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/772779
PROJECT SURVEY 2017 JANUARY 2017 • E&MJ; 19 www.e-mj.com This has engineering consultants busy evaluating mines or reevaluating older projects that were put on the shelf when the market slowed. Data from Industrial Info's Mining Market Business Intelli- gence Platform shows that the value of mining projects in the scoping/feasibility study stage declined from $502 billion to $311 billion, but projects in the advanced planning stage increased from $403 bil- lion to $627 billion. The overall value of active mining projects in the pre-approval stages (exploration, feasibility and permit- ting) stayed about the same in 2016. The trend of declining value of pro- jects under construction continued in 2016, marking the fourth year in a row for declining construction. Mining projects under construction declined from $258 billion in 2015 to $219 billion in 2016. This is mainly due to declines in China, Russia and Latin America. However, even though the overall number is down, some parts of the world are experiencing increas- ing mining construction activity, including south Asia (India), which increased from $7.3 billion to $7.8 billion; southeast Asia, which increased from $11.4 billion to $13 billion; and Turkey/Stans, which in- creased from $4.8 billion to $6.1 billion. We expect this trend to continue in 2017. The top 10 countries for mining pro- ject development are Canada, China, Australia, India, the USA, Brazil, Russia, Chile, Peru and South Africa (See Top 10 Countries for Mining Project Develop- ment Chart). African nations, including Botswana, Congo, Guinea, Mozambique, Namibia and Tanzania, have become in- vestment destinations for resource-hun- gry Asian nations, including China, India and Saudi Arabia. More than 200 mining projects are being developed in these six emerging African nations, representing $62.4 billion. Iron Ore With an investment of $225 billion, iron ore is the second largest commodity for project development behind coal. Iron ore prices doubled in 2016 after bottoming out in 2015. This surprised analysts as stockpiles remain high and new capac- ity continues to come online from large projects being built by companies like Rio Tinto, Vale SA and Roy Hill. Kicking off 2017, Vale SA is starting operation of the massive $14.3 billion Serra Sul S11D mine in Brazil. Construction began on the project in 2013. The mine's three produc- tion lines will be able to process 90 mil- lion metric tons of iron ore per year (mt/y). Canada is the country with the larg- est value of iron ore projects worldwide, with more than $47 billion planned. Brazil, Australia, India, Guinea, Rus- sia, China, Congo, Sweden and Peru round out the top 10 countries for iron ore project development. Copper Codelco, the world's largest copper pro- ducer, announced it would increase capex in 2017 to $3.8 billion, up from $3 billion in 2016. The company is fo- cusing on expansion of the Chuquica- mata mine in Chile and has several pro- jects in the works, including a new efflu- ent water treatment plant for the copper smelter. China consumes about half of the world's metals, including copper, and the nation continues to have a huge impact on global markets and subsequently capital expenditures. It's expected that China's investment in the construction industry will increase demand for copper over the next few years, and if this happens, capital spending is expected to increase. Compa- nies like Rio Tinto are planning and build- ing new mines like Oyu Tolgoi in Mongolia, betting on increased copper demand and an expected supply deficit toward 2020. Gold The price of gold increased by about 20% in 2016. Mining companies continue to invest in new mines and expansions to replace depleting reserves. For example, Newmont Mining Corp. has completed con- struction and started operation at the Long Canyon open-pit gold mine located near Wells, Nevada. The $225 million project was completed early and under budget and represents one of the lowest cost mines in the Newmont stable, with all-in sustaining costs estimated to average between $500 and $600 per ounce (oz). The mine is ex- pected to produce between 100,000 oz and 150,000 oz per year for eight years. A second-phase expansion of Long Can- yon mine is being studied to extend the mine life. Newmont Mining is developing a continuing portfolio of mining projects ranging from early stage exploration proj- ects to projects under construction. Also in 2016, Newmont began operation of the Merian gold mine in Suriname. Industrial Info is monitoring more than $10 billion worth of mining projects for Newmont Min- ing worldwide as part of its Mining Market Business Intelligence Platform. Zinc Zinc prices reached a nine-year high on the London Metal Exchange in December due to speculation, but also improving conditions in China, which have buoyed demand for metals. The industry has shut several zinc mines in recent years and that has had some impact on prices. In Glencore's third-quarter production re- port, it noted zinc production of 789,200 mt, which was down 30% on the com- parable period, reflecting the volume re- ductions that were implemented mainly in Australia and Peru. Glencore recently placed the Black Star mine and Lady Loretta zinc-lead ore mines in Australia on care and mainte- nance, taking 2.3 million and 1.3 million t/y of ore out of the market, respectively. Also in Australia, MMG Ltd. closed the 5.2-million-t/y Century mine. In Ireland, Vedanta Resources PLC closed its Lisheen