#Official Mining Thread

[Waewick]

Understand what you saying Aiden but i'm not going to do that cool quote thing you do...way to lazy.


1) The advantage is massive 30mins Adl to mel, 4.5 hrs to Perth. I work for a national company and Adelaide pales in it's significance to Perth as things can be run out of Melbourne or Sydeny. We are on equal terms of product sales however in Perth they have 4 more employees. That doesn't sound much but there are a number of companies who do the same thing of mine who all have those additional staff your talk 20 oe 30 more people employed in white collar and senior management roles which are unavailable to Adelaidians....so they move.

2) True but I personally think the extreme focus Rann has on Mining and Defence does restrict his vision to other areas. I'm not going to suggest i'm intelligent enough to think of anything else The loss of focus on manufacturing and agricultural (look at the RIverland for instance...its like nothing has happened, had this occured in a place like QLD it would be national headlines and there would be significant support....outside an election date). For me I think we still haven't taken advantage of our proximity to the centre of Australia and the link to Darwin now but then again I don't have many ideas so why would others.

3) Apart from lower taxes some start up companies get a lot more support to establish themselves, especially the old green ones**


4)Sorry what I meant is that to some people cheap housing isn't the only thing to move to a state, the problem with Adelaide is that is about all we rest our hat on. You want to build a boat then move here. What to be a miner ? don't bother they can fly you in from anywhere? The majority of the proffesionals also have limited scope such as Lawyers,Bankers, Accountants and engineers, why move to Adelaide over a cheap house when the opportunities are elsewhere.




** I admit I have no basis apart from what a few people tell me, i'm trying to verify this as we speak.

[Wayno]

How many years constitutes a sustained industry? as a comparison, when did car manufacturing start in SA?

I foresee mining in SA growing across the 20 years, and then sustaining from that level (occasionally ebbing/flowing with global economics).

I don't buy the point about QLD/WA being closer to Asian markets than ourselves (if that's what you meant Capitalist?). A HUGE amount of minerals are exported across larger distances (e.g. from South America), and at very similar prices to australian minerals. We're much better positioned (geographically) than many.

I think Capitalist is also eluding to the point that each mine, by its very nature, has a short lifespan, and only need 1/5th of the personnel compared to only 30yrs ago. Also 90%+ of mines last only 7-15 years (ODX being the exception in Oz - it'll be with us for 80+ years). The good news is that mining companies prefer to continue making profits beyond 7-15 years, so they tend to have several nearby operations ready to ramp-up! The SA Govt's PACE initiative is helping in this respect too.

So, will mining be a sustainable SA industry? Well there's probably not as many jobs as Rann would have us believe, but still heaps of royalties (and flow-on taxes) which will sustain SA's economic expansion for a looong time.

I agree that mining in SA is not materially detracting from other local industries. It's a tight job market though - so there must be some impact.

[Waewick]

I'm not sure when car manufacturing started in Adelaide? Interesting Analogy

The one major disappointment I do have with mining in Australia which I am also disappointed in with the agricultural sector is the lack of value add that occurs in the country.

In answer to your point Wayno, with QLD and WA I was talking about the population boom and the mining booms. The population growth for these regions has occured for reasons other than the mining boom, don't get me wrong it helped but I don't think mining boom=population boom especially in Adelaide.

Your point about minerals be transferred many miles is also a valid one supported by the less and less people actually needed to do the job is what I mean by the mining boom in SA is going to be vastly overrated and it will be some nice royalities but not much else.

[Wayno]

...the mining boom in SA is going to be vastly overrated and it will be some nice royalities but not much else.

That's a bit harsh. There's ~10,000 people working in the SA mining industry (plus thousands more in spin-off jobs). I have no recent data (most recent stats are from 1998), but suspect the no. of mining industry jobs to increase to 15000+ over the next few years. Most of that will be outback jobs (85%+), but we should also expect a few Mining HQs and white collar office jobs in Adelaide CBD.

By way of comparison, the SA agriculture industry decreased from 45,000 jobs in the mid-90s to 30,000 by the late-00's. Many of the families ousted from the agricultural industry (mainly due to the drought) are probably quite fond on the mining game.

Diversification is good.

[edit]A quick comparison of mining jobs by state (data is 18month old):
* WA - 55,000 (most in the pilbara)
* QLD - 35,000 (most in the bowen basin)
* NSW - 15,000
* SA - 10,000 (roxby is the biggest centre)
* VIC & TAS - 8,000

[Waewick]

no doubt that diversity is good and I agree

one element I don't think has been explored by anyone is getting a large rural community to become the "town of choice" for a mining company or companies.

for example say Renmark, a development which is offered to say BHP, the arrangement is cheap land a community feel and the Renmark airport is upgrade to the point that BHP can fly people to wherever they wish.

BHP benefit by getting a "community feel" to its employees which live in a central area and are less likely to bugger off and more likely to hang around longer.

SA gets a benefit by having a rural community become larger with increase in tax and other revenues.

I'm sure someone could expand of completely rubbish the idea but its got to be thought about.

[Wayno]

no doubt that diversity is good and I agree

one element I don't think has been explored by anyone is getting a large rural community to become the "town of choice" for a mining company or companies.

for example say Renmark, a development which is offered to say BHP, the arrangement is cheap land a community feel and the Renmark airport is upgrade to the point that BHP can fly people to wherever they wish.

BHP benefit by getting a "community feel" to its employees which live in a central area and are less likely to bugger off and more likely to hang around longer.

SA gets a benefit by having a rural community become larger with increase in tax and other revenues.

I'm sure someone could expand of completely rubbish the idea but its got to be thought about.

Good idea Capitalist - but i'd suggest Renmark (as an example) should take the initiative itself and work direct with the mining companies to make itself a mining employee town of choice. Otherwise the govt would be seen to be playing favourites. Maybe i'm wrong, but that's how i'd see it working best...

[Waewick]

perhaps

but a governmenr backed deal would be better, they may prefer somewhere like Lincoln or Whyalla to prop up the place.

[skyliner]

Read in the AFR today about a Uranium Conference in the Hilton coming up - applications contacts in the same ad. Would be good if one of us could get there.Get some info [possibly in relation to ODX etc. etc.) Second time I have seen this ad.

SA - STATE ON THE MOVE.

[Wayno]

State funding to support Olympic Dam expansion

Here's some extra news in addition to the article below, the next 15 YEARS of uranium supply from all existing mines worldwide is already under contract! and there's something like 1 new reactor being built every month for the foreseeable future somewhere in the world. We should expect to see many more uranium mines popping up in SA in the next 1-3 years.

From mineweb:

The South Australian Government has allocated funds for a task force looking into the massive and protracted study on expanding the big Olympic Dam copper-uranium-gold mine in the State's far north.

An uranium conference in Adelaide was told today by the State Minister for Mineral Resources Development, Paul Holloway, that the planned transformation of the Olympic Dam underground mine into a massive open cut operation would result in the world's largest uranium mine, third largest copper mine and a significant gold producer.

Holloway told Paydirt's Uranium Conference that the Rann State Government had allocated A$6.2 million (US$5.56 million) through to 2012/13 for the Olympic Dam Task Force to assist owner BHP Billiton in proving the viability of this project.

Holloway said that the expansion would generate A$6.9 billion (US$6.19 B) per annum in revenue when it reached full capacity and BHP's draft environmental impact study said the would create up to 7,700 construction and short term jobs during the 11 year period before full production is reached. The operation's workforce at Olympic Dam would also double to more than 8,000.

Holloway said that despite a slight drop in volume, the value of Australian uranium exports exceeded A$1 billion for the first time in 2008-09.

"In terms of exploration expenditure on uranium in South Australia we have seen A$25.2 million (US$22.6 million) recorded in the most recent September 2009 quarter," he said.

Uranium exploration activity in South Australia continues to grow with over 300 uranium focused mineral exploration licences and over 100 mineral exploration licence applications registered as at September 2009.

The growing importance of South Australia in the global uranium scene was reinforced by Access Economics back in November claiming that SA is set to become the world's next energy export powerhouse through its uranium reserves.

Recent developments included a ground breaking ceremony last April for the Honeymoon uranium project for which owner UraniumOne signed a A$104 million (US$94.35 million) joint venture with the Mitsui group for development.

"If all goes to plan for Uranium One they expect to see production from Honeymoon in the second half of this year," Holloway said.

The Minister said the Government was looking forward to resolution of commercial issues facing the joint venture of Quasar Resources and Alliance Resources Ltd (ASX: AGS) on the advanced Four Mile uranium project, only 8 kilometres from the Beverley uranium mine operated by Quasar's parent Heathgate Resources which, in turn, is owned by global giant General Atomics.

First production from the A$90 million (US$80.8 million) Four Mile uranium project in South Australia is still possible in calendar 2010, according to 25% project owner, Alliance Resources.

In a separate presentation to the conference Alliance Resources' chief executive Steve Johnston said Four Mile's said the production milestone was achievable subject only to resolution of current legal issues between the company and 75% project owner Quasar.

The two parties are in dispute over native title issues relating to the joint venture -- with a court decision currently awaited -- payments to Heathgate Resources for modifications to the Beverley processing plant to process the Four Mile ore, and budget blowouts.

The project was initially estimated to cost A$90 million (Alliance: A$22.5 million share) but has been re-estimated higher to A$112 million (Alliance: A$28 million). Alliance has contributed just over A$13 million to the mine's development to date.

"Alliance's position is that the cost blowouts are unnecessary and are an unjustified change of scope to the project," Johnson said.

"However, presuming a favourable court outcome and resolution of other matters, Four Mile can be producing this year as that mine decision was made in 2008 based on an in-situ recovery mining model," Johnson said.

"The joint venture has continued to move down that path since then as the project is low cost and low environmental impact," he said.

"We can be ready to go quickly with a resin loading plant at Four Mile, transport of resin by truck to Beverley for stripping, precipitation and drying, packing and storage of the concentrate, and then the return of the stripped resin by truck to Four Mile.

The project has an inferred and indicated resource of 9.7 million tonnes at 0.33% uranium oxide for contained concentrate of 31,700 tonnes.

[Waewick]

What sucks up SA is we won’t take make our own nuclear reactor and we won’t value add, just sell the rocks and eventually buy back the value added product at a premium when we finally cave in to nuclear power

If we are such a dominant force in the market we should be setting the rules, that we will only sell the value added uranium not the raw product.

[Will]

What sucks up SA is we won’t take make our own nuclear reactor and we won’t value add, just sell the rocks and eventually buy back the value added product at a premium when we finally cave in to nuclear power

If we are such a dominant force in the market we should be setting the rules, that we will only sell the value added uranium not the raw product.

Hopefully now that Barack Obama has commissioned new nuclear reactors in the USA, the ALP here sees that nuclear power is not something to ideologically oppose.

[Aidan]

What sucks up SA is we won’t take make our own nuclear reactor and we won’t value add, just sell the rocks and eventually buy back the value added product at a premium when we finally cave in to nuclear power

'Tis a question of if, not when. The cost of renewables varies a lot, and in the best locations it works out cheaper than nuclear. SA has a low population density, so there are likely to be enough renewable power sources to satisfy demand at less than the cost of nuclear.

If we are such a dominant force in the market we should be setting the rules, that we will only sell the value added uranium not the raw product.

Adding the value is itself expensive, and probably the most dangerous part of the process. I'm not saying we shouldn't enrich the uranium, but the case for doing so isn't as strong as you seem to think.

[Waewick]

I realise we have the low population however I believe that in the end the carbon reduction policies will kick in making nuclear a viable alternative.

I realise how dangerous it can be, but I think its a fairly acceptable risk given the benefits it could bring to the state.

[mattblack]

If hot rocks technology comes good we wont have to think about nuclear for another 50 years. It has massive, massive potential. Still at the crawling stage at the moment, wait till its up and running. SA is best suited to renewables, low population, vast multi faceted environments for solar, wind, hotrocks and wave. Cities such as Sydney or Melbourne im not so sure about though.

[Wayno]

If hot rocks technology comes good we wont have to think about nuclear for another 50 years. It has massive, massive potential

Bingo!