Compared to other businesses, the mining industry stands out for several reasons. Unlike the manufacturing sector, mining is a risky sector with lots of uncertainties. However, high risks imply high returns, which is why mining is so incredibly fascinating. It is important to understand mining project risks and the cyclical nature of mineral price fluctuations. Since minerals are considered natural resources, they are non-renewable or difficult to reproduce. Additionally, when it comes to strategic resources and energy, geopolitical, socioeconomic, legal, and regulatory concerns are also frequently influencing factors.
Mineral projects generally involve multiple disciplines, including geology, mining, processing, smelting, environmental, social, technical, and economic. Some projects are remote with insufficient infrastructure, and therefore require long construction periods and high investment. A project's impact on the ecology and nearby communities must also be considered.
The typical life cycle of a mineral project begins with target exploration, followed by the delineation of the orebody to define the resource area, at which point a decision on whether to proceed with the project typically involves a scoping study to confirm the mineral resource. With the progress of the project, a pre-feasibility and feasibility study is usually conducted to assess its viability. This involves processing and metallurgy tests and mining design to support the mine production. After several years of mining, the project reaches the stage of mine closure and rehabilitation to restore the environment and natural vegetation. As the project develops and the value increases (different from the valuation), so does the confidence or credibility in the mineral project.
For mineral projects, the focus is typically on mineral resources and reserves. From geological exploration and resource estimation to ore reserves, several modifying factors must be considered, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors. These are the primary technical aspects of a mining project that need significant attention.
Mineral projects need to concentrate on gathering data about mineral resources (exploration) and verifying the reliability and representativeness of the data to minimise technical risks. As well as guaranteeing a comprehensive understanding of the geology and orebody, the processing and interpretation of the data (resource estimation) also necessitates the use of trustworthy data processing technologies for validation. Defining mineral resources is a significant technical risk that requires careful consideration. The Reasonable Prospects For Eventual Economic Extraction (RPEEE) is the widely-recognised definition of mineral resources, and different standards and insights exist both domestically and internationally when classifying resource categories. Currently, the commonly applied international standards include the JORC Code, NI43-101 Standards, and the SAMREC Code.
The resource-to-reserve process, which is a type of feasibility assessment, also involves the process of analysing modifying factors. The three main categories of mining technical studies are scoping study, pre-feasibility study and feasibility study, which provide answers at various stages.
One of the risks that is frequently disregarded in mineral projects is sample representativeness, where sparse or localised samples may be present and need to be considered during the exploration, research, and production stages. An unreliable mineral resource classification or estimate might result in hazards that need to be thoroughly validated. Additionally, it can be risky to complete the mining design and scheduling by relying too much on the global resource estimate because this could ignore important localised features, and aspects such as grade fluctuations need to be adequately considered when mining. Furthermore, insufficient engineering study conditions and depth, environmental, social, and governance (ESG) risks, infrastructure, price sensitivity, under-representativeness of processing and metallurgical tests, sustainable investment, and other technical risks should also be considered.
Mineral projects are also experiencing some new shifts and trends. Sustainability and ESG standards are becoming essential, and decarbonisation is now a major focus of engineering and technical studies. In addition, artificial intelligence and new exploration technologies are becoming more significant in mining operations. The use of implicit modelling techniques allows for quick predictions and assessments of mineral resources. Simultaneously, RPEEE and resource definition requirements are evolving, making resource estimation and classification more scientific and standardised. Tailings treatment and closure studies are also key issues in current mineral projects. The importance of multidisciplinary collaboration in the mining industry is growing, and involves the application of expertise and technology from different fields.
Another significant development in the mining industry is the increasing importance of multidisciplinary collaboration. This involves the application of expertise and technology from various fields, highlighting the need for interdisciplinary cooperation and integration.
The technical risks and challenges of mining projects are multidimensional, comprising mineral resource data acquisition, processing, and analysis, as well as new trends. To address the challenges, achieve project success, and sustainability against a backdrop of uncertainty and complexity, mining firms need to use scientifically credible technical instruments and risk management techniques.
