Gold Fields’ South Deep no longer a white elephant, thanks to a Rhino
Mapungubwe has its golden rhino, and now Gold Fields has a Rhino it hopes will be a cash-spinner in a gold mine.
The beast in question is a R75-million drill rig, a product of Sweden’s Sandvik that is used for so-called long-hole stoping, or drilling vertical holes overhead instead of the horizontal ones more typical of mining. The technical term for it is a mobile raise borer.
Pointing vertically brings to mind a rhino’s horn. As it is Swedish, it can also evoke the mythical horns on a Viking helmet.
In terms of size, it’s more like an elephant, with an operator housed in a compartment atop a hulking tractor-like machine, the vertical drill looming several metres in front. The Rhino bores a hole with a circumference of 750mm into the thick gold-bearing reef above, in this case to a distance of about 15m, but it can drill up to 40m.
On a recent media visit to South Deep, journalists were given a first-hand look at this monster as its drill slowly swirled into the earth above, piercing a vein of gold-holding riches.
Holes of 89mm are then drilled around it and packed with explosives that will detonate and dislodge the ore above.
The bottom line is that this cutting-edge engineering marvel is boosting the percentage of gold that is extracted from the rock above, and it can be done in a fraction of the time that it previously took. That flows straight to the bottom line.
“We are unlocking cheap tonnes,” said Martin Preece, head of Gold Fields’ South African operations.
In 2017, Preece said Gold Fields was extracting about 70% of the gold that it could from the ore body at South Deep, a percentage that has gradually gone up to 85%. The Rhino has that number up to 93% and the aim is to go beyond that.
“If you can add 10%, you can imagine what that means. This Rhino is the best money I ever spent,” Preece said. The Rhino was sent to South Africa in parts, which were then taken down into the mine and assembled there — sort of like Ikea.
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It is still in the teething stage and the operators continue to train.
“It’s not running like a Swiss watch yet,” said Preece.
Still, he reckons it will have paid for itself within months. And the plan is eventually to operate it remotely from the surface, where much of the work in South Deep is already being conducted.
Indeed, South Deep is unusual for a deep-level South African gold mine by virtue of it being mechanised and also going through a process of automation.
It is Gold Fields’ last operational local asset, a legacy of the company’s decision a decade ago to turn to mechanisation while spinning off its domestic labour-intensive, conventional mines into Sibanye.
It has been anything but smooth sailing and, until recently, South Deep had been a perennial underperformer among Gold Fields’ global asset suite. For years it chowed money and delivered little, thwarting attempts to mechanise properly at such depths.
Eight years ago, Gold Fields brought in a crack team of Australian engineers in a bid to decipher the South Deep puzzle. That didn’t go quite according to plan and for a while, South Deep looked like it was the mine of the future and always would be.
It seems a corner has been turned. In the first six months of this year, South Deep made an after-tax profit of $70.8-million, 12% of group profit and about double what it made in the same period in 2021.
That’s not exactly shooting the lights out, but at least it’s no longer burning cash — and it is sitting on more than 30 million ounces of extractable gold.
It will be a long time before South Deep repays the more than R30-billion that Gold Fields has sunk into it, but at least it’s no longer looking like a white elephant.
“South Deep is the most modern and advanced underground mine in South Africa. We all want it to work,” said Peter Major, fund manager at Cadiz Corporate Solutions. BM/DM