cim magazine may 2009

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May • mai 2009 www.cim.org

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CONTENTSCIM MAGAZINE | MAY 2009 | MAI 2009

NEWS11 Federal government announces new CSR

strategy Measures to help Canadian companies fulfillsocial and environmental responsibilities when operatingabroad by P. Caulfield

12 A sparkling part of Ontario history De BeersCanada donates diamonds for refurbished legislative mace by A. Gordon

14 The National Geographic article on oil sandsmining An open-letter response to a report that portraysthe heavy oil industry in poor light by G. Winkel

17 MOU signed for Warren Township calciumfeldspar project Avalon Rare Metals Inc. and theChapleau Cree First Nation reach agreement by M. Eisner 12

4 | CIM Magazine | Vol. 4, No. 3

UPFRONT20 Doing well by doing good Rockwell Diamonds’ social responsibility initiatives in

South Africa by P. Caulfield

22 Getting it down to a fine grind OceanaGold uses IsaMill™ technology tostreamline operations at Reefton by M. Eisner

24 The world has BGAN Satellite communications keep even the most far-flung out-posts connected by R. Bergen

26 Ask the experts University of Alberta mining engineering students learn decision-making skills from industry executives by P. Caulfield

28 Turning fiction into reality Mining on the moon is fast becoming much more thana dream by G. Baiden

32 Making a world of difference NRCan’s Assistant Deputy Minister Stephen Lucasdiscusses the global role of the Canadian mining industry by D. Zlotnikov

24

22

CANADA’S GLOBAL IMPACTL’IMPACT MONDIAL DU CANADA

37 Canadian mining’s worldwide reach An overview of the challenges involved and strategiesdeployed in keeping the industry’s global lead by D. Zlotnikov

46 La portée mondiale de l’exploitation minière canadienne Prendre un rôle de premierplan sur la scène mondiale

37

FEATURED MINEMINE EN VEDETTE

67 Golden opportunites Alexis MineralsCorp.’s Lac Herbin mine entered fullproduction late last year by P. Diekmeyer

71 Occasions en or La mine Lac Herbin,propriété de la Corporation minière Alexis,est entrée en pleine production à la fin del’an dernier

COLUMNS49 Supply Side by J. Baird

50 Canadians Abroad by R. Bergen

52 MAC Economic Commentary by P. Stothart

54 Eye on Business by R.L. Shirriff & A.E. Derksen

55 Innovation by G. Winkel

58 Student Life by M. Chowdhury

61 HR Outlook by J.P. Chabot

63 Parlons-en par I. Milord & R. Simard

64 Mining Lore by R. Bergen

90 Voices by L. Raitt

CIM NEWS74 A breath of fresh air A profile of CIM

Distinguished Lecturer Jan Nesset and his work by R. Pillo

76 Molybdenum, served with beer CIM LosAndes Branch rings out 2008 with a lecture andsome ale by S. Tarbutt

76 For the love of mining CIM Sudbury Branchhosts its popular annual Valentine’s Day ball by G. Darling

77 Bridging the gap A magnanimous donationstrengthens the Canadian Mining and MetallurgyFoundation by R. Bergen

78 CIM 2008 membership survey high-lights What members think of CIM’s service andperformance

HISTORY81 Butte, Montana (Part 2) by R.J. Cathro

84 Platinum in Bophuthatswana by F. Habashi

TECHNICAL SECTION86 This month’s contents

IN EVERY ISSUE6 Editor’s Message 8 President’s Notes / Mot du président

10 Letters73 Welcoming new members73 Obituaries80 Calendar89 Professional directory

67

Editor-in-chiefHeather Ednie [email protected] EditorAngie Gordon [email protected] EditorsNews and Features:Angie Gordon [email protected] and CIM News:Joan Tomiuk [email protected] and Technical Section:Minaz Kerawala [email protected] Editor Joan TomiukPublisher CIM

Contributors Greg Baiden, Jon Baird, Ryan Bergen,Louise Blais-Leroux, R.J. Cathro, Peter Caulfield, JeanPierre Chabot, Mohsen Chowdhury, George Darling,Andrew E. Derksen, Peter Diekmeyer, Marlene Eisner,Fathi Habashi, Isabelle Milord, Robbie Pillo, TheHonourable Lisa Raitt, Robert L. Shirriff, Régis Simard,Hal Steacy, Paul Stothart, Simon Tarbutt, Gord Winkel,Dan Zlotnikov

Published 8 times a year by CIM855 - 3400 de Maisonneuve Blvd. West Montreal, QC, H3Z 3B8Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: [email protected]

Subscriptions Included in CIM membership ($150.00); Non-members (Canada), $168.00/yr (GST included;Quebec residents add $12.60 PST; NB, NF and NSresidents add $20.80 HST); U.S. and other countries,US$180.00/yr; Single copies, $25.00.

Advertising SalesDovetail Communications Inc.30 East Beaver Creek Rd., Ste. 202Richmond Hill, Ontario L4B 1J2Tel.: 905.886.6640; Fax: 905.886.6615www.dvtail.com National Account Executives 905.886.6641Joe Crofts [email protected] ext. 310Janet Jeffery [email protected] ext. 329

This month’s coverIAMGOLD’s Rosbel gold mine in Suriname at sunset.Photo courtesy of IAMGOLD

Layout and design by Clò Communications.

Copyright©2009. All rights reserved.ISSN 1718-4177. Publications Mail No. 09786.Postage paid at CPA Saint-Laurent, QC.Dépôt légal: Bibliothèque nationale du Québec.The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or inany discussion appearing in its publications.

Printed in Canada

A nation of innovators

Iam Canadian. Proudly! Though I wear many labels, that is one I feel moststrongly about. There are plenty of reasons to be proudly Canadian, and this issue tells that

story. The minerals industry is a shining example of how our fellow Canuckshave built a strong reputation globally. As positive leaders. As innovativethinkers. As responsible operators. We can be confident of what we do, and ofthe people who came before us.

Canadians have long been leaders in the global minerals industry, and as agroup, we’re committed to maintaining that leadership. The Canada MiningInnovation Council (see interview with ADM Stephen Lucas, p. 32) will bringindustry, government and academia together to achieve that goal.

We’re a nation of innovators. Canadians have driven the industry’s leadershipin corporate social responsibility. Globally, Canadian mining companies have setthe bar when it comes to community involvement and responsible practices.Barrick and IAMGOLD are but two of the many companies improving conditionsfor local communities worldwide. Some of their stories are shared in thismonth’s feature article, Canada’s Global Impact, on page 37.

Going forward, we have what it takes to maintain our country’s internationalreputation and to ensure continued success of our operations. We have the rightpeople to make it happen. The Honourable Lisa Raitt, Canada’s Minister ofNatural Resources, makes it clear in her editorial on page 90. I can’t wait to seethe market recovery unfold, and to witness the further developments that willarise, developments I know will be driven in great part by my fellow Canadians.

Sincerely,

Heather EdnieEditor-in-chief


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president’s notesDear Members,

This month’s issue is all about Canada’s global impact.Our resource industry is as influential as it is far-reaching.Canada is a producing nation, a hub for equity financing andtrading, and a preferred hot spot for exploration.

The mining industry contributed $42 billion to thenational GDP in 2007 and accounted for 19 per cent of allCanadian exports (or about $81 billion). Exploration expen-diture in Canada was $2.6 billion and, worthy of note, onein 20 exploration dollars worldwide was invested in thenorthern territories.

It’s also interesting to note that even when explorationtakes place outside of the country, much of the capital israised in Canada. More than 1,300 mining companies fromaround the world are listed on the TSX alone — whichequates to 35 per cent of the worldwide mining equity.

Canadian mining and exploration companies operate allover the world. There is also a strong secondary industry inCanada with about 3,000 supplier companies providing tech-nology, equipment and data to companies around the world.

We should all be proud of what this industry has accom-plished in Canada and beyond its borders. In an ever-chang-ing world, we are a part of something bigger, something

global, and Canada’s influencewithin the worldwide mining industryis substantial.

This is my last message to you asCIM president. I have enjoyed meet-ing and working with many of youover the past 12 months and mythanks goes out to the CIM team andvolunteers for all their hard work,much of it behind the scenes. I wouldalso like to take this opportunity towish my friend and colleague, MikeAllan, all the best as our new CIM president.

Finally, I would like to leave you with my encourage-ment to continue being involved in CIM and the CIMFoundation. It is also important to keep using this uniqueplatform for knowledge sharing and networking for thesustainability of Canada’s resource industry.

All the best,Jim GowansCIM President

Chers membres,Ce mois-ci, l’édition du Magazine porte entièrement sur

l’impact global du Canada. Notre industrie des ressources aautant d’influence qu’elle a de portée. Le Canada est unenation productrice, un carrefour pour le financement paractions et l’inscription à la bourse; c’est aussi un point chaudpréférentiel pour l’exploration.

L’industrie minière a contribué 42 milliards de dollars auPIB national en 2007 et elle représente 19 pour cent de toutesles exportations canadiennes (soit environ 81 milliards de dol-lars). Au Canada, les dépenses en exploration ont atteint 2,6milliards de dollars; il faut mentionner qu’un dollar d’explo-ration sur vingt à travers le monde a été investi dans les territoires nordiques.

Il est aussi intéressant de noter que même lorsqueI’exploration a lieu à l’extérieur du pays, une grande partie descapitaux a été levée au Canada. La Bourse de Toronto (TSX)compte à elle seule plus de 1300 compagnies minières departout au monde – ce qui représente 35 pour cent desvaleurs minières mondiales.

Les compagnies minières et d’exploration canadiennesexploitent partout à travers le monde. Le Canada comporteaussi une forte industrie secondaire d’environ 3000 compa-gnies fournissant de la technologie, des équipements et desdonnées à des compagnies à travers le monde.

Nous devrions tous être fiers de ce que cette indus-trie a accompli au Canada et à l’étranger. Dans ce mondeen perpétuel changement, nous faisons partie d’uneentité plus grande, d’une entité mondiale, et l’influencedu Canada au sein de l’industrie minière mondiale estimportante.

Ce message constitue mon dernier en tant que prési-dent de l’ICM. J’ai vraiment aimé vous avoir rencontrés etd’avoir travaillé avec plusieurs d’entre vous au cours des12 derniers mois; j’adresse mes sincères remerciements àl’équipe de l’ICM et aux bénévoles pour tout leur travailacharné, dont une grande partie a été effectuée encoulisse. Je voudrais aussi saisir cette occasion poursouhaiter mes meilleurs vœux à Mike Allan, un ami et collègue, en tant que nouveau président de l’ICM.

Finalement, j’aimerais vous laisser avec des encour-agements à persévérer dans votre implication avec l’ICM etla Fondation de l’ICM. Il est important aussi de continuer àse servir de cette plate-forme unique de partage et deréseautage pour assurer la durabilité de l’industrie canadi-enne des ressources.

Mes meilleures salutations,Jim GowansPrésident de I’ICM

Canadian mining — part of something bigger

Les mines canadiennes — une partied’un grand ensemble

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“Canada will soon be attracting world attention.”“That’s nothing new… its mining expertise hasattracted world attention for generations.”

A job well done

I just received myMarch/April issue of CIMMagazine and have read theQ&A article on Professor JimFinch — a very nicely donestory. I have known Jim Finch,as well as the details of hisresearch over the years, and yourwriter, Minaz Kerawala, is to becongratulated on capturing theessence of both the man and hiscontributions, as well as hisinsights, very well.

Sincerely,Jan Nesset, P.Eng, F.C.I.M.NesseTech Consulting Services Inc.

Props for processing

Congratulations on the contents of the latest CIMMagazine. Finally an issue that emphasizes processing insteadof exploration or mining. Keep up the good work!

Special appreciation to Nathan Stubina for including the“Sulphide Spotter” in his write-up.

Thank you, Gus Van WeertMining Consultant and PresidentORETOME Ltd.

Today’s mining operations are massive

and complex. Keeping them safe takes

as much cutting-edge knowledge

and commitment as keeping them

profitable.

Which is why CIM is developing acomprehensive online miningsafety resource.

CIMSafety.orgis a website for industry personnel,managers, media and anyoneconcerned with the issues of,challenges to and developments insafety at mining operations.

• Learn about best practices• Share safety insights• Get updates on events• Network with safety

professionals


lettersThere’s more to mine safetythan wearinga hard hat

news

May 2009 | 11

Canada’s Minister of International Trade, Stockwell Day,recently announced new measures to help Canadian min-ing and oil and gas companies meet their social and envi-ronmental responsibilities when operating abroad.

The four-fold strategy will focus on:• Creating a new Office of the Extractive Sector Corporate

Social Responsibility (CSR) Counsellor to help resolvesocial and environmental issues relating to Canadianmining and oil and gas companies operating abroad.

• Supporting a new Centre of Excellence as a one-stopshop to provide information to companies, non-govern-mental organizations and other relevant parties.

• Continuing Canadian International DevelopmentAgency (CIDA) assistance to foreign governments todevelop their capacities to manage natural resourcedevelopment in a sustainable and responsible manner.

• Promoting internationally recognized, voluntary guide-lines for corporate social responsibility performance andreporting.In an announcement, Day said, “Canadian companies

are often instrumental in bettering the lives of people in thecommunities in which they operate. These complementaryinitiatives will provide the tools, guidance and advice theyneed to meet and exceed their obligations with respect tocorporate social responsibility.”

The federal government has already taken steps to pro-mote and support CSR abroad, including initiatives under-

taken by the Department of Foreign Affairsand International Trade, CIDA and NaturalResources Canada. Canada has also held dis-

cussions with free trade agreement partners on how toaddress CSR during negotiations.

In the future, these strategies will be expanded toinclude, among other programs, initiatives to enhance thecapacities of developing countries to manage the develop-ment of minerals and oil and gas, and to channelize thebenefit from these resources to reducing poverty.

CIM to host Centre of ExcellenceCIM recently agreed to host the new Centre of

Excellence, and is well-positioned to assume that role. TheCentre will be a forum through which resource extractionindustry stakeholders can provide CSR tools and informa-tion to clients in industry and government in Canada andabroad. It has also been suggested that the Centre couldserve as a source of technical advice to CIDA to assist it inenhancing the capacities of developing countries to managetheir natural resources.

“In recent years, CIM has built a foundation on thedevelopment of guidelines and best practices in the area ofresource/reserve valuation,” explained CIM executive direc-tor, Jean Vavrek. “We have also identified areas where wefelt we can be more proactive, including safety, outreach,innovation and CSR. In our latest strategic plan, CIM dis-cussed how the Internet could be used to fulfill these goalsmost effectively.” Vavrek pointed to CIM’s Mining in Societyoutreach efforts as a successful benchmark program onwhich future efforts could be modelled. “We look forwardto bringing a wide spectrum of interested parties together toprovide this very valuable window for the world.”

The functions of the Centre of Excellence will be:• To develop and disseminate CSR-related information

and tools for clients in government andindustry.

• To develop CSR information packages and to activelysponsor business briefings.

• To develop an inventory of Canadian company CSRcontacts, activities and best practices.

• To create a web-based public platform for companiesand Canadian CSR practitioners to share experiencesand best practices.It is expected that the efforts of the Centre will initially

be focused on high-priority sectors and issues, such as themining and oil and gas sectors, and developing materialsfor high-risk countries.

MAC gives strategy its thumbs-up

Responding to the federal government’s CSR announce-ment, the Mining Association of Canada (MAC) said itappreciates the improved clarity the strategy gives to the gov-ernment’s expectations for the resource extraction industry’sperformance on human rights and the environment. MACwas one of several organizations that contributed to develop-ing the new CSR strategy through its participation in theNational Roundtables on Corporate Social Responsibility andthe Canadian Extractive Sector in Developing Countries.

MAC president Gordon Peeling said: “The Governmentof Canada has done a good job in responding to some dif-ficult issues, such as human rights and security, whichwere raised by the National Roundtables on CSR.”

Peeling said the strategy’s focus on capacity building“provides an essential building block in helping countriesachieve their poverty reduction goals and developmentobjectives through responsible development of their natural resources.” CIM

Federal government announces new CSR strategyCIM to host Centre of Excellence

by Peter Caulfield

news


Two diamonds from the De Beers Canada Victor minehave been installed in the legislative mace, presented to

Parliament in a special ceremony at theOntario Legislature on March 24. Themace was scheduled to undergo replating

and repair when the House adjourned for the winter recessin December 2008.

The setting, designed by De Beers jewelry award win-ner, Reena Ahluwalia, features one cut and polished dia-mond and another in its natural rough form. A third pol-ished stone was donated for a display to be created laterthis year in the Ontario legislature building. The three

diamonds were among the first commercially pro-duced from the Victor mine, the province’s first dia-mond mine.

“The De Beers Canada Victor mine is extremelyproud of the superior quality diamonds we produceand equally proud to be able to share them with thepeople of Ontario in this historic way,” said JimGowans, De Beers Canada president and CEO. “AsOntario’s first diamond mine, we will continue to sethigh goals for our team to ensure we maximize thebenefits of this world-class operation for our employ-ees, our community partners and the people ofOntario.”

No business may be conducted in the House unlessthe mace is present. While the Speaker is officiating, itmust be in its proper place on the table before him, withits “crown” pointing towards the government of the day.

This is actually the Ontario Legislature’s third mace,which has a long and colourful history. The first mace,which was introduced to Upper Canada’s first Parliament in1762, was captured by the Americans during the War of1812, and not returned until 1934 by U.S. PresidentFranklin D. Roosevelt. It is still available for public viewingin the main lobby of the Legislative Building. The secondmace was stolen in 1849 during a riot in Montreal, but wasquickly returned. However, it was eventually lost to fire in1916. The current mace was created in 1867, and was lastrefurbished over 100 years ago in recognition of KingEdward VII’s ascension to the throne when Queen Victoriadied in 1901. CIM

A sparkling part of Ontario historyDe Beers Canada donates diamonds for refurbished legislative mace

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or of the 300 bison grazing onthese lands, or of the recon-structed watersheds that winawards for environmental innova-tion and cutting-edge reclamationresearch?

What in the article shows athriving and vibrant communityin Fort McMurray, a safe environ-ment for children, quality healthcare, educational opportunities,and a place that people are proudto call home? Fort McMurrayprovides a setting that rivals manycities in terms of quality of life forits residents.

What is communicated toexplain the commitment of indus-try leaders and the vision thatinspired the development of newand innovative technologies tosynergistically improve both envi-ronmental and economic per-formance in the oil sands?

From an environmental standpoint there are impor-tant considerations to share. Actual land disturbance todate of the North American boreal forest totals less thana couple of hundredths of one per cent — an area lessthan that of either of the two nearest major cities,Edmonton and Calgary. Also, it should be borne in mindthat significant areas have already been reclaimed asoperations progress and all disturbed land will bereclaimed as operations conclude. Syncrude Canada Ltd.alone has planted some five million trees and shrubs,reclaimed 4,500 hectares (22 per cent) of disturbedlands, recycles 88 per cent of its process water, has sig-nificantly reduced energy intensity by researching andpioneering low-temperature extraction technologies, hasspent $100 million on reclamation since 2003, and willspend an estimated $1.6 billion to reduce sulphur diox-ide emissions by 60 per cent.

From a community perspective, the people in the regiondemonstrate their care and commitment through signifi-cant volunteerism and often contribute more than anyother community in Canada to annual United Way cam-paigns, based on per capita donations. There are significantefforts to support education regionally and provincially, and

news

What a disappointing article on the oil sands.Through the years we have grown to appreciate thequality of this magazine’s efforts to showcase the world,displaying the diversity of its people, portraying theforces and complexity of nature, and sharing the emerg-ing research that seeks to understand our rich historyand origins. Now, surprisingly, this article departs fromthe publication’s usually sound efforts to provide a bal-anced view: one that considers both challenge andopportunity. The oil sands has recently been the targetof misinformation and flawed representations, and thecurrent article has unfortunately worked to favour thesedistorted perspectives.

I, like so many, have lived and worked in Alberta,Canada’s Athabasca oil sands, and the cited article does areal disservice to the people, communities and industry inthe region.

While the editorial in question provides some balancein its written content, it contains descriptions that aremetaphorically damaging, and the accompanying photoessay ignores the reality of responsible development that isavailable for all to understand. Where, for example, are thepictures of reclaimed land returned to a boreal forest state,

The National Geographic article on oil sands miningAn alternative view

The following open letter was written in response to an article and accompanying photo essay that appearedin National Geographic Magazine in March, 2009 entitled: “The Canadian Oil Boom — Scraping Bottom.” *


Measuring tree growth to monitor reclamation success on the slopes of Syncrude’s Southwest Sand Storage

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equally significant is the work done to encourage Aboriginal education,employment and business development.It has been a wonderful experience towork with an army of community vol-unteers that helps those in need of support, provides an impressive arrayof wholesome activities for young andold, and makes improvements to theutility and appearance of local facilities.Additionally the air quality in FortMcMurray is also rated as good or bet-ter than that in Edmonton, Calgary orToronto. Contrary to the impressionportrayed in the article, this is truly agreat place to work and raise a family.

The oil sands also contribute posi-tively to the economy of Canada.Within the confines of the minimalland disturbance described previouslycomes some 50 per cent of Canada’senergy requirements. There areapproximately a quarter of a millionjobs linked to the oil sands, and devel-opment there in the period from 2000to 2020 has the potential to generate anestimated $123 billion for provincialand federal governments in the form ofroyalty and tax revenues. Contrary tothe article, industry leaders whom wehave had the pleasure and privilege ofworking with are also genuinelyfocused on the future, and have sup-ported education, community invest-ment, regional infrastructure workinggroups and environmental consor-tiums to ensure responsible develop-ment of the oil sands.

This is the story that also needs tobe told on behalf of the people, com-munities and industry that haveworked to develop the oil sands intothe success it is today, providing a safeand sustainable energy source servingour society now and into the future.

Gord WinkelFort McMurray, AlbertaChair, Surface Mining Association forResearch and Technology

* Kunzig, R. (2009, March). The Canadian OilBoom — Scraping Bottom. NationalGeographic. Photography by Peter Essick.

CIM

May 2009 | 15

Candidates for induction into the Canadian Mining Hall of Fame mustbe individuals who have demonstrated outstanding lifetime achieve-ments to the benefit of the Canadian and/or world minerals industry inone or more of the following categories:

• Exploration • Building the corporation • Technical contribution • Supporting contribution • Mining in society

Anyone may nominate a candidate but nominations must be submitted through a sponsor orassociate sponsor (see list below).

June 1, 2009: Deadline for nominator of proposed inductee to contacta sponsoring organization

June 30, 2009: Deadline for nominating material to be delivered tosponsoring organization for review

July 20, 2009: Deadline for sponsoring organizations to deliver nomination package to the Canadian Mining Hall of Fame

January 14, 2010: 22nd Annual Induction Dinner

Further information is available at www.halloffame.mining.ca under Criteria for Selectionor at Tel.: 519•599•3050 or Email: [email protected]

SponsorsCanadian Institute of Mining, Metallurgy and Petroleum • The Mining Association ofCanada • The Northern Miner • Prospectors and Developers Association of Canada

Associate SponsorsAssociation for Mineral Exploration British Columbia • Mining Association of British

Columbia • Ontario Mining Association • Quebec Mining Association •Saskatchewan Mining Association

The Canadian Mining Hall of Fame C A L L F O R N O M I N A T I O N S

Toronto (905) 791-1553 Montreal (514) 367-1124 Vancouver (604) 946-5535 www.sew-eurodrive.ca

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news

May 2009 | 17

Avalon Rare Metals Inc. and theChapleau Cree First Nation (CCFN)signed a Memorandum of Under-standing (MOU) on March 3 regard-ing the co-operative development ofthe Warren Township CalciumFeldspar project near Foleyet,Ontario, 125 kilometres west of thecity of Timmins.

The project consists of threeclaims totalling 727 hectares locatedin the traditional territory of CCFNand other local First Nations andAboriginal groups that are repre-sented by CCFN. Under the terms ofthe MOU, CCFN has agreed to sup-port the development of the projectif two conditions are met: CCFN andother First Nations and Aboriginalgroups with an interest in the landbenefit equitably from the operation;and environmental risks associatedwith the project’s development,operation and closure are deemedacceptable.

"We are pleased to have the sup-port of CCFN and other localAboriginal groups, as well as thecommunity of Foleyet, in advancingthe project and look forward todeveloping mutually beneficial part-nerships," commented Avalon's pres-ident, Don Bubar, in a Februarypress release.

However, in a recent telephoneconversation, Bubar said that theproject has been stalled because theprovince’s Department of NaturalResources has said that it will only

issue an operation per-mit for one- third of the727 hectares. “Thisparticular mineral is

regulated under the AggregateResources Act and administered bythe Ministry of Natural Resources,”explained Bubar. “They are only giv-ing us a permit to cover a portion ofthe total resources and that creates abig problem.”

MOU signed for Warren Township calcium feldspar project Company awaits provincial operation permit before moving forward

Previous work on the projectdemonstrated the presence of a sig-nificant resource of high-purity cal-cium feldspar amenable to a low-

cost, small-scale quarrying opera-tion, which would include the devel-opment of a processing plant near amajor railway line at Foleyet. This

by Marlene Eisner

news


would facilitate shipping the productto potential markets in southernOntario and the northeastern UnitedStates. Capital costs are estimated tobe approximately $10 million.

Aside from providing jobs to thecommunity of Foleyet, the project willhave far-reaching environmental ben-efits for the province. According toBubar, calcium feldspar is used infiberglass manufacturing where it hasbeen demonstrated to reduce energyconsumption and CO2 emissions,which is a primary goal of theprovince's proposed new GreenEnergy legislation. As well, the fiber-glass products are used in manufac-turing energy-efficient composite con-struction materials for wind turbines,which is another major green energyinitiative being promoted by Ontario.

The company has an anchor cus-tomer in a glass company and is cur-rently looking at other applicationsfor the mineral in ceramics and as apotential mineral filler in certaintypes of industrial papers.

Tests on the site have shown nonegative environmental factors andalthough the company has appliedfor a license to cover the entire 727hectares where the mineral lies, theministry has said they will only issuea permit for one-third of the area.Bubar said the company needs tohave access to the whole calciumfeldspar site to attract and keep itscustomers.

“In order to enter into a supplycontract, customers want to knowthat if they commit to this product,then we will be able to supply themineral in the long term,” heexplained. “By only giving us a per-mit for part of the resource, we can’tdemonstrate that, which compro-mises the opportunity for us to moveforward with the project. The cus-tomer and the financial institutionwant 100 per cent certainty that they[the government] will extend thecoverage.”

As a compromise, Avalon said itrequested that a permit be granted for

the entire site, but with provisionsthat would require the company toreclaim as they move along in devel-opment. “So far they haven’t agreedwith it,” commented Bubar.

Contacted by telephone, ChapleauCree First Nation Chief KeithCorston said he “champions Avalon”for their co-operative nature in theWarren Township project.

“Don actually came to us andasked us if we had a concern,” saidChief Corston. “Warren Township isin our core territory, and we said weare interested in a MOU, but that ithas to be culturally positive, havemore in it than just jobs, include arevenue-sharing component, and beenvironmentally sound.” ChiefCorston continued by saying thatwhen he sat down with Avalon, thegovernment’s concerns were dis-cussed, and it was decided that anequitable solution would be for thecompany to work on no more than60 hectares at a time and reclaimthat area before proceeding to workon the next 60 hectares. “I can tellyou that I was satisfied then that theintegrity of Mother Earth was beinglooked after,” he added.

With the Chapleau Cree FirstNation’s and Avalon’s will to worktogether to see this project comethrough, the major sticking pointright now is the operation permit.“When you look at what the mineralis being used for, it’s kind of ironicthat there are barriers of develop-ment by the government that arebeing advocated by the new GreenEnergy Act,” noted Bubar.“Hopefully, at the end of the day,that sort of irony will register atsome higher form of government,but in the meantime, I don’t thinkwe’d be able to go ahead with theproject. Right now, there’s also theeconomic recession in terms ofaccess to capital, and our customer’smarket has seen some decline, butthat will turn around. Sooner orlater the government will want tosee the province’s footprintreduced.” CIM

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Pure_muscle_CIM.indd 1 12/17/08 4:50:06 PM

Vancouver-based Rockwell Diamonds Inc. has threeoperating alluvial diamond mines in South Africa aswell as an operation on care and maintenance and apipeline of brownfield projects. Rockwell is notable

not only for being the second-largest publicly listed diamondproducer in South Africa, but also for its socially responsibleprograms in that country.

Headed by president and CEO John Bristow, Rockwell hasfour properties in Northern Cape Province: Holpan andKlipdam, which are some 70 kilometres northwest ofKimberley, the capital of the province, and Wouterspan andSaxendrift, which are about 160 kilometres southwest ofKimberley. Due to poor market conditions, Wouterspan iscurrently on care and maintenance.

Addressing a legacy of injusticeYears of legally sanctioned Apartheid have left a legacy of

poverty and underdevelopment in South Africa. Until 1994,when Apartheid was replaced by a democratic legal andpolitical system, mineral rights in South Africa were pre-dominantly in the hands of large mining companies, largelyowned and controlled by Whites. After 1994, the ownershipof mineral rights became vested in the State. To acquire andhold such rights today, a mining company needs to have aBlack empowerment partner, who must have a share of atleast 26 per cent in the business and be comprised of abroad-based group, not a single individual.

These changes are part of a government program calledBlack Economic Empowerment (BEE), which was launchedto redress the inequalities of Apartheid by providing previ-ously disadvantaged non-White groups economic opportu-nities that were not available to them in the past. Rockwell’s BEE partner is Africa Vanguard Resources (AVR),which is led by mining engineer Sandile Zungu. AVR holds26 per cent of Rockwell’s prospecting and mining rights andthe company holds the remaining 74 per cent.

Good works make good senseGoing beyond its government-stipulated obligations,

Rockwell has developed a number of innovative programsthat benefit its African mine-site employees, their familiesand the communities in which they live.

Bristow explained why Rockwell decided to undertake itsprogram of good works. “It’s just the right thing to do,” hesaid. “It is part of our commitment to creating a better all-round environment in which we operate. I’ve had a longcareer in mining and it’s been good to me. It was time to givesomething back.”

In one such initiative, since 2007 Rockwell has operateda program that educates employees and their families about

Doing well by doing goodRockwell Diamonds’ social responsibility initiatives in South Africa

the dangers of HIV/AIDS and the benefits of self-protection.Led by Rockwell’s health and safety manager Iris Ross, it alsoprovides counseling and, where possible, directs partici-pants to appropriate screening and treatment.

“HIV/AIDS afflicts many South Africans,” said mineralresource manager, Glenn Norton. “About 20 per cent of thepopulation is infected with the virus, and that includesRockwell’s employees and the people in the communities inwhich they live.”

Norton admitted that it is difficult to gauge the results ofthe program so far.

“In South Africa, it was traditionally taboo to talk aboutthings such as AIDS and sex, but attitudes are changing andthere has been slow but steady progress towards makingpeople more aware of the disease and its consequences,” hesaid. “There seems to have been a decrease in AIDS-relatedmortality in the past few years.”

Another upshot of Rockwell’s good works is theWindsorton Play Park, which the company built in late 2007in a part of Northern Cape Province that is challenged byalcohol and drug abuse and their associated problems. Onehectare (two-and-a-half acres) in area, the park has a play-ground for children and barbeques and picnic tables for fam-ily and community gatherings.

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The play park is the only dedicated recreational facility available for the 1,200primary school children in the community.

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HIV/AIDS-related information and advice and would bestaffed by the South African Ministry of Health.

Rockwell also created non-mining employment opportu-nities with the 2006 founding of the Bokomoso Brickworksat the site of the Holpan mine. The spin-off company (whosename means “working together”) uses the large quantities ofsand that are created at the mine. Rockwell provided thefunding for a brick-making machine anda new business was born. “BokomosoBrickworks employs 22 people from apoor local community,” said Norton.“Eighteen are women — the wives ofmine workers — and four are men, whodo the heavy lifting.” Once the start-upcapital has been paid off, all of the prof-its from the operation will go to the localcommunity, which will decide how tobest spend them.

Many district councils in theNorthern Cape Province are poor andlack the money and equipment to main-tain their roads and highways properly.Rockwell helps to keep local infrastruc-ture in shape by sending out its ownequipment from the mines to maintainthe roads. “That makes us the de factoMinistry of Transportation in some dis-tricts,” Norton observed.

Rockwell also supports a mining-related heritage project in Northern CapeProvince. It provides and maintains thesignage at Canteen Kopje, site of the1860s discovery of alluvial diamonds atKlip Drift, today the site of the town ofBarkly West. The site is 35 kilometres

northwest of Kimberley and is one of the firstalluvial diamond mines in South Africa. “It’s amonument of important significance toRockwell, the mining industry and to SouthAfrica,” claimed Norton. “Our mines at Holpanand Klipdam are only 30 kilometres away.” Thearea features not only historical tailings heaps,but also evidence of early homo erectus, Sanpeople, and unusual trees and plants.

Finally, in 2008, Rockwell donated aschool bus to Niekerks Hoop Primary School.Located 100 kilometres west of Wouterspan,the school is in an out-of-the-way rural areaand attended by the poor.

Bristow admitted that the results of thecompany’s program are hard to quantify andmeasure, but he is certain that the benefits aresignificant. “We’ve developed good relation-ships with the communities where ouremployees live,” he said. “Those relationships

make it easier to deal with local authorities, regulators andother stakeholders down the line. There are important ben-efits to being proactive. We’ve learned that Rockwell canbenefit from our good works, because they give us tangibleaccomplishments to point to when we’re pitching a newproject to local authorities. They also increase our credibil-ity with socially conscious funders and investors.” CIM

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Workers at Bokomoso Bricks loading a palette of completed bricks.

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When OceanaGold expanded its goldoperations in 2007 to include theReefton deposit, it was confrontedwith an interesting challenge: how

to process the mine’s refractory gold oredeposit. The company had been operating anopen-cut mine at its Macraes site at east Otagoin New Zealand since 1990, processing the oreon site. However, the situation was slightlydifferent at the Reefton goldfield. Althoughore from that mine is treated at an adjacent1.0 Mtpa plant, the gold concentrate is sent800 kilometres by rail to the Macraes pressureoxidation plant for final processing. Thisproved to be more of a challenge than initiallyexpected, as regrind limitations at Macraesmeant the mill could not handle all the orefrom Reefton. Without adequate regrindingahead of pressure oxidation, gold recoverieswould be lower than forecast.

Finding the right solutionProcessing at Macraes utilizes a grinding and flotation

circuit employing SAG and ball mills, followed by sulphideflotation, fine grinding, a pressure oxidation autoclave andthen a carbon-in-leach circuit for the gold extraction.While there was some capacity in the autoclave to treatReefton product, the mill did not have the regrind capacityto handle the mine’s ore. That is when OceanaGold beganto look for additional milling equipment to handle theReefton product for final processing.

The company wanted a mill that could achieve a veryfine grind size, was power and energy efficient, and had alow capital cost. Ideally, they also needed something thatwas simple to operate with a small layout, as space limita-tions restricted the use of a lot of ancillary equipment nor-mally associated with other grinding methods. Using a tra-ditional ball mill would have required a set of cyclones,pumps for large re-circulating loads and thickeners, whichwould not have fit at the site. That is when they began toconsider the IsaMill™, marketed by Xstrata Technology,and developed with Netzsch.

If the mill fits“The IsaMill has a lot of benefits, especially for flota-

tion,” said Greg Rasmussen, principal metallurgist atXstrata Technology, Canada. “The grind is finer and withthe inert grinding, you can improve the kinetics in leach-ing and flotation circuits. Depending on the application,you can grind down to as small as seven microns with a

Getting it down to a fine grindIsaMill™ offers OceanaGold flexibility and efficiency

float of 92 to 96 per cent recovery, but the action inside themill produces a sharp discharge sizing curve, with minimalslimes, even at fine product sizes. As you put more powerinto it, the IsaMill™ particle size distribution curve steep-ens without over-grinding.”

The grinding action in the IsaMill™ is based on highintensity stirred milling, in which the shell remains sta-tionary, while inside, discs rotate on a central shaft atspeeds up to 20 metres per second. An internal classifierensures only fines pass out of the mill while the oversizeand media stay in the mill for further regrinding.

Compared with conventional grinding, the IsaMill™reduces the energy usage, media cost and capital cost offine grinding. Just as importantly, the processing advan-tages of inert grinding greatly improve metallurgical per-formance in leaching and flotation circuits, as comparedwith conventional steel media. Feed sizes on some appli-cations are as coarse as F80 of 300 µm, while productsizes can be as low as 7 µm (P80) for materials includinglead and zinc sulphides, copper sulphides, nickel con-centrates, platinum concentrates, industrial minerals,iron oxide and refractory gold concentrate. Sequentialgrinding in the IsaMill™ does not flatten the productsize distribution like other grinding methods. Instead, itsharpens it, even in an open circuit, which can haveimportant implications for energy efficiency and down-stream processing such as filtering and pumping.

The combination of tight size distribution, small foot-print and inert media has profound implications for circuitdesign. Mills can be easily distributed throughout a

The IsaMill (blue) is in the front, with the Jameson Cell (green) at the top. (Prominent Hill, Australia)

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flotation circuit, grinding only those particles that need it,and producing a tight size distribution (without cyclones),ideal for subsequent flotation. The use of inert mediameans that less reagents are required downstream of themill, with the flotation chemistry better to control.

Similarly the tight size distribution is crucial in leachingapplications, where recovery is usually determined by thecoarser end of the size distribution (best measured by P98or P95, not P80).

Facing challenges pays off“As a company, OceanaGold has generally been very

open to adopting new technology to gain an advantage,”said Dave Carr, corporate metallurgist at OceanaGold,adding that the Macraes site was one of the first to gowith flash floatation and 300 m3 flotation cells. Theywere also the first to purchase the IsaMill™ M1000model from Xstrata Technology, which features a 500KW motor.

“It certainly has paid off,” said Carr. “One of the chal-lenges of the Reefton project was the concentrate sizing.The company planned for 70 to 80 micron F80, but in thedesign we allowed for it to go coarser. The IsaMill™ gaveus the flexibility to treat a range of feed sizes with the samemachine.”

Such flexibility was a key factor in the purchasing of theIsaMill™. The feed size of the concentrate from Reeftonranges between 90 and 180 microns and 17 to 26 per centsulphur. The IsaMill™ allows OceanaGold to run the millfor a wide range of pulp densities. Additionally, the speedand power draw can be changed, which means the mill canmaintain the same feed rate and product size, regardless ofhow coarse the feed is. Another advantage is that the millruns in a single line open circuit to achieve the final prod-uct. Using a ball mill in this situation would have required abalsa mill, cyclones, large pumping, and re-circulating loadand product thickening.

“With the IsaMill™, we were able to re-pulp andregrind the concentrate quickly,” continued Carr. “Wereceive it and it gets pumped through the mill in threeminutes.” What comes out at the other end, he said, isthe right size for the autoclave. “It’s very fast, especiallysince what emerges is the final product size and density,and therefore is ready to go. The concentrate that we arefeeding it has an F80 of 180 microns in size and theIsaMill™ is able to get it down to that 15 to 18 micronrange. In a conventional mill, we would struggle to dothat. We may even have to have made it a two-stagegrinding operation.”

The operating layout required for the IsaMill™ workswell also. Since it is a horizontal, rather than verticalpiece of equipment and does not require cycloning equip-ment, less space is needed for setup. “We’re treating 10tonnes per hour,” reported Carr. “To do it with a ball mill,with its associated cycloning and thickening equipment,

would mean we would have needed at least three timesthe ground area for the equipment.” They would alsohave needed a full-time operator. With the IsaMill™, theoperator who looks after the mill also runs the autoclave.

From an operational point of view, the mill has provento be a winner as well. “It’s quite simple,” said Carr. “Mostof the operational and maintenance challenges over the lasttwo years haven’t been related to the IsaMill™. It’s beenrelated to the concentrate handling, not in getting the millto grind.”

A win-win situationFor Rasmussen, the new Xstrata technology means a

move in the right direction, especially in today’s eco-conscious culture. “Basically, the IsaMill™ can be usedfor most ore types,” he said. “If you can reduce theamount of power you need, you will drastically reduceyour cost. There are very strong incentives for cus-tomers to use this.”

Carr agreed, claiming: “When we were looking for newequipment, we looked for one with the best power effi-ciency, and the IsaMill™ left everything else for dead.”

OceanaGold’s decision to explore a new technology hasturned an interesting challenge into a profitable solution. CIM

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MansourMiningSupply.indd 1 4/20/09 10:41:24 AM

Fifty years ago, a crack-ling broadcast of U.S.President Eisenhowerwishing radio listen-

ers “Peace on earth andgoodwill toward men every-where” beamed around theworld. The message, trans-mitted via satellite, mighthave been as effectivelyrelated in a greeting card,but the choice of mediumhailed a new era in commu-nications. At the time, onlyIke — the leader of the “freeworld” — had access to it.

Over the decades, thataccessibility has trickleddown to millions of users.With very little effort, mes-sages flash to mobiledevices through networksacross the globe. However,those working beyond thesewebs, such as surveyors,prospectors and explorers,have not been spared theinconvenience and inherent expense required to receiveand relay field data to laboratories and head offices.

Where in the worldAlmost a half-century after Eisenhower’s first public

transmission, a global communications network is now areality. The broadband global area network (BGAN) wasactivated globally in February, 2009 by the satellite commu-nications company Inmarsat. The constellation of three geo-stationary Inmarsat-4 satellites enables subscribers with aportable terminal to establish a satellite connection for theirlaptop computers, which can be used to send and receivedata, emails, phone calls, photos and video, from nearly any-where on the globe.

Until February, the communication service has beenavailable for much of the planet; however, with the additionof the third satellite, it enabled the network to cover 95 percent of the earth. Though the coverage does not extendentirely to the poles, it does serve the Canadian Arctic.

For the mining industry, the timing could not be better.Closing distances and cutting transportation costs canreduce the financial risk of exploration that is hard to bear,even in the best of times.

The world has BGANSatellite communications network connects the globe

Phoenix soaringThe new technology has paid immediate dividends to

Toronto-based Phoenix Geophysics. Its magnetotullericsurvey division purchased some BGAN terminals andnow subscribes to Inmarsat’s satellite service. RonGoulard, a technology officer for Phoenix, said that theadvantages offered are clear, including: the requirementof fewer people in the field, more efficient troubleshoot-ing, faster transmission of data, and transportation timeand costs savings.

“Before we had the quality assurance that the BGANnow affords us, we often wouldn’t be aware, for example,that a sensor had gone bad and was recording zero data orextraneous data,” explained Goulard. “Sometimes it wouldtake two or three days before we could identify a defectivesensor. In the meantime, we might already have travelledto several other sites during that time. That would havemeant three or four days of lost data and a lot of unneces-sary legwork. Now, we can identify when there is a prob-lem right away.”

According to Goulard, not only are there fewer bootsspending less time on the ground, the cost of filling them withvaluable experts has become unnecessary. “Traditionally,


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when you begin a survey you choose sites based on data froma map,” he explained. “However, sometimes when you actu-ally get on the ground, you find that you may have to movethe site 200 metres because there is a lake or some obstructionon the site that did not show up on the map.”

Making connectionsMuch like the cellular phone market, a number of com-

munications’ manufacturers produce the small, lightweightsatellite terminals that enable someone to access theInmarsat network, and require very little expertise. “If thereis a mountain ridge and you’re at the bottom of the valley,or if you’re in a jungle and the canopy is thick, that couldbe a problem; but if you have a clear line of sight, you’repretty much gold,” said Goulard.

“They are pretty much waterproof and heatproof,”added Inmarsat’s Simon Curran, of the BGAN terminalsdesigned for field work. “They were designed for the mil-itary, so they are used to being used and abused.” Solar-powered battery rechargers can ensure a steady supply ofpower for even long trips.

Unlike the preceding generation of VSAT technology,cumbersome dishes, and the trained specialist to installthem, are not required. The computer connects to the ter-

minal through a simple USB port. The data uses standardInternet Protocol (IP) and connects at speeds of up to 492kilobytes per second. That may not be as fast as a standardoffice connection, but it demands less patience than spend-ing five hours bouncing around in the back of a truck toreach a reliable communications link.

Currently two companies, Stratos and VirginTechnologies, are licensed to offer subscriptions to theInmarsat network and a variety of satellite terminaloptions through retailers across the country; other dis-tributors are expected to be licensed shortly. Service con-tracts are tailored to suit various uses, and prices dependupon the amount of data transferred over the connectionand the volume in which the bandwidth is purchased.Both standard IP and streaming IP (a guaranteed data raterequired for smooth videoconferencing) are available,along with phone and text messaging capabilities. A soft-ware application included in all BGAN terminal optionsalso helps users position terminals in the field, managethe speed of their connection and monitor their usage.

With the introduction of BGAN, President Eisenhower’spropitious message takes on new significance, as peopletruly “everywhere” are offered the peace of mind and prac-ticality that accompanies global connectivity. CIM

Giving BackA billion-dollar partnership

Suncor Energy Inc. has achieved themilestone of spending $1 billionacquiring goods and services fromAboriginal business partners in theWood Buffalo region.

Rick George, president and CEO ofSuncor, acknowledged: “By tapping intothe regional skills and experience ofthese communities, we’re makingprogress on a number of shared eco-nomic, social and environmental goals.”

Gerry Gionet, president and CEO ofAqua Industrial Ltd., a local Métis entre-preneur who has long been one ofSuncor’s suppliers, said of his businessrelationship with Suncor: “I found thatSuncor’s vision was similar to mine. Wehave built a strong relationship that hastaught me better business practices, andI use these skills and experience to be amentor to others in the community.”

In December 2008, Tim Joseph, associate professor ofmining engineering at the University of Alberta’sSchool of Mining and Petroleum Engineering, wasfaced with a challenge. He needed to create a final-year

course in mineral economics in a hurry. The professorwho normally taught the course had gone on leave and itfell to Joseph to take over her course, which was set tocommence the following month. “I hadn’t taught mineraleconomics for ten years and I didn’t have any materialson hand,” explained Joseph.

Out of that necessity was born the invention of an inno-vative course that invites mining experts with experience indifferent facets of the industry to address the students andintroduce them to the real-world challenges of decision-making. The executives’ participation exposes the studentsto the mining industry as it actually is and gives them alearning experience beyond the conceptual, previouslyreceived from their text books.

Time for a changeJoseph said the circumstances were ripe for a novel

approach to teaching mineral economics to mining engi-neering students in the last semester of their final year.

“There was an opportunity to take a new approach toteaching the subject,” he said. He was assisted by retiredmining engineer Jim Popowich, former president and CEOof Elk Valley Coal (now part of Teck Coal), and past presi-dent of CIM.

Joseph said he wanted to create a course for his 25final year students that went beyond number-crunching

and got into the real world of decision-making, some-thing he felt the mining engineering curriculumneeded to address more.

“Students need to learn there are many intangibleconsiderations in decision-making,” he said. “I want tomake them think about what types of information theyneed, where that information is and how to obtain it.Buying a facility or a piece of equipment in theNorthwest Territories or Northern Alberta is differentthan when it is in Africa or New Guinea.”

Expert inputJoseph invited 10 mining industry experts to address

the class. The first speakers were Popowich and MichaelO’Shaughnessy, senior financial analyst with Teck Coalin Calgary, who spoke for one hour on commodities andcommodity cycles.

“We discussed how all commodities are subject tocycles,” Popowich said. “We also talked about how govern-ment regulations can affect commodity cycles.”

Popowich and O’Shaughnessy explained that commod-ity cycles can actually be learning opportunities. “Duringdown cycles you really learn how things work and whatdrives costs,” Popowich said. “Any down cycle is a time forlearning, because history really does repeat itself in com-modity cycles.”

Popowich spoke again later in the course about operatingcosts and how to minimize costs and maximize profit. Healso discussed the importance of communicating clearlywith local communities, which are important sources oflabour and supplies to mining companies.

Among the other speakers was Chuck Edwards, directorof metallurgy at AMEC Americas Limited in Saskatoon.Edwards spoke about economic evaluations of extractionand processing plants. “We discussed what information youneed in order to perform an economic evaluation at the dif-ferent stages of a project, from concept to prefeasibility tofeasibility to definite design,” Edwards recalled. “You needdifferent types of information at each stage in order to pro-ceed to the next. You gradually get a clearer picture and soyou’re able to perform a better project evaluation as youmove along.”

Edwards also discussed the perils of skipping steps. “It’s abad idea, because it leads to mistakes,” he said. “I told thestudents to always remember the iron rule of engineering:Of good, fast and cheap, you can have two at the same time,but never three. So pick the two you want.” He also advisedthe students to take note of the difference between economic


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Guest lecturer, Jim Carter (former president & COO of Syncrude) addressing U of A class.

Ask the expertsU of A mining engineering students learndecision-making skills from industry executives

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evaluations for new builds and for existing operations,pointing out that they are very different tasks.

Peter Read, general manager of mining at SyncrudeCanada, discussed new project economics and what hap-pens when actual capital costs exceed those projected onpaper. Read and the students talked about how to makeadjustments that can enable the project to go ahead.

Domenico Baruffaldi, tax services partner withPricewaterhouseCoopers LLP, enlightened students aboutmining taxation and royalties at the federal and provinciallevels and how Canada compares to the rest with world.

Former president and COO of Syncrude, Jim Carter,spoke about the effects of the recent economic downturn onthe Canadian mining industry and how well he feels themining economy bounces back after a down cycle.

Bill Hume, director of business development for NorthAmerican Construction Group, talked about managing con-tractor operating costs. Some of the queries he consideredincluded those surrounding the costs related to owning min-ing and processing equipment and whether it is more eco-nomical to purchase equipment and do the work oneself orto hire a mining contractor.

The students’ evaluationFifth-year student, Chris Pichurski, called the speakers’

program a great idea. “Since the speakers come directlyfrom industry, they conveyed the practical tools we needand placed the concepts within thecontext of real examples,” Pichurskisaid. “It gave us an idea of how thingsreally get done in industry.” He contin-ued by saying that another positiveoutcome of the program was theopportunity it afforded students to net-work with mining industry executives.

Colline Petryshen, another fifth-year student, gave the course an A aswell. “The program has taught memore about the costs and economicsfrom a company level,” she said. “Ithas also taught me about some of thequalitative concerns with respect tovendors and customers. Overall, Ithink the speakers’ program is a goodidea. Much of the knowledge requiredfor economics is gained from manyyears of industry experience. Thecooperation from the industry person-nel for this program also speaks highlyof their approval of the program.”

The speakers’ verdictPopowich and Edwards said they

enjoyed speaking to U of A studentsvery much. “It was lots of fun,”

remarked Edwards. “I’ve been doing the same thing for quitea while at the University of Saskatchewan, so I was used toit.” Edwards said he strongly recommends other miningengineers to follow suit. “Don’t wait for university represen-tatives to come to you, go to them first,” he urged.” “It’s agreat way to attract new blood into the industry.”

Popowich hailed it an extremely worthwhile experience.“Students are interested in learning about the practical sideof the business, which is difficult to teach from a textbook,”he said. “Universities need to reach out more to the industryand make use of the experience and expertise that’s there.”

The professor’s assessmentJoseph said the course has been, by and large, a great

accomplishment. “It’s been a successful process,” he pro-claimed. “I can tell by what the students are saying and bythe sorts of questions they’re asking.” During the next aca-demic year, Joseph will be going on a sabbatical and the pro-fessor who normally teaches mineral economics is returningfrom leave. “I intend to hand over the course materials toher and suggest she adopt a similar format,” he said.

Whatever the future holds for the lineup of this particularcourse, there can be no doubt that many very valuable lessonshave been gleaned by all involved — lessons that will hope-fully inspire other mining industry representatives to getinvolved to share their valuable experience and insights withtomorrow’s leaders and innovators. CIM

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Turning fiction into realityOpportunities for mining the moon

Going undergroundThe success of the private/public

partnership to build orbiting spacesolar power was accompanied byincreased confidence. New spacemining companies turned their eye tothe moon with ideas of extracting thewater it felt would propel the orbitaltransportation fleet of the space age.International space agencies collabo-rated to enhance our scientific under-standing of the moon and optionsregarding the construction of lunaroutposts.

After careful study, subterraneanoutposts became the preferredapproach due to the environmentalcomplications associated with puttingpersonnel on the surface of the moon,such as exposure to radiation andsolar flares. Much of the outpost con-struction was done with teleoperatedrock construction robots that werecontrolled from earth.

These safe and secure undergroundfacilities can now be used to develop experimental in-situagricultural techniques that will enable long-term, self-sus-taining lunar operations and new scientific exploration facil-ities such as the latest telescopes for observing the solar sys-tem. This has significantly reduced the amount of personnelnecessary for mining, construction and manufacturing thatwould have been necessary to be launched from earth.

Robotic technologyMany of the lofty plans for mining the moon appeared

to be unattainable at the time of their conception, but grad-ually people began to gain confidence. Led by theCanadian mining industry, collaborative efforts betweenthe international space agencies and private businessesbegan to solve these critical problems. Projects utilized therobotic technologies that grew from the seeds of ideas thathad germinated back in the late 1990s in Canada and werelater refined by the international mining industry.

Now, thanks to this robotics technology, major miningcompanies are able to largely run operations situated in theHigh Arctic from the comfort and convenience of opera-tion centres located in major cities. This not only solved avariety of logistical and safety issues, but also helped oper-ations exact a smaller environmental footprint. Likewise,undersea mines are now operated from the deck of a ship.


upfrontN E W F R O N T I E R S O F M I N I N G b y G r e g B a i d e n

This article presents a futuristic scenario in which readersare transported forward in time. This optimistic outlookdemonstrates how the answer to some of humanity’s chal-lenges might lie in the stars — or, at least, on the moon.

©M

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,Inc

.An artist’s rendering of what space-based solar panels may look like.

The year is 2040 and I am standing in our newly com-missioned Lunar Mining Operations Centre (LMOC) in theheart of Canada’s mining capital, Sudbury, recalling thoseinitial meetings early in the century, when many ideas werebeing proposed about how to mine the moon. At the time,people were concerned about where our future energyrequirements were going to come from. Bold plans weremade in those early days that pushed the boundaries of ourtechnological abilities, and some of those plans involvedthe moon. In particular, they entailed the creation of space-based solar power and the lunar mining of hydrogen.

Here comes the sunMany early twenty-first century scientists had proposed

space-based solar power. The idea was to create orbitingsolar panels that beamed totally “green” power back toearth using microwaves or light. This power was putdirectly on the grid, much in the way hydroelectric plantsdid at the turn of the century. The project resulted in thecreation of technologies necessary to teleconstruct theseorbiting power plants and represented the largest engineer-ing undertaking in space history. But the gamble paid off asthe system now provides enough power to enable a higherstandard of living for most of humanity than during anytime in the history of civilization.

These new operational methods boast fully under-ground mining and processing that are completely self-contained. Few — if any — personnel are required on site.Undersea mining now uses natural biological processing toensure the ecosystem is protected. Environmental respon-sibility has continued to grow in the mining industry withnew agreements being signed to ensure other planetarybodies will also be managed effectively.

Man on the moon — againIn the year 2020, after nearly two decades of robotic

missions to map the moon for minerals and chemicals, thefirst humans returned to the moon since the Apollo mis-sions of the previous century. The initial objectives were toestablish a moon outpost that was safe for humans andbegin detailed exploration and delineation.

It had long been postulated that the Shackleton Crater,located at the Lunar South Pole, was home to hydrogen andpotentially water. The Shackleton site had been selected forits 365-day, 24-hour sun exposure, which enabled it to gen-erate solar power and its main resource, water. It alsoallowed for full communication with earth at all times. Theequatorial regions were thought to contain He3, H2 and CH.

Specialized robotic drills and breakage systems, rockremoval equipment and new microwave ground support

machines conceptualized in the first decade of the 21stcentury were later built and deployed to the moon. Withall the ingredients in place we are able to mine and processour first H2O, H2 and O2 to be used for rocket fuel. Thisgreatly reduced launch costs, as it is significantly cheaperto launch from the moon, avoiding the necessity of break-ing the bonds of earth’s gravity.

Coming back down to earthWhile much of the scenario presented above may seem

a bit far fetched, one thing remains true: whenever andwherever the pioneering of new territory is needed, miningwill be there to answer the call. It is one of a variety ofpotential scenarios being developed by our next generationof explorers. In the meantime, these dreams can evokesome very tangible outcomes for the mining industry inthe short term, including:• the potential to research and develop new prospecting

and exploration technology;• joint investment in new telerobotic mining and con-

struction equipment for terrestrial use in extreme envi-ronments such as the High Arctic;

• the achievement of more sustainable mining develop-ment practices that leave a smaller environmentalfootprint;

May 2009 | 29

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• the ability to research and develop the techniques formining undersea and at high altitude;

• an opportunity to transform the public view of ourindustry;

• the creation of an exciting visionary environment forCanadian research and development in academia andcommercial circles; and

• provide a source of industry and national pride and cap-ture the imagination of our youth, attracting them tothe mining industry.The mining industry has been seeking to solve many of

these practical issues for a very long time. Our involve-ment in this futuristic research could help the Canadianmining industry benefit not only technologically, but alsoto gain the national and international recognition itdeserves. CIM


upfrontN E W F R O N T I E R S O F M I N I N G

Moving on upGrant Isaac, currently the dean of the EdwardsSchool of Business at the University ofSaskatchewan, has been named senior vicepresident corporate services at CamecoCorporation. Isaac, who will assume his newrole in July 2009, joined the University ofSaskatchewan in 2000 and was named dean ofthe former College of Commerce in 2006. Hepiloted the college through its transition to theEdwards School of Business in 2007 and iscredited with attracting significant private sector support to the institution.

Larry Messinger has been appointed seniorproject manager at Norwest Corporation. Withover 34 years’ international experience in thecoal industry, Messinger recently retired fromPeabody Energy. His areas of expertise includefacilities construction, domestic and interna-tional mining property acquisitions, federalcoal leasing, and planning and permitting fornew coal-fired power plant and coal conver-sion facilities.

Rescan Environmental Services Ltd.announced the appointment of AndrewDuthie to its management team. Duthie, anexperienced environmental assessment man-ager and integrative report writer from SouthAfrica, has over 16 years’ experience in envi-ronmental assessment and mining, industrial,water and tourism project management. He isa leading environmental practitioner in themining sector, having conducted assessmentsfor a number of landmark projects.

Potash One Inc. appointed John S. McEwanas vice president of solution processingfor its Legacy Potash project in southernSaskatchewan. McEwan’s 30-year career in thechemical processing field has included solu-tion mining from pilot plant to commercialoperation, process, project, and research engi-neering, and production and technical man-agement. Most recently, he was the principalprocess engineer for Rio Tinto, responsible forprocess and project engineering duties forpotash deposits in Argentina and Canada.

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About the author

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upfrontQ & A b y D a n Z l o t n i k o v

Stephen Lucas’ backgroundranges from his early work asa geologist and a researcher tohis involvement in policy and

planning. This broad spectrum ofexperience has given him a uniqueperspective and prepared him for hisdual role as Assistant DeputyMinister, Minerals and Metals Sector,with Natural Resources Canada anda member of the transitional board ofdirectors for the Canada MiningInnovation Council (CMIC).

CIM: Can you tell us how you came to beinvolved with the CMIC?Lucas: One of the things I took onwhen I joined NRCan as ADM wasworking with a community of inter-ested leaders from industry, universi-ties and governments — both federaland provincial — who were concernedabout the state of mining research andinnovation in Canada and wanted to

do something about it. That led to thenotion of the Canada MiningInnovation Council, which was ini-tially endorsed in concept by both fed-eral and provincial mines ministers inthe fall of 2007, and advanced to thedevelopment of the Pan-CanadianMining Research and Innovation

Strategy and the governance model forthe Council.

The beauty of this is that theCMIC is not a Government ofCanada initiative, but rather aCanadian mining community initia-tive. NRCan supports it, as do fed-eral, provincial and territorial gov-ernments across Canada, through theendorsement of the mines ministersand leaders from industry and uni-versities. We’ve also had endorse-ments from the Mining Associationof Canada (MAC) and the CanadianMining Education Council (CMEC),so I’d say it’s strongly supported bythe mining community in Canada.

CIM: The theme of this issue is “Canada’sGlobal Impact.” Perhaps we can start bygetting your input on the Canadian min-ing industry’s role on the global stage.Lucas: Canada has a very long historyin mining, mineral exploration,

Making a world of differenceDr. Stephen Lucas, ADM Minerals and Metals sector, NRCan,discusses the Canadian mining industry’s role on the global stage


CIMC is a network of industry, academic and government leaders that has been created with the objectiveof enhancing the competitiveness of the Canadian mining industry through excellence in research, innovation,education and commercialization.

The Council is looking for a dynamic individual that is interested in an initial one-year mandate as

Executive DirectorThe candidate should possess the following qualifications:

• Comprehensive knowledge and understanding of the mining industry, especially in the fields of exploration, mining, metallurgy and/or the environment;

• Sound understanding of the importance and issues relating to R&D and innovation and theirrelevance to exploration, mining, metallurgy and/or the environment;

• Good existing national (and international) networking ability; and

• Effective communications skills (with industry, academia and governments)

Any interested candidates should provide his/her letter of interest and resume to CMIC co-chairs(Mr. Engin Özberk and Dr. John Thompson) at [email protected]

For more information, please see the CMIC website www.cmic-ccim.org, under Executive Director.Participate in this great opportunity to actively shape the future of mining R&D in Canada.

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May 2009 | 33

upfrontQ & A

mineral processing, and related tech-nologies and services. In fact, it’swoven in with the history of ourcountry. During the 1990s, and intothis decade, Canadian firms —including mineral exploration, min-ing developers, service industriesand support providers — moved sig-nificantly onto the global stage. Ayear ago, before the current eco-nomic downturn, we had about $110billion of assets globally. In 2008,Canada raised about 37 per cent ofthe equity on the global stage formining or exploration through thestrong cluster of financial andrelated industries, in centres likeToronto and Vancouver. By number,about 57 per cent of the world’sexploration or mining companies arebased out of Canada. It has evolvedsuch that, numerically, Canadianbusiness expertise is the globallydominant force in mining.

CIM: How do you see Canada’s miningindustry changing and evolving in thefuture?Lucas: The demand of nations andsocieties across the world for miner-als and metals will, if anything,increase going forward, particularlyas developing and emergingeconomies — including the emerg-ing middle classes in countries suchas China and India — increase theirconsumption and use of metals inareas such as building infrastruc-ture, automobiles and many otherapplications. That is going to con-tinue the drive for finding newdeposits, so opportunities for min-eral exploration, exploration financ-ing and related services will con-tinue to grow.

In the meantime, some of thesedeposits are going to be harder tofind, as a lot of the easier depositsaround the globe have already beenfound. The challenge is to discoverthe ones that are more deeply hiddenand perhaps more challenging toextract. So there is a call for innova-tive technologies to look for theseharder to find deposits.

Increasing expectations from pub-lic and governments in terms ofreducing the environmental foot-print of mines will continue to drivethe development of new technolo-gies, processes and approaches.There will be clear benefits to earlyadopters and nations that supportthe research and innovation needing

to bring these on-stream. We thinkCanada is well positioned for that.

CIM: Can you tell us about some of thenew initiatives that the CMIC is lookingat both in the short term and theyears ahead?Lucas: In its strategy outline, thecouncil, highlights a number of key

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areas. There is a critical need for peo-ple in the industry and, in particular,highly qualified ones, such as engi-neers, geologists and skilled tradespeople. Notwithstanding the chal-lenges brought on by the economicdownturn, we expect increaseddemand in the medium and longerterm. Demographics suggest thatthere will still be shortages in the nextfive to ten years in a number of thesekey areas, both in Canada and aroundthe world. Clearly, we want to ensurethat through the CMIC’s work we cancontinue to attract and help supportthe ongoing professional develop-ment of researchers, geologists andengineers. A key part of that is keep-ing students interested in careers inthis industry.

The second area of focus is onimproving collaborative efforts,thereby enabling us to better multi-ply the benefits of Canada’s researchbrainpower and industry work in

some of the key areas. We are devel-oping critical mass around some ofthese issues and have been bringingtechnologies into demonstration andcommercialization, such as in theareas of green mining.

Another of the strategic areas offocus is that of targeted research —looking at some of the breakthroughareas where key advances mightneed to be made over the next num-ber of years. The goal is to reducethe cost of production, improvecompetitiveness and productivity,and meet environmental standards.

Among those areas, the environ-ment is a key focus. This includesthings such as improving energy effi-ciency, not only in an effort to reducecosts to companies, but also toreduce their greenhouse gas emis-sions. We are also looking at watermanagement issues — minimizingwater use and ensuring the quality ofwater discharge from mining opera-


upfrontQ & A

tions. That’s a targeted area that isvery much in line with what futureopportunities on the global stage areexpected to hold.

Finally, we’re also looking atwhere companies can improve theirproductivity and competitivenessthrough improvements in the effi-ciency of their operation — rightfrom the exploration stage throughto mine closure.

CIM: In times of economic difficulty,R&D and innovation can sometimes beone of the first things on the choppingblock. What are the implications of this?Lucas: That kind of challenge is onethat often manifests itself in thelonger term because of the need, inmany cases, for patient investment inresearch and technology developmentand demonstration. Certainly theGovernment of Canada has recog-nized that fact in the most recent fed-eral budget. There were measures to

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help provide government support to avariety of programs with investmentsin clean energy technology and a vari-ety of other projects across the spec-trum. In short, it’s more a case ofopportunity cost. Projects in areaswhere advances could be made —such as systematic improvements inthe energy efficiency of mining oper-ations through new approaches likeventilation on demand (targetingareas where air is needed at the timerather than ventilating the entiremine all of the time) — could bepostponed. Some of the cost savingsor technology market opportunitiesfor Canadian suppliers could bedeferred, or in some cases lost, if sup-pliers in other countries sustain theeffort and corner those markets. Thatis not to underplay the challenge thatis faced by companies workingthrough these types of decisions. Ithink that’s in part why the CMIC wascreated. It recognizes that a real three-way partnership is needed betweenindustry, governments and educa-tional institutions.

CIM: We’ve witnessed a lot of fallout onthe HR front. What message should webe sending to the industry, suppliers andgovernment about the impact of hiringfreezes etc.? Lucas: It’s an unfortunate conse-quence of the economic downturnthat companies are working toaddress their bottom line to make itthrough a period of very depressedprices and markets. A number ofcompanies and government institu-tions are working to try to step upand sustain student employmentopportunities. John Hadjigeorgiou ofthe CMEC and Malcolm Scoble ofCMIC recently sent out an open let-ter to companies and universities,encouraging them to hire students.So there is some leadership actionbeing taken.

I also think the message that theindustry didn’t want to have historyrepeat itself was one we heard loudand clear during the consultationsthat the CMIC did in the spring of

2008. As a consequence of the eco-nomic downturn in the late 1990s andthe early part of this decade, peopleshed a lot of labour and plenty of folksleft mining. Then, during the morerecent upswing, the industry experi-enced challenges in finding andattracting people and we witnessed aninflation in wages.

So I think the single message isabout making small investments inthe longer term, knowing that thingswill turn around. It’s also about help-ing to keep the students who haveflocked to our schools in miningengineering and geology programs,by offering summer work experiencepositions.

CIM: Although nobody has a crystal ball,what do you predict the short- and long-term future holds for the Canadian min-ing industry on the global stage? Lucas: I’m not going to prognosticateon when things are going to turnaround, but definitely all signs arethat the next year is going to continueto be challenging, particularly forbase metals mining. There will beopportunities for acquisitions andgrowth in companies that are wellpositioned, so the current situation isone of weathering the storm and forthose who are well-positioned to takeadvantage of it.

The longer term picture is morepositive. The expectation is thatdemand and growth will resume,fuelled by countries such as China andbrought on by infrastructure growth,which is very metals-intensive.Through their global reach, Canadianfirms are well-positioned to continueto take advantage of that. I thinkthrough that strong cluster of expert-ise, along with the leadership of theindustry associations, the CMIC,NRCan’s green mining initiatives, andthe Canadian government’s focus oncorporate social responsibility strategyfor extractive industries, we’ll see acontinued strengthening of opportuni-ties for competitive and responsibleindustry, both at home and on theglobal stage. CIM

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May 2009 | 37

canada’s global impact

by Dan Zlotnikov

Anyone even peripherally involved with Canadianmining knows that the industry is a vital part of thiscountry’s economy and that Canada is a major worldplayer. However, even if one is looking at the big picturefrom the perspective of a multinational operator, the fullscale of the industry may be difficult to comprehend.According to Gavin Graham, director of investment,BMO Asset Management, of the CDN$27 billion thatthe company’s Canadian arm has under management,approximately $2 billion is attributed to mining equity.“It’s not necessarily because we’re enthusiastic fans ofmining,” explained Graham, “but rather, because themining industry is a very big percentage of Canadianstock market capitalization.” Between mining andenergy, Graham estimated that about half of the totalCanadian stock market is exposed to resources.

With so much current and historical activity in themining sector, Canada has a well-established reputationas a great source of mining expertise. Over the years,Canadian mining engineers, geologists and variousother mining-related professionals have travelled theglobe, working on projects everywhere from theAustralian plains to the Chilean mountains. ManyCanadian mining firms have done the same. In 2007,Canadian companies held interests in 360 mining proj-ects outside of its borders, and you’d be hard-pressedto find a country that did not have a Canadian miningcompany working in it.

But recent years have brought many changes to theindustry, both inside and outside of Canada. What doesthe future hold then for Canadian mining on the globalstage?

Taking a lead role on the global stage

Reprinted with permission of Beyond Borders

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Big impressionsGiven the relative scale of the parties involved, it is

important to first consider what changes Canadian minersbring to the global mining industry. Take for exampleIAMGOLD’s Sadiola project in Mali, West Africa. JoeConway, IAMGOLD president and CEO, said that when thecompany began operating there, the country was very poor.“In terms of GDP the impact of the project was tremen-dous,” observed Conway. “Itresulted in about a 20 to 30 percent increase in that country’sGDP. ”

Sadiola had more than financialimplications for the region — liter-ally thousands of people movedcloser to the mine in hope of ben-efiting from the activity. “You defi-nitely see a large impetus for peo-ple coming into these communi-ties,” said Conway. “I think when wewere initially building the projectthere might have been 1,000 peo-ple, and now there are probably20,000.”

The challenge, Conway pointedout, goes beyond that of dealingwith underdeveloped infrastruc-ture, to that of creating some sus-tainability at the local level. “Inmany of our operations, we havefound it necessary to set up foun-

dations specifically for localdevelopment,” he said. Thismeans looking beyond the minesite and reaching out to support— and in some instances evencreate and operate — commu-nity-focused initiatives address-ing the needs of the local resi-dents. “Unfortunately we operatein certain parts of Africa thathave a very significant AIDSproblem,” said Conway. “Again,we work through the local gov-ernments to make sure thatthere is a high level of educationaround the issue and help peo-ple who do have the virus to dealwith it.” In Botswana, IAMGOLDis also one of the major support-ers of a local orphanage, whereall the children have lost theirparents to AIDS. “There’s noquestion,” said Conway, “you dohave to be socially responsible.”

This view is shared by BarrickGold, the world’s largest gold pro-

ducer, a company that is also on the front lines in the bat-tle against HIV/AIDS in Tanzania, Papua New Guinea andSouth Africa. It operates 27 producing mines around theworld, which means its community relations projects aremany and varied.

According to Nancy White, the company’s director ofcommunications for responsible mining, such projectsare a major area of focus for Barrick. Aside from the

Barrick will work with Un Techo para Chile to provide 700 families (representing an estimated 3,000 people) with newhomes in safe neighborhoods as part of its Atacama Commitment. (Photo reprinted with permission of Beyond Borders)

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Rampant unemployment in the Atacama region means many families have had no choice but to live in “campamentos” —slums of substandard housing in unsafe neighborhoods.

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May 2009 | 39


economic benefits resulting from job creation, taxes andthe purchase of local goods and services, in 2007 thecompany reports to have contributed over US$40 millionto communities through community programs (e.g.health and education), scholarships, infrastructure proj-ects to build roads and supply power to developingregions, as well as charitable donations. That same year,the company spent almost half a billion dollars on goodsand services from businesses in developing countries inkeeping with its “buy local first” policy.

Of particular note is Barrick’s partnership with local non-governmental organizations to helpalleviate the pockets of poverty thatexist in the Atacama Region of north-ern Chile where thousands of resi-dents live below the poverty line.Called the Atacama Commitment, thiseffort of targeted programs and initia-tives focuses on housing, education,health and socio-economic develop-ment and is part of Barrick’s commit-ment to improve economic and socialconditions in the regions where itoperates.

Many of the issues that Canadianoperators face abroad are not that dif-ferent from ones faced domestically;the more promising deposits are fre-quently in remote areas with little exist-ing infrastructure. Environmentalassessments must be completed andlicenses must be received. Local laws must be obeyed. Simple,really…except when it is anything but.

Due diligence dueThe type of issues a company

might encounter varies greatly byjurisdiction, remarked MichaelBourassa, a lawyer with the globalmining group at Fasken MartineauDuMoulin. Some of the most geologi-cally promising jurisdictions may beless politically stable than others;sometimes, a great deal less, whichmeans paying careful attention towhat one agrees to. “The first issuewould be: what are the laws that relateto the security of the tenure itself,”Bourassa explained. “When it comesto developing a property in a foreignjurisdiction, you want to make sureyou’ve got good counsel that can dothorough due diligence to make surethat nobody else has acquired theserights and that they can’t just be takenaway at the government’s whim.”

But getting the right government licensing is only thebeginning. Environmental assessments must be com-pleted, but those are often far from straightforward. LeonBotham, mining sector leader at environmental engineer-ing firm Golder Associates, explained. “If some of the fund-ing comes from the World Bank or any of the signatoriesto the Equator Principles, then the international environ-mental standards must be met.” Botham said that thesestandards are rarely identical to the national ones, and thata company must first determine which of the two sets ofguidelines is the more stringent and meet those — which

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frequently means switching from one to the other and backagain numerous times on the same project.

Then, there may also be other requirements. “Thereare consultants in Mongolia that provide environmentalimpact assessment work to the Mongolian government’s

requirements,” Botham explained byway of example. “And to actually com-plete the assessment for the projectyou have to be a Mongolian company;Western consulting firms are notallowed to do that. But most of thesecompanies would not be able to pre-pare an assessment to World Bankstandards. So you essentially have tohave two separate environmentalimpact assessments.”

Corporate socialresponsibility

But suppose all of the environ-mental assessments are completedand approved. Next comes anotherchallenge: securing the social licenseto operate. To do its part, the miningcompany must meet its corporatesocial responsibility (CSR) obliga-tions to the local community, govern-

ment and stakeholders.However, according to White, at that stage, this is one

task that should have already commenced. Being granted,and then maintaining that social license, White said, is cru-cial to Barrick’s continued operations. “There has been ashift in public attitudes that’s been occurring over the lastdecade or more,” she observed. “There is a growing pub-lic perception that success in business today is beingmeasured in more than financial terms and that the pri-vate sector has an important role to play in society. Miningoperations can be a powerful catalyst for economic andsocial development, particularly in developing regions.”

To meet its commitments, Barrick has implemented awhole range of initiatives, but the central part of thecompany’s activities can be summed up as follows:Consult early, consult often, and consult continuously tounderstand local needs and concerns and build pro-grams that reflect the aspirations of the community.“Consultation and engagement are really a critical part ofour community relations approach,” said White. “We beginthat process of engagement very early, and we consultextensively with communities, leaders, and a host ofstakeholders. That starts at the exploration phase andcontinues throughout the life of the mine.”

But according to Conway, this process can presentchallenges. “Sometimes the benefits of mining go to thefederal government and the local people don’t profit fromthem as much as the country as a whole does,” heexplained. The solution, he said, is through education.“We spend a lot of the time with the governments talkingabout transparency. We have to be transparent in termsof what benefits we are providing, and the governmenthas to be transparent on the funds that are coming inand what they are doing with them. In any case, the wel-fare of local communities is always of concern as we



Barrick's Buzwagi mine in Tanzania constructed a rainwater harvester that will capture rainfall and channel it into acovered reservoir that holds 1.5 million cubic metres of water. (Photo reprinted with permission from Beyond Borders)

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deal with them on a day-to-day basis and they are oftenan important source of employees.

Conway suggested that in the future, the CSR expec-tations placed on mining operators abroad will continueto increase. Graham agreed, and also highlighted theinherent benefits in operating in an ethical and sustain-able manner. “Not only is it good corporate citizenship,but it can also help a company’s profile with investors,”he explained, and pointed to the growing number ofinvestment companies specializing in ethical investmentportfolios. “You can put a substantial premium on yourshare price or valuation if you do follow good corporategovernance and social responsi-bility.”

Local traininginitiatives

One CSR initiative that isunderscored by many miningcompanies offers clear benefits toboth the local community and theoperator. Training local residentsprovides skilled job opportunitiesin what are frequently remote andundeveloped areas and reducesthe operator’s reliance on expatri-ate workers. Enlarging the avail-able labour pool also serves as ahedge against future competitionfor the operator.

Graham acknowledged thatthe labour shortages of early2008 have been greatly allevi-ated because of the current eco-nomic situation, but warned thatthis availability of skilled workerswas likely to disappear as soonas the markets begin to showsigns of recovery. “Any companythat is doing development orprospecting in foreign jurisdic-tions is very foolish if they don’ttrain the local workforce — andit’s very encouraging to hear thatthey are.”

According to Conway,IAMGOLD has implemented anumber of programs at its opera-tions to train people with virtuallyno mining-related experience toeventually be able to fill highlytechnical positions. “You’re liter-ally taking some people who haveprobably never operated amachine to driving large equip-ment,” Conway explained. “Thatrequires pretty extensive training

facilities.” Within six months, Conway said the traineeshad acquired the basics. By the end of two years’ train-ing, IAMGOLD operations that previously relied heavilyon expatriate workers were able to cut the expat num-bers by as much as half. “At the Rosebel mine inSuriname, we had 693 nationals employed in 2005 (orabout 85 per cent of the workforce),” Conway pointedout. “This has increased to 1,150 Surinamese, represent-ing almost 96 per cent of Rosebel`s workforce today.”

Barrick has seen similar successes with its trainingprogram. The soon-to-be-opened Buzwagi mine inTanzania expects to employ 700 full-time staff. Of these,

May 2009 | 41


Children attending class at the new primary school built by IAMGOLD’s Rosebel mine for the local village of NieuwKoffiekamp in Suriname.

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White said 40 per cent will be Tanzanians from the localcommunity and a further 50 per cent from other parts ofthe country, with the remaining workers coming from out-side Tanzania. To address the skills shortage in Tanzania,Barrick is sponsoring two- and three-year vocationaltraining programs and offering apprenticeships (in con-junction with the Tanzanian government, the TanzanianChamber of Minerals and Energy and AngloGold Ashanti)to increase the number of accredited skilled workers inthe country.

Mitigating political risksBut all these training efforts carry a hidden political

risk, suggested Graham. “One of the issues surroundsthe security of your legal possession of that resource,”he explained. “Is a company going to expend lots of timeand resources only to find out once they’ve actually dis-covered something and started to get it into production,that the local government says, ‘you know, I think we’regoing to change the rules on this; I think we want alarger slice.’?”

In a way, training the local community creates a hedgenot just for the company but also for the government.Should that government decide to take over the project, itwould find itself with a pre-trained, experienced workforcecapable of taking over some, or possibly even all, of themine operations.

Graham suggested that to mitigate the risk, a miningcompany should diversify its portfolio. The greater thenumber of national zones in which a company has oper-

ations, the lower the risk of all its holdings being seizedor its royalty agreements forcibly renegotiated. “Ideally, acompany would have some properties in developed mar-kets, with secure legal systems, like North America,Western Europe or Australia,” he said. “They could thenhave some intermediates in emerging markets that havea pretty good track record of working with major foreigninvestors. And then, if they’re feeling adventurous orlucky, they might go with some of the higher-risk, high-reward plays.” Graham acknowledged that this approachdoes not apply to smaller outfits with one or two proj-ects. “Then the question comes down to how stronglyyou believe in your relationship with the local govern-ment,” he said.

Bourassa pointed to international arbitration tribunals asa way to mitigate the political risk. “One aspect that com-panies need to look at if they are ultimately in a disputepertaining to the rights in a foreign jurisdiction, is how canthey go to a court to get a ruling that is just and fair,” hesaid. “Frequently in these jurisdictions, the courts don’thave capacity to deal with these issues or deal with themin a fair way.”

But even an international arbitrator might be power-less to enforce a judgment. This is why, Bourassa said,it is important that companies consider existing bilateraltrade agreements. If such agreements exist betweenthe country in which the company or its subsidiaries areregistered and the country in which it operates, an inter-national arbitration tribunal would have much greaterpower over the parties involved.



At the North Mara mine in Tanzania, Barrick works in close partnership with the African Medical and Research Foundation to combat HIV/AIDS. Peer health educators raiseawareness about HIV/AIDS at the mine site and within the Mara community.

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If the political risks are so great, the infrastruc-ture is lacking — if not absent outright — and themineral demand trying to crawl off the bottom ofthe graph, why go outside of Canada in the firstplace? The reasons, according to Bourassa, aretwo-fold. First and foremost, of course, is the min-eral potential of a geographical area. This is not tosay that Canada’s resources have been exhausted,but there are vast opportunities elsewhere. Evenin high-risk areas, sometimes the mineral wealth issuch that companies feel the risk is worth it.Bourassa pointed to the Democratic Republic ofthe Congo as one such case. “The political riskthere is huge, the infrastructure is poor, and thereis political instability,” he explained. “But the mineralpotential is enormous: copper, gold and diamonds,to name a few. So if they know that they can getgood title to their properties, they are prepared totake that risk.”

The second, possibly more important factor,according to Bourassa, is the knowledge and rela-tionships the people in the company may have ina particular area. “It may be a gold-focused com-pany, and the management has a lot of knowledgeand comfort operating in Latin American coun-tries, for example. They will look for opportunitiesin jurisdictions that they know and understand.”With the exception of the multinational giants,Bourassa said most companies often tend tofocus on particular geographical areas.

Feeling the crunchCredit crunch, recession, economic downturn or

a sharp correction — no matter what you call it, it ison everyone’s mind, and the implications are thesame: the money that was available two years agofor new and existing mining projects has now allbut vanished.

“A lot of projects have been killed stone deadby the economic crisis and the lack of access tocapital,” acknowledged Graham. “These projects —or rather, their absence — will create a gap in newsupply coming online, and the normal projectstart-up times will be extended by the lack ofskilled workers. This means that there will be littleto no new supply entering the market in the firsttwo to three years following the recovery indemand.”

May 2009 | 43


1. A crew at Barrick's Buzwagi mine in Tanzania assembles thesite's sag mill, part of the mine's 12,000 ton-per-day processfacility. 2. Almost 96 per cent of the work force at IAMGOLD'sRosebel mine in Suriname is comprised of Surinamese nationals.3. Blades and towers for the construction of 10 wind turbines atBarrick’s Punta Colorada wind farm have arrived at the Port ofCoquimbo in Chile.

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The green planetBotham emphasized the importance of continuing

development into the area of sustainable mining practicesand claimed there is already a great deal of interest fromthe industry on the subject. Examples include Barrick’sclean energy initiatives, including a solar power project inNevada, the construction of the world’s highest altitudewind turbine in Argentina and a $70 million wind farm inPunta Colorada, Chile. When completed, this latest projectwill consist of 18 wind turbines and generate 36megawatts of power. It will be connected to the ChileanCentral Interconnected System to help meet the powerneeds of the mining, industrial and residential sectors. “Thegreening of industry has been taking place for years now,”said White. “In the mining industry, environmental responsi-bility is vital to maintaining the trust of the community.”

The combination of a positive long-term outlook andincreasingly strict operating conditions present both chal-lenges and opportunities for Canada’s mining industry.More technical expertise will be required to meet theenvironmental guidelines and greater efforts will have tobe made to meet social responsibility commitments. ButCanada’s reputation for ethical, responsible operation,and the industry’s focus on long-term investment will helpensure Canadian mining companies continue to make apositive difference not just within our borders but allacross the globe. CIM



Minimizing the impact on the environment is an important component ofIAMGOLD's operations.

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l’impact mondial du Canada

N’importe qui le moindrement impliqué dans l’indus-trie minière canadienne sait que celle-ci forme unepartie essentielle de l’économie du pays. Il peut

cependant être difficile pour une multinationale nonminière d’en apprécier l’ampleur. Selon Gavin Graham,directeur des investissements chez BMO AssetManagement, environ 2 milliards des 27 milliards de dol-lars (canadiens) gérés par la compagnie au Canada sontattribués aux valeurs minières. « Ce n’est pas que nousaimions les mines, c’est que l’industrie minière forme unegrande partie des capitaux boursiers. Entre les mines etl’énergie, environ la moitié du marché canadien des valeursmobilières touche aux ressources », dit-il.

La réputation du Canada en tant qu’expert en mines estbien établie. En 2007, les compagnies canadiennes déte-naient des intérêts dans 360 projets miniers à l’étranger.Cependant, l’industrie change; que lui réserve l’avenir?

ImpressionsIl faut tout d’abord évaluer les changements apportés

par les mineurs canadiens à l’industrie minière mondiale.Par exemple, le projet Sadiola d’IAMGOLD au Mali, enAfrique occidentale. Selon Joe Conway, président-directeur général d’IAMGOLD, l’impact du projet dans cepays très pauvre a été énorme et a fait croître le PIB de 20à 30 pour cent. Le projet comportait plus que des implica-tions financières; des milliers de personnes ont déménagépour pouvoir bénéficier de cette activité.

Les défis vont bien au-delà des infrastructures sous-développées. « Dans de nombreuses exploitations, il a éténécessaire de bâtir des fondations spécifiquement pour ledéveloppement local, voire même créer et exploiter des ini-tiatives communautaires pour répondre aux besoins de lapopulation locale. Malheureusement, nous exploitons dansdes régions à forte incidence de SIDA. Nous travaillonsavec les gouvernements pour éduquer les gens pris avecle virus. Au Botswana, IAMGOLD supporte un orphelinatlocal où les parents des enfants sont tous morts du SIDA.Nous devons absolument être socialement responsables »,dit M. Conway.

Ce point de vue est partagé par la Société AurifèreBarrick, le plus grand producteur d’or au monde, avec 27mines en production à travers le globe. Selon Nancy White,directrice des communications pour une exploitationminière responsable, de tels projets sont dans la mire de lacompagnie. En 2007, la compagnie a contribué 40 millionsde dollars US en bénéfices aux communautés, sous formede projets d’amélioration des infrastructures à des bourseset des dons à des organismes locaux.

L’impact d’un tel soutien va bien au-delà de la vie de lamine. « Nous avons hérité de l’ancienne mine Homestakedans le Dakota du Sud avec l’entente que nous la fermeri-ons. Nous avons ensuite donné la mine à l’État pour la con-struction d’un laboratoire de recherche sur les neutrinos.Ce projet devrait avoir des retombées de plus de 1 milliardde dollars US.

Prendre un rôle de premier plan sur la scène mondiale L’éolienne de Veladero

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May 2009 | 47


Plus ça change, moins c’est pareilLes enjeux rencontrés varient selon la juridiction, signale

Michael Bourassa, un avocat de la firme Fasken MartineauDuMoulin. Des gisements géologiquement prometteurspeuvent être situés dans des juridictions politiques trèsinstables. « Le premier enjeu est de s’assurer du mandat.Lorsque vient le temps de développer une propriété, il fauts’assurer d’en détenir les droits et que le gouvernement nepourra pas tout simplement changer d’idée. »

Obtenir les bons permis n’est qu’un début, suivent lesétudes d’impact environnemental, qui sont souvent loind’être faciles. Leon Botham, chef du secteur minier – génieenvironnemental, Golder et Associés explique : « Si desfonds proviennent de la Banque mondiale ou d’un des sig-nataires des Principes de l’Équateur, il faut alors satisfaireaux normes environnementales internationales. » Cesnormes sont rarement identiques aux normes nationales; lacompagnie doit donc déterminer lesquelles seront plusexigeantes et s’y soumettre.

Il y a souvent d’autres exigences. Par exemple, enMongolie, l’évaluation doit être effectuée par une compa-gnie mongolienne; cependant, les compagnies locales nepeuvent pas préparer des évaluations selon les normes dela Banque mondiale. Il faut donc effectuer deux évaluationsd’impact distinctes.

La responsabilité socialedes entreprises

Une fois les évaluations complétées, un autre défi semanifeste : l’obtention de l’aval de la société pourexercer les activités. Selon Mme White, ce processusdevrait déjà être enclenché. « Les attitudes publiques ontévolué. La perception du public est que le gouvernementet le secteur privé ont un rôle important à jouer; la com-pagnie minière doit remplir ses obligations sociales.Barrick a mis en place diverses initiatives qui peuventêtre résumées ainsi : consultez tôt, consultez souvent etconsultez continuellement. Nous établissons des consul-tations avec les communautés et leurs chefs. Cela com-mence avant même l’exploration et se poursuit tout aulong de la vie de la mine. » Barrick supporte de plus denombreux programmes sociaux.

Les bénéfices de l’exploitation minière vont parfoisaux gouvernements et les communautés locales enbénéficient moins. Selon M. Conway, « La solution estdans l’éducation, dans la transparence; nous devonsexpliquer les bénéfices que nous apportons et le gou-vernement doit être transparent quant aux fonds quenous fournissons et ce qu’il en fait. Avec une bonne gou-vernance corporative et un engagement à être une entre-prise responsable, vous pouvez mettre une prime sur lavaleur de votre action. »

La main-d’œuvreUne initiative de responsabilité sociale est de former les

résidents locaux, diminuant ainsi le besoin d’importer de la

main-d’œuvre et servant de protection par rapport à unecompétition future de la part d’autres compagnies. Bienque le manque de main-d’œuvre ait été atténué par la criseéconomique actuelle, la disponibilité des ouvriers spécia-lisés disparaîtra avec la reprise économique.

IAMGOLD a élaboré des programmes de formationpour des gens sans aucune expérience des mines. « Desgens qui n’ont jamais tenu un marteau conduisent main-tenant des équipements lourds. Après deux années de for-mation, IAMGOLD a pu couper de moitié le nombre d’ex-patriés. » Barrick a obtenu des résultats semblables. À lamine Buzwagi en Tanzanie, seulement 7 % des travailleursproviendront de l’extérieur du pays.

Atténuer les risques politiquesCependant, tous ces efforts de formation cachent un

risque politique, la sécurité de votre possession légalede la ressource. Est-ce qu’une compagnie va dépenserbeaucoup de temps et de ressources pour apprendreque les règles ont changé, que le pays veut une plusgrande redevance? La formation de la main-d’œuvreprofitera grandement au gouvernement s’il décide des’approprier la mine.

M. Graham suggère d’atténuer le risque en diversifiantle portfolio. « Idéalement, une compagnie aurait quelquespropriétés dans des marchés développés avec des sys-tèmes légaux sûrs, par exemple l’Amérique du Nord,l’Europe de l’Ouest ou l’Australie et quelques propriétésdans les marchés en émergence qui ont une bonne répu-tation de travailler avec des investisseurs étrangers. Puis, sielle se sent aventureuse, elle pourrait avoir quelques pro-priétés plus à risque. » Il reconnaît cependant que cela nes’applique pas aux petites compagnies qui n’ont qu’un oudeux projets.

Les tribunaux internationaux peuvent être incapables deforcer l’exécution d’un jugement. Il est alors important queles compagnies étudient la possibilité d’ententesbilatérales entre le pays où se situe l’exploitation et le paysd’origine de l’exploitant. Les tribunaux d’arbitrage interna-tionaux auraient alors plus de pouvoirs.

Si les risques politiques sont élevés, les infrastructures,inexistantes et la demande, faible, alors pourquoi chercherà l’extérieur du pays? Selon M. Bourassa, c’est première-ment en raison du potentiel minéral : au Canada, les gise-ments les plus faciles à exploiter sont déjà exploités.Deuxièmement, il y a les connaissances et les relationsque peuvent avoir des gens de la compagnie, par exemple,se sentir très à l’aise en Amérique latine.

La richesse minérale est parfois telle que la compagniejuge que le risque en vaut la peine. « En Républiquedémocratique du Congo, le risque est énorme, les infra-structures sont mauvaises et le climat politique est insta-ble », explique M. Bourassa. « Le potentiel minéral estcependant extraordinaire : argent, cuivre, métaux debase, or et même des diamants. Les compagnies sontprêtes à courir le risque si elles peuvent avoir un solidetitre pour la propriété. »



Ressentir la récessionResserrement du crédit, réces-

sion, correction des marchés, peuimporte le mot, les implications sontles mêmes : l’argent disponible il y adeux ans pour de nouveaux projets apresque disparu. Cela signifie qu’il yaura peu ou pas d’offre sur lesmarchés durant les deux à trois pre-mières années suivant la reprise.

Les gouvernements de plusieurspays perçoivent la poussée de l’ex-ploitation minière comme unesource de revenus, par les rede-vances et les permis; les règlementsportant sur l’environnement ontaussi été resserrés. Même si larécession assouplissait les poli-tiques de certains pays, ce ne serapas le cas pour les contraintes envi-ronnementales, surtout que de nom-breux projets sont financés par dessources internationales telles que laBanque mondiale.

Jumeler des perspectives positives et des conditionsd’exploitation strictes est à la fois un défi et une occasionpour l’industrie minière canadienne. Il faudra encore plusd’expertise technologique pour honorer les engagements,

mais la réputation du Canada à exploiter de manièreéthique et responsable aidera à assurer que les compag-nies minières canadiennes font une différence positive, aupays et à l’étranger. CIM

Barrick a investi 600 000 $ pour construire un meilleur environnement d’apprentissage pour les écoliers de Buzwagi.

CanadaMiningInnovation CouncilConseil canadiende l’innovationminière

Le CCIM est un réseau de chefs de file des milieux industriels, académiques et gouvernementaux créé en vue de ren-forcer la compétitivité d’une industrie minière canadienne responsable grâce à l’excellence en recherche, en innova-tion, en éducation et en commercialisation.

Le Conseil recherche un individu dynamiquequi serait intéressé par une expérience initiale d’un an comme

Directeur exécutif pour un joueur, récemment incorporé,dans le domaine de la recherche minière canadienne.

Des candidats ayant les qualités suivantes :• Bonne connaissance et compréhension de l’industrie minière, spécialement dans les domaines

de l’exploration, de l’extraction minière, de la métallurgie et/ou de l’environnement;• Bonne compréhension de l’importance et des enjeux relatifs à la R-D et l’innovation dans les

domaines de l’exploration, de l’extraction minière, de la métallurgie et/ou de l’environnement;• Bonne aptitude actuelle au réseautage au niveau national (et international); et,• Forte compétence aux nivaux des communications

(avec les milieux industriels, académiques et gouvernementaux).

Tous les candidats intéressés doivent envoyer leur lettre d’intention et leur CV aux co-présidents du CCIM(M. Engin Özberk et Dr John Thompson) à l’adresse : [email protected]

Pour de plus amples renseignements, veuillez aller au site du CCIM, www.cmic-ccim.org, sous Directeur exécutif.

Participez à cette occasion exceptionnelle de modeler l’avenir de la recherche minière au Canada.

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supply side

May 2009 | 49

The mining industry is a cyclicalthing and we are now entering a lowperiod that may last for some time.Mining suppliers need strategies, notonly to get them through the difficulttime, but also to prepare them for therecovery. Here are some things thatyou may wish to think about.

First of all, the downturn will noteliminate the current skilled labourshortages in the industry. The MiningIndustry Human Resources Councilprojects an annual labour demand of4,600 people until 2016, even underconditions of industry contraction.Based on retirement alone, the miningindustry will continue to experiencepressures in attracting, recruiting andretaining skilled workers through2009. Each job that you save today isone that you won’t have to pay to filllater. Do everything you can to be agood employer and retain staff.

Despite the current negative com-modities, financial and economic situ-ations, there is every reason to staypositive. Based on the five cycles overthe last 50 years, there will be anotherexpansion in mineral exploration,development and production. Conveyyour confidence in this to youremployees and colleagues, eventhough it is difficult to predict whenthings will pick up.

Prices of most commodities —other than gold — while lower thana year ago, are quite high by histori-cal standards, although production

costs have risen sub-stantially. The funda-mentals for a continu-ing strong demand for

mined products are still in place dueto the growth of developingeconomies. Because exploration willsuffer heavily, the world may finditself even further behind in itsresource requirements and an evenbigger boom may result.

It takes time to develop new prod-ucts and services. The initial stages ofmarketing also take time before an ini-tial sale, particularly if the develop-ment is a quantum jump from previoustechnology. Now is the time to be inno-vative. Time and people are becomingmore available. If money is lacking,search out partnerships. Investigatefederal and provincial programs thatassist with R&D. Be ready with newofferings when markets pick up.

Mining companies are cost-con-scious, even in the best of times. Ingood times, it is the only way they canmake more money. Now, it is essentialto keep costs low in order to keepmines open. Thus, any new ways thatyou can invent to save time andmoney in extracting or processing willgive you a competitive advantage.

When faced with shrinking rev-enues, some managers find it wise toreduce their marketing efforts.Others know that stopping market-ing is like not paying your electricitybill — eventually the lights will goout. Develop strategies that willensure that you retain your keyclients. Ensure that yourpresence in the marketplaceis maintained throughadvertising at trade shows,in print and on the web.

Marketing need not beexpensive if it is well plannedand executed. If you havetime, you should consider

attending more business events andmaking cold calls on new potentialclients. Another idea is to use extra timeto prepare that technical paper to pub-lish or present at the next convention.

A slow period is the time toimprove your selling punch. Whenwas the last time you or youremployees took a sales course tosharpen your skills? What aboutyour network of sales agents or dis-tributors? You could motivate themby running a meeting at your plantwhere they could learn more aboutyou and your products or services, tohelp them sell better.

The world is a big place. There areopportunities in places that you maynot have thought of. Do someresearch. Investigate foreign markets.Ensure that you are aware of all theservices that governments offer tohelp exporters, and that you usethose services that will help yourbusiness.

The current spate of mine clo-sures, mothballing of developmentprojects and slashing of explorationspending will not have hit all supplyfirms equally, because many areworking against backlogs. However,do not ignore the fact that the lowpart of the mining cycle is upon us.The earlier that you realize that theapproaches that you have been usingin the past few years of expandingmarkets will probably not serve youwell in the next year or two, the bet-ter. Prepare now for tough times, fol-lowed by a recovery. CIM

About the authorJon Baird, managing directorof CAMESE and president ofPDAC, is interested incollective approaches toenhancing the Canadianbrand in the world of mining.

Prepare for the recoveryThe current lull is an opportunity for mining companiesto do some serious thinking and smart positioning

by Jon Baird

A page for and about the supply side of the Canadian mining industry

Each jobthat you save today

is one that youwon’t have to

pay to fill later.

canadians abroad

From Kamloops with mucho gustoCareer development has global impact for mining veteran

was unheard of, as the tendency was tohave metallurgical engineers.”

The three-day course on projectmanagement lit a fire in Rondestvedtthat he has been feeding ever since. Hefollowed the course up by earning aMaster’s certificate and then a ProjectManagement Professional designation,making the eight-hour drive fromKamloops to Calgary every otherweekend for five months to attend hiscourse. Currently, he is taking advan-tage of the Business AdministrationGraduate Diploma program that Teckoffers through Simon Fraser University.

Rondestvedt related his story on alate summer morning in March. If thatsounds a little backwards, it is. Thattrip to Toronto turned his worldupside down, both professionally andgeographically.

“For the last three years I’d beensaying that my ideal job would be justgoing around the world starting upnew mills for Teck,” said Rondestvedtover an Internet phone connectionfrom his ocean-side apartment in LaSerena, Chile. He is now just a fewmonths into his ‘ideal job’ as commis-sioning manager at the Carmen deAndacollo copper mine. For the nexttwo years, he will oversee the startup

of a new semi-autogenous grindingmill at the mine in north-centralChile, and mentor those who will takeover once his term there ends.Current economic conditions havemade the future less clear forRondestvedt, but he is content withhis choice, enthusiastic about thebroadened horizon and excited aboutthe challenges in South America.

The impact of Rondestvedt’s newworksite — the Andacollo mine —on the area is broad and deep. It sitsnext to the village of the same name,about 80 kilometres southeast of LaSerena. The proximity allows Teck todraw many of its nearly 900 employ-ees and contractors from the moun-tain town, but it creates a uniquechallenge. Though the area is rich inminerals, it gets very little rain. Dustraised from blasting and transporta-tion in the open pit truck-and-shoveloperation can linger and settle overthe town. Teck now uses dust sup-pressants on unpaved roads andvaries its blasting techniquesdepending on wind conditions.

The arid climate also imposes aspecific challenge for the new SAGmill that will up the amount of mate-rial processed from 12,000 to 55,000tons per day. The increased volumewill demand more water and put themine in competition for the scarceresource. Teck is still in the process ofworking out a sustainable wateragreement with the government andlocal stakeholders.

On a smaller scale, Rondestvedt,the only Canadian that Teck has work-ing at the mine, said he has alreadymade an impression. Since he began atthe end of December, he has been busyironing out some cultural and linguis-tic wrinkles at work.

The language of the workplace isSpanish. A six-week blitz of full-timeSpanish lessons in Santiago last fallhad Rondestvedt swooning, but he


Scholastic underachievers andhuman resource people alike takenote of Craig Rondestvedt. Not longago, he was comfortably employed atTeck Cominco’s Highland ValleyCopper mine outside of Kamloops,British Columbia. He knew his stuff.He had worked his way up to superin-tendent with the knowledge and skillshe had acquired over his 31-yearcareer on the site.

Rondestvedt figured he’d carvedout his niche at the mine and gone asfar as could be expected. “I was oneof the few people that made it to thesuperintendent level who didn’t havean engineering degree,” he explained.“Frank Amon, operations manager,believed that you should take at least

one course per year. Idecided I’d take one inToronto — I thought he

would say no, due to cost, and hewouldn’t ask me anymore.”Rondestvedt didn’t have any illusionsabout the future. “I was 46 years oldand felt that my chances of movinghigher than a superintendent wereslim to nil. For a person with my edu-cation (GED 12) at that time, becom-ing a superintendent of mill operations

by Ryan Bergen

Work continues on the mill that Rondestvedt hopes will be the first of many he sees completed in the Americas.

canadians abroad

said with his new language and broadexperience, he’s now able to “muddlethrough” day-to-day operations. Headmitted he does rely on the forbear-ance of his colleagues the odd timewhen he tramples over the subtletiesof Spanish — unlike Rondestvedt, aChilean probably wouldn’t be for-given for calling a co-worker’s girl-friend (novia) a man (novio).

Only three months in,Rondestvedt boasted he has won thebattle for punctuality in a culture wellknown for its indifference to it. “Itdrives me insane that they don’t thinkabout being late,” he laughed. “Oneday somebody came to a meeting 15minutes late, so I just sat there, notspeaking until someone asked mewhat was going on. I told them ‘if youwaste 15 minutes of my time, I’llwaste 15 minutes of yours.’ Theycome on time now.”

Despite the initial differences,Rondestvedt said he has a high regard

for his workmates and he, in turn, hasa standing invitation to join them atthe local place of worship — the foot-ball stadium.

He and his wife Louise keep intouch with their two grown childrenand family over the Internet and areeager tour guides for visiting family,particularly those interested in sam-pling the offerings of the various Pisco

distilleries — the local alcohol madefrom grapes.

For the moment, he is contentwalking the beach, playing golf withhis wife and exploring the areaaround his new home. Louise, aretired bookkeeper, said she has rein-vented herself as a Spanish student,an English teacher and an extermina-tor. “The ants! The ants!” shedeclared, are the biggest domesticchallenge, constantly blazing trails upand down and across the apartment.The other is the shopping — theirfurniture was chosen in La Serena,but had to be shipped in fromSantiago, 400 kilometres to the south.

The little nuisances are part of theadventure that Rondestvedt said hewants to pursue for a long time. “Iwould like to do this even when Iretire,” he said of his work getting thenew SAG mill going. “They could justgive me a call and I’d be there in aheartbeat to do it.” CIM

May 2009 | 51

Craig in his office in Carmen de Andacollo

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MAC economic commentary


Amidst the doom and gloom of present economic times,it can be difficult to find signs of optimism that could gen-erate light at the end of the proverbial tunnel. While eco-nomic predictions can be easily contradicted, it seems evi-dent that there are some positives emerging from the pres-ent recession and that, more importantly, mineral pricesare destined to rebound in the not-too-distant future.

Sanity is returning to input costs and waiting listsThe business environment that existed until mid-2008

was one of frenzy, cost explosion and waiting lists.Companies seeking to buy mining equipment were

assigned lengthy delivery times. Basics suchas large tires for mining trucks carried a one-year or longer delivery lead time. As noted

in 2005 by the president of a Virginia machinery company,“there are eight people trying to get the same tire.”

Capital projects that began with cost budgets in thehundreds of millions ended with budgets in the billions.Companies reported that capital investment cost projec-

tions were doubling or more during the 2005 to 2007 time-frame. The need for $16 per hour fast food workers in oilsands country was going unmet. Marine shipping costs andtimelines were expanding rapidly.

These realities were the by-product of both a U.S. eco-nomic model that was amassing business debts, personalmortgages, governmentdeficits and shadyfinancial business prac-tices at record levels,and the correspondinggrowth of Asian manu-facturers supplying tothis model. One benefitof the collapse of thismodel is that businesscosts and timelines aremoving towards moresustainable levels. Inmarine shipping, forexample, the BalticExchange Index showsthat U.S. to China freight rates of $94 per tonne in early2008 fell to $26 by the end of the year. BHP Billiton notedthat the build-up of iron ore stockpiles in China thatprompted suppliers to defer shipments last year is ending— causing ore shipments to rise. In one highly importantCanadian business sector, the oil sands, the effect of thepresent slowdown is that Peter Lougheed’s vision may ulti-mately be realized — that an orderly, sustainable and man-ageable growth takes the place of the recent frenzy.

Developing countries are focusing on their own consumption

In the case of China, several million people are movingfrom rural to urban regions each year. To prevent potentialsocial unrest associated with growing unemployment in itsexport-oriented manufacturing sector, the country is turn-ing attention to its own internally generated growth. Thepotential is enormous. Consumers in the United Statesown 765 motor vehicles per 1,000 people, while Chineseconsumers own 10. There are 20 times more personal com-puters per capita in Canada than in China. Chinese bankshave healthy balance sheets, and the corporate and con-sumer sectors have low debt loads.

The $586 billion economic stimulus plan announced bythe Chinese government in November reinforces the notionof the country playing a significant catalytic role on a globalscale through investing in roads, housing, railways, air-ports, power projects and other domestic areas. A similartransition will be seen in other developing countries.

Is there light at the end of this tunnel?

by Paul Stothart

Most companies are in a mode ofbattening downthe hatches and

returning attentionto their properties

and assets

MAC economic commentary

The reality emerging from the present global slowdown isthat there remains a significant need for metals and mineralsin China and other countries that will feed internal demandfor infrastructure and consumer/industrial products.

Foreign governments are building more realisticinvestment environments

A by-product of the mineral price boom of the2003–2008 years was that a number of national govern-ments sought to dramatically increase their share ofresource revenues. Ecuador cancelled concessions, sus-pended mining and imposed a windfall profit tax.Mongolia introduced windfall profit taxes on copper andgold. The Democratic Republic of Congo examined dozensof mining contracts in the aim of increasing the govern-ment share. Argentina imposed a tax increase on exports.Venezuela welcomed the nationalist Chavez revolution.Bolivia spoke of a desire for “nationalization withoutexpropriation.” The governments of Uzbekistan and Russiapresented numerous tax and equity control challenges toforeign investors, while the Kyrgyz government proposednew taxes and possible state consolidation.

In the present downturn, with fewer companies spend-ing fewer global investment dollars, overly aggressivegovernments will find themselves with significantlyreduced exploration and capital expenditures takingplace in their countries. Those countries that wish toattract business investment in mineral development arechoosing to move along a different path — namely, creat-ing attractive investment regimes and enhancing thebreadth and accuracy of their geological mapping data-bases. Smart governments are also trying to reduce per-mitting delays and improve regulatory efficiencies —actions that should ultimately improve the industry’sability to respond to future demand growth.

Companies are returning to their knittingThe frenzy of recent years was reflected as well in the

mergers and acquisitions activity that surrounded the min-ing industry. In Canada, Xstrata bought Falconbridge for$20 billion, CVRD bought Inco for a similar amount, andRio Tinto bought Alcan for $38 billion. A possible globalalignment between Rio Tinto and BHP Billiton was in dis-cussion, valued at well over $100 billion. Worldwide, in2006 there were 1,145 M&A deals in mining, valued atsome $176 billion. Boards of directors of many leadingcompanies were seeking aggressive acquisitions plans fromsenior management.

The slowdown of the past six months is causing compa-nies to return to their knitting. While M&A activity willundoubtedly continue (there are felt to be many bargaintargets for cash-rich companies, with gold companies par-ticularly well positioned), most companies are in a mode ofbattening down the hatches and returning attention totheir properties and assets. Increasing mine yield, improv-

ing smelting and other process efficiencies, prioritizingproperties for future development as mineral pricesincrease — these are the types of activities that are increas-ing in importance for senior management. The recession isforcing companies to focus on getting their costs undercontrol. Geology and process engineering expertise isbecoming more important — M&A expertise less so.

The combination of these four factors will put theglobal mining industry in a much stronger position to ben-efit from the inevitable upswing that will become evidentduring the coming 12 to 18 months. CIM

May 2009 | 53

About the authorPaul Stothart is vice president,economic affairs of the MiningAssociation of Canada. He isresponsible for advancing theindustry’s interests regardingfederal tax, trade, investment,transport and energy issues.

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jurisdiction of choice to raise financ-ing because of investor confidence inits capital markets, largely due toCanada’s securities regulatory frame-work, which favours relevant, trans-parent disclosure. The driver for thiswas the implementation of NationalInstrument 43-101 in 2001, whichgoverns disclosure standards for min-eral projects. The Instrument hasraised the bar on mining technical dis-closure requirements globally, boost-ing investor confidence in Canadiancapital markets.

To maintain Canada’s edge, theCanadian Securities Administratorslaunched an initiative to review theInstrument, inviting minerals indus-try comments on possible changes toit so as to keep technical disclosurerequirements relevant and effectivewith regard to mineral industrydevelopment.

Professional services and miningtechnology companies also form akey part of the Canadian mining cen-tre of excellence. Canada has a signif-icant concentration of the corporateand technical intellectual talentrequired by mining. Canadian-basedcompanies have captured significantworld market shares for geophysicalequipment and software and are keyproviders of drilling and other criti-cal services.1 Much of this is createdor refined at Canadian universities,providing the industry the furtheradvantage of highly skilled people.

C a n a d i a n -based miningcompanies carryout more interna-tional mineralexploration, andmore miningfinance is raisedin here than any-where else in theworld. Canadian-based companies

carry out over 40 per cent of globalexploration, with over 8,000 projectsin various states of development inover 100 countries.2 Canadian gov-ernment mining policy sets globalstandards. The Fraser InstituteAnnual Survey of Mining Companiesfor 2008-2009 ranked seven Canadianjurisdictions in the world’s top ten forattractiveness of mining policy, withQuebec ranking number one in theworld.3 This has helped make Canadathe world’s largest recipient of mininginvestment, with a 20 per cent shareof the total.

Canada is a one-stop miningshop: it has the human resources,the technology and the capital tofund exploration leading to the dis-covery and development of eco-nomic ore bodies. While Canadianand non-Canadian miners are cur-rently being hit hard by the eco-nomic crisis, the global miningindustry will survive. We can be con-fident that, with its centre of miningexcellence, Canada will continue toplay a major role within it. CIM

eye on business

The ongoing global economic cri-sis has hit the mining industry hard.Most commodity prices are down sig-nificantly from historic peaks andmany mining companies are scram-bling for financing or seeking merg-ers to stay alive. Canadian companieshave not been spared, with numerousbankruptcy and CCAA filings high-lighting cash flow and financingproblems.

The Canadian mining industry hasbeen through many booms and bustsin the past, always emerging strongand resilient. While it is premature todeclare an imminent end to the crisis,conditions will improve eventually.When they do, any mining industryupswing is certain to have a largeCanadian stamp on it.

Canada remains among the world’sforemost mining nations. TheCanadian mining industry — with itsconcentration of knowledge, services,capital, effective policy and researchand development centres — formswhat Michael Porter, in his ground-breaking study in The CompetitiveAdvantage of Nations, would call a“cluster” or a “centre of excellence.”

While global mining financingshave all but dried up since the eco-nomic crisis escalated in the fall of2008, in Canada, gold financingshave recently begun to sprout andmultiply. In January and February2009, over $2 billion was raised

through financings inCanada, primarily,but not exclusively,by gold companies.For example, KinrossGold recently com-

pleted a US$415 million public equityoffering, Rubicon Minerals raisedC$40 million through a bought deal,and IAMGOLD announced a C$300million financing in March.

Clearly, investor appetite for goldhas been a key reason. Canada is a

Canada: a global mining centre of excellenceWhy Canadian mining retains its leadership position despite the global economic crisis

\1 Canada in the World of Mineral Exploration: A GrowingIndustry with a Rock Solid Foundation, Department ofForeign Affairs and International Trade, Trade CommissionerService (March, 2003).

2 Facts & Figures 2008, a Report on the State of theCanadian Mining Industry, the Mining Association ofCanada.

3 Seven Canadian Provinces remain in the top 10: Ontario(10), Saskatchewan (9), Manitoba (8), New Brunswick (6),Nfld. Labrador (5), Alberta (4), and Québec ranked (1) in thetop spot overall.


Robert L. Shirriff

by Robert L. Shirriff,assisted byAndrew E. Derksen

About the author

Robert L. Shirriff has been a memberof Fasken’s Global Mining Group sinceits inception. His love of the practicecomes from his love of mining people,whom he believes are some of the mostinteresting and creative problem-solversin the world.

Andrew E. Derksen is an associate atFasken Martineau DuMoulin LLP.

innovation

This year’s DistinguishedLecturer Program proved to be a realopportunity to meet some of themany mining people across our finecountry. At every stop, there wasalways something new and interest-ing — yet another improvementwhere people have leveraged a newtechnology or best practice, orwhere they have invented that nextstep for mining effectiveness thatbecomes a benchmark for the rest ofindustry to strive for. In otherwords, innovation is happening allacross Canada, and that’s a goodthing for mining as a whole.

A question arises as to whether weare living up to our national potentialto become a global mining leader.Consider that we attract more globalmining exploration spending thanany other country in the world, andthat we rank in the top five countriesglobally, in terms of supply, of 14important metals and minerals. Weare well positioned to take a globalmining leadership role, with innova-tion as a key to staying globally com-petitive. Yet there is a sense that oureffectiveness and support for miningresearch and technology developmentcould be better. That is where a groupof mining leaders from industry, aca-demia and government stepped in tofind out why.

Under the banner of the CanadaMining InnovationCouncil, 17 of these min-ing leaders formed a

transition board that went acrossCanada to enlist the help of some 150other mining leaders in defining theopportunities for achieving globalinnovation leadership in mining. Inseven workshops across the country,the following issue areas were identi-fied:• having highly qualified people

Making mining innovation happenThe Canadian Mining Innovation Council is committed to facilitating the generationand dissemination of knowledge for and about the industry

• realizing a strong culture of collab-oration among firms, academiaand government

• a limited ability to network onresearch and technology work

• a lack of widely supported targetedfocus areas for research

• low brand recognition for miningas an important industry in thecountryWith the above opportunity areas

identified, five subgroups wereformed to focus on each. Good workis proceeding in each subgroup toadvance actions that will addressthese areas, and we shall hear moreabout this in subsequent articles.

Now, we shift gears and directlyexamine the brand recognition of min-ing as an industry player in our coun-try. As part of the Distinguished

Lecturer series on innovation, atten-dees were asked to pretend that theywere living in a large population centrein Canada, and that their views onmining would be formed from com-monly utilized information sourcessuch as the media and theweb/Internet. Participants were thenasked to give a pass, fail or neutralresponse to the following statements:• Mining is important to society

(important economic contributionand a supplier of resources).

• Mining responds responsibly tosociety (environmental perform-ance supported).

• Mining is a high-technology busi-ness (a leader in research anddevelopment).

• Mining is excellent in risk man-agement (achieving safe work).

May 2009 | 55

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innovation

Participants, acting out their roles,responded at seven different sessionsto rate the above four statementswith a failing grade, and occasionallya neutral grade at best. This needs tochange. Those of us in the miningand mineral processing industry allknow the above statements to betrue, and the word needs to get out.

Mining is in fact an economicengine for Canada, supplying 4.8 percent of our GDP, 55 per cent of railtonnage, 70 per cent of port volumesand 19 per cent of exports. Further,we acknowledge that mining suppliesthe materials and means for every-thing from vehicles, computers andelectricity to the latest equipment forgreen technologies like solar cells,hybrid cars and wind farms.

Mining has responsibly integratednew technologies to significantlyreduce the release of materials into theenvironment. From 1993 to 2006,reductions were achieved in materialssuch as mercury (91 per cent), lead(84 per cent), zinc (76 per cent),

hydrogen sulphide (70 per cent), cop-per (58 per cent) and cadmium (51per cent). Greenhouse gas intensityindex reductions over a 15-year periodfor the metal smelting and refiningsector were an impressive 36 per cent.

On the technology front, we spent$538 million in research and develop-ment, employing some 4,600 people.This expenditure is six times that ofagriculture, forestry and fishing com-bined. If you have ever seen first-handthe technologies that go into a 400-tontruck or supporting shovel, deep min-ing, mine plans or tailings manage-ment, it would become clear that min-ing employs the latest and best tech-nologies available.

Finally, on the safety front, it isinstructional to note that many min-ing firms are achieving extended runswith no lost time injuries and operat-ing at injury frequencies far below theprovincial averages that report aggre-gate industry performance. The CIMJ.T. Ryan awards are a testament tothis achievement.

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The real story of the importance ofmining and its related performanceachievement needs to be communi-cated widely. In this regard, the MiningAssociation of Canada, which com-piled many of the statistics quotedherein, has done wonderful work topromote mining in Canada. Now it’sup to us. We need a better scorecardresult in the above dimensions of pub-lic perception if we are going to attractthe support from society and govern-ment on a national scale to spur oninnovation in mining through well-coordinated targeted research andtechnology development. Every one ofus can be an ambassador for mining inour society by presenting the factstowards providing a more balancedand representative perspective on min-ing in Canada.

The Canada Mining InnovationCouncil has set as its vision that“Canada is a Global Leader in theMining Industry Through LeadingEdge Research and Innovation.” It is apicture of the future we can readilysubscribe to, and it can be achievedthrough the unified commitment andsupport of industry, society and gov-ernment. It’s a vision that we can allhelp support to keep innovation hap-pening in mining. CIM


About the author

Gord Winkel is chair of the Surface MiningAssociation for Research and Technology(SMART). He is a strong supporter ofworkplace safety and the advancement ofmining technology as a means to improveboth mining industry effectiveness and thequality of life for mining people.

student life

As a class that entered the miningdepartment at the University ofBritish Columbia at the peak of acommodity boom, we were sold onthe benefits of becoming a miningengineer. Students tuned in with sat-isfaction as professors and industryleaders promoted financially reward-ing careers, boundless travel opportu-nities and immense voids in the cor-porate sector waiting to be filled. Welistened to graduating students pres-ent the lineup of offers they had to

choose from whiledesiring that ourown futures follow a

similar trail. Having witnessed therecent meltdown in the miningworld, this trail has led students to anunforeseeable end, if any. Captivatedby the glamour and glory of thissparkling industry, we may have over-looked the true meaning of being amining engineering student.

Upon entering university, manyof us knew very little (if anything)

about mining engineering. Ourknowledge of this field hasincreased manyfold since joiningthis department, yet there is muchto be understood about the industry.We often speak of linking to theindustry, but in order to effectivelyestablish this connection, we mustunderstand the fabric on which thisindustry is built.

In his “Introduction to MineEngineering” class, ProfessorMalcolm Scoble challenges second-year students to explore this fabricmade of the relations between major,intermediate and junior miningplayers, through assignments andpresentations. Combining practicalassignments with memorable field-trips, such as our annual trek toHighland Valley Copper, has been asure way to spark our interest in theindustry we will soon enter. At UBC,these activities are paired with regu-lar student participation in industryevents to give us a better under-

standing of the importance of min-ing in our society.

One industry group that particu-larly encourages active studentinvolvement is CIM. In Vancouver,the local CIM branch creates oppor-tunities for us to associate withexperienced professionals and gaininsight into the future of mining.From organizing industry-sponsoredstudent nights to engaging us in vol-unteer roles within the organization,CIM helps bridge the gap betweenstudents and industry.

At the first annual UBC-CIMpanel held in March to discuss thebenefits of CIM, Tom Broddy ofTaseko Mines presented a key mes-sage that the mining industry is acommunity and, like most commu-nities, it is run by volunteers. Hementioned that new mining engi-neers must contribute more thanmath, science, analysis and goodjudgment to their regions of practicein order to be successful. Anotherspeaker on the panel, Patricia Dillonof Teck, stated that we need tobecome students of the industry inorder to understand our place in thistight-knit community. Indeed, theindustry plays a large part in defin-ing the role of a mining engineer, butis there a place for students in thiscommune?

We are often told of the skilledlabour shortages facing the miningindustry around the world. InCanada, the retirement of baby-boomers is increasing the demandfor new faces to fill familiar posi-tions. In order to walk in the shoesof these highly experienced industryleaders, it is crucial for today’s stu-dents and graduates to get trials andtest runs through summer jobs andEIT placements. Otherwise, the largegaps in practical “know- how” thatretiring professionals leave behind


A student of the industryA future mining engineer realizes that industry involvementis an essential component of his education

by Mohsen Chowdhury

UBC mining engineering students view equipment demonstrations at Highland Valley Copper.

student life

may never be closed, and the prom-ise of pulling young individuals intosenior level roles may end in a lead-ership meltdown. Truly, it is a triplecombination of education, experi-ence and involvement that will helpdefine the trail of a mining engineerfrom student to industry and ulti-mately to society.

So what is the true essence of beinga mining engineering student?

Simply put, it is to learn. Ratherthan filling cover letterswith company facts, wemust demonstrate ourcore purpose: to studyhow we, as contribut-ing members of aworldwide community,can recover the build-ing blocks of technol-ogy and infrastructure.Responsibly doing sofrom summer jobs toupper management, we

can help sustain economic growth andpromote social prosperity across theboard. No longer holding claims to theglory and glamour of our history, wemust hold ourselves accountable forpositively transforming the way wepractice and the way society perceivesour profession.

The industry is in need of studentswho value the meaning of mining and,as students of the industry, we arepreparing to deliver. CIM

May 2009 | 59

About the authorMohsen Chowdhury is asecond-year mining engineeringstudent at UBC. He is an activemember of the NB KeevilInstitute of Mining Engineering,CIM and Engineers WithoutBorders. Working with small-scale gold miners in Ecuadorthis summer, he hopes to gainan international outlook on theindustry.

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HR outlook

May 2009 | 61

The Canadian mining industry is facing significant chal-lenges. As we sit tight to weather the storm, it’s worth con-sidering if this cloud actually has a silver lining, albeit onethat’s hard to see. The industry hasfaced challenges in the past, for exam-ple the recessions of the 1990s and theearly 2000s, and managed to resurfacewith renewed vigour. According to theCentre for the Study of LivingStandards, the significant restructuringthat took place, through the increaseduse of technology, resulted in increasedproductivity and a highercapital/labour ratio. During the 1989 to2000 period, the gold mining sectorincreased its labour productivity by anaverage annual rate of 5.7 per cent andthe coal mining sector, on average, by7.4 per cent.

A second outcome of the restructur-ing and higher capital/labour ratio was asignificant increase in the demand forhighly skilled people capable of usingand manipulating the new technologiesand processes. According to a StatisticsCanada report entitled The ChangingProfile of Canada’s Workforce, high-skilled jobs led the growth in employ-ment in the 1990s.

The mining industry will likelyundergo a similar restructuring processas a result of the current recession.This may result in a greater need for ahighly skilled and mobile workforceand for clusters of innovation.Innovation clusters focus on develop-

ing and researchingthe means to facilitatethe implementation of

technologies in these restructuredworkplaces. An example of an innova-tion cluster is the Ontario MineralIndustry Cluster Council, which gath-ers its strength from strong educationand training networks, dynamicresearch and development supports,engaged and collaborative industryplayers, and its infrastructure ofknowledge. If there are to be increased

linkages between research centres and exploration sitesand/or producing mines, then the mobility of highlyskilled workers will require continued attention. The

Labour mobilityand innovation clusters

by Jean Pierre Chabot

Join us at the CIM Conference

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The Power of Collaboration

HR outlook

importance of labour mobility can be evidenced by theextent of fly-in/fly-out work arrangements used by themining industry in Canada.

The exploitation of market efficiencies requires the freeflow of business investment and access to the factors ofproduction: resources, capital and labour. The sustainabil-ity of the Canadian mining industry has a significantimpact on the global mobility of these factors. The TSXand TSX-Venture exchanges are arguably the most mining-friendly exchanges of open market economies. Accordingto the Canadian Association of Mining Equipment andServices for Export, Canadian mining equipment and serv-ice companies are major global exporters and providehighly specialized services and technology to both thedomestic and international markets. In Canada, there isusually a high degree of access to the second factor of pro-duction — capital. As a result, ensuring the free flow oflabour will continue to be a significant challenge for indus-try, especially over the long run.

According to the Fraser Institute’s Survey of MiningCompanies 2008/2009, seven of the top ten mining juris-dictions around the world are in Canada. Although thesurvey considers the policy attractiveness of mining juris-dictions in terms of their ability to attract and generate

free flows of business investment, it does not address theissue of labour mobility. By August 2009, recent govern-ment efforts to develop a Labour Mobility Agreement willhave borne fruit, and provinces and territories will begiven until June 2010 to enact legislation that increasesthe mobility of workers in designated occupations. Inturn, MiHR is facilitating efforts at increasing labourmobility for non-designated occupations through thework of the Canadian Mining Credentials Program. In aglobal and interconnected market economy, barriers to themobility of human resources impede the development ofclusters of innovation, which are necessary to sustainCanada’s leadership role in mining.

Furthermore, according to Human Resources andSkills Development Canada, international mobility willcontinue to play an important role in ensuring Canada’seconomic competitiveness. As a major player in theglobal mining industry, Canada will need to attract andfacilitate the free flow of highly skilled workers across itsinternational and domestic borders to preserve this posi-tion. The current downturn is a time for industry toinvest in human resources, research and innovation sothat the technologies, processes and skills are available tothe industry when the investment climate improves. CIM


About the author Jean PierreChabot is manager of research andpolicy analysis at MiHR, responsible forthe analysis of HR policy options andconstraints that impact the miningindustry in Canada. Formerly the projectcoordinator for a number of LatinAmerican projects, he brings aninternational perspective to issuesfacing the Canadian mining industry.

AchievementsDavid Garofalo, senior vice president, finance and

CFO of Agnico-Eagle Mines Ltd., has been namedCanada’s CFO of the Year™ for 2009. The award is pre-sented annually by Financial Executives InternationalCanada, Pricewaterhouse Coopers LLP and TheCaldwell Partners International to an outstandingfinancial professional who is passionate about thefuture of Canadian business. The criteria by whichnominees were judged are: Vision and Leadership,Corporate Reporting and Performance, SocialResponsibility, Innovation and Business Complexity.

parlons-en

La Table jamésienne de concertationminière (TJCM) est l’interlocuteurprivilégié pour la Conférence régionaldes élus de la Baie-James en ce qui con-cerne toutes les questions d’ordreminier sur le territoire jamésien. Lamission de cet organisme est desoutenir le développement de l’indus-trie minière sur le territoire de la Baie-James dans une optique de développe-ment durable tout en assurant la max-imisation des retombées socioé-conomiques sur les populations quil’habitent. Les représentants qui siè-gent sur la TJCM proviennent des com-pagnies, des organismes et des min-istères concernés par le développementde l’industrie minière sur ce territoire.Les partenaires qui nous supportentfinancièrement sont la Conférencerégionale des élus de la Baie-James,Emploi-Québec, le ministère duDéveloppement économique, del’Innovation et de l’Exportation, laSociété de développement de la Baie-James, le ministère des Ressourcesnaturelles et de la Faune etDéveloppement économique Canada.Les principaux champs d’action de la

TJCM à l’heure actuelle sont :• Le développement d’une culture de

veille stratégique en ce qui concernel’évaluation des besoins de main-

d’œuvre durable desprojets de développe-ment minier jugés signi-

ficatifs et des exploitations minièresactuelles.

• Le projet d’extension de la route 167sur une distance de 250 kilomètrespour atteindre le secteur des montsOtish et ses nombreux projets d’ex-ploration minière.

• Les enjeux environnementaux relat-ifs à l’exploitation de l’uranium dansla région Nord-du-Québec.

• Les nombreux comités dedéveloppement actifs sur le territoiredont le comité ACCORD de l’indus-

trie minière du Nord-du-Québec etla Commission régionale desressources naturelles et du territoiredu Nord-du-Québec. L’une des principales réalisations de

la TJCM au cours des dernières annéesest la mise en place du premier Centred’étude appliquée du Quaternaire(CÉAQ) au Québec. La création duCÉAQ, en décembre 2007, découled’une concertation de l’industrieminière, qui manifestait, dans le passé,le besoin criant de développementd’une expertise dans le domaine del’exploration du Quaternaire.L’élaboration de la démarche ACCORDNord-du-Québec a également été unemotivation supplémentaire pour ledéveloppement d’un créneau d’excel-lence dans ce domaine.

Le CÉAQ est un organisme derecherche appliquée sans but lucratifqui s’intègre actuellement à la struc-ture de la TJCM. Les principales mis-sions du CÉAQ sont le développementdes connaissances des dépôts quater-naires sur le territoire de la Baie-James(spécialement leur stratigraphie etleurs patrons de dispersion) et la miseau point d’approches novatrices dansl’échantillonnage et le traitement deces dépôts pour l’exploration minière.

Afin de réaliser ses objectifs, leCÉAQ s’est doté d’une structure quise divise en quatre secteurs d’activi-tés : acquisition de données géoscien-tifiques, recherche et développementde connaissances, formation et labo-ratoire (incluant traitement desdépôts meubles et préparationd’échantillons de roche).

Depuis 2004, la région Nord-du-Québec, principal lieu d’intervention duCÉAQ, est au premier rang quant auxinvestissements miniers totaux effectuésau Québec selon le MRNF. Les projetsd’acquisition de connaissances que nousréalisons à chaque année depuis 2002,en collaboration avec différents parte-

naires financiers dont la Société dedéveloppement de la Baie-James (SDBJ),le ministère des Ressources naturelle etde la Faune (MNRF), le Conseil Cri surl’exploration minérale (CCEM), leConseil régional des élus de la Baie-James (CRÉBJ), le ministère duDéveloppement économique, del’Innovation et de l’Exportation(MDEIE) nous ont permis de dévelop-per une expertise qui nous positionnestratégiquement considérant l’activitéd’exploration minière grandissante dansla région Nord-du-Québec.

Le CÉAQ travaille en collaborationavec des organismes de recherche et deslaboratoires collégiaux, universitaires etprivés afin d’accroître la synergie derecherche dans ce secteur au Québec etau Canada. Le travail du CÉAQ estguidé par l’innovation technologique etpar le respect des normes de qualitéstandard de haut niveau. ICM

May 2009 | 63

Un moteur du développement régionaldu Nord-du-Québec

par Isabelle Milordet Régis Simard Les auteurs Isabelle Milord est

directrice du CÉAQ. Bachelière engéologie de l’Université de Montréal(1995) et en voie d’obtenir un doctoraten ressources minérales de l’Universitédu Québec à Chicoutimi. Au cours de soncheminement académique, elle a étélauréate de plusieurs bourses et mérites.

Régis Simard est directeur général de laTJCM depuis 2001. Il compte plus de 23années d’expérience professionnellediversifiée en exploration et en exploitationminière ainsi qu’en développementrégional.


Through modern eyes, theirblack and white images areunsettling. Disguised by the

coal dust on their faces and cut oftheir clothes, their proportionsbetray their youth. Their heads aretoo large for their bodies; theircheeks are too round. Today,Canadian children of the same age

are expected to carrytheir backpacks toschool and return

weighted down by the inhumaneburden of homework — the idea thatthey should be working or mighteven be eager to take on 40 hours ormore of work each week seemsabsurd. Of course, “the past is a for-eign country, they do things differ-ently there.”

“To keep young persons from worktill they are 12 years of age will, I fear,

create the objection to labour whichthrough their life they will be unableto overcome,” argued a British mininginspector in 1870. From the heightand centre of the empire, this senti-ment travelled with the Welsh, Englishand Scottish coal miners who broughttheir skills and traditions to the coal-fields in Canada.

The number of boys working in themines in the late 19th centurydepended on the region. In the col-lieries of Vancouver Island, most ofthe menial labour fell to Chinese orJapanese men, who were on averagepaid less than boys. In 1895, at theNanaimo Colliery, boys could makeup to two dollars per day; Chinesemen were limited to $1.25. The minesof Nova Scotia, with more establishedAnglo communities around them,employed many more boys. At the

by Ryan Bergen

Sydney mines in Cape Breton, a fullquarter of the mine workers in the1880s were under 18.

What compelled them to gounderground varied, noted RobertMcIntosh in his authoritative Boys inthe Pits: Child Labour in Coal Mines.Some parents may have exploitedtheir children; others needed theincome to sustain the household.Often accidents injured or killedfathers, which forced sons to helpmake ends meet. However, therewere perks to becoming a wage-earner. “It represented a change intheir status at home,” explained onehistorian in McIntosh’s book. “Nowtheir sisters waited on them and theywere treated like men.”

The youngest, sometimes only asold as ten, were often initiated as‘door-boys’ or trappers. They wouldsit by the doors that controlled theventilation of the mining shafts andlisten for the approach of horses haul-ing coal tubs, pulling open the doorsand then shutting them once the loadwas clear. Sitting in the dark for hoursat a time, the primary challenge wasstaying awake. Those who did fallasleep where shaken awake by theimpatient curses of the older boyswaiting at the door.

Once strong enough, the boyswould become drivers who guided thehorses through the mine shafts. Thejob entailed more responsibility andconsiderably more risk. They had toprotect the horses from being run overby tubs full of hundreds of kilogramsof coal, and they had to protect them-selves from the heavy equipment andthe sometimes unpredictable animals.Accidents were common.

Boys in the pitsThe role of children in the history of the Canadian coal industry

Boys of the coal mines, Pictou County, ca. 1900

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The career ladder led to the coalface. Young helpers cleaned the coal,fetched tools, minded the lamps, keptblasting powder cans full and madesure the coal tubs were rolling in andout. Once their apprenticeship wascomplete, they graduated to miningthemselves. In mining communities,the largely abstract advantages of for-mal education had limited relevance tofamilies, who for generations had sus-tained themselves with the lessonspassed on in the dark mines.

Above ground, the industrial agethey were fueling would eventuallymake this tradition obsolete. In urbancentres like Halifax and Montreal,social reformers pushing for compul-sory education had been gainingmomentum in the 19th century. Themiddle class was growing in size andinfluence and their quality of life wasunderwritten by literacy and numer-acy — skills understood to have uni-versal value. By these new standards,the manners and language learned inthe mines were coarse and unfit forchildren. The culture of childhoodwas being redefined — the play-ground was invented; compulsoryschool attendance and laws limitingchild labour were on the books, evenif they were not being enforced. Then,as now, parents resented being told bythe state how they should raise theirchildren.

Work in the mines, however,changed as well. In the 1880s and’90s mechanization and a shift fromthe bord-and-pillar technique tolongwall mining replaced the hands-on skills of individual miners.Engineers and managers, beneficiar-ies of formal education, nowdirected production. Over the nextfew decades, with the exception ofthe First World War, steady employ-ment was reserved for men, andboys, just as women had been a cen-tury before, were cut from the eligi-ble workforce.

boys as anything but children and vic-tims — a characterization they wouldlikely bristle at and might respondwith a string of curses, the colour ris-ing in their cheeks. CIM

Social attitudes kept pace; newexpectations of childhood and theconcept of ‘adolescence’ took root. It isdifficult now to see the grimy, chubbyblack and white faces and consider the

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May 2009 | 67

featured mine

One market truism, from which the mining industry iscertainly not exempt, is that reputations generally have to beearned. So, while rising gold prices quickly boost the marketcaps of larger, diversified players, smaller ones often have towork harder to get noticed. One such company is AlexisMinerals Corp, whose Lac Herbin mine, located in Quebec’sVal-d’Or region, went into full production late last year.Led by CEO and long-time industry veteran David Rigg,Alexis Minerals’ strategy is to use the cash flows generatedfrom its Lac Herbin mine and its Lac Pelletier reserves, slatedto go into production this year, to fund a full-scale research,development and operations player. “These are substantialore bodies,” said Rigg. “We call mines with the resourcepotential of Lac Herbin “company makers” because they have

the potential to be the backbone of long-term integratedmining businesses.”

Rigg isn’t kidding. Gold is being discovered at the Lac Herbinoperation faster than it is being extracted. As of the end of lastyear, measured resources at the Lac Herbin mine stood at124,800 tonnes, grading 9.2 g Au/t for 37,100 ounces of gold— an impressive 180 per cent increase as compared toDecember 2007. Furthermore, the grading of those measuredresources represented a sharp increase from the previous meas-urement (6.8 g Au/t).Total measured and indicated resources atthe mine by year end 2008 were 856,300 metric tonnes, at anaverage yield of 7.5 g Au/t. That works out to 206,600 con-tained ounces of gold, or five years’ supply at the company’sprojected production rate of 40,000 ounces per year.

An arial view of the Lac Herbin operation

Golden OpportunitiesAlexis Minerals has big hopes for its Lac Herbin gold mine, which wentinto full production late last year. Building a good reputation so as toattract the right people with the right skill sets is an integral componentof realizing its aspirations.

by | Peter DiekmeyerAl

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featured mine

Val-d’Or: a long-timeactive mining district

Quebec’s Val-d’Or region (the rough translation is “valleyof gold”), where Lac Herbin is located, hosts an abundance ofhighly attractive mineral resource deposits. The area has beenan active mining district since the early 1930s, when theLamaque mine first began production. Since then, with thehelp of the Quebec government, the region has attracted asteady flow of investors seeking to leverage those resources.

According to the Fraser Institute, Quebec is the numberone location in the world in which to conduct mineral explo-ration, development, extraction and processing. The leadtime required to get permits and to round up the requiredauthorizations are respectable by international standards.Furthermore, although the generous tax credits that theprovincial government offers pure exploration companieshave decreased as Alexis has graduated to becoming a pro-ducing mining company, these were a significant factor inattracting Alexis Minerals to the province.

That said, according to Patrick Sévigny, mine manager atthe Lac Herbin operation, the Val-d’Or region offers develop-ers advantages that go far beyond the resources availablethere. “Because there are so many mines already in opera-tion around here, it’s a great place to do business,” observed

Sévigny, who grew up in Val-d’Or and considers himself for-tunate to able to pursue his career in his home town.

“There are a lot of suppliers here that support the indus-try,” said Sévigny, pointing to buildings bearing names suchas Komatsu, Hewitt Equipment and, with a chuckle, onemarked Molsons. “There are also between 30 and 35 rep-utable drilling and other mining contractors around town,which helps out a lot.”

Golden historyThe area around Lac Herbin has been known to contain

gold deposits for some time. Two other operations, Dumontand Ferdeber, had previously been mined on the AlexisMinerals properties, not far from the Lac Herbin site. But it wasonly in 2003 — the year that CEO Rigg joined — that thecompany first took a stake in them. Since then, Alexis hasamassed the largest land package in the area, totalling over1,000 square kilometres.

By the middle of 2007, a feasibility study of the LacHerbin project, conducted by Golder Associates, was com-pleted. The study, which focused on the measured and indi-cated mineral resource estimates compiled earlier byInnovExplo, concluded that the deposit was economic toproduce at then prevailing gold prices. A similar study,

1. Gold bars from Lac Herbin gold pour; 2. Workers view a large underground quartz vein; 3. When the mill comes into full operation, Alexis expects to decrease its overall milling and shipping costby between $10 and $15 per tonne by next year.

1. 2.

3.

conducted around the same time, concluded that anothernearby site, the Lac Pelletier gold deposit, to which AlexisMinerals also held the rights, was economical to operate andcould generate results roughly similar to Lac Herbin.

The right stuffAccording to Sévigny, one of the major attractions of the Val-

d’Or region is its labour force, which encompasses substantialmining industry skills sets. Furthermore, a good crop of potentialemployees is currently available, due to recent layoffs by manynon-gold base metals producers in the region. Additionally, newtalent is constantly coming down the pipeline.

“There are many families whose key breadwinners wereemployed in mining and related sectors, which offer fairly high-paying jobs for this region,” said Sévigny.“We also have a steadyflow of students from the local school board coming to work atthe mine on unpaid internships, to learn about how the industryoperates in the real world. This gives us an opportunity to iden-tify talent early and to pick out the best people available.”

Although one might rightfully consider mining to be firstand foremost a resources industry, Rigg offers a differentperspective. “These are extremely complex exploration anddevelopment mandates,” he explained. “It is crucial thatwhen a new company comes into an area, they attract the

right people with the right skill sets. So building a good rep-utation quickly is very important.”

According to Rigg, when a new mining operation beginsto set up shop in a town, the first hires are the most signif-icant, as they are the ones who will provide the feedback tothe rest of the community about what kind of operation thecompany is running. The commentary they bring back to thetown’s school association meetings, bars and bowling alleyswill determine in large part how easily the company will beable to fill its ranks. “If you pick one or two good leaders,then a lot of the others tend to follow,” said Rigg. “The keyfor us was hiring the right department heads. If you get goodpeople there, you can generally pick and choose from thecontacts that they have worked with over the years.”

New synergies Alexis Minerals officers are also quite excited about work

being done on the Lac Pelletier gold deposit, which islocated in nearby Rouyn-Noranda. Bringing this deposit intoproduction would substantially boost cash flow at the com-pany, as well as set the stage for synergies with Lac Herbinprojects, stemming in particular from combined milling ofoutput from the two bodies. The company expects resultsfrom a new and updated pre-feasibility study commissioned

May 2009 | 69

featured mine

1. The recently purchased Aurbel mill has a potential capacity of 1,400 tonnes per day; 2. Drilling two kilometers of rods; 3. Core stacks at Lac Herbin

1. 2.

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featured mine

last year to be positive, and projects the extrac-tion of between 35,000 to 40,000 ounces of goldper year from the deposit starting in 2010.

One of the biggest questions related to the LacHerbin site was how Alexis was going to conductits milling operations. As a short-term measure,company officials decided to contract out this keypart of the supply chain. The ore produced at LacHerbin is currently batched for a couple ofmonths, and then shipped out to the mill where itcan be batch processed all at once.

However, the milling contractor recently raisedits prices to the point that outsourcing was no longerthe ideal solution economically. Over the longerterm, as output from the Lac Pelletier operations begins tocome on stream, as well as potential for new discovery near theDumont and Ferdeber mines, a more permanent solution willbe needed. With this in mind, Alexis Minerals recently pur-chased the Aurbel gold mill, mothballed since the 1990s, whichis located just one kilometre east of the Lac Herbin mine andhas a replacement value of $36 million.

The Aurbel mill has an impressive potential capacity of1,400 tonnes per day, and getting it running again will requireonly a modest investment of both time (five months) and

money ($4.5 million). That said, when the mill comes into fulloperation, Alexis expects to decrease its overall milling andshipping costs by between $10 and $15 per tonne by next year.

Despite Lac Herbin’s status as a relative newcomer, Rigg isvery optimistic about the operation’s future. “It takes a whileto build market confidence,” he said. “Once we have a coupleof quarters of consistent production under our belts, andwhen Lac Pelletier comes on stream and the new millingoperation is fully upgraded and operating, the value inherentin our shares will become increasingly apparent.” CIM

Drill barge on Lac Herbin

May 2009 | 71

mine en vedette

UUne vérité commerciale qui va de soi, même pour l’indus-trie minière, est qu’il faut gagner sa réputation. Pendant queles prix de l’or croissants amplifient la capitalisation dumarché boursier des plus grandes compagnies, les plus petitesdoivent travailler plus fort pour se faire remarquer. Une tellecompagnie est la Corporation minière Alexis, dont la mine LacHerbin, située dans la région de Val-d’Or, est entrée en pleineproduction à la fin de l’an dernier.

Selon David Rigg, président et directeur général, lastratégie de la Corporation minière Alexis est de se servir desflux de trésorerie générés par la mine Lac Herbin et lesréserves de Lac Pelletier, laquelle mine devrait entrer en pro-duction cette année, pour financer une compagnie de premierplan en recherche, développement et exploitation. « Cesgisements sont substantiels, ils peuvent signifier la réussite dela compagnie », dit M. Rigg. Il ne badine pas, on découvre del’or à la mine Lac Herbin plus rapidement qu’on ne l’extrait. Àla fin de 2008, les ressources mesurées et indiquées étaient de856 300 tonnes métriques, à une teneur moyenne de 7,5 gAu/t. Cela signifie que le gisement contient 206 600 oncesd’or, soit une durée de vie de cinq ans au taux de productionplanifiée de 40 000 onces par année.

Val-d’Or : un district minier actifdepuis longtemps

La région de Val-d’Or est un district minier actif depuis lesannées 1930 alors que la mine Lamaque entrait en produc-tion. Depuis ce temps, et avec l’aide du gouvernement duQuébec, la région a constamment attiré des investisseurs.

Selon le Fraser Institute, le Québec est la meilleure placeau monde pour explorer, développer, extraire et traiter. Lesdélais pour obtenir les permis et les autorisations requisessont tout à fait dans les normes internationales. De plus,même si les généreux crédits d’impôt offerts par le gouverne-ment provincial ont diminué depuis qu’Alexis est devenu unecompagnie minière productrice, ils ont contribué à attirer lacompagnie dans la province.

Selon Patrick Sévigny, directeur de la mine Lac Herbin, larégion de Val-d’Or offre des avantages bien au-delà desressources disponibles. M. Sévigny vient de Val-d’Or et secompte chanceux de poursuivre sa carrière dans la villenatale. « De nombreux fournisseurs supportent l’industrie »,dit-il en pointant aux immeubles portant leurs noms :Komatsu, Hewitt. « Et même Molson », ajoute-t-il avec unsourire. « La ville comporte aussi une trentaine

Chargement du minerai à l’usine de la mine Lac Herbin

d’entrepreneurs en forage etautres services miniers, ce quiaide beaucoup. »

On savait depuis longtempsque la région contenait des gise-ments d’or. Deux anciennesmines, les mines Dumont etFerdeber, avaient déjà étéexploitées à proximité. Mais cen’est qu’en 2003 — l’année oùM. Rigg s’y est joint – que lacompagnie a acquis de nom-breux terrains, soit une superficiede plus de 1 000 km2.

La firme Golder et Associés aterminé une étude de faisabilitédu projet Lac Herbin vers lemilieu de 2007. L’étude, quiciblait les ressources minéralesmesurées et indiquées compiléesauparavant par InnovExplo, con-cluait que le gisement étaitrentable à exploiter au prix del’or alors en vigueur. Le projet du gisement aurifère LacPelletier, aussi propriété de la Corporation minière Alexis,était également rentable et pourrait donner des résultatssemblables à ceux obtenus pour le projet Lac Herbin.

Les bons employésSelon M. Sévigny, l’un des principaux attraits de la région

est la main-d’œuvre. En raison des récentes mises à pieddans des mines non aurifères et des étudiants qui effectuentdes internats; la compagnie peut identifier et choisir sesmeilleurs futurs employés.

L’exploitation minière est considérée, avec raison, princi-palement une industrie de ressources. M. Rigg offre un autrepoint de vue. « Les mandats d’exploration et dedéveloppement sont extrêmement complexes. À sonarrivée dans une région, la nouvelle compagnie doit attirerles bons employés. Il est donc très important d’établir unebonne réputation. » Les premières personnes embauchéessignaleront le fonctionnement de la compagnie aux autresdans la communauté. « Si vous choisissez une ou deux per-sonnes-clés, les autres suivront. Pour nous, ce fut l’em-bauche des chefs de service; ces derniers se servent alors deleurs contacts pour choisir des personnes avec qui ils ontdéjà travaillé. »

De nouvelles synergies La Corporation minière Alexis est aussi enthousiaste à

propos des travaux effectués sur le gisement aurifère LacPelletier, situé à Rouyn-Noranda. La mise en production de

ce gisement augmenterait les liquidités de la compagnie enplus d’établir des synergies avec le projet Lac Herbin, spéci-fiquement le traitement du minerai des deux gisements. Lesrésultats d’une étude de pré-faisabilité sont positifs et legisement Lac Pelletier devrait produire de 35 000 à 40 000onces d’or par année à partir de 2010.

L’une des principales préoccupations était le traitementdu minerai de Lac Herbin. À court terme, cette opération aété donnée à un entrepreneur; cependant la hausse des prixfait que cette option ne constitue plus la solution idéale. Àlong terme, à mesure du progrès de la mise en productionde Lac Pelletier et de potentielles nouvelles découvertes àproximité des mines Dumont et Ferdeber, il faudra trouverune autre solution. La Corporation minière Alexis a doncacquis l’ancienne usine Aurbel, inactive depuis les années1990; elle est située à un kilomètre à l’est de la mine LacHerbin et sa valeur de remplacement est de 36 millions dedollars. L’usine Aurbel peut traiter 1400 t/j; sa remise enétat d’opération demandera cinq mois et des déboursés de4,5 millions de dollars. Une fois en pleine opération, Alexiss’attend à une réduction des coûts de traitement et detransport de 10 à 15 dollars par tonne grâce à la proximitéde l’usine Aurbel.

Malgré le statut de nouveau joueur de Lac Herbin, M.Rigg est très optimiste quant à l’avenir de l’exploitation. « Ilfaut du temps pour établir la confiance des marchés. Aprèsquelques trimestres et avec la mine Lac Pelletier, la valeurinhérente de nos actions en bourse sera de plus en plusapparente. » ICM

mine en vedette

Inspection d’un large filon de quartz à la mine Lac Herbin.


cim newsAhmed, Rahem, QuebecAlmaguer, Isaias, MexicoAndreas, Mark, SaskatchewanAriss, Sabrina, ManitobaAtanasov, Stefan Stoychev, TurkeyBaker, Paul, Newfoundland & LabradorBalderas, Ricardo, MexicoBurrows, Alistair, AustraliaCacace, Carmine, OntarioCardinal, Angela, ManitobaCatrina, Bogdan, AlbertaCheverie, Joey, OntarioCummings, Alison, OntarioDas, Goutam, AustraliaDouville, Patrice, QuebecDries, Greg, USADuBois, Michel, BelgiumEngelbrecht, Lance, ManitobaFiliatreault, Pierre, OntarioFlores, Manuel Eduardo, MexicoFolnovic, Milan, SaskatchewanFournier, Antoine, QuebecFournier, Dan, QuebecGagnon, Denis, Manitoba

Gholipour, Javad, QuebecGoodwin, Carolyn, OntarioGulathy, Rajinder, OntarioHarris, Chris, OntarioHenry, Philippe, BelgiumHeppner, Kevin, SaskatchewanJanusauskas, Daniel, QuebecJasmin, Robert, QuebecKeane, Brian, OntarioKennedy, Dave, OntarioKleicker, Johann, GermanyKoushavand, Behrang, AlbertaLarissis, George, GreeceL’Écuyer, Pierre Alexandre, QuebecLow, Eric, OntarioMacLean, Andrew, British ColumbiaMajoko, Primo, British ColumbiaMalvaso, Emile, OntarioMazurek, Cameron, ManitobaMcDonough, Barry, British ColumbiaMicale, David, USAMontgomery, Alexander W., OntarioMoore, Christine, Nova ScotiaNeufeld, Marvin, British Columbia

Nico, Vervoort, BelgiumNiemi, Markus, FinlandNoiseux, Guy, QuebecPatel, Kruti, British ColumbiaPehlivanov, Stoyan Georgiev, BulgariaRoberts, Robert, OntarioRoy, Raja, OntarioSeddon, Christine, USAShepherd, James, OntarioSpanring, Alfred, AustriaSvens, Kurt Runar, FinlandTakala, Heikki, FinlandTariq, Amjad, OntarioTaylor, Curtis, SaskatchewanTuuppa, Eero, FinlandVassenine, Nikolai, OntarioVerscheure, Karel, BelgiumWu, Xiaozhu, QuebecZou, Feng, Ontario

CorporateACC Burkina FasoBHP BillitonPolar Star Mining Corp.

Obituaries CIM expresses its sincere condo-

lences to the families and friends of thefollowing members:

Brad Bjornson recently passed away.He had been a member of CIM since1979.

Dennis Michael Gorc, who joined CIMin 1987, has passed away.

Guy A. Ehmann became a member ofCIM in 1967, achieving life memberstatus in 1999.

Mervin Keys joined CIM in 1946 andhad achieved life member status. Hepassed away last October.

W. Ralph Lewis recently passed away.He had been a member of CIM since1972, becoming a life member in 1992.

CIM welcomes new members

A look back in time20 YEARS AGO…

• In his valedictory observations, president René Dufour recommendedthat CIM pay close attention to enhancing the significance of branches,its services to members, the self-evaluation of its divisions, continuingeducation and the public understanding of the industry.

• Winners of the CIM/EMR Journalism Awards were announced. Theawards recognized excellence in writing and broadcasting thatenhanced the public’s understanding of the resources industry and itscontribution to Canadian society.

• CIM Council adopted as CIM’s Mission Statement, “To provide thehighest quality service and support to all those engaged or employedin, or associated with the mining, metallurgical and petroleum indus-tries, having particular regard to their professional, technical andsocial needs.”

• The historical metallurgy article presented a potted history ofFalconbridge Ltd., on the occasion of its 60th anniversary.

The above were taken from the May 1989 issue of CIM Bulletin.

May 2009 | 73

cim news


CIM Distinguished Lecturer JanNesset is not only an engineer ofunquestionable accomplishmentbut also a man of indomitable spir-its. His appetite for life and his zestfor mineral processing are reflectedin his presentation “100 Years ofBlowing Bubbles for Profit.” Nessetkeenly breathes fresh air into a cen-tury-old story — the evolution offroth flotation.

The spiritAfter obtaining his bachelor’s

degree in metallurgical engineer-ing from McGill University, Nessetput his part-time earnings to gooduse by spending the next sixmonths backpacking acrossEurope. Returning with a rein-forced passion for the great out-doors, he entered graduate schoolat McGill and soon completed hismaster’s degree. It was his love forthe open air that drew him to met-allurgical engineering and mineralprocessing, in particular. “In thisindustry, you do not need to beburied behind a desk and weighed down by peckingorders,” said Nesset.

In 1979, he landed a job with Noranda Inc. at theirBrunswick (Cu-Pb-Zn-Ag) mining operation, which, atthe time, was involved in a gamut of projects and opera-tions — the perfect choice for an eager engineering grad-uate. Nesset remained with Noranda for the next 23years, tapping into abundant opportunities and working

with single-minded dedication and substan-tial talent. Following 15 years at variousmining operations, his keen mind, drawn by

research, led him to the R&D sector. He took up the posi-tion of program manager in mineral processing at thenow-closed Noranda Technology Centre in Montreal.

Nesset refused to be defeated when he was diagnosedwith pseudo xanthoma elasticum (PXE), a rare geneticdisease similar to macular degeneration that causes lossof vision in the central area of the retina. He gotstraight to work, tackling this hurdle like “any otherengineering project.” He contacted the MontrealAssociation for the Blind to register and get informa-

tion, training and the required toolsbefore he fully needed them.

The storyFroth flotation, a great revolution in

the minerals industry, radicallychanged the fabric of mining and theglobal economy at the turn of the lastcentury. Through his presentation,Nesset captures the pivotal momentsin its history, threading together thestories of the countries and individualsthat were instrumental in its develop-ment. He guides us back in time, to thelate 1800s, where the supply of metalscould not meet the boost in demand,due to the emerging automobile indus-try and the developing electrical distri-bution system. The centuries-oldmethods used to upgrade good-qualityores were highly inefficient and,according to Nesset, “the world wascrying out for improvement.”

Nesset then takes us on a journeyfrom flotation’s early inception inAustralia through its evolution intothe vital process we know today. Hepiques our interest with intriguing

facts and unveils buried connections, such as the pivotalroles played by Herbert Hoover, the 31st president of theUnited States, and his brother Theodore, and RalphDiamond, the Canadian metallurgist who unlocked theenormous potential of the Sullivan deposit for Cominco.

The motiveIn addition to his consulting practice, Nesset recently

returned to McGill to pursue his PhD, working in thearea of flotation cell hydrodynamics. He has also takenover teaching a required course on mineral processingthat was on the brink of cancellation. “I wanted to ensurethat the class would not disappear from the mining andmaterials engineering program. It teaches material that Iconsider essential for every process engineer.”

His thirst for knowledge sharing has driven Nessetto join the Distinguished Lecturer program. “I believeeveryone should try to give something back to thiswonderful industry. If I can get people interested, espe-cially students, then this story will transcend another100 years.” CIM

A breath of fresh airCIM Distinguished Lecturer Jan Nesset speaks of his passion for acquiring and sharing knowledge

by Robbie Pillo

“I believe everyone should tryto give something

back to this wonderful industry”

— J. Nesset

Sponsored by:

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A founding member of CIMCordially Invites you to attend our

122 Annual General Meeting Held at

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June 4th, 5th and 6th, 2009

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cim news

On December 15, the CIM LosAndes Branch held the last monthlymeeting for 2008. A lecture was given by Gabriel Gutierrez, vice pres-ident, engineering development for Molibdenos y Metales S.A., orMolymet, as it is more generallyknown. The company produces vari-ous molybdenum commercial prod-ucts as well as rhenium.

Molymet was formed in 1937 toprocess molybdenum concentrates in

Chile, and has grown insize to represent some 34per cent of the molybde-

num and 70 per cent of the rheniumworld markets. It now has other plantsin Mexico, Germany and Belgium, andoperates in the United States andChina. It is listed on the Santiago stockexchange, and has ISO 14001 as wellas OHSAS 18001 accreditation.

An interesting and varied reviewwas presented using PowerPointgraphs and photos of the organization,

the processes, the plants in the variouscountries, future expansion plans —including a new plant in northernChile at Mejillones port — as well asthe uses, and the shrinking market andprice of molybdenum. The presenta-tion was followed by questions from aclearly attentive audience of 50 peoplethat included students, suppliers,engineering and mining companies,and accounting and legal personnel.

To fulfill the other objective of themeeting — that of providing a settingfor an open exchange among indus-try personnel — the evening con-cluded with a buffet prepared by theRadisson Santiago Hotel and wasaccompanied by an excellent Chileanbeer, a worthy heritage of theGerman settlements that made theirhome in the middle south of Chile inthe 19th century. CIM


Molybdenum, served with beerA transition metal and a Germanic elixir enliven the CIM Los Andes Branch annual meeting

by Simon Tarbutt

Branch executive (from left to right): Armando Valenzuela, director; Gonzalo Muñoz, director; Paula Quijada, executivecoordinator; Simon Tarbutt, director; John Selters, chair; and Jaime Arias, director.

The CIM Sudbury Branch held its8th Annual Sweetheart Dance onValentine’s Day. Despite it being heldon a Saturday instead of a Friday, as isusually the case, 380 people attendedthis increasingly popular event that is

widely supported by thelocal industry.

Planning starts threemonths before the event, with ticketsdistributed to the executive to sell.Local businesses sponsor the tickets,and tables are set up under their ban-ner. Additional sponsorship is obtainedfor the entertainment, food and prizes.Companies are proud to see their nameon a wine bottle at their table.

The local hall, the Caruso Club, isnow quite used to the nature of our

event, which helps considerably in theplanning. The Italian heritage of thevenue seems to add to the romance ofthe evening. An event planner washired for the hall decorations and thisyear they outdid themselves in thequality of their work. A special sectionwas set up for pictures, with a beauti-ful Valentine’s Day theme.

Guests were greeted by a receptionline and directed to their tables. All thewomen were treated to corsages thatwere sponsored by Bestech, a local com-pany. The reception line fed into a cock-tail area that again set the romantic toneof the evening. Guests then moved intothe huge ballroom, set up with tablesdecorated with candles and hearts. Thelight music provided a mellow backdrop

to conversations and the ladies got tocatch up on events of the winter.

A full buffet was served, high-lighted by roast beef cooked to perfec-tion. The event was followed by danc-ing, with breaks to allow for the draw-ing of prizes. The wife of Brian Buss,head of Vale Inco’s Project group, wasdelighted to win the door prize.

The success of a social night can bejudged by the time of the last dance.Those who made it to the 1:30 a.m.final number closed the night in thespirit of the evening.

The work that the executive putinto making the evening a success wasgreatly appreciated. Requests arealready coming in for tickets to nextyear’s event. CIM

For the love of miningCIM Sudbury Branch holds its popular Valentine’s Day Sweetheart Dance

by George Darling

cim news

May 2009 | 77

Civil engineer ScottMcIntosh has made a very goodcareer of solving problems.Ever since he took his first job34 years ago at a Coloradomolybdenum mine, he hasdone his part to help makethings work better and moreefficiently.

McIntosh, the man behindMcIntosh Engineering, donated$750,000 to strengthen theCanadian Mining andMetallurgy Foundation (CMMF)and help it ensure that the min-ing industry can attract anddevelop its most valuableresource — future generations ofwell-trained professionals. Thedonation was made possible dueto the acquisition of McIntoshEngineering by Stantec last year,and is a portion of the $2 millionMcIntosh made available to theSociety for Mining, Metallurgyand Exploration (SME) in theUnited States, CMMF, as wellas schools on both sides of theborder.

“The initial idea for thefund,” explained McIntosh,“came about early last year whenthe industry was growing at an incredible rate and miningcompanies around the world were wondering, ‘Oh my gosh,

where are we going to get the people to engineer,build and operate these mines that are trying tocome on stream?’ The urgency of the issue has

changed, but with any sort of a long-term perspective, I’mabsolutely convinced there is a need for more rather thanfewer young professionals to come into this business.”

Thanks to the generosity of CIM members and others,the Canadian Mining and Metallurgical Foundation,administered by a board of trustees, funds programs aimedat supporting professional development and raising publicawareness about the industry and the spectrum of careeropportunities it offers.

Like any who have sustained a career in the industry,McIntosh has endured slumps that have scared people awayin the past. The demand for metals and minerals returns,but the hard times leave a legacy. “During the past down

cycles, mining schools acrossNorth America closed; theattendance level at miningschools has been poor and that’swhat put us in the difficult posi-tion over the last three years.There just weren’t people outthere because so many had beendriven away from the industry.”

McIntosh acknowledged thatin relation to the scale of theproblem, his donation repre-sents a “drop in the bucket,” buthe hopes the money will helpmaintain the educational infra-structure during slow times, andhe challenged others to keep aneye on the horizon. “Anyoneinterested in the future of ourbusiness — the mining compa-nies in particular — needs to domore rather than less to invest inthe future.”

Born and raised in the UnitedStates, McIntosh joined theOntario-based Redpath Groupin the late 1970s. He named JimRedpath, group founder, as hisprofessional mentor. McIntoshlater spun off the engineeringdivision of Redpath as McIntoshEngineering, which specialized

in underground mining. He has lived in North Bay,Ontario, and has broad professional and personal connec-tions to Canada, a country that, he insists, runs inhis blood.

He turned to CIM for help in administering the fundsbecause it has a strong presence and a solid history. “CIMis a respected organization with a national reach that fordecades has been dedicated to the mining industry. Andthe CMMF is a great organization to focus the effortsaimed at developing the industry.”

Though the sector has experienced ups and down,McIntosh, now the vice president of Stantec Mining, saidhis life in mining has offered steady rewards and he seemsa ready mentor, himself. “There are opportunities for any-one who has the bug to travel around the world, and thereare plenty of opportunities for somebody who wants tostay in one place and raise a family. It is a tremendouslyrewarding career.” CIM

Bridging the gapMajor donation to sustain professional development

by Ryan Bergen

“Anyone interested in the future of our business –

the mining companiesin particular –

needs to do more rather than less

to invest in the future.”— S. McIntosh

About the survey495 of 9,121 CIM members responded to the survey, which was geographicallyhomogenous with the total membership,yielding a response rate of 5.4 per cent.Beginning in November 2008, the studyinvolved:u Reviewing background material and

interviewing CIM staffu An online survey to understand

members’ expectationsu Telephone interviews with past

members to identify reasons for attrition

u Contacting prospective members tounderstand what might motivatethem to join

u Comparing CIM policies and practices to best practices in theassociations sector

u In terms of overall satisfaction, 87.5per cent of respondents were satis-fied or very satisfied with CIM.

CIM 2008-

SurveyHighlightAs the leading representative of Canada’s mining resources

industry for over a century, CIM understands that its purpose revolves around its members. To

ensure that CIM is delivering the appropriate member value, we commissioned Association

Management Consulting and Evaluation Services (AMCES), a consulting service that caters

exclusively to the non-profit sector and has supported more than 120 organizations for over 150

such projects, to survey current, past and non-members. The findings of the survey, while gen-

erally reassuring, tell us that some expectations still remain to be met. The information will

guide CIM’s efforts to set a renewed strategic direction that will take us into the future that you

envision for yourselves, for the industry and for CIM.


Communication and concernsu Email is preferred for individual specific communication

that requires some action and the website is preferred formore general information.

u Respondents very clearly affirmed CIM’s vision, purpose,values, principles and strategic goals, but also commentedthat:— The current strategic goals cannot be measured.— CIM needs to attract more young people to the industry.— CIM has an important role to play in promoting the

importance of the mining industry and the professional-ism of its members.

What you want CIM to dou Promote the role and benefits of the mining industryu Increase the relevance of CIM for studentsu Increase networking opportunities and the sharing of tech-

nical papers, guidelines and standardsu Improve communications about CIM programs and servicesu Play a leadership role with respect to other industry associ-

ationsu Collaborate with other associations to promote higher stan-

dards and a better public perception of the mining industry

Programs were ranked from 1 to 22 in importance and satisfaction, with 1 being the highest ranking.

Based on the results of theresearch, a review of CIM poli-cies and processes, and com-parison to best practices, a listof key potential improvementswere noted:

u CIM should develop crite-ria and a policy to deter-mine the feasibility of newprograms and services.

u A policy for program andservice abandonmentshould be developed andcurrent programs andservices should bereviewed according to thispolicy.

u CIM should develop amember recruitmentstrategy for its key seg-ments that involves volun-teers and staff that ismeasurable and evaluatedon an ongoing basis.

u Program fees and mem-bership dues should bereviewed annually toensure that they are inline with real costs andmarket conditions.

u CIM should allocate ade-quate resources to suc-cessfully deliver its pro-grams and services.

What we coulddo better

Top five CIM programs/services

Program or ServiceParticipation

Rate(Ranking)

Importance(Ranking)

Satisfaction(Ranking)

CIM Magazine(print version)

1 2 2

Conferences 2 1 4

CIM Website 3 3 6

CIM MembershipDirectory (print version)

4 10 3

Trade Exhibition 5 4 8

What you likeWith regards to 22 programs and services offered by CIM, 89.4 per centof respondents are satisfied or very satisfied. Here’s a look at the topfive CIM programs or services you participate in or use. The table belowalso shows how you rank the importance you accord to them and howsatisfied you are with them.

Some programs and services were ranked high in importance and sat-isfaction even though the participation was quite low. These include:

u Networking opportunities via technical interest groups/societies

u Professional development programs

u Outreach (Mining in Society)

u Membership directory (print version)

u The CIM awards

May 2009 | 79

calendarCIM EVENTS

Los Andes Branch MeetingGuest Lecturer: Rodrigo Rivas

May 19Santiago, ChileContact: John SeltersEmail: [email protected]

Ottawa Branch Meeting CIM Distinguished Lecturer Robin Sheremeta

May 20Ottawa, OntarioContact: Mario RiopelEmail: [email protected]

Tournoi de golf annuel de la section de Thetford Mines29 maiClub du golf du Mont Adstock, QuébecPersonne-ressource : François JacquesTél. : 418.338.7500Courriel : [email protected]

Tournoi de golf amical de la section d’Harricana30 maiLe Golf du Belvédère, Val-d’Or, QuébecPersonne-ressource : Jean-François LagueuxTél. : 819.874.7822 poste 3258Courriel : [email protected]

Northern Gateway Branch Blues CruiseJune 12North Bay Waterfront Marina, OntarioContact: Bernie RobertsonEmail: [email protected]

Sudbury Branch 11th Annual Lobster Dinner and DanceJune 12Sudbury, OntarioContact: George DarlingTel.: 705.691.1812Email: [email protected]

North Central BC Branch Annual General MeetingJune 24-26Prince George, British ColumbiaContact: Greg RasmussenEmail: [email protected]

AROUND THE WORLD

Alta 2009 Nickel – Cobalt, Copper and Uranium Conference

May 25-30Perth, Western AustraliaContact: Alan TaylorTel.: +61.3.5472.4688Email: [email protected]

Using DCF and Real Options to Value andManage Mining and Petroleum Projects

May 27-29Colorado School of Mines, USAContact: Graham DavisTel.: 303.273.3321Email: [email protected]

4th Industry Summit on Mining PerformanceJune 9-11Toronto, OntarioContact: Kathy PollardTel.: 814.863.1009Email: [email protected]

First International Seminar on Geology for the Mining Industry

June 10-12Antofagasta, ChileContact: Isis GalenoEmail: [email protected]

Canadian Mining Law and Finance Conference June 10-11, Toronto, OntarioJune 15-16, Vancouver, BCContact: Linda MacLachlanTel.: 416.367.5613Email: [email protected]

Physical Separation 09June 16-17Falmouth, Cornwall, UKContact: Barry WillisEmail: [email protected]

Materials Characterisation 2009June 17-19Wessex Institute of Technology, UKContact: Rachel SwinburnEmail: [email protected]

May 2009 | 81

The history of Butte has resulted in an extensive bibliography. Most of that hasfocused on the Battle of Butte between 1896 and 1906, when the developmentand consolidation of the camp was marked by corruption, disagreements,threats, intimidation, legal challenges, the buying of judges and elected politi-cians, fraud, theft, murder and political intrigue. That story has been well sum-marized by historians such as Joralemon (1934), Glasscock (1935), Marcosson(1957), Greever (1963), and Malone (1981), and in the autobiography of Sales(1964), and is beyond the scope of this series.

George Hearst and James Haggin were so impressed by the copper potentialof the strong vein zone that Marcus Daly showed them that the Hearst Syndicatepurchased the Anaconda claim from Daly for what he had paid and agreed tofinance its development. They also gave him a carried 25 per cent interest (ineffect making him an equal fourth partner in the syndicate), and appointed himgeneral manager. The initial interests were Hearst, 39 per cent; Haggin, 26 percent; Daly, 25 per cent; and Lloyd Tevis (who wasn’t as enthusiastic), 10 per cent.This happened in spite of efforts by William Clark to discredit Daly with the syn-dicate, as he had tried to do earlier when Daly bought the Alice mine for theWalkers. Clark was also purported to have said some disparaging things aboutHaggin’s heritage because of his given names, James Ben Ali, which was bizarrebecause Haggin’s pedigree was better than Clark’s. Haggin’s father was a success-ful lawyer in Louisville, Kentucky, while his mother was the daughter of aChristian Turk with a medical practice in Philadelphia, who had been forced tomove to England to study medicine because of his religion. These attacks prob-ably contributed to the long feud between Daly and Clark. When Clark wrote hismemoirs 50 years later, he never mentioned Daly by name, referring to him onlyas “a representative of the Walkers.”

Daly sank a production-size shaft at a site reportedly selected by Hearst anddrove crosscuts 90 to 150 metres long on levels 30 metres apart. Nothing buta little oxidizedsilver ore withsome copper stainwas found ini-tially, but it wasenough to justifyleasing the nearbyDexter mill fromClark. At a depthof 30 metres,where the silverstarted to disap-pear, a narrowseam of chacocite,which was called‘copper glance’ byprospectors, wasintersected. Chal-cocite is the richest coppersulphide mineral,

history“Litigation usually frequented the great

American mining centers, usually eroding

profits and sometimes paralyzing operations.

What happened at Butte, though, seemed to

be in a class by itself. Before the carnival of lit-

igation had run its course from 1896 to 1906,

tens of millions of dollars worth of mining

properties would shut down; thousands of

employees would lose their income; the camp

would stare into the abyss of outright warfare;

and the Amalgamated trust itself would face

imminent disaster. … With its hundreds of rich

claims and its many well-established mine

owners, the sprawling Butte district staged

the greatest of all legal-political battles in the

history of western mining. The final result,

though hard won, was preordained: consolida-

tion under one central management.”

~Malone, 1981

Butte, Montana (Part 2)by R.J. “Bob” Cathro, Chemainus, British Columbia

The headframe and surface plant at the Neversweat mine, Butte, ca. 1900.

Cour

tesy

of W

orld

Mus

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of M

inin

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economic geology


containing almost 80 per cent copper by weight comparedwith up to 35 per cent for chalcopyrite and about 50 percent for bornite. This mineral had seldom been seenbefore in large amounts anywhere. The chalcocite veinwas still narrow at the 61 metre level, but a year later, at adepth of about 90 metres, it had widened to 1.5 metres.On the next level, it widened to 15 metres and wasbetween 15 and 30 metres thick when the shaft reachedthe 180 metre level in the spring of 1883. It had becomethe largest chalcocite deposit the world had ever seen.Encouraged by the good results, Daly began to purchaseadjacent claims, including the St. Lawrence andNeversweat along strike, just as Hearst had done atHomestake in order to avoid legal problems caused by theApex Law (see CIM Magazine, Vol. 3, No. 6, page 113,September/October 2008).

The initial ore produced from the Anaconda mine aver-aged 12 per cent copper and up to $30 perton in silver, and some zones ran from 45to 55 per cent copper. During 1882-84,37,600 tonnes were shipped to a smelter atSwansea, Wales. In 1883, construction ofa smelter and a new town namedAnaconda began at Warm Springs, 42kiolmetres west of Butte, where there wasabundant water. The smelter initiallytreated ore averaging 8 to 10 per cent cop-per. A silver smelter was added later andthe tracks of the Great Northern Railwayreached the smelter in 1887. In 1892, theAnaconda operation produced 50,800tonnes (100 million pounds) of copper,which made it the largest copper mine inthe United States. Daly invested heavily innew mines, acquired coal lands and a tim-ber supply, established banks, built power plants andstarted an irrigation system, quickly establishingAnaconda as one of the largest copper producers in theworld. By the early 1890s, the syndicate was smelting3,000 tonnes per day and consuming 75,000 tonnes ofcoal and 15 million board feet of lumber per year fromcompany-owned operations. Although Anaconda dwarfedother large mining operations in the camp, includingClark’s, the structural geology of the camp, which con-sisted of a huge stockwork of countless small intersectingveins, meant that there were scores of small independentmines operating on single claims.

The significant silver content of the Butte ores gave it animportant cost advantage over the other major U.S. coppercamps in Michigan and Arizona. Mineralization in Michigan,the second largest producer, consisted of native copper,which had a negligible precious metal content but didn’trequire smelting. Even though the Michigan mines were sit-uated much closer to the eastern markets, their productioncosts were twice as high as those at Butte’s (Hyde, 1998).

When a temporary oversupply of copper occurred thatdrove the price below 10 cents/lb between 1887 and 1889,a group of French investors and banks enlisted 37 of theleading producers that controlled 80 to 85 per cent of theglobal supply to establish a copper cartel. Anaconda wasone of the companies that agreed to sign a three-year con-tract. The cartel managed to raise the price to 21 centsbefore it collapsed in 1903, causing the copper price toplunge to 7.5 cents and resulting in a financial panic inNew York. The Butte mines were able to withstand thefinancial damage relatively well until the bankers agreed tosupport the price at the 12 cent level.

Sadly, George Hearst died in 1891 before he could seehow great the Butte camp would become. A few monthsprior, the partners had agreed to convert their interests intheir private syndicate into a public corporation. Hiswidow Phoebe sold his 7/16 interest in Anaconda to the

London branch of the Rothschild bankingempire for $7.5 million to enable theirson, William Randolph Hearst, to pur-chase a New York newspaper that becamea key piece in his newspaper empire. Thatleft Phoebe with the balance of the $18million in his estate at George’s death,plus large interests in the Homestake andother mining properties, and hugeranches in California and Mexico. One ofthem was the 40,000 square kilometreranch at San Simeon, California, whereher son built the Hearst Castle afterPhoebe died in 1919. To honour her hus-band, Phoebe built the Hearst MemorialMining Building at the University ofCalifornia, Berkeley between 1901 and1907.

Efforts to consolidate the ownership of the camp by com-bining large holdings were initiated by financiers in Boston,who controlled the Michigan copper mines, and Wall Street.With both Hearst and Tevis already dead, Daly sold his sharefor about $17 million in 1899, only a year before his death.Haggin exchanged his Anaconda interest for shares worth$15 million in the new company, the Amalgamated CopperCompany. Controlled by former executives of John D.Rockefeller’s Standard Oil Trust, Amalgamated was actually amonopoly posing as a holding company. Haggin died in1914, the last survivor of the original Hearst Syndicate.

Further consolidation might have proceeded smoothlybut for the efforts of the third Butte mining mogul,Frederick Augustus (Fritz) Heinze. Born in Brooklyn in1867 of German-Irish heritage, he moved to Butte in 1889as a surveyor after graduating from the Columbia School ofMines. He then returned to New York to join the editorialstaff of the Engineering & Mining Journal, where he devel-oped some important financial contacts. After inheritingsome money, Heinze returned to Butte where he organized

James Haggin (1827-1914); (from Malone,1981). Photo courtesy of the MontanaHistorical Society, Helena

economic geology

May 2009 | 83

the Montana Ore Purchasing Company in 1892, built a cus-tom-smelting business, leased several mines and quicklybecame wealthy. In his spare time, he built a smelter atTrail, B.C. to treat ore from the isolated Rossland copper-gold camp, constructed a railway to connect the mine andsmelter, and sold the entire enterprise at a high price to theCanadian Pacific Railway. It became the nucleus of theConsolidated Mining & Smelting Company, now part ofTeck Cominco Limited.

Heinze was a personable, charming, brilliant and tire-less mining engineer and businessman who became leg-endary for his lavish entertaining and his ability to partyall night and work all day. He was also a gifted orator. Hissurveying experience had given him an intimate familiar-ity with the complexity of the Butte vein system and hecombined that experience with his keen nose for orepotential. Sensing how vulnerable mineral titles were toApex Law challenges in a complex vein system like thatpresent at Butte, he exploited the opportunity aggres-sively with predatory litigation. At the height of hisinfluence, Heinze and his two brothers employed 37attorneys and he became known as a courthouse miner.His clever efforts, which kept Butte and Wall Street inturmoil for ten years, has been dubbed by historians as‘The Battle of Butte.’

The history of the Apex Law and how it was adoptedin the United States, but not in most other major miningcountries, is not well understood. It was designed to pro-tect the rights of a prospector who had located the top ofa vein at surface, known as its apex, by guaranteeing himthe right to follow the vein downward forever, even whenit passed onto a neighbouring claim. This is known as anextraterritorial right. The earliest record found for sucha law was the one proclaimed for the town of Iglau by theKing of Bohemia (Czechoslovakia) in 1249 (Parry,2004). Previous articles in this series have shown thatGerman mining experts managed Royal mines in parts ofEngland, such as the lead mines in Darbyshire (but notCornwall) between the 14th and 16th centuries, and thatthe Apex Law was adopted in the mining camps ofCalifornia, subsequently spreading throughout theUnited States (see CIM Magazine, Vol. 1, No. 5, p. 70,August 2006; and Vol. 2, No. 5, p. 66, August 2007). It isunclear if the apex idea was brought to California fromEngland or directly from Germany. In any case, the ApexLaw was unworkable for a complex vein system such asButte, where numerous branching and bifurcating veinsand unmineralized faults were encountered under-ground, and their apices were often impossible to deter-mine until the vein was mined out.

Expediency forced Heinze to become a close businessand political ally of William Clark in their joint opposi-tion to the Amalgamated Copper Co. The battle for con-trol of Butte finally ended in 1906 when Heinze agreed tosell his interests for about $10 million plus the dismissal

of 110 lawsuits. He lostmost of his fortune in aNew York banking col-lapse (the Panic of 1907)and died in 1914. In thewords of Malone (1981),Heinze was “a remarkablygifted man (who) flew fastand high before his earlyfall.”

William Clark, the mostnotorious of the foundersand fathers of Butte, out-lived them all. In 1900, heranked as the world’s great-est independent mineoperator, worth an esti-mated $50 million. Theconsolidation of the keymineral claims at Butte was almost completed when hesold his holdings to Amalgamated in 1909. The holdingcompany then reverted to the name of Anaconda CopperMining Company.

In addition to his Butte interests, Clarke controlled thehugely profitable United Verde copper mine at Jerome,Arizona, held other mining and land interests, and owneda railway he built from Salt Lake City to Los Angeles. Inaddition, he had served one term in the U.S. Senate. In1906, he built a 131-room mansion, with 21 bathrooms,in New York that burned 17 tonnes of coal per day. At hisdeath in 1925, he was worth $200 million. In 1907, MarkTwain described Clark in this fashion: “as rotten a humanbeing as can be found anywhere under the flag … (and)the most disgusting creature that the republic has pro-duced since Tweed’s time” (Malone, 1981). Unlike Daly,who was remembered as an empire builder and father fig-ure, Clark never won respectability. CIM

References

Glasscock, C.B. (1935). The war of the copper kings: builders of Butte and wolves of WallStreet. New York: Grosset & Dunlap.

Greever, W.S. (1963). Bonanza west: the story of the western mining rushes 1848-1900.Moscow: University of Idaho Press.

Hyde, C.K. (1998). Copper for America. Tucson: University of Arizona Press.

Joralemon, I.B. (1934). Romantic copper: its lure and lore. New York: D. Appleton-CenturyCompany Incorporated.

Malone, M.P. (1981). The battle for Butte: mining and politics on the northern frontier,1864-1906. Seattle: University of Washington Press (reprinted in 1995 by the MontanaHistorical Society Press, Helena).

Marcosson, I.F. (1957). Anaconda. New York: Dodd, Mead & Company.

Parry, W.T. (2004). All veins, lodes, and ledges throughout their entire depth: geology andthe apex law in Utah mines. Salt Lake City: The University of Utah Press.

Sales, R.H. (1964). Underground warfare at Butte. Caldwell, Idaho: Caxton Printers, Ltd.

Augustus Heinze (1869-1914); (fromMalone, 1981). Photo courtesy of theMontana Historical Society, Helena

metallurgy


Four postage stamps commemorating platinum, issued onAugust 15, 1979, are of particular historical interest. Onestamp shows pouring of platinum and an African worker,while other stamps summarize the importance of platinum inthe chemical industry, in telecommunications satellites andin jewelry. The stamps were issued by Bophuthatswana, abantustan (homeland) in the Republic of South Africa. At thetime, Bophuthatswana consisted of seven enclaves dispersedin northwest South Africa. The homeland was set up tohouse Setswana-speaking peoples, with its capital,Mmabatho, situated in an area bordering Botswana.Bophuthatswana was given nominal self-rule in 1971, andbecame independent on December 6, 1977. A head of statewas appointed by the South African government, but the newcountry was not recognized as independent by any govern-ment other than that of South Africa and Israel. In 1983, ithad more than 1,430,000 inhabitants. Two attempted coupswere suppressed by South Africa.

Bophuthatswana’s wealth came from the num-ber of platinum mines on its soil. The BushveldComplex is a large igneous intrusion that containssome of the richest ore deposits on earth. Thereserves of platinum group metals are the world’slargest, with vast quantities of iron, tin, chromium,titanium and vanadium. The geographic centre ofthe complex is located north of Pretoria. It coversover 66,000 square kilometres, an area the size ofIreland. The complex varies in thickness, some-times reaching nine kilometres in thickness.

The ore bodies within the complex include theUG2 Reef, containing up to 43.5 per centchromite, and the platinum-bearing horizons, theMerensky and Plat reefs. The Merensky Reefvaries from 30 to 90 centimetres in thickness. It isa norite with extensive chromitite and sulphidelayers or zones containing the ore. The reef contains an aver-age of 10 ppm platinum group metals in pyrrhotite, pent-landite and pyrite, as well as in rare platinum group mineralsand alloys. The Merensky and UG-2 reefs contain approxi-mately 90 per cent of the world’s known PGE reserves. About80 per cent of the platinum and 20 per cent of the palladiummined each year are produced from these horizons. The ini-tial recovery of platinum took place on several of the largeEast Rand gold mines; the first separate platinum mine was ashort-lived venture that worked small quartz reefs.

The discovery of the Bushveld Igneous Complex depositswas made in 1924 by a district farmer. This was an alluvialdeposit but its importance was recognized by HansMerensky, whose prospecting work discovered the primary

source in the Bushveld Igneous Complex, and by 1930, hehad traced it for several hundred kilometres. Extensive min-ing of the reef took place when an upsurge in the demand forplatinum group metals, used in exhaust pollution control inthe 1950s, made exploitation economically feasible. It wasnot until the 1970s that major advances in metallurgy madethe extraction of metals from the UG2 chromitite possible.

Impala Platinum Limited has its primary operations con-centrated on the Impala lease area on the western limb of theBushveld Complex, near the town of Rustenburg. Some28,000 people are employed by Impala Platinum. Mining atImpala focuses primarily on two reefs, the Merensky Reefand the UG2 Chromitite Layer, which are contained in theRustenburg Layered Suite, a well-layered ultramafic to maficigneous succession of the Bushveld Complex. The majorityof mining operations extend to a depth of around 1,000metres below surface.

Hans Merensky (1871-1952), South Africa’s most famousprospector and mining geologist, was born in Botshabelo,South Africa. He studied at the State Academy of Mining andthe University of Berlin, and was a consulting geologist inJohannesburg. While conducting some geological surveys,he discovered tin near Pretoria and reported it to the PremierDiamond mine regarding possible mining prospects. In 1924,he was tipped off about some platinum deposits nearLydenburg. There, he discovered a 48-kilometre reef that waslater named for him.

In his later years on his farm, Westfalia, he contributedmuch to South Africa’s agriculture industry through hisresearch into preventing erosion, new grass types, fruit andanimal breeding. During his lifetime, he donated much of his

Platinum in Bophuthatswanaby Fathi Habashi, Department of Mining, Metallurgical, and Materials Engineering, Laval University

Use of platinum in jewelry

Use of platinum as a catalyst in thechemical industry

Processing a platinum ore

Use of platinum in the space industry

metallurgy

May 2009 | 85

wealth to universities, schools, libraries, hospitals, charities,cultural organizations and people in need. One of his greatercontributions was to the University of Stellenbosch, enablingit to create a forestry faculty.

Bophuthatswana also made money from the Sun CityCasino, which was a short drive of 150 kilometres fromJohannesburg and Pretoria, where gambling was illegal.In the beginning of 1994, when South Africa washeading for democratic elections, the president of

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Bophuthatswana resisted re-incorporation intoSouth Africa. However, on April 27 of the sameyear, all ten homelands, includingBophuthatswana, became part of post-apartheidSouth Africa.

Sun City, which lies deep in the rugged Bushveld, inthe heart of an ancient volcano, is a unique resort com-plex with a spectacular casino, restaurants, swimmingpools, botanical gardens and extensive sporting facili-ties, including two world-class golf courses.

In conclusion, postage stamps are an important meansof communication; numerous countries have recordedimportant events, honoured worthy individuals anddescribed interesting facts through this medium. Manyhistorical facts, sometimes obscure, can be found on

stamps; some of these may not be easily located in a history ora science book. Stamps have artistic value, they are used everyday and can be found everywhere.

Suggested ReadingsF. Habashi, D. Hendricker, & C. Gignac (1999). Mining and Metallurgy on Postage Stamps.Quebec City: Métallurgie Extractive Québec/Laval University Bookstore.

O. Lehmann (1959). Look Byond the Wind, the Life of Dr. Hans Merensky. Cape Town:Howard Timmins.

CIM

Map showing the Bushveld platinum mines in Bophuthatswana: Impala, Rustenburg, etc., andPretoria. Johannesburg is a little below Pretoria.

executive summaries


INDUSTRY KNOWLEDGE

87 Canadian Metallurgy QuarterlyVolume 47, Number 4

Peer reviewed by leaders in their fields

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CALL FOR TECHNICAL PAPERSIf a tree falls in a forest and no one is around to hear it, does it make a sound?

The best research is of little value if it remains unpublished and unnoticed.

Get your scientific work noticed by Canada’s leading scientistsand practitioners in geology, metallurgy, materials science, engineering andother resource industry-related disciplines.

Submit your papers for publication in the CIM Bulletin and benefitfrom rigorous peer review and wide circulation.

Visit www.cim.org/ebulletin to submit your papers. See www.cim.org/publications/guidelines.cfm for author guidelines.

Pre-Ageing to Improve the Microstructure and Tensile Properties of Al-0.72Mg-0.42Si-0.1CuArtificially Aged AlloyC.-H. Shen, Department of Mechanical Engineering, Army Academy, Jhongli City, Taiwan; and B.-L. Ou, Depart-ment of Mechanical Engineering, National Central University, Jhongli City, Taiwan

This paper describes a low temperature pre-ageing method that can improve the strength of artificially agedAl-Mg-Si-Cu alloys. The precipitation behaviour of the alloy samples was analyzed by use of differential scanningcalorimetry (DSC) and the results were confirmed by microstructural observations using high resolution transmis-sion electron microscopy (HRTEM). Tensile testing was performed to determine the mechanical properties of thesamples. The results indicate that GP zones (I) formed in the alloy matrix with either natural ageing or pre-age-ing at 50°C and the formation of GP zones (I) retarded precipitation of the β” phase during artificial ageing: itcan be concluded that increasing the holding period would significantly decrease the strength after artificial age-ing at 170°C. Pre-ageing either at 70 or 90°C, however, immediately after quenching of nuclei for precipitationof the β” phase formed in the alloy matrix, showed that the precipitate particles formed in the pre-ageing con-dition grow in the subsequent artificial ageing process. It was concluded that in this case, increasing the pre-ageing time would increase the strength after artificial ageing at 170°C.

Corrosion Resistance of the Skin and Bulk of Die Cast and Thixocast AZ91D Alloy in Cl- SolutionUsing Electrochemical TechniquesA.-M. Lafront, D. Dubé, R. Tremblay, E. Ghali, Department of Mining, Metallurgical and Materials Engineering,Université Laval, Quebec City, Quebec; C. Blawert and W. Dietzel, GKSS Research Centre, Geesthacht, Germany

The corrosion resistance of die cast and freely solidified or electromagnetically stirred thixocast AZ91D alloyhas been studied using electrochemical noise technique and electrochemical impedance spectroscopy in a 0.05 MNaCl solution. Specimens polished at different depths were immersed in the solution in order to assess the influ-ence of the microstructure on corrosion kinetics and morphology.At depths between 10 and 50 µm (skin), all spec-imens showed general non-uniform corrosion with the lowest corrosion resistance. Between 100 and 200 µm(interior skin), the observed corrosion was accompanied by superficial undefined pits due to metastable pitting.The corrosion form in the interior skins gave the best corrosion resistance. Stable pitting corrosion was observedbeyond 400 µm deep on the bulk specimens. The skin of all thixocast specimens prepared from both types of bil-lets showed a more corroded surface than that of die cast. On the other hand, the interior skin as well as the bulkof thixocast specimens showed better corrosion performance than that of the die cast specimens.

Creep Behaviour and Stress Analysis of a Seventeen-Year Service-Exposed Primary Super HeaterTube in a Thermal Power PlantA.K. Ray, National Metallurgical Laboratory, Jamshedpur, India; K. Diwakar, Department of Mechanical Engi-neering, National Institute of Technology, Jamshedpur, India; N. Roy, H.K. Das, J.K. Sahu and R.N. Ghosh,National Metallurgical Laboratory, Jamshedpur, India

The elastic, inelastic deformation and stress distribution pattern of a seventeen year service-exposed pri-mary super heater tube in a 120 MW boiler of a thermal powerplant have been evaluated by using both analyt-ical and numerical techniques. The commercial finite element computer code ANSYS® was used for stressanalysis. The methodology is a valuable design tool for development of new boiler tubes as well as for consid-ering the effects of numerous operating variables on creeplife. The health of the tube was also assessed basedon microstructure, hardness and a few conventional creep tests carried out at 500°C at various stress levels (40

Canadian Metallurgical QuarterlyVolume 47—Number 4

cmq abstracts

May 2009 | 87


to 177 MPa). Results revealed that there was not much variation in the microstructure and hardness of the serv-ice-exposed tubes compared to the virgin material. Creep deformation behaviour of the service-exposed and vir-gin tubes of the same material at 40 MPa revealed that deterioration of the creep properties fell within the 20%scatter band, which is well within the specified limits of ASTM standard. The service-exposed primary superheater tube is thus in a good state of health.

Damage Resistance of a Thermal Barrier Coated Super Alloy for Combustor Liners in Aero Tur-bines during Fatigue and CreepA.K. Ray, National Metallurgical Laboratory, Jamshedpur, India; B. Goswami, R.V.S. College of Engineering andTechnology, Jamshedpur, India; A. Kar, A.K. Ray, H.K. Das, P.K. Roy, National Metallurgical Laboratory, Jamshed-pur, India; S.B. Kumar, National Institute of Foundry and Forge Technology, Ranchi, India; and S.C. Bose,National Metallurgical Laboratory, Jamshedpur, India

This paper deals with an evaluation of the lifetime of a thermal barrier coated (TBC) C263 superalloy underfatigue and creep loading. Results revealed that both TBC and bond-coated substrate had higher endurance lim-its than the base alloy, while the opposite was found for high stress, low cyclic lifetimes. At high stress, the pre-mature failure for these two materials is possibly due to high stress crack initiation/growth in the TBC/bond coatlayers. Oxidation is the cause of the reduced life of the bare substrate as compared to the coated substrate whilefatigue and creep experiments are carried out in an oxidizing environment. During 800°C fatigue, the bare spec-imens behave differently from the coated specimens, but both the bond-coated only and bond coat + TBC spec-imens seem to exhibit very similar results that are within experimental scatter. Delamination of the bond coat,oxidation of the substrate and spallation of the ceramic layer were evident at very high fatigue and creepstresses. Lateral cracks that grew in the ceramic layer parallel to the stress axis were responsible for spallationof the top coat (TBC) at a very high fatigue stress, whereas, at low creep stress, spallation of the top coat wasdue to the growth of alumina scale (of thickness >3 µm) at the top coat (TBC)/bond coat interface.

Sliding Wear Response of Spheroidal Graphite Cast Iron as Influenced by Applied Pressure, Slid-ing Speed and Test EnvironmentB.K. Prasad, Advanced Materials and Process Research Institute, Bhopal, India

The present investigation pertains to the sliding wear response of spheroidal graphite (SG) cast iron in vary-ing test conditions. The wear rate increased with pressure in general while sliding speed produced a mixed influ-ence. Dry sliding caused the highest wear rate followed by one in oil and oil plus graphite lubricated conditions.The severity of frictional heating increased with pressure and speed. The influence of test environment on fric-tional heating was practically similar to that on wear rate. The operating wear mechanisms were observed to beadhesion associated with smearing of graphite particles and lubricating film formation. Microcracking also con-tributed to material removal, its severity being the highest in dry condition.

Technical Note: High Temperature Electric Conductivity of Pure SiliconS. Fan, Materials Science and Engineering, University of Toronto, Toronto, Ontario; G. Plascencia, Centre forResearch and Technical Innovation, CIITEC-IPN, Mexico City, Mexico; and T. Utigard, Materials Science andEngineering, University of Toronto, Toronto, Ontario

The electric conductivity of high purity silicon has been measured at elevated temperatures. Thin silicon rodswere heated in a horizontal electric resistance furnace up to temperatures of 1120°C. By passing a currentthrough the rods and by measuring the resulting voltage drop, the conductivity was determined in the temper-ature range from 550 to 1120°C. The data compare very well with reported literature values.

Excerpts taken from abstracts in CMQ, Vol. 47, No. 4.Subscribe—www.cmq-online.ca

cmq abstracts

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In the next issueThe supply chainWe take a look at the products, services andpeople that help power the mining industry.

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Uptime — strategies for excellence inmaintenance management

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voices from industry


Canada is occasionally referred to as a “global min-ing giant,” a phrase I always maintain is an under-statement. From our strong domestic base,

Canada’s mining industry has grown to straddle theglobe. Today, nearly 60 per cent of theworld’s mining companies are Canadianand these companies are active in over100 countries.

There is no question that our geol-ogy has played a major role in establish-ing Canada’s dominance, but an abun-dance of resources alone cannotaccount for the success of the industry.Our natural resources may be the foun-dation, but the powerful industry thatstands on that foundation would notexist without the systems and infra-structure that attract mineral and mineexploration and development, a positive

investment climate, a highly skilled workforce, strongresearch capacity, and the long history of innovativepublic geoscience that has made Canada a preferred tar-get for mineral exploration.

Canada’s mining industry has many strengths, but itwill take more than momentum to maintain our positionof leadership in the face of some serious challenges. Themost immediate of these is the impact of a global reces-sion that has affected almost all sectors of Canada’seconomy. Credit markets have tightened and, with fewexceptions, commodity prices have declined dramatically.As a consequence, many companies are moving to cuttheir operating costs and conserve cash.

During our government’s extensive pre-budget con-sultations, we heard again and again about mine cut-backs and closures and their impacts on local communi-ties. Having been born and raised in Cape Breton as thecoal industry was shutting down, these are stories I knowall too well. Our government has responded with anEconomic Action Plan that sets out the clear, decisivesteps we need to take to protect Canadians from theimmediate economic threat, while further strengtheningthe economic fundamentals essential to support long-term growth and prosperity. This includes initiatives toassist the people and communities that depend on themining industry for their economic well-being, as well asmeasures to position the industry for a strong recovery.

Our new Community Adjustment Fund will invest $1billion over the next two years in local efforts to exploreand develop new economic opportunities in communities

that have been most affected by the global restructuring.We have extended the 15 per cent Mineral ExplorationTax credit until March 2010, and the accelerated capitalcost allowance for business investments in machinery andequipment for another two years. We are furtherstrengthening our financial system with measures such asthe $200 billion Extraordinary Financing Network.

These initiatives will provide immediate benefitsand reinforce our government’s ongoing efforts to cre-ate one of the most competitive tax regimes in the G7 —by 2010, Canada will have the lowest overall tax rate onnew business investment of all major industrial nations.

To fully exploit the economic rebound that will occuronce demand for minerals and metals ramps up again,government and industry alike must continue to thinkand act strategically to address some longer term chal-lenges. Our government is moving to address these chal-lenges, which include: insufficient investments in R&Drepresenting missed opportunities to improve our produc-tivity, our environmental performance and the growingdemand for green technologies; uncertainty in the regu-latory system, which discourages investment and erodescost competitiveness; and base metal reserves in long-term decline. One example is the new five-year, $100 mil-lion public geoscience program that Prime MinisterHarper announced in Budget 2008 to map the mineraland energy resource potential of Canada’s North. Resultsof seven new surveys are available already.

After only a year in operation, the Major ProjectsManagement Office is providing overarching manage-ment of the federal regulatory review process for over 40projects. We are also supporting the industry’s efforts toexercise greater social and environmental responsibilitywith initiatives such as the “Green Mines Green Energy”research project launched by my department’s CANMETdivision.

Our recently released Corporate Social ResponsibilityStrategy provides tools and advice Canadian companiesneed to meet and exceed the unique social and environ-mental challenges they face when operating in develop-ing countries.

These are the investments — in people, in knowl-edge, in systems and in social and environmental respon-sibility — that are the key to assuring the strength of ourmining industry in both the short and long term. Withour ongoing commitment to partnership — between aninnovative industry and a responsive government — wecan assure that this “global mining giant” continues togrow in stature and importance. CIM

Maintaining Canada’s position as a global mining giantby The Honourable Lisa Raitt, Minister of Natural Resources

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Miners everywhere face similar challenges. Running a safe operation is your highestpriority. Nothing matters more. Meeting production and profitability targets is alsocritical. The pressure is always on to deliver more tons at a lower cost. Environmentalresponsibility is another key concern. We are all challenged to do the right thing,meeting demand for minerals and metals in a manner that sustains the earth. Caterpillarand your Cat® Dealer understand your priorities. We welcome the opportunity to put ourproducts, services and technologies to work in your operation. Together we canachieve all your business objectives—Mining safely. Mining more. Mining right.

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MININGSAFELY.

MINING MORE.

MINING RIGHT.

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