Zandile Mavuso | Mining Weekly
Development at JSE-listed gold mining major Harmony Gold’s first offshore greenfield project, Hidden Valley, continues to present challenges because of its remote location and lack of infrastructure, according to the company’s yearly integrated report for 2013; however, Harmony notes that major capital projects are under way to increase mill throughput at Hidden Valley to an initial 4.7-million tons a year.
Situated in Papua New Guinea’s Morobe province, Hidden Valley is a joint venture (JV) between Harmony Gold and exploration and gold development company Newcrest Mining, with both companies having a 50% stake in the operation.
Hidden Valley comprises two openpits, within 5 km of each other, that are currently in production. The first exploits the Hamata gold orebody while the larger second pit exploits the Hidden Valley and Kaveroi gold and silver orebodies.
“These major projects include installing an upgraded crusher and an upgraded oxygen plant, reconfiguring tankage, and increasing interstage screen capacity and raw water filtration. These enhancements will increase production at an incremental cost,” says the report.
Harmony Gold further notes that the JV partners are actively exploring according to the stipulations of the mining lease, and that the life of the operation could be extended if additional resources are identified. “There is ongoing resource definition drilling throughout the year and this is expected to continue in the normal course of business,” highlights the company.
Hidden Valley generated a revenue of R1.163-billion for the 2012/13 financial year, with total cash operating costs, after silver credits, of R309 230/kg. Attributable capital expenditure by Harmony during that financial year was R296-million, which included work on approved mine development, or sustaining capital, projects, process plant projects and new mobile equipment.
In 2012, 3.5-million tons was processed to yield 177 602 oz of gold and 1.7-million ounces of silver, 50% of which was attributable to Harmony.
The company says that a decrease in production for the year reflects a combination of factors, largely outside management’s control, but which will have to be considered when operating in remote areas. It adds that Harmony management’s ability to mitigate the impact of unexpected events reflects the benefit of an experienced team on site and on hand.
After an overland conveyor was recommissioned in September 2011, which increased capacity of the materials handling system, Hidden Valley raised milled tons by 14% in the second quarter of that year. However, production in the ensuing months was severely curtailed by an earthquake in December and exceptionally high rainfall in January and February of 2012, among other natural disturbances, which impeded access to high-grade ore.
This was exacerbated by infrastructural constraints, which included a six-day shutdown mainly due to the lack of grid power, the decision to reduce throughput to remediate large quantities of water on the tailings storage facility, fuel shortages caused by flooding and a 24-hour shutdown to check for damage after the earthquake.
Hidden Valley mine was connected to the national electricity grid in 2011 and is receiving up to 10 MW of grid power at night – which is 100% of its total requirements – and 5 MW during the day. “We are working with the national utility to increase the daytime supply,” says the gold major.
Grid power has reduced the operational costs of trucking diesel to site, with concomitant environmental benefits, and lowered demand of the site’s diesel-fired power station. In terms of the offtake agreement currently in place, the State-owned power utility benefits from securing a substantial customer, which, in turn, will support its infrastructural development and rural electrification programme, says the report.
Hidden Valley’s policy of community engagement and local employment and training continued throughout 2013.
This year’s sustainability report highlights that constructing the Hidden Valley mine has contributed to sedimentation in the Watut river system and raised concern among downstream communities living on the riverbanks.
Two years ago, Harmony Gold and Newcrest JV company Morobe Mining Joint Ventures commissioned studies to assess current and future impacts on this river system. These sediment, biology and acid mine drainage characterisation studies confirmed the impact on the Watut river, as a result of activities at Hidden Valley and human activity along the river.
“Since 2010, we have been making significant progress in reducing mine-related sediment in the Watut river, as initiatives during the review period included the scheduled water-quality monitoring at all local and operational Hidden Valley sites, which continued throughout the year, in line with commitments in the environmental management plan,” says Harmony Gold CEO Graham Briggs.
There is also ongoing implementation of an erosion control and sediment reduction plan; the Hidden Valley pit dewatering and sediment reduction programme, initiated late in 2011; and the removal of large volumes of ponded water from the tailings storage facility – which aims to reduce pond size according to design parameters.
Briggs adds that the lime-dosing system and cyanide destruction plant, which aim to ensure acceptable water quality at the Nauti compliance point, are still operational, while the completion of gap analysis for the creation of a working closure plan is also still ongoing.
The report further highlights that several parallel studies are under way to manage Harmony Gold’s impact on the Watut river, including a technical workshop on acid mine drainage (AMD), which began in March 2012. However, there are no serious AMD issues in the river system at present.
“To prevent any possible occurrence in future, the team is developing a strategy for properly engineered waste-rock dumps, combined with an acid mine drainage treatment system,” states the report.
A scoping study was also completed when Harmony Gold installed a river titration system in the upper Watut river to provide an exact measure of river acidity under various conditions, including rainfall flush events. This will enable the mine to determine the efficacy of waste-rock-dump liming strategies.
Further, studies on the forest dieback in the lower Watut river – from flooding caused by sediment deposition, only as a result of Hidden Valley’s operations – were completed at the end of 2012.
Harmony Gold’s report further notes that there is an ongoing hydrobiology monitoring programme on ecosystem recovery in the upper Watut river.