From mine to market: Why doing more can sometimes cost less

Joel Shirriff, Global Practice Lead, Terminals & Transportation, discusses why doing more can sometimes cost less.

As project financing and investment becomes harder to secure in the mining industry, companies have been exploring new opportunities to optimize their projects. One of the more successful strategies to improve a project’s overall financial model is to take a holistic approach in assessing the entire project development from the process plant to the export terminal site and ultimately to the final off-take customer. This process considers the full lifecycle costs of all the assets that may require investment across the full project scope, allowing you to identify ways of possibly spending more in one area to realize significant savings in another, which can’t be done by assessing each area in isolation.


Sometimes doing more costs less

To understand how this works in practice, consider this case study. A few years ago, Ausenco was helping a major mining company to develop a bauxite project in Guinea, Africa. Our scope included the inland process plant as well as transportation of the product to a new bulk terminal facility on a river over 110 km away. The base case transportation model was to move 10 Mt/y of processed bauxite with a slurry pipeline system, where it would be dewatered and loaded onto ships at the river terminal facility. The challenge? The particle size distribution (PSD) recipe for reliable and efficient flow of bauxite in a pipeline was not only finer than specifications preferred at the alumina refinery, but it also required more expensive dewatering and filter equipment.

Our first attempt at cost reduction was to consider rail transport instead of the pipeline, but the heavy investment in infrastructure for the short distance of this option only generated minor savings. However, by brainstorming alternatives, the team conceived the idea to remove the extra fine material (slimes) at the port in advance of filtering to reduce the dewatering costs. The problem is that this amounted to nearly 40% of the product mass being removed, requiring more product to be processed to maintain the 10 Mt/y export rate in the original plan. The resulting decision was to mine and process up to 14 Mt/y of bauxite and ship it through a larger pipeline, before it was de-slimed and dewatered for export. The additional four Mt/y of slimes were then placed into a tailings facility that was already needed near the terminal. The net result of this holistic approach was a 30% reduction in total capital investment over the original design.

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Splitting the process

By taking this holistic approach to project development, it’s possible to find opportunities to defer part of the metallurgical process—either downstream in the logistics chain or even outside the project to a third-party smelter as part of the offtake agreement. While this may seem counterintuitive at first, there are some good reasons to consider this approach:

  • Some ores may require a very expensive specialized process that is only economical for large volumes of product and a smaller production rate may not be able to support the cost
  • Some processes are very power intensive and, if the project site is so remote it requires its own power generation plant, it might be good to push certain beneficiation processes downstream
  • If an existing mine is expanding to another pit location, it may be too far to move run of mine (ROM) ore from one site to another. Partially processing the ore at the new site and transporting concentrate to the original plant may be more economical
  • There may also be environmental benefits associated with moving a finishing process from a remote mining site in the wilderness to a centralized industrial location where the residual by-products may be more easily contained and disposed of


Reducing lifecycle costs

One of Ausenco’s more recent success stories was the 2017 turnkey construction and commissioning of the Moose River Gold project in Nova Scotia, where expansion beyond the original Touquoy deposit to future pits was always part of the program. The basis of these expansion plans was to haul ROM ore from one pit to the already operating plant, but we needed to find a better way to reduce the number of trucks running on the municipal roads in the area.

While their Beaver Dam was only a few kilometers away from the plant site across a simple trucking route, their other deposits at Cochrane Hill and 15 Mile Stream required over 100 km of travel on busy public roads with weight limitations for trucking. The solution came when we realized this ore was suitable to make concentrate with a high gold recovery rate, so Ausenco proposed building a small concentrator plant at 15 Mile Stream that would result in a 10:1 reduction in the material being trucked to Touquoy. This concentrate would then be introduced to the Moose River plant for final processing and gold production. In addition to reducing total project costs, this approach mitigated both the environmental and community impacts of the project.


Collaboration is key

Over the years, Ausenco has proven that the success of this holistic approach depends on being open, honest and collaborative. To succeed, our technical teams work together across the business, consider all ideas fairly and work collaboratively with client teams to explore a variety of options. From there, we can draw on our in-house technical capability across every transportation mode and metallurgical process to identify how to deliver ingenious solutions that increase project values.


Our experience

With over 90 years of industry experience, Ausenco has supported more than 500 bulk cargo operations and designed 80% of all slurry pipelines worldwide. Drawing on our extensive in-house technical expertise, we do more than provide unbiased opinions on how best to move your product from Mine to Market. We also deliver fully integrated transportation logistics systems that are fit for purpose and work holistically with both upstream production facilities and the downstream distribution network.


Looking for support on your next project? Our team of experts are ready to help, reach out to Joel Shirriff to learn more.

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