TECK COMINCO - A DIVERSIFIED RESOURCES COMPANYCOPPER - COAL - ZINC - GOLD - ENERGY

The emerging skills shortage in the minerals industry - potential constraints on

future sustainable development

John Thompson

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Outline

Mining Industry – changes and challenges People – demographics and demand Exploration – geoscientists and skills

Area selection Target generation and testing Evaluation and development

Critical skills – concerns Constraints on development Opportunities

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Industry – the last ten years

The resurgence of the resource business Supply-demand – high commodity prices Opportunities and challenges:

Markets – capital and consolidation Discovery Cost escalation Technology Politics, environment, health and safety,

communities - sustainability

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Supply – demand

Supply constraints Low discovery rate – relative to expenditure

Limited effective grass roots exploration, technical challenges, land access, people

Cost escalation – materials, energy, labour Development & mining – labour, skills Politics and social/cultural issues

Demand China, India etc…. Future?

Sustained prices? Volatility

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The people picture

Demand New projects and expansions Limited hiring – a lost decade

Demographics “Retirements” – loss of knowledge Job pressure – early retirement, life style

Competition Location Image

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Exploration – people skills

The role of the geoscientist Early stage – generation Projects – evaluation Business – management

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Early stage – Generation

Understanding the target – metallogeny Using available public data Developing the concept Testing the concept Acquiring the “right” data

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Project exploration

Target definition Intelligent collection and use of data

Target testing – drilling Logging drill core/chips Interpreting results

Exit strategy

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Understanding the model

Classic 2D geological models Extrapolation to 3D Building from experience Resisting dogma – dealing with uncertainty

Empirical v theoretical models e.g., IOCG – major deposit class but no

adequate exploration model

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Data and modeling

Targeting: Data quality Variables Assumptions

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Interpretation

3D Models: Organize &

integrate data Interrogate &

visualize results

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Project development

Communities Resource evaluation Geometallurgy Mining and processing Environment

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Using the data

Exploration to resource Understanding deposits Delineation, evaluation Resource model

Resource to mine Geotechnical data Ore characterization Waste characterization

Geometallurgy

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Geometallurgy

Define mining/processing characteristics Start-up risk mitigation Mine site optimization and integration

Predict mining/processing results from geological characteristics

A new skill set using mineralogical and textural data

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Data to Predictions

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Geometallurgy

Current geometallurgical tests Relatively expensive – hence limited to a few

(composite) samples May not reflect or define inherent variability

New cost-effective methods – better use of mineralogical, chemical and physical data

Generate enough data to be spatially representative and predictive

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Geometallurgical models

Incorporate data into resource models Potential

Total economic optimization Optimize flowsheet/plant size Reduce technical risk

Liberation

Recovery

Disposal & environment Blasting

Crushing

Grinding

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Critical skills - concerns

Field Observations – rock, drill core/chips, outcrops Interpretation – regional to project scales

Experience – time on the rocks

Leadership Technical and non-technical skills

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Loss of field skills

Fundamental for exploration Observations – outcrop to drill core Experience – 3D interpretation

Lack of emphasis in education Inadequate training - industry/government

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Leadership

Challenges Range of projects Managing uncertainty Risk analysis Team leadership

Attributes and skills Presentation and salesmanship Cultural/social awareness Determination and flexibility

A people business

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Constraints on discovery & development

Discovery People and budgets (market conditions) Skills, expertise and determination Politics – land access

Development Land-politics, energy, water, and costs People – mining engineering and metallurgy Finding the “A” team Creativity and rigour (geometallurgy!)

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Constraints on different players

Majors Good budgets – focus, speed, awareness? Expertise and teams – commitment? Approach/ability to work with juniors?

Juniors Funding – understanding the options? Staff – business and technical demands

Balanced portfolios Breadth v focus – frontier v mature Technical risk v non-technical risk

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Opportunities

Companies Attract and retain the right people Use people in the right place Career development and flexibility Invest in education – build capacity

Universities Provide fundamental education Introduce breadth and application

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For the geoscientist

Mining industry – Enormous opportunities – career advancement Adventure, diversity, challenge

Geoscientists are capable of anything Quantitative and qualitative science Interpret vast amounts of complex data Deal with uncertainty Work with people

Leaders – CEOs……