Underground Oilsands Mining Project Proposed

by Elsie Ross

A proposed new technology, using a massive tunnel boring machine, could "revolutionize" oilsands mining, a Canadian Heavy Oil Association conference heard in Calgary.

Underground mining can extend and expand oilsands resources, adding up to 100 billions bbls of mineable resources at a lower cost than surface work, said Ron Drake, president of Oil Sands Underground Mining Inc. (OSUM).

"We can do it with less impact on the environment and at less environmental cost," the California mining engineer told the conference. "We can maximize and conserve all the bitumen resources and gases."

OSUM would target a "no man's land" in the Athabasca oilsands in which the overburden is too thick for surface mining and too thin for steam assisted gravity drainage (SAGD). Those deposits would be about 150 to 200 metres in depth. The new technology would also would be suitable to tap deposits below surface features, such as dunes and muskeg, in surface mineable areas, said Drake.

He said the company thinks that by the middle to end of 2003 it will have completed a pilot project successfully demonstrating the technical, operational and economic feasibility of the equipment. Drake hopes to have a production machine in operation by 2005.

Drake said afterwards that OSUM recently submitted a proposal to Syncrude Canada Ltd. to host the pilot at its Fort McMurray site. The pilot would cost $25 million to $30 million (U.S.) and use a machine eight to 10 metres in diameter, about half the size of the final unit.

The California-based company has developed a patent-pending technology based on state-of-the-art techniques from the tunnelling industry, such as a Tunnel Boring Machine (TBM), which would mine the oilsands directly. The proposed 20-metre diameter circular mining machine would be able to produce 45,000 tonnes per day of oilsands, approximately 27,000 bbls of bitumen. "The key is we are going to mine material and backfill behind us with the tailings," he said.

OSUM is working with Toronto-based Lovat Inc. , one of North America's largest manufacturers of TBM to develop a prototype oilsands machine. The company has special expertise in machines designed to go into very porous sands and gravels and saturated soils, said Drake.

The machine would excavate by creating a slurry at the mining face. That slurry would then be hydrotransported out the tunnel and tailings carried back inside the same way. A four-metre diameter extruded concrete access tunnel would provide access for personnel, equipment and supplies along with ventilation and utilities.

While TBMs typically are circular, OSUM is looking at a more rectangular shape, such as two 15-metre diameter machines resembling a pair of binoculars, said Drake. With this type of configuration, OSUM believes it can recover up to 95% of the ore body compared to 84% with circular machines, he said.

OSUM's estimated capital costs are about $86 million, including $70 million for the TBM and associated equipment and the balance for mobilization and development of the portal, where slurry is delivered.

On the operating side, OSUM believes it can mine the ore, including hydrotransport costs, for about $2.48 per tonne compared to $2.75 for surface mining. Total underground costs are estimated at $3.79 a tonne versus $4.45 to $5.45 for above ground. There could be additional savings of about 36 cents a tonne for underground mining when the cost to surface mines of tailings transport and land reclamation are taken into account, he said.