Highland Valley Copper Mine, British Columbia, Canada

Highland Valley copper/molybdenum mine is located 75km southwest of Kamloops, British Columbia, Canada. The Valley pit has yielded more than 1,100Mt of ore in its lifetime.

Highland Valley Copper was created as a partnership between Rio Algom and Cominco in 1986 to combine the Bethlehem and Lornex mines. Following the merger between Teck and Cominco in 2001, the 2000 takeover of Rio Algom by Billiton and Billiton's subsequent merger with BHP, the mine was then majority owned by Teck Cominco (63.9%) and BHP Billiton (33.6%). At the beginning of 2004, Teck Cominco exercised its pre-emptive rights over BHP Billiton's holding when the latter put it up for sale, and is now 97.5% owner of Highland Valley.

Production at the mine has decreased significantly the last few years due to an increased reliance on the lower-grade Lornex pit in line with a $C300m mine expansion project designed to push its life expectancy out to 2019. All of the mining equipment required for this work is now on site and commissioned. Highland Valley’s total copper production for 2007 was 136,000 tons, compared to 167,000 tons for the previous year. Molybdenem was just under 4 million pounds compared with just over 4 million for 2006.

Geology and reserves

Highland Valley is a low-grade (0.4% Cu) porphyry copper-molybdenum deposit associated with the younger intrusive phases of the early to mid-jurassic, calc-alkaline Guichon Creek batholith.

As of the end of 2005, proven and probable ore reserves totalled 318Mt grading 0.43% copper and 0.008% molybdenum. Mineral resources added a further 151.9Mt at 0.37% copper and 0.005% moly.

Reserves have been drill defined at 60 to 115 metre centres and resources at 125 metre centres. In 2007, a positive geotechnical study at Lornex added 197 million tons of indicated resource at a US$1.65/lb copper price and US$9.50/lb molybdenum price.

Open-pit mining

Open-pit mining is used in both the Lornex and Valley pits, with around 90% of the ore coming from the Valley pit. Three computerised Bucyrus 49R drills prepare blast hole patterns while nine P&H 4100A 37 yd³ electric shovels load ore into a fleet of Komatsu haul trucks for transport to in-pit crushers. In 2001, eight of the 170t-capacity trucks were replaced by six new 215t haulers. Further support is given by three water trucks, eight road graders, eight tracked bulldozers, three rubber-tyred bulldozers and one front-end loader.

The mine uses two semi-mobile in-pit crushers to minimise haul distances. Several kilometres of conveyors carry up to 12,000t/h of crushed ore to three stockpiles at the Highland mill. Pit operations are monitored and controlled by a Modular Mining Systems computerised dispatch system designed to maximise mine production. In addition minute-by-minute mapping is achieved by combining GPS navigation and survey with GIS mapping techniques.

Ore processing

The Highland mill, the world’s third largest copper concentrator, was constructed in the late 1980s by combining the original Lornex and Highmont mills. The complete Highmont mill was moved by road 10km from its former site to a new position adjacent to the Lornex plant.

The crushed ore enters two grinding stages in five parallel grinding lines incorporating two fully-autogenous mills, and three semi-autogenous (SAG) mills grinding a total of 5,400t/h. The second stage consists of eight ball mills reducing ore to sand-sized particles which feed the flotation circuits. The primary flotation stage extracts copper and molybdenum from the slurry before copper and molybdenum are separated. The molybdenum concentrate is mixed with a leaching brine in sealed, pressurised, heated vessels where residual copper is dissolved, leaving a high-grade molybdenum concentrate. Lastly, the copper and molybdenum concentrates are filtered and dried in gas-fired driers for shipping. Three 1m-diameter pipelines take the tailings 7km overland from the mill to the Valley tailings pond.

Concentrate transport

Copper concentrate is transported in bulk 40km to the rail yard at Ashcroft, then by rail to north Vancouver and finally by ship to overseas smelters. The molybdenum concentrate is packaged on site for shipment.

Environment

In 1997, Highland Valley Copper was presented with the 1996 British Columbia Reclamation Citation Award in the metal mining category for its outstanding achievement in reclaiming 1,000ha and planting 700,000 native trees and shrubs. Work to establish fish stocks in different water bodies on the property is continuing to be successful.

Production

As noted in the overview above, production at Highland Valley has declined significantly the last few years. Teck Cominco recently downgraded its production guidance for the 2008 full year from an initial 122,000 tons to 113,000 tons. Highland Valley’s total copper production for 2007 was 136,000 tons, compared to 167,000 tons for the previous year. Molybdenem was just under 4 million pounds compared with just over 4 million for 2006. Total ore mined fell also to 42.6Mt.
Teck Cominco has stated that mining of areas with higher clay content will continue throughout 2008 and 2009. Just over half of the total ore mined for Q3 2008 came from the lower grade Lornex mine compared with only 41% for the 5% to 30,500 tons.

The future

Waste stripping for Highland Valley's $C300m mine life extension is continuing with the pushback of the east wall in the Valley pit progressing well despite a minor geotechnical failure in the third quarter which is currently being rectified.

All the equipment is on site, permits received and contractors arranged. The pushback of the west wall necessary to extend the mine life to 2019 is scheduled to commence in early 2009 after the mine permit amendment received.

Ezulwini Uranium and Gold Mine, South Africa

The Ezulwini project involves the recommissioning of an underground uranium and gold mining operation located about 40km southwest of Johannesburg, on the outskirts of the town of Westonaria in Gauteng Province, South Africa. The mine is currently operating on a care and maintenance basis.

The mine was built in the 1960s and eventually reached production of 200,000tpm. In 2001, production at Ezulwini was halted primarily because of capital constraints compounded by weak gold and uranium prices.

The US$280m project is wholly owned by First Uranium through its local subsidiary Ezulwini Mining Company (Proprietary) Ltd. Existing infrastructure at the site includes two shaft headframes and four hoists, fans, compressors, generators, and underground equipment, as well as the necessary surface freehold required to operate the mine.

The capital expenditure for the project has been raised in three ways: through an IPO in December 2006, a convertible debenture in May 2007 and through proceeds from initial production. Payback is calculated at 5.2 years.

Geology

The project lies within the Witwatersrand Basin, an Archean (about 2.7 billion year-old) sedimentary basin that contains a stratigraphic sequence about 6km thick which consists mainly of quartzites and shales with minor intermittent volcanic units. Gold is hosted by the Upper Elsburg and Middle Elsburg Reefs underlying the mine. Uranium is found only in the Middle Elsburg Reef.

Mineralisation

Gold in the Upper Elsburg is found in the form of native gold and is associated with sulphide minerals, especially various forms of pyrite. Historically, 30-40% of the gold has been recovered by gravity processes, suggesting a high nugget effect.

In the Middle Elsburg Reef, gold is most commonly associated with pyrite, although some gold occurs in small blebs in arsenopyrite and cobaltite. Uranium is found in the form of uraninite. Mineralisation in the Middle Elsburg Reef has less of a nugget effect than the Upper Elsburg Reef.

Resources

At May 2007, there were no mineral reserves as defined by NI 43-101; the total Measured, Indicated and Inferred resources are put at just over 200Mt of about 32Moz contained gold and about 218 million pounds of contained U3O8. Reserves figures and revised resources estimates are expected in mid-2009.

Development

Part of First Uranium’s plans for developing the Ezulwini project has been to rehabilitate and re-engineer the main mine shaft by installing a floating steel tower, de-stressing the area where the shaft pillar intersects the shaft barrel, and building the uranium and gold processing facilities.

The company believes the rectification programme will enable the project to reach a production output of about 130,000 tpm by 2009 and 180,000 tpm by 2012, as the Upper Elsburg shaft pillar is developed and the Middle Elsburg uranium and gold section stopes are opened and expanded.

Production

The project is a conventional underground mine with breasting of the Upper and Middle Elsburg reefs. The ore is broken in the stopes and moved by slushers for loading into rail cars for transportation to the shaft. From the shaft and through the balance of the handling, the gold ores and the gold/uranium ores are kept separate. The ores are then hoisted to the surface for processing.

Ezulwini began gold production in July 2008, with uranium recovery starting in October 2008. Gold production is put at about 288,000 ounces a year while the average U3O8 production is expected to reach 2.1 million pounds a year. Full production will be attained in the fourth year and the mine has an expected life of about 19 years.

Processing

The choice of process is based on those previously used on the site. The ore is crushed and ground, then subjected to gold recovery by gravity and cyanidation. The uranium will be extracted by hot acidic leaching followed by solvent extraction and precipitation to form a concentrate (yellowcake). The uranium tailings will then be leached for gold recovery. Leaching will occur in a carbon in leach (CIL) process, after which gold will be electrowon and refined into doré bars.

Based on previous operating history, recovery rates of 95.5% for gold and 80% for U3O8 are expected.

Water comes from dewatering the mine, which the company says more than meets its needs.

Power comes partly from South African utility Eskom. In June 2008, Eskom agreed to increase its power commitment to Ezulwini from 40MW to 55MW. But in January 2008, Eskom had said it could not guarantee power supplies, so by July 2008, agreements had been finalised to obtain 10MW diesel generators to supplement the power from Eskom, and secure a steady supply of owner-generated electrical power with a total capacity of 24MW, inclusive of 14MW of existing standby units at the mine.

In September, First Uranium struck an exclusive deal with the Traxys Group to market all Ezulwini uranium.

The EPCM contractor for the project is MDM Engineering, of South Africa. The value of the contract is about US$200m.

TauTona, Anglo Gold, South Africa

In 2006 AngloGold Ashanti commenced a project to extend its South African TauTona gold mine to 3.9km. This was completed in 2008 making it the world’s deepest mine, surpassing the 3,585m deep East Rand Mine by a good distance. The name TauTona means "great lion" in the Setswana language.

The TauTona mine exists within the West Witts area not so far from Johannesburg in South Africa, near the town of Carletonville. TauTona neighbours the Mponeng and Savukamines, and TauTona and Savuka share processing facilities. All three are owned by AngloGold Ashanti.

Production at TauTona fell to 409,000 ounces in 2007, down from 474,000 ounces in 2006, due to increased seismic activity.

This required a review of the practice of mining of shaft pillars and high-grade remnants, and delays to the build-up in volume caused by opening up of the sequential grid. Capital expenditure in Siguiri was R2.5bn ($US71m) in 2007, with 56% committed to the development of ore reserve.

TauTona accounted for 7% of AngloGold Ashanti’s total 2007 gold production.

The mine was originally built by the Anglo American Corporationwith its 2km deep main shaft being sunk in 1957, with operations starting in 1962.

Since its construction two secondary shafts have been added bringing the mine to its current depth. The mine today has some 800km of tunnels and employs some 5600 miners. It is an extremely dangerous environment, with five workers losing their lives in 2007.

The mine is so deep that temperatures in the mine can rise to dangerous levels. Air conditioning equipment is used to cool the mine from 55°C down to a more tolerable 28°C. The rock face temperature currently reaches 60°C.

The journey to the rock face can take one hour from surface level. The lift cage that transports the workers from the surface to the bottom travels at 16 meters a second. The mine has also been featured on the MegaStructures programme produced by National Geographic.

Geology and reserves

The TauTona mine exists within the West Witts area slightly South West of Johannesburg in the North West of South Africa.

Two reef horizons are exploited at the West Wits operations: the Ventersdorp Contact Reef (VCR), located at the top of the Central Rand Group, and the Carbon Leader Reef (CLR) near the base. Owing to nonconformity in the VCR, the separation between the two reefs increases from east to west, from 400m to 900m. TauTona and Savuka exploit both reefs while Mponeng only mines the VCR. The structure is relatively simple with rare instances of faults greater than 70m.

The CLR consists of one or more conglomerate units and varies from several centimetres to more than 3m in thickness. Regionally, the VCR dips at approximately 21°, but may vary between 5° and 50°, accompanied by changes in thickness of the conglomerate units. Where the conglomerate has the attitude of the regional dip, it tends to be thick, well-developed and accompanied by higher gold accumulations.

Where the attitude departs significantly from the regional dip, the reef is thin, varying from several centimetres to more than 3m in thickness.

Total resources 2,615,000 ounces Measured resources 510,000 ounces Indicated resources 8,106,000 ounces

Mining and processing

Mining operations are conducted at depths ranging from 1.8km down to 3.9km following the recent expansion.

The mine consists of a main shaft system supported by secondary and tertiary shafts. The main mining method is longwall. TauTona shares a processing plant with Savuka. The plant uses conventional milling to crush the ore and a CIP (carbon in plant) to further treat the ore. Once the carbon has been added to the ore, it is transported to the plant at Mponeng for electro-winning, smelting and the final recovery of the gold.

Production

Gold production declined by 14% to 12,714kg (409,000oz) (2006: 14,736kg (474,000oz)), owing to a higher-than-expected fall in the volumes of ore mined. This was due to increased seismic activity in the vicinity of the CLR shaft pillar which is being mined, and at several highgrade production panels, where production was halted for limited periods during the course of the year. Both face length and face advance were negatively affected by seismicity during the year. The increased geological risk from this seismic activity necessitated re-planning regarding mine layout and mining methods.

Worsley Alumina Refinery, Australia

The Worsley Alumina Refinery is named after the historic timber settlement of Worsley, near Collie in the south west corner of Western Australia. The history of the project goes back to the early 1960s when a group of local entrepreneurs formed a firm to explore, develop and sell deposits of bauxite ore on the eastern side of the Darling Range, near Boddington.

Construction of a mine site and refinery began in 1980 and the first alumina was produced in April 1984. These days Worsley Alumina is a joint-venture partnership between BHP Billiton (86%), Japan Alumina Associates (Australia) (10%) and Sojitz Alumina (4%).

In May 2000, Worsley completed a $1bn expansion increasing annual production to 3.1 million tons.

The Worsley Alumina Development Capital Project (DCP), which commenced in 2004, was completed in 2007 at a cost of US$ 235m (US$ 188m our share), resulting in a 0.25 mtpa increase in alumina production (0.215 mtpa our share) to 3.5 mtpa.

In 2008 the partners announced a US$ 2.21bn ‘Efficiency & Growth’ expansion project at Worsley Alumina. This includes approximately US$ 70m of sustaining capital.

BHP says that the expansion project will lift capacity of the Worsley refinery from 3.5 million tons per annum (Mtpa) of alumina to 4.6 Mtpa (100% capacity) through expanded mining operations, additional refinery capacity and upgraded port facilities. Production is expected to commence in the first half of calendar year 2011. Worsley is currently the world’s fifth biggest bauxite mine.

BHP Billiton Aluminium President Jon Dudas said, "Worsley is one of the largest, lowest cost and most efficient alumina refineries in the world. This decision to invest in further production capacity underlines our confidence in the future of the alumina market. It also reflects our confidence in Worsley Alumina's ability to continue its excellent track record of production growth."

Alumina is carted by rail and exported through the Port of Bunbury. More than 1200 people are employed at the mine site and refinery. Many more jobs have been created through the employment of sub-contractors and through the support of local businesses and suppliers.

Geology and reserves

The Bunbury basalt has been dated at 135 and 128 Ma and overlies an erosional surface, thus marking the breakup of unconformity and volcanism in South Western Australia. It has been traced in the subsurface southwards and also offshore to the North East. Seismic evidence under the continental shelf between Perth and Bunbury shows that the Basalt flowed down an odd valley incising the continental margin. The Worsley mine has estimated reserves of 400mt.

Mining

Bauxite is mined from reserves mainly within State forest on the eastern edge of the Darling Range, near Boddington. The bauxite is crushed and carried 51km by a two-flight cable belt conveyor system to the refinery site at Worsley. It is then processed, and the separated alumina is carted by rail and exported through the Port of Bunbury.

Ore processing

The Worsley alumina refinery uses the Bayer process to produce metallurgical grade alumina, which is used as feedstock for aluminium smelting. Power and steam needed for the refinery are provided by a joint venture-owned onsite coal power station and a non-joint venture-owned on-site gas fired steam power generation plant.

Production

The partners have stated that the US$ 2.21bn ‘Efficiency & Growth’ project at Worsley Alumina will lift capacity of the Worsley refinery from 3.5 million tons per annum (Mtpa) of alumina to 4.6 Mtpa (100% capacity) through expanded mining operations, additional refinery capacity and upgraded port facilities.

Martabe, North Sumatra, Indonesia

Following review of the recently completed Definitive Feasibility Study (DFS), Oxiana's Board approved development of the Martabe gold and silver project in December 2007. The Board approval is subject to the receipt of final permits from the Government of Indonesia, which are expected by April 2008.

The Martabe project is seen as one of the more promising undeveloped mineral deposits in Asia, containing extensive proven reserves of gold and silver.

The Martabe Contract of Work (CoW) covers a 2,500km² area, the most significant part of which is the Purnama deposit.

It is a sulphidation epithermal deposit, which was discovered in 1997 through regional stream sediment sampling by Normandy Anglo Asia Ltd. Since then other deposits have also been discovered and resources at Martabe now stand at 6 million ounces of gold and 60 million ounces of silver.

Oxiana became the owner of the Martabe project through the acquisition of Agincourt Resources Limited in early 2007.

The Martabe project is located close to existing infrastructure and facilities and is bisected by the Trans-Sumatra highway. Supplies of grid power and process water are available, and the port of Sibolga is approximately 30km from the site.

Subject to approvals the Martabe project will move into construction in 2008 and then into production at the end of 2009.

GEOLOGY AND RESERVES

Martabe's high sulphidation gold deposits exist within a sequence of tertiary volcanic and sedimentary rocks near a fault splay which is part of the Great Sumatran Fault complex. Episodic fault activity has been responsible for pulses of high-level magmatism and development of multi-stage phreatomagmatic breccias, flow dome complexes, hydrothermal alteration and gold mineralisation observed in the district. Gold mineralisation occurs in a number of deposits over a strike length of 7km.

The most significant and best defined of these is the Purnama deposit, where a resource of 66.7 million tonnes containing 1.74g/t Au and 21.5g/t Ag for a total of 3.7 million ounces of gold and 46 million ounces of silver has been defined by diamond drilling.

Two adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other virgin targets are expected to provide upside. Total resources are 6Moz of gold and 60Moz of silver. Reserves are 2.3Moz of gold and 30Moz of silver.

MINING

Mining of the Purnama deposit will be undertaken by conventional open-pit methods with a low average strip ratio of 0.7:1. The processing plant will be a large-scale ore processing plant. The plant and infrastructure will be designed to allow for future expansion.

ORE PROCESSING

Oxiana expects to be treating 4.5 million tonnes of ore per annum using proven SAG and ball milling, and carbon-in-leach (CIL) technology. Recoveries are expected to average 76% for gold and 55% for silver.

Production on average will be 250,000oz of gold and approximately 2Moz of silver per annum over an initial nine-year production life.

Martabe's development cost has been put at $310m and mining cash costs are estimated at $270/oz. First production is expected to start in December 2009.

THE FUTURE

The potential to discover mineralisation elsewhere in the CoW area is considered high and exploration is ongoing at a number of other prospects. Two adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other virgin targets are expected to provide upside.

A 5% interest is held in trust for local Indonesian stakeholders.

Kaltim Prima Coal Mine, Indonesia

Kaltim Prima, one of the new generation of Indonesian thermal coal producers, is located in north-eastern Kalimantan. It is operated by PT Kaltim Prima Coal (KPC), which from the project's inception up to late 2003 was jointly owned by BP and Rio Tinto. The Indonesian government receives a royalty equivalent to 13.5% of the revenue. The operation is self-contained and employs some 2,700 people.

Although BP and Rio Tinto's Contract of Work required the companies to divest part of their holding to local interests, up until 2003 no Indonesian purchaser was able to raise the finance needed to buy them out.

In mid-2003, the companies announced the sale of their holdings in KPC to PT Bumi Resources for a cash price of $500m, including assumed debt. PT Bumi Resources already owned PT Arutmin Indonesia, another major Indonesian coal producer, and has interests in oil, natural gas and mining, amongst other commercial sectors.

In 2006, PT Bumi announced the sale of all its coal holdings to PT Borneo Lumbung Energi for $3.2bn. However, the deal subsequently failed, although PT Bumi later indicated that it still intends to divest a proportion of its holdings.

PROJECT DEVELOPMENT

BP and CRA (now Rio Tinto) successfully tendered for a 7,900km² licence area in eastern Kalimantan in 1978. Exploration from 1982–86 indicated reserves of 112Mt of export-quality thermal coal. Construction began in 1989 and the mine was commissioned in 1991 as a 7Mt/y operation at a cost of $570m.

The mine has subsequently been expanded, with a sales target of 20Mt/yr by 2005. PT Bumi is planning further expansion to 30Mt/yr, plus the development of the Bengalon reserve, some 25km from the existing Sangatta operations.

In mid-2004, PT Bumi awarded the Australian contractor, Henry Walker Eltin, a $1.2bn, ten-year contract for infrastructure development and mining services at Bengalon, which will have a 6Mt/yr initial capacity.

GEOLOGY AND COAL QUALITY

Pressure and heat associated with an igneous intrusion has increased the rank at Kaltim Prima to high-volatile bituminous coal. A total of 13 seams range in thickness from 1m to 15m; typically in the range of 2.4m to 6.5m. Seam dips vary from 3° to 20° at the outcrop. The seams are very clean in terms of mineral matter and sulphur and, at 4–8% in some areas, the in-situ moisture content is low.

As of the end of 2005, PT Bumi cited reserves at Sangatta at 621Mt, plus 165Mt at Bengalon. The company also has measured and indicated resources of some 3,700Mt.

As of mid-2004, PT Bumi cited reserves at Sangatta at 462Mt, plus 157Mt at Bengalon. The company also has measured and indicated resources of some 2,200Mt.

The operation produces two main export products. Prima Coal is a high-volatile bituminous steam coal with high calorific value, very low ash, low sulphur and low total moisture. Pinang Coal is similar but has a higher moisture content. Quality parameters are:

Product ***********PrimaCoal **********Pinang Coal

Moisture (total) *******9.5% ***************14%
Ash ***************** 4% ******************6%
Volatiles **************39%*************** 39%
Fixed carbon********** 52% ***************46%
Total sulphur********* 0.5% **************0.5%
Heating value (adb) **30.1MJ/kg ********27.6MJ/kg
Heating value (gar) **28.5MJ/kg *********26.0MJ/kg

adb = air-dried basis

gar = gross, as received
KPC blends run-of-mine coal from its various pits to ensure product consistency.

As of end-2001, Kaltim Prima had mineable reserves totalling 462Mt, plus measured and indicated resources of nearly 2,200Mt.

MINING TECHNOLOGY

KPC operates six to 12 individual open pits at any time, the average stripping ratio being 7.5bcm (bank cubic metres) of overburden per tonne of coal. The overburden material degrades quickly on exposure to the atmosphere and generally provides easy digging.

Some overburden rock requires blasting to ensure adequate fragmentation for the shovels. KPC carries out its own mining in most of the pits, but also contracts out a smaller proportion of its mining requirements.

The mine's loading fleet consists of over 20 large hydraulic shovels and backhoes with bucket capacities of up to 34m³. Leading suppliers include Hitachi, with nine EX3500 machines and six EX1800s, and Liebherr, which has six R996 Litronic shovels/backhoes on site.

Overburden haulage involves a fleet of 137 trucks, including Caterpillar 785s and 789Bs with capacities of 135–185t, Cat 777s (85t) and Komatsu HD785s (also 85t). Truck scheduling is carried out using a GPS-based Mincom dispatch and management system.

COAL PROCESSING

With selective mining, over 90% of the run-of-mine coal only needs crushing and blending to give export-quality Prima Coal. Coal from the seam roofs and floors contains more mineral material, and so has to be washed. This 'dirty Prima' and Pinang material is handled separately from the 'clean Prima', with individual streams for the different raw materials.

After crushing to –50mm in Gundlach rolls crushers, the washing plant uses dense medium cyclones for 0.5mm to 50mm feed, and spirals for the –0.5mm material, products being dewatered in centrifuges before blending into the Prima Coal stockpile.

OVERLAND TO THE PORT

The mine site contains separate stockpiles for the Prima and Pinang products, holding 60,000t and 35,000t respectively. Coal is reclaimed and transported by a 13km-long, 2,100t/h-capacity overland conveyor to Kaltim Prima’s dedicated port facilities at Tanjung Bara.

Further stockpiles hold a live capacity of 350,000t of Prima and 150,000t of Pinang coals. Coal is transferred directly from mine to ship whenever possible.

Vessels of up to 220,000dwt can be handled by the port, with loading facilities at the end of a 2km-long jetty. Twin quadrant loaders can each handle up to 4,700t/h, the normal loading throughput.

PRODUCTION

Since production began in 1992, Kaltim Prima has increased its output year-on-year, from 7.3Mt in its first year to some 17Mt in 2002 and 2003. PT Bumi is now expanding the Sangatta operation to 30Mt/yr, with a further 6Mt/yr to come from Bengalon.

The operation produced 27.6Mt in 2005, with a target for 2006 of 36Mt of coal and some 700Mt of overburden.

Argyle Diamond Mine, Kimberley, Australia

The Argyle mine, located in the Kimberley region in the far north east of Western Australia, is the world's largest single producer of diamonds. The mine lies some 550km south west of Darwin by air. The region is remote, rugged and hot, with temperatures of over 40°C during the wet season from October to March.

When production began in 1985, most of the workforce was Perth-based and operating on a two-week 'fly-in, fly-out' basis – requiring the construction of a complete camp infrastructure to support the operation. In recent years, however, a programme of localisation has been underway to base workers in East Kimberley.Article Continues

Argyle is operated by the Argyle Diamond Mines Joint Venture, wholly owned by Rio Tinto since 2002. The initial mining lease expired in 2004 and has been renewed; the current open-pit operation is scheduled to conclude in 2008, with underground developments underway to extend the life of the mine to 2018.

GEOLOGY AND RESERVES

The discovery of the Argyle orebody marked the first time that a commercial diamond occurrence had been identified that is not hosted in kimberlite. The AK1 pipe at Argyle instead consists of olivine lamproite, from which diamonds had been eroded to form placer (alluvial) deposits nearby.

The deposit was discovered in 1979 by the Ashton joint venture, following some 12 years of exploration by various companies in the area. The discovery of alluvial diamonds led directly to their source, the AK1 pipe.

At the end of 2005, total measured, indicated and inferred resources in the AK1 pipe were 83Mt at a grade of 2.7ct/t, with a further 28Mt at a grade of 0.2ct/t in residual alluvial material. Proven and probable reserves totalled 111.7Mt grading 2.2ct/t, and containing 247.1Mct.

MINE DEVELOPMENT

Development of Argyle was a two-stage process. Alluvial diamond mining took place between 1983 and 1985, when the AK1 pipe came into production. Since then, this has been the principal source of ore, supported by lesser amounts of alluvial material.

Argyle operates as a conventional open-pit mine, with both lamproite and waste rock being drilled and blasted before being loaded out in a shovel-and-truck operation. The mine operates Bucyrus, P&H and Tamrock Driltech rotary drill rigs, O&K RH 200 hydraulic excavators and a fleet of Caterpillar 789B and Unit Rig MT4400 haul trucks, supported by Caterpillar wheel loaders, bulldozers and other ancillary equipment. The mine operation is monitored and vehicle movements are controlled using Modular Mining Systems' dispatch system, which uses a global positioning system (GPS) for accurate location of drills and other plant. Contract mining is used for the alluvial ores.

Much of the waste rock is highly abrasive quartzite, and Argyle has been a long-term user of the Skega dump body system in its haul truck fleet. This uses a suspended, reinforced rubber liner in place of conventional steel plating in the hauler body.

ORE PROCESSING

Argyle's processing plant uses a crushing, screening, heavy-medium separation (HMS) and X-ray sorter diamond recovery flowsheet. 3mm ore forms the feed for the heavy-medium separation circuit while -1mm material is rejected to the plant tailings.

Two-stage heavy medium cyclones with a specific gravity of 3.0 form the heart of the separation process, with material denser than the cut point forming the diamond-bearing concentrate. X-ray sorting separates the diamonds from residual waste in the HMS concentrate, the recovered stones being acid washed before sorting for shipment.

PRODUCTION

Since coming into operation, Argyle has produced over 670Mct of diamonds, with an average stripping ratio in the open pit of around 7t of waste being moved for each tonne of ore mined. Peak production was in 1994, at 42.8Mct. The pit is now so deep that the lack of manoeuvrability in the bottom has come to hinder mining operations.

In 2005, the mine processed 9.0Mt of lamproite ore to recover a total of 30.5Mct, its output having virtually regained the level achieved in 2003. 2004 production was markedly lower, with lower-grade and stockpiled ores being processed. In 2006, the operation treated 8.4Mt of ore to recover 29.1Mct. Argyle's production consists of 5% gem and 70% near-gem stones, with the remaining 25% being industrial diamonds. The mine also produces between 90% and 95% of the world's pink diamonds.

THE FUTURE

With the AK1 open pit scheduled to cease production in 2008, since by this time a point will have been reached where the lamproite 'pipe' narrows and continues at greater depth, making continued access to the ore by open methods uneconomic. Back in 2001, the company began looking at the option of developing an underground mine – launching a pre-feasibility study to investigate all of the possible alternatives and transition strategies.

The results of this led, in early 2003, to the approval of funding for a full feasibility study for a block cave underground mine and the construction of an exploratory decline. Both were completed during 2005 and in December of that year the decision was made to go ahead with the underground mine.

Work on the A$1.6bn development began on schedule and production from the new mine should begin in mid-2009; a low-grade open pit expansion is also planned which will help extend productive mine life until 2018.

Production capacity is predicted to average around 20Mct/y, compared with the current long-term average of 34Mct/y – and the high costs of the redevelopment have led some in the industry to speculate that the mine might ultimately be put up for sale.

In addition to the shift to underground working, the company is also in the process of localising most of its workforce in East Kimberley, aiming to have 80% based there by 2010 – and half of them Aboriginal. This forms part of major corporate step-change, described as 'reassessing Argyle's relationship to the area in which it mines'.

Samancor Chrome Mines, South Africa

With low electricity prices, South Africa has been able to expand chromite and ferrochrome production more or less continuously since the AOD process was developed in the 1960s to use ferrochrome smelted from lower-grade ores. Samancor was created in 1975 and its Chrome Division grew, mainly by acquisition, to become the world's largest integrated ferrochrome producer and South Africa's leading exporter of chemical-grade chromite and foundry sand.

Until June 2005, Samancor was owned by BHP Billiton and Anglo American plc, at which time the two companies sold the bulk of Samancor Chrome’s wholly-owned interests to the Kermas Group. Xstrata and the Black Economic Empowerment company, Merafe, took over Samancor's stake in Wonderkop and certain chromite resources. In 2006, Kermas South Africa sold a 28% equity interest in Samancor Chrome to a Black Economic Empowerment consortium, Batho Barena.

Innovations introduced by Samancor have included direct chromite reduction and DC smelting. Samancor Chrome has subsequently streamlined its mine management while upgrading its smelters and improving non-metallurgical concentrates production. To stabilise ferrochrome capacity utilisation, Samancor Chrome formed export production joint ventures with Far Eastern customers and a joint venture with local competitor Xstrata to build two new furnaces at the latter's Wonderkop smelter.

Samancor Chrome now provides employment for 5,500 people at two mines, three production plants and the corporate head office in Johannesburg.

GEOLOGY AND RESERVES

Samancor’s operations are centred on reserves held in the Bushveld layered intrusive complex, which contains approximately 70% of the world’s economic chrome ore reserves in the Lower Group (LG) 6 and Middle Group (MG) 1 seams. LG6 has a Cr2O3 content of 43-47% and a Cr:Fe ratio of 1.6:1, while MG1 averages 42% Cr2O3 and a Cr:Fe ratio of 1.5:1. LG6 is typically 1.1m thick and MG1 1.4m, both dipping gently.

At end-June 2002, Samancor's proven reserves totalled 16.6Mt grading 42.4% Cr2O3 with probable reserves of 23.4Mt. Total resources are estimated to be sufficient for 200 years mining at current rates.

MINING

Samancor has two mining centres: Eastern Chrome Mines (ECM) in the Steelport area of Mpumalanga Province and Western Chrome Mines (WCM) near Rustenberg and Brits in Northwest Province. Both units now comprise three underground mining areas, each with a hoisting shaft, while WCM also includes an open-cut mine. Overall capacity is approximately 5.8Mt/y of run-of-mine ore.

Underground, Samancor relies mainly on room-and-pillar mining, typically with low-angle adits connecting to a horizontal access level. Thin seams limit the scope for mechanisation and blasting relies on drilling with hand-held pneumatic jackleg units. The ore is mined either up-dip or down-dip in rooms approximately 20m wide, with the roof supported by ore pillars. Scrapers haul chromite to ore passes that load trains on the haulage level. The trains load a conveyor in the hoisting adit. The dimensions in the Waterkloof/Millsell mining block have allowed WCM to replace scrapers with load-haul-dump machines.

The open cut mine uses 8t-capacity loading shovels and 40t-capacity trucks.

ORE PROCESSING

Samancor’s concentrators – three for ECM and three plus a fluidised bed dryer for WCM – are individually configured to treat specific feed and yield a particular product range.

Bushveld chromite is conveniently milled to recover a fine concentrate by gravity and elutriation techniques. However, ferrochrome furnaces need a porous charge so lumpy ore and chips must also be recovered by dense medium separation to mix with the fines. The fines may be agglomerated at the smelters, either by briquetting or using the Outokumpu pelletisation and preheating system, to reduce the amount of lumpy ore and chip required. Further gravity separation and elutriation steps yield the specific grain sizes and reduced levels of impurities, such as silica, required for the chemical and foundry sand markets.

Samancor currently operates a flexible smelting system with capacity in excess of 1Mt/y of ferrochrome at three sites.

PRODUCTION

In 2000, Samancor Chrome produced 3.7Mt of chromite and 1.06Mt of ferrochrome. Output fell in the depressed market of the following two years but recovered to 1.02Mt of ferrochrome in 2003. Total saleable production in the year to June 2004 was 1.026Mt, and that in the year to June 2005, 954,000t. Approximately 0.5Mt/y of chromite is exported, mainly as chemical-grade or foundry sand.

Grasberg Open Pit, Indonesia

Located some 60 miles north of Timika, at Tembagapura in Irian Jaya – the most easterly of Indonesia's provinces – on the western half of the island of New Guinea, the Grasberg mine has the world's single largest known gold reserve and the second largest copper reserves.

Copper is the primary commodity, with a proven and provable reserve of 2.8 billion tonnes of 1.09%. The reserves also contains 0.98g/t gold and 3.87g/t silver.

Ownership belongs to Freeport McMoran Copper & Gold (67.3%), Rio Tinto (13%), Government of Indonesia (9.3%) and PT Indocopper Investama Corporation (9.3%). Around 18,000 people work at the mine, which is operated by PT Freeport Indonesia, a subsidiary of Freeport McMoran Copper & Gold.

To support the mine and its workforce PT Freeport has built an airport, a port at Amamapare, 119km of access road, a tramway, hospital, housing, schools and other facilities.

GRASBERG GEOLOGY

The mine stands at the collision of the Indo-Australian and the Pacific tectonic plates. Two distinct phases of intrusion have led to the production of nested coaxial porphyry ore bodies and sulphide rich skarn at the margins, while sedimentary strata includes Eocene clastic carbonate limestone with siltstones and sandstones near the base.

The Dalam Diatreme (DD) forms the first intrusive stage, being highly fragmental and characterised by clasts and a matrix of dioritic composition.

Mineralisation is largely disseminated and chalcopyrite dominant, having average grades of 1.2% copper and 0.5 g/t gold.

The second intrusive stage, the Main Grasberg Stock (MG), is composed of non-fragmental, porphyritic monzodiorites, forming a quartz-magnetite dilational stockwork with veinlet controlled copper-gold mineralisation. This is a high-grade resource, with averages of 1.5% copper and 2 g/t gold.

There is also a third intrusive stage, associated with the South Kali Dykes, which was the final intrusion and the most weakly mineralised.

MINING

The workings comprise an open pit mine, an underground mine and four concentrators. The open pit mine – which forms a mile-wide crater at the surface – is a high-volume low-cost operation, producing more than 67 million tonnes of ore and providing over 75% of the mill feed in 2006.

Designed to be fully mechanised, using 6.2m3 Caterpillar R1700 load-haul-dump vehicles (LHDs) at the extraction level with a truck haulage level to the gyratory crusher, the Deep Ore Zone (DOZ) block cave mine is one of the largest underground operations in the world.

After 2004, when the DOZ mine averaged 43,600 tonnes/day a second underground crusher and additional ventilation were installed to increase daily capacity to 50,000 tonnes.

Ore from both operations is transported by conveyor to centralized mine facilities, feeding a combined daily average total of some 225,000t of ore to the mill and 135,000t to the stockpiles.
Production equipment includes 30m3–42m3 buckets, a 170-strong fleet of 70t–330t haul trucks, together with 65 dozers and graders, with radar, GPS and robotics used in the mine’s state-of-the-art slope-monitoring system.

PROCESSING

Ore undergoes primary crushing at the mine, before being delivered by ore passes to the mill complex for further crushing, grinding and flotation. Grasberg’s milling and concentrating complex is the largest in the world, with four crushers and two giant semi-autogenous grinding (SAG) units processing a daily average of 240,000t of ore.

A flotation reagent is used to separate concentrate from the ore. Slurry containing 60-40 copper concentrate is drawn along three pipelines to the seaport of Amamapare, over 70 miles away, where it is dewatered. Once filtered and dried, the concentrate – containing copper, gold and silver – is shipped to smelters around the world.

The facilities at the port also include the PT Puncak Jaya coal-fired power station, which supplies the Grasberg operations.

THE FUTURE

With the open pit heading to be exhausted in 2015, arrangements are well underway for the planned transition to fully underground production. The geology includes nine ore bodies – the Deep Ore Zone, which is located immediately below the now depleted Intermediate Ore Zone, the underground Grasberg, Kucing Liar, Mill Level Zone, Deep Mill Level Zone, Ertsberg Stockwork Zone and Big Gossan.

Since 2004, a Common Infrastructure project has been in progress to create access to these large and undeveloped underground ore bodies through tunnels some 400m deeper than the currently existing system. This will both enable the known ore to be exploited and allow the potential of associated prospective areas to be explored in the future.

Open stoping at Big Gossan is scheduled to begin production in 2008, followed by the Ertsberg Stockwork Zone block cave mining in 2009.

Grasberg and Mill Level Zone block caving is expected to start in 2016, with exploitation of Kucing Liar and the Deep Mill Level Zone commencing in 2024 and 2027 respectively.

Batu Hijau Copper-Gold Mine, Indonesia

Batu Hijau copper-gold mine is located on the Indonesian island of Sumbawa in the province of West Nusa Tenggara, 1,530km east of Jakarta. The Contract of Work for the project is held by PT Newmont Nusa Tenggara (PTNNT), a company owned by Newmont Indonesia Ltd (USA, 45%); Nusa Tenggara Mining Corporation (Japan, 35%) and PT Pukuafu Indah (Indonesia, 20%). Newmont is the project operator and has a 52.875% equity stake.

Construction of the mine and its associated infrastructure was completed in 1999, after PTNNT had spent ten years exploring the resource, with commercial production beginning in 2000. The operation continues to be one of Newmont’s lowest cost assets. In 2005, copper sales fell 16.2% to 259,780t (2004= 310,000t) at an applicable cost of $0.53/lb and an average realised price before TRCs of $1.45/lb. However, consolidated gold sales rose to 720,500oz at applicable costs of $152/oz, as compared with 715,000oz in 2004.Article Continues

Power for the project is supplied by a 120MW coal-fired plant supported by nine diesel generators.

GEOLOGY AND RESOURCES

Batu Hijau is a major gold-rich porphyry copper deposit typical of the islands of southeast Asia. These gold-rich porphyries are overwhelmingly hosted by composite stocks of diorite to quartz-diorite and, to a much lesser degree, more felsic compositions such as tonalite and monzogranite. The deposits tend to be characterised by a strong correlation between the distribution of copper sulphides (chalcopyrite and bornite) and gold as the native metal in addition to having a notably higher magnetite content. Gold typically occurs as minute (<10-15>)

As of the end of 2005, Batu Hijau had an ore reserve containing 2.77Mt copper with 0.69g/t gold. At current production rates, mining should continue until 2025.

MINING AND MILLING

Batu Hijau is an open-pit mine. Ore is transported to the primary crushers using P&H 4100 electric mining shovels and a fleet of 220t-capacity Caterpillar 793C mechanical-drive haul trucks. The mine typically handles around 600,000t/d of ore and waste, the ore grading an average 0.49% copper and 0.39g/t gold.

Following primary crushing, the ore is transported to the concentrator by an overland conveyor, 1.8m wide and 6.8km long. The concentrator circuit consists of two-train SAG and ball mills, followed by primary and scavenger flotation cells, vertical regrind mills and cleaning flotation cells to produce a copper-gold concentrate grading 32% copper and 19.9g/t gold. Counter-current decantation thickeners are used to dewater the concentrate to a slurry, which is pipelined 17.6km from the plant to the port at Benete. Here it is dewatered further, then stocked in an 80,000t-capacity storage area prior to shipment by sea.

PRODUCTION

During 2005, Batu Hijau produced and shipped 1.1Mt of copper concentrate containing 325,500t of copper and 719,000oz of gold.

TAILINGS DEPOSITION

The tailings from the operation flow by gravity from the process plant to the ocean where they are deposited 3km from the coast at a depth of about 108m. From there, the tailings, which are non-toxic and non-hazardous, migrate towards the Java Trench and are ultimately deposited at depths in excess of 4,000m.

ENVIRONMENT

There are considerable environmental challenges at Bata Hijau, including steep terrain and widely dispersed facilities stretching over 40km. The site has a tropical monsoonal climate with high rainfall, and an extended arid season with almost no rainfall. Other environmental considerations include significant seismic activity, with the associated risk of tsunamis, and acid rock drainage, not to mention the existence on site of an endangered species, the yellow-crested cockatoo.

Considerable environmental controls are in place, and Newmont reported the operation improved its ‘five-star’ environment rating to four stars in 2005.

BHP Ravensthorpe, Australia

The Ravensthorpe integrated mine and primary processing facility is located 35km east of Ravensthorpe, in a band of remnant vegetation in an agricultural region next to the Fitzgerald River National Park about 570km southeast of Perth, Western Australia, and 155km west of Esperance.

The project involves open-pit mining from three nickel deposits, and a hydrometallurgical process plant to produce up to 50,000 tons (t) of contained nickel and 1,400t of contained cobalt per annum in a mixed hydroxide intermediate product (MHP) for further processing at BHP Billiton’s Yabulu Nickel Refinery in Queensland.

Ravensthorpe is a laterite nickel project which, because of the ores’ low grade expensive and intensive processing requirements, has caused BHP some cost and schedule headaches. The project was originally approved in March 2004 with a budget of US$1,340m. But by November 2006, capital costs had risen to US$2.2bn. The company did not officially open the operation until 23 May 2008, although commissioning took place in December 2007 with first production of MHP achieved in October 2007; it was originally scheduled to start production in mid-2007.

GEOLOGY

The Ravensthorpe region is underlain by basement rocks of the Albany-Fraser Orogen and the Yilgarn Craton, which constitute the bulk of the Western Australian land mass. These rocks consist of granite, gneiss and minor enclaves of sedimentary and volcanic rocks. At Bandalup Hill, lateritic nickel deposits up to 80m thick are developed over ultramafic rocks.

Mineralisation occurs in limonite (high iron, low magnesium and calcium, upper levels) and saprolite (low iron, high magnesium, deeper levels) ores in the three deposits – Halley’s, Hale-Bopp and Shoemaker-Levy

RESERVES

The three ore bodies have a proven reserve of 125.3Mt at 0.73% nickel and 0.032% cobalt, and a probable reserve 137.9Mt at 0.57% nickel and 0.026% cobalt, giving a total of 263.3Mt at 0.65% Ni and 0.029% Co. The reserves ensure a project life of 25 years.

Mining of up to 13Mt a year started at the Halley’s deposit in December 2006 and is expected to continue for the first 11 years of operation.

Thereafter, the Shoemaker-Levy then Hale-Bopp deposits will be mined. The ore from the Shoemaker-Levy deposit will be transported to the process plant via an overland conveyor.

PROCESSING

The Ravensthorpe ore body is distinctive in that it has a high silica content, which enables the limonite ore to be upgraded to almost twice the mined grade through a beneficiation plant – a simple scrubbing and screening process to remove the barren, hard silica. The saprolite ore also upgrades but to a lesser extent.

Processing is a combination of pressure acid leach (PAL) and atmospheric leach (AL), called enhanced pressure acid leach (EPAL). The limonite is treated by PAL, while the saprolite is treated by AL using the PAL discharge and additional acid. The company says the process enables better use of all ore types within the Ravensthorpe resource, and the recovery of an additional 15,000t a year of nickel.

The process downstream of the leaching circuit uses a Cawse flowsheet with partial neutralisation, followed by separation of the barren tailings from the nickel-bearing solution, further impurity removal and precipitation of the MHP. This is then transported to the Yabulu refinery via the port of Esperance, about 120km to the east, where it is processed into nickel metal before being sold to world markets.

Ravensthorpe is self-contained and includes a sulphuric acid plant, which produces high-pressure superheated steam for leaching and other processing areas. Available steam is also used in three steam turbines to generate the site’s electrical power.

The project uses seawater piped from the Southern Ocean and pumped to the site via a 46km pipeline system. The seawater is desalinated on site to produce fresh water for steam production while the waste brine stream is used in the beneficiation circuit.

Construction of the project was managed jointly by Hatch Associates and GRD Minproc.

Talvivaara Bioheapleach, Finland

Talvivaara’s bioheapleach project – the world’s first for nickel – is centred on two polymetallic deposits, Kuusilampi and Kolmisoppi, about 30km southwest Sotkamo, eastern Finland. They form one of the largest known sulphide nickel resources in Europe and, as well as nickel, the open-pit mine is also expected to produce copper, zinc and cobalt as by-products of the process. First metal was produced on schedule at the beginning of October 2008.

The mining licenses for this area were originally granted to Finland-based stainless steel company Outokumpu in 1986, and the exploration rights were subsequently transferred to Talvivaara in February 2004. In May 2007, Outokumpu exercised its option to acquire a 20% interest in Talvivaara.

The £355m project has been financed through a share offering in 2007 that raised about £230m; the rest has been raised through a term loan.

Geology

The Talvivaara orebodies sit within the Kainuu Schist Zone, a north-south trending schist belt that extends from Rautavaara in the south via Sotkamo, Ristijärvi, Paltamo and Puolanka through to Pudasjärvi in the north. The zone consists of a series of metasediments of greenschist to upper amphibolite facies belonging to the Karelia supergroup, which rest unconformably on the Archaean basement gneiss complex.

The host rocks of the Talvivaara deposit consist of variably re-crystallised carbon and sulphide-rich black metasediments (black schists) bounded by medium-grained mica schist and Jatulian quartzites. These black schist formations range in thickness from tens of metres to 100m, except in the immediate project area where the unit has been tectonically thickened.

The main mineral assemblage in the black schists is quartz, biotite, graphite and sulphides with accessory minerals of rutile, chlorite, oligoclase, microcline, apatite, garnet, tourmaline and epidote.

Resources

The project has total measured, indicated and inferred resources of 414Mt (0.15% Ni cut-off) containing 0.26% Ni, 0.02% Co, 0.14% Cu and 0.54% Zn. Total proved and probable reserves are about 257Mt, at about the same grades.

Production

The resources are sufficient to keep the mine in production for at least 24 years, with an expected annual nickel output of about 33,000t and the potential to provide nearly 2.5% of the world’s current nickel production by 2010. The Kuusilampi pit will be mined first with the Kolmisoppi pit coming on line in 2019.

As well as nickel, the mine is also expected to produce about 60,000t/year of zinc, 10,000t/year of copper and 1,200t/year of cobalt.

Processing

The process flow at Talvivaara consists of three main steps – crushing, bioheapleaching and metals recovery.

Crushing will be carried out in three stages, followed by agglomeration with sulphuric acid to consolidate the fines with coarser ore particles.

Bioheapleaching

Bioleaching is a process whereby metals are leached from ore as a result of bacterial action. In nature, bioleaching is triggered spontaneously by micro-organisms in the presence of air and water. Commercially applied bioleaching technologies use the same phenomenon, but accelerate this natural process. The bacteria used in the Talvivaara process grow naturally in the ore, and the company reports recovery rates of up to 98% of metal from ore to solution.

The heap leaching will be operated in two stages, a primary heap pad residence time of 1.5 years and a secondary pad residence time of 3.5 years.

Process plant

The process plant design includes two parallel circuits each rated at 600m3/h of pregnant leach solution (PLS). Each circuit consists of copper recovery, zinc recovery, neutralisation and aluminium removal, nickel and cobalt recovery, iron removal and then final precipitation.

The copper and zinc recovery units precipitate the metals from their sulphides in the PLS using hydrogen sulphide. The precipitates are then recovered in thickeners and filtered to produce saleable products.

The recovery of nickel and cobalt first requires the pH of the solution to be raised to 3.7-4.0, which precipitates most of the aluminium from the solution and also produces a large quantity of gypsum. This precipitate is separated in thickeners and the underflow filtered and stored in the waste rock area.

The nickel and cobalt are then recovered by precipitation using hydrogen sulphide, while maintaining the pH at 3.6-3.8. The two metals precipitate at the same time, so there is one mixed product. The precipitate is recovered in thickeners and then filtered to produce a saleable product.

The residual solution is then neutralised and the residual metals removed from the solution. The bulk of the iron remaining in solution is removed by aerating the solution to oxidise the iron which precipitates as goethite or as a hydroxide. The slurry is thickened and the thickener underflow is sent to the gypsum pond for storage. The bulk of the remaining solution is sent to the PLS pond.

For final precipitation the pH is raised to pH 9-10 using burned lime slurry. The residual metals are precipitated as hydroxides, and gypsum is also formed. The slurry is thickened and the thickener underflow disposed of in the gypsum ponds. The solution is sent to the PLS pond.

Talvivaara has a 10-year offtake deal to sell all its output of nickel and cobalt at market prices to the Norilsk Harjavalta refinery.

Logistics

The existing main access to the project area is a regional highway. The site is well connected to the highway network via the local roads in all directions and is close to the main railway network.
“For final precipitation the pH is raised to pH 9-10 using burned lime slurry.”

The main power source for the project is electricity, with a demand of about 45MW, supplied from the Finnish grid via a new overland powerline from the Fingrid substation at Vuolijoki, about 43km west of the project area.

The main water supply is from Lake Kolmissoppi but in low flow times it will not be able to support the permitted 4,000m3/h demand, so 20% of the supply would be taken from Lake Nuasjärvi. The project also has emergency storage ponds, which will be run at 50% of capacity to accommodate storm water. During the first couple of years of operation there will be no secondary leaching; this will later take various water streams from the primary leach pond, the pit and waste dump drainage.

Drinking water will be supplied from a handful of boreholes.

China's Mines Stay Shut

China has failed to meet demand to reopen thousands small coal mines, which has worsened the country’s current power shortage. Also, local officials still fear Beijing's wrath if they suffer more high-profile disasters.

Weeks after the central government urged miners to reopen the mines, effectively reversing a years-old policy of shutting them in order to improve safety in the world's deadliest coal industry, local officials are proving reluctant. And Beijing's freeze on coal prices has lowered the incentive for miners.

The failure to boost domestic coal supplies spells trouble for coal-fired electricity generators who produce four fifths of China's power, and could add to this summer's emerging power crisis, which has already forced aluminium smelters to cut output by up to a tenth and could stoke demand for oil.

"Local government officials are more concerned about personal interest. They are afraid of the punishment a mine accident could bring to them," said Li Chaolin, a coal analyst at an industry body based in Beijing.

They are right to be concerned. Six government officials in the Luliang region of Shanxi were sacked after a blast at a small mine, approved to re-open just a month earlier, killed 34 in June, the state-run Xinhua news agency reported.

China has been pushing forward a safety campaign for three years, shutting down the kind of small, inefficient and often dangerous mines that provided 38% of its coal last year.

Around 90% of China's coal mines are classified as small, but they are eight times more deadly per ton of coal produced than the larger mines.

From 1995 to early 2008, the number of coal mines in China had fallen around 80% to about 16,000. Over the same period the death toll is down 40% to 3,786 in 2007, according to the State Administration of Coal Mine Safety.

Beijing's goal is to reduce the number of small mines to under 10,000 by 2010, and to eliminate them by 2015.

But in late May, when coal stocks in the country's key power plants had fallen to critical levels and summer power shortages loomed, China's premier Wen Jiabao called for an increase in coal output, while the country's cabinet asked local governments to speed up approvals for restarting small coal mines.

Some have returned to production in Shanxi, China's top coal producing province, but many are still closed or performing maintenance, traders and analysts said.

And in late June, the Shanxi provincial government ordered local governments to shut down illegal coal mines, highlighting the conflicting signals that have kept officials cautious.

"How can local officials re-open small mines? They want to keep their jobs," said a trader based in Shanxi, who declined to be named.

PRICE CAP INEFFECTIVE

Last month, Beijing froze the price miners are paid for thermal coal until the end of the year as it seeks to cap power prices, knocking shares of listed coal firms such as China Coal Energy Co and China Shenhua Energy Co lower.

But this has had the perverse effect of discouraging mine production and making coal exports more attractive, while not doing anything to cut losses at power generators as the order does not cover prices further down the distribution chain.

In two years China's power generators have received just a 4.7% increase in the state-set prices they can charge; not enough to offset the soaring price of coal, which until June's freeze had been freed to float with the market.

Asian benchmark thermal coal prices have trebled in just a year to record highs, while domestic supplies remain tight, so local prices should keep rising.

"Miners understand if they don't dig out all the coal now, they can sell later for a better price. Natural resources will only get more precious," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

IMPACT ALREADY FELT

The impact of the coal shortage is already being felt. There have been record power shortfalls in Shanxi Province, where the government had to ration power supplies, hurting energy-intensive plants such as aluminium smelters.

China's top 20 aluminium smelters, including Aluminium Corp of China Ltd (Chalco), will cut production by up to 10% to reduce power consumption.

Other industrial provinces, such as Shandong in the north and Guangdong in the south, have forecast deep power deficits.

Henan, another big aluminium producing province and one of the nation's most popular, has started to restrict power to industrial users in eight regions and cities, while Shanxi province on Thursday said it had begun to ration power supplies as power plants ran short of coal.

Some of the power shortfall can be met by diesel generators, and in fact during the last major power crisis in 2004 China's diesel demand surged by 15%, helping oil prices' first ascent above $50 a barrel.

The ultimate solution, though, would be to allow markets to set power tariffs, but Beijing would be reluctant to make such a move when inflation is already near a 12-year high.

"If the power tariff is opened up, all problems will be solved but its possible impact on the economy is still in question," said Lin of Xiamen University.
($1=6.860 Yuan).

Sensor and Sensibility

Sensor technology seems of unlikely importance to the mining industry, but in recent years it has proved pivotal to the development of new technologies capable of increasing productivity and safety within operations. Nowhere is this more likely to be the case than in Australia, where the Commonwealth Scientific and Industrial Research Organisation (CSIRO) has been busy researching a number of projects that rely heavily on sensor technology.

The country’s national science agency is rapidly rising in stature among the global mining community, having developed a number of solutions that have gone on to be adopted by the commercial sector. The government-funded research organisation first became involved in the mining sector in the mid 1990s – coincidently for a project that has only recently proved fruitful, thanks in no small part to the role of sensor technology.

The right timing

Often working in tandem with key industry players, CSIRO can spend anywhere from a couple of years to a decade researching and trialling technology protocols before launching into the commercial sector. In 1994, the organisation began a project aimed at developing automation for drag lines in open cut coal mines. The system is applied to large cranes used to rip the rocks from the surface following blast drilling and uses sensor technology to create digital terrain mapping of the often unstable ground below.

Although the system still requires an operator onboard the crane, the system brings a degree of automation to operations, therefore theoretically adding greater efficiency and precision. Given the hundreds-of-million-dollar values of some of these vehicles, the technology also has fierce potential to remove some of the maintenance costs often picked up from the brutal nature of the job.

The CSIRO’s science leader for robotics Jonathon Roberts says overall he believes now is the right time for the project to finally prove fruitful.

"This is a very old project and one of the reasons our group first came into existence. We have now done two proof of concept projects, where we have tested the system on large cranes for a few weeks at a time – the last one being back in 2004. As with most of our projects, the technology is on the leading edge and it has since been a case of the industry catching up," says Roberts.

"The technology has matured and the sensors are now more robust and available off shelf at a reasonable price. Also the expensive computer systems we used to process the information in the mid 1990s can now be replaced with a standard ruggedised laptop. Finally, there has been a huge drive from the mining industry itself to improve efficiencies at existing mines."

Laser quest

The sensors utilised in the Dragline Swing Assist (DSA) project are laser scanners, which measure the distances to and from objects via laser beams. In this instance, the laser sensor sits on the axis of the crane, rotating around until it builds up a picture of the ground underneath. The technology stems from a system originally designed for factories to prevent human contact with dangerous equipment – whereby the laser beams would trigger the equipment to stop if its boundaries were breached.

It first emerged in the mining sector when the technology evolved into a mapping aid device for surveyors. The transition into the DSA project was, however, not so simple.

"The early system could understand its own positioning but not where the ground was, so the operators in effect had to train the sensors. This meant we had to be very conservative when swinging the boom as the precision was not yet in place," Roberts says.

"With the sensors now available we can develop systems so that the machine itself monitors the ground and is able to adjust according to the change in heights. As the machines are offloading material each day and bulldozers are moving around, the sensors must be constantly kept updated to know where exactly everything is."

Going down under

The sensors’ value above ground has also been put to good use underground. Another CSIRO project aims to create a robotic truck to automatically load explosives for blasting the underground tunnels. Also at a proof-of-concept stage, the project has a distinct eye on safety as it sets about automating one of the most dangerous mining duties.

By scanning the whole tunnel, the sensors are able to automatically locate the drilled holes and a robotic arm, which uses vision technology, is implemented to feed the explosives into the slot. "The system therefore initially relies on laser scanners to find the hole, before the cameras are used to finely manoeuvre the explosives into position," says Roberts.

Unlike the DSA project, which only caters for a very niche segment of the industry, the automated explosive trucks project could potentially have more widespread implementation. The volatile nature of the job has led to years of research into a full proof solution. Remote control trucks have been implemented in the past – firstly with the driver operating the truck at the entrance of the blasting tunnel and secondly controlling the truck entirely remotely from above ground. The first only increased casualties while the other seriously hindered productivity.

"The only solution was to make the trucks more automatic. They can drive full speed and there is no safety issue – so finally we have a much-needed solution that offers the same productivity without placing people in danger," Roberts says.


The butterfly effect

Evidence of sensor technology already making an impact in the commercial mining world is strongly apparent in CSIRO’s automated haul trucks project. The concept is currently being successfully commercialised by global truck and mining equipment manufacturing giants Caterpillar.

Relying on laser scanning sensors to construct a cross section of a tunnel, which is then fed into the truck’s steering system, the automated haul vehicles completely remove the need for a driver.

"Although the mining industry is conservative, it seems that a lot of new equipment being purchased has these systems built into them. So where fleets are being replaced, this technology is being embraced," says Roberts.

"Sensor technology has certainly taken on a more central role at the CSIRO, although a lot of that technology is being driven by other industries, most notably the automobiles sector. The drive to install these sensors onboard cars for automated parking systems and cruise control is ultimately leading to their mass production, which will cause the overall cost of the sensors downwards," he adds.

China’s Baosteel says profit could weaken in 2009

Baoshan Iron and Steel Co, the listed unit of China’s largest steel mill, said on Thursday it would be hard to achieve a 2009 net profit at this year’s level as it confronts weak demand.

The comments came after Baosteel, the world’s fifth-largest steelmaker, late on Wednesday reported a weaker-than-exected 19.2 percent rise in third-quarter net profit and said key product areas would see losses in the fourth quarter, due to falling domestic steel prices and high raw material costs.

“It will be very difficult for Baosteel to maintain its 2009 earnings at the same level as this year’s, as a medium-term correction has begun in the steel industry,” Baosteel Board Secretary Chen Ying told an online briefing.

Several analysts lowered their forecasts for Baosteel’s 2008 and 2009 earnings after the third-quarter announcement.

Shanghai-based Orient Securities said on Thursday in a note that it expected the company’s earnings per share at 0.68 yuan in 2008 and 0.41 yuan in 2009.

The forecast for 2008 suggested Baosteel could see a loss of around 500 million yuan ($73.13 million) in the fourth quarter.

The global economic slowdown, coupled with a domestic housing slump, has hit China’s domestic demand and exports.

Top steel mills have cut output by up to 20 percent partly due to hefty inventories that are losing value and hurting their cash positions.

Baosteel now has inventories worth about 52.1 billion yuan, Chen said, including 17.7 billion yuan of raw materials and 16.3 billion yuan of finished products.

Sources close to Baosteel Group, the listed unit’s parent company, said earlier this month that the group would cut production by about 1 million tonnes in conjunction with an overhaul of a major blast furnace.

Chen did not comment directly on output cuts, however, saying only that the company would schedule its production in the remainder of the year in accordance with orders it received.

Cui Jian, vice president of Baosteel, told the briefing that Baosteel’s state-owned parent was studying a possible increase in its shareholding in the listed unit but the company itself was not considering buying back its shares.

Baosteel’s Shanghai-listed shares were up 0.22 percent at 4.61 yuan in afternoon trade, underperforming a 2.3 percent rise in the benchmark Shanghai Composite Index