MINING TRENDS Trends in Underground Mining by dfn15928


									                                                                                                                                    MINING TRENDS

Trends in Underground Mining
                                                          Improving Productivity                                     companies have disappeared, and new
 Low Price, High                                                                                                     giants are emerging.
                                                          New, more effective, technology                               The ‘Big Australian’ has merged
 Output                                                   makes it possible to extract more                          with former South African, later turned
 Once again metal prices are                              metal out of lower grade material, and                     British, Billiton to become BHP-
 low, and mining industry profits                         at a lower cost than earlier generations                   Billiton. Australian gold producer
 are generally poor. The market                           of miners could achieve. External                          Normandy was swallowed by its US
 capitalization of the entire                             pressures have also had an impact on                       competitor Newmont, after a tough
 mining industry is falling, and is                       the operations of the mining industry,                     fight with AngloGold, part of the Anglo
 currently valued at less than                            causing it to move in many ways.                           American group, now based in London.
 1% of the global figure for all
                                                             Intensive cost-cutting is now stan-                        These manoeuvres can be taken as
 industries. In fact, some of
                                                          dard in all companies, while, at the                       proof of how strong the mining indus-
 largest non-mining companies
 have an individual market capi-                          same time, they have been investing in                     try is. In terms of volume and value of
 talization exceeding the sum of                          new and more productive equipment.                         output, it is still very much alive and
 all mining companies. At a cursory                       Non-core businesses have been sold                         kicking.
 glance the situation is gloomy.                          off, in order to focus management
 However, despite the current                             attention, and many unprofitable                           Underground Mining
 economic downturn, the demand                            mines have been closed down.
 for mined products, such as                              Mergers and acquisitions have been                         Mining is, to a large extent, about
 metals, industrial minerals, con-                        made, in order to create larger, more                      moving enormous amounts of rock as
 struction materials or energy                            cost-effective, and financially stronger                   economically as possible. Underground
 minerals, has not reduced in the
                                                          entities.                                                  mining is by nature selective, always
 same way as in economically dif-
                                                             During the first years of the new                       trying to take the meat out of the pie
 ficult periods in the past.
 Paradoxically, the production of                         millennium, the international mining                       while leaving the crust. Open pit
 metals and minerals is steadily                          industry has been in the midst of an                       mining, on the other hand, takes the
 growing.                                                 intensive period of change. Many                           whole pie and then separates the meat
                                                          long-established, well-respected mining                    from the crust.

Ore production from open pits (green), underground (red), and alluvial/recycling (white).

                                                                                                                   Russia: 215 Mt
                                  Canada: 189 Mt

                                                                                            Ukraine: 100 Mt

                                      USA: 826 Mt

                                                                                                                                    China: 400 Mt

                Mexico: 137 Mt

                                                                                                                                           Indonesia: 210 Mt

                                 Peru: 201 Mt           Brazil: 196 Mt

                                                                                                                              Australia: 387 Mt
                                                                                            South Africa: 236 Mt

                                   Chile: 498 Mt

UNDERGROUND MINING METHODS                                                                                                                                     3
                  MINING TRENDS

Table 1. Total world underground             monds is produced globally. Of this,        very sophisticated equipment and a
ore production.                              some 615 Mt is mined underground,           high level of automation.
    Region                          Mt       for which Table 1 gives the regional
    North America                   80       split. To support this level of activity,   Production Distribution
    Latin America                  105       a considerable amount of development
    Africa                         160
                                             work has to be carried out.                 Special skills are necessary to operate a
                                                The proportion mined underground         profitable underground mine, and these
    Oceania                         50
                                             equates with some 16% of the total          skills have been developed in a few key
    Europe                         160
                                             volume of ores extracted. In the            countries where underground mining is
    Asia                            60
                                             centrally planned economies of the          more important than elsewhere.
    SUM                            615
                                             eastern bloc, underground mining               South Africa is the most important
    China is not specified as open pit       accounts for 32% of the total activity      country in underground ore production,
    or underground production.               in the sector, while the figure is 15%      with 141 Mt produced annually. In a
    Source: Raw Materials Data,              in the Western world.                       second group are found Canada,
    Stockholm 2002                              There are 365 underground mines          Australia and the formerly centrally
                                             in the Western world, many of which         planned economies of Russia, Ukraine,
   Each year, around 4,100 Mt of ore         are fairly small, but efficient, opera-     and Kazakstan with 40-55 Mt of under-
containing the most important metals         tions, hoisting an average of 400,000 t     ground production. The USA, Brazil,
copper, gold, iron ore, lead/zinc,           annually. Notwithstanding, many             Peru, Poland and Sweden follow in a
nickel, platinum group metals and dia-       underground mines are huge, with            third group, with production between
                                                                                         26 and 41 Mt of ore annually. Zambia,
    YEAR 2000 TOTAL                 ~ 340 billion USD                                    Mexico, Indonesia, India and Bulgaria
                                                                                         are also all producing around 10
                                                                                         Mt/year. Together, the first two groups
                                                                                         comprising South Africa, Canada,
                                                                 Metals                  Australia, Russia, Ukraine and
                                                                 Ind. minerals           Kazakstan, represent some 70% of total
                                                                 Coal & uranium          underground production.
                                                                 Crushed rock               The most important mineral sector
      45%                                                                                is zinc/lead, where over 80% of all
                                           10%                                           ores are excavated in underground
                                                                                         mines. A total of 115 Mt ore is needed
Value of world mining.
                                                                                         to produce the Western world output
      YEAR 2000 TOTAL                ~ 85 billion USD
                                                                                         of zinc, and over 90 Mt of this is
                                                                                         mined underground. The correspond-
                                                                                         ing figures for nickel are 80 Mt total
                                                                  Gold                   for all ores, of which some 30 Mt from
                              26%                                 Iron ore               underground mines. Iron ore is at the
             4%                                                                          other extreme, with a total of over
        4%                                                        Copper
                                                      23%         Zinc/lead              1,000 Mt ore produced, of which
                                                                  Nickel                 675 Mt in the Western world. Less
                                                                  Bauxite                than 10% comes from underground
          15%                                                     Other
                                                                                         mines located in Sweden, Norway,
                                     22%                                                 Slovakia and Colombia. The distribu-
                                                                                         tion of underground ore production
Metals value at mine.
                                                                                         around the world is shown on the map.
    YEAR 2000 TOTAL NUMBER                  ~ 2 000
                                                                                         Future Growth
                                                                                         The grades of the ores from which
                         5%   5%                                                         metals are extracted vary greatly. Rich
                                                                                         iron ores may contain up to 65%
                                                                   Open pit
                                                                                         (650,000 g/t) of iron, while a gold ore
                                                                                         in an average open pit mine might only
                                                      50%                                be one part per million (0.0001 per cent,
        40%                                                        Other                 or 1 g/t). Hence, the volume of ore
                                                                                         needed to obtain a tonne, or a kilo-
Number of metal mines.                                                                   gramme, of product varies considerably.

4                                                                                              UNDERGROUND MINING METHODS
                                                                                                    MINING TRENDS

                                                                                         The six largest companies                    in
 YEAR 2000 TOTAL                     ~ 8 600 Mt (coal excl.)                             underground ore production:

                                                                                           Anglo American group            80 Mt/y
                                                                                           (in AngloGold, Anglo
                                                                                           Platinum, Base Metals, etc)
                                                                   Metals                  Codelco                         45
                                                                   Ind. minerals           KGHM Polish Copper              32
                                                                   Crushed rock            LKAB                            30
                                                                                           Harmony                         17
                                                                                           Norilsk                         14
            6%                                     47%

Volumes of ore.                                                                          extracted to get a tonne of copper in
                                                                                         2003 than was the case in 1950.
 YEAR 2000 TOTAL ~ 8 600 Mt (excl. coal)                                                 Technical developments, resulting in
                                                                                         more deeply penetrating exploration
                                        8%                                               methods, increase the probability of
                                                                                         finding new, richer, deeper ore
                                                                                         deposits. This counterbalances the
                                                                       Underground       trend towards lower quality to some
                                                                       Open pit          extent, but obviously not to the full.
                                                                                            In 2005, ore production in the
                                                                                         Western world is projected to increase
                                                                                         to 3,700 Mt. This is equal to an annual
Ore mined by method.                                                                     growth rate of a little lower than 3%.
                                                                                         The ratio between open pit and under-
  YEAR 2000 TOTAL ORE & WASTE                            ~ 23 000 Mt                     ground mining seems to have stabi-
                                                                                         lized at around 1:6, with 85% open pit
                                                                                         and 15% underground in the Western
                                                                                         world. Developments in the formerly
                                                                   Metals                centrally planned economies, includ-
                                                                   Ind. minerals         ing China, are more difficult to pre-
                                                                   Coal                  dict. The underground proportion of
                                                                   Crushed rock          mining in these countries will decrease
     7%                                                                                  when economic views of profitability,
                                                                                         and the influence of world markets,
                                                                                         get stronger. Due to many years of
Volumes of ore and waste.                                                                neglect in these areas, there is a
                                                                                         dramatic need for more reinvestment
 YEAR 2000 TOTAL ~ 19 000 Mt (excl. coal)                                                and new capacity. s

                                     4%                                                  Acknowledgements
                                                                                         Atlas Copco is grateful to Magnus
                                                                    Underground          Ericsson of Raw Materials Group,
                                                                    Open pit             Stockholm for submission of this article.


Ore and waste mined by method.
Source: Raw Materials Group.

   The volume of ore production                exploited. The graph in Figure 1 illus-
depends on the amount of metals con-           trates this point clearly, with an ex-
sumed, and the grades of the ore               ample from the world of copper. The
deposits mined. Over time, the best            average grade of copper ore has sunk
orebodies have become depleted, and            continuously over the last 70 years.
less rich deposits have started to be          Roughly 5 times more ore needs to be      Magnus Ericsson,

UNDERGROUND MINING METHODS                                                                                                            5

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