Insight
New opportunities— new challenges
Renewed optimism in the mining industry is creating new opportunities for junior miners, writes Denver Dreyer.
Recovering commodity prices and diversified ownership of tier one mining companies are creating new opportunities for emerging miners to enter the industry. Though, the biggest challenge faced by junior mining companies today is funding.
Mining is emerging from a recession into a cautiously optimistic incline. Against this backdrop, investors are more likely to back reputable companies and projects in known ore bodies. As the market starts turning on the back of tier one projects and investors, tier two and three miners will benefit from the upswing as market confidence returns. These companies will require solid feasibility studies to make sure their projects are bankable and attract the right level of investment.
They have to get the concept, pre-feasibility, and feasibility studies right up front, backed by a reputable, experienced company. If the work at study phase is not done correctly, the cost of changing at execution phase is very high and could have serious consequences further along the life of the project.
There are a range of appropriate solutions for junior miners. Tier two and tier three companies do not require the same solutions as tier one companies. Engineering is facing an onslaught of unstoppable trends, from artificial intelligence that automates many of the standard design processes, which in turns reduces the cost of design, to integrated digital modelling processes such as Building Information Modelling, which has also been proven to greatly reduce design costs.
There are to tools such as the‘ StepWise’ process that evaluates the viability of a project, and identifies risks and optimisations in a low-cost, quick, and effective way. Along with the challenge of access to funds at the start of the project, junior miners need their projects to release value and put runs on the board quickly. Mine planners need to be experienced in sequencing and designing a mine to first access the parts of the ore body that can be quickly beneficiated to get cash on board, while simultaneously starting on mining the more complex parts of the mine for longer-term returns.
Junior mining companies should be aware that there is a growing environmental consciousness among investors. These investors are increasingly aligning their portfolios with projects that reduce greenhouse gas emissions across their value chains, consistent with the Paris Agreement’ s goal of limiting the global average temperature increase to well below two degrees above pre-industrial levels.
As a company that provides solutions to the world’ s complex energy and resources problems, WorleyParsons is at the forefront of‘ clean’ technologies such as fluidised gas desulphurisation in power plants and other processes that reduce or eliminate certain types of emissions.
Global investors are steering clear of projects that will damage the environment. WorleyParsons can help tier two and three companies meet this challenge and create a more sustainable future by helping them adopt the right technologies to create cleaner power. We can partner with them to offer ethical, sustainable, and clean solutions that will align with investors’ objectives so that they can get their projects off the ground. In a rapidly changing world, unstoppable trends such as localisation, environmental consciousness, and technology will continue to pose challenges to all mining companies.
Denver Dreyer is the CEO of WorleyParsons RSA.
[ 40 ] MINING MIRROR JULY 2018