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By N Cusworth, W R. Mackenzie

"In 2007, the authors presented a framework for the conduct of resource project feasibility studies and provided guidance on minimum standards and best practice (Mackenzie and Cusworth, 2007).This paper will present the authors’ observations in relation to feasibility studies undertaken to support investments made during the unprecedented period of resource project capital investment since 2007. It will also provide comments on general trends in the mining industry’s approach to project assessment and update recommendations on best practice.CITATION:Mackenzie, W R and Cusworth, N, 2016. The use and abuse of feasibility studies – has anything changed?, in Proceedings Project Evaluation 2016, pp 133–148 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By G R. Ballantyne, A N. Mainza, M S. Powell, M Evertsson

Quantifying the performance of a comminution circuit relative to the potential that can be achieved is a standard requirement in justifying operating practice (the stick) and seeking operational upside (the carrot). Historic measures tend to focus on performance relative to laboratory design tests that provide a direct measure of specific grinding energy, such as the Bond Work index; or use dropweight breakage tests calibrated to a substantial database of operating sites, such as the SMC methodology. Although of value, such approaches are flawed in significant aspects. The assumption is that the laboratory prediction is correct and the single sample it is based on is representative. The database benchmarking methods are, by definition, locked into current average operating practice. These approaches do not illuminate upside; can ‘punish’ operations that are actually more efficient, such as grinding finer than standard operation; and reward poor operation that may comfortably produce a coarser grind than optimal for recovery or excess slimes that reduce recovery and increase water consumption and tailings volume. The authors present a set of established and easily applied measures, that draw together daily operation, highlight areas of opportunity and inefficiency, use simple samples and data, and can be used to provide the ‘size of the prize’ in pursuing specific areas of process improvement. These tools include size specific energy (SSE), overall operating effectiveness (OEE) which includes product quality, theory of constraints, and links this to the end objective – maximising the efficient production of valuable metals. Feeds into objective function driven by economics – financial return, energy, environment.

Aug 24, 2022

By G du Toit, P L. Gillot, M Swanepoel

Randgold Resources’ Loulo-Gounkoto Complex is one of the largest gold mining operations in Mali, West Africa. The mine, which is situated on the western border with Senegal, treats more than 4 Mt/a of ore through a conventional three-stage crushing and ball milling circuit followed by a carbon-in-leach plant. Ore supply is achieved by a combination of open pit and underground mining, with the majority of the ore supply sourced from the Gara and Yalea underground mines situated approximately 2 km and 6 km respectively from the gold plant.In 2011, Randgold Resources commissioned Golder Associates to perform an evaluation study for providing structural backfill to both the Gara and Yalea underground mines using the current gold plant tailings. The test work performed as part of the evaluation study concluded the need for a tailings cycloning and dewatering facility capable of producing slurry at a solids concentration of 65 per cent with a particle size distribution that had minimum 25 per cent passing 20 µm and less than 5 per cent of -5 µm material. Tailings desliming was required to ensure a consistent feed quality to the paste preparation plants and to ensure that the system would be capable of handling variation in the feed composition from the gold plant.WorleyParsons, previously TWP Projects, was contracted by Randgold Resources to complete the engineering design for the slurry preparation plant, whilst Golder Associates was retained to complete the engineering design of the two paste preparation plants.This paper discusses the test work, design considerations and engineering design of the slurry preparation plant, termed the ‘intermediate plant’, as well as all ancillary facilities required for the delivery of the deslimed slurry to the paste preparation plants located at the two underground mines.CITATION:Swanepoel, M, du Toit, G and Gillot, P L, 2014. Case study – engineering design for a slurry preparation plant for a paste application in West Africa, in Proceedings 12th AusIMM Mill Operators’ Conference 2014 , pp 477–486 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 1, 2014

By M Hawkins

The Clem Jones Tunnel (formally known as the North-South Bypass Tunnel), a A$2.88 billion road tunnel project in Brisbane, Queensland, was successfully completed almost seven months ahead of schedule. The project included two parallel 4.7 km long road tunnels, 740 m of intermediate roadway access ramps and two auxiliary ventilation tunnels. The tunnels incorporate intelligent tunnel systems, best practice fire and life safety standards and typical civil tunnel elements.Over the duration of the project the Parsons Brinckerhoff (PB) and AECOM (formally Maunsell) design joint venture (MPB) were Lead Designers to the Leighton Contractors and Baulderstone Bilfinger Berger Joint Venture (LBBJV). Construction of the toll road commenced in September 2006 and was completed in March 2010, with the tunnel opening then. Contributing to the success of this project was the continued support the lead designers gave throughout the construction period.This paper will focus on some of the structural elements that contributed to the success of the project – in particular the cable tunnel structure, a small precast, culvert shaped element under the pavement of the mainline tunnel, and the fit-out of the Gibbon Street shaft which were designed to be constructed in a combination of precast and in situ concrete.The cable tunnel was incorporated early in the design phase and runs the length of much of the tunnel. This paper will outline the challenges faced by the designers with implementing this system which provided significant construction advantages, among which were being able to install a separate ventilation duct during construction and to start fitting out the mechanical and electrical conduits and drainage system while tunnelling was still underway.The Gibbon Street shaft had a length and width of 20 m by 40 m and an overall depth of 38 m. A 20 m high structure of precast and in situ concrete was constructed in the base to accommodate mechanical and electrical equipment and provide a take-off access for the southern ventilation tunnel. The construction purpose for this structure was to provide a junction between the tunnel boring machine (TBM) and the roadheader-style tunnels, a staging platform for commencing the roadheader tunnelling, and a platform where the TBMs could be dismantled and removed.The design was assessed and reviewed many times throughout the construction process to address the needs of each of these stages. Innovative use of precast concrete was used to minimise construction time.Additionally, the designers provided support to the construction team from the time of design completion through to the tunnel opening. This meant that the changes to the design and adjustment of construction loadings could also be assessed. The fi nal outcome resulted in an efficient construction sequence and a project that has provided an excellent outcome for the client, stakeholders and community.

Mar 8, 2011

By F Tang, Ö K. Büyükuslu, M Baben, S Petersen

GTT-Technologies’ ChemApp for Python was developed to provide a powerful, easy to use interface to ChemApp for a programming language highly popular with scientists and engineers. It is used, for instance, by GTT to develop program modules such as the CALPHAD Optimiser for the FactSage™ software, by customers to move from interactive FactSage calculations to perform versatile scripting with Python, and by GTT and its partners in research projects in the area of materials informatics. Computational thermochemistry is fundamental for advancing sustainable metallurgy and creating new alloy compositions for engineering applications. Materials informatics involves handling vast amounts of data and complex workflows. GTT’s approach uses ChemApp for Python and the FactSage thermodynamic databases to design recyclable alloys from the start, incorporating a higher percentage of scraps while aiming to simplify the workflows to simulate material design steps. Challenges arise due to recycling scraps, introducing more elements for consideration. CALPHAD-based databases accurately cover materials from primary metallurgy, but additional data for minority and critical elements is crucial for precise computational modelling. GTT combines machine learning-based ab-initio databases with traditional CALPHAD databases to cover the complete chemical space with appropriate accuracy. The design of a hardfacing alloy through a high-throughput materials informatics approach is used as a demonstrator of the current possibilities.

Jun 19, 2024

By S Agdaca

Leightons is the sole contractor at the Wahana Coal Mine Project (part of the Bayan Group), a multi-seam thermal deposit consisting of 13 coal seams with thicknesses ranging from 20 cm to 500 cm. The average dip of the deposit is 18 - 20°. However the deposit is heavily faulted in certain domains with anticlinal and synclinal structures present causing seams to dip up to 90°. Average thickness of coal inter-burdens range from less than 2 to 12 m. The minimum coal thickness being mined is 20 cm. Coal production is direct mine mouth feed and there is no coal processing plant currently used.Conventional blasting between the highly variable coal horizons in the early phases of the mine life was suboptimal from a production perspective. Drilling short holes with a reduced drill pattern, and on occasions with sloping benches, resulted in low drilling and explosives loading efficiency.A high frequency of small size blasts fired up to two times daily was required with each blast consisting of four up to five small blast areas. Each blast averaged approximately 36 000 bcm thus causing a low utilisation rate of the mining fleet from frequent blast delays and the inability to deploy larger Liebherr 9350 excavators on bench. It was identified that increasing the production targets required a more efficient drilling and blasting process. Furthermore, due to the highly variable nature of the deposit, the existing coal model was determined to not be able to accurately predict the coal seam location prior to blasthole drilling.In August 2009, Leighton Contractors Indonesia and Orica Mining Services with the full support of the Wahana team, initiated through seam blasting trials using electronic blasting systems. Further trials were conducted in November 2009. Trial evaluations indicated that the benefits from decreased lost time events due to blasting, an increased vertical advance rate per blast, and increased overall blast size could be attained while not damaging or diluting coal.Full-scale?through seam blasting has been ongoing since February 2010 for the upper eight coal seams to extract coal seam thicknesses ranging from 20 - 100 cm. This paper will discuss the parameters of the through seam blasting process in Wahana and the resulting benefits to the overall mine production.

Nov 8, 2011

By James JV, Petho SZ

The South Deep surface shaft system is being sunk to a final depth of 2750 in below surface and on completion will be the deepest single drop haft in the world. The shafts will intersect the target reef horizon at 2650 to below surface. In order to negate the requirement for a shaft pillar, which would he extremely large at this depth, the reef horizon in the vicinity of the intersection is currently being mined. A high quality crushed waste/classified tailings backfill is being placed in the longwall stoping panels around the shaft intersection area. This kill limit closure and ride which following shaft reef intersection could have a detrimental effect on the long term shaft stability. This paper discusses underground instrumentation results and numerical modelling exercises carried out to confirm that the shaft system will he stable throughout the life of the mine. Instrumentation projects include closure and ride measured between backfill paddocks and haulage leveling exercises carried out to determine the far field rockmass response to mining with stiff backfill.

Jan 1, 1998

By R Battison, R Duggan, S Esen, K Henley, P Dare-Bryan

Increased catch bench crest loss has been observed in recent years at Barrick’s Cowal Gold Mine situated in central New South Wales, Australia. A project was initiated to diagnose the cause of the crest loss, and evaluate ways to limit its effect on final walls.A range of different blast measurement techniques were utilised to evaluate the progressive damage caused to catch berms by presplit, production and trim blasts. Techniques employed included; single point vibration measurement, cross-hole seismic analysis, precision berm surveys, horizontal p-wave velocity measurements, crest loss volume calculation and water level changes between blasts.Blast measurements showed that the majority of damage to the catch berm was caused by the presplit blasts, which registered vibrations greater than 700 mm/s at 5 m behind the presplit line. As a result, considerable changes were made to the blast designs after a series of computer simulations via mechanistic blast modelling (MBM). The uncharged presplit collar was increased from 2 m to 4 m, and every second hole was left uncharged. Vibration modelling using a multiple seed wave (MSW) model was used to optimise trim blast delay timing. Burden relief was changed from 16 ms/m to 27 ms/m using one hole firing per 4 ms time window, and the initiation angle was changed from shallow to steep. These changes in the presplit loading and trim timing helped reduce catch bench crest loss by 1–2 m.Trim shots using a high strength bulk emulsion explosive were also identified as contributors to berm damage after analysis of blast monitoring and MBM modelling. The modelling study resulted in the generation of alternative blast designs to minimise the crest loss, including the use of low-density/low-velocity of detonation (VOD) bulk explosive product (Flexigel™ Advantage) in trim pattern designs. This was trialled on the Northern and Eastern pit walls to evaluate the damage to catch berms on final walls. The trials demonstrated that berm vibration was reduced significantly; fragmentation was similar (or slightly blockier) compared to the fragmentation using the old blast designs; displacement of the berm was reduced, so increased catch bench widths were attained. This paper summarises the trials, and presents a summary of the crest loss to date.CITATION:Battison, R, Esen, S, Duggan, R, Henley, K and Dare-Bryan, P, 2015. Reducing crest loss at Barrick Cowal Gold Mine, in Proceedings 11th International Symposium on Rock Fragmentation by Blasting, pp 189–202 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 24, 2015

By G Haywood

This paper presents the evolution of the planning, scheduling and mining practices at the Yilgarn Star underground. The paper will concentrate on the principals of æjust in timeÆ and the impact of such practices on mine planning and scheduling and subsequent development and production. The principals of æjust in timeÆ were developed to minimise the impact of creep and time dependent failure of the ground in the ore and hangingwall zones. These zones are characterised by altered schistose material with inherent weak rock strengths compounded, at depth, by the maximum principal stress of the virgin stress field approaching the UCS of the rock mass. Yilgarn Star underground has and continues to develop the æjust in timeÆ methodology to ensure the continued viability of the mine. The mine continues to use longhole open stoping mining methods to ensure high levels of productivity with minimal dilution and at an acceptable cost of production.

Jan 1, 2002

WMC Limited, owner/operator of Olympic Dam, the worldÆs largest underground uranium mine and the fourth largest underground copper mine has now completed an expansion that has been classed as a benchmark in the mining industry. To achieve a production increase from 3.4 to 9.25 Mtpa from an underground mining operation in two years was a major challenge, it was essential to review the overall materials handling system from æthe face to the stockpileÆ. The challenge was two-fold:How to deliver 30 000 tonne of ore per day to the processing plant, from a single underground mine? To provide the processing plant with a consistent metallurgical feed. This paper traces the transformation from the old to the new materials handling system at Olympic Dam.

Jan 1, 2000

By J Palise

As cities become more populated and the need for tunnelling increases, we continue to dig deeper urban tunnels in more challenging ground conditions. At the same time our expectations for durability and long-term performance are increasing.It has become increasingly apparent in recent years that repairing water leaks in tunnels can be very costly and unplanned infiltration can cause undesirable outcomes for long-term maintenance costs, structural durability and environmental impacts. For this reason, tunnel constructors are investing more time and effort upfront into drainage and waterproofing systems.Tunnel membrane systems are becoming accepted as a necessary part of tunnel construction, however the knowledge surrounding selection of appropriate systems, design detailing and installation methods has not increased at the same rate. Currently Australia relies heavily on International Standards from Europe and the United States with no immediate program in place to establish our own locally relevant industry standards.This paper gives an overview of where the industry in Australasia is heading in terms of adopting relevant standards. Current basic waterproof detailing options for drained and undrained tunnels with success and failure of various methods are also addressed. Finally we look at the Brisbane Airport Link as a case study for how tunnel waterproofing contract methods, design and installation issues are being addressed in context with recent projects including the Epping to Chatswood Rail Link in Sydney, Auckland Northern Gateway Tunnel, Eastlink Tunnel in Melbourne and Sydney City West Cable Tunnel.This paper’s primary objective is to propose guidelines for how tunnel waterproofing could be implemented on large infrastructure projects in the future and to map a path for preparing and introducing a ready to use document for selecting appropriate tunnel membrane and drainage systems whilst implementing detailing methods which are appropriate for local conditions.

Mar 8, 2011

How often does one hear that a recent feasibility study was not a success? Alternatively, when scope of the feasibility study was sent out to tender there was a large discrepancy in tendered prices. If the tendered prices were to be compared to the consumer market, for instance the purchase of a car, where the concept is transport in a controlled and safe manner, prices vary by large factors, but then so do the specifications. In the case of a feasibility study, prices should be within a tighter margin as the tenderers are all quoting against the same concept and specification. Why do these discrepancies occur? Price discrepancies will in every likelihood be attributed to two main factors; one, the perceived amount of work and two, the ability of the bidder to carry the risk associated with the feasibility study. It is, therefore, important that the scoping of the feasibility study covers the detailed requirements as clearly as possible stating what level of accuracy is required. The feasibility study is one of the first activities in the life of a project. The study, like the project it is investigating, is subject to the constraints of time, cost and quality. Its primary objectives are to demonstrate the viability of a project within the outlined scope and constraints.

Jan 1, 1998

By D Morgan, D Sato, B Lumsden, S Senanayake

Laboratory flotation tests on fresh cyclone overflow samples are a useful tool to troubleshoot and indeed to improve plant performance; however, reproducibility between laboratory flotation test and plant performance is important for interpretation of the laboratory tests and hence their usefulness. Chemical reproducibility can be achieved with the addition of the required reagents; however, reproducing the physics of forces and energy in a 5 L cell compared to a 50 000 L plant cell or a 500 000 L plant cell is not generally studied or discussed. For some tests such as collector evaluation the physics of the flotation process may not be critical, but for some evaluations in the laboratory, it can be important.All flotation plants suffer from losses of valuable <20 µm mineral. Selective mineral aggregation has long been recommended to improve the poor flotation recovery of <20 µm sulfide minerals; however, successfully testing any type of selective sulfide mineral aggregation’s effect on flotation recovery in the laboratory on practical plant samples requires reproducing plant cell physics. The energy input per litre and the forces in a laboratory cell are vastly different to a plant cell. Reproducibility between laboratory and plant tests requires that these differences be minimised. The physics of the laboratory flotation cell is particularly important when fine mineral aggregation tests are carried out.This paper outlines a modified laboratory aggregation and flotation method that closely reproduces plant performance in a laboratory test.CITATION:Sato, D, Lumsden, B, Senanayake, S and Morgan, D, 2014. Development of a laboratory flotation method to test plant mineral aggregation, in Proceedings 12th AusIMM Mill Operators’ Conference 2014 , pp 173–178 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 1, 2014

By G Jones

The Singapore Land Transport Authority (LTA) has been procuring the expansion of their underground mass rapid transit rail network at a prodigious rate since the first line opened in 1987. Four lines (149 km) are currently operating and several more lines are at various stages of planning/construction; one of these is the Downtown line stage 2 (DTL 2).DTL 2 contract C917 was awarded in September 2009 for S$320 M. On 18 June 2013 the original contractor became insolvent, leaving the works incomplete. Following a fast-tracked tender process, McConnell Dowell was awarded the S$254 M contract on 29 August 2013 to complete the works. This contract includes two underground stations constructed by cut-and-cover methods and twin bored tunnels between the stations. Each tunnel is 1400 m long, excavated by earth pressure balanced (EPB) tunnel boring machines (TBM) at an average depth of 20 m and segment lined to 5.8 m inner diameter. The tunnel alignment is located under a busy five-lane road lined with prime residential real estate and congested with utilities.To compound the difficulty the tunnels are located within the notorious Bukit Timah Granite formation. This has a very wide range of strength, from below 1 MPa to over 300 MPa. This strength range is a consequence of six weathering grades, from soil to fresh rock, with the fresh granite causing severe abrasion problems. The various grades can occur within a very short distance of each other. Consequently, the problem of supporting a mixed face exists, particularly in the intermediate weathering grades where intact rock is encountered in the invert and corestones within a loose soil matrix in the crown, which can increase the instability by allowing the ground to flow into the TBM.The focus of this paper will be the excavation of the bored tunnels by EPB TBM used by McConnell Dowell to complete these challenging works.CITATION:Jones, G and Shepherd, J, 2014. Earth pressure balanced tunnelling in a dense urban environment, C917A, in Proceedings 15th Australasian Tunnelling Conference 2014 , pp 41–50 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 17, 2014

By P McCarthy

The relatively new field of geo-metallurgy promises to improve the predictability of mill feed quality and enhance processing outcomes. However, it is subject to the same limitations as the prediction of grade using geostatistics and has additional limitations due to the spatial distribution of the variations being measured and the sample sizes required. Schedules based on geo-metallurgical models will, in turn, be subject to variations arising from geological control and practical mining constraints.This paper discusses the key drivers of variations in mill feed quality and quantity from a mining perspective. It concludes that geo-metallurgical modelling addresses only one aspect of the problem. A case study is provided to illustrate poor predictability of metallurgical performance even with very detailed geological data.

Aug 8, 2011

Planning of modern mines entails considerable challenges in the areas of ground control, materials handling, safety, environment, equipment and personnel. Many orebodies are not economical unless efficient mining systems are used to win the ore. Relentless pressures are placed on mine operators to force them to become more productive and to make mines more competitive in modern economies. This has generated an intense drive to adopt technologies that rely on a greater degree of mechanisation, automation and computerisation. There is no turning back; high technology in mines is here to stay: computer controls and monitoring, computer aided mine design, information management systems, etc. During the past 20 years significant advances have been made in the areas of mine design, mine equipment and geomechanics. One could rhetorically ask if the advances in mine backfill technologies have kept pace with developments in other sectors of the mining industry. This paper will look at a few key mining technology sectors and will compare the relative progress of backfill technology to these sectors.

Jan 1, 1998

By J Nantel

Planning of modern mines entails considerable challenges in the areas of ground control, materials handling, safety, environment, equipment and personnel. Many orebodies are not economical unless efficient mining systems are used to win the ore. Relentless pressures are placed on mine operators to force them to become more productive and to make mines more competitive in modern economies. This has generated an intense drive to adopt technologies that rely on a greater degree of mechanisation, automation and computerisation. There is no turning back; high technology in mines is here to stay: computer controls and monitoring, computer aided mine design, information management systems, etc. During the past 20 years significant advances have been made in the areas of mine design, mine equipment and geomechanics. One could rhetorically ask if the advances in mine backfill technologies have kept pace with developments in other sectors of the mining industry. This paper will look at a few key mining technology sectors and will compare the relative progress of backfill technology to these sectors.

Jan 1, 1998

By D Cork, R Peet

"Methane is a signifi cant greenhouse gas. Methane is released from coal seams during the mining process, both in surface and underground operations. This uncontrolled release is termed æfugitive emissionsÆ and in underground mines is transferred to the atmosphere in ventilation air, known as ventilation air methane (VAM). The global VAM emissions are over 369 Mt of CO2-e/a (Butler, 2011; US EPA, 2010). Coal mines may abate this VAM or consider abatement should there be a price on carbon. These fugitive emissions are heading towards ten per cent of AustraliaÆs emissions by 2020 (Department of Climate Change, 2011).There are safety issues involved in VAM destruction. Due to the nature of coal, and coalextraction, unpredicted methane spikes above the lower-explosive-limit (LEL) can occur in theventilation air; for example outburst events or ventilation failure. This could lead to a mine fi re ifthe mine ventilation air was connected to a VAM abatement plant and the risks are left unmitigated.CorkyÆs is working with the mining industry to directly address these safety issues. CorkyÆs calltheir technology VAM RAB, which stands for ventilation air methane regenerative afterburner(VAM RAB). VAM RAB utilises the principles of a thermal oxidiser.This paper discusses fi ve independent layers of protection (ILPs) to fi rst stop methane reachingthe thermal oxidiser and secondly prevent the fl ame front from burning away from the VAMRAB. The test work completed or contemplated includes safety integrity level (SIL) assignmentto various vents, barriers and door systems to prevent a fl ammable mixture reaching the VAMRAB, proven rapid response methane monitoring sourced from the petrochemical industry, anddefl agration experiments to test the eff ectiveness of the passive geometry and active engineeringcontrols. These experiments and SIL assessments indicate that it is possible to safely connect theVAM RAB to a working coal mine.Further work is required to upscale the pilot safety work. Refi nement to the design is possible;for example improvement to safety duct controls once trialled at demonstration scale plus thermalenergy capture for power generation or other applications to provide heat. Nevertheless, thispaper shows how safety issues can be managed by a multilayer of protection approach usingvents, barriers and doors, and appropriate thermal oxidiser geometry."

Jun 1, 2012

By R K. A Taylor

The growth in production of beneficiated ilmenite products has been one of the most significant trends in the titanium feedstock industry over the past 30 years. In this period, the production of titanium slag and synthetic rutile has grown five-fold to the point where these products represented 56 per cent of total feedstock production in 2000. Additional production capacity is being proposed as the core component of new feedstock supply projects presently under consideration. A high proportion of these products is based on technologies for which the inherent quality of the is an essential factor. Location specific factors also play a large part in determining the cost of production. As the demand for such products grows, and the availability of favourably located sources of ilmenite of suitable quality declines, it can be expected that existing beneficiation technologies will become increasingly constrained. Existing beneficiation technologies, and those which have been developed, but are not yet commercially applied, are reviewed. Future issues which are likely to impact on the cost effectiveness of these technologies, or the quality of final products, are identified. These factors suggest directions for development of ilmenite beneficiation technologies to achieve economic production of the quality of feedstocks which will be demanded by the TiO2 pigment industry in the future.

Jan 1, 2001

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