Arthur (Art) Ganshorn, general manager of marketing for Placer Dome, emphasized that a 50% drop in production costs was the principal reason Endako reopened. And he gave full credit to its employees for achieving that cost reduction. The lower cost structure was extremely important because Placer Dome could stop selling on a producer or fixed price basis and buy back its market share. That’s why lower production costs were so necessary, Ganshorn said. He added that the timing of the turnaround strategy was perfect because “the Japanese and Canadian markets took off just when we needed it.”
The South Korean market was a key factor in the Endako reopening, as well. When Placer Dome’s Korean marketing effort began in 1986, the company believed placing Endako’s production there would have a minimum impact on the world price, which proved to be correct. Indeed, Placer Dome now accounts for 30% (4.2 million lb) of the Korean molybdenum market.
Reduced costs at Endako also enabled it to capture 25%-30% of the Japanese market or about eight million pounds of molybdenum annually. (In 1983, it had less than 4% of the total market or about one million pounds.) So successful has Placer Dome been that its main competitor, U.S.-based Amax Inc., has been relegated to the role of swing producer, largely because of its higher cost structure. Domestic demand in both Japan and Korea is increasing and Placer Dome is positioned to take advantage of future demand, Ganshorn said.
Fewer people work for Endako today which, to a large extent, explains its return to profitability. The mine is back in full production at a rate of 14 million lb of molybdenum per year, and it is doing so with about one- third the staff. Before it closed in 1982, the mine employed more than 630 unionized workers compared with 185 workers (all non-union) today. While that number is expected to climb to 230, the company concedes it has had difficulty attracting skilled trades people and technical staff.
Labor concessions played a key role in the mine’s reactivation. Unionized workers who stayed around after the 1982 shutdown voted unilaterally for decertification in order to reactivate Endako. No attempt was made by Placer Dome to cut wages or benefit packages for the returning workforce, and no mine equipment or technology was changed. In the past 2 1/2 years, workers have received bonuses and wage increases which Colin Seeley, mine manager, said were “really a tribute to the people that made this thing successful.” Also, employees are eligible for the company’s stock purchase plan.
Endako has adopted a bottom-up management philosophy which encourages rank-and-file participation in decision-making. Compared with the situation in the early 1980s, there are few supervisory staff. Also, the remaining supervisors don’t merely sit in trucks and watch the activity — they’re part of it. Shift bosses have been known to run equipment and supervise at the same time. “Our policy is to push responsibility down to the lowest level possible,” Seeley said. The mine is producing 27,000 tonnes of ore per day at a 0.135% (MoS2) head grade. It can boast a modest waste-to-ore strip ratio of 0.5:1. But the overall ratio will rise to about 2:1 for a few years after the south side of the Denak pit is stripped later this year. In any event, it will be a short haul for this waste material, said Jim Baker, mine superintendent.
Mine production is roughly split between the Endako and the Denak pits. Because the Endako deposit is relatively homogeneous, 44-ft benches are used, which requires extending the drill masts on the Gardner Denver (120) and Marion (M-4) electric rotary drills.
None of the company’s mining equipment is exactly new. Its haulage fleet of Unit Rig Lectra Haul 85- and 100-ton trucks is well used but generally in good operating condition. To keep a lid on costs and further increase productivity, Endako recently purchased six 120-ton haul trucks from Teck Corp.’s old Highmont mine for about $1.5 million. Some of its older trucks will be scavenged for spare parts.
Thirty-foot benches are drilled off in the Denak pit because the Denak is essentially a vein-type deposit. Hole spacing varies and is adjusted on the basis of penetration rates. The softer the rock, the wider the spacing, which at times involves a 23×27-ft drill pattern (staggered). Because of heavy water flows, many holes have to be pumped; as a result, 25% of explosives consumption involves slurry and the rest ANFO (ammonium nitrate and fuel oil).
Design work, including optimizations and reserve calculations, are now done on-site rather than following past practice of utilizing Placer Dome’s mainframe computer in Vancouver. “Computer equipment is cheap enough that we can do this work on site now,” Baker pointed out.
Approximately 90% of Endako’s molybdenum production is sold as oxide and the remainder mostly as purified molybdenum disulphide. The Endako concentrator also generates significant revenue from toll roasting for mines like Highland Valley Copper (B.C.) and Cyprus Minerals in the U.S. In 1980, a purification plant was constructed to produce a high-value specialty product used mainly as a solid lubricant; its capacity was doubled in 1988 at a cost of $2.5 million — the largest expense incurred by the company following the most recent start-up.
There were no problems whatsoever in re-starting the Endako mill after the 4-year shutdown, the company said. “We were very careful and cleaned out most of the slurry lines ahead of time. We prepared well and maintained it well,” said Mill Superintendent Michael Fallat.
Minor modifications were made to the mill flowsheet for better grade control, but nothing really costly was added, he stated. Current recoveries are averaging about 83% from what could only be described (by industry standards) as a low-grade orebody. Reserves at year-end stood at 147.4 million tons (134 million tonnes) grading 0.085% molybdenum.
Three of the mill’s five flotation/ grinding sections were brought on- stream at start-up, another in early 1988, and the fifth later in the year to lessen Endako’s impact on the moly market. Nevertheless, Endako has had a major impact in one regard — on Placer Dome’s earnings. The mine reported operating earnings for 1988 of $24 million, a 75% increase from 1987. Now that’s some turnaround. David Duval
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