MODERN MINING IN THIS ISSUE

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1 MODERN MINING July 2013 Vol 9 No 7 IN THIS ISSUE Galane Gold makes progress at Mupane Impala No 16 Shaft handed over Botswana Resource Sector Conference SA innovates in arena DFS underlines viability of Makhado

2 South Africa innovates in arena South African mining houses Anglo American Platinum (Amplats) and Sibanye Gold are pushing ahead with ground-breaking technological innovations that provide positive environmental benefits as well as economic and safety impacts. Modern Mining contributor Blake Wilkins reports here on the projects. Two pilot projects underway at Amplats are aimed at the introduction of platinum-based, fuel cell-powered equipment into underground operations. The projects comprise the development with original equipment manufacturer Doking of a fuel cell-powered, remotely controlled mini-dozer for ore removal after blasting, and a fuel cell-powered locomotive being developed in partnership with Vehicle Projects Incorporated, Trident SA and Battery Electric. Sibanye Gold, for its part, has commissioned a methane-fired electricity generating plant at the Beatrix gold mine feeding slightly less than 2 MW back into the national power grid and is working on the installation of a second plant of the same capacity to be commissioned early next year. This is the first application of the use of natural methane for power generation at a gold mine in South Africa and possibly internationally. Fuel cell technology Expanding on the pilot projects at Amplats, Michael Joseph, Manager Industrial Development and Beneficiation at Amplats, says that they are being run separately but on similar timelines with the intention of developing business cases for the introduction of the equipment underground. Proof of concept testing of the mini-dozer will begin at Bathopele mine in September. If testing is successful we will proceed with full production testing. With the loco, underground testing will also start in September subject to performance criteria being met above ground. Initially, the loco will undergo a three-month proof-of-concept test at our School of Mines in a nonproductive environment. Following successful testing, production testing will be launched in a fully operational shaft at Thembelani mine. We anticipate production testing will be launched in the first quarter of The fuel cell locomotive prototype was launched at Khomanani mine in Rustenburg last year to undergo a series of above-ground tests that will continue through to August this year. Joseph indicates that testing progress was delayed as a result of minor technical issues with the pilot programme. Referring to the positive environmental impacts arising from the use of fuel cell technology, Joseph Underground testing of the fuel cell loco is due to start in September. Inset: The control cabin of the fuel cell loco (photos: Amplats)

3 The methane flaring point at Sibanye Gold s Beatrix mine (photo: Sibanye Gold). points out that it is common cause that fuel cells have zero emissions. Should the fuel cell-powered equipment prove feasible, it will replace the acid lead batteries currently used to power underground locomotives in Anglo American mines. Such replacement will do away with the issues of lead recycling and disposal of environment-unfriendly battery acid. Both the loco and the mini-dozer have hybrid systems comprising lithium ion batteries and fuel cells. With the loco, we will do away with the need to charge the acid lead battery for eight hours at the end of a shift and will charge the lithium ion battery through the fuel cell in little over half an hour. Productivity will be substantially enhanced. With a dual system, both the loco and mini-dozer will be powered by the fuel cell when undertaking light work but they will draw from the lithium ion battery when peak power is required. He says that the development of the business case for the fuel cell locos and mini-dozers includes elements such as developing a total cost of ownership model that can be compared to alternatives, and evaluating emissions and safety advantages. Underground testing is critical because the degradation of the fuel cell stack needs to be established in the challenging underground environment. We need to track performance over a period in order to establish comparative data against the performance of lead batteries (in the case of the loco), which last between 18 months and three years depending on the nature of the underground environment. Another challenge is the supply and logistics of providing hydrogen to underground locations, says Joseph. We are working with Air Products on developing hydrogen infrastructure solutions for underground testing. Attention is also being paid to developing operating procedures in conjunction with health and safety experts to ensure that underground operation will comply with all relevant regulations. We have completed all the necessary risk assessments in order to get approval from the Department of Mineral Resources for the supply of hydrogen to underground locations. Joseph says that should the business cases prove feasible, identification of partners for local assembly and sourcing will be initiated. With the fuel cell locos, the main focus of surface testing currently underway at Trident SA in Germiston revolves around ensuring that performance metrics meet underground requirements. The loco has performed exceptionally well above ground. The project team is getting up to speed on operating processes such as re-fuelling, discharging the fuel tank and learning the control mechanisms. Attention is also being paid to maintenance processes, including evaluating the design of the casing for the fuel cell power system in order to establish ease of access for maintenance. The team is also working on understanding the design and assembly of the fuel cell power system. In addition, comprehensive risk assessments and development of standard operating procedures are being undertaken, he says. If the growth of fuel cell technology in underground applications grows beyond a certain point, the introduction of on-site production possibly powered by solar photo voltaic panels could be considered. The ultimate dream, given current economic and other challenges, is to look at the replacement of diesel fleets with fuel cell-powered alternatives in decline mines. The dual feed cell stacks used in the power systems of both the loco and mini-dozer are being supplied by Ballard Power Systems. In partnership with Ballard, Amplats is funding the development of a methanol-based fuel cell home generator for rural, off-grid usage. Ballard said in a statement published in June after the Hydrogen + Fuel Cells 2013 International Conference and Exhibition in Vancouver that platinumbased fuel cells provide a significant economic and environmental development opportunity for South

4 Africa by facilitating the provision of clean, reliable and cost-effective power. South Africa holds 75 % of the world s supply of platinum, a key component of Ballard s proton exchange membrane fuel cell products. Andrew Hinkly, Anglo American Platinum s Executive Head of Marketing, quoted in the same statement, says: Anglo s involvement in fuel cell market adoption extends beyond the implications for platinum utilisation to the potential transformational impact fuel cells could have on the economy in South Africa. Fuel cell-based product deployments enable the platinum beneficiation strategy in Africa and create jobs in a key growth sector for the economy. Godfrey Oliphant, South Africa s Deputy Minister of Mineral Resources announced at the conference that the government would provide investment funds to support the field trials of the home generator product being developed by Amplats and Ballard. Projects such as this are key in the development of new technologies which will stimulate the creation of jobs for the South African economy. Methane usage Moving on to the use of methane in power generation, the Sibanye Gold project is the second phase of a methane capture initiative launched towards the end of 2006 at Beatrix to reduce the danger of explosions, cut down greenhouse gas emissions and reduce the mine s carbon footprint by flaring the gas rather than releasing methane to atmosphere. Beatrix worked with carbon project development firm Promethium Carbon to design and develop a system to mitigate the global warming impacts. A project design document was approved by the United Nations Framework Convention on Climate Change in 2008 and a carbon credit project was registered under the Clean Development Mechanism of the Kyoto Protocol in Methane is an explosive greenhouse gas with an environment impact 21 times higher than that of carbon dioxide in terms of global warming and climate change. Dirk van Greuning, Environmental Engineering Manager at Beatrix mine, says the underground methane emission rate at the mine is l/s with the main drawdown target area being the western boundary of the south section where the highest rate of methane emission takes place. A reticulation system was designed and constructed to transport 400 l/s of the gas m underground at a depth of 866 m to surface to a flaring point. Methane at 260 l/s is currently being drawn to generate electricity. The methane in the underground atmosphere is diluted to below explosive levels. Our first intention with the methane capture project was to reduce greenhouse emissions and thereafter to address the power generating issue. With that progression in mind, we provided space and constructed the plinth for four generating sets when the design and construction project for the flaring point was finalised. When the decision was taken to proceed with the onsite generation of power, all we needed to do was to set up a metering column from the flaring point to the power generation site, adapt an Eskom substation and place and commission the generator sets. Two gas-powered generating sets rented from Aggreko Energy Rental in Midrand were delivered to site earlier this year. ADS Projects was contracted to undertake the modifications to the onsite electrical substation with the approval of Eskom in order to feed power back into the grid. Savings of R1,2 million per annum arising from the power generation project accrue because of the The Beatrix methane extraction system indicating the position of the flaring point and the methanepowered generating system

5 differing per kw/h cost rates between our onsite production and the rate we pay Eskom. Beatrix currently uses 82 MW of electrical power per month, says van Greuning. The project is reducing the mine s carbon footprint by 28 % and includes the destruction of methane from underground sources, as well as from several legacy geological boreholes. Chris Davison, Aggreko s Regional Operations Manager for southern eastern Africa, says the gas-powered generators are currently operating at slightly below optimum output pending minor improvements to variables such as gas flow rate, pressure and purity. These variables are being addressed by the mine and Aggreko, and in due course the generators will be operating at 2 MW. A further two gas-powered generating sets will be supplied to Sibanye Gold as soon as the mine is ready to receive them. He says Aggreko installed and commissioned the project with ongoing support provided by a resident service team. The kva units offer full synchronisation and load sharing capabilities as well as being enclosed in bespoke sound suppressive containers linked to an Aggreko 2-22 kv range transformer providing the required 6,6 kv. Aggreko has similar generating sets operating in various parts of Africa. Sibanye Gold derives income from the sale of carbon credits arising from the destruction of natural methane at the mine. The methane project was originally launched by Gold Fields Limited prior to The gas-powered generating sets in position in sound suppression containers at Beatrix. A further two generating sets will be added early next year to bring total generating power to 4 MW (photo: Sibanye Gold). that mining house launching an unbundling process which resulted in the establishment of Sibanye Gold as the owner of Beatrix, Kloof and Driefontein gold mines. Gold Fields Limited set in motion the process to sell certified emissions reductions (CERs), the financial securities used to trade carbon emissions, derived from the capture and destruction of methane gas at Beatrix. The CERs were sold to energy trading company Mercuria Energy Trading SA under forward contracts which will run until 2016 in a deal worth R200 million at the time.