Mining in focus
Surging commodity prices makes the revitalisation
of mothballed operations a tempting reality, writes
Leon Louw and Dr Nicolaas C Steenkamp.
T
he economic downturn that has
plagued the mining industry
for the past few years, forced
several companies to mothball marginal
operations. Some commodities
have, however, recovered since the
beginning of 2017, making it viable
to re-start these operations again.
This year, manganese, iron, coal
and chromite / ferrochrome prices
made significant strides and there
was a substantial resurgence of
gold. Resuscitating marginal or
low profit mines certainly has its
merits, but such projects present
numerous challenges as well.
Most operations are placed on
care-and-maintenance because of
economic difficulties. Suboptimal
grades, fluctuating and low commodity
prices and increasing operating costs
hampers profitability, while infrastructure
constraints result in costly mining
operations, especially when they are in
remote regions. Traditional underground
mining methods are more expensive
to operate compared to modern
mechanised operations while open cast
operations pose fewer challenges.
A processing plant can be successfully
started up again within six to eight months.
Is recommissioning viable?
The main factors affecting the viability
of revitalising a mothballed operation are
the costs of restarting, maintenance and
safety and legal requirements. According
to Breton Scott, managing director at
Bowline Professional Services, a number
of technical and financial factors must
be considered when deciding whether
or not it is viable to bring an operation
and associated infrastructure back into
production. It is always going to be a
balancing act between revenue potential
(depending on the commodity price),
product recoveries, production