Digging deeper becoming more attractive, financially possible

21st April 2017 By: Victor Moolman - Creamer Media Writer

Digging deeper becoming more  attractive, financially possible

NEW SHAFT APPEAL New underground shafts can be expensive, but have larger returns on investment than opencast mines

Developing a new shaft is regarded as a grudge purchase by mining companies and their shareholders because of the capital-intensive nature of such projects. However, 2017 Rapid Underground Mine & Civil Access Conference organis- ing chairperson Murray Macnab avers that underground orebodies are coming into their own once again.

“Older underground mines that were originally designed for a 25-year life are now being considered for extension to beyond 50 years; new subvertical shafts and tertiary shafts are also being considered, where the orebody economics allow for it, as potential new investment opportunities.”

The approval of a new shaft construction is determined by whether the size and depth of the orebody supports financially viable mining operations, says Macnab.

He points out that the economics of ore- bodies and the ability to raise capital determine whether a shaft can be deepened, upgraded, revamped or a new shaft can be justified. The economics are linked to the commodity price, but, with the recent and steady improvement in commodity prices following the 2016 price slump, business cases are improving.

Macnab tells Mining Weekly that, with the advent of aerial magnetic surveying technology years ago, the “easy pickings” mines have largely been discovered and exploited through opencast mining, but some of these operations are ageing and must either be expanded as underground mines or be replaced.

There has been a push by the mining industry to now enter previously politically unstable countries that lack significant infrastructure, such as electricity, road and rail, to discover new deposits for development as openpit mines, he points out.

However, Macnab suggests that mining deeper orebodies in more stable destinations, where project development is not challenged by a lack of infrastructure, presents companies with lower risk and can generate renewed interest in older or deeper orebodies with the added benefit that schedules and safety are supported by modern techniques and methodologies.

Conference Goals
The Rapid Underground Mine & Civil Access Conference will be used as a platform to share information and showcase innovations that will benefit the global mining industry, says Macnab, adding that “this conference is being hosted in Africa but is intended to benefit the worldwide underground mining and civil industry”.

The conference will be hosted at Emperors Palace, in Johannesburg, by the Southern African Institute of Mining and Metallurgy in September.

It will include speakers from the civil and mining industries who have been involved in the completion of large underground projects for hydropower, rail, mining, water transfer tunnels, metro services and mechanised shaft sinking, and will also showcase the latest innovations in tunnelling, boring and shaft sinking, and for increasing safety at mine operations.

The conference aims to create awareness on and decrease the global rate of injuries, says Macnab, noting that soft issues – like minor injuries, ergonomics, and socially accepted operating conditions – are playing a greater role when considering the costs involved in going underground than they did a decade ago.

Every month, he says, there is at least one major mine-site injury globally, causing disabilities, with social media and broadcasters regularly presenting the industry as a whole in a negative light.

“Legislation, however, is largely written after major injuries and more calls are made to take action against management and supervision after an accident. This has had a huge positive impact on global mining safety statistics, but we must recognise that it has also had a negative impact on the advancement of mining projects,” he says.
Macnab explains that new legislation trends are very well supported by statistics and trends over the past 50 years. “Slower advance rates mean a longer return on investment, which makes it difficult to raise or justify the capital expenditure required to start shaft sinking and other underground mining operations.”

Because safety protocols have started to slow down the progress of mining operations, industry has responded by increasingly mechanising processes, he adds. “The production rates of the 1960s are possibly a good benchmark for mechanisation teams to target and then beat on a consistent basis.”

Communities are having a larger impact on mines and the infrastructure that has to be built. He points out that investors are also playing a more active role in environmental and social affairs.

Contingency planning has to be better than it was a decade ago, Macnab says, concluding that all of these aspects must be weighed up against each other to determine the sustainability of orebodies. “Safety must never be compromised and productivity must improve for the industry to advance.”