Dundee Precious Metals is maximising productivity from its European assets in a responsible manner having boosted output fourfold at its flagship Bulgarian site while operating under the mantra ‘we succeed because we care’.
The company has four working projects and a number of exploration programmes spread across three continents, and is looking to cement itself as a global leader in sustainable mining operations, combining strong social work and provision of jobs for locals with environmental and operating innovations in the mines themselves.
Having begun in Toronto, Canada, 30 years ago, Dundee Precious Metals began life as an investment fund in the gold mining sector, converting into an operator when its founders discovered the underground sites in Bulgaria.
Now it is close to opening another Bulgarian mine and expanding its operations in Namibia, adding a Sulphuric Acid Plant to convert the emissions created by its Tsumeb smelter.
Encapsulating what Dundee Precious Metals is about is its flagship mine at Chelopech in central-western Bulgaria.
Bought by the business in 2003, the former Soviet-run gold, copper and silver mine has been given a complete facelift to the value of $400 million which has seen overall production quadruple, with ore output reaching 2.076 million tons.
Chief Executive Officer Rick Howes believes there is even more potential to be extracted. He said: “We are exploring the whole surrounding region and believe there is a lot more mineralisation out there. There is about 10 years of life left in its current state, but we keep adding to this all the time and it is already one of the largest gold mines in Europe.”
Dundee Precious Metals has greatly upgraded the site, replacing the 50-60-year-old systems and processes with modernised technology and solutions.
For example, a recent innovation has been the introduction of wifi to allow real time tracking of operations, crucial to monitoring productivity and staying on top of potential health and safety hazards. Partners such as HP, Cisco and Microsoft are helping to bring further technological upgrades to the site.
The key to success at Chelopech, and indeed all of the company’s work, has been the careful integration into the project communities, both in a social and environmental sense, convincing the local populations that Dundee Precious Metals is a positive influence in their areas.
Chelopech has seen the implementation of a number of sustainable innovations. This includes a new staged flotation reactor from Woodgrove Technologies, reducing power consumption of the flotation process by 50 percent. Air consumption is reduced by 80 percent and the amount of floor space required is 50-60 percent of that taken up by conventional equipment.
“We have proven it is a no brainer, and are the first company to use this technology on a broad basis.” Howes added. “It is fully-installed at Chelopech and the big miners like Vale (Brazil) are now testing it. We will use it wherever we can as there are so many environmental and economic benefits to it.”
Other examples include systems which treat and recycle 100 percent of the water used at Chelopech with zero discharge, and a new conveyor to transport materials from the mine to the surface, replacing the use of trucks, leading to a 40 percent reduction in diesel use in 2013.
On the social side, building relationships with governments and local populations has been the most important challenge that Dundee Precious Metals has had to overcome. In 2013 the company spent $3.2 million on community investment and was recognised as the most generous financial donator in Bulgaria.
“This is about earning respect as a foreign company and our stakeholder engagement and environmental work has allowed us to embed into societies,” Howes said. “Convincing them that we will continue to invest was a challenge, but we have been successful and that is proven by the fact we are now working on a second project in Bulgaria.”
The company’s social responsibility is no better demonstrated than by its Chelopech English Language School, which was acquired with the mine and now attracts Bulgaria’s brightest students having seen significant investment. All teachers are Dundee Precious Metal employees.
Across all sites Dundee Precious Metals takes on local workers and provides them with training in the key skills required, encouraging promotion from within and embracing six core values – dignity and respect, continuous improvement, transparency, environmental responsibility, safety and community investment. Including contractors the company employs around 4,000 people.
Kapan and Krumovgrad
In the southeast of Armenia, the Kapan underground mine has been modernised like Chelopech since the company acquired it in 2006, requiring a big focus on skills training and addressing language barriers.
Last year 403,000 tons of gold, copper, silver and zinc ore was produced, and although the mine is markedly smaller than its Bulgarian partner, there is excellent expansion potential.
Howes said: “We think we can double it in size, and though the decision to fully invest has not been made yet we are doing the studies and evaluations – within the next year or two we will have made a final call.”
Another exciting prospect is Dundee Precious Metals’ first open pit project, the second Bulgarian venture located just outside of Krumovgrad in the southeast of the country.
The site will be built by local contractors and a much-opposed cyanide method for extracting gold has been removed from any plans for the development, with Howes keen to showcase this as a pioneering example of an environmentally-sensitive mining operation. Production should begin in early 2018.
“The life of the mine is about eight years and we are still exploring the area in the hope of expanding this further,” Howes added. “It was vital to take away the concerns of the local people and we are also introducing other sustainable features including new dry waste disposal methods.”
There is also exciting work taking place in Namibia, home to Dundee Precious Metals’ specialised smelter which processes complex copper concentrates produced at Chelopech, having once served the notorious Tsumeb copper mine.
Since buying the site in 2010 having been a customer of the previous owner, the company has invested around $350 million on modernisation, $242 million of which on a sulphuric acid plant which converts smelting emissions into product which is then sold onto Namibian clients.
Rossing Uranium Limited has already signed a five-year contract for 225,000 tons a year of sulphuric acid for use in its uranium mine, with local logistics operator TransNamib doing the transportation work by train.
Weatherly International is another customer signed up, with the total annual production of 40,000 tons already completely sold.
“There are about 1,200 contractors on site at the moment completing the project,” Howes said. “The uranium mines require the acid to leach out the uranium and the miners are keen to get their sulphuric acid locally as opposed to shipping in from other parts of the world.”
The site has already seen emissions reductions of more than 44 percent over the course of 2013, with the new plant set to boost this figure even further.
Tsumeb is also improving its energy efficiency, with an 18.7 percent energy intensity decrease seen across 2013. Chelopech saw a 10.6 reduction while Kapan achieved a 7.3 percent drop.
By continuing to pioneer greener mining techniques across all of its growing and impending production sites in Bulgaria and Armenia, Dundee Precious Metals will continue to build on its collaborative work with local communities and bring vital wealth and resources to local populations.
Such principles will not be sacrificed as the company continues to grow, with Howes determined to lead the way as a responsible miner with a worldwide presence in the future.
He concluded: “You must earn the right as foreign company to mine another country’s resource – being an investor of choice is hugely important, and people want us to stay.”
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