la necesidad de pautas para el cierre de minas; y un marco ... necesidad... · • offician mexican...

Integrated Mine Waste Management and Closure Services

Specialists in Geochemistry and Unsaturated Zone Hydrology

La Necesidad de Pautas Para el

Cierre de Minas;

y un

Marco Dentro del Cual Aplicar las

Pautas

The Need for Mine Closure Guidelines;

and a

Framework within which to Apply the Guidelines

Mike O’Kane, P.Eng.

President, O’Kane Consultants Inc.



Three Key Discussion Themes

1) What is Mine Closure Planning and why do we Need it?

2) What are Mine Closure Planning Guidelines?

3) How we Integrate Closure Planning with Mine Planning?

Examples to Facilitate Understanding



“Typical” Financial View of Mine Closure Timelines

Source: KPMG; Global Metals and Mining Outlook September 2016



The Reality of Mine Closure Timelines…

Source: KPMG; Global Metals and Mining Outlook September 2016



$$$

Burden of Mine Closure Liability

Mine A: Operations Mine X: Investment Capital

Source: Yukon News Mining-technology.com



$$$

$$$


Mine B: Decommissioning

Mine A: Operations

Mine B: Closure

Mine X: Investment Capital




$$$

$$$


Mine B: Decommissioning

Mine A: Operations

Mine B: Closure

Mine X: Investment Capital

$$$




Long-Term Closure Costs

Mine Environment Neutral Drainage

(MEND) Program, 2013

Canada’s MEND Program… Survey

~$750 million annually in the collection

and treatment of mine effluent

Funds for…

Water Treatment…

Diverted Cash Flow



Long-Term Closure Costs

Mine Environment Neutral Drainage

(MEND) Program, 2013

Canada’s MEND Program… Survey

~$750 million annually in the collection

and treatment of mine effluent

Funds for…

Water Treatment…

Diverted Cash Flow

>75% of sites in excess of 10 years

~50% of sites in Perpetuity



Existing Closed Mine Collection and Treatment

1990 ~ $20M

NPV for Collection & Treatment




1990 ~ $20M

2000 ~ $25M

2005 ~ $45M

2017 ~ $80M





1990 ~ $20M

2000 ~ $25M

2005 ~ $45M

2017 ~ $80M

• Lime cost increase trigger

• Increased lime usage


• Lime cost + Labour + etc.

• Technical assumptions of

performance

• 50% Technical assumptions

Increased lime usage / cost

• 50% Discount rate




1990 ~ $20M

2000 ~ $25M

2005 ~ $45M

2017 ~ $80M

• Lime cost increase trigger

• Increased lime usage


• Lime cost + Labour + etc.

• Technical assumptions of

performance

• 50% Technical assumptions

Increased lime usage / cost

• 50% Discount rate

… The original $20M in 1990 is already “Unfunded and Unrecognized Liability”…

… And all of these costs are not the “All in Closure Costs”…

This does not represent optimized project economics…



So… What is the Path Forward…?



Changing the “Question…”



“…License to operate…”

“…Shareholder demands for more

robust capital allocation…”




“…the Center of decision making in the

Metals and Mining sector…”

“…are Increasingly driving

Environmental, Sustainability and

Governance (ESG) to…”


“…License to operate…”

“…Shareholder demands for more

robust capital allocation…”



From an Investment Perspective…

is what we are saying today New?



No…

From and Investment Perspective…

is what we are saying New?



..and Yes…

In terms of Water…

Mine Closure is “about”…

…Water Quantity… and

…Water Quality

It is this issue that results in

“unrecognized and unfunded liability”

and therefore the potential of a failure

to optimize the economics of the mine

From and Investment Perspective…

is what we are saying New?



So… What is the Path Forward…?

Although many mines provide attractive Equity Value…

This value is rarely optimized, due an under appreciation for cash flows

required for closure liability revolving around water quality



The Path Forward…

Although many mines provide attractive Equity Value…

This value is rarely optimized, due an under appreciation for cash flows

required for closure liability revolving around water quality

The Path Forward then… is to…

Quantify this water quality risk appropriately…

…with the reality of “real closure” at-hand

And indeed…

Quantify the benefits of reducing this

water quality liability during planning

…which is a time when we can

quantify risk with much greater certainty

… And this requires alignment of feasibility studies,

mine planning, and closure planning…

…Early, and Often…



Why Is There A Need For Guidelines?

• Examples of current or developing guidelines:

o Queensland, Australia is currently developing

guidelines to minimise regulatory burden while

supporting efficient regulation, provide certainty to

stakeholders and underpin better performance

management and rehabilitation outcomes on mined

land.

o Western Australia, Australia has published guidelines

that every mine in Western Australia must meet DMP ad

EPA’s objectives for rehabilitation and closure.

o Northern Territory, Australia is currently developing

guidelines to provide clarity on mine closure

expectations in the NT. Guidelines aim to clarify

regulatory expectations so that mine operators identify

and address site-specific closure risks.



Why Is There A Need For Guidelines?

A Guide to “Start at the End”

What are your Site-Specific

Objectives?



Current “Guidelines” Around the World Category Examples

Mine Closure

Guidelines

Technical

Guidance

Documents for

Mine Closure

Mine Reclamation

and Closure

Policy’s



Current “Guidelines” Around the World Category Examples

Mine Closure

Guidelines

• Guidelines for Preparing Mine Closure Plans (Western Australia)

• Guidelines for the Closure and Reclamation of Advanced Mineral Exploration and Mine Sites in the

Northwest Territories

• Northern Mine Decommissioning and Reclamation Guidelines (Saskatchewan)

• Health, Safety and Reclamation Code for Mines in British Columbia – Guidance Document

• Manitoba Mine Closure Regulation 67/99 General Closure Plan Guidelines

• Guidelines for the Rehabilitation of Mined Land (South Africa)

Technical

Guidance

Documents for

Mine Closure

• Planning for Integrated Mine Closure: Toolkit (ICMM)

• Mine Closure (Info Mine E-Book)

• Global Cover System Design Technical Guidance Document (INAP)

• Cold Regions Cover System Design Technical Guidance Document (MEND, 2012)

• Preparation of a program for environment protection and rehabilitation (PEPR) for metallic and

industrial minerals (excluding coal and uranium) in South Australia

• Mine Closure and Completion, Leading Practice Sustainable Development Program for the Mining

Industry

• Mine Rehabilitation, Leading Practice Sustainable Development Program for the Mining Industry

• Strategic Framework for Mine Closure

Mine Reclamation

and Closure

Policies

• Peruvian Mine Closure Requirements

• Offician Mexican Standard NOM-141-SEMARNAT-2003

• Yukon Mine Site Reclamation and Closure Policy

• IGF Mining Policy Framework Mine Site Reclamation Policy for the Northwest Territories

• Mine Site Reclamation Policy for Nunavut



What are Mine Closure Planning Guidelines?

• They can Provide a Site-Specific

“Road Map” to Closure

• They should not, lead to an Endless Loop of

Planning

• Must recognise the difference between:

o Closure Planning; and

o Closure Planning Support Studies

• A focus on closure studies alone results in:

o Never breaking out of the “loop”



Why do we Care…?

To Optimize…

A Closure Plan must be Integrated with the Mine Plan



Why do we Care…?

To be Optimal…

This Integration should occur from the Beginning



Why do we Care…?

To be Optimal…

This Integration should occur from the Beginning

There is an Opportunity at each of our Sites to

Implement an Approach, that

Distills and Communicates closure objectives to

Practitioners and Decision Makers in ways that they can

Understand and Execute in the field at a Commercial scale.

And… the communication tool is RISK



Closure Time Frames

An Increasing Level of Detail for Closure Planning… Conceptual to Detail

And… do the Failure Modes Change?

Likely Not… But,

Risk should be decreasing… we hope!

And should be our Communication Tool



FMEA…? Our Communication Tool…

Not Likely (NL) Low (L) Moderate (M) High (H) Expected (E)

Extr

em

e (

E)

Hig

h (

H)

Modera

te (

M)

Low

(L)

Neglig

ible

(N

)

Extreme

High

Medium

Low

Eliminate, avoid, implement specific action plans / procedures to

manage and monitor

Proactively manage

Actively manage

Monitor and manage as apprpriate

Co

ns

eq

ue

nc

e

Likelihood

Risk Matrix

Risk Level Guidelines for Risk Matrix

• Failure Modes and Effects Analysis

• Objective of an FMEA is to identify and

quantify risks in order to either avoid or

mitigate them.

• Combines the likelihood of failure with

the consequences of a failure to express

the outcome as a risk.

An FMEA is an

Excellent Tool / Framework

to

Enhance / Facilitate / Integrate

Discussion on a

Closure Plan

(or component of)




INAP 2015

• An FMEA is Fundamentally different than a Risk

Assessment





Assessment • Risk Assessment: Impact of System as a WHOLE

INAP 2015





Assessment • Risk Assessment: Impact of System as a WHOLE

• FMEA: Failure of Individual COMPONENTS OF THE SYSTEM,

and its Impact on the System’s Functionality

INAP 2015



Don’t Forget your Objectives…



What is Happening while these Facilities are being Built?

Typically High

Water Infiltration

and

“Wetting Up” Dependent on

Texture and Lift Height / Exposure



What is Happening while these Facilities are being Built?

Typically High Gas Flow Potential



Can we Reduce Mass of Oxidation Products,

or “Stored Load”?



Can we Reduce Mass of Oxidation Products, or

“Stored Load”?

Is there Benefit in Reducing Stored

Oxidation Products (load) during Operations...

So we Manage Risk “Now”

Therefore there is Less Reliance on

Managing O2 and NP at Closure

And if required, it would be over a Shorter Time

frame because there are fewer stored oxidation

products to manage



Is this Possible…?

Can it be Quantified so as to Evaluate Relative Risk / Cost?

In General… Five Variables that Influence ML-ARD Leaching Risk from Waste Rock

1) Climate

2) Physical Properties

3) Geochemical Properties

4) Waste Dump Construction

5) Covers and Treatment



Is this Possible…?

Can it be Quantified so as to Evaluate Relative Risk / Cost?

Advective ingress

of oxygen = 90% of

oxygen flux

“Eliminate this and

acid generation

can be reduced by

an order of

magnitude”

Bingham Canyon (Brown et al, 2014)



Managing Gas Transport

Pearce et al 2015

1 x 10-1 m3/m2s.

1 x 10-4 m3/m2s

3 Orders

Lower

1 x 10-6 m3/m2s

2 Orders

Even Lower

Coarser Medium

Finer

Structure Effect on Air Flow



Geita Gold Mine

20 km from Lake Victoria

Falls in Geita Forest Reserve

Dobchuk et al 2015

Case Study… a simpler cover system Example of Gas Management and Water Quality



Example of Gas Management and Water Quality

Waste rock:

Primary sulfide is pyrite

Carbonate mostly

calcite

~38% is potentially acid

generating (PAG)

Dobchuk et al 2015




Mt Morgan

Woodcutters

Brukunga

Rum Jungle

Kennecott Utah

Copper

AMD at Brukunga Mine,

Australia csiro science images

Known ARD “producers”

and all sites with similar

climate to Geita

Dobchuk et al 2015

Why did this not

occur at Geita?




During mine planning and scheduling, an

appropriate link was developed between:

1) WR characterization;

2) Block modelling; and

3) Mine scheduling; with

4) An appreciation for oxygen management

during placement… to achieve:

Dobchuk et al 2015

Meaningful

Encapsulation

of Waste Rock




Clay layers and truck compaction of

lift surfaces

1) Minimizes truck tire wear… but

also

2) Significantly reduces vertical

airflow capacity

• Reduced WRD lift height to 10m

• Crest berms and slope back towards natural

hill slope

• NPAG material placed in small lifts to ensure

minimization of advective gas transport

(i.e. lower air permeability)

• Therefore, oxygen is consumed during

diffusion of gas laterally across this zone

before reaching PAG

Dobchuk et al 2015


Specialists in Geochemistry and Unsaturated Zone Hydrology Dobchuk et al 2015


NTSF

WD1

Mtakuja River 10 Years Later

For a ~100m high x 1km

wide and 2km long

WRD…

Only one seep of

significance (SO4 only)

Seep Location

Pre-2010

Dobchuk et al 2015

Dobchuk et al 2015








Management of Short- and Long-Term Water Quality and Flow

Road Maps to Closure and Integration with Mine Planning

For Waste Rock, provide a tool that quantifies the benefits of

managing gas transport to minimize stored acidity



Thank You!

O'Kane Consultants

Rainbow of Hope for

Children

Habitat for Humanity

Initiative

O’Kane Consultants are Proud Supporters of the: