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Monday, April 25, 2016 7:49 AM ET
Russian, Kazakh miners "booming" despite metal price falls, but slow to adopt
new tech: SRK
By Ben Seeder
The mining sectors of former Soviet economies such as Russia and Kazakhstan are booming, in spite of the fall in commodity prices in recent years, general
director of SRK Consulting in Russia, David Pearce, said April 21.
Speaking to SNL Metals & Mining on the sidelines of the MINEX Central Asia conference in Astana, Kazakhstan, Pearce said the sharp fall in value of the
ruble and tenge currencies meant miners in both countries were still very profitable, even at current metal prices, and that this could partly explain why
companies there have not been as focused on cutting costs as companies elsewhere.
He pointed out that there was less pressure on mining companies in Russia and Kazakhstan to become more efficient, due to the already low-cost nature of
operations there.
"What works in one country may not be necessary or possible in another country. There is a difference between paying US$120,000 a year for a truck
driver in one place, versus paying US$20,000 a year for a truck driver in another place," he said.
But despite that, many of the operations in the former Soviet space were still run by "young, dynamic" people willing to drive improvements and efficiency.
"It's a matter of bringing that dynamism from the head office to the mine face, that is the challenge," he said.
Earlier in a speech to the MINEX conference the same day, Pearce had told the audience that technology was changing the face of mining all over the world,
from Rio Tinto's "Mine of the Future," with its driverless trucks, to virtual reality training simulators, mine planning software and powerful analysis tools that
allow managers to track and study mine operations in real time using sensors on equipment.
"Information can now be captured, sorted and examined to create a more holistic picture of what is happening at the mine and the conditions there.
"Simulators are available, you no longer have to use a real machine [for training], you can train in simulators and at the same time identify whether the
operator has the right attitude and habits to be a skilled and safe operator, or whether they are actually dangerous and should not be using that equipment at
all."
But Pearce noted that these technologies, for the most part, have been more slowly adopted in countries such as Russia and Kazakhstan for a number of
reasons.
He said the minerals boom has only been going for about 10 years in the former Soviet Union, adding that there was "dark day" period lasting from toward
the end of the U.S.S.R. until the mid-2000s, when the region's mining sector received very little investment.
"The first 10 years [following this "dark day" period] have been spent re-equipping the mines and giving them a certain minimum operating standard. Mines [in
the former Soviet Union] are now operating in an effective way, they are now stable, able to be built on as a base for pushing to the next level, which is the
efficiencies."
He said Russian and Kazakh miners were now taking these "first steps" toward becoming more efficient, by adopting new mining technologies and
techniques.
"Blast movement technology, that is being applied to some mines in Russia, mine control [and other] systems, are being applied. The key thing we are seeing
is there is a need for people to start understanding and analyzing data."
Source: S&P Global Market Intelligence | Page 1 of 1