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ACHIEVING BUSINESS EXCELLENCE ONLINE

Mining&Minerals

ISSUE 4 | www.bus-ex.com

world gold council:

Conflict-free gold

gold fields ghana: Leading from the front

barrick south america: Mining responsibly

SNOW CAPPED Anglo American: Los Bronces, one of the highest mines in the world

SPECIAL REPORT: responsible mining

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We have in-depth knowledge of the mining industry having consulted to and worked with Anglo American, De Beers, AngloGold Ashanti, Mintek, ThyssenKrupp Materials Handling and more.

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Editor’s letter

Performing

responsibly

O

ur latest BE Mining & Minerals magazine leads with a special report into responsible mining.

Terry Heymann, director of responsible gold for the World Gold Council, talks about the development of the Conflict-Free Gold Standard and Hein Boegman, mining industry leader for Africa at PwC, talks about financial reporting, black economic empowerment and corporate social responsibility.

We also introduce some fascinating statistics to show how the leading mining companies have been performing—responsibly.

Our Business Showcase section includes examples of the initiatives undertaken by some of the mining majors, including Barrick South America, Gold Fields Ghana, Newmont Ghana Gold, Harmony Gold, Anglo American and AngloGold Ashanti.

We also have first-hand accounts of Rio Tinto’s iron ore projects in Australia, Vale’s nickel operations in Canada, coal mining in South Africa, titanium in Mozambique and copper in Chile, as well as examples of junior exploration and development companies and service providers who keep the industry supplied.

The Editors Martin Ashcroft & Becky Done Editorial team editorial@bus-ex.com

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mining & minerals

contents

SPECIAL REPORT: RESPONSIBLE MINING

12

12 FOREWORD

RESPONSIBILITY ON THE FRONT LINE

Introducing our special report and the mechanisms used to report on sustainability performance.

28

14 FACTS & FIGURES

SUSTAINABLE PERFORMANCE

Demonstrating the progress made in the last few years in sustainability performance in the mining industry.

20 INTERVIEW: TERRY HEYMAN

CONFLICT-FREE GOLD

Terry Heymann talks about the development of the Conflict-Free Gold Standard.

20

28 LEAD STORY

PROGRESS TO REPORT

Hein Boegman talks about financial reporting, black economic empowerment and CSR.

Mining & minerals | 5

mining & minerals

36 Event preview: 36 Events

Electra Mining Africa 2012: Preview

Electra Mining Africa comes to Johannesburg on 10 September, featuring the very latest products, services, technologies and trends in the mining world.

42

42 KPMC

MOVING MOUNTAINS Innovative solutions are needed to combine the practicalities of mining, the challenges of logistics and the volumes of bulk materials handling.

52 SMT SCHARF AFRICA

SPECULATING AND ACCUMULATING

52 6 | Mining & minerals

Convincing mines to spend more money up-front on the expectation of lower life-of-mine costs is what one South African supplier is working hard to do.

contents

60 TRANTER ROCK DRILLS EYE TO THE FUTURE

This business is growing by listening carefully to what mine operators want from the equipment they purchase.

ASSOCIATIONS: 68 CZECH REPUBLIC MINING ASSOCIATION

60

HIGHLIGHTING HIGH STANDARDS

68

Providing a forum for its members that fosters a responsible approach to mining based on best practice and knowledge exchange.

78 THE ALLIANCE FOR RESPONSIBLE MINING

TRANSFORMING THE INDUSTRY ARM seeks to transform global gold production by integrating and formalizing the position of artisanal and small-scale miners.

78 Mining & minerals | 7

mining & minerals GOLD: 92 GOLD FIELDS GHANA LEADING FROM THE FRONT

Gold Fields Ghana not only strives to mine ethically and sustainably, but is also spearheading a national conservation programme.

92

106 HARMONY GOLD MINING COMPANY LIMITED HARMONY IN ETHICS

With a commitment to stakeholder value and corporate responsibility, Harmony is setting the gold standard for ethical mining.

116 NEWMONT GHANA GOLD

116 124

A HELPING HAND

Mining operations usually provide much needed employment in developing countries; but a longer point of view is what’s really called for.

124 BARRICK SOUTH AMERICA MINING RESPONSIBLY

Barrick holds some exciting gold projects in its South American portfolio, and is determined to lead the industry in responsible mining.

162 ANGLOGOLD ASHANTI THE GOLD STANDARD

Taking a thought leadership role in standardising its sustainability strategy and framework across the global organisation.

8 | Mining & minerals

contents 188 Osisko Mining Corporation

204

Sitting on a gold mine

The challenges and achievements of the Canadian Malartic mine, the single largest gold reserve in production in Canada.

BASE METALs: 204 RIO TINTO IRON ORE: PILBARA EXPANSION PROJECTS THE FUTURE OF MINES

214

An amazing programme of expansion and modernisation in Australia.

214 VALE

INVESTING IN THE FUTURE The beginning of the largest investment in Canadian mining history.

236 ANGLO AMERICAN: LOS BRONCES SNOW CAPPED COPPER

General manager Sam Rasmussen talks about the special challenges of mining at altitude in the Chilean Andes.

236

Mining & minerals | 9

mining & minerals COAL & minerals:

256

256 EXXARO RESOURCES

POWERING POSSIBILITY

South Africa’s largest listed empowerment enterprise has a mid-to long-term strategy that is nothing short of visionary.

272 OKD

Solid as a rock

280

Operations at one of Europe’s largest coal producers are underpinned by strong customer relationships, top-class training, and solid revenues and reserves.

280 KENMARE RESOURCES

THE FUTURE IS ROSY... AND WHITE The world wouldn’t be quite as white as it is without an expanding titanium mining operation in Mozambique.

EXPLORATION & DEVELOPMENT: 300 ANDALUSITE RESOURCES

A MARKET FOR QUALITY

300

The world’s iron and steel producers depend upon the properties of a refractory material produced by this South African mining company.

312 GTA RESOURCES & BALMORAL RESOURCES A GOLDEN OPPORTUNITY

These two Canadian exploration companies are working together after an exciting set of drilling results for their Northshore Gold joint venture.

10 | Mining & minerals

contents

330

322 PMI GOLD CORPORATION A GOLDEN PROSPECT

Adansi Gold Company is set to become a very important mid-tier producer in just a couple of years.

330 PEAK RESOURCES RARE FIND

This junior exploration company is planning to use its discoveries to transform into a major mining operation.

338

338 RADAR IRON

A MIGHTY ATTRACTION This junior exploration company has established a pipeline of iron ore prospects in the Yilgarn region of Western Australia.

SERVICE PROVIDERS:

346

346 CYPHER ENVIRONMENTAL

SUSTAINABLE SOLUTIONS High quality dust control, soil stabilization and water treatment products that meet the growing requirement for sustainability.

356 PZS STABILIZATION AS THE DUST SETTLES

The revolutionary dust control and road stabilization product PennzSuppress D is finally being made available to a wider marketplace.

Mining & minerals | 11

RESPONSIBILITY ON T

he first official definition of sustainability was provided by the Brundtland Commission of the United Nations in 1987. The Commission’s report, Our Common Future, contains the of t-quoted sentence, “Susta inable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Inherent in this definition is the understanding that sustainable development contains three distinct constituent parts: environmental sustainability, economic sustainability, and socio-political sustainability.

The mining industry is on the front line when it comes to impacting the environment, the economy and the local communities where it operates. Issues including energy management, greenhouse gas emissions, water usage, recycling, wildlife conservation, community relations, education, housing, healthcare and employment opportunities are therefore high on the agenda for mining companies whose image is important in securing future licenses to explore and develop new resources.

It is perhaps an indication of the maturity of the concept that many of the industry’s leaders now prefer to use the term “responsible”, rather than “sustainable”. This special report has been put together to illustrate what some of the major players are doing to become good corporate citizens, and to understand the mechanisms they use to report on their sustainability performance.

12 | special report

Foreword

ON THE FRONT LINE

special report | 13

Sustainable

Performance T he Global Reporting Initiative (GRI) is a non-profit organization providing sustainability reporting guidance for the global economy. GRI has developed a comprehensive sustainability reporting framework that is widely used around the world, enabling organizations to measure and report their economic, environmental, social and governance performance – the four key areas of sustainability.

The International Council on Mining and Metals (ICMM) was established in 2001 to act as a catalyst for performance improvement in the industry. Its membership includes 21 mining and metals companies and 31 national and regional mining associations and global commodity associations.

14 | special report

Chaired by Marius Kloppers, CEO of BHP Billiton, ICMM has a panoply of industry heavyweights among its officers and members, including deputy chair Cynthia Carroll, CEO of Anglo American, and treasurer Mark Cutifani, CEO of AngloGold Ashanti.

For sustainability purposes, ICMM members are required to report according to GRI-G3 Guidelines and the Mining and Metals Sector Supplement, declare an application level of A, and obtain independent external assurance of subject matters 1–5 (see the following tables for details).

The facts and figures below should give you a flavour of what is involved in reporting a company’s sustainability performance and the progress that has been made in the last few years.

FACTS & FIGURES Profile of the formal mining industry Category

Asset base* (USD)

Number of companies*

Status

Global

Exceeds $10bn

50

Seniors

$3bn – $10bn

100

Global and senior companies which have access to the largest portion of available capital.

Intermediates

$1bn – $3bn

350

Companies often on a growth path to become seniors.

Juniors (producers)

$500m – $1bn

1,500

Companies which often have one mine.

Juniors (exploration)

$5m – $500m

2,500

Volatile and share market dependent; they are finders not producers, and their focus is on their exploration activities.

Junior – juniors

Below $5m

1,500

Focus is on accessing venture capital and enhancing their stock price.

Source: International Council on Mining and Metals 2012 *Approximately

Did you know...

$47

million Invested by Barrick in community development initiatives in 2011

$2.3

million

Invested by Gold Fields in socio-economic development projects at the Damang and Tarkwa mines in Ghana

799,223 hours

Global employee training provided by Newmont in 2011, at a cost of $15.86 million

special report | 15

Sustainable development framework All members of the International Council on Mining and Metals are required to implement the Sustainable Development Framework, a set of 10 principles which emerged out of the Mining, Minerals, and Sustainable Development project. ICMM conducts an annual assessment of each member company’s progress and the resulting performance assessment is published in ICMM’s Annual Review.

The 10 principles of the ICMM 1

Implement and maintain ethical business practices and sound systems of corporate governance.

2

Integrate sustainable development considerations within the corporate decision-making process.

3

phold fundamental human rights and respect cultures, customs and values U in dealings with employees and others who are affected by our activities.

4

Implement risk management strategies based on valid data and sound science.

5

Seek continual improvement of our health and safety performance.

6

Seek continual improvement of our environmental performance.

7

ontribute to conservation of biodiversity and integrated approaches to land C use planning.

8

Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products.

9

ontribute to the social, economic and institutional development of the C communities in which we operate.

10

Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

Source: International Council on Mining and Metals (ICMM)

16 | special report

FACTS & FIGURES Percentage of global production accounted for by ICMM members ICMM members operate at over 800 sites in 60 countries across the globe. They are responsible for a significant proportion of global minerals.

52%

Copper

48%

Platinum group metals

42%

Iron ore

41%

Nickel

38%

Gold

25%

Zinc

0

10%

20%

30%

40%

50%

60%

Sustainable development assessment ICMM conducts an assessment of the progress each member company is making against its reporting and assurance commitments. The table below indicates the basis of the assessment.

Subject matter 1

Alignment between members’ policy frameworks on SD issues and ICMM principles

Subject matter 2

Process and outcome for identifying and prioritizing material SD risks and opportunities

Subject matter 3

Systems and approaches to manage material SD risks and opportunities

Subject matter 4

Performance for the identified SD risks and opportunities

Subject matter 5

Global Reporting Initiative

special report | 17

Highlights of Barrick’s environmental performance Barrick Gold Corporation has a portfolio of 26 operating mines, with projects on five continents. Barrick has reported according to the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines for the past eight years and for the past five years it has used GRI-G3, the third version of the guidelines. The table below demonstrates its progress on key environmental criteria over the last three years.

2009

2010

2011

Energy consumption: MJ/tonne of ore processed

253

282

272

Greenhouse gas emissions: kilograms/tonne of ore processed

25

29

26

Water consumption: litres/tonne of ore processed

417

538

480

Scrap metal recycled: tonnes

24,190

43,852

392,589

Used oil recycled: litres

9,531,953

8,860,327

11,028,783

Offsite hazardous solid waste disposal: tonnes

4,310

5,355

6,289

Offsite hazardous liquid waste disposal: litres

3,686,366

3,257,835

3,722,992

81,218

79,752

126,001

Environmental training: hours

Source: Barrick Gold Corporation

18 | special report

FACTS & FIGURES Newmont Mining: 2011 value added figures for each country in which it operates Newmont Mining’s 2011 Sustainability Report was written in accordance with GRI-3 guidelines. Newmont has calculated its contribution to the economic growth of the regions in which it operates through the taxes it pays, the jobs it creates and the suppliers it supports, measuring its contribution as “value added.”

Source: Newmont Mining

$2,712.45

Australia Ghana

$753.82

Indonesia

$1,783.41

New Zealand

$131.89

Peru

$1,402.97

USA

$4,156.96 0

$1000

$2000

$3000

$4000

$5000

Added value ($million)

Gold Fields: Managing materials responsibly Gold Fields has eight operating mines in Australia, Ghana, Peru and South Africa, and four major projects in resource development and feasibility, with construction decisions expected in the next 18 to 24 months. In 2011, Gold Fields recycled the following materials.

Metal

16,264 tonnes

Plastic

215 tonnes

Timber as firewood

4,180 tonnes

Paper and cartons

2,794 tonnes

Other materials (e.g. backfill)

185,989 tonnes

special report | 19

20 | Special report

Interview: Terry Heymann

Conflict-free

gold Terry Heymann, Director of Responsible Gold for the World Gold Council, answers our questions about the World Gold Council’s development of the Conflict-Free Gold Standard written by: martin ashcroft

Special report | 21

Pouring of molten gold

22 | Special report

Interview: Terry Heymann

T

he Wo r l d Gold Council is the market development organisation for the gold industry. Based in the UK, with operations around the world, its 23 members account for around 65 percent of global corporate gold production.

Together with its members, the World Gold Council has developed the Conflict-Free Gold Standard, an initiative that represents a major advance towards eradicating gold that fuels conflict. Terry Heymann, Director of Responsible Gold for the World Gold Council, gave Business Excellence exclusive answers to our questions about the new Standard.

Q. What are the objectives of the Conflict-Free Gold Standard?

A. Our Standard sets out a demanding framework of practices and processes, which will enable gold mining companies to demonstrate that their gold

has been extracted in a way that does not fuel conflict or human rights abuses associated with conflict.

We believe that, responsibly undertaken, mining and related activities can play an important role in achieving sustainable development and alleviating poverty

auditors / auditing bodies, which will give confidence to stakeholders whether they are customers, investors or local communities, that the gold production is conflictfree. Our over-riding objectives are to eradicate gold that fuels conflict from the legitimate supply chain and to combat any misuse of gold.

23

Q. What are the main principles behind the Standard?

A. The Standard is underpinned by a declaration of principles which includes commitments to respecting human rights, ensuring that payments are not made, directly or indirectly, to illegally armed groups and having properly structured systems for the identification of and engagement with local stakeholders.

The Standard has three core assessments relating to ‘conflict’, ‘companies’ and ‘commodity’ and within each is a demanding framework of benchmarks and processes.

Through these, companies

Members of the World Gold Council

in developing countries.

However, when a gold mine is situated in a conflictaffected area, it is vital that the operation does not contribute to armed conflict and associated human rights abuses. Conformance to the Standard will allow companies to demonstrate this.

Conformance to the Standard will be externally assured by independent

Special report | 23

must assess the adequacy of their systems, and analyse their impacts upon those around them. Conformance to the Standard will be assessed by an external assurance provider.

The conflict assessment deter m i nes whet her the area in which the operation is sited should be considered as ‘conflictaffected or high-risk’.

Where the operation is considered to be in a conflict-affected or highrisk area, the company assessment determines whether the company has the appropriate systems in place to discharge its corporate obligations in this area, to avoid fuelling conf lict and associated human rights abuses. This includes policies around payments to suppliers, use of security forces

and engagement with the local community.

The com mod it y assessment looks at the systems in place to en su re appropr iate control of gold around the operation and the transfer of custody to the refiner, or transport provider.

Q. What benefits does the Standard contribute to economic growth and social development in gold producing countries?

A. Gold mining has the potential to lead to significant economic and social development. In many countries, gold mining plays a leading role in the economy – in terms of foreign direct investment, foreign earnings and tax revenue – as well as in the lives of thousands of people who work at the mines or in companies

affiliated to the mine.

Di si nvest ment or withdrawal by responsible operators in conf lictaffected and high-risk areas may make it more difficult to stabilise a conflict situation or to achieve post-conflict reconstruction.

“Our over-riding objectives are to eradicate gold that fuels conflict from the legitimate supply chain and to combat any misuse of gold” 24 | Special report

Interview: Terry Heymann

Milling and crushing of gold ore

Q. What are the other benefits of responsibly mined gold?

A. Responsible gold mining is an important contributor to economic growth and development in gold producing countries. As an example, for the five heavily indebted poor countries who are top 30 gold producers, gold production is equivalent to an average of 12.8 per cent of their GDP. World Gold Council members make material contributions to developing

250,000 People employed by World Gold Council members the economies and social prosperity of the countries in which they operate, through taxation, employment, supply chain opportunities, infrastructure development, capacity building and investment.

Worldwide, World Gold Council members employ some 250,000 people, many in highly skilled roles.

Recently we worked with Oxford Policy Management on a report that looked at the economic contribution of large scale gold mining in Peru. The report found that for every direct job in mining, at least 1.9 additional roles were created outside the mine. It is estimated that the indirect job creation impact of Peruvian large scale mines from 2005 to 2018

Special report | 25

will average nearly 8,700 additional jobs annually, and will exceed 10,000 in both 2012 and 2014.

One of the greatest benefits responsibly mined gold can bring is training and with the training, future opportunities. Many of these opportunities are more than just a job. Mining companies provide hundreds of hours of training, equipping people for a lifetime’s career. This could be the training needed to drive heavy or large vehicles, or it could be a supplier training

Modern mining facilities

26 | Special report

65% Newly mined gold produced by World Gold Council members

programme, equipping local firms to be able to meet the requirements of large mines and enabling them to compete on equal terms with international organisations in the supply chain.

Q. How can you persuade more gold mining companies to comply with the ConflictFree Gold Standard?

A. All the World Gold Council’s members – 23 organisations, responsible for more than 65 per cent of global corporate gold production – support the Standard and have committed to implementing it. However, the Standard is not restricted to World Gold Council members.

In order to encourage respon sible m i n i ng

Interview: Terry Heymann

“Mining companies provide hundreds of hours of training, equipping people for a lifetime’s career” practices, the Standard will be made publicly available, which means that any gold producing company can seek to demonstrate conformance.

The World Gold Council will not act as a certification body, recognising that to do so might create potential

conflicts of interest or the perception of such conflicts of interests.

The World Gold Council’s work to devise the Standard began towards the end of 2009. In 2010 the US passed the Dodd-Frank Act, a section of which declared four minerals including gold, to be potential ‘conflict minerals’. In 2011, the Organisation for Economic Development (OECD) also developed Guidance On The Responsible Sourcing Of Minerals.

While the Dodd-Frank Act is focused entirely upon the Democratic Republic of Congo and the Standard and OECD guidance are global in application, they are all concerned with the same issue. They show the same desire to ensure that gold cannot be misused to fuel conflict.

Q. What other projects is the World Gold Council involved in?

A. We recognise that the gold supply chain is looking for an integrated set of standards that give confidence that gold is conflict-free. We support the efforts of other organisations, such as the London Bullion Market Association, the Responsible Jewellery Council and the Electronic Indust r y Cit izenship Coalition as part of this process and we will continue to work with them to ensure complementary and mutually supportive standards.

For more information about the World Gold Council visit: www.gold.org

Special report | 27

28 | Special report

lead story

Progress to report Hein Boegman tells us how PricewaterhouseCoopers is supporting growth in South Africa’s mining sector, through its expertise in key issues such as financial reporting, black economic empowerment and corporate social responsibility written by: Andrew Pelis

BE Mining | 29

U

nquestionably, South Africa’s m in ing of n a t u r a l resources is playing a vital role in the country’s continued economic growth. But while mining knowledge and expertise are undoubtedly essential to successful operations, the importance of financial reporting is often underestimated.

For decades, firms such as PricewaterhouseCoopers (PwC), one of the ‘Big Four’ accountancy organisations, have provided a key service to mining companies looking to tap into South Africa’s precious commodities.

Hein Boegman is PwC’s Mining Industry leader for Africa, based at the division’s Johannesburg

headquarters. “One of the advantages of big organisations like our own is our ability to develop critical mass and to then focus on serving specific industries,” he states. “The critical mass of PwC, the world’s largest professional services firm, enables us to run a business model that focuses much more on the market by industry.”

Boegman, a partner with the firm for the last 20 years, focuses on mining companies exclusively. “We recognise mining as one of the predominate industries in South Africa and we have seen exponential growth, with PwC remaining one of the dominant players in this market.”

It is a competitive and complex market as mining

“The critical mass of PwC enables us to run a business model that focuses much more on the market by industry” 30 | Special report

lead story

Conveyor dumping coal at Glentaggart Coal Mine

Special report | 31

companies come to terms with ever-changing local and global regulations, which has enabled PwC to increase its range of services into areas such as risk management, certification, taxation, sustainability a nd env i ron ment a l accountability.

“We are also focused on corporate finance activities, but our workforce is mainly comprised of auditors and accountants, while our practitioners also include environmentalists

Copper mining

32 | Special report

and mining engineers, so that we remain fully in touch with mining issues,” Boegman explains.

“We work with many different types of clients: multinationals the likes of Rio Tinto, BHP Billiton and Anglo American, who may be headquartered elsewhere in the world but have an African presence and whom we will service through our bigger global network. This is important as their primary location may affect the financial

reporting legislation they are subject to, for example in some jurisdictions (such as the United States) the Sarbanes-Oxley Act has a major impact.

“Our other types of clients are more localised and may operate around Africa and have a listing on exchanges such as the Johannesburg Stock Exchange.”

Boeg man cites International Financial Reporting Sta nda rds (IFRS) as one area where mining companies can

Businessman reading documents

lead story

“There is a worldwide effort to get a standardised base for financial reporting and we play an important role in putting that in place across the continent” really take full advantage of PwC’s expertise. “There is a worldwide effort to get a standardised base for financial reporting and we play an important role in putting that in place across the continent,” he asserts. “But PwC also helps

companies to implement best practices and benchmarking through triple bottom line reporting [the production of a single report covering f ina ncia l statements a nd s u s t a i n a bi l it y performance] that provides a better understanding and a truer value of a company’s situation.”

This means that potential investors can build a much clearer picture of a mining company’s activities in areas such as the environment and corporate social responsibility. “People within the industry are held much more to account now and the more value we can add for companies to tell their story, the better.

This has a direct effect on helping investors to make more informed decisions.”

The importance of industry knowledge is of

course essential; and several years ago PwC established a Mining Centre of Excellence in Johannesburg to focus on key issues. “It really emerged through our dominance in this industry,” explains Boegman. “We run multi-disciplined teams covering risk services and environmental services and are able to give more specific support to specialised sectors. The Centre has given us greater adaptability as mining issues have changed: for example, royalty taxes are a relatively new concept in South Africa and we now have a strong group of people working on that.”

However, t ra ining extends beyond PwC staff: the firm has launched a business school running external workshops that help to educate the industry

Special report | 33

on issues like IFRS. Strong links to local universities also provide partners with the opportunity to lecture, something Boeg ma n has undertaken at the University of Pretoria and the University of the Witwatersrand.

The introduction of Black Economic Empowerment (BEE) continues to have a profound affect on all areas of South African industry.

PwC has worked hard to achieve a Triple A rating, the highest rating thus far awarded to firms of chartered accountants in South Africa.

“The ever increasing quality of the pipeline of suitably qualified candidates to join firms such as PwC is particularly encouraging,” says Boegman.

The South African government’s introduction of New Order Mining Rights

has also set requirements for black ownership and has created consulting opportunities for PwC, while the firm recently became involved in helping to BEEaccredit other businesses.

PwC can also help businesses to achieve ISO accreditation. A 40-strong team from the environmental group helps to identify gaps in company processes and consults on how to achieve accreditation.

Meanwhile, corporate social responsibility remains as important as ever; and PwC has involved itself in many local projects, including the Umbono employee volunteer programme in Johannesburg, where employees collect clothes and blankets for distribution during winter, and toys for children over the festive season. Further

programmes like the firm’s eSchool initiative help to develop a more computerliterate society. The firm also has longstanding commitments to bursary sponsorship.

In the past it has been suggested that the country’s

“The ever increasing quality of the pipeline of suitably qualified candidates to join firms such as PwC is particularly encouraging” 34 | Special report

lead story

infrastructure limitations held back South Africa’s industrial potential; but Boegman is sensing a change that PwC can play its part in achieving.

“Recent announcements from central government suggest they want to fasttrack improvements in transportation and energy infrastructure and I sense an urgency to maintain the current impetus within the minerals sector. We at PwC are heavily focused on energy and construction

Contract negotiation

Mining truck waiting to be filled

as well as mining, so hopefully there will be further opportunities for our country to utilise PwC’s international knowledge on some of these projects.

“One thing I personally look forward to in the future is even bigger penetration across Africa so that we can provide the full spectrum of

what PwC offers. There are so many emerging regions that are often remote and we can offer so much help with our global experience.

The challenge is to ensure that our business model remains agile enough to cross political, language and cultural boundaries,” he concludes.

For more information about PricewaterhouseCoopers and how they can help your company visit: www.pwc.com/gx/en/mining

Special report | 35

EVENTS

Electric Electra Mining Africa

10 to 14 september 2012 Expo Centre, Nasrec, Johannesburg, SA This September, the world’s mining players will descend once again upon Johannesburg to feast their eyes upon the very latest products, services, technologies and trends in the mining world. Electra Mining Africa is ranked as the second largest mining show in the world; and as well as attracting a vast number of visitors from the mining world, also boasts broad appeal to the

36 | Mining & minerals

construction, industrial and power generation sectors.

In 2010, the exhibition attracted over 35,000 visitors, over 730 local and international exhibitors and filled the 33,000 cubic metres of floor space and outside display areas. Thousands of visitors attended from African countries, joined by attendees from Australia, Canada, China, France, Germany, India, Italy, the UK and the USA. The show runs alongside co-located shows Elenex Africa, Machine Tools Africa and Transport Expo, improving the value proposition for visitors and exhibitors alike.

Independent research conducted over the 2004, 2006, 2008 and 2010 shows indicates that 64.45 per cent of visitors planned to buy capital items within one year of visiting the show; that visitors were interested in viewing all the halls and seeing all exhibits; and that 98 per cent of all respondents would visit the show again.

Electra Mining Africa 2010, for example, generated a significant number of sales off the floor, valuable sales leads and excellent business connections.

In 2010, 40 per cent of visitors preregistered online—the result of a growing

Special preview

Electra trend towards online predelegates valuable time and registration and a response ensuring they get the best to the strong marketing drive value from the meetings. and promotional campaigns The show is held at the in place prior to the start of Expo Centre at Nasrec, Proportion of attendees which enjoys a convenient the shows. Pre-registration surveyed in 2010 who location close to highways to the 2012 show will open would attend again prior to the event opening, and airports, just 15 minutes meaning that ease of access away from Johannesburg.

The multi-purpose venue and the popular Business has the largest dedicated exhibition Matchmaking programme will be further enhanced. This is a meeting service that facilities in Africa, with over 42,000 square captures exhibitor and visitor profiles metres of covered space, an additional 80,000 square metres of outdoor, multipre-event on an easy-to-search database purpose space, secure parking for up system, which then enables business to 20,000 vehicles and services such meetings to be set up in advance, saving

98%

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EVENTS

a nd m a nu f ac t u r i ng as telecommunications, (general engineering and i n -h ou s e c a t er i ng , manufacturing); electrical restaurants, entertainment engineering (electrical areas and conference facilities. The Expo engineering equipment and Number of exhibitors at Centre may already be supplies); materials handling the 2010 show familiar to visitors new to (bulk materials handling the show, having played equipment, storage and host to the International materials handling systems); Broadcast Centre (IBC) for the 2010 safety, health and environment (SHE equipment, supplies and technology); and football World Cup. construction (earthmoving equipment).

Electra Mining Africa will be showcasing Con ferences, work shops a nd a very wide range of products, services industry talks dealing with current and equipment within the categories of topics and technologies across a broad mining and related products (leading-edge spectrum of industries will be held mining technology, machinery, equipment alongside the exhibition. and supplies); industrial, engineering

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Special preview “Electra Mining Africa is ranked as the second largest mining show in the world�

The visitor profile for the event is truly wide-ranging, and will include directors, managers, mine technicians, procurement professionals, project managers, engineers, production managers, metallurgists, SHEQ officers, quality control specialists, analysts, training officers and government officials. Visitors will be drawn from an equally wide range of sectors including mining (underground, surface and open-cast), power generation, electrical

engineering, civil engineering, mechanical engineering, general and specialised engineering, processing, machine tooling, manufacturing, foundries, iron and steel, armaments, automotive, oil & gas, petrochemical, plant contracting, public works, environmental, emergency services, occupational health, safety, transport, professional services, training and education, communications, and governmental/parastatal.

The list of confirmed exhibitors is extensive, but just a few of them include: AFS Group, Air Liquide Southern Africa, Alaska Structures, AEL Mining Services, Africa Truck Parts, Afgen, the Australian Trade Commission, Aveng Manufacturing Duraset, BP Southern Africa, Barloworld Power, Bateman Engineered Technologies, Bauer Maschinen GmbH, Becker Mining Systems, Beowolf Mining, Bearing Man Group, Cochrane Steel, Consortium Cables, Contract Engineering Services, Eickhoff, the Embassy of the Czech Republic, Enerpac Africa, Engen Petroleum, Euro Steel Services, Fanuc South Africa, Flow Electronics, Fuchs Lubricants, GEA Group, Indy Oil, InterAfrica Engineering, Intrepid Mining Equipment, Invest

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EVENTS Northern Ireland, Kappa Engineering, KPMC, Liquid Automation Systems, M-Tool, Manitou SA, Martin Engineering, MBE Minerals, Metmeister, Minova RSA, MME Manufacturing, MTU South Africa, Nalco Africa, NOSA, Outec Controls, Parker Hannifin, Polysius, Rand Technical Services, Redman Engineering, ReinertRitz GmbH, Rema Tip Top, Renault Trucks South Africa, Rhino Plastics, Rockcrete Equipment, Rossi Southern Africa, Rotech Systems, Sandvik Mining and Construction, Schneider Electric SA, Sedgman, Siemens, SMT Scharf, South African Airways Technical, Sud

Chemie Water, Tranter Energy and Mining Services, Tru-Trac Rollers, Waco Industries, WearCheck, and WEC Projects.

An on-site exhibitor service offered by the exhibition organisers includes carpeting, furniture hire, plants, telephone/fax hire, audio visual hire, security, forwarding and handling, unpacking and positioning of exhibits, budget analysis figures, staff training, travel and accommodation packages, restaurant and exhibitor catering, exhibitor briefing and updates, and a comprehensive exhibitor catalogue.

The show has made a firm effort to attract local and international exhibitors

“The show has made a firm effort to attract local and international exhibitors and visitors�

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Special preview

and visitors, drawing on the expertise and contacts of its relationships with industry associations, the Department of Mineral Resources, the Department of Trade and Industry, the South African Equipment Export Council (SACEEC), chambers of commerce, trade consuls, agencies, and local and international media publications. Marketing efforts have included digital marketing (websites, website links, online preregistration, complimentary tickets and e-zines); direct mail; complimentary tickets distributed through associations, chambers of commerce and the media;

publicity (trade, business news, dailies, online media, TV/radio and news agencies); advertising (trade, business news, dailies, radio); and roadside posters.

This year’s show is promising to be the most comprehensive and valuable yet, so don’t miss the opportunity to get right to the heart of the global mining industry in Johannesburg this September.

For more information about Electra Mining Africa visit: www.electramining.co.za

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KPMC

KPMC is a niche BEE project management and engineering company, specialising in combining the practicalities of mining, the challenges of logistics and the volumes of bulk materials handling with innovative solutions and experience written by: John O’Hanlon research by: Marcus Lewis

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K

PMC began life when Mike Daniel set about re-establishing the materials handling business of UK-based Strachan & Henshaw, getting it fit for South Africa’s post-apartheid era. When S&H changed hands in the early 1990s, he seized the opportunity to claim some of the expertise and talent freed up in that process, bringing in South African partners to establish a truly indigenous South African engineering business: the result was KPMC, a Level 2 BEE enterprise with bulk materials handling at the core of its capability.

KPMC grew quickly after it was established in 2005, and today is known throughout southern Africa and beyond as an environmentally friendly business that uses innovation to reduce the impact and cost of moving ore and minerals from one place to another. The company is organised in two divisions, says Daniel—capital projects, and aftermarket sales and spares.

“We focus on mining products and systems including ore transportation solutions; and the logistics and project management that we do are very important too.”

KPMC understands the business of mining, and has scoured the world to bring the best equipment to Africa—above all, the kind of equipment needed to run modern mines efficiently and at low cost, such as vibrating floor technology for automated ore handling both on surface and underground, and ropeless winders that solve how to travel down a deep-level mine more quickly and safely and more cost-effectively than any other available method.

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Freight train hauling goods

KPMC

But the best equipment is not enough on its own. An effective supplier to the industry needs to be able to put together a package, as KPMC did last summer when the South African engineering company Bateman Engineering asked it to provide three American manufactured agglomeration drums for Areva’s huge uranium mine at Trekkopje in Namibia. “We manufactured the rubber lining in Singapore, the girth

gear and the rails in Germany, shipped it all to the USA where we did the steel fabrication and shop commissioning, loaded it all onto three barges, transported it down the flooded Mississippi and shipped it from Houston to Walvis Bay, then brought it up to the site by road.”

Not long ago it would have been unthinkable to source steel fabrication in the USA but though China was considered,

“We focus on mining products and systems including ore transportation solutions”

Ecofab rail car covers covering fertiliser snake

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KPMC

Coal auger sampler

the USA came up with the overall best price. “America is very competitive right now,” says Daniel. This was an excellent example of how KPMC combines logistics with engineering to deliver a solution.

Each of the clients has different needs, he says, though the reason KPMC pops up in all the largest projects is invariably that it saves them money.

Just about the biggest greenfield coal operations in the region are found in the Moatize basin in the eastern Tete province of Mozambique. KPMC is involved with both large operators there, Vale do Rio Doce and Rio Tinto. It is carrying out the prefeasibility, feasibility and detailed design for

bulk materials handling in Phase 1 of Vale’s project, and is part of the team working on Phase 2. In Rio Tinto’s it will play a vital part in quality control, sampling the road and rail trucks as they leave the mine. “Our equipment is a road truck with a hydraulic pack on the back and an auger that extracts coal samples, pulverises it, screens it and analyses it. The lab result is available before the truck reaches the harbour so they know which stockpile to put it on.” Accurately monitoring the grade of the coal is crucial to achieving the best market price.

South Africa’s economy is doing well and had been shielded from the worst aspects of the global recession but compared with

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its neighbours it is positively stagnant. The drive for future growth in the resources sector lies to the north, and KPMC is already engaged in Zimbabwe, Botswana, Kenya and Zambia, as well Namibia and Mozambique. That’s why the office location at the Johannesburg suburb of North Riding is ideal—apart from allowing the staff to avoid the city’s congestion it is 10 minutes from Lanseria Airport. “Our engineers can fly out to these countries, visit the mine site and be back working on the designs very quickly—it means we can be really quick on our feet!” he says.

The severest restraint on growth in Africa is the lack of infrastructure, says Daniel, and what road and rail links do exist are fragmented. This makes it difficult to supply mines, which are rarely near an existing railhead. “Where there is a railway line we can use that: where there is a road we can use the road. But there are gaps: I can take a train from Walvis Bay to northern Namibia but there is no rail link to Zambia. I have to go onto a road for 200 kilometres, then when I get to Livingstone I go via rail all the way to Dar es Salaam.” But until recently there was no cost effective way to transfer bulk materials from truck to train and vice versa.

Now, KPMC is in partnership with an American company called RailRunner to bring bimodal transport to South Africa— the only hurdle still to cross is approval by rail operator Transnet, expected any time now. Basically RailRunner is a road trailer that can be transferred to rail bogies in a matter of minutes, making use of cheaper rail transport wherever it is available—one

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KPMC

Vibrating floor clearing a grain silo

locomotive and a two-man crew replaces 150 trailers, tractors and drivers so the cost of transportation is drastically reduced.

Daniel believes the introduction of bimodal transport will have as big an impact on African logistics as mobile phones are having on African telecommunications.

The trucks will be manufactured locally, and can be as versatile as the market demands, with side tipping trucks, ISO containers, tankers and even a truck designed to carry an inflatable ‘balloon’ type tank to carry diesel or liquid chemicals to a mine site. The tank can be deflated and the vehicle returned with ore. “It’s a way to make sure we have as much back-haul cargo as possible, cutting the cost of the

operation even further.” Bimodal transport fits neatly with KPMC’s stance—a niche solution that is also highly innovative—as well as with the particular circumstances of the African market and the needs of the mining companies among its clients.

When KPMC offers a service or a product, it looks at the whole life cost as well as the capital cost, he continues, because operating costs account for the greater part of any project. “We keep our costs as low as possible because our clients are not cost makers, they are cost takers, and they have to establish where they are in the global cost curve of their commodity. We are trying to position them at the bottom of the cost curve.”

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Stacker stacking out coal

kpmc

2005 Year KPMC was founded Examples include a vibrating floor that uses just 40 watts of electricity to move material, or a newly launched and SABS approved line of electric trailing cables to feed moving equipment like draglines or continuous miners. Using new rubber formulations, these last longer and increase the uptime of the equipment. And with millions of rand being lost each year to cable theft, a plan to give every cable a microdot ‘signature’ to identify its owner will at last provide a deterrent to opportunists attracted by the black market for copper.

Products and systems like these make KPMC an attractive partner for mining companies, consultants and smelters, and its project management arm means it can always identify the most appropriate technology for a specific bulk handling problem. And to deliver, it needs people, says Daniel. “Among the 20 or so people working at KPMC, we have a huge amount of experience—that is our greatest asset.

But every grey-haired engineer has an apprentice, because it would be unthinkable to lose all that knowledge.”

For more information about KPMC visit: www.kpmc.co.za

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Convincing mines to spend more money up-front on the expectation of lower life-of-mine costs is what one South African supplier is working hard to do

written by: Alan Swaby research by: Marcus Lewis 52 | Mining & minerals

SMT Scharf Africa

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EMTS moves supplies and consumables underground

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SMT Scharf Africa

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t’s a dilemma for both seller and purchaser when new technology comes along that looks as though it should be better—and is declared by the seller to be better—but which requires the buyer to dig deeper in his pockets in the short-term. The mining industry is well known for its conservatism and a preference for sticking with what it knows: after all there is a lot to be said for reliability, even if it does come at a price.

Fortunately, though, knock on enough doors and someone, somewhere, will be found who is willing to try something new.

This has been the strategy of SMT Scharf Africa while marketing its electric monorail transport system (EMTS).

“Globally,” says managing director of SMT Scharf Africa Wayne Busch, “SMT Scharf is most closely associated with coal mining.

But in South Africa—and neighbouring countries for that matter—we have found a niche in hard rock mining operations that go underground in search of gold, platinum, chrome and nickel. Here we are finding growing interest in EMTS.” The role of EMTS is logistical. It isn’t there to remove ore or mining waste but rather to move supplies and consumables underground: bulk materials such as cement, timber or steel for construction, explosives for advancing the mine face.

Nor is EMTS likely to be used where a conventional vertical shaft is in place. But where access to the various operational levels is via an incline or decline tunnel (the system can be used where there is a combination of vertical shaft and decline/ incline systems), Busch argues that the

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R85 million SMT Scharf Africa’s approximate turnover

Workers underground

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monorail is literally head and shoulders above the commonly used technology in the decline method of mining.

“There are two main approaches,” he explains. “Either mine cars running on rail tracks are pulled by winches or the mine uses rubber-tyred vehicles, namely UVs and LHDs. Our monorail has countless operational advantages over both; but in a nutshell, winch power finds it difficult to cope with changes in direction—whereas a monorail can negotiate tight curves with ease—and with winch power you also have double handling, which costs time and adds manpower resources. Alternatively, rubber tyres are quickly ineffective when the slope exceeds nine degrees or there is surface water in the tunnel. Our monorail can operate comfortably at 30-degree inclines.”

It has to be accepted that EMTS is almost certainly going to go into green field mines, as it is unlikely that any mine would abandon the millions invested in the current way of doing things, however great the benefits. But in new developments—and in Southern Africa there are plenty—the benefits of an electrical powered monorail can immediately be felt.

“There is something like a five or six year

SMT Scharf Africa

Monorail system

capital expenditure cycle,” says Busch. “We had a bumper year in 2009 when revenue hit R170 million—twice our normal annual sales. We expect something similar in 2014 as we have many new mining projects currently going through the various feasibility stages that have been costed on using our system.”

So how will these projects benefit from EMTS? First and foremost, by using electricity, all the costs associated with diesel are avoided. Not only the continuously rising price of the fuel itself but also all the cooling and ventilation hardware needed

underground to cope with the fumes and the engine and exhaust heat generated. Instead, a typical SMT Scharf monorail power plant is comprised of four non-polluting 30kw motors that only draw power on the upward inclines. When the monorail is going downhill, the motors actually put energy back into the grid. Given that it employs zeroemission transport technology continuously to go from a zero to 30 degree incline, all these factors combined mean that EMTS not only saves its mining clients money, but gives them a much greener footprint too.

Ongoing maintenance costs for a monorail

“We have found a niche in hard rock mining operations that go underground in search of gold, platinum, chrome and nickel” Mining & minerals | 57

are also considerably less. The electric motors and rolling sets need precious little attention—certainly in comparison with diesel power plants that need regular servicing. Safety is also an issue: should diesel spill or leak, secure footing is compromised—not to mention the inherent dangers associated with winch ropes.

The monorail is designed to carry a standard mine car or skip and can transport six of them at once, giving a total carrying capacity of 20 tonnes. SMT Scharf already has over 20 such systems running at mines run by Impala and a couple of other smaller installations. The longest drift shaft at the moment is three kilometres serving 10 levels, but in other parts of the world there are far longer and more complex rail networks.

While EMTS is not intended to move personnel, SMT Scharf has a sister chairlift system. This has found ready acceptance and there are some 140 installations around Southern Africa. Combine these with the SMT Scharf subsidiary Sareco Engineering and you have a situation where together they hold 85 per cent of the market for personnel chairlifts.

Over the years, since the 1950s, the parent company has metamorphosed

several times as it has been acquired by ever larger organisations until in 2007, it went solo once more and listed on the German DAX. In the process it has gathered a much wider range of products and technologies than are being offered in South Africa. However, at the Electra Mining Conference in Johannesburg later in the year, a new diesel powered shunting trolley, known as Sharman, will

“We had a bumper year in 2009 when revenue hit R170 million—twice our normal annual sales” 58 | Mining & minerals

SMT Scharf Africa

Ongoing maintenance costs for a monorail are less than for diesel-run systems

be launched which Busch believes has a role to play in South African conditions.

“There’s a need,” he says, “for a way of moving supplies and materials into the stopes [the area where the ore face is being excavated usually by drilling and blasting]. This is usually done by winch but in such an inherently hazardous place, anything capable of reducing risk should be welcome. We also envisage many other ad-hoc tasks could be done by Sharman which might otherwise take production equipment out of action.”

SMT Scharf is still a relatively modest operation in Southern Africa although significantly larger than when Busch took over in 2007, when it had a staff of just six employees. Today the turnover

is regularly around R85 million and as well as 17 full-time employees, there are another 60 part-timers.

Although most of the equipment has to be imported there is still around 15 per cent of the value added in South Africa and Busch is hoping that this will be increased in the future by expending the fabrication facilities it has at its headquarters near Randburg in Gauteng. No doubt this will be on the agenda to coincide with the expected accumulation of orders for start-up mines after years of speculation.

For more information about SMT Scharf Africa visit: www.smtscharf.com

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Tranter Rock Drills

Eye to the future

Jack Liebenberg, managing director of Tranter Rock Drills, discusses leading the company through the latest phase of its evolution written by: Jayne Alverca research by: Marcus Lewis Mining & minerals | 61

Long hole drilling using S36 machine

Tranter Rock Drills

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ranter Rock Drills may be a relatively new commercial entity, but it has an industrial legacy that stretches back more than half a century. The Rock Drills division of Boart Longyear, known throughout the South African mining industry by the acronym SECO, was originally founded in 1934 and has honed its expertise in rock drills and airlegs since the 1950s.

The business, consisting of Boart Longyear’s percussive rock drills and hard rock tool product lines and all associated manufacturing operations, including the site at Roodepoort, was acquired by Tranter Energy and Mining Services (TEMS) in 2009. This black-owned and black-managed company, part of Tranter Holdings, is one of the most dynamic forces in the contemporary mining and energy industry in Southern Africa.

Tranter has already taken a lead role in a number of new broad-based groupings, including women, communities and employees, and can point to an outstanding track record in operational business skills and technical expertise. Founder Joshua Ngoma believes that Southern Africa’s mineral assets have the potential to transform the regional economy and improve the lives of millions of people who continue to live in poverty.

In line with this vision, the managing director of Tranter Rock Drills, Jack Liebenberg, is now tasked with overseeing the next phase of evolution of the business.

The SECO range of percussive rock drills and hard rock tools will be marketed far

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more extensively in both South Africa and other sub-Saharan African countries.

Tranter Rock Drills also markets a range of its products via Boart Longyear to the rest of the world.

His immediate priority is to completely reinvigorate the aged plant legacy to create a solid foundation and springboard for future growth. “Some of our current plant dates back as far as the 1950s and for at least 15 years before Tranter acquired the business, there was no new capital investment. Now we need to increase capacity and productivity and we are making a quantum leap by investing in a total of 15 new machines simultaneously, rather than by dripping investment slowly into the company.”

Over the last year, the management team has carefully examined all the bottlenecks and Liebenberg is now convinced that a programme of investment across all operational areas, which includes milling, turning and grinding, as well as some specialised processes, can generate an increase in productivity of at least 70 per cent, as well as leading to all-round quality improvements.

Another tranche of investment will see Tranter Rock Drills move much closer to its customers. “Our major markets in

Employee testi

the South African mining belt are all at least 250 kilometres in distance from our headquarters; and some are 450 kilometres away from us,” he explains. “We intend to move much closer, with distribution warehouses located directly in the area of the mines. This will also give us the scope to become much more involved in the routine maintenance that all rock drills require for optimum performance. After 30 or 35 shifts

“Our M2 series of rock drills far exceed new legal requirements from the Department of Mineral Resources for noise muffling” 64 | Mining & minerals

Tranter Rock Drills

ing S140 on shaft sinking jumbo

Testing of S140 on site

a rock drill must be taken out that we have seen in recent for maintenance, but this is decades, too many people not the mine’s core business. are still killed and maimed It has far more synergy with in mining accidents and it is an absolute priority our own activities and is a Maximum shifts a rock for us to collaborate with service we are capable of drill should undertake mine operators to reduce undertaking to the highest prior to maintenance these incidents to an OEM standards, rather than the sub-standard absolute minimum.

“Here at Tranter, we look service which many smaller operators are currently offering.” at our products on a feature-by-feature basis Liebenberg is keen to stress that the to see how we can design out potential for focus of the business is growing by listening accidents,” he continues. “Noise reduction carefully to what mine operators want is also a huge and important consideration from the equipment they purchase. “As an for our design engineers. Most miners OEM supplier at the top of the chain, we with a long working life have some level of know that this industry is extremely safety- hearing loss and the need to address this conscious. Despite the huge improvements was identified by our predecessors. We have

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continued with research into this area and made many design improvements which are exemplified in our M2 series of rock drills which far exceed new legal requirements from the Department of Mineral Resources for noise muffling,� he says.

The new S25-M2, for example, offers significantly reduced noise levels, but is an exceptionally hard-hitting and powerful jackhammer designed for any development

end drilling operation where the operator can adopt a standing posture. Another similar product, the S215-M2, offers a special lightweight solution to environments where the operator must adopt a sloping posture.

Tranter Rock drills has also developed the S36M drill for long hole drilling operations.

In another safety initiative, Tranter Rock Drills is also involved with advanced testing of an anti-finger crushing device for airleg

“Our engineers have come up with a device which makes pinched fingers a thing of the past�

Joshua Ngoma addressing Tranter Rock Drills employees

66 | Mining & minerals

Tranter Rock Drills

Delivering muffled machines to client

operations. Liebenberg explains that with standard airleg operations, it is far too easy for operators to have their fingers crushed by the swivelling joint that connects the pneumatic rockdrill with its associated thrust leg. “Our engineers have come up with a device which makes pinched fingers a thing of the past by designing out those parts which have the capacity to cause crushing injuries. Within the next three months it will be on the market and we believe it will dramatically reduce the current accident level which can lead to serious injury to operators and also to substantial lost time because each time a mine has an event of finger pinching injury, work is stopped at the face,” he explains.

“In general, the products we sell have been around for many years and we are working with an excellent range that has been trialled and is trusted across the mining industry,” Liebenberg continues.

“Our challenge now is to move forward and gain a competitive advantage with incremental improvements to the drilling process, such as our unique noise attenuation technology and the anti-finger pinching device to create a safer and more productive workplace,” he concludes.

For more information about Tranter Rock Drills visit: www.tranterenergyandmining.co.za

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Czech Republic Mining Association

Highlighting high standards The Czech Republic Mining Association is on a mission to promote the modern face of its industry, providing a forum for its members that fosters a responsible approach to mining based on best practice and knowledge exchange written by: Gay Sutton research by: Robert Hodgson

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KK1300 excavtor in the Severoceske doly lignite mine

Czech Republic Mining Association

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ining in the Czech Republic has a long history stretching back to the Stone Age. Today, the Republic’s mining and extractive industries are modern and forward-thinking, and include lime, sand, stone and coal extraction, as well as Europe’s last remaining operational uranium mine at Rozna. Yet the industry’s reputation among the general public is still tarnished by uncomfortable memories from the previous period before 1989. “Much needs to be done to inform the public and non-governmental organisations about the health & safety and environmental standards of the modern-day industry,” explains David Poc, project manager for the Czech Republic Mining Association. “That is one of our major challenges.”

Formed in 1990, the Czech Republic Mining Association has over 130 members including companies engaged in mining and quarrying, producers and importers of mining and quarrying equipment, geological, engineering and environmental companies, and not-for-profit organisations, museums and educational institutions such as the Faculty of Mining and Geology Technical University in Ostrava or Masaryk University’s Faculty of Science. One of the Association’s primary functions is to act as a conduit, bringing together the knowledge and experience of each of these bodies to promote best practice and to forward the interests of the industry.

For its members, the Association provides two key services, supported and promoted by an informative quarterly magazine,

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Aerial view of International Demonstration Fair of Machines and Equipment for Mining, Processing and Building Industries Expo Mokra 2012

Mineralni Suroviny. “Firstly, we organise meetings twice a year and provide a forum for our members to exchange new information,” says Poc. A programme of presentations by experts from the industry, government authorities, NGOs and universities keeps members informed of the newest developments, the latest trends and discoveries in their field. “This is especially important for explaining changes to environmental, industry and general law,”

Czech Republic M

he continues, “and also for sharing the latest thinking on biodiversity, the protection of wildlife habitats and the rehabilitation of former quarry and mine sites.”

The Association’s second major initiative is the International Demonstration Fair of Machines and Equipment for the Mining, Processing and Building Industries Expo, the largest mining and quarrying event to be staged in central Europe. Held every two years, it’s unique for being located in

“We organise meetings twice a year and provide a forum for our members to exchange new information” 72 | Mining & minerals

Czech Republic Mining Association

Mining Association representative with the Association’s banner

International Demonstration Fair of Machines and Equipment for Mining, Processing and Building Industries Expo Mokra 2012

an active quarry, where a One of the most exciting city of marquees is erected European mining and quarrying initiatives of to house the exhibition, and the latest equipment is put recent years is the NEPSI to work in the quarry in a ag reement, a unique Visitors to biennial volu nt a r y i ndu st r ylive demonstration.

Mining Expo at Mokra led initiative signed by Behind the scenes the Quarry organisations involved in Association performs many mining and processing legal and administrative crystalline silica. The functions, representing its members at a national and European level. aim is to protect the health of workers It is very active in advising government by implementing credible safe handling on industry issues and with the drafting practices and preventing the inhalation of legislation. The Association has also of hazardous dust. “This is particularly been a member of Euromines since 2004, significant because it is the first time regularly working with fellow mining that a social agreement, rather than a associations in central Europe. directive or regulation, has been agreed

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at the European level in such scale,” says Poc. “Our role in this agreement is as a guarantor and as a data gatherer for mining and extractive industry companies operating in the Czech Republic.”

The Association was responsible for translating the highly technical agreement into the Czech language, and is currently working with the Ministry of Industry and Trade on its implementation including

use as an example for other voluntary instruments within the industry. Using the EU online reporting system, the Association consolidates site-level data and submits it to the NEPSI Council every two years.

Focusing in at a local level, the Association plays an active role in fostering agreement between NGOs and the industry, particularly regarding environmental issues. “We are also working hard to present the changes

“The industry is no longer reacting to regulation: it’s actively promoting better environmental, health and safety practices”

Quarry plant at Smirice

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Czech Republic Mining Association

View of Smirice quarry

that have taken place in the industry in the past 20 years,” Poc continues. “The industry is no longer reacting to regulation: it’s actively promoting better environmental, health and safety practices.”

The Association recently held its landmark ninth biennial International Demonstration Fair of Machines and Equipment for Mining, Processing and Building Industries Expo, which returned this year to the Mokra Quarry, some 15 kilometres east of the city of Brno for three days from 5 to 7 June. A major European mining event, it boasted

90,000 square metres of exhibition space housing over 200 exhibitors, and attracted around 15,000 visitors from across Europe.

Once again the Ceskomoravsky Cement Company, part of the Heidelberg Cement Group, prepared the Mokra quarry to demonstrate the latest crushing, processing, drilling and materials handling equipment in an authentic working environment.

The Expo was also the venue for presenting two important nationwide awards funded and run by the Association. The first is the Green Bridge Award, launched in 2006 and

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Rehabilitation of Ruzenin quarry

Czech Republic Mining Association

“Here in the Czech Republic, former quarries have been turned into excellent natural theatres and arenas” presented to the best mine or quarry rehabilitation project taking into account its effect on the environment, social and economic benefits, and the potential for scientific progress. “There have been several excellent examples of this type of project in the EU. The Eden project in the UK is one,” Poc says. “Here in the Czech Republic, former quarries have, for example, been turned into excellent natural theatres and arenas.”

Alongside this, the Green Technology Award recognises improvements in fuel and emissions efficiency for any technology used in mining and quarrying: this encompasses anything from drilling equipment through to entire processing solutions. The aim with both awards is to highlight the environmental achievements being made by the Czech mining and quarrying industry.

Visitors to this year’s Expo also had the chance to observe some historic miningand quarrying-related crafts. Students from the Sculpture and Stonemasonry School in Horice carved statues from stone throughout the three-day event, demonstrating a skilled and rare craft.

Mokra quarry, next to Karlovy Vary

“Quarrying and mining have been an important part of Central European industry for many generations and we aim to show that it is still alive here,” Poc concludes. “Raw materials have to be mined and extracted somewhere, and we believe it’s better to source those materials here in the EU where we have high health & safety and environmental standards rather than import them from the Third World where we have no control over standards. We believe that is now beginning to become recognised.”

For more information about the headerRepublic Czech folio visit:Mining Association visit: www.xxxxxxxxxx.com www.tezebni-unie.cz

Mining & minerals | 77

78 | Mining & minerals

Photo credit: Š Nigel Wright

The Alliance for Responsible Mining

Transforming

the industry Executive director Lina Villa Córdoba discusses ARM’s vision for the human face of the industry written by: Jayne Flannery research by: Robert Hodgson

Mining & minerals | 79

80 | Mining & minerals

Photo credit: © Nigel Wright

M

easured by value and volume, the mining industry is dominated by a relatively small number of major industrial players, each typically holding a vast global asset portfolio. Yet at the base of the pyramid are innumerable indigenous artisanal and small-scale mining operators whose output may be measured in a couple of kilograms a day. The artisanal and small-scale mining (ASM) sector continues to operate informally in development economies where this form of mineral extraction, relying on age-old technologies, has been of economic importance for generations.

Lina Villa Córdoba is executive director of The Alliance for Responsible Mining (ARM), which is based in Colombia.

Although the informal nature of ASM activity makes quantitative data capture a problem, information from local and international sources leads her to believe that approximately one hundred million people across South America, Africa and Asia are dependent on the ASM sector for their livelihoods. Around half of this population are reliant on gold mining.

“Large industrial producers account for about 90 percent of all the gold produced in the world, but the ASM sector constitutes 90 percent of the work force. It is the human face of the industry and any effort towards more socially responsible mining must take ASM into account,” she says.

The organization she represents is an independent, not-for-profit initiative with a global reach that campaigns for more just and

The Alliance for Responsible Mining

A miner separating minerals on a shaking table

Mining & minerals | 81

Photo credits: © Cedric Faimali

equitable distribution of resources within the mining industry. ARM was established in 2004 to enhance equity and wellbeing in ASM communities through improved social, environmental and labor practices, good governance and the implementation of ecosystem restoration practices.

“ARM was born from the local initiative Oro Verde, or green gold,” she explains.

“It centered on a group of organizations working together to support ASM miners in a bio-diversity hotspot where gold was the sought after mineral. Our remit was to upscale this work and take it to a global platform while continuing the focus on gold.”

Today, ARM is a networked organization that reaches out across all the main mining regions in the world. The original remit was to focus on South America, but ARM has more recently expanded its work into Africa and Asia where it has a particular focus on the ASM sector in Mongolia.

“We establish strategic alliances with national NGOs working on related issues and operate on the ground through national partners,” she continues. “Our contribution to the network is the development of tools and methodologies, advocacy at the global level and the development of standards

In the mining s

for the ASM sector, such as the Fairtrade and Fairmined standard. We see ourselves as knowledge brokers in the network with particularly strong contacts in South America which we are working to replicate in other regions.”

ARM contends that improving the social and environmental performance of the ASM sector will positively impact on the lives of some of the world’s poorest people,

“Our contribution is the development of tools and methodologies, advocacy at the global level and the development of standards” 82 | Mining & minerals

The Alliance for Responsible Mining

shaft of a Macdesa mine in Peru

while ignoring it can only aggravate conflict, poverty, inequity and environmental degradation.

Gold produced by the Macdesa company

can obtain a better price for their output by being able to deal with more formalized intermediaries.

Governments, in turn, The artisanal and smallare more likely to receive Formalizing ASM scale mining sector tax revenues to support The strategy for realizing development ef for ts. this vision is by pushing Formalization can also forward on multiple fronts to formalize the sector. Capacity building and provide a focal point for work to improve meaningful negotiation and development the sector’s safety and environmental are impossible when dealing with countless practices. It offers the potential to discrete operators. The development of integrate producers’ co-operatives into formal entities capable of representing the national credit schemes – much needed if sector’s interests in a fair and democratic the sector is to gain access to improved, way is a fundamental building block. environmentally friendly technologies that There are many aspects to formalization eliminate the current reliance on mercury of the sector. Producers, for example, to amalgamate gold.

ASM

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2004

Photo credit: © Kike Arnal

Year in which The Alliance for Responsible Mining established

A miner drilling into the rock in Aurelsa

84 | Mining & minerals

“Access to credit is vital to escape from the poverty trap in which most ASM miners currently exist, and if cleaner working practices are to be introduced. Meanwhile, it is completely unrealistic to have the same expectations of the ASM sector as of large industrial players who have huge resources at their disposal,” she says.

One of the most important benefits of formalization is the potential it offers to stabilize politically weak and volatile mineral rich regions by removing a funding route for arms. Throughout human history, mineral resources and conflict have gone hand in hand, and the trend continues.

“History can show us a number of conflict situations which might have been fuelled by the ASM sector and in such areas there has to be a political will on the part of the state and the industry to ensure that ASM has developmental opportunities and is not contributing to a worsening of the situation.”

From another perspective, she points out that as the industry develops more and more voluntary standards, there is a growing collateral impact in terms of reputational risk to any buyer sourcing from the ASM sector. This inevitably damages local livelihoods and further limits market

Photo credit: © Nigel Wright

The Alliance for Responsible Mining

Taking out the minerals in Cotapata, Bolivia

opportunities for the miners involved, creating a vicious downward spiral for those reliant on the sector.

Industrial engagement ARM is now firmly established within the international development community and counts on support from a number of high profile donors. However, for Villa, the involvement and engagement of the major players in the industry is essential. “We have

also established a producer’s support fund which has been created specifically to invite industrial players to join with us in working to strengthen the ASM sector,” she says.

“Larger companies operating in this industry are at the very center of the corporate social responsibility and sustainability debate,” she continues.

“Today we see these companies increasing their collaboration and participation in a plethora of voluntary and mandatory

“Larger companies are at the very center of the corporate social responsibility and sustainability debate” Mining & minerals | 85

Exchanging panning dishes in Chocó, Colombia

“It is absolutely fundamental that the ASM sector should be part of the sustainability movement” sustainability initiatives which are being driven by advocacy organizations, national governments and the international community. These forces are converging to compel big players and transnational corporations to commit to a transformation of the sector. From our perspective at ARM, it is absolutely fundamental that the ASM sector should be part of this movement.”

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Although some mining concessions are granted on previously “virgin” territory, it is frequently the case that the ASM sector is already active and may have been for many years. Activities that were previously informal can quickly be deemed illegal, often leading to violent conflict. Clashes between the two extremes of the industry have resulted in some mining operations having to be abandoned

Photo credits: © Ronald de Hommel

The Alliance for Responsible Mining

The traditional wooden panning dish

completely, and widespread criticism from human rights organizations. Such conflicts are ugly, costly and have involved industrial players in exactly the sort of publicity they seek at all costs to avoid, leading in some instances to the withdrawal of institutional investors and government support.

“More and more large companies are recognizing that it is in their interests to support and formalize the ASM sector, as that is the only way to open a formal path for negotiation,” says Villa. “The conflicts we see with the ASM sector will not go away on their own and formalization is the only way for state actors and industrial players to engage in a positive dialogue with the sector.

“The mining industry has a particularly important role to play because of its strong leverage position with national governments. It can also contribute by formalizing informal agreements that grant concessions to the ASM sector. The miner then has a legal right to use the resource and his obligations and relationships are transformed in a way that can benefit everyone. There is a real opportunity for industrial players to address the potential for social and economic development that ASM offers and push for positive transformation in the sector.”

Villa is not an advocate of mandatory legal enforcement of corporate social responsibility, but believes in working

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responsibility has focused primarily on initiatives led by the industrial-scale mining and jewelry industries. Although these steps towards improving performance and transparency are critical, she points out that they exclude millions of ASM producers and so limit the social and economic development opportunities of the industry.

ARM is setting new standards for responsible ASM production to enable producers to deliver metals and minerals through “fairly mined” supply chains to the market. The organization believes ASM can become a socially and environmentally responsible activity and contribute more

Photo credits: © Nigel Wright

through a process of consensus and knowledge-sharing with the industry’s larger players. “When CSR is linked to binding obligations, its scope for achieving true sustainability becomes limited and it is reduced to a tick box exercise. All corporations must take note of markets and consumers, though, and we see these as key agents of change and the main driver of the steps forward we have witnessed to date.”

However, Villa does want to see the value creation opportunities inherent in mining distributed more equitably throughout the entire supply chain. To date, the impetus for greater social and environmental

Taking out the wagon

88 | Mining & minerals

In front of the entrance to one of th

The Alliance for Responsible Mining

“The next step forward is a global institutionalized mechanism to ensure harmonization of all the different standards that exist” fully to improving the life chances of marginalized artisanal miners, their families and communities.

The biggest environmental challenge associated with the ASM sector is the continuing use of mercury as an amalgamation agent in the extraction

he Aurelsa mines

process. It represents a dangerous hazard for anyone in contact with it and is a major environmental contaminant. Villa is keen to point out that the low level of development within the ASM sector means it cannot be expected to conform to the same standards as established mining companies.

Meanwhile ARM is a keen supporter of the UNEP Global Mercury Partnership which is committed to changing working practices in the ASM sector. “It is important that the use of mercury is not simply banned,” she comments. “If we took this step, it would just lead to the emergence of a new black market with even fewer controls than we have today. Artisanal and small scale miners do not like using mercury, but they do not have access to the knowledge and resources to support viable alternatives.

“ARM promotes mercury-free artisanal mining as the best available technology, but at the same time we acknowledge that mercury plays a central role in the current ASM approach to processing. Any move to reduce and eliminate its use must be accompanied by capacity building and technical support for the miners involved.”

With their in-depth knowledge of mining processes, safety, productivity and efficiency optimization and access to advanced green

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Photo credit: © Nigel Wright

The Alliance for Responsible Mining technologies, established mining companies could be invaluable partners in promoting new and improved working practices for their small-scale counterparts. Such initiatives could form the basis for CSR initiatives that could transform communities at very little cost, dramatically improve community relations and greatly enhance the security of state-granted concessions.

Looking to the future, Villa hopes to see the mining industry as a whole evolving towards harmonization of the assorted array of voluntary standards that have been adopted to date and are still under development. “The next step forward is a global institutionalized mechanism to ensure harmonization of all the different standards that exist. My vision for the future of this industry is a holistic one where the mining industry exists as a single industry and all actors and stakeholders have an equitable say in its development.

“For formalization to make sense there must be a business case. The potential benefits must make sense to the industry, to governments and of course to the miners themselves. Without the involvement of all these different actors and stakeholders, it will be very difficult to create an environment for this sector to improve,” she concludes.

For more information about The Alliance for Responsible Mining visit: www.communitymining.org www.facebook.com/communitymining Twitter: @communitymining

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Gold Fields Ghana is not only committed to ethical and sustainable mining but is also spearheading a national conservation programme as part of its vision to become a global leader in sustainable gold mining written by: Gay Sutton research by: Jeff Abbott

92 | Mining & minerals

Gold Fields Ghana

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Damang, Ghana

Gold Fields Ghana

G

hana, once colourfully known as the Gold Coast, has a long and distinguished history of gold mining stretching back thousands of years to a period when the precious metal reached Europe via the perilous trade routes of the Sahara desert. Today, gold mining continues to play a critical role in the national economy, not only benefitting the population through the lucrative taxes levied on mining companies, but also by the efforts of those companies to share the benefits of their presence with local communities.

The largest producer of gold in Ghana today is Gold Fields Ghana, part of the South African gold mining corporation Gold Fields, which has a strong ethos of ethical mining and sustainable development that is embedded at the heart of its global business.

Even before considering its extensive CSR programme, the company contributes an enormous amount to the Ghanaian economy in taxation and jobs.

“We were the highest tax payer in Ghana in 2010,” explains VP of Sustainable Development for West Africa, Gwendolyn Wellmann. “In the first quarter of this year alone we paid a total of US$65,837,176 million in taxes to the government, including corporate income tax, royalties, the national fiscal stabilisation levy, PAYE and so on.”

And from the employment perspective, the company currently provides over 7,400 jobs for permanent and contract workers, 5,400 of them at the Tarkwa Mine and a further 2,000 at the Damang Mine, officially known as Abosso Goldfields Ltd, both of which lie

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Gold Fields Ghana

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Nowhere is this more evident than in the West African region, where Sandvik Mining Ghana offers customers access to quality equipment, reliable service and optimum technical support through its ever-expanding network.

Sandvik, which celebrates its 150th anniversary of global operation in 2012, originally established a presence in Ghana nearly 15 years ago, starting out with about 26 staff members and operating from Accra, Obuasi and Tarkwa.

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and offices in Ghana, Mali and Nigeria. As part of a global player, Sandvik Mining Ghana is able to draw on a worldwide network of experienced skilled personnel to ensure that appropriate, cost-efficient solutions are provided to its customers.

The core of Sandvik’s business model is to offer products, services and support that improve customer productivity and profitability. This high-technology engineering and services group also takes a global perspective and has an advanced holistic approach encompassing financial, environmental and social responsibility.

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Local wildlife at Tarkwa mine

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in the gold-rich Tarkwa basin approximately 300 kilometres west of the capital Accra.

It is through its CSR programme, however, that the company is striving to make a real difference and to improve conditions for the local communities in such a way that they will continue to flourish and grow long after the current gold mines have closed. Since coming to Ghana in 1993, Gold Fields has engaged in a diverse range of projects encompassing education, health, agriculture and micro-enterprise, through to providing safe drinking water, infrastructure and roads.

These activities are managed by the Gold Fields Ghana Foundation, established in 2004 and funded through a share in the company’s profitability and performance.

For every ounce of gold mined at Tarkwa and Damang, $1 is deposited into the Foundation, along with 0.5 per cent of pre-tax profits. Last year this came to a grand total of over $3 million. The money is then carefully targeted at initiatives to benefit the 16 communities around the mines through the SEED (Sustainable Community Empowerment and Economic Development) Programme. Launched seven years ago, SEED works on the principle that the Foundation is merely the custodian of community money, and provides a structure and process by which the community can identify and communicate the help it needs.

Over the past seven years, for example, the community has suggested a variety of new businesses its members would like to engage in, ranging from crop farming and animal husbandry through to tie and dye and soap

Gold Fields Ghana

Oil palm processing

and pomade making. “In the first round of SEED we included all the suggested projects,” Wellmann explains. This involved providing training and coaching, materials such as oil palm seedlings and small ruminants for the farmers, and then monitoring the progress of the businesses on a regular basis.

Much has been learned from the experiences so far, and the Foundation’s approach is continuously being honed and adapted.

Two years ago, for example, the monitoring programme revealed that some new farms were being neglected. But by introducing an incentive scheme to ensure good farmers

receive a good price for their produce, the situation has been turned around. Now, less than 10 per cent of farms fail to prosper.

“Like all mining companies and NGOs working in this field, though, we did make mistakes,” Wellmann admits. “We soon learned that if we trained 32 people in 16 communities to make soap there would soon be so much soap for sale nobody would buy it. So it was a real learning curve.” The company is about to implement the second round of the SEED scheme in 2013 and is making sure to implement the lessons it has learned from the first seven years.

“By raising the educational standards of the community members and workforce we can promote the development of Ghana” Mining & minerals | 99

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Gold Fields Ghana Through SEED, the MDM Engineering Foundation is also investing MDM Engineering is a minerals process and project heavily in health and management company that sets itself apart from the rest. education and its efforts are Our technical team, with over 24 years’ experience, has the evolving with time. Initially, ability to design and build cost-effective, functional and many new clinics and schools efficient plants, across a range of minerals. were constructed within MDM undertakes mineral resource projects of varying sizes and concentrates. We specialise in process design and execution of the 16 communities, and projects in gold, uranium, base metals, ferro metals, platinum the company worked with group metals, industrial minerals, coal and diamonds. the government to ensure We offer a range of services from project evaluation, full process they can be sustainably design and feasibility studies through to full EPCM, incorporating staffed and run in the the construction of plants and project management. future. More recently the www.mdm-engineering.com Foundation has progressed to funding teacher and health worker training. One such scheme is the wellbeing programme, which provides community health facilitators for each of the 16 communities. The facilitators are initially selected by community members themselves and are then sent for Ministry of Health training which is funded by the Foundation. On completion, the facilitators return to their communities and provide general help and advice on hygiene, health and wellbeing.

The Foundation also focuses on funding local children and young people through school and university. A notable success of the scheme is a young employee from the community of Huniso who was sponsored through a higher national diploma and degree course, and is now working as an administrator in the scholarship programme. “Of course, the students don’t always come back to work for us,” Wellman says. “But that’s not the point. The principle is that by raising the Community clinic

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credit: LCA Ghana Photo Library

Shai Hills is an important site for biodiversity

educational standards of the community members and workforce we can promote the development of Ghana.”

Ideas and aspirations have also changed with time. For many years, the Foundation installed wells to provide fresh water for the local communities. “We’re now phasing those out and putting in mechanised small town water systems,” Wellmann says. The new systems pump water from a borehole

and store it at a height of three or four metres.

The water is then gravity fed directly into key points easily accessible by households.

The Foundation’s work has been a continuous effort, tackling a very wide range of small initiatives and evolving to meet new needs. However, Gold Fields has now stepped beyond the ethical and legal obligations of pure corporate social responsibility, and is taking a leading role in

“I would like to see every company engage in sustainable principles and behave responsibly towards the environment and stakeholders” 102 | Mining & minerals

Gold Fields Ghana

Shai Hills Resource Reserve

Shai Hills wildlife

what Wellmann describes as than an hour’s drive from philanthropy. The company the capital, Accra. Not only is a founder member of does it have an interesting the Ghana chapter of biodiversity that is at risk, the LCA (Leadership for it is also a cultural heritage Current number of jobs Conservation in Africa), a site and sacred to the Shai provided by Gold Fields in pan-African organisation people. The vision is to Ghana that aims to put 20 million bring together conservation hectares of African land organisations and businesses under conservation by 2020. to rehabilitate the reserve, and conserve it “This is a steep task,” Wellmann in a sustainable fashion. The lessons learned comments, “and we have been investing from this project will then be applied to heavily in getting the LCA Ghana chapter two larger projects in the future: the Mole funded and running. We have identified National Park and Cape Three Points Park. three projects so far and we’ve been working Much of the focus of the first year has on the first for a year now.” The initial been on creating a business plan for the park project is at the Shai Hills Resource Reserve, and bringing together a steering committee a small and neglected national park less to run the park drawn from the government,

7,400

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credit: LCA Ghana Photo Library

View of Shai Hills

104 | Mining & minerals

Gold Fields Ghana park managers, local communities, and investing businesses. Gold Fields is the only cash sponsor so far, and the next step is to attract further funding and begin conservation work. Three luxury safaristyle tents are shortly to be erected on site, to provide short breaks for possible sponsors to demonstrate the value of the project and the attractions of the area. The ultimate plan is to attract tourists and harness the income to fund ongoing conservation efforts.

None of this will work, however, if the local communities are not involved. “So we’ve been communicating with the communities surrounding the park, assisted by Golder Associates, very much as we do with those around our mines, to show them that this is a heritage site that needs protecting for their grandchildren. If we can get buy-in from the communities,” Wellmann says, “they will help protect the park.”

For Wellmann, engaging in projects such as this is not required by law, but it is something the company and its staff feel very strongly that they want to do. “We do it,” she says, “because it is the right thing to do. And I would like to see every company engage in sustainable principles and behave responsibly towards the environment and stakeholders so that the practices become second nature.”

For a good example of this, you need look no further than Gold Fields Ghana.

For more information about Gold Fields Ghana visit: www.goldfields.co.za

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Harmony Gold Mining Company Limited

Harmony

IN ethics Harmony Gold Mining Company Limited has built a reputation for itself as a leading producer of gold in South Africa and Papua New Guinea. With a commitment to both stakeholder value and corporate responsibility, the company is setting the gold standard for ethical mining in these regions written by: Jane McCallion research by: Max Wilde

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Rock drill operator, Joel Mine

Harmony Gold Mining Company Limited

H

armony Gold Mining Company Limited (Harmony) is one of the world’s largest gold mining companies, with operations in South Africa and in Papua New Guinea. In South Africa, the company has 10 underground and one open-pit mine and several other surface operations, located in Free State, North West and Mpumalanga provinces. Its portfolio in Papua New Guinea (PNG) is primarily prospective; however, in terms of active assets, it has a 50 per cent interest in the Morobe Mining joint ventures, which includes Hidden Valley, an open-pit gold and silver mine, which opened in September 2010, and the Wafi-Golpu project.

Harmony is a publicly listed company, its primary listing being on the Johannesburg Stock Exchange (HAR). The company’s ordinary shares are also listed as international depository receipts (IDRs) in Berlin (HAM1) and Brussels (HMY), and are quoted in the form of American depository receipts on the New York Stock Exchanges (HMY).

On average, the company has produced 1.36 million ounces of gold over the past two financial years across its mines in South Africa and Papua New Guinea. Its reserves also make for impressive reading: on 30 June 2011, Harmony reported ore reserves of 41.6 million ounces and mineral resources of 163.9 million ounces. It has also carried out major capital expenditure in recent years to both extend the life of its mines and also access its extensive resources. Thanks to this investment, Harmony’s Hidden Valley mine

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in Papua New Guinea is now an operating mine; additionally, its Kusasalethu, Doornkop and Phakisa projects in South Africa have entered the build-up stage and Tshepong and Masimong have become steady contributors to production.

Investment has also been made into exploration, returning significant results.

Harmony’s Wafi-Golpu resource has shown a 57 per cent increase, bringing it up to over one billion tonnes during the year.

“The grade of the Golpu project is over one per cent copper, confirming it as one of the highest-grade copper-gold porphyry systems in south-east Asia,” comments Harmony’s CEO Graham Briggs. “These results have confirmed our long-held belief that Papua New Guinea is a game-changing region for the company.”

On a 100 per cent basis, Golpu alone now hosts a resource of 869 million tonnes, containing 19.3 million ounces of gold and 9.0 million tonnes of copper. This is a significant year-on-year increase of 368 million tonnes (73 per cent), comprising 8.9 million tonnes of copper (88 per cent increase) and 10.5 million ounces of gold (119 per cent increase). These results mean that Harmony’s resource base in Papua New Guinea now represents 10 per cent of

the company’s total resources, which is in line with Harmony’s strategy to increase its geographic diversification.

Harmony is also a major employer: in 2011, it employed 39,400 people across Papua New Guinea and South Africa, the majority of whom were full-time employees (34,472), as well as some contractors (4,968).

“Given the shortage of sector-specific skills in both regions, the mining industry

“These results have confirmed our long-held belief that Papua New Guinea is a game-changing region for the company” 110 | Mining & minerals

Harmony Gold Mining Company Limited

Aerial view of the Hidden Valley Hamata mill in Papua New Guinea

is a material source of funding for skills development,” comments Briggs. In South Africa, as an example, the company has recruited 120 young people from local communities and trained them in miningrelated skills: most have subsequently been absorbed into the workforce. Twenty-four tertiary students have been accommodated for experiential training; 20 students selected for the Harmony Bridging School; and 538 employees have received portable skills training. Over 1,200 employees and community members have attended Adult Basic Education and Training (ABET) at a cost of R46 million—Harmony’s literacy rate is now up from 25 per cent in FY09 to 72 per cent in FY11. Over 23,000 employees have received some form of training at a cost of

R220 million; 94 per cent of those trained were Historically Disadvantaged South Africans (HDSA) and 12 per cent women.

In Papu a Ne w Gu i nea , 10 employees have attended ABET classes, with training and mentoring benefiting 30 locally recruited employees. Meanwhile, nearly 50 students from a local university have been engaged to monitor aspects of geology and environmental management.

As well as being a major gold producer and employer, one of the things that defines Harmony as a company is its commitment to responsible mining. A key area within this philosophy is the company’s environmental strategy. “We engage in extensive rehabilitation of land to a sustainable alternative use,” explains Briggs. “Where

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Loco drivers, Joel Mine, Free State

112 | Mining & minerals

operations have been decommissioned, we develop comprehensive closure plans outlining the details of this rehabilitation.”

Another important part of the company’s corporate social responsibility (CSR) provisions in South Africa is recognising the need for socio-economic development, both in the country and in the labour sending communities. “We focus on four key areas— education; socio-economic development; sports, arts and culture; and support for Broad-Based Black Economic Empowerment (BBBEE)—in our communities,” says Briggs.

“However, our corporate social responsibility extends to broader community development and national programmes such as mathematics and science development.” Additionally, Harmony is engaged with HIV and AIDS research, education and vaccine development.

The organisation also works with local non-government organisations (NGOs) and community organisations on an ongoing basis as part of its CSR strategy. As well as working with such entities in Papua New Guinea and South Africa, Harmony also works with organisations and governments in Lesotho, Swaziland and Mozambique, where a significant proportion of its labour force originates. In FY11, Harmony spent some R14 million on CSR projects, with key projects including the South African Agency for Science and Technology; the Minerals Education Trust Fund; the South African Mathematics Foundation; Students in Free Enterprise (SIFE); and AuTEK Biomed.

In FY11 Harmony spent R69.7 million on local environmental development projects, including the Harmony Jewellery School;

Harmony Gold Mining Company Limited

Joel Mine, Free State, South Africa

a R3 million brick-making project in Masilonyana municipality in conjunction with two other mining companies; the building of the Nyakosoba-Harmony high school in the rural part of Maseru district, Lesotho; the Mozambique Agricultural Farm Training Centre and Abattoir Project; and the transformation of an old beer hall in Khutsong community into a community centre focused on small income-generating businesses.

Harmony has also, in partnership with the government, the Department of Human Settlement and the local Matjabeng

Municipality, turned the outdated Masimong Mine Hostel into 460 modern housing units. Harmony supplied the land, infrastructure, project management and financing, increasing the value to R350 million. A total of 12 HDSA companies completed the construction and more than 3,000 jobs were created during the building phase.

Harmony also works very closely with the South African Chamber of Mines and is increasingly participating in and influencing government policy. In 2011, Harmony, directly and through the

“Where operations have been decommissioned, we develop comprehensive closure plans outlining the details of this rehabilitation�

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Headgear of Target 1 in the Free State, South Africa

“Our project in Papua New Guinea in particular has proven the benefits mining can deliver in an enabling environment when all stakeholders work together” Chamber of Mines, actively participated in reviews of key mining legislation including the Housing and Living Conditions Standard, Codes of Good Practice for the Minerals Industry, revisions to the Mining Charter and amendments to the Labour Relations Act. The company lobbies on environmental legislative reform such as the inclusion of mining environmental management in the Department of Water and Environmental

114 | Mining & minerals

Affairs, changes to financial provision guidelines and the carbon tax proposed by the government. Harmony has also participated in the Wonderfontein Spruit Catchment Forum in South Africa through the Mining Industries Group, and has been involved in finalising the remedial action plan report—an initiative between government, industry and civil society focusing on the remediation of the Wonderfontein Spruit river.

Harmony Gold Mining Company Limited

Current five layer extruder

Additionally, Harmony’s wage negotiations are conducted in a centralised industry forum under the Chamber of Mines. Following the end of the 2011 financial year, a two-year wage agreement was signed, which included profit sharing.

Over the next five years, Harmony will remain focused on producing safe, profitable ounces, which will continue to drive growth and generate dividends. It has taken several important steps to ensure this, including closing high-cost mines to produce a better mix of assets, increasing exploration, delivering value on social initiatives and developing and commissioning gold mines in South Africa and Papua New Guinea.

The benefits of this strategy are now emerging with the company building a solid portfolio of producing assets and a successful

Headgear of Doornkop in Gauteng, South Africa

international exploration programme. “Today, Harmony is acknowledged as one of the more innovative and cost-effective explorers and our Wafi-Golpu project has the potential to change the company materially. Our project in Papua New Guinea in particular has proven the benefits mining can deliver in an enabling environment when all stakeholders work together,� states Briggs. By building lower-cost mines, the company is rewarding its shareholders and building a base of world-class assets that will secure its future as a steady and sustainable producer of quality copper and gold.

For more information about Harmony Gold Mining visit: www.harmony.co.za

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Newmont Ghana Gold

A helping

hand

Mining operations usually provide much needed employment in developing countries but these jobs have a finite life, so a longer point of view is what’s really called for written by: Alan Swaby research by: Richard Halfhide

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Newmont Ghana Gold

T

here’s nothing new in the bigger mining companies, operating in third world or developing countries, having social responsibility policies. But the question is not what to do while the mine is in operation but rather how to put in place a sustainable structure that can still function even after the life of the mine is over.

Western companies are often willing and want to spread largess among local businesses but are just as often discouraged by a completely different mindset amongst the host population. Finding the right degree of commercial sophistication, being comfortable that contractors can work within the mine’s health, safety and environmental regime, and of course basics such as punctuality and reliability are all conditions that need to be met.

But George Brakoh, manager of Local Supplier & Contractor Development for Newmont Ghana Gold, feels passionately that it is important that big companies such as his do take the initiative and do put in whatever effort it takes to make the adjustment.

“There are countless requirements,” he says, “that need to be performed around a mine on a daily or weekly basis to keep things running smoothly. They usually involve low levels of skill and compared with the main task of extracting and processing ore, are obviously of less importance and priority. From a purchasing point of view, it would clearly be easier for all this work to be bundled together and outsourced to a single international service provider, passing over

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the problems of training and supervision to someone else. But the fact is that those small services around a plant can make a huge difference to the community, not only in terms of income and additional employment opportunities but also in encouragement and development.”

The Newmont Mining Corporation is not only one of the world’s oldest gold producers, it is also one of the largest. It has significant assets or operations in North and South America, Australasia and the Far East, employing 43,000 staff and contractors worldwide. In fact Newmont cites its cooperative and fair-handed dealings with local communities as one of the reasons why it has continued to operate so successfully for nigh-on 90 years.

In 2007, Newmont became the first gold company selected to be part of the Dow Jones Sustainability World Index.

As such, its operations—wherever they can—place great emphasis on developing local businesses. “It’s not just a question of handing out work,” says Brakoh. “Our aim is that we help create something that will continue in a sustainable fashion long after the life of the mine is over.”

In Ghana, Newmont’s most advanced interest is at Ahafo, some 300 kilometres

north-west of the capital Accra. It took $800 million to put into production which started in 2006. From the outset, developing Ahafo created challenges as the ore body was located beneath an area inhabited by about 1,700 households. Negotiations needed to be handled sensitively and considerable collaboration went into helping and encouraging the affected community to resettle successfully. As well as financial

“We are anxious to help the next wave of employers get started—always with an eye to the time when the mine will have run its natural course” 120 | Mining & minerals

Newmont Ghana Gold

Ahafo local business constructing drainage system at resettlement site

compensation, residents It has to be acknowledged were provided with new that, at this stage, most of these purchases fall into homes, schools and titles to the non-critical or nonland they previously were technical categories. Not not allowed to own. was Year Newmont “The mine has created that this will always be the selected for the Dow many job opportunities,” case. Newmont, working Jones Sustainability in collaboration with the says Brakoh. “As well as the World Index Ghana Chamber of Mines, 1,800 employed directly by has identified 28 product Newmont, there are another categories which it feels 3,000 contractors on site.

But we are also anxious to help the next can be sourced locally. It is currently wave of employers get started—always with undergoing an in-depth study using an eye to the time when the mine will have specialist consultants on which Ghanaian run its natural course.” manufacturing concerns can be lifted At the heart of Brakoh’s work is the Ahafo to a suitable level for the supply of these Linkage Programme—a three-year project to components. “It’s quite likely,” says Brakoh, increase procurement from local suppliers. “that we will encourage joint ventures

2007

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“It is very rewarding for me to see how individuals can respond and rise to the challenge when they are given the guidance they need” between existing members of our supply chains and suitable local companies.”

In the meantime, the focus is on developing small-scale businesses to the point when they can be accepted as Newmont suppliers.

A database of local businesses wanting to supply to Newmont has been prepared and of these, 47 enterprises have been tutored over the three-year period. “We provide

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them with a working model of what we want from our suppliers,” says Brakoh. “This starts with good communications so that we can maintain rapid contact at all times. Then we need the commercial fundaments—an understanding of how to tender for work, accurate bookkeeping, prompt invoicing— all the sorts of things you would expect in a traditional Western business world.”

Newmont Ghana Gold

Ahafo local contractor building resettlement housing

Not surprisingly, many local residents haven’t had the benefit of an ongoing, formal education but Brakoh has learnt that this is no barrier to success. “One of our quickest growing suppliers,” he says, “started with a single chainsaw cutting down trees. He now employs crews for both construction and tree cutting, he has gone into the car hire business and with the help of a South African mentoring company, has a fledgling general engineering business.”

Local farmers and guest house owners also have been drawn into the pool of suppliers, but never in any charitable way. In each case it is because they have responded well to the tutoring they are offered and then reach the exacting

standards Newmont applies.

“It is very rewarding for me,” says Brakoh, “to see how individuals can respond and rise to the challenge when they are given the guidance they need.

We have had disappointments but most of them take it very seriously and you can see the difference as their confidence grows.

These entrepreneurs learn that Newmont is not handing out favours and that they have earned Newmont’s trust by doing outstanding work.”

For more information about Newmont Ghana Gold visit: www.newmont.com

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124 | Mining & minerals

Barrick South America

Mining

responsibly Barrick Gold holds some of the world’s most exciting gold projects in its South American portfolio, and is determined to lead the mining industry in responsible mining written by: Julia Smith research by: Daniel Finn

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The Andes has some of the richest mineral deposits in the world

Barrick South America

T

he great spine of the Andes arcs for approximately 7,000 kilometers above the Pacific coast of South America. It is the longest continental mountain range on the planet—a glittering world of rock and ice for much of its length. But there is something else that glitters in these remote and inaccessible mountains. Ancient collisions between tectonic plates have endowed the Andes with some of the richest mineral deposits in the world in a treasure chest that includes gold, silver, copper, lead, zinc, platinum and emeralds.

It is gold, though, that exerts the most inexorable pull on mankind. The extravagant use of gold in pre-Columbian social and ritual life has given rise to some of the most enduring myths and legends.

El Dorado was never found, but the mining industry in the region is one of the most important in the world and at its leading edge is Barrick South America.

Since the acquisition of Placer Dome in 2006, Barrick Gold Corporation has been the largest pure gold mining company in the world, with headquarters in Toronto, Canada. At the end of 2010 the company had operations across all five continents with 19 wholly-owned mines, six joint venture mines, six advanced exploration and development projects, along with a number of closure and legacy properties and exploration sites.

Barrick’s South American holdings include the Pierina and Lagunas Norte gold mines in Peru; the Veladero gold mine in Argentina; the Cerro Casale project in

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Renowned for our ability to manufacture quality products, our approach to our customers is based on maintaining mutually beneficial relationships through the shared objectives of quality, specialized service and competitiveness.

We are the leading specialist in high standard flux assay, cupels and crucibles, avoiding any contamination with precious metals, so that our customers can maintain precision and accuracy in their analysis.

We also represent companies such as Jacobi & Pica, activated charcoal producers of high quality and recognized worldwide for mining companies.

Telephone: +511 550-1774 Email: ventas@cvinternational.com.pe www.cvinternational.com.pe

Barrick South America Chile; and the world class C & V INTERNATIONAL S.R.L Pascua-Lama project on the Renowned for our ability to manufacture quality Chile and Argentina border products, our approach to our customers is based on which is almost at the point maintaining mutually beneficial relationships through of production. the shared objectives of quality, specialized service and Pascua-Lama is set to competitiveness.

We are the leading specialist in high standard flux assay, become one of the most cupels and crucibles, avoiding any contamination with important mines in Barrick’s precious metals, so that our customers can maintain global portfolio. As measured precision and accuracy in their analysis. at the end of 2010, it held www.cvinternational.com.pe proven and probable reserves of 17.8 million ounces of gold, with a further 671 million ounces of silver contained within the gold reserves. A detailed review of the underlying assumptions and trends for Pascua-Lama was completed in the second quarter of 2011. This led to Barrick increasing its projected expenditure to maintain the schedule for bringing the project into full production by mid-2013. The total pre-production capital required is now estimated at $4.7-$5.0 billion.

The project is at an elevation of 5,000 meters on the edge of Chile’s Huasco province and San Juan province in Argentina, and has been in pre-development for over a decade. It is unique for both the technical challenges involved in working at this level of altitude and also because

17.8 million Ounces of gold reserves at the end of 2010 Access roads to Pascua-Lama

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PUNTA COLORAD BUILDING ACCESS ROAD TO

A CAREER, A PRESENT, FUTURE The continued growth of mining in Chile requires new infrastructure, roads, dams, mass movements of soil, plants and other power generators. This is where CONPAX stands with effective leadership in the construction market, innovating working methods, management and search of new markets, bringing it’s experience in the construction of roads, power plants, wind farms, water treatment facilities and mining works. Meeting the needs of our customers is our primary goal.

WWW.CONPAX.CL

ADA CONSORTIUM O PASCUA-LAMA GOLD MINE

Over 45 years experience, 275 works executed in various specialties, which include 2300 km of roads, bridges and structures, more than 6 million cubic meters of earthwork and an investment of over $ 600 million, support the Valko Construction trajectory. Consolidated as one of the largest companies in the sector, able to successfully address construction of all types, ensuring high efficiency and guaranteeing its customers the best results based on their requirements.

This, together with a multidisciplinary team, has made the Ministry of Public Works as well as large mining companies and services, trusted Valko Construction to develop major projects, linking them to all sectors of Chile in this great way to build.

WWW.VALKO.CL

Barrick South America

“The ultimate goal is to be a catalyst for community development” it is a bi-national project falling under the national remit of the governments of both Argentina and Chile.

Best practice South America has a special importance for Barrick Gold. In 2010, Barrick’s operations in South America produced 2.1 million ounces of gold at total cash costs of $243 per ounce – ranking the company as the lowest cost producer in the region. However, Barrick would prefer to be judged not on the size of its portfolio, but on its commitment to operate to the highest international and ethical standards.

Mine construction

Barrick has determined to take a lead in environmental best practice and to make the most positive contribution possible to the welfare and development of the communities and countries in which it operates. Its approach was formulated five years ago when the company first published Hidrostal SA comprehensive community Hidrostal SA, founded in 1954, is dedicated to the engagement and sustainable manufacture of centrifugal pumps for the mining industry, development guidelines as well as construction, energy, water and environmental for implementation across facilities and general industry.

We have 600,000 square feet of land with 380,000 square all its operations. feet of manufacturing space containing a foundry and In 2005, Barrick was an steel works, and a machine shop with 40 CNC machines. early signatory to the UN We have 400 well-trained staff using state of the art Global Compact (UNGC) in technology, and a test pit with capacity up to 36” discharge. an initiative which directly We support our customers with pre- and aftersales service. involves the business www.hidrostal.com.pe community in tackling

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Barrick South America

Open pit mining

some of the most pressing social and Management Code, Transparency environmental challenges of our time. International (Canada) and the Voluntary The principles of the Global Compact Principles on Security and Human Rights. are based on internationally recognized The nearest communities to Pascua-Lama norms and conventions in four critical are 150 kilometers away but the development areas: human rights, labor standards, the work has stressed extensive consultation environment and anti-corruption. to mitigate the project’s environmental The company is also impact and to ensure that it a signatory to a number delivers optimum value to of voluntary codes and the economic development initiatives that address a of the region. range of economic, social More than 5,500 direct and environmental issues. new jobs will be created These include the Carbon during the three-year Direct new jobs to be Disclosure Project, the construction phase. Once created by Pascua-Lama International Cyanide in production, the mine will

5,500

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Barrick South America employ approximately 1,600 Sandvik workers over its 23-year life.

Sandvik Mining and Construction is a business area It is also estimated that there within the Sandvik Group and a leading global supplier of will be at least 2.5 indirect equipment, cemented-carbide tools, service and technical jobs created for each solutions for the excavation and sizing of rock and minerals permanent job during in the mining and construction industries. construction and operation.

We also offer solutions for many applications in the construction industry, including surface rock excavation, Many opportunities tunneling, demolition, recycling and road rehabilitation. have been created for local Our range of products includes rock tools, drilling rigs, suppliers who have supplied loaders and trucks, crushing and screening machinery a host of items including and bulk-materials handling systems. cement, drilling and Every product is preceded by extensive R&D and backed with equipment rental services, application expertise and a worldwide service network offering ground support services, on-site service, training and round-the-clock support. www.mc.sandvik.com pumps and components, steel and safety items. Local procurement is a priority when it can be achieved in accordance with strict quality and safety guidelines.

Pascua-Lama will maximize local employment by putting training programs in place to ensure that local people and businesses benefit economically. Barrick’s ultimate goal is to be a catalyst for community development, as well as building the safest and most environmentally sensitive project possible.

However, the nature of the work has also created opportunities for some of the world’s leading suppliers of heavy plant and machinery. Sandvik, Cinter, Minera Zlato, Metso, John Deere and AK Drilling have all been involved in Pascua-Lama and their contribution has been critical in advancing the project so rapidly. Finning International is another globally recognized name in the mining industry which has had Barrick Gold’s Veladero mine a particularly strong involvement in the in San Juan province, Argentina

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Offers complete electrical solutions to mining projects like electrical rooms, unit substations, and turn key projects.

Av. Mcal. Oscar R. Benavides 1215 - Lima 1 Central Phone: (511) 619 6200 Email: postmast@manelsa.com.pe www.manelsa.com.pe

Barrick South America

$243 PER OUNCE Average cash cost of gold production project. The Caterpillar brand has achieved an iconic status, representing the best and most complete line of heavy equipment in the world specifically designed for mining operations. Finning is the leading global Caterpillar equipment dealer and has been selling, renting and servicing Caterpillar equipment since 1933.

Along with a range of influential state and NGO partners, Barrick is a member of the Atacama Commitment, a powerful alliance Barrick supports local communities designed to improve many facets of life for the people Manufacturas Electricas SA of the region. The focus of Manufacturas Electricas SA is a company with 39 years the Atacama Commitment of experience in the design, manufacture and distribution is on improving economic of low and medium voltage equipment. We provide integral solutions such as electrical rooms, medium voltage and social conditions switchgears, power transformers, motors, motor control surrounding the Pascuacenters, control systems with variable frequency drives, Lama and Cerro Casale soft starters, automation, SCADA systems, etc. projects by addressing We also offer a portfolio of more than 10,000 standard their root causes: lack of electrical products from top brands worldwide, used in a educational resources, wide range of applications emphasizing quality, availability poverty, and poor housing and aftersales support. conditions.

Our leadership in quality has developed through continuous improvement in processes and procedures, resulting in our It includes a housing being the first in the industry with ISO 9001 certification. project, which will re-house Customer support is very important to us and we have a 3,000 people from slum professional team focused on design, quality control and dwellings, a financial services to advise you from the sizing of your projects, contribution towards the through implementation and successful start-up. construction of a muchwww.manelsa.com.pe needed rehabilitation center

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Barrick South America for children with disabilities Phelps Dodge International Corp. (PDIC) and an educational drive A General Cable Corporation, PDIC manufactures highly to extend the teaching engineered products including mining cables, HV cables up of technology in local to 230 KV, submarine cables, power cables for solar and classrooms with Class 21. wind farms, bare aluminum cables, communications and The Class 21 program, power cables for mass transportation applications with UL in partnership with the and IEC certifications.

Mining is an important segment of business for PDIC, Cisneros Foundation, will supplying products and services for new projects and upgrade teaching skills and providing aftermarket services following operational support student learning requirements from our customers. through the use of computers All of our manufacturing plants are equipped with the and technology. Thirteen latest technology for wire and cable production, and have schools will participate over developed quality systems, environmental practices and five years, benefitting 2,500 safety procedures with certifications under international standards ISO 9001, ISO 14001 and OHSAS 18001. students and their teachers. www.pdic.com The project will install 600 computers in schools that have had little or no access to technology in the past.

As Barrick’s other Chilean project, Cerro Casale, moves forward, the Atacama Commitment has been expanded to these communities also. In May 2011, Barrick signed a $1.7 million agreement with local government in Tierra Amarilla, near Cerro Casale, to assist with upgrading education, the environment and social infrastructure.

Cerro Casale is an exploratory joint

“One of the most significant effects of the mine is that is has diversified the economy”

Barrick is a member of the Atacama Commitment

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Modular solutions to suit you where you need it

Sabinco provides different camps for Barrick Projects in Central and South America PUEBLO VIEJO, DOMINICAN REPUBLIC

CERRO CASALE, COPIAPĂ“, CHILE

BARRIALES, PASCUA LAMA, HUASCO, CHILE

From on site Dormitories to Office Buildings and Recreation Rooms, Sabinco have the ability to adapt solutions to suit your needs.

T: (56-2) 624 84 25 | E: sabinco@sabinco.cl | www.sabinco.cl

inspired Your weekly digest of business news and views

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Barrick South America venture between Barrick a nd K inross G old After 25 years innovating in modular building systems, Corporation. Early in Sabinco SA continues to develop multiple solutions and 2010, Barrick acquired building systems, both in Chile and abroad. We have three an additional 25 percent production plants in Chile and one in Peru with the highest interest in the project technology available in the world. from Kinross, increasing We were the first and will continue be so in modular building systems—that is our commitment. the company’s interest to Thanks to all our customers for the confidence and the 75 percent. great teamwork that has allowed us to tackle projects that Although the project is incorporate innovative solutions, excellence in quality, still at an early development reduced costs and fast construction times, always in phase, Barrick has already compliance with all rules and safety standards, quality and begun a community environmental care. outreach program to inform www.sabinco.cl local residents about the work and encourage their interest and participation. In late 2009 and early 2010, company representatives met with government and community leaders, as well as residents of surrounding towns, to provide an overview of the project and the opportunities it will create, and information about the environmental and social studies that have been completed.

The extent to which the mining industry has been able to contribute to economic and social development in South America relies on a complex interplay of factors. However, Chile is generally highlighted as an excellent Dusk at Zaldívar example of the contribution the industry

Sabinco SA

“We believe in promoting excellence internally with employees and externally with neighboring communities” Mining & minerals | 145

Barrick South America can make to national TDM development efforts.

TDM is a company engaged principally in the manufacture, A recent study by the sale and installation of engineering products used in works International Council for of river defenses, conservation and improvement of soil Mining and Metals (ICMM) erosion control, slope stability, waterproofing, drainage and showed that the mining sub drainage ​​ pipes and floors between various applications for the construction of infrastructure, in such areas as industry has contributed mining, energy, transportation, agriculture and others. to marked improvements www.grupotdm.com in Chile’s genera l macroeconomic health since the late 1980s. These have translated into improvements in living conditions and poverty reduction and the proportion of Chileans living below the poverty line decreased by 50 percent during the period 1990 to 2000. Notably, these gains were most apparent in mining-related regions of the country and Barrick is determined that this trend should continue.

Renewable energy The town of La Higuera in Northern Chile is the location a $70 million wind farm project. It is a landmark achievement, representing the first project of its kind ever to be undertaken by a mining company in Chile and is intended to complement Barrick’s broader climate change strategy.

Panoramic view of Lagunas Norte The wind farm consists of 10 wind turbines that generate RHONA RHONA is a company with vast experience in mining 20 megawatts of power, equipment, offering a large portfolio of manufactured and enough to supply the energy imported products, resulting in a strategic partner in energy needs of 10,000 families and projects. RHONA has provided to Barrick´s Project Pascua has the capacity to expand Lama, more than 300,000 kVA on transformers and drives to 18 turbines which would divided into a wide variety of power equipment, taking part generate 36 megawatts. in the distribution network of this important mining project.

The power that is generated www.rhona.cl feeds directly into Chile’s

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Barrick South America Central Interconnected FSC Systems power grid.

FSC meets the highest international quality standards “Barrick has made in the construction of metallic mining buildings, for the important changes and technical qualification of its professionals and the use of improvements in South the most modern industrial equipment in the world. Our America in recent years, specialty - visible in finished works and works in process creating an energy efficiency is the design, provision and assembly in inhospitable areas, regardless of the tons of structure involved. c u lt u re, developi ng www.ferma.com.ar renewable energy projects and defining our carbon footprint,” said Fernando Rodriguez, Barrick’s environment director for the South America region.

“The inauguration of this wind farm is a milestone for Barrick, reflecting our belief that renewable energy and energy conservation benefit both the environment and our company,” added Igor Gonzales, president of Barrick South America. “We will continue to explore innovative technologies to make our company more energy efficient and to reduce our carbon footprint.”

The wind farm in Chile learned much from an earlier successful project in Argentina. In 2007, Barrick unveiled an $8.5 million investment in a wind turbine that now provides up to 20 percent of the electricity needs for its Veladero mine.

Construction of Veladero began in The wind farm in Chile learned much from a 2003 and the mine’s positive impact has successful project in Argentina

“Barrick has made important changes and improvements in South America in recent years” Mining & minerals | 149

Chemithon is a multinational technology, engineering and manufacturing company that supplies chemical process equipment and services to the detergent, power generation and mining industries.

Pressurized Sulfur Burners for use in: • Cyanide Destruction in Gold Mines • Recovery of Silver from Manganiferous Silver Ores • SO2/Air Mixtures for Oxidation of Leach Liquors • Sulfuric Acid Production

Call: (206) 937-9954 Email: chemoffice@chemithon.com Visit: www.chemithon.com

Barrick South America been well-documented in a recent study by the Chilean The Chemithon Corporation is a privately held company consultancy firm Consultora offering chemical process technology, research and Malthus. “Veladero has development, engineering, process equipment manufacturing created a more stable and and a full range of services to customers in the mining, diversified economy in power generation, detergent, and chemical industries. Our the province of San Juan,” 57 years of experience in supplying air-SO3 gas systems for the detergent industry has ideally positioned Chemithon to the study noted. “Positive supply sulfur burning SO2 and SO3 gas generating plants for employment trends, sectoral use in the mining applications. activity and growth in local www.chemithon.com tax revenues are all clear signals of Veladero’s direct and indirect impact.”

To date the mine has created nearly 1,000 direct jobs and has supported the creation of another 5,000 indirect jobs across the province. The report estimates that Veladero alone accounts for 23 percent of the province’s economy and it has led to a 38 percent increase in regional employment. “One of the most significant effects of the mine is that is has diversified the economy,” the study stated. “It has generated new demand and contributed to stable, long-term growth.”

The Chemithon Corporation

Supporting Peru Peru ranks as the world’s fifth largest producer of gold and the largest deposits are Water quality is of the utmost importance those found in the tertiary volcanic rocks in the high copec cordillera above 3800 Chilean history has strong links with the mining industry. meters in north-central Mining is the main source of Chilean export activity, Peru. This is where Barrick generating most of the income needed for the development operates two mines - the of the country. As a fuel supply company, Copec has always Pierina mine, in the Ancash been committed to being a leading provider to the mining region, and Lagunas Norte, industry, providing it with an efficient service. located approximately 175 www.copec.cl kilometers away.

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Barrick South America At the national level, Cruz del Sur Peru has struggled to Cruz del Sur is one of the major comprehensive translate its mineral transportation and logistics services providers in Argentina. wealth into broad-based The company serves industry and trade as well as private economic development, clients throughout the country. After 50 years in existence, but Barrick is proud of its Cruz del Sur is firmly established as the leading company achievements at the Pierina in the market providing more than 5,000 clients with the best domestic coverage through its network of branches mine. An independent and interzonal services, which guarantee fast and efficient economic assessment attention to more than 2,500 towns and cities, connecting concluded that by almost the major economic regions in Argentina. any evaluation measure, www.cruzdelsur.com.ar ranging from literacy rates, levels of poverty, households with potable drinking water, or even the ownership of a color TV, life had significantly improved for residents of the surrounding districts of Independencia and Jangas since the mine opened. Poverty rates in the district of Jangas, located closest to the mine, have dropped from 80 percent in 1993 to 31 percent by 2007, which is well below the national average.

Barrick’s efforts in Peru have been formally recognized with a Socially Responsible Company Award from Peru 2021, a non-profit organization that promotes corporate social responsibility. The award is presented to companies that improve the quality of life of their employees, and that are committed to the environment, business Monitoring water quality

“Barrick’s efforts in Peru have been formally recognized with a Socially Responsible Company Award from Peru 2021” Mining & minerals | 153

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Barrick South America ethics, and developing plan vital sustainable communities The growth in large mining operations in Peru has led Plan around their operations.

Vital’s development to meet the demands of international “Barrick is extremely standard health services. Focused on emergency proud to receive this award management, occupational health services and the because responsible mining development of a unique remote site health management is a central aspect of our software, Plan Vital is the leading mine health services company thanks to its involvement with Lagunas Norte and business,” said Igor Gonzales.

Barrick Gold’s local and regional medical staff.

“We believe in promoting www.grupovital.com excellence internally with employees and externally with neighboring communities.”

Unlike Chile, Peru still faces widespread poverty and deprivation. Barrick has partnered with World Vision Canada, a Christian relief organization, to combat child malnutrition and illness. Through World Vision’s comprehensive nutrition program in Peru local households are educated about essential food groups and are provided with information about hygiene and safe medications. Families also receive training to establish home gardens to produce fruit and vegetable crops. In addition to providing nutritious food for children, surplus garden produce is sold to local markets to raise household income. This partnership is designed to provide sustainable, communitybased solutions that are vital to improving health and fostering economic development in the region.

206,200 TONS Greenhouse gas emissions saved The Pascua-Lama project zone

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TECNASIC 速 delivers services ranging from conceptual engineering through to the construction and commissioning of a project.

Tecnasic SA, Headquarters: Carlos Justiniano 1161 | Providencia - Santiago - Chile Phone 56 2 4833800 | Fax. 56 2 4833801 56 2 4833801

www.tecnasic.cl

Barrick South America Lagunas Norte in northGolder Associates central Peru has become At Golder Associates we strive to be the most respected the site of an internationally global company providing consulting, design, and acclaimed remediation construction services in earth, environment, and related project. The mine has proven areas of energy. Employee owned since our formation in gold reserves of 6.6 million 1960, our focus, unique culture and operating environment ounces and is Barrick’s offer opportunities and the freedom to excel, which attracts the leading specialists in our fields. lowest cost operation.

Golder professionals take the time to build an In one of the mining understanding of client needs and of the specific industry’s most ambitious environments in which they operate. We continue to and successful remediation expand our technical capabilities and have experienced projects, Barrick has worked steady growth with employees who operate from offices since 2005 to reclaim located throughout Africa, Asia, Australasia, Europe, North Callacuyán, an old coal mine America, and South America. www.golder.com/pe once owned by the state of Peru, which is located within the current site boundaries.

After the mine was abandoned, several damaging environmental legacy issues arose, including acid rock drainage and the mine’s coal waste dumps.

The reclamation project has focused on two major issues: firstly improving water quality in the Perejil River basin and subsequently replacing vegetation. Earlier pollution had generated significant concerns among local communities about water contamination and pollution. To demonstrate Barrick’s commitment to maintaining the purity of future water supplies, a community Mining camp at Pascua-Lama

“Barrick’s reputation rests on responsibility. Good corporate citizenship is a calling card that precedes us wherever we go” Mining & minerals | 157

water monitoring program now monitors the two watersheds surrounding the mine.

Communities elect representatives to be trained in water monitoring procedures and each representative is responsible for showing and communicating the results to their community after samples have been examined by independent certified laboratories.

To regenerate flora and fauna, Barrick has worked to reduce the effects of acid mine drainage by lining and rehabilitating two coal waste dumps as well as dismantling an old camp site, creating a wetland area to treat acidic water and collect left-over abandoned coal from the operation. The coal was removed after the environmental team inserted clay liners to minimize

“To regenerate flora and fauna, Barrick has worked to reduce the effects of acid mine drainage by lining and rehabilitating two coal waste dumps�

Lagunas Norte

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Barrick South America

ZaldĂ­var is an open-pit, heap-leach copper mine

permeability and the land then covered with topsoil to encourage the growth of new vegetation. Through a partnership with the College of Biology at the National University in Trujillo, native cacti and orchids have been successfully re-introduced and are now flowering again.

Again, Barrick was able to draw on other similar experiences at the Veladero Mine, which received an international award in 2008 from the Latin American Mining Organization (OLAMI), which recognizes excellence in sustainable development in the mining sector, for the success of that mine’s vegetation plan. Execution of the Veladero plan is helping to restore natural

areas of vegetation which were disturbed during the construction of the mine camp, the building of roads and mining activity.

Global recognition Barrick has worked to advance its sustainability drive on many different fronts and the company is delighted to be ranked as a global leader in corporate social responsibility by the Dow Jones Sustainability World Index (DJSI) for the fourth consecutive year. The DJSI World Index independently evaluates 2,500 companies using rigorous criteria in the areas of corporate, economic, environmental, and social performance to

Mining & minerals | 159

Barrick has been recognized by the Dow Jones Sustainability World Index (DJSI) for four consecutive years

Barrick South America

25 Environmental projects implemented in 2010 identify the top 10 percent of performers.

The company is particularly proud of its achievements in the environmental domain.

Last year, 15 percent of Barrick’s purchased and self-generated electricity came from renewable sources and this is set to grow year on year. In 2010, Barrick completed more than 25 projects to reduce its energy and greenhouse gas footprint - the largest number of environmental implementations in its history. Together, these programs reduced GHG emissions by 206,200 tons in 2010 and last year Barrick was named as a carbon disclosure leader in Canada for the second consecutive year, ranking among the top five companies in an annual survey conducted by the Carbon Disclosure Project.

Peter Munk, chairman and founder of Barrick Gold, gave out one of the most important signals yet on Barrick’s approach to business when he thus summarized the company’s position. “Barrick’s reputation rests on responsibility. Good corporate citizenship is a calling card that precedes us wherever we go.”

For more information about Barrick South America visit: www.barricksudamerica.com

Mining & minerals | 161

AngloGold Ashanti is taking a thought leadership role in standardising its sustainability strategy and framework across the global organisation written by: Ben Sansom research by: Luke Smith

162 | Mining & minerals

anglogold ashanti

Mining & minerals | 163

Moab Khotsong, South Africa

anglogold ashanti

W

ith 20 operating mines and exploration projects in 10 countries on four continents, Johannesburg-based AngloGold Ashanti is the world’s third largest gold producer and a truly global company.

Primarily listed on the Johannesburg Stock Exchange, it is also quoted on the London, New York and Ghana Stock Exchanges as well as the Australian Securities Exchange.

AngloGold currently employs over 61,000 people worldwide and has a measurable positive impact on the regions in which it operates. This extends far beyond simply paying wages and taxes or procuring local products and services. The wages and taxes, however, are by no means insignificant.

In 2011, AngloGold produced 4.33 million ounces of gold generating an income of $6.6 billion. Of that, $1.5 billion was returned to the staff in wages and benefits. A further $379 million was returned to the host countries in corporate tax payments. Meanwhile $1.5 billion was invested in capital expenditure and $313 million in exploration to secure an ongoing pipeline of mining opportunities for the future. Finally, $131 million was returned to the shareholders in dividends.

The mining industry as a whole, of course, has not always engaged effectively with local communities and authorities, and this failure to share the benefits with the host population has been perceived as stripping mineral assets. It’s small wonder that resource nationalism has been emerging globally as a reaction to this. Mining companies are finding their costs rising

Mining & minerals | 165

ANGLO anglogold GOLD ashanti ASHANTI

ATLAS COPCO GHANA Compressor Technique; Mining and Rock Excavation Technique; Construction Technique; and Industrial Technique.

Atlas Copco Ghana Limited was established in 1992 to serve the mining industry (both in underground and surface operations) and is currently the leading supplier of mining equipment, compressors, road construction equipment (Dynapac) as well as aftermarket services Atlas Copco is an industrial group with in the country. The company operates in world-leading positions in compressors, Accra, Obuasi and Tema with a total of 128 construction and mining equipment, power employees. tools and assembly systems. The Group Atlas Copco Ghana is committed to customer delivers sustainable solutions for increased value and always focuses on making customer productivity through innovative sustainable impact in customer operations, products and services. Founded in 1873, the through listening and understanding company is headquartered in Stockholm, customer needs, sharing knowledge Sweden and has a global reach spanning and challenges, and having a structured more than 170 countries. In 2011, Atlas Copco approach to integrating and working with had about 33,000 employees. customers.

The Group’s vision is to become and Atlas Copco’s position statement remain First in Mind—First in Choice® of “Sustainable Productivity” touches on its customers and other stakeholders. Its all aspects of its business and affirms its organisational culture is based on three core commitment to support customers with values which are interaction, commitment the most efficient and productive products and innovation. These values guide its and services. With more than 130 years people towards a consistent position in of experience, Atlas Copco continues to offering the best of products and services to innovate for sustainable productivity. customers and other stakeholders.

The Group operates through a number of info.ghana@gh.atlascopco.com divisions within four business areas: www.atlascopco.com

Mining & minerals JULY 2012| 167 |2

Equity Express Equity Express, a division of Singular Systems (Pty) Ltd, provides our clients with a unique over-the-counter (OTC) trading and back office administration platform. The web-based system provides an end to end share trading solution including an integrated call centre to deal with shareholder queries and trade instructions, and an automated share matching and cash settlement engine.

An added advantage is the ability for Equity Express clients to enforce their specific scheme rules such as who may participate in the market as a shareholder and restrictions to total shareholding.

These types of restrictions are common in BBBEE schemes and are difficult to

enforce on public exchanges. Full price discovery also ensures maximum liquidity where restrictions on share trading often limit liquidity. “Equity Express, combined with the call centre, enabled us to establish a market-place and provide our shareholders and new BEE investors with a simple, easy to use, transparent and effective way to buy and sell Phuthuma Nathi shares,” says Nolo Letele, executive chair of MultiChoice.

For more information on how Equity Express can assist in creating liquidity in your company’s shares, visit www.equityexpress.co.za or contact Etienne Nel on +27 (11) 321 5400.

Change your perspective of BEE share trading, with Equity Express.

Our sophisticated shareholder administration platform enables you to apply and manage your unique BEE shareholder rules, while our intelligent online share matching engine ensures that trades are done easily and transparently.

The best part of all is, that with Equity Express once empowered is always empowered.

Take control of your company’s future today.

For more information contact us on +27 11 321 5400 or visit www.equityexpress.co.za

A division of Singular Systems (Pty) Ltd

JULY 2012 | 1

anglogold ashanti

A UBS (underground bulk system) explosives charging unit delivers bulk explosives to the face

and access to resources is being limited. will receive appropriate support for our AngloGold has been working consistently business ventures and will have our rights to change that trend and reverse that respected in equal measure.”

In recent years the company has focused damaging perception. “As a global company, we acknowledge that we are partners in considerable energy and investment development in the various jurisdictions in on improving its relationships with the which we work—respectful of the cultures communities that surround it, delivering and the laws that we work within,” said significant financial, health, educational CEO Mark Cutifani. “We and business benefits to its have an obligation to work neighbours and employees constructively within our as well as working to reduce global jurisdictions and we its operational impact on the environment. These believe that by treating all our partners with dignity aspirations are incorporated AngloGold Ashanti and respect we will be into the overall corporate employees worldwide offered the same respect, strategy. By safely and

61,000

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project one Company internal improvement programme

AngloGold Ashanti’s TauTona operation, one of the three West Wits operations in South Africa

170 | Mining & minerals

responsibly exploring, mining and marketing its products and engaging in sustainable business development, the company not only aims to create value for shareholders but also for employees, local businesses and social partners.

These aims are formalised into an internal company-wide improvement programme called Project ONE which has gone through a pilot phase and is now operational throughout the business.

It focuses on improving performance in five key areas: safety, productivity, environmental management, production volumes, costs and financial performance; and a sixth area—community upliftment—is being added. “Our vision is to be the leading mining company,” said Cutifani. “The vision that we share as colleagues is not meant to be a statement of final intent, but a torch that should light our way as we develop a company that is always looking to do better.

It speaks to our desire to continuously improve all aspects of our business so that we are seen as positive contributors to society and exceptional managers of the assets that have been entrusted to our care and development.”

To formalise, reinforce and measure the success of Project ONE, a set of five-year

anglogold ashanti

Great Noligwa: drilling using a conventional compressed air drill

corporate targets were introduced in 2010.

These include reducing the all-injury frequency rate by 34 per cent, improving social licensing by 40 per cent, reducing reportable environmental incidents by 30 per cent, increasing productivity by 20 per cent, increasing output by 20 per cent, reducing unit costs by 20 per cent and delivering a 15 per cent return to shareholders—and all by 2015. To date in safety alone, an impressive 29 per cent reduction in all-injury frequency rate has already been achieved.

Alongside the improvement programme, AngloGold is developing a sustainability

strategy and framework based on improving relationships with the local communities, regulatory authorities and government leaders and building an atmosphere of trust.

“Our initial steps are focused on getting the basics right. This includes limiting our environmental footprint, reducing energy and input consumption, improving our connection to local communities and developing our understanding of what human rights should look like in terms of our behaviour and interactions.”

The company is restructuring the way it works with, and relates to, its local

“The vision that we share as colleagues is not meant to be a statement of final intent, but a torch that should light our way” Mining & minerals | 171

CONSTRUCTION AFRICA

FULLY INTEGRATED ENGINEERING & CONSTRUCTION SOLUTIONS Forge Group Limited, through its subsidiaries, Abesque Engineering, CTEC, Cimeco and Webb Construction, are providing fully integrated EPC and EPCM services for plant and infrastucture projects in the resouces sector across Africa and throughout Australia.

Above: AngloGold Ashanti’s Obuasi South Treatment Plant in Ghana is currently undergoing refurbishment courtesy of Webb Construction and Abesque Engineering. This proven integrated approach saves time and cost, reduces interface risk and offers greater certainty to our clients.

Call or visit the website today to find out how Forge Group can add value to your next project.

In South Africa:

E: richard.vandenbarg@webbconstruction.com.au T: + 27 82 446 0182

In Australia:

E: toby.todhunter@cimeco.com.au T: +61 8 6389 8300

In West Africa:

E: brian.ward@webbghana.com T: +233 24431 6732

www.forgegroup.com.au

Webb Construction is a wholly owned subsidiary of Forge Group Ltd, a publicly listed company on the Australian Securities Exchange.

ANGLO GOLD ashanti ASHANTI anglogold

WEBB CONSTRUCTION WEST AFRICA A truly integrated, multi-discipline construction partner can save clients time, money and add significant value to a wide range of resource projects. Webb Construction, a wholly owned subsidiary of ASX listed Forge Group Ltd, has been involved in the resources industry for over a decade, undertaking work throughout the West African region through clients including AngloGold Ashanti, London Mining, Resolute and Avocet.

The Forge Group’s fully integrated approach delivers total multi-discipline design-and-construct project solutions.

Webb provides specialist construction management, administration, technical expertise, innovation and the trade and supplier resources required to meet its client’s schedules and budgets. This is achieved through dedicated and experienced resources in the areas of civil and concrete; structural, mechanical, piping and tanks; electrical and instrumentation; and maintenance services.

Webb employs more than 500 highly trained and experienced staff. The company has also invested heavily over recent years in

building its large fleet of owned and operated construction plant and equipment. A recent addition to this fleet is a 200T Kobelco crawler crane to be deployed at London Mining’s Marampa mine site in Sierra Leone. Webb also has in-house fabrication capabilities through a steel fabrication workshop in Takoradi, Ghana.

Webb prides itself on providing competitively priced services to its clients without compromise to quality, scheduling or safety.

Other Forge subsidiaries include Abesque Engineering, Cimeco and CTEC. The Group’s services provide a complementary skill set that reduces unnecessary interfaces and delivers transparency and accountability to clients.When project owners are seeking a combined set of services to capitalise on scheduling requirements, innovative planning efficiencies, maximising local content and evaluating turnkey solutions or other efficiencies, Webb Construction works to provide a solution to meet these requirements. www. forgegroup.com.au

JULY 2012| 173 |2 Mining &AUGUST minerals

Sh@reTrust Sh@reTrust provides a multi-scheme, multi-company, fully customisable share incentive management system which confidentially records all transactions relating to financial instruments that have been awarded to employees participating in a staff incentive scheme.

Catering for both executive and broad based share plans, it simplifies functions such as share allocations, dividend payments, share sales, share transfers, share purchases, share forfeitures, tax directive applications and stakeholder communication and reporting.

Sh@re Trust is currently being used by over 25 listed companies on the

Johannesburg Stock Exchange (JSE) and can be fully integrated to existing systems. In addition to the administration system, Sh@reTrust provides a website for participants to view their portfolios and request to trade shares online.

Sh@reTrust can either be purchased or the administration of the schemes can be outsourced to the team at Singular Systems.

For more information visit www.singular.co.za or contact Nick Kruiskamp on +27 (10) 003 0700

Solving the complexities of Share Scheme Administration‌ At Singular Systems, we build niche software products to solve complex business challenges.

Sh@reTrust provides our clients with an end to end share incentive management solution with many exciting features.

For more information on how to purchase Sh@reTrust or outsource the administration to our team, please contact: Nick Kruiskamp Email: nkruiskamp@singular.co.za Tel: +27 (10) 003 0700 | www.singular.co.za

JULY 2012 | 1

anglogold ashanti

Miners collect their rescue packs, safety equipment and lamps from the lamp room prior to going underground

communities. All future mine development to its roots as Vaal Reefs Exploration and and community investment projects will Mining Company in 1944. The paradigm be conducted in a more consistent and shift in the company’s vision and strategy, coordinated way, in close partnership however, happened in 1998 when a whole with key stakeholders. And these not only swathe of South African gold mining include the local communities but also the companies including East Rand Gold national governments, NGOs, other mining and Uranium, Eastvaal Gold Holdings, Southvaal Holdings, Free companies and suppliers— State Consolidated Gold all with the aim of enabling Mines, Elandsrand Gold the communities to reach their development goals.

Mining Company, H J Joel Change, continuous Gold Mining Company development and and Western Deep Levels improvement have been were consolidated into major contributors to Vaal Reefs to form a single, A ngloG old’s success focused independent gold Paid to host countries in taxes, 2011 mining company that was throughout its history, and renamed AngloGold. Since this can be traced right back

$379 million

Mining & minerals | 175

ANGLO anglogold GOLD ashanti ASHANTI

SENET SENET was established in 1989 by a group of qualified engineers and project managers with many years of experience in design and project & construction management of turnkey materials handling and minerals process projects.

SENET later developed a range of proprietary heap leach stacking and agglomeration equipment in the early 1990s, which has enjoyed global success. Today, SENET is considered a world leader in heap leach equipment technology; furthermore, SENET has the capability to engineer and build prototype or project-specific designs for our clients mineral beneficiation needs.

Since 1993 SENET has actively completed export type projects all over West Africa, North Africa and Sub-Saharan Africa, as well as in Asia, Central and South America.

SENET has been involved with gold heap leach projects since 1993 and our involvement with some of the world’s major gold producers lead to the inevitable progression into gold CIP, CIS and CIL plants and ultimately into complete gold projects, inclusive of mine infrastructures on both a turnkey and EPCM contract basis.

SENET’s core capabilities include EPCM & EPC/turnkey projects, consultancy services, scoping studies, prefeasibility & feasibility studies, design & estimate audits, project financial services, HAZOPS studies, test work supervision, process development & design, detailed engineering & design, value engineering, due diligence reports, technical audits, and specialist engineering (finite element & dynamic analysis). SENET’s in-house capabilities include process, civil/ structural, mechanical, piping, electrical and instrumentation disciplines including SCADA, PLC automation, project procurement, spares management, international shipping expertise and logistics management services.

SENET covers the full project lifecycle, from inception to handover, as a package or as individual components.

SENET has established itself as one of the most dynamic engineering companies in Africa today. It continues to expand through a forward-looking policy and diversification of its already widespread range of activities, servicing a variety of clients.

E. senet@senet.co.za | www.senet.co.za

Mining & minerals JULY 2012| 177 |2

that date, AngloGold has grown, combining with Ashanti Goldfields in 2004 to form AngloGold Ashanti. It has continuously evolved and grown since then, acquiring new assets, divesting others and forming joint ventures and partnerships.

Today, AngloGold has a portfolio of long life, relatively low-cost assets in key gold producing regions around the world with combined proved and probable ore reserves of 75.6 million ounces. In South Africa the company has six deep-level mines and a surface operation producing some 37 per cent of the company’s gold output as well as 1.38 million lbs of uranium as a by-product.

The company has eight mining operations in

Blasting at Cripple Creek & Victor, USA

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continental Africa. Located in Ghana, Guinea, Mali, Namibia and Tanzania, these account for a further 36 per cent of group gold production.

In Australia, the Sunrise Dam mine produces six per cent of output and finally, the corporate presence in the Americas includes the Cerro Vanguardie mine in Argentina, Mineração and Serra Grande in Brazil and the Cripple Creek & Victor mine in the US. The combined production from the Americas accounts for the remaining 21 per cent of group gold output.

Like all successful mining companies, AngloGold has a pipeline of mines under development through which it expects to achieve its 2015 production target, and an extensive programme of exploration

anglogold ashanti

“AngloGold has a pipeline of mines under development through which it expects to achieve its 2015 production target� to identify future projects. In Australia, the company is working as the managing partner and 70 per cent shareholder in a joint venture with Independence Group (30 per cent) to bring the Tropicana mine, located near the mining town of Kalgoorlie, into production. The A$530 million project is scheduled to begin operating in 2013,

producing six million tons of gold per annum over a lifespan of about 10 years. Meanwhile, an extensive programme of exploration along the 600 kilometre strike length is yielding promising results and looks set to extend the mine’s life considerably.

In the Democratic Republic of Congo (DRC) the company is involved in two joint ventures. It is 86 per cent owner of Mongbwalu near Bunia in the north-east, planned as an underground mine with scope for expansion as the aggressive regional exploration programme identifies new sources of ore. The company is aiming to go into production here early in 2014.

The second project in DRC is Kibali, a joint venture owned 45 per cent by AngloGold and 45 per cent by Randgold Resources, the project manager, with the remaining interest in the hands of state-owned Sokimo.

Finally, AngloGold has two major projects in development in Colombia. Gramalote, a joint venture with B2Gold, is scheduled to go into production in 2016, and is currently entering the feasibility study phase. La Colosa, wholly owned by AngloGold, is likely to enter production in 2019 and is the largest greenfield discovery the company has ever made. The site currently has a resource of 16 million ounces of gold, but exploration is

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YO U R O N E S O U R C E M I N I N G CONSTRUCTION SOLUTION

Mediterranean Projects Limited provides Engineering services which include: • General Rubber Lining installation on mining as well as oil and gas process plants.

• Hydro blasting and sandblasting • General Industrial welding and fabrication • General piping and steel structure erection on mining process plants.

• Mechanical installations (mills, crushers, cyclones, vibratory screens, pumps) • HDPE sheet installation.

• HDPE Pipe fusion • Conveyor belt splicing and structure installation

Our line of product supply includes the following: A) All rubber lining materials such as rubber sheeting, adhesives, cleaning solvent and primer.

Mediterranean Projects Limited has the agency in Ghana, Burkina Faso, Mali and Cote D’Ivoire to supply all our rubber lining, conveyor belt as well as all rubber products from TRUCO (Transvaal Rubber Company Pty), South Africa.

B) All bulk conveyor belts and HDPE pipes and sheets C) All steel products such as steel pipes, steel plates, electrodes, beams, Hardox plates and welding accessories.

D) Industrial anti corrosive and domestic paints

Tel: +233 54 4331 577 | +233 54 4352 588 | www.mediterraneanprojects.net

anglogold ashanti once more underway.

Mediterranean Projects Limited While AngloGold has an We have over time emerged strongly within the West overarching sustainability African sub-region, extensively contributing in the area of strategy and framework material supply and service provision for the construction that will define its method of key mining process plants in Africa. of operating around the Our broad service base include rubber lining installation, globe, in each of the conveyor belt splicing, HDPE pipes and sheets vulcanizing, abrasive blasting, industrial welding and fabrication, boiler regions this is being further making and general supply of mining materials at affordable aligned to meet local needs prices. Safety is our anthem, quality is our goal. With our and conditions. enormous experience, you can trust us to handle your In South Africa, work construction needs professionally. We are unrestricted by continued through 2011 to geographical borders; and our support teams are always reduce occupational lung available to satisfy our clients. disease and the impact of www.mediterraneanprojects.net HIV/AIDS. Meanwhile, for mines where the company is already operating at depths of some 4,000 metres, new technologies are being developed to mine without drilling and blasting, and to remove people from the process. This, however, will result in fewer local job opportunities.

“Whilst automation of our mines will address issues of safety and improve productivity and efficiency, we are highly sensitive to the impact this new approach will have on our employees and on job creation opportunities in the medium- to long-term,”

“technologies are being developed to mine without drilling and blasting”

Mark Cutifani, CEO

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AV E N G M O O L M A N S I S T H E O P E N C U T CO N T R A C TO R O F C H O I C E S A F E T Y | H O N E S T Y | A C C O U N TA B I L I T Y

Aveng Moolmans The working relationship between AngloGold Ashanti and Aveng Moolmans commenced in 1989 at the Namibian Navachab Mine and later in West Africa in 1996 when mining works first started at the Sadiola Mine. Aveng Moolmans is now the contract miner for four of AngloGold Ashanti’s key mines in four African countries. An average of 4,212,000 bank cubic metres (bcm) per month is mined on these contracts collectively.

Aveng Moolmans’ actual production is 10,900,000 bcm, ahead of the original plan for the period January 2011 to April 2012.

There have been no disputes between the two companies over the 33-year working period due to the open relationship and

access to management at all levels of both organisations by both parties. Longterm contracts have yielded high levels Email: Moolmans@moolmans.com | www.avengmoolmans.co.za of morale and trust between the two organisations; and a team approach to problem solving has established sound relationships. Participation in continuous improvement and other initiatives has also resulted in benefits to both parties.

There were no significant production losses during the recent civil unrest in Mali (and on previous occasions in Guinea) due to AngloGold’s proactive and practical approach to managing these situations, in conjunction with Aveng Moolmans. www.avengmoolmans.co.za

AV E N G M O O L M A N S I S T H E O P E N C U T CO N T R A C TO R O F C H O I C E S A F E T Y | H O N E S T Y | A C C O U N TA B I L I T Y

Email: Moolmans@moolmans.com | www.avengmoolmans.co.za

anglogold ashanti the company said. AngloGold has been strengthening community engagement, and continuing with initiatives to create employment in the host communities. To finance this economic, enterprise, social and institutional development in the region, the company has earmarked $40 million in funding for the period 2012 to 2014.

From the environmental perspective in South Africa, an integrated water management strategy is being introduced to address issues such as potential mine flooding, groundwater and storm water management as well as the potential impact of mining activities on water supply to neighbouring areas. As part of that, several mitigating and preventive initiatives have been launched.

In continental Africa, the focus is on standardising the approach to social and environmental issues. Recognising that this is a major undertaking and will be a long term goal, the project is being divided into three phases over a 10-year period. Over the first one- to three-year period, the aim is to stabilise performance and address the greatest areas of liability and risk. The second stage is optimisation, ensuring the operations do no harm and achieve consistent sustainability performance. The final period will be one of growth, embedding

$6.6 billion AngloGold Ashanti’s income, 2011 Drill sampling at Navachab mine, Namibia

Mining & minerals | 183

At GSS we understand the importance of that ‘just like home’ feeling and try our best to recreate it for you even in the most remote locations. From the depths of the Algerian desert to the wilderness of the Serengeti, GSS goes the distance to ensure your employees are well cared for. When you partner with GSS, you can trust us to deliver on our promise of bringing you quality of life no matter where you are in the world.

Delivering quality of life where it’s needed most Telephone: +223 20 24 55 20 www.gss-contracting.com

anglogold ashanti best practice across all sites gss and making AngloGold the GSS is an integrated facility management, procurement preferred mining operator and logistics organisation supported by an advanced in the region. systems capability. Working to full ISO standards, GSS In the Americas, a operates internationally providing integrated solutions significant region of to international governments, NGOs, and mining, oil & growth for AngloGold, gas, business and industry clients, delivering exceptional service in the most challenging and solutions-dependent the focus is on achieving operational environments. consistency of approach and GSS: Delivering quality of life where it’s needed most. continuing improvement. www.gss-contracting.com Its efforts were rewarded in October last year when the Colorado Department of Public Health and Environment awarded the Cripple Creek & Victor mine a three-year ‘gold’ certificate in the Environmental Leadership Programme, which recognises companies that voluntarily go beyond compliance with state and federal regulations and are committed to continual environmental improvement.

In the Australia region, the focus is also on ensuring consistent implementation of the sustainability framework. The Tropicana project is still under development and effort is going into managing contractor safety and developing a regional community plan.

Exploration is the last essential strand in ongoing company development and this is split between brownfield exploration, which is aimed at increasing the mineral resources and Sunrise Dam, Australia

“From AngloGold’s perspective, sustainability is critical, not only for ongoing growth but also for the long-term viability of the business” Mining & minerals | 185

Primary transportation of gold bearing ore from the crusher to the heap leach pads at Cripple Creek & Victor mine, USA

anglogold ashanti ore reserves on the existing asset portfolio, and greenfield exploration. During 2011 a programme of greenfield exploration took place in 17 countries including new targets in Australia, Colombia, Brazil, Argentina, the Solomon Islands, Gabon, Guinea, Egypt, Ethiopia, the DRC and Canada. For 2012 a further $230 million is being committed to exploration, $180 million for greenfield, $102 for brownfield and a further $20 million for a joint venture with De Beers, which is focusing on marine exploration.

Looking to the future, the company is continuing to grow and develop: $1.9 billion is to be invested over the coming five years in the expansion of the Cripple Creek & Victor mine in the US, and in developing the Mongbwalu and Kibali projects in the DRC. These are expected to contribute an additional 500,000 ounces of gold to annual production and a further 5.4 million and 5.6 million ounces will be contributed by 2014 through a combination of new projects in Africa, Australia and South America, and by expanding some existing operations.

From AngloGold’s perspective, sustainability is critical, not only for ongoing growth but also for the long-term viability of the business. The sustainability framework that is currently being standardised across the organisation is preparing the company for a strong future and a position as market leader.

For more information about AngloGold Ashanti visit: www.anglogold.co.za

Mining & minerals | 187

188 | Be mining & minerals

Osisko Mining

written by: Ben Sansom research by: Luke Smith

Sitting on a gold mine Osisko’s billion dollar Canadian Malartic mine is the single largest gold reserve in production in Canada. General manager Denis Cimon talks about the challenges and achievements of this unique project Be mining & minerals | 189

The Canadian Malartic Project is a billion dollar investment

Osisko Mining

T

he town of Malartic, Quebec is sitting on a gold mine—literally.

To be more precise, it used to sit on a gold mine until part of the town was moved to facilitate mining operations. But more of that later.

Established in 1998, Osisko is based in Montreal. Initially focusing on mineral exploration, the company evolved into a mining corporation when it decided to develop the Canadian Malartic Project on its own.

It must be an extremely rewarding feeling when a project involving a billion dollar investment starts to pay you back; even more so when it comes in ahead of schedule. Much has happened since we last spoke to Denis Cimon, general manager of Canadian Malartic in February 2010.

Construction of the mill was completed in late February 2011. Following a cold testing period of the processing plant, ore was introduced into the mill in early April and first gold was poured on 13 April 2011, a mere six years after the initial drill hole in March 2005.

After the original target was set for August 2011, commercial production was achieved three months earlier than that.

With the full design capacity of the first milling plant being 55,000 tonnes per day, gold industry protocol meant that it had to operate at 33,000 tonnes per day (60 per cent of capacity) for 30 consecutive days to be deemed to be in commercial production. The 30th day was reached on 17 June, making 19 May the first day of commercial production.

Be mining & minerals | 191

SECURITY INVESTIGATION OPTIMUM INC. Is a dynamic company which has been working in the field since 1997. Security Investigation Optimum Inc. has today over 200 employees and its manager has over 25 years of experience in the field.

Security Investigation Optimum Inc. actually serves many regions of Quebec more exactly, Abitibi-Temiscamingue and James Bay. The development of this company will cross frontiers if everyone aims their efforts in the same direction. Security Investigation Optimum Inc. now focuses on breaking into the market by promoting the company to all entreprises that may need security, investigations, expert-adviser, traffic control and custody services.

Tasks and responsibilities: • Ensure security of people and property • Ensure the good working condition of security systems and implementing of rules • Patrolling inside and outside buildings • Verifying the different fire systems • Verification of theft detection systems • Monitoring and controlling of Building accesses • Intervention during emergency situations

Sécurité Investigation Optimum Inc. 1345, chemin Sullivan Val-d’Or, Québec J9P 1M2 Tel: 1-888-825-0077 Fax: 819-825-6677 Réal Goupil, General manager’s Email: r.goupil@securite-optimum.ca Tel: 1-888-825-0077 #223 Sophie Roy, Human resources Email: s.roy@securite-optimum.ca Tel: 1-888-825-0077 #224

Services offered • Care taking • Corporate security • Security mining • Driver services • Parking attendant • Traffic Controllers • Investigations • Complete pre-hiring • Escort and protection • Intervention plan for strike and lock out • Trainer (certified) for the formation of security guard and signalman directly to our office in Val-d’Or.

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Osisko Mining

Official inauguration of the Canadian Malartic gold mine

“We have almost finished building a 2012 likely to be between $510/oz to $575/oz, new secondary crushing circuit to increase placing Osisko in the lowest quartile for gold production to between 600,000 and 650,000 mining companies (below $650 per ounce). ounces,” said Cimon. “The construction “Our primary focus in 2012 is on optimizing program is on target to the mine development and deliver the first unit near synchronization between the end of March and the mining and milling,” complete program by the he added. “The key is end of June.” stabilization.”

The cash cost is expected Canadian Malartic is Osisko’s first productive to decrease substantially mine, and is expected to as the plant reaches full Daily design capacity of produce over ten million capacity. Cimon sees the first milling plant ounces of gold from now mine’s cost per ounce in

55,000 tonnes

Be mining & minerals | 193

Osisko Mining until 2027. Gold production Petro-Canada Lubricants reached 79,718 ounces in At Petro-Canada Lubricants, we are proud to partner with the fourth quarter of 2011 industry leaders like Osisko Mining Corporation, who put and 200,137 ounces for the Canada on the map for world class mining. From start to year. Significantly, the mine finish, the new Osisko Canadian Malartic Mine depends currently represents the on Petro-Canada for their excellent service, extensive single largest gold reserve mining expertise and high quality products. We’ve worked in the Canadian mining industry for over 30 years and we in production in Canada understand the conditions, equipment and importance and it’s still looking for in meeting OEM standards. We are proud to offer a full (and finding) more through suite of greases, oils and fluids, formulated to provide ongoing drilling on adjacent outstanding equipment protection, in addition to providing mineralized zones. Yearcomprehensive on-site refuelling services. We believe end gold reserves increased that reducing downtime is more than a promise; it’s a by 200,000 ounces to 10.7 commitment to delivering savings solutions shift after shift. www.lubricants.petro-canada.ca/mining million ounces, effectively replacing 2011 production.

At the inauguration ceremony on 30 May 2011, Sean Roosen, president and CEO of Osisko, reminded those in attendance that the success of the billion-dollar-plus project was the result of a collaborative effort involving thousands of people. He particularly emphasized the support from the town of Malartic and its citizens, more than 200 of whom allowed their houses to be moved to the northern edge of the town, to allow for open pit mining where some of those original homes used to be.

The Malartic property is owned 100 percent by Osisko, and has been worked in

10.7 million oz 2011 year-end gold reserves Mining complex

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In addition to providing aggregates to multiple clients with it’s mobile CEC crushing plant, Galarneau inc. offers different services such as: • Transportation of regular and oversized cargo such as construction machinery, drilling equipments and mobile plants • Dam construction or enhancement • Transport of sand, gravel and crushed stones • Drilling and blasting for quarries, municipalities and mines • Snow removal • Water and wastewater installation and repair • Digging and earthworks

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The team of dynamic professionals already has significant expertise in the field of road projects, mining, municipal and industrial works.

Within a company in constant development, Norascon’s staff is able to ensure the success of various projects. Their concerns for efficiency thereby promotes a harmonious relationship between client, consultant and contractor.

Working in a competitive industry where requirements and quality standards are high, Norascon positions itself as a leader in the field of civil engineering and mining.

Osisko Mining the past. Between 1935 and Galarneau Inc. 1983, deep mining of the From road works to water and wastewater, drilling and high-grade Malartic and blasting to stone crushing or screening, Galarneau Inc. Barnat veins yielded over is present on all fronts. For more than twenty years, 5 million ounces of gold, Galarneau inc. keeps growing. Meeting the highest but subsequent exploration standards in each specialty, we provide fast and excellent failed to find further deep results, which is the company’s raison d’être - customer satisfaction. high-grade gold resources. www.galarneau.ca Convinced of its potential, however, Osisko acquired the property in December 2004 and began looking for lower-grade deposits closer to the surface. Combining its own exploration data with that of previous explorations, the company found what it was looking for: a large area with the potential to become an extensive and highly profitable surface mine.

Although the project came in ahead of time, creating a new mine has never been plain sailing and the navigation of projects like this has taken on an extra dimension of complexity since the mining industry embraced the concept of sustainability, from an economic, environmental and social point of view.

To give due credit, Osisko built in a sustainable development program right from the start. With part of the gold resource being literally under the town of First gold was poured on 13 April 2011

“Our primary focus in 2012 is on optimizing the mine development and synchronization between mining and milling” Be mining & minerals | 197

THE BROADEST PRODUCT LINE IN THE MINING INDUSTRY Wherever there’s mining in Quebec, you’ll find Cat® products hard at work – drilling and digging, loading and hauling, grading and dozing. You will also find a Hewitt Equipment Limited branch, providing unmatched support, expert service and integrated solutions.

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890, rue Lasalle, Malartic, (Québec), J0Y 1Z0 Tel: 819-757-4868 | Fax: 819 - 757-4965 Email: locationdumco@cablevision.qc.ca

Location Dumco Inc. is a company established for over 25 years, with a specialist workforce skilled in the installation of polyethylene and fusion pipe fittings, the application of Coletanche membrane, excavation work and the transportation of aggregates.

Osisko Mining Malartic, it could hardly do The Hewitt Group anything else, but it’s how The Hewitt Group is the authorized Caterpillar dealer for the you do it that counts. “We province of Quebec, the Maritimes and Western Labrador. had to reach out to the local With 45 branches, the Hewitt Group sells, rents and community, communicating services the full line of Caterpillar products. with the town council Hewitt Equipment Limited provides Osisko with heavy and the citizens, building equipment and state-of-the-art mining technologies, as well as support, maintenance and operator training. relationships, exchanging www.hewitt.ca information and forming a community consulting group,” said Cimon. “When we realized that we had the acceptance of the town council and over 85 percent of the population, we started a program of drilling to define the area of the deposit.”

The southern boundary of the town is now shielded from the open-cast mining operation by what the company calls a ‘green wall’— a wall of earth seeded with grains and planted with trees, not only cutting out noise and dust but also providing a leisure facility. The company also worked with the town’s mining museum to build a viewing center so that people can see the pit and see the operations. A new park will be built this summer along the ‘green wall’ – it will include baseball and skateboard facilities, Open pit

Location Dumco

Our main involvement with the Osisko project consists in the sale and installation of polyethylene pipes whose diameters vary from 2 to 36 inches. We also supply various fittings for HDPE joining and transitioning to other piping systems.

In addition to excavating and transportation, we frequently rent out our specialized labor and trades to fulfil a specific task within the mining industry.

We are proud to be involved with such a great project. locationdumco@cablevision.qc.ca

“osisko is progressively restoring vegetation” Be mining & minerals | 199

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Osisko Mining fountains for children and Traction even an area where elderly Traction, leader in heavy vehicle parts distribution, is proud people will be able to do to be part of the biggest mining project in Canada. Like some exercices.

Osisko, we care about people and the environment, and A variety of other like them, we are daring and innovative. With more than 95 sustainable measures were stores and nearly 50 years of experience, we are able to adopted, including hydrosupport the growth and the development of this new mining generation. Congratulations to Osisko, and good luck in electric power to reduce your future projects! the need for fossil fuels, and www.traction.com the use of electric shovels to make it one of the first customers for the new generation of trucks with motors that meet the EPA’s Tier 2 emission standards.

Another sustainability choice was to progressively restore vegetation at the mine site rather than waiting until the end of the mine’s life cycle. The process of continuous rehabilitation was made possible by the decision to use thickened tailings technolog y, which allows indigenous trees to be planted while mining continues.

On top of that, the ‘Osisko Forest’ project is a reforestation program for various municipal land lots in the region. This involves the landscaping Secondary crusher and reforestation of 100 hectares of land each Soutex year for nine years. An At Soutex, the customer-oriented approach, the rigor in additional benefit is that project execution, the quality of services and the efficient team work approach were all strategic factors establishing the project will provide the partnership with Osisko. Through the project, it was jobs for local people then possible to deliver within budget and schedule the who will work under the controlled documents as operating manual and SOP, the expert guidance of the on-site training to operation personnel and the round-theenvironment department. clock mill start-up coaching and metallurgical support.

A major challenge for www.soutex.ca Osisko (and other miners

Be mining & minerals | 201

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Osisko Mining

13 April 2011 First gold poured at Canadian Malartic in Canada) is workforce attraction/ retention and its associated costs, as there is a worldwide shortage of technical skills.

Cimon predicts that the next couple of years will see some projects ‘parked’ due to a lack of skilled people to build and operate them. For less technical skills Osisko carries out its own training, but a mining engineer needs four years of university coursework. Osisko has started to hire people in their 3rd year at university to attract them to work for Osisko full-time after graduation.

The company is also pursuing exploration on a number of other properties, including the Hammond Reef Gold Project in Northern Ontario.

This project currently hosts an NI 43-101 compliant inferred resource of 6.70 million ounces of gold, giving Osisko the potential to become a one million ounce per year gold producer by 2016. Additional drilling has continued to allow for the upgrade of the entire in-pit deposit to indicated category by the end of the first quarter of 2012 and measured and indicated by the end of the second quarter.

For more information about Osisko Mining visit: www.osisko.com

Be mining & minerals | 203

The future of Rio Tinto is one of the two largest producers of iron ore in the world and most of it comes from the Pilbara, where an amazing programme of expansion and modernisation is taking place to realise a vision: the Mine of the Future

written by: John O’Hanlon research by: Lucy Bendall

204 | Mining & minerals

Rio Tinto Iron Ore: Pilbara Expansion Projects

f mines

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T

he Pilbara’s red earth, splendid scenery and vast extent combine to create the image of Australia that has caught the imagination of generations. The top-left corner of Western Australia is home to a population that has inhabited it continuously for over 40,000 years; to them it is a very precious landscape. However, today there is another dimension to that value, because the region is rich in the most useful mineral to mankind—iron. Just as the red planet Mars owes its colour to the iron in its crust, so that element reveals itself in the rusty splendour of the Pilbara.

The Anglo-Australian Rio Tinto group leads the world when it comes to the extraction of minerals. Coal, aluminium, copper, diamonds and specialised minerals are all important divisions; however iron ore is in short supply these days and supplying the world’s steelmakers has long been a key activity for the company. It is a staggering fact that roughly 12 per cent of the iron ore consumed today comes from Rio Tinto’s Pilbara mines alone. Though there are other operators in the Pilbara, Rio Tinto’s Pilbara Blend product has a distinct market advantage: by combining the varying output from a number of individual mines, the mills can rely on receiving ore with consistent iron, silica, alumina, phosphorous and moisture content, even at short notice.

And there is no sign of this demand slackening. India and China are both growing at a phenomenal rate and those countries’ consumption of steel for cars, white goods and construction is expected

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Rio Tinto Iron Ore: Pilbara Expansion Projects

Stockpiles at Parker Point, Dampier port

to go on growing, says David Joyce, managing director of Rio Tinto’s Pilbara expansion projects.

To satisfy this demand, China needs reliable supplies at a reasonable cost, and here the comparatively short sea routes to Asia that once made Australia feel vulnerable become an advantage. Already one of the lowest cost producers of ore products, Rio Tinto is embarking upon an ambitious project that will ramp up and streamline production and delivery of the product. Over the next seven years Rio Tinto believes that global iron ore supply additions for China alone will need to find at least 100 million tonnes of additional supply each year, while 500 million tonnes is required to satisfy expected demand growth and 200 million tonnes in lieu of those sources that China would like to replace because of their high cost.

Against these trading fundamentals, expansion in the Pilbara was inevitable.

The operations in the region are already extensive, with 14 operating mines, three shipping terminals at the ports of Dampier and Cape Lambert and a 1,500 kilometre rail network. It is a fully integrated system, managed centrally from Rio Tinto’s Operations Centre in Perth. The early prototype of the centre was established in

Ship coming in to berth at Ea

June 2005 as part of Rio Tinto’s Mine of the Future programme, and the fully fledged version now boasts more than 450 staff.

“Drawing together the control functions for the mines and the integrated logistics network made it possible for us to produce iron ore at maximum efficiency,” comments Joyce. And that, he adds, was vital to the success of the expansion project.

By 2015 the company expects to have

“We have a clear lead on the rest of the world where iron ore mining technology is concerned” 208 | Mining & minerals

Rio Tinto Iron Ore: Pilbara Expansion Projects

ast Intercourse Island wharf, Dampier port

Tug pens at Intercourse Island

spent more than $A18 billion a joint venture with Japan’s on expanding the capacity Komatsu. It is all about increasing the capacity of of its Pilbara operations by the operations to achieve 50 per cent to 353 million tonnes per annum. As the 353 million tonne target Planned Pilbara capacity well as mine life extension without proportionally expansion by 2015 and expansion of existing increasing headcount.

Ten driverless trucks are mine workings it is driving already working at the technology to an extent never before conceived of in the mining Yandicoogina mine in the Pilbara alongside industry. Earlier this year, for example, the automated rigs that can drill much more company committed $A480 million to the precisely than the most skilled human introduction of driverless trains—two-and- operator, and work faster too because they a-half kilometres long and with a payload of can return to work soon after blasting, 24,000 tonnes. without having to wait for the air to clear.

The automated trains will be controlled “We have a clear lead on the rest of the from Perth, as eventually will the fleet of world where iron ore mining technology 150 automated trucks being developed in is concerned,” says Joyce.

50%

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The object of automation is not just about reducing costs but also about delivering the Mine of the Future, bringing a level of productivity and repeatability that has eluded the mining industry so far, he explains. “The Mine of the Future will demand a new breed of employee: people who can manage highly automated systems and continue to grow those systems. It is about building more efficiently controlled systems that don’t rely quite so much on human elements.”

Rio Tinto’s port facilities are the envy of the other companies working in the Pilbara.

Dampier has two ship loading terminals, one at Parker Point and the other at East Intercourse Island, and an associated

Mine operations, Pilbara

210 | Mining & minerals

blending strategy: capacity there has just been increased by a further five million tonnes, at a cost of $A234 million as part of an incremental investment programme to enable the ports and associated infrastructure to handle 353 million tonnes. But the most ambitious port project is to the east at Cape Lambert, where a second 1,400-metre jetty and two-berth wharf is under construction at a cost of more than $A200 million. The new Cape Lambert Port B development includes a tandem car dumper facility, a stockyard including two stackers and two bucket wheel reclaimers, a screenhouse and surge bin facility, a 1.4 kilometre-long access jetty and a double-sided iron ore wharf with two shipping berths and a shiploader. It

Train aerial

Rio Tinto Iron Ore: Pilbara Expansion Projects

“We have been moving towards framework agreements with our contractors, involving them at an earlier stage to improve planning” will be in operation by the end of 2013 and will increase Cape Lambert’s capacity by 53 million tonnes per annum. If and when the second (50 MTPA) expansion is approved, the jetty will be a further 400 metres out to sea and the associated infrastructure will be doubled.

Australia’s national economy grew by 2.5 per cent over 2011, outstripping the

Eurozone, and according to the State of the States report, published by the leading Australian stockbroking firm CommSec in January 2012, Western Australia is well ahead of all the other states, largely thanks to its minerals, oil and gas industries.

This means there is plenty of work for contractors in the booming Perth region, and securing the best of them for longterm operations in the remote Pilbara has involved some rethinking of the traditional EPCM model, says Joyce. “We have been moving towards framework agreements with our contractors, involving them at an earlier stage to improve planning and integrating them with the entire expansion programme in a way that gives them greater security and the chance to move from project to project.”

As well as reducing cost, the continuity of the framework agreements delivers a safety bonus. And standardisation of design and working methods across multiple mine expansion projects is a further way to cut the overall cost, he adds. “It is a way of putting some formality into our relations with our contractors in Western Australia. We know the construction and contracting market in Perth needs to expand to handle all the work that is

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Brockman 4 mine

Rio Tinto Iron Ore: Pilbara Expansion Projects being done in Western Australia so these framework agreements are a mechanism to communicate with our contractors and give them confidence to go out and get the people and equipment they need to do this work over the next three or four years.”

This principle benefits local contractors as much as the big construction contractor firms like SKM and John Holland. Since the programme began in 2010 more than a billion dollars’ worth of work has been placed with aboriginal contractors, and Joyce is very proud of that. “We use a variety of models for involving aboriginal companies, of which the most effective has probably been to encourage major contractors to form joint ventures with local contractors.”

That way, he says, the local firms can grow and learn by working with their national and multinational peers.

Between 2001 and 2011 Rio Tinto drilled a million metres and doubled its ore reserves in the Pilbara. It plans to drill at an even greater rate over the coming five years, and it will be able to supply its Pilbara Blend customers, at the rate of 353 million tonnes a year, until at least 2045. This is what the Mine of the Future programme is all about: introducing next-generation technologies for mining operations, contributing to better health and safety, production efficiencies and improved energy consumption and environmental benefits For more information about Rio Tinto visit: www.riotinto.com

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written by: Gay Sutton research by: Jon Bradley

214 | Mining & minerals

Vale

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Vale Totten Mine

Vale

S

uperficially, the icy northern reaches of Canada and the hot arid deserts of Australia have little in common other than the language. Look more closely, and both benefit from enormous mineral resources that account for a significant portion of the national economy and an even greater percentage of their exports.

Moreover, some of these resources have been mined for more than a century and a half. In both cases a number of famous mining towns and cities have sprung up – providing services, products, homes and entertainment for those working in some of the world’s least hospitable places.

The city of Sudbury in Ontario is one such place. With long cold winters and brief but warm and humid summers, it began as a simple mining camp in the rich geological region known as the Sudbury Basin. Today Sudbury is a city of some 158,000 people and its economy has diversified to include financial services, business, tourism, healthcare and education. But mining continues to play a significant role. According to figures produced by the Greater Sudbury Development Corporation last year, Vale – which can trace its history back to 1902 when Inco opened its first mine in Sudbury – is still the city’s largest employer.

This year Vale is celebrating the fifth anniversary of its venture into Canada and the global nickel business in late 2006, an event that saw Vale, the world’s second largest mining company, acquire Torontobased Inco. In that short space of time the

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SymBot

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Vale company has announced Symboticware and embarked upon an The success of SymBot, Symboticware’s new mobile ambitious program of equipment monitoring and data management device for investment and expansion the mining industry has put this Canadian company on a in Canada, and the Canadian fast track for expansion. Company CEO Kirk Petroski says operations have taken Symboticware is hiring. “With the industry’s acceptance of on a new role within the SymBot as a way to improve mine productivity, reliability and safety, we are now hoping to attract experienced global business. software developers and field engineers.” Petroski says “Inco was primarily a Symboticware’s immediate plans are to build on the long-time nickel miner, success of SymBot— expanding its package of monitoring the second largest in the applications for all makes of mobile equipment in world at the time of the underground and surface operations. acquisition,” explained www.symboticware.com Cor y McPhee, VP corporate affairs. “With the Vale acquisition we maintained the head office in Toronto and repositioned it to manage the entire Vale base-metals business worldwide.” Among the portfolio of operations handled from Toronto are mines in New Caledonia, Indonesia and Brazil, and refineries in Wales, London, Japan, South Korea, Taiwan and China.

With this new global remit and with the financial backing of parent company Vale, the Canadian operation has been making major investments. Firstly, the previous focus on nickel is being expanded. “While we’ve been mining in Canada for over 100 years, our existing

“the Canadian operation has been making major investments”

Vale Totten Mine

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F

rom mine development to the production, process and movement of ore, MTI is proud to support Vale. Our goal has always been to exceed expectations by working closely with each and every customer.

Thank you Vale for including us in your success.

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Vale

Electric Karuna Truck at Coleman Mine

facilities offer some exciting potential demonstrating its greatest commitment. resources, not only in nickel but also The current operations comprise some six in copper and we’re looking to exploit mines, a mill, a smelter and a refinery in that potential,” said McPhee. “So we Inco’s original home town of Sudbury, and aim to grow the copper business both this is supplemented by a second Ontariohere in Canada and globally. We’re also sited refinery and packaging facility at Port committed to entering the fertilizer Colborne on Lake Erie. Mining, milling, business here in Canada.” A potash smelting and refining also take place at project is currently under development Thompson, Manitoba, where some 40 percent of the refinery’s at Kronau, near the city of cu r rent t h roug hput Regina in Saskatchewan, is transported from and is scheduled to go into Voisey’s Bay, an exciting operation in 2016. new Vale mine located It is, however, in the in Newfoundland and investment plan for the Labrador which went into existing Canadian mining The Totten mine in operation in 2005 and business that the BrazilianSudbury is due to reopen based parent company is includes its own concentrator

2013

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For over 50 years we have been proud to be a part of the VALE team

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Vale and port facilities. All of Dixon Electric this, however, is scheduled For more than 50 years, Dixon Electric has been servicing for improvement. the electrical industry with a combination of integrity, “On 17 November 2010 stability and trust. It takes pride in its ability as a full-line we announced a $10 billion electrical distributor to provide customized solutions to investment program for exact specifications for each one of its clients.

Canada over the next five Dixon specializes in the development and implementation of standard and automated product solutions, managing years. So we’re now one inventories and electrical service systems. Dixon also year in, and it’s progressing provides engineering and consulting options such as according to plan,” said start-up and commissioning, power, equipment and McPhee. The company energy savings audits, as well as purchase management has based its current of large-scale capital projects. investment plan on a Designated as an ISO 9001 company, Dixon Electric is comprehensive business very proud to be a major supplier to Vale and looks forward to building the relationship even stronger. overview and nationwide www.dixonelectric.ca development strateg y.

“We’re looking at the entire base metals operation as an integrated flow sheet,” he explained.

“So instead of erecting a fence or silo around each operation and duplicating the infrastructure we’re looking at the entire asset base as one continuous loop.”

These investments are aimed at preparing the business for mining in the long-term. Incorporating some of the latest technologies, the various projects will strengthen the business infrastructure,

“The investments are aimed at preparing the business for mining in the long-term”

Ore from Coleman Mine

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Clarabelle Mill control room

improve operational efficiency and a number of ways to extend the life of our reduce the environmental impact. A new mining activity in Thompson, including $3.6 billion hydro-metallurgical refinery a potential $1 billion investment in a new is currently under construction at Long mine.�

Harbour, Newfoundland The new Long Harbour and Labrador. “The Long processing plant will be Harbour refinery is the first to use hydroscheduled for completion metallurgical technology in conjunction with a by 2013. By 2015, following sulfide-based nickel ore. a period of commissioning Taken through each stage in Long Harbour, we intend of development at the to close our current smelter Vale research facility in and refinery in Thompson, Cost of new hydroOntario, the technology Manitoba.

Thompson metallurgical refinery will then transition to has been proven and tested currently under purely mining and milling. from bench scale through construction to demonstration plant, Meanwhile, we’re looking at

$3.6

billion

Mining & minerals | 225

Vale and will go a long way to Hurley Ventilation Technologies satisfying the company’s Hurley Ventilation Technologies Inc. (HVT) is an ISO 9001environmental ambitions, as 2008 certified company specializing in the manufacture it will have a much smaller of new ventilation fans, systems, parts and accessories. environmental footprint HVT Inc’s Canadian manufacturing facilities produce high than a traditional smelter. quality, affordable newly manufactured ventilation products Approximately $3.4 billion daily, supported by sales offices in the US and Mexico and representatives throughout the world. We expend of the $10 billion investment considerable effort to ensure that our products are the pot has been earmarked for best the world has to offer. projects in Ontario. One of “Without good quality fresh air, mines become a dangerous these is a triumph of modern environment to work in and they simply cannot operate. exploration technology.

That’s why the heart of any mine is a good quality, efficient “We are in the process of and reliable ventilation system. At Hurley Ventilation reopening the Totten mine Technologies Inc. (HVT) we care about a safe and healthy work environment, that’s why we don’t hold our breath in Sudbury,” McPhee said. when it comes to quality.”

“This was a mine that had www.thehurleygroup.com previously been considered mined-out, but we have been able to go back and deploy equipment that sends sound waves through the rock of the old workings, and has defined new resources that we had previously been unaware of. We are now in the process of redeveloping the mine. It’s due to open in 2013 and will have a mine-life of 20 years.”

Costing in the region of $759 million, the redevelopment will create employment for some 130 people and will be the first mine

“The Long Harbour refinery is scheduled for completion by 2013”

Jackleg driller at Coleman Mine

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In addition to supplying a complete line of products for mining and industrial equipment, Mobile Parts Inc. offers the following services.

• Rebuilding of disc brake calipers, actuating air chambers and cylinders, master cylinders, air valves and switches.

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• Rebuilding of transmissions, differentials, transfer cases, steering boxes and other components for mining vehicles and personnel carriers.

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Telephone: 1-800-461-4055 | www.mobileparts.com

Vale Vale has opened in Sudbury Mobile Parts in around 40 years.

During its 30-year life span, Sudbury-based Mobile Parts The CORe project, Inc. has grown from a modest distributor of truck parts for currently underway at tractor trailers into a major supplier of parts, equipment the Clarabelle Mill in the and land cruisers modified for underground mining Sudbury Basin, is another environments. We supply an expansive array of brand example of the company’s name and generic parts for underground mobile equipment.

Hoists, drivelines, electrical components, valves and pumps use of the latest technology to are some of the product lines available. improve the efficiency of its Having supplied mining companies with sealed integrated operations. “CORe stands for braking systems (SIBS) for the past eleven years, Mobile Challenging Ore Recovery, Parts also carries out ongoing research into the developan acronym that doesn’t roll ment of brakes, particularly in underground environments off the tongue too easily,” where high levels of acidity accelerate corrosion.

McPhee admitted. “The www.mobileparts.com geology of the Sudbury basin is unique in that for every part of nickel there are eight parts sulfur, and dealing with that is quite challenging.

The first step in the process is to reject a portion of ore with the highest concentration of sulfur at the milling stage. By improving our ore recovery with a new flotation system that uses state-of-the-art technology, we can use more of the ore and this will increase our ore recovery by 4 percent.” The impact of this will be to extend the life of the region’s mines as it makes nickel recovery possible from ore that previously would not have been considered economical to mine.

$10 billion Investment program for Canada announced in November 2010 Jumbo driller at Coleman Mine

Mining & minerals | 229

Perhaps the most important of all the major investments being made into the Canadian operations is a $2 billion improvement to reduce emissions at the Copper Cliff Smelter. “This represents the largest environmental undertaking in Sudbury’s history,” McPhee said. The project goes to the heart of the company’s long-standing campaign to improve the

ecology of the Sudbury Basin, and builds on its already considerable achievements at the plant. “We have already reduced emissions from the smelter by 90 percent since the 1980s. At that time, our $600 million emissions reduction initiative was the largest environmental project in Canadian history to be solely funded by one company,” said McPhee. “Our current $2 billion investment

“Sudbury is essentially a living history of the environmental impact of old mining practices, and the growth of environmental responsibility” 230 | Mining & minerals

Vale

Vale is celebrating the fifth anniversary of its venture into Canada

is aimed at reducing emissions by a further 70 percent, and we believe it will have a very significant impact on the local community and the environment.”

A portion of the money will be spent constructing a new acid plant which will capture the sulfide gases that would otherwise escape to the atmosphere, and concentrate them into marketable liquid sulfur dioxide and sulfuric acid. The term marketable is perhaps academic, as the revenues generated from these sales are likely to be spent in transporting the products over considerable distances, so the acid plant would perhaps best be viewed as an environmental recycling process.

Social and environmental responsibility

are very much at the center of Vale’s business strategy and investment policy, and the evidence for this is constantly on its doorstep.

Mining and smelting in Sudbury dates back over a century, and the area has suffered enormously from the early mining practices and technologies. “Sudbury is essentially a living history of the environmental impact of old mining practices, and the growth of environmental responsibility,” McPhee said.

Looking back at the very early days of mining, for example, nickel ore was de-sulfured on enormous open air fires called open roast pits. These leaked toxic chemicals into the soil and liberated great clouds of sulfur dioxide which would roll across the community and countryside

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damaging health and forming what we now call acid rain that kills vegetation. So the clean-up process has been long and involved.

Dramatically cutting emissions from the modern processing plants over the last 30 years has had a major impact on the environment, and Vale has dedicated considerable time and resources to rehabilitating the damaged and barren lands.

“For many decades we employed students to spread lime and grass seed on areas of

stressed land to kickstart the regrowth of vegetation. And once we had achieved that in all the areas that were easily accessible we moved to aerial liming and seeding, in a process that’s not that different from crop dusting,” McPhee explained.

Interestingly, the company is putting some of the mined-out levels of its oldest and deepest active nickel mine to good use to help with this rehabilitation. “We are using some of the old levels in our Creighton

“we employed students to spread lime and grass seed on areas of stressed land to kickstart the regrowth of vegetation”

Slag pile regreening

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Vale

Conservation at the greenhouse

mine, which is older than the company, as a tree nursery to grow trees underground using the natural geothermal heat which is constant all year round. During the harvest season we take those trees to the surface and plant them on stressed land as part of our environmental rehabilitation effort.”

The transformation has been painstaking and steady, and in 1992 the region-wide achievements in Sudbury were recognized by the United Nations at the 1992 Earth Summit. The results of these continuous and concerted efforts are not only easy to see – the countryside is greening up and the lakes which had previously been crystal clear and barren are now teeming with plant and fish life – but they are also being scientifically measured and analyzed.

As part of the program of rehabilitation the company is the principal sponsor and funder of the Vale Living With Lakes Centre on Lake Ramsey. This is home to the Co-operative Freshwater Ecology Unit, a group of scientists who are charting and quantifying the improvement in the aquatic environment, and developing new strategies to speed up the recovery process.

From the perspective of the Canadian aboriginal population, Vale is also very actively involved. At Voisey’s Bay in Newfoundland and Labrador, more than 50 percent of the workforce comprises Inuit and Innu people, as part of an effective impact and benefits agreement.

The company is also supporting aboriginal education through programs such as the

Mining & minerals | 233

Regreening

Vale One Laptop One Child initiative that aims to get computer technology into the hands of aboriginal young people and the development of a secondary school mining curriculum in partnership with the National Aboriginal Achievement Foundation.

To promote health, fitness and wellbeing among the wider population in the areas where it’s operating, the company has, for example, donated $3 million to a regional Community Wellness Centre in Thompson, Manitoba. It has just announced a $1.25 million contribution to a Health and Recreation Centre for the community of Port Colborne, and sponsors the Sudbury Cinefest, a very popular annual film festival.

Meanwhile, visitors to the Canadian Museum of Nature in Ottawa will undoubtedly enjoy a visit to the Vale Earth Gallery. Displaying an enormous collection of rock samples, the gallery is the museum’s geological exhibition, and includes a history of mining in Canada, the products that result from it and the industry’s issues and needs.

The five years since Inco was acquired

by Vale have been an interesting journey.

A massive program of investment has been launched across the Canadian operations, aimed at preparing the company for the future. “There have been bumps along the way,” McPhee said, “but everything is coming together, and we believe we have a bright and very long-term future here in Canada.”

For more information about Vale, please visit: www.vale.com

Mining & minerals | 235

Anglo American: Los Bronces

SNOW CAPPED COPPER

It may not be quite the highest mine in the world, but Los Bronces in the Chilean Andes has its own set of challenges for its new general manager Sam Rasmussen

written by: Alan Swaby research by: Daniel Finn Mining & minerals | 237

Exploration geologist EsmĂŠ Tristram examines copper bearing ore near Los Sulfatos, high in the Chilean Andes

Anglo American: Los Bronces

R

eaders of this publication will be long familiar with arduous mining ventures. Normally, this means somewhere miles from nowhere in some hard to reach corner of the country. But in the case of one of the richest copper mines in the world, all the challenges and feelings of remoteness stem from the fact that it lies some 11,000ft above sea level.

“The Andes are practically on the doorstep,” says Sam Rasmussen, general manager of Anglo American’s Los Bronces mine, “and they create a wonderful backdrop to life in the city. The mine is only some 65km from Chile’s capital Santiago and just around the corner from one of the country’s skiing playgrounds. But working at about 3,500m, with several meters of snow a year, is challenging in anybody’s book.”

Not that the location has ever been a complete barrier to mining. As long ago as 1867, prospectors took their picks and shovels up the mountain to stake out a claim to the riches up there. So antagonistic did the rush for glory become that the area became known as La Disputada de Las Condes, with fights frequent and life cheap. Anglo American has been operating in Chile since 1980 and over the years has strengthened its holding through a series of acquisitions until, in 2002, it added the Los Bronces mine to its operations.

Los Bronces is an open-cut copper and molybdenum mine. In 2011, Los Bronces produced 221,762 tonnes of fine copper, including high-purity cathodes and copper concentrate, as well as 948

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000 TONS OF FINE COPPER RECOVERED SINCE 2007 LOAMERICAN AT DIVISION LOS BRONCES – CHILE

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Anglo American: Los Bronces tonnes of molybdenum it did slow down – making concentrate. In November a project that would 2007 the board approved normally take about three an expansion plan aimed years spin out to just under at increasing the mine’s four to start producing. annual copper output by Rasmussen’s job is to iron some 278,000 tonnes in out the wrinkles and ramp its first three years and the plant up to production by around 200,000 in the capacity. “Even though we are dealing with the same first 10 years. Molybdenum output is expected to rise to ore,” explains Rasmussen, some 5,400 tonnes annually.

Confluencia close up “there is always a long With a total startup capex period of fine adjustments of US$2.8 billion, the project produced its necessary and a slow build-up of volumes first concentrate in November 2011. to give the production team chance to But shortly after construction began spot potential problems. This is necessary the 2008 global recession started to bite because once up to speed, the new grinding and while work never actually stopped, facility in the Confluencia sector will have

FORACO Seven years of Anglo American and Foraco.

Trust and continuous improvement.

I can proudly say that, for the last seven years, we have maintained a strategic alliance with Anglo American, specifically División Los Bronces. We have built a working relationship founded on continuous improvement, with emphasis on delivering excellent work, as we do with all our clients. This relationship is based on values that are fundamental to our company and that go through the focus of our lives: working to comply with safety policies, take care of the environment and the communities close to our field work; technological innovation, adding value to our service; having integrity above all and mutual commitment with our strategic partners.

Our relationship with Anglo American has generated important development experiences, new work opportunities in this industry, in which we have been able to be leaders in the management and execution of national and international drilling projects, achieving the recognition from our peers due to our excellent services and the professional and technical training of our workers.

I strongly believe that working with companies who are fully committed to safety, the care of the environment and concerned about always improving is an important contribution, not only to the industry, but also to the people and the entire country.

Pablo Hamilton G. Senior Vice President - Latin America

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Napoleon 3200 of 202 , Las Condes, Santiago, CHILE CP: 755 02 15 Tel: 562-233-1584 Fax: 562 - 233 - 1206

Comprehensive service in exploitation and mining projects TREBOL MINERALS SA is a service company, delivering crushing and mining projects for large and medium scale mining operations in Chile and abroad.

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Anglo American: Los Bronces to process 87,000 tonnes much proven technology rather than experimental. of ore a day.”

Nevertheless, the grinders In m a ny w ay s , bristle with sensors and production at Los Bronces circuits to control speed, is very traditional. It’s an open-pit mine where ore flow and lubrication. is transported by truck At its peak of output, Los Total daily processing to a bank of two crushers Bronces will become the capacity fifth largest copper mine – one old plus one new in the world. Based on the installation – and later latest expansions, despite by conveyer to grinding facilities, for a total processing capacity having mined there for the best part of 150 years, Anglo American estimates the of 148,000 tonnes per day.

The new SAG mill (of 12.2m x 7.6m) mine will be productive for roughly a uses the latest gearless drive technology, further 30 years whether or not further where the axis of the mill is mounted deposits are discovered. with induction windings and becomes the Perhaps the most novel aspect of the motor drive rotor; but this in itself is very whole Los Bronces project is the way

148,000 tonnes

Routine cleandown of the exploration access tunnel

Mining & minerals | 247

PLASTRO MINING IS A LEADER FOR INTEGRAL SOLUTIONS (TURN-KEY PROJECTS) IN THE HEAP-LEACHING MINING BUSINESS The integral solution of Plastro Mining includes best in class quality products such as the Hydromine drip-line product produced in South-America (Argentina, Chile and Brazil), the Tornado sprinkler product, design, installation, hydraulic and maintenance services.

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Our hydraulic design linked to the production process of heap leaching using irrigation materials and implementing certified quality.

Anglo American: Los Bronces

Yuri Varas in the processing plant at the leaching stage - Inspecting copper anodes

that slurry is transported to the Las facilities are located. Due to the force of Tórtolas flotation plant, where copper and gravity with which the slurry travels from molybdenum concentrates are produced. grinding facilities at an altitude of some “There is no real problem crushing the rock 3,500m to about 750m above sea level (the at the altitude we do,” says Rasmussen, “but latter being the altitude of Las Tórtolas’ two the separation process involves water and flotation plants where copper concentrate is tailings. With so much of the time spent at finally produced) five choke stations were freezing temperature and below, anything installed along the pipeline route to slow the that relies on free access to water is going speed at which the slurry travels. to be a stop/start process at A key part of the initial some 3,500m.” project evaluation process was an environmental Therefore, the slurry impact study. This was (produced from ore ground carried out in 2006 and at both the new and old approved by the Chilean grinding plants) goes on a Slurry pipeline journey National Environmental roughly 54km ride down from grinding to Agency the following year. two pipelines to the valley concentration facility below, where concentration It considers the use of areas

54km

Mining & minerals | 249

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250 | January 2012

intervened to date and therefore does not affect other environmental assets. Most of the additional water needed for the new grinding plant comes from greater recirculation from the Las Tórtolas tailings dam to the mine. In comparison to the older mills, the new set-up is much more water efficient and the quantity of fresh water used per tonne of copper produced will therefore drop by an estimated 25 percent.

Being on the side of a mountain means that there isn’t much space to spare. In fact, one of the biggest constraints Rasmussen has is working in such a confined space.

“Effectively we are digging two pits,” he says, “although at some stage the ore bodies will merge and things will open up a bit more.

Then, because of the number of snowy days

Anglo American: Los Bronces

General view of the open pit at Los Bronces

we get, we have to maintain a sizable stock pile of ore to keep the crushers running during days when mining can’t take place.”

The one good aspect of Los Bronces’ location is that it is possible to commute if you are inclined to negotiate the mountain road on a daily basis. Rasmussen and some of the other managers usually take this option but for the majority of the 3,300person workforce (roughly 50/50 staff and

contractors) who work various shift patterns, daily life means staying at the Anglo hotel during the working week.

Los Bronces is just one of five operations Anglo American operates in four regions of the country with shareholding in a sixth, all managed from a head office in Santiago.

In fact, Anglo American is one of the most important copper producers in Chile. Its vertically integrated structure means the

“All supervisors must provide effective leadership on safety for those who report to them” Mining & minerals | 251

Andres Carrion inspecting the copper sheets

“The Emerge Program aims to give communities the tools needed to kick start new businesses” Group covers every aspect of the process internally - exploration, mining, processing and marketing of copper cathodes, anodes, blister and concentrates, molybdenum concentrate and sulfuric acid.

Once, safety in the mining business was treated in a cavalier manner – and still is in some parts of the world. But for an organization such as Anglo American, where any incidents that do occur are highlighted

252 | Mining & minerals

in the company’s annual report, safe working conditions are uppermost in everyone’s mind. “Managers are all held accountable for the safety of workers,” says Rasmussen.

“It is expected that all supervisors must provide effective leadership on safety for those who report to them, and acknowledge that good safety conduct is the responsibility of everybody working in the company. It’s their job to make technical inspections

Anglo American: Los Bronces

Working on the ore conveyor

in each work unit to identify places and personnel with the highest risk exposure.”

Being such an important part of the Chilean economy, Anglo American recognizes and honors its social responsibilities. Over the years, the company has developed its own methodology, in conjunction with an environmental consultant, on how best to identify, assess and manage the impacts of its operations on the surrounding communities.

It uses what is known internally as the ‘Socio-Economic Assessment Toolbox’ (SEAT) which helps identify the major issues in communities in the vicinity of mining operations and proposes efficient responses to their development. In fact, in 2004, the Casa de la Paz Foundation applied SEAT to all five operations in Chile, making

Pulp thickener at Los Bronces, Confluencia facility

it the first company within the Anglo American group to deploy this methodology across the board.

Since 2006, Anglo American has been running the ‘Emerge’ program, inspired by its experience in South Africa in 1980. The aim is to contribute to the economic development of communities near its operations by encouraging individuals to start their own commercial activities and to help existing small and medium-sized businesses to improve their performance. The scheme uses a mix of financial support and business development training and is currently operating in a dozen parts of the country. “The Emerge Program,” says Rasmussen, “aims to give communities the tools needed to kick start new businesses which not only support the

Mining & minerals | 253

Anglo American: Los Bronces

3,500 metres Altitude of Los Bronces mine

entrepreneurs themselves but also create wider employment opportunities.�

A key component of this program is the strategic partnership Anglo American has with Fondo Esperanza, an institution which grants micro-credits and provides business education to community banks or groups of 18 to 25 people who live in the same area and come together for mutual support. In each community bank, members must serve as co-guarantors, committing to pay back the loan. So if one defaults, the others must step in and make up the shortfall.

Other more conventional aid programs are also undertaken, such as work to eliminate shanty towns or the backing of organizations devoted to improving educational opportunities. Back at Los Bronces, though, with the Southern hemisphere winter just around the corner, Rasmussen and his team are pleased with the progress that is being made with the new installations constructed with the expansion, which is nearing the end of its first six months of working life and on target to meet production schedules.

The processing plant over looking the ball mill

For more information about Anglo American: Los Bronces visit: www.angloamerican.com

Mining & minerals | 255

256 | Mining & minerals

Exxaro Resources

Exxaro Resources is South Africa’s largest listed empowerment enterprise by a long way, a position it has consolidated in just five years of operations; and its mid to long term strategy is nothing short of visionary written by: John O’Hanlon research by: Robert Hodgson

Mining & minerals | 257

The new plant represents Exxaro’s expertise in coal treatment

Exxaro Resources

E

xxaro owes its very existence to a vision following the 2006 restructuring of the former Kumba Resources with the specific objective of increasing the spread of shareholders to include employees and people from ‘previously disadvantaged backgrounds’. The plan was to create a company to exploit the mineral resources that drive South Africa’s economic wealth for the benefit of all sections of the community. In five years it has grown to become by far the largest of such companies, completely dominating the strategically vital coal extraction and beneficiation sector and with a strong global position in heavy minerals and, through its 20 per cent interest in Sishen Iron Ore Company (SIOC), iron ore. Its turnover for the six months to 30 June 2011 was R9.6 billion, a 22 per cent increase over the same period in 2010.

In this short time Exxaro has expanded its portfolio of world-class assets in Africa and Australia, and with its joint venture Tiwest it is the world’s third largest titanium feedstock production company, poised to become a prominent force in its key commodities, and a respected global participant for its governance standards and business approach based on sustainable development.

If there is a temptation to think of coal and iron ore mining as industries belonging to the 19th century industrial revolution, then talking to Exxaro’s business development director Ernst Venter soon dispels that view. “We wanted to demonstrate that with the right skills mix and diversity,

Mining & minerals | 259

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Exxaro Resources

has decided to take a global view in deciding what sort of a company it aims to be 15 years on, in 2025, says Venter. “We looked at the way economic power is shifting fromTHIS the West to IS the East, and decided that in future, commodities would fall into three tiers.”

Tier one would include minerals such as coal, iron Partnering with Exxaro Resources on Drive Safety, Most Productiveore, Mining, at the Lowest Cost. sands and mineral copper—the focus for Exxaro over the next 10 years. Tier two minerals—a priority 10 to 15 years down the line—are those for which

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Mining & minerals | 261

THE FRASER ALEXANDER GROUP are able to integrate offerings across the mining and industrial value chain and, provide innovative total solutions deploying our wide range of capabilities and selectively customising to meet the exact needs of a customer.

OUR CUSTOM SOLUTIONS FOR EXARRO ABOVE RIGHT: 200 ton per hour DM Drum plant at Exxaro Resources NBC Colliery with the additional 200tph DM Cyclone under construction ABOVE LEFT: 150 ton per hour DM plant at Exxaro Resources Leeuwpan Colliery

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Exxaro Resources industrial demand (from Fraser Alexander the aerospace and energy Fraser Alexander Mineral Processing provides mineral industries, for example) processing solutions on a build, own operate and maintain is increasing rapidly. This (BOOM) or operate and maintain (O&M) basis to the coal, includes titanium and platinum, ferrometals and diamond industries. some of the rare earths, The Division is part of the Fraser Alexander Group, owned as well as titanium in

by Royal Bafokeng Holdings—making it a 100% BBE owned company.

Exxaro’s KwaZulu Natal and Exxaro Resources has contracted FAMP at two of its Namakwa Sands deposits operations, both on a BOOM basis. These are Leeuwpan in South Africa, and its Colliery, a 150tph cyclone plant that works in line with Australian deposits. And Exxaro’s jig plant, and NBC Belfast, a 200tph drum and Exxaro is already looking 200tph cyclone plant, upgrading ROM to produce an beyond that to its third tier— Eskom product. materials the world will www.fraseralexander.co.za require in 30 years’ time to enable industry to address economic megatrends like climate change and population growth.

This roadmap is designed to position Exxaro as a global player. When it was first listed five years ago, Venter points out, the company was capitalised at around $4 billion; today it stands at $9 billion, but its target is to achieve a $20 billion market cap by 2020. The starting point for this has to be coal and the strong position Exxaro has in the energy market, since it is the largest supplier of thermal coal to South Africa’s

“We want to be seen as a champion of change across Africa and globally”

Ernst Venter

Mining & minerals | 263

Exxaro Resources

“We will build on our coal portfolio, since we are very strong in bulk mining” power generation entity Eskom. “We will build on our coal portfolio, since we are very strong in bulk mining; and specifically in beneficiation and downstream through the value chain right through to the end use by our customers.”

Exxaro wants to play a greater part, though, in addressing Africa’s energy demand/supply gap than just by supplying coal for thermal power stations. “We decided there should be a place for us to play in the energy market and create an energy company that could thrive in a

Rail infrastructure needs improvement in some African countries

low-carbon economy. This will be a cleaner energy company with its focus on wind, solar, renewable energy and co-generation.”

Realistically, even though these solutions are expanding fast, massive amounts of coal will still Paterson & Cooke have to be burnt; but Exxaro Paterson & Cooke, since its inception in 1991, has become intends to make sure it one of the world’s leading slurry pipeline companies with uses clean coal technology offices in South Africa, the USA, Canada and Chile. Our such as CCTS (clean coal core competencies are based on a thorough understanding technology and storage), of slurry flow behaviour, and include clay behavioural Venter asserts. analysis, solid-liquid separation and the analysis and design of slurry concentrate and ore pipelines, thickened For the present, the and paste tailings pipeline systems, and mine backfill p r i n c ip a l r e v enu e s systems. We have extensive experience in the pumping of continue to come from coal mineral sands and have been closely involved with Exxaro’s extracted from mines like Hillendale Mine since commissioning, and continue to work Grootegeluk in Limpopo with Exxaro on their other mineral sands operations. province. Grootegeluk has www.patersoncooke.com a massive beneficiation

Mining & minerals | 265

Exxaro Resources

Massive amounts of coal will still need to be burnt

“We are currently the world’s third largest producer of pigment feedstock, and we plan to be the largest by 2025” complex where 9,000 tonnes per hour of run-of-mine coal is upgraded in six different plants. This is already the world’s largest coal beneficiation complex; but such are the demands from the industry, particularly the new Medupi power station that Eskom is building nearby, that its capacity is being doubled. The $1.3 billion Grootegeluk Medupi Expansion Project (GMEP) will increase throughput to 14,000 tonnes per hour, and supply

Medupi with 14.6 million tonnes per annum of coal for 40 years.

GMEP is much more than a feeder plant for Eskom, though. The deposit lends itself to a variety of different coal products for niche markets, principally related to metallurgical coal, says Venter. “We need to beneficiate and wash the coal to produce specific graded metallurgical coals for the iron and steel reduction industry and also the PGM (platinum group metals) industry in South

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Exxaro Resources

Even in South Africa, rail capacity is holding back exports

Africa.” The project will start delivering coal parts of Africa, such as Mozambique and in May 2012, increasing over the subsequent Botswana where the resources are immense, two-and-a-half years as Medupi ramps up. though some of the infrastructure like water “The plant has been designed on a modular supply and rail freight are wanting. Even in basis to spread the capital investment.”

South Africa, rail capacity is holding back The new plant represents Exxaro’s Exxaro’s ability to export, he says. “The accumulated expertise in coal treatment Richards Bay terminal has a throughput and it creates an opportunity by investing capacity of 91 million tonnes, with currently more capital in beneficiation only 68 million tonnes facilities to produce going through. We are busy more metallurgical coal, de-bottlenecking that and increasing its share of the we will be partnering with metallurgical coal market in the government to invest in our own rolling stock to get South Africa, in which it is Year Exxaro targets the coal out.” already the biggest player. It to become the largest also plans to increase its coal In the next 10 years producer of pigment Exxaro will turn its footprint in Australia, and to feedstock extend its activities to other attention to other tier one

2025

Mining & minerals | 269

“We must create our own future—not wait for it to create us—and build today the skills we will need tomorrow” markets. It wants to establish its own iron ore operations in Africa and Australia and get involved with ferromanganese production. “We are in a joint venture with Assmang, testing new technology that will enable us to treat low grade manganese ore and convert it in a more energy efficient way at nearly half the cost of the current technology.” If the demonstration plant under construction is successful,

270 | Mining & minerals

Venter hopes to see Exxaro entering the ferromanganese market by mid-2012.

To complete the tier one picture, Exxaro wants a presence in copper too. Joint ventures and acquisitions are probably the route to expansion in these non-core but strategic commodities; and in the case of copper, Exxaro will look for a company with assets close to production in Zambia or the DRC. The mineral sands business has

Exxaro Resources

The world’s largest coal beneficiation complex

strengthened since Exxaro listed, at which time it was performing poorly. “We believed that if we took a long-term view, the fundamentals would change; and indeed, prices for chloride slag and pigment feedstock that we produce have risen up to 40 per cent.” The business produces monazite that contains rare earth minerals and titanium-rich rutile, ilmenite and other minerals used downstream in the white goods industries that are booming with demand from India and China. “We are currently the world’s third largest producer of pigment feedstock, and we plan to be the largest by 2025.”

Exxaro’s foundations rest on dirty old coal—but it aspires to thrive in a low-carbon economy, so the business will have to look

very different in 15 years’ time. That’s less of a paradox than it appears. “To de-risk your launch into unknown territories like nanotechnology and nuclear power you need to relate your future strategy to your existing business,” says Venter. “We must create our own future—not wait for it to create us—and build today the skills we will need tomorrow. If we stand on the hill and look back in 2025 to where we started, Exxaro must be unique. It must have the look and feel of an innovative company,” he concludes.

For more information about Exxaro Resources visit: www.exxaro.com

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272 | Mining & minerals

OKD

Solid as a rock Operations at one of Europe’s largest coal producers are underpinned by strong customer relationships, the continued implementation of topclass training and safety measures, and solid revenues and reserves written and researched by: Richard Halfhide

Mining & minerals | 273

Klaus Dieter-Beck, CEO

OKD

C

oal represents the Czech Republic’s only significant indigenous energy resource; and as such, its importance to the economy in relation to export revenue and employment cannot be understated, and is as crucial today as it has been for the last two centuries.

OKD operates as a subsidiary of New World Resources Plc (NWR), headquartered in the Netherlands and one of Central Europe’s leading hard coal and coke producers. As well as OKD, NWR also owns OKK Koksovny, a.s.

(OKK), which is Europe’s largest producer of foundry coke. The company is listed on the London, Prague and Warsaw Stock Exchanges and can also be found on the FTSE 250 Mining Index.

Today, OKD produces coking and thermal coal, mainly for the steel and energy sectors, and is the only producer of bituminous coal in the Czech Republic. As such, it represents both the history and the future of this most traditional of industries. A nod to the past is hard to ignore: generations of men have mined the same area in the OstravaKarviná, in the east of the country.

“We are mining in old infrastructure: some of the shafts are close to 100 years old. The new shafts are 25 years old, but on average each is 40 to 50 years old,” says OKD’s CEO, Klaus Dieter-Beck.

The current operations of OKD are split between four operating mines. The Karvina and Darkov mines are the largest sites, with Karvina holding the title of the largest deep mine in the Czech Republic.

The CSM mine in Stonava and Paskov mine

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in the Staric area of Ostrava make up the other operating sites which when pooled together, offer a total reserve of about 200 million tonnes. It is not just the age of these mines that creates a challenge to those who work at them but also the diverse nature of the geology, as Beck explains.

“Our seams range from 80 centimetres up to almost eight metres in height, which poses its own challenges. Each year we go deeper and deeper. We are currently close to 1,000 metres, and it’s here that we face additional technical challenges in terms of air conditioning and rock pressure. In fact, we are in one of the most bounce-prone areas in the world.”

In many people’s eyes, coal mining still conjures an image of pick hammerwielding men with coal dust-covered faces, but today this could not be further from the truth. OKD has embraced the future and is rightly regarded as a truly modern company, utilising and often designing the latest technologies. Within the modern coal mining industry the greatest investments are generally split between new innovation for performance or for safety, although the two are intrinsically linked. If maximum efficiencies are to be realised, it is imperative that continual improvement be the watchword. This is not lost on Beck. “We are investing permanently in new equipment,

spending on average €200 million each year in CAPEX. This brings in new levels of technology for our investment programme, and it will also help develop new coal field access in the future. Our level of investment today has tripled from six or seven years ago, when I first came here.”

It is clear that OKD’s investment strategy has led the company into a bright and ambitious new era. Despite the rise of alternative forms of energy in some countries, coal remains the only viable

“Our level of investment today has tripled from six or seven years ago, when I first came here” 276 | Mining & minerals

OKD

The company invests heavily in safety programmes

energy source for both the energy and steel sectors in this area of Eastern Europe and this is something that will not be changing any time soon. By Beck’s own admission, “the long-term outlook six or seven years ago was not so bright, but there is now a different perspective. There are huge resources here: last year we exceeded 11 million tonnes again and we plan for the next 20 years to mine coal.”

One of the main foundations that enable OKD to plan for a profitable future lies in its relationships with its customers, which have been forged over many years. A key advantage that OKD’s operation has over many of its rivals is that it mines coking coal for the steel industry and thermal coal for power in equal measures, thus

creating a more flexible supply model.

The companies it supplies represent some of the major blue chip organisations in the region, all located within an excellent logistical infrastructure—companies such as Arcelor Mittal, Moravia Steel, US Steel, CEZ, ThyssenKrupp and voestalpine.

The latter recently granted OKD with an award in recognition of the relationship the two companies share, as Beck explains: “We were rewarded for being their Supplier of the Year. They know we deliver on time; and they are pleased with the quality. We talk, we meet, and we quickly eliminate any problems that arise.

After safety, the customer is our number one priority.” Beck speaks of simple and honest principles but there is no doubt

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that they are a recipe for success.

As Beck makes clear, the issue of safety should always be the main concern for any modern day mining house. This is especially true when mining underground to the depths witnessed at OKD’s properties. The company invests heavily in programmes to minimise the risk of accident and injury, one of its major initiatives in recent times being ‘SAFETY 2010’, which focused on

providing all staff with the very latest personal safety gear including hi-visibility work wear, personal lamps and detection devices—vital for the rescue of workers should an accident occur.

OKD is also well known for its Productivity Optimisation Programme (‘POP 2010’).

Between 2008 and 2010, POP 2010 saw OKD mines equipped with the most sophisticated gateroad and longwall technology, worth

“There are huge resources here: last year we exceeded 11 million tonnes again and we plan for the next 20 years to mine coal”

Operations underground

278 | Mining & minerals

OKD

Mining machinery in use

nearly CZK10 billion. All underground coal mining might be hazardous if not properly managed; but the workforce at OKD face additional challenges specific to the region, which are bounces related to the extraction of coal seams in connection with sandstone layers in between.

The fact that such natural geological conditions occur in this part of the world holds OKD up as an example to the wider coal mining community. Beck explains that OKD is not ‘shy’ when hiring expert consultants in the fields of rock mechanics, process improvement and training related to safety and new technologies. The unique conditions also mean that many international manufacturers approach OKD to request their equipment be tested in the

extreme conditions of its mines, in the knowledge that should equipment perform well here, it will do so anywhere else: a true testament to the workforce of OKD and the results it achieves.

Under Beck’s leadership, the short and medium term outlook for OKD is secure and it seems that everything is in place.

“We have solid customer relationships, an experienced and knowledgeable workforce and management team, a solid reserve and solid revenues every year—what else could you want?” he concludes.

For more information about OKD visit: www.okd.cz

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The future

is rosy... and white

The world wouldn’t be quite as white as it is without an expanding titanium mining operation in the wilds of Mozambique written by: Alan Swaby research by: Daniel Finn

280 | Mining & minerals

Kenmare Resources

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Loading of product into the Bronagh J

Kenmare Resources

T

hese days, when artists want a white on their palette, they usually choose titanium white.

It’s the brightest and most opaque white there is and is sometimes called the ‘perfect white’. But despite titanium having been discovered in the 18th century, its use as a pigment came far too late for the old masters or anyone, for that matter, painting before about 1920.

Today, though, six million tonnes of titanium dioxide are used as paint pigments, and in a host of other applications from tile glazes to toothpaste, and demand is growing.

So much so that one of the major suppliers of ilmenite and rutile—the two heavy minerals where titanium is to be found—is in the process of ramping up production by 50 per cent.

“At the current rate of production,” says Michael Carvill, managing director of Kenmare Resources, “we are sitting on deposits that could maintain mining here for 200 years. We are in the process of doubling our capacity which will take us from a seven per cent market share to around 10 per cent.”

The mine is literally in the middle of nowhere, 1,500 kilometres north of the Mozambique capital Maputo, in the province of Nampula, directly south of the Tanzanian border. In the 1990s, a freelance Czechoslovakian geologist identified the general area as promising and at his instigation, the Yugoslav government donated further geological investigation to Mozambique as a form of aid.

During the same sort of time scale,

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Spirals inside the WCP

Kenmare Resources Kenmare was developing a had already been sampled. portfolio of mining interests Our analysis, though, differed in various parts of the world. widely from the previous picture. The lease was Kenmare as a company dates back to 1972 when it cancelled and we bowed out.”

Current price of rutile raised capital to drill for E v e n t u a l l y, the per tonne oil near the Irish town of Mozambique authorities Kenmare in county Kerry. went back and asked Nothing ever came of this Kenmare to continue the and the company went dormant in 1986 exploration work, which resulted in huge until bought by Carvill and his partners— deposits of minerals being found along the largely because it was already listed on the coast that were further defined during the Irish stock exchange.

1990s. A feasibility study was completed Kenmare was invited to get involved with in February 2001 which confirmed its developing the Mozambique resources but commercial viability, yet it took another rather than jumping in with both feet, offered three years of work before a contract was to test the Yugoslav findings. “We drilled 22 placed in 2004 to build the Moma Titanium holes,” says Carvill, “right next to holes that Minerals Mine.

$2,000

V.SHIPS UK LIMITED V.Ships UK Limited is delighted to be a provider of ship management services to Kenmare.

The Glasgow-based company has managed Kenmare’s sophisticated self-discharging, selfpropelled barge Bronagh J since December 2007. The vessel is a critical component of Kenmare’s mining operation in Mozambique where she is required for the export of mineral sand to the larger export ships offshore.

In commenting on the particular challenges posed by a specialised vessel of this kind, fleet manager Alex Clark stresses: “Our 16-man Indian crew enable the vessel to provide a 24hour operation. This is particularly challenging due to the Bronagh J’s remote location, which means that the logistics of supplying the

vessel need to be overcome through very close cooperation and coordination with the owners to ensure optimum ship management service solutions are delivered.”

A further challenge is posed by the constant sea swell in the Indian Ocean. Alex explains: “Our masters need to demonstrate superior ship handling skills, particularly in manoeuvring the vessel alongside the loading pier. These skills are important to minimize downtime to cargo handling operations.” Each trip, the vessel loads about 3,800 mt based on four hours’ loading, two hours’ sailing to OGV, four hours’ discharge and two hours’ steam back to repeat the cycle.

E. contact@vships.com

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WE WANT TO BE YOUR PREFERENCE

PETROMOC E SASOL IS THE PREFERRED AND PROFITABLE FUELS MARKETING COMPANY, OFFERING VALUE, ADDING PRODUCTS AND SERVICES IN THE RETAIL, COMMERCIAL AND EXPORT MARKETS Petromoc e Sasol, SARL Tel: +258 21 300537/360301/360278 | Cell: +258 82 3226630/3001941 Commercial Sales Manager: Helder Madeira Email: hmadeira@pess.co.mz | Cell: +258 82 3067050 Retail Manager: Celestino Fabi達o Email: cfabiao@pess.co.mz | Cell: +258 82 3226650

Kenmare Resources “To indicate just how Petromoc e Sasol, SARL isolated this place is,” says Petromoc e Sasol, SARL (PeSS) is a joint venture between Carvill, “everything on the the Mozambican national oil company Petromoc, SARL, and project had to be taken to South Africa’s Sasol Investment Company, with the objective the site by ship because of optimising and developing resources and capacities to there are simply no suitable provide sales and marketing services to the market. roads or bridges to afford With retail outlets in Mozambique, we supply fuels and lubricants to our commercial customers in the mining, an inland approach. It was construction, industry, transport and fishing sectors. One of like some grand D-Day our successful contributions to the mining sector is the fuel landing. Just like D-Day, the and lubricants solution provided to the Kenmare operation at planners underestimated the Moma mine, where a pipeline, fuel storage tanks, loading the difficulty and the facilities and lubrication equipment were installed. The success contractor lost money on of this operation both in terms of quality and environmental what had been negotiated protection can be attributed to the good partnership that has been developed with Kenmare over the years. as a fixed price deal.” hmadeira@pess.co.mz The whole construction exercise proved unsatisfactory all round.

The plant didn’t function as it should and as well as the contractor being out of pocket, Kenmare also faced additional expenditure getting the plant fit for purpose. Now, though, it’s running smoothly and processing 22 million tonnes of sand a year from which Kenmare has the capacity to produce about one million tonnes of saleable minerals.

The mining process is based on the use of two dredgers, working in an artificial

“The mining process is based on the use of two dredgers”

Loading of product into the Bronagh J

Mining & minerals | 289

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Kenmare Resources

“We get relatively inexpensive electricity from the Cahora Bassa hydroelectricity plant” freshwater pond approximately 800 metres long, 300 metres wide and up to 15 metres deep. The dredgers make cuts at the base of the ore face with high pressure water jets, causing the loose ground to collapse into the ponds. The mineral-bearing slurry is pumped by the dredgers to a wet concentrate plant floating alongside. By running the slurry down a series of spirals, clean sand is separated out, leaving the heavier particles free for further processing. The heavy metal concentrate produced at the mine

Fatima Omar planting cassava as part of the mine’s rehabilitation

represents about five per cent by weight of the total sand mined.

“We opted for this form of mining,” says Carvill, “because it gives much lower cost of production compared to dry mining methods. The whole site is compact and slurry is Genmac pumped over relatively Genmac values the opportunity to be in a business short distances. Rather than relationship with a company such as Kenmare Resources. having to rely on expensive We thank Kenmare management for recognising Genmac diesel fuel, we get relatively as a contributor to their success in pursuing business inexpensive electricity excellence and continued growth. from the Cahora Bassa Genmac is an ISO 9001:18000 accredited multi-disciplined fabrication facility based in Richards Bay, Kwazulu Natal, hydroelectricity plant.”

South Africa. We supply not only locally, we also export From the pond, the slurry fabricated items throughout Africa and Madagascar, is then pumped overland up delivering either by sea or road. The majority of our clients to the mineral separation are repeat clients. Genmac earns customer trust by plant and stockpiled for three completing contracts safely to specification on time within or four weeks until it dries budget, every time. out naturally to around five www.genmac.co.za per cent moisture content.

Mining & minerals | 291

We designed for Africa Aveng E+PC Engineering & Projects Company provides comprehensive engineering design, procurement, construction management and outsourced operational services for multi-disciplinary engineering projects in the mineral processing and refining industries, across Africa and abroad.

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Building 30, The Woodlands, Woodlands Drive, Woodmead, Sandton 2191 Private Bag x159 Rivonia 2128, South Africa Tel: +27 10 205 1000 | Fax: +27 807 0143 | Email: Brendan.Creaven@e-pc.co.za

Kenmare Resources In the processing plant itself, Rohlig-Grindrod the final moisture is driven Rohlig-Grindrod provides professional and value-added off by heating the sands to solutions to projects of any nature. Our dedicated and 120°C. After screening to professional team has handled some of the most complex remove oversize particles and global projects, making the impossible possible by partnering remaining trash, the ore has with project experts who are leaders in their specific fields. to be separated into ilmenite We partner with the best because we understand the frustrations of delays, damages and costly sub-standard and rutile—the first being services. We are proud of our involvement with Kenmare magnetic and in the majority, Resources in the Moma Sands Project in Mozambique and and the latter non-magnetic. are confident of an ongoing successful partnership.

“The refining process, www.rohlig.co.za proper,” says Carvill, “consists of repeated passes through electrostatic separators, each time removing more and more of the waste. The technology is simple enough but it requires constant attention and a sensitive hand on the controls to keep the plant working at high efficiency.”

There is a third mineral mined at Moma, although unrelated to titanium. Zircon is an important raw material in the manufacture of ceramics that saw a doubling of prices during 2011. This may well slip back as demand in China eases but last year Kenmare did very well from the 44,000 tonnes it exported.

On the environmental front, Kenmare’s policy is to meet not only Mozambican environmental requirements, but all relevant Dredge mining at Moma

“We are in the process of doubling our capacity which will take us from a seven per cent market share to around 10 per cent” Mining & minerals | 293

MAKING MODERN LIVING POSSIBLE

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average lower switchroom heat

Lower switchroom costs and lower operating costs With Danfoss VLT Drives Compact VLT® drives designed as standard to meet typical mine site installation requirements are enabling Mining companies build smaller, lower cost switchrooms and helping manage their capital expenditure on new and expansion projects. In addition, the high efficiency and resultant lower losses of VLT® drives combined with an innovative back-channel cooling design enables the use of smaller, lower cost switchroom air conditioning systems, further reducing switchroom costs and resulting in significantly lower operating costs.

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Minelog remains very proud of it’s thirteen year association with Kenmare as a supply agent of goods and provider of logistical support services to deliver cargo by means of road, sea and air On this occasion we have pleasure in extending admiration for the substantial expansion project in progress and thank Kenmare for Minelog’s continued involvement and business support received.

Int phones & Faxes: +27(11) 918-6811 / 7989 E-mail address: minelog@telkomsa.net

Kenmare Resources international standards, Danfoss South Africa including World Bank Danfoss South Africa is proud to be associated with standards. Clean tailings are Kenmare Resources and its Moma Sands Mozambique straightforward to deal with plant. We believe that our VLT® Variable speed drives, due as the coarse sand settles to their reliability and efficiency, are a good choice given immediately. There is also the remoteness of the Moma Sands location. Danfoss a fine clay fraction (slimes) after-sales support, utilising service partners, enables us to support our products wherever they may be. that settles less quickly.

VLT® Automation drives received the Frost and Sullivan Slimes are deposited at the award for innovation and the iF Design award for their rear of the dredge pond user friendliness. where they are spread out www.danfoss.com for future rehabilitation.

As the dredgers mine the ore and the sand is deposited behind the mine pond, the pond gradually moves along and the land is rehabilitated. The course sand is contoured to match the surrounding geography and then covered with a layer of clay-rich slimes mixed with sand which helps the subsoil retain the necessary moisture and nutrients to aid re-vegetation. A final layer of stored topsoil—containing seeds, organic material and microorganisms—becomes home for a variety of plants and food crops.

2011 has been a good year for Kenmare.

At the start of the period, ilmenite was achieving about US$100 per tonne but by the end of the year, prices for 2012 deliveries were hitting $300 to $400 per tonne. It seems the industry is moving away from Aerial view of processing plant and mine pond

“We opted for this form of mining because it gives a much lower cost of production compared to dry mining methods” Mining & minerals | 295

multi-year pricing to a model of setting prices on a shorter term basis as demand outstrips supply. This is good for Kenmare, as is the rise in rutile prices—the other source of titanium oxide found at Moma.

In the same period, prices have increased from around $700 to over $2,000 per tonne.

“Despite the downturn in Chinese real estate,” says Carvill, “we consider that the market for titanium feedstocks will remain strong—at least in the mediumterm. Barring a precipitous drop in demand caused by another global financial crisis, it

is hard to see how supply tightness can be relieved for some time to come. Production here can be ramped up any time we choose in order to track increasing demand.”

This is all good news for Kenmare which is sitting on one of the better bodies of ore anywhere in the world. It’s of a good mineral grade that doesn’t need to be upgraded before use and the mining operation is blessed with cheap power, abundant fresh water and no costly overburden to remove.

With its own loading jetty in the backyard, Kenmare can ship product to customers at

“Production here can be ramped up any time we choose in order to track increasing demand”

Dredge mining at Moma

296 | Mining & minerals

Kenmare Resources

Wet concentrator plant and dredges operating at night

minimum cost.

This means that the go button for phase II of the site’s development—a 50 per cent increase in capacity—has now been pressed and is well underway. “The expansion will be a half scale mirror image of the dredgebased mining operations that already exist,” says Carvill, “which will give us the possibility of another ramp-up in production as soon as we identify that supply is being outstripped by demand.”

As well as increasing throughput by putting in another bank of ilmenite separators, the processing plant is trying to remove some cost elements by installing a wet high intensity magnetic separation circuit at the front end. This equipment is in common use within the mineral sands

industry and will replace the dry primary separation stage and its associated costs by separating magnetic and non-magnetic fractions within the heavy mineral concentrate while in a wet state.

Expansion will increase design capacity by approximately 50 per cent all round, resulting in an increase in production of ilmenite from 800,000 tonnes per annum (tpa) to 1.2 million tpa; zircon from 50,000 tpa to75,000 tpa; and rutile from 14,000 tpa to 22,000 tpa. The $300 million expansion project is well underway and already the beaches once again resemble D-Day as heavy pieces of equipment are landed by sea—the roads still remaining not much better than they were.

In other respects, too, the area is

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Kenmare Resources Loading of product from Bronagh J to customer’s vessel

benefitting from Kenmare’s presence. Since 2004 it has sponsored the Kenmare Moma Development Association (KMAD)—an independent not-for-profit development organisation which supports and contributes to the development of the communities close to the mine.

While Kenmare contributes most of the cash needed, it does so with help from other aid bodies and voluntary involvement of Kenmare’s employees both in Mozambique and Ireland. KMAD focuses on three categories of projects. First, it facilitates economic opportunities by encouraging local farmers to provide the food the mine needs. Then, it sponsors ongoing education programmes designed to slow the spread of HIV/AIDS, a serious problem in Mozambique as in so many African countries. The final strand in KMAD’s contribution is to do what it can in improving rural infrastructure.

Based on community needs, it contributes to health facilities or school resources. Anxious not to create any white elephants, KMAD will only become involved with a project when it is clear it has a sustainable future.

The world over, rural areas tend to be at the bottom of the food chain, but with the size of Kenmare’s resources in Mozambique there could be a little part of Ireland there for many years to come, making a contribution to the country as a whole and the local community in particular.

For more information about Kenmare Resources visit: www.kenmareresources.com

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A market for quality

300 | Mining & minerals

Andalusite Resources One South African mining company is producing a refractory material on whose properties the world’s iron and steel producers depend written by: Alan Swaby research by: Robert Hodgson

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Maroeloesfontein site

Andalusite Resources

I

n the production of iron and steel, refractory materials fall into the category of consumable commodity—hovering somewhere in the background until all the glamorous hard work has been done and the melted, smelted, refined liquid metal needs moving in a refractory lined vessel from one part of the plant to another.

One of the interesting aspects of these heat-resistant materials, though, is the rate at which they are consumed. Japan is the most frugal, requiring on average just six to eight kilos of refractory material per tonne of steel produced. Germany is not far behind with an average of eight to 10 kilos per tonne of steel. China, on the other hand, is much more profligate. There, an average tonne of steel gets through 25 to 30 kilos of refractory.

“There are numerous refractory materials that can be used,” explains Andreas Pabst, sales and marketing director of Andalusite Resources of South Africa, “and once chosen, there is a strong resistance to change. So despite the obvious superiority andalusite demonstrates in Japan and in Europe, in some parts of the world it is a slow process weaning them away from what they know.”

Andalusite, as your Spanish geography might suggest, was first discovered in southern Spain about 150 years ago. Then, though, it was in the form of a gemstone.

The South African version has also been known for many years but it doesn’t have the same aesthetic qualities as its Spanish cousin. In fact until the 1970s, there was no known use for it. Until, that is, the Weedon family began its pioneering work

Mining & minerals | 303

Andalusite Resources of marketing andalusite as PANalytical a refractory material. Since PANalytical is the world’s leading supplier of analytical then, it has been positive— instrumentation and software for X-ray diffraction (XRD) albeit slow—progress to the and X-ray fluorescence spectrometry (XRF), with more than position it holds today. half a century of experience. The materials characterisation “The refractory industry equipment is used for scientific research and development, is understandably extremely for industrial process control applications and for semiconductor metrology. cautious and conservative,” From our offices in Ferndale, Randburg, South Africa, we says Pabst. “Should anything offer the full solution to the analytical X-ray market, both they supply not fulfil its job in X-ray diffraction and X-ray fluorescence. We have three and the refractory fail to highly trained sales engineers, eight customer support contain its load of white hot engineers and two resident application chemists. liquid metal, the financial www.panalytical.com penalties could be enormous; the risk of human injury has to be avoided. As such, it is not unusual for it to take up to 18 months for a new refractory to be assessed and approved.”

Andalusite is an ideal refractory material.

It has high thermal shock resistance so can take the temperatures and fluctuation found with molten metals and ceramics. It has an ultra-low expansion rate so doesn’t crack; and unlike some materials, it has a high chemical resistance—in other words it does not react with other materials while exposed to the extreme conditions of heat

72,000 tonnes

Andalusite Resources’ current annual production Washing the ore

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GROW TH | STABILIT Y | QUALIT Y ASSUR ANCE

MINING & SLURRY TECHNOLOGY (PTY) LTD The challenge of designing, manufacturing and marketing the Buccaneer™ range of pumps has been an exciting journey for Mining & Slurry Technology (PTY) Ltd. Our key success factor has been improving wear resistance in corrosive and abrasive slurries, resulting in extended wear life. Enhanced efficiencies also contributed to reduction on total life cycle cost and improved pump reliability. The Buccaneer™ range of pumps, engineered and manufactured in South Africa, provides the lowest cost of ownership to end users across all slurry pump applications.

Further development of materials used in the construction of the Buccaneer™ pump wearing parts resulted in the new developed SH46™alloy. SH46™ is a material formulated by Mining & Slurry Technology (PTY) Ltd to outlast all previous chrome formulas for wear parts used in abrasive pumping conditions.

The Buccaneer™ Pump range offers the SH46™

material as a substitute to all 27 per cent chrome parts, which are standard on most slurry pumps.

This statement was put to the test on site and SH46™ impellers were installed at Andalusite Resources in RSA. Standard 27 per cent chrome impellers lasted for 10 to 15 days while the new SH46™ impellers operated efficiently for 25 to 28 days.

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ANDALUSITE Resources RESOURCES Andalusite and pressure as reign in says financial director Colin ladles and furnaces.

Bain. “The andalusite is Historica lly, South found in decomposed shale Africa’s deposits of and requires no blasting. andalusite were found in At its widest, the ore body the east of the country, is 800 metres wide and we are mining open cast producing a course crystal down to about 35 metres. of up to eight millimetres.

The ore body goes much In the 1990s, Rhino Minerals began looking deeper but below this level in the west and found Andalusite is found in there are more impurities to considerable deposits of decomposed shale contend with that make the a finer grained material. extraction uneconomical.

Andalusite Resources’ mine, 220 kilometres Once a further two leases that we are north-west of Johannesburg at a place applying for are granted, we will have called Maroeloesfontein near the town of enough reserves to last a hundred years.”

Thabazimbi, is adjoining the Rhino leases.

Four metres of overburden need to be “It’s not a difficult mining operation,” stripped away, leaving the ore to be dug

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Mining & minerals JULY 2012| 307 |2

DMS Powders - the worlds leading supplier of ferrosilicon DMS Powders provides ferrosilicon powders for application in dense media separation (DMS) technology, through a highly sophisticated production process.

The DMS technology can be described as making up a suspension of dense powder in water to form a type of ‘heavier liquid’ thereby separating mineral / metal particles in a sink-float process, as applied in modern dense media plants. The dense medium powder is subsequently recovered and reused.

By means of strict quality control standards we produce a product with the following benefits: • Corrosion resistance • Abrasion resistance • Magnetic properties allowing easy recovery and de-magnetisation • High specific gravity • Economical operating costs

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Andalusite Resources out by two excavators—one of 70 tonnes capacity and Our production expertise is coupled with experienced another of 20 tonnes. A fleet product technical support, long-term customer of 30 tonne trucks ferry the relationships and an intimate knowledge of global logistics. ore just one kilometre to Today, DMS Powders is the largest global supplier of both the processing plant. The Atomized and Milled FeSi with a production capacity ore contains around 12 to of 42000tpa. Our products are produced with proven technology and precision, at our facility in Meyerton, 14 per cent andalusite and 45km south of Johannesburg, South Africa. the extraction process is www.dmspowders.com essentially one of crushing, washing and screening.

However, before any of this starts, run-ofmine ore has to be stockpiled separately as the andalusite varies subtly from location to location. Considering that the composition of the finished product is so critical, considerable care is needed at every stage to ensure optimum quality. Stockpiled ore is continuously sampled and blended before going into a feed hopper. Conveyors take the ore through a series of crushers designed to release the andalusite gradually without shattering individual crystals which, at Maroeloesfontein, stop at three millimetres.

Although as the mine expands further north, the crystallography becomes coarser, and in the not too distant future Andalusite Resources will be able to offer a coarser grade andalusite too.

dms powders

220 KM Distance of Andalusite Resources’ mine from Johannesburg Crushing plant

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Bell wheeled loader

“We have a superior, high quality product but still take a pragmatic view, aware that there is considerable competition within the market” At the end of this sequence is a 40 per cent concentrated slurry which, once it has gone through a bank of cyclones, is enriched to 98 per cent. The final part of the process is to magnetically remove any iron particles that remain, after which the product is bagged ready for despatch.

All the andalusite mined is taken by customers in the refractory industry with

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around 60 per cent going to iron and steel manufacturers. Upwards of a quarter of annual production goes to the local southern Africa market, another 30 to 40 per cent goes to Europe and the balance travels east. Steel makers in Japan have been among Andalusite Resources’ best customers and consistently take around five per cent of production.

“Japan is a very sophisticated market,”

Andalusite Resources

Employees at work

says Pabst. “They were among the first to recognise the benefits of using andalusite and have proven very loyal. Chinese and Indian manufacturers, on the other hand, are still more inclined to buy on price and consequently buy something inferior. We have a superior, high quality product but still take a pragmatic view, aware that there is considerable competition within the market.

Nevertheless, there is much more we could do in those markets providing we explain the benefits to be had from andalusite.”

Last year production was expanded and could be lifted very quickly from the current 72,000 tonnes per annum to 100,000 tonnes. At the moment, though, Andalusite Resources is in cruise mode

View of the mine

and holding back on any increase in output, conscious that there is a trend towards consolidation within an over-supplied iron and steel industry. Instead, the emphasis is on improving quality and developing new products. “We are working closely,” says Pabst, “with German refractory engineers Mine Feuerfest, who are helping us develop new applications which could replace strategically important minerals currently sourced from countries that have a question mark over the reliability of supply.”

For more information about Andalusite Resources visit: www.andalusiteresources.com

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GTA Resources & Balmoral Resources

A golden opportunity Exploration companies GTA Resources and Balmoral Resources have just announced an exciting set of drilling results for their Northshore Gold joint venture. Peter Clausi and Darin Wagner discuss relationships and teamwork in this rapidly developing story

written by: Gay Sutton research by: Jon Bradley

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Caly North Trench at Northshore

GTA Resources & Balmoral Resources

T

he Canadian mining industry is riding on a surge of dynamic growth. With skills in short supply and fierce competition for exploration opportunities, it can seem a cut throat business, yet there is a surprising degree of collaboration between companies and individuals. “We are all competitors in the same space, but we all face the same challenges,” commented Darin Wagner, CEO of Balmoral Resources.

“And that keeps drawing the long-term players in the mining and finance industries together. The advantage of knowing so many experienced people is that you know who is good to work with. You then keep those relationships alive.”

Exploration companies GTA Resources and Balmoral Resources are an excellent example of this, and their collaborative joint venture is now yielding exciting results.

Both companies are relatively young. GTA’s IPO was in 2008, and Balmoral was formed in 2010 after acquiring the Canadian assets of American Bonanza.

“In early 2011 Balmoral made a series of new discoveries on the Detour gold trend in Quebec,” Wagner said, “and we felt our Northshore Property, located in different belts and with different mineralisation, was something of an anomaly in our holdings.

So it was logical for us to look for a third party to come in on it.” Where better to begin than within this network of trusted past colleagues and contacts? Financially very tightly run, GTA is staffed by a team of highly experienced geologists that Wagner has worked with in the past.

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For GTA, Northshore was certainly prospective, being located in Ontario’s prolific Hemlo-Schreiber greenstone belt only 70 km west of the 21-million ounce Hemlo deposit. The high-grade vein system on the northern part of Northshore had been mined during the 1930s, producing 3800 tonnes of ore grading over 21 grams of gold per tonne. “We knew that the Main Vein to the north had fed a mine in the 1930s,” Commented GTA’s CEO Peter Clausi.

“Our field team concentrated its technical due diligence on the southern half of the property. Part of technical due diligence is to take grab samples, which in our case confirmed mineralisation at surface, with the best of these grading at 7,520 g/t.” With those results, GTA and Balmoral quickly closed on the option agreement.

The relationship is based on two options.

Under the first option, GTA must spend $2.5 million in exploration and make a series of cash and share payments to Balmoral in return for a 51 percent interest in the property. The second option begins once the first is completed, whereby GTA can increase its share of Northshore to 70 percent in return for further cash and share payments to Balmoral and by spending a further $3 million in exploration.

“Once the second option has been completed,” Wagner said, “the agreement

then becomes a participatory joint venture where each of us will fund our relative interests in the program.”

GTA, in its role as the operator, conducted surface work during the summer of 2011 and drilling began in October. A total of 12 holes were drilled, the deepest of which extended 120 meters and the shallowest just 35 meters.

This was a fairly shallow drill program which confirmed continuity between the high grade Caly, Caly North and Audney vein systems. The highlights from the Audney

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GTA Resources & Balmoral Resources

Core sample from Northshore

Vein include intercepts of 2012. Those holes (13 and 13.23 g/t gold over 6.5m, and 14) confirmed the continuity bonanza grade intercepts of of the mineralization down to roughly 170 metres, and 131.99 g/t gold over 0.5m and along strike to 200 metres.

10.28 g/t gold over 4.3m. The IPO GTA’s Five further holes have Caly Vein System returned been completed, with the intercepts of 12.49 g/t assay results pending. The gold over 33.8m including a bonanza grade intercept of 760.15 g/t strategy is now to explore the continuity of gold over 0.4m, 17.25 g/t gold over 4.5m and the mineralisation at depth and width. “But 14.94 g/t gold over 4m. no battle plan survives an encounter with the These results were very well received. enemy,” Clausi commented, “so our technical When they were announced in February team has the mandate to make decisions on this year, GTA’s share price rose by 800 per the ground about spotting of holes, the angles, cent in one day. the depth, how to engage local communities GTA has already started the second at a grass-roots level, and so on.” round of exploration, with the results from That technical team is led by VP of two further holes announced on April 18, Exploration Robert Duess, a highly

2008

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CEO Peter Clausi and VP Exploration Robert Duess visit Auden

John McCoach, Pres James Macinto

“It might ultimately be the high-grade core of the deposit that becomes the focus of our mine development” respected geologist and engineer who is also a technical advisor to Balmoral Resources.

The quality of his technical team is another of GTA’s strengths. “We have a team that knows how to take a project from early stages through to fruition, and to make decisions as situations arise. We also have a very supportive, involved board of directors contributing to the team’s success.” Again, teamwork and relationships seem to be

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recurring themes underpinning this successful operation.

Financially, GTA is in a very strong position. In March this year the company closed a $5.9 million financing with a syndicate led by Laurentian Bank Securities, with Union Securities and EuroPacific Securities also making strong contributions.

“As a result, we are extremely well funded for the next round of exploration and beyond,”

GTA Resources & Balmoral Resources

sident of TSXV, and GTA Director osh at the TSXV listing ceremony

Clausi said. The company has always been very tightly run and today has just over 24 million shares issued and outstanding, and a total of $6.2 million in the bank. This will be more than sufficient to finance the second and third rounds of exploration as well as working capital.

“Based on the encouraging results of exploration to date, our strategy is to earn the 70 percent interest in Northshore,” said Clausi. “Further decisions on the future of the property will then be made based on the results of the second and third rounds of exploration.”

Throughout this process, Balmoral has not been a silent partner. In the last eight years the Balmoral team, operating under different company names, has been directly

Robert Duess on Northshore, at the Caly Vein

responsible for or associated with the discovery of about 4.5 million ounces of gold, 200 million ounces of silver and 7 million ounces of platinum. “We’re simply offering the experience factor,” Wagner said. “We have been able to facilitate introductions to drill companies, provide conceptual direction to the drill programmes and insight into market reactions. It’s been a comfortable working relationship.”

One of the areas where Balmoral has been able to bring considerable experience to bear is in building strong working relationships with the local First Nation communities—a complex and sensitive task. “It’s not only about respecting the rights of the local people, but also respecting their way of life,” Wagner explained. Acknowledging

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GTA Resources & Balmoral Resources that every community will want something slightly different, he pointed out that their needs are more often to do with respecting and preserving the environment, wildlife and sacred sites rather than providing money and employment. “So it’s a matter of coming to grips with the challenges in the community, and making sure they understand what we do, how we do it, the timeline and so on.

If you get this right and your exploration is successful, then the goodwill will pay dividends as you move forward. You will have partners working with you.”

Early results from Northshore have demonstrated a sizeable gold system that contains both low and high grade elements. GTA is crafting the next rounds of exploration to define the extent and grade of these systems, and to give some insight as to how best to approach mine design and development.

“Looking four or five years out, I don’t think there’s any doubt there will be a sizeable tonnage of lower grade material at Northshore,” Wagner summarised. “But it might ultimately be the high-grade core of the deposit that becomes the focus of our mine development. To have both elements in the system and to have them openended at this point in time is the exciting prospect for both companies and the local communities. It’s an evolving story, and the opportunity for all of us is large.”

For more information about GTA Resources & Balmoral Resources visit: www.gtaresources.com

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PMI Gold Corporation

A golden prospect Adansi Gold Company, a wholly owned subsidiary of PMI Gold Corporation, is one of the most exciting gold mining companies in Ghana. With resources that are causing investors’ hearts to race, it is set to become a very important midtier producer in just a couple of years written by: Jane McCallion research by: Lucy Bendall

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W

ith 14 landholdings in management, focus shifted from Kubi to across two gold belts, the Obotan project, which was aggressively Adansi Gold Company drilled out to the resource level.” is one of the largest gold Obotan is now the flagship project of exploration enterprises Adansi Gold and PMI. Located on the in Ghana. Headquartered in the Ghanaian Asankrangwa gold belt, it is made up of capital Accra, the company is a wholly three main concessions—AboreAbirem, owned subsidiary of PMI Gold Corporation Abore and Edubia. “In the AboreAbirem of Vancouver, Canada. PMI is listed in concession we have the Nkran and Adubiaso Canada and Australia and all its activities pits, then we have Abore pit in the Abore are currently focused in Ghana. concession, and finally we have another Adansi’s 14 landholdings (AgyaakaManso, green field deposit called Asuadai situated Manhia, Juabo, Diaso, New Obuase, in the Edubai concession,” says Amoah.

Afiefiso, Kaniago, Obotan, “The Nkran, Adubiaso and Switchback) and Kubi, Abore pits were previously Dunkwa-Gyimigya and mined by Resolute Mining.

Gyimigya are located in the They stopped mining in these pits in 2002 because Asankragwa and the Ashanti gold belts. They include both the pits were getting deeper, prospective and historical operating costs were getting mines, with Obotan and higher, and the gold price Amount PMI raised Kubi as the flagship and was low, all of which are a on Canadian stock recipe for a mine to close. second projects. exchange, 2007 Adansi has been Adubia, on the other hand, is exploring for gold for nine more or less green field and years in Ghana, but in 2007, when PMI has never been mined before, although we raised approximately $7 million on the know there is a deposit there.”

Canadian stock exchange and in the same The highlight of the Obotan project so year raised $27.5 million on the Australian far came in October last year when an NI stock exchange, things really started to 43-101 and JORC compliant resource was take off. With the raising of funds came a announced that led to the listed resource change in the board of directors, which led tripling. This in turn triggered investor to a change in project focus. “Before this interest in Adsani/PMI. “Up until this period, the directors had the Kubi project as point, although we had been doing all the their main priority,” explains Adansi’s vice normal press releases and all the normal president of Exploration, Thomas Amoah, exploration notices, we hadn’t caught the eye “but in 2007 when this money was raised of the market,” says Amoah. “But when this and there was a change in the board and resource was put out last year, it brought the

C$7

Million

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PMI Gold Corporation

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PMI Gold Corporation total resource to 3.2 million Reflex Drilling ounces and the attitude of Reflex’s emphasis is on a personalised service to the market changed.” deliver drilling programmes that achieve the client’s There is a further 28,000 targets. We integrate advanced drilling equipment metres of drilling that has and experienced personnel to deliver optimal results. not yet been included in the Reflex’s roster system allows the provision of a 24/7 resource, as it is still waiting service, necessary to complete the client’s programmes with time effective efficiency. for laboratory analysis, but On-site personnel are experienced professionals who Amoah does not expect are selected not only for their technical skill but also for their inclusion in April to their ability to communicate clearly and interact well with make any dramatic changes client representatives at all times. to the value or scope of the www.reflex-drilling.com resource. “Although we have all these numbers of metres to be added into the resource, I’m not expecting a huge rise in the number, only because these are all in-fill drilling, so it will add more confidence, rather than mark a dramatic change,” he explains.

The pre-feasibility study, published in January this year, shows a measured and indicated resource of 32.17 million tonnes of ore at 2.4g/tonne of gold, which translates to 3.2 million ounces of refined gold. A definite feasibility study should be released in quarter two of this year and is expected to demonstrate roughly the same figures.

“We are targeting production for 2013/2014 and we expect to have our first gold in 2014,” says Amoah. “We have to Machinery on-site

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keep in mind that this is an old pit, though, and we have about a year of pre-stripping to do before we start producing ore, so mining will start well ahead of when we start producing.”

The Kubi project is the second priority project after Obotan and is situated on the Ashanti gold belt in the central region of Ghana. The main deposit contains roughly 203,000 ounces of gold at 5.48g/tonne measured and indicated and 150,000 ounces of inferred gold. Adansi is exploring the property in the expectation that further resources will be found and Kubi will become a second production centre.

“Kubi is another mined out pit, which was mined out by AngloGold Ashanti, so it’s one of the old pits we’re trying to redevelop,” explains Amoah. “We’ve done a lot of auger drilling around the main deposit and this came up with a lot of drill targets, which are currently being tested with an air core drill rig. We also have a diamond rig in there drilling. The aim is to have a standalone project there, so we’re looking at three million-plus ounces of gold in the Kubi project to enable that.”

To ensure that it is able to get the most out of its resources, it is crucial that the geologists working for Adansi have access

to the latest equipment and training. “The geologists are currently undergoing a series of technical training. The next one is coming in late May, where we’re going to have them being trained in Gemcom software, which will enhance their professional capabilities.

We recently had one do some training in Datashed too, which is our database software, and we actually had to bring in an

“Our training at the moment is aimed at getting our geologists to do what they do in a better way and enhance their technical capabilities” 328 | Mining & minerals

PMI Gold Corporation

Visible gold in altered meta sediments

expert from London to come and train her in that software. So our training at the moment is aimed at getting our geologists to do what they do in a better way and enhance their technical capabilities,� explains Amoah.

Additionally, the company is bringing in an XRF for multi-elements detection to aid in identifying pathfinder elements, especially in the Asanco projects.

The company is also committed to acting as a responsible corporate citizen. Under its environmental impact assessment, which will be published in June, Adansi will set out how it plans to return the mine sites to their original state once they are closed, and to invest in the local community while they are open.

Looking forward, Amoah is very hopeful for the future of Adansi. “We have a very good, highly prospective landholding, an experienced management and board in place and a strong cash balance; these are the three ingredients you need to grow a company and we have them. By 2017, we will be a mid-tier with at least three operating mines in Ghana and maybe some elsewhere in West Africa too. With those three ingredients in place, I see no difficulties in achieving this aim.�

For more information about PMI Gold Corporation visit: www.pmigoldcorp.com

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Rare find

written by: Alan Swaby research by: Jeff Abbott

330 | Mining & minerals

Peak Resources

The role of junior exploration companies is to find something to mine; but there is one such company planning to use the finds it has made to transform into a major mining operation

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Drilling on the south east side of Ngualla Hill

Peak Resources

W

hile rare earths are nowhere near as rare as their name implies—cerium, for example, is present in similar quantities to copper—they don’t make commercial extraction easy. They are often widely dispersed and lack the concentration needed for economical exploitation. And even where minable deposits are found, the metallurgy involved in claiming the minerals is often highly complex.

Of all the world’s sources of rare earths, by far the most plentiful is found in China but for the past few years, the Chinese have been restricting exports. Not surprisingly, then, in rare earth circles, a new and plentiful source is bound to create interest.

Such is the case in Tanzania, where Australian junior exploration company Peak Resources, after a long and winding road, has stumbled across what is shaping up to be the fifth largest rare earth find in the world outside of China.

“Peak Resources,” explains managing director Richard Beazley, “was launched on the Perth stock exchange in 2006 as an exploration company, looking for gold.

When Alistair Hunter joined Peak [Hunter is now company chairman] he brought with him gold leases from Tanzania.

Once we landed in Africa, the search soon widened to phosphates, which the Canadians had earlier identified. But after two exploratory drill holes at Ngualla, we found indications of rare earths

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and with that, adopted a complete shift in approach.”

Rare earths are collectively a group of elements that essentially make up the second bottom row of the periodic table.

There are 15 such elements, ranging from light to heavy atomic weights with the heaviest the most difficult to separate and the most costly to buy. They tend to group themselves together and offer numerous properties for use in today’s technologies.

Rare earth magnets, for example, are nine times more powerful than ferrite magnets and are finding applications as tiny magnetic medical tools for use inside the body or in hybrid vehicles or wind turbines.

Other rare earths are particularly useful in polishing the finest optical surfaces; while others have fluorescent properties ideal for communication equipment such as TVs and mobile phones.

The site at Ngualla is still virgin bush.

In late February, after just 18 months of drilling, the company issued a maiden resource statement defining a resource of 170 million tonnes of rare earth oxides at 2.4 per cent; and within that body a high grade part of 40 million tonnes at 4.07 per cent. Since then, more infill drilling has been conducted, with the ongoing data

The team on Ng

indicating continuing positive high grades.

So much so that Peak Resources is now morphing from a junior exploration company into a mining operation. The first step in this process, just seven months ago, was the appointment of Beazley as managing director who brought with him considerable mining experience, particularly in the development of new green field sites. In turn, Beazley has made

“Rare earths have always involved complex metallurgy but we are confident that ours will be as simple as it’s possible to be” 334 | Mining & minerals

Peak Resources

gualla Hill - left to right - Patrick Ochieng, Sam Boucaut, Erasto Kafyulilo, George Mwarabu and Emmanuel Kisendi

his first major recruitment confident that ours will be decisions, bringing on as simple as it’s possible board an experienced to be. The ore body is rare earth metallurgist relatively clean and we who will be instrumental are confident of being able Resources Year Peak in defining the f low of to avoid the need for an launched on Perth Stock material through the plant expensive flotation plant or Exchange other processes to clean up and a chief development the ore before processing.” officer who will manage the balance of the studies Instead, after mining that are needed and begin commercial and blending on a ROM pad, the outline development. plan will involve grinding the ore down to “We are just a few weeks away,” says 100 microns, mixing it into a slurry and Beazley, “to being able to release a detailed then stripping out the rare earths through process flow sheet or diagram on how we a low concentration, low temperature will process the mined ore through to sulphuric acid leaching cycle. Even then, finished product. Rare earths have always the investment needed to bring the plant involved complex metallurgy but we are on stream will be well in excess of half a

2006

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Erasto Kafyulilo (geologist) and Dave Hammond (technical director) on Ngualla Hill

“The most important factor by far is the nature of the ore body we are working with and its low levels of impurities” billion dollars and Beazley is currently in exploratory talks with potential offtake partners who could be instrumental in raising the funds. As a junior mining company, the ability to raise the money to go it alone is simply out of the question and it will need some of the world’s biggest organisations—and users of rare earths—to underwrite construction.

Apart from the underlying excitement

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of having such a potentially rich source of rare earth minerals, the industry is shaking its collective head at the audacious timescale that Peak Resources is publically claiming is achievable. “All the other rare earth mining projects have taken years, if not decades,” says Beazley, “and we are telling the industry that product will come on stream by 2015 or 2016 at the latest.

Insiders are saying that this is impossible.”

Peak Resources

Richard Beazley

Onsite sampling at Ngualla

Nevertheless, Peak could The next stage of the process, as well as a well show all its detractors complete understanding that they are wrong. For of the variability of the example, the lab work ore body, will be further necessary to prove the Number of elements complex chemical extraction proof that the metallurgy classified as rare earths process often takes years to is understood. This will finalise and yet Peak has involve a pilot plant which accomplished this in just can demonstrate that eight months. “There is still some R&D work the five product groups of rare earths to do,” says Beazley, “because no rare earth that Peak Resources is initially targeting body is ever the same. But our timescale is can actually be extracted in the way realistic. We aren’t breaking new ground but that it believes. building on what is already known. But the most important factor by far is the nature For more information about of the ore body we are working with and its Peak Resources visit: low levels of impurities. Immediately, this www.peakresources.com.au cuts out half the time and half the capex.”

15

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In the 15 months since listing on the Australian Securitie junior exploration company Radar Iron (ASX: RAD) has pipeline of iron ore prospects in the Yilgarn region of We Managing director Jonathan Lea discusses the thrill of t written by: Gay Sutton research by: Vincent Kielty

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Radar Iron

es Exchange, s established a estern Australia. the chase

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R

adar Iron is a relative newcomer to the mining sector, but in the 15 months since it was spun out of Transit Holdings, exploration has yielded some exciting results. Key transport infrastructure developments are also scheduled to come on line at precisely the point at which Radar expects to reach its development phase in 2014, firmly positioning the company as a future Yilgarn producer of note.

The company launched on the Australian Securities Exchange in December 2010 with three primary assets: the mineral rights for the prospective iron ore tenements of Johnston Range, Die Hardy and Evanston.

Located close to one another in the central Yilgarn region of Western Australia, they border the already highly productive Cliffs Natural Resources iron ore mines.

“There are three things you need for an iron ore mine. You need a resource in the ground, a transport corridor and a market,” explains managing director Jonathan Lea. “Many projects in Australia have reasonable resources in the ground but no way of transporting the ore out of the country efficiently and economically. Here in the Yilgarn we have a government-owned railway line just south of us, and two ports currently exporting iron ore.”

The transport infrastructure in the Yilgarn is not only well established, but it is in the process of being upgraded to support the rapidly expanding mining industry.

Radar’s tenements lie approximately 100 kilometres north of the rail heading at Koolyanobbing, which is already used by

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Magnetite banded iron outcrop, Johnston Range

Radar Iron

RC drilling, Die Hardy Range

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Cliffs to move nine million tonnes of iron ore a year. From there, it is a 500 kilometre rail journey to the port of Esperance in the south-east or Kwinana, which is due west and very close to Perth.

“The port of Esperance would be our preferred option,” Lea says. “It currently has the capacity to handle around 10 million tonnes of iron ore per annum, and this is pretty much taken up by Cliffs.

But the Western Australian government announced in January this year that it will actively support an expansion plan to increase capacity to 30 million tonnes. If all goes according to plan, the new port will become operational in 2014, and this would suit our development schedule for exporting iron ore.”

Radar’s proposed development schedule is based on the results of a $7 million programme of exploration that has taken place over the past 15 months, largely across the Johnston Range and Die Hardy properties. Meanwhile, in January 2011 the company acquired the mineral rights for additional project areas, Jackson, Boondine and Windarling, bringing its total holdings in the Yilgarn to 1,200 square kilometres and making Radar one of the largest mineral rights holders in the area. Exploration is at a different stage at each property and both haematite and magnetite iron ores have been identified.

“The Johnston Range is our most advanced hematite project, and is the primary focus of our exploration efforts at the moment,” Lea says. “The assay results released in January this year show

Radar Iron

Jasperoidal magnetite banded iron formation

potential for significant deposits, so we plan to resume drilling next month and hope to define our initial haematite resources within three or four months.”

The plan is to invest another $4 million in exploration drilling over the coming year, largely at the Johnston Range but also extending into Evanston which lies just to the east. Meanwhile, geophysical studies will continue across all properties to generate more haematite targets for further exploration.

South of the Johnston Range lies Die Hardy, and exploration here is further advanced. “Last year we completed 10,000 metres of drilling and identified a resource of 352 million tonnes of magnetite with good qualities and metallurgical properties. This has the potential to be tripled in size quite easily by more drilling. However, magnetite projects require a large capital investment, so we intend to undertake a pre-feasibility study this year to confirm that it will be an economically viable mining project before

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we continue with any further exploration.”

The difference between the haematite found at Johnston Range and the magnetite found at Die Hardy lies at the heart of the decision to focus the majority of investment and effort on the former, where drilling results are already very promising.

Haematite is often known as direct shipping ore because it’s easy to mine and requires very little processing. It can be dug out of the ground through open pit mining, crushed to a maximum size of 35mm and exported. The capital costs for developing a haematite mine are therefore very low.

Magnetite, by contrast, requires a much larger capital investment. Although mined in the same way, it is fine-grained and normally closely associated with silica or quartz. The rock is therefore crushed and finely ground, then passed over magnets to extract the magnetite from the silica to create a concentrate. “The process is power intensive and the capital cost of building the plant runs into hundreds of millions of dollars,” Lea says. “So the option of developing Die Hardy is further down the track for us, but we are talking with some end users about the possibility of investing in the project in the future.”

The strategy for the portfolio of

properties is to develop the haematite mine at the Johnston Range as quickly as possible and to plough the profits back into expanding production. “We will probably start with a small output of around one million tonnes each year from the Johnston Range. And if the price of iron remains high, which I believe it will do for at least a decade, we could easily make around a $50 to $80 per tonne margin,” Lea says. “That will quickly pay off our

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Radar Iron

RC drilling, Johnston Range

Regional spring wildflowers

capital and generate cash “However, in the longer term I believe magnetite for increasing the scale of is going to be the future the operation.”

In parallel with this, a of iron ore mining around programme of preliminary the world, particularly as high grade haematite geophysical studies and ground reconnaissance becomes exhausted.”

Cost to date of Radar’s mapping is planned this With a lucrative haematite exploration programme year for Radar’s most recent prospect for the short term, acquisitions, Jackson, a significant magnetite Boondine and Windarling. resource for the long term, All have both haematite and magnetite and plenty of exploration scheduled for the mineralisation and the aim is to develop a portfolio of properties, Radar looks set to pipeline of targets for ongoing exploration. enjoy a busy few years.

“We are also looking to increase our holding of ground holding prospective iron For more information about ore, but we will be focusing primarily here Radar Iron visit: in the Yilgarn where we have excellent www.radariron.com.au transport infrastructure in place,” Lea says.

$7

Million

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Sustainable solutions

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Cypher Environmental Providing the mining industry with high quality dust control, soil stabilization and water treatment products that meet the growing requirement for sustainability, as president Todd Burns explains written by: Gay Sutton research by: Vincent Kielty

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Fully loaded haul truck traveling on a Dust Stop treated road at a mine site in Eastern Canada

Cypher Environmental

O

ver the past 15 years, sustainability has moved from being a nice extra to being a corporate business requirement - a trend that’s being reinforced by increasing regulation and legislation, demands for better environmental and social performance by the investment sector, and pressure from environmental lobby groups. The resulting move toward green procurement has been an ideal operating environment for Cypher Environmental.

Based in Winnipeg, Canada, Cypher designs and manufactures a range of dust control, soil stabilization and water treatment products that are marketed and sold worldwide through a network of distributors across 30 countries. “Our products are all 100 percent environmentally friendly, organic, biodegradable and nontoxic,” said president Todd Burns. And these credentials are all verified independently by third party analysis and monitoring.

The business was launched in 1998 with EarthZyme, a soil stabilizer that is designed to strengthen and bind the surface of unpaved roads. Widely used by government agencies, local municipalities and farmers, in recent years EarthZyme has come into its own as a recognized technology for the mining sector where sustainability has become a top priority. Mines tend to be located in some of the world’s wildest and most isolated spots and their access roads are required to withstand heavy and continuous traffic often over very large distances. EarthZyme is an environmentally

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friendly product that fulfills all these needs.

The rest of the product portfolio has grown organically around EarthZyme. The second product to emerge from Cypher’s R&D program was a dust control product, Dust Stop. Aimed at the same marketplace, it prevents dust erosion on unpaved surfaces.

More recently, the company has diversified into water treatment products, building on the enzyme technology that lies behind EarthZyme to develop the UltraZyme range of products.

Not only are the materials used in the manufacture of the Cypher products completely organic and environmentally friendly, but the way the products work delivers additional environmental benefits as well as significant cost savings.

EarthZyme, for example, is not a glue as most soil stabilizer products are, but it acts on the clay component already in the soil. Comprising a combination of enzymes, electrolytes and surfactants, it works by releasing water from the soil, enabling it to be compacted, and then it manipulates the clay to bind it together permanently, increasing its strength and density.

By using the clay already in the soil, rather than having to source and transport quantities of gravel for road construction,

the carbon footprint of the road is hugely reduced and significant cost savings can be made. Interestingly, EarthZyme is fully biodegradable in 28 days, but because the effect on the clay is permanent it doesn’t wash away in a few months as glue does.

One EarthZyme application can last for 10 years or more, making it very much more cost effective.

“EarthZyme is also very easy to mix

“Our products are all 100 percent environmentally friendly, organic, biodegradable and non-toxic” 350 | Mining & minerals

Cypher Environmental

Empty haul truck traveling on the same Dust Stop treated road at a mine site in Eastern Canada

and apply using standard roads,” Burns commented. construction equipment,” Moreover, unlike many Burns said. “It comes in a alternatives Dust Stop highly concentrated liquid contains no chlorides, so it’s form – one liter can treat up neither corrosive to vehicles Number of days when to 35m3 of soil - which means nor toxic to grasses and plant EarthZyme is fully the shipping, transport and life at the roadside. “In fact biodegradable application costs are low, it has been used for hydro seeding, in other words to from both the financial and encourage the growth of environmental perspective.”

The Dust Stop product also has plants,” he added. significant environmental benefits. It is the Dust Stop has achieved some significant only organic celluscopic-based polymer on environmental benefits for the mining the market for dust control today. Most are industry in particular. Manufactured acrylic polymer or polyvinyl acetate-based. in a highly concentrated powder form, “They are essentially derivatives of oil, the carbon footprint and cost of the and that’s not exactly an environmentally shipping are both low. It greatly reduces friendly cocktail to be spraying on your the consumption of water which has

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traditionally been used for dust control, and is also highly effective for surface stabilization on tailings piles and stockpiles.

“We’re currently talking with a potential new distributor in Guinea who may have a new application for it, spraying it onto rail cars before they leave the mine, to prevent mine dust being spread across the country.”

The active ingredients in the final product, UltraZyme, are enzyme/bacteria

cultures that are harmless to people, animal and aquatic life and digest organic waste safely. “We started off with one product to treat all wastewater and odor control applications,” said Burns. “It comes in a concentrated powder form, so it’s not diluted with water, dyes or fragrances.

From this we branched into more specific applications. One is designed to treat sewage, so we’re talking of domestic,

“EarthZyme is very easy to mix and apply using standard construction equipment”

EarthZyme treated haul road at a coal mine in Cesar Province, Northern Colombia

352 | Mining & minerals

Cypher Environmental

Dust Stop being applied to the road surface

industrial and agricultural wastewater, general odor control and grease traps. We have another product that digests algae and is used in lakes and ponds, and finally we have a hydrocarbon-specific product which is of interest particularly to the industrial and mining sectors, and can be used to remediate soil where there has been an oil spill or hydrocarbon contamination.”

Cypher is careful to ensure its products are used safely. All distributors are given a full program of training in the products, and the company then takes a proactive role in ensuring they are suitable for the intended application. “We do a significant amount of due diligence on our customers. I know that might sound kind of strange, but we need to be sure they know what they’re doing with

our products, that they understand how they’re designed and how they should be applied,” said Burns.

The company offers advice on the viability of the product for an application, and the quantities and concentrations that will give the optimum results. The application of EarthZyme, for example, is scientifically based on the results of soil sampling, while the use of both Dust Stop and UltraZyme are based on a questionnaire. “Ultimately we don’t want to have an unhappy customer,” Burns continued. “Good word-of-mouth is one of the best advertisements, so we only want the best results from the application of our products.”

Research and development has been a strong feature of the company’s

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Haul road in Nunavut, Canada just prior to a Dust Stop application

Cypher Environmental development so far, and will continue to form the foundation of its growth in the future. “We are currently working on a new liquid version of Dust Stop which we’ll be launching in North America in the next three months,” said Burns. “It will be easier to mix and apply, removing the need for any specific equipment.” The road tests, due to be done in the next few weeks, are scheduled to take place in the challenging and dusty environment of Texas.

This new liquid version is also taking the company further in its approach to customer service. It will be the first product to be customized in the factory specifically for the end user’s soil conditions. “We can adjust the viscosity of the product simply by varying the inputs in the factory. This will enable the product to penetrate specific soils better, so we can custom tailor the product, and the customer will only need to mix it with a fixed volume of water, which eliminates the potential for error.”

Looking to the future, Cypher has a number of new products in the development pipeline, including some environmentally friendly, organic, biodegradable and nontoxic fertilizer products. With environmental concerns continuing to play an important part in corporate strategy, the company is well placed to grow its product range. “As we see new opportunities to diversify, we will do so,” Burns concluded.

For more information about Cypher Environmental visit: www.cypherenvironmental.com

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As the dust settles Dust control and road stabilization are major issues in the United States. Twenty years after its invention, PennzSuppress D is finally being made available to a wider marketplace. Bruce Coulthard, president of PZS Stabilization, talks about this revolutionary product written by: gay sutton research by: dan finn

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PZS Stabilization

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BNSF Railway Western Untited States

PZS Stabilization

D

ust is a major problem in many walks of life, from mining and agriculture through to the timber industries and even the military. Many products on the market attempt to tackle some aspects of the problem, with varying degrees of success.

Only now becoming recognised beyond the north east United States, PennzSuppress D is highly effective across all dust control and road stabilization applications and is safe to use and environmentally benign. So why is this product, which was developed nearly 20 years ago, still a newcomer to the marketplace?

“PennzSuppress D was originally designed, invented and patented by Pennzoil in the early 1990s to reduce float dust in mines, to protect the workers from black lung disease and reduce the risk of explosions,” explained Bruce Coulthard, president of PZS Stabilization, the company bringing the product to market.

“Pennzoil invested some $30 million developing the product and working aggressively with various state and local government bodies in Pennsylvania to gain product approval for its use in a variety of applications. However, Pennzoil merged with Quaker State in 1998 and then became part of Royal Dutch Shell in 2002 and had to divest certain domestic assets in order to comply with US Department of Justice Requirements.”

PennzSuppress D was one of the casualties and was sold to American Refining Group (ARG). For ARG, however, the product represented a nominal percentage of revenues and was peripheral to their lube

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oil refined product mix.

ARG first limited its sales and marketing of the product to the north east of the United States, and eventually decided to sell it. Coulthard was part of a small consortium that understood its potential and believed it could deliver significant environmental benefits. PZS Stabilization was granted exclusive sales territories in the US, Canada, Mexico and South America.

PennzSuppress D is based on water emulsified paraffin wax resin which can be effortlessly applied using proprietary water trucks. It contains none of the usual highly damaging solvents or asphalts. It soaks into the surface layer where salts in the soil deactivate the oxygen, enabling the resin to dry and lock hard.

“The only thing that can reactivate PennzSuppress is more PennzSuppress,” Coulthard continued, “so two or three coatings over a period of days produces a really tough surface. It has a crush rate of 600 to 700 tons which is exactly what is required for a mine road. This compares favourably with a crush rate of 30 tons for asphalt. It doesn’t wash away and is very durable, withstanding up to 7,000 vehicle passes before a light maintenance application may be needed in the worst affected areas.”

The product has an impressive range of properties. It’s non-flammable, noncorrosive to metals and causes no harm to humans, animals or plant life. It was originally designed to protect health, and one of its major selling points is its environmental benefit. It can even promote plant growth by holding fine dirt particles on seeded slopes to actively promote seed germination. It is also being used increasingly in mine

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PZS Stabilization

Wine grape production, central coast, California

tailing remediation. By “A new project I’m combining PennzSuppress personally working on with beneficial fungi and is with the railroads. bacteria, seed germination Wooden railroad ties are and growth are rapid. This impregnated with creosote PennzSuppress can reduces almost 10-fold the that leaches out and washes withstand 7,000 time it takes for the grass into the waterways. It’s vehicle passes to remove toxins from the toxic and a huge issue for soil, a process known as the environment,” said Coulthard. PennzSuppress phytoremediation.

Since acquiring the product PZS has seals the ties, locking in the creosote without rapidly established a customer base across introducing any other toxins. This has the United States and is currently expanding proved such a benefit that one of the largest into Canada. “We market it anywhere that railroad companies in the US has a policy requires dust control, other than to home to use only PennzSuppress throughout owners.” The company is continuously the network because of the storm water pushing the boundaries and developing new pollution issues caused by other products. uses for the product.

PennzSuppress can be used anywhere

7,000

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Dust control helps crop productivity

PennzSuppress prevents cr

“Our aim is to grow with each new customer, one customer at a time, and to do everything we can for them� that requires road stabilization, erosion control, or storm water protection. In road construction, the current prime coats used as a base for the asphalt are highly toxic.

PennzSuppress performs as well if not better, is some 30 percent cheaper and is environmentally benign. In forestry, lumber company roads in the Pacific north west usually run parallel to streams and a range of dust suppression methods are

362 | Mining & minerals

required to prevent soils eroding into the water. Most alternative dust suppression products, however, are toxic. Under pressure from major customers such as Home Depot, lumber companies are switching to PennzSuppress to reduce their impact on the environment.

Picture the dusty roads of California as they pass through plantations of almonds, grapes and walnuts. The first few rows of

PZS Stabilization

reosote leaking from railroad ties

crops perform badly because spider mites, carried in the dust, infect the plant and cripple productivity. “That’s a huge cost, not only in lost productivity but also in the use of miticides which don’t work,” said Coulthard.

PennzSuppress is safe to use alongside crops.

“Excessive nitrogen in plant leaves are what attract mites. Combining proper dust control we are giving the farming communities the best alternative for financial stability.”

Military training centres are another expanding market. Tanks create a tremendous amount of dust which reduces visibility and vehicle life expectancy as well as polluting the environment.

PennzSuppress reduces dust and erosion and also helps cut water consumption by over 80 percent.

United States Military Training Centre

After 18 months of rapid expansion, PennzSuppress is attracting considerable interest from countries as geographically spread as India and South America. PZS is investigating routes to these markets. “Our aim is to grow with each new customer, one customer at a time, and to do everything we can for them,” Coulthard concluded. “It’s a wonderful product, and we’re looking for people who truly understand it and want to make decisions based on a rich history of science and successful applications with PennzSuppress.”

For more information about PZS Stabilization visit: www.pzsstabilization.com

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