Olympic Dam Copper-Uranium Mine, Adelaide, Australia

The Olympic Dam copper-uranium mine and plant is situated in South Australia, 580km north-west of Adelaide. Opened in 1988, Olympic Dam is wholly owned and operated by WMC Resources, which discovered the deposit in 1975. A A$1,940m expansion programme was completed in 1999, raising its capacity to 200,000t/y of copper and 4,300t/y of uranium, plus gold and silver. In mid-2005, BHP Billiton gained control of WMC Resources in an A$9.2bn takeover.

In 2007 BHP Billiton announced that it would undertake a A$6bn–A$7bn expansion of the Olympic Dam mine. The company says that annual ore production will increase up to 70 million tonnes, a seven-fold increase if the expansion proceeds. Copper production will increase from approximately 180, 000t a year to approximately 730,000t.

This would include 500,000oz of gold, 500,000t of copper and 15,000t of yellowcake. Existing average gold production is 80,000oz pa. The additional proven reserves of uranium now make Olympic Dam one of the most promising uranium mines in the world.

Intierra's Minmet data base puts current Olympic Dam proven-probable reserves at 756 million tonnes grading 1.5% copper, 0.5kg/t U308, 0.5 g/t gold and 3.1g/t silver. The measured to inferred resources were 3.214 billion tonnes at 1.025% copper, 0.337kg/t U308, 0.442g/t gold and 2.144g/t silver. On these figures, without improved grades or increased tonnage, Olympic Dam has proven reserves of a contained 12.153Moz gold and contained resources of 45.62Moz.

The results of the study ended much speculation within the mining and investment communities, which were especially abuzz about the potential upgrade of gold reserves.

Once fully complete, the expansion would make Olympic Dam the biggest mine in the world. Concerns have naturally been voiced about how the necessary infrastructure will be funded and deployed. Finding skilled labour will be another challenge.

GEOLOGY AND RESERVES

The deposit occurs in the basement rocks of the Stuart Shelf geological province in the north of South Australia, west of Lake Torrens. Mineralisation consists of medium-grained chalcopyrite, bornite and chalcocite, fine-grained disseminated pitchblende, gold, silver and rare earth minerals that occur in a magnetic hydrothermal breccia complex beneath 350m of overburden. The ore occurs in distinct zones that determine the mine access and layout.

As of September 2008, the total ore reserves at Olympic Dam stood at 473Mt, up from 399Mt in 2007, grading 1.86% copper and 0.6kg/t U3O8..

MINING

The current scope and logistical demands of the mine will be increased by a few orders of magnitude once the expansion gets into full swing. The mine will gradually be transformed from an underground operation to open pit.

Three vertical shafts and a decline access the orebody, which is worked using a variation of sublevel open stoping. Each stope may contain 300,000t of ore. Drill drives are driven on the stope centre line and blastholes drilled in vertical rings. These are charged with ANFO and detonated with shock tube detonators. The drilling fleet comprises Atlas Copco and Tamrock production rigs, with development being carried out using two Tamrock (now Sandvik) jumbos. Atlas Copco has supplied two modified Simba H4356S production drilling rigs.

Stopes are backfilled with cemented aggregate of crushed 'mullock' (waste rock), deslimed mill tailings, cement and pulverised fuel ash (PFA). Automation has done much to reduce production costs at Olympic Dam. Innovations include the automated underground haulage system and the 'smart' loader, a robotics-driven, decision-making underground ore carrier.

ORE PROCESSING

Processing facilities consist of a copper concentrator, hydrometallurgical plant, copper smelter, sulphuric acid plant, copper and gold/silver refineries. Recent expansions included a Svedala autogenous mill, additions to the flotation sections, two counter-current decantation thickeners, an electric slag-cleaning furnace, a new anode furnace gas-cleaning plant and additional electro-refining cells.

Copper is recovered primarily by copper sulphide flotation from slurry before the copper concentrate is smelted and electro-refined to high-purity copper.

Wastes generated during electro-refining are treated to recover gold and silver. After treatment by flotation, the finely-crushed ore is leached with sulphuric acid to dissolve uranium and any remaining copper. The leach liquor is processed in the solvent extraction plant to separate the residual copper and uranium streams. Copper is recovered by electrowinning and uranium converted to yellowcake and calcined uranium oxide.

Installation of two pulsed columns has increased uranium recovery from solution from 90% to about 97%. These columns use an air pulse to mix the acidic and organic solutions, providing better contact for the chemical reaction involved in transferring the uranium from one to the other.

Copper cathode sheets are transported by truck within Australia and to Port Adelaide for export. All uranium oxide produced at Olympic Dam is exported. The gold plant became fully operational in 2000. A fire in 2002 at the solvent extraction / electrowinning plant cost over A$300m to repair, while WMC also spent A$127m on renovating the copper smelter during 2003.

EXPANSION

At the end of October 2008, BHP Billiton announced that it expects to complete the first of the mine's five-stage expansion by 2013, boosting annual production capacity to 200,000t of copper, 4,500t of uranium and 120,000oz of gold. Up to the end of the business year on 30 June 2008, Olympic Dam produced 169,000t of copper cathode, 4,144t of uranium and 80,517oz of gold.

The expansion will be followed by a staged development of an open pit, with an eventual target output of 730,000t of copper and 19,000t of uranium. The company also said it is looking at shipping copper concentrate directly to smelters in China, which will cut the cost of producing cathodes at the mine.

ENVIRONMENT

Olympic Dam maintains storage facilities for all waste products. The plant has been designed so that any spillage of ore, concentrate or process slurries can readily be returned to the process circuit. The plant also includes comprehensive air pollution control equipment and both air emissions and noise are monitored. Extensive radiation monitoring of personnel and the environment is ongoing.

The Australian and South Australian Governments jointly determined that the proposed Olympic Dam expansion must be formally assessed through an Environmental Impact Statement (EIS).

Sunrise Dam, Australia

The Sunrise Dam gold mine lies on the eastern shore of Lake Carey in the northern goldfields of Western Australia, some 770km north-east of Perth, 220km north/north-east of Kalgoorlie and 55km south of Laverton. It is 100% owned by AngloGold Ashanti.

Formerly just an open cut mine, the operation comprises of both a large open pit and an underground mine. Each commenced operations in 1997 and 2003 respectively.

The mine achieved record production of 600,000 oz for 2007, largely due to the GQ zone in the open pit. Just under 80,000 oz was sourced from the underground mine.


The conversion of the mine’s diesel power station to liquefied natural gas (LNG) went according to plan in 2007 and the new LNG facility will start operating in the second quarter of 2008. AngloGold says that this will lead to drastically reduced energy costs as well as reduced greenhouse emissions.

Capital expenditure for the year amounted to A$35m (US $30m), and was spent mostly on the underground operation. Major items of expenditure included capitalised underground development in the Cosmo lode and the Sunrise Shear Zone decline, as well as costs relating to the north wall cutback and the expansion of the village.

Some 360 people are employed at the mine, 255 of whom are contractors.



Geology and reserves

Gold ore at Sunrise Dam is structurally and lithologically controlled within gently dipping high-strain shear zones (for example, Sunrise Shear) and steeply dipping brittle-ductile low-strain shear zones (for example, Western Shear). Host rocks include andesitic volcanic rocks, volcanogenic sediments and magnetic shales.

Total ore reserves as of the end of 2007 were 552,000 oz (underground), 1.1m oz (open pit). Total mineral resources were 3.078 m oz Au.



Mining and processing

The mine comprises a large open pit, which is now in its 11th year of operation, and an underground mine, which began production in 2003. All the mining is carried out by contractors and ore is treated in a conventional gravity and carbon-in-leach (CIL) processing plant which is owner-managed.



Production and costs

Production for 2007 rose by an expected 29% to hit a record 600,000oz, compared to 465,000oz for 2006.


The GQ zone in the open pit provided the anticipated large volumes of high-grade ore, which accounted for the increase in annual gold production. Some 80,000oz of gold came from the underground mine. Progress was made in developing access to the Cosmo, Dolly and Watu lodes, and 2,000m of underground capital development and 6,100m of operational development were completed. A total of 67,400m of diamond drilling was also completed.

Processing plant throughput in 2007 was 3.8Mt, slightly lower than the record throughput of 3.9Mt in 2006. Total cash costs fell by 8% to A$364/oz (up by 3% in US dollar terms to $306/oz).

Despite rising costs, the greater volume of ore mined, and the high value of the Australian dollar, the increase in production, due primarily to the higher grade of ore mined, resulted in the decrease in cash costs, year-on-year.

Munali Nickel Project, Zambia

The Munali project sits about 60km south of Lusaka in southern Zambia. It is wholly owned by Australian company Albidon Ltd, and currently consists of two deposits – Enterprise, also known as Munali Phase 1, and Voyager. Although it is billed as a nickel project, Munali also contains commercial quantities of copper, cobalt and platinum group metals (PGMs).

Development began in September 2006 following a positive feasibility study and gaining the necessary government permits and approvals. Production of ore for the ten-year project started in March 2008, with first concentrate being processed for stockpiling in late June 2008.

The project is said to be one of very few new nickel sulphide developments planned worldwide in the next few years, and is expected to have a final direct cash operating cost of about US$3 per pound of nickel in concentrate.

Munali is costing $125m in capital and about $25m in working capital and mine development, and has been funded by a mix of debt financing and equity.

Up to $80m of senior debt has been provided by Barclays Capital and the European Investment Bank as joint lead arrangers for the project; the Jinchuan Group, of China, has provided an extra $20m in subordinated debt.

The equity funding consists of $40m raised from Albidon shareholders, $15m from the Jinchuan Group and $10m from ZCCM Investment Holdings plc. The Jinchuan Group has a life-of-mine offtake agreement with Albidon for Munali, and its share of the funding is part of the agreement.

Geology

The deposit is of the "gabbro-hosted" class of nickel sulphide deposits and, as such, the geology and style of mineralisation are broadly similar to that of other gabbro deposits such as Tati in Botswana and Sally Malay in Australia.

Albidon's geologists believe that the mineralisation is associated with mafic to ultramafic intrusions that have been emplaced along major regional faults, with the type example being the Munali Gabbro intruded along the Munali Fault.

Resources

The latest total indicated and inferred resources for the deposits, at a cut-off grade of 0.6% nickel, are 10.3Mt at 1.2% nickel, 0.2% copper, 0.07% cobalt, 0.6g/t palladium and 0.3g/t platinum. This amounts to a current metal inventory at Munali of 123,500t of Ni and 246,800oz of PGMs.

Production

Following an initial ramp-up period through 2008, annual production is scheduled to reach full capacity by early 2009, when it will consist of 10,000–10,500t of nickel, 1,650t of copper, more than 480t of cobalt and 18,000oz of PGM from the 1.2Mt/annum underground Enterprise mining operation.

The ore is processed through a conventional flotation concentrator that consists of a simple crushing and grinding circuit, rougher, scavenger and cleaner flotation cells, followed by concentrate and tailings thickeners. The end product is a nickel-copper-cobalt-PGM concentrate which is sold to Jinchuan Group for smelting. Albidon recorded its first revenue from the sale of Munali concentrate in October 2008.

The water supply for the project comes partly from an onsite borefield. Also, groundwater inflow into the mine is pumped to the surface storage system for use in the processing plant, and water used to pump tails to the tailing storage facility is returned back to the processing plant for reuse.

Albidon has agreed a ten-year power supply deal with Zambian utility Zesco, in which a 25km, 33kV overhead power line has been built from the hydroelectric substation in Kafue. The average running load for the plant and the mine is estimated at 5MVA.

The principal mining contractor was Byrnecut Mining International Ltd, of Australia.

Blue Ridge PGE Project, South Africa

Ridge Mining's Blue Ridge project is situated on the Blaauwbank farm, about 30km south-east of Groblersdal, on the eastern limb of the Bushveld Igneous Complex (BIC), South Africa.

Ridge Mining started exploration work on the project in 2001 and completed a feasibility study at the end of 2005. Mine development, estimated to cost $170m, began in January 2007.

The project is a 50:50 joint venture between Ridge Mining and BEE partner Imbani, which had invested more than $100m of equity by December 2008. In December 2007, project finance agreements were signed with a consortium of banks consisting of the Development Bank of Southern Africa, the Industrial Development Corporation of South Africa, Standard Bank and Investec Bank for R715m, giving full finance through to first production, which is set for the end of 2008.

The cash operating cost assumption for Blue Ridge is $660/oz to produce platinum, palladium, rhodium and gold, giving an expected payback period of five years.

Geology

The eastern limb of the BIC, like the rest of the complex, consists of distinct rock strata, including three PGE-bearing layers known as reefs, with one being the UG2 chromitite reef.

The PGEs in the UG2 chromitite occur primarily in discrete mineral phases, varying from sulphide assemblages (predominantly cooperite, braggite, malanite and laurite) to those consisting of a significant component of alloys (such as Pt-Fe alloy) or various telluride, bismuthinide, bismuthotelluride, arsenide and sulpharsenide phases.

Resources

Total Measured, Indicated and Inferred resources are put at 89.9Mt, which includes 38.7Mt of Indicated resources from the neighbouring Millennium area, acquired by Ridge in March 2008, giving a contained 4PGE figure of 9.2Moz at an average grade of 3.2g/t. Total Proved and Probable reserves are nearly 22Mt to give a contained 4PGE figure of nearly 2.3Moz at 3.3g/t.

Production

The mine development is based on two decline shafts; a 700m-long belt decline, which will be used for transporting ore, and an 850m-long truck decline. During 2008 work focused on opening up production levels and faces in readiness for mining to begin in earnest. The plan is to mine only the higher grade portion of the reef, using a method called "Efficient Cut".

Before the plant was commissioned, Ridge Mining stockpiled more than 200,000t of ore – about two months’ worth of throughput for the plant in full production – allowing enough ore to be processed through the concentrator plant while the underground workings continue the ramp-up to full capacity, which is planned for the middle of 2009.

Annually the mine is forecast to produce about 75,000oz of platinum, 35,000oz of palladium, 22,000oz of ruthenium, 13,000oz of rhodium, 2,500oz of iridium and 1,500oz of gold over its initial 18-year life.

Processing

The ore will be processed using crushing, milling and flotation, then milling and flotation again to produce a concentrate. The ore will be fed through a primary ball mill and into primary roughers and cleaners, from where some of the feed will go to a care thickener and the rest to a secondary ball mill and roughers and cleaners, then on to tails thickeners. The concentrator plant is next to the entrance to the main decline shaft, which has a conveyor belt to bring the ore to the surface. Processing testwork show recoveries into concentrate of 82%-86%.

Once the mine has achieved steady-state production, Ridge Mining plans to boost its performance by re-treating the tailings and processing ore from Millennium, which it acquired from Lonmin in March 2008 for an undisclosed amount. Millennium has raised the original resources at Blue Ridge by more than 70% and allows the company to mine at a higher rate because it gives a greater strike length. An offtake agreement has been signed with Impala Refining Services for all the production from the mine.

Water will come from a combination of boreholes and the nearby Loskop Dam.

For electrical power, Ridge Mining signed up with state utility Eskom before the moratorium on new supply contracts. The first power line, which will supply about 70% of the mine’s requirements of 17MVA at full production, was installed in November 2008, with the rest due in 2009. To cater for any shortfall in the interim and for any unforeseen outages, however, Ridge Mining has back-up diesel generators that can provide all the mine’s power, albeit at higher cost.

The process plant, which will be operated by Minopex, was built by Bateman Engineering; Murray & Roberts Cementation are responsible for the underground mine development.

Boddington Gold Mine, Perth, Australia

The Boddington Gold Mine (BGM) is about 130km south-east of Perth in Western Australia. The largest undeveloped gold mine in the country, it is poised to become the highest producing mine once production ramps up over the next few years.

The $2.4bn project was initially a three-way joint venture between Newmont Mining, AngloGold Ashanti and Newcrest Mining. In 2006 Newmont bought Newcrest’s 22.22% share, bringing its interest to 66.67% and ending any Australian ownership. AngloGold owns the remaining 33.33%.
The original, mainly oxide open-pit mine was closed at the end of 2001.

Recent exploration has identified an extensive 19.57Moz gold bedrock resource, the basis of the Boddington Gold Mine Expansion Project. Approved in 2006, this will involve mining the hard gold/copper ore that lies beneath depleted oxide pits at Boddington’s original mine site.

The project has an attributable capital budget of between A$0.8bn and A$0.9bn. At year-end, the overall project was approximately 65% complete, with engineering and procurement activities nearing completion. Construction of the treatment plant was approximately 32% complete. At its peak the project is expected to employ some 2,000 workers. Once production begins it is expected that around 650 full-time staff will be required.

Based on the current plan, mine life is estimated to be more than 20 years, with attributable life-of-mine gold production expected to be greater than 5.7Moz.

Newmont and Anglo have focussed their exploration activities on the poorly explored areas of the greenstone belt outside the already identified Boddington Expansion resource. The exploration strategy is to identify the resource potential of the remainder of the greenstone belt, with the emphasis on high-grade lode-type deposits.

Geology and reserves

The BGM is located within the Saddleback Greenstone Belt (SGB), a fault-bounded sliver of Archaean volcanic and shallow level intrusive rocks, surrounded by granitic and gneissic rocks. The SGB produced over 6Moz of gold and is a highly prospective exploration area for further gold mineralisation in both large tonnage stock-work gold resources and high-grade lode-type gold resources.

As of the end of 2007, proven ore reserves at Boddington were 1.618Moz. Total mineral resources (measured, indicated and inferred) were 10.3Moz.

Mining

Built on the footprint of the original Boddington Gold Mine, the operation involves open cut mining from two large pits and is expected to produce an average 850,000oz of gold and 30,000t of copper a year for more than 20 years.

Production is due to commence in late 2008/early 2009 under the management of the Boddington Gold Mine Management Company, a 100% Newmont-owned company.

Production

Average attributable gold production in the first five years will be between 320,000oz and 350,000oz a year, while on an average life-of-mine basis, attributable production is estimated to be between 250,000oz and 270,000oz a year. Copper production, which will be sold as concentrate, is expected to be around 30,000t per year.

Cripple Creek and Victor, Gold Mine, Colorado Springs, USA

The Cripple Creek and Victor gold mine (CC&V) lies southwest of Colorado Springs in the US state of Colorado. For many years the Cripple Creek Mining District was a series of underground mines. Following the start in 1994 of the CC&V Cresson Project today it is a low-grade, open-pit operation.

In March 1999 AngloGold Ashanti acquired the Pikes Peak Mining Company, and interests in the Cripple Creek & Victor Gold Mining Company (CC&V) and the Jerritt Canyon Joint Venture. The stake in the Jerritt Canyon Joint Venture was sold to Queenstake in mid-2003.

Up until mid-2008 the CC&V mine was a joint venture two-thirds owned by AngloGold Ashanti with Golden Cycle Gold Corporation owning the balance. In mid-2008 AngloGold completed a full acquisition of Golden Cycle which resulted in its taking 100% ownership of the CC&V mine.

Development drilling, engineering analysis and permitting requirements for the mine life extension project are under review. The proposed extension is to include the development of new sources of ore and an extension to the additional heap-leach facility.

AngloGold says that gold production at CC&V will increase to between 290,000oz and 300,000oz for 2008 at a total cash cost of between $298/oz and $308/oz. Operational initiatives have been taken to minimise growth in the leach-pad gold inventory in 2008.

Capital expenditure of $28m is scheduled for 2008, to be spent mostly on major mine equipment purchases and the mine life extension project. The mine currently employees 338 full-time workers and 67 contractors.

In 2007 investigators revealed that a gang of employees had stolen some $3m-worth of gold from the mine since 1999. A number of former staff are now serving time in prison.

Geology and reserves

The Cripple Creek mining district is centred on an intensely altered alkaline, tertiary-aged, diatreme-volcanic, intrusive complex, approximately circular in shape, covering 18.4km2, and surrounded by Precambrian rocks. The rocks consist of biotite gneiss, granodiorite, quartz monzonite and granite.

The intersection of these four units and regional tectonic events formed an area of regional dilation which subsequently localised the formation of the tertiary-aged volcanic complex.

Higher-grade pods of mineralisation occur at structural intersections and/or as sheeted vein zones along zones of strike deflection. High-grade gold mineralisation is associated with K-feldspar + pyrite +/- carbonate alteration and occurs adjacent to the major structural and intrusive dyke zones. The broader zones of disseminated mineralisation occur primarily as micro-fracture halos around the stronger alteration zones in the more permeable Cripple Creek Breccia wall rocks.

The average depth of oxidation is 120m and is also developed along major structural zones to even greater depths. Individual orebodies can be tabular, pipe-like, irregular or massive. Individual gold particles are generally less than 20 microns in size and occur as broad zones of low-grade gold-pyrite mineralisation or as fracture zones containing high-grade gold-silver tellurides. Gold occurs within hydrous iron and manganese oxides and as gold-silver tellurides. Silver is present but is economically unimportant. Gold mineralisation can be encapsulated by iron and manganese oxides, pyrite, K-feldspar alteration and quartz.

Proven ore reserves as at December 2007 were 118,904t at a grade of 0.028. Total mineral resources (measured, indicated and inferred) were 494,124t.

Mining and processing

Up until the 1960s The Cripple Creek Mining District was mined initially by multiple underground operations until the 1960s, after which mining activities ceased for a period. Small scale surface mining started in the 1970s until the start of large-scale surface mining in 1991, leading eventually to the start in 1994 of the CC&V Cresson Project. Today, CC&V is a low-grade, open-pit operation.

Ore processing

The ore is treated using a valley-type, heap-leach process with activated carbon used to recover the gold. The resulting doré buttons are shipped to a refinery for final processing.

Production add costs

Production at CC&V fell slightly in 2007 to 282,000oz from 283,000oz in 2006. A total of 23Mt was placed on the heap-leach pad.

AngloGold attributed the production decline to the greater distance over which the gold-bearing leach solution had to be transported from the higher stacked ore to the leach-pad liner. This decline was compounded in the third quarter by delayed production from the leach-pad stacking levels.

There was an 8% increase in cash costs for 2007 to $269/oz from $248/oz in 2006, due in larger part to higher commodity prices, especially diesel fuel. This more than absorbed savings arising from lower contractor costs, while creeping inflation in the US economy added to the burden.

The higher gold price received throughout 2007 contributed to a 222% increase in adjusted gross profit to $74m. Capital expenditure for the year amounted to $23m (2006: $13m).

Highland Valley Copper Mine, British Columbia, Canada

Highland Valley copper/molybdenum mine is located 75km southwest of Kamloops, British Columbia, Canada. The Valley pit has yielded more than 1,100Mt of ore in its lifetime.

Highland Valley Copper was created as a partnership between Rio Algom and Cominco in 1986 to combine the Bethlehem and Lornex mines. Following the merger between Teck and Cominco in 2001, the 2000 takeover of Rio Algom by Billiton and Billiton's subsequent merger with BHP, the mine was then majority owned by Teck Cominco (63.9%) and BHP Billiton (33.6%). At the beginning of 2004, Teck Cominco exercised its pre-emptive rights over BHP Billiton's holding when the latter put it up for sale, and is now 97.5% owner of Highland Valley.

Production at the mine has decreased significantly the last few years due to an increased reliance on the lower-grade Lornex pit in line with a $C300m mine expansion project designed to push its life expectancy out to 2019. All of the mining equipment required for this work is now on site and commissioned. Highland Valley’s total copper production for 2007 was 136,000 tons, compared to 167,000 tons for the previous year. Molybdenem was just under 4 million pounds compared with just over 4 million for 2006.

Geology and reserves

Highland Valley is a low-grade (0.4% Cu) porphyry copper-molybdenum deposit associated with the younger intrusive phases of the early to mid-jurassic, calc-alkaline Guichon Creek batholith.

As of the end of 2005, proven and probable ore reserves totalled 318Mt grading 0.43% copper and 0.008% molybdenum. Mineral resources added a further 151.9Mt at 0.37% copper and 0.005% moly.

Reserves have been drill defined at 60 to 115 metre centres and resources at 125 metre centres. In 2007, a positive geotechnical study at Lornex added 197 million tons of indicated resource at a US$1.65/lb copper price and US$9.50/lb molybdenum price.

Open-pit mining

Open-pit mining is used in both the Lornex and Valley pits, with around 90% of the ore coming from the Valley pit. Three computerised Bucyrus 49R drills prepare blast hole patterns while nine P&H 4100A 37 yd³ electric shovels load ore into a fleet of Komatsu haul trucks for transport to in-pit crushers. In 2001, eight of the 170t-capacity trucks were replaced by six new 215t haulers. Further support is given by three water trucks, eight road graders, eight tracked bulldozers, three rubber-tyred bulldozers and one front-end loader.

The mine uses two semi-mobile in-pit crushers to minimise haul distances. Several kilometres of conveyors carry up to 12,000t/h of crushed ore to three stockpiles at the Highland mill. Pit operations are monitored and controlled by a Modular Mining Systems computerised dispatch system designed to maximise mine production. In addition minute-by-minute mapping is achieved by combining GPS navigation and survey with GIS mapping techniques.

Ore processing

The Highland mill, the world’s third largest copper concentrator, was constructed in the late 1980s by combining the original Lornex and Highmont mills. The complete Highmont mill was moved by road 10km from its former site to a new position adjacent to the Lornex plant.

The crushed ore enters two grinding stages in five parallel grinding lines incorporating two fully-autogenous mills, and three semi-autogenous (SAG) mills grinding a total of 5,400t/h. The second stage consists of eight ball mills reducing ore to sand-sized particles which feed the flotation circuits. The primary flotation stage extracts copper and molybdenum from the slurry before copper and molybdenum are separated. The molybdenum concentrate is mixed with a leaching brine in sealed, pressurised, heated vessels where residual copper is dissolved, leaving a high-grade molybdenum concentrate. Lastly, the copper and molybdenum concentrates are filtered and dried in gas-fired driers for shipping. Three 1m-diameter pipelines take the tailings 7km overland from the mill to the Valley tailings pond.

Concentrate transport

Copper concentrate is transported in bulk 40km to the rail yard at Ashcroft, then by rail to north Vancouver and finally by ship to overseas smelters. The molybdenum concentrate is packaged on site for shipment.

Environment

In 1997, Highland Valley Copper was presented with the 1996 British Columbia Reclamation Citation Award in the metal mining category for its outstanding achievement in reclaiming 1,000ha and planting 700,000 native trees and shrubs. Work to establish fish stocks in different water bodies on the property is continuing to be successful.

Production

As noted in the overview above, production at Highland Valley has declined significantly the last few years. Teck Cominco recently downgraded its production guidance for the 2008 full year from an initial 122,000 tons to 113,000 tons. Highland Valley’s total copper production for 2007 was 136,000 tons, compared to 167,000 tons for the previous year. Molybdenem was just under 4 million pounds compared with just over 4 million for 2006. Total ore mined fell also to 42.6Mt.
Teck Cominco has stated that mining of areas with higher clay content will continue throughout 2008 and 2009. Just over half of the total ore mined for Q3 2008 came from the lower grade Lornex mine compared with only 41% for the 5% to 30,500 tons.

The future

Waste stripping for Highland Valley's $C300m mine life extension is continuing with the pushback of the east wall in the Valley pit progressing well despite a minor geotechnical failure in the third quarter which is currently being rectified.

All the equipment is on site, permits received and contractors arranged. The pushback of the west wall necessary to extend the mine life to 2019 is scheduled to commence in early 2009 after the mine permit amendment received.

Ezulwini Uranium and Gold Mine, South Africa

The Ezulwini project involves the recommissioning of an underground uranium and gold mining operation located about 40km southwest of Johannesburg, on the outskirts of the town of Westonaria in Gauteng Province, South Africa. The mine is currently operating on a care and maintenance basis.

The mine was built in the 1960s and eventually reached production of 200,000tpm. In 2001, production at Ezulwini was halted primarily because of capital constraints compounded by weak gold and uranium prices.

The US$280m project is wholly owned by First Uranium through its local subsidiary Ezulwini Mining Company (Proprietary) Ltd. Existing infrastructure at the site includes two shaft headframes and four hoists, fans, compressors, generators, and underground equipment, as well as the necessary surface freehold required to operate the mine.

The capital expenditure for the project has been raised in three ways: through an IPO in December 2006, a convertible debenture in May 2007 and through proceeds from initial production. Payback is calculated at 5.2 years.

Geology

The project lies within the Witwatersrand Basin, an Archean (about 2.7 billion year-old) sedimentary basin that contains a stratigraphic sequence about 6km thick which consists mainly of quartzites and shales with minor intermittent volcanic units. Gold is hosted by the Upper Elsburg and Middle Elsburg Reefs underlying the mine. Uranium is found only in the Middle Elsburg Reef.

Mineralisation

Gold in the Upper Elsburg is found in the form of native gold and is associated with sulphide minerals, especially various forms of pyrite. Historically, 30-40% of the gold has been recovered by gravity processes, suggesting a high nugget effect.

In the Middle Elsburg Reef, gold is most commonly associated with pyrite, although some gold occurs in small blebs in arsenopyrite and cobaltite. Uranium is found in the form of uraninite. Mineralisation in the Middle Elsburg Reef has less of a nugget effect than the Upper Elsburg Reef.

Resources

At May 2007, there were no mineral reserves as defined by NI 43-101; the total Measured, Indicated and Inferred resources are put at just over 200Mt of about 32Moz contained gold and about 218 million pounds of contained U3O8. Reserves figures and revised resources estimates are expected in mid-2009.

Development

Part of First Uranium’s plans for developing the Ezulwini project has been to rehabilitate and re-engineer the main mine shaft by installing a floating steel tower, de-stressing the area where the shaft pillar intersects the shaft barrel, and building the uranium and gold processing facilities.

The company believes the rectification programme will enable the project to reach a production output of about 130,000 tpm by 2009 and 180,000 tpm by 2012, as the Upper Elsburg shaft pillar is developed and the Middle Elsburg uranium and gold section stopes are opened and expanded.

Production

The project is a conventional underground mine with breasting of the Upper and Middle Elsburg reefs. The ore is broken in the stopes and moved by slushers for loading into rail cars for transportation to the shaft. From the shaft and through the balance of the handling, the gold ores and the gold/uranium ores are kept separate. The ores are then hoisted to the surface for processing.

Ezulwini began gold production in July 2008, with uranium recovery starting in October 2008. Gold production is put at about 288,000 ounces a year while the average U3O8 production is expected to reach 2.1 million pounds a year. Full production will be attained in the fourth year and the mine has an expected life of about 19 years.

Processing

The choice of process is based on those previously used on the site. The ore is crushed and ground, then subjected to gold recovery by gravity and cyanidation. The uranium will be extracted by hot acidic leaching followed by solvent extraction and precipitation to form a concentrate (yellowcake). The uranium tailings will then be leached for gold recovery. Leaching will occur in a carbon in leach (CIL) process, after which gold will be electrowon and refined into doré bars.

Based on previous operating history, recovery rates of 95.5% for gold and 80% for U3O8 are expected.

Water comes from dewatering the mine, which the company says more than meets its needs.

Power comes partly from South African utility Eskom. In June 2008, Eskom agreed to increase its power commitment to Ezulwini from 40MW to 55MW. But in January 2008, Eskom had said it could not guarantee power supplies, so by July 2008, agreements had been finalised to obtain 10MW diesel generators to supplement the power from Eskom, and secure a steady supply of owner-generated electrical power with a total capacity of 24MW, inclusive of 14MW of existing standby units at the mine.

In September, First Uranium struck an exclusive deal with the Traxys Group to market all Ezulwini uranium.

The EPCM contractor for the project is MDM Engineering, of South Africa. The value of the contract is about US$200m.

TauTona, Anglo Gold, South Africa

In 2006 AngloGold Ashanti commenced a project to extend its South African TauTona gold mine to 3.9km. This was completed in 2008 making it the world’s deepest mine, surpassing the 3,585m deep East Rand Mine by a good distance. The name TauTona means "great lion" in the Setswana language.

The TauTona mine exists within the West Witts area not so far from Johannesburg in South Africa, near the town of Carletonville. TauTona neighbours the Mponeng and Savukamines, and TauTona and Savuka share processing facilities. All three are owned by AngloGold Ashanti.

Production at TauTona fell to 409,000 ounces in 2007, down from 474,000 ounces in 2006, due to increased seismic activity.

This required a review of the practice of mining of shaft pillars and high-grade remnants, and delays to the build-up in volume caused by opening up of the sequential grid. Capital expenditure in Siguiri was R2.5bn ($US71m) in 2007, with 56% committed to the development of ore reserve.

TauTona accounted for 7% of AngloGold Ashanti’s total 2007 gold production.

The mine was originally built by the Anglo American Corporationwith its 2km deep main shaft being sunk in 1957, with operations starting in 1962.

Since its construction two secondary shafts have been added bringing the mine to its current depth. The mine today has some 800km of tunnels and employs some 5600 miners. It is an extremely dangerous environment, with five workers losing their lives in 2007.

The mine is so deep that temperatures in the mine can rise to dangerous levels. Air conditioning equipment is used to cool the mine from 55°C down to a more tolerable 28°C. The rock face temperature currently reaches 60°C.

The journey to the rock face can take one hour from surface level. The lift cage that transports the workers from the surface to the bottom travels at 16 meters a second. The mine has also been featured on the MegaStructures programme produced by National Geographic.

Geology and reserves

The TauTona mine exists within the West Witts area slightly South West of Johannesburg in the North West of South Africa.

Two reef horizons are exploited at the West Wits operations: the Ventersdorp Contact Reef (VCR), located at the top of the Central Rand Group, and the Carbon Leader Reef (CLR) near the base. Owing to nonconformity in the VCR, the separation between the two reefs increases from east to west, from 400m to 900m. TauTona and Savuka exploit both reefs while Mponeng only mines the VCR. The structure is relatively simple with rare instances of faults greater than 70m.

The CLR consists of one or more conglomerate units and varies from several centimetres to more than 3m in thickness. Regionally, the VCR dips at approximately 21°, but may vary between 5° and 50°, accompanied by changes in thickness of the conglomerate units. Where the conglomerate has the attitude of the regional dip, it tends to be thick, well-developed and accompanied by higher gold accumulations.

Where the attitude departs significantly from the regional dip, the reef is thin, varying from several centimetres to more than 3m in thickness.

Total resources 2,615,000 ounces Measured resources 510,000 ounces Indicated resources 8,106,000 ounces

Mining and processing

Mining operations are conducted at depths ranging from 1.8km down to 3.9km following the recent expansion.

The mine consists of a main shaft system supported by secondary and tertiary shafts. The main mining method is longwall. TauTona shares a processing plant with Savuka. The plant uses conventional milling to crush the ore and a CIP (carbon in plant) to further treat the ore. Once the carbon has been added to the ore, it is transported to the plant at Mponeng for electro-winning, smelting and the final recovery of the gold.

Production

Gold production declined by 14% to 12,714kg (409,000oz) (2006: 14,736kg (474,000oz)), owing to a higher-than-expected fall in the volumes of ore mined. This was due to increased seismic activity in the vicinity of the CLR shaft pillar which is being mined, and at several highgrade production panels, where production was halted for limited periods during the course of the year. Both face length and face advance were negatively affected by seismicity during the year. The increased geological risk from this seismic activity necessitated re-planning regarding mine layout and mining methods.

Worsley Alumina Refinery, Australia

The Worsley Alumina Refinery is named after the historic timber settlement of Worsley, near Collie in the south west corner of Western Australia. The history of the project goes back to the early 1960s when a group of local entrepreneurs formed a firm to explore, develop and sell deposits of bauxite ore on the eastern side of the Darling Range, near Boddington.

Construction of a mine site and refinery began in 1980 and the first alumina was produced in April 1984. These days Worsley Alumina is a joint-venture partnership between BHP Billiton (86%), Japan Alumina Associates (Australia) (10%) and Sojitz Alumina (4%).

In May 2000, Worsley completed a $1bn expansion increasing annual production to 3.1 million tons.

The Worsley Alumina Development Capital Project (DCP), which commenced in 2004, was completed in 2007 at a cost of US$ 235m (US$ 188m our share), resulting in a 0.25 mtpa increase in alumina production (0.215 mtpa our share) to 3.5 mtpa.

In 2008 the partners announced a US$ 2.21bn ‘Efficiency & Growth’ expansion project at Worsley Alumina. This includes approximately US$ 70m of sustaining capital.

BHP says that the expansion project will lift capacity of the Worsley refinery from 3.5 million tons per annum (Mtpa) of alumina to 4.6 Mtpa (100% capacity) through expanded mining operations, additional refinery capacity and upgraded port facilities. Production is expected to commence in the first half of calendar year 2011. Worsley is currently the world’s fifth biggest bauxite mine.

BHP Billiton Aluminium President Jon Dudas said, "Worsley is one of the largest, lowest cost and most efficient alumina refineries in the world. This decision to invest in further production capacity underlines our confidence in the future of the alumina market. It also reflects our confidence in Worsley Alumina's ability to continue its excellent track record of production growth."

Alumina is carted by rail and exported through the Port of Bunbury. More than 1200 people are employed at the mine site and refinery. Many more jobs have been created through the employment of sub-contractors and through the support of local businesses and suppliers.

Geology and reserves

The Bunbury basalt has been dated at 135 and 128 Ma and overlies an erosional surface, thus marking the breakup of unconformity and volcanism in South Western Australia. It has been traced in the subsurface southwards and also offshore to the North East. Seismic evidence under the continental shelf between Perth and Bunbury shows that the Basalt flowed down an odd valley incising the continental margin. The Worsley mine has estimated reserves of 400mt.

Mining

Bauxite is mined from reserves mainly within State forest on the eastern edge of the Darling Range, near Boddington. The bauxite is crushed and carried 51km by a two-flight cable belt conveyor system to the refinery site at Worsley. It is then processed, and the separated alumina is carted by rail and exported through the Port of Bunbury.

Ore processing

The Worsley alumina refinery uses the Bayer process to produce metallurgical grade alumina, which is used as feedstock for aluminium smelting. Power and steam needed for the refinery are provided by a joint venture-owned onsite coal power station and a non-joint venture-owned on-site gas fired steam power generation plant.

Production

The partners have stated that the US$ 2.21bn ‘Efficiency & Growth’ project at Worsley Alumina will lift capacity of the Worsley refinery from 3.5 million tons per annum (Mtpa) of alumina to 4.6 Mtpa (100% capacity) through expanded mining operations, additional refinery capacity and upgraded port facilities.

Martabe, North Sumatra, Indonesia

Following review of the recently completed Definitive Feasibility Study (DFS), Oxiana's Board approved development of the Martabe gold and silver project in December 2007. The Board approval is subject to the receipt of final permits from the Government of Indonesia, which are expected by April 2008.

The Martabe project is seen as one of the more promising undeveloped mineral deposits in Asia, containing extensive proven reserves of gold and silver.

The Martabe Contract of Work (CoW) covers a 2,500km² area, the most significant part of which is the Purnama deposit.

It is a sulphidation epithermal deposit, which was discovered in 1997 through regional stream sediment sampling by Normandy Anglo Asia Ltd. Since then other deposits have also been discovered and resources at Martabe now stand at 6 million ounces of gold and 60 million ounces of silver.

Oxiana became the owner of the Martabe project through the acquisition of Agincourt Resources Limited in early 2007.

The Martabe project is located close to existing infrastructure and facilities and is bisected by the Trans-Sumatra highway. Supplies of grid power and process water are available, and the port of Sibolga is approximately 30km from the site.

Subject to approvals the Martabe project will move into construction in 2008 and then into production at the end of 2009.

GEOLOGY AND RESERVES

Martabe's high sulphidation gold deposits exist within a sequence of tertiary volcanic and sedimentary rocks near a fault splay which is part of the Great Sumatran Fault complex. Episodic fault activity has been responsible for pulses of high-level magmatism and development of multi-stage phreatomagmatic breccias, flow dome complexes, hydrothermal alteration and gold mineralisation observed in the district. Gold mineralisation occurs in a number of deposits over a strike length of 7km.

The most significant and best defined of these is the Purnama deposit, where a resource of 66.7 million tonnes containing 1.74g/t Au and 21.5g/t Ag for a total of 3.7 million ounces of gold and 46 million ounces of silver has been defined by diamond drilling.

Two adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other virgin targets are expected to provide upside. Total resources are 6Moz of gold and 60Moz of silver. Reserves are 2.3Moz of gold and 30Moz of silver.

MINING

Mining of the Purnama deposit will be undertaken by conventional open-pit methods with a low average strip ratio of 0.7:1. The processing plant will be a large-scale ore processing plant. The plant and infrastructure will be designed to allow for future expansion.

ORE PROCESSING

Oxiana expects to be treating 4.5 million tonnes of ore per annum using proven SAG and ball milling, and carbon-in-leach (CIL) technology. Recoveries are expected to average 76% for gold and 55% for silver.

Production on average will be 250,000oz of gold and approximately 2Moz of silver per annum over an initial nine-year production life.

Martabe's development cost has been put at $310m and mining cash costs are estimated at $270/oz. First production is expected to start in December 2009.

THE FUTURE

The potential to discover mineralisation elsewhere in the CoW area is considered high and exploration is ongoing at a number of other prospects. Two adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other virgin targets are expected to provide upside.

A 5% interest is held in trust for local Indonesian stakeholders.

Kaltim Prima Coal Mine, Indonesia

Kaltim Prima, one of the new generation of Indonesian thermal coal producers, is located in north-eastern Kalimantan. It is operated by PT Kaltim Prima Coal (KPC), which from the project's inception up to late 2003 was jointly owned by BP and Rio Tinto. The Indonesian government receives a royalty equivalent to 13.5% of the revenue. The operation is self-contained and employs some 2,700 people.

Although BP and Rio Tinto's Contract of Work required the companies to divest part of their holding to local interests, up until 2003 no Indonesian purchaser was able to raise the finance needed to buy them out.

In mid-2003, the companies announced the sale of their holdings in KPC to PT Bumi Resources for a cash price of $500m, including assumed debt. PT Bumi Resources already owned PT Arutmin Indonesia, another major Indonesian coal producer, and has interests in oil, natural gas and mining, amongst other commercial sectors.

In 2006, PT Bumi announced the sale of all its coal holdings to PT Borneo Lumbung Energi for $3.2bn. However, the deal subsequently failed, although PT Bumi later indicated that it still intends to divest a proportion of its holdings.

PROJECT DEVELOPMENT

BP and CRA (now Rio Tinto) successfully tendered for a 7,900km² licence area in eastern Kalimantan in 1978. Exploration from 1982–86 indicated reserves of 112Mt of export-quality thermal coal. Construction began in 1989 and the mine was commissioned in 1991 as a 7Mt/y operation at a cost of $570m.

The mine has subsequently been expanded, with a sales target of 20Mt/yr by 2005. PT Bumi is planning further expansion to 30Mt/yr, plus the development of the Bengalon reserve, some 25km from the existing Sangatta operations.

In mid-2004, PT Bumi awarded the Australian contractor, Henry Walker Eltin, a $1.2bn, ten-year contract for infrastructure development and mining services at Bengalon, which will have a 6Mt/yr initial capacity.

GEOLOGY AND COAL QUALITY

Pressure and heat associated with an igneous intrusion has increased the rank at Kaltim Prima to high-volatile bituminous coal. A total of 13 seams range in thickness from 1m to 15m; typically in the range of 2.4m to 6.5m. Seam dips vary from 3° to 20° at the outcrop. The seams are very clean in terms of mineral matter and sulphur and, at 4–8% in some areas, the in-situ moisture content is low.

As of the end of 2005, PT Bumi cited reserves at Sangatta at 621Mt, plus 165Mt at Bengalon. The company also has measured and indicated resources of some 3,700Mt.

As of mid-2004, PT Bumi cited reserves at Sangatta at 462Mt, plus 157Mt at Bengalon. The company also has measured and indicated resources of some 2,200Mt.

The operation produces two main export products. Prima Coal is a high-volatile bituminous steam coal with high calorific value, very low ash, low sulphur and low total moisture. Pinang Coal is similar but has a higher moisture content. Quality parameters are:

Product ***********PrimaCoal **********Pinang Coal

Moisture (total) *******9.5% ***************14%
Ash ***************** 4% ******************6%
Volatiles **************39%*************** 39%
Fixed carbon********** 52% ***************46%
Total sulphur********* 0.5% **************0.5%
Heating value (adb) **30.1MJ/kg ********27.6MJ/kg
Heating value (gar) **28.5MJ/kg *********26.0MJ/kg

adb = air-dried basis

gar = gross, as received
KPC blends run-of-mine coal from its various pits to ensure product consistency.

As of end-2001, Kaltim Prima had mineable reserves totalling 462Mt, plus measured and indicated resources of nearly 2,200Mt.

MINING TECHNOLOGY

KPC operates six to 12 individual open pits at any time, the average stripping ratio being 7.5bcm (bank cubic metres) of overburden per tonne of coal. The overburden material degrades quickly on exposure to the atmosphere and generally provides easy digging.

Some overburden rock requires blasting to ensure adequate fragmentation for the shovels. KPC carries out its own mining in most of the pits, but also contracts out a smaller proportion of its mining requirements.

The mine's loading fleet consists of over 20 large hydraulic shovels and backhoes with bucket capacities of up to 34m³. Leading suppliers include Hitachi, with nine EX3500 machines and six EX1800s, and Liebherr, which has six R996 Litronic shovels/backhoes on site.

Overburden haulage involves a fleet of 137 trucks, including Caterpillar 785s and 789Bs with capacities of 135–185t, Cat 777s (85t) and Komatsu HD785s (also 85t). Truck scheduling is carried out using a GPS-based Mincom dispatch and management system.

COAL PROCESSING

With selective mining, over 90% of the run-of-mine coal only needs crushing and blending to give export-quality Prima Coal. Coal from the seam roofs and floors contains more mineral material, and so has to be washed. This 'dirty Prima' and Pinang material is handled separately from the 'clean Prima', with individual streams for the different raw materials.

After crushing to –50mm in Gundlach rolls crushers, the washing plant uses dense medium cyclones for 0.5mm to 50mm feed, and spirals for the –0.5mm material, products being dewatered in centrifuges before blending into the Prima Coal stockpile.

OVERLAND TO THE PORT

The mine site contains separate stockpiles for the Prima and Pinang products, holding 60,000t and 35,000t respectively. Coal is reclaimed and transported by a 13km-long, 2,100t/h-capacity overland conveyor to Kaltim Prima’s dedicated port facilities at Tanjung Bara.

Further stockpiles hold a live capacity of 350,000t of Prima and 150,000t of Pinang coals. Coal is transferred directly from mine to ship whenever possible.

Vessels of up to 220,000dwt can be handled by the port, with loading facilities at the end of a 2km-long jetty. Twin quadrant loaders can each handle up to 4,700t/h, the normal loading throughput.

PRODUCTION

Since production began in 1992, Kaltim Prima has increased its output year-on-year, from 7.3Mt in its first year to some 17Mt in 2002 and 2003. PT Bumi is now expanding the Sangatta operation to 30Mt/yr, with a further 6Mt/yr to come from Bengalon.

The operation produced 27.6Mt in 2005, with a target for 2006 of 36Mt of coal and some 700Mt of overburden.

Argyle Diamond Mine, Kimberley, Australia

The Argyle mine, located in the Kimberley region in the far north east of Western Australia, is the world's largest single producer of diamonds. The mine lies some 550km south west of Darwin by air. The region is remote, rugged and hot, with temperatures of over 40°C during the wet season from October to March.

When production began in 1985, most of the workforce was Perth-based and operating on a two-week 'fly-in, fly-out' basis – requiring the construction of a complete camp infrastructure to support the operation. In recent years, however, a programme of localisation has been underway to base workers in East Kimberley.Article Continues

Argyle is operated by the Argyle Diamond Mines Joint Venture, wholly owned by Rio Tinto since 2002. The initial mining lease expired in 2004 and has been renewed; the current open-pit operation is scheduled to conclude in 2008, with underground developments underway to extend the life of the mine to 2018.

GEOLOGY AND RESERVES

The discovery of the Argyle orebody marked the first time that a commercial diamond occurrence had been identified that is not hosted in kimberlite. The AK1 pipe at Argyle instead consists of olivine lamproite, from which diamonds had been eroded to form placer (alluvial) deposits nearby.

The deposit was discovered in 1979 by the Ashton joint venture, following some 12 years of exploration by various companies in the area. The discovery of alluvial diamonds led directly to their source, the AK1 pipe.

At the end of 2005, total measured, indicated and inferred resources in the AK1 pipe were 83Mt at a grade of 2.7ct/t, with a further 28Mt at a grade of 0.2ct/t in residual alluvial material. Proven and probable reserves totalled 111.7Mt grading 2.2ct/t, and containing 247.1Mct.

MINE DEVELOPMENT

Development of Argyle was a two-stage process. Alluvial diamond mining took place between 1983 and 1985, when the AK1 pipe came into production. Since then, this has been the principal source of ore, supported by lesser amounts of alluvial material.

Argyle operates as a conventional open-pit mine, with both lamproite and waste rock being drilled and blasted before being loaded out in a shovel-and-truck operation. The mine operates Bucyrus, P&H and Tamrock Driltech rotary drill rigs, O&K RH 200 hydraulic excavators and a fleet of Caterpillar 789B and Unit Rig MT4400 haul trucks, supported by Caterpillar wheel loaders, bulldozers and other ancillary equipment. The mine operation is monitored and vehicle movements are controlled using Modular Mining Systems' dispatch system, which uses a global positioning system (GPS) for accurate location of drills and other plant. Contract mining is used for the alluvial ores.

Much of the waste rock is highly abrasive quartzite, and Argyle has been a long-term user of the Skega dump body system in its haul truck fleet. This uses a suspended, reinforced rubber liner in place of conventional steel plating in the hauler body.

ORE PROCESSING

Argyle's processing plant uses a crushing, screening, heavy-medium separation (HMS) and X-ray sorter diamond recovery flowsheet. 3mm ore forms the feed for the heavy-medium separation circuit while -1mm material is rejected to the plant tailings.

Two-stage heavy medium cyclones with a specific gravity of 3.0 form the heart of the separation process, with material denser than the cut point forming the diamond-bearing concentrate. X-ray sorting separates the diamonds from residual waste in the HMS concentrate, the recovered stones being acid washed before sorting for shipment.

PRODUCTION

Since coming into operation, Argyle has produced over 670Mct of diamonds, with an average stripping ratio in the open pit of around 7t of waste being moved for each tonne of ore mined. Peak production was in 1994, at 42.8Mct. The pit is now so deep that the lack of manoeuvrability in the bottom has come to hinder mining operations.

In 2005, the mine processed 9.0Mt of lamproite ore to recover a total of 30.5Mct, its output having virtually regained the level achieved in 2003. 2004 production was markedly lower, with lower-grade and stockpiled ores being processed. In 2006, the operation treated 8.4Mt of ore to recover 29.1Mct. Argyle's production consists of 5% gem and 70% near-gem stones, with the remaining 25% being industrial diamonds. The mine also produces between 90% and 95% of the world's pink diamonds.

THE FUTURE

With the AK1 open pit scheduled to cease production in 2008, since by this time a point will have been reached where the lamproite 'pipe' narrows and continues at greater depth, making continued access to the ore by open methods uneconomic. Back in 2001, the company began looking at the option of developing an underground mine – launching a pre-feasibility study to investigate all of the possible alternatives and transition strategies.

The results of this led, in early 2003, to the approval of funding for a full feasibility study for a block cave underground mine and the construction of an exploratory decline. Both were completed during 2005 and in December of that year the decision was made to go ahead with the underground mine.

Work on the A$1.6bn development began on schedule and production from the new mine should begin in mid-2009; a low-grade open pit expansion is also planned which will help extend productive mine life until 2018.

Production capacity is predicted to average around 20Mct/y, compared with the current long-term average of 34Mct/y – and the high costs of the redevelopment have led some in the industry to speculate that the mine might ultimately be put up for sale.

In addition to the shift to underground working, the company is also in the process of localising most of its workforce in East Kimberley, aiming to have 80% based there by 2010 – and half of them Aboriginal. This forms part of major corporate step-change, described as 'reassessing Argyle's relationship to the area in which it mines'.

Samancor Chrome Mines, South Africa

With low electricity prices, South Africa has been able to expand chromite and ferrochrome production more or less continuously since the AOD process was developed in the 1960s to use ferrochrome smelted from lower-grade ores. Samancor was created in 1975 and its Chrome Division grew, mainly by acquisition, to become the world's largest integrated ferrochrome producer and South Africa's leading exporter of chemical-grade chromite and foundry sand.

Until June 2005, Samancor was owned by BHP Billiton and Anglo American plc, at which time the two companies sold the bulk of Samancor Chrome’s wholly-owned interests to the Kermas Group. Xstrata and the Black Economic Empowerment company, Merafe, took over Samancor's stake in Wonderkop and certain chromite resources. In 2006, Kermas South Africa sold a 28% equity interest in Samancor Chrome to a Black Economic Empowerment consortium, Batho Barena.

Innovations introduced by Samancor have included direct chromite reduction and DC smelting. Samancor Chrome has subsequently streamlined its mine management while upgrading its smelters and improving non-metallurgical concentrates production. To stabilise ferrochrome capacity utilisation, Samancor Chrome formed export production joint ventures with Far Eastern customers and a joint venture with local competitor Xstrata to build two new furnaces at the latter's Wonderkop smelter.

Samancor Chrome now provides employment for 5,500 people at two mines, three production plants and the corporate head office in Johannesburg.

GEOLOGY AND RESERVES

Samancor’s operations are centred on reserves held in the Bushveld layered intrusive complex, which contains approximately 70% of the world’s economic chrome ore reserves in the Lower Group (LG) 6 and Middle Group (MG) 1 seams. LG6 has a Cr2O3 content of 43-47% and a Cr:Fe ratio of 1.6:1, while MG1 averages 42% Cr2O3 and a Cr:Fe ratio of 1.5:1. LG6 is typically 1.1m thick and MG1 1.4m, both dipping gently.

At end-June 2002, Samancor's proven reserves totalled 16.6Mt grading 42.4% Cr2O3 with probable reserves of 23.4Mt. Total resources are estimated to be sufficient for 200 years mining at current rates.

MINING

Samancor has two mining centres: Eastern Chrome Mines (ECM) in the Steelport area of Mpumalanga Province and Western Chrome Mines (WCM) near Rustenberg and Brits in Northwest Province. Both units now comprise three underground mining areas, each with a hoisting shaft, while WCM also includes an open-cut mine. Overall capacity is approximately 5.8Mt/y of run-of-mine ore.

Underground, Samancor relies mainly on room-and-pillar mining, typically with low-angle adits connecting to a horizontal access level. Thin seams limit the scope for mechanisation and blasting relies on drilling with hand-held pneumatic jackleg units. The ore is mined either up-dip or down-dip in rooms approximately 20m wide, with the roof supported by ore pillars. Scrapers haul chromite to ore passes that load trains on the haulage level. The trains load a conveyor in the hoisting adit. The dimensions in the Waterkloof/Millsell mining block have allowed WCM to replace scrapers with load-haul-dump machines.

The open cut mine uses 8t-capacity loading shovels and 40t-capacity trucks.

ORE PROCESSING

Samancor’s concentrators – three for ECM and three plus a fluidised bed dryer for WCM – are individually configured to treat specific feed and yield a particular product range.

Bushveld chromite is conveniently milled to recover a fine concentrate by gravity and elutriation techniques. However, ferrochrome furnaces need a porous charge so lumpy ore and chips must also be recovered by dense medium separation to mix with the fines. The fines may be agglomerated at the smelters, either by briquetting or using the Outokumpu pelletisation and preheating system, to reduce the amount of lumpy ore and chip required. Further gravity separation and elutriation steps yield the specific grain sizes and reduced levels of impurities, such as silica, required for the chemical and foundry sand markets.

Samancor currently operates a flexible smelting system with capacity in excess of 1Mt/y of ferrochrome at three sites.

PRODUCTION

In 2000, Samancor Chrome produced 3.7Mt of chromite and 1.06Mt of ferrochrome. Output fell in the depressed market of the following two years but recovered to 1.02Mt of ferrochrome in 2003. Total saleable production in the year to June 2004 was 1.026Mt, and that in the year to June 2005, 954,000t. Approximately 0.5Mt/y of chromite is exported, mainly as chemical-grade or foundry sand.