The Tanami operation’s underground mine tunnel.
The Tanami operation’s underground mine tunnel.

By Courtney Pearson

September 11, 2015

The story of Newmont Mining’s Tanami mine is one of rags to riches; clawing its way back from the brink of shutdown to become a core asset.

IN 2012 the Tanami underground gold mine in regional Northern Territory, acquired by Newmont in 2002, was producing just 178,000 ounces per annum.

Three years later, the mine has doubled production and continues to steadily lower its costs.

Newmont expected that, by the end of this year, the mine would produce more than 407,000oz of gold – a continued improvement on the 2014 result of 354,000oz and the 2013 result of 343,000oz.

Newmont Tanami operations general manager Francois Hardy said he had seen an extreme change during the past three years.

“At the end of 2012, and the preceding four years to that, this place was run at a loss and we continually failed to meet our targets,” he said.

In 2013, the company had to make a decision about whether to scrap the mine or dramatically change the way it was run.

“We could’ve made the decision to sell and close the mine down; we did have one company come through and have a look at [acquiring] us,” Mr Hardy said.

Instead, leaders at the mine put together a plan to increase productivity and get costs under control; and the plan was a success.

Mr Hardy said the overall production rise between 2012 and 2015 was attributable to underground productivity improvements.

“When Newmont was looking at all the assets that they had in their portfolio and looking at which ones could potentially be better operated by a small company, Tanami was on that list,” he said.

“When we showed the plan in terms of how we were going to boost our production and get ourselves to being a low cost, long life operation, we were given the opportunity to move ourselves from being non-core to core.”

The Tanami operation is pushing the boundaries of what can be achieved in an underground operation and by the end of 2015 was expected to exceed production guidance by 5 per cent.

The granite mill on-site at Newmont’s Tanami operation.
The granite mill on-site at Newmont’s Tanami operation.

Making changes

The Tanami mine, in the Tanami Desert on land owned by the Warlpiri people, has been producing since 1983.

Since Newmont took over in 2002 it has implemented, and planned, a number of changes to boost production and lower costs.

Currently, the mine has a single decline with 16 trucks on the ground using the same path, which is causing congestion. A proposed expansion would see the construction of a dual decline, which would remove congestion.

“At the same time in the mine we’re increasing our ventilation capacity and our cooling capacity so we can have more air and more cooled air underground available to us,” Mr Hardy said.

“It’s nothing more than just connecting the upper part of one ore body to the surface.”

The main focus of the expansion is at the processing plant, where a second mill is planned to increase throughput.

However for the last decade the mill has been operating below capacity, so for  the next two years the company will concentrate on maintaining the mill and ensuring the processes and procedures in place can handle a higher running rate.

“Historically the mill hasn’t been utilised that much,” Mr Hardy said.

In 2012 Newmont was utilising the mill between 60 per cent and 64 per cent of the available time. It has already improved this to about 87 per cent usage.

“Next year that will go up to 94.5 per cent of the time,” Mr Hardy said.

“The plan now is to continue to work on how we change our philosophy from having a mill that is only used part time to a mill that is being used the whole time and how we maintain the mill while it’s running, which for us is new.”

The company expected the board of directors to make a decision on the mill expansion project in late October.

Newmont has a number of community initiatives, including a pre-vocational program and working with the Traditional Owners.
Newmont has a number of community initiatives, including a pre-vocational program and working with the Traditional Owners.

Community matters

The Tanami operation is about 260km north of its nearest community Yuendumu, but this hasn’t stopped Newmont from addressing its social responsibilities.

“Typically we’re not in the middle of a community, but we operate the mine site as if we were,” Mr Hardy said.

The Tanami Track is the main thoroughfare for the Traditional Owners from Yuendumu to Lajamanu and is “right outside our gates”, Mr Hardy said.

Each year the company brings between 6 and 10 Traditional Owners to site to give them exposure to the business, eventually leading to a job.

“We put them on a plan where they spend time in different departments until we can get them to a point where there is something they like and want to pursue, and then we put them on a program to educate them and get them into a position where we can put them into a full time role,” Mr Hardy said.

The company works alongside the Warlpiri people and engages the Traditional Owners in a range of programs by working in partnership with the Central Land Council.

Newmont also provides support for the local schools through funding and opportunities beyond school, as well as assistance to the Yuendumu gallery to attract income from tourists.

Mr Hardy said he was especially proud of the operation’s internal employment targets.

“We have internal indigenous employment targets and we’re currently running at about 11.5 per cent indigenous employees at our mine,” he said.

The mine also employs 11.5 per cent female employees and was recently recognised at the Women in Resources NT gala dinner for diversity and its on-site women’s network.

“It’s focused on making sure we can mentor and assist women,” Mr Hardy said.

“Those two initiatives are really making a difference around site, so we’re really proud of that.”

Ensuring the mine site is environmentally friendly is another area where the company is looking to make changes and improvements.

The company introduced biodiesel to run vehicles and generators, using the cooking oil from the camp’s kitchen.

“The biggest piece we have been investigating is our power usage as well as our power source,” Mr Hardy said.

“Currently we use diesel for all of our electricity generation and we’re looking at how we can change that to a hybrid model where we use some diesel but we also use a combination of gas in one form or the other.

“That is ongoing at this stage.”

Newmont is investigating whether solar or gas, either trucked or via pipeline, would be more beneficial to the operation.

It is continuing to look for ways to lower costs at Tanami while maintaining the project’s status as one of Newmont’s core assets.