Dewatering: Thickening, Filtering, CCD, Water Treatment & Tailings Disposal

Dewatering: Thickening, Filtering, CCD, Water Treatment & Tailings Disposal 2017-04-04T06:57:46+00:00
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AMD Water Treatment Budget Size (7 replies)

Alan Carter
2 years ago
Alan Carter 2 years ago

Anyone knows what % of a mine company's investment budget is allocated to treating AMD? I understand it is a very broad topic and that the answer will be very much company dependant but even so, there must be a way to have a reasonable average?

2 years ago
Oberstorm 2 years ago

Detailed financial data of this sort are hard to come across, as they are considered to be proprietary. However, some years ago, National Geographic did a story about modern mining and its environmental aspects. One of the people they interviewed was the then environmental director at the McLaughlin Mine north of San Francisco. The mine was celebrated in its operating days (the 1990s were its peak, I would say) for having the most advanced environmental controls in the industry, operating under the most complex and restrictive regulations (in the State of California, USA, and also regulated by three separate counties within the state and indirectly by cooperating Federal agencies (e.g. Clean Water Act delegated to the State)). The magazine asked Mr. Krause what percentage of the operating costs was dedicated to environmental issues, and his answer, if memory serves, was 3% - 4%. I have no idea whether he was correct, or what he took to be within the scope of the operating costs. The mine was certainly in operation at the period, and so he was NOT looking at closure costs. I imagine, since it did not come from "his" budget, that it also excluded legal costs, and it probably did not include the PFS/FS/Permitting budget prior to the operations of the mine.

Say 4%. It strikes me as a reasonable number for environmental management at an *operating* mine: not trivial by any means, but also not a driving factor in the overall economics. 2% sounds too low; 10% is pretty surely too high (unless there have been upset conditions and remedial actions are involved). Now only a portion of the environmental budget is related to "ARD" - there is air-quality, bugs-and-bunnies, seeds-and-weeds, handling potable water and sewerage, community relations, and probably other stuff I'm not recalling right now. And it would help if you clarified your question a little by "treating AMD" do you specifically mean water-treatment costs and sludge management, or do you wish to consider all the physical steps needed to prevent/mitigate ARD from forming in the first place? Also, are you looking for a *life-cycle* cost, or only the operating budget? Obviously, at closure, the percentage of mine costs dedicated to AMD control and management will be a very large portion of the total closure costs, if the mine wastes generate ARD. And depending on how you wanted to carry the costs for accounting purposes, the costs of the EIS/PFS/FS/permitting would in part be "environmental" costs.

In the US financial assurance for closure will be public information. The plans and their financial calculations should be available to you through the Agency (ies) who establish the financial assurance requirements - there probably will be some "business confidential" data behind some of the calculations, but you will be able to discern how the total values are determined. That's not a whole "investment budget", but it is a big and critically important set of data.

Alan Carter
2 years ago
Alan Carter 2 years ago

Thanks very much for your insightful answer. At this point we are only interested in a conservative estimate of the actual costs incurred in the AMD treatment (including disposal of sludges or brines produced as a result) of a typical mine. With this number in place we are hoping to multiply it by the number of potential mines incurring in such a cost to have a very rough idea of the size of AMD cost on a global scale. We are aware that we will end up a figure with a massive error like +/- 20-30% but that will be good enough at the stage we are in.

Bill Rico
2 years ago
Bill Rico 2 years ago

The Equity Silver Mine is given as an example at $1.28 to $2.4 million for annual AMD treatment See 8. This is in 1991 Canadian.

2 years ago
Oberstorm 2 years ago

This information is useful. But there are some things to bear in mind for your target precision. Equity, at its 1980's production levels, produced about 5,000 tpd of ore; a large porphyry copper operates around 150,000 tpd. Acidities associated with ARD at mines ranges from ca X00 mg CaCO3eq/L - X0,000 mg/CaCO3eq/L, and sulfate concentrations from a few X00 mg/L to X0,000 (or more); precipitation regimes range from < 100 mm/a in, say, northern Chile to 10 m/a in PNG. The expected life-of-mine may be as little as 8 a, but one also has mines with operating histories of 100+ years. There is no consensus whatsoever with regard to how long active water-treatment and sludge management may be needed (a few decades; a few centuries; "in perpetuity"?], or how long periods, were they determined, would be conducted. One imagines possibly quite different circumstances as between, for example, Canada and the DRC. And discount rates for costs? Well...

This is not to discourage you and your colleagues from attacking the problem you have set yourselves, only to wonder if precision on the order of 30% is possible. Perhaps you could reframe your question, in light of some geographic (or other) constraints: what are the expected costs in South America, for example, or in OECD countries?

Helena Russell
2 years ago
Helena Russell 2 years ago

It appears to me that the consideration of the subject, like most statistics, is easily bendable. As alludes to, there is no model mine to be drawn from in an industry constructed of companies with multiple mines. One company may have the good fortune of having several mines with No AMD issues requiring little to no investment while another may have all operations with AMD issues requiring substantial investment as a percentage of their operating costs. Then the severity of the issues and adjusting the amount of required investment to properly manage the AMD issue. Either may be characterized as irresponsible or a hero based on the statistic but still is operating wastefully conservative or deficiently attentive. Finally, closure costs is an additional consideration that will affect the statistics of a mature company (with many closed mines being managed) more than upstarts with no or few closed mines being managed.

Much of the reason this is a problem to quantify is precisely why AMD management is a problem for industry; it is a very complex problem dependent upon each individual mine site's conditions including geochemistry, climate, geography, and hydrogeology. Only when the impossibility of every mine site being the same in these characteristics, a benchmark for investment in AMD can be properly set. Please be careful when applying any derived statistic. 

Marshal Dienes
2 years ago
Marshal Dienes 2 years ago

As it has been indicated, the situation at every mine is going to be different. You have to make your best guess of budgetary requirements based on the contaminant grades in the tailings, soil and groundwater, groundwater flow rates, the potential amount and rate of leaching to groundwater, liming or other chemical placement rates, etc.

2 years ago
Gruppen 2 years ago

All, this is an interesting question, and raises more issues than would appear. We had a visit from Tony Hodge (president ICMM) some time ago. He gave an example of a mine which, at closure, had to invest (from vague memory) $10M in an AMD treatment plant and then budget $5M remediation costs per year. Forever,

The question is not just about % budget allocated to (post-closure) treatment, but how one puts sufficient money aside for perpetual treatment. It would be a brave accountant who tries to put something like that on the budget forecast.

The reality is that mines rarely follow the idealised development model from prospecting to operation to closure. Mines rarely run out of ore, they simply become uneconomical to run as grades decline/processing costs increase and get moth-balled and/or sold on to smaller and smaller producers who then get lumped with the liability without the assets to cover them.

Just my thoughts; it's a fascinating topic and one which does not have a solution with the current business model.

As with societal and other environmental impacts from mining, if we want "Fair Trade" stamped metals, we, the consumers, must be prepared to pay the premium.

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