Industry NEWS

22 March 2019

Sierra suspends operations at Yauricocha mine following illegal strike

Canadian miner Sierra Metals has suspended operations at its Yauricocha project in Peru following an illegal strike, which saw two-thirds of the employees down tools.

The strike was organised by members of the Union of the Mine and Metallurgical Workers of Minera Corona, who have objected to changes in the contractors hired as part of the mine’s operations, according to Sierra. The company also reports that on Tuesday the Peruvian Ministry of Labour declared the strike illegal, after being informed by the union of its intention to strike.

Sierra shut down all mining and milling operations at the mine over concerns that it could not operate without such a significant percentage of its workforce. The mine is the company’s largest operation in terms of total production, and is a significant producer of gold, silver, copper, lead and zinc. It has proven and probable reserves of 8.9 million tonnes.

“Precautions have been taken to safeguard all employees as well as the plant, property, and equipment during the strike,” said Sierra president and CEO Igor Gonzales. “Management believes that this strike action will not materially affect the Company’s annual production guidance or mine budget.”

Under Peruvian law, a strike can only be called legally if direct negotiations between the company and its workers have broken down, and if the original dispute was in defence of the labour rights or the socio-economic interests of workers. It is unclear how the change to contractors will affect the interests of the workers, and there has been no record of talks between Sierra and its workers prior to the strike.

However, a US report found that in 2006, 65 of the 67 strikes declared in Peru were illegal, so there is a precedent for unsanctioned strikes.

Sierra will hope the strike will be resolved quickly, as Yauricocha remains an important part of its long-term plans. The mine has been in continuous operation since 1948, and despite fears that it would only have a lifespan of a further eight years, Sierra has continued to develop the mine’s infrastructure.

In February this year, the company received approval to expand the mine’s tailings storage facility, which is expected to increase the mine’s output by 20%.

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22 March 2019

Anglo American to invest $162m into Australian mine rehabilitation

Anglo American has announced plans to invest more than $162m to rehabilitate its mining operations in Australia over the next five years.

The company has five metallurgical coal mines in Central Queensland, alongside two open-cut and three underground mines.

Anglo American will spend around $83m on rehabilitation at the open cut Dawson Mine near Moura, and another $40m at the Capcoal open cut mine near Middlemount.

Anglo American Metallurgical Coal business CEO Tyler Mitchelson said: “Over the next five years (2019-2023), we’re investing more than $162m on industry-leading rehabilitation activities across our five mine sites. We continue to innovate and pursue best practice mine rehabilitation across our business, and this approach is already delivering outstanding results.

“Anglo American’s Dawson Mine has been leading the way in innovative rehabilitation approaches, including the successful rehabilitation of an area previously containing void highwall, and use of rehabilitated land for cattle grazing.”

Operators at the Dawson Mine collaborated with environmental monitoring web-mapping platform emapper, the Federal Government Growth Centre, and other miners and industry suppliers on a new METS Ignited (Mining Equipment, Technology and Services) project to map rehabilitation areas aerially.

The project collected environmental monitoring data including landform geometry, erosion and vegetation using drone technology.

After processing data and comparing information to pre-determined rehabilitation performance standards, all metrics are uploaded to the secure platform, allowing on-demand access to data visualisation, reporting and data collaboration and sharing.

Queensland Resources Council (QRC) chief executive Ian Macfarlane said: “Last year, the QRC worked with the Palaszczuk Government on significant reforms to the system for the rehabilitation of mines and the development of a financial provisioning scheme for the whole resources sector in Queensland.”

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22 March 2019

Barrick Gold ends underground development at Golden Sunlight mine

Barrick Gold has ceased new underground development at its Golden Sunlight mine located in Jefferson County in southwestern Montana, US.

The company noted that the Golden Sunlight mine has been approaching the end of its operational life in recent years and its remaining gold reserves are nearly depleted.

Barrick’s latest move comes following a detailed review of the mine, which revealed that the operation only has limited access to existing mining areas.

The company has scheduled a final mill run to process gold ore for May this year.

Barrick said in a statement: “Our workforce and community partners’ interests remain a priority and we will continue with responsible environmental stewardship and management of our social and economic commitments as we work through this evaluation process.

“In the coming months, Barrick will review the findings from these different work streams and determine the path forward for the operation, at which time a further update will be communicated.”

Underground and surface exploration drilling at the Golden Sunlight mine will continue and focus on the southern extension of its vein. The company will complete metallurgical test work and a structural geological model associated with the APEX target.

Barrick will also assess the potential to reprocess historic tailings and plans to carry out hydrological and geochemical studies to support ongoing water treatment and reclamation work at the Golden Sunlight mine.

The proven and probable gold reserves at Golden Sunlight are estimated at 20,000oz, gold resources at 164,000oz and inferred gold resources at 84,000oz.

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21 March 2019

Australian Labor Party commits to A$46m mining technology hub

The Australian Labor Party has reaffirmed plans to invest A$46m into a mining technology hub in the western city of Perth, should it win this year’s federal election.

The proposal was first discussed in February, and confirmed by leader Bill Shorten yesterday at a rally in Perth ahead of this year’s elections. Shorten said that should his party win the election, it would fund half of the Australian Future Mines Centre, with the other half of funding coming from state governments, universities and private companies.

The project will be completed in association with the Australian Academy of Sciences and the Commonwealth Scientific and Industrial Research Organisation (CSIRO). The centre’s proposed goals largely align with the recommendations set out in the Resources 2030 Taskforce, which was created by the government in 2018 to ensure the sustainability of the Australian mining sector.

One of the taskforce’s key goals is to reach mineral deposits buried at depths that are difficult to mine, or even observe. The government’s UNCOVER initiative aims to access these deposits, and has already produced technologies such as a predictive database used to understand the Earth’s mineral composition.

“Because two thirds of potential deposits reside under deep cover, we need to pair technology like machine learning and big-data analytics with new scientific approaches to discovering these deposits which reside deep below the surface,” said Jason Clare, a member of the Australian House of Representatives and shadow minister for trade and investment.

CSIRO itself has made considerable investments into new technologies that could view these deposits. Earlier this year, the organisation provided A$3.5m to a start-up using drones to map environments humans cannot safely reach and the centre’s supporters hope the new facility will encourage further technological developments in Australian mining.

The centre will also focus on training and education, providing 50 scholarships in mining engineering for students in Western Australia, each worth A$20,000. The scheme will also ensure half of the scholarships are offered to women.

The news is a welcome positive development for the Australian mining sector, following reports that the last six residents of asbestos-mining town Wittenoom are being forced to leave their homes by the Western Australia state government. Over 2,000 people died in the town due to asbestos-related diseases, and the remaining residents who refused to leave have recently had their properties compulsorily acquired by the government.

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21 March 2019

AMCU accepts proposed deal to end Sibanye-Stillwater strike

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Mining safety whitepaper

The Association of Mineworkers and Construction Union (AMCU) has announced that it has accepted a proposed deal to end its strike action at Sibanye-Stillwater’s operations in South Africa, which have been ongoing since last November.

The AMCU went on strike after failing to agree a new wage deal with the miner, unsatisfied at salaries for Sibanye-Stillwater gold miners which can be as low as R6,900 ($493) a month. The union has pushed for higher wages and assurances about the safety of the company’s operations, following a poor safety record at Sibanye-Stillwater mines, where 71 people died in 2018.

The new proposal was put forth by the Commission for Conciliation, Mediation and Arbitration (CCMA), an independent body that works to resolve workplace disputes. The CCMA mediated a summit between AMCU and Sibanye-Stillwater representatives. The final terms are broadly in line with the AMCU’s demands, offering an average salary increase of R5,000 ($352) a month and benefits including financial compensation for those affected by deaths at the miner’s operations.

While the AMCU had been hoping for a salary increase of R9,300 ($655) a month, to bring gold miners’ salaries in line with those in other industries, such as platinum mining where an entry-level miner can expect to earn R11,000 ($787) per month, union leaders have backed the deal following support for its terms from union members.

“AMCU leaders conducted mass meetings on Friday 15 March 2019, and at these meetings members accepted the proposed settlement by the CCMA in broad terms, before mandating the negotiating team to engage further with Sibanye-Stillwater on the implementation and method of payment, as well as the issue of back-pay,” said the union.

However, a ruling made by South Africa’s labour court this week could render the CCMA proposal obsolete. Last year, Sibanye-Stillwater reached a wage settlement with members of the National Union of Mineworkers, UASA and Solidarity, other mining unions in South Africa. As the AMCU strike dragged on, many of their members joined the other groups.

In December, membership of the other three unions collectively accounted for more than half of all South African miners, allowing Sibanye-Stillwater to claim that the majority of the country’s workforce had agreed to its wage deal. Under South African law, this would allow the company to impose its wage deal on the remainder of its workers. On Wednesday, the country’s labour court ruled that Sibanye-Stillwater is legally entitled to extend this deal to all of its workers, including striking AMCU members.

“We are extremely pleased with the ruling provided by the labour court,” said Sibanye-Stillwater CEO Neal Froneman. “It provides a clear path forward to resolving the ongoing strike in a manner which does not compromise our values or undermine our other stakeholders.”

The Sibanye-Stillwater deal lasts for three years, and sees monthly wages increase from R8,712 ($614) to R10,237 ($722), an total month increase of R925 ($65). However, this final salary is still lower than the figure of R11,900 ($839) that workers would receive if the company were to agree to the CCMA proposal. It is still unclear how the dispute will be resolved.

21 March 2019

Aeris Resources offers to acquire Glencore’s CSA mine for $575m

Copper producer Aeris Resources had made an offer to acquire Glencore’s CSA copper mine in New South Wales in a deal valued at $575m.

Aeris said that the company is yet to finalise late-stage discussions, which are still ongoing, and documents related to the transaction.

The current offer consists of a mix of cash of around $525m and Aeris shares that are worth around $50m, in addition to a royalty payable to Glencore.

Aeris said in a statement: “Whilst Aeris provides this information to ensure that Aeris shareholders are informed as to the current status of discussions around the offer, it is important to note that there is no guarantee that the potential acquisition will proceed.

“Additionally, in the event that a formal agreement for the potential acquisition is entered into, it will likely be subject to a number of conditions including required shareholder approval.”

Aeris aims to fund the deal through a combination of debt, between $250m and $300m; equity capital raising, between $185m and $240m; and a streaming arrangement, where the company would sell copper and silver produced at the mine directly to Glencore, which is estimated to be worth up to $40m. However, Aeris has not yet finalised these funding arrangements.

The company is currently holding late stage discussions with major shareholder Special Portfolio Opportunity V, a subsidiary of a fund managed by PAG, Orion Mine Finance and others.

RBC Capital Markets and Macquarie Capital will manage the equity component of the fundraising.

Glencore, which had put the mine up for sale in 2015, withdrew it from the market in 2016 as the company could not agree to a deal with potential buyers, Reuters reported.

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21 March 2019

BHP and Luminex sign joint venture for Tarqui project in Ecuador

A wholly owned subsidiary of BHP has signed a $82m earn-in and joint venture (JV) agreement with Luminex Resources for the latter’s Tarqui 1 & 2 mining concessions in Ecuador.

Luminex and BHP have entered into a non-binding letter of intent (LoI) for the proposed agreement.

Under the agreement terms, BHP will have the right to earn up to a 70% ownership interest in Tarqui by investing an aggregate amount up to $75m in exploration and paying up to $7m in cash to Luminex.

Luminex will work exclusively with BHP to negotiate and complete a binding agreement for the partnership at the Tarqui project over the next three months.

Luminex Resources CEO Marshall Koval: “Luminex is excited to advance Tarqui with an organisation like BHP that has the opportunity and commitment to supplying future global copper demand and a strong focus on responsible development in Ecuador. Tarqui is an exciting copper prospect that BHP and Luminex will pursue over the coming years.”

Under the LoI, BHP will have the right to earn a 51% interest on completion of $25m of exploration expenditures and $2.4m of cash payments to Luminex within the fourth year of the signing of the agreement.

The company will also earn an additional 9% interest if it contriubutes $35m towards an exploration project and makes $7m of cash payments to Luminex within the sixth year of the signing of the agreement.

BHP will earn the final 10% after it invests $75m in exploration.

The company will have the right to assume management of the JV company and the exploration programme for Tarqui.

Entering into the JV agreement and completing the transactions are subject to customary conditions, approval by Luminex’s board of directors and receipt of all governmental and regulatory approvals.

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21 March 2019

Two autonomous trucks collide in heavy rain at BHP’s Jimblebar hub

Two autonomous trucks collided at BHP’s Jimblebar mining hub in the Pilbara region of Western Australia on Saturday, with a company spokesperson claiming heavy rainfall made the mine’s roads slick, causing a truck to slide into the other.

One vehicle was travelling at 27km/h and carrying ore deposits at the time of the accident, while the other was unloaded, and moving at 14km/h. No workers were present at the time of the incident, so there were no injuries.

The Department of Mines, Industry Regulation and Safety (DMIRS) of the Western Australian Government published a code of practice governing autonomous mining in the state in 2015, but the document gives no guidance for best practices in heavy rainfall, other than a general statement on suspending operations “during adverse weather”.

DMIRS director of mine safety Andrew Chaplyn told ATN that BHP had not limited the speed of the trucks due to the unexpected rainfall, and that the department has issued the mine with an “improvement notice” to ensure a similar incident does not happen again. Both the DMIRS and BHP are conducting investigations into the incident.

The accident follows last year’s forced derailing of a runaway BHP iron ore train in the Pilbara, and is another setback to the companies developing transport infrastructure. In November 2017, the Jimblebar hub became the first BHP site to exclusively use autonomous vehicles. The company is aiming to remove human drivers from potentially dangerous situations, and improve operational efficiency. BHP claims that the use of driverless trucks has reduced operating costs by 20%, but the weekend’s incident is a reminder that the vehicles cannot ensure a perfect safety performance.

The incident also comes at a time when occupational safety performance is declining across Western Australia. The DMIRS reported 256 serious injuries and one fatality at work in the period from July to September 2018, the most recent statistics on record. The figures also reveal that that state’s workers suffered 694 serious injuries at work in the first nine months of 2018, compared to 627 in the same period in 2017.

The state also saw three deaths in the first nine months of 2018, compared to none in the same period of 2017, and just one in the whole of 2017.

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