Mogale Tailings Retreatment Project Case Study

The Mogale Tailings Retreatment (MTR) project in Mogale City (Krugersdorp), northwest of Johannesburg, is a project well-poised to increase Pan African Resources’ annual gold production. Having already made a name for itself with two highly successful tailings retreatment operations, Elikhulu at its Evander Gold Mine and the Barberton Tailings Retreatment Plant (BTRP), MTR is a valuable asset with mineral resources of over 240 Mt of historically mined material.

Once production reaches a steady state in December, the Mogale Tailings project will, over the life of the operation, produce over 1.1 million ounces of gold at a head grade of 0.3 grams per ton adding over 50,000 ounces of gold annually to Pan African Resources production, which is about 25% of current annual group production.

The mid-tier gold producer leverages low-cost hydro mining methods with a modern and automated large-scale processing facility to unlock the operation’s full potential. PAR has gone beyond compliance by already contributing towards environmental rehabilitation and providing social and economic opportunities to the local communities.

Key Takeaways

• MTR operation poised to add 50,000 ounces of gold to PAR portfolio annually
• Pan African Resources leveraging low-cost hydraulic mining method to unlock value at Mintails project
• PAR affirms commitment to sustainable mining and environmental protection at the Mogale mining
• PAR devises methods and strategies to deal with ongoing illegal mining issues in Mogale

After years of tailing deposit management neglect, the Mintails sites at which the Mogale operation sits had turned into a dangerous and environmental wasteland occupied by illegal miners. While the site has become an example of what mining should not be, characterized by a collection of rusting old buildings and contaminated water puddles, PAR is looking to rejuvenate Mogale’s mining history and give the town the glory it deserves.

Driven by the Mantra of Mining for A Future, PAR has set out to transform MTR into an incredible opportunity for both shareholders and local communities. While focusing on environmental rehabilitation and sustainable mining practices, the mid-tier gold miner concentrates on ecological rehabilitation that will benefit local communities.

Table of Contents

• Mogale Tailings Retreatment Project Case Study
  • Mogale Project Background and Objectives
  • Mogale Tailings Retreatment Technology and Process
  • Sustainability and Environmental Impact of the Mogale Facility
  • Mogale Project Impact on the Local Community and Economy
  • Challenges and Solutions in Gold Production Retreatment Operations
  • Future Implications for the Mogale Tailings Treatment Project

With its investment of R2.5 billion committed to the local gold mining sector in Mogale, PAR has taken an innovative step towards the future of gold mining in South Africa. A portion of this investment will fund the MTR operation’s use of cutting-edge technology to enhance the efficiency of mining operations.

Consequently, the old Mintails tailings dams should become an opportunity rather than a liability thanks to PAR’s leveraging of advanced tailings processing technology. These methods are being used to good effect at its Elikhulu operations.

Hydraulic mining will be used to loosen the material using untreated groundwater in high-pressure hoses for the MTR operation’s tailings extraction. The slurry will then be piped to a state-of-the-art automated treatment plant, which can process 800,000 tons of tailings material per month. This is a tried-and-tested, inexpensive, low-impact mining method.

Hydraulic mining will be the primary method of extraction for the bulk of MTR tailings resources. Nevertheless, load-and-haul mining will be required for mineral recovery when the sand dump material (known as the North Sands and South Sands dumps) needs to be processed.

The MTR operation incorporates an almost identical design to the Elikhulu facility, including a high oxygen mass transfer pre-oxidation step needed to improve gold extraction. It will also have a water treatment section to limit corrosion and potentially improve recoveries.

Source: Pan African Resources

Over the years, PAR has embraced sustainable mining practices, focusing on extracting value from minerals while prioritizing sustainability. Its commitment to sustainability at the MTR facility is affirmed by its focus on key environmental, social, and governance considerations.

Likewise, the company has reiterated its commitment to environmental compliance and rehabilitation of the historic tailings deposits at the MTR facility by improving air and water quality in the area, through dust control measures and water treatment plants. Commitment towards renewable energy should support sustainable mining activities, having already commissioned a feasibility study for a 20MW solar renewable energy plant at MTR.

In addition to its commitment to renewable energy, the mid-tier gold miner will implement a water conservation strategy to reduce its environmental impact. Consequently, it plans to treat underground water, thus preventing acid mine drainage.

A new water recycling plant just put into service at its Evander operations recycles three mega-litres of subterranean water daily for use in PAR’s processing operations at Elikhulu, further demonstrating PAR’s commitment to bettering water management and recycling.

Stringent environmental controls in compliance with its approved water use licences and environmental management programmes across mining operations ensure that discharges and run-offs do not negatively affect local water bodies and related habitats. The company also oversees an intensive monitoring programme for water quality and overall biological health and a proactive stormwater management strategy.

PAR’s water recycling and conservation efforts are already paying off, with its overall water withdrawal having decreased by 10.3% in fiscal 2024, which led to a 10.9% drop in water consumption to 9.2ML. The treatment plant’s recycled water output increased by 1,568.5% to 747.5 ML or 8.1% of the total water used.

Even as PAR moves to ramp up gold production, focusing on the MTR facility, it is also committed to reducing its carbon footprint. In Fiscal 2024, its carbon intensity per ounce of gold produced dropped by 1.6% thanks to increased renewable energy use and taking into account the increased gold production for the year.

The MTR operation is already significantly impacting the local economy through job creation. The project has surpassed initial projections, which called for 700 jobs to be created during construction and 300 jobs during operations. There are currently 1,600 employees working and 500 employed on long-term contracts as a result of fast-tracking the project.

Beyond employment, PAR is also dedicated to social upliftment. The company has invested in education initiatives, infrastructure, and local supplier development projects through its social and labour plans (SLPs), which have positively impacted the area’s economy and the growth of sustainable local businesses.

PAR has also affirmed its commitment to reducing, reusing, recycling and disposing of waste from its mining operations. The ultimate goal is to minimize the impact of the operations on surrounding communities and the environment while conserving the natural habitat and preserving diversity.

MTR should result in more tax revenue for the government in addition to creating more job opportunities and skills. In addition, it should stimulate interest from foreign investors in the long term as PAR demonstrates how South African mining companies can produce gold safely and affordably through engagement and building solid relationships with local communities. The R2,5 billion spend on the project’s construction positively impacted the region’s economy and is the single most significant investment by any entity in the recent past.

Illegal mining has always been a big problem in South Africa, something PAR must contend with at its newly constructed and commissioned gold recovery asset. Illegal miners, known as “zama zamas,” target both active and closed mine sites.

An infiltration for illicit miners can shorten a mine’s lifespan, resulting in lost production, income, jobs, community economic benefits, and government tax revenue. Every year, South Africa’s official mining sector is estimated to lose over R7 billion ($370 million) to illegal mining operations.

Understanding how illegal miners can affect social stability, the environment, and investor confidence, PAR has made eradicating illegal mining a top priority in its sustainability initiatives. The company utilizes specialist security service providers, cutting-edge technologies and innovative means to improve mine security and stop illicit mining.

For instance, it has made significant investments in surveillance technology to monitor illegal activity on its sites. In addition to installing sophisticated surveillance cameras at key locations, PAR employs drones for aerial surveillance. Additionally, it employs the use of technologies including X-rays, radar, and long-range thermal cameras to identify and curtail illicit mining operations on its properties.

The Mogale Tailings Retreatment Project is one project well poised to strengthen PAR’s status as one of the lowest-cost and most successful mid-tier gold miners in South Africa. The company’s R2.5 billion investment in the construction of MTR is expected to breathe new life into the economically depressed and polluted area of Mogale while materially raising the company’s annual gold output and profitability per ounce.

Once production reaches a steady state in December 2024, it will mark an important milestone in PAR’s remarkable and proven track record of constructing and operating surface tailings retreatment plants to produce inexpensive, profitable gold ounces.