Time for Fundamental Change
The year 2000 is a good time to reflect on how the mining industry has advanced over the years. This industry, with a strong work ethic, appears staid and solid when viewed from the outside, but is taking a hard look inward these days.
Several events of the last five to 10 years have made a significant impact. The slow decline in metal prices, part of the usual commodity cycle, was accelerated due to a major fraud. The ensuing destruction of investor confidence led to massive amounts of money leaving the mining sector. Consequently, exploration budgets have been slashed. What can we do now?
One contribution of the Bre-X fiasco has been that the industry has been forced to become more accountable and responsible for its actions. This scrutiny finally opens the door for the mining industry to change the way it does business and rebuild the tattered investor confidence and apathy that presently exist.
On a more general scale, we can look optimistically to the future. Current trends of improvement in living standards and technological advancements are not seen to be changing, and the associated population growth will require the production of natural resources on a scale never seen before.
Fundamental methodologies for exploration can finally benefit from the principals already laid down by the oil industry.
Geologists in the oil industry began years ago to measure the earth’s physical properties under much the same circumstances as the mining industry is in now. The geological log was scrutinized for consistency between geologists. Core was found to have been logged with the bias of the day towards a particular geologic theory or model. Further scrutiny led to the conclusion that different logs were created by different geologists under slightly different backgrounds, theories or influences. Additionally, interpretations varied dramatically between geologists, primarily because they were unconstrained in their thinking. It became apparent that, over many holes, the error bars on interpretation became greater and greater.
Investors simply began to lose faith in the traditional approach, because it was open to incredible discrepancies and even fraud. The investors of the day demanded that there be a permanent, repeatable record of the subsurface. This record could be re-approached and re-scrutinized at a later date for verification, or to apply other more sophisticated theories as they evolved with modern thinking and advanced techniques.
The first oil exploration holes were logged for physical properties in the late 1930s and early 1940s. The immense cost benefits were recognized immediately. As a result of these benefits coupled with regulatory demands, every hole drilled in the exploration for oil has been logged for physical properties ever since.
The physical properties of the rocks are used on a daily basis to constrain and quantify the geological interpretations of the hole, and more importantly the hole-to-hole correlation. The borehole tools that were first developed for large oil exploration holes have been advanced to a stage that, today, there are full suites of parameters with tools as small as 34 millimetres in diameter.
In writing guidelines for best practices, the consideration of adopting this key mandatory oil industry practice would be one of the most significant contributions to re-establishing investor confidence in the mining sector.
Sophisticated project management and visualization software has been developed through a consortium of oil industry giants to display all data sets in one space. This software, called GOCAD, is also capable of relating these data sets to each other. In other words the constraining relationship of the physical properties to geology now becomes the link that allows geology and geophysics, engineering and geochemistry to become fully integrated in three dimensions.
Communication of subtle details in all data sets ensures that the decision-making process is optimized and becomes more justified. Corporate directors can monitor the progress of entire multidiscipline projects in one medium. One of the most significant benefits of this type of management is the ability to utilize both historic data as well as current constraining data to accurately extend and predict new reserves in the mine environment.
Additionally, the technologies that have been used in 3-D distributed seismic systems have now been applied to electrical earth imaging. The result is that physical property contrasts can now be discriminated from the surface with accuracy and depth penetration that has not been seen before. Maximum value and more realizable returns can be expected from exploration expenditures today. We can systematically interrogate the ground in the search for orebodies while essentially sterilizing unfavourable ground in the process.
The mining industry can now take the next step.