ACI Num 1 2020 by Prime Creative Media

VOLUME 14 NUMBER 1 | 2020

Australian Resources & Investment INDEX GIANTS TAKE AIM AT RESOURCES SECTOR

TRACKING THE TRENDS 2020

THE LITHIUM-CHARGED DECADE HAS BEGUN

GOLD’S ROLE IN THE SUSTAINABLE FUTURE

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AUSTRALIA AND THE FUTURE OF TIN

Ventilation - Large Diameter Shaft Drilling Established in 2004, Australian Shaft Drilling Pty Ltd (ASD) is a Queensland based company specialising in ventilation shaft drilling. ASD use vertical blind boring technology which is recognised as being the safest shaft construction method used in Australia. All operations are conducted from the surface reducing the level of exposure to workers. ASD has operated over 5730 days without an LTI and has a current MTIFR rate of 2.71 per million man hours (Current at December 2019). Blind boring is a highly innovative way of drilling ventilation shafts, especially for coal mines, as the shaft is completed ahead of the underground development. Blind boring can also provide cost effective solutions for mine haulage, mine access, tunnel access and emergency egress. Current drilling capability from 2.2m diameter to 7.3m diameter. ASD is able to operate completely independent of any mining activity and do not require any interface with the underground operation prior to the underground holing into the shaft. During the drilling and lining phases of the project, the shaft is completely filled with drilling fluid. Not only does this provide advantages from a safety perspective, but it also provides positive head pressure on the strata, thereby reducing the possibility of strata collapse. Special mud additives can be mixed into the drilling fluid to manage specific areas of concern to ensure stability of the shaft until the lining is in place. Shaft lining options vary depending on the type of strata, size of shaft, life of shaft and depth of any unconsolidated material. Lining options currently in use include steel, concrete and a combination of steel and concrete.

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CONTENTS

I N T H I S I S SU E

6 6

T H E F E AT H E R S T O N E REPORT

I ndex giants take aim at resources sector, by Tony Featherstone

10 F E AT U R E D

Analysis with Regina Meani

ining and energy companies need to M transition to clean energy

racking the trends 2020: leading from T the front, by Ian Sanders, Deloitte

20 What’s on the horizon for investment in mining exploration?

RESEARCH & INDUSTRY PA R T N E R S H I P S

artnerships for success, P by Nicole Roocke, Minerals Research Institute of Western Australia

26 More yield, less waste

T R A N S P O R T, E Q U I P M E N T & M AC H I N E R Y

28 Haul trucks queuing prediction in

open pit mines, by Ali Soofastaei, Vale; Euler Faria, Vale; and Fernando José Von Zuben, University of Campinas

32 32

MINE DE VELOPMENT

ot-dip galvanizing in the H mining industry

34 Living in a digital world,

by Edson Antonio, Vale; Rebecca Barros, Accenture; Euler Faria, Vale; and Ali Soofastaei, Vale

ENVIRONMENT

38 The value of tailings in a circular

world, by Glen Corder, University of Queensland

40 VEGA sensor products have the

measure of critical infrastructure

42 GOLD

42 DGO goes for gold, by Barry FitzGerald

44 Major gateways are opening, by Barry FitzGerald

46 Gold’s role in the sustainable

future, by Andrew Naylor, World Gold Council

48 Big-time potential for Resolution, by Barry FitzGerald

50 COPPER

50 Stavely Minerals’ big potential prize, by Barry FitzGerald

lean copper concentrates for the C world, by Nigel J Cook, The University of Adelaide

54 LITHIUM

54 Lithium charge, by Anthony Fensom

MINERAL SANDS

58 Sizzling silica, by Anthony Fensom

60 P O TA S H

60 Potassium – an integral part for sustainable crop production, by Dr Patricia Imas, International Potash Institute

62 TIN

62 Australia –central to future tin supply? by James Willoughby, International Tin Association

64 Tungsten on the rise, by Barry FitzGerald

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A U S T R A L I A N I N N O V AT I O N | E N T R E P R E N E U R S H I P | W E A LT H C R E AT I O N

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Vertical Events

conference line-up

24 & 25 June 2020

12, 13 & 14 May 2020

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20 October 2020 Fullerton Hotel Sydney, NSW 22 October 2020 Grand Hyatt Hotel Melbourne, VIC

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11 & 12 November 2020 14 & 15 October 2020

The Westin Perth, WA

Hilton Brisbane, QLD

Grand Hyatt Hotel Melbourne, VIC

Since 1998, Vertical Events has been successfully organising and implementing corporate investment conferences. Vertical Events prides itself on consistently delivering the environment where Investors and Company Executives come together to network, discuss investment options and to hear analysis from listed sector experts. For more information on the above mentioned conferences and how your company can get involved, please contact Vertical Events on 08 9388 2222 or email info@verticalevents.com.au. To register as a delegate, visit our website www.verticalevents.com.au and follow the links to the applicable conference website.

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T H E F E AT H E R S T O N E R E P O R T

THE

Featherstone REPORT

INDEX GIANTS TAKE AIM AT RESOURCES SECTOR BY TONY FEATHER STONE

Increasing focus on environmental, social and governance outcomes ramps up shareholder activism towards mining companies.

xchange-traded funds (ETFs) and the resources sector look like opposite ends of a spectrum, even though the ETF boom has implications for large and small miners worldwide. ETFs aim to replicate the price and yield return of an underlying benchmark, such as the S&P ASX 200 index, at low cost. These index funds are often called ‘passive’ (a term that irks some in the industry) because they simply replicate an index rather than try to beat it. Historically, mining sector investing is as active as it gets. It requires skilled investors who can benefit from economic and commodity price cycles, and company news and sentiment, and investors who can exploit volatile markets and pricing inefficiencies through active investing. The impact of ETFs on listed mining companies is growing daily. The global ETF industry ended the third quarter of 2019 at a new high: US$5.8 trillion in assets under management, according to local ETF issuer BetaShares in its Global ETF Review Q3 2019. Year-to-date ETF growth was 20 per cent, and assets in US passively managed funds and index ETFs topped those in actively managed funds for the first time, noted BetaShares. Put another way, the global ETF industry had an extra US$1 trillion – some of it moving from actively managed funds – to invest in equities and other asset classes last year. This

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growth has sparked fears that ETFs could be the source of the next financial meltdown if index funds have to sell en masse. Commodities benefited from ETF growth in the third quarter of 2019. Metals accounted for the largest change in investor sentiment, rising from 0.3 per cent on ETF fund inflows in the second quarter of 2019 to about 10 per cent in the third. Most global demand was for gold and silver ETFs as investors sought safe havens as US–China trade tensions peaked, and other geopolitical risks emerged. The same trend occurred here: about $300 million of net assets flowed into ASX-quoted gold ETFs in the third quarter. BetaShares CEO Alex Vynokur said in a statement in November 2019 that, ‘The marked change from last quarter (Q2, 2019) was the more diversified approach taken, with investors allocating significant funds to precious metals alongside fixed income’. L O N G E R -T E R M I M PAC T Rapid fund inflows into global ETFs supported commodities in 2019 and, to a lesser extent, listed mining companies, particularly those in larger indices that attract more ETF assets. The long-term impact of ETF growth on the resources sector, however, is far more profound than short-term fund flows. The size and growth of ETFs – dubbed the new ‘kingmakers’ in financial markets in some quarters – is giving index funds unprecedented investment clout.

AUSTRALIAN RESOURCES & INVESTMENT

BlackRock, Vanguard, State Street Global Advisors and other index giants are using their power to influence environmental, social and governance (ESG) outcomes in listed companies, including large and small listed mining companies. The role of index funds in shareholder activism has surprised. Index funds, by their nature, must hold a stock in an index to replicate the latter’s performance. Unlike actively managed funds, index funds cannot buy companies with strong ESG performance and sell laggards (unless the index fund has specific sustainability criteria that negatively screen companies or sectors). As long-term shareholders and custodians of their investors’ capital, index funds are using their power in other ways: engaging with listed companies on governance issues and voting against shareholder resolutions at annual general meetings for ESG underperformance. Index fund advocacy on ESG issues – a trend that has implications for global mining – is another factor. BlackRock CEO Larry Fink, in his widely read annual letter, said in January 2020 that the firm would avoid investments in companies that presented high sustainability risks. Fink focused on climate change in his letter. ‘Even if only a fraction of the project impacts (of climate change) is realised, this is a much more structural, long-term crisis. Companies, investors, and governments must prepare for a significant reallocation of capital.’ Fink added: ‘In the discussions BlackRock has with clients around the world, more and more of them are looking to reallocate their capital into sustainable strategies. If 10 per cent of global investors do so – or even five per cent – we will witness massive capital shifts’. This thinking has influenced several changes in the investment process of BlackRock, the world’s largest fund manager with US$7 trillion in assets. Sustainability will now be integral to portfolio construction and risk management at BlackRock. The firm will wind-down investments that, in its view, have higher sustainability risks, such as thermal coal producers; launch investment products that screen fossil fuels; and strengthen its commitment to sustainability and transparency in its investment stewardship activities. Cynics argued that Fink’s annual letter is more about marketing and branding for BlackRock, and that the firm’s promises need to be monitored to ensure

The takeaway for resources companies, large and small, is clear: boards of listed miners will need to understand the stewardship policy of large index funds and increase their engagement with them that it acts on them. CEOs of some coal companies publicly said that the sector would find other investors to replace BlackRock. Nevertheless, resources CEOs should pay attention to BlackRock’s change of direction. The asset manager is one of the world’s largest investors in coal, oil and gas, and forestry. BlackRock’s plan to dump coal stocks from its portfolio would be one of the largest sector divestments. Moreover, Fink has a reputation for investment foresight: where BlackRock goes on ESG issues, many other asset managers tend to follow. Right or wrong, BlackRock’s pledge to cut coal stocks could be a forerunner of capital reallocation away from parts of the resources sector. Should that happen, the result would be a higher cost of capital and less investor support for some listed mining companies – a trend that could quicken as young investors demand greater action in climate change from investment funds. It’s worth noting that index fund activism on climate change extends beyond the largest listed resources companies, several of which are making strong progress on sustainability in Australia. BlackRock, for example, invests in listed Australian mining companies that are outside the ASX 200 index, monitors their ESG performance and engages with their board where needed. The takeaway for resources companies, large and small, is clear: boards of listed miners will need to understand the stewardship policy of large index funds and increase their engagement with them, and will have to monitor and communicate the firm’s ESG performance to the market.

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T H E F E AT H E R S T O N E R E P O R T

The focus on sustainability from BlackRock and others means that there is an opportunity for listed mining companies that outperform on ESG – and have a well-developed strategy in this area – to attract capital Mining companies, particularly small and midsize ones, will need to think about the implications of inclusion or exclusion in share market or sector indices. Making a key benchmark or sector index can result in the purchase of the company’s shares from a large base of index funds; just as dropping out of an index can result in ETF selling. INDEX FUND UPSIDE FOR RESOURCES SECTOR It’s not all bad news for the resources sector. The focus on sustainability from BlackRock and others means that there is an opportunity for listed mining companies that outperform on ESG – and have a well-developed strategy in this area – to attract capital. Index funds can be a source of long-term stability on the share register of mining companies. It is becoming common to see the largest index funds hold a few per cent of a mining stock, or become a substantial shareholder as their ownership grows. Index funds often hold the same stock for years – provided the company remains in an index – reducing ownership volatility. Also, growth in mining, energy and commodity ETFs is making it easier for retail investors to gain diversified resources sector exposure here and overseas. As with other ETFs, resources-focused ETFs are bought and sold on the ASX like a share. Commodities are an important source of portfolio diversification, and gold is a well-known hedge against inflation. But gaining pure commodity exposure has historically been hard for retail investors who could not take physical delivery of a metal. Gaining diversified global exposure to smaller mining stocks – to reduce portfolio risk – has also challenged long-term retail portfolio investors over the years. By replicating a mining index with dozens of hundreds of companies, resources ETFs solve that problem. Commodity ETFs have attracted plenty of support in Australia. ETF Securities’ gold ETF is among the largest ETFs in this market, and BetaShares’ Gold Bullion ETF is another option for investors seeking hedged currency exposure. BetaShares has other ETFs over agriculture commodities, crude oil and a basket of commodities. In the mining sector, BetaShares offers the Global Gold Miners ETF (currency hedged). Commodity ETF pioneer ETF Securities has ASX-

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quoted funds over silver, platinum, palladium and a basket of precious metals. Another issuer, VanEck Vectors, has the Australian Resources ETF (MVR) and the Gold Miners ETF (GDX). MVR tracks an index of 25 local mining stocks, and GDX provides exposure to 48 global gold stocks. The latter returned 39 per cent over one year to the end of December 2019. These and other resources-focused ETFs, mostly small by assets under management, are likely to benefit from continued fund inflows into resourcesfocused ETFs, and with that greater buying of resources stocks in those indices. Provided, of course, that the companies in these indices meet increasingly stringent sustainability criteria of ETF issuers – an opportunity and threat for the sector. Tony Featherstone is a former managing editor of BRW, Shares and Personal Investor magazines. The information in this article should not be considered personal advice. It has been prepared without considering your objectives, financial situation or needs. Before acting on information in this article, consider its appropriateness and accuracy regarding your objectives, financial situation and needs. Do further research of your own and/or seek personal financial advice from a licensed adviser before making any financial or investment decisions based on this article. All prices and analysis as at time of print.

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F E AT U R E D

— ANALYSIS — WITH REGINA MEANI

The 2019 iron ore take-off – can the upward path continue through 2020?

THE IRON ORE price has had a volatile experience since the spot price became a mature benchmark in 2008 when daily assessments were published using the industry standard specification of 62 per cent iron (Council on Foreign Relationships China). The price rose steadily from its lows around US$60 per tonne in 2008 to peak at $187 in February 2011, suffering one major dip in 2010. Following the peak was a roller-coaster style ride down, with the price bottoming in late 2015 around $39. A basing process, initial rally and consolidation were completed by December 2018, laying the groundwork for the 2019 take-off. Taking the low point around $69 in January 2019, the price rose steadily to achieve $123 in July, gaining more than 78 per cent before correcting some 35 per cent by last November. There has been a recovery attempt into January 2020 with the price clawing back 18 per cent with another softening of the price since then. While the indications remain positive, there may need to be further consolidation to support the upward path. A drop below $70 may place this scenario at risk. Australia is the second-largest producer and the largest exporter of iron ore in the world. Rio Tinto (RIO), BHP and Fortescue Metals Group (FMG) are the big three Australian players, and together yield around 90 per cent of Australian production. From a purely share price comparison, the outstanding performer from the big three has been FMG. For the 12-month

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period from January 2019, the price gained a massive 162 per cent. From the smaller Australian producers, Mount Gibson Iron had a stunning 90 per cent rise over the same period. FMG is focused on the Pilbara region in Western Australia, and since its beginnings in 2003, it has grown to become one of the world’s largest producers and ships around 170 million tonnes of iron ore per annum. The company is the lowest-cost provider of seaborne iron ore to China. From its inception in 2003 with a share price low of $0.01, the price experienced a meteoric rise to peak in 2008 at $13.15. Then, in line with the general bear market, the price reached a low of $1.16 by November of that year. A quick recovery resulted in the price fluctuating sideways within a broad range with rough parameters between $1.65 and $7.30. These fluctuations continued until the momentum in January 2019 saw the price breach the upper guide later in April. Last year was an exceptional year for FMG, and as the price moved into 2020, it gained a further 18 per cent before suffering a momentum peak and decline. Marked similarities in price movement to the May–June 2019 period suggests that more action may develop in this pullback/ consolidation phase. The 2019 trend support lies in the $9.50–9.80 area, and a break of the lower limit may delay the return to the upward path. While the trend is intact, the price retains the ability to approach the peak zone and move significantly beyond.

Investing in the future – Energy the world’s most valuable commodity E

nergy Mines and Money showcases critical mineral, coal, oil, gas, renewable and hydrogen energy projects to prospective investors throughout a two-day conference and exhibition taking place in Brisbane from 1-2 June 2020. Developed in partnership with the Queensland Government and Trade Investment Queensland, the conference will review exploration, investment and development opportunities for these projects, with innovation and sustainability considerations in mind. Over 80 leading industry experts will also discuss solutions for transitioning to clean energy and the downstream benefits for climate change, whilst also considering the impacts on coal and critical mineral supply and demand. Australia’s only event to bring entire energy mix under the one roof, you’ll find conversations and new opportunities waiting for you at every turn with energy, mining, oil and gas companies on display on the exhibition floor. Taking the work out of networking, Energy Mines and Money is where deals get done. By providing opportunities from morning to night you will meet the right people at the event. Your participation will deliver both a return on your time, and on your investment.

Join over 500 mining leaders, energy executives, investors, traders, brokers and some of the world’s largest natural resource fund managers for two days of learning, deal making and unparalleled networking. This unique forum to network, contribute to conversations and the development of the energy industry is not to be missed.

1 - 2 June 2020 | Brisbane Convention & Exhibition Centre

Visit queensland.minesandmoney.com to claim your complimentary investor pass or receive 10% off with the discount code AUSINV

F E AT U R E D

Mining and energy companies need to transition to clean energy

t the tail end of 2019, the Queensland Government released more land in the coal-rich Bowen Basin for exploration, providing five areas made up of 147 sub-blocks for potential steelmaking coal and thermal coal findings. This was on top of the 11 areas, totalling 3741 square kilometres, for petroleum and gas exploration in the Bowen and Surat basins, also announced by the government. Queensland’s land release followed the Victorian Government’s North Central Victorian Goldfields Ground Release announcement at the recent International Mining and Resources Conference in Melbourne, whereby tenders were open for minerals’ exploration licences for four pre-defined blocks, which range in size from 327 square kilometres to 512 square kilometres. Coming into 2020, the current Queensland Government has recently committed $13.8 million into finding the critical minerals needed for advanced electronics and renewable technologies, allowing this newest investment package to open the untapped ‘new economy’ minerals bounty in North Queensland, fostering new discoveries, projects and jobs. Industry analysts believe that the exploration cycle is returning, with 2019 showing considerable rises in exploration and productivity (E&P) activity and commodity prices, and with investors looking for new projects to get into before we enter the predicted bull market. These financial commitments, like those of other Australian state governments, is also off the back of global demand trends for cobalt and rare earth minerals. In the Austrade publication, Australian Critical Minerals Prospectus, Australia is stated to possess some of the world’s largest recoverable reserves of cobalt, lithium, manganese, tantalum, tungsten and zirconium. With global demand forecast to rise, Australia is the ideal host for a significant resource investment event for the energy mix. In light of the federal and state governments’ willingness to commercialise the exploration, development and supply of critical minerals, Energy Mines and Money will showcase critical mineral, coal, oil and gas projects to prospective investors throughout a two-day conference and exhibition. More than 200 institutional

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and private investors will be in Brisbane from 1–2 June looking for projects to invest in. The recent announcement from BlackRock Chief Executive Larry Fink that the company is withdrawing from thermal coal investments as part of its more active global stance on climate change, coupled with continued public pressure and awareness of climate change and other sustainability impacts, has seen increased scrutiny on the mining and energy industry. Australia’s skyrocketing energy prices – partly due to rising commodity costs for natural gas and black coal – and its energy transition towards cleaner power, have seen mining and energy companies seriously consider their ‘green transformation’. So, the question is not ‘if’ companies will make the clean energy transition, but rather ‘when’ and ‘how’. Solar and wind prices are the lowest they’ve ever been – cheaper than grid electricity. This has furthered the case for mining and energy companies, and governments, to look at using large-scale renewables across all operations, while also continuing to investigate hydrogen opportunities. In 2018 alone, 35 large-scale renewable projects were completed in Australia. As a result, at the two-day event, more than 80 leading industry experts will discuss solutions for transitioning to clean energy and the downstream benefits for climate change, while also considering the impacts on coal, and critical mineral supply and demand. The conference will examine renewable projects, including hydrogen, that have had success in Australia and overseas, and the benefits and challenges of this transition. Domestic debate over coal production and use is ongoing, especially with ageing coal-fired plants, the rise in renewable energy opportunities and benefits, and public and investor sentiment. As the climate change debate continues, there has never been a more important time to come together to discuss the clean energy transition and define the future of the industry at Energy Mines and Money. For more information, please visit https://queensland.minesandmoney.com/.

AUSTRALIAN RESOURCES & INVESTMENT

A B O U T E N E R GY M I N E S A N D M O N E Y Developed in conjunction with the Queensland Government and Trade Investment Queensland, Energy Mines and Money returns to Brisbane from 1–2 June for its third year. Attracting over 500 attendees from 20 countries, the event showcases critical mineral, coal, oil and gas, hydrogen, and renewable energy projects to prospective investors throughout a two-day conference and exhibition. With energy, mining, oil and gas companies on display, some of the world’s largest natural resources fund managers in attendance, and a packed program of keynotes, market analyses, company presentations and panel discussions, this unique forum to network, contribute to conversations and development of the energy industry, and, most importantly, get deals done is not to be missed. For more information, visit https://queensland.minesandmoney.com.

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F E AT U R E D

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AUSTRALIAN RESOURCES & INVESTMENT

TRACKING THE TRENDS 2020 LEADING FROM THE FRONT BY IAN SANDER S, DELOITTE

Mining has never been easy, but miners are continuing to make strides.

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F E AT U R E D

1 O

n the whole, many are positioning themselves to embrace intelligent mining through investments in automation and technology modernisation. Addressing climate change and investor concerns is becoming a higher priority for many. This is being achieved through decarbonisation and uncovering opportunities through joint ventures. Companies are revisiting their talent and diversity strategies, working to strengthen relationships with local communities, seeking to create value beyond compliance to deliver socioeconomic impact. This is coupled with fostering operational efficiency and business competitiveness. Strong leadership is also paramount to successfully navigating these many issues. Leaders will have to steer their companies through some continued volatility, leading to some uncertainty; transform in the face of disruption; and solidify relationships with increasingly dispersed stakeholders. Transparency is key in terms of communication. One of the biggest challenges for miners has been articulating the value that mining brings to wider societies and why investors should favour the sector. The sector has also focused on improving the image of mining. Improving the image of mining is critical. In many jurisdictions, trust in mining is low, with protesters disrupting mining conferences and events. The narrative must change to educate people that the industry is critical in supplying raw materials and driving the economic development of many regions around the world. The change has begun, but there is much work to do. The trends identified in Deloitte’s ‘Tracking the Trends’ report highlight the top 10 trends facing miners this year.

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TREND 1: THE SOCIAL INVESTOR Miners must embed value beyond compliance into their corporate DNA. The drive toward socially conscious profit is no longer limited to environmental activists. There is a demand from society and investors alike for transparency in regard to the economic and environmental impact of sectors such as mining. Miners must embrace a commitment to value beyond compliance to regain trust and improve the image of mining.

2 T R E N D 2 : G E T T I N G PA R T N E R S H I P S AND JOINT VENTURES RIGHT Some industry players are consolidating to gain scale in the face of capital restraints and market capitalisation not reflecting full corporate values. Joint ventures (JVs) often fail because of unclear decision-making, ineffective governance, and poor transparency and alignment, even when they are structured correctly. Market capitalisations in the sector have been declining for the past two years, and companies, particularly juniors, often struggle to raise capital. Alternative funding models do exist – from royalty streaming to offtake agreements. Private equity firms, which once shied away from the sector globally, have also been investing more actively in mining companies, providing additional access to financing.

AUSTRALIAN RESOURCES & INVESTMENT

3 T R E N D 3 : S E I Z E O P P O R T U N I T Y A M I D U N C E R TA I N T Y Australia is not immune to the rise and fall of commodity prices. To avoid being blindsided by the effect of global economic trends, there are some bold plays mining companies can consider in preparation. Miners with commodity portfolios are taking proactive action, through JVs or equity stakes as examples, so that they can be resilient to any potential downturn and better positioned to take advantage of the cycle. Futureproofing, innovation, redesigning, revisiting relations and acquiring resources should be considered in the face of falling commodity prices and margins.

4 T R E N D 4 : DY N A M I C A L LY M A N AG I N G R I S K With global volatility rising, companies should no longer rely on their risk registers to identify critical risks. It’s time to embrace more strategic risk management practices in the face of systemic issues, including a ‘tick the box’ mentality and complex operating models forcing them to predict the impact of emerging events, and the prioritisation of key risks.

The US–China trade war is resulting in market anxiety, with some investors becoming risk-averse and unwinding their positions in base metals, with some valuations suffering as a result. Simultaneously, traditional mining sector risks in areas such as health and safety, strikes, social activism, regulatory compliance, stakeholder relations, cybersecurity, data privacy, finance, and operations remain firmly in place. A wave of new risks, including technology disruption, presents challenges. Increased automation brings a host of new security risks, including managing the rise of artificial intelligence (AI) and addressing sophisticated cybersecurity threats. Miners need to integrate risk, control and assurance, go back to basics, explore alternative futures, leverage better data, and learn from the past.

5 T R E N D 5 : T H E PAT H T O D E C A R B O N I S AT I O N Stakeholder pressure is driving the case for decarbonisation, and mining companies are actively taking steps to reduce their greenhouse gas emissions. Since 2012, the levelised cost of energy (LCOE) for lithium-ion battery storage has fallen 76 per cent; and the decline in solar power costs is even more extreme, dropping 99 per cent since 1980. Decarbonisation makes sense operationally because the electrified mine is easier to automate, and the automated mine is easier to electrify. Energy costs are generally the first- or second-most significant spend for traditional mining operations, accounting for 15 to 40 per cent of operating expenses. Rio Tinto has reduced its scope 1 and 2 emissions by 24 per cent, and has committed to substantial decarbonisation by 2050. BHP has set a goal of achieving net zero emissions by mid century, and is working with customers and suppliers to reduce scope 3 emissions generated along the value chain. To make this vision a reality, companies may need to transform the way they source, use, store, consume and think about energy.

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F E AT U R E D

6 T R E N D 6 : O N T H E R OA D T O WA R D INTELLIGENT MINING Many miners are two to five years down the path of their digital journeys. There has been strong advances, but some are struggling to realise the full return on their intelligent mining investments. It’s a good time to take stock and review some of the lessons learnt, so companies can optimise their digital journeys and unlock sustainable value. Miners are also coming to realise that an intelligent mine isn’t merely a technology play, after having several years of proofs of concept under their belts. It’s no surprise that many companies have yet to achieve the full benefits of intelligent mining given the scope of the transformation required. Redefining the ways of working, and encouraging people to have full access to data and new technologies, will go a long way to changing the culture of the intelligent mine.

7 T R E N D 7: M O D E R N I S I N G C O R E T E C H N O L O G I E S Most mining companies have made significant investments in a range of back-end technology systems. With a digital future on the horizon, companies need to modernise legacy systems and migrate to a digital core – raising a range of considerations around moving to the cloud, adopting sound cyberrisk strategies, and choosing the best approach for modernising their core systems. The digital era has presented mining companies with a significant opportunity to innovate, reduce costs, enhance productivity, improve safety performance and realise their operation’s efficiency improvements.

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8 TREND 8: THE INTERSECTION OF TA L E N T A N D C O M M U N I T Y Digital is sweeping through the sector, with a host of benefits realised across the value chain. They range from cost reduction, improved production and enhanced safety performance, to plant optimisation, greater inventory control, and the ability to predict and mitigate crisis events. To capitalise on the digital revolution, mining companies should drive change internally and within the communities in which they operate. Underestimating internal organisational barriers, bureaucracy and the associated impact on local communities can hinder miners’ abilities to realise the full benefit and prosper. The potential repercussions on local communities and on corporate diversity are not lost on mining companies. True strategic workforce planning can help organisations to understand which roles will be affected, what new roles, capabilities and skills will be required, and therefore what talent and workforce strategies should be deployed.

AUSTRALIAN RESOURCES & INVESTMENT

9 TREND 9: LE ADERSHIP IN AN INDUSTRY 4.0 WORLD The future of work will be very different to what it is today. The emergence of non-traditional teams, the creation of exponential roles, the proliferation of data, and the imperative to embrace greater diversity and inclusion are reshaping the leadership landscape in an Industry 4.0 landscape. Companies need to commit to upskilling their leaders now if they want to strengthen their competitive advantage, and create an adaptive and responsive culture. A new style of leadership that emphasises collaboration and influence rather than command and control, with the advent of an integrated robotic workforce – including AI assistants – is needed.

10 T R E N D 1 0 : TA X T R I B U L AT I O N S The Organisation for Economic Co-operation and Development (OECD) introduced an initiative last year to address tax challenges relating to the digital economy. Pillar One relates to the new nexus regarding profit allocation rules, while Pillar Two relates to a minimum tax regime. These global tax measures could potentially create serious constraints on mining economics. Mining companies need to be aware of the changes and understand how they could impact their tax affairs.

Redefining the ways of working, and encouraging people to have full access to data and new technologies, will go a long way to changing the culture of the intelligent mine Pillar One means a company can be taxed only in countries where it has a nexus, which has typically been defined as a physical presence. In the digital economy, the OECD proposal argues that companies should pay taxes where the consumer of the product resides. For miners, this would mean that the country purchasing minerals or metals could establish the right to tax the profits, even if the mining company concerned is not physically located there. Pillar Two may subject mining companies to minimum tax in instances where little to no tax is paid in the mining jurisdiction in which such companies operate. Although the sector may be exempt from the proposed new nexus rules, the BEPS 2.0 deliberations have spurred tax authorities and non-governmental organisations alike to revisit some of the tax rules that apply to resource companies. As a result, mining companies may find themselves being challenged by the ever-evolving rulebook for tax in the host countries and the international chain back to their investors.

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F E AT U R E D

What’s on the horizon for investment in mining exploration?

here is good news on the horizon for junior miners seeking investment in 2020. Despite majors having underinvested in exploration for years, there are signs that this is changing. Sprott US Holdings CEO Rick Rule stated at the recent Mines and Money London event that many majors had recognised that they need to change, and now have a renewed focus on exploration. In 2019, the second-largest gold mining company in the world, Barrick Gold, allocated US$205 million for exploration, up five per cent from US$195 million in 2018. In Australia, exploration budgets increased by nearly US$200 million in 2019. Explorers allocated just over US$1.5 billion to Australia in 2019, a seven-year high. These increases were driven by higher allocations for copper and gold by producers. Also reaching a seven-year high are the recent gold prices, which indicate that 2020 will see a rise in gold exploration and investment. For junior exploration companies, the situation is tougher as investors increasingly shy away from ‘riskier’ early-stage exploration companies, preferring the ‘safe havens’ of investing in majors, royalty and streaming companies or exchange-traded funds (ETFs). Rule has suggested that most of the funding for juniors will therefore have to come from the majors, believing that ‘the exploration cycle is returning’. This increased focus on exploration investment by the industry, however, doesn’t necessarily mean that getting a mining project through the exploration stage is becoming any easier as mining companies must dig deeper and move into less-explored geographies. Conversion rates between discovery and discoveries that become mines are still low due to difficulties with permitting issues, adding to jurisdictional risk; while preliminary economic assessments (PEA) and pre-feasibility studies (PFS) are still notoriously inaccurate. Even after the discovery has been made, securing financing during the mine development and construction phase is fraught with pitfalls. Getting a mining project through the exploration stage will be a focus of discussion at the upcoming Mines and Money Asia event in Hong Kong in March. Resource Capital Funds Managing Director Peter Nicholson, Lowell Resources Funds Management Director John Forwood and

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IRC Chief Financial Officer Danila Kotlyarov will discuss how miners and financiers can lessen their risk for projects transitioning from exploration to production in a panel discussion. Exploration projects from around the world will be showcased to more than 400 potential resource investors throughout the two-day conference and exhibition. Senior mining executives will be sharing their latest project developments through spotlight presentations within the conference program, and will be available to meet with potential investors on the exhibition floor, enabling investors to be the first to hear major announcements and to get in first to beat the competition. Canadian projects participating this year include Agnico Eagle Mines’ joint venture with Barsele Minerals, alongside IsoEnergy’s newly discovered high-grade uranium at the Hurricane zone in the eastern Athabasca Basin, and Amex Exploration, who has made a recent significant discovery in Quebec at its 100 per cent owned Perron project. There will also be several Australian exploration projects with participation from Southern Gold, Cape Lambert Resources and White Rock Minerals; while those among the less-explored geographies include Royal Road Minerals Nicaragua gold and copper project, Ceylon Graphite’s project in Sri Lanka, and Goviex Uranium’s advanced stage property in Niger. A further 100 mining projects from around the world and across the commodity spectrum will be at the region’s largest mining investment forum, seeking funding from more than 400 institutional and private investors. For more information, visit asia.minesandmoney.com. Mines and Money Asia is the region’s largest mining investment forum, bringing together investors and miners to Hong Kong for two days of networking, learning and deal-making. Showcasing more than 100 mining projects from around the globe and across the commodity spectrum, there’ll be conversations and new opportunities waiting at every turn. It’s the only place to gain access to more than 400 leading investors, and with networking from breakfast right through to evening drinks, delegates will leave with new connections, deals and business opportunities.

Asia’s Largest Mining Investment Forum M

ines and Money Asia is the region’s largest mining investment forum, bringing together investors and miners to Hong Kong for two days of networking, learning, and deal-making. It’s the only place to gain access to more than 500 leading investors and with networking from breakfast right through to evening drinks. You’ll find conversations and new opportunities waiting for you at every turn, with a showcase of more than 100 mining projects from around the globe and across the commodity spectrum. Running alongside your extensive networking schedule, the two day conference program features over 100 leading mining, investment and finance experts with sessions discussing the commodity outlook in 2020, how mining companies can work with Chinese investors, and how miners can speed up the process of

taking a mine from exploration through to production to start delivering bottom-line profits sooner. Investors and miners attend Mines and Money Asia and leave with new connections, deals, and business opportunities.

Visit asia.minesandmoney.com to claim your complimentary investor pass or receive 10% off with the discount code AUSINV

ASIA

R E S E A R C H & I N D U S T R Y PA R T N E R S H I P S

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AUSTRALIAN RESOURCES & INVESTMENT

PARTNERSHIPS FOR SUCCESS The Western Australian Government is partnering with the gold sector and research community to ensure benefit to the state. BY NICOLE ROOCKE, CHIEF EXECUTIVE OFFICER, MINER ALS R ESEARCH INSTITUTE OF WESTER N AUSTR ALIA

estern Australia has a long relationship with gold, with mining of this precious metal dating back to 1885. Since then, the gold sector has been through a number of major downturns and growth periods, reflecting what has been happening globally over time. Today, the Western Australian gold sector produces 211 tonnes of gold annually, is valued at $12 billion and employs more than 31,000 people. It is a significant part of the Western Australian economy. But it is not without its challenges. Despite the apparent prospectivity for gold in the state, production is forecast to fall by half over the next 40 years in the absence of sufficient new discoveries to replace the impending closure of older gold mines. While discoveries are still occurring, no tier-one deposits have been found in Australia in the past decade. The most recent tierone discovery in gold in Western Australia was Tropicana in 2005. With the delay between mineral discovery and lead time for development of new mines being (on average) 13 years, the increased costs of exploration, and exploration at ever greater depths, there is a need to look at developing different exploration techniques and improved understanding of mineral systems to increase the likelihood of success. The state government, via the Minerals Research Institute of Western Australia, is partnering with the gold sector and researchers to tackle these very real issues in the projects. Work led by CSIRO’s Ryan Noble has sought to develop and test new sampling and analytical workflows. This has been done by using ultrafine soils to improve the likelihood of greenfields exploration success in Western Australia through the reduction of nugget effects in gold, and addressing the challenges with detection limits in material dominated by quartz sand. Other work is underway within CSIRO by John Walshe to develop a blueprint to enable the gold industry to map the size of mineral systems, recognise key chemical gradients within them, and identify

Today, the Western Australian gold sector produces 211 tonnes of gold annually, is valued at $12 billion and employs more than 31,000 people. It is a significant part of the Western Australian economy. But it is not without its challenges areas of high-grade resource. By recognising the distal footprints of mineral systems, exploration for buried deposits will be improved. Given the vast tracts of salt lakes in the eastern region of Western Australia, developing new seismic acquisition and processing methodologies to enable efficient and inexpensive application of high-resolution seismic surveys in hyper-saline environments will revolutionise the use of borehole seismic surveys in mineral exploration. This research, led by Milovan Urosevic at Curtin

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R E S E A R C H & I N D U S T R Y PA R T N E R S H I P S

University, is expected to result in a significant reduction in costs, an increase in data density, and a significant increase in the quality of both borehole and surface seismic images. The Yilgarn Craton remains one of Australia’s most important mineral provinces. The Yilgarn 2020 project, led by Nicolas Thebaud from the Centre of Exploration Targeting at The University of Western Australia, is a three-year research program that aims to enhance the ability to predict the camp-scale distribution of mineralisation. The results of this study will be integrated into existing conceptual models to create more effective exploration strategies for the Yilgarn Craton and other Precambrian terranes worldwide, and may lead to the definition of new exploration models and technologies critical to unlocking new mineral district(s). The current practice of sending drill samples away to offsite laboratories for assay is slow. Technology being developed by Portable PpB Pty Ltd, a newly formed Western Australia–based mining equipment, technology and services (METS) company, to enable infield analysis of samples will reduce analytical time and exploration costs, and improve exploration efficiency. Finding new deposits is only part of the range of challenges that the gold sector faces. Improving the safe extraction of ore and increasing the recoverable value are necessary to ensure the economic development of projects in Western Australia. Research looking at coupling in situ leaching and electrokinetics potentially enables recovery from subeconomic ores with a smaller footprint than current mining. The work by Andy Fourie at The University of Western Australia seeks to identify the impacts and feasibility of such approaches from a technical and economical perspective. Other work by Mining3 includes investigating broadening the opportunity for in situ recovery of value from mineral deposits using more selective and environmentally acceptable practices. The majority of underground mining in Western Australia occurs in the gold sector. With mining occurring at increasing depths, engineering in complex rock masses is crucial. Work led by the worldacclaimed Australian Centre for Geomechanics at The University of Western Australia aims to understand rock properties to predict rock burst vulnerability in three dimensions, optimise ground support systems and enable probabilistic approach to stope design, and will lead to safety and productivity improvements in the underground mining environment. Additional work by Mining3 on the development and evaluation of fume-free explosives for underground blasting applications will also lead to safety improvements for the underground gold sector.

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The purpose of this investment is to ensure that the collective strengths of government, researchers and industry are brought to bear to enable applied minerals research into the gold sector, which delivers an economic and social benefit for Western Australia The mining sector continues to amp up its efforts to reduce environmental impacts. Research by Mining & Process Solutions (MPS), winner of the West Australian Innovator of the Year Award for 2019, seeks to evaluate the application of glycine leach technology for the treatment of copper, gold and base metal ores to avoid the use of cyanide in ore processing. In total, Minerals Research Institution of Western Australia (MRIWA), on behalf of the Western Australian state government, is directly supporting the gold sector through the investment of $4.6 million in the abovementioned minerals research projects. The purpose of this investment is to ensure that the collective strengths of government, researchers and industry are brought to bear to enable applied minerals research into the gold sector, which delivers an economic and social benefit for Western Australia. With many of these projects due to be completed over the next 12 months, there is a need to ensure that the knowledge gained from this research is implemented by industry for the benefits to be realised.

F E AT R S EU AR E CD H & I N D U S T R Y PA R T N E R S H I P S

More yield, less waste

Reflux Classifier

How mining’s newest brains trust will breathe new life into beneficiation.

nvironmental improvements and market pressures are driving multinational groups to shake-up stagnant mineral processes. Public opinion may look unfavourably on the environmental impact of mining, but a $35-million Australian Research Council (ARC) grant is enabling a team of researchers to change that by slashing water and energy use during minerals processing. Based at the University of Newcastle, the ARC Centre of Excellence (CoE) for Enabling Eco-Efficient Beneficiation of Minerals (CoEMinerals) was announced late last year after a gruelling selection process that included 93 applications nationwide. Up to 134 researchers and students across 18 academic, research and industry organisations – including CSIRO, eight Australian universities, and organisations in the United Kingdom, the United States, Finland, Denmark, China and Australia – will collaborate on new beneficiation methods that will reduce wastage of highvalue metals by up to 90 per cent.

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As an ARC-funded centre, the project ‘is very different to the sorts of schemes that are more commonly seen within the minerals industry’, such as the Cooperative Research Centres (CRCs), explains Centre Director Laureate Professor Kevin Galvin. ‘We took the view that this should not look like a typical minerals research centre where the people in the comminution, metallurgy, flotation and gravity areas usually separate into different groups that don’t talk to each other.’ Galvin adds, ‘There’s no corporatised entity’, noting that the ARC ‘has not supported a CoE in the minerals area for a decade’. With ARC support comprising most of the centre’s $48 million total funding, Galvin – whose previous work includes the development of FLSmidth’s REFLUX Classifier1 – is optimistic that strong backing will help the seven-year project to drive real change. ‘It’s a very special form of research funding that permits the academics to do

Professor Kevin Galvin

some very fundamental, highly innovative work that is longer-horizon,’ he explains. ‘We are highly focused on the basic science that we believe can deliver transformational change.’ T OWA R D S B E T T E R B E N E F I C I AT I O N

Researchers’ goals of doubling energy and water productivity are ambitious

AUSTRALIAN RESOURCES & INVESTMENT

targets given the massive volumes of water currently used during the process. This creates challenges due to the scarcity of water in remote areas, Galvin says, as does beneficiation’s ‘tremendous’ energy use, comprising up to half the energy used by the entire mine. 2 Current process efficiency is ‘a rubbery number’, he notes, but lies in the vicinity of 85 per cent. That means perhaps 15 per cent of mined materials end up in tailings dams, which, in the wake of Brazil’s deadly Brumadinho dam collapse disaster, has heightened sensitivities around mining’s environmental impact. CoEMinerals is aligned around three core objectives, including speeding up flotation cell technology that Galvin says ‘has not changed in a hundred years’. Scaling previously focused on expanding flotation cells from 30 cubic metres years ago to up to 600 cubic metres today – but physical constraints are kicking in. ‘The speed of processing is primarily limited by the rise velocity of air bubbles in water,’ Galvin says, ‘unless you start to do new things.’ New technologies, like RAFT polymerisation and biopolymer technologies, promise better binding with specific particles, while research suggests that a novel hydrophobic binder could speed beneficiation by an order of magnitude by recovering ‘incredibly fine’ particles well below 10 microns in diameter. ‘The potential speeds that we can secure are quite remarkable,’ Galvin says, ‘but we still have to get the chemistry right to apply this to lots of new areas.’ Another key objective is to refine crushing processes so not all materials have to undergo time-consuming crushing into extremely fine particles just tens of microns across. ‘We ought to be a lot smarter than that,’ Galvin explains. ‘If we can separate particles effectively at coarser sizes of 500 microns – or even one millimetre – then reject the gangue at coarser sizes,

we can focus on grinding up only the bit we need to grind – and reducing energy consumption in the process.’ ‘Extremely promising’ waterless processing techniques are also being considered – as are the innovative chemical processes that comprise the centre’s third main theme. M EETING SU RGING DEM A N D

CoEMinerals may be based around academia, but its work is far from academic – and it’s not just about improving the environmental palatability of the beneficiation process. Increasing adoption of new technologies like electric vehicles and renewable energy equipment, which incorporate massive amounts of copper wiring, is driving surging demand globally. While a conventional car has 10–20 kilograms of copper wiring3, a hybrid can have around 40 kilograms and a fully electric vehicle typically has more than 80 kilograms of copper. A hybrid electric bus has around 90 kilograms of copper, but its fully electric cousins have more than 370 kilograms. With the world’s copper mines already producing two million tonnes of refined copper per month at utilisation rates of around 85 per cent4, there is limited

headroom to accommodate surging demand that is forecast to double within 20 years.5 Extraction currently produces thousands of times more waste than actual product6, and the centre’s ‘ultimate stretch target’, according to Galvin, is the elimination of tailings dams through higher-efficiency, higher-yield processes. He is confident that strong ARC and industry support, a rich pipeline of innovation, and multidisciplinary expertise will produce very real deliverables sooner rather than later. ‘We’ve brought in capability that has not previously been brought into the minerals industry,’ he explains. ‘With this level of funding and global collaboration, the prospects are high for achieving absolute step changes and transformation.’ Endnotes 1

https://www.flsmidth.com/en-gb/products/centrifugationand-classification/reflux-classifier

Curry, J.A., Ismay, M.J.L., Jameson, G.J., Mine Operating Costs and the Potential Impacts of Energy and Grinding, Minerals Engineering, 56, 70-80 (2014)

https://www.mining-technology.com/comment/electricvehicle-revolution-drive-copper-demand/

https://www.icsg.org/index.php/component/jdownloads/ finish/114/2993?Itemid=

https://smallcaps.com.au/copper-demand-to-doubleforcing-miners-more-for-less/

Rankin, W.J. Towards zero waste. AusIMM Bull. 2015, 2015, 32–37. https://www.ausimmbulletin.com/feature/ towards-zero-waste/

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T R A N S P O R T, E Q U I P M E N T & M A C H I N E R Y

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AUSTRALIAN RESOURCES & INVESTMENT

Haul trucks queuing prediction in open pit mines BY ALI SOOFASTAEI, GLOBAL PROJECTS LEADER, VALE; EULER FAR IA, SENIOR DATA SCIENTIST, VALE; AND FER NANDO JOSÉ VON ZUBEN, PROFESSOR, UNIVER SIT Y OF CA MPINAS

mproving the efficiency of haulage systems is one of the more significant challenges in mining engineering, and is the subject of many research projects undertaken in both academia and industry. For mining, haulage systems must be designed to be as efficient as possible to minimise haulage costs, improve profitability, and increase the total mine value. Haulage system inefficiency is typically derived from inadequate engineering, which results in poor haul road design, machinery stand-by and downtime, and circuit traffic. Haulage costs can be some of the largest in the mining system. In various case studies, it was found that material transportation represents 50 per cent of the operating costs of a surface mine. One of the most effective components of haulage system efficiency is the movement of trucks, where these machines consume a significant amount of fuel and play a central role in mine productivity and efficiency. Many factors affect the efficiency of haul trucks, such as the accuracy of dispatching systems, payload, truck speed, haul road condition, road design, traffic layout, fuel quality, weather conditions and drivers’ skill.

A review of the literature indicates that the understanding of the energy efficiency of a haul truck is not limited to the analysis of vehicle-specific parameters. Mining companies can often find a more significant increase in productivity, energy-saving opportunities and efficiency improvement by expanding the analysis to include other practical factors, such as payload distribution and variance. Hauling operations in surface mines consist of different kinds of components. These components are loading, hauling, manoeuvring, dumping, returning and spotting (Figure 1). In the standard hauling operation, loading time is the time taken to load the truck, and returning time is travelling time for each truck between the loading zone and dumping area. Spotting time is the time during which the loading unit has the bucket in place to dump but is waiting for the truck to move into position. Spotting time will depend on the truck driver’s ability and the loading system. Double-side loading should almost eliminate spot time. Dumping time is the time taken for the truck to manoeuvre and dump its payload either at a crusher or dump.

Figure 1. Schematic of a hauling operation in surface mines

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T R A N S P O R T, E Q U I P M E N T & M A C H I N E R Y

Figure 2. Truck queuing in a surface mine fleet

Based on these hauling operation components, four main times can be defined: fixed time, travel time, wait time and cycle time. The fixed time is a summation of the loading, manoeuvring, dumping and spotting time. It is called ‘fixed’ because it is substantially invariable for a truck and loading unit combination. Travel time is the time taken to haul and return the payload. Wait time is the time the truck must wait before being served by the loading unit, waiting in a queue for dumping and the waiting time in line behind the overloaded trucks in large surface mines (truck bunching). Cycle time is the round-trip time for the truck. It is the sum of the fixed, travel and waits times. Figure 2 illustrates the four types of truck queuing in a surface mine hauling operation. Excessive haul-truck queuing at loading and dumping areas results in lower productivity and higher fuel consumption. On the other hand, every minute a shovel is not loading trucks, or the crasher doesn’t have enough mine material, is wasted time and money. Generally, the dispatch system provides industry-proven optimisation of truck assignments in real time, minimising truck queuing in loading and dumping areas to reduce the shovel hang time and crasher idle time. The current dispatch technologies, including the application and related algorithms, however, are not good enough to avoid unnecessary queuing in an open pit mine fleet, especially in loading and dumping areas. This article summarises a successful advanced analytics application used in a couple of iron ore mine sites in South America to predict the truck queuing in the fleet. The aim of developing the mentioned application was to predict a surge of queues on dumping areas of open pit mines, along with the presumed reasons for those problems. The explanations provided empower the action of final users aiming at avoiding or minimising those scenarios before they happen. DATA M I N I N G This project is part of a broader initiative at the advanced analytic centre in a big mining company in South America. It was started in early 2018 when the first stages of the cross-industry standard process for data mining (CRISP-DM) was applied to complete the project. CRISP-DM is an industry-proven way to guide data mining efforts (Figure 3). As a methodology, CRISP-DM includes descriptions of the typical phases of a project, the tasks involved with each step, and an explanation of the relationships between these tasks. As a process model, CRISP-DM provides an overview of the data mining life cycle.

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The life cycle model consists of six phases, with arrows indicating the most important and frequent dependencies between steps. The sequence of the steps is not strict. Most projects move back and forth between stages as necessary. The CRISP-DM model is flexible and can be customised easily. In such a situation, the modelling, evaluation and deployment phases might be less relevant than understanding the data and preparation phases. It is still essential, however, to consider some of the questions raised during these later phases for long-term planning and future data mining goals. The developed model in this project is being used in the six different dumping locations in the north of Brazil, simultaneously providing a 24/7 set of hourly predictions for each crushing area. The benefit collected by the usage of this tool so far has been accounted for in a total of 10 per cent reduction of queue time on each dumping area it is being used. Following is a summary of each CRISP-DM methodology, and steps in this project – including an exact time frame – are explained.

Figure 3. Cross-industry standard process for data mining

AUSTRALIAN RESOURCES & INVESTMENT

Business and data understanding (Four months) During these two phases, a series of statistical analyses were conducted to identify which abnormal behaviour had a more significant impact on the productivity cycle of haul trucks. The result of this analysis identified surges of queues on the dumping area as the most counterproductive scenario for the hauling operation cycle. The results were presented and validated in a series of workshops and individual presentations with stakeholders. Data preparation (Two months) During this step, a data mining process was conducted to identify possible reasons for the surge of queue time. This process was performed along with the mine site productivity supervisors throughout a series of discussions, visits to the mine site in question, and in collaboration with the information technology (IT) department. A considerable amount of time was spent to understand all the different variables that somehow impacted the system and where to retrieve them from available datasets. It was identified that four different data sources contained relevant information for the problem addressed. There was no previous primary key in the four databases (e.g., A, B, C and D), which could be used to join all this information on the same grain of analysis. Nonetheless, all of them were discrete events associated with a start time and end time of that specific event. For example, the central database – referred to here as A – contained the productivity cycle information, such as loading time, dumping time, queue time and the amount of material carried by the truck along with its lithology, and all those events were associated with a specific time in seconds of a day shift. To tackle this challenge, a set of time intervals was selected (i.e., every two hours) to aggregate all features of interest in each database separately, thus resulting in a primary key, making possible the joining of information in a time interval of analysis. The loss of information while aggregating the features was inevitable and necessary to build a primary key to join all the relevant information from the different data sources. A strategy applied to minimise this loss of information was done by taking the average and standard deviation from each continuous feature aggregated on the desired time interval. Modelling (Four months) With the prepared data, and after treating some inconsistencies found, the modelling step started aiming at devising a system capable of predicting surges of queues and stratifying its main contributors. The final designed method is composed of three modules: 1. a predictor module consisting of a nonlinear autoregressive exogenous model (NARX) based on an artificial neural network (ANN) capable of predicting the average queue time faced by haul trucks at dumping areas with performance of 12 per cent of relative root mean square error (RRMSE) on the test set 2. a decision-maker module responsible for producing alarms of surge of queue events performing an F1 score of 0.71 on the test set

3. an explainer module based on the local interpretable modelagnostic explanations (LIME) algorithm, which is capable of stratifying the main contributors for the alarms generated, providing a leaver of action to avoid or minimise such counterproductive scenarios before they occur. All information generated by the system is displayed on a web user interface. Evaluation (One month) Besides the statistical tests applied during the modelling phase, a more in-depth assessment into the final users’ reality was performed. This step consisted of an assisted pilot in which the usage and performance of the system were tested in the real world. Insightful feedback was collected and used to enhance the system. The user interface that displays the system predictions was the part of the solution that was most benefited by this stage. One example was the creation of a field on the webpage in which the user could write down feedback for each prediction. This feedback is stored in a Structured Query Language (SQL) database for later analysis. Deployment (Two months) During this step, all the integration and automatisation tasks were addressed to establish a full autonomous routine of the application. Furthermore, it was defined as a crucial entity of the advanced analytics centre projects – the control group. This group is formed by a data scientist and a subject matter expert who meet with the final user every week to collect feedback regarding the performance and usability of the system. Those meetings, which often happen face to face, are essential to keep the users engaged and provide a sense of continuous improvement. This proximity helps to overcome fears in the usage of artificial intelligence–based solutions, which are primarily linked to the replacement of the human workforce. All possible enhancements regarding user experience and performance of the machine learning models are addressed by the team of the advanced analytics centre led by the control group, which undertakes this essential task as long as the product lives. S C A L A B I L I T Y S T R AT E GY The code, data, model, packages and metrics achieved during the experimentation cycles were stored to facilitate the rollout of the solution and to guarantee reproducibility of the results obtained in the production environment. Additionally, to facilitate scaling the project, a maturity scale matrix regarding all topics (i.e., people, data, systems and processes) necessary was developed to apply this solution for different locations. This scale matrix is presented at workshops of the overall advanced analytic centre solutions’ portfolio in events about innovation in many different mine sites. Once the business area shows interest in the solutions, the scale matrix is shared and filled. Based on the result of the as-is scenario, the adaption of the product is started, and it usually takes two to three months to have the product running in an assisted production environment.

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MINE DE VELOPMENT

Hot-dip galvanizing in the mining industry

ot-dip galvanizing (HDG) is a factory-applied, metallurgically bonded zinc coating that has been used to protect steel from corrosion for more than 100 years. It is a tough and abrasion-resistant coating, well suited for use in harsh mining environments. In Australia, there are around 40 galvanizing plants located close to all major centres and in many rural locations, providing a galvanizing service ranging from bolts to the structural steel requirements of major resources projects. The benefits of using hot-dip galvanizing to increase the durability of steel structures is well understood, and galvanized coatings provide predictable performance, both in atmospheric conditions and when embedded in soil and concrete – performance that is referenced in multiple Australian and international standards. The relationship between corrosion prevention and durability is obvious, but did you know that there is also a close relationship between corrosion prevention and occupational work health and safety? Structures, as defined in AS 5104 (ISO 2394) General principles on reliability for structures, are an organised combination of connected parts designed to provide some measure of rigidity. Properly designed and built structures have minimum safety factors built into the design, which is a requirement of the structural codes (AS 1170). These must not be allowed to degrade over time for any reason, as to do so may expose personnel to hazards and breach the company’s duty of care. The loss in structural integrity can result in structural collapse, which may be sudden and can result in multiple fatalities. Corrosion is an insidious process and can be a major factor in the degradation of mining structures. Corrosion may be localised and the resulting reduction in structural integrity in that local area may not be readily observable. In the initial design of mining structures, additional robustness may be required, and adequate controls put into effect, to manage the inevitable misuse and damage that occurs on site. The use of a galvanized coating may reduce or even eliminate the requirements

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for maintenance painting, providing a safer and more productive workspace with less downtime. This is of importance in the mining industry, where the environment is often harsh, and paint coatings are easily damaged. Corrosion of high-stress areas is commonly overlooked by asset management teams, especially if assessors are not competent in the design of structures. Structural integrity is not something that can be managed at the lower hierarchy of control levels, and inappropriate corrosion protection specification is a real issue in the mining industry; there is a need to design, build and maintain to ensure that the hazard corrosion present is addressed. Durability should be considered in the concept design stage – the later you leave it, the greater the cost to the business. Design for durability is simple with hot-dip galvanizing, and thicker coatings than what is referenced in the standards are often available. For example, on most heavy structural steel, it is possible to specify a 50 per cent increase in the coating thickness, providing a 50 per cent increase in durability for when the environment is highly corrosive. Environmental sustainability and corrosion prevention are also closely related issues. The Australian HDG industry is a world leader in environmental management, with a strong commitment to recycling. Members of the Galvanizers Association of Australia (GAA) have even developed

an independently verified Environmental Product Declaration (EPD), based on the product category rules of EN 15804. This is a first for the Australian coatings industry, and the first industry-wide hotdip galvanizing EPD produced outside of Europe and North America. Steel and concrete manufacturing are well-known major sources of carbon dioxide emissions. Less well known is the fact that galvanizing significantly reduces the global warming potential (GWP) per year of use for both steel and concrete by increasing their durability. At the GAA, we are committed to the availability of environmental data, and the Australian hot-dip galvanizing, steel and international zinc industries have all published life cycle inventory data to assist in planning for your next investment. Galvanized structures can be designed to be re-used by using bolted connections, making them modular, demountable and readily transportable. This reduces waste and, with a coating life of over 50 years in many locations and applications, products can be re-manufactured for use elsewhere. And if the structure can’t be re-used, all steel and zinc can be fully recycled for re-use without downcycling. So, in addition to being one of the most effective and versatile protective coatings, HDG is also one of the most sustainable methods for protecting steel in the mining industry. For more information, visit www.gaa.com.au.

Durable, rugged and a long life.

Red sea urchins are believed to be almost immortal. These small, spiny creatures are known for their long life and some are believed to live for more than 200 years. This is something they have in common with hot dip galvanizing. Compared to any other protective coating for steel, hot dip galvanizing is unmatched in its superior corrosion resistance, strong and tough coating, proven performance, and lifetime cost benefits. This durable and rugged coating makes it the ideal solution for steel in any environment.

Compare the life span of hot dip galvanizing against other forms of coating on our durability estimator by scanning the QR code or at gaa.com.au/durability-of-galvanizing-estimator/

www.gaa.com.au

MINE DE VELOPMENT

LIVING IN A DIGITAL WORLD Why mining companies need a digital transformation plan. BY EDSON ANTONIO, AI GLOBAL M ANAGER, VALE; R EBECCA BAR ROS, DIGITAL TR ANSFOR M ATION & ANALY TICS SENIOR M ANAGER, ACCENTUR E; EULER FAR IA, SENIOR DATA SCIENTIST, VALE; AND ALI SOOFASTAEI, AI PROJECTS LEADER, VALE

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AUSTRALIAN RESOURCES & INVESTMENT

odern technology is rapidly growing, and companies need to adapt to the new changes. Digital transformation plays a critical role in helping entities prepare for this industrial revolution. Improving digital technology, such as automation, sensors, advanced analytics, intelligent systems, and so on, has forced companies to think more about productivity and efficiency by using new technologies. The mining industry is facing a significant challenge to make the most of a digital transformation when the maturity of people, technology, data, and management systems isn’t enough to open the doors of the digital world for this old industry. To tackle this challenge, not only should mining companies work hard to pass this bottleneck, but universities need to change their curriculum to include better learning and research programs for future mine engineers. The Fourth Industrial Revolution is already happening, and the world is currently facing a digital decade. The new digital economy is transforming the business environment, and mining companies have been affected by this disruptive movement, caused mainly by a tide of pressure coming from clients and final consumers. In mining, a massive amount of data is collected from sites, which can potentially result in excellent opportunities to find new solutions for business problems through this digital transformation. The main goal of digital transformation programs is to define how companies adapt to digital changes. Moreover, the definition of digital mining transformation is always different. Figure 1 demonstrates a technology-driven process consisting of three main components of digital transformation: data, connectivity and decision-making. The pressure on mining companies is on both the supply and demand sides. Although, in general, it starts on the side of the consumers. I N F L U E N T I A L FAC T O R S O N D E M A N D Consumers that are more connected have more decision-making power The digital economy produced a cultural transformation that has set a higher level of expectation and user experience from consumers. This change redirected the decision forces from mining companies to the final consumers. Consumers are more focused on user experience than with the possession of the property itself New business models developed by the digital economy lead a transformation in the consumers’ preferences, mainly among the younger generation, with the focus shifting from owning to using. Liquid expectations The more developed a digital economy is, the more consumers extrapolate the consuming experience of a determined category of mining product to other markets, thus significantly amplifying what the market traditionally defines as ‘competitor’. Currently, the competitors are not necessarily inside the mining industry. Faster adoption cycles of new ideas and technologies have made markets quickly disappear The classic curve of mining innovation diffusion is facing a significant change. The process of transmission that once slowly

Figure 1. A technology-driven process

flowed between the social system participants nowadays quickly converges between the winning solutions. I N F L U E N T I A L FAC T O R S O N S U P P LY Unbundling phenomena by the start-ups The entire process of a productive chain, which before was executed for a big mining company, can be achieved by hundreds of small companies performing each of the small steps of the whole process in a more efficient way. Exponential cost reduction of the technological process This pattern, which has been observed since the end of the 1950s, has become economically feasible in a series of projects that previously didn’t leave the drawing board. New competitors being created every day It is essential to develop a digital transformation plan to predict the effect of market conditions on the mining value chain. The companies that don’t review their operational models – especially their business models – will not have space in this dynamic competitive environment. This digital transformation plan can be reached through three strategic drivers: ― Digital business transformation Attending the new demands of business models. The primary investment area to implement this strategical approach is a junction of the technological parks with the relevant set of new and existing data to foster the use of big data and artificial intelligence (AI). This approach can help to identify new trends and market demands. ― Digital clients transformation Revision of the client experience; business-to-consumer (B2C) or business-to-business (B2B). The integration of different platforms to guarantee clients’ information unification, jointly

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MINE DE VELOPMENT

In the past, mining companies could choose to be late or early adopters of new technologies; however, this is no longer the reality with the digital transformation of the marketing function, are the necessary condition to implement this strategic driver. The application of AI combined with mobile technologies and social media is essential to customising the offerings to guarantee higher client engagement. ― Digital company transformation Operational excellence of production process and technological park. Each productive process automation is required to implement this part of the strategy, which ranges from the operation itself, to the decision-making process. The usage of the Internet of Things (IoT), robotics and AI are some of the elements that enable automation and opportunities for identification of efficiency improvements. To maximise the return on investment in a digital space, a focus on some leveraged strategies is a requirement, such as: Agile leadership Strategic views and a fast-paced decision-making process. A workforce that is focused on innovation A digital mindset infused in the workforce. Networking Keeping the mindset of ecosystem collaborating inside the value chain (suppliers, logistics and clients) and outside (start-ups and universities). Access, management and usage of data The capacity for creating knowledge to improve the decisionmaking process. Appropriate technological infrastructure Guaranteeing processing capacities, data and business security, and interoperability among systems. In the past, mining companies could choose to be late or early adopters of new technologies; however, this is no longer the reality. Consider what is highlighted above, and the journey to a digital transformation becomes an essential plan for all companies working in the mining industry.

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A successful digital transformation plan can increase digital capabilities and develop the sociotechnical capacity in a mining company. Digital transformation can also alter all aspects of the business to change mining operations and maintenance; however, mining companies are struggling to start their digital transformation. In order to successfully progress in the digital transformation journey, it is essential to define a clear responsibility for digital investments. Companies should also invest in use cases, not just in technologies, and it is necessary to use result-based

AUSTRALIAN RESOURCES & INVESTMENT

K E Y TA K E AWAY S

actions according to a theoretical-designed approach. Further, it is important to take full advantage of the low hanging fruits, like low-cost and fast, successful opportunities, which will help companies create a digital culture. Taking risks in assessments that identify common problems of several company sectors will make it easier to scale and re-use the lessons learnt. Finally, having a successful digital transformation plan means thinking about a multidisciplinary concept, and this approach needs innovative discoveries in all company sectors.

1. Mining companies should start a digital transformation program to be part of an essential revolution in this industry. 2. There are three foundational components of the digital mining transformation process. These components are data, connectivity and decision-making. 3. Digital transformation provides a discussion on how it will be an essential part of the success of mining companies into the next decade. 4. Digital transformation identifies strategic areas in which higher education institutions can provide the required resources to support the mining industry.

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ENVIRONMENT

The value of tailings in a circular world BY GLEN COR DER, ASSOCIATE PROFESSOR, SUSTAINABLE MINER ALS INSTITUTE, UNIVER SIT Y OF QUEENSLAND

Over the past year, the management and storage of the many billions of tonnes of mine tailings generated annually has been subjected to intense scrutiny.

his scrutiny from the international community, triggered by the most recent major disaster at Brumadinho on 25 January 2019 and on the back of other catastrophic tailings dam breaches in recent years, has led to deep and serious reflection by the industry on current tailings management approaches. Looking back over the past 12 months, there have been several key events to initiate the necessary change in how industry deals with tailings. Since late March 2019, a global tailings review – co-convened by the International Council on Mining & Metals (ICMM), the UN Environment Programme and the Principles for Responsible Investment (PRI) – has been in the process of establishing an international standard on tailings storage facilities, which is to be published later in 2020. On 5 April 2019, the Investor Mining & Tailings Safety Initiative, governed through a Steering Committee chaired by the Church of England Pensions Board and the Swedish Council on Ethics for the AP Funds, requested specific disclosure on every individual tailings facility under the control of 683 listed extractives companies, within 45 days. Then, on the one-year anniversary of the Brumadinho disaster, the world’s first publicly accessible global database of mine tailings storage facilities – built by Norway-based GRID-Arendal as part of the Investor

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Mining & Tailings Safety Initiative, with support of the UN Environment Programme – was launched, and contained detailed information on more than 1900 tailings dams, categorised by location, company, dam type, height, volume and risk. Also in response to the global attention on tailings, the Global Research Consortium on Tailings was launched in 2019. This is aimed at bringing together researchers, practitioners, industry professionals, regulators, civil society and community representatives to develop transdisciplinary knowledge solutions to address the technical, social, environmental and economic risks of tailings. In Australia, there has been a recent focus on the process of progressive rehabilitation and mine closure across the sector. In November last year, the Queensland Government’s Progressive Rehabilitation and Closure Plan commenced, requiring all mining projects to have a standalone Progressive Rehabilitation and Closure Plan schedule containing milestones with completion dates and approval by Queensland’s environmental authority. Other states, such as New South Wales and Western Australia, are developing, or have implemented, similar requirements to deliver improved pathways to rehabilitation and mine closure.

AUSTRALIAN RESOURCES & INVESTMENT

This heightened attention to these areas across the sector creates the right environment for step change, and is a catalyst for developing innovative solutions that leave behind the ‘business as usual’ approaches, which are clearly not considered acceptable in the future by stakeholders and the broader society. Generally speaking, managing tailings and environmental aspects at a mine site is seen as a necessary cost of business. Maintaining good environmental performance, meeting regulatory and licensing requirements, and reducing risks are important outcomes of these costs. The idea of extracting value from mining waste, either waste rock, overburden or tailings, is not new. Turning mining waste streams into potential revenue centres not only changes the mindset to waste management, but also drives the creation of by-products and reduces – or ideally eliminates – the need for tailings storage facilities. Over the course of many years, researchers and industry have explored these opportunities, yet have been met with limited success at an operational level. In many cases, technical feasibility hasn’t been the stumbling block; more often than not it has been other factors, such as financial viability, liability issues, risk concerns or lack of drivers, that have changed approaches. It is these other factors that are now changing attitudes to alternative solutions to tailings and the process of mine closure. What was considered acceptable by both company standards and regulatory requirements is now quickly changing. The idea of developing a new mine without tailings facilities – once considered a pipedream – is now being seriously discussed, with researchers and industry working on ways to achieve this in the not-too-distant future. It follows that mines with smaller or no tailings facilities will be easier to rehabilitate and close at the end of their life. Generating by-products from tailings could go a substantial way to eliminating the need for tailings facilities. Examples of by-products from tailings include mine backfill and aggregate inroad construction; manganese tailings used in agroforestry, or for buildings and construction materials; clay-rich tailings for making bricks, floor tiles and cement; bauxite residue used as a soil amender or as a raw material for glass, ceramics and bricks; or hyperaccumulator plants for extracting metal.

Turning mining waste streams into potential revenue centres not only changes the mindset to waste management, but also drives the creation of byproducts and reduces – or ideally eliminates – the need for tailings storage facilities While all of these examples have proven technologies, their uptake has not been widespread. The drivers around the circular economy, which focus on designing out, re-using or minimising the generation of waste – coupled with the changing attitude towards tailings – could provide the impetus to change this. Historically, the mining sector is represented by linear, rather than circular, activities through its supply of resources to society. But being one of the world’s largest waste generators, the sector can adopt circular economy thinking to transform the industry’s treatment of tailings and mine waste. With the call for much greater innovation across the technical, social, environmental and economic dimensions of tailings, the timing could be just right for the industry to boost its contribution to the circular economy and, in doing so, harness both value from mining waste, and drastically diminish its risks and liabilities.

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FE UO RN EM AE RN T ITC L E E NAT VIR

VEGA sensor products have the measure of critical infrastructure Global leader in instrumentation technology, helping organisations prepare for the Internet of Things (IoT).

EGA Australia Managing Director John Leadbetter has a timely view on the benefits of sourcing highquality infrastructure equipment. ‘The cost of owning equipment over many years is always more important than the initial purchase price,’ he says. ‘Invest in quality and you get precision that lasts a long time.’ Quality and precision are hallmarks of VEGA Grieshaber KG, a world leader in level, switching and pressure instrumentation. The German company operates in more than 80 countries, and its sensors are used extensively across Australian industry. Councils, for example, use VEGA technology in their water plants to measure drinking supplies and in wastewater treatment plants to monitor sewage flows. Its sensors also measure the quality of cement and other raw materials used in infrastructure.

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VEGA also helps clients leverage the benefits of the IoT through state-of-the-art sensors. ‘VEGA is a pioneer of connected sensor technology,’ says Leadbetter. ‘Our equipment has been compatible with bluetooth apps since 2002 and continues to evolve.’ Although sensors have a critical role in infrastructure construction and maintenance, operators sometimes choose cheaper, inferior products, says Leadbetter. ‘They mistakenly think sensors are a commodity, so they choose the cheapest option. An $80 pressure transmitter might measure airflow okay, but it won’t work in a mining slurry with abrasive materials.’ Poor product support too often accompanies cheap sensors. ‘The customer realises that there is limited capability to tailor a sensor to an infrastructure project, or not enough support if something goes wrong,’ says

Leadbetter. ‘Or they realise that their supplier is not keeping up with latest sensor technologies because they underinvest in R&D.’ Organisations that cut corners with sensor technology can pay a heavy price. ‘Sensors are integral to infrastructure performance,’ says Leadbetter. ‘The data they capture tells a council how an asset is performing, whether there is enough bitumen being laid in a new road, or if the council is meeting its environmental obligations with wastewater outflows. Infrastructure assets last for decades, so it pays to invest in the best sensor technology.’ F O C U S O N I N N OVAT I O N

VEGA’s mission to develop innovative, trendsetting sensor technology has underpinned its approach over more than 60 years. Its longstanding goal is developing sensors that are easy to install

AUSTRALIAN RESOURCES & INVESTMENT

and operate, and offer maximum reliability and safety. VEGA employs 1480 staff worldwide, half of which work at its headquarters in Schiltach, in Germany. ‘Australian customers get the best of both worlds,’ says Leadbetter. ‘VEGA’s global network and extensive R&D capability puts it at the forefront of sensor technology. But we also have a very localised Australian approach.’ VEGA Australia has operated since 1987, selling most of its products directly to customers. The company works with local and state governments, water authorities, infrastructure developers and operators, and a wide range of infrastructure service providers. This approach has four main advantages. First, a deep understanding of Australian infrastructure requirements helps VEGA tailor its sensor technology. ‘We spend time understanding what our clients are trying to achieve and then create the best product solution for them,’ says Leadbetter. ‘Through VEGA’s R&D capability in Germany, we have enormous capacity for innovation and an ability to create bespoke solutions for clients.’ Second, VEGA Australia carries local inventory. ‘We have sensors ready to go and can bring in products from Germany if needed. That minimises the risk of an operation being held up because a supplier relies on imported sensors and cannot get them quickly.’ Local staff are the third advantage. ‘VEGA has an excellent team that knows our clients, and provides ongoing technical support and training,’ says Leadbetter. ‘Everything we do is about building longterm relationships and long-term solutions. There are no quick fixes.’ The fourth advantage is the breadth and depth of VEGA’s work in Australia. ‘Our sensors have been used for decades by government and across industries, and are found in many of Australia’s largest infrastructure assets,’ says Leadbetter. ‘This experience provides valuable insights on how to maximise benefits from sensor technology.’ INTER NET OF THINGS

Leadbetter is proud of VEGA Australia’s history and excited about its future. He believes that the IoT is transforming infrastructure maintenance and elevating the importance of high-quality sensors that capture data to inform software algorithms. ‘More than ever, infrastructure operators want to address problems before they occur,’ he says. ‘They want

connected devices online that provide information to inform decisions, help operators take a more proactive approach and minimise costs.’ Council workers, for example, can monitor pressure at a water plant using an app that connects to a VEGA sensor. ‘They can investigate a potential pressure issue through an app on their smartphone or tablet and upload that data to the cloud,’ says Leadbetter. ‘They don’t have to carry expensive specialist equipment or waste time trying to access sensor information.’ Leadbetter says that connected devices are a key focus of VEGA’s R&D operations. ‘We’re doing continuous work on how sensor technologies can harness the power of the IoT and help clients make timelier, better decisions with their infrastructure.’

Sensor technology is about more than operational efficiencies, says Leadbetter. ‘VEGA products help communities. Our sensors measure everything from a river’s tidal flows, to sea levels, to a dam’s water levels and drinking water quality. Our technology is used in tsunami warnings, and helps reduce the risks of major sewage spills and other environmental disasters. ‘I doubt the community realises how integral VEGA sensors are to our everyday way of life, and how important it is that governments and infrastructure companies invest in quality sensor technology from leading providers. Information is power, and sensors provide it.’ To learn more about VEGA Australia, visit www.vega.com.

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GOLD

DGO goes for gold DGO Gold has begun to assemble a portfolio of strategic holdings in ASX-listed companies, with existing or brownfields gold discoveries in Western Australia that demonstrate the potential to become major deposits. BY BAR RY FITZGER ALD

Exploration under cover at Pernatty Lagoon, South Australia

he strategy has unfolded in the past 12 months, and is in addition to DGO advancing its own portfolio of sediment-hosted exploration projects, including the exciting Black Flag gold discovery near Kalgoorlie. Executive Chairman Ed Eshuys says the brownfields investment strategy has led to DGO taking up a 9.7 per cent interest in Pilbara gold explorer De Grey Mining, and a 12.1 per cent interest in Leonora gold explorer NTM Gold. De Grey has an existing gold resource estimate of 1.7 million ounces, while the resource estimate at NTM’s Redcliffe project stands at 540,000 ounces. Both companies have enjoyed recent exploration success that points to major growth in their resource bases. Bruce Parncutt, a former mining analyst and investment banker who joined the DGO board in May 2018, explains that the brownfields strategy was a cost-effective way to gain leveraged exposure to gold. ‘I decided a few years ago that I wouldn’t mind exposure to gold for reasons of worrying about where the world is going,’ says Parncutt. Parncutt adds that data showed that the economics of brownfields exploration was attractive. ‘The cost of exploring for brownfields gold averages at about $25 per ounce, and

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junior explorers with a resource are valued at about $50 per ounce. By the time they get to the mining stage, they are valued at $250–400 per ounce.’ Eshuys says DGO screened 90 ASXlisted juniors for brownfields projects, with low finding costs per ounce and with resource growth potential from additional exploration. Ten companies made it onto a short list and, to date, DGO has been able to act on the De Grey and NTM opportunities. ‘Based on our knowledge, we can estimate the possible ounces to be discovered and at what price from open file and public domain information,’ Eshuys says. Meanwhile, DGO remains busy advancing its own portfolio of exploration projects. Recent drilling at the Black Flag project has been the cause of excitement, with an eight-metre intersection grading 2.2 grams per tonne gold from 60 metres (including one metre at 16.3 grams per tonne) reported in early November. It was a successful test for extensions to a previously announced hit of four metres at 7.5 grams per tonne gold in an area not drilled before because of the sand and lake cover. Eshuys says the mineralisation is within interpreted extensions of the structural corridor extending from Horizon Minerals’ Teal Well mine, through First Au’s Gimlet gold resource and into DGO’s tenements.

‘The results continue to demonstrate the potential for high-grade gold mineralisation along the extensions of the Teal–Gimlet structures,’ Eshuys says. DGO is also advancing exploration projects in the Murchison and Pilbara regions of Western Australia, and a copper–gold project in South Australia’s Stuart Shelf.

High-grade visible gold from NTM Gold’s Hub prospect

GOLD

Major gateways are opening Gateway Mining has taken a major step in its strategy to develop a large-scale gold operation at its Gidgee project near Sandstone in Western Australia, with the recent declaration of a maiden gold resource estimate. BY BAR RY FITZGER ALD

he resource estimate covers the Whistler and Montague deposits at the 100 per cent owned project, and stands at 3.42 million tonnes grading 2.2 grams of gold per tonne for 240,000 ounces of contained gold. Gateway Managing Director Peter Langworthy says that the maiden resource estimate was very much the start of the new era at Gidgee, which has a history of gold production from a handful of shallow open cuts in the 1980s and 1990s. ‘The important thing is that we are not going to turn inwards and look at incrementally increasing the size of the deposits and doing mining studies on them,’ Langworthy says. ‘We are only part of the way there. What we have to do now is focus on more exploration because we want at least three times what we have now to meet our ambitions. ‘We want to make sure that we

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have a very strong base to have a sustainable (standalone) gold operation,’ Langworthy says. This is why Gateway recently raised $3.46 million to help fund an aggressive drilling program at the Gidgee project, which covers a consolidated tenement position on the southern extension of the Gum Creek Greenstone Belt. The 16,000-metre program will involve extensional drilling at Whistler and Montague, where the mineralisation at both remains open in all directions. Gateway will also be testing new targets, including the recently set exploration target for between 88,000 and 370,000 ounces of gold at the Achilles prospect, about 800 metres south of Montague. Underpinning Gateway’s success at Gidgee, since it became the company’s major focus in April 2018, is a new geological interpretation that exploration should focus on shear-hosted gold,

sitting on the margin of the Montague granodiorite intrusion. It makes the hunt at Gidgee analogous to the multimillion-ounce gold systems mined at Granny Smith (Gold Fields) and at Tarmoola–King of the Hills (Red 5), elsewhere in Western Australia. ‘It’s given me the view that we are on the hunt for big deposits,’ Langworthy says. The newly set exploration target at Achilles reflects the new exploration strategy. ‘Based on what we have learnt, particularly at Montague, we can now apply that down at Achilles, which as a defined prospect is quite arbitrary because there is actually no drilling between Montague and the top end of Achilles,’ Langworthy says. ‘And that still only represents a small part of the wider Gidgee project, which remains wide open in terms of its discovery potential across the Montague granodiorite,’ he says.

GOLD

GOLD’S ROLE IN THE SUSTAINABLE FUTURE BY ANDR EW NAYLOR, DIR ECTOR, CENTR AL BANKS AND PUBLIC POLICY, WOR LD GOLD COUNCIL

Australia is at the forefront of the sustainability agenda.

tudies estimate that as much as 55 per cent of professionally managed assets in Australia are subject to some form of environmental, social and governance (ESG) screening. The Global Sustainable Investment Alliance has calculated that the assets under management (AUM) of sustainable investments in Australia now stands at more than $734 billion. Globally, the Alliance estimates that assets managed under sustainable investment strategies reached US$30.7 trillion in 2018 – a 34 per cent increase from 2016. The growth of assets managed to an active ESG agenda is only likely to grow. Recent research published by the Royal Bank of Canada indicated that Asia and Oceania will be responsible for much of this growth. This response from investors is in line with the increasing attention on climate change, and broader ESG issues from policymakers and consumers. The Intergovernmental Panel on Climate Change’s (IPCC’s) special report, published last year, stressed the need for immediate action to limit the rise in global temperatures. Governments around the world are developing strategies to tackle climate change, including in Australia, where the government announced the Climate Solutions Package earlier this year – a strategy to reduce emissions by 26 per cent to 28 per cent below 2005 levels by 2030. Gold and the gold industry have an important role to play in responding to climate change. The World Gold Council recently released the report, ‘Gold and Climate Change: Current and Future Impacts’, which looks at three areas. Firstly, the emissions profile of the gold industry. Secondly, the pathway to net zero, critical if we are going to meet the objectives of the 2015 Paris Climate Accord. And thirdly, the role that gold can play as a climate risk mitigation asset in investors’ portfolios. The analysis calculates the carbon footprint of the gold industry and provides recommendations for further reducing the industry’s carbon footprint. One key recommendation is electrification combined with switching to renewable energy sources and efficient energy storage. While challenging, we believe that it is credible to believe that the gold mining sector can reach net zero by 2050. Gold producers are already taking action to reduce their carbon footprint, with mining operations becoming increasingly efficient

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in terms of energy and water consumption. A number of mines are already fully electrified and more will be, and we have seen largescale switches to renewables, particularly solar. Furthermore, all companies are focusing on increasing energy efficiency, an important part of the overall drive to reduce emissions. Gold itself is also playing a role in the global transition to a lowcarbon future through its application in environmentally friendly technologies. Gold nanostructured catalysts may significantly improve the efficacy of carbon capture and the use of technology, and scientists are looking at the potential role of gold in improving how the sun’s energy can be captured and utilised, and how gold might drive the next generation of fuel cells. Furthermore, in contrast to many other mainstream asset classes, gold as an investment is likely to be more resilient and less volatile as climate change impacts the global economy. As such, we believe that gold has an important role to play as a climate-risk mitigating asset and should be a core part of investors’ portfolios. Physical gold is an attractive asset class for investors considering the climate change impact of an overall investment portfolio. The emissions impact of an investment in physical gold diminishes over time – once the gold is held in a vault, the ongoing emissions contribution is relatively small. Climate change is just one important aspect around improving sustainability performance. In September, the World Gold Council, which represents the world’s most forward-thinking gold miners, released the Responsible Gold Mining Principles (RGMPs). These principles are an overarching framework that set out clear expectations for consumers, investors and the downstream gold supply chain as to what constitutes responsible gold mining. They draw on the wide number of instruments and codes that have been created over the last 20 years, including those developed by the United Nations, the Organisation for Economic Co-operation and Development (OECD) and the multilateral banks. These codes have been hugely important in helping to codify expectations around aspects of responsible gold mining, and they continue to drive ongoing improvement. But they generally only cover aspects of responsible mining. It is more

AUSTRALIAN RESOURCES & INVESTMENT

important than ever – for investors, employees and communities – to understand the complete picture of what constitutes responsible gold mining. The RGMPs are a comprehensive framework covering more than 50 sustainability issues. These include: environmental issues, such as environmental stewardship, tailings management, mine decommissioning and biodiversity; aspects of social performance, such as safety, human rights, community consent, labour rights and gender diversity; and, in relation to governance, anti-corruption, managing impacts and supply chain issues. Many of these issues are common to all mining operations, but a few are particularly relevant to gold – including cyanide management, mercury, and engagement with artisanal and small-scale gold miners. Climate change, which is at the top of the environmental agenda for many investors, is explicitly addressed, with specific requirements for both energy efficiency and reducing carbon emissions. The adoption of the RGMPs by World Gold Council member companies reflects their commitment to responsible mining, accountability and transparency. The RGMPs are, however, applicable to all gold mining companies, and we hope that in addition to our members, the industry more broadly will adopt them. The framework is ambitious and demanding, so we have set out a three-year rollout time line, at the end of which we would expect all implementing companies to achieve full conformance. Companies will have to seek external assurance on their public disclosure of conformance, with assurance undertaken at both a corporate and mine-site level following a risk-based process. Investors and customers are – quite rightly – asking more questions about how their gold has been sourced. We have been working with the London Bullion Market Association (LBMA), the leading accreditor for gold refineries globally, to provide further confidence that the gold bought by these investors and consumers has been responsibly mined and sourced. Earlier this year, the LBMA

updated its Responsible Gold Guidance to recognise the growing importance of ESG issues. The RGMPs are designed to support refiners in understanding what practices and performance they should be seeking from their upstream suppliers. We believe that the RGMPs are transformational for the gold industry. We are very appreciative of all the individuals and institutions that provided input during the consultation, which has undeniably improved the final framework. We hope that we have also demonstrated that the gold industry is serious about working with stakeholders to deliver sustainable gold mining. For there is no question that if gold mining can be undertaken responsibly – with due care for ESG considerations – it has the potential to drive socio-economic development in communities and countries around the globe.

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GOLD

Big-time potential for Resolution There are exciting times ahead for ASX-listed Resolution Minerals as it sets about drill testing the big-time potential of its 64North project in Alaska’s Tintina gold province. BY BARRY FITZGERALD

he project area lies next to Northern Star’s 300,000-ounce-per-year, high-grade Pogo gold mine, 120 kilometres from Fairbanks. The Aurora Creek prospect, within the 64North project area, is the focus of Resolution’s (formerly Northern Cobalt) initial drill program. It is immediately adjacent to the Goodpaster gold discovery, made by Northern Star in the September quarter of 2019. Northern Star considers Goodpaster as the ‘continuation of the main Pogo mineralisation’. Its discovery hole returned an impressive four metres grading 67.5 grams per tonne. Follow-up results by Northern Star have included 1.4 metres at 19.3 grams per tonne, and 5.2 metres at 15.7 grams per tonne. Resolution Managing Director Duncan Chessell says the Goodpaster discovery was within 450 metres of Resolution’s tenement boundary, demonstrating the highly prospective nature of the region. ‘We are up next to a world-class

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operating gold mine, and we are looking for a look-alike deposit,’ Chessell says. ‘We think we have analogous geophysics, lithology and geochemistry. So we are looking for the next Pogo.’ Resolution recently raised $4.5 million from a share placement at 5 cents each to fund its 2020 drilling program. ‘It is a bit of an understatement to say that we expect to see a fairly significant re-rate if we are able to hit Pogo-style mineralisation on our claims,’ Chessell says. He says the 64North project came with a unique logistical advantage compared with other Alaskan projects – its ability to access drilling sites year round using the Pogo mine road, rather than having to rely on helicopter-assisted exploration. ‘At most Alaskan projects, you wouldn’t be able to drill in winter. We can with this one because of the road infrastructure. ‘Obviously the whole project area is not serviced by road, but certainly the most highly prospective areas adjacent to the Pogo mine are,’ Chessell says.

‘It is very fortuitous for us. The access by road was a big consideration for us in terms of costs and of news flow from the ability to explore year round.’ Resolution’s entry into the 64North project was via a deal with the Canadian-listed Millrock Resources Inc., where Resolution can earn up to an 80 per cent interest. Early planning for the partner’s initial exploration program envisaged 7500 metres of diamond core drilling, field mapping, geochemical sampling, and geophysical surveys to unlock the structural controls of the Aurora Creek prospect. Work on generating regional targets – in what remains a lightly explored area despite the presence of the Pogo mine – is also planned. Northern Star, Australia’s secondbiggest listed gold producer behind Newcrest, acquired Pogo from Sumitomo in August 2018 for US$260 million. Pogo has a gold endowment of 10 million ounces (past production and reserves).

"You rarely get an opportunity like the 64North Project in a junior exploration stock.” Resolution Mineral's Managing Director Duncan Chessell

INSPECTING THE 64NORTH PROJECT WITH NORTHERN STAR'S POGO GOLD MINE IN THE THE BACKGROUND BACKGROUND IN

Resolution Minerals (ASX: RML) has recently agreed to acquire up to 80% of the 64North Project in Alaska. The project surrounds Northern Star’s (ASX: NST) Pogo Mine which has a total endowment of 10 million ounces of gold. The project boundary is only 45om from NST's recent Goodpaster Gold Discovery which is open in all directions. With all year road access the first drilling program begins at the high priority Aurora targets in March 2020.

WANT TO KNOW MORE? GET IN TOUCH. Email: info@resolutionminerals.com Website: www.resolutionminerals.com

COPPER

Stavely Minerals’ big potential prize Stavely Minerals believes that it has only scratched the surface at its namesake project in Western Victoria, the scene of last September’s spectacular copper–gold discovery at the Thursday’s Gossan prospect. BY BAR RY FITZGER ALD

hares in Stavely were set alight when the first hole in a new shallow-focused drilling program at Thursday’s Gossan – immediately southeast of earlier deep drilling sites – assayed up to 40 per cent copper. The spectacular hit was made in a diamond drillhole that specifically targeted shallow and structurally controlled mineralisation within the Ultramafic Contact Fault (UCF). The drillhole returned a 32-metre intersection, which assayed 5.88 per cent copper, one gram per tonne of gold and 58 grams per tonne of silver from a 62-metre downhole, including 12 metres at 14.3 per cent copper, 2.26 grams per tonne of gold and 145 grams per tonne of silver; and two metres at 40 per cent copper, three grams per tonne of gold and 517 grams per tonne of silver. Stavely now has four drilling rigs whirring at the project, about 25 kilometres to the west of Melbourne and near the town of Glenthompson. Last September’s spectacular result, and assays from subsequent drilling,

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followed on from early drilling at the property, which has been the company’s prime focus since listing on the ASX in May 2014. Executive Chairman and Managing Director Chris Cairns told Australian Resources & Investment that the company has now hit mineralisation on three structures: the UCF, the North-South structure, and another called the Copper Lode Splay. ‘The work we have been doing near the surface on the UCF is at a depth of between zero and 200 metres. But we have also intersected mineralisation of the North-South structure at about an 800-metre depth. ‘So, the challenge for us in the year ahead is that while we are doing the resources drill-out on the shallow mineralisation, we extend that mineralisation below the low-angle structure on the UCF,’ says Cairns. ‘On what we are calling the Copper Lode Splay, we have intersected mineralisation between 500 metres and 600 metres below surface. So, clearly,

the challenge in the next 12 months is to test for that mineralisation closer to surface. And there is no reason it shouldn’t continue to a depth of one kilometre or more, as well,’ tells Cairns. ‘We are very excited because we think we have only scratched the surface in terms of the potential, given we have only been working on the very shallowest portions of three demonstrably mineralised structures.’ He adds that the big-time potential for a bulk-tonnage porphyry copper– gold system at depth below the known mineralised structures remains as a potential prize. ‘It’s a big potential prize in that those structures must all be tapping into a metal source, and we are convinced that there is a nice porphyry driving this system,’ says Cairns. ‘So that leaves a nice target down the track as we first flesh out the structurally controlled mineralisation, which should give us a vector to where the deep porphyry source is, and we will have a crack at that when we are ready.’

FINDING THE COPPER AUSTRALIA NEEDS FOR A LOW-CARBON ECONOMY

www.stavely.com.au

COPPER

Clean copper concentrates for the world The generation of clean copper concentrates has been a longstanding requirement for the minerals industry to increase product quality and maximise revenue. BY NIGEL J COOK, DIR ECTOR, ARC R ESEARCH HUB FOR AUSTR ALIAN COPPER-UR ANIUM, THE UNIVER SIT Y OF ADELAIDE

lthough different options exist to reduce the concentrations of the more common penalty elements found in copper ores, such as arsenic, antimony and bismuth, ore deposits containing uranium represent an additional challenge in that the short to medium half-life daughter radioisotopes of uranium decay may be difficult to remove completely. The Research Hub for Australian Copper-Uranium was established by the Australian Research Council in 2015 as part of the Commonwealth Government–funded Industry Transformation scheme to address this substantial technological challenge. A team set out to resolve the longstanding issue by developing innovative approaches to understand why removal of radionuclides has proven so intractable in the past; to develop new capabilities for visualising radionuclide distributions and

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for measuring radionuclide activities at different scales; and not least of all, to design and optimise new, game-changing strategies for their removal from copper concentrates. As a first step, painstaking mineralogical research on selected ores and concentrates – mineral by mineral – and the collection of empirical data, backed up by laboratory experiments, allowed us to understand where the problem lay. This successful diagnosis has required development and application of new microanalytical techniques that can achieve both submicron-scale spatial resolution and ultra-trace level sensitivity. Mass-sensitive isotope mapping by nanoscale secondary ion mass spectrometry allowed identification of the main radionuclide hosts, but has also demonstrated the critical importance of grain surfaces, mineral– mineral boundaries, and physical structures, such as fractures and

AUSTRALIAN RESOURCES & INVESTMENT

ABOUT THE HUB

The Hub is a consortium composed of four Australian Universities (The University of Adelaide, Monash University, The University of Queensland and Flinders University), industry (BHP Olympic Dam) and the Department for Energy and Mining, Government of South Australia. The research team draws on diverse expertise and places emphasis on cross-disciplinary collaboration among mineralogists, geochemists, metallurgists, physicists and chemists.

pores within copper sulphides as traps for radionuclide-bearing nanoparticles. Mapping has also revealed how radionuclide distributions can evolve – and, importantly, how individual species can be separated from one another during mineral processing – as a function of their fundamental geochemical behaviours, different dissolution chemistry, and mobilities. The optimisation of alphaparticle autoradiography techniques to pinpoint radionuclide hosts within polished grain mounts heralds the introduction of a rapid, easy-to-use analytical method for micron-scale radionuclide detection. This work has also confirmed the critical importance of radionuclide adsorption into, or attachment onto, mineral grains during processing. Collectively, this information – and the deep understanding of the mechanisms that underpin radionuclide behaviour in sulphide copper ores and concentrates – represents a body of

essential knowledge that can guide the metallurgist in the quest for innovative ways to reduce radionuclide activities in final concentrates, without aggravating loss-of-value commodities. Results give industry a series of potential options for the future, which can be tailored to specific ores based on need, ore grade, feasibility and cost-effectiveness. The multistage hydrometallurgical treatments currently under appraisal are proving successful compared to strategies based on physical separation alone, which are largely ineffective, as would be predicted from the mineralogical diagnosis. To accurately track activities on an industrial scale, Hub researchers have also developed and optimised sensing devices to detect and accurately measure minute concentrations of radionuclides in real time, and are currently engineering robust tools for routine monitoring. These include fibre-based liquid sensors capable of operation in harsh, chemically challenging environments, such as flotation cells and leach tanks. Although the Hub has been designed to target game-changing solutions to technological problems central to production of copper concentrates, the scientific outcomes and engineering innovations of the Hub are expected to find far-reaching applications across the minerals industry where comparable issues exist or may exist in the future if the permitted radioactivity levels in concentrates are reduced. Beyond mineral processing, legacies of the Copper Uranium Hub will include quantitative radionuclide analysis, distribution mapping and mechanisms for reduction or elimination of activities in the natural and anthropogenic environments critical to multiple related industries, such as the storage and monitoring of mining waste, the nuclear fuel industry, prevention of boiler and pipeline scale, nuclear medicine, and forensic science. The Hub will help to give the Australian mineral industry a technological advantage. The research carried out has also been a catalyst for the establishment of the new Centre for Radiation Research, Education and Innovation (CRREI) at the University of Adelaide. CRREI will offer radionuclide analysis and the opportunity for new research collaborations, and will be a nexus for education and training for the wider community. Nigel Cook is a mineralogist–geologist with research interests in complex ore deposits, sulphide mineralogy, geochemistry, mineral processing and geometallurgy. He obtained his PhD from the University of London, United Kingdom, in 1988 and joined The University of Adelaide in 2009. He is Director of the ARC Research Hub for Australian Copper-Uranium and Director of the Industry Consortium ‘Unlocking Complex Resources through Lean Processing’. Cook is past President of the International Association on the Genesis of Ore Deposits (IAGOD) and was Editor in Chief of Ore Geology Reviews between 2003 and 2011. For further information, email nigel.cook@adelaide.edu.au.

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LITHIUM

LITHIUM CHARGE BY ANTHONY FENSOM

The lithium decade has begun.

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AUSTRALIAN RESOURCES & INVESTMENT

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LITHIUM

his bullish statement from lithium analysts comes amid tougher times for Australia, the world’s largest hard rock exporter, as the industry digests a ramp-up in supply. Yet, with recent multimillion-dollar investments by automakers, and signs of a pick-up in China and elsewhere, the new decade is showing greater promise for the clean energy metal. While the start of 2020 saw improved investor sentiment, the news from Western Australia was less encouraging. An industry that grew from one mine to seven in just a couple of years had suddenly slammed on the brakes amid falling prices. Galaxy Resources ceased operations at its Mt Cattlin mine in mid December, with Mineral Resources putting its Wodgina operation on care and maintenance a month earlier. Pilbara Minerals reportedly had ‘virtually ceased’ mining at its Pilgangoora operation, while Alita Resources, operator of the Bald Hills mine, entered into receivership in late December. Bucking the trend, Altura Mining announced in January 2020 that it had shipped a total of 170,000 tonnes of lithium concentrate since commencing production at its Pilgangoora mine in July 2018. Altura’s Managing Director, James Brown, says the company’s latest record shipment demonstrated the strength of its partner relationships and consistent supply. ‘We have offtake commitments in place for our entire production capacity of 220,000 tonnes, we continue to produce at close to nameplate production rates, and our cost structure places Altura at the lower end of hard rock producers,’ he says. CONFIDENCE BOOST Western Australia’s lithium miners received a confidence boost in January, when BMW Group announced a five-year, €540-million (A$877-million) order to acquire lithium hydroxide from Ganfeng Lithium’s Australian mines. The German automaker plans to double electric vehicle (EV) sales between 2019 and 2021, aiming to have 25 electrified models in its line-up by 2023. The lithium is expected to be supplied by Altura and Pilbara Minerals’ mines. Adding to the buoyant start to the new year was a reassuring statement from Beijing. The Chinese government said that it would not be cutting subsidies for new energy vehicles (NEVs) any further in July 2020, having introduced such subsidies in 2009. Chinese NEV sales reached 163,000 units in December 2019, almost double the November figure, bringing the total sales for calendar 2019 to 1.2 million units. This is compared to European sales of an estimated 579,000 units, and an estimated 337,000 in the United States. The positive data, together with the US–China phase-one trade deal, helped spark a rally in EV-related stocks, including US maker Tesla. Earlier, a court decision in late December blocking SQM’s planned expansion in Chile, due to concerns over its water usage, helped to alleviate oversupply concerns amid growing environmental pressures on lithium brine producers in South America.

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P R I C E R E C OV E R Y – W I L L T H E R A L LY L A S T ? ‘While we were not expecting a price recovery until late 2021 at the earliest, now that supply restraint has started to be seen, we expect a price recovery later in the second half of 2020,’ Fastmarkets analyst William Adams told Investing News. In its December 2019 Resources and Energy Quarterly, the Australian Government’s Office of the Chief Economist predicted that prices would turn upwards ‘in late 2021 or early 2022’ as consumption catches up with supply. Australia’s lithium production is seen rising to 289,000 tonnes lithium carbonate equivalent (LCE) in fiscal 2021 from 249,000 tonnes in fiscal 2019. Global consumption is expected to grow by more than 20 per cent per year to reach 485,000 tonnes LCE by 2021, up from 315,000 tonnes in 2019, ‘based on growing uptake of EVs and improvements in battery capacity’. Andrew Miller, Head of Price Assessment at Benchmark Minerals Intelligence, has predicted that the lithium market could face a supply deficit in as early as 2022. Significantly, 115 lithium-ion battery megafactories were in the pipeline as of December 2019 – a significant increase on the 63 EV plants a year earlier – driven by a large increase in Europe as European automakers ramp-up EV output.

AUSTRALIAN RESOURCES & INVESTMENT

N E W P R OJ E C T S For Australian companies with new projects, the predicted demand growth is extremely positive. ‘Analysts expect demand to rise by 500 per cent over the next five years, and that is going to require new projects,’ says Lake Resources Managing Director Steve Promnitz. The Argentina-focused company is eyeing a new direct extraction method developed in Silicon Valley to revolutionise the lithium brine industry. In January, Lake Resources announced groundbreaking results confirming that battery-grade lithium carbonate with 99.9 per cent purity had been produced by its US partner, Lilac Solutions. The company now plans to dispatch samples to potential offtake partners as it works to develop its flagship Kachi project. For an industry under increasing pressure over water usage, the technology offers a potential solution since no evaporation ponds are required, with brine reinjected into the aquifer once the lithium is removed. ‘Supply chain sustainability has become a key focus in recent times, and this is potentially an enormous boost for the whole lithium brine industry,’ Promnitz says. Another Australian company eyeing international success is Brisbane-based Sayona Mining.

The company plans on becoming a major miner in the Canadian province of Quebec, pending a successful bid for the North American Lithium (NAL) mine. Sayona plans to supply NAL with spodumene ore from its nearby Authier lithium project to achieve a significant improvement in plant performance and economics. The company’s plans for its flagship Authier project have also been boosted, following the signing of an agreement with Abitibiwinni First Nation in December and the lodgement of its environmental impact statement for the project in January. Managing Director Brett Lynch says the company aims to transform from an explorer to world-scale producer ‘within 18 months’, supporting Quebec’s strategy of developing a complete lithium value chain. ‘The timing is perfect for Sayona and Quebec, with our focus on North American battery markets, which are seeking a high-quality, reliable and low-cost supply of this increasingly strategic mineral,’ he says. ‘Lithium is the metal of the 21st century, helping to facilitate the clean energy revolution in transport and electricity. Quebec understands this, and together with Australia’s mining know-how, the potential is enormous.’ With the world rapidly switching to clean energy, Australia’s lithium miners appear to be in the right place at the right time, at the dawn of the new decade.

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MINERAL SANDS

SIZZLING SILICA BY ANTHONY FENSOM

Rising demand and limited supply has given Australia’s emerging silica miners plenty of incentive to launch new projects. And with Asia’s solar panel and other industries demanding more of the product, the outlook for the little-known industry is looking increasingly bright.

hile mostly used in construction, silica sand is also used in high-tech applications, including solar panels and mobile phone screens. Prices vary, ranging from US$50 per tonne, to up to US$12,000 for the highest-quality product. It is the latter market that Brisbane-based Diatreme Resources is targeting as it develops its Galalar silica project in North Queensland, together with its partner, traditional owners Hopevale Congress Aboriginal Corporation. The project is located north of Cairns, near Cape Flattery – the world’s largest operating silica sand mine that ships around two million tonnes per year to Asian markets. Diatreme’s scoping study, announced in September 2019, predicted that its Galalar project could be highly profitable, with an estimated pre-tax nominal net present value (NPV) of $231 million, an internal rate of return of 150 per cent and estimated capital payback within eight months. Importantly for the local community, a new mine could generate 30 to 40 jobs in the construction phase and around 60 in production, with a projected mine life of 15 years. In December, Diatreme lodged a mining lease application for the project, encompassing an area of 523 hectares, including all of its identified mineral resource. Testwork conducted in China has shown that the project could produce a high-purity, ultra-low-iron silica product suitable for specialist uses, including ultra-thin electronics, and computer and mobile phone screens, which would attract premium prices. Already, the company has signed non-binding offtake agreements with private Chinese groups for the supply of up to 500,000 tonnes per annum of photovoltaic-grade silica sand. Investor interest has been demonstrated with a successful $3.6-million placement in November 2019, which included a new cornerstone investor, Ilwella Pty Ltd, representing the private interests of noted resources investor Brian Flannery. Diatreme’s CEO, Neil McIntyre, says that the investor attention and local support would be crucial in advancing the project’s development.

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‘Galalar has quickly picked up speed, and with upcoming milestones, including an environmental impact statement, it is set for further advances in 2020. We aim to achieve rapid development to capitalise on the strength of Asian demand, working in partnership with the traditional owners,’ McIntyre says. Importantly, the project has the potential to help reduce greenhouse gas emissions in China, since the silica sand product is expected to supply China’s fast-growing solar panel industry. ‘Decarbonisation is a global phenomenon, and it’s important that the mining industry plays its part. We’re determined to ensure that Galalar is “carbon neutral” from mining through to the final product,’ McIntyre says. Should all go to plan, the company aims to secure the necessary approvals and finance this year, with production targeted for the second quarter of 2021. Other Australian miners are also riding silica’s wave with projects in Queensland and Western Australia. In January, Metallica Minerals announced that a sampling program at its silica sands project near Cape Flattery had confirmed the presence of high-purity silica. The Brisbane-based company said that the majority of eight auger holes had returned samples exceeding 99 per cent silica oxide ‘comparable with known deposits in the region’. Metallica’s interim CEO, Scott Waddell, says that the company is encouraged by the results, with the project having the added benefit of being located adjacent to the Cape Flattery port. Meanwhile in Western Australia, Perth-based VRX Silica is advancing a number of new silica projects towards production. In August 2019, the company announced a bankable feasibility study for its Arrowsmith North silica sand project, located 270 kilometres north of Perth, reporting an ungeared NPV of $242 million based on a 25-year mine life, with a payback period of 2.4 years. A month later, VRX Silica reported an ungeared NPV of $147 million in a bankable feasibility study for its nearby Arrowsmith Central project, based on a 25-year mine life.

AUSTRALIAN RESOURCES & INVESTMENT

Exploration drilling at Diatreme’s Galalar silica project, North Queensland

VRX Silica notes that increasing construction and manufacturing output worldwide will drive growth in silica sand–consuming industries, including glass, foundry and building And in October 2019, the company announced a bankable feasibility study for its Muchea silica sand project, located 50 kilometres north of Perth, with an ungeared NPV of $338 million based on a 25-year mine life. S U P P LY S H O R TAG E VRX Silica notes that increasing construction and manufacturing output worldwide will drive growth in silica sand–consuming industries, including glass, foundry and building. Significant growth is also expected in the hydraulic fracturing market as

horizontal drilling for shale oil and gas resources expands, largely in North America. ‘The Asia-Pacific region is expected to remain the largest regional consumer of industrial sand through 2025, supported by the dominant Chinese market. The country’s container glass industry will drive further silica sand sales, supported by rising production of glass bottles,’ the company comments. VRX Silica expects global consumption of industrial silica sand to climb by 3.2 per cent per year through to 2022, with growth in the Asia-Pacific region of 5–6 per cent per year. Growth in glass demand is also expected to continue rising at around five per cent per annum. Meanwhile, Asia’s fast-growing solar panel market is seen expanding to US$48.2 billion (A$71 billion) by 2025, up from just US$3.3 billion in 2016, according to Bizwit Research & Consulting. With the growing push for renewable technologies, such as solar panels, Asia’s market could reach 50 billion panels within the next decade, up from its current 3.5 billion. China’s addition of silica sand to its list of ‘strategic minerals’ reflects a growing supply shortage, with reports that a ‘sand mafia’ has emerged in some developing countries due to its scarcity. Prices have risen as a result, with the cost of the raw materials to make glass climbing by around 5–10 per cent per year. ‘With developed nations increasingly seeking sustainable supply chains, Australia is in an excellent position to become the preferred supplier globally due to its environmental credentials,’ McIntyre adds. For an industry that has long attracted little attention, the global spotlight is now shining on Australia’s next wave of silica sand miners.

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P O TA S H

Potassium – an integral part for sustainable crop production BY DR PATR ICIA IM AS, INTER NATIONAL POTASH INSTITUTE

here are 17 elements that are essential to plants for nutrition; to thrive, every plant needs these essential nutrients. These nutrients are the building blocks of plant life. Without them, farmland is barren, and farmers must therefore ensure that their crops get enough of them. Potassium, along with nitrogen and phosphorus, is one of the three essential plant macronutrients, and is taken up by crops from soils in relatively large amounts and required in large proportions by the growing plant. Potassium increases yield and quality of agricultural produce, and enhances the ability of plants to resist diseases, insect attacks, cold and drought stresses, and other adverse conditions. It helps in the development of a strong and healthy root system, and increases the efficiency of the uptake and use of nitrogen and other nutrients. In addition, potassium has an important role in livestock nutrition. Potassium in fruits and agricultural produce is taken away from the farm’s ecosystem at harvest, thus high quantities of potassium are removed from the soil. The higher the yields, the higher the uptake of potassium. The result: the potassium levels tend to decline over time, and soils can become deficient in potassium. Without any replenishment of the potassium natural reserves, yields and sustainability cannot be maintained in the long term.

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F E R T I L I S E R S A N D S U S TA I N A B L E AG R I C U LT U R A L P R O D U C T I O N Global food security is especially of concern looking forward as world population is expected to increase by about 35 per cent over the next 40 years. Agricultural output will need to significantly increase to feed the growing population. As available land for expanding agriculture is scarce, increased food production will come only from increasing productivity per hectare, which will require optimum and balanced fertiliser use. Boosting crop yields can be achieved by the implementation of balanced fertilisation practices, which will also ensure the preservation of the soil fertility and the sustainability of the farm systems. Indiscriminate use of fertilisers, however, has led to environmental implications, especially concerning the overuse of nitrogen and its loss from the soil through leaching and volatilisation. With proper nutrient management – i.e., by applying potassium in a balanced proportion with nitrogen, the efficiency of nitrogen use increases and, therefore, the impacts of pollution can be significantly reduced. P O TA S S I U M R E P L E N I S H M E N T I S C R U C I A L Many soils worldwide are poor in potassium as they have consistently been depleted of their native potassium due to

AUSTRALIAN RESOURCES & INVESTMENT

Effect of potassium (K) on grain filling and size of maize cobs at a farmer’s demonstration plot in Nashik district, Maharashtra, India. Image © Potash for Life, October 2014

Effect of potassium (K) on size of carrots at a farmer’s demonstration plot in Budgam, Kashmir, India. Image © Potash for Life, July 2014

continuous cultivation. This has resulted in the soil becoming a poor food crop producer. Plants get the potassium nutrient from the soil, but natural processes don’t supply enough to sustain crop production. Mineral fertilisers and organic manures replenish nutrients in the soil to ensure that plants grow to their full potential. This results in crops that contribute enough mineral elements for adequate animal and human nutrition, and improve global food security. Inefficient nutrient use is one of the most significant limiting factors for increasing crop yields. In many countries, there is an overuse of nitrogen fertiliser, while potassium application is below recommended doses. This imbalanced use of fertilisers (extreme nitrogen to potassium ratio) not only leads to lower yields and quality of crops, but also proves to be uneconomic and environmentally unsafe – intensive cropping systems remove large quantities of nutrients from the soil. Having mined the soil of potassium, regular applications of potassium fertiliser have become necessary to produce optimum crop yields and to maintain the soil fertility.

water regulations, reflecting the benign nature of this element in the environment and to human health. Potassium is not lost to the atmosphere, as can occur with some nitrogen fertilisers under certain soil and environmental conditions. Potassium fertilisers do not contain any of the heavy metals that are considered toxic and environmentally hazardous. Potassium fertilisers are not referred to as potential hazards in relation to radioactive elements. The environmental impact of the potash industry is quite small, so it is not mentioned in the most recent publications of the United Nations as an environmental polluting industry.

P O TA S S I U M I M P R OV E S N I T R O G E N U S E E F F I C I E N C Y Potassium fertiliser applied to the crop allows better nitrogen uptake and usage (improved nitrogen use). Increase in nitrogen use efficiency due to potassium application means more utilisation of nitrogen by the crop and less nitrogen polluting the environment. P O TA S S I U M A N D E N V I R O N M E N TA L A S P E C T S To ensure healthy and nutritious plant growth, adequate supplies of potassium must be maintained in the soil by judicious use of fertilisers and manures. There are no environmental risks associated with this nutrient. In fact, potassium makes a positive contribution to the environment by balancing other nutrients, especially nitrogen, to make sure they are taken up and used by plants efficiently, avoiding losses that might be harmful. Potassium helps plants reach optimum productivity. Highyielding grain crops leave more residues on the land. These residues cover the soil and protect it from the forces of erosion. Potassium is not associated with any environmental or health concerns. Potassium has no known deleterious effect on the quality of natural drinking waters, and it does not induce eutrophication in rivers and lakes. Potassium ions leached into deeper soil layers and finally reaching the aquifers presents no ecological threat, and potassium in drinking water and/or food is no hazard for human health, provided renal function is normal. A diet high in potassium has no harmful effect and is recommended for people suffering from hypertension. There are no limits for potassium in drinking

P O TA S H F O R O R G A N I C AG R I C U LT U R E Potassium chloride from Israel is originated in the Dead Sea, rich in available minerals and is Israel’s greatest natural resource. This natural product is used by Israeli organic farmers, as it is certified both by the Plant Protection and Inspection Services (PPIS), Ministry of Agriculture, Israel and Agrior Ltd (organic inspection and certification from the Israeli Bio-Organic Agriculture Association), complying with the standards of the International Federation of Organic Agriculture Movements and EEC regulation number 2092/91. It is important to stress the uniqueness of the potassium chloride from the Dead Sea, as opposed to underground mined potash: this is a natural mineral precipitating naturally in the evaporation pans precipitation with aid of the solar energy and without any further industrial or chemical process. Another environmentally friendly source of potassium is Polysulphate®, a new potash fertiliser with secondary nutrients. Polysulphate is a new multi-nutrient fertiliser, mined in the United Kingdom, and available in its natural state. Uniquely, it has four nutrients: sulphur, potassium, magnesium and calcium. All its nutrients are in sulphate form and are readily available for plant uptake. Polysulphate is a natural product and has a low carbon footprint. It delivers dependable high value with low negative environmental impact and is certified for organic use. CONCLUDING REMARKS Fertilisers play a critical role in the world’s food security. Targeted, balanced and precise crop nutrition, with optimal potassium supply, is one of the keys to unlocking crop performance, and achieving both crop productivity and sustainability. For more information, or to get in touch, email patricia.imas@icl-group.com.

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TIN

AUSTRALIA – CENTRAL TO FUTURE TIN SUPPLY? BY JA MES WILLOUGHBY, M AR KET ANALYST, INTER NATIONAL TIN ASSOCIATION

Tin, like most base metals, suffered in 2019 due to global trade uncertainty; however, 2020 looks as though it will bring renewed demand.

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AUSTRALIAN RESOURCES & INVESTMENT

in demand is forecast to grow rapidly as new technologies, including 5G and electric vehicles (EVs), enter the market. As a result, consumers are becoming concerned about long-term supply. Much of the focus of new supply is aimed at Africa, but is Australia being overlooked? Last year was a poor year for all base metals. The entire London Metal Exchange (LME) complex (barring nickel, with its supply-side issues) was down on average 2018 prices, but tin was at the bottom of the pile. It shouldn’t be a surprise that the uncertainty brought by the ongoing trade dispute between the world’s two largest economies – the United States and China – affected demand for base metals, but other protectionist trade policies also hurt the tin market last year. The biggest end use for tin is in solder. Since the advent of tinbased, lead-free solders in the early 2000s, solder use has risen steadily by around 10 per cent. Last year, however, saw a significant dive in the semiconductor market – a good proxy for solder use – in poor market conditions brought on by several factors, including a dispute between Japan and South Korea, and a downturn in the automotive sector. According to solder companies, market uncertainty and resultant consumer destocking was the biggest reason for the corresponding drop in solder demand. Ask the same companies about this year, however, and the view is quite the opposite. Most believe that there will be some demand recovery in 2020, backed by bullish forecasts from the World Semiconductor Trade Statistics (WSTS) agency. The statistics group believes that demand for semiconductors will grow by some 4–8 per cent this year. 5G and EVs were the top picks for new end uses for solder, and growth in these areas is forecast to accelerate in the not-so-distant future. Solder use will also benefit from the fusion of biology, machines and data in the so-called Fourth Industrial Revolution. New technologies based on 5G communications, such as the Internet of Things (IoT), robotics, artificial intelligence (AI) and autonomous vehicles, will change the way we all live and work – and to connect all of this together, the world will need more tin as solder. Although tin use in solders has grown significantly over the past 20 years, demand could have been higher without the miniaturisation of electronics. Shrinking solder joints have held back the entire market. Despite annual electronics market growth rates of five per cent or more, solder demand has only grown by an average of one per cent per year; however, research by the International Tin Association forecasts that miniaturisation may end in the 2025–27 time frame, at which point solder demand growth should begin to follow the rapidly growing electronics market. At the same time, climate change is driving a huge shift towards energy materials, and tin is already showing promise in numerous markets, including lithium-ion and sodium-ion batteries, energy harvesting, carbon capture, and hydrogen technologies. With so much potential growth for tin, consumers are becoming concerned about long-term supply; however, global tin resources give an estimated 18–50 years of supply at current demand levels, and these are only the discovered deposits.

Ask anyone about the future of metals supply, and the conversation will inevitably turn to Africa. Although Africa will be a major supplier of tin in the foreseeable future, Australia is often overlooked as a potential source of metal. Australia has a long tin mining history. The ore was first discovered in the country in 1880, while the Renison Bell mine, now one of the world’s largest, was founded around 1890. Other historically important tin mining areas include Cleveland, Ardlethan, Mount Bischoff and Mount Garnet. Many of the country’s mines shut down, however, due to the tin price crash of 1985. Junior mining companies Elementos, Stellar Resources and Aus Tin Mining have all begun exploration and development work at many of the important historical areas, including Cleveland, although these projects remain in the early stages. TSX-listed company TinOne Resources recently took over the Aberfoyle and Great Pyramid licences, and aims to bring these historical mines back into production. Heading up the list of developments, however, both in terms of size and progress, is the Renison tailings retreatment project (Rentails). Metals X, which owns and operates the Renison Bell mine in Tasmania, is looking to reprocess the tailings material from the mine, deemed uneconomic in the past. With advancements in processing technologies, the remaining tin can now be extracted at competitive prices. It is thought that the tailings could contain 0.4 per cent tin (totalling some 100,000 tonnes), a reasonable grade for even greenfield tin projects – the enormous Bisie tin project in Africa excluded. The company is reportedly undergoing technical talks with its joint venture partners, but the plan is to produce some 5500 tonnes per year of high-quality tin concentrate. The mine is expected to begin operations in the next few years. Beyond this, the country still holds a significant tin resource: roughly eight per cent of the world’s total tin, just behind China and Russia as the most prospective country in the world. Of the 11 projects that make up 65 per cent of the country’s tin resource, only two are not being actively developed. This means that some 16,500 tonnes per year of tin-in-concentrate capacity could come online by 2025 – more if early-stage projects are developed rapidly. Tin is likely to be in high demand in the future, with longer-term opportunities in new and green technologies adding to a historical fundamental growth rate of nearly two per cent. Grades at established mines are falling and new projects will be required to fill the deficit; with nearly 30 projects in the pipeline, nine of which are heading towards construction, it’s likely that Australia could become the next big player in the global tin market.

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TIN

Tungsten on the rise Perth-based Rafaella Resources has set out to fast-track tungsten production at its Santa Comba project in north-west Spain. BY BAR RY FITZGER ALD

afaella Managing Director Steven Turner told Australian Resources & Investment that the fast-track strategy took advantage of the fact that Santa Comba already has permits and infrastructure in place (it was a significant producer of the strategic metal in 1980–85). ‘It also has an inferred resource (5.2 million tonnes at 0.23 per cent tungsten at the Quarry deposit), but we needed to get in there and drill it out to get it to a level of comfort where we could go ahead and wrap a mine plan around it, as well as complete metallurgical test work,’ Turner says. ‘We haven’t deviated from that since acquiring the project in August last year. We put in place an 8000-metre drill program, of which 6700 metres is completed. So we are well on the way in terms of the drill program. ‘Results to date show good hits of mineralisation where we were expecting to see it. And we are also getting some really

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rich hits at the satellite Eliseo prospect (one metre at three per cent tungsten), which alone could represent tremendous value,’ Turner says. He says that drilling at Barrilongo, another satellite prospect, was also shaping up as ‘something interesting’. ‘We are still waiting on assay results, but, visually at least, there is clearly mineralisation in the cores. We are really excited about what the assays come back with,’ Turner says. Meanwhile, metallurgical and oresorting test work is underway. ‘Everything is starting to come together for a potential low-cost and high-margin tungsten mine. And it is coming together on time and on budget. We’re pretty excited about that. ‘It means we are still on track to bring this project into production pretty quickly. We estimate that in six to eight months from the feasibility study being completed (due in the third quarter of 2020), we could be in production.’

The project sits in the autonomous community of Galicia, which is a promining jurisdiction with a history of tungsten and tin production. Importantly, for the fast-track approach of Rafaella, the project is already fully permitted for mining to 2068. ‘All we have to do is submit a mine plan and we will be pretty much good to go,’ Turner says. Turner adds Santa Comba was effectively a brownfields site. Apart from the past production history, there is already a quarrying operation there that has effectively pre-stripped the ore body. Turner says Rafaella expects to release a measured and indicated resource estimate ‘around April’, with the feasibility study to follow in late July/August. Tungsten prices took a knock last year when warehouse stock held by a collapsed metals trader was auctioned off in China. ‘The fundamentals remain bullish and we think the price will continue to climb,’ Turner says.

Global minerals explorer and developer Rafaella Resources Limited (ASX:RFR) is a global developer and explorer of world-class mineral deposits. Rafaella is well-funded following the successful capital raise in August, 2019. Rafaella is currently advancing the development of its wholly-owned Santa Comba tungsten project in Spain. The project is located 60km from the nearest deep-water port by sealed road and has substantial infrastructure already in place, including grid power, a partially completed processing plant, workshops and offices, and a tailings dam.

The project enjoys considerable industry support, having received an offer from HC Starck for the offtake of tungsten concentrate, a pre-approved German government funding guarantee (subject to a positive feasibility study) and logistical and offtake support from Transamine Trading, the world’s oldest independent commodity trader. Rafaella also holds the highly prospective McCleery cobalt and copper exploration project in Canada.

rafaellaresources.com.au

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