Engineering & Mining Journal

APR 2018

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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www.e-mj.com E&MJ • APRIL 2018 71 MINING IN SASKATCHEWAN & MANITOBA than 40 years. The mine produced its first tons of potash in June 2017. In addition, as of December 31, 2016, The Mosaic Co. has C$3 billion in expansion projects underway to increase mining and production capacity—including the world's largest mine shaft project at its Esterhazy K3 mine in Saskatchewan, whose shafts reached the potash area in February 2017. K3 is expected to be the lowest-cost potash mine in Canada, and projected to add an estimated 900,000 metric tons (mt) to Mo- saic's annual potash operational capacity. In response to recent industry changes, such as the Agrium PCS merger and Cam- eco production suspension, Eric Anderson, executive director at the Saskatchewan Industrial & Mining Suppli- ers Association (SIMSA), commented: "There are two aspects: the expansion and development of mines and then the operational side. When the announcements were made for the mining expansions, it was apparent that each company was spending a lot of money – one announced spending over C$6 billion in the next five years – so the budget was already known at the start, making it easy for companies to plan accordingly. When investment is expected to taper off after a certain period of time, companies will not plan their business around the expectation of long-term business with that company. The Cam- eco change hurts a bit because it was unexpected." The significant decline of commodity prices for both uranium and potash over the years has presented significant challenges for Saskatchewan's mining sector. Encouraging the diversification of re- sources mined would be one way to mitigate the risk associated with focusing on just two commodities. Exemplifying the scope for Sas- katchewan's mining sector to successfully pursue resources beyond potash and uranium, gold-focused SSR Mining achieved record pro- duction in 2016 and then again in 2017. Seabee in Saskatchewan is the company's second-largest operation after its Marigold gold operation in Nevada, which accounts for 50% of total production and 50% of operating value. Seabee comprises two underground gold mines, the Santoy mine and the Seabee mine, and produces about 80,000 oz of gold per year. "The Santoy deposit, discov- ered back in 2011 as a part of the broader Seabee land package, just continues to deliver," remarked John DeCooman, vice president business development and strategy at SSR Mining. "We are also doing some preliminary reconnaissance work at Amisk, located on Saskatchewan's Flin Flon greenstone belt, to better understand the geology of this deposit." Following good exploration results, SSR Mining has pursued an expansion at Seabee with greater confidence in its ability to provide ore to the plant. Adverse market conditions and the inconsistency in the recent and anticipated near-term successes of Saskatchewan's established mining companies highlight a need for the province to diversify its resource exploitation to better weather future dips in different com- modity markets. Increasing competitiveness Companies across the mining supply chain are as focused as ever on reducing costs and increasing efficiencies wherever possible. Aside from low commodity prices, Saskatchewan's companies are facing challenges at a regulatory and policy level. "It is a very challeng- ing time for the mining sector, particularly because of increased costs related to proposed carbon taxes, additional regulatory pro- cesses and continually escalating power costs that competing jurisdictions are not faced with," highlighted Schwann. "There is work to be done to ensure the sector re- mains globally competitive while ensuring a continued strong environmental and safety performance." Despite being a historically conserva- tive industry, companies are recognizing a need for new technologies and are becoming more open to the implementation of new so- lutions. Automation technologies are gaining further traction, and Big Data is an increas- ing focus for most engineering firms. "As the demographics change with the retirement of mine founders and third generations joining the industry, uptake of automation is increasing so as to be more globally cost-competitive and gain more recovery out of processes," highlighted Mike Fedoroff, general manager at Hatch. Referencing the advancement of artificial intelligence (AI) and its application to mine data to discern trends for better operation, Fedoroff continued: "The ability to store massive amounts of data coupled with the ability to search and analyze it for trends can be implemented for facility improvements. Uranium and potash are 100% exported commodities, so it is important to improve facilities for increased global cost-competitiveness." Saskatchewan holds all the ingredients for a top destination for mining investment but lacks the synergies to convert its potential into the perfect recipe. Coupled with unfavorable market conditions for its two key resources, it will be an ongoing battle to continue at- tracting significant funds for the foreseeable future. Tim Gitzel, president and CEO, CAMECO

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