Newcrest’s involvement in the International Caving Study (ICS) helps the Company maintain its position at the forefront of mining technology – aiding the delivery of high quality projects.

Newcrest is actively involved in an International Caving Study (ICS) involving major international mining companies, equipment manufacturers and explosives suppliers supported by leading research organisations. Newcrest is a member company of the ICS Group along with companies well practised at caving such as Codelco (Chile), DeBeers (South Africa), LKAB (Sweden), Rio Tinto and other companies such as WMC and Sandvik Tamrock. Research has been conducted by the sponsors – University of Queensland’s Julius Kruttschnitt Mineral Research Centre (JKMRC), CSIRO Petroleum and the Itasca Consulting Group based in Minnesota, USA.

Newcrest’s involvement in the project further extends our underground mining competencies to sustainably mine large, lower-grade, deeper deposits by the application of low-cost mass-mining methods.

The ICS Group focusses on approaches to achieve continuous caving processes, fragmentation, broken rock flow, mine design, risk assessment and operational management for underground caving methods. The Group shares resources to extend these competencies and provides a forum for international knowledge sharing with other leading underground caving operators.

The impetus for funding this project was the application of caving operations in stronger rock and geotechnical environments outside current experience. Led by Codelco, Rio Tinto and CSIRO, the ICS developed new approaches to assess cave propagation and fragmentation, and conducted industrial trials on blasting and hydraulic fracturing techniques (from the petroleum industry) to engineer the rock before mining. These techniques have the potential to enable caving of strong rock and significantly reduce underground mining costs. This will allow lower-grade mineralisation to be economically mined, generate increased profit from existing deposits and lower environmental impacts.

Newcrest also leads research initiatives by conducting industrial tests at Ridgeway to produce a step change in the industry’s knowledge of flow of broken rock in sub-level cave mining. These tests have enabled Ridgeway to increase draw and bring forward substantial future cash flows. The strong relationships developed between ICS members has also enabled one of Newcrest’s mining engineers to work at the Palabora mine in Africa and review Rio Tinto’s operating systems over a six-month period. This secondment helped Newcrest increase its in-depth understanding of Panel and Block Cave mine operations with potential application to new projects the Company has in the pipeline.

During the ICS, Newcrest visited and developed a working understanding of technical designs and operating practices at: LKAB’s Kiruna mine in Sweden; Codelco’s Chuquicamata mine in Salvador; Andina and El Teniente mines in Chile; Rio Tinto’s Palabora Mine in Africa; DeBeers’ Premier, Finsch and Koffiefontein mines in South Africa; and WMC’s Leinster operations in Australia. Most of the sponsors have in turn visited Ridgeway and complimented Newcrest on the mine’s ‘rock factory’ manufacturing style operations.

Cadia Valley seedlings initiative with Landcare Groups

In 2003 Cadia Valley Operations commenced a progressive five year revegetation program on its agricultural farms. Other farmers in the district were briefed about the program and strong feedback was received on a number of aspects of the program. The strategy focuses on establishment of a network of vegetation corridors across the valley, protecting and enhancing remnant vegetation, providing habitat for threatened species and endangered ecological communities; and riparian restoration to protect creek banks, remove willow trees and improve water quality.

Obviously programs of this type are more effective when done on a broader community basis and in order to encourage participation from other landholders in the district, Cadia Valley Operations offered to assist local residents to establish similar complementary programs by providing free seedlings to members of the Panuara and Springside Landcare Groups.

Cadia Valley Operations undertook to provide all Landcare members with 50 free seedlings every season for the duration of the revegetation program. The seedlings are purchased from a local supplier and are native to the Cadia district. More than 1,500 seedlings were distributed during the 2003/04 year.

A side benefit to this initiative has been renewed interest and membership in the local Landcare groups. In response to expressions of interest from the Forest Reefs district, Cadia Valley Operations has undertaken to support the formation of a new Landcare Group for Flyers Creek.

Newcrest copper concentrate sales

During 2003/04, Newcrest’s operations produced 761,780 ounces of gold. Cadia Valley’s copper-gold concentrate contained 682,287 of these gold ounces. In addition to the gold-in-concentrate, Cadia Valley also produced 328,791 tonnes of copper-in-concentrate.

The majority of Cadia Valley’s copper-gold concentrate is sold under long-term contract to copper smelters in Japan. Newcrest sells the majority of Cadia Valley’s copper concentrate output to Pan Pacific Copper Co Ltd, a joint-venture between Japan’s Nippon Mining & Metal Co Ltd and Mitsui Mining & Smelting Co Ltd. Pan Pacific Copper purchases copper concentrate feed for the Saganoseki Smelter and Refinery on Japan’s southernmost island, Kyushu and the Hibi Smelter on Japan’s Inland Sea. Other customers include Japan’s Mitsubishi Materials Corporation and Dowa Mining Company. Newcrest also sells concentrate to trade merchants, who deliver the material under their own contracts to a variety of regional smelters.

Using both pyrometallurgical and hydrometallurgical processes, the smelters extract the copper and gold from the copper concentrate, as well as silver. The sulphur in the concentrate is used as fuel in the autogenous flash-smelting process, with residual sulphur being captured and processed into sulphuric acid, which is then in turn used for applications such as fertiliser.

Once the copper and gold processes are complete, the smelters have produced copper metal to 99.9 percent purity and gold bullion to 99.99 percent purity. These high quality products are then sold into Asia’s metal markets or used in the smelters’ own downstream operations.

The Japanese smelters operate under strict environmental protocols. For example, the Saganoseki Smelter and Refinery has co-existed for about 90 years with the local fishing industry – fishing boats moor near the smelter’s own wharves.