Copper moving to the beat

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 27 Nov 2012   Posted by admin


As part of the Aditya Birla Group and backed by Indian metals powerhouse Hindalco, Aditya Birla Minerals enjoys a strong position in the Australian copper market.
Established in 2003, Aditya Birla swiftly acquired the Nifty operation in WA and the Mt Gordon operation in Queensland. Since then, the company has turned around the fortunes of these projects, resulting in improved operational efficiency and increased production. This year, both Nifty and Mt Gordon continue to enjoy average month-on-month increases in ore production and operational performance.
As for many miners, the 2011 to 2012 financial year was a combination of high points and challenges for Aditya Birla. Even though the company enjoyed slightly higher average copper prices in US dollar terms than those of the previous year, Australian dollar prices weakened due to strengthening of local currency against the US dollar. Also, while aligned with the mine plan, the decline in mine grades at Nifty affected copper production.
Furthermore, despite Mt Gordon operations being taken out of care and maintenance during 2011, the ramp up fell short of the company’s expectations by the financial year’s end.
Despite all these challenges, Aditya Birla performed well, with overall copper production maintained at the previous year’s level. The company’s consolidated revenue of $497 million was 7 per cent higher than that of the previous year – the company paid an unfranked dividend of 5 cents per share for financial year 2011 to 2012 – and its safety record remained far above the industry standard. Highlights for the financial year included a 28.3 per cent increase to 2.81 million tonnes of ore mined, from 2.19mt in the previous financial year.
Combined copper production at Nifty and Mt Gordon totalled 59,707t in 2011 to 2012, but the company stated it was looking for a substantial increase in copper production during 2012 to 2013 to between 70,000 and 80,000t of copper concentrate, comprising between 50,000 and 55,000t at Nifty and between 20,000 and 25,000t at Mt Gordon.
Nifty
The Nifty operation, boasting a resource of 41mt grading 2.14 per cent copper, is in the Great Sandy Desert region of the East Pilbara about 1250km from Perth and 350km south-east of Port Hedland. It comprises open-pit and underground mines, solvent extraction and electrowinning (SX-EW) processing operations, a concentrator and associated site infrastructure, and a concentrate storage facility at Port Hedland.
Aditya Birla has successfully increased average monthly mine mill productivity from 2008 through to 2012, with a current year average of 201,000t of ore per month: the best achieved in Nifty’s history. While average copper grades have reduced over time, this has been partially offset by ongoing productivity increases. “If you look at production at Nifty over the last four or five years, you will see that we have been improving mill throughput and productivity year after year,” Aditya Birla managing director Sunil Kulwal said.
“In terms of what we mine per month, the average in 2008 was 137,500 tonnes of ore, which we have now increased to the current year (April to July) to 194,000 tonnes.”
The company has reported plans to increase mine output from 2.3 million tonnes per annum to 2.7mtpa. It is also progressing a cost review – due for completion at the beginning of November – to identify cost-saving opportunities across the operation.
Aditya Birla has also advanced mine exploration and development outside the current checker board area.
New Atlas trucks delivered last year have also helped to improve mining efficiency, and all new CAT loaders have been delivered and have started performing as per expectations. “We are working to achieve this 2.7 million tonne per annum mining and milling [output],” Mr Kulwal said.
“In terms of cost optimisation we are looking at each and every cost to identify and examine all cost optimisation opportunities.”
Mt Gordon
The Mt Gordon operation, about 120km north-east of Mt Isa, has the potential to produce 1.2mtpa of ore from its Mammoth underground operation. As of March, it had a mineral resource of 97.20mt grading 1.35 per cent copper at a cut-off grade of 0.5 per cent copper.
The mine produced about 20,000tpa of copper concentrate before it was put on care and maintenance in February 2009 due to the GFC. The mine was reopened in 2011, after which production at Mammoth progressed steadily to reach pre-shutdown levels in July this year.
A scoping study based on a new resource model is being undertaken by external consultants, and has the potential to increase mine life at Mt Gordon. Mill throughput has already reached 180 tonnes per hour and the company is assessing options to improve it further.
“The scoping study is progressing well, and we expect that it will be released by the year’s end or earlier,” Mr Kulwal said.
Exploration
The company embarked on an intensive and highly successful exploration drilling campaign across its projects in the 2011 to 2012 financial year, completing 44,900m from 218 near-mine and regional
holes. At Nifty, 19,679m of surface and underground diamond drilling was completed for resource definition and near-mine exploration.
Bullish 2011 to 2012 exploration also resulted in the discovery and definition of a maiden copper resource at the Greenstone prospect, 500m from Mt Gordon’s Mammoth mine. Mr Kulwal said the Greenstone discovery could improve the economics of Mt Gordon.
“Greenstone will definitely help, but we are looking at the new scoping study to assess production and increase in mine life possibilities at Mt Gordon,” he said.
The company also succeeded in discovering sulphide mineralisation at the Maroochydore deposit, part of theMaroochydore tenement package near Nifty. The sulphide mineralisation was extended 500m along strike and remains open in all directions.
Aditya Birla plans to extend and build upon its 2011 to 2012 successes with drilling programs during 2012 to 2013 in the Nifty, Maroochydore and Mt Gordon tenements.
A further 10,000m of diamond drilling is planned for the 2012 to 2013 financial year to test for near-mine resource extensions at the Nifty mine, focussed on geophysical and structural targets generated from geological studies.
At Mt Gordon, near-mine and underground drilling programs are under way to test for lateral and depth extensions of resources, and new discoveries. Several targets for exploration drilling have also been identified within 50km of Mt Gordon, with a 3350m program of exploration drilling planned to evaluate these during the current year.By July, the company had already drilled 22,986m of a total 34,500m planned for the full financial year.
Wide-ranging low-level, high-resolution aeromagnetic surveys also planned for these project areas in the current financial year are expected to facilitate a pipeline of regional targets for geological, geophysical, geochemical and drilling follow-up. “For the long-term, our key focus is to improve our output at Nifty and Mt Gordon, optimise on costs, and expand resources and reserves in near-mine areas and use them to increase mine life,” Mr Kulwal said.
“Aditya Birla is also keen to look at economically viable copper projects to accomplish inorganic growth.”


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