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Mine Life Cycle

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Methods to quantify resource. Methods to valuate resource potential ... Re-vegetating. Water treatment. Intangible Costs. Changing prescriptive guidelines ... – PowerPoint PPT presentation

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Title: Mine Life Cycle


1
Mine Life Cycle
2
Mine Life Cycle Presentation Outline
  • Background
  • Benchmarking in the Mining Industry
  • Phelps Dodge Approach
  • Case Example
  • Questions

3
Mine Life Cycle - Traditional Approach
  • Many Companies have Approached Project
    Development with
  • Methods to quantify resource
  • Methods to valuate resource potential
  • Methods to estimate closure costs
  • Closure plan part of permitting
  • Financial assurance based on permit plan
  • Best plans based on NPV valuation
  • Many Operations have approached end of mine life
    by
  • Occasional to Frequent reviews of closure plans
    and costs
  • Development of final plans near end of life (2
    years or less)
  • Implementation at end of mine life

4
Mine Life Cycle - Background
  • Closure Costs are Skyrocketing
  • Tangible Costs
  • Moving dirt
  • Grooming slopes
  • Re-vegetating
  • Water treatment
  • Intangible Costs
  • Changing prescriptive guidelines
  • Changing stakeholders
  • 22

5
Mine Life Cycle - Background
  • RESULT
  • Annual closure/holding costs are millions of
    dollars
  • Increased holding costs
  • Increased closure costs
  • End of mine life costs significantly different
    than originally estimated
  • Additional burden to other portfolio operations
  • Current cash directed into low-performing
    investments
  • Reduction in competitiveness
  • 22

6
Mine Life Cycle - Background
  • Opportunity -
  • Create Value by
  • Neutralizing End of Mine Life Cycle Liabilities
  • 22

7
Life Cycle Analysis Team Informal Benchmarking
  • Other Mining Companies - Gold
  • Corporate Closure Protocol (Update plan and audit
    annually)
  • Performance metrics / Compensation structure
  • Goal Dollar-for-dollar liability reduction
  • Goal Close one property per year
  • Other Mining Companies - Coal
  • Prescriptive reclamation requirements SMCRA
  • Corporate Closure Protocol (Update plan and audit
    annually)
  • Performance metrics (Acres Disturbed vs. Acres
    Reclaimed)
  • Organizational Structure (Reclamation Planner,
    Continuous Improvement)

8
Mine Life Cycle Informal Benchmarking
  • Universities
  • No comprehensive tools for life cycle valuations
  • No comprehensive programs for life cycle
  • Other companies approaching universities for
    assistance
  • Phelps Dodge Facilities
  • Restoration planning
  • Reclamation activities
  • Water treatment

9
Mine Life Cycle Phelps Dodge Approach
  • Creation of Multi-disciplinary Life Cycle
    Analysis Team
  • Develop a systematic, reproducible process to
    create value.
  • Develop site specific strategic plans to
    manage/reduce liabilities and to capture residual
    asset value.
  • Develop tools to measure environmental risk and
    closure costs in order to minimize potential
    liabilities.
  • Develop Best Practices to minimize potential
    liabilities.
  • Consider Financial, Social and Technical Issues.

10
Mine Life Cycle End of mine Life
  • End of Mine Life Example
  • ARD Water Treatment
  • Value Created by
  • Cost reduction
  • Revenue generation
  • Risk reduction

11
Acid Water Treatment Current Practice Lime
Addition
12
Acid Water Treatment Why Change?
  • Effluent not always acceptable
  • Changing regulations
  • Sludge contains metals
  • Long term sludge management
  • Metals lost no revenue

13
Case Study BioSulfide Technology
ARIZONA
BAGDAD
MIAMI
MORENCI
AJO
BISBEE
SIERRITA
14
Bisbee Copper Queen
  • BioteQ Environmental - Phelps Dodge Joint Venture
    (Copreco LLC)
  • Plant Commissioned - October 2004

15
Phelps Dodge Copper Queen BioteQ Environmental
Project Location
16
BioSulfide Process Flowsheet
17
Copreco Facility
18
Design and Current Operating Information
19
Operating Cost Breakdown
  • COST ITEM of TOTAL
  • Acetic Acid (Hydrogen donor) 42.0
  • Sulfur 20.0
  • Labor (ops maint) 16.0
  • Power 11.0
  • Bioreactor Nutrients 3.0
  • Flocculant 3.0
  • Soda Ash 2.0
  • Operating Maint Supplies 1.0
  • Nitrogen 1.0
  • Fresh Water Addition 1.0
  • TOTAL 100

20
Conclusions Bio-Sulfide Technology
  • Metals can be removed to produce very low or
    effluent dischargeable concentrations in water
  • Metal recovery and sales offset treatment costs
  • Reduction or elimination of sludge production
  • Better quality of treated water
  • Bio-Sulfide plants can stand-alone or be
    integrated with other treatment processes

21
Mine Life Cycle -
  • CHALLENGE Two Fold
  • DESIGN AND MANAGE FOR END OF MINE LIFE FROM
    CRADLE TO GRAVE
  • CHANGE LIABILITIES INTO ASSETS
  • 22
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