Refinery prepares for ramp-up

26th June 2020

By: Mamaili Mamaila

Journalist

     

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In line with the Level 4 and Level 3 regulations announced by South Africa’s Cooperative Governance and Traditional Affairs Minister Dr Nkosazana Dlamini-Zuma, precious metals refining and smelting complex Rand Refinery is preparing to ramp up its operations.

The company is the largest integrated single- site precious metals refining and smelting complex and the only London Bullion Market Association (LBMA) referee in the southern hemisphere.

The refinery expects to return to full production in a staggered and safe manner over the next few weeks, in line with the expected increase in gold output from South African gold mines, Rand Refinery CEO Praveen Baijnath tells Mining Weekly.

“Under the Disaster Management Act Regulations, Rand Refinery’s operations were classified as an essential service. During Level 5 of the lockdown, Rand Refinery was operating with a significantly reduced staff complement, in line with the health and safety guidelines issued at that time.”

Baijnath notes that the refinery’s operations were significantly scaled down, primarily processing residual surface materials from local gold mines and mined ore received from established mines in Africa.

The smelter – which processes low-grade by-products and sweeps – was shut down for almost a month on March 27, 2020, and placed on care and maintenance.

Meanwhile, the administration and treasury activities, which are a vital part of the business, were executed remotely, with most staff working from home.

“The refinery’s treasury operation is responsible for selling the refined gold on behalf of the mines and repatriating the dollars to the source countries on the continent. The refinery’s operation during Level 5 was geared to operate at between 40% to 60%, depending on the quantity of gold received.”

This reduced refining capacity, Baijnath says, was adequate to process the limited volumes of gold from local, and the rest of Africa’s, established gold mines.

Subsequently, as the local gold mines returned to production, Rand Refinery ramped up its operations to meet its refining obligations.

“Additionally, the smelter arc furnace has been restarted. It reached full capacity towards the end of May, as we have sufficient feedstock to fully operate the smelter,” he explains, noting that the smelter operation can now accept by-products and other low-grade concentrates for processing.

Further, Baijnath highlights that while there have been disruptions to business, Rand Refinery remains committed to its obligations, which include getting the physical product to a particular location. With commercial airline activity curtailed, agreements were made with charter services – where required – to maintain deliveries.

However, he points out that charter services are not as cost effective as cargo airlines, but within a constrained air-travel environment, it was beneficial to keep the supply chain moving with product arriving safely at the final bullion bank destinations.

“Given the value of cargo being moved, new processes had to be risk-assessed before changes were implemented. Together with our partners, we are monitoring the situation closely in terms of the resumption of commercial flights. When they do become available, and are viable, we will take advantage of this to the benefit of our depositing mines and bullion banks.”

Consequently, while the volumes are definitely expected to increase following the de-escalation of alert levels, the company is mindful of the challenges that gold miners face, as they would have to manage the outbreaks at mines and be prudent in ramping up to ensure that the health and safety of employees are not compromised.

“Our own ramp-up depends on the volumes received. Currently, we have almost 70% of staff back at work. We expect to bring more staff back as soon as supply normalises from the local gold mines,” Baijnath concludes.

Edited by Nadine James
Features Deputy Editor

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