend on mining. If you are pro-environment, so they reason, you must be anti-mining. Increasingly, this message is taught in schools and reinforced through social media. It is even a theme in popular science journals and influences the selection of ethical investments.

Our sector will not be able to persuade our opponents that they are wrong. Instead, we need to change the way we go about developing projects and selecting technologies, and how we engage with the communities around mining operations. New mines will be approved and gain support only if we listen to the community and respond.

These days it can take decades to get a large project off the ground, and many will not be accepted by communities, however attractive the economics might be. Even small communities in remote, lightly populated areas now have the power, aided by social media, to stop development. And if a mining company works with a government to gain approvals without the support of the local community, it can expect ongoing opposition, demonstrations, active non-government organisation (NGO) attention and damaging social media campaigns that can lead to losing the project. In developing countries, the new owner may well be the government, using its army to suppress opposition.

 An important consequence of our poor image is that young people, particularly professionals, don’t want to join our industry. In turn, a shortage of experienced people is one of the causes of poor business performance and adverse community impacts.

Many of the operational problems the sector faces have emerging technological solutions. Highly selective mining, using rock cutting machines and belt sorting, will reduce the amount of rock going to processing and tailings storage. New dry processing techniques will reduce the size of wet tailings dams (though they may bring new dust control challenges). New processes will be found to turn some rejected material into useful products such as bricks, pavers and tiles.

Selective underground mining will greatly reduce the surface impact of mines and their associated waste dumps. Mining orebodies slowly, over several decades instead of as rapidly as possible, will establish community support and reduce initial capital costs. Yes, we can maximise net present value (NPV) by going in big, but that is the approach that has alienated society. Smaller mines need fewer workers and less accommodation, making on-site living more feasible. They use less power and have less impact on the environment.

The need to manage project risk was well understood in the past. A small mine was built, often with second-hand plant, and then cash flow from the operation, or equity funding from the now-reassured investors, was used for a series of expansions and optimisations. If there was a problem with the initial ore reserve or cost estimates, the exposure of shareholders to this problem was minimised and managed.

Project risk includes loss of social licence. A slow start and gradual build up allows the community to adjust, while allowing the mining company to understand and mitigate impacts, and take advantage of employment and training opportunities. With a measured , environmental impacts develop slowly and can be mitigated before they become serious.

In recent years, many project investment decisions have been made on the assumption that unlimited project finance is available. Due to global economic circumstances this is no longer the case, and a more traditional approach to project optimisation is needed. After considering risk, a modest-sized, staged development may provide better shareholder returns than the largest project that an orebody can theoretically support. Staged development may require multiple parallel processing circuits and smaller, more selective mining machines operating at higher cut-off grades.

Tailings dams
Our biggest unsolved issue is the use of tailings dams. History keeps reminding us that tailings dams can cause massive environmental damage and they can fail. Even the biggest and best mining companies cannot manage them safely all the time. From Bougainville and Ok Tedi in the 1980s to Vale’s two failures in 2015 and one in January 2019, tailings management is not just a public relations issue for our industry. Tailings dams are a real threat to communities and the environment. While dams continue to operate, our opponents are justified in their opposition.

Bigger mines mean bigger tailings dams, and the risk has increased by a factor of 20 every third of a century. According to Bowker and Chambers (2015), half of all the ‘Very Serious Failures’ in the last 70 years (to 2010) occurred in the last 20 years. Bowker and Chambers predicted more than 20 failures from 2010-2019, with a total unfunded public cost of $6 billion. They were right, and by 2019 we have exceeded that estimate. These losses are uninsurable.

Bowker and Chambers say that the cause of tailings dam failures is not only a technical problem, but rather that the combination of falling grades and higher throughputs have created large, fast-growing tailings dams at mines with slim operating margins, where safety factors may be pushed below an acceptable limit.

How can innovative technology help us?
Biologist Stuart Kauffman introduced the idea of the ‘adjacent possible’ in relation to prebiotic chemical combinations, which are all the possible combinations that could arise from a primordial soup. Author Steven Johnson took this further in his 2010 book Where good ideas come from, saying the adjacent possible is ‘a kind of shadow future hovering on the edge of the present state of things, a map of all the ways in which the present can reinvent itself.’ The electric battery revolution and digital transformation of industry (ie Industry 4.0) are two parallel streams that are coming together. High-capacity batteries and smart communication will rapidly change the way we operate. It’s like bringing together gliders and internal combustion engines in 1903 to create powered flight.

Past innovation in mining
In his thesis on the development of mining technology in Australia, Ralph Birrell (2005) classified innovations as micro-innovations (successive small changes) or as macro-innovations (radical new concepts without clear precedents). Sometimes, several important micro-innovations combine into what amounts to a single new concept. I would like to consider the origins of a few mining technologies and how they related to the adjacent possible.
  • 1712: Thomas Newcomen, an ironmonger who knew what was possible with new iron technology, developed the first practical steam engine for mine pumping.
  • 1808: John Taylor, a mining engineer, developed the Cornish rolls crusher after seeing an apple cider crusher.
  • 1831: William Bickford, a Cornish merchant, invented safety fuse from an idea he got by visiting a rope maker.
  • 1844: C Brunton, an American, created the first pneumatic rockdrill, an idea based on him seeing a steam engine.
  • 1904: Daniel Jacklin, at Bingham Canyon in Utah, applied railway technology, including locomotives and steam shovels, to revolutionise open pit mining.
  • 1905: Henry Sulman perfected froth flotation based on a body of new research, including observations by a brewer of bubbles rising in beer. There were many other patents, but Sulman won the IMM gold medal.
  • 1956: Robert Acre developed ANFO following analysis of the accidental 1947 Texas City ammonium nitrate explosion.
  • 1957: Joy Manufacturing Company produced the diesel powered, rubber tyred Transloader, the first underground load-haul-dump vehicle, based on knowledge of open pit loaders.
  • 1962: James S Robbins company developed the raise borer from machines they were already building for civil tunnelling.
  • 1966: Ket Carter operated our first mechanised decline mine at Cleveland Tin in Tasmania, using newly available underground diesel loaders and existing surface trucks.
  • 1971: Boliden mine operated the first autonomous diesel trucks underground, using mainframe computer technology that had just become available.

Current challenges and opportunities for the minerals industry (II)