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Stillwater expands.

Expansion and rationalisation should see the only PGM operation in the U.S. finally achieving its true potential

Having restructured the company, put in new management and invested in new equipment, Stillwater Mining Co (SMC) is set to capitalise on the full potential of its massive platinum group metals (PGM) resource in the Stillwater Complex in southern Montana, U.S. The current expansion programme should see SMC in a good financial position with greatly increased output and greater control of its own products by 1998 when all the projects are completed.

The U.S. National Materials Advisory Board has estimated that the Stillwater Complex contains over 225 Moz of PGMs. They occur in a thin reef, the J-M Reef, in the banded zone of the complex. The reef averages about 2 m in thickness and contains 0.5 to 2.0% metallic sulphides and various PGMs. The average grade of the zone is 19 g/t of platinum and palladium.

The restructured SMC is bringing a new commitment to extracting these reserves. It is the successor to two previous partnerships (MJ, November 10, 1995, p. 346) which never developed the operation to a scale that the size of the resource merits, with consequent operational economics problems.

SMC holds 995 mineral claims covering a 45 km strike length of the J-M Reef 136 km southwest of the largest city in Montana, Billings. It is the only known underground economic source of PGMs in the Americas at this time. In 1994 it milled 338,000 t of ore and sold 279,000 oz of platinum and palladium, about 3% of world supply. The Stillwater Complex has an unusually high palladium to platinum ratio of 3.5:1. Proven and probable ore reserves at the end of 1994 were 20.2 Mt, containing 18 Moz of platinum and palladium (9.3 Moz platinum equivalent or 10.1 Moz gold equivalent).

The Stillwater mine has operated at over 900 t/d in recent years and this rate is now being doubled. In addition, SMC has received all the permits required to develop a second mine at East Boulder, about 21 km west-northwest of the Stillwater mine. Work on this will probably start next year with the driving, by tunnel boring machine (TBM), of a 5,500 m adit southwest from the mill site to intersect the PGM reef horizon.

The Stillwater Complex resembles the Bushveld Complex in South Africa but has some very positive advantages over that resource: its in-situ PGM grade is more than twice that of the Bushveld Complex and its dip and greater width, compared with the Bushved's flat Merensky Reef, make the J-M Reef generally amenable to a wider variety of gravity-assisted, mechanised mining methods.

The lack of commitment by previous owners exhibited itself in the small scale of the Stillwater operation and minimum investment in equipment. John Andrews, SMC's president and chief operating officer, pointed out when Mining Magazine visited the operation recently: "cost structure has crippled the resource." Therefore, he added, SMC's current goals are to: "improve infrastructure, consolidate operations and pick-up throughput."

The small scale is being addressed by the doubling of production at the Stillwater mine and the development of East Boulder. The equipment problem (high mining costs resulting from the use of old machines) has been addressed by the purchase of a fleet of ten Atlas Copco Boomer 282 jumbos, five rail-bound and five rubber-tyred units, a Simba H157 production drill for up and down-holes in the sublevel stoping operations (production also comes from cut-and-fill mining), a mixed fleet of Atlas Copco Wagner 1.5 [m.sup.3] and 2.3 [m.sup.3] LHDs and new 13.6 t capacity EJC 985T15 trucks. The new jumbos and LHDs were purchased from Lake Shore Mining Equipment, a company with a 150-year history that is now the only dedicated underground hard rock equipment distributor covering the whole of the U.S.

Results to date have been impressive with mining costs coming down as planned. The objective is to bring the cash cost down from last year's $148/t to $118/t. SMC is particularly pleased with the new Atlas Copco hydraulic drills that have replaced old pneumatic machines.

A major facility that will have an important effect on mining costs is the 588 m deep, 5,400 t/d hoisting capacity, vertical shaft sunk adjacent to the concentrator. Sinking was completed in December and it should be hoisting at the end of the first quarter. This, combined with the completion of internal ramp systems, will dramatically improve ore haulage to surface and the deployment of mobile equipment underground. The Stillwater mine is accessed by seven adits on the west side of the Stillwater River valley, the main production area and site of the shaft and concentrator, and two adits on the east side. On the west side this has effectively broken the operation up into a number of small mines with the transfer of equipment requiring exit from the mine and tramming up or down the mountain to re-enter through a portal on another level. An internal ramp system is now being completed.

The expansion plans, obviously, also call for an expansion of milling capacity. The existing SAG mill, capable of handling a throughput of some 3,100 t/d, is being supplemented by the addition of a ball mill. Additional flotation capacity, using Outokumpu cells, and ancillary equipment are also being installed. The expanded 2,700 t/d concentrator is expected to achieve PGM recoveries better than the current 90%.

The capacity of SMC's precious metals smelter in nearby Columbus is being raised from 18 to 29 t/d of concentrate by the installation of a second top blown rotary converter (TBRC). Furthermore, a base metals refinery (BMR) is under construction adjacent to the precious metals smelter. Initially the BMR will operate on a one-shift basis, capable of treating 1,360 t/d of ore equivalent. However, the ultimate capacity of this facility could be over 6,300 t/d with the installation of a continuous autoclave. SMC believes the ultimate potential of Stillwater mine to be 2,700 t/d and that of East Boulder to be 3,600 t/d, hence the forward thinking design of the BMR capacity.

The overall aims of the expansion plan are: to realise and maintain favourable operating economics relative to SMC's competitors, primarily South African, Russian and Zimbabwean producers; to increase drilling and development work along the J-M Reef and at depth to allow the delineation of additional reserves; and to achieve consistent, sustainable PGM production growth.

A geological marvel

The Stillwater mine lies 8 km south of the community of Nye in the Stillwater geological complex. The complex is a potential source of several strategic minerals besides its PGMs, including chromium, nickel, aluminium and copper. It is the only known significant source of chromium and PGMs in the U.S., estimated to contain over 80% of potential known U.S. chromium resources (MM, November 1987, pp.418-427). At strategically important times in U.S. history, notably WWII and the Korean War, the chromium resource has been mined, but under normal circumstances it is unlikely to be economic.

The complex is located in southern Montana's Beartooth Mountains, situated along the northern edge of the Beartooth Plateau which rises to elevations of over 3,000 m in places within the complex. This plateau is deeply dissected by several rivers and their tributaries including the Stillwater River towards the eastern end and the Boulder River near the western end of the complex. Both rivers have eroded their valley floors resulting in deep, steep-sided valleys cut into the gently undulating elevated plateau surface. These valleys allow easier access to the reef, hence the decision to develop the Stillwater mine first, and the subsequent choice of access for the development of the new East Boulder mine.

The complex is an assemblage of basic and ultrabasic rocks derived from a single, large, buried magma body. The molten rock was sufficiently fluid when emplaced to allow individual minerals to crystallise sequentially. The heavier, more basic darker minerals crystallised first, sinking towards the bottom, leaving the lighter, more siliceous light-coloured minerals to crystallise out later to produce bands of norite, gabbro and anorthosite which can be traced across most of the strike length. Over time the original horizontal orientation of the complex was changed as it was tilted at an angle of 50-90 [degrees] to the north. The upper portion of the complex was eroded away to produce the essentially lenticular-shaped exposure of the complex evident today which has been identified for 45 km in an east-southeasterly direction and has a maximum width of some 7 km near East Boulder.

The PGMs, together with small amounts of nickel, copper and gold are concentrated in one principal layer, the J-M Reef. This appears to form a continuous layer which is exposed from the highest ridges over 3,000 m above sea level to the deepest valleys some 1.5 km below. The zone of mineralisation has been intersected in a drill hole at an elevation of 1,033 m above sea level demonstrating vertical continuity exceeding 1,800 m. Geological and physical evidence suggests that the complex and the enclosed J-M Reef extends downward beyond the limits of currently available mining practice. Geological mapping and gravity surveys also suggest that the dip of the complex and reef flatten gently and may extend 48 km or more to the north.

The in-situ PGM grade of the Stillwater Complex is 19 g/t, which is more than double the 0.21 oz/t of the Bushveld Complex, primarily because the J-M Reef contains a similar amount of platinum as the Merensky Reef, but eight times the content of palladium. The average J-M Reef mining width is approximately 3.7 m, whereas Merensky's average mining width is just some 0.9 m. However, Merensky's surface strike length is much longer, at over 240 km.

At the Stillwater mine itself, the reef varies in thickness from 0-18 m in width, averaging 1.8 m, over a reasonably well drilled tested strike length of 5,500 m. The ore zones occur in elliptical pods. The compressive strength of the mineralised rock varies between 4,000 and 7,000 psi, but is much harder, about 15,000 psi, in the footwall. Stillwater's mill head grade is about 27 g/t.

A significant amount of underground exploration is being carried out at present using the company's four Hagby drills and six contractors' diamond drills. Last year some 61,000 m of core drilling was completed. Drilling is generally cheap at Stillwater, about $20/m, including the assay costs. However, major portions of the J-M Reef have yet to be exposed to drilling and development sufficient to allow for the delineation of additional reserves. Given the magnitude of available proven and probable reserves SMC's total exploration in recent years has been limited. SMC is continuing to focus on bringing current PGM reserves into production rather than exploring for or attempting to acquire additional developed or undeveloped ore reserves. This practice keeps the exploration expenditure to minimal levels.

Development intensive

The ore is very erratic and therefore requires a lot of underground development and core drilling to finalise production mining plans. The geology department provides instructions as to the ore width to drill in the cut-and-fill and sub-level stopes, and assigns a grade to each face.

The Stillwater mine currently accesses only a small section of the J-M Reef, some 8 km long between the 2,040 and 1,340 m elevations above sea level. The original access to the ore is via horizontal adits and drifts driven parallel to the strike of the reef at varying vertical intervals. The portals on the west side of the Stillwater Valley are at elevations of 1,524, 1,570, 1,615, 1,676, 1,737, 1,798 and 1,981 m. The two adits on the east side enter at the 1,524 and 1,646 m elevations. Three drifts have also been developed below the valley floor to extract the reef down to the 1,340 m elevation. The eastern valley side of the mine produces 25% of the mine's output. The PGM grades here are better, but ground conditions are poorer.

Underground development will be increased on the existing levels and from new levels to be driven from the new shaft, which extends down to the 923 m elevation. Exploration has projected the structure and mineralisation of the J-M Reef down to the 760 m elevation and it remains open at depth. All future main level development will be at 180 m vertical intervals.

The reef is explored by footwall drives about 30 m laterally into its footwall. In areas of known or anticipated mineralisation, such as down dip from mined out stopes, the footwall laterals are driven at 60 m vertical intervals. In areas of limited mineralisation or where there has been no previous underground exploration, the footwall laterals are driven at 180 m vertical intervals. Every 120 m a crosscut is mined some 18 m towards the reef to provide a location for diamond drilling. A pattern of holes drilled from the crosscut determines the reef location and width, and provides an indication of grade.

If adequate reef structure and mineralisation is confirmed by this drilling, definition drilling is initiated to obtain samples at approximately 8 to 16 m horizontal intervals. Stope development commences once satisfactory definition drilling results have been obtained.

TBM experience

Because of the intensity of development at Stillwater, the mine became a pioneer of TBM hard rock mining (World Tunnelling, December 1991, pp. N31-N32). It purchased a used Robbins machine in September 1987 and employed it for two years and nine months, completing work on four levels, driving a total of 8,546 linear metres, including almost 1,500 m of curved tunnel. Its first job was to drive the 1,524 m elevation footwall lateral on the east side of the valley, mining 1,153 linear metres. During the initial boring, the machine was stopped every 76 m to allow diamond drilling to locate and monitor the course of the reef. That interval was subsequently increased to 152 m.

The 1,737 m elevation west drive was its second job, 1,462 m long. This commenced on August 19, 1988 and was completed November 18 that year. The third was the 1,798 elevation west level, driven for 3,436 m. A new cutterhead considerably improved the penetration rate on this tunnel. Its final task was to extend the 1,676 m west level for 2,495 m beyond the 1,115 m that had already been driven conventionally.

The unit cost of driving these 4 m diameter levels was 15-20% below the conventional drill and blast cost. Another advantage is that the drives thus mined are clean and well drained. All this TBM experience will come in very useful for SMC's future plans to drive its access to the reef at East Boulder by TBM and the possibility that it will require two machines, the second to undertake more work at Stillwater. However, it is expected new units will be of larger diameter, perhaps around 4.6 m. SMC will be looking for other changes in TBM technology including the capability to mine much shorter turning radii than the 250 m on the first unit, and better ground control systems on the TBM. Also the design should accommodate rapid assembly, moving and reassembly. Finally, it has been suggested that reduced cutterhead speed would be desirable when the TBM encounters higher rock strengths in the 28,000-30,000 psi compressive strength range, compared with the normally encountered soft rocks of 12,000-18,000 psi compressive strengths.

The new shaft was sunk conventionally by Frontier Kemper Constructors; its finished diameter is 5.5 m. The project utilised a 26 m high headframe with a 745 kW single drum Hardie Tynes hoist raising 3.8 [m.sup.3] buckets at 335 m/min. The two-deck galloway stage was hoisted by two Lidgerwood hoists and the forms were placed with three Bayard winches.

Drilling was accomplished using a four-boom pneumatic jumbo equipped with PR55 drifters. Muck was loaded using an Eimco 630 crawler loader. The shaft was concrete lined to within 10 m of the bottom as sinking progressed, in 6 m pours. Main levels will be developed from the shaft at the 1,340, 1,160 and 975 m elevations. The crusher station will be constructed at 945 m.

The shaft provides access to down dip extensions of reef areas already mined. All levels developed from the shaft will be driven using the rail-mounted and rubber-tyred Boomer jumbos, blasting 4 m rounds. Loading is by rail-mounted rocker shovels, also supplied by Atlas Copco, and the Wagner LHDs. The trend at the mine, unusual today, is for increased use of rail-mounted development equipment. The distances are high at Stillwater with mining up to 5 km from the concentrator on the west side of the valley and 4 km on the east side.

CAF/sub-level stoping

The choice of stoping method is influenced by the strike length of the ore zone and the competence of the hanging wall rocks. Recently there has been a general trend to move away from the past reliance on cut-and-fill (CAF) stoping to use more sub-level stoping. When economic strike lengths are believed to be more than 180 m and the hanging wall rock is competent, sub-level stoping is preferred. It is generally more productive, less costly and safer. Its drawback of greater dilution is being redressed through the greater drilling accuracy of the new Atlas Copco Simba H157 rig. The aim is to raise the amount of sub-level stoping until 50% of production is generated by each method.

In CAF applications, the crosscut from the footwall lateral is extended to intersect the reef. Chute and manway access is established to about 10 m above the crosscut elevation and a stope sill cut is driven along strike. The sill cut is mapped in detail and sampled. Where mineralisation extends beyond the width of the sill, its grade is tested with short holes. CAF stoping proceeds by taking 2.4 m horizontal cuts. Deslimed tailings are used for the fill. Cement is only used if access under the stope fill will be required in the future.

Sandfill for stoping areas will continue to be provided from coarse concentrator tailings pumped underground using existing pumps and pipelines. As the distance to the mining areas increases, SMC will install booster sandfill pumping stations.

To develop the sub-level stopes, a ramp is driven from the tracked footwall crosscut by one of the rubber-tyred Boomers. The crosscuts allow access to sub-levels at 15-18 m vertical intervals. Muck chutes are established in the crosscut to serve these sub-levels. An access crosscut is driven to the reef at each sub-level elevation to permit the development of sub-level drifts. Once the first two sub-levels are established, production from the area can begin. Development and production from the remaining sub-levels in each block follow in a bottom-up sequence. Slot raises are opened up at the extremities of the stoping block, and long hole production drilling opens up the stope along strike. The span of the open section of the stope may be up to 23 m on strike and is dictated by ground stability. As much development waste rock as possible is used to backfill these stopes, supplemented with coarse mill tailings when available. The mine extracts 0.7 t of waste per tonne of ore, so dumping of waste underground reduces costs.

Generally, the 2.7 [m.sup.3] capacity Wagner ST-3.5 LHDs are used for ramp development and the 1.5 [m.sup.3] ST-2Ds for sub-level development and stope mucking. When loading ore from open stopes, they are operated by remote control using a Nautilus system. Two-person development teams drill, blast, muck and install the ground support. Generally, Anfo cannot be used because of the problem of generating high nitrate levels in the mine water, so ICI Explosives' Magnafrac 3000 emulsion cartridges are the normal explosive, used with Nonel detonators. Roof support is provided by 1.5 m Split Sets and 3.7 m rebars.

Narrow vein mining

The Atlas Copco Simba H157 has been a popular addition to the fleet, giving excellent accuracy and high drilling speed. Its main application is drilling up and downholes in the sub-level stopes, where mining widths can be as narrow as 800 mm. It is also used to drill utility holes. The operators report that it takes about one-quarter of the time to set up as compared with the older pneumatic rigs. The Simba is now the main sub-level stoping production unit, with the older rigs used as standby machines. Using Brunner & Lay drilling tools, normally, it has drilled hole lengths up to 50 m. At the time of MM's visit, when the operators were still new to the rig, the Simba's best performance had been 150 m/shift, compared with the previous best of 70 m on the old machines, drilling 50 mm diameter holes with button bits.

Wherever possible, the Simba drills downholes, 1.2-15 m long. In the narrower vein areas, the normal spacing is 1 m on dip and 910 mm on strike, to take out a 610 to 910 mm stope width from sub-levels developed with 'Ashanti' backs. A performance of around 100 m/shift is considered good at present. Although it is operated on ten-hour shifts, only five-six hours of drilling can be accomplished over the shift.

Short raises for slots and muck raises in stoping areas are mined by hand-held drills or developed as drop-raises using longholes. Inter-level ore and waste passes are bored by the mine's fleet of raiseborers, a Subterranean 1.4 m diameter machine, a Robbins RBM6 and a newly purchased Robbins RBM7 machine. Raise boring too is relatively cheap, a 1.4 m hole can be mined for around $300/m.

One of the important projects for this year will be to raise bore a 3 m diameter internal shaft at 12300 West, which will be mined by SMC crews. This shaft will connect the 1,900 m elevation down to below the 1,524 m elevation, some 3,900 m in from that level's portal on the west side of the valley, and next year a ramp system will be mined to connect that level and the 1,676 m elevation above.

As new levels are established from the shaft, raises will be mined to provide ore and waste transfer to selected levels for rail-haulage to the shaft station. SMC plans to have ore and waste on the west side transferred through raises to the shaft by early 1997. On the east side ore and waste will be transferred underground. All the trains comprise 15 t diesel locos pulling 10 t mine cars at present; in the future a faster system will be required.

Mining costs have been declining for the past two years, and are now falling much as expected with the new equipment, with mechanical availabilities up to 95%. Haulage costs are remaining constant while the distances are increasing, reflecting the greater efficiency of the new EJC trucks. Roundtrips for the trucks can take as long as one hour. Utilisation remains a problem with the trackless equipment because of the lack of internal ramp systems but this will improve as the mine is developed to allow better movement of equipment; and haulage costs should fall as better transfer systems connect with the rail haulage. To improve inter-mine communication, SMC is considering installing a leaky feeder system.

Maintenance costs were high before the new equipment was purchased, at about $20/t milled. To redress this the new machines have reduced the variety of different sizes and types of equipment used, allowing the mine to downsize its parts inventory and simplify maintenance. Furthermore, an additional maintenance crew was formed to allow maintenance to be carried out 24 hours a day, seven days a week, and a computerised system for scheduled maintenance has been established.

Further new equipment will be purchased. SMC's plan is to spend in excess of $10 million over the 1995 to 1998 period for equipment replacement.

East Boulder

The plans for East Boulder, about 21 km west-northwest of the Stillwater mine, are now fully permitted and work will probably start this year. The TBM development of the 5,500 m adit to access the reef could be started in the third quarter of 1996. SMC believes that the reef becomes more continuous further west along strike and ground conditions improve. Therefore, East Boulder's reserves will be easier to mine with more sub-level stoping production possible, which will further reduce total mining costs.

If Stillwater is developed to what is considered its ultimate potential of 2,700 t/d, and East Boulder is ultimately expanded to some 3,600 t/d, SMC should then be producing around 1.7 Moz/y of PGMs, over five times the current level. SMC appears confident that this will be the case since the new BMR will have the capacity to treat 6,300 t/d (ore equivalent).

Stillwater's concentrator delivers a filtered and dried flotation concentrate to SMC's precious metals smelter in Columbus, 75 km from the mine, and East Boulder will do the same. That concentrate feeds a 1.5 MW electric furnace where it is melted at a temperature of 1,430 [degrees] C. The molten concentrate forms two layers, a lighter silica oxide rich slag layer and a heavier sulphide and PGM rich matte layer. The slag is discarded and the matte is remelted in TBRCs, separating an iron oxide rich converter slag, which is returned to the electric furnace, from a heavier, sulphide rich converter matte, or white metal. This contains approximately 13% of the original smelter feed and is primarily copper and nickel sulphides containing approximately 2% PGMs. Smelter PGM recoveries are greater than 99.5%.

The BMR will process the white metal into 40-50% PGM-rich residue using the Sherritt acid pressure leaching process to remove copper and nickel. The hydrated copper and nickel sulphate solution will be shipped to Sherritt's Fort Saskatchewan facility in Canada and the PGM residue to the most competitive PGM refinery, of which there are a number in North America and elsewhere. An important feature of the acid pressure leaching technique is that the PGMs are concentrated into a high grade residue which can be refined to yield pure platinum group metals.

The BMR will reduce refining charges and improve metals return. In addition, faster return of refined metals will significantly reduce SMC's in-process inventory, cutting the time from three-and-a-half months to just six weeks. The BMR should be on stream in the second quarter of next year and the immediate financial return from the speeding up of the metals return process should largely pay for the investment. Currently, 50% of SMC's revenue comes from palladium, 45% from platinum and 5% from the copper, nickel and rhodium.

Once the company completes these metallurgical developments, it will have much more control over its final products and it is already starting to develop relationships with the end users. The primary markets for palladium are automotive catalysts, dental and the electronics industry. The latter market in the U.S. is around 1.5 Moz/y, while the dental market takes some 1 Moz/y. The palladium auto-catalyst market has received a significant boost with the development of 100% palladium catalysts, which offer several advantages over platinum catalysts. The palladium catalyst market is currently growing at some 30% annually, albeit starting from a low offtake level.

Capital/operating costs

At the beginning of 1995, SMC's total projected capital expenditures for the Stillwater expansion plan, not including East Boulder, during the years 1994 through 1997 are estimated to be approximately $80 million, of which $9.3 million was spent in 1994. These costs are (in millions of dollars):
Mine development equipment                $42.9
Surface facilities                         12.1
Concentrator                                7.3
Smelter and BMR                            11.4
Other                                       6.3

Total                                     $80.0

During 1995, management has expanded the scope of the project to accommodate production rates in excess of 1,800 t/d.

Cash operating costs per returnable ounce of platinum and palladium were $186/oz for 1994 and are expected to be reduced significantly after completion of the expansion. These cost savings are expected to come mainly from greater use of sub-level stoping (about 25% of the cost savings), construction of the BMR (20%) and economies of scale and mine design efficiencies (55%).


Mine location: 136 km southwest of Billings, Montana, U.S.

Ownership: Stillwater Mining Company (SMC) 100%

Reserves: Proven and probable at the end of 1994: 20.2 Mt of ore, containing 18 Moz of platinum and palladium (9.3 Moz platinum equivalent or 10.1 Moz gold equivalent)

Start-up: 1986

Mining methods: Cut-and-fill and sub-level stoping using trackless equipment and both rail-mounted and trackless equipment in development

Ore treatment: The mill produces a flotation concentrate which is then hauled by road to Columbus to the precious metal smelter and base metal refinery

Production: Was 900 t/d of ore but currently being doubled to 1,800 t/d. In 1994, 338,000 t of ore were milled and 279,000 oz of platinum and palladium were sold
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Title Annotation:Stillwater Mining Co.
Author:Chadwick, John
Publication:Mining Magazine
Date:Jan 1, 1996
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