Every Friday morning, SAfm’s AMLive’s radio anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Kamwendo: Illegal occupation of the Obuasi gold mine in Ghana by ‘galamsey’ miners is dealing a devastating blow to South African investors.
Creamer: The company that bought the Obuasi mine in 2004 is AngloGold Ashanti. It even changed its name from AngloGold to AngloGold Ashanti to bring in the Ashanti, the Ghana Kingdom of gold, it was very important to it. It has had trouble with that mine for a long-time and it has had to put it on care and maintenance. In February, this mine began being swamped by illegal galamsey.
It has just gone from bad to worse to a point where, I think, that the Ghanaian government needs to understand, that they are not just looking at a big mining group there. There investors in that mining group are small people, they are provident and pension fund people, expecting that this is going to be an investment that yields. We normally expect law and order from Ghana, but I think our diplomats now have to go banging on the doors of the government to say this South African investment here is just being whittled down as we speak.
It is almost like having a house and you have got a couple of spare rooms and suddenly there are a whole lot of people in your spare room. You phone the police and you say there are people in the spare room. The police then say are you using the spare room? You say not quite at the moment and the police say so what are you worried about?
They will then send police out who will stand at your gate, but they won’t get the people out who are in your spare room. It is something that is as ridiculous as that, mines often have spare rooms because they need to keep moving and they deplete all the time. We know that the government can do this, because as some of this galamsey went into the very rich part of the mine, the deep-level high grade mine, close to the water pumps, which could have caused absolute devastation, quickly both the police and military got them out.
We know that it is possible, but we also know there is an election coming up in November and the government seems unwilling to disturb the electorate at this point and time. In the meantime, the reputation of Ghana as an investment destination going down the drain. We see people in a lot of other companies that were active there wanting to exploit gold mining opportunities moving across to Ivory Coast.
One wonders what the final outcome, but already there has been a death there. The communication manager of Obuasi John Owusu was killed when retreating vehicles knocked him over, because the galamsey where getting aggressive. We also find that these particular illegal miners are dying under there as well.
So, it is like a lose lose situation. Water is being polluted, nobody knows what the outcome is going to be. AngloGold has rushed to Washington and involved the Settlement of Investment Disputes body to try and settle this, because they are starting to be at wits end.
Kamwendo: South African project engineering company DRA is hitting the high spots as a developer of new gold mines in Africa.
Creamer: After the great financial crisis of 2008 and then 2010 a lot of South African mining companies where sitting here and those who provide services had to say they are going to have to look outside the country, because there is not enough happening inside South African mining.
DRA was one of those companies that thrust themselves over the borders and have done remarkably well in West Africa with a lot of gold projects. Also in Central Africa a massive gold project. They are now saying with gold on everyone’s lips they can now expand that, particularly in South Africa, where they used to only be involved mainly in platinum, coal and diamonds. Swinging into gold they are reporting that not only is there a lot of opportunity coming up in East and Central Africa, but also South Africa.
They are beginning to look very much back into this, because they are used to doing both big and small projects. A lot of opportunities are opening up in smaller project development, particularly with regard to mine dump retreatment as we have been speaking about. They say that they have got the tailings dumps and the big operations out on the East Rand with Ergo and one coming up in the West Rand with Sibanye Gold.
In between there are entrepreneurs who are looking to what happened during our golden dumps eras of the past and saying that they want to turn some of the tailings dumps to account in Blyvooruitzicht and in Pilgrim’s Rest, for instance. They see a lot of opportunity there and also investors are starting, because of the gold situation and the gold price, ticking up in dollars, to look at very old plans. Some of these plans in South Africa where still measured in pennyweights per ton.
With the gold price ticking up they are starting to take the dust off a lot of these plans. We look at them which is good for South Africa and also for a company like DRA who is able to get these projects going. They proved it in West Africa and now they want to expand it.
Kamwendo: A revolutionary new gold-mining machine is making good progress on South Africa’s West Rand
Creamer: This is at the TauTona mine. We know that we only access 60% of our gold and leave 40% behind, which is an absolute crime. What they are doing now is trying to introduce this new technology which is raise bore. You remove the gold and only the gold and then you quickly backfill with ultra-high strength backfill. Mother Nature doesn’t know that you have removed this gold.
They have been working on this particular scheme now for several years and they continually reporting progress, but unfortunately right out of the woods at this stage. Again, we had the AngloGold Ashanti COO South Africa Chris Sheppard saying there is progress here. That is the sort of word we want to hear. We know that it is supposed to reach a commercial level last year, but still a lot of this research and development takes a long time to actually reach fruition.
They have done fairly well and they have produced gold with this and they are going to the government and saying the business case of this technology will change radically if we are allowed to do what the rest of the world does and that is mine continuously. Why we don't mine continuously in South Africa is because the unions don’t like it, but also our method of mining. When you drill and blast you shake the whole place up and workers have to get out while you go and get that broken gold and try and recover all of it.
They only come back the next day. With these machines there is no drill and blast so you can actually go 24/7, 365 days a year. At the moment we are only doing 260 days really of work on the mines in a time where the gold price is really moving. We know that the way we mine is absolutely wasteful, because of that 60% that we can access, we lose 25% because that gold ore is shattered into so many pieces you can’t recover all of that.
Then there are seven transports out of the mine so you lose more. This is a national patrimony at a time where we need exports and everything we can. We also need technology now to take us out of this dark age of the way we have been mining and to able to recover all the gold or at least a much bigger percentage of it then we are doing now. This particular Mark IV high technology machine as they call it, which has been doing things in TauTona and other machines have also been moved into Savuka in the West Rand, is starting to look more and more promising.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.