OPEN PIT GIANTS OF BRITISH COLUMBIA

Open pit mine operators in British Columbia have fine-tuned their cost-cutting skills to an art. Faced with soft metal prices and rising costs, they survive and prosper by their wits as much as by their reserves.

The three base metal producers who spoke with The Northern Miner Magazine remain competitive by improving productivity and quality. At Placer Dome’s Endako molybdenum mine, the emphasis is on quality because its products go directly to customers. At the Gibraltar copper mine, which is also operated by Place Dome, new process technologies reduce overall production costs. At Highland Valley Copper, economies of scale yield cost reductions.

ENDAKO

As a preliminary molybdenum producer, Endako’s fortunes are particularly dependent on the price of its single product. The mine was opened in 1965 and expanded in 1978 and again in 1980. But falling molybdenum prices forced closure in 1982. The property was re-opened in 1986 following a major restructuring and renewed optimism.

“When Endako shut down, the price was $5.00 a pound for drummed oxide,” noted mine manager Gil Calusen. “Now it’s about $2.20 a point.” This is a far cry from the US$32.50/lb molybdic oxide command in June, 1979.

The pit equipment is sized for efficiency. There are three 12 1/4 inch rotary blasthole drills. Just last year, six 190-ton euclid trucks went into service so that the 100-ton and most of the 120-ton fleet could be retired. The strip ratio is declining, and will continue to do so, which also helps trim costs.

In 1991, the mill treated 10.5 million tons of ore grading 1.4% MOS2. That grade is low for a primary producer. Nonetheless, with three-stage griding, conventional roughting, cleaning and scavenging followed by thickening and roasting (and a recovery rate of 82%), almost 1.43 million lb of contained molybdenum was produced.

The three main products from Endako are molybdic oxide for the steel industry, chemically pure molybdenite for the petroleum industry and some ferro-moly alloy and briquettes, also used by steel makers. Because the facility produces an end product, the emphasis on meeting standards is intense. “We have to do things right the first time,” said Clausen. Toward that end, the Endako team is working hard to gain an ISO 9002 quality standard designation.

“This will be a key management tool for obtaining our objectives: to make a consistent quality product for our customers,” he said. Recent improvement in the management system and supervisory training will aid in reaching this goal.

GIBRALTAR

The Gibraltar copper mine is celebrating its 20th year in 1992. The big changes to improve productivity have already been made, but more fine-tuning is still ahead, according to mine manager Bill Myckatyn.

Three pits provide ore: Granite Lake, Pollyanna (which will be exhausted in early 1993) and Gibraltar East. The mining rate is 105,000 tons/day. A comprehensive, computerized mine planning package allows engineers to review and change pit designs.

In the past few years 100-ton haulage trucks have been replaced with 240-t Lectra Haul units. A new P&H 2800 XPA shovel with a 40-cu-yd bucket complements a pair of 23 cu-yd P&H 2300 shovels.

The mill treated 13.1 million tons of ore to produce 64.5 million lb of copper in concentrate during 1991. With a head grade of 0.31% CU, Gibraltar is one of the lowest grade primary producers. Slightly more than 800,000 lb. of molybdenum was also produced.

The SX/EW (solvent extraction, electrowinning) circuit, added in 1986 produced 7.3 million lb of cathode copper last year at much lower cost than that for copper contained in concentrate.

The company says that production costs for copper in concentrate are in the 90cents US range. Included in the production costs are charges of 10cents/lb for smelting and refining. By contrast, the production cost for cathode is about 50 centsUS/lb Cu.

Late last year an independent firm of management and productivity consultants was hired to examine the operation from an outsider’s viewpoint. “This forces you to sit back and take a look at yourself,” said Myckatyn. “The bottom line is that when you thing you’ve got it right, you have to look again.”

Two options with the potential to lower costs are being examined. One would be to increase cathode production; the other would be to expand mill throughput.

HIGHLAND VALLEY

The remarkable mine and mill of Highland Valley Copper is the second largest in the world. The mill is rated at 133,000 tonnes/day. Only Chile’s Chuquicamata at 153,000 tonnes/day is larger.

To take advantage of economies of scale, HVC spent $70 million. In 1988, the flotation circuits, offices and control room of the Highmont mill were moved as two mammoth modules, and grafted onto the Lornex concentrator. The grinding bay was moved in pieces and rebuilt. The mill now houses five autogenous and semi-autogenous griding lines.

Bulk concentrate in produced using large Denver cells and column cells. Molybdenum is separated and leached in heated, pressurized reactors.

“We always try to improve recovery and availability in the mill,” vice-president and general manager Dave McPhais said. “There are always numerous little projects.”

Last year, HVC milled 46.3 million tonnes of ore grading 0.441% Cu to produce 378.4 million lb. of copper in concentrate. Processing also recovered 3.8 million lb of molybdenum.

The Lornex and the Valley pits provide ore. The truck fleet has been upgraded to larger capacity units. Five more 190-ton Caterpillar 789 trucks were recently added, brining their number to 31. The older 170-ton trucks have become obsolete. A system of computerized truck dispatch is being tested to see whether it further improves fleet movement.

The Valley pit boasts two 60-inch by 89-inch semi-mobile gyratory crushers. Both of these are moving this year – one to the pit rim to crush ore from the upper levels, and the other to the pit bottom to reduce materials from that area. Crushed ore is conveyed to the mill more cheaply than it could be transported by truck.

HVC sells its copper concentrate throughout the world – most goes to Japanese and other Pacific Rim smelters. The remainder is sold to European smelters and to agents.

Rising smelter charges do, indeed, make up a substantial portion of production costs. Unfortunately, HVC ore does not appear amenable to SX/EW treatment, so that is not an option.

Rising treating charges are symptom of the global shortage of copper smelter capacity. They have now risen aboe 35 cents US/lb on the spot market, more than double the 15 cents charged just two years ago.

This shortage is expected to continue into 1995 when Kennecott’s Bingham Canyon expansion in the United States is finished and Metallgesellschaft’s new smelter in Indonesia comes on-stream. Environmental cleanup in the Commonwealth of Independent States may result in capacity closure, worsening the shortage.

The only increase in global copper output will have to come from SX/EW plants until new smelting facilities are available. This, coupled with relatively low stockpiles of finished metal, could strengthen copper prices.

Without a doubt the open pit mines in British Columbia must keep developing expertise to remain competitive in the face of global challenges. That they remain determined despite stagnant prices and competition is testament to their resourcefulness.