Article first published in Mexico Business News, June 2024. Reprinted with permission.

For nearly 30 years, the story of Mexico’s mining success has been characterized by an almost continuous stream of major greenfield capital projects. Yet, many of those assets are now beginning to age and throughput is starting to lag best practice. Not surprisingly, many mine owners are examining their existing operations to find opportunities for improvement.

In part, decreasing throughput is often related to the age of the plant. Many mines in Mexico are now well past their expected design lives and parts are starting to wear. Technologies have become outdated, pushing older mines further behind best practice. Expansions to ore bodies at existing facilities usually also have challenges related to lower grade and increased ore hardness. New processes have emerged to speed up the comminution flowsheet, improve recovery rates and enhance ore concentration. As a result, many older mines are now performing below industry benchmarks (and often below investor expectations).

At the same time, the external market has also changed. Stakeholders, particularly the government, are keen to see existing mines reduce their overall carbon footprint. Permitting in Mexico has become more challenging for new mines, making the optimization or expansion of existing assets more appealing. Given the current economic climate, investors and owners are interested in capturing as much value as possible from their existing assets.

With metals prices currently on the upswing and new greenfield development somewhat constrained by the new mining regulations, I believe now may be the perfect time to explore opportunities for optimizing, modernizing and upgrading Mexico’s current mining operations. Indeed, the conversations we are having with many of Mexico’s mining leaders suggests many are already exploring their opportunities.

Three ways to improve

Our experience working with mine leaders across Mexico and around the world indicates there are three main levers that owners of operating mines can pull to improve productivity, efficiency and throughput:

  • Asset optimization. This is about improving overall equipment effectiveness (OEE) and reducing the total cost of ownership (TCO). In these situations, we work with mine operators to capture their current data and then compare it to industry standards and best practices (using our own proprietary software and data) to find opportunities for improvement. Typically, mine owners are finding they can increase availability by 3% to 7% and productivity by anywhere from 10% to 25%. At the same time, they are seeing maintenance cost reductions of between 8% to 20% and spare parts inventory reductions of up to 10%.
  • Process optimization. In many cases, significant improvements can be made by adjusting or tweaking the process flowsheet. As my colleague Lorena Montano explained in a recent article in this publication, we helped Luca Mining’s Campo Morado operation execute a range of changes including updating their milling circuit, improving their floatation control, calibrating their instruments, tuning their control loop and adjusting their reagent dosage scheme to enhance their process. Overall zinc recovery has increased from 75% to 82% and final concentrate grades have risen from 45% to 51% zinc, while copper recovery rates in the bulk concentrate produced is up to more than 70% compared to a historical range of between 35% and 40%.
  • Debottlenecking. This involves identifying places where material handling bottlenecks are limiting circuit throughput. These are issues that could arise anywhere from the mine face through to the port. In this article, we use a project we led for Newmont Goldcorp’s Peñasquito operation in the state of Zacatecas to show how mine owners can define a set of short-, medium-, and long-term strategies that allow them to de-constrain their mill throughput and optimize their crushing and HPGR operation. But similar improvements could be found at almost every stage of the value chain. Not surprisingly, many mine owners around the world are now executing dynamic debottlenecking initiatives right across their operations.

Low-cost, high-value

One of the great benefits of focusing on optimization is that much can be achieved without a significant amount of upfront capital expenditure. Indeed, some of the opportunities we uncover for our clients are zero-cost – things like changing their screen deck aperture size at the next changeout, or low-cost - replacing pump liners on a more regular basis – but deliver valuable cost and sustainability benefits.

Many of the other opportunities for optimization can often be met without needing any capital expenditure. We frequently work with clients to help them identify, prioritize and sequence their optimization initiatives to achieve incremental progress using operating income alone. So, rather than making one big multi-million-dollar investment, we help them identify a list of 20 items they can do for less than $100,000 each – once they have the income to spare.

Let the success story continue

Mexico’s mining success story was built on highly successful greenfield capital projects. But I believe the industry’s future story will largely be based on the sector’s ability to maximize the throughput of existing operations while minimizing carbon emissions and costs.