Try to imagine an orebody containing a metal which, as an alloy, makes steel lighter without sacrificing strength. There is only one other significant producer of the metal, but its deposit is 10 times bigger with a grade four times as high as yours. What’s more, mineralization at your competitor’s deposit is located close to surface, so it can use low-cost open pit mining methods compared to your more costly underground mining. On top of all that, your competitor’s mine is located in a heavily indebted Third World country, so labor costs are about one quarter those of your Canadian mine. You might expect your competitor to have the world market pretty well tied up. No one could compete. Or could they? Teck Corp. manages and owns a 50% interest in a small underground mine in northeastern Quebec that has, for the past 10 years, carved a niche for itself out of just such a global market situation — a market dominated by production from a much bigger mine in Brazil. Teck’s partner in the mine is Cambior Inc.
The mine is the niobec mine, a small 180-employee operation northwest of Chicoutimi in the heart of Quebec. Last year an average of 2,400 tons of dolomitic and calcitic carbonitite rock, containing just 17.2 tons, or 0.72%, niobium pentoxide were treated each day. At a mill recovery rate averaging 62% over 12 months, about 7.5 million lb of dark, fine- grained concentrate, containing about 60% niobium pentoxide, were produced in 1986. About 720 lb of this beachsand-like concentrate is packed into 30-gal drums which are shipped once a month to three clients in the U.S., Luxembourg and Japan. These international steel-makers pay about $3 per lb for the concentrate, generating (in 1985) a total of $22.5 million in net revenues for the joint-venture partners. While Teck operates the mine, Cambior is responsible for marketing the concentrates. The buyers use niobium pentoxide to produce lightweight ferroniobium, used in high- strength, low-alloy steel used to make pipelines, bridges, high-rise buildings, aircraft engines and automobiles. By comparison, the Araxa mine in Brazil, which has been in opera tion since 1961, has a capacity to produce 1,200% more niobium concentrate, or 92.4 million lb of nobium pentoxide per year. This open pit mine is run by cbmm, a Brazilian company. The mine is 47% held by Molycorp Inc. of the U.S. Plant facilities, adjacent to the mine, produce ferroniobium metal which is then sold to metal fabricators on the world market. As a result Brazil dominates world niobium markets with an estimated 85% share. Because manganese, vanadium, molybdenum, chromium and nickel have similar alloying applications, niobium is in constant competition with these metals in numerous applications.
What keeps the Niobec mine profitable, according to mine manager Michel Rodrique, is the quality of its finished product and its low operating costs. Total production costs are about $18 per ton and the mine recieves about $24 for the concentrate it produces from each ton of ore. Since the mine came into production in 1976, it has payed back some $38 million in capital invested and has contributed handsomely to both Teck and Cambior’s balance sheets. In 1985, the mine accounted for about 22% of Cambior’s total revenues and 7% of Teck’s.
Unlike most mining operations in the country, though, milling accounts for about half of total production costs. The unusual, heterogeneous mineralogy of the deposit makes milling a research- and capital-intensive undertaking. Rudy Biss, a metallurgist for Teck was brought to the mine as a “temporary” research scientist. That was eight years ago. Biss is constantly waging a battle with costs and recoveries. The mill operators at Niobec confront new challenges every day. “It’s not like a gold mill where you get 95% recoveries and stay there,” Biss says. Over the mill’s 10-year history, recoveries have bounced around from 28% to 70%.
“We have a number of research projects underway with canmet, the Quebec mineral research lab, McGill University and Laval University,” Biss says. “But the one that shows the most promise is a program to add 2-in cyclones, made by Mozley in the U.K. to our 4-in Kreb units. They should enable us to remove minus-5-micron slimes instead of the present 10- micron size.” Lab work shows this could increase average recoveries by 2%-3%.
Other research projects include changing screens to prevent overgrinding and improve classification of ore and improving the quality of water used in the mill. As it stands now, 90% of the mill’s water is recycled from the tailings pond and only 10% is potable water, pumped in from a nearby river. The present tailings area has capacity for about seven years of milling at current rates.
Looking at it the other way around, underground mining at Niobec is very efficient at $7 per ton. The mining method used is open stope and pillar. A 17-ft-sq drop raise is driven by vertical retreat mining between levels spaced at 150-ft intervals. The remaining ore in the stope is then blasted into the opening in one or two rounds. So far, the largest blast detonated in the mine broke 190,000 tons of ore. About a month ago, modifications were made to the mine’s Atlas Copco in-the-hole drill, converting it to 6 1/2-in holes from 4 1/2 in. The intention is to expand the 10×11-ft blasting pattern to reduce the number of holes needed to break the ore and to reduce the cost of blasting agents. A rubber-tired booster compressor costing about $100,000 was recently purchased from Continuous Mining Systems in Sudbury to operate the large-diameter drill hammer. The new compressor works in conjunction with the mine’s compressed air supply.
The mineralization at Niobec, according to chief geologist Eddy Denomme, is plutonic in origin, consisting of numerous steeply-dipping lenses, varying in size from 40 ft to 200 ft across. One exceptionally large lens measures 1,000 ft across. The lenses occur in two distinct zones. Zone one, discovered in 1967 by Soquem (the predecessor of Cambior) while using radiometric sur vey equipment looking for uranium, is gener ally high grade (0.70% Nb0600022090002O0600025100002) and difficult to treat metallurgically. The main mineralization here is in the form of columbite and black pyrochlore. Zone 2, located to the south, is more sporadic, but it has a slightly lower grade (0.63% NbNb0600022090002O0600025100002) and is easier to deal with, metallurgically. The niobium here occurs mainly as sodic pyrochlore. All the economic mineralization occurs within a relatively large area measuring about 1,800×2,600 ft, making development costs ($3 per ton) the highest single component of total mining costs.
To outline the ore zones, underground diamond drilling is carried out by a Quebec contractor (Kennebec), five years in advance of mining on 50-ft parallel sections. Geological interpretation is done every 10 ft. Metallurgical testing is carried out on core samples two years in advance of mining. So far, millhead grades have stood up well to the geological interpretation. Assays are prepared on site in an X-ray diffraction lab which treats in the order of 6,000 samples every month from both underground drill core and mill process streams.
Access to the ore is provided by a ramp driven at a 20% grade and by a 1,325-ft shaft which was recently extended to allow mining below the 600-ft level. The mine has about 15 years of proven reserves (12.2 million tons at 0.66% niobium pentoxide) to a depth of 1,000 ft. By comparison, the Araxa mine in Brazil has proven reserves of 145 million tons grading 2.5% niobium pentoxide. About five million of the reserve tons at Niobec are in pillars between the 300-ft and 600-ft levels where only six primary stopes remain to be mined. The bulk of the mine’s production in the coming years will be from stopes being developed between two levels at a depth of 700 ft and 1,000 ft. Rock mechanics tests are being conducted to optimize extraction ratios. So far, Teck has taken a conservative approach by making openings only 80 ft across and leaving 80-ft pillars between the open stopes. The largest stope has a maximum unsupported span of 240 ft. Because of the absence of faults, the shallow depth of the deposit and the absence of horizontal stresses, this opening has stood up well. The ore zone, too, is capped by a very competent limestone unit, 250 ft thick.
Access drifts to the stopes are driven with 2-boom Jarvis Clark mjm-21 jumbo drills. Two rounds are taken per shift. A team with a scissor platform is assigned to the bolting of the drifts with 8-ft mechanical bolts. This team also carries out the blasting. Mucking of the rounds is done with a 2.4-cu-yd Jarvis Clark loader and two Jarvis Clark 13-ton trucks. Ore is transported on levels 600 and 1,000 by 6.5-cu-yd Eimco 915 lhd units. When haulage distances exceed 1,000 ft, 26-ton Jarvis Clark trucks are used. Surveyors and geologists make their rounds on modified Kubota tractors. Since there are about 30 pieces of mobile equipment, the maintenance of the underground roadbeds represents a top priority.
The ore is crushed underground to five inches and hoisted to surface in 7-ton-capacity aluminum skips. After being crushed to 2-inch on surface, the ore is conveyed to two 1,500-ton bins. The mill operates on a 7-day schedule while mining is done five days a week.
Be the first to comment on "TECH CORP David vs. Goliath"