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THE KNOWLEDGE YOU NEED
ining FROM THE INDUSTRY EXPERTS
HOT SEAT
Former Impala Platinum CEO David Brown on leaving a lasting legacy
JUNIOR & MID-TIER MINING Climbing up the value chain
MC PROCESS Technological innovators
ENGINEERING Upping the stakes in a competitive market
SINKING & TUNNELLING Delivering on difficult declines
ISSN 199 1999-8872 • R35.00 (incl. VAT) • Vol. 5 • No. 6• June 2012
CONTENTS
T H E K N O W L E D G E YO U N E E D
ining
June 2012
FROM THE INDUSTRY EXPERTS
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THE KNOWLEDGE YOU NEED
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ON THE COVER
FROM THE INDUSTRY EXPERTS
MC Process shows its flare for technological innovation in minerals processing P6
HOT SEAT
Former Impala Platinum CEO David Brown on leaving a lasting legacy
JUNIOR & MID-TIER MINING Climbing up the value chain
MC PROCESS Technological innovators
ENGINEERING Upping the stakes in a competitive market
SINKING & TUNNELLING Delivering on difficult declines
ISSN 199 1999-8872 • R35.00 (incl. VAT) • Vol. 5 • No. 6• June 2012
EDITOR’S COMMENT
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A salute to David Brown – and all CEOs
MINING NEWS
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The top mining stories headlining this month
HOT SEAT
10 Impala Platinum CEO leaves a lasting legacy JUNIORS & MID-TIERS
14 Wesizwe’s Bakubang platinum mine rises rapidly
18 Universal Coal’s commitment to South African coal prospects
23 The East Rand Basin’s untapped potential
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ENGINEERING
26 Global engineers dive into Africa 28 New surface air cooling at South Deep’s South Shaft
30 GMEP’s savvy structural steel specialists 32 MDM’s perfect profile mix SINKING & TUNNELLING
34 Developing a difficult decline for Ghaghoo 36 Thubelisha takes to the stage COMMINUTION
38 Introducing the Nordberg NW portable plant series
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39 Gounkoto’s crushing success 40 Reliable screening needs reliable aftersales service
42 Bigger and better high-pressure grinding rolls 45 Crushing in West Africa 46 Optimising the comminution circuit CETERUM CENSEO
47 It ain’t heavy Inside Mining 06/2012
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Editor’s comment Publisher Elizabeth Shorten Associate publisher Ferdie Pieterse Editor Laura Cornish laura@3smedia.co.za Creative chief executive Frédérick Danton Senior designer Hayley Mendelow Senior sub-editor Claire Nozaic Sub-editor Patience Gumbo Marketing manager Martin Hiller
THE LEADERS
A salute to David Brown, and all mining CEOs
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I have great respect for mining CEOs, whether they are running largescale global commodity enterprises or starting a new single-asset company from scratch.
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South Africa: R350.00 (incl VAT & postage) SADC countries: US$80 Foreign: US$100 ISSN 1999-8872 Inside Mining Copyright 2012. All rights reserved. ___________________________________ All material in Inside Mining is copyright protected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of contributors do not necessarily reflect those of the the publishers.
Since ‘joining’
the mining industry in 2005, I have come to know a great many mining CEOs – some personally and some through the eyes of colleagues and investors. I have watched them endure great struggle, overcome challenges and succeed against insurmountable difficulties. Thinking back over the years on whom I have had the privilege of meeting, it seems to me that our CEOs all have two things in common: their undeniable passion for the job and the permanent mark they leave on their company during their tenure. And when they leave, I can acknowledge how proud I am to have seen, been a part of, and written about their lasting contributions – both positive and negative. The likes of Bernard Swanepoel, Ian Cockerill and even Ralph Havenstein come to mind. So it is with great sadness that we say goodbye to Impala Platinum (Implats) CEO, David Brown, who has led the company through ravaging storms and celebratory victories over the past six years. I have walked along beside him since 2006, seen the birth of entire new shafts and celebrated the company’s Royal Bafokeng Nation BEE deal – one of the mining industry’s finest achievements over the past decade. I have shed tears for the lives lost in mining accidents, notably those in 2009, and watched with horror as many thousands of workers took to the streets in illegal strikes. Like any long-standing mining CEO, Brown has been through it all. But it wasn’t until just a few weeks ago that I had the chance to chat to him personally, where he provided me with insight and perhaps some ‘behind the scenes’ detail about his time at Implats. As journalists, we often don’t get the opportunity to walk in someone’s shoes and understand, listen and question the reasons and motivations
behind certain actions. My chat with Brown was fascinating and eye-opening to say the least. And while Brown highlighted the successes he accomplished, he also told me of his regrets and the plans he set in place but will never have the opportunity to fulfil, as well as the false accusations and criticisms thrown at him in the face of trouble. Your skin must be as tough as nails in this industry – Brown, yours clearly is! Read about Brown’s time at Implats in this month’s Hot Seat story on page 10 – it will be worth your while, I promise. My own personal message to Brown: “I wish you every happiness in your future endeavours and hope that you remain within the mining industry.” And a better replacement Implats could not have been found. Like Brown, I have followed Terence Goodlace over the years with an equal level of respect from his time at Gold Fields – and most recently the successful business turnaround he achieved at Metorex. I look forward to watching Goodlace work with Implats as it enters the next phase of its life. Goodlace will bring a great depth of mining knowledge, insight and enthusiasm to one of South Africa’s greatest mining companies. Laura Cornish
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Inside Mining 06/2012
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Mining news www.miningne.ws
Top mining stories headlining this month NORTH AMERICA
Haiti drafting new mining laws
Source: www.miningne.ws
compiled by Ameerah Griffin
| SOUTH AFRICA | SepFluor unveils R2.1 billion fluorspar mining/ beneficiation plans
based on exploitation of two of its three fluorspar deposits, is 19 years.
Source: www.miningne.ws
SepFluor, a new name in fluorspar mining and beneficiation in South Africa, has unveiled plans for the development of its first fluorspar mine, located 80 km north of Pretoria, as well as a fluorochemical beneficiation hub near Bronkhorstspruit. The two projects represent total capital investment of some R2.1 billion, which is to be raised through a mixture of debt and equity in local and international markets, and will create some 400 new jobs directly and about 2 000 indirectly, says SepFluor CEO, Alan Smith. Smith says that key motivators for the two projects are fluorspar’s ‘strategic mineral’ status in key global markets, growing demand throughout Southern Africa (particularly for fluorochemical products) and the South African government’s support for development of a fluorochemical initiative in the country. Construction of the new Nokeng mine and associated concentrator, to be developed at an estimated cost of R900 million, is expected to begin during the fourth quarter of this year, with first production scheduled for the second quarter of 2014. Nokeng’s current life of mine,
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New prime minister of Haiti, Laurent Lamothe, says the government is drafting legislation for the newly emerging mining industry to help the impoverished Caribbean nation reap financial benefits. Lamothe, who saw his cabinet and policy plan recently approved, said that the legislation will be sent to parliament soon. The legislation will lay out rules apportioning royalties for the government and setting protections for the people and environment that could be affected by mines.
| ASIA | | DEMOCRATIC REPUBLIC OF THE CONGO |
| AUSTRALIA | Centrex boosts iron ore reserves in new Australian frontier
Glencore takes control of Mutanda in US$480 million deal Source: www.foxbusiness.com
Gelncore has taken majority control of its fast-growing Mutanda copper operation in the Congo, in a deal worth US$480 million (about R4 billion), marking the first step in a planned merger of the mine with the company’s nearby Kansuki concession. Mutanda, located in Central Africa’s copper belt, is one of Glencore’s main growth assets and a key operation in the Democratic Republic of the Congo, alongside its Katanga asset, largely thanks to its high ore grades and low expansion costs. The deal with two related, privately controlled groups – High Grade Minerals and Groupe Bazano – whose ownership has not been disclosed by Glencore, is also likely to revive debate over the opacity of deals in one of Africa’s most promising, but also most challenging mining destinations.
the Mindanao province in the Philippines.
Source: http://af.reuters.com
New copper discovery unearthed at Comval in the Phillipines Source: www.proactiveinvestors.com
Mining Group’s Comval project is showing early signs of its potential to be a major copper-gold porphyry system with evidence of a widespread and intensive zoned alternation system. The first intercept at the Bayag Bayag target, and in particular the extensive skarn alteration that extends for more than 700 m along strike, provides further indications that the prospects have the potential to host a large copper ore body. Assays received show a broad intersection of 44 m at 0.64% copper from 39 m, including 28 m at 0.88% copper. The project is located in the Compostela Valley, as established coppergold producing region in
Iron ore company Centrex Metals has more than tripled the estimated reserves at its prospect in southern Australia, a growing zone for new iron ore sources that is attracting increasing interest from Asian steel mills. Centrex, which is partnering with two Chinese steel firms, said the amount of ore believed buried at its Bungalow Hill prospect on the Eyre Peninsula of South Australia state had ballooned to 338 Mt after two years of exploration work. Inner Mongolia’s Baotou Iron and Steel Group owns 30% of the project. Centrex said it would complete as study into building a mine this year, sending its shares up 4%.
mining news
| SOUTH AMERICA |
SOUTH AFRICA
Exxaro plans new coal mine for exports
Continental Coal enters into JV to operate Columbian coking coal project
Source: www.reuters.com
Source: www.miningne.ws
Continental Coal has entered into an exclusive agreement to acquire a 50% joint venture interest in an operating hard coking coal mine located in Colombia. The acquisition of this wellestablished and high-quality hard coking coal mining operation will complement
the company’s existing coal mining, development and exploration project portfolio in South Africa. The acquisition will further diversify its production base
geographically into another of the world’s leading coal producing and export nations, and expand its product base into the hard coking coal market.
Exxaro plans to develop a new coal mine – Thabametsi – in the Waterberg coal field that will supply between 13 and 15 Mtpa of coal for export. “We are looking at another greenfields project geared at the export market,” says Mxolisi Mgojo, the head of Exxaro’s coal unit. The project will happen between 2018 and 2025, he added. Exxaro is currently finishing the construction of the Grootegeluk Medupi Expansion Project, a mine that will feed coal to Eskom’s new Medupi power station. Mgojo said the company will be ready to start shipping coal to Eskom for testing by the end of this month.
Cover story
TECHNOLOGICAL INNOVATION
The MC Process brand Despite its massive influx of project work in 2012, minerals processing company MC Process remains at the forefront of new technological equipment innovations aimed at reducing costs and improving efficiencies, writes Laura Cornish.
M
ining projects may be on the increase, but the market remains wary and companies have become far less prone to risk,” MC Process CEO, Mark Craddock, points out. Despite this, the company has been inundated with work over the past year, and has added numerous new installations to its already impressive portfolio. “This is largely thanks to our loyal customers, which include Ingwenya Mineral Processing.”
designed to process 300 tph and is due to be complete in January 2013. Recently supplied and completed equipment installations for 2012 include an 16 m diameter thickener, flocculant plant and lime slaking plant for the Zambia-based 100 000 tpm Maamba colliery. “We also supplied a 15 m diameter thickener and flocculant plant to Namakwa Sands (soon to be acquired by Trono), and not to be excluded from our much-expanded portfolio list is the 18 m diameter thickener and two 3.65 m diameter teeter bed Many mining installations separators (TBS) that we supplied to the “We recently completed all of the civil work Marrapino tantalum project.” for coal resource and exploration company Also part of the MC Process product Ikwezi Mining’s new coal washportfolio are ating plant, Doornkop, in Newtrition scrubcastle and further supplied a bers, which the 15 m diameter thickener and a company supplied fully automatic flocculant plant to to Volclay Chrome the project as well,” says Craddock. for its plant expanThe company is also erecting a sion, together with 10 m diameter thickener for Sekoko two TBS. Resources’ Hendrina-based coal opMC Process is eration, which is due to be commisinstalling a turnABOVE MC Process teeter sioned shortly. key 15 m diambed separator “In May, we received the order to eter thickener and supply and install two flocculant plants and flocculant plant for Silica Sands, as well a 15 m diameter thickener for Umthombo as a 8 m diameter thickener for a client Resources’ new Phalanndwa colliery plant in Newcastle. situated new Delmas,” Craddock continues. Delving deep into water Delivery is due at the end of July and comNotwithstanding the recent success missioning scheduled for mid-August. Conof MC Process's more conventional struction of the plant is already under way, equipment range, Craddock’s growth under the management of Ingwenya; it is
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Improving on thickener design MC Process recently introduced its new arched thickener bridge to the market. The copyrighted design offers clients a lighter, structurally sound thickener bridge structure that is easier to transport and erect.
aspiration lies more specifically in the water field. Having recently supplied and installed two dissolved air flotation (DAF) units for a wastewater treatment system in Vanderbijlpark to treat an effluent water stream; this growth plan is already well under way. The combined DAF units are capable of treating
Cover story
Inside Mining 06/2012
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Cover story
3.8 Mℓ/d of water. “We have also secured the contract to supply an entire sewerage treatment plant, together with a reverse osmosis system and acid mine drainage (AMD) treatment packaged plant for a new coal operation near Newcastle. Equipment p procurement and installation will commence as soon as the
Original MC Process flocculant plant
company receives its water licence,” Craddock reveals. Research and development (R&D) is a key constituent of MC Process’s business – the company’s property includes extensive laboratory pilot-scale testing equipment and facilities. “Through our in-house R&D facility, we have further enhanced our packaged AMD treatment system, which consists of neutralisation, electro coagulation, minimal electro-coagulation, flocculant addition and efficient heavy metals removal with the inclusion of our DAF unit. This is a revolutionary step forward in AMD D treatment. We can now treat
MC Process lime slake plant
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client, Mwana Africa, on its Kibolwe project in the Democratic Republic of the Congo (DRC). Craddock explains that because of the massive power shortages in the country, the test work is examining alternative, cost-effective methods for extracting copper without the ne for power. need The most obvious solution at this p point is to precipitate the copper using iron, which Craddock notes requires no power at all. Another exciting venture is nimal MC Process’s partnership polluted water with minimal A laboratory-scale SX with AIM-listed Alexander addition of chemicals, and pilot test unit Mining, where the compawe are looking to take this process nies have jointly completed the construcone step further by investigating how best tion of the AmmLeach copper/cobalt demto extract optimal financial benefit onstration pilot plant in Johannesburg, Jo at from the process.” MC Process’s premises. Craddock is referringg to the extraction of heavy metal ls from the th he The AmmLeach process is simple and remetals proce quires fewer unit processes to produce cobalt and copper metal cathodes, RIGHT New compared to flocculant conventional plant process procedures used in the DRC that produce ccopper and cobalt only as intermediate products. water and the various ways to use them in According to Alexander Mining, the result downstream processes. is significantly reduced capital and operatThe company is already quoting for a ing costs, compared to the conventional 10 Mℓ/d water treatment plant, which acid/sulphur dioxide process. Given the Craddock believes will be the “lowest cost, inherent high costs associated with operlowest opex plant on the market, thanks ating within the DRC using conventional to the innovative techniques MC Process technology, AmmLeach has the potential technologies can apply to the process”. to enable the processing of a significantly greater number of deposits that have, to Copper/cobalt innovations date, been considered marginal or uneco“We We are working on two projects with deve nomic to develop. these two commodities, the first being AmmLe The AmmLeach process may further ecofor engineering company tre high carbonate and acidnomically treat Scorpion Minerals Processor bodies that are prevalent in consuming ore ing,” Craddock unveils. the DRC, but which may not be economicalMC Process has underly treated usin using acid; AmmLeach is also suitlea taken all of the copper ed to heap leaching ‘lower’ grade ore bodies. extraction Coal flotation test work for test work for the Waterber Waterberg S c o r p i o n ’s Another mining mi field looking for processing innovat innovation is the coal sector, specifically those tho players in the Waterberg coal fields. Again, A MC Process is conducting ongoing in-house flotation test work aand optimisation processes for --3 mm coal fines for a number o of clients in the area.
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Hot Seat
A LASTING LEGACY
Remembering David Brown It is with sadness and admiration that the mining sector bids farewell to Impala Platinum CEO David Brown. Laura Cornish talks to Brown about some of the highs, lows, successes and challenges that came with running one of the world’s largest platinum companies.
L
ike most high-powered CEOs, Brown’s six-year tenure saw him endure numerous challenges, overcome them and celebrate multiple successes. Brown joined Impala Platinum (Implats) from Exxon Mobil in 1999 and held the position of CFO until his appointment as CEO in 2006. He is a qualified chartered accountant by profession. Among his many challenges, Brown has braved large-scale employee strikes, including a violent medical aid-related strike shortly after his CEO appointment.
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And no one will forget this year’s illegal strike, which may be recorded as one of the worst labour strikes in mining history. Brown was forced to fire 17 000 of his Rustenburg workforce, although most have subsequently rejoined the company. “I don’t want my legacy to be remembered for only having overcome some of the more difficult periods of Implats’ history, my positive contributions to the company have been so much more significant than that,” Brown states. “As CEO, you have no option but to cope with what the world, the sensationalist media and your own employees
throw at you. That is, unfortunately, part of the job, but not what we should only be remembered for.”
THE HIGHS Changing the business model Brown’s influence on the Implats business model extends back much further than 2006, having played a significant role in helping change the strategic business direction of the company. “When I joined the company, Implats was lease-bound, but market dynamics were changing and platinum prices were
Hot Seat increasing. We needed to change direction, increase our PGM resources and gain our ‘fair share’ of the world’s global market supply by increasing our production rates,” Brown recalls. In addition to organically expanding its resource base, the second arm of its growth strategy was to gain new resources. Implats achieved this by entering into joint venture agreements with Aquarius Platinum and African Rainbow Minerals (ARM) – Avmin at the time – and also expanding its thirdparty treatment agreements. In 2000, the company acquired 25% of Aquarius Platinum South Africa, which was developing the Kroondal project, in exchange for Implats’ holdings in Everest North, Everest South and Chieftan’s Plains. With demand for PGMs growing, Implats turned its attention to the potential in Zimbabwe and acquired 50% in ZCE Platinum in 2002. This gave it access to the Mimosa platinum mine in Zimbabwe’s Great Dyke, which is 50% owned by Aquarius Platinum. “Even though CEO Stuart Murray’s relationship with Implats changed when he aligned himself with Anglo Platinum, our two companies had many successful years together,” says Brown. In 2011, Aquarius successfully bought back the stake in the company held by Impala Platinum, resulting in a handsome profit for Implats. 2001 also saw the ARM/Implats JV secured the mining rights for Two Rivers platinum mine. “Buying the additional resources we needed, including stakes in Zimplats, Marula and of course Mimosa, provided Implats with the opportunity to expand its production profile, ensuring some of the production successes the company is still achieving today,” Brown notes.
Magical 2007 – Brown’s first full year at the helm A landmark BEE transaction was born in 2007 between the Royal Bafokeng Nation (RBN) and Implats, and saw the RBN became the company’s single largest shareholder. “This is truly one of my most significant contributions to the group considering our relationship with RBN was in an extremely fragile state when I joined the company,” says Brown. A key feature of this transaction was a solution Brown, Steve Phiri, Niall Carroll and Cathy Markus eventually devised. The solution saw RBN exchange royalty rights for shares in Implats as well as the creation of the Impala Bafokeng Trust (IBT), which has a primary purpose of augmenting the
2007 saw the announcement of record earnings for the group, having for the first time exceeded the 2 Moz production milestone corporate social investment commitments of the RBN and Implats with a further total contribution of R340 million (R170 million each over a 10-year period between 2007 and 2016). The primary beneficiaries of the IBT are the people living in close proximity to Implats’ Rustenburg operations and the area owned and inhabited by the RBN. While the trust has an over-arching emphasis on the empowerment of women, it focuses more specifically on the areas of education, health, enterprise development, capacity building and sport and recreation.
“I am extremely proud of our strong relationship with RBN today and what this has done for its communities, which we have nurtured since 2007.” That year also saw the announcement of record earnings for the group, having for the first time exceeded the 2 Moz production milestone. “Our growth strategy was paying off.”
Surviving the crash While 2008 and 2009 brought with it the severe financial economic crisis, Brown
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Hot Seat believes Implats not only survived the storm, but survived it better than most. “Being a chartered accountant by profession enabled me to effectively implement cash cutting measures, reallocate capex where necessary, cut back costs and save cash flow. We continued to pay dividends throughout the period and, as a strong management body with a strong skills set, we really managed the crisis to the best of our abilities,” Brown describes. By the end of 2009, the world had changed, he continues, and the glamour of merger and acquisitions had gone. The necessity to focus on operational business aspects and lift staff morale became critical. “It was a period of dealing with senior personnel and staff underperformance, and I held back on making certain necessary decisions, while still trying to please multiple board members. Sometimes difficult BELOW Implats owns and operates numerous shafts in Rustenburg and its mining presence is extensive
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decisions and actions are critical, I have really learnt a lot from that period of time.”
A large-scale housing scheme Implats has spent the last few years investing in a home ownership programme aimed at assisting employees acquire their own property. To date, the company has provided 1 500 homes. “The aim of such a programme is not about providing workers with an RDP house, but encouraging them to take pride in owning a home, thereby enabling them to live with their families.” Brown believes this will have a massive knock-on effect on some of the other major issues that mining houses deal with in relation to their employees. “Nutritional problems and even HIV/Aids numbers will reduce if our workers are able to go home to their families at night.” This initiative falls in line with human settlement minister Tokyo Sexwale’s campaign to lobby companies and stakeholders to uplift the local communities in South Africa. “This is one of the best public/ private enterprises established in South Africa, and I hope Implats will continue this housing scheme roll-out, which is intended to reach between 5 000 and 10 000 houses.”
Zimbabwe Despite Zimbabwe’s arduous indigenisation regulations, Brown continues to search for a successive outcome to building an amicable relationship with the country and its local operations. “Investing so heavily in Zimbabwe remains to this day, in my opinion, a very successful part of the Implats business, as the returns for shareholders have been significant.”
THE LOWS – Unfinished business mergers and acquisitions Brown has dealt with criticism for one of the acquisitions he implemented during his CEO period. “I received a lot of disapproval for overpaying for Afplats in 2007,” Brown admits. “But the mining business is a longterm one, and CEOs need to make decisions that will impact positively on the business in the future. The Afplats deal is one of them. It is a good UG2 resource, with more than 60 Moz of resource in the ground. It will add significant ounces to Implats’ production profile down the line at the low end of the cost curve. Regarding our Northam acquisition to bid in 2008 following the financial crisis, the company is in a different place today and the Zondereinde mine no longer fits with Implats’ production profile,” says Brown. “The one piece of unfinished business I will always think of is not succeeding in acquiring Royal Bafokeng Platinum,” says Brown. The buy-out was rampant in the press in 2010,
Hot Seat but we never succeeded. Despite this, Brown believes such a deal still holds massive opportunity for the company. “I have set the right environment for this deal to still take place in the future.” Implats’ relationship with ARM has also proven to be extremely successful over
reacted remarkably well during the situation, and Susan Shabangu was unbelievably compassionate during the memorial service, despite the ravaging politically provocative statements thrown at Implats.” Brown feels that while safety has always been a priority for Implats, the company
“I really hope to be remembered for my positive contributions to Implats. It is part of the reason I have developed such a passion for the mining industry” the years and is a company Brown wishes he had established further working agreements with. “It would be beneficial to see both companies working together more.”
Safety In 2009, Implats experienced one of the worst fatalities in its history. “The day will remain etched in my memory forever,” Brown confesses. Nine workers died during a rock fall at 14 Shaft, resulting in shock and great upset. “Our management team
continues to battle with the issue, recording eight fatalities during the half year to December 2011. “We have attempted to establish and embed a stringent safety culture, which I hope will come to reflect our dedication to safety in the near future. The fact is, at least 90% of fatalities are avoidable.”
Goodbye “I really hope to be remembered for my positive contributions to Implats. It is part of the reason I have developed such a passion
for the mining industry, which I hope to stay involved with for many years to come.” Brown pays tribute to some of the colleagues he developed close relationships with during his time at Implats. “A special thanks to Peter Joubert, Mike McMahon, Lex van Vught, Viv Mennell and all the Bafokeng directors.”