Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/623935
started to remove some inefficient capaci- ty, but much more will need to be removed to remedy the situation. This doesn't bode well for iron ore suppliers, which have added significant capacity in recent years. The big iron ore producers, such as Rio Tinto and BHP Billiton, continue to expand in Australia at a reduced pace. At a time when new iron ore mines don't appear feasible, Rio Tinto is studying its next iron ore mine in Australia, the Silvergrass project, and could select an engineering, procurement and con- struction management firm in early 2016. Coal Thrives Outside the U.S. and Europe China is the world's largest coal producer, pro- ducing four times as much as the U.S., which is the second-largest producer. India, Australia and Indonesia round out the top five coal pro- ducers. Worldwide, coal mining firms are developing more than 3,000 projects totaling $394 billion. China accounts for 53% of the value of coal mining projects under develop- ment worldwide. Australia, India, Russia and Poland round out the top five countries for coal mining project development. Coal has taken a hit in the U.S. and Canada due to a combination of low natu- ral gas prices and environmental regula- tions that has expedited deterioration of the coal mining industry and discouraged future growth, in spite of the fact that coal will supply around 30% of U.S. power needs in the foreseeable future (down from about 50% just a few years ago). What is needed to save coal mining in the long term is development of revolutionary new clean coal technology that is economically feasible. Carbon capture technology has yet to achieve that milestone. In Europe, many countries are turning away from coal as a fuel source. The U.K. has announced plans to close all coal mines by 2035. But while new coal mine development is bleak in North America and parts of Europe, elsewhere it is thriving as countries look to capitalize on the inexpensive abundant and secure energy source. China is consolidating its coal mines. India is developing as many coal mines as it can and has been increasing imports of coal to satisfy growing demand. Copper: Cutbacks are Now the Norm Mining firms are developing more than 750 projects, totaling $224 billion in cop- per ore mining projects worldwide. Copper mining companies, including Codelco, Freeport-McMoRan and Asarco LLC, a wholly owned subsidiary of Grupo Mexico, continued cost-cutting measures in 2015. Freeport McMoRan shuttered the Miami mine in Arizona and reduced output at other mines, including the Tyrone mine in New Mexico and Climax Molybdenum's Henderson mine in Colorado, as well as mines in Chile, Congo and Indonesia. Freeport McMoRan will continue to oper- ate the Miami copper smelter, which receives concentrate from several copper mines in Arizona. The company had previously decid- ed not to proceed with a $450 million smelter environmental upgrade and expan- sion, which now has been reduced in scope to encompass the environmental improve- ments only. A decision on whether to proceed with the project will be made in early 2016. Asarco indefinitely shut down the Hayden concentrator and curtailed produc- tion at the Ray mine, both in Arizona. Chilean copper miner Codelco announced similar cost-cutting measures at its opera- tions, including suspension of new hires, and is also re-evaluating expansion plans at its mines in Chile. Current projects under con- struction are being extended over a longer period of time. Codelco recently announced it will cut its five-year capital expenditure pro- gram by about $4 billion, from a previously announced $25 billion to somewhere between $21 billion–$22 billion. During the down market, the company will stretch out major expansions at its mines in Chile. In 2016, mining companies will contin- ue to battle low commodity prices by con- serving capital and metal resources, and shifting focus from large greenfield or expansion projects to smaller incremental expansions and productivity optimizations at existing mines, in an effort to improve prof- itability in the near term. Long-term plans for organic growth will continue, but at a more conservative pace as the industry waits for demand/commodity price improvements. This article was prepared for E&MJ; by Industrial Info Resources and written by Joseph F. Govreau, vice president of research for its metals and minerals indus- try group. Texas, USA-based Industrial Info Resources (www.industrialinfo.com) has been a leading provider of global industrial market intelligence since 1983 . 22 E&MJ; • JANUARY 2016 www.e-mj.com P R O J E C T S U R V E Y 2 0 1 6