Modern Quarrying October-November 2015

MODERN

QUARRYING OCTOBER - NOVEMBER 2015 www.crown.co.za

Gold mine tailings for brickmaking Afrimat – building strength beyond borders Impressive GAIN gathering planned for Cape Town

IN THIS ISSUE

QUARRYING MODERN

CONTENTS

14

20

26 Gold mine tailings for

KPAs in the southern African surface mining environment

Aspasa speaks with a strong voice on sustainability

brickmaking – is this viable?

Aspasa has extended an invitation to the Global Aggregates Information Network (GAIN), to hold its prestigious meeting in Cape Town in April next year, and to link up with the Institute of Quarrying/Aspasa annual conference. GAIN is an informal network for sharing information between aggregate associations across the globe for the general good of the industry. 34 Cat mini excavator raises the bar 35 Weir’s customised crushing solution 37 VSD technology improves energy savings 39 Joest Kwatani’s turnkey offer MARKET PLACE

The research in this paper by Dr André Dougall, has identified that five key per- formance areas, namely safety and health, costs, product quality, fleet management, and delivery, should form the basis of any performance monitoring and measure- ment system on a mining operation. The author says a valuable tool to monitor and measure performance is the use of KPAs.

A laboratory-scale study aimed at utilis- ing Witwatersrand gold mine tailings in making bricks has shown that the chemical composition of these tailings is similar to that of the clay material used for commer- cial brickmaking. The authors believe that there is a significant need to develop new long-term uses for mine tailings.

AROUND THE INDUSTRY

40 BLAST FROM THE PAST

4 Flat market conditions for a while 7 AfriSam increases EC cement base 8 Atlas Copco relocates CT branch 9 Smarter energy grid required

ON THE COVER VER

MODERN

Published quarterly by: Crown Publications cc P O Box 140 Bedfordview, 2008 Tel: +27 11 622 4770 Fax: +27 11 615 6108 www.crown.co.za

Editor Dale Kelly

QUARRYING OCTOBER -NOVEMBER2015 www.crown.co.za

JSE-listed company Afrimat has extended its reach into Mozambique, supporting the rapidly developing region with high quality aggregate products for civil and mining projects, as well as drilling and blasting services. It has established quarries in Pemba and Cuamba in the northern region with another quarry planned for Palma. Front cover photograph shows the feeding bin and plant at Pemba quarry in northern Mozambique. See story on page 10.

dalek@crown.co.za Mobile: 0834199162 Advertising Bennie Venter benniev@crown.co.za

Design & layout Adèl JvR Bothma

Average circulation 2 521 Printed by: Tandym Cape

Circulation Karen Smith Publisher Karen Grant

www.modernquarryingmagazine.co.za

Goldmine tailings forbrickmaking Afrimat–buildingstrengthbeyondborders ImpressiveGAINgatheringplanned forCapeTown

The views expressed in this publication are not necessarily those of the editor or the publisher.

INTHIS ISSUE

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MODERN QUARRYING

October - November 2015

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AROUND THE INDUSTRY EDITOR’S COMMENT

Murray & Roberts shows its mettle

L ast month was a devastating one for Murray & Roberts, when a temporary structure in the Grayston interchange collapsed, killing two people and injuring several others. Murray & Roberts is a reputable and well- respected construction company employing liter- ally hundreds of registered engineering and built environment professionals, and credit has to be given to the fact that the company has been open in its dealings with the regulatory authorities and the media within the parameters of an investiga- tion that is far from being completed. The company’s response to the disaster was instant and it immediately established a crisis management team consisting of key board mem- bers. It also mobilised one of its service providers, Independent Counselling & Advisory Services (ICAS) to assist in the provision of behavioural risk man- agement and employee wellbeing; and also tasked ICAS with establishing accurate information on the condition and medical treatment of the injured. To this end, Murray & Roberts undertook, on a non-liability basis, to cover the immediate medical expenses of the injured and to contribute towards the funeral expenses of the deceased. Murray & Roberts has implemented infrastruc- ture projects throughout southern Africa for more than 110 years and is recognised as a leading inter- national engineering and construction group. The group is structured into four business platforms: Oil & Gas, Underground Mining, Power & Water and Infrastructure & Building. The collapse of the pedestrian bridge construction support structure occurred at a project which was being carried out in the Infrastructure & Building platform. Looking at the time frames for the various investigations by the Department of Labour, var- ious investigations by the Department of Labour, the Engineering Council of South Africa (ECSA) and Murray & Roberts itself, CE Henry Laas says it is diffi- cult to commit to a timeframe on the investigation. “If it is a Section 32 investigation, it will be a public enquiry which will take a lot of time, and I believe this will take a couple of months. On the ECSA side, this is primarily focused at its members and par- ticipation by its members in the incident. A lot of reviews have been undertaken on the design of the structure, and the engineers involved in the project form part of the investigation process. “As far as the investigation is concerned, as a professional and ethical company we will be trans- parent throughout this process. As soon as we are in a position to announce the cause of the incident

we will certainly do so. In the meantime as far as the rest of the group is concerned, we continue to strive for engineered excellence in everything that we do and our people are committed everywhere in the world where they undertake work to a very high standard,” he says. Laas has been exemplary in his dealings with the public and the media, many of whom are still baying for blood at this stage. It is rather ironic that the civil engineer- ing industry provides infrastructure to enhance socio-economic development, and this particular temporary structure was installed in the process of constructing a pedestrian and cycle bridge, con- necting the residents in Alexandra to opportunities in the economic hub of Sandton. The fact is that these collapses are civil engi- neering disasters and this was said by The South African Institution of Civil Engineering’s Manglin Pillay (SAICE). “South Africa is yearning for models of ethical behaviour. In relation to accountability, this dreadful incident is an opportunity for the civil engi- neering and construction industry to showwhat true accountability and transparency is all about. This is also an opportunity for ECSA, SAICE and the various engineering bodies to showmettle when it matters. “We need to clearly communicate the stages and processes of accountability to the nation, and we have to take swift action after the investigations are complete,” Pillay urges. “In so doing, we also help to educate the millions of respectable South Africans who want to do something about malad- ministration and corruption.” He asks what the engineering fraternity is going to do to redeem itself. “What are we going to do differently, in a revolutionary way, to redeem our honourable profession? SAICE is the learned society and technical leadership hub of the profes- sion, involved in the knowledge base and network of civil engineering. We will continue to be the voice of the profession and to disassemble knowl- edge and wisdom with a view that these types of disasters never happen again.” But frankly, is this enough? If a company like Murray & Roberts can go through a tragic experi- ence such as this; what about the public sector and municipalities who very often have no engineering practitioners? There is no doubt that they are in a very vulnerable position for further construction disasters.

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AROUND THE INDUSTRY

In this article, a panel of members of Conmesa – the Construction and Mining Equipment Suppliers’ Association – reflects on market conditions and takes a look at the period ahead. Flat market conditions for a while

shown a heartening upturn in business, with positive rewards for machinery man- ufacturers and distributors. But not everyone is out of the woods. With banks now offering limited finance options, there is a growing trend to turn away from the purchase of new equip- ment. What’s increasingly popular is the purchase on auction of good quality used assets and more ‘rental-to-purchase’ type of deals. And of course this makes good business sense. This move is enhanced by end users commissioning OEMs to maintain equip- ment through formal service and mainte- nance contracts. Obvious benefits include no excessive purchase costs, extended service life of every machine, reduced maintenance requirements and minimal downtime. The local market also shows a steady increase in demand for compact equip- ment, with more contractors opting to purchase compact wheel loaders and mini excavators, rather than a standard backhoe loader. This has been in vogue globally for many years – South Africa is only now in sync.

A ccording to Conmesa chairman Stefan Otto, the construction and mining sectors in South Africa, which were booming pre-2008, have shown sluggish growth since 2010, and the current flat market conditions look set to stay with us for a while. “We were hoping to see an upturn in the economy in the next quarter, but with depressed worldwide commodity prices, low inves- tor confidence, concerns about further strike action, instability of the workforce and political uncertainty, the crystal ball remains cloudy. There is no rosy picture. “The government’s inability to roll out its much-flaunted capital and infrastruc- ture programmes has delayed the award of tenders and halted potential work. New regulations have increased the costs of doing business and have further inhibited investment in South Africa. Not to men- tion the weakening rand,” he says. “ This is without the impact of

excessive wage demands that result in lower employment and Eskom’s con- straints on power which translates into lost production. Added to this, we can- not count on the recovery of commodity prices any time soon, given the financial bubble in China. The costs of getting commodities out from beneath the South African ground, are simply too high. “We predict conditions to remain low or even decline further, only starting to pick up again at the beginning of 2016.” But it’s not all doom and gloom around the CONMESA table. Members believe if union issues can be resolved ahead of pending strike action, South Africa will see an upturn in the mining sector and if the government’s construc- tion infrastructure development pro- gramme is accelerated, there should be a surge in this sector. And for those who can’t see the wood for the trees, the forestry industry has

Table 1: Overall construction and mining equipment quarterly sales (units) – South Africa (2010 Q1-2015 Q1).

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AROUND THE INDUSTRY

What is interesting is that companies are focusing on efficient technologies by implementing mechanised tasks, rather than an outdated labour-intensive site. This could of course be linked to ongoing strike action permeating the struggling economy. Conmesa members conclude that construction andmining sectors, together with government’s contribution, stimula- tion and support, certainly need to con- tinue to dig deep to turn things around to be profitable and sustainable in this country, before we cast our eyes across borders into Africa. www.conmesa.co.za Avi Bhoora has been appointed construction materials executive at AfriSam effective October 1 this year. He brings to his new posi- tion a wealth of knowledge and experience gained from a career spanning over 35 years within the construction materials industry. Aggregates China 2016 – the 2 nd China International Aggregates, Quarrying Tailings & Construction Waste Disposal Exhibition (for- merly known as Sandstone China 2015) – a leading crushing machine event in China, which will be held in China Import and Export Fair Pazhou Complex, Gunagzhou from March 9-11, 2016. CESA is alarmed by the continuing water and sanitation challenges at Madibeng Local Municipality in North West and says the negative impact caused by the high rates of vandalism and theft to water infra- structure is adding to the already critical challenges the country is facing.

Table 2: Overall construction and mining equipment moving 4Q sales (units) – South Africa (2003 Q1-2015 Q3).

The annual Lafarge Community Trust Awards for Excellence took place recently at EH Mogase Primary School in Bodibe Village, NorthWest. The ceremony was used in celebration of the successful completion of large-scale school infra- structure projects executed by the Lafarge Education Trust, which has seen major improvements at 10 schools in Bodibe. Construction work on the new Port of Saldanha offshore supply base general maintenance quay owned by Transnet National Ports Authority has officially begun. Upon completion, the Port of Saldanha offshore supply base will pro- vide a base for goods to be received, waste from offshore exploration, pro- duction activities and facilities for loading and shipping of equipment, stores, goods, bunkers and drilling fluids.

Professor Cuthbert Musingwini, the head of the University of theWitwatersrand’s School of Mining Engineering, has been elected president-elect by the Southern African Institute of Mining and Metallurgy (SAIMM).

Condition monitoring specialists WearCheck and her Set Point Group sister companies have been acquired by Torre Industries, a dynamic JSE-listed indus- trial entity underpinned by strong brands and strong products.

Almost 20% of senior executives in the top JSE-listed mining companies are women and 17%of board posts are held by women. TheWomen inMining South Africa (WiMSA) report states:“This is better than the global average of 11,1%”. The industry as a whole in South Africa is represented by 14%women (at board level) and fewer female CEOs. The South African Mining industry relative to the rest of the world is a success story, as globally 21% of graduates hired are women.”

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AROUND THE INDUSTRY

AfriSam increases EC cement base

and distribution of quality concrete. With its sound infrastructure, techno- logical prowess and committed people, Concrete 4 U is well positioned to expand its customer base, offering quality prod- ucts and support services throughout the region. “The relationship with AfriSam is in line with our progressive strategies, allow- ing us and our customers to benefit not only from the production and supply of

quality products, but also with the inte- gration of technologically-advanced sys- tems,” says Deon Fourie, MD of Concrete 4 U. The AfriSam and Concrete 4 U affil- iation forms a strong foundation for continued future expansion within the construction industry as a whole, creating job opportunities and security in tandem with future economic development. www.afrisam.com

AfriSam, a major producer of concrete materials in Southern Africa, has acquired an equity stake in Port Elizabeth-based Concrete 4 U, expanding its footprint in the Eastern Cape. The group has an existing well-estab- lished cement presence in the Eastern Cape through its depots in East London, Queenstown and Port Elizabeth, which are supplied from its highly-efficient integrated cement plant in Ulco, in the Northern Cape. This acquisition augments and strengthens AfriSam’s ability to pro- vide superior quality concrete solutions to its customers in the region. “The equity acquisition in Concrete 4 U expands AfriSam’s readymix foot- print in the Eastern Cape region and fully aligns with our growth strategy,” says CEO Stephan Olivier. “We are making good progress with our growth plans and this transition will also be further strength- ened by our planned grinding plant at the Coega Industrial Development Zone (IDZ). Our intention is to begin construc- tion as soon as we have received a pos- itive environmental authorisation,” he adds. Established in 1994, Concrete 4 U is, in its own right, a leading producer of qual- ity readymix concrete in the region. With distribution plants in Port Elizabeth, East London, Mthatha and Port St Johns, the company prides itself on the production

Concrete 4 U is a leading producer of quality readymix concrete in the Eastern Cape.

Weir appoints group executive TheWeir Group PLC has appointed Ricardo Garib to its group executive as divisional MD of theWeir Minerals Division effective January 1, 2016. Ricardo will succeed Dean Jenkins, who will join the board as COO. Ricardo has led Weir Minerals’ operations in Latin America since 2001 having previ-

Ranked as one of the world’s largest mining and industrial shows and southern Africa’s biggest trade exhibition, Electra Mining Africa 2016 will be showcasing the min- ing, industrial, electrical, machine tools and power industries. The show takes place at the Expo Centre, Nasrec, from 12-16 September 2016. www.electramining.co.za Electra Mining 70% sold

ously been MD of the business in Chile. He is a grad- uate mechanical engineer, VP of the Association of Industrial Mining Suppliers and an elected coun- sellor for the board of the Chilean Federation of Industry. Founded in 1871, The Weir Group PLC is based in Glasgow, Scotland, and is one of the world’s lead- ing engineering businesses. Weir designs, manufactures and services innovative solutions for its minerals, oil and gas and power customers. www.weirminerals.com

Ricardo Garib takes up the position as divisional MD of the Weir Minerals Division in January next year.

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AROUND THE INDUSTRY

Atlas Copco relocates CT branch

Sharing single premises also reduces oper- ational costs for the two businesses.” Jacobs and Marthinussen agree that training is an essential part of the Cape Town branch’s future success. “We must keep abreast of the latest technologies to ensure sustainable provision of world-class quality product solutions mirrored by after- sales service support.” The branch enjoys the full support of the Atlas Copco organ- isations in Johannesburg and Belgium. Looking to the future, Marthinussen says that the markets in general continue to plateau with only the Eastern Cape (EC) showing slight positive growth. He expects this to increase significantly with the northern EC road rebuild already start- ing to take off and the imminent N2 EC rebuild andWestern Cape N1/N2 re-align- ment and rebuild which is due 2016/2017. www.atlascopco.co.za “The stability of Namibia’s society and economy means that operational risk is very low – so we believe that there is plenty of scope for local businesses to become more competitive,” he says. Government is in the process of developing the New Equitable Economic Empowerment Framework (NEEEF) to ensure that Namibian resources are shared in an equitable and sustainable way. The policy also wants to see the implementation of measurable policies of redressing and redistributing wealth. It is hoped that NEEEF will help remove bar- riers of socio-economic advancement to enable previously disadvantaged persons to access productive assets and opportu- nities of empowerment. In another development, BME is fur- ther raising the technology bar in Namibia by establishing a technical division at its Swakopmund office. The unit will have a special focus on introducing BME’s highly specialised mobile testing vehicle, used for auditing purposes on its drilling and blasting sites. Two graduates have already been employed and are in the process of being trained to take up positions in the techni- cal division. www.bme.co.za

The relocation of Atlas Copco South Africa’s Cape Town branch to larger, pur- pose-built premises at No 10 Manhattan Street, Airport Industria, combines under one roof the previously separately- housed business areas of Compressor Technique and Construction Technique’s Road Construction Equipment (RCE) for improved efficiencies and customer ser- vice through shared synergies.

The Cape Town branch, originally established to represent Atlas Copco and Dynapac Equipment, attended to new equipment sales and aftermarket support of customers in the Western Cape. It con- sisted of two separate sites with trading premises for the Compressor Technique business based in Montague Gardens and the RCE business located in Stikland, which later moved to Blackheath in Q4 2009. “The positive growth experienced by both operations over the past few years necessitated larger premises,” states Neville Marthinussen and Wayne Jacobs, respective Atlas Copco business line managers for Construction Technique, Dynapac RCE and Compressor Technique Service Division. “It made sound busi- ness sense to purpose-build a facility that meets the requirements of both opera- tions and that will allow for future growth. experience necessary to run a high-per- forming and independent operation.” The office serves customers in the copper, gold, uranium and zinc sectors, as well as smaller quarries and road aggregate providers – supplying them with cutting-edge blasting expertise and products. BME is a leading supplier of bulk emulsion explosives in Africa, as well as initiating systems, electronic detonators, and blast planning software. “Our priority in Namibia has been to contribute in every way possible to local economic development, giving us the resources and network we need to oper- ate independently within the country,” he says. This has meant empowering local people to lead and manage the business, and promoting local enterprise through the business’s supply chain. “We are also working on a partner- ship which will see the launching of a Namibian-owned transport company to serve some of our logistics requirements between Swakopmund and our Namibian customers,” Visser says, adding that it is vital for the empowerment of local busi- ness people in Namibia that service pro- viders develop their ability to compete with counterparts in South Africa and other neighbouring markets.

Atlas Copco’s Cape Town branch has relocated to purpose-built premises in Airport Industria.

Local economic development is key

BME Namibia is building its local skills, technical capacity and supply chain to consolidate and grow its position in Namibia’s mining sector, according to Albie Visser, BME’s general manager for South Africa and Namibia. While there was a slow-down in the Namibian mining industry in 2014, exciting new projects such as B2Gold’s Otjikoto gold mine and Weatherly’s Tschudi copper mine have recently come on line, lifting the outlook for the sector. Among other projects in the pipeline are Swakop Uranium’s Husab mine, expected to produce by end-2016. “We have built a presence in Namibia since 1994 based on our confidence in the country’s people and its minerals,” says Visser. “Our team of 37 staff mem- bers at our Swakopmund head office are all Namibians, with the training and

Albie Visser, BME’s GM for South Africa and Namibia.

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AROUND THE INDUSTRY

Smarter energy grid needed South Africa would get a much better return on its energy investments if it planned a smarter and more flexible electricity grid, Institute for Security Studies (ISS) researcher Steve Hedden believes. Government’s response to power

“Electricity generation is thus becoming decentralised and intermit- tent, and the line between consumer and producer is blurring, Hedden says. At the same time, the electricity sector is transitioning away from a centralised monopolistic model, with new players taking on roles and responsibilities his- torically controlled by Eskom. The grid used to handle only a one-way flow of power from producer to consumer. Now it has to accommo- date potentially millions of small-scale producers feeding energy into the grid. Small-scale residential power genera- tion from solar panels could account for 30 GW of electricity-generating capacity in South Africa by 2050, but its contribu- tion today is retarded by an absence of clear policies and regulation. “A more intelligent grid would be the result of investments in grid effi- ciency, and better electricity planning, operations and policies,” Hedden adds. www.issafrica.org

the grid at all, though transmission was included in an IRP update in November 2013. “Grid planning can’t be an after- thought. It has to be built in from the start,” he says. Planning the grid was much easier when a few big power stations pro- vided energy mostly to a few big cit- ies, with one organisation responsible for the entire system. In South Africa it was Eskom producing electricity at coal-fired power plants in Mpumalanga, the largest net supplier, and delivering most of it to the economic heartland of Gauteng, the largest net consumer. The source of power is shifting. By 2040, Limpopo’s new coal-fired plants will make it the largest net supplier; and new gas and renewable capacity will make the three Cape provinces net producers. Planners must also now consider the rise of renewable energy, and the addition of independent power produc- ers (IPP). On top of this is small-scale res- idential generation as frustrated citizens install their own rooftop solar panels.

shortages and load-shedding has been a thrust towards more power generation from coal-fired power plants, oil and gas, renewables, and potentially a fleet of new nuclear power stations. “But fixing South Africa’s energy crisis is not just about gen- erating more energy,”Hedden says at the Pretoria launch of a new research paper called Gridlocked. “It doesn’t make sense to invest heavily in generation capacity without also rethinking transmission and distribution.” Energy planning in South Africa has neglected the key element of how elec- tricity moves from generation to con- sumption, Hedden maintains. The Integrated Resource Plan for Electricity 2010–2030 (IRP 2010), adopted in March 2011, did not address

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ON THE COVER

Afrimat – building strength beyond borders

approach that it would not enter the market unless it had been awarded a fairly substantial contract. “We bid primarily to Portuguese companies as well as other international companies. We had a busi- ness plan and had found a source but we had no presence. At that stage, our presence was flights into Mozambique and handing out business cards. This low-risk approach didn’t work for us and forced us to revisit our strategy.” Afrimat believes that Africa is its most natural move, and considered Nigeria, Ghana, Zambia, and Mozambique again.“We walked away from Nigeria and Ghana for various geographical and other challenges; Zambia had options but we couldn’t find the right partnership agreement and the eco- nomics didn’t work for Afrimat. “We returned to Mozambique having identified the Tete-Ncala railway line as a viable opportunity; not in Ncala itself but in the hinterland where work is required and where the offerings are not that many. We have been successful in our bid for a con- tract, and this was our first step into Mozambique. “At the same time, the Cabo Delgada Liquified Natural Gas (LNG) project, spearheaded by two international companies, Anadarko and ENI, came to the fore,” he says. The project is advancing an onshore LNG park

JSE-listed company Afrimat has extended its reach into Mozam- bique, supporting the rapidly developing region with high quality aggregate products for civil and mining projects, as well as drilling and blasting services. It has established quarries in Pemba and Cuamba in the northern region with another quarry planned for Palma. Dale Kelly chats to Gerhard Odendaal, MD Afrimat Con- tracting International about the reasons behind this move.

N ew business development is a key component of the group’s growth strategy. Under the leadership of Carl Malan, the dedicated business devel- opment team is focused on identify- ing and pursuing opportunities in existing markets, as well as in anticipated new high growth areas. “With our diversification policy at Afrimat, we made a clear decision to start investigating and procuring an international income stream in addi- tion to our South African base. This is a broader Afrimat strategy and we targeted specific areas in Africa with Carl, myself and other team members travelling into Africa,” Odendaal explains. The senior management team visited Mozambique some four years ago, with the

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ON THE COVER

Panoramic view of the Pemba plant which has been upgraded with components from Afrimat and developed into a 150 t/hour crushing unit. Afrimat has duplicated a similar 250 t/hour plant, which is due for commissioning shortly. Ultimately Pemba will soon have a 400 t/hour capacity.

our springboard and basis for offer- ing whatever ser- vices are required in the nor th of Mozambique. We have consciously not entered into the more popu- lar southern areas like Maputo as these have been overtraded by the Chinese and other entities,” Odendaal says. “Afrimat fol- lows a strategy of identifying a dis- tinct advantage when entering into new areas and this is either that we are the first or only sup- plier or that we pro- vide a product that is distinctive and not readily avail- able. We are trying to service that crite- rion in our strategy and we believe that we have got it right so far. “We are currently involved with tenders on mega projects like the LNG and also others related to the ports; there are other construction port efforts that are not necessarily related and also mining infrastructure.” He says that Mozambique is either underde- veloped or neglected. Mining-related activities are

on the Afungi Peninsula in Cabo Delgado prov- ince. This is a first-of-its-kind LNG facility on the east coast of Africa. The independently-certified proven reserves are sufficient to support two initial LNG trains, each with a capacity of 6 Mtpa, as well as to accommodate expansions, including multiple additional trains capable of producing some 50 Mt of LNG per annum in future years. Mozambique has been described as the third-largest natural gas holder in Africa, after Nigeria and Algeria. “What we learnt four years ago was that if you are not there, you are not considered seriously. Afrimat has taken a leap of faith in securing a solid partnership agreement with a local business entity in Pemba, and we now have access to various quarry resources. We have never reneged on our strategy that we would do this on a partnership basis, and we now have a local partner as well as other strategic partners,” Odendaal tells MQ . Afrimat has established an up-and-running operation at Pemba, which is south of the main LNG project and is busy looking at including readymix and possibly precast. It will be able to supply a complete offering to this project once it kicks off. “We have invested a lot of effort and money into getting these resources because on the Mozambican coast, the first 80-90 km hasn’t got rock. It’s not like South Africa where we have an abundance of reasonably to high quality rock even on the coastal platforms; so one has to be extremely proactive in how one sources this rock,” he says. “The rock that one finds, is in some cases, marginal and of low quality, but we believe that we have endeavoured to secure the best.” In terms of the company’s progress in phases, it has found the partnership, has established an up-and-running operation and has a key workforce that comprises expat and local personnel. “This is

Afrimat’s managing director Contracting International, Gerhard Odendaal (photo Dale Kelly).

Afrimat has sourced a country manager with vast experience and business acumen in African projects. Expat Canadian Gerhard Hurst represents Afrimat for bidding and business development. He is pictured with Gomes Manuel, who is the logistics coordinator.

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centred in the north west of the country, which is a considerable distance from the ports. “So proper linking up to these ports for ore export purposes creates those opportunities.” How do you commit when the projects have not kicked off, MQ asks? The only tangible project that is currently running is the Tete-Ncala railway with the Tete coalfields, which is also experiencing world economic pressure at the moment because of the low coal prices. The railway lines are not finished and the mining houses are experiencing financial difficulties. “Coal is not the most popular commodity at the moment and with Brent crude at optimum low lev- els, we sense that there is also reluctance for 100% commitment. But the LNG project is still due to happen in terms of its broad spectrum time lines. The developers declare that they will be ready for initial exports in 2020 and based on that, we are slap bang right and ready.” Afrimat has taken the approach to start reason- ably small with local partnerships and has gone in with a medium-sized investment. “Together, that gives us a reasonable footprint,” Odendaal says. “We have to be cautious because should the world economy fall flat and none of these projects come to fruition, we have to contain our expenditure in terms of money invested. So, we are playing the game of understanding when to strike and when to invest, and to be nimble and flexible enough to react quickly should these opportunities arise.” The company has invested in several local part- nerships that are forged but not practised at this stage. “This is so that we can call on these local South African partnerships, some being competi- tors or suppliers in some instances, whom we have worked with for many years. We have rallied these troops together and are ready to call on them. We have adopted this strategy to not engage in all of these projects alone. Our part of it could poten- tially be in excess of a billion rand in value add and bearing in mind that Afrimat is only a 1,5-billion rand company, one has to forge certain partner- ships to mitigate this risk.” He says these are exciting times because Afrimat has moved out of its comfort zone. In terms of the quarry, the company has part- nered with Ayleek Industries, a local Pemba-based quarry operator. “This is a really small operation and we have upgraded the plant with components from Afrimat, and developed this into a 150 t/hour crushing unit, which is up and running and trading commercially. We have duplicated a similar 250 t/ hour plant which is due for commissioning shortly. Ultimately in Pemba, we will soon have a 400 t/ hour capacity,” Odendaal confirms. Afrimat has sourced a quality country manager

Afrimat has established an up-and-running operation at Pemba, which is south of the main LNG project in Northern Mozambique.

Photographed at the Mitande site, from left: Issa Bernado Neves Issa; Leonard Moine; Sam van den Berg; Johan Roux; and Rikus Nortje.

Afrimat has contracted a mobile unit up to Mitande where it has a contract to supply some 280 000 t of railway ballast stone for Mota Engil.

From left: Gomes Manuel, logistics coordinator; Nico Botha, production manager at Pemba; and Kelly Shanahan, administrative support.

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ON THE COVER

with vast African experience. Expat Canadian Gerhard Hurst is heading up the operation and representing the company for bidding and busi- ness development. “We are able to support him from our Business Development division but also supported by the company I represent, which is Afrimat Contracting International.” “We have a contracting company that does contract drill, blast and crush work and we have partially drawn from that resource base in terms of supervisory and managerial staff and equipment, which we have transferred to Mozambique to sup- port the operation. They are providing the services in Cuamba and thus far in Pemba in terms of yellow equipment, loaders, dumpers, drillrigs, generators, etc, and all our in-house manufacturing capacity will be used to preassemble the plants in South Africa and carry them over to assemble and com- mission in Mozambique,” he says. “We have chosen the freight option at this stage to remain flexible and because it is also more inside our knowledge area. We are not really into shipping and ship freight. Obviously that will come into play when we engage in larger 60 t capacity equipment.” At this stage, Afrimat is utilising 30-40 t equipment. Odendaal says the Pemba quarry is Afrimat’s base and from there it services the Cuamba, Mitande and Itepala sites which are near Malawi. The railway line crosses from Malawi into Mozambique. Afrimat has carried out the first phase of a ballast production contract in Cuamba and has moved another unit up to Mitande where it has a contract to supply some 280 000 t of railway ballast stone for Mota Engil, a Portuguese group focused on civil construction, public works, port operations, waste water and logistics. Travel into these areas is a constant for Odendaal and the team, with internet and tele- phone communication on a par with South Africa. The challenges are logistics and bureaucracy on the borders. Using subcontractors for transpor- tation, he says it is not company strategy to be involved in transport in Mozambique. “The fac- tors of risk are too high, the factors of cost are too high, and the local law in these provinces has its own set of rules. We have to move between two or three provinces at a time when our low beds travel between sites, so we are happy to outsource that side of the business. “Obviously this whole Mozambican move is a key strategy for the company,” he says. “Afrimat has a very flat management structure but through that pyramid, we manage this effort very closely. We utilise our corporate jet when going into the remote regions. We also don’t hesitate to use the

The Cuamba stockpile and plant.

commercial airlines, which are a much cheaper option. However, for the sake of convenience and for rapid response, we have a jet available to fly to Cuamba where we can support our staff and their efforts. All checks and balances are done through site visits and we power this up with visits from our senior executives.” Talking further about Gerhard Hurst, he says Afrimat employed him for his relevant experience and business acumen in African projects. Hurst is a professional engineer and business developer and is supported by various seconded personnel from South Africa, which include key drilling, blasting and supervisory staff.“Gerhard’s wife is a very capa- ble administrator, so we have a sound husband and wife team managing local affairs.” Odendaal says Afr imat ’s Contrac ting International division provides a full package of drilling and blasting solutions for the construction and junior mining industries. It offers blast designs for bulk blasting in quarry and opencast mining and specialised restricted blasting in built-up areas.“Our services include mobile crushing, screening, drilling and blasting and bid preparation and contractual services. Using our expertise in fields such as drill- ing and blasting, load and haul, crushing and ready- mix concrete processing, the division prepared bids for major clients in the construction industry. “We strongly believe that the strength of Afrimat has extended its reach to support Mozambique’s growing economy, and we are now laying the foundations for new success by bring- ing world-class African products to more countries in Africa,” he says, reiterating that the company is proceeding cautiously with its expansion into Mozambique. It is taking the rest of this financial year to stabilise this business, install the capacity and get everything up and running. “The moment we start repatriating profits out of there; once profits are available to repatriate, then we can talk about the next move into Africa. We would rather go too slowly and do it properly than rush in and burn our fingers.”

Report by Dale Kelly, photographs courtesy Afrimat

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PERFORMANCE MEASUREMENT

The global resources and commodities market has become highly competitive. While Southern Africa’s abundance of mineral resources is still unrivalled, it has lost its dominance in terms of production. The sustainability of Southern Africa’s mining industry is increasingly becoming dependent on its ability to manage the perfor- mance of its operations well. A valuable tool to monitor and manage performance is the use of key performance areas. ‘Key Performance Ar- eas (KPAs) are those areas of performance that are reflected explicitly or implicitly in the vision and strategies of the organisation’ (Barker 1997). KPAs in the southern mining environment By: Dr AWDougall, University of Johannesburg

T he terms KPA and KPI (key performance indicator) are often used interchangeably – whether correctly or erro- neously is debatable. ‘Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organisation’ (O’Neill, 2007). Each KPA probably has multiple KPIs associated with it. The state of implementation of that KPI will determine where the organ- isation is measured. Mostly, an aggrega- tion of all the KPIs for a particular KPA determines the final KPA measurement and status. It is the successful measure- ment and management of KPAs and their associated KPIs that will give southern Africa the ability to compete successfully in the current market, and indeed ensure its sustainability going forward. This paper reviews the KPAs in the southern African mining delivery envi- ronment. The KPAs discussed have been selected by comparing KPAs of several mining houses engaged in surface mining operations in Southern Africa and then identifying those KPAs that are common to most of them. The study has relied on the judgment of the authors in deciphering the different

usage of the terms by the various organ- isations, in order to align them with the proposed definitions in this paper. Similarly, some of the KPAs are extracted by virtue of them being reflected implic- itly in the vision and strategies of the organisations. Performance measurement There are essentially three reasons to measure performance (Marr, 2014): to learn and improve; to report externally and demonstrate compliance; and to con- trol and monitor people. The common focus of mining oper- ations has been on measuring perfor- mance in order to control and monitor people. Although this is an important rea- son for measuring performance, the pri- mary reason – and therefore the focus for any performance measurement system – should be to learn about current perfor- mance and inform management on how to improve on it. Another reason for col- lecting performance measurements is to inform external stakeholders and to com- ply with external reporting regulations and information requests (Marr, 2014). Many things in a mining operation can be measured, although this does not make them key to the organisation’s

success. Measurements should be limited to those quantifiable factors that reflect the organisational goals and are essen- tial to the organisation reaching its goals. It is also important to keep the number of performance measures low, simply to keep everyone’s attention focused on achieving the same goals. Developing key performance areas The author supports the view that each organisation should develop KPAs that fit its needs. These may be a direct extract from vision statements if these have been recently developed or revalidated. It sometimes helps to agree on a long- term objective for each KPA – a sort of a mini-vision statement. For each KPA, three to five KPIs (specific measures) can then be identified. This is usually done by the senior management team. It typically takes several sessions to settle on a final list. After generating some candidate KPIs for each KPA, the senior team members will typically take these around to their teams and/or convene cross-functional breakout sessions to review the list, add to it, and select the most appropriate set of KPIs. This improves the quality of the resulting measures and also increases buy-in.

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African surface

Case studies The KPAs discussed in this paper have been selected by comparing KPAs of sev- eral mining houses engaged in surface mining operations in Southern Africa, and then identifying those that are common to most of them. PalaboraMining Company is committed to the following strategic imperatives: • Providing a safe and healthy work environment for all employees and contractor employees. • Practising sound environmental man- agement to ensure the sustainable biodiversity of the natural environ- ment within which it operates. • Acknowledging and respecting stake- holder interests and concerns; and striving to be a leading corporate citi- zen within the mining industry. • Supplying a high standard of quality products and services – reliably and responsibly. Case Study 2 – Kumba Iron Ore: Kumba Iron Ore has what it refers to as ‘four strategic pillars’, which are: delivering on growth projects; capturing value across the value chain; optimising value of the current operations; and organisational responsibility and capability. The company performance is measured against the following seven measures, or KPIs (KPAs): • safety and health; • our people; Case Study 1 Palabora Mining Company:

The operational KPIs are: zero harm; pro- duce according to plan; mine waste effec- tively; containing our costs; and securing our logistics. Case Study 3 – Anglo American Corporation: Anglo American has the following key performance areas, which it refers to as ‘Pillars of Value’: These are safety and health; environment; socio-political; and people. Identification of KPAs The case studies reveal that the five key performance areas are safety and health, costs, product quality, fleet management and delivery. These may form a default list that covers the key areas that any organ- isation should consider when choosing KPAs. Safety and health There is a strong cultural drive in Southern Africa to adopt a system of ‘zero harm’. This goal reflects an eventual target that the industry has set and taken a stepwise approach to achieving. This is reflected in the current targets which, despite the implied target of ‘zero’, are in fact not zero. The most common measures of safety in the southern African surface mining environment are the lost-time frequency rate (LTFR) and the fatality frequency rate (FFR). Matters of health that have been iden- tified in the Mining Charter include mea- surement of new cases of noise-induced hearing loss (NIHL) and lung diseases. Fleet management: With load and haul contributing to approximately 46% of total mining costs on some operations (Accenture, 2009), fleet management has been identified

as a KPA in the southern African surface mining environment. The costs can be categorised into firstly, equipment costs, made up of fuel, tyres and tracks, ground engaging tools, repairs, and maintenance; and secondly, into operating labour costs. Fittingly, research into this KPA has shown it to contain the largest number of KPIs in the surface mining environment (Appendix A) . The KPIs to be measured may be maintenance-related, where it is important to minimise downtime (planned and unplanned) and increase availability. It is also important to mea- sure equipment efficiency in terms of the entire cycle of spotting, loading, travelling (loaded and empty), and dumping time for haulage equipment, and cycle time of digging, swinging (loaded and empty), and dumping for excavating equipment. Relocation time, which is the average time spent per relocation of an item of equipment (eg the time it takes to move a dragline from one cutting position to the next), is often included. KPIs that should also be in place are to measure how effectively the equipment is used (utilisation) and how efficiently it is used (matching equipment size and numbers – measured by the number of dumps to fill and machine waiting time) to ensure equipment optimisation. Logistics would not be complete without haul road man- agement, and this may be another focus of a KPI within the fleet management per- formance area. Product quality: In today’s increasingly competitive mar- ket it is important to ensure that the quality of the product meets the require- ments of the client. This is particularly the case for a large number of South Africa’s surface mining producers who, due to the unique characteristics of the mineral

• corporate governance; • footprint management; • corporate social investment; • innovation research; and • production and sales.

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