Shift to underground mining on way, Randgold Resources CEO Bristow predicts

Shift to underground mining on way, Randgold Resources CEO Bristow predicts

The mining industry was about to experience a shift to underground mining away from opencast mining for environmental and cost reasons, Randgold Resources CEO Mark Bristow predicted in Johannesburg on Thursday. Just as underground mining had been rejected in favour of opencast mining in the 1980s, Bristow now foresaw opportunities for the reverse.

This would be so particularly in the case of ‘wide’ underground mining that lent itself to the use of mechanised equipment.

Environmentally, underground mining left less of a scar and the cost of using opencast mining equipment had soared. Moreover, the opencast contract-mining industry was in a state of virtual collapse.

In the circumstances, Randgold Resources’s strategy would be to develop what Bristow described as a ”new-world underground mining model” in partnership with specialists.

While the company would continue to control everything around its gold core business – embracing metallurgy, planning, geology, exploration, valuation and finance – it would develop partnerships with outside firms for activities such as equipment maintenance and blasting.

Randgold Resources’ own foray into underground mining was about to commence at its Loulo operation in western Mali, where site clearance was in progress.

The company’s capital projects division would excavate a boxcut for underground access at Yalea and civil engineer a portal, once the rainy season had ended.

Equipment for this had already begun to arrive on site and the name of the successful shaft-sinking contractor – which would be a South African company – was scheduled to be announced in ten days.

The successful shaft-sinking contractor would then set up on site during this quarter; sinking of the decline development would begin in the next quarter; and ore would be intersected at the end of 2007.

There would be a four-year build-up during which time the process of going underground would be replicated at Loulo Zero, which was 6 km away.

The plan was for underground mining to be mechanised and some $84-million would be spent from 2006 to 2009 to get the underground projects up and running.

Ongoing capital expenditure on footwall development and infrastrucuture would be at a rate estimated at more than $8-million a year.


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