Of this, 1.15 million ounces will still come from Implats’ mainstay, the Impala Platinum lease area in the western Bushveld near Rustenburg. That operation will remain at its steady state of production, with two major shaft sinking projects recently begun to replace older shafts nearing the end of their lives.
The 20 shaft, being sunk by Murray and Roberts Cementation, will be the last shaft in Impala’s main lease area to go down just over 1,000 metres; the others in the future will be deeper. The 20 shaft underwent its first blast for the main shaft sink in August 2005, with the pre-sink having been completed. The 20 shaft is at the northern end of Impala’s lease area next to the 12 North shaft, and it will produce 185,000 tonnes of reef a month. It will consist of a single large station below reef, with a decline system feeding upwards and another one feeding downwards. It is scheduled to begin its first production in 2007.
The 16 shaft system, which is being sunk by Shaft Sinkers, will reach a depth of 1,650 metres. It is at a very similar stage of development to that of the 20 shaft, with the headgear and pre-sink having been completed. The first blast for the main sink also took place in August 2005. At full capacity, the shaft will produce about 225,000 tonnes of reef a month. The concrete headgear, at 108 metres high, is the tallest in the world. There will be a downcast shaft for personnel, materials and rock, which will be the deepest, largest and highest tonnage shaft at Impala Platinum, and there will also be an upcast ventilation shaft. The 16 shaft is scheduled to have it first production in 2011.
The two new shafts when in full production will see an annual output of 355,000 ounces of platinum.
Not all of the current 1.85 million ounces a year and the future 2.3 million ounces of platinum a year are or will be all attributed to Implats itself. In addition to the Impala Platinum main lease area, contributors to the current total are Marula, the Aquarius Platinum operations, Kroondal and Marikana, the Zimbabwean operations, Mimosa and Zimplats, and toll refining, the majority of which is recycled autocatalysts. Barplats’ Crocodile River mine has also begun to contribute.
Aquarius, which has an off-take agreement with Implats, could also increase its contribution to the precious metal refinery in Springs. Output from Marikana could increase by 20,000 ounces of platinum a year and there are plans for the 140,000 ounce a year Everest South project.
One of the other sources from which the increase in refined ounces will come is the Two Rivers project, which is planned to produce 120,000 ounces of platinum a year. Implats announced the go-ahead of this project earlier this year, and the project will start production as early as next year.
Implats’ Marula mine which is being converted from a mechanised operation to a narrow reef winch-and-scraper operation is also planned to increase its output from the 30,000 ounces a year currently to 140,000 ounces of platinum a year by 2009/10.
Marula’s problems taught Implats a number of lessons it has taken to heart. Essentially the reason for the difficulties Implats had with Marula, and one of the reasons the eastern limb of the Bushveld has been said to be much harder to mine than the western limb, was that it embarked on a mechanised mining route there. Given the local geological conditions at Marula this method proved to be unsuitable for the orebody and it did not work.
“However, more broadly speaking an important lesson learned was the need to understand the orebody, therefore at Zimplats and Two Rivers we have undertaken trial mining.” Implats executive director Les Paton says. “This has proven the mining method and cycles for the machines at these operations. We have also learned important processing aspects, such as, for example, that a dense media separation plant at Two Rivers would not be justified.”
Two Rivers will not be a repeat of Marula, since, unlike Marula it lies south of the Steelpoort fault, where the reef width is wider and lends itself to mechanisation. In addition the platinum to palladium ratio is 5:3 at Two Rivers as opposed to 1:1 at Marula. Two Rivers was originally projected to get its goahead last year, but the projected return at the then rand price gave Implats and ARM pause for thought. It delayed to make sure of its mining method and the project economics.
Additional ounces for the platinum refinery at Springs will also come from Zimbabwe, where Mimosa is being expanded to increase production from 65,000 ounces of platinum a year to 80,000 ounces a year, and Zimplats plans to increase its output from 85,000 ounces a year to 150,000 ounces of platinum a year. Paton says that Zimplats would need to be producing about 250,000 ounces a year for it to be worth returning the original Zimplats base metals refinery into operation, so this output will add to the ounces for Implats’ refining complex in South Africa.
Mimosa, located on the Wedza geological complex, is a partially mechanised operation using LHD clearing and Novatec drill rigs. Paton describes it as a very efficient operation, and this is born out by it being at the lower end of the cost curve among platinum mines. It has grown rapidly from a 17,000 ounce a year operation to a 65,000 ounce a year operation, and it also offers high nickel and other base metal credits. Subject to Zimbabwean regulatory approval, relating to the financing of the expansion and exemption of duties, the increase in output to 80,000 ounces a year at Mimosa will go ahead. This expansion involves some debottlenecking of the plant and a new decline shaft.
Mimosa’s ore body ultimately can support an expansion to 135,000 ounces a year, double the current level of the operation. This would involve the expansion of the plant and a new decline shaft.
As an operation, the Zimplats orebody largely mirrors Mimosa, a difference being that the stoping width at Zimplats is 2.5 metres compared with 1.9 metres at Mimosa. Conditions in Zimbabwe have obviously inhibited Implats from undertaking rapid expansions at Zimplats, but it has given the company time to tune its operations there. The biggest outcome of this is that Implats is phasing out its high cost open pit operation, which has a stripping ratio of 14:1, and it is converting more rapidly to an underground operation.
“This makes a US$10/t difference,” Paton says. “We are reducing operations at the open pit by 50% thanks to this underground conversion.”
One of the problems for the open cast operation has been cost increases associated with the mining contractor Zimplats has been using. “The contract came up for renewal in October 2004, and apart from this contractor no one was interested in bidding because of the difficulty and expense of operating in Zimbabwe,” Paton says. “As a result the contract increased in cost by 31% in US dollar terms. Subsequently we decided to slow down on the open pit operation to reduce the stripping ratio and reduce cost as well.”
The underground project is earmarked for portals 2 and 4. The geological work has been done and the full feasibility work for production from portals 2 and 4 should be done by the end of this year. If this feasibility work is proven out the expansion to 150,000 ounces from these portals will take place and the open cast operation will be phased out over four years. Further expansions over the medium term (five to ten years in the future) to 500,000 ounces from Zimplats are still in place, subject to full feasibility.
Zimbabwe’s socio-political woes aside, Zimplats presents Implats with its biggest long term expansion option, with good economics. The expansion to about half a million ounces would take place at depths down to only about 400 metres. In comparison with the estimated cost of R5 billion (US$0.8 billion) for these 400,000 to 500,000 ounces, it is spending R6.6 billion (US$1 billion) to gain production of 350,000 ounces from the new Impala Platinum main lease area shafts 16 and 20 in South Africa.
The projects mentioned thus far together account for much of the Implats additional refinery capacity, and the company will also do toll refining. In addition to the precious metal refinery the Springs base metal refinery may be expanded to deal with input from the Ambatovy nickel project in Madagascar should it receive go-ahead. Paton says that project will ride on the back of the existing experience and infrastructure, and this will see it save a projected US$200 million. Looking further into the future, the search for additional resources has seen Implats increase its exploration budget from about US$1 million a year over the past couple of years to US$5 to 10 million for its 2006 financial year. This expenditure is separate from Implats’ evaluation drilling of reserves on its mining and project feasibility sites. The overall amount spent by Implats a year on exploration is R70 million (US$11 million) and this annual amount will remain steady. Instead, with a great deal of evaluation drilling now done, there is more scope for grass roots exploration.
However, the Bushveld Complex is well explored and those platinum group element (PGE) orebodies still to be explored are less favourable due to complexity, grade and depth.
“At the same time, not a lot has been found elsewhere in terms of platinum deposits over the past 20 years. Some of the old base metals projects are now being dressed up as nickel PGE projects, but they are not new,” Paton says.
From a PGE point of view, Implats is now prepared to look at nickel sulphide deposits in southern Africa where it can turn its refinery and base metals infrastructure to account. Implats is still looking for and acquiring ground, so Paton can’t speak in any detail about the focus of prospecting. However, he does mention that Mozambique has nickel potential, as does Zimbabwe. Botswana has nickel and PGE potential. Other countries with some potential are Namibia, Angola, Tanzania and the DRC, and Paton mentions Madagascar outside the laterites. Recently Implats did a complete review of Africa’s PGE potential, and this will influence its direction and thinking regarding exploration on the continent.
Offshore Implats still is active in Australia and Canada, as well as Brazil. It is using a combination of methods, including consultants in Canada and Australia, working with junior exploration groups, and it still has its alliance with Falconbridge. In terms of this alliance if Falconbridge finds a PGE project and it goes ahead Implats will fund work on it for a 50% share. I
mplats’ latest ventures in exploration, with it only now undertaking a higher level of grass roots exploration, take into account the company’s history. “When we were part of Gencor, that side of the business had most of the exploration and geological teams, other than two or three key people,” Paton says.
“Then in the 1990s we were in survival mode, and it would have been wasteful then to be undertaking that amount of exploration. We found one or two juniors to joint venture with and set up the Falconbridge deal, but we were careful as to how and where we spent our funds.”
Paton also says, “We tended to spend much more on our own properties to gain a good degree of geological comfort, in order to reduce risk.”
But now that Implats has included nickel into its exploration envelope, this has increased the range of possible PGE deposits of interest that can be found.MRA