Boddington Mine
Boddington continues to be Newmont Goldcorp’s biggest Australian producing mine, and as the company works through its stripping campaign, the site is gearing up across the board to reach full capacity.
IT’S a new era for Newmont Goldcorp, with Tom Palmer taking up the reins as the company’s chief executive officer in October 1.
And while it’s business as usual for the world’s leading gold company, Mr Palmer said he planned on building on Newmont’s proven growth strategy.
“Newmont remains focussed on keeping our people safe, while growing our profit margins through operating, technical and financial discipline,” he said.
To do so, Mr Palmer plans to advance the company’s most profitable projects while investing in exploration across cycles.
Newmont Goldcorp has strong and sustainable portfolio of operations, projects and exploration prospects in the gold sector, with about 90pc of the miner’s reserves located in the Americas and Australia, and other projects in Africa.
These include Newmont’s Boddington mine, in WA’s south east, Australia’s second largest and the world’s fourth largest gold mine.
These assets allow Newmont Goldcorp to sequence its projects to sustain six to seven million ounces of steady gold production annually.
Since 2016, Newmont – which also produces copper, silver, zinc and lead – has generated more than $2.9b in free cash flow and commissioned two new mines and six expansions on four continents, on or ahead of schedule and at or below budget.
Boddington
The original Boddington operation began in 1987 after a 15mt (at 2.7g/t) gold resource was identified in 1980.
The mine continued until the oxide-laterite resource was exhausted in 2001, during which time it produced about 4.6moz of gold and 6.5kt of copper.
Between 1989 and 1991, the mine was the largest producing gold mine in Australia, operating at around 400koz per year.
Newmont bought the operations from Normandy in 2002, taking over the gold stable which included Bronzewing, Jundee, Golden Grove, Wiluna, as well as the Kalgoorlie Consolidated Gold Mines (KCGM) Super Pit, which it operates but owns in a joint venture with Barrick Gold.
At this time Newmont shared the ownership of the Boddington mine with AngloGold Ashanti and Newcrest through the Boddington Gold Mine Management Company, which began investigating the feasibility of mining a 600mt basement rock operation with a 15-to-20-year mine life.
The numbers added up, approvals were sought, and in March 2006 the expansion of the operation was officially announced.
At this time, Newmont bought out Newcrest and became the major owner of the Boddington mine in a 67:33pc split with AngloGold Ashanti.
By early 2009 Newmont was the sole owner of the site, which consisted of the North and South pits which supplied gold and copper hard rock ores, which was produced into a copper-gold concentrate and doré bars.
Boddington was Australia’s second largest producer of gold in the March quarter, yielding 155,000oz.
Current production and expansion
In Australia, the Newmont team has been busy launching its first centralised process control hub, which allows experts at each site to collaborate in resolving problems and raising performance.
Newmont said this year it aimed to produce between 1.5 and 1.7moz from its Australian division, and between 1.4 and 1.6moz in 2019 and 2020, equating to roughly 17pc of the country’s total production.
The slight slump in the coming years can be attributed to a stripping campaign at Boddington to access higher grade ore, which will be completed in 2020.
The mine is set to reach full capacity in 2021 and add another 100,000oz of gold to the Australian production guidance.
Boddington operates two pits utilising three electric rope shovels as its prime ex-pit material movers, with a fleet of 40 production haul trucks, and a fleet of ancillary equipment.
In April this year, Mr Palmer said the company was currently optimising Boddington’s mill maintenance strategy to reduce the number of plant shutdowns per year from four to three.
“This change delayed some production in the first quarter but we expect to recover those ounces over the course of the year,” Mr Palmer said.
“Mine sequencing at Boddington resulted in higher copper and lower gold production.”
Mr Palmer said the company remained on track to achieve its full year targets and take advantage of the resurgent gold prices.
Boddington operations general manager Jim Cooper told Australian Mining Review in March this year that the mine was on track to meet its production target for 2019.
He said the company had also reduced the number of shutdowns from four to three, which has allowed it to significantly reduce downtime and sustain production.
“We are now working to build in more rotable components and more modular equipment so that we make the most of the shutdowns,” he said.
“This also allows us to do the repair work in a controlled work environment that is not part of a process plant.”
The Boddington results could offset any under-performance by the Super Pit, with Barrick already announcing plans to sell its share of the asset as it was not satisfied with current output.
The Canadian company’s share of production from the Super Pit during the June quarter was 57,000oz, up 4pc on the 55,000oz recorded in the previous quarter. But in the June 2018 quarter, Barrick’s share was 96,000oz, 41pc higher than the same period this year.
Technology
The mine recently received approval for a new hydraulic shovel that would give it greater operational flexibility.
“We see continued investment and technology innovation as critical to ensuring ongoing production excellence at Boddington,” Mr Cooper said.
Newmont Goldcorp is also advancing an autonomous haulage study at Boddington that could lead to a fleet of trucks being converted using the CAT command system.
The project is expected to improve costs and mining productivity at the mine, with a full investment decision anticipated later this year.
Newmont expects to reach higher grades at Boddington in the fourth quarter this year, as it progresses its stripping campaign in the South pit.
Though Boddington faced port congestion and subsequently delayed shipments near the end of the June quarter, Mr Palmer said its “little backlog” of concentrate sales from the second quarter flowed into the third quarter.
“We have been able to move concentrate to market very effectively,” he said.
Mr Cooper said that Newmont Goldcorp would continue to invest in new technology at Boddington.
The company has continued to refine the mill, and has utilised the latest technology to further improve its capabilities and maximise the efficiency of the operation, for example in upgrading the screens in the leach tanks in 2018.
Workforce
Boddington has about 1000 direct employees and 800 business partners working on site on any given day.
Some of these employees are local residents, from the towns of Boddington, Williams, Dwellingup and Quindanning. The remainder live in the Peel region or greater metropolitan area and are employed on a drive- in, drive- out basis and stay onsite at the accommodation village.
About 20pc of employees are females ( higher than the industry standard) and 5pc are indigenous.
Boddington has been seeking to improve diversity numbers on- site with targets set for both women and indigenous employees, supported by numerous programs such as cross- cultural awareness training, flexible work arrangements, the set- up of a diversity steering committee, and the onsite women’s professional network.
It has deep ties in the community through initiatives such as the Moorditj Booja Community Partnership Agreement and its Kalyagool Kadadjiny Scholarship – worth $ 120,000 – to Murdoch indigenous students who want to pursue a career in mining.
Performance
Though Barrick has historically reported much higher revenues compared to Newmont, the trend has reversed in recent years with the latter taking over in 2018.
Barrick’s revenue dropped by US$1.8b from 2015 to 2018, mainly due to faster exhaustion of its reserve base which led to lower production and shipments of gold and copper, while Newmont gained US$1.2b during the same period, thanks to higher gold revenues, partially offset by lower copper sales.
In 2018, Newmont’s revenues were US$0.1b higher than Barrick.
This lead is expected to widen to US$0.6 billion in 2019, with both companies forecast to see a rise in revenue benefiting from the 2019 mergers of Newmont and Goldcorp, and Barrick and Randgold Resources.
Newmont’s US$10b acquisition of Goldcorp enabled it to assume the mantle of the world’s leading gold business.