#Official Mining Thread

[Waewick]

I've been hearing about this mining boom for the last decade, and how "it's just around the corner". This promised mining boom seems more like a mining mirage....

I am really dreading December.. It just doesn't feel right that everyone on the planet (who appears to know anything about mining) is saying that it isn't going to happen yet we cling to very small bits of good news as evidence it is going to happen.

[ml69]

Read Kloppers' comments carefully. Olympic Dam will be important for BHP's medium to long term plans (2nd and 3rd tranche), but not critical in the short-term.

Things seem to be pointing to a deferment of Olympic Dam commencement. Not looking good. Hopefully removal of the overburden can still commence in the not-too-distant future, albeit at a slower rate than initially anticipated, rather than postponed for years.

[rhino]

That's right. There are several years of removing overburden before mining really ramps up on the ore body. If they wait for the markets to be right before they start removing overburden, they could miss the next epoch of demand, or at least be late for it.

[Wayno]

yup, slower overburden removal was my guess from a few posts back. In theory BHP could 'approve' the project in December then recruit a bunch of 10yo kids with red trolleys and plastic spades.

I'm hoping for a convoy of large trolleys.

red-trolley.jpg (153.26 KiB) Viewed 2735 times

[Waewick]

well I guess anything is better than nothing.

perhaps the SA Government could start building a couple of nuclear reactors to help with demand....

oh wait, we're broke because Olympic Dam won't be starting

[Wayno]

Fingers cross the SA Govt is doing everything they can to woo investment in local minerals processing plants.

From AdelaideNow:

FOREIGN investors are looking at the Eyre Peninsula as a place to build minerals processing plants, an economic forum in Adelaide was told yesterday.

Centrex Metals managing director Jim White said South Australia should look beyond exporting raw minerals and seek the benefits of a downstream industry.

"We've clearly got a very significant mineral resource in South Australia," he told a Committee for Economic Development of Australia forum.

"We've got an increasing number of mines but we need to focus on what we do with the output from those mines. We have a real opportunity with some of our infrastructure and some of our skills base to add significant value."

Centrex, which is developing a string of iron projects in Eyre Peninsula, has two Chinese partners - Wuhan Iron and Steel and Baotou Iron and Steel.

"They see this jurisdiction, South Australia, as a place where they would like not only to mine - because the mineral resources are here - but also to process," he said. "Processing adds a massive amount of value to the product and also adds massively to the economic and social infrastructure. It's much more engaging with the communities in which we work."

Mr White said the Eyre Peninsula had a natural advantage because of potential deep water ports which would not need dredging.

The area was already connected to the national electricity grid, although this needed upgrading, and had a well established network of towns to provide a residential backbone.

KPMG partner and SA leader on resources Derek Meares told the CEDA forum SA potentially ticked many of the boxes for investors - infrastructure, social licence to operate, the state of the global economy and sovereign risk.

He said SA's world-class resources were already attracting major global players. Rio Tinto has now entered joint venture with Tasman Resources in an exploration tenement near BHP Billiton's Olympic Dam.

"These large players create a platform to develop the mining services industry," he said.

Mineral Resources and Energy Minister Tom Koutsantonis said SA's resources industry had a breadth of opportunity with diverse minerals and energy sources and would take its place "among the global titans".

[Waewick]

well, I guess along with the national maps putting Broken Hill in NSW rather than SA, this could be the biggest kick in the guts to the South Australian economy in a long time

http://www.businessspectator.com.au/bs. ... nt&src=hp2

BHP Billiton Ltd’s head of non-ferrous metals, Andrew Mackenzie, will face tough questions on the miner's Olympic Dam expansion when he holds a series of meetings in Melbourne and Sydney this week, according to The Australian Financial Review.

Speculation has been mounting of late that the miner will announce the copper-uranium expansion will be delayed.

BHP needs to approve the expansion by December 15, or an indenture agreement with the South Australian government will expire.

Mr Mackenzie is also likely to face questions over the possibility of the miner selling a a minority stake in Olympic Dam, according to the AFR.

[Will]

But Broken Hill IS in NSW.....

[Wayno]

Waewick, there's nothing noteworthy in that business spectator article. Hoping we'll restrain ourselves from posting the constant flow of simplistic & negative media regurgitations re ODX.

[Waewick]

Waewick, there's nothing noteworthy in that business spectator article. Hoping we'll restrain ourselves from posting the constant flow of simplistic & negative media regurgitations re ODX.

fair enough, but it does add to the long line of articles indicating ODX is a no go, at least over the short term - which really really annoys me

[skyliner]

Wayno, it is so good to see your positivity (I no doubt believe informed). I too would rather take this stance but the jitters about it seem to be real enough. Is there any commitment to this state as such? The rewards seem enormously out of proportion to investment costs - surely this will carry weight, albeit in the bigger scheme of things.

I take your point about negativity - seems to feed itself - we get enough of this as it is.

SA - GREAT STATE

[Wayno]

The BHP Exec team are certainly playing their cards close to their chest. We should not expect 'tough questions' from the media to change their communications strategy. BHP will advise the markets of their decision at the date & time of their choosing. Unfortunately for newspapers they must sell papers in the interim, and look like they are doing investigative journalism - hence their GORD-like regurgitation symptoms.

The one thing i will reiterate is BHP can 'approve' the expansion and proceed at any pace they wish - read my post from a few weeks ago. Why would they go slow? well their share price is currently depressed and many BIG investors (who 'own' the company) want it higher - one way they can 'help' achieve this is by minimising spend that delivers no immediate gain, irrespective of the longer term benefits.

Is our mining boom a mirage? Well we've gone from 4 mines to 17 or so in just a few years. There's another ~10 due to start operations in the short term (2-4 years). Royalties are up from $70m a year to $200m-ish at present (i'm too lazy to look up the exact numbers, i'm in the ball park +/- $10m or so). Most people don't appreciate the cycle times in this industry. Deferring a decision by 1-2 years means nothing.

I'm presuming many folk in this forum really only became aware of SAs mining industry since joining S-A in the last 1-5 years, and coincidentally since ODX became hot news. Maybe i'm wrong about *you*, statistics often insult individuals, but the impatience & anticipation i'm observing is endemic of our modern now now now culture. Maybe i'm partially to blame - i've tried to make mining appear sexy.

[Waewick]

thanks for the post Wayno.

I work in a fairly transparent industry myself, where Bad news is always backed up with a kick and no news is worse (generally speaking) so I am perhaps reading it in my typical conservative way.

[rev]

World's largest miner wants to explore vast areas of Outback South Australia for major mineral deposits

Business editor Christopher Russell
July 09, 2012 11:00PM




BHP Billiton's expanded exploration licences in South Australia.

BHP Billiton is staking its claim to a vast area of South Australia's Outback, putting it in pole position to find more Olympic Dam-sized deposits.

The world's biggest miner wants to explore a huge, 300km-long arc of land from north of Lake Torrens south towards Hawker and Port Augusta.

The claim, plus $24 million worth of exploration rights BHP has bought from smaller companies over the past few months, represents a major shift in thinking for the miner.

Last year, it had exploration rights to 2658sq km of land. It now wants rights to 22,806sq km - an area a third of the size of Tasmania.


SA Chamber of Mines and Energy chief executive Jason Kuchel said the claim shows BHP's commitment to a long-term future in the state.

"If you take exploration tenements then you have to spend money - it's a requirement of the licence," he said.

"So this speaks to their confidence in the likelihood of making more very significant discoveries in that area."

The move comes as BHP's SA team finetunes the proposal it will take to the company board on the expansion of the Olympic Dam copper, gold and uranium mine.

BHP has until December 15 to commit to the project or face the indenture agreement going back into Parliament. While bipartisan support would ensure its passage, clauses such as the 45-year guarantee on fixed royalty rates could be reopened.

Despite speculation about delays to Olympic Dam, BHP has made no decision or published a cost on the project, estimated by analysts at about $30 billion.

Advance work on the Olympic Dam project continues with the third shipment of Caterpillar mining trucks offloaded from the vessel Carmen on Saturday.

Because BHP is such a big company it has not had to tell the stock exchange about the exploration push because it would not be deemed financially material to its share price.

However, the four smaller companies from which it made acquisitions - Minotaur Exploration, Tasman Resources, Archer Exploration and Copper Range - made stock exchange announcements because the transactions were significant for them.

The claims made under BHP's name - 12 tenements totalling 10,590sq km - are on the public record though not announced by the Government or BHP.

Asked to comment, BHP said the company was "making a relatively low-cost investment in a potential future option".

"We believe there is potential for additional iron oxide, copper, gold discoveries in the Stuart Shelf region of Australia and in the context of our long-term development plans and strategy for Olympic Dam this makes BHP Billiton well placed to develop any future mines in the area."

The Stuart Shelf is a region inside the Gawler Craton geological province which covers much of SA. Rich deposits of mixed copper, gold, silver, uranium and iron are known to be buried in the region - including Olympic Dam, Prominent Hill, Carrapateena and others.

Mineral Resources and Energy Minister Tom Koutsantonis welcomed BHP's increasing interest in SA as a sign major players were optimistic about more big finds.

"BHP Billiton, along with other major resource companies including Rio Tinto, have recently shown their faith in the prospectivity of this part of SA by securing exploration rights," Mr Koutsantonis said. "These investment decisions are yet a further sign of SA's transformation into a mature mining jurisdiction."

The minimum annual expenditure required by government on an exploration licence is not publicly revealed.

However, industry sources say the minimum is usually about $100,000 per tenement a year for three to five years. BHP now wants 40 tenements, so it would need to spend at least $4 million a year, if the average applied.

http://www.adelaidenow.com.au/worlds-la ... 6422050406

Here's a map of all of BHP's tenements..
http://resources.news.com.au/files/2012 ... ements.pdf

[crawf]

Seriously, those protesters.... Enough said.