Bessit says that though trackless mechanised equipment can theoretically cope with the dip of the reefs which is 9O to 11O, in practice this is at the outer edge of their capabilities. In addition, Impala’s average stoping width on the Merensky reef is about 120 cm, and one needs a channel width of about at least 1.1 m for mechanised mining to be viable without significant dilution. That together with the fact that one needs to be very confident in the consistency of the reef to justify mechanised mining means that Impala, thanks to its previous experiences, has opted for conventional mining at its new projects.
It means that other than at parts of its 12 and 14 shafts, where mechanisation is established, accounting for 14% of production, Impala will not undertake further mechanisation at its main lease area which currently comprises 14 vertical shafts and five underground decline shafts. It is these declines on its third generation shafts (each generation represents an increased depth as Impala follows the orebody down dip in its lease area) such as 1, 10, 11, 12, and 14, which enabled Impala to defer the initiation of new vertical shaft projects by up to a decade.
In addition, the mechanisation approach intended through the adoption of Implats’ Dynamic Drilling Technology initiative, which Bessit says was undertaken primary as a safety initiative, has not taken hold. It entailed using rigs that mechanise the drilling of holes and would also improve face advance rates. The labour force did not buy into the technology to mechanise drilling and saw no advantage over conventional hand-held drills. “The teams found the set-up time and physical bulk of the machine was a constraint that did not enhance their efficiency much by ensuring better advance by drilling longer holes. The reduction of physical effort was not something they saw as a particular benefit.”
No doubt, there were also concerns among workers about being made redundant and overall there was no buy-in, without which the system did not work. “It means we have gone back to the drawing board to find other means of increasing our productivity, since the mining cycle as it stands won’t produce any long term quantum changes in efficiency.”
Meanwhile Impala is working to achieve an incremental increase in centares mined per team. This has increased from 38m2/man to 40m2/man over the past year and the company is planning a 2% to 3 % improvement year on year.
Impala has settled upon ten person mining teams as the ideal. Bessit says the goal is to ensure 2.5 metres of working face allocated per person – any more is not practicable – and that there be a spare panel available for every three teams. Thus Impala’s development programme is undertaken to ensure a 30% redundancy in face availability. Overall its 08/09 (current) financial year will see Implats increase development at its main lease area by 18%, up from a 15% increase the previous financial year.
Impala Platinum’s second fourth generation shaft, 17, which will reach a depth of 1,800 metres below collar, has just begun its sinking phase while the first of the fourth generation shafts, 16, which will reach a depth of 1,600 metres, is still under construction. The last of the third generation shafts, 20, which reaches a depth of 1,080 metres, is now in its equipping and development phase with sinking complete.
The 20 shaft has a planned production rate of 150,000 ounces of platinum a year and will be in full production by 2012. The 16 shaft has a planned production of 185,000 ounces a year and will be in production by 2015. The 17 shaft will have an annual production of 180,000 ounces and will be in production in 2018. Bessit says the plan is to bring a new shaft on line every three years and the shaft to follow these will either be 18, or 21. These are all replacement shafts, and the policy remains to maintain production from Impala’s main lease area at just over 1.1 million ounces of platinum. There may be temporary increases in output as new shafts come into production while older shafts are still tapering off, but those temporary gains are seen as a windfall.
Bessit says that the group’s production has been biased towards the Merensky reef relative to the UG2 which lies some 50 to 90 metres below the Merensky. “Our target is to have a 55:45 ratio of Merensky to UG2.”
Ore is transported from the shafts on the Impala main lease area to a central processing facility.
Impala’s Central Processing Facility Expands Smelting Capacity
The central processing facility comprises a concentrator that processes 16 million tonnes of ore a year at an average grade of 3.84 g/t (that is the figure for Implats’ 2007/08 financial year – for the first half of its 2008 financial year it was 3.9g/t). This volume is concentrated to 25,000 tonnes of material at 4,000 g/t.
While Impala is not planning to increase production from its main lease area beyond the current 1.1 million ounces of platinum, it is investing R1 billion on expanding its smelter capacity from its current 2.0 million ounces to 2.8 million ounces of platinum by 2012.
Impala is looking to produce 2.3 million ounces of platinum in 2010 and 2.5 million ounces in 2012, which leaves it room to do third party smelting. “However, we plan to remain predominantly a mine to market producer,” Bessit says.
Some R450 million of the investment in the smelter complex is being invested in SO2 gas treatment and this will be completed by December 2008.
The concentrator, which together with the smelter employs about 1,650 people, is split into two sections and it is one of the largest facilities of its kind in the world. The plant used for treating the Merensky ore has 21 mills, 15 of which are used for treating the Merensky material. Mills 16 to 21 are used for UG2 and mixed material. The recovery overall is about 83%.
The recovery rate of PGMs from the sulphide rich Merensky ore (typical seam width 100 cm) is 89% compared with 75% from the sulphide poor (typical seam width 65 cm) UG2. Overall the plant receives five different types of material, these being underground conventional UG2, the largest volume, and underground Merensky, both of these mined conventionally. Then there is the mechanised Merensky ore and small volumes of open cast UG2 and even smaller volumes of open cast Merensky material.
The smelting process starts with dryer phase, which eliminates moisture, before smelting. The smelter plan has three converters. When the upgrade is complete the smelter will have three 32 MW furnaces. Two of these have already been upgraded, with one remaining furnace still to go through a rebuild and the timing will coincide with demand.
Bessit says that it is the smelter facility which gives Implats a buffer to achieve the required reduction of power usage across the group to 90%. If a smelter furnace were to shut down completely it would take about a month to restart. However, the furnaces can lower their power consumption to 10 MW without incurring this problem and this gives Impala flexibility.
The company has full power for its 17 shaft project, and is still negotiating for full power for its Marula mine located on the Eastern Limb. It was using 20 MVA at Marula in March this year, which has increased to 25 MVA by midyear, and has been allocated 50 MVA. It needs to obtain 80 MVA for its full expanded mining operation. Marula is producing about 70,000 ounces of platinum a year at current mining rates, but if its project ramps up as planned it will increase to 120,000 ounces a year.
“Negotiations are underway.” Impala also has power for sinking the Leeukop (Afplats) shaft but requires some 60 MVA at full production. The additional power is still subject to negotiations with Eskom. Impala hopes to see first production from this project in 2012/13. “At that stage Eskom’s power generation problems will hopefully have been resolved,” Bessit says. Impala has excluded as an option the generation of its own power. “While such an option might resolve our electricity problem, it would not change our energy footprint and we have set ourselves a target of reducing our energy footprint by 15% by 2015.”
Implats estimates it will lose only 20,000 ounces of platinum a year through its current electricity cutbacks. “We have projects in the feasibility stage to reduce our energy consumption, 45 MW is required, which accounts for 10% of our total consumption. This is not just in response to the Eskom shortfall but something we have been working on for the past three years.”
One of the projects already being implemented is the shifting of 7 MW from peak to non-peak demand periods. Eskom is funding R17 million of the R21 million Demand Side Management (DSM) project, and the criterion is that Impala must ensure it does not fail to meet these parameters over five years; if it should fail it will be liable for the full cost of the funding.
Employee Turnover and Cost Escalations
Impala avoided the recent xenophobia that affected some mining operations, as it has a policy of hiring within a 50 km radius and the percentage of its workforce who are foreign is relatively small (about 4,500 out of 27,000 employees). These are also people who have been with the company for decades and are well established in their communities. Bessit says that the way Impala is dealing with high turnover due to the skills shortage is by providing company accommodation and building houses that employees can purchase with company facilitated bond financing. It also has an employee share ownership programme, but Bessit admits that some progress needs to be made in improving workers’ financial literacy to make them appreciate the benefits of this scheme.
Skills which are in particular demand across the industry are artisans, miners, surveyors, geologists and engineers. “One of the reasons for the shortage is that people struggle to obtain government certificates of competency.” Implats has increased its in-house training of artisans, engineers and miners and it has also begun the in-house training of surveyors.
In its 2008 financial year production costs per unit of platinum is forecast to increase by 15% to 20% year on year. It is due to factors such as the steel price increasing by 60% between April and June alone this year.
The major increases in input consumable costs for Impala over its 2008 financial year included fuel which went up 100%, followed by steel which went up 65%, then explosives (ammonia) costs which increased by 36%, coal (23%), copper (25%), reagents (18%) and timber (12%). The cost increase in labour was 9.4% based on CPIX plus 1% and a 2% provision for market related pay adjustments.
Most disturbing is that the turnover rates for shift supervisors and artisans, instead of the benchmark of 5%, stands at about 25% and this first line supervisory turnover makes it hard to sustain safety and productivity initiatives.