Mining in focus
It is a big advantage if the plant and equipment on site is still in
working order when the mining operation is brought back on line.
initial plans make provision for. “If the
shaft has been properly cared for and
maintained while closed, that would help
with getting over the basic safety hurdles.
But to get back to full continuous
production is hard work and funding is a
function of the business case,” says Lane.
Another shutdown?
According to Warren Beech, partner
and head of Mining at Hogan Lovells,
several projects that were put on
hold in South Africa, were brought
back on stream based on increased
demand, higher commodity prices
and the general positive outlook
at the beginning of the year.
“Many of these projects started
looking feasible again and soon after
were back on track, although the
current business environment has once
again changed the dynamics,” says
Beech. Some projects are relatively
easy to bring back on line, and in some
cases, can be implemented within 18
months to two years, while bigger
projects can take between six to eight
years before running at full capacity.
Most of the mining projects that
were shrugged off in 2016 and are back
in the fast lane within the first four
[24] MINING MIRROR JANUARY 2018
months of 2017, are coal operations.
These include extensions on existing
operations that were put on ice, or new
extensions within an existing group.
Several coal majors have embarked
on some form of expansion project
or bringing what was believed to be
canned operations back on line.
According to Beech there are two
types of operations that were shelved
during the days when the mining
cycle were testing new lows.
“Existing operations (brownfields)
were placed on care and maintenance
where it didn’t make sense to mine or
sell these mines. Then there were new
greenfield projects that were put on
hold,” says Beech. Both, nevertheless, had
to deal with similar economic challenges,
although it is easier to get a shaft – that
was put on care and maintenance – going
again. An existing mine, compared
to a new project on virgin land, has
all the vital infrastructure in place
and, importantly, would have all the
necessary regulatory approvals in place.
Moreover, it is easy to source
labour in an area where a mine was
operating before. That said, the current
political and economic situation in the
country may force all these re-mining
projects to consider shutting down
again. The initial decision to restart
was based on perceptions of the
risks involved in operating in South
Africa at the beginning of 2017.
Significant political and economic
events, in the meantime, have altered
the business landscape and revitalised
projects may once again be put on
the back burner. If this is the case
a brownfields project, where the
operations were started up eagerly not
too long ago, can close again in less
than six weeks, although it is not an
ideal situation. But positive political
and economic change and stable
commodity prices, will make seemingly
downtrodden projects attractive again.
Mothball opportunities
Scott says that mothballed operations
can be brought back into operation
within a short lead time. “The
implication is that full benefit
can be derived from any sudden
commodity uptick, or positive political
or economic news,” says Scott.
Stockpiled material on site can
be sold while the operation is being
re-started, which generates an income
for the operation to cover some of the