Sishen Mine unit cost
Sishen Mine’s cash unit cost increased by
just over 2% to R98.83/t in 2009 compared
to R96.53/t in 2008 on a like-for-like basis
(excluding the cost incurred in 2008 on
the 900Kt additional high cost low quality
production). The mine implemented a number
of asset optimisation initiatives focusing on
improving the efficiency of mining operations on
a sustainable basis which assisted in containing
costs despite the increase in mining activity.
The increase in cash unit cost was driven by a few key factors:
- Inflationary pressures principally on labour, contract mining and corporate office costs, which together account for in excess of 50% of the mine’s cost structure;
- The inflationary pressures were eased through a 36% decrease in diesel prices during the year from R10.40 per litre to R6.70 per litre. Diesel now contributes only 11% to the mine’s cash cost (2008: 15%);
- Waste volumes mined increased by 28% or 18.0Mt to 82.1Mt in 2009;
- However, the impact of the additional mining activities was more than offset by the benefit of additional production from the ramp-up of the jig plant that contributed a further 5.7Mt of production volume for the year.
In real terms unit cash costs were down 4%.
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