‘Meet at the Center of the Earth’ – by John W. Miller (Wall Street Journal – June 12, 2012)

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Miners Take On New Risks as They Drill Deeper for Copper; Rio Tinto’s $5 Billion Lode in Utah

BINGHAM CANYON, Utah—Miners have drilled, blasted and dug 19 million tons of copper out of this valley—enough for all the nickels, dimes and quarters ever minted—in what is the world’s deepest surface mine.

There is plenty more in an untapped region far below the mine, and owner Rio Tinto, the global mining behemoth, is investing $165 million to explore the area, which may hold some $5 billion worth of copper.

Some mining companies that have relied mostly on surface mining—the removal of ground over minerals near the Earth’s surface—are going deeper. Mineral deposits are often concentrated in the same region. Once the surface deposits are depleted, miners can now dig further, rather than scout for new reserves and then have to build infrastructure to mine, process and transport those resources.

New technology—robotic drills and high-strength pipe alloys, for instance—makes it possible to go twice as deep, and the relatively high prices for commodities make it financially feasible, too.

At Bingham Canyon, Rio Tinto has already dug an open-pit mine that is 2,000 feet deep and 2.5 miles wide. To reach new copper deposits it will need to dig underground mine shafts to a total depth of 4,000 feet—about twice as deep as most mines.

Easy-to-find, near-surface deposits “have pretty much been found already,” said Richard Hillis, chief executive of Australian-based Deep Exploration Technologies Research Centre, a consortium of mining companies and geologists devoted to overcoming the technical challenges of deeper mining. Most mines—surface mines and conventional underground mines—are less than 2,000 feet deep. With the Earth’s crust typically between three and 30 miles thick, huge reserves of minerals are sitting below existing mines.

There are risks. Going deeper is expensive. Companies must dig elaborate systems of underground tunnels and invest in different types of equipment, such as robotic drills that can change direction underground. Deeper adds elements of danger to the people who mine.

Going deeper also means going below water tables, and liquid encountered along the way must be pumped back to the surface. That creates environmental risks such as waste from mining operations leaking into water tables. Deeper mines produce more waste rock that must be piled on the surface.

“As you go deeper, you generate more waste material,” said Bonnie Gestring, a Missoula, Mont., campaigner for Earthworks, an environmental-advocacy group.

Mining companies say they capture and treat contaminated water, return land to its original conditions when they are finished mining and that digging deeper means they don’t have to venture into virgin territory.

Daniel Edelstein, copper specialist at the U.S. Geological Survey, said surface mining, where minerals are loosened from the surface with explosives and which provides the economies of scale needed to turn big profits on global commodities markets, will remain the standard.

“The 18 biggest U.S. copper mines are still open pit,” he said. “What we’re going to see in the future is a mix, where some major mines have both open pit and underground operations.”

The Australian and Canadian governments have set up industry-funded research centers to figure out how to go further underground. Officials joke that the two countries will “meet at the center of the Earth.”

Most mineral deposits were formed by volcanic activity and tectonic plate shifts. Similar deposits tend to lurk nearby.

“The best place to hunt for an elephant is near other elephants,” Preston Chiaro, Rio Tinto’s group executive for technology and innovation, said, employing industry slang for rich deposits.

The copper elephants of Bingham Canyon, located 20 miles from Salt Lake City, were first mined industrially in 1906 after being discovered during the 19th century gold rush. So far, more than $200 billion worth of minerals have been extracted. Bingham Canyon copper is being used to make this year’s London Olympic medals.

For the rest of this article, please go to the Wall Street Journal website: http://online.wsj.com/article/SB10001424052702303296604577454840685152030.html