The Witwatersrand Basin of South Africa is home to some of the deepest and largest underground gold mines in the world, including Driefontein, which has produced more than 93 million oz. since operations commenced in the early 1950s.
Last September’s appointment of Ian Cockerill, formerly of AngloGold, as managing director of Gold Fields, was viewed by many analysts as a positive step towards achieving that goal. Cockerill played a major part in the restructuring of the Anglo American gold interests into AngloGold.
The Driefontein complex covers some 49.7 sq. km of mineral rights and leases in the magisterial districts of Oberhozer and Potchefstroom, 72 km west of Johannesburg. The complex consists of the west and east divisions, which, though they merged in 1981, have historically operated as two separate mines.
Gold mineralization occurs at depths of between 1,000 and 4,000 metres below surface and is hosted predominantly in two separate orebodies: Carbon Leader Reef (CLR) and Ventersdorp Contact Reef (VCR). The Middelvlei Reef is also a minor contributor.
The complex has a total of 15 shaft systems and two separate metallurgical plants, which have a total processing capacity of 400,000 tonnes per month. Additional surface resources are processed through an independent 115,000-tonne-per-month tailings reclamation plant.
In the fiscal year ended June 30, 1999, gold production totalled 1.49 million oz., compared with 1.54 million oz. in 1998, whereas cash costs fell by 16% to US$199 per oz. Underground working costs averaged R401 per tonne, or US$66 per tonne. Production was affected somewhat by a seismic event in the No. 5 shaft area. During fiscal 1999, 5.5 million tonnes of underground and surface material averaging a head grade of 8.5 grams were milled, versus 5.2 million tonnes grading 9.3 grams in the previous year. Capital expenditures amounted to US$52.7 million, a reduction of US$29.8 million from fiscal 1998.
Driefontein generated net earnings (after exceptional items) of US$2.5 in 1999 on gold sales of US$427 million, compared with US$180.5 million in earnings in 1998, and US$98 million in 1997.
The first quarter of fiscal 2000 was a disappointment for Gold Fields. Despite an increase in tonnage milled, output at Driefontein was down 18,200 oz. from the previous quarter at 332,900 oz., while cash costs were up 8% at US$238 per oz. Underground working costs rose to R532 per tonne (US$87 per tonne). A seismic event at the No. 4E shaft and a drop in mining grades were to blame. The mine had a net loss of US$8.7 million for the period.
In the second quarter ended Dec. 31, 1999, production was up 11% over the previous quarter, at 370,200 oz., while cash costs came down by 9% to US$217 per oz. Underground working costs underground were slightly higher at R539 per tonne (US$88 per tonne). Milled ore included 932,000 tonnes from underground operations grading 11.5 grams and 366,000 surface tonnes at 2.2 grams, versus 928,000 underground tonnes at 10.1 grams and 452,000 surface tonnes at 2.2 grams in the September quarter. The turnaround in performance is attributed to improved mining efficiencies.
Driefontein generated an operating profit of US$25.7 million for the 3-month December quarter and had net earnings after exceptional items of US$17.8 million.
For the first six months of fiscal 2000, ended Dec. 31, 1999, Driefontein has produced a total of 703,100 oz. at a cash cost of US$227 per oz. from a milled 2.7 million tonnes of combined underground and surface ore averaging 8.2 grams. The mine had an operating profit of US$26.2 million and net earnings (after exceptional items) of US$9 million for the half-year period. Capital expenditures for the first six months totalled US$14.7 million, with a further US$14.9 million planned to June 2000.
During a recent underground tour, The Northern Miner learned that the key to unlocking Driefontein’s value lies in its workforce. The objective of the company is to improve productivity, while, at the same time reducing serious rock fall accidents. Seismic activity is one of the major risks inherent in deep-level mining in the Witwatersrand Basin. During the 1999 financial year, Gold Fields’ mines recorded 3,195 seismic events, each of which had a magnitude of greater than one. A total of 50 lives were lost during the year, corresponding to 0.32 fatalities per million man-hours.
A typical blast advances a stope face by approximately 1 metre. Wayne Robinson, managing director of the Driefontein complex, said the miners are currently averaging an advancement of 9 metres per month, while the quantity of ore broken per man per month averages 3.6 sq. metres per total employee costed. Gold Fields is aiming to achieve a “safe quality daily blast” on every face operated. An in-house training program will result in having a panel miner, with a blasting certificate, on every face. Robinson said the goal in the next couple of years is to average 5 sq. metres per total employee costed.
The company has also conducted multi-task training programs in a bid to reduce the size of the mining teams. Currently, there are 19,000 employees at Driefontein. The company’s objective is to reduce the size of its workforce to about 13,000 in the next 3-5 years.
Deep levels
The mines operating in the Witwatersrand Basin are all deep-level operations exploiting gently to moderately dipping, gold-bearing quartz pebble conglomerate horizons termed “reefs.” These operations together have produced more than 40,000 tonnes of gold over a period exceeding 100 years.
The Witwatersrand Basin comprises a 6-km vertical thickness of argillaceous sedimentary rocks in the Kaapvaal Craton, extending laterally 300 km east-northeast and 100 km west-southwest. The sedimentary sequence generally dips at shallow angles towards the centre of the basin, though this may vary locally. The northern extent of the basin outcrops south of Johannesburg, but farther to the west, south and east, it is overlain by up to 4 km of a variety of Archean, Proterozoic and Mesozoic volcanic and sedimentary rocks. The Witwatersrand Basin is Archean in age, while the sedimentary package is considered to be in the order of 2.7-2.8 billion years old.
The gold-bearing reefs occur in separate goldfields scattered along the eastern, northern and western margins of the basin. The goldfields are not continuous, owing to faulting and other primary controls on mineralization, and are characterized by the presence or dominance of different reef units. Driefontein occurs in the West Wits Line goldfield.
The reefs are generally less than 2 metres in thickness and considered to represent laterally extensive braided fluvial deposits or unconfined flow deposits. The primary controls of gold distribution are the sedimentary features, such as facies variations and channel directions. The gold generally occurs in native form, often associated with pyrite and carbon. In some reefs, uranium has been mined in addition to gold.
Carletonville
Early exploration work in the 1890s identified the Witwatersrand conglomerates in the Klersdorp area, southwest of Johannesburg, but it wasn’t until the early 1930s that Carletonville goldfields were discovered. Rudolf Krahmann, a German mining engineer, believed that the magnetic shale horizons mapped in the West Rand Group could be used to predict the overlying gold-bearing Main Conglomerate Formation. Krahmann began experimental geophysical work using a newly developed highly sensitive magnetometer and, between 1930 and 1932, conducted 530 km of traverses, outlining the Witwatersrand Basin.
The West Wits company was formed, and intensive drilling resulted in the 1
934 discovery of the CLR, a reef with a thick carbon seam at its base and visible gold in the main conglomerate formation. Later, in 1936, a gold-bearing conglomerate found at the base of the Klipriviersburg lavas was identified and named the VCR.
Further development of West Driefontein was delayed until after the Second World War but was spurred on by the Venterspost mine, which was mining the VCR, and by the Blyvoorruitzicht Gold Mining Co., which was enjoying success on the CLR. West Driefontein commenced production in 1952. East Driefontein didn’t come on-stream until 1972.
The CLR is one of the most extensive orebodies in the Witwatersrand Basin, underlying an area of about 400 sq. km. It is a high-grade reef found at the base of the Central Rand Group, above a subtle, low-angle unconformity. At Driefontein, the reef strikes east-southeast and dips to the south at 25. It is underlain by grey quartzites and overlain by a narrow quartzite package capped by a distinctive green-grey siltstone marker unit. CLR is characterized by various facies types ranging from single-band to multiple-band conglomerates,
VCR reef
The VCR is the uppermost economic reef in the Witwatersrand sequence, developed above a pronounced angular unconformity. The VCR is extensively developed at the East division, where a complex facies assemblage has been recognized.
With 15 shaft systems, the Driefontein complex has a complicated mining infrastructure. Gold Fields is currently mining from seven sources within the two mine divisions. Mine Manager Ken Collette said the company’s plans over the next five years entail closing down a lot of that infrastructure. “We will eventually have only three big operations,” said Collette. “We will stick with the 1 Tertiary-E, No. 5E and No. 4E shaft systems.”
The company is also making the switch to what it says is a more cost-effective and safer deep-level mining method, sequential grid mining. Currently, scattered and remnant mining methods are used in the older parts of the mine to depths of 1,500 metres, while longwall methods traditionally have been used in the deeper areas of the mine.
According to Collette, the advantages of sequential grid mining are that it:
– keeps energy release rates to an acceptable level;
– increases productivity;
– allows pillar location on geology or in low-grade ground;
– provides good advanced information on geology and reef grades;
– requires less linear development than a mini-longwall system; and
– assists with effective management of seismicity.
At the moment, 15% of the mining is carried out by sequential grid, and there is a 5-year target to increase this to 70%.
Tertiary shaft
At June 30, 1999, the Driefontein mineral resource totalled 117.3 million tonnes grading 14.5 grams, equal to 54.6 million oz. Proven and probable reserves above the 50-level were estimated at 68.4 million tonnes grading 10.6 grams gold per tonne, equivalent to 23.3 million contained ounces. A further 49.8 million tonnes grading 8.8 grams, or 14.1 million oz., sit below the 50-level at depths exceeding 3,500 metres.
Gold Fields has yet to make a decision on the future of the No. 5E tertiary shaft expansion project, which would provide access to those ounces at depths below 3,500 metres. According to Brenton Saunders, an analyst with Fleming Martin Research, the project needs a minimum gold price of US$306 per oz. to meet the hurdle rate of about 11%. The estimated cost is about R2.5 billion (or US$375 million). The project has about a 5-year lead time, with a payback of about 10 years.
Driefontein operates two primary gold plants, East division and West division, as well as a secondary reclaim plant at West division, designed to treat surface waste dumps. The East plant, commissioned in 1972, has a current maximum capacity of 240,000 tonnes per month. It utilizes conventional 3-stage crushing, rod and pebble milling followed by hydroclones, pulp thickening, pre-aeration, air-agitated leaching, drum filtration, zinc precipitation and smelting to produce dor bars that are 88% pure. Gold recovery for the past three months has averaged 97.2%.
The West plant has a normal capacity of 240,000 tonnes per month. It is divided into two crushing sections designed to treat the VCR and CLR ore separately. The milling circuit is also divided into a high-grade (ball and pebble mill) and low-grade (rod and pebble mill) section that relate to the previous treatment for uranium. The circuit includes hydroclones, pulp thickening, air agitated leaching, drum filtration, zinc precipitation and smelting to produce dore. The plant averages a 95% gold recovery.
Once operations have been trimmed back to just three shaft areas, there will only be the need for one processing plant. Gold Fields is currently examining the feasibility of constructing a 300,000-tonne-per-month plant that would utilize four ball mills. Capital costs are estimated at US$70-80 million.
Recent published reports in South Africa suggest that in the past 10 years, theft in the gold industry has become exponential, and producers may be losing as much as 10% to theft. Willie Jacobsz, investor relations manager, said Gold Fields began to realize the extent of the problem two to three years ago, and has taken added measures, including the installation of security perimeters, cameras and motion detectors in and around the recovery plants.
Cost-cutting
Collette is confident Gold Fields will be able to reduce underground costs per tonne from current levels of R539 per tonne (US$88 per tonne) to below R400 per tonne (US$65 per tonne) and ultimately R350 per tonne (US$57 per tonne). “The major issues are the number of shafts open at this time,” said Collette. “Reducing that ultimately over the next five years to three big shafts, and moving from scattered and longwall mining to a more productive sequential grid mining is the key.”
Gold Fields also owns and manages the Kloof, Beatrix, Oryx and St. Helena underground gold mines in South Africa, as well as the 71%-owned Tarkwa open-pit mine in Ghana. The major has 146 million attributable ounces of mineral resources, including 74 million attributable ounces of proven and probable reserves.
The South African major is expected to produce more than 4 million oz. in fiscal 2000 at a cash cost of US$221 per oz. The company has 453 million shares outstanding.
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