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Gold mining company Harmony Gold on Tuesday announced a programme to improve the human dimension of safety and productivity by combining cultural transformation with technological advancements.

The target of the Safety 300, or S300, programme is to safely lift the output per mining crew from the current average of 260 m2 per crew per month to 300 m2 per crew per month. (Also watch attached Cramer Media video.)

Investing in grade is also poised to drive down costs over time, with Harmony’s experience in operating in higher inflation environments allowing an 8% cost inflation level for planning amid experiencing a below-inflation 6% rise in fixed wages in its 2022 financial year.

As a percentage of South African cash costs, the labour cost has fallen 2%, from 60% to 58% in the 12 months to June 30.

To manage higher Eskom electricity tariffs, Harmony has an initial 30 MW solar project under construction in the Free State and a far larger 130 MW renewable energy plant on the way.

Mines affected by the higher diesel prices are very much in the minority – Hidden Valley in Papua New Guinea (PNG), and in South Africa, the opencast Kalgold mine and mechanised Target 1 mine.

The margins from the large underground Moab and Mponeng mines as well as the surface operations provided a production profit of R9.5-billion.

The once-troubled underground Kusasalethu mine returned more than R800-million in free cash, and additional controls at Hidden Valley have reduced the risk of another conveyor belt failure.

“In addition to investing in our grade, investing in our people is delivering meaningful returns,” said Harmony CEO Peter Steenkamp during the company’s dividend-yielding presentation of results for the 12 months to June 30. A final dividend of 22c a share on top of the interim dividend of 40c a share took the total for the financial year to 62c a share.

“There is a clear link between execution excellence and productivity. Some of our crews are already mining at 700 m2 per crew per month, so there's a significant opportunity to improve overall productivity.

“S300 is humanity at work. It's about developing the human part of our business to achieve the art of the possible,” said Steenkamp.

During question time, Nedbank market research head Arnold van Graan requested that the S300 programme be outlined in practical mining terms and asked how the 10% to 15% increase in productivity would be achieved.

In response, Harmony COO South Africa Operations Beyers Nel elaborated on the company’s detailed plans to optimise output at the rockface, fine-tune shift cycle, and implement appropriate technologies in narrow-reef underground mining environments.

“Productivity improvement is identified as a clear aspect of our business that we are looking to improve. In a growth environment, productivity is a fairly cheap improvement if you can realise it,” said Nel.

“At the moment, our run rate is about 260 m2 per crew per month and we're looking to improve that to S 300, or 300 m2 per crew monthly.

“We’ve got a well-resourced business improvement platform now going in Harmony in the South Africa exco office,” added Nel, referring to the slide displayed showing facetime optimisation, shift cycle optimisation and the responsible use of technologies.

Faster drilling rates are being targeted to increase safe, quality blasts per day.

“So it's not rocket science. It's real practical mining stuff, and if you look at our output per crew, although their average is around 260, you've got crews doing 200 and crews doing 700, so it's basically moving that mean to the 300 through well-resourced, well-equipped and safe work.

“A crew in good environmental conditions is a productive crew and we're working really hard on the South African operations to grow the business in the South Africa context around productivity improvement and driving the costs down with some higher grades that we’re also targeting,” said Nel.

DEVELOPMENT GRADES ‘DRAMATICALLY HIGHER’

In view of grades ...

Time will be spent this year on doing feasibility studies relating to the deepening of the Mponeng gold mine on the West Rand, Harmony Gold CEO Peter Steenkamp said on Tuesday.

In response to Afrifocus Securities analyst Des Moines on how important Mponeng woud be in the years to come, Steenkamp said in his view it would be very important. (Also watch attached Creamer Media video.)

“We haven't made that final decision yet. This year we're going to spend time on doing the feasibility studies,” said Steenkamp.

The studies would go beyond the deepening part of the Ventersdorp contact reef (VCR). The VCR is an Archaean conglomeratic gold placer, mined in the Carletonville, West Rand and Klerksdorp goldfields.

Steenkamp said that with deepening, much of the carbon leader reef (CLR) would also be included. The CLR, a metre-thick conglomeratic unit with a thin bituminous base, is one of the major gold-bearing conglomerate horizons in the central rand group of the Witwatersrand basin.

“But then we’re also looking at the extraction of gold from the Tau Tona and Savuka shaft pillars,” added Steenkamp during question time covered by Mining Weekly.

Harmony is working very closely with the University of Pretoria as the sponsor of the university’s rock engineering chair.

With Bambanani, much work was done to match the extraction rate of Bambanani shaft pillars to the the mining itself to manage seismicity and much intellectual property (IP) was gathered on shaft pillar extraction in general.

“We think that the IP that we created by doing all of that will probably help us to mine the Tau Tona and Savuka pillars”, projects that have still to be approved.

Regarding Mponeng, Steenkamp expressed confidence in the grades that are available at Mponeng going forward and expressed the view that the deepening of Mponeng was likely to be given the go-ahead.

“We’ll most likely give it a go, but again, we still have to take it through the proper approval process. It is certainly a fantastic orebody and will add about 30 years of life to the current Mponeng mine.

On the potential shaft pillar projects, he said: “The Tau Tona and Savuka shelf pillars are about the same size as the Bambanani shaft pillar, and we have four shelf pillars in Tau Tona and Savuka, on the carbon leader and the VCR.

“There has been some mining in the past and so not all available, but it is potentially three or four Bambanani’s that are out there.

“Bambanani is now closed but we mined about 84% of the gold and it was a massively profitable project for us over time and done very safely, so we’re confident that we've got the IP to do that mining,” he added.

Shirley Hayes, the founder and CEO of SHiP Copper, into which Big Tree Copper will be reversed when Copper 360 lists on the AltX of the Johannesburg Stock Exchange (JSE) next month, on Monday shed more light on the way forward for what will be South Africa’s only pure copper play on the JSE.

“It makes sense to combine the two companies through a reverse takeover, where SHiP takes over Big Tree Copper through reversing SHiP’s assets into Big Tree,” Hayes told Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

SHiP is a majority women-owned copper company that was founded in 2008. Big Tree Copper, headed by seasoned campaigner Jan Nelson, is already in low-cost surface production of copper through a solvent extraction electrowinning (SX-EW) plant, which the company designed and built innovatively.

“Between the companies, we’ve got scalability, which SHiP brings to the table,” said Hayes.

Production, technologically advanced process capability, synergies, cash flow, dividend policy and offtake are ready-made in the mix.

Big Tree exports one-metre by one-metre copper plate that is 6 cm thick. Each plate weighs about 38 kg and contains 99.89% copper in an area where the copper is said to be exceedingly pure.

SHiP’s orebodies are shallow, and Big Tree has a 15- to 20-year life on the surface material currently being processed. In addition, it is looking at developing the Carolusberg tailings dam, which has about 40 000 t of recoverable copper in it that was mined by Newmont in the old days.

Initial capital required to turn Rietberg mine and plant to account and to develop another concentrate plant on the slag on Big Trees’ operations at the Cape Copper Oxide, Nababeep, would be of the order of R350-million, Hayes calculated.

Openpit pre-development to orebody is already taking place at Rietberg, where a moderately sized 50 000 t a month plant is focused on value rather than on volume. Once Rietberg has been fully developed, which is expected to take about eight months, SHiP will begin development of its Jubilee Wheal Julia openpit complexes, with the additional future funding for the development of more of SHiP’s openpits and other operations coming largely from debt and the balance sheet.

Copper 360 will also hold the Cape Copper Oxide Company and the Okiep Copper Company, and it will hold SHiP. The combined company will own most of the copper district.

Hayes described the offtake agreement with Noble Metals as having very favourable terms as well as considerable flexibility.

Mining Weekly: Are you finding an appetite for investment in copper from local investors?

Hayes: Absolutely, yes. To date, the capital for Big Tree, in which I'm a personal shareholder as well, has come from private high-net-worth individuals in South Africa. Every day, we’re getting phoned by people wanting to know when we’ll list because they want to invest, so there's no shortage of appetite because we will be offering the only pure copper play in South Africa. Our orebodies are on surface or shallow. In the case of Big Tree, it requires no mining so we are on the lowest cash quartile of producers in the world. We have a high margin and we already have, as a result of Coronation’s investment in the company and a commitment to Coronation that we will be paying 30% pre-tax dividend from our profits, a dividend arrangement. We have a fantastic growth profile and we don't have to go anywhere else. It's all in one area. We own a whole copper district. We have copper, we have got scalability, we have got cash flow, and that's why we're getting interest from people that want to invest in the pure copper play like ourselves because there is no other.

Will the copper from SHiP mines be locally beneficiated into copper plate by Big Tree Copper?

There are two processes that we need to differentiate. When we mine the shallow ore, the oxide ore, we produce copper plate through the SX-EW solvent extraction plant. The plant, however, cannot t...

Batteries are fast becoming the core of modern energy systems and more sustainable economies, underpinning the implementation of smart grids and minigrids, while fostering the rollout of renewable energy and e-mobility, and yet, South Africa’s involvement in the battery value chain remains limited.

Trade and Industrial Policy Strategies chief economist Gaylor Montmasson-Clair questions whether South Africa will be an importer of batteries only, or if it will manage to become a part of the value chain.

He explains that lithium-ion battery (LIB) cells consist largely of four components: a cathode that determines capacity and average voltage of a battery; the anode that comprises the negative electrode; an electrolyte solution; and a separator, which determines the safety of a battery, preventing short circuiting and overheating.

In turn, there are six types of LIBs – lithium/nickel/cobalt/aluminium, lithium/manganese oxide, lithium iron phosphate and lithium/nickel/manganese/cobalt.

Montmasson-Clair says South African stakeholders need to understand where niche markets lie in this regard. China currently dominates LIB production, while there are also some production facilities in the US and European markets.

The market has, therefore, already been captured by a few key players, including Panasonic, CATL and LG Chem; however, South Africa can still get involved in the battery value chain, he says.

He believes South Africa has the relevant skills and expertise in mineral beneficiation, with entities such as minerals specialist Mintek and with battery-related manufacturing companies, as well as an endowment of some of the minerals used in LIBS, such as manganese.

Montmasson-Clair mentions that neighbouring countries such as Zimbabwe have lithium, which South Africa can leverage. If South Africa gets serious about cell manufacturing, it can access copper from the Democratic Republic of Congo (DRC) or Zambia, cobalt from the DRC and Madagascar, graphite from Mozambique, Tanzania or Madagascar, nickel from Zimbabwe and Botswana and phosphate rock from Morocco, Algeria or Egypt.

As it stands, South Africa only beneficiates manganese and aluminium to battery grade, while nickel and lithium beneficiation is in the pipeline.

Montmasson-Clair points out that Manganese Metal Company, in Nelspruit, is the only company in the world, outside of China, that refines manganese to battery grade. The company produces about 28 000 t/y of electrolytic manganese metal for use in high-purity manganese sulphate, and in cathode.

While Montmasson-Clair is confident that South Africa has the industrial capacity and know-how to manufacture LIB cells, but says there is but one pilot plant for this in the Western Cape.

South African company Metair produces battery cells, but does so in Turkey and Romania, owing to it being more economically viable than producing these in South Africa.

Some companies such as AutoX and MegaMillion aim to develop cell manufacturing capability in the country, but it remains to be seen if these plans will proceed.

Moreover, Montmasson-Clair explains that battery manufacturing based on imported cells, since cell manufacturing is more costly to start up, is a more vibrant prospect in the country.

He confirms that numerous firms have developed intellectual property and expertise in the manufacturing of specific component parts of batteries, such as casing, and in the assembly of battery packs.

In some cases, companies have used this expertise to develop additional offerings, such as specialised vehicles. “Perhaps these companies can tap into cell manufacturing,” he suggests.

Looking at battery recycling, Montmasson-Clair says South Africa has companies involved in marketing second-life batteries on the local market and that only a few facilities globally are in a position to effectively recycle LIBs.

Montmasson-Clair explains that South Africa may not be able to compete with leading firms in terms of cell manufacturing and may als...

The renewable energy plans of the Booysendal platinum group metals (PGM) mine of Northam Platinum been detailed quite extensively in the company’s 95-page sustainability report that will be available shortly online, Northam Platinum CEO Paul Dunne said on Friday, when the Johannesburg Stock Exchange-listed company reported a solid set of financial results for the 12 months to June 30.

The largest of the three solar installations at the moment is the 11 MW solar installation, which is under construction at Northam’s Zondereinde PGM mine, and then the commissioning of smaller installations at the Eland and Booysendal PGM mines. (Also see attached Creamer Media video.)

“We’re also looking at two wind projects and they would be done as an off-balance-sheet power supply agreement,” Dunne said in response to Mining Weekly during question time.

“There are not that many wind projects available in South Africa outside of the Renewable Independent Power Producer Programme, the REIPPP programme. We’re all very jealous about accessing wind power and we don’t want to be gazumped. But it looks like we’ve secured two wind opportunities, wheeling power.

“But we’re not ready to make a formal announcement just yet, but it looks like we can secure that wind. A combination of all those projects should enable us to generate about 50% of our energy needs by the end of this decade,” he added to Mining Weekly.

Regarding the generation of green hydrogen from the renewable energy as a diesel substitute for Booysendal’s mechanized fleet, he said: “Not yet.”

Mining Weekly Editor Martin Creamer discusses DRDGold monitoring its tailing dumps using satellite imagery and drone surveillance; Merafe's plans for 744 MW of energy; and a new Southern African green hydrogen atlas that is set to be launched before the end of the year.

Platinum group metals company Northam, which refined 9.7% more metal than the prior year in the 12 months to June 30, on Friday forecast capital expenditure (capex) of R5.4-billion for the current 2023 financial year – up on the R4.6-billion of 2022, and reflecting the progress of its expansionary projects.

The year’s lower metal prices and the above-inflation cost environment, offset a 12.8% growth in sales volumes for the Johannesburg-listed company, headed by CEO Paul Dunne, which reported 48.3%-margined earnings before interest, taxes, depreciation and amortisation (Ebitda) of R16.5-billion on refined metal up at 716 488 four element (4E) ounces.

Revenue of R34.1-billion, operating profit of a 7.6%-lower R14.9-billion and after-tax profit of R9.8-billion were achieved in the 12 months to June 30 when unit cash costs rose 18.9% to R34 069 per platinum ounce amid lower 4E metal prices.

With group generated cash flows from operating activities of R11.4-billion, Northam invested R8.4-billion in the composite Transaction and a further R8.4-billion in the Royal Bafokeng Platinum (RBPlat) acquisition.

This, together with ongoing investment in expansionary capex resulted in net debt increasing to R16-billion, including the deferred portion of the purchase consideration relating to the acquisition of the RBPlat shares, amounting to R1.7-billion as at June 30.

Commenting on the group’s debt position, Northam CFO Alet Coetzee reiterated the company’s comfort with a self-imposed long-term net debt to Ebitda ratio of 1 to 1 in the pursuance of the group’s growth strategy.

At financial year-end, the debt ratio was 0.97, falling within the self-imposed target.

Coetzee pointed to the net debt approximating the value of Northam’s 34.52% investment in RBPlat, which is a liquid asset, and the R18.8-billion year-end value of 4E inventory.

The share of earnings from RBPlat amounted to R777-million, and the holding enabled Northam to benefit by a total of R781.7-million from two dividends declared by RBPlat.

SOLAR POWER FARM

Work has started on the development of an 11 MW solar power farm to provide electricity to the metallurgical complex. The design and permitting phases have been concluded and earthworks are in progress.

With recycling, a measured approach is being maintained. A dedicated smelter circuit to treat recycling material at the Zondereinde facility was commissioned in May 2022, enhancing ability to treat high-grade recycling products from various sources.

PROSPECTS FOR YEAR AHEAD

Looking to the future, Dunne pointed to the three upper group two (UG2) mining modules at Booysendal South being commissioned and engineered and contributing to the group production forecast in a range of 770 000 oz 4E to 810 000 oz 4E.

At the same time, Dunne cautioned that key factors critical in impacting future financial results would be safety performance and health and wellness of employees, growth strategy delivery, the results of project execution phases, and the success of developing optionality in the market

TWO FATALITIES AT ZONDEREINDE

Eastern limb community unrest and lower ore grades lowered Booysendal production and Zondereinde tragically suffered two mining-related fatalities. Booysendal’s fatality-free safety record remained intact.

Growth projects at Zondereinde’s western extension and Booysendal’s South mine progressed while Eland’s ramp-up continued, with synergistic benefits from Maroelabult.

The development of Booysendal South is progressing well despite work stoppages due to community unrest in the region. Underground development and stoping ramp-up at Booysendal South’s central UG2 modules is progressing and decline development at the south Merensky module is on track.

Underground stoping has commenced at the BS4 UG2 module and will ramp up over the coming 12 months.

The Booysendal North aerial rope conveyor, commissioned in December, is operating within design parameters.

At Eland mine, processing of ore from surface sources co...

NYSE- and JSE-listed Gold Fields has generated an attributable profit of $510-million for the six months ended June 30, and declared an interim dividend of R3, or $0.18, apiece.

This compares with an attributable profit of $387-million and a dividend of R2.10, or about $0.12 apiece, for the six months ended June 30, 2021.

While attributable profit grew by 24% year-on-year, the interim dividend increased by 43% year-on-year.

CEO Chris Griffith says that, although the period saw an operating environment dominated by elevated mining cost inflation, as a result of rising commodity and fuel prices, Gold Fields contained the rise in its all-in costs (AIC) to only 6% year-on-year, to $1 352/oz.

The company operates nine mines across Australia, Peru, South Africa, Ghana and Chile, reporting attributable production of 1.2-million ounces of gold for the six months under review, compared with the 1.1-million ounces produced in the six months ended June 30, 2021, marking a 9% year-on-year increase.

The 3% higher gold price this year helped the company to increase its normalised earnings by 16% to $498-million, or $0.56 apiece, compared with the prior interim period’s normalised earnings of $431-million, or $0.49 apiece.

The group also grew its adjusted free cash flow by 63% year-on-year to $293-million.

Gold Fields managed to reduce its net debt by $120-million in the reporting period, with the net debt balance at the end of June standing at $851-million.

The company leaves its cost guidance for the year unchanged at between $1 370/oz and $1 410/oz, excluding the Asanko operation, as higher-than-expected mining inflation is being offset by weaker exchange rates and higher-than-expected copper by-product credit.

Gold Fields forecasts mining inflation reaching 10.9% by the end of the year.

Attributable gold production guidance for the full-year remains at between 2.25-million and 2.29-million ounces, excluding the Asanko operation, which, if included, may see attributable gold production range between 2.31-million and 2.36-million ounces.

Meanwhile, Gold Fields says its Salares Norte project, in Chile, is 77% complete, with construction progressing well.

The company highlights that it has managed to keep the project on track through the challenges of the past two years, including Covid-19 and severe weather events; however, more severe weather events in recent months have resulted in marginal delays in the project timeline.

Gold Fields estimates a three-month delay in the start of production, and, consequently, there may be a knock-on impact in the ramp-up to full production.

The company hopes to start operating the mine in March next year, which should result in 200 000 oz of gold being produced in 2023. Should the mine only start operating at the end of April, however, it will produce closer to 165 000 oz for the year.

The company spent $172-million on developing the project in the six months under review. The project capital expenditure (capex) is expected to be about 5% higher than the original guidance of $86-million, given the potential delay in production.

Overall group capex increased by 20%, from $456-million in the prior half-year to $545-million in the reporting half-year.

In South Africa, Gold Fields reported an increase of 28% in attributable gold production from the South Deep operation to 158 000 oz.

Gold production at the Australian operations increased by 10% year-on-year to 527 400 oz, owing to higher grades of ore mined and processed at the Agnew, Granny Smith and Gruyere operations.

Cerro Corona, in Peru, posted 31% higher interim production of 129 300 oz, mainly owing to higher grades of ore processed and higher recovery rates achieved.

Attributable gold production from the West African operations, including Damang, Asanko and Tarkwa, came in 4% lower at 401 000 oz in the period under review, mainly owing to planned lower production from Damang and Asanko, the latter of which Gold Fields has a 45% stake in.

Gold Fiel...

Energy solutions that reverse climate change are on the list of strategic differentiators that Sibanye-Stillwater has under scrutiny, Sibanye-Stillwater CEO Neal Froneman said on Thursday, when the Johannesburg- and New York-listed platinum group metals (PGMs), gold and green metals company reported its third-biggest half-year profit of R12.3-billion.

The concept of energy solution involvement has been a strategic addition since the beginning of the year and the envisaged involvement is at the grid storage end of energy solutions with redox batteries, vanadium, and molten salt grid storage solutions that use antimony.

“We do expect, over a long period, to become more involved in energy solutions,” said Froneman in response to Bank of America analyst Patrick Mann, who had asked whether being involved in energy solutions that reverse climate change included renewable energy.

“But this is not, let's call it, the type of energy solutions you've seen most companies moving towards, which is really renewables,” said the head of the company that is becoming increasingly involved with green metals including lithium hydroxide and nickel sulphate as battery metals.

“We are primarily a mining company, and our focus remains on producing metals. We do believe, over an extended period, that having some exposure to the downstream side of certain businesses is valuable and appropriate,” said Froneman at the presentation covered by Mining Weekly.

“It's been a very different approach to most other PGM producers, so when we talk of energy solutions, we are probably more focused on, let's call it, grid storage solutions.

“Yes, solar panels use silver. Silver’s a good commodity, should we come across a good project it could well take us into the commodity of silver, but things like redox batteries, vanadium, there are other molten salt grid storage solutions that use antimony, those are all things that are currently under investigation and therefore, I anticipate that you will see an evolution of the portfolio of metals that we are focused on growing to include some of those.

“In ten- or 15-years’ time, there could be an energy division, but that's not our primary focus now. I want to, again, just say we’re primarily a mining company, we’re focusing on the metals that provide energy solutions and we may become involved in the downstream and upstream sides of the energy solutions business. I hope that gives you some clarity in terms of what we mean by energy solutions,” Froneman added.

ILLEGAL MINING

Also, in response to a question on the role Sibanye-Stillwater would play with other stakeholders to voice concern about illegal mining by Zama-Zamas, Froneman said the company had highlighted the illegal mining issue for many years and had incurred considerable expense in dealing with illegal mining, which had even led to the company having to close shafts prematurely.

“It’s a tremendous problem,” he said, adding that a state of emergency should be declared to put an end to illegal mining.

“We should involve the military. It’s something we have requested special assistance for from the police.

“It’s not going to be solved by dealing with the obvious issue of the illegal miners. We’ve got to address the syndicates; we’ve got to deal with this internationally and stop just focusing on the individuals that are abused at the lower end of illegal mining.

“We’ll continue to engage with international organisations, we’ll continue to be involved with Minerals Council South Africa and local institutions that should be dealing with it, and we’ll continue to see what we can do as a company to get rid of this scourge.

“It happens because of a lack of jobs. It’s a poverty issue, so this is the manifestation of low economic growth as well. It’s a big issue and much more complex than the poor illegal miners that we continuously arrest. We really need to get to the people who sit behind this,” said Froneman.

MARIKANA RENEWAL

In 2020, Sibanye-Stillwater introduced t...

Surface gold mining company DRDGold on Wednesday announced its fifteenth consecutive financial year of dividend paying.

For the year ended June 30, the Johannesburg- and New York-listed company, headed by CEO Niël Pretorius, declared a final dividend of 40c a share, totaling a distribution of 60c a share for the 12 months.

DRDGold generated R871.6-million in free cash flow for the year, supported by a gold price off recent highs but still robust.

In a release to Mining Weekly, Pretorius portrays the financial year for the company, South Africa and the world as being characterised by a ‘litany’ of challenges less to do with Covid and more to do, in South Africa, with:

infrastructure theft and decay;

lack of deployment of resources by those responsible for the protection of lives and property;

an angry society, community violence and violent crime;

labour unrest;

deteriorating service delivery; and

the soaring cost of basics required by business and communities.

On a global scale, Pretorius cites the challenges posed by climate change and war. Against that background, DRDGOLD had held its own.

“One of the core principles that informs our strategic thinking is that, to thrive well, you need to survive well.

“In practice this means that, for many years, we have deliberately invested in capital and developing a system to increase business resilience and robustness. This approach has carried us through,” said Pretorius.

Looking ahead, DRDGold remained committed to investing in the sustainability and growth of its business, growing capital investment from R584.1-million to R700-million in the financial year, now under way.

Although the latest Fraser Institute report flags South Africa as the fourth-worst mining jurisdiction out of 185 surveyed internationally, this did not mean that it was impossible to thrive in this jurisdiction – “it simply means that the standard of political governance is not such that it enables and promotes business”.