Ep 10. Getting Mines off The Ground
In this episode we examine some of the most challenging questions mines are asking today. How can mines compete against tech companies to raise capital? how do you navigate the social and environmental red tape to get a mine to production? How does mining gain public and investors trust? Our guest Mauro Chiesa provided us with both in-depth and straightforward information about how modern day operators need to approach the complex and challenging world of starting up new mines.
Mauro Chiesa is an advisor with 36 years of financing and advisory services in the fields of extractive and infrastructure projects. This has included four years in Ottawa with Export Development Canada, 13 years in New York City with two international banks specialized in industrial finance, ten years with the World Bank Group, primarily with IFC, and ten years as an independent advisor and consultant in Vancouver. He has an MBA and a BA from the University of British Columbia.
In today’s markets mines can often take well over 10 years to get off the ground. The process to start a mine is a lengthy and rigorous process. Before putting together the actual operations, there are a few planning or preliminary steps that each potential mine operator has to undertake.
- Step 1 Initial Sampling: The operator (or at this stage explorer) uses basic methods like hand tools to collect samples from a potential site. These methods are and should be non-ground disturbing. Experts in the industry believe that success in the mining industry requires lots of research. And you will need mining industry knowledge.
- Step 2 Local Communities Involvement: If initial sampling shows that minerals are present the operator gets in touch with local title parties to inform them of their intention to drill.
- Step 3 Site Survey: If the local communities like the Indigenous communities are on board, a site survey will restrict mining to specific areas so that the heritage site is still protected.
- Step 4 Drill Samples: Samples taken from drill exploration are analysed to see if minerals are present (our new episodes will feature Energold to talk more about drill exploration).
- Step 5 Develop Models: Further drilling needs to take place to accurately develop models like geological models, resource models, feasibility studies etc.
- Step 6 Mining Permit: Before the actual mining process can begin, the operator needs to apply for necessary permits and take approval of all stakeholders involved.
Once the preliminary steps have been performed and all permits are in place, the operator can move to the next phase:
- Step 1 Determining Plant Type: A plant type depends on the mineral and at what scale does the operator want to produce that mineral.
- Step 2 Water Requirements: Water requirements will also change according to the plant and capacity. These requirements need to be carefully laid out and submitted to relevant authorities.
- Step 3 Tailings Disposal: After the mount Polley incident in 2014 there is increased pressure on mine operators to keep their disposal systems like tailings systems up to date. These have to be constructed according to safety standards and in the presence of engineers. (In one of our upcoming shows C.D. (‘Lyn) Anglin, PhD, PGeo, Chief Scientific Officer & VP Environmental Affairs Imperial Metals Corporation will discuss this topic in more detail).
- Step 4 Equipment: Next the operator needs to source the mining equipment. Mining companies will require loads of equipment to function properly. This is probably one of the biggest hurdles for anyone who want to start a mining business. Equipment can include drills, industrial pumps, construction vehicles, etc. In case of limited financial backing some operators choose to invest in used mining equipment which is comparatively much cheaper to acquire. Companies like Ritchie Bros. pioneer in selling used heavy machinery
- Step 5 Personnel: Mining operations need employees to help everything come together. The operator will need people to do the manual labor jobs and help mine the materials. But they will need experienced employees. There can be no exceptions here.
- Step 6 Health and Safety: With safety being of utmost importance, the mine operator will have to demonstrate that they invested enough towards the health of their employees and safety of their operations
- Step 7 Remaining Permits: The operator needs to put all remaining permits in place. For ex: Most mined products are exported, hence they might need to obtain export license
- Step 8 Initiation: Once all the above steps have been performed and all permits are in place, the operator can begin operations.
With all the challenges mines certainly have an uphill battle in today’s market but Mr Chiesa’s perspective on how mines can share infrastructure, invest in new equipment, and invest in communities they mine in offers solutions that can not only move the industry forward but attract the next generation of miners. Perhaps the mining industry has an opportunity to become a leader innovation and a model for developing local economies and partnerships. Mining has all the tools, how they get used will determine its’ future.
Research by Arjun Sharma
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