Robinson Mine: The really Big Dig

Source: Energy Digital

Date :7/21/2008 12:16:46 PM

Bruce Kennedy leads the historic Robinson Mine into the future in an industry that is marked by both uncertainty and hope

Written by Terrence Doyle and Produced by Jason Gerry

Bruce Kennedy is, in a word, experienced. The general manager at the Robinson Mine in White Pine County, Nevada, is not just another business-savvy front office type charged with monitoring the financial success of a business in an industry in which he has no practical knowledge.

He is, first and foremost, a mining engineer. A graduate of the New Mexico School of Mines’ Class of 1973, Kennedy has been working in the industry ever since. He has experience in open pit and underground mines, potash mines, uranium mines, and as a mining consulting engineer.

His last job was working for Phelps Dodge, but he left his post there in 2005 to join Quadra, Robinson’s parent company, a multi-asset copper and base metal producing company based in Canada.

According to their website, Quadra is “committed to growth by expanding and diversifying its production through development of its existing properties and the acquisition of interests in advanced exploration, development and producing base metal properties.”

Kennedy’s employment opportunities have taken him all around the world. He spent two and a half years in Chile, a year and a half in Peru and seven months in Canada.

“I have been to 25 countries around the world,” says Kennedy. “I enjoy the travelling that comes with the job – seeing new places, meeting new people. Being in this industry even gave me the opportunity to learn Spanish. Life has been really good.”

Kennedy is also a registered Professional Engineer, something he says is extremely important because you must have that distinction “in order to certify an ore reserve.”

Quadra, which was founded in 2004 and was at the time the largest IPO in Canadian history, raised C$145million to acquire properties. The Robinson copper mine in Nevada was the first such acquisition. Quadra also owns the Carlotta property, which is 65 miles east of Phoenix, the Malmbjerg property in Greenland and the Sierra Gorda property in Chile.

“We’ll be producing copper at the Carlotta property by late August or early September,” says Kennedy. “We’re going through the permitting process for the Malmbjerg property, and are conducting an environmental impact assessment at the Sierra Gorda property in Chile.”

Kennedy says that Quadra is definitely growing, and as the Robinson mine is currently the company’s “only operating asset, the production of this property is key to the company’s future.

A bit of history

The Robinson Mining District was founded in 1867 when several underground gold and silver mining operations were established. By the early 1900s the first copper production commenced. Kennecott Copper Corporation consolidated and operated both underground and open pit operations and associated processing facilities. Production reported from 1908 to 1978 was more than 4.8 billion pounds of copper and 2.7 million ounces of gold. Magma Copper acquired the properties in 1991 and was subsequently purchased by BHP Ltd (“BHP Copper”) in 1997.

The Robinson Mine as it exists today was built in 1994 through 1996 for approximately $480million and ran until operations were suspended by BHP Copper in 1999 due to low commodity prices (60¢ per pound for copper and US$260 per ounce for gold). Quadra purchased the mine from BHP Billiton in April 2004, and recommenced operations, reaching full production in October 2004 more than two months ahead of schedule and following capital upgrades to the process plant facility. The mine mobile equipment had been reassigned to another BHP Billiton project and was replaced with new equipment.

The current mine infrastructure consists three large open pits – Liberty (previously mined out by BHP Copper), Tripp-Veteran, and Ruth, a conventional process plant with SAG and ball mill grinding followed by flotation.

Robinson has operated continuously since 2005 producing 121 to 126 million pounds per year of copper. In 2006, mining transitioned from the Tripp to the Veteran pit and the mine produced 121.4 million pounds of copper, 75,074 ounces of gold and 260,000 pounds of molybdenum. In 2007, the mine produced 131.9 million pounds of copper and approximately 108,000 ounces of gold.

The Robinson mine is in a “small, isolated community,” says Kennedy. “Ely (population 5,000) is the largest nearby town.” Kennedy says that 500 of Ely’s residents work at Robinson, making the mine “far and away the largest contributor to the local economy.”

When Quadra acquired the property from BHP, it paid just $14million, an astounding deal considering the US$480million Magma had put into it.

Struggles

Kennedy says that though the company is growing, it’s been tough to assemble employees, from management to miners, because of the isolation and the generation gap in the industry.

“It has taken us a while because of the isolation but we have assembled an experienced and qualified management team,” says Kennedy. “We also have a training program which aims to make miners out of people who were not miners before. “We share the same problems as most of the industry,” he says. “Mining, from the middle of the 1980s up till about four years ago, was not doing so well.”

Kennedy explains that mining has not been portrayed as a “sexy” job, and because of that there is a lack of miners in their 30s and 40s. “We’re missing two decades of workers,” he says.

He says most of the miners are “kids in their 20s and guys in their 50s and 60s that are getting ready to retire.” So Robinson is “focusing a lot on educating the guys in their 30s and 40s,” to try to fill the void.

Kennedy said the rising costs of diesel fuel and the short supply of large tires that they use on their haul trucks have both been areas of concern. Where a year ago Robinson might have expected to pay a bit more than two dollars for a gallon of fuel, the company is paying US$4.20 this year. “Our major problems are the shortages of skilled workers, the rising costs of fuel and the worldwide shortage of tires,” he says. “All commodity markets are suffering. There is an influence on the cost of fuel from speculators who buy futures. They bet one way or the other, which influences the prices.”

Marketing strategies

Kennedy says the major marketing focus is geared toward China and India and Pacific Rim countries. “The vast majority of copper produced in the US is being sent overseas,” he says. “We are actually getting money back from China.”

Though one industry cannot hope to level the entire trade imbalance, it’s a start. Kennedy likes to remind opponents of the mining industry that without mining, the majority of their day to day life would be different. Cars, toaster ovens, golf clubs... all of these materials were once sitting in the earth in their raw form. Life, it seems, is inextricably linked to mining. “Most people don’t realize that everything in their life is either grown or mined,” says Kennedy.

Safety

Kennedy prides himself on Robinson’s safety record since he took the helm. “The national average for injuries is 3.3 per 200,000 man hours,” says Kennedy. “We have less than one.”

In fact, Robinson is approaching one million man hours without a loss time injury, a milestone Kennedy says could be reached toward the end of the summer. ¬