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FEATURES: Energy & Industry – How will Canadian energy producers transport resources to the global marketplace? | Oil sands miners seek solid footing in a time of change | The integrated environment monitoring plan | New supply of workers needed to meet growing demands | Metallurgical coal is gaining strength coast to coast

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Page 1: CIM Magazine September/October 2011
Page 2: CIM Magazine September/October 2011

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Page 4: CIM Magazine September/October 2011

4 | CIM Magazine | Vol. 6, No. 6

14

26

NEWS 14 Strength in numbers BC mining suppliers aim to

take advantage of global economy by C. Crawshaw

16 Not all are going with the flow Keystone XL andEnbridge pipelines spark controversy by V. Heffernan

18 A metamorphosis for Caterpillar Caterpillar’sacquisition of Bucyrus International gives it thebroadest product line in the industry by V. Heffernan

20 A helping hand The Red Cross thanks mineralsindustry leaders for their gift to Haiti by G. MacDonald

22 Number crunching the “soft” stuff New toolbrings financial language into community relationswork by H. Ednie

24 A holistic approach to mining’s critical issuesDoug Morrison has big hopes for modest funding by P. Braul

CONTENTS|CONTENUCIM MAGAZINE | SEPTEMBER/OCTOBER 2011 | SEPTEMBRE/OCTOBRE 2011

UPFRONT 26 Managing the work flow Calgary software firm

helps oil companies manage time and costs by R. Andrews

28 Social media and the extractive sectorManaging the risk and opportunity of onlinecommunications by C. Horvath

32 Truer grit The emerging market for faux moon dustblasts off by G. Lanktree

34 Deep freeze AMC is back, working on one of themost complex shaft-sinking projects in the worldby D. Zlotnikov

38 The secret to longevity Manganese removalprocess extends the life of Scully Mine by A. Lopez-

Pacheco

40 The earth moves for Caterpillar A Q&A withCaterpillar Global Mining Division’s vice-president ofsales and marketing by R. Andrews

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Page 5: CIM Magazine September/October 2011

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COLUMNS 68 Supply Side by J. Baird 70 MAC Economic Commentary by P. Stothart 72 Standards by D. Elliott 74 Metals Monitor by the staff of Metals Economics Group 76 Eye on Business by J. Lewis 77 Innovation by T. Hynes 78 HR Outlook by L. Forcellini 80 Safety by D. Laplonge

83 Aboriginal Perspectives by A. Lopez-Pacheco 85 Student Life by M. Tuters 88 Mining Lore by C. Baldwin114 Voices from Industry by B. Anderson

CIM NEWS 90 The next big steps Industry leader Pat Dillon talks

about upcoming “retirement” by H. B. George

92 Élever le M4S à un niveau supérieur M4Scible des groupes sous représentés dans l’industrie

94 Striving for balance Pierre Lassonde takes homeCIM award for visionary efforts by H. Ednie

95 Taking M4S to the next level CIM reaches out toindustry by M. Eisner

96 Invaluable experiences A once-in-a lifetime fieldtrip inspires life path for young geologist by H. Ednie

97 Bonds beyond borders CIM collaborates withinternational sister societies by N. Stubina

98 The age-old debate A Q& A with Klaus Kacy onmodern hoisting techniques by A. Lopez-Pacheco

HISTORY106 The foundations of modern economic

geology (Part 6) by R.J. Cathro109 Gold in Siberia: a historical essay by F. Habashi

IN EVERY ISSUE 8 Editor’s message 10 President’s notes / Mot du president 12 LinkedIn comments 91 Obituaries 97 Calendar105 Welcoming new members112 Professional directory

COMMODITY FOCUS 66 Burning ambition Natural gas has found a new life in the 21st century

by P. Braul

FEATURE | ARTICLE VEDETTEENERGY & INDUSTRY PLUGGING IN

ÉNERGIE ET INDUSTRIE ÉTRE AU COURANT

44 The energy exchange How will Canadian energy producers transport resources to theglobal marketplace? by D. Zlotnikov

51 A question of balance Oil sands miners seek solid footing in a time of change by E. Moore

52 Eyes on the oil sands The integrated environment monitoring plan by E. Moore

54 The HR question New supply of workers needed to meet growing demands by P. Caulfield

56 Industrial strength Metallurgical coal is gaining strength coast to coast by A. Lopez-Pacheco

60 Le marché de l’énergie Comment les producteurs canadiens d’énergie transporteront-ilsles ressources vers les marchés mondiaux?

62 Une question d’équilibre Les exploitants des sables bitumineux cherchent à s’établir depied ferme en ces temps changeants

64 Qualité industrielle Entrepreneurs et exploitants de charbon métallurgique ciblent lacroissance

Page 6: CIM Magazine September/October 2011

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Page 8: CIM Magazine September/October 2011

The extent of our dependence on energy is mostapparent when we are forced to do without it. All ofus have attempted to turn on the lights in the

depths of a power outage, admonished ourselves, thenrepeated the steps a short while later. Ironically, this energy-themed issue was laid out dur-

ing a massive power outage, compliments of HurricaneIrene. A perpetually tight production schedule, summerholidays and the Labour Day long weekend left a verynarrow window for producing the issue, so the folks atour terrific production company, Clò Communications,hooked up a gas-powered generator to help us make ourdeadlines. We were, of course, fortunate to have access to

a “Plan B” — a luxury that may be harder to come by for many as the ravenous globalappetite for energy resources becomes more and more difficult to satisfy. In what is surely CIM Magazine’s most expansive look at the Canadian energy

resource sector to date, our feature, “Plugging in,” is comprised of three complete arti-cles. In “The energy exchange,” Dan Zlotnikov takes a broad look at the logistical chal-lenges faced by the energy sector as it attempts to effectively move enormousamounts of material every day to hungry markets south of the border and overseas. In“A question of balance,” Eavan Moore provides us with an overview of the economic,social and regulatory backdrop against which Canada’s oil sands producers areattempting to develop and expand their operations. Finally, the metallurgical coal sec-tor’s attempt to keep pace with a global infrastructure boom and its enormous demandfor steel is front and centre in Alexandra Lopez-Pacheco’s article, “Industrial strength.”On the heels of Caterpillar’s US$8.8 billion acquisition of Bucyrus International,

the timing was ideal to chat with Christopher Curfman, Caterpillar Inc.’s vice-president of sales and marketing, Global Mining Division, for our Q&A on page 40.Curfman discusses how this global leader is expanding its capacity to keep pace withthe growing worldwide marketplace.This issue also contains vital details about a number of important conferences

being hosted and co-hosted by CIM. The preliminary program for the Symposium 2011on Mines and the Environment, to be held from November 6 to 9 in Rouyn-Noranda,Quebec, can be found on page 100. The list of plenary speakers and their topics forthe joint CIM/SME Safety and Reliability Conference, to be held from October 11 to13 in Calgary, Alberta, are available on page 75. Finally, be sure not to miss CIM president Chuck Edwards’ exciting announcement

about a significant development for one of the Institute’s societies in the “President’snotes” on page 10. In closing, just a reminder that the suggestions and feedback we receive from you

are an important fuel that powers CIM Magazine, so keep the emails coming!

Angela Hamlyn, Editor-in-chief

8 | CIM Magazine | Vol. 6, No. 6

editor’s letter

Editor-in-chief Angela Hamlyn, [email protected]

Section EditorsNews, Upfront and Features:Ryan Bergen, [email protected], CIM News, Histories and Technical Section:Andrea Nichiporuk, [email protected]

Technical Editor Joan Tomiuk, [email protected]

Publisher CIM

Contributors Brad Anderson, Richard Andrews, Jon Baird,Correy Baldwin, Louise Blais-Leroux, Peter Braul, HartleyButler George, R. J. Cathro, Peter Caulfield, Caitlin Crawshaw,Heather Ednie, Marlene Eisner, Dave Elliot, Lindsay Forcellini,Fathi Habashi, Virginia Heffernan, Tom Hynes, Celesa Horvath,Michel Laliberté, Graham Lanktree, Dean Laplonge, JoshLewis, Alexandra Lopez-Pacheco, Greg McDonald, EavanMoore, Staff of Metals Economics Group, Paul Stothart, NathanStubina, Michael Tuters, Dan Zlotnikov

Published 8 times a year by CIM1250 – 3500 de Maisonneuve Blvd. West Westmount, QC, H3Z 3C1Tel.: 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 905.886.6641Janet Jeffery, [email protected], ext. 329Neal Young, [email protected], ext. 325

This month’s coverOperations at Cenovus’s Christina Lake projectCourtesy of Cenovus Energy

Layout and design by Clò Communications.www.clocommunications.com

Copyright©2011. 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 in any discussion appearing in its publications.

Printed in CanadaKeep the mail coming! [email protected]

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Page 9: CIM Magazine September/October 2011

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Page 10: CIM Magazine September/October 2011

10 | CIM Magazine | Vol. 6, No. 6

president’s notesRepositioning CIM’s Environmental Society

Repositionnement de la Société de l’environnement de l’ICMnational et international et l’association par excellence en matière de gestion de l’environnement et de responsabilité sociale des industries des mines, des métaux, des matériaux et du pétrole.

Le rôle de la Société élargie englobera la facilitation de pratiques de gestion exemplaires dans l’ensemble des activités environnementales et interactions sociales des membres de l’ICM – des points de vue scienti-fique et technologique, en passant par les enjeux liés aux effets sociaux, la responsabilité sociale et les questions autochtones. Ce dernier point viendra appuyer le travail accompli au Centre d’excellence de la respon-sabilité sociale des entreprises, pour lequel l’ICM sert de secrétariat. La SERS encouragera et facilitera également la communication entre les personnes et les comités associés à d’autres sociétés de l’ICM, appuiera l’organisation de séances spécialisées pertinentes et fournira une inter-face pour l’échange d’idées et la collaboration dans le cadre de réunions conjointes et d’autres initiatives.

Il s’agit d’un formidable pas en avant pour l’ICM. Je vous encourage vivement à devenir un membre actif de la SERS et ainsi prendre part à la croissance de notre plus jeune société technique. Des nouvelles con-cernant la SERS seront régulièrement publiées dans les futurs numéros de CIM Magazine.

Chuck EdwardsPrésident de l’ICM

La Société de l’environnement de l’ICM a été fondée en 1998 pour servir de cadre d’échange de connaissances et de compétences entre les professionnels de l’environnement des industries minière, métallur-gique et pétrolière. En 2010, le conseil de l’ICM a noté que les activités de cette société de première importance étaient en déclin. Voilà pourquoi nous avons décidé de lui insuffler de la vigueur et du dynamisme en met-tant davantage l’accent sur la responsabilité sociale.

Dans ce but, un groupe de bénévoles dévoués a collaboré en vue de réaliser une analyse FFPM (forces, faiblesses, possibilités et menaces) et d’élaborer une charte visant à mieux définir le rôle et le mandat de la Société.

Lors de la réunion du conseil de l’ICM tenue en août dernier, l’établissement de l’Environment and Social Responsibility Society (ESRS) (Société de l’environnement et de la responsabilité sociale (SERS)) a été officiellement approuvé. Les principaux objectifs de la SERS sont : accroître la pertinence et la présence de l’ICM à l’échelle mondiale en ce qui concerne la gestion environnementale et la responsabilité sociale dans le secteur minier; augmenter le nombre d’adhésions et encourager une participation accrue aux activités de l’ICM; inspirer, encourager et coordonner des activités axées sur l’environnement et la responsabilité sociale au sein de l’ICM et de ses sociétés; et promouvoir et transmettre des pratiques exemplaires en matière d’environnement et de respon-sabilité sociale. L’objectif ultime est de faire de l’ICM le facilitateur

and coordinate environmental and social responsibility activities within CIM and its societies; and to promote and disseminate environmental and social responsibility best practices. The ultimate goal is to position CIM as the national and international facilitator and “go-to” association for environmental management and social responsibility for the mining, metallurgy, materials and petroleum industries.

The role of the expanded Society will include the facilitation of best management practices across the spectrum of CIM members’ environmental activities and social interactions – from a scientific and technological focus, through to that of social impact issues, social responsibility and Aboriginal/indigenous affairs. The latter will comple-ment work being done at the Centre for Excellence in Corporate Social Responsibility, for which CIM serves as Secretariat. The ESRS will also encourage and facilitate communication between individuals and com-mittees associated with other CIM societies, support the organization of appropriate technical sessions, and provide an interface for the exchange of ideas and cooperation in joint meetings and other ventures.

This is a wonderful step ahead for CIM. I urge you to become an active member of the ESRS and contribute to the growth of our newest technical society. CIM Magazine will provide regular ESRS updates in future issues.

Chuck EdwardsCIM President

The Environmental Soci-ety of CIM was founded in 1998 to provide a forum for the exchange of knowl-edge and skills between environmental professionals in the mining, metallurgical and petroleum industries. In 2010, the CIM Council noted that the activities of this key society were waning and we decided to rein-vigorate and revitalize it with an added focus on social responsibility.

To accomplish this, a group of dedicated volunteers

collaborated to complete a SWOT (strength, weakness, opportunities and threats) analysis and drafted a charter to better define the role and mandate of the society.

At the CIM Council meeting held this past August, the establishment of the Environment and Social Responsibility Society (ESRS) was officially approved. The main objectives of the ESRS are: to improve the global relevance and presence of CIM in environmental management and social responsibility aspects related to mining; to encourage increased membership and participation in CIM activities; to inspire, encourage

Page 11: CIM Magazine September/October 2011

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Page 12: CIM Magazine September/October 2011

12 | CIM Magazine | Vol. 6, No. 6

When things go wrong, how can miningcompanies make it right? Grievance mechanism key to building good mine-community relations: June/July 2011, Vol. 6, No. 4, p. 22

I think it’s very important to start your community consultations asearly as possible, even before you start exploration in the area. Themines that are the most successful are ones that start with a sustain-ability plan from day one and consider the mine’s impact socially,environmentally and financially ... This process must start very early,as in some cultures, it can take years to build relationships with thelocal stakeholders. I’ve seen too many companies hold a series ofmeetings with the local community over three months and think,“That’s it – community consultations done ... next!” That just doesn’twork ... you need to invest a lot of time and have continuity in rela-tionships.

In many cases, a new mine in a region will radically change the livesof the stakeholders, so you need to spend the time upfront makingthe case for a net benefit to the local people. Otherwise, they will seeit as a big company coming in, sucking the resources dry and mak-ing lots of money while the locals suffer.

Zachary Brown, hsE Manager, BhP Billiton, London, united kingdom

Putting it in the context of Africa, where more often than not there isa wide disconnect between officialdom and the local communities,licenses are granted normally without the knowledge of the commu-nities (these are mostly highly deprived of basic social amenities likeaccess to roads, health, water, etc). This lack of provisions generatesnegative sentiments within the population and tends to be directedtowards the mining company ... For the mining company thus tosucceed, it has to work hard to erode the perception of being in bedwith the government to deprive them of their livelihood and rather[strive to be seen as] an agent of change. This is where most miningcompanies get it wrong. Cultural diversity and mutual respect shouldsubstitute legality and logic. Each geographical location has its ownrisks and opportunities, and the one who commits effort in workingon social license becomes the winner.

Alex Hagan, Geology Manager, Avocet Mining Pty (sMB), Burkina Faso,Africa

I like Alex’s comment on companies being agents of change and Iwould go even further to have them understand they can be agentsof preservation as well ... Companies need to understand a commu-

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CIM gets LinkedInCIM’s LinkedIn group providesenlightening feedbackCIM currently boasts over 2,000 members on LinkedIn. Join ustoday and get involved in the compelling dialogue.

Below are a few of the myriad LinkedIn comments received dailyin response to CIM Magazine’s editorial topics.

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nity also wants to preserve its identity and way of life and must seehow mining can help or prevent this goal ... As well, it is important tofirst understand who you are dealing with: what is their history, theirrelation to the land, their fears, but also their hopes and aspirations.I have sat on both sides (First Nations and industry) in mining proj-ects and so often find that companies rely on third parties (legalcounsel, etc.) rather than making the effort to know communities. Itis first and foremost a trust issue...when problems arise, the chancesof people working to solve them together increases. If not, then theblame game starts and it’s a tiring and long-term effort to rebuildtrust ... We should never underestimate the need for a community toproperly understand our actions. The worst thing we can do is bedismissive about concerns and tell them there is no risk. Communi-ties have often been dealing with the negative effects of “no risks”for generations and still associate today’s actions with yesterday’slegacies ... I don’t think there is a unique recipe but there are keyingredients, namely, respect, patience, transparency and accept-ance. I have found too often, sustainable development [companies]come in thinking they know what a community needs. That is thebiggest mistake you can start off with.

Andy Baribeau, Management Consultant, Aboriginal Affairs, Quebec

What to do when a workplace injury occurs?What to do when a workplace injury occurs: June/July2011, Vol. 6, No. 4, p. 52

I agree that the goal of any investigation should be to determine theroot cause of the accident and determine if there are reasonableways to prevent a reoccurrence. I believe in the philosophy of zeroharm but don’t believe it is possible [to achieve] over a long periodof time. All activities have risk. It’s our job to reduce that level of riskand exposure to risk as much as is reasonably possible. I’ve seenmany knee jerk reactions to accidents, such as someone gets hurtusing a pry bar, so the solution is to ban pry bars. The tool used isnot necessarily the root cause, perhaps proper training is needed orengineering controls to eliminate the situation that necessitatedusing the tool? Without true root cause analysis, the same situationwill very likely reoccur.

Dave Felsher, Chief Mineral Processing Engineer, Lakeshore Gold, Ontario

Page 13: CIM Magazine September/October 2011

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Page 14: CIM Magazine September/October 2011

news

14 | CIM Magazine | Vol. 6, No. 6

With British Columbia’s forestryindustry waning, many are looking tothe mining sector to fill in the eco-nomic gaps. Fortunately, global trendsfavour a major comeback in the min-ing industry, particularly the highprice of gold and Asia’s growingappetite for fossil fuels.

In the last few years, a handful ofnew mines have opened in BC andsome decommissioned mines havebeen revitalized. “I would call it theearly tremblings of a boom,” saidKevin McCormack, BC mining prod-uct manager at A.J. Forsyth.

The 102-year-old company, a Cana-dian subsidiary of Russel Metals Inc.,is banking on a mining resurgence.Based in Prince George, BritishColumbia, the company makes metalproducts for manufacturers of heavyequipment. Five years ago, manage-ment opted to move away fromforestry and towards mining.

“Being in BC, the forest industrywas everything for years and years,”explained McCormack. “We could seethe forestry industry slowing down,

Strength in numbersBC mining suppliers aim to take advantage of global economy

By Caitlin Crawshaw

and at the same time, we saw that min-ing was having a resurgence.”

To connect with the industry andhelp with efforts to open more mines inthe province, in 2006, A.J. Forsyth

joined the Mining Suppliers Associa-tion of British Columbia (MSABC).Formed in 1986, MSABC is a non-profitassociation affiliated with the MiningAssociation of British Columbia

Patty Moore, chair of MSABC, hopes that new mining operations in BC such as the Copper Mountain Mine (above)will be catalysts for growth in the mining supply sector, and inspire its members to become more active inpromoting the minerals industry.

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Page 15: CIM Magazine September/October 2011

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September/October 2011 | 15

(MABC) comprised of suppliers, con-tractors and consultants that endeavorto raise the profile of the mining indus-try and promote the development of asustainable mining industry in BC. Tothat end, it frequently partners withMABC to lobby government for thecreation of new mines and to changepublic perceptions through initiativeslike BC Mining Week and Mining forMiracles, a fundraising effort for BCChildren’s Hospital.

Even though a few new mineshave opened in recent years, MSABCchair Patty Moore noted that thereare plenty of barriers standing in theway of industry growth, includingthe public’s perception of mining.“We have to convince the public atlarge of the importance of mining forthem to understand and perhaps notbe so judgmental,” she said. “Miningtoday is a whole different ball gamethan it was 100 years ago. Companiestake sustainability and the environ-ment very seriously.” She pointed outthat both MSABC and MABC areinvolved with the Mining Associationof Canada’s Toward Sustainable Min-ing initiative, which works topromote more sustainable practicesin the mining and mineral processingindustry.

Moore feels that collaboration iscrucial to strengthening MABC andthe industry as a whole. “My vision isto continue to work closely withMABC and other associations such as AME BC [Association of MineralExploration BC] to further advancethis vital industry,” she said. “To thatend, I would like to see our member-ship at least double in the next fewyears. Through our close to 200member companies, we already represent about 25,000 employeesthroughout the province, which is asignificant supporting voice for ourindustry. You can just imagine theimpact we would have if we coulddouble that amount. The potential isdefinitely there to do so.”

The strength that comes from aunified vision will be vital, as Cana-dian suppliers increasingly lookoutside our borders for new and

developing markets. A case in pointis Knelson, based in Langley, BritishColumbia, which manufacturersequipment for mines around theworld. Currently, its biggest andfastest growing market is Russia, butChina and other Asian countries arealso buying the company’s products.British Columbia represents only fiveto 10 per cent of Knelson’s equip-ment sales, and Canada representsabout 15 to 20 per cent, explainedDoug Corsan, the company’s vice-president, international sales. Ofcourse, this could change. “We’veseen a real surge of the number ofexploration projects that have beenactive,” he said.

Unfortunately, the soaring Cana-dian dollar and high cost ofmanufacturing in BC have provenchallenging. Government regulationshave also created barriers for growth.“I’m not saying it’s necessarily wrongthat we have these regulations, but aninvestment dollar will go where itthinks it can get the best return,” said

Corsan. He noted that it can be hard toattract investors to mining projectsthat can take 10 years to come tofruition.

Miscommunication between gov-ernment departments can sometimesfurther slow down the process. “You’vegot four or five government bodiesthat are involved at various stages ofdevelopment and they don’t seemcoordinated,” Corson said.

McCormack agrees that theprocesses can be slow, but he is opti-mistic this will change. “I know theMSABC is working hard with the gov-ernment to come up with ideas tostreamline the process,” he said. Forall the challenges ahead, McCormackis convinced that BC’s mining industryis on the verge of a major growthperiod. “I think the demand is going tostay strong in Asia and as long as thathappens, you’re going to see newmines in BC,” he explained. “The con-ditions are right for new mines – wejust have to get through theprocesses.” CIM

Canada 1 800 414 [email protected]

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Page 16: CIM Magazine September/October 2011

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16 | CIM Magazine | Vol. 6, No. 6

The controversy over trans-porting crude from Alberta’s oilsands is becoming increasinglycomplex as awareness of thepotential environmental, politi-cal and safety consequences ofbuilding new pipelines grows.

In the United States, the spot-light rests on TransCanadaCorp.’s Keystone XL, a $7 billionpipeline that would carry up to900,000 barrels of crude per dayfrom Alberta to refineries on theGulf Coast of Texas. The U.S.State Department will decidewhether or not it will approvethe project in November, afterissuing a final environmentalimpact statement.

In Canada, Enbridge plans tobuild a dual pipeline runningfrom the oil sands to the coast atKitimat, British Columbia, thatwould carry crude oil westbound forexport to China and California, andnatural gas condensate eastbound. The1,170-kilometer, $5.5 billion NorthernGateway pipeline proposal is undergo-ing a lengthy public regulatoryprocess.

Although each would create thou-sands of jobs, millions of dollars in taxrevenues and billions of dollars of eco-nomic stimulus, both pipelines facestrong opposition. According toDanielle Droitsch, director of U.S. pol-icy, Pembina Institute, the Keystone

XL proposal has sparked “a massivedebate” in the United States onwhether the country should increaseits dependency on oil, particularly oilthat is a major source of carbon emis-sions. In Canada, the strongestresistance is coming from FirstNations groups because NorthernGateway would cross much of theirtraditional land and threatens to dis-rupt wildlife habitats.

After a few significant spills frompipelines over the past year (includ-ing from Keystone, the precursor to

Keystone XL), there is increasingconcern about spills and accidents onboth sides of the border, particularlybecause the crude from the oil sandsis inherently more corrosive thanother types of crude. “The pipelinesafety concern is a new and emergingissue that started in the U.S.,” saidDroitsch, “and I'm sure you’ll start tohear similar concerns around theGateway pipeline.”

Both TransCanada and Enbridgesay that they have taken extensivemeasures to minimize the risk of spillsand mitigate potential impacts. Theyemphasize the benefits of their proj-ects, including reduced dependencyon politically unstable countries in theMiddle East.

“Keystone will create 20,000 jobs inthe U.S. and Canada, but mostly in theU.S., and inject $20 billion into theU.S. economy,” said Terry Cunha,team leader of TransCanada’s commu-nications and media relationsdepartment. “It will reduce the importof crude from Libya and the rest of the

Not all are going with the flowUpdate on Keystone XL and Northern Gateway pipelines

By Virginia Heffernan

PIPELINE KEYSTONE XL NORTHERN GATEWAY

Owner TransCanada Corp. Enbridge Inc.

Destination Gulf of Mexico BC Coast

Length (km) 2,673 1,172

Capacity (bpd) 900,000 525,000

Cost (C$ bn) 7 5.5

Decision to proceed November 2011 Mid-to-late 2013

The Keystone XL pipeline would significantly expand the capacity of the existing Keystone system which carries nearly halfa million barrels per day of Canadian crude oil to refineries in the central United States.

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Middle East by 40 per cent.” And theU.S. may need the supply. The Supple-mental Draft of the EnvironmentalImpact Statement (SDEIS) said thatwithout Keystone XL, Gulf of Mexicorefineries will face a shortage of crudein both the short- and long-term, assupply from traditional sources inMexico and Venezuela dwindles – agap that would otherwise be filledwith oil from the Middle East.

Other critics argue that TransCanadahas disregarded environmental con-cerns by choosing the shortest route,one that would take the pipelinethrough a large wetland ecosystem inthe Sandhills in Nebraska and throughthe Ogallala Aquifer, a significant fresh-water reserve. “The route we’re takingis the shortest, but it also has the leastamount of impact when it comes to the number of landowners, wildlife and the number of water bodies, plus a variety of other environmental considerations,” said Cunha. WhereasTransCanada is wrapping up the regu-latory review of Keystone XL, Enbridgeis at a relatively early stage in theprocess, with a Joint Review Panel deci-sion at least two years away.

Meanwhile, several environmentaland First Nations groups are voicingtheir opposition to Northern Gateway,most recently, 35 Dene chiefs fromAlberta and Canada’s North. “But theyare far from a majority of stakeholdersalong the proposed right of way,”claimed Paul Stanway, communica-tions manager, Enbridge NorthernGateway Pipelines.

The company has promised tosupport Aboriginal businesses in theregions affected by the pipeline, hireAboriginal workers and give FirstNations groups a 10 per cent equitystake in the pipeline, but only a fewgroups have accepted the benefitspackage so far. “First Nation’s opposi-tion to Gateway could potentiallycreate a barrier to the development ofthis pipeline – enough to stop it,” saidDroitsch. “That’s because the FirstNations have a considerable amountof power, especially in BC, where theyhave not yet resolved their landclaims.” CIM

Team effort on northern pipelinesBy Virginia Heffernan

The federal government is teaming up with Alberta’s two main universities toresearch emerging technologies in pipeline materials science, particularly for pipelinesthat will pass through northern Canada. The research agreement between CANMET,the University of Calgary and the University of Alberta will give professors of materialsscience adjunct scientist status at CANMET’s new Materials Technology Laboratory(MTL) in Hamilton, while CANMET scientists will have reciprocal professor status at thetwo western campuses.

“The goal is to strengthen the working relationship between CANMET-MTL staffand researchers at both the University of Calgary and the University of Alberta,” saidRon Hugo, head of the department of mechanical and manufacturing engineering,Schulich School of Engineering, University of Calgary. “The projects will be of a naturethat will assist Canada's industry with the design, construction and operation ofpipelines within Canada,” he explained.

The researchers will focus on pipelines proposed for the North where moreextreme environmental conditions exist, such as the proposed Mackenzie Valleypipeline that would transport natural gas from the Beaufort Sea through the NorthwestTerritories to hook up with gas pipelines in northern Alberta.

Although the scientists are still developing their research questions under the col-laboration, Hugo said they will be looking at some of the challenges of building andmaintaining northern pipelines. This includes factors such as the temperature effectscaused by thermal expansion, or pipeline settling in areas where warmer fluids in thepipeline can thaw the permafrost.

Potential research areas could include studying the impacts of thermal expansionor variable settling on the operating characteristics of the pipeline, including thebehaviour of welds, the performance of external protective liners and the amount ofbending strain in the pipeline.

September/October 2011 | 17

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Growing demand for com-modities has convincedCaterpillar to sink several bil-lion dollars into the miningindustry to secure its place asthe supplier of choice tomines around the world. Thecompany’s recently completedUS$8.8 billion acquisition ofMilwaukee-based BucyrusInternational gives CaterpillarGlobal Mining the broadestproduct line in the industry; itwill invest another $5 billionto upgrade plants and developproducts to cover the gamutof underground and surfaceequipment, including drills,trucks, drag lines and haulers.

“We’ve been trying to getto this point for the past fiveyears, but we were a big fishin a little pond,” vice-presi-dent of sales and supportChris Curfman told membersof the global mining pressgathered at Caterpillar’s newdivision headquarters in Mil-waukee in August. Before the Bucyrusacquisition, Caterpillar products rep-resented just 23 per cent of the miningequipment field. Now mining opera-tions will become “a sea of yellow,” he said.

Initially, Caterpillar planned a slowintegration of the Bucyrus brand withCaterpillar over a three-year period,but several customers requested aninstant rebrand. So from now on, allBucyrus equipment will sport Cater-pillar’s distinctive yellow paint and Cat logo.

It is too early to judge how theBucyrus acquisition will affect othermine suppliers such as Atlas Copco,Joy Global and Komatsu, but Caterpil-lar is aiming to at least double itsmarket share over the next few yearsby providing a one-stop shop for all

A metamorphosis for CaterpillarAcquisition of Bucyrus one element of a larger aggressive growth strategy

By Virginia Heffernan

mining equipment, and leveraging itsreputation for exceptional productsupport. “It was our mining cus-tomers that asked us to do this,” saidSteven Wunning, president of theglobal mining division. “They wantfewer larger suppliers to share in thebusiness risk.”

The hardest nut to crack will be theunderground mining market, whereJoy Global and Sandvik dominate. Inthis sector, Caterpillar sees opportu-nity in where the government isaiming to consolidate about 25,000smaller mines into 4,000 much largeroperations by 2013.

Currently, Caterpillar’s room-and-pillar mining systems are used byseven of the top 10 coal producers inthe United States, but the companysees future growth in India, Russia and

Australia. The same markets may alsobe receptive to Caterpillar’s highwallminers that have the ability to link sur-face and underground operations, butare currently used almost exclusivelyat operations in the U.S.

Perhaps the biggest challenge forCaterpillar will be to build marketshare in hard rock mining systemsthat require LHD vehicles and jumbodrills, not traditional strengths for asupplier dominant in the coal sector.“Hard rock is an area that both Catand Bucyrus have played with butnow, with all of our different prod-ucts, our dealers and our financialstrength, we will be investing in thisarea and we will be a much strongerplayer in the next few years,” saidLuis de Leon, vice-president of themining products division.

18 | CIM Magazine | Vol. 6, No. 6

A dragline under construction at Caterpillar’s Milwaukee facility, one of the many assets the company acquired with itspurchase of Bucyrus.

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The company is already makingimprovements to the AD55 ore haul-out vehicle and the R1600underground mining loader, andplans to launch a new undergroundloader in the fourth quarter of 2012.Another new underground productdesigned to provide automated con-tinuous flow at block cavingoperations, resulting in lower costsand reduced need for diesel engines,will have its commercial debut at acopper mine in Chile in 2013.

An indication of Caterpillar’sstrength in surface mining is its fleet of10,000 mining trucks, a milestonereached just this year. And unless thereis a major correction in the world econ-omy, that number could reach 15,000in the next few years as Caterpillar tapsinto unrealized potential outside of itstraditional markets in North Americaand Australia and spends $600 millionon plant expansions.

Executives from four separateCaterpillar dealers, includingFinning Canada, were on hand inMilwaukee to comment on theBucyrus acquisition and explain whatit will mean for their businesses.“This is a huge win for us,” said DaveParker, president of Finning Canada.“It instantly gives us a new line ofproducts that we’ve been missing.”Finning is a major supplier to

September/October 2011 | 19

companies mining the oil sands inAlberta, where Bucyrus has facilitiesin Edmonton and Fort McMurray.

Carter Machinery CEO Jim Parkercalled the deal a “game changer” for hiscompany, which supplies coal opera-tions in Virginia. “A lot of our companiesare moving underground because of per-mitting challenges and they are lookingfor product support,” he said. “The Catsystem will provide it.” CIM

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Fortune Minerals Limited has added two new members to its project developmentand engineering teams at its head office. Michael De Carlo was appointed projectmanager and Keith Lee is the new senior process engineer. De Carlo has more than40 years of project management and engineering experience, including 22 years insenior manager positions. Lee has 25 years experience in the mineral processingindustry that includes design, construction and operation of mineral treatment facil-ities for base metal and gold projects.

MOVING ON UP

Page 20: CIM Magazine September/October 2011

20 | CIM Magazine | Vol. 6, No. 6

A helping handBy Greg MacDonald

Scattered on the table before Saley Lawton and Ed Thompson are the hundreds ofbusiness cards that attendees used to write their pledges of support to the Red Cross.

Top Canadian Red Cross officials gathered in Toronto onAugust 19, 2011, to thank leaders of the Canadian mineralsindustry for giving almost $1 million to support relief effortsin Haiti. “I have often said one person can make a difference”said Ron Kalusky, director general of the Canadian RedCross. “We’re here today to celebrate what a group of peoplecan do. Thank you for making a difference in Haiti.”

In January 2010, leaders of the mining industry openedtheir wallets at the Canadian Mining Hall of Fame (CMHF)Induction Banquet – the day after the devastating earthquakehit Haiti – to support Red Cross relief efforts in that country.The catastrophic earthquake killed an estimated 220,000people and left more than a million people homeless. TheCMHF dinner was the single largest fundraising event forHaiti in Ontario.

The Red Cross gave distinct recognition to Saley Lawton,former director of communications with the Prospectors &Developers Association of Canada (PDAC), and Ed Thomp-son, treasurer of the Canadian Mining Hall of Fame andPDAC awards committee chair, for spearheading thefundraising effort. Both received the Red Cross’s distin-guished Partners in Humanity award. “I’ve worked in themining industry for 25 years and I’ve seen first-hand howwilling mining people are to help,” said Lawton, who retiredfrom PDAC in June. Thompson agreed with Lawton’s assess-ment. “We [miners] endeavour to improve the lives of thosewho live close to our operations the same way the Red Crossdoes,” he said.

Lawton said that she and Thompson made their fundrais-ing appeal “the simple way.” They asked master of ceremoniesPierre Lassonde to rally the crowd to help Haiti and thenreceived 200 business cards with pledges written on the back.Lawton then followed up and said “everyone came through.”

“Sometime between the soup and dessert we raised$900,000,” said Thompson. CIM

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Page 21: CIM Magazine September/October 2011

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Page 22: CIM Magazine September/October 2011

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The integration of community rela-tions and sustainability initiatives intothe development plans of miningoperations has become nearly stan-dard industry practice. Although fewcan doubt the positive social and envi-ronmental impact of these programs,determining the return on theseinvestments has remained largely elu-sive. A new tool developed formining, oil and gas operations aims tochange that.

The Financial Valuation Tool forSustainability Investments (FV Tool)was developed to measure the financialcontribution – positive or negative – ofa sustainability/community initiative tothe value of an extractive project. “Wealways have to put forward a budget

Number crunching the “soft” stuffTool means greater rigour for sustainability investment planning

By Heather Ednie

for community or sustainabilityinvestments, but often, it’s virtuallypulled out of the hat,” said ClaudePerras, director of community rela-tions in global practice at Rio Tinto.“There’s a lack of proper rigour to theprocess. This tool brings that rigour.By bringing financial language intocommunity relations work, we’reequipped to defend the budget ration-ale, demonstrating the value of ourinvestments.”

The tool is the result of the collabo-rative efforts of the InternationalFinance Corporation (IFC), Rio Tintoand Deloitte, with support from IFC’sOil, Gas and Mining Sustainable Community Development Fund(CommDev), the Multilateral Invest-

ment Guarantee Agency of the World Bank Group (MIGA) and the Norwe-gian Ministry of Foreign Affairs. Aswell, Newmont Mining and CairnEnergy have participated in testing the tool.

“Using this tool helps internalstakeholders within companies priori-tize what they are funding and why,”said Veronica Nyhan Jones, socialdevelopment specialist in the Sustain-able Business Advisory of IFC. “Theprocess helps build relationshipsacross an operation and ensures thatcommunity perceptions of benefit arefactored into decision-making, whichonly strengthens relationships withexternal stakeholders.”

The FV Tool helps decision-makerschoose the best portfolio of sustain-ability investments and gives them aclearer idea of how much of a returnthose investments will bring. Thedesktop software quantifies twodimensions of the financial value of aninitiative: value creation, also knownas the traditional cost and benefitanalysis, and value protection, theamount of sustainability-related opera-tional risk (e.g. delays in construction,disruption in production, etc.) that ismitigated by the sustainability/com-munity initiative.

“The quality of the results is ofcourse highly dependent on the qual-ity of the input data,” explainedVincent Blais, manager of global commodity transacting and risk man-agement at Deloitte. “Some of theinput information is based on the con-sensus of working groups. It istherefore important that experts on theground across different functions areinvolved in this process. Given theirdeep knowledge of the project, theircontribution to defining and refiningthe cost, benefit and risk estimates isexpected to be significant.”

22 | CIM Magazine | Vol. 6, No. 6

Simple messaging solutionBy Heather Ednie

Cairn Energy piloted the FV Tool in 2010 at its Rajasthan project in India, which fea-tures a 670-kilometre-long export pipeline that is set to become the world’s longestcontinuously heated and insulated pipeline. The tool successfully demonstrated thepositive return of various sustainability investments at the project.

The Cairn Farmer SMS Program, in partnership with Reuters, involved equipping10,000 farming families along the pipeline with SMS chips for their mobile phones.Farmers were able to access information about market prices, weather conditions, etc.that would enable them to increase productivity and income. Farmers, inspired bygood relations with the company, informed them about any issues involving thepipeline, such as leaks or sabotage. As a result, Cairn could react immediately andavoid major damage and repairs, saving costs to the company. Additionally, the phonescould be used for direct communications with the farmers via text messaging to helpresolve complicated logistical challenges faced in widespread rural regions.

Cairn’s FV Tool pilot demonstrated that the sustainability investments offered not onlyvalue creation for the farmers – as they were able to make more informed decisions– but also a number of indirect value protection elements for the company as well. Forexample, five cases of pipeline security issues were reported by farmers, enablingCairn to respond early and avoid damages that could stop crude flow. In one suchcase, a one-day shutdown that would have cost the company millions was avoided.

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According to Blais, to generate a valuation of sustainability investments,the user needs to go through the fol-lowing steps:• Gather relevant project data and

information. Examples wouldinclude projected revenues and costover the life of the project, and thestart and end of project phases(construction, production, etc).

• Identify sustainability/communityoperational risks that could poten-tially impact the financial value ofthe project. These risks need to bemodelled, and the user will beasked to enter the likelihood(annualized rate of occurrence) andmagnitude (one time or recurringcosts, lost revenues) estimates.

• Design sustainability/communityinterventions to mitigate some ofthese risks. The direct costs andbenefits of these interventions needto be entered in the FV Tool.

• Interpret and understand theMonte Carlo simulation results.The FV Tool generates a cost andbenefit analysis of the sustainabil-ity/community portfolio and anNPV report enabling the users tounderstand which risk impacts pro-jected project cash flows, when andby how much.The application provides a smart

platform for entering all pertinentinformation into the equation. How-ever, the process of generating thenecessary data is significant, requir-ing a third party-moderatedexercise. Aside from Deloitte, IFCwill be training implementers and asmall group of consultants that willbe able to offer instruction to com-panies and organizations that wantto apply the tool.

At Newmont, the experience ofutilizing the tool at its operations inGhana has been so positive that thecompany is planning a major trainingprogram to equip facilitators andengrain the process throughout itsGhanaian operations – and poten-tially across Newmont operationsworldwide.

“The FV tool helps establish anunderstandable business case and acommon business language aroundcommunity investment,” saidNicholas Cotts, regional vice-presi-dent and director of environment andsocial responsibility with NewmontGhana. “Integrating the use of thetool into the business planningprocess will require a shift in culturewithin the overall business. Not onlywill the social responsibility teamneed to understand how selectedcommunity investments link to man-aging business risk or creatingbusiness value, but the operationsand finance teams will need to under-stand those linkages as well. This is astep change in the business – achange that will help bring down thesilos and facilitate cross-functionalengagement.”

Currently, a more formal processfor utilizing the FV Tool is underdevelopment, aimed at easing the

learning curve for companies begin-ning to employ the tool and process attheir sites. Meanwhile, the tool isavailable online, having gone throughformal quality assurance testing byDeloitte and the other partners. IFCand Deloitte are presently helping toapply it at Rio Tinto’s Oyu Tolgoi proj-ect in Mongolia.

“The pilots have demonstratedthat the whole process of getting tothe end results, which includes dataacquisition and internal discussions,is as valuable as the actual valuationresults,” said Isabelle Gagnon, man-ager of the Sustainability andClimate Change Group at Deloitte.“It was designed to facilitate deci-sion-making and to be used in adynamic manner” she explained. “Ithelps you test different possibleimpacts of risk on your projects, totrigger interesting discussions. It’s adecision-making support tool, not amagic number.” CIM

September/October 2011 | 23

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Page 24: CIM Magazine September/October 2011

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24 | CIM Magazine | Vol. 6, No. 6

A holistic approach to mining’s critical issuesMining research chair takes aim at the future

By Peter Braul

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What would you do with$823,000? In the mining world,that is not generally considered alot of money, but Doug Morrisonhas big hopes for the funding hewill receive as the new researchchair for holistic mining prac-tices at the Centre for Excellencein Mining Innovation (CEMI) inSudbury.

Holistic mining practices, saidMorrison, are those that payattention to “small projects thatwill all link together to make a

much more sustainable solution possible.” He hopes that theresearch chair will “act as an incubator” that provides a bitof seed funding to determine if an under-researched areacould become a major project a few years down the road.

Sudbury MPP Rick Bartolucci announced in July that theprovincial government would provide the funding to CEMIin hopes of finding new ways to “capitalize on our miningknowledge,” and to foster innovation in the long term. The

funding was provided through the Northern Ontario Her-itage Fund Corporation, under its Emerging Technologyprogram.

Morrison has already begun collaborating withresearchers at universities across Canada and around theworld, and climate change has emerged as one of the mostimportant focal points. “Once the mines recognize that thereis a critical issue, we need to be coming up with solutions rel-atively quickly,” said Morrison.

There is much work to do, as climate change-related issueshave already begun affecting mines worldwide. For example,in Northern Ontario, there has not been enough snowmeltthis year to suppress the dust in the tailings areas. Conversely,unprecedented flooding is affecting other mining regionsaccustomed to drought.

The research chair will be re-evaluated in five years, andMorrison hopes to know by then if his approach yields results.He admits not all of the projects are expected to have dramaticimpact. “If it’s a research project, in some cases we’re going toinvest in [something] that doesn’t turn out to be a success,” hesaid. On the other hand, if just one mine’s problems are solvedin advance, a little foresight could prove invaluable. CIM

Doug Morrison

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Page 25: CIM Magazine September/October 2011

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26 | CIM Magazine | Vol. 6, No. 6

Operators cannot afford to let delays and missed dead-lines slow production down. However, keeping adynamic project with countless interconnected ele-ments moving forward is a complex challenge. It is

one that Resource Energy Solutions (RES) has taken on, andthe Calgary-based IT/software company is intent on chang-ing the face of financial and project management for the oil,gas and mining industries.

Since buying the small company in 2006, president andCEO Trent Marx has been selling his suite of software prod-ucts to some of the world’s leading mining and energygroups. Clients include BHP Billiton, Potash Corporation,K+S Aktiengesellschaft, Oilsands Quest, PetroBakkenEnergy, TransCanada, Pace Oil & Gas and Tundra Oil &Gas. They are all using RES software to track project activi-ties, monitor costs and improve field reporting, whileenhancing accountability and workflow.

Most recently, the company was awarded a large contractwith BPMIGAS, Indonesia’s state-controlled oil and gas com-pany. RES is developing a customized workflow, budgeting,planning and financial reporting system to help the nationtrack one of its primary revenue sources.

Right place, right timeThe company’s flagship product, Wellman, began as a

simple field reporting tool used by a few small companies.It has since evolved into a comprehensive system thatenables field workers and office staff to track costs and

manage data for the entire life cycle of a well –from its geology, construction and drillingthrough to completion and land reclamation.Wellman was developed more than 15 yearsago in response to an industry demand for amore efficient, cost-effective solution to storeand synchronize data.

“Wellman was designed to do somethingabout the frustration in the marketplace overreporting systems that lacked ease, integration,quality and consistency,” says Marx. “Our soft-ware is now used to track and manage thou-sands of field reports each month fromsupervisors managing projects worth hundredsof millions of dollars.”

According to Marx, Wellman has turned outto be “the right product at the right time” and itworks with other RES products speciallydesigned for the extraction industries. Theseproducts include Authorization for Expendi-ture (AFE), which complements Wellman’sfunctions with budgeting and internal controls

over capital spending.

Keeping an eye on the bottom lineAFE was designed to increase efficiency and accountabil-

ity by enabling managers to track, document, approve andcompare every budgeted, estimated and actual projectexpense. “One big advantage of the system is that it auto-matically alerts decision-makers to the status of any out-standing authorizations for expenditures and identifies thelocation of any holdups or bottlenecks,” says Marx. “Youcan’t do that with spreadsheets.”

So, how does AFE work in practical terms? At the end ofthe shift, field supervisors send the daily project details backto the central office, which immediately sees the reports.The daily report populates a weekly report, showing projectprogress, commentary and accumulated costs, day by dayand week by week.

Documents from the field or those stored in the organiza-tion’s shared network drive can be aggregated with thereports, providing decision-makers with one centralizedlocation for all project information. The system electroni-cally forwards the relevant documents, data and estimatesthrough the authorization hierarchy for final approval.

“Our software also provides better fiscal accountabilityand tremendous savings in audit costs,” says Marx. “Oneclient told me Wellman had saved him a million dollars incompliance fees, because he could quickly access all the rel-evant documents in one central location.”

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Page 27: CIM Magazine September/October 2011

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Drilling data at your fingertipsOther clients also report that RES products have saved

time and money. For example, Oilsands Quest has used Well-man for three years to standardize drilling data from the field.“We have multiple rigs east of Fort McMurray, each with asupervisor filing a daily report,” says Simon Raven, vice-pres-ident of exploration and development at Oilsands Quest.“When you have lots of people involved in fairly complicatedprojects and different services, anything you can do tostreamline that information flow definitely makes life easier.”

The Alberta-based company hires a variety of drillingconsultants for different projects and found that it neededgreater consistency and continuity of different data. “If Ihave hundreds of thousands of records and I want to querylater how many wells were drilled between this date and thatdate, how many wells reported drilling problems and whatthey were, you can’t do that on Excel,” says Raven.

Time savings and the ability to recognize trends in per-formance also attracted Tundra Oil & Gas to Wellman.“We’re a growing organization, and Wellman gives us a user-friendly tool to compile information across any number ofprojects and to identify opportunities for improvementmuch quicker than in the past,” says Eric Bjornsson, man-ager of drilling and completions, Tundra Oil & Gas.

“We have very active field development going on with sixdrilling rigs and nine service rigs in southwest Manitoba, all

of which have to fill out a report every day,” explainsBjornsson. “With Wellman, those reports are distributedelectronically throughout our offices and it saves just a tonof time trying to access all this information.” The visual for-mat of RES software is also important to companies such asTundra. “What the guys see on their screen is the same formthat someone else is going to see,” says Bjornsson. “Youdon’t have to go into a cryptic database and input informa-tion in one area and then flip back and forth between multi-ple screens to see what that’s going to look like in a report.What you see is what you get.”

Untapped potential Marx contends that any oil, gas or mining company that

spends over $20 to $30 million a year in drilling and otheroperations should adopt RES software to help manage theiroperations. He believes those levels of financial activity canno longer be tracked with spreadsheets because the indus-try has become too complex and the stakes are too high.

Marx cites a recent study from the Canadian EnergyResearch Institute that estimates that $2.077 trillion will beinvested in the oil sands over the next 25 years.“New infor-mation, development and production technologies will bevital to manage this spending,” he explains. “We intend tobecome a global leader in those technologies.” CIM

September/October 2011 | 27

upfrontT E C H N O L O G Y

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landscape with disproportionate credibility andtrust, due in part to their perceived authentic-ity. Social networks are typically constructedaround existing trust relationships. Moreover,social media allows users to self-organizequickly into communities with shared inter-ests. Trust, which usually takes a great deal oftime to build in a traditional engagement, canalso be generated very quickly within that on-line community. That trust creates potential forcollaboration and action much more quicklythan would be possible among strangers orthrough a traditional engagement.

At the same time, there is very low toler-ance among social media users for inauthenticbehaviour, whether it comprises inappropriatedata mining, breach of privacy or attempts atmessage control. Unlike traditional media, acompany no longer dominates the messaging

around its brand on social media. The vast majority of socialmedia content is user-generated, and any attempt to censor orstifle user content is likely to be met with distrust and suspi-cion, at best, and a significant backlash, at worst.

The scope and norms of the social web that I havedescribed – openness, trust, authenticity – are causing a shiftin the way in which we build and maintain social capital: thecurrency of a modern licence to operate. Stakeholders nowincreasingly expect corporations not only to communicatetheir corporate responsibility (CR) initiatives, but also toengage in on-line dialogue about environmental, social andgovernance issues.

Industry may be tempted to regard these characteristics ofsocial media as risks, and indeed it is easy to take a wrongstep. However, the difference between risk and opportunityis largely one of perception and strategy. One of the greatopportunities that social media offers is collaboration. Beinga constructive and contributing member of the social webnot only builds social capital, but also allows a company toengage broad and diverse talent towards the achievement ofshared goals.

Consider how Goldcorp and its troubled Red Lake prop-erty in northern Ontario were transformed by then-CEO RobMcEwen’s open-source challenge to find new targets andreserve estimates1. Inspired by how Linus Torvalds had sharedhis code with software developers to develop the world-classLinux operating system, McEwen broke industry conventionand posted Goldcorp’s proprietary geological data on the com-pany’s website, offering more than $500,000 in prize moneyfor the best ideas about how much gold was at Red Lake andwhere to find it. The contest not only led to the discovery of

upfrontS U S T A I N A B I L I T Y b y C e l e s a H o r v a t h

“Companies that do not engage in dialogue in social media are increasingly conspicuous in their absence.”

Social media and the extractive sectorThe changing currency of a modern license to operate

Canadian mining companies generally have a lot ofexperience in stakeholder engagement, but for somereason – perhaps fear of losing control of the messageor concern about getting offside securities regula-

tions – their use of social media to complement traditionalengagement methods has, by and large, lagged behind. Thisgap threatens to undermine the credibility of corporatestakeholder engagement efforts, as stakeholder expectationsincreasingly shift away from company-controlled communi-cation towards balanced, two-way dialogue in which stake-holders themselves have the opportunity to define both thescope of exchange and the terms by which it is conducted.

Rapid globalization of trade and communications andincreasing awareness of humanity’s impact on the Earth aredriving a demand for greater transparency, and that is whysocial media is a game-changer, particularly for the extrac-tive industry. Mobile technologies make it much easier forstakeholders to quickly access information about companiesand their behaviour, and social media makes it much easierfor stakeholders to share information and their opinions –favourable or not – with their networks. What used to takeweeks, or even months, of research and correspondence cannow be accomplished in a fraction of the time – the blink ofan eye in the timeframe of corporate reputations. Just asnews of the Japan earthquake can be tweeted around theworld in seconds, so too can any instance of real or per-ceived corporate wrongdoing.

Balancing risk and opportunitySocial media gives an immediate voice to previously isolated

or remote stakeholders, who often come to the social media

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upfrontS U S T A I N A B I L I T Y

substantial quantities of gold (some eight million ounces,worth over $3 billion), it also exposed the company to newexploration technologies and methods that enabled the com-pany to significantly increase production while loweringcosts. Ultimately, tapping into the social web allowedMcEwen to transform both the Red Lake property and Gold-corp itself into models of innovation and profitability.

Social media tools make it possible like never before tocollaborate with stakeholders throughout the value chain toidentify challenges, innovate solutions and achieve sustain-ability goals. However, to step into this space requires notonly the enabling technologies and networks, but a neworganizational mindset as well – there needs to be a cultureof openness and collaboration that enables a company tolook outside of itself for ideas.

Communicating the sustainability messageWhile social media use by corporations is becoming com-

monplace, its use for communicating around sustainabilityand Corporate Responsibility (CR) issues is lagging. The2010 Social Media Sustainability Index2 (SMI) found thatabout 85 per cent of almost 300 companies in North Americaand Europe listed on the Dow Jones Sustainability Indexwere using social media, but less than half use social media

1 This information was summarized from the description provided in Wikinomics, by Don Tapscott and Anthony D. Williams, published by the Penguin Group, 2006.

2 Social Media Influence, www.socialmediainfluence.com

for any sustainability or CR communications, and less thana quarter of them have a dedicated social media channel forsustainability and CR. While mining was not one of the tensectors examined by SMI, its extractive sector cousin – theoil and gas sector – lagged all sectors in social media use forsustainability communications.

Nevertheless, SMI’s findings seem to be consistent with theCanadian extractive sector landscape. While many companieshave a social media presence, only a few of them – typicallywell-known senior mining companies, such as Barrick, Rio Tinto Alcan and Kinross, but also a handful of juniors,including TVI Pacific – are using these channels regularly tocommunicate information about their sustainability and CRinitiatives. Even so, much of the sustainability content frommining companies tends to focus on community investmentprograms, without much space given to communicating per-formance, for better or worse, in other areas.

In the oil sands, the social media landscape again is dom-inated by the majors, whose content is a mix of investor

September/October 2011 | 29

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Page 30: CIM Magazine September/October 2011

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upfrontS U S T A I N A B I L I T Y

AUTHOR Celesa Horvath has 20years of experience providing strategicconsulting services to clients in theenergy, mining, infrastructure,transportation and governmentsectors. She blogs regularly atwww.makingsenseofresponsibility.comand on Twitter athttp://twitter.com/celesahorvath.

Going where theconversations areSuncor’s social media experienceby Celesa Horvath

Back in 2006, Petro-Canada employees were fielding a lot ofquestions about gas pricing. “We learned from listening that thereis an appetite for dialogue,” recalls Lucy Payette, Suncor’s SeniorAdvisor of e-Communications. In response, the PumpTalk blog wascreated to provide a venue for talking about gas prices, fuel effi-ciency, and how the industry works. “The blog was the tool of choiceat the time,” notes Payette. “It offered a good way to participate indialogue, using technology that was mainstream.” Suncor inheritedthat experience when it merged with Petro-Canada in 2009.

More recently, the company launched another blog, Oil SandsQuestion and Response (OSQAR). At Suncor, “we wanted to begin adialogue, and find a way to have greater transparency about ourcompany and about the oil sands in particular,” explains RebeccaSullivan, director of communications services. The company alsowanted to foster a better understanding of the industry, so much ofits content draws on its technical expertise and offers Suncor’s pointof view, while still allowing readers to express their own opinions.

“Our approach has been to go where the conversations are,”adds Payette. And indeed, Suncor has. From Suncor’s main web-site, you can connect to their social media hub, which provides linksto the company’s blogs, Facebook page, LinkedIn profile, andYouTube and Flickr channels (as well as their social media policies).These social media tools allow Suncor to curate existing content,like the annual report on sustainability, making it easy for audiencesto find information of interest to them.

Suncor has grown its social media resources and presence toensure the company can sustain its participation and maintaincredibility by having the right people providing thoughtful, timelycommentary. Payette acknowledges the resourcing requirementsfor a comprehensive social media presence can be high, but thereturn on this investment has been an improved ability to connectwith and learn from the company’s stakeholders. Moreover, overtime, Suncor has seen a shift in customer opinion, fuelled by agreater understanding of issues informed by online dialogue.

Suncor’s advice for social media wallflowers? Listen first;understand where the stakeholders are; begin slowly. But dobegin. “If we’re not participating, that says a lot too,” cautions Sullivan. osqar.suncor.com; pumptalk.ca

their absence. They are likely to experience declining levelsof trust and respect from stakeholders, who are already com-plementing their own learning, networking and activity withsocial media tools. In contrast, companies that are activelyengaging with stakeholders through social media are build-ing social capital and relationships that facilitate the licenceto operate. CIM

relations, project updates and community investment news,while the myriad trusts and income funds are next to invis-ible (indeed, more than one company Twitter feed is entirelyblank). One notable exception is Suncor, whose multi-chan-nel presence includes some in-depth sustainability and CRcontent. Through their Oil Sands Question and Responseblog, for example, Suncor is enabling two-way dialogue withstakeholders around some tough issues, such as energydemand, water use and tailings pond reclamation. By focus-ing on science-based data and expanding the conversationto tackle oil sands issues in a broader societal context, Sun-cor has created a safe and respectful ground for engagement.

Companies that ignore this opportunity and do not engagein dialogue in social media are increasingly conspicuous in

Page 31: CIM Magazine September/October 2011

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RETURNING THE LAND TO HOW IT USED TO BE

SUSTAINABILITY

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In 2004, President Bush kicked off a space race at NASAwhen he announced that the U.S. was going back to theMoon by 2020. With the funds to design multiple newtechnologies, hundreds of scientists and engineers set to

work.To test their inventions, however, they needed one elu-

sive material – Moon dust – and lots of it. They requiredupwards of 450 tonnes, yet the space agency’s 383 kilogramsof authentic lunar rock is carefully rationed out to only themost developed and essential projects. So NASA encouragedSudbury mining technology developer NORCAT to improveand mass produce a top-of-the-line mechanical lunar soilsimulant called CHENOBI, which it had created to test drillsit built for the space agency.

An unusual substanceEven though it looks like a fine grey powder in photo-

graphs, lunar regolith is granular, extremely abrasive andcohesive. Without air or water on the Moon, there is little tosmooth the rock particles with time. “The behaviour of thismaterial is not what you’d expect,” says Rob Mueller, a lunardestination co-lead at NASA’s Kennedy Space Center. “Lunarregolith doesn’t act like sand or anything that occurs natu-rally here on Earth.”

During the Apollo 11 mission, lunar soil ground into thejoints of the astronauts’ space suits, clogging their gear andlodging in their lungs after they tracked it into the lander.And efforts to test mining equipment in regolith simulantshow that the dust can easily disable equipment prototypes.

A chief reason for the rugged quality of lunar soil is par-ticles called agglutinates that speckle the lunar landscape.

When frequent micrometeorite bombardmentshit the Moon, agglutinates form after an impactsuperheats the dust particles into molten glassand ejects the globules into the surroundingregolith. Rolling with unheated moon dust, thisglobule creates a jagged, dirty glass that is nearlyunheard of here on Earth. Yet agglutinates are abig part of what NASA calls “high-fidelity” simu-lants.

“To produce agglutinates on a large scale isvery difficult and expensive,” says Jim Richard,president of Electric Vehicle Controllers Ltd.,which partnered with NORCAT on the develop-ment of the mock Moon dust. “So our approachin creating CHENOBI has been to add more abra-sive glass to our recipe to replace the aggluti-nates.” If test machines work with a highercontent of glass, he reasons, they should workwith the real thing.

In the end, NORCAT used anorthosite that had been sub-jected to a plasma arc process and then crushed and mixedwith the original material of OB-1, an older simulant, to cre-ate CHENOBI. “They changed their source of glass and gota simulant that was much better,” says Doug Rickman, proj-ect scientist, NASA’s simulant development program.

False startsLast year, President Bush’s Moon mission was quashed

just as NORCAT’s lunar simulant was about to become com-mercially available. Nevertheless, demand for simulantsshows signs of re-emerging as the commercial space indus-try and nations such as China begin stepping up their ownlunar missions.

“Right now, everyone is sitting and wondering where wego from here,” says Richard. “We’re in a really good positionto get out of the gate when things come back around, sincethere’s a shortage of high-quality simulants. The momentumjust needs to build back up to a point where the people whocontrol the money want to get back to doing these things.”

That time may come sooner than expected: by the end ofJuly – with $30 million in prize money in their sights – 29teams signed up for a shot at the Google Lunar X Prize, a com-petition to become the first private venture to land on theMoon by 2015. One of these teams, Moon Express, says it willspend $70 million to $100 million in its effort to win, butcould recoup the costs by selling sponsorships for its rocket.

The bulk of the prize money will go to the first team toland a craft on the Moon and explore 500 metres of its surface.To do this, the teams will need to rigorously test their roversand rockets to withstand the rugged lunar environment.

upfrontN E W F R O N T I E R S b y G r a h a m L a n k t r e e

Jagged, glassy lunar regolith can be very hard on equipment. The Sudbury-produced CHENOBI lunarsoil stimulant helps give earth-based engineers a feel for the challenging extra-terrestrial material.

Courtesy of Electric Vehicle Controllers Ltd.

Truer gritThe new and emerging market for faux Moon dust

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

Uncertain marketsA tonne of CHENOBI costs $44,000, and even higher

grade simulants can reach $1,000 to $5,000 per kilogram.But it is worth it, says Rickman. “For the commercial spaceindustry, the more demanding what they try to do on thesurface is, the more they will need to test their equipment inthe best regolith simulant they can find,” he explains.

If companies find that a part breaksbecause they have not tested theirequipment in accurate conditions, it isa long way back to Earth. Richard says that some researchers who usedNORCAT’s simulants to test wheeldesigns, flow dynamics in zero gravityand other properties were surprised tofind that the high-fidelity simulant gavethem different results. “This causedthem to drop back and look at the othersimulants they were using,” he adds.

Still, the nascent commercial aero-space industry may find high-qualitysimulants in short supply. “The avail-ability of high-fidelity simulants is anissue,” says NASA’s Rob Mueller, “sincethey’re commercially available from onlytwo companies: Orbitec and NORCAT.”

With the downward trend in themarket, neither company has storedlarge quantities of their products. “I’menough of a businessman that I’m notgoing to stockpile this material,” saysRichard. “Researchers have inquiredabout our simulants, but I don’t haveany orders in-hand at the moment.”

With the market’s current inconsis-tency, it is possible these manufacturersmay have to sit on their product for awhile before they can sell it. “Therewill, however, be a time when we needlots of simulants again,” says Rickman.

But long-term, the market appears tohave powerful potential. Right now,

Japan, China and South Korea are all working on projects thatrequire lunar simulants, and Google’s Lunar X Prize is rallyingcommercial players to the industry’s growing opportunities.

“We’ve pioneered a lot of this work and we’re hopefulthat there’s a path forward,” says Richard. “At NORCAT, weproved things with those simulants that we wouldn’t havebeen able to using a lesser substance.” CIM

September/October 2011 | 33

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Precise Product Sized for Maximum YieldClariant Mining Solutions hasappointed Jesus Gutierrez as head ofthe company’s recently opened mininglaboratory at its headquarters in Texas.Gutierrez will oversee processing of oresamples from customers in the UnitedStates and Canada.

MOVING ON UP

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upfrontE N G I N E E R I N G E X C H A N G E b y D a n Z l o t n i k o v

Deilmann-Haniel/Redpath Group, with the expresspurpose of providing shaft-sinking services to theoperations under construction in the first wave ofpotash development in the province. Once the workwas completed, AMC was taken over by ThyssenSchachtbau and renamed Thyssen Mining Con-struction of Canada Ltd. However in 2008, AMCpresident Roy Durr, together with Thyssen Miningand Redpath Mining, saw the emerging opportunityin the current wave of potash expansion projectsand AMC was reborn.

“Both parent companies saw the demand thatwould be coming for new shafts to be sunk forpotash, because all the existing shafts are about 40years old, and all the development that’s been donefrom them is now too far from the shafts to be effec-tive,” says Durr. “They saw the potential withPotashCorp, with Mosaic, with Agrium – and we’reworking with all of them.”

Digging in at Scissors CreekSince its revival, AMC has been hard at work on Potash

Corporation of Saskatchewan’s (PCS) Scissors Creek project,part of its Rocanville Mine expansion near the border withManitoba. When completed in 2013, the new, six-metre-diameter shaft will descend 1,123 metres and serve todeliver personnel and supplies to the production zone.Shawn Munroe, PotashCorp’s mine project coordinator forthe Rocanville expansion, says that the existing service shaft

Workers pour concrete at the Scissors Creek site. The six-metre-wide shaft at PotashCorp’sRocanville Mine is scheduled to go into service in 2013.

Deep freezeGrowth in potash sector revives shaft-sinking specialist

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Courtesy of A

MC Mining

Afamiliar name is back on the job in Saskatchewan:Associated Mining Construction (AMC) is onceagain at work in the heart of potash country after adecades-long hiatus. In what is being described as

one of the most complex shaft-sinking projects in the world,the company is working on the first potash shaft to be sunkin Saskatchewan since 1979.

AMC was originally formed in 1960 as a joint venture thatincluded Thyssen, Schachtbau and predecessors of the current

Page 35: CIM Magazine September/October 2011

September/October 2011 | 35

will be converted to a second production shaft, increasingthe amount of ore that can be brought up to the surface. Alltold, the Rocanville expansion is expected to raise annualoperational capability to 5.79 million tonnes, at a total costof $2.8 billion.

While there are many challenges to the project, whatmakes Scissors Creek noteworthy is Saskatchewan’s geology.“As you’re sinking from surface all the way down to 900metres, you encounter water,” Durr explains. “What you’redoing is designing a shaft lining to support and sustain 900metres of water pressure. That’s tremendous pressure thatnormally you won’t see anywhere else. Plus, there’s a zonethat’s called the Blairmore – between 425 and 600 metres –that is saturated quicksand, which you can’t do anythingwith. If you try to go through it and don’t freeze it, you can’tdo it – it collapses on you.”

Durr points out that of the 17 shafts sunk for theSaskatchewan potash industry since the 1950s, five hadmajor water inflow problems and one even had to be aban-doned during the sinking process. To address the waterchallenge, the operation uses a technique called “groundfreezing.” The process involves drilling a very precisely posi-tioned circle of holes around the planned shaft, insertingfreeze pipes into these, and then pumping chilled brinedown the holes. Despite the calcium chloride brine circulat-ing at temperatures of minus 20 and minus 35 degrees Cel-sius, the freezing stage requires significant time. Accordingto Munroe, drilling of the freeze holes was completed inMay 2009 but for various reasons, the shaft pre-sink did notstart until June 2010.

Advancing on the critical pathIt is important to note that AMC is not working in isola-

tion. “We get the best of both worlds: all the technology andknowledge that exist with the parent companies are avail-able to us, but we’re an independent company,” says Durr.

In fact, says Kevin Melong, senior manager, shaft projectsat Redpath, AMC hired the Redpath engineering group toessentially serve as a subcontractor and provide most of theengineering on the shaft portion of the project. “Theytreated our engineering group as a subcontractor to theoverall project, not as the owner through that process,” heexplains. “It was a unique experience, and it still is today,but we had a scope of work, defined schedules and budgets,and they [AMC & PotashCorp] held us to them.”

Melong also highlights the expertise each party broughtinto the process – and this includes the client companyitself. “Redpath did the sinking plant designs, Thyssen thefreezing and AMC, in collaboration with PCS, did the linerdesigns,” he says.

In addition to their past experience, the team also had theadvantage of technological advances made in the last 40years. Durr says that improvements in high-strength con-crete technology and better castings for tubbing haveallowed for an improved design of the shaft liner. www.koeppern.de

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36 | CIM Magazine | Vol. 6, No. 6

PotashCorp’s decision to construct the permanent head-frame from the outset also condensed the production sched-ule, says Melong. Traditionally, he explains, the projectwould require constructing a temporary headframe over theshaft. Then, once the shaft sinking was complete and the

ground thawed, this headframe would have to be replacedwith the permanent structure. This was the reason why tem-porary headframes were used in the past, and the driver forthe concept of spanning the freeze ring alleviated this chal-lenge. Melong says that the challenge with this approach isthat the ground will settle unevenly during the thaw, desta-bilizing the headframe – an unwelcome scenario for a struc-ture raising a lift full of people from more than a kilometreunderground.

PotashCorp drove the concept of bridging the freeze ring.The design required a system of piles and pile caps outsidethe diameter of the freeze ring on which massive concretebeams were poured to support the permanent concreteheadworks above.

“PotashCorp was instrumental in saying, ‘guys, we don’t want to do that; we want to sink with the permanent headframe,’” says Durr. “And they actually drove the conceptwhere we drilled piles out past the freeze ring. The total con-struction schedule to final commissioning was improvedusing this sequence and design,” he adds.

The time savings had vast benefits says Munroe. “TheScissors Creek service shaft is on the critical path for theRocanville West expansion project so any advantage inshortening the schedule is important to the overall project,”he explains.

AMC’s involvement with all three of Saskatchewan’smajor producers will give the miners access to a wealth ofAMC’s parent companies’ broad expertise and the particu-lar know-how of the builder of Saskatchewan’s newestpotash shaft. CIM

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36 | CIM Magazine | Vol. 6, No. 6

A galloway is lowered into the mouth of the shaft at Scissors Creek.

The outer layer of the shaft is made of watertight welded steel and concrete. The inner shaft is a bolted steel composite.

Courtesy of A

MC Mining

Courtesy of A

MC Mining

Huakan International Mining Inc. has appointed Kunpeng Lias president and CEO and Wenhong (Wilson) Jin as vice-president acquisitions. Li, who has worked with the companysince 1999, brings experience in mining project manage-ment, markets and international trade. Jin has 18 years offield exploration for base and precious metals behind him.Deli Tian, who has been acting president and CEO, will remainas a director and chairman of the board.

***

Aurizon Mines Ltd. has appointed George N. Paspalas as itsnew president and CEO and a member of the company’sboard of directors. Paspalas’ experience includes 14 years insenior management positions, most recently as the COO atSilver Standard Resources Inc.

David Hall, who has retired from his positions as presidentand CEO, a position he has held since 1991, will continue toserve as chairman of the board. Hall has been with Aurizonsince it was formed in 1988.

MOVING ON UP

Page 37: CIM Magazine September/October 2011

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There’s a lot of excitement these days at the ScullyMine in Labrador. After two decades of research andtests to reduce high levels of manganese, a practicablesolution is now in place. One of the production lines

in the concentrator of the mine, which is operated byWabush Mines, Canada’s third largest iron ore mine, andmanaged by Cliffs Natural Resources, has already been con-verted with cutting-edge technology that removes 45 percent or more of manganese from the hematite concentrate.A second line is close to being fully installed, and theremaining six lines are scheduled to be converted to the newtechnology by 2013.

“The mine life was expected to go until 2024, but nowwith this process, we can extend the life beyond 2030,” saysRobin Belley, area manager, process, quality and engineer-ing, Cliffs Natural Resources, Scully Mine Division. For the

890 people working at Wabush Mines, whichat full capacity can produce up to six milliontonnes of iron ore pellets per year, as well as forthe mine’s owners and investors, the extensionis cause for celebration.

“With a production of six million tonnes andiron ore running over US$100 per tonne thesedays, the return on investment of just one yearof additional mine life has incredible value,”says Belley. It is also incredible value from theperspective of the workers and the communitywho have relied on the mine since 1965.

Rare earth magnetic separatorsThe search for this solution began in the

early 1990s, when it became obvious that themine would face problems down the road as itsmining plan moved into areas with high levelsof manganese in hematite. These high levels ofmanganese in the final hematite concentrateresulted in the need for selective mining, whichsignificantly reduced the mine life of thedeposit, says Dan Norrgran, manager, mineralprocessing at Eriez, the U.S.-based manufac-turer of the equipment, whose rare earth mag-netic separators were key to the project’ssuccess. Norrgran has been personally involvedin the project since the first tests in 1990.

It was during that decade of testing variousprocesses that a dry process using high-inten-sity magnetic separators, which collected thehematite while rejecting the silica and man-ganese, was identified as the most promising.This led to a feasibility study in 2005. BBA, a

Canadian independent consulting engineering firm that spe-cializes in the mining and energy sectors, was brought in.

“The results of the feasibility study were promising,” saysBBA’s Charles Boulais, who took on the role of project man-ager. “Cliffs decided to go with the full scale of the proto-type line, based on the results of the feasibility study. BBAwas involved in the detail engineering and constructionsupervision team. We went through a testing phase with thatprototype line and operated it for several months. Thatallowed us to validate and make sure the process, controlsand equipment were according to expectation.”

Boulais worked with Eriez’s Norrgran on improving theequipment used in the prototype. “One of the technical chal-lenges was the heat,” says Norrgran. “The material comesout of the dryer so it’s hot. All permanent magnets losestrength when they are heated so we had come up with a

upfrontP R O C E S S I N G b y A l e x a n d r a L o p e z - P a c h e c o

A three-stage magnetic separation process at the Wabush plant removes the manganese from thehematite concentrate.

Courtesy of B

BA

The secret to longevityManganese removal process extends life of Labrador iron mine

Page 39: CIM Magazine September/October 2011

Construction on the second line began on June 27 and itshould be completed by the end of September. “So we havecut the construction time by one month compared to thefirst line,” says Boulais. “We’re doubling the efforts to havethis line installed and have found different means to avoiddelays and shutdowns.”

In fact, through each phase, the team continues to lookfor opportunities to improve and optimize, somethingwhich, says Boulais, is largely possible because all the samepeople who were involved in the feasibility study phase arestill working on the project today. “We don’t have to catchup on the history of the project,” he says. “It’s very efficient.”

And, Boulais adds, the degree of collaboration with allinvolved, including the people at Cliffs and Wabush Mines– right down to the workers on the ground – could not havebeen higher. “It’s a true partnership,” he says. “We allworked for results with the belief that if one succeeds, we allsucceed. I felt everyone involved was thinking this way.”

“Manganese – which has always been the nemesis of thismine – is about to be seen very differently,” says Belley.“With the concentrator’s newly acquired ability to removeor even to sell a manganese concentrate, we take the futureinto our own hands and look with excitement into the next20 years.” CIM

upfrontP R O C E S S I N G

September/October 2011 | 39

special temperature-resistant magnet that would operateunder those temperatures.”

Antoine Berton, a metallurgist with Soutex, one ofCanada’s largest firms specializing in metallurgy and processengineering, was also brought into the project to assessprocesses and controls. The prototype, he says, had numer-ous improvement possibilities that needed to be worked out.

“You couldn’t operate the line continuously because itwas plugging,” says Berton. “We managed to test at least themetallurgical performances. We added a lot of new samplingpoints, pierced some holes in the pipes in order to be able totake more samples from more places, and with this, it waspossible to analyze information,” he explains.

With Wabush Mines, Eriez, Soutex and BBA workingtogether, the prototype underwent design changes and evalu-ation throughout 2007 and part of 2008. “We added a vibrat-ing feeder on the first unit, which gave us much more controlon the flow rate of the material that goes through the unit,”says Boulais. “With the prototype, the amount of materialprocessed was determined by the drum speed, which is not theoptimal way to control it because it also affects separation.”

In late summer 2008, the new design was approved andthe first production line ordered. Then the internationalfinancial crisis and recession hit. The project was put onhold as the world held its breath at the unknown length ofthe turbulent economic times ahead. However, the engineer-ing to convert the full plant was pursued to have everythingready in hand when the conditions would be favourable.

Adding value to the processBy January 2010, however, the project was back in action,

with the first full-scale production line under construction.It only took four months to build. The new line incorporatesa three-stage magnetic separation process, including a scav-enging system that maximizes and optimizes the collectionof ore. The first stage uses a low-intensity rare earth magnetenclosed within a drum. It has two discharge chutes, one forthe concentrate and the other for the tailings. The secondstage consists of a double drum unit with two high-intensityrare earth magnets and has three discharge chutes, two forconcentrate and one for tailings. And finally, the third stage,the scavenger, has a high-intensity, rare-earth magnet as wellthat is enclosed within the drum and two pipe-style dis-charge chutes: concentrate and tailings.

By the time the ore has passed through the last stage,more than 45 per cent of the manganese, as well as 40 percent of the silica, has been removed, while more than 90 percent of the iron has been recovered – all this by integratingnew technology into a 46-year-old plant. “You don’t have tobuild a new building,” says Belley, “you simply replace theequipment in the same space.”

In addition, there is ongoing research looking into thepotential of turning the recovered manganese into revenues.“It’s possible we can enrich this to 35 per cent manganeseand 35 per cent iron for a manganese product that could bemarketable,” says Berton.

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emerging economies such as India, Russia, China and partsof South America. As cities get bigger and modernize,demand grows for appliances, plumbing, roads and houses.That directly impacts mining and, in turn, Caterpillar.

CIM: Your CEO, Doug Oberhelman, has expressed concern aboutthe slow progress in free trade agreements with some of thesecountries. Is this a cloud on the horizon? Curfman: Like many other companies, we’ve always beenpro-free trade. It’s probably one of our highest corporatepriorities. Doug’s been meeting with a lot of people to try toshow them that free trade is the best way to go for everyone.

CIM: In response to the growth in demand, Cat is expandingmanufacturing capacity in Illinois and India, while establishing anew facility in Thailand. Will this be enough capacity to cut longlead times or is it a matter of simply keeping up?Curfman: We’re increasing capacity everywhere as fast as wecan, even in Russia, to keep up with the demand frommining. That demand will increase as we see a lot moreproject-funded greenfield mines open up in the next three tofive years. We’ve doubled capacity with portions of ourproduct line but are still running a little behind in someareas. We’re certainly seeing a lot of strain on our externalsupply chain providers, but that’s inevitable. When wedouble our business, many suppliers have to quadruple theiroutput. Their ability to stay with us and grow will be critical.We’re providing support in many ways, such as Six Sigmaefficiency training. We also have our people stationed in allthe key supply chain factories around the world.

CIM: Are you also changing your own production methods?Curfman: We’ve been doing that for a number of years withwhat we call CPS, or the Cat Production System. CPS isbased on our priorities of quality, safety and velocity, and it’sstarting to pay off. For example, one of our factories wasmaxed out at 150 units per year in 2007. By eliminatingwaste and inefficiencies, it’s now running 416 units with noextra bricks and mortar.

CIM: What about the development of the products themselves?Mining equipment is being used in increasingly diverse andchallenging settings. How do you adapt a haul truck, forexample, that could be used in the Andes, the desert or theArctic? Curfman:Our product line is now broader than it’s ever been.We have a truck for every application, terrain and condition,mechanical drive or electric drive. We offer a wide range ofdifferent bodies, tire options and application packages. Forexample, we’ve sold hundreds of our 793 trucks with a high

upfrontQ & A b y R i c h a r d A n d r e w s

Normand Hu

berdeau/NH Photograph

es Ltée

The earth moves for CaterpillarCat Global Mining's Chris Curfman talks growth

Growing markets, customer focus, new technologyand the willingness to adapt to a changing world.These are the driving forces behind the confidentgrowth of Caterpillar Inc., the world’s leading man-

ufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.

Despite global financial uncertainty, 2010 sales and rev-enues increased 30 per cent to more than US$42.5 billion.Sharing the company’s confidence in continued success isChristopher C. Curfman, Caterpillar’s vice-president of salesand marketing, Global Mining Division, who oversees thedevelopment, manufacture and international sales of extrac-tion equipment and vehicles.

Educated in the United States, Curfman joined Caterpil-lar in 1994 and since that time has worked in various divi-sions around the world. CIM Magazine spoke to him abouthow the growing enterprise is going to keep pace with theequally growth-oriented extractive sector.

CIM: How do you explain last year’s surge in Caterpillar salesand revenues?Curfman: It’s largely the result of worldwide urbanization andthe move to build metropolitan infrastructure, primarily in

Page 41: CIM Magazine September/October 2011

mines around the world. We personally know who’s doingwhat in each one of them. However, the world is changingand our customers want us to take a greater leadershiprole. Our communications plans call for using a whole newrange of social media.

CIM: What is the significance of the second five-yearagreement Caterpillar signed last October with the Rio Tintomining group. How does this collaboration improve machineand mine site performance? Curfman: The alliance agreement with Rio has been verysuccessful in terms of our ability to deliver millions ofdollars in savings for their continuous improvementprojects, their mines, their maintenance practices andtheir haul roads. Renewal of the agreement means morebusiness, more market share and better relationships.The charter of Global Mining 10 years ago was todevelop such alliances. We’ve now established differentlevels of agreements with all customers and it’s been areal winner.

CIM: It looks like another real winner is Caterpillar’s US$8.8 billion acquisition of mining equipment giant BucyrusInternational, based in Milwaukee. What’s the significance ofthat acquisition? Curfman: It expands our product offering to cover about 85per cent of the mining equipment industry, whereas todaywe’re less than 25 per cent. The acquisition is based onCaterpillar’s goal to be a world leader in providingsolutions to the mining industry. Our customers are veryenthusiastic about the deal. They’ll have more productofferings and a reduced need to deal with differentsuppliers. We’re excited by the thought that soon you’ll beable to look at a mine and almost 90 per cent of itsequipment will be Cat yellow. CIM

upfrontQ & A

altitude package, to operate at 12,000 feet or above.Similarly, we sent extra quiet 793s to Australia and Canadafor mine operations near communities. Our dealers are setup to provide options and support, whatever the conditions.That’s what the customers expect.

CIM: How important an issue has safety become? Curfman: I’d say safety awareness and training in mining andoil and gas has increased tenfold in the past five years. It’snow the way of doing business. Safety is the firstconsideration in the design of all the trucks we’ve beentalking about. We’re the only manufacturer offering objectdetection as a standard feature. We’re also in the lead withbraking, rollover protection and other safety features.

CIM: How have rising oil prices affected your machinery design?Curfman: The cost of petroleum is driving a lot of R&D intoimproved fuel consumption, alternative fuels and electric-powered vehicles. Caterpillar has spent more than a billiondollars on clean diesel technology. We’re looking at betterweight ratios, fewer but larger trucks with improved fuelefficiency and greater productivity. A good example is theC175 diesel engine used in the large F-Series trucks. We alsoprovide multiple horsepower settings to avoid unnecessaryfuel usage and offer the option of electric drive alongsidemechanical drive in our trucks.

CIM: A social media consultant has noted that Cat is a goodexample of a company effectively using social media, withbulletin boards and discussion topics. However, unlike manyother divisions, mining does not have its own establishedonline community hosted by Cat. Do you expect to develop thisin the future? Curfman: We already communicate a lot online with ourcustomers and have close relationships with about 1,500

September/October 2011 | 41

Thank you!It is with great pleasure that we at Indotech would like to kindly thank the mining industry for the unwavering trust it puts in our products, with a special mention to six mines that have shown unparalleled support for our team and our Tech Roll roll-up rubber garage doors.Thank you, and see you soon!

Merci�!C’est avec grand plaisir que nous aimerions chez Indotech prendre le temps de remercier l’industrie minière pour sa confiance continue dans nos produits, avec une mention spéciale pour six mines qui ont montré un support inégalé pour notre équipe et nos portes de garage à enroulement en caoutchouc Tech Roll.Merci, et à très bientôt!

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Page 42: CIM Magazine September/October 2011

Plugging inConnecting Canadian resources to the global marketplace

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Whether it is thermal coal for electricity, metallurgical coal for steel or petroleum for fuel, Canada has the promise to both help build theglobal industrial powerhouse and keep it energized well into the future.The potential return is enormous – as long as those looking to completethe connection can navigate the many political, economic andgeographical risks that threaten such an ambitious endeavour.

energy & industry

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Canada, blessed with vast deposits of coal, uranium,natural gas and crude oil, has the resources to helpmeet the world’s energy needs. The country’s

energy exports in 2010, including electricity, amounted to$90.7 billion in revenues, nearly a fifth of all our exports.Most of the cash came from the sale of oil, and virtually allof it came from the United States, which buys some 97 percent of Canada’s energy products. With such strong, longstanding trade ties and advan-

tages of geography, one might expect Canada’s energysector to have a shining, trouble-free future, but few thingsin life are so simple – and virtually nothing is simple whenit involves moving hundreds of thousands of tonnes ofmaterial every day. Consider oil. As Canada’s oil sands production continues

to grow, operators are struggling to get it to the customers,and existing pipeline capacity to the Gulf Coast is simply notenough. According to Esther Mui, an independent industryanalyst and a former senior vice-president of oil and gaswith credit rating agency DBRS, Canadian producers arealready seeing the negative effects of capacity shortages.“There is a $10 to $20 difference between the price of

WTI (West Texas Intermediate crude) and London’s Brent

The energy exchangeThe global marketplace is full of promise for Canadian energy producers – the challenge is getting thereBy Dan Zlotnikov

crude, Mui explains. “It used to be $1 or $2; however, nowwe have substantial bottlenecks at Cushing, Oklahoma. Alot of Canadian heavy oil is not getting to the refineries inthe Gulf where this can be processed.”Two pipeline projects are trying to address the bottle-

neck issue. The first is the Keystone XL expansionproposal by TransCanada Corporation. Previous stagesof the Keystone project saw TransCanada link itsHardisty, Alberta, facility to Patoka, Illinois, and then tothe Cushing hub.The $7 billion Keystone XL project will extend both the

pipeline’s reach and capacity. All told, the project is slatedto add another 500,000 barrels per day (bpd) of transportcapacity, for a total of 1.1 Mbpd.

Building capacityConsidering that in 2010 Canada exported over 925 mil-

lion barrels of oil to the United States, producers are eagerto see the project completed. Not only is over 80 per cent ofKeystone XL’s capacity already under long-term contract,but Mui says that the future shippers have signed cost-shar-ing agreements with TransCanada. “If there are some costsoverruns, whether because of delays or acceleration of the

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The Christina Lake operation of Cenovus Energy

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construction, the shippers will share at 75 per cent of theoverruns,” she explains.For oil sands producers like Cenovus, much rides on

Keystone XL. According to Jessica Wilkinson, the com-pany’s spokesperson, Cenovus is confident that theKeystone expansion will go forward. The company’s 10-year strategic plan, announced in 2010, was to more thanquadruple its current production, reaching 500,000 bpd bythe end of 2021. Wilkinson says the new plan has thecompany increasing production sooner. “What we’re doingis increasing total production capacityat Foster Creek [Alberta] to 270,000to 290,000 bpd gross by increasingcapacity at future phases and drillingsome strategic wells,” she says. Thecompany has also completed its latestexpansion, the 40,000 bpd Phase D atits Christina Lake operation in north-east Alberta in early August, sixmonths ahead of the original schedule.With such aggressive expansion

plans, new transport capacity is ofmajor importance to Cenovus. Thatsaid, Wilkinson adds that the companyis also looking at alternatives to rawpipeline capacity: “long-term supplyagreements with our current pipelinepartners, financial hedges, workingwith existing refineries to see if theycan process more heavy oil, and newtechnology that partially upgrades theoil, potentially increasing refinery own-ership,” she explains. “We’re preparedto evaluate a number of options.”

Gateway to AsiaBut while the focus of the

Keystone project is better supplyingthe U.S. market, the push to do so isnot without its own concerns. In2010, exports to the U.S. accountedfor over 2.5 Mbpd of Canada’s 2.8Mbpd of oil production – a whopping89 per cent. Fluctuations in U.S.demand, much like ones seen during2008 and 2009, pose a serious riskto the oil sands producers, limited asthey are by geography and pipelineinfrastructure. The answer is another pipeline pro-

posal – Enbridge’s $5.5 billion,1,177-kilometre Northern Gatewaylink between Bruderheim, Alberta, anda new ocean terminal that would bebuilt in Kitimat, British Columbia. The525,000 bpd pipeline would allowCanada’s oil to reach markets in the

Pacific Rim, where population and income levels are grow-ing and demand for petroleum products is rising, andexpected to keep doing so.Enbridge originally planned for commercial operation in

early 2017, but the project has encountered oppositionfrom First Nations, whose territory it was going to cross, aswell as from local environmental groups. In recognition ofthe level of public attention, regulators have extended thereview process, which is now not expected to be com-pleted until mid- to late 2013.

September/October 2011 | 45

energy & industry

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Exploring new marketsAccess to overseas markets is equally vital for Canada’s

thermal coal exporters. Most of Canada’s exported coalhas historically been the more lucrative metallurgical vari-ety used in steelmaking, but things may be starting to shift. Allen Wright, president of the Coal Association of

Canada, points to the Vista project being developed byCoalspur Mines Limited in western Alberta. According tothe prefeasibility study, Vista would yield nine milliontonnes of thermal coal annually for power generation onceit is completed in 2014, with 90 per cent of the productiondestined for export. The added tonnage would more thandouble Canada’s thermal coal exports, which last yeartotalled 5.6 million tonnes, mostly going to Asian cus-tomers.Chris Borowski, manager, investor relations at Coalspur,

adds that the bankable feasibility study currently underwayon Vista, is looking at increasing annual output to over 10million tonnes. “With the increased prices for thermal coal,even companies operating out of the Powder River Basinhave begun to search for ports to export their coal to inter-national markets,” he says. “In our prefeasibility study onVista, we planned to sell a portion of our lower grade coaldomestically because at the time we didn’t believe therewas an appetite for it internationally. This lower grade coalis actually higher quality than the coal planned to be

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energy & industry

shipped from the Powder River Basin, which has increasedthe likelihood that our lower grade coal will reach interna-tional markets.”The advantages of directing as much product as possi-

ble to international markets are clear, says Borowski. Aspart of the prefeasibility study on Vista, Coalspur commis-sioned Wood Mackenzie to complete studies on themarketability of its higher quality export coal. He says thataccording to these studies, the potential coal quality fromVista will attract benchmark Newcastle thermal coal pricingwith a discount of approximately six to eight per cent dueto its slightly lower calorific value, which is still far ahead ofdomestic prices.Of course, as Ernie Lalonde, senior vice-president of

mining at DBRS, points out, to enter the more lucrativeglobal market, Canada’s coal exporters must first reach thesea ports. “They have to go 1,200 kilometers to the coast,whereas Indonesia and Australia and lots of other placeshave coal along the coast and hence are quite competitive,”he explains. The Vista prefeasibility study, according to Borowski,

estimated operating costs of $60 per tonne for the life ofthe mine, which includes rail and port fees. But unlike oil,coal producers do not really have the option to turn to oursouthern neighbour in search of clients.

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“If you head directly south of Alberta and Saskatchewan,you end up in the Powder River Basin, which is one of thelowest cost, most massive coal-producing areas,” Lalondecontinues. “So you’re literally talking about selling coal toNewcastle here.”In fact, Peabody Energy, the world’s largest private-sec-

tor coal producer, recently announced plans to exportthermal coal from its Powder River Basin Mine – 24 milliontonnes of it. The destination? The Pacific Rim, of course.Lalonde highlights the case of Indonesia, a country that

has traditionally been a coal exporter with little coal-basedpower generation domestically. That balance, Lalonde says,may be about to change. “It needs the coal for power con-sumption domestically because the Indonesian populationis large and growing and needs more energy,” he explains.“There’s an expectation that at some point their exports inthe thermal coal market will be capped, and maybe evenreversed by domestic demand.”Another significant market is India, which last year had

the world’s fastest GDP growth rate at 10.4 per cent.India’s government has embarked on an ambitious pro-gram of electrification, with plans to add 17,600 MW ofnew generating capacity in the current fiscal year.However, a recent article by the Press Trust of Indiareported that Coal India Limited would fall 41 milliontonnes short of its original 360 million tonne target, dimin-

ishing the country’s power generation capacity by 15,000MW. If anyone needs coal in a hurry, it is India. What’s more,given that India’s Power Ministry is planning to add morethan 80,000 MW between 2012 and 2017, coal suppliersare going to be a welcome sight in the Pacific Rim formany years to come.Borowski says Coalspur does not view India as a likely

buyer due to shipping distances, but welcomes Indian

September/October 2011 | 47

energy & industry

Go ahead. Apply now! www.suncor.com/careers

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A crew drills at the Vista thermal coal project of Coalspur Mines Ltd. in western Alberta.

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demand as it will compete for coal volumes with Coalspur’sprobable customers – China, Japan and Korea. “There areprojected increases in the shortfall of higher quality thermalcoal, and Vista is positioned to benefit from that dynamic,”he says. “If India has a supply shortfall, it will have to sourcecoal from somewhere else, which may be Indonesia orAustralia, but as long as it is creating tension in the marketsthat we are looking to serve, that’s great for us,” he says.“China and India are undergoing massive industrial revolu-tions and they need power to fuel their growth. As long ascoal is the cheapest form of generating electricity and aslong as those economies continue to grow, increased coalconsumption will be the result,” adds Borowski.

Changing domestic climateIn contrast, Canada’s coal may soon be facing a colder

reception back home, or so it appears at first glance. Newregulations have tightened emissions limits for coal powerplants. Wright also says that the regulations state thesetargets cannot be met by buying offsets or carbon credits,but only through “real” reductions. While the full implica-tions of this requirement are not yet clear, everyone agreeson one point: coal power is going to become more expen-sive as a result. Ontario has gone a step further, promisingto end its reliance on coal power completely.

48 | CIM Magazine | Vol. 6, No. 6

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Overall, domestically “the trend is not an uptrend; thebest case is flat, in my mind,” says Lalonde. “What it willtake to change this is a technological fix of the CO2 issue;hence, you have people with large coal resources that arenot really export-friendly because they’re low-calorific,looking at ways to fix the CO2 problem, to advance carboncapture and other projects,” he concludes.Much like Lalonde, Wright has high hopes for techno-

logical advances. But he also emphasizes that coal is toosignificant a resource to ignore, and one not easilyreplaced. He cites a recent study by the EnergyInformation Agency, forecasting that even by 2035, 44per cent of electricity in the United States would comefrom coal. “You need a balanced mix, and quite frankly, Idon’t think you’re going to get rid of coal power plants,”he says. “Governments need to step in and provide sup-port in all energy producing industries, not just coal, untilthe technology advances to a stage where it becomescompetitive.”Making more efficient, less carbon-intensive use of

Canada’s oil and coal is sure to be a lengthy, challengingprocess. Whether the technology delivers as much asLalonde and Wright hope remains to be seen. But onething is certain: Canada’s resources guarantee its status asan energy powerhouse. CIM

Page 49: CIM Magazine September/October 2011

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Page 50: CIM Magazine September/October 2011

Les partenaires de la Chaire industrielle CRSNG Polytechnique-UQAT en environnement et gestion des rejets miniers sont heureux de souligner ses 10 années de contribution à l’industrie minière et au développement durable par leurs travaux de recherche et la formation de professionnels spécialisés.

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Page 51: CIM Magazine September/October 2011

To find a growth powerhouse, one only has to look atthe Alberta oil sands. Since 2005, mined productionof synthetic crude oil and bitumen from the oil sands

has expanded almost 40 per cent. The oil sands’ expansionwill undoubtedly continue for years to come: with overseasoil supplies seemingly uncertain, the United States has aninterest in maintaining its own fuel sources, and oil sandsoperators are betting on that market need. “The vast majority of new oil supplies in Canada are

forecast to come from the oil sands,” says Greg Stringham,vice-president, oil sands, Canadian Association ofPetroleum Producers (CAPP). By 2025, CAPP predictsthat oil sands production will grow to 3.7 million barrels ofoil equivalent per day, up from 1.5 million in 2010. About one-third of that estimated growth will come from

surface mining, although the major producers’ experiencesshow that building and expanding bitumen mines on timeand within budget is no easy task. Fluctuating oil prices,high costs and environmental concerns have stretched outthe timelines of the construction projects currently under-way. But their operators are confident that their plans willreach fruition.

New reclamation rulesAs the oil sands operations grow, increased public

scrutiny has added new layers of work to site plans, as well

as external relations and legal departments. The large,long-lasting tailings ponds created by mining operationsare particularly visible targets. In response to concernsabout their impact, Alberta’s Energy Resources andConservation Board issued a directive in 2009 requiring allmineable oil sands operations to reduce their fluid tailings.Dry “dedicated disposal areas” must compose half of totaltailings by 2013, and the disposal areas must be reclama-tion-ready five years after deposition has ended. Oil sands companies had already been working on

researching and developing tailings management tech-nologies, but the existence of specific goals and timelineshas accelerated and redirected their research efforts.Syncrude Canada Ltd., which had already been using com-posite tailings and researching water capping solutions,began to study centrifuging technology in response to thedirective. “It’s a faster way to get the water out of your tail-ings as opposed to the other technologies,” explains CherylRobb, media relations adviser at Syncrude.Barry Palmer, general manager of heavy construction

and mining at North American Construction Group(NACG), reports that new tailings requirements make morework for contractors as companies seek to test out tech-nologies without initially investing in their own equipment.“We’ve been actively engaged in construction of some oftheir tailings mud drying cells,” he says.

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The coker towers at Suncor’s operation north of Fort McMurray, Alberta

A question of balanceOil sands miners seeking solid footing during a time of economic, social and regulatory changeby Eavan Moore

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At the working face of Syncrude’s North Mine

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Eyes on the oil sandsThe integrated oil sands environment monitoring planBy Eavan Moore

Arguing back and forth about the effects of oil sandsproduction is, without credible data, unproductive. Last year,a federal panel determined that monitoring activities in thelower Athabasca River system fell short of what wasneeded to assess the oil sands’ environmental impact. Inresponse, Environment Canada enlisted scores of scientiststo develop a plan for thorough and transparent monitoringof the air, water and terrestrial ecosystems around oil sandsoperations and released the final results in July as theIntegrated Oil Sands Environment Monitoring Plan.The plan’s authors identify some key improvements on

the monitoring already taking place. The plan emphasizescumulative regional effects, compares the levels of contam-inants in sites affected by the oil sands with those that areunaffected, co-locates sampling sites for water, biodiversityand air, and archives all data in accessible formats. Theplan’s reach extends from northern Alberta intoSaskatchewan, Northwest Territories and Manitoba.Peter Kent, Minister of the Environment, said in a press

conference that the plan provided both industry and govern-ment “with the hard science to prove to the world that thisgreat resource is being developed in a responsible and a sus-tainable and constantly improving way.”Industry groups have met the plan with cautious approval:

Transparency works in their favor, but there is concern thatthis new initiative could duplicate the extensive monitoringwork they already do internally and for the province. “It would

be a real missed opportunity if the federal government isn’table to coordinate their monitoring plans with what’s alreadyhappening from a provincial perspective.” says Alan Fair,executive director of the Oil Sands Tailings Consortium. “Thatwould just lead to wasted effort and a delay in getting us allto the right place on monitoring.”Alberta Environment spokeswoman Jessica Potter

would like to assuage those concerns. “AlbertaEnvironment’s intention is to avoid any duplication,” shesays. “All the work from our provincial panel and the workfrom the federal government is going to be used to createthe new system. Basically the plan is to evolve the systemto be better integrated.”After setting out the framework for monitoring, the key

parties are now working on an implementation plan. Fundingfor this project will be tricky. The plan will cost an estimatedyearly $50 million in the early years, and government andindustry have not yet agreed on where that will come from.Environment Canada expects the industry to pay for themonitoring. As Kent put it: “They recognize $50 million tomost of us represents a very large amount of money, butagainst an industry that’s expected to generate $80 billionnext year, it is a very small price to pay for social licence.”Members of industry may not be on the same page.

Alan Fair believes oil sands companies will be reluctant toshell out for increased monitoring. “I can’t necessarilyspeak for the individual companies,” he says, “but the fedsshould be looking to fund what they see as a need foradditional monitoring. To the degree that it can utilize exist-ing infrastructure on company leases and adjacent areas,the industry has always been willing and able to providethat type of in-kind support.” CIM

For Imperial Oil, the regulation meant a redesign and re-approval of its Kearl mining project, initially approved in2009. The company is still researching tailings technolo-gies that will pass muster, but the Energy Resources andConservation Board (ERCB) allowed it to delay meetingthe requirements until 2018 on the condition that it wouldthereafter exceed them. The first phase of production atKearl is scheduled to commence in late 2012. That was not the only motivation for the redesign, says

Imperial spokesman Pius Rolheiser. The company decidedto cut three construction phases down to two, limiting theamount of infrastructure it needed to build and minimizingthe site’s footprint. The operation will initially produce110,000 barrels per day, rising to 170,000 after a debot-tlenecking period. The resulting bitumen, processed usingparaffinic froth treatment, will be ready to ship to refinerieswithout further upgrading. The second phase will expandproduction up to 345,000 barrels per day (bpd).The decision also pushed the price of the first phase

higher, resulting in a steep cost increase from $8 billion in2009 to $10.9 billion in 2011. Observers interpreted it asa striking example of industry-wide budget swelling, but

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Rolheiser has a different explanation: the company is sim-ply doing more in the first phase than originally planned.Meanwhile, the original estimated total cost of $5 per bar-rel has not changed. Kearl avoided major cost inflation bylocking in its construction contracts in 2009, when themarket was less competitive. It also ordered prefabricatedfacilities to be assembled on site. Those prefab facilities proved more expensive than ini-

tially expected when Imperial’s plan to ship a fraction of theprefab modules on U.S. highways through Idaho andMontana met opposition on environmental grounds. After amonths-long legal process, the company took steps to cutthe modules down to a size suitable for less contentiousinterstate roads, while continuing to pursue permits for theoriginal paths. The majority of the modules have had notransport problems.

Cautious expansionWhat Kearl escaped by contracting in 2009 was a hot

construction market that has driven up producers’ capitalcosts. Strong oil prices draw investment to the oil sands,but also feed into basic inputs like steel and cement. Thisis already a high-cost, low-margin industry. Too much costinflation and producers will either back off or face majorbudget overruns.Meanwhile, any increase in activity adds to the already

tight competition for labour. That means that positions takelonger to fill and require more perks, says Palmer of NACG.“But at the end of it, you still have to be profitable,” he pointsout. “If you’re just doing it to attract people and there’s nomoney in it, then obviously that’s not the answer either.”One operator explicitly declines to pay too high a price

for labour. Canadian Natural Resources Limited (CNRL),learning from the expensive first phase of its Horizon min-ing and upgrading project, took steps to limit how far theballoon stretches in its upcoming round of expansions.

The company broke up its remaining work into 46 individ-ual projects and will start or stop construction in responseto market conditions, not undertaking any expansionsunless it is confident of a return on capital and not settingany target dates. CNRL also established spending guide-lines, capping its construction labour force at 5,500 andits yearly expenditures at $2 billion to $2.5 billion.Abandoning strict schedules seems to have been a

wise decision, since the Horizon project has continued tosee significant delays. The project originally commencedproduction of synthetic crude oil in early 2009, sevenmonths late and 46 per cent over budget. CNRLassigned much of the blame then to cold weather andthe high costs of steel, fuel and labour. But after a suc-cessful first run, with production averaging 90,900 bpdin 2010, a fire in the coker unit of its primary upgraderstopped production in January 2011. The fire beganwhen the top unheading valve on an active coke drumwas opened, releasing hot hydrocarbons that ignited andlit the surrounding building on fire. Exceptionally coldweather in January and February delayed the repairprocess, as did a May forest fire that did not damagefacilities but took personnel away from the repair effort.After a tough beginning of the year, CNRL is back on

track. In mid-August its upgrader once again began pro-ducing crude oil with shipment of synthetic crude resumingshortly after. At some point, CNRL expects to expand to250,000, and the ultimate capacity, after further expansion,could be up to 500,000 bpd.

Out of the mothballsSuncor Energy Inc. has been able to report positive

news on its own oil sands construction. The Voyageurproject, a major element in Suncor’s growth strategy thatwas shelved in 2008 in response to the financial crisis, isback in business after Total E&P acquired a 49 per cent

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Oil Sands & Heavy Oil

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stake. The project has a capital budget of $260 millionfor 2011 and a targeted startup of 2016. At a plannedcapacity of approximately 200,000 bpd, it will supportexpanded production from in situ projects and from thefuture Fort Hills and Joslyn mines. “We are still in the very early stages of planning,” says

Dany Laferrière, media relations manager at Suncor. “Weexpect to progress with engineering and site preparationwork for both the Fort Hills and Voyageur projects duringthe rest of this year.”In the meantime, Suncor has advanced development of

its North Steepbank extension (NSE). This operation willextend the life of Suncor’s Millennium and Steepbankmines and cut their operating expenditures by shorteninghauls and lightening traffic congestion. Anne Marie Toutant, vice-president of mining opera-

tions, says the outcome may be positive for theenvironment as well. “These efficiencies and resultingreduced truck gross operating hours provide environmen-tal benefits through reduced energy intensity, nitrogenoxide and sulphur dioxide emissions during the 10-year lifeof the North Steepbank extension,” she explains.At the start of this year, 60 per cent of the project cost

had been executed, according to Toutant. That includedsignificant reclamation work – tree clearing, muskegdrainage and stockpiling – as well as pit pre-development

work. The mine complex facility serving the MillenniumMine was expanded to allow rebuilds and other shop workfor North Steepbank equipment.By the end of 2011, more work will be completed.

Toutant says this includes commissioning of the NSEpower substation, installation of the pit powerline, and con-struction of field maintenance facilities for minor repairsand services. Overburden pre-strip of the phase 1 pit will

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The HR questionBy Peter Caulfield

There were an estimated 12,269 employees in the oilsands sector in 2009, according to the Calgary-basedPetroleum Human Resources Council of Canada. Ifdevelopment in the oil sands creeps along, the Councilforesees net hiring requirements of 9,073 in 2020 – anincrease of 74 per cent. However, if oil prices rise andstay high, that estimate jumps to 14,948 – an increaseof 122 per cent. To fill these positions HR managers aretaking their cue from the sector and focusing on explo-ration and development. Vermax Group Inc., a Calgary-based immigration con-

sultant company, specializes in bringing in fieldconstruction workers from outside Canada for the oiland gas industry. Between 2005 and 2008, Vermaxmatched more than 1,000 temporary foreign workerswith jobs. “There will be more in the future,” says president Peter

Veress. Vermax recently set up a training centre inMexico where pipe-fitters and welders learn safety andlanguage skills before going to Alberta.Temporary foreign workers are not a quick fix: hiring

can be expensive, as paperwork, training and travel canadd up to as much as $10,000 per worker, and workersin certified trades have a year to pass qualifying examsin their area of specialty.

Training programs such as Women Building Futures are generating a new supplyof workers to the construction, and oil and gas industry, sectors struggling to meettheir growing HR demands.

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have been completed, the phase 2 pit will be opened, andthe primary haul road will be constructed.

A resilient industryProject suspensions like those at Suncor illustrate the

knife-edge nature of oil sands profitability. Lean too far inone direction and synthetic crude oil is not earning enoughto compete with conventional; lean too far in the other

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Calgary-based Flint Energy Services Ltd., which pro-vides construction management, planning and fieldlabour to the oil sands, is already experiencing a labourshortage. “As we approach peak demand for labour in2013 and 2014, 49 per cent [of total requirements] willneed to be recruited from other industries or interna-tional sources,” says spokesman Guy Cocquyt. To address the upcoming demand, Flint has an

apprenticeship program with almost 1,500 trainees. “Wesee the trend increasing, as industry can match twoapprentices for every journeyman,” says Cocquyt. Thecompany is also investigating ways to bring Aboriginalpeoples, women, immigrants and temporary foreignworkers on board.The oil sands are also looking to hire from another

source of labour: women in the trades. Kiann McNeill,spokeswoman for Edmonton-based Women BuildingFutures, says some of the organization’s non-profit con-struction training graduates work for companies activein the oil sands, including Suncor Energy, Bantrel, PCLIntracon Power Inc., Ledcor, JV Driver Projects Inc.,Mammoet and Fuller Austin Insulation Inc. McNeill says WBF has received a lot of positive feed-

back about its graduates. “We’ve heard from theiremployers that women are more careful than men andthat they’re easier on equipment,” she says, “Women alsosolve problems differently. They’re less likely to ‘hit it witha hammer’ when they run into a problem, and theychange the work environment, making it safer.”Suncor Energy Inc. has hired WBF graduates and is

seeking to expand the program to include the journey-woman START program that WBF has developed withthe provincial government to help more women establishthemselves in the contruction, oil and gas sectors aswell. “Attracting and retaining sources of talent that havepreviously been under-represented in the trades sectoris critical to ensure the necessary people and skills areavailable to Suncor in the short and longer term,” saysDany Laferrière, manager of corporate communicationsat Suncor. “There’s no magic bullet to ensure we have the talent

in place when labour shortages heat up again,” addsLaferrière, “We’re pulling every lever that we’ve got, butit’s not just a numbers game. What’s the same for us thistime around is that it’s about hiring quality people withthe right attitude and values, one at a time.” CIM

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direction and the industry enters an expensive boom cycle,falling victim to its own success.While strategies like prefabrication and flexible con-

struction plans aid with cost control, the basic difficultiesseem likely to remain. Tight margins have been a feature ofthe industry since its inception. Concerns about its environ-mental impacts are growing, not receding, and if thoseconcerns result in further regulatory measures, the work-load for operators will only increase.On the other hand, a number of stakeholders are

determined to make this resource work for them. It hasbecome a critical part of Alberta’s economy, accountingfor a significant portion of business investment andsupplying more than $3 billion to provincial coffers infiscal year 2009-2010. The Harper government sup-ports the oil sands industry and has lobbied on itsbehalf. Above all, the world’s insatiable desire for oilensures there are good prospects for any feasiblemeans of producing it. Bitumen mining has had its booms and busts in the

past; it recovered from slumps in the 1980s, the 1990s,and as recently as 2009. History shows that challenges inmining bitumen do not stop projects from getting built –they just take a little longer and cost a little more. There istoo much potential wealth in the oil sands to let any of it goto waste. CIM

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The infrastructure boom is here. According to CIBCWorld Markets Inc., it will be worth an estimated $25to $30 trillion of new infrastructure investment in the

next 20 years. In part, the boom is due to world govern-ments, including Canada’s, responding to the 2008 globalfinancial meltdown and the first international recession bypledging trillions to infrastructure spending in order to cre-ate jobs and stimulate economies. But also, developednations have aging infrastructures, and emerging nationsneed to expand and build new infrastructure to keep upwith growth and demands. One way or another, the infra-structure will be built.And where there is infrastructure being built, there is a

need for high-quality coals, which, along with iron ore, are thekey ingredients needed to make steel. In fact, according tothe World Coal Association, more than 60 per cent of totalglobal steel production is dependent on metallurgical coal. From the perspective of steel manufacturers and their cus-

tomers, there is a huge problem. “There is not enoughmetallurgical coal production in the world to satisfy the growthin demand,” says Robin Goad, president and CEO of London,Ontario-based Fortune Minerals Limited, whose MountKlappan project in northwest British Columbia contains

2.8 billion tonnes of anthracite coal, valuable as a pulverizedcoal injection (PCI) coal in blast furnaces because of its lowvolatility and high energy content. “There are large deposits in Mongolia and also in south-

ern Africa, but Indian crude steel production is anticipated toquadruple in the next decade,” Goad says. “Brazilian crudesteel production is anticipated to quadruple over the next 20years. In Japan and South Korea, growth in the demand forcoal is increasing at about three per cent per year and someof the traditional suppliers are no longer supplying.”

Where will it come from?Until just a couple of years ago, China was the world’s

largest producer of anthracite coal, but in 2009, the countryannounced it would no longer export its premium PCI coal.Last year, according to the World Coal Association, Chinaimported an estimated 48 million tonnes of coking coal. The world’s second largest producer of anthracite coal,

Vietnam, announced earlier this year that it was raising taxon coal exports to 20 per cent from 15 per cent. As well, itwould gradually cut coal exports to three million tonnes peryear by 2015 from 16.5 million tonnes this year, while rais-ing imports to six million tonnes of coal per year by 2015.

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Barges loaded with metallurgical coal head towards the Port of Mobile, Alabama,where it will be loaded onto ocean-going vessels bound for ports in some of the world’s fastest growing steel-producing nations.

Industrial strengthMetallurgical coal operators and developers focused on growthBy Alexandra Lopez-Pacheco

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In the last decade, the price of metallurgical coal has risen,on average, from US$40 per tonne to close to US$230 pertonne in 2011. According to The AME Group, a global firm ofeconomists in the metal and mineral industries, for the morethan 20 metallurgical coal mines in Canada – bothin operation and in development – that is goodnews. The combined products of those minesin production make Canada the secondlargest exporter of metallurgical coal – atleast that is until last year, when it wasbumped down to third place by the U.S. “Traditionally, the U.S. is a large metallurgi-

cal coal producer, but we call them a swingproducer,” says Kevin Stone, senior com-modity analyst, Natural ResourcesCanada. “When the market is good, theyexport more. When it’s not so good, theyexport less. Right now, the market is good.”In 2010, Canadian companies

exported 8.6 million tonnes of metallurgi-cal coal to Japan, 5.3 million tonnes to South Korea, 4.3million tonnes to China, 1.6 million tonnes to Brazil, 1.4 mil-lion tonnes to the U.S., 1.3 million tones to Germany and onemillion tonnes to Italy, as well smaller amounts to 13 othercountries. And metallurgical coal comprised 83 per cent ofall Canadian coal exports.Australia is the world leader in metallurgical coal produc-

tion and exports, and everyone else, says Stone, is waybehind the top three exporters. “And I don’t see that chang-ing, at least in the next three to five years,” he says.

Growth from coast to coastSo the country’s largest reserves, which are in Western

Canada, are in high demand. Not surprisingly, there has beena flurry of activity in the sector in recent years. In August,Fortune Minerals announced it had finalized a partnership forits Mount Klappan project with South Korea’s POSCO, theworld’s third largest steel producer. In the same month,Xstrata Coal announced it had purchased a metallurgical coalmining company in British Columbia, First Coal Corporation,for C$147 million. The acquisition provides Xstrata Coal withaccess to coking coal exploration leases in BC. But it is not Xstrata’s first metallurgical coal mining proj-

ect in Canada. Since 2006, the company has been workingon Cape Breton, Nova Scotia’s Donkin coal project, which isexpected to produce approximately 2.75 million tonnes perannum of washed export grade metallurgical coal when it isoperational.That project could add an interesting twist to the story of

metallurgical coal in Canada, since almost all metallurgicalcoal projects in the country – both operational and in devel-opment – are in British Columbia and Alberta. “The countryexports almost all its metallurgical coal,” says Stone. “Weimported 3.1 million tonnes of metallurgical coal from theU.S. in 2010 to be used in the Canadian steel industry, pri-marily in central and eastern Canada. The reason why it wasimported is essentially geography. Transportation costs from

the U.S. to central Canada are relatively lower compared totransporting coal from western Canada.”Last year, U.S.-based Walter Energy, Inc. acquired

Vancouver-based metallurgical coal producerWestern Coal Corp., which has mines in north-

east British Columbia, West Virginia,U.S., and in South Wales in the U.K. “Weliked [Western Coal’s] growth story andits plans to increase coking coal pro-duction volumes 133 per cent by2013,” said representatives for WalterEnergy at the time. Teck Resources Limited, the world’s

second largest exporter of seabornemetallurgical coal, with five mines in British

Columbia and one in Alberta, has said it is tak-ing steps to increase its production levels, ashas Alberta-based Grande Cache CoalCorporation, which holds coal leases covering

over 22,000 hectares in the Smoky River Coalfieldin west-central Alberta. In July, Grand Cache got approval toproceed with the development of a new underground oper-ation.Other new projects include the Raven underground coal

mine on Vancouver Island, being developed by an alliancebetween Compliance Energy Corporation, Itochu Corp. of

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Japan, and LG International Corp. of Korea. It will, if it pro-ceeds, produce metallurgical coal for export.

At the mercy of Mother NatureFor all the opportunities, the sector also has its chal-

lenges. “It takes so long for the industry to build thecapacity,” says Stone. “However, it is influenced by short-term fluctuations in the global market, because Canada’smetallurgical coal producers depend on foreign orders. Theindustry is a captive producer and the sector really has todeal with the fluctuations in global demands,” he explains. In fact, Canada’s metallurgical coal production declined

by almost eight per cent in 2009 due to the global recession.Another significant challenge to metallurgical mining isnature. Take Australia metallurgical coal production, forexample. This country’s production was temporarily devas-tated as a result of the floods that ravaged the eastern partof the country, although, as Stone points out, production andexports are almost back to normal.The reason the metallurgical coal sector can be so sus-

ceptible to the forces of nature is primarily because, moreoften than not, the coal needs to be hauled from remoteand underdeveloped regions to large ocean bulk terminalports for export within established seaborne trade routes.

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“Most of Canadian coking coal has very good quality char-acteristics,” says Gordon Gormley, who has developed anumber of Canadian and international coking coal proper-ties and is now acting as a private consultant. “Theproblem is that most of it is in the mountains in veryrugged terrain, having extreme temperatures, and needsbig equipment and big plants. Most of the coal requireswash plants, and that requires infrastructure, power andtailings ponds. You need rail and you need a town that’sclose enough to drive to it.”“Port capacity to handle new coking coal and the environ-

mental assessment process by federal, provincial, Aboriginaland occasionally U.S. federal and state agencies also posesignificant challenges for future developers,” says Gormley.“We need facilities that can handle shipments of up to150,000 tonnes, such as Westshore coal export terminalsouth of Vancouver, but it took a lot of time and money tobuild that. Fortunately, in northeast British Columbia,the Ridley Terminal has some excess capacity, which a lot ofpeople plan on using, but there’s still a limited port bottleneckissue if Canada is to develop all the coking coal it could. TheU.S. has commenced using Westshore Terminals for its coalexports as that country now faces similar port capacity short-ages as it tries to expand its own coal sales to Asian markets.”Meanwhile, resource nationalism is spreading to many

parts of the world and that, says Goad, is an issue the min-ing sector in general is facing. “This is particularly the case inmetallurgical coal,” he says. But in Canada, resource nation-alism in other countries has a silver lining when it comes tometallurgical coal – as long as Canadian governments arenot hit by the fever and start wanting a bigger piece of thepie through higher taxes and royalties, as it will only increaseworld demand. Overall, these are indeed exciting times forthe world’s third – sometimes second – largest producer ofmetallurgical coal. CIM

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TOP MET COALEXPORTERS 2010 est.

(millions of tonnes)

Australia 155United States 51Canada 27Russia 14Mongolia 11

TOP MET COALIMPORTERS 2010 est.

(millions of tonnes)

Japan 58China 48India 30Korea 28Brazil 12

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énergie et industrie

Le marché de l’énergieLe marché mondial est très prometteur pour les producteurs d’énergie canadiens;toutefois, il faut être en mesure de le percer

Le Canada, qui est doté de vastes gisements de char-bon, d’uranium, de gaz naturel et de pétrole brut, a lesressources nécessaires pour contribuer aux besoins

énergétiques de la planète. En 2010, les exportations d’én-ergie du pays, y compris l’électricité, ont rapporté90,7 milliards de dollars, ce qui représente près ducinquième de nos exportations globales. Presque la totalitéde ces revenus, dont la majeure partie découlait des ventesde pétrole, provenait des États-Unis, qui achètent environ97 pour cent des produits énergétiques du Canada.

Compte tenu de la solidité, de la durabilité et des avan-tages géographiques de ces liens commerciaux, onpourrait s’attendre à ce que l’avenir du secteur énergétiquecanadien soit radieux, sans une ombre au tableau. Or, laréalité n’est jamais aussi simple, et pratiquement rien n’estsimple lorsqu’il est question d’acheminer des centaines demilliers de tonnes de matières premières chaque jour.

Prenons l’exemple du pétrole : bien que la productioncanadienne de sables bitumineux ne cesse de prendre del’ampleur, les exploitants ont du mal à l’acheminer jusqu’auconsommateur � la capacité pipelinière vers la côte dugolfe du Mexique ne suffit tout simplement pas. SelonEsther Mui, analyste sectorielle indépendante et anciennevice-présidente principale, Pétrole et gaz, à l’agence denotation DBRS, les producteurs canadiens subissent déjàles effets négatifs du manque de capacité.

« Une grande partie du pétrole brut lourd canadien nese rend pas jusqu’aux raffineries du golfe du Mexique »,affirme Mme Mui.

Deux projets de pipeline sont prévus pour briser legoulot d’étranglement. Le premier est une proposition d’agrandissement de l’oléoduc Keystone XL parTransCanada Corporation.

Le projet Keystone XL, de 7 milliards de dollars, permet -tra d’augmenter à la fois la portée et la capacité du pipelineen vue d’acheminer du pétrole lourd du Canada vers desraffineries aux États-Unis. En résumé, le projet devrait per-mettre d’ajouter 500 000 barils par jour additionnels decapacité de transport, portant le total à 1,1 million de b/j.

Les exploitants de sables bitumineux, tel Cenovus,fondent de grands espoirs sur Keystone XL. Selon JessicaWilkinson, porte-parole de la société, Cenovus croit ferme-ment que le projet d’agrandissement de Keystone ira del’avant. Le plan stratégique établi sur 10 ans, annoncé parla société en 2010, visait au bas mot à quadrupler la pro-duction actuelle, la portant à 500 000 b/j d’ici la fin de2021. Mme Wilkinson affirme que ce nouveau plan prévoitl’accroissement anticipé de la production de la société.« Nous augmentons la capacité de production totale àFoster Creek de 270 000 à 290 000 b/j bruts, en augmen-tant la capacité des phases futures et en forant certainspuits stratégiques », a-t-elle expliqué. La société a égale-ment terminé son dernier agrandissement, la phase D de40 000 b/j à son exploitation de Christina Lake, au débutd’août, soit six mois avant la date prévue.

Bien que la priorité du projet Keystone soit d’approvi-sionner le marché des États-Unis plus efficacement, lesinitiatives en ce sens ne se font pas sans problème. En

L’établissement de Cenovus Energyau lac Christina

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2010, le Canada a exporté plus de 2,5 millions de b/j sursa production pétrolière de 2,8 millions de b/j – soit pasmoins de 89 pour cent – vers les États-Unis. Les fluctua-tions de la demande des États-Unis, tout comme cellesobservées en 2008 et 2009, constituent un sérieux risquepour les exploitants de sables bitumineux, qui doivent com-poser avec les contraintes liées à la géographie et auxinfrastructures pipelinières.

Pour remédier à cette situation, un autre projet de pipelineest proposé : le projet Enbridge Northern Gateway, de 5,5 mil-liards de dollars et de 1 177 km de long, reliant Bruderheim,en Alberta, à un nouveau terminal portuaire qui serait construità Kitimat, en Colombie-Britannique. Le pipeline de525 000 b/j permettrait au pétrole canadien d’être acheminéjusqu’aux marchés du littoral du Pacifique, où les niveaux depopulation et de revenu augmentent et où la demande de pro-duits pétroliers progresse et devrait continuer à croître.

Explorer de nouveaux marchésL’accès aux marchés étrangers est également vital pour

les exportateurs de charbon thermique du Canada. Par lepassé, la plus grande partie du charbon exporté par leCanada était le charbon de qualité métallurgique, pluslucratif, utilisé pour la fabrication de l’acier, mais la situationpourrait être en train de changer.

Allen Wright, président de l’Association charbonnièrecanadienne, attire l’attention sur le projet Vista que met aupoint Coalspur Mines Limited dans l’ouest de l’Alberta.D’après l’étude de préfaisabilité, une fois le projet achevéen 2014, Vista pourrait produire neuf millions de tonnes decharbon thermique aux fins de production d’énergie élec-trique, 90 pour cent de la production étant destinée àl’exportation. Le tonnage additionnel ferait plus que dou-bler les exportations de charbon thermique du Canada,lesquelles ont, l’an dernier, totalisé 5,6 millions de tonnes,la plupart destinées à des clients asiatiques.

Chris Borowski, responsable des relations avec lesinvestisseurs à Coalspur, ajoute que l’étude de faisabilitéactuellement en cours pour Vista vise à la fois à rehausserla production annuelle de façon à la porter à 10 millions detonnes, et à accroître la proportion de charbon destiné àl’exportation.

« Aux États-Unis, Arch Coal a signé une entente en vued’exporter son charbon du Powder River Basin à l’échellemondiale. Le charbon que nous croyions devoir vendre àl’échelle nationale est en fait de meilleure qualité que celui-là. Nous avions initialement prévu le vendre uniquement aupays parce que jamais ce type de charbon n’avait étévendu à l’échelle mondiale auparavant », a-t-il expliqué.

Ernie Lalonde, vice-président principal, Exploitationminière, à DBRS, souligne que, naturellement, pour s’im-planter sur le marché mondial, plus lucratif, lesexportateurs de charbon canadiens doivent d’abord avoiraccès aux ports maritimes.

« Ils doivent parcourir 1 200 km jusqu’à la côte, alorsque l’Indonésie et l’Australie et une foule d’autres paysexploitent du charbon le long de la côte et sont, par

conséquent, plutôt compétitifs », explique-t-il. Coalspur,qui, selon M. Borowski, s’attend à ce que ses coûts d’ex-ploitation s’établissent à 51,30 $/tonne, devradébourser 25,50 $/tonne de plus en frais ferroviaires etportuaires. Toutefois, contrairement aux producteurspétroliers, les producteurs de charbon ne peuvent pasvraiment se tourner vers nos voisins du sud pour trouverdes clients.

Le littoral du Pacifique est le marché le plus probable. M. Lalonde cite l’exemple de l’Indonésie : « Ce pays abesoin de charbon pour répondre aux besoins d’énergieà l’échelle locale, parce que la population indonésienneest importante et en pleine croissance et qu’elle requiertplus d’énergie. On s’attend à ce que tôt ou tard, sesexportations vers le marché du charbon thermique pla-fonnent, voire même soient inversées par la demandeintérieure. »

Un autre marché important est l’Inde, qui l’an dernieraffichait le taux de croissance du PIB le plus élevé aumonde, soit 10,4 pour cent. Le gouvernement indien s’estengagé dans un ambitieux programme d’électrification etprévoit ajouter plus de 80 000 MW entre 2012 et 2017.Les fournisseurs de charbon seront donc les bienvenusdans la région du littoral du Pacifique pendant de nom-breuses années à venir.

Changer les mentalités au paysLe charbon canadien pourrait bientôt, du moins à pre-

mière vue, recevoir un accueil moins enthousiaste au pays.Une nouvelle réglementation prévoit des limites d’émissionplus sévères en ce qui a trait aux centrales au charbon. « Ilfaudra une solution technologique pour corriger le prob-lème des émissions de gaz carbonique », estime ErnieLalonde. « Ainsi, des gens se retrouvent avec de vastesressources de charbon impropres à l’exportation etcherchent des façons de remédier au problème des émis-sions de CO2 et de faire avancer des initiatives axées surle captage de carbone, entre autres », conclut-il.

Comme M. Lalonde, Allen Wright a grandement confi-ance dans les percées technologiques. Mais il insisteégalement sur le fait que le charbon est une ressource tropimportante pour être négligée. Il cite une récente étudemenée par l’Energy Information Agency qui prévoit quemême en 2035, pas moins de 44 pour cent de l’électricitédes États-Unis proviendra du charbon.

« Je ne crois pas que les centrales au charbon pourrontdisparaître. Les gouvernements doivent faire leur part etoffrir leur soutien à tous les secteurs énergétiques, passeulement le charbon, jusqu’à ce que la technologie con-fère un avantage concurrentiel », dit-il.

L’utilisation plus efficiente et à plus faible intensité encarbone du pétrole et du charbon du Canada sera sûre-ment un processus long et exigeant. Reste à voir si latechnologie sera aussi fructueuse que l’espèrent MM.Lalonde et Wright. Cependant, une chose est sûre : grâceà ses ressources, le Canada est un chef de file en matièrede production énergétique. ICM

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Pour un exemple de dynamisme économique, on n’aqu’à regarder du côté de l’industrie des sables bitu-mineux de l’Alberta. Depuis 2005, la production de

pétrole brut synthétique et de bitume extraits des sablesbitumineux a cru de presque 40 pour cent. L’expansion decette industrie se poursuivra certainement au cours desannées à venir; dans le contexte de l’incertitude apparenteconcernant les approvisionnements en pétrole provenantd’autres continents, les États-Unis ont intérêt à maintenirleurs propres ressources pétrolières à leur disposition, etl’industrie des sables bitumineux mise sur les besoins dece marché.

« On prévoit que la vaste majorité des nouveaux appro-visionnements en pétrole du Canada proviendront dessables bitumineux », déclare Greg Stringham, vice-prési-dent à l’exploitation des sables bitumineux de l’Associationcanadienne des producteurs pétroliers (ACPP). Cet organ-isme prévoit que, vers 2025, la production desexploitations de sables bitumineux augmentera à 3,7 mil-lions de barils équivalents de pétrole par jour, par rapport à1,5 million en 2010.

Environ un tiers de la croissance estimée proviendra del’exploitation à ciel ouvert, bien que, sur la base de leur expéri-ence, les principaux producteurs soient d’avis que ledéveloppement et l’expansion des gisements en temps oppor-tun et dans les limites budgétaires prévues ne sont pas destâches faciles. Les fluctuations du prix du pétrole, les coûtsélevés et les préoccupations environnementales ont étalé les

calendriers des projets de construction en cours. Toutefois, lesexploitants sont sûrs que leurs plans seront réalisés.

Nouveaux règlements pour la remise en état des sites

Les entreprises d’extraction de sables bitumineuxeffectuent des travaux de recherche et de développementsur les technologies de gestion des stériles, mais l’étab-lissement d’objectifs et d’échéanciers spécifiques parl’Office de conservation des ressources énergétiques(ERCB) de l’Alberta a accéléré et réorienté leurs efforts derecherche. Syncrude Canada Ltd, qui utilisait déjà desstériles composites et étudiait des solutions pour limiter l’u-tilisation d’eau, a entrepris l’étude d’une technologie decentrifugation en réponse aux nouvelles directives. « Cettetechnique d’assèchement des stériles est plus rapide queles autres technologies », explique Cheryl Robb, conseillèreen relations avec les médias chez Syncrude.

Pour la Compagnie Pétrolière Impériale ltée, ces règle-ments nécessitent la révision de son projet d’exploitationminière de Kearl et une nouvelle demande d’approbationpour celui-ci, qui avait reçu une première approbation en2009. Cette entreprise, qui est toujours à la recherche detechnologies acceptables de traitement des stériles, aobtenu de l’ERCB un délai supplémentaire pour se con-former aux exigences, jusqu’en 2018, à la condition de lesdépasser par la suite. La première phase de production deKearl doit commencer vers la fin de 2012.

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Les exploitants de sables bitumineux cherchent à consolider leur assise pendant une période de changements économiques, sociaux et réglementaires

Une question d’équilibre

La canalisation d’hydrotransport mèneau séparateur primaire d’Aurora.

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Ce n’était pas le seul incitant pour la révision du projet,déclare Pius Rolheiser, porte-parole de l’Impériale. Il leurfaut diminuer de trois à deux le nombre des étapes de laconstruction, ce qui permettra de limiter les infrastructuresrequises pour la construction et de réduire au minimuml’empreinte environnementale du site. Cette exploitationdevra produire initialement 110 000 barils par jour, pourpasser à 170 000 après la période de rodage. Le bitumeobtenu, purifié par un traitement à la mousse paraffinique,pourra ensuite être expédié directement aux raffineriessans autre traitement. Au cours de la phase 2, il leur fau-dra accroître la production jusqu’à 345 000 barils par jour.

Une expansion prudenteParce que les contrats de Kearl ont été conclus en

2009, l’entreprise a évité une période de surchauffe dumarché de la construction qui a fait augmenter les coûtsd’investissements des producteurs. En plus d’attirer desinvestissements dans les entreprises d’exploitation dessables bitumineux, des prix élevés du pétrole se répercu-tent sur la demande de base de produits comme l’acier etle béton. Comme il s’agit d’une industrie à coûts élevés età faible marge de profit, s’il y a trop de coûts liés à l’infla-tion, les producteurs doivent renoncer à leurs projets oufaire face à d’importants dépassements budgétaires.

La Canadian Natural Resources Limited (CNRL), tirantdes leçons des coûts élevés de la phase 1 de son projetd’extraction et de développement minier d’Horizon, a prisdes mesures afin de limiter la croissance des coûts pourles prochaines étapes de développement. Après avoir sub-divisé les travaux qui restent à faire en 46 projets distincts,elle entreprendra ou suspendra les travaux de constructionen fonction des conditions du marché et n’entreprendra denouveaux développements que s’il y a de bonnes raisonsd’en attendre un rendement du capital positif, et sansétablir d’échéances. La CNRL a aussi établi des lignesdirectrices limitant la main-d’œuvre pour la construction à5 500 personnes et ses dépenses annuelles à 2,0-2,5 mil-liards de dollars.

Après un démarrage difficile au début de l’année,notamment à cause d’un incendie sur le site, la CNRL aretrouvé son rythme de croisière. Vers la mi-août, son usinede traitement de pétrole brut a été remise en production eta repris ses livraisons de brut synthétique peu après.Ultérieurement, la CNRL devrait augmenter sa productionà 250 000 barils par jour, et sa capacité finale, aprèsd’autres travaux de développement, pourrait atteindre les500 000 barils par jour.

Sortie du coconSuncor Energy Inc. annonce des progrès pour la con-

struction de ses installations de traitement des sablesbitumineux. Dans la foulée de l’acquisition d’une participa-tion de 49 pour cent par Total E & P, elle a réactivé le projetVoyageur, un élément majeur de sa stratégie de croissance,dont l’exécution avait été suspendue en 2008 à cause dela crise financière. Ce projet a un budget d’équipement de

260 millions de dollars pour 2011 et l’entrée en productionest prévue pour 2016. Avec une capacité prévue d’environ200 000 barils par jour, ce projet rendra possible unaccroissement de la production de projets in situ et auxfutures exploitations de Fort Hills et de Joslyn.

« Nous en sommes encore aux étapes préliminaires dela planification », déclare Dany Laferrière, directeur desrelations avec les médias chez Suncor. « Les travauxd’ingénierie et de préparation des sites des projets FortHills et Voyageur devraient aller de l’avant jusqu’à la fin decette année. »

Entretemps, Suncor poursuit le projet de développe-ment de la North Steepbank (North Steepbank Extension- NSE), qui doit prolonger la vie active de ses exploitationsde Millennium et de Steepbank, et diminuer les frais d’ex-ploitation en réduisant les parcours et les bouchons decirculation.

Anne Marie Toutant, vice-présidente à l’exploitationminière, dit en attendre également des effets positifs pourl’environnement : « L’augmentation de l’efficacité et ladiminution des temps de camionnage bruts qui en résul-tent sont bénéfiques pour l’environnement grâce à uneréduction de la consommation d’énergie et des émissionsd’oxydes d’azote et de dioxyde de soufre pendant les dixannées de la durée de vie du NSE. »

Vers la fin de 2011, d’autres travaux seront achevés.Selon Mme Toutant, ce sont notamment la mise en servicede la centrale électrique de la NSE, la mise en place deligne électrique de la fosse et la construction d’installationsd’entretien sur place pour les petits travaux de réparationet les services. L’enlèvement du mort-terrain de la fosse dela phase 1 sera alors terminé, la fosse de la phase 2 seracreusée et la principale voie de transport sera construite.

Une industrie résilienteBien que les stratégies favorisent les techniques de pré-

fabrication et des plans de construction flexibles prévoyantdes mesures de limitation des coûts, il est probable que lesdifficultés fondamentales ne disparaîtront pas, car depuisses débuts, cette industrie a été caractérisée par desmarges étroites. Au lieu de s’atténuer, les préoccupationsrelatives à l’environnement devraient augmenter, et si ellesentraînent encore d’autres mesures réglementaires, lesresponsabilités des exploitants ne peuvent que s’accroître.

Par ailleurs, un certain nombre d’intervenants sontdéterminés à surmonter ces obstacles pour tirer parti decette grande ressource. Celle-ci représente maintenantune part importante de l’économie de l’Alberta et une por-tion significative des investissements d’affaires, ayantrapporté plus de 3 milliards de dollars à cette province pourl’année financière 2009-2010. De plus, le gouvernementHarper soutient l’industrie des sables bitumineux et fait dulobbying en faveur de celle-ci. Enfin, l’insatiable appétit dumonde entier pour le pétrole assure des perspectivesintéressantes pour toutes les entreprises qui mettent enœuvre des moyens réalisables pour sa production, quelsqu’ils soient. ICM

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Qualité industrielleEntrepreneurs et exploitants de charbon métallurgique ciblent la croissance

énergie et industrie

à la croissance de la demande », dit Robin Goad, président-directeur général de Fortune Minerals Limited, uneentreprise basée à London, Ontario, dont le projet MountKlappan dans le nord-ouest de la Colombie-Britanniquecontient 2,8 milliards de tonnes de charbon anthraciteuxqui sera mis en valeur, lorsque pulvérisé pour être injectédans des hauts fourneaux, en raison de sa faible volatilitéet de son contenu énergétique élevé. « La Mongolie etl’Afrique du Sud possèdent de vastes gisements, mais laproduction indienne d’acier brut devrait quadrupler aucours de la prochaine décennie », dit-il. « La productionbrésilienne d’acier brut devrait aussi quadrupler au coursdes 20 prochaines années. Au Japon et en Corée du Sud,la croissance de la demande de charbon augmente d’env-iron trois pour cent par année et quelques fournisseurstraditionnels ne vendent plus. »

Les trois grandsDurant la dernière décennie, le prix du charbon métal-

lurgique a augmenté considérablement; d’environ 40 dollarsla tonne, il est passé à près de 230 dollars la tonne cetteannée. Selon le Groupe AME, une entreprise mondiale d’é-conomistes dans les industries des métaux et des minéraux,c’est une bonne nouvelle pour les quelque 20 mines decharbon métallurgique au Canada — en exploitation et en

Le boom d’infrastructures est arrivé. Selon lesMarchés mondiaux CIBC inc., ce boom engendrerade 25 à 30 billions de dollars en investissements

pour de nouvelles infrastructures au cours des 20prochaines années. Ce boom est en partie une réactiondes gouvernements mondiaux, incluant le Canada, à lacrise financière de 2008 et à la première récession inter-nationale; ces gouvernements ont promis des billions dedollars en dépenses pour les infrastructures afin de créerdes emplois et de stimuler l’économie. Les pays dévelop-pés possèdent des infrastructures, cependant celles-cisont vieillissantes; quant aux pays émergeants, ils doiventse développer et construire de nouvelles infrastructuresafin de répondre à la croissance et à la demande. D’unemanière ou d’une autre, donc, des infrastructures serontconstruites.

Là où il y a construction d’infrastructures, il y a unbesoin pour des charbons de grande qualité, lesquels, avecle minerai de fer, constituent les ingrédients clés requispour fabriquer du métal. En effet, selon la World CoalAssociation, plus de 60 pour cent de la production mondi-ale totale d’acier dépend du charbon métallurgique.

Du point de vue des aciéristes et de leurs clients, il s’agitlà d’un énorme problème. « Il n’y a pas assez de productionde charbon métallurgique à travers le monde pour répondre

Mont Klappan, la propriété de Fortune Minerals.

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développement. Les produits combinés des mines en pro-duction font du Canada le deuxième plus importantexportateur de charbon métallurgique au monde. Du moinsétait-ce le cas jusqu’à l’an dernier, lorsqu’il a pris letroisième rang, derrière les États-Unis.

« Traditionnellement, les États-Unis constituent unimportant producteur de charbon métallurgique, mais nousles considérons comme un producteur d’appoint », ditKevin Stone, analyste principal des produits minéraux pourRessources naturelles Canada. « Lorsque le marché estbon, les États-Unis exportent plus, et ils exportent moinslorsque le marché est moins bon. Pour le moment, lemarché est bon. »

En 2010, les compagnies canadiennes ont exporté 8,6millions de tonnes de charbon métallurgique au Japon, 5,3millions de tonnes en Corée du Sud, 4,3 millions de tonnesen Chine, 1,6 million de tonnes au Brésil, 1,4 million detonnes aux États-Unis, 1,3 million de tonnes en Allemagneet un million de tonnes en Italie, en plus de quantités moin-dres dans 13 autres pays. Le charbon métallurgiqueconstituait 83 pour cent de toutes les exportations canadi-ennes de charbon.

L’Australie est le leader mondial en production et enexportation de charbon métallurgique et tous les autressont loin derrière les trois principaux exportateurs. « Je neprévois pas de changement dans ce classement, du moinspas au cours des prochains trois à cinq ans », dit M. Stone.

Croissance d’un océan à l’autre Les réserves les plus importantes du pays, dans l’Ouest

canadien, sont en grande demande. Ce secteur a doncconnu beaucoup d’activité au cours des dernières années.En août dernier, la compagnie Fortune Minerals annonçaitqu’elle avait formé, pour son projet Mount Klappan, unpartenariat avec la firme sud-coréenne POSCO, letroisième plus grand producteur d’acier au monde. Aucours du même mois, Xstrata Coal annonçait l’achat d’unecompagnie d’extraction de charbon métallurgique en C.-B., la First Coal Corporation, pour la somme de 147millions de dollars (canadiens). Cette acquisition luidonne accès aux baux d’exploration pour le charbon àcoke en C.-B. Cependant, il ne s’agit pas du premier pro-jet de mine de charbon métallurgique d’Xstrata auCanada. Depuis 2006, la compagnie travaille au projetDonkin Coal sur l’île du Cap-Breton, en Nouvelle-Écosse;lorsque la mine sera en production, on prévoit produireenviron 2,75 millions de tonnes de charbon à coke lavé degrade exportation par année.

L’an dernier, la compagnie américaine Walter Energy Inc.a acquis le producteur de charbon métallurgique WesternCoal Corp., qui est basé à Vancouver et possède des minesdans le nord-ouest de la C.-B., en Virginie de l’Ouest, auxÉtats-Unis, et dans les Galles du Sud, au Royaume-Uni.« Nous aimons l’historique de croissance de Western Coalet ses plans d’accroître le volume de production de char-bon à coke de 133 pour cent d’ici 2013 », avait alors ditWalter Energy.

Teck Resources Limited, qui possède cinq mines en C.-B., une en Alberta et est le deuxième plus importantexportateur maritime mondial de charbon métallurgique, aannoncé que la compagnie entreprenait des démarchespour augmenter ses niveaux de production, tout commel’albertaine Grande Cache Coal Corporation, qui détientdes baux miniers sur le charbon couvrant plus de 22 000hectares dans le champ houiller Smoky River du centreouest de l’Alberta et qui a obtenu l’approbation de com-mencer le développement d’une nouvelle mine souterraineen juillet.

D’autres projets concernent la mine souterraine decharbon Raven sur l’île de Vancouver; cette dernière estactuellement en voie d’être développée par une allianceentre la Compliance Energy Corporation, Itochu Corp., duJapon, et LG International Corp., de la Corée; si elledémarre, elle produira du charbon métallurgique pour l’ex-portation.

À la merci de Dame NatureLa récession mondiale a grandement touché les pro-

ducteurs de charbon, mais la nature a constitué un autredéfi significatif pour l’exploitation du charbon. En Australie,la production a été compromise par les inondations qui ontravagé la partie est du pays plus tôt cette année, maisheureusement , comme le souligne M. Stone, la productionet les exportations sont presque revenues à la normale.

La raison pour laquelle le secteur du charbon métal-lurgique est à ce point soumis aux forces de la nature estsurtout que pour être exporté, plus souvent qu’autrement,le charbon doit être acheminé d’endroits éloignés, nondéveloppés, vers des ports. « Le charbon à coke canadienest en général de très bonne qualité », dit Gordon Gormley,qui a développé de nombreuses propriétés canadiennes etinternationales et travaille maintenant comme consultantprivé. « Le problème est qu’il se trouve en montagne, sur unterrain très accidenté, où il fait très froid et, pour l’extraire,il faut beaucoup d’équipement et de grandes usines. Laplupart du temps, le charbon doit aussi être lavé, celanécessite donc certaines infrastructures, des centrales etdes bassins de résidus. Vous devez aussi avoir un cheminde fer et une ville assez proche pour qu’on puisse accéderau site en voiture. »

« La capacité portuaire pour manutentionner le char-bon représente aussi un défi important pour lesdéveloppements futurs », ajoute M. Gormley. « Nousavons besoin d’installations qui peuvent manutentionnerdes chargements atteignant 150 000 tonnes. Il s’agit degrosses installations et le terminal d’exportation de char-bon Westshore en est un exemple typique, mais il a étélong et coûteux à construire. Heureusement, dans lenord-ouest de la Colombie-Britannique, le terminal con-struit dans les années 1980 a encore de la capacitéexcédentaire et plusieurs planifient l’utiliser; cependant leCanada aura encore un problème de congestion portu-aire s’il doit produire plus de charbon à coke, ce qu’ildevrait par ailleurs faire. » ICM

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commodity focusnatural gas

“George Mitchell is regarded as kindof the father of this [unconventional]technology,” says Dan Cohn, a seniorresearch scientist at MIT andexecutive director of the school’snatural gas study. Cohn says Mitchell,the founder of Mitchell Energy &Development Corp., pioneered thecombination of hydraulic fracturingand horizontal drilling for commercialproduction in the 1980s and 1990s; in2001, he sold the company to DevonEnergy for $3.5 billion.

Today, hydraulic fracturing andhorizontal drilling accounts for 30 percent of Canadian production and 40per cent of production in the UnitedStates. With unconventional gasproducers like Mitchell and XTOEnergy being purchased by major

corporations (Devon is one of the largest independent oiland gas producers in the U.S., and XTO was bought byExxon for $41 billion in 2009), the term unconventional isbecoming a misnomer.

In 2009, global natural gas consumption was around 107TCF per year, according to estimates from the EIA;projections to 2020 foresee consumption increasing by 1.8per cent per year, tapering to a 0.9 per cent increase from2020 through to 2035. Unconventional techniques willfigure most prominently in North America’s future, wherethe U.S. is expected to account for over 85 per cent of globalproduction growth to 2035.

“Predictions are that by 2030, tight gas and shale gas couldbe 70 to 80 per cent of North America’s natural gas supply,”

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BURNING AMBITION

Natural gas liquifaction facility

Once burned off as a byproduct of oil production, nat-ural gas has found new life in the 21st century, andthe industry has its sights set high. Thanks to techno-

logical innovations, there is more of it available than ever, afact that is ushering in a paradigm shift in global energy sup-ply. With uses from electricity to public transportation to fer-tilizer for crops, natural gas is clean burning, efficient, abun-dant and well-positioned to gain prominence.

Unconventional beautyConventional gas wells are drilled vertically and accesspockets of gas trapped in porous sedimentary rock. Incontrast, unconventional wells are drilled horizontally andare aimed at coalbeds, shales and tight sands, which arenon-porous and need to be fractured before they releasetheir gas. While conventional resources are still the baselinefor the industry (the majority of the natural gas consumed inthe world is still derived from conventional wells), that isalready changing.

The U.S. Energy Information Administration (EIA) estimatesthere are over 6,000 trillion cubic feet (TCF) of provennatural gas reserves globally. But the U.S. NationalPetroleum Council gauges global unconventional gas-in-place to be at 33,000 TCF – over 6,000 TCF are technicallyrecoverable with today’s technology, although mostlyunproven. These would all make use of unconventionaldrilling techniques – combined with hydraulic fracturing –which are now capable of efficiently extracting resources inareas that were never previously considered economical.

by PETER BRAUL

NATURAL GAS PRODUCTION IN CANADA - 2010

Nova Scotia 100 367*

New Brunswick 5,797

Ontario 5,596

Saskatchewan 170,912

Alberta 3,687,744

British Columbia 982,872

NWT/Yukon 6,754

Total 4,960,043* thousands of cubic metres/day

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says Michael Binnion, president and CEO of QuesterreEnergy. “We’re really entering into a major paradigm shift,not just in energy markets, but for society too.”

Resistance to changeThe response to unconventional drilling has been a mix ofexcitement and skepticism. Opponents of horizontal drillingand hydraulic fracturing have been vocal about their fearover ecological consequences, despite 30 years ofcommercial production experience and commitment fromindustry leaders to maintain best practices.

The largest controversy in North America is occurring inareas that have traditionally been importers of oil and gasand are heavily populated, such as the St. Lawrencelowlands in Quebec and the Marcellus Shale in theAppalachian Basin of the northeastern United States. InMay, the Quebec government announced that explorationwill be put on hold for 30 months while environmentalimpacts are assessed. This is a setback for Binnion, andQuesterre, which has over one million prospective grossacres in the province’s shale gas plays.

“Quebec currently imports all of its natural gas from Albertaand British Columbia,” says Binnion, who points out that asignificant amount of shale gas is already consumed byQuebecers. “If you really care about the environment, youshould produce your energy locally because then [theprovince] can know, control and trust how its energy isproduced,” he adds.

Regional pricing, global supplyThere are 48 known shale basins in 32 different countries,and there is still considerable uncertainty about the priceand quantity of gas that will be produced from them. As aresult, making predictions about the shape of markets andthe relationships between them has become increasinglydifficult. “There are three liquid natural gas import terminalsin Canada alone that were cancelled because of shale gas,”recalls Binnion.

Cohn and his colleagues at MIT found that there are threeseparate regional natural gas markets in the world, NorthAmerica, Europe and Asia, each with unique supply andtransport options. “In Asia, [the price of] natural gas, on anenergy basis, has been coupled relatively closely to that ofoil; in Europe, it’s kind of in between; and in the UnitedStates, there has been a significant decoupling,” heexplains. This makes natural gas significantly cheaper inNorth America than elsewhere, for the time being.

As North America is set to become a net exporter of naturalgas for the first time in history, all eyes are on Asia and, inparticular, Japan to receive the North American supply.Japan’s imports alone account for 10 per cent of the globaltotal, and all of it arrives as liquid natural gas (LNG). There are25 import terminals operating there, with six in construction

September/October 2011 | 67

M4S• MINING• MINERALS• METALS• MATERIALS

mining foR sociETy

or planned. Close to half of the world’s LNG exports areused to fuel Japan’s energy sector, a statistic that ispredicted to increase due to the recent nuclear crisis in thatcountry. Binnion believes that an export infrastructure fitswell with further shale gas development in North Americaand that it would have a levelling effect on the global prices.

Not a pipe dream anymoreLiquefying natural gas adds an extra $4 per million BTU tothe cost, according to Cohn, due to the energy required tocryogenically treat and transport the gas. But over time, thatfigure is becoming workable, and plans to build an LNGexport facility on the Pacific Coast are going ahead smoothly.

Kitimat LNG, a project based in Kitimat, British Columbia, isowned by a partnership between Apache Canada, EOGResources Canada and Encana Corporation. Between them,they also own the Pacific Trail Pipeline Limited Partnership,which is developing the transmission system that willeventually link the partnership’s 19 TCF in resources from theWestern Canadian Sedimentary Basin to the Kitimat facility.

The Kitimat LNG project will have an initial capacity of fivemillion tonnes per year of LNG output, with the potential todouble that figure. The target for the first shipment is 2015,and last July, the company announced that it had entered intoan agreement to purchase an industrial site in Kitimat, wherethey hope to stage a work camp, lay-down and storage areaas development moves ahead. CIM

The nitrogen fixation fixEarly in the 20th century, farmsaround the globe had troubleunderfoot – literally. Withpopulations growing, fixingnitrogen for crops by traditionalmeans was limiting production. Thankfully, in 1909,German chemist Fritz Haber developed a way to produceammonia from nitrogen and methane gasses. Histechnique, known as the Haber Process, won him theNobel Prize in 1918, and is now responsible for producing500 million tonnes of nitrogen fertilizer every year.

Nearly all of the methane used in the Haber Processcurrently comes from natural gas, and accounts for aboutthree to five percent of global consumption. That is energywell spent – enough fertilizer is now made using theHaber Process to sustain a third of the earth’s population.

Page 68: CIM Magazine September/October 2011

COLUMNS | supply side

The June 1, 2011 issue of The Globeand Mail carried part 1 of a 12 partseries on export trade and emergingmarkets. An article based on the viewsof Peter Hall, Export DevelopmentCanada’s (EDC’s) chief economist,reveals some interesting new trends inCanada’s export trade.

Based on an extrapolation of recentdata, the percentage of our trade withemerging markets could easilyapproach 35 per cent, or more, by2020. Given the poor performance ofthe economies in our traditional mar-kets, this is a good thing indeed. Ourfavourite trade partner has been theUnited States, which absorbed asmuch as 85 per cent of Canada’sexports. This has now fallen to 75 per cent.

From 2003 to 2007, our dollar roseby eight to nine per cent annually overthe US dollar and our total trade activ-ity grew very slowly, by 2.1 per centannually, on average. While exportactivity in traditional markets hasgrown by 1.3 per cent annually since2008, the growth of exports to emerg-ing markets has grown by 12.3 percent annually.

Through extrapolation, Hall arrivesat a 35 per cent growth rate of exportsto emerging markets in the next nineyears; however, he believes that “withconcerted effort Canadian businessescould accelerate this growth by anadditional three per cent annually.” At15.3 per cent growth “it would takenon-traditional trade to half ofCanada’s global trade by 2025.”

Hall believes that awareness is thekey. “A large share of Canadian firmsbelieve their opportunities in emerg-ing markets are limited,” he says. “Ifeven a fraction of these companiesventure into the broader worldbeyond their traditional markets,imagine the impact.”

Canada’s trade pattern is diversifyingMining can lead the way� Jon Baird

The more than 300 CAMESE mem-ber firms are well aware of the interna-tional opportunities available in themining sector. They know that of the10,000 Canadian exploration projectsand mining operations, globally, halfare outside of Canada, in more than100 countries. They also know that iftheir products and technologies satisfyour domestic market, they are highlycompetitive elsewhere.

CAMESE members are increasingtheir interest in foreign markets, ridinga rising tide of exploration and miningactivity in the world. For example, ourspace in Canada pavilions at this year’smining exhibitions in Argentina,Chile, Australia, Peru, Brazil and Mex-ico is up 35 per cent from previous lev-els at the same shows.

Within the Canadian supply sector,there may be 1,000 companies offeringspecialized mining goods and servicesthat have the latent capabilities ofincreasing their export performance.How do we switch on this potential?

EDC is doing its part. Commentslike Hall’s in the The Globe and Mailarticle and the support of EDC on theCanada pavilions organized byCAMESE at international mining exhi-bitions prove this. Hall cites the Cana-dian Trade Commissioner Service asan important partner, as itsurely is; however, it is cur-rently understaffed andunderfunded.

Hall also cites the role ofinternational trade associa-tions. Indeed, 95 per cent ofCAMESE’s effort is directed athelping member firms marketto the mining world. How-ever, unlike in other devel-oped nations, there are fewother sectoral associations inthis country that are so dedi-cated to export trade.

68 | CIM Magazine | Vol. 6, No. 6

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

author

Jon Baird, managingdirector of CAMESEand the immediatepast president ofPDAC, is interestedin collectiveapproaches toenhancing theCanadian brand inthe world of mining.

What is missing is federal govern-ment leadership to organize a nationaleffort to brand Canadian exports sec-tor by sector. While the government isdoing its job in negotiating free tradeand foreign investment protectionagreements, we are falling behind inthe collective aspects of export marketpromotion.

Individual companies have to dotheir own marketing and certainly theselling; however, our brand needssomething that is more than the “sumof the parts.” Only leadership fromOttawa and collective action can bringthis about.

The point is made in another arti-cle in the The Globe and Mail series.Stefan Lupke, executive vice-presi-dent of Corma, an Ontario exporterof corrugated plastic pipe manufac-turing machinery, refers to the needto brand Canada as a “mechanicaland technical” leader. “Many of ourmajor projects provide water infra-structure, for which demand contin-ues to grow in India, Africa, Chinaand Central and South America,”Lupke says. “But our major competi-tors are German companies, so we’re always fighting that ‘Made in Germany’ brand, which is verystrong.” CIM

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With the strength of mineral and oilprices over the past decade, muchattention has been paid to the return-to-resources trend within the Canadianeconomy. Many factors have driventhis development.

The decline of the Canadian manu-facturing sector has certainly con-tributed – the manufacturing share ofthe economy has declined from around21 per cent in the 1980s to 13 per centtoday. Within this sphere, auto manu-facturing levels have fallen signifi-cantly. The collapse of the informationand communications technology (ICT)investment cycle in the 1990s and sub-sequent declines or takeovers of majorCanadian ICT players further rein-forced this shift.

On the positive side of the ledger, thestaggering development of the Chinesemanufacturing economy, among others,has driven a major global effort to find,develop, produce and transport naturalresources to meet global demand – withCanada being a major beneficiary.

The acceptance of the return-to-resources phenomena within Canadahas been grudging in some circles.There remains a sense in academic andpolicy spheres that Canada is returningto its economic origins as hewers ofwood and drawers of water. The rela-tive merits of the resource develop-ment arguments make for interestingdebate, although it should be said thatthe high technological sophisticationof Canada’s resource development clus-ter has never been adequately recog-nized by debaters.

The return-to-resources realitywithin Canada has brought with it anarray of economic benefits and spin-offs, many of which have been high-lighted in my past columns in CIMMagazine. For example, the Canadianmining industry accounted for 21 percent of Canada’s merchandise exports in2010, with multi-billion dollar export

revenues associated with many separatecommodities. The resulting benefit tosuppliers – railway companies, engi-neering firms, equipment companiesand so forth – are also significant. A sec-ond noteworthy benefit, among others,is the fact that the mining sector consti-tutes the largest private employer ofAboriginal Canadians, with associatedbenefits in jobs, training and commu-nity development. Significant mutualpotential and benefit also lies ahead inthis aspect of the industry.

The Mining Association of Canada(MAC) recently released its annualstudy of the level of payments made bythe mining industry to Canadian gov-ernments. The report, prepared forMAC by ENTRANS Policy ResearchGroup, details the direct revenues thataccrue to government from the indus-try in the form of corporate taxes, roy-alties and employee income taxes. Thestudy is available at: www.mining.ca.

Among the report highlights, theCanadian mining industry paid $8.4billion to Canada’s federal, provincialand territorial governments in 2010.While this level is lower than the $10billion figures of 2007 and 2008, it hasincreased dramatically (65 per cent)from the $5.1 billion level of 2009. Infact, the figures generally illustratethat the tax and royalty system inCanada works relatively well – gener-ating lower revenues from the indus-try during economically turbulentyears such as 2009 and stronger levelsin growth years such as 2010.

The ENTRANS datadoes not include revenuesassociated with the fabri-cated metal products sec-tor, although the federalgovernment definition ofthe “mining and mineralmanufacturing” industrydoes include this fourthsegment. MAC’s view is

COLUMNS | MAC economic commentary

Tax and royalty revenues to governments A benefit of the return-to-resources trend in Canada� Paul Stothart

70 | CIM Magazine | Vol. 6, No. 6

author Paul Stothart is vice-president, economic affairs, at theMining Association of Canada. Heis responsible for advancing theindustry’s interests regardingfederal tax, trade, investment,transport and energy issues.

that most activities within this segmentare not closely connected to the min-eral extraction or processing spheres.Nonetheless, it is worth noting thatbusinesses in this segment generatedan additional amount of $1.8 billion inrevenues to governments in 2010.

The ENTRANS data also does notreflect the indirect revenues that wouldbe associated with mineral financing,exploration, development, extraction,processing and transportation inCanada. While further study and analy-sis is needed in this respect, there arerough estimates suggesting that a mul-tiplier for these indirect benefits wouldfall in the 2.0 to 2.5 range, which couldsuggest a further $20 billion in govern-ment revenues being associated withthe Canadian mining cluster.

The ENTRANS report provides ameasure of the royalties and similar pay-ments accruing to each province and ter-ritory. From this data, it is evident thatrevenue flows are particularly importantto Newfoundland and Labrador,Saskatchewan, Alberta, British Colum-bia and the Northwest Territories. Largemining sectors and impressive futureinvestment plans are also seen inOntario and Quebec. Indeed MAC hasestimated that some $110 billion in min-ing-related projects have been proposedin Canada for development over thecoming years. This sense of economicconfidence augers well for Canadiangovernments, given the future revenueflows that would be associated withthese proposed projects. CIM

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References: http://albertasecurities.com/Companies/Pages/OilGas.aspx; CanadianOil and Gas Evaluation Handbook (COGEH), Volumes 1, 2 and 3, available fromhttp://www.spe.org/canada/pages/general/canadian_pubs.php

COLUMNS | standards

72 | CIM Magazine | Vol. 6, No. 6

National Instrument 51-101 (NI 51-101), which governsthe disclosure of oil and gas activities for securities regula-tory purposes in Canada, was implemented in 2003, withadditional guidance provided in a Companion Policy and inCanadian Securities Administrators (CSA) staff notices.Amendments to NI 51-101 were made in 2003, 2007 and2010 and, as a result of the ongoing significant changes inthe oil and gas industry, further amendments are under con-sideration, possibly for the end of 2012.

Oil and gas resource classification Oil and gas resource classes that may be disclosed are:

• Reserves, which are discovered and commercially viableto produce.

• Contingent resources, which are discovered but cannot beproduced because of one or more contingent factors, suchas economic or legal factors or lack of access to markets.

• Prospective resources, which are not yet discovered butare an estimate of what might be recovered if a discoveryis made.The uncertainty in each of these resource classes is cap-

tured by categorizing the estimates as low, best and high,where P90 indicates that there is at least a 90 per cent prob-ability of recovering more than the estimated volume (e.g.,of Proved reserves); P50 indicates that there is a 50 per centprobability of recovering more (or less), etc.

National Instrument 51-101NI 51-101 covers all public disclosure on oil and gas

activities, including news releases and corporate presenta-tions, with requirements:• To use the technical standards for evaluations provided by

the Canadian Oil and Gas Evaluation Handbook (COGEH).• For annual filings based on evaluations or audits by inde-

pendent qualified reserves evaluators or auditors (of atleast 75 per cent of the 10 per cent discounted net presentvalue of the Proved and Probable reserves) with manda-tory disclosure of Proved and Probable reserves evaluatedusing forecast prices and costs. Optional disclosure maybe made of evaluations using constant prices and costs,and of other resource classes.The annual filings consist of the following forms:

• F1, which contains details of reserves and resources andconsiderable additional information on a company’sactivities.

Oil and gas disclosure requirements and new issuesNI 51-101 sets standards� David Elliott

author David Elliott is the chief petroleumadvisor in the Corporate Finance Division of theAlberta Securities Commission. He recentlystepped down as manager of the PetroleumDepartment and is now working part time in anadvisory role.

• F2, on which the independent qualified reserves evaluatoror auditor signs off on the work that they have carried out.

• F3, which is signed by two directors and two officers ofthe company to indicate that they have carried out duediligence on the preparation of the filing.

• F4, which is required only if any of the informationrequired in the F1, F2, and/or F3 forms has beenincluded in a company’s annual information form insteadof being filed separately. It replaces the previous require-ment to file a news release to this effect. The Alberta Securities Commission (ASC) Petroleum

Department has an active oil and gas disclosure review pro-gram that includes prospectuses, annual filings and also thetechnical reports on which these are based. The results ofthese reviews can be found in the ASC Annual Oil and GasReport on the ASC website.

New developmentsThere have been significant developments in the oil and

gas industry in recent years, with greatly increased activityon so-called “unconventional” resources: coal bed methane,bitumen, shale gas and some initial signs of activity on shaleoil. The technology that has led to the increased activity onshale gas, long horizontal wells and multi-stage fracturing isnow also being applied to poor quality “conventional” oiland gas reservoirs.

The ASC continues to review the oil and gas disclosurerequirements in light of these changes and to work withindustry on the development of the technical guidelines fortheir evaluation.

The views expressed in this article are those of the author anddo not necessarily represent the views of the ASC.

CIM

CATEGORY REPORTING RESOURCE CLASSOF ESTIMATE CRITERION Reserves Contingent Prospective

Low P90 P1 Proved C1 LowBest P50 P2 Proved C2 Best

+ ProbableHigh P10 P3 Proved + C3 High

Probable + Possible

Page 73: CIM Magazine September/October 2011

Upcoming 2011 SeminarsNEW — Certification in Ore Reserve Risk andMine Planning Optimization (in collaborationwith AusIMM)Spread over a period of four months, this four-weekcourse is designed for busy mining professionals whowish to update their skills and knowledge base inmodern modelling techniques for ore bodies and newrisk-based optimization methodologies for strategicmine planning. Gain practical experience by applyingthe following hands-on concepts and technicalmethods: methods for modelling ore bodies;stochastic simulations, case studies and models ofgeological uncertainty; and demand-driven productionscheduling and geological risk.Instructor: Roussos Dimitrakopoulos, McGill University,Canada • Dates: Week 1 – August 22-26, 2011; Week 2 –September 26-30, 2011; Week 3 – October 17-21, 2011; Week 4– November 7-10, 2011 • City: Week 1 – Perth, Australia; Week2-4 – Remote • Info: www.mcgill.ca/conted/prodep/ore

Strategic Risk Management in Mine Design:From Life-of-Mine to Global OptimizationLearn how you can have a significant, positive impacton your company’s bottom line by utilizing strategicmine planning methodologies and software; improveyour understanding of strategic mine planning andlife-of-mine optimization concepts, as well as yourunderstanding of the relationship of uncertainty andrisk, and how to exploit uncertainty in order tomaximize profitability. Note: The strategic mineplanning software used is Whittle; an optional half-dayskills refresher workshop on Whittle may be available.Instructors: Gelson Batista, MPX, Brazil, and RoussosDimitrakopoulos, McGill University, Canada • Date:September 21-23, 2011 • City: Toronto

An Introduction to Cutoff Grade Estimation:Theory and Practice in Open Pit andUnderground MinesCutoff grades are essential in determining theeconomic feasibility and mine life of a project. Learn

how to solve most cutoff grade estimation problemsby developing techniques and graphical analyticalmethods, about the relationship between cutoffgrades and the design of pushbacks in open pit mines,and the optimization of block sizes in caving methods.Instructor: Jean-Michel Rendu, Executive Consultant,Snowden, Australia • Date: September 7-9, 2011 • City:Montreal

Geostatistical Mineral Resource/Ore Reserve Estimation and Meeting the New Regulatory Environment: Step by Step from Sampling to Grade ControlLearn about the latest regulations on public reportingof resources/reserves through state-of-the-artstatistical and geostatistical techniques, how to applygeostatistics to predict dilution and adapt reserveestimates to that predicted dilution, how geostatisticscan help you categorize your resources in an objectivemanner, and how to understand principles of NI 43-101and the SME Guide.Instructors: Marcelo Godoy, Golder Associates, Chile, Jean-Michel Rendu, Executive Consultant, Snowden, Australia,and Roussos Dimitrakopoulos, McGill University, Canada •Date: September 12-16, 2011 • City: Montreal

Mineral Project Evaluation Techniques andApplications: From Conventional Methods toReal OptionsLearn the basics of economic/financial evaluationtechniques, as well as the practical implementation ofthese techniques to mineral project assessments, howto gain a practical understanding of economic/financial evaluation principles, and how to develop theskills necessary to apply these to support mineralproject decisions.Instructor: Michel Bilodeau, McGill University, Canada •Date: October 24-27, 2011 • City: Montreal

Page 74: CIM Magazine September/October 2011

The Metals Economics Group Pipeline Activity Index(PAI) rebounded in May, from a dismal April, reaching itssecond-highest level in 2011 before dipping slightly again inJune. A sharp increase in drill results coupled with a strongnumber of financings in May helped push up the PAI; how-ever, a record number of significant drill results in June wasnot enough to offset a lack of projects advancing and a lowernumber of financings.

The industry’s aggregate market cap slipped to $2.38 tril-lion in May, from $2.42 trillion in April 2011, before slipping

again in June to $2.32 trillion. This is the first time sinceMay-June 2010 that market caps decreased for two consec-utive months.

The number of significant drill results spiked consider-ably, as May and June both easily surpassed the previousone-month highs. North America and Latin America contin-ued to be the top regions for successful drilling, accountingfor more than 60 per cent of the combined bimonthly total.Latin America alone accounted for almost half of the signif-icant base metals results.

The number and in situ value of initialresource announcements in May-June wasdown very slightly from March-April, but wasstill the second-highest bimonthly total in thepast two years. In terms of in situ value, goldand base metals were both dominated by sin-gle projects: Levon Resources’s bulk-tonnageCordero project in Mexico – with 451 millionounces of silver, 3.4 million metric tonnes ofzinc, 2.8 million metric tonnes of lead, and 1.1million ounces of gold – accounts for about 75per cent of the base metals total and is easilythe largest announcement of the period; andEast Asia Minerals’s initial estimate of 3.14million ounces of gold and 8.95 millionounces of silver for its Miwah epithermal goldproject in Indonesia accounted for more than60 per cent of the total value of initial goldresources announced in the period.

The amount raised in significant financings(US$2 million minimum) completed in May-June was unchanged from March-April, mainlydue to the increased number of financingsclosed in May, the fourth time in the last eightmonths that more than 100 financings closed ina single month. Unfavourable markets subse-quently affected June financings, as a numberof companies elected to cancel, delay, renegoti-ate or reduce their fundraising plans.

For more information on the PAI, visit the MEGwebsite at www.metalseconomics.com.

CIM

COLUMNS | metals monitor

Record drilling activity helps MEG Pipeline Activity Index rebound � The staff of Metals Economics Group

Significant drill results announced. Source: MEG Industry Monitor; Exploration Activity Services.

author Metals Economics Group is a trustedsource of global mining information and analysis,drawing on three decades of comprehensiveinformation and analysis, with an unsurpassedlevel of experience and historical data.

MEG Pipeline Activity Index (PAI), July 2011. Source: MEG Industry Monitor; MineSearch; Exploration Activity Services.

74 | CIM Magazine | Vol. 6, No. 6

© Copyright 2011 Metals E

conomics G

roup

© Copyright 2011 Metals E

conomics G

roup

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COLUMNS | eye on business

A mineral royalty has traditionallyprovided a method for an owner of aprospective mineral property to retaina share in the upside potential of thatproperty by reserving, at the time theproperty is sold or optioned off, a legalright to a share of the minerals thatmay be produced from the property. Aroyalty can also provide a method for amineral property owner to partiallymonetize its resource, for example, tofund exploration and development,through granting and selling a royalty.The purchaser of the royalty will assessthe potential and risk of whether theproperty will ever achieve productionor, in the case of a producing property,of the anticipated life of mine andvalue of the production over thatperiod. Due to the complex economicmodelling required to make such anassessment, these “created royalties”are generally structured and purchasedby companies whose businesses arepurchasing and holding a portfolio ofroyalties.

Over the past decade’s bull run inmineral prices, a new approach hasarisen – the streaming agreement. Astreaming agreement is similar to acreated royalty in that a sum of moneyis paid to the property owner in con-sideration for a stream of mineralproduct. However, there are a numberof commercial, legal and tax distinc-tions between a streaming agreementand a royalty.

In a royalty, the property ownerreceives the royalty purchase price

A stream runs through itFishing for funding� Josh Lewis

and is obliged to deliver to the royaltyholder, for no further payment, ashare of production or payment of itsmarket cash equivalent. In a stream-ing agreement, the owner receives anupfront payment and, after a period ofmineral product delivery from whichthe streamer achieves a deemed recov-ery of such upfront payment, addi-tional payments based on the mineralproduct delivered, at a price that maybe significantly discounted to market.The streamer receives the stream ofmineral product from the owner, usu-ally for the life of the mine. As in thecase of created royalties, the sophisti-cated analysis required to accuratelyassess the value of a mineral streamresults in stream creation and pur-chase being generally the preserve ofcompanies that specialize in creating,purchasing and holding a portfolio ofstreams.

Initially, streaming was used tomonetize a mineral byproduct. Forexample, an owner of a producinggold mine that produced silver as abyproduct would sell a stream basedon some or all of that mine’s producedsilver. It did not take long for thestreaming model to evolve and beapplied to the primary product from aproducing mine. However, the nextevolution was more significant, whena streaming agreement was adapted tofund the development of a new mine.Streaming now provides owners ofmineral properties under developmentwith a new source of development

funds in addition to the conventionalsources of equity, debt and created roy-alties. Novel uses of streaming willcontinue to evolve (a stream wasrecently used to partially fund a corpo-rate takeover).

Streamers require some form of reg-istered security for delivery of the min-erals. This is often an area ofcontention between the miner and thestreamer, as it might appear that thestreamer is seeking all the advantagesthat accrue to both lender and equityparticipants. However, streamers areadvancing large amounts of moneyand security is part of the overall pack-age that is expected. The securitytaken can look remarkably like debtsecurity, hence the necessity for com-prehensive inter-creditor coordinationto be negotiated with any projectlender who may also be funding thedevelopment of a mine. Admittedly,such coordination is challenging,though by no means insurmountable.

Streaming agreements initially weremade in respect of precious metals.However, in principle, there is nothingto so restrict their application (therehave been recent reports of coalstreaming). While it might seem to bea large jump from silver to coal, thereis one legal aspect of security registra-tion that may, in some cases, make coalstreaming attractive to a streamer. Theideal security that a streamer prefers isa legally enforceable charge onlycharging the specific streamed mineralin the ground.

In many jurisdictions mineral rightsare general, meaning that an owner hasa right in respect of all minerals in theground. An owner who enters into asilver stream agreement in respect of aproject that primarily produces copper,but also gold and silver, may not wishto also grant the streamer a charge inall the copper and gold in the ground.In some jurisdictions, however, coal

76 | CIM Magazine | Vol. 6, No. 6

Atna Resources Ltd. has appointed Douglas E. Stewart as the COO of its man-agement team. Stewart is an experienced senior mining executive with over 35years of experience in the industry. He will supervise operations at Atna’s BriggsMine and play a crucial role in the development of the Pinson and Reward goldprojects.

MOVING ON UP

Page 77: CIM Magazine September/October 2011

innovation | COLUMNS

rights have a separate form of tenurefrom mineral rights and this mayenable the streamer to take securityspecifically in the coal rights.

Streaming agreements areextremely complicated arrangementsin respect of financial modelling, valueassessment, legal drafting and securityarrangements, and not least of all inrespect of tax planning. Many preciousmetals streaming agreements do notcall upon the miner to deliver a por-tion of the mine’s metal production tothe streamer; instead, what is deliveredis an amount of metal, from sourcesother than the mine, equal to the valueof the applicable portion of metal pro-duction. At least one reason for thisdistinction is that it may be desirableto structure the transaction such thatthe miner is not making a capital dis-position of a portion of the mineralresource, as such a disposition couldhave substantial adverse tax conse-quences to the miner.

Metal assayed to a certain purity fromone specific mine, is essentially no differ-ent from such metal from any othersource. On the other hand, coal fromone mine is almost impossible to beduplicated from another source. As aresult, it is improbable that a streamingagreement could provide for delivery ofcoal equivalent to that produced fromthe mine that is the subject of thestream. Accordingly, there may be animpulse for the owner to agree to deliverto the streamer a share of the coal pro-duced from the mine. The tax conse-quences of this must be carefullycanvassed and assessed and this is butone example of why it is imperative thatparties receive rigorous legal and taxadvice in respect of any proposedstreaming agreement. CIM

During recent discussions with colleagues about the key innovationsthat have been implemented in the mining sector in recent years, a problembecame apparent: for a great number of people, their knowledge of theindustry is limited to their specific field. So how does one create a “shortlist” of successes when answers vary depending on the respondents’ back-grounds?

Learning from our past “hits and misses” can aid us in making the rightinvestment choices. CMIC, along with the mining sector as a whole, makeslarge investments in the future of our industry. CMIC is thus taking on thechallenge and launching an informal survey to zero in on what those keyinnovations have been.

In the absence of this industry-wide knowledge, coming to an agree-ment on what our most significant innovations have been is going to be achallenge. Although a consensus is unnecessary, knowing which ones, andthus which of our past investments in R&D, have been the most effectiveis valuable information.

I invite you all to take our survey. Together, we can shape the future ofthis industry. CIM

September/October 2011 | 77

author

Josh Lewis isa commercialmining partner withFasken Martineau,Vancouver.

Help broaden the scope of knowledge on the different aspects ofresearch and innovation by answering the following questions:

• What is your area(s) of expertise?

• Which innovations have been the most significant in your area(s) ofexpertise? Why?

• Which innovations are most needed in your area(s) of expertise?Why?

• Which researchers or research groups have been most important tothe development of technology in your area(s) of expertise?

• Which researchers or researcher groups do you believe will be themost critical to address future needs in your area(s) of expertise?

Pinpointing industry’s key innovationsCMIC launches informal survey to narrow down the list� Tom Hynes

author

Tom Hynes has worked in the uranium and base metalsindustries, and has been a provincial regulator and afederal government research manager. He is theexecutive director of the Canada Mining InnovationCouncil.

CMIC Innovation Survey

[email protected] replies to

Page 78: CIM Magazine September/October 2011

COLUMNS | HR outlook

Investing in training and safetyQuinsam Coal’s approach to meeting labour challenges� Lindsay Forcellini

78 | CIM Magazine | Vol. 6, No. 6

The impending skills shortage con-tinues to be the subject of many dis-cussions in the mining industry.Online networks and communities ofpractice, such as the Canadian MiningHR Professionals Group on LinkedIn,created by the Mining IndustryHuman Resources Council (MiHR),help bring companies together todevelop new solutions to bolster theattraction of skilled workers.

MiHR has been showcasing inno-vative practices in this column in thelast few issues of CIM Magazine. Thefollowing practice, submitted toMiHR Innovate by Quinsam CoalCorporation, illustrates one com-pany’s approach to meeting the labourchallenges faced across the miningindustry.

A strong commitment to trainingand development

With 2011 marking its 24th year inbusiness and with approximately 150people on its payroll, Quinsam CoalCorporation is a key employer inCampbell River, British Columbia, andone of only two underground coalmines in Canada. While the companyis not currently undertaking a specific,large-scale HR initiative, it has contin-ually strived to apply best practices inareas such as hiring, training, safetyand diversity – practices that over theyears have helped equip them with thehuman resources needed to meet thechallenges of an aging workforce andsenior-level attrition.

Quinsam invests heavily in train-ing. Its intensive program begins withtwo weeks of classroom instructionthat focuses on mine rescue and main-taining personal and team safety, fol-lowed by four to six weeks ofunderground and on-the-job training.After approximately six months,trainees become general miners, butthe training does not stop there.Employees head back to the classroomto receive instruction on gases andventilation, firefighting and generallife-saving. This is followed by moreon-the-job training and another day in

the classroom, this time with Quin-sam’s geologist, who provides instruc-tion in areas related to ground control,room and pillar and how to identifyand mine faults.

While learning is ongoing, themajority of formal training is consid-ered complete at about one year, atwhich time a general miner becomesa face miner. If the face minerexpresses interest and is deemed asuitable candidate, he or she maythen decide to train to become a con-tinuous miner operator.

As the training illustrates, safety is anumber-one priority for Quinsam. Infact, the company is planning torevamp its current safety program byadopting “Courageous Safety Leader-ship,” an industry-recognized set ofbest practices that advocates individ-ual ownership of safety.

In addition to its thorough trainingprogram, Quinsam also has in place afour-year trades apprentice program.

Quinsam encourages ethnic and gender diversity, collaborating with First Nations communities to communicateemployment opportunities.

Great Western Minerals has appointed Brent Jellicoe as director of internationalexploration. Jellicoe will chiefly manage Great Western’s exploration program at theSteenkampskraal rare earth project located in South Africa. In addition, he will findand assess new rare earth projects on a global basis.

MOVING ON UP

Courtesy of M

iHR

Page 79: CIM Magazine September/October 2011

There are usually four apprentices (twoelectricians and two millwrights orheavy-duty mechanics) in the program.

Ethnic and gender diversity are alsoencouraged. The company collabo-rates with First Nations communitiesto communicate employment oppor-tunities, and employs two femaletradespeople – a welder and a heavyduty mechanic.

Quinsam recognizes the impor-tance of providing young peopleopportunities for professional devel-opment and advancement. Theyfocus on hiring locally wherever pos-sible and, as indicated by the aforementioned training and appren-ticeship programs, endeavour todevelop and promote talent fromwithin. Overall, the company worksto foster a culture of social responsi-bility. “We take the time to teachyoung people not only to becomeskilled workers, but also to beresponsible employees,” says MarilynKlotz, manager of human resources.

Quinsam’s investment in its peoplehas paid off in a low turnover rate.With regard to apprentices, for exam-ple, the company has lost only one,who left to work elsewhere. Finally, byfocusing on training and promotingwithin, rather than hiring outsideexpertise, the company now sees itselfas better positioned to meet the labourchallenges faced across the miningindustry. They have made a significantnumber of new hires in recent years,and now those same new hires havebecome highly trained employeeswho have the skills and knowledge tohelp ensure the company’s continuedwell-being.

For more information, visit www.mihrinnovate.ca.

CIM

September/October 2011 | 79

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Page 80: CIM Magazine September/October 2011

COLUMNS | safety

Discussions on gender in the min-ing industry are generally limited tothe under-representation of women inthe workforce and the “glass ceiling”they encounter. There seems to be anassumption that safety has nothing todo with gender: we are not takinggender seriously. However, I believewe do so at our own peril. Many dif-ferent research methods have beenused to investigate the relationshipbetween gender and risk, and theconclusions are always the same: mentake more risks than women.

The skewed notion of a “real man”

Despite the rise in popularity overthe past decade of the groomed-to-perfection so-called “metrosexual,”the Rambo culture of invincibility anddestruction remains strong. From anearly age, boys continue to learn thatdisplays of strength will help themavoid ridicule and that they will bemore accepted if they have big mus-cles, can cope with pain, compete and

Worth the debateGetting serious about the connection between gender and safety� Dean Laplonge

win. This machismo does not alwaysend when he exits the playground, as“real men” tend to search for occupa-tions where the work, location, pay

and industry reputation can feed theirdesire to appear masculine – and Ibelieve that mining is one such indus-try. Although women have beenworking in the sector for centuries,mining is still largely seen as a man’sworld.

Within that world, the man whowants to appear the most masculinemay be inclined to take risks, asrequests for assistance or displays offear can be perceived as a sign ofweakness. The problem is that this“real man” version of masculinity isnot agreeable with the safety stan-dards demanded by today’s miningculture.

Tackling sensitive issuesIn social contexts where masculin-

ity can potentially promote at-riskbehaviours, we have witnessed thedevelopment of targeted solutions.For example, in the area of roadsafety, there are advertisements aimedspecifically at young men, utilizing

80 | CIM Magazine | Vol. 6, No. 6

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Page 81: CIM Magazine September/October 2011

images and language that resonate with them. In sports –where we regularly hear of disrespectful behaviour byplayers off the field being exhibited towards women –peer-mentoring programs are being used to change howmen respond to each other’s behaviours. In the miningindustry, however, my experience has been that trainingprograms generally only make vague references to dis-crimination and workplace sexual harassment. We iso-late our discussions about gender to concerns aboutwomen, making little attempt to address how otherwisesocially accepted masculine behaviours may be puttingpeople at risk.

Whenever you investigate gender, you must be pre-pared to tackle sensitive issues relating to bodies, power,equality and sexuality. The companies most likely to seean impact on their safety culture are those that will avoidquick-fix solutions, not opting for a two-hour trainingsession or pop-psychological responses. I am consistentlyasked to deliver this kind of training and I always refuse.You cannot put a group of men in a room for a few hoursand expect they will emerge behaving differently.

The resource industry needs to pay attention to howtheir business systems and processes, recruitment strate-gies, internal communication methods, and even thephysical design of their mine sites contribute to the devel-opment of a gendered culture in which not all seemingly“normal” masculine behaviours are considered safe.

An issue to be taken seriouslyIn 2008, I launched the “Mining for a safer masculin-

ity” project. In our research and site-based work, we havebeen able to test some innovative solutions to genderissues facing the mining industry. Although the solutionshave not always been perfect, one fact consistentlyemerges: companies are not taking the issue of genderseriously.

Many companies have a vision that makes some refer-ence to diversity, but few appear to have a plan in placethat ensures this vision becomes reality. They lack aware-ness of how to integrate gender diversity throughout theiroperations, as they do not understand the importance of“mainstreaming” gender to ensure it is not just a sidelinecultural topic of little relevance to the workplace.

In my experience, the strategies for dealing with gen-der equality are rarely planned, and the result is that littlegets done. I have witnessed gender-related issues beinghanded over to a summer student who uses Google as heronly aid to learn about gender in the workplace. I haveheard a mine manager inform his leadership team hewants 30 per cent of its positions filled by women withintwo years; and he expects the male members to supportthis without dissent.

I have also been surrounded by 100 underground min-ers, listening to them scream abuse because their managerhas introduced me as somebody who can teach them howto be “better men.” One man declared: “You try to change

September/October 2011 | 81

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Conduct a gender review. Use an established method-ology to help identify areas of strength and weaknesswhen it comes to mainstreaming gender throughout yourbusiness. This process involves conducting interviews,completing document reviews and holding focus groupswith key personnel to reveal what needs to be done toensure your company offers a gender-fair workplace.

Pilot a gendered behaviours mentorship programwith a few crews or workplace teams at mine sites: thisapproach has proven to work exceptionally well with malesports teams. It is a focused attempt to help men forgoassumptions about gender and to find newer and saferways of behaving.

Provide participatory training for safety personnel toensure they understand the link between gender andsafety. They will then be better equipped to recognizeand respond to at-risk behaviours.

Encourage your leadership team to engage in someawareness training and to learn about how genderimpacts the workplace. This is not a solution, but it is animportant way of fostering dialogue.

For the above to work, a company needs to commit time andmoney. It is important to enlist the help of experts to get theprocess started, as they can set you on the right path andprovide the skills to sustain a company’s efforts.

82 | CIM Magazine | Vol. 6, No. 6

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TIPS FOR ADDRESSING GENDERISSUES IN THE WORKPLACE

author Dean Laplonge is a leading researcher in the field ofgender in male-dominated contexts. Through the cultural researchconsultancy Factive, he heads up the Mining for a Safer Masculinityproject. Laplonge continues to work with mining companies andindustry bodies throughout Australia and Canada to address genderissues in the mining industry. He currently also holds an adjunct seniorlecturer position at the University of New South Wales.

us and we’ll walk.” This occurred at a place where a fatality hadrecently occurred and where a man approached me with tears inhis eyes to confess he had not hugged his wife in years becauseof the impact the workplace culture was having on him.

The mining industry may not be the most dangerous indus-try in Canada, but 85 per cent of its workforce is comprised ofmen. So, if we are serious about safety, we need to start thinkingseriously about gender.

This industry needs people who are willing to recognize theirown vulnerabilities. It needs workers who understand the limitsand fragility of their bodies and who understand the connectionbetween what it means to be a man in this world and what itmeans to stay safe. CIM

COLUMNS | safety

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Page 83: CIM Magazine September/October 2011

aboriginal perspectives | COLUMNS

September/October 2011 | 83

“Across the country, we’re seeing ahuge renaissance of vibrant entrepre-neurship among the First Nation,Inuit and Métis,” says Clint Davis,chief executive of the CanadianCouncil for Aboriginal Business.Until recently, Davis says he and oth-ers who work in the sector realizedthis renaissance was translating into asignificant contribution to the econ-omy by Canada’s Aboriginal peoples.“But we were not able to put a num-ber to it,” he says.

That changed this past June whenTD Economics released its specialreport, “Estimating the Size of theAboriginal Market in Canada.” Itsfindings: Aboriginal households,businesses and governments willreach $24 billion this year and bal-loon to an estimated $32 billion in2016. It went on to say that Aborigi-nal peoples have been making theirmark across a number of goods andservices areas, but the big boom inthe last decade has been in WesternCanada’s resource and constructionsectors.

“There is a whole variety of differ-ent Aboriginal businesses now thatsupport the oil sands in some capac-ity,” says Davis. “I always say one wayto address Aboriginal unemploymentis to support Aboriginal businessesbecause they make it a priority to hireAboriginal people. They’re buildingskills and capacity, and are effectivelytransforming lives.”

When Tyrone Brass left his job atSyncrude after 20 years to foundBayzik Oilsands Electric, which pro-vides industrial electrical services tomajor oil sands project clients, he wasnot setting out to transform lives butto pursue a lifelong dream of entre-preneurship. He was, however, pleas-antly surprised. “You sit back one dayand think about how so many of youremployees have gone out and boughta home, raised their children, pro-vided them with an education,” says

Aboriginal entrepreneurship in the oil sands� Alexandra Lopez-Pacheco

Brass. “They’re contributing membersto the Fort McMurray community.”

The Aboriginal entrepreneurialboom has not, however, come easy.

“Right off the bat, a major challengeis access to capital and financing,”says Davis. “Typically, when Aborigi-nal people start up a business,

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Page 84: CIM Magazine September/October 2011

COLUMNS | aboriginal perspectives

they’re the first in their family or thefirst in their community to do so.Therefore, gaining access to seedcapital is certainly a challenge, butthe research we did indicated thatthe majority of Aboriginal businessesare actually very successful oncethey get past the first six to 12months.”

Wood Buffalo region’s Ryan Pru-den had to overcome this very chal-lenge when he founded his firstcompany, Wapose Medical Services

Inc., about eight years ago. “There’s ahuge potential for businesses servic-ing the oil sands,” he says, “butthere’s a huge need for money forpayroll, equipment and so on whenyou’re starting out,” says Pruden,who recently founded a second com-pany, Pruden Contracting Ltd. “It canbe difficult to get people to believeyou are a strong, reliable business sothat you can access financing.”

Another challenge is access tobusiness mentors and supporters,

something that entrepreneurs such asPruden and Brass are trying tochange. Both men are on the board ofthe Northeastern Alberta AboriginalBusiness Association (NAABA).

“Joining the NAABA was my wayof giving back to my community,”says Brass. “I wanted to become partof promoting Aboriginal business inthis area to help it become better.”

Both entrepreneurs would like tosee more diversification in the type ofAboriginal businesses oil companieswork with. “I’ve yet to see an Aborig-inal fiber optic splicing company,”says Brass. “There just aren’t any here.So there are business opportunities,but a lot of them are in the non-tech-nical service side of things. Still, it hasto start somewhere.”

Much more education and trainingis needed, says Brass, to address theshortage of professionals and skilledworkers at every level in Aboriginalcommunities and in the oil sands sec-tor. The shortage is particularly toughon smaller businesses, as it is difficultcompeting with the big companies interms of pay and benefits. “I lose a lotof my good workers to the oil compa-nies, many of which are my clients,”he says. “My approach is ‘you putsome time in with me, be a goodemployee, learn the skills I need youto learn, and when it comes time towork for the big show, I will recom-mend you.’ Actually, I have work nowfrom some former employees whowent on to the large organizations. Ifyou stifle something or someone, itdoesn’t work out.”

That is the same attitude Aborigi-nal business leaders have toward theoil sands development. “I’m not say-ing the oil sands industry is perfectand that there are no issues,” saysDavis. “But I find it unfortunate whenthe opposition characterizes Aborigi-nal people as being collectivelyopposed to the industry. That’s notaccurate. The other side of this storyhas to be told, in terms of the positiveaspect this development has had onthe lives of so many Aboriginal peo-ple, not only in Fort McMurray, butacross the country.” CIM

Kilo Goldmines Ltd. has hired Dutch mining engineer Alex van Hoeken as the juniorminer’s new president and CEO. Van Hoeken, who has global gold mining manage-ment experience, will replace interim CEO Peter Hooper.

***

Stornoway Diamonds has announced that Eira Thomas, its cofounder and chairper-son, has left the company to pursue other interests. Tony Walsh, CEO of Sabina Gold& Silver Corporation and the director at Stornoway since 2003, will be replacing her.

***

Forbes & Manhattan has hired Kevern Mattison as general manager of its SlaterCoal operations based in Dundee, Kwazulu-Natal, South Africa. Mattison has over 20years of experience in coal mining. He has worked in both underground and open-cast operations and has managed operations covering a wide spectrum of miningmethods.

MOVING ON UP

84 | CIM Magazine | Vol. 6, No. 6

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student life | COLUMNS

September/October 2011 | 85

It is widely said that the mostimportant thing to leave a mine is notthe ore, but the worker. To trulyingrain this belief into the mining cul-ture means instilling the ideals ofsafety into the future workforce.

Believing that occupational healthand safety is just as important as anyother core subject within an under-graduate mining program, in January2010 I undertook a study to determinehow it is integrated into the curriculaof Canadian, American and Australianmining schools.

Twenty-five universities in thesecountries were surveyed on the natureof their syllabuses. Twelve schools par-ticipated in the study and only 42 per

Solid foundationsIntegrating occupational health and safety into mining programs� Michael Tuters

cent of them required a course onoccupational health and safety toobtain a degree. Every school that didnot require one had the topic inte-grated into a number of other courses.

The dominant mining literature forthese countries was quantified andcompared in relation to relevant healthand safety material. The Mine Safetyand Health Administration (MSHA),the Commonwealth Scientific andIndustrial Research Organization(CSIRO), the National Institute forOccupational Safety and Health(NIOSH), the Society for Mining, Met-allurgy and Exploration (SME), andthe Canadian Institute of Mining, Met-allurgy and Petroleum (CIM) were

determined to be the organizations thatprovide the most pertinent literature inrelation to mining health and safety.

The courses that offered relevantinformation on the topic for each uni-versity were compared based on therelevance of their textbooks and coursecontent. Using this analysis, changes tothe curricula at certain schools wererecommended. Upon completion ofthis study, the following suggestionswere developed for Canadian, Ameri-can and Australian mining schools:• A specific course on occupationalhealth and safety should be mandatoryfor the completion of an undergraduatemining degree in all three countries.The addition of this course should not

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Page 86: CIM Magazine September/October 2011

participate in the sharing of theirresources, and they should be capable ofhaving a forum to discuss theinformation provided by other schoolsand of providing recommendations onreference materials and studies added byother institutions. • Universities in every country shouldutilize the resources provided byNIOSH, CSIRO, MSHA, CSIRO,NIOSH, CIM and SME. Additionally,each institution should require, but notbe limited to, analysis of their provincialand federal occupational health andsafety acts. SME’s Mine Health and SafetyManagement by Michael Karmis is thebest candidate for a required textbookin all countries because of its emphasison occupational health and safety in themining sector.• A mining health and safety shortcourse should be created andsponsored by a mining industryleader. This would allow schoolswithout mandatory health and safetycourses to integrate it into theircurriculum quickly. It shouldbe a one week course led by anadjunct professor – preferablya practicing engineer. Thecourse’s focus should be on,but not limited to, state orprovincial occupational healthand safety legislation,

COLUMNS | student life

86 | CIM Magazine | Vol. 6, No. 6

author

Michael Tuters graduated fromthe Robert M. BuchanDepartment of Mining atQueen’s University in 2010.

justify the removal of occupationalhealth and safety components that arealready present in other courses. Thespecific course should be an integratingmechanism to build on the materialscovered in other technical subjects,such as mine design or ventilation.• An action plan should be created forthe sharing and exchange of resources.MSHA, CSIRO, NIOSH, CIM and SME are the best candidates for creatingsuch a plan. The most prominentoccupational health and safetyresources should be catalogued to alignthe similar material utilized in all threecountries. This must be done by one ofthese organizations so that participationin the accumulation of resources fromeducational institutions and the miningindustry is maximized.• Once available information has beencatalogued, an online database ofresources should be created andmaintained to ensure that informationon best industry practices in health andsafety is easy to access and emulate. Thedatabase should contain all resourcesavailable from MSHA, CSIRO, NIOSH,SME and CIM, as well as all regulationsand acts pertinent to health and safetyin all countries. Access should begranted to all universities with miningand mineral resource programs. Theseschools should also be encouraged to

workplace hazards and risks that resultin ill health or death, and occupationalhealth risk assessment and management.

The best way to improve safety inthe future of the industry is to empha-size it: call on industry’s leaders andhave them catalogue all of their infor-mation on the subject; make it avail-able to students; and ensure that safetyis mandatory in the education of min-ing professionals.

The effect of these changes can bemeasured by the monetary benefitsattributed to fewer lost time injuriesand illnesses and, most importantly,the lives saved as a result. While minescome and go, improving safety is aproject we must continue, until theday that lost time injuries, illness andfatalities are completely eliminatedfrom the industry.

Reference and source information isavailable upon request [email protected].

CIM

Page 87: CIM Magazine September/October 2011

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Page 88: CIM Magazine September/October 2011

On September 29,1931, a parade ofvehicles carrying

miners and their wives andchildren entered the townof Estevan, hoisting bannersand protesting a sweepingrange of poor working andliving conditions thatplagued the Bienfait coalmines in southeasternSaskatchewan. There werehundreds of confrontationsacross Canada during thestruggle for labour rights inthe early 1930s, but none asdeadly as the one that crushed the Bien-fait coal strike.

The Great Depression had broughta drop in coal prices and with it, lay-offs and massive wage cuts at themines. Mine workers were caughtbetween seeking better working con-ditions and facing unemployment. InBienfait, wages had been slashed, extrawork was going unpaid, safety regula-tions in the mines were not being fol-lowed, company housing was squalid,rents were high, and the companystore demanded a full monopoly whilecharging exorbitant prices.

On top of this, company intimida-tion had prevented workers fromunionizing, making it difficult forthem to express any grievances. By thesummer of 1931, things had becomeunbearable. The miners approachedthe Workers’ Unity League (WUL), alabour union operated by the Commu-nist Party of Canada. The WUL sentseveral organizers, including its presi-dent and the notorious, fiery speaker,Sam Scarlett.

Inciting a riotThe Bienfait coal strike of 1931� Correy Baldwin

and frustrated the mine oper-ators and many of Estevan’smore prominent citizens. TheCoal Operators’ Association(COA) began a public cam-paign against the police forceand its sergeant, paintingthem as incompetent, unwill-ing and unable to crush theso-called Communist agita-tors.

The COA also sent com-plaints to the provincialauthorities. The provincialRCMP was hesitant to takesides, but the national author-

ities were especially wary of theunion’s links to the Communist Party.When the COA demanded that Ser-geant Mulhall be replaced, the nationalRCMP Commissioner complied, over-ruling provincial objections. InspectorW. J. Moorhead arrived, along with acontingent of heavily armed officersmandated to protect industry property.

As the strike approached threeweeks, the union invited popularorganizer Annie Buller to speak to theminers and help organize support fortheir cause. Buller had quickly gaineda reputation as a powerful speaker anda passionate socialist and politicalactivist.

After speaking at a mass meetingfor the miners, Buller was asked to stayand speak again at a public meetingthe following Tuesday, September 29.The union had planned a vehicleparade from Bienfait into Estevan,where they would meet with the citi-zens of Estevan. The union was con-cerned about the negative portrayalthey were receiving in the press and

After several days of speeches, theunion had signed up 100 per cent ofthe miners – around 600 men. Theunion instructed its members toremain nonviolent. They also chosemen of British decent for the localleadership to undermine rumours that“the foreign element” was incitinglabour unrest.

The union then approached theoperators of the nearly two dozen coalmines in the area to negotiate wages,working conditions and living condi-tions. The operators refused to meet.After repeated attempts to negotiate,the union set a deadline and threat-ened to strike. On September 8, theminers walked off the job.

The local RCMP was immediatelyput on alert, attempting to keep thepeace as the situation grew more andmore tense. The local detachment innearby Estevan was surprisingly sym-pathetic to the miners. The officer incharge, Sergeant William Mulhall, wasinsistent that his force not be used asstrikebreakers, a stance that angered

Annie Buller addresses a crowd before the Estevan riot.

88 | CIM Magazine | Vol. 6, No. 6

Page 89: CIM Magazine September/October 2011

wanted to inform the public of theissues and rally their support.

On Tuesday morning, the Estevantown council met and voted to pro-hibit the parade, and called on theRCMP to enforce the ban. No attemptwas made to communicate this deci-sion to the union leaders, who wentahead with the day’s plan, unawarethat a heavily armed RCMP forcewould try to stop them.

The parade of vehicles met thepolice blockade as they entered Este-van. When the strikers refused toleave, the police moved in. A strugglebroke out and the police crackeddown, armed with sticks. Seeking togain control, the police chief orderedthe fire department to turn theirwater hose on the demonstrators. Buta group of miners climbed onto thefire truck, preventing them fromdoing so.

It was then that the RCMP pulledout their guns, killing Nick Nargan,one of the miners on the fire truck,with a bullet through the heart. In theviolence that followed, several moreminers, five bystanders, and an RCMPofficer were wounded by police gun-fire, and many on both sides wereinjured.

The wounded were taken to theEstevan hospital, but were turnedaway. The doctor in charge wasemployed by the mine operators aswell and had been given orders not toadmit any wounded miners. A minernamed Julian Gryshko, shot in theabdomen, died outside the hospital.The rest were sent to the hospital inWeyburn, 86 kilometres away. A thirdminer, Peter Markunas, would die inWeyburn three days later.

The next morning, police con-ducted armed raids around Bienfait,arresting 13 men and placing machineguns around the town. Additional offi-cers had been sent from Regina.Ninety officers patrolled Bienfait for

the next two weeks, searching homesand making a further 13 arrests,including several union organizers andlocal leaders.

The trials began in October to greatnational interest. The police crack-down had been labelled a “riot,” andunion organizers were convicted ofrioting and inciting a riot. Sam Scarlettwas sentenced to a year in prison andfined $100. Another organizer, IsidorMinster, was sentenced to two years ofhard labour. Annie Buller was sen-tenced to a year of hard labour in jailand fined $500. After an appeal, Bullerwas granted a new trial. She heroicallyconducted her own defense, but wassentenced again, this time to one yearin solitary confinement.

The RCMP admitted no responsibil-ity, and no officers faced prosecution.

The only officer to suffer any setbackwas Sergeant Mulhall, who received adamaging report on his servicerecord.

The miners returned to work onOctober 6, after gaining a number ofconcessions from mine organizers andagreeing to drop their union member-ship. They would not gain union rep-resentation until 1944, the yearTommy Douglas’ CCF (Co-operativeCommonwealth Federation) partycame to power in Saskatchewan andput pressure on industry operators torecognize labour unions.

Nick Nargan, Julian Gryshko andPeter Markunas were buried in a com-mon grave in the Bienfait cemetery.Their tombstone reads, “Murdered inEstevan, September 29, 1931, by theRCMP.” CIM

September/October 2011 | 89

Page 90: CIM Magazine September/October 2011

cim news

90 | CIM Magazine | Vol. 6, No. 6

Patricia Dillon, the only femalepresident in CIM’s history, is retiringfrom Teck Resources and leavingbehind a legacy of work that couldhave easily filled a few lifetimes. Butdo not use the word retirement aroundher. “I don’t like the term,” Dillon says.“It’s not what people in the miningindustry do.”

It is this tireless effort and enthusi-asm that has made her an outstandingleader in the field. “My real passion ishelping people understand the valueof the mining industry,” she says.

After several summers working as afield geologist, Dillon began her careeras a high school science teacher beforejoining Teck full time in 1979. Sheheld various positions, initially inexploration, which culminated in herbecoming director, employee commu-nications and engagement. In the early1990s, she got involved with theProspectors & Developers Associationof Canada (PDAC) where there was aunique opportunity to serve the publicthrough the organization’s educationcommittee.

As a graduate in geology (1974)and education (1976) from the Uni-versity of Toronto, Dillon utilized herbackground to usher in one of hergreatest achievements, the establish-ment in 1997 of PDAC Mining Mat-ters, a charitable organization that hascontributed significantly to society’sawareness of the minerals industry.

Experts in education were con-sulted and engaged to develop thefirst Mining Matters Grade 6/7 earthscience curriculum kit for Ontarioteachers, which was introduced in1994. The annual budget of the Min-ing Matters has grown from approxi-mately $200,000 to $800,000 overthe past 17 years.

Shortly after the initial classroomprogram was introduced, it won theConference Board of Canada’s Partner-ship Focus Award for “promoting

Goodbye, not farewellOne of the industry’s brightest leaders taking her next big step

By Hartley Butler George

• Chair of the CIM Toronto Branch • Ambassador for Keep Mining in

Canada (KMIC)• Member of the Mining Association

of Canada’s (MAC) Public RelationsCommittee and Towards Sustain-able Mining Committee

• Chair of the Minerals and MetalsIndustry Sector Study SteeringCommittee

• Co-chair of the CIM Mining Millen-nium Conference and Exhibition in2000 (held in conjunction withPDAC)

• President of the Minerals and Eco-nomics Management SocietyAs president of CIM (2000-2001), a

major project for Dillon was reworkingthe CIM Strategic Plan and pinningdown an updated vision and mission –a decision that made CIM more rele-vant and understandable, both to itsmembership and the public. She alsotook a special interest in CIM’s studentassociations and used every opportu-nity to help them better prepare forinteraction with the industry.

From 1998 to 2001, Dillon did athree-year secondment to the Las-sonde Mineral Engineering Program ather alma mater as director, externalliaison. She returned to Teck thereafteras the manager of corporate relations.

Dillon’s need to be challenged hasbeen her compass throughout hercareer. “I made decisions that wereright for me,” she says. “I neveractively sought leadership roles, but ifI was approached, I never said no. Inever backed away from opportunityand always pushed myself to grow anddevelop new skills.”

It is this attitude that has affordedher recognition along the way: theCIM Past Presidents’ Memorial Medal(1998) for setting an example to peo-ple contemplating a career in mining;the Athena Award (2000) from thetown of Oakville for her communityservice and mentorship of young

Thoughts on industry’s attitude to “open its doors”

“Twenty years ago, at backyard BBQs we were

almost ashamed to say we workedin this industry,” she says.

“I believe strongly in the value of this industry and I’m proud of the fact that I’m in it.

Fellowship, networking and theknowledge that we make

a significant contribution to societyare what drive us.

We all have an opportunity to promote this great industry.”

Cred

it: PDA

C

science literacy for the world of work.”Currently, the Mining Matters messagehas reached approximately 500,000students and the initiative is beingextended to Quebec and Canada’s east-ern and western provinces.

In addition to PDAC, Dillon’sinvolvement with other industryorganizations and initiatives has beenextensive:

Page 91: CIM Magazine September/October 2011

women; the CIM Distinguished Service Award;and, most recently, the PDAC Distinguished Serv-ice Award. She attributes her success to hard work,great mentors, an infectious enthusiasm, and sup-port from her family and company.

New challengesDillon leaves Teck at the end of September and

shows no signs of slowing down: she will continueher involvement with Mining Matters, the Cana-dian Mining and Metallurgical Foundation, theInternational Council of Mining and Metals(ICMM), and with an upcoming collaboration withRoyal Ontario Museum to create the travellingCanadian Mining Hall of Fame exhibit. She is alsothe incoming chair of the Mining Industry HumanResources Council (MiHR).

It looks like retirement is not on the agenda, butDillon’s latest career move will involve one notablebonus: “I’m happy about not having to set thealarm for 5:50 a.m. every day,” she laughs. CIM

ObituariesJohn “Blue” Evans began his professional career in 1951 working for NorthBroken Hill Ltd. in Australia. He had a long and varied professional career,working in Canada, Australia and the United States, working as a practicalmining engineer, a consultant, a researcher and an academic at varioustimes throughout his career. In 1955, he worked as a mining engineer at theCanex Placer operation in Salmo, British Columbia, and ended up workingas the assistant to J. D. Simpson, the founder and president of PlacerDevelopment. In 1969, he joined the University of British Columbia (UBC) asprofessor and head of the Mineral Engineering Department. During his nineyears at UBC, he revitalized the department during a period of strong miningindustry growth in the 1970s.

Blue left UBC in 1978 to work in minerals research for Esso Resources inCalgary. Later, he returned to Australia to head up the mining department atthe University of South Australia in Adelaide. He returned to Canada in 1991and continued to work as a consultant for eight years. He spent his last fewyears living in retirement in Richmond, British Columbia.

Blue Evans, who joined CIM in 1954, became a Life Member of both CIM andof the Association of Professional Engineers and Geoscientists of BC. He wasa CIM Distinguished Lecturer in 1977, and in 1978 received the CIM District6 Distinguished Service Medal. He was also the recipient of the CIM MetalMining Society’s Award in 2001.

In 2010, a group of Blue’s former students established the “John Blue EvansStudent Enrichment Fund” at UBC. An initial endowment of $120,000 wascontributed to help support student initiatives and for student participationin conferences, field trips and special courses such as mine rescue.

In the words of Reverend Terry Allen, a lifelong friend of Blue’s from hisSalmo days, Blue was “a professional who knew what he was talking about,an engineer who knew how to build it right, an enterprising larger-than-lifefigure, a bluff Australian with a kind heart, and above all a good friend.”

Blue was the inspiration and mentor for a generation of UBC miningengineers who have gone on to prominent careers in the industry. He will bemissed but his legacy lives on through those in the industry who knew him,worked with him, and learned from him.

He passed away on June 4, 2011.

Michael Allan, CIM past president 2009-2010

Douglas Bryan, was a member of CIM since 1977, and the recipient of thisyear’s J.C. Sproule Award. He died on June 15.

Lucy Rosato was an active member of the Hydrometallurgical Section ofMetSoc in the 1990s. She passed away on April 30.

cim news

September/October 2011 | 91

The Iron Ore Company of Canada has appointedJulie Gelfand as vice-president of environmentand social responsibility. Previously, Gelfandserved as the Mining Association of Canada’svice-president responsible for implementing theTowards Sustainable Mining initiative, whichunites a wide range of stakeholders in establishingmine site protocols that include crisis manage-ment planning, safety and health, community outreach and tailings management.

Under Gelfand’s direction, three new protocolswere added on issues related to safety and health,biodiversity conservation and Aboriginal relations.She was also responsible for all the biodiversityand corporate social responsibility (CSR) files atMAC, including a committee on internationalsocial responsibility, which deals with issues suchas transparency, accountability, various interna-tional standards that apply to the extractive sectorand the Canadian CSR Strategy.

***

Neo Material Technologies Inc. has appointed GeoffBedford as its COO. Bedford has over 10 years ofexperience with the company. This transition willallow Constantine Karayannopoulos, president andCEO, to focus largely on the strategic growth, diver-sification and future direction of the company.

MOVING ON UP

John “Blue” Evans Douglas Bryan Lucy Rosato

Page 92: CIM Magazine September/October 2011

Il y a un peu plus d’un an, le salon Les mines dans lasociété de l’ICM a changé de nom afin de mieuxrefléter les divers aspects constitutifs du secteur

minier  : les mines, les minéraux, les métaux et lesmatériaux. Maintenant appelé M4S, sa mission demeurela même : faire prendre conscience au grand public del’impact de l’industrie minière sur notre vie de tous lesjours. Fort d’un succès qui n’a cessé de croître depuis ledébut, l’ICM est maintenant prêt à franchir une nouvelleétape dans l’histoire du M4S.

UN NOUVEL OBJECTIFFaisant partie intégrante de la feuille de route de

l’ICM, la nouvelle image du M4S vise à intégrer les élé-ments interactifs du salon ainsi qu’à attirer une plusgrande diversité de personnes au sein de l’industrie,lesquelles n’auraient peut-être pas envisagé une car-rière dans le domaine minier.

« À l’avenir, l’intention est d’élever le M4S à un niveausupérieur en matière de sensibilisation et d’éducation enciblant différents segments et groupes qui sont sous-représentés dans cette industrie », explique Lise Bujold,directrice des événements de l’ICM.

Les élèves et les enseignants des écoles primaires etsecondaires représentent la majorité de l’auditoire duM4S. En élargissant la portée du modèle de réussite duM4S vers d’autres communautés, l’objectif de l’ICM est

ÉLEVER LE M4S À UN NIVEAU SUPÉRIEUR

d’élaborer des stratégies, des messages et des activitésvisant à atteindre ces segments de la population, à savoirles étudiants de niveau postsecondaire, les femmes, lesAutochtones et les professionnels à la retraite.

Il est important de changer les idées fausses du grandpublic au sujet de l’industrie minière afin de joindre lesgroupes ciblés. «  Nous savons que nous avons unegrande bataille à entreprendre », a déclaré Jean Vavrek,directeur exécutif de l’ICM. «  Nous devons promouvoirl’industrie auprès des jeunes et des groupes de popula-tion moins traditionnels, mais nous devons égalementdétruire l’image d’une industrie dépassée et nonécologique. »

Lors du Congrès et Salon commercial de l’ICM à Mon-tréal, Chris Twigge-Molecey, alors président de l’ICM, adit ceci  : « Si vous ne favorisez pas la croissance, voussombrez. » La clé de la réussite est de faire prendre con-science au public de l’importance de l’incidence de l’in-dustrie minière sur nos vies.

Élever le M4S vers de nouveaux sommets exige d’en-treprendre un certain nombre de mesures précises,notamment d’examiner les moyens de rendre le mo -dèle interactif plus mobile afin de l’amener dans deslieux plus petits. « Des sociétés membres et des sec-tions de l’ICM nous ont demandé d’organiser le M4Sdans les communautés des Premières Nations  », aindiqué M.  Vavrek. «  Déplacer le salon sur les routes

M4S• MINES• MINÉRAUX• MÉTAUX• MATÉRIAUX

LES MINES DANS LA SOCIÉTÉ

92 | CIM Magazine | Vol. 6, No. 6

cim news | plan stratégique

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population qui pourraient devenirune main-d’œuvre éventuelle.  Leschefs de file de l’industrie s’accor-dent sur l’objectif du M4S. Il n’y aaucun nuage en vue; tout ce dontnous avons besoin ce sont des per-sonnes qui souhaitent s’engagerdans cette cause en contribuant àsensibiliser le public et en faisantla promotion de l’industrie. » ICM

plan stratégique | cim news

nous permettra de diffuser notremessage aux personnes qui n’au-raient pas nécessairement par-ticipé à l’événement annuel. »

L’ICM examine également la pos-sibilité de collaborer avec d’autresassociations industrielles afin d’ac-croître la popularité du site Web duM4S. « Nos partenaires ont diffusébeaucoup de contenu et nousrecherchons une façon d’en intégrerune partie sur le site Web du M4S »,a-t-il ajouté. Il est aussi prévu d’in-tégrer M4S dans le curriculum sco-laire; Une mine de renseignementsde la PDAC serait un partenaireidéal pour cette initiative.

UN APPEL À L’ACTIONLa collaboration des parties

prenantes de l’industrie est néces-saire à la mise en œuvre des initia-tives relatives au M4S.

«  Nous recherchons actuelle-ment les meilleurs moyens de nousassocier avec les structures de basede l’ICM et d’autres acteurs de l’in-dustrie qui partagent nos objectifs »,a souligné Mme Bujold. «  Environ100  000 emplois seront bientôtvacants dans le secteur minier; cespostes doivent être comblés. Lanécessité de s’attaquer collective-ment à cet enjeu n’a jamais étéaussi importante, et la mise encommun de nos ressources con-stitue la prochaine étape logiquepour promouvoir notre industrieainsi que les diverses carrières surlesquelles elle ouvre. »

L’ICM est en voie de créer uncomité consultatif du M4S àl’échelle du Canada. «  À l’heureactuelle, nous recherchons desressources », explique Mme Bujold.« Nous avons besoin de personnesqui connaissent l’industrie et quisont prêtes à s’engager dans lamise en œuvre de ces étapesstratégiques en participant à unprogramme qui produira des résul-tats mesurables. »

Les connaissances collectives dece comité seront exploitées afin d’é-valuer la situation actuelle et de dis-cuter de la mise en placed’initiatives réalisables permettant

d’obtenir de meilleurs résultats. Aumilieu de 2012, le comité entendprésenter un document d’informa-tion sur les résultats.

Pour Mme Bujold, l’avenir duM4S s’annonce radieux. «  Nouscommençons notre aventure etnous avons besoin de dirigeants,de visionnaires et de personnes quiont une idée des segments de la

September/October 2011 | 93

The Mining Industry Human Resources Council

Released August 2011:

The Power of Collaboration

Visit www.MiHR.ca

to access these studies

Page 94: CIM Magazine September/October 2011

cim news | award winner

94 | CIM Magazine | Vol. 6, No. 6

Mining tycoon, published author,philanthropist, family man – these arejust some of the words used todescribe Pierre Lassonde, this year’swinner of the Robert Elver MineralEconomics Award. Selected for “hislandmark contributions, visionaryefforts and entrepreneurial-drivenspirit in transforming the Canadianmineral economics field,” Lassondeembarked on the fast track to successat the onset of his mining career.

Today he strives for more balance inhis life. “I try to divide my time almostin thirds: business, philanthropy andpersonal or family time,” he says. Onthe work front, Lassonde is chair ofFranco-Nevada Corporation and adirector at New Gold Inc.. “I enjoy help-ing young entrepreneurs in the dia-mond, gold and base metals industries,”he says. “It keeps me pretty busy.”

Last summer, Lassonde spent closeto three months in France with hisfamily, soaking up French food, lan-guage and lifestyle. “It’s a perfect wayto mix business and pleasure,” headds. From a European base, it is easyfor him to travel to London or Mauri-tania, where Franco-Nevada holds roy-alties in Kinross’ operation. “I need togo kick the tires, to check it out oncein a while,” he says.

As a philanthropist, Lassonde isinvolved in a great number of pursuits.He is a staunch supporter of education,made evident by his contributions to anumber of universities both here andin the United States: the University ofUtah’s Pierre Lassonde EntrepreneurCenter, the University of Toronto’s Las-sonde Mineral Engineering Program,and various buildings at Western Uni-versity and École Polytechnique. Aschair of the Quebec National ArtMuseum in Quebec City, he is leadingthe fundraising campaign for a $100million expansion. “I’ve been collect-ing [art] for over 30 years now,” hesays. “It’s a real passion for me.”

Striving for balancePierre Lassonde takes home CIM award

By Heather Ednie

Lassonde stresses the importance ofinvesting in the community in whichone lives. “If you want to make a dif-ference, you have to pick where youwant your support to be,” he advises.“I’ve said it a thousand times – the nat-ural resource of a country is not itscommodities, but its people. So that iswhat we invest in.”

Lassonde and his wife Janelle at New Bright Angels School, one of the schools they support throughmicrofinance with Opportunity International.

Though work and philanthropykeep him busy, Lassonde ensures familytime remains a top priority. The impor-tance of maintaining a balanced life hasbeen a life lesson for him. “Work can beso much fun, but even having fun cankill you,” he explains. “You can end upseparated from your family because youlose sight of what’s truly important.” CIM

Courtesy of Jan

elle Lassond

e

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TAKING M4S TO THE NEXT LEVELBy Marlene Eisner

M4S• MINING• MINERALS• METALS• MATERIALS

MINING FOR SOCIETY

blueprint | cim news

September/October 2011 | 95

A little over a yearago, CIM’s Min-ing in Society

show received a namechange to better repre-sent the facets thatmake up the miningindustry: mining, min-erals, metals and mate-rials. Now rebranded asM4S (Mining for Soci-ety), the show’s missionremains the same: toeducate the generalpublic on the impactmining has on our dailylives. A success from the get-go, CIM is now ready totake M4S to the next level.

RENEWED FOCUSAs an integral part of CIM’s roadmap for the future,

the re-branding of M4S is an effort to integrate the inter-active elements of the initiative and attract a greaterrange of people to the industry who might not otherwiseconsider a career in mining.

“Going forward, the intent is to elevate M4S to agreater awareness and education level by targeting dif-ferent segments and groups that are under-representedin this industry,” explains Lise Bujold, CIM’s director ofevents.

Elementary and high school students and teachersmake up the majority of M4S attendees. By extending thesuccessful M4S model into other communities, CIM’sgoal is to develop strategies, messages and activities toreach these segments of the population, namely post-secondary students, women, Aboriginals and retiringprofessionals.

Changing the general public’s misconceptions of themining industry is important when reaching out to thesedemographics. “We know we have a major battle on ourhands,” says CIM executive director Jean Vavrek. “Weneed to attract young people to the industry and some ofthe less traditional demographics, but we also have todemystify the image of an antiquated and environmen-tally unfriendly industry.”

At the recent CIM Conference & Exhibition in Mon-treal, CIM’s then-president Chris Twigge-Moleceysummed it up best: “If you don’t grow it, you mine it.”Getting people to understand just how big an impactmining has on their lives is key.

Taking M4S to new heights involves a number of spe-cific actions, including examining ways to make the

interactive model moretransportable to bring itinto a smaller arena.“We’ve had requestsfrom CIM branches andcompanies to bringM4S to First Nationcommunities,” saysVavrek. “Taking theshow out on the roadwill help us spread themessage to a demo-graphic we wouldn’tnecessarily reach withthe annual event.”

CIM is also lookingto other industry associations to help populate the M4Swebsite. “Our partners have distributed a lot of materialand we are exploring how we can include some of it onthe M4S website,” he adds. Integrating M4S into schools’curicula is also in the plans; PDAC Mining Matters is anideal partner in this initiative.

A CALL TO ACTIONCollaboration from industry stakeholders to help

carry out the M4S initiatives is critical. “We are presentlyresearching the best ways to partner with CIM con-stituencies and other industry voices that have the sameobjectives as us,” says Bujold. “Approximately 100,000jobs will soon be available in the mining sector; thesepositions have to be filled. The need to tackle the issuecollectively has never been greater, and pooling ourresources is a logical next step in promoting our industryand the various careers it offers.”

CIM is in the process of creating a Canada-wide M4Sadvisory committee. “At this point, we are asking forinput,” Bujold explains. “We want people with knowledgeof the industry who are prepared to commit to thesestrategic stages by contributing to a program that willproduce measureable results.”

The collective knowledge of the committee will assessthe current situation and explore tangible initiatives forgreater results. By mid-2012, the intention is to presenta white paper on the results.

For Bujold, the future of M4S looks bright. “We’restarting out on our quest and we need leaders, visionar-ies and people who have access to segments of the pop-ulation that could represent a potential workforce,” shesays. “Industry leaders agree on the purpose of M4S. Isee nothing but blue skies ahead; all we need now arepeople who wish to commit to the cause by helping toraise public awareness and create buy-in.” CIM

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cim news | scholarship winner

It had the makings of an amazingsummer vacation: hiking MountsVesuvius and Stromboli, visiting theSolfatara Volcano and the Campi Fle-gri geothermal fields, exploring Pro-cida, Herculaneum and Pompeii, andtopping it all off with visits to theVatican and the Coliseum in Rome.But a vacation it was not. Evan Glad-ney, a geology student at Saint Mary’sUniversity in Nova Scotia, was partic-ipating in a once-in-a-lifetime fieldschool course – an experience soimpactful it confirmed existing inter-ests, sparked new ones and gaveGladney a taste of what life could belike as a geologist.

“That trip proved my love for theoutdoors and for applying lectureknowledge to the field,” Gladney says.“It showed me that geology offers a lotof opportunity to travel and see differ-ent parts of the world, and to be out-doors. This trip also consolidated myinterest in igneous rocks!”

Last September, Gladney was hon-oured with the Rory Kempster Memo-rial Earth Sciences Scholarship givenout by the CIM New BrunswickBranch. This was followed in Decem-ber with the Mineralogical Associationof Canada’s 2009-2010 UndergraduateStudent Award. His high marks are aresult of the marriage of his sharpmind and voracious interest in thecourses he is taking.

“A few of my classes sparked myinterest in minerals, specifically pre-cious metals and platinum-group-elements (PGEs),” he explains. “Aftertaking an igneous petrology course, Iknew that I was going to be a hardrock geologist; my interests were inthe processes and mechanismsresponsible for the crystallization ofore-bearing minerals.”

Gladney complemented his courseload with research and field work,including working with Dr. JacobHanley on PGE-bearing gabbroic

Italy and PDAC: invaluable experiences that cemented a young geologist’s career pathBy Heather Ednie

pegmatites from the Lac des Îles Com-plex in Ontario, followed by an hon-ours project on the same complex andon the Greendale Complex in Antigo-nish, Nova Scotia. The findings led toGladney co-authoring a paper pub-lished in Economic Geology.

But, it was a trip to the PDAC(Prospectors & Developers Associa-tion of Canada) convention in March2010 that really cemented his careerplans. “After exploring career optionsand current job opportunities avail-able, I knew that working in the indus-try on ore deposit exploration andresearch was the path for me,” heasserts.

Gladney graduated with his bache-lor of science (honours) degree thispast January and is commencing hismaster’s in earth sciences this autumnat St. Francis Xavier University.Although he readily states that the

courses he took while doing his bach-elor’s degree were very valuable, hisundergraduate learning went farbeyond the classroom. “The mostvaluable lesson I have learned is timemanagement, and the most valuableexperiences throughout universitywere travelling in Italy, experiencingthe culture, and attending the PDACConvention and learning about jobopportunities.”

Once he completes his seconddegree, Gladney aims to work for eithera junior exploration or a major miningcompany. “I have always had a strongaffection for the outdoors and wouldlike to work in precious metal and PGEexploration, with future opportunitiesto continue research and to publish,” hesays. “I would like a job that has roomfor me to flourish and rise up within thecompany, to display my leadershipskills and my personality.” CIM

96 | CIM Magazine | Vol. 6, No. 6

Gladney visiting the Solfatara Volcano, which is currently active and of concern, as the magma chamber is veryshallow (about two kilometres below the surface) and many people live nearby.

Courtesy of E

van Glad

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Page 97: CIM Magazine September/October 2011

CIM’s vice-president international, Nathan Stubina, recently attendedthe Associação Brasileira de Metalurgia, Materiais e Mineração’s (ABM)66th Annual Congress, which took place in São Paulo, Brazil, from July 18to 22, 2011. ABM was founded in 1944 and currently has 4,500 individualmembers and 120 corporate members.

The purpose of the meeting was to discuss areas in which CIM andABM can work more closely in the future, as both Canada and Brazil bothhave a strong tradition in mining and metallurgy. This is in keeping withCIM’s strategic objective of exploring avenues for increased collaborationwith sister societies globally. CIM’s recently established “Cyber Member-ship” will also facilitate these efforts, enabling professionals who residearound the world to become CIM members at a reduced fee. CIM

Bonds beyond bordersCIM increasing collaboration with sister societies globally

By Nathan Stubina

From left to right: Nathan Stubina, CIM vice-president international; Reinaldo Nascimento, ABM managerof external relations; and Professor Varadarajan Seshadri, Universidade Federal de Minas Gerais

CALENDARCALENDRIER

CIM EVENTS

MEMO 2011Maintenance Engineering / Mine Operators’ ConferenceColloque sur l’ingénierie demaintenance et l’exploitation minièreNovember 6-9 | Saskatoon, SKContact: Chantal [email protected]/memo2011

Symposium 2011 sur l’environnement et les minesSymposium 2011 on Mines and theEnvironment6-9 novembre | Rouyn-Noranda, QcResponsable : Chantal [email protected]/rouyn-noranda2011

CIM Saskatoon Branch: Mineral Processing NightNovember 17 | Saskatoon, SKContact: Mike [email protected]

CIM Saskatoon Branch: 46th Annual CIM BallNovember 25 | Saskatoon, SKContact: Jeff [email protected]

CMP 201244th Annual Canadian MineralProcessors Operators’ Conference44e Conférence annuelle desminéralurgistes du Canada January 17-19, 2012 | Ottawa, ONContact: Janice [email protected]

CIM Saskatoon Branch:Environmental NightJanuary 19, 2012 | Saskatoon, SKContact: Mike [email protected]

September/October 2011 | 97

Page 98: CIM Magazine September/October 2011

cim news | distinguished lecturer

Klaus Kacy is one of the world’stop mine hoisting experts. The 2007winner of the CIM McParland Memo-rial Award for his outstanding contri-butions to the industry in mine hoistsafety controls, Kacy began his careeras a foreman in a Polish coal mine in1968. Two years later, he set up anautomation centre for Polish coalmines that eventually employed morethan 50 qualified engineers and tech-nicians. Over the decades, his work

in developing new control systems (particularly for minehoists) has resulted in more than 30 patents.

In 1979, Kacy began teaching at Kaduna Polytechnic inNigeria, where he was recognized for outstanding academic

The age-old battle of new versus oldKlaus Kacy discusses history of modern hoisting technology

By Alexandra Lopez-Pacheco

achievement, and in 1982, he joined ABB (ASEA) SouthAfrica. There, he focused on mine hoisting, including mar-keting, design, commissioning and field services. Since1987, he has been at ABB Canada where he developed atechnical team for the ABB Mine Hoist Group, which todayis one of the best mine hoist teams in the world.

Kacy is a speaker in this season’s CIM Distinguished Lec-turers Series, where he will talk about the history and devel-opment of modern hoisting technology, as well as itsadvantages and disadvantages.

CIM: What are the most significant differences between modernand older mine hoists?Kacy: The best way to illustrate the differences is to think ofan electrical engineer, a hoist operator and a mechanicalengineer, all of whom retired 40 years ago. Now, imagine

98 | CIM Magazine | Vol. 6, No. 6

CIM Distinguished LecturersÉminent conférenciers de l’ICM

2011-2012

BOOK NOW • RÉSERVEZ DÈS MAINTENANT

www.cim.org

Klaus KacyABB

Automation-CanadaWestbank, BC

*Modern

Hoisting SystemsSystèmes de treuils

modernes

Bernhard KleinUniversity

of British Columbia Vancouver, BC

*Energy

Efficiency in Mining Efficacité

énergétique dans l’industrie de l’exploitation

minière

A. Hamid Mumin Brandon University

Brandon, MB *

Iron Oxide Copper-Gold Deposits in

Genetic Context Gisements de type

oxyde de fer-cuivre-or dans un contexte

génétique

William Westgate3M

St. Paul, MN, USA *

Processes andCollaboration

Propelling Innovationthrough Execution

Processus,collaboration et exécution  :

un passeport pourl’innovation

Barbara Kirby Mining IndustryHuman Resources Council, Ottawa, ON

Jim UtleyTeck Resources

Limited, Vancouver, BC

*Canadian Mining

Credentials Program – Certification:  Recognizing and Retaining Skills

Programme des titres de compétences de l’industrie minière canadienne –

certification : reconnaissance et la retention des compétences

Page 99: CIM Magazine September/October 2011

them seeing a modern hoist. The hoist operator wouldhave a very positive opinion, much as someone compar-ing their experience driving a car 40 years ago with driv-ing a modern automatic car would have. He’d beimpressed with the ease of the controls and manoeuvringand that there’s no rollback.

The electrical engineer would be impressed as well.He’d think the hoist is great from the perspective of being“network friendly,” with little voltage drops or harmonicsand low maintenance, but he’d be confused by its com-plexities and computer technology. If he had to fix it, he’dbe lost.

The mechanical engineer would see some differencesin the design but there would be only a few componentshe wouldn’t recognize, with the exception of modernbrake controls.

From these three perspectives, you can come to a con-clusion as to where the biggest changes in modern hoistshave been.

CIM: Are there any advantages to older hoists?Kacy: On the mechanical side, we have to give credit tothe mechanical engineers of the past. In most cases, theirdesigns were very good and they built good, long-lastingequipment. We like them from that point of view, withthe exception of the brake systems. Modernizing them byadding modern controls, modern brakes and moderndrives creates a good hoist.

CIM: What about modern hoists?Kacy: Modern hoists have features that provide greaterreliability, performance and control. They are also moreuser friendly.

CIM: Does revamping old mine hoists with modern technologymake sense?Kacy: Yes! Since 1987, we have revamped more than 100hoists, changing the controls and modernizing them.Mine hoists are very expensive. They can run up in themillions of dollars, depending on the size. So, if you canreuse the mechanical parts, there’s an economicaladvantage.

Sometimes time is also a factor. It can take about a yearto have a large, modern hoist delivered, especially in agood economy when the few manufacturers there are inthe world are kept very busy. On the other hand, gettingthe modern electrical components for revamping is fareasier and faster. The reality is there are many availableold hoists. In my time, when I worked in coal mines inEurope, mines could be 80 years old, so when they ceasedoperation, the equipment was so old it was not worthtransporting to another place. But here in North America,we have mines that are closing after 10 years and peoplecan take the equipment to a new mine. I would say manyof the hoists today were originally used somewhere else.They usually have modern systems but the mechanicalpart is being reused. CIM

September/October 2011 | 99

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L’Université du Québec en Abitibi-Témiscamingue (UQAT) et l’Institutcanadien des mines, de la métallurgieet du pétrole (ICM) vous invitent àRouyn-Noranda, Québec, du 6 au 9novembre 2011, à l’occasion duSymposium 2011 sur l’environnementet les mines.

Le symposium est le résultat d’unecollaboration entre la Chaire CRSNGPolytechnique-UQAT enenvironnement et gestion des rejetsminiers, l’Unité de recherche et deservice en technologie minérale(URSTM), l’Association minière duQuébec (AMQ), le Programme deneutralisation des eaux de drainagedans l’environnement minier(NEDEM), le ministère des Ressourcesnaturelles et de la Faune du Québec(MRNF) et l’industrie.

Les objectifs du symposium visent àpartager les connaissances les plusrécentes et à discuter des expériencespratiques afin de « trouver dessolutions pour concilier rentabilité etprotection de l’environnement.»

PROGRAMME PRÉLIMINAIRE | PRELIMINARY PROGRAM

The Université du Québec en Abitibi-Témiscamingue (UQAT) and theCanadian Institute of Mining,

Metallurgy and Petroleum (CIM)invite you to attend the Symposium2011 on Mines and the Environmentin Rouyn-Noranda, Quebec, from

November 6 to 9, 2011.

The symposium is a collaborationbetween the Industrial NSERC

Polytechnique-UQAT inEnvironment and Mine WasteManagement, the Unité derecherche et de service en

technologie minérale (URSTM), theAssociation minière du Québec(AMQ), the Mine Environment

Neutral Drainage (MEND) Program,the ministère des Ressources

naturelles et de la Faune du Québec(MRNF), and the industry.

The objectives of the symposiumare to share recent knowledge and

research developments, and todiscuss common practices to findsolutions that reconcile profitability

and environmental protection.

SYMPOSIUM 2011 ROUYN-NORANDA SUR L’ENVIRONNEMENT MINES AND THE ET LES MINES ENVIRONMENTHÔTEL GOUVERNEUR LE NORANDA ROUYN-NORANDA, QUÉBEC

DU 6 AU 9 NOVEMBRE 2011 • NOVEMBER 6 TO 9, 2011

COMITÉ ORGANISATEUR |ORGANIZING COMMITTEE

PRÉSIDENT | PRESIDENT

Denis BoisUnité de recherche et de service entechnologie minérale de l’Universitédu Québec en Abitibi-Témiscamingue(URSTM-UQAT)

PROGRAMME TECHNIQUE |TECHNICAL PROGRAM

Michel AubertinChaire industrielle CRSNG Polytechnique-UQAT en environnement et gestion des rejets miniers (École Polytechnique de Montréal)

Jean-Claude Belles-IslesAssociation minière du Québec(AMQ)

Mostafa BenzaazouaChaire de recherche du Canada en gestion intégrée des rejets miniers sulfureux par remblayage (UQAT) et INSALyon, LGCIE

Bruno BussièreChaire CRSNG Polytechnique-UQATen environnement et gestion desrejets miniers et Chaire de recherchedu Canada sur la restauration dessites miniers abandonnés (UQAT)

Michel JulienGolder Associés

Gilles Tremblayprogramme NEDEM

Jean DionneMinistère des Ressources naturelles et de la Faune

Jean-François DoyonMines Agnico-Eagle Limitée

Gérald ZaguryÉcole Polytechnique de Montréal

SÉANCE PLÉNIÈRE | PLENARY SESSION

ENVIRONNEMENT MINIER ET ACCEPTABILITÉ SOCIALE |MINING ENVIRONMENT AND SOCIAL ACCEPTANCE

Lors de ce panel, des opérateurs miniers, des chercheurs, des représentantsdes communautés minières et des leaders d’opinions échangeront sur lesdéfis de la gestion environnementale et de la restauration des sites, dansune perspective d’acceptabilité sociale des projets miniers.Mine operators, researchers, representatives of mining communities andopinion leaders will discuss the challenges of environmental managementand site restoration from the perspective of social acceptability of miningprojects.

DATE : Mardi 8 novembre en après-midi | Afternoon of Tuesday, November 8

www.cim.org/rouyn-noranda2011

Page 101: CIM Magazine September/October 2011

COURS INTENSIF | SHORT COURSE

DISPOSITION DES RÉSIDUS DENSIFIÉS | DISPOSAL OF DENSIFIED TAILINGS

DATE : Dimanche 6 novembre / Sunday, November 6 | HEURE / TIME : 8 h 30 – 17 h | ENDROIT / LOCATION :Université du Québec en Abitibi-Témiscamingue | INSTRUCTEUR / INSTRUCTOR : Michel Aubertin, Chaire industrielleCRSNG Polytechnique-UQAT en environnement et gestion des rejets miniers (École Polytechnique de Montréal) et BrunoBussière, Chaire CRSNG Polytechnique-UQAT en environnement et gestion des rejets miniers et Chaire de recherche duCanada sur la restauration des sites miniers abandonnés (UQAT)

Ce cours intensif sera axé sur :

· Les objectifs;· Les caractéristiques générales;· Les résidus épaissis, en pâte et filtrés;· La préparation et le transport;· Le mode, la séquence et l’angle dedéposition;

· Les propriétés hydro-géotechniques et géochimiques;

· L’écoulement de l’eau : conditionssaturées et non saturées;

· L’analyse du comportementgéotechnique : tassement, consolidation,dessiccation, fissuration;

· La stabilité : sollicitations statiques etdynamiques;

· La diffusion et l’oxydation;· La modélisation physique et numérique; et· La restauration.

Des études de cas seront aussi présentées.

This short course, given mainly in French, will cover the following topics:

· Objectives· General characteristics· Thickened, paste and filtered tailings· Preparation and transport· Deposition technique, sequence and angle

· Hydro-geotechnical and geochemicalproperties

· Water flow: saturated and unsaturatedconditions

· Geotechnical behaviour: settlement,consolidation, desiccation and cracking

· Stability: static and dynamic loadings· Diffusion and oxidation· Physical and numerical modelling· Reclamation

Case studies will also be presented.

EXCURSION | FIELD TRIP

VISITE DE SITES D’ENTREPOSAGE DE REJETS MINIERS |SITE TOUR OF MINE WASTE STORAGE FACILITIES

L’excursion traversera l’Abitibi d’Ouest en Est et permettra de réaliser une visite guidée de trois sitesminiers : le site récemment réhabilité de l’ancienne mine Aldermac, la mine Canadian Malartic de laCorporation minière Osisko (site actif d’exploitation minière) et le projet de remise en état deManitou-Goldex (site actuellement en restauration).

Les places sont limitées et l’inscription préalable sera nécessaire. Les vêtements et équipements deprotection individuelle seront disponibles sur place.This field trip will cross Abitibi from west to east and will include guided visits to three mine sites: theold Aldermac Mine (recently restored), Osisko Mining Corporation’s Canadian Malartic project(active mine) and the Manitou-Goldex Rehabilitation project (presently in remediation).Places are limited and pre-registration is required. Individual safety equipment and clothing will beavailable on site.

DATE : Mercredi 9 novembre / Wednesday, November 9 | HEURE / HOUR : 7 h 30 – 17 h | DÉPART ET RETOUR /DEPARTURE AND RETURN : Hôtel Gouverneur Le Noranda

www.cim.org/rouyn-noranda2011

Page 102: CIM Magazine September/October 2011

www.cim.org/rouyn-noranda2011

PROGRAMME TECHNIQUE | TECHNICAL PROGRAMLa traduction simultanée sera offerte en français et en anglais pour les présentations duprogramme technique.Simultaneous translation in English and French will be available for technical presenta-tions.

LUNDI 7 NOVEMBRE | MONDAY, NOVEMBER 7

REJETS DE CONCENTRATEUR | TAILINGS

Planning effective disposal of tailings in permafrost terrainD. Hayley, EBA Engineering Consultants

Vers une mise à jour des critères de stabilité géotechnique pour la conception des ouvragesde retenue des rejets miniersM. Aubertin et al., École Polytechnique de Montréal

The potential benefits and challenges of using tailings as foundation material to increasecapacity of tailings storage facilitiesM. Julien et al., Golder Associés ltée

Les défis associés à la gestion des rejets miniers en milieu urbainJ.S. David et al., Corporation minière Osisko

REMBLAYAGE SOUTERRAIN | BACKFILL

Démarche relative à l’obtention du permis environnemental de remblayage souterrain à la mine Kittilä, FinlandeS. Ouellet et al., Mines Agnico-Eagle Limitée

Stabilisation de l’arsenic dans les remblais miniers en pâte cimentéeM. Benzaazoua et al., INSA Lyon, LGCIE et Université du Québec en Abitibi-Témiscamingue

Analyse de la réponse des remblais formés de rejets miniers pour la conception sécuritairedes chantiers et barricadesM. Aubertin et al., École Polytechnique de Montréal

An investigation into physical and microstructural properties of GelfillF. Hassani et al., McGill University

ROCHES STÉRILES | WASTE ROCKS

The Diavik waste rock research project: geochemistry, scale-up and gas transportR. Amos et al., University of Waterloo

Comportement géochimique et hydrogéologique des stériles de la mine TioB. Bussière et al., Chaire industrielle CRSNG Polytechnique-UQAT en environnement et gestion des rejetsminiers

The behaviour of blended reactive and alkaline waste rock in a high rainfall environmentW. Wilson et al., University of Alberta

Classification of waste rock weathering based on test pile, field cell and mineralologicalstudiesB. Klein et al., University of British-Columbia

Page 103: CIM Magazine September/October 2011

All rights reserved by Agnico-Eagle

SALON COMMERCIAL |TRADE SHOWDes fournisseurs mettront en vedetteleurs produits et leurs services durant leSymposium. Le salon commercial estl’occasion parfaite pour faire de nou-veaux contacts et pour renouer des liensavec des fournisseurs, des entrepreneurset des consultants.Suppliers will showcase their productsand services at this year’s Symposium.The trade show is a great opportunity todrum up business while reconnectingwith suppliers, contractors and consult-ants.

Exposants / Exhibitors :

Environnement ESA Inc.

Filtration Tapp Inc.

Innovex Inc.

John Meunier Inc.

Les Industries Atlantic Ltée

PerkinElmer Canada

Génération2 Filtration

Stavibel

Université du Québec en Abitibi-Témiscamingue (UQAT)

WESA Envir-Eau

www.cim.org/rouyn-noranda2011

Inscrivez-vous en ligne dès maintenant!

www.cim.org/rouyn-noranda2011

POLITIQUES ET RÉGLEMENTATION & MINES ET SOCIÉTÉ | POLICIES AND REGULATIONS IN MINING IN SOCIETY

Gestion du bruit à la division LaRonde et relations avec lescommunautés voisinesP. Lavoie et al., Mines Agnico-Eagle Limitée

Implementing the Troilus agreement – A joint study of Cree employmentand service contracts in the mining industryV. Roquet, Vincent Roquet & Associates Inc.

Programme de réduction des rejets industriels (PRRI) - 2e décret -secteur minierC. Dugas, Ministère du Développement durable, de l’Environnement et des Parcsdu Québec (MDDEP)

Regulation of uranium mines and mills in CanadaJ. Leclair, Commission canadienne de sûreté nucléaire

MARDI 8 NOVEMBRE | TUESDAY, NOVEMBER 8

RESTAURATION DES SITES | SITE RESTORATION

Lessons learned from geomembranes in MSW landfillsR. Brachman, Queen’s University

Restauration du site Manitou à l’aide des rejets de la mine Goldex :design et suivi du siteJ. Dionne et al., Ministère des Ressources naturelles et de la Faune (MRNF)

Goechemical partitioning and distribution of U, Th, Ra, and tracemetals in flooded, pre-oxidized uranium mine tailingsE. Yanful et al., Universty of Western Ontario

La restauration du site minier AldermacD. Isabel, SNC-Lavalin inc.

QUALITÉ DES EAUX | CONTAMINATED WATER

Reactivity of uranium-bearing waste rock during simulated weatheringD. Sapsford et al., Cardiff School of Engineering

Causes of Mn marginal removal in passive systems treating acid minedrainageC. M. Neculita et al., Korea Advanced Institute of Science and Technology (KAIST)

Gestion des eaux souterraines à la mine GoldexM. Tremblay et al., Mines Agnico-Eagle Limitée

Mine water management in cold climates: case study of MeadowbankS. Robert, Agnico-Eagle Mines Limited

NOUVELLES TENDANCES | NEW TRENDS

Water management at Syncrude Canada Ltd. – An integrated open-pit mining/extraction/upgrading facilityW. Zubot, Syncude Canada Ltd.

Projet BNQ 21000F. Craig, en partenariat avec le MDEIE, le BNQ, Neuvaction et la Chaire de gestion de développement durable

Mine reclamation in the USAÀ confirmer / To be confirmed

A review of closure strategies for pit lakes at hard rock metal minesin the United StatesL. E. Eary, Interralogic Inc.

Page 104: CIM Magazine September/October 2011

Chaire CRSNG Polytechnique - UQATen environnement et gestion des rejets miniers

PARTENAIRESPARTNERS

SESSION AFFICHES ÉTUDIANTES | STUDENT POSTER SESSIONDes affiches reliées aux pratiques minières durables et à l’environnement minier,sur n’importe lequel des sujets du Symposium seront présentées. Les affichesseront vues par tous les délégués et exposants à cet événement. Les étudiantsdiplômés qui s’intéressent aux pratiques minières durables et à l’environnementminier saisissent la possibilité de démontrer leurs talents.Posters on the full range of topics related to mining sustainable practices and themining environment will be presented. They will be seen by all delegates andexhibitors at the event. Graduate students interested in sustainable mining prac-tices and the mining environment are seizing the opportunity to showcase theirtalents.

INSCRIPTION | REGISTRATIONLes frais d’inscription des candidats retenus seront payés; ils comprennent l’accèsaux présentations techniques, au salon commercial, à la réception d’ouverture dudimanche soir et aux dîners du lundi et du mardi.Successful candidates will receive complimentary registration, which includes:access to the technical presentations and trade show, Sunday night openingreception, and luncheons on Monday and Tuesday.

PERSONNE-RESSOURCE | CONTACTVous pouvez contacter Louise Labbé au 819-762-0971 (poste 2558) ou parcourriel à [email protected] pour toute information additionnelle.Please contact Louise Labbé at 819-762-0971 (ext.2558) [email protected] for further information.DATE : Lundi et mardi, 7 et 8 novembre / Monday and Tuesday, November 7 and 8

www.cim.org/rouyn-noranda2011

PROGRAMME SOCIAL | SOCIAL PROGRAM

DIMANCHE 6 NOVEMBRE | SUNDAY, NOVEMBER 6Cocktail de bienvenue de 18 h à 21 h | Welcoming Reception from 18:00 to21:00

LUNDI/MARDI 7 ET 8 NOVEMBRE | MONDAY/TUESDAY, NOVEMBER 7 AND 8Dîner dans le salon commercial | Lunch at the Trade Show

LUNDI 7 NOVEMBRE | MONDAY, NOVEMBER 7

SOUPER SPECTACLE

Le souper spectacle mettra en vedette des produits du terroir local, le tout suivid’un spectacle de haute qualité (19 h à 22 h 30), précédé d’une réception (18 h).Lors de la soirée, le prix carrière sera remis à une personne dont la carrière amarqué le développement de l’environnement minier au Québec.

BANQUET

The evening begins with a cocktail reception at 18:00, followed by a banquetfeaturing local specialties and a fantastic show from 19:00 to 22:30. During theevening, the Career Award will be presented to someone whose career hasmarked the development of the mining environment in Quebec.

Page 105: CIM Magazine September/October 2011

cim news

September/October 2011 | 105

Abdel Sabour, Sabry, USAAcott, Gerry, AlbertaAdendorff, Jaco, South AfricaAitaok, Jorgan, NunavutAjumogobia, Somiari, AlbertaAleshkov, Sergey, RussiaAnguelov, Raytcho, British ColumbiaArbi, Ali, British ColumbiaArdito, Cynthia, USAArko, Tara, NunavutBaldwin, Jessica, Newfoundland & LabradorBarja Castellano, Rebeca, British ColumbiaBarry, Ryan, NunavutBeaune, Calen, OntarioBerlizov, Andrey, UkraineBoadu, Richmond, GhanaBoldyrev, Valeriy, RussiaBoley, Trey, USABowal, Curtis, AlbertaBoytsov, Alexander, RussiaBresser, Hugh, AustraliaBrisco, Margaux, NunavutBryant, Colin, AustraliaBuhlman, Nick, OntarioCampbell, John, AlbertaCash, Aileen, OntarioCavasin, Alex, OntarioChalmers, Mark S., AustraliaChan, Ming Kit, ChinaChan, Wendy, ChinaChan, Sik Lap, ChinaChaudhari, Bhavesh, IndiaChaytor, Sandra, Newfoundland & LabradorCheng, Tony, ChinaCherepanov, Andrey, RussiaChesney, Cindy, OntarioCheung, Michael, British ColumbiaChirchikbayev, Bakyt, KazakhstanCole-Rae, Kendall, OntarioDe Windt, Bertrand, OntarioDel Mastro, Jonathan, AlbertaD’Orazio, Rosanne, NunavutDunn, Hunter, AlbertaErskine, Dan, USAFauconnier, Anne, FranceFerraro, Jean-François, FranceFisher, Scott, OntarioFreed, Rina, British ColumbiaGabriel, Sophie, FranceGanesan, Arjun, British ColumbiaGeslin, Wilfried, FranceGetz, Arnold, AustraliaGingras Little, Kristopher, OntarioGirgis, André, OntarioGolovko, Valery, RussiaGraham, Jim, USAGranchinho, Sophia, NunavutGraves, Doug, USAGubago, Moopi, OntarioGuimaraes, Flavio Marcio, British ColumbiaGupta, Brijesh, IndiaHalliday, Matthew, OntarioHames, Ben, British Columbia

CIM welcomes new membersHan, Wei, British ColumbiaHarkema, Albert, OntarioHarris, Douglas, USAHassani, Selemani, British ColumbiaHein, Glen, KazakhstanHem, Priyadarshi, British ColumbiaHisatani, Koichi, JapanHo, Chin Choi, ChinaHo, Ivan, British ColumbiaHockley, Daryl, British ColumbiaHogg, LuVerne E.W., British ColumbiaHorner, Mark, OntarioHuan, George, British ColumbiaHubbard, Martin, United KingdomHughes, Alan, AustraliaIndyk, Sergey, RussiaJaganathan, Satishkumar, USAJohnson, Anne, OntarioJohnson, Leif, USAKhan, Nizam, OntarioKirk, Patricia, USAKriz, Petr, Czech RepublicKyle, John, USALangille, Steve, OntarioLangton, Chris, AlbertaLau, Paul, ChinaLedoux, Luka, OntarioLee, Haydn, ChinaLee-Sheriff, Janet, British ColumbiaLeuret, Théo, FranceLi, Tianbai, AlbertaLi, Wenjie, ChinaLi, Xizhong, AlbertaLickers, Samantha, OntarioLingel, Ed, British ColumbiaLitke, Shauna, British ColumbiaLongo, Sue, AlbertaLuminita Crisu, Tereza, British ColumbiaLyle, Glenn, OntarioMaley, Mark, AustraliaMaskokian, Siamak, IranMason, Peter, USAMathema, Bruce N., OntarioMcGladrey, Alexandra, British ColumbiaMcPhee, Lindsey, AlbertaMensah Fynn, Anthony, GhanaMikhaylenko, Mikhail, RussiaMoghadam, Sanaz Zadeh, British ColumbiaMokgosi, Emmanuel, OntarioMoodie, Kelly, OntarioMoodley, Kasuren, South AfricaMorrison, Parker, OntarioMushinski, Ken, USANavratil, James, USANeumann, Jessica, OntarioNikbakhtan, Babak, AlbertaNoor, Meskatun, OntarioNorris, Christopher, OntarioOhnemus, Joachim, GermanyOkure, Unyime Martin, AlbertaOkutsu, Misato, OntarioPaatero, Erkki, FinlandPaju, Greg, Ontario

Pandhari, Abhijit, British ColumbiaParenteau, Jason, AlbertaPasco, Luis, PeruPeddada, Sharath, OntarioPerez-Ramirez, Javier, British ColumbiaPitts, Michelle, OntarioPlayter, Tiffany, AlbertaPohjolainen, Esa, FinlandQin, Shijia, British ColumbiaRegli, Andrea, OntarioRodgers, Matthew, USARooney, Jodi, AlbertaSamuelson, James, USASavytska, Margarita, UkraineSchmidt, Roland, USASchmidt, Sherry, OntarioScott, Robert, OntarioSeifried, Helen, AlbertaSeredkin, Maxim, RussiaShahwan, Moein, Newfoundland & LabradorSheriff, William, British ColumbiaShimoda, Tomoya, AustraliaShkwarek, Meagan, OntarioShtusa, Mikhail, RussiaShulga, Dmitry, RussiaSkibsted, Brant, AlbertaSoldatek, Steven, USASpoelstra, Nico, South AfricaSrigyan, Dipankar, AlbertaSt-Pierre, Sylvain, United KingdomSutton, Carson, AlbertaSze, Marco, ChinaTang, Mark, British ColumbiaTarkhanov, Aleksey, RussiaTisdell, Dominic, AustraliaTomlinson, Steele, British ColumbiaTrump, Daniel, USAUbah, Chinedu, British ColumbiaVekris, Evangellos, OntarioViel, Marcel, OntarioVincent-Lambert, Warren, AlbertaWalter, John, OntarioWasylik, Darrin, British ColumbiaWatson, Curtis, OntarioWiley, Chris, USAWoolley, Richard, AlbertaWorkman, Lyall, USAYoshie, Hiroshi, AlbertaYuan, Haoyue, British ColumbiaZalokotskiy, Taras, UkraineZhang, Shujing, British ColumbiaZhang, Tianhang, British ColumbiaZhang, Zhao, AlbertaZhivov, Vadim, RussiaZhu, Shanyu, British ColumbiaZimmerling, Stephanie, OntarioZubair Mir, Hasan Ali, Alberta

Corporate MembersIntergraph CanadaCentre Jardin Lac Pelletier (3088-6469 Québec Inc.)

Page 106: CIM Magazine September/October 2011

H I S TO R Y O F

economic geology

106 | CIM Magazine | Vol. 6, No. 6

On the eve of World War I (1917 for the U.S.),

engineer-journalist Thomas A. Rickard com-

mented on the difference between the levels

of prestige accorded to the profession in the

United States and Britain. He wrote that a

young American woman regarded the mining

engineer “as an energetic explorer on the

frontier, as a resourceful technician that finds

the metals required in civilized life”, whereas

the young Englishwoman had “a vague idea

that the mining engineer is a somewhat

nomadic person connected with queer doings

on the stock exchange” (Rickard, 1937). On

the same topic, Herbert Hoover told of being

with a charming female companion, an

Englishwoman, on a trans-Atlantic voyage.

When the trip was nearly over, in response to

her query, he told her he was a mining engi-

neer and she was shocked. “Oh, I thought you

were a gentleman”, she said (Hoover, 1951).

Spence, 1970, p. 16.

[Hoover later served as president of the United

States between 1929 and 1933.]

The foundations of modern economic geology (Part 6)By R. J. (Bob) Cathro, Chemainus, British Columbia

The final step in building a strong foundation for economic geology was to trainenough mining engineers and mining (economic) geologists to satisfy the rapidlygrowing demand in the western United States and other parts of the world. Thereason this article focuses on mining schools is because they provided the besttechnical training during that era. Many of the future geologists probably did noteven know they had an interest and aptitude for the subject until they began theirmining courses or, in some cases, until they had embarked on their careers in theindustry.

Engineer Benjamin B. Lawrence described mining in 1910 as “the most polyglotof all the professions. … Geologist, surveyor, lawyer, mechanic, chemist, metallurgist,mineralogist, electrician, this was the mining engineer of the old school.” As long astechnical knowledge had not advanced too far, the engineers were able to remain gen-eral practitioners, but ultimately – even before the 20th century – they began todevelop specializations that might take them in half a dozen different directions.

During much of the 19th century, most engineers were of the practical variety– men who through circumstance, ability, hard work and experience in the differ-ent aspects of mining and milling had won their positions without special educa-tion. But from the mid-1860s on, the trend moved in the opposite direction, andit was estimated that 85 per cent were college-trained by 1921 (Rickard, 1921). “Itwas the American universities that took engineering away from rule-of-thumb sur-veyors, mechanics and Cornish foremen and lifted it into the realm of applicationof science, wider learning in the humanities with the higher ethics of a professionranking with law, medicine and the clergy” (Hoover, 1951).

Prior to about 1870, most of the educated mining engineers in America were theproducts of European schools, the most important of which was the Bergakademieat Freiberg in Saxony. As noted in previous articles, the school had produced someof the most influential economic geologists, including Rossiter Raymond,Waldemar Lindgren, Samuel Emmons, Richard Rothwell and John HaysHammond. Whereas only a handful of Americans had enrolled there before 1850,the number increased rapidly to as many as 25 annually during the early 1860s. Bythe late 1860s, about half of the enrolment of 100 came from the United States.

By 1876, however, the trend was changing and only 18 of 139 were American.Students from the United States or Canada came with varying backgrounds and,although not mandatory, most had taken some previous college courses beforethey entered. Applicants were required to pass examinations that were roughlyequivalent to Harvard admission standards, to be followed by a practical four-month preparatory course in the mines and smelters. Most American studentswere not degree candidates; however, many remained at least three years. If theywere not working towards degrees, they were not required to take examinationsand could do very little, if they so desired.

The Bergakademie combined theory and practice. The latter, covering bothmining and smelting, was a spring and summer program designed to prepare stu-dents for the regular fall classes. By the 1870s, Freiberg had four principal courses:mining engineering, metallurgical engineering, mine surveying, and iron mineengineering and metallurgy. Students studied geology under Bernhard Von Cottaand Alfred Stezner. Except for drawing, surveying, mineralogy and petrography,physics and chemical analysis, blowpipe and assaying, all teaching was donethrough lectures with a minimal emphasis on laboratory work. That emphasiswould soon shift in American schools.

Page 107: CIM Magazine September/October 2011

After leaving Freiberg, many American students spenttime at other European mining schools, such as the École desMines in Paris, where they were taught mineralogy byDaubrée and geology by Élie de Beaumont and DeChancourtrois. Other outstanding schools included those inClausthal (Hartz Mountains), Berlin, Frankfurt, Gotingenand Schemnitz (Slovakia). John A. Church, an Americanmining engineer, wrote in 1871 that there were only fourfirst-class mining schools in Europe: Freiberg, Berlin, Parisand the Royal Mining Academy at St. Petersburg. Very fewAmericans were trained at the latter. Church did not includeany British schools, although a few Oxford and Cambridgegraduates did become mining engineers. Even the RoyalSchool of Mines at London lacked the prestige and influenceof the best European and American institutions, in partbecause the profession had less social and intellectual pres-tige in England. The eminent graduate T. A. Rickard wrote in1904 that if British technical men held their own, “it is ratherthrough inherited ability than the aid afforded by the miser-ably financed … (British) schools of mines.”

One of the first American schools that trained engineerswas the Rensselaer Polytechnic Institute at Troy, New Yorkstarting in 1835. Most of those were civil engineers although afew, including Richard Rothwell from Ontario, became miningengineers. The Polytechnic College in Pennsylvania, charteredin 1853, was probably the first institution to offer a degree inmining. About 50 of the first 369 graduates prior to 1890 arethought to have worked in the minerals industry. However,that school languished because it was unable to attract fundingor good teachers and students on a continuing basis.

The first successful American mining institute was theSchool of Mines at Columbia College in New York, whichenrolled 29 students when it opened in 1864. When a newbuilding was built the next year, the enrolment increased to 79and Columbia Mines, as it was known, was wellon its way to becoming the most outstandinginstitution of its kind. In the beginning, it offereda three-year program to those who were at least 16years old and had passed exams in algebra, geom-etry and trigonometry. First-year courses includeddrawing, stoichiometry, mathematics (analyticalgeometry and differential and integral calculus),physics (heat and the steam engine), electricityand magnetism, inorganic chemistry, quantitativeanalysis, mineralogy (including blowpipe use andanalysis), French and German. In the second year,students continued mineralogy and quantitativeanalysis and added metallurgy, mechanics, geol-ogy, botany and mining engineering (machines).In the final year, metallurgy, quantitative analysis,theory of veins, “exploitation of mines,” assayingand “conservation of force” were added, alongwith an attempt to connect the various sciences.

Although a Yale professor thought that the1866 course load was “not very thorough or

complete,” he had to admit that the new technical school was“creating a sensation.” Editors lauded the institution and vis-itors were impressed with the rigour of the curriculum.Church, an expert on the subject, stated in 1871 that it wasalready “one of the best schools in the world – more scientificthan Freiberg, more practical than Paris.” By this time,Columbia Mines had been reorganized as a general school oftechnology that offered five regular courses of instruction:mining engineering, metallurgy, civil engineering, geologyand natural history, and analytical and applied chemistry.

The two initial professors who were credited with makingthe school a success were Francis Vinton and Thomas Egleston.Vinton, a graduate of West Point military academy before com-pleting the course in Paris, was the first professor of miningengineering. Egleston studied geology and mineralogy at Yaleunder Benjamin Silliman before attending Paris with Vinton.He taught geology and metallurgy. Because of them, theEuropean impact lingered for some time, although JamesDana’s Manual of Geology (1863) was a basic tool from thebeginning. Because of the superior facilities in metallurgy, earlystudents tended to gravitate towards it rather than mining.

By 1872, a preparatory year had been added to the cur-riculum and the minimum age had been raised to 18. By1873, the enrolment of 140 students at Columbia Minesexceeded that of Columbia College itself. Of the 189 degreesawarded by Columbia Mines by the end of 1881, 60 per centwere engaged in mining or kindred fields, 29 per cent werechemists or assayers, six per cent were metallurgists, and fourper cent were geologists or mineralogists. The early domi-nance of Columbia Mines was demonstrated in 1879 when itawarded 20 of the 31 mining engineering degrees presentedin the country. Of the 871 mining engineering graduates inthe United States prior to 1892, 402 (46 per cent) were fromColumbia (see table). By then, at least 25 graduates were

H I S TO R Y O F

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September/October 2011 | 107

Total number of graduates from U.S. mining schools to 1892 (Spence, 1970; Table 1, p. 40)

Date of Institution No. of grads Averagefirst to 1892 per year

graduation

1867 Columbia School of Mines 402 15.46

1867 University of Michigan 41 1.57

1868 Massachusetts Institute of Technology 126 5.04

1869 Washington and Lee (none since1875) 8 0.03

1871 Lehigh University 48 2.28

1871 Lafayette College 40 1.71

1874 Missouri University 26 1.31

1874 Washington University, St. Louis 43 2.26

1877 University of California 55 3.44

1878 University of Illinois 6 0.40

1879 University of Wisconsin 12 0.92

1882 Colorado School of Mines 26 2.60

1888 Michigan School of Mines, Houghton 27 5.40

1890 Alabama Polytechnic 4 1.33

1891 Montana School of Mines 6 3.00

1892 Pennsylvania University 1 1.00

Total in 26 years 871 33.05

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economic geology

108 | CIM Magazine | Vol. 6, No. 6

based in Colorado, 12 in New Mexico, seven in Utah, sixeach in California and Arizona, and four in Nevada.

In addition to the schools listed in the table, a few miningengineers had graduated from Texas A&M University,Armour Institute, University of Wyoming, Stanford, SouthDakota School of Mines (1887), University of Arizona Schoolof Mines (1891), University of Nevada School of Mines(1892) and New Mexico School of Mines at Soccoro (1893).Some of those eventually grew into very prominent schools.

The School of Mines at the Berkeley campus of theUniversity of California had an inauspicious beginning as aprivate school in 1864. However, once it was merged into thestate system a decade later, it soon emerged as the leadinginstitution of its kind in the West. Stability was achievedwhen Samuel Benedict Christy became professor of miningand metallurgy in 1885. Increased demand from Australiaand South Africa for American engineers led to an increasefrom an average of three graduates annually between 1880and 1898 to 29 per year from 1899 to 1917. California Schoolof Mines had conferred 536 degrees by 1917.

The Colorado School of Mines also had a slow and diffi-cult start because of inadequate financial support by the state.One professor described the students in 1917 as a “fair atten-dance of the roughest specimens of youthful humanity thatcan be found anywhere.” It is not known whether theybecame above-average engineers or not.

The earliest mining engineering schools established inCanada were the School of Practical Sciences at theUniversity of Toronto (1878), McGill University whichclaims to be the oldest (1879), Queen’s University (1893),Nova Scotia Technical College at Halifax (1906), Universityof Alberta (1914) and University of British Columbia (1915).The Nova Scotia school was created to amalgamate miningcourses first offered before 1900 by the University of King’sCollege, followed by those at Acadia, Mount Allison andDalhousie. King’s College and the Technical College laterbecame associated with Dalhousie.

AcknowledgmentsMost of the information in this article has been derived

from Spence (1970).

CIM

ReferencesHoover, H. (1951). The memoirs of Herbert Hoover, Vol 1. New York: Macmillan, p. 131-132.

Lawrence, B. B. (1910). Engineering profession. New York: The (Columbia) School ofMines Quarterly, April, p. 207.

Rickard, T. A. (1904). Engineering and Mining Journal. New York: Vol. 78, p. 459.

Rickard, T. A. (1921). The education of a mining engineer. San Francisco: Mining &Scientific Press, Vol. 123, p. 815.

Rickard, T. A. (1937). Retrospect: an autobiography. New York: Whittlesey House,McGraw-Hill Book Company, p. 138.

Spence, C. C. (1970). Mining engineers & the American west: the lace-boot brigade,1849-1933. New Haven: Yale University Press, 407 p.

Canadian Metallurgical QuarterlyThe Canadian Journal of Metallurgy and Materials Science

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Page 109: CIM Magazine September/October 2011

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metallurgy

September/October 2011 | 109

IntroductionIn 1717, Isaac Newton (1643–1727), Britain’s Master of

the Mint, set the value of currency at three pounds, 17shillings and 10.5 pence (based on one ounce of gold). In1844, the Bank of England established the Gold Standard bywhich all notes were fully backed by gold. After the goldrushes of the 1840s and the increased supply of gold, theprice for the precious metal stabilized.

With the expansion of industry and commerce in the late19th century, there was an increased demand for gold andsilver as currency. Gold also became the basis for the creditand banking systems, which were involved in financingimportant new projects overseas. Furthermore, newdemands for both metals arose during this period due to theinvention of plating and its application to inexpensive silver-ware and jewelry, for which very large markets quicklydeveloped.

Gold mining in RussiaRussia was one of the major gold producers in the 19th

and 20th centuries. Many Russian counts and tsars sent menout on expeditions to prospect for gold, silver and base met-als in the outskirts of the great empire. However, the earlierattempts failed due to lack of experience. When travelling inWestern Europe, Peter the Great (1672–1725) familiarizedhimself with the fundamentals of mineralogy, mining andmetallurgy. Confident in the mineral potential of his country,

Gold in Siberia: a historical essayBy Fathi Habashi, Laval University, Quebec City

he invited skilled explorers from England, Germany andHolland on geological expeditions in Russia.

A series of gold discoveries followed: on the northerncoast of the White Sea in 1737; in the Altay Mountains in1733-1735; and by a peasant on the eastern slope of the UralMountains in 1745. It took two years to verify the latter findand, in 1748, the first Russian gold mine was set up. How-ever, a gold rush did not ensue as the vast majority of theRussian population was comprised of serfs and political pris-oners bonded to numerous noble landlords or a few indus-trialists. This was well-documented by American engineerGeorge F. Kennan (1845-1924) in his book Siberia and theExile System, first published in 1891. Kennan was employedin 1864 by the Russian American Telegraph Company tosurvey a route for a proposed overland telegraph linethrough Siberia and across the Bering Strait. In May 1885,Kennan began another voyage, this time across Siberiabeginning in Europe.

Exploration in Siberia began in 1826 when the Crownbegan granting authorizations to several entrepreneurs tosearch for gold. As a result, a wave of gold rushes inundatedsouthern Siberia in the early 1830s. Hundreds of alluvialdeposits were found in the mountains of Altay, Sayan andEniseysky Kriazh. The gold output in the southern part ofwestern and central Siberia grew to 17.4 tonnes in 1855,however, began to decline in 1913. At the time, gold was

Map of Siberia showing the major gold producing areas in Magadan, Yakutsk and Krasnoyarsk

Page 110: CIM Magazine September/October 2011

primarily mined by hand, put through Chilean mills andthen amalgamated.

In the early 19th century, Irkutsk was flourishing as atrading and administrative centre as it was near the borderof China and on the Angara River. It was perfectly posi-tioned along the ancient river trading route running fromthe Arctic Ocean and the Yenisei River via the Angara toLake Baikhal. Irkutsk further benefitted from the opening ofthe Siberian Trakt – a direct road from Moscow. Although arough route to travel, it was used to transport goods, andaccommodations were available along the way. Exiles,traders, industrialists andtravellers began arriving inIrkutsk. Soon it was estab-lished as the capital city andthe seat of the governorgeneral of eastern Siberia.

After the abolition ofserfdom in 1861 and withrapid industrial develop-ment, gold mining tech-niques became moreadvanced and operationswere further mechanized.However, horsepowerremained the main earth-moving force until the endof the 19th century when,with the assistance of West-ern professionals, dredgingwas introduced. Gold wasfirst discovered in the AmurRiver basin in 1850, and inthe winter of 1857-1858, anexpedition found gold inthe Maya River basin. Thenext several years weremarked by numerous dis-coveries. Zeyski, a majorgold district in the Amurregion, yielded 66.8 tonnesof gold between 1876 and1900. The first dredger,which was built in Holland,was introduced in Amur in1894. The operation was so successful that another dredgewas ordered a year later. From 1902 to 1915, about 96tonnes of gold were produced in the province.

The Lensky Gold District was part of Transbaikalia, amajor gold province. The first finds of alluvial gold in thisarea occurred in 1843, but they were minor compared tothose in other parts of southern Siberia. Three years later,two exploration parties discovered two enormously richplacers in the Khomolkho River basin. A series of new dis-coveries followed over the next five to eight years. In 1868,

placers were discovered in the Bodaibo River basin. Dredg-ing began in the district in 1914.

Exploitation of gold deposits in the Urals led to thefounding of Ekaterinburg and in 1901, to the inaugurationof the Trans-Siberian Railroad. Before World War I, Russiamaintained its status as one of the world’s major gold pro-ducers, with an annual output of about 64 tonnes.

The Russian RevolutionGold mining was interrupted during the Revolution of

1917 and the Civil War that followed. When the Soviets tookover the government, the phi-losophy at that time, as for-mulated by Karl Marx (1818–1883), was that gold willeventually lose its value whenCommunism prevails, thatthis explains the diminishinginterest in exploring for gold,and why all efforts were to bedirected to iron and steel.However, Joseph Stalin, whocame to power in 1922, wasvery impressed by the Califor-nia Gold Rush after reading anumber of books on the sub-ject. Fearing Japanese imperi-alism would occupy thesparsely populated easternprovinces, he opened theregion up to miners toexplore for gold in hopes ofrecreating the California rushin the area. In 1927, Stalinsent Alexander PavlovitchSerebrovsky (1884-1938),director of Azerbaijan CentralOil Administration and a pro-fessor at the Moscow Schoolof Mines, to study gold min-ing in the United States.

Serebrovsky, a native ofUfa, hired John D. Littlepage(1894–?), an American min-ing engineer working in the

gold mines in Alaska, to develop Russia’s gold industry. AGold Trust was being established for this purpose; minersfrom Germany and other countries were hired and miningequipment was purchased. Prospectors and miners wereencouraged to search for gold, which kicked off a gold rush.Several hundred thousand men and women were workingunder the control of the Gold Trust. Remarkably, the rush waswell organized and the miners were well behaved. However,due to the policy to liquidate the kulaks and the use of forcedlabour, the industry suffered a setback resulting in numerous

H I S TO R I C A L

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110 | CIM Magazine | Vol. 6, No. 6

Karl Marx

Peter the GreatIsaac Newton

George F. Kennan

Page 111: CIM Magazine September/October 2011

Suggested ReadingsHabashi, F. (2010). Mining and Civilization. An Illustrated History. Québec City: Métal-lurgie Extractive Québec. Distributed by Laval University Bookstore (www.zone.ul.ca).

Habashi, F. (2009). Gold. History, Metallurgy, Culture. Québec City: Métallurgie ExtractiveQuébec, 277 p. Distributed by Laval University Bookstore (www.zone.ul.ca).

Kennan, G. F. (1891). Siberia and the Exile System. New York: Century Company. Facsim-ile edition by Eliborn Classics (2006).

Littlepage, J. D. & Bess, D. (1938). In Search of Soviet Gold. New York: Harcourt-Brace,310 p. Russian translation available.

Prohorov, A. M., ed. (1973-1983). The Great Soviet Encyclopedia. New York: Macmillan.Contains a biography of Serebrovsky, but no mention of his trip to the United States or ofLittlepage.

September/October 2011 | 111

Serfs and political prisoners on their way to exploit the gold mines in Siberia belong-ing to the tsar (from George F. Kennan, 1891)

acts of sabotage, which led to the purges of 1933. Russia’smain mines were located near the city of Bodaybo in centralSiberia, at Magadan on Siberia’s east coast, and on the Chukot-skiy Peninsula on the Bering Strait. After World War II, theUSSR became the second largest gold producer in the world.

Alexander Serebrovsky, a member of the CommunistParty of the Soviet Union, studied at St. Petersburg Instituteof Technology, graduated from the Higher Technical Schoolin Brussels, and was the deputy of People’s Commissar forHeavy Industry of the USSR. He was arrested on September23, 1937, and on February 8, 1938, was convicted of“counter revolutionary activities” by the Military Collegiumof the USSR Supreme Court. He was shot in on February 10,1938. Many heads of industry in the USSR were subjected torepressive measures in 1937-1938, however, they were reha-bilitated in the 1960s after the Stalin era.

AcknowledgmentsThe comments of Professor Igor Petrov of Moscow are

gratefully acknowledged.

CIM

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114 | CIM Magazine | Vol. 6, No. 6

Exploration has always been atthe heart of resource develop-ment in Alberta, yet only a few

years ago industry and governmentleaders were questioning whether iteven had a future in the province. Fastforward to 2011, and the AlbertaChamber of Resources’ Task Force onResource Development & the Economyhas found that past predictions couldnot be further from the truth.

Established in 2009, the taskforce looked at the resource sector’shistorical impacts and assessed thefuture potential for resource develop-

ment in Alberta. It found that the province is nowherenear the end of its conventional oil and gas reserves,due primarily to new technologies that have extendedproduction horizons by decades.

It is estimated that hundreds of years of bitumenand coal production lie ahead. Forest management andsustainability practices have resulted in a renewableresource base, which is satisfying the growing globaldemand for wood and fibre. Waiting to be discoveredand quantified is a diversified basket of industrial min-erals, including iron, potash, lithium, titanium, uraniumand diamonds.

Along with Robert Mansell, an eminent resourceeconomist from the University of Calgary, the taskforce documented how resource sectors have beenthe mainstays of Alberta’s economy. Over the past 10years, resource development has generated 62 percent of Alberta’s GDP and 50 per cent of employ-ment. Nationally, the sector is the largest net con-tributor to Canada’s favourable trade balance andaccounts for one-quarter of all Canadian businessprofits. Resource development requires smart, highlyskilled workers, including engineers, technologists

and tradespeople who bring home significantlyabove-average incomes.

The report’s most encouraging finding is a simpleconfirmation: that there is a future for resource devel-opment and it will continue to drive our economy. Forthose of us who work in the industry, we can feel con-fident that we are making a difference for future gen-erations. Wise government policies and smartcorporate strategies have the potential to add anincremental $700 billion in Alberta’s GDP and almostfour million incremental person years of employmentin the next decade. The social benefits should not beforgotten: in 2007, the oil and gas sector alone paidalmost $60 billion to Canadian governments, resultingin more funding for social infrastructure such as

schools, hospitals and roads,which contribute greatly to ourquality of life.

The stereotype of “hewers ofwood and drawers of oil” is grad-ually being supplanted by therealization that the resource sec-tors of the 21st century are char-acterized by the sophistication

of business and technology. By focusing on innovationand productivity, resource companies are able toreduce impacts on the environment, extend the life ofresources and generate social and economic benefitsfor future generations of Albertans, and Canadians in general.

While I was at the Alberta Oil Sands Technologyand Research Authority in the mid-1980s, we weredetermined to find a way to tap into the deep reservesof bitumen. Ideas and creativity certainly played a rolein our research; however, it was the courage of ourconvictions that truly made the difference in the cre-ation of a new technology called steam-assisted grav-ity drainage (SAGD). The same can be said for the nextdecade of resource development. The future is not lim-ited by the reserves in the ground, but rather by thelimitations of our imagination, innovation and stewardship.

If you are interested to learn more about the taskforce and the recommendations for industry and govern-ment to achieve the potential that exists in resourcedevelopment over the next decade, visit www.acr-alberta.com. CIM

Resource potential…the best is yet to comeBy Brad Anderson, executive director, Alberta Chamber of Resources

The future is not limited by the reserves inthe ground, but rather by the limitations ofour imagination, innovation and stewardship.

Page 115: CIM Magazine September/October 2011
Page 116: CIM Magazine September/October 2011

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