Johannesburg-based project management and engineering company Paradigm Project Management (PPM) will apply its ‘three halves’ philosophy to design and develop diamond producer Stellar Diamonds’ Tongo-Tonguma project, in Sierra Leone.
PPM was awarded the contract for the project’s front-end engineering design last month.
PPM director Jeremy Clarke explains that the company’s ‘three halves’ approach aims to produce mines for half the historical capital expenditure (capex) in half the time it has traditionally taken to do so, and enable them to operate at half the current operating expenditure (opex).
Through this philosophy, PPM helps diamond producers remain competitive in a challenging business environment. New projects, “designed for business excellence”, are realised by simplifying traditional approaches to diamond liberation and recovery, and balancing the technical and financial aspects of developing and operating a diamond mine.
Clarke notes that, historically, diamond projects have generally been developed on the basis of technical excellence, which was a good methodology when resource prices were high and operating costs were low enough to provide good net revenues. In the current depressed market, however, the most effective solution is the one that generates the best net revenue per hour, irrespective of the technical parameters, such as recovery efficiency, availability and manpower productivity.
“It has been PPM’s experience that, in the current economic climate, it can prove a better business proposition to decrease recovery efficiencies while reducing capex and opex by a proportionally greater amount, leaving the more difficult or refractory material to be recovered at a later date through a different business model that could benefit from improved technology in the future.”
He adds that the “value” of a project can be considered as the ratio of function over cost and increasing the functionality and/or reducing cost, thus, improves value. “Function is by far the dominant contributor to improving value and large cost reductions are mostly a consequence of innovative functional improvements.”
Clarke outlines that the main challenge facing diamond producers is the imbalance produced by a stagnant diamond price and ever-increasing production costs, resulting in decreasing profit margins. He adds that, while there still appears to be interest in diamond exploration in Africa, especially in Botswana, spurred on by the supply and demand gap that is considered to be expanding as the world slowly moves out of the global financial crisis, obtaining funding for exploration remains a significant hurdle.
With exploration projects being led predominantly by junior mining companies, any significant finds are likely to result in increased merger and acquisition activity to develop new mines. However, Clarke notes that most of the traditional funding institutions are still extremely risk averse and unlikely to provide venture or seed capital, severely restricting the ability of smaller companies to generate new projects. Any funding that is being secured has to be sought by more diverse means and at a high premium, he adds.
“The only route out of this conundrum is to radically review the cost structures within each mine and ensure that the operating costs are in the bottom quartile, compared with those of competitors.”
Adapting to Market Conditions
PPM proposes a simplified approach to diamond mining that uses modern technologies to condense the vast number of workflow processes featured in traditional diamond liberation, concentration and recovery.
Using autogenous milling, Clarke highlights, mines can combine scrubbing, secondary crushing, high-pressure grinding, roller recrushing and disagglomeration, and recovery plant feed preparation into one process. In addition, the mill can handle abnormal material shapes and fine and sticky material. Therefore, more extensive blasting can be undertaken in the mining process, which is cheaper than crushing or milling.
Waste sorting following autogenous milling, which effectively concentrates waste in the mill recycle load, can further remove a high percentage of the basalt and granite present in the waste stream. Thereby, Clarke says, the mill recycle load is reduced by up to 80% and opex is lowered.
X-ray transmission (XRT) technology, which combines diamond concentration and recovery, also allows for high-capacity sorting and replaces the dense-media separation (DMS) process usually needed for material that is larger than 12 mm. This results in a decline in opex and power and water consumption, and eliminates the need for X-ray machines for course material.
XRT technology is, moreover, rapidly advancing and Clarke notes that it will eventually be able to treat all fraction sizes down to 2 mm. However, DMS is still required to process smaller material, which has led PPM to develop a new design that can operate using only four motors, instead of the usual eight.
As less equipment is required, Clarke stresses that capex and opex are lowered, the necessary labour, working capital and logistics management are reduced, and commissioning and ramp-up are fast-tracked. In addition, a simpler process results in less circuit vulnerability, higher overall plant use and easier process control, which, in turn, enables easier operational training of employees and improved plant safety.
“The ‘three halves’ approach is not expected to be viable for every project, but it should be considered as a goal, where possible,” notes Clarke.