Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
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SOUTH AFRICAN GOLD While other gold producers invested in mechanized mining, the South Africans relied on labor-intensive practices. Planning for the testing and engineering design of a bulk underground application is under way, with testing that had began in March. These tests involve pumping of the product over greater distances, as well as the viability of continuous mixing as opposed to the batch mixing processes, the company noted. However, it is not clear how applicable this technology would be to the company's other operations. Dixon questions whether the technology is ready for a full rollout, or whether further development is needed. Anglo Gold was not immediately available for comment. Dixon speculated that Anglo Gold's approach would depend on reducing the waste-to-reef ratio. Currently, the stope height would be 110 cm; the top 60% waste material, and the bottom 40% goldbearing ore. The waste area was needed to enable men to access the narrow reefs. The greater the width extracted, the greater the pressure on the roof, which means the roof quickly begins to sag downward, leaving little room to work. But the waste mined still has to be hauled to the surface, at huge cost. Anglo Gold's strategy to focus on the gold reef itself would greatly reduce the waste that needed to be removed. The difficulty, said Dixon, was whether the technique would work if the reef struck a geological fault, which could put the reef above—or below—the line of the preceding drill work. A faulted reef would be challenging to follow in such narrow confines. 42 E&MJ; • JULY 2013 "It's a great idea, but it's a long way between thought and application," Dixon said. Human Resources and the Community Influence Technological innovations would drive the mines of the future, which would need to be run by young people with the appropriate skills, Minerals Minister Susan Shabangu told South Africa's largest mining union in late May. "The mines of the future will have to be modeled differently to those who have characterized this industry for the past 136 years," Shabangu told South Africa's National Union of Mineworkers. "These mines will inevitably have to accommodate young people, who will need to operate them, with the appropriate skills, technological knowledge and training." The government itself is also an impediment to change, some argue. It has sided with unions over retrenchments and even threatened to withdraw mineral rights from companies that embark on job cuts. "The social environment around mines is a time bomb," said Andries Rossouw, director of Mining and PriceWaterhouseCoopers in Johannesburg. "When companies want to close shafts that are not profitable they come under intense government pressure to keep them open. This affects their flexibility with regard to labor and the costs involved." He noted that labor accounted for up to 50% of costs for deep level mining. Unless attendant costs could be lowered, or productivity increased, the outlook for operators was bleak. However, he did not expect a return to hedging, the much-maligned strategy companies employed during the last gold downturn. Mining houses would try and lock in future income by forward selling gold they had not yet mined. Critics of the strategy say it cost mines dearly as it kept a ceiling on the price for most of the 1990s, and when companies began unwinding their hedge books those with forward contracts were badly burned as they were forced to sell at prices lower than what competitors were achieving on the open market. "I don't think hedging will come back significantly," said Rossouw. "It cost Anglo Gold Ashanti billions. There were a lot of lessons learned and I don't think there is a rush to enter these agreements again, unless they can hedge the cost side of things." By controlling the price they sold gold at, but not the cost of production, mines severely limited their earnings ability, he added. Although labor costs have decreased from 44% to 39% between 2011 and 2013, it is still the largest cost component for the South African business. www.e-mj.com