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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C O P P E R O U T LO O K mining regions have recently experienced lower productivity. According to Tilton, this falling productivity is cyclical. "In the 1990s, productivity was dramatically higher and prices were lower," Tilton said. "After 2003, the situation reversed, with lower productivity and higher prices. When prices rise, productivity falls and vice versa." For Chile, in particular, the implications of a lack of energy and water for mine production will also determine the industry's success moving forward. The country owns two power grid systems—SINC (Central Interconnected System) and SING (Large North Interconnected System)—to satisfy the growing demand for electricity, including mining. Both are expected to grow at moderate rates within the next 10 years. "Because of the increase in mining operations, we expect a significant growth in energy consumption," said Erick Heimlich, consultant-copper, CRU. "Competitiveness is not only about prices, but also about availability in Latin America. Important greenfield projects like Panamá in Panama and Mirador in Ecuador, mine owners will have to construct their power delivery system." In North America, even in well-established mining districts located in remote areas, power infrastructure may be re- www.e-mj.com quired for greenfield projects. In Africa, poor power infrastructure is an important obstacle to the mining industry, while Asia has copper producing regions that are also facing deficits in infrastructure: Oyu Tolgoi in Mongolia, for example, is connected to the Chinese power grid for the first four years of operation. After that, a coal-fired power plant will be constructed. Human Resources A panel discussion about advanced mining and human capital included top executives from Codelco, Finning and Komatsu, reporting their most recent approaches to achieve improved efficiency through innovation, the use of autonomous mining equipment, and optimization of human resources. Fidel Báez, Codelco's corporate manager underground mine projects, talked about the main challenges of mass mining and said Codelco's new underground mining system enables a continuous flow of ore from the mine to the plant. "Technology is key," Báez said. Komatsu Chile General Manager Darko Louit Nevistic said copper mining productivity in Chile is declining due to factors such as declining ore grades, longer hauling distances, more remote locations, shortage of qualified personnel, etc. The company aims to improve productivity by focusing on enhancing labor, capital and operating assets. Labor costs are growing faster than productivity. "A comprehensive people strategy is as necessary as technology and innovation," said Juan Antonio Winter, vice president mining–Finning, South America. There are challenges and opportunities in copper supply and demand. From 2030, demand from China should begin to drop and demand from developing countries will start to ramp-up. Independent consultant David Coombs said in recent years the mining world has seen a significant cash cost and capital cost escalation. A continuation in the trend of rising copper prices is expected, while Sean I. Waller, president and director of Candente Copper Corp., said supply is not sufficient to meet a sustained increase in demand. For Viviane Lloyd, CRU's copper demand and markets manager, 2012 was a year when copper consumers began to wonder whether they could use aluminum when the copper price reached $4/lb. CRU believes the aluminum:copper price ratio peaked in 2012. The question is: Has sufficient new technology been developed to displace some copper demand? JULY 2013 • E&MJ; 71