By: andrew lanham
22nd July 2005
Now Avmin’s purchaser, African Rainbow Minerals (ARM), is gearing up for a R2-billion expansion of the mine that has built a reputation for being one of the lowest-cost nickel-producers in the world.
Prompted by LionOre Mining International’s recent acquisition of 50% of Nkomati, Mining Weekly took the opportunity to visit this Mpumalanga mine.
Nkomati was formed from a combination of mineral rights held on two adjacent farms by Anglo American Corporation (AAC) and Avmin respectively.
The section of the orebody on AAC’s farm, Uitkomst, has been known of since 1929, when it was discovered by the pioneering Bushveld Complex geologist, Percy Wagner.
However, the first moves towards turning this orebody to account took place only in the seventies, when, in 1972, AAC and the Canadian miner, Inco, formed a joint venture to further the operation.
In 1977, AAC bought the mineral rights to Uitkomst outright.
On Avmin’s Slaaihoek farm, the local gold-mining operation, Eastern Transvaal Consolidated (ETC), acquired the mineral rights in 1939.
For the next 35 years, the Slaaihoek mineral rights sat in a drawer at ETC until a preliminary investigation of the property was undertaken in 1975.
Although mineralisation was proved in 1988, it was the discovery of the massive sulphide body (MSB) in 1990 that dramatically changed the prospects for the project.
This led to the establishment of the Nkomati mine in 1997 and, in 2004, Avmin bought out AAC’s share in the nickel operation.
The year 2004 also saw the deal between Harmony, ARM and Avmin, and Nkomati becoming part of the expanded ARM group.
Now, in 2005, the mine is moving towards a transformation from being a high-grade low-tonnage operation to being a lower-grade mine, but with greatly increased tonnages being mined.
Nkomati’s ore occurs in two distinct areas, the MSB and the Main Mineralised Zone (MMZ).
At the outset, the MSB contained 1,8-million in-situ tons of ore, which, in turn, contained primarily nickel, with significant copper and by-product platinum-group metals (PGMs).
The ore is contained in three lenses separated by a diabase intrusion.
The MSB, which has a headgrade of 2,3%, has been the focus of mining operations since 1997.
Today, the orebody has been fully delineated and currently has some 24 months of life left.
Annual production is made up of 5 500 t/y of nickel, 3 400 t/y of copper and 52 000 oz/y of PGMs in concentrate.
The mine produces two types of concentrate; a high-grade concentrate, which is toll-smelted and refined at Impala’s Mineral Processors near Rustenburg, a bulk concentrate which is toll-smelted at BCL’s smelter at Selebi-Phikwe, in Botswana, and refined by Falcon-bridge, in Norway.
Currently, nickel contributes 72% to a net revenue (July to December 2004) of R305,6-million.
In the second half of 2004, Nkomati declared an operating profit of R164,1-million.
The future of the mine lies in the line of nine orebodies that make up the MMZ.
However, to mine the MMZ with its lower grade of 0,49%, and retain the same margins, the mine must change from a 30 000 t/m operation into one producing 375 000 t/m, explains Arn� Lewis executive operations: ARMplatinum.
Of this, some 40 000 tons a month will come from underground.
However, Nkomati, in its fully-transformed state, will be sourcing some 335 000 t/m from a large new openpit system.
The Nkomati expansion forms part of ARM’s ‘2 5 2010’ strategy whereby the group is building six new mines and upgrading two, effectively doubling production in the group by the end of the decade.
In this strategy, Nkomati will ultimately be expanding its nickel production from 5 500 nickel t/y to approximately 16 500 nickel t/y in 2008.
It is estimated that the by- products will be 7 900 t of copper, 55 000 oz of palladium and 19 500 oz of platinum.
Setting up for expansion
The expansion has a number of factors in its favour.
When Avmin spent the capital on the 1994 mine, it went all out to make it as technologically efficient as possible.
Mining is all mechanised and, on any given shift, a production crew consists of between 12 and 14 people.
The ore hoisting is automated, as is the supply of backfill to the under-ground stopes. The cage is a push-button operation and the blasting emulsion parts are pumped underground and only become an active explosive when combined in the blasthole.
Mining Weekly went underground with mine overseer Manie Swart, who explained that, while the mine employs some 280 people in total, the staff turnover is negligible.
In addition, Nkomati is a comparatively safe mine with a current lost-time injury (LTI) rate of 3,5.
Though the operation has experienced two fatalities, the first was in 1994 during shaft sinking. The second followed ten years later in December 2004.
The motivation of the staff is evidenced in the May production figures, with the mine milling a record tonnage of 31 500 t, while the shaft also hoisted a record 39 585 t.
Mine manager Chris Knoetze says he wants to boost this to 40 000 t/m in the near future.
The strategic shareholding of LionOre is of crucial importance to Nkomati as the expanded 375 000 t/m mine will be able to use the recently-proved Activox technology, which has been developed by LionOre’s subsidiary, Western Metals Technology.
The Activox process involves ultrafine grinding of concentrates followed by low-pressure acid leaching in an autoclave, and is eminently-suited to the processing of large, low-grade orebodies.
A pilot plant has been in operation for a year at LionOre’s Tati Nickel mine, producing 300 kg of nickel a day and 150 kg of copper.
Management at Tati Nickel has been happy with the performance of the pilot plant, which, importantly, has a relatively small scale-up factor to being a full-size complex.
What is also encouraging is that Tati’s Phoenix orebody is similar to Nkomati’s MMZ orebody.
Mechanisation makes the most of it
“Importantly, we want to retain our people, as they are a first-class team with good attitudes and productivity,” explains Lewis.
Even though Nkomati is a small mine, when its productivity is benchmarked against some of the larger base-metal mines in the world, the tons per worker compares very favourably, he explains.
In looking at the cost structures, with inexperienced operators, the cost of trackless machinery tends to be high. At Nkomati the cost of machine wear and damage is very low.
Although the machines are ‘high hour’ units, good maintenance and operation have kept them cost- efficient.
Part of the future expansion plan is to increase production from the underground section of the MMZ to 40 000 t/m when the MSB has been mined to completion.
An advantage here is that this increased production will be mined and brought to surface using the existing shaft system and the same underground mining team.
The underground mining fleet will be augmented with an extra LHD and an extra dump-truck.
In terms of its underground fleet, at the outset, the Nkomati project team contracted Sandvik Mining & Construction South Africa to provide for all the mine’s trackless equipment requirements.
The drill fleet consists of a single-boom Solo longhole drillrig and two development twin-boomers.
Three LHDs, a smaller Toro 400, an intermediate sized Toro 1400, and a more recently-acquired Toro 0010 with a 16-ton capacity complete the fleet.
The ore is fed through an underground jaw crusher and onwards to two storage silos at the base of the main shaft.
The ore handling is automated using a remote-control system. A system controller on surface monitors the ore bins, the skips and the tips, using closed-circuit TV cameras.
This does away with the conventional team of the banksman and hoist driver. However, the conveyors are still supervised by attendants, one underground and one on surface.
The shift configuration is unusual in that the underground teams work two ten-hour shifts. Instead of the conventional late-afternoon blast, at Nkomati the blasting time is at 06:00.
There is an hour before re-entry and, from 07:00 to 00:11, maintenance is carried out.
The mining team works a six-day week with ten-hour shifts. The shift cycle comprises six days on (night shift), five days off and three days on (day shift).
Mining down to the last ounce
Mining Weekly was taken down the ventilation shaft to see the mining operation in the MSB.
Mining takes out close to 100% of the available ore in this body.
When the underground oper- ation began, mining was in the Lens 2 area, which was mined out some five years ago.
Now mining is in the Lens One area, which has also been extensively mined.
Remaining ore in this area will allow for another 24 months of mining.
With the expansion project, a start has been made on mining the MMZ orebody.
In the MMZ, all the development is on-reef, which assists with the cost of development, explains Swart.
At present, 25 000 t of the mine’s ore is sourced from the MSB, with 5 000 t of ore coming from the MMZ to make up monthly tonnage.
The MSB has a clear top contact, with the top of the orebody being reasonably flat. To mine the MSB, three drives were developed through the top of the orebody across the direction of the 10˚ dip, consisting of one central drive and two outer drives at the outer extent of the orebody.
A matching set of drives was developed at the base of the orebody, which is up to 30 m thick.
From the top central drive, 9 5 9 section stopes are developed out to the perimeter drives. Matching stopes are developed at the bottom of the orebody.
A slot is blasted between the top stope and the bottom stope and the ore between the stopes is removed using 15 m retreating benches.
The height of this panel can vary between 20 m and 31 m depending on the thickness of the orebody, explains Swart.
To extract the entire orebody, a set of primary stope pairs is de- veloped and benched out, leaving nine-metre-wide pillars between each.
When the primary stopes in an area are mined out, they are backfilled using some 14 000 m3 of classified tailings mixed with a binder.
The placing of backfill is fully computerised and is monitored using closed-circuit TV cameras by a single operator on surface.
It takes about six weeks to fill a stope and every month about 7 500 m3 of backfill is pumped underground which would otherwise have had to be stored in a surface tailings dam.
Currently, only the ultrafine material is placed in the surface tailings dam.
When primary stoping is completed, the intervening pillars are mined out using top and bottom cuts and retreat benching.
The sequencing of mining and backfill has to be carefully calculated. However, this technique has worked exceptionally well so far in that less than one per cent of the high-grade orebody will be left behind.
The MSB orebody has been mined in four blocks. The first two blocks have been mined out and the mine is currently benching out Block Three and developing the secondary panels in Block Four.
Once this has been done, apart from a single centre pillar, the orebody will have been replaced with backfill. To complete the mining of the MSB, the centre pillar will be removed.
The development of the MMZ is rather different in that the initial development is all being done on the bottom contact.
Rings will be drilled using the Solo drillrig and the ore will be extracted by means of open stoping.
The MMZ consists of nine orebodies in a line and, for the purposes of mining scheduling, is divided into blocks A, B, C, and D. The thickness of the orebody varies from 5 m to 45 m.
The mine employs three three-man exploration crews that are continuously employed underground, producing data from diamond-drill cores on the extent and grade of the mining blocks.
Nkomati’s future in its openpits
The expanded Nkomati operation in its final form will be sourcing about 90% of its ore from an openpit operation consisting of three pits, some three kilometres from the existing mine.
The pits will increase in size from Pit One to Pit Three and will be mined in that order. The Datamine model for Pit Three shows that the final size of the void will be 2 km long, 700 m wide and 150 m deep.
Environmental Civil Mining Projects is currently carrying out the five-year trial-mining phase of the openpit operation.
Nkomati may well use a contractor for the first five years of mining. However, after this, Lewis favours the idea of owner mining.
“Pit One is a test to get the grade model proved up properly,” says openpit manager Richard McLeod.
“So far, the tests look very promising, as the grade from drilling was determined at 0,49%. However, the openpit exercise, which began in January this year, has so far given grades as high as 0,5%, while the mills report getting as high as 0,7%,” he adds.
Later this year, a batch of concentrate derived from openpit ore will be sent to Tati Nickel for test processing through the Activox plant.
The openpit will also serve to prove up the mining methods that will be used in future, to ensure that the pitslope designs are correct.
At the time of Mining Weekly’s visit, an excavator and dump-truck fleet were taking out the broken rock from the first production blast.
The openpit team started building the waste-rock dump in January using the overburden from the pit to build the bund walls.
ECMP started stripping for production in April on schedule, and continued with this into May, taking the first production blast in June.
In terms of the weathered layer of ore, it appears from the mining done so far that this is about a metre deep, explains McLeod.
This ore will not be processed at present.
The orebody dips west-to-east at an incline of 5˚ and, according to the grade model, also dips north-to-south at about 2˚.
The stripping ratio in Pit One has proved to be about 2:1 as, even though Pit One lies under a hill, the underlying strata conforms to the variation in the topography.
Though this has not been approved by the board, in concept, the plan is to expand Pit One to produce 20 000 t/m in January 2007.
At the time of writing, Pit One was trucking 5 000 t/m from the new openpit to the mine some 3 km distant.
Bridging the gap
The question arose that the MSB will run out of ore in June 2007, before the 375 000 t/m expanded mine is operational.
“There is no way, even if we had finished the feasibility study for the expansion today, that the new and old operations could dovetail,” explains Lewis.
“The construction of the new plant will take two years and there would be the ramp-up period of a year,” he adds.
“So there is going to be a gap.” The feasibility study is still some way off being finished, as many factors, such as metal prices, still need work to complete the data.
The feasibility also now involves ARM’s partner in Nkomati, LionOre, which Lewis welcomes, as it has given a number of fresh insights.
To bridge the gap, there is an interim plan which will involve taking the underground production up to 40 000 t/m and the openpit up to 20 000 t/m.
In terms of processing, the fully-expanded operation would have to process the 375 000 t of ore being presented to it.
Though the current metallurgical team has stretched the current plant from its nameplate 10 000 t/m capacity to handle 30 000 t/m, a further 10 5 plus expansion will need a completely new plant.
In the interim, there are two options being investigated to bridge the gap to the fully-expanded mine.
This will be to retrofit double the capacity to 60 000 t/m on the existing plant or to scrap the old plant and build a completely new facility.
Asked whether it would be possible to make money out of 60 000 t/m at a greatly lowered grade, Lewis explains that this is indeed possible.
“At 60 000 t/m, the metal production will be approximately 3 800 t/y, which is lower than the 5 500 t/y of nickel that is being produced at present,” estimates Lewis.
While the operating costs will be greater with the increased tonnage, this will be offset to an extent by improved economies of scale.
Also, with the capital to be spent in the next two years, there are significant tax benefits, Lewis explains.
“While we are in this transitional phase, the mine will not have the same margin as it does now.
“However, this period will be invaluable as the mine will be able to learn more about the orebody,” he concludes.
Name: Nkomati Nickel
Owner: African Rainbow Minerals, LionOre Mining
Mine type: Underground and openpit nickel/copper
Location: Between Badplaas and Waterval Boven, Mpumalanga
Current mine life: Two years
Expanded mine life: 16 years
Current production: 5 500 t/y nickel, 3 500 t/y copper,52 000 oz/y PGMs
Expanded production: 16 500 t/y nickel, 7 900 t/y copper,74 500 oz/y PGMs
MSB grade: 2,1%
MMZ grade: 0,49%
Mine manager: Chris Knoetze
Edited by: andrew lanham