Anglo American Platinum Limited |
|
Union Mine
(managed – 85% owned)
|
||||
|
|
||||
|
Union Mine was successfully restructured into the Union North and Union South mines during the last quarter of 2011, and will henceforth be reported on as two separate entities. The commentary for 2011 deals mostly with the consolidated mine, with some references to the performance of the individual mines. Full individual operational reports will be available from 2012.
MINE OVERVIEW
The mine is situated in both the Limpopo and the North West provinces of South Africa, 15 km west of the town of Northam, and forms part of the North-western Limb of the Bushveld Complex. The mine operates under a mining right covering a total of 119 square kilometres.
Union Mine's infrastructure consists mainly of two vertical shafts, namely Richard Shaft (now North Mine) and Spud Shaft (now South Mine); and of the decline section, consisting of three decline complexes and also a vertical shaft (Ivan Shaft). This third portion has been split, with some 15% going to North Mine and some 85% to South Mine. The operating depth of the current workings is between 150 m and 1,500 m below surface.
The mine extracts mostly UG2 Reef ore, but also produces limited Merensky Reef ore and treats low-grade surface ore. Two-thirds of Union Mine's underground production is done conventionally (using breast stoping with strike pillars), while hybrid mining occurs at the declines.
Union Mine's life-of-mine (LoM) extends to 2028, and consists of a Mineral Resource (exclusive of Ore Reserves) of 36.8 4E million ounces and an Ore Reserve of 8.5 4E million ounces. The Mineral Resource and Ore Reserve reported are 85% attributable to Anglo American Platinum Limited (Anglo American Platinum) and 15% attributable to the Bakgatla-Ba-Kgafela traditional community.
Matthews Nzimande was the general manager at the mine during 2011 before being transferred to Central Services. We would like to thank him for his contribution to the mine during his tenure as general manager.
KEY ACHIEVEMENTS
- Successful restructuring.
- Union Mine concluded a 3-D seismic survey of the Deep Shaft target area during 2011. The interpretation of the survey data has been concluded and will serve to inform the Deep Shaft study. This is a significant achievement, made possible by Anglo American Platinum' extensive community engagement and development.
OPERATIONAL REVIEW
Regrettably, two employees lost their lives at Union Mine during 2011, one at each of the newly formed North and South mines. Mr Ramotlhware Justice Madikong, a loco guard, was fatally injured in a transportation incident at South Mine's Spud Shaft on 2 March; while Mr Mpoko Steven Lithakong, a stope machine operator, lost his life in a fall-of-ground incident on 13 August at North Mine's Richard Shaft. The lost-time injury-frequency rate for North Mine ended at 1.30 (it was 1.41 in 2010), while that recorded for South Mine was 1.31 (1.29 in 2010).
The combined mines' output of equivalent refined platinum ounces decreased by 13% to 254,200 ounces (North Mine: 91,500; South Mine: 162,700) between 2010 and 2011. The tonnes milled decreased to 4.8 million tonnes, a reduction of 14% since 2010. The causes were safety stoppages; lower planned Merensky ore mining; decreasing low-grade surface sources; and operational challenges at the declines.The immediately available Ore Reserves ended the year at 18.8 months, some 4% lower than in 2010. North Mine had 13.6 months and South Mine 21.1 months of reserves available at the end of 2011. Combined productivity decreased to 4.3 m2 per operating employee, a drop of 9% from the 4.7 m2 reported in 2010. North Mine performed at 3.2 m2 per employee, while South Mine operated at 4.9 m2 per employee.
Consolidated cash on-mine costs were managed well and increased by only 5% to R3 billion (North Mine: R1.1 billion and South Mine: R1.9 billion). The cash on-mine cost per tonne milled increased by 22% to R628 per tonne owing to the depletion of low-cost surface sources and lower underground volumes. North Mine achieved R483 per tonne, while South Mine achieved R765 per tonne in 2011.
Consolidated cash operating expenses (costs after allowing for off-mine smelting and refining activities) per equivalent refined ounce rose by 19% to R13,263, with North Mine reporting a figure of R13,795 per ounce for 2011 and South Mine a figure of R12,963.
CAPITAL EXPENDITURE
Total capital expenditure increased to R528 million in 2011 (R325 million in 2010). Stay-in-business capital expenditure amounted to R282 million (R202 million in 2010), while project capital expenditure was R246 million (R123 million in 2010). North Mine’s capital expenditure for 2011 amounted to R129 million, while South Mine incurred R399 million.
Union Mine’s decline projects consist of extending the existing 4B, 4 South and 3 South decline systems to access the UG2 Reef horizon. All these projects are currently undergoing final handover and close-out, with completion of the required closure review process anticipated in 2012.
The 4 South Phase 4 project was approved in August 2009, with the aim of exploiting the residual 4 South and 3 South Resource areas down to the 10-level boundary. Study work is currently under way to confirm a change of scope that will rationalise the overall infrastructure required to extract the remaining 3S, 4S and 5S Resource down to 10-level boundary. Completion of the 4S Phase 4 project (as impacted by the change of scope) is now anticipated in 2016.
The Spud Shaft UG2 ore replacement project was approved in 2007. This project has been handed over to the mine and was closed-out in the final quarter of 2011.
The 5 South Upper UG2 project will access the UG2 Reef from the existing 4B infrastructure, with implementation scheduled to commence in the second quarter of 2012. The 5S lower UG2 project was previously planned to be accessed through the extension of the 4B decline. It is now planned to access this Resource via the 4S Phase 4 infrastructure.
The Union Deeps project targets the Merensky and the UG2 Reef horizons below the 27-level infrastructure serving the current Spud and Richard operations. In the context of the current economic climate, the pre-feasibility study has been unsuccessful in demonstrating a viable path for the project; and the study process has thus reverted to concept-study phase.
OUTLOOK
The strategy from the recent restructuring is to improve the overall value of the operation through dedicated management focus and consequent improved safety and production performance into the future. However, the mine is expected to maintain current production output in 2012, as its Merensky and available low-grade ore sources are depleted.
