VZCZCXRO3877
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #0228/01 0361512
ZNR UUUUU ZZH
R 051512Z FEB 09
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 7257
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0921
RUEHRL/AMEMBASSY BERLIN 0673
RUEHBY/AMEMBASSY CANBERRA 0802
RUEHLO/AMEMBASSY LONDON 1692
RUEHMO/AMEMBASSY MOSCOW 0932
RUEHNE/AMEMBASSY NEW DELHI 0541
RUEHOT/AMEMBASSY OTTAWA 0760
RUEHFR/AMEMBASSY PARIS 1526

UNCLAS SECTION 01 OF 02 PRETORIA 000228 
 
SIPDIS 
SENSITIVE 
 
STATE PLEASE PASS USAID 
STATE PLEASE PASS USGS 
DEPT FOR AF/S, ISN, EEB/ESC AND CBA 
DOE FOR T.SPERL, G.PERSON, A.BIENAWSKI, M.SCOTT, L.PARKER 
 
E.O. 12958: N/A 
TAGS: ENRG EMIN EPET SENV EINV EIND KNNP SF
SUBJECT: NRC VISITS ANGLOGOLD ASHANTI GOLD AND URANIUM MINE 
 
REF: A) PRETORIA 179 
B) PRETORIA 173 
C) 08 PRETORIA 656 
D) 08 PRETORIA 168 
E) PRETORIA 215 
 
Sensitive but Unclassified.  Not for Internet. 
 
¶1.  (SBU) SUMMARY: NRC Commissioner Peter Lyons visited AngloGold 
Ashanti's Moab Khotsong gold and uranium mine west of Johannesburg 
on January 22.  The mine boasts the world's deepest single-lift 
shaft at 3,106 meters.  Moab Khotsong has been mining deep-level, 
moderate-grade gold and uranium deposits and has appropriately 
managed power and safety issues vexing the industry in 2008(Ref C). 
Commissioner Lyons was on a January 18-24 nuclear familiarization 
trip to South Africa (Ref E).  Ref A provided an update on Eskom and 
Koeberg nuclear power station.  Ref B provided an update on the 2007 
Pelindaba nuclear security incident.  End Summary. 
 
------------------------------- 
World's Deepest Gold Mine Shaft 
------------------------------- 
 
¶2.  (SBU) AngloGold Ashanti Moab Khotsong acting General Manager 
Barend Swanepoel hosted NRC Commissioner Peter Lyons, his colleague, 
Minerals/Energy Officer, and Specialist on January 22, bringing 
together a substantial team to brief the delegation before visiting 
the mine.  Moab Khotsong, which translates to "fertile ground" and 
"place of peace," possesses the world's deepest single-lift shaft 
(carrying both men and materials) at 3,106 meters.  The Embassy's 
team descended to a deeper level of 4,000 meters at AngloGold 
Ashanti's Mponeng mine in January 2008 on the eve of the power 
crisis, but utilized two lesser shafts to reach that sultry depth 
(Ref D).  Moab Khotsong is situated in the Vaal River area where 
AngloGold Ashanti and Harmony Gold operate a number of mines, so the 
area is dotted with shaft head gear towers. 
 
¶3.  (SBU) Moab Khotsong - like other mines in the AngloGold Ashanti 
portfolio - struggles with challenges of deep geology, power 
shortages, and safety.  At depths over 3,000 meters, the ambient 
rock temperature exceeds 50 degrees centigrade, so a significant 
portion of power consumption goes to energy-intensive cooling.  All 
mines have back-up capacity to be able to evacuate personnel in an 
emergency, especially after Eskom shut down power to miners for four 
days early last year (Ref C).  Eskom provides gold mines with about 
96.5 percent of historical power consumption and mines have 
implemented programs to sustain production at this level of power. 
The SAG Department of Mines and Energy recently released a national 
mine safety audit, which identified gaps on gold and other miners' 
performance.  Although overall mining fatalities were reduced from 
220 in 2007 to 168 in 2008, the issue remains highly contentious 
with unions and government.  Moab Khotsong prioritizes safety - with 
highly visible campaigns, but its strong safety record was hurt by a 
December 2008 fatality related to a locomotive accident. 
 
¶4.  (SBU) Swanepoel said Moab Knotsong started development in 1991 
and production in 2003.  Given the depth of the ore-body, it has 
taken a long time to finally begin producing profits at the end of 
Qtaken a long time to finally begin producing profits at the end of 
¶2008.  Because the mine is also producing uranium, management 
employs measures to monitor radon and radiation to assure that 
employees are safe.  The mine back-fills 70 percent of mined areas 
and limits recirculation of ventilation air.  Recovered gold 
increased from 174 kilograms in 2007 to 497 kilograms in 2008. 
 
¶5.  (SBU) Commissioner Lyons and the delegation were impressed with 
the tour of the mine, including using the deep shaft "man cage" 
elevator, two personnel rail movers, and a chair lift to reach the 
cramped mine-face and 1.5 meter thick ore-bearing stratum. 
Minerals/Energy Officer tried the new Hilti electric drill (Hilti is 
a European company which also manufactures in the U.S.), which uses 
less power and produces less noise than the pneumatic or air-powered 
older models. 
 
-------------------------------- 
DOUBLE DOUBLE TOIL AND TROUBLE - 
BUBBLING URANIUM CAULDRON 
 
PRETORIA 00000228  002 OF 002 
 
 
-------------------------------- 
 
¶6.  (SBU) Moab Khotsong is one of three AngloGold Ashanti mines in 
the Vaal area, which produce uranium ore as a by-product of primary 
gold production (Great Noligwa and Kopanang are the other two.) 
Uranium makes a small but valuable contribution to AngloGold 
Ashanti's bottom line.  Moab Khotsong produced 37,000 pounds of 
recovered uranium in 2008, far exceeding budget.  Commissioner Lyons 
toured the adjacent South Uranium Plant that carries out a 
complicated chemical process for extraction of "yellow-cake" uranium 
oxide concentrate (U3O8) which is shipped to AngloGold Ashanti's 
wholly-owned subsidiary, Nuclear Fuels Corporation of South Africa 
(Nufcor), for further concentration.  The operation hosts a variety 
of bubbling cauldrons for leaching, thickening, adsorption, elution, 
extracting, stripping, and thickening again to reach the final 
product.  The visitors were cautioned to remove hard hats to avoid 
accidentally dropping one into a thickener or pregnant solution tank 
and ruining an expensive batch.  Gold ore-bearing material separated 
during the uranium extraction process is sent to the gold plant for 
gold extraction. 
 
¶7.  (SBU) COMMENT: South Africa's gold miners have been faring a 
little better than some other struggling miners.  The gold price has 
stayed relatively strong in the global financial crisis, compared to 
other weak and battered commodity prices, like platinum and copper, 
for example.  The rand has depreciated about 28 percent against the 
dollar over the last year, so the rand price for gold is even 
stronger, thus propping up rand earnings.  South Africa faces a 
long-term decline in its gold production because of its mature 
geology, aggravated by power and safety challenges (Ref C), so even 
as its global rank slips, South Africa will remain a substantial 
producer of gold and gold will be a substantial contributor to South 
Africa's exports, tax revenues, and employment. 
 
¶8.  (U) Commissioner Lyons has cleared this cable. 
 
BALL