Article first published in Mexico Business News, April 2024. Reprinted with permission.
In today’s high-cost mining environment, performance is critical. Yet many mine operations in Mexico are not running optimally. Recently, Ausenco worked with the team at Luca Mining Corp. to improve the performance of one of its Mexican mines. Below are some key lessons learned.
A multitude of reasons can contribute to the underperformance of a mining operation, including designs not being updated when ore characteristics change, underperforming equipment and technology, or sub-optimal maintenance practices.
Unfortunately, few producing operators have the data they need to understand where performance is suffering. Operational and process data is siloed or kept in excel sheets, and benchmarking data is out-of-date or incomplete. In addition, few operators have the visibility they need to accurately pinpoint performance challenges.
A case in point
In 2023, Ausenco worked with Luca Mining to evaluate its Campo Morado operation. This underground multi-metal mine in Guererro produces copper-zinc-lead concentrates, with infrastructure and equipment capable of processing 2,400 tons of ore per day. The operation was re-commissioned by the predecessor company in 2017 but operating margins were not consistent.
When Luca Mining’s new management team took over the asset in 2023, they firmly believed in the mine’s viability, but recognized the operation wasn’t meeting its performance objectives. Long-term profitability was in question and investors were concerned about the operation. Luca Mining was keen to identify performance improvement opportunities and turn the operation around.
The team at Ausenco started with a “back to basics” approach, gathering available data to define new metallurgical lab testing work, changing the milling circuit and fine-tuning the blend coming out of the mine. The team focused on improved flotation control, calibrated the instruments, and tuned the control loop. By replicating the plant performance in a metallurgical lab on site and at an external lab (ALS), it was recommended that a better reagent dosage scheme could dramatically improve performance. Changing the operation from a complex sequential flotation flowsheet to a simplified two-product flowsheet resulted in higher recovery in all concentrates.
Data makes a difference
The results have been significant. The changes made to the process parameters - without using sustaining capital - enabled Campo Morado to increase overall zinc recovery from 75% to 82% and raise the final concentrate grade from 45% to 51% zinc (dependent on reliable ore feed from the mine). The bulk concentrate produced is achieving copper recovery rates of more than 70% compared to a historical range of between 35% and 40%.
This success was the result of putting data at the core of planning and using it to drive decision-making. The team updated the project’s benchmark data and presented optimal metrics, parameters, and sequences to the operation’s client team. Ausenco’s experts also reviewed what data to monitor and how to respond to variations outside of the required parameters.
“With the work done in recent months by our colleagues at Ausenco we now have, for the first time in the history of this operation, an understanding of how to correctly operate Campo Morado to maximize profitability,” noted former CEO Mike Struthers. Interim CEO Ramon Perez added, “The execution of a new mine-to-mill program, an effective blending strategy, and multiple initiatives in the processing plant, will translate into major improvements to the bottom line of the operation.”
Ready for continuous improvement
Luca Mining and its team at Campo Morado are in a strong position to build on their success with further performance improvements. They now have the data and have identified operational changes needed to improve returns on future investments. Along with performance improvements, they also have a more reliable forecast upon which to base capital expenditure plans and are confident in their long-term profitability.
Working together has also led to new opportunities. For example, Ausenco is working with the operation to reconfigure the flotation circuit to achieve copper-lead separation and produce three saleable concentrates. This is the result of investigative processes and data-driven decision making in Ausenco’s partnership with Luca Mining, which is expected to further increase profitability.
Key learnings
Based on Ausenco’s work at Campo Morado and many other mines around the world, here are three key lessons to consider.
- Don’t wait to look. Find opportunities for performance improvement as early as possible to increase the value of your operation and build a foundation for further enhancements. The longer you wait, the harder it is to fix.
- Let data lead the way. To fully understand root causes, interdependencies, and measures of performance, collect the right data, at the right time, and perform the appropriate analyses.
- Start small and build from there. Consider starting with smaller, high impact improvements that can help build up balance sheet strength and confidence in the short-term while creating the right performance capabilities for the long-term.