COMMENTARY — Understanding CIS mineral industry

The Soviet centralized system created a non-integrated network of exploration, research, project design, mining and marketing. As a result, the general technical competence in each segregated field is high, the efficiency low, and the decision-making slow and deliberate. It takes about 20 years to push a project through the system.

“Heap leaching” has been going on since the early 1970s at the uranium mine that my Russian-speaking colleague and I visited. We toured one gold heap leach which was initiated when the operator was tired of waiting for the completion of a milling facility, the construction of which began in the late 1970s.

Then we were off to Alma Ata and finally to the Russian Far East (Khabarovsk), nearly on the Chinese-North Korean border. There we reviewed feasibility studies on a number of precious metal projects.

The Russians use technologies similar to those of miners around the world. They conduct long-term mapping and geochemical field programs, followed by site-specific target evaluation. Drilling appears to be exclusively by coring. Considerable surface trenching and underground drifting are undertaken routinely in conjunction with comprehensive metallurgical sampling and testing. Open-pit reserves are done manually on sections and leave some concern about dilution and grade distribution. Underground reserve estimates include dilution for minimum minable widths and weighted average grade calculations. Computer usage in posting exploration data, estimating reserves and mine planning was not evident.

Estimates for capital and operating costs are done on a preliminary basis for cutoff and production rate determination and on a more detailed basis for cash flow and payback evaluation. Changes in the conceptual approach to a project (heap leaching versus milling) would require another lengthy investigative program.

To fare well in the Commonwealth of Independent States (CIS), one must understand how the system works, stay abreast of change in an evolutionary environment and establish a network of contacts. The bureaucracy, vastness, and general economic, and in some cases political, instability offer significant challenges. The CIS is a land of tremendous mineral wealth, coupled with rich human resources and a determined desire for western technology and services. It is also one of the friendliest places I have visited.

— John Antony is executive vice-president of Colorado-based consulting firm Pincock, Allen & Holt. He recently returned from a project in the Commonwealth of Independent States, the former Soviet Union.