Advancing Together With Barrick Gold

Mining Gold mining’s energy challenge

"Our energy costs are mounting while gold grades are declining. We need to start doing things differently."

As gold mining companies dig ever deeper to unearth new deposits, creative minds are looking to technology and innovation to solve infrastructure problems and ensure the industry remains economic in any gold-price environment.

Reflecting a broader industry trend, Barrick’s energy costs rose from about $1 billion a year in 2010 to almost $1.5 billion in 2013. Meanwhile, the price of gold fell 28 percent in 2013, weighing on profitability. “We’re moving huge amounts of material around bigger operations, so our energy costs are mounting while gold grades are declining,” says Peter Kondos, Senior Director of Barrick’s Strategic Technology Solutions (STS) group. “We need to start doing things differently.”

The STS group is tasked with developing practical solutions to significant operational challenges. Kondos, who holds a doctorate in hydrometallurgy, started the group in 2005. Including the Barrick Technology Centre in Vancouver, the group now has 30 members, with expertise in areas such as processing, energy, pyrometallurgy and environmental science. “On the practical side, we find solutions to problems and help implement them,” Kondos says. “On the conceptual side, we’re trying to unlock mining’s new frontiers for future generations.”


Mining data

Innovation hasn’t traditionally been a top priority in gold mining, Kondos says. Gold-bearing ore is still extracted in largely the same way that it was twenty years ago. This in part reflects the fact that the price of gold increased for 12 straight years through 2012. As a result, innovation wasn’t on the agenda, production growth was. But as the cycle turned and the gold price fell, companies began conserving costs and started thinking about how they mine.

To that end, Barrick is changing the way it collects and analyzes data from its mines. Russell Blades, Senior Manager with the STS group, says the company compiles reams of energy-usage data each year, but most of it is not analyzed. Blades is overseeing a project that will allow energy data from mines to be shared in real time with the STS group in Toronto. This will allow the group to benchmark the data, pinpoint trends and compare best practices across mines. “We can analyze information, explain what we found and help the mine sites improve their operations from an energy standpoint,” Blades says.

Effective data analysis will translate into action items that could potentially save hundreds of millions of dollars. In addition, this process will make it easier for the STS group to introduce new best practices from around the industry.


Everything old is new again

One area that the STS team is evaluating is how it moves ore and other heavy materials around mine sites. “As you move more and more material, it becomes important to look at how you’re moving it because this impacts bottom-line costs, greenhouse gas emissions and everything else that’s related to use,” Blades says. “A key question that we are looking at is whether haul trucks are the best way to move material from point A to point B.”

The short answer is yes, for now. The STS group is looking at ways to bridge the gap between technologies used today, like haul trucks, while at the same time researching more efficient ways of doing things to ensure Barrick survives and thrives for generations to come.

Kondos and his group, for instance, are spearheading a project to retrofit Barrick’s existing fleet of haul trucks in Nevada with dual-fuel engines that run on diesel and liquid natural gas (LNG). LNG is less expensive than diesel in North America and has a smaller carbon footprint which will help Barrick’s bottom line and make its operations greener. The project would be initially rolled out at the company’s Goldstrike and Cortez mines, which are located near a natural gas pipeline, making it easy and affordable to transport LNG to the sites. Furthermore, Barrick is pursuing a new business model whereby they would invest no capital into the project for the truck conversions and the onsite LNG infrastructure. Instead, a third party would absorb these capital costs and roll them into the LNG commodity price they charge Barrick.


Digging deeper for the future

Longer term, the STS group believes the use of haul trucks will be supplanted by more cost-effective transport technologies. “Haul trucks are getting bigger and bigger,” Blades says. “And it’s important to understand that you’re not just using energy to move ore, you’re using it to move those bigger and heavier trucks. That increases your fuel costs substantially.”

A more efficient and cost-effective way to move material is to use conveyor belts or “rail-veyors,” an automated haulage system that runs on a light rail track. Other companies, such as Vale, are experimenting with rail-veyors, produced in Canada by Rail-Veyor Technologies Global, and the iron and coal industries have used conveyors to transport ore for years.

These electrically-powered systems are far less energy intensive than haul trucks, Blades says. Haul trucks, for instance, use approximately 0.9-1.2 kilowatt-hours per tonne per kilometer (kWh/tonne-km), he says. By contrast, rail-veyors use 0.2-0.3 kWh/tonne-km and conveyors use approximately 0.5-0.7. In other words, a rail-veyor system uses about 76 percent less energy per kilowatt hour than haul trucks to move the same amount of material the same distance. In addition, rail-veyors and conveyors have the ability to regenerate energy during downhill cycles and put this power back into the system. “These are technologies that we’re starting to take a much closer look at,” Blades says, adding that the up-front costs of such systems are more than worth it, as the investment will lower energy costs, extend mine lives and shorten lead times to complete new projects.

The STS group is targeting a 10 percent reduction in energy use by the company within five years, Kondos says. Based on Barrick’s 2013 energy costs of almost $1.5 billion and current mine portfolio that would translate into a $150 million reduction by 2019. “We believe it’s a modest target,” Kondos says.

While some may worry that the introduction of new technologies like rail-veyors and conveyors will eliminate haul-truck driver and maintenance jobs, Kondos argues otherwise. “We’re not changing what we do now,” he says. “We’re talking about expansions that go much deeper into an open pit or new projects in remote, high-altitude locations. We need to look at these technologies in those instances. Otherwise, it will be too costly to mine those ounces.”


Unlocking the next mining frontiers

Many new gold deposits are located in regions so remote that supplies cannot easily be transported due to a lack of roads, runways and other key infrastructure. Other amenities are also difficult to source locally, and building extensive infrastructure is costly and time intensive.

“All the infrastructure that needs to be in place before you can actually build the mine can kill a project’s profitability,” says Peter Kondos, Senior Director of Barrick’s Strategic Technology Solutions (STS) group.

A conceptual idea being floated within the industry – both literally and figuratively – is the use of hybrid air vehicles, which combine a dirigible’s use of lighter-than-air gases and fixedwing or rotary-wing technology, to transport loads as heavy as 50 tons. The vehicles are extremely durable and, even if they did develop a hole, the descent is very slow and controlled, Kondos says. The risk of explosions is also eliminated because a non-reactive gas, such as argon, would be used to fuel the vehicles.

While the haul capacity is not nearly enough to meet mining’s requirements, the technology is something the industry could explore longer term as capacity increases, Kondos says. However, the technology is appealing for smaller projects. Small concentrate solutions, for instance, could be carried via dirigible to a centrally located processing facility that serves a number of smaller area mines, Kondos says. The dirigible could refuel, load up on other supplies and return to the mines, he says. “Hybrid air vehicles do not require as much infrastructure as conventional transportation methods, which would decrease a project’s environmental footprint,” he says.