FY2003 has presented many challenges – both internal and external – for Blyvoor, DRD’s flagship operation located near Carletonville, according to general manager of South African operations, Deon van der Mescht. He adds, “The operation performed relatively well for the period under review, gaining momentum on the Blyvoor expansion project (BEP), which is aimed at extending the life of mine. The development programme has made a good turnabout, with future plans for this operation looking increasingly encouraging.”

   “The year saw a number of highlights, most notably a good safety trend. To this end, the operation was awarded the Association of West Rand Mines Inter-mine safety award for the fifth consecutive year.” Blyvoor’s lost time injury frequency rate improved by 13% from the previous financial year, and over the last five years has shown an improvement of 57% with an improvement year on year. Record production of some 700 kilograms of gold in December 2002, coupled with the successful opening-up programme has meant Blyvoor is in a much stronger position. 7 697 kilograms (247 464 ounces) were produced during FY2003 compared with 7 870 kilograms (253 027 ounces) for FY2002. The lower gold production achieved was predominantly caused by the downscaling of the low grade Main Reef production unit, rendered unviable by the declining gold price in Rand terms during the year under review. Positively, the high turnover of staff has stabilised, with the last six to seven months of the financial year recording negligible movement.

   “There have also been many negatives during the past year, including the strengthening Rand, and the volatility in the exchange rate, which resulted in a number of potential growth areas having to be mothballed as highlighted previously,” Van der Mescht says.

September Qtr    R105 586/kg  December Qtr    R99 587/kg  March Qtr    R93 734/kg  June Qtr    R86 348/kg

    In an effort to manage margins more effectively as a result of the strengthening Rand, cost cutting has been introduced in the form of synergies between Blyvoor and the North West Operations, whereby a number of services have been centralised. As always, productivity – the largest component of cost – is a major focus area. Says Van der Mescht, “Ironically, when the exchange rate reached R13 to the US Dollar, the majority of suppliers increased their prices, but with the turnabout and a strengthening Rand, only a few of these suppliers have instituted a price decrease. Congruently, where Blyvoor received around R105 000 per kilogram of gold in the September quarter, this figure dropped to around R86 000 per kilogram during the June quarter, highlighting the pressure that margins came under. Hence the introduction of stringent short-term interval controls.”

    Blyvoor’s Project Boost initiatives include a R45 million plant upgrade to treat slimes from the No. 4 and 5 slimes dams. According to Van der Mescht, “Timing of this project is crucial in that the waste dump is fast depleting, and subsequently this depletion needs to be supplemented by the slimes treatment. With a life of eight years and planned production of around 84.4 kilograms of gold per month at a cost of R20 per ton, the project is being fast tracked and is scheduled to be commissioned in November 2003.” Recovery grades are anticipated to average 0.352 grams per ton.

    Another Boost project is the 33/35 decline project where development is taking place on the down-dip extension of the Blyvoor lease area into a known payshoot. With a capital cost of R8.7 million, the project will serve as an exploration platform for further depth extension.

    Van der Mescht explains, “While the Blyvoor expansion project was embarked upon to exploit the Blyvoor ore reserve by installing the required infrastructure, thereby ‘giving life’ to the operation, Project Boost seeks to increase organic growth and ‘gear’ the operation for that extended life. By opening up every potential block of ground in the Blyvoor lease area, the expansion project will mine and convert the maximum reserves and resources available.”

    At current gold price levels ($350 per ounce) Blyvoor’s mine plan will see the operation produce around 660 kilograms of gold per month for a duration of 18 years. To this end, expansion has established a strong base which will allow the operation to manage both the internal and external factors which may impact on such a mature operation.

    As a result of the lower Rand gold price received, many of the lower grade reserves proved no longer economically viable, and thus a number of jobs have become redundant. To overcome the need to retrench staff, Blyvoor has embarked on a rolling extended leave system until conditions improve and those staff members can be reemployed in other opportunities.

    “As is the case with the North West Operations, Blyvoor subscribes to the principle that anything the mine can manage internally will be done by the company, rather than outsource such activities provided it can be done cost effectively,” says Van der Mescht.

    Looking to the year ahead, Blyvoor intends:

	Improving current safety trends;
	Instilling a “zero fatality” mindset;
	Improving productivity and labour efficiencies; and
	Remaining a consistent producer and cash generator for the growth potential of the group as a whole.

   Labour relations at the operation are well managed and all credit to both management and organised labour on their participative style in addressing and resolving issues before they become unmanageable.