Ruashi is a developing copper and cobalt operation located a few kilometres from Lubumbashi in the south eastern province of Katanga in the Democratic Republic of the Congo (“DRC”). Ruashi Holdings (Pty) Limited owns 75 per cent (F2008: 80 per cent) of the operating company (Ruashi Mining sprl), while the remaining 25 per cent (F2008: 20 per cent) is held by the state-owned Gécamines. The decrease in the interest held by Ruashi Holdings (Pty) Limited is as a result of the finalisation of the contract revisitation process and the subsequent amendment to the contract of creation of Ruashi Mining sprl.
During F2009, the process plant took major strides to enhance its engineering and development capacity. During plant commissioning many bottlenecks were identified and solved and a comprehensive mineral resource modelling programme was undertaken to achieve greater certainty and resolution of mineral resources and ore reserves. All costs were capitalised for the Ruashi phase II during the entire financial year.
SHEC report
Safety performance frequency rates
| Frequency rates |
F2008 |
F2009 |
| Non-lost time frequency rate |
42,7 |
6,9 |
| Lost time injury frequency rate |
– |
0,5 |
| Total recordable injury frequency rate |
42,7 |
7,4 |
| Reportable injury frequency rate |
– |
0,5 |
| Serious injury frequency rate |
– |
0,5 |
| Lost day severity rate |
– |
9,5 |
| Fatality frequency rate |
– |
– |
Safety and health
Data from the last two financial years are not fully comparable given that reporting methodology of the mine’s safety statistics changed to match the new Metorex standard definitions. However, the non-lost time injury frequency rate showed a favourable downward trend. The number of nonlost time injuries increased marginally to the increase in the number of employees. The operation has not had a fatal accident since inception in May 2005 and has achieved 1,27 million fatality-free shifts.
A new Safety, Health, Environment and Communities (“SHEC”) policy was introduced in February 2009 in alignment with Metorex’s Group policy. Safety training progressed well in the period under review, and safety awareness was heightened through a number of initiatives and an increase in training.
| Ruashi |
|
|
Year
June
2008 |
June
2009 |
| Tons milled |
|
(t) |
n/a |
485 360 |
| Headgrade |
– Copper |
(%) |
n/a |
2,8 |
| |
– Cobalt |
(%) |
n/a |
0,5 |
| Recovery |
– Copper |
(%) |
n/a |
76 |
| |
– Cobalt |
(%) |
n/a |
27 |
| Copper produced |
|
(t) |
n/a |
10 378 |
| Copper sold |
|
(t) |
n/a |
10 351 |
| Cobalt produced |
|
(t) |
n/a |
720 |
| Cobalt sold |
|
(t) |
n/a |
326 |
Total cash cost/ton of copper produced,
net of cobalt credits* |
|
(US$/t) |
n/a |
4 518 |
| Capital expenditure, excluding losses and borrowing costs |
|
(R’000) |
1 365 773 |
752 632 |
* Cobalt credit calculated basis cobalt production and a gross cobalt price of US$15/pound (US$9.60/pound payable) for illustrative purposes
Environment
Ruashi introduced Metorex’s reporting levels in April 2009 to capture its environmental incidents. Only four incidents were reported in the latter half of the year, one of which was an incident that occurred when return water from the tailings dam overflowed and discharged mine water into a nearby stream. Prompt corrective action was taken and measures were put in place to prevent further occurrences.
Improved systems have been installed to clean and prevent further hydrocarbon spills from large earthmoving equipment on the mine. Once a fully operational sulphuric acid plant has been established at Ruashi, it will further reduce the operational risk and costs associated with importing sulphuric acid from the Zambian copper belt.
In terms of occupational health Ruashi has sampling devices around the plant for dust collection. Subsequent chemical analysis is undertaken to ensure compliance with environmental standards for workplaces. Water quality is monitored in and around the mine and plant, as well as in the community and other general water courses. Equipment to enable a comprehensive range of workplace health monitoring programmes for workers is on order, but a formal system is not yet in place. This will be implemented in F2010. Ruashi undertakes limited malaria spraying and provides impregnated mosquito nets. This specifically structured preventative programme will be enhanced in F2010.
Serving the community
Ruashi provided both power and water to various sections of the Ruashi village during the year under review. A water storage tank and reticulation system at the main village was upgraded and transformers have been installed at three of the subsections of the village. The company also sponsors sports days and annually hosts the “Ruashi Water Fun Run” to celebrate the commissioning of the water system in F2008. A total of US$1.0 million was spent on social initiatives during F2009. The proximity of the mine to Lubumbashi and more specifically the Ruashi village requires a high level of engagement with local communities. This is a key risk and management focus area.
In addition, a number of additional projects were supported and these are listed in the Corporate Social Investment section.
Operational review
Commencing in April 2009 the mine embarked on a 5,000 metre infill diamond drilling programme to improve its knowledge of the orebody in areas where there is a lower concentration of information, and also to confirm the different ore types within the overall orebody. The drilling and assay interpretation is complete and a revised South African Mineral Resource Committee (“SAMREC”) mineral resource and ore reserve has been defined for publication. A full technical team has been set-up at the mine to ensure compliance with best practice.
Mining commenced in Ruashi Pit 1 at the start of the financial year. Benches and access to the pit were established and dewatering efforts accelerated. Additional curtain dewatering boreholes were drilled on the south sides of Pit 1 and Pit 2. At the close of the 2009 financial year, Pits 1 and 2 were fully established.
The mine delivered 738,236 tons of ore to plant, 252,876 tons of which were initially processed through the phase I concentrator and commencing December 2008, 485,360 tons at the new phase II base metal refinery. The grades recorded were 3,05 per cent copper and 0,47 per cent cobalt to the Phase I concentrator and 2,8 per cent copper and 0,5 per cent cobalt to the Phase II refinery. Waste tonnage stripped for the period amounted to 6,3 million tons.
During the latter half of the year considerable progress was made in developing the Phase II plant into a steady state of operation. Both the milling and the leach sections were stress tested to 200 tons/hour and 180 tons/hour of solids respectively. The pre-leach thickener operated to its design specifications, and transfer to the leaching section was satisfactory. The counter-current decantation circuit operated effectively, as did the solvent extraction (“SX”) and electrowinning (“EW”) sections.
Annual production comparisons are difficult for F2009 as the Phase I concentrator was placed on care and maintenance while the Phase II plant was being commissioned. In addition the mine blended ores from stockpiles to maintain plant stability until sufficient ore was available from the open pits for full grade and “gangue acid consumption” flexibility.
The Phase II processing facility commenced production of London Metal Exchange “A” grade copper in early January 2009, after commissioning the solvent extraction facility in the last quarter of the 2008 calendar year. This was followed by the commissioning of the cobalt plant in February 2009.
Total Phase II production totalled 10,378 tons of copper and 720 tons of cobalt since the start up of the new facility in January 2009.
Copper sales tonnages have largely been aligned with their anticipated production profile. Conversely cobalt sales lagged considerably behind production due to various logistical problems experienced in the last quarter of the financial year.
Considerable time and effort has been and will continue to be spent on improving logistics flows to and from the DRC.
The company was materially impacted by the decline in commodity prices but benefited from a copper hedge at US$7.071 per ton to 30 June 2009. The company currently maintains a hedge book which is briefly summarised as:
- 24,750 tons to September 2010 at US$3.900 per ton.
- 34,425 tons from October 2010 to 30 June 2012 at a put level of US$3.900 per ton with full exposure to the upside.
The average cobalt price achieved reduced from US$18 per pound to US$14 per pound.
Unit costs for the Phase II processing facility were distorted due to commissioning and ramp-up activities in the year. Although commissioning did not satisfactorily meet the originally expected profile, ongoing elimination of technical bottlenecks, improved maintenance and availability of critical spares ensured encouraging month-on-month improvements. Staff training is augmenting the current ramp-up profile and ensuring its sustainability.
A large proportion of the capital expenditure, totalling US$60.1 million, was spent on finalising the Phase II processing facility and bringing the plant into production. Investment was focused on mainly electrics and instrumentation, commissioning and the front-end crushing section. Overburden stripping in Pit 2 was capitalised and the first dewatering infrastructure was established.
Exploration projects included resource drilling of the Musonoi Project, at a cost of US$1 million and US$1.8 million was spent on infill drilling at Ruashi during the latter half of the financial year.
Looking forward
The mining and processing ramp-up of Phase II will continue in the year ahead. By the second half of F2010 Ruashi will be producing in excess of 2,000 tons of copper per month and 200 tons of cobalt per month. To achieve this Ruashi will complete a comprehensive mine design and scheduling programme and will complete several projects by the end of the December 2009 quarter as displayed below:
| Area |
|
Activity |
| Front-end crusher and coarse ore stockpile |
|
Completion of civil, mechanical and electrical works. |
| Lime Plant upgrade |
|
Scope defined and equipment orders placed. Construction has commenced |
| Cobalt Plant dryer |
|
All civil, structural, mechanical and instrumentation equipment is on site. Construction is ongoing. |
| Flottweg Tricanter |
|
An additional centrifuge has been ordered for the SX section. |
| Pit Dewatering Project |
|
- Re-positioning of electrical and mechanical equipment for in-pit water pumping
- Commissioning of the coffer dam water flow to plant
- Constructing and equipping of a number of permanent sumps in both pits
- Constructing and equipping seven additional pit dewatering boreholes
|
A number of additional capital and developmental projects are planned for the coming year, namely:
- A design review and scope clarification for the mine’s acid plant will be completed at the end of October 2009. During this period all engineering work is expected to be completed and the site will be prepared for construction access;
- Exploration work has commenced on identifying sites with the best potential for further exploration to extend mineral resources and resultant ore reserves; and
- The mine design and an evaluation of the development and processing options for the Musonoi (Dilala East) feasibility study are under way for completion in December 2009.
|
