While working on a project recently, I had one of those realizations about how a ground shift in mining has happened over the last decade, and I don’t think our industry has responded adequately. It is a result of a host of pressures all reaching a peak at the same time, and I think understanding this will be key to advancing projects from pre-feasibility to production.

Historically, mining development has typically been driven by a small management team planning and strategizing, while contractors and consultants like myself provide specific scopes on everything from permitting to robotics and automation. Contracts are given out on a “per scope” basis, with the deliverables being dictated by the mine’s management team and provided to each contractor/consultant piecemeal.

There is typically sparse communication between consultants other than key deliverables and summary meetings. Constant risk communication and strategizing is not inherently part of the requested scopes, but is instead evaluated at key deliverable milestones only (and some are not considered at all until later development stages). I think these days of fragmented assembly of unintegrated, bespoke pieces of a mine are coming to a close due to the changing nature of what is needed to be “successful” in our world today. Simply showing economics is not enough; the sum total of the proposed project (environmental impacts, societal integration and closure) has to work.

The critical path

The critical path for successful mine development has become increasingly weighted towards issues related to permitting, closure, mine finance and changing economics (green energy, logistical lines, etc.). By these issues’ very nature, they are interrelated and cannot be developed by teams in a vacuum and then assembled. If the work to understand these risks is done at a later date, or by a team that is not embedded with the design team, there can be existential issues to the mine’s design.

These changes to mine development have resulted in the recent CIM Environmental, Social and Governance Guidelines for Mineral Resource and Mineral Reserve Estimation, which was adopted by CIM Council on Sept. 8, 2023. These guidelines contain guidance for how some of these risks should be evaluated during resource evaluations, and have significant implications for the work we do moving forward. I highly recommend reading this document if you are a miner.

As an example of how this can manifest: imagine how a resource geologist, given the task to optimize a mine plan, may produce optimal sequencing during resource estimation. These assumptions are carried through to the mine layout, and the environmental consultant hired after the layout was completed later discovers that the mine design assumptions are rendered utterly impractical by a known regional specific environmental constraint, such as endangered species habitat.

Given the timelines of mine design and financing, this could result in a fundamental design flaw that may cause an earlier-than-expected mine closure due to environmental issues that are difficult to avert at this stage. There are many examples in the last five years of mines closing earlier than expected as a result of early design decisions having become a liability that significantly reduces the mine’s overall lifespan.

The holistic mine

A successful mine cannot be a series of separate scopes connected together, but must be a complete project where, on an ongoing and trackable basis, each group is talking and designing to de-risk the overall project. It requires strong teams that not only trust each other but understand how their task goals are related to the project’s critical risks at key milestones. This fundamentally changes how we should approach team building and project development from Day 1, and this understanding will be what sets proposed projects apart.

This presents challenges to everyone on the mining spectrum, from juniors to corporate heavyweights. Diverse team building and strong vision leadership become as important as the resource for development success as the need to anticipate these risks grows. A culture of risk communication and risk mitigation through key actions and design considerations is a must.

This has implications on how and when mines go to market for providers for contracting, and how they ask their teams to work and communicate. It requires careful scheduling, communication, scoping and—importantly—the setting of expectations by mine development management teams on what matters at each stage of development. It even changes how we reward performance bonuses and what they are targeted towards. To really be successful, we need to develop holistic projects that consider all facets of the mining life cycle as early as practicable.

This paradigm shift has been further exacerbated over recent months by the increase of interest rates, with its corresponding result being mining investors adopting a stance of low risk tolerance. Everything I have outlined above is a risk to investors if it is not understood by mine developers and management teams, and investors are looking to see if they understand this. True comprehension of this evolving dynamic is what will separate projects that get to production successfully from projects that have studies that look great on paper but languish in financing.

Morgan Schauerte is a mining environmental consultant who works at the intersection of finance, design and the environment. He currently works with Minerals, Mining and Metals team at Stantec.