Business / Companies
Open Cast Mining at Metallon's Redwing and Arcturus Mines
24 Jul 2013 at 15:51hrs | Views
Following the recent re-opening of its mines earlier this year, Metallon has taken the decision to switch its underground mining operations at both the Redwing and Arcturus mines over to open cast. Both mines were severely flooded during the financial meltdown of 2008 when Metallon were forced to close all their mines during a period of hyperinflation. Metallon, owned by South African magnate, Mzi Khumalo, is Zimbabwe's largest gold producer, but experiences the same operating problems as its smaller competitors.
Metallon have been unable to return to full operational status at the two mines since their re-opening due to a combination of the problems with flooding and the drop in the price of gold. Although the mine has been able to meet its payroll, the fluctuating price of gold was having a detrimental effect on their operations. The flooding at Redwing had not been alleviated despite the installation of heavy duty drainage pumps and underground mining was only proving feasible at levels four to six. Extensive flooding from low level nine downwards had prevented going down further, but worthwhile results had only been identified between levels four and six. Metallon have therefore decided to revert to open cast mining, which allowed for low level ore extraction, reducing operational costs.
Redwing and Arcturus Currently Subsidised
It is believed that operations at both Redwing and Arcturus are currently being subsidised by the company's other mines: Mazowe; Shamva; and How. Recent speculation that Metallon would mothball the two mines has been rebutted by the company. Its Corporate Affairs Executive, Mr Zenzo Nsimbi, stressed that although operations at the two mines were currently bleeding the company, there were plans to develop them further.
For the present though, operations at Redwing and Arcturus are to be scaled down, with the focus of operations switching to Reedbuck, 4 kilometres away, where active prospecting is underway.
While gold prices rose 58% following the global meltdown of 2008, with many countries pursuing aggressive purchasing, the price has dropped by 17% this year, with experts believing gold to be one of the worst performers of 2013. Rising payrolls and escalating electricity tariffs do nothing to ease the situation. Metallon believe that current expansion plans will enable it to consolidate financially through further exploration, as well as ramping up at its Mazowe, Shamva and How mines. In addition they are looking to exploit Shamva Hill, which has great promise according to geologists. Staff restructuring, management shuffling and new personnel are believed to be part of the expansion plan. Zimbabwe produced around 13 tonnes of gold in 2012, amid speculation that it will soon be readmitted to the London Bullion Market Association. The government has set a target of 15 tonnes a year, compared to production at the peak of extraction of 29 tonnes a year, although falling gold prices have dampened performance. Despite this, experts predict that a return to the country's former vigorous industry is achievable in the medium to long term as different projects come online.
As part of their expansion plan, Metallon are set to undertaken mine and mill upgrade and modernisation programmes. These are to be based on best practice approaches aimed at achieving midtier production with a target price of between $450-900 per ounce. The capacity and grade modelling which has been undertaken in relation to Mazowe and Arcturus indicate restoration of capacity to a minimum of 300,000 tonnes per year to optimise profitability and minimise unit costs.
This short term projected growth will provide the foundation for Metallon's long term plans for the mines. Founded on restoring production at all five mines to 160,000 ounces per year, the company's growth is expected to achieve 270,000 ounces per year within 5 years. Under-explored satellite deposits to the five mines contain up to 6 million ounces and a vigorous exploration campaign to upgrade the exploration results is set to increase overall reserves to more than 10-12 million ounces.
How Mine, located 30km south east of Bulawayo, has been Metallon's flagship mine for more than a decade. Implementation of Safety Health and Environment (SHE) laws have already been effected, with the mine being certified to ISO14001 (environmental management) and OHSAS (occupational health and safety) standards. Upgrading to bring the other mines into line with regulation is progressing well.
Source - Julie Bowen