* Debate stirred over platinum mechanisation
* Geology and cost seen as obstacles
* Rest of mining industry not hampered
By Clara Ferreira-Marques and Sherilee Lakmidas
LONDON/MARIKANA, South Africa, March 14 Rising
wage costs and strikes have revived the arguments in favour of
automating South Africa's loss-making platinum mines, but weak
prices for the metal and tough conditions underground mean
mechanisation remains a distant prospect.
The rest of the mining industry, from copper to coal, has
been transformed in recent decades by automation, unmanned
trucks and remotely controlled equipment.
That is in large part thanks to geology. In the cramped
mines where platinum is found, the rock is still drilled,
blasted and cleared by men.
The platinum seams are damp, sweltering and claustrophobic
places to work: men often drill in shafts so constricted that it
is like mining under a table.
Mines are evacuated for hours a day so blasting can take
place - a major inefficiency for operations with the thinnest of
But mechanising platinum would be costly and the mining
companies need to be convinced it is worth it.
"They would need to believe that any investment in platinum
mechanisation would significantly drive them down the cost
curve," said analyst Alison Turner at Panmure Gordon.
"I don't think the belief is there - I don't think the
evidence is there."
Mechanising the traditional drill-and-blast process would,
in theory, improve safety, reduce costs and help resolve some of
the social problems associated with a labour-intensive industry
that moves tens of thousands of men from distant villages to
live in hostels in South Africa's platinum belt.
But the cost and risk of mechanising existing mines is
simply too high. Machines built for conventional mining struggle
with the narrow shafts, and many simply dig up too much ore for
the same amount of platinum metal - increasing costs.
Companies are also alarmed by the example of Lonmin,
which pushed mechanisation from 2004 only to abandon its efforts
- and its chief executive - four years later largely because of
Lonmin had wanted to mechanise 50 percent of the ore body by
2010, but by 2008 it was already questioning its decision. It
has since spent 1.2 billion rand ($131 million) de-mechanising
its Saffy shaft - one of two originally equipped to
revolutionise the way platinum was mined.
"We still keep very small amounts of mechanised mining in
Hossy shaft, but we don't see ourselves as being the leaders in
mechanisation at all," Lonmin's acting chief executive Simon
Scott said in an interview last month.
"If someone comes up with something that is going to show
significant benefits, we will follow, but we have invested a
significant amount of money over the years in mechanisation and
it has come to nothing."
Anglo American Platinum, the Anglo American unit
that is the largest producer of platinum, is overhauling its
operations but mechanisation is not on the agenda. The
technology is simply too risky and untested.
"When you are talking about mechanisation, I don't think
anyone will try that again, not after the failure at Lonmin,"
said one platinum analyst, who declined to be quoted by name.
"In this environment, when we have a low price and high
costs, believing the metal price will bail you out is too risky.
From that perspective alone mechanisation is dead in the water."
Most mining companies and analysts agree, though, on the
need for change. Mines are deeper and it is no longer possible
to throw men at the problem, not least because wages have soared
- rock drill operators can earn more than teachers in South
According to the investment bank CIBC, a real 25 percent
wage cut is needed to make platinum viable - something
mineworkers' unions would not accept.
Other problems include insufficient training among workers
who would have to maintain machines underground, and a lack of
equipment that is compact enough to fit in the shafts.
Atlas Copco is one of a handful of equipment
makers working with mining companies to develop machines that
"It doesn't sound like much, just knocking a foot off (the
height of a machine) but it is a whole new suite of equipment
again," said Don King, vice president of marketing and business
development at Atlas Copco's Underground Rock Excavation arm.
Given the depth and difficulty of access, machines have to
be maintained underground.
That is no problem with the drills already in use. "Nothing
you can't fix with a hammer," King said.
Problems would arise if the mineworkers are required to
maintain more complicated equipment.
One solution is to concentrate on new mines which can be
mechanised from the outset, or to target more spacious mines,
such as Ivanplats's Platreef, which is expected to be
fully mechanised in a first for the industry.
New mining methods may be another way forward. Instead of
replicating the conventional drill-and-blast process, companies
such as Anglo are looking at "continuous" mining - using
machines much like those used to bore road tunnels.
Anglo's Dave Bentley, group head of technology, says
continuous mining is safer and more efficient, but technology
needs to be developed to make the giant tunnel borers fit the
constrained space of most platinum mines.
"The incentives are there to explore," he said. "But we will
only know if they are there to employ once the technology has