Inflationary pressures are affecting all businesses. While many businesses can pass this additional cost along to their customers, the mining business cannot. In many cases, they do not set the prices for the minerals they produce, so increasing costs eat away at profit margins. The price of copper today is roughly the same as this time last year ($4.40/lb), gold is up 5% or about $100/ oz, and iron ore is down $20/dmt. With some commodities that are in high demand, such as potash and coal oddly enough, producers are certainly in the driver’s seat these days. Spot prices for both have tripled in the last year and some of that is attributable to the war in Ukraine, but not all of it.

The price of fuel has everyone’s attention. Many believe it’s artificially imposed through excessive regulation. Permitting a refinery or pipeline may be as difficult as permitting a mine these days. Prices for diesel fuel in the U.S. have climbed $2.40/gal ($0.63/l) in the last year. While the situation in Europe with natural gas is an anomaly, in the U.S., spot prices for natural gas have climbed from $3 per million Btu (MMBtu) to $7.45/MMBtu in the last year. Increasing natural gas prices directly impact the cost of electricity, ammonium nitrate and cyanide, not to mention the natural gas the mines use on site.

What can mines do to combat escalating fuel and energy costs? Diesel-powered haul trucks have been identified as the heaviest emitters at open-pit mines. They consume a lot of diesel fuel, tons by the hour. Mining companies and original equipment manufacturers (OEMs) have been looking at alternatives. Truck OEMs are discussing fuel-agnostic haul trucks. The mining company tells the OEM what they prefer and they will build it for them. The next largest power consumer at the mine site is the plant, especially the crushing and milling circuits. Thanks to technology improvements, strategic partnerships and advanced R&D, plant engineers today can make continuous incremental improvements that will compound over time. Meanwhile, OEMs and academics are looking for revolutionary solutions that will dramatically improve the efficiency of mineral processing projects.

All these efforts, which will require an investment, will likely have a profound positive impact environmentally with lower emissions and water consumption. They will also reduce energy consumption and costs. Enjoy this edition.

Steve Fiscor, Publisher & Editor-in-Chief, E&MJ