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Contracting business heats up

June 1, 2011
by Norm Tollinsky
In: News with 0 Comments

Shaft sinking and mining contractors in Northern Ontario are on a roll.

“It’s never been this busy,” said Dave Hansman, senior vice presidentof North Bay’s Redpath Group. “The last time we had close to so many shaft projects was back in the flow-through days in the late ’80s.”The turnaround came as a bit of a surprise, said Hansman, who looks after tendering, contracts, project controls and inter-group liaison for the North Bay mining contractor. Prior to the financial meltdown in 2008, “we had only one shaft project and even our competitors weren’t that busy.”

It’s a different story today as Hansman races around the globe keeping track of projects in a dozen or more countries – from Canada and the U.S. to Chile, Papua New Guinea and Mongolia.

“Our market intelligence has identified more than 60 shaft projects worldwide, including close to 20 in India alone,” said Hansman. “Hindustan Zinc has between four to six shafts planned, Hindustan Copper has four and Tata Steel has some.”

The Redpath Group is busy in Quebec, Ontario, Manitoba and Saskatchewan, sinking shafts, raiseboring and doing development work for Goldcorp, HudBay Minerals, North American Palladium and Potash Corporation of Saskatchewan. A major mine development and construction contract at Vedanta Resources’ Mount Lyell Mine in Tasmania was announced in January and, this summer, Redpath commences work on a 10-metre diameter production shaft at Ivanhoe Mines’ Oyu Tolgoi copper-gold project in Mongolia.

In Quebec, Redpath is in the midst of sinking a seven-metre diameter, 725-metre deep shaft and driving a four-kilometre exploration ramp for Goldcorp’s Éléonore project on the shores of the Opinaca Reservoir in northern Quebec.

“It’s one of the most significant gold discoveries in Quebec in recent times,” said Guy Hubert, Redpath’s area manager for Quebec. “It’s a very prospective area with a lot of potential. Goldcorp has a significant position in the area and I wouldn’t be surprised to see other projects brought into production.”

Located halfway up James Bay and 300 kilometres inland, the site poses significant logistical challenges as heavy equipment has be brought in by ice road in winter and barged in during the summer. A second production shaft going down 1,500 metre scould be started by the end of the year, but a contract has yet to be awarded, said Hubert.

Red Lake

Redpath’s biggest project in Ontario is a five-kilometre rail haulage drift from the Reid shaft at Goldcorp’s Red Lake Complex to the Cochenour shaft for the development of the company’s Bruce Channel deposit. “In conjunction with that, we’re slashing out the existing Cochenour shaft and deepening it,” said Paul Healy, general manager, Canadian operations. Approximately 200 Redpath employees are currently working in Red Lake.

In Manitoba, Redpath is sinking a 6.1-metre diameter, 857-metre deep ventilation shaft for HudBay Minerals’ Lalor Project and driving a three-kilometre ramp to Lalor from its nearby Chisel North Mine. The shaft will be fitted with a skip and used for hoisting 1,500 tonnes per day for approximately one year as an alternative to “having to truck all the material up the ramp we’re driving,” explained Healy.

A six-metre diameter shaft at Potash Corporation of Saskatchewan’s Scissors Creek project near Rocanville, Saskatchewan, is being sunk by Redpath in a joint venture with Thyssen Mining. Challenging ground conditions characterized by layers of unconsolidated water bearing strata require the use of ground-freezing techniques and high-pressure shaft liners.

Traditionally, temporary headframes are used during the sinking operation and only when sinking is complete and the ground thaws is a permanent headframe erected. For Scissors Creek, an alternate methodology was developed whereby the freeze circle is bridged by the headframe, which is supported on piles spanned by massive concrete reinforced beams below grade and external to the ground freeze circle.

The method reduces the cost of the project by eliminating the requirement for a temporary headframe.

Also busy

Dumas Contracting Ltd. of Timmins, Cementation Canada Inc. of North Bay and DMC Mining Services of Richmond Hill are also busy.

According to Cementation Canada president Roy Slack, the sudden surge in mine development activity is the result of a confluence of factors.

“During the economic downturn, a lot of projects were put on hold and, now that the economy has improved and metal prices are up, we’re getting new projects, but we’re also getting the projects that were put on hold.”

On top of that, the potash industry is on a tear and mines in Chile and Indonesia are going underground.

In Canada and the U.S, Cementation Canada is sinking nine shafts. It’s also doing one in Indonesia in a joint venture with its sister company in Australia. Cementation’s South African group is working on six shafts and the Australian group is working on four, for a grand total of 20 active shaft projects.

“We’re busy and we think there’s more to come,” said Slack. “We looked at the market for the next three years and we see 10 more shaft projects in Canada, five in the U.S., five in Chile, another five elsewhere in South America, quite a few in India and a number in Russia and China.”

Cementation Canada is in the process of sinking two shafts for Potash Company of Saskatchewan’s Picadilly Mine in New Brunswick. In Ontario, it’s just started a winz at Goldcorp’s Hoyle Pond Mine in Timmins and is working on two shafts at Northgate Minerals’ Young-Davisdon Mine in Matachewan. “One is a deepening of an existing shaft. The other is a borehole hoisting setup that will become a production shaft,” said Slack.

In the Sudbury camp, Cementation is continuing development and shaft refurbishing work at Vale’s Totten Mine, while in the Canadian Arctic, it’s busy at Newmont’s Hope Bay Mine and Rio Tinto’s Diavik Diamond Mine.

“In the U.S., we’re doing a winz for Hecla Mining’s Lucky Friday operation in Idaho and at Resolution Copper (in Arizona), we’re sinking one shaft and preparing to deepen another,” said Slack.

Dumas

Dumas Contracting, once known as a local contractor focusing on Timmins and Quebec’s Abitibi region, has aggressively expanded its global footprint with operations in Guatemala, Mexico, Peru and in Burkina Faso in West Africa.

Timmins continues to be a key market for Dumas, notes Wayne Mohns, the company’s general manager for Ontario and Western Canada. “We’re working at two Goldcorp properties – Dome and Hoyle Pond. We’re also working at Xstrata Copper’s Kidd Creek Mine. On these jobs,we have roughly 250 people. We’re also at Lake Shore Gold and Northgate Minerals’ Matachewan property. All together, we have approximately 500 people working in Ontario.”

In Quebec, Dumas is sinking shafts for Iamgold’s Westwood project and North American Palladium’s Sleeping Giant Mine, and mining at Aurizon Mines’ Casa Berardi operation.

In Manitoba, the company has just won a contract for a 6.7-metre, 3,000-foot production shaft for HudBay Minerals’ Lalor operation.

“We have a letter of intent, we’re doing the engineering, getting all the long lead items – the Galloway, the jumbo and dealing with engineering companies on the headframe,” said Mohns. Actual shaft sinking for the Lalor production shaft is scheduled for November.

In October 2010, Dumas purchased Peruvian contractor L&L Contratista Minera and in February, it acquired International Specialized Mining Services, an underground mining contractor based in Mexico. Current work in Central and South America includes three shaft-related jobs in Peru and work for Goldcorp’s Marlin Mine and Cerro Blanco operation in Guatemala.

A majority interest in Dumas Contracting was acquired by Swiss-based Pala Investments in October 2008.

DMC Mining

Redpath and Cementation aren’t the only Ontario mining contractors to benefit from the dizzying pace of mine development in the potash sector. Late last year, DMC Mining Services, a wholly owned subsidiary of Quadra FNX, was awarded a $400 million contract to sink two shafts at BHP Billiton’s Jansen project near Saskatoon. The company will sink two shafts at Quadra FNX’s Victoria project next year, including a 6,000-foot ventilation shaft and a 7,000-foot production shaft. DMC is also doing development and construction work in Timmins, Red Lake and in the U.S., said president Bill Shaver..

Getting all of this work done poses several challenges, not least of which are manpower and equipment procurement.

“Recruitment, training and retention are the biggest issues being faced by the mining industry,” said Redpath’s Hansman. “It’s not unique to us. It’s the number one challenge that we’ll face. We’re being as aggressive as we can, but it’s never good enough.”

Cementation hasn’t had a problem so far, said Slack, “but we anticipate it’s going to be more of a challenge because we’re busy now and we see more work coming up.”

Shortages of skilled labour also affected Cementation in the period leading up to the collapse in 2008. “So, we’ve been through this before,” said Slack. “At Nickel Rim, we did a lot of training. We had a high rate of advance and a great safety record, so we’ve proven that it’s possible.”

Having reasonable lead times will be important.

“Our clients have to realize that if they want something to happen tomorrow, it’s going to be a challenge,” warned Slack.“You need the proper amount of time to plan a project, get the gear, line up the people and do the necessary training.”

Rounding up trucks, jumbos and load haul-dump equipment is also challenging. Dumas recently added a second shift at its shops in Timmins and has equipment being remanufactured at as many as nine rebuild shops in Timmins, Sudbury and Quebec, said Mohns.

“The issue we have is that suppliers will commit to remanufacturing a piece of equipment by a certain date, then phone to tell us that one or more of their mechanics just quit. You can’t beat up on them though because we’re experiencing the same difficulties.”

Despite all of the challenges, no one’s complaining.

“We’re certainly happy with the way things have turned out over the last six months or so, compared to where we were in 2008 and 2009,” said Healy. “It’s nice to see that things have turned around the way they have.”

www.cementation.ca
www.redpathmining.com
www.dumasmining.com
www.dmcmining.com

 

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