The emerging skills shortage in the minerals industry

The emerging skills shortage in the minerals industry - potential constraints on future sustainable development John Thompson COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY

Outline n n n Mining Industry – changes and challenges People – demographics and demand Exploration – geoscientists and skills n Area selection n Target generation and testing n Evaluation and development Critical skills – concerns Constraints on development Opportunities COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 2

Industry – the last ten years n n n The resurgence of the resource business Supply-demand – high commodity prices Opportunities and challenges: Markets – capital and consolidation n Discovery n Cost escalation n Technology n Politics, environment, health and safety, communities - sustainability n COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 3

Supply – demand n Supply constraints n Low discovery rate – relative to expenditure n n n Limited effective grass roots exploration, technical challenges, land access, people Cost escalation – materials, energy, labour Development & mining – labour, skills Politics and social/cultural issues Demand n China, India etc…. Future? Sustained prices? Volatility COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 4

The people picture n Demand New projects and expansions n Limited hiring – a lost decade n n Demographics “Retirements” – loss of knowledge n Job pressure – early retirement, life style n n Competition Location n Image n COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 5

Exploration – people skills n The role of the geoscientist Early stage – generation n Projects – evaluation n Business – management n COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 6

Early stage – Generation n n Understanding the target – metallogeny Using available public data Developing the concept Testing the concept Acquiring the “right” data COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 7

Project exploration n Target definition n n Intelligent collection and use of data Target testing – drilling Logging drill core/chips n Interpreting results n n Exit strategy COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 8

Understanding the model n n n Classic 2 D geological models Extrapolation to 3 D Building from experience Resisting dogma – dealing with uncertainty Empirical v theoretical models e. g. , IOCG – major deposit class but no adequate exploration model COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 9

Data and modeling Targeting: n n n Data quality Variables Assumptions COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 10

Interpretation 3 D Models: n n Organize & integrate data Interrogate & visualize results COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 11

Project development n n n Communities Resource evaluation Geometallurgy Mining and processing Environment COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 12

Using the data n Exploration to resource Understanding deposits n Delineation, evaluation n Resource model n n Resource to mine Geotechnical data n Ore characterization n Waste characterization n Geometallurgy COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 13

Geometallurgy n n n Define mining/processing characteristics n Start-up risk mitigation n Mine site optimization and integration Predict mining/processing results from geological characteristics A new skill set using mineralogical and textural data COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 14

Data to Predictions COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 15

Geometallurgy n Current geometallurgical tests Relatively expensive – hence limited to a few (composite) samples n May not reflect or define inherent variability n n New cost-effective methods – better use of mineralogical, chemical and physical data n Generate enough data to be spatially representative and predictive COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 16

Geometallurgical models Incorporate data into resource models n Potential n n n Liberation Total economic optimization Optimize flowsheet/plant size Reduce technical risk COPPER - COAL - ZINC - GOLD - ENERGY Grinding Recovery Crushing Disposal & environment Blasting TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 17

Critical skills - concerns n Field Observations – rock, drill core/chips, outcrops n Interpretation – regional to project scales n n Experience – time on the rocks n Leadership n Technical and non-technical skills COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 18

Loss of field skills n Fundamental for exploration Observations – outcrop to drill core n Experience – 3 D interpretation n Lack of emphasis in education Inadequate training - industry/government COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 19

Leadership n Challenges Range of projects n Managing uncertainty n Risk analysis n Team leadership n n Attributes and skills Presentation and salesmanship n Cultural/social awareness n Determination and flexibility n n A people business COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 20

Constraints on discovery & development n Discovery People and budgets (market conditions) n Skills, expertise and determination n Politics – land access n n Development Land-politics, energy, water, and costs n People – mining engineering and metallurgy n Finding the “A” team n Creativity and rigour (geometallurgy!) n COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 21

Constraints on different players n Majors Good budgets – focus, speed, awareness? n Expertise and teams – commitment? n Approach/ability to work with juniors? n n Juniors Funding – understanding the options? n Staff – business and technical demands n n Balanced portfolios Breadth v focus – frontier v mature n Technical risk v non-technical risk n COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 22

Opportunities n Companies Attract and retain the right people n Use people in the right place n Career development and flexibility n Invest in education – build capacity n n Universities Provide fundamental education n Introduce breadth and application n COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 23

For the geoscientist n Mining industry – Enormous opportunities – career advancement n Adventure, diversity, challenge n n Geoscientists are capable of anything Quantitative and qualitative science n Interpret vast amounts of complex data n Deal with uncertainty n Work with people n n Leaders – CEOs…… COPPER - COAL - ZINC - GOLD - ENERGY TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY 24