Mining & Metals
• The mining sector is a major employer in the
Free State
• The Free State is the fifth-largest producer of
gold in the world
• De Beers has built a new diamond mine at
Voorspoed in the Free State
South Africa is a mineral-rich country, with vast reserves of gold, platinum, coal and diamonds. The Free State is one of South Africa’s most productive mining provinces..
Mining in South Africa
The mining sector is critical to the strength
of South Africa’s economy. In 2008, the mining
industry accounted directly for 8.5% of the
country’s gross domestic product (GDP) at
current prices, a value of R196-billion. At the end
of 2007, mining and quarrying accounted for 35%
(R2-trillion) of the value of the JSE Ltd
The mining sector produced R162-billion, or 30%, of South Africa’s merchandise exports in 2007, making it one of South Africa’s greatest foreign-exchange earners. If semi-fabricated minerals are included, then total exports grow to around R268-billion. While total mining production may have declined by 0.8% in 2007, the depreciation of the Rand in fact raised the value of South African mineral sales by 14.5%.
The mining sector employs around half a million people in South Africa, which equates to about R62-billion in wages and benefits, 6.5% of the total remuneration paid to everyone working in South Africa.
Mining in the Free State
Mining is an important sector in the Free State,
contributing significantly to the economy,
employment and social upliftment. The province
is the world’s fifth-largest gold producer, with
mining the major employer. Important minerals
mined in the Free State include gold and its
by-products (uranium, silver, platinum-group
metals and sulphuric acid), diamonds and coal.
The provisional liquidation of Pamodzi Gold in
April 2009 suggests that some tough times lie
ahead as the cost of mining ever deeper rises.
The company’s Free State mines were put on
care and maintenance and the liquidators
invited offers to buy the company by early June.
Gold
South Africa has enormous gold-ore reserves,
representing 45% of global reserves.
South Africa’s main gold-producing area is
concentrated on the Archaean Witwatersrand
Basin. The Witwatersrand basin, which has
been mined for more than 100 years and has
produced more than 41 000 tonnes of gold,
remains the greatest unmined source of gold in
the world. Major new projects, new technology,
new approaches to the organisation of work,
better labour relations and some commercial
innovations are starting to reshape this
significant industry.
A gold reef over 400km long, known as the goldfields region, stretches across Gauteng and the Free State. South Africa is the world’s largest gold producer, and the country’s largest gold-mining complex is Free State Consolidated Goldfields, with an area of 330 square kilometres.
The Free State has 12 gold mines, producing 30% of South Africa’s output and making it the fifth-largest producer of gold in the world.
In the 2008 financial year, South African mining company Harmony Gold Mining Company (Harmony) produced 1.55 million ounces of gold, making it one of the world’s largest gold-mining companies. In South Africa, the group’s operations are located primarily on the Witwatersrand Basin, encompassing 10 underground operations, an open-pit mine and surface operations that encompass the four provinces of Gauteng, North West, Mpumalanga and the Free State.Harmony currently has eight operations in the Free State:
• Bambanani mine, located near the town of
Welkom, comprises one shaft feeding the
Free State One Plant.
• Masimong mine, located near the town of
Riebeeckstad, comprises No 5 shaft, which
is the operating shaft, and No 4 shaft, which
was closed but is still used for ventilation
purposes and as a second escape route.
• Phakisa mine, located near the town of
Odendaalsrus, was brought into production
in 2008 and comprises a single shaft system
extending to a depth of 2 427m. Phakisa is
expected to be in full production by 2011.
• The Target operations are located at the
northern extent of the Free State goldfields,
some 20km north of Welkom.
• Joel mine is located near the town of
Theunissen. The mine comprises two shafts
and ore is transported to the central plant
near Virginia.
• Phoenix is a tailings retreatment operation,
located at and adjacent to Harmony’s
current and historical mining operations in
the Free State.
• Tshepong mine, located near the town
of Odendaalsrus, comprises a vertical
shaft transporting ore to Free State One
Plant. The Tshepong Sub 66 Decline project
is currently in a build-up phase, and the
Sub 71 Decline project is under development.
• The Virginia operations comprise
the Harmony 2, Merriespruit 1 and 3,
Unisel and Brand shafts. They are located
in the Free State near the town of Virginia.
Total mined amounted to 2 130 000 in
2008, while gold production amounted
to 7 786kg.
Gold mines in the Free State also supply a substantial portion of the total silver produced in the country, while considerable concentrations of uranium occurring in the gold-bearing conglomerates of the goldfields are extracted as a by-product.
Diamonds
De Beers Consolidated Mines has long been the
world’s foremost producer of uncut diamonds,
its mines producing 95% of South Africa’s
total output. In 2008, De Beers’ South African
operations recovered almost 12 million carats.
Diamond production has been important in the Free State for decades. The province produces high-quality diamonds from its kimberlite pipes and fissures. The well-known Jagersfontein and Monastery mines have been closed, but they have been replaced by others.
Voorspoed Diamond Mine
De Beers’ Voorspoed Diamond Mine was
officially opened on 4 November 2008.
Located in the Free State Province,
Voorspoed is the first of a generation
of mines that sets new standards in
environmental and social performance.
It is the first De Beers mine to be opened
in South Africa since the company
entered into the groundbreaking broadbased
black economic empowerment
transaction with Ponahalo in 2006.
Voorspoed is also De Beers’ largest
project in South Africa since Venetia
Mine, in Limpopo, was commissioned in
the 1980s
The diamond mine has an exemplary environmental, rehabilitation and eventual closure plan that began to be implemented even before construction of the mine, long before the first diamond was even recovered from the ground. As a result, Voorspoed has a far-reaching environmental- and socialinvestment programme that has already begun to ensure that the mine’s impact will be felt in the communities in which De Beers and Ponahalo operate.
A modern mine requires a modern miner. Voorspoed employees are not only younger (the employee profile is less than 35 years), they are also more qualified than is traditional for a mining environment in South Africa. All employees have fully completed secondary school and many have had tertiary education. The mine already has an outstanding record of ‘women in mining’ and women hold 25% of technical and mining jobs, while 36% of the mine complement is female.
Nicky Oppenheimer, chairman of the De Beers Group, said, ‘Voorspoed is the first major new diamond mine to be opened in South Africa for almost two decades, and is testament to our confidence in the robust future of the diamond industry.’
Voorspoed, situated approximately 30km north-east of Kroonstad in the Fezile Dabi district of the Free State, is expected to produce approximately 800 000 carats per annum when in full production. De Beers acquired the mine in 1912 from the Voorspoed Diamond Mining Company, who had closed the insolvent mine after experiencing difficulty mining the hard and competent kimberlite.
The technology now employed, together with the efficiency of employees, the value of diamonds and the confidence De Beers has to invest R1.3-billion in South Africa and this new diamond mine, has allowed the development of Voorspoed to go ahead with confidence. Voorspoed is expected to be operational for the next 12 to 16 years and produce in excess of 10 million carats.
During the life of the mine, in excess of R1-billion will be generated in the Free State region. At peak production levels, 70% of the 430 full-time employees at Voorspoed will be from the local community.
The mine complement is made up of 87% historically disadvantaged South Africans, who account for 72% of the management positions. The mine will also make use of local suppliers for its non-core activities, with the focus being to promote regional black economic empowerment through the facilitation and transfer of business and entrepreneurial skills. More than 50% of procurement is already sourced from blackempowered and -owned companies.
The mine is also promoting a Women in Mining Initiative, with women accounting for 25% of the technical staff employed to date. Opportunities have been identified for employees with disabilities, and the first three appointments have been made in the technical- and servicessupport areas of work.
A total budget of R86.5-million has been provided for environmental management during the life of the mine and is further evidence that the stewardship of environmental resources is a core part of De Beers’ commitment to the future of the countries in which it operates.
Coal
Bituminous coal is also mined, and converted to
petrochemicals, at Sasolburg. Of South Africa’s
18 principal coalfields, two occur in the Free
State, these being the Vereeniging-Sasolburg and
Free State fields.
The Vereeniging-Sasolburg coalfield ranks third in South Africa in order of importance, while the Free State supplies a saleable output of 10.5% of the national coal output. The New Vaal Colliery, near Vereeniging, has a capacity of 15.2Mt per year and supplies coal to Eskom’s 3 600-megawatt Lethabo power station.
Bentonite
Bentonite, formed through the in situ alteration
of volcanic ash, is also mined. South Africa’s
largest deposit of bentonite, the Oceaan deposit,
is found in the Koppies district in the Free State.
Limestone
Calcrete is present in the western parts of
the Free State and limestone reserves are
substantial. Agricultural and dolomitic limestone
is being produced in opencast workings.
Salt
Salt is produced from salt pans in the western
Free State. Production is concentrated around
the Florisbad salt pan, north-north-west
of Bloemfontein.
Other minerals
Other minerals produced in the Free State
include gypsum, granite, and sand and
stone aggregate.
Transformation in the mining sector
Mining is one of the oldest sectors in the
South African economy. It is also one of
the most powerful, steeped in tradition and
history. That history, however, has left the
sector unrepresentative of South Africa’s
new democracy.
The Mining Charter was established to help the mining sector overturn the mistakes of the past and has produced some excellent results in recent years.
The mining sector was the first to formally adopt a black-economic-empowerment charter. As one of the country’s largest sectors, transformation is critical in South African mining. Still today, however, more than 70% of the labour force in the mining sector is black, while less than 5% of managerial positions are held by previously disadvantaged South Africans.
In terms of legislation and the Mining Charter, equitable access to mineral resources and opportunities is a national priority. Meaningful, substantial and sustainable participation of previously disadvantaged individuals in the sector is not just encouraged, it is required, and so it should be.
KEY CONTACTS
Chamber of Mines of South Africa:
www.bullion.org.za
Council for Geoscience: www.geoscience.org.za
De Beers Consolidated Mines:
www.debeersgroup.com
Geological Society of South Africa: www.gssa.org.za
Mining Qualifications Authority: www.mqa.org.za
Southern African Institute of Mining and
Metallurgy: www.saimm.co.za
