WA Mining Prospects Continue to Look Good!

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-By Aleisha Parr

February 23, 2012 marks the start date for entry into Round 5 of the exceedingly successful WA State Government’s Co-funded Exploration Drilling Program. Grant applications for drilling projects to be undertaken in the state within the 2012-2013 financial year will be accepted until 30 March, with over $5 million of co-funding on the table for this round alone. Altogether, nearly $21 million of the State Government’s Exploration Incentive Scheme has been dedicated to the program, aimed at supporting innovative drilling projects in greenfield areas.

Phase 4, the results of which were just recently announced in December, awarded $6 million of funding to fifty-two applicants and three prospectors who were jointly awarded $63,000. Of greatest prominence in the phase’s funding was gold, listed by twenty-seven companies as the main (or one of the main) targets sought. Following gold, copper was noted in eleven projects, with nickel and uranium seeing six and five mentions respectively.

“It is pleasing to see oil and gas projects among the successful applications, with five petroleum projects receiving funding,” said WA Mines and Petroleum Minister, Norman Moore, in a 7 December Statement from the Minister’s Office.

“Round 4 is the first time a grant has been offered for drilling to be undertaken over a calendar year (January-December 2012), and was in response to industry requests to provide better options to accommodate their exploration cycle,” Mr Moore continued, saying also that this type of funding was essential to the state’s continued growth and economic prosperity.

“Western Australia is open for business!” Mr Moore’s enthusiasm was palpable in a recent interview with Australian Resource Focus magazine. “If you want to come here and invest then we can provide security of tenure, we can provide a positive government environment, and we’re very keen to develop the resources industries.”

He explained that State Government has been seeking to improve the approvals processes for resource companies, in hopes of providing more assurances when it comes to carrying out resource development projects throughout WA.

“But on the other hand,” he disclosed, “we do have a problem with the Federal Government in that it wants to have additional taxes on the resources sector. When the first version of the super profits tax came out, Australia’s ratings as a destination for investment plummeted. There has been some improvement over time, but the MRRT [Minerals Resource Rent Tax] and the Carbon Tax are causing some concern amongst a number of companies in Western Australia.”

That being said, as is apparent by the Exploration Drilling Program announcements, WA is certainly not hurting for interest in its resources sector. Furthermore, the state is continuing to see an increase in exploration and activity across the board in all of its many sectors. “All of the mineral sectors that we export are continuing to increase. We grow our industry as the demand – particularly in China – continues to grow and with these projects we will all have a good future.”

Boasting around 207,000 tonnes of triuranium octoxide (U308) associated with thirty unique deposits, Western Australia is poised to take on a leading role in the nation’s expanding uranium production industry.

“We have been working very hard with the uranium sector to assist them in getting the necessary approvals,” says Mr Moore. “At this point in time, no companies have commenced production yet but hopefully in the next year or two we’ll have an operating uranium mine in Western Australia.”

Of the four major projects close to becoming operational in Western Australia – Yeelirrie (BHP Billiton Ltd), Wiluna (Toro Energy Ltd), Lake Maitland (Mega Uranium Ltd) and Kintyre (Cameco Corporation/Mitsubishi) – Mr Moore says that “they’re certainly working their way through the approval system in the hopes that they’ll be exporting in the not too distant future.”

He adds that of the utmost importance in seeing that come to pass is ensuring that such a mine would be “operated under the most stringent health and safety implementations that we can possibly put in place.”

In general, Mr Moore says that energy security has been a strong area of focus for WA, as the state is quite susceptible to any disruptions in its energy supply chain. To help WA become more stable as well as productive, the State Government is currently seeking out ways to increase its diversification of energy sources.

“There is work being undertaken by some companies now in the Midwest looking for unconventional types of gas, and we understand that there’s something like 12 trillion cubic feet of unconventional gas in the southwest of WA which is adjacent to most of the larger consumers of this gas. So, if we can prune up those resources, and exploit them, that should improve our security in due course.”

Iron Ore has long been WA’s “sure thing.” With its steady output and continuously increasing market values, the industry has brought to WA great prosperity with the likes of industry giants like BHP Billiton and Rio Tinto continuing to make extensive capital investments to significantly increase production.

“At the moment,” cautions Mr Moore, “there is talk of iron ore prices coming down off of what were fundamentally historical highs. It’s very dependent on Chinese demand and any reduction in the growth in China will reflect in the prices paid for iron ore. So long as the Chinese government continues to look at growth rates of eight or nine per cent, though, then the demand for steel is going to continue to grow and that means the demand for iron ore continues to grow.”

If the industry has any “little black cloud on the horizon” explains Mr Moore, it would likely be from the possibility of future competition from Africa, which boasts some significant resources and reserves that have not yet been exploited. In order to encourage competition in the marketplace, Chinese companies have been investing in African infrastructure with hopes of eventually forcing down market prices.

“But, you’ve got other companies such as FMG and Atlas and City Pacific Ore coming into the market at the present time, adding additional suppliers, so I think the iron ore sector is in good shape and will remain that way for some time.”

At the same time, WA is also looking to an expansion in its gold exploration, which of course has been significantly supported by the Exploration Drilling Program. With the recent major discovery by AngloGold Ashanti of the Tropicana deposit, about three hundred km northeast of Kalgoorlie, Mr Moore says that the state has been given hope that some of the other largely unexplored parts of WA might also hold significant ore bodies.

With its “Open for Business” sign proudly hung, and its greenfields abuzz with a plethora of well-funded projects, West Australia continues to uphold its place at the forefront of Australian mining and petroleum industries. As the State Government continues to finesse its systems of mining administration and approvals, the prospects do look good.

Strategic Resources

There are 17 classified rare earth elements, many of which have strategic purposes. Rare in name only, these elements are anything but scarce as they are found all over the world. The challenge rare earth elements pose is during extraction, as they exist in low concentrations and are difficult to separate from one another.

September 26, 2017, 7:16 PM AEST