Sandvik - Michaux

14/7/2014

Summary

• Technological and sustainability gap in mining

• The lowering of ore grade

• Energy sources and reserves

• Water

• Several possible technical solutions presented

• Systemic interaction of these issues in the industrial sector

2

Conventional Model for Sustainable Priorities

A completely new

business model is

now appropriate

Business has been done a certain way for the last

100 years. Now lets do it for another 100.

3

At this time, globally it seems, all sustainability work in mining is totally

targeted at community and social engagement; even the environmental aspects

are about planting trees and supporting local wildlife; nothing on reducing

waste/energy/toxins

Dynamic Self Regulating Finite System

This system is not growing and

has been stable for some time

4

Oil

Coal

Gas

5

Exponential growth in a finite system is not sustainable

Consumption of all natural resources are

following this basic pattern over time

Try this for size…

Enough for everyone, for ever

If you are not considering all three of these things then you are not

sustainable

6

48% Decrease in Multifactor Productivity

50

60

70

80

90

100

110

Ind

exed

20

00

-01

= 1

00

Topp et al. (2008) Australian Bureau of Statistics (2012)

7

MFP growth in Australia, selected sectors, average annual growth

Most of the slowdown in Australia MFP

attributable to mining and electricity

generation, water and waste 8

Conventional mining practice is struggling to remain

economically viable

Ore Grades Are Decreasing

9

1800’s North American ContinentLarge nuggets found in river beds

Yes that’s a nugget of pure copper!

Smaller nuggets found in streams

Grade 15-20%Finally started to dig Cu out of the ground 1850’s

10

Metal Price Cost (Indexed to the year 2000)

0

100

200

300

400

500

600

700

Re

al P

rice

In

dex

ed

20

00

-01

= 1

00

Au Cu

Pb Zn

Ag Ni

Al Fe Ore

Year 2008

(GFC)

Cu

rre

nt

Min

ing

cra

sh

ABS 1350.0 Financial Markets - Long term

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1350.0Jul%202012?OpenDocument

ABARES - Australian Mineral Statistics March 2011 12

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1350.0Jul 2012?OpenDocument

Source: Nature 26 Jan 2012, Vol 481 Comment Price $50 USD/barrel Price $147 USD/barrel

Peak Conventional Oil Production - 2006

International Energy Agency

http://makewealthhistory.org/2010/11/11/iea-peak-oil-happened-in-2006/

Source: EIA, en.wikipedia.org/wiki/Oil_Megaprojects, Tony

Erikson “ace” theoildrum.com

GFC

2008

World Crude Oil & Lease Condensate Production,

Including Canada Oil Sands

13

Oil Demand & supply & the GFC

GF

C

Oil is the ability to do work14

GF

C

Oil Production Static

15

China industrial demand dominated the rest of the planet

China now dominates manufacturing and resource consumption

16

We are 8 years into an era of industrial transformation

0

100

200

300

400

500

600

700

Re

al P

rice

In

dex

ed

20

00

-01

= 1

00

Au Cu

Pb Zn

Ag Ni

Al Fe Ore

Oil supply became

inelastic

Chinese industrial

demand

17

Total Mining costs have also risen

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Total Income

Total Expenses

ABS 1350.0 Financial Markets - Long term

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1350.0Jul%202012?OpenDocument

ABARES - Australian Mineral Statistics March 2011 18

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1350.0Jul 2012?OpenDocument

Source: Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) 2008

Energy consumption in mining increased 450% in the last 40 years19

Total energy consumption by process path

This is a very different conversation to recovery efficiency.

Different mineralogy's require different process paths

Source: Energy efficiency and copper hydrometallurgy J.Marsden 2008 Freeport McMoran Copper & Gold

Energy efficiency may be a priority for process design as soon as 2018 21

Total energy consumption as a function of ore head grade for various process routes

Many new proposed operations are considering a cut-off grade of 0.1% on leach pads


22

Rock breakage - There is no free lunch, or short cuts

Kambalda

0.01

0.1

1

10

100

0 5 10 15 20

Cumulative Energy, kWh/t

P8

0 S

ize

, mm

Flowsheet 1

Flowsheet 2

Flowsheet 3

Flowsheet 4

Flowsheet 5

40x10mm Feed

-9.5mm Crush

-3.35mm

Crush

HPGR Pass 1

HPGR Pass 2

Bond Test -

125um CSBond Test -

75um CS

Leinster

0.01

0.1

1

10

100

0 5 10 15 20 25 30

Cumulative Energy, kWh/tP

80

Siz

e, m

m

Flowsheet 1Flowsheet 2Flowsheet 3Flowsheet 4Flowsheet 5Flowsheet 3aFlowsheet 4a

40x10mm Feed

-9.5mm Crush

-3.35mm

Crush

HPGR Pass 1

HPGR Pass 2

Batch Grind 2

HPGR Pass 3

HPGR Pass 4

Batch Grind 3

Batch Grind 1

Mine Site ‘X’ Mine Site ‘Y’

The cumulative energy consumed to process a sample to a target P80 is

very similar across all conventional process paths.

M. Hilden

23

Energy Consumed kJ per lb of copper produced

Mining 6,000 (kJ/lb)

Primary crushing & conveying900 (kJ/lb)

SAG Milling10,700 (kJ/lb)

Ball Milling10,590 (kJ/lb)

Flotation & regrinding

1,870 (kJ/lb)

Smelting5,150 (kJ/lb)

Refining2,700 (kJ/lb)

Transport to market 120 (kJ/lb)

Primary Crush, SAG mill, ball mill, flotation, smelt, refine



Mining 6,000 (kJ/lb)

Primary crushing & conveying900 (kJ/lb)

Secondary crushing

450 (kJ/lb)

Tertiary crushing

450 (kJ/lb)

HPGR1,100 (kJ/lb)

Ball Milling, 10,590 (kJ/lb)

Flotation & regrinding

1,870 (kJ/lb)

Smelting5,150 (kJ/lb)

Refining2,700 (kJ/lb)

Transport to market 120 (kJ/lb)

CV

CVCV

CV

CV

CV

Primary Crush, Secondary Crush, Tertiary Crush, HPGR, ball mill, flotation, smelt, refine



Mining 8,000(kJ/lb)ROM Leaching

1,440 (kJ/lb)

Solution Extraction

1,980 (kJ/lb)

Electrowinning3,840 (kJ/lb)

Transport to market120 (kJ/lb)

Run of Mine (ROM) Leach, Electrowinning


Its all about oil, gas and coal

US Shale Gas ‘Fracking’ Boom

96% downgrade of Monterey shale oil reserves (2/3 of US reserves)

extractable with current technology ~ 600 million barrels down from 13.7

billion barrels (Source EIA) 28

• Production from shale gas ‘fracked’ wells typically declines 80 to 95% in the first 36 months of operation

• For US shale gas industry to maintain 2013 production rates, it needs to drill approx. 7200 new wells each year

• CSG in Australia is considered less productive than US unconventional gas plays

US Shale Gas ‘Fracking’ Bust

• How did the EIA get these fantastic future predictions?

– Take the content of the best gas ‘sweet spots’ in each fracking field

– Take the highest recovery rates of the best fracking wells in each fracking field

– Extend both of these to the entire volume of the fracking gas field

– Sum all fields together, ignore logistical issues and process issues

29

Peak GasYear 2018

Zittel, W. et al, Fossil and Nuclear Fuels – the supply outlook Energy Watch Group March 2013

CSG and shale gas has pushed Peak Gas back from approx. 201030

Peak Coal


Year 2020

Peak date contingent on China selling us their coal31

Supply and demand of Uranium

There is probably enough U for existing nuclear power stations32


Future projection of Uranium production

2014

Nuclear power would have to increase 12-13 times capacity at peak

potential to make up for total energy supply to replace fossil fuels

33


Existing nuclear infrastructure needs replacing

Someone has to pay for these new reactor sites

34

Storage of spent fuel rods

• Spent fuel rods are

very radioactive and

generate a lot of heat

• Need to be stored in cooled

water for 10-20 years

before dry storage

This is the Achilles Heel of

nuclear technology as a solution

to our energy supply problem

35

Peak Oil

Tar and oil sands have pushed back the peak of total oil

supply back 6-7 years from approx. 2006

Conventional and unconventional oil supply


Discovery & Production

Year 2012

36

http://www.zerohedge.com/news/2014-05-30/us-gasoline-consumption-plummets-nearly-75

Source: Zero Hedge, Submitted by Jeff Nielsen via BullionBullsCanada blog

2008

(GFC)

U.S. “gasoline consumption” – as measured by the U.S. Energy Information Administration (EIA)

– has plummeted by nearly 75%

37

http://www.zerohedge.com/news/2014-05-30/us-gasoline-consumption-plummets-nearly-75

http://www.bullionbullscanada.com/us-commentary/26530-us-gasoline-consumption-plummets-by-nearly-75

But peak oil has no influence on mining and is not our problem

(right?)

38

Ore is shifted with diesel fuel (oil)

255 tonne load capacity 200kg (?) load capacity

1 truck = 3400 donkey loads

Bingham: Would we cart 5000tph of rock for

10tph of copper (0.2% grade) without oil? Or

run 66 000 donkey loads an hour…..

Not without its logistical problems

There comes a point when something has to give.

Escondida: 1/3 of total energy consumed is in haulage of ore from pit

floor to plant 39

Energy Return on Energy Invested(EROEI Ratio)

40

Current industrial based society requires and EROEI of 10:1

New conventional oil (12-18:1)

EROEI(The song and dance needed to get the energy)

• Conventional Oil 12-18:1

• Tar Sands Oil 3:1

• Shale Oil 5:1

• Coal 50-80:1

• Conventional LNG gas 10:1

• Shale Gas 6.5:1

• Hydro Power 20-40:1

• Solar Power 2-8:1

• Wind Power 18:1

• Conventional Nuclear 5:1 including the energy cost of mining U (10:1 as quoted)

Some Perspective

European medieval

society EROEI was

Approx 1.5:1

• Biogas 1.3:1• Bio-ethanol 1.3:1

41

Quantity of Energy at Application

• Current oil demand is 87.4 Mb/day or 31.9Gb a year

• This translates to a little under 62 GW of energy

• The average coal power station outputs 650MW

• The average gas power station outputs 550 MW

• The average Nuclear power station outputs 850MW

• The gigantic Three Gorges Dam hydro project in China outputs 18.2 GW

• The new solar power stations being commissioned output 350MW

• An offshore wind turbine on average outputs 3.6MW42

So one year current demand for oil, could be replaced with:

• 191 coal fired power stations each year for 50 years

• 248 gas power stations each year for 50 years

• 354 industrial scale solar power stations each year for 50 years

• 146 nuclear power plants each year for 50 years

• 7 Three Gorges Dams projects each year for 50 years

• 34 400 off shore wind turbines each year for 50 years

43

World supply of fossil fuels and uranium


Peak energy approx. 2017

Industrialisation in a global context will soon tip into

contracting economies - the end of growth based economics 44

45

Corporate culture genuinely does not know where to start to instigate a major shake-up of technology and approach; instead across the board,

focus has been on short term risk aversion

1900• Cu Grades of approx. 20%

• Energy EROEI of approx. 100:1

2014• Cu Grades of approx. 0.3% (considering 0.1%)

• Energy EROEI of approx. 12-18:1

46

Economies of Scale Has Carried the Industry

Cheap abundant energy

Available credit for

industrial procurement47

Global Potable Water Consumption Over Time

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1930 1940 1950 1960 1970 1980 1990 1995 2000

Wat

er

dra

w (

km3/y

ear

)

World water use by economic sector (km3/year) (Shiklomanov 2000)

Agriculture use

Municipal use

Industrial use

Reservoirs

Total (rounded)

49

Global water use is

divided as follow:

•70% Agriculture

•22% Industry

•8% Domestic

Global physical and economic water scarcity

50

Source: World Water Development Report 4. World Water Assessment Programme (WWAP), March 2012.

Development of industrial sites with high potable water volume requirements will

increasingly conflict with the needs of the growing population

http://www.zaragoza.es/ciudad/medioambiente/onu/en/detallePer_Onu?id=71

The amount of fresh water supply provided by the

hydrological cycle does not increase. Water everywhere on the planet is an integral part of the hydrologic cycle.

Many major rivers; Colorado, Ganges, Indus, Rio Grande and Yellow are so over-tapped that they

now run dry for part of the year.

Freshwater wetland has shrunk by about half worldwide.51

Access to Potable Water

In the West, we take water for granted. Most people don’t actually think about the supply of water. Water is easy to ignore provided you can still turn on a tap and water comes out!

We still have the same amount of water in our ecosystem but the supply of freshwater faces a three-pronged attack from population growth, climate change and industrialisation. As it currently stands, there’s not enough water to go around.

The same mentality is within our industrial culture

52

71.5

62.361.6

55.0

57.0

59.0

61.0

63.0

65.0

67.0

69.0

71.0

73.0

75.0

1980's 1990's 2000's

Ave

rage

A*

b

Comminution Impact Breakage A*b

Ore has been progressively getting harder

Softer

Harder

~3000 Drop Weight Tests

What does this

mean?

More power draw is required

to break the rock53

Target Grind Size is Decreasing

54

1 mm

Target ore P80 = 150mm

10 mm

Target ore P80 = 4mm

General form of the Energy-Size relationship

An exponential

increase in required

power draw

A decrease in

plant final grind

size P80

=A decrease in

metal grain size=

En

erg

y, k

Wh

/t

Hukki 1962

55

Dynamic Interaction and Exacerbation

• Power & water shortages

• Decreasing grade requires more tonnes of rock extracted for the same resulting amount of target metal.– More energy is needed (diesel and electrical power draw) per unit of

extracted metal

– More potable water is needed per unit of extracted metal

• Increasing ore hardness requires more power draw to crush and grind the ore

56

Dynamic Interaction and Exacerbation• Decreasing grind size due to finer mineral grains requires more

power draw to crush and grind the ore– More water is needed per unit of extracted metal

– Water recycling is more difficult

– More disseminated finer grained rocks are usually harder to crush and grind

• To remain economically viable operation scale has to double/triple in size

• Metal demand is growing fast

Once our society understands what is happening and why,

everything will need to be re-engineered.

Which will require vast amounts of metal! - QUICKLY

This is where you will be needed

57

En

erg

y, k

Wh

/t

Hukki 1962

Fine grained minerals are almost

always associated with low grade

The exponential increase in required energy as mineral

grain size gets smaller is happening at a time when

available quantity of energy is vastly reduced

Dynamic Interaction and Exacerbation

58

M. Lardelli

Driven by increasing demand

Production is Increasing

59

Economic goal posts are shifting for future deposits

• Huge low grade deposits

• Penalty minerals more prominently present in deposit that prevent efficient processing

• Ever decreasing grind sizes (close size 10-20mm)

• Operating on an economy of scale never been seen before (4MT blasted rock a day, 40% of which is ore!)

• To stay economically viable, economics of scale have to be applied. Operations will double and triple in size.

All of this based on the assumption that there is no energy or water shortage

60

Future underground block caves are going to be the size of

existing open pits. Open pits of unprecedented size.61

With a continuing grade of 0.5% this will require 20000Mt of Rock

With a decrease of grade to 0.2% this then requires 50000Mt of Rock

Copper Demand Outlook

Is this sustainable?

World Cu grade 0.5%

17Mt

3400Mt of RockWorld Cu grade

1.6%

Eventually the cost of dealing with the wastes will exceed the value of the metal…

With current estimations the demand for copper will increase to ~100Mt by 2100

62

Copper is a finite resource like any other

Forecast

Historical

Global Cu production by

principal geological

deposit types

63

Conventional mining problem solving is if the numbers don’t

stack up, its not viable and the project doesn’t start

There is no ‘Plan B’ if higher grade easier to

work deposits are unavailable 64

This is not a tickling competition

• Raw materials supplied by mining are required for our industrial society to run. That supply must continue in some form

• Engineering problem solving according to new target parameters

• Knowledge of deposit ore variability needs to be matched with sophisticated flexible engineering design

• Put less ore in the mill for the same metal output– Sorting technology

– Unconventional exploitation of geological characteristics

• Dry process

• More sophisticated system based modelling of existing technology

• Bacterial leach

• Remove all time pressure– NPV is no longer important

– Take the time to process each ore parcel at maximum efficiency65

1 - One process stream, flexible operation

• Engineered ability to more easily adapt to variable feed

• And to a series of dynamic conditions, that are not a steady state

• More sophisticated process control capabilities to manage dynamic non steady state conditions

Operation can liberate and separate

most efficiently each ore parcel

in a responsive manner, resulting in

higher operational revenue

66

2 - Multiple process streams in the same operation, each with its own stockpile

Each stream with its own closing size and cutoff grade returning

the same recovery with lower CAPEX/OPEX

Geomet

Block Model

Blast

Sorting

Dump

Leach

Pad

Tank

Leach

Flash

Flotation

Flotation

Flotation

67

3 - Flexible operation to process different size fractions in different streams

• SAG mill critical particle size -75+40mm

• SAG needs coarse fragments and fines to run

• HPGR needs over size to be crushed to protect it

ball Mill

2 x Cone crush

RoM

20 mm

5mm

2mm

PumpSump

deagglomerate

HPGR

SAG

50 mm

pebbles

Variable splitter

2000 tph

1000 tph

600 tph

300 tph 1000 tphfresh

300 tph

Recycle surplus pebbles

Cyclone

1600 tph

Each comminution unit operates

at peak efficiency resulting

in higher throughput

Prof. Malcolm Powell68

4 - Flexible operation that uses sorting to remove waste rock throughout the whole mining system

Geomet

Block Model

Blast

Sorting

Dump LeachPad

Flotation

Flotation

Sorting Sorting

Future Ore

Working Ore

Waste dump

Problem ore with

‘show stoppers’

Only a fraction of the ore volume goes to ball mil for same recovery

resulting in lower CAPEX/OPEX69

5 - Flexible Operation to meet challenging external conditions

Engineered ability to more easily adapt to changes to external circumstances

• Power shortages, outages, power spikes

• Potable water shortages

• Fluctuating price of steel consumables

• Fluctuating price of saleable metal

Operation can still operate

and produce revenue

70

Change the fundamental process flow path

• All solutions presented so far are step changes to the existing conventional mining process

• What is required is a fundamental rethink and restructure of the mining process from the fundamental science foundation all the way to engineering design

• A radical change in business model is also required– We no longer have the time or capacity to meet desired production

targets

71

So completely change the approach

The engineering to do this at an industrial scale is already here

73

Solar power stations now have a capacity of the order of 350MW

Solar smelting of ore

• Mine then crush ore to optimum size

• Process through solar smelter unit in batches

• Exploit difference in melting temperatures

• To either extract target element directly or,

• Upgrade a low grade disseminated texture into something more feasible– As molten rock cools, could it be mixed in a way to bond like with like

so metal grains are larger and closer together

– Easier to process texture

– Rock more brittle and weakened in strength

74

Remove NPV time pressure and requirement for high throughput tonnages

Approximate Temperature

(°C)Minerals which are molten

1200°C All molten

1000°COlivine, pyroxene, Ca-rich

plagioclase

800°CAmphibole, Ca/Na-

plagioclase

600°CQuartz, K-feldspar, Na-

plagioclase, micas.

MetalApproximate Melting

Temperature (°C)

Density

(g/cm3)

Aluminum 659°C 2.70 g/cm3

Iron 1538 °C 7.86 g/cm3

Copper 1083°C 8.96 g/cm3

Gold 1063°C 19.3 g/cm3

Lead 163°C 11.34 g/cm3

Magnesium 651°C 1.738 g/cm3

Nickel 1452°C 8.908 g/cm3

Silver 951°C 10.49 g/cm3

Tungsten 3399°C 19.25 g/cm3

Zinc 419°C 7.14 g/cm3

Density 1.8-3.5g/cm3

Exploit the difference in melting temperature and density

75

ROCK ELEMENT METAL

All mineral processing exploits a physical or chemical difference

between the target element and its host rock

Mine Crush

0.6 MW2-5 MW

Grind Flotation Smelt

50 MWPotable water

5 MWPotable water

20 MW

76

A job for the JKMRC~ 1 MW?Dry process

Solar Smelting

Decreasing

Grade

Sovereign Debt

Default

Decreasing

Grind size+Increasing

Depth+Peak Fossil

Fuel+

Peak

Mining

Credit

Freeze+ Structural

Inflation+

FIAT

Currency

Devaluation

+Peak

Finance

Peak

Manufacturing

Peak

Industrialisation

=

=

The End of the

Industrial Revolution

Expansion of production needed to stay viable

Expansion of money needed to service debt

The Industrial Big Picture

160 years after it started

77

The writing on the wall• Everything we need/want to operate is drawn from non-

renewable natural resources in a finite system

• Most of those natural resources are depleting or will soon

• Demand for everything we need/want is expanding fast

• When these trends meet, there will come a point where how we do things will fundamentally change

• None of these issues can be seen in isolation.

78

‘Must’ expand exponentially Can’t expand

Deteriorating

Chris

Martenson

http://www.peakprosperity.com/crashcourse

The Pickle and the Rub…

This is the only thing that can change

79

Forced

TransformationUnderstand

true implications

Deterioration and

Fragmentation

Decay/Collapse

Write-off/Reset

Mounting

Stress

We

are

h

ere

Conquest of another system

Fundamental Reform

Mounting

Stress

Existential large

scale crisis

Existential large

scale crisis

business as usual

Early small

scale crisis

All 5 Stages of Human Grief at all scales

Deterioration and

Fragmentation

Temporary solution loop

Where

we are

Where we

should be

Inelastic oil

supply 2005

Peak Total Energy

2017

With 20/20 hindsight

business as usual

Early small

scale crisis

This diagnoses a certain outcome80

Systemic environmental

disruption

Natural raw materials

unavailable for

industrialisation

Energy supply

disrupted then

unavailable

• Reset all FIAT currencies – asset based

• Restructure all debt

• Need to grow into new system

• Cannot sustain growth

• Cannot grow economy system

• Change to alternative energy system

• Rebuild all infrastructure to meet

requirements of new energy system

• Cannot supply raw materials for

construction or manufacture at needed

rate or volume, if at all

• Need to reassess what is really needed

• Mine our rubbish dumps

• Cannot run any existing system for

very long

Financial

Systemic

Meltdown

Gro

win

g P

op

ula

tio

n

• Puts pressure on all other sectors except finance

Paradigm changing information is right in front of us if we choose to see it…

Everyone should try thinking for themselves at least once

Now would be a good time 82

Thank you for your time

Simon Michaux Bach App Sc. PhD [email protected]

83

mailto:[email protected]

Case Study 2: Mogalakwena

• Mogalakwena platinum mine in South Africa hit several sustainability limits

• The mining corporation in question was not doing anything unusual in mining operational parameters (no unusual site restrictions)

• Operation expanded several times

• Villages were sometimes moved to accommodate this

• Operation was in direct competition with local population for water and power supply

• Local population depended on mine operations economically

• Multiple power shortages & water shortages

• Mine site would occasionally crash local power grid

• In this case, the conventional mining process was in direct conflict with the sustainability of local population

This site put the spot light on thesustainability issue in all its forms

85

Peak Oil

The NET peakoil curve (or "Net Hubbert

Curve") is what really counts ... and

given that two-thirds of all global crude

oil supplies is now HEAVY SOUR (and

thus much more energy intensive to

refine), and only 1/3 is LIGHT SWEET

crude i.e., given that most of the low-

hanging fruit has already been extracted.

EROEI Ratio for

Oil extraction

Net Hubbert Curve

86

Energy Density of Oil

1 litre of Petrol = 132 hours of hard labour

• Put 1 litre of petrol in your car

• Drive it till it runs out

• Push car back to start point

At $15/hour

1 litre of petrol = $1981.20

87

Oil producing countries past their peak

Source: Ludwig-Bolkow Systemtechnik GmbH 2007 HIS 2006; PEMEX, petrobas ; NPD, DTI,

ENS(Dk), NEB, RRC, US-EIA, January 2007 Forecast: LBST estimate, 25 January 2007

88

Production stable

Number of rigs

going up

Has Saudi Arabia Peaked?

89

Sandvik - Michaux

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