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Q&A with Cerro de Pasco Resources: Newly appointed CTO on the value of sustainable mining

Oliver Gray, The Market Herald
0 Comments| July 14, 2020

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Click to enlargeIf the World Economic Forum is any authority on the subject, the mining and metals sector – in its inherent connection to almost all industry value chains – “is an integral part of any foreseeable economy and society.” To that end, and with an ever-growing focus on a host of environmental challenges, companies around the world are feeling the increasing pressure to adapt their businesses in the pursuit of a greener, more sustainable future.

Yet, despite an array of technological advances, the traditional discover-develop-mine-depart process employed at any sort of mining operation has remained relatively unchanged, and invariably has one thing in common: huge quantities of waste.

Once a project has been exhausted of its assets, the typical next step is to pack up tools and move on to the next one. In the process, companies often leave behind expansive deposits of material generated from the separation of valuable commodities from bulk ore.

These materials, known professionally as tailings, then leach toxic metals and acid into the surrounding environment, polluting local ecosystems and resulting in an environmental issue that has largely gone unchecked.

While the logical question may ask what should be done with the unused material, Cerro de Pasco Resources (CSE: CDPR, Forum) is asking something entirely different: is this stuff actually waste?

The Quebec-based resource management company would argue no, it’s not. In fact, Cerro de Pasco considers it a potential gold mine – figuratively and in some cases literally – of overlooked assets that can be reprocessed for great reward given the necessary expertise.

As such, Cerro de Pasco recently appointed Professor Bernhard Dold as its Chief Technology Officer, who will lead the company in its work to optimise solutions for the re-treatment of tailings and other mine-related waste. As a verified expert in the field of environmental mine waste management, he’s published more than 70 papers, including three that focus on the company’s to-be-acquired Cerro de Pasco operation in Central Peru.

Cerro de Pasco announced a definitive purchase agreement for the project in late-November last year, which includes two operating companies, a precious metals leaching plant, a fully-operational tailings storage facility, and other associated assets.

But how does a company like Cerro de Pasco go about re-processing this waste, and is there really enough unlockable value to make it worthwhile? We spoke to Bernhard about his new position and what the future holds for the company.

Bernhard, thank you for taking the time to speak with us. Perhaps you could give us a brief run-down on your career and the focus of your work to date?

I was working the last 25 in the formation of acid mine drainage (AMD) and sustainable mining. Mostly affiliated to Universities as Fulltime Professor but supporting with my firm SUMIRCO directly the mining sector. Until April of this year I was Chair Professor at the Luleå University of Technology, Sweden, but my whole researcher life I was mainly working in the two important mining countries Chile and Peru, with clients like CODELCO, BHP Billiton, Anglo American, among others. With my research team, we studied the biggest mine tailings along the Andes to understand their behaviour from the very beginning directly after deposition towards final remediation and their behaviour in time. We evaluated different parameters like climate, mineralogy, deposition techniques and location (e.g. sea disposal) on their behaviour. The goal was to show that the process of AMD formation starts from the very moment of deposition and has an evolution in time, similar as the evolution of an illness with different symptoms. Understanding the symptoms, you can cure and treat the patient. However, after 25 years research in the field, I am convinced that you cannot prevent AMD from occurring, perhaps slow down the kinetics in some way, but completely prevent it would be to find the holy grail for immortality of the sulphide minerals. Oxidation is a key process in the global element cycles and therefore designed from nature to liberate efficiently elements and nutrients to the environment. Based on this insight, I do think that the current mining approach, with its definition of ore and waste, has no future. We have to re-think mining, and Cerro de Pasco is a very difficult, but exciting possibility to make a show case of a new mining approach.

You previously published a number of papers focusing on the Cerro de Pasco project, how did you come to be involved with Cerro de Pasco the company?

After studying mainly porphyry copper tailings from El Teniente, Chuquicamata, Andina, Bahia de Ite, which are for us low sulphide systems (about 2% of pyrite), I needed to understand a high sulphide system, like Cerro de Pasco (about 50% pyrite). Therefore, I arrived in 2003 as young Assistant Professor from the University of Lausanne, Switzerland, with 3 master students to Cerro de Pasco to study the different waste compartments of Cerro de Pasco, the Excelsior Waste Rock Dump, the Quiulacocha tailings impoundment and the Yanamate lagoon. During that time, we had logistic support from Volcan and CENTROMIN, as Excelsior and Quiulacocha was still the responsibility of CENTROMIN, and only Yanamate was managed by Volcan. The resulting papers you mention are then of course the main public information source for people interested in these assets and so also CDPR contacted me. During the last two years I gave my input to CDPR how I see Cerro de Pasco and they convinced me that they really want to make a difference in the mining sector. That was how everything started.

Aside from the obvious financial advantages, what are the other positives in the ability to re-process mining-related waste?

This depends very much how you address re-processing and here I refer only for the case of sulphide mining. As old mine waste origin from times with higher ore grades and lower extraction efficiency, many of those have now ore grade, as latter declined constantly in the last decade. Normally, the main asset mineral is addressed once again and then more or less the same tailings are produced, with some lesser content of the main target mineral. But the environmental problem persists, as for example the pyrite is not separated from the gangue mineralogy, so that from the new tailings you can also expect the formation of acid mine drainage. As you have to move the tailings for re-processing, this is a chance to deposit the new tailings in a saver way, perhaps with impermeabilization to prevent infiltration to the groundwater and better geotechnical stability. But this is in many cases also not done, as usually reprocessed tailings are then deposited in other active tailings impoundments.

But if you characterize your tailings not only for the original target minerals/elements, but for all minerals and associated trace elements and quantify them, then you might find interesting economic values in new critical target elements like REE, PGE, battery elements like Co, Ni, Li, or Mn. Additionally, a key for us is to see all the rest of the minerals as a potential georesource. For example, the pyrite is normally only seen as the trouble maker mineral producing AMD, but it can host many very interesting elements like Au, Ag, Cu, Bi, Co among others. At Cerro de Pasco pyrite represents about 50% of the whole material mined, therefore it is an important resource. It is used also for cement production, where you need 1-6 % of iron oxides, so that there are many considerable markets for pyrite. But pyrite is not pyrite, so you have to characterize it and separate it adequately from the rest of the gangue mineralogy in order to valorise it and minimize the amount of potential waste. Once separated the pyrite from the gangue, then you have at the end mainly silicates like quartz, feldspar and micas… nothing more than sand. These minerals, if you managed to separate well the sulphides from the silicates, you can use it as construction material (2/3 of concrete is sand), or if you have high quality industrial mineral you can market them separately. But again, you have to characterize it and then separate the minerals or mineral groups from each other to transform the whole material into resource. When you transform waste into different products, then the waste dumps and tailings will disappear with time and the threat for the society also, thus the social acceptance will increase. If you also manage to establish secondary industries associated to these new resources around the mining operation, then you will increase the work demand and more jobs will be produced, thus again, more social acceptance. Additionally, these diversified industrial complexes will be less sensible on fluctuations on the metal markets, thus, more sustainable and stable local economics can be achieved.

Do you think the re-processing of waste material is set to become a common occurrence among mining operations, or are the necessary skills and techniques still too niche to be mainstream practice?

I am convinced that in 10-30 years it will be standard in the mining industry to separate all the minerals and mineral groups extracted and produce different products from each part of it. The techniques are established and simply have to be combined in the most efficient way. It is not a technical problem, it is a mindset problem in the mining industry. The mine site settings will be more complex, but more efficient. For some more complex ore deposits, new extraction or separation techniques will have to be developed. And the extraction efficiency depends on the complexity of the ore. So, refinement at each mine site will be key for the resource efficiency.

Additionally, global developments will help the mining industry to make this transition. For example UNEP just published in 2019 a new report on Sand and Sustainability: Finding new solutions for environmental governance of global sand resources. This will increase the pressure on the sand resources and increase its price through to environmental extraction regulation, so that the sand contained in tailings will also increase its value. The predicted increase in cement production will additionally increase the demand in pyrite and other new application might surge for this mineral in future. Desulphurization of tailings is starting to be applied around the world (e.g. Aitik/Boliden, Sweden), mainly from the environmental perspective to prevent AMD, but the marketing of the georeouces of pyrite and sand and industrial minerals from mine waste is also now under development.

To what extent can these waste materials be re-processed? Is a zero-waste operation a stretch too far?

“Zero Waste” is a vision, a direction we want to go. It is our horizon. But it is clear that you will always end-up with a certain amount of waste you cannot commercialize and you have to take care. For example, for arsenic there is only a small marked and it is highly toxic, so that most of the arsenic you extract, you will have to deposit save and in a long-term stable way. But the volume and the cost will be controlled. The goal is to see a mine as a cow, were humanity nowadays takes advantage of every single part of the animal.

Todays mining operation act in a way, if translated into the butcher business, that from a 500 kg beef, only the 5kg of filet (1% in case of copper mining) are extracted and the rest of the cow would be thrown into a river, lake or the sea, with the obvious effect that the cadaver would oxidize and decompose and pollute the water.

Not only from the environmental aspect this would be not acceptable, but also from the economic point of view this would be a disaster. For the 495 kg of waste, considerable waste management cost would be implied, like incineration or land field management. The leather business would not have its basic resource. The tasty blood, liver or all other types of sausages would not be available among all the other global specialties made of all type of meet, not part of the filet. Homo erectus and Homo sapiens had about 2 million years to investigate the anatomy of their preys and to study the optimum way to use their resources. Sulphide Mining is about 100 years old, so that from an evolutionary point of view we are still in the very early phase of try and error. Therefore, we have now to study the anatomy of our ore deposits and find ways to extract the resources in a sustainable and efficient way.

On November 28, 2019, the company announced a definitive purchase agreement for the Cerro de Pasco project for roughly C$40 million in cash and other variable payments. How do you anticipate the completion of this deal will affect its current operations?

I would anticipate that the efficiency and management strategy will completely change. We will start to study the anatomy of the system and then develop the most efficient way to extract the resources.

In your role as Chief Technology Officer, what will be your primary focus once the Cerro de Pasco project acquisition is complete?

To start with, a thorough baseline study will be initiated to document the current contamination levels and understand the hydrogeological and hydrogeochemical system of the Cerro de Pasco watershed and surroundings down to lake Junin. Based on our previously studies we have a schematic model of the system, but we have to confirm it with recent data to fill the gaps of knowledge.
In parallel we will characterize the different resources in the different waste compartments and primary resources and develop the best extraction strategies and to valorise most of the material extracted. Special focus will receive the pyrite.
Additionally, we will explore new technologies for mineral processing and development of secondary products from our resources in place.

What do the next 12 or so months have in store for Cerro de Pasco?

Until the completion of the acquisition and due to the situation with Covid19 in Peru, we have to focus to develop the strategy based on the available data. Once we can access al installation and sample, then analytical part will start to characterize and develop the process in order to be able to start operation of Quiulacocha in 2021-2022.

Once again, thank you for taking the time to speak with us. Is there anything you’d like to add before we finish?

Yes, I think that the key of the success of CDPR will be to convince the local communities of Cerro de Pasco that CDPR is not Volcan and that only together we can make this a success story.
Thank you!

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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