Inside Mining Nov/Dec 2011 by 3S Media

Winne of the 2010 PICA Winner Cover of the Year - B2B Publishing

www www.miningne.ws

MEDIA

THE KNOWLEDGE YOU NEED

HOT SEAT

Rob Bennett, MD of ProMet Dadi Africa, on partnering with China

ENVIRONMENTAL DAMAGE Directors' liability

BENEFICIATION

ining FROM THE INDUSTRY EXPERTS

ROYALT Y

TAX

Job creation and economic growth

PANEL DISCUSSION The power of mining software

DRILLING

Certiﬁed industry standards

NEDBANK CAPITAL Green Mining award winners

A heavy weight on mining profitability? ISSN 1999-8872 • R30.00 (incl. VAT) • Vol. 4 • No. 7 • November/December 2011

CONTENTS

T H E K N O W L E D G E YO U N E E D

ining

November/December 2011

FROM THE INDUSTRY EXPERTS

ON THE COVER

Finance

Will royalty tax impact on production optimisation P6

EDITOR’S COMMENT

Ringing the changes

MINING NEWS

4 6

The top mining stories making the news this month FINANCE ROYALTY TAX - Impacting production optimisation HOT SEAT PROMET DADI - Turnkey solutions for Africa and beyond

REGIONAL FOCUS SOUTH AFRICA – Not done just yet...

TALKING POINTS

BENEFICIATION - Prioritising the mining value chain

SHEQ COMPLIANCE - Polluting across the board

19 22

SUSTAINABILITY - Turning environmental benefits into community profits

PANEL DISCUSSION MINING SOFTWARE - Making mining safer and more productive

TECHNOLOGY MAINTENANCE - Taking maintenance to new heights

MAINTENANCE - Preventing expensive equipment failure

37 42 44

DRILLING - Setting certified industry standards DRILLING - Putting a muffler on noise pollution TRUCKS - Green technology inhibited by local fuel quality

LAST WORDS PROSPECTING IN AFRICA - It’s a man’s country

50 51

CETERUM CENSEO - Will there be blood in the streets? Inside Mining 11&12 / 2011

EDITOR’S COMMENT Publisher Elizabeth Shorten Editor Tersia Booyzen tersia@3smedia.co.za Contributing Editor Dr Willem Smuts Contributor Ameerah Griffin Creative Chief Executive Frédérick Danton Chief sub-editor Cindy Maulgue Sub-editor Danielle Hugo Marketing Manager Martin Hiller Production Manager Antois-Leigh Botma Production coordinator Jacqueline Modise Financial Manager Andrew Lobban Administration Tonya Hebenton

Ringing the changes

Subscription sales Nomsa Masina Distribution coordinator Asha Pursotham Printers United Litho Johannesburg Tel: +27 (0)11 402 0571

___________________________________ Advertising Sales

Stacey Glad Tel: +27 (0)11 467 6224 Cell: +27 (0)83 567 0073 stacey.glad@lantic.net ___________________________________

We have almost

reached the end of 2011 and what a year it has been. I’ve never been sure whether the Chinese meant “may you live in interesting times” to be a curse or a blessing, but there have been very few dull moments since the start of the economic crisis in 2008 and it seems set to continue. I recently sat next to a senior banking executive at the Nedbank Green Awards and, talking about the economy, she noted that it is unlikely that Europe’s economy would recover in our lifetime – quite a scary thought in some ways as Germany

MEDIA

No. 4 5th Avenue, Rivonia 2191 PO Box 92026, Norwood 2117 Tel: +27 (0)11 233 2600 Fax: +27 (0)11 234 7274/5 www.3smedia.co.za ___________________________________ Annual subscription:

South Africa: R270.00 FOR 12 ISSUES (incl VAT & postage) SADC countries: US$ 60 Foreign: US$ 80 ISSN 1999-8872 Inside Mining Copyright 2011. 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.

Laura Cornish has joined the 3S Media mining team as managing editor was South Africa’s major export market until the crisis hit. The East, and especially China, has now taken over that position and it is interesting to note that they are also actively investing in South Africa. They have recently bought a stake of 20% in ProMet Africa and the company is extremely positive about this development, as you can read in this issue’s Hot Seat. Then there is also the National Union of Mineworkers, who issued an unprecedented statement supporting safety before jobs. The issue centres on the automation of mining which takes miners out of the riskiest areas and replaces them with ‘machines’. In our Roundtable, we look at software development and implementation in the mining industry and how it has already improved both safety and productivity and will continue to do so as technology progresses. While automation could potentially have an extremely negative impact on employment, the government has formulated, and budgeted for, major developments and improvement in the mining value chain. While it is a little contentious given the state of South Africa’s energy supply,

beneficiation, as conceptualised by the government, could be the only way to create sustainable economic development in the country. You can read about their plans in this issue and that, combined with the R25 billion which has been set aside in the interim budget to improve our infrastructure, may convince you that they are putting their money where their mouths are. Closer to home, we are also very happy to announce that Laura Cornish has joined 3S Media’s mining team as managing editor. Laura has extensive experience as an editor in the mining industry and we are sure that she will bring lots of new energy and ideas to Inside Mining and our electronic partner, www.miningne.ws. Last, but by no means least, the mining team would like to wish you well over the upcoming festive season. We hope you enjoy a well-deserved rest and that 2012 will be a healthy, happy and prosperous year for you and your loved ones. Take care out there!

Inside Mining 11&12 / 2011

MINING NEWS www.miningne.ws

The top The ttop op mining mmining ining storie sstories to ries m making amaking king tthe he the n news ewnews s iin n tthe heinp past ast m month onthmonth The stories the past Wits Gold scouts mines near DBM Source: www.businessday.co.za

compiled by Ameerah Griffin

| AFRICA | South Africa Chamber lauds government’s recognition of mining constraints Source: www.miningne.ws

The Chamber of Mines has welcomed statements made by the minister of finance, Pravin Gordhan, regarding the constraints inhibiting the growth of the mining industry during his Medium Term Budget Policy Statement. The Chamber was particularly encouraged by the reference to energy constraints, inadequate transport capacity and uncertainty in the regulatory environment as some of the major constraints faced by the mining industry. “We are grateful that the minister recognised these constraints, some of which are on the agenda of the Mining

CÔTE D’IVOIRE

Industry Growth Development and Employment Task Team (MIGDETT). As the Chamber of Mines, we would also like to add the prices of products and services provided by stateowned enterprises as one of the major constraints inhibiting the growth of the mining industry -- in particular, electricity, transport and, potentially, water. We hope that the government will continue giving these constraints due attention”, said Dr Frans Barker, commenting in his capacity as acting chief executive of the Chamber of Mines.

President opens new Randgold mine in Côte d’Ivoire

Source: www.miningne.ws

The Honourable Alassane Ouattara, president of Côte d’Ivoire, officially opened Randgold Resources’ new Tongon gold mine in the north of the country. Also at the ceremony were the minister of Mines, Oil and Energy, Adama Toungara, a number of ambassadors and senior government officials from the Côte d’Ivoire, as well as Mali and the DRC, and representatives of Randgold’s international and African business partners. The mine poured its first bar of gold in October last year, on time and on budget, despite the unrest which followed the disputed outcome of the presidential election in the country at that time. Profitable from its first quarter, it has since produced more than 250 000 ounces of gold and recently commissioned its hard rock crushing circuit.

Inside Mining 11&12 / 2011

WITS Gold, which has embarked on a new strategy under its new CEO, Philip Kotze, will complete a pre- feasibility study in the second quarter of next year into starting a gold mine in the Free State as it scours the market for acquisitions. Wits is looking for gold mines near its exploration project, known as DBM, in the southern Free State. The mine must have at least five years’ of life left, and potential for production beyond that. Harmony Gold has a swathe of mines, some of them old and nearing the end of their lives, in the neighbourhood. It has closed a number of unprofitable mines recently. Gold Fields owns Beatrix to the south of DBM.

Liberia West Peak Iron raises $490 000 for iron ore exploration in Liberia Source: www.proactiveinvestors.com.au

West Peak Iron has raised $490 000, which will fund the completion of a detailed geophysical survey on the company’s Liberian iron ore licences. The money was raised through the issue of 3.5 million shares at $0.14, including a free one for two unlisted company option, exercisable at $0.20 on or before 30 June 2013. The company has five licences in Liberia, a historic iron ore producing province that also hosts Sesa Goa’s Bomi Hills joint venture, with 50 million tonnes at 68% iron, and China Union’s Bong Range, with 1 billion

tonnes at 35% iron. West Peak’s licences cover a total of 1 007 square kilometres in the Grand Bassa, Bomi, Bong and River Cess counties, close to infrastructure, both existing and in the process of being upgraded, including rail, road and port.

| NORTH AMERICA | USA Titan Iron Ore announces commencement of drilling at Wyoming Iron Source : www.marketwatch.com

Titan Iron Ore has unveiled a targeted first phase drilling programme of 1 700 feet at its wholly-owned Wyoming Iron Complex properties, located in Albany County, Wyoming. A total of three holes drilled by Union Pacific Resources and the State of Wyoming (1995) will be twinned in an effort to duplicate the results of those earlier programmes. One hole will be extended to a planned depth of greater than 700 feet to expand upon the vertical potential of the ore body. All work during this phase is planned for the Strong Creek property, the larger of the two prospects within the Wyoming Iron Complex. The drilling is anticipated to be diamond core of HQ size (2½ inches in diameter). The programme is expected to start before the end of October, with laboratory results available before the end of calendar year 2011.

Canada Agnico to indefinitely suspend Quebec mine production Source: www.reuters.com

Agnico-Eagle is suspending operations at its Goldex mine, at Val d’Or, Quebec, indefinitely because of water inflow and ground instability, sending its shares sharply lower.

MINING NEWS www.miningne.ws

ASIA

Indonesia’s Freeport copper mine declares force majeure

| EUROPE | Portugal

Source: www.bbc.co.uk

The US mining giant, Freeport-McMoran, has said it is no longer liable for contracts on sales from its strike-hit copper and gold mine in Indonesia. The Grasberg mine in restive Papua province has been hit by six weeks of action over pay and conditions. The declaration of force majeure frees Freeport of some of its contractual obligations to customers of the world’s second largest copper mine. The company has drafted in non-unionised contract workers to maintain production, but on Wednesday said it became clear it would be unable to meet its supply commitments. “As previously reported, the strike action at PT Freeport Indonesia has impacted production and concentrate shipments,” Freeport Indonesia spokesman, Ramdani Sirait, said in a statement.

Rio in talks to explore Portuguese iron ore mines Source: www.marketwatch.com

Australia’s Rio Tinto is holding talks with the Portuguese government to take up iron ore exploration projects in the country, said the Ministry of Economy. Talks aren’t exclusive, and are part of a wider effort by Portugal’s new government to identify natural resources that can be explored in the country, which is currently under a EUR78 billion financial aid programme, a ministry spokesman said in an emailed statement. A person familiar with the talks said Rio Tinto is interested in northern Portugal’s Torre De Moncorvo mines, which are considered to be among Europe’s largest iron ore deposits. Investments from the company could total more than EUR1 billion, the person said.

Sweden Toronto-based Agnico will write-off its investment in Goldex, resulting in a pretax, third-quarter charge of about $260 million. On an after-tax basis, the charge will be about $170 million, or $1 a share, the company said. The write-off prompted analysts at Credit Suisse and Macquarie to downgrade the stock, while analysts at a number of other brokerage firms lowered their price targets on AgnicoEagle shares.

| AUSTRALIA | Vale warns taxes have increased risk of investing in Australia Source: www.theaustralian.com.au

Vale employs 1 500 people at its mines in Queensland’s Bowen Basin and NSW’s Hunter Valley, and mineral resources

rent tax could affect the flow of foreign investment in Australia’s resources sector. “The development of legislation to support the MRRT and carbon tax, along with various state government legislations, is contributing significantly to an increase in sovereign risk of investment in Australia’s resources sector,” the company warned in a submission to Treasury on the resource tax reforms. The comments highlight concerns in the business community that Australia has become a more risky investment destination because of mining and carbon taxes. Business Council of Australia president, Graham Bradley, has warned that his members, chief executives of top-100 companies , were concerned that several policies were adding to sovereign risk.

Scandinavian Resources’ Harrejaure Project hits 110 m, at 47% iron Source: www.proactiveinvestors.com.au

Scandinavian Resources has received high grade iron assays from the first batch of results from drilling the Harrejaure Project, located 1 300 kilometres north of Stockholm in Sweden.

The exceptional grades were from the first two of five diamond drill holes, with multiple intervals, returning grades better than 70% iron (Fe). The company would be pleased by the width of mineralisation in conjunction with the very good iron grades. Scandinavia will investigate the tonnage potential during the 2012 summer drilling season.

| SOUTH AMERICA | Colombia Colombia mining projects delayed over environmental issues Source: www.colombiareports.com

Colombia’s foreign-led Angostura and La Colosa mining projects have been delayed due to environmental concerns. Eco Oro announced that it will develop the Angostura gold and silver mining project as an underground-only operation. The announcement was made following the decision to withdraw its open-pit proposal due to protests that the project may harm water resources that supply 2.2 million inhabitants. According to a source, the Angostura projects were to have processing plants located at between 11 000 and 12 500 feet above sea level for their open-pit mine. Areas above 10 000 feet are considered by Colombian law to be ‘paramos’, neotropical ecosystems where mining is prohibited.

Inside Mining 11&12 / 2011

FINANCE ROYALTY TAX

Impacting production optimisation The new mineral royalty regime for South Africa was signed into law in November 2008, to compensate the state for the depletion of minerals through a royalty charge payable from 1 March 2010. By Professor Fred Cawood

he main features of the royalty regime are firstly that one of two formulae is used to calculate the rate of payment, secondly, this choice of formula requires an assessment on refinement, and thirdly, both formulae are payable on a base of gross sales. The Royalty Act makes provision for the royalty rate to fluctuate with mine profitability as influenced by EBIT and also the state of refinement. The Act affects the strategy of a mining company in the following ways: • A part of the ore body is sterilised and will never be mined because the cut-off grade is raised as a result of the royalty cost, translating into a higher pay limit for the mine. • The annual cash flow is reduced by the royalty amount that is paid over to the state, which leaves the company with less disposable income. • A mineral transfer (which triggers the royalty) includes theft, loss or destruction, which implies that royalties will be payable on the production planned and not actually produced. • The rate is reduced for some minerals that are deemed to be refined, which means that each mine needs to establish an optimal value-addition strategy.

FIGURE 1 Potential impact of the Royalty Act on mining industry profitability Sources: Stats SA

E B IIT EB T//R R EV E EN E UE

50 50% 0% %

41%

40 40% 0% 0 % 29%

30% 30% %

31% 36%

24 4% 4% 18% 18%

20% %

25% %

27%

15%

21% 2 1% %

10% 0% %

16 16 16% 6% %

14%

0% % 20 004 004 00

200 200 05

EBIT/ EB I Rev IT/ Revenu Re ue Bef efo fore r Roy re Ro oyalt al y (%)

Inside Mining 11&12 / 2011

2006

2007

2008

2009

EBIT/Revenue After Unrefined Royalty (%)

FINANCE The potential impact of royalties on profitability Although mining companies are comfortable with paying mineral royalties, they are sensitive to the impact of such royalties on profitability and they also want the project to be able to afford the royalty, i.e. the royalty payment must not economically jeopardise the project because of the higher pay limit. The potential impact of the Royalty Act on profitability is illustrated in figure 1, which compares the actual profitability (solid line) for all South African mineral producers against what the maximum impact would have been had the Royalty Act been in force (broken line caused by using the unrefined formula) during the past few years. The graph illustrates the following points: • The impact is very difficult to predict because of changing market conditions. • The profitability ratios since 2004 ranged significantly (between 14 and 41%), which is indicative of the cyclic nature of mineral prices and the need to spend capital in the industry. • The impact, as measured by the gaps between the lines, of the royalty differs according to the level of profitability. The impact, as measured by the downward adjustment, is significant (4%) during times of high profitability, while less significant (1%) during times of low profitability.

The potential impact of royalties on different commodities It is useful to know which commodity will contribute most to the pool of mineral royalties. This information was calculated from Stats SA information and surprisingly it was found that coal, rather than platinum (the biggest contributor to export earnings), would have been the highest contributor to royalties in 2009. Had the royalty regime been effective in 2009, coal would have contributed 28%, PGM 25% and manganese 11% (figure 2). The reader must be cautioned that these ratios are likely to change from year to year and such volatility will depend on fluctuations in prices and production outputs.

Potential impact on value addition It is also essential to investigate whether or not the policy intent of motivating mineral producers to add sufficient value to production so that the sales product could meet the Royalty Act’s definition for a refined mineral resource would be

FIGURE 2 Potential impact of the Royalty Act on mining commodities Source: Stats SA (P2001)

Other minerals achieved. As reward and metals 17% for this spending on value-addiGold and tion, producUranium 8% ers will pay according to the Iron formula that 9% will cause the royalty rate to be Manganese 26% reduced to a maximum of 5%. This section explains a method for judging whether or not the carrot of a reduced rate is sufficiently attractive. The Western Australian royalty system uses an approach based on the assumption that ex-mine value is 25%, ex-crushing-and-screening 33% and concentrates 50% of refined value. These values are calculated from average unit costs (or value added) by stage of processing. This approach causes royalty rates that are scaled downward with successive stages of processing until the refined stage is achieved.

• When refinement costs represent more than 20% of the sales price, very little value is added and Coal and lignite the costs are 29% probably not justified. • When refinement costs represent 10% of the sales Platinum group metals 26% price, significant value is added and the costs are justified. The analysis above is certainly not exhaustive. More in-depth analysis using actual and mine-specific information is required before one can support the above-mentioned observation with confidence. However, if one compares the Western Australian assumption that refinement costs account for about 50% of the sales price against the finding above that the motivation for South African producers diminishes when refinement costs account for more than 20% of the sales price, the additional spending on valueaddition will probably not be justified under the circumstances. This preliminary assessment, therefore, points to a situation that it is unlikely that the policy objective of value addition will be achieved under the current two formulae.

Coal, rather than platinum, would have been the highest contributor to royalties in 2009 This section applies the Western Australian approach (as explained by Bradley) of having fixed royalty rates against specified levels of beneficiation to the South African system (figures 4 and 5). The illustrations give the relationship between price (expressed as an index where the refined value is 100) and target EBIT ratios. The red line represents the total price up to concentrate level, which includes costs plus a target EBIT margin. The grey section below the concentrate price represents the sum of the pre-determined target EBIT and the cost of getting the mine’s production to concentrate level. The area above the red line is made up firstly by the addition of the refinement cost and secondly by the value added after considering the royalty scheme (green portion). As a general rule, the incentive to spend the additional costs on refining (Cr) becomes less as the green (value-added) portion in the graph diminishes. The conclusions from these figures are:

Treating mineral losses as sold production The act defines transfer, the event of which triggers the royalty, as the disposal of a mineral resource or its beneficial ownership. The state is still entitled to its royalty should consumption, theft, destruction or loss of a mineral resource during exploration or production occur. The gross sales amount will then be governed by Section 6, which allows for “the amount that would have been received”. It is probably unfair if read with the provision to adjust prices when the sales condition does not meet the specified condition. The upward adjustment of gross sales has the potential to permanently sterilise low-grade deposits – and that will not be in the interest of the economy and is certainly not the intention of the Act. To add to the complexity,

Inside Mining 11&12 / 2011

FINANCE

FIGURE 3 (above) Relationship between refining cost of 20% and value added Source: Stats SA (P2001)

Section 14 of the Administration Act introduces a penalty for any underestimation of the royalty payable. The estimate (for the purpose of determining the provisional payment) must be within 20% of actual amount at the end of the year. The penalty is 20% of the error and applies to underestimations only. This matter will raise the importance of developing policies and guidance documents for the tracking and reporting of quantities, qualities and values during the mining process. In addition, Section 19 of the Administration Act requires an

Inside Mining 11&12 / 2011

FIGURE 4 (below) Relationship between refining cost of 10% and value added

extractor to submit an annual report to the minister of finance, stating the volumes, gross sales, royalty rate calculation and methodologies used for any adjustments to EBIT and gross sales for whatever reason – including losses.

Conclusion This paper concludes that the Mineral Royalty Act affects the production optimisation strategy at mines in the following ways: • Despite the higher pay limit and reduced profit as a direct result of the royalty,

most stakeholders should be comfortable with most of the requirements of the act for most of the time. • Coal and platinum mines are expected to pay the most royalties. Mines mining these commodities should take great care to avoid upward adjustment of the gross revenue as a result of production losses and inter-company transfers. • Although the new regime is unlikely to motivate miners to become refiners, there is the potential for a reduced royalty rate for refined production, which means that each mine needs to establish an optimal value-addition strategy. • Particular care must be taken to avoid mineral losses and where these occur, losses must reflect the mine plan and be properly accounted for.

About the author

Professor Fred Cawood is the head ead of the School of Mining Engineering, ring, University of thee Witwatersrand.

HOT SEAT PROMET DADI

Turnkey solutions for Africa and

An investment by a prominent Chinese engineering group has propelled a local project engineering firm into a whole new frame of business development, says Rob Bennett, MD of ProMet Dadi Africa.

adi Engineering Development Group, a well-respected, large Chinese engineering company, has bought a 20% stake in local project engineering firm, ProMet Engineers Africa. The transaction has led to a merger of capabilities, bringing large-scale lump sum turnkey (LSTK) capability, global efficiencies, world class project engineering and management systems under one roof in a new company named ProMet Dadi Africa. “We are reintroducing ourselves to the marketplace, as the establishment of ProMet Dadi Africa has propelled us onto a radically different business level. We have a modified value proposition which is quite compelling, with our key differentiators being cost and high-speed, quality project delivery. “Although Dadi isn’t that well-known outside of China’s coal-mining industry, it is one of the most respected groups operating within the country and the creation of ProMet Dadi Africa will provide us with the opportunity to become a significant challenger in the African and Asian mining and mineral process engineering service

Inside Mining 11&12 / 2011

industry,” Bennett says. And the marketplace seems to agree, as ProMet Dadi Africa has already won a contract for the engineering and procurement portions of a major gold mine in Kyrgyzstan. Prior to the transaction, ProMet Engineers Africa, headquartered in Cape Town with offices in Johannesburg and Australia and representation in Botswana, Nigeria and Sudan, had concluded projects for Anglo Coal, Xstrata, Kumba Iron Ore, Eskom, BHP and China Minmetals, among others. “Everything was going well until the global financial crisis hit,” Bennett notes. “We were lean and mean and operating successfully in the space below the big engineering companies. Post-crisis we found it difficult to compete with them, not because of our skills but in terms of the balance sheet. “We had a sorry experience with a blue chip company where we won a contract and then had the proverbial rug pulled out from under us when the contract went to one of the big companies. We decided to review our business and value proposition and look at securing a partner to help us compete in that sphere and our view was that

China was the right place to look because of the availability of engineering skills. “We came across the Dadi Group - it is a big company in global terms, its revenue in 2010 was RMB3.2 billion - making the Dadi Group the leader in its field in China. The company wanted to expand their markets globally; at first they wanted ProMet to be an agent for them but, after numerous meetings, the investment and current structure were agreed upon. We now have a balance sheet of US$300 million and we can chase the big jobs,” Bennett says with obvious relish. ProMet Dadi Africa not only has the ability to undertake LSTK contracts of up to US$300 million directly on its combined balance sheet, but the new capability brings over 2 000 project managers, master and professional engineers to augment the existing 100 engineers in ProMet’s employ. While Dadi has brought balance sheet and skills to the table, ProMet has brought complementary skills and international project management expertise, systems and procedures to bear. ProMet Dadi therefore offers the global market the best of Chinese and international project expertise in an EPCM environment. The international management processes will allow utilisation of the full engineering capability across disciplines for global clients. Coupled with this is the speed of execution, group procurement, highlyefficient design capabilities and familiar

HOT SEAT

beyond western project procedures and management techniques. “With an increasing Chinese investment level in African-based resource projects, familiarity with a significant Chinese capability and marketplace is becoming ever more necessary. Africa has long been a leader in project execution, management and engineering, and this development allows ProMet Dadi Africa to truly bring global efficiencies to projects in a well-managed and structured manner,” Bennett explains. “We have already seen projects that are struggling to pass the hurdle in higher cost environments become re-invigorated by this approach, bringing significant savings on capital as well as in project execution times. We are also pleased that this transaction provides a portal for South African capabilities into markets that are historically difficult to penetrate,” he adds. Bennett is quick to stress that ProMet Dadi Africa will not take the Wal-Mart approach where the market is flooded with cheap goods with little or no benefit for the local economy. “We are able to take a moribund project and turn it into a viable model using cost efficiencies, whether that means bringing plant in from overseas, using existing suppliers or a mix thereof. All the work in South Africa is performed by South Africans, we are a level 4 BEE company and proud of it. “Interestingly, our first proo oject post the merger was a study d dy for an American Coal company n ny looking to invest in China. Proo oMet Dadi offered certain project management skills from South Africa, namely the expertise to marry the Chinese project approach to an international standard better understood by Western companies. It’s important to note that ProMet Dadi will remain autonomous, leveraging Rob Bennett, off the combined competencies and experience of both parties. ProMet brings processing other than coal to the party. “The Dadi Engineering Development

Group has been specifically involved in the design, engineering, commissioning and, in certain cases, the operation of over 400 MTPA of China’s coal processing capability over the last eight years, accounting for in excess of 21% of the installed capacity in China. Dadi brings all this experience and capability to our company, allowing us to deliver projects quicker and more costeffectively than ever before.” There is of course always an elephant in the room when Chinese companies are discussed. The talk inevitably turns to the issue of quality. “Dadi has an excellent reputation for high quality work and products. Part of our merger due diligence included a review of each other’s quality systems and procedures. Furthermore, a number of blue chip companies have already visited our facilities in China and have included ProMet Dadi onto their approved vendors listing,” says Bennett. Of Dadi’s more than 2 000 employees, two have been awarded design master qualifications in China, 50 mas are professors of engineering and a further furth 80 are senior engineers. Furthermore, the Dadi Group has all the necessary Chinese business certificates, including engineering consultancy, engineering

“This transaction provides a portal for South African capabilities into markets that are historically difficult to penetrate” MD, ProMet Dadi Africa. research, engineering design Class A and high-tech co-licenses, as well as ISO 9000 certification. “Dadi’s ISO 9001 and 14001 systems

ABOVE Primary Crusher, HPGR Crusher, Scrubbing and Tank farm facilities, Botswana OPPOSITE DMS Plant and water storage facilities, Botswana approach means that quality is maintained in tandem with ProMet’s project management systems approach,” says Bennett. Because the Dadi Group had in the past been let down by their in-country suppliers, they undertook their own full vertical integration of key plant hardware. Group companies can therefore also supply a large number of coal processing equipment items, including banana screens, horizontal screens, high frequency screens, dewatering centrifuges and many more. The group also designs and supplies centralised control systems, high/ low voltage distribution cabinets, industrial valves, wear resist pipework, steel structure and platework and spare parts. Bennett points out that ProMet Dadi Africa will only be involved with engineering, procurement and construction management (EPCM) lump turnkey projects and will have no association with the product and equipment side of the business. “It is important to note that we will not be marketing these items, nor do we play any part in their local supply or distribution. This is done by a wholly independent company called Aury, with which ProMet Dadi has no link,” he states. When asked about the cultural and values fit of a Chinese and a South African company, Bennett replies that it was a lot easier than he thought it would be. “There is a lot of mutual respect in place and the collaboration and commitment is magnificent. We are truly a global company and already have a proven track record in a fiercely competitive market,” he concludes.

Inside Mining 11&12 / 2011

REGIONAL FOCUS SOUTH AFRICA

Not done just yet... South Africa was built in large measure on its great mineral resource endowment â&#x20AC;&#x201C; it has made the country one of the most successful on the African continent and can continue to do so for a very long time to come. Willem Smuts takes a further look.

Inside Mining 11&12 / 2011

REGIONAL FOCUS

hile it is true that the South African mining crown has slipped somewhat of late, what with China pushing South Africa into second place as biggest gold producer â&#x20AC;&#x201C; a position South Africa has held since 1905. Gold production in South Africa continues to decline. Until 2006, this country was the top world producer, but after almost a century of hegemony, its ranking declined to second position in 2007 and fourth in 2010. The price of gold is at an all-time high and the demand for the precious metal has never been greater. Emerging wealth in the BRIC nations implies that increased consumption will continue. Yet global gold production is slowly decreasing, after a peak of 2 604 t Au in 2001, production has declined to 2 444 t in 2007. Some of the decline reflects the decrease from the unique Witwatersrand orebodies as deeper operations become less economic, thus, for the first time in over a hundred years; South Africa lost its status as the world's leading gold producer to China in 2007. The decline also reflects the relatively few recent world-class discoveries, partly due to the low gold price at the end of the

1990s having discouraged exploration. As prices recovered, the trend was for major companies like Anglogold Ashanti and Goldfields to increase resources through acquisition and merger rather than exploration. However, demand now requires discovery of new resources, both by improving exploration skills in heavily explored countries and under cover, and through green-fields exploration in under-explored regions. Because discoveries commonly require at least 10 years to come on-line, it is unlikely that global production will exceed 2 500 t Au for at least another decade. The call locally is being answered by companies like GoldOne and Great Basin

Gold opening up mines in shallow parts of the Witwatersrand Basin, a move which illustrates that there is a lot of life left in parts previously overlooked.

The new juniors are rising An inevitable global development is the rise of the juniors in the mining industry and, while local mining policies have stifled the development of home-grown juniors to the benefit of all, the Canadian and Australian players on local shores are out there chipping away at the block. Eminent amongst these are BSC Resources Ltd. BSC, a black-owned company, which was incorporated in 2005 and since then has acquired one of the largest landholdings in South Africa - the ex-Falconbridge

OPPOSITE PAGE Burnstone decline: Burnstone Mine commenced production build up in Q1 2011. As such, all components of the mine that were required to enter commercial production have been commissioned and completed, and the development phase has concluded. Major capital projects included the vertical shaft, metallurgical plant, decline, ventilation shaft and required surface and underground infrastructure Credit: Great Basin Gold

BELOW G1 location-map: Gold One International Limited is a dual-listed (ASX/JSE: GDO) gold producer and explorer with a pipeline of southern African projects comprising a total mineral resource base of 21.71 million ounces. This resource includes 8.60 million ounces in the measured and indicated category and is the second largest gold resource inventory on the ASX Credit: GoldOne

Inside Mining 11&12 / 2011

REGIONAL FOCUS that they are putting their money in the right place – in the ground! Amongst these is the Burgersfort Ni-Cu-PGE Project: located in the Mpumalanga region, which is about 250 km from Johannesburg. The project is a joint venture with the Pangea Exploration Group and CEO, Bongani Mtshisi, has indicated that the

The ‘young Turks’ are prepared to revisit old ideas or try new methodologies and lead the charge into the new millennium Insizwa nickel, copper and platinum project. BSC has partnered with Vale on the Insizwa project in order to fully evaluate this large landholding. A firmly southern African-focused junior mining and exploration company, BSC is focusing on base and precious metals, as well as coal. BSC is currently working on a number of exciting mining projects that are proving

joint venture partners hope to take it public upon success. Pangea has over twenty years’ experience in the mining sector in Africa. This partnership between Pangea and BSC aims to further explore nickel in Burgersfort. The Burgersfort nickel project is located close to the town of Burgersfort in the Limpopo Province of South Africa.

Previous exploration by Gold Fields and Falconbridge identified several shallow disseminated nickel targets and three deeper massive sulphide nickel targets associated with the Aapiesdoorndraai peridotite sill. The sill outcrops at places within an area of 20 km by 4 km, within which exploration activities are currently being focused. The drilling programme is focused on locating an economically viable disseminated nickel sulphide mineralisation within the prospecting right. In the 1980s, disseminated nickel sulphide mineralisation was reported in boreholes intersecting the Aapiesdoorndraai peridotite sill. Some holes intersected more than 0.3% Ni from surface to a depth of more than 300 metres, but the area in which these holes were drilled is now part of a housing development. Pangea is contributing initial funding of R7.5 million in order to have a 30% shareholding in Burgersfort Nickel and has an option to later invest a further R5 million, which would allow the company to gain a further 21% share in the project. Three major targets have been identified on the property. Diamond drilling is in progress at these locations and MDM, Mintek and SGS are conducting the metallurgical work, which will be used in the 2011 scoping study.

Next stop: the future If South Africa continues to be a major player on the African mining scene – and I believe it will – it will be through the efforts of the ‘young Turks’ of the mining industry – the juniors. The likes of GoldOne, Pangea, BSC and Great Basin are prepared to revisit old ideas or try new methodologies and lead the charge into the new millennium - for as long as government keeps its side of the bargain, that is. Burgersfort: At Burgersfort, boreholes have intersected visible sulphides with grades comparable or better than Talvivaara and Turn Again. There is sufficient area at Burgersfort to obtain a tonnage of about 1 billion. The true grade, percentage Ni recoverable and extent of the mineralisation will be confirmed as the programme proceeds to confirm its economic viability. Ni Deportment Study shows a potential for high recoveries as sulphides consist almost entirely of pentlandite Credit: BSC

Inside Mining 11&12 / 2011

Partnering communities for growth Through its corporate social investment initiatives in enterprise development and job creation, Xstrata Coal SA is empowering the communities where it operates. I am Simon Mawila and I live in Middleburg, Mpumalanga, where the soil is good. There is a lot of farming around here â&#x20AC;&#x201C; orchards with thousands of fruit trees, large vegetable plantations, and cattle farms. Growing up in a farming community, I was inspired to be a farmer. I wanted to do this important work because farming provides food for our country. I was given my chance when Xstrata Coal SA started a training project for farmers. On two farms the company bought, they trained us on raising cattle, crop farming and the general running of a commercial farming operation. When the time came to graduate from the course, the company helped me lease a farm from the Department of Agriculture. Xstrata Coal SA bought me 60 cattle and equipment I needed to start the farm. I am happy to say I am now in my third year of farming and it is going very well. With the proďŹ ts I have made from farming, I have paid off the debt of the lease to the Department of Agriculture. So today I am a proud land owner. I learnt a lot through the training course and my knowledge grows working on the land every day. It means a lot to me that I can go to the other new farmers near me and transfer my skills to them. I offer my assistance especially at planting time and harvesting, when extra hands are needed. So I feel I am contributing something important to my family, my community and my country. To do that, I needed a partner I could rely on.

TALKING POINTS BENEFICIATION

Prioritising the mining value chain Beneficiation is about maximising socio-economic benefits from the country’s mining industry and investing in the mining value chain will result in job creation, economic growth and taxes accrued to the state.

uring his State of the Nation address in February this year, President Jacob Zuma said the finalisation and adoption of a beneficiation strategy was a priority for the government. In June, Cabinet approved a beneficiation strategy focusing on ten commodities and five value chains. The ten commodities selected for beneficiation are gold, platinum, diamonds, iron-ore, chromium, manganese, nickel, vanadium and titanium, with coal and uranium being bracketed together. The five selected value chains that flow from these commodities are energy, steel and stainless steel, pigment production, autocatalyst and diesel particulate filters, jewellery and diamond processing. When it released its annual results at the end of June, the Industrial Developmental Corporation (IDC) announced that it had approved funding amounting to

Inside Mining 11&12 / 2011

R8.4 billion in South African investments for the financial year ended March 2011. Sixteen percent, or R1.34 billion, of the funding was invested in the mining value chain. IDC CEO, Geoffrey Qhena, said that the majority of new approvals going forward would also be in the priority sectors as identified in the New Growth Path (NGP), including manufacturing, the mining value chain, infrastructure and agriculture. “The IDC will make available R102 billion over the next five years for investment. To achieve this level of investment, the partnership of various stakeholders and social partners is key – these include businesses, co-funders, labour, government and civil society,” said Qhena. The minister of Mineral Resources, Susan Shabangu, recently elaborated on the state of the nation’s beneficiation, she had the following to say: If one looks at the position papers and

statements of the leadership of this country since the watershed ANC Stellenbosch economic meeting of 1993, you will see that they have all been raising questions that are highly pertinent to our future as a nation - and one in particular. This concerns the fact that our country’s vast mineral resources, about 54 different types, estimated at $2.5 trillion (excluding energy commodities such as coal, oil and gas) are being exported largely as raw ores, alloys or metals rather than beneficiated products. We have been working through a complex set of policy interventions to correct this export of our raw materials in a manner that does not advance the socio-economic interests of our country. We need to remind ourselves that, over the past 130 years, mining has provided the foundation for a number of industries that either supplied it or used its products. This can be found in a cluster of industries that include, amongst others, energy, financial

TALKING POINTS

services, water services, engineering services, specialist seismic as well as geological services - and many others that are world class and owe their existence to the mining industry. Beneficiation is about maximising socio-economic benefits from our countryâ&#x20AC;&#x2122;s mining industry and, more broadly, from its vast and diverse mineral endowment. Such benefits may take the form of jobs created, economic growth and activities generated, taxes accrued to the state and socio-economic benefits flowing from the mining sector and its associated Department of Mineral Resources activities. There must be a shower of benefit accruing, which will reach the very corners of our economy and our national life. However, more often than not, for many commentators, their understanding of beneficiation is confined to the benefits derived from mineralsâ&#x20AC;&#x2122; industrial applications, processing and, more generally, the downstream uses for the commodities. This narrow definition of beneficiation does not fully capture the national interest of our country. Our vision goes way beyond that. South Africa has a long history of beneficiation and some of the examples

include, among others, the establishment of the steel industry in 1913 and the subsequent commissioning of Union Steel, Pretoria Iron and Steel Works in 1918; the development of the ferrochrome industry in Witbank, now Emalahleni, in 1960; the establishment and development of petrochemical industries such as SASOL, government and big business cooperating to create ALUSAF in 1992; Platinum Group Metals, which applied it in the autocatalysts (mid-1990s) and monolith manufacturing in 1999, and so on. The mining industry has also been pivotal in the establishment of world-class R&D institutions such as MINTEK, the Council for

The same advantages are visible when one sees the potential arising from the demand in Asia. And this can be done with a significant local value-add with strong linkages with other sectors of the economy. In this regard, in 2008 gross revenue from sales of all minerals mined in South Africa amounted to just below R300 billion. Of that, just over R86 billion was generated from the processing of base metals, precious metals and other minerals, which represented 11% of the total volume of minerals produced. It certainly cannot be correct that we do things as we have always done them. This calls for imagination and lack of compla-

The IDC will make available R102 billion over the next five years for investment Geo-Science, and broadly, the presence of globally-recognised engineering services in the country. Although South Africa has steadily improved its ratio of beneficiated to primary products exported since the 1970s, these ratios are still well below the potential suggested by the quality and quantity of its mineral resources endowment. This is happening at a time when the demand for our commodities is driven mainly by China and India, as well as the emerging economies. During the recent global economic and financial crisis, the growth in developing countries such as India and China confirmed the assertion that the world has entered a new growth phase that will precipitate a long-term, high-demand for natural resources, goods and services. The stability in southern Africa, and more broadly in sub-Saharan Africa, presents additional prospects, not just to invest in those economies but also to serve as a market for our beneficiated products. The same can be said of infrastructure investment, which will come after stability has been further enhanced â&#x20AC;&#x201C; something that the SADC and African Union are still working on at the moment. Export iron ore in Saldanha

cency on the part of all the affected role players. Mining is a long-term project and, consequently, those who are involved in it do so because they know that it will take time to reach their targets. In this regard, that is why, on our side, we are stabilising the regulatory framework and improving on our efficiency levels so that we can create a situation where our destination becomes even more attractive. Beneficiation means that companies have to embark on their activities for, say, 50 or 100 or so years. For example, for almost 20 years the east rand was the hub for manufacturing yellow machines and other major equipment for the mining industry. Bell and other local manufacturers have lost considerable market share due to central buying of the equipment, which takes place at the head office of the major mining houses, be they in London, Zurich, Sydney or elsewhere. We have to take advantage of the comparatives we have and build on the excellent work in projects such as Colombus Stainless Steel, Saldanha Steel, Iron Ferrochrome smelter and others. We need to improve on our history of failing to translate the production of base metals into largescale fabrication. In this regard, why is it that South

Inside Mining 11&12 / 2011

TALKING POINTS

Minister of Mineral Resources, Susan Shabangu African mining and prospecting companies fail to take advantage of considerable prospecting opportunities and establish the necessary industries and laboratories here in Gauteng or elsewhere in the country to evaluate ore samples? How do we explain the fact that South African-based mining and prospecting companies take the bulk of their samples – in some cases almost 80% of such work – meant for processing to the UK and pay millions of pounds for

it when all they need to do is to establish the required laboratories equipped with the necessary infrastructure here and use it at an excellent university like Wits or the North West University. Extensive prospecting in sectors such as PGM, gold, manganese and chrome entails fees, in some cases running into hundreds of millions of rands, so we have to ensure that we curb outflows from such investments and ensure that South Africa has the capacity to do this kind of scientific work at home. By so doing, we beneficiate and add to local job creation, local value generation as well as the expansion of domestic skills base. In essence, we need to build a beneficiation strategy that is fit for the demands of modern-day South Africa. Broadly speaking, we can maximise our socio-economic beneficiation in the following categories: supply chain industries, extraction and processing, application and downstream industries, as well as related industries with multiplier effects across the economy. We are finalising an action plan that will lead to the successful execution of the

COALSCAN 9500X – coal analyser measuring ash, moisture, CV, sulfur and ash oxides

Online control for the minerals and coal processing industries, at the:

Mine Washery Port Power Station

beneficiation strategy for our country. In this regard, it is important to mention that the nature of beneficiation would differ from segment to segment. For example, policy interventions in the supply chain industries may lead to a great deal more semi-skilled and skilled jobs being created than the promotion of mineral processing, which may initially be heavily capital intensive. Likewise, the establishment of basic infrastructural logistics will have an impact much wider than the beneficiation of the mineral reserves of the country. Of significance is the role of metal exchanges in securing institutional governance and a regulated environment for our major mineral resources. In the context of the global battle for control of key mineral resources, it is imperative that South Africa creates effective institutional platforms for extracting maximum socio-economic benefits from those minerals where the country has an adequate share of global reserves to play a catalytic role in market shaping and outcomes.

GEOSCAN-M – minerals analyser used in the iron ore, manganese, copper and nickel industries

www.scantech.com.au sales@scantech.com.au

Scantech’s analysers measure the quality and grade of bulk materials flowing on a conveyor belt. They provide results in real time and process control for stockpile management, automated blending/sorting and reclaim.

SHEQ COMPLIANCE

Polluting across the board

There has been much finger pointing in the mining industry regarding the cost of environmental rehabilitation on mining sites. By Advocate Douglas Shaw

s many directors are becoming aware, the new Companies Act came into force on the 1 May 2011. One of the most important implications is that the founding documents (now called a Memorandum of Incorporation (MOI)) of the company need to be changed. There is much more flexibility in the new Act but that means that a company must make around fifty decisions in order to decide what their new MOI will look like and how it will interact with any shareholder agreements. This is quite a process and every company in the country needs complete it. I spend much of my time these days helping companies get the process right. Another important effect is that it makes directors much more liable for the affairs of the companies they run. How

might that affect companies involved in one of the businesses most vulnerable to suits: mining companies in the context to our new environmental legislation. Under the new Act, directors are liable in all the areas we would expect them to be: gross negligence, reckless trading and

fraud (Section 22 (1)). Note this extends to being at a meeting and not voting against the measure (Section 77 2 (e)). When a director acts in the name of the company when he knows he is not authorised to do so, he is also personally liable. He is also personally liable for breaches

TOP Wildlife support is on top of the agenda for some mining companies RIGHT Acid mine drainage is a serious environmental hazard Inside Mining 11&12 / 2011

SHEQ in fiduciary duty, which usually involves a position of trust. The new Act goes further, however.

New liabilities The new Companies Act states that the directors of companies can be held personally liable when they are reckless, as well as if the company fails ‘the solvency and liquidity test’. Section 4 of the Act reads as follows (edited and highlighted for clarity): 4. (1) For any purpose of this Act, a company satisfies the solvency and liquidity test at a particular time if, considering all reasonably foreseeable financial circumstances of the company at that time (a) the assets of the company or, if the company is a member of a group of companies, the aggregate assets of the company, as fairly valued, equal or exceed the liabilities of the company; or (b) it appears that the company will be able to pay its debts as they become due in the ordinary course of business for a period of: (i) 12 months after the date on which the test is considered; or

Inside Mining 11&12 / 2011

(ii) 12 months following [a] distribution [such as a dividend]... the board or any other person applying the solvency and liquidity test to a company - ; or (i) must consider a fair valuation of the company’s assets and liabilities, including any reasonably foreseeable contingent assets and liabilities. The question is, if the directors of a mining company are aware of a huge environmental liability at their mine, such as acid mine drainage (AMD) problems, is the company truly solvent? In the future, it will not be enough to simply liquidate the

cost base. Once the remaining profit from the mine has been exhausted, the company can liquidate and the environmental liability disappears. But does it? Looking at the environmental legislation together with the new Companies Act, it would appear that both the original (selling) company and the directors of the buying company would be liable. If the liability is great enough to make the original company insolvent, then the directors of the original company may be liable too. Consider Section 19 of the National Wa-

If the directors are aware of a huge environmental liability at their mine, such as AMD, is the company truly solvent? company and plead that the company’s funds are inadequate; liquidators will come after the assets of the directors too.

Who is responsible for AMD anyway? It is sometimes considered strategic for large mine companies to sell risky environmental assets to small mine companies. This is thought to benefit both parties. The large mine gets rid of an asset that is not workable with their higher overheads. They also believe they are getting rid of an environmental liability. The smaller company (perhaps formed for the purchase, perhaps even disguised as a BEE deal) has much lower overheads. It can work the mine for longer with its lower

ter Act. When a catchment management agency (CMA) needs to clean up a water source (such as one polluted by AMD), it can recover the costs from virtually anyone who has ever been involved with the mine (current owners or not): 19. Prevention and remedying effects of pollution (5) Subject to subsection (6), a catchment management agency may recover all costs incurred as a result of it acting under subsection (4) jointly and severally from the following persons: Jointly and severally means there is nothing to stop the CMA from pursuing your company and then leaving you to collect from everyone else who was involved.

SHEQ Like any sensible litigant, the CMA will most probably pursue the company with the deepest pockets. (a) Any person who is or was responsible for, or who directly or indirectly contributed to, the pollution or the potential pollution: This provision is comprehensive. Indirectly contributing to the pollution would include pollution from your mine affecting someone elseâ&#x20AC;&#x2122;s mine through underground tunnels or in some other way. (b) the owner of the land at the time when the pollution or the potential for pollution occurred, or that ownerâ&#x20AC;&#x2122;s successor-in-title; The original company is liable and so is the new owner. (c) the person in control of the land or any person who has a right to use the land at the time when(i) the activity or the process is or was performed or undertaken; or (ii) the situation came about; or (d) any person who negligently failed to prevent(i) the activity or the process being performed or undertaken; or

(ii) the situation from coming about. Any person who was responsible for the pollution occurring - in the case of mine drainage that could have been halted by ceasing to pump water out of the mine, not sealing the mine up or conducting mining activities in the first place. If, on the other hand, the mine was the owner of the land when the pollution occurred (i.e. arguably either when the water was polluted or when the water came to the surface and started polluting river systems), they will be liable. If the mine has been sold since then, the successors in title (subsequent buyers) are also liable. That then is the liability of the company, even if the pollution happened long ago. The AMD problem has been known to the industry for twenty years or more. Directives have been issued to the industry as long ago as 2005. It is going to be difficult (and not that helpful in any case) do deny all knowledge. The fact that the government takes forever to make decisions is not really an adequate legal defence. So, what then is the liability of a sitting director of a mining company today knowing

that pollution happened in the past and that an authority under the National Water Act (or other acts for other pollution) may, in the future, clean up the pollution and claim the funds from the company? That depends on the assets of the company. If the pollution concerned, or all the pollution the company has created in total, is greater than the assets of the company, then that might make the company insolvent. In terms of the Companies Act, if the company is made insolvent, the directors will be liable in their personal capacities.

The good news There is some good news. Companies, unlike under the previous Act, can buy insurance for their directors against these liabilities. It might be a good idea to do so, while it can still be had.

About the author Douglas Shaw is an advocate and provides training on both environmental issues and the new Companies Act. douglasjshaw@gmail.com

SHEQ SUSTAINABILITY

Turning environmental benefits into community profits Last month, BHP Billiton’s Ongoye Forest Project was announced joint-winner in the environmental category of the 2011 Nebank Capital Green Mining Awards.

he project, a first of its kind in South Africa, involves restoring a 500 ha degraded forest, which is also a threatened habitat, over a period of 20 years to offset the carbon emissions from the company’s smelting plants. Ongoye Forest is described as an exceptionally rare and diverse habitat. The many tree rarities include the magnificent giant umzimbeet, Millettia sutherlundii, forest mangosteen Garcinia gerrardii, forest water berry, Syzygium gerrardii and pondoland fig Ficus bizanae. The cycads Encephalartos ngoyanus and Encephalartos villosus are also found here. There are about 130 bird species on the reserve and the green barbet is endemic to the forest. Bushbuck, red duiker and red squirrel can also be seen in the forest. With BHP Billiton’s project, Ongoye Forest will provide a sink for between 60 000 and 125 000 tonnes of carbon dioxide over a 20 year period. The project’s main objectives are to establish a carbon sink with community involvement and to offset carbon produced by the Hillside and Bayside aluminium smelting operations. Since 2007, R2.6 million has been spent on this project. BHP Billiton’s partners include the Wildlands Conservation Trust, Ezemvelo KZN Wildlife Trust and the Mzimela community. Trees are propagated from seed under stewardship of the Wildlands Conservation Trust. The project’s main

Inside Mining 11&12 / 2011

The 2011 Nedbank Capital Green Mining Awards The Nedbank Capital Green Mining Awards were launched in 2006 to recognise and celebrate the contribution of responsible, sustainable and environmentally-aware mining and mineral beneficiation to Africa’s economic development. The complete list of winning projects for 2011 is: • Environmental Category (joint winners) Anglo American Thermal Coal’s Gypsum Housing Project BHP Billiton’s Turning Employee Benefits into Company Profits - Ongoye Forest Project • Socio-Economic Category (joint winners) Anglo American Thermal Coal’s HIV/AIDS Workplace Programme Kumba Iron Ore Sishen - Mine’s UGM Wellness Clinic • Sustainability Category Kumba Iron Ore - Sishen Mine’s Rural Research Project.

activities include tree propagation, tree planting and custodianship of the forest. Biomass is measured every three years to determine the amount of carbon sequestered. There is also potential to extend the project to other forest blocks in the area. The forest is an important resource for the local impoverished community. The reasons for its degradation are the clearing

ABOVE Typical forest growth in KZN INSET The Green Barbett is endemic to the forest of land for grazing, logging, harvesting wood for fuel, de-barking of medicinal trees and overgrazing. This has led to the drying of rivers and streams, soil erosion, the migration of wildlife and birds and the scorching of undergrowth due to increased exposure to the sun. The involvement of the poor rural communities has been one of training and mentorship, with the resultant benefits of income, restored water catchment and an improved environment. The project has the potential, through the use of indigenous tree species, to promote ecological restoration, as well as conservation of medicinal plants. Ongoye Forest is unique and is recognised as a birding hotspot by the Southern African birding community. This in turn creates opportunities for the training and employment of birding guides. Furthermore, the partnership approach between BHP Billiton, government (Ezemvelo KZN Wildlife), an NGO (Wildlands Conservation Trust) and the Mzimela community is, and continues to be, a sustainable and successful one.

BHP Billiton SA Ltd

BHP Billiton is the world’s largest diversiﬁed natural resources company with 40,990 employees and 58,000 contractors working in more than 100 operations in over 25 countries. In southern Africa we have a corporate centre in Johannesburg, and operate three BHP Billiton Energy Coal collieries in the Mpumalanga Province. Our Aluminium business includes two smelters in Richards Bay and a 47.1 per cent interest in the Mozal joint venture outside Maputo in Mozambique. Our Manganese business includes interests in Hotazel Manganese Mines, Manganese Metal Company and Metalloys. While operating a global company responsibly in an increasingly complex world presents us with a range of challenges, we remain committed to ensuring the safety of our people and respecting our environment and the communities where we work. In South Africa we strive to transform this commitment into reality across all our operations.

That’s why we have invested over R300 million across a broad range of sustainable development projects in southern Africa over the past ﬁve years to make a long term difference in the areas of health, social and youth development, education, environment and enterprise development.

With a unique and varied portfolio, our breadth and diversity provides us with the ﬂexibility to manage our growth in line with global demand. At BHP Billiton we are resourcing the future.

www.bhpbilliton.com

PANEL DISCUSSION MINING SOFTWARE

Making mining safer and more productive What impact has the development of software had on the global mining industry and what are the major benefits of implementing new generation The experts that shared their time and expertise with Inside Mining are Craig Morley, software CEO of Snowden; Merlin Knott, VP Africa & Middle East of Cura Risk Management t/a in mining Cura Software Solutions; Deon van Aardt, MD of Wonderware and VUMA Software’s director, Wynand Marx. operations?

oftware has fundamentally changed the industry – from exploration right through to commodity/product. Software is now an integral part of every aspect of the business, from tools developed to visualise data in exploration, through mining packages for resource estimation, mine design and mine planning, into production tracking and mine automation as well as plant control systems. There is very little that is not impacted by software and so today’s mining

industry relies heavily on technology. At a high level, the wide range of software tools available and employed in a mine work together to enable companies to optimise the extraction of the mineral resource. Specifically, the benefits within a mining and processing operation delivered by software include the capability to

“The wide range of software tools available and employed in a mine work together to enable companies to optimise the extraction of the mineral resource” Craig Morley, Snowden Inside Mining 11&12 / 2011

PANEL DISCUSSION Craig Morley continued

results (such as material dispatch information, crusher throughputs, sample assays, plant and product data, etc.). My view is that the current trends within the broader IT community of cloud computing will provide significant benefit to the mining industry. With remote mine sites, a workforce that is very mobile, and the diminishing numbers of highly-experienced people, the concept of having data and information instantly accessible on multiple devices and applications will have a profound impact on the industry. The way we work and our ability to analyse information will undergo a step change over the next 10 years. The ability for technology to facilitate the regular use of specialists/experts will greatly enhance efficiency in production. We are already seeing pockets of this occurring across a wide range. Examples include: • expert machine operators remotely operating more than one machine while living in a capital city nowhere near the mine

• on site, or off site, communications centres controlling grade control modelling, mine planning, equipment dispatch and maintenance and plant processes all from one space-aged room • experts being able to view and collaborate on data and information in real time while being located anywhere in the world. These types of activities require professionals to have IT skills that were not previously required. Employment conditions will be different as we see the need for large workforces on site diminish, with the obvious benefits not only to health and safety, but also socially, for example a reduction in the impact of fly-in-fly-out on families and communities. Of course the combination of increased efficiency in production and strong demand for commodities will lead to the industry’s ability to find more deposits and mine at lower and lower grades. Ultimately, this will assist in securing the resources we all need to maintain the lifestyles modern civilisation demands.

to achieving zero fatalities at individual aving implemented governance risk mine level. and compliance (GRC) software at Software benefits include: a number of mining organisations, Cura • consolidated and aggregated risk inforSoftware believes that system-based aumation allows for effective board-level tomation allows the mining community decision making to consolidate and aggregate critical information and then take measurable action to improve risk, output and accountability. Software such as CURA Enterprise Risk Management (ERM) Merlin Knott, Cura Software Solutions equips our mining industry customers • easier risk identification ensures faster to better understand responses and implementation of risk the risks they face and identify how best controls to implement controls to mitigate these • centralised information storage and imrisks. This in turn can improve resource proved knowledge transfer. management and decrease inadequacies Cura ERM is a powerful, yet flexible, GRC in their supply chain. software platform, with unparalleled doOne of the biggest challenges faced by main expertise. Successful risk manageany mining organisation is safety and ment is dependent on the collaboration how to impact positively on this issue. of the right information system, culture, The identification, capture, implementastrategy and tactical processes. tion and auditing of strategic controls Our ERM system and service offering for identified risks at an operational level identifies the effectiveness of these fachelps limit catastrophic incidents and tors and provides our clients with the tools assists in the objective of moving closer

to ensure that their automated risk management process is effective and efficient. The power of our ERM offering is down to its flexibility, ease of configurability, fast implementation and true enterprise architecture. We are able to meet our clients’ GRC requirements without compromise and empower them with ownership. Our clients are able to take ownership of risk and controls, assign them throughout their organisation and ensure accountability and measurability. They are able

model what is in the ground, design the most efficient extraction plans and schedules, execute those plans and extract the maximum returns from their operation. New generation software also brings the opportunity for automation and remote monitoring/analysis. Additional benefits are also realised through improvements in health and safety, cost reduction and increases in efficiencies. Snowden produces specialised software targeting advanced users and their requirements. Specifically, we produce tools for sophisticated, three-dimensional (3D) statistics and grade modelling used by the industry’s most advanced resource estimation practitioners. We also produce specialised software tools and services to assist with the management of geological and mining data. Finally, we produce the industry’s only purpose-built mining reconciliation software tool that enables specialists to compare predictions (such as resource estimates, mine plans/schedules, grade control models, recovery assumptions, etc.) with actual measurements/

“ERM equips our mining industry customers to better understand the risks they face and identify how best to implement controls to mitigate these risks”

Inside Mining 11&12 / 2011

WONDERWARE MANUFACTURING EXECUTION SOLUTIONS

SUM IT ALL UP FOR YOU!

MES by wonderware

From product track & trace through enterprise integration - Wonderware MES gives you solutions not problems, options not roadblocks, scalability not “one-size-fits-all”Chalk it up to the power of ArchestrA! Logon to www.wonderware.co.za/mes to learn how Wonderware has helped hundreds of customers to do the math and unleash their potential!

PANEL DISCUSSION Merlin Knott continued

tools. A reduction in human fatality will be achieved due to the smaller teams not being underground, but a new set of risks will become a reality, such as resource scarcity. Mechanical tools will increase output production and allow for truly 24/7/365 production mines. Overall, the enhancements will impact positively on output but impact less favourably on the human aspect.

to draw system reports, view dynamic dashboards from the system in real time to meet and measure compliance obligations, and react to non-compliance quicker than possible with a manual system. In the next decade, South African mines will be forced to go to depths of below the 5 km level and mechanical tools may be required to replace the current labour-intensive practices of mining. Software will have a more significant impact on mining

as it will need to be integrated into mechanical tools to ensure optimal delivery output. What impact will these developments have on issues such as production, skills development, employment and health and safety within the mining industry? As with most technical enhancements, the need for unskilled labour is reduced and smaller, highly-skilled teams are implemented to manage output and mechanical

footprint of an operation, Wonderware is able to monitor environmental impact, record emission levels and report on them. The electronic communication system also plays a vital role in today’s mining industry, particularly given the skills attrition plaguing it. Wonderware offers a sophisticated and ‘intelligent’ suite of solutions that can deliver step-by-step instructions for semiskilled personnel to deliver tasks effectively and in a safe manner. Our applications can help deliver operational excellence by providing information through mobile devices and thereby empower the production worker to deliver results. The challenge today is that skills are lost with the older generation when they retire. However, our software can capture best practices into an electronic format for use by others. As part of its skills development programme, Wonderware last year embarked on a programme of up-skilling ‘qualified and unemployed’ people in the IT sector Microsoft virtualisation. Wonderware is to become more ‘marketable’. Since the used across all mining operations in South start of the programme, 40 applicants are Africa, including platinum, coal, iron ore, being trained in Wonderware software. gold, copper and diamonds, as well as F u r t h e r , with safety at the top of the agenda in mining operations, Wonderware is Deon van Aardt, Wonderware there to ensure that ‘spots and checks’ and work are done in a safe manmining majors such as Anglo American’s ner. The on-hand electronic devices track gold and platinum operations, Impala the work schedule as it is performed. The Platinum, Exxaro, BHP Billiton and Kumrapid adoption of virtualisation, which opba Iron Ore. Wonderware systems are also timises the use and availability of computoperational in a number of mines across ing assets, has meant that Wonderware the border, with 70 integration partners has had to follow suit and is certified for operating in Africa.

echnology specialist, Wonderware, has set the bar in terms of delivering highly-sophisticated software aimed at improving safety, efficiency and providing a real-time view of operations for operators and management. As testament to its success, Wonderware systems are installed at a third of local mining operations. Wonderware has been operating in South Africa for the past 19 years. Apart from its industrial IT solutions, the company provides specialised consulting, technology and outsourcing services to the mining sector - which contributes just over 30% of total business. Our systems provide real-time information and connect mine management to the operations in an electronic format, such as cell phones and iPads. This electronic system awareness ensures that, when problems arise, the operator is notified immediately so that appropriate action can be taken. Wonderware applications interface directly with plant and processes, which are effectively the ‘coalface’ of an operation. Unlike a paper trail, which is often left for later or forgotten, real-time, electronic contact ensures that problems are resolved immediately. In addition to providing historical and real-time information in the form of reports, Wonderware helps decision-makers track operational trends – especially trends relating to general and energy efficiency. As such, Wonderware solutions are able to track plant and process inefficiencies as well as programme machines, such as pumps, fans and cooling systems to operate optimally. These solutions can calculate the ‘cost of energy used per shift’ and determine ways of reducing energy consumption. With the focus on reducing the carbon

“Unlike a paper trail, real-time, electronic contact ensures that problems are resolved immediately”

Inside Mining 11&12 / 2011

*RYHUQDQFH ō 5LVN ō &RPSOLDQFH

Taking Governance, Risk & Compliance to New Heights Supports multiple frameworks simultaneously for: Enterprise Risk Management,

Operational Risk Management, Project Risk Management, Financial Controls Management, and more Built-in support for incident management and loss events Quantitative risk modeling capabilities Email notifications and complete audit trails Full audit support Powerful executive dashboards, reporting and analysis capabilities Configurable by business users to match your organization’s existing processes Flexible installation options (on-site / hosted / software as a service) Deployed at more than 250 organizations worldwide

BHP Billiton

Deployed at leading organisations worldwide, including: Bendigo Adelaide Bank Coca-Cola Vodafone Woodside Energy

Westfield

Download free whitepapers & schedule a live demonstration at www.curasoftware.com.

PANEL DISCUSSION

uma Software has launched a fully re-engineered version of its world-leading, windows-based software package for mine ventilation, cooling and environment control, developed to satisfy the specific needs of deep hard-rock mines. The new VUMA3D-network is the flagship of the VUMA3D suite developed to simulate environmental conditions encountered in underground mines. VUMA3D-network, engineered by leading ding ventilation and refrigeration specialists, solves airflow, heat eat flow and pollutant distributions interactively throughout hout a ventilation circuit. Analysis of ventilation networks works is made easy through the user-friendliness of thiss state-of-theart graphical package. The programme can n be used both as a planning tool and to verify the environmental ronmental performance parameters of operational mines. es. When VUMA was first launched 10 years rs ago, it represented a real watershed in the mining industry. We opened the door for mine designers to enter an entirely new realm of mine planning, ning, via on-screen graphics that were simply not available anywhere else. The 2011 reengineering of the original software represents another paradigm shift in terms of visuals and graphics. User interaction has been greatly enhanced — for example, mine models can now be constructed even faster, because VUMA3D-network can interface with other mine planning software commonly used in the industry. Development was prompted by user demand and is a big step forward for the software. VUMA is still the only package on the world market that is able to carry out a complete heat engineering balance for an underground mine, taking into account factors such as heat from broken rock, advancing faces, different configurations of working areas and production zones — all the dynamics of an actual underground working environment. The new version of VUMA-coal has been revamped for the analysis of coal mine ventilation networks. The VUMA-coal simulation programme is an essential tool to assist colliery ventilation engineers, mine planners and management to design optimal and energy-efficient underground coal mines by effectively and confidently incorporating ventilation features as part of the decision-making process. This unique tool enhances the holistic approach required for modern mine planning and design, particularly the intensifying demand for fast, accurate and reliable answers. VUMA-coal can be harnessed to develop effective solutions for complex and interactive ventilation networks. The beauty of the entire VUMA software suite of software is that it has been completely home-grown here in South Africa and is supported by a team of local experts with decades of field experience. User feedback is incorporated generically in the software, wherever appropriate, to ensure that it remains relevant to the latest mining conditions being encountered. The VUMA team provides technical support on a rapid response basis via telephone and email, as well as through site visits if required. User training courses for new and existing users are offered at VUMA Software’s offices in Sandton, or at mining companies’

premises elsewhere. Over the past 10 years, VUMA has been proven and has become well entrenched in the mining industry, both in South Africa and in many other parts of the world, across a broad spectrum of mining configurations. At present, there are more that 50 mining companies around the world, from large mining groups to smaller companies, successfully using this software. In May 2010 2010, VUMA was instrumental in developing energy-saving technology based a on a study that demonstrated ho how main fans can be controlled on hard rock mines to ssave power. Underpinned by this technology, the mining project was so successful that the project was grante granted an eta Award for technological excellence by Eskom aand the Department of Energy (‘eta’ is the Greek symbol for efficiency). VUMA software represents a significant V knowledge base and has taken mine ventikn lation, cooling and environment control l design and management software to a completely new level. Other packages in the suite address aspects such as mine water network modelling and provide tools such as live monitoring software and a timedependent air and heat Wynand Marx, VUMA Software flow simulator.

“A holistic approach is required for modern mine planning and design, particularly the intensifying demand for fast, accurate and reliable answers”

TECHNOLOGY MAINTENANCE

Taking maintenance to new heights A specialist South African rope access company’s successful completion of a 25 m smokestack extension at a gold mine in Mali has resulted in an ongoing maintenance contract.

he ongoing work has been secured as a result of Skyriders successful extension of Resolute Mining’s Syama gold mine’s smokestack from 75 m to 100 m, without the use of a

reachable crane. Mike Zinn, Skyriders marketing manager, says that the extension was required as a sulphide concentrate process was adapted, which would result in harsher emissions. The smokestack extension, which was designed by DPA Specialist Consulting Engineers and consulting engineering firm Walker Ahier & Holtzhausen, was comprised of twelve cans – each 2 m high, 2 m in diameter and 940 kg in weight. The largest crane available on site had a capacity of 200 tonnes and a reach of 85 m. “This meant that, beyond the installation of the first crane, we were responsible for the overall assembly using rope access,” explains Zinn. “With the assistance of consulting engineering firm KP Energy, we designed and fabricated a purpose-made gin-pole, which we used to hoist the cans by means of a five tonne capacity electric winch that was placed on an adjacent building. The Skyriders team made use of the winch to hoist each can, one by one, to the top of the stack. Once in place, the team would then bolt each can together by means of prefabricated flanges. The overall structural

Extending Resolute Mining’s Syama gold mine’s smokestack from 75 m to 100 m, without the use of a reachable crane

Inside Mining 11&12 / 2011

strength is being provided through a series of belts and cables; each of which was coated using a special Denzo-type tape to form a protective outer-layer and then tensioned. Accessing a 100-m-high smokestack is challenging, but for Skyriders this is an ideal environment. “Most of the infrastructure on mines, above and below the ground, is high and scaffolding is needed to service such structures, which is expensive and time consuming, especially when the job is small. When the cost of access is disproportionate to the work that has to be performed, Skyriders offers a cheaper, faster and safer alternative access method that can be used in various locations on a mine,” explains Zinn. Speaking on the logistics of the project, Zinn points out that a large majority of the equipment which was manufactured and purchased in South Africa had to be shipped into Kenya and then transported by truck into Mali. Port clearance, import duties and trucking routes were just a few of the challenges that the Skyriders team managed to overcome as a result. “Although we met with challenges along the way, the project, which we completed in three months, was a great success and has resulted in further work with the client,” says Zinn. The Skyriders team has been contracted by Resolute Mining to carry out inspections and maintenance-related repairs on the smokestack every four months. The first post-project inspection carried out by Skyriders found considerable wear to the internal lining of the original stack. Skyriders carried out the plate welding repairs using rope access, while a sandblasting specialist was contracted to recoat the actual stack on the ground. The next inspection, which will be carried out by Skyriders, is scheduled for November this year. Currently, twenty percent of Skyriders’ work is mining-related, with some of its most recent mining-related work coming from Goldfields’ South Deep project, Palabora Mining Company’s Phalaborwa Mine and Anglo Coal’s Isibonelo Colliery.

FINANCIERS. INVESTORS. GOVERNMENT REPRESENTATIVES. MINING PROFESSIONALS.

More than 180 COUNTRIES REPRESENTED. More than 40 AFRICAN DELEGATIONS.

THIS is WHERE

THE WORLD

CONNECTS with AFRICAN MINING

6-9 FEB 2012

CAPE TOWN, SOUTH AFRICA

WWW.MININGINDABA.COM BOOK EARLY & SAVE! Enter Code M12IM for additional US$100 discount.

Offer code expires 16 DECEMBER, 2011.

TECHNOLOGY MAINTENANCE

Preventing expensive equipment failure Prevention is better than cure and it is definitely a lot cheaper.

ith the use of a cost-effective conditioning monitoring tool during regular maintenance check-ups, Atlantis Mining has been able to save millions in replacement costs. Oil analysis by WearCheck Africa proved instrumental in avoiding machine failure on two of Atlantis Mining’s earthmoving units recently by detecting component wear in time. The Middelburg-based mining contractor’s entire fleet of Caterpillar, Komatsu, Hitachi, Volvo and Terex equipment has been on WearCheck’s oil analysis programme for the past 12 years. Recently, samples on both final drives of a Caterpillar D9T bulldozer were diagnosed by WearCheck as borderline. The oil was resampled and drained but the samples came back as borderline again. Atlantis resampled the new oil after 100 hours in use and submitted this to WearCheck, and again the sample was borderline. “The misleading factor on this machine was that the magnetic plugs showed no signs of contamination,” says Mark Johnstone, managing director of Atlantis Mining. “We continued to run the machine while monitoring the final drive oil samples until we were advised of a critical sample at 9 028 hours. Again the magnetic plug showed no signs of contamination, but it was decided that the final drives should be opened.” Three weeks later the machine was brought into the workshop and the final drives removed at 9 192 hours. On disassembly it was found that the inner bearing had started to ‘pit’ and that the wear was starting to go through the hard facing. All the bearings were replaced and a major failure was avoided. “This was thanks to our successful oil sampling programme, accurate diagnosis by WearCheck technicians and timely action,”

Johnstone emphasises. A second unit that was rescued from a potential scrap heap was a Volvo A40D articulated dump truck, the engine of which had returned normal oil samples up until its mid-June service at 14 753 hours, when WearCheck identified a sample as borderline with diagnostic remarks relating to bearing wear rates and oil pressure. The oil had been changed at the service, so the machine was inspected and put back to work. At the next service in early July at 14 981 hours, the oil was drained again and a sample submitted for analysis. Once more, WearCheck classified the sample as borderline with increased bearing wear, but this time recommended that the oil filter be cut open for analysis. This was found to contain traces of brass-like material so the

engine was removed and sent to Babcock for repair. When stripped, it was found that the thrust washers on the crankshaft were worn, which was where the debris was being generated, but not to the extent that the block was damaged. “The engine was removed before failure, once again as a result of WearCheck’s oil analysis and informative feedback, and because we acted on the results as soon as possible,” Johnstone explains. “Knowing that we can rely on our oil analysis programme gives us peace of mind, particularly as we are working with machines that are costly to replace and equipment downtime quickly eats into profits. It is a cost-effective conditioning monitoring tool that has proven its worth time and time again,” he concludes.

The engine of this Volvo A40D was saved through the early discovery of component wear Inside Mining 11&12 / 2011

DIAMOND DRILLING 2500m DEEP AND RC DRILLING

HEAD OFFICE SOUTH AFRICA Tel: +27 14 573 3444/666 Fax: +27 14 573 3555 www.discoverydrilling.co.za EͲmail: info@discoverydrilling.co.za

BOTSWANA Tel: +26 7 261 5870 Fax: +26 7 261 5775 www.discoverydrilling.co.za EͲmail: hennieatdiscoveryafrica@gmail.com

TECHNOLOGY DRILLING

Setting certified industry standards DICASA was formed in March 2010 to develop a certification framework for people involved in the drilling industry. Tersia Booyzen talks to the chair, Colin Rice, about the goals of this voluntary association.

he Drilling Industry Certification Authority of South Africa (DICASA) was formed by a core group of eight companies involved in the exploration drilling industry. Since no recognised drilling qualifications existed in the marketplace, the initiative was and is seen as an extremely important development for the industry, by the industry. “Because of the emphasis being placed on occupational health and safety, mining houses want to know the competence levels of their contractors as any incidents can reflect badly on them and their reputations in the marketplace. In South Africa, there were no guidelines for diamond drilling,” says Rice. He explains that many companies in the drilling industry run extensive on-site, practical skills training programmes for their drilling crews. “Many of these programmes are of a very high standard as is demonstrated by the high production rates that are achieved by many of our contractors,” he says. The problem, however, is that these inhouse training programmes have no industry recognition and so their value to the trainee is somewhat limited. DICASA was formed to combine and co-ordinate the efforts of these individual companies and generate industry-recognised certification standards. Rice notes that DICASA has elected to adopt a competency-based structure on which to base its certification framework. The assessment format was agreed upon as there is a very high level of illiteracy among operators and a formal reading and writing course was not a viable option. “We’ll ask for forgiveness later as we didn’t ask for permission. It’s also important to note that this was done as an industry initiative and doesn’t form part of formal Seta education,” Rice says with a grin. “It was considered essential to prioritise the certification of site operational

staff, namely drillers and assistant drillers. The initial focus was therefore on these two occupations, which are both listed as scarce skills by the Mining Qualifications Authority (MQA). We developed the assessment guidelines over a period of nine months. A series of training courses aimed at upgrading the knowledge and skills of supervisors and managers are also being developed,” Rice says.

completed his assessment by an industry expert, he is issued with a card similar to a driver’s licence that states his competencies. It sometimes feels as if we are handing over graduation certificates as the pride of accomplishment is phenomenal,” Rice says. Another essential objective of the certification framework is to satisfy mining and exploration houses that drill staff TABLE 1 Assistant driller skills unit schedule

Objectives “The objectives of DICASA are far wider than merely certifying that the people are competent to operate equipment, we believe that the upliftment of the industry is critical to our survival and development and that this is dependent upon making the industry an attractive one to be employed in. “The guys who are getting the short end of the stick are the field guys, these drillers and assistant drillers are the backbone of the industry and many have worked in the industry for many, many years yet they have nothing to show for it, no recognition whatsoever, no defined career path and very little opportunity to move between specialisations. One of our prime objectives is to address this unacceptable situation,” elaborates Rice. He notes that, despite the fact that the drilling industry in South Africa is very large and strategically very important, no nationally recognised drilling qualifications exist in the NQF structure. A person with a lifetime of experience has no formal recognition of his skills and no mechanism to stretch his level of understanding of the processes that he is involved in. “As is the case with many other industries in South Africa, the drilling industry is greying and the attraction of new entrants to the industry is critically important. Once a driller or assistant driller has

Core skills units General fire awareness Introductory first aid SHEC – induction (S or UG) Specialised skills units assist in • • • • • •

diamond core drilling: surface, medium diamond core drilling: surface, deep diamond core drilling: underground rotary drilling: blasthole percussion drilling: blasthole rotary percussion and reverse circulation drilling • geotechnical investigations • raisebore drilling.

Drilling in Oranjemund

Inside Mining 11&12 / 2011

TECHNOLOGY The role of drilling in mining

significant portion of South Africa’s GDP is generated through mining of its vast mineral resources. The enormous investment that is required in order to establish a mine is made only after a very detailed and extensive exploration drilling programme has been undertaken. This exploration drilling programme typically involves drilling a number of boreholes into the earth and extracting samples of the rock penetrated. These samples are then assayed to determine mineral content, the results of which form the basis of the evaluation phase of the exploration programme. The depths to which the exploration boreholes are drilled will depend upon the mineral being explored, for example, holes drilled to sample heavy mineral sands may be 20 metres deep, while holes to explore for platinum group minerals (Rustenburg and

employed on their projects are competent and able to safely operate the equipment in use, with a good understanding of health, safety, environment and community (SHEC) issues. The DICASA certification framework has therefore been designed to: • Provide a mechanism to certify the competence of drillers and assistant drillers to operate equipment in a variety of defined drilling specialisations. • Provide a mechanism through which drillers and assistant drillers can be recognised for the skills and many years of experience that they have. • Provide a development pathway along which people working in the industry can progress, based on their knowledge, skills and experience. • Entrench enhanced standards of practice.

Steelpoort areas) may extend to 2 000 metres, while gold exploration boreholes may reach depths in excess of 5 km below the surface of the earth. Several different methods of drilling exploration boreholes are used in southern Africa. The most common drilling method is a rotary method commonly referred to as ‘diamond drilling’. In this context, the term ‘diamond’ refers to the fact that the drill bit uses diamond as its cutting element. In a diamond drilling operation, the drill bit is composed of an array of diamonds fixed into a metal body with a hole in the middle. The drill bit is rotated at very high rotational speeds and, as it advances into the rock, it produces a cylindrical core of rock which is later analysed. Another popular drilling method is a rotary percussion system referred to a ‘reverse circulation drilling’. In this method, high pressure compressed air and a downhole hammer is used to generate a percussive

action which crushes and pulverises the rock into small ‘chips’. These chips are then blown to the top of the borehole by the compressed air where they are collected and analysed in much the same way as a core sample. Exploration does not end when the orebody is found - intensive drilling programmes continue as a normal and essential part of the production phase, and also the planning phase for mine extension. Having completed the exploration and evaluation phases, a decision to create a mine might be taken. Every mining operation requires that rock is broken and this involves a drilling and blasting process. In an open cast (surface) mine or quarry, holes of varying diameters are drilled in a predetermined pattern using a variety of drilling methods. These holes are then charged with explosives and blasted to yield fragmented rock. In an underground mine, a similar process is followed.

“As we went through the process, we noticed that drill site safety standards differ dramatically from mine to mine, even within the same mining group, and that there is a huge need for drill site safety training. We launched a course in June and some very senior people have attended it. It’s been a great success and we intend doing this course monthly. Our next phase is to raise funds to do some more of the in-depth work,” Rice adds.

unit’, as shown in the assistant driller skills unit schedule in table 1. For example, for a candidate to obtain certification as an assistant driller: diamond core drilling: surface, medium, he would have to provide evidence that he has successfully completed an acceptable training course in the three core skills units: • general fire awareness • introductory first aid • SHEC – induction (surface or underground operations). He will then be assessed by DICASA in the specialised skills unit: • Assist in diamond core drilling: surface medium. The competence assessments are entirely skills based with only a small theory and knowledge component.

Certification framework The certification framework is based on a series of ‘skills units’, which define a competency standard for a set of tasks, and a competency certificate is created by combining the ‘core skills units’ with a ‘specialised skills

PRODUCTIVITY

DRIVING P

Tranter Products & Services • Original Equipment Manufacturers of SECO pneumatic rock drills, jackhammers, spares & accessories • Rock drill maintenance service & support with potential for on-site stock availability • Drilling operations evaluation & recommendations, including gathering & analysis of drilling performance data • Test certificates for all rock drills & drifters with product warranties • Risk assessments available on our products

Business Benefits • REDUCED DOWNTIME – Reduced maintenance time! Lower overall operational costs!

• LESS MACHINE BREAKDOWNS - Quality products & spares! Greater repair interval periods! • INCREASED TONNAGE - Better drilling performance! Increased machine ore-face time!

Tranter Facilities

• ISO 9001, ISO 14001 & BS OHSAS 18001 certification assuring our quality • In house manufacture of machine components • In house metal heat treatment facilities ensuring the highest quality product

NOISE REDUCTION TECHNOLOGY Results @ 5 Bar Unmuffled S215 = 113 dBA 2nd Generation Muffling = 103 dBA Tested & independently verified

NO LOSS

OF DRILLING PERFORMANCE!

ranter R O C KD R I L L S

Customer Service Centre: +27 11 767 2941 +27 11 761 2324 sales@tranterrockdrills.co.za www.tranterenergyandmining.co.za

TECHNOLOGY TABLE 2 Driller skills unit schedule

Core skills units First aid level 1 SHEC – general (S or UG) Specialised skills units assist in

Once the candidate has been assessed and found ‘competent’ in the specialised skills unit, and provided that the evidence provided to support the core skills units is sufficient, he will be awarded a certificate of competence. The candidate can then learn the necessary skills in another drilling specialisation and so migrate to another sector of the industry if he so desires. Similarly, he can acquire further skills within his specialisation and so work towards certification as a driller. Obviously, a person will have to be declared competent

• specialised skills units • conduct diamond core drilling: surface, medium, hydraulic swivelhead • conduct diamond core drilling: surface, medium, longstroke • conduct diamond core drilling: surface deep • conduct diamond core drilling: u/g electro hydraulic • conduct diamond core drilling: u/ground - pneumatic • conduct rotary drilling: blasthole • conduct percussion drilling: blasthole • conduct rotary percussion and reverse circulation drilling • conduct geotechnical investigations • conduct raisebore drilling.

as an assistant driller before he can apply to be assessed on any driller skills units. Since all drilling operations involve the operation of powered machinery, heavy equipment and working at heights, the primary concern of DICASA therefore is the ability of the driller or assistant driller to

operate in a safe way. All assessments are therefore founded on principles of health and safety and failure to carry out tasks in a safe way will result in a ‘not yet competent’ finding. The certification process for drillers is identical to that for assistant drillers. Two sub-specialisations in diamond core drilling have been created to cater for the use of hydraulic swivelhead and longstroke drills, and these skills units will be identical except for the skills sets that pertain to the operation of the drill (table 2). To obtain certification as a driller: diamond core drilling: surface, deep, a candidate would have to provide evidence that he has successfully completed a training course in the two core skills units: • first aid level 1 • SHEC – general (surface or underground operations). He will then be assessed in the specialised skills unit: • Conduct diamond core drilling: surface deep.

PASSION FOR PROGRESS

RESOURCES Bauer Resources GmbH Germany and all their subsidiaries, carries out largecalibre exploration drilling for diamonds, manganese, iron ore and gold, as well as drilling wells and constructing groundwater control barriers for open-cast mines.

www.bauer.de

Southern Africa: BAUER Technologies South Africa (PTY) Ltd. ▪ Randburg 2194 Phone: +27 11 793 2616 ▪ info@bauersa.co.za Western Africa: BAUER Resources Ghana Ltd. ▪ Teshie-Nungua Accra, Ghana Phone: +233 54 100 4887 ▪ andreas.ulonska@bauer.de

TECHNOLOGY NOISE POLLUTION

Putting a muffler on noise pollution In 2005, the then Department of Mineral and Energy announced new benchmarks for upper noise level limits for all mining machinery at 110 dBa. The industry was given until 2013 to comply, so what is the current status?

ill Murray, the design engineer at Tranter Rock Drills, says that the issue is very contentious. When the DME announced the noise level benchmark it wasn’t made mandatory and therefore it is currently only a recommendation and not a regulation. This is something that the Department of Mineral Resources (DMR) will have to address urgently if they want compliance with this safety initiative in the industry in the next two years. “At the time we, the equipment suppliers, were given an eight year window to reduce the noise levels of equipment used underground,” says Murray. “Tranter Rock Drills immediately rose to the challenge to develop new quiet technology in pneumatic rock drills. Although muffle boxes on pneumatic rock drills have been available for over 30 years, we sought to address further muffle enhancements that could be employed to reduce rock drill exhaust noise without reducing drilling performance, but at the same time being light weight and good value for money. “All of Tranter Rock Drills’ products are proudly developed and manufactured in South Africa and it took us three years to come up with the rules on how to reduce noise for hand-held jackhammers - we spent R1.1 million and another two years perfecting the job,” Murray notes. The process included consultation with the mining industry and five non-negotiable requirements were determined: • the solution must be built in not bolted on • it must be lightweight • it must be effective • it must be inexpensive • it must not affect the drill performance. Tranter’s solution was showcased to the

Inside Mining 11&12 / 2011

South African mining industry at the Electra Mining show in September 2008 in the form of a second generation rock drill muffling system on its SECO S215 and S25 drills. Independent free-field noise level tests to SABS 1470 standards were conducted by the CSIR Mining Tech, both on

as they feature muffling technology that reduces the noise levels of the machines to well below the stipulated levels by the DMR without compromising performance output. Thomas Lungu, Tranter’s GM: export and marketing, adds that the strength of all the SECO products is evident when

“We spent R1.1 million and another two years perfecting the job”

the surface and underground, which proved that the S215 M2 rock drill, drilling at 5 bar air supply pressure, emits a noise level of 103 dBa. The technology available on hand-held rock drills was successfully carried over to large bore, powerful, heavy weight, pneumatic drifters. The same criteria applied, and what resulted is the S36M muffled drifter - designed to replace the well-established and un-silenced S36IR drifter. According to Murray, the S215M2, S25M and S36M are unique in their class

looking at tonnage from drilling operations, and the taper rods and bits can offer the benefits of lower replacement cycles due to longer drilling lengths with these products. Overall, the benefits to mining companies is the reduction of overall drilling operational costs over time, with increased mining tonnage and, most importantly, the reduction of hearing loss in our miners’ working lives. When asked why mining companies aren’t clamouring for this equipment, Murray wryly notes that there is no law to reduce noise levels at mines. He does however note that, in Rustenburg, the mines have formed a tripartite committee which meets monthly to discuss occupational health and safety and that this committee is currently conducting research on noise levels. They are equipping all underground staff with noise detectors to measure their levels of exposure over a specific period of time. Hopefully, Murray concludes, this benchmark noise exposure research by the MOSH forum in Rustenburg will create a whole new mindset in the mining industry.

Image: Anglo Platinum

is a top international site with breaking news, company and product listings, and events for the mining industry. Get up to the minute news from the international mining industry Find updated company information and search product and service listings Search and submit mining events Share your views and opinions through the blog section and by commenting on articles Post videos, photos and podcasts Network with mining professionals.

JOB MARKET

Are you looking for a job or searching for an employee? Than the miningne.ws Job Market is for you. The Job Market will give you the opportunity to: Upload a CV for free &UHDWH D SURÀOH Search for jobs and potential employees Keep up to date on positions offered by mining companies from all over the world.

THE

Visit miningne.ws today

NEWSLETTER BRINGS YOU ALL THE

TO SUBSCRIBE glen@3smedia.co.za TO ADVERTISE stacey.glad@lantic.net FOR EDITORIAL ENQUIRIES tersia@3smedia.co.za

LATEST NEWS

EVENT INFO JOB LISTINGS -FOR

FREE

MEDIA MEDIA

TECHNOLOGY TRUCKS

Green technology inhibited by local fuel quality The question of fuel quality in South Africa and the way in which it is inhibiting the introduction of greener engines is a big issue.

urrently, Euro 2 is the legislated minimum emission level for new motor vehicles sold locally, and diesel fuel with 500 parts per million (ppm) sulphur content is the universal standard made available at fuel outlets around the country. Higher quality fuel with 50 ppm sulphur content is provided by the petroleum industry to selected outlets, while Sasol delivers 5 ppm ‘Turbo Diesel ULS’ to its own branded outlets around the Highveld area. This situation of varying fuel quality allows some operators to employ vehicles with more advanced emission standards than Euro 2, but careful management of the fuel grade entering the fuel systems of these vehicles is imperative to ensure reliability. South African-applied Euro 2 standards, which consists of nitrogen oxide (NOx) emission levels limited to 7.0 g/kWh, is considerably more lenient than legislation presently prevailing in First World countries. Euro 5, the current European standard, pegs NOx at 2.0 g/kWh, while in the United States, EPA 2010 was enacted nearly two

Inside Mining 11&12 / 2011

3 years ago at a maximum of 0.2 g/bhp-hr. Japan’s JE05 standard, which came into force in 2009, set the upper limit at 0.7 g/kWh, while Europe is scheduled to apply Euro 6 on 1 January 2013, when the upper parameter will fall to 0.4 g/kWh. It is not yet known when South African fuel refineries will be able to supply diesel fuel nationally with 10 ppm sulphur content, which is the minimum requirement for Euro 6 compliant engines. Local refinery upgrades to the tune of R40 billion will reportedly be necessary to achieve this capability. In the interim, the national enforcement of any significantly more advanced emission standard will be impracticable. This situation poses difficulties to vehicle suppliers, whose global products have been obliged to move forward in conjunction with overseas emission and fuel standards. In some cases, ‘reverse engineering’ of new product lines will become necessary if they are destined for the local market. While it may be appropriate to question the necessity for South Africa to move ahead with more stringent standards that

4 require substantial capital investments, it is important to remember that the country has obligations in terms of international environmental protocols to reduce emission levels. Notwithstanding these, there is also the consideration that while retaining fuel standards at static levels will save on capital investment, disconnecting local vehicle technology levels from international norms also has a cost implication. South Africa’s previous attempt to do this under the Atlantis/ASTAS high local content regime in the 1980s produced, arguably, some of the most expensive trucks in the world, while denying their operators access to the reduced operating costs that come with regular technical advances. During that period of strategic priorities by the politically isolated South African government, most local truck and bus suppliers had been faced with costly re-engineering of their vehicles to accept local driveline components. Not surprisingly, several decided to opt out, figuring that this sort of investment to retain a marginal share of a highly competitive market running at just 0.5% of

TECHNOLOGY the global volume could not be justified. While the high degree of resulting driveline standardisation was welcomed by some operators, the price that they were paying for this perceived benefit contributed to the country’s general lack of global competitiveness. Fortunately, this situation prevailed for only slightly more than a decade, and by 1994 the first democratic elections had taken place and truck and bus manufacturers started returning in numbers to a considerably less dictatorial South Africa. The problem created for commercial vehicle suppliers by the current fuel supply situation is that they must supply South Africa with old fashioned engine technology compatible with local fuel quality. The further this country falls behind the rest of the world, the more potentially expensive this realignment of technical specifications becomes. There is the distinct danger that some manufacturers may decide, once

5 again, that the cost of local market participation is too high, while others may seek alternative engine supply from manufacturers who can justify the expense of maintaining the availability of obsolete technology. This will require extensive re-engineering of products to accept ‘foreign’ engines, which also carries a cost. There are remarkable similarities, for totally different reasons, between the situation prevailing in the early 1980s and the scenario threatening to develop in the years immediately ahead. Inevitably, transport operators will end up footing the bill for any special adaptations that have to be made to vehicles for local consumption, and with South Africa’s huge dependence on road transport, this will find its way into the broader economy. There is, therefore, a very strong case for South Africa to get its fuel supply house in order sooner rather than later, and this will bring related benefits to the environmental cause, while at the same time enabling some of the sting to be taken out of the prevailing CO2 tax on light vehicles.

New arrivals in the South African truck market The South African market for trucks, buses and vans with gross vehicle mass (GVM) ratings of more than 3 500 kg performed well during the first half of 2011, despite widespread concerns that product availability, particularly from the Japanese manufacturers, would serve to constrain sales volumes in the wake of the Tōhoku earthquake and tsunami that struck Japan early in March. It was notable that total reported sales outperformed the equivalent first half-year result for 2010 by 23.3%, and this has provided a favourable environment for vehicle manufacturers to introduce new and updated models into the market. Substantial product enhancement activities have already been introduced by the market-leading Daimler Trucks family, with upgrades to the Mercedes-Benz

6 1

Scania

introduced revised versions of its flagship 700 Series, which included the first local applications of automated mechanical transmissions in this range. This is action that is clearly intended to improve this marque’s competitiveness in the long-distance line haul sector. Volvo Trucks’s recent promotional focus has rested on its newly introduced FMX construction model line-up, while the successful revival of the Renault brand under Volvo’s patronage has been a recent feature of the extra-heavy commercial vehicle segment. After a difficult history when it was represented by a number of different local partners, Renault now seems to have finally established a firm distribution and support base in conjunction with its global partner and is building a platform for future growth. ‘Hands-on’ operator experiences at a number of recent construction

7 2

DAF

FAW

Isuzu

MAN

Actros, Axor and Atego ranges, which span the heavy commercial vehicle (8.5 to 16.5 t GVM) and extra-heavy commercial vehicle (over 16.5 t GVM) segments. The changes were of both a cosmetic and a technical nature, while in the Fuso product line-up sourced from Daimler’s Japanese affiliate – the FK and FM Series, which participate in the heavy commercial vehicle segment, were equipped with new Euro 2 compliant engines. The recent promotional emphasis placed on the Fuso brand by Mercedes-Benz SA makes it clear that these products are being positioned for more substantial participation in market segments that are currently dominated by other Japanese products from Hino, Isuzu and UD Trucks. Overall, the Mercedes-Benz Group recorded market share growth during the second quarter of 2011, reflecting market acceptance of these new models. At the extra-heavy end of the market, Toyota’s truck specialist subsidiary, Hino,

Powerstar

Western Star

industry field days have added momentum to Renault’s presence in the local market. Isuzu Trucks South Africa was rewarded with a substantial improvement in market share during the second quarter of 2011. During this period the marque also recorded its first sales of dedicated bus models since the mid-1980s. North American manufacturer Navistar International has replaced its erstwhile 7600 conventional (bonneted) model with the new Workstar and exhibited its forward control (cab over) Global Eagle at the Johannesburg International Motor Show. This latter model should provide a pointer to future model direction for Navistar, together with its global NC² partner Caterpillar, in the long-haul market, where International’s 9800 Series and its predecessors have enjoyed a long and distinguished history. Following recent revisions to its local distribution arrangements, DAF’s return to the local market in conjunction with

Inside Mining 11&12 / 2011

TECHNOLOGY the Babcock organisation has now started to gather sales momentum. The Brazilianbuilt Volkswagen Constellation range, now marketed by MAN in South Africa, has also undergone some payload-boosting technical revisions, which should enhance

8 8

Mercedes-Benz

Freightliner

its prospects for gaining a more meaningful foothold in both the heavy commercial vehicle and extra-heavy commercial vehicle categories. Parent company MAN continues to capitalise on the recent launch of its TGS-WW range of extra-heavy product, which has

now assumed the dominant position in the manufacturerâ&#x20AC;&#x2122;s local sales profile. Since the beginning of the year, Associated Motor Holdings has reported sales of vehicles into the medium commercial vehicle (3.5 to 8.5 t GVM) segment. Although

9 not detailed by make or model, it can be deduced that these consist of the Hyundai HD series and if the market is adjusted to include these volumes, it was noted that these models captured around 3.5% of the available segment sales during the second quarter. Several Chinese manufacturers active in South Africa seem to have developed more

interest in heavy commercial vehicle market participation, with FAW having introduced its 16.240FL and 9.130 models, while some product offerings from Dongfeng and Foton Aumark are also aimed squarely at the distribution sector. Dongfeng has introduced a

10 dedicated 6x4 rigid unit for the forestry sector, while compatriot FAW has announced that it will be bringing its J6 flagship trucktractor to South Africa. These Far Eastern brands do not report sales to the National Association of Automobile Manufacturers of South Africa (NAAMSA), so their market penetration cannot be accurately determined.

LIKE us on Facebook: WearCheck-Africa FOLLOW us on Twitter: WearCheck Africa WATCH us on You Tube: WearCheckAfrica

PROFILE VERTEX AUTOMATION

Increasing production by an explosive 150% Vertex Automation played a significant role in automating PMP’s new manufacturing facility to significantly expand its capacity to produce primary explosives for end users in the chemical and mining sectors.

he R10 million expansion project at the Pretoria Metal Pressings (PMP) Pretoria West complex was the result of growing consumer demand for primary explosives and will increase its ability to produce lead azide by 150% to more than five tonnes per month. The production of lead azide is an extremely dangerous and cumbersome process and there is no current automation protocol for its production. To help her realise her vision of automating various aspects of production, Berta Fourie, head of Detonics at PMP, approached Vertex Automation. Vertex is an industrial automation company which specialises in the development and implementation of innovative and technically-

Vertex has at its disposal all the technical expertise to meet this potentially ‘explosive’ challenge advanced solutions for complex production manufacturing and materials handling problems. Lead azide is a highly-sensitive, combustible compound. It will explode after a fall of around 150 mm or a static discharge of 7 milli-joules, and detonates at a velocity of around 5.18 km per second. It is used primarily in detonators to initiate secondary explosives and as such is supplied mainly to chemical companies AEL

and Sasol Dyno Nobel for the production of detonators for the mining industry. As an automation company with extensive experience in developing unique automation solutions, Vertex has at its disposal all the technical expertise to meet this potentially ‘explosive’ challenge. They had previously implemented a robotics explosive’s handling system at Sasol Dyno Nobel, and therefore had a clear understanding of the critical nature of the project. The project required that Vertex Automation develop, implement PMP Explosives manufacturing equipment

Inside Mining 11&12 / 2011

PROFILE

and commission all aspects of the automation and control system. Since no electrical motors could be used inside the production facility, Vertex Automation needed to develop a mechanical system that was driven by hydraulics and pneumatics. Steam was used to heat the process. They were also responsible for designing and commissioning the production of specialised equipment such as mirror finish stainless steel reactors in which the final product is produced, the manufacturing of storage tanks, double jacketed steam heated reactors, pneumatic pumps, pipe installation, the certification of pressure vessels and all other mechanical systems required for the plant. In short, the full plant including all equipment was supplied by Vertex. Vertex Automation made use of their team of in-house engineers to configure Schneider Electric’s VijeoCitect SCADA to control and monitor production. This includes, amongst others, heating and

CLOCKWISE FROM TOP LEFT PMP control room PMP mixing equipment being demonstrated Berta Fourie, head of Detonics at PMP PMP lead nitrate control panel

boasts the first integration of Schneider Electric’s Pelco Cameras and SCADA in the country. This will enable control room

The SCADA system, which is also used for batching, boasts the first integration of Schneider Electric’s Pelco Cameras and SCADA in the country preparation of constituent ingredients to be mixed together in the reactors and controlling all the mechanical systems. Festo cpx-mpa terminals and Omron PLCs were used to control the plant. The SCADA system, which is also used for batching,

Inside Mining 11&12 / 2011

operators to visually monitor the reactors and record the production process for quality control purposes. The production system Vertex created for PMP will allow for the safer production of lead azide by limiting direct

human interaction in highly sensitive aspects of production. The precise control that VijeoCitect SCADA enables with regard to temperature and quantity control will ensure greater consistency in quality throughout batches and enable an increase in production of 150%. The new manufacturing facility was officially opened by the chairperson of the PMP Board, Gabsie Mathenjwa, and the CEO of PMP, Carel Wolhuter, on 30 September. Speaking at the opening, Mathenjwa said, “PMP is a truly South African company, employs around 1 300 people and provides world-class ammunition to

PROFILE CLOCKWISE FROM TOP LEFT Chemical reactor Agitating equipment De-canting chemical reactor Preparation vessels many customers and, most notably, to the South African National Defence Force and the SA Police Services. Through export, it earns foreign exchange of between R200 million and R300 million annually for South Africa”. The investment into this modern facility became necessary for two reasons, firstly to respond to the higher demand from PMP’s clients and secondly to reduce risk. The new facility is geographically separate from the existing one, and can function independently. Thanks to Vertex, PMP will be able to produce considerably more lead azide with greater consistency in quality and with less risk to personnel. Koos Smit, the MD of Vertex Automation, says the company’s mission is to develop optimal or best value solutions for the specialised and technically-advanced needs of its clients. “Our business is to pursue innovative solutions that will help our clients improve efficiency, reduce costs and increase profitability,” he states. Vertex’s technical staff includes some of the country’s leading automation engineers and designers, who have accumulated invaluable experience through their involvement in the design and development of automation systems. Although Vertex’s core services focus on industrial automation, the company’s business is much wider, namely to develop and implement technically advanced solutions for difficult problems and the specific needs of clients. “While Vertex Automation specialises in high-tech solutions for intricate problems, the company is also well equipped to do mechanical, electric and control system work of a less specialised nature,” Smit notes. “Our major strength and competitive edge lies in our ability to hear and understand the customer’s needs, and to develop the optimal solutions for those needs. This ability is based on the skills of the company’s multi-disciplinary technical team. It is standard practice for Vertex to build an explicitly consultative relationship with our clients. “At Vertex, it is part of our normal routine to keep in touch with today and tomorrow’s technological developments, no matter how fast things may move. We are

committed to ensuring that our customers always have the best solutions to their needs,” he adds. An important facet of Vertex’s work is to ensure that the customer’s quality requirements and the relevant standards are met. Precision, productivity, efficiency and safety are non-negotiable in their service delivery. Smit stresses that an important issue is the confidentiality of services. “It is Vertex’s express policy to maintain strict confidentiality in order to ensure that the client intellectual property and trade information that we are exposed to is kept safe,” he notes.

“if you can dream it, we can design and buikd it”

Koos Smit c 083 268 5085 t +27 (12) 804 0515 f +27 (12) 804 6182 koos@vertex-sa.co.za 141 Creswell Street Weavind Park, Pta 0184

www.vertex-sa.co.za Inside Mining 11&12 / 2011

PROSPECTING

It’s a man’s country The following is an exclusive extract from Prospecting in Africa by Eddie Köstlin.

n 1958, De Beers embarked on a major programme on behalf of Williamson Diamonds Limited in Tanganyika. To this end, a major recruiting campaign was undertaken to hire young, adventurous males to become Field Officers. My few recollections documented here are those of a field officer. It’s like describing life in the army either through the eyes of a general or through the eyes of a mere ‘troopie’ - a vast difference. Many a camp move into other areas and many wildlife adventures were experienced during this period. Some encounters stood out and deserve to be briefly recalled as follows: - In the country north of Arusha, lions and elephants abounded and the thorns on the trees are notoriously vicious. In spite of four spare wheels, I had sixteen punctures that day and eventually ran out of repair kits. What to do? I tried the old remedy of stuffing the tyres tightly with grass. But that, I quickly found out, was just an old wife’s tale. The grass became pulverised after only a few minutes of driving. So I decided, having removed all the tyres, to drive back on the rims rather than my team and I having to spend end the night among the big cats. Try it sometime! On my return the geologist ist threw a fit as all four rims ms

had to be scrapped. - One day while on a walking ‘sampling safari’ (the bush was too dense to drive through), the team and the ‘askaris’ were fairly spread out. Picture the scene: the porters were carrying two and sometimes three sample bags on their heads, certainly a heavy load. It was hot, it was noon and everyone was pretty dozy and not tuned in to the bush activities around us. Suddenly, the lead man, who was pushing the bicycle wheel with the distance measuring cyclometer, spotted a group of elephants standing asleep under the trees. He signalled briefly and ran away. I was behind him and also took evasive action. Number three behind me was half asleep and was unaware of what was going on. He literally bumped into one elephant and his two sample bags fell from his head and split open. He immediately sprinted away but then remembered what we had drummed into our labour force: never lose the ‘karatasi’ (sample ticket). So he bravely ran back, picked up the two tickets that were lying near the elephant’s foot and then took rapid flight. The rest of the team likewise scattered in all directions without knowing why. Fortunately, no one got hurt, but it took us several hours to regroup and to proceed home. Miraculously, we found our vehicle, which

we had parked somewhere in the bush. Back at camp, number three proudly handed me the ‘karatasis’ which, of course, were of no use without the samples. - We worked in the impenetrable ‘Itigi’ thicket and had to cut their way through at a rate of no more than a hundred yards a day. They hardly saw sunlight and had numerous encounters with rhinos. When they pleaded for clothing and hardship allowances, Dr Murray in his characteristic way paid them a visit to experience the hardships for himself. That night, when we all sat in the camp after what had been a particularly heavy day, he was asked what he thought about the conditions. “It’s a man’s country” was the reply, and that was that. A major turning point in my life was a soul-searching, in-depth discussion one night with our geologist in charge, and friend, Hilary Deacon, on the veranda steps of a house on a sisal estate near Moa. I needed some advice on what to do with the rest of my life. He was an impressively sensible and humane person. In a fatherly manner, and over a bottle of gin, he eventually persuaded me to resign and to study geology at the University of Cape Town. I did so, although I later changed to study geophysics at the University of the Witwatersrand. It was one of those unforgettable moments I was lucky enough to experience; it changed my life totally and forever.

s the professional h home ome om e off e earth arth ar th sscientists cien ci enti en tist ti sts st ts th thro throughout roug ro ugh h southern Africa, the Geological Society of South Africa (GSSA) is proud to be the distributor of Prospecting in Africa, an account of the experiences of De Beers geologists working in Africa. Th Ther ere e are some amazing stories in this book ‒ and it should be an inspiration for all of There tho th o involved in the modern search for minerals on the African continent. those A Africa becomes the exploration destination of choice, the GSSA will continue to As serve the professional geologists searching the continent.

To order the book, please contact info@gssa.org.za.

CETERUM CENSEO

BY WILLEM SMUTS

Will there be blood in the streets?

It’s been three years since the financial crisis struck and we still face the same problems. Depressed real estate prices; high unemployment; slow economic growth and, despite everything, the worst may be still to come. In the US, Occupy Wall Street is gaining momentum. Will these protests lead to blood in the streets, as they have around the world? When will it hit home in Africa – so far, it

going to take more than meek murmuring to the contrary from the minister to set the world market at ease about South Africa’s mining future! But then, finally, the ANC stands up to its errant youth and slaps the leadership down a notch while handing young Julius a five year suspension from the party. According to a survey by TNS shortly after the verdict was announced, 70% of a group of young South

of investors around some exploration licences in the hope of securing funding. Can you imagine the shock and horror when they find two unknown drill rigs over their target - not to mention the beady-eyed look from the visiting investors! Now in Botswana there can be several different licences awarded for different commodities over the same land. To keep things orderly and more or less friendly between the various rights holders, the Geological Survey of Botswana

the same land – perhaps he assumed his client knew the rules, or cared about the rules. This of course begs the question: if consulting firms are hired by companies to provide competent technical staff for projects, who is responsible for adhering to the law and making sure the work is carried out safely and to acceptable standards on the ground? I wonder what readers’ opinions are in this regard?

Lest we forget…

“Despots rise out of fear and anger. They come to power promising to make us feel better about ourselves. They launch social programmes promising to end the plight of the poor and less fortunate. People feel better for a little while, but the problem with social programmes is that they only create more poor people” Robert Kiyosaki is only South Africa that has toyed with the idea? Evidence increasingly suggests that another crisis could soon devastate America, along with several European states. This time it could be even bigger and more catastrophic. Perhaps most distressing, it appears as if governments are trying to hide the evidence, or at best spin it away. Against this very backdrop, it seems South Africa is hard at work destroying the goose that lays the golden eggs as its senseless pursuit of nationalisation of our mines will surely destroy what has been built in this country over many years. It’s ugly out there and it’s

Africans surveyed feel that the ANC’s decision to suspend its youth league president, Julius Malema, for five years is justified - the collective sigh of relief that went up in South Africa was only dwarfed by the relief coming from neighbouring countries in southern Africa, where increasing concern has been voiced in business and senior government circles as to the potential fallouot for the region should Malema be allowed to carry on unchecked.

Is simple good manners too much to ask? Recently, a junior explorer was busy walking a couple

requires one to advise other rights holders over the same land if and when you intend doing some serious work (like drilling), clearly in an effort to prevent nasty surprises. Well the two unknown rigs turned out to belong to a Chinese company who, of course, claim they knew nothing of having to advise other rights holders of their activities. One can perhaps accept that, but then the question of what the Chinese’s local consultant (from a reputable South African firm) was thinking? This man knew the rules and, from long experience in the country, also knew that there are other rights holders over

…the world will continue to grow… whether measured by the number of iPhone 4S (launched Oct 4th) sold in the US or by the amount of Copper sold in Shanghai; metals and mining is still very much needed by the developed and the developing world to keep the ‘wheels on’ and the masses docile and happy. …and mining is here to stay as it represents the one solution to the world’s hunger for natural resources and the only route to a better tomorrow for the local communities in which it operates – whether its Africa, Latin America or Asia.

INDEX TO ADVERTISERS Barloworld Bauer Technology Bavaria Safety BHP BILLITON Centennial Trading Company Cura Software Drillcon (Pty) Ltd EOH Mthombo (Pty) Ltd Wonderware Eire Contractors (Pty) Ltd Hyundai Automotives SA Komatsu Mining Indaba Model Maker Systems

9 41 IBC 23 36 30 38 28 39 2 OBC 33 31

Multotech Group Promet Dadi Scantech Senmin Snowden The Geological Society of SA Tranter Rock Drills Vertex Automation VUMA Software ADCO (Pty) Ltd WearCheck Xstrata

21 IFC 18 34 24 50 40 47 26 46 15

Inside Mining 11&12 / 2011

EXCEL - 7727

Bronx - the brand for modern performance safety footwear that excels all expectations. Smooth grain leather upper. Oil and acid resistant. Dual density sole with steel midsole as standard at no extra cost. Steel toe cap - 200 Joules assured. Mens and Ladies sizes: 3 - 13. Colour: Black

IGNITE - 7728

Bronx the brand for modern durable safety footwear that will ignite your performance requirements. Smooth grain leather upper. Oil and acid resistant. Dual density sole with steel midsole as standard at no extra cost. Steel toe cap - 200 Joules assured. Mens and Ladies sizes: 3 - 13.

HIKER LOW - 6127

Designed by Bronx for men and women with an eye for fashion, combined with safety to provide quality protection. Using a top quality smooth full grain leather and a two colour, double density, polyurethane sole which is acid and oil resistant. Suitable for mens and ladies - all sizes available - from 3 to 13. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Colour: Black.

HIKER - 6128

Designed by Bronx for men and women with an eye for fashion, combined with safety to provide quality protection. Using a top quality smooth full grain leather and a two colour, double density, polyurethane sole which is acid and oil resistant. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Suitable for mens and ladies- all sizes available from 3 to 13. Colour: Black.

HIKER LOW - 6127

HIKER - 6128

Designed by Bronx for men and women with an eye for fashion, combined with safety to provide quality protection. Using a top quality smooth full grain leather and a two colour, double density, polyurethane sole which is acid and oil resistant. Antistatic for maximum protection. Suitable for mens and ladies- all sizes available from 3 to 13. Steel toe cap - 200 Joules assured. Colour: Choc.

VOLCANO LOW - 6190

VOLCANO - 6189

Engineered Bronx outdoor active design - Mens and Ladies Designed for comfort with a combination of technical features. Top quality smooth crazy horse water repellant leather. Double density, polyurethane sole which is acid and oil resistant. Antistatic for maximum protection. Steel toe cap 200 Joules assured. Mens & Ladies sizes: 3 - 13. Colour: Burnt Chestnut.

Engineered Bronx outdoor active design - Mens and Ladies. Designed for comfort with a combination of technical features. Top quality smooth crazy horse water repellant leather. Double density, polyurethane sole. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Oil and acid resistant. Mens and Ladies sizes: 3 - 13. Colour: Burnt Chestnut.

AEON - 6201

Bronx design for men and ladies working in the fast lane where style is paramount. Sporty fashion and world class safety combined to provide quality protection. Two tone rubber sole which is acid and oil resistant. Suede leather upper and overlays. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Mens and Ladies sizes: 3 - 13. Colour: Navy, grey and black.

AEON - 6200

Bronx design for men and ladies working in the fast lane where style is paramount. Sporty fashion and world class safety combined to provide quality protection. Two tone rubber sole which is acid and oil resistant. Smooth black leather upper. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Mens and Ladies sizes: 3 - 13. Colour: Black.

SNIPER - 6999

A security and safety boot for smart and efficient security teams. International design for safety and quality protection. Smooth and supple full grain leather with panels of strong nylon mesh. Double density, polyurethane sole which is acid and oil resistant. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Mens and Ladies sizes: 3 - 13. Colour: Black.

CHELSEA - 6191

Bronx engineering for fashionable men and women spending time on their feet. Maximum ankle support and comfort with easy grip tags for quick fitting. Water repellent crazy horse quality leather. Double density, polyurethane sole which is acid and oil resistant. Antistatic for maximum protection. Steel toe cap - 200 Joules assured. Mens and Ladies sizes: 3 - 13. Colour: Burnt Chestnut.

AGENTS Gauteng / Free State: Lennin Lombard 082 211 5012

KZN: Sales 084 701 9008

Western Cape / Eastern Cape: Charlene Dunn 072 566 0603

www.bronxsafety.co.za

All Bronx shoes and boots are fully compliant with SANS and ISO 20345 International Standards.

uppe marketing A05651/AM

Komatsu… a heritage of success

At Komatsu our vision has resulted in a proud heritage of technological success, and we are continuously evolving to meet the needs of our customers. Our unique and advanced equipment provides our customers in South Africa and world-wide w i t h innovation a nd ex ceptional v alue. We u n d e rst a n d t h e c h a l l e n g e s o u r c u s tomers encounter in their business; that is why our construction, surface mining, utility and process equipment is designed to meet the highest productivity, safety and environmental standards.

Komatsu – for the best in: • • •

Earthmoving and surface mining equipment Utility equipment Process equipment

Komatsu – Unique and unrivalled.

Komatsu Southern Africa (Pty) Ltd, cnr Diesel and Isando Roads, Isando. Tel: 011 923 1000 | Fax: 011 923 1111 Customer Care Line: 0860 566 2878