Ivanhoe Mines’ 64% platinum-focused subsidiary Ivanplats is developing what could be the world’s largest PGE mine. Thanks to an ultra-thick (19 m), fl at underground ore body known as the ‘flatreef’, located just outside Mokopane in Limpopo province on the Northern Limb of the Bushveld Complex, the multi-billion dollar Platreef Project represents the future of South Africa’s platinum industry and Ivanplats is clearly leading the way. Laura Cornish visited the site and spoke with Ivanplats’ Vice President & Executive Head of Projects Gerick Mouton to learn about this phenomenal project.
Platreef’s differentiating factors
The Platreef project comprises 346 Mt of indicated resources at a “healthy” average grade of 3.77 g/t of 4E PGE material (platinum, palladium, rhodium and gold) with another 506 Mt of inferred resources. “Together this equates to over 800 Mt of combined resource across an area that only covers about 10% of our total tenement,” says Mouton. “So although we have significant upside exploration potential of 48 km2, we already have more than enough resources to build a world-class, large-scale mining operation.”
Unlike most typical, conventional mines on the Eastern and Western Bushveld Limbs, which are dominated by relatively narrow Merensky and UG2 reefs and negligible amounts of base metals, the Platreef ore body represents a dominant thick Merensky Reef and also contains a significant amount of base metals – specifically over 0.3% nickel and 0.15% copper. “Selling these two metals in the volumes we expect to produce could ultimately pay for the entire operation, meaning all our mined PGEs could potentially be profit.”
In order to manage capital outlay to establish what could be the world’s largest PGE mine, the plan is to build the megamine in phases. At an initial 4 Mtpa or 433 000 4E ozpa, Platreef would already be ranked as the third largest PGE mine in the world. A second phase ramp-up to 8 Mtpa is already in the pipeline as well as a possible 12 Mtpa, although this is considerably well into the distant future at this stage. At this enormous scale, the mine could still deliver production for several decades.
“Our strategy is to start small and sell our concentrate into the local market which eliminates the need to pre-commit to smelting and refining, although we will evaluate this option as we expand the operation – based on capacity in the market at the time.”
Ivanplats is also focused on being on the low left quartile of the global cash cost curve, which is easy according to Mouton because “our ore body dictates our mining approach”. The thick, unconventional Merensky Reef lends itself to full-scale mechanised mining (using 50 t trucks and 17 t LHDs) which has the added benefit of delivering highly safe working conditions and upskilled technicians and mining operators.
“This would position our cash costs alongside our mining neighbour Mogalakwena [owned by Anglo American Platinum] which is the only company successfully mining the Platreef ore body via open pit mining methods and is known to be the world’s largest and most profitable PGE mine. Considering we will be mining underground, this will be an outstanding achievement.”
As if the above is not sufficient to see the project truly stand out above its PGE peers, the company’s attention to working with partners who are equally focused on delivering this project has also been a top priority.
Outside of its 64% Ivanhoe Mines ownership, Ivanplats is 10% owned by a Japanese consortium of Itochu Corp, ITC Platinum (an Itochu affiliate) and Japan Oil, Gas and Metals National Corporation (JOGMEC). The 26% balance of the shareholding sits in the hands of Ivanhoe’s BBBEE partners. “We believe that our BBBEE structure is the fi rst of its kind in South Africa that has broad community benefits which incorporate community members, local entrepreneurs and HDSA owned businesses,” Mouton outlines. The mine is surrounded by 20 communities and about 150,000 people.
Unlocking an incredible opportunity
It has been almost 20 years since Ivanhoe first started evaluating the Platreef property. It acquired its exploration permits in 1998. “Like Mogalakwena, we were initially targeting an open pit mine along the outcrop strike but had to abandon this option because it was unfeasible to relocate certain communities. But this proved fortunate and in our favour after we decided to explore to the west and in 2011 uncovered the thick Merensky Reef which, unusually, is flat-lying as well,” Mouton reveals.
Following this incredible discovery, Ivanplats commenced with a deep level drilling programme in 2011 – one of the biggest drilling campaigns ever undertaken on an exploration target. “With 30 drill rigs and 20 geologists we were producing 14 000 m of core every day.” Today the company has 726 004 m of logged core samples at its Mokopane-based office. In 2013, the first resource estimate was delivered, followed in 2014 by a pre economic assessment (PEA) and an award of a mining right by the Department of Mineral Resources. In 2015, a pre-feasibility study (PFS) delivered an NPV (at an 8% discount) of US$972 million (for the 4 Mtpa phase 1 portion only). With sufficient capital in hand, Ivanplats began sinking its first shaft, Shaft 1, in February of the same year.
“To date, we have updated the mineral resource as per the numbers indicated above and are looking to commence the sinking of our main production shaft, Shaft 2, and erection of the associated headgear scheduled for 2017,” Mouton explains.
Mining the “flatreef”
Because of the thick ore body, the predominant mining method selected for optimal extraction of the flatreef is longhole stoping. The underground main haulages will be a minimum of 5 m wide x 5 m high to enable the large, heavy duty equipment to move seamlessly. The stopes will be 15 m wide by 20 m high and up to 60 m in length. “There will be 25 active stopes on average at any given time to reach the target capacity of moving around 11 000 tpd of ore,” Mouton outlines. The mine will also backfill the mined-out stopes. To minimise its surface environmental impact, 60% tailings will be used as backfill material which will result in a small tailings footprint which will be located about 8 km away from the mine’s infrastructure footprint in an uninhabited area.
With such massive mining areas, the mechanised longhole stoping method makes operational sense and will be delivered like never seen before within the underground PGE mining environment. “This also requires skills sets unseen in South Africa. Equipment operators will have the skills set not only to operate the machine effectively, but to do fault finding as well.”
Mechanised mining reduces the number of personnel underground; as such Ivanplats estimates that it will employ 10 miners for every 1 000 oz of platinum produced. This is between three and four times less than its Lonmin, Anglo American Platinum and Impala Platinum PGE producer peers.
Efficient developments and timeframes
A feasibility study for phase 1 is due to be completed in Q1, 2017 using the same team of professionals which delivered the PFS. Primary consultants include DRA Global (process plant and infrastructure); Stantec Consulting International (mineral reserve estimation and mine plan); SRK Consulting (geotechnical); AMEC Foster Wheeler (mineral resource estimation); Golder Associates (hydrology, backfi ll and tailings); and Digby Wells (environmental). At the time of visiting the site in early December, Shaft 1 had been sunk to a depth of over 170 m. It is a 7.25 m diameter concrete lined shaft which will at full depth extend 980 m below ground with development stations at 450 m, 750 m, 850 m and 950 m. All these stations will be linked to the main production shaft, Shaft 2, situated 100 m to the north-west. Aveng Mining has been contracted for the shaft sinking contract.
“Once Shaft 1 has been sunk to its target depth, it will initially be used for early underground development work and waste hoisting. Shaft 2 will be sunk simultaneously to ensure the start-up and steady-state production targets are met. Ultimately, Shaft 1 will be used as a ventilation intake shaft when Shaft 2 takes over hoisting,” explains Mouton.
“It all becomes even more interesting when we step up to the second phase. We’ve designed Shaft 1 to be able to hoist 2 Mtpa. Shaft 2, designed by Murray & Roberts Cementation, has a capacity of 6 Mtpa and in combination with Shaft 1 could easily ramp up to deliver the second phase 8 Mtpa production target.”
The Shaft 2 headgear will be a massive 103m in height and, like Impala Platinum’s 16 Shaft, the headgear will be straight and concrete in design, incorporating the Koepe winders inside near the top of the headgear given that footprint space on surface is limited. It will also include two 40 t skips moving at 18 m/sec to hoist the ore and a 250 people man cage. “This will be an iconic mining symbol in Limpopo and one of the tallest structures in the province.” The connecting shaft will be 10 m in diameter and concrete lined as well – which will easily accommodate transporting the mechanised equipment underground.
Ensuring sufficient power and water supply
Power constraints in South Africa are less severe today than a year ago and as such this presents no challenge for Platreef. The project already has 5 MW of installed power supply necessary for construction purposes and has also secured 70 MW of permanent power from Eskom. It will also build the 13 km transmission line connecting the Eskom sub-station to site.
Energy saving value engineering has been applied to this portion of the project to reduce necessary energy consumption. “This includes typical energy saving initiatives such energy efficient motors and pumps, solar power, etc.” Back-up generators will support the operation if necessary.
The entire Mokopane area is water scarce, Mouton continues, noting that the entire town’s water supply is generated from boreholes. “Our primary source of water will be generated from a pipeline currently being constructed by the TransCaledon Tunnel Authority (TCTA) in conjunction with the Department of Water Aff airs. It will source water from the Flag Boshielo Dam situated about 113 km south of Mokopane and is sized for 140 Ml/day of water. We will require around 6 Ml/day for the fi rst phase,” says Mouton.
This, however, is not the only source of water Ivanplats is considering. The company is also in discussion with local authorities and other interested stakeholders for possible bulk water supply. “As part of the feasibility design we are evaluating how to optimise our water usage to retain and recycle as much water as possible. This includes a possible dry stacking option for our tailings, for example.”
“At 4 Mtpa, we would be the third largest PGM producer in South Africa, behind Lonmin’s Marikana and the Mogalakwena operation – within the first quartile of PGM producer cash costs at about $322/oz. At the second phase 8 Mtpa this would already position Platreef as the largest producer which would only further set it apart should it ramp up to its ultimate 12 Mtpa ROM production goal,” Mouton concludes. MRA
IVANHOE MINES’ EXPLORATION GEOLOGISTS RECEIVE 2016 COLIN SPENCE AWARD FOR EXCELLENCE IN GLOBAL MINERAL EXPLORATION FOR FLATREEF DISCOVERY
Sello Kekana and Dr David Broughton, two key members of the Ivanhoe Mines exploration team, in December 2016 received the prestigious 2016 Colin Spence Award for excellence in global mineral exploration from the Association for Mineral Exploration British Columbia (AME BC). AME BC’s Colin Spence award recognises individuals who have made a signifi cant contribution to enhance mineral resources through the original application of prospecting techniques or other geoscience technology. The awards to Kekana and Broughton cite their roles in the discovery and delineation of the high-grade, fl at-lying Flatreef underground deposit. Kekana, who was born in Kgobudi village on the edge of the mine area, is head of transformation at Ivanplats and Broughton is senior advisor: exploration and geology for Ivanhoe Mines. “The recognitions of Sello and David for their contributions to the exceptional Flatreef discovery are proud achievements for the individuals and an honour for our company,” says Robert Friedland, executive chairman of Ivanhoe Mines.