HomeGoldGold Fields looks to sweat SA assets

Gold Fields looks to sweat SA assets

Vishnu Pillay, who heads up the South African operations of Gold Fields, says the company is looking to achieve gold production of about two million ounces of gold a year in the country over the next few years.

This takes into account the South Deep project, which is ramping up on schedule to achieve its target of 750,000 – 800,000 ounces a year by 2014. Pillay tells Mining Review Africa that the South Deep operation is on track with its production profile steadily increasing. South Deep’s output is on top of the company’s three established mines: Beatrix, which is producing over one tonne of gold a month and has a six million ounce reserve base, and the two largest operations in the group, Driefontein and Kloof.

Gold Fields is, however, also looking at the feasibility of production of uranium, gold and sulphur from its tailings. “The feasibility process is expected to be complete for a board decision to be made during our November meeting this year,” Pillay says. Gold Fields currently does not produce uranium, though it once did from its West Driefontein operations.

If approved by the board, Gold Fields is looking at 66 million pounds of uranium pentoxide at a grade of 55 g/t as well as 4.9 million ounces of gold at 0.3 g/t in its surface tailings.

“In addition to the ongoing development work and establishment of ore passes at South Deep, that project contains a number of other sub-projects. These include the construction of a new slimes dam, ensuring sufficient additional milling capacity is timeously available, and a refrigeration project. In addition there are changes in the shaft infrastructure that involve the extension of the ventilation shaft below the 95 level,” Pillay says. The deepening of the ventilation shaft of the South Deep twin shaft complex will enable it to be used to hoist an additional 195,000 tonnes a month of ore, increasing the capacity of the shaft complex to 330,000 tonnes a month. Blasting on the shaft extension started in April 2010. “I am pleased to say all these projects are on schedule.”


The Beatrix gold mine which
produces a tonne of gold a month

South Deep is the country’s first modern fully mechanised deep level underground gold mine. Furthermore it is the first to implement a full day production schedule. This sees workers undertaking a working day rotation with seven days on, two days off, seven days on and then five days off. “We have had some challenges to get some cycles populated, but we will see the benefits of this process soon,” Pillay says.

At its other South African operations, the company is working to implement what Pillay describes as a work shift arrangement. It sees production for six days a week with Sunday off. The aim is to make up for lost shifts during periods such as the first quarter when the Christmas and other holidays annually impact on production. Furthermore it will increase time at the ore face by about a month a year, crucial to making these mines cash profitable. A full day week is not possible at the older mines as a day is needed for shaft repair work.

Pillay, who has been in the post for two years, says, “It is my personal goal to run safe operations and ensure the company undertakes no actions and creates no circumstances that can lead to fatalities, injuries or ill health. We have made significant progress in reducing fatalities and serious injuries but regrettably we still have had a number of fatalities this financial year.

As a result of fatalities the government often closed the entire mine to investigate the causes of the accident, not just the shafts affected. “We have engaged with the Department of Mineral Resources on the matter and it is assessing the situation.” The outcome is already greater flexibility in that now only shafts are being closed after an accident, but only if the Mines Inspector deems the rest of the mine to be safe.”

That Gold Fields is serious about its commitment to creating a much safer working environment is demonstrated by how the company has stuck to its word of saying that if it cannot mine safely it will not mine. Kloof and Driefontein have sterilised significant reserves that will now never be mined because they could not be mined safely. This amounts to 1.1 million ounces of gold at Driefontein and 630,000 ounces a Kloof. Pillay says that once these reserves are sterilised there is no going back.

While this does not affect production at these operations, which have large reserves and resources, it has affected flexibility. “We aim for 24 months of ore reserve available in advance and it now varies between 12 and 20 months at various shafts. We must improve our development rates to achieve our target and this is not a short term process. It will happen over a number of years.”


Kloof mine, one of the operations
that represent the heart of South Africa’s
gold mining sector.

Another challenge Gold Fields and, for that matter, South Africa’s gold mining industry in general faces is the increasing price of electricity. It has already seen electricity costs, which amounted to some R1 billion in its 2009 financial year increase by 60% to R1.6 billion in the 2010 financial year. With the three year annual increase now in place, this number will go up to over R3 billion a year in 2012.

Gold Fields is responding by putting in place electricity saving initiatives, which focus on ventilation, refrigeration and pumping. It already successfully reduced its electricity consumption from 610 MW to 550 MW; Gold Fields had to reduce consumption by 10% as requested by Eskom to help alleviate the electricity crisis that struck in early 2008. Now further energy efficiency measures are being undertaken to contain cost increases and Pillay believes another 10% saving is possible. “In particular we are making sure we put in seals to isolate older working areas and focus our ventilation in areas that we work in.”

Energy efficiency is one of several initiatives Gold Fields South Africa is undertaking to improve the efficiency and safety of its operations. Some of the current projects include improvement in occupational health, a focus on surface infrastructure as well as supply chain management. Higher productivity at the stope face is also vital. Currently the mine call factor across the group is about 82% and Pillay believes this can be improved.

This, however, involves making sure workers are aware of the importance of higher productivity and incentivising them to do so. As an industry, South Africa’s gold mines are sometimes accused of worrying more about the tonnages mined as opposed to the gold recovered.

Gold Fields provides bonus incentives for its workforce on the basis of achieving safety and production targets. But it is being innovative by adding a third criterion, based on the quality of production. Gold Fields is targeting an increase of the monthly face advance rates by an extra metre a month from its current six and nine metres. “We hope to achieve this by ensuring the logistics to supply material to the stopes is in place, such as additional services and people. From a planning side we will ensure all the rock engineering and geotechnical work has been done,” Pillay says.

Another initiative is to mechanise all horizontal development. “South Deep is mechanised and our Beatrix mine in the Free State has always had a high level of mechanisation; now we are simply introducing some of these concepts to Driefontein and Kloof, with the introduction of single and twin boom rigs.

“There will be no adjustments to teams while we implement the process as there is a steep learning curve,” Pillay says. Rather than risking jobs, the recently introduced productivity measures have seen the South African mines increase their workforce by 20%, many of them to compensate for high absenteeism rates.


The Driefontein gold mine, along
with Kloof, one of the two largest mines
in the Gold Fields group.

“Overall the management focus has been on achieving safe operations, ensuring the mines’ infrastructure is in a good health, and to improve productivity. At the same time we have had to focus on the delivery of the South Deep operation,” Pillay says.

South Africa’s gold industry has had to adapt to changing circumstances. Gold Fields has focused on being more sustainable in the communities where it operates. In many ways the industry is healthier than it was before, with housing and social infrastructure for workers being developed, safety being a strong focus and energy efficiencies being achieved.

However, at another level, South Africa’s gold mining industry is worse off than it was a decade ago with steadily declining output. “We are using more workers and achieving less production.” Pillay gives three reasons for this from a Gold Fields perspective. “The overall state of health of the workforce is lower than it was then,” he says, which is indicative that HIV/AIDS is having a major impact on the mining industry’s workforce. “Secondly, the shafts are old, and we are mining further and further way from the central shaft infrastructure. Thirdly, the orebodies are for the most part not in their prime mining phase. In some cases they are already in their tertiary phases, with South Deep being the only really new deep level gold mine the country has seen for some time.”

South Africa’s gold mining industry has seen the closure of a number of its more marginal shafts. But amid this rationalisation, larger operators, such as the Gold Fields long life mines, hold their ground. “The industry has been innovative in responding to changing circumstances and challenges. At Gold Fields we have a full time team that is looking at using appropriate technology options that will secure the future,” Pillay says. “Having been faced with and met so many challenges, I am confident we and South Africa’s gold mining industry will continue to find solutions to meet future challenges.”