Obtaining comprehensive ore body knowledge should not be seen as a cost, it is an investment that has the potential to avoid company-destroying mistakes, says mining and minerals processing expert Dr John Steen.
He said the mining industry was struggling to attract new investment capital because it had a history of poor returns to shareholders.
Recent analysis showed that much of this poor performance was attributable to write-downs on capital projects because of inadequate investment in gathering information about the orebody.
While the industry paid a lot of attention to gathering data such as reserve size and grade to prove the business case for a mine, the gathering of geological data as insurance against a large downside risk event was rare.
Dr Steen, the Director of the Bradshaw Research Initiative in Minerals and Mining at The University of British Columbia, and the EY Distinguished Scholar in Metals Futures, will discuss the topic during IMDEX’s Xploration Tech Symposium, a highly anticipated online conference to be held on January 12 and 13 featuring a range of international speakers.
The two-day symposium, an annual event usually held in Vancouver, brings together experts at the forefront of innovation in the mining and exploration industries and will examine the latest in new technologies, tools, and advanced analytics.
Dr Steen said much of the capital flowing to explorers and miners now was recycled, with investors shifting money around the industry by selling out of companies and projects and into other companies and projects. This was a particular problem in the junior mining sector.
“What the industry needs to meet commodity demand over the next 30, 40 years is new capital; we desperately need new capital,” Dr Steen said.
“Across all mined commodities, the places we have to go to and the ore bodies we have to try to find, are getting more and more difficult.
“What that means is that the risks associated with developing both greenfield projects and brownfield projects are escalating. The best way to ensure against some of those big writedown risks is investing more in ore body knowledge.”
Dr Steen said the development of ore body technology was one of the fastest growing sectors in mining.
“We’ve squeezed the productivity lemon as hard as we can,” he said. “We’ve tried to extract everything from the milling operation, we’ve automated our haul trucks.
“The big frontier now is for geology. In the past that was something that was always going to be a black box but with the new technology, the analytics and the AI that is coming through we really don’t have an excuse to proceed with projects that shouldn’t have gone ahead or developing a mine project in the wrong way.”
He said an analysis of poor returns from companies on the Toronto Stock Exchange showed that most poor returns came from “company destroying” writedowns because project risk had not been managed properly.
New tools were starting to make the job of ore body assessment easier.