Name of the Project
South Deep gold mine expansion.

Location
Gauteng, South Africa.

Client
Gold Fields.

Project Description
The project comprises a main shaft and a ventilation shaft – collectively referred to as the Twin Shaft complex – which will have a combined hoisting capacity of 370 000 t/m of ore.

The main shaft was completed in 2004 and comprises a single drop to 2 995 m.

The ventilation shaft has been deepened from 2 760 m to about 2 950 m and is fully equipped with ore storage silos and conveyor belts at shaft bottom, a new rock winder and new headgear.

The mine’s headgear at the ventilation shaft was completed in 2011 using one of the largest fabricated steel headgear frames in the world.

The South Deep metallurgical plant, which was commissioned in November 2012, has also been expanded and has increased processing capacity from 220 000 t/m to 330 000 t/m.

From 2010 to 2012, the mine completed the construction of the bulk of its surface infrastructure, including the centralised tailings storage facility, developed and installed infrastructure around the shaft systems, and changes to full plant tailings backfill for increased production levels. The backfill plant was commissioned in early 2012.

The South Shaft complex will add an additional 120 000 t/m of hoisting capacity to the mine, bringing the total hoisting capacity to 450 000 t/m.

The South Deep operation had a mineral resource of 63-million ounces as at December 31, 2016, and a mineral reserve of 34-million attributable ounces, which will give the operation a life-of-mine to about 2094.

Potential Job Creation
Most of the critical skill positions identified at the start of 2016 have now been filled, with a limited number of specialist positions unfilled as yet.

Net Present Value/Internal Rate of Return
Not stated.

Value
An estimated R30-billion has been invested to date.

Duration
The timeline for the roll-out to steady-state production was presented to the board in February 2017.

Latest Developments
A below expectation performance at the South Deep mine contributed to a 1% year-on-year and a 10% quarter-on-quarter decrease in Gold Fields’ output for the quarter ended March 31.

Production for the quarter was 490 000 oz.

South Deep has had a tough start to this year, with production in the quarter 4% higher year-on-year, but 41% lower quarter-on-quarter at 48 000 oz of gold.

South Deep’s production for the quarter was impacted on by the slow production build-up after the seasonal holidays; two labour restructuring processes that took place at the end of 2017 and during the quarter; and a change in underground working shift arrangements that were implemented to increase productivity.

The labour restructuring has resulted in job losses for 47 personnel at managerial levels and about 260 personnel at lower levels. The restructuring has been undertaken to streamline organisational levels and increase control and has been effected through a combination of voluntary and statutory processes.

Additionally, the change in underground shift arrangements effected in April has provided a longer shift of 11.5 hours instead of the original 9.5 hours. “The intention is to increase the effective time on the face and it will take some time to see the impact of this change,” Gold Fields has reported.

In addition, continued low mobile equipment reliability, the intersection of active geological features (faults and dykes) in the high-grade Corridor 3 and poor ground conditions in the composites in the far western part of the orebody have slowed production rates.

Gold Fields CEO Nick Holland has highlighted that these factors affect the North of Wrench (NoW) development, which has decreased by 55%, from 798 m to 357 m, owing to insufficient power capacity and as a result of Corridor 3 Cut 4 that has been stopped as it approaches the abutment of Corridor 3 Cut 3.

South Deep aims to reduce output from the current mine area while proportionally increasing production from the NoW mining area, which is a lower extension to the current mining operations and contains reserves of 10.7-million ounces.

Production from the current mine area and NoW are expected to be completely phased out by 2052.

The mining areas north of the Wrench fault line are set to sustain South Deep until only about 2030, when it plans to begin mining the two mining blocks south of the Wrench fault – the South of Wrench (SoW) West and SoW East mining areas – with SoW West expected to supply the bulk of output up to 2094, the current estimated life-of-mine of South Deep.

At steady-state production, SoW West (16.6-million ounce reserve) is set to produce 150 000 t a month, while SoW East (8.6-million ounce reserve) will produce 80 000 t a month.

Meanwhile, production for April was further impacted on by a 22-day Department of Mineral Resources Section 54 safety-related stoppage to resupport back areas in two of the critical new mine access ramps, which account for half of the total production for the South Deep mine.

The mine team is developing a recovery plan to mobilise the workforce post the restructuring and to bed down the new underground shift cycles.

Management is implementing programmes to improve and integrate the critical aspects of the mining value chain. Backfill placement programmes continue to be implemented to improve the quantity and quality of backfill used to fill open stopes and significant emphasis is being placed on developing integrated plans, short interval controls and the required discipline to execute these plans and schedules.

Gold Fields does not expect the mine to reach the 321 000 oz production guidance for this year provided at the start of the year and has lowered its guidance to 244 000 oz.

Gold Fields’ overall production for the full-year is expected to be between two-million and 2.5-million ounces.

Key Contracts and Suppliers
Redpath (backfill piping, battrice panel installation and replacing the South Shaft steelwork); Newrack (secondary support); TWP (metallurgical plant design); AEL Mining Services (supply of explosives for blasting); Atlas Copco and Sandvik (the supply of heavy mobile equipment and spares).

Previous contractors and suppliers:
Murray & Roberts Cementation (mine development and shaft deepening); Wilson Bayly Holmes-Ovcon (WBHO) and Wade Walker (tailings dam); MM&G (steelwork fabrication); Steel Services & Allied Industries, Hatch and Cadhouse Design Enterprises (ventilation shaft headgear); Howden Africa (commissioning of main surface ventilation fans); and Sarens South Africa and Crane Corporation (overhead crane for the ventilation shaft headgear).

On Budget and on Time?
The project is on budget.

Contact Details for Project Information
Gold Fields VP corporate affairs Sven Lunsche, tel +27 11 562 9763 or email sven.lunsche@goldfields.com.