On February 12, 2013, the Canada Mining Innovation Council held its 2nd Annual Signature Event, a mining conference bringing representatives from industry, government, academia, and other sectors together in Toronto to discuss the role of innovation in the industry's future. President of CMIC John Thompson presented the challenges and opportunities facing CMIC as it works to drive innovation in the mining industry.
2. Outline
• Canada’s mining industry – contributions and challenges
• Solutions – the CMIC role
• CMIC – progress, current approach and new ideas
• Big challenges, opportunities, drivers and benefits
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3. Canada’s mining industry
Current status
•Globally significant producer
• Aluminum, diamonds, nickel, potash, sulphur, titanium, uranium +
important coal, copper, gold, molybdenum, platinum, silver, zinc and
specialty metals
•Over 320,000 well-paid jobs (wages 59% above average)
•Major employer: northern Canadians and Aboriginal people
•3,200 suppliers and contract companies
•2011 contributions: $35.6B to GDP, > $9B to taxes and royalties,
$102B in exports (>20% of total)
•Major face of Canada abroad: exploration,operations, financing
•Historical leader in mining-related education, research and
technology development – key centres active across the country
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4. A recent report
Canadian Chamber of Commerce
report 2012
•Demonstrated leadership
•Powers significant parts of the
economy
Recognized issues
– Skills crisis
– Finance and taxation – staying
ahead of competition
– Infrastructure – physical,
knowledge-based (geoscience)
and policy
– Innovation and new technology
– Social license and regulatory
environment
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5. Other comments
Deloitte “Top Ten” mining trends for 2013
•Increasing costs
•Lack of quality projects
•Skills shortage
•Improving the safety culture
•Need for implementing new technology
Pierre Lassonde – “RoundUp Conference, 2013”
•On quality: “…lowering cut-off grades to chase production…the next cut-
off grade is called ‘dirt’…”
•On margins: “…capital and operating costs have just ballooned, and the
margin and free cash flow have not increased with gold price…”
•On technology: “...Where are the new processing technologies? …
Where are you guys? The companies are not spending enough money on
research and development…”
•Comparisons to the oil industry – lamented the mining industry
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6. Competition
Global competition in the resource sector
•Exploration expenditure – relates to probability of discovery
•Cost effective operations – in the lower quartiles
•Percentage of critical export markets
•R&D – innovation: services, products and exports
Major competitors
Mining and quarrying R&D expenditures
•Australia
− GA, CSIRO, CRCs …
− BHPB, Rio Tinto
•EU – Finland, Sweden
•Chile
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Source: OECD Statistics: Business Enterprise Expenditure by Industry
7. Canadian challenges
Resources and reserves – medium to long term
•The Canadian industry needs new quality discoveries
•Exploration is becoming more challenging and more expensive –
working in remote areas and at depth
Development – short to long term
•Infrastructure challenges – access to the north
•Local challenges – far north, deep deposits
•Cost escalation, delays and competition
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8. Canadian challenges
Productivity – short to medium term
•Canadian operations going deeper, moving more rock and
handling more waste/tailings – for less product (lower grade)
Increased costs and cost per unit of production
•Global market with escalating costs (materials, labour, power)
•Operating excellence and best practices delivering continuous
improvement – but not addressing underlying issues
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9. Canadian challenges
Energy, Environment and Safety – short to long term
•Require the highest standards of safety and environmental
performance – constant improvement
•The industry is energy and water intensive – focus on energy
reduction, emission reduction, water management
•Closure and reclamation - sustainability
People – short to medium term
•Shortage of critical personnel – exacerbated by retiring boomers
•Maintain/increase educational capacity and training
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10. Innovation challenges
Barriers to innovation
•Industry: capital intense, large scale/high volume and risk averse –
limited focus on long term problems
•Mining diversity across Canada with dispersed supporting
research organizations – natural variability inhibits innovation
•Engagement among industry, academia and government; with
other technology sectors; with broader stakeholders
•Reduced cash flows may limit innovation and funding at the time
when changes are most needed
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11. Solutions
CMIC – Pan-Canadian organization to:
•Engage industry to prioritize challenges
•Work with government to facilitate innovation and deliver results
across Canada
•Reach out to researchers and SMEs – building from strength and
enhancing commercialization
•Focus on developing programs based on solutions and new
technologies – funded at an effective level
•Support increased capacity to develop people – HQP
•Communicate the Canadian innovation agenda nationally and
internationally
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12. Progress
• Formed in 2007 – collaboration between industry, government
and academia
• Endorsed by Energy & Mines Ministers Conference in 2008
• National partners: NRCan, CIM, MAC and PDAC
• 85 members, including most mining companies, most mining-
related universities, the federal government, most provinces and
one territory, consultants, and research labs
• Good progress in the development of strategic priorities
• First major project (in exploration) submitted for co-funding by
industry and NSERC, $12M – to address declining reserves
• Other major proposals being prepared in mining, mineral
processing, energy and environmental stewardship
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13. CMIC – on track
Entering the growth phase
• Transition to the new Executive Director
• Organization: governance, office, staffing
Developing programs
• Organized by discipline and major issues
• Exploration success – setting the bar
Working with partners – “Collaboration is the key”
• Vital roles – experience, talent pools, educational capacity
• Centres – varying business/discipline/regional focus
• Individual researchers and technology companies (SMEs)
• Latest partner: IMII – Saskatchewan: David Grier
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14. Current approach
• Six industry-led initiative committees
• Success with Exploration – model for engagement and focus
Highly Qualified Personnel
Highly Qualified Personnel
Environmental Stewardship
Exploration
Exploration Mining
Mining Processing
Processing Tailings
Tailings Reclamation
Reclamation
Energy Efficiency
Energy Efficiency
Prioritizing themes
Footprints Project •Safety
•Discovery criteria •Deep/northern mining
•Discovery Technology •Fragmentation & comminution
•Data to knowledge •Improved selectivity
•Energy reduction; alternative fuels
•Minimizing footprints
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15. Return on Investment
Successful programs – returns in $millions/operation
– Contributions to new discoveries - $10s-100s
– Improved mine design – reduced CAPEX (10%) - $100s
– Increased performance (>5%) - $10s
– Energy reduction (~25%) - $100s
Other benefits
• Improved safety and reduced environmental impacts
• Employment and a new pool of Canadian talent
• Well funded R&D/education – universities and colleges
• New technology sectors – enhanced reputation
• Ongoing national prosperity
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16. CMIC – acceleration
Successful model but taking too long
• Exploration program: 2 years to develop – “fast”!
Discipline focus
• Effective starting position
• Potential for silos and overlap – may hinder innovation
Thematic focus
• Energy – important but complex
• HQP and Environmental stewardship – making progress
Alternatives
• Program Directors
• More efficient use of volunteers
• New approaches
Funding
• Reality check
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17. Business process
Market
Inventory
Smelting –
Discovery
Smelting –
Exploration Discovery
refining
Exploration
refining
Evaluation
Evaluation
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PP
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Development Bulk
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–– Intermediate
PP
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we Extraction Processing
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–W “Pure”
W
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Innovation r r( Waste
Waste
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Specific & cici Management
Management
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Integrated ciee
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Solutions see
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) Closure
Closure
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Reclamation
Reclamation
Technology 17
Data
Knowledge
18. Focus on the challenges
Resource depletion
• Accelerate discovery: target recognition/evaluation & drilling
HQP – Skills – Sustainability
HQP – Skills – Sustainability
Designing and building cost effective operations
• Planning for the future (10-50 years)
• Capture “geomet” data for design – minimize footprint
Operating to increase productivity and decrease impact
• Safety: deep underground and large open pit
• Smart mining: selectivity, fragmentation & material handling
• Clean processing: selectivity, energy efficient comminution,
waste rejection, mine to product (value add), in situ mining
Enhancing environmental stewardship
• Waste/tailings management
• Reduced impacts: water, air, biodiversity, and people
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19. Innovation drivers
BHAG – define the desired result
• The ideal mining operations for 2035 and beyond
• The changes in technology and human capital required to
meet these goals
• The actions needed to produce these changes
− Engagement, consensus and prioritization
− Program definition and funding models
Outcomes – for Canada and the Canadian industry
• New high quality resources – long term sustainability
• Leading mine designs with supportive communities
• Productive operations in the lowest cost quartile – revenue
• Global leadership in environmental stewardship
• Contributions from multiple sectors, SMEs and innovators
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20. Opportunity for Canada
Global mining
• Required to meet societal needs
• Development/production issues will limit long term supply
• Recognition of challenges – competitive search for solutions
Canadian mining industry
• Major contributor to Canada
• Doing OK – successful companies and institutions
• Increasing challenges – the squeeze is coming
It takes time to
• Change the mining industry
• Create and fund new programs
• Develop talent and new mining tech clusters and sectors
We need to start now! 20
21. CMIC action items
• Welcome the new Executive Director – Carl Weatherell
• Optimize the organization – program directors and staff
• Enhance program development
• Focus on the big issues – drive multidisciplinary and
life cycle business approaches
• Evaluate all funding models – sustainable business
model
– Industry, governments and partners
– Foundation and innovative funds
– Program delivery methods
• Enhance the effectiveness of our volunteer pool
• Tell the story – communication and branding
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23. CMIC Members in 2012
3M Cliffs Natural Resources LookNorth
Abitibi Géophysique Consortium de recherche en ressources McGill University
Adriana Resources minérales Memorial University of Newfoundland
Advanced Applied Physics Solutions De Beers Canada Mining Association of Canada
Agnico-Eagle Denison Mines Corp. Mira Geoscience Ltd.
Altius DGI Geoscience Inc. Mirarco
Anglo-American DIVEX National Research Council
Arcelor-Mittal École Polytechnique Natural Resources Canada
Barrick Gold Corporation Franklin Geosciences Ltd. New Millennium Capital Corp.
Boart Longyear Fugro Airborne Surveys Corp Oil Sands Tailings Consortium
Cambrian College Gedex Osisko Mining Corporation
Cameco Golden Star Resources Prospectors & Developers Association of Canada
Canadian Association of Mining Golder Associates Queen's University
Equipment & Services for Export Gold Fields RD Corporation - NL
Canadian Institute of Mining, Goldcorp Saskatchewan Research Council
Metallurgy & Petroleum Hatch Shore Gold
Canadian Light Source HudBay Minerals Inc. SNC-Lavalin
Canadian Mining Industry IAMGold Corporation SRK Consulting (Canada)
Research Organization Centre for Inmet Mining Teck
Excellence in Mining Innovation Kingston Process Metallurgy Université du Québec à Montréal
Kinross Gold Corporation Université du Québec en Abitibi-Témiscamingue
Laboratoire international de géophysique minière University of Alberta
Laurentian University University of British Columbia
Laval University University of Manitoba
University of New Brunswick
University of Saskatchewan
University of Toronto
University of Waterloo
University of Western Ontario
University of Windsor
University of Winnipeg
UR Energy
Vale
Western Potash Corp. 23
Members include all the provinces Xstrata Nickel
and territory shown in green Yukon Cold Climate Innovation Centre