What I saw and experienced during my visit to underground mines in the USA was something that I will never forget. What amazed me was the stark contrasts in mining practices in Australia vs the USA.

I thought that I would share some of those experiences for those that have not had the privilege of seeing both USA and Australian underground mines.

In Australia, the use of diesel engines in underground mines is widespread. In the USA, there are some states that ban them underground – for safety reasons.

Yet, there are some things that are allowed in USA mines that Australian mine workers would not believe.

During a visit to a Pennsylvanian longwall mine, the longwall superintendent was showing me the underground workings plan for their upcoming longwall move. He was showing me where they located all the equipment. As I looked at the plan, I was shocked to see Oxy/Acetelene shown in a cut-through. When I asked him, he told me that they always use Oxy/Acetylene underground to assist in longwall moves. It was common practice. When I told him that we don’t use it underground, he asked, “how else do you cut things that are stuck?”

A few days later, I was driving to a mine in West Virginia. I got off the Interstate, following the directions I was given. I was told that the mine was 12 miles along this road that ran beside a river. Try as I might, I could not locate the mine. Finally, I decided to try driving up to a property up on a hill that was behind a barb wire fence. To my surprise, that WAS the mine. There was a small sign tied to the fence with the mine’s name.

I was invited to go underground at the mine. I was taken underground where we got on the trolley-wire lomotives to go to a development panel. I was amazed at the arcing and sparking of the trolley wire system. Yet, later I was told that regulations don’t allow diesel engines underground due to safety reasons.

When I arrived at the development panel, I went into the crib room. I was shocked to see 110v extension leads with incandescent lights. The lights were the same type that your local garage uses – the type that have the plastic cages around one side of the light. When the bulb blows, simply change the bulb, right?

Another thing that amazed me was the work management philosophy.  In USA mines, if they need people to work overtime on Saturday, they simply declare it a work day and all employees are required to attend work for the day. If they don’t attend, they are considered absent just like any standard work day for them.

On my way back to Australia, I began to realise why the American mining company that I worked for in Australia was struggling with its industrial relations. They were simply managing workers the way they did in the USA.

Having lived and worked in both the USA and Australia, I understand how important it is to understand and adapt to local practices when doing business internationally.

It has been an amazing couple of weeks in politics that included a change of Liberal Party leaderhip and the ETS defeat.

I wonder whether the Climategate scandal timing may have had something to do with it.

Regardless of whether climate change is real, I am all for reducing energy consumption. It simply makes sense to use our energy sources wisely. However, I believe that the proposed ETS would have unnecessarily caused job losses and other major economic consequences to the Australian economy.

I believe that there are better ways of reducing energy consumption.

One of my biggest problems with these type of schemes is that they penalise Australia, while our competitors benefit. Countries like China that are taking Australian jobs talk about reductions but do not make any real change. The result: Australia becomes even less competitive against these low labour cost countries.

What real alternatives are there?

Firstly, rather than just create subsidies to offset costs, I believe that any emissions tax should be used directly to improve energy efficiency. Use the money to figure out how to more efficiently mine coal, generate power, etc.

Secondly, make the scheme dependent on other countries also reducing emissions. This way, Australia can commit to emissions reduction while still remaining competitive.

It will be interesting to see how this all pans out next year when the government is supposed to tackle the issue again.

Calvin Close
Australian Mining Reference

This cut represents a $5 billion cut in export earnings for Australia.

You know that times are really not so good for the Australian mining industry when companies can take that sort of cut and be convinced that this is a good result for them.

When you look at the spot price hovering around US$60 per tonne, you realise that the companies might be right in their enthusiasm.

Although down 40% from last year, this year’s price will still be the second highest price paid by the Japanese companies. It is also still far higher than the contracted price just 2 years ago.

The slightly better that expected thermal coal prices being negotiated have given hope that the coking coal prices will not be hit as hard as previously expected.

Our iron ore producers are expecting a 30% cut in prices from the current US$100 per tonne.

Calvin Close
Australian Mining Reference

The government has release the Mid-Year Economic and Fiscal Outlook (MYEFO) which predicts that Gross Domestic Product (GDP) and jobs growth are both expected to slow significantly. However, Treasury has assessed that a recession is not in prospect.
(See full story on Forbes)

Yes. Australia is being affected by the global financial crisis.

So what about the mining industry?

Many people believe that the mining boom has peaked. Actually, it seems more like there is a “wait and see” approach being taken by some mining companies. Many projects have been put “on hold” while the mining companies assess potential drops in resources demand. Production cuts have also been announced by several mining companies. This has meant that many companies have already cut staff.

The recent announcement of China’s Economic Stimulus plan has caused shares in major Australian mining companies to rise on Monday.

Despite the downturn, the Minerals Council of Australia (MCA) has maintained that demand from China will continue at high levels. They are still predicting significant increases in jobs over the next 12 years.

It will be interesting to watch proceedings over the next few months.

Have you been following the unfolding story of the rescue attempts at the Crandall Canyon mine? I want to share some links to video clips, pictures and other illustrations to help you understand the situation at Crandall Canyon. I will continue to update this as the story unfolds.

Current News:

Officials at the Crandall Canyon mine have announced that the search for the missing miners is now finished after drilling a seventh hole and still finding no sign of life underground.  This hole was drilled into the miners’ “kitchen”, but officials had expressed disappointment that the hole only revealed 7 feet of rubble.  They had drilled this hole because miners are trained to seek refuge here during a collapse.

 They had also sent a robotic camera down one of the holes, but only found mud.  In fact, they had to abandon the robot down the mine because it got stuck in the mud.

Here is a video taken down one of the boreholes that was drilled into the mine following the initial roof collapse:

[youtube RciA_IxnYJc]
(video courtesy of KUTV-2)

I have worked in Australian coal mines for almost 20 years, and have also gone underground at a few mines in the USA. I was surprised at the differencese in safety standards between the 2 countries. One example is the use of diesel equipment underground. In some US states, they cannot use diesel equipment underground, whereas in Australia, they have been using diesels for many years. On the other hand, I was amazed at the use of trolley-wire trains (complete with all the sparks, etc) underground in the USA. So, what about Emergency Response Plans (ERP)? In particular, here is a link to the Crandall Canyon ERP submitted to the Coal Mine Safety and Health District (CMSH) District 9:

Crandall Canyon Emergency Response Plan

This plan also contains a mine layout plan at the end of the document.  As you can see, the plan was approved by CMSH on 13 June 2007. The ERP’s are a requirement of the new Miner Act 2006. As you can see from the Plan, it is pretty comprehensive in terms of providing for sufficient Self Contained Self Rescuers (SCSR), directional life-lines, post-accident breathable air (PABA), trapped-miner maintenance materials, etc.

So what does the Crandall Canyon mine look like, and what are the conditions experienced at the mine? Well, for a start, this is a deep mine – in some places over 2,000 feet (600 metres) deep.

What does it look like on the surface?  Here is a short video showing the terrain overlaying the mine:

[youtube S3l0NKJC054]

Rio Tinto’s Coal & Allied Division announced a 20 percent cut in coal production due to bottlenecks in rail infrastructure and Newcastle Port. As a result, 250 miners will lose their jobs this month.

Other mining companies in the NSW Hunter Valley have also had to scale back production due to these same issues. The Austar mine last month announced that it would cut 79 jobs because it could not get enough port access.

Mining companies have tried to reduce the impact of the port problems by re-introducing a quota system for port access.

A consortium led by BHP Billiton has recently been granted approval to build a third coal export terminal. However, this will not open until 2009.

There has been a lot of people jumping up and down about this issue with the port infrastructure.

However, as an engineer, I understand that infrastructure and equipment has operating capacities. When designing systems to handle coal throughput, you only design the system for the required throughput.

Why?

We know that extra capacity or throughput costs more money. Therefore, predictions are made about requirements and the system is designed to meet those requirements. Any bigger, and it costs more – sometimes a lot more.

Recently, I was in charge of a coal handling system upgrade, and we were faced with the same issue. Many people wanted to know why we didn’t install larger conveyors, etc.

Another issue lies in accuracy of predicting coal output requirements. Some people were saying that the mining boom was going to continue; others were predicting an end.

Lastly, there is the issue of handling peaks in capacity. Sydney’s hospitality industry faced this issue during the 2000 Olympics. What happened after the Games finished? There were a whole lot of vacant motel rooms.

If you have sufficient capacity to handle any possible requirement, most of the time there will be idle capacity. Again, this costs money.

Sometimes, it is hard to make decisions about required capacity, and we are seeing the results of reaching capacity limits with our infrastructure due to the mining boom – just like we did with motels during the Sydney Olympics.

Calvin Close
Managing Director
Australia’s Mining Reference

Robe River Mining Company, a subsidiary of Rio Tinto, had proposed the $12.5 billion Mesa A project as an expansion of the Pilbarra iron ore project.

The Troglobite is a small invertebrate that is only 4mm long, has no eyes or pigment and lives 5 – 30 metres below ground. It cannot survive above ground.

During its investigation of the Mesa A Project, Robe River discovered 11 of these troglobotic fauna, and committed to setting aside a mining exclusion zone to protect them. However, the EPA said that five of the species live in the area to be mined, and do not occur in the mining exclusion zone.

This news has sent shock waves through the mining industry, with many people raising questions about balancing environmental concerns with the need to foster WA’s biggest ever mining boom.

As expected, Rio Tinto has said that it would appeal the decision.

This is not the first time that the EPA has rejected proposals for mining projects. Recently, they knocked back the Gorgon gas plant on Barrow Island due to the impact on the island’s rare turtle. The WA Environment Minister at the time, Mark McGowan, approved the project with a list of environmental conditions imposed on it.

There are other similar cases.

I do not want to write a long story about this news, because there are many news items that have been published about this already.

Instead, I want to open this up to people to comment about it.

What is your opinion about saving rare species of fauna at the expense of bringing great financial benefits to the WA economy?

Do you think the decision is justified?

Post a comment and let the minng industry know what you think…

Calvin Close
Managing Director
Australia’s Mining Reference

In the December 2006 quarter alone, mineral exploration (excluding petroleum) rose yet another $36 million (9.5%) to $424 million.

This represents an increase of over 40% on the December 2005 quarter. The biggest gains were made in Western Australia (up $21.7 million) and Victoria (up $3.8 million).

Another major indicator is the number of metres drilled. In the December 2006 quarter, a total of 2,183,000 metres were drilled (up 7%).

All the figures above are seasonally adjusted.

Gold and Coal exploration expenditure had the largest increases, with both recording increases of almost 20%. In fact, not one mineral category experienced a decrease in exploration expenditure in the December 2006 quarter

We know that exploration expenditure precedes the actual mining. Although exploration alone doesn’t ensure that the actual mining takes place, it is one of the best predictors of future mining levels.

My prediction is for some pretty strong growth for some time yet.

Calvin Close
Managing Director
miningreference.com – Australia’s Premier Mining Reference

ps Wanting to market to the Australian Mining Industry? Download the free “Mining Marketing Manifesto” from the Mining Marketing website. It will change the way you do your marketing.

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I have a few, but I will post them one at a time, so let’s get started…

One night, I was the Maintenance Engineer in charge of the shift. I received a phone call sometime in the middle of the shift, “can you come to the coal plant – I think we have a problem”. You know the type – don’t bother asking any questions on the phone, just get up there now. When I arrived, the plant was in full operation, but that was the only good news.

The operator told me that the gantry conveyor tripper wouldn’t move, so he was limited to placing the coal where the tripper was currently located. I checked the status of the ROM (run of mine) system. The longwall was busily producing coal at top rate, with very little spare capacity between the longwall and where this tripper was located.

To cut a long story short…

It turned out that the tripper motor had burned out, so we had to change it. We got the replacement motor and headed up to the tripper. I had better explain…

The temperature outside was below freezing, the sleet was blowing almost horizontal, and we had to manually carry the motor up the gantry. We slung the motor on a pole with one person at each end of the pole.

Once we isolated the whole system and got the old motor off (with the sleet still hitting us in the face), we all agreed that we were not going to manually carry the faulty motor back down the gantry. We discussed a few options, then decided on a plan. Because the coal had already completely filled up below us, we decided that we would just drop the motor on to the coal “hill” just a few metres below us. It should hit the coal stack, then roll down another few metres into a gully in the coal pile. We could then retrieve it with one of the CAT loaders. Simple, right?

Well, it didn’t hit the coal stack and roll down. It just hit the stack and went straight down and disappeared from sight!

Funny? We didn’t think so at the time, but things do seem to get funnier with time.

Now, what about your story? There are just a few rules:

1. The story must be true
2. It must not promote an unsafe situation
3. Either it must have happened on a mining site or it must have something to do with the mining industry (ie mining equipment in an overhaul workshop, etc)
4. We reserve the right to not publish a story

I’m looking forward to hearing from you – get those keyboards going. Tell us your story by using the “Post a Comment” link below.

Calvin Close
Managing Director
miningreference.com – Australia’s Premier Mining Directory

ps We did manage to retrieve the faulty motor later.