#Official Mining Thread

[Wayno]

Oct 18 is the next milestone, smooth sailing it appears...

THE Liberal Party has agreed to support crucial legislation allowing the massive Olympic Dam expansion project to proceed.

In a partyroom meeting late yesterday Liberal MPs decided to support the indenture agreement between the State Government and mine owner BHP Billiton.

Liberal support means the Bill to ratify the indenture is likely to pass Parliament before Christmas, triggering $525 million of BHP spending in South Australia over the next six months to prepare for the project.

BHP had threatened to not spend the money unless the legislation passed Parliament by the end of the year.

Approval will allow BHP to start work immediately on accommodation, detailed designs, roads and services, ahead of a final decision on the project by the BHP board by the middle of next year.

The proposed $30 billion mine expansion would generate up to 6000 new jobs during construction, a further 4000 full-time positions at the open-pit mine and an estimated 15,000 new indirect jobs.

This could include about 6500 jobs in Whyalla, Port Augusta, Port Pirie and Roxby Downs.

Debate on the indenture Bill is expected to begin in Parliament today. This will follow the tabling of a report by a select committee that has held hearings on the indenture since the Bill was introduced last month.

The indenture Bill would always have easily passed the Lower House on the Government vote. With Liberal support, it will comfortably pass the Upper House even though the Greens, and possibly the independents, may seek to amend or delay its passage.

Opposition Leader Isobel Redmond said the mine expansion was "in the overwhelming best interest of the state".

"Although the Liberal Opposition considers that it may have negotiated a better outcome for South Australia, the only question for us was whether we would ratify the executed agreement or not," she said.

Mineral Resources Minister Tom Koutsantonis said the Liberals' support was recognition the Government had negotiated an "exceptional" deal for South Australians.

"I think that is wonderful news; we are very pleased to have bipartisan co-operation on the most important development in the state's history, especially in modern times," he said.

"It is a project that is going to change the way we view ourselves, and change the way we view our state."

Greens MLC Mark Parnell said he was not surprised by the Liberals' decision, but said the Greens would assess the legislation thoroughly in the Upper House and would persist with its proposed amendments.

"The Greens will not be rubber stamping this legislation, we will insist on proper scrutiny," he said.

BHP external affairs spokesman Kym Winter-Dewhirst said the company did not comment on outcomes of partyroom meetings.

"However, we do appreciate a bipartisan approach to our issues and we look forward to seeing the passage of the Bill through Parliament," he said.

SA Chamber of Mines and Energy chief executive Jason Kuchel also welcomed the news.

"I think that both parties have been taking this very seriously because of what it means in a very positive sense for South Australia," he said.

"It is great to see bipartisan support for something that is a game changer for South Australia."

[metro]

the carbon tax has become a reality today, so someone should take some photos of Whyalla, you know, before it is wiped out completely

[Wayno]

Another mine starting production. The company is already looking at ways to sustain beyond 10 years (by spawning similar mines in the same area).

THE construction of Hillgrove Resources' Kanmantoo copper mine in the Adelaide Hills is complete.

The mine is expected to produce its first concentrate product within seven to 10 days, with the first exports expected next month.

The mine, which is expected to cost $135 million to build once final calculations are made, is expected to run for at least 10 years.

It will produce 80,000 tonnes of concentrate, containing about 20,000 tonnes of copper and 10,000 ounces of gold per year.

Hillgrove is also looking to expand this, and is exploring for more resources in the area.

The company said this morning the mine construction was pretty much on schedule, although the cost was 10 per cent higher than expected due to a late claim from a contractor.

"Hillgrove is in discussions with the contractor with respect to this claim, which has only recently been received within weeks of previously scheduled practical completion of the plant," it said in a statement.

"Importantly, the parties are working towards a mutually acceptable outcome, and scheduled commissioning activities on the site remain unaffected.

"Due to the estimated timeframe for first concentrate production in mid-Nov 2011 now being two to four weeks later than anticipated, Hillgrove expects that the associated working capital requirements in connection with the project ramp-up will increase by approximately $10 million."

About 250,000 tonnes of high grade ore has already been crushed and is waiting to be processed and the mining rate has been increased in anticipation of the completion of commissioning of the processing plant.

"First ore through the mill and concentrate production is now expected to occur in the next 7-10 days," the company said.

"The Kanmantoo project is now essentially complete and in final testing and commissioning."

[crawf]

Oct 18 is the next milestone, smooth sailing it appears...

Or not...

Greens' Mark Parnell to fight for a 'better deal' on Olympic Dam
by: Political Reporter Sarah Martin From: AdelaideNow November 08, 2011 3:39pm

SA Greens MLC Mark Parnell will put forwared 100 amendments to the Olympic Dam indenture Bill.
THE State Government has labelled the Greens ''economic vandals of the highest order'' for proposing almost 100 amendments to the Olympic Dam legislation.

The move comes after the State Liberals said they would support the Government in passing the bill without amendment or delay, sparking about $500 million in spending from BHP Billiton to kick start the $30 billion Olympic Dam expansion.

Greens MLC Mark Parnell said that he would forge ahead with almost 100 amendments to the Indenture Act in the Upper House which will require him to speak to them, potentially jeopardising the passage of the Bill before the end of the year.

BHP Billiton has said that the Act needs to pass Parliament before the end of this year to ensure its initial spending is approved.

"We will ask as many questions as need to be asked and move as many amendments as are needed to make for a better deal," Mr Parnell said.

"We are not deliberately trying to delay this into next year, there is no point doing that, but we are not going to be cut short and (be) stopped from asking the questions that need to be asked."

Without the support of the Liberals, the Greens' amendments will fail.

Mineral Resources Minister Tom Koutsantonis called the Greens ''economic vandals of the highest order'' and said they were deliberately frustrating the process because they were opposed to the development.

"To deliberately frustrate the parliamentary process quite frankly puts at jeopardy the state's economic reputation," he said.

"It's about time Mr Parnell put the interests of the local community first.

"The rest of the world is watching this process here, we are about to change the state forever and this isn't just about Olympic Dam, this is about our economic credibility."

Opposition leader Isobel Redmond said her party was not for turning and would not support the Greens' amendments.

''We will certainly examine anything that is put to us, but we have done a comprehensive analysis of everything ... and fundamentally we think it is a good deal for South Australia, and we will be behind it so unless there is something startling that he reveals to us through an amendment then I doubt there will be a change,'' she said.

Mr Parnell said the Liberal Party was abandoning its parliamentary responsibilities.

I seriously don't see the point of this, if neither major party is going to support it. All they are doing is jeopardising a major national economic project.

[Wayno]

Or not...

Storm in a tea cup. Libs & Labor will pass the bill, and ignore the Greens concerns. you can bet on it.

[Wayno]

AUSTRALIA'S fourth uranium mine - Honeymoon in the state's northeast - is up and running.

It is the first uranium project to reach production since the Australian Labor Party scrapped its no-new mines policy in 2007.

"It's been a long time coming and we're delighted to achieve this milestone," mine owner Uranium One's Australian head Kuzma Otto said.

The first shipments of ore from the mine are "imminent", he said.

It cost $146 million to build and is the culmination of a long process since the deposit was discovered about 40 years ago.

Honeymoon is the first new Australian mine since Beverley opened in South Australia 1999. It was preceded by the only two other operating mines Olympic Dam in 1988 and Ranger in the NT in 1980.

Australian Uranium Association chief executive officer Michael Angwin said it was an important step forward.

"This shows that in 21st century Australia you can develop a uranium mine on its merits under environmental law," he said.

Honeymoon has created 85 jobs on the site northeast of Peterborough. It has support staff in a Broken Hill office and in the Uranium One Australian headquarters in Adelaide.

"Associated with that there's a whole multiplier effect," Mr Otto said.

"We have contractors who do catering, drilling, transport, engineering and so on.

"In a remote location in SA, the multiplier effect is quite large, typically five to seven times."

Mineral Resources and Energy Minister Tom Koutsantonis said the achievement demonstrated there was a thriving resources industry.

"We may all have our attention focused on Olympic Dam, the world's largest uranium deposit. However, there are seven other significant uranium projects currently underway in the state and a terrific amount of projects still in the pipeline," he said.

Honeymoon is operated by Uranium One in a joint venture with Japanese company Mitsui.

Uranium One is listed on the Toronto Stock Exchange but is majority owned by Russian company JSC Atomredmetzoloto. It has assets in Canada, the US and Kazakhstan.

This complicated tie-up has opened up the possibility of Honeymoon being the source for the first Australian uranium exports to Russia under a treaty which took effect in November last year.

Mr Otto said the company had sales agreements in place but did not make these public.

"However, predominantly we supply North America, Western Europe and Japan," he said.

Mr Angwin said the industry was bouncing back from the Fukushima disaster.

"Notwithstanding the tough year this has been for the industry, the Honeymoon development tells you that uranium businesses have enough confidence in the future and the fundamental drivers of demand that they're prepared to proceed with investments," he said.

[rhino]

From today's Business Spectator:

Gillard's uranium revolution Robert Gottliebsen

Published 7:40 AM, 15 Nov 2011 Last update 10:35 AM, 15 Nov 2011


In a few short words advocating selling uranium to India, Prime Minister Julia Gillard heralded the beginning of a new phase of the minerals boom in Australia. Because Indian demand for our uranium (and coal) is going to be big – very big.


She also transformed the economics of the development of the world’s richest mineral deposit – BHP Billiton’s Olympic Dam.


With BHP dominating Australian investment portfolios, Australian superannuation savers have every reason to cheer Julia Gillard, who now understands that the Indian uranium declaration means she faces a gruelling time from anti-uranium forces in her party and among the Greens.


Gillard has also ushered in a new wave of Indian investment in Australia and confirmed the hopes of the Australian mineral bulls who say that when China starts to flatten out India will take up the growth curve.

When you look what is happening in Indian power generation, you suddenly see why India is desperate for our coal as well as our uranium.

Electricity demand in India is increasing rapidly, and the 830 billion kilowatt hours produced in 2008 was triple the 1990 output. But the Indian electricity industry has problems. There are huge losses in transmitting power over long distances. Coal provides around 68 per cent of Indian electricity but reserves are limited and can’t support the planned enormous power expansion projects.

Gas provides about 8 per of Indian power and hydro 14 per cent, while nuclear is currently around 4 per cent, because India has had problems accessing world nuclear technology. In the longer-term that technology freeze looks like being a blessing for India, because when the Western world turned its back on nuclear, India did extensive research work developing nuclear power technology.

But that’s all changing. Not only does India expect to double per capita electricity consumption by 2020, but huge rises in power generation are expected in the following decades.

While there is considerable community debate in India, the 2050 broad plan is to generate 25 per cent of this greatly expanded electricity requirement via nuclear power.

At the same time, China has also decided that nuclear is a key mechanism to reduce its carbon footprint. You can see why China is looking around the world at buying companies with uranium reserves.

The global community has extensive debates over nuclear energy but India and China can see no other way to lift the standard of living of their people and contain carbon. Students of history know what happens to countries that have vast resources and refuse to sell them. Thanks to the Gillard policy, Australia is not in that situation.

[Wayno]

In a few short words advocating selling uranium to India, Prime Minister Julia Gillard heralded the beginning of a new phase of the minerals boom in Australia. Because Indian demand for our uranium (and coal) is going to be big – very big.

She also transformed the economics of the development of the world’s richest mineral deposit – BHP Billiton’s Olympic Dam.

Yay for SA! This push into India will definitely help ODX, and we should expect a bunch more mid-sized uranium mines in our outback.

Setting up an uranium mine (using in-situ leaching) is a quick process. A new mine can be operational in something like 9 months (from resource definition to full scale production).

[skyliner]

Yay for SA!!! Agreed WAyno. As far as uranium is concerned IMO it is the only economical (long term) and effective alternative to coal. ie. Can keep up the demand for power at a consistent and unvariable level. Wise location of such plants is V impt.

SA - GREAT STATE MATE!

[Wayno]

Local SA innovation driving efficiency in mineral exploration, and training.

http://www.adelaidenow.com.au/business/ ... 6200649499

THE next generation of drilling tech is being tested in the Adelaide Hills at a new plant launched yesterday.

The Deep Exploration Technologies Co-operative Research Centre, which is co-located with Boart Longyear at its new Adelaide Airport site, formally opened its Brukunga Drilling Research and Training Facility yesterday.

The Adelaide Hills facility will be used to test new drilling technologies, as well as being used as a training centre for drill operators.

CRC head Professor Richard Hillis said the research centre aimed to refine and develop technologies which would make resource definition much faster. This included the use of down-hole logging techniques, which could tell explorers what they had found in real time.

Companies exploring for most minerals have to send drill cores or other exploration materials away for laboratory testing, which can take weeks or even months.

By this time drilling rigs, which are expensive to mobilise and run, have long since moved to another site.

If results are able to be provided more quickly, judgments can be made as to whether to continue drilling in a particular area, saving many months, or to move to another site.

Prof Hillis said the Brukunga site, near Nairne, had benefits for the testing of drilling technology.

"It's very hard to do that in an operating mining environment, because they're remote and having researchers hanging around and getting in the way is impractical.

"Brukunga, as a former mine site, provides an ideal location where we can go and put a drill rig where we are not interrupting a mining operation.

"Also there is mineralisation there."

Prof Hillis said drilling in an area with no minerals present would be of no value.

This was because the plan was to drill cores at Brukunga, assay that core, and then compare the results which the research was getting from its down-hole equipment.

"We will test various logging devices in the hole to see which ones can successfully detect the mineralisation.

"We'll test new drill bits, different types of rods."

Prof Hillis said success in this research would be "transformational" for the industry.

The CRC was also testing sending real-time data back to mining headquarters, where highly skilled geologists, which practically could not be stationed on every remote rig, could assess the results and make decisions.

"All of the data from the rig will be streaming on to the internet," Prof Hillis said. "We think minerals exploration is going to follow petroleum exploration in this."

The site will also be used to train drill rig operators and their offsiders.

Prof Hillis said drillers would be able to be properly trained in a safe environment, as well as getting used to mine site conditions, with the accommodations at Brukunga similar to those on more remote mine sites.

[Wayno]

Ok, so it's final. ODX is approved by the govt. Now over to BHP to get cracking on acquiring Board approval - early next year is the time frame.

http://www.adelaidenow.com.au/news/sout ... 6209097762

BHP BILLITON?s $30 billion Olympic Dam expansion has been given the green light from State Parliament after the Upper House approved its legislation.

After more than 20 hours of debate in the Upper House and about 12 hours in the House of Assembly, Parliament has ratified the Roxby Downs Indenture Act, unlocking BHP Billiton’s $1.2 billion for initial works on the project at Roxby Downs in the State’s north.

Concern had been raised that amendments proposed by Greens MLC Mark Parnell would delay the passage of the Bill until next year, despite the legislation having bipartisan support. The legislation will now return to the House of Assembly on Thursday for final approval.

Minister for Mineral Resources Tom Koutsantonis said the Bill’s passage was a momentous occasion for the State, which would benefit from what will become the world’s largest open-cut mine.

“This really is a game changer for our state; this is the moment future generations will look back on and say ‘that was the time South Australia took its rightful place amongst the giants of mining’,” he said.

“The world’s mining companies are now looking at South Australia as a major player in the resources market and we are well set to take full advantage of that attention.”

Greens MLC Mark Parnell expressed disappointment that his amendments had not been supported by the Government and the Opposition, after condemning the agreement as being too far in BHP’s favour.

“It is a bad deal, it enshrines a bad deal for the people of South Australia and for our environment,” he said.

“These are our minerals, they can only be dug up once, and we have the authority to determine how, when, by whom and for what return.

“Instead, the government has taken us down the path ... to allow South Australia to become the world’s quarry.

“BHP ... said jump, and all the Government could do was ask how high.”

Premier Jay Weatherill said the passage of the Indenture demonstrated the State’s mining industry was well and truly open for business.

“This gives BHP Billiton the certainty it needs to proceed with a project that is of a scope never seen before in Australia,” he said.

“This will transform the State’s economic future and underpin thousands of jobs for South Australians.”

The expansion is forecast to generate up to 6000 new jobs during the 11-year construction period before a further 4000 full time jobs are needed when the mine reaches full production.

A further 15,000 indirect jobs are expected to be created in flow-on industries and services needed to operate the mine.

The Greens voted against the Bill, allowing it to pass 19 votes to 2.

[Benski81]

Good to see last night's announcements by the central banks' global liquidity measures and the People's bank of China's move to cut reserve requirements sent commodities up! Bodes really well for this project, copper and gold futures up over 5%. China now focussed on growth and not inflation, should start to see property prices creep up there again, this is all good for this project (at least in the short to medium term anyway).

[Wayno]

Here's a a modest benefit to SA, compliments of ODX:

http://www.investinaustralia.com/news/c ... ralia-35g7

Cavpower powering up in South Australia

Minister for Mineral Resources and Energy Tom Koutsantonis today welcomed the announcement by Cavpower to expand its presence in South Australia.

Cavpower is in the process of establishing a new Caterpillar Dealer representative office in South Australia dedicated to supporting BHP Billiton’s proposed expansion of the Olympic Dam mining project.

A wholly-owned South Australian company, Cavpower have been the Caterpillar dealer for South Australia and Broken Hill since 1972 providing equipment, parts and service to the State’s mining sector.

“The latest announcement by Cavpower is concrete evidence of the economic benefits that will flow to this State from the ongoing expansion of our mining industry.” Mr Koutsantonis, who is also Minister for Manufacturing, Innovation and Trade, said.

“We expect to see Cavpower build their workforce by 185 to 750 by December next year. This project is good for jobs and good for South Australia, as local companies gear up to meet the needs of a burgeoning sector.

“Cavpowers expansion will see their operations expand to deal with potentially the largest order of Caterpillar trucks in history.

“Assembling a new South Australian operation dedicated to supporting the Olympic Dam expansion is yet another example of how local companies are able to capitalise on the mining boom that is currently underway in South Australia.

“This follows the US$1.2 billion in pre-commitment funding earmarked by BHP Billiton for the Olympic Dam project, which can flow now that the revised Indenture has been officially ratified.

“With more than 20 new mining projects in the pipeline and mineral exploration nearly back to pre-Global Financial Crisis levels, I am confident that investment in new jobs and commercial opportunities to service the mining sector will continue to step up in 2012.

“BHP Billiton can now begin rolling out the $1.2 billion in pre-commitment funding for the project, including bulk orders of trucks and mining equipment such as those manufactured by Caterpillar.”

[AG]

Resource boom will stretch state to limit

by: Cameron England
From: The Advertiser
January 07, 2012 12:00AM

SOUTH Australia will need three new airports, use twice as much diesel and be forced to cope with four times the number of heavy trucks on the roads as $35 billion in mining projects start in the next decade.

The state will need three new airports, use twice as much diesel and be forced to cope with four times the number of heavy trucks on the roads as $35 billion in mining projects start in the next decade.

In an unprecedented surge in demand for resources, gas use is forecast to increase 20 times by 2014, while water and power use will quadruple.

The stunning figures are in a report commissioned by the State Government, which is now facing calls from the mining industry to help pay for the infrastructure - or risk the boom failing.

"If the Government's not prepared to take some sort of stake in key infrastructure - not everything, just some key ones - then I think half of the potential jobs out there associated with that infrastructure and mining could be either not realised at all or put off for several decades," warned South Australian Chamber of Mines and Energy chief executive Jason Kuchel.

The recommendations which came out of the 2011 Resources and Energy Infrastructure Demand Study have been given to the Government but are being kept confidential. The forecasts may be too conservative.

They are based on the potential development of the 24 most likely mining and energy projects in various stages of development - including Olympic Dam, worth an estimated $30 billion.

If all 42 potential projects are included, the total value rises to $59 billion.

Mr Kuchel said the Government needed to help finance or underwrite infrastructure such as ports to make the projects viable.

Many junior mining companies were aiming to set up small mines, and their ability to fund large infrastructure projects alone was almost non-existent.

"This is very clearly where the Government has to get its head around how does it break that deadlock - and it's not just about planning and co-ordinating," he said.

"It's very clear the Government is going to have to take a greater role than just purely relying on the private sector to provide infrastructure.

"That doesn't mean the government coughing up the whole lot.

"In many areas the government can be justified about putting in dollars, especially where those dollars would be less than the royalties that they would otherwise not see had they not made the investment."

The development of a bulk commodities port at Port Bonython just north of Whyalla has been stalled for the past few years, in part because of questions about who takes on the development risk.

Mr Kuchel said there would be another four or five iron-ore mines operating on the Eyre Peninsula today if that port had gone ahead.

Mr Kuchel said Treasurer Jack Snelling had given indications the Government was not averse to such investments if there was a good business case for it - a break from the approach of the Rann/Foley government which refused to co-invest in mining infrastructure.

A spokesman for Mineral Resources and Energy Minister Tom Koutsantonis said the Government was developing a white paper on the basis of the report's recommendations, which would be released in the first three months of the year.

Aside from ports, Adelaide Airport was expected to need an upgrade in the next decade and three new airports and one new helipad would need to be built in the State's upper north, to accommodate an increase in flights from 800 in 2013 to 1800 per year by 2021.

Adelaide Airport Limited managing director Mark Young said there were upgrades planned at the main terminal and the company would consider operating airports for third parties.

"Adelaide Airport Limited is considering a potential expansion of the main terminal, T1, by adding further air bridges and expanding the number of gates capable of catering for regional, domestic and international traffic," Mr Young said.

There was likely to be an increase of more than 50 million tonnes of rail freight and about three million tonnes of road freight per year, according to the report.

South Australian Freight Council chief executive Neil Murphy said the large forecast increase meant there would be many more b-double trucks and road trains on our roads.

"There will need to be an expansion of capacity on key roads leading to and from mines," Mr Murphy said.

"An increased number of passing lanes on roads with increased traffic, facilitating the interaction of freight with other road-users. Engineering improvements such as wider lanes, a better curve radius, improved lines of sight, et cetera, to facilitate access by larger vehicles."

Water also was a key issue.

"Water scarcity and the lack of information has created uncertainty for projects, and so they have stated that it could lead to unsustainable solutions, selecting less-preferred options or delays to their project while they sought new sources," the report said.

"The development of a desalination facility on the Eyre Peninsula for example could be considered to support planned mine developments by 2016 through further collaboration by industry stakeholders."

About 80 per cent of the water requirements were for non-potable water, with 45 per cent expected to come from groundwater and another 30 per cent from desalinated seawater.

The report noted most companies intended to ship minerals with a minimum of value-adding in SA.

"This presents an opportunity ... to further the potential socio-economic benefit to the state," it said.

[Aidan]

Aside from ports, Adelaide Airport was expected to need an upgrade in the next decade and three new airports and one new helipad would need to be built in the State's upper north, to accommodate an increase in flights from 800 in 2013 to 1800 per year by 2021.

Where would the airports and heliport be?