#Official Mining Thread

[Wayno]

I also don't understand the paranoia over having a Chinese company as the owner of an Australian mine. The subsidiary is still an Australian registered company acting on Australian soil under Australian laws and paying tax to the Australian Government. The Corporations Act and Trade Practices Act will apply to them like anyone else. It's no different to General Motors Holden.

Well it is different, and will remain so for some time. We have long-standing relationships (and close cultural ties) with many western countries who invest in australia - many of us even go to war together. We permit many of them to have large direct $$$ investments (and even a military presence) in Australia.

China is a new friend - we're still working the relationship. Suspicion of spying and state secrets is strongly evident in both directions. Rudd's push to bolster our defence (ships/subs) is in part in response to china's increased miltary presence in the apac region.

[Prince George]

Australia's net foreign debt & equity is roughly 70% of GDP and all of it bar a minuscule amount is private sector investment. It's the national equivalent of having a mortgage that's only 70% your annual salary. It's not a problem at all.

I won't pretend to be an economist, but is GDP the right thing to compare against the debt holdings. The butcher spends a dollar at the baker, who then spends a dollar at the butcher; if I understand correctly, that represents two dollars in the GDP; for that to be used to service our debt, the butcher must go without bread, the baker without meat. It seems to me that the trade balance is the right comparison to make, because it's the value of our exports that is the way that we actually pay the debt down. Surely GDP is only useful for paying foreign debt to the extent that we can convert them to exports.

Nor does our foreign debt seem like a mortgage; mortgages are secured loans, this is more like a credit card.

Meanwhile, the US foreign debt sits at 20-25% of GDP, where it was half that in 1998, and back in 1980 they were foreign creditors. I hear economists warning that by 2020 it could rise to 65%. They certainly seem to be concerned about getting into the situation that we already enjoy.

[AtD]

I won't pretend to be an economist, but is GDP the right thing to compare against the debt holdings. The butcher spends a dollar at the baker, who then spends a dollar at the butcher; if I understand correctly, that represents two dollars in the GDP; for that to be used to service our debt, the butcher must go without bread, the baker without meat. It seems to me that the trade balance is the right comparison to make, because it's the value of our exports that is the way that we actually pay the debt down. Surely GDP is only useful for paying foreign debt to the extent that we can convert them to exports.

Nor does our foreign debt seem like a mortgage; mortgages are secured loans, this is more like a credit card.

Meanwhile, the US foreign debt sits at 20-25% of GDP, where it was half that in 1998, and back in 1980 they were foreign creditors. I hear economists warning that by 2020 it could rise to 65%. They certainly seem to be concerned about getting into the situation that we already enjoy.

Your point regarding GDP is valid and I'll concede that it's not a totally fair comparison to that of a salary. However you can't (meaningfully) compare debt to the trade balance because it bounces above and below zero so often. You'll get silly results like our $700b debt was 400% of our trade balance this year and -300% last year. (Australia was running trade surpluses during the commodities boom).

Likewise, I wouldn't draw the comparison between foreign debt and a credit card. Almost all of it is in the form of corporate bonds, whose holders are much higher on the pecking order of creditors than a credit card company would be. Likewise, a huge portion is debt issued by the banking system which is regulated up the arse. Hence the interest rates demanded by holders of Australia's debt is considerably lower than that demanded by a credit card.

Regarding the US debt I think you're confusing foreign debt with public debt.

[Prince George]

Regarding the US debt I think you're confusing foreign debt with public debt.

I don't believe so. US public debt stands at roughly $12 trillion, or 90% of GDP; of that, $3.4 trillion are foreign owned treasury bonds. But this is getting away from mining

[AtD]

So US public debt is higher than foreign debt? How interesting.

[Wayno]

Certainly worth clarifying...

Would be good to know which parts of the Woomera range are off limits.

http://www.news.com.au/adelaidenow/stor ... 62,00.html

A MINING industry group has asked the Federal Government to clarify which areas of South Australia's Woomera weapons testing range can be explored and mined.

The South Australian Chamber of Mines and Energy (SACOME) also wants discussions with defence officials on what conditions might be imposed on mining companies seeking to access the protected area.

SACOME said most of the 127,000 square kilometre defence range was covered by more than 120 mineral exploration leases issued by the SA government. But lease access is controlled by the Federal Government.

SACOME said the area was considered to be highly prospective, holding great economic potential.

"What we seek now is greater consultation between defence and the resources industry about how to co-exist in a way that continues to ensure defence security, transparent access for explorers, transparent conditions applying to mining activity and a clear picture of which areas are open to minerals activity and which are sensitive no-go zones," chief executive Jason Kuchel said.

"The mining sector recognises that defence priorities and control are necessary over the area. But the sector has proven it can co-exist within the Woomera boundaries."

Mr Kuchel said greater clarity on access would allow the resources sector in South Australia the opportunity to make more reasoned commercial judgements on investment.

He said the industry would enter 2010 knowing there was a resurgent global demand for metals and would be looking to ramp up mineral exploration, discovery and mine development.

"Without greater co-operation and dialogue between all the parties, South Australia's ability to attract mining investment and job creation opportunities will be diluted," Mr Kuchel said.

[Wayno]

Mining exploration continues to expand

SA set a mining exploration goal for 2008/2009 of $100m. Well, we are tracking at nearly double that goal ($194m). Quite amazing given the GFC. A big pat on the back for Minister Holloway's PACE initiative...

From PIRSA Website

Minister for Mineral Resources Development Paul Holloway said today total expenditure on mineral exploration in South Australia in the September quarter rose for the second consecutive three-month period.

Mr Holloway says Australian Bureau of Statistics figures show expenditure on mineral exploration in the September quarter rose 15.3% to $48.2 million compared with the previous three-month period.

This increase builds on the 16.1 percent rise in exploration expenditure recorded in the June quarter.

Mineral exploration expenditure for the quarter comprised $30.1 million for new deposits, or 62.4% of total spending, representing a continued trend in South Australia towards exploration in frontier and greenfields mineral regions

“These results provide further confirmation that South Australia’s minerals sector has turned the corner after the downturn last year triggered by the Global Financial Crisis,” Mr Holloway says.

“The speed in which expenditure appears to have recovered is testament to the confidence mining companies have in South Australia as a destination to invest in high-risk exploration. This confidence has been underpinned by an improvement in global commodity prices.

Mr Holloway says the Rann Labor Government is determined to continue to grow our State’s economic prosperity through the minerals and energy sectors.

“This is demonstrated by the call this month for interest in the sixth round of collaborative drilling grants as part of the South Australian Government’s Plan for Accelerated Exploration,” he says.

“While expenditure in mineral exploration is yet to return to the peak established before the Global Financial Crisis, it is heartening that we are back on track to record another strong performance compared to the $40 million a year average before the introduction of PACE.”

The ABS figures show mineral exploration expenditure for the 12 months to end of September 2009 slowed to $194 million.

“While this is a slowdown from the 2008/09 financial year, South Australia has significantly exceeded the South Australian Strategic Plan target of spending above $100 million a year,” Mr Holloway says.

“All of this investment continues to pay dividends with a further four to five mines expected to be approved in South Australia during the next year, building on the 11 currently operating mines.”

[Wayno]

Sulphuric Acid mine on the way

I confess i know little about sulpuric acid mining, whether they extract acidic liquid that's sloshing around underground, or perhaps the acid is crystaline (trapped in rock/sediment) and chemically extracted (leached) in-situ. Anyways, another mine on the 2-3 year horizon:

HAVILAH Resources will need about $100 million in funding to construct a sulphuric acid plant at its Mutooroo project in South Australia.

The Mutooroo Acid Copper-Cobalt project, 60 km west of Broken Hill, remains a stand-out in terms of financial viability for the company, chairman Bob Johnson told shareholders.

"We are progressing the feasibility study on Mutooroo and will soon receive the sulphuric acid plant design from our consultant on the project,'' Mr Johnson said.

Once that is received, Havilah will complete one small final round of drilling at Mutooroo to finalise the JORC resource and complete the economic model.

"We anticipate that Mutooroo will require funding of the order of $100m to construct the acid plant. With the acid plant, we could not only become one of the largest producers in Australia of sulphuric acid, but also produce copper, cobalt, iron ore and co-generation electricity.''

The company said it was investigating funding options that allows the company to ``retain as much of this valuable project as possible''.

The "tumultuous'' year on the stock market has also led to some reassessment of strategies for its Kalkaroo copper project as well.

Together with Swiss joint venture partner Glencore, the company will re-assess the high tonnage- high capital strategy that was originally planned for Kalkaroo.

"Because funding at that scale is now highly unlikely to be accessed, a more modest strategy of a lower annual production has also been assessed as part of the feasibility study.

"In parallel, a smaller scale high grade start-up scenario has also been assessed as an economical way to get into production without large capital outlays.''

After a year of minimal exploration to conserve funds, the company will step up exploration again, it said.

[rhino]

This is an interesting project. I wonder how they will make it? Sulphuric Acid (H2SO4) requires Hydrogen, Oxygen, and Sulphur. Water is H2O. Pyrites (such as what was mined at Brukunga) is Iron Sulphide. Iron oxidises, pesumably creating the extra oxygen atoms required. So mixing a metal sulphide (in this case, apparently, maybe a coppersulphide) with water, allowing oxidisation of the metal, could result in H2SO4 plus Copper.

I have no idea what I'm talking about.

[Wayno]

I have no idea what I'm talking about.

[fabricator]

Should have built the sulphuric adic mine at Lake Alexandrina and Lake Albert, plenty of acid there.

[Wayno]

Hillgrove gets state approval for its Kanmantoo mine

A step closer for this local operation. Only 12-15 months til full production is underway...

From SMH:

South Australia's Treasurer Kevin Foley has given the green light for a new $130 million copper-gold mine to be built in the state.

Mr Foley, who is Acting Premier while Mike Rann is in Copenhagen for a global climate summit, approved the Kanmantoo project, which will be operated by Hillgrove Resources Ltd.

"This will be a fantastic fillip for the local community, with the potential to directly generate many new jobs for the local economy," Mr Foley said in a statement.

The new mine will be located 55 kilometres east of Adelaide, near Callington.

"Back in 2002, there were less than 3,500 people employed full time in our state's mining industry and today it directly employs about 7,700 people," Mr Foley said on Friday.

Hillgrove now plans to commence a Mining and Rehabilitation Program (MARP) for the Kanmantoo project, which will be the company's flagship operation.

Kanmantoo is thought to contain 292,200 tonnes of copper, 191,100 ounces of gold and 3.3 million ounces of silver, the company said.

Construction at Kanmantoo is expected to be finished by the first quarter of 2011, generating about 17,000 tonnes of copper in concentrate and 8,000 ounces of gold per annum.

[mattblack]

Is it possible to do a map showing where existing, new and proposed mines are and thier relative value? Just to get an overview and perpective on this 'Boom ' thats comming.

[skyliner]

Many pages back Wayno submitted a map to this effect - have a look.

SA - STATE ON THE MOVE

[Wayno]

Is it possible to do a map showing where existing, new and proposed mines are and thier relative value? Just to get an overview and perpective on this 'Boom ' thats coming.

Jump back here (May 2009). Read the post and the attached MESA journal ==> http://www.sensational-adelaide.com/for ... 615#p61660

Also look at this (May 2008 - a bit old, but still 90+% accurate - maybe missing a few recent discoveries):

mining-activity-map.JPG (226.36 KiB) Viewed 1829 times

Lastly look at this one (Dec 2008) - gives an idea of current vs future. Remember that your average mine takes 3-5 years to develop, lasts for 7-15 years (except for Prominent Hill - 25yrs, Olympic Dam - 100years), and also pls note all these projects/prospects will never be active at once (it would saturate the market and kill prices, not to mention raises salaries due to lack of people). My guesstimate is we'll level-out at 20-25 concurrent mines in 4-7 years time (that includes several very large mines and something like 5-8 times current royalties):

Minerals_pyramid.jpg (405.91 KiB) Viewed 1829 times