The contract was due to end on December 31 and, during the last six months, tenders were invited from various companies including KMCC.
The mining contractor has been on site since before the mine went into production in 1989.
However, after careful consideration of the tenders and undertaking an extensive feasibility study, the company resolved not to award a further mining contract, but to start with the transition to owner mining.
Although the switch to owner mining requires an investment of over N$100-million, the company believes that this decision is in the best interests of the long-term future of Navachab gold-mine.
AngloGold initially decided to employ a mining contractor due to the then-expected relatively short lifespan of the mine. However, last year, the mine obtained approval for its Eastern Pushback project, which will extend the life of the mine by some eight years – from 2005 to 2013.
Full-scale mining operations are to cease when the KMCC contract ends and are expected to start again in mid-2004.
“By this time, new mining equipment would have arrived and the recruitment and training of employees would have been completed,” AngloGold said in a statement.
Production will not be affected during the first half of 2004, as stockpiles are sufficient to feed the gold plant during this period.
Some 180 KMCC employees will be affected by the termination of the mining contract, and the mine will start recruiting temporary staff for the crusher feeding operations.
The recruitment of permanent staff for the mining operations is to be conducted during the first part of next year.
Vacancies will initially be advertised internally, both at Navachab and KMCC. Employees from these two companies who meet the necessary requirements are to receive first consideration.
KMCC and the management of Navachab are in discussions and will be formulating plans to ensure that the transition takes place with as little disruption as possible.
It is known that AngloGold is constantly seeking ways to extend the life of the mine, either through exploration drilling or by improving operational efficiencies.
Earlier this year, an AngloGold spokesperson said a feasibility study into extending the life of the mine to more than 20 years is under way. It is this increased lifespan that has prompted the gold giant to re-examine its mining options.
The Navachab operation is 100% owned by AngloGold and produced 2,65 t of gold, at a record low total cash cost of $147/oz, in 2002.
Last year, the mine treated 1,37-million tons of ore, which was 4% above budget. Total tonnage mined (3,7-million) was 3% above budget.
Its processing plants have a production capacity of 110 000 t/m and include mills, carbon-in-pulp and electrowinning facilities.
The mine’s reserves are calculated at 10,8-million tons at 1,81 g/t for 0,6-million ounces, while its resources are calculated at 127,1-million tons at 1,13 g/t for 4,6-million ounces at a 0,40 g/t cut-off.