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By Denby B, Hollands R. Schofield D

Surface mines are in operation worldwide, the vast majority employ large haul trucks for the transfer of material both to the outside world and around the site. The sheer size of these trucks and the operating conditions means there is a high

Jan 1, 1998

By D Wimpenny

The Bogong Power Development Project in Victoria, Australia involved the construction of a 15 m long mass concrete plug up to 9 m in diameter within the head race tunnel. The plug is critical to theperformance of the scheme as it permanently seals the head race tunnel under approximately 300 m head of water.The location of the plug in the headrace tunnel was determined by a programme of in situ rock stress testing using both hydrofracturing and over coring stress testing methods.In recognition of the importance of the plug, the Head Contract specification requires that its temperature during hydration be controlled using an embedded cooling system. In addition, contact grouting and curtain grouting around the plug cannot commence until thermal contraction was substantially complete.This paper describes the use of bespoke fi nite element software to model the temperature rise in the plug and design mitigation measures to control temperature rise in the plug. These measures include restricting the concrete placing temperature to 10°C, incorporating 39 per cent fly ash in the concrete and installing embedded cooling circuits.Site trials were undertaken to calibrate the model for the proposed concrete mix. The cooling system comprised 25 mm ID pipes forming twelve separate circuits that fed 7°C water from a single chiller unit. The cooling system reduced the peak temperature in the plug to approximately 30°C and the associated risk of early-cracking. The time before contact grouting could commence was shortened to less than two weeks from casting.

Mar 8, 2011

By X Feng, X Zhang, W Sun, Y Zhe, K Hou, B Zhao, H Liu

Pulang Copper Mine, being China's largest newly built mine using block caving, boasts an annual production capacity of 12.5 million tons. Production level and roadway stability hold the key to the successful application of block caving. However, with Tong Kuangyu being the only mine in China which has applied such a method, we currently lack relevant experience in the successful application of the method. This paper has studied the influence of different rock mass zonings, fault thickness, fault dip angles, on-site construction quality on the production level, roadway stability of block caving through numerical simulation and analysed the roadway stability in different kinds of support solutions so as to ensure the successful application of block caving in Pulang Copper Mine. The results have shown that the existing support method in Pulang Copper Mine can meet the requirement of roadway support in zone II and III, but could not satisfy the demand in terms of support strength in the relatively fragmented zone I area. When roadway passes through the fault, the deformation of surrounding rock and plastic zone of roadway will gradually decrease with the increase of fault dip angle; the deformation of surrounding rock and plastic zone of roadway will gradually increase with the increase of fault thickness. An ideal support effect can be achieved through the joint support of grouting and bolting when roadway passes through the fault. In the measured model of on-site construction, there is stress concentration in the intersection between the access and transverse drift of ore removal. Therefore, the stability of the roadway can be improved by improving the construction quality. CITATION:Sun, W, Hou, K, Zhang, X, Feng, X, Liu, H, Zhe, Y and Zhao, B, 2018. Research on supporting technology for production level roadways of block caving in Pulang Copper Mine, in Proceedings The Fourth Australasian Ground Control in Mining Conference (AusRock), pp 95–106 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 30, 2018

By J Caron, M Athayde, F Lavoie, R Joyce

Decarbonisation has become a major challenge for the global steelmaking industry, turning towards new technologies aimed at carbon footprint reduction, which on its own accounts for approximately 9 per cent global emissions. The iron and steel industry represents a ‘hard to abate’ sector, where much of efforts are currently being deployed into initiatives aiming to decarbonise the ironmaking through the use of green hydrogen, carbon capture utilisation and storage and state-of-the-art operation of current technologies, while little efforts being deployed to find carbon-efficient solution to iron ore burden preparation, where high-grade iron concentrate will increase in importance to ironmaking regardless of the chosen reduction route. Quebec Iron Ore (QIO), a subsidiary of Champion Iron Limited (Champion), produces high-grade hematite concentrate with one of the lowest carbon global footprints. Still, QIO is partnering with its clients to the development of burden solutions to minimise CO2 emission, in the seek for a decarbonised steel. In a strong technological partnership, Binding Solutions Limited (BSL) has developed a novel, coldbinding technology to provide a cleaner, more cost-effective alternative to induration. The technology allows miners and steel producers to reduce Capex significantly and reduce energy consumption and CO2 emissions by 90 per cent. QIO and BSL have partnered to adapt the disruptive cold binding technology developed by BSL to QIO’s concentrate to produce a high-quality low emissions iron ore agglomerate. This paper describes the efforts taken to further develop BSL’s cold binding technology and its application to QIO’s high-grade iron ore concentrate to produce a hematite cold bonded briquette (hCBB) showing comparable performances with high quality seaborne fired pellets.

Nov 8, 2021

By M Flis

The Razorback Iron Ore Project is a high tonnage, low-grade magnetite deposit that defines a new iron ore district in South Australia. Known since the 1960s, the deposit has come into its own as the iron hungry world demands not only larger tonnages, but higher grade and cleaner magnetite concentrate ores that counterbalance the increasingly dirty haematite ores that are coming into production.Razorback is hosted by the Neoproterozoic Braemar Iron Formation, a tillitic unit that is part of the Adelaidean Geosyncline sedimentary sequence. At Razorback, this formation forms the southern limb of the Pualco Syncline, dipping at 42° to the north and outcropping along a prominent ridge. The formation consists of a series of alternating bedded tillitic and interbedded magnetite units that represent cycles of glacial advances and retreats. Seven cycles, resulting in seven stratigraphic members, are recognised. Members B, D, and G are the thickest, at 30 - 70 m each, and are the target of current investigations. While the bedded magnetite has the highest iron content, typically 35 per cent Fe, the tillitic unit, at typically 26 per cent Fe, has similar iron content in the ground mass but is diluted by the inclusion of iron-poor granite and metasedimentary dropstones. The mineralisation forms a simple dipping tabular body with only minor faulting, folding and intrusives. Grades, thickness, dip, and outcropping geometry remain very consistent over kilometres of strike, presenting an excellent mining proposition.Razorback differentiates itself from other Australian magnetite projects in a number of important ways. It is not a banded iron formation (BIF); it will have low crushing and grinding costs; and it is located in an infrastructure-rich area close to open-access, high capacity rail, to a selection of ports and to gas, electricity, labour and engineering services. Royal Resources has announced an Inferred resource of 277 Mt @ 25.9 per cent Fe. The company is targeting a resource of 500 - 1000 Mt to support a 10 Mt per year concentrate production. Davis Tube Recovery work shows that the ore is capable of producing a concentrate of over 68 per cent Fe with very low deleterious elements. Metallurgical testing confi rms the ore is soft, and with near-zero initial stripping ratio the project will have a low opex. With access to existing critical infrastructure, capex will also be low, ensuring Razorback will be a highly competitive iron producer in this emergent mining district.

Jul 11, 2011

By A Minchinton

With blasting, all far-field phenomena including, but not limited to, stress wave propagation, fracture, vibration and muck pile formation are intrinsically and irrevocably dependent upon near-field phenomena or mechanisms that we describe using physics-based mathematics typically transcribed into computer codes. The energetics involved in such near- to far-field transitions are not fundamentally relevant as they are simply progenitors of these processes.The notion of explosive energy as a descriptor for explosive or blasting performance is a case in point. These energies, which are generally used in blasting tables, are almost exclusively based on ideal detonation theory alone and do not include the influence of the rock, charge diameter, blasthole length and the late-time dynamic expansion that can be predicted using codes based on non-ideal detonation theory.With decoupled charges in presplits for example, the pressure drop between the charge and the blasthole wall can be simply described to first order using the energy relationship associated with adiabatic expansion. However, a more realistic mechanistic solution involves interacting fluids and turbulence leading to dynamic processes such as the channel effect.CITATION:Minchinton, A, 2015. On the influence of fundamental detonics on blasting practice, in Proceedings 11th International Symposium on Rock Fragmentation by Blasting, pp 41–54 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 24, 2015

By J Rubio

This work presents design features of an innovative in-line mixing helical (coiled) reactor for flocculation and flotation as a solid-liquid separation process for suspended particles (including liquid droplets). The device has been named flocs generator reactor (FGR), a compact system whereby the flocculation of particles is assisted by the kinetic energy transfer from the hydraulic flow through the reactor and/or by the injection of microbubbles (30 - 70 ¦m). The flow mixing presented a plug flow regime with a low dispersion degree, promoting the required hydrodynamic conditions to disperse the polymer flocculant (cationic polyacrylamide) and to generate æstrongÆ flocs of Fe(OH)3 or clays (as colloidal model systems) with aggregation using an anionic polymer, Al2(SO4)3 and poly aluminium chloride (PAC), and oil emulsions destabilisation with a high molecular weight cationic polymer. The solid-liquid separation of the flocs was then achieved either by settling or by flotation with microbubbles. This paper discusses advances in this new in-line flocculation-rapid flotation device to remove æaerated aggregatesÆ, aggregates with entrained and entrapped bubbles. Studies were carried out with different models of FGRs (varying the length:volume ratio) and process efficiency (mainly kinetics) evaluated as a function of polymer concentration and some operating parameters, namely, feed flow-rate, air:solids ratio and residence time. Results showed that the aerated flocs are readily floated with rising rates in the order of 120 mh-1, values higher than those obtained for the settling of the non-aerated flocs (18 - 24 mh-1). The FGR requires short residence times and generates dense, well structured flocs (with a mass fractal dimension, dF of about three) which withstand high shear forces. Mechanisms involved appear to include small bubble formation and their rapid occlusion (entrapment) within flocs, nucleation of bubbles at floc/water interfaces, polymer coiling as a result of æsalting outÆ effects at the aqueous/air interface and plug flow type of mixing (flocculation). Successful examples of emulsified oil and solids removal from water are shown and because in all cases high efficiencies were obtained (>90 per cent removal). Due to the high process efficiency and high loading capacity shown, the FGR appears to have good potential as an in-line flotation-separator device in applications requiring high rate solid-liquid or liquid-liquid separations.

Jan 1, 2005

By P V. A van der Westhuyzen

Namakwa Sands is a heavy minerals mining and beneficiation business in the Exxaro Sands Division, and operates along the West Coast of South Africa (see Figure 1). The business encompasses mining, mineral concentration, separation, and smelting operations. Inflated commodity prices and increasing operating costs demands greater attention to the management of process performance and the company wide coordination of resources. Consequently, the task of deploying operational/technical skills and budgets into the most appropriate parts of the business assumes great importance in order to increase productivity from its capital assets. The mineral sands industry is under the same sort of economic scrutiny that all other industries find themselves, and as such, Exxaro – Namakwa Sands has taken the strategic initiative to improve overall resource utilisation within the processing steps and to measure the costs associated with obtaining this value.This paper provides details of the successful implementation of a Kelsey Centrifugal Jig (KCJ) at Namakwa Sands to recover primary and secondary zircon products from the wet gravity (quartz) rejects generated and stockpiled at the Mineral Separation plant (MSP).

Oct 5, 2011

By D J. Williams

The majority of surface tailings storage facilities continue to employ sub-aerial tailings slurry deposition. Surface TSFs are typically sized and operated in a way to minimise the initial capital cost of the facility, driven largely by the net present value approach to accounting. This generally leads to too small a storage, too fast a rate of rise of the tailings, and difficulties in managing supernatant water. In turn, this results in wet and soft tailings deposits of high moisture content and low density, and the need for frequent and costly tailings dam raises. Further, such tailings deposits often do not facilitate closure and rehabilitation of the facility. Globally, there are on average over two failures annually of such tailings dams, resulting in loss of life, damage to infrastructure and environmental impact downstream, and the loss of company shareholder value and reputation. Recent high profile tailings dam failures are threatening the mining industry’s financial and social licence to operate.Among the physical processes that tailings undergo on sub-aerial deposition are beaching, hydraulic sorting down the beach according to particle size and specific gravity, settling, consolidation, and desiccation on exposure to the sun and wind. Beaching and hydraulic sorting have proved difficult to test at laboratory scale and difficult to model, and are best assessed in the field. Settling, consolidation and desiccation may be assessed at laboratory scale, but to date there has been an absence of tests to form the basis for the design and management of tailings deposition, and ultimate closure and rehabilitation. The paper describes recent advances in tailings testing methods, including a purpose-built slurry consolidometer that tests the settling and consolidation of tailings from a slurry consistency, simulating increasing tailings depth to about 50 m; and a purpose-built instrumented column that tests the settling, self-weight consolidation and desiccation of a surface layer of tailings, also from a slurry consistency. Selected test results from these two apparatus are presented in the paper, together with brief descriptions of how they may be used to better design tailings slurry deposition. In addition, planned further advances in tailings testing methods are briefly described.CITATION:Williams, D J, 2018. Recent advances in tailings testing methods, in Proceedings Mine Waste and Tailings Stewardship Conference 2018, pp 8–37 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 23, 2018

By Y Li, Z Fu, D J. Williams, E Topal

Mine waste rock is unavoidable in the recovery of ore by open pit mining methods. Effective management of waste rock movement covers the removal and placement of the waste rock, generally in a surface dump in the most cost-effective way while satisfying the long-term environmental expectations. Since the 1960s, there has been significant research carried out into planning of ore movement from open pit mines such that the overall net present value (NPV) of the project can be maximised. Currently, several software packages are available to achieve this task as a common practice within the mining industry. However, planning of mine waste rock movement is still achieved manually, as the available software does not consider optimal waste rock movement and dump design. This paper describes a tool to optimise waste rock placement, which minimises the haulage cost while creating environmentally friendly waste rock dumps through selective placement and encapsulation of the reactive waste rock in the dump. The embedded methodology in this tool has been developed based on the mixed integer programming (MIP) modelling technique to optimise the waste rock movement. The methodology provides an easily-manipulated and fully-automatic tool for professionals to complete waste rock dump scheduling in four main steps: data input, model construction, model computation and solution retrieval. The application of the new tool into a real case project in this paper shows that it can determine economically and environmentally optimised waste rock dump schedules in an acceptable time frame.CITATION:Fu, Z, Li, Y, Topal, E and Williams, D J, 2015. A new tool for optimisation of mine waste management in potential acid forming conditions, in Proceedings Tailings and Mine Waste Management for the 21st Century, pp 333–342 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 27, 2015

By P Lindsay

A numerical model has been developed to simulate the effectiveness and costs of a number of conceptual remedial measures aimed at reducing acidity and metal concentrations in the Ngakawau River and its tributaries near the Stockton Coal Mine, situated on the West Coast of New Zealand. The Stockton Coal Mine has been in operation over the past 100 years. During that time, seepage from waste rock dumps has contributed to elevated acidity and metal concentrations in the Ngakawau River and some of its tributaries. The yearly mean rainfall at the mine site is 6000 mm. The model, developed using GoldSim software, simulates rainfall, run-off and stream discharge for 26 tributaries. It then calculates acidity and metal concentrations in the mine impacted tributaries and the dilution downstream from the mine. The model has been calibrated to measured flow and acidity and metal concentrations in the Ngakawau River and some of its tributaries. Acidity and metal loads are removed from the system in accordance with specified efficiencies and capacities of the respective conceptual remedial measures. The user can compare specific remedial measures, or a combination of conceptual remedial measures. The model predicts the acidity and metal concentrations at a number of monitoring stations for any remedial strategy selected by the user. It also calculates the capital and operational costs for that particular remedial strategy. This paper presents the development of the numerical model and describes how the end-user can use it to compare the efficiency and costs of various remedial strategies by running different æwhat ifÆ scenarios.

Jan 1, 2006

By T Purvis, Z Liu

Ernest Henry mine (EHM) is an underground sublevel caving mine located in north-west Queensland with a production rate of 6.4 Mt/a. The mine has sublevels spaced with a 25 m vertical interval. The production process on each level starts with the drilling and firing of a blind uphole rise to start the slot extraction. These rises are fired as a single shot and routinely need to achieve a design height of 22 m to 30 m depending on the local mine geometry. If the rise fails to perform as designed then the production phase of the level is delayed with significant rework required to remedy the situation.This paper describes the process that the EHM team has followed to improve the first time performance of each rise. The improvement process commenced with a review of results from previous rises and resulted in the identification of a number of improvement opportunities. A revised holistic approach was established for the process, which included involvement from operators and engineers. Through continued measurement and review of rise performance, inputs to the process were improved to a point where reliable results can now be expected. The successful performance of subsequent rises has been verified through a comprehensive quality assurance quality control (QA/QC) program. Before quality control processes were implemented, the success rate of blind uphole rises was only 11 per cent (one out of nine rises) at EHM. In comparison, the success rates have been vastly improved to 25 per cent (one out of four) and 75 per cent (three out of four) respectively following two stages of improvements. This paper concludes with the ‘current’ series of best practices used at EHM and recommendations.CITATION:Purvis, T and Liu, Z, 2017. Improving the performance of blind uphole rises at Ernest Henry Mine – a case study, in Proceedings 13th AusIMM Underground Operators’ Conference 2017, pp 335–340 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Oct 16, 2017

By C M. Standen

The SAG mill at Rasp Mine has undergone a number of liner design modifications since commissioning in 2012, making liner wear and failure difficult to predict from historical data. During 2017, several instances of liner failure or near failure were experienced resulting in unplanned downtime for emergency relines or to patch liners in the lead up to a planned shutdown. The strategy for relining mills is often to minimise the frequency of relines (and subsequent shutdown costs) by extending liner life, achieved through design modifications. However, it was observed that as the Rasp SAG mill liners wear, mill performance declined with power draw increasing and throughput declining. Opportunity and inefficiency costs start to erode the revenue per additional tonne milled for a given set of liners, and in turn the benefit of delaying relines. As such, optimising the frequency of relines becomes a trade-off between reline costs and opportunity/inefficiency costs in delaying relines. The aim of this paper is to demonstrate a frame work for analysing costs using a marginal economic analysis with the assumption that the Law of Diminishing Returns can be applied to the life of mill liners. The SAG mill operating variables can be modelled to determine their impact on costs and an optimal reline point can be defined where the total costs are minimised. This prevents unexpected failures due to accelerated wear by providing justification to reline earlier and thereby allowing efforts to be focused on sustaining milling performance.CITATION:Standen, C M, 2018. An economic approach to optimising mill reline frequency – a case study of SAG mill relines at Rasp mine, in Proceedings 14th AusIMM Mill Operators' Conference 2018, pp 197–206 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 29, 2018

By G M. Jones, J Rademan

Debswana, owned by the Government of the Republic of Botswana (GRB) and De Beers in a 50:50 joint venture partnership, operates the Jwaneng diamond mine in Botswana - the most valuable diamond mine in the world. The mine provides between 60 - 70 per cent of DebswanaÆs earnings, and about 30 - 40 per cent of the GRBÆs income. In 2008, the company embarked on the Cut 8 Project - an open pit waste cut-back to expose more diamond bearing ore to sustain mine life by another six to seven years. This undertaking was much larger than previous cut-backs; it increased the waste stripping ratio threefold, increasing significantly the waste handling fleet of trucks, shovels and infrastructure, and impacted a large part of the materials handling plant which required replacement with new facilities. The project coincided with the beginning of the Global Financial Crisis (GFC) and a slowdown in the economy. Its $4 billion total life cost was billed as æthe largest private investment project in BotswanaÆ which produced heightened expectations amongst stakeholders that it would redress some of the issues brought about by the GFC and leave behind a legacy of jobs, increased opportunities for citizen owned business and improved social infrastructure.Most of the big project challenges were non-technical and ranged from dealing with various stakeholders?at?all levels, a 25 per cent currency depreciation of the Botswana Pula against the South African Rand, obtaining work permits for non-citizens in a job starved environment, managing construction to world class safety standards, managing the low productivity of construction workers and producing a viable legacy program that satisfied the GRB and stakeholders. Whilst most of these risks were identified in front end studies, the magnitudes were in many instances underestimated. Managing this uncertainty on Cut 8 can provide valuable lessons to other projects in a similar environment, or at least provide the information to indicate that these factors should be adequately provided for in the financial evaluation of a project in the form of budget, schedule, contingency or risk mitigation.CITATION:Jones, G M and J Rademan, 2012. Reliability of expert judgements and uncertainty assessments, in Proceedings Project Evaluation 2012 , pp 109-116 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 24, 2012

Optimisation of the Advanced Automation System at Inmet Mining's PyhSsalmi Mine, Finland

Sep 13, 2010

By A G. L Pratt

The record for autonomous haulage systems in underground mining over the past 15 years is patchy, marked by many trials and attempts, with few examples of sustained operation until relatively recently. The drivers for the introduction of this technology are variously listed as the occupational health and safety of people working in underground mines, reductions in direct operating costs and increases in productivity.This paper reviews the trends for operation of semi-autonomous and autonomous haulage achieved by underground mines and the defining features of the technology currently available. The inclusion of autonomous haulage as part of mining studies and the fundamental conditions for its successful application is discussed in the paper. The components required for an autonomous underground haulage system are outlined and the key aspects that need to support its effective implementation are examined together with their associated opportunities and risks. Special note is made of the critical role people, including executive leadership, have in ensuring the successful introduction of this technology.The paper draws on published case study material, equipment supplier information and research findings. The aim is to offer a high-level insight into what is required for the application of autonomous haulage technology and its successful implementation in underground mines.CITATION:Pratt, A G L, 2016. Autonomous haulage systems in underground mining – what is required for success? In Proceedings International Mine Management Conferenc, pp 35-52 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jun 22, 2016

By R G. Moreby, S Bluhm, FávonáGlehn, C Pascoe

Resolution Copper Mine in Arizona, USA, is planned to be a 2000 m deep panel cave mine with virgin rock temperatures exceeding 80¦C in rock with high crystalline silica content, resulting in a very challenging ventilation and cooling system design. This is one of the largest copper orebodies ever found and, with a planned rock production rate of 120 kton/day. The project is currently in its prefeasibility phase and the paper discusses features of the ventilation and cooling system design which includes multiple ventilation shafts with total primary ventilation flow of about 3000 m3/s and both surface and underground refrigeration plants producing more than 140 MW refrigeration capacity. The cooling system features large surface bulk air coolers chilling all downcast air supplemented by an underground secondary air cooler system and a chilled service water system. This will be a very challenging mine to ventilate and cool but this work has demonstrated that it will be technically achievable with the application of existing technology.CITATION:Bluhm, S, Moreby, R G, von Glehn, F and Pascoe, C, 2013. Life-of-mine ventilation and refrigeration planning for Resolution Copper Mine, in Proceedings The Australian Mine Ventilation Conference , pp 125-138 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 1, 2013

Beach sands on the Morobe coast of New Guinea contain significant amounts of chromite. This chromite, together with the more abundant associated minerals such as olivine, enstatite, tremolite, antigorite and feldspar has been de- rived from rocks of the Papuan Ultramafic Belt and transported to the beaches by three rivers, the Paiawa, the Saia and the Sesimbai. Of the hundreds of samples taken, 26 have been analysed mineralogically and chemically in some detail. On this basis, five groups of samples, four on- shore and one offshore, representing character- istic mineral assemblages, have been recognized. The chromite grains themselves have been exam- ined to determine variations in amount and in the Cr/Fe ratio, since this is of economic importance. Much of the chromite fails to reach a high Cr/Fe ratio as a result of magnetite rims around chromite grains. The precious metal content of the sands is negligible.

Jan 1, 1973

By D Davis

The prediction of ground-borne noise levels from tunnel construction activities requires knowledge of the input vibration forces from the vibration source(s) into the cutting face, knowledge of the vibration transmissibility through the surrounding medium, and knowledge of the receiver building’s vibro-acoustic response. The conversion of this vibration energy into sound pressure within the receiver building depends upon the vibration coupling of the soil and the building’s foundations, the structure’s response including floor-to-floor attenuation and amplifi cation due to resonance, the radiation effi ciencies of the internal structural elements, and the room’s acoustical properties. Beginning with a known input vibration spectrum at the cutting face, it is possible to predict the resultant ground-borne noise levels within a receiver building using either analytical and/or empirical techniques, or by numerical modelling. This paper presents an overview of the various methods available to estimate ground-borne noise levels from tunnel construction activities and discusses the advantages and limitations of each.

Mar 8, 2011

By G Lumley

Gold miners have been underperforming the price of gold for a number of years. So why has the æmarketÆ undervalued our gold miners relative to what they have been mining? The low valuation ascribed to gold mining companies is largely attributable to their profit performance. In the period since 2006 the price of gold in A$ has risen about $900/oz, but the real cash margin (operating cash costs + cost of finding and/or acquiring deposits + the cost of bringing them into production) has only risen about A$100. Rising operating costs are a major part of this reduction in real margin. Energy and labour costs have risen more than the inflation rates across a number of countries as have taxes, royalties, etc. There are however, more significant contributors to the rising cost base. Firstly, in 2006 the average gold grade was 2.0 g/t; today it is 1.3 g/t. Secondly, strip ratios (for surface mines) have increased by 19 per cent during this time. Open cut mining equipment unit output across the world has dropped by 26 per cent during 2006 - 2012. Finally, costs have risen by 55 per cent during this time period. Consequently, there is now 3.8 times more mining cost required to produce an ounce of gold from surface mines compared with 2006. The decline in gold grade looks to be a permanent trend as does increasing strip ratio if output is to be maintained. Costs will continue to rise although cost control will be necessary. Reversing the decline in equipment performance and closing the gap between median and best practice provides the hope for a sustainable reversal of cost increases. The current gap between best practice and median performance has grown to 112 per cent for mining trucks, 168 per cent for excavators and 169 per cent for front end loaders. Closing this gap is the potential for a more profitable future. For most gold mining companies improving mining efficiency is not an option; it is an imperative.CITATION:Lumley, G, 2013. How many gold mines will inefficiency kill?, in Proceedings World Gold 2013 , pp 267-276 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 26, 2013