Engineering & Mining Journal

MAY 2019

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

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2 E&MJ • MAY 2019 FROM THE EDITOR Last year at this time, E&MJ was talking about how great the copper market looked. A perfect storm was in the mak- ing, one where stocks were low and falling, prices were rising, which is good for miners, but not necessarily the consumer, and rosy forecasts offered several reasons to be optimistic. Then, the trade rhetoric between China and the U.S. put copper and most of the other mined commodities in a holding pattern. This now seems to be a reoccurring theme for May. Unlike the trade dispute between the U.S. and Canada, which impacted two countries and specifi c metals such as iron ore and aluminum, the discussions be- tween the U.S. and China have greater macroeconomic implications. The fear is that protracted negotiations or an escalation in tariffs could slow Chinese growth. The two largest investment areas for mining are iron ore and copper and China is the primary consumer for both of these metals. If the Chinese economy cools, many believe demand for these metals and other mined commodities will also decrease. This will impact several countries and multinational miners. Many mining companies are already prepared for this. The diffi cult years that followed the most recent slump in metal prices forced many mining companies to review their profi les. They sold non-core assets and improved their balance sheets. They bought back stock. Now they are seeking to transform performance organically through productivity improvement. Rio Tinto, for example, recently announced a 5-year, company-wide productivity improvement program that is focused on creating a culture of working smarter. It believes that plan, which it is implementing today, could generate an additional $1.5 billion in free cash fl ow each year in the future. To get there, they are gath- ering and leveraging their expertise with asset management and infrastructure, ore body knowledge and automation (operations technology). Similarly, Teck Resources through its "Ideas at Work" program is identifying the ideas that have the greatest potential to improve its operations and then applying them across their business, which ranges from base metal to coal mining in several mining districts. They are looking at practices that strengthen safety, enhance sustainable performance, im- prove productivity and help grow the business. Many other large mining houses have similar productivity improvement programs that consider smart mining with sustainable goals. In addition to a better work envi- ronment, the gains that these programs will make will ultimately improve processes and lower the cost of the product, which will help companies sustain the business during lean periods and improve profi t margins when prices trend higher. Mining is a capital-intensive business with projects whose lives span 20 years or more. Change happens and that can be factored into investment decisions as mining companies adapt. The tension that will develop as President Xi Jinping and President Donald Trump negotiate a new trade deal will cause some short-term anxiety in the boardrooms of many mining companies, but it's important to remem- ber that long-term mining projects require commitment and a steady hand. When they reach an agreement, demand for mined commodities could begin again at an accelerated pace and those with a long-term vision will reap the rewards. Trade Dispute and Market Uncertainty Will Pass Steve Fiscor Publisher & Editor-in-Chief Steve Fiscor, Publisher & Editor-in-Chief sfi scor@mining-media.com Mining Media International, Inc. 11655 Central Parkway, Suite 306; Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 / Fax: +1.904.721.2930 Editorial Publisher & Editor-In-Chief—Steve Fiscor, sfi scor@mining-media.com Associate Editor—Jennifer Jensen, jjensen@mining-media.com Technical Writer—Jesse Morton, jmorton@mining-media.com Contributing Editor—Russ Carter, rcarter@mining-media.com European Editor—Carly Leonida, cleonida@mining-media.com Latin American Editor—Oscar Martinez, omartinez@mining-media.com South African Editor—Gavin du Venage, gavinduvenage@gmail.com Graphic Designer—Tad Seabrook, tseabrook@mining-media.com Sales Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S., Canada & Australia, Sales—Frank Strazzulla, fstrazzulla@mining-media.com Scandinavia, UK & European Sales—Colm Barry, colm.barry@telia.com Germany, Austria & Switzerland Sales—Gerd Strasmann, info@strasmann-media.de Japan Sales—Masao Ishiguro, ma.ishiguro@w9.dion.ne.jp Production Manager—Dan Fitts, dfi tts@mining-media.com Marketing Manager—Misty Valverde, mvalverde@mining-media.com www.e-mj.com Engineering & Mining Journal, Volume 220, Issue 5, (ISSN 0095-8948) is published monthly by Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 (mining-media.com). Periodicals Postage paid at Jacksonville, FL, and additional mailing offi ces. Canada Post Publi- cations Mail Agreement No. 41450540. Canada return address: PO Box 2600, Mississauga ON L4T 0A8, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available at www.e-mj.com. SUBSCRIPTION RATES: Free and controlled circulation to qualifi ed subscrib- ers. Visit www.e-mj.com to subscribe. Non-qualifi ed persons may subscribe at the following rates: USA & Canada, 1 year, $90. Outside the USA & Can- ada, 1 year, $150. For subscriber services or to order single copies, contact E&MJ, c/o Stamats Data Management, 615 Fifth Street SE, Cedar Rapids IA 52401, 1-800-553-8878 ext. 5028 or email subscriptions@e-mj.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 mi- croform availability, contact ProQuest at 800-521-0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ, 11655 Central Parkway, Suite 306, Jacksonville, FL 32224-2659. REPRINTS: Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA; email: subscriptions@e-mj.com; phone: +1.904.721.2925, fax: +1.904.721.2930; www.mining-media.com. PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clear- ance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com. EXECUTIVE OFFICE: Mining Media International, Inc., 11655 Central Park- way, Suite 306, Jacksonville, FL 32224 USA phone: +1.904.721.2925, fax: +1.904.721.2930, www.mining-media.com. COPYRIGHT 2019: Engineering & Mining Journal, incorporating World Mining Equipment, World Min- ing and Mining Equipment International. ALL RIGHTS RESERVED. Last year at this time, the copper market looked. A perfect storm was in the mak- ing, one where stocks were low and falling, prices were rising, which is good for miners, but not necessarily the consumer, and rosy forecasts offered several reasons to be optimistic. Then, the trade rhetoric between China and the

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