AngloGold Ashanti has announced finalisation of a five-year underground mining contract at the Obuasi Re-Development Project with Underground Mining Alliance Limited (UMA), a joint venture between African Underground Mining Services (AUMS) and Accra-based Rocksure International, a wholly-owned Ghanaian mining contractor.

The agreement, valued at US$375 million over five years, will help develop mechanised, underground mining expertise within Ghana’s local mining and engineering sector, given that Rocksure, which has a strong track record in open-pit mining, will work closely with Australia’s AUMS, which has significant experience in underground mining. Rocksure will have a 30 % stake in the joint venture and AUMS the balance.

Since commencing operations in Ghana eight years ago, AUMS has trained over 1 200 Ghanaians through a range of mining, engineering, and apprenticeship programmes. In addition, AUMS’s joint venture owner, Ausdrill, has a 27-year history in Ghana through its subsidiary African Mining Services (AMS), training approximately 20 000 Ghanaians over this period.

Combined, AUMS and AMS currently employ more than 1 800 people in Ghana across five projects (one AUMS, four AMS), of whom 95 % are Ghanaians. The two businesses have generated approximately A$2,8 billion of revenue in Ghana, with more than 78 % of profits reinvested into the country.

UMA will provide the full suite of underground mining services at Obuasi, with major capital equipment supplied by AngloGold Ashanti. Works are expected to start in the first quarter of 2019.

In encouraging the creation of the joint venture, AngloGold Ashanti says it is demonstrating its commitment to increasing meaningful local participation in the redevelopment of the Obuasi orebody, which has 5,8 Moz of ore reserves and 34 Moz in mineral resource, and will have an initial mine life of roughly 20 years. Around 550 people, predominantly Ghanaians, will be employed and trained by the contractors for the duration of the contract term, allowing for knowledge and skills transfer.

“We’ve worked closely with the Government of Ghana to progress the redevelopment of Obuasi gold mine into a modern, productive operation, making it a key asset in our portfolio for the long term,” said Graham Ehm, AngloGold Ashanti Executive Vice President: Group Planning and Technical. “This is also an investment in Ghana’s future, particularly in terms of local procurement, employment, training and development and overall mining capacity building, which will benefit the region and the economy for decades to come.”

Obuasi, which has been primarily an underground operation, was placed on care and maintenance in 2016 pending the commencement of the redevelopment project. In June 2018, the Parliament of Ghana ratified the regulatory and fiscal agreements that cover the redevelopment of the Obuasi gold mine and the Environmental Protection Agency issued environmental permits for the mine.

The project implementation will be undertaken in two distinct phases, with stage one comprising project establishment, mine rehabilitation and development, plant and infrastructure refurbishment to enable production at a rate of 2 000 tonnes per day (t/d) for the first operating year. This is expected to take roughly 18 months, with the first gold pour expected at the end of 2019.

The second phase includes refurbishment of the underground materials handling system, shafts and ventilation; and construction of the primary crusher, the SAG/Ball circuit, carbon regeneration, a new gold room and tailings storage facility. This is expected to take a further 12 months and enable the operation to climb to 4 000 t/d. The operation is then expected to ramp up to 5 000 t/d, over the following three years.

Mine production for the first 10 years will be focused on the upper orebodies and is expected to average 350 000 to 450 000 oz at an average head grade of 8,1 g/t. In the second 10 years, production averages 400 000 to 450 000 oz. Total cash costs are expected to average between US$590/oz to US$680/oz, while All-in Sustaining Costs are expected to be between US$750/oz to US$850/oz.

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