South Australia remains among the world’s most attractive jurisdictions for mining and mineral exploration investment, according to the Fraser Institute’s influential annual survey.
The latest survey, released on February 23, ranks the state seventh out of 78 mining regions, with Nevada topping the list and WA coming in fourth place.
South Australia ranked eighth on the Best Practices Mineral Potential Index, which rates the jurisdiction based on how much its geology encourages exploration investment.
The survey is a massive vote of confidence in the mining industry, which plays a crucial role in driving economic development, investment, exploration and export opportunities for the state.
In 2018-2019, the production value of mining contributed $6.9b to South Australia’s economic development, $311m in royalties and $4.3b in exports, according to figures from the Department of Energy and Mining (DEM).
A DEM spokesman said under the South Australian Government’s Energy and Mining Strategy, an expanded export goal of $8b by 2024-2025 has been set.
This has been supported by a number of research and development initiatives including the Geological Survey of South Australia (GSSA), the exploration co-funding Accelerated Discovery Initiative (ADI), the Explore SA: Gawler Challenge Phase 2 and the National Drilling Initiative.
All Systems Go
The growth in the price of copper and gold has created a flurry of investment in SA’s mining sector, from exploration to a pipeline of new projects at long-standing mine sites.
BHP’s Olympic Dam, located 560km north of Adelaide, boasts the world’s fourth largest copper resource as well as the largest single deposit of uranium.
Olympic Dam copper production, which accounts for the lion’s share of the mine’s revenue, increased by 16% to 99kt from the previous reporting period.
This reflected improved smelter stability and strong underground mine performance, according to its latest half yearly operational review released in January.
Production guidance for the 2021 financial year remains unchanged at between 180kt and 205kt of copper, while production in 2022 is expected to be lower as a result of major smelter maintenance planned for the first half of the financial year.
BHP plans to begin resource definition drilling by the middle of this year at its Oak Dam West discovery, which is being positioned as a long-term growth opportunity for the Olympic Dam copper mine.
This followed a successful third phase of drilling and the referral of the exploration project to the Minerals Australia Planning and Technical team for assessment.
Oz Minerals has approved and accelerated its $1.75b block cave expansion project at its Carrapateena copper-gold mine, where production was ramped up to 4.25mtpa in 12 months—six months earlier than planned.
The conversion of the lower portion of the current sub-level cave to a series of block caves will increase production to 12mtpa, with an average copper production of about 110-120ktpa, while gold production will be ramped up to between 110-120koz.
The block cave decline early works are now scheduled to begin in Q4 2021, according to the company’s latest ASX quarterly release.
The company is targeting block cave 1 to begin operations by 2026 and block cave 2 by 2038.
Oz Minerals CEO Andrew Cole said the expansion created the potential for a world class, multi-generational mining province, considering its scale, production, mine life, low-cost base and jurisdiction.
Oz Minerals is expected to make a final investment decision on the expansion project at its Prominent Hill mine in central South Australia in mid-2021, and has set aside funds to progress to the next study phase of the project.
‘’Prominent Hill again met its copper production guidance while also meeting its increased gold production targets, reinforcing its position as a low-cost reliable operation,’’ Mr Cole said.
‘’The Prominent Hill expansion study demonstrated the potential to increase underground production and extend mine life by accessing deeper ore with a shaft haulage system.
‘’With sustainable annualised rates above 4mtpa achieved during 2020, future decline development spending was brought forward to increase mining rates further from 2022, to between 4mtpa and 5mtpa.’’
GFG, through its subsidiaries SIMEC Mining, Liberty Steel and SIMEC Energy, is one of the leading resources operators in South Australia.
SIMEC Mining owns and operates a 10mt per annum iron ore mine in the Middleback Ranges in SA, about 60km from the town of Whyalla.
These operations incorporate the Iron Baron, Iron Knob and South Middleback Ranges mine sites, which produce both hematite and magnetite ore.
GFG is planning a $1b-plus upgrade of the Whyalla steelworks, which would phase out the existing blast furnace and replace it with an Electric Arc Furnace and Direct Reduced Iron (DRI) facility to produce low-emission ‘greensteel’ from GFG’s magnetite resources in SA.
A media release by GFG stated this would position Whyalla Steel as a world-leading, carbon-neutral steel producer.
‘’The new DRI plant will be fed by Natural Gas, in time transitioning to green hydrogen produced from GFG’s own renewable energy projects including Cultana – one of Australia’s largest solar farms being built in Whyalla,’’ it stated.
‘’Combined, these new facilities will produce advanced steel long products for the Australian construction, critical infrastructure and mining industries for generations to come.’’
Iluka’s Jacinth Ambrosia operation — the world’s largest zircon mine — produced 95kt of heavy mineral concentrate (HMC) in Q4 2020, up from 77kt in the previous quarter.
‘’Mining occurred at the Jacinth North deposit, with increased throughput rates and ore grades contributing to the higher production,’’ Iluka’s latest quarterly report stated.
The diesel power station at the mine will be converted into a hybrid facility after a deal was struck between Iluka and Pacific Energy last month.
The conversion of the 10MW facility, which is operated by Pacific Energy subsidiary KPS, will involve electric turbo compounding (ETC) technology, which works by recovering waste energy from the exhaust to improve efficiencies and lower CO2 emissions.
Quasar Resources’ Four Mile Uranium Mine in the State’s far north was one of the world’s most substantial uranium discoveries when it opened in 2014 and is still a major player in SA’s mining landscape.
The DEM spokesman said SA has a pipeline of other projects including critical mineral projects for high technology materials use.
These include Renascor Resources’ siviour graphite deposit and Andromeda Metals’ kaolin-halloysite deposits.
In 2018-19 there were 13,200 people directly employed through South Australia’s mining industry and a further estimated 11,575 jobs in the related Mining Equipment Technology Services (METS) sector.
In January, the SA Government gave Port Augusta Operations the green light to transform the former Port Augusta power station site into a new iron ore export port, to be named Port Playford.
A capital investment of more than $100m into the local economy will mark the return of commercial shipping to Port Augusta for the first time in 50 years and create a hub for projects in key South Australian iron ore regions, including North Gawler, Curnamona and Braemar.
The project will create more than 100 jobs during construction as well as 80 permanent positions.
Construction is planned to commence in mid-2021 with the first shipment from the port scheduled for late 2022.