Walter Shamu: Steering Prieska into production

Orion Minerals’s Prieska project is one of the most exciting mining developments in South Africa. Walter Shamu, COO at Orion, tells Leon Louw more about this great opportunity.

Walter, energy is a big talking point in the mining industry at the moment. The Prieska project is in a hotspot for solar and wind energy. Does renewable energy play a significant role in the mine’s future plans?

Yes, it does. However, during the initial stages we will also have access to grid power from Eskom. According to our baseline studies, Prieska will require between about 32MW to 35MW of power in steady-state. Throughout construction and ramp-up we will use around 12MW of power and we have already applied for a 15MW construction allocation from Eskom. The mine will connect into the national grid via the Cuprum Substation located as close as 300m from the main hoist shaft.

However, the Prieska region has some of the highest solar yields in the country, in addition to exceptionally strong and consistent prevailing winds. The high number of renewable projects being developed in the area is testament to the solar and wind potential of the Northern Cape province in general. The Prieska mine site is surrounded by the 140MW Garop windfarm and the 120MW Copperton windfarm both currently in construction, amongst already existing solar PV energy facilities, so it is difficult to turn a blind eye to what is happening on our doorstep. One of the major role players in the region is juwi Renewable Energies. As Orion, we signed a Memorandum of Understanding with juwi early in the development of Prieska’s Bankable Feasibility Study (BFS) to supply Prieska with renewable energy once the mine is up and running.

So once in full production, the mine will not be reliant on grid power from Eskom?

According to our feasibility study Prieska will be able to get 100% of its power from the national grid. Initially the mine will receive the 32MW to 35MW from Eskom. Thereafter during the first or foundation phase of mining (according to a feasibility study completed by juwi) we will be able to get 52% of our power requirements from a hybrid solar and wind energy facility. Ultimately, we would like to have the option to go off-grid. We are following the development of energy storage systems and other new technologies, as well as the comparative costs associated with different renewable energy sources. Prieska’s proposed renewable energy facility will be within 19km of the project site, supplied via an overhead transmission line, which will be connected directly to the mine site, beyond the Eskom grid connection. For now, and during the initial ramp-up, national grid power will give us time to assess the comparative benefits and challenges of going completely off-grid.

Do you think it is cost-effective to rely 100% on renewable energy?

There are certainly significant challenges facing mine development companies. Developers are often limited to working within the life of mine duration they can initially demonstrate. When constructing a renewable energy facility and the life of mine is planned to 12 years, as is the Foundation Phase of the Prieska Project, it becomes expensive to carry all the capital costs of construction and storage of a 30-year service life installation in that short period. The storage solutions on offer are still relatively expensive. It is still cheaper to be using national grid power for the base load. However, there have been great advancements in technology and energy storage, especially in the hydrogen/lithium/vanadium space. We are positive that we will see improvements over the next five years. However, for now we are 100% sure that solar and wind can supply us with 52% of power at very competitive tariffs. If we set up the power supply infrastructure now in preparation for when the technology and economics allows for cheap energy storage, we will be able to plug into the gains as they occur and have the option to migrate off grid when it makes commercial sense.

Is a hybrid system with a big focus on storage technology the ideal solution?

We are monitoring developments in the storage of solar and wind energy, especially the hydrogen and vanadium technology. Given that we are in an area where, during the day, we can economically generate sufficient excess energy, finding a cost-effective means of storing that energy is the way to go. With a hybrid of 20MW of wind and 35MW of solar PV installed, we are able to still generate some renewable energy at night, hence the 52% penetration we plan to get. We are also really committed to reducing our carbon footprint and these are the some of the steps we are taking to help with that.

Are you on track with developments at the Prieska copper project?

Orion reached a number of key milestones at the end of 2020. Prieska obtained all the necessary licenses to operate, including mining rights, environmental authorisations, water licenses, land rezoning and approval of the electrical magnetic interference compliance plan for operating in the SKA area.

We have started with the selection of a principal Engineering, Procurement, Construction and Management (EPCM) contractor. On the funding side our focus is now on securing strategic equity partners. We aim to be fully-funded this year. Once the funding is in place, we are another step closer to start producing.

Has Orion already procured some of the equipment and placed orders for long-lead items?

We have identified the mills and winders and made preliminary payment for mills from New Concept Projects. When we worked on the improvements and value engineering of our 2019 feasibility study, we switched from a Ball to Ball mill set-up to a Semi-Autogenous Grinding (SAG) and Ball mill combination, amongst other design and study improvements.

Why the change from a purely ball mill system to the hybrid set-up between a ball mill and SAG mill?

We took several steps to improve the initial feasibility study. By introducing the SAG milling set-up, we reduced the ore processing plant’s footprint substantially. A SAG mill system simplifies the whole comminution circuit, in other words the crushing and milling assembly. Using the SAG mill, you are able to take larger particle size feed material to your milling section and so reduce the multiple stages of crushing you would otherwise need if feeding into a ball mill configuration. At the same time, we will still retain the ability to run the SAG mill as a ball mill, which means that the comminution is carried out more by the metal balls as opposed to the ore tumbling around in the mill.

When we completed our initial feasibility study, we had a processing design that worked well, though we also identified where further improvements could be easily made. At that stage we also had not completed the test work for SAG milling. We subsequently continued with the test work which ultimately confirmed that SAG milling was the better option overall.

In the end we have a processing plant with a much smaller footprint, that is not as cost intensive to construct, and which is a lot simpler to operate, with the added option of still being able to switch over to a ball-ball mill configuration should we choose. So, it is a material improvement all around.

When African Mining visited the Prieska mine last year, the team was busy pumping water from the vertical shaft and testing the integrity of the shaft infrastructure. Has that project been completed, and are you happy with the results?

The shaft inspection and water treatment testing was completed as part of the May 2020 feasibility study update. We now have a much better understanding of the shaft condition and an additional means of handling water to be pumped from the underground workings. We have probed the main shaft, which is submerged from 300m below surface to 1km down and taken water samples from the accumulated water surface down to almost one kilometre depth, which is close to the bottom of the existing shaft. We used an underwater camera to get a visual record of the condition of the shaft. It all looks good, there are no obstructions, and the shaft is competent.

We have inspected all the concrete lining of the shaft and checked the integrity of the steel work. The water PH remained steadily at or above 6.7 all the way from the surface to the bottom of the mine, which means the water is not acidic, so is easy is to treat and does not accelerate corrosion.

We continue gathering as much information as we can. To-date, the results have confirmed our initial assumptions of an easily serviceable shaft that will make re-accessing the underground workings simpler. Furthermore, water treatment has become a key part of our dewatering strategy, supplementing forced-evaporation which we will also use to manage pumped out water. Water treatment allows us to accelerate dewatering of the underground workings to be done in less than a year of pumping, as well as enable us to harvest some of the water at a quality suitable for agricultural use. The intention is to make this water available to local farmers to irrigate their land.

Orion recently announced that it will proceed to do due diligence work on the Okiep copper project, about 450km from Prieska. Do you see similarities between the two projects and possible synergies?

At face value the O’Kiep area is very similar to Prieska in many respects, that being previous successful base metals operations, remnant geological prospectivity, existing infrastructural support and common geography with both complexes being located in the Northern Cape province. The project lends itself to share some of the administrative costs of Prieska and enjoy economies of scale. Historically, the area produced more than two million tonnes of copper and was extremely profitable when it was operated successfully first by Newmont in 1940 to 1983, then Goldfields to 1998 and in the end by Metorex to 2003.

“We have a lot of historical information on the Jacomynspan deposit, which is in an area historically explored by numerous others including Shell, Newmont, Anglo American and Anglovaal.”

Metorex’s decision to shut Okiep was strategic rather than due to mineral resource depletion, as they focused on projects elsewhere. As a result, there is a mountain of data available and according to the preliminary view of our geologists the area remains highly prospective. One of the tenement areas has a mining right under application and about to be granted. In the near-term plan it can be brought into production quickly, within 18 months or so. Moreover, in the long term, the project can easily be re-scaled to levels it operated at under Newmont when it produced between 30 000 and 40 000 tonnes of copper per year. Newmont was producing with a run of mine of about 2% copper and ended up mining more than 120 million tonnes of ore. Orion’s geologists and mine development teams are applying the lessons we have learnt with the development of Prieska and are making sense of all the historical data at Okiep, to grasp its full potential and how to find synergies with Prieska. The key focus over the next few due diligence months will be to formulate the best way to expeditiously bring the Okiep operations to production.

In the meantime, we will have time to continue exploration and mine expansion feasibility studies. Okiep really looks like an exciting opportunity that would complement Prieska’s production. Similarly, to Prieska, Okiep lends itself to efficient, modern and not labour-intensive mechanised mining methods. Although we are still in the early stages of due diligence, the indications are that the Okiep project would nicely supplement the Orion project pipeline and slot in as part of early metal production. The work at Okiep will not interfere with the activities and timelines at Prieska, as these projects are in different stages of development.

The existing infrastructure at Prieska is a boon for its development. Does Okiep boast similar infrastructure?

The last noteworthy operations at Okiep were mechanised underground mines and most of the utility infrastructure servicing these are still intact like roads, power and water supply. The project area is extensive though, with more than 27 historical mines within a radius of about 25km of the initial mining target area. Most of these were shallow underground mines not requiring much infrastructural support as they supplied a centralised ore processing plant. The mining right application is for a series of underground mines within a few kilometres of each other and close to amenities. The mining area is easy to access, and there are power and office buildings already on site. Springbok, the closest big town, is ideal for support services and supplementary accommodation. The area was mined extensively until 2003. However, most of the infrastructure that supported those mines still exists from then. This will enable us to get an early start, apply modern exploration methods, and take Okiep to the next stage.

In addition to Prieska and Okiep, Orion has started interesting exploration work at the Jacomynspan nickel and cobalt deposit. Can you tell us a little about your progress here?

Like Okiep, we have a lot of historical information on the Jacomynspan deposit, which is in an area historically explored by numerous others including Shell, Newmont, Anglo American and Anglovaal due to its prospectivity for nickel, copper cobalt massive suphides.  A historical resource estimate of close to 78 million tonnes at 0.4% nickel had been delineated on a portion of the mineralisation that is now useful as a basis for further exploration work.

Currently we are re-looking at that whole area and following up on some of the showings that we identified from our earlier target generation work, or were historical showings that had not been followed up by previous explorers. The Jacomynspan mineralisation is open along both dip and strike, though further work is required in search of high grade massive sulphide mineralisation, with the current resource constituted predominantly of disseminated lower grade zones.

Our early assessment work entails determining how best to follow up the extensional exploration around Jacomynspan and determining what mining conceptual model is to be pursued. The options are to follow up the opportunity as a large-scale, low-grade nickel / copper / cobalt prospect, or target a high-grade, lower-volume massive sulphides. We are looking at past scoping studies and about to carry out further metallurgical test work to help with this.

So, for Jacomynspan and our regional exploration programmes in general, the preliminary work includes confirming historical targets and following up and consolidating all the historical information. Our Areachap exploration team’s focus is shifting to the regional potential to provide the pipeline as production starts at Prieska, which is likely to be sometime in 2024.

---