Fracking for Gold: BHP & Barrick Chase “Ultimate Prize”
BHP, Barrick Gold and mining contractor Hatch are all looking at ways to replace mines with grids of wells that pump metal out of the ground, up-ending the industry's economics
As fracking has exploded in the US, the country's crude oil production has doubled in ten years from 5 to 10 million barrels per day, lowering energy prices across North America, which is now awash with natural gas. Terminals built for imports have been reconfigured to funnel it out.
Engineers in the mining industry say the same could be about to happen in copper and gold, as some of the world's largest mining companies examine ways to replicate fracking, injecting liquid into deposits to extract metal from ore, before pumping it back to surface.
Australia's BHP, Toronto-based Barrick Gold and mining contractor Hatch are among several companies investing in research into so-called 'in situ leaching', replacing mines with grids of wells that pump solution in and out of the ground. “You don't have to go through the whole mining process,” one senior gold mining director says.
The technology would obliterate many of the industry's largest costs, from diggers and dump-trucks to crushers and mills. But it could also up-end profit margins, letting companies exploit deep and low-grade deposits, massively boosting total mineable reserves.
Large mining groups say the technology is “probably four or five years off”, roughly the time it takes to build a conventional mine. Australia's government-funded science research body, the Commonwealth Scientific and Industrial Research Organisation, which invented Wifi and the polymer banknote, has also trialled in situ leaching, doing a $3m field test on a gold deposit in South Australia.
The technology has already been used to turn Kazakhstan into the world's largest uranium producer. Engineers first trialled it in the US in the 1960s at a uranium mine in Wyoming and a gold mine in Colorado, but laxer environmental standards in the Soviet Bloc meant Kazakhstan's state-owned operator, KazAtomProm, could use higher concentrations of acid, making it easier to permeate complex ore.
Kazakhstan's deposits have low grades, often below 0.1 per cent, versus over 10 per cent at the world's richest uranium mines,
but the country is now the world-leader, exporting more uranium than Canada and Australia combined.
Upscaling the technology to copper, where deposits are measured in millions of tonnes, means finding a “safe, organic, non-toxic” alternative to acid, says the head of one group of senior industry figures investing in the concept.
KazAtomProm's operations use 40 to 80 kilograms of acid for every kilogram of uranium produced, according to the World Nuclear Association, creating an “extreme” impact on groundwater, according to geological studies.
One alternative has been found at jet engine group Rolls-Royce. Its engine blades have the horsepower of a Formula One car, spinning at twice the speed of sound. Tiny imperfections can turn into fractures, so defective parts have to be scrapped. To minimise waste, Rolls-Royce has developed a brine that dissolves each blade's honeycomb structure, recovering its most valuable metal.
Investors are now working with the University of Leicester, which developed the solution with Rolls-Royce, to apply the solution to orebodies.
Proponents say in situ leaching could be the biggest technological shock the mining industry has faced since the electrification of copper mines in the US in the 1920s, or the introduction of super-sized dump trucks in the 1990s. If companies produce high-purity metal onsite, the knock-on implications are also profound, threatening shipping, refineries and hundreds of thousands of jobs. “It's so disruptive you have to stand back and really think.”
Thorny questions remain: companies are yet to work out how much they will need to break-up rock to get “liquid penetration” and some tests are yet to move beyond the lab. Like fracking, in situ leaching could also come-up against strong opposition.
“There's no shale oil for copper”, the chief executive of copper group Freeport recently quipped; new supply cannot be “turned on quickly.” That certainty is about to be challenged, one technical director suggests. For large mining groups, in situ leaching is “the ultimate prize.”
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