WESTONARIA, South Africa, Feb 19 (Reuters) – Down under the South African earth, Australian accents are leading a drive to unlock the wealth one of the world’s largest gold reserves.
Gold Fields has brought in a crack Australian engineering team to help overcome one of its most daunting challenges: ramping up production on its mechanised South Deep mine, its last and troublesome South African asset.
“With the improved operating skills that we’ll get, particularly with the Australian team, we think we can make it,” chief executive Nick Holland told journalists and analysts on Tuesday during a visit to the mine just west of Johannesburg.
He was referring to the South Deep target of full production of 700,000 ounces a year, which has been a moving one to the annoyance of investors, shifting from 2014 under previous owners to 2016 and now the end of 2017.
South Deep descends to three kms (almost two miles) and South Africa, with the world’s deepest mines, has over a century of experience when it comes to extracting ore far below the surface with a large, unskilled workforce.
But mechanised mining is virgin territory in South Africa’s gold reefs, from which a third of the bullion ever mined in recorded history has been produced, while the Australians have been doing it for 60 years.
South Deep, which sits atop a mammoth 40-million ounce reserve worth over $50 billion at current spot prices, is one of the few gold mines in South Africa where mechanisation is possible because the seam is so big – 120 metres wide in some places, which makes it suitable for big machines.
“The Australians know how to do mechanized mining but we have never really done it on our gold mines,” said Peter Major, a fund manager at Cape Town-based Cadiz Corporate Solutions.
“We probably have the most uneducated labour force in mining and those guys who do mechanized mining, half of them have college degrees,” he said.
Major said one of the problems at South Deep was that it has had endless teams of consultants come through but no proper mining team with mechanised experience – until now.
“Now you have a mining team at South Deep, 15 guys who know each other and have done this before. It’s fair to say that if they can’t do it, no one can do it,” he said.
Gold Fields’ executives and analysts have also said productivity has been constrained by worker unhappiness with the introduction of a new shift system based on four twelve-hour days followed by four days off.
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