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Scratching the surface - with new technology

While mining might seem to be a slow-changing industry, mining companies have made great advances in technology. Today they can find deposits without drilling holes, use less water and energy to extract and process minerals, and make the job safer for workers than ever before.

One of the fastest developing areas is in so-called remote sensing, which allows prospectors to find deposits at increasing depths without physically drilling into the earth but rather by measuring underground electromagnetic properties either from the ground or from the air.

It was remote sensing that allowed Hudbay Minerals Inc. to first identify an ore deposit in the Flin Flon greenstone belt in northern Manitoba that has now been dubbed the Lalor project which will soon become a full-fledged zinc, gold and copper mine built at a cost of $560-million.

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The deposit, which will take 20 years to fully exploit, was discovered in 2007 lying at 500 metres to 1,500 metres below the surface. The Toronto-based mining company used a combination of high-powered transmit loops and extremely long remote sensing periods to peer deep into the earth.

"We were able to image the ore body where we wouldn't have been able to with previous technologies," said Alan Vowles, principal geophysicist with HudBay.

Lalor is a huge find for the company. It quickly found that the deposit was rich in zinc. Further study revealed the deposit was rich in gold as well as containing copper and some silver. "There is a huge amount of gold in [Lalor]" he said. Lalor is expected to nearly double the company's gold production and bump up its zinc output by 55 per cent.

In the five years since Mr. Vowles's team found Lalor's riches with a makeshift combination of equipment, the ground-based electromagnetic (EM) technology has made further leaps forward. Powerful computer processors now quickly give ore body imagery that Hudbay achieved through ultra-long sample times. A number of Canadian EM technology companies have further refined remote sensing systems.

Mr. Vowles is also excited by advances in aircraft-based remote sensing systems from two Canadian companies, Fugro Airborne Surveys and Geotech Ltd. They will allow mining companies to "see" deposits down to a depth of 500 to 700 metres below the surface. That is a huge leap from first-generation airborne systems, which could detect ore bodies down to 300 metres.

"The old adage that 'you have only scratched the surface' is applicable here," Mr. Vowles said. "Now if you have an airborne system that is capable of detecting these conductive bodies or magnetic bodies down to a depth of 600 metres, you could potentially open the entire greenstone belts all across the country now." Greenstone belts, long blocks of rock that have undergone great chemical and physical stress, are prime hunting grounds for miners.

The industry has also made great strides in extracting and moving ore-bearing rock. "Those two have probably been the biggest single net changes in the last 30 years," said Colin Joudrie, director of business evaluations and general manager of engineering firm CESL Ltd., part of Teck Resources Ltd. of Vancouver, which produces coal, copper and zinc.

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Miners have become far more sophisticated in determining how rock will break under stress and can therefore minimize the amount of explosives to be used. "That is probably one of the most energy intensive parts of mineral processing and metal recovery – how you break up the rock to recover the metals that you are targeting."

Advances in that area have also made mines safer for workers.

Larger, more energy-efficient trucks and increased use of conveyer belts have also reduced the amount of fuel required to move ore. As well, widespread reuse of water has allowed mines to be more water-independent, meaning it is not necessary to dip into rivers and lakes.

New technologies can be enormously expensive to put in place, so the mining industry typically waits until they have been proven by one before competitors quickly follow, resulting in periods of rapid advancement followed by little change for a number of years.

"Operators don't want to use a really new and groundbreaking technology that might not work because you have so many people and capital involved," said Teck's Mr. Joudrie.

One such technology that is spreading through the industry is Teck's CESL single-stage copper extraction process, in which copper is pulled from ore. "It is medium temperature, medium pressure to extract the copper from the concentrate and do it in such as way that there are no emissions other than a residue," that is environmentally benign.

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Teck believes the CESL process, which is still in its implementation phase, will save it 25 cents to 50 cents per pound of copper processed. Put another way, it will reduce extraction costs from 15 per cent to 30 per cent depending on the mine.

"It holds a lot of promise for a couple of reasons. Over all, it is more cost effective but it is also much more environmentally sound," because the metal is processed on site rather than being sent around the world for refining. "You would only ship copper cathode as opposed to shipping all the other material offsite," Mr. Joudrie said.

"For a long-life ore body you could be saving tens to one hundred of million dollars a year just in shipping costs alone," he said.

New discoveries, new smelters needed to keep metal superpower status

Canada is a power when it comes to mining., evidenced by Toronto's status as the world's financial centre for financing of mineral exploration and development and its top-five producer status for many of the key mineral and metals necessary for modern society.

But the country cannot rest on its laurels, warns Pierre Gratton, president and chief executive officer of the Mining Association of Canada. "We definitely need some new discoveries, we definitely need to replenish some of our domestic reserves in order to support the base metal infrastructure that Canada has had."

Most worrisome to the mining association head is the fact that the country's fleet of smelters is aging, inefficient and often poorly situated far from energy sources or water transportation. such as the old Inco facility in Thompson, Man. The landlocked smelter has been targeted for closure by Brazilian mining giant Vale which notes the smelter is running out of ore to process and is facing an additional hurdle in the form of tough emission standards for sulphur dioxide expected to be put in place in 2015.

Canada did receive some good news on the smelter front this month when Cliffs Natural Resources said it plans to invest as much as $3.3-billion to build a chromite mine in the so-called Ring of Fire area in Canada's north as well as a transportation corridor and a $1.8-billion smelter near Sudbury. The area, 500 kilometres north and east of Thunder Bay, is host to the continent's largest chromite discovery and could hold significant deposits of nickel, copper and platinum. Canada is currently not a major producer of chromite, a key ingredient in stainless steel.

The good news for the country's mining industry is that plenty of the country's mineral wealth still awaits discovery and Canada can suddenly become a major world supplier of materials, whether it be chromite from the Ring of Fire region or diamonds in the far north.

"Certain commodities like diamonds never existed 15 years ago and we vaulted into third place by value," Mr. Gratton said. "We don't have many mines but they are world class. With new discoveries we can become better known for other commodities."

Canada's status as a base metal superpower is slipping, although a number of copper mines are coming into production, with the largest number situated in British Columbia. There are major zinc deposits in Nunavut that have significant infrastructure challenges to overcome before they are developed, and enormous reserves of iron ore in the Labrador trough area that runs through Quebec and Labrador which likely contains centuries' worth of the base metal.

Over the past 25 years, there has been "a marked decline" in proven and probable Canadian mineral reserves in all major base metals, according to the Mining Association. Reserves of lead, zinc and silver have fallen by 80 per cent while copper and nickel reserves have fallen by more than half. Gold reserves in 2009 were about half of 1996 levels, according to a 2011 report.

The good news is Canada remains a premier destination for mining investment worldwide due to the dominance of the Toronto stock exchanges and well developed expertise in financing for exploration and ultimately development of mines. According to Mining Association figures, the Toronto Stock Exchange handled 83 per cent of public mining financing over the past five years.

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