Name and Location
South Deep gold mine expansion, Gauteng, South Africa.

Client
Gold Fields.

Project Description
South Deep is a fully mechanised underground mine, extracting a wide multiple band reef at depths of between 2 000 m and 3 000 m below surface. The extraction of such deep-level, wide reefs have not been totally mechanised elsewhere in the world. The production methods used at the mine are, therefore, unique and differ markedly from the labour-intensive mining method traditionally applied in underground mines in South Africa.

The project comprises a main shaft and a ventilation shaft – collectively referred to as the Twin Shaft complex, which will have a combined hoisting capacity of 370 000 t/m of ore.

The main shaft was completed in 2004 and comprises a single drop to a depth of 2 995 m.

The ventilation shaft has been deepened from 2 760 m to about 2 950 m and is fully equipped with ore-storage silos and conveyor belts at shaft bottom, a new rock winder and new headgear.

The mine’s headgear at the vent shaft was completed in 2011 using one of the largest fabricated steel headgear frames in the world.

The South Deep metallurgical plant, which was commissioned in November 2012, has also been expanded and has increased processing capacity from 220 000 t/m to 330 000 t/m.

From 2010 to 2012, the mine completed the construction of the centralised tailings storage facility, developed and installed infrastructure around the shaft systems and also changed to full plant tailings backfill for increased production levels. The backfill plant was commissioned in early 2012.

The South Shaft complex will add an additional 120 000 t/m of hoisting capacity to the mine, bringing the total combined hoisting capacity to 450 000 t/m.

The South Deep operation had a resource of 70-million ounces as at December 31, 2013, and a reserve of 35.1-million ascertained ounces, which will give the operation a life-of-mine (LoM) of about 70 years.

Net Present Value/Internal Rate of Return
Not stated.

Value
An estimated $4-billion has been invested to date.

Duration
South Deep’s production build-up is expected to reach a run rate of between 300 000 and 330 000 reef tonnes a month by the end of 2017.

Latest Developments
Despite the implementation of a strategy to buffer Gold Fields from an enduring low gold price environment, the company said in February this year that the South Deep mine had been pushed to “its low point” in 2014.

“South Deep remains challenging and the planned build-up for 2015 will not be achieved. However, we believe that 2014 was the low point for the mine and [we] expect consistent improvement through 2015 and beyond,” CEO Nick Holland said during a presentation of the company’s results this month for the year ended December 31.
Gold production from the operation for the full year was severely impacted on by a four-month ground support remediation programme, retreating by 34% to 200 500 oz in 2014.

“We were doing reasonably well [at South Deep] in early 2014, but had to make a tough decision to rehabilitate underground. The knock-on effect of this is that we didn’t open stopes for mining for many months, which is why the mine’s 2015 production guidance is lower than expected,” he pointed out.

Gold Fields has narrowed the mine’s production guidance for this year to 228 000 oz and plans to “get back to basics” at South Deep.

This will result in the group rechanneling investment into skills development by establishing fit-for-purpose training facilities on site.

The group, meanwhile, has reiterated that it has “full confidence” in the South Deep orebody, noting that many of the challenges in 2014 pertain to the shortage of mechanised mining skills in South Africa and competition with other gold miners for these limited skills.

The mine’s management team has since been replaced by a team whose members have extensive mechanised mining experience, headed by a frank Nico Muller.

Key focus areas at the mine for this year will include upgrading the skills of operators and associated maintenance crews in trackless sections, as well as improving fleet management and improving underground working conditions.

Holland, meanwhile, has stated that he does not expect the operation to break even this year, but expects a swing to profitability in the second half of 2016, as increased mining of the open stopes drives greater volumes.

“This year, we want to focus more on being right as opposed to being quick, so we’re focusing on getting the basics right rather than chasing long-term targets that just aren’t achievable,” he commented.

Key Contracts and Suppliers
Redpath (backfill piping, battrice panel installation and the replacement of South Shaft steelwork); Newrack (secondary support); TWP (metallurgical plant design); AEL Mining Services (supply of explosives for blasting) Atlas Copco and Sandvik (suppliers of HME and spares).

Previous contractors and suppliers:
Murray & Roberts Cementation (mine development and shaft deepening); Wilson Bayley Holmes-Ovcon (WBHO) and Wade Walker (tailings dam); MM&G (steelwork fabrication); Steel Services and Allied Industries, Hatch and Cadhouse Design Enterprises (ventilation shaft headgear); Howden Africa (commissioning of main surface ventilation fans) and Sarens South Africa and Crane Corporation (overhead crane for the ventilation shaft headgear).

On Budget and on Time?
The project is on budget, but the roll-out to steady-state production of 650 000 oz to 700 000 oz has been postponed by a year to the end of 2017.

Contact Details for Project Information
Gold Fields VP corporate affairs Sven Lunsche, tel +27 11 562 9763 or email media@goldfields.co.za.
Redpath, tel +27 11 974 2051.
TWP, tel +27 11 218 3000, fax +27 11 218 3100 or email twpinfo@twp.co.za.
AEL Mining Services, tel  +27 11 606 0000.
Atlas Copco, tel +27 11 821 9000.
Sandvik, tel +27 11 929 5300.

Previous contractors and suppliers:
Murray & Roberts Cementation, tel +27 11 201 5000.
MM&G, tel +27 11 914 4740.
Wade Walker, tel +27 11 466 0377.
WBHO, tel +27 11 321 7200, fax +27 11 887 4364 or email wbho@wbho.co.za.
Steel Services and Allied Industries, tel +27 18 787 2059 or fax +27 18 787 3416.
Hatch, tel +27 11 239 5300 or fax +27 11 239 5790.
Cadhouse Design Enterprises, tel + 27 16 429 1643 or email info@cadhouse.co.za.
Howden Africa, tel +27 11 240 4000, fax +27 11 493 0545 or email enquiries@howden.co.za.
Sarens South Africa, tel +27 11 861 3800, fax +27 11 861 3899 or email info@sarenssa.co.za.