Research, Innovation and Improving Productivity - Douglas Morrison, CEMI – the Centre for Excellence in Mining Innovation

08/02/2016

1

through Commercialization

INDUSTRY CRISIS: INNOVATION & PERFORMANCE IMPROVEMENTS

Presented to:

Marcus Evans

February 1-2, 2016

CENTRE FOR EXCELLENCE IN MINING INNOVATION

Preparing for the other side: zero interest rate environment

o Significant Change in funding exploration

o Significant Change in Operational Performance

- productivity, mine environment & decision-process

o Significant Change in Environmental Management

- tailings dam failures, water mgt., final closure

o Significant Change in Community Involvement

Centre for Excellence in Mining Innovation

© CEMI 2016

Industry Crisis: Innovation & Performance Improvements

08/02/2016

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Vision

To be the leading source of innovation for the global mining industry.

Mission

To advance the innovation that the mining industry will use to:

find more ore,

mine ore more effectively and safely,

generate more value from mines,

have a more benign impact on the environment and,

a more beneficial impact on communities.

Established 2007, Not for Profit Corporation, Sudbury, Ontario


© CEMI 2016

National & Global Partnerships


129Projects

28Research

Institutions

Mining

Companies

Governments

SMEs

© CEMI 2016

08/02/2016

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5 Strategic Themes: Industry-focused Programs

VALUEMINE: Integrated Mine Engineering

Increase Mine Productivity, NPV, ROCE & ROI

DEEPMINE: Mining Deep

Reduce Risk: High Rock Stress, High Temperature

FINDMINE: Exploration

Increase Discovery Rate, Reduce Cost

SUSTAINMINE: Environment & Sustainability

Improve Environmental Performance & Social Impact

BIZMINE: Mining Business

Deliver Business Cases & Commercialization Services


© CEMI 2016

© CEMI 2015

Innovation & Prosperity Office

Commercial Agreements - Licenses, Royalties

(CEMI & UDMN projects)

Financial Impact Studies

MICA – self-sustaining investment model

Business case for Innovation

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© CEMI 2015

Top-down Case

NPV vs Tonnes per Day

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

-$100,000

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

0 1 2 3 4 5 6 7

Ton

ne

s P

er

Da

y (

Mo

vin

g A

vera

ge)

Ne

t P

rese

nt

Va

lue

$ (

x 1

00

0)

NPV vs. Tonnes Per Day

NPV - Fan Drill, Bot-Up, 6 Trucks NPV - Parallel Drill, Bot-Up, 5 TrucksNPV - Parallel Drill, Bot-Up, 10 Capsules NPV - Parallel Drill, Top-Down, 10 CapsulesNPV - Parallel Drill, Top-Down, 5 Trucks Average TPD - Fan Drill, Bot-Up, 6 TrucksAverage TPD - Parallel Drill, Bot-Up, 5 Trucks Average TPD - Parallel Drill, Bot-Up, 10 CapsulesAverage TPD - Parallel Drill, Top-Down, 10 Capsules Average TPD - Parallel Drill, Top-Down, 5 Trucks

Conventional

Approach

Innovative Approach

Business Case: Innovation

Improve Performance:

Investment-Return Profile

– up and to the left

Lower capital

Higher NPV

Lower Risk

Innovation ≠ Research; CEMI focuses on Innovation

The Mining Innovation Niche










© CEMI 2016

08/02/2016

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© CEMI 2015

UDMN

BL-NCEIPO

CEMI




CEMI BoD

MIRARCO

Research New Knowledge

Innovation New Business

UDMN BoD

© CEMI 2015

UDMN

BL-NCEIPO

CEMI

Research New Knowledge

Innovation New Business

= New Knowledge

+ Old Knowledge

+ Practical Ingenuity

+ Business Acumen




SME

Innovators

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Innovation & Prosperity Office: 2014-2015

Successful Commercial Agreements

CEMI Canopy – Nordic Mine Steel

Improve Advance Rates

Sample digestion: 2 hours/sample

10 minutes/sample

10x faster + automate (x10) = 100 x

Leading Mining Innovation in Canada


Addressing Industry Challenges:

• MITIGATE TECHNICAL RISK

• DECREASE CAPITAL DEMAND

• IMPROVE RATE OF RETURN

• REDUCE ENVIRONMENTAL

IMPACT

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Addressing Industry Challenges:

• MITIGATE TECHNICAL RISK

• DECREASE CAPITAL DEMAND

• IMPROVE RATE OF RETURN

• REDUCE ENVIRONMENTAL

IMPACT

Leading Mining Innovation in Canada


CORE INNOVATION

Continuous Improvement

ADJACENT INNOVATION

Adopt Existing Technology

DISRUPTIVEINNOVATION

Radically New Approach

BUSINESS PERFORMANCE OBJECTIVE:

200-300% PRODUCTIVITY GAINS

Disruptive

Change

Sustaining

Change

Disruptive

Change

• IMPLEMENTATION & COMMERCIALIZATION (I&C)

• SHORT TERM & LONG TERM PROJECTS

• PROGRAM MANAGEMENT

CEMI Strategic Approach

CEMI’s Approach to Innovation: R&D + I & C

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CORE INNOVATION

Continuous Improvement

ADJACENT INNOVATION

Adopt Existing Technology

DISRUPTIVEINNOVATION

Radically New Approach

Research & DevelopmentTechnical Invention and Design

Conventional Approach to Mining Research

ImplementationSimulation, Pilot-scale Demonstration & Modification

CEMI’s Approach to Mining Innovation

Commercialisation = Operational IntegrationCost: manufacturing & maintenance; Operations: acceptance / incentives;

Legal: patents & licensing; Marketing & Promotion: sales & support

CEMI-IPO-UDMN Focus on Commercialization

CEMI’s Approach to Innovation: R&D + I & C

Stretch CEMI Strategic Approach

© CEMI 2015












Mine Productivity

below 2.5km

$46 million Program

© CEMI 2016

08/02/2016

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Mine Productivity

in extreme conditions

Conditions in Sudbury mines

2.5km below surface

HELP INDUSTRY ADOPT

COMMERCIALLY VIABLE R&D RESULTS

&

ACCELERATE DEPLOYMENT of PROVEN

INNOVATIVE TECHNIQUES & TECHNOLOGIES.

Ultra-Deep Mining Network

28projects

45network

members

$46million in

private & public

funds

Mine Productivity

in extreme conditions

Conditions in Sudbury mines

2.5km below surface


Federal Government

34%

Industry Operations 27%

ResearchOrganizations

14%

Service & Supply SMEs

25%

Total Investment 2015 = $ 7,500,000

2016 = $13,250,000

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UDMN Members


Purpose: Use hydraulic fracturing in underground

in high stress zones to dissipate stress

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Purpose:

Demonstrate possible solution

for localized chilling in deep mines

Hydraulic Air Compressor

Purpose:

Demonstrate a cheap source

of fresh compressed air.

Alternative Power systems:

Electric, Battery, other…


Increase Advance Rates

- multiple or single headings

0

5

10

15

20

25

30

35

40

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Rate

of

Ad

van

ce (

m/d

ay)

Industry Average 2001

Records for advance per day

trend of 1% improvement per year

1968 Target rate

7.2m/day, 2001

3.8m/day, 2011

1% improvement/yr

pneu. mechanised elec-hydr. automation

Current Development Process. Sequential Activities (4 re-entries) 16 hr cycle.

Future Development Process: Parallel Activities (1 re-entry) 10 hr cycle x 2

Activity 1. Mucking process

Activity 2. Face-advance process – face drilling, charging & ground support

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Development Cycle Time: discrete event simulation.

(5m x 5m – 3.5m advance). End-of-shift blasting.

Sequential Activities = 16 hrs (8 hrs lost) < 3.0m/day

3 Canopies = 12 hrs (12 hrs lost) ≈ 3.0m/day

+ Cont. Mucking = 10.5 hrs (x2) = 7.0m/day

Increase Advance Rates

- multiple or single headings


Traditional PPE: hard-hat, boots & coveralls.

Augmented by hearing & eye protection,

+ optional dust protection + occasional comm.

Ultra-deep Conditions: >2.5km, > 50 deg. C

1) Conventional vent approach

- prohibitively expensive

2) Heat stress – work-rest regimes – 20/60 mins

Integrated Suit/Helmet

physical & heat protection + data transfer

Re-direct impact to shoulders (from neck)

Protection: impact/hearing/sight/dust

LED lamps - integrated batteries

Continuous GPS

Full audio/visual telecomms, hands-free.

Cooling (various options) - up to 5°C

Heat resistant clothing.

And a new image for mining in 21st Century.

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LED Cap Lamp and

Integrated Camera

RFID Tracker or

GPS

Wearable

Computers

Heat Stress: work-rest regimes.

Personnel condition monitoring

& intervention communication











Deliver Business Cases & Commercialization Services


© CEMI 2016

Mine Productivity

below 2.5km

$46 million Program

08/02/2016

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Innovation in Waste Management

• Water

• Physical availability or cost to access supply

• Competition from other demand sources

• Changing weather patterns

• Subaqueous Deposition of Tailings

• Dam to retain water and tailings

• Cover to prevent tailings oxidation & dust

• Water Reduction & Recovery

• Development of Paste Tailings – for underground backfill

• Application of Paste Tailings for Surface Deposition

• Development of Densified Tailings Deposition – critical stability issues

• Tailings Paste Backfill

• Tailings Paste Surface Deposition

• Densified Tailings – research into critical stability

issues


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• New Approach to Tailings Management

• Alternatives to Subaqueous Deposition

• Develop effective cover mechanism to prevent oxidation – Acid Drainage

• Physical Covers – difficult long-term maintenance

• Plant Cover – creates a reducing zone & agriculture

• Agricultural Cover Alternatives

• Crops for ethanol fuels

• Crops for food – with barriers to chemical take-up

• Crops for phyto-remediation – metal/mineral recovery

• Secondary Processing of Tailings

• Reduce oxidation potential by encapsulation of acid producing minerals

• Remove acid producing minerals - additional value recovery

• In-pit deposition of tailings and waste – Footprint Reduction


Improve Mine Production Rate, ROCE & ROI





Increase Discovery: Geology, Geophysics & Geochemistry


Reduce environmental impact, Improve social impact



Business Cases, Commercialization Support Services

08/02/2016

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Preparing for the other side: zero interest rate environment

o Significant Change in funding exploration

o Significant Change in Operational Performance

- productivity, mine environment & decision-process

o Significant Change in Environmental Management

- tailings dam failures, water mgt., final closure

o Significant Change in Community Involvement


© CEMI 2016

Industry Crisis: Innovation & Performance Improvements

Thank You

CEMI935 Ramsey Lake Rd

Sudbury, Ontario

P3E 2C6

www.cemi.ca

Contact

Shannon Katary

Director of Marketing and Community Relations

[email protected]

Mobile: 705-507-4842

http://www.cemi.ca/

mailto:[email protected]