The case for innovation in mining has never been more compelling, in view of the new trends in the industry, which include productivity hitting new lows and costs skyrocketing.

Speaking, during a Webinar focusing on the leading trends in underground mining, last month Ipkon director of strategic alliances Dominique Pion brought increases in mining costs during the last few years into sharp focus: “Mining production costs increased from $100/t in 2007 to $195/t in 2012. The cost to build one ton of thermal coal increased from $73 in 2007 to $106 in 2012.”

Despite commodity price weakness, input and production costs – ranging from labour and equipment costs to supply costs – remained stubbornly high, notwithstanding metallurgical coal prices having dropped from $330/t in 2011 to $150/t in 2013.

Pion pointed out that mining lower-grade deposits also gave rise to a host of hidden costs, noting that, from 2001 to 2012, the weighted average head grade for copper dropped by almost 30%. Nickel, zinc and gold grades also plummeted, while some gold projects yielded less than 1 g/t.

With 75% of new base metal discoveries at depths of more than 300 m, strip ratios were being pushed up, reducing the economic sustainability of mining lower grades.

“As mining companies work to rectify their cost imbalances, many will need to refocus on the capital employed by making a business case for producing fewer ounces or tons at higher grades,” Pion said.

Meanwhile, he stated that the need for greater operational efficiencies encompassed the necessity to focus on core operations and to improve these operations.

Further, he said, as uncertainty about the global economy continued to impact on the demand for metals and mining products and their prices, mining companies were “under pressure to achieve speed to market and get things right the first time”.

The challenge lay in rethinking and addressing a range of challenges.

For mining companies, he noted, waiting and watching while markets became less volatile was no longer an option.

He added that mining companies could improve their ability to respond to market conditions and increase value in a volatile environment by considering different actions and focusing on and improving core operations.

“Companies that take steps to be agile and cost efficient stand to create a foundation for sustained high performance. To increase value in a volatile environment, mining companies must focus on core operations and evaluate and determine core activities.”

Pion noted that mines were becoming deeper, and the deeper the mine, the higher the stress levels exerted on the surrounding rock. This increased the need for reinforcement and increased stress loading.

He explained that, as mines became deeper, the temperature at the face increased, and added that Ipkon silicate capsules had an advantage over resin capsules in this regard because they could be used at temperatures of up to 50 ºC, while resin capsules auto-ignite at 31 ºC

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“The Western Deep 3 shaft in South Africa, a 3.9-km-deep gold mine, is currently the world’s deepest mining operation, with 800 km of tunnels and 5 600 employees,” said Pion, pointing out that temperatures in the mine could rise to life-threatening levels.

“Nowhere else do mines go as deep as in South Africa, and the lessons learnt from these mines in attempting to extend their life spans will be applicable globally, not only for extracting gold but also for other minerals underground,” he said, adding that AngloGold Ashanti’s Mponeng mine, in South Africa, planned to go as deep as 5 km.