CIM conference looks to next century — Miners face new challenges of globalization, weak commodity prices and public acceptance

Delegates attending a conference held here in early May were told that mining in the next century may feature the increased use of robotics, specialty alloys and recycled materials, and may incorporate advanced exploration and engineering techniques originally developed by military and space agencies.

This glimpse into the future was one of the highlights of the 100th meeting of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM).

The centennial event was co-sponsored by the Council of Mining and Metallurgical Institutions (CMMI) and the Multilateral Investment Guarantee Agency of the World Bank (MIGA).

At the opening ceremony, Ralph Goodale, minister of Natural Resources Canada, praised the CIM’s role in making Canada a world leader in mining, while at the same time stressing his ministry’s support of strengthening the domestic industry. “Mining has come a long way since 1898. It’s now a $30-billion, high-tech industry, employing 130,000 Canadians directly, that is critical to our future.”

While numerous sessions during the 5-day event focused on traditional elements such as extraction and processing techniques, another major highlight of the CIM meeting was a plenary session in which speaker after speaker discussed the social and environmental challenges facing the industry.

Robert Wilson, chairman of London-based Rio Tinto, said mining companies have much work to do to meet the expectations of a changing and demanding society. “We must deliver a high level of performance. We must eliminate our trust deficit with the public.”

Wilson pointed out that globalization has brought with it a new set of challenges in the areas of indigenous peoples, human rights and the reduction of poverty. “We have the challenge to double the income of much of the developing world [through capital and technology transfers]. Few industries other than mining offer this ability.”

Wilson urged mining companies to be socially responsible and to “listen [to] and engage local partners.” He also said mining’s critics should be challenged to expand their focus beyond single issues. “Our critics shouldn’t assume that those citizens [in developing nations] want to be protected from medicine and economic benefits.”

CMMI Chairman Brian Loton told delegates that the industry’s greatest challenge is to meet these social expectations in a competitive global environment where the real value of most mineral commodities has steadily declined. “Price cycles only temporarily mask the long-term [downward] trends,” he said.

Loton explained that the world has moved into an age where the cognitive ability of individuals has replaced land or capital as the primary source of competitive advantage.

“This means we cannot rely simply on investment in technology for our future success,” he said. “We must make the paradigm shift from seeing ourselves as capital-drive enterprises to viewing ourselves as knowledge-based industries. The implication is that our future success is likely to be more dependent on the innovative application of technology than it is on investment in technology.”

Loton predicted that while information technology will be a major source of competitive advantage, the key ingredient will be the human element, “the skill and knowledge of the user.” He envisioned that techniques such as virtual reality would lead to 3-dimensional visualization, allowing “walk-through” capability for geologists studying ore deposits.

Another trend is the use of what was once classified military technology in minerals exploration, Loton said. “Satellite imagery, for example, now has the resolution and the discrimination to enable detection of mineralization on a scale of a commercial deposit. The cold war has given us other sophisticated sensing technologies which are gradually coming available.” In his keynote address, David Goldman, chief operating officer for Noranda, challenged the industry to look outward at “certain disturbing trends” that could lead to the collapse of mining and metallurgical industries.

“Although it is hard to imagine a world without metals, I think that we have lost the patience and goodwill of the public,” he said. “For increasing numbers, we are no longer welcome in the modern world. We must take action to return ourselves to their favor.”

Goldman explained that a Swedish organization called The Natural Step is now pressuring companies to decrease their dependence on underground metals and other minerals, fossil fuels, and “activities that encroach on productive ecosystems.” Swedish firms such as IKEA, Electrolux and Monsanto have endorsed The Natural Step, as has David Suzuki in Canada.

“We would like to think that empirical thought and careful development policies are driving public debate,” Goldman added. “What’s really driving it is public perception, emotion, political intervention and, sometimes, plain old chicanery. One oil-covered seabird destroys a binder full of compliance targets well and truly met.”

Goldman said progress can be made if the industry “learns to tell its story better” and learns to listen better and respond to concerns. He urged all industry organizations to work together to find a communications strategy that is more focused and effective.

Canadian astronaut Marc Garneau said mining’s value to society may increase as space exploration picks up speed in the next century. He also noted that space technology, such as robotics and remote sensing, may be adapted for new mining applications on earth and, possibly, in space.

At a press conference after the plenary session, both Wilson and Loton predicted that the consolidation of the mining industry would continue as companies strive to remain competitive. While huge mining companies may be the likely outcome of this consolidation phase, the men speculated that junior companies might find speciality niches in non-traditional areas, such as metals and alloys used in space applications. One example is titanium alloys containing aluminum and vanadium, heat-treatable aluminum alloys and stainless steels.

Several sessions focused on methodology involved in reserve and resources calculations and other issues related to improving investor confidence shaken by the Bre-X Minerals scandal. Michael West, chairman of The Mining Journal, said discussions on ethics “do not change bad people.” While mining sometimes attracts the undesirable and unscrupulous, he said, “deliberate over-estimation of reserves is not unethical; it is criminal, it is fraud.” Other highlights of the conference were a representation of the mine of the year 2020 and an awards banquet to honor industry achievements.

The Inco Medal was awarded, posthumously, to Keith Brimacombe, a former professor and metallurgical expert. Richard Burt won the Selwyn G. Blaylock Medal, while Graham Farquharson was honored twice (the Robert Elver Mineral Economics Award and as a Metal Mining Division nominee). Patricia Dillon (Past Presidents’ Memorial Medal) and Maureen Lipkewich (Order of Sancta Barbara) were honored for their work in mining education programs. Reini Ehrlich of Watts, Griffis and McOuat was presented the “Unsung Heroes” award, geoscientist Gilles Allard picked up the A.O. Dufresne Award and Andrew Cormier won the Coal Award.