Operational review
Cost and revenue optimisation initiatives through
Business Process Re-engineering (BPR)
The BPR process, which commenced during the second half
of 2010, continues to review all operational production
processes and associated cost structures from the stope to
the mill. New business blueprints and appropriate
organisational structures were implemented to support
sustainable gold output at an NCE margin of 20 per cent in
the short to medium term and 25 per cent in the long-term
from our existing operations.
South Africa region
BPR initiatives are planned to deliver savings of
approximately R500 million over the next two years. BPR
savings realised during the September quarter were largely
distorted by the fire at KDC West’s Ya Rona shaft and the
illegal industrial action.
Initiatives for improving quality mining and increasing
productivity are ongoing and include safety initiatives to
improve compliance and behaviour, together with a focus on
face length optimisation and labour planning to provide the
correct skills mix. It also includes a focus on quality blasts to
improve blasting frequency i.e. full panel blasting, full face
advance and a product size which is optimal in achieving a
good milling result. Initiatives also include leadership training
to ensure people skills are developed and optimised, and a
drive for compliance to procedures and processes.
At KDC, the September quarter was a challenging one due to
the severe impact of the Ya Rona fire and the strikes at KDC
East and more significantly at KDC West. As a result, KDC
could not continue the positive momentum achieved in the
previous quarter. The closure of Ya Rona for the entire
quarter due to the fire impacted the availability of workplaces
and the corresponding face-length mined decreased by 1 per
cent compared with the June quarter.
Notwithstanding these setbacks, underlying trends remain
strong and the positive momentum created by the Shaft Full
Potential (SFP) programme during the first half of 2012 is
clearly visible. In particular, safety performance continued to
improve across the mine and KDC East performed well on
production, matching the September 2011 quarter despite the
impact of the fire and strike. Crew productivity, one of the key
focus areas for SFP, only decreased by 2 per cent compared
with the same quarter last year, despite the strikes at KDC
East and West.
The mechanisation of development ends at the long-life shafts
of KDC and Beatrix (South Deep is already mechanised) is
aimed at improving safety and productivity, reducing
development costs and increasing ore reserve flexibility
through higher monthly development advance rates. Having
achieved 98 per cent of flat-end development metres
advanced at long-life shafts, this project is largely completed.
The drill rigs operating on the long-life shafts at Beatrix and
KDC achieved an average rate of 34 metres per rig per month
in the September quarter. This is lower than the 39 metres
achieved in the June quarter due to the fire at Ya Rona shaft
and the illegal industrial action.
Progress against the Mine Health and Safety Council (MHSC)
milestone, that no machine or piece of equipment, such as
pneumatic development rock drills, pneumatic stope rock
drills, hydropower rock drills and drill rigs, fans and winches,
may generate a sound pressure level in excess of 110dB (A)
after December 2013, is ongoing. The number of
measurements expressed as a percentage of noise
measurements of machinery and equipment emitting noise in
excess of 110dB (A) increased from zero in the June quarter
to 0.9 per cent of readings for the September quarter.
Silencing of equipment is ongoing, with continued focus on
replacing blocked and/or damaged silencers on machines. A
further measure to identify sound pressures above 85dB (A)
has been introduced and currently the percentage of
employees exposed above this level is 64.6 per cent. This
measurement is without ear protection. Studies indicate that
with the proper use of currently available ear protection
devices no employee will be subject to a sound pressure level
in excess of 85dB (A). A project to measure exposure whilst
using hearing protective devices to provide further verification
was started in September. Not enough readings have been
taken to reach a definite conclusion.
The Group continues to pursue best practice in the area of
dust control in accordance with the MHSC. In order to
improve upon dust exposure targets, the Group is targeting
the following core initiatives:
-
Building health rooms at the training centres to coach
employees on potential exposures and wearing of
respiratory personal protective equipment – 80 per cent
completed;
-
Using foggers, a water mist spray system, to trap dust
particles liberated in haulages and tipping points to
prevent dust from entering the main air stream;
-
Installing dual stage tip filter units, where the filters are
equipped with an additional layer of filtration material to
improve the efficiency of old technology filter bags in order
to increase dust filtration;
-
Managing the opening and closing of ore transfer chutes
between levels so that they remain closed when not in use
to reduce airborne dust entering the work place;
-
Treating footwalls in haulages with binding chemicals
sprayed from a specially designed car pulled by a loco to
prevent dust from being liberated into intake airways; and
-
Analysing individual filters to assist in determining
exposure levels.
West Africa region
Tarkwa
BPR initiatives are ongoing. The major BPR projects for 2012
include:
-
Commissioning and integration of the secondary crusher
at the CIL plant. This is expected to achieve a 5 per cent
improvement in the milling rate from 950,000 tonnes per
month to 1 million tonnes per month. The secondary
crusher was commissioned in the March quarter. The
planned ramp-up of the secondary crusher was slightly
above plan at 77 per cent of nameplate capacity for the
September quarter. It is expected that the crusher will
operate at full capacity from the December quarter;
-
Waste strip acceleration is planned by way of the
implementation of a larger sized load and haul fleet, which
will make up around 20 per cent of the total fleet once
commissioned. The resultant flexibility is designed to
ensure a continuous ore supply to the plant, which could
increase the annual mining volume by as much as 10 per
cent. Commissioning of the larger sized load and haul
fleet is scheduled for the December quarter; and
-
The construction and commissioning of an in-pit satellite
fuel depot. The benefits include shorter haul distances for
re-fueling, fuel consumption cost savings and improved productivity. Commissioning will be completed during the
December quarter. This initiative is expected to deliver
approximately US$30 million in cost savings over the life
of mine.
Damang
BPR initiatives are ongoing. The major BPR projects for 2012
include:
-
Continued savings from owner mining and maintenance
initiatives implemented in early 2011;
-
The implementation of an additional shift which is
providing flexibility to accelerate waste stripping and
increase mining volumes to ensure a continuous ore
supply to the plant. The new shift has also improved
utilisation of mining equipment. Implementation was
completed in the March quarter with full productivity
benefits achieved from the June quarter onwards; and
-
Optimisation of the plant circuit to achieve the maximum
recovery rate under current blend conditions. This
includes a pre-leach thickener to improve the control of the
circuit’s water balance and increase the efficiency of the
cyclones by way of an in-line leach reactor to maximise
gravity gold recovery, thereby improving overall
recoveries. An additional CIL leach tank is also being
added to the circuit to create flexibility and allow current
tanks to be fully refurbished. Once all eight tanks are fully
operational recoveries are expected to improve due to
increased residence time and circuit reliability. These
projects are scheduled to be completed in the December
quarter.
The introduction of owner mining has resulted in a decrease
in mining costs from US$4.35 per tonne, which was the
contractor cost per tonne prior to conversion to owner mining
(2010), to US$3.43 per tonne before adjusting for the effect of
inflation. Added to this, the additional shift has resulted in an
increase in tonnes mined from approximately six million
tonnes per quarter to eight million tonnes per quarter,
reducing costs further from US$3.43 per tonne to US$3.19
per tonne mined (year to date). As a result, based on year to
date tonnages, benefits of US$32 million have been achieved,
of which US$5 million accrued in the September quarter. This
compares to the cost of the owner mining conversion of
US$55 million.
Australasia region
St Ives
BPR initiatives are ongoing. The major BPR projects for 2012
include:
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Implementation of the physicals and mining equipment
management system (Pitram) continued through the
September quarter. The project deliverables are to
improve the management of the mining fleet, integrate
production information and simplify production reporting. |
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There are two key elements to this project; Mining
Physicals Reporting and Mine Equipment
Management. The Mining Physicals Reporting project
goal is to replace the current MRM data base reporting
system with the Pitram physicals reporting system by
the end of the year. Physicals information has already
been fed into the live Pitram system from the end of
September 2012. A full reconciliation between the two
systems will take place prior to the end of the year. |
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Implementation of the Pitram fleet management
system for open pits and underground operations also
continued through the September quarter. A pilot
exercise gathered important data on trucks and
loaders in preparation for the go-live date late in
November. Primary objectives from this programme
include productivity and efficiency improvements in
mining fleets through better real time information on equipment location and status, payload management
and equipment availability and utilisation. |
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The underground production drilling improvement project
continued throughout the September 2012 quarter. The
intent is to increase drill rig performance and decrease
stope dilution through improved drilling accuracy. The
total value of this project from improved efficiencies and
reduced dilution is estimated at approximately A$7 million
per year. |
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There are a number of active projects in the ore
processing area. These include several recovery
improvement projects and an investigation into utilising
underground fleet to deliver ore direct to the mill thereby
eliminating the contractor, as ore is currently stockpiled
near the source and a contractor re-handles the ore to the
mill. |
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The transition to owner mining in the open pits is creating
opportunities to further improve the efficiency of the open
pit activities. Value stream mapping and process analysis
is being facilitated across all aspects of the open pits to
identify improvement opportunities. A number of technical
improvement projects have already been identified during
the September quarter, primarily in the domain of drill and
blast. These are expected to impact positively on mining
performance and cost. They will be implemented in the
December 2012 quarter. |
Agnew
BPR initiatives are ongoing. The major BPR projects for 2012
include:
-
Consolidation of Agnew’s stores which was completed
during September. Benefits from the project are estimated
at A$350,000 per annum.
-
A project adding a fifth gear to haul trucks to enable faster
and more efficient hauling of underground ore directly to
the ROM pad is on-going. As a result, re-handling and the
related costs have been significantly reduced. Savings of
A$514,000 have been achieved in the September quarter
and A$941,000 year to date.
-
Equipment damage has been an on-going cost and
awareness issue. A new more systematic approach to
recording, analysing and eliminating equipment damage
has been implemented. Life cycle cost benefits are
expected to accrue.
-
The paste fill optimisation project was implemented during
the June 2012 quarter. This project optimised mix ratios,
delivery systems and scheduling to rectify a number of
incidents whereby paste was not able to be delivered
correctly to the underground stopes. There have been no
major paste incidents or stoppages since then. However,
an on-going effort is made to eliminate minor delays and
bottlenecks in the process. As a result, storage pods to
increase cement storage capacity have been ordered and
should be on site before year-end.
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