The current “risky environment”, characterised by low commodity prices, rising mining costs and falling productivity, demands that companies have higher levels of technical certainty, states independent engineering and scientific consultancy SRK Consulting.

“Challenging economic conditions are making it more difficult to fund new mines or even sustain existing operations. Thus, explorers, developers and operators must ensure that the risk factors are well understood and mitigated,” stresses SRK chairperson and corporate consultant Roger Dixon.

He says that, as margins for proposed mining projects are under significant pressure owing to softer prices and higher costs, there is less room to deal with project risk.

“The key to success is to properly tackle the various modifying factors that stand between a prospective deposit and a viable mine,” states Dixon.

With a 40-year reputation, built initially on geotechnical engineering, SRK Consulting has developed into a global network of engineering consultants with in-house expertise ranging from exploration, mining and infrastructure engineering to water and tailings as well as social- and environmental-impact assessment.

Dixon highlights that integrating the various technical disciplines is the only way to fully understand project risk.

“Openpit economics, for example, are heavily dependent on the pit slope angle. To optimally improve this angle, a detailed knowledge of the structural geology is required, as well as rock characteristics and groundwater behaviour. The three areas of knowledge can then be integrated into the preliminary mine design, and pit improvement runs can be completed with confidence.”

He emphasises that this integration extends not only to technical factors but also the engagement of stakeholders, such as communities, governments and nongovernmental organisations, from the earliest possible stage in the planning process.

Additionally, SRK director and principal consultant in stakeholder engagement Vassie Maharaj says mining companies’ social licence to operate, and its acceptance in the host country and among host communities, are now ranked within the top ten operational risks.

“Therefore, companies realise this is a mission-critical area, but many do not know how to build and sustain those relationships beyond just doing what is necessary to comply with regulations or to get the permits they require.”

Maharaj points out that this situation poses real risks, as stakeholders are becoming impatient in their expectations of what the benefits of mining should entail, and are more assertive about these expectations.

“With the rising tide of resource nationalism, host countries and communities hold greater power than ever to withhold their acceptance of mining activities.”

Further, SRK partner Kurt Uderstadt notes that a related risk, which is drawing more attention is the impact of mining on water resources in host communities and countries.

“Contamination of water resources is perhaps the key environmental consequence of mining,” he says, adding that should a mine disregard integrated water management issues it will ultimately render it unsustainable.

Uderstadt emphasises that better planning at an early stage of a mining project enable mines to significantly improve the management of potable and non-potable water supply, surface drainage, groundwater supplies and groundwater ingress.

This would also significantly reduce mine developmental costs, improve regulatory compliance, avoid litigation and provide sustainable mine closure initiatives, he adds.

Dixon concurs, highlighting this approach to mine development reflects SRK’s aim of helping clients to plan mines with closure in mind.

He says this approach is increasingly demanded by national mining regulations across Africa.

SRK principal scientist and associate partner James Lake notes that most African governments now require that closure planning and liability costing receive significantly more attention from operations than was historically the case.

“In the past, mine closure often received insufficient attention during mine planning, making operations difficult and costly to close down, thereby often requiring significant materials rehandling to meet closure criteria,” he says.

Lake points out that African mining authorities are likely to scrutinise aspects, such as the liability assessment, more closely in future, and could hold mining executives liable for not implementing closure plans.

“More than ever, risk management in this increasingly regulated environment demands a multidisciplinary approach, based on technical excellence and expertise rooted in local knowledge,” Dixon states.

SRK will be showcasing it range of technical consulting services at the
Investing in African Mining Indaba taking place at the Cape Town International Convention Centre from February 9 to 12.