The recent R75-million investment by Gold Fields in the Rhino, a drill rig that allows for faster, more accurate drilling and a bigger breaking point for blasting during longhole stoping, will still not see it surpass output of traditional mining methods soon.
Gold Fields’ South Deep is the only fully mechanised gold mine in South Africa but is yet to live up to the benefits of full mechanisation. The country’s other lesser-known mechanised gold mine — Target 1, owned by Harmony Gold — is also not a top performer, having recorded a 7% decrease in revenue in 2021.
Gold Fields’ vice-president for people and organisational effectiveness, Gerrit Lotz, called the mine a “perennial underperformer” at a recent media visit to South Deep where journalists were introduced to the Rhino, which is operated by two workers.
“South Deep had a long life of mine but was sort of a perennial underperformer and that had big implications, not only for Gold Fields but for the country as a whole. When you have an asset that generates revenue and provides employment there is a responsibility on you to try to find a way to use it profitably and safely. So, that was one of the biggest challenges we faced,” Lotz said.
Gold Fields spokesperson Sven Lunsche told Mail & Guardian the company had taken over South Deep because it was mechanised. There was, however, a skills deficit.
“Simply put, we lacked the skill set. And that’s why we brought in engineers from Australia to try to upskill the miners in South Africa. We had never operated a mechanised mine and didn’t know what we were doing,” Lunsche said. “It’s only in the past four years have we seen profits.”
Another reason for the mine’s underperformance was an inability to maintain the equipment, he said. “Large equipment was installed and we struggled with maintaining it because it was not made locally. We had to get engineers in and it was a very costly and time consuming process.
“It was also a large ore body that we knew nothing about and so it was much work trying to make the mine profitable and it was just not working,” he said.
Gold Fields bought South Deep in 2006 from Barrick Gold and Western Areas and at the time conventional hand drilling was used. In 2008, Gold Fields stopped all work and said it would resume operations once mechanisation had been introduced.
For years the mine was running at a loss. It only started to see some profits from 2019 when it generated R151-million in net cash. In 2020, net cash from operations was R558-million but this jumped 157% in 2021 as South Deep generated net cash of R1.4-billion.
Gold Fields injected more than R30-billion into South Deep.
Mining analyst Peter Major said South Deep was a conundrum and had caused more consternation and trial and error than any other gold mine in the country.
“The ore body at South Deep more than any other mine in South Africa does lend itself to mechanisation. Will it ever be a high margin mine? I don’t know. It does look like Gold Fields is narrowing down their essential way of mining that ore body but it has been a very expensive exercise. The original guys that put money in will never get their money back,” Major said.
Gold production at South Deep in 2021 was 9 102kg, while competitor Sibanye Stillwater produced 33 372kg and Harmony Gold produced 47 755kg.
Major attributed the underperformance of South Deep to myriad reasons that included leadership, mismanagement and the type of mine.
“The problem with South Deep is because of the mine itself. They tried mining it in a pseudo trackless way and they did all that development and bought all those machines but it wasn’t working.”
A trackless mine is one with no rails where rubber-tyred vehicles operate independently of tracks and are used for haulage and transport.
Major continued: “Then they fired management and brought in new management, then they brought in Australians [who have years of expertise in mechanisation]. They’ve had a lot of different managers and each manager wanted to try a different way. It has gone through a lot of hands. It was a new and different ore body and it did look like mechanisation would work but there was a lot of trial and error to figure it out.”
Furthering mechanisation
The use of the Rhino is expected to boost Gold Fields’ total extraction, said Martin Preece, the company’s executive vice-president.
He said that before the Rhino, the company was extracting only 85%, but forecasts now indicate 93% extraction. The Rhino was purchased four months ago.
“We are forecasting to achieve 10 tonnes of gold just this year,” Preece said.
The Rhino is 13.5m wide and 14m high. South Deep’s ore body is about 20m in height allowing large machines access to the ore-bearing rock. The whole mine extends more than 3.5km underground.
“We need to turn this mine into the mine it can be and should be and is something that is highly mechanised,” Preece said.
Major said the new drill rig looks as if it could work because “they are able to blast a big chunk of rock all at once instead of drilling and blasting little chunks, which takes time, costs more money, involves more labour and is more risky”.
“I think it’s still early days to know for sure if this will work for South Deep but we’ll see what the margins are,” Major added.
Safer underground mining
The case for mechanisation has also been made in respect to mining fatalities.
The number of fatalities in the South African mining industry regressed by 23% to 74 in 2021 compared with 60 in 2020. This compares unfavourably with the 51 fatalities reported in 2019, the industry’s best-ever safety performance, according to the Minerals Council.
Most fatalities occurred in the gold and platinum sectors, together accounting for 69% of fatalities. But, the gold sector reported the most fatalities with 30 people dying in 2021.
Gold mines are typically deep in the earth and are more prone to seismicity, fall of rock or rock bursts, all of which make them dangerous.
South Deep had one fatality last year and none this year so far.
Major said that mechanisation is safer for underground mines because a loader will have a roll bar over the driver’s head so if the roof falls in, it protects him. But loaders usually require a bigger tunnel that is inclined to collapse.
“If a machine can do what five men do, that means you are only exposing one man to underground conditions. So, that’s one of the reasons it does lower the fatality rate because you have less men underground. But I have a moral problem with that because you have now put four men out of work. Who have we really helped? Who have we really saved by doing that?” Major asked.
As operations go ever deeper, the goal is to put fewer human lives at risk by getting machines to replace them at the rock face. The intention, according to Preece, is to run the Rhino remotely, “soon”.
