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NEWS
BHP, Oz lead SA rebound
Where moribund at the start of last
year, South Australia’s resources
prospects are suddenly reinvigorated at
the beginning of 2018.
The SA resources industry slump was
perhaps greater than any other in Aus-
tralia following the end of the last min-
ing boom. Having ridden the wave of
the commodity super-cycle to become
the second largest focus for resources
investment in the country, SA was sent
crashing by the ensuing bust in 2012. Ex-
ploration and development expenditure
in the State was choked and as BHP Ltd
walked away from its massive Olympic
Dam expansion plans and Oz Minerals
Ltd continued to struggle to find ways
to makes its large, but remote, Carra-
pateena copper project work, services
companies found future prospects extin-
guished.
More than five years on, the State’s
industry is beginning to witness the first
glimmers of a fresh beginning.
In November, BHP announced it would
press ahead with a revised expansion of
Olympic Dam, BFX, which will eventually
see capacity increased to 330,000 tpa
copper.
“As we move into the Southern Mine
Area we expect to see the copper grade
increase to 3% by FY2023, which we be-
lieve would coincide with a structural def- items for the mill for which engineering
icit in the copper market,” BHP Olympic
Dam asset president Jacqui McGill said.
“If approved, the BFX option could lift
production capacity to 330,000 tpa and
move Olympic Dam into the first quar-
tile of the cost curve, which is where we
strive to be with all our assets at BHP.
Any investment however, must compete
for capital against all other options, in-
cluding returns to shareholders.”
The announcement is a shot-in-the-
arm for SA’s resources sector, handing
service providers incentive to return to
the State. BHP already has 1,600 con-
tractors on site at Olympic Dam as it
undertakes the largest smelter mainte-
nance project in the operation’s history.
Providing further impetus for the sec-
tor is Oz Minerals’ progress at Carrapa-
teena, where construction activity began
last year.
With its 79mt @ 1.8% copper, 0.7 g/t
gold and 8.5 g/t silver reserve, Carra-
pateena is the kind of discovery which
makes SA’s geology so enticing. Howev-
er, its location – 500m below the surface
and 160km from Port Augusta – is also
representative of the logistical challenge
PAGE 14 FEBRUARY 2018 AUSTRALIA’S PAYDIRT
Oz plans to lift underground mining rates at Prominent Hill from 2.5 mtpa to 3.5-4 mtpa
SA miners still face.
Oz chief executive Andrew Cole told
Paydirt Carrapateena’s development
was coming at the right time for the com-
pany, SA and the global copper industry.
“We started pushing Carrapateena a
few years ago because we recognised
there was a dearth of copper supply
looming,” he said. “People are saying
now is a good time to be buying and de-
veloping copper projects but I think the
best time to become involved was a cou-
ple of years ago.”
Oz has been far from rash in its devel-
opment of Carrapateena, redrawing its
vision for the project several times.
The latest, definitive, iteration will see
sub-level caving employed to produce
the requisite amount of ore needed to fill
the 4.25 mtpa processing plant.
Cole said construction, which started
in the September 2017 quarter, was go-
ing well and was on track for commis-
sioning to start in Q4 2019.
“The decline is 3.5km in, the primary
ventilation is in, the camp installation has the design,” Cole said. “Sub-level caving
been started, the airstrip is being built
and we have ordered the long lead time
and design are halfway completed. “
Despite still being more than 18 months
out from commissioning, Oz has chosen
to put its operations team into place now
to ensure consistency throughout con-
struction.
“It is important to get the operating cul- terpreting it to make our people and our
ture right, it is important that you own it
so they have been involved early,” Cole
said. “The people who run it have a
vested interest in the project so getting
involved in design and commissioning –
for the cost of getting each of them on
early – develops a culture of ownership
in the team.”
Cole said the company had also begun
thinking about training programmes as it
aims to realise its local-first employment
strategy.
“We will look to draw employees firstly
from the Upper Spencer Gulf region with
SA as the second priority,” he said. “Part
of our agreement with the Traditional
Owners includes employment and we
need to start thinking about those train-
ing programmes now to ensure people
are ready to work.”
Innovation will also be a key ingredient
to Carrapateena’s success. Oz plans to
have electrification throughout the mine
and its fleet and will pursue the highest
levels of automation in Australian base
metals mining.
“While we are gradually introducing
electrification into our Prominent Hill
mine, at Carrapateena it will be built into
[the mining method to be used at Carra-
pateena] is better than stoping for electri-
fication and automation.”
Cole believes the widespread adop-
tion of new technology and data capture
will bring tremendous benefits to the re-
source industry and is pushing Oz’s op-
erational philosophy to prioritise its use.
“It is about collecting the data and in-