Our operations

Our operations consist of two distinct phases: mining of the uranium-bearing rock or ore, and processing of this ore to produce uranium oxide. The year under review also saw several key interventions that contributed towards our efforts to secure our future. These interventions are highlighted in the following sections.

Mining operations

Mining consists of three main activities: drilling and blasting to break the rock; loading the ore by shovels onto trucks; and hauling it from the pit, either to the Processing Plant if the uranium grade is high enough for efficient processing, or stockpiling the waste in dumps adjacent to the pit.

The uranium in Rössing's lease area is found in very hard and abrasive granitic rock called alaskite. To move the required amount of ore and waste, we have to conduct blasting operations at least once a week. Electric and diesel-powered shovels load the uranium bearing ore onto haul trucks, which then transport the ore to the primary crusher for the first crushing stage. From there, the crushed ore is conveyed to the Coarse Ore Stockpile, from where it is reclaimed and put through several more crushing stages before the processing stage of our operations begins.

Our mining activities in 2010 continued to focus on providing the targeted amount of ore to the plant to keep it running sustainably. Most of this ore came from the bottom of the existing open pit, called the SJ pit, until the end of the year when this mining was finally suspended due to the interaction between the pit-bottom mining and the two new mining areas on the rim of the open pit.

The 52 million tonnes of rock mined during 2010 are in line with the previous year's performance, during which 55 million tonnes were mined – the most mined from the open pit in the past 26 years. We plan to mine nearly 45 million tonnes in 2011.

As stated in last year's review, to ensure a mine life until 2023, an enormous amount of waste stripping must be done in the open pit's north-western and southern areas over the next three years. Waste stripping entails the removal of blasted rock that does not bear sufficient uranium and, therefore, is not economical to process. It is an essential investment in our long-term future, although it places an immense strain on our finances in the short to medium term, because it does not presently contribute towards delivering ore to the Processing Plant. We will continue with a high level of stripping for at least another year.

In addition to supplying the targeted amount of ore to the Processing Plant and stripping the required waste rock, we started mining a satellite pit called SK4, situated about 3km from the current open pit. SK4 will measure about 300m in diameter, which is relatively small in comparison to the existing open pit.

Because the stripping is only required for a relatively short period, the involvement of a contractor ensures cost-effectiveness. The contractor, Basil Read Mining Namibia, had about 300 contract workers in the pit every day during 2010, focusing on stripping waste rock from our SK4 satellite pit, as well as mining in the southern side of the main SJ pit. About 10 million tonnes of the total 52 million tonnes mined in 2010 were mined by the contractor. Most of the pioneering work at the SK4 pit was completed during the year, and therefore, we are set to start mining the ore for processing in 2011.

To ensure continued smooth operations in the face of our increased mining activities spread over different areas, we split the mining area where we have to do waste stripping into two working areas, called the Phase 2 and Phase 3 expansion areas.

We appointed supervisors for both these areas to allow effective supervision. In addition, we recruited and trained the right number of people to operate in the different mining areas, thus ensuring we have enough operators for all the mining equipment.

 

Haggai Weyulu, Production Controller (Supervisor), with drilling activities in the new SK4 satellite pit in the background.

 

Further improvement was achieved in the mining operation by utilising the Mine Monitoring and Control system during the year. This system, which was implemented in 2009, assists operational staff to mine more efficiently. We have seen an increase in the utilisation of the system as people have become more confident using it.

As the system provides us with real time data such as shovel performance, loading rates per hour, truck availability, truck utilisations and all equipment performance, it enables us to quickly identify problem areas and make relevant decisions to improve our overall efficiency. It also makes it possible for maintenance staff to monitor the state of equipment online, and thus to take proactive decisions. In 2010, this online system helped to prevent an estimated N$1.6 million in equipment failure. We were, once again, ranked first among all the Rio Tinto mines with regard to haul truck availability.

Overall, 2010 was a good year in our mining operations. However, towards the end of the year Shovel 11 broke down, preventing us from achieving our target of the number of tonnes mined.

Nevertheless, we set a good foundation for 2011. Much of our mining activities during 2011 will be centred on waste stripping in the Phase 2 and Phase 3 areas of the open pit.

Similar to 2009, extensive management time was invested in recruiting and training new equipment operators during 2010. The new employees had to be oriented towards the mine's strong culture of safety performance and high productivity, and in 2011, we will continue our strong focus on the safety of our workers in line with our Zero Harm activities. As always, the safety of our employees remains our top priority, and continues to be at the very core of all our mining operations.

Processing

The Processing Department is responsible for the extraction of uranium from the ore via a number of stages to produce uranium oxide, which is securely packed and shipped to our customers for further enrichment. The objective of the Processing Plant is to produce planned quantities of uranium oxide in the most efficient and safe manner possible.

At the plant, the uranium-bearing ore undergoes the sequential processes of crushing, grinding, leaching, solid-liquid separation, uranium recovery, precipitation and calcination to produce a saleable uranium oxide product. The crushed and milled ore is leached with sulphuric acid under oxidising conditions to dissolve uranium. After solid-liquid separation, a clear leach solution contains U₃O₈ that is fed to the Continuous Ion-Exchange Plant. The concentrated uranium from this plant is further purified in the Solvent Extraction Plant before precipitation and calcination.

2010 was a challenging year for the Processing Department when compared to the exceptional performance achieved in 2008 and 2009. Due to lower throughput in the plant, a total of 3,628 tonnes of drummed uranium oxide were produced in 2010, compared to 4,150 tonnes in 2009.
One of the key challenges encountered in the processing plant was the availability of major conveyors. For the first time in our history, sequential failure of critical conveyors in the crushing plant was experienced. In light of this, we embarked on a programme to substantially reduce spillage in the crushing plant and improve the management of hydrocarbons to prevent premature failure of crushers. Two new secondary crushers are expected to be on site by the second quarter of 2011.

In addition, an external review of the Fine Crushing Plant's capability is planned for early 2011. The aim of these initiatives is to prepare the Fine Crushing Plant for achieving a sustainable plant throughput of greater than 14 million tonnes per annum by 2013.

One of our plant's most important economic drivers is uranium leach extraction, which is a measure of soluble uranium dissolved from the ore. In 2010, our targeted average daily extraction of 88 per cent was achieved.

The Processing Department has embarked on an improvement drive with the aim of enhancing our process performance. This programme aims to provide the framework for process improvements, which will increase the throughput of ore milled and uranium extraction. We are making good progress on the supporting studies and evaluation activities required for developing a detailed implementation plan and corresponding capital investment plan.

Two years ago, we re-defined the role of our Process Control Centre and raised the profile of the section by introducing a superintendent role and controllers with the core function of steering the operations in the right direction, both operationally and technically. This initiative is bearing fruit after a phase of training and moulding the team to the requirements of the department. The level of reporting during the handover meetings and decision making during the backshifts has improved.

Improvements in the quality of the results issued by the laboratory have also been experienced. This was confirmed by feedback from auditors and internal clients. We will implement the upgrading of the laboratory into a fully automated laboratory, which will improve turnaround time and the quality of the results, during 2011.

The introduction of the heap-leaching solution into the existing tank-leaching process was also successfully managed with minimum adverse impact.

In early 2010, several interventions were implemented aimed at creating a more comprehensive understanding of what drives our costs in processing. The processing management and finance teams held weekly meetings, which highlighted deviations, and actions identified to counter the differences. By the end of the year, the processing cost performance was within our budget parameters.

Key focus activities in 2011 will aim at improving our safety performance and people management. In addition, we will concentrate on the improvement of equipment availability in the crushing plant.
We will also review the metallurgical parameters to counter the impact of low-grade ore and high calc index throughout the year.

Engineering

With the formation of the Reliability Engineering Sections during 2009, the focus area in the year under review was to ensure that these sections, one in Mining and the other in the Processing Plant, were resourced and equipped for value creation to the business. To this end, we recruited and trained the necessary personnel, completing the process by the end of 2010.

The application of defect elimination principles commenced during the year with hydrocarbon management as the predominant theme. Hydrocarbon management is the control of the usage and cleanliness of oils and greases with the prime objective of prolonging machinery life and protecting the environment.

In addition, the following activities were carried out as part of value creation to our business:

• We completed a project to ensure that clean fuel is dispensed to open pit equipment, such as haul trucks and dozers. This entailed the introduction of filtration systems for fuel delivered by road or rail to storage tanks. Fuel is filtered once more before being pumped to equipment. The overall objective of this clean diesel initiative is to prolong the life of components and to increase equipment reliability, since reliable equipment is better placed to achieve production targets. We finalised a similar project, involving the provision of clean lube oil to heavy mining equipment.
• We successfully applied the defect elimination processes in the Fine Crushing Plant with regards to the high oil consumption of crushers. Measures were taken to reduce incidents of water mixing with oil. This extended the life of lube oil in crushers, which in turn resulted in a reduction of oil consumption in this area.
• Kidney filtration of oil in crushers in the fine crushing and rod mill areas was also successfully piloted. We will apply the lessons and results from these trial run initiatives during 2011.
• As part of the overall initiative towards safe driving, we implemented the tracking of speeding events of vehicles in the open pit. As it was observed that the introduction of this monitoring exercise had a positive effect on driving habits, we decided that all vehicles will be fitted with satellite tracking. Fitment commenced in 2010 and we will completed the process during 2011.
• We continued monitoring the way operators use haul trucks. The objective was to improve operator skills and to ensure that haul trucks were operated correctly. Subsequent interaction between supervisors and operators to address performance shortcomings was maintained. These actions, coupled with the application of defect elimination, saw a rise in mean time between failures from almost 40 hours to 50 hours during the fourth quarter. This means that, on average, haul trucks were working without breakdown for 50 hours (over a two day period), instead of 40 hours, as was previously the case.

 

Malakia Povanhu, Fitter, cleaning the mainframe bore area on one of the cone crushers of the tertiary crushing section at the Fine Crushing Plant.

 

In 2011 we will continue to focus on the application and implementation of practices associated with the journey from reactive maintenance to reliability maintenance. This will in turn create value by ensuring that equipment will be able to meet production requirements with fewer breakdowns.

To facilitate this objective, the following will form the core areas of activity during 2011:

• Raise competency levels of Reliability Engineering personnel through workshops, training and coaching to enable them to concentrate on value creation projects.
• Address the low mean time between failures of open pit drills and shovels by applying defect elimination and reliability centred maintenance principles.
• During the gap analysis survey conducted in the fourth quarter under the Sustainable Performance Acceleration at Rössing (SPAR) project, the overall score of asset management in most maintenance sections/workshops varied between 0 and 2. With 5 being the highest best practice score, much effort and time will be spent on narrowing this gap.

Development projects

The Development Projects Department continued to evaluate strategic projects associated with expansion in support of the company's goal of meeting the increasing global demand for uranium.

Our main activities during 2010 were associated with the management of the Heap Leach project as the preferred expansion route, and the key objective for 2010 was to complete a pre-feasibility study to justify moving the project forward.

Together with the Engineering Projects and Innovation Departments, important milestones were achieved, including the commissioning of the pilot plant in early 2010. The plant has proven to be a huge success, both from the test-work and operational perspectives, as well as from the aspect of building support through enhanced awareness and understanding.

After reviewing the pre-feasibility study in September 2010, we decided not to proceed with the feasibility phase immediately, but rather to extend the pre-feasibility study to evaluate key issues identified as potentially having a significant impact on the scope of the project. These include a revised Resource Model, as well as the need for more certainty on the outcome of the Tank Leach Improvement Project, as well as on the outcome of ongoing negotiations to acquire additional resources outside the existing mine lease.

Our first priority during 2011 will be the conclusion of the extended pre-feasibility study for the Heap Leach project. Uncertainty associated with the Tank Leach Improvement project remains a challenge that requires close alignment with development initiatives in order to ensure the best outcome for our business.

If the project proceeds to the feasibility phase, the next challenge will be to meet the increased requirements demanded by a project of this magnitude and the formation of a properly resourced team.

Capital projects

In 2010, the Projects Department focused on the implementation of various capital as well as some operational improvement and refurbishment projects. We put major effort into expanding our engineers' set of skills and developing the department to meet our future operational needs. The majority of the projects were engineered in-house. Project management was also handled in-house, although we appointed contractors for the construction. The main projects are highlighted below.

New acid storage tanks

We identified the construction of a new sulphuric acid storage tank as necessary for mitigating one of the key risks to operations and for ensuring continuity of our sulphuric acid supply. The new tank will be the third storage tank on site with a storage capacity of 15,000 tonnes of acid. The steel tank itself will be 15m high and 28m in diameter. An in-house team of engineers performed all the design and engineering work. We decided to deviate from the conventional method of constructing a tank from the bottom up. The contractor proposed an alternative by using a jacking system that allows the construction of the tank from the top down. Thus the roof was built first and installed on a jacking system, which will lift the finished sections and enable new layers to be installed sequentially until the bottom layer is done. This method was chosen to ensure a higher level of safety and because it requires significantly less scaffolding. We awarded the project to two different contractors for civil and steel works and the anticipated completion date is March 2011.

Acid Plant demolition

We identified the demolition of the Acid Plant as one of our initiatives to continuously rehabilitate the site and remove redundant pieces of plant and equipment. The pyrite-burning Acid Plant was commissioned in 1976 to produce sulphuric acid for our operations. In 1996, the mine which supplied pyrite to us closed down and subsequently, the plant was converted to a sulphur-burning plant. During start-up following the annual plant shutdown in 1999, an explosion occurred in the B Roaster, damaging the roaster and the gas cooler. At about the same time, large quantities of acid became cheaply available on the market, leading to the decision to import acid via ship and rail instead of repairing the Acid Plant. As a result the plant was moth-balled in late 1999. Various methods of demolition were considered and a detailed risk assessment was made to decide which method to apply. Three demolition methods were considered; we chose a combination of manual demolition with a high level of human interface with plant and structures and mechanical demolition by using hydraulic shears, grab and hammer attachments. We successfully completed the project by the end of 2010. In total, in excess of 2,200 tonnes of metal were removed, in addition to 2,400 tonnes of building rubble which included concrete, asbestos and other materials.

Heap Leach pilot project

We initiated this project for the purpose of performing test work and studies to support the Heap Leach Expansion Project. The project entailed the construction of four 50m x 70m pads that could be stacked to a height of 6m, and five ponds for collection of the heap effluent. The infrastructure for the make-up, storage, drainage and hydraulic transport of leach solutions had to be constructed. Each heap can be supplied with a different concentrate of high acid or high ferric leach solution. On the dry end of the plant, we constructed an agglomeration facility with a nominal capacity of 160 tonnes per hour, with automated acid and water supply. We pieced together an overland conveyor from the old redundant ore sorting plant conveyors. Heap stacking was done using ten grasshoppers and one radial stacker. Pregnant leach solution is fed back to the tank leach circuit for stripping. We managed the implementation and commissioning internally, providing an excellent opportunity to expose our young engineers to all aspects of the project.

Nitrosamine Control Plant

We initiated and commissioned this project to reduce acid consumption in the uranium extraction process. Controlling acid content and mixing it, called for the construction of scrub and raffinate supply lines, an in-line mixing system and make-up tank with variable speed control feed pumps to the four elution lines. We designed and commissioned the system in-house, while local contractors performed the bulk of the construction. The project proved a cost benefit saving of 28 tonnes of sulphuric acid per day.

Senmin Flocculation Plant

We, with support from Rio Tinto Procurement, contracted a flocculant supplier for a period of five years for the supply and operation of a flocculation plant on the mine site. The Projects Department designed and managed the construction of the civil works for the plant. The works consisted of foundations for the bulk silo storage and the free standing staircase for access to the service platform on top of the 12m high silo.

Fine Crushing Plant upgrade

We initiated the Fine Crushing Plant upgrading project in 2008 with the main aim of reducing material spillage and dust levels in the plant. The majority of the project required changes to the existing feed systems, shutes and conveyor systems to contain spillage in the plant. We completed the design and ordering of equipment, although implementation of the project has been relatively slow as the plant needs to operate on a continuous basis in order to supply the existing operations. This project will continue in 2011, with the main challenge being to reduce downtime resulting from installation and alterations, while at the same time ensuring optimal availability to the operations.

Dust Collector upgrade

We initiated the Dust Collector upgrading project to rehabilitate all the dust control systems in the various crushing and stockpiling areas. The project entailed the replacement of old dust collectors and the installation of a new type of unit at the Primary Crushers, the Coarse Ore Stockpile, and the Pre-screening and Fine Crushing Plants. Five new dust extraction units were installed at the Fine Ore Stockpile. The dust collector situated at the 500 tonne bin and the wet dust scrubbers at the Pre-screening Plant only underwent minor refurbishments since the two units were recently commissioned. In total, ten new dust collectors were installed. Five new dust monitoring units were installed within the Processing Plant. The projects were implemented on an Engineer Procure Construct basis in conjunction with an in-house project management team, to ensure adequate coordination with existing operations.

Electrical upgrades

Since 2009, we have been in the process of replacing all critical and deteriorated switchgear throughout the plant. We made good progress since the project, which looks set to continue throughout 2011, commenced. The implementation of the project has been, and continues to be, challenging, as plant availability needs to be optimised and ensured at all times. This provides for limited downtime to install switchgear, which calls for very accurate resource and time planning to prevent delays during installation.

 

A view of the new Heap Leach pilot project, initiated for the purpose of test work and studies to support the mine's heap leach expansion plans.

 

Energy efficiency

The mine's annual power consumption is 23MW, making up 7 per cent of the country's total use. If we are to expand, our electricity usage will increase by an estimated 50 per cent. While this projected increase in electricity usage is unavoidable if our business is to grow, we cannot ignore the international drive to reduce energy consumption.

Therefore, in 2008, the Power Efficiency Department was established, dedicated to improve our energy efficiency. The department also sets benchmarks for energy consumption and monitors their implementation, while developing and applying strategies for improving energy efficiency to lower our production costs.

The department investigated various energy reduction projects, with the most significant ones explored in more depth. One of the reduction initiatives during 2010 was the implementation of further Trolley Assist systems in the mining area. We commissioned six new standby generators, successfully bringing our total standby capacity to 22MW. We investigated the possibility of synchronising the generators to the national supply grid in order to ensure smooth transfer between the grid and the standby machines. However, the idea was discarded for technical and financial reasons.

We also conducted detailed studies to determine the viability of using solar power at the mine site. Meteorological data sets were obtained, modelling 11 years of data gathered from satellite information, to determine the site-based conditions which best compare to our local measurements. The study focused on a 50MW parabolic trough system or Central Receiver system, as well as a 10MW photovoltaic system.

In addition to the price, we quantified the reduction in the mine's carbon footprint and took it into consideration, despite the fact that Namibia is not geared for carbon credits yet. The studies confirmed that, at present, concentrating solar technology is not competitive with grid power in terms of cost efficiency, but is expected to be in the long run.
A significant drop in the price of solar panels would increase the viability of the technology. NamPower managed to ensure a stable power supply which in turn resulted in limited unplanned interruptions. The risk of security of supply during the Soccer World Cup period was also well managed in the region, ensuring a secure and stable supply.

In 2011 we will focus on the further improvement, investigation and implementation of energy reduction initiatives to reduce the product intensity and greenhouse gas emissions. We will also conduct detailed studies to ensure security of supply and coordination of protection systems within our business.

Exploration and drilling

A first step in any of our mining activities – and an important one to take when investing in our future – is to understand the geology of our ore body. "What exactly is in the ground?", "How much is there?" and "Where is it?" are the critical questions that need to be answered.

To ensure consistently high levels of production over the next decade, we continued with our drilling and development programmes, allowing us to be well positioned to expand and further extend the life of the mine.

 

Fiina Kuutondokwa, the only female Fitter in the Mining Department, changing an oil filter in one of our shovels operating in the open pit.

 

Our activities focused on the SJ ore body. Deep drilling commenced in 2009 and continued during 2010, giving us further knowledge of how the ore body extends below the current pit and towards the east. Our objective remains to improve geological and geotechnical knowledge beyond the current pit shells, which will impact the mine plan.

We continued working on the resource pre-feasibility study at the SK ore body, which is 3km east of the main ore body, SJ. All SK diamond drill core logging was completed during 2009. Based on this information, a three-dimensional geological model was created. Assaying of drill core to determine its uranium content, and ore characterisation studies to assess the processing behaviour of SK ore continued into 2010. Further studies were suggested and we started with a special ore characterisation drilling campaign at the end of 2010 to confirm earlier assumptions.

We completed the geological mapping and structural interpretation of the mine lease, which improved our understanding of the regional geological controls influencing the location of uranium mineralisation. The completion of the Mine Lease Mapping project will form the framework for all future geological and exploration work on our mine lease. It has already enabled us to target prospective areas not previously identified. To date, we have identified six priority target areas for further work. Drilling in the first of these areas commenced in late 2009 and continued into 2010.

During 2010 we added the second area to the drilling campaign which revealed significant mineralisation inter-sections, leading to an extension of the programme into 2011. New resources are generated by the continuous identification of value adding growth opportunities through the identification, assessment and evaluation of the ore body, as well as additional exploration targets and moving these inventories into higher confidence levels.

Technical infrastructure

We improved security on the plant IT network, which runs separately from the general office network. In addition to the implementation of a comprehensive virus checking system on both networks, we increased the speed on the wide-area network (WAN) by a factor of 10 with the aid of Telecom, Namibia's telecommunications operator. This also allowed us to increase the speed of our internet access by the same factor.

Every day 1 per cent of our workforce is selected for a full drug and alcohol test to ensure that we continue operating in a safe environment. To make the random selection process acceptable to our workforce, we developed an automated drug-and-alcohol selection system with no human interference.

We also improved our intranet structures to be fully compliant with the various internet application technologies and started with the rolling-out of the latest Microsoft systems, like Office 2007.

Our key focus in 2010 was on the modular mining system. In addition to upgrading the reporting system to all our users, we also made changes to the composite block used by the geologists. The Mine Care programme has also been improved in order to provide more complete reporting information.

We also started identifying all documentation which is stored at the mine and our corporate office in Swakopmund, including documents in our archives. The aim of this undertaking is to develop an electronic filing system with enhanced search functions. Working with more than 30 years worth of documentation that needs to be electronically accessible, we expect this mammoth task to be on-going for the next five years.