THE ROAD AHEAD
MINING IN TASMANIA
AFTER battling tough, the Tasmanian mining sector is making a return.
Unlike its mainland counterparts, Tasmania was hurt by a resources boom side-effect; the strong Australian dollar.
With an economy heavily reliant on trade exposed industries, Tasmania felt the sting when the Australian dollar surpassed the US dollar in 2010/2011, and then when commodity prices tumbled.
“The high Australian dollar (we all remember when it hit $1.10 U.S) was a drag on all export-exposed industries,” Tasmanian Resources minister Guy Barnett told The Australian Mining Review.
But times were now looking up for Tasmania as rising international commodity prices improve business conditions for miners and other exporters, Mr Barnett said.
“That is reflected in improved profitability, which is highlighted by the sharp rise in royalty collections,” he said.
In 2016-17, the State Government collected a $39.4 million in mining royalties compared to $15 million in 2015-16.
The reopening of the Henty gold mine in late 2016, the granting of a mining lease to Stellar Resources for its Heemskirk tin project, and the sale of MMG’s shuttered Avebury nickel mine to Dundas Mining in July were also encouraging signs, as was the imminent resumption of production at Copper Mines Tasmania’s Mount Lyell mine.
However, the State’s active environment conservation community has delayed and blocked many mining proposals across its history, and continues to put pressure on new projects from entering the planning pipeline.
In June, Mr Barnett introduced legislation to reduce environmental ‘red tape’ which requires applicants for mining leases to provide environmental information, to reduce “unnecessary duplication”.
Successful leases would still need to obtain environmental approvals from the Environmental Protection Authority (EPA).
“This is one of a raft of changes we have developed over the past 12 months through consultation with key industry stakeholders, including the Tasmanian Minerals and Energy Council,” he said at the time.
“We make no apology for backing mining by supporting new investment and new jobs – our number one priority.”
All in all, Mr Barnett said he was pleased with how Tasmania’s economy was performing.
“Mining and minerals processing account for more than 50 percent of Tasmania’s export earnings, injecting more than $2 billion into the Tasmanian economy,” he said.
“The mining industry supports more than 2000 jobs in the State, with the majority of these located in rural and regional areas, so it is a very important part of the economy.”
According to the Commonwealth Bank’s State of the States July report, Tasmania now ranked third on unemployment with a 5.8 per cent jobless rate, and had the strongest annual employment growth at 3.8 per cent.
“Our population is growing at the fastest rate in years, more than 11,500 new jobs have been created in the past three years, and employment is the highest it has ever been,” Mr Barnett said.
“New capital investment is running strongly and we have every reason for confidence that growth will continue.”
“the reopening of the henty gold mine in late 2016, the granting of a mining lease to stellar resources for its heemskirk tin project, and the sale of MMG’s shuttered avebury nickel mine to dundas Mining in july were also encouraging signs, as was the imminent resumption of production at Copper Mines tasmania’s Mount lyell mine.”
Mine restarts Henty
The first of the sequence of mine reopenings in Tasmania was Henty gold mine in August 2016.
The Queenstown mine was placed in care and maintenance in 2015 by the former owner Unity Mining.
The closure resulted in 150 job losses and was a huge blow for the State.
But last year hope resurfaced when PYBAR subsidiary Diversified Minerals purchased the project.
In January, Henty poured its first gold since returning to production with employment numbers expected to increase as the mine continues to ramp up.
Mount Lyell
Copper Mines of Tasmania’s (CMT) shuttered Mount Lyell copper mine was also returning to production.
The mine has been in care and maintenance since 2014, after it made headlines following three fatal accidents.
Since then, the company has spent $100 million maintaining the mine, and a further million on a feasibility study investigating mine modernisation.
While a start date has not yet been confirmed, in April, the Tasmanian Government announced a $9.5 million investment with CMT to undertake a range of projects needed for the restart of mine operations.
The projects included: $1.5 million to reopen the North Lyell Tunnel, a project to help CMT properly manage water flows; $4.5 million for the access decline refurbishment and preparation; $2 million to replace the 100 year-old West Queen water supply pipeline; and $1.5 million towards crushing mill upgrades.
Mr Barnett said a decision to reopen was “still pending” but they remained optimistic.
“A restart of production at Mt Lyell would create up to 300 direct jobs, which would be great for Queenstown and the West Coast region,” he said.
“The company has indicated a decision will be made this year.”
Avebury
In July, the good news continued when MMG completed the sale of its Avebury nickel mine to Dundas Mining for $25 million.
The Avebury mine, near Zeehan, has been on care and maintenance since 2009, but the upturn in nickel prices this year sparked interest in reopening the project.
According to MMG, Dundas Mining plans to bring the Avebury operation back into production “as soon as possible”, which will deliver further jobs and economic benefits for the State.
When asked when this could be Mr Barnett said he looked forward to a restart of the mine, but the opening date would be a “decision for the company”.
Cleveland
Elementos aims to resume production at the old Cleveland tin, copper and tungsten mine near Savage River in mid-2019, to tie in with the forecast increase in tin prices.
The company plans to develop the mine in three stages: tailings reprocessing, open pit mining, and the redevelopment of the existing underground mine.
Two deposits are accessible from the same underground infrastructure; a large tin and copper deposit and a world class, long life tungsten porphyry deposit.
In September, Elementos announced its diamond drilling programs on site were “progressing well”.
Industry rebound
Acknowledging Tasmanian mining had been through a difficult period, Mr Barnett said the industry was “rebounding strongly”.
“The Government is committed to help maintain this positive momentum by creating the right conditions for investment and growth,” he said.
“Confidence is vital. Without investment no industry can flourish, so it is tremendous to see renewed confidence in the industry.”
One of its most notable announcements was in February when it approved a mining lease for Stellar Resources subsidiary Columbus Metals’ to develop its Heemskirk tin project.
“The company has indicated its intention to develop an underground mine employing up to 180 people at full production, with a mine life of seven years on the Queen Hill/ Severn/Montana deposits,” Mr Barnett said.
“Stellar has advised that exploration drilling is underway and weather-permitting is expected to be completed by mid-2018.”
From a political standpoint, Mr Barnett said he did have some concerns, and aired his views on a campaign launched by the Greens to lock up an additional 10 per cent of the State through an extension of the World Heritage Area.
“Around half of Tasmania is already protected in formal or informal reserves and the Liberal Party will resist any further encroachment on our productive potential,” he said.
“The mining industry needs to heed the warning of what happened to forestry, which lost two out of every three jobs in the industry in the last great conservation land grab.
“Miners need to get informed and get active.”