Industry Q&A: Engineering Challenges in the 2016 Mining Industry
With such pressure on CAPEX projects in the current climate, much of that falls directly onto the shoulders of engineering firms, who are pushed to consistently innovate and evolve in order to meet ever tightening cost and productivity demands. In light of that, Austmine took some time to catch up with Jeff Sterling, Managing Director at Intech Engineers on a few key areas within mining engineering. Jeff is a mechanical engineer with in excess of 30 years’ experience in projects, feasibility, design and construction, contracts and commercial processes for many parts of the mining industry including, gold, copper and poly-metallic, bulk commodities iron ore, coal and bauxite.
With it being more critical than ever to take a “life of mine” mentality when designing, constructing and engineering a new mine, how do you incorporate that into a mine or processing plant’s design?
We are seeing the first generation of mines coming through with full environmental liability for closure and rehabilitation, for example MMG’s Century mine. The costs of this can be quite significant and are being factored into the development of all current and future mine projects in Australia. The capital investment market is well known to be dismal in mining currently, and we are seeing world-class mining projects struggling to achieve the investment they need. Capital costs are very much in the spotlight as a result, which is great for us because we have a long history of delivering robust, fit-for-purpose projects with low capital intensity. The low-capital approach is changing the approach junior miners need to take to successfully achieve funding, where what might have been a billion-dollar project for best returns in the past, has now changed so the client may take a minimum-scale approach to establish a low-cost mine. The goal would then be to establish some cash flow and then scale up production afterwards once the project has demonstrated the risks are sufficiently low for more investment. We are helping one of our clients do exactly this at the moment. The early stages of the life of mine need to be flexibly designed so they can be scaled up, as well as the end-of-life costs fully accounted for.
R&D and collaboration within the mining industry is receiving a lot of attention at the moment – how does Intech Engineers see the future of the sector being influenced by these? How important are they to securing its future?
There is a lot of opportunity in the innovation and R&D space at the moment. The potential benefits of automation in the mining industry in terms of safety and productivity benefits are huge, and it appears that in contrast to the junior mining space the appetite for investment in R&D projects is quite high. We are involved with a couple of quite interesting automation projects at Intech at the moment, and hopefully within a few months we will be able to announce more information about them. Watch this space! We believe that collaboration is key to developing useful new innovation into the mining industry. Large organisations are struggling to deliver automation quickly and at a price point that allows its wide spread uptake. More agile teams are able to progress and implement new tech faster and more successfully. As a trend this can be seen with the US acknowledging that small groups can deliver in this space and running the DARPA challenges (Defence Advanced Research Projects Agency). Another trend is the rise of mining in formerly third world economies but now with first world management and technology. When mining in Africa for example with high grades and low labour costs is coupled with new technology the challenges for mining in Australia will be even greater. For example, the Northparkes mine boasts autonomous loaders feeding the ROM as leading edge for Australia but this same system is being rolled out at the Randgold Kibali mine in the Congo.
More mines, both here in Australia, but particularly overseas, are being constructed in more remote locations. What challenges does this present for an engineering firm such as yourselves? What additional considerations are there for remote mines?
We have been involved in some quite remote projects recently, probably the most remote being an underground pumpstation and underground refuelling facility for the Kibali gold mine in the DRC in central Africa, which is over 1700 km inland from the capital Kinshasa. We tailor our solutions so that they require a minimum of operator intervention, using PLCs and remote telemetry and data logging so that we can often solve any problems by logging in remotely to a pump station or other piece of equipment and understand and resolve issues quickly. This has worked for a number of past projects including significant mine infrastructure at Western Areas’ Forrestania project, a large water management system at Glencore’s McArthur River Mine, and others. The best approach is to ensure the communications setup is done properly and the design is robust in the first place, requiring a minimum of operator intervention and low ongoing operating costs.
With commodity prices continuing to fluctuate, what do miners need to bear in mind when conducting operations cost modelling? What should be incorporated into any reviews?
One of our strengths here at Intech is that we don’t just take a technical view of particular engineering problems to be solved. We take a wider, holistic view of our clients’ projects as a whole, and come up with solutions that are aligned with our clients overall objectives, whether that be lowest capex or opex cost, best project return, maximum plant yield, maximum plant availability, and so on. We constantly challenge ourselves with “What is the real problem we are solving?” and look to help our clients achieve their goals. We have detailed cost models which we regularly use to help clients who might have a potential mining project, to quickly determine at a high level whether a project is likely to be viable. We would always recommend a risk review as part of a project review process, we find that we can often add significant value and address significant risks for our clients this way.