AUSTRALIA’s largest uranium oxide producer, Energy Resources of Australia (ERA) is in the midst of a transitional phase as significant as
any seen in the company’s 30-year history.
It comes on the heels of a highly challenging 2010 and 2011, when the company’s processing operations and mining activities were considerably impacted by extreme wet season rainfall in the Northern Territory.
Weather aside, ERA’s Ranger project area near Kakadu National Park remains one of the most prospective uranium provinces in the world. As its Ranger 3 open pit mine nears the end of its life – mining will cease in late 2012 or early 2013 – ERA has committed to moving its operations underground.
In anticipation, the company has initiated an aggressive pipeline of exploration, development and rehabilitation projects designed to maintain its reputation as a market-leading uranium supplier.
ERA has identified three streams as it looks towards a sustainable future. First, it will produce uranium from the many millions of tonnes of stockpiled ore for ongoing revenue; the second stream will involve the continued development of the Ranger 3 Deeps exploration decline as the company searches for its next viable mine through a program of wider exploration on the Ranger tenements; and third, the massive Ranger 3 open pit will be backfilled as part of a more extensive environmental rehabilitation process.
Ranger 3 Deeps
Discovered by ERA in 2008, the Ranger Three Deeps ore body contains an estimated 34 million tonnes of ore at a cut-off grade of 0.15 per
cent uranium for 34,000t of uranium oxide. Adjacent to the Ranger 3 open pit, the undeveloped uranium deposit represents a promising future for the company. The ore body itself is between 200m and 450m deep, and has been tentatively defined as being about 900m long and 400m wide.
In August 2011, the ERA board approved the construction of a $120 million exploration decline to conduct closed space exploration
drilling and explore areas adjacent to the Ranger 3 Deeps resource. The decline will be sunk to a depth of 350m along the hanging wall of one part of the ore body.
An additional $55 million has been allocated for further studies regarding the development of an underground mine. Construction of a box cut started in May 2012 and construction of the decline is expected to begin in October 2012.
ERA general manger Rob Atkinson said the Ranger 3 Deeps project was incredibly important because as the open pit neared exhaustion, the underground mine would provide the company’s best opportunity to produce high-grade uranium during the next few years.
“We believe that [the ore body] is still open in three directions so that resource as we know it can certainly become bigger in the future, which is why we are putting the decline in first to ascertain how much is down there and ascertain the conditions,” he said.
“ERA is a company that has been in the uranium business for many, many years. We want to continue as one of the premier uranium companies in the world, and we are certainly very hopeful that the Ranger 3 Deeps will allow that to occur.”
Macmahon was contracted to construct both the box cut and exploration decline. With about 70 per cent of the former already excavated,
the company will begin foundation work for the portal in the coming months. The box cut will be finished by about October, at which point tunnel construction will begin.
“The box cut is important to get right: not only is it the box cut for the exploration decline but, if it is a viable ore body, then it will be the box cut for the production portal,” Mr Atkinson said.
ERA has already highlighted a number of areas where it is unable to conduct surface drilling due to the ore body’s proximity to Magellan Creek and the highwall of the pit.
Once underground drilling begins, ERA’s next step will be to transform the resources to reserves.“I expect by the end of the year we will have tunnelled 150 metres underground,” he said.
In light of the impact that rainfall has had on its open pit operations, Mr Atkinson said the proposed development of an underground mine at Ranger 3 Deeps would be very important for the future of the company. While ERA had successfully managed water through storage, an underground operation would provide the company with year-round production and allow it to target ore instead of having to remove
huge amounts of waste.
“I think that it lends itself to the type of mining that we need to do in the future, and I think that our future is going to be underground,” Mr Atkinson said.
“I cannot see a situation at all where there will be another open cut operation at the Ranger mine,” he said.
Rehabilitation and environmental initiatives
As its Ranger tenements are surrounded by, yet separate from, Kakadu National Park, ERA has been required to adhere to strict environmental regulations and reporting procedures. Its environmental performance will continue play a major part in the company’s long-term success as ERA looks to exceed environmental expectations through a number of initiatives.
In August 2011, the company increased its rehabilitation provision from $315 million to $550 million; as of December 2011, this had been further increased to $565 million in order to address additional environmental disturbance from operations during the second half of the year. Mr Atkinson said that the company would focus on three areas of work.
“The first is that we must backfill the pit so that we return it back to the surrounding area, which is Kakadu,” he said.
“That will take a period of time between eight to ten years because we are focussed on doing that very, very well.”
He said the second stream emphasised the continued importance of water management. On completion of a 2011 feasibility study, the ERA board approved the design, construction, and commissioning of a brine concentrator at the Ranger mine in February 2012.
The concentrator would have nominal capacity to treat 1.83 gigalitres of process water each year. Estimated
capital expenditure was expected to be about $220 million, with commissioning expected in the second half of 2013.
“It is going to be critical to ensure that we reduce our water inventory to a point where we can rehabilitate the tailings dams as well as keeping the water in balance for the underground operations,” Mr Atkinson said.
The third stream would involve a rehabilitation project with a wider scope, according to Mr Atkinson.
“Those are the areas that have been utilised in the past, such as land application areas – we will be rehabilitating those, the Jabiluka
pond and a couple of areas where we clearly want to demonstrate to all of our stakeholders that we are going to progressively rehabilitate this site,” he said.
“It’s a huge amount of work that we have to do in the coming years but I believe that it is very much the catalyst to us being entrusted with future production plans.”
To determine potential additional resources, ERA has scheduled a three-year drilling program at an estimated cost of $40 million.
“One of the key things about Ranger is that while we have been mining there for over the 30 years, because of the price of uranium the focus has been on open pit mining, so there has been very little deep exploration drilling done over that time,” Mr Atkinson said.
“After the success we had with the Ranger 3 Deeps we know that we are on some of the most prospective ground anywhere in Australia.”
Mr Atkinson said that while ERA had identified a number of target areas quite some time ago, the price of uranium had made further exploration uneconomical.
“We have an area just north of the Ranger pit which has over 1 per cent uranium but it is at over 300 metres,” he said.
“We have other areas which are 0.4 per cent uranium at 200 metres. So there are a number of areas that we are having a look at to see if they can be something more in the future.”
Importance to the community ERA is proud of its programs targeting Aboriginal employment. In 2011, the company launched an Indigenous Employment Strategy, along with other initiatives including an indigenous mentoring system. ERA also reinvigorated existing programs such as nationally-accredited training and the Mineral Council’s pre-employment program. At the end of 2011, ERA employed 99 indigenous workers; by the end of the first quarter 2012, that number had increased to 109.
Mr Atkinson said a relationship with the Traditional Owners was absolutely critical to the company.
“I think that in this day and age in Australia, if we don’t have a good relationship [with Traditional Owners] then we don’t have a future,” he said.
“The relationship that we have there is very important and it’s something that I do a lot of work on personally. “I think that the relationship
is getting stronger and I think that our futures in many ways are intertwined.”
In the longer term, the company’s education partnership with the Northern Territory Government will support more local students entering the workforce, including those seeking professional and leadership roles.
The company is also finalising a mining agreement with the Gundjeihmi Aboriginal Corporation and the Northern Land Council that will
see increased benefits delivered to Traditional Owners, the establishment of a regional socio-economic trust and the creation of a Relationship Committee to assist in the regular exchange of information.
A viable ERA business has been integral to the local economy. At the end of 2011, ERA’s workforce stood at 582 staff and 48 permanent contractors, making it a major employer in the Northern Territory, particularly in the town of Jabiru. The residential workforce in Jabiru and the multiplier effect of their salaries have been crucial in creating a thriving regional centre.
“While we talk about the importance of the future, the local community depends on the mine,” Mr Atkinson said.
“When I talk about the future, I think it’s an important issue for the whole region and the Territory, which goes way beyond the mine gates.”
By Reuben Adams