[miningmx.com] – MINING uranium is one of the options Sibanye Gold is considering as it weighs up whether to keep its Beatrix West operation open, the Free State mine that is losing R28m in revenue monthly.
A fire that broke out at the mining section on February 19 has made it inaccessible with the result that production is unlikely for at least another year. The mine is losing 61kg of monthly gold production while development of ore reserves is impossible.
“The mining section is responsible for 24% of total Beatrix production but comprises a much larger part of costs,” said James Wellsted, head of corporate affairs for Sibanye. Some 51% of Beatrix’s total electricity bill is attributable to Beatrix West.
The viability of the remainder of Beatrix gold mine was not in question where Beatrix West section to be shut, he said.
A consultation process in terms of section 189A of the Labour Relations Act has been entered into with labour, the minerals resources department (DMR) and other relevant stakeholders, the company said in a statement.
Closing down the section is one of the scenarios as well as possibly mining the orebody for its original purpose, which was uranium. “That’s one of the scenarios that we’re looking at,” said Wellsted.
Beatrix West was previously known as Oryx and before that, Beisa: a uranium project developed at a total cost of R2.6bn by Gencor. The uranium orebody, however, was misunderstood by Gencor and it was later converted into a gold mine.
Neal Froneman, CEO of Sibanye Gold, once expressed a mild interest in buying Oryx out of Gold Fields for its uranium deposit. That was in 2007 as he was building Uranium One and commented to Miningmx: “Beisa is a good asset but we don’t need any more assets in southern Africa”.
Said Wellsted of Beatrix West: “It has always been marginal and has not been able to recover the initial capital spent”. It was was kept operational in the hope that the situation would improve, he added.
Wellsted said that the section was set down in Sibanye Gold’s business prospects as a profit-maker.
One wonders, however, whether the fire has merely accelerated its inevitable closure. Beatrix West provides 2,800 full-time jobs, and a further 300 positions to contractors, Wellsted said.
“We’ve run a few numbers, but we don’t see an obvious way to profitability,” he added.
