Insight
New opportunities — new challenges
Renewed optimism in the mining industry is creating new opportunities for junior miners , writes Denver Dreyer .
Recovering commodity prices and diversified ownership of tier one mining companies are creating new opportunities for emerging miners to enter the industry . Though , the biggest challenge faced by junior mining companies today is funding .
Mining is emerging from a recession into a cautiously optimistic incline . Against this backdrop , investors are more likely to back reputable companies and projects in known ore bodies . As the market starts turning on the back of tier one projects and investors , tier two and three miners will benefit from the upswing as market confidence returns . These companies will require solid feasibility studies to make sure their projects are bankable and attract the right level of investment .
They have to get the concept , pre-feasibility , and feasibility studies right up front , backed by a reputable , experienced company . If the work at study phase is not done correctly , the cost of changing at execution phase is very high and could have serious consequences further along the life of the project .
There are a range of appropriate solutions for junior miners . Tier two and tier three companies do not require the same solutions as tier one companies . Engineering is facing an onslaught of unstoppable trends , from artificial intelligence that automates many of the standard design processes , which in turns reduces the cost of design , to integrated digital modelling processes such as Building Information Modelling , which has also been proven to greatly reduce design costs .
There are to tools such as the ‘ StepWise ’ process that evaluates the viability of a project , and identifies risks and optimisations in a low-cost , quick , and effective way . Along with the challenge of access to funds at the start of the project , junior miners need their projects to release value and put runs on the board quickly . Mine planners need to be experienced in sequencing and designing a mine to first access the parts of the ore body that can be quickly beneficiated to get cash on board , while simultaneously starting on mining the more complex parts of the mine for longer-term returns .
Junior mining companies should be aware that there is a growing environmental consciousness among investors . These investors are increasingly aligning their portfolios with projects that reduce greenhouse gas emissions across their value chains , consistent with the Paris Agreement ’ s goal of limiting the global average temperature increase to well below two degrees above pre-industrial levels .
As a company that provides solutions to the world ’ s complex energy and resources problems , WorleyParsons is at the forefront of ‘ clean ’ technologies such as fluidised gas desulphurisation in power plants and other processes that reduce or eliminate certain types of emissions .
Global investors are steering clear of projects that will damage the environment . WorleyParsons can help tier two and three companies meet this challenge and create a more sustainable future by helping them adopt the right technologies to create cleaner power . We can partner with them to offer ethical , sustainable , and clean solutions that will align with investors ’ objectives so that they can get their projects off the ground . In a rapidly changing world , unstoppable trends such as localisation , environmental consciousness , and technology will continue to pose challenges to all mining companies .
Denver Dreyer is the CEO of WorleyParsons RSA .
[ 40 ] MINING MIRROR JULY 2018