Autumn 2013
Hang in there OceanaGold safety crews school up on the latest rescue techniques.
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Contents »
Autumn 2013
Contents
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13 Cutting edge Christchurch firm ARANZ Geo is taking its geological modelling technology to the world. 14 Health check Improving health and safety standards across the NZ mining industry is the key focus of industry body MinEx. 19 Rescue remedies A workshop at OceanaGold’s Macraes operation gave staff a chance to try the latest rescue techniques.
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30 Taharoa rising New Zealand Steel is aiming to treble ironsand concentrate production from its Taharoa mine. If you have an image you think would look great on the cover, contact us: Autumn 2013
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Phone 03 983 5500 Email james@waterfordpress.co.nz www.waterfordpress.co.nz
Hang in there OceanaGold safety crews school up on the latest rescue techniques.
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Cover photo courtesy of OceanaGold.
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Coal remains crucial to the Coast - Kokshoorn There is no question
Jo Bailey Grey District mayor Tony Kokshoorn is confident about the future of mining on the West Coast once the region can work through its current challenges. “There are some good prospects such as OceanaGold’s Blackwater gold project, Bathurst’s Escarpment coal mine and the possibility of Solid Energy developing an open cast coal mine in Greymouth in the future,” says Kokshoorn. “We just have to get through the short term, although we don’t know yet how long this will be.” Kokshoorn says he “couldn’t think of a worse run” endured by the region over the last two-anda-half years. “We’ve had every possible thing happen, starting with the world recession, then the Pike River disaster, the Christchurch earthquake which pushed down tourism, then the Solid Energy layoffs which kicked us while we were down. “There was even the drought. You wouldn’t read about it. I’ve said to people the only thing missing was a plague of locusts.” Kokshoorn says the closure of Solid Energy’s Spring Creek mine left the region “reeling”. “The Pike River disaster was bad enough, with the deaths rocking the town and a further 150 people all up losing their jobs. “But even though we were in the middle of the recession we were able to absorb it to a degree, with some of the miners redeployed to Solid Energy and OceanaGold. But then the Spring Creek announcement came from left field and was a complete shock.” He says prior to the “massive retrenchment” Solid Energy had indicated it was only six months away from putting in consents for a new open cast mine at Greymouth where it holds licenses.
those coals are needed and when prices come back up things will turn around.”
Tony Kokshoorn
“Overnight we went from real optimism to Solid Energy laying off 230 direct staff plus 130 contractors. It was unbelievable.” Union officials have told Kokshoorn that around 170 of the 230 staff laid off from Spring Creek mine are still looking for work. “At this stage we know most don’t want to leave Greymouth, with many holding on and waiting for some good news from Solid Energy or the other mine companies with projects on the horizon. “But in the end it will come down to employment. Some will probably have to move on to Australia or other places to get work.” Kokshoorn says Solid Energy needs to “get their act together and stick to their knitting”.
“They have to get back to what they know best, which is coal mining and not all this flowery stuff they’ve been involved with. “The potential for the new open cast mine puts them in a good position but they have to sort themselves out from a capital point of view and get on the journey again with projects that will give them good cashflow into the future.” Although the industry is going through tough times, Kokshoorn is convinced coal is “far from down and out”, with the Stockton and Greymouth coal recognised world-wide for its steel-making quality. “There is no question those coals are needed and when prices come back up things will turn around. We’ve reached the bottom of the cycle - the question is how long will it keep going sideways before things improve?” Outside of coal, the West Coast has huge mineral potential in gold, iron sands and rare earth minerals, he says. “OceanaGold has already announced it will employ around 90 staff at its Blackwater gold project when fully operational which is something we can hang our hats on. “In terms of other minerals projects we need to get some big players and partnerships in place to contribute the capital needed to stimulate economic growth in the region.”
Gold price plummet hard to fathom Jo Bailey They were two black days that ripped the sheen off the gold market and resulted in the largest two-day decline in the gold price over the last 30 years. The market slide on April 15-16 saw gold prices plummet to a two-year low of US$1395 an ounce, although by April 23 the gold price had recovered to around US$1426. This follows record highs of $US1800 an ounce during the remarkable run enjoyed by the precious metal over the last few years. World economists have given a number of reasons for the slump, including the slower than expected first-quarter growth in China; the potential for Cyprus to sell some of its gold reserves to make up for any deficit in its Euro-Zone bail-out package; and improvements in the US economy diminishing the metal’s appeal as a safe haven investment.
There are even reports of dark market forces at work – possibly a US hedge fund either in trouble or out to capitalise on a fluctuating market; or a concerted effort by the US Federal Reserve and some market players to scare people away from gold and silver and towards American dollars instead. Whatever the reason, the slump is having implications for gold companies. OceanaGold’s share price fell from NZ$3.10 to $2.09 although by April 23 it had bounced back to $2.42 on the back of the slightly higher gold price. Shares of global miners Newmont Mining Corporation were trading at US$33.40 on April 23 with its 52 week range from US$32.13 – $57.93. Mining NZ was unable to reach Darren Klinck, OceanaGold’s Head of Business Development for comment before going to press. However Charles Murphy, managing director of Australian exploration company Strategic Elements,
which is backing several gold exploration projects underway across the South Island, remains optimistic about the future of the precious metal. “Our projects are in exploration stage and we do not have the need for large capital expenditure,” says Murphy. “At this stage the current price fall hasn’t changed any of real fundamentals driving the ongoing demand for physical gold.” Murphy believes the price drop has been generated more by the “traders of paper gold” rather than physical demand for the precious metal. “Even though it is still unclear where the very short term low rests, we remain extremely positive about the future for gold. “With ongoing issues in the world economy we expect to see continued support for gold and a rebound in the price. “Looking back, this correction may have provided a significant opportunity”.
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6 Mining NZ » Autumn 2013
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NI zone primed for gold tender Karen Phelps The proposed New Zealand Epithermal Gold 2013 minerals tender is expected to attract competitive bids for metallic minerals permits and stimulate investment in minerals exploration in the region, according to New Zealand Petroleum & Minerals general manager David Binnie. The tender will be for permits to explore for metallic minerals over nearly 8300sqkm of proposed prospective land in the Taupo Volcanic Zone in the central North Island. The exploration permits will be limited to 7500 hectares in size. Before finalising the area for Epithermal Gold 2013, New Zealand Petroleum & Minerals is consulting with local iwi and councils in the proposed area. “At this stage we are seeking input from iwi, hapu and councils in the area to identify areas of particular sensitivity,” says Binnie. He says as part of that process iwi may request an amendment to the proposed tender or that certain areas of particular importance are excluded from it. Sensitive conservation areas listed under Schedule 4 of the Crown Minerals Act have already been excluded from the proposed exploration tender area. NZPM says the area has been selected as it is is known to contain epithermal style gold-silver mineralisation in the shallow parts of extinct geothermal systems in the western side of the zone. Gold deposition has also been observed in active geothermal fields on the eastern side of the tender zone. Over the past few decades a number of domestic and international companies have
undertaken geological, geochemical and geophysical work in the region. New Zealand Petroleum & Minerals says a competitive tender process has been chosen because the government wants to “strategically manage growing interest in New Zealand mineral exploration”. “It is expected that increased minerals development in the areas proposed will lead to new jobs and will bring income into the local economy either directly or as a result of flow on effects,” the agency says. Binnie says that the process being undertaken will ensure exploration permits are granted to the best operator/s capable of delivering safe and environmentally responsible exploration programmes and will maximise the return to New Zealand. The minerals sector now brings in around $20 million in government royalties each year and contributes over $1.1 billion to GDP. Affected iwi and councils are already being contacted directly by New Zealand Petroleum & Minerals and will have until Tuesday May 28, 2013 to respond on the proposed tender which will be open for a minerals competitive tender in the second half of this year. Exploration permits are expected to be awarded in 2014. If successful, a company will be permitted to undertake exploration activity for a period up to ten years, subject to meeting strict health and safety obligations and any environmental requirements set by a regional authority under the Resource Management Act consenting process. Binnie says that should any exploration activity be successful and identify commercially viable mineral deposits companies would then have to apply for a mining permit.
....increased minerals development in the areas proposed will lead to new jobs and will bring income into the local economy either directly or as a result of flow on effects.”
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Straterra sets up AustmineNZ New Zealand mining industry lobby group Straterra has signed an affiliation agreement with Austmine to set up AustmineNZ. Austmine is Australia’s largest industry association of mining equipment, technology and services (METS) companies, including some of the world’s leading innovators in mining technology. It boasts sector revenue of over $50 billion and exports of more than $15b for Australia to over 100 countries in the world. Straterra spokesman Chris Baker says the development of AustmineNZ is a logical extension of Straterra’s work. He says AustmineNZ members will benefit from the Austmine global brand. “AustmineNZ will opens up opportunities for New Zealand METS companies to market
themselves on the world stage through trade missions, networking events and other promotional activities that Austmine offers. “Austmine missions planned for 2013 include Moscow, Kazakhstan, Mongolia, West Africa, Brazil, Panama, Mexico and New Zealand.” Austmine executive officer, Robert Trzebski says the association will benefit the mining sector in both countries. “Australia’s demand for technical and professional expertise is high and growing. “The benefit of a New Zealand branch for us is increased capacity and capability to meet this Australian market demand and provide a broader base on which to build our credibility and influence.”
West Coast Minerals Forum will focus on “innovation” Jo Bailey Innovation and smart mining will be the focus of this year’s West Coast Minerals Forum. The forum - which runs from July 17-18 at Shantytown, Greymouth - will address increasing challenges faced by the exploration and mining industry in the current economic climate, particularly when it comes to accessing difficult-tomine resources safely and effectively. Technology and innovation are seen as key drivers of success as the industry responds to these challenges. Their role and application in the minerals sector will be a hot topic at the forum. Minister of Energy and Resources, Hon. Simon Bridges will open proceedings and provide the keynote speech. The forum will host a trade exhibition and presentations from industry players in innovation including: exploration and mining operations, human resources, economics and policy, engineering, environment, and health and safety. The Minerals West Coast Annual General Meeting and Goldminers Association AGM will also be held as part of the forum, along with a networking event by Women in Mining New Zealand (WIMNZ). AustmineNZ will host an Australian delegation of Mining Equipment, Technology and Services
(METS) companies and a business-matching event on July 17. Straterra holds the secretariat for AustmineNZ where members can connect with global mining opportunities through worldwide networks at Austmine events, seminars and workshops; international exhibitions, conferences and mining missions. Nominations open soon for the inaugural Minerals West Coast Forum Environment Award, to be presented as part of the forum. This is an award for the strongest overall demonstration of environmental management by a New Zealand minerals sector organisation or project. The award will be presented at the Minerals West Coast Forum dinner on the evening of 18 July. The organising body of the Minerals West Coast Forum - Minerals West Coast - was established as a charitable trust in 2005 to increase the community benefits of this major sector of the West Coast economy. The 2013 forum was so popular that Minerals West Coast has joined forces with Straterra, the industry group representing the New Zealand mineral sector, for assistance with event coordination this year. Registration for the Forum opened on April 2. Companies interested in promoting their business at the forum should contact Geena Kumar at Straterra phone (04) 909 7301 or email geena@ straterra.co.nz
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Step forward for briquette plant Jo Bailey At last some positive news for beleaguered stateowned coalminer Solid Energy. The company’s pilot lignite briquette plant at Mataura has successfully completed a rigorous five-day performance test, the final phase in the commissioning process. Fred Schulte, chief executive of South Australian based GTL Energy Ltd – which has entered into a joint-venture at the plant with Solid Energy - says the company is “extremely satisfied” with the results. “The plant performed very well and met the threshold of running contiguously for three of the five days of testing,” says Schulte. “We are still waiting for some final laboratory results around product quality,” he says. “However initial indications are good and we don’t anticipate any problems.” Schulte says the company is now planning its work schedules “going forward”. Feedstock for the plant comes from Solid Energy’s nearby New Vale Mine. Utilising GTL Energy coal-upgrading technology, the low grade coal is turned into a higherrank fuel by removing moisture from the coal and transforming it into the briquettes, which have an increased energy content, reduced emissions, improved handling and transportation characteristics and increased market value. Once fully up and running the Mataura plant is designed to produce about 90,000 tonnes a year of briquettes from about 150,000 tonnes of lignite. The product will eventually be trialed in thermal export coal markets, but once the data from commissioning is analysed, the next step is to consider trials in the South Island energy market with potential customers. Schulte said he was unable to comment in any detail about the joint-venture arrangement between Solid Energy and GTL Energy. When the partnership was first announced on March 1, it was noted that the deal had not only secured the future operations of the plant,
Kiwis top in Mining Games Jo Bailey
but will focus on project development and global commercialisation of GTL Energy’s coal upgrading technology. Schulte says the achievement of “continuous, safe and reliable production” at the Mataura plant is an important stepping stone to enable the company to continue with the commercialisation of its technology worldwide. The technology has already been proven on a commercial scale in North Dakota, where GTL Energy ran a similar sized plant that successfully upgraded briquettes from lignite and coal samples sourced from several countries. “To fully commission the Mataura plant is a further demonstration of the technology at scale,” he says. Schulte says there has already been “a lot of industry-wide interest” in the technology from Indonesia, Australia, North America and other countries. “We believe there is significant potential for it going forward.”
A last minute decision to enter a team in the 2012 AusIMM Mining Games in Ballarat paid off when the AusIMM New Zealand team took out the mixed open competition. “We were delighted as no one, least of all the Aussies, expected this sole team of Kiwis to come out of the blue and win it,” says John Taylor, AusIMM committee member and team manager. The team had little time to prepare, given that it was put together in August - just a few weeks before the late-September event. “The committee was sceptical as to whether we could train a team in time and there were obvious health and safety considerations. But they decided to put up the money, and although it was a rush to assemble the team, fit in some training and get them on the plane to Ballarat, we managed to pull off a fantastic win.” Around 27 teams from Australia competed at the event, with most aligned to universities, mining schools and geology schools. “In New Zealand we don’t have any mineral industry institutions large enough to field teams, so a hand-picked team of seven young people from the industry, including team captain, Sarah Smith was put together.” A training weekend was held on the West
Coast, where Mines Rescue provided health and safety training; Shantytown assisted with gold panning training; Geotech put the team members through rock drill) training at the Hari Hari hydro project site; and the Denniston Experience tourist mine provided sleepers and track for practicing track-laying skills. Westland Workgear, of Greymouth, also provided the team with work clothing and safety gear for the event. “A lot of people came to the party to help the team.” The AusIMM Mining Games are aligned with the International Intercollegiate Mining Games that started in 1978 as a way to honour the 91 miners who died in the Sunshine Mine disaster in Idaho in 1972. Competitions continue to be held throughout the US, Canada, England, Germany, Holland and Australia. The teams competed in men’s, women’s and open mixed teams in ten timed events including airleg drilling, waste mucking into railed mine car, track laying and dog spiking, sleeper cutting (double-handled saw), blast face tie-in, gold panning, surveying (levelling), vent duct layout, mineral specimen and thin section identification, and magnetic separation. The New Zealand team won the surveying and blast face layout events, and performed consistently well in the other eight events to take the overall victory.
Exciting programme on offer at AusIMM NZ conference Jo Bailey Delegates can look forward to a packed programme at the 2013 AusIMM New Zealand Branch annual conference, says John Taylor, convenor of the organising committee. “We’ve had a lot of interest from presenters, who will cover a range of topics. “We have also had great support from sponsors for what is recognised as New Zealand’s premier mining conference.” Around 300 delegates are expected to attend the conference in Nelson from August 25-28. It will cover all aspects of exploration, mining and New Zealand’s mineral resources. Taylor, a mining engineer at Solid Energy expects one of the highlights to be a panel session with various conservation and environmental groups. “We ran a similar panel last year which gave industry and environmental groups the opportunity to share their points of view and get some dialogue going. It should be another exciting and lively session.” All of the latest gold and coal projects underway in the South Island will also be reviewed. In addition, delegates will hear from the Minister of Energy and Resources and CEO’s of most of the major coal and gold mining companies
8 Mining NZ » Autumn 2013
in New Zealand as part of the keynote sessions, and will be able to choose from a large number of industry-specific breakout sessions. A number of scholarships and prizes will also be awarded, including the Lloyd Jones award in recognition of extraordinary and sustained service to the branch. Another feature is a large trade display for mineral industry service exhibitors. Delegates can also take part in field trips and short courses that are scheduled for the days before and after the conference. These include a trip to Dun Mountain on Saturday, August 24 – “quite famous” in the geological world for putting its name to the rare rock called dunite, a name since applied to rocks of this type all around the world. A short day course follows on Sunday, August 25, with a welcome function and registrations that evening. Conference sessions run each day from August 26-28. The conference proper concludes with a farewell function on August 28. However, two days of field trips and short courses will continue on August 29-30. “We are very pleased with how the programme is coming together and the level of interest from presenters, sponsors, exhibitors and delegates,” says Taylor. “We also expect a number of Australian delegates and media to attend.” Visit www.ausimm2013conference.co.nz for programme details and conference registration.
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First offerings at School of Mines Jo Bailey The first courses are being offered at the emerging New Zealand School of Mines (NZSOM) at Tai Poutini Polytechnic. These include pre-employment Certificates in Quarrying, Mining; Civil Plant Operation; and Drilling (driller’s assistant); plus industry focused programmes such as Explosives and a range of programmes to assist companies in meeting their operational and statutory requirements. The School of Mines is currently in the process of establishing a Programme Advisory Committee to provide guidance to the School and to ensure its programmes are fit for purpose and meet an industry need. Representatives of the major mining companies and leading industry bodies have been invited to participate on the committee. Peter O’Sullivan development manager for NZSOM (and Minerals West Coast manager) says a considerable amount of work has gone into establishing the largely “virtual” school. “The driver for the development was the Minerals West Coast Industry Workshop held during the 2011 West Coast Minerals Forum which resulted in the Polytechnic and Minerals West Coast completing a feasibility study on the demand and viability of a New Zealand Schools of Mines.” The concept behind the school was to create a seamless pathway for training and career development for the minerals industry that spans from high school through to post graduate studies.
The Polytechnic’s School of Mines is currently seeking to recruit a pool of skilled professionals from within the mining industry to teach specialist subjects. “We need to ensure that we have the right people with current and up to date knowledge and skills available to teach,” says O’Sullivan. One of the critical success factors identified in the feasibility study was the need for New Zealand gained qualifications to be recognised in Australasia. Strategic relationships have since been established with key institutions in both New Zealand and Australia – including Curtin University (WA); Western Australian School of Mines; and Goldfields Institute (Kalgoorlie). “The growing relationship with these organisations is targeted at easing the process for students to have new Zealand gained qualifications recognised, and enable them to work on either side of the Tasman. “These cooperative relationships include the cross-recognition of each other’s qualifications as appropriate and may also include the sharing of specialist teaching personnel and resources,” says O’Sullivan. In the past, training for the New Zealand Minerals industry has struggled to keep pace with the ever-changing technical and knowledge requirements of the industry. There has also been tension between the different organisations providing this training, he says. “The New Zealand School of Mines will work to bridge these tensions and promote a transparent and effective training pathway.”
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10 Mining NZ » Autumn 2013
New Zealand School of Mines Expressions of Interest Tai Poutini Polytechnic has established the New Zealand School of Mines to offer training at certificate and diploma level with links to established international universities. This will enable students to complete the first year of a mining specific degree with Tai Poutini Polytechnic while working in the New Zealand mining industry. Expressions of interest are sought from people able to teach, advise and assist with programme and resource development on a casual, contract or part time basis in the broad subject areas of: •Safety, legislation and Regulations •Geology •Mine Site Construction and Management (underground & open cast)
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If you possess the technical knowledge and experience and the desire to contribute to the further development of industry capacity for the future, then this will be of interest to you. For further information on these roles, or to register your interest, please contact: Peter O’Sullivan Development Manager New Zealand School of Mines Tai Poutini Polytechnic petero@tpp.ac.nz Ph 03 769 9626 Cell 0274 318 581
Fire protection crucial for expensive mine equipment Protecting mining equipment from fire could save companies millions of dollars, says Steve Benseman from Fire Suppression Systems. “If companies have a complete burn-out of one of their key pieces of equipment, it could be out of action for up to a year which would cost them an awful lot of money.” Benseman says the lead time to replace highly specialised mining and construction equipment is currently around 50 weeks from when an order is placed to when it arrives in New Zealand. “That’s why it is imperative companies protect their existing machinery as the combination of large amounts of fuel, hydraulic oil, extremely hot surfaces and electrical components create an operating environment with an inherently high fire risk.” Benseman has 13 years experience in advising, installing and maintaining fire suppression systems at New Zealand mine sites. He says it is important companies deal with a specialist such as Fire Suppression Systems to ensure their systems meet the testing and certified standards required of the industry. “Some of our competitors dabble in fire suppression work outside their core business, but I believe we’re the only company in New Zealand to focus solely on mobile equipment fire suppression.” Fire Suppression Systems offers a full range of systems for the mining, construction, drilling, forestry and mobile equipment industries. Benseman is based in Auckland and employs three mobile technicians who operate from other parts of the country. Between them they visit clients’ often remote sites in fully set-up vehicles that enable them to provide complete equipment install, maintenance and servicing on-site.
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The expert team can also provide clients with advice on preventative measures and maintenance practices they can undertake to further reduce fire risk. Benseman is the New Zealand agent for foam fire suppression system Sandvik NFP 1000. Around 18,000 Sandvik systems are now being used worldwide, he says. The system is fully compliant with the new Australian standard AS5062. A key feature is that it is completely selfcontained so even if there is no electricity or person to operate the system it will still activate in the event of an emergency. Benseman says Fire Suppression Systems recently installed fire suppression systems to 115 machines for the Downer/Solid Energy Stockton Alliance on the West Coast, its biggest single install to date. “We continue to look after every other major mine in the country. “We pride ourselves on delivering reliable, proven products that give our customers peace of mind that their equipment and staff will be protected should a fire incident occur.”
Jimmy - ex Heat Exchanger Services can now be found here! We are able to Service all types and sizes of Heat Exchangers and specialise in heavy duty radiators, intercoolers and oil coolers for mining, earth moving, marine, industrial and transport applications.
Aluminium Oil Cooler, Intercooler and Radiator Specialists Industrial Radiators carry many makes of top quality radiators and intercoolers on the shelf. We can offer an exchange service to minimise “down-time” for those customers who are unable to wait for a repair to be done. James’s knowledge ensures the correct identification of the unit you require.
I have been a customer with James ever since he became established in NZ. In 1998 there was no one who could manage the size of radiators we have in the mining industry nor was anyone able or willing to turn them around in the same time frame as it took to change an engine out. I have been impressed with his ‘can do’ attitude & his ability to work within the tightest schedules & delivery times... even to the point of direct delivery to site if transport is going to be a problem. I have not experienced any deficiency in work quality nor required any re-work where Industrial Radiators have been involved & will continue to utilise & support their services for this industry. Cliff Webb, Group Maintenance Manager, OGL (NZ) Ltd
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EXCEPTIONAL LIFETIME VALUE FOR YOUR MINING OPERATION IT’S ALL ABOUT VALUE OVER YOUR MACHINE’S LIFETIME... Gough Cat congratulates Oceana Gold on the purchase of the Cat 789D Off Highway Trucks for Macraes, the first two in New Zealand. And, in exciting news, Gough Cat is investing in a new Component Rebuild Centre based in Christchurch to ensure our service to the mining industry continues at a leading level. The project is progressing well... stay tuned for further developments and information on Oceana Gold’s two new Cat 789D trucks in the next issue of Mining NZ. CONTACT THE GOUGH CAT MINING TEAM: Parts: 0800 93 39 39 Service: 0800 CAT HELP Web: www.goughcat.co.nz Email: mining.cat@goughcat.co.nz
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News » Chatham Rise Phosphate
Major investment in Chatham Rise Jo Bailey Chatham Rock Phosphate is moving rapidly towards its target to reach production in 2015, says chief executive Chris Castle. “The company has made remarkable progress over the past year, raising US$15 million in difficult market conditions,” says Castle. “Most of this has been actively invested in the project, leading to the mining licence application in September 2012 and the imminent application for the environmental consent.” NZAX-listed Chatham Rock Phosphate (NZX: CRP) plans to mine phosphate from the sea floor on the Chatham Rise about 450km east of Christchurch. CRP holds a prospecting licence over 4726 sq km of ocean, on the Chatham Rise, 450 km offshore. The area has a well defined deposit of 25 million tonnes of medium grade rock phosphate with an in-situ value of around $US4.3 billion. Castle says the market value of CRP is now $40 million. The company has attracted three new cornerstone investors – Subsea, Boskalis (which is also the project’s contract miner), and Odyssey Marine. Shareholder numbers have increased 50 percent and the company has already appointed three new directors in 2013. Castle attributes some of the company’s rapid progress to “fortuitous meetings” at a variety of conferences and industry meetings. “We met the right people at the right time, mostly by going to conferences.” He also commends New Zealand Petroleum and Minerals and GNS Science for showcasing New Zealand’s mineral development opportunities to the rest of the world at leading industry events such as the Prospectors and Developers Association of Canada (PDAC) conference in Toronto. Castle also made a presentation to guests at a recent New Zealand Government-hosted function at PDAC. He says CRP’s other expected milestones in 2013 will include the filing of an environmental impact assessment in the second quarter of the year. “We also expect that our proposed overseas
Chatham Rock Phosphate plans to mine phosphate from the sea floor on the Chatham Rise about 450km east of Christchurch. listing will finally occur, and expect to finalise further contract arrangements with Boskalis in the next few months.” CRP was granted a prospecting licence for the project in February 2010 and filed its mining licence application with New Zealand Petroleum and Minerals in September last year. It will require resource consents either under new Exclusive Economic Zone regulations or the existing Continental Shelf Act and hopes to be mining phosphate from the sea floor at depths of 400 metres by the end of 2014. CRP’s rock phosphate in its organic state is highly regarded as a product with many environmental benefits. When directly applied to pastures after being crushed and spread it is at least as effective as super phosphate, while significantly reducing run off into waterways. Extraction of the rock phosphate would provide a locally produced alternative to the one million tonnes of this material used annually in New Zealand which is primarily imported from Morocco. The balance of CRP’s production would be sold to export markets.
Most of this has been actively invested in the project, leading to the mining licence application in September 2012 and the imminent application for the environmental consent.”
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Scientist joins with CRP A former principal scientist at GNS Science, Ray Wood, has joined NZAX-listed Chatham Rock Phosphate (NZX: CRP) as its chief operating officer. Wood took up the appointment on April 2. Chatham Rock Phosphate Chief executive Chris Castle says Wood already had close links with CRP, which plans to mine phosphate from the sea floor on the Chatham Rise about 450 km east of Christchurch. “Ray and his colleagues at GNS Science have provided significant technical expertise to the project for almost three years. “One of their main roles has been to help us plan for and undertake exploration surveys which have collected geological and biological samples, and geotechnical, geophysical and bathymetry data.” Castle says Wood’s appointment is a “very big step forward” for CRP and underlines the leading scientist’s personal enthusiasm for the project. “Ray brings a huge amount of relevant experience to CRP. He was involved in research on the geology of the Chatham Rise as far back as the 1980s.” Wood’s wide ranging experience in geology and geophysics includes basin modelling, Continental Shelf delineation, crustal structure
Ray Wood determination, marine geophysics, seismic stratigraphy and swath mapping. He is a member of the Society of Exploration Geophysicists, American Association of Petroleum Geologists, Geoscience Society of New Zealand and is a member of the advisory and coordinating group of Ocean Survey 20/20. CRP continues to access additional technical support from GNS Science.
Technology » Aranz Geo
Taking NZ technology to the world A Christchurch firm working at the cutting edge of geological modelling technology is enjoying rapid growth as the mining industry looks to increase efficiencies. Jo Bailey reports.
T
he correction in the iron ore market has paid huge dividends for Christchurch 3D geological modelling software developers, ARANZ Geo. Chief executive Shaun Maloney says the downturn last August, which flowed onto gold and other commodities, has forced minerals companies to be more resource efficient and risk averse, creating a huge market for the company’s Leapfrog software suite. “The mining industry isn’t used to operating that nimbly, with generally three or six month mine plans in place. Sometimes it takes a major event in the market to create an appetite for change. “This is what happened in August and we were ready to offer the industry products with a strong value proposition.” Maloney says ARANZ Geo’s flagship product Leapfrog Mining and the new Leapfrog Geo software, which is the “next generation” in technology modelling geology and mineralisation, have benefits for users often measured in millions of dollars. “The modelling software is used from exploration right through every state of a mine’s life. The accuracy of the 3D geological and mineralisation models it produces allow users including some of the world’s leading mining companies and investment houses to make critical, time sensitive investment decisions that reduce risk.” In September 2010 ARANZ Geo developed and implemented an “aggressive” three-year growth plan and has already hit many of its milestones. These include 300 percent growth in user base and revenues, plus global supply agreements established with nine out of the 10 biggest names in the mining sector. ARANZ Geo has also established Leapfrog support offices in five key territories: Asia Pacific, Africa, South America, North America and Europe to support export sales that now account for around 99.8 percent of its overall business. “We decided to go with a global distributor model, working with a good bunch of like-minded distributors in each of the key regions. “This allows us to control the brand and method of sales and put some fairly stringent rules in place around service levels and reporting.” Maloney says the company’s South American market is “charging ahead” with strong growth in Chile, Peru, Colombia and Brazil. “We are establishing an office in Brazil to further support our existing distributors’ offices in Chile and Peru whilst supporting the growing customer
base in Brazil. A lot of exploration investment money is going into these economies which are proving a great market for us.” Maloney says the company’s growth and product development has all been customer-led. “We build products that customers want and they direct the way they want them to be developed. We’re not trying to guess the market.” In February ARANZ Geo launched the new Leapfrog Geo solution, which he says is a “completely different product and new way of working” compared to its flagship Leapfrog Mining package. “Leapfrog Mining is a box of tools designed for skilled senior users to create highly insightful, bespoke geological models. However there might only be one or two people in a company with the expertise to update these models, and this has created a demand from the market for a product that stays longer in the life cycle.” Maloney says Leapfrog Geo enables teams of people to create and work on the same model, adding multiple assumptions and parameters at the same time. “A Leapfrog Geo model can be passed on for years within an organisation. The models are built in a logical way which makes auditable. Future users can see how the model was originally created and what assumptions have been made.” Both products are selling very successfully and get regular updates and support from the ARANZ Geo team. Leapfrog software modelling packages for the geothermal and hydro sectors are also finding a global niche, he says. “We have a new release of the geothermal product ready to come out. A few weeks ago we sold our first license into Turkey where there is huge market potential for this software.” Maloney says the company plans to launch more “cool” products by the end of the year. With Leapfrog clients purchasing the software under annually renewable licenses, he says the company’s renewal rate is its biggest measure of success. “So far this year we’re tracking at around 93 percent renewals, which we are happy with in a downturn. To stay at this level we have to remain continually on top of our game in terms of the products and service we provide to both existing and new customers.” Late last year ARANZ Geo moved its 50-strong head office and R&D team into new purposedeveloped offices in Riccarton.
ARANZ Geo’s modelling software is used from exploration right through every state of a mine’s life.
ARANZ Geo chief executive Shaun Maloney: the company has found a global niche for its products.
We build products that customers want and they direct the way they want them to be developed. We’re not trying to guess the market.” This was the fifth and last move for the company during an unsettling period post-earthquake, which despite the challenges, had an unexpectedly positive impact on productivity, says Maloney. “Any complacency or comfort got shaken out of our staff pretty quickly and we found people
didn’t sweat the small stuff as much. We were literally crammed into small spaces so there were none of those situations where people would email someone in the next office. With open communication we moved through processes much faster and productivity went through the roof.” He says the challenge is to maintain this “winning formula” without comfort and complacency creeping back in. “We are lucky to have a great team who all want to succeed. Everybody wants to be part of a successful company and from a developer’s point of view there is nothing better than seeing a product you have created being used successfully out there in the market place.” The company’s efforts have been recognised with ARANZ Geo named as a finalist in the 2013 NZ Hi-Tech Awards in the Exporter of the Year over $5 million category. The company will come under the scrutiny of 12 international judges including Apple founder Steve Wozniak and Craig Nevill-Manning, director of engineering for Google in New York. “We’re chuffed to be in the top four and to be judged by individuals of this calibre. It is great recognition for the huge effort our team has put in.” Maloney is proud of the company’s achievements and says it is great to have a job he looks forward to going to every day. “Helping to build a great business around great products is fun because we’re creating a legacy. On a personal level it is fantastic to be able to employ Cantabrians, or brings others into Canterbury to become part of the fabric here. “Likewise the partnerships we establish with our global distributors help to secure their wealth, wellbeing and future,” says Maloney. “It is incredibly satisfying.”
Autumn 2013 » Mining NZ 13
Industry » Health and Safety
Taking stock of health and safety Improving health and safety standards and performance across the New Zealand mining industry is the key focus of industry body MinEx. Jo Bailey reports on the group’s progress.
W
ithin a few months the MinEx Health & Safety Council (MinEx) expects to provide some reliable statistical data around the health and safety performance of the New Zealand minerals sector, says acting chairman, Peter Atkinson. “We want to set some benchmarks and specific health and safety objectives to reach in the future.” The mining industry-led health and safety spokes-group has been collating and analysing incident and accident statistics over the last two years. “We started with a small base of the larger companies, but now collect quarterly data from virtually every medium to large company in the industry,” he says. These are operators involved in the exploration and production of aggregate, rock, sand, gravel, metallic minerals, industrial minerals, and coal. Prior to the involvement of MinEx there were no comprehensive industry incident or health and safety statistics available in New Zealand, he says. “That’s pretty shattering. The reality is that if you don’t know the current performance of your industry – how can you measure improvements?” He says considerable work has gone into gathering and analysing to data to identify issues and areas that need to be improved in the various sectors. “Unfortunately Pike River did that dramatically in the coal sector. “It’s sad it can take a disaster of this scale to get everyone on the same health and safety page.” In addition to national statistics, MinEx accumulates safety alerts and incident reports from mines and government organisations around the world that it collates and sends to its members on a weekly basis. “There are always lessons to learn from the management of incidents overseas. ‘We’ve had a lot of good feedback from our members about how useful this information is.” Atkinson says this ongoing project is a key focus of MinEx as it meets its objectives to improve and promote health and safety standards and performance of the minerals industry. The formation of the industry-led health and safety council was first mooted at a 2005 meeting which was attended by all sectors of the minerals industry.
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Peter Atkinson: working towards making the mining industry a safer place to work.
Atkinson says that one of MinEx’s first major tasks since its subsequent formation in 2006 has been the development of codes of practice and guidelines for underground and surface mines. “We combined the expertise and specialist skills of our members and others in the industry in working parties to draft each code of practice,” he says. “These were later industry reviewed; peer reviewed by the former Mines Inspectorate, and finally industry approved.” The ongoing development of codes and guidelines was delayed two years by the Pike River disaster and subsequent Royal Commission hearings, says Atkinson. “There was no point proceeding until the investigation was complete and the recommendations of the Royal Commission were announced.” The need for codes and guidelines was endorsed by the findings of the Royal Commission into the Pike River disaster and MinEx is now working closely wiith the Ministry of Business, Innovation and Employment on the development of new codes of practice covering the whole minerals industry.
The reality is that if you don’t know the current performance of your industry – how can you measure improvements?” It is also a key adviser to government on the drafting of new health and safety regulations in the mining sector and nominated a surface mining expert for the government-appointed expert reference group. Another significant project has been a review of Certificates of Competence issued to quarry managers to ensure they maintain the high health and safety standards required by managers and their workers maintain a best practice approach to health and safety on the job. Atkinson says the all-encompassing work of MinEx is of huge benefit also to smaller operators in the minerals industry. “A lot of the big companies have their own teams to look after health and safety. “However there are hundreds of small companies with just a few staff, who have no one
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solely responsible for these functions. “It’s vital we provide them with good information around best practice, and relevant codes of practice and guidelines to follow.” Atkinson, a director of Coromandel Gold Ltd, is one of eight on the MinEx board that includes representatives of several major companies and all sectors of the minerals industry, as well as the EPMU. Other industry representatives attend by invitation. He says MinEx plans to employ a full-time CEO this year, and is looking forward to working with MBIE on the development of new regulations covering the minerals industry. “We will also continue to expand our safety alerts and incident reporting in order to benchmark the performance of the New Zealand minerals industry against other countries.”
Industry » Health and Safety
Putting the house in order: moving forward from Pike River We have to take stock
New Zealand’s new Chief Inspector of Mines, Tony Forster, is determined to help the industry lift its game. Jo Bailey reports.
and say disasters such as Pike River are unacceptable - that people have a right to
T
ony Forster, the personable Scotsman now New Zealand’s Chief Inspector of mines says he is here to engage with high hazard workplaces rather than “wave a big stick”, at them. “The role of the High Hazards Unit is to benefit the industry, not to browbeat it,” says Forster. “The only we can truly identify and understand the high level issues that wreak big societal damage is to get out there and engage constructively with the operators.” Forster has worked in the mining industry in the UK for over 40 years and was Her Majesty’s Principal Inspector of Mines before taking on the New Zealand contract. His grandfather and uncle were both killed in mining accidents in the UK, so he brings a unique perspective to the role. “Mining has a poor health and safety record internationally, with the UK’s as bad as any back in the day. “It’s important that we can learn from previous mistakes to really raise the game.” He says “honest dialogue and honest exchange” are keys to meeting the current challenges facing high hazard industries in New Zealand. “We have to take stock and say disasters such as Pike River are unacceptable - that people have a right to come to work in a safe environment. “By working together I believe we can create mines that are both safe and productive. I don’t see these things as being inconsistent with each other.” He says the local mining industry simply can’t afford to have one more disaster, whatever the scale. For me, that’s non-negotiable.” The mining tragedy within his own family didn’t deter Forster, or his brother Michael from joining the industry. “I started as a 17-year-old coalface production worker. My mother was just as proud of me then as she was many years later when I deputised as the Chief Inspector of Mines in the UK.” Forster’s family is from Prestonpans, a small coastal mining town near Edinburgh, Scotland, where he says mining has done “both good for, and damage to” the community for nearly 1000 years. “Prestonpans has an incredibly rich mining history. I guess you could say it’s embedded in our DNA.” Forster holds a Master of Science in Occupational Safety and Health and is a chartered Mining Engineer, a fellow of the Institute of Materials, Minerals and Mining and a member of the Institute of Mining Engineers Technical Committee.
come to work in a safe environment.”
Tony Forster: “It’s important that we can learn from previous mistakes to really raise the game.” In his previous role with UK HSE, he was chief adviser on UK mines rescue and emergency planning. He is also a Board Member of the International Mines Rescue Body and is a Principal Judge at International Mines Rescue competitions. Forster and his wife Valerie have moved to New Zealand for the duration of his contract as Chief Inspector of mines for the Ministry of Business, Innovation and Employment’s High Hazards Unit. The unit was established to strengthen the capacity and expertise to inspect mines and ensure safety in the mining industry in New Zealand.
Forster is in charge of a team of specialist inspectors and is leading the Ministry’s health and safety regulatory work in relation to mines including both underground and opencast. A few weeks into the role Forster has identified several factors that have impeded New Zealand’s health and safety record, including the country’s size and isolation. “There are some good people in the mining industry here, but not great depth in terms of the mining expertise you might find in larger countries. “The industry here is also lacking strategic
health and safety support from off-shore. Part of my job is to build stronger links between the New Zealand industry and health and safety expertise overseas, particularly from Australia and the UK where I obviously have very close ties.” He says New Zealand’s natural isolation has also resulted in the extractive sector suffering from being a little too parochial and inward-looking. “Some health and safety practices that have become embedded here may be at odds with what is considered as an international standard. “But I believe the New Zealand mining industry has the tools, abilities and talents to put its house in order. If I can play a part in lifting the game and meeting the challenges presented by the Royal Commission Report I’d be very happy.” Forster says 42 workplaces have been identified as falling under the High Hazards Unit. Intervention plans are being developed for around 20 of these. He says the first goal is engage constructively with each organisation to educate them of the High Hazard Unit’s role. “Ultimately as a regulator we have to maintain our ability to enforce but that’s not the first place we go. We are about explaining the situation in a professional way, and assisting operators to look at their business and answer some stark questions about their health and safety practices.” Forster believes the new Crown agency being proposed to encompass the High Hazards Unit, Mines Inspectorate and several other health and safety organisations is a good thing. “Having a cohesive rather than splintered group can promote engagement with the New Zealand workforce at all levels around health and safety issues. Taking stock is the big challenge that was thrown out by the Royal Commission and something that is essential if we’re going to do justice to the 29 men who died and still lie underground at Pike River.” As he cements himself in the Chief Inspector’s role, Forster says the mining industry has provided him with a “tremendous life, great opportunities, great friends, first class training and a good grasp of what’s important”. “I believe in mining and the role it can play as a significant contributor to the economy when it is done sensibly, responsibly and safely.”
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Coal » Bathurst Resources
Bathurst encouraged by decision Jo Bailey Bathurst Resources finally has some good news regarding its proposed Escarpment Mine on the Denniston Plateau. Following a lengthy hearing, an interim decision by the Environment Court indicates it is likely to approve the project once it is satisfied the company can meet a number of environmental protections recommended by expert witnesses. Bathurst chief executive Hamish Bohannan said it was “great news” for the company that has endured a time-consuming appeal process since its resource consents for the project were first granted in August 2011. “The judge and commissioners did a fantastic job. They had to capture a lot of complicated technical data and cover a number of issues that came up over the eight or nine weeks of hearings. “In the end we believe they have arrived at a well-balanced decision - we are very happy with the outcome” By April 19 Bathurst was required to come up with a proposed timetable for the process of turning the large number of environmental protections recommended by the expert witnesses into a plan. Bohannan says the work requested by the Court falls broadly into “two bags”. “The first is to finalise the details of the conditions which includes sorting them into logical environmental groupings; and to come up with some affirmative language that turns ‘should’ into ‘will’ and ‘must-do’. “The second is to lock in our intention to set aside 745 ha as a reserve. This is part of our bigger plan for the Denniston Plateau.that will allow mining in some areas on the Plateau and protection for others in order to conserve the ecology of this area.” Another important part of the arrangements is to agree how rehabilitation would occur on the Plateau after mining is complete. Bohannan hopes the court-ordered process will enable Bathurst and the environmental groups opposing the mine to be able to agree a common position. However the Royal New Zealand Forest & Bird Society, which was also required to submit
Bathurst Resources Cascade mine on the West Coast - the company is anticipating further growth. back to the Environment Court by April 19, has indicated it plans to continue to fight the proposal. Although there is still “work to do and things to sign off on” Bohannan said the court’s decision is a “great step forward” for the company, and particularly its shareholders and staff.
It’s been a tough couple of years for the Coast so it will be good to be able to provide some certainty around the project.”
He says it is too soon to say when development of the Escarpment Mine could start. However the company is poised to proceed immediately once it gets the final go-ahead. “Our legal counsel has been busy working on the issues required by the court, which will then manage the process and decide on the timetable for our response. We should get a feeling fairly shortly about how things will proceed.” He says it is a good news story and much needed boost for the West Coast. “It’s been a tough couple of years for the Coast so it will be good to be able to provide some certainty around the project.
“We’ve already picked up a few additional guys at our Cascade mine, and look forward to recruiting more local people once Escarpment gets the green light.” Bohannan said the company expects to lift its workforce from 100 to 400 as production at Escarpment ramps up, with hundreds of additional jobs created in the local community. The mine is expected to inject around NZ$1 billion into the country’s economy over six years of production. This would include more than NZ$100 million each year in payments to employees, suppliers, contractors and transport providers.
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Coal » Bathurst Resources
Company set for switch to New Zealand The incorporation of a New Zealand holding company is the next step in Bathurst Resources re-domiciling its operations from Australia to New Zealand, says chief executive Hamish Bohannan. “We’ve received advice from tax lawyers, and plans to set up the new company are underway.” The existing company is listed on the ASX and NZX and was formerly based in Perth. “It is a true move,” says Bohannan. “Almost our entire team has been New Zealandbased for quite a while and we intend to close our Perth office which is currently empty.” All shareholdings will eventually be transferred to the new company, Bathurst Resources (New Zealand), which will be listed on both stock exchanges instead of the existing Australian-based company. Bohannan says the company is poised to proceed with significant development in New Zealand and adds the provisional approval from the Environment Court for its Escarpment mine is “great news”. However Bathurst’s overall operations remain in a “holding pattern” until it receives the final goahead for this project. “We have a lot of development plans to implement once we get some certainty around Escarpment.” These plans include further development at the Westport wharf, where in conjunction with Westport Harbour Ltd, the company recently completed construction of a $5 million storage shed capable of storing 9000 tonnes of coal. “The shed was commissioned on schedule before Christmas. We are currently using it to store
Bathurst Resources has completed construction of a $5 million storage shed at the Westport wharf capable of storing 9000 tonnes of coal. production from Cascade in anticipation of getting up to full production with Escarpment, hopefully later in the year.” Bathurst plans to spend a further $30m to increase the capacity of the Port of Westport as “production from Buller increases over time”. The company is also intending to invest about $70m in an aerial conveyor system to bring the coal off the plateau, replacing truck haulage with an environmentally friendly transport system that
will put green (gravity generated) power back into the grid. Bohannan says he is pleased with progress at Cascade mine which produces semi-soft coking coal for the global steel industry and ferro silicon markets; and supplies a significant amount to Holcim New Zealand for cement manufacture. “The team should be very proud of Cascade, which is a good, tidy and safe mine. We took on an additional 15 staff there late last year, but won’t
be making any more appointments until we can progress with Escarpment.” Bathurst’s Takitimu thermal coal mine in Southland, operated by subsidiary company Eastern Coal Ltd, is also going well, he says. “We are very pleased with production and the team is working well. “We recently signed an agreement to acquire the New Brighton leases which join our existing leases in order to extend the mine life there.”
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Autumn 2013 » Mining NZ 17
Gold » OceanaGold
Positive results from Birthday Reef
Didipio mine commission “on track”
Jo Bailey The third round of results from OceanaGold’s deep drilling programme at its Blackwater (Birthday Reef) gold project have resulted in an updated resource estimate. OceanaGold’s head of exploration Dr Michael Roache says the company is “quite comfortable” with its increased inferred resource estimate of 0.25 Moz to 0.9 Mt @ 21g/t Au for 0.6Moz of gold for the project, located in the Reefton Goldfield. “The Blackwater mineralisation is somewhat unusual in that it displays a high degree of continuity and consistency along the strike, with depth, thickness, and grade. It is not something we commonly encounter in this style of mineralisation often but is extremely positive from both an explorationists and miners’ perspective.” In the first quarter of 2013 OceanaGold successfully intersected the Birthday Reef in drill hole WA25 parent and again in daughter hole WA25A designed to test the northern strike extent to the Reef well beneath the historical workings. Roache says the results are consistent with the historically mined widths and grades and indicate that the Birthday Reef continues for at least 680 metres vertically below the last worked level of the Blackwater Mine which was established in 1906 and closed in 1951. “Although we have drilled a relatively small number of drill holes, I am confident we won’t get any unpleasant surprises in terms of potential for contained ounces given the results of the drilling programme and the wealth of historical production data,” says Roache. The Blackwater Mine remains the largest historical producer in the Reefton Goldfield, accounting for more than a third of the two million ounces of gold produced from hard rock sources in the region. It was known to produce around 1,000 ounces of gold resource per vertical metre. Roache says drilling of these “deep holes” below the old mine workings required specialist drilling techniques “It was a technically challenging process to drill hard rock down to these depths, with the earlier drill holes drill holes intersecting Birthday Reef at more than 1.6 kilometres down hole.” He says it will not be practical or economic for OceanaGold to drill out the Blackwater resource to an indicated level from the surface, so any additional drilling required to further define the existing inferred resource, or expand beyond it, will “most likely” be done from underground. OceanaGold is also exploring along the strike of the Birthday Reef to assess the potential for
• • • • •
OceanaGold has reported encouraging results from its exploratory drilling programme beneath the historic Blackwater Mine at Reefton. structural off-sets, however Roache said he was unable to comment on any results as yet. The next step is for OceanaGold’s project development team to undertake a pre-feasibility study to assess the potential viability of the project and decide whether to proceed to a full feasibility study or not. “The prefeasibility study will expand on previous conceptual mining scenarios and include a mining
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OceanaGold is on track for the full commissioning of its Didipio gold and copper mine in the Phillipines. Commenting on the company’s full-year result, released in February, OceanaGold Managing Director and CEO, Mick Wilkes said the company is ramping up commissioning at Didipio in what he describes as a “transformational year” for the miner. “The focus of commissioning activities is now on increasing copper and gold recoveries and ramp-up of the plant throughput. “We are on track to deliver on expectations to mill 2.5 million tonnes at Didipio in 2013.” Gold sales for 2012 were 230,119 ounces with full year production of 232,909 ounces exceeding the 2012 production guidance range of 225,000 to 230,000 ounces. OceanaGold spent $14.9 million on its exploration program in 2012 mostly in New Zealand where it continued to drill out the Blackwater deposit with favourable results. Wilkes said the company was “very pleased” with its performance in 2012. The fourth quarter production of 76,844 ounces of gold, was a 55% increase from the third quarter 2012. Fourth quarter gold sales were 69,761 ounces and cash costs were $638 per ounce. Gold sales for the full year were 230,119 ounces resulting in cash costs of $940 per ounce sold, which was lower than the cost guidance range. “New Zealand operations had a strong fourth quarter as planned and Didipio continued to achieve each key milestone on schedule including the start of commissioning in October and the completion of construction in December,” said Wilkes. “We’ve continued that momentum into 2013, which is a transformational year for us as we ramp-up commissioning at Didipio and transition into steady-state operations.”
method options study targeting a production rate of 50,000 to 60,000 ounces of gold per annum.” Roache expects this study to be completed later in the year. “We are very pleased with the continued success of our exploration programme at the Blackwater gold project, with the remarkable continuity and consistency of the Birthday Reef giving us strong confidence moving forward.”
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18 Mining NZ » Autumn 2013
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Gold » OceanaGold
Safety workshop proves a winner Jo Bailey “Like kids in a big candy shop.” That’s how Peter Faithful of NZ Safety, Dunedin, describes the reaction of participants to a recent hands-on safety workshop at OceanaGold’s Macraes operation, when they were able to testdrive the latest safety equipment from Australian manufacturer Capital Safety. Faithful and OceanaGold’s emergency response coordinator, Steve Renton, organised the twoday workshop that was attended by the mining company’s rescue teams and other Search and Rescue personnel from the North Otago region. “Running a workshop like this was all new territory but it went extremely well,” says Faithful. “We brought Capital Safety’s national training rescue manager Ashley Campbell over from Australia and New Zealand national sales manager Craig Hendrie down from Auckland to educate us on the latest, top-of-the-range technical rescue equipment. It was fantastic to see it applied to simulated real-life situations,” he says. Campbell says Capital Safety was pleased to have the opportunity to bring awareness to its rescue products and their applications. “The workshop was a great initiative. The best way to learn is to get down and dirty with the gear.” A number of different rope rescue techniques were demonstrated and practiced – such as ascending, descending, belaying and setting up high directionals. Capital Safety also brought over an OzPod cantilever gantry with the capability to reach over the side of a cliff to rescue and haul someone up. There were three main stretcher recovery exercises – the first to recover an incapacitated dump truck driver; the second using high directional ropes and the OzPod; and finally the third utilising a helicopter to carry out a high wall rescue.
The best way to learn is to get down and dirty with the gear.”
“It was great to get out on site with our customers and show them the people who make the gear also have the nouse to use it,” says Campbell. “Everyone was getting into it and shared a lot of ideas and information.” Steve Renton says the helicopter rescue was one of the highlights. “The Australians were able to experience a fairly new rescue method we’ve developed with Central South Island Helicopters and other search and rescue organisations using a helicopter with undersling and long strop. “It was great to put the technique into practice and have it peer reviewed by others in the industry.” Renton says getting buy-in from other emergency services and search and rescue personnel from the region was a huge advantage. “There is already a lot of interaction between the different groups in the region to make sure we are working to the same systems and methodology. “We’ve had several outside rescue experts along to other on-site emergency exercises and recently four OceanaGold rescue staff participated in a Coordinated Incident Management System course at the Oamaru fire station.” Several North and East Otago emergency personnel also have multiple rescue capabilities, he says. “Two of our North Otago police and St John’s ambulance crew also volunteer as search and rescue chopper crew. Oamaru Police Highway Patrol Sergeant Peter Muldrew also heads North Otago Search and Rescue.” NZ Safety’s Faithful says the success of the workshop is something he would be keen to replicate with other organisations. “By the end of the course the guys were a lot more familiar with NZ Safety as a leading distributor of safety products, including the Capital Safety range,” he says. “The workshop gave both companies the opportunity to cement their relationships with OceanaGold and show that we go the extra mile to educate ourselves and our customers.” Ultimately, all three companies have the same aim, he says. “We want people to get home safely at the end of each day’s work. It’s as simple as that.”
The hands-on safety workshop at OceanaGold’s Macraes operation, gave the participants a chance to test-drive the latest safety equipment from Australian manufacturer Capital Safety.
Autumn 2013 » Mining NZ 19
Meet the newes Atlas Copco… help Success with high-tech rigs Automation technology finding wide acceptance Tyler Berens has spent the best part of a year travelling around the world to talk to, and listen to, Atlas Copco blasthole drill rig customers. Berens sees a consistent trend regarding the role of automation in the industry’s future. Far from being the bogey word it was to most miners when Atlas Copco introduced its RCS computerised control system for drilling rigs in the late 1990s, automation is now being widely embraced. Berens says the fast rate of change has been evident even in the past 12 months. “The customers know what they want from automation, which is good,” he said. “I think it’s [automation technology] appealing to any stakeholder in the mining environment – whether that’s an operator, a safety officer, a mine manager, or even a mining investor. There are opportunities to eliminate risks normally associated with certain mining activities; there’s the prospect of better efficiencies and lower operating costs; and, on a broader scale, there’s the opportunity to build a greater quality of life for the workforce. So I don’t see the industry’s embrace of automation slowing down in the foreseeable future. “In fact, I think peoples’ concept of automation is certainly maturing greatly. Just in the past year that I’ve been with the company I’ve seen it mature rapidly.”
Atlas Copco’s RCS has been shown to not only increase drilling rates and economy but also deliver a range of other valuable benefits, from rapid fault detection and lower maintenance costs, to higher drill rig availability and utilisation. Fourth generation RCS automation in the form of RCS4 delivers even more advanced tools to aid mine planning and managing the drilling process, including wireless online data transmission between rig and site office. This is achieved with Atlas Copco’s intelligent PC-software that enables RCS-equipped rigs to communicate with a site office while referring to the same constantly updated plans. “They can go as far as they want with the technology,” he said. “Atlas Copco’s modularised approach means the customer has the core control system on the machine, and they can get plenty of benefits from that. As their requirements grow and/or the comfort factor grows, they can add more options, such as high precision GPS for being able to get logs off the machine, and it’s just a plug and play.
Relative newcomer to the Western Australian mining contractin Watpac, has taken the application of technology in its drilling an operations to a new level at the historic Hill 50 gold mine near M Magnet in the West Australia’s mid-west. Looking to build its profile in the highly competitive WA market, Watpac has invested heavily in state-of-the-art drilling equipment and technology at Hill 50 while elsewhere in the business it has not been shy about embracing alternative haulage and mining fleet. Watpac mining manager Brendan Vaughan said the SmartRig with its onboard computerised Rig Control System (RCS) and automation capabilities, including satellite and computer-based auto-navigation, was delivering a range of benefits at Mount Magnet. Watpac has four Atlas Copco F9Cs at Hill 50, where it is contracted to move 24 million bank cubic metres of material over 60 months. Complex geology and old underground workings made selective mining of ore bodies, and around past workings, imperative and from a drill-and-blast viewpoint. Watpac wanted a top-hammer drill rig capable of drilling 89-127mm-diameter holes and settled on a standard 115mm with the F9C. In a competitive contracting market Vaughan believes there is an increasing role for new technology and innovation that favourably impacts operating costs. “One of the selling points to the client was that we were going to bring this innovative drill to site and use the smart drill capability,” he said. The need for absolute drilling precision was a primary reason for this.
Watpac trainee mining engineer Andrew Thomas, who has been studying the operation of the drills at Mount Magnet, said drilling plans were exported directly from Surpac mine planning software into the IREDES open-source file format program onboard the rigs. From there, with the aid of the navigation system, all holes could be drilled semiautonomously or, ultimately, autonomously. Meanwhile, the onboard software was gathering a lot of useful information. “Afterwards once we’ve drilled we put the plan back into this software and get our measures. We can see which holes have been drilled, the time taken to drill the holes,” “In a competitive Thomas said.
contracting marke
“During drilling Vaughan believes using the an increasing role HNS – the technology and inn hole navigation system – the that favourably imp operator can operating costs.” track and locate the hole using the uploaded drill pattern and the GPS location of the bit. The HNS provides both northings and eastings of the collar position and calculates hole depth from this – so you’re not drilling hole depth you’re drilling to the RL, which helps with the accuracy and keeping our floors clean.
“Technology is certainly one of our core competencies, so I would say that our R&D – which takes a range of forms – is keeping us at the forefront in this field,” he said.
“The HNS automatically selects the mast angle, so if you’re drilling a batter or buffer, it selects the angle for you and will tilt the mast, which means no margin for error when you’re drilling batters.
“So we’re really showing that R&D isn’t just a backroom activity; we’re bringing it out to the market in the form of initiatives such as the application centre in Perth.”
“Post drilling, we get a number of pieces of data from the rigs. We get all our metres, and the start and finish times for each hole, and we also get an idea of penetration rates. The data can be directly
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Tapping into a hot market The drill rig making a big name for itself on Queensland’s gas-rich Bowen and Surat basins is now being deployed on a different, deeper errand in West Australia. All going well, JSW Australia’s new RD20 XC high-powered compact, hydraulic top-drive rig will have plenty of work ahead of it – with future coal seam gas targets in Western Australia not out of the question either.
formatted straight into Excel, so you can easily get all your reconciliation data out for each shot. And we can submit this data to the client for services to get an indication of hardness, which helps us get paid.”
et there is for new novation pacts
Thomas said initial GPS set-up and software issues meant the introduction of the technology wasn’t “all smooth sailing”. But the problems had been satisfactorily resolved.
Vaughan said wireless transmission of drill patterns to rigs, rather than using flash cards or USBs, was one improvement opportunity being examined. Semiautonomous drilling, enabling a single operator to oversee the operation of several rigs at once via a pit control trailer or station, or even complete other tasks while machines were drilling to their programs, was another appealing future option.
For now, the focus is geothermal energy and in particular the sedimentary formations about 1000m below Hale School, in the Perth western suburb of Wembley Downs. The school is planning on upgrading its swimming pool and facilities and has opted for the use of sustainable and environmental friendly energy that is geothermal. The project consists of the construction of a deep geothermal bore that will procure warm water to run through heat exchangers; once the heat is extracted from the water to use for pool heating, the cooled water is re-injected back into a shallower part of the aquifer via an injection bore. JSW has been contracted to drill, construct and test both deep bores in a four month time frame. The rising geothermal energy tide in WA and nationwide, with its attendant demand for deep drilling, is buoying the prospects of companies like JSW. “We’ve come from being a business that was almost purely mining related to now operating significant projects in the water well and also this geothermal activity,” said
and Christ Church Grammar, in adopting geothermal swimming pool heating when the project is completed. YearThe RD20 XC unit joins three Atlas round use of the pool at minimal energy Copco TH60s in JSW’s fleet. Arguably costs and with minimal CO2 emissions the world’s most successful shallow oil – at a time when state electricity tariffs and gas rig in the 120,000 lb (53 metric continue to climb and tonnes) class, the environmental impact “Many private schools, RD20 has become becomes a major councils and individuals a fixture on concern– is the principal are using geothermal Queensland’s coal benefit of the exercise. basins, where coal technology, with heat seam gas drilling exchangers or heat pumps, “This sort of project has, figuratively, for heating and cooling…” has become fairly commonplace so it’s exploded in recent proven technology, so to years. More than speak,” he said. 250 RD20s are operating worldwide and now two machines are working in WA. “Once the hole is logged, consulting hydro-geologists work out the depth The highly mobile rig with its rapid setto set the screens – that’s probably the up capability is flexible enough to adapt most crucial part of the project.” to almost any location, according to Westcott. “I’m thinking that geothermal drilling activity is going to keep going for a while It has a patented, carriage feed system yet,” he said. and detached-table design for exceptional performance and economy, and the Many private schools, councils and structural strength to handle the toughest individuals are using geothermal drilling conditions. The table can handle up technology, with heat exchangers or to a 30-inch drill casing. heat pumps, for heating and cooling of swimming pool, buildings and domestic Back at Hale, and JSW has just started housing across Australia. Shallower drilling the first pilot hole to assess drilling can supply low temperature temperatures and the geothermal water for cooling, so it’s not just about potential of the Yarragadee aquifer the heating capacity of geothermal beneath the school ground. Hale energy. School will join a number of other metropolitan schools, such as St Hilda’s Tim Westcott, JSW’s veteran water well division boss.
For more information on the complete range of products and services Atlas Copco and First Break can provide, please email: brent.paulsen@firstbreak.co.nz, or visit www. firstbreak.co.nz Authorised Distributor
Gold » OceanaGold
Fibre-optic network lifts production Jo Bailey OceanaGold is producing an extra 160 tonnes of ore each day at its Frasers Underground mine following the installation of a new cutting-edge fibre-optic network. The fibre-optic cable stretches around 7000 metres from the underground mining area to the surface. It allows loader operators to control the boggers remotely from the surface, rather than from cubicles a couple of hundred metres from the underground mine workings. “The new technology means we can operate continuously during shift changes or when everyone pulls out of the mine during blasting,” says Matt Mengel, underground mine manager of the Macraes Operation. “By squeezing out those extra few hours of production, when there’s no one down in the mine, we’re able to produce an extra 20 buckets of ore a day,” says Mengel. He says the half-million dollar investment in the technology will be paid back by mid-April due to the increased production. “We used the new technology for the first time on Christmas Day and it’s run smoothly ever since. It’s also a lot easier on the staff. “Some of the operators were a bit sceptical to begin with but now they love it. It’s more like working in an office than underground and they get to come up a bit earlier too.”
The new fibre-optic cable allows loader operators at OceanaGold’s Frasers Underground mine to control the boggers remotely from the surface. Aotea Electrics supplied the tough fibre-optic cable required for mine site. It stretches several kilometres suspended on power lines before going underground to the mine workings, which are 200 metres below sea level and around 700 metres from the surface. Perth-based remote control technology specialists RCT did the installation work.
Mengel says the capability of the remote control technology can be extended further if OceanaGold decides to progress. “The next step is to have distance sensing lasers fitted to the boggers. “These can sense potential hazards and allow the machines to steer themselves away. There is less likelihood of accidents, so less stress for the remote operator.
The machine effectively drives itself underground.” The company is considering this option but hasn’t made a decision yet, says Mengel. Regardless, he is amazed at the technological advancements now available to the industry. “The technology is moving forward rapidly and running off in interesting directions we couldn’t have imagined a few years ago.”
RedBull wins OceanaGold explosives contract In October 2012 RedBull commenced operations on the largest explosives supply contract ever awarded in New Zealand. OceanaGold appointed RedBull to supply explosives to its operations at Macraes Open Pit, Frasers Underground and Reefton Open Pit gold mines. A key highlight has been RedBull’s performance throughout the mobilisation of this major project which included the construction of a new emulsion and ANFO plant at Macraes Mine. These projects were completed on time despite significant logistical challenges. RedBull managing director Peter Shapiro
22 Mining NZ » Autumn 2013
says it was an intensive six-month period to complete the mobilisation. “The plant construction and equipment procurement were challenging in the time available, but it was the import logistics which posed the greatest test”. This included coordinating the importation over 200 containers of various Dangerous Goods from eight different countries. The new emulsion plant built by RedBull at Macraes Open Pit mine will supply 10,000 tonnes of bulk emulsion explosives per annum. “This is a world-class facility built to the best and safest international standard,” says operations director Mike Henderson.
“We are making a really high quality explosive and results so far have been very impressive”. The manufacturing process is similar to RedBull’s Kopako plant constructed in 2009. Both projects utilised the expertise of American designers, ZMW of Philadelphia and New Zealand equipment fabricators, Sabre Engineering. Notably, the Macraes plant was built in record time. From contract award in April 2012 RedBull spent two months on engineering design and procuring the long-lead items. This was followed by two months of fabrication in Auckland and a rather intense
two-month assembly and commissioning period on the mine. “This was a major undertaking by any standard for such a short period. But we did it!” says Henderson. “The elements were not always kind to us and we were not used to working in the driving horizontal sleet and snow and high winds on the site”. The new ANFO plant is a ‘stand-alone’ unit which produces ANFO and varying blends of Low Density ANFO for Frasers Underground operations. The plant enables ANFO and LD ANFO to be made independently of other equipment and this has improved MMU utilisation for the mine.
Gold » Newmont Waihi Gold
Appeal expected on Golden Link Karen Phelps
Correnso is a potential underground mine in Waihi East which, if it proceeds, will replace the existing underground Favona and Trio mines.
Mine increases efficiency Newmont Waihi Gold has been enjoying increased efficiency ever since a Loadscan Load Volume Scanner became part of operations late last year. Newmont Waihi Gold underground manager Charlie Gawith says a 10 per cent increase in truck factors had been noticed since the Loadscan system was introduced. “This is a case of 10 per cent more rock being moved for the same cost. A 10 per cent increase in total movement in a year is a huge increase in efficiency,” says Gawith. “It means trucking costs are effectively being reduced by 10 per cent in a year and that is significant.” Historically 30-tonne articulated dump trucks used at the Waihi Underground were carting 20 tonnes; now they are carrying 22 tonnes. Newmont has opted for a Loadscan fixed installation scanner that is based at the mine’s portal, scanning all trucks leaving the underground and giving drivers real-time feedback as to the volume of their loads. All the trucks have ID tags that are read by the Loadscan system. The trucks are scanned once when empty to give the tub profile and thereafter when they are loaded. Information on the volume of each load is immediately visible to the truck drivers on a display screen at the portal. “This gives our truck operators / drivers an immediate indication if they are being fully loaded by the bogger operator underground,” says Gawith. “From the portal they proceed to the ore stockpile area and then return to where they were loaded underground. They can then, if necessary, have a conversation about
24 Mining NZ » Autumn 2013
It is a very, very reliable system. It is accurate, has been easy and seamless to implement and its reliability is very impressive.” whether they have been loaded up properly, based on the scanned information they have just received,” he says. “Loadscan’s capabilities are driving a culture here in terms of ensuring trucks are fully loaded. Hence we have increased our trucking factor – the amount we declare a truck is carrying when it comes up from underground.” Gawith says Newmont Waihi Gold is a company renowned for the installation of state-of-the-art systems and the Loadscan volume scanner is one such example - and an excellent one. “It is a very, very reliable system. It is accurate, has been easy and seamless to implement and its reliability is very impressive. “The support supplied, on the odd occasion we have needed it, has also been impressive.” The Loadscan volume scanner is used in operations at the mine 365 days a year, 24 hours a day.
Newmont Waihi Gold is anticipating the decision of the commissioners on The Golden Link hearing (which includes Correnso) to be appealed to the Environment Court despite the fact the decision has not even been made yet. “In a situation such as this with complex evidence it is highly unlikely that everyone will get the outcome they wish,” says Newmont Waihi Gold external affairs coordinator Kit Wilson. “It has become the norm that decisions under the Resource Management Act will be appealed and so this is what we are anticipating.” Golden Link, which could extend gold and silver mining operations to at least 2020, comprises two parts. The Martha Exploration Project is a small underground exploration programme located within the existing Martha mining licence area and the pit rim. This only requires a variation to the existing Martha mining licence. The more contentious part of the proposal, Correnso is a potential underground mine in Waihi East which, if it proceeds, will replace the existing underground Favona and Trio mines. This requires consents under the Resource Management Act to go ahead. Should the Correnso proposal proceed, underground mining would occur at considerable depth below some properties in Waihi East. Wilson says that depending on the decision, the appeal could be made by a variety of parties including objectors and Newmont Waihi Gold. The hearing was adjourned late last year after the commissioners provided 26 questions for Newmont Waihi to answer with subsequent input from submitters and the Hauraki District Council.
Gold » Newmont Waihi Gold
Newmont Waihi Gold is hoping to extend the life of its mining operations.
A range of supplementary material was presented on vibration, the Property and Community Investment Policy and Gladstone Road ground movement. The hearing reconvened in March 2013 and was adjourned again to give the commissioners the opportunity to consider the detailed and complex evidence presented from all parties and request any additional information. Wilson stresses that an adjournment is quite common in cases where a significant body of material must be worked through. The commissioners have subsequently advised that the hearing has been officially closed. The commissioners’ decision is due to be presented on May 6. Once the decision is published a 15 working day appeal period will follow during which all parties who submitted on the application can
It’s important all the hearings are held in Waihi so all local people can attend if they wish.” decide whether they wish to appeal part or all of the decision to the Environment Court. Any appeal would be heard later this year. “It’s important all the hearings are held in Waihi so all local people can attend if they wish,” says Wilson. “We don’t regard these things as a delay, we regard it as part of the process. “It’s democracy in action.” Geophones being deployed on Gladstone Road as part of the investigation into ground subsidence.
Gladstone Rd investigations Newmont Waihi Gold now understands its activities played a part in ground settlement issues at Gladstone Road, which was one of the points that the commissioners required additional information on during the Golden Link hearing. “In December we didn’t initially believe we could have played a part in the ground settlement issues,” says Newmont Waihi Gold external affairs coordinator Kit Wilson. “Subsequent investigations have highlighted that indeed Newmont Waihi Gold’s activities were a contributing factor. “Preliminary conclusions as to the cause of the ground subsidence are that groundwater levels at Gladstone Road were lowered due to seepage through an ungrouted section of a piezometer hole drilled by Newmont Waihi Gold,” he says. Wilson says that the company believed that hole had been grouted as specified but subsequent investigations proved this not to be the case . The reduction in groundwater pressure caused settlement of underlying very weak
ignimbrite and possibly weak zones of overlying strata and fill. “The Gladstone Road subsidence was a first-time event resulting from of a combination of circumstances,” says Wilson. “In over 30 years of drilling in and around Waihi this is the only time this type of event has occurred. “In future all drillholes will be grouted to a depth below the top of the hard andesite rock where the orebodies are found. This will stop water seepage,” he says. “If the Correnso mine goes ahead a minimum cover of andesite above the workings would provide a sealing layer above the mine in case there is more permeable material above. There would also be restrictions of mining near existing drillholes for the same reason.” Investigations continue to determine the cause of the ground settlement including re-drilling the original piezometer hole and probing the area with ground penetrating radar and geophones which use sound from defined sources to determine subsurface composition.
Autumn 2013 » Mining NZ 25
Gold » News
Talisman ready for next step Earnscleugh dredge to return Karen Phelps New Talisman Gold Mines Limited (formerly Heritage Gold NZ Limited) says it is encouraged by further studies of the Talisman site. The company has just completed a prefeasibility study, which has found that a first-stage development of an underground mine at Talisman could deliver a cash surplus of NZ$23.4 million during its five-year life. The study also concluded that the mine would have an all in cost, inclusive of capital (C3 cost), of US$1075 per ounce. Previous underground drilling and sampling has delineated a mineral resource of 204,760 oz gold at a grade of 6.9 g/t and 798,840 oz silver at a grade of 27 g/t. New Talisman’s executive director Matt Hill says that the pace of work has stepped up so that the project can get underway once detailed mine planning and permitting has been concluded. “The development initially of a small low-impact high-grade gold mine sets the platform for the exploitation of target areas for future phase two developments,” he says. The company has identified several additional target areas contained in both remnant areas within existing workings and strike and dip extensions of the Maria and Crown/Welcome veins. “Of particular interest is the newly discovered Mystery vein, which has not previously been mined and which lies between the Maria and Crown/ Welcome vein systems. “Establishing that the new target areas contain economic mineralisation will require opening up of existing tunnels and new development within the underground mine as well as further exploration,” says Hill. Gold was initially found in alluvial material at
Karangahake, near the Talisman mine workings, in 1875. Shortly after, a gold vein was found at nearby Mt Karangahake and ore was being removed from the Talisman, Woodstock and Crown mines by 1880. Crown, the last of the three mines to remain in operation, closed in 1928. About 37km of mine tunnels are present at Talisman, and 3.5km have been recently explored. The new operation at Talisman would remove gold/ silver ore from the Maria, Mystery and Welcome/ Crown gold veins, which are contained in four distinct blocks of mineralisation. The mine is currently covered by a Mining Permit (MP) 51-326. Hill says that the study found that the new mine plan is conservative and achievable with relatively low risk for a mining project at this stage of development. It would generate an internal rate of return of 83% and the payback period would be 2.5 years. Initial mining would produce a projected cash surplus of NZ$23.4m from total ore milled of 106,500 tonnes at a recovered grade of 9.4g/t Au and 30.0g/t Ag. A total of 32,200 ounces of gold would be recovered along with 102,800 ounces of silver. New Talisman Gold Mines Limited plans to advance the project by pursuing negotiations for an access arrangement to initiate a bulk sampling program. Hill says that this will enable further metallurgical testwork and delineation of the initial target ore zones. Detailed planning of this program is underway. The company will also initiate a feasibility study on the Woodstock and Dubbo Zones of the Maria Vein, which are the initial mining targets as well as pursuing negotiations with local gold producers with a view to locking in a toll treatment agreement.
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Jo Bailey L&M Mining’s owner Geoff Loudon says the company’s 400-tonne gold dredge at Earnscleugh Flats near Alexandra is about to be recommissioned. When Mining NZ spoke to Loudon in the second week of April he said repair work was ongoing but nearing completion. The vessel, which weighs up to 850 tonnes when laden with gravel, sank in late January after springing a serious leak. No staff were injured in the incident as there was ample time for them to get safely off the dredge after they noticed it was taking on water. Loudon says the vessel was pumped out and refloated in February then winched ashore. L&M Mining has since spent several hundred-thousand dollars on repairs and reconditioning work. This has included an energy conversion to mains electricity. Power was previously generated by an onboard generator.
We’ve worked very hard to refloat the plant and have managed to keep all of our staff employed.”
“This is something we planned to do regardless of the sinking,” says Loudon. Before it was commissioned at Earnscleugh in mid-September 2011, L&M Mining had already given the dredge a $3 million upgrade. It had previously been moth-balled at an old mine site at Waikaka that had been closed since 2002. The Earnscleugh project is one of the largest alluvial gold-mining operations in the country. L&M Mining expects to get about 110,000oz of gold from the 150ha site over the seven year life of the project. The first stage of the project, which lasted 18 months, involved gold recovery using a scaled-down version of the current plant. This was to ensure L&M Mining had the right systems and technology in place to move into full-scale mining. Late last year mine manager Mark Coleman of Southern Earthworks, which is contracted to operate the mine on behalf of L&M Mining, told Mining NZ that the company was fine-tuning its operating systems and getting production up to where they wanted it to be after a “smooth” first full year of operating the larger floating plant. The sinking of the barge has been a blow to the project. However Geoff Loudon says getting it back into operation and its 35 staff back to work as quickly as possible has been the company’s priority over the last couple of months. “We’ve worked very hard to refloat the plant and have managed to keep all of our staff employed. “We will be very pleased to get back to work.”
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Gold » News
Strategic find nice ‘surprise’ Waikaia Gold
advancing at Freshford site
Jo Bailey Exploration of its West Wanganui gold prospect has revealed a few surprises for Australian-based explorer, Strategic Elements (ASX:SOR). “Our field team has found two separate styles of gold mineralisation located very close together within the prospect,” says Charles Murphy, managing director of the Australian listed company. “Although we expected to find evidence of intrusion-related gold at West Wanganui we were surprised to find visible gold within a granite dyke as well,” The project is located within Strategic Element’s Golden Block’s prospect, and is around 40km west of the Sam’s Creek intrusion gold project being explored by OceanaGold and MOD Resources. These companies have already reported over one million ounces of inferred gold resource following limited exploration. “Our exploration team was only in the field a few days when it encountered a large area of Sam’s Creek-style granite dyke boulders in the Frazer Stream area,” says Murphy. “Twenty one of the thirty-three samples of granite dyke tested had detectable gold.” In addition, visible gold was discovered in a granite dyke boulder found near the helicopter landing site in Independent Stream with the angular nature of the boulder suggesting the source dyke could be in close vicinity. “It was significant that this boulder contained both visible gold in a quartz vein and gold within altered granite dyke outside the vein.” Murphy says the company will investigate the visible gold findings to establish whether these have a link with wider gold occurrences throughout the West Wanganui and Golden Blocks permits, where there is evidence of historical hard rock and alluvial gold mining. “Part of our follow up will be to investigate some of the many old gold workings and shafts scattered through the permits, to look at the type of gold that attracted the old diggers there in the first place.” Records show at least five historical sites were mined up to around 100 metres in depth within the 131sqkm Golden Blocks permit. However mining ceased there in around 1913, largely due to the mining machinery of the time, problems with water and other non-geological reasons. “We believe there is a strong potential for us to continue beneath the level where the old miners stopped.” Murphy says the company is “extremely pleased” with its first-stage exploration results from West Wanganui.
Peter Owens
Visible gold was discovered in a granite dyke boulder found near the helicopter landing site in Independent Stream. “It’s great to have this early success, with two separate styles of gold mineralisation located close together in a very accessible area.” With only the main low-lying waterways explored so far, Strategic Element’s field team is now proceeding further up the sides of the mountains. Once this work is complete it will move 5km northwest within the permit to the former producing mines of the Golden Blocks goldfield. Murphy says these projects will continue to be the company’s main focus in the short term, although it is continuing to look for intrusion-related gold mineralisation and other precious metals across a number of other South Island projects. These include the Mandamus and Blue Mountain projects located in the Inland Kaikoura mountain
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range on the east coast of the South Island; and the Reefton South and Hohonu projects where the company’s prospecting permits cover around 1000sqkm from close to the Reefton goldfield to Mount Bonar. “We are looking forward to the release of the geophysical data from the West Coast aeromagnetic survey which is critical to our exploration for intrusion-related mineral deposits at both our Reefton and Hohonu projects.” Murphy says the company is pleased with the strategic position it is developing across its rare and precious metal projects in the South Island. “We believe we have a real first-mover advantage with intrusion-related metal systems in New Zealand, which we consider to be a mineralrich, yet highly underexplored country.”
Waikaia Gold is making progress with its plans to mine for gold at Freshford, in the Waikaia Valley in Northern Southland. The company, which last year obtained the necessary resource consents from Environment Southland and the Southland District Council to mine at the site, says it hopes to commence mining of gold-bearing alluvial gravels in October this year. When the mine is fully operational, the company expects it will employ about 40 people. The company’s immediate focus is on establishing a comprehensive sheet-piling operation which will be used for the management of ground water at the Freshford site. Company executive, Warren Batt, says the sheet piling operation will use around 2700 tonnes of sheet pile. The company has ordered a state-of-the-art vibro piling machine, which is currently being shipped to Port Chalmers from the United Kingdom. The machine will be used to drive the sheet pile into the land surrounding the area in which the gold mine is to be located. At the same time, technology would be in place to ensure that while water could be drained off where necessary, the latent aquifer would neither be distorted nor damaged. The Waikaia region has an interesting history with gold mining. Batt says the operational area had been prospected in the 1990s by Eureka Mining and L&M Mining but mining would not have been viable at the time. The company has been using data accumulated by those two companies when considering whether the project was viable. Following the Central Otago gold rushes of 1861 - 1862, miners spread beyond the Tuapeka and Wakatipu to explore other areas of Otago and Southland, including the Waikaia Valley. Gold was discovered by November 1861 at Switzers, on Winding Creek, close to the location of present day Waikaia. It appears that gold mining was first carried out in this upper area of the Waikaia River and on its tributaries such as Winding Creek and Dome Burn. Above the upper reaches of the river on the Old Man Range the gold workings of Potters and Campbells were located, where there were 400 miners reported in late 1862.
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Phone: 06 833 7475 | Fax: 06 833 7418 | office@satherleytransport.com Autumn 2013 » Mining NZ 27
Gold » News
De Grey Mining set to drill at Puhipuhi Epithermal gold deposits
Karen Phelps De Grey Mining plans to start its drilling programme in May after receiving New Zealand Ministerial consent in mid-January for the transfer of 100% of Exploration Permit EP51985 from Waihi Gold Company Ltd for the Puhipuhi Project. De Grey intends to complete a program of work to orientate initial target drilling including data review, geological mapping and sampling and reprocessing of geophysical data. “We’ve started planning and would like to start drilling in May,” says De Grey Mining Ltd exploration manager Glenn Martin. “It will probably get put on hold over winter then commence again in September. But it will all depend on weather.” In 2012 De Grey Mining signed a definitive agreement with Waihi Gold Company Ltd to acquire 100% of the project. The project comprises one exploration permit granted to Waihi in 2009 that has a term of five years with the right to a further five year extension available. The permit area comprises 6,116 hectares located approximately 30km north-north west of Whangarei and contained within an area defined by the New Zealand Government’s Ministry of Economic Development as being open for mineral exploration. Despite exploration commencing in the early 1980s by companies such as Homestake, BHP and Macraes, the project remains relatively underexplored. Puhipuhi is interpreted to represent a well preserved hot spring sinter/breccia system that formed as an outflow from a venting geothermal system.
can be small but very high grade so there can be attractive economics.”
De Grey Mining has acquired the exploration rights for the historic Puhipuhi project. Martin says that mineralisation in these systems is commonly restricted to fluid upflow settings and very low gold contents are deposited at surficial levels. “Fluid upflow settings typically form fissure vein systems at depth, developed in competent basement rocks and fluid quenching in such an environment may produce good gold grades. “Fissure vein epithermal gold-silver mineralisation commonly forms in dilatant structural environments.”
Martin says that drilling to date at Puhipuhi has only been relatively shallow and hasn’t tested the deeper parts of the system where the gold-silver mineralisation is expected to occur. Other drill targets generated from multielement surface geochemistry and ground based geophysical surveys (IP and CSAMT) also remain untested within the project area, says Martin. Previous significant drilling results in the area include 18m @ 3.38g/t Au and 10.3g/t Ag, (including 2m @ 17g/t Au and 15g/t Ag) in PPRC6,
and 2m @ 7.6g/t Au and 70g/t Ag in PPRC31. Martin says that De Grey was attracted to the project as Puhipuhi was an advanced greenfields project with drill ready targets in place. “I personally know New Zealand well having worked there in the past. I was comfortable with the project and location. “To get to the stage to drill a hole can obviously take years so it de-risked the project in that regard. “It also reduces risk over the De Grey portfolio as we currently predominantly have interests in Argentina. “We see New Zealand as a good lower risk addition to our portfolio,” explains Martin. He says that although the Puhipuhi Project is of a modest size with 1-2 million ounces of gold expected, it fitted in well with the company’s overall focus. “Epithermal gold deposits can be small but very high grade so there can be attractive economics,” says Martin. Nine high priority drill ready target areas, based on geophysics and geochemistry, are ready to proceed including the two historic mercury mines within the project - the Rising Sun and Puhipuhi mines. To fulfil its license conditions De Grey Mining has to complete 1500 metres of drilling by October 20 this year.
Expertise on tap for mining While mining companies and investors in New Zealand and around the globe have reassessed their business plans, Golder Associates went through a period of reduced levels of activity over the start of the New Year. This gave the New Zealand Golder mining team an opportunity to rekindle relationships with current clients and explore with new clients, both in New Zealand and abroad. Golder Associates is a global consultancy company focused on engineering earth’s development and preserving earth’s integrity, by working on ground, environment and energy projects. Golder was established in New Zealand in 2001 and now has offices in Auckland, Tauranga, Hamilton, Wellington, Nelson, Christchurch and Dunedin. Golders New Zealand Mining Team has been based in Nelson since 2005 and has grown from the initial two members to 18 today. The Golder mining team in New Zealand is well placed to offer value for service internationally with world class expertise and at New Zealand prices which are lower than many of Golder’s competitors internationally. Currently the New Zealand mining team is at work on both international and domestic projects. The projects range from small to large scale, new and established projects. Current international project work includes jobs in Indonesia, Philippines, Ghana, Mozambique, Canada and Australia. These projects are both open pit and underground coal and mineral exploration and mine projects. For some of these projects Golder’s mining team sits in the driver’s seat while for others Golder is providing expert assistance. Domestically Golders New Zealand mining team members are currently working on many coal, gold and industrial projects. The Nelson mining team works closely with other New Zealand based Golder offices to give expertise and guidance with these projects.
28 Mining NZ » Autumn 2013
Golder Associates offers a comprehensive suite of integrated consulting design and construction solutions which assists clients to meet mining challenges head on. Golder provides a full service mining consultancy from project inception right through to mine closure, covering exploration, geological resource, modelling, mine engineering, resource and reserve reporting plus mining related cultural and environmental disciplines. To help with gaining more expert staff Golder Associates has recently acquired Strata Engineering Australia Pty Ltd. Strata is a specialist rock mechanics company with highly sought after skills in strata engineering in underground coal production. The acquisition of Strata coupled with previous investment in Marsden (2011) and RMT (2008) will provide a strong avenue to expand Golder’s presence in the global coal industry. On the environmental side Golder specialist services span hydrogeology, geochemistry, and water management, environmental baseline studies and environmental management systems (EMS). Golder offers full support through the consenting processes and preparation and implantation of closure and rehabilitation plans. Golder Associates has a large geotechnical team within the Auckland and Christchurch offices which augment expertise in rock mechanics for the Nelson based mining team. Their main project at present is being involved with the Canterbury earthquake rebuild. Golder Associates NZ has purchased its own Cone Penetrometer Test (CPT) Rig which aids in their geotechnical services to clients. Drawing on expertise globally helps Golder Associates complement and reinforce the skills and experience built into the New Zealand based teams. The connection with the other offices around the world allows Golder to either keep up with or lead the rest of the world.
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Advanced Vibration Management In more complex blasting or higher risk situations, quarry and mine operators can turn to Orica to manage the whole project from start to finish through its Advanced Vibration Management (AVM™) service. It’s reassuring for customers to access this service when they need assistance with precise and accurate blasting in challenging situations, supported by sophisticated measurement and statistical modelling techniques to predict and measure the results. With this AVM™ service, Orica applies its technical expertise and software to model the blast, predict the outcomes and then work alongside the customer to conduct the blasting within their specifications. For added peace of mind, Orica offers NCVib, an online vibration monitoring service operating 24 hours a day, 365 days a year. This NCVib service is a powerful tool to inform mine managers, project superintendents, neighbours and other stakeholders about vibration monitoring results around the clock. To see how Orica can work with you to manage vibration at your mine site or quarry visit www.oricaminingservices.com/vibration or call our local team on +64 9 292 1002.
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To see how our New Zealand business team can work with you to manage vibration at your site visit www.oricaminingservices.com/vibration or call Clytie Dangar on +64 9 292 1002
Minerals » NZ Steel
Taharoa Mine to treble production Karen Phelps New Zealand Steel is in the process of trebling ironsand concentrate production from its Taharoa mine site. The company has already increased capacity in the past 12 months from approximately 900,000 tonnes to 1.2 million tonnes and will go from 1.2m tonnes to 2.7m tonnes by the end of this yeraa The company has invested in a 15-year contract with Japanese shipping line company NYK that transports ironsand from New Zealand to China on a new ship called the Taharoa Destiny. The ship replaces New Zealand Steel’s previous vessel and has increased the shipping capacity, says New Zealand Steel mining manager Dougal Francis. “The Taharoa Destiny has increased our capacity from 117,000 to 155,000 dry metric tonnes and completes eight voyages per year,” says Francis. The mooring buoy at Taharoa has, as part of a separate capital project last year, been moved an additional 500m offshore and pumping capacity increased to cope with the larger vessel. A second vessel will be added before the end of this year. Other changes have already included extending the hours of operation of the Taharoa mine site from five days per week twenty four hours a day, to seven days. The Taharoa mine site covers an area of 1300 hectares. Sand is presently extracted from a pond by a floating dredge then conveyed to an adjacent floating concentration plant for processing. The concentrate is extracted from the raw sand in a series of separation processes and is then pumped in slurry form to a stockpiling area two kilometres away.
• To page 32
The ironsand concentrate is extracted from raw sand in a series of separation processes at the floating concentration plant.
Looking after the environment One of the core strengths of environmental and engineering consultancy company Tonkin & Taylor is the ability to incorporate sustainability principles into every project the company manages. “We do this by looking at the impact of each project on the wider environment and then developing strategies that ensure effective solutions,” says Tonkin & Taylor mining sector leader Cameron Lines. “We work hard to provide sustainable outcomes for our clients and believe that making a positive difference to the communities we live and work in is important.” The issue is an increasingly important one for the mining industry as regulations tighten with regards to environmental impact. An example of the company’s recent work in this area was the fish pass at NZ Steel’s Taharoa mine site. The Wainui Stream, fed by Lake Taharoa, was dammed to allow for water extraction to service the mining operation. The fish pass initiative has enabled fish to continue to migrate from the sea to the lakes. Tonkin & Taylor undertook the ecological assessment, consenting, design work and construction supervision for the project. The company also completes on-going monitoring reports to ensure the project continues to deliver. The project won an Association of Consulting Engineers Inc. merit award in 2011. Tonkin & Taylor is a New Zealand employee owned consultancy that provides innovative, cost effective and sustainable solutions for a diverse range of clients. The Tonkin & Taylor Group of Companies has completed projects in more than 40 countries, spanning the globe from Africa, through the
30 Mining NZ » Autumn 2013
Middle East, India, central and south Asia, Australia, New Zealand and the Pacific. The Group is able to provide clients with direct access to more than 600 specialist professional and technical staff. Tonkin & Taylor provides specialist services to the mining industry in the areas of geotechnical engineering, infrastructure design, environmental assessment, Resource Management Act consents and compliance. Lines says that Tonkin & Taylor’s team-based approach to problem solving means a wide range of specialist expertise is brought to bear on every project. “We have a high proportion of senior staff, resulting in a constant exchange of experience and ideas and an innovative and pragmatic working environment. “Some of our staff have been working for the company in excess of 30 years. We also have a very low turnover amongst our senior technical staff. “This is of particular importance to our mining industry clients in order to provide continuity as mining projects can take a long time.” Tonkin & Taylor clients include Winstone Aggregates, Solid Energy, Buller Coal and Stevensons. Lines says that mining companies are demonstrating increasing degrees of awareness over the potential environmental impact of projects and are being proactive in seeking solutions. “We are now seeing mining companies approaching us to undertake environmental initiatives because they want to not just because they have to. “The earlier we are involved in the process the more beneficial it is to our clients.”
Minerals » NZ Steel
The sand is extracted from a pond by a floating dredge then conveyed to the adjacent floating concentration plant for processing.
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Autumn 2013 » Mining NZ 31
Minerals » NZ Steel
NZ Steel lifts Taharoa output • From page 30 The slurry is then pumped via pipeline to an offshore single buoy mooring where it is transferred to a bulk carrier fitted with special dewatering equipment. Another big change will be the move from this present dredging system to a dry mining operation and the processing plant will be replaced with a new land-based facility. Three relocatable buried feeders will be fed sand by bulldozers then the feeder units will pump the material to the processing centre in a spiral gravity separation process. Construction of the new $30 million plant commenced in November last year and the first module will be operational by May. The second and third modules will come on board in August / September and the fourth by the end of 2013.
Exports from New Zealand Steel’s Waikato North Head mine site have also been increased. “Since October 2012 we have increased production by extending the hours of operation from five day a week to a seven days per week operation,” says Francis. “This means we have been producing more than the requirements for our steel mill and so have been able to test new markets in Japan, China and Australia in preparation for the increased production at the Taharoa mine site by the end of 2013.” Francis says in a market downturn for many industries the expansion of the mine sites has been a boost for the local economy increasing employment opportunities. Staff numbers at the Taharoa mine site have almost doubled to 80 in recent years and further increases are planned. At Waikato North Head staff numbers have increased from 42 to 55.
The fishpass allows fish to migrate from the sea to the lakes past the dam at Lake Taharoa.
Fish survey nets good results New Zealand Steel says that its annual fish survey undertaken at its Taharoa mine site has indicated encouraging results for the local marine life. At Taharoa significant volumes of fresh water are used from Lake Taharoa for the company’s mining, concentration and ship loading operations. The Wainui Stream, fed by Lake Taharoa, was dammed to allow for this water extraction. So that fish could continue to migrate from the sea to the lakes past the artificial dam, initially a fish ladder and later a fishpass were installed by New Zealand Steel. “Fish are able to migrate upstream to the dam by a weir and swim up the ‘fishpass’, which comprises a concrete box section with running water and partitioned to create eddies and ponds,” says NZ Steel Mining Manager Dougal Francis. “Many improvements have been made to the fish ladder to make the fishpass more suitable for all fish species. “Surveys of fish numbers are conducted regularly by staff to assess the fish numbers using the ladder.” Francis says that New Zealand Steel has worked to reduce the environmental effects
Many improvements have been made to the fish ladder to make the fishpass more suitable for all fish species.” of its mining operations and since 1970 the mining operations have increased their recycling of water reducing water discharge. The company has also increased the use of stormwater, reducing the volume of water extracted. After extracting the ironsand concentrate, unwanted material is returned to the areas which have been mined to begin the process of returning the land to its original form. “We are pleased this latest survey has shown more juveniles in the lake indicating that the fishpass is definitely a success working to ensure fish species of all kinds are able to access the stream and lake.”
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32 Mining NZ » Autumn 2013
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Finance/Tax »
Tax free payments on leaving work Recently there have been a number of high profile departures of senior employees in the mining sector. There has been considerable media speculation that the individuals concerned have received large pay-outs from their former employers. One thing that does not seem to have been considered is the tax treatment of these amounts. Generally a payment made to an employee that is in connection with their employment or service is treated as taxable income. The employer must deduct PAYE from the payment. This is a fairly broad rule which is designed to catch most payments made to employees. However, if an employer can show the payment is not in connection with an employee’s employment or service, then the payment is not income to the employee and will not be taxable. One example of this is where compensation is awarded to an employee under the Employment Relations Act 2000 for humiliation, loss of dignity and injury to feelings. The compensation may be awarded as a result of a court decision or an out of court settlement. Inland Revenue has published a public ruling on this matter, which provides Inland Revenue’s interpretation of particular tax legislation in a given fact situation. Taxpayers who calculate their tax liability in line with a public ruling can expect to be assessed in accordance with the ruling.
Don MacKenzie
The Inland Revenue’s view is that payments that are genuinely and entirely for compensation for humiliation, loss of dignity, or injury to feelings are not taxable income. As such there is no liability for employers or former employers to deduct PAYE from these payments. The basis for this view is that such payments are not in connection with the employment, as they are not compensation for employment services and are not an outcome of a normal employment relationship. Rather, the payments relate to a personal grievance which happens to have arisen out of the employment relationship. The tax free treatment will not apply in circumstances where the parties have labelled a payment as being for humiliation, loss of dignity, or injury to feeling but the payment actually relates to an amount that would otherwise be taxable. Examples of this are compensation for lost wages or other benefits. On leaving employment, any amount the employee is entitled to under his employment
The Inland Revenue’s view is that payments that are genuinely and entirely for compensation for humiliation, loss of dignity, or injury to feelings are not taxable.
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34 Mining NZ » Autumn 2013
contract cannot be characterised as humiliation, loss of dignity, or injury to feeling. Amounts to which an employee is entitled to will be taxable regardless of how they are labelled. So what does this mean for the recent high profile departures in the mining sector? It will depend on their employment contract. If they are merely receiving payments they are entitled to under their contract (notice, redundancy etc) then the amounts will be taxable. If, however the employee has reached a settlement with their employer where in addition to the amounts due under their employment contract,
an amount will be paid for humiliation, loss of dignity, or injury to feelings - this amount may be tax free. The nature of these agreements is that they are usually shrouded in confidentiality, so we may never know if tax was paid in respect of these high profile employees. But it is likely this will have been at least discussed as part of the employee’s exit negotiations. After all, a tax free amount significantly increases the value of any payment received. Don MacKenzie (Partner - Deloitte)
Industry Comment » Straterra
RMA reforms ‘good for everyone’ A key concern is the future of the quarrying sector in
Chris Baker The Government is being pressured by environmental groups over the latest Resource Management Act (RMA) reforms, but Environment Minister Hon Amy Adams is right when she says: “the RMA has become cumbersome, uncertain and highly litigious”. The proposed reform discussion document on “improving our resource management system”, announced on 28 February 2013, is broadly welcomed by our industry. Straterra believes it goes a long way towards resolving time-consuming, costly, and unsatisfactory planning and consenting processes. As companies operating in New Zealand, our members want the same thing as most Kiwis; a robust framework for assessing development proposals. But we want that to be a workable framework, not a frustrating framework, and that’s what we have now. The implications of RMA reform for the minerals sector are considerable. Measures that shorten the time frames of RMA processes, provide better alignment with other legislation, and lead to reduced costs to applicants, while maintaining the high standards of environmental protection we have now, would be good for industry and New Zealand. At the time of writing, Bathurst Resources is awaiting a decision from the Environment Court on an appeal against its resource consents, awarded in 2011, to develop a mine on the Denniston plateau on the West Coast.
New Zealand, as demand for land use continues to increase, along with demand for infrastructure that requires gravel and limestone.
Chris Baker
This looks likely to be in their favour, but it has taken years and further appeals to the High Court on points of law are possible. Without expressing a view on the benefits or otherwise of Bathurst Resources’ proposals, subjecting companies like this to such delays and expense will lead to one outcome – reduced investment. The Government’s reform proposals are generally sound and, taken together, would help clarify and simplify how the RMA system works for everyone.
Environmental group accusations of a Central Government power grab have no substance when Government already has the power of intervention at the local level. What this reform package does is propose criteria around when that is or isn’t appropriate. Who would argue with that? The relevant Straterra interests under the RMA are chiefly quarrying for aggregate and industrial minerals; and opencast or underground mining for gold, coal, and ironsands. A key concern is the future of the quarrying sector in New Zealand, as demand for land use continues to increase, along with demand for infrastructure that requires gravel and limestone. This is creating potential conflict over access to land. The RMA system needs to ensure adequate provision for the supply of these minerals into the future. As matters stand, it can take more than a year and cost millions of dollars to gain approvals to drill a dozen exploration holes in a paddock. Admittedly, in the particular case we are talking about a very large paddock - spanning three council boundaries. However, the effects of the proposed activity are negligible, and no benefits are conferred
The next issue of MININGNZ
on New Zealand from unwarranted delays of this sort. A better planning framework, and streamlined consenting requirements would benefit the sector and New Zealand as a whole. These reflections apply to the minerals sector more broadly; as a source of inputs for New Zealand industry (coal and ironsand), and for export (coal and gold), and as a source of employment, and support for communities in regions. This social factor is even more important because, more often than not, our industry operations are located in remote rural areas where opportunities for skilled work are rare and far between. According to a 2012-2013 survey by the Fraser Institute, a Canadian think tank, New Zealand ranks 36th among jurisdictions surveyed for certainty of regulation general, and 75th for certainty of environmental regulation. While the survey is based on perceptions of a large number of global mining investors, the signal is clear – there is a lot of room for improving our resource management system. Chris Baker is the chief executive of mining industry lobby group Straterra
Autumn 2011
Summer 2012
Winter 201 0
will bring more in-depth coverage of the latest in mining news, plus expert opinion and analysis. Covering the major extractive industries operating within New Zealand, Mining NZ will bring you up to date with market trends, with a focus on new developments in the mining sector.
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Autumn 2013 » Mining NZ 35
Industry News » SCE Group
SCE Group expands with Rocktec Jo Bailey The acquisition of Rocktec is providing wide ranging benefits for Canterbury-based mechanical engineers, Southern Cross Engineering Group Limited (SCE), says chief executive Paul Thorn. “Bringing Rocktec into the SCE Group complements our already well established engineering capabilities, and allows us to expand our focus to new sectors such as mining and quarrying. The acquisition has also given us a North Island base, from which we can service new and potential Rocktec clients, in addition to SCE’s historic clients in the sawmilling and timber industries in these regions.” Thorn says the move into the mining and quarrying sectors will also allow SCE Group to better weather industry-specific cycles. The agreement for SCE Group to purchase Rocktec’s operations and capabilities from Stevenson Group was finalised - for an undisclosed sum - on January 15, 2013. Thorn says the integration of the companies has gone smoothly, with lines of communication established, and staff “networking well”. “We are already sharing work between the North and South Island workshops which was always part of our intention. This allows us to stop margin loss outside the group, as we’ve previously had to bring in sub-contractors to help with the workload during busy times.” SCE has already added new staff to the 40-strong Rocktec team at the time of the buy-out, which includes qualified and practicing engineers and draughtsmen, metal fabricators and welders. “The merger of these two high performing contract engineering companies has gone extremely well. They both have a strong performance history and will continue to market their established brands in their own areas of expertise,” says Thorn.
36 Mining NZ » Autumn 2013
Rocktec is a specialist engineering solutions provider to the quarrying, mining, materials handling and mineral processing industries. SCE is one of New Zealand’s largest mechanical project engineering companies. It has wellestablished capabilities in areas such as green and dry milling, timber processing, woodchip, coal and gypsum handling, contracting and heavy engineering. The group services projects from throughout New Zealand, Australia and the Pacific Rim countries from its Christchurch head office and manufacturing base, and offices in Auckland, Brisbane and Melbourne.
Rocktec is a specialist engineering solutions provider to the quarrying, mining, materials handling and mineral processing industries with a head office and manufacturing plant in Matamata, and an Australian office in Brisbane. It also has an international dealer and distribution network that supplies Rocktec equipment to clients worldwide. Its full turnkey solutions include design, civil and foundation work, installation, structural steel fabrications, provision of full electrical controls and
services, ancillary equipment and componentry. Thorn says the Rocktec acquisition is a “new chapter” in the long and successful history of the SCE Group. “Over the years we have forged a solid reputation for service and technology both nationally and internationally. We are pleased to be able to extend our reach into the mining and quarrying industries through Rocktec, and look forward to growing our business in these sectors.”
Industry News » Skevington Contracting
Big hydro excavator comes to town Karen Phelps The largest hydro excavator in New Zealand has been brought to New Zealand by Skevington Contracting. Company director Blair Skevington sees the piece of equipment as becoming more prominent in the mining industry. He cites the speed at which the machine completes tasks and the enhanced safety for workers as key benefits. “With increasingly rigorous safety requirements on sites in New Zealand these machines will become even more important to the mining industry in the future,” he says. The nearly $1m excavator took nine months to build and three months to make its way to New Zealand from Canada by sea. Skevington hydro excavator manager Steve Hall accompanied Blair Skevington to Canada to oversee the manufacture of the piece of equipment. The excavator had to be specially designed for New Zealand road conditions. A custom truck and trailer unit was built in order to disperse the weight of the excavator over the axles to meet New Zealand road requirements. The excavator was commissioned due to work generated by the Christchurch earthquake, the Ultrafast Broadband Network and as Skevington saw a need for the equipment to help speed up particular jobs on mine sites to reduce downtime. Blair Skevington started his career as a baker but his entrepreneurial spirit was aroused at the age of 19 when he says he “bribed” the owners of a rundown hotel to give him the lease despite the fact he was not of legal age to run such an enterprise. He found a business partner and they began the North Western Hotel in Palmerston, located between Oamaru and Dunedin. In addition to running the hotel Skevington started contracting work and was eventually offered a full time position with OceanaGold on a drill rig. He then moved on to become a crane driver for Macraes before seeing opportunities to start his own contracting business. He began Skevington Contracting Limited in 2004. The company now offers an eclectic range of services to the mining industry and has expanded these due to customer demand. Skevington Contracting services include civil construction, heavy machine operation, underground mining ground support, labour hire, site landscaping, laboratory labour, field services,
Skevington Contracting owns and operates the largest hydro excavator in New Zealand.
underground and general machinery operators, hiab hire, crane operation, alluvial gold mining and commercial cleaning. The hydro excavator has already been utilised on contracts for OceanaGold for cleaning out tanks and autoclaves. As those in the industry know, to clean out tanks generally manpower has to be lowered into the tank then the slurry manually removed. The hydro excavator, which sucks out the slurry, reduces the manpower that needs to be utilised and thereby reduces the risk to workers. It also completes the job significantly quicker, reducing project times by up to 75%, estimates Skevington. “This of course means less downtime and that production is back faster saving clients considerable money,” he says.
With increasingly rigorous safety requirements on sites in New Zealand these machines will become even more important to the mining industry.” The unit can also be used for underground services on mine sites. High pressure water is applied to break up the ground, which is then sucked out. The method ensures there is no damage to existing underground services. “If a wire or cable is accidentally cut for example it can cost a company big time. We eliminate that risk,” says Skevington. Based in Palmerston, Skevington Contracting
completes work on the West Coast and Otago regions. Clients include OceanaGold, Concrete Treatments and Harker Underground Construction. Skevington works hands on in the business on a daily basis. He says he loves working in the mining industry for one reason “Challenges. I like taking on something different and succeeding. In the mining industry every week there is a challenge and an opportunity.”
NOW INTRODUCING…. NZ’S LARGEST HYDRO-EXCAVATOR
Skevington Contracting Ltd Po Box 5, Palmerston, Otago 9430 Email: skevingtoncontracting@xtra.co.nz
Ph: 0272 444 227 Blair Skevington (Chezze) Managing Director
Civil Construction | Underground Mining Civil | Earth Works and More Machine Hire: Bull Dozer, Tip Trucks, Hiab Trucks, Bobcats, Grader, Diggers and More
Autumn 2013 » Mining NZ 37
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