South Deep: A Post 2050 Mine

Gold Fields massive underground resources will extend South Africa’s gold mining heritage for at least another generation

By Antonio Ruffini

With its 64 million ounce gold resource, Gold Fields’ South Deep mine is overcoming its checkered history and is the reference most often used to undermine arguments that gold mining in South Africa is a sunset industry. Gold Fields is one of the world’s largest mining companies, with production of some 3.5 million oz/yr of gold, but the 750,000 oz/yr to 800,000 oz/yr contribution from its South Deep mine when in steady state will be notable even in the context of such a group.

South Deep, which lies on the northern rim of the Witwatersrand basin, less than an hour’s drive (60 km) to the west of Johannesburg, is not a typical South African gold mine. Though its development has not been without the colorful incident that will please future mining historians, it is the mine that virtually guarantees South Africa will still be a gold producer in the second half of this century.

When the sinking of the South Deep main and ventilation shafts, the twin shafts, originally designed to extend some 3,000 meters (m) and 2,750 m below surface respectively, began in late 1995 the mine was owned by the then major mining house JCI. By the time the twin shaft complex was officially commissioned in early 2005 the mine’s ownership lay in the hands of Canadian mid-level group Placer Dome and the now deceased fraudster Brett Kebble’s Western Areas Gold Mining Co.

After it began the twin shaft project, JCI fell into the hands of mining entrepreneur Mzi Khumalo, someone who has attracted controversy. It was Khumalo who brought Kebble in as partner. At a later stage, Placer Dome became a 50% shareholder in South Deep before Placer was taken over by Canadian major gold producer Barrick. When Kebble was murdered revealing his group as bankrupt, and with the Canadians not interested in remaining involved, the operation went into a form of curatorship with former politician and prominent business person Cheryl Carolus appointed as caretaker.

During this time the developing mine had a loaded skip, weighing some 28 tonnes, and the 6.7 km of rope to which it was attached fall 1.6 km down one of the twin shafts, damaging shaft infrastructure and setting back the project further. However, shortly after that, in December 2006 Gold Fields took over Barrick’s 50% share of South Deep and in April 2007 acquired full control of the mine. South Deep was at last fully in the hands of a group that could do it justice.

“We are doing our planning to make sure South Deep fulfils its potential as one of the world’s greatest deep level mechanised mines,” head of Gold Fields South African operations Vishnu Pillay said in April two years later. He said the anticipated working cost of about US$330/oz and the US$95/oz capital cost equates to a notional cash expenditure of about US$425/oz, which means South Deep is expected to be a very high margin high volume gold mine.

“The previous owners due to lack of funding did not invest in development and strategic items of infrastructure,” Pillay said. Gold Fields has rectified that situation and is spending about US$110 million per year on the project for the next six years, to ensure South Deep fulfils its potential. This includes deepening the ventilation shaft to 3,000 m, and investment in key refrigeration infrastructure such as an ice plant on surface and a refrigeration plant at the mine’s 94 level.

Having the world’s best deep level gold orebody, Gold Fields also committed to itself to full mechanisation of South Deep with the introduction of additional mechanised fleets and manpower in strategic areas of the mine. It initiated a long-inclined-borehole underground program to provide geological structure and grade information, involving some 17.4 km at a cost of more than US$1.65 million. In addition, the company has initiated a surface drilling program at a cost of US$16.6 million to evaluate the orebody in the areas to the east of South Deep, on the adjacent Uncle Harry’s property which the company has obtained from JCI and Randgold and Exploration.

Before taking over South Deep, Gold Fields already held some of the South Africa’s and the world’s best gold assets. This included the Driefontein and Kloof gold mines. Altogether Gold Fields has a strong reserve base of 78 million oz of gold; nonetheless South Deep alone accounts for some 37% (29 million oz) of the company’s reserves. This excludes the 16.5-million-oz Uncle Harry’s resource, which could be converted to a reserve and would be mined from the South Deep infrastructure.

Yet, even after the Gold Fields takeover South Deep continued to be plagued by ill fortune. On the 1st of May 2008, coinciding with but unrelated to the first day Gold Fields new CEO Nick Holland took over from predecessor Ian Cockerel, nine people died at South Deep when the cable of their small service shaft cage snapped. Gold Fields management responded by saying that if they could not mine safely they would not mine at all, and the company has, together with the rest of South Africa’s gold sector, been working hard to improve the industry’s very poor safety record.

Putting a World Class Asset in Play

South Deep is different from the typical South African gold mine, which is usually a narrow tabular orebody where the economic seam width extends from a few centimetres (cm) to 1- to 2-m thick,and involves very labour intensive mining. South Deep is focused on two primary reefs, the Ventersdorp Contact Reef (VCR), and the stacked upper Elsburg reefs that subcrop with the VCR and form a wedge that attains a 130-m thickness at South Deep’s eastern boundary. This wedge eventually thins to leave just the VCR to the west. The upper Elsburg reefs constitute 93% of South Deep’s reserves with the VCR accounting for the remainder.

Gold Fields has divided the South Deep orebody into four packages for the mechanized mining that features automated loaders with the operator located away from the vehicle. The four packages from west to east are respectively 1.5 to 35 m, 40 to 70 m, 20 to 60 m, and 20 to 30 m in mining width. “In some cases the extraction will be total, and in others there will be selective extraction,” Pillay said.

The suite of mining equipment includes low profile loaders, boom rigs and dump trucks, capable of maneuvering in 5- by 5.5-m ends, with Atlas Copco being the main supplier. Gold Fields will be the owner operator of the mining fleet, but the development work is being undertaken by contractor Murray & Roberts Cementation.

The mining method at South Deep is horizontal mechanized de-stressed long hole stoping. To undertake mechanized massive mining in an area at such depths, the relevant zone must first be de-stressed by mining a cut. This ensures a de-stressed window of 50 to 60 m above or below the associated slope. These stopes must be placed in horizons that minimize the lock-up of reserves, while creating rock stress conditions similar to significantly shallower depths. Backfill is an integral part of the mining method, and is essential to both local and regional stability. The current mining depth at South Deep is about 2,700 m.

The horizontal logistics of the operation are somewhat unique in that ore, personnel and material will be transported using conveyors and mono-rail systems.

Gold Fields was not the only group interested in taking over South Deep, and one of the reasons Gold Fields won out over other bidders are synergies with its adjacent Kloof mine. The possibility of accessing the bottom of the South Deep orebody from the Kloof No 4 shaft which is four kilometres distant is being investigated. “We have completed scoping studies and decided we need more information,” Pillay said. “Considering the distance and investment involved we will wait until we have it to get better guidance before any decision is made.”

However, Pillay explained, there are other substantial synergies between Kloof and South Deep, which Gold Fields is looking to maximize. “This includes plant utilization, environmental management, stores buildings and yards, maintenance infrastructure, recreation and other facilities and accommodation for mining personnel.”

Ramping Up to Speed

Pillay also explained that the key factors in the build-up of production at South Deep include the rate of development build-up, the rate of de-stressing to open up the orebody, and the increase of the hoisting capacity of the twin-shaft system to reach the expanded target of 330,000 metric tons (mt) per month. The hoisting capacity of the current winder at the South Deep twin shaft complex’s main shaft is 175,000 mt per month. The main shaft winder is a Blair multi-rope winder powered by two 6-megawatt (mw) motors with a payload per trip of 28.5 mt. The additional capacity to be provided by the twin shaft complex’s ventilation shaft winder will be 195,000 mt per month, powered by a winder similar to that of the main shaft with a payload of 31 mt per trip.

This will see the planned ramp up of the twin South Deep shafts to their full capacity of 330,000 mt per month by July 2014. In addition, Pillay said there are plans for the existing South shaft at the original Western Area operation to be used to haul waste rock to surface. This will free operational capacity at the twin shafts for hauling additional reef and could accelerate the ramp-up, and add flexibility to the operation. The South shaft was being used to haul personnel and materials and is being upgraded to haul this additional rock.

South Deep’s existing plant can process 220,000 mt of ore per month and there are plans to expand it with the addition of an additional mill sometime between 2012 and 2014.

The cost per ton for South Deep will be less than that of a conventional mine with a US$66/mt working cost estimated for when it is in full production. This compares with its current working cost of almost US$100/mt and that of Gold Field’s world class Driefontein mine where the working cost is just over US$88/mt. The typical South African gold mine spends some 50% of its working costs on labor, another 15% to 20% in maintaining stores and some 10% to 12% on power. South Deep will avoid much of the labour and some of the stores costs.

Keeping Conditions Cool

South Deep has also been designed to minimize the use of water and power. The mine, which is ventilated to achieve a 28.5° C wet bulb reject temperature, will use its three downcast shafts, namely the twin shafts and the South shaft, to provide 1,200 m3/s of cooled air. The twin shafts have four surface fans, three of which will operate, with one as a standby unit. The south shaft has two fans, of which one will be operating, the other being a standby unit. Refrigeration will be based on surface bulk air cooling at these shafts. Refrigeration plants on surface will provide 32 mw of cooling, supplemented with underground cooling and ice from surface. Some 1,120 liters per second of water will flow to the air coolers close to the workings.

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Power savings will be achieved in various ways including having the surface fans fitted with guide vanes to optimize power as the mine size increases. Ice supplied from surface to the 90 levels of the mine will reduce the amount of water pumped to the surface, and the size of intake and return airways have been designed at optimum cost to minimize electrical power cost. Energy recovery systems such as pelton wheels are to be installed at strategic locations. In addition, the use of fissure water generated underground will minimise electrical pumping costs and also minimize the use of national water resources. Because of mechanized mining, South Deep’s water consumption will be significantly reduced in comparison with conventional mining.

As part of its dealing with both safety and critical function at its deep level shafts, and to ensure that it is not dependent for these on the reliability of national utility Eskom, Gold Fields spent US$15.5 million to provide standby power generating facilities at South Deep, Kloof and Driefontein. Each of these standby power generator sets is designed to supply 10% of a mine’s power requirement. South Deep’s seven 2,250 kVA, 11 kV diesel powered Cummins generator units were commissioned in late January 2009.

These standby power facilities, which ideally as with all insurance investments will never have to be invoked, will ensure the safe extrication of underground staff and the continued de-watering of the shafts during power failures. All of the units can be brought on-line in about 30 seconds.

If gold mining in South Africa is to be described as a sunset industry, South Deep at least will ensure it is a long time before twilight finally arrives.