#Official Mining Thread

[rhino]

More tonnage from Wilgerup - from today's Adelaide Now:

Aussino to fund Centrex feasibility study
CAMERON ENGLAND, CHIEF BUSINESS REPORTER
January 10, 2010 11:30pm

CENTREX METALS has signed a deal which could boost the output from its Wilgerup mine on the Eyre Peninsula by more than half.
Aussino Mining has agreed to fund a feasibility study looking at whether low-grade ore at the Wilgerup site, near Lock, can be economically upgraded into a saleable product.
Aussino will pay for the feasibility study in return for the first right to develop the project in joint venture with Centrex.
The Adelaide company's managing director Gerard Anderson said on Friday the process had the potential to upgrade 15-16 million tonnes of low grade material into seven to eight million tonnes of ore.
"Centrex sees this (agreement) as a significant opportunity for the company to further optimise the Wilgerup resource and the potential to extract additional high-grade ore tonnes from material currently classified as waste,'' the company said in a statement.
"The proposal also provides further benefits to the company by potentially reducing the overall mine footprint of the waste dump and reducing the rehabilitation requirements for the Wilgerup mine.
"Centrex is not responsible for any capital or operating costs of the project and only needs to supply access to the mineralised waste stockpile.''
Centrex already plans to export more than 12 million tonnes of ore from Wilgerup, starting in the second half of this year.

[skyliner]

I wonder if anyone has thought of a pipeline from the Pt Lowly site to the lib. site for connection to the sea. it should be a consideration costing less than $500m? it could be on the land surface all the way over thus avoiding trenching costs and as the land is relatively flat this also would reduce costs. It would call for pumping facilities near the sea site and perhaps along the way however. This way all parties are addressed in some way.

I'm confused. Do you mean suck water from the guly into the Desal plant at Point Lowly (for use by BHP, etc) and have an outlet pipe running E->W across the peninsula to discharge brine into the open sea beyond Ceduna?

Exactly.

SA - STATE ON THE MOVE

[Wayno]

I wonder if anyone has thought of a pipeline from the Pt Lowly site to the lib. site for connection to the sea. it should be a consideration costing less than $500m? it could be on the land surface all the way over thus avoiding trenching costs and as the land is relatively flat this also would reduce costs. It would call for pumping facilities near the sea site and perhaps along the way however. This way all parties are addressed in some way.

I'm confused. Do you mean suck water from the guly into the Desal plant at Point Lowly (for use by BHP, etc) and have an outlet pipe running E->W across the peninsula to discharge brine into the open sea beyond Ceduna?

Exactly.

not sure if that would work - presumably the discharge is heavy in solids (salt/minerals/sand) and would be difficult to pump over long distances. Would probably need to be 'watered down' to go that far. Interesting thought though...

[Wayno]

Another piece of SA Mining industry infrastructure...

This might sound boring, but it's a big tick of confidence for SA, and shows a general increase in appetite for business risk.

From AdelaideNow:

Whyalla diesel refinery approval to fuel SA mining

THE State Government has approved the construction of a $110 million diesel storage and refinery facility at Port Bonython, north of Whyalla.

Adelaide-based energy company Stuart Petroleum, through its subsidiary Port Bonython Fuels, won approval to build the facility, which has the potential to become a diesel hub for South Australia's mining and transport industries.

The project's $60 million first stage would include:
* CONSTRUCTION of fuel unloading facilities at Port Bonython jetty.
* A 5.3KM fuel pipeline.
* STORAGE tanks with a capacity more than 100 million litres.
* TRUCK loading facilities.

The second stage would involve building a refinery, which would process oil from the Cooper Basin into diesel, and an expansion of storage capacity. Port Bonython is used by Santos for the export of LPG and other petroleum products.

Stuart was negotiating with customers and diesel suppliers, and hoped to make a final decision to go ahead with the project before the middle of the year, managing director Tino Guglielmo said yesterday.

Australia is a net importer of diesel, with much of it coming from South-East Asia.

"What this does is allows us to bring in larger economic quantities directly from South-East Asia,'' Mr Guglielmo said. "Stuart is presently negotiating with major industry participants who have expressed an interest in the project and Port Bonython fuels may ultimately choose to share its 100 per cent equity with a business partner.''

The facility would be capable of delivering up to a billion litres of diesel a year, he said.

Urban Development and Planning Minister Paul Holloway said the two-stage development would create 20 jobs in the Upper Spencer Gulf during construction and a further 20 jobs once it was operating.

"That is great news for the local economy of Whyalla,'' Mr Holloway said. "His proposal has been assessed by the Development Assessment Commission and I have accepted that independent authority's recommendation that the project be given conditional approval.

"The 23 conditions imposed on the development ensure that no environmental harm is caused and the appropriate management plans are in place to govern its construction and operation.''

Whyalla Economic Development Board chief executive officer Steve Arndt said the project was a sign of confidence, especially for the mining sector.

"This is an important project for us in terms of really kicking things off in 2010 and this is only going to be the start for what's going to be a pretty big couple of years for Whyalla,'' he said.

Mr Arndt said Whyalla was already a hub for the mining sector, servicing OneSteel's Whyalla iron ore and steel-making operations, BHP Billiton's Olympic Dam mine and many iron ore projects at various stages of development on the Eyre Peninsula.

"Port Bonython is geographically central to current and future major product users and as such presents a sound logistical solution to long-term fuel supplies for industry and other users in the northern and western regions of our state,'' he said.

[Aidan]

I wonder if anyone has thought of a pipeline from the Pt Lowly site to the lib. site for connection to the sea.

What would be the point of that? It looks to me like it would have all the disadvantages of the Lib site without the advantage of improving the Eyre Peninsula's water supply arrangements.

If you want to pump the brine somewhere, the natural saltpans around Port Augusta look like a much better destination.

[rhino]

This might sound boring, but it's a big tick of confidence for SA, and shows a general increase in appetite for business risk.

I agree, it's good news, and not just for the region.

[Mpol]

So when will these mines start!? And when (and more importantly HOW) will they impact our state? Excuse my ignorance.

[Wayno]

So when will these mines start!? And when (and more importantly HOW) will they impact our state? Excuse my ignorance.

Pls read this recent post - http://www.sensational-adelaide.com/for ... 750#p70564

[skyliner]

I wonder if anyone has thought of a pipeline from the Pt Lowly site to the lib. site for connection to the sea.

What would be the point of that? It looks to me like it would have all the disadvantages of the Lib site without the advantage of improving the Eyre Peninsula's water supply arrangements.

If you want to pump the brine somewhere, the natural saltpans around Port Augusta look like a much better destination.

This was JUST an idea to divert brine from Spencer Gulf. Salt lakes look a better option and not as expensive as my suggestion. Did not even think of the lakes. Should bt a workable alternative.

SA - STATE ON THE MOVE

[Wayno]

Starting this year

Suspect we'll see 4-5 mines starting this year. Here's one of them...

ADELAIDE-BASED explorer IronClad Mining says its planned iron-ore mine on the Eyre Peninsula will cost just $45 million to build and is likely to be in production by November.

Releasing the findings of its pre-feasibility study yesterday, the junior explorer said the proposed two-million-tonne-per-annum mine at Wilcherry Hill near Kimba would be profitable, returning an average margin of $28 a tonne.

IronClad executive chairman Ian Finch said the return estimate was conservative, based on 2009 benchmark iron ore prices and stronger prices could add another $40 a tonne to its margins.

"The outlook for iron ore prices has gone up considerably since that ( pre-feasibility study) was instigated and the financial landscape is now looking a lot better,'' Mr Finch said. "The project is looking fantastic, it is looking dynamic and we are on schedule.''

The pre-feasibility study suggests IronClad spend $10 million to bring the project into production, with the remaining $35 million funded by contractors and paid back during the mine's operation.

Mr Finch said the proposal remained flexible and the company might yet decide to pay the $45 million capital cost up front.

"Not everything is cast in stone but we are certainly negotiating with contractors on that basis,'' he said. "If when we look at the bankable feasibility, we find it is better for us to stump up the capital costs ourselves and take that away from the operating costs, then we may well do it that way.''

The study forecasts stage one of the projects will involve the mining of high-grade magnetite (with an iron grade of more than 60 per cent) from shallow, open-cut pits.

The lower-grade ore would be stockpiled and processed at later stages of the development. IronClad estimates the transport and port costs to ship out of Port Adelaide would total $40 a tonne, on top of mining costs of $8 a tonne.

Mr Finch said if a bulk-commodities port at Port Bonython on Eyre Peninsula were developed, it would make a ``substantial difference'' to the project, shaving at least $20 a tonne off the port and transport costs.

"The actual cost to dig it out of the ground is very little and because it is direct shipping ore. . . it is also very low cost to process,'' he said.

Mr Finch said the company was well advanced with the approvals process and a full bankable feasibility study for the project would be completed in late March.

He said that while production was initially forecast for September, the start date was more likely to be November.

[Wayno]

Mining Status Update

Thought it worthwhile to summarise the state of play with mining in SA (as at end-2009). Two charts below - operating mines & future mines.

Operating Mines
SA receives ~$168m worth of royalties per year from the 10 'operating mines' listed below. Most have many many years to run. There's also a few more on this list that are 'under construction' or experiencing financial troubles and should start/restart in 2010 or soon after. so we should end 2010 with 14-ish operating mines.

operating-mining-status-jan-2010.JPG (73.55 KiB) Viewed 2028 times

Future Mines
This list shows the 20+ 'reasonably reliable' prospective mines (starting in next 2-5 years) sorted by their state of approval/development maturity. There's MANY MORE embryonic mines in SA not on this list - but they are too distant to be declared a reliable prospect at this time.

future-mining-status-jan-2010.JPG (155.31 KiB) Viewed 2028 times

Here's a couple of maps showing where all the above activity is occurring ==> http://www.pir.sa.gov.au/minerals/geolo ... _resources

[Wayno]

Oh, and of course BHP ODX deserves it's own status update...

BHP is expected to soon release its response to public submissions about the ODX EIS (Environmental impact Statement) which went public back in May 2009 and was open for comment until August 2009. It'll be interesting to see if BHP releases this "Supplementary EIS" before or after the state election!

All public submissions are available online here (http://www.olympicdameis.sa.gov.au/html/submissions.cfm). I've looked at many (chosen at random) and the main concern is about the Pt Lowly Desal Plant. This topic alone leads me to believe that the State Govt will push for BHP to defer releasing its Supplementary EIS until after the election. I can imagine Rann not wanting the Desal Plant concerns diluting his base of voters.

Here's the overall process flow:

odx-status.JPG (86.96 KiB) Viewed 2019 times

I envisage the remains 4 steps not taking very long at all, hopefully all done and dusted by end-2010.

[edit]Spelling fixed in above post (changed from it's to its). Thanks Mono for stalking me

[skyliner]

Thanks for the overview Wayno - love those snapshot analyses - comprehension is so much quicker. Diagrams and tables are always very useful. SA looks to be in a good position in future.

Re ODX and point Lowly, i am sure I put a suggestion on this forum that compromised and lowered costings for the Desal plant and would make both parties happier. (on the Pt Lowly thread - I think). Will be interesting as to the maneuverings of one Mr Rann at this time.

SA - STATE ON THE MOVE

[rhino]

From today's Adelaide Now:

More jobs at failed Australian Zircon's Mindarie mine jobs go
by Staff Writers From: The Advertiser February 08, 2010 10:20AM

MORE than 20 staff working at a mineral sands mine in the state's east will lose their jobs next week.
Operations at the site will end next week, the ABC reports.
The Australian Zircon mine has been in the hands of an administrator since October when mining at the site was stopped.The remaining workers have been processing stockpiled ore.
The company's secondary processing plants processing ilmenite, zircon and rutile, had sales of more than $US1 million, administrator Bryan Hughes told shareholders in an Australian Securities Exchange update in December.
However, this was unsustainable, he told the ABC today.
"That ongoing processing of the stockpile was always being monitored and scrutinised closely and only to continue while it was still profitable," he said.
"The rehabilitation work continues out at Mindarie and that will continue until all the rehabilitation is finalised and that obviously keeps the workforce out there to some extent."
In December, the administrator told The Advertiser six bidders had been short-listed for the mothballed zircon mine, with final offers due by mid-January.
There is no update on this process at the moment.
Australian Zircon's largest shareholder, DCM Decometal had pumped in $6 million towards priority payments such as employees' pay and banks repayments. and talks were underway to get another $8 million through a deed of company arrangement.




What is going on with this? Why is there no update yet?

[Wayno]

What is going on with this? Why is there no update yet?

It certainly is a conundrum. Zircon is in high demand as the Jacinth Ambrosia Sands mine (near Ceduna) clearly shows. Being close to Adelaide, the Mindarie mine operations should be a no-brainer. Just need to wait and see.