AngloGold increasingly ‘upbeat’ on new improving mining technology

JOHANNESBURG (miningweekly.com) – The new South African mining technology that AngloGold Ashanti is developing in its Tau Tona gold mine, is expected to produce 13 000 oz of gold this year compared with 3 000 oz last year.

“That’s the uptick we’re seeing in technology,” AngloGold Ashanti CEO Srinivasan Venkatakrishnan (Venkat) told Creamer Media’s Mining Weekly Online at Monday’s media roundtable. (Also see attached Creamer Media video).

The latest generation of reef-boring machines have been deployed at AngloGold’s Tau Tona mine low carbon leader shaft pillar, where reef-boring cycles have improved dramatically, reducing from 159 hours a cycle in the first quarter to 82 hours a hole currently, against a blueprint of 72 hours a hole.

“This is a most pleasing development and we’re very upbeat about it,” said AngloGold Ashanti South Africa COO Chris Sheppard.

The technology forms part of the company’s strategy of retaining long-term optionality in the face of the gold mining industry’s hectic current short-term volatility.

Venkat tells Mining Weekly Online that he expects it to reach commercial breakeven point next year.

If it does, it has the potential to enable AngloGold Ashanti to mine “all the gold, only the gold, all the time, safety”, which will be a game changer for the South African operations, which performed extremely unsafely in the three months to September 30. (Also see second article on AngloGold’s third-quarter results.)

The ultrahigh-strength backfill required to fill the cavities left by the raiseboring can now be pumped over the required 1 000 m distance – a prerequisite for a full production mining cycle.

“We’re there,” Sheppard enthused, adding that it was foreseen that the technology would in time also be used to mine remaining strike and dip pillars, a key aspiration of other gold mining companies also wanting to make use of it.

“But for now, we’re focused on this technology making the right business case for us,” said Sheppard.

In the three months to September 30, overall AngloGold Ashanti’s production was 974 000 oz at a total cash cost of $735/oz, which bettered guidance.

But it was the international operations that came to the rescue.

The South African operations lost 48 000 oz of gold production to safety stoppages, which makes safety a key potential lever of South African production improvement.

South Africa currently accounts for 24% of the total production of AngloGold, which has 19 operations in nine countries, and effort is being made to ensure that it takes advantage of the weak rand by producing more locally.

A 10% production improvement on this year’s expected one-million ounces was “not an unreasonable assumption”, Venkat estimated.

The Department of Mineral Resources is showing more pragmatism in the implementation of safety stoppages.

“But while South Africa is an important component of the business, the good thing of having a portfolio approach is that during this period of poor performance the international operations are firing on all cylinders,” Venkat added.

Citigroup gold analyst Johann Steyn drew attention to AngloGold’s South African mines showing the same bad symptoms that prompted a sell-off of some of them in the 1990s and asked whether they should be put up for sale.

Venkat conceded that the company was being impacted by the poor performance of the South African operations but said the objective of the management team was to bring the assets into line with the company’s international assets.

“Like any portfolio manager does, you give it your best shot and if you can’t get the asset to come into line, you have to look at other options. Currently there is certainly good potential from the suite of South African assets and we’re directing our attention in that regard,” he said, adding that if the safety performance improved, ore reserve development rates would pick up and mining flexibility come back.

Sheppard added that the focus was on getting unit costs down and extracting as much value as possible out of the South African operations.

Mining Weekly Online can today once again report that AngloGold's new technology is compelling in that only 60% of the gold ore remaining in South Africa’s rich Witwatersrand basin is accessible using current drill-and-blast technology and 40% of the gold is left behind in pillars, to keep seismicity at bay.

The current mining method then loses a further 25% to 30% of that 60% because blasting breaks the ore into so many pieces that not all of them can be recovered, particularly as fractured sizes range from fine powder to large boulders.

Once blasted, the product is moved up to seven times, which results in more losses.

On average, there is 200% more waste than gold in the mix moved and dilution can be as high as 1 500%, which means that huge volumes of nonpay material have to be transported out of ever-deepening cavities.

One hundred grams of gold in the ground becomes 30 g or 25 g of gold on surface, after getting out only 60% of what was there in the first place. What is far worse is the death and injury rate, which remains in spite of the huge effort to achieve zero fatalities.

During the twentieth century alone, the Leon Commission calculated that 69 000 people were killed in South Africa’s mines and a million seriously injured, maimed or physically damaged.

Currently, safety has worsened and, unless significant change is made to what creates this worsening, death and injury in mines will continue.

There is thus an absolute need to change if deep-level gold mining is to be sustainable – and AngloGold Ashanti is at the forefront of a move under senior VP: technology and projects Shaun Newberry to ensure sustainability.

The current mining method is clearly not the one that should take South Africa into the future.

In fact, if it continues to be pursued, gold mining will end long before the Witwatersrand basin’s three-billion ounces of gold are extracted.

Some 1.7-billion ounces have been mined, only 200-million more ounces are in reserve and 1.1-billion ounces stand to be left in the ground unless a new mining technology is introduced.

Since 2010, AngloGold Ashanti has been working consistently to introduce a safer and more efficient way of mining narrow-reef orebodies and has developed and manufactured new technology prototypes in a relatively short time.

It involves boring holes of the required reef-channel width, collecting and transferring the bored chips in an enclosed system for further processing and backfilling the cavities to stabilise the underground environment and reduce seismicity.

In order to reach depths of 5 km and beyond, the rock mass removed needs to be replaced with similar backfill material of 170 MPa compressive strength to prevent movement.

Each hole is sealed at the bottom access point and a high-viscosity mixed product is pumped to the top access point.

All this is already happening. Steps are being taken to enable the reef-boring machines already in use to move and align themselves automatically on the basis of geological data.

Near-term work is also being undertaken to evolve towards a form of gold liberation using chemicals, thermal energy or other methods to free the gold for hydraulic transport back to surface and achieve the original vision of having gold on tap 24 hours a day, 365 days a year.

Knowledge of rock fragmentation is also an enabler for reef boring, as less power will be needed if better rock fragmentation methodology can be developed.

There are many such projects under way in the background because of their relationship with the programme’s first two stages.

But exponentially faster geological information will be needed to deploy the new technology.

To be able to bore the reef over distance, the location of the gold-bearing rock will have to be determined far more quickly and accurately.

Currently, there is nothing available that can provide the information at the pace needed and something suitable will have to be developed.

In the meantime, the quick win of shaft pillar mining is being seized upon, where such information is already available.

High-speed haulage-boring machines are needed to create the main infrastructure for logistics and geological drilling platforms as well as smaller-diameter access for on-reef infrastructure.

Once the on-reef grid has been established, the idea is for ventilation to be achieved by drilling holes between the drives using a raisebore machine.

It is envisaged that reef boring and ultrahigh-strength backfilling can then take place from the drives.

Reef boring begins from the bottom reef drive using a machine set up on the lower of the two levels to be connected. Line boring is used to drill a hole from the lower level to the upper level and is then backfilled on completion.

The completed hole has smooth walls and does not require support.

The vision is of mechanical mining being remotely controlled from safe areas and extraction ratios being boosted by a new mining methodology and backfilling of cavities with material as hard as the rock itself.

Targeted are significant portions of orebody currently left behind and the elimination of gold loss down microcracks.

Instead, the plan is to transport consistent smaller chips from the rockface to the mill in one enclosed system.

The technology is said to have the potential to increase the extraction ratio from the current 60% to 70% to at least 80% to 90% and will help solve the high closure challenge expected at mining depths of 5 000 m and beyond.

Skin-to-skin drilling leaves a wedge of gold that may be recovered by lancing or micro-waving. The second stage is targeting intelligent mining machines and the third stage a visionary gold-on-tap mimicking of the oil and gas industry.

The three cohesive stages of the roadmap aim to bring sustainability to gold mining at ever-increasing depth, with safety, extraction ratio, dilution, mine call factor and asset use coming under the microscope.

If the country succeeds in finding a viable new alternative, it would not only be able to mine all remaining pillars and go to the ultradepths, but it could also reopen a large number of closed mine shafts and revive mining ghost towns, which is why the national shoulder needs to be put to the new technology wheel, Mining Weekly Online can today report.

AngloGold production for the 2015 year is being guided at up to four-million ounces, with total fourth-quarter cash costs projected to be a possible $720/oz.