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AngloGold Ashanti’s Obuasi in Ghana is WhyAfrica’s Pick of the Week.

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AngloGold Ashanti’s prolific Obuasi gold mine in Ghana will resume underground ore mining by mid-October this year. Image credit: Flickr.com

AngloGold Ashanti’s Obuasi in Ghana is WhyAfrica’s Pick of the Week.

Underground ore mining at AngloGold Ashanti’s Obuasi mine in Ghana is expected to resume by mid-October this year. This follows a hiatus of more than four months after a sill pillar failure in May 2021. AngloGold Ashanti’s Obuasi in Ghana is WhyAfrica’s Pick of the Week.

By Leon Louw, founder and editor of WhyAfrica

Obuasi, one of the oldest gold mines in the world is back in business after it was voluntarily put on ice for more than four months following a sill pillar failure that tragically resulted in the death of one of its employees on 18 May 2021.

Large scale commercial and industrial mining at Obuasi, one of the world’s largest gold ore bodies, began in 1897 with the formation of the Ashanti Goldfields Corporation. In 2004, Ashanti Goldfields merged with AngloGold to form AngloGold Ashanti.

The Obuasi ore body occurs within the Ashanti Greenstone Belt and is located approximately 60km south of Kumasi, in the Ashanti Region of Ghana.

Despite Obuasi’s prolific ore body (29.5 Million ounces [Moz] of Mineral Resource, at an average grade of 7.64 grams per tonne and 8.7Moz of Ore Reserve at an average grade of 8.6 grams per tonne) the mine has never reached its full potential.

The many challenges at Obuasi

The underground mine has presented many miners and geologists with lots of headaches for more than 120 years. At 1500m below surface, the ore body is tricky and difficult to mine and has never really revealed its deepest secrets, and it is always ready to challenge even the most experienced mining team.

Throughout its history Obuasi has been beset by community issues and its success marred by environmental concerns. Artisanal miners, colloquially known as Galamsey, invaded Obuasi in 2014. Following heavy losses, AngloGold Ashanti suspended mining and laid off more than 5000 employees. A large security force remained on site.

Obuasi was in limited operations in 2015, and on care and maintenance from 2016. AngloGold Ashanti decided to embark on a redevelopment program and after being granted all the necessary approvals from the Government of Ghana, the first face blast took place in February 2019 with first gold poured in December 2019.

Phase 1 of the redevelopment project was completed by the end of September 2020 and began commercial production on 1 October 2020. Phase 2, construction and mine development were completed in June 2020.

Underground ore mining to resume in October

Following the sill pillar failure in May, AngloGold Ashanti, supported by independent third-party Australian Mining Consultants (AMC), undertook a detailed review of the mining and ground management plans. Yesterday, the company announced that underground ore mining is expected to resume by mid-October.

According to the announcement by AngloGold Ashanti, underground ore will be used only to replenish the Run-of-Mine stockpile for the remainder of the year. Gold production from underground ore sources is therefore expected to re-commence only in January 2022. The safe ramp up to the full mining rate of 4000 tons per day is expected to be achieved by the end of the first half of the 2022.

Following this review, a comprehensive series of protocols have been introduced to supplement existing operating procedures. The full suite of procedures ahead of the mining front now include the existing systematic probe drilling procedure, extensive use of technology, including Cavity Monitoring Systems and Cavity Auto Laser System, augmented with visual inspections to confirm the position and status of backfill in previously mined areas. The new paste-fill plant has been commissioned and its reticulation system is expected to be completed by the end of this year.

These protocols, which have been integrated into the Mine Operating System, will be bolstered by scheduled audits to ensure the accuracy and diligence in probe drilling, and the intended implementation of the revised plan. AMC will continue its review of future mining areas.

During the review period, underground development and work related to the Obuasi Redevelopment Project continued to progress, with Phase 2 construction substantially complete at the end of June 2021.

Phase 3 of the project, which relates to extended capital expenditure to refurbish existing infrastructure around the KMS Shaft, as well as to service the mine in deeper production areas, has progressed during this period and will continue as planned through to the end of 2023.

AngloGold Ashanti’s annual revised guidance for 2021 remains unchanged and assumes no gold production contribution from Obuasi for the remainder of this year. It is estimated that the supplementary operating procedures introduced following the review will add about USD10 to USD20 per tonne to the mine’s operating costs, or about USD50/oz. There is no material change to the mine plan or to Obuasi’s published Ore Reserve and Mineral Resources.

Production for 2022, as the mine ramps up, is expected to be about 240 000oz – 260 000oz at an all-in sustaining cost of approximately USD1250/oz to USD1350/oz, and with cash costs of USD900/oz to USD1000/oz.

The company expects that in the fourth quarter of 2022, the annualised production rate will be about 320 000oz to 350 000oz a year. Annual production is forecast to remain at around that level in 2022 and 2023 until the completion of Phase 3 in Q4 2023, which will allow the mining rate to achieve the planned step-up to 5000 tonnes per day.

With all three phases of the project complete, production from 2024 to 2028 is anticipated to average 400 000oz to 450 000oz at an all-in sustaining cost of USD900/oz to USD950/oz.

AngloGold Ashanti’s Obuasi in Ghana is WhyAfrica’s Pick of the Week.

 Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.        

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message. WhyAfrica will launch its first ever digital magazine in November. If you are interested in contributing or advertising, please contact me at leon@whyafrica.co.za. To coincide with the first launch, we have a range of different packages and combo deals to give your company the greatest exposure to a rapidly growing, African readership.       

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