Mining in the Goldfields: Full of life

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 07 Mar 2017   Posted by admin


Kalgoorlie Super Pit. Image: KCGM.

 

By Elizabeth Fabri

 

THERE is no region in Australia quite like the Goldfields. Defined by its rich history and social fabric, the province has become synonymous with gold and nickel mining, with new projects still opening each year to exploit the wealth of resources that lie beneath the surface.

The late nineteenth century gold rush of the WA Goldfields is a tale that has been passed on from generation to generation, from the discovery of gold in 1892, to the 530km pipeline C.Y. O’Connor engineered in 1903 to supply water to the region.

The historic region has stood the test of time and continues to be the beating heart of WA mining.

“There’s no doubt that Kalgoorlie is really in the centre of the other major mining mineral provinces in Western Australia,” Kalgoorlie Chamber of Commerce chief executive Hugh Gallagher said.

“You’ve got the Pilbara in the North, and you got the Goldfields east of Perth; it’s been that way since 1893 and it’s probably one of the few mining communities that continue to exist really.”

The Goldfields-Esperance region itself is the largest in WA, covering some 771,276sqkm; just under a third of the State’s total land mass.

Made up of nine local government areas, mining accounted for 56.6 per cent of the more than$9.3 billion 2014/15 economic output for all industries in the region.

“The contribution of the mining industry to the Goldfields-Esperance region eclipses that of all other industries,” a Goldfields-Esperance Development Commission (GEDC) spokesperson said.

“Mining accounts for around half of the region’s economic output.

“It is also a significant contributor to employment with over a quarter of the population working in the sector.”

And unlike other mining hubs across Australia, a large percentage of the Goldfields mining workforce resided in the area.

“The mining workforce was estimated overall at 7958,”the GEDC spokesperson said.

“Around 60 per cent of the FIFO workers to the GE region were in the mining sector (3375 jobs).”

 

A brief history

The WA Goldfields origins date back to September 1892, when prospectors Arthur Bayley and William Ford first discovered gold in Coolgardie.

In June 1893, the find was bolstered by a second discovery to the east in Kalgoorlie by Patrick “Paddy” Hannan, Tom Flanagan and Dan Shea.

The discovery spurred a massive increase in population to the Goldfields-Esperance region, attracting prospectors from across Australia and all over the world.

“This led to the tripling of the population in Western Australia between 1891 and 1901 fuelled by migration to the Goldfields region,” GEDC stated in its Regional Investment BLUEPRINT A Plan for 2050 report.

“Many prominent characters were lured to the Goldfields in search of their fortunes, perhaps none more famous than the 31st President of the United States, Herbert Hoover.

“In 1897 he was invited to undertake mine management and exploration work in the Goldfields, and by the time Hoover left Western Australia in late 1898, he was one of the best-known mining engineers in the colony.

In 1903, C.Y. O’Connor engineered the Goldfields pipeline to provide the region with a constant supply of water.

This created the basis for industrial-size irrigation and prompted larger mining, agricultural and social infrastructure developments.

“O’Connor achieved what many believed was impossible – to pump water from the Mundaring Weir, east of Perth, to the towns of the Goldfields over 600km away,” the report stated.

“When the Goldfields Water Pipeline was completed in 1903 it was the longest such pipeline in the world and a significant step in advancing the growth of Western Australia.”

While gold dominated the first half of the 20th century, in the 1960s and 1970s nickel was uncovered at Leinster and Mount Windarra, near Laverton in the Northern Goldfields, as well as Kambalda in the Goldfields.

The discovery led to even further expansion of the mining industry, and cemented the region’s reputation for its mineral wealth.

 

Tropicana processing plant capacity was now upgraded from 5.8Mtpa to 7.5mtpa. Image: Independence Group.

 

Top performers

In recent years the Goldfields has expanded its portfolio beyond gold and nickel, with a number of iron ore, copper, zinc, silver, and lithium projects and exploration initiatives across the region.

 “When I first came here 30 years ago it was simply about gold and nickel here, there was no iron ore,” Mr Gallagher said.

“People who had been here a long time would say it’s a world-class mineral province, well they’re proving to be right if you look at all the minerals that are being mined out of the region.

“Usually in most mining related locations if there is drilling happening it means you’re in pretty good health.”

Of the local governments and shires, Coolgardie had the highest value of minerals in 2015-16, followed by Kalgoorlie-Boulder, Leonora, and Laverton.

 

 

Gold 

While a large number of commodities were now mined in the region, the region’s namesake gold remained in top spot, with its value reaching about $6.6 billion? in 2015-16.

“Following the drop in the price of gold in 2013, Goldfields producers have worked hard to cut costs and have also benefited from the price structure,” the GEDC spokesperson said.

“While the $US price of gold has dropped the average Australian price of gold has remained strong with the average price of gold reaching $1731 in June 2016.”

Top performing gold mines for the 2015-16 year included KCGM’s Kalgoorlie Super Pit, AngloGold Ashanti’s Tropicana mine, Gold Field’s St Ives mine, Regis Resources’ Duketon operation, Gold Field’s Granny Smith mine, and AngloGold Ashanti’s Sunrise Dam mine.

Throughout the region, there has been quite a few gold operations that haven’t been operating for a few years that are being re-established,” Mr Gallagher said.

“We can’t say the same thing for nickel; nickel has been in a pretty sad state now four or five years.”


Nickel

Despite the downward pressure on nickel prices, exploration expenditure in nickel was expected to continue in the region, with Kambalda arguably containing more nickel than any other part of Australia.

“The Goldfields-Esperance region has an abundance of nickel reserves across a number of local government areas,” the GEDC spokesperson said.

“Metals X’s Nickel Division centred on the Wingellina Project in the Shire of Ngaanyatjarraku, is part of the larger regional Central Musgrave Project and is one of the largest undeveloped nickeliferous ‘pure oxide’ limonite accumulations in the world.

“This project has significant potential with a minimum 40-year mine life at an average annual production rate of 40,000 tonnes of nickel and 3000 tonnes of cobalt.”

BHP Billiton planned to extend the life of its Nickel West operations to at least 2032, and the Kalgoorlie smelter to 2040.

Independence Group has also recently opened the world-class Nova project within the Fraser range, 120km east of Norseman; a significant nickel, copper and cobalt resource with an estimated 10 to 12-year mine life.

 “And then you’ve also got Leinster which is north of Kalgoorlie, which was originally a WMC company time, which became BHP of course,” Mr Gallagher said.

“It’s been re-established, and repopulated, and the school up there is full; things are beginning to change again in that part of the region.

“Murrin Murrin has also stood the test of time as a laterite nickel project, which is something that can’t be said for a lot of laterite operations.”

However, Mr Gallagher said nickel had never run in tandem with gold in the region.

“At the moment its gold, and whether that trend will continue, I daresay time will tell,” he said.

 

Future developments

In a region as vast and prosperous as the Goldfields, there were always new projects in the pipeline.

Exploration projects currently underway included Northern Star Resource’s aggressive program which had increased its gold reserves by 33 per cent, as well as  Silver Lake Resources’ high-grade gold find from a $1.4 million drilling program that could sustain underground operations at its Maxwells mine.

AngloGold Ashanti continued its extensive exploration campaign around Tropicana mine, and Gold Road Resources was also exploring the Yamarna Belt east of Laverton.

On the lithium front, there were a number of mines recently completed or under construction that added new opportunities.

Galaxy Resources Mt Cattlin spodumene project, near Ravensthorpe, began its first shipment in January and was currently ramping up towards its production goal of 160,000t in 2017.

Tellus Holding’s kaolin Sandy Ridge Project also brought another dimension to the diversity of mining and waste management and was currently under Public Environmental Review.

 “North of Kalgoorlie there’s also a proposed phosphate operation – that’s mining phosphate out of the multitude of salt lakes that there are in the northern part of the region to make fertiliser for Australia, not necessarily for export,” Mr Gallagher said.

Uranium exploration had also increased following the lifting of the ban in 2008 by the State Government.

“With global demand currently low uranium companies are pursuing community engagement and development activities to be ready for a change in the market price,” GEDC stated.

“As examples of local uranium resources Mulga Rock to the east of Kalgoorlie-Boulder is expected to produce 1360 tonnes per annum of uranium oxide for 17 years and the Wiluna uranium deposits – Lake Way and Centipede are estimated to contain 11,000 tonnes of uranium.”

One of the biggest concerns facing the region however was the closure of Kalgoorlie’s iconic KCGM super pit.

Current mining will finish in 2025, but pending approvals for the Morrison and Brown Hill deposits could see mine life extend to 2035.

“The super pit as we know it is getting towards the end of its life; its been going since 1893,” Mr Gallagher said.

“The super pit is almost like the Bambi of mining; you never want to do anything to hurt it.

“It’s excellent for tourists and many Australian and overseas investors have invested in Kalgoorlie because of the super pit’s high profile and so many are of the view that it will go forever, but that’s not mining.

“They do have a finite life, and indications are the longer term future of it will be underground mining.”

GEDC said exploration was integral to the continuation of mining in the region.

“Exploration and mining support service companies in the Goldfields-Esperance region employ over 1866 persons and produce an output of around $632.956 million p.a. with regional exports around $305.799 p.a,” the spokesperson stated.

 

Nova project. Image: Independence Group.

 

Regional growth

Based on existing and prospective projects, as well as the stable flow of investment, the Goldfields future looked bright.

“Mining has been the lifeblood of this place for 120 years and they just keep finding different types of minerals so I think it’s still going to be the major economic driver for years to come,” Mr Gallagher said.

“I appreciate the fact that gold can ebb and flow but usually when gold slows down nickel comes good.”

He said the growth of the region however was not without its challenges.

“Kalgoorlie’s on the end of Australia’s SWIS system (South West Integrated System), and that’s providing some challenges going forward for some of the investment that is proposed for the region but I think we live in quite a different world to what our forefathers did.

“You’ve now got renewables happening in isolation at some of the major mine sites around the region and you’ve got the natural gas which you can put spur lines into.”

Mr Gallagher said the other issue facing the sector was limited skilled personal that lived in the region fly-in, fly-out a readily accessible option for workers.

“I am confident gradually those who want to work in the industry will consider moving to where the work is as there are so many well paid exciting opportunities still in the industry,” he said.