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SA refinery may lift silver output
Allan Seccombe
Posted: Fri, 17 Nov 2006

[miningmx.com] -- SOUTH AFRICA’S Rand Refinery will investigate growing its refined silver production in Johannesburg, said Alan Muir, the managing director of Africa’s largest gold refinery.

The refinery has capacity to produce 200 to 250 tonnes of silver a year if all things go well and the plant is tweaked, Muir told Miningmx in an interview. Rand Refinery produced 72 tonnes of silver in the 2005/06 financial year to end-September.

“It’s not huge by world standards, but it could bring in another couple of million rand in revenue a year for us,” he said.

South Africa ranked as the world’s seventeenth-largest silver producer in 2005 at 2.8m oz. Its silver is predominantly a by-product of its gold and base metals mining operations.
not huge by world standards
Rand Refinery commissioned a high-speed silver electrolysis (HSSE) plant in 2002 that has averaged four to five tonnes of silver production a month. In the first three weeks of September this jumped to in excess of the six tonnes/month target at 6.4 tonnes.

Changes in the amount of gold in the content going into the refinery and raising the levels of silver electrolytes in the concentration were behind the increased production.

Rand Refinery’s operation on the outskirts of Johannesburg has another older silver refining process that was replaced by the HSSE and could be used. The HSSE process has capacity of 180 tonnes a year.

Rand Refinery management has decided to implement an independent study to see if it is economically viable to step up silver production based on its improvements in refining silver.

The plant’s silver is solely derived as a by-product from the gold smelting and refining services Rand Refinery offers.

“We are looking at commissioning an investigation in the first quarter of 2007 into what the silver market will do in the next few years and whether we should increase our silver refining capacity,” Muir said.

The study will dictate whether Rand Refinery finds ways to use its full capacity or if demand is such that there is a business case to be made for expanding that capacity, he said.

In its 2006 World Silver Survey, GFMS noted that mine output has risen by 150m oz or 4,665 tonnes over the past decade and scrap output has climbed by 30m oz (933 tonnes), and as a result silver refineries are pushing out nearly a third more silver than a decade ago.

Despite this, there have been silver refinery closures in the past decade and the refinery industry is operating with less capacity.

Many silver refineries now form part of base metals operations.

“As average utilisation levels have improved, the availability of spare capacity in silver refining has not only declined, but has arguably become less flexible,” the Survey said.

Mine production will grow until 2008 and from 2009 there is the prospect of up to 30m oz/year of by-product silver from Barrick’s Pascua Lama gold project in Chile/Argentina, the Survey pointed out.
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“In this environment, it will be of increasing strategic importance for mining companies to secure long-term access to appropriate silver refining capacity both for existing and envisioned production.

“At the same time, the world’s major silver refiners will be faced with investment decisions over capacity expansions and process flexibility together with questions concerning the longer-term evolution of mine production and recycling volumes in years ahead,” the Survey said.

Rand Refinery has not yet decided where it will source additional material.

“If we could capture a small amount of mined material or if we could have a relationship with another silver refinery, these are options we could look at,” Muir said.

Rand Refinery management, pleased with the improvements in its silver refining, has decided to exploit its newfound abilities and add revenue to the business.

Rand Refinery is so pleased with its success in silver refining that it changed the name of its October monthly internal newsletter to Silverflash from Goldflash.