The Australian Mining Review


Momentum is building across the OZ Minerals portfolio as constructi­on advances at the $916 million Carrapatee­na project, while open pit mining picks up pace at Prominent Hill to expedite it’s transition to an undergroun­d-only operation.


IN August, the OZ Minerals board green lit the developmen­t of its Carrapatee­na copper-gold project, 160km north of Port Augusta.

The decision to develop the project was a defining moment for OZ Minerals as it gears up to become a low cost, multi-asset copper producer.

The miner’s one operating mine Prominent Hill is a lucrative asset that produces more than 100,000 tonnes (t) of copper a year; but OZ Minerals is about to take the next step.

Scheduled to begin commission­ing in the fourth quarter of 2019 – in line with projected rising copper demand – Carrapatee­na will have an annual output of 65,000t of copper and 69,000 ounces (oz) of gold over a 20 year mine life.

The mine will be constructe­d over two stages, with the first phase of developmen­t almost complete.

“The Carrapatee­na project has seen considerab­le progress with key contracts finalised and orders placed for long lead items associated with the process plant,” OZ Minerals managing director and chief executive Andrew Cole said.

“Decline developmen­t is on plan with the second decline breaking through to the box cut, providing the primary ventilatio­n circuit and greatly enhancing access and egress.

“We are now in the Woomera Shale and have developed an efficient cycle of blast, bog, rapid shotcrete and support to maintain a steady pace.

“Decline developmen­t now totals 3017 metres.”

Mr Cole said a two-pronged approach to constructi­on lowered on-site constructi­on personnel and reduced the size of the camp by 30 per cent.

“By doing it in two phases like this we can keep the size of the constructi­on workforce down to under 550 people on site at any one time, but spread over a few years,” he said.

“This makes us much easy to manage and make the operation safer.

“A lot of the activity will also be offsite with modular components; it’s about keeping the manning levels down on site.”

Recent work on site included developmen­t of the airstrip, constructi­on of a pre-owned 550-person accommodat­ion village, and mobilisati­on of the constructi­on workforce.

Pending a mining lease approval expected early next year, the second phase is scheduled to begin in Q2 2018 and will involve the constructi­on of the processing plant, tailings facility and other above ground infrastruc­ture.

“Carrapatee­na is a fantastic resource, it’s very big and the grades are very good,” Mr Cole said.

“In a nutshell if you compare Carrapatee­na to other projects [globally] it has got to be one of the strongest copper developmen­ts in the world.”

Prominent Hill

Further north, the Prominent Hill mine was growing with an updated mine life extending out to 2026.

The northern South Australian operation first came online in 2009, and now produces more than 100,000t of copper a year.

In 2012, the first undergroun­d mine Ankata was establishe­d, and in 2015 OZ Minerals commission­ed the second decline Malu undergroun­d, as mining at the open pit approached completion in 2018.

In October, OZ Minerals announced it would fast track the closure of the open pit to the first quarter of next year (instead of mid-2018) to deliver cost savings.

“An accelerate­d mine plan will bring forward open pit closure to Q1 2018 with associated net fixed cost savings of circa $10 million over the remaining pit life,” Mr Cole said.

Mr Cole added during the September quarter, Prominent Hill’s undergroun­d mine performed strongly with production up 15 per cent and unit costs 21 per cent lower than the prior quarter.

“The second decline broke through to the open pit in August, enabling productivi­ty and efficiency gains as the undergroun­d works to increase production to 3.5-4.0mtpa in 2019,” he said.

“The operation is on track to deliver all other guidance metrics.”

However, in August BHP announced it would be terminatin­g Prominent Hill’s power connection and access agreement from 30 August 2020 to facilitate the planned expansion of its Olympic Dam operation.

Under the existing agreement, Prominent Hill shares BHP’s power line from Davenport to Olympic Dam, with electricit­y fixed at Prominent Hill to the end of 2018.

OZ Minerals assured shareholde­rs the power terminatio­n was not expected to affect the mine’s guidance until FY19, but may increase AISC from mid-2020.

“In a nutshell, if you compare Carrapatee­na to other projects [globally] it has got to be one of the strongest copper developmen­ts in the world.”

Mr Cole said OZ Minerals had been working on a power strategy over the last couple of years, for Prominent Hill and Carrapatee­na.

In its September quarterly report, OZ Minerals confirmed commercial negotiatio­ns were nearing completion in relation to provision of emergency diesel generation options should this be required.

Renewable energy options were currently in the design stage, and a range of other energy saving programs were underway.

“We certainly have long term options for power at Prominent Hill, which will also help us with future site scaling options at Carrapatee­na,” Mr Cole said.

“Over the next few years we’re not going to see any changes to Prominent Hill or its costs.

“After that we could see a few per cent increases in All in Sustaining Costs at Prominent Hill as we put in longer term power solutions, but those longer term power solutions, while they might have a few per cent increase at Prominent Hill, they will actually enable us to look at more expansion optionalit­y for Carrapatee­na and Prominent Hill over the longer term.”

Growth options

Beyond Carrapatee­na, OZ Minerals was about to kick off a pre-feasibilit­y study at the West Musgrave JV in WA.

In August 2016, the company signed an agreement with Cassini Resources to earn up to 70 per cent of the copper-nickel project.

On 14 November, OZ Minerals announced it would begin a pre-feasibilit­y study at the project following positive results from a scoping study of the Nebo-Babel deposit.

OZ Minerals would also proceed to the next stage of its earn-in agreement and earn a 51 per cent stake in the project by spending $19 million within 18 months.

“The Further Scoping Study has confirmed the economic viability of the Nebo-Babel project and has increased our confidence in the potential of the project,” Mr Cole said.

“This is an exciting new mineral province with attractive near mine and district opportunit­ies.

“Investment will be made during the prefeasibi­lity to focus on Inferred to Indicated Resource conversion for inclusion into the mining inventory thereby extending mine life within the current pre-production capital profile.”

The project has an initial eight year mining life, with a clear view to increase this to beyond 15 years.

“In five years’ time, if all of the works go well, West Musgrave will be at the tail end of constructi­on,” he said.

Moving forward, Mr Cole said the company would also look at growing Carrapatee­na once it had entered production.

“The Carapateen­a developmen­t right now is focused on just over 80 million tonnes of mining inventory; the total footprint of the mineralise­d ore body there is 800 million tonnes, so there’s opportunit­y to grow Carrapatee­na in time,” he said.

“There’s also other mineralisa­tion in the area, namely Fremantle Doctor and Khamsin, which we will study and drill over the coming couple of years to understand what our future optionalit­y of Carapateen­a is.

“We’ve got another number of projects in the pipeline which we’re working on now and we’ll keep adding to that pipeline so we can create real value by taking resources and converting them into operating mines.”

 ??  ?? All images: OZ Minerals.
All images: OZ Minerals.
 ??  ??
 ??  ??

Newspapers in English

Newspapers from Australia