Is the mining industry a risk business?

Metals will not run out of the world, but their mining and refining has changed and will continue to become more laborious as the metal content of the ores decreases. This means that more different metals are being extracted from primary ore and cost-effective alternatives to ore processing are being sought due to low value metal elements. Mining companies are constantly looking for new ore processing methods. However, the new processes bring with them process risks that can be managed with careful process laboratory and “pilot-scale” test runs. Ore mining methods are also being developed towards more cost-effective, automated and sustainable technology solutions.

What is required of the mining industry to make mines not only profitable but also sustainable?

However, mining cannot be based solely on optimizing operating costs and maximizing economic benefits over the life cycle of a mine. Indeed, environmental requirements for mines have clearly tightened in the 21st century. The tightening has included both stricter permit limits for existing pollutants and completely new emission limits for harmful compounds. In addition, the monitoring requirements of mining operators have been significantly tightened. New permit decisions may include an obligation to monitor nearly a hundred contaminants.

Also, significant tightening of the standard level for engineering work carried out for an environmental permit, e.g., due to the European Union's Water Framework Directive has had a significant impact on the operating environment of the mining industry. A permit application including only general information of the project for which the authority issues an environmental permit with permit conditions is no longer sufficient for the licensor. The licensing authority currently requires very detailed plans for both the production processes to be used and the management of water and air emissions.

The complexity of a mining project requires strategic planning

The complexity of mining projects is significant and the overall evaluation of projects is extremely difficult. Thus, early-stage mining development projects should weigh a number of different concepts to find the optimal alternative for project implementation. The economies of scale brought by large-scale production may no longer be the only solution, but in the future, the option will also be to limit the size of the project in environmental terms. A smaller implementation solution for a mine may not aim for the best financial profit, but it has other advantages. The effects of mining projects should therefore be considered beyond the minimum requirements of environmental permits.

The engineering and definition of the early stage will significantly reduce the risks of the mining project

Complexity also means that there are remarkably more expectations and needs for the detailed engineering of early-stage mining projects. In the development of mining projects, considerably more time and money are currently being invested in both the development of the production process and the planning of water and air emissions management in the early stages of the project than, for example, ten years ago. It is not enough to know only exploitable metals contained in the ore. You must also be aware of the substances in the ore that are harmful to the environment. It is not enough to separate the valuables from the ore. It is necessary to know how other substances behave in the further processing process. It is not enough to apply for an environmental permit in general. You should be able to explain in a very detailed way how the production process works and how water and air emissions are controlled.

The trend is welcome. Careful definition of the early stage of a project significantly reduces all material risks. Process risk is reduced when the functionality of the process has been established and environmental risk is controlled when the process and its side effects are known and taken care of. Risk management is essential, as a mining project is of no value if precious metals cannot be economically separated from the ore. The project is of no value even without an environmental permit. Mining project investors know this and therefore projects with too much risk will ultimately not be implemented.

Written by:

Jyrki Noponen
Technology Manager, Process Industries Finland, AFRY

The article was originally published as a commercial article in a Finnish magazine Kauppalehti.