#Official Mining Thread

[UrbanSG]

We are no where near WA at this stage, prospects are a lot different to actual mines. From the adelaidenow website today:

Minerals prospects outstrip WA
June 11, 2008 03:00pm

SOUTH Australia is moving into the mining big league with minerals prospects outstripping those of Western Australia, Premier Mike Rann says.

Mining is poised to overtake wine as the state's dominant industry, Mr Rann told the National Press Club in Canberra today.

"Spending on mining exploration has increased 10-fold in five years, now outstripping every state other than WA,'' Mr Rann said.

"We are now ranked ahead of Western Australia for the first time in terms of mining prospects.''

The planned expansion of Olympic Dam, operated by BHP Billiton, in the state's north, was at the heart of the booming resource sector, he said.

"We are talking about a mine that will be around for 150 years."

"They spent $500 million there in the last year alone."

"What we are seeing in SA is not simply a rush that will burn brightly and then fade away, but an expansion that will be with us for a 100 years or more.''

A blanket of sediment cover across South Australia has historically made mineral discovery more difficult than in other regions, he said.

But Mr Rann says his government's survey work and encouragement of exploration has overcome that disadvantage.

"It has come about not because of natural forces, market forces applying ... no one can say that in South Australia,'' he said.

"It came about because of the strategic program put in place the government in 2004.''

Earlier today, SA's Mineral Resources Development Minister Paul Holloway said $79.3 million was spent looking for mineral deposits in the March 2008 quarter, compared with $66.5 million in the same period last year.

More than a third of that outlay, $31.9 million, was spent on searching for new mineral deposits, he said.

"While this level of spending is more than welcome, the real economic benefits for South Australians of this level of exploration won't be felt until the search for new deposits is translated into new mines,'' Mr Holloway said.

[Wayno]

We are no where near WA at this stage, prospects are a lot different to actual mines. From the adelaidenow website today:

Minerals prospects outstrip WA
June 11, 2008 03:00pm

SOUTH Australia is moving into the mining big league with minerals prospects outstripping those of Western Australia, Premier Mike Rann says.
<snip>
"While this level of spending is more than welcome, the real economic benefits for South Australians of this level of exploration won't be felt until the search for new deposits is translated into new mines,'' Mr Holloway said.

Yep, the title of this AdelaideNow article is correct. Simply means more cash was spent searching in SA compared to WA in recent times. It's a game called "Spot the Rann Spin"

[rhino]

That's a little unfair, considering it was Rann who put it into perspective in the same article.

[skyliner]

I find it hard to believe mineral prospects in SA are bigger than in WA. (Even though I would much rather the reverse). Take stock of how vast the iron ore is and the size of developments. I agree with Wayno, there is some 'spin' with the wording - particularly 'prospects'. However you look at it, SA is well on the way to very encouraging economic times ahead, much better than the outlook 10 years back.

SA - STATE ON THE MOVE

[Will]

Until BHP hurries up and gets the detail out in October this sort of speculation will continue. From the Australian today:

BHP warns on mine expansion
Jeremy Roberts | June 10, 2008

BHP Billiton's proposed expansion of its Olympic Dam copper and uranium mine will take longer, cost more and produce fewer jobs than originally expected, according to confidential briefings by the company to industry figures in Adelaide.

BHP wants to massively expand its Olympic Dam operation, in the process constructing the world's largest open-cut mine, and is at a delicate stage of negotiations with the South Australian Government, which must decide whether to approve the expansion.

For more than a year, the company has been lobbying for more favourable conditions, as it looks for ways to reduce the cost of the project.

BHP controversially proposed in July last year to export uranium-infused copper concentrate to China to avoid costly smelting at the remote Olympic Dam site, 570km northwest of Adelaide.

Premier Mike Rann warned BHP the "China option" was "not on", because the state would lose hundreds of jobs and industrial investment. But it appears BHP is sticking to its guns, telling business and political figures in Adelaide recently that the project faced rising costs and lengthening timelines, and was unlikely to meet Mr Rann's expectations.

According to sources who have received the briefing, the proposal to export copper concentrate to China remains part of the company's plans. The exports would begin once capacity of BHP's on-site smelter was reached.

And the number of jobs expected to be created by the expansion has shrunk. The company now estimates the expansion will generate about 8000 construction and permanent jobs in the mining sector.

This compares with the 2006 estimate of 23,000 jobs stemming from the project.

The BHP board is not expected to decide on the expansion until after the next state election, in 2010

Well there goes our 'boom'. :wank:

Such news should not surprise me, BHP is not commited to our state. In fact we should brace for more bad news from BHP later in the year, as they announce that they will relocate their accounting department and back-offices currently located in Adelaide to Melbourne.

I hope the State government sticks to their guns. If BHP wants to use us as a mineral prostitute without contributing anything to the state, then I'd rather the minerals stay in the ground until another operator committed to the state can get them out.

[Wayno]

Well there goes our 'boom'. :wank:

Such news should not surprise me, BHP is not commited to our state. In fact we should brace for more bad news from BHP later in the year, as they announce that they will relocate their accounting department and back-offices currently located in Adelaide to Melbourne.

I hope the State government sticks to their guns. If BHP wants to use us as a mineral prostitute without contributing anything to the state, then I'd rather the minerals stay in the ground until another operator committed to the state can get them out.

it's certainly an interesting soap opera. Lots at stake for public & private enterprise with conflicting media messages becoming all too frequent. Roll on October so we can all get some sleep...

[UrbanSG]

Will, BHP already announced job losses from its back office operations earlier this year, see below. Hopefully this is the extent of the job losses. Over time more BHP office jobs should be created here through the expansion but that it is a fair way down the track.

More jobs and demand for office space will actually come from the associated engineering, construction, machinery etc firms that will need to continue to increase staffing levels to cope with the workload provided by the expansion. That is where the true office jobs growth will come from I believe, not BHP.

Once the mine is fully developed in many years I would think there is also scope to move the entire BHP world base metals headquaters here from South America considering we will have the largest such mine in the world here, Rann has wanted this, maybe he will eventually convince a move. Probably wishful thinking

Article outlining job losses from adelaidenow earlier this year:

CHRISTOPHER RUSSELL, BUSINESS EDITOR
April 30, 2008 05:30pm
ABOUT 50 jobs at BHP's Adelaide office will be lost in a restructuring of the mining company's operations.

However, overall job numbers ``will not alter significantly'' as some new jobs will be created in Adelaide in the restructure, the company said.

The jobs are going from BHP's shared services department which works in areas such as accounts, human resources and supply across the global company's operations.

BHP said no jobs would be lost from its Olympic Dam expansion taskforce - which has taken on 250 new people in Adelaide over the past two years - nor from the "several hundred'' new positions created at the mine site over the same period.

BHP has about 4200 employees in SA and the spokeswoman said a final head count following the restructuring was yet to be determined.

"With the jobs being relocated, people are being asked if they want to relocate,'' she said.

"If they don't want to relocate, they might want to take up a new position being offered here in Adelaide.

"If they don't want either of those options, then the third option is redundancy."

"Until that process has been completed, the final numbers are up in the air.''

The restructure was precipitated by introducing new computer programs and involves reshuffling work between shared service departments in Houston (Texas), Santiago (Chile), Witbank (South Africa) and Adelaide - or taking the jobs to mine sites or regional offices.

[Will]

Will, BHP already announced job losses from its back office operations earlier this year, see below. Hopefully this is the extent of the job losses. Over time more BHP office jobs should be created here through the expansion but that it is a fair way down the track.

More jobs and demand for office space will actually come from the associated engineering, construction, machinery etc firms that will need to continue to increase staffing levels to cope with the workload provided by the expansion. That is where the true office jobs growth will come from I believe, not BHP.

Once the mine is fully developed in many years I would think there is also scope to move the entire BHP world base metals headquaters here from South America considering we will have the largest such mine in the world here, Rann has wanted this, maybe he will eventually convince a move. Probably wishful thinking

Article outlining job losses from adelaidenow earlier this year:

CHRISTOPHER RUSSELL, BUSINESS EDITOR
April 30, 2008 05:30pm
ABOUT 50 jobs at BHP's Adelaide office will be lost in a restructuring of the mining company's operations.

However, overall job numbers ``will not alter significantly'' as some new jobs will be created in Adelaide in the restructure, the company said.

The jobs are going from BHP's shared services department which works in areas such as accounts, human resources and supply across the global company's operations.

BHP said no jobs would be lost from its Olympic Dam expansion taskforce - which has taken on 250 new people in Adelaide over the past two years - nor from the "several hundred'' new positions created at the mine site over the same period.

BHP has about 4200 employees in SA and the spokeswoman said a final head count following the restructuring was yet to be determined.

"With the jobs being relocated, people are being asked if they want to relocate,'' she said.

"If they don't want to relocate, they might want to take up a new position being offered here in Adelaide.

"If they don't want either of those options, then the third option is redundancy."

"Until that process has been completed, the final numbers are up in the air.''

The restructure was precipitated by introducing new computer programs and involves reshuffling work between shared service departments in Houston (Texas), Santiago (Chile), Witbank (South Africa) and Adelaide - or taking the jobs to mine sites or regional offices.

Mate, the the problem I see with BHP is based on the conversations that I have with a very close mate who works for BHP who is sadly having to move interstate in the next month because BHP is according to him going to move most of their office workers in Adelaide to Melbourne. I could have dismissed this as baseless innuendo, but I was having a conversations with a colleague of mine at university whose partner also works for BHP, and although her partner does not know my mate, she repeated a similar story. The reasoning behind BHP's actions is to offer a 'sweetener' to Melbourne after they lose the BHP headquarters to Perth. As a result Perth gets the new BHP HQ, Melbourne gets the office workers and operations based in Adelaide. And I think to myself. BHP will achieve multi-billion dollar profits based on our mineral deposits. And at the moment I don't' see any return for our state. The shareholders and executive fat cats are going to profit from our minerals, and at the moment I see noting positive coming from BHP. With Olympic Dam, I was promised the worlds biggest mine; a mine that would single handedly assure the future of out state. I think we can all appreciate my disillusionment with BHP's announcement that the mine will now employ only one third of the workers expected, process the minerals in China and now will develop the mine over many years, instead of the all at once. Now I understand why the state government has projected a modest 2.75% economic growth for the next five years. They probably know something that we don't'. I suspect that this promised 'boom' will now probably be a 'period of accelerated growth' instead of a boom. What a shame. What a shame.

[Wayno]

The prospect of a scaled back Olympic Dam should not (fingers crossed) impact Foley's recent budget plans to spend $2b on PT across a decade. I only say this as the govts detailed budget document states that the benefits of a larger Olympic Dam mine have not yet been factored into future cashflows. Our future debt is therefore being reliably funded from other sources...

[UrbanSG]

I still believe that during the mine's huge expansion the economic impacts for SA will be very significant. They could definately be maximised if BHP were to treat this state decently and not conduct the processing in China. Hopefully the job losses outlined in that article in April are what you are talking about Will and it goes no further.

The biggest threat to our state and the mine's future is if the commodity boom turns into a bust. Everyone says it can't happen because of China and India but that was being said about Japan a few decades ago too and then it all turned. There are always cycles, booms do not last for ever. Once a bust comes along virtually no new mines or expansions will take place until the next boom.

Lets just keep our fingers crossed that the expansion occurs at all. Can't take anything for granted.

[skyliner]

Can't take anything for granted - so true.

Glad the state gov't did not assume either according to info from Wayno. I believe the transport plan wil materialise over the 10 years allocated.

Quite depressing overall. However, I also still believe there is still much credibility to mines being a great prospect for our state.(with accompanying spinoffs). It's not all over. Just take a comprehensive look atall of Wayno's posts.

SA - STATE ON THE MOVE

[UrbanSG]

Although WA likes to give it to us over here in Adelaide their gas crisis is getting worse and that is not good considering the nation is basically riding on the back of the WA mining boom. There could be large scale job layoffs.

The eastern states and SA gas supplies are all linked aren't they? I wonder if something similar could happen here too? Raises a lot of questions.

Article on the Australian website tonight:

Gas Crisis To Worsen
June 15, 2008

A CRISIS triggered by an explosion at a Western Australian gas plant will worsen this week, state Premier Alan Carpenter said today as unions warned thousands could lose their jobs

The June 3 blast at the Apache Energy plant on Varanus Island cut off one-third of the state's gas supply and the company says it will be up to two months before supply is partially resumed.

Mr Carpenter said businesses may have to consider cost-cutting measures as they seek alternative, and more expensive, energy supplies.

"Diesel-fired electricity is far more expensive than gas-fired electricity, so businesses will be making the decision as to whether the increased cost they are going to have to pay for energy warrants them shutting down for a while, or scaling down their production for a while, or standing down their staff for a while,'' he said.

The premier said the coming weeks would be the most difficult of the crisis, which has slowed some mining production, shut down several building material suppliers and created a shortage of clean linen for the hospitality industry after major laundries scaled back their workload.

"I think the most difficult times are ahead of us. I think this week will be very difficult and I think the following week will be very difficult, and I mean very difficult,'' Mr Carpenter said.

"It has taken a while for the impact to wash through, but it's really coming upon us now, economically.''

Secretary of the Unions WA Dave Robinson said hundreds of workers at laundries, abattoirs, freight companies and in timber-related industries had already been stood down.

He predicted that thousands more could be unemployed as the energy shortage continued.

"There are a whole range of flow-on effects that we haven't even contemplated at this stage,'' he said.

[UrbanSG]

Another mine nearing production, the Adelaide to Darwin rail line is going to start to get very busy with this and Prominent Hill close to production and using the line for their transport purposes. This article is from today's adelaidenow website:

IMX Ready to Rock
June 17, 2008 02:30pm

IMX Resources says it expects to hit the ore body at its Cairn Hill iron ore project southeast of Coober Pedy this week.

The Perth-based company is finalising its mining and rehabilitation plan for the $40 million project, expecting to start full-scale mining in the third quarter.

From early 2009, IMX will mine 7.1 million tonnes of ore from two pits at Cairn Hill at a rate of 1.2-1.4 million tonnes per year.

The company started trial mining about two weeks ago, in order to produce 20,000 tonnes of ore for bulk sampling.

Managing director Duncan McBain said the first phase of mining was about getting early cash flow, with a second and third phase planned.

"Our pits here have been designed to maximise early cash flow,'' Mr McBain said.

IMX was aiming to add another 750,000 tonnes per year of exports in phase two by 2010, with phase three targeting an expansion to 3-5 million tonnes per year within five years.

Mr McBain said by this stage the company hoped to be able to export its product through an SA port such as Port Bonython, northeast of Whyalla, which is currently being assessed for its viability as a bulk commodity export facility.

Only about 10 per cent of a 40km trend which hosted the phase-one pits had been drill-tested so far.

The company plans to export magnetite iron ore with a grade of about 54 per cent, along with small amounts of copper and gold.

The ore would be hauled by road to the Adelaide-to-Darwin railway, where it would be railed to Darwin for export to China.

Once in China it would be upgraded to a product with a concentration of greater than 70 per cent.
"This is a premium product in the Chinese market,'' Mr McBain said.

"A lot of people are shipping 60, 58 per cent. What that's doing to the steel mills is it drops the blast furnace productivity."

"Our product allows people to regain some of the productivity they are losing by buying all these other ores.''

IMX has a three-year off-take agreement with Chinese company Tonghua Mining, which invested almost $14 million in IMX in February for a 9.95 per cent stake in the company.

Mr McBain said the project's proximity to Coober Pedy and the Adelaide-to-Darwin railway line was a bonus.

"We have pretty good infrastructure considering we are in a reasonably remote location,'' he said.

"Coober Pedy's very important to us . . . it's a community where people are used to doing mining which is a big advantage.''

Mr McBain said it would be basing its 60-person workforce at Coober Pedy which was within driving distance of the mine.

[rhino]

So they're going to be exporting out of Darwin, but would like to export from Port Bonython. Is that because of cost? Quicker turnaround? Darwin is a heck of a lot closer to China than Port Bonython is. Still, as far as we're concerned, better to export out of a South Aussie port than Darwin I guess.

It's a pity the upgrading of the product is getting done in China and not here. That's a bit of a precident for BHP, although BHP's resource is much bigger. Is there no-one in South Australia who can process magnetite? I thought that's what OneSteel's going to be doing when the hematite runs out in the Middleback Ranges.

[skyliner]

Just wonder what the WA gas crash is likely to do to our mines. They are getting rather excited about the impact in WA and later the rest of Aust.

BTW read recently in the Australian that 30 mines are under process of development in SA and 200 projects for major mining projects are in the pipeline. (Article - Wealth of Exploration Set to Lift The Economy by Jeremy Roberts.)

SA - STATE ON THE MOVE