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FROM THE EDITOR Successful Leaders Make Smart Decisions The new year is upon us and many people are wondering what to expect in 2013. All of the major mining companies embarked on rationalization programs that began in earnest during the middle of last year and those efforts will continue this year. They sold off "non-core assets" and began to focus on the key projects in the pipeline that hold the most Steve Fiscor/Editor-in-Chief promise for the long term. This month's lead news story about Vale's capital investment program for 2013 is a prime example (See Leading Developments, p. 4). Talking about the company's decision-making process, Murilo Ferreira, Vale's CEO, explains the company will invest in world class assets with long lives capable of creating value through the cycles. He also mentions project execution, capital management and a reduced cost structure. Preparing for a softer market, mining companies are fine tuning their rock factories. They are making sure that existing mines and mills are running at optimum levels, usually with an eye toward scalability, should demand suddenly increase. They are also making sure the projects they have waiting in the wings are the cream of the crop. These are also times that make or break great engineers. Hasty decisions can hurt an engineering team's image, but most of the time a decision to suspend or divest is made for the right reasons. A scrappy mining company will pick up those divested non-core assets, thinking they can quickly turn it into a revenue generator. If they succeed, the market will reward them, much to the major's chagrin. Failure would only reinforce the original decision. Annually, the January edition of E&MJ; carries the Project Survey (See p. 28), the most comprehensive list of mining projects, their status and their capital budget. The survey is compiled by the expert consultants at IntierraRMG (formerly the Raw Materials Group) in Sweden. The 2013 Project Survey verifies that investments in the mining sector grew by only 9% in 2012, compared to 20% in 2011. But, what may (or may not) surprise readers is the information related to the escalating costs for projects. For the last two years, the survey has mentioned how costs increase dramatically between the feasibility and construction phases. The average increase this year for gold projects was more than 50%. This edition of E&MJ; also carries two articles describing how technology is being used to better understand mine design and planning (See Mine Design, p. 34, and Digital Mapping, p. 40). In the mine design article, Simon Walker elaborates more directly about recent cost overruns, while Russ Carter describes how today's mining engineers are successfully incorporating new digital technologies into mine surveying, mapping and design. These two articles conjure a scenario of today's mining engineers being able to visualize a project as a living body of work with more parameters related to development of the ore body, metal values and mining costs. Mining projects are large projects that pose unique challenges that can be difficult to solve. When one looks back at what went wrong with project execution, a lack of leadership is usually one of the main culprits. The leaders of successful engineering teams have confidence in their group and make fewer changes along the project path. With a limited number of projects, today's mining engineers will have to improve project management skills to excel in a more competitive environment. ENGINEERING AND MINING JOURNAL www.mining-media.com Mining Media International Editorial Office 11555 Central Parkway, Suite 401 Jacksonville, Florida 32224 U.S.A. Phone: +1.904.721.2925 Fax: +1.904.721.2930 Editor-In-Chief—Steve Fiscor, sfiscor@mining-media.com Managing Editor—Russ Carter, russ.carter.emj@gmail.com European Editor—Simon Walker, simon.emj@btinternet.com Latin American Editor—Oscar Martinez, omartinez@mining-media.com South African Editor—Antonio Ruffini, aruffini@webafrica.org.za Australian Editor—John Miller, john.miller@gotalk.net.au Associate Editor—Gina M. Tverdak-Slattery, gtverdak@mining-media.com Graphic Designer—Tad Seabrook, tseabrook@mining-media.com Mining Media International Corporate Office 8751 East Hampden, Suite B1 Denver, Colorado 80231 U.S.A. Phone: +1.303.283.0640 Fax: +1.303.283.0641 President/Publisher—Peter Johnson, pjohnson@mining-media.com VP-Sales and Marketing—John Bold, jbold@mining-media.com Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S. & Canada, Sales—Mary Lu Buse, mlbuse@mining-media.com Scandinavia, UK and European Sales Manager—Colm Barry, colm.barry@telia.com German Sales Manager—Gerd Strasmann, info@strasmann-media.de Rest of World, Sales—Peter Johnson, pjohnson@mining-media.com Classified Advertising—Norm Rose, nrose@mining-media.com Classified Advertising—Tanna Holzer, tholzer@mining-media.com Ad Traffic Manager—Erica Freeman, efreeman@mining-media.com Engineering & Mining Journal, Volume 214, Issue 1, (ISSN 0095-8948) is published monthly except January and July by Mining Media, Inc., 10 Sedgwick Drive, Englewood, Colorado 80113 (mining-media.com). Periodicals Postage paid at Englewood, CO, and additional mailing offices. Canada Post Publications Mail Agreement No. 40845540. Canada return address: Station A, PO Box 54, Windsor ON N9A 6J5, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available on the World Wide Web at www.e-mj.com. SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: USA and Canada, 1 year, $82.00, 2 year, $139.00. Outside the USA and Canada, 1 year, $134.00, 2 year, $249.00 surface mail (1 year, $191.00, 2 year, $352.00 airmail delivery). For subscriber services or to order single copies, write to E&MJ;, 8751 East Hampden, Suite B1, Denver, CO 80231 USA; call +1.303.283.0640 (USA) or visit www.mining-media.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of selected archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For microform availability, contact ProQuest at 800-5210600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ;, P.O. Box 1337, Skokie, IL 60076 USA. Steve Fiscor, E&MJ; Editor-in-Chief, sfiscor@mining-media.com REPRINTS: Mining Media Inc, 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com. EXECUTIVE OFFICE: Mining Media, Inc., 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com 2 E&MJ; • JANUARY 2013 COPYRIGHT 2012: Engineering & Mining Journal, incorporating World Mining Equipment, World Mining and Mining Equipment International. ALL RIGHTS RESERVED.