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Mitigating Risk in the Mining Sector: Best Practice Implementation & Independent Audits

Mitigating Risk in the Mining Sector: Best Practice Implementation & Independent Audits. Jean Richardson, Andre McKen, Russ Calow, SGS Minerals Services Outi Maatta, SGS Systems, Standards and Certifications Adrian Shaw, SGS Project Finance. Definition of Risk, Risk Management.

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Mitigating Risk in the Mining Sector: Best Practice Implementation & Independent Audits

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  1. Mitigating Risk in the Mining Sector: Best Practice Implementation & Independent Audits Jean Richardson, Andre McKen, Russ Calow, SGS Minerals Services Outi Maatta, SGS Systems, Standards and Certifications Adrian Shaw, SGS Project Finance

  2. Definition of Risk, Risk Management • Risk - the effect of uncertainty on objectives • Risk management • identification, assessment, and prioritization of risks • followed by coordinated and economical application of resources • to minimize, monitor & control probability and/or impact of unfortunate events • to maximize the realization of opportunities ISO 31000, Nov 2009

  3. Risk in the Minerals Sector MINERALS PROJECT FINANCE SSC

  4. Cost containment Industry consolidation Access to capital Keep social license to operate Climate change Skills shortage Lack of infrastructure access Access to secure energy Resources nationalization Pipeline shrinkage Technical/operational Strategic Financial Social Environmental Operational/Human Resources Location Location/Operational Political Strategic Top Risks to Mitigate, 2009/2010 Ernst and Young, 2009.

  5. CEOs’ Concerns, 2009/2010 2010 2009 54% Somewhat or extremely concerned Pricewaterhousecoopers, 2010

  6. 3-4% of global energy consumption used for comminution. Of this 1% is used for grain size reduction. 1% 14% 85% Alavadro et al 1998 Energy Use • South Africa (Eskom) generates 38 GV/yr • AngloPlats uses 1 GV/yr • 40% in comminution and smelting • Less than 1% results in grain size reduction Rule 2009

  7. Comminution Update • Technology advancements • Jaw, cone crushers → ball& rod mills → SAG & FAG mills → HPGR • Complex deposits, complex mineralogy, fine grained ore • Finer grinding needed – UFG, Activox, multiple regrinds • 1998 High Definition Mineralogy • 2000 Variability in hardness & grindability - geometallurgy • Simulation and modeling in feasibility • Process and systems control • Technical and management audits • Plant improvements & ISO 50001 • Need, costs and availability of power • Carbon emissions

  8. Technology Advances • Replace old equipment & assess technologies • Design flowsheet for mineralogy – can require fine grinding • HPGR more energy efficient 40% 20% coarse fine Rule et al., 2009

  9. Hardness Domains Complex DepositsMapping Variability/Geometallurgy SGS SPI Grindability Test • Tumbling (abrasive) test • 2 kg of 22 mm top size • Good for variability mapping • Batch test • Yields SPI & Ci for SAG design

  10. SGS SPI Database soft hard

  11. Simulate & Populate the Block Model t/h P80 t/h P80 t/h P80 t/h P80 t/h P80 t/h P80 SAG MILL BALL MILL Comminution Model SGS CEET Completed

  12. Throughput Modeled in 3D 5000 4500 Peruvian Porphyry Cu-Au Blue / soft ore/ high tph Brown / hard ore/ low tph

  13. Predict Power Needs by Year(SAG and Ball Mills) BALL MILL SAG MILL P80 hard Bulled, 2007a, b

  14. Technical Audits • Technical Audits (Plant optimization) • Surveys, sampling, analysis, troubleshooting • Many plant parameters • PSA, critical size build-up, mill speed, pulp density

  15. Results Oriented: Improved Profitability Au oxide plant • Optimization increased throughput by 9.5% at similar grind • No CAPEX • New revenue $US13M/yr Cu plant • Implementation of a pre-crusher improved power efficiency 31% for hard ores • Capex = $US 11M • New revenues $US 40M/yr

  16. Management Audits: ISO Standards • BS EN 16000 → ISO 50 0001 • Energy supply and use including equipment and systems • Procurement and use-related disposal issues • Continuous improvement cycles ANSI/MSE 2000-2008

  17. Value of Systematic Energy Management PRODUCTION • Decreased energy use • Controlled energy costs • Improved operational efficiency PLANNING • Data for fact-based decisions • Operating and capital spending • Purchasing strategies PROTECTION • Protection against energy market instabilities • Reduced environmental impacts, show corporate social responsibility • Competitive advantages

  18. SGS: a Partner in Risk Mitigation

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