"MINING TRENDS Trends in Underground Mining"
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, 20% Metals Australia, Russia, Ukraine and Ind. minerals Kazakstan, represent some 70% of total Coal & uranium underground production. 25% 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 6% 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 Underground in an average open pit mine might only Combined 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) 47% 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 92% 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 19% Metals centrally planned economies, includ- 18% 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, 56% 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. 96% 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, www.rawmaterialsgroup.com UNDERGROUND MINING METHODS 5