AXE & LML graphite projects get a mention... Momentum grows for...

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    AXE & LML graphite projects get a mention...

    Momentum grows for South Australian mining industry
    • BUSINESS EDITOR CHRISTOPHER RUSSELL
    • THE ADVERTISER
    • AUGUST 22, 2014 9:00PM
    BIG risk, big reward is a motto which has driven the mining industry for centuries. It applies in South Australia today but key aspects are changing.

    On the risk side, smart science and public policy initiatives to make the dollar go further are opening up the state like never before.

    On the reward side, it’s not only the companies and their shareholders reaping the benefits. The mining industry has returned to the central role in the state’s economy it held in the early days of the colony when SA was the biggest producer of copper in the British Empire.

    And the industry is determined to make itself even more important
    .
    “We’ve got a swag of minerals in this state that are in good shape,” said Ian Gould, chairman of the SA Minerals and Petroleum Expert Group.

    “There are the really big ones – Olympic Dam and its relatives – (and) they will be a transformation.
    “People have been far too quick to write that off as something that’s not going to happen. It will happen, it’s only a matter of when.”

    Olympic Dam returned to the spotlight this week when owner BHP Billiton said it will split the company in two.
    BHP will be slimmed back to only its best assets in iron, copper, coal, petroleum and, later, potash. The rest will be packaged up and floated as a separate new company.

    The core BHP will include Olympic Dam, which BHP Billiton chief executive Andrew Mackenzie singled out as “one of the best copper and uranium deposits in the world”.

    Exploration drilling has yet to find the bottom of the ore body and BHP now believes it is so big it could be mined for 200 years.

    While Olympic Dam is in a class of its own, there were other major announcements from SA miners this week.
    Arrium’s 2013-14 financial results showed its $200 million redevelopment of Whyalla’s port was a shrewd move.
    It has become SA’s second-biggest mineral exporter, selling $1.6 billion of iron at a pre-tax profit of $686 million.
    The redevelopment revitalised the town of Whyalla but Arrium isn’t done yet. It has gone back to the Middleback Ranges to build more mines.

    “Arrium took a big risk in the port but it’s paying off in spades for the people of Upper Spencer Gulf and ultimately the Eyre Peninsula,” Mineral Resources and Energy Minister Tom Koutsantonis said.

    Meanwhile, OZ Minerals published an $18 million study which found its Carrapateena project, north of Port Augusta, could be a commercially viable copper mine.

    It could generate at least $8.5 billion profit over 24 years, starting in 2022.

    SA Chamber of Mines and Energy chief executive Jason Kuchel said mining’s future was bright despite small companies struggling to raise funds at the moment and SA having crucial gaps in infrastructure.
    “The resources industry now is producing close to 40 per cent of SA’s exports – and that’s at a time when the exports from agriculture have also been very good,” he said.

    “We also should remember that Olympic Dam and oil and gas operations in Moomba and the Cooper Basin are each putting about $500 million a year into the state economy.”

    Mr Kuchel said mining was an important partner to agriculture. It offered a supplementary income for many farming families and regional communities and created an alternative during drought.

    SA was following the well-established pattern of mutual support in the WA wheatbelt.

    “Those who think farming and mining can’t co-exist should look at the evidence which shows that not only can they co-exist but in many cases it’s crucial to the future of agriculture,” he said.

    Mining also helped the state’s manufacturing, civil construction and other provider industries by ordering goods and services.

    The employment effect can be seen in a project such as the Jacinth-Ambrosia mineral sands mine in the remote Far West of the state where jobs are hard to find.

    Mine owner Iluka and sub-contractors employ about 160 people on site and in Ceduna, with 20 per cent of those from local indigenous communities.

    Adding Adelaide office jobs, plus supplier companies takes the number above 500 people – whose earning power in turn supports more than 300 through their consumption.

    However, it’s not an easy game. Low prices forced the recent shut-downs of uranium mines Honeymoon and Beverley and of the Angas zinc mine in Strathalbyn.

    Nonetheless, more projects are on the way.

    Rex Minerals has been offered a lease for a copper mine near Ardrossan.

    On Eyre Peninsula, Iron Road, Centrex and Iron Clad are pushing ahead while silver, graphite and uranium deposits are advancing under Investigator, Archer and Lincoln.

    In the Braemar region near the NSW border, vast iron discoveries have been made.

    Mr Koutsantonis said it was useful to look at the cumulative effect of minerals as well as the petroleum sector in the Cooper Basin and offshore in the Great Australian Bight.

    “What’s happening around SA is that over the next decade you’re going to see a transformation,” he said.
    “It’s not going to be one big bang – which unfortunately is what a lot of SA commentators are looking for. The reality is there are going to be a lot of really large, significant mines and petroleum plays that are going to transform the state.”
    He urged people to remember WA’s resources industry had been built up over more than 50 years.
    “It’s a long process,” he said.

    Explorers in SA have faced tough challenges. Not only are most prospective areas in remote, inhospitable territory but the minerals are buried deep under featureless plains.

    More sophisticated magnetic, gravity and other survey techniques now help identify the needles in the haystacks.
    The State Government’s subsidy program PACE (Plan for Accelerating Exploration) has boosted results. In the past 10 years, $50 million of taxpayer support has generated $700 million in private sector spending, according to Economics Consulting Services.

    SA has been part of a worldwide fall in exploration but this is likely to ease because of agreement allowing access to the Woomera Prohibited Area and further initiatives under the PACE banner, including a drilling program using equipment designed in SA by the Deep Exploration Technologies centre.

    “There’s plenty of potential for more discoveries,” Dr Gould said. “We’re going to find more.”

    http://www.adelaidenow.com.au/busin...-mining-industry/story-fni6uma6-1227033473867
 
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