A new approach to gold
Former Harmony CE Graham Briggs brings 45 years of experience to junior mining house BMI
Salary and options aside, it’s a tough job being the CE of one of SA’s big mining groups.
The amount of time they get to spend on mining operations is minimal compared to the time spent dealing with angry employees and communities, hostile government representatives, and nervous boards of directors and investors.
Well-known mining executives like former Anglo American Coal CE John Wallington and former Impala Platinum CE David Brown have opted for the quieter pastures of junior mining.
They have now been joined by former Harmony Gold Mining CE Graham Briggs, who has taken on the role of chairman of junior gold mine Birrell Mining International (BMI).
He is also a director of Ubank and 98 Degrees, where he is advising on workplace health. Workplace wellness has historically been ignored in the mining industry, which has directed more resources to sick workers than to prevention, he says.
Briggs, who retired from Harmony last year, wants to put back some of the knowledge he has picked up during his 45-year career in the gold industry.
He started as a learner official in Evander gold mine in 1972 before going to university to study geology. He worked for Harmony in SA and Papua New Guinea under Bernard Swanepoel before being offered the job of CEO in 2008. At the time, SA’s gold production was in long-term decline from a peak of about 1,000t/year in 1970 to about 140t today. He doubts if even a leap in the gold price to US$3,000/oz (from about $1,200/oz now) would save SA’s gold industry.
The current owners of SA’s mines need to take a totally different approach to managing mines and orebodies and empowerment, he says. If they can’t do that, they must let others own those assets.
At smaller mining companies, it is quicker to make the difficult decisions, he says.
BMI has two main projects. It is raising about R50m from private investors to refurbish the old Klipwal gold mine, and has secured a licence to rehabilitate the old Bulembu (formerly Havelock) chrysotile (white asbestos) mine in Swaziland, which closed in 2001.
In the process of rehabilitating it, BMI will recover magnesium and nickel.
Lloyd Birrell, the founder of BMI, is a lawyer who previously worked for Peter Skeat at Mintails and then another Skeat company, Galaxy Gold, which had mines near Barberton. With the backing of Chinese private equity he bought some gold mines near Pilgrim’s Rest from Simmer & Jack and subsequently listed them on the Australian Stock Exchange as Stonewall Resources. He resigned from Stonewall two years ago.
Klipwal is an old mine which has had numerous owners over the past 20 years, but none made much profit out of it. It has been invaded by illegal miners, five of whom were killed last year after a rockfall.
Briggs says the plan is to bring the mine back up to production of about 15,000oz of gold a year at a cost of about $800/oz. It would be small but profitable at current gold prices.
Surprisingly, an estimated 70,000-80,000t of mined material with a grade of about 3g/t is lying underground and can be processed at the existing plant at low cost.
Briggs says previous owners may have left it behind because of production bottlenecks arising from trying to mine on multiple levels. The mine has about 13 levels and is about 500m deep. There is probably potential to deepen it further, as the lower levels were not well developed, Briggs says.
One of the more unusual aspects of Klipwal is that BMI is using the former illegal miners, or zama zamas, as its workforce, organised into co-operatives of about 10 people each who will be paid on tonnages delivered to the plant. Klipwal management will be responsible for ensuring they adhere to safety standards, including using proper supports.
About 60 of them come from the local communities, in a desperately poor area where the money is badly needed. They will receive training once drilling and blasting begins, likely to be later this year, Briggs says.
There are synergies between Klipwal and Bulembu, since some of the byproduct from gold processing at Klipwal can be used on the dumps at Bulembu to release some of the more valuable minerals trapped in the chrysotile.