#Official Mining Thread

[Wayno]

More infrastructure planned:

A DESAL plant, deep water port, power plant and rail expansion will underpin an SA iron ore industry for a century.

Outlining conceptual figures for infrastructure, the Braemar Iron Alliance said investment of about $7.6 billion would be needed to establish the iron province on the South Australia-NSW border area.

The alliance, which brings together eight companies, wants to draw global attention to the potential investment opportunities, spokesman Andrew Woskett said.

"As we expect all of Braemar's output to head China's way, it makes sense to co-ordinate and attract Chinese investment to this emerging sector opportunity as the half a dozen or so iron ore explorers in the region prove up their exploration objectives to mineable status," he said.

"This infrastructure development is at least three to five years away - it's not tomorrow - with implementation over the following five years."

The exploration companies - which include Minotaur, Havilah, Royal and Carpentaria - will be stretched to finance their mines so outside partnership would be needed on the infrastructure.

"We've got no expectations the government will fund this," Mr Woskett said. The infrastructure could be developed as one package or split into components.

The proposed desalination plant would produce 50 gigalitres a year - about half the output of the Adelaide desalination plant.

Mr Woskett said the alliance recognised a desalination plant in Spencer Gulf would be controversial, particularly because the proposed 100Gl/year plant proposed by BHP Billiton at Point Lowly would already be discharging brine into the gulf. However, there would be flexibility in its location.

"We'll need a desal plant somewhere on the eastern side of the gulf and which would, of course, be subject to all the normal environmental studies and permitting," he said.

Water would be delivered via a 300km-long pipeline but this would be better than drawing from the Great Artesian Basin.

Running up to five mines producing 50 million tonnes a year of concentrate also would require huge power supply with a conceptual need of a 500MW plant, possibly harnessing geothermal or solar resources.

Transporting ore to a processing plant at Port Pirie would open up two options. Firstly, there could be a significant upgrade of the existing rail network between Broken Hill and Spencer Gulf with mines needing 50 locomotives and about 162 ore wagons, running nearly 2000 train services a year.

Alternatively, a slurry pipeline network could be built instead of rail, an alternative Mr Woskett thinks may be "a compelling option for consideration".

A deepwater port of 20 metre draft somewhere south of Port Pirie to cater for capesize vessels would be needed.

[Wayno]

ODX & Rare Earths

Will rare earth elements power our clean energy future? ODX has a massive rare earth resource, potentially worth more than the combined value of the copper, gold, silver & uranium in ODX (and even more than Australia's GDP). Rare earths are also dangerous.

http://theconversation.edu.au/will-rare ... uture-2433

Rare earth elements (REEs), for so long ignored by big mining companies, have recently become incredibly popular. But, contrary to what their names suggests, they are not particularly rare. They do, however, pose challenges for the companies now rushing to find and extract them.

The sudden demand for REEs comes from the important part they play in modern technology. They are crucial to much environmental technology like wind turbines and fuel cells.

They help make electronic parts smaller and faster, magnets more powerful, metal alloys stronger and flat screen TV pictures brighter. They are important for industrial processes: they make chemical reactions faster and pollution control work better.

In short, they are extremely useful and more uses are being discovered all the time.

Overcoming short-term problems and long-term issues

Over the past two decades, China has dominated the global production and satisfied 90% or more of global demand. But, recently, China announced that it would severely restrict its exports of REEs due to rising problems with its mines. There is evidence of polluted waterways and radiation exposure affecting not only workers, but entire communities.

The minerals which contain REEs invariably contain some thorium and uranium, both radioactive elements. It’s not the sort of stuff you want to manage poorly, as China recently admitted.

While lack of supply due to China’s restrictions might be a short-term problem, the key long-term issues are what volume of REE resources actually exist, and how can the mining and processing be managed – especially the radioactive waste.

Surprisingly, on both fronts we can be justifiably positive.

In the past, the world had little use for REEs, so miners never bothered to look for them. Given the strong expected growth in REE demand for gadgets and green technology, however, there has been a global scramble over the past year to identify REE deposits. Mining companies are now looking very hard for any trace of REEs – and they will continue to find them. That’s because rare earth elements aren’t, in fact, scarce.

REEs are dirt-common in Australia

According to Geoscience Australia, Australia has 59.4 megatonnes (Mt) of sub-economic RRE resources in addition to its 1.65 megatonnes of economic REEs. Some 53 Mt of the sub-economic variety can be found in the giant Olympic Dam orebody in South Australia.

At the moment, the metals extracted from Olympic Dam include copper (valued at $671 billion), uranium ($287 billion), gold ($134 billion) and silver ($15 billion). Compare this with the estimated value of the REEs in the same orebody – a whopping $4,195 billion. That’s four times Australia’s current GDP.

In its current expansion plans, BHP Billiton (owners of the Olympic Dam site) are ignoring this remarkable value. They consider REE extraction “uneconomic” and claim the technology isn’t available, despite it being similar in most steps to the current processing at Olympic Dam.

This proposition is hard to believe in the face of the incredible value of Olympic Dam’s REEs – worth more than BHP Billiton’s Pilbara iron ore resources. (If I was a shareholder, I’d certainly be angry at BHP Billiton and asking the hard questions.)

But even if BHP Billiton does not decide to make REE extraction in South Australia a part of its future, the world’s REE deposits are abundant enough to supply the world for decades to come (even allowing for substantial demand growth).

Not rare, but definitely dangerous

The amount of REEs is not the problem. The radioactivity associated with them is, however.

The Mt Weld REE project being developed by Lynas in Western Australia, for example, plans to ship a REE concentrate to Gebeng in Pahang state, Malaysia, for the heavy chemical refining stages.

The local Malaysian community has strongly opposed this project, in large part due to the significant environmental and public health impacts from the former Asian Rare Earths refinery in Bukit Merah. This is now the site of one of Asia’s largest contaminated site cleanup operations.

This highlights the strong need to be upfront, transparent and thorough on all aspects of REE production – especially the radioactivity inherent in REE ores.

These issues can be managed with appropriate engineering design, construction, operation and decommissioning – but this cannot be achieved without world-class regulation, community engagement and business stewardship.

Let us hope that the emerging global REE industry meets the challenge of increased demand positively and that we all pay appropriately for the true costs of using REEs in our daily lives.

[Wayno]

A good decision i think.

AFTER 40 years of debate over the mining of the Arkaroola Wilderness Sanctuary, South Australian Premier Mike Rann today declared the land a mine-free zone.

Mr Rann, in Arkaroola with Environment Minister Paul Caica and Mineral Resources Minister Tom Koutsantonis, said the area would be provided “unprecedented protection” under the Mining Act.

He said there would be further protection with legislation to specifically exclude mining to give clear environmental protection to the wilderness sanctuary.

The privately owned uranium-rich property in South Australia’s far north has long been the subject of debate between environmentalists and mining companies.

“We could have settled for what the Greens wanted, which was simply to ban mining, but I wasn’t satisfied that that would provide enough protection from all forms of incompatible development,” Mr Rann said.

“Such a ban could have been overturned administratively by a future government.”

The Premier said the mining ban would involve a three-step process, with the first step proclaiming the area mine-free under the Mining Act, preventing future exploration and mining titles being granted in the area.

“The second step will be to enact special purpose legislation to protect the natural, cultural and landscape values of the area in perpetuity,” Mr Rann said.

“This step would define the area under statute, prohibiting mining, mineral exploration and grazing in the ranges, but specifically provide for the public appreciation and enjoyment of the area, with recreational activities regulated by a strict management plan.

“And the third step will be to nominate the area for listing on the National Heritage List, and seek to have it nominated for World Heritage listing.”

Mining company Marathon Resources exploration licence in the Flinders Ranges were suspended after the company was found to have improperly disposed of waste in 2008.

A conditional 12-month licence, granted to Marathon by the South Australian government in December 2010 following intense lobbying, was subject to consultation on stricter operating conditions.

A number of former senior Labor government figures sit on Marathon’s board and party powerbroker Labor senator Don Farrell has reportedly declared his support for mining operations in the area.

Arkaroola’s owner Marg Sprigg told ABC local radio this morning the government had yet to advise the family of the decision.

“We are waiting with fingers and toes crossed,” Ms Sprigg said.

“Arkaroola belongs to South Australians - we are just caretakers and it’s been a long, long time that we’ve wanted to have protection.”

[rhino]

[quote="Wayno"]A good decision i think.

+1

Two very interesting articles there Wayno, thanks.

[Wayno]

REX Minerals has forecast more copper from its Hillside project in SA, releasing a blueprint for a 12-year mine to almost rival Olympic Dam in size

"The conceptual study supports our view that Hillside is one of Australia's largest copper development opportunities," managing director Steven Olsen said.

"We also remain focused on the regional opportunity which we believe will lead to further discoveries and the potential to produce over 100,000 tonnes of copper per annum for years to come, making it Australia's most substantial copper development opportunity outside Olympic Dam.''

The conceptual study results will feed into a pre-feasibility study to be completed in 2012, followed by a bankable feasibility study due in 2013.

Estimates are for first production to start in 2015 at the site near Ardrossan.

In its study, Rex Minerals forecast Stage One to produce up to 45,000 tonnes of copper, 45,000 ounces of gold and 900,000 tonnes of iron ore concentrate a year from a shallow open pit mine. Start -up costs are estimated to be between $650 million and $800 million.

A second stage of the mine would last more than six years and dig deeper to access a resource about 40m below the surface to produce up to 80,000 tonnes of copper, up to 70,000 ounces of gold and up to 1.6 million tonnes of iron ore concentrate a year.

Costs to run Stage Two would be funded from Stage One's cash flow, the company said.

A plant to process 7.5 million tonnes of ore a year initially would draw from SA's power and water grid but a conceptual study included an independent desalination plant or an expanded water pipeline to the peninsula.

[Wayno]

Here's a Video related to the previous article. Uses some neat imagery to show the run & form of minerals underground at the Rex Hillside mine. Near the end of the video they show their analysis of the wider prospective area. It's freakin' huge!

[UrbanSG]

Sounds like a beat up to me based on one analyst, will have to see what happens with the uranium component.

BHP ‘to stall on Olympic Dam uranium production’ following Japan disaster
By The Australian · July 27, 2011 · 9:01 am
By Matt Chambers

SPECULATION is growing that BHP Billiton will hold back uranium production at the $US20 billion-plus Olympic Dam mine expansion in South Australia in the wake of the Fukushima nuclear disaster.

In a detailed report on the giant mine expansion, Deutsche Bank analyst Paul Young said he expected BHP to keep Olympic Dam’s uranium production at current, pre-expansion levels until well into next decade.

Mr Young has also boosted his development cost estimate for the project from about $US22bn ($19.8bn) to $US27.4bn, based on expanded plant capacity.

Olympic Dam is the world’s biggest uranium deposit and an expansion is due to start next year if the company and government approve it.

However, it is potentially the world’s second-biggest copper mine and will make most of its profits from that metal.

If production plans outlined in BHP’s environmental impact statement were put in place, mined global uranium output would rise by a third from current levels, illustrating Olympic’s potential to flood uranium markets.

Mr Young said weakened uranium demand after Fukushima, incomplete test work and the need to defer $US1bn of capital expenditure on a uranium recovery circuit would probably delay a boost in uranium production until 2025.

Despite the delays, Deutsche is expecting Olympic Dam to ramp up to well beyond the annual 750,000 tonnes of copper and 19,000 tonnes of uranium production flagged in BHP’s environmental impact statement.

Mr Young said Olympic Dam was expected to be built in five stages over 18 years, leading to an operation that could produce 1.05 million tonnes of copper and 35,000 tonnes of uranium a year from as early as 2026.

The first three stages, to be completed between 2020 and 2023, would concentrate on high-grade copper and low-grade uranium ore and would leave uranium output at current rates of about 4500 tonnes a year. In that time, copper output would grow from about 180,000 tonnes a year now to 700,000 tonnes a year of copper, Mr Young said.

Apart from the uranium production, Deutsche’s estimates do not necessarily conflict with BHP’s environmental impact statement, which is seeking approval to mine 750,000 tonnes of copper and 19,000 tonnes of uranium annually.

BHP has previously said it wants to eventually produce 1.4 million tonnes of uranium production a year at Olympic Dam.

A BHP spokeswoman said there had been no update to the plans released in May in a supplementary environmental impact statement, but would not rule out Mr Young’s suggested path.

BHP has been looking at storing the tailings from the higher grade uranium ore for processing at a later stage as a way of keeping a lid on development costs.

But in its recent environmental impact statement, BHP said the mine would be unprofitable without uranium production.

[UrbanSG]

This is an interesting article as well. It shows that BHP itself doesn't have to have a big presence in town, although that would be good. Many other companies will set up here regardless:

See page 4 - Resources heading:

http://au.legalbusinessonline.com/conte ... tails.aspx

[skyliner]

Makes for VERY interesting reading. Urban SG - I agree with what you said about the first of your posts on 29/7/11 - the second is based on many minds together rather than one analyst. Still looking forward to big BHP activity in the not so distant future.

SA - STATE ON THE RISE

[Wayno]

From the Govt's PIRSA website:

A State Government study will determine how a heavy industry hub in the Upper Spencer Gulf could enable local industries to leverage opportunities linked to the growing mining and energy sector.

Minister for Regional Development Gail Gago says the feasibility study of up to $500,000 for an Upper Spencer Gulf Heavy Industry Hub was an election commitment and an important step in building the value chain associated with growing industries in the State’s north.

“The Upper Spencer Gulf is the gateway to more than half of South Australia’s 17 major operational mines in the State’s north, with at least another 10 promising projects in the pipeline,” the Minister said.

“A heavy industry hub in this area could boost business development opportunities for companies in high-value engineering, manufacturing and services sectors.

“This study is therefore crucial to better understand the needs of mining-related industries in the Upper Spencer Gulf and to determine how a hub might assist the region to maximise the benefits of current and future mining growth.

“It will investigate industry requirements in terms of infrastructure, materials, trades, services and staffing, which will help inform future investment decisions in the region.

“These findings will also help improve government and industry understanding of how mining growth can be leveraged for the benefit of related industries and how efficient local supply chains can provide a competitive advantage to the State’s mining sector.”

The study will be undertaken in two parts with Stage One reporting on the potential economic benefits of establishing a heavy industry hub or hubs in the Upper Spencer Gulf. Research will involve targeted industry and stakeholder engagement.

Stage Two will progress opportunities for South Australia’s manufacturing industry to maximise its involvement in the mining and energy sector in the State’s north.

Stage One will be completed early next year, while Stage Two is expected to be completed in mid to late 2012.

This work builds on existing State Government initiatives to assist the Upper Spencer Gulf and Outback regions in maximising the benefits of the growing mining sector, including the Plan for Accelerating Exploration (PACE) program, the Resources and Energy Skills Alliance and the $4 million Enterprise Zone Fund for the Upper Spencer Gulf and Outback.

A consortium of KMPG and GHD has been engaged by the Department of Trade and Economic Development to undertake the heavy industry hub feasibility study.

[Wayno]

Here's an SA mine status update

First here's the typical mining project lifecycle:

lifecycle.jpg (36.63 KiB) Viewed 3359 times

• * Exploration - the mining company buys a license to explore in a designated area.
  * Discovery - detailed mapping, trenching, drilling, ground surveys, etc.
  * Resource Definition - drilling is done to determine the size and scope of the resource. A few drill holes will result in an 'inferred' estimate, eventually being upgraded to 'measured' and 'indicated' estimates as more drilling is done and confidence increases.
  * Feasibility Study - next step is to focus on the economic and environmental aspects. More drilling is done in parallel to this study with the goal of upgrading the resource definition to 'probable' and finally 'proven'. Mining projects that make it to this point are now considered low risk, and are likely to attract funding.
  * Finance Approval - so now we need cash, and fast. At this point Shareholders are excited and impatient. Mike Rann being in India at present is no surprise - we have several mines approaching this stage in the next few months.
  * Construction - time to build the infrastructure, both local to the mine site and further afield (ports, desal plants, etc)
  * Production - and we're off and running...

SA currently has 17 approved mine: 12 in production, 5 under construction.

SA has a further 17 'formally recognised' developing mines: 1 in resource definition, 13 doing feasibility studies (a few not quite at the 'proven' resource stage), 2 in the finance stage, 1 about to start construction. There's many other prospects (50+ at a guess) that will soon appear on this list.

So within 12 months i guess we'll have ~25 approved mines.

[skyliner]

Thanks for a great outline Wayno. SA is sure coming ahead. Often now spoken of the next boom state - with plenty of reason. No more rust bucket about this place.

SA - STATE ON THE RISE

[Wayno]

nudder one:

From ABC Online:

The mining company Uranium SA has applied to begin full scale trials at a proposed uranium mine site near Whyalla on South Australia's Eyre Peninsula.

The company wants a mining licence for its 225-hectare Blackbush deposit 20 kilometres south-west of Whyalla and three kilometres from Spencer Gulf.

Uranium SA says it hopes to confirm exploration results that showed considerable uranium deposits in the area.

The company says if the application is successful, full-scale production could begin by the end of next year.

If approved, the project would be the latest major development in the area, with a deep-sea port, explosives factory and desalination plant already in the pipeline.

About 100 tonnes per year could be mined at the site if it reaches full production.

[Waewick]

I'm not sure where to find this kind of info.

but did the Diesel fuel processing plant ever get momentum ? I remember it being spoken about but that is about it?

[Wayno]

I'm not sure where to find this kind of info.

but did the Diesel fuel processing plant ever get momentum ? I remember it being spoken about but that is about it?

do you mean this?