Inside this issue

Mining and Mineral Exploration in the Territory

The Northern Territory was the only Australian jurisdiction to increase its exploration expenditure during the Global Financial Crisis, and strong growth in that sector has continued through 2011. Mineral exploration in the Territory remains at unprecedented levels, with a record $195.3 million in expenditure in 2010–11. Some of that success can be directly attributed to the government’s investment in the Bringing Forward Discovery initiative funding of $25.8 million (over seven years), a program designed to attract new exploration investment and bring forward the next generation of major resource discoveries.

Territory Government representatives also took to the skies. The international promotion of Territory resource opportunities to explorers and investors, particularly in China and Japan, has resulted in the attraction of tens of millions of dollars of funds into exploration and mining.

Much of Australia’s and the Northern Territory’s recent exploration expenditure is brownfields—in and around an existing ore body. Greenfields (new sites) exploration has increased in recent years, with over half of all exploration expenditure concentrated on greenfields sites, a figure well above the national average of 39 per cent. This activity is the result of the industry’s appreciation of the greenfields potential of the Territory where so much prospective landscape has not been tested by modern exploration techniques. In an effort to further stimulate greenfields exploration, the Territory Government introduced a geophysics and drilling collaboration through the Bringing Forward Discovery program.

The variety and volume of minerals found in the Territory is staggering. Bauxite and alumina have been the economic mainstays of Northern Territory mineral production for decades. During 2010–11, Rio Tinto Alcan’s Gove bauxite mine and refinery was responsible for bauxite production worth $339 million and alumina worth $4625 million.

As a result of international gold prices rising above US$1700 per ounce, gold exploration expenditure in the Northern Territory has risen from $15.4 million in 2007–08 to $53.3 million in 2010–11. Exploration has been particularly active in the historically significant goldfields of Pine Creek, Tennant Creek and the Tanami. The value of gold production in the Territory in 2010–11 is $290 million.

Crocodile Gold Australia is mining and producing gold from a number of deposits in the Pine Creek area with underground development of the rich Cosmo Deeps underway. Dominated by Newmont Tanami’s Callie mine, where open-cut mining commenced in 1995, more than 12 per cent of all gold ever mined in the Northern Territory has come from Callie.

In 2011, Newmont announced plans for a $500 million expansion of Callie, including development of a shaft to allow ongoing underground development of newly discovered lodes. Gold mining in the Tanami is expected to expand in 2012 with development of Tanami Gold’s Central Tanami gold project. Recent exploration success by ABM Resources in the Tanami suggests a bright future for gold in the region.

In the Tennant Creek mineral field, which has produced over 5 million ounces of gold, during 2011 Emmerson Resources discovered highly encouraging copper and gold mineralisation near the historic Gecko and Orlando mines. New copper-gold resources are also being defined in the Rover field south-west of Tennant Creek. Westgold Resources has recently defined a resource of gold, copper, bismuth and cobalt at their Rover 1 deposit, and is planning an exploration decline to further test this resource.

The McArthur River Mine, situated about 1000km south of Darwin, is one of the world’s largest zinc, lead and silver mines. It is operated by McArthur River Mining (MRM), a subsidiary of Xstrata, proceeding as an open-cut. The mine is the primary economic force in the Territory’s remote Gulf Region, and a major Indigenous employer. Exploration for further zinc and lead resources, along with other commodities such as copper and manganese, actively continues in the area.

Territory Resources operates an iron ore mine at Frances Creek, 200km south of Darwin, producing around 2 million tonnes of hematite ore per annum. OM Holdings, based in Singapore, operates the Bootu Creek manganese mine near Tennant Creek. Both mines truck their ore to the Adelaide to Darwin Railway where it is transferred to rail cars and hauled to the Port of Darwin for export to the steel mills of China. The completion of the railway in early 2004 made the Frances Creek and Bootu Creek mining operations economically feasible.

Iron ore exploration is also increasing in the Territory, with both Sherwin Iron and Western Desert Resources defining significant new resources of hematite ore in the Roper iron field, 400km southeast of Darwin. Both companies have announced plans to commence production of iron ore from this field within the next two years.

Australia has 13 per cent of the world’s known economic manganese resources. The value of Northern Territory manganese production in 2010–11 was $2.1 billion, eight times the value of gold production in the Territory over the same period. One of the world’s largest high grade manganese operations is on Groote Eylandt in the Gulf of Carpentaria. In 2009, that operation, which is jointly owned by BHP Billiton and Anglo American Corporation, underwent a half billion dollar expansion.

The Northern Territory has a long history of uranium mining, and currently accounts for around 10 per cent of global uranium production. During 2010–11, the value of uranium production at Energy Resources of Australia’s (ERA) Ranger Mine was $415 million, which was lower than previous years due to unusually heavy wet season rainfall. However, Ranger remains one of the world’s largest uranium mines, and the recent discovery of the Ranger 3 Deeps orebody is likely to significantly extend the mine life. Uranium exploration remains strong in the Northern Territory with $41.9 million spent in 2010–11.

The Territory also has an advanced uranium exploration project at Bigryli in central Australia, where Energy Metals has a resource of around 10000 tonnes of uranium oxide. China Uranium Development Company Ltd, a wholly owned subsidiary of major Chinese utility China Guangdong Nuclear Power Holding Company (CGNPC) has recently taken a 69 per cent stake in Energy metals, and is looking to move this deposit towards production.

Copper, diamonds, molybdenum-tungsten, vanadium, phosphate, nickel and rare earths present enormous potential to explorers and miners alike. Arafura Resources’ Nolans rare earth elements- phosphate-uranium ore body is located 135km north-north-west of Alice Springs. This has the potential to be one of the world’s most significant producers of rare earth elements, with Arafura Resources targeting production in 2014. New discoveries elsewhere in the Northern Territory during 2010–11 suggest that the Territory has potential to be a major rare earths producer in the future.

Phosphate is another important emerging commodity for the Territory, with Minemakers Limited investigating development options for Australia’s largest undeveloped phosphate at Wonarah, east of Tennant Creek. A new phosphate discovery made in 2010 by Rum Jungle Resources east of Barrow Creek, named Barrow Creek 1, also has the potential to develop into a major new phosphate resource, only 80km east of the railway.

“The Northern Territory has a long history of uranium mining, and currently accounts for around 10 per cent of global uranium production.”