The diminishing nature of some land-based mineral resources (the resource determines where you mine and whether you mine – not a nongovernmental organisation focus which is, in fact, a welcome interest) has increased the importance of marine mining and has reignited the interest of mining houses in this new frontier.
Although Southern Africa has a relatively long history of marine mining, the focus was mostly on land-based natural resources during the commodity boom as the emphasis was placed on large volumes when weighed against the cost of mining.
However, the onset of the global economic crisis has significantly affected the mining industry with many mines and smelters being shut down during the worst part of the crisis. During this time, with limited cash burn, increasing volume was the name of the game.
This started to shift the focus of mining houses towards the seas, which offer a plethora of readily available resources.
New Player in the Industry
The recently signed joint venture (JV) agreement between gold-mining major AngloGold Ashanti and diamond giant De Beers has indicated that companies are prepared to look past the high start-up costs associated with this type of mining.
The JV will initially focus on exploration, but, if successful, will ultimately mine marine deposits off the continental shelf. Further, the focus of the venture will not be on diamonds, unless these occur along with other target minerals and metals.
AngloGold Ashanti and De Beers are to establish a jointly owned technical services company, Techco, which they intend to develop into a fully functional marine exploration and mining services company.
Techco and De Beers Marine, a wholly owned subsidiary of De Beers, will provide the skills, expertise, technology and facilities related to marine exploration on the continental shelf.
AngloGold Ashanti will solely fund the JV and Techco until the completion of an initial exploration period of at least three consecutive sampling seasons to December 31, 2012, or until the gold-miner has funded a total amount of $40-million.
Upon the conclusion of this period, AngloGold Ashanti will have earned in an equivalent interest to De Beers’ in all the projects pursued under the agreement. Following the initial exploration period, the two companies will be equal partners in the JV.
Marine-focused engineering company Marine & Mineral Projects MD Rodney Norman reports that the JV is a major investment boost to the industry.
“The JV is significant as it will identify placer deposits in the oceans of the world, which will be explored and their potential understood. The JV heralds the start of an exciting future for the underwater and undersea mining industry. In addition, it illustrates that major mining houses are seeing underwater and under- sea mining as the future of new deposits, discoveries and sources of revenue,” says Norman. He adds that the JV can take the lead not only in Africa but worldwide.
Undersea mining off the coast of Southern Africa has a rich history that dates back some 30 years. Undersea mining in Southern Africa began off the west coast of Namibia when Texan oilman and entrepreneur Sam Collins and his company, Marine Diamond Corporation (MDC), recovered its first diamonds in November 1961. Collins developed a bankable reserve and, by December 1962, the mining vessel Barge 77 was commissioned. The success of the vessel prompted MDC to commission a series of other vessels. By 1963, the company had five vessels in operation.
The main focus of these vessels was the recovery of diamonds at depths shallower than 30 m. However, by 1965, the company was still reporting financial losses with minimal mineral reserves identified; that same year, MDC approached De Beers, which became MDC’s major shareholder in 1965. By 1971, reserves in the shallow water were exhausted and mining operations ceased.
De Beers, now the sole owner of MDC, turned its focus to developing and understanding the marine diamond resources. Sampling and exploration operations continued until the early 1980s. By 1983, De Beers had delineated a deposit of significant proportions and De Beers Marine was founded to develop the technology to mine diamonds from depths of between 100 m and 200 m.
The first mining vessel employing a remote subsea crawler, the MV Louis G Murray, was commissioned in 1989 and heralded the start of production. A second large-diameter drill ship, the MV Coral Sea, was commissioned in 1991 and was followed by a succession of mining vessels.
De Beers Consolidated Mines (DBCM) COO Mike Brown confirms that the group has a positive outlook on marine mining based on strong volumes attained from its offshore concessions. These operations are conducted by Namdeb (the partnership between the government of Namibia and the De Beers group) and by DBCM, the empowered South African mining company that mines diamonds off the Northern Cape coast.
“De Beers’ most important mining area is, in fact, the Namdeb concessions off the Namibian coast. The diamonds found in that area were deposited into the sea from the Orange river and are typically large in size – some measure up to 4 ct. The resource in Namibia is significant. Currently, De Beers Marine Namibia is mining over one-million carats a year and this resource will continue for a number of years with current estimates indicating that the area has a 20-year life-of-mine,” says Brown.
Because marine mining is capital intensive, Brown reports, mining economically is the key to success. Namdeb’s licence area covers much of the Namibian coast.
The same applies to the South African concession area, where DBCM has an area of about 8 800 km2. He elaborates that one requires such extensive areas to find the relatively small deposits to try to prove up to mine, if profitable to do so.
The diamonds from the South African Sea Areas (SASA) are a lot smaller than the stones from the Namibian sea areas.
Brown notes that the marine mining industry is a technologically advanced industry. De Beers has research teams in Johannesburg and Cape Town dedicated to the task of making mining more efficient by using the best technology available while containing costs.
Currently, six mining vessels and one sampling vessel operate along the coastlines of Namibia and South Africa; De Beers Marine Namibia has four fully operational vessels that use the airlift mining method.
When employing the airlift mining method, a large pipe, similar to a mineshaft, although a lot smaller in size and dimension, is lowered from the ship to the ocean floor. At the bottom of this pipe are two horizontal pipes which blow air onto the seabed; because of pressure, this air causes a vacuum in the central pipe, which transports the material up to the surface.
This type of mining is suited to the Namibian offshore operations as the diamonds are located at depths greater than 70 m. “Because the system relies mainly on pressure to form a vacuum, which is key to this mining method, the deeper the stones, the more effective this system will be. The size of the stones also means that this is the best system to use,” says Brown.
De Beers Marine South Africa employs a different method to mine diamonds off the South African coast. Because the diamonds are smaller and shallower, De Beers Marine South Africa makes use of a crawler that is operated from the surface. This crawler sucks up any stones which it comes across on its predetermined path and transports them to the surface through a pump. De Beers Marine South Africa currently operates the DBCM-owned mining vessel Peace in Africa and owns and operates two sampling vessels.
Brown reports that the mining ship carries a crew of about 60 men and women who stay at sea for 28 days working 12-hour shifts a day. The ships remain at sea for about two-and-a-half years, after which they come back to port so that the necessary service, repairs and seaworthiness inspections can be carried out.
Brown reports that, in the past, De Beers was criticised over allegations of the negative environmental impact that its mining methods were thought to have on the seabed. A particular area of concern for environ-mentalists was the effect on crayfish.
However, Brown reports that researchers have ascertained that De Beers believes its deep-water mining operations do not overlap with typical crayfish habitat. He adds that researchers and scientists continuously carry out tests on the recovery of the ocean floor after mining has taken place. “Studies show that the recovery of seabed always occurs after mining. The recovery rate depends on many factors but can occur within a four- to eight-year time scale,” says Brown.
Norman agrees that marine mining has limited environmental degradation.
“A vessel at sea is a self-contained mining unit capable of moving to and mining the mineral deposits. In this way, the vessel causes less destruction of the environment than a land-based operation with vast open-pits and underground operations, which scar the land. As a floating mine, it is mobile and is able to move from deposit to deposit without new capital being spent. The ore is treated at sea and, in the case of the diamond-mining industry, no toxic or destructive chemicals are used; waste material is put back on the seabed, causing minimal disruption,” says Norman.
Norman reports that, hopefully, South African production will ramp up in time to the same level as the De Beers Namibian operations by mining about one-million carats a year. However, this will be costly and require a significant capital investment.
Current reports from De Beers indicate that the company will not be looking to increase capacity at the moment. “Because the industry is capital intensive, with a new ship nowadays costing about R2-billion, the company is looking at improving the efficiency of its vessels rather than adding another vessel to its operations,” says Brown.
Norman adds that the JV between AngloGold Ashanti and De Beers indicates that companies wish to explore for gold off the coast of South Africa. Marine & Mineral Projects has knowledge of occurrences of heavy minerals off the east coast and phosphates off the south coast. However, little or no exploration has taken place to identify the potential reserves of these areas or the presence of other mineral deposits.