Are we entering the last age of the open cut mine?
Is the end of open pit mining near?
Speaking to a number of sources, the answer is clearly no, but as grades decrease and deposits become deeper, the increase of underground mining will continue apace as older open cut mines are worked out and new, deeper deposits are discovered.
Underground mining will soon count for a much larger proportion of total mining.
According to a Rio Tinto seminar in 2010, in 2009 underground operations accounted for 26 per cent of all copper production, however Rio forecast that by 2025 underground operations would account for 40 per cent of global copper production.
This included major copper producers such as Chile and Australia, where massive open cut pits are the norm.
But this is not to say open cut mining has been uneconomical.
Surface mining has been, for some time, the most economical form of mining in Australia.
Underground contract mining specialist Pybar’s group business development manager David Noort told Australian Mining “open cut mines have been, economically, the most viable, which has been due to relatively near surface expressions”.
With wide open spaces and often remote locations, it has been the more cost effective form of mining, but globally it has already started coming to an end, with Noort explaining that “many of these higher grade expressions close to the surface have already been discovered, so we are left chasing ore down”.
Speaking to Sandvik Mining and Construction’s underground mining specialist Malcolm Campbell, he told Australian Mining that “globally many surface mines are getting to the end of their economic life, where they are now removing too much waste rock to be considered economical”.
However, Campbell did clarify that in the case of iron ore mines, particularly in Western Australia, surface mining will remain de rigueur; many operations will keep going that way due to many of the deposits being closer to the surface, although they may approach it differently, with operators such as Fortescue Metals Group using surface miners instead of the traditional excavator and truck model.
Previously speaking to Barminco CEO Peter Stokes on the issue of underground mining, he stated "we are seeing a great trend towards underground contracting, and the fact that our techniques are getting better is only helping this".
Technologically, underground mining is also looking more prospective for equipment manufacturers.
Speaking to Rio Tinto's Australian general manager for geotechnical engineering and cave management, Andre van As, he told Australian Mining that as Rio Tinto develops its block caving expertise in Australia will be looking to unique technologies to do it in more efficient ways.
Rio Tinto has been one of the major developers of the block caving methods, implementing it at its former Northparkes mine and the Argyle Diamond mine, with van As stating that "block caving is a very attractive mass mining method".
Whilst block caving methods have been around since the 19th century, the technique has been coming along in leaps and bounds, particularly in South America, with van As stating that "the Chileans have been doing it for much longer [than we have in] Australia, most of Codelco's copper mines (such as the massive Chiquicamata) are block caving operations, and [one of the world's largest mines] Freeport Grasberg in Indonesia is also doing it".
Stokes added that there is this shift from open cut to underground already starting in Australia and nearby.
“Tropicana is a surface mine that will likely go underground to access higher grades, and even long term mines such as the Freeport-Grasberg mine in Indonesia is shifting wherethey spent 25 years doing surface mining and will now last another 40 to 50 years as an underground operation - these are massive operations making the move to underground."
Chiquicamata is a perfect example of how miners are changing their focus from open cut to underground.
The operation has been mined as an open cut for more than 500 years, and to extend this orebody’s life in the most economical manner, they are now moving underground.
According to Stokes Australians also have the skills to make this shift, as they have the experience in creating decline mines, which are cheaper to develop than conveyor or shaft mines.
"Decline mining is definitely an Australian capability which is being pushed out , particularly in Africa, as declines are more cost and infrastructure advantageous compared to shaft mining," Stokes said.
Pybar’s Noort added that “when mines are starting declines it will usually be at the bottom of the put, as it is just much easier for operators to start as an open pit and access that higher grade, near surface ore and then move to the point where they move to either an underground or sub cave/ block caving model to access the remaining ore, rather than go straight to an underground model”.
This was demonstrated with the Ernest Henry mine.
The site has been operating as an open cut since 1997.
In 2009, the miner approved a massive investment to transform the open cut pit into an underground mine.
The plan was approved after a series of studies led to the mine’s ore reserves being revised to 72 million tonnes at a grade of one per cent copper, 0.5 grams per tonne gold and 22 per cent magnetite.
The company said this was a 600 per cent increase on previously published underground reserves.
The move by Xstrata has breathed another 12 years of life into its Ernest Henry Mining operation near Cloncurry, which has now successfully transitioned from open cut last year into an underground mine and is now on track to reach full production levels.
Stokes was keen to add that in making the shift underground "it's all about how deep you go, and decline mining makes more sense going around one to two kilometres underground, however anything below that you'd look at conveyor or shaft operations”.
Speaking to GE Mining CEO Geoff Knox he explained to Australian Mining that “the technology demands for underground operations are higher than for open cut, and stronger certification is required, so it’s not an easy field to enter, but for those that can it provides a real point of differentiation”.
Campbell stated that this is what drove Sandvik to develop a new, tight turning narrow vein drill for underground mining.
“We’ve seen a global rise in interest in smaller equipment; in Australia we’ve typically used larger machines and now we’re seeing some interest turn towards these smaller machines as there is no reason, or need to move as much waste rock.”
However, other new underground technologies and techniques are allowing miners to access deep, low grade, massive orebodies which previously would have been considered uneconomical.
The rise of automation and mining’s technical proficiency in the arena is a major area where new technology is allowing operators to access orebodies that were either too uneconomical, or potentially too dangerous to work.
Noort went on to add that “with underground we aren’t seeing as many technical problems, but it is the variables this technology encounters that provides the stumbling blocks – it’s not a communications issue but reliability of the equipment
Technology-wise, one of the major indicators of the greater importance being placed on underground mining has been the shift of previously open cut focused mining machinery manufacturers – such as Caterpillar and Komatsu, moving underground.
Caterpillar did this through its acquisition of Bucyrus, and a greater focus on new underground equipment. Komatsu did this through its new partnership with GE Mining.
Noort added that “if you want to get into the mining game, or strengthen your position in it, you have to get in to underground”.
While the full details of the partnership between Komatsu and GE Mining are yet to come to light, Knox did tell Australian Mining there will be some interesting developments coming out of the joint venture.
Noort added that Pybar itself is also looking at sub-level caving technology, stating that “we’re looking to lever proven, practical applications of technology to become more efficient”.
Knox went on to say that in the meantime it remains “an interesting phase in the industry as everyone is now focused on the real business of mining i.e. efficiency and productivity”.
The focus has also turned towards the future, and how the current trend towards cutting back exploration as well as the depth of new discoveries, will affect the mining industry.
As all miners cut back exploration, with BHP and Rio Tinto making enormous cuts and forecasting even more, it is unsurprising that the industry is seeing less grassroots exploration – particularly from juniors – and more minesite exploration, which more often than not is operations chasing their existing deposits down their full strike and depth.
“We are seeing more brownfield, rather than greenfield exploration,” Noort explained.
Part of the issue behind this is the wider cost cutting, but there is also the issue of the percentage of new discoveries increasingly being either covered, or completely blind.
Essentially, it is easier to chase down existing deposits that you know exist, than try to search for larger, near surface deposits that are blind.
“This longer term trend of a reduction in greenfields exploration means we will see an increase in open cut pits turning into underground operations,” Noort said.
Campbell stated that much of the future for mining will be underground.
“We’re seeing fewer new near-surface discoveries, and mines are chasing their existing deposits into deeper and deeper depths, so miners will continue to follow it down.”