GOING FOR GOLD
NEWMONT Mining is focussed on long-term growth with Australian production remaining between 1.4 and 1.6 million ounces in 2018.
Newmont Mining regional project director Francois Hardy told The Australian Mining Review that Tanami’s second phase expansion will leverage the mine for future growth and will maximise value from the deeper orebody, from between 1200m and 2600m below surface.
“Tanami Expansion 2 secures the future of Tanami as a long-life, low-cost producer, adding approximately 100,000oz per year (2023 – 2027) and reducing operating costs,” Mr Hardy said.
“The expansion will provide a platform for future growth, with the potential to extend the mine life to 2040.”
Increasing profitable production and extending Tanami’s mine life will have a positive impact on Newmont’s other operations; the improved grade and productivity at Tanami has already helped to offset geotechnical challenges at the Kalgoorlie Consolidated Gold Mine (KCGM) Joint Venture.
Pre-feasibility studies were underway to improve orebody knowledge and optimise the approach to material handling, ventilation, and refrigeration.
Stage 2 will include the construction of a vertical shaft and associated ventilation to optimise processing plant capacity and was expected to take about three years to complete.
Currently costs are estimated between $650 million and $750 million but Mr Hardy said funding decisions have yet to be finalised.
“We will be reaching a full funding decision in 2H of 2019 with the construction phase still being finalised as we progress through definitive feasibility,” he said.
“We will be able to update more detail once we have reached a full funding decision.”
The Tanami site is due to transition from diesel fuel to natural gas, with two power stations and a 450km natural gas pipeline currently under construction connecting the Tanami site to the Amadeus Gas Pipeline.
Following issues with power generation after severe weather in early 2017, the power stations will mitigate fuel supply risks as well as lowering CO2 emissions and reducing power costs.
“The unit cost of power will reduce over a five-year period as site power requirements increase,” Mr Hardy said.
“Carbon emissions will be significantly reduced with an estimated average reduction of 55,000 tonnes of carbon reduced per year over the first five years.
“It’s also expected to reduce power costs by approximately 20 per cent, equating to cash cost savings of approximately $34/oz.”
Capital costs are estimated at between $225 million and $275 million, with annual cash lease payments over a 10-year term beginning in 2019 with approximately $10 million of owner’s costs paid in 2018.
The project Internal Return Rate is expected to be greater than 50 percent at $0.75 AUD.
“Once the new power stations are commissioned, the old power stations will be decommissioned,” Mr Hardy said.
“The new power stations have hybrid generators, that can run on either gas or diesel if required and the risk of site shutdown due to road closures from rain is all but eliminated with a secure all weather gas supply to the site power stations.”
The Tanami Gas Pipeline will be built, owned and operated by Australian Gas Infrastructure Group (AGIG) and has created about 400 jobs during construction.
Mr Hardy said that there was sufficient capacity in the pipeline to provide local communities along the pipeline corridor with the option to connect to natural gas for future power generation or domestic use.
AGIG commercial general manager Jon Cleary said the development of the Tanami Gas Pipeline could also lead to other infrastructure projects in the region.
“This investment in infrastructure in a remote part of the Territory could be the catalyst for further investment which will lead to better opportunities and living standards for the local communities that are nearby,” Mr Cleary said.
Mr Hardy also flagged the potential for solar power at the mine in future.
As the cost for solar generation continues to decrease, solar power may present a competitive and viable alternative compared to remote diesel generation.
“The site is looking at a number of options to expand the life and capacity of the mine into the future,” he said.
“Solar and other renewable options are being considered to provide some of the energy required to power these expansions.
“Newmont has commenced working with all parties to develop the right mix of gas, power and renewables to provide the optimum solution for the site and wider environment.”
Tier 1 status could also be on the horizon.
The Dow Jones Sustainability World Index (DJSWI) recently named Newmont the ‘ Metals and Mining’ sector leader for the fourth consecutive year.
Newmont president and chief executive Gary Goldberg said the recognition was an important reflection of how well the company is doing to create value and improve lives for all of their stakeholders.
“Employees at our sites around the globe know that leading in profitability and responsibility go hand-in-hand, and that their day-to-day work can have positive and lasting impacts on local communities,” Mr Goldberg said.
“Our focus is on the long-term success of our company and doing that requires integrating sustainability into all aspects of our business.”
Mr Hardy said that the focus of the Tanami operation is to grow margins and reserves which translates into a low cost, long-life operation.
“Tanami continues to focus on growing margins and reserves; Tanami Expansion 1 (delivered in Q3 2017) was a big first step in the transformation and has provided a strong foundation for the next phase of growth,” Mr Hardy said.
“Tanami Expansion 2 ( TE2) has the potential to extend life to 2040 and reduce operating costs by up to 10 per cent which would help secure Tanami’s position as a tier 1 asset.”