The average head grade of global copper mines has decreased 25% in the past 10 years (Calvo, 2016). To remain profitable, mines are utilising economies of scale to reduce operating costs. This results in the deployment of larger plant, higher capacity mills and in many copper and gold mines larger Heap Leach Pads (HLP).

The HLP is a vital processing component of many Gold, Silver and Copper mining operations. HLPs provide a tried and tested method of metal liberation from crushed ore popular with many of the world’s largest miners due to its desirable economics, simplicity, and potential recoveries although not suitable for all mines due to the requirement for available space.

The standard HLP consists of three main components:

1. The ‘heap’, formed of stacked crushed ore.

2. The irrigation system comprised of sprinklers and pipework to apply leachate.

3. The liner or liners which are laid across the native surface to create the ‘pad’.

Leachate, such as a cyanide solution, is applied to the ore heap through irrigation. The leachate dissolves metal contained in the ore as it percolates through the heap. The resulting Pregnant Leach Solution (PLS) is then collected downstream in ponds before further processing and recovery of the metal.

The additional step of ore agglomeration allows more control over the stacked ore’s permeability and improves recoveries by optimising the percolation rate by binding of crushed ore particles with cement. Agglomeration has been shown to improve HLP recoveries in the order of 20% and is now a common addition to many HLP processing circuits.

What’s covered?

While terms and wordings differ from Policy to Policy, typical HLP coverage includes property located above, below and around the heap. This includes:

• The liner system comprised of layers of low-density polyethylene (LDPE) and geosynthetic clay liners

(GCL)

• Fixed and mobile ore conveyors
• Ore stackers
• Pumps and irrigation pipework

Property located ‘in-heap’, the ore itself and the metal bearing pregnant solution are commonly excluded.

What can go wrong?

Losses at HLP’s can manifest in many ways. Stackers and conveyors used in the movement and placement of ore are subject to the usual risks associated with Machinery Breakdown type events.

Damage to the pumping and pipework or HLP liner system can arise when the heap itself moves or collapses. Although the ore heap is generally excluded, an ensuing damage writeback may result in an indemnifiable loss to the insured property.

And as with other earth or rock-based structures, the HLP also poses notable geotechnical risks such as:

• Liquefaction – Seismic / Static
• Heavy weather
• Errors in design / construction
• Changes to the stacked ore characteristics

HLP Adjustment Considerations

Like many technical risks, losses occurring at HLP’s can be complex with the potential for significant interruptions to production and financial losses.

Policy Wordings

The HLP comprises unique infrastructure and processes that may not fall directly into generic Policy wordings. Specific endorsements identifying the intended insured property aid in determining insured vs uninsured damages. Clearly defined terms further remove potential differing interpretations and aid all parties involved in the claim process.

Geotechnical Experts

HLP failure mechanisms can be complex and geotechnical in nature. It may benefit to engage a suitable independent geotechnical engineer early in the process to aid in the determination of root cause when no external factors appear present.

Business Interruption

The leaching process includes a production lag between irrigating and recovering the pregnant leach solution. As a result, losses arising from an interruption to the irrigation process may not be visible for days, weeks or even months after an event. A point of interest when considering any applicable Business Interruption deductible or Waiting Period.

This ‘lag’ between an event and an observable loss may be extended further when taking into account Run of Mine (ROM) and other stockpile availability in addition to the already present leaching lag time. The ‘loss’ may not be observed for many months after an event and potentially not align with a Policy’s defined Indemnity period.

Mitigation

Mitigating a loss on a HLP can be challenging as the pad may represent the only means of metal liberation on a mine. However, potential options may include:

• Rearrangement of the stacking sequence to optimise any remaining available leaching areas
• Prioritising stacking of any available high-grade ore (high grading)
• Development of a new pad entirely in the most extreme events (reinstatement elsewhere)

An event may also allow an Insured to review the HLP process and identify possible improvements to the pad’s design or treatment of the ore pre-stacking to achieve higher recoveries post-loss.

Claims relating to HLP’s can be complex and lead to large physical damage and Business Interruption losses. Gaining a full understanding of the HLP process and wider mining operation is necessary to fully quantify potential losses and identify potential avenues for mitigation.

Andrew Milne

Associate Director – Onshore Energy and Mining
andrew.milne@charlestaylor.com

EXPERTISE:
Offshore and onshore Energy claims, Mining, Open pit and underground

LOCATION:
Sydney