#Official Mining Thread

[Wayno]

Another large-ish mine. Still early days.

A PERTH company wants to create a $2.5 billion iron ore mine - and 600 jobs - on the Eyre Peninsula.

The open-cut mine would aim to produce at least 12.4 million tonnes of iron ore concentrate a year. It would be the state's largest iron ore mine and rival the OneSteel operations at Whyalla.

The company, Iron Road, has completed a first-stage economic study, which shows that the project, near Wudinna, would be profitable.

Managing director Andrew Stocks said the mine would run for at least 12 years, employ 700 to 1000 people during construction and create about 600 permanent jobs. It's hoped to start construction in early 2015 and extend the mine life to 25 to 30 years.

Mr Stocks said Iron Road would undertake more detailed studies and mine planning and permitting.

"This is a real project that we intend to develop," he said. "This is a very significant result for Iron Road."

"It places our project alongside the top-tier magnetite (iron ore) development projects in Australia.

"This places the Central Eyre Iron Project in an excellent position to progress to the next phase of development, as we seek to introduce a large development partner.

The project would involve building a mine, a slurry pipeline and pumping stations to transport the ore to a proposed port at Sheep Hill north of Tumby Bay, a small desalination plant to supply water, a crushing and grinding plant and power lines from Port Augusta.

The mine would be open cut down to a depth of 550m. While the 12.4-million-tonne project would be viable, the company is looking at increasing the project size by 50 to 100 per cent in a second stage.

Iron Road has found 1.23 billion tonnes of iron ore resources at the project, but is continuing to drill, with the aim of discovering between 2.8 and 5.8 billion tonnes.

The plan has been welcomed by the local council and the State Government, with Mineral Resources Development Minister Tom Koutsantonis saying the announcement confirmed the potential of the state's iron ore sector.

Wudinna District Council chairman Timothy Scholz said the company had done a good job of working with the community to keep it abreast of the project's progress.

While there would always be issues to be worked through with a project of this size, they had so far had a good relationship, he said.

"Overall the community is positive," Mr Scholz said.

"But as it gets closer to the reality that this is a major, mine that will cause a few people to have second thoughts. We've taken the approach that if the resource is good enough, council opposing it won't stop it, neither will landholders, so the best way to do it is to work as closely as possible to make sure that we can maximise benefits across our whole community."

Mr Scholz said Wudinna was likely to serve as a base for the mine, which was just 22km away.

"Iron Road has said to us that while there will be fly-in, fly-out elements, their first choice is to employ local people," he said.

Mr Scholz said that after about 15 years of decline, the local population, which stood at about 1300, was on the rise again, and such a project would only benefit that. Mr Koutsantonis said the plan would benefit from SA's 2 per cent royalty rate for new mines.

"SA is being viewed by many companies both here and abroad as the centre of investment in new mines with a stable regulatory regime and a government that puts its money where its mouth is in finding the pre-competitive data and standing side by side with mining companies in the high-risk taking exploration stages," he said.

"Iron Road will now need to progress community and stakeholder consultation, and complete a comprehensive environmental assessment prior to lodgement of a mining proposal." The proposed mine is one of several projects in development on the peninsula, worth a combined $3.7 billion.

Projects at various stages of development include a $600 million bulk commodities port proposed for Port Bonython, just north of Whyalla, a $180 million port proposed for Sheep Hill, near Tumby Bay, IronClad Mining's $26 million Wilcherry Hill project near Kimba and several exploration programs on the eastern side of the peninsula.

The State Government will today release the guidelines for an environmental impact study for Arafura Resources' proposed $1 billion rare earths complex near Whyalla.

[Wayno]

Rare earth processing at Whyalla a step closer

This is a great opportunity for SA to value-add, not just ship raw minerals.

From mineweb

The advanced rare earths explorer Arafura Resources Ltd (ASX: ARU) has welcomed the release by the South Australian Government of guidelines for an Environmental Impact Statement on a rare earths complex at the industrial city of Whyalla.

Details on the EIS guidelines were released today by South Australia's Urban Development and Planning Minister John Rau and Mineral Resources Development Minister Koutsantonis.

The Whyalla Rare Earths Complex was granted Major Project status by the SA Government last September, and Arafura said release of the EIS guidelines marks an important milestone development of the Nolans project in the Northern Territory.

Arafura's managing director Dr Steve Ward said development of a rare earths processing facility at Whyalla will be a significant value-adding project for Australia where mineral concentrate from Nolans Bore will be upgraded prior to sale.

"This complex will be a substantial mineral processing and chemical manufacturing facility by Australian standards. Whyalla will be Arafura's -- and Australia's -- gateway to global rare earths markets," he said.

Arafura will prepare the EIS in accordance with the guidelines. It began background work some months ago as a precursor to receiving the formal guidelines.

Dr Ward said the company has also actively engaged in ongoing community consultation since Whyalla was announced as the preferred rare earths complex site.

Whyalla was an industrial city developed in the early days of BHP when the company established an steelmaking complex using iron ore from the nearby Middleback Ranges and it also ran a shipbuilding yard.

The dramatic transformation of South Australia from a Cinderalla mining State to one of Australia's fastest expanding mining regions has put pressure on available shipping outlets for new iron ore and base metal operations and planned uranium developments on Eyre Peninsula and in the mid north.

Whyalla port has limited capacity for new mineral shipping so new ports are in the process of being developed elsewhere on Eyre Peninsula.

[Wayno]

Phoenix Copper wants the heritage proclamation on Burra's old mine site lifted so that it can launch new explorations.

Video article from the '7:30 SA' tv program
http://www.abc.net.au/news/video/2011/06/17/3247100.htm

[Wayno]

Uranium exports out of Adelaide are set to skyrocket

From AdelaideNow:

YELLOWCAKE export out of Port Adelaide is poised to increase almost sevenfold over coming years.

Adelaide and Darwin are the only two ports in Australia that allow the export of uranium oxide, so the state is well-placed to tap into an imminent boom in Australian uranium production.

Federal Resources Minister Martin Ferguson told a mining conference in Perth last week that he expected uranium production in Australia to quadruple in the next 20 years, driven by demand in Asia.

About 5000 tonnes of uranium oxide, or yellowcake, is now shipped out of Port Adelaide, but a combination of new SA mines, the Olympic Dam expansion and new West Australian mines will lift exports to about 37,000 tonnes a year in about 15 years.

Uranium miners in Western Australia will have to choose between Adelaide and Darwin as the WA Government does not allow uranium exports through its residential port of Fremantle or Esperance.

SA Chamber of Mines and Energy chief executive Jason Kuchel said the West Australian Government was unlikely to revise its opposition to uranium exports, meaning miners would look to SA.

"We will benefit from them because if the costs aren't that much different for them to ship out of Port Adelaide they will choose that . . . path of least resistance," he said.

Mr Kuchel said people should not be concerned that uranium in road trains or rail was passing through the city's suburbs, saying it had been for decades.

"If it (uranium oxide) fell of a train or the back of a truck, you wouldn't want to scoop it up and swallow it but it is not going to hurt you if you walk past it or drive past it," he said.

"Much more dangerous metals go through our city streets every day."

DP World general manager Andrew Towers, who manages container-loading at Port Adelaide, said uranium was segregated from other cargo and spent less time on the loading dock. "We restrict it to a maximum of five days from the point the hazardous cargo arrives."

Mr Towers said as long as it was in containers, the port was "open for business"

Port Adelaide Mayor Gary Johanson said he was not concerned about an increase in uranium exports, but did not want more freight activity in the area.

[Wayno]

The most debated part of ODX, the Pt Lowly desal plant, has been approved by the Liberals.

From AdelaideNow

BHP's proposed desal plant will almost certainly be built at Point Lowly, north of Whyalla thanks to support from the State Opposition.

Opposition Leader Isobel Redmond threw her support behind the site yesterday.

Ms Redmond had previously criticised BHP's plan to build a desal plant at Point Lowly, which is also an important breeding area for giant cuttlefish and other sea life.

In 2009, Ms Redmond advocated building the plant on the western coast of the Eyre Peninsula, beyond Ceduna.

At the time she said of Point Lowly: "at this stage I can't see any way that we would want to put it there".

However following three briefings with BHP, Ms Redmond says she is now satisfied the plant will not cause environmental damage.

"At those meetings we were able to ask many questions about the project and in general I have been satisfied by the information provided," she said.

"It indicated that BHP has endeavoured to do everything possible to protect the surrounding environment from the impact of a desalination plant.

"I'm relatively convinced from the scientific data provided that there will be little if any environmental damage from the plant in particular to the cuttlefish and their breeding grounds.

"We are waiting to hear whether the project goes ahead - BHP is at the stage of seeking State Government, Territory Government and Federal Government approval, but even if all of that comes together, BHP still has to convince their international board that this is a project that should be prioritised."

BHP made significant changes to the design of its 100 gigalitre per year desalination plant as a result of responses to the draft environmental impact statement for the proposed multi-billion dollar expansion of the Olympic Dam copper, gold and uranium mine.

The changes included tunneling under the seabed in order to construct the plant's outflow point, rather than using trenching, so as not to disturb the cuttlefish, and extending the discharge area an extra 200m offshore.

BHP also said it would shut down the plant if yet to be determined salinity levels were reached.

While BHP made the concessions, it said early last year that Point Lowly was the only site being seriously considered and building the plant anywhere else would cost hundreds of millions of dollars extra.

Critics of the plant believe saline effluent poses a risk to marine life and sea grasses in the area.

Keep the Gulf Clean Campaign spokesman Barry Evans said his group remained extremely concerned about the impact of discharging saline effluent into the Gulf at that location.

The group, established by the Spencer Gulf and West Coast Prawn Fishermen's Association in 2009, has done a scientific assessment of BHP's supplementary EIS, which is expected to be released next week.

"Our scientific assessment team, which includes experts in the fields of oceanography and marine ecology, has been rigorously reviewing the detail in the Supplementary EIS and that's taken considerable time," Mr Evans said.

"This is something we have devoted extensive attention to, given the potential impact on our industry, which contributes $54 million per annum to the South Australian economy.

"In particular, we remain very concerned about the ecotoxicology assessments in relation to prawn species and ongoing monitoring."

Premier Mike Rann has said the plant, and all other aspects of the proposed Olympic Dam expansion, would be subject to the "most stringent" environmental standards possible before approval is granted.

[Wayno]

Only ~120 sleep until another mine opens! i know, the excitement is too much to bear...

HILLGROVE's Kanmantoo copper mine in the Adelaide Hills should start production on November 1, on time and on budget, management says.

Speaking at the company's annual meeting in Adelaide, managing director Drew Simonsen said the company had spent about $71 million on the mine so far, and expected to spend another $50 million.

This meant the mine would come in on budget, including its $10 million contingency. Once it was up and running, if copper prices stayed near current levels, it would generate "strong cash flows", Mr Simonsen said.

Mr Simonsen also stressed that outside of any unforeseen events, there were not expected to be any cost over-runs.

The mine, near Kanmantoo, 60km southeast of Adelaide, currently has a 10-year mine life, during which it is expected to produce about 2.4 million tonnes of copper concentrate per year.

The plant could be upgraded to 3.5 million tonnes per year, at a cost of $10-$12 million, which the company would consider should more resources be found, Mr Simonsen said.

Currently it was focused on getting the mine running, and finding new resources which would add to the mine life.

To this end the company has approved a $1.5 million exploration program, and already has one drilling rig running on site, which will soon be joined by a second. Mr Simonsen said there was good potential for new near-mine resources to be found.

"The exploration area of about 500 square kilometres has had relatively little exploration over the last 25 years," he said. "I believe there's significant potential for further resources to be identified."

Mr Simonsen said some of the data signatures from previous, above-ground exploration, were actually bigger than the one created by the deposit, which gave the company hope of more finds.

Mr Simonsen said construction of the mine was 62 per cent complete, and the next major milestone would be connection of the major power supply, which was scheduled for August 31.

Currently about 300 people were working on site.

[Wayno]

A local Adelaide company will soon be doing well on the world stage.

Uranium Equities Ltd estimates there to be more than US$1 billion in lost uranium per annum worldwide. Their new process (PhosEnergy) provides a way to realise this resource and at the same time substantially reduce the capital & operating costs of the extraction of by-product uranium from phosphate streams when compared to existing technologies.

CAMECO has invested another $US5m in a uranium extraction process being developed by Adelaide company Uranium Equities.

UEQ is researching a process which can produce uranium as a by-product of phosphate fertiliser production. The new funds will bring Cameco's investment in the PhosEnergy process to $US12.5 million.

Cameco has the right to invest a maximum of $US16.5 million in return for a 63 per cent stake in the technology, with UEQ holding 27 per cent and the original developers 10 per cent.

The new money will go towards the planned operation of a demonstration plant at a US-based fertiliser producer and a pre-feasibility study. The demonstration plant has already been built in Adelaide and is now undergoing final commissioning before being shipped to the US.

The plant is expected to run for five to six months inn the US in the second half of the year and will provide cost and design data to enable the construction of a full scale facility.

[UrbanSG]

This looks to be potentially very significant ....

Feasibility study bid for fuel project in South Australia's Far North
Political reporter Daniel Wills
From: The Advertiser June 28, 2011 12:49AM

AN emerging petroleum company wants backing for a $300 million feasibility study to help it convert a Far North coal deposit to diesel.

Central Petroleum and Allied Resource Partners has announced plans to use cutting-edge technology to exploit a deposit in the Pedirka Basin, straddling the SA-NT border.

Mineral Resources Development Minister Tom Koutsantonis yesterday said the project would "rival Olympic Dam" and could produce as many barrels of oil a year as Kuwait.

The company is now seeking investments for a feasibility study to prove the effectiveness of underground coal gasification techniques and further test the scope and quality of the Pedirka Basin deposit.

If successful, the company expects to begin fuel production within five years and forecasts expansion to an annual output of about one billion barrels, making it one of the world's largest fuel fields.

The $7.5 billion first phase would deliver 22 million barrels a year for the domestic and export markets.

Diesel can be easily converted for use in aircraft, cars and power generation.

About 3000 people would be employed during construction, with as many as 1500 ongoing jobs.

Expansion of the project relies on the availability of pipelines and ports.

The coal-to-fuel conversion technology delivers a fuel with lower emissions and more power than conventional diesel, and is already used effectively by Linc Energy in south-eastern Queensland and Eskom in South Africa.

Mr Koutsantonis said the project was a "game-changer" for the state, and could deliver as much as $500 million a year in royalties at peak operation.

"It's exactly what the new green economy is pushing us towards," he said.

"The next 10 years in South Australia will be one of the greatest rapid expansions of minerals and petroleum exploration we've ever seen."

Mr Koutsantonis said he was confident planned upgrades to SA ports would encourage flow-on jobs growth in allied industries.

Allied Resource Partners joint managing director David Shearwood said the project could have a lifespan of more than 100 years and generate 3 per cent of the global oil supply.

"It not only makes Australia self-sufficient in transport fuels, it also makes us a major exporter of oil in a time when oil is becoming short," Mr Shearwood said.

Mr Shearwood said Australia's looming carbon tax could make the project more competitive because less environmentally friendly fuel industries would be hit with additional charges.

[Wayno]

This looks to be potentially very significant ....

Feasibility study bid for fuel project in South Australia's Far North

Gosh! and other 4 letter exclamations.

[Aidan]

This looks to be potentially very significant ....

Feasibility study bid for fuel project in South Australia's Far North
Political reporter Daniel Wills
From: The Advertiser June 28, 2011 12:49AM

AN emerging petroleum company wants backing for a $300 million feasibility study to help it convert a Far North coal deposit to diesel.

Central Petroleum and Allied Resource Partners has announced plans to use cutting-edge technology to exploit a deposit in the Pedirka Basin, straddling the SA-NT border.
...

The coal-to-fuel conversion technology delivers a fuel with lower emissions and more power than conventional diesel, and is already used effectively by Linc Energy in south-eastern Queensland and Eskom in South Africa.

...
Mr Shearwood said Australia's looming carbon tax could make the project more competitive because less environmentally friendly fuel industries would be hit with additional charges.

This is slightly puzzling. Coal to diesel emits more CO2 than conventional diesel production unless they use CCS or biomass blending. Due to its desert location, I'm guessing the former - so I'm wondering where are they going to sequester the CO2?

[mattblack]

This looks to be potentially very significant ....

Feasibility study bid for fuel project in South Australia's Far North

Gosh! and other 4 letter exclamations.

Looks like you might get the metro train lines that you keep spriuking Aidan if this keeps up. Another Olympic Dam, Kuwait size, $500M in royalties. Friggin unbelievable.

[Wayno]

here's the pedrika basin - note how it spans NT & SA, so we'll be sharing royalties with our northern friends.

pedrika.jpg (69.71 KiB) Viewed 3264 times

and some notes from the ASX Announcement:

The Project as envisaged would be environmentally sound and conform to best practices on many fronts;

Liquid products planned will be “ultra clean” due to extremely low contaminant levels especially sulphur which will produce substantial reductions in pollutants when compared to today’s generation of liquid transport fuels.

Much of the CO2 emissions generated on site will be captured and stored and the remainder could be diverted to the production of methanol, another valuable petrochemical.

There will be no “fraccing” of coal seams

There will be no draining of coal seams or lowering of the water table

Combustion pressures and geological selection of appropriate coal seams will be carefully monitored to ensure no leakage into any possible overlying aquifers

Remnant pillars will be carefully optimised to ensure no ground subsidence

and

While some waste CO2 will be produced on site, the project will enable carbon capture and permanent underground storage (sequestering) of CO2 during the UCG process. Waste CO2 could also be transported to old oil fields, for example the Cooper Basin, where the gas can be pumped underground to enhance oil recoveries whilst sequestering the CO2. Additional CO2 can also be removed through the production of methanol, a valuable petrochemical.

Importantly, UCG does not employ the same technology as Coal Seam Methane extraction.

UCG does not require:
* The water table to be lowered;
* Fracking of rock (forced rupturing); or
* The use of carcinogenic chemicals.

[mattblack]

Press release by the minister over Pedirka announcement

Hon Tom Koutsantonis
Minister for Mineral Resources Development
Minister for Industry and Trade
Minister for Small Business
Minister for Correctional Services

Tuesday, 28 June 2011

STATE’S NORTH HOLDS KEY TO NATION’S ENERGY SECURITY

Minister for Mineral Resources Development, Tom Koutsantonis, has described the proposal of a
$7.5 billion clean fuel production project in the State’s far north as having the potential to secure the nation’s energy supplies into the future.
Central Petroleum Limited and Allied Resource Partners announced to the Australian Stock Exchange yeasterday morning of their intent to establish a $7.5 billion gas to liquid in the Pedirka Basin, in the State’s far north, overlapping the border with the Northern Territory.
After meeting with the companies, Mr Koutsantonis said the project was of unprecedented scope and would be of “international significance”.
“This project will be potentially of a scale similar to Olympic Dam and of national, if not international significance,” he said.
“It is proposed the project will utilise Underground Coal Gasification and Gas to Liquid technologies to produce an estimated minimum of 60,000 barrels of “ultra clean diesel fuel” in the first stage of development alone.
“It is forecast the project could stretch to produce anywhere from one to three million barrels of clean diesel fuel per day, which equates to roughly the same output of Kuwait
“The numbers that are being mentioned would guarantee Australia’s energy security, and would also be of unprecedented economic benefit to the local and state economies.
“It would also have the potential to put Australia on the map as a major net exporter of oil.
“There has already been more than $100m spent in exploration of the area and the companies are now looking for $300m in funds to conduct a bankable feasibility study.
“The company has also voiced its wishes to utilise any deep water port, such as the planned Port Bonython port, to export the fuel internationally.
“These are exciting times for South Australia’s mining industry and in the next five to ten years will be a real boom time for our communities, work force and economy.
“Since coming into power the Rann Labor Government has seen the number of operating mines quadruple with more than 30 more projects in the pipeline nearing the development stage.”

[UrbanSG]

Coober Pedy heralds new mining frontier
Business Editor Christopher Russell
From: The Advertiser July 08, 2011 11:28PM

CONSTRUCTION of a new iron mine near Coober Pedy will begin on Monday week, opening frontiers for the state's resources sector.

The WPG Resources mine at Peculiar Knob will be the first inside the Woomera Prohibited Area since the Federal Government agreed to better access inside the zone.

WPG also will join IMX Resources as the first of a group of smaller companies creating an iron ore export industry outside the long-established operations of OneSteel at Whyalla.

Executive chairman Bob Duffin said yesterday the final permits for the mine and an ore export facility at Port Pirie had been granted by the State Government.

"The approvals mean that WPG can now move to the project construction phase," he said. "WPG will spend some $170 million to bring the project into production.

"Contractors engaged by WPG will spend an estimated additional $250 million on mobile plant and equipment."

Peculiar Knob, 90km south-east of Coober Pedy, is named after the rock formation on a nearby hill and contains high grade ore suitable for shipping direct with minimal processing.

Premier Mike Rann said he was delighted.

"This will be our 17th operational mine," he said.

"And it's a signal of what's to come in terms of the Woomera Prohibited Area."

SA Chamber of Mines and Energy chief executive Jason Kuchel said WPG Resources had been resolute in advancing its project. "This demonstrates the hard work and ingenuity of junior mining companies," he said.

About 180 jobs will be created during construction.

Once the mine is in production, about 240 people will be needed on site with a further 60 to work at Port Pirie and Port Augusta.

WPG has begun recruiting management level staff with Mr Duffin saying he has been approached by SA residents now working in WA or Queensland who wanted to find jobs closer to home.

He expects production to begin early next year.

"The first train is scheduled to leave the Wirrida Siding in the first week of May next year and we'll be making sales at the end of May," he said. "So we will be generating cash flow in this current financial year."

[mattblack]

and ......

A SECOND major oil exploration program will be carried out in the Great Australian Bight.

A new licence was granted to Adelaide-based Bight Petroleum Pty. The company has been given permission to explore off the coast near Ceduna and is scheduled to spend $68 million on the program over the next three years.

Bight - a unit of Canada's Bight Petroleum Corp - was yesterday awarded two exploration permits covering about 8500sq km in the Duntroon and Ceduna sub-basins, off the western coast of the Eyre Peninsula.

They were part of a suite of 10 permits granted off the SA and WA coasts by federal Resources and Energy Minister Martin Ferguson.

The announcement comes only months before BP Australia is expected to start a two-year, $605 million seismic survey for oil also in the Great Australian Bight.

This will be followed by a four-year, $832 million drilling program if initial results are positive.

Bight Petroleum director Matthew Philipchuk told The Advertiser the company believed the area had significant potential for oil, with drilling expected to start in 2013-14.

"We're very keen," Mr Philipchuk said.

"We have a lot of previous well and seismic data. Based on the information, it looks like one of the better exploration risks we can take."

Under the permit agreement, Bight Petroleum will undertake seismic surveying and geotechnical studies and drill an exploration well in one of the two permit areas over the next three years.

Depending on the outcome, it will then move on to a second production phase potentially worth $206 million.

Premier Mike Rann said the company's exploration would be restricted to protect tourism, agriculture and the marine environment.

"Recognising the importance of the unique marine environment near the allotments, the company will be subjected to a more stringent environmental and regulatory process to ensure there is minimal ecological impact," Mr Rann said.

Conservation Council SA chief executive Tim Kelly expressed concern the exploration area was close to the Eyre and Yorke peninsulas, and to Kangaroo Island.

"If something went wrong - such as an oil spill - it could be devastating," he said.