C. Musingwini

Evaluation of ore transport options from Kwesi Mensah Shaft to the mill at the Obuasi mine

This article illustrates the application of the analytic hierarchy process (AHP) to evaluate surface ore transport options for the underground mine at AngloGold Ashantis Obuasi mine in Ghana. The mine currently transports about 175,000 tpm of ore from four shafts to the mill using contractor trucking. The mines current business plan requires the underground ore production to be increased from 175,000 to 220,000 tpm. The extra tonnage is to feed the new tailings sulphide plant, located adjacent to the existing mill. This change necessitated a review of ore transport options between the Kwesi Mensah Shaft and the mill. The four options that were considered are the continued use of contractor trucking, purchasing mine-owned trucks and using surface or underground conveyors. The evaluation criteria were categorised under the broad areas of economic, environmental and technical criteria. Since multiple options and criteria had to be evaluated simultaneously, it was appropriate to use the AHP for the selection process. Five experts on the mine participated in the evaluation exercise which revealed that surface conveyors were the most-favoured option. This is the first time that a more structured approach has been used successfully for equipment selection at Obuasi mine and there is adequate scope for future use of the AHP technique on the mine in mine planning or equipment selection.

Stochastic modelling of the open pit to underground transition interface for gold mines

Criteria or transition indicators to guide the complex decision problem of open pit to underground (OP-UG) transition are currently not well defined and documented as most mines rely on context-dependent experiences of their respective project feasibility teams. This problem is further compounded by the fact that transition indicators such as net present value (NPV), stripping ratio and commodity price are dynamic over time. Therefore, traditional deterministic approaches to solving the OP-UG transition problem cannot fully address the practicalities that mining companies face due to the variability of the transition indicators. This paper therefore reviews the OP-UG transition decision problem from a stochastic perspective. Transition indicators identified from an extensive literature review were used to benchmark four case study mines against one which had recently made the OP-UG transition, subsequently leading to the development of a generic OP-UG transition model for gold mines. The model indicates that depending on the type of deposit, gold mines can prepare to transition when the gold price to cost per ounce ratio is just greater than 2.0; grade is between 4 and 9 g/t, stripping ratio is between 3 and 15 m3/t and NPV is positive for the underground mining option.

Estimating cost of equity in project discount rates: comparison of the Capital Asset Pricing Model and Gordon's Wealth Growth Model.

Abstract Since the 2008 global financial crisis, mining projects have to invariably compete for scarce capital under depressed market conditions. The discounted cash flow analysis commonly used for the valuation of mining projects relies on using a discount rate. However, an appropriate discount rate is sometimes the subject of contestation since factors such as the stage of development of the mineral project affect the rate. This paper independently tests the reliability of capital asset pricing model and Gordon’s wealth growth model estimates of cost of equity in discount rates and concludes that Gordon’s wealth growth model provides better estimates under depressed market conditions.

Parametric estimation of capital costs for establishing a coal mine: South Africa case study.

The work reported in this paper is part of a MSc research study at the University of the Witwatersrand.

Measuring “optimisation” software utilisation in the South African mining industry

This paper discusses a new methodology to define and measure utilisation of mine planning software. An initial data set compiled in 2012 in an online database was updated in 2014 with additional and new information for software utilised in the South African mining industry. However, the online database only serves as a data repository and presentation platform. A methodology was required to analyse the data in the database to infer extent of utilisation of the software to enable better decision-making strategies by various stakeholders that include mining companies, software providers, consulting companies and educational institutions. The new methodology uses three variables, namely commodity, functionality and time stamp. In this paper, only one of the six mine planning software functionalities called the ‘Optimisation’ functionality is applied on five selected commodities, using the 2012 and 2014 time stamps. The work presented in this paper is part of a PhD research study in the School of Mining Engineering at the University of the Witwatersrand.

Techno-economic Review of a Rare Earth Elements Carbonatite Prospect

Rare earth elements (REEs) are strategically important in the 21st century for their consumption in the manufacture of mobile electronics, greener power generation equipment and cars. However, the REE industry is characterised by a limited number of primary producers located mostly in China. It is against this background that some junior and major mining companies are searching for new sources of REEs globally, while other organisations are focusing research on recycling or developing substitutes for REEs. Accordingly, this paper reviews a moderate size and grade carbonatite REE prospect called Buru Hill in Kenya by applying modern evaluation techniques and reporting codes. The prospect is an early stage exploration target that has previously undergone historical exploration and recent follow-up testing to confirm the historical data. It is significant because of its favourable logistics and infrastructure, while its development has socio-economic importance for the Kisigi province in Kenya. The work reported in this paper is part of an MSc research study done at the University of the Witwatersrand, Johannesburg, South Africa and indicates positive techno-economic results to warrant further work on the prospect.