Grange Resources’ historic Savage River magnetite mine. Image: Tasmanian Minerals and Energy Council.




LEFT behind during the mining boom while other State’s prospered, Tasmania is on its way back with a string of mine reopenings signalling renewed confidence for the sector.


After battling tough, the Tasmanian mining sector is making a return.

Unlike its mainland counterparts, Tasmania was hurt by a resources boom side-effect; the strong Australian dollar.

With an economy heavily reliant on trade exposed industries, Tasmania felt the sting when the Australian dollar surpassed the US dollar in 2010/2011, and then when commodity prices tumbled.

“The high Australian dollar (we all remember when it hit $1.10 U.S) was a drag on all export-exposed industries,” Tasmanian Resources minister Guy Barnett told The Australian Mining Review.

But times were now looking up for Tasmania as rising international commodity prices improve business conditions for miners and other exporters, Mr Barnett said.

“That is reflected in improved profitability, which is highlighted by the sharp rise in royalty collections,” he said.

In 2016-17, the State Government collected a $39.4 million in mining royalties compared to $15 million in 2015-16.

The reopening of the Henty gold mine in late 2016, the granting of a mining lease to Stellar Resources for its Heemskirk tin project, and the sale of MMG’s shuttered Avebury nickel mine to Dundas Mining in July were also encouraging signs, as was the imminent resumption of production at Copper Mines Tasmania’s Mount Lyell mine.

However, the State’s active environment conservation community has delayed and blocked many mining proposals across its history, and continues to put pressure on new projects from entering the planning pipeline.

In June, introduced legislation to reduce environmental ‘red tape’ which requires applicants for mining leases to provide environmental information, to reduce “unnecessary duplication”.

Successful leases would still need to obtain environmental approvals from the Environmental Protection Authority (EPA).


“This is one of a raft of changes we have developed over the past 12 months through consultation with key industry stakeholders, including the Tasmanian Minerals and Energy Council,” he said at the time.


“We make no apology for backing mining by supporting new investment and new jobs – our number one priority.”

All in all, Mr Barnett said he was pleased with how Tasmania’s economy was performing.

“Mining and minerals processing account for more than 50 percent of Tasmania’s export earnings, injecting more than $2 billion into the Tasmanian economy,” he said.

“The mining industry supports more than 2000 jobs in the State, with the majority of these located in rural and regional areas, so it is a very important part of the economy.”

According to the Commonwealth Bank’s State of the States July report, Tasmania now ranked third on unemployment with a 5.8 per cent jobless rate, and had the strongest annual employment growth at 3.8 per cent.

“Our population is growing at the fastest rate in years, more than 11,500 new jobs have been created in the past three years, and employment is the highest it has ever been,” Mr Barnett said.

“New capital investment is running strongly and we have every reason for confidence that growth will continue.”


First gold pour at the reopened Henty gold mine in Tasmania. Image: PYBAR


Mine restarts



The first of the sequence of mine reopenings in Tasmania was Henty gold mine in August 2016.

The Queenstown mine was placed in care and maintenance in 2015 by the former owner Unity Mining.

The closure resulted in 150 job losses was and a huge blow for the State.

But last year hope resurfaced when PYBAR subsidiary Diversified Minerals purchased the project. In January, Henty poured its first gold since returning to production with employment numbers expected to increase as the mine continues to ramp up.


Mount Lyell

Copper Mines of Tasmania’s (CMT) shuttered Mount Lyell copper mine was also returning to production.

The mine has been in care and maintenance since 2014, after it made headlines following three fatal accidents.

Since then, the company has spent $100 million maintaining the mine, and a further million on a feasibility study investigating mine modernisation.

While a start date has not yet been confirmed, in April, the Tasmanian Government announced a $9.5 million investment with CMT to undertake a range of projects needed for the restart of mine operations.

The projects included: $1.5 million to reopen the North Lyell Tunnel, a project to help CMT properly manage water flows; $4.5 million for the access decline refurbishment and preparation; $2 million to replace the 100 year-old West Queen water supply pipeline; and $1.5 million towards crushing mill upgrades.

Mr Barnett said a decision to reopen was “still pending” but they remained optimistic.

“A restart of production at Mt Lyell would create up to 300 direct jobs, which would be great for Queenstown and the West Coast region,” he said.

“The company has indicated a decision will be made this year.”



In July, the good news continued when MMG completed the sale of its Avebury nickel mine to Dundas Mining for $25 million.

The Avebury mine, near Zeehan, has been on care and maintenance since 2009, but the upturn in nickel prices this year sparked interest in reopening the project.

According to MMG, Dundas Mining plans to bring the Avebury operation back into production “as soon as possible”, which will deliver further jobs and economic benefits for the State.

When asked when this could be Mr Garnett said he looked forward to a restart of the mine, but the opening date would be a “decision for the company”.



Elementos aims to resume production at the old Cleveland tin, copper and tungsten mine near Savage River in mid-2019, to tie in with the forecast increase in tin prices.

The company plans to develop the mine in three stages: tailings reprocessing, open pit mining, and the redevelopment of the existing underground mine.

Two deposits are accessible from the same underground infrastructure; a large tin and copper deposit and a world class, long life tungsten porphyry deposit.

In September, Elementos announced its diamond drilling programs on site were “progressing well”.





Industry rebound

Acknowledging Tasmanian mining had been through a difficult period, Mr Barnett said the industry was “rebounding strongly”.

“The Government is committed to help maintain this positive momentum by creating the right conditions for investment and growth,” he said.

“Confidence is vital.  Without investment no industry can flourish, so it is tremendous to see renewed confidence in the industry.”

One of its most notable announcements was in February when it approved a mining lease for Stellar Resources subsidiary Columbus Metals’ to develop its Heemskirk tin project.

“The company has indicated its intention to develop an underground mine employing up to 180 people at full production, with a mine life of seven years on the Queen Hill/Severn/Montana deposits,” Mr Barnett said.

“Stellar has advised that exploration drilling is underway and weather-permitting is expected to be completed by mid-2018.”

From a political standpoint, Mr Barnett said he did have some concerns, and aired his views on a campaign launched by the Greens to lock up an additional 10 per cent of the State through an extension of the World Heritage Area.

“Around half of Tasmania is already protected in formal or informal reserves and the Liberal Party will resist any further encroachment on our productive potential,” he said.

“The mining industry needs to heed the warning of what happened to forestry, which lost two out of every three jobs in the industry in the last great conservation land grab.

“Miners need to get informed and get active.”





AS aging operations near the end of their natural lives, economist Saul Eslake spoke with Elizabeth Fabri about the importance of fresh exploration spending for the future of Tasmanian mining.

The mineral deposits discovered in Tasmania more than a century ago, have been either “fully or largely exploited”, leaving the State in a tough position as it looks for new ore-bodies to bring into production, leading economist Saul Eslake has said.

“The sector has been declining for most of the past four decades,” he said.

“Very little has been spent by way of exploration and development expenditure in Tasmania: $466 million over the last 25 years, or 1.25 per cent of the national total excluding petroleum and gas.”

To put this into perspective, in the mid-1970s mining accounted for a healthy 5.5 per cent of Tasmania’s gross state product at a factor cost, compared to a meagre 1.2 per cent in 2015-16.

“Back in the 1970s mining contributed a larger share of Tasmania’s economy than it did to Australia’s as a whole,” Mr Eslake said.

“However that hasn’t been the case since the early 1980s; and today mining represents a smaller share of Tasmania’s economy than of any other jurisdiction except the ACT.”

The sharp decline can be largely attributed to the lack of new projects being brought into production.

“By comparison with the rest of Australian there have been no major new mines brought into, and remaining in, production in Tasmania since then [the 1970s]. [This is] in contrast with the expansion in coal mining in Queensland since the mid-1970s, the massive expansion in iron ore mining in WA over the past decade, as so on,” he said.

“New ventures which have started in Tasmania during this period (including nickel, tin, iron ore and gold) have for the most part come and gone; while some older operations have been scaled back or closed down.

“In that sense Tasmania’s mining industry is a lot like Broken Hill’s – it still exists, but its ‘glory days’ are well behind it.”

Since 2012-13 mining employment has fallen by almost 40 per cent in 2015-16 the Tasmanian Government collected just $15 million in mineral royalties; less than 0.2 per cent of the total collected by all State and Territory Governments, and just 0.3 per cent of total Tasmanian Government revenue.

“The decline in mining industry activity and employment over the last few years largely reflects the cessation of operations at the Mount Lyell copper mine at Queenstown after a serious industrial accident in January 2014, and the closure of some nickel mines that were only ever viable at the very high prices of earlier years,” he said.

“The longer term decline reflects the exhaustion of deposits originally discovered in the latter part of the 19th century, and the high cost of maintaining small-scale mining operations in competition with newer and larger deposits elsewhere in the world.”


While a number of mine reopenings were promising for the sector, greenfields exploration was on the decline, sparking concern from all corners of the industry.

According to the Australian Bureau of Statistics (ABS), mineral exploration expenditure (other than for petroleum) spent in Tasmania has been falling; declining from $19.9 million in 2014-15 to $13.2 million in 2016-17.

In a recent interview with the ABC, University of Tasmania Professor of Geology Ross Large said with exploration expenditure decreasing, Tasmania’s mining industry could end in a decade if action wasn’t taken.

“We need to ask the question in Tasmania. Is this a trend we want to see continue? Because mining will really go out the back door in the next 10 years if this does continue,” Mr Large said.

“We always used to think mining was going on and on, they just keep mining and adding to their reserves and that’s what’s happened at Rosebery [mine in the state’s west].

“But it’s not going to continue, I don’t think, indefinitely.”

Mr Large urged mining companies to focus more on exploration to uncover new deposits.

“They’re taking our resources but they’re not putting money back into serious continuous exploration.

“So I would say the companies have a fault, the Government has a fault because they’re not supporting the industry enough in terms of exploration again.”

Tasmanian  Resources minister Guy Barnett  however, said the Government remained “very confident” about the future for mining in the State.

“Tasmania is one of the most highly mineralised regions in the world, with high grade deposits of a wide range of minerals,” he said.

“While a number of our mining fields have been around for a long time, the Mt Lyell restart project shows there can be considerable potential even on our oldest fields.”

Mr Barnett said the Government would also be pursuing new mines in line with its target of achieving a 50 per cent increase in new mining ventures over five years.

“We are doing so through our Minerals Exploration Investment Attraction Plan and Geoscience initiatives,” he said.

“These initiatives promote mining and exploration in Tasmania on a national and international stage.

“Our $1 million Mining Sector Innovation Program will help develop an increasingly high-tech industry at the cutting edge of innovation and best practice, which is important for the environment and for mine safety.”

Barriers for investment

Perceived risks associated with mining in Tasmania were believed to be the biggest hurdle in luring new investment.

Mr Eslake said there was a view that minerals exploration in Tasmania was much riskier and more expensive than other States given the nature of its rugged topography, wet climate, and dense vegetation.

“There may also be a view that since a relatively large proportion of Tasmania’s land mass now has national park status, and because Tasmania has a well-established and active environmental movement, that it is more difficult for mining companies to obtain a ‘social licence’ to operate in Tasmania than in other states – which in turn acts as an additional disincentive to undertake exploration activities,” he said.

“I’m not sure that perception is accurate (given the bans on ‘fracking’ in most mainland states other than Queensland, WA’s on-and-off bans on uranium mining, and the increasing opposition to coal mining from agricultural interests as well as environmental groups in Queensland and NSW) – but there’s no doubt that the perception exists.”

Mr Eslake said more exploration was vital to the future of Tasmanian mining.

“Mining in Tasmania hasn’t become extinct, as yet, so it would be unfair to call it a ‘dinosaur’ (or even a thylacine), but like the Tasmanian devil, it is in serious long-term decline,” Mr Eslake said.

“It is likely to decline further unless some major new ore-bodies are discovered and brought into production.”