The

industry comprises a chain business activities

Exploration (prospect portfolio) -> Mining (Resource portfolio) -> Metallurgical
processing (Technology portfolio & plant) -> Refining -> End product manufacture &
distribution (product portfolio & market network)

Relative value of each of the primary metal markets
Iron
Gold
Copper
Zinc
Lead

Demand > supply > market structure > economics > opportunities > competitive
position.

Demand drives mining industry
Metal demand follows global economy growth cycles

Increased usage for minerals has forced mines to exploit lower grade and more
complex ores

When demand approaches supply prices increases and if process increases increase
the hunt of new resources

Gold industry is different, it is not driven by physical demand, it is driven by
investment

Investors have to have Confidents and stability from government. Changing the rules.
Mining industry is a counter-cycling operation (7 year in prices). 10 year to develop a
project. 15 year most probably to have a money revenue.

Companies only have control on cost. It is important to
Costs
C1: not direct cash cost, represent the cash cost incurres at each processing stage,
from mining through to recoverable nickel delivered to market
C2: Production cost, is the sum of net direct cash cost C1 and depreciation, depletion
and amortisation
C3: Fully allocated cost, is the sum of the operating cost C2, indirect costs and net
interest charges

Companies have managed to maintain profitability in the face of declining grades only
because of major technology advances, which have reduce their production cost.

Types of projects
Greenfield: projects are constructed on a new site are stand alone ande include all
projects related infrastructure

Brownfield projects are built on an existing and can use some of existing plant and/or
infrastructure. Expansion of existing plant de bottlenecking of existing plant
replacement of existing plant with more modern equipment
Brownfield projects are usually far more profitable than Greenfield projects because
of reduced capital requirements.

The larger the company the less their appetite for projects which might have negative
health, safety, environmental or social issues (they are very concerned about their
international image).

Economic sensitivities to changes in parameters like product selling price, capital and
operating cost, resource grade have to be acceptable.

STAGES OF PROJECT EVOLUTION

A project should evolve through sequential phases:
Concept > pre-feasibility > feasibility > execution

Reviews and approval to proceed are requires between each phase

Process technology selection

• List potential fatal flaws and value drivers early in the project
• Identify risk versus benefits of technology options (document trade-offs)
• Do not drop alternative options too early in the study but be aware of
implications of advancing too many alternatives in parallel (a less than
optimum alternative may be preferable to the delay in developing the optimum
solution
• Keep design as simple as possible
• Be aware of negative market reaction to technological novelty
• Process decisions made early in project have a long-term impact. Long-term
success is dependent on initial decisions.

Define and record the production design philosophy including:

Allowance for future expansion
Variation in feed
Live standby capacity
Turndown capacity
Surge Capacity
Multiple streaming
Economy of scale of equipment versus reduced standby capacity and flexibility
Standardization of equipment
Production ramp-up

Look at what other people are doing.

ACREDITATION