MINERS GO DEEP UNDER LAKE TO GET MORE SALT

Transcription

CANADIAN
Mining Journal
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February/March 2015
A SALINE
SOLUTION
MINERS GO DEEP
UNDER LAKE TO
GET MORE SALT
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Departments
5 Editorial
This month Editor Russell Noble
talks about being “too old to work”
in reference to heavy mining equipment that’s still on many companies’
inventory and will possibly be disposed of because it’s too old to work
and too expensive to repair.
CANADIAN
Mining Journal
CONTENTS
MINING IN ONTARIO
6 First Nations
A new monthly column by Chief
Isadore Day, Wiindawtegowinini,
Chief of Serpent River Anishinaabe
First Nation, and Chief of Lake
Huron Regional Grand.
8 Law
A column on: Advice for boards and
management when facing financial
distress by Dawn Whittaker, a senior
partner and Canadian leader of
mining and commodities practice,
Norton Rose Fulbright, Toronto.
12
New shafts set for Lake Huron mine
Cementation Canada Ltd. prepares to restore
shafts at deep Sifto Salt mine.
10 CSR and Mining
A regular column by Michael
Torrance, a lawyer in Norton Rose
Fulbright’s Toronto office, on
Corporate Social Responsibility
34 New Technology
Soft-sided structures by Legacy
Building Solutions provide answers
to demanding Alberta prairie
conditions.
38 Company Profile
This month’s featured company is
Atlas Copco of Barrie, Ontario.
Stack’
18 ‘Sinuper
Sudbury gets
return historic
20 Teams
mine site to nature
closer look
Vale undertakes major
environmental study of
smelter emissions from its
massive stack.
older Associates and
G
Ontario Ministry of the
Environment and Climate
Change work to clean up
historic Deloro Gold
Mine site.
42 Products
A look at what’s new in products
and services available to the
Canadian mining industry.
46 In My Mine(d)
Comments by Andrew Godfrey, an
Associate in Norton Rose Fulbright’s
Ottawa office.
50 Unearthing Trends
24 Ontario Mining Association Report
OMA looks at trends in mining and the economic
impacts of a new gold mine.
A regular column by Ernst & Young
LLP, Vancouver.
CANADIAN
Mining Journal
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February/March 2015
A SALINE
SOLUTION
ABOUT THE COVER
Miners work deep beneath
Lake Huron at Compass Minerals’
Sifto Salt Mine.
MINERS GO DEEP
UNDER LAKE TO
GET MORE SALT
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February/March 2015 • Canadian Mining Journal |
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Editorial
CANADIAN
Mining Journal
February/March 2015 Vol. 136 — No. 2
38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5
Tel. (416) 442-5600 Fax (416) 510-5138
Editor
Russell B. Noble
416 510-6742
[email protected]
Field Editor
Marilyn Scales
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[email protected]
Art Director
Mark Ryan
Production Manager
Steve Hofmann
Print Production Manager
Phyllis Wright
Circulation Manager
Cindi Holder
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[email protected]
Publisher
Robert Seagraves
416 510-6891
[email protected]
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Western Canada, Western U.S.A. and Quebec
Joelle Glasroth
416-510-5104
[email protected]
Toll Free Canada:
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Group Publisher
Anthony Vaccaro
Established 1882
Canadian Mining Journal provides articles and information of practical
use to those who work in the technical, administrative and supervisory aspects
of exploration, mining and processing in the Canadian mineral exploration and
mining industry. Canadian Mining Journal (ISSN 0008-4492) is published
10 times a year by BIG L.P. BIG is located at 38 Lesmill Rd., Unit 2. Toronto, ON,
M3B 2T5. Phone (416) 510-6891.
Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved.
The contents of this magazine are protected by copyright and may be used only
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Too old to work
By Russell Noble
I
t’s awards season and similar to
Hollywood’s almost weekly parade of
Golden Globes, Peoples’ Choice, and
Oscar ceremonies, plus our own Junos, the
mining industry isn’t far behind when it
comes to its own events; AME/BC’s
RoundUp in Vancouver, SME’s Annual
Meeting in Denver, and the grand daddy of
them all, PDAC’s International Convention
and Trade Show in Toronto, are just a few.
Clearly, the winter is just filled with reasons to get out of the office. And why not?
According to what I’m hearing from
my regular sources, things are pretty slow
right now and for nothing else, the various
events I just mentioned are a good reason
to slip away to be with peers to discuss the
state of the industry; to reinforce that business in 2015 isn’t very good so far, and that
next year looks just as sorry, if not worse
for some.
As we’ve all been reading lately, many
companies are reeling in their plans and
expectations for this year because there are
just too many expensive question marks
out there.
Money is tight, many commodities are
tanking and not worth going after, labour
costs are rising, governments are uncertain and unscrupulous in many parts of
the world, and closer to home and right
under our noses, mining equipment is
falling apart and too expensive to fix or
replace.
That’s right, the seemingly indestructible machines that are needed to get the ore
out of the ground are getting as worn and
tired looking as some of the faces at Annual
Meetings or on the Boards of Directors.
They, like the growing number of people running many of today’s mining companies, are getting a little too old to work
and like it or not, should be retired and
removed from the fleet, so to speak.
I know that’s not easily done with people, but with heavy machinery, it’s less of a
problem thanks to ‘reality’ television and
shows like “Gold Rush,” “Yukon Gold,” or
“Yukon Men.”
I don’t know how many of you have
watched any of those shows but for nothing else, they give a slight glimpse at mining and what some miners face when trying to discover and recover gold. It’s always
gold on these shows.
In any event, and I guess the industry
should be somewhat grateful for having
mining featured on television, the one
thing that underlines each of those shows
that bothers me is the fact that almost
every episode is based around an equipment failure that threatens the whole mining operation.
The shows rarely focus on mining per
se, but seem to always dramatize equipment breakdowns and the panic they
cause among the staged and scripted crew
of placer miners working the claim.
The impression left with the viewers is
that miners use crappy old machines to
dig only for gold but ultimately have to
work most of the short Arctic season just
to pay for machine repairs.
Unlike reality shows, most miners use
reliable equipment but that’s not to say that
they don’t experience breakdowns too. In
fact, like I briefly mentioned earlier, much
of today’s equipment is getting old and
tired and will be on many companies’
books for major repairs or replacement in
the near future.
But the question is, will those costly
repairs or replacements be possible under
the current state of the economy?
Based on immediate forecasts, probably not. In fact, many of those tired old
machines will more than likely just sit
things out, rusting away or seizing up until
mining rebounds and they’re called upon
to try again to ‘dig in’ and produce like
they once did.
The problem is, many of them will be
too old to work in mining but in reality,
they’ll probably end up on television
where they’ll break down with the world
watching, but at least with a certain degree
of notoriety.
Too bad we all can’t go out that way. CMJ
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First Nations
Treaties mark legitimacy
of First Nation jurisdiction
By Chief Isadore Day, Wiindawtegowinini
A
s Canada continues to be shaped by
the need to expand its economic
footprint in the global economy,
First Nation jurisdiction is becoming a
very real and deciding component of this
expansion.
The distinguished MacDonald-Laurier
Institute recently released a public policy
paper called: “Sharing The Wealth; How
resource revenue agreements can honour
treaties, improve communities, and facilitate Canadian development,” authored by
Ken S. Coates. The paper provides a great
starting point for a national dialogue on
benefits that derive from treaties. The document is a strong signal and recognition that
First Nations need to be brought into the
‘fold of benefit’ when it comes to resource
development in this country. It is currently
being examined closely as a potential launch
point for modernizing the “First Nation”
interest when it comes to sharing of the
benefits from resource development.
Mr. Coates and this critical policy discussion will also achieve another objective
– debate.
While we understand that resource revenue sharing, as an element of development is critical, we can’t forget what is truly
at the crux of much of the First Nation
concern; Sustainable Development. This of
course is a larger debate that isn’t so palatable in some circles of political power and
control in Canada, including some of the
provinces. Why? Because when it comes to
the discussion of shared jurisdiction, the
playing field becomes a bone of contention
for crown governments; are they prepared
to formally acknowledge the laws and
jurisdictions of First Nations?
Domestic courts continually point to
Chief Isadore Day, Wiindawtegowinini is the elected
chief of Serpent River Anishinaabe First Nation and
also holds the position of Lake Huron Regional Grand
Chief. He is a direct descendant of Chief Shingwauk
and Chief Wiindawtegiwinini, signatories to the
Robinson Huron Treaty of 1850. the reality that First Nation jurisdiction is
essentially a ‘right to self-determination.’
Essentially, federal and provincial governments in this country have to remain
consistent and in line with the rulings that
continue favouring arguments by First
Nations that their laws are legitimate and
that their jurisdictional authority is not
arguable.
In Ontario, recent meetings that First
Nations have held with Premier Kathleen
Wynne and key cabinet ministers opened
up formal dialogue about treaties and the
role that they will play in shaping public
policy in the province.
Chiefs and their experts are quick to
point out that while policy will help, the
most important ingredient in this new
approach will be the respect for First
Nation jurisdiction by Ontario. This is a
significant step forward in the development of modern treaty relationships in
Ontario and goes back to recommendations made by Justice Sidney Linden in
the Ipperwash Inquiry stemming from
the shooting death of unarmed First
Nation protester Dudley George.
Linden’s recommendations were very
pointed in that Ontario needed to respect
the patchwork of treaties on which the
province is situated and that First Nations
need to be acknowledged as ‘equal partners.’ This further makes the discussion of
First Nation jurisdiction solid in the context of where Ontario is headed on matters of development.
In this context of development of natural resources, First Nations refer to this
jurisdiction as a ‘set of responsibilities and
formal institutions in place to uphold
indigenous rights, laws and obligations.’
In this case, we are speaking about the
connection between treaty-making
authority and the responsibilities of sustainable development.
First Nation chiefs have been clear in
pointing toward a consistent principle in
the treaties termed “Spirit and Intent.” First
Nations have also been clear about the level
and depth of that intent – it underscores
the protection of the land and its resources
for the next seven generations. There is no
alternative to this approach.
To summarize, the new development
landscape in Ontario does have a new
emphasis on resource revenue sharing,
but make no mistake that First Nations
are speaking about that as only one aspect
of treaty. The land and the people are of
vital importance in the decisions made
about any development.
It should be without mistake that
Canada and the provinces must now
begin chipping away at understanding
this new reality – First Nation treatybased jurisdiction will continue to evolve
and shape policy in this country and
influence how development is authorized.
Chiefs in Ontario are expected to begin
addressing specific examples and opportunities to implement models of sharedjurisdiction in months to come.
As a First Nation leader, I’ve come to
conclude one clear obligation; that
Sustainable Development is the only way
forward that will protect humanity and
ensure we are upholding the sacred obligation of treaties in Canada.
We must protect the land, provide for
the people and share in the earth’s bounty;
that’s what the treaties were about – nothing more, nothing less.
CMJ
7
LAW
Advice for boards & management
facing financial distress
Dawn Whittaker is a senior partner and the
leader of Norton Rose Fulbright’s Canadian
mining and commodities team.
By Dawn Whittaker
M
ining companies in Canada continue to face challenging markets.
Tough decisions sometimes need
to be made, including potentially idling
mining projects or restructuring a company. If financial distress or insolvency is
looming, boards and management should
add the following to their “to do” list.
Plan
Forward planning is critical. While you
must know in detail what the near term
looks like, the focus should be on long
term solutions. Occasionally, a bridge
financing or a temporary “fix” is found
and implemented. But sometimes these
temporary fixes make longer term solutions even more difficult to implement
and potentially deprive the company of its
best alternatives.
There is a long lead time for any type of
financing, extension, forbearance or
restructuring. Lenders and other stakeholders don’t like surprises, and will be
justifiably critical if management has not
assembled the appropriate information
and explored alternatives.
Forward planning requires a full understanding of options for selling assets,
downsizing, or putting certain operations
on a ‘care and maintenance’ program.
Reliable and current information is needed
in order to know what is possible and what
is not. For example, life of mine analyses
may need to be up-dated, cash flow forecasts should be prepared and tested, and
collective bargaining and employment
agreements should be reviewed.
Understand
Get familiar with your company’s loan
and security documents. Assess what
defaults may occur and when (consider
what can be remedied or not) and what
strategies can be used to obtain any waivers or extensions.
Understand the remedies available to
your creditors, and what options are available to the company if these remedies are
taken. Understand the company’s history
with its creditors, so that you can judge if
they will be amenable to discussions, or if
they will be aggressive in their actions. If
you want to restructure loan or security
documents, you must understand how
this can be done by agreement, or by proceedings if necessary.
Evaluate
Compliance (or the failure to comply)
with environmental laws is of particular
importance to mining companies.
Evaluate the company’s operational and
historic environmental risks. Estimate the
company’s future costs of remediation.
Are existing financial assurances adequate
to address the company’s obligations?
Review the company’s environmental liability insurance policy (if it has one) and
determine the scope of coverage.
If restructuring is required, consider
the impact on environmental liability
risks of proceeding by way of a restructuring process or bankruptcy, including
whether any compromise or arrangement
addresses potential claims against directors and officers.
Scrutinize
Transfer assets, pay dividends, and undertake any non-arm’s length activity only
after exceptionally careful scrutiny.
Examine which payables are critical
and must be paid, and which payables can
8 | Canadian Mining Journal • February/March 2015
be deferred if necessary. If the company is
contracting for goods and services, consider carefully if the suppliers will be paid.
Avoid allegations that the company
ordered or contracted for goods and services while knowing that it could not pay.
Public companies must be more diligent than ever with respect to public disclosure and statements.
Pay attention
Pay attention to potential personal liabilities.
Recent headline-grabbing cases in
Canada have heightened the risk for
directors and officers being held personally liable for contamination if a company
is unable to undertake or fund environmental responsibilities including remediation of contaminated sites. Directors and
officers may be liable even if they did not
cause the contamination.
Directors and officers may be personally liable for unpaid wages, unremitted
source deductions and unremitted sales
taxes in certain cases. Payroll and remittance systems should be reviewed.
Understand your obligations and how to
avoid liability.
Review the company’s director and
officer insurance and understand the
scope of coverage and claim procedures.
An opportunity to bring stability
Although financial distress for a mining
company is always stressful, and while a
restructuring is a daunting process filled
with potential risk, it is also an opportunity to bring stability to your company
and resolve legacy issues. Your hard work
and diligence, guided by solid professional advice, can yield positive results. CMJ
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CSR and Mining
CSR and the CFO
Michael Torrance is a lawyer in Norton Rose
Fulbright’s Toronto office.
By Michael Torrance
L
ast November’s release of the
Government of Canada’s Enhanced
Strategy for the Extractive Sector (the “CSR
Strategy”) may seem an un-noteworthy
event for the Chief Financial Officers
(CFO) of Canadian mining companies, but
upon a closer look, it becomes readily
apparent that CSR is more relevant than
ever to the work of the CFO.
The private sector lending arm of the
World Bank, the International Finance
Corporation (“IFC”), has applied CSR
environmental and social standards in
assessing its investment decision making
since the 1990s. The size and scope of the
IFC and its investment and financing
activity (over $97 billion invested since
1956) made compliance with the IFC’s
CSR standards an important consideration for any businesses seeking financing
for projects in the developing world.
The IFC’s CSR requirements were codified into a very detailed set of regulationlike standards called the IFC Performance
Standards on Environmental and Social
Sustainability (“IFC Performance
Standards”) in 2006, updated and restated
in 2012. The relevance of the IFC
Performance Standards grew exponentially when, in 2002, a coalition of private
sector financial institutions launched the
Equator Principles (the “EP”).
The EP requires signatories to apply
the IFC Performance Standards in the
assessment and management of certain
asset based financings, including project
financing over certain monetary thresholds. At present, the EP has been adopted
by 80 global financial institutions (including all of Canada’s Chartered Banks and
Export Development Canada), covering
over 70% of all global project financing
that occurs in emerging markets. Of great
importance to CFOs, this phenomenon
makes compliance with the IFC
Performance Standards a threshold qualifier for financing – thereby aligning CSR
compliance with access to debt capital.
The IFC Performance Standards and
the Guiding Principles were expressly
endorsed by the Government of Canada
as part of the CSR Strategy. In so doing,
the Government of Canada has, of its
own accord, pointed to the IFC
Performance Standards as the appropriate benchmark for assessing CSR practices of Canadian miners. This adds
another, but by no means the most significant, driver encouraging adoption of
the IFC Performance Standards.
In 2012, the IFC Performance Standards
were revised to incorporate the human
rights due diligence requirements of the
United Nations Guiding Principles on
Business and Human Rights (the “Guiding
Principles”). By consequence, the Guiding
Principles were also incorporated into all
EP financings. Again, the CSR Strategy
follows this development with endorsement of the Guiding Principles as a benchmark for human rights performance – but
the real significance of this human rights
standards arises in its implication for
access to capital.
CSR is also a growing focus of equity
investors. Institutional investors, such as
the Canadian Pension Plan Investment
Board (CPPIB), regularly incorporate
environmental and social risks and opportunities in investment analysis. The
CPPIB is one of more than 1300 signatories to the Principles of Responsible
Investing (PRI), which requires the incor-
poration of CSR issues into investment
decision making. The International
Integrated Reporting Council, Global
Reporting Initiative (GRI), and the
Sustainability Accounting Standards
Board, are spearheading the broad adoption of integrated reporting of financial
and non-financial disclosure as standard
accounting practice. Apparently following
this trend, the CSR Strategy endorses the
Global Reporting Initiative integrated
reporting framework as a best practice for
Canadian miners.
There are numerous government-led
initiatives requiring greater disclosure of
CSR related information from publicly
listed companies beyond disclosure of
material environmental and social information already required by existing securities rules. For example, in 2014 the
Canadian government tabled its newly
developed Extractive Sector Transparency
Measures Act which requires that companies involved in the commercial development of oil, gas and minerals publicly disclose payments that they make to foreign
and domestic government entities. Similar
legislation has already been passed in the
European Union and the United States.
Also in 2014, the European Parliament
adopted a directive on non-financial disclosure, that will require European companies with 500 or more employees to disclose information on policies, risks and
outcomes as regards environmental matters, social and employee-related aspects,
respect for human rights, anti-corruption
and bribery issues, and diversity in their
board of directors.
With so many CSR developments tied
to financial matters, is increasingly in the
domain of the CFO. CMJ
| Mining in Ontario
DEEP
DRY
&
“Watertight” is the word
as crews work to restore
salt mine’s old shaft liners
By Eastern Correspondent D’Arcy Jenish
C
ementation Canada Ltd. of
North Bay, Ont. bills itself as
“one of the premier shaft
sinking companies in the
world,” and it has the track
record to back up that claim.
With some 20 projects on the go in
Canada, the U.S. and elsewhere around
the world, Cementation is also on record
for having sunk the deepest shaft in
Canada at the Kidd Creek Mine in
Timmins, the deepest single lift shaft in
the U.S. at the Resolution Copper Project
in Superior, Arizona, and the deepest single lift shaft in the world at the South Deep
Gold Mine in South Africa.
But by the end of March, Cementation
crews will start a completely different sort
of project at the Sifto Canada salt mine in
Goderich, Ont., on the shore of Lake
Huron. They will begin refurbishing the
liners inside two of the mine’s three shafts,
which will take almost four years, and
rank among the most challenging work
the company has taken on in recent years.
“Technically, this is a very different
project,” says President and Chief
Executive Officer Roy Slack. “It’s not like
designing a shaft or shaft liner from
scratch. We have to adapt to what’s there.”
In both cases, what’s there is a concrete
liner that has deteriorated and sprung
A profile of the Sifto Salt Mine in Goderich, Ont.,
showing the process of mining salt from shafts,
processing and conveying of materials to a ship
ready for transport through the Great Lakes.
13
| Mining in Ontario
leaks. In some places water is seeping in.
Elsewhere, it is surging through the concrete as though driven from a garden
hose.
The problem is partly a function of age.
Shaft one, which is now out of commission, was sunk in the late 1950s, while
shaft two, currently used to move miners
and materials, was built in the early 1960s.
The construction standards of the day
have also played a role, says Mike
Marksberry, Director of Mine Engineering
with Compass Minerals Inc., the Kansasbased company which owns Sifto Canada.
“They used thicker concrete where
water was an issue and thinner concrete
where it wasn’t,” says Marksberry. “But
over the years with ground movement
from mining and everything, water has
migrated everywhere.”
A third shaft, sunk in the late 1970s,
remains in good shape and is not in need
of repairs. It is equipped with a cage to
transport miners and materials as well as
skips to haul salt to the surface and will
remain in operation while the other two
are refurbished.
All three shafts were sunk to a depth of
543m to tap a vast, nearly pure salt deposit which is some 25m thick and extends
for hundreds of square miles beneath
Lake Huron.
A miner keeps a
close eye on salt
being transported
deep beneath
Lake Huron.
Miners currently have to travel some
eight km from the bottom of the shafts to
reach the mine face. In the future, they’ll
be travelling even farther.
“The reserves under Lake Huron are
almost endless,” says Marksberry. “We
could literally mine all the way to Michigan
if we kept going. One of the things driving
this project is that we intend to operate this
mine for 50 plus years.”
The headframes and other surface
infrastructure are located on a narrow,
L-shaped spit of land with the mouth of
the Maitland River on the inside of the
spit and Lake Huron on the outside and
that adds another layer of complexity to
the shaft rehabilitation projects.
Space is limited and Cementation must
remove the headframes for shafts one and
two, as well as several other aging structures, before the work below surface begins.
The mine will continue to operate
throughout the project and salt destined
for markets will be loaded onto ships and
rail cars.
Compass initially intended to remove
the old concrete liners in the two shafts
and replace them with fresh concrete, but
it would have had to stop the inflow of
water until new hydrostatic liners were
installed.
The company looked at two options for
doing that and found problems with both.
The first was freezing in which a series
of wells was drilled around the shaft and a
refrigerant injected, a proven technology,
but one that occasionally fails. Compass
also considered using pumps at the surface to draw off enough water to prevent
leaks, but concluded that that approach
would not work.
Cementation came up with a solution
that, while not unique, is also not very
common.
Norm Rochon, who will supervise
and manage the work, says the existing
concrete will be left in place to a depth of
296m, which is the bottom of the waterbearing strata, and cylindrical steel liners
will be installed to make the shafts
impermeable.
First, though, Cementation must construct a concrete foundation ring to support the steel liners. It will be built into the
native rock behind the existing concrete
Heavy machines working
the face of the mine.
SOME OF CEMENTATION’S DEEPER JOBS
T
he world’s mining companies are delving ever deeper into the surface of earth in
search of mineral wealth and Cementation Ltd. of North Bay, Ont. has designed and
constructed some of the deepest shafts on record, including the following:
On November 14, 2014, after six years work, Cementation completed the production shaft at the Resolution Copper project in Superior, Arizona. It is 8.7m in diameter
and 2152m—the deepest single lift shaft in the U.S. The Resolution mine is expected
to produce 25 per cent of annual U.S. copper output.
Cementation’s South African subsidiary broke ground on the twin shafts--production and ventilation--at Gold Fields’ South Deep Gold Mine in June 1995. They were
commissioned in November, 2004. The production shaft is 3042m deep, the world’s
deepest single lift shaft.
Glencore’s Kidd Creek Mine D--a copper-zinc producer--is now the world’s deepest
base metal mine. Cementation designed and constructed D shaft, which starts 1456m
below surface and plunges 1607m to a depth of nearly 3100m.
15
| Mining in Ontario
A picturesque look at the
mine’s main shafts.
SRK
liner and will extend 230mm into the shaft,
meaning that the widths of shafts one and
two will be reduced to 4.5m from 5m when
the project is complete.
Once the foundation ring is finished,
Cementation can begin installing the new
liner in sections, each of which will resemble an enormous steel ‘can.’
The steel will be 38mm thick and each
‘can’ will be 3.1m in height. Two sections
(weighing a total of 42 tons) will be welded together at surface and lowered into
place using giant cranes.
Cementation crews will be working in
the shafts throughout the rehabilitation
project and they will be lowered into place
on a platform called a galloway. They will
construct the foundation ring and will
inject a thin layer of grout comprising
cement, water and small amounts of sandlike aggregate between the exterior of the
steel ‘cans’ and the existing concrete liner.
As well, each 6.2m-high ‘can’ must be
welded to the one below it and
Cementation workers will perform that
task as well.
“This project is anything but typical,”
says Rochon. “We’re not typically working
in an existing shaft with existing infrastructure, with production ongoing and
with water flowing into the shafts. This is
a salt mine. It really has to be watertight.”
From the foundation rings to the bottom of each shaft--a distance of 248m--Cementation will chip out the old concrete
and replace it with a new liner that is
457mm thick.
The mine will continue operating
throughout the rehabilitation project. Shaft
three will continue to be the main production shaft and will serve that purpose even
after the work is complete.
Cementation will be working on shaft
one first and it will be put back into
operation as a production shaft afterward,
which means a new headframe will have
to be constructed along with all the associated infrastructure.
Shaft two will be reserved for ventilation.
“We can’t have any conveyance equipment in there taking up space,” says
Marksberry. “It has to be stripped of
everything to ensure the least possible
resistance and to meet the safety regulations, which have become more stringent
over time.” CMJ
Did you know?
JBR Environmental and USKH are now Stantec.
| Mining in Ontario
FUTURE
FUMES?
WILL SUPER STACK BE NEEDED BY VALE
AFTER RETROFIT PROJECT?
A
t more than 388m high and just
over 36m wide at base, Vale’s
“Super Stack” in Sudbury is
unquestionably the city’s most
outstanding feature.
In fact, it’s also one of Northern
Ontario’s more outstanding features
because it’s literally the tallest structure in
the north and can be seen for miles from
every direction as it towers over the city.
Even Sudbury’s world-renown “Big
Nickel” pales by comparison when it
comes to size and impressive landmarks.
Built from almost 16,500m3 of concrete and strengthened with nearly 956
tonnes of 38mm and 13mm re-bar, the
stack is a solid monument that has with-
stood the harshest of conditions that
Mother Nature could throw at it.
Extreme cold and blowing snow, fierce
winds and driving rain, heat and lightning, and even ground-shaking tremours,
have barely made a mark on the stack.
And, the fact that it’s also lined from top
to bottom with 6.4mm nickel stainless
steel and that its walls are 1.1m thick at the
base and 267mm at the top, have all added
to make the stack almost indestructible.
It was clearly built to last and since it
started rising on the horizon in 1970, and
subsequently going into service on August
21, 1972, the stack has performed as
planned by safely carrying sulphur dioxide from INCO’s (now Vale’s) Copper
Cliff smelter high into the atmosphere
and away from the city.
However, long before any SO(2) reaches the atmosphere, a complex steel flue
system almost 1.1km long has been
designed to handle the 725 deg (F) gases.
Travelling at more than 88 km/h
through 88 nickel-stainless steel diaphragm-type expansion joints, the gases
are carefully monitored by 13 environmental control stations strategically
placed along the flue system to collect and
determine the dust burden, temperature,
and volume of the gas flow.
Clearly the super stack has been
designed with the environment in mind,
but Vale is moving forward to make things
Aerial gives scale of the ‘super
stack’ in relation to the smelter
and the neighbouring community.
in Sudbury even cleaner by embarking on
a $1-billion AER (Atmosphere Emissions
Reduction) Project to dramatically reduce
emissions even further.
Eighty-five per cent further is what Vale
is projecting as the company plans to capture sulphur-bearing gases from the smelter’s converter aisle at Copper Cliff and significantly reduce dust and metal emissions.
As mentioned earlier, the process of
handling the gases is complex and involves
a long and heavy system comprised of
rectangular and circular sections, some as
large as 7m in diameter, and flues, that
combine to weigh 3,300 tons.
Trestles, bents and towers on which the
flues are supported involve another 2,300
Vale is spending an estimated $1B
on an Atmosphere Emissions
Reduction (AER) Project to dramatically reduce emissions from its
‘super stack’ in Sudbury.
tons of steel, so once again, it’s not only a
complex set-up, but a heavy one too.
Vale’s retrofit of its Copper Cliff smelter
is a huge undertaking but one that the
company is obviously committed to otherwise why would it have invested close to
$100 million on research and development
of the project even before it was approved
by the Ontario Ministry of the Environment
and other governing bodies?
Kelly Strong, Vale’s Vice-president of
Ontario and U.K. Operations, knows why:
As he recently told the Greater Sudbury
Chamber of Commerce, Strong says: “As
Sudbury’s largest private employer and
mining company, Vale plays a large part in
ensuring the community continues to
thrive and prosper and we’re working to
implement new and innovative solutions
that will create the next generation of sustainable mining.”
Strong admitted that spending $1 billion on a project that “will not result in
any new nickel” is a lot of money to spend
on a project, “but it’s the right thing to do.”
He said that some may argue the AER
Project is being driven solely by government regulations, Vale is actually going
beyond compliance at the conclusion of
the Project, down to 20 kilotonnes of
SO(2) per year versus the regulatory limit
of 66 kilotonnes per year.
Proudly, Strong repeats what was
mentioned earlier, “that represents and
an 85 per cent reduction from today’s
rates and significantly cleaner air for our
community.”
To further explain about the work that
will be undertaken during the complete
retrofit of the converter aisle, Strong says:
“Sulphur dioxide that currently goes up
the super stack from our existing converters will be sent to our acid plant,
converted to sulphuric acid, and sold.”
“A tremendous amount of work has
already been completed on this project.
With the help of a local company, we’ve
successfully installed our first new converter and it’s operating exactly as
planned in terms of gas capture and
increased efficiencies. Detailed engineering is currently underway on the
next converter replacement and fabrication of the new vessel is on track.”
Strong continued by saying:
“Engineering is also underway on a new
state-of-the-art secondary bag house,
which is essentially like a giant vacuum
cleaner to capture dust and emissions. It
will be about the size of an NHL hockey
rink and one of the biggest of its kind in
North America.”
“Given the tremendous reduction in
emissions and change in the processes,
Vale is working to figure out if it should
continue to use the 338m super stack, or
build something smaller that would
operate more efficiently by using less
natural gas to heat and maintain than the
super stack?”
That’s a question Vale is working on
now but should the answer be “go smaller,” then the next question around
Sudbury will be: “What’s going to happen
to the landmark Super Stack. Will it
come down.?”
For the sake of notoriety, you can bet
the “Big Nickel” hopes so.
CMJ
19
| Mining in Ontario — Deloro Mine
Aerial view of the Deloro Mine
site east of Peterborough, Ont.
Golder Associates Ltd. is working
in the waste consolidation area
along the Moira River.
Deloro Mine Site, 1916, from east
bank of the Moira River.
Workers at the former
Deloro Smelting and
Refining Company Ltd.
HANDLED
CARE
WITH
HISTORIC MINE
RETURNS
TO NATURE
By Russell Noble
O
A large operation once
occupied the site.
ntario, like most provinces and territories in Canada,
is riddled with working mines and an equal number
of historic sites where mining was once the mainstay
of economic activity and support.
From its northern-most reaches of Hudson Bay, to
the new and promising lands of the “Ring of Fire,” to farther south
and the world-famous regions near Timmins and Sudbury with
their abundance of producing mines, Ontario is undoubtedly one
of the richer mining areas in Canada, if not the world.
Historically, Ontario is known for big names like Hollinger,
Noranda, Falconbridge and Inco, for helping develop the province
into the powerhouse of mining that it is today, but there were also
a number of smaller, yet equally significant companies that played
an important role in giving Ontario its international status.
The Canadian Consolidated Gold Mining Company, for example, (a British-based company) started mining gold at its Deloro
Mine near Peterborough, Ontario, in 1873.
In the “valley of gold” named Deloro, gold was first discovered
in 1868 but it wasn’t until Canadian Consolidated Gold Mining
came on the scene five years later and began mining in ernst did
the southern Ontario site become known.
For nearly a quarter of a century, Consolidated Gold worked
the site but in 1896, because of poor recovery methods, the company sold the Deloro Mine to Canadian Gold Fields Company and
the first mill was built.
Using a new cyanide technology to extract the gold and with
enough financial support to build roasting furnaces to remove the
arsenic from the gold, the new owners were on their way to successfully operating one of the more modern mines of its time.
From 1896 until 1903 when the mill was closed due to the poor
grade of the gold, Canadian Gold Fields worked hard and steady
to make the mine work. However, following the closure of the mill,
a number of uses were subsequently found for it, including the
processing of silver ores and the production of cobalt and stellite.
(stellite is an alloy of primarily cobalt and chromium). It was very
important in the manufacture of munitions in the 1st and 2nd
21
| Mining in Ontario — Deloro Mine
Excavator begins demolition work on
former mine workings in 2013.
World Wars. Deloro was the exclusive supplier of stellite to the
Allied Forces.
The Deloro Mine’s original mill eventually became known as
the Deloro Smelting and Refining Company Limited, and was
enlarged to include a primary treatment plant, an oxide building,
an oxide refining building, a silver refining building, an arsenic
bag house, an arsenic chamber building, an arsenic pack house,
and a variety of other buildings for precision casting and manufacturing of cobalt metal alloy.
But one problem still remained; what to do with the tons of
arsenic* that remained from the manufacturing process?
Unthinkable by today’s standards, but stock piles of arsenic
and other hazardous materials were buried or just left on the
surface.
(*Arsenic may have been a by-product but it was also a lucrative commodity. Deloro was the largest North American manufacturer of arsenic based pesticides. The problem with arsenic
stock piles only emerged after organo-chloride pesticides became
the preferred product).
REMEDIATION WORK PRIOR TO THE
START OF FINAL CLEAN-UP
• Construction and on-going operation of an arsenic treatment
plant to treat contaminated groundwater (currently operated
under a service agreement with the Ontario Clean Water Agency);
• Establishment of an extensive ground and surface water
monitoring network;
• Locating and sealing major abandoned mine shafts and
mine workings;
• Covering eight hectares of tailings with crushed limestone;
• Demolishing derelict buildings;
• Installing perimeter fencing and signage;
• Conducting two major off-site assessment studies;
• Developed the final integrated clean-up plan;
• Completed an Environmental Assessment Study Report,
in keeping with the Canadian Environmental Assessment Act,
approved in 2009;
• Obtaining the Water Nuclear Substance Licence from the Canadian
Nuclear Safety Commission (2009) to possess, manage and store
low-level radioactive waste on the property;
• Upgrades to site-access road (2010); and
• Obtaining a Provisional Certificate of Approval for the waste
disposal facilities on the site (2011).
Demolition of the
former castings
building in 2013 by
Golder Associates
Ltd. working with
Demo Plus Inc.
Along with arsenic, the site had been polluted from various
mining operations and included waste products with low-level
radioactive properties, material stemming from the smelting of
uranium ore operations. Compounding the problem were also
approximately 90,000 tonnes of ferric hydroxide (red mud) that
were pumped as waste slurry from the hydrometallurgical plant
to the tailings area from 1914 to 1961 on the 202-hectare site.
Nearly a century's worth of hazardous by-products and residues - a complex blend of toxic compounds; metals like cobalt,
copper, nickel; and low-level radioactive wastes. Each of these
materials causing significant environmental impact at the site,
including contamination of the site's soil, sediment, surface water
and groundwater, posing a potential threat to nearby communities and watercourses.
In other words, a large scale environmental problem.
And that’s where the story of the Deloro Mine Site Cleanup
begins.
In April 1979, the site was abandoned by the final private
property owner, Erickson Construction Limited who declaring a
lack of operating funds following Ministry of Environment
orders, the property was escheated to the Crown in 1987 but the
ministry was unsuccessful in recovering costs.
More than 30 years later, significant progress has been made
at the site, with the Ontario Ministry of the Environment and
Climate Change (MOECC) spending more than $75M to date on
this project.
Robert Putzlocher, Deloro Project Engineer with the Ontario
Ministry of the Environment and Climate Change says “The goal
of the clean-up is to isolate and contain contamination on the site
itself to keep it from getting into the environment. We’re doing
that by building two engineered covers and an engineered containment cell, and by managing ground and surface water.”
A top priority of the ministry was protecting the neighbouring Moira River, which runs through the site and flows into the
Bay of Quinte on Lake Ontario. As recently as 1983, an average
of 52 kilograms of arsenic were going into the Moira River
every day.
To help solve this problem, Putzlocher says that an arsenic
treatment plant has been built and operates daily, to collect and
treat arsenic-contaminated groundwater from the mine site. The
A map shows mine site (circled)
and its proximity to Ontario Hwy 7
and the Town of Deloro.
plant includes an 80-metre underground concrete wall to stop
groundwater from getting into the Moira River, a clay-lined
contaminated-water holding pond, and nine pumping stations.
The plant removes 99.5% of the arsenic found in the contaminated groundwater.
In addition, the ministry has sponsored projects involving the
installation of extensive ground and surface monitoring networks, locating and sealing all old abandoned mine shafts,
demolishing derelict buildings and the construction of an on-site
laboratory to analyze ground and surface water samples.
From 2011 to 2013, the ministry contracted Golder Associates
Ltd. to perform the more specific tasks of the Tailings Area
Clean-up and Phase 2 of the Industrial and Mine Area Clean-up.
Golder, while working as General Contractor for the MOECC,
also self-performed the required QA/QC for the civil remediation works, radiation monitoring, water sampling and analysis
and air quality monitoring required during the operations. For
more than three years, Golder concentrated on securing the site
contamination by building a groundwater collection system and
upstream surface water flow diversions to meet the project’s
objective of limiting infiltration to less than 10 per cent of annual precipitation and thereby reducing the discharge to neighbouring waterways.
At the large tailings area on the east side of the former mine site,
Golder installed over 26 hectares of geosynthetics, 300,000 tonnes
of fill material and planted more than 10,000 poplar trees to com-
Multiple excavation operations and
remediation works alongside the
Moira River’s east bank.
FINAL CLEAN-UP DESIGN INCLUDES:
• Construction of two engineered covers and one engineered containment cell on the site with an approved capacity of 750,000 m3.
• Tailings Area: A low permeability cap planted with a hydrid poplar tree
plantation.
• A leachate collection system and groundwater pumping wells in the
Tailings Area with conveyance to the arsenic treatment plant.
• Industrial and Mine Area: Excavation and backfill of about 30 hectares
of contaminated material.
• Waste consolidated and topped with a low permeability
engineered cover.
• Young’s Creek Area: Engineered containment cell with bottom
clay layer.
• Contaminated sediments to be excavated.
• Slurification, drying and storage of sediments in geotextile containers.
• Low permeability cover constructed over the stacked geotextile
containers.
plete the capping of the area and restore it to a natural condition.
Its work continued in the Industrial Mining Area (IMA)
located to the west of the Moira River. Heavily contaminated
wastes were placed within the site’s waste consolidation area
(WCA), with final design planned to include a cap of engineered
geotextile, geosynthetic clay liner, layers of clay fill, sand and revegetation of the area.
Golder Associates Construction Contracts Manager, Brian
Daniels, says the $21M cleanup projects posed several challenges, specifically with workers and exposure to low-level radiation.
“We developed and executed an extremely intricate Radiation
Protection Plan for workers at the Deloro project,” says Daniels,
“resulting in 100% compliance with the Canadian Nuclear Safety
Commission, the Ministry of the Environment regulations and
most importantly, resulting in a safe working environment for
our people over our years at Deloro.”
In 2013-14, work continued on the consolidation of waste
into the Industrial and Mine Area WCA. In addition, the
Ministry successfully commenced cleanup operations in Young’s
Creek in preparation for a large scale dredging project focusing
on removing impacted sediment from the creek bed.
The project is expected to be completed by 2017.
Putzlocher says: “Ontario is finishing the clean-up of the
abandoned Deloro mine site so that we can continue to improve
water quality in the Moira River. The site will be engineered to be
safe for people and the environment for hundreds of years.”CMJ
Golder Associates Ltd. working with
Drain Brothers Excavating Ltd.’s pipe
crews during the installation of leachate collection systems with full personal protection equipment.
23
| Mining in Ontario
Riding
the
Tides
Ontario’s miners have
the right stuff to make
the best of (all) times
By Chris Hodgson, President, Ontario Mining Association
O
ntario’s mining industry has repeatedly proven itself
capable of riding out the low tides of recession while
cresting with the high tides of booms and prospering
through most phases of business and commodity
price cycles.
Through economic thick and thin, it has been a significant
factor in the development of Ontario since the late 1880s. While
we can all get distraught over the current crisis of the day, or
become over-elated with the golden opportunity around the next
corner, the longer-term view shows mining is a steady and reliable contributor to Ontario’s foundation.
A recent conversation with Ontario Mining Association
Manager of Communications Peter McBride, who is departing
shortly to retire after spending more than 24 years with the
Association, reminded me of this.
His time at the OMA has spanned two recessions, one financial crisis, one “super” cycle boom, the tenures of 13 OMA chairmen, nine provincial mines ministers and six Ontario premiers.
That provides perspective.
Over the decades, miners have made the most of Ontario’s
mineral endowment to attract investment, create jobs, support communities, pay taxes, help build infrastructure and
provide hope and opportunity to people with different skills
and backgrounds.
Elsewhere in this issue, an article on the study “An Au-thentic
Opportunity: The economic impacts of a new gold mine in
Ontario” more fully explore the positive role just one mine can
have in this province.
People in the business have adapted and innovated, while
adjusting to changing circumstances not just technologically but
also in the human resource sense. They make the difference.
To succeed, miners need to know local, national and international economics, business and politics. Actions taken anywhere
in the world can impact the success of a mining venture.
A decision to move a road in Timmins, buy a diamond in
Tokyo, open an electro-plating shop in Turin, make winter driving
safer in Toledo, raise taxes in Tanzania, or improve port facilities in
Tasmania can all impact mining operations in Ontario.
Miners have adapted to the times. The skills today of mine
operators and mine managers are more advanced and more
complicated than – with all due respect — their predecessors.
Succeeding in a genuinely international business and meeting
the realities of modern society demand it.
While no one could dispute a high level of training, safety awareness and technical skill are essential to the successful operation of
million-dollar-plus pieces of high-tech equipment underground,
A scenic ‘low-tide’ view depicts the message
that mining in Ontario is a low point right now
but like the tides, it will return to higher points
of booms and prosperity.
think of the advancement in the skill sets of mine managers.
In many ways, these people are among the unsung heroes in
their communities.
Only a few decades ago, mine managers could focus almost
exclusively on their engineering skills. It may be a bit of an exaggeration but they could largely operate within their own worlds.
They could build a good team, promote safety, manage budgets
and report to head office.
Think of the mine manager today. An abundance of “soft”
skills are needed in addition to engineering and technical expertise. The list of mining industry stakeholders seems to be perpetually expanding.
In the modern age, mine managers must serve as the faces
of companies in their communities. They need to manage in a
constructive and fair way the sometimes competing requests of
local charities.
Open houses, information sessions and public consultations
both inside and outside of municipal government offices have
become regular activities for mine management.
The complex world of First Nations relations is on the agenda
for many at mine sites. Historical and cultural boundaries are
crossed. While issues still abound, the facts that mining is the
largest private sector employer of Aboriginals in Canada, and
that Aboriginals make up 9.7% of Ontario’s mining workforce,
show progress is being made.
In the past, mine managers did not have to be conversant in
the language and practice of corporate social responsibility. The
management of safety of workers on the mine site has expanded
to include efforts to protect and promote family safety and safer
communities.
Along with safety, a strong and proactive concern for the
environment and the impact mining activities can have on the
environment -- that must be mitigated — are paramount.
In short, mine management in the 21st Century cannot
operate only in its own world. It must operate in the real
world and deal with issues well beyond mining engineering
and metallurgical science.
The demands of the real world have been increasing and they
are being met. The materials essential to our modern lifestyle
and our well-being are being produced in more sustainable and
transparent ways.
Mining in Ontario has proven itself to be adaptable and it is
meeting the challenges.
Let’s all keep in perspective what the industry has done for
Ontario and what it will continue to do going forward.
People make the difference.
CMJ
25
| Mining in Ontario
GOLD
POWER
A look at the
economic impacts
of a new gold mine
A Special Report
by Peter Dungan* and Steve Murphy*
O
pportunities for gold mining in Northern Ontario
have risen remarkably in recent years, with new
mines underway and the potential for several more in
varying stages of the review process.
All stakeholders; including miners, Aboriginal
and other local communities, governments and supplier industries, will benefit from an assessment of the economic impact of
new gold mines for proper planning.
Building on the techniques employed in 2007 to examine the
impact of a ‘representative’ Ontario nickel and copper mine, we
estimate, using conservative assumptions, the impact on GDP,
employment and government revenues of both the construction
and the ongoing operation of a new gold mine in a relatively
remote region of Northern Ontario.
The impacts are for the Ontario economy as a whole and,
more generally, for the region in which the project is sited.
Impacts are also shown for Canada and selected other provinces.
Most gold mining in Northern Ontario up to this point has
been ‘underground,’ but a number of newer projects (both operating and proposed) use ‘open-pit’ techniques. The choice
between the two is determined by the geology of the ore body
and mineral economics, but given that both types of mines will
likely be developed, this study examines the impacts of each.
We consider a new open pit gold mine with a construction
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A spectacular view of a gold
mine that has had an economic
impact on the community.
cost of $750 million spread over three years (after and excluding
all exploration, planning, permitting and other pre-construction expenditures).
The mine then generates sales of $300 million per year,
potentially for over 20 years into the future and employs 440
people on site with total compensation of $142,200 per worker.
The combined direct, indirect and induced economic impacts of
an open-pit gold mine are extremely large.
In its construction phase, the mine adds about $183 million
to Ontario GDP and generates more than 1,900 jobs annually.
In its production phase, for each year of operation, the mine
adds approximately $300 million to Ontario GDP and increases
ISO 9000:2008 certified
27
| Mining in Ontario
Detour Gold’s Mine in Northern Ontario.
Ontario’s employment by more than 1,800 at a rate of compensation per employee well above the provincial average.
The combined impact on government revenues of a new
open-pit gold mine is also large: In the construction phase, governments collect a total of $60 million a year from the mine’s
direct, indirect and induced activity while in the production
phase, this rises to $95 million per year.
The provincial government’s share is $25 million in the construction phase, and over $38 million in the production phase.
We also consider a new underground gold mine with a con28 | Canadian Mining Journal • February/March 2015
struction cost of $600 million, also spread over three years.
This mine also generates $300 million in sales per year over
an extended period with on-site employment of 620 and total
compensation per worker of $145,500.
The combined direct, indirect and induced impacts of an
underground mine are also very large.
In the construction phase, the mine adds almost $150 million
to Ontario GDP and generates more than 1,500 jobs in each of
the three years.
In production, the mine contributes over $330 million per
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year to Ontario GDP and generates 2,200 additional jobs annually, again with a very high average rate of labour compensation.
In the construction phase of a new underground gold mine,
governments collect just under $50 million a year from the
direct, indirect and induced impacts, with the provincial government receiving $20 million.
In the production phase, all governments receive over $100
million per year, with over $40 million going to the provincial
government.
Just as a typical mine, whether open-pit or underground, has
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29
| Mining in Ontario
Richmond Mines.
Kirkland Lake Mine.
multiple layers of activity, the analysis of a new mine’s impact
extends down to several layers below the economic activity at
the mine site itself.
The first level down is what could be characterized as the
indirect impacts of the mine: These are the purchases that the
mine must make in order to be built and to undertake its production (its ‘inputs’), and also the purchases that the industries
producing these inputs must make to facilitate their own pro-
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duction (‘inputs into inputs’), and so on back along the production chain.
Included in these indirect impacts are the provision of transportation facilities to the mine, the purchase of a wide range of
accounting, financial and scientific services, and the replacement
of machinery and equipment that wears out at the mine in the
course of production. Also included are all the inputs required
to produce the mine’s purchased inputs.
For example, the replacement parts that are needed to maintain the machinery at the mine and the steel that goes into those
parts and the energy and transportation services needed to produce the steel. This ‘backward chain’ of inputs into inputs is
quite extensive.
The second level down can be termed the induced economic
impacts. These are the economic impacts that result from the
spending of wages and salaries by workers employed both directly by the mine and indirectly in all of the supplier industries.
To the extent that these consumer goods and services are
produced in Ontario, there is a further economic impact on the
province. Moreover, this level has a backward input chain to it as
well, since consumer goods, or services, require their own inputs
which may also be produced in Ontario and generate further
wage earnings.
The third level down is to consider the regional impacts of a
new gold mine where ‘regional’ for a mine in a relatively remote
site must be considered as a broad enough area to include the
nearest major town or city, as well as all the smaller communities
within roughly the same distance.
Obviously the mine’s own building or production activity is
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31
| Mining in Ontario
Goldcorp’s Red Lake Mine.
local, but so too will be at least some of the indirect and induced
impacts identified at the first and second levels.
A significant share of the impacts of a new gold mine stay in
the local area. For example, for an open-pit gold mine in production, more than 1,350 of the total of 1,800 jobs generated are
local. For an underground mine, almost 1,700 of the 2,200 jobs
generated are in the broad local area.
Given that the mine is assumed to be located in a relatively
remote area of Ontario, the local impacts can be seen to some
extent as a proxy for opportunities for Aboriginal individuals
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and businesses in the broadly surrounding area.
An attempt has been made in this
study to identify the skill mix for the jobs
that have been identified as local. Some of
these jobs will require considerable expertise and such individuals will likely come
from outside the local area, although part
of their spending will encourage local
activity. However, an important share of
the local jobs require less-specialized
preparation or training that can be learned
on the job.
For example, in the production phase
of a new open-pit mine, of the more than
1,350 local jobs, 25 per cent require only
Secondary School or Specific Occupation
Training, and a further 12 per cent require
only On-the-Job training.
Moreover, gold mines underway and
planned are already attempting to outsource services to local entrepreneurs and
to nurture new local supply and service
enterprises.
At the fourth level down there are
important but unquantifiable economic
and social impacts that originate from the
new mine. Most notable among these are
the economic activity associated with
maintaining the local community: Local
government workers, teachers, police, fire
and health care.
Beyond the employment impacts, and
the encouragement of local entrepreneurship, there will also be direct monetary
benefits to Aboriginal communities
through Impact Benefit Agreements
(IBAs). Such agreements, however, can
vary widely, are subject to intense negotiations and historically have tended to be
confidential (although changes to federal
legislation are expected to make them
more transparent in the future).
No attempt has been made to quantify
the monetary flows resulting from them,
but they will certainly occur and flow
through to Aboriginal communities,
which would add to the ‘induced’ effects
we calculate purely from the respending
of labour income.
Finally, there are the intangible benefits of the provision of key infrastructure,
such as access roads and electrical grid
connections, that are part of the costs of
constructing either open-pit or under
ground mines in remote locations.
As with transferable skills, these
remain behind to benefit individuals and
the remote community even when the
mine eventually closes down.
Briefly then, the contribution of a new
gold mine to the province is large and
significant, with important impacts on
employment and economic output, particularly in areas of the province that
could benefit the most from them. CMJ
Peter Dungan* is Director, Policy and Economic
Analysis Program, Rotman School of Management,
University of Toronto, and Steve Murphy* is
Research Associate, Policy and Economic Analysis
Program, Rotman School of Management, University
of Toronto.
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33
| New Technology
Soft &
SOUND
Fabric structures
provide answers
to hard questions
Staff Report
W
hen it comes building
fabric structures, few
places provide better
proving grounds than
the often cold and windswept Prairies of Canada.
From the driving snows of winter, to
the equally strong forces of wind and rain
during the summer months, the conditions North of the 49th Parallel provide
many challenges when it comes to providing shelter from Mother Nature.
As tough and rugged as heavy mining
equipment is, sheltering it from harsh
environments often requires structures to
protect it from the elements and on a
similar note, so too do the supplies used
in the day-to-day operation of a mining
project.
Hydraulic fracturing (fracking) is one
of those processes that relies heavily on
supplies (frac sand) to aid in the fracturing process and Source Energy Services
(SES) of Summer, Wisconsin, is one company that has emerged as a leader when it
comes to being a reliable source of sand.
In fact, (SES) is one of the faster-growing industrial sand suppliers in North
America and is believed to have one of the
larger production facilities for silica sand.
Its single location in Summer is set up to
produce more than two million tons of
proppant annually.
Sand from Wisconsin is delivered to
storage terminals located near key shale
plays across North America, including a
new frac-sand distribution centre in
Wembley, Alberta.
Local infrastructure in many cities and
surrounding areas hasn’t developed fast
enough to keep pace with increasing
fracking activity and as a result, produc-
tion and support companies have had to
resorted to makeshift options, particularly
when it comes to erecting any buildings
required for their operations.
SES has been designed to avoid the
pitfalls of growing too quickly. Rather
than putting up lesser structures that only
meet immediate needs, the company says
it strives to be at the forefront of trends
and facility builds, ensuring that its buildings will continue to serve well for the
long haul.
“By today’s standards, the buildings
we’re designing are of world-class caliber
in Canada and the U.S.” says Mike Miller,
Vice-president of Construction for SES.
This was the mindset at work when determining how to proceed with the company’s new frac sand distribution facility in
Wembley.”
The purpose of the building was to
A large-format sand storage
facility constructed from
fabric over a steel frame.
A dramatic view showing a conveyor system designed to handle
vast amounts of frac sand.
provide large format sand storage for the
area’s oil and gas industry. In fact, upon
completion, it became the largest facility
for this purpose in the Western Canada
Sedimentary Basin.
The facility is capable of receiving several unit trains on a monthly basis, with
each train usually carrying more than
10,000 tons of material. By contrast, Miller
noted that most trans-load distribution
centres in the area provide about 2,000
tons for an oil or gas frac.
“We have a ‘tank farm’ utilizing 300-ton
tanks about 25 kilometers away that was
constructed as a trans-load storage facility
for many suppliers,” says Miller. “However,
as drillers have been needing to facilitate
larger frac silos, tank trans-loads do not
have the operational capacity to fill those
needs. The large-format facility in Wembley
is designed to solve any supply issues.”
35
| New Technology
A clear span provides
ample room for storing
sand and for equipment
to move around without
any obstructions.
In keeping with its philosophy of
advancing its construction methods and
facilities to a higher level, while still taking
into account the timeline that would be
required to engineer and construct a new
building, SES focused its search on tension fabric building contractors. After
reviewing and comparing specifications,
materials and costs from a handful of
manufacturers, the company selected
Legacy Building Solutions of South
Haven, Minnesota, for the project.
“Legacy offered several features that put
them at the top of the list,” says Miller. “We
were very impressed by their engineering
team. They are unique among fabric buildings in that they build on a rigid-steel
frame. Everything looked good, from the
eave and ridge ventilation system to the
method for installing fabric panels.
Combined with material delivery times
and the time to construct, Legacy seemed
like the perfect choice for our application.”
In the design phase, SES worked to
define exact needs in order to narrow the
parameters of the facility. One key goal was
to house all workers and operations inside
the building, protected from the constantly
gusting winds of the Alberta prairie. This
type of initiative could have resulted in a
massive structure exceeding the scope of
what was truly needed, but SES and Legacy
worked together closely to come up with
the appropriate heights and lengths, as well
as multiple lean-to areas.
The outcome was a building designed
to allow the full use of its storage volume
of almost three million cubic feet. The
Interior view showing
massive structural
beams and a walkway
and cable trays.
main body of the fabric structure measures 140 by 480 feet, with three lean-to
sections measuring 60 by 40, 60 by 80 and
24 by 200 feet, respectively – adding up to
a total of 79,200 square feet. An offset
peak and varying leg heights further characterize a building that is fully customized
for the specific facility SES envisioned.
“We have a drive aisle that connects the
entire building at its core and allows us
access to our stock piles,” said Miller. “We
utilize two of the lean-to spaces to load
our feed hoppers, and the other lean-to is
a heated shop that has lined walls and is
equipped with infrared heating units. We
have 18- by 18-foot access doors big
enough for loaders and skid steers to
enter. The whole design is very efficient
for our operations.”
The rigid frame design of the Legacy
building proved beneficial as SES implemented plans for a conveyor that would
be suspended from the rafters and run the
length of the building. After performing a
structural analysis and determining load
requirements, the structural design was
easily modified to accommodate the conveyor system.
“Flexibility is key, especially when the
building is a ‘first of its kind’ for this
industry,” says Miller. “We had one design
change after the whole plan was in place,
to widen our trapeze in the structure that
supports the conveyor, and Legacy was
able to make that change without any
problem. The conveyor system fits and
operates just as it was designed.”
According to Miller, SES is always looking to design facilities that use natural
sunlight, which made Legacy’s 15-ounce,
fire-rated polyethylene roof – which allows
abundant daylight to permeate the structure – a perfect solution for the new facility.
“In far northern Alberta in the summer, the sun stays high for long period of
time, so we take full advantage of any light
we can get,” says Miller. “We believe naturally lit areas are good for worker morale,
since they feel more connected to the
outside environment. And, of course, it
also saves on our facility operating cost,
since the fabric allows us to work with the
internal lighting systems off, even on
cloudy days.”
The facility in Wembley officially
opened on schedule last summer, despite a
rough Canadian winter that set SES’s concrete contractor behind more than a month
on installing the building’s foundation.
“Legacy knew our schedule and saved
us over 30 days of downtime,” says Miller.
Fabric panels also allow natural light
to penetrate the storage facility.
“They stood the frames for the entire
structure in a single day, and everything
– conveyors, electrical, fabric – was completed within five weeks of them coming
to the site. It was a Herculean effort on
Legacy’s part. It was fantastic.”
As part of its continued growth to support fracking operations and other exploration activity, SES is working toward
several other new facilities in the near
future, and Legacy figures to be a part of
the picture. CMJ
37
| Company Profile – Atlas Copco
SITE
SERVICE
WELL-TRAINED
TECHNICIANS
ARE THE KEY
By Russell Noble
One of Atlas Copco’s technicians works on one of the
many components that are
brought into the Barrie shop
for repair or refurbishing.
S
ervice what you sell is almost
mandatory for most of today’s
equipment manufacturers and
that’s especially true for the companies that actually make the
machines and attachments designed for
the mining industry.
From the smallest of drills and handheld tools to the monster trucks, shovels
and other movers and crushers of heavy
ore, the products used in today’s mines and
quarries place a heavy demand for performance on equipment manufacturers.
In fact, never before has productivity
and equipment reliability had such an
impact on the bottom line.
One company that knows the importance of machines performing when
expected is Atlas Copco, manufacturers of
rock drills and bits, plus a full range of
compressors, generators and pumps
designed for everything from hand tools to
massive units capable of powering mining
camps or even small towns.
Since it was founded more than 142
years ago, the company has grown from a
small garage in Stockholm, Sweden, to
now an internationally known operation
with more than 40,000 employees in 186
countries.
Being close to their global customers
is what sets Atlas Copco apart from the
rest and as Kelly Johnson, Service
Supervisor and Coordinator, Mississauga,
Ontario says: “Servicing what we sell,
and with a smile, makes our customers
feel comfortable in knowing that most of
their problems will be solved with a
simple phone call.”
With service centres scattered across
Canada, the company is continually
expanding its visibility in communities
where mining and aggregate production
are key to the local economy.
And one of the company’s more recent
expansions went beyond its conventional
mining and aggregate customers to
include supporting the rental market
where Atlas Copco also supplies a full line
of air compressors and generators and its
own technicians to provide critical,
responsive support through a mobile fleet
of fully equipped service vehicles.
From relatively easy coupling changes
and refurbishments, to larger clutch
A fully equipped service
truck is outfitted with just
about every device needed
to handle field work,
replacements and entire engine replacements, the company’s service vehicles are
outfitted with cranes and hoists designed
to provide on-site repairs without the
need of taking the piece of equipment
from the work site.
Johnson says that Atlas Copco’s Barrie,
Ontario location is a perfect example of
both the shop and mobile services the
company provides to the rental market.
From its 100,000-square-foot facility
adjacent to Highway 400, technicians can
easily be dispatched to the major rental
and mining customers in Southern
Ontario to either service the rental equipment or bring it back to Barrie for more
extensive repairs.
Johnson says as Atlas Copco has
expanded its service offerings, it has kept
the end goal in sight: be as close to as
many customers as possible to provide
service to all within a day’s drive.
As mentioned earlier, the fleet of service
trucks and technicians can handle most
site repairs but equally equipped is the shop
where technicians work in a spotless envi-
39
| Company Profile – Atlas Copco
All tools on the service trucks are
also cleaned and placed in their right
compartments.
All field service trucks are
washed after every call.
ronment equipped with individual workstations specifically designed with parts
and special tools for the rental equipment.
Again, Kelly Johnson says, it’s the skill of
the technicians at Atlas Copco that separates its service centres from other, run-ofthe-mill outlets that offer little more than
routine service and maintenance.
Every technician at the Barrie location
goes through approximately 80 hours of
training per year and are supported by
factory-trained Atlas Copco engineers to
help should they run into particularly
challenging or unfamiliar projects.
“Major repairs often required specialized knowledge to complete and our
Barrie location is staffed with technicians
capable of repairing or refurbishing
Field work often
involves dealing
with the elements,
including frigid
winter conditions.
machines and return them to the customer with the least amount of delay as
possible,” says Johnson.
He adds: “When repair isn’t enough,
our service centre can often refurbish
equipment, such as compressors, generators, hydraulic attachments and road
equipment, to extend their life and reduce
total cost of ownership. In fact, when it’s
possible, refurbishment costs much less
than buying a new piece of equipment and
the end result is a machine that looks
nearly new, operates optimally, and is
extremely reliable.
“For example, when a piece of equipment is in the refurbishment “sweet spot”
(between four and six years old) it will
have depreciated down to 20 per cent of
its original value. A refurbishment can
bring that equipment’s value back to 80
per cent of its original price. That means
the owner gets more value and utilization
out of their old equipment.”
And what every equipment owner
wants to hear: “We back-up the refurbished equipment with three- to five-year
warranties that are comparable to what
the company offers on new equipments,”
says Johnson.
CMJ
40 | Canadian Mining Journal • February/March 2015www.canadianminingjournal.com
Focused
Visit us at PDAC | Booth #839
on delivering successful projects
across the entire mining value chain.
www.worleyparsons.com
| Products
Tire Handler
Iowa Mold Tooling Co. Inc. (IMT), an Oshkosh Corporation company is pleased
to announce that IMT TireHand tire manipulators are featured on a new series
of heavy-duty Hyster Company tire handling trucks. The new line of Hyster tire
handlers includes 14 models with IMT
TireHand tire manipulators. Eight IMT
TireHand-equipped units are integral configurations ranging from 5,000 to 36,000
pounds of capacity for dedicated tire handling. The other six have hang-on quick
connect IMT TireHand attachments for
flexible transition between tire handling
and forklift modes.
Safety Devices
Juniper Systems’ Archer 2 Hazloc
hand-held devices are designed to
perform safely in hazardous locations where flammable gases, liquids, vapours, dusts, or fibers may
be present. Hand-helds are important to industries where workers
regularly face environments that
may contain flammable substances. The devices meet the safety
regulations as required for Class I,
II, and III hazardous locations.
Larger Scraper
ICON Industries introduces its AG-13 high-capacity
scraper featuring a front gate and eject wall finished
in dirt-resisting epoxy to maintain efficiency in the
stickiest of soils. Meanwhile, the double-wall frame
sidewall design increases overall strength and rigidity, while protecting hydraulics. The AG-13 features
a frame engineered around 80,000- and 100,000-tensile-strength steel for maximum durability and reliability and it utilizes a front dolly that not only improves manoeuvrability via 50 degrees of horizontal
movement and 70 degrees of lateral movement,
but helps support the load, allowing the use of an
average-sized tractor. At the same time, the unique
design of the dolly allows about six percent of the
scraper weight to be transferred to the drawbar for
extra traction when loading. Finally, the dolly provides extra lift on the front of the bowl to provide a
full 22 inches of ground clearance during transport.
Thread Sealant
Oz Seals now provides miners with its new PTFE tape
designed for sealing all hydraulic fluids, water, gas and
steam leaks. Called Oz Pack
100 Gold, this tape is an absolutely leak-free, reliable solution for sealing gas pipe lines. Having 10-times the thickness of conventional PTFE
tape means it needs only two wraps to seal. This 100% pure PTFE tape boasts hightensile strength and is non-hardening, making it the safer solution. It has three unique
properties that make it an essential repairman’s tool: a high density of 100% pure
PTFE, easy to apply and chemically inert.
Connectors
HARTING North America announces the availability of its new Han® HMC
rectangular connector designed to deliver consistently reliable performance
through 10,000 mating cycles or more. Optimized for signal and power, the
connector is designed for applications in environments where devices and
machines are often disconnected and reconnected several times a day. For
measurement and testing systems, each test step may entail one mating cycle.
The connectors are specially enhanced versions of the Han® industrial connectors, so any device or machine that can use a Han® connector can switch
to the same size Han® HMC without modification. The complete Han® HMC
series consists of Han® B HMC housings (sizes 10, 16 and 24), inserts with
crimp connections, gold-coated crimp contacts with constant spring force,
a choice of different docking frames, as well as Han-Modular® modules that
have Han® HMC crimp contacts. All Han® HMC inserts contain high performance grounding contacts. These special properties assure the complete connector’s flawless performance, even beyond 10,000 mating cycles.
Mining Applications
Sensoray’s Model 2253P A/V Codec with GPS Receiver and Incremental Encoder Interfaces is now available for pipeline inspection,
mining, robotics and more. In addition, all operating power is supplied by a single USB port, giving the device the necessary flexibility
for these applications. The device can simultaneously encode, decode and preview A/V content and is housed in a rugged, compact
exterior. Independent video processors allow for two different video
streams to be produced simultaneously from a single composite input. One of the streams can remain uncompressed so as to be useful for real time previewing, or both streams may be compressed.
In addition, image transformations such as resolution, rotation and
mirroring are independently configurable for each stream, as are
compression type and bit rate.
Vis
it u
s in
PD boo
AC
t
20 h 673
15
1N
A good investment shows in the long run.
That’s what our pumps are all about.
Impact Wrench
Chicago Pneumatic has just launched its new CP6135-D80 1-1/2” industrial
impact wrench for use in mining and minerals processing and other heavy
industries. The new tool has the highest power-to-weight ratio for its class
of 167.1 ft-lbs / lbs [500Nm/kg] and provides a high maximum torque of
5,900ft-lbs [8,000Nm] for only 35.3lbs [16 Kg], and a high impact rate of
760 BPM. As a result, it meets virtually any super industrial bolting and
unbolting need in heavy industry, helping maintenance engineers minimize
downtime and therefore enabling companies to save associated costs. The
wrench features a Rocking Dog clutch mechanism which is encapsulated
with grease for constant lubrication, and its plain steel motor parts. The
impact wrench also has a steel clutch housing and aluminum body.
A good investment is not determined by the
price, but by the cost of ownership. That’s why
we make pumps designed for the things that
really matter: long operating time, less need
for supervision and low costs for maintenance
and spare parts.
Because quality pays in the long run.
www.grindex.com • [email protected]
43
| Products
Equipment Upgrades
Atlas Copco has just upgraded and reintroduced
its Dynapac compaction equipment line. On the
F1000 series paver, for example, the low-profile
deck and two, swing-out operator platforms
give the operator the best visibility around
the machine, and the controls feature systemgrouped switches that minimize operator fatigue during long work shifts. The new soil rollers, including the CA1300 and CA1500, have
improved gradability, which allows operators to
comfortably travel backwards and forwards up
steep inclines.
Portable Power
Fall Protection Video
WE DO MORE THAN DESIGN EQUIPMENT.
WE POWER YOUR SUCCESS.
At Doosan Portable Power, we’re known for engineering solutions that make customers more
productive. Visit www.DoosanPortablePower.com to find the dealer nearest you and find out
how we can help you achieve:
• Maximum fuel economy
• Unparalleled productivity
• Region-specific emissions solutions
DoosanPortablePower.com |
800.727.8457
©2014 Doosan Infracore Portable Power
Motion Industries, a leading distributor of
industrial maintenance, repair, and operation (MRO) replacement parts, is pleased to
announce the newest Tom’s Toolbox video
short, focusing on fall protection. Tom’s Toolbox videos are available for viewing on Motion Industries’ “https://www.youtube.com/
user/MIHow2”MiHow2 YouTube channel,
which was established in 2012. In this video,
https://www.youtube.com/watch?v=qHz4XML7gs”How to Properly Put on a Miller Air
Core Harness from Honeywell,” Tom teaches
the viewer the correct way to put on a safety
harness. The video can now be viewed on
the MiHow2 channel, under the Tom’s Toolbox heading. Tom’s Toolbox embodies the
“how-to” format but in shorter time snippets. In the series, the humorous and always
knowledgeable host Tom Clark demonstrates
a broad range of solutions designed to save
viewers money and time, and/or keep safe on
the job. Each Tom’s Toolbox video short is
filmed in a workshop setting or an appropriate off-site setting.
Hose Couplings
Kurt Hydraulics is pleased to introduce its Push-On Hose and Push-Loc
Hose Couplings for low pressure applications. The couplings have a
very strong coupling retention thanks to a specially designed spiral polyester material inside the hose that locks onto the fitting. The
tight grip remains constant under pressure up to 250 psi for leak-free
operation. Flexible and versatile for a wide range of low pressure installations, the hose operates in temperature ranges from -20°F to
+180°F (-29°C to +82°C).
Drill Rig Simulators
ThoroughTec Simulation announces the availability of its CYBERMINE simulators. With mine site safety and productivity being of paramount importance, these training simulators are vital tools in ensuring that operators
know exactly how to operate a rig safely and efficiently without the mine
having to take an actual rig out of production for too long. ThoroughTec has developed a significant number of simulator cabs. This includes
five different models from three different OEMs: Atlas Copco, CAT and
Sandvik. ThoroughTec’s range encompasses all aspects of both surface and
underground mining operations for hard and soft rock and is capable of
replicating a mine’s entire working fleet from load and haul through to the
most complex production and ancillary equipment.
IDLERS | PULLEYS | IMPACT BEDS | ACCESSORIES
CONVEYING PERFORMANCE
Contractors + Consultants + Project Managers
Solutions that perform for the Client,
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Improve roller performance with Luff’s High Moisture
Seal & Anti-lock Shield, standard on all CEMA E rollers
 Permitting
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Luff Industries Ltd.
tf: 1.888.349.LUFF (5833)
w: www.luffindustries.com
e: [email protected]
Head Office
235010 Wrangler Road
Rocky View, AB
T1X 0K3
Ontario Branch
Unit 12, 1289 Brodie Drive
Orillia, ON
L3V 6H4
California Branch
9293 Archibald Ave
Rancho Cucamonga, CA
91730
www.denisonenvironmental.com
1 Horne Walk, Suite 200
Elliot Lake, ON P5A 2A5
PH: 705.848.9191
[email protected]
45
In My Mine(d)
New Transparency Act puts
pressure on Extractive Sector
Andrew Godfrey is an associate in
Norton Rose Fulbright’s Ottawa office.
By Andrew Godfrey
T
he Federal government recently tabled its newly developed
Extractive Sector Transparency Measures Act (the Act),
which requires that companies involved in the commercial
development of oil, gas and minerals publicly disclose payments
that they make to foreign and domestic government entities.
While the Act was only introduced in the House of Commons
late last year, the Canadian government has committed to bring
this piece of legislation into force by April 1, 2015.
Development of the Act
The Act is part of a larger international movement towards
increased disclosure by companies involved in the extractive
industry. Similar legislation has already been passed in the
European Union (the EU) and the United States, with both
working through the implementation process.
In 2013, the EU approved its Transparency and Accounting
Directives (the Directives) which seek to impose mandatory
reporting requirements on oil, gas, mining and forestry companies. While countries belonging to the EU have until this year to
incorporate the Directives into their national legislative frameworks, certain EU members, such as the United Kingdom,
France and Germany, have already enacted draft legislation, with
the United Kingdom tabling mandatory disclosure legislation in
October, 2014.
The American Dodd-Frank Wall Street Reform and
Consumer Protection Act (the Dodd-Frank Act) similarly
requires that “resource extraction issuers” generate annual
reports outlining the payments that they have made to domestic
and foreign governments in relation to the commercial development of oil, natural gas, and minerals.
The American Securities and Exchange Commission (the
SEC) is charged with creating rules to implement these disclosure requirements. While, the SEC’s initial attempt to mandate
disclosure pursuant to the Act was vacated by the United States
District Court for the District of Columbia on July 2, 2013, the
SEC is expected to release new rules pursuant to the Dodd-Frank
Act in March 2015.
Canada’s new Act was generated in the context of these international influences, and through stakeholder consultations that
have taken place over the past year. The government has indicated that it intends to keep Canadian legislative requirements
aligned with those of the United States and the EU.
Norton Rose Fulbright LLP provided legal updates in June
2013 and January 2014 summarizing the Resource Revenue
Transparency Working Group’s (the Working Group) recommendations for Canada’s new disclosure requirements, which
were considered by the government in the creation of this new
legislation.
Who must disclose?
The Act applies to a range of companies involved in the exploration and extraction of oil, gas and minerals, as well as to companies acquiring or holding rights to these resources. The Act will
impose annual reporting obligations on companies that:
1. are listed on a stock exchange in Canada;
2. have a place of business in Canada, do business in Canada or
have assets in Canada and that, based on their consolidated
financial statements, meet at least two of the following conditions for at least one of their two most recent financial years:
• they have at least $20 million in assets;
• they have generated at least $40 million in revenue; and/or
• they employ an average of at least 250 employees; and
3. a ny other prescribed entities.
These companies’ subsidiaries, and entities falling under their
direct or indirect control will also be subject to the Act. Section
23(c) of the Act allows the Governor in Council to define the
meaning of “control” by regulation.
What must be disclosed?
When the Act comes into force, the companies who fit the
criteria outlined here will be obligated to publicly report the
payments they make to all levels of domestic and foreign governments. They will also be required to disclose payments
made to bodies established by two or more governments, and
entities that have been established to exercise government
functions, such as trusts, boards, commissions, or corporations. However, payments made to Aboriginal governments in
Canada will not be subject to the Act until two years after the
legislation comes into effect.
The Canadian government has specifically outlined certain
categories of payments that must be publicly disclosed. These
payment categories include:
In My Mine(d)
• taxes, other than consumption taxes and personal income
taxes;
• royalties;
• fees, including rental fees, entry fees, regulatory charges as
well as fees or other considerations for licenses, permits or
concessions;
• production entitlements;
•
bonuses, including signature, discovery and production
bonuses;
• dividends other than dividends paid as ordinary shareholders;
• infrastructure improvement payments; and
• any other prescribed category of payment.
gated pursuant to the Act to clarify whether disclosure will be
required at the project level.
The Act currently states that absent any specific threshold
prescribed by regulation, companies will only be required to
disclose single or cumulative payments amounting to $100,000
or more. This threshold mirrors the EU Directives threshold of
€100,000. The Act stipulates that companies must disclose the
payments they make to government entities, regardless whether
they are monetary or in kind.
While the Act does not currently include project-level payments in its mandatory reporting regime, section 9(5) does
provide that project-level disclosure, under the form and manner of reporting, may be required by the Minister. We expect an
administrative guidance document and the regulations promul-
Exemptions
Throughout the consultation process, stakeholders raised concerns that Canada’s new disclosure obligations could conflict
with another jurisdiction’s privacy or confidentiality requirements. Although the Act does not currently list any exceptions
to its mandatory reporting requirements, the Act does allow for
future exemptions to be added by regulation.
As noted above, the United States District Court for the
District of Columbia vacated the SEC’s initial rules made pursuant to the Dodd-Frank Act in part because the SEC’s decision to
deny exemptions to the American disclosure requirements was
“arbitrary and capricious”.
What information will be made public?
The Act currently requires that its annual disclosure reports be
made available to the public; however it does not specifically
stipulate how or what information will be publicized. The Act
provides that these details will be determined through regulations enacted by the Minister and Governor in Council. We also
understand an administrative guidance document will be
released by the Minister outlining many of the procedural
requirements.
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In My Mine(d)
Will any other reporting regimes be considered
equivalent?
Canada is one of several jurisdictions currently enacting legislation requiring disclosure by companies involved in the extractive
industry. Section 10 of the Act allows the Minister to determine
if another jurisdiction’s reporting requirements are an appropriate
substitute for those mandated by the Act. This equivalency
mechanism will minimize the administrative costs associated
with the Act’s reporting requirements. Companies operating in
multiple markets will be able to substitute one jurisdiction’s public
disclosure requirements for another, instead of generating entirely different reports for each jurisdiction in which they operate.
How will the Act be enforced?
The Minister has broad investigative powers that he or she may
exercise to ensure compliance with the Act. For example, once it
is in force, the Act will allow the Minister to order audits of company reports and to conduct inspections of company offices.
The Act also allows the Minister to issue corrective orders to
ensure that companies subject to the Act are taking steps to comply with its provisions. The Act will also impose fines of up to
$250,000 on companies who fail to adhere to its reporting
requirements, knowingly make false or misleading statements in
their disclosure reports, or who structure their payments with
the intention of avoiding disclosure under the Act.
Although the fines that may be imposed pursuant to this
Act are less than those that may be imposed by other federal
legislation, it is still important to note that this fine may be
imposed per day that the offence is committed or continued.
As companies could be charged with multiple offences arising
out of a single event that continues over the course of multiple
days, the Act may result in cumulative fines amounting to
more than $250,000.
When will the Act come into force?
The federal government has indicated that the Act will be considered by Parliament this winter and that its regulations will be
developed in early 2015. The government plans to have this new
legislation in force by April 1, 2015, with companies first issuing
reports for the financial year following its enactment.
As the Act requires that companies submit their reports no
later than 150 days after the end of their financial year, companies with fiscal years beginning in May 2015 may be required to
generate their first reports by the year 2016.
The Canadian reporting template is expected to mirror that of
the United Kingdom, which will likely be released in the coming
weeks. We will continue to monitor both the Act’s progression
through Parliament and the availability of draft templates in
order to provide updates regarding the status of these new
reporting requirements.
CMJ
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49
Unearthing Trends
Mining the right people:
labour is a precious
commodity
By Bruce Sprague
S
ince the early 2000s, productivity in
the mining sector has declined significantly as companies focused on
growth amid strong commodity prices.
These days, world metal prices have
dropped and companies are focused on
returning to productivity. When it comes
to labour, cost-cutting exercises have led to
headcount reductions creating the perception that the skills shortage of the boom era
is over. But in reality, we’ve moved from a
war for supply to the beginning of a war for
talent – and companies must view labour
as an important asset, rather than another
cost. A singular focus on adjusting labour
needs to the commodity price cycle will
leave companies exposed to clear risks.
In Canada, a recent Mining Industry
Human Resources Council report shows
retirement to be the most significant contributor to the Canadian mining sector’s
future hiring needs. Canadian mining
employers indicated that roughly 20% of
their workforce was eligible to retire in the
next three to five years and 6% of workers
were currently eligible to retire. As noted
in a new EY mining and metals report
about productivity in labour, these retirements impact operational continuity and
lead to a great loss of organizational
know-how and operational experience for
mining companies.
On top of that, today, the best people
can cherry pick the top roles in a global
marketplace. And the war for talent isn’t
just between mining companies; it’s
against other sectors as well. As wise,
senior and experienced people retire or
leave the industry for other opportunities,
mining companies must make sure talent
management and productivity programs
work together.
Using semi-skilled people for skilled
roles isn’t productive, and it’s not sustain-
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Denison Environmental Services.........................................45.....................www.denisonenvironmental.com
DMC Mining Services............................................................47......................................... www.dmcmining.com
Doosan Portable Power.........................................................44.................... www.DoosanPortablePower.com
Eco Waste Solutions..............................................................49...........................www.ecowastesolutions.com
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Mechanix Wear Canada.........................................................2.......................................www.mechanixwear.ca
Montt CIA S.A..........................................................................49........................................ www.monttgroup.com
Nuna Logistics.........................................................................37.....................................www.nunalogistics.com
Redpath Mining.......................................................................29...................................www.redpathmining.com
Rio Tinto Canada Diamond Exploration...............................27................................................ www.riotinto.com
SEI Industries..........................................................................48.................................................www.sei-ind.com
Sepro Mining Systems...........................................................49.......................................www.sepropumps.com
SMS Equipment.......................................................................52............................................www.smsequip.com
SRK Consulting (Canada) Inc................................................16....................................................... www.srk.com
Stantec.....................................................................................17..................................www.stantec.com/mining
Valard LP..................................................................................49..................................................www.valard.com
Worley Parsons.......................................................................41................................. www.WorleyParsons.com
Bruce Sprague is a Partner and
EY’s Canadian Mining & Metals
Leader. He is based in Vancouver.
able. As they deal with high turnover and
an aging workforce, companies can’t
underestimate the gap in skills and knowledge that needs to lead them through this
period of turbulence. To effectively retain
senior people, while at the same time
attract and grow new talent for the skills
of the future (and the next upturn), companies must optimize their inventory of
skills for their most valuable projects, and
implement sustainable people programs.
People with new skills and ways of
thinking will continue to be important
to adapt to changing needs, but retaining experienced people with deep
knowledge of the mine and the sector –
those who have “seen it all before” – is
just as critical.
Effective retention strategies for senior
talent might include secure flexible working arrangements, productivity-based
performance incentives or personalized
support to transition to retirement.
Meanwhile, things like formal mentoring
and coaching can appeal to both new and
experienced talent, while at the same time
promoting intergenerational transfer of
corporate and specialist knowledge.
Coupled with these strategies, companies must maintain a focus on breaking
down their silo mentality. Encouraging
greater collaboration around problemsolving, innovation and performance
improvement is not only an excellent
retention strategy, it’s critical to improving productivity.
Today, labour really is a precious and
valuable commodity. Strong talent management programs that focus on retaining the right people for today’s challenges
will be as critical to the future success of
mining companies as investment in
exploration.
CMJ
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MINERS GO DEEP UNDER LAKE TO GET MORE SALT

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