Assmang Proprietary Limited: Finessing a modern approach to iron ore production

It is fair to say that global economics and iron ore prices have had a profound impact on the iron ore mining industry over the past few years. Many companies have had to re-evaluate their positions, operations and levels of investment, with a series of mergers and acquisitions one of the net results.

shutterstock_175361321At Assmang’s Iron Ore Division, opportunity knocked in April 2014, as news broke that the iron ore and ferro-alloy producer owned jointly by Assore and Patrice Motsepe’s African Rainbow Minerals, had struck a deal to invest in an iron ore project in West Africa.

At that time, the initiative made Assmang the third South African mining major to move into West African iron ore in just a 2-year period.

The story reported that Assmang had agreed to take a 19.9 per cent stake in an Australian junior — IronRidge Resources, through an investment of approximately R207 million.

According to Assore (part owners of Assmang) group manager of new business Alistair McAdam, “this is a long-term project which is being driven primarily by the high-grade nature of the deposit and its proximity to the coast. It’s very early days but, if it all works out, you would probably see a mine under construction there in about 10 years.

“This is Assmang’s first move into iron ore outside South Africa, but the decision has nothing to do with concerns about possible future logistical constraints here. It is about the long-term growth of the company.”

The Assmang Iron Ore Division consists of 2 iron ore mines, Khumani and Beeshoek Mine. Both mines are situated in the Northern Cape Province of South Africa, approximately 200 kilometres west of the town of Kimberley.

Khumani’s open pit operations are adjacent to, and south east of Sishen Mine, while Beeshoek open pit operations are situated approximately 7 kilometres west of the town of Postmasburg.

Operations are based around significant iron ore deposits which can be found within a sequence of early Proterozoic sediments of the Transvaal Supergroup deposited between 2,500 and 2,200 million years ago. In general, 2 types of ore are present, namely the laminated hematite ore, which forms part of the Manganore iron formation, and the conglomerate ore, which belongs to the Doornfontein Conglomerate Member at the base of the Gamagara Formation.

The older laminated ore types occur in the upper portion of the Manganore Iron Formation as enriched high-grade hematite bodies. The boundaries of these ore bodies crosscut primary sedimentary bedding, indicating that secondary hematisation of the iron formation took place. In all of these formations, some of the stratisgraphic and sedimentological features of the original iron formation are preserved.

shutterstock_276350849According to the company website: “Erosion of the northern Khumani deposit is less than that of the southern Beeshoek area. This results in Khumani being characterized by larger stratiform bodies and prominent hanging wall outcrops. The downward-dip portions are well preserved and developed, but in the outcrops, the deposits are thin and isolated. Numerous deeper extensions occur into the basins due to karst development.

“A prominent north-south strike of the ore is visible. The southern Beeshoek ore bodies are exposed to more erosion and are smaller and more localized. Outcrops are limited to the higher topography on the eastern side of the properties.

“Looking at the downward-dip to the west, the ore is thin and deep. The strike of the ore bodies is also in a north-south direction, but less continuous. Hematite is the predominant ore mineral, but limonite and specularite also occur.”

The Khumani iron ore mine was previously known as the Bruce, King and Mokaning (“BKM”) Project, which refers to the farms on which the iron ore resources are located. It is located roughly 30 kilometres south of the town of Kathu and approximately 65 kilometres to the north of Beeshoek Mine, in the Northern Cape Province of South Africa.

Khumani Iron Ore mine has superceded the older Beeshoek Iron Ore Mine as the main iron ore producer for Assmang. Although originally designed to produce 10 million tons of export quality iron ore each year, it now has the capacity to produce 14 million tons of product after completion of phase 2 of Khumani Expansion Project.

The iron ore mined at Khumani Iron Ore Mine is exported via the Saldanha Bay Iron Ore Bulk Terminal.

The website describes the history of the mine: “Civil construction began on 05 October 2006, by which time the majority portion of the earthworks was completed. Steel and platework fabrication commenced the following day. Mechanical construction at the Parson processing plant commenced on 09 March 2007, quickly followed by piping, fabrication and erection in May that same year. The month of May proved to be critical in the ever-evolving history of Khumani as the very first blast took place during this month, which dislodged approximately 600,000 tons of ore for collection and treatment. The mine infrastructure packages progressed well and by October 2007, parts of the plant were ready for cold commissioning.

“Hot commissioning, the last major primary testing phase, began at the end of 2007. The first consignment of ore was delivered to the Bruce primary crusher in December 2007. Both the on- and off-grade screening plants were ready to treat ore by late 2007, while construction of the jigs and High Pressure Grinding Roll (HPGR) sections were still in progress. The jig plants were the last element to be finalized with commissioning taking place in July 2008. Assmang was able to bring Khumani to the development and ramp up stage by the early months of 2008.

shutterstock_270394598“The initial ramp up phase came to an end in 2009 and on 12 April 2009 the company announced that the mine had reached its full production capacity of 10 million tons per annum. Assmang was obliged, as per agreement with Transnet Limited, to put 6 million tons of iron ore on the export line during the 2007/2008 fiscal year. With the processing plant unfinished at Khumani at that time, more than a million tons of Run of Mine (ROM) ore had to be transported by road to Beeshoek for processing. The other 5 million tons came from Beeshoek itself. The first train, destined for Saldanha Bay, was loaded at the mine in May 2008.”

Beeshoek mine historically supplied all of Assmang’s iron ore output from1964 until the point at which Khumani came on tap.

The company invested in a number of large-scale infrastructure projects, designed at improving efficiency and productivity on site, which included a full washing and screening plant that was installed in 1975, and a jig plant to beneficiate off-grade ore, which was completed in 2001. Assmang commissioned a new open cast mine, Beeshoek South, in 1999.

The combined resources of Beeshoek North and Beeshoek South, comprising of 5 open-cast pits with supporting infrastructure, were needed to produce the annual iron ore output.  By the early 2000’s, this output regularly exceeded 6 million tons a year. As a result, reserves at Beeshoek became severely depleted.

According to the company website, the mine is in the process of expanding the East Pit and proceeding with the preparation for the development of the Village Pit which will significantly expand the life of mine (LOM) of the operation.

Beeshoek mine is now mainly responsible for supplying iron ore to the local South African market, with small volumes being exported.