SA Mines and Energy Journal : October-November 2010
OCTOBER/NOVEMBER 2010 SA MINES & ENERGY JOURNAL 12 FEATURE A recent report by broker Ord Minnett says China consumes five times more copper than it produces and copper consumption in that country doubled between 2001 and 2008. Experts say more large-scale copper discoveries are needed to breach the gap between supply and demand. Australia is in the top handful of copper producers around the world, with the bulk of SA's contribution coming from Olympic Dam, 560km north of Adelaide. The mine took only seven years after it started mining in 1988 to eclipse Moonta-Wallaroo's production record of 340,000 tonnes of copper and a further four years to exceed all prior production in the state. Already the nation's largest underground mine, plans to turn it into an open- cut mine -- which the company hopes to start in 2012 -- will make it the biggest mine in the world. Olympic Dam is the world's fourth biggest copper deposit, the world's fifth biggest gold deposit and the world's biggest uranium deposit. Copper accounts for 70 per cent of mining revenue from the operation. With experts predicting world demand to outstrip copper supply by 770,000 tonnes a year from 2013, it is little wonder that Rex Minerals' recent large-scale copper Hillside discovery on Yorke Peninsula, near where it all started, excited investors. Rex Minerals' licence extends along 60km and more than 1,000 square kilometres of a structural corridor on which eight small, high-grade copper mines operated in the late 19th and early 20th century. Drilling results from one third of the Hillside site had inferred a resource equal to 700,000 tonnes of copper, Rex Minerals' managing director Steven Olsen told the market in July. The project is among the nation's biggest copper mines. "On a world-scale the Hillside Project is in the top quartile of large-scale open-pit copper mines, " Mr Olsen said. "It is just a 2km part of a larger belt which we believe has potential to host a number of large-scale copper deposits, " he said. Rex's drilling campaign over the next few months will focus on proving the ultimate size of the ore body. The Prominent Hill discovery is also helping to satisfy growing world demands. Located in the Gawler Craton, the mine is 130km northwest of Olympic Dam and went into production last year (2009). Owned by OZ Minerals, the company's executive general manager Mick Wilkes said the mine, in its first year, produced 100,000 tonnes of copper. The open-cut project has an initial mine life of 10 years, with annual production estimated for the first four years to be 104,000 tonnes of copper, 115,000 oz gold and 400,000 oz silver. While 20 million tonnes of copper are consumed around the world each year, over the next 10 years demand is expected to increase by 700,000 tonnes a year on average. "This means seven Prominent Hills have to be discovered and developed a year just to satisfy future world demand, " Mr Wilkes said. The potential for underground mining would see Prominent Hill's lifespan extended. "We can expect this mine to be going out to about 2030, " he said. The company's strategy to expand its Prominent Hill operation includes an exploration joint venture on surrounding land. Another SA copper mining concern is Hillgrove Resources' Kanmantoo mine, 60km east of Adelaide in the Adelaide Hills. Derelict since the 1970s, tests have indicated the mine still has the capacity to produce 290,000 tonnes of copper and more than 200,000 ounces of gold. Hillgrove also has exploration permits for two Indonesian regions that are strong copper and gold prospects but has said the Kanmantoo mine remains its focus. The feasibility study for By 1875 Moonta had become the largest copper region in the British Empire BHP Billiton's Olympic Dam operation mines copper, uranium, gold and silver.
December 2010 - January 2011