Engineering & Mining Journal

JUN 2016

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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NEWS-LEADING DEVELOPMENTS 4 E&MJ; • JUNE 2016 www.e-mj.com Canada's Oil Sands Hub City Begins Recovery From Wildfre Fort McMurray, Alberta, Canada, began steps in late May toward recovery from a devastating forest wildfre that hit the city of 88,000 on May 1, forcing evac- uation of the entire population on May 3. Fort McMurray is the hub city for oil sands production facilities located 25 kilometers and more north of the city. A large portion of oil sands production was shut down at the beginning of the emer- gency, not because of direct threat to pro- duction facilities, but to ensure workers were safe and to release them to help fght the fre and evacuate their families from Fort McMurray. Most of the evacuees fed to Edmon- ton and Calgary to the south. However, as many as 10,000 escaped to the north to oil sands work camps and facilities of oil sands producing companies, only to be subsequently re-evacuated to the south. In Fort McMurray, the fre destroyed at least 2,400 structures of an estimated 25,000 in the city. The central business district remained intact; however, the ex- tent of smoke damage throughout the city had not yet been assessed. Miraculous- ly, no deaths or injuries were reported to have resulted from the blaze. Canada's Prime Minister Justin Trudeau and Alberta Premier Darby Allen toured Fort McMurray on May 13 to as- sess the extent of the damage. Trudeau credited frefghters with saving much of the city. Following the devastation in Fort Mc- Murray, the wildfre continued to move north and east, threatening worker ac- commodations south of the oil sands production facilities. As many as 8,000 workers were evacuated from the camps, and on May 17, one privately owned camp, the Blacksand Executive Lodge, with 665 units, was destroyed by the fre. On May 19, Atco Gas and Energy re- ported that about 90% of its utilities were restored in the city, and on May 21, the Regional Municipality of Wood Buffalo, which includes Fort McMurray, released a schedule for the phased re-entry of wild- fre evacuees to the city over a period of days beginning June 1. As of May 21, the area destroyed by the fre was estimated at more than 5,000 km 2 , and the fre had edged across the Alberta-Saskatchewan border into Saskatchewan. The Alberta government reported that 1,860 frefghters, 189 heli - copters, 306 pieces of heavy equipment, and 29 air tankers continued to battle the fre. The full economic impact of oil sands production lost as a result of the fre still needs to be assessed. An early estimate by the Conference Board of Canada sug- gested that about 1.2 million bbl/d had been lost over a period of 14 days at the height of the crisis, or roughly C$985 million in lost real GDP for Canada. Oil sands production capacity across the province of Alberta exceeds 2 million bbl/d. On May 21, Suncor, the largest of the oil sands producers, said it was pursuing a staged approach to remobilization, be- ginning with the reintroduction of a small team of essential personnel. Larger num- bers of employees would be mobilized as was appropriate. The earliest date for em- ployees to return was May 23. Syncrude was also pursuing a staged approach to the restart of production, frst assessing and ensuring the safety of its sites, second inspecting all production units and equipment, and third restarting operations in a staged manner. Imperial Oil completed a controlled shutdown of its Kearl oil sands operation on May 9 and returned to limited opera- tion on May 19. Shell Canada suspended operations at its Shell Albian Sands site on May 3 but returned to partial operation on May 9. Oyu Tolgoi to Restart Underground Development Turquoise Hill Resources announced in early May that the boards of Oyu Tolgoi LLC, Turquoise Hill, and Rio Tinto have approved the restart of development for underground mining at the Oyu Tolgoi copper-gold-silver mining complex in southern Mongolia. Oyu Tolgoi LLC is jointly owned by the government of Mon- golia (34%) and Turquoise Hill Resources (66%). Rio Tinto is 51% owner of Tur- quoise Hill and is the project manager. Oyu Tolgoi currently produces from an open-pit mine that came into pro- duction in July 2013. Production in 2015 totaled 202,200 metric tons (mt) of copper and 653,000 ounces (oz) of gold in concentrate. Work on a massive block cave, un- derground development project was sus- pended in August 2013 due to sharehold- er disagreements. Current planning for An aerial view of Highway 63 south of Fort McMurray, Alberta, Canada, shows smoke from the wildfres taken from a CH-146 Griffon helicopter on May 5. (Photo: MCPL VanPutten/Canadian Armed Forces/Handout via Reuters)

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