The expansion of an operating mine is usually driven by two main factors: adapting to changing ore characteristics and metal grades, and the potential to boost cash flow by increasing production when commodity prices are favorable. However, several challenges that impact expanding mine operations are:
- Obtaining new permits for the increased production
- Fluctuating metal prices
- New legislation requiring mines to meet ESG criteria which also enhances a project’s attractiveness to investors
As highlighted in this article, many leaders in Mexico's mining sector focus first on optimising their current operations at the process, asset, and logistics levels to maximize efficiency and increase throughput. This not only adds value to the existing investments but also lays the groundwork for future expansions by establishing a strong base of operations and well-calibrated processes.
Ausenco’s Mexico office has been a reliable partner for several mining clients looking to grow their operations. We have supported clients in expanding their footprint, operations, and throughput. Here are five important areas to consider when planning a mine expansion:
- External Constraints: One of the biggest challenges facing mine owners in Mexico is access to water. Several expansion projects have the necessary funding and resources but cannot secure the necessary water permits. It is crucial to identify and understand external limitations early, as they can greatly affect your expansion strategy, design, and the technology needed to navigate these challenges.
- Technology Trade-Off: Although conventional flowsheets minimize risk in expansion project development, opportunities exist to explore new technologies by challenging the status quo. Adopting newer technologies in conventional flowsheets could be the best alternative for addressing external constraints like water shortage. For example, in water-scarce regions in Mexico, coarse particle flotation with dry stack tailings could be an excellent process alternative for reducing water demand. Ultimately, the goal is to strike a balance between capital investment and desired production levels.
- Implementation: Often, process plant expansion happens within or alongside ongoing operations, which adds complexity and requires orchestration unique to the asset and operation. The implementation process is critical to minimize production disruptions during expansion. Careful planning is necessary to synchronize the tie-ins with planned maintenance downtimes. Successfully managing an expansion within an operating plant requires strong project management skills and a clear understanding of the supply chain.
- Baseline Capacity: Understanding your mine’s baseline capacity - the maximum sustainable processing ability within the current ore source - is key to planning an expansion. Determining the baseline capacity is essential to establishing the design foundation for the expansion. Once this is known, you can then develop the optimal debottlenecking strategy needed to increase throughput and stabilize the operation.
- Talent: Building and expanding a mine requires skilled professionals. Finding the right talent locally and building expertise within Mexico is essential for sustainable growth in the mining sector. A talent shortage can slow down new engineering projects and create challenges for ongoing operations, making it vital to secure the talent needed for successful expansion.
At Ausenco, we work closely with mine owners and executives to design and execute complex mine expansions in Mexico and worldwide. In our experience, when done effectively, expansions can deliver substantial benefits for mine owners and their investors, especially when considering the challenges of obtaining new mining permits in Mexico.
If you operate a profitable mining asset in Mexico, it is important to consider the potential for expansion. Investors are likely to ask you about your growth strategy, making it an excellent time to have well-informed ideas and potential solutions ready.
Article first published in Mexico Business News, October 2024. Reprinted with permission.