Take a Tour of a South African Gold Mine!

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Last week I was over 1,000 feet underground at the Modder East gold mine, near Johannesburg, South Africa.

Actually, for as “cool” as the visit was, the mine was kind of warm.

After a couple hours walking – and at times crawling – underground, my T-shirt was soaked with sweat. I skipped the hotel gym that day.

The Modder East mine is one of the newest gold mines in South Africa. In May 2006, the site was a wheat field. By late 2009, the shafts were sunk, equipment was installed and operators pulled the first gold out of the ground. By mid-2010 the mine was cash-flow positive. Easy, right? No. Not at all. No way!

There are innumerable angles to this story. For now, I’ll just say that despite what I told you in the last paragraph, it’s hard – and I mean REALLY hard – to mine gold. You’ve got to see it to believe it.

Do you want to see real, deep, hard-rock, gold-chasing mining?

First, you suit up in safety clothing – Nomex overalls with lots of reflective patches and rubberized, steel-toed boots. Then you strap on about 25 pounds of other safety gear – headlamp, battery (one size – like a brick!), emergency breathing pack (one size – bulky) and more.

Suitably garbed in battle rattle, you go down an elevator shaft to the first level. The nonstop ride down takes you about as deep as the Empire State Building is high. At Modder East, you then travel through a long, dark, wet, rocky tunnel about 12 feet wide by 15 feet high.

Eventually, you get to what are called “side panels,” where eight-men (and a few women) teams of miners chase “gold reefs” far into the crust of the earth. Using water-powered tools, they drill holes into the rock.

Then a guy called the “blaster” comes along and emplaces charges. Twice a day, the earth shakes with energy from explosions.

After blasting is over, a few brave souls go in to check rock stability. Later, after the all-clear signal, miners move in to haul out the debris. At Modder East, the pay zone is called the “Buckshot Reef.” It’s a quartz pebble conglomerate heavily infused with gold-laced pyrite.

The Buckshot Reef ore zone is about 8-12 inches thick, at best. Sure, it’s rich in gold – around 40 grams per tonne (g/T). But you can’t just mine a 1-foot seam. There’s no technology for that.

You have to remove a lot of rock – mostly below the ore zone, just to get the pay dirt out. But you can’t dig out too much barren rock, because you’re paying for every hunk that you break up and move out. It’s all about cost per tonne.

Thus, this kind of mining involves digging relatively thin “panels” out from the side of the large main tunnel. How thick are the side panels? Well, just to get things started, there’s a very tight, perpendicular, man-sized hole where the driller stands.

This more or less perpendicular hole strikes out from the main tunnel. And off that hole, miners dig out into the ore zone, creating an opening about 4 feet high. All along, the miners have to support the roof with thick timbers.

During the mining and clearing process, large chunks of Buckshot ore (gold-infused pyrite) go straight into the mine carts, to be hauled to the surface. But after that, there’s a lot of fine detritus as well – it’s the remnant debris of the blasting-mining process.

This detritus is sandy, gritty stuff, but it’s also where a lot of fine gold settles out. That is, gold is much heavier than the rest of the minerals in the Buckshot pebble conglomerate. So gold tends to concentrate down toward the bottom of the sandy material – kind of like panning for gold in a stream.

Miners have to get down on hands and knees and literally shovel the fine stuff sideways for collection. Still, it’s worth the effort because that gray sand is among the most valuable ore in the mine. It’s chock-full of gold (microscopic, to be sure).

So by the time the side panel is cleaned out, the bottom surface has literally been swept with a broom, to get every grain and fraction of a gram.

Then the ore goes topside for crushing, separation and concentration. Modder East has no set schedule for final refining and pouring gold, because they don’t want to make it easy for anyone to plan a heist.

Still, it’s accurate to say that about once every week or so, they pour gold. Then the yellow metal is promptly picked up by a helicopter and transported to South Africa’s Rand Refinery for final treatment. That’s where the gold bars, ingots, Krugerrands and such come from.

Safety Underground

As a new mine, Modder East incorporates every form of advanced safety feature. From what I could discern, the mine owners spared no expense in designing safety into the system from the beginning — starting with a mine manager who embodies safety as an ethic and value.

For example, in terms of mine design, all human access is via dedicated elevators. And all ore is removed via separate access tunnels. Thus there’s much less likelihood of someone getting run over by a hauling truck in a dark tunnel.

In terms of operations, and for a variety of reasons that I won’t lay out in detail, the water-powered (hydraulic) equipment tends to be safer than pneumatic or electrical equipment.

On the human factors side of things, Modder East fosters a culture of safety, with an unstinting management focus on safe operations.

At the heart of things, the entire pay and incentive system is designed around safe mining, versus a “hurry up” approach that leads to people cutting corners. Indeed, this particular pay scheme has become a model for deep mining across South Africa.

Topside, there’s a full-time doctor (a real MD) on site. The doc deals with every manner of medical issue – from worksite injuries to ailments like the flu or a skin rash. The idea is to instil a sense of medical respect – related to respect for safety – within the entire workforce.

There’s much more to say, but time constrains me just now. I’ll end by noting that the next time you want to bellyache about your job, consider coming to South Africa and trading places with some of these shovel-swinging miners for a couple of days.

You want hard, hot, sweaty physical labor? Where you’re stooped over for hours at a time, swinging a shovel full of heavy rock and grit? Hey, there ain’t no whining and crying in the mines, OK?

Regards,

Byron King

for The Daily Reckoning Australia 

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Byron King
Byron King currently serves as an attorney in Pittsburgh, Pennsylvania. He received his Juris Doctor from the University of Pittsburgh School of Law in 1981 and is a cum laude graduate of Harvard University. Byron is also co-editor of Outstanding Investments.
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