Hector Espino Hernández
Government Affairs General Manager
Minera y Metalúrgica del Boleo
View from the Top

Strategic Planning to Overcome Production Challenges

Mon, 10/21/2013 - 17:24

Q: El Boleo mine presents a unique set of operational challenges. What are the main challenges and how is the company overcoming them?

A: El Boleo is an underground mine that is currently at the development stage. The mines that form El Boleo are made up of soft rock, which makes it a real challenge to maintain optimal conditions for operating modern mining equipment, such as continuous miners, conveyor belts, and roof bolters. As a large metallurgical project El Boleo needs to be self-sufficient in its energy and water supply; it will take a considerable amount of electricity (63.25MW) to run the operation. El Boleo is not connected to the local grid that supplies Santa Rosalia town. Instead, we will produce our own power on the operation using two different methods.

Normally, mine projects are heavily impacted by transportation costs. Fortunately, the El Boleo project’s positioning close to the Sea of Cortés and the Transpeninsular Highway allows us to bring in large quantities of materials that are required for our operation, as well as forward our product using both options. This represents a cost advantage for El Boleo. We will also use sea water in most of our processes: for leaching and cooling equipment, among other things. The fresh water used for the SX-EW process and facilities will be obtained through desalinization plants. Because El Boleo is located in a desert climate, there is always a shortage of fresh water and rain, nevertheless through such techniques we will be able to use modern mining techniques and operate a high tech processing plant. There will be large desalinization plants that will produce enough fresh water for some operations and most services on site.

Since the ores and wall rocks on El Boleo are soft, there is the opportunity to increase our involvement in surface mining to complement the activities on the underground mine. Hydrometallurgical technology is not cheap compared with traditional flotation technology, but it is environmentally friendly. For example, if we had chosen to use smelting or roasting methods they would have produced SO2 gas, which enters the atmosphere and causes pollution. However, on El Boleo we use hydrometallurgical techniques at temperatures below the boiling point of water. This means that we will have a lesser environmental footprint than if we were to use other kinds of technology. Vat leaching, solid-liquid separation and SXEW operate as a closed-circuit system. This means firstly that we can recycle the water from the plant, and secondly that the tailings, after extracting the base metals, will be neutralized and carried to a tailing store facility. Only the cooling water that we use for the equipment will be discharged, in line with Mexican regulations.

Q: What is the impact of the partial withdrawal of Baja Mining from the project, now holding only a 10% share, given that the company provided a lot of the expertise?

A: Some of Baja Mining’s personnel are still at El Boleo, now working for Minera y Metalúrgica del Boleo. As with many foreign projects in Mexico, they start out with a lot of expats, but as the projects take hold and stabilize Mexicans tend to take over the management. Today there are Mexican technical experts working on the project as well. There have also been a significant number of Korean engineers working on the project. KORES, which owns a 90% share in the company, is administered through the South Korean government. The bottom line is that it has been in many ways beneficial for the project to bring in Korean investment and involvement. El Boleo is a technologically challenging project, and KORES was able to provide the required funding for it to continue.

Q: What are the benefits for the project of the partnership between Baja Mining and KORES, aside from the latter’s financial input?

A: KORES is interested in the project as long as it can produce copper at a more competitive price than the copper that is available in the market. It is likely that this represents the most significant investment in Mexico by a South Korean company, and the investment is probably one of the top three investments in the mining industry in Mexico on the whole. It is anticipated that around US$600 million will be invested this year, with US$1.8 billion due to be invested in total. The technology coming out of the project will also be very important for other projects that face similar challenges.