Page 29 - Introduction to Mineral Exploration

12 C.J. MOON & A.M. EVANS

plan in place that details and costs the pro- struction). Some of these stages will overlap,
posed closure strategies. Significant expend- but this is unlikely to reduce the time involved
iture could be incurred with clean up and and it can be expected that around 12 years will
remediation of mining and smelting sites, the elapse between the start of the exploration pro-
costs of employee retrenchment, and social and gram and the commencement of mine produc-
community implications. tion. In a number of cases the lead-in time has
The exploration step can be subdivided as been less, but this has usually been the result of
follows: the involvement of favorable factors or a delib-
(i) Study phase: choice of potential target, erate search for deposits (particularly of gold)
study of demand, supply, commodity price which would have short lead-in times. Further
trends, available markets, exploration cost, information on costs of mineral exploration
draw up budget. can be found Tilton et al. (1988) and Crowson
(ii) Reconnaissance phase: will start with a (2003).
literature search and progress to a review of
available remote sensing and photogeological
data leading to selection of favorable areas, ini- 1.4 STRUCTURE OF THE MINING INDUSTRY
tial field reconnaissance, and land acquisition,
probably followed by airborne surveys, geolo- The structure of the mining industry changed
gical mapping and prospecting, geochemical greatly in the 1990s and early 2000s with the
and geophysical surveys, and limited drilling decline in government-funded mineral explora-
(see Chapter 4). tion, particularly in centrally planned eco-
(iii) Target testing: detailed geological map- nomies of central Europe and the former USSR,
ping and detailed geochemical and geophysical and the merging and globalization of many
surveys, trenching and pitting, drilling (see mining companies. The producing section of
Chapter 5). If successful this will lead to an the mining industry was dominated, in 2002,
order of magnitude study which will establish by three companies mining a range of com-
whether there could be a viable project that modities (BHP Billiton, Rio Tinto, and Anglo
would justify the cost of progressing to a pre- American) and by Alcoa, an aluminum pro-
feasibility study. ducer (Fig. 1.9). Other major companies con-
(iv) Pre-feasibility: major sampling and test centrate on gold mining (Newmont Mining,
work programs, including mineralogical ex- Barrick Gold, and AngloGold Ashanti),
amination of the ore and pilot plant testing to platinum (e.g. Anglo American Platinum and
ascertain the viability of the selected mineral Impala Platinum), and nickel production
processing option and likely recoverability (see (Norilsk, Inco). One major copper-producing
Chapter 11). It evaluates the various options company, Corporacion Nacional del Cobre
and possible combinations of technical and (Codelco), is not shown as it is still owned by
business issues. the Chilean state. Other smaller mining com-
(v) Feasibility study: drilling, assaying, panies produce at regional or national levels.
mineralogical, and pilot plant test work will Junior companies are a major feature of the
continue. The feasibility study confirms and mineral exploration industry. They are based
maximizes the value of the preferred technical largely in Canada, where more than 1000 com-
and business option identified in the pre- panies are active, in Australia, and to a lesser
feasibility study stage. extent in the USA and Europe. Their strategies
It is at the end of the order-of-magnitude are varied but can be divided into two sub-
study that the explorationists usually hand groups: one is exclusively involved in mineral
over to the mining geologists, mineral proces- exploration and aims to negotiate agreements
sors and geotechnical and mining engineers to with major companies on any deposits they dis-
implement steps 1 to 9. Typical time spans and cover and the other to retain at least a share of
costs might be: stage (i) 1–2 years, US$0.25M; any discovery and to control the production of
(ii) 2 years, US$0.5–1.5M; (iii) and (iv) 2–3 any discovery (MacDonald 2002). The depend-
years, US$2.5–50M; (v) 2 years, US$2.5–50M ence of these small companies on speculative
(excluding actual capital cost for mine con- activities has led to some taking extreme risks