Consolidated Murchison, a division of Metorex, is currently one of the largest known antimony orebodies in the world. The operation is situated at Gravelotte, in the Limpopo Province and produces both antimony and gold. Antimony is used mostly for flame retardants but has a variety of commercial applications in plastic, fabric and electronic printed circuit boards.
SHEC report
Safety performance frequency rates
| Frequency rates |
F2008 |
F2009 |
| Non-lost time frequency rate |
2,8 |
2,1 |
| Lost time injury frequency rate |
7,8 |
8,9 |
| Total recordable injury frequency rate |
10,5 |
11,0 |
| Reportable injury frequency rate |
1,4 |
2,1 |
| Serious injury frequency rate |
1,4 |
2,1 |
| Lost day severity rate |
12,2 |
11,3 |
| Fatality frequency rate |
– |
– |
Safety and health
Consolidated Murchison’s safety performance during the year under review included the achievement of 1,295 million fatality-free production shifts. Conversely, an increase in injuries continued to hamper the operation’s overall safety performance.
At mid-year management implemented several measures to curb an increase in the lost time injury frequency rate. Although the situation improved, three reportable injuries were recorded in the last two months of F2009, which led to a noticeable increase in the reportable injury rate. Accidents and injuries were attributed to engineering activities and operations at the Monarch shaft.
Unfortunately the year under review was not without issues, with the mine having to comply with an instruction by the Department of Mineral Resources (“DMR”) to halt production for 10 days in light of safety concerns. It was found that the practice of mid-shift secondary blasting was resulting in limited exposure of some employees to gasses. As a result, this secondary blasting was stopped. During the stoppage the mine re-examined its ventilation regime, analysed the chemical composition of its explosives and embarked on a re-training exercise.
Occupational hygiene is given a high priority at the operation. A full-time medical practitioner conducts all of the medical examinations and compiles information in relation to all illnesses and sicknesses, including noise-induced hearing loss and dust-related diseases.
| Consolidated Murchison (Asset held-for-sale) |
|
Year |
| |
|
June 2008 |
June 2009 |
| Tons milled |
(t) |
355 076 |
345 349 |
| Produced – antimony |
(mtu) |
361 455 |
257 983 |
|
– gold |
(kg) |
533 |
423 |
| Sold – antimony |
(mtu) |
337 403 |
271 286 |
|
– gold |
(kg) |
521 |
423 |
| Total cash cost/mtu sold ~ |
(R/mtu) |
343 |
592 |
| Mining profit/(loss) before depreciation |
(R/t) |
24 925 |
(79 223) |
| Depreciation |
(R’000) |
10 196 |
13 590 |
Environment
In F2009 several audits were undertaken at Consolidated Murchison by the Department of Mine’s Environmental Auditors and the Department of Environmental Affairs. No outstanding issues remained following the audits, and a new method of reporting on incidents will be a focus in the coming year.
In an effort to continue sound environmental management practices, an internal review of the mine’s environmental rehabilitation liability was undertaken, with an independent consultant appointed to conduct a detailed assessment.
Serving the community
The community service contributions by the operation’s Occupational Medical Practitioner, in conjunction with the Limpopo Department of Health, continues to function well. The surrounding community was impacted by the completion of a retrenchment process ending in March 2009. Of the 304 employees retrenched, 35 were due to medical incapacity while the remaining 269 employees were retrenched as a result of new operational requirements. Management has engaged with the Ba-Phalaborwa Municipality regarding post-retrenchment support, which could potentially extend to the clinic, water and other services.
Social investments undertaken during the year include an Occupational Health Management Programme (R2.9 million), adult education and computer training (R240.000), spending on schools (R120.000), transport for employees (R1.6 million) and hostel feeding (R2.2 million). The mine also supplies the local Gravelotte community with potable water.
Operational review
The overall tonnage mined at Consolidated Murchison declined by five per cent compared with the prior year. Production was adversely affected by lightning damage to the Beta shaft and a planned reduction in mining in response to the global economic crisis, reduced prices and the bankruptcy of the company’s sole antimony client. The previously mentioned closure of the mine for 10 days on the instruction of the DMR further impinged on production.
During the latter part of F2009 the mine ramped up its efforts to target high grade areas, which resulted in improved recovery grades. However, the tons milled declined by three per cent due to the lower mined tonnage.
The mine’s overall antimony production declined by 29 per cent, while gold production was 21 per cent lower than the previous year. The primary causes were lower headgrades and lower plant recoveries. Both antimony and gold headgrades recovered during the latter part of F2009 by focusing on high grade areas. It is anticipated that plant repairs and upgrades under consideration will improve plant recoveries to their previous levels in the coming year.
Antimony and gold sales fell 20 per cent and 19 per cent respectively compared with F2008. The mine’s only antimony customer, US-based GLCC Laurel, experienced severe financial difficulties and was consequently unable to purchase antimony from the mine after October 2008. Alternative clients were sourced, albeit at substantially lower prices.
The price of antimony reached a high of US$54.68 per metric ton unit (“MTU”) at the end of September 2008 but declined to US$16.81 per MTU in January 2009. The subsequent increase in price of antimony was insufficient to close the gap and unit prices were 33 per cent lower on average than the previous year. More positively, the price of gold showed a healthy improvement of 23 per cent in Rand terms.
Overall operating costs increased by 29 per cent year on year, while labour costs increased by 37 per cent (including R5 million retrenchment costs). This was incurred primarily after plans were implemented at the end of F2008 to boost production, which required a larger staff complement. The cost of staff retrenchments, coupled with increased capacity building in the first half of the year, also contributed to increased costs. The continuing international rise of key raw materials (such as steel and reagents) substantially impacted on the domestic cost of many of these indispensable materials.
Reduced production and lower unit prices resulted in an overall revenue decline of 15 per cent against the prior year. Combined with increased costs, Consolidated Murchison recorded a mining loss before depreciation of R79 million. The closing out of a negative gold hedging position realised a loss of R41 million.
All capital projects ceased in October 2008 in response to cash flow constraints, with total capital expenditure for the year amounting to R30 million, well below the R68 million spent in F2008. In the first few months of F2009, capital was spent on new declines, trackless machinery purchasing and the purchase of wet screens for the plant.
Looking forward
The antimony price began to show some strength towards the end of F2009 and this should continue into F2010, relieving some of the financial pressure on the operation. However, Rand strength continues to offset some of the benefits of the higher Dollar antimony and gold prices. Capital has also been spent on critical maintenance at the plant which should return recoveries to normal levels. The mining plans demonstrate sufficient available tonnages for F2010, but constraints are apparent thereafter. The mine continues to make losses and all alternatives are being investigated to save jobs and return the operation to profitability. |
