Modern Mining March 2016

DIAMONDS

to Liqhobong was inadequate and an improved two-way, 8 km shorter, 5,8 km long layered access road was completed in August last year. It has an average width of 8 m and allows trucks with a 20-m trailer and 35-t loads comfortable access to the mine. Unlike previous operations at the site, the new mine – which will require roughly 5 MW of electrical power – has grid power. It has been connected to the Lesotho grid via a 132 kV overhead powerline running over a distance of 28 km, a project which was completed in October last year. Comments Brown: “The cost of the project was R189 million as opposed to the original budget of R165 million. In fact, though, we’ve achieved a very significant saving. When we were planning the power- line project, it was intended that the supply would just be for Liqhobong. We managed, however, to involve Storm Mountain Diamonds, the own- ers of the neighbouring Kao mine, and they agreed to contribute half of the costs of the revised total project. This involved extra expense as the powerline had to be taken over the mountain to Kao but the overall saving to Firestone is R70,5 million.” Once in operation, Liqhobong will employ around 500 people. Current thinking is that Firestone will operate the plant itself but use a contractor for mining. In fact, the documentation for the mining contract has now gone out and Brown notes that – reflecting conditions in mining at the moment – a large number of mining contractors (from as far afield as Zambia) have expressed an interest in tendering. Finally, Brown points with pride to the fact that the Liqhobong project is running within budget. “The capex in rand terms has increased from R1,85 billion to R2,08 billion – mainly because of the additional earth- works required – but the US dollar cost of the project remains unchanged at US$185,4 million,” he says. “This is a considerable achievement given the fact that so many mining projects these days experience quite significant cost over-runs. We are fully funded, incidentally, to comple- tion and are confident that we will remain within budget through to commissioning. “When we were planning the project and in the process of raising money in 2014, the market was very sceptical that a junior like Firestone – with a market cap of just US$35 million at that point – could achieve all that it was claiming it could achieve. I doubt that it is sceptical any more. We’ve proven that we have the ability to deliver on all our prom- ises and I believe Liqhobong – once commissioned – will be seen as a model of efficient project delivery.” Photos courtesy of Firestone Diamonds This is how the Liqhobong site looked several years ago. The old plant seen here was dis- mantled and removed prior to the start of construction of the current project.

March 2016  MODERN MINING  33