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AngloGold Ashanti provides Obuasi underground mining update

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Global Mining Review,

AngloGold Ashanti has announced that underground ore mining at the Obuasi Gold Mine in Ghana is expected to resume by mid-October.

For the remainder of 2021, underground ore will be used only to replenish the run-of-mine stockpile. Gold production from underground ore sources is therefore expected to recommence only in January 2022. The safe ramp up to the full mining rate of 4000 tpd is expected to be achieved by the end of the 1H22.

Underground mining activities at Obuasi were voluntarily suspended following a sill pillar failure on 18 May 2021 which resulted in the tragic loss of one of the company’s colleagues. A detailed review of the mining and ground management plans have been conducted by a cross-functional internal team and supported by independent third-party, Australian Mining Consultants (AMC).

Following this review, a comprehensive series of protocols has been introduced to supplement existing operating procedures. The full suite of procedures ahead of the mining front now include the existing systematic probe drilling procedure, extensive use of technology, including cavity monitoring systems and cavity auto laser system, augmented with visual inspections to confirm the position and status of backfill in previously mined areas. The new paste-fill plant has been commissioned and its reticulation system is expected to be completed by the end of 2021.

These protocols, which have been integrated into the mine operating system, will be bolstered by scheduled audits to ensure the accuracy and diligence in probe drilling, and the intended implementation of the revised plan. AMC will continue its review of future mining areas. During the review period, underground development and work related to the Obuasi Redevelopment Project continued to progress, with Phase 2 construction substantially complete at the end of June 2021.

Phase 3 of the project, which relates principally to extended capital expenditure to refurbish existing infrastructure around the KMS Shaft, as well as to service the mine in deeper production areas, has progressed during this period and will continue as planned through to the end of 2023. AngloGold Ashanti’s annual revised guidance for 2021 remains unchanged and assumes no gold production contribution from Obuasi for the remainder of this year. It is estimated that the supplementary operating procedures introduced following the review will add approximately US$10 – US$20/t to the mine’s operating costs, or around US$50/oz. There is no material change to the mine plan or to Obuasi’s published ore reserve and mineral resources.

Production for 2022, as the mine ramps up, is estimated to be approximately 240 000 – 260 000 oz at an all-in sustaining cost of approximately US$1250 – US$1350/oz, and with cash costs of US$900 – US$1000/oz.

The company estimates that in 4Q22, the annualised production rate will be about 320 000 – 350 000 oz/y, and it is expected that the annual production will remain at around that level in 2022 and 2023 until the completion of Phase 3 in 4Q23, which the company estimates will allow the mining rate to achieve the planned step-up to 5000 tpd. With all three phases of the project complete, production from 2024 – 2028 is anticipated to average 400 000 – 450 000 oz at an all-in sustaining cost of US$900 – US$950/oz.

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