Selbaie celebrates 10th anniversary — BP has met challenges with

It has been a decade since Les Mines Selbaie in northwestern Quebec entered production and during those 10 years, the mining operation has milled more than 14 million tonnes of copper-zinc-gold-silver mineralization.

Managed by BP Canada (TSE) with Billiton Metals Canada as its most recent partner, Selbaie celebrated its 10th year on Sept. 5 with a special on-site presentation. The Northern Miner visited the site just prior to the anniversary festivities.

As successful as Selbaie has been, the numbers indicate that it is mining far from a lucrative orebody. The operation could, in fact, be considered a case history that governments and other mining companies contemplating isolated, northern development might study to advantage.

Selbaie’s success shows that although the parent company may have access to unlimited capital, there nevertheless remains an unnerving degree of business risk.

What BP has done to minimize risk in this case is not out of the ordinary but it has been done with flair and with uncommon discipline. These are conflicting working principles to be sure, but then, only a handful of companies market the bulk of the world’s oil. Perhaps these same principles are the uniqueness that helps create such dominance.

Government involvement has had no less an impact. Without the 150 km of the two roads built to Selbaie and financed via a joint federal-provincial program and also the favorable terms on which a 75-km hydro line was constructed, there is little question that the orebodies would have remained undeveloped. The hydro line was paid for by the companies but Hydro-Quebec rebated the capital cost as power was drawn and the line is now owned by Hydro-Quebec.

BP has a 61.1% interest in Selbaie and the company has had a number of partners over the years, including Hudson Bay Oil and Gas, Pickands Mather, Esso Minerals and TransCanada Pipelines. Current partner Billiton has a 38.9% interest. BP itself absorbed the Canadian representative of Selection Trust (Selco) in 1981 and consequently the original exploration of the property was carried out under Selco auspices.

Selbaie’s operation history reflects the diverse characteristics of the orebodies, the initial lack of infrastructure and power, and the canny eye of BP on metal price cycles. Thus, a relatively small high-grade copper deposit was developed as an underground mine and five years later a large, low-grade and primarily zinc orebody was developed as an open pit. The pit started production in late 1986 and its development was clearly predicated on the availability of hydro power (on site as of January that year) and, equally important, the upward trend of zinc prices.

The milling circuit for underground ore is rated at 1,650 tonnes per day and for the open pit 5,000 tonnes per day. Both circuits generally exceed their design capacities and in 1990 actual amounts milled per calendar day were 1,655 tonnes and 6,010 tonnes, respectively.

The copper deposit could stand on its own, even with diesel power. It was relatively shallow and a more or less complete mill was available from Joutel Resources at bargain basement prices.