Mining Mirror January 2018 | Page 26

Mining in focus It is a big advantage if the plant and equipment on site is still in working order when the mining operation is brought back on line. initial plans make provision for. “If the shaft has been properly cared for and maintained while closed, that would help with getting over the basic safety hurdles. But to get back to full continuous production is hard work and funding is a function of the business case,” says Lane. Another shutdown? According to Warren Beech, partner and head of Mining at Hogan Lovells, several projects that were put on hold in South Africa, were brought back on stream based on increased demand, higher commodity prices and the general positive outlook at the beginning of the year. “Many of these projects started looking feasible again and soon after were back on track, although the current business environment has once again changed the dynamics,” says Beech. Some projects are relatively easy to bring back on line, and in some cases, can be implemented within 18 months to two years, while bigger projects can take between six to eight years before running at full capacity. Most of the mining projects that were shrugged off in 2016 and are back in the fast lane within the first four [24] MINING MIRROR JANUARY 2018 months of 2017, are coal operations. These include extensions on existing operations that were put on ice, or new extensions within an existing group. Several coal majors have embarked on some form of expansion project or bringing what was believed to be canned operations back on line. According to Beech there are two types of operations that were shelved during the days when the mining cycle were testing new lows. “Existing operations (brownfields) were placed on care and maintenance where it didn’t make sense to mine or sell these mines. Then there were new greenfield projects that were put on hold,” says Beech. Both, nevertheless, had to deal with similar economic challenges, although it is easier to get a shaft – that was put on care and maintenance – going again. An existing mine, compared to a new project on virgin land, has all the vital infrastructure in place and, importantly, would have all the necessary regulatory approvals in place. Moreover, it is easy to source labour in an area where a mine was operating before. That said, the current political and economic situation in the country may force all these re-mining projects to consider shutting down again. The initial decision to restart was based on perceptions of the risks involved in operating in South Africa at the beginning of 2017. Significant political and economic events, in the meantime, have altered the business landscape and revitalised projects may once again be put on the back burner. If this is the case a brownfields project, where the operations were started up eagerly not too long ago, can close again in less than six weeks, although it is not an ideal situation. But positive political and economic change and stable commodity prices, will make seemingly downtrodden projects attractive again. Mothball opportunities Scott says that mothballed operations can be brought back into operation within a short lead time. “The implication is that full benefit can be derived from any sudden commodity uptick, or positive political or economic news,” says Scott. Stockpiled material on site can be sold while the operation is being re-started, which generates an income for the operation to cover some of the