Deep Under Cover

Gold. Silver. Copper. Uranium. Iron ore. South Australia’s lands are rich with minerals, as more and more companies are discovering

When OZ Minerals chief executive Andrew Cole announced the go-ahead for the company’s $916 million Carrapateena copper and gold mine in Far North South Australia in August, his message was clear: this is only the beginning. OZ, which also owns the Prominent Hill mine – which produces about 100,000 tonnes of copper and 120,000 ounces of gold per year – is convinced that there is much more to be found under the deep layers of rock which cover much of the state’s outback.

And they’re not alone.

The prevailing wisdom in the minerals sector is that large deposits are not an anomaly. Instead, they tend to come in clusters. This makes the existence of the Olympic Dam deposit – one of the largest deposits in the world which BHP could be mining for another 100 years or so, and which has already been mined since 1988 – a signifier that there should be more mega-deposits out there.

BHP is currently focused on its Olympic Dam expansion project, under which it will spend $600 million at the massive copper, gold, silver and uranium mine this year alone. The company is looking to expand into the extensive southern zone of the deposit and, earlier this year, put out a public call for 350 new staff to join its ranks.

“These investments – in our underground infrastructure and above-ground processing operations – will help us build the foundations for long-term, safe, stable and sustainable growth at Olympic Dam,” asset president Jacqui McGill told a lunch in Adelaide this year.

As a result of the upgrade, copper production would dip to 150,000 tonnes this financial year, but was expected to increase to about 215,000 tonnes in 2019

and 280,000 tonnes in 2022.

McGill said also that heap leach technology, which uses chemical reactions to extract precious metals, copper, uranium, and other compounds from ore, and is currently being tested in Adelaide, might enable BHP to expand Olympic Dam production to more than 450,000 tonnes a year.

At Carrapateena, OZ is expecting to produce 65,000 tonnes of copper and 67,000 ounces of gold per year, with the mine expected to operate for more than two decades.

Construction at Carrapateena has already started – OZ actually sank a shaft earlier this year, well before signing off formally on the decision to mine – but the company is not resting on its laurels on the exploration front. Late last month, it kicked off a new program in collaboration with Minotaur Exploration and is aiming to drill test new targets around Prominent Hill later this year.

Carrapateena and the Olympic Dam expansion will go a reasonable way towards reaching a target the State Government has set for itself – tripling SA’s annual

copper production to 1 million tonnes within the next two decades. Part of this project includes a $14.6 million “research consortium”, led by Adelaide University and including BHP and OZ, which plans to develop advanced technologies that will boost copper production.

And it’s not just copper and gold which are generating interest. Under new owner GFG Alliance, the former Arrium steelmaking and iron ore operations at Whyalla are set to expand. GFG Alliance executive chairman Sanjeev Gupta is looking at expanding the Whyalla port capacity from 13 million to 50 million tonnes of ore, and potentially building a new steelmaking plant to more than quadruple output. Since taking on the Arrium assets at the start of September, the company has recently bought a majority stake in Adelaide renewable energy company Zen Energy.

Iron Road also has grand ambitions for iron ore on the Eyre Peninsula, with plans for a 25-year-plus mine generating more than 20 million tonnes of ore per year. The project includes a mine, 148km rail line and a new port at Cape Hardy on the eastern side of the peninsula.

The $US3.7 billion project has already had a mining lease granted by the State Government, with the company hoping to conclude financing discussions by the end of the year.

At the niche end of the mining sector, a number of companies are working on graphite projects, with Lincoln Minerals recently submitting its environmental plan for its $40 million Kookaburra Gully graphite project on the Eyre Peninsula.

South Australia is home to a large proportion of Australia’s known graphite resources – 61 per cent of discovered resources as at 2015, according to the Department of State Development.

This has driven interest from several companies including Archer Exploration, which has submitted a mining lease proposal for its Campoona project, also on the Eyre Peninsula.

On the uranium front, the Honeymoon uranium project is currently running a pilot plant with a view to restarting, while the Beverley in-situ uranium mine owned by Heathgate Resources continues to produce.

Mineral Resources and Development Minister Tom Koutsantonis says there is great scope for expansion.

“The opportunities for growth in our mineral resources sector are undeniable,’’ he says. “In the past few months alone we have seen OZ Minerals commit to a $1 billion investment in the Carrapateena copper project and BHP announce a $600 million expansion of Olympic Dam. Experts also believe there are other very large copper resources still to be discovered.’’

WORDS – Cameron England


SA’s resource riches

Copper – 68%

of Australia’s economic demonstrated copper resources and 27% of Australia’s copper production

Uranium – 80%

of Australia’s total known uranium resources and 80% of Australia’s current uranium production

Australia – 28%

of Australia’s economic demonstrated resources of gold

World-class

World-class iron-oxide-copper-gold deposits at Olympic Dam and Prominent Hill; zircon deposits at Jacinth-Ambrosia

In Operation

Beverley                             Uranium
Cairn Hill                           Iron ore and copper
Challenger                         Gold
Four Mile                           Uranium
Kanmantoo                       Copper
Middleback Ranges       Iron ore
Olympic Dam                   Copper, gold, silver, uranium
Portia                                   Gold
Tarcoola                             Gold