MAJOR COMMODITIES SNAPSHOT p4FEBRUARY 2018PP100007123AUSTLIANTHEMINING REVIEWA product ofPublications & Exhibitions Australia Pty LtdIncorporatingE RTHE AUSTLIANA TOWN DIVERSIFIEDMINING IN COBAR p22ALEX STANOJEVICMESCA THE INTERVIEW p78COMMODITIES FOCUS: MINERAL SANDSNEWS p21australianminingreview.com.auAdvances in drone technology have led to a massive uptake in the mining industry, with LiDAR mapping systems and automation leading the way.Image: UNSW. ROBOTS IN FLIGHTKAEFER, your partner for mining solutionsWith technology and innovation the core of our business, our LEAN delivered, vertically integrated services, solutions and products are tailor-made for the mining industry. With our global experience and expertise recognised throughout Australia, KAEFER is optimally equipped to meet the demands – across all aspects of new construction or maintenance.www.kaefer.com.auFind us on Page 3 FEATURE p52THE AUSTLIAN MINING REVIEW2FEBRUARY 2018CONTENTSPUBLISHED BYABN 28 112 572 433GENERAL MANAGERBrad Francisbrad@miningoilgas.com.auMANAGING EDITORReuben Adamsreuben@miningoilgas.com.auJOURNALISTSCameron Drummondcam@miningoilgas.com.auElizabeth Fabrielizabeth@miningoilgas.com.auGRAPHIC DESIGNERCharlotte Lufinocharlotte@miningoilgas.com.auSALES EXECUTIVESBeej Francis, John Carter, Penny West PRINTERRural Press CONTACT US P: (08) 6314 0300F: (08) 9481 7322160 Beaufort Street, Perth, WA 6000. PO Box 8023, Perth BC, WA 6849. E-mail the editor at editorial@miningoilgas.com.auFor all other emails to staff, the standard convention is, first name (only) @miningoilgas.com.auThe Australian Mining Review is a free publication to all mine sites and mining companies in Australia. 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NEWS 1Technology & Innovation 12International 19Explorers on the Move 20Commodity Focus: Mineral Sands 21The Contractors 10Commodities Snapshot 4A product ofPublications & Exhibitions Australia Pty Ltdfeature p75PRECIOUSRESOURCEWATER IN MININGWhat stories matter to you?reuben@miningoilgas.com.aufeature p19INSIDE JOBANGLOGOLD ASHANTIfeature p32SPECIAL FEATURESPilbara Minerals 29Western Areas 31BHP Iron Ore 26Mining in Cobar 22Gruyere Gold Project 39AngloGold Ashanti 32Drones: Transforming the Mine 52Water in Mining 75Chemical Specialists 45INDUSTRY SPOTLIGHTCompanies Gearing Up 40Abrasive Blasting 43Civil Engineering 46Conference & Function Venues 48Conveying, Belting & Screening 49Industrial Tyres 61Mine Lighting 65Mine Shutdown & Maintenance 66Vehicle & Machinery Washdown 71Vending Machines 72Communication Systems 47Corporate Travel 50feature p19feature p31ALEX STANOJEVICMESCA — the interview p78MAKING THE GRADEWESTERN AREASWith technology and innovation the core of our business, our LEAN delivered, vertically integrated services, solutions and products are tailor-made for mining solutions. With our global experience and expertise recognised throughout Australia, KAEFER is optimally equipped to meet the demands – across all aspects of new construction or maintenance. Core Services: >Surface Protection >Access Management >Insulation & Cladding >Mechanical & Maintenance ServicesKAEFER, your partner for mining solutionsInside and out - all over the world. That’s KAEFER.More than good ideas . . .4/156 Kewdale Road, Kewdale WA 6105 | Phone: +61 8 9224 4600 | info@kaefer.com.au | www.kaefer.com.auTHE AUSTLIAN MINING REVIEW4JANUARY 2018NEWS: COMMODITIESMAJOR COMMODITIESSNAPSHOTCOMMODITY FOCUS MINERAL SANDS PG 211285.8 1249.8 1200 1220 1240 1260 1280 1300 1320 1340 1360 NovemberDecember25-Jan 11989.89 10794.93 0 2000 4000 6000 8000 10000 12000 14000 16000 NovemberDecember25-Jan 6825.09 5547.33 0 1000 2000 3000 4000 5000 6000 7000 8000 NovemberDecember25-Jan 2100.57 1994.08 1850 1900 1950 2000 2050 2100 2150 2200 2250 2300 NovemberDecember25-Jan 2463.8 2505.99 2350 2400 2450 2500 2550 2600 2650 NovemberDecember25-Jan 3235.61 3110.94 2900 3000 3100 3200 3300 3400 3500 3600 NovemberDecember25-Jan 62022.73 70000.08 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 NovemberDecember25-Jan 62.06 67.41 54 56 58 60 62 64 66 68 70 72 74 76 NovemberDecember25-Jan GOLD$US/ozIRON ORE$US/t62% Fe CFR ChinaCOPPER$US/tCOBALTLME Price$US/tLME PriceALUMINIUM$US/tZINCLME Price$US/tLME PriceLEAD$US/tNICKELLME Price$US/tLME PriceThe US dollar hit a three year low in late January, helping gold reach 18-month highs of $US1365.Iron ore has been on a tear since October lows of $US57.10, however fresh drops at the end of January could be perceived as a pull-back, or perhaps the start of a deeper downtrend.Copper has surged impressively since bottoming out in the beginning of 2016. By late January it had steadied, with analysts predicting waning Chinese demand would dampen prices.Cobalt’s stellar run has continued into 2018, as projected demand for lithium-ion batteries improves. Aluminium prices have remained relatively steady in the past few months, and Chinese supply reforms may spell the capping of future price growth.Zinc prices have surged to their highest level since 2007 as demand for zinc-using steel continues to trend up.Lead has increased more than 23% in the last 12 months and is tipped to have a bright 2018, according to analysts.Nickel has come off two-year highs as investors booked profits, however it is tipped to continue its bull run on the back of an improving demand and supply outlook.1348.13 7111.892237.472621.0874.480000.023481.9813694.9THE AUSTLIAN MINING REVIEW6FEBRUARY 2018NEWSTHE WA mining sector is leading the charge in the merger market on the back of increased foreign interest in a range of commodities.According to Mergemarket’s 2017 Australia M&A report, Energy, Mining and Utilities (EMU) has taken over Transportation as the most targeted merger and acquisitions (M&A) sector, with 77 deals worth a total $37.1 billion made during 2017– a 56.7 per cent increase on 2016 figures.Australia, and in particular WA, is poised for further increases in 2018 for deals in the tech metals sector, as the Federal and State Governments open doors to capitalise on growing global demand. Electric vehicles, stricter environmental emissions legislation, and household-use solar power batteries are driving demand for commodities such as lithium, cobalt, boron, vanadium, copper, and nickel.Mergemarket said WA in particular would again expected to be the engine room of such mining deals, as well as initial public offerings (IPO).Improvements in processes at Australia’s Foreign Investment Review Board (FIRB), will allow for more strategic acquisitions from foreign companies, particularly from countries such as China.That trend is already being witnessed, with a 141.5 per cent increase in Australia’s inbound M&A value ($80.5bn) compared to 2016, and a 27 per cent decrease in outbound M&A value ($24.7bn) compared to 2016.The total value of Australia’s M&A in 2017 was $113bn.A consortium led by Cheung Kong Property to acquire Duet Group was the top deal for the EMU sector with a value of $13.1bn. That deal, along with two other deals in the EMU sector comprised three of the top five deals last year.WA drives M&A uptickCAMERON DRUMMONDWAELIZABETH FABRISOUTH AUSTRALIAIron ore win for WhyallaSANJEEV Gupta’s SIMEC Mining has received approval for two new iron ore mines that will feed the Whyalla steelworks and boost exports from the region.This follows a strong year of purchases and commitments from Mr Gupta, including the acquisition of the beleaguered Arrium steelworks in 2017.SIMEC Mining, a division of GFG Alliance, secured approval in January to develop the Iron Sultan lease, which will provide 600,000 tonnes of ‘cheap’ iron ore to the steelworks, and the Iron Warrior mine, capable of exporting up to 1.5 million tonnes of iron ore per annum.“Iron Sultan will play a significant role in reducing the costs of steelmaking at Whyalla steelworks, while Iron Warrior continues South Australia’s role as a reliable iron ore exporter,” South Australian mining minister Tom Koutsantonis said.“Approval of these two mines demonstrates the commitment of the new owner to develop its South Australian iron ore assets and create a more sustainable steelmaking business.”SIMEC acquired both Middleback Range mining leases as part of GFG Alliance’s acquisition of Arrium in August 2017.The mines, 35km west of Whyalla, are expected to create 56 direct jobs and a further 130 contractor positions. Earlier in the month, GFG Alliance also agreed to purchase Glencore’s high-quality Tahmoor metallurgical coking coal mine in NSW.“The acquisition of the Tahmoor mine is an exciting step forward in our stated strategy to create fully-integrated, end-to-end businesses in Australia, from raw materials and energy right through to high-value finished products ready for market,” Mr Gupta said.“Through this purchase we secure and de-risk an important feed for the Whyalla Steelworks.“This, together with our iron ore mines in South Australia, now makes GFG the only fully-integrated Australian steel producer, whether from iron ore and coking coal to primary steel, or from scrap metal and renewable energy to GREENSTEEL.”Mergers and Acquisitions in Australia’s Energy, Mining and Utilities sector are on the rise.Atlas Iron’s future is looking brighter, having accelerated its debt repayments and exploration programs.“Iron Sultan will play a significant role in reducing the costs of steelmaking at Whyalla steelworks, while Iron Warrior continues South Australia’s role as a reliable iron ore exporter.”Image: GFG Alliance.Image: Mergemarket.CAMERON DRUMMONDWAAtlas irons out debtONCE-BELEAGURED iron ore junior Atlas Iron will pay back a further $20 million of debt on the back of surging iron ore prices. Atlas’ lenders have also agreed to ease loan covenants, including reducing the minimum cash balance requirement at the end of each month from $35m to $15m.Atlas managing director Cliff Lawrenson said the decision to reduce debt was in line with the company’s strategy to re-position the business, and the strong Australian dollar made the timing opportune.“Following this $20m, we will have reduced our debt from more than $180m in June 2016 to less than $85 million – cutting our interest cost by about $8m a year,” he said.“After evaluating other financing alternatives, we concluded that a staged repayment of the term loan is the best option for the company to preserve liquidity while strengthening our balance sheet. “A stronger balance sheet will allow us to face volatility in the iron ore market with increased confidence.“The decision reflects our commitment to re-position the business by reducing debt, growing our existing iron ore business through Utah Point and diversification beyond iron ore.”Atlas recently returned encouraging results from first pass field reconnaissance at its Pancho lithium project.“Analytical results from surface rock chip sampling show several of the targets have geochemistry that confirms they are lithium-caesium-tantalum style pegmatites that have the potential to host lithium enrichment,” the company stated.“Compilation of these results along with other information gathered in the field has enabled Atlas to define a specific zone of focus for the next stage of exploration work.”RC drilling at the company’s Copper Range project also provided positive results.“A stronger balance sheet will allow us to face volatility in the iron ore market with increased confidence.”Optimized mill lining design results in up to 40% less wear parts related downtimeThat’s how we make the big difference, the Metso Way.Every grinding mill is unique but they all have one thing in common: the need for optimal operation. Liner changes need to happen quickly and safely. Experience from over 8,000 mills world-wide combined with the market’s widest range of grinding wear parts and services mean we can design and select exactly the right parts for your mill. Coupling this expertise with a Life Cycle Services shutdown and wear parts optimization package you will change wear parts less often, minimize planned downtime and optimize your production. #TheMetsoWayTHE AUSTLIAN MINING REVIEW8FEBRUARY 2018NEWS IN BRIEFRecord December quarter performance at CadiaNEWCREST Mining has increased December quarter gold and copper production by 17.2 per cent and 33.8 per cent respectively on the prior quarter.Group AISC per ounce dropped $69 per ounce to $829/oz compared to the prior quarter, with Cadia achieved a record low AISC of $129/oz for the quarter.Group AISC per ounce margin also increased by 13.1 per cent to $459/oz for the quarter.Chief Executive Officer Sandeep Biswas said Newcrest remained on track for production from continuing operations to be stronger in the second half of FY18, with FY guidance remaining unchanged.GOLDMonty development progressing on scheduleSANDFIRE Resources has reported strong mine production and milling rates for the December quarter, maintaining FY18 guidance at between 63,000 tonnes and 66,000t copper and between 35,000 ounces and 38,000oz of gold.Bulk earthworks and civils were substantially completed at the new Monty development with surface infrastructure progressing on schedule and the Monty decline advanced to 346m at quarter-end – well ahead of the budget of 286m. First ore from Monty is on track to be delivered in Q2 FY19.COPPERTPP breakthrough “unambiguously good news”THE revival of the Trans-Pacific Partnership (TPP) is a major breakthrough for global trade which will deliver significant economic and strategic benefits for Australia, according to Minerals Council interim chief executive David Byers.“Economic modelling has found that even without the US, the TPP would boost Australia’s exports by $US23 billion, or four per cent, and its national income by $US12 billion, or 0.5 per cent, in 2030,” Mr Byers said.“Australia is a trading nation – 2.7 million Australian jobs rely on trade and trade accounts for 40 per cent of our economy – which means that the revival of the TPP is unambiguously good news.”EXPORTSWallarah 2 project green lit THE controversial Wallarah 2 underground coal mine has the tick of approval from the NSW Government to begin development.In mid-January, the NSW Planning Assessment Commission (PAC) declared the Wyong Areas Coal JV project on the Central Coast “in the public interest” and granted consent for it to produce up to 5 million tonnes of run of mine (ROM) thermal coal a year for 25 years, subject to conditions. “The Commission heard and acknowledged strong calls for it to take a precautionary approach given the potential for impacts to the Central Coast’s drinking water supply catchment,” PAC stated.“The issue has been assessed in detail. Impacts were assessed to be small and acceptable, with no net impact on the availability of water for the Central Coast drinking water supply catchment during the life of the mine.“Impacts and potential risks can be appropriately managed through the framework of rigorous controls and requirements in place to manage, mitigate, minimise, compensate and offset those impacts.”The Wallarah 2 mine has been on the drawing board for some time; the first application was lodged in 2006, which was refused in March 2011 by the then Minister for Planning.In late 2012, a new application was lodged and subject to a PAC review in 2014.However a dispute over land access with the Darkinjung LaLC led to the lodgement of an amendment development application in July 2016.PAC said the project, once developed, would create up to 300 operational jobs, 450 construction jobs, and significant investment for the local area and royalties for the State.Wyong Coal general manager Peter Allonby told S&P Global Platts he anticipated construction to start next year, with coal development beginning in 2021, and longwall production in 2022.“The project will now move to the next stage of evaluating the approval details, scoping additional approval and licensing requirements, detailed design work and completing a final feasibility study,” Mr Allonby said.The Australian Coal Alliance said it had commenced a legal challenge against the PAC’s decision to approve the mine. In late January more than 200 people met in Ourimbah to back the Australian Coal Alliance’s campaign to block the project from going ahead. Wallarah 2 said it will hold community consultations on the last Wednesday of every month, beginning in February.ELIZABETH FABRINSWA DISPUTE between Port Kembla Coal Terminal (PKCT) and a worker union came to a head in January when PKCT locked out 60 of its employees without pay for a four day period.The lockout began on 7 January, after Construction Forestry Mining and Energy Union (CFMEU) members took protected industrial action against the company’s push to scrap its current employee enterprise agreement, in favour of a new agreement which removes existing sick leave provisions, and cuts superannuation payments.The terminal had a replacement workforce ready to load ships during the lockout so exports were not overly affected.At its peak the PKCT was loading more than 14 million tonnes of coal a year, but its forecast throughput for 2018 has fallen to just 5.1mt, according to the operator.PKCT, which is owned and operated by coal mining companies South32, Glencore, Peabody Energy, Centennial Coal and Wollongong Coal, has been in negotiations with the union for a new employee agreement since 2015. CFMEU Mining and Energy South-West vice president Bob Timbs said the lockout was an “outrageous move by PKCT” and can only serve to worsen the dispute.“Our members have been trying to negotiate a new enterprise agreement with PKCT and instead of continuing those talks in good faith, the company has decided to lock the workforce out for five days,” Mr Timbs said.“The CFMEU is ready to sit down with PKCT and its shareholders to find a way forward without the need to resort to tactics which will create further disruption to coal loading activities through Port Kembla.“We know the coal companies are behind this move and we are calling on all those involved to step back and reflect on how to resolve this dispute rather than make matters worse.”In early January CFMEU Mining and Energy members established a picket line outside PKCT across a number of days.The members were joined by the Illawarra branches of the Maritime Union of Australia (MUA); CFMEU Building and Construction; Australian Workers Union; Australian Manufacturing Workers’ Union; Transport Workers Union; Rail Tram and Bus Union; and Electrical Trades Union (ETU), with the assistance of the South Coast Labour Council (SCLC).PKCT workers row escalatesELIZABETH FABRINSWMore than 200 people protested at a workers assembly outside PKCT on 11 January. Image: MUA.Next >