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JANUARY 2016 • E&MJ; 11 www.e-mj.com REGIONAL NEWS - AFRICA Political Controversy Shakes South Africa's Struggling Mining Industry South Africa's battered mining sector recently took another hit with the unex- pected sacking of a respected finance minister, sending the country's curren- cy and stock market into a tailspin. In mid-December, President Jacob Zuma said he was replacing Finance Minister Nhlanhla Nene with David van Rooyen, a little-known legislator. South Africa's banking sector plunged on the news with banking shares dropping more than 10%, a fall not seen since the 2008 crash. The rand breached 16 to the dol- lar for the first time. Then just days later, Zuma—under pressure—removed van Rooyen from the post and reappointed Pravin Gordhan, who previously served as finance minister from 2009–2014. Nene was an old-school banker who imposed fiscal discipline on government spending. Although no official reason was given for his sacking, it was widely believed to be related to his refusal to sign off on the pet projects of Zuma's inner circle, such as plans to build five nuclear plants around the country. Nene's challenging of details within a plan to acquire new aircraft for the state- owned airline, South African Airways (SAA), from European aeronautics firm Airbus may have been the trigger for his firing. The SAA Chairmwoman Dudu Myeni wanted to conclude an aircraft acquisition deal that would have been routed through a third party, a previous- ly unknown firm nominated by her. Earlier on the day of his dismissal, Nene had said publicly that he would not endorse Myeni's proposed transaction. Myeni and Zuma are reportedly close; she heads his personal founda- tion, and is involved with other presi- dential projects. The events are likely to put further pressure on South Africa's struggling resource sector's ability to attract investors. The industry is already unset- tled by the unexpected replacing of the mines minister, Ngoako Ramatlhodi, in September. His replacement, Mosebenzi Zwane, is a confidant of the president. No official reason was given for Ramathlhodi's replacement, but recent- ly, respected financial columnist Alec Hogg suggested it was because of his refusal to block the threat of the clo- sure of a mine run by a consortium in which one of Zuma's sons had an inter- est. The mine had reportedly been cited for health and safety violations. The axing of the finance minister is another blow the mining industry can ill afford. In December, ratings agencies lowered South Africa's credit worthiness to a notch above junk status. Standard & Poor's has warned that any subsequent deviation from South African fiscal poli- cy could lead to a credit downgrade. Golden Star Going Underground at Prestea Golden Star Resources has reported the results from a feasibility study of devel- opment of an underground mine on the high-grade West Reef deposit on its Prestea property in southwest Ghana. The Prestea property hosts a previously operated underground mine that Golden Star acquired and placed on care and maintenance in 2002. Extensive sur- face infrastructure and underground development are in place and can be used in developing a new mine on the West Reef deposit. Prestea is located 16 km from Golden Star's existing Bogoso process- ing plant. West Reef ore will be hauled along an existing private haul road to a new plant at the Bogoso site. Golden Star initiated mining from a pit on the Prestea property in the third quarter of 2015 and currently hauls that ore to the Bogoso plant. Gold production from the West Reef deposit will average about 80,000 oz/y over a mine life of 5.5 years based on current probable reserves. Life-of-mine all-in costs are estimated at $756/oz. The initial capital outlay is estimated at $63 million, with a development time- line of approximately 19 months to commercial production. The payback period is estimated at 2.9 years from the start of the project. The West Reef deposit hosts proba- ble mineral reserves totaling 1.04 mil- lion mt at a grade of 14 g/mt gold for a total of 469,000 oz of contained gold. The deposit ranges in depth from 550 m to 1,025 m below surface. The mineralization dips 60° to 85° to the west and varies in width from 0.5 to 3.5 m, with an average width of approx- imately 1.8 m. The primary access shaft for mining the West Reef deposit will be the existing Central shaft in the town of Prestea, approximately 2 km to the north of the deposit. This shaft will be used for per- sonnel access, materials transport, dewa- tering, and hoisting. The existing Bondaye shaft 3 km to the south of the deposit will provide a secondary means of egress and will also be used for dewatering. The feasibility study proposes shrink- age stoping for mining the West Reef. An incline/decline system will be devel- oped in the footwall of the mineraliza- tion to access sublevels at a vertical spacing of approximately 35 to 40 m. A stand-alone, 500-mt/d processing plant to treat West Reef ore will be built at Golden Star's Bogoso site, with a standard comminution circuit followed by gravity and carbon-in-leach sections. Gravity concentrate will be treated in the Bogoso plant's existing Acacia recovery circuit. Gold recovered from the carbon-in-leach circuit will be fur- ther processed in the existing elution circuit, and doré will be smelted in the existing gold room. Yielding to widespread public criticism, South Africa's President Jacob Zuma backtracks on his sudden and unexplained firing of the country's finance minister.