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Elikhulu, and The Value Of Tailings
With the right conditions and application of technology, historical mine tailings can be a lucrative source of minerals. This is exemplified by the Elikhulu Tailings Retreatment Plant at Evander Gold Mine, as PAN African Resources’ Chief Executive Officer Cobus Loots discusses
Large tailings facilities from historic underground mining operations have presented significant liabilities, environmental risks and disposal challenges for current mine owners. But now, given the vast improvements in extractive technologies innovative miners have been able to transform this burden and hazard into a profitable resource and asset, with the added benefit of rehabilitating sterilized ground to once again become productive real estate.
In South Africa – where the world’s richest known mineral deposits have been mined intensively for more than a hundred years – many older tailings dumps remain rich in material, some at grades which, with modern processes and technology, make re-processing an attractive business opportunity. These tailings bear testimony to the country’s rich mining history, and also to the South African mining industry’s ability to continuously improve, evolve and innovate.
Easily accessible, and with much-reduced production risks and labour requirements, tailings retreatment is attracting greater investor interest due to the inherently safer nature of surface operations and also due to the very attractive economic returns of these operations.
However, tailings retreatment is not without its own set of economic hurdles and pitfalls. Given the technical complexity and the significant capital investments required in the construction of tailings retreatment plants and depositing facilities, economies of scale are generally key. Normally, bigger is better, so to speak.
This is demonstrated at South Africa’s newest tailings retreatment plant, the Elikhulu Tailings Retreatment Plant, owned and operated by mid-tier African miner Pan African Resources. Pan African Resources has successfully started to exploit the over 200 Mt (million tons) of gold tailings accumulated over 70 years of gold mining at its Evander Gold Mining Operation.
Turning Tailings to Profit
Fed by the Kinross, Leslie/Bracken and Winkelhaak tailings storage facilities, this modern retreatment plant can produce up to 65 000 oz of gold per year. It has mineral reserves of 1.5 million ounces of gold, at a head grade of 0.27 g/t, and produces gold at a total All-in sustaining cost of sub US$ 700/oz. It has mineral resources of 1.9 Moz. at 0.29 g/t (203.6 Mt), with an expected life-of-mine of 13 years.
It isn’t often that such an ambitious mining project in South Africa achieves the levels of success in such a short time as has been reached by this innovative retreatment facility. In addition to the plant’s high throughput, its modern extraction process (which does not require regrind mills and thickeners), short pumping distances, low reagent consumption and use of non-potable water supply have allowed its production costs to remain remarkably low.
Currently outperforming the cost and rate of recovery guidelines of its bankable feasibility study, the plant – delivered ahead of schedule and within budget to achieve first gold pour in August 2018 – has reaffirmed Pan African Resources’ prized reputation as South Africa’s lowest-cost gold producer.
The timing of this investment could also not have been better, as gold continues to build on its strong run over the last few years towards the US$ 1 600/oz mark.
Combined with the company’s other key surface asset, the Barberton Tailings Retreatment Plant (BTRP), Pan African Resources expects annual gold production to reach over 185 000 oz, now almost evenly split between surface and underground mining operations. The BRTP has a capacity of up to 25 000 oz/annum, and, like Elikhulu, produces gold at an excellent All-in sustaining cost of sub US$ 700/oz.
Tailings Retreatment Lowers Environmental Footprint, Improves Sustainability
In addition to providing economic opportunities, the reuse and retreatment of tailings dams can also improve environmental sustainability of the mining industry. Reprocessed tailings are typically deposed on a new site that can take advantage of modern, improved lining and containment technologies, thereby mitigating the contamination and safety risks of older tailings storage facilities. Historic tailings sites can then be reclaimed and developed for new land use.
Other industries may also benefit from tailings retreatment, with the use of tailings for construction materials such as concrete and mortar currently being investigated. This could reduce the need to mine natural aggregates, and thus provide significant savings in production costs and provide a greater circular economy approach to mining in the future.
Once a burden on mining companies, tailings storage facilities are an increasingly attractive strategic asset for technologically focused and innovative miners.
Chief Executive Officer
PAN African Resources