The challenge with complex ore bodies is typically an economic one but new technologies and approaches can transform C1 costs and make all the difference, writes Paul Dowd.
Article from resourceful: Issue 7, June 2015
Primary production cost or C1 cost is what focuses just about everyone in our industry, with an even greater focus when commodity prices are low. To remain robust and competitive we need projects that are in that lowest 20 percentile of C1 cost.
Basic economics is the reason why virtually all the deposits close to the surface, with high grade, and large tonnages have been mined out decades, if not longer, ago.
For the complex and challenging ore bodies that remain, cost is always a key concern because these resources are often deep, lower in grade and have complexities of included minerals that may be deleterious or difficult to extract. In some cases the minerals present are valuable and can be marketed.
The C1 cost balanced against the output products is what makes an operation viable or not. If secondary minerals can be extracted and sold this adds to the output value that offsets (C1) costs whereas minerals that incur a penalty in the extraction, separation or processing, do the opposite.
In the current industry climate, it takes a lot of effort, equipment, technology and experience to determine how minerals can be won at an economic price.
On the output side – grade, recovery and throughput are vital to the economics and, in particular, recovery presents one of the best opportunities.
In some cases recovery is the low hanging fruit when compared to investing the same amount of capital in an initiative to try to reduce costs.
Take the example of a gold operation in which there is an opportunity to:
- employ either a technology or initiative costing $A1 million that increases recovery by 1 per cent, or
- employing that same capital into initiatives that save 5 per cent of operating costs, (opex).
At, say 500 t throughput per hour, a head grade of 3g/t and a price of $US1150 the ‘payback’ for the recovery improvement is measured in days, whereas the opex option is more than a month. The total value per hour for the recovery option is more than 5 times that of the opex option.
This is not to suggest that initiatives to lower opex are not appropriate and important. This simplified case merely illustrates the need to consider direct and indirect initiatives to lower C1 unit costs and therefore increase margins.
One of the greatest impediments to recovering or liberating minerals can be the amount of energy required to reduce the particle size to allow that liberation.
In the past we have simply added more energy and used brute force to hammer the ore until everything is broken down to a particular size. Energy is an ogre for the industry and can quickly send the cost equation out of balance.
In our current environment we need finessed approaches and there are some exciting ones on the horizon like the high tonnage ore sorter being developed by CSIRO.
The beauty of this sophisticated technology is it uses a number of different spectra to sort the payable material from the large quantities of barren or gangue material. By diverting the gangue before it gets to the ore crusher, large amounts of energy are saved that would have been expended on essentially waste material.
While ore sorting has been around since the early 1970s, achieving success with large rock sizes and high throughput rates has been problematic before now.
It is a great example of a smart technology that could transform the industry’s cost equation and indeed its energy use and environmental performance.
Of course there are technology challenges and opportunities for the downstream extraction and processing in areas such as chemical and bioleaching. But if we can make these big gains in the upstream, such as through the smart ore sorting, then it will greatly improve the effectiveness of the chemical and physical processes downstream.
These are the sort of initiatives that we need to be able to operate at the lower end of C1 costs and continue to be viable in difficult times. Indeed, these are examples of innovations that could make previously uneconomic ore bodies worth mining.