High costs means deep mines’ days are numbered

“Big is better” is becoming the new name in this ever-changing mining game. Miners everywhere favor and seek out big, low-cost and safer open pit deposits rather than much more costly underground mines. Furthermore, with old-fashioned boundaries and barriers falling like flies around the world, a smaller trading globe must surely follow.

These developments could have a profound effect on the Canadian mining industry, which is so dependent on export markets. The vast and diverse Soviet mineral fields (the world’s biggest nickel producer, for example), as well as those of other cash-hungry eastern European nations, will soon be competing for our markets. And South American countries are now coming on stronger than ever.

This trend away from underground mining is already clearly in evidence, especially in the U.S. where they have been developing a string of very low-cost open pit gold mines that could conceivably put the big gold mines of South Africa right out of business.

Of course, it is the huge cost- cutting rock-moving equipment now changing the economics of mining. At one new gold mine in Nevada, for instance, where 500 million tons of rock must be removed in a massive stripping operation, an electric shovel with a 27-cu.-yd. bucket is employed with a fleet of 200-ton haul trucks.

Certainly the South African gold miners can no longer compete with Uncle Sam on a cost basis. Indeed it is doubtful if we will see another deep shaft put down on the Witwatersrand, although its renowned gold-bearing reefs are still far from being mined out. Mining to depths of 10,000-12,000 ft. will soon be relegated to history books.

The U.S. has already displaced Canada in gold production, with the gap widening as more and more of its newly found low-cost heap leach open pit deposits come on stream. While not of the heap leach type, Placer Dome is leading the trend in this country with the development of its big, bold Mt. Milligan low-grade copper-gold project in northern British Columbia.

In the final analysis, of course, it is the cost at which metal or minerals can be produced by any country for sale into the opening markets of this shrinking globe that will count.

Iron ore is a classic example of just what can happen. Not long ago we had 15 producing iron ore mines in this country, selling into world markets. Then along came Brazil’s discovery of billions upon billions of tons of very much richer open pit ore (no stripping) which almost devastated any competition, including Canada. We are now reduced to three, one of which will likely soon close. And, I suggest, the two big remaining Quebec-Labrador operations would not have gone into production had Brazil’s fabulous discovery been known at the time.

But the shoe is on the other foot with uranium, for we have found in Saskatchewan the richest and best deposits in all the world which, on a cost-per-pound basis, simply cannot be matched.

But governments in this country seem oblivious to the fact we will have to be more competitive than ever in this changing world. Day after day, new regulations seem to be announced, building up an ever- mounting costly bureaucracy.

To be in mining, one has to be an optimist. But in Ontario in particular, I find this harder and harder despite its intrinsic mining wealth. This year it saw only two new mills built, both by junior companies. And with the twin new high costs of environmental protection and site rehabilitation, these will likely be the last for any junior, as it could now cost as much to close a mine as to bring it into production — payable in advance.

The trend to open pit mining doesn’t mean we are likely to start closing our underground operations. But it does mean the days of putting down new deep shafts in this country may be numbered unless, of course, it is to mine very rich deposits.

However, it is my opinion that we will be seeing fewer headframes and more open pit operations in this country.