Social And Economic Impacts Of Gold Mining

Social And Economic Impacts Of Gold Mining

Gold mining is a global industry. Currently, there are more than 600 productive gold mines spread over 70 different countries, and these figures do not include artisanal and small-scale mining operations. Yet, despite the scale and geographic reach of the industry, gold mining’s impacts on economic growth and development are not well understood. Indeed, they are frequently neglected or misreported.

The World Gold Council set out to address this ‘information gap’ and offer the industry’s very diverse set of stakeholders – gold mining companies and their employees, government representatives, community leaders and wider civil society – empirical evidence of gold mining’s socio-economic impacts and a firm set of indicators by which change and progress might be judged.

A research program was initiated resulting in a series of research outputs, including those produced in collaboration with our Member companies, including Newmont, finally culminating in the recently published research report, and the social and economic impacts of gold mining. We believe this work, with its greater scope and more extensive inputs, advances our collective knowledge on the ‘shared value’ created by gold mining.

The findings from this research provide insights into how formal gold mining contributes to:

  • Supporting global economic growth
  • Supporting the development of host nations
  • Investing in people
  • Supporting community development

In 2013, gold mining made a total contribution of more than US$171bn to the global economy. Globally, the gold mining industry directly contributed around US$83.1 billion to the global economy in 2013. Taking indirect economic impact into account, this contribution increases to US$171.6 billion. This is greater than the GDP of more than 150 countries and more than the world’s total overseas aid budget.

Gold mining’s direct economic contribution to the global economy has increased seven-fold from 2000 to 2013. This is greater than the rise in the value of gold over the same period.

Total number of jobs that result from commercial gold mining estimated at 4.2 million globally. Globally, gold mining companies directly employed more than one million people in 2013, with three million more people employed as a result of the industry’s suppliers and support services. In most gold producing countries, more than 90 percent of the industry’s employees are local workers.

The report shows that gold mining has made good progress in seeking to develop local human capital and skills. More than 60 percent of the countries covered in the report are low or lower-middle income with substantial socio-economic development needs. However, the report indicates that growth in the economic contribution of gold mining often coincides with a marked improvement in income status of host nations.

70 percent of the value that gold mining companies distribute within an economy relates to payments to local suppliers and employees. The majority of government revenues from gold mining are derived from indirect sources, such as corporate and income tax rather than from money relating to permits and royalties or direct minerals taxes.

Overall, the research presents a picture of an industry that has developed significantly in terms of how it benefits the global economy and helps drive growth and progress at the national and community level, particularly in the developing world.

Of course, the gold mining industry still faces considerable challenges, not least in ensuring the growth and momentum of the socio-economic contributions detailed in this report are sustainable. Furthermore, this is unlikely to be done in isolation, by the gold mining industry on its own. Our ambition for this research is that it may help improve shared understanding around the industry to better inform productive engagement between stakeholders to maximize the growth and development potential of responsible gold mining.

Diamonds are Forever

Diamonds are Forever

Diamonds are one of the most precious luxury items enjoying global acceptance. Diamonds as a category are a powerful product with all the emotional values inherent in the best luxury brands, to put in perspective in 2005 consumers around the world bought 89 million pieces of diamond jewelry, making diamonds a $68 billion industry. US remains the world’s major diamond consumer, the developing countries of both India and china have emerged in the last decade with strong marketing programs.

The domestic gems and jewelry industry had a market size of INR 251,000 Cr (42M $) in 2013, with a potential to grow to INR 500,000 (84M $)–530,000 Cr (88M $) by 2018. India’s Gems and Jewelry Export Promotion Council (GJEPC) plans to spend $8 to $10 million for advertising diamond jewelry among consumers in India over the next three years.

The jewelry consumption behavior in India varies across geographical regions, with few regions focusing more on investment demand than other regions. This is reflected in geographical differences in terms of gold type, diamond quality, jewelry type, and key decision makers in the East and South parts of India, gold jewelry has a high association with culture and traditions, making them better markets for traditional designs. The North and West, on the other hand, have higher demand for white gold and diamond jewelry.

Knowledge of lifestyles and individual tastes and information like anniversaries or birthdays help in target customers. Taking information from customers’ permission at point of sale and in-store surveys. Overtime building a customer database will be useful as its contents become deeper to sustain customer relationships in long term. (Couple: wedding anniversary, other anniversary, birth of a child or grandchild. Single: graduation, promotion, special achievement).

Databases are not simply information centers. They are an active aid to profitability, growing diamond jewelry business. With the current research which focused on geographical areas, obtaining customers database, lifestyles and growing economy in India, there is good potential to invest in India in diamond jewelry industry.

Managing Waste Rock Facilities at mines

Managing Waste Rock Facilities at mines

Waste rock facilities (WRF) generally have a large footprint depending on the strip ratio the mine plan provides. Considerable planning is involved during the initial phase of the mine plan regarding the location of the WRF. As the mining operations are commenced the locations of the WRF change accordingly with the variations in the mine plan involving feedback and support from local communities and stakeholders. WRF management becomes challenging when the area available for placement is limited due to terrain topography, environmental and permitting constraints. Risks associated in the design of waste rock facilities constitute particle size of rock, chemistry associated with the rock for reactivity and stability of the overall facility.

WRF at the mines pose continuous challenges as most of the short haul WRF locations are valley fill and side hill fill. The contouring during construction becomes critical as the final WRF design have to blend with neighboring natural topography. The contouring is primarily achieved with operator experience and effective use of grade control technologies available in the new generation dozers. Effective scheduling during the construction of the WRF can be associated with cost-benefit analysis like fleet management, increase in tire life with respect to up-hill or down-hill haul, improvements in cycle time of the haul trucks by allocating multiple facility locations, efficiency in production tonnage by managing the shovel hang time by scheduling and sequencing the facility priorities.

WRF management becomes challenging when the area available for placement is limited and/or subject to permitting constraints. Risks associated in the design of waste rock facilities constitute type of rock size, chemistry associated with the rock for reactivity and stability of the overall facility. Considerable planning of WRFs is needed to allow flexibility in the strategic placement of materials on a day-to-day basis. WRF slope stability becomes critical under site specific conditions like steeply sloping terrain. Mitigation of potential failures of the WRF slopes at steep terrain can be achieved by designing buttresses and impact berms. Another mitigation of WRF stability is to control the placement of material; soft and fine grained material must be placed in the form of cells (plug facilities) and encapsulated with coarser rock.

The best management practices in WRF design can be achieved when geotechnical, geophysics and geochemical are considered from initial phase to closure phase of the WRF. 3I’s to sustainability and consistency in WRF operations can be: Improve – design with safety, technology usage for grade controls and slope contours. Involve – ideas and feedbacks from stakeholders should be considered and appropriate decision making needs to be initiated for implementation. Initiate – operations and engineering coordination for utilizing resources and technology for waste rock facility locations and monitoring during the life of mine.

Unsaturated Flow in Heap Leach Materials

Unsaturated Flow in Heap Leach Materials

Heap leach practice is considered one of the economical approaches to recover low grade high volume gold/silver and copper mineral deposits. Most of the column studies in heap leach materials were focused on the recoveries and chemistry of the metals, little or no studies were undertaken on the unsaturated flow behavior in heap leach materials. Column testing is typically used during metallurgical evaluations where column sizes may vary in diameter from 10 cm to 1 m.  However, similar tests are not done to evaluate unsaturated flow conditions. Although there are many publications about theoretical aspects and laboratory column tests of unsaturated flow in soils, only a few studies have been done with coarse materials in columns.

Two heap leach materials, crushed (finer) supplied by Mine-1 and run of mine (coarser) supplied by Mine-2 were placed in two large cylindrical columns, 1.3 m diameter and 2 m tall with the bottom of the columns cone shaped filled with drain rock to enhance the outflow. Each column had four instrumentation ports at four different depths. Large column tests can provide useful insights in the behavior of unsaturated flow in coarse materials. Evidence of preferential flow is a reality in heap leach facilities and probably a bigger concern at higher flux application rates. Variability in water content and matric suction measurements can be a result of heterogeneity of materials surrounding the instruments as well as potential preferential flows.

Instrumentation can provide useful trends and are definitely not suitable to provide absolute values for regulatory enforcement. Comparing measured and modeled results require accurate and representative hydraulic parameters. High initial head conditions were considered for the dry material. The relative behavior of the water content and discharge flow rate curves, when flux application stops, provides useful insights in the longer term behavior following heap closure. The experience gained in investigating unsaturated flow in large columns provides insights in the unsaturated flow behavior of heap leach materials as well as the use of instruments in heap leach facilities.

Unsaturated flow in coarse materials is complex and much is left to be learned about the characterization of materials and the detailed flow conditions. Preferential flow is a reality in heap leach facilities and maybe a bigger concern at higher flux application rates. The drain down behavior for both water content and flow rate is exponential in crushed and run-of-mine materials and seems to follow the same general pattern under different flux rates.  The implication is that much can be learned from the detailed monitoring of drain down during operations that can be applied at the time of closure.

The use of instrumentation in heap leach facilities to monitor changes in water content and matric suction must be carefully considered as the results may not provide absolute values for these parameters and may result in a false sense of what “reality” is in the heaps.  Heterogeneity of materials surrounding the instruments as well as potential preferential flows can result in the measurement of variable water content and matric suction. Instrumentation can provide useful trends and it is not realistic to expect more than that.  They are definitely not suitable to provide absolute values for regulatory enforcement.

Mining Business Model basics to achieve improvement and efficiency in productivity

Mining Business Model basics to achieve improvement and efficiency in productivity

In the past, the mining sector has primarily focused on traditional mining business models to improve productivity. However trends are now revealing that enabling infrastructure is the central cost in developing new mines. As a result, mining companies now need to look beyond traditional mine development methods (such as geology, mining and processing) and to new strategies to improve productivity and profitability.

Cost is only half the equation – Mining companies need to explore how to get better value from the resources they have. While cost is an important element, it’s not everything. Companies should be focusing more on value. Because the problem with reactive cost-cutting (particularly in the current state of the industry) is it should not be focused on exclusively and can potentially destroy mine value. A lean and innovative approach to keeping costs down, while focusing on value outputs is needed in order to regain footing.

Holistic approach – There are still practices in the mining industry using mine development methodology that may have been right for when mines were less remote and less complex, but are now outdated. For miners to improve productivity and ROI, they need to get an optimum ‘mine to port’ approach, and understand the whole value chain and integrated decisions across that value chain. By allowing and accepting new technologies and innovation the industry can achieve success.
Remove silos across the mining value chain – Like most businesses the mining industry tends to compartmentalize roles and job functions so that manager can control things. As a result silos can be quite common, resulting in bottlenecks in efficiency. Businesses that create integration across the value chain so those managers are removed from their silos and are thinking and being rewarded for the performance across the whole business will make a huge difference to the performance of their mines.

Focus on infrastructure and sustainability – In recent years, safety has become the number one important focus across the mining industry, with safety being built into projects. It is now a fundamental part of the way mines are developed and operated. Some might argue that sustainability is the new safety.Having a culture of sustainability will be fundamental to the efficiency of projects, enabling them to be delivered with the best ‘triple bottom line’ outcomes.

Embrace new technologies – The emergence of driver less vehicles and remote operating centers has increased efficiencies into the mining sector in terms of being able to manage with fewer resources and costs. Looking towards the future, it will be important for companies to embrace new and emerging technologies and understand how they can impact and improve bottom line efficiencies.

Source – Mining IQ

Finding the “Sweet Spot” – Operational Excellence in mining industry

Finding the “Sweet Spot” – Operational Excellence in mining industry

With the global mining productivity dropping substantially in 2014 focus on cost reduction and continuous improvement programs is gaining momentum.  With the price volatility, geopolitical risks, rising costs, declining grades the productivity in the industry will be challenging going forward.

The following information presented by Mining IQ has summarized the top take always highlighted in Deloitte’s report to achieve operational excellence:

Big Data i.e. Data analytics – With the focus on cost reduction mining industry has been using analytics for the past few years associated with operations, maintenance, safety and supply chain management. And as data analytics technology becomes more sophisticated, new opportunities for greater efficiency will arise and increase performance in areas such as workforce planning, mine planning and asset performance. In time, operational excellence will likely hinge on a mining company’s ability to effectively interpret the massive stores of data it collect.

Innovation – Like most industries, the mining sector is starting to face challenges posed by digital disruption. New technologies, greater reliance on renewable energy sources and electrification are all factors organizations need to embrace in order to cut costs and improve productivity.

Transparency is key – Lack of communication between head office and disparate mine sites is still a common issue faced by most in the mining. To driver greater operational control, companies should aim to create transparent information flows between departments via enterprise-wide operational management systems. This will help companies make more informed and strategic decisions and ensure each mine site is operating as efficiently as possible.

Drive an operational excellence culture – There’s no point in having a strategic plan to improve productivity if you don’t have your people on board. Companies need to approach operational and cultural transformation from the top down, taking and enterprise-wide view of operations.

Back to basics – In an effort to boost capital, many mining companies are going back to basics. Take a look at your management and operational systems and decide which areas can be adjusted to improve efficiency. This may involve streamlining inventory, optimizing working capital or pursuing lean operations.

Re-visit management and governance structures – Many mining companies are currently streamlining their lines of accountability to gain greater visibility into the performance of particular commodity portfolios, existing mine plans and previous capital commitment plans. The aim of this is to avoid operational missteps and move beyond basic cost cutting exercises in order to improve productivity.

Expect the unexpected – In an environment where anything can happen, mining organizations need to be prepared for the unknown and create robust scenario planning capabilities that position them to adapt to a wide range of potential future outcomes.

Operational and Engineering Strategies in the Mining Industry

Mining industry involves shifting of considerable volume of material from one location to another in the process of metal extraction. This dynamic process of moving earth material can have many directions and strategies and may become complex during the life of mine. Executing or directing a mining plan to the operations in fast and aggressive fashion can create different opinions and contradictions. Strategic planning can provide direction, guidance, and focus when the industry is faced with options or choices (Canning et al. 2005).

As the current metal prices are industry high the mining industry as a whole is looking to capitalize either through expanding projects, merges and acquisitions. This high expenditures and mergers involve substantial resources, strategy and evaluation.

Due to the current demand in metal consumption the mining industries are looking into processing lower grade deposits at higher tonnage. Major advancements in increasing the mill throughput studies are becoming a prime focus in the operational improvements area. Sustainability and operational effectiveness of the mining operations are some of the key performance indicators (KPI) in achieving the production targets.

Mine-to-Mill studies have taken a particular interest in the mining industry with emphasis on communication and integration of the approaches taken by the mine and mill.

The mine operations team is constantly looking for continuous improvements and opportunities at daily mine operations. Several scenarios are evaluated before executing any specific project and they are accompanied by a formal Project execution work sheet.

Mine engineering group is responsible to deliver an achievable and realistic plan to the mine operations to obtain budgeted metal plan. The details involved in the planning require data obtained from other departments (geology, process etc) and the analysis of the data involve resources, strategy and timely action.

The fundamental goal of any strategy is to eliminate unnecessary complexity and generate value to the business. Some of the aspects to be considered when executing a strategic plan are financial aspects like rate of return or potential of return, impact on the process and its alignment to the standards of the company. The strategy needs to demonstrate an environment to encourage and participation. Inadequate or lack of integration among operations, engineering and process can create barriers to the operational improvement in most industries (Accenture, 2011).

Continuous improvement (CI) methodology in a process or operation can help to have capable and appropriate structure to guide employee efforts, track value, monitor progress, and identify areas of collaboration (Toth and Elliotte, 2011).

The Strategies implemented at the mines is contribute to understand the big picture than having a tunnel vision. The three things to focus can be quantity, quality, and time. Managing inputs for a purpose can produce outcomes, which contributes to goal. Consistency in the think, plan and act are possible by asking questions like what are we trying to accomplish and why? How are we going to measure the results? What other conditions must exist? How do we get there? (Terry Schmidt, 2009).