Mining has been continuing at NM for some 78 years and, for the last thirty, the mine has reputedly been on the brink of closure.
With this in mind Mining Weekly drove to the west coast for an update on NM’s future.
The mine was one of De Beers’ operations that was loss-making. However, under the leadership of Philbert Rweyemamu, the mine is busy turning its future around.
Rweyemamu, a Tanzanian by birth, after 27 years with De Beers, ‘has the corporation in his bloodstream’.
“Our approach to bring this mine back to profitability looks at two components,” he explains.
“The cost of NM’s overheads is enormous, as the mine is in a remote location and thus it is the provider of all services to its employees.” The second aspect is that NM is an old mine with dwindling reserves and no high-grade areas which can be used to sweeten the grade when needed.
Through the life of NM, successive mine planners produced mine plans that would maximise the value of the operation and return to shareholders. Where there used to be pockets rich in diamonds, in areas such as the Buffels Marine Complex (BMC), these have now been depleted.
What remains today is a deposit that Rweyemamu explains is “not spectacular”. However, the mine still has a life-of-mine of eight years and there is every expectation that there isdouble that life still waitingto be delineated and mined.
In future, the emphasis will beon increasing efficiencies, and changing the mining method to suit NM’s orebody.
“Every year, we move 50-million tons of which only five-million tons is payable ore,” says Rweyemamu.
A five-per-cent cut in the bill for mining 45-millionwaste tons will make a major difference to the viability of the mine.
To illustrate the capital-intensive nature of the mine, NM’s wage bill makes up only 37% of costs.
Monthly equipment costs run at R16,4-million a month.
About five years ago, mine management, by extrapolation, could see that the mine would makelosses in 2004.
The change in the exchange rate also had a serious impact on NM’s profitability, as did last year’s Business Model Review in which De Beers restructured its human resources.
Where kimberlite mines have three-dimensional blocks of ore, at NM the alluvial orebody is effectively two-dimensional.
Mining acts like a cookie cutter; once a block has been mined down to bedrock, the reserve is completely exhausted.
While the process of increasing revenue comes with associated costs, NM will be ensuring the scale tips to the profit side, explains Rweyemamu.
Along with this, NM is question-ing all aspects of its overheads, such as the two towns of Kleinzee and Koingnaas.
“Firstly, running municipalities is not one of NM’s core functions,” says Rweyemamu.
Two consultancies were each given the opportunity in October to present proposals on how to transform the towns on NM’s extensive property into entities operated through the regular provincial municipal structures.
PricewaterhouseCoopers was awarded the contract and has been tasked with preparing a feasibility study on how NM would privatise the municipal services.
The ultimate aim is to have the towns of Kleinzee and Koingnaas proclaimed.
There is the spin-off that, once fully opened to the public, both towns have considerable tourist potential.
NM has introduced its owntourism initiative which has its own Website.
“With its unspoiled beaches, seal colony and the Shipwreck Trail, this part of the West Coast is a truly superb getaway,” says Rweyemamu.
In this initiative, the mine has had support from central government, and progress is being made towards a mutually-beneficialarrangement, where a new tourist opportunity will be created on the West Coast that will allow NM to graciously relinquish a severely limiting overhead.
With the long history of diamond-mining on the West Coast, De Beers is concerned to promote the sustainability of Namaqualand.
NM plays a vital role in the local economy as the financial flow-through from the mines accounts for some 30% of regional gross domestic product.
Negotiations are under way with Sanparks to take over certain NM lands in which the mine has little geological interest, which would give the conservation agency’s small local national park access to the sea.
Making the most of thefuture
NM occupies most of a coastal strip some 250 km long and has its main offices at the town of Kleinzee, which was established throughdiamond-mining in 1926.
Jack Carstens discovered diamonds at Kleinzee in 1925, and mining has been continuing in this west-coast region since 1927.
Along this strip, there are three main mining areas, the Buffels Marine Complex (BMC), the Koingnaas Complex (KNC) and the Buffels Inland Complex (BIC).
The BMC stretches from near Port Nolloth in the north to about 10 km south of Kleinzee.
To the south of this, there is a further 17 km of coastline, which is, in part, under a NM prospecting licence, and the remainder state land.
Again to the south, there is the KNC, which is divided into two – the Koingnaas section and the Mitchell’s Bay section – by the town of Hondeklip Bay.
NM also has extensive prospecting areas inland of current oper-ations and to the south of Mitchell’s Bay.
At present, NM’s annual carat production of some one-million carats is nearly equally split between the KNC and the BMC.
A surf-zone operation, which is being mined by three separate contractors in a diver-and-suction hose operation, makes a minor contribution to overall carat output.
Another source of carats for the future is in the retreatment ofhistoric mine dumps, as earlymining methods did not take all the diamonds out at the first pass.
Even now, the more efficient De Beers’ plants do not achieve a 100% recovery.
The major opportunity is in the mine’s tailings, and, at present, a large dump of Jack Carstens’discards is being retreated to good effect. A further tailings dump of the mine’s AK3 plant is being evaluated.
With no stripping costs, these dumps are an attractive target even at grades of two carats per hundred tons (cpht).
Offshore, Namaqualand mines does not have the marine concessions in the areas from behind the surf zone out to 5 km.
What NM does have access to are the marine concessions, which start 5 km out to sea.
No work has been carried on these submarine beaches to date. However, moves are afoot to collaborate with De Beers Marine to explore the deep-water potential.
Processing is done through two plants in the BMC and two in the KNC.
All plants use dense-media separation to produce a concentrate, which is then taken to the finalrecovery plant near Kleinzee.
Final recovery uses magnetic and X-ray processes with the ultimate sorting being done by hand through glove boxes.
Tailings from the final recovery plant are sent through a recently-constructed optical sorting plant, which reclaims any stray carats.
At the BMC, mining has focused on palaeo beaches, which are, onaverage, about a kilometre inland.
In the south, the ancient river channels are the principal current mining target. The BIC has been closed for some years. However, new reserves have been found there and this complex is currently being restarted.
Faced with dwindling reserves, ten years ago, NM began a programme of geophysical surveys to build a reliable geological model of the remaining resources.
NM’s strategy for the years ahead rests on three initiatives: • Survival: by making NM profitable, in the next two years.
• Sustained profitability: by keeping NM profitable for the five years after 2008.
• Thrive@5: a concept which should see the mine in successful operation to 2028 and beyond.
The thrive@5 phase will ensure that, by examining all parts of the mining licence area, the full value of NM’s potential resource will be maximised.
In the strategic business plan, the emphasis is to explore to bring in sufficient carats into the reserve category to equal the mine’s depletion rate.
“What we have now, is a large low-grade orebody, and thus we will have to find a way of reducing the cost of waste stripping,” says Rweyemamu.
A further area of high cost, though with concomitant high returns, is the business of sweeping the bedrock with its trap-sites completely clean, as this is where the concentration of diamonds is the highest.
Geology to take the mine forward
One of the strengths that NM has is that it has invested in a well-staffed geology department.
The two richest diamond deposits that were and still are being mined, are the 95 m and 50 m raised terraces at the BMC. These terraces are palaeo beacheswhich run more or less parallel to the existing coastline and are about a kilometre to a kilometre-and-a-half inland.
The diamonds that are found in these beach gravels were transported down the Buffels river and, when deposited in the sea, were washed by the prevailing currents northward.
Consequently, though the Tweepad plant in the north of the BMC has the highest throughput, its average stone size is 0,43 carats.
Similarly, the West Coast marine currents endowed the KNC to the south of the Buffels river with stones of an average 0,23 carat size.
Again, though the KNC pro-duces more carats than the BMC, therevenue is lower.
The largest stones are found in the AK3 plant area with anaverage size of 0,57 carat size.
Now, after 76 years of mining, the raised terraces have largely beendepleted and the challenge currently is to prove further deposits and mine them cost-effectively.
“About ten years ago, NM began a programme of geophysical surveys, and this revealed hitherto unknown aspects of our geology,” explains senior geologist Simon Netshiozwi.
As geophysical techniques have improved, so the orebody model has been increasingly upgraded.
The most recent campaign has been in the past two years, and here the increasing sensitivity of the surveys has led to features such as the gravels in the Megalodon river channel, which is in places deeperthan 200 m, being picked out on the survey.
This survey has shown the elevation of the bedrock, allowing for the identification of palaeo river channels and potential trap sites.
From this information, a geological model has been constructed from which areas of priority have been selected.
These areas are drilled first with a probe drill to delineate targets and, depending on the results, with a large-diameter auger drill, which collects samples from which thediamond content can be determined.
Based on this work, trenching of these areas is currently under way, and is scheduled to continue for the next three years and beyond.
For the mine’s short-term strategyof sustained profitability, various mining targets have been identified which will keep all NM’s plants running until 2008.
In the BMC, knowledge of the bedrock characteristics pointed to anextensive area of lower-grade depositson the coastal plain between the sea and the raised terraces.
These recent emerging terraces, asthey are known, are being investigated for its carat potential at present, and the first three reserve blocks have been demarcated for mining.
The grade here is about threecarats per hundred tons. However, the stripping ratio is lower than some of the inland areas. In the KNC, in the medium term, NM will be mining the palaeochannels revealed by the aerialgeophysical survey.
In the BIC, for the medium term to 2007, the carats will be sourced from the Strydrivier and Nuttebooi blocks.
The Strydrivier block has some 40 000 tons of ore that, on its own, will be depleted next year. But the mine also is looking at some 1,4-million tons of ore in the Nuttebooi deposit nearby.
There is also the possibility of extending this area through a type of trial-mining exercise.
Further potential exists further up the Buffels river in the Buffelsbank area. To keep all the plants in ore to 2013, the mine has various options. In the BMC, the mine will be looking, among other mining areas, at the shallower northern section of the Megalodon deposit.
Halfway between the BIC area and the AK3 plant there is the area of Manelsvlei and Dikgat where another 4,5-million tons of ore is available.
It is anticipated that the Stryd-rivier and Nuttebooi areas will be depleted in 2007/8, after which it is expected that the plant will be dismantled and moved to the Dikgat area to produce ore until 2013.
In the Koingnaas complex there are what are called the link blocks, which were detected by aerialelectromagnetic survey and scout sampling a year ago.
The next phase to keep the mine in production would be looking at areas of NM that have not been quantified as yet.
These could include the small-scale mining of areas that are too far from the existing plants to justify the erection of a new plant.
There are ideas of joint ventures with NM’s neighbours and thepossibility of using contractors.
This is all desktop work.
All of these things need to be considered, though one thing that needs to be considered is that this is a lower grade than the mine has ever mined before. However, it is not a lower grade than anyone else has mined before.
This area covers a vast stretch of land and has a grade that is slightly below three carats per hundred tons.
This work would encompass all mineable areas not touched to date as well as the Megalodon deposit.
Currently, the mine has very substantial areas of the West Coast under prospecting licence. Innovation still seen as key While the mine has been struggling to raise its grades and lower its costs, it has not fallen to the temptationto skimp on technological innovation The mine recently installed a Metso Hydrocone crusher at its Tweepad plant to improve crushing efficiency and minimise the chance of diamond breakage.
The processing team is currently considering the option of installing preferential jaw crushing to increase diamond-liberation efficiency without increasing the risk of diamond breakage.
This technique would crush the conglomerate, however leave the more competent material unbroken,and will also save on power and running costs.
The innovation, however, that is going to have a marked effect on profitability at NM is the introduction of the optical sorting plant, which was formally opened on September 25, 2005.
The final recovery plant, like any other in the industry, is not 100%efficient and a certain amount ofcarats have been discarded in a carefully-guarded residue dump inside the final recovery plant compound.
Over the years, this has grown to 20 000 t at a grade of some 800 cpht, and the process called OptoSort will recover the estimated 153 000 carats in the dump.
This will be retreated and once the dump has been depleted, residuedirectly from the final recovery will be treated.
Retreating the residue through conventional processes will be slow and not particularly effective.
OptoSort recovers carats cheaplyand efficiently relative to conventional methods.
The process uses visual discrimination to separate the diamonds from the waste, employing a bankof mini cameras to scan the gravelas it falls from the end of a conveyor.
The plant is capable of processing about 150 tons a day at a target-recovery efficiency of 90% of the diamonds in the residue.
The plant created 22 new jobs, a factor of great importance in the economically-depressed Namaqualand region.
The capital required was R49-million while the design and construction was undertaken by IST Technik.
If one considers that West Coast diamonds command, at a conservative estimate, $134 a carat, the return on investment surpassesexcellent.