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Rising gold prices have seen a global surge in gold mining operations. Todd Roth at Sumitomo Metal Mining Pogo LLC tells Andrew Pelis how Japanese experience has been applied to North American reserves

Sumitomo Metal Mining: Pogo Mine

Alaska’s remote wilderness may seem an unlikely setting for Japanese prosperity, yet beneath the hills and valleys lies that most precious of commodities: gold.

The birth of Sumitomo Metal Mining (SMM) can be traced back to the 16th century, when Soga Riemon, founder of the Sumitomo Group, developed a copper smelting technique known as Nanban-buki in the Keicho period (1596–1614). In succession of the founder’s business, the Sumitomo family has developed itself through the ensuing centuries by creating businesses such as copper smelting and mining.

Today the Tokyo-based company has interests in mining, smelting and refining precious ores including copper, gold, nickel and zinc, and it manufactures semiconductor and advanced materials.

With its prestigious background, it was little surprise when SMM decided to enter the North American gold market roughly a decade ago. Its interest was piqued by the initial gold vein discovery in 1994 that would later become the Pogo Mine in Alaska’s interior.

Initially set up as a joint venture between Sumitomo Metal Mining, Sumitomo Corporation, and Teck Resources, Pogo became a two-party joint venture when Teck Resources sold its interests in July 2009. A transition management team was then recruited, with Todd Roth joining the business in April 2010 as general manager.

“The ore body was discovered in the mid-1990s, and the project then went through several years obtaining its required permits,” Roth explains. Production began in 2005, and the first gold was poured on February 12, 2006. “We are now producing 385,000 ounces [12 metric tons] each year, and last October saw us produce our one-millionth ounce of gold at Pogo.”

While production has been markedly ramped up since 2005, the location of Pogo led to initial operational challenges, as Roth describes. “The site is located about 130 miles southeast of Fairbanks in a very remote and hilly area. One of the many tasks to overcome our remote location was to build a 50-mile access road into the site along with power lines. Today we are producing above design rates and look to gain on efficiencies around the entire operation.

“Environmental issues are always a concern,” he continues, “and Pogo is an underground drift mine, so we aim to create as small an environmental footprint as possible by utilizing only what space is required above ground.”

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Rising gold prices have seen a global surge in gold mining operations. Todd Roth at Sumitomo Metal Mining Pogo LLC tells Andrew Pelis how Japanese experience has been applied to North American reserves

up to another 100 hired as subcontractors for conducting underground development work along with other projects at the mine.

“We have a very good mixture of people, with around 60 percent of our workforce coming from Alaska,” he comments. “We aim to hire people with relevant mining skills, and many of our workers live in the state.”

Training is, of course, an important focus for SMM, and Roth says that the company has many opportunities to send workers to various training sessions, which have included Tennessee, where a maintenance training course focuses on the development of its new Reliability Center of Maintenance. He expects the investment to start

seeing a full return by its third year. Roth adds that in-house training also is key to

serving the wider employment community. “We run a Mine Rescue Team that incorporates safety and first aid training and supports other mining facilities as far down as Washington State and Idaho. Our safety standards demand the provision of such a service, and our team is affiliated with the Central Mine Rescue organization that provides emergency services underground.”

With 33 miners currently trapped 700 meters underground in Chile, safety is a particularly relevant topic. Roth says that as mining operations progress, gold reserves are located deeper underground, which, aside from those safety issues, also adds complexity to operations, requiring machinery capable of safely bringing ores back to the surface.

“Our plan is to keep production levels constant, and that requires equipment replacement and maintenance to ensure we operate efficiently. We have invested approximately $10 million a year in trucks, drills and other machinery over the last few years, and it’s essential that we have very good planning in place for our maintenance and supply chain,” he comments.

“We’re operating in a remote region that gets

Sumitomo Metal Mining: Pogo Mine

Roth’s arrival has been one of several changes in management, a result of the Teck sale that saw a number of existing superintendents leave Pogo; he sees his responsibility very clearly. “Six of our seven current senior managers are new in the job,” he admits. “My main priorities are having a smooth leadership transition and team building with our new folks, but we also want to build on what has already been accomplished in the past and take Pogo to the next stage.”

That next phase may involve further exploration aimed at extending the mine’s lifespan, as Roth describes. “We are SMM’s first sole operator of an overseas mine. We will continue to explore the claim area for its potential resources.

“Pogo Mine currently has known reserves lasting into the first quarter of 2017,” he goes on to say. “The summer of 2009 we were able to add another year onto the reserves following a multimillion-dollar investment in exploration. We will undertake further work to define the outer boundaries of the existing ore body, and we also have claims on a considerable amount of surrounding land that we will explore for further opportunities.”

Roth is adamant that one of the key attributes to the Pogo Mine has been its people. At present the company employs some 300 staff, with

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“We’re fortunate to have excellent workers, mining and equipment resources, which will help to ensure we produce a very good revenue stream for the two joint venture partners”

very cold, and when it’s 50 degrees below zero, things often don’t operate the way they do in warmer climates. Because of the specialist nature of our equipment and our location, we can’t always get a spare part overnight, and some parts can have lead times of up to a year.”

Roth’s role is to drive efficiency and cost reduction, and he believes that supply chain plays an important part in that future—a future that could see the Japanese company expand its American interests. “SMM is certainly looking to grow, and the potential is there for both greenfield and brownfield developments. Our focus here at Pogo is to develop what is already in place, and we’re currently working toward gaining ISO 14001 accreditation—something we are not obliged to do but want to, as we wish to be seen as good neighbors. We’re fortunate to have excellent workers, mining and equipment resources, which will help to ensure we produce a very good revenue stream for the two joint venture partners.” www.smmpogo.com www.smm.co.jp

Sumitomo Metal Mining: Pogo Mine

SUMITOMOMETALMINING

www.smm.co.jp