Mechanized mining could revive output in South Africa – by Geoffrey York (Globe and Mail – February 24, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

WESTONARIA, SOUTH AFRICA — With a great clanking and an occasional dripping of water, the dimly lit elevator cage gathers speed and then plunges 2.4 kilometres below the earth’s surface in an ear-popping four minutes.

It’s one of the biggest and fastest vertical drops in the world, and it opens up an era of mechanized mining that could be the saviour of South Africa’s struggling gold and platinum sectors.

South Deep, once the property of Barrick Gold Corp. and now owned by Gold Fields Ltd., has been the future of South African mining for a long time – perhaps too long, according to analysts who question its persistent delays.

With more than $4-billion (U.S.) invested in it so far, South Deep boasts a huge reserve of 40 million ounces that could keep it in operation for 60 years or more, with its drills blasting up to three kilometres underground. It has been long viewed as the last great gold mine in South Africa, and potentially one of the lowest-cost producers in the world.

By gradually shifting to a greater use of mechanized mining, South African gold and platinum companies are aiming to free themselves from the crippling strikes and labour unrest that have haunted the industry for many years.

South Africa has the world’s biggest gold and platinum reserves, but its share of global output has been steadily declining because of high costs, regulatory uncertainty and labour problems. South Africa was the world’s biggest gold producer until 2007, but its output has plummeted from 428 tonnes in 2000 to just 167 tonnes in 2012 – its lowest output in more than a century.

South Deep, the world’s seventh-deepest mine, will be a key test of the strategy of shifting away from labour-intensive mining. Last week, Gold Fields tried to win over the skeptics by bringing analysts and journalists on a tour of South Deep, showcasing the mechanized mining techniques that allowed it to shed about 2,000 jobs in 2009, when it shifted to a fully mechanized operation. Today, it operates around the clock, 24 hours a day, seven days a week.

It’s an impressive sight. The workers hone their skills on computerized simulators at a training centre and a mock mine on the surface, then go underground with mechanized drills, eliminating the backbreaking strain of hand-held drills in older mines.

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