Mining Exploration to Boom in 2017
Five years since there has been any increase in exploration spending, 2017 is seeing a change in the mining industry. With no new caches of precious metals coming onto the scene, big mining companies are ramping up for the next big find.
Mining Companies are Spending More to Find More
The mining company BHP Billiton is ramping up their spending by a third in the hopes of finding more oil and copper; even the third largest company in the industry, Rio Tinto, is planning on spending upwards of $200 million on exploration. The already well-established Barrick Gold Company is expanding searching around existing mines. This year Australia, the second leading country in producing gold, iron ore, and zinc, has boosted its budget from A$87.1 million to A$113.8 million in a matter of months. Even Canada, the largest producer in zinc and other minerals, is feeling the push to find more. As Canada’s largest diversified resource company, Teck’s CEO Donald Lindsay gave a worrying statement: “The zinc concentrate market is so tight that zinc smelters are going to run out.”1 With zinc prices on the rise, mining companies globally are hunting for new and bountiful reserves.
Mining Exploration in 2017
Upping Efficiency: The Other Prime Objective
Mining companies are not just looking for new territories. The need to increase production with reduced cost is a major factor in every budget to procure the highest profit range. Because of this, technology is taking a front seat in necessary exploration equipment. Companies such as Rio Tinto use technologies that help identify metals, create 3D maps, and increase drilling speeds, and are looking to expand their repertoire. Zinc mining company Sandvik Mining spent Can$20 million on new equipment2 just last month.
“The efficiencies realized through this initiative will solidify our position as a major employer and economic contributor in the Province,” the company’s President Dr. Mark Cruise explained. With company shares rising across the board, leaders in the industry are opening room for technology.
“There’s more appetite for [companies] to try new things,” states Alan Goodwin, COO of Adrok Group and leader of the company’s expansion into Canada. Of course, that does not necessarily mean throwing money at all new technology coming their way. With the pressure to find disappearing commodities, ensuring quality production is key.
“The biggest challenge is the pipeline,” CEO of Agnico Eagle Mining Sean Boyd stated, providing insight on areas of focus. The difficulties, he explains, lie in “finding enough quality assets that not just sustain production levels but actually allow you improve the quality of business.”
Beyond this, nuclear density gauges are also cloaked in red tape. Multiple levels of paperwork are required for maintenance, use and disposal. Fees tied to the paperwork add up just as quickly. Nuclear density meters required full time supervision and are restricted to one location. In some instances, two mile detours have been used so that the nuclear density meter does not have to be used. This two mile detour adds both error and delay into the system; neither of which are ideal for understanding how the slurry is composed.
This combination of inefficient and environmentally dangerous measurement of the slurry means on average, 20% of the usable mineral is being disposed as waste. Not only are processors throwing these valuable minerals away, they then have to pay to store and dispose of them in tailings ponds. When the tailings dams fail, they have to pay up substantially more for the repercussions of the failure.