#Official Mining Thread

[Wayno]

Mining sector requires additional 87,000 new workers

The most rapid increase in labour demand will be in South Australia, with a 100 per cent rise.

this is indeed very conservative, and of course only highlights direct mining industry jobs, not the 1000's of peripheral jobs that must follow...

[ozisnowman]

The major thing his is BHP is sitting one a massive resource which wont vanish by itself
and which is expected to last over 100 years so whether they decide to expand the mine now
or in a few decades time it will still happen and will be a big impact to this state.

[Wayno]

The major thing his is BHP is sitting one a massive resource which wont vanish by itself
and which is expected to last over 100 years so whether they decide to expand the mine now
or in a few decades time it will still happen and will be a big impact to this state.

yes, and for the record - BHP are already mining at Olympic Dam, producing 8% of the worlds uranium!

The tantalizing thing about OD is that Uranium is a hot commodity, and world demand is expected to well outstrip supplies in a few years time. Expanding OD to coincide with that expected shortage will deliver many billions of dollars to BHP (purely from uranium), but unfortunately the negative media articles seen of late choose to ignore this fact, and focus on the Cu & Au deposits only.

[UrbanSG]

From adelaidenow.com.au:

Terramin's inaugural shipments from Angus Mine dispatched
CAMERON ENGLAND
July 28, 2008 02:00pm

THE first trucks rolled out of Terramin Australia's new zinc and lead mine near Strathalbyn today, bearing concentrates bound for Port Adelaide and Port Pirie.

It is 160 years since the first mine was started in Strathalbyn, and 50 since a new metal mine was started in the Adelaide Hills, Terramin executive chairman Kevin Moriarty said.

The mine is expected to inject $30 million per year into the regional economy, and has created more than 150 jobs.

"This mine, situated in a rehabilitated quarry, clearly shows that operations such as this can coexist responsibly with the local community,'' Dr Moriarty said.

"Mines do not have to be situated in remote locations. They can be situated close to centres of population and augment the rural economy, of particular significance given the recent drought.''

Barossa Transport company Linke haulage has been contracted to transport the concentrates to Port Adelaide and the Port Pirie smelter.

The zinc concentrate will be shipped to an Asian smelter once a 5000 tonne parcel had been accumulated, expected in September. The lead concentrate, which also contains copper, would be processed at Port Pirie, with the first payment expected in early August.

The author owns Terramin Australia shares.

[Wayno]

Collaboration between SA & WA to process mineral sands

Such teamwork! and who would have thought that special legislation is required in WA to allow cross-state mining collaboration anyway, this is more good mining news for SA, and should generate royalties in the vicinity of $8m-15m per year for us!

http://www.wabusinessnews.com.au/en-sto ... extension-

WA govt approves Iluka extension
The state government has approved a plan to extend the life of Iluka Resources Ltd's mineral sands processing facility near Geraldton by more than 10 years.

The plan will allow Iluka to import 600,000 tonnes of heavy mineral concentrate from South Australia and process it at the Narngulu facility.

Premier Alan Carpenter said legislation would be introduced into the spring session of state parliament to amend the State Agreement covering Iluka's Mid-West operations and allow the plan to be adopted.

"This arrangement will allow Iluka to maintain its considerable presence in the Mid-West region, despite the expected decline in production from its Eneabba mining leases as known reserves are exhausted," Mr Carpenter said.

Mr Carpenter said Iluka had also proposed a $60 million upgrade of its processing facilities to accommodate the plan.

He said this expansion would predominantly use local contractors and suppliers.

Resources Minister Francis Logan said Iluka's Jacinth-Ambrosia deposit in South Australia contained an estimated six million tonnes of heavy mineral concentrate.

Mr Logan said shipments from the South Australian port of Ceduna to Geraldton were expected to begin in early 2010, with up to 350,000 tonnes of zircon to be produced at Narngulu each year.

"This plan has broad support from industry and government and will significantly increase the $120 million Iluka already spends in the Mid-West each year," he said.

[UrbanSG]

Typical Victorian re: the 'there ain't much else happening there' line in te article below. Last time I checked finance and manufacturing are suffering in the current economic climate the most, some of Victoria's biggest employers. At least we are moving away from standard manufacturing which will continue to decline to more advanced manufacturing and obviously mining and other industries.

Anyway this article is good news for mining in our state. From the Age website:

SA port project precedes a storm of iron ore export activity
July 28, 2008
Barry FitzGerald

ONESTEEL did what big companies do back in December 2007 when it slammed the door on the ambitions of a bunch of South Australian iron ore juniors to leverage off OneSteel's export facilities at Whyalla.

The reluctance of the iron ore-steel producer to give the juniors a leg up was of the variety we've seen from Rio Tinto and BHP Billiton in the Pilbara. But as Andrew Forrest's Fortescue has shown, you can't lock competitors out forever when the prize is big enough.

And so it is in South Australia, a place that needs to encourage all the mining activity it can get because there ain't much else happening there.

Some time soon the Department of Transport, Energy and Infrastructure will confer preferred tender status on one of the groups or consortiums that have put their hands up to build a common user deepwater port at Port Bonython, near the northern end of Spencer Gulf and 25 kilometres from Whyalla.

Santos has used Port Bonython for the export of crude oil and liquids since 1984. It is also where BHP has plans to build a desalination plant to meet the huge water demands of an expanded Olympic Dam, and perhaps export some copper-uranium concentrates to China.

But Garimpeiro's interest here is in the SA junior iron ore groups that between them have plans to be exporting 10 million tonnes of iron ore annually from 2010 and 20 million tonnes from 2015.

At a blended iron price of $100 a tonne, that represents potential annual export revenue of $1-$2 billion.

That's the equivalent of 28,000-56,000 Mitsubishi 380s being built year-in, year-out in SA.

Not that Mitsubishi got anywhere near that sales rate before killing off the 380.

But it does give an idea of why the SA Government is super keen on the resources industry filling the void left by SA's manufacturing demise.

Bob Duffin's Western Plains Resources has been playing a lead role in getting the Port Bonython export port up and running.

So much so that WPG is part of one of the consortiums in the tender to build the facility.

Not that WPG intends being a port owner. It just wants to make sure one gets built.

WPG has some good reasons for that.

It wants to bring its Peculiar Knob direct shipping iron ore project into production as soon as possible, at an annual rate of 3 million tonnes.

About a year after the start of Peculiar Knob, the plan is to bring the nearby Buzzard and Tui deposits into production at an annual rate of 1.5 million tonnes.

At the all-up rate, WPG's direct shipping iron ore project would have an initial mine life of 10 years.

Because the Port Bonython port option will take time to unfold, WPG could start earlier, moving by rail about 1 million tonnes-a-year over the 2200 kilometres to Darwin for a year or so.

Then it could switch to Port Bonython (600 kilometres away) at the higher rate when that facility becomes available.

The recent bumper increase in iron ore prices means that the Darwin option would still leave a cash margin of about $25 a tonne.

For a company that on Friday that was valued at all of $87 million (94¢ a share), it wouldn't be a bad start.

But assuming the Port Bonython option goes live by late 2010, the cash margin would be more like $50-$60 a tonne on eventual annual output of 4.5 million tonnes a year.

Piers Reynolds at Veritas Securities reckons WPG's earnings before interest, tax, depreciation and amortisation (EBITDA) could be $22.3 million in the 2010 financial year before scooting off to $166.1 million in 2011.

It is little wonder then, that WPG has had to install a revolving door at its head office to cope with the steady procession of Chinese, Korean, Indian and Singaporean interests wanting to provide funding and offtake arrangements for the Peculiar Knob project.

Laterite thinking not hurting nickel sulphide
PERTH broker Patersons makes a good point in a recent research report on the gang of junior to mid-cap nickel sulphide producers that have come on to the scene.

Like their bigger laterite nickel cousins, the sulphide nickel producers have been beaten up this year because of the slide in the nickel price from more than $US14 a pound to $US8.25 a pound.

But, unlike their laterite cousins, the sulphide nickel producers are not feeling anywhere near the cost pressures that the capital-hungry laterites are feeling because of the sharply higher prices for acid, diesel and power/gas.

Patersons says the pressure on the laterite operations has lifted the cost curve for global production. That means that if the world wants to continue to use the stuff in shiny stainless steel, it had better get used to paying a higher long-term average price.

The Patersons report covered six sulphide producers, all of which it rated as a buy. They were Panoramic, Mincor, Independence, Albidon, Mirabela and Western Areas.

"With their strong balance sheets and high-margin production our nickel sulphide miners continue to operate at high margins and the whole sector is cheap," Patersons said.

They also suggested that BHP's new Ravensthorpe laterite project could require $US10 a pound nickel prices to make them viable. Ouch.

At the all-up rate, WPG's direct shipping iron ore project would have an initial mine life of 10 years.

Because the Port Bonython port option will take time to unfold, WPG could start earlier, moving by rail about 1 million tonnes-a-year over the 2200 kilometres to Darwin for a year or so.

Then it could switch to Port Bonython (600 kilometres away) at the higher rate when that facility becomes available.

The recent bumper increase in iron ore prices means that the Darwin option would still leave a cash margin of about $25 a tonne.

For a company that on Friday that was valued at all of $87 million (94¢ a share), it wouldn't be a bad start.

But assuming the Port Bonython option goes live by late 2010, the cash margin would be more like $50-$60 a tonne on eventual annual output of 4.5 million tonnes a year.

Piers Reynolds at Veritas Securities reckons WPG's earnings before interest, tax, depreciation and amortisation (EBITDA) could be $22.3 million in the 2010 financial year before scooting off to $166.1 million in 2011.

It is little wonder then, that WPG has had to install a revolving door at its head office to cope with the steady procession of Chinese, Korean, Indian and Singaporean interests wanting to provide funding and offtake arrangements for the Peculiar Knob project.

[Wayno]

a bigger than expected pot of gold at the end of the rainbow

Wow! the size of this mine keeps growing and growing. Good on you lads!

http://www.news.com.au/adelaidenow/stor ... 55,00.html

DOMINION Mining is finding gold faster than it can produce it at its Challenger mine in South Australia's west.

The company said it had increased its gold reserves at Challenger by 16 per cent to 727,860 ounces in the six months to the end of June.

This was an increase from 625,940 ounces and allowed for production of 53,300 ounces. It had 1.16 million ounces of gold at the less confident resource status.

The company said it had "outstanding exploration success'' from its Challenger deeps drilling program.

"Since the commencement in January 2007 of a more aggressive exploration strategy, involving both the Challenger deeps surface drilling and exploration from underground access, over 600,000 ounces have been added to the reserve base at a cost of $15 per ounce,'' the company said.

"It is planned to maintain this level of exploration activity over the next 12 to 18 months with a target of further increasing reserves by over 400,000 ounces at a cost of around $20 per ounce.''

Dominion is currently assessing an expansion program which would take ore throughput from 430,000 tonnes per year to about 650,000.

The company said any expansion was likely to involve the installation of a shaft for ore haulage, as opposed to retrieving ore via the decline by truck.

"A ventilation shaft will be commissioned by mid-2009 to maximise productivity and scheduling flexibility when mining the principal shoots at depth,'' the company said.

"A final decision will be made on the expansion at the end of 2008. Should it proceed, it is expected that construction would take around 12 months with increased production commencing in early 2010.''

[Jim]

These are the projects that will grow SA, roll on 2010 This great news for SA “in the west” do we have a SA mining map or have I missed it?

[Wayno]

These are the projects that will grow SA, roll on 2010 This great news for SA “in the west” do we have a SA mining map or have I missed it?

The best resource is the latest MESA journal published quarterly by the Dept of P.I.R ==> http://www.pir.sa.gov.au/minerals/publi ... a_journals. Next one is due out in mid-august.

also some good maps here ==> http://www.pir.sa.gov.au/minerals/publications/maps

[paul]

SA port project precedes a storm of iron ore export activity
July 28, 2008
Barry FitzGerald

ONESTEEL did what big companies do back in December 2007 when it slammed the door on the ambitions of a bunch of South Australian iron ore juniors to leverage off OneSteel's export facilities at Whyalla.

The reluctance of the iron ore-steel producer to give the juniors a leg up was of the variety we've seen from Rio Tinto and BHP Billiton in the Pilbara. But as Andrew Forrest's Fortescue has shown, you can't lock competitors out forever when the prize is big enough.

And so it is in South Australia, a place that needs to encourage all the mining activity it can get because there ain't much else happening there.

Some time soon the Department of Transport, Energy and Infrastructure will confer preferred tender status on one of the groups or consortiums that have put their hands up to build a common user deepwater port at Port Bonython, near the northern end of Spencer Gulf and 25 kilometres from Whyalla.

Santos has used Port Bonython for the export of crude oil and liquids since 1984. It is also where BHP has plans to build a desalination plant to meet the huge water demands of an expanded Olympic Dam, and perhaps export some copper-uranium concentrates to China.

But Garimpeiro's interest here is in the SA junior iron ore groups that between them have plans to be exporting 10 million tonnes of iron ore annually from 2010 and 20 million tonnes from 2015.

At a blended iron price of $100 a tonne, that represents potential annual export revenue of $1-$2 billion.

That's the equivalent of 28,000-56,000 Mitsubishi 380s being built year-in, year-out in SA.

Not that Mitsubishi got anywhere near that sales rate before killing off the 380.

But it does give an idea of why the SA Government is super keen on the resources industry filling the void left by SA's manufacturing demise.

Bob Duffin's Western Plains Resources has been playing a lead role in getting the Port Bonython export port up and running.
......................

Why on earth is this company (Western Plains Resources) based in Sydney and not Adelaide? It's sole business is South Australian iron ore. I'd like to see the State Government pushing these mining companies to ensure the broader corporate jobs from mining activity don't bypass SA. It's our iron ore damn it!!!

[Wayno]

Why on earth is this company (Western Plains Resources) based in Sydney and not Adelaide? It's sole business is South Australian iron ore. I'd like to see the State Government pushing these mining companies to ensure the broader corporate jobs from mining activity don't bypass SA. It's our iron ore damn it!!!

I would not get too hung up here. This is simply the reality. The more mines in SA the merrier in my opinion, and we should not prejudice against their HQ location (although having their office located in SA is obviously better).

To be clear we still get all royalty payments, and the majority of jobs are here too (on site mining activities).

[Jim]

Why on earth is this company (Western Plains Resources) based in Sydney and not Adelaide? It's sole business is South Australian iron ore. I'd like to see the State Government pushing these mining companies to ensure the broader corporate jobs from mining activity don't bypass SA. It's our iron ore damn it!!!

I would not get too hung up here. This is simply the reality. The more mines in SA the merrier in my opinion, and we should not prejudice against their HQ location (although having their office located in SA is obviously better).

To be clear we still get all royalty payments, and the majority of jobs are here too (on site mining activities).

I think like Wayno at this stage the main thing is to get the mines off the ground.
I believe once we get a critical mass of projects the head offices will follow. Particularly if we can encourage more mining processing, supply, equipment manufacturers and assemblers to establish here. To me mining support infrastructure like port upgrades, rail, power and desalinated water should be the states absolute priority.
Ps. thanks Wayno for the map link

[Wayno]

29 PACE Sites under development in SA

The state govt is partially funding the exploration costs of these ventures as a part of it's PACE Initiative.

pace.jpg (76.11 KiB) Viewed 2133 times

It would be fantastic if only 40% of them come to fruition. Detailed map ==> http://www.pir.sa.gov.au/__data/assets/ ... on_map.pdf

[Jim]

Hopefully this will resolve the stand off at Port Lincoln

Centrex to buy Tumby Bay port land
August 1, 2008 - 2:16PM
Source: ABC
Centrex Metals has reached an agreement to buy 105 hectares of land on South Australia's Tumby Bay coast for the development of a deep sea port.

The company has been at loggerheads with the Port Lincoln community over plans to ship its ore from the city's main wharf.

The land will form part of the company's two-port strategy which, if approved, will also include the Port Lincoln site.

Settlement on the land is expected by the end of September.

[Wayno]

Hopefully this will resolve the stand off at Port Lincoln

Centrex to buy Tumby Bay port land
August 1, 2008 - 2:16PM
Source: ABC
Centrex Metals has reached an agreement to buy 105 hectares of land on South Australia's Tumby Bay coast for the development of a deep sea port.

The company has been at loggerheads with the Port Lincoln community over plans to ship its ore from the city's main wharf.

The land will form part of the company's two-port strategy which, if approved, will also include the Port Lincoln site.

Settlement on the land is expected by the end of September.

i wonder who owns the land? i bet all the holiday shack owners at Tumby Bay are real happy about this. Hopefully the land is south of the actual main bay area so they don't see ships coming/going all day everyday...