BUST BOOM The dawn of a new min­ing era

The Advertiser - - WEEKEND EXTRA -

AFEW short min­utes af­ter BHP told in­vestors last week that it had made po­ten­tially one of the most sig­nif­i­cant cop­per finds in South Aus­tralian his­tory, Lindsay Owler’s phone started ring­ing.

Ini­tially Mr Owler, the man­ag­ing di­rec­tor of ex­plo­ration com­pany Arg­onaut Re­sources, was a lit­tle con­fused as to why the bro­ker he had spo­ken to just the evening be­fore was on the blower again so soon, but it quickly be­came clear.

The South Aus­tralian cop­per rush was on again.

Min­ing is a clas­sic cycli­cal in­dus­try: prices rise, in­vestors get ex­cited and pour money into min­ers and ex­plor­ers, ea­ger to take a punt on who might make the next big strike.

Then prices crash and your next taxi trip might be cour­tesy of a for­mer ge­ol­o­gist.

In the mid-2000s, South Aus­tralia was in the grip of a boom in in­ter­est in the sec­tor.

New com­pa­nies were list­ing on the stock ex­change ev­ery few months, or even weeks, ura­nium was billed as the so­lu­tion to cli­mate change (pre-Fukushima) and the State Gov­ern­ment was kick­ing in fund­ing help for high­risk ex­plo­ration.

A gov­ern­ment tar­get of $100 mil­lion in ex­plo­ration spend­ing soon looked un­am­bi­tious and was eas­ily sur­passed, as ex­plor­ers rushed to find the next Olympic Dam, and drill rigs couldn’t be had for love nor money.

Then the GFC hit, and while the bot­tom didn’t fall com­pletely out of the ex­plo­ration sec­tor, it cer­tainly lost its mojo, and in re­cent years has been very flat, with ex­plor­ers strug­gling to keep the lights on.

The ma­jor achieve­ment of that ex­plo­ration boom was the dis­cov­ery of the Car­ra­p­ateena cop­per deposit by one­man band Rudy Gomez, with that pro­ject now be­ing de­vel­oped into a $916 mil­lion mine by OZ Min­er­als, set to start pro­duc­tion next year.

Many other touted prod­ucts, across com­modi­ties as di­verse as iron ore, graphite, and cobalt have been pro­gress­ing but have not yet been de­vel­oped, and SA’s tally of op­er­at­ing mines sits at just nine.

The BHP strike at Oak Dam, of 180m of cop­per at a grade of 6 per cent, from about 1km un­der­ground, has fired up the sec­tor again how­ever, and other com­modi­ties such as iron ore are also gen­er­at­ing in­ter­est.

Dr Paul Hei­ther­say, chief ex­ec­u­tive of the Depart­ment for Min­ing and En­ergy, said SA’s cop­per po­ten­tial has al­ways been of in­ter­est (there is a State Gov­ern­ment tar­get to boost our cop­per out­put from just more than 260,000 tonnes to one mil­lion by the mid 2030s) but new dis­cov­er­ies helped gen­er­ate in­ter­na­tional in­ter­est.

“The dis­cov­ery of the Car­ra­p­ateena deposit ... quickly drew the at­ten­tion of Teck and other in­ter­na­tional min­ing com­pa­nies that con­tinue to ex­plore the Gawler Cra­ton for sim­i­lar min­er­al­i­sa­tion,’’ Dr Hei­ther­say said.

“This new dis­cov­ery from BHP to­gether with re­cent re­sults from OZ Min­er­als will high­light to all cop­per ex­plor­ers that South Aus­tralia is ‘ele­phant coun­try’.

“A chart that was pro­duced for the Cop­per Strat­egy shows that com­pared with the deposit in­ven­tory in other cop­per-pro­duc­ing ju­ris­dic­tions, South Aus­tralia has a big gap be­tween Olympic Dam and the other de­posits, which sug­gested there are other world­class ore bod­ies out there to be found.’’

Com­pa­nies such as Arg­onaut Re­sources, which has ten­e­ments near the Oak Dam find, have ex­pe­ri­enced share price jumps in the past week, with shares in Co­hiba Min­er­als, which has a ten­e­ment just 2km from the find, qua­dru­pling in a cou­ple of days.

On the iron ore front, Hav­i­lah Re­sources said this week it had found a po­ten­tially large, new iron ore deposit in the state’s east, found with fi­nan­cial help from San­jeev Gupta’s GFG Al­liance which owns the Whyalla steel­works.

En­ergy and Min­ing Minister Dan van Holst Pellekaan told the SA Ex­plo­ration and Min­ing Con­fer­ence yesterday that the in­dus­try was a strong eco­nomic con­trib­u­tor.

“Over the last fi­nan­cial year, your sec­tor (min­er­als and petroleum) de­liv­ered $5.6 bil­lion in pro­duc­tion, $4 bil­lion in ex­ports, and pro­vided $236 mil­lion to South Aus­tralia via roy­al­ties which help pay for our schools, health and other ser­vices, in­fra­struc­ture and so on,’’ he said.

“I am pleased to say that min­eral ex­plo­ration of $21.6 mil­lion in the Septem­ber quar­ter was the high­est quar­ter ex­pen­di­ture since De­cem­ber 2014, with cop­per ex­plo­ration ac­count­ing for more than half.’’

And on the pro­duc­tion front, the Car­ra­p­ateena deposit will be­come the $916 mil­lion Car­ra­p­ateena cop­per and gold mine late next year, when owner OZ Min­er­als says it will be­gin pro­duc­ing cop­per. The mine is a good ex­am­ple of the sort of min­eral riches that lie be­low the state’s sur­face, but with a time from dis­cov­ery to min­ing of 13 years, it also an in­di­ca­tion that in this in­dus­try, there’s no such thing as overnight suc­cess. PAGE 65: $1M PRIZE TO UN­EARTH COP­PER, GOLD DE­POSITS

This new dis­cov­ery from BHP to­gether with re­cent re­sults from OZ Min­er­als will high­light to all cop­per ex­plor­ers that South Aus­tralia is ele­phant coun­try

PREPA­RA­TION: Oz Min­er­als’ $916 mil­lion mine is set to start pro­duc­tion next year.

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