Inside Mining April 2014

www.miningne.ws MEDIA

AFRIC AN UPDATES ON THE

ining

GROUND AND UNDERGROUND

PROJECT MANAGEMENT The link between cost managers and engineers

IRON ORE Latest infrastructure at Kumba’s Sishen mine

IT & COMMS Trends in digital mining and data management

MINERALS PROCESSING

RESCUE DRILL

New colliery rescue system

Transfer point design

ISSN 1999-8872 • R50.00 (incl. VAT) • Vol. 7 • No. 4 • April 2014

CONTENTS

A F R I C A N U P D AT E S O N T H E

ining GROUND AND UNDERGROUND

EDITOR’S COMMENT

ENDORSED BY

3 www.miningne.ws MEDIA

AFRIC AN UPDAT ES ON T HE

ining

G ROUND AND UNDERG ROUND

PROJECT MANAGEMENT The link between cost managers and engineers

IRON ORE Latest infrastructure at Kumba’s Sishen mine

IT & COMMS Trends in digital mining and data management

MINERALS PROCESSING

April 2014

RESCUE DRILL

New colliery rescue system

ON THE COVER O

Tech Edge set to strike gold

INDUSTRY COMMENT

P6

5

M Mines Rescue Services has u unveiled a new combined ccolliery mine rescue ssystem that is one of the m most advanced of its kind iin the world

Charles Brewer, MD for DHL Express

AFRICA ROUND UP

11

Latest mining tidbits from the continent

INDUSTRY INSIGHT

Transfer point design

12

The fallout from the ongoing AMCU platinum strike

14

ISSN 1999-8872 • R50.00 (incl. VAT) • Vol. 7 • No. 4 • April 2014

Spotlight on the MPRDA Amendment Bill

EDUCATION & TRAINING

16

The MQA-Wits partnership forges ahead

HOT SEAT

18

Mike Andrews from trans4mine

FERROUS & NON-FERROUS METALS

10

22

Latest infrastructure at Sishen

23

ELB wins Kumba contracts

24

FLSmidth at Glencore’s Mopani copper project in Zambia

MINERALS PROCESSING

28

Weba Chute Systems

31

New dedicated service centre in Northern Cape

32

Rubber screen panels

34

LogimanRALS PROCESSING

PROJECT MANAGEMENT

14

37

Stefanutti Stocks

40

The need for constant evolution

42

Front-end loading workshop

44

Safety and skills development

46

Cost managers: A vital link

48

Interactive project management

IT & COMMUNICATIONS

50

Enabling technology

EQUIPMENT

40

54

Pilot Crushtec

55

Case Construction Equipment

IN SID E M IN IN G 0 4 | 2014

1

Leadership for the Mining Shop Steward

1st Annual

SP E O CIAL R FF del egis ER rec egateter 5 eiv s one e the and free 6 th

-Reaching collaboration through strong leadership between the employer and employee

Date: 4 & 5 June 2014

Venue: Gold Reef City, Johannesburg

CONFIRMED SPEAKER FACULTY Fred Arendse Group Chief Executive SIYAKHULA SONKE CORPORATION

Leigh Mac Master Head: Sustainability TRADE UNION SOLIDARITY

Vic van Vuuren Director INTERNATIONAL LABOUR ORGANISATION

Abia Mataboge Human Resources Manager VILLAGE MAIN REEF

Makhaya Reginald Blaai Member of Mayoral Committee, MMC: Corporate Services WESTRAND DISTRICT MUNICIPALITY

Sambatha Madoda Provincial Secretary SACP- NUM

Register by 19 May and receive an ITC Branded Beanie & Scarf

THREE SKILLS DRIVEN WORKSHOPS EFFECTIVE REPRESENTATION OF UNION MEMBERS BY SHOP STEWARDS DURING DISCIPLINARY ENQUIRIES (YOUR MEMBER DESERVES THE BEST) Facilitated by: Adv. Johann Raubenheimer Risk Management Consultant HOGAN LOVELLS

DISCUSSING THE CCMA/ BARGAINING COUNCILS REFERRAL PROCESS WHEN DEALING WITH UNFAIR DISMISSAL DISPUTES

DISCUSSING THE FINANCIAL AND ECONOMICAL DAMAGE CAUSED BY STRIKES TO THE MINING INDUSTRY

Facilitated by: Adv. Sharon Loops Managing Member SDL CONSULTANCY

Facilitated by: Greg Dalton Senior Lecturer UNISA

KEY STRATEGIES TO BE DISCUSSED

Unpacking the responsibilities and role of the mining shop steward Incorporating SHEQ duties into the mining shop stewards responsibilities Social development post 2014 in Southern Africa in relation to world trends

0DQDJLQJ FRQÀLFW EHWZHHQ WKH RUJDQLVDWLRQ and the mining shop steward Tools to improve your strike handling skills Key aspects to understanding the MPRDA and KRZ LW LQÀXHQFHV \RXU PDQGDWH

OUTCOMES & FEEDBACK AFTER THE CONFERENCE To ensure ITC conferences are outcomes driven, a summary document with delegate comments and suggestions are sent to the relevant authorities straight after the conference

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For more information contact Amrita on 011 326 2501 or email bookings@intelligencetransferc.co.za. Quote SSA-MNA to claim your 10% discount

EDITOR'S COMMENT

Publisher Elizabeth Shorten Editor Gerhard Hope Online editor Lezette Engelbrecht Head of design Frédérick Danton Senior designer Hayley Mendelow Designer Kirsty Galloway Chief sub-editor Tristan Snijders Sub-editor Beatrix Knopjes Production manager Antois-Leigh Botma Production coordinator Jacqueline Modise Marketing manager Hestelle Robinson Digital manager Esther Louw

Tech Edge set to strike gold

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I

N THIS MONTH’S cover story, we take a closer look at the Tech Edge Group of Johannesburg’s local design of a mobile rescue winder for a new colliery rescue system for the coal-mining industry. The complete system was unveiled at a recent function at Goedehoop Colliery near Witbank, with the ‘proudly South Africa’ mobile rescue winder taking pride of place.

MD Russell Moore told Inside Mining that the company is already forging ahead with an application for the hard-rock mining industry. “We have another machine, about 2.5 x the size of the colliery unit, designed specifically for use in hard-rock mining,” confirmed Moore.

Moore explained that the while the coal-sector version was designed to rescue one person at a time from a depth of 1.3 km, the hard-rock version is designed to rescue five people at a time from a depth of 3 km. While the scale is obviously different, the operating principle is exactly the same.

“Depending on the client’s needs, we can upscale it. We are pretty flexible as we have the capacity and the capability,” said Tech Edge COO John Bassill. “The whole point of our larger hard-rock machine is that you do not have to drill an access tunnel. In general, the South African mining industry requires mines to have a secondary outlet.

“Thus if your main shaft hoisting system is impacted by a seismic event and you cannot hoist people, our machine has a ‘go anywhere’ capability, along with complete back-up power and an 8WD. It can go anywhere and lower down any shaft.”

Moore added that the hard-rock version can be used for various other purposes such as shaft inspection services. “In our opinion, especially given the emphasis on mine health and safety these days, it is an absolutely essential piece of equipment,” he said.

Inside Mining editor, Gerhard Hope, is dwarfed by a Komatsu 860E haul truck at the R1 billion Life-Of-Mine Heavy Mining Equipment workshop at Kumba Iron Ore’s Sishen mine in Kathu in the Northern Cape. See p22 for the latest on Sishen’s infrastructure

IN SID E M IN IN G 0 4 | 2014

3

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INDUSTRY COMMENT

Great things await Africa

T

HIS HIGHLIGHTS how serious Africa is being taken in the global boardrooms of large corporations. Charles Brewer, MD for DHL Express sub-Saharan Africa, elaborates: “Companies are now looking to expand into Africa. More than ever, companies are looking to invest in its diverse markets. More than ever, commercial opportunities abound across the continent. It is clearly time for Africa.”

Deutsche Post DHL, the world’s leading postal and express group, recently announced its full-year results. The group posted revenues of more than €55 billion (R824.89 billion), with boosted profitability once again in 2013. These improvements have been attributed particularly to the company’s exceptional market position in the world’s emerging markets, including Africa.

Brewer adds: “DHL Express is the market leader across Africa, and our unparalleled footprint and continued investment in the continent is testament to that. During 2013, we continued with our expansion plans throughout sub-Saharan Africa, investing heavily in facilities and increasing our vehicle and aviation fleet.

“We have continued to showcase our commitment to Africa and have a firm belief and vested interest in Africa delivering on its obvious promise.”

Fastest-growing region globally Brewer points to the recent International Air Transport Association (IATA) Airline Industry Forecast 2013-2017 report, which revealed that Africa is estimated to be the fastest-growing region globally over the forecast period, with an expected five-year compound

2.8%

economic growth for South Africa in 2014

annual growth rate (CAGR) of 4.0%, while a growth rate of 3.2% (CAGR) is expected for international freight volumes.

“The International Monetary Fund has forecasted economic growth of 2.8% in 2014 for South Africa and 6.1% for the sub-Saharan African (SSA) region. With the continued growth from intra-Africa and international trade, the outlook for the SSA logistics industry is extremely positive,” says Brewer. The routes expected to experience the most significant growth in Africa in 2014 are linked to the fastest-growing markets, which include Ethiopia, Ghana and Nigeria.

Brewer attributes DHL’s positive trade forecast to more than just economic statistics. “Africa is an unbelievably entrepreneurial and dynamic continent, and I firmly believe that small and medium enterprises will be the engine of growth for the years ahead.”

E-commerce is a way of life It is difficult to ignore e-commerce on the continent, as this has become a way of life. “Buying and selling online is growing year-on-year in Africa, which includes a big shift towards e-commerce in South Africa. More than R4 billion of goods were traded through e-commerce in 2013 in South Africa as consumers realise the safety, convenience and time-saving benefits of shopping online.

Other factors that will likely influence trade are developments in technology, healthcare, construction and services, as well as the increase in manufacturing in Africa.

6.1%

economic growth for sub-Saharan Africa in 2014

Africa is not only the last frontier, but possibly the biggest frontier for business, says Charles Brewer from DHL Express.

Charles Brewer

Brewer says that this year the company has various planned investments into sub-Saharan Africa, including the opening of a number of new facilitates and planned expansion in Ethiopia, Kenya, Nigeria, South Africa, Ghana and Angola.

DHL Express SSA will also be expanding its dedicated air fleet, adding a number of new planes to the West Africa region, including a Boeing 737.

2014 expansion strategy “The introduction of these new facilities and planes reflect the continuation of our expansion strategy for 2014. This allows us to serve our customers better who, in turn, can process, sell or assemble their products faster and more securely. This value chain extends to the end customer who receives a quality product, at the right price and at the right time.”

Brewer says that, while there are continued challenges, DHL is confident about trade forecasts for the year ahead.

“The key to continue driving growth will be smart, innovative and, above all, customer-centric people, processes and solutions, as well as a continued focus and investment in market leading infrastructure,” he concludes.

FIVE TIPS TO DOING BUSINESS IN AFRICA: • focus on your people, invest in their development and recognise cultural diversity • service/product differentiation is key • understand and adapt your brand to the local market • be aware of the risk and mitigate through solid fiscal control process • above all else, be bold and brave.

IN SID E M IN IN G 0 4 | 2014

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COVER STORY

Coal mine rescue system Mines Rescue Services has unveiled a new combined ned st colliery mine rescue system that is one of the most pe. advanced of its kind in the world. By Gerhard Hope.

S

OUTH AFRICA’S worst mine disaster took place on 21 January 1960. About 400 mineworkers were trapped 180 m underground after a major collapse at the Clydesdale colliery at the Coalbrook coal mine near Sasolburg in the Free State. No equipment was available to drill holes large enough through which to extract trapped mineworkers. There were no survivors.

“Sooner or later there is going to be another serious mining accident, because we have such a large mining industry.

Ultimately this is a very real problem.

Mining is unfortunately a very dangerous industry,” Russell Moore, managing director of the Tech Edge Group, told Inside Mining at the event. This company designed and manufactured the mobile rescue winder component of the colliery mine rescue system, a first for South Africa and, indeed, the global mining industry.

In 1962, following the Coalbrook tragedy, the Chamber of Mines decided to acquire a Rescue Drill Unit to be deployed during similar disasters. Such an operation would involve drilling an initial probe hole to locate “This is a proudly South the trapped mineworkers, followed by the drilling of a largeAfrican product for the diameter hole into the actual

South African mining industry.” Russell Moore,

managing director, the Tech Edge Group

BELOW The mine rescue winder RIGHT The rescue capsule

6

INS I DE MI NI NG 0 4 | 2 0 1 4

COVER STORY

mine workings through which to raise the trapped mineworkers by means of a mobile rescue winder deploying a rescue capsule.

World’s fastest rescue drill In 1977, South African company IngersollRand built the world’s fastest rescue drill, which meant that the concept of the Rescue Drill Unit could become a reality. This unit was located at the Colliery Training College in eMalahleni, on 24-hour standby in case of an emergency.

The unit’s biggest success to date was on 9 June 1991, when the equipment was used to rescue 26 mineworkers trapped 62 m underground at the Emaswati coal mine near Mapaka in Swaziland. This was the first rescue operation of its kind in Southern Africa, and the largest number of mineworkers ever to be retrieved safely in such a manner.

Fast-forward to 2014, when this nearly 40-year-old equipment is being replaced finally with the third generation of the colliery mine rescue system. “Whenever we deploy a rescue drill, many lives are at stake. Rescue drills do not get used to

save single individuals; it goes about multiple individuals and teams that need to be saved,” said Wilco Uys, chairman of the Collieries Committee. “Our focus as the coal-mining sector is not to use this equipment. Our commitment is to ensure that our operations are safe and hazard-free.

This equipment will be our last resort.”

Obsolete technology Even though the original equipment remains perfectly functional after all this

time, an upgrade became necessary due to the unavailability of spares, combined with the fact that this rescue system is based on obsolete technology. A task team was established in 2010, with the Collieries Committee giving the go-ahead for a new R45 million drill on 29 November 2011. Additional equipment was required for a proper colliery mine rescue system, which increased the total investment to R91 million (or R140 million in terms of the current exchange rate).

RIGHT The various components of the system BELOW The mobile rescue winder is the most important component of the coal mine rescue system

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IN SID E M IN IN G 0 4 | 2014

7

COVER STORY

RIGHT The go-ahead was given on 29 November 2011 for a new R45 million drill

The colliery mine rescues system comprises the following equipment: a Schramm T130XD rescue hole drill, a Schramm T685WS probe hole drill, a floxal nitrogen plant, a CIS compressor trailer, a Cummins generator, a mobile rescue winder, and a gas chromatograph and borehole camera.

Moore spoke to Inside Mining about the technical challenges posed by the design of the mobile rescue winder, the most important component of the rescue system as it lowers and raises the rescue cage that extracts the trapped mineworkers.

Sheave-wheel deployment The correct positioning of the sheave wheel over the shaft entrance is critical in this regard. “We went through various iterations in consultation with Mines Rescue Services in terms of the sheave wheel deployment mechanism, and in the end we came up with a design solution.”

This represents a significant achievement in mine rescue technology, placing South Africa, and the coal-mining sector in particular, at the forefront of this technology globally. “We are most proud of this. The mechanism allows you to lock it in position at any given point, which then allows you to back the mobile winder up and move it in position so that the rescue capsule goes down the shaft.”

Moore comments: “The beauty of it is that it is a standalone mobile rescue winder, and can be deployed at the drop of a hat.

This is a proudly South African product for the South African mining industry.”

Ongoing R&D David Mzisa, chief inspector of mines at the Department of Mineral Resources, recommended the coal-mining sector for its ongoing R&D, represented by the sterling efforts of companies like Tech Edge. Mzisa said that Mines Rescue Services and the equipment it deploys in rescue operations are rated among the best in the world. He was delivering the opening address on behalf of Mineral Resources Minister Susan Shabangu at the event.

“The Department commends the coal industry and the Chamber of Mines for investing in the new technologically advanced Rescue Drill Unit. This also highlights the unwavering commitment of the coal industry in taking proactive measures to ensure that all mineworkers have

“This highlights the unwavering commitment of the coal industry in taking proactive measures.”

David Mzisa, chief inspector of mines, Department of Mineral Resources

an opportunity to return home safely to their families.

“This is further demonstrated by our coal industry’s performance on health and safety which continues to reach record levels.” Mzisa noted that the South Africa coal industry compares favourably, in terms of fatality rates, with the best-performing industries in other countries such as the US. “We should continue focusing on R&D to ensure that there is sustained and

significant improvement on health and safety.” This must be accompanied by appropriate skills development. Mzisa concludes: “We will continue to collaborate with all stakeholders in the mining industry in a bid to ensure our mineral resources are developed in a safe and productive manner. We encourage exchange of ideas and programmes in order to learn from each other with regard to leading practice, technological developments as well as education and training.”

IN SID E M IN IN G 0 4 | 2014

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AFRICA ROUND UP

in associaƟon with MAURITANIA Saudi Basic Industries Corporation (SABIC), the largest company in the Middle East and the second-largest diversified chemical company, has commenced iron ore exploration in Mauritania, a move that strengthens its position as the leading steel manufacturer in the region.

The Saudi conglomerate is exploring the Atomai Mines in Zouerate, northern Mauritania. The site is said to hold over 500 million tonnes of iron ore reserves according to initial estimates, Arab News reported. SABIC has partnered with the Mauritanian National Company for Industry and Mining, following several joint venture agreements started in September, with Abdulaziz Al-Humaid, SABIC’s executive vice president, metals strategic business unit, saying he expects the agreement to run for the next three years.

The agreement has seen the establishment of Mauritania Saudi Mining and Steel Company (TAKAMUL) which was launched to acquire the necessary mining licenses as well as carry out feasibility studies and exploration work.

plant and a slag gravity separation plant at an estimated cost of about US$25 million (R264 million), according to a company statement in February. The equipment, installed at the company’s refinery in the central town of Kwekwe, failed to process chrome fines dug at Mutorashanga, said the managers, who requested anonymity.

AUSTRALIA BHP Billiton is considering spinning off its nickel, manganese, and aluminium businesses into a separate unit, with the purpose of boosting shareholder returns.

Responding to market speculation about its plans to sell its slower-growing noncore units, the AngloAustralian miner acknowledged it was studying the next phase of its ‘simplification’ strategy, which included structural options.

“We believe that a portfolio focused on our major iron ore, copper, coal and petroleum assets would retain the benefits of diversification, generate stronger growth in free cash flow and a superior return on investment,” the company said.

ZIMBABWE Zimasco has fired almost all of its managers and workers and closed supply stores at its Mutorashanga mine after equipment meant to refine chrome ore fines failed to work, three managers at the operation have told Bloomberg. China’s Jilin Houyan and Gold Horizon companies installed a sinter

GUINEA Rio Tinto is developing the southern part of the vast Simandou mountain deposit in Guinea, with first production from the massive US$20 billion project not expected until late 2018 at the earliest. The northern part of the Simandou concession is held by BSG Resources, a

company in the stable of billionaire diamond magnate Beny Steinmetz and Brazilian giant Vale. All work on the section awarded to BSGR by a former Guinea dictator in 2008 and 50% sold to Vale has been halted as the government of Guinea revisits all mining contracts entered into under previous regimes.

In the latest annual report filed to the US Securities and Exchange Commission by Vale, it reports that it is bracing itself to lose all its investment in the project, reports www.ft.com.

CENTRAL AFRICAN REPUBLIC All Africa reports that militia fighters in the mining town of Boda have rejected “a governmentsponsored attempt to allow a Muslim community of about 12 000 people” to say in the area. According to a report by Voice of America (VOA), Muslims in Boda want to leave, which could impact diamond trading. An economist in Bangui, the capital city, told VOA that with the exodus of Muslims, “there will be less money to pre-finance the diggers, lower prices due to fewer buyers, and a loss of tax revenue.”

Most diamond traders in CAR are Muslim, “for various historical and cultural reasons,” according to a report

by NPR.

BURKINA FASO Child mining has become a growing problem in Burkina Faso, where 60% of the population is younger than 25. A mining

boom in recent years has made the country Africa’s fourth-largest gold producer, where gold exports account for almost a fifth of economic output. The government estimates a tonne of gold was brought out of the ground by small-scale miners last year — official estimates say it could be double that — compared to the 32 tonnes mined legally. Part of that was dug by children. The UN Children’s Fund (UNICEF) estimates that between 500 000 and 700 000 adolescents and youngsters are caught up in the mining sector in the nation of some 17 million people.

SIERRA LEONE Mubadala, an investment vehicle in the United Arab Emirates (UAE), is positioning itself as a potential strategic mining partner in Sierra Leone. Based in the emirate of Abu Dhabi, Mubadala is a strategic investment and development company set up to explore new investments and partnerships in strategic sectors. The company has initiated talks with Sierra Leone regarding investment in its bauxite, alumina and iron ore sectors. Commenting on the meeting, Sierra Leone’s Honorable Minister of Mines and Mineral Resources Alhaji Minkailu Mansaray said: “We look forward to working towards a successful partnership with Mubadala in the mining sector, which is highly strategic for our bilateral economic cooperation, particularly for our development.”

IN SID E M IN IN G 0 4 | 2014 11

INDUSTRY INSIGHT

Strike drags on The protracted strike in the platinum industry is having a marked impact on the regional and national economy, writes Lezette Engelbrecht.

E

ARLIER THIS month it was reported that Anglo Platinum, the world’s biggest platinum producer, had issued force majeure notices to some of its suppliers, saying it could not meet contractual obligations, due to circumstances beyond its control.

This followed a similar notice by Impala Platinum in February, stating that the disruption in its supply chain had given it “no choice”.

Tony Nocton-Smith, financial director at Lesedi Drilling & Mining Contracting, tells Inside Mining it had received the force majeure notice in January already, and also during strike action last year.

It was “nothing new in Rustenburg,” he adds.

“The strike has impacted our business, but we are lucky to be diversified by commodity and geographic location.” Nocton-Smith adds that future business with the platinum producers appears to have a fair amount of risk associated with it, but that this extended beyond having to negotiate with the increasingly militant Association of Mineworkers and Construction Union (AMCU).

12 INS I DE MI NI NG 0 4 | 2 0 1 4

Downed tools The union’s members downed tools in January this year to demand an increase in basic salary to R12 500, instituted over a period of four years. In subsequent months, the three main platinum producers affected – Anglo Platinum, Impala Platinum and Lonmin – argued that the increase was unaffordable, and offered 9% instead.

In a statement in response to a memorandum handed to Lonmin by marching AMCU members, Lonmin CEO Ben Magara commented on the wider impacts of the strike: “Every day this strike lasts, means there is R67 million not spent directly on goods and services by the mines themselves. This translates into a direct loss to the country’s economy as a whole. The loss is multiplied as we move further down the supply chain. The same goes for the R88 million not paid daily in wages.”

Striking workers, however, complain of meagre salaries and work hazards, with many saying they will carry on striking for as long as it takes, reported The Daily BELOW The ongoing strike by AMCU workers is affecting the supply chain

Maverick. The strike has halted more than 40% of global production of platinum, and collectively cost the big three producers over R10 billion in revenue. In March, the companies issued a joint statement saying the extended strike in the platinum JOINT STATEMENT The extended strike on the Platinum Belt is ‘unprecedented’, and has reached a stage where some of its impacts were becoming irreparable.

This is the stark warning from CEOs Chris Griffiths (Amplats), Terence Goodlace (Implats) and Ben Magara (Lonmin) at the beginning of April.

The CEOs issued the joint statement to update wage negotiations with the Association of Mineworkers and Construction Union (AMCU).

“The impacts are not only on the companies, but also on employees, local businesses, suppliers and on communities,” read the statement.

While the companies remain open discussions with AMCU “within a reasonable settlement zone”, the CEOs note that “no talks are currently underway”. They added: “The financial cost – now close to R10 billion in revenue lost, and around R4.4 billion in earnings lost to employees – does not tell the full story. Mines and shafts are becoming unviable, people are hungry, children are not going to school, businesses are closing and crime in the Platinum Belt is increasing.”

The statement continued: “Overwhelmingly, we are being told by employees that they wish to return to work, and we need to collectively find a way to ensure they are able to exercise their right to do so.” The CEOs added that while much had been done to address the “various historical iniquities of the mining industry, we also acknowledge that more needs to be done”.

INDUSTRY INSIGHT

belt was “unprecedented,” and had reached the stage whereby some of its impacts were becoming irreparable.

Mine closures

platinum mining in particular.”

Guzek adds that, at an international level, the South African mining industry is not gaining popularity. “We already have noises from Anglo that if the situation persists there will be a reversal in the value of platinum. We have seen Glencore Xstrata selling a large holding in Lonmin due to scepticism over platinum. Major companies like BHP Billiton have for all intents and purposes divested from South Africa.”

Guzek says this has sent a very coherent signal that South Africa’s mining environment is not desirable at the moment. As a result, mining companies were actively looking into mechanisation and reduced dependency on a human workforce. This process will not happen quickly, however, which could mean an extended period of difficulty for the platinum industry and related communities and businesses.

BUY OUT Sibanye Gold, South Africa’s largest gold producer, announced towards the beginning of April that it would consider snapping up any platinum mines that could go on sale as a result of the protracted AMCU strike.

“There is nothing specific on the table right now, but we are open to the idea of buying platinum mines, some of which may go on sale after the strike, Sibanye Gold spokesperson James Wellsted told Bloomberg. He added that there was “a lot of potential to replicate what we have done with the Sibanye assets in the platinum sector”. This was a reference to chief executive Neal Froneman’s successful turnaround strategy at Sibanye Gold, which included changing shift patterns and cutting costs, thereby rendering lower-grade gold economically viable. Significantly, Froneman also negotiated a two-year wage deal with trade unions.

Anglo Platinum is considering whether or not to close its Rustenburg operations, with CEO Chris Griffith quoted by Bloomberg as saying: “We are now thinking very seriously: does it form part of the future of this company?” Anglo Platinum spokesperson Mpumi Sithole tells Inside Mining at the time of going to print, that no decision has yet been taken, and that the company was still looking at its options. “The company needs to be sustainable and viable and sustain jobs.”

She adds that while Anglo Platinum has started internal discussions to plan for every eventuality, its main priority was getting employees back to work. Sithole added that Anglo Platinum was still in the

position to meet contractual agreements with its customers.

Dr Jacek Guzek, Deloitte associate director, tells Inside Mining that the impact on Rustenburg itself is likely to be considerable. “Significantly more than 50% of the economy of Rustenburg and surrounding areas is tied to mining, and

IN SID E M IN IN G 0 4 | 2014 13

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INDUSTRY INSIGHT

MPRDA Amendment Bill’s investment impact The controversial MPRDA Amendment Bill could have significant effects on investment, say industry leaders. By Lezette Engelbrecht.

“The MPRDA is a milestone piece of legislation in the South African mining and minerals sector.” Susan Shabangu, Mineral Resources Minister

14 INS I DE MI NI NG 0 4 | 2 0 1 4

INDUSTRY INSIGHT

I

F APPROVED by the National Council of Provinces later this month, the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill could deal a blow to investor confidence, particularly in the oil and gas sector.

It was passed by the National Assembly on 12 March, and now awaits approval by the National Council of Provinces before it adjourned.

Alwyn van der Lith, director of the Africa Oil and Gas Centre of Excellence at KPMG, says the Bill creates greater uncertainty, especially regarding the “agreed price” at BELOW The State stands to become both a regulator and player in mining

which government can acquire additional shares of projects. This will not be welcomed by investors, particularly those in the oil and gas industry, he says.

However, Van der Lith adds that other African countries are also busy with amendments to their legislation, resulting in similar uncertainties. Investors will therefore not necessarily view South Africa’s oil and gas sector as any more uncertain than its African counterparts.

Offshore Petroleum Association of South Africa chairman, Sean Lunn, said in a statement that the Bill’s planned measures “will have a chilling effect on investment in a high-risk and capital-intensive industry such as ours”.

price the government is prepared to pay, he warned. Unlike previous amendments to provisions, industry players were not consulted about this last-minute change, despite the potentially significant impacts on the mineral and energy sectors.

Furthermore, the Bill mandates the Minister to “initiate or promote the beneficiation of mineral resources” in SA, enabling her to earmark certain mineral products for local processing. The Minister’s decisions are to be guided by “national development imperatives”, including the likes of macro-economic stability, energy security, industrialisation and infrastructure development.

Regulatory uncertainty

INSET Ongoing transformation is key

Chamber approval The Chamber of Mines, however, expressed its general approval of the Bill, saying there had been progress on several earlier shortcomings. Mineral Resources Minister Susan Shabangu argued that the Bill would not discourage international investors, and said that change was necessary in the mining and petroleum sectors.

“We are resolute in our commitment to keep the transformation agenda at the centre of development in South Africa. There can be no sustainable mining and growth of the industry without going to the very heart of transformation,” said Minister Shabangu in a speech to Parliament on 12 March.

Major areas of contention include changes in the State’s role in new oil and gas projects and increased powers given to the Minister. The former provision entitles the State to a free 20% stake in all new energy projects, as well as a seemingly unlimited additional share at an “agreed price”. In the Bill’s previous versions, this additional share was limited to 30% at “fair market value”.

The Democratic Alliance’s (DA) Shadow Minister of Mineral Resources, James Lorimer, said in a statement following the Bill’s passing that it “gives government the power to nationalise at fire-sale prices, any drilling operation that finds oil or gas”. Drilling companies can be forced, after they have given away 20% free carried interest, to give away the other 80% of the find at any low

Peter Leon, partner and head of Webber Wentzel’s Africa Mining, Energy and Projects practice, notes that a number of provisions are drafted “in a vague and ambiguous manner” and give the Minister broad, rather than guided, discretion. “This may create regulatory uncertainty. Poorly conceived or implemented regulation has been cited as a key issue for investors in the South African mining industry,” says Leon, referencing the 2013 Fraser Institute Annual Survey of Mining Companies.

He adds that ambiguity regarding the “agreed price” and how to break deadlocks in which the State is “entitled” to an interest, but cannot agree with the exploration company on a price for such interest, will result in further regulatory uncertainty.

“The amendments may create a conflict of interest, where the State becomes both a regulator and player in the industry. Investor sentiment is thus likely to be negatively affected,” notes Leon.

Following the Bill’s approval by the National Assembly, the DA contested the ANC’s motion to suspend Rule 253 of Parliament, which the DA claimed was used to “bulldoze” the Bill through. Rule 253 instructs that Members of Parliament be given a minimum of three working days to review legislation under discussion as part of its second reading in Parliament.

This was particularly necessary given the “disastrous economic damage” the mineral and energy sectors were likely to suffer as a result of the Bill, said Lorimer.

Independent Democrats MP Lance Greyling called the Bill a “major concern” for South Africa’s young oil and gas sector, andif enacted, he argued, the Bill would “ensure this industry never gets off the ground in South Africa”, due to its detrimental effect on investment.

IN SID E M IN IN G 0 4 | 2014 15

EDUCATION & TRAINING

Investing in the future The Mining Qualifications Authority (MQA) handed over a cheque for more than R23 million to Wits University on Friday, 14 March. Inside Mining attended this auspicious occasion.

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HE MONEY will go towards support for seven lecturers in mining engineering, and bursaries for 236 students in the following disciplines: analytical, chemical, electrical, industrial, mechanical, metallurgical and mining engineering and geology.

The Head of the School of Mining Engineering, Professor Fred Cawood, said he was very proud to be associated with the oldest school in the university. “This

school was established in 1896 after diamonds were discovered in Kimberley, and relocated to Johannesburg in 1904 with the discovery of gold there.

“That makes the school 118 years old this year. When it moved, geology and metallurgy were added. By 1922, more schools and faculties had been added, and the name changed to the University of the Witwatersrand, which itself will be 100 years old in 2022.”

Strengthening of ties Commenting on the latest funding from the MQA, Professor Cawood said: “We are very fortunate that we can celebrate this significant partnership. It is not a new partnership. It was initiated in 2005, and over the years strengthened to the point where this year the value is in excess of R20 million.”

The MQA is a statutory body established originally in terms of the Mine Health and Safety Act, registered as a Sector

Education Training Authority (Seta) for the mining and minerals Industry in terms of the Skills Development Act. The MQA is also responsible for transformation in the mining and minerals sector.

Professor Cawood said the School of Mining Engineering was particularly appreciative of the full-salary support for seven lecturers. “Over the years the scheme has made a big difference to the transformation of the composition of our academic staff.” At the end of 2013, 56% of the academic staff was defined as ‘black’, while 11 of the 23 meet the requirements of ‘historically disadvantaged South Africans’.

Full bursaries The 236 full bursaries are divided as follows: 120 for mining engineering, 59 for chemical engineering and metallurgy, 16 for geology and 41 for other engineering disciplines. The total amount allocated for bursaries is R18.8 million.

In addition, the MQA has already donated R100 000 in support for needy and deserving students. “We often have students approach us with various problems, from accommodation to food to a need for spectacles. We deploy these funds strategically by assessing all candidates. If the money can result in these students passing at the end of the year, then we allocate it.”

Professor Cawood says that tracing the academic success of these students has revealed an almost 99% pass rate.

The project started several years ago, and Cawood states that it is sometimes “as simple as buying the student the next meal.”

TOP LEFT The MQA is addressing the challenges facing the mining industry LEFT The Chamber of Mines building at the University of the Witwatersrand

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EDUCATION & TRAINING

LEFT (from left) Proffessor Fred Cawood, Yunus Omar and Proffessor Adam Habib

Postgraduate support

Historic challenge

In addition, R100 000 has been made available for postgraduate students and staff to prepare a paper for an academic journal, and then present it at any conference in the world. “So there is much more to this. Such a commitment speaks volumes about the MQA as an example to other Setas as to how to engineer transformation and support academic institutions,” said Professor Cawood.

Vice-chancellor and principal of Wits, Professor Adam Habib, said: “We are particularly appreciative of this investment, not in this department and its staff, but in the huge number of bursaries. Our historic challenge is that we have inherited a society with an enormous level of inequality, and that not only debilitates our simple economic functioning, but impairs our ability to address that historic challenge.

“What we are seeing in our society is an enormous level of polarisation, reflected in the violent service-delivery protests, but also importantly found in the mining industry and the Platinum Belt itself.

What is striking about these events is that, frankly, they arise not simply from the challenges in the mining industry itself, of which there are many, but they also emanate from the broader levels of economic disenfranchisement found within society as a whole,” argued Professor Habib.

“That is our challenge at this historic moment. If we are not capable of addressing such historic disenfranchisement, we will not only be unable to rebuild our society and our economy in the way that we need to, but we also run the risk of losing the society as a whole. Whether you are in the corporate sector, the government or academia, there is an increasing need for us to address this collectively.

“That does mean we have to breach our institutional boundaries. The Vice-Chancellor can never anymore say that his duties and responsibilities stop at the gates of the institution. And neither can the CEOs of mining companies say their responsibilities simply lie in reading the balance sheet and making sure they achieve optimal value for their shareholders.”

Instead it was incumbent on all stakeholders to help achieve this collective good. “You are never going to achieve a sustainable mining industry in South Africa unless you address the economic disenfranchisement that exists. Similarly, I will never be able to manage this institution’s sustainability in the medium to long term if we do not pull together. The same applies to business and government.”

Skill sets Another critical consideration was supplying the skill sets required by the

R23 592 113

Total amount awarded

mining industry. “This partnership with the MQA is testimony to what can be.

First of all, it is a partnership that has not happened in a once-off way. It goes back at least seven or eight years, and it shows that a partnership is something that must be constructed over a period of time.

“Secondly, it creates hope by providing bursaries for students who are particularly disadvantaged. By doing this, you not only provide resources to cover the training of students who do not have such resources under normal conditions, you also simultaneously create the skill sets for your industry. Even more importantly, you create hope in society, because through the exemplars of these bursary holders, you send a powerful message to poor communities, saying that if you are talented, and if you have potential, you can come to one of the best institutions on the continent for training in one of the most sought-after industries in this country.

“Thirdly, it is an investment into creating and sustaining the academy, and into ensuring that a new black professoriate comes into being,” said Professor Habib. “The university is not simply the responsibility of the government and the Vice-Chairman, but it is our collective responsibility for the provision of knowledge and skill sets for all of us. And our partnership with the MQA is a particularly magnanimous and strategic way to conceptualise the role of the university.”

Apart from its transformative potential, the partnership was also a benchmark for “being able to partner with government, and to get higher education and corporates to address the historic challenges faced by the mining industry, and doing it in a way that is sustainable.”

Professor Habib thanked Yunus Omar, the chief financial officer of the MQA, for, “firstly, the resources you have invested, secondly, the way you have invested those resources and, thirdly, for setting an example of how we can collectively, as stakeholders, address the challenges we confront in South Africa, on the African continent, at the dawn of the twentyfirst century. If we get this right, we not only get this industry right sustainably into the future, we will provide the exemplar for how to fix this society and the continent.”

IN SID E M IN IN G 0 4 | 2014 17

HOT SEAT

Tailored solutions Sandvik Mining’s trans4mine focuses on tailored solutions to address the particular needs of its mining customers. Gerhard Hope talks to operations manager Mike Andrews about the evolution of the department.

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hat has been your involvement with the mining industry and Sandvik Mining? I was fortunate enough to be granted a bursary from Sandvik Mining in my final year as a mechanical engineering student at the University of the Witwatersrand during 2004. I officially began my career at Sandvik in 2005 as a mechanical engineer and junior project manager in the technical department, where

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I was involved in a number of machine field tests, trials and applications-related projects.

During our interactions with customers, we noticed a distinct need to partner with our strategic customers, understand their mining processes and tailor solutions to address their particular needs. Our initial success led to substantial demand both locally and abroad, and ultimately evolved into a new offering and global department in Sandvik

Mining called trans4mine.

I have worked for the trans4mine department ever since, working my way up the ranks as a systems engineer, followed by project manager and senior project manager.

I have been very fortunate to run optimisation projects locally and abroad, including Zambia, Zimbabwe, Bulgaria, Ukraine, Morocco, Canada, Australia and Finland. I am now the operations manager for trans4mine and business line manager for Automation.

What is your vision and strategy to take the division forward? IÂ would like to see trans4mine form an integral part of the way Sandvik Mining does business with its customers. This involves partnering with our local business development and services areas of Sandvik Mining to ensure that we BELOW The next generation of mechanised mining professionals are being trained by trans4mine

HOT SEAT

LEFT Mike Andrews, trans4mine operations manager ; Pepa Nikolova, Chelopech Systems Coordinator ; and Stilian Minkin, Chelopech Operations Superintendent

basics’ approach is required to ensure that mines begin operating safely, effectively and efficiently with mechanised equipment. Once the basics are in place, we can then start to introduce technology to further streamline each operation, and what better way to do this than with automation!

We are also looking at growing the business globally within each of our sales areas and will have representatives located in these areas to provide shorter response times to our customers.

“We are an integral way Sandvik Mining does business with its customers.”

Mike Andrews, operations manager, trans4mine provide an integrated solution to the customer. These days, customers are looking less at equipment and focusing more on solutions.

The only way of providing tailor-made solutions to customers is to spend time with them on-site, understand their mining processes and associated constraints, and work jointly with them to devise valueadd solutions.

I therefore want the trans4mine department to be seen by our customers as pioneers in the industry, whereby we partner with them to ensure they receive solutions which benefit them and, by default, benefit Sandvik Mining. I hope to grow the department through customer demand and use the department’s

skills and knowledge as a training ground for the next generation of trackless mechanised mining professionals.

I believe there is some restructuring that has taken place at Sandvik Mining and at trans4mine? Yes. In addition to focusing on the trans4mine aspect of business, we are also responsible for the sales and support of Sandvik Automation products and services. In my opinion, this does not change the way that we operate, it merely adds to our product and service portfolio. In order to optimise mines, we need to understand the mining processes and applications.

We often find that a ‘back to

How integral is trans4mine to Sandvik Mining’s miningservices offering?

I believe trans4mine is simply a methodology and way of working; clearly understanding a customer’s needs and providing solutions to them truly adds value. With this in mind, I would say that the trans4mine way of working is fundamental to our business – within our relatively small department and throughout Sandvik Mining. Ultimately equipment can be ‘copied’ by our competitors. However, services and intellectual property are far harder to duplicate. With Sandvik Mining’s high-quality equipment, coupled with support services, skills and experience, it makes us a real force to be reckoned with.

What do you see as your main challenges and opportunities? As we all know, the mining industry is currently facing many challenges both locally, in terms of labour unrest, and

abroad, due to financial constraints. Ironically, we feel that these challenges are huge opportunities for trans4mine, since companies are looking to streamline their operations, become more efficient and cut costs wherever possible – this is essentially our job, and we are seeing massive demand at present for these types of services. I believe our biggest challenge is having the skills, experience and expertise to manage this demand and provide quality services to our customers. trans4mine has opted for appointing young, eager and dynamic people who are willing to learn and absorb the knowledge of our more experienced team members – this appears to work well for us. However, it does take time.

What are some of the latest trends in project management in the mining industry? From what I have seen in the past, many mining companies relied on EPCM contracts as a means of shedding the burden of responsibility.

Although in theory there is nothing wrong with this, it does require substantial effort to manage and oversee such contracts. This often did not occur, which resulted in massive project delays and quality issues. Based on the learning lessons acquired from such mistakes, I think many of the mining houses have woken up to the fact that they need to be more proactive and actively manage large portions of their operation.

In addition to this, access to information allows mining houses to be far more informed of contractor activities on a shift, daily, weekly and monthly basis. Information can be delivered to each IN SID E M IN IN G 0 4 | 2014 19

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HOT SEAT

LEFT Sandvik Automation products and services also fall under the gambit of trans4mine BELOW Copper mining using Sandvik Mining equipment

proposed solutions often need to be customised to cater for each and every mine’s unique needs. The demand for trans4mine services is growing exponentially in Africa and we want to continue that trend.

What is your outlook for future growth? There is a

manager’s computer on a real-time basis these days, thanks to new cost-effective Wi-Fi communication and smart equipment (including Sandvik Mining equipment with real-time sensors and remote monitoring). This allows for all parties to proactively manage processes in real-time.

Mining companies also seem to be increasingly outsourcing aspects such as risk management and financial control? It takes a large amount of dedication to monitor and manage mining projects and associated contractors. Sometimes we find that mining houses do not have the time, manpower or skills to effectively carry out these activities. The thinking these days is that mining houses focus on their core competency (mining) and rely on other suppliers to manage and control identified risk and financial needs.

Given the cost implications of not implementing a project on time, outsourcing can be a wise investment in the long run, provided it is managed effectively.

How important is it that the mining industry

adopts the latest technology? In my opinion, the mining industry is lagging substantially in terms of implementing technology when we compare it to industries such as the airline, automotive and IT industry.

We are fortunate to interact with a very diverse group of people, which allows us to expand our thinking and begin formulating what is now termed ‘the mine of the future’. This relies heavily on the use of state-of-theart technology.

We also see a number of pioneers and visionary CEOs now running mining companies and insisting on adopting the latest technology. It is getting to the stage where if a mining house does not adopt technologies such as automation and real-time communication systems, they will be left behind. I believe this trend can only benefit the industry and support our objectives in trans4mine.

only articulate and quantify the constraints of each of our customers, we also work jointly with them to define the optimal solutions, develop implementation plans and jointly implement the projects with them.

Based on our recent experience running projects in Africa, we believe Africa has some of the greatest potential – people are very eager to listen, learn and adopt solutions. The important point to emphasise is that there is no magic recipe for improvement. Our

distinct shortage of skills and experience in the mining industry, and I believe this shortage will grow with time. Based on this thinking, I believe that trans4mine will grow from strength to strength. Our approach is unique, our honesty is appreciated by customers and our solutions are customised to each mine’s needs.

We will continue to focus on our customers’ needs, train young and dynamic people who want to be involved in changing the industry for the better and implement solutions to make our customers’ lives and businesses safer, easier and more efficient.

Does your strength in operational auditing stand you in good stead in Africa? Absolutely. What differentiates us from other typical mining consultancy companies is that we not IN SID E M IN IN G 0 4 | 2014 21

FERROUS & NON-FERROUS METALS

Keeping Sishen on track Kumba Iron Ore’s Sishen mine has introduced new locomotives to boost production.

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On-production performance levels

The distribution team at Sishen with Tim Schweikert, president and CEO of General Electric South Africa, and Kumba Iron Ore CEO Norman Mbazima with the new GE locomotives at Sishen

The new C30-ACi GE locomotives will make it possible to deliver on-production performance levels at Sishen. Where two locomotives were needed previously to load a train of 114 wagons, only one of the new GE locomotives can do so. The new locomotives will therefore also save costs for Sishen mine, because it will no longer be necessary to hire locomotives to meet capacity.

This project is considered a significant milestone because Sishen mine will not have to replace these locomotives again in the current life-of-mine plan, as the new units have a lifespan of 35 years.

The new locomotives are configured for Sishen mine’s loading conditions and were commissioned and tested without any problems.

Tim Schweikert, president and CEO of General Electric South Africa, handed the key for the first locomotive to Kumba

HE MINE, near Kathu in the Northern Cape, took delivery of six brand new locomotives towards the end of last year. These state-of-the-art locomotives are manufactured by international conglomerate, General Electric (GE).

Locomotives started running at Sishen mine in 1978, with the existing ones exceeding their operating time by almost seven years. Therefore the need for the new locomotives was critical, especially because it was hard to source parts, while current technology did not work on existing locomotives. Maintenance costs also started to increase because these older technologies had to be replaced and sourced from all over the world.

Furthermore, Sishen mine requires 10 locomotives (five pairs) to maintain successful dispatches of iron ore. Previously, the mine only owned four GE locomotives for loading in pairs. The additional four locomotives had to be rented from Transnet for loading in pairs at R13 700 per locomotive per day to meet dispatching targets.

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Each time a locomotive broke down, loading pairs had to be split up in order to compensate for the defective locomotive.

TECHNICAL SPECIFICATIONS OF THE C30-ACI GE LOCOMOTIVES: • Operating weight: 129 t • Engine rated: GE Engine V12, 4-stroke turbo-charged, 3 300 hp • Continuous tractive effort: 460 kN (pulling 114 110 t wagons fully loaded) • Starting tractive effort: 548 kN • Fuel tank capacity: 7 000 litres

Iron Ore CEO Norman Mbazima, stating: “General Electric is grateful for the opportunity to have Sishen mine as a customer.

We are impressed by the magnitude of the operations and that this mine again put its trust in GE to provide the locomotives.”

Accepting the delivery of the locomotives, Mbazima said: “Kumba Iron Ore showed extremely rapid growth in the past five years. We can only sustain this growth by using equipment that not only meets this growth, but allows us to focus on safe production at Sishen mine.”

FERROUS & NON-FERROUS METALS

ELB clinches two Kumba contracts ELB Engineering Services has been awarded two plant projects by Kumba Iron Ore to produce lumpy and fine iron ore product from lower grade material.

T

HE PLANTS WILL increase iron ore production at Kumba’s mines in the Northern Cape by about two-million tonnes a year, with no increase in mining cost. They will be located at the Sishen iron ore mine in Kathu and the Kolomela iron ore mine in Postmasburg. ELB’s scope of work focuses on maximising production, while keeping

capital expenditure on construction of the projects to a minimum. The value of the projects has not been disclosed. The projects involve materials handling and dense media separation, including the design, erection and commissioning of plants using in-house capabilities.

Kumba has selected two project solutions that will deliver the highest return

on investment and shortest time to production, according to ELB. Chief executive Stephen Meijers said that the projects were “strategic” to Kumba Iron Ore’s export capacity. “ELB is honoured to be involved in Kumba’s expansion programme,” added Meijers.

Both the Sishen mine tailings plant and the Kolomela separation plant are under construction. Kolomela will have two dense media separation plants. These are designed to operate at high densities, and will be used to treat B-grade stockpiles at the mine. The Sishen jig tailings plant will be used to recover iron ore from existing tailings. It will consist of three dense media separation modules.

Last year ELB and DRA Mineral Projects launched a joint venture called Ardbel to focus on rapid mineral resource development in Africa. The Waterberg Coal Company announced recently that it had entered into a Letter of Intent with Ardbel as its preferred EPC contractor for the proposed development of the Waterberg Coal Project.

IN SID E M IN IN G 0 4 | 2014 23

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FERROUS & NON-FERROUS METALS

Production hoist for Glencore’s Mopani FLSmidth’s mine shaft systems team is installing a Blair Multi-Rope (BMR) production hoist at Glencore’s Mopani copper project in Zambia.

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HE NEW 5.5 M by 1.5 m hoist incorporates four drums and is one of only about 50 BMR hoists of its kind in the world, of which more than 90% have been supplied by FLSmidth. It recently supplied two 6.5 m-diameter, tower-mounted, four-rope Koepe winders with deflection sheaves to Impala Platinum’s No 16 Shaft near Rustenburg.

These are the first Koepe winders to be used within this mining company. The mechanically identical winders cater for payloads of 25 000 kg for the rock hoist and 22 500 kg for the personnel hoist.

Other flagship projects include a February 2012 order for a second hoist for Royal Bafokeng Platinum’s Styldrift operation in Rustenburg. This followed the successful commissioning of a FLSmidth-designed winder for the mine’s main shaft in 2011.

The 5.5 m by 1.8 m double-drum production winder was installed early in 2013.

Global manufacturer and equipment supplier FLSmidth has initiated a five- to

seven-year strategic business plan that will see its mine shaft systems business grow organically, fill gaps in the market and build the necessary skills and experience to become a one-source solution in the mine shaft business worldwide, just as it is in the mineral processing and cement industries.

Integration This follows a formal integration of the company’s mine shaft systems capabilities in South Africa and Canada in 2012 to form a dedicated business unit within FLSmidth. The mine shaft systems offering comprises two distinct product lines serving a common and unique sector of the mining industry, namely mine hoisting and mine shaft equipment technology. FLSmidth’s South African office is the global technology centre for hoist design while its office in Orillia, Canada serves as the global mine shaft equipment technology centre.

“The new business unit jointly markets these complementary product lines which share the same primary customer base,” explains Wendy Norman, FLSmidth’s sales manager responsible for mine shaft systems. “This is already proving an effective consolidation of the strong Dorr-Oliver, EIMCO and Vecor brands and technologies, with the combined scope of these product lines adding up to an extensive range of solutions for the global mining industry.

“Both these product lines have longstanding individual histories and robust track records dating back many decades.

In fact, the combined operations have been in mine shaft systems for more than 100 years. FLSmidth has installed more than 90% of the world’s Blair hoists, and has supplied numerous drum hoists larger than 4.27 m in diameter,” notes Norman.

Cross-selling “Since our mine shaft systems unit was established as a business entity last year, we have started to see growth in our market share within our traditional market strongholds in North America and sub-Saharan Africa, which is directly attributable to the cross-selling of existing products by a dedicated team.

“The mine shaft systems team has a depth of expertise that enables us to offer custom-designed equipment for maximum output. Our people specialise in recommending improvements based on problem areas in existing equipment. While FLSmidth will never be a shaft sinker or LEFT Installation of the 80 tonne drum shaft for Mopani OPPOSITE Shaft and bearing installation for the drum winder at Mopani

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FERROUS & NON-FERROUS METALS

a shaft equipper, we have every intention of growing our product lines to offer more of the infrastructure around the shaft. We believe there is major opportunity to grow in these areas worldwide,” says Norman.

“The real benefit is that we are bringing a lot of engineering skills together to offer our customers a holistic solution. For shaft systems to work really effectively, a combination of the right components are needed, namely electric motors, mechanical hoists, conveyances, loading and discharge arrangements and so on. Outside of rope selection, our team is able to check and verify the entire vertical transport system, making sure all elements are well coordinated.

Hoist inspection services “Another benefit is that, from an aftermarket point of view, we offer routine hoist inspection services. With this safety-critical equipment, such inspections are essential,

but owing to the skills shortage, the number of mine personnel capable of doing this is dwindling.”

At present, FLSmidth is carrying out several hoist relocations from mines that have reached the end of their life to new mines, and also with a view to introducing product improvements to older technologies. Between 2000 and 2010 the company undertook nearly 30 product improvement projects, from complete relocations to technology upgrades.

As a single-source company, with support and service extended to the complete lifecycle of a project, the lifecycle benefit FLSmidth offers is effectively extended into the mine shaft systems arena.

Norman says the business of mine shaft systems is not just about selling a piece of capital equipment, but instead encompasses selling a technology that will deliver in a shaft for the next 20 years, and be supported throughout its lifetime from a spares and site inspection point of view. Any subsequent advances in technology can be retrofitted to existing equipment, regardless of whether it was supplied by FLSmidth or by other suppliers.

The company’s global procurement strategy allows the mine shaft systems team to source its equipment from all over the world to secure the most competitive prices, while still delivering the quality products with which the company has come to be associated.

IN SID E M IN IN G 0 4 | 2014 25

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Safety, health, environment and quality (SHEQ) are strategic priorities. At Senmin, international standards are in place, namely ISO 9001, ISO 14001 and NOSA 5 Star. We’re also a signatory to the global chemical industry’s Responsible Care initiative and support AECI’s Green Gauge performance targets. In recognition of V\Y Ä YT JVTTP[TLU[ [V :/,8 ^L YLJLP]LK (,*0»Z (UU\HS /LHS[O HUK :HML[` (^HYK PU 2013.

Given the importance of research and KL]LSVWTLU[ ^L PU]LZ[ PU WYVQLJ[Z [OH[ optimise the current reagent suite and study UL^ [LJOUVSVNPLZ MVY M\[\YL HWWSPJH[PVUZ 0U HKKP[PVU ^L»YL ZWVUZVYZ VM THU` metallurgical programmes at AMIRA International, the South African Minerals to Metals Institute (SAMMI) and the University of *HWL ;V^U :LUTPU ^HZ LZ[HISPZOLK PU HUK ILJHTL WHY[ VM (,*0 PU ;VKH` ^L»YL PU [OL .YV\W»Z 4PUPUN :VS\[PVUZ *S\Z[LY ^OPJO VɈ LYZ [OL JVU]LUPLUJL VM L_WSVZP]LZ VYL ILULÄ JPH[PVU HUK ^H[LY [YLH[TLU[ [OYV\NO H single interface.

T. +27 (0) 11 246 6300 | www. senmin.co.za

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Raymond Daubermann Technical Manager, Senmin International

Developing, manufacturing, testing and improving our wide range of flocculants and surfactants optimises ore beneficiation processes.

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MINERALS PROCESSING

Transfer-point design The design of transfer points plays a major role in providing a clean, safe and productive environment in mineral processing plants.

T

RADITIONALLY, conveyor systems design focused more on the structural integrity of the system and the selection of the mechanical components. Unfortunately, the design of the transfer points was considered of secondary importance and was constrained by a lack of design analysis of the material flow characteristics and needs.

Poor design and implementation of transfer points can result in increased maintenance costs for minerals processing systems. “In essence, mineral processing plants need a system that is upgradeable and cost effective, that will improve accessibility and serviceability, decrease downtime and conveyor belt wear, and that conforms to SHEQ (safety, health,

28 INS I DE MI NI NG 0 4 | 2 0 1 4

environmental and quality) regulations,” argues Mark Baller, managing director of Weba Chute Systems.

Ballers points out that the issue at hand is the uncontrolled discharge of bulk materials through conventional chutes. Using information gathered from flow studies, on-site investigations and extensive operational experience, the Weba Chute Systems team tackled the problem and devised a solution that would optimise material flow in the direction of travel.

‘Supertube’ effect The main thrust of the research and subsequent design of the Weba Chute System ‘supertube’ effect with a cascade scenario is to minimise the impact on both the chute and the conveyor belt. “We investigated

the optimal way of ensuring that the material is evenly and centrally loaded onto the conveyor belt.

With the Weba Chute System, up to 95% of the material runs on material at all times. The bottom layer of particles in the product stream moves in a tumbling motion rather than sliding down the chute,” explains Baller. The design was achieved using a sophisticated 3D CAD program, resulting in significantly reduced wear, less spillage and enhanced SHEQ compliance.

Productivity is also influenced by two other salient factors: the ability to fit-topurpose and the after-sales service that a chute manufacturer provides. Weba Chute Systems approaches each project in an individualised manner. The process begins with a thorough site visit where the Weba

MINERALS PROCESSING

Realising possibilities...

ABOVE The design and efficiency of Weba Chute Systems have been refined through exposure to a large and varied customer footprint OPPOSITE Each Weba Chute System solution is a result of careful engineering to ensure it meets the application requirement

Chute Systems team ascertains the exact requirements of the customer through interviews with their operational and engineering teams. Thereafter the optimum design is created and tested using a combination of sound engineering tools, substantial practical knowledge and Discrete Element Method (DEM) simulation as a verification tool.

Holistic approach It is important to factor in the operation’s unique product specifications and data, belt width, belt speed, material sizes and shape, and throughput as well as the plant layout, including the position of belt scrapers and dust suppression/extraction systems. “We take a holistic approach towards chute design, which encapsulates both the entry and exit points, as well as the control of the flow, volume and velocity of the material being transferred at all times,” says Baller. The company is so confident of its design methodology that it offers the end user a performance warranty.

Weba Chute Systems believes in accommodating the customer’s project schedule and will pull out all stops to ensure that deadlines are met timeously, without compromising quality. “By working closely with the customer’s team, we are able to rapidly address and resolve any issues. Our support team is trained to instantly assess and alleviate unforeseen spillages, high wear and blockages through consultation with our chief designer and engineering department,” says Baller.

The interaction and involvement with the installation and customer does not end when the project is commissioned.

Weba Chute Systems remains involved with the customer and encourages ongoing proactive and planned maintenance checks. By identifying and resolving any possible issues in a pre-emptive manner, downtime is eliminated and productivity is increased.

In yet another instance of proactively searching for solutions that will add benefits for its customers, the company has also developed an innovative quick-release cast modular chute lip system. “This will result in a much faster change out period for mine personnel, resulting in higher productivity levels,” concludes Baller.

...from mine to market.

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Materials Handling

Environment & Approvals

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Non-Process Infrastructure

WorleyParsons adds value through our full scope of services from pit to port including studies, mine planning, impact assessments, permitting and approvals, project management, construction management and global procurement.

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Mining & Mine Development

offices

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people

MINERALS PROCESSING

Filter press for Russia SNC-Lavalin’s South African office is on track to complete a contract in Russia.

R

OGER ROUSSEAU, manager of the Modular Group at SNC-Lavalin’s Johannesburg office, says the contract was secured amid international competition to deliver the best combination of price, quality and schedule. The order was treated as a fasttrack project to ensure that the equipment

was shipped well before the Russian winter set in.

“Winter temperatures in the area of the mine can drop to -59°C, so it was not only imperative to ensure the equipment was shipped during a window of warmer weather, but also that this filtration equipment was capable of withstanding excessively low temperatures once operational,” Rousseau says.

“The plant must comply with stringent environmental legislation and we have to achieve less than 17% moisture in the discharged product, which will ABOVE A filtration plant for a gold tailings dewatering project

be used to build a dry stockpile. We’ve also incorporated a wash cycle into the filter press system to reduce the risk of cyanide contamination.

“The specifications for the equipment were so precise that we arranged with its supplier to send a dedicated test rig to the Russian site to ensure the technology would fulfil all the customer’s expectations. The test rig was sent overland from Italy to Russia, arrived on site within six weeks and supplier personnel conducted the tests. As soon as the test results received the all-clear, the equipment was containerised. SNC-Lavalin is currently supervising the installation and commissioning on-site.”

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MINERALS PROCESSING

Kathu service centre MBE Minerals SA has opened a dedicated service centre in the Northern Cape.

T

HE 600 M2 facility, located at 23 Ian Fleming Street in Kathu, incorporates offices, a warehouse and a workshop for assembly, repairs and inspection of certain components. “With such a large installed base of equipment at several mines in this area, it makes sense to support our customers from a local setting,” says Heinz Mittermaier, engineering manager at MBE Minerals SA. “A big advantage of having a local presence in this area is being able to develop first-hand knowledge of how our equipment is operating within the various plants, enabling application-specific design improvements to improve the operational life of the equipment.”

Design enhancement One such design enhancement recently introduced to MBE Minerals SA’s oscillating resonance type screens is now being made available throughout the world. Oscillating resonance type screens compare favourably with conventional screens, as they harness low power consumption to move large masses. Several of these units have been

operating at a major iron ore mine in the Kathu area since the 1970s and at other longstanding installations in the local and international mining industry.

“When we were approached by one of our international customers, an Australian iron ore mine, to supply them with a new oscillating resonance type screen based on the old design, we obtained the customer’s permission to develop an improved screen box,” says Mittermaier.

Optimised screen box

manufacturing process and reduces the wear surface.

Mittermaier comments that all these design improvements have resulted in a more efficient screen box that is able to achieve and maintain the required stroke for longer periods. Existing machines can be easily upgraded by simply replacing the old screen box with the new version.

RS screen assembled and ready for shipment

While the footprint, or static mass, of the machine stays the same, the screen box has been optimised using the latest design, fabrication and production technologies, coupled with operational data from customer plants. The new design improves the maintainability of the screen, eliminating the conventional complex screen deck arrangement and replacing it with a state-of-theart screen panel and polyurethane (PU) fastening system. The introduction of tubular cross members, also PU coated for increased wear life, simplifies and speeds up the IN SID E M IN IN G 0 4 | 2014 31

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MINERALS PROCESSING

Rubber screen panels Since the commissioning of its rubber injection moulding and compression moulding machines, Multotec has been able to offer a host of solutions relating to the production of heavy- and light-duty rubber screen panels in all shapes and forms.

S

UCH HAS been the local and international market demand for these products that over the past four years the company has quadrupled its production capability in this area. Underpinned by a heavy investment in moulds, Multotec has dramatically improved its speed to market and enabled highly competitive pricing.

“We continually improve the performance of our rubber panels by building BELOW On-going skills training forms a cornerstone in determining optimum quality of the final product RIGHT Multotec offers a broad range of rubber screening media

32 INS I DE MI NI NG 0 4 | 2 0 1 4

on our understanding of the compounds that work best in specific applications,” says Roy Roche, Multotec’s vice president: screening media.

“As the leading screening media solutions olutions provider in the African market, we have significantly improved our capability to producee rubber trommel panels.

“Through local and international collabollaboration, our experience ience in producing rubbber panels for diiverse applications ns

around the globe has grown in leaps and bounds and the world market has recognised this capability. Fifty per cent of our rubber panel production in 2013 went into Aust Australia’s iron ore industry, while our o overall turnover from rubber solutions has multiplied five times mu in the p past four years.”

Multotec supplies Multo these products on a made-to-order basis, made producing about 500 produ different items for er rubber screens alone, rubb with repeatable and consistent quality. The consi

MINERALS PROCESSING

RIGHT The new DESMA injection moulding machine at Multotec

company commissioned a second injection moulding machine in 2013, which is capable of producing rubber screen panels up to 10 kg. This machine features a twin cavity system that makes it possible to produce two products simultaneously and incorporates a cold runner system.

“Rubber is gradually coming into its own as a viable alternative to polyurethane screen panels in certain applications,” says Roche. “It offers a cost-effective solution in sticky dry applications that require relatively fine aperture sizes.”

Multotec’s injection moulded rubber screen panels were traditionally used in primary, dry screening applications; however, the commissioning of the second machine represented a significant investment by bringing the injection moulding process on-site to manufacture screening media for smaller aperture applications in a size range up to 50 mm.

This technology has broadened Multotec’s product range well beyond polyurethane panels, allowing the company to produce a range of modular injection moulded rubber screen panels that complement its compression moulded line-up — effectively presenting a full solution to the mining industry.

For each application, Multotec prepares custom-made moulds to suit both the rubber compound and the application and Roche says customers who are using these products are extremely satisfied with their overall performance. The company is now expanding progressively into rubber injection moulding as the market for these products opens up.

MINERALS PROCESSING

Cost-cutting excellence Managing director Nicholas Beukes and CEO Sharadh Padayachi of Logiman tell Gerhard Hope how the company’s team of expert engineers and designers halved the cost of Weatherly International’s Tschudi copper project in Namibia.

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HE TSCHUDI project was initially priced in the market at R1.2 billion. “By sitting down, thinking it through and applying ourselves, we were able to chop hundreds of millions of rands off this number,” says Beukes. He confirms that the project is within budget and on schedule. “It is really well lined up for success. We have a good team on-site and in our Johannesburg office, so we hope to be able to turn the fortunes of Weatherly International around and, at the same time, cement our place in the market as the company to come to for project solutions. They came to us to get a better number. We were able to give it to them and, in doing that, secure the work.”

Tschubi is a greenfield heap leach SX/EW copper project for Weatherly International Plc, whose two operating copper mines are Otjihase and Matchless. Its two other projects at the moment are Tsumeb West and BELOW The construction camp at Tschudi RIGHT An aerial view of the Tschudi copper mine in Namibia, being developed

by Weatherley International

Tsumeb Tailings. “The total capital value for our portion of the work is R640 million. The overall project, which includes opening up the mine, is about R800 million. First copper is expected to be produced by Q2 2015.”

Beukes says that Logiman is already well-established on-site. “All our sub-contracts have essentially been placed and the earthworks are well underway. The construction camp is up and running and most of the ordered goods and material will start arriving. We are on track, and we are very proud of that one.”

Year-on-year growth Padayachi says that the company was established in 2007 with five members, and has now grown to a staff complement of 52, with double-digit growth year-on-year. Its core business is project development within the mining and mineral space.

“I use the term ‘project development’ because it is a little bit more than

“We were able to chop hundreds of millions of rands off the number.”

Nicholas Beukes, managing director, Logiman

34 INS I DE MI NI NG 0 4 | 2 0 1 4

the traditional EPCM (engineering procurement and construction management) model. A lot of our work is fixed-price LSTK (lump sum turnkey) risk-type projects,” notes Beukes.

The company’s in-house skill set runs the gamut of engineering disciplines, from mechanical to civil, process, electrical and instrumentation. It also has a fully-fledged design office producing drawings and coordinating project and construction management services. It focuses on the gold, platinum, chrome, coal, copper and uranium sectors, and has worked for many of the mining majors, from Gold Fields to Amplats, Lonmin, Paladin Energy and Sasol Mining.

In terms of its involvement in Africa, Beukes comments: “We have taken a very

MINERALS PROCESSING

and all the support staff, are all highly talented and com“If you build less, you mitted to doing a good job, build faster. You are and that makes a huge differspending less time, which ence in terms of our success in delivering for our clients,” means the probability of says Beukes. injury decreases.”

Logiman is still a young comSharadh Padayachi, CEO, Logiman pany, and is competing against some of the larger and more established consulting firms.

“Th ere are a lot of smaller-type players as flexible approach in that we go where the well,” says Padayachi, adding: “Competiwork is. We have done work in Malawi and, tion is there to be beaten.” Beukes concurs: of course, are busy in Namibia. We have “There is no doubt that there is significant done some design for the Congo and Tancompetition. We are fortunate in that the zania, and have looked at opportunities in projects we have done have all been sucother parts of Southern Africa. cessful. The projects we are currently busy with also seem to be successful. We attribOver the border ute this to the talented individuals here “We have not done any work in West Afriin the company and their commitment to ca, as that is something that has not come getting the job done.” across our doorstep just yet. But we cerBesides its expertise in process plant tainly take a broad view on it. We feel very design and construction, Padayachi says comfortable in the southern African rethat the company is able to offer highly gion, and that includes South Africa. Probspecialised skills on the civil engineerably on average about 50% of our work is ing side as well. An example of this is its over the border, but it varies from year to current work for Sasol Mining, which is year and project to project.” establishing new coal mines to supply the The company’s competitive edge in the Sasol Secunda petchem plant. The inframarket is due to “a very good understandstructure associated with the coal washing ing of the construction side, and because plants in particular includes long overland of that we are able to reduce the costs conveyors and massive coal storage bunquite significantly.” The dramatic reduckers, of which four are under construction tion in the Tschudi price tag was “based at present. purely on our knowledge of construction.

We have taken full responsibility for certain aspects of the construction,” says PaInnovation driver dayachi, explaining that the project has a “These precast bunkers are utilising a spededicated construction team in place. cialised construction technique that alBeukes acknowledges that “mining is in lows for a much reduced capital cost and a difficult place right now. We have been far quicker construction that has effectiveable to secure work in the field by being ly halved the timeframe, as well as being able to offer really competitive prices, asmuch safer. From a civil engineering point suming the risk ourselves, and obviously by understanding that risk and being able to give pretty deep discounts on the overall construction of the project by being able to optimise what we are doing and getting it right the first time.

of view, these are two fantastic projects that deploy cutting-edge concrete technology. The main driver for this innovation has been time, cost and safety considerations,” says Beukes.

“In order to save our clients costs on their projects, we need to be able to design something that is cheaper to build, because that is where the money is. If you are spending money on more tons of steel and cubes of concrete, it takes longer and costs more.” Padayachi agrees: “If you build less, you build faster. It is safer as well. You are spending less time, which means the probability of injury decreases.”

He notes that all five of the fixed-price projects that the company has undertaken to date have been completed on schedule and within budget. The popularity of this contract model is due to the element of risk transference, says Beukes. “Our clients are asking if we are willing to assume the risk and build it for us. The upside for us is obviously the difference between this number and what you can do it for. What we are saying to our clients is, yes, we have the skill set and certainly we have the risk appetite and the capability to carry it over the line.”

Padayachi says it all boils down to a combination of “confidence, competence and experience. Our track record to date has shown that we can do it. It is certainly a trend in the overall industry, but for us in particular it is the way we do business.” He confirms: “The key to our successful projects, both in the past and in the future, is dependent on the team we have here. It is the engineers, designers, support staff that really do make the success. We work together as a team.” Beukes concludes: “We are hoping that our reputation carries us through for the next 30 to 40 years.”

Deep understanding “That boils down to a deep understanding of what is actually required to build whatever plant it is, coupled with the trust and skill we have in our team here in this office.

One of the key success factors for us is that the team here, the designers, engineers and construction personnel, the planners RIGHT Dignitaries at the groundbreaking ceremony at Tschudi in November 2013

IN SID E M IN IN G 0 4 | 2014 35

PROJECT MANAGEMENT

Servicing Africa Stefanutti Stocks provides clients across Africa with professional mining, construction and engineering services, new business development manager Eugene Nortjé tells Inside Mining.

T

HESE SERVICES range from opencast contract mining to bulk materials handling, waste residue disposal and recovery facilities. This encompasses the provision of professional staff, plant and equipment, as well as a range of associated design capabilities.

Known previously as Environmental, Civil and Mining Projects (ECMP), the company was established in 1991 and acquired by multidisciplinary construction Stefanutti Stocks in 2007. The company’s head office is in Johannesburg, from where it services mining operations throughout the country. It comprises four divisions, namely Contract Mining, Materials Handling, Tailings Operations and Technical Services.

The Contract Mining division undertakes opencast mine design, planning and optimisation, fleet simulation and selection, contract mining, drilling and blasting, crushing and screening and rehabilitation and closure. Its services run the gamut of managing existing surface mining operations through to establishing greenfield projects, for both hardand soft-rock applications.

mining operations, including the provision of all necessary mine infrastructure, pollution control features and beneficiation plants,” says Eugene Nortjé.

An example of this successful approach has been its long-term involvement with Universal Coal to determine the feasibility of exploiting the coal reserve at Kangala near Delmas in Mpumalanga.

This forms part of the Witbank coalfield, which supplies over 50% of South Africa’s saleable export and domestic coal.

The Mining Division’s initial engagement in mid-2011 saw a proposal for a full fit-for-purpose model to suit the client’s requirements, with Universal Coal aiming to supply coal to market by February this year.

Two contracts

Following Universal Coal securing all the necessary approvals and permits, in conjunction with a sales agreement with Eskom, Stefanutti Stocks clinched two contracts: the first covered the design and construction of the mine infrastructure and discard facility, while the second covered contract mining and materials handling.

Work commenced in May 2013, and saw Stefanutti Stocks Roads, Pipelines Full turnkey service and Mining Services provide a one“We offer a full turnkey service to clients stop shop solution for Kangala’s project for the establishment of opencast coal management. Universal Coal needed to optimise the infrastructural “Our diverse skills base and scope of work in order experience mean we can to minimise the capital requirement. This offer mining clients a fullsaw the proposed soluservice package to establish tion take the form of this infrastructure.” a turnkey contract for the detailed design, fabEugene Nortjé, business development rication, construction manager, Stefanutti Stocks Mining Services and commissioning.

IN SID E M IN IN G 0 4 | 2014 37

PROJECT MANAGEMENT

By June 2012, Technical Services’ inhouse design team, together with specialist consultants and Contract Mining, completed the optimisation of the mine design and financial model. “We provided Universal Coal with the necessary details to start raising capital for the project,” confirms contracts director Lourens de Koning.

Project management In November 2012, Technical Services entered into turnkey-contract negotiations with Universal Coal for the project management, detailed design and construction, which were concluded in April 2013. “A big advantage of the turnkey solution is that site establishment could commence right away, with detailed design, fabrication and on-site construction being carried out simultaneously,” says De Koning. In terms of implementation, a high-quality management system, on-site safety procedures and various codes of practice were developed in conjunction with the client.

Stefanutti Stocks Roads & Earthworks division was the on-site contractor for the infrastructure required for the mine development. The 200 000 ℓ pollution control dam was completed, followed by installation of the HDPE liner. This was followed by the haulage roads and the foundations for the plant, whereupon the box cut and embankments began to advance.

Contract Mining was awarded the mining component. “We assisted Universal Coal with mine planning and design services, which resulted in construction of the infrastructure on-site, as well as management of the discard handling facility,” says contracts director Freddie Strydom. From here on out, it is the division’s task to move 450 000 m3 of overburden a month for the next eight years.

CONTRACT MINING Stefanutti Stocks caters for the full mining spectrum, including: • civil construction • geotechnical and piling • infrastructure earthworks • water-treatment plants • road rehabilitation and surfacing • housing and mass housing • structural steelwork, plate work, mechanical and piping, electrical and instrumentation supply, installation and commissioning • structural rehabilitation, concrete repairs and waterproofing • mining services (design and construction of mine infrastructure, open-pit mine planning, fleet selection, contract mining, bulk materials handling and waste residue disposal and recovery facilities.

Total management The Materials Handling division commenced with the total management of the co-disposal site early this year. “We are excited to be part of this turnkey project, and intend to uphold the group name by upholding the highest level of quality at all times,” says contracts director Marco Pasquali. The division’s scope includes hauling and processing of about 3.8 million tonnes of coarse discard to the facility, and managing about 270 000 tonnes of fines on the co-disposal dump.

“The extraction of Africa’s vast mineral wealth and natural resources has resulted in increased demand for associated infrastructure,” notes Nortjé.

This places Stefanutti Stocks in a prime position to cater for this trend on the continent. “Our diverse skills base and experience mean we can offer mining clients a full service package to establish this infrastructure.”

KUMBA IRON ORE Stefanutti Stocks was contracted by Kumba Iron Ore for the construction of its new haul truck and tyre workshop, together with associated supported facilities. The work was carried out on a multi-disciplinary basis at Sishen, Kathu in the Northern Cape. The work fell under the umbrella of the Sishen Iron ore Company’s portfolio of stay-in-business projects.

The project encompassed the construction ofgiant workshops, in addition to infrastructure upgrades necessary to maintain and service the mine’s newlyacquired fleet of Komatsu mega haul trucks.

The project team comprised Kumba Iron Ore, WorleyParsons and Stefanutti Stocks as the multi-disciplinary contractor. The latter undertook the work as a joint venture between its various divisions. These were Civils (which lead the joint venture), Roads and Earthworks, Housing, Mechanical and Electrical & Instrumentation.

38 INS I DE MI NI NG 0 4 | 2 0 1 4

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PROJECT MANAGEMENT

Constant evolution Companies need to remain agile and responsive in a constantly evolving market, Garth Higgo and Mark Berger of Aurecon tell Gerhard Hope.

W

HEN THE geologists have locked in a resource and the decision is ultimately taken to open a new mine – this is when a consultancy should ideally become involved in a project in order to add maximum value throughout the entire project life cycle.

“Our preferred model is to become involved at the concept stage, just beyond exploration. We do not carry out mine planning as such, but can add value a step just beyond that point,” explains Higgo, who is industry director: mining. Higgo spoke to Inside Mining exclusively visiting Aurecon’s Tshwane offices from his Australian home base.

“If you look at a new mine, 75% to 80% of the cost is in infrastructure. The process plant and opening the pit is normally a lesser cost. It is how you get your product to the market that is the big cost, which is why we need to be involved as early as possible, able to add value throughout the study phases from concept right through

40 INS I DE MI NI NG 0 4 | 2 0 1 4

to a bankable project, and of course delivery as well.”

Aurecon was created from the merger of Ninham Shand and Africon from South Africa and Connell Wagner of Australia. The latter did a fair amount of mining work, including process engineering and bulk materials handling. “Following the merger, there was a growing movement within the organisation to have a greater service offering around mining,” explains Higgo.

This is very much predicated on mining infrastructure, with bulk materials handling as a key focus. “We can provide all the engineering once the ore comes up out of the ground, right up to where it is loaded onto a train and offloaded at the port.”

Simple business model This sounds like a simple business model, but it is an aspect of the mining industry that is becoming more and more complex, especially as the ‘easier’ projects on the continent have already been comissioned.

“It is now the enabling infrastructure that

really determines if a project gets the green light or not,” adds Higgo.

“It is no longer electricity from the nearest pylon and water from the nearest pipe.

All these things have to be brought in and, all of a sudden, those become your limiting factors in terms of a project’s viability.

The three heritage companies that formed Aurecon came from a typically infrastructure-based background, which makes us well-positioned to answer to project needs across the continent. “We can take on a wide variety of work and have staff who speak the main languages on our teams.

We also have project teams who are used to diverse cultures.”

Also critical to successful operation oin Africa is keeping up to date with the latest trends in terms of project delivery. Higgo says that while a lot of projects were delivered traditionally using the EPCM (engineering, procurement and construction management) model, this has now largely fallen out of favour. “There is a view now that EPCM is too expensive and that you

PROJECT MANAGEMENT

If you look at a new mine, 75% to 80% of the cost is in infrastructure should rather go the full EPC (engineering, procurement and construction) route, which is a lump-sum contract. That is getting a lot of traction at the moment.”

One of the outcomes of this paradigm shift is the need for consultants to be supremely adaptable.

“Aurecon is very flexible. We can easily second people to owners’ engineer teams.

We are happy to do a hybrid of guaranteed-maximum type projects. We can also adapt to any model. While Aurecon has its own procedures, it is quite comfortable to work within a client’s own parameters or to adapt the client’s systems to its own.

“When you want to do something in Africa, you have to take into account the fact that the local community wants to get involved and have a sense of ownership.

For example, you cannot have a dedicated-use railway line that cannot be used by the local community. You have to take into account the different dynamics in Africa.

That is one of the things Aurecon does in the mining space: we give international clients advice on how to operate in Africa,” says Higgo.

Sustainability a buzzword Berger, Aurecon’s industry leader: mining, whose responsibility covers Africa as well as the Middle East, says that ‘sustainability’ continues to be a buzzword that reverberates in the mining industry, especially on the African continent. “We are hearing more and more about sustainability, and the need for mining houses and other industries as well to demonstrate their sustainability. In other words, you cannot just go in and put up a mine, leave a big hole and tailings dam and disappear. There are all the aspects associated with sustainability, including social issues. We have packaged our service offering around that.”

ABOVE Rossing uranium mine in Namibia ABOVE LEFT (From left) Garth Higgo and Mark Berger OPPOSITE Khumani iron ore mine

In addition to traditional hard engineering services, Aurecon also focuses on ‘softer’ services and how these can assist a mining house in achieving its sustainability aims. “It is an area where a lot of our competitors fear to tread. That is really what we are trying to achieve. By having an input into this, or by controlling it, one can derive a sustainable business value out of a potential project,” comments Berger.

The current state of business in the mining industry, which is beset by falling commodity prices and labour unrest in South Africa, is a focus on bread-and-butter or ‘stay-in-business’ type capital projects.

“Aurecon’s value has been recognised by a lot of mining companies because that is a specialist field for us,” notes Higgo. He says that major landmark projects are waiting in the wings in Africa. “There are some big projects coming up in Africa in the near future which we intend to participate in.”

Aurecon has an overlapping service offering. “What is fortunate for us in the mining sector is that we can draw on services globally across Aurecon and that can be from energy or water provision, environmental and construction, because a lot of mines require specially designed buildings.”

It is the overarching task of Higgo and Berger to represent the full scope of Aurecon’s competencies to the mining industry. “I like to use the example of an airport: if one of our mining clients wants to build an airport in a remote part of Africa, we have got the competency in the group” notes Higgo.

Berger adds that another main focus for mining houses is regulatory compliance.

Aurecon services the major mining houses, which have a global footprint. “We get

to know their systems, and these systems are universal across these companies. That is why when we carry out a job in Rio de Janeiro or in Perth, for instance, we can draw on skills from around the world as they use the same systems.”

Related synergies This also allows for related synergies on a global scale. “What we have found is that with the Australian mining industry experiencing a severe slowdown at the moment, we have brought skills over from Australia on a semi-permanent basis,” says Berger. For example, a number of Australian ports specialists have been brought to South Africa to boost the local capability in this sector and to assist clients with African projects requiring port development.

Higgo says that while the East Coast of Australia has a coal focus and the West Coast is more predominantly iron ore, Africa“is a microcosm of all those different commodities. We are able to source specialists very quickly and virtually bring in skills overnight to get the ball rolling.”

Berger adds that a new wave of management at some of the major mining houses has resulted in a review and re-evaluation of significant capex, with a renewed focus on creating value as opposed to just pushing tonnes through their existing operations.

“There is definitely a renewed focus in Africa of late. This is because countries perceived as very low sovereign risk, including Australia, are now being seen as a bit more risky due to new taxes, royalty rates and laws being introduced,” says Higgo.

Aurecon’s global presence also means it has access to the latest innovation. He adds: “This impacts on mining and capital efficiency and spend per tonne, which translates into more effective management of assets and the need for realtime information.

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PROJECT MANAGEMENT

Front-end loading Industry in general does not understand the value of project management.

“If that goes wrong, everything goes wrong,” says Afrilek sales director Pregs Naidoo. Inside Mining attended a special workshop hosted by the company.

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ROJECT MANAGEMENT is so essential to the critical path of a project that “we have had small jobs that ended up costing us more money than big jobs, because we thought we could just do the basics and it would be okay,” says Naidoo. Afrilek has learnt the hard way that the devil is indeed in the detail, and is working with consultancy Ai2SA to run a series of project management workshops for its staff and clients.

“After realising our flaws and mistakes, our inabilities and inadequacies, we have employed our own project manager, because it is the most important part of a project. You cannot have enough project management, based on the size and type of jobs,” comments Naidoo.

Petrus Klopper, a consultant and senior industrial architect at Ai2SA, explains that the consultancy carries out design-related work for the control and

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instrumentation industry. “That obviously entails project management. What we do basically, is optimally scope and manage industrial-system projects.”

A particular trend in project management being promoted by Ai2SA is socalled front-end loading (FEL). “We felt there was quite a need to create a maturity in the market with regard to FEL. It is not that it is not prevalent, but rather that the terminology is not that developed or wellknown,” argues Klopper.

means you conduct your engineering a lot more accurately at the outset. You really think about the job, where you will be in six months and what each phase comprises,” says Klopper. Essential questions covered by FEL are “the why, what, when, how and who” associated with any project. “All those elements are often neglected in a project: what are we doing? What is the scope? What timeline do we have?

When do we get site access? Is it the right time in our capital cycle to invest in such a project? How are we going to go about it?

Getting equipment specified Project management itself covers about ten functions that any company needs to manage, but this can be whittled down to five essential ones. “From a product point of view, you need to know how to get your products scoped in. How can I get my equipment specified? If you understand FEL, you will know the correct timing when to do this.” What is FEL exactly? “It

AFRILEK SOLUTIONS Afrilek provides superior automation and electrical solutions, in conjunction with service and support for production facilities. Its goal is to optimise system functionality and improve operational efficiency. Its engineers have extensive functional and technical expertise, combined with hands-on experience. As a solutions provider, Afrilek is involved in ever ystage of the project lifecycle, from implementation to completion.

PROJECT MANAGEMENT

Following the initiation of the project, what is our next step?”

FEL is also known as These questions form the crux of front-end planning, FEL, together with providing all the necessary answers, prior to the comengineering or design mencement of a project. Klopper says it is important to bear in mind what management approach. With FEL, you initiates this process. “There are external add a bit more front-end work. In both changes that initiate FEL. A project, by cases you still commence with your needs definition, is something that begins and analysis. FEL is also broken down into ends. The sequence of the questions is undifferent gates, whereas there are specific important. If you are a year into a project start and end points to the methodology and still unsure of what you are doing and of project management. FEL, on the othwhy you are doing it, it is a problem. At er hand, progresses through various steps the end of the day you are only as good as or gates, such as prefeasibility, feasibility your last project.” and design. Your implementation should FEL is also known as front-end plantherefore, in theory, be shorter and more ning, front-end engineering, front-end optimised, which is one of the major bendesign or the stage-gate process. “While efits,” says Klopper. not an entirely new concept in South AfFEL starts with an order of magnitude rica, it is relatively unstructured and not or a rough estimate as to the overall scope as well governed as project management, or extent of a project. “Then you break it which is very well defined. FEL terminoldown in order to determine the feasibilogy is still evolving, and will hopefully ity, as well as deriving at a plus/minus mature over the next five years.” Klopper estimate of the value. This is where you says that FEL started to gain prominence need to start obtaining consensus from around 2008 to 2009, especially in big your client. How much time do I have to companies looking to launch capital-inprovide the information that is required? tensive projects.

This is the evaluation stage, followed by a more detailed costing exercise. That is the Devil is in the detail whole idea behind FEL.” The problem with FEL is that ‘basic engineering’ and ‘concept design’ mean different things to different people. Klopper Viability checklist says “that is normally the problem. ProdIf a project is still considered to be viable uct vendors come to site, and the client after all the necessary checkdoes not always give you sufficient inforlist questions have been anmation in order to be able to provide a swered, then detailed design quotation. That is when assumptions are can commence. “What we made and risks begin to accumulate.” are trying to promote is this “Invariably you receive an order fairconcept of doing more work ly quickly, but then the actual impleupfront. This means that you mentation takes so much longer. That is are required to identify your needs the idea behind the traditional project much earlier. Unfortunately that is not

always possible. With most five- or ten-year projects, the technology deployed initially quickly becomes outdated. Technology does not mature from one day to the next, but over time. Clients, for whatever reasons, still use older technologies, whether for cost or process reasons. Then if something breaks suddenly, you have to come up with a quick plan to sort out the problem,” says Klopper.

“The reality is that people do not want to pay for design work. Seeing that you have done similar work before, they expect to be just given the quote. However, a project is never just a copy-and-paste exercise. In addition to dwindling skills, there are going to be unforeseen losses and costs. That is why we motivate for projects to be broken up into smaller steps.”

Clients still balk at the overall costs implications, notes Klopper. This often means that projects are delayed unnecessarily.

“If you want to build something and do not have a comprehensive plan, you cannot complain if it turns out unlike what you had in mind.

“That is what I like about FEL: you can deploy lesser skilled people in order to get more things done, because you are breaking it into sections. If you do not embrace the FEL philosophy from the outset, it will quickly become problematic.”

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PROJECT MANAGEMENT

World-class factors Sound safety performance, the safeguarding of critical skills and the upskilling of local communities are critical in world-class opencast mining operations, argues Concor Opencast Mining GM Anton Cilliers.

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ONCOR OPENCAST Mining has been involved in several major contracts in recent months, which have consistently demonstrated to the market that it has the necessary experience, capacity and resources to implement world-class opencast mining operations.

The company is a leading local specialist in the opencast mining of steeply dipping, narrow hard rock orebodies. However, Cilliers emphasises that its expertise covers the entire spectrum of opencast mining commodities, including the removal

There is never a dull moment on opencast mining sites

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of overburden, surface blasting design and execution, and crushing and screening, as well as tailings dam construction and rehabilitation.

The company has a reputation for providing innovative solutions and for delivering projects safely, on-time and within budget, with an ability to minimise the impact of working close to existing mine infrastructure. At the same time, it is committed to uplifting local communities, recruiting members of the workforce from these areas and facilitating ongoing skills development among these personnel.

Need to change “Our team is passionate about the work we do, and that smell of diesel fumes mixed with dust is what gets our blood pumping in the morning. Watching big mining machines in action exhilarates us,” says Cilliers. “There is never a dull moment on opencast mining sites because they change constantly as the pit BELOW Work on Concor Opencast Mining’s contract at Blinkwater is taking place within confined spaces, particularly the interface section

PROJECT MANAGEMENT

develops. I believe that right now the mining industry as a whole is probably facing the biggest challenges of its existence, and this makes the game we are in even more interesting because we need to change with the industry or be left behind.”

The company’s recent contracts include a 36-month Anglo American Platinum project, awarded in August 2013, to construct a tailings storage facility (TSF) and undertake related interface construction at the Blinkwater tailings dam on the Mogalakwena mine near Mokopane, Limpopo.

Some 7.2 Mt of waste rock will be needed for the construction of the dam over the contract period, hauled over a 5 km distance to the construction site.

Interface work comprises layer sealing the dam on the inner face of the TSF impoundment wall, compacted to 95% Proctor density.

Auxiliary works Auxiliary works have also been awarded as a separate contract, including topsoil removal. A notable challenge on this project is the need to work in confined spaces, particularly on the interface section, where road width is confined to 6 m.

At African Exploration Mining & Finance Corporation’s Vlakfontein coal mine near Ogies, Mpumalanga, Concor Opencast Mining has received a 24-month extension to its original 36-month contract awarded in November 2011. The pit was designed for six years and, based on

Minimised impact The two Merensky faces were relatively small scale, while the UG2 was on a much larger scale, with seven faces mined until all opencast resources were depleted.

These reefs ranged over a 9 km area to a depth of 35 m. Although the project took place in close proximity to mine infrastructure and to houses occupied by members of the local community, the impact of mining operations was successfully kept to a minimum.

At the end of the project, the mining team had recorded more than five million fatality-free hours, or 1 196 LTI-free days, and earned several Impala Platinum and Concor Opencast Mining safety awards for safety milestones attained along the way.

At Lonmin’s Marikana mine in the North West, Concor Opencast Mining is nearing the end of a mine-deepening contract that began in October 2009. The project has about 10 months of ore extraction, after which rehabilitation will be implemented for a further 18 months.

Mining outcropping

ABOVE Concor Opencast Mining has a solid reputation for undertaking mining activities close to existing infrastructure and communities

the team’s good performance and safety record, the contract has been extended to cater for this. The project involves opencast coal mining to a depth of approximately 39 m and extracting 130 000 tpm of coal. It includes transporting coal to a coal crusher on the mine property.

Concor Opencast Mining has successfully completed a mining contract for Impala Platinum that spanned 13 years. Work began on this opencast mining project in 2002 in the vicinity of Impala #6 Shaft with mining of the Merenksy orebody.

The company began mining the UG2 ore body in 2005.

In January 2014, Concor Opencast Mining handed over another successfully completed contract to Amplats, namely the 21-month Khuseleka project near Rustenburg, which involved mining outcropping Merensky reef to a depth of 20 m.

Total mining volumes include 280 000 m3 of topsoil, 295 000 bm3 of box cut overburden, 830 000 m3 of strip mining overburden and 820 000 t of Merensky reef. Conditions on the project were challenging, owing not only to an orebody that dipped steeply and which was relatively fractured, but also because mining took place close to mine infrastructure.

Electronic blasting was implemented to mitigate the impact of mining operations, enabling a marked reduction in noise and vibration. On this project the team recorded 627 LTI-free days.

In joint venture with Basil Read, Concor Opencast Mining has been contract mining iron ore at Assmang’s Beeshoek mine at Postmasburg in the Northern Cape since November 2011. The contract called for extensions to the perimeter of an existing pit and mining it to a depth of about 190 m.

Volumes moved during the 32-month mining period are estimated to be about 48 Mt of waste, comprising overburden shale, ferruginous waste and chert, together with about 5.5 Mt of iron ore. The contract was recently converted to a plant-hire agreement, said to be beneficial for all parties.

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PROJECT MANAGEMENT

Vital link Cost managers form a vital link between engineering and finance. Gerhard Hope talks to Mandla Mlangeni, CEO of MMQS.

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HE COST manager plays a critical role in understanding a client’s business. This means that the cost manager not only needs to be flexible and adaptable, but also comprehend the processes and procedures of a client’s business, and what the objectives really are. “It makes it easier for you to manage the capex, because you know the end goal,” affirms Mlangeni. “If you do not understand the business, it becomes a real challenge.”

Mlangeni has been involved in the mining industry since 2000, doing consulting work in the thermal-coal market for Anglo American in particular. “I was involved in cost management and quantity surveying, and from there I started my own business in 2002, branching out to the iron ore and diamond sectors. That is really how we got involved in mining.”

MMQS is 100% black-owned, with over 50 staff in total. Its head office is in Rosebank, Johannesburg, while it has an office in Nelspruit in Mpumalanga and in Centurion in Gauteng, and then a satellite office at Kathu in the Northern Cape to service the iron ore sector in particular. The company has evolved from a quantity surveying company into an infrastructure cost management company. Its services include cost engineering, procurement planning, scheduling and contract administration.

“We offer solutions in terms of infrastructure cost management, which means we get involved in the expansion of new mines. With the downturn in the mining industry, however, we are involved 1 Tyre workshop 2 Pollution control dam 3 Manual wash bay silt trap 4 Manual wash bay

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with quite a few ‘stay-in-business’ projects. Even though the mining companies have cut projects, there are certain projects they have to do in order to survive,” says Mlangeni.

Cost management MMQS becomes involved in the mining space after an exploration company has determined a reserve and embarks upon a feasibility study. “We will look at the broader cost management, budget control and estimating, and become involved as part of the overall team. However, our core business remains cost management,” explains Mlangeni.

“We protect the rate of return and ensure that the investment is protected. We get information from engineers, designers and mine planners, put it together and come up with a budget estimate.” This initial estimate is assessed rigorously in terms of its viability. “It is very exciting.

I always say that we make or kill dreams.”

Mlangeni says that MMQS is often approached by people with fantastic ideas, with designers who come up with all sorts of schemes, and then these have to be analysed in terms of affordability. “Even though we do not design per se, somehow we get involved in design considerations, because we manage the return.

Protecting the assets “Remember that be it a construction, infrastructure or mining project, it is an asset being built, and someone must protect the assets at the end of the day.

You cannot overspend or underspend; you spend what is due, and that is where we see ourselves. We spend a lot of time and effort on ensuring our clients’ investments are protected.”

Mlangeni says that mining companies “are becoming more stringent on time and cost. They want cheaper project solutions, and in the quickest time possible.

The main challenge there is you have to balance the risk versus the available information. The more information you have, the more accurate you are in terms of your estimates and budget. Then if the project goes ahead, I know that this is accurate to a reasonable degree.”

In most projects, the cost pressures arise from timeframe and scope definition, which are key to project management. “If you do not know what you are doing, it is very difficult to avoid cost. We decided we are not going to speak to the engineering managers, because we know

PROJECT MANAGEMENT

what they want. We decided instead to speak to the financial directors of the mining houses to find out exactly why certain projects have gone over budget and so forth. The response we have got is that their interests are aligned with ours, that is: transparency and predictability.

Predictability and transparency “If I approve a project, and you know there is going to be a problem, let me know and tell where it emanates from, so I can predict and plan accordingly. Most of the time, mining companies feel they have been hit by cost overruns at the late stage of a project. At this stage it is very difficult to approach a board for additional funding. However, if they are provided with transparency and predictability, the cost manager ends up becoming a link between the engineering and the financial function.”

It is essential to communicate effectively between these two. “You might find that a misunderstanding is based on not knowing what the other side is doing, because financial directors are more interested in returns, while engineers focus on the function and how it works.” Mlangeni says that his company effectively functions as an interface between the two.

“We have found that the more active we are in such a role, the more successful the project is.”

Looking at Africa, Mlangeni says: “Strategically we would like to be very involved in the rest of the continent. What we have done is piggyback on our clients in South Africa, based on how our clients are performing. For example, we became involved in a gold project in Saudi Arabia on the back of a Canadian company based in South Africa. We got involved in Namibia on the same basis, and are currently working in Mozambique and carrying out some early feasibility studies in Liberia.”

Challenging business environment Mlangeni says that Africa remains a challenging business environment. “It is challenging in the way of understanding the historical background of Africa. If we are working in Liberia, for example, you have got to understand that it is a former American colony, and that how they operate and respond is similar to how the Americans operate.

“We find it challenging to come in on our own in the Francophone countries, because historically they are not used to an independent cost manager or quantity surveyor. They are used to a turnkey solution such as a direct EPCM (engineering, procurement and construction management) contract.”

This means that MMQS has to look increasingly at joining consortia. Mlangeni says that the former British colonies are more amenable to cost management as an independent discipline. “So it depends on the historical background of the country and how it was colonised.” What this means is that Africa is also a very dynamic market.

Evolving sector “It is an evolving sector. The trend is always cyclical. It is based on risk management. What I would say is that the one who manages the risk better, must take that particular risk upon them. Thus companies with strong internal support systems and teams would slowly move away from EPCM contracts.” Junior miners, on the other hand, might hold the mineral rights but lack the necessary technical background, which makes them more amenable to EPCM-type contracts, “because the idea is you then have one entity doing everything, and the risk is shifted to them. Thus it depends on who manages the risk better, and that is how it evolves.”

Mlangeni comments that while EPCM has become popular over the last few years, “what we are trying to do is promote the issue of independent cost management.” It is essential that, while the cost manager is independent, it still has the necessary leeway “to manage the budget and scope in a more transparent manner.”

We still believe the opportunities are there in the mining space

The main challenge facing a company like MMQS “is obviously that we compete with multinationals, and have to make sure we up our game and are at the same level, and in mining you have got to be very capable and experienced.” Mlangeni is therefore confident about opportunities going forward, especially in South Africa. “We have seen a lot of opportunities in South Africa where companies have embarked on forays into the continent and left a vacuum at home.”

BEE status Mlangeni adds that the company’s experience and capabilities, together with its BEE status, has also helped generate local opportunities in terms of joint ventures and collaborations. “Obviously the benefit for them lies in terms of our BEE, and it does work in terms of skills transfer.

There are many opportunities. There are very good prospects in the coal sector.

Currently we have a few projects we are targeting. There is quite a big drive into coal, especially in the Waterberg.”

Mlangeni reveals that the company has engaged with Transnet on the planning requirements for the rail infrastructure from the Waterberg to Richards Bay. This is a critical infrastructure project that is expected to get off the ground soon, and MMQS is positioning itself as a key player in this space. “Infrastructure is a huge market in Africa,” he argues.

The company is particularly proud of its involvement with the Kholomela Sishen Iron Ore Mine. “We have been involved in that project for the last four years, with a contract for the entire mine in terms of quantity surveying and cost management. It is a very exciting, successful project, and we are proud to be part of such a benchmark mine. Our contract has been extended for another three years, so we feel we have done good work there and will be there for a while yet.”

“We find that the more assistance we provide project managers in the contractual space at an early stage, the easier it becomes to carry out our cost-management role. Therefore project administration and construction contract advice becomes a valuable add-on.

“Having said that, in the mining space, we still believe the opportunities are there,” comments Mlangeni. “Yes, it is tight, and we have tightened our belts.

We think it is going to turn this year, which might be a tough one. However, it will turn,” he concludes.

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PROJECT MANAGEMENT

Aligned for

success

SNC-Lavalin project manager John Dixon talks exclusively to Inside Mining about the company’s corporate interactive and integrated project management control system, PM+.

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HE AFRICAN project environment is unique and presents specific project management challenges that require deliberate strategies to align international codes and standards with particular local constraints and commercial drivers.

So says Dixon, adding that the project management success the company has enjoyed can largely be attributed to an ability to grasp specific client priorities on any given project and present the client with models that predict the opportunities and risks associated with that particular priority set.

“As part of the greater SNC-Lavalin organisation, one of the world’s leading engineering and construction groups, we have access to an array of powerful, practical tools to create these models,” he adds.

A key factor in SNC-Lavalin’s success in this field is its corporate interactive and integrated project management control system, PM+. When combined with a range of project execution procedures, PM+ provides the tools to achieve control of project quality, cost and time objectives.

Manage information The PM+ system has been developed and used successfully on projects of varying size and complexity to control cost, time deliverables, materials, human resources, manage risk and control project documentation. It provides a highly effective means to manage information and data related to all aspects of the project. PM+ can be accessed by authorised

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“We have the ability to apply First World project management codes and standards to African project environments.”

John Dixon, project manager, SNC-Lavalin

parties from multiple locations worldwide, providing the advantage of project-wide information and data which is always consistent, accurate and up to date.

“PM+ has been used successfully on our projects for more than two decades.

Our proven track record, along with our extensive on-the-ground experience in Africa and willingness to listen to and embrace client expectations, provides us with a significant edge in supporting our client’s success,” adds Dixon.

“We are familiar not only with the general African context in terms of logistics and skills levels, but also with country-specific demographics, risks and opportunities, giving us the ability to apply First World project management codes and standards to African project environments.”

SNC-Lavalin also supports the successful implementation of projects in Africa by maximising local benefit to communities and strengthening

Locals trained by SNC-Lavalin on the Ambatovy nickel project, Madagascar

clients’ social license to operate in the construction phase and beyond. This community-strengthening programme was modelled after the highly successful sustainability initiative put in place for the Mozal Aluminium Smelter Project in Mozambique in the late 1990s.

More recently, on the Ambatovy nickel project in Madagascar, SNC-Lavalin trained over 10 000 locals and employed hundreds of small Malagasy companies during execution.

Established strategy “On all projects, it is imperative that the decision-making process is guided by established strategy and pre-determined criteria, backed by a credible historical data base of successes. Our success stems from the ability to demonstrate successfully the value of adhering to the best practices in project management and control processes within a totally ethical, safe and environment-friendly context,” says Dixon.

Another critical success factor in project management is helping clients understand the value of test work and the various levels of study prior to committing large amounts of capital

PROJECT MANAGEMENT

to implement projects prematurely.

Studies that demonstrate fundamental flaws in a project’s viability by no means constitute wasted effort — on the contrary, argues Dixon: their value lies in ensuring that client capital is deployed most effectively and potentially adverse consequences are identified and are mitigated proactively.

SNC-Lavalin’s involvement in Africa dates back to the mid-1960s and includes the successful execution of a wide range of projects completed in more than 52 African countries.

These range from small studies to major EPCM (engineering procurement and construction management) projects. Included in this range are mega-projects such as the Mozal and Hillside aluminium smelters for BHP Billiton and Skorpion Zinc for Anglo American, in addition to the Ambatovy Nickel Project.

An aerial view of the Ambatovy nickel project

infrastructure, poor geotechnical condiDixon comments that the success of all tions and a bout of torrential flooding. of these projects is based on tried-and“Underpinning all our project mantested SNC-Lavalin project management agement activities is procedures. SNC-Lavthe SNC-Lavalin ‘WE alin was awarded the SNC-LAVALIN CARE’ culture that reProject Management SNC-Lavalin is one of the inforces five core valInstitute’s (PMI’s) leading engineering and ues that have formed Project of the Year construction groups in the cornerstone of Award for its managethe world and is a major player in the ownership of the organisation’s ment of the Mozal Alinfrastructure and in the culture and which reuminium Smelter Proprovision of operations and main key factors in ject in Mozambique. maintenance services. SNCour ability to achieve Lavalin has offi ces across continuous growth.

US$100 million Canada and in over 40 other “Our ‘WE CARE’ valunder budget countries around the world ues are related to the Every aspect of this and is currently working in well-being of our emproject’s managesome 100 countries. ployees, health and ment, from efficiensafety, the environcy of operations to ment, sustainable development of the commitment to the local community, communities in which we live and work was taken into account in PMI’s assessand the quality of work we deliver to our ment process. The project was comclients. These factors feature strongly pleted six months ahead of schedule in all our project proposals,” says Dixon and US$100 million under budget, dein conclusion. spite delays caused by a lack of public

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IT & COMMUNICATIONS

Enabling technology Technology is an important enabler in mining. Gerhard Hope talks to SAP South Africa about how it can help mining companies meet the ongoing challenges of the industry.

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F ONE HAD to choose a word to describe the mining industry in South Africa at present, ‘volatility’ would be a good choice. “You have quite a bit of volatility in commodity prices, and obviously in South Africa you have volatility in exchange rates, so from a mining perspective you have increased input costs,” says Chris Willcocks, director, innovation, Africa.

This means a key requirement of the industry is operational efficiency. “They need to have an overview of their mines and be able to cut costs and ensure that they are operating at full operational capacity. This means they need to be aligned from a maintenance perspective in terms of all their equipment.

Regulatory compliance is really important to mines because you need to ensure all employees are trained correctly to perform their specific duties. You need to ensure you have incident management to record any incidents that might occur from a safety perspective.”

These are wide-ranging yet intertwined requirements, and SAP South Africa offers solutions that embrace all these aspects.

“We have core ERP business intelligence solutions that give an overview of mines; from a compliance perspective we have environmental, health and safety solutions, which ensure you are compliant and manage the safety of your employees,” says Willcocks.

Close relationship This has entailed a close relationship with the mining industry, in order “to understand their needs and build solutions around those needs, and really being industry-specific in order to provide the correct solutions from an SAP South Africa perspective.”

To give an indication of how close this working relationship is, Willcocks says that SAP convenes a global mining council whereby it obtains feedback from its mining clients on their specific requirements, and “what kind of solutions they are going to need going forward, and to really get input from them. We like to adopt an industry approach, and not just develop solutions and push them out to SAP offers core ERP busines intelligence solutions for mines

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the mining industry. We want to work with that industry to ensure we provide the correct solutions.”

Willcocks heads up SAP’s energy and natural resources business in Southern Africa.

“Basically I am responsible for sales of our solutions to our mining, energy and natural resources clients.” He, in turn, works closely with Frederik Malherbe, the overall industry, and Shabir Ahmid, the industry principle for mining specifically.

Mining is one of 25 industries that SAP focuses on globally. It falls under the banner of energy and natural resources, which also includes the oil and gas industry, for example. It covers primary producers right through to the end of the value chain, thereby forming a total closed business circle, notes Malherbe.

“When we initially started with the industry approach in 1998, it was because we realised that a generic vendor would not deliver value to its customers. If you cannot address their specific business processes, you will not get anywhere. You need to understand the industry at the same time, and align your internal resources.”

47 countries In terms of Africa, Malherbe is responsible for not only sub-Saharan African, but all the French-speaking territories as well.

“We have just added 5 countries to the 47 we cover in total over four regions,” he says. A metallurgical engineer by training who has worked for De Beers and Anglo American, Malherbe helps to combine specific industry expertise with SAP’s knowledge and software capabilities. “In essence we bring the two worlds together, the industry view and the system or IT view.”

Of course, this did not happen overnight.

“About two-and-a-half years ago SAP realised that its environmental, health and safety solution was not meeting all the requirements of the mining industry in

IT & COMMUNICATIONS

general, and the South African mining industry in particular. We had customer sessions where we determined the requirements, and throughout the development process of that software we engaged with our customers and evaluated developments.

“Ultimately they signed it off as actually fulfilling their needs and, around the third quarter of last year, we launched our new environmental, health and safety management solution, which is now based not only on global mining requirements, but also South African mining requirements.”

Willcocks adds: “It is really a global concept, and is supported globally, so we are not limited to Southern Africa.” SAP also works closely with the Australian and Russian mining industries.

SAP prioritises environmental, health and safety compliance

Ahmid says: “Environmental, health and safety compliance has always been up there. It forms part of a much broader agenda, under the umbrella of corporate sustainability. One of the aspects of that corporate sustainability, in addition to environmental, health and safety compliance, is corporate social responsibility (CSR), which is a major challenge facing

List of priorities In terms of the list of priorities that SAP derived at in developing its solution,

African mining houses in terms of the legacy of the industry.

What is critical to CSR is “ensuring the transparency and viability of mining operations, particularly in terms of revenue inflows and outflows.” A major government-level drive in this regard is the Extractive Industry Transparency Initiative (EITI), which Ahmid describes as “an initiative to drive greater transparency and compliance disclosure. These are the types of industry issues we are trying to address or tackle with SAP’s mining solutions.”

Malherbe points out that SAP has developed a solution for the Ghanaian government specifically in terms of the EITI. “What we did was build a system for the government whereby inputs from the mines and oil producers are automated into an analytics and reporting solution, thereby obviating the need for these enormous paper flows between the government and the operating entities. 

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IT & COMMUNICATIONS

Proper systems “If you can take this forward to envisage the future, if these mines and oil producers are running proper systems, it will give them visibility into their actual production activities. If that is systemised, we can automatically pull the data from the mines into the government’s environment,” explains Malherbe.

The main aim of this system is “to ensure that the wealth generated from those economies and industries is retained for the benefit of the local population, so the wealth and revenue stays in Lagos and does not end up in London, or stays in Zambia and does not end up in Zurich, which is the case across many of these countries currently, and which is what the EITI is trying to resolve,” says Ahmid.

Willcocks adds that SAP’s main role in terms of the EITI, from a risk compliance and governance perspective, is “to offer solutions that provide transparency and visibility in the mining sector.”

Risk compliance is a key component.

“Environment, health and safety cannot

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be viewed in isolation. It forms a closed loop with the whole management and entire value chain of the mine. Your ability to maintain your equipment directly influences the safety of your workers, and that ability is created by having proper maintenance systems in place. Every production operation is a potential safety risk. If that is not integrated into your value chain and IT system, meaning you do not have a proper understanding of it, it can pose additional risks,” says Malherbe.

Prevention “I would say that environmental, health and safety management revolves more around prevention than trying to fix things afterwards. Thus you need to close the loop and introduce the capability to be able to conduct safety audits and inspections, for example. If you find something, it should be systemised so that it forces an action and a repair. If you do not systemise, then unfortunately human error slips in and, when that happens, obviously the risk profile increases. By adopting this

approach you will drive production, maintenance and skills development in the mining industry.”

Willcocks points out that this approach requires the mining industry to be proactive instead of reactive. “If you do not have proactive management of your environment and equipment, you stand to lose output, which will have a significant impact on the bottom line. We have solutions that can integrate all that information into your ERP and other solutions so you have a view of your entire mining enterprise.

“The purpose of that is simply that any mine has to be as productive as possible.

It is very pre-emptive. You have to provide solutions before the event actually occurs: so, in order to maintain a certain piece of equipment, you need to dispatch an engineer beforehand or you need to automate the work order. If a piece of equipment is down at a mine, no one can work.”

Risk compliance Ahmid adds: “One of the differentiators of SAP from other technologies is that if you

IT & COMMUNICATIONS

ABOVE The latest trend is a convergence of operational technology and IT

look at governance, risk and compliance, which are at the heart of all of these processes, our solutions provide the ability to actually embed governance, risk and compliance within the core processes.”

In terms of the uptake of SAP’s solutions in the rest of Africa, Malherbe says that the adoption has been varied. “If you look at the multinationals operating up in Africa, you will find that they will use a downscaled version or solution of what they would typically drive in First World countries.

What we have seen is that the multinational mining houses are taking that template and implementing it in specific mines. That will then give them a backbone financial, production and maintenance system, as well as environmental, health and safety management.”

THE WIDEST RANGE OF MINING MACHINES FROM ONE SOLUTION KEEP IT REAL. KEEP IT CAT®

Digital mining One of the latest trends in the IT sector is digital mining, which Ahmid explains “stems from a fundamental convergence of operational technology with information technology. Mines have typically always invested in technical systems, such as process control, comprising intricate devices that reside in the actual technical environment. What has happened now with the advent of ERP, as IT has progressed and matured, is that there has now been a drive towards the convergence of the technical environment with a business environment such as ERP.” “What we see is that it is still early days,” cautions Malherbe. “However, the potential is enormous, for this will bring about the ability for mine management to proactively manage what is happening, and that immediately affects your bottom line. If you look at the oil and gas industry, it is a lot more advanced in the sense that such integration has already taken place, the plants are modern and the technology is in place. The mining houses and mining industry, in my opinion, are following in the footsteps of the oil and gas industry. Extraction is obviously a different ball game to just pumping out oil.”

Malherbe adds that it is in this geological space where socalled ‘big data’ resides in mines. “You need the capability to be able to analyse that enormous amount of data to ensure that your mine planning is efficient.”

I N S I D E M I N I N G 0 4 | 2 0 1 4 53

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EQUIPMENT

Strategic alliance As the new Southern African distributor of the entire range of Edge Innovate’s mobile and tracked stackers, Pilot Crushtec International recently exported its first shipment of an LTS75 low-tracked level stacker to a customer in the Democratic Republic of the Congo.

K

ATANGA CONTRACTING Services SARL ordered the product following a visit to Pilot Crushtec, where they saw a demonstration of the advantages of using the conveyor for its steel apron feeder to handle the fines in the feed and low level loading of larger material, therefore avoiding the requirements of a fixed run-of-mine pad. Pilot Crushtec International Africa sales manager Wayne Warren explains that “the LTS75 is a very versatile product and could be considered as a preferred choice for operators where high level of fines in feed mixed with large rocks and rapid plant relocation is required”.

The significance of the Jet Park-based company’s strategic alliance with the Northern Ireland materials handling specialist was underlined by that country’s Enterprise Minister Arlene Foster during her visit to bauma Africa in 2013. Foster was present as head of a trade mission to promote her country’s products, especially RTS80 radial tracked stacker conveyor

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in the fields of mining and quarrying.

“South Africa is seen by the Northern Ireland Executive as a country offering substantial business potential, especially in dynamic industries such as materials handling with applications in mining, quarrying, construction, infrastructure projects and recycling,” she said.

Edge Innovate managing director Darragh Cullen was equally upbeat about the dealership agreement with Pilot Crushtec International. “We are partnering with a professional and successful dealer whose focus on the customer in terms of after-sales service and support matches the ethos of our own organisation,” he said.

Pilot Crushtec International CEO Sandro Scherf believes the alignment with Edge Innovate serves to underline its commitment to provide its customers with robust products to meet African conditions. “Our customers now have access to a range of specialised and innovative materials handling equipment.

“Edge Innovate products are designed and built to exacting standards and have been

created with increased levels of production and cost efficiency in mind. Experience has shown that they deliver high-capacity performance while handling large quantities of coarse and abrasive material under the most extreme climatic conditions.

“The company’s commitment to after-sales service as well as its continual focus on innovation and technical excellence offers an exciting future, both for our customers and Pilot Crushtec International,” said Scherf.

Edge Innovate specialises in stockpilers, tracked feeders, trommels, shredders and picking stations. Three specially selected products typical of Edge Innovate concepts and technology are available from Pilot Crushtec International with immediate effect.

ZAMM IMPORTS SHINE One of the most impressive success stories in Africa’s crushing and screening industry is Zambian company Zamm Imports, which has achieved spectacular growth over the past 48 months.

According to Wayne Warren, Africa sales manager at Pilot Crushtec International, first impressions count.

“Zamm Imports has consistently supported us, as from the very beginning they saw our ability to deliver the right products on time.

By products, we mean not only complete plants but also replacement parts, products and technical advice. The trust factor has been predominant since our relationship began four years ago,” he says.

“The company was looking for a turnkey plant that would produce high volumes of aggregate, right from the word go. Owner Jignesh Soni regularly travels across Africa and read one of our market related advertisements in an inflight magazine,” says Warren.

EQUIPMENT

Latest line-up Case Construction Equipment presented the latest introductions to its compact and heavy equipment product lines at CONEXPO-CON/AGG 2014, held from 4 to 8 March in Las Vegas.

W

ITH OVER 125 000 attendees and 2 400 exhibitors, CONEXPO-CON/AGG is the largest construction show in North America, displaying the newest equipment, technology and product breakthrough. In its quest to meet the most stringent emission standards, Case presented an expanded line-up of Tier 4 Final compliant machines.

“CONEXPO-CON/AGG was a very successful event for Case,” says Mario Gasparri, brand president of CNH Industrial Construction Equipment. “At our stand, we welcomed an impressive number of customers from all over the world.

They commented on how impressed they were with the welcoming feel of the stand, the extent of our brand’s product ranges, and the importance of the global group we belong to.”

“We are very proud of our latest introductions presented in Las Vegas,” adds Gasparri. “They successfully incorporate our strong commitment to quality, productivity and fuel efficiency, helping our customers to get the job done efficiently and cost-effectively, exactly the way they want to.

New Tier 4 Final wheel loaders

rear-mounted engine gives the safest-inclass maintenance accessibility at ground level. Available with full climate control, the cab provides outstanding comfort and unmatched all-round visibility.

The 921F wheel loader offers a diesel particulate filter (DPF) free solution thanks to the well-proven SCR engine technology with AdBlue, implemented in Case wheel loaders since 2011. For Africa and the Middle East markets, not complying with Tier 4 Final emission standards, the 921F wheel loader is offered in dedicated fuel-efficient FPT Industrial engine configurations, which assure great power output while reducing fuel consumption and operating costs.

emission-compliant engine configurations for Africa and the Middle East markets, the M Series dozers provide superior performance in load response, max torque and achieve lower emissions and higher fuel savings.

The operator has total control over the machine performance to better match the ground conditions thanks to new control customisations, including blade sensitivity, steering sensitivity and shuttle sensitivity settings. With a new cab-forward design built for maximum visibility and comfort, and a robust C-frame for heavy earthmoving, the M Series offers higher productivity in all working conditions.

M Series dozers The Case M Series dozers took centre stage at CONEXPO-CON/ AGG with the M1150, the M1650 and the M2050 models. Redesigned from the ground up, this three-model line-up boosts productivity with best-in-class drawbar pull, powerful horsepower ratings and operating weight up to 20 t. Powered by fuel-efficient engines, also provided

by FPT Industrial, with specific

Case introduced the new Tier 4 Final 921F wheel loader and succeeded to further improve the best 20 t wheel loader available on the market. With best-in-class 7.2 t payload which allows to fill 28 t payload trucks in only three passes, the new 921F model rises the bar on performance, fuel savings and ease of maintenance.

Equipped with ProShift transmission, the 921F model delivers up to 10% more fuel savings, while its unique Cooling Cube design keeps the dust away from the radiators and ensures constant temperature and high efficient cooling. The TOP RIGHT The 921F wheel loader RIGHT The M1650 dozer

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TECHNOLOGY

One-stop partnership Master Drilling’s one-stop shop partnership with Kumba Iron Ore at the Kolomela mine is now in its second year.

T

HE FIVE-YEAR drilling contract includes percussion and exploration drilling, as well as grade control. In recent months, the group established a pilot project at Kolomela with its OreAlyser, whereby grade can be measured while drilling to enhance mine-planning processes. “We believe that sufficient knowledge and skills have been developed to date to extend this service to the rest of the South African market and abroad,” said Pretorius.

Master Drilling Group, a specialised drilling services provider, which listed on the JSE on 20 December 2012, also recently announced a 43.4% increase in profit to US$15.8 million (R165.63 million) and a 28.4% increase in headline earnings per share (HEPS) to 10.3c for the year ended 31 December 2013.

As at 31 December 2013, the group had committed orders totalling more than US$225 million, which are mainly production oriented, as the minerals industry’s capital and exploration projects remain relatively subdued, reflecting the current phase of the commodities cycle.

The improvement in profitability and revenue, which rose from US$99.7 million in 2012 to US$119.6 million in 2013, comes from sustained organic growth in Latin America and the contribution of new African contracts, both

coupled with the group’s focus on cost optimisation strategies.

The group’s undertakings remain dominated by Latin America and Africa, with increased mining activities in Africa in recent years. In Latin America, particularly in Guatemala, the group established new projects during 2013. Operations in Brazil have stabilised after operating below par for the past two years and operations in Africa have seen Mali and the Democratic Republic of the Congo being added to the group’s portfolio.

“We benefit directly from training and our ‘one-stop-shop/full-automation’ concept,” says CEO Danie Pretorius. “It remains critical that our costs and productivity fit within the budgetary constraints and the cost curves of our clients.

Increasing our margins is therefore dependent on improving our own efficiencies.”

Master Drilling has committed capex of US$20 million to expand its current equipment fleet and to further advance its automation programme. This includes the addition of 14 new machines, thereby supporting organic

growth prospects and the ability to service new markets.

Drilling services have been expanded with the inclusion of horizontal raiseboring. This service is an alternative to tunnel boring or conventional development using blasting cycles. Horizontal raiseboring not only creates a safe working environment, but also allows for quicker development than conventional methods afford.

“The year ahead will be dominated by increasing safety awareness, specialised training, improving operating efficiencies and implementing systems globally to enhance operations management,” says Pretorius. “We will continue to be conservative and fiscally prudent, but we will also be innovative and opportunistic where circumstances warrant this approach.”

Komatsu

Senmin

INDEX TO ADVERTISERS 1st Annual Leadership for the Mining Shop Steward

2

31

Stefanutti Stocks Mining Services

36

LogiMan

IFC

Tega Industries

39

53

M&J Engineering

30

ThyssenKrupp Industrial Solutions

25

23

Metgroup

43

Barloworld Equipment Copperbelt Mining FLSmidth Johnson Crane

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26-27

Loesche

Afrilek

ELB Equipment

OBC

4

Tupelostep Investments

3

8

Multotec Group

33

Vermeer Equipment Suppliers

52

IBC

Osh Expo Africa

51

Weir Minerals

20

Pilot Cruchtec

10

WorleyParsons

29

13

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