Mining NZ Autumn 2014

AUTUMN 2014

In defence of Coal The future of our coal industry requires serious debate not slogans says Straterra

Page | 06

Page | 14

Page | 22

Safety message

OceanaGold looking ahead

Iron sand expansion

Families of mine staff had the chance to get hands on at a Newmont-Waihi Gold open day.

It’s been a transformative year for OceanaGold says CEO Mick Wilkes.

BlueScope Steel is expanding its dry mining iron sand operation at Taharoa.

Visit us online at: www.waterfordpress.co.nz

MITO update: New extractives qualifications proposed

MITO and Newmont Waihi Gold: promoting positive change

During 2013, MITO worked with industry stakeholders to determine a suite of relevant qualifications to support the extractives workforce, now and in the future.

MITO has been working closely with Newmont Waihi Gold to develop their people in pursuit of excellence, and promote positive change—goals highly valued by the company.

Newmont Waihi Gold manages Waihi’s Martha and Trio goldmines, and the recently resource-consented Correnso underground mine.

Five qualifications are being proposed, supporting the underground and surface extraction industries and the specialist operations within each sector, including metalliferous, tunnelling and processing. To view the proposed qualifications, or for more information about the review, please visit https://mito.org.nz/extractive/extractive.

In December, the five draft qualifications were submitted to NZQA for their evaluation, and we expect to know the outcome soon.

We welcome your input Once we have NZQA’s feedback, we plan to complete detailed development of the qualifications, including reviewing all unit standards.

We would welcome your input into this process—if you would like to take part, please email MITO’s Group Manager Industry Standards, Samantha McNaughton on samantha.mcnaughton@mito.org.nz.

The company is committed to education, and encourages its team of 120 to study towards MITO extractives qualifications.

“We have about 25 staff studying for their national certificates right now,” says Sheryl Seymour, Newmont Waihi Gold’s Training Coordinator.

“We believe these qualifications offer great value – both in assuring us that those who qualify are competent to do their jobs, and in enabling those who want to travel to access work opportunities in mining operations offshore.”

Newmont Waihi Gold also took the opportunity to participate in the targeted review of extractives qualifications.

“Gold-mining is a unique and complex business, so it’s important that the industry provides input,” Sheryl says.

“We’ve appreciated the opportunity to contribute, and help the review participants get a clear understanding of how we work.”

xxxx

Contents »

Autumn 2014

Contents 12 Correnso exploration on track Newmont-Waihi Gold has almost completed its underground exploration drive at Waihi.

12

14 Changing times for OceanaGold It’s been a “transformative” year for OceanaGold, as it grapples with the falling gold price.

16 In defence of coal The future of our coal industry requires serious debate not slogans, says Chris Baker of Straterra.

14

22 Iron sand expansion BlueScope New Zealand Steel is expanding its iron sand dry mining facilities at Taharoa.

If you have an image you think would look great on the cover, contact us:

AUTUMN 2014

Phone 03 983 5500 Email james@waterfordpress.co.nz www.waterfordpress.co.nz

16

In defence of Coal The future of our coal industry requires serious debate not slogans says Straterra

Page | 06

Page | 14

Page | 22

Safety message

OceanaGold looking ahead

Iron sand expansion

Families of mine staff had the chance to get hands on at a Newmont-Waihi Gold open day.

It’s been a transformative year for OceanaGold says CEO Mick Wilkes.

BlueScope Steel is expanding its dry mining iron sand operation at Taharoa.

Visit us online at: www.waterfordpress.co.nz

Cover photo courtesy of Bathurst Resources.

4 Mining NZ » Autumn 2014

ISSN 2324-1187

22

Expertise in Supplying Workgear and PPE for Mining Westland Workgear has been supplying Workgear and PPE solutions to mining companies since 1994 Westland Workgear is a family owned business that started off as a 1 man band in 1994 and now employees 10 staff.

It has grown by listening to it’s customers and now has it’s own brand of Westpeak and WorkPal. Reasons to purchase off Westland Workgear • Direct importer of our own brand of products bringing you top quality gear at amazing prices.

• Long standing staff with good product knowledge • Own in house embroidery machines for fast effective service • Amazing Workpack ordering systems • Good website for fast effective ordering and good reporting system • Prepared to help with our product knowledge at anytime Contact us now for an obligation free quote for all your clothing and PPE needs Take advantage of the Westpeak 1 year guarantee (applies to any manufacturer faults not general wear and tear)

Large range of rainwear

xxxx

WESTPEAK HI-VIS V LINE L/S Work shirt 60% Cotton and 40% polyester Cotton against skin for extreme comfort and polyester on the outside for brightness Colours Available: Orange/ Navy, Yellow/Navy

WESTPEAK MAXI STRIDE HI-VIS TROUSERS WITH CORDURA Westpeak Maxi-Stride trousers have gusseted crutch and knees for unrestricted movement Triple stitched and Cordura fabric on knees for longer wear 250gsm 60% cotton 40% polyester 2 Back pockets with velcro flaps Cargo pocket on left leg with cell phone pocket and pen pockets 2 Rows tape double stitched Good for scaffolders, climbing in and out of machinery e.t.c Colours Available: Orange/Black

WESTPEAK 100% COTTON TROUSERS WITH REFLECTIVE TAPE 310gsm fabric Double stitching on reflective tape Triple stitching on all stress seams

WESTPEAK 100% COTTON D/N REFLECTIVE SHIRTS Double stitching on hi-vis tape for longer wear 190gsm mide weight fabric Breathable mesh inserts under arms Orange right down back and navy on front half and sleeves Colours Available: Orange/Navy, Yellow/Navy

Huge range of spill protection products

WESTPEAK HEAVY DUTY HI-VIS TROUSERS WITH KNEE PAD POCKET 65% polyester 35% cotton Heavy duty 290gsm fabric Triple stitching on all stress seams for longer wear, Very comfortable to wear. Two back pockets with Velcro flaps, cargo pocket with cell phone and pen holders, ruler pocket.

Double knees with provision for knee pads.

Colours Available: Navy/Orange, Navy/Yellow, Black/yellow

Large range of work boots available

Want to find out more? Free phone 0508 967 543 or visit www.westlandworkgear.co.nz

News » PUBLISHER: James Lynch Ph: 03 983 5500 Email: james@waterfordpress.co.nz

EDITOR: Nick Gormack Ph: 03 983 5559 Email: nickg@waterfordpress.co.nz

MARKETING CONSULTANT: Paul Crowther

Ph (03) 983 5503 paul@waterfordpress.co.nz

JOURNALISTS: Jo Bailey, Kelly Deeks, Karen Phelps, Peter Owens, Hugh de Lacy ART DEPARTMENT: Sadhna Nath, Jesse Calder, Samantha Stuart, Anton Gray, Liki Udam, Sarah McQuilkin Ph: 03 983 5560 Email: art@waterfordpress.co.nz

OFFICE / ACCOUNTS: Helen Bourne, Jill Holland Ph: 03 983 5500 Email: helen@waterfordpress.co.nz

CUSTOMER SERVICES: Ann-Marie Frentz Phone: 03 983 5554 Email: annmarie@waterfordpress.co.nz

GENERAL MANAGER: Rex Lynch Email: rex@waterfordpress.co.nz

Bathurst remains upbeat on Escarpment potential Jo Bailey Bathurst Resources chief executive Hamish Bohannan says it was tough to let go of 19 “mates and colleagues” when the low global coal price forced Bathurst Resources to lay off staff and delay work on its Escarpment coal project on the Denniston Plateau.

However Bohannan says he remains upbeat about the future of the coal mine.

“We’re lucky that we’re not in the field digging up a hole at the moment given the current market conditions. But we’re not sitting on our hands either.

As soon as the Authority to Enter and Operate is granted by DoC we’ll start the establishment works at the site which should take around four to six months.”

These works include accessing and securing the site, and the establishment of facilities such as water management dams and stockpile areas.

The company will also mine sufficient bulk samples of coal from the site to complete market qualifications for coking coal supply to offshore steel producers.

Once the mine is established, Bathurst’s existing workforce will produce coal for the domestic market.

Some additional staff may be recruited for this however full production and recruitment won’t ramp up until the coal price recovers from its current low of around $US120/tonne, says Bohannan.

“The spot price is closer to $US108-109 and with our operating costs at around $US100/tonne the margins simply aren’t there to risk moving towards full export production straight away.”

Some New Zealand analysts predict it could be 12 to 18 months before the price jumps back to around $US170/tonne.

However Bohannan defines recovery in a different way.

“To me, recovery is an upward, sustained growth trend. Once this happens we are committed to recruiting in earnest and ramping up production for export.

“Whether it takes four, six or more months to bounce back, we’ll be ready, in production and making a modest profit along the way.”

Although difficult, he says it was the right decision to cut staff numbers, with 19 people leaving the company, six having their jobs redefined, and another four positions disestablished.

“Downsizing is never nice. We tried to be considerate and work through the process with dignity. It seems to have gone pretty well with most people saying we’ve done the wise thing.”

Bathurst board members and executives took a 30 percent pay cut in other cost cutting measures.

Bohannan says the company remains “absolutely committed” to the $22 million compensation package of environmental protection works negotiated by DoC as part of the mining

company’s consents, which will fund pest and predator control over 25,000 hectares of the Heaphy River catchment in the Kahurangi National Park; 4,500 hectares on and around the Denniston Plateau, as well as for the historic projects on the Plateau itself.

Bathurst continues to focus on its three existing domestic coal mines, Cascade, which is adjacent to the Denniston Plateau; Takitimu in Southland, and Canterbury Coal, near Coalgate.

Bohannan says the delays to the Escarpment project have been tough for the West Coast community.

“We’re already part of the local community, employing 40 people at our Cascade operation, so we know how much these delays hurt.”

However Bohannan says he is confident that “avoiding the storm now rather than sailing into it,” will result in long term gains for the company and the wider region.

“The Escarpment Mine will produce some of the best metallurgical coal in the world, which has a strong market given the current lack of alternatives for steel making.

“The opencast mine will provide a good, safe work environment for a growing workforce, and will bring in good export revenue for New Zealand. The long term future is still bright.”

To me, recovery is an upward, sustained growth trend.

Once this happens we are committed to recruiting in earnest and ramping up production for export.”

112 Wrights Road, Addington PO Box 37 346, Christchurch www.waterfordpress.co.nz These conditions are prescribed for the sake of understanding between the Company and its clients. Advertising is charged for on the basis of space taken up using a standard tabloid page. Actual space may be reduced during the printing process but this will effect all advertisers equally so no credit will be given for any reduction in size due to processing. The Company reserves the right to alter, change or omit entirely any advertisement or article that it considers to be objectionable or which may contravene any law. In the event of a failure on the part of the Company to insert advertising as instructed the Company may publish the advertisement at the first available subsequent reasonable date unless the advertisement features date sensitive material. Every care shall be taken to publish the advertisement in accordance with the advertisers instructions as to page and position but the Company reserves the right for whatever reason to place advertising in a different position and in doing so shall incur no liability whatsoever. Advertisers must advise Mining NZ immediately of any error or omission in advertisements and shall work constructively to remedy the situation which in the first instance shall be a rerun of the corrected advertisement in the next available issue of Mining NZ. Where advertisement proofs have been faxed or mailed to the client 48 hours prior to the nominated printing cutoff time acquiesce shall be taken as confirmation and acceptance. Corrections made by telephone shall be accepted but the Company reserves the right to decide whether a further proof should be faxed or mailed to the client. Accounts for advertising are due for payment within seven days of publication of the newspaper. Accounts not paid within this time may incur a penalty of 3% per month until the account is paid. Any debt collection costs incurred by the Company will be added to the account of the debtor. Views and opinions expressed in Mining NZ are not necessarily those of the editors, Waterford Press Ltd or publisher. Mining NZ welcomes contributions from freelance writers & journalists. All articles published at editors discretion. Mining NZ accepts no responsibilty for loss of photos or manuscripts.

ISSN 2324-1187

-

Exploration programme management Geological mapping and 3D modelling Resource evaluation and certification Mine drainage consulting, research, sampling and testing - Gas content testing of coal

6 Mining NZ » Autumn 2014

Happier times: Hamish Bohannan, left, and Environment Minister Nick Smith sign the Bathurst resource consent documents last year.

-

New Brisbane joint venture - CB3 Ltd Spontaneous combustion testing Combustion analysis and testing Gasification and carbonisation research Advanced nano-materials research and development Coal and minerals processing research

-

Coal and combustion testing Chemical analysis on fuels Water analysis - domestic to industrial Magnetic and density mineral separations X-ray diffraction and X-ray fluorescence (XRF & XRD) Acid base accounting and kinetic testing

News »

Spotlight on corporate manslaughter Hugh de Lacy The absence of a corporate manslaughter charge for New Zealand prosecutors to use in the wake of industrial accidents is again coming under the spotlight.

Following the Pike River Mine disaster, the lack of such a judicial option has been unwittingly highlighted by the appointment of Scotsman Tony Forster as chief executive Extractives of Worksafe NZ’s High Hazards Unit.

Forster was appointed last year to oversee the implementation of changes to the Health and Safety in Employment Act in the wake of the Pike River tragedy, in which 29 miners died in November 2010.

Before taking up his new role in February last year, Forster was Her Majesty’s Principal Inspector of Mines for the United Kingdom and Northern Ireland, and as such had a lead investigatory role alongside the British police into the Gleision Colliery accident in Wales that occurred just ten months after Pike River.

Four miners died in the Gleision accident in September 2011 when the mineshaft they were working in flooded after explosives were detonated.

It was the worst mining accident in Wales in 30 years.

Forster’s role in the investigation contributed to the laying of four corporate manslaughter charges against MNS Mining Ltd, and for of manslaughter by gross negligence against mine manager Malcolm Fyfield.

Their trials began late last month and are expected to last eight weeks.

Forster was due to give evidence some time around Easter.

The British response to Gleision contrasts with the New Zealand response to Pike River, where the company, its mine manager and the Department of Labour (now part of the Ministry of Business Innovation and Employment, MBIE) appear to have got off scot free despite a Royal Commission of Inquiry detailing long-running major health and safety mismanagement.

Asked if the failure to hold anyone accountable for the Pike River deaths was because New Zealand lacks a corporate manslaughter law, Forster declined to comment, in part because the Gleision matter is sub judice, but also because as a non-New Zealander and a recent arrival in this country he said it was not his place to tell New Zealand lawmakers what laws they should b making.

Mining company Pike River Coal was charged and convicted on health and safety failings, but was unable to pay the $760,000 fine or $3.41 million in reparations levied against it because it was in receivership.

Charges were also lodged against Pike River’s mine manager, Peter Whittall, but were withdrawn in a courtroom deal that saw Whittall’s insurer pay the victims’ families the $3.41m in reparations.

The only other party successfully charged over Pike River tragedy was an Australian company, Valley Longwall International Drilling Pty, which lost three employees in the accident, and was fined $46,800 for health and safety failings.

Forster a man on a mission Hugh de Lacy

Tony Forster

The High Hazards Unit (HHU), to which Forster was appointed as Chief Inspector Extractives, was formed by the MBIE after the Pike River disaster to manage low possibility/high consequence health and safety issues, and has been retained since the passage of the commission of inquiry’s recommendations into law as the Health and Safety in Employment (Pike River Recommendations) Act. Quarrying and alluvial mining regulations under the Act are expected to be written between 2015 and 2017.

Pike families hopeful of re-entry soon Jo Bailey

“It hasn’t been easy, but is going

Pike River families’ spokesperson Bernie Monk believes re-entry of the mine could happen within the next few weeks.

“There is no set date. However we’ve been aiming for the end of April and I haven’t heard anything to the contrary. Hopefully it won’t be too far from that date.”

Bad weather during early summer put the plan back two or three weeks, but it’s on schedule again now, he says.

“I can’t express enough how hard the guys from Solid Energy have worked, and the amount of effort various government departments have put in behind the scenes to make this happen.

“It hasn’t been easy but is going according to plan now. The families really appreciate it and have taken a step back to let them get on with it.”

Monk and two or three other representatives from the families of the 29 men who remain entombed in the mine, meet every second week with the government and Solid Energy to update progress. The project to re-enter the mine’s main tunnel began last September, when government approved conditional funding of a staged plan to re-enter and explore the drift up to a rock fall about 2.3km from the mine entrance.

according to plan now. The families really appreciate it and have taken a step back to let Bernie Monk

them get on with it.”

The bodies of the 29 men are believed to be beyond the rock fall.

Work got underway in October, with help from the New Zealand Defence Force which removed 20 tonnes of machinery and equipment from the mine’s entry.

Monk says several bore holes have been drilled with cameras put down to check for damage underground, which hasn’t been as bad as first thought.

“There appears to be no major damage where they are going to put a wall in which is positive, although more camera work still needs to be done.”

He says the families’ current priority is getting down the drift. However they are also working “frantically” on stage two - the recovery of their men.

“We are having conversations behind closed doors with our own experts.

“Hopefully once stage one is completed, we can come together with government and Solid Energy and talk about stage two.”

Getting into the mine will answer a lot of questions for the victims’ families, he says.

“It will hopefully give us some clues as to what happened, with our ultimate goal always to bring our men home.”

“Rogues and cowboys” be warned: Tony Forster, the new Chief Inspector Extractives for Worksafe NZ’s High Hazards Unit is out to get you.

Forster, who grew up in Scottish coalcountry under the shadow of the mine deaths of his grandfather and an uncle, says he is not looking for a fight but if rogues and cowboys continue killing people in New Zealand’s mines and quarries, he’ll be after them.

While New Zealand struggles to come to terms with the loss of 29 lives in the 2010 Pike River catastrophe, Forster himself has always seen mine safety from a highly personal perspective.

His mother, Bridget Forster, never knew her father, Patrick Murphy, because he died following a pit accident in a Scottish mine when she was only six months old.

And then her uncle, Michael Murphy, was killed outright in another accident, his body trucked home on an open cart.

“People have got to get it into their heads that [a mining accident] is not just a statistic: it’s a life-changing tragedy,” Forster says.

Beginning his mining career on the end of a shovel in a Scottish mine, Forster rose to become a colliery manager and then deputyhead of industrial relations for the British Coal Corporation, before switching his focus to health and safety by joining the UK Health and Safety Executive.

Before coming to New Zealand last year he was Her Majesty’s Principal Inspector of Mines for the United Kingdom and Ireland, and in that role was able to offer the head of New Zealand’s Mine Rescue Service, Trevor Watts, any help he needed in the aftermath of Pike River.

It turned out there was nothing that could be done, and only now is there an operation under way to try to retrieve the 29 bodies still entombed in the mine.

Forster’s jurisdiction covers not only mines but quarries, and by 2017 he’ll have prepared codes of compliance for them even though they have for the time being opted out of regulations already being drafted for mines.

He’s not expecting resistance to the codes from the quarrying industry, but he says he’ll be gunning for those operators who think they can put workers on machines, “point them in a general direction of a hole and tell them to start digging.”

EXCEPTIONAL LIFETIME VALUE FOR YOUR MINING OPERATION

Parts: 0800 93 39 39

Service: 0800 CAT HELP

www.goughcat.co.nz

mining.cat@goughcat.co.nz Autumn 2014 » Mining NZ 7

News »

Families given safety message ARANZ Geo

establishes Brazil office

Karen Phelps Recognising that safety also involves employees’ families Newmont-Waihi Gold held a staff, contractors and families open day which saw over 850 people visit a range of areas including the Martha open pit, the underground portal and the Baxter Road processing plant.

“We know that safety isn’t just about individuals; it also involves family and whanau,” says Newmont-Waihi Gold spokesperson Kit Wilson.

“The Vital Behaviours safety programme which Newmont-Waihi Gold has been rolling out across the site encourages all staff to speak up and contribute,” Wilson says.

“One of the suggestions which came out of these discussions was that it would be good for family and whanau to see what happens on site so they could understand the job they do.”

“The strong feeling was that if staff could share their jobs with loved ones their families too become part of each staff’s safety journey.

“For example if a staff member comes home at the end of a night shift and needs family to be quiet so they can sleep they can then come to work and complete the job safely well rested the next day.”

During the day visitors were able to visit the open pit, tour the process plant, and take a minibus tour of the tailings storage area.

He says that the most popular attraction was the underground portal. In what Wilson believes is a New Zealand first, visitors were able to walk 200 metres down the Favona decline and get an understanding of what it’s like underground.

Wilson says that while it was a lot of work and required significant organisation to make the site safe for people not familiar with potential site hazards and not wearing personal protective equipment, the work was shared out amongst a large number of staff who lent a helping hand.

As well as the helium balloons, face painting, bouncy castles and free food, Wilson says one activity kept children very busy on the day.

“Environmental staff had set up a sound monitoring station to measure the loudest scream. On the day the highest level measured was 128 decibels.

For staff more used to measuring the site compliance limit of 50 decibels that came

Hands on: No, it’s not a real gold bar, but it weighs about the same. as quite a surprise, with one employee suggesting that his work ear muffs might be equally useful at home,” says Wilson.

Another benefit of the day for Newmont Waihi Gold was giving staff members a greater understanding of the company’s overall business.

“Some staff, for example those that work in the office, open pit or process plant, had never been underground before.

“It gave them an understanding that they are part of a team and that anything we do on site has an effect on someone else’ job somewhere else on site.”

New Zealand company ARANZ Geo - the developer of 3D geological modelling software, Leapfrog - has opened a new office in Brazil.

ARANZ Geo chief executive, Shaun Maloney, says the move follows the company’s increased sales in the country, “with a nearly 50% increase in Leapfrog license take up in the Brazilian market in the past year”.

“Brazil boasts a rich variety of mineral deposits and has a modern mining industry eager to embrace technological advances,” says Moloney.

“The top down workflow approach of Leapfrog Geo is ideal for handling large amounts of data, developing multiple models and further reducing risk in both operating mines and exploration.”

Leapfrog Geo’s workflow solution allows users to rapidly construct multiple geological models that consider multiple hypotheses, tested against multiple futures for more realistic, sophisticated and robust evaluation.

New information is quickly and dynamically added, keeping models up-to-date. The selfdocumenting approach facilitates easy collaboration, checking and auditing.

Leapfrog Brazil will offer Leapfrog Fundamentals training, 30 day evaluation licenses, email and phone support, and project assistance.

Provided by qualified and experienced geologists, project assistance will deliver expert collaboration on modelling projects to further fast track progress.

“With the set up of the Brazil office our customers will be able to contact a local Leapfrog expert who speaks their language, lives in their time zone and has an understanding of local conditions,” says Moloney. “Leapfrog products rapidly speed up the modelling process and enable time critical decision making and so it’s essential we’re on hand to respond when needed.”

Christchuirch-based ARANZ Geo has grown steadily since Leapfrog was first introduced to the mining industry in 2004. The company’s strategy is to offer localised expert support for hands on help and assistance where it’s needed.

ARANZ Geo now has sales and support offices in Brazil and Australia.

The company also has Leapfrog distributor offices in South Africa, Denmark, Canada, Chile and Peru.

OCEANIA SOUTH LIMITED EQUIPMENT OPERATOR DEVELOPMENT AND TRAINING

LEON JOHNSON 021 0655 215 leonjtraining@gmail.com

Oceania South Ltd is an owner operated company formed three years ago with a focus on the continued support of the New Zealand mining industry.

Leon sustains over 25 years of training experience from a background in mining to representing numerous equipment manufacturers, with recent involvement on international projects including overland gas pipelining in PNG, Waste Management in Fiji and mining in both Australia and New Zealand.

“My services assist mining and quarrying companies in identifying opportunities for development and improvement within their mobile plant operations.

I provide the skilled training to drive the improvements specific to the various requirements of your operation with a focus on safety, application efficiencies and commercially viable plant operators”.

In this first three years Oceania South is proud to have supported a number of New Zealand’s larger mining companies . New employee’s have been inducted onto a range of mobile equipment with an outline to being responsible as the ‘asset manager’ of that piece of equipment. Refresher and familiarisation training has been provided to experienced operators, promoting enhanced applied skill techniques, improved production, cost savings on fuel, repairs and maintenance, all contributing to more economical outcomes.

8 Mining NZ » Autumn 2014

Equipment Types Rigid Haul Trucks Articulated Dump Trucks Load Haul Dump / Scoop Tram Intergrated Tool Carriers Wheel Loaders Excavators Track Type Dozers Wheel Dozers Motor Graders Personalised training Specific to your operation Equipment safety Inductions Walk around inspections Asset Manager responsibilities Preventative maintenance In cab control functions Multi skilling Application Techniques Training Needs Analysis RTW Endorsements

News »

Changes at the top for Solid Energy Hugh de Lacy The changing of the guard at struggling stateowned collier Solid Energy has extended to the chairman of the board of directors, Mark Ford, who is standing down because of ill-health.

Ford’s announcement came hard on the heels of the appointment of a new chief executive to replace Don Elder, who resigned in the wake of the company’s meltdown from the crash in global coking coal prices in 2012.

Ford will retain his seat on the board, and though deputy chair Pip Dunphy will stand in for him in the meantime, the Minister of State Owned Enterprises, Tony Ryall, has yet to name his replacement.

The new chief executive, who takes up the post in early May, is Australian Dan Clifford, the manager of the Ulan coal complex, incorporating two underground and one opencast coalmine in New South Wales. Ulan is owned by Glencore Xstrata which is one of the biggest companies in the FTSE top-100, employing 190,000 workers at 90 sites in 50 countries.

The company was created a year ago with the formal merger of Glencore International Plc and Xstrata Plc, though the two had been closely linked by marketing agreements since 1997.

With investments in metals, minerals, agricultural and energy products, Glencore Xstrata produces and markets more than 90 commodities for industries ranging from automotive to food processing and power generation.

Clifford, 42, has had more than 20 years in the mining industry, mostly in Australia but also in South Africa, and has worked for heavyweights Anglo Coal and BHP Billiton as well as Glencore Xstrata.

He has a degree in mining engineering, a First Class Certificate of Competency for underground coalmines and is a member of the Australian Institute of Company Directors.

The Ulan complex produces 11 million tonnes of coal a year – nearly three times Solid Energy’s output – and employs 900 people.

Clifford will take over at Solid Energy from Garry Diack who has been interim chief executive since Elder resigned.

Clifford is expected to have his work cut out rebuilding a company forced to halve its workforce to about 800, and requiring a $100 million government lifeline to keep it in business after the crash in the price of coking coal, which comprises about half of its annual 4m/t production.

Clifford has so far declined to comment on his appointment, which was announced just ahead of the release of Auditor-General Lyn Provost’s report into the company’s problems, which she put down to its poor communications and its failure to consider worst-case scenarios when developing its strategy. Outside the scope of Provost’s inquiry was the phenomenal hike the company made in the estimate of the value of its business in 2008, from $500m to $7.8 billion, and which rang alarm bells at Treasury, although were apparently ignored by the Government at the time.

The five-year period covered by Provost’s inquiry began immediately after, and did not include, the company’s revaluation.

Provost’s report, released in late March, also noted the lack of experienced mining personnel on the board.

Dan Clifford

Overcoming the challenges The theme for this year’s New Zealand AusIMM conference will be - appropriately - “Staying on top in challenging times”.

AusImm NZ spokesman Les McCracken says the conference aims to address “how the New Zealand mining industry is responding to the technical, operational, and cost challenges during a period characterised by a market downturn, mine resource depletion and a step change in legislative standards”.

Registrations for the conference - which is being held in Hamilton from August 23-27 open next month.

Key industry leaders - including from Solid Energy, OceanaGold, and Newmont-Waihi Gold - will deliver presentations on a range of topics.

Government speakers will also address the conference in a session covering the recent legislation changes in the Crown Minerals and Health and Safety in Employment acts.

In addition to the keynote addresses and more then 50 technical presentations, the conference will also offer a number of pre and post conference short courses and field trips.

McCracken says that the conference will also hear from the CEO of MinEx ( the mining industry safety council) and an international expert, on how mining companies need to respond to the changes in order to “drive a step change in the industry’s health and safety performance”.

The technical sessions will cover a wide range of subjects including: geology, prospectivity and exploration of coal and mineral resources; project case studies, whether at prospect or feasibility stage; finance, legal and corporate affairs; government legislation; geotechnical, geophysics and new technologies; metallurgy and mineral processing; environmental management; community/iwi relations and partnerships; health and safety; geoscience/ resource engineering; and education and industry training.

The Australasian Institute of Mining and Metallurgy (AusIMM) was founded in 1893 and provides services to professionals engaged in all facets of the global minerals sector.

With a focus on providing leadership and opportunities to minerals industry professionals, AusIMM delivers an ongoing programme of professional development services to ensure its members are supported throughout their careers, enabling them to provide high-quality professional input to industry and the community.

AusIMM represents more than 13000 members drawn from all sections of the industry within both Australia and New Zealand.

It is supported by a network of branches and societies in Australasia and internationally.

Autumn 2014 » Mining NZ 9

News »

Gold price recovery seems short lived In reacting to lower

Hugh de Lacy The strong recovery of the global price of gold, since it hit a post-boom low of less than $US1200/ounce ($NZ1380) in December, came to a grinding halt in March with the easing of tensions over Russia’s annexation of the Crimea.

Gold was bouncing along around the $US1250 ($NZ1435) mark until the February crisis in the Ukraine suddenly put $US100 ($NZ115) on it, and Russia’s invasion of the Crimea pushed it up to $US1380 ($NZ1585) by mid-March.

But since then it’s been all downhill again , slipping under $US1325 ($NZ1520) by the end of March, and looking to continue its decline unless another international political scare comes along to reignite it.

There’s no shortage of optimists who think the latest slide is a temporary aberration, but the more likely scenario is a continued softening to around $US1200, the level it has to maintain for it to continue to be produced at a profit.

Nor is there any sign that the usual 2500 tonnes of new gold produced globally each year is falling, so there will be no respite from a shortage of supply.

Add to that the United States Federal Reserve Bank’s planned elimination by the end of this year of its former $85 billion a month moneyprinting support for the US economy, and a rising trend in interest rates as the world emerges from the 2008 recession, and the scene is set for a steady softening.

There’s still good demand from the likes of India and China for jewellery and ingots, but the meeting between Russia’s and the US’s foreign affairs ministers on March 30 looks for now to

prices, some producers

Source: LBMA, Datastream, BullionDesk/FastMarkets, World Gold Council 1,400 USD

production to maintain

1,300 USD

revenue levels.”

1,250 USD

1,200 USD 1,150 USD

mines while others are actually increasing

1,350 USD

6. Jan

20. Jan

17. Feb

3. Feb

3. Mar

17. Mar

—usd

have taken the heat out of the Ukrainian situation no less than the lustre out of gold.

Meanwhile, NZ Mint says gold production is set to reach record levels despite the price drop.

The company says in 2013 consumers generated exceptional levels of deman­d for gold.

“Prices are somewhat dependent on supply and demand like any commodity,” she says.

“However, precious metals are more complex and generally speaking no one event is likely to affect the price.”

A full range of fire suppression systems for the following surface and underground applications:

• Mining / Resource Industries • Construction • Drilling • Forestry • Mobile Equipment

Fire Suppresion Systems P.O. Box 334081 Sunnynook, Auckland Steve Benseman Ph: 021 918 900, E-mail: sbenseman@clear.net.nz

10 Mining NZ » Autumn 2014

have suspended marginal

Gold Price

NZ Mint says that gold demand has been relatively bullish during the first three months of 2014 with a few flat patches thrown in.

“Investors have been a mix of local and international with a reasonably equal split.”

“With world unrest seemingly on the increase across several different levels, investors from all walks of life appear to be showing growing interest in precious metals – the argument being that gold and silver help preserve wealth in turbulent times.”

NZ Mint says that on the production side it believes that “gold mine output will set a record this year and the slide in prices is unlikely to put the hand brake on the tonnage mined until 2015”.

“In reacting to lower prices, some producers have suspended marginal mines while others are actually increasing production to maintain revenue levels.

“There are suggestions higher grade ore is being targeted by some to keep marginal mines operational, perhaps at the expense of future production.”

Several large projects begun when gold was rallying are now coming to fruition and the world’s top three miners all report higher production in the most recent quarter.

NZ Mint says mining costs appear to be stabilising too, after soaring during the boom years and already the average cost of producing an ounce of gold is showing signs of backtracking.

Fire protection crucial for expensive mine equipment Protecting mining equipment from fire could save companies millions of dollars, says Steve Benseman from Fire Suppression Systems.

“If companies have a complete burn-out of one of their key pieces of equipment, it could be out of action for up to a year which would cost them an awful lot of money.”

Benseman says the lead time to replace highly specialised mining and construction equipment is currently around 50 weeks from when an order is placed to when it arrives in New Zealand.

“That’s why it is imperative companies protect their existing machinery as the combination of large amounts of fuel, hydraulic oil, extremely hot surfaces and electrical components create an operating environment with an inherently high fire risk.”

Benseman has 13 years experience in advising, installing and maintaining fire suppression systems at New Zealand mine sites.

He says it is important companies deal with a specialist such as Fire Suppression Systems to ensure their systems meet the testing and certified standards required of the industry.

“Some of our competitors dabble in fire suppression work outside their core business, but I believe we’re the only company in New Zealand to focus solely on mobile equipment fire suppression.”

Fire Suppression Systems offers a full range of systems for the mining, construction, drilling, forestry and mobile equipment industries.

Benseman is based in Auckland and employs three mobile technicians who operate from other parts of the country.

Between them they visit clients’ often remote sites in fully set-up vehicles that enable them to provide complete equipment install, maintenance and servicing on-site.

We pride ourselves on delivering reliable, proven products that give our customers peace of mind ....”

The expert team can also provide clients with advice on preventative measures and maintenance practices they can undertake to further reduce fire risk.

Benseman is the New Zealand agent for foam fire suppression system Sandvik NFP 1000. Around 18,000 Sandvik systems are now being used worldwide, he says.

The system is fully compliant with the new Australian standard AS5062.

A key feature is that it is completely selfcontained so even if there is no electricity or person to operate the system it will still activate in the event of an emergency.

Benseman says Fire Suppression Systems recently installed fire suppression systems to 115 machines for the Downer/Solid Energy Stockton Alliance on the West Coast, its biggest single install to date.

“We continue to look after every other major mine in the country.

“We pride ourselves on delivering reliable, proven products that give our customers peace of mind that their equipment and staff will be protected should a fire incident occur.”

Gold » Newmont-Waihi Gold

Correnso exploration drive on track Karen Phelps The Correnso exploration development drive is due for completion by the end of April.

The exploration drive, which comes off the Trio mine and heads north underneath residential properties in Waihi East, has involved NewmontWaihi Gold constructing a tunnel over 200 metres beneath the surface and drilling core samples.

It is the first time that such a project has been undertaken in New Zealand by a gold mining company directly under residential properties.

As a result it has been substantially more restrictive as a result than the usual methods of refining mine design, says Newmont-Waihi Gold spokesperson Kit Wilson.

“With any other mine we’ve developed we’ve been able to drill from the surface. Obviously this is not possible in an area with residential houses.

“Because this is the first time that a modern gold mine will be constructed underneath residential properties everyone is watching us so we have to get it right,” says Wilson.

“Not only do we have to work within the consent conditions we also have to maintain the trust of the people of Waihi.”

Consent conditions for the project include both technical and social conditions such as NewmontWaihi Gold holding four community meetings per year.

The first was held in February and the next is scheduled for mid-May. Wilson says about 70 locals turned up to the first meeting and asked a range of questions which has led Newmont-Waihi Gold to propose a workshop for the general public on vibration.

“We will bring in a vibration expert and hold workshops for small numbers – about ten people – at a time.

The Correnso exploration at Waihi is the first time that such a project has been undertaken in New Zealand directly under residential properties.

“This should give a greater understanding of the process to the public.

“We are also required to publish our mine plan on our website at the beginning of each month.

In addition we hold a twenty minute session on local radio Gold FM every Wednesday morning so people can ask questions.

The idea is to provide the community with as much information as possible.”

One thing he says that has been confusing for the public is that in their eyes the mining company seems to keep changing its plans.

“Mine design evolves as more information comes to hand.

“What we’re planning now is actually smaller now than what we had initially proposed.

“We learned from Favona and Trio that veins can twist and turn and the mine plan can change,” says Wilson.

“From the exploration drive we’ve drilled to the side in a fan shape to allow us to get a very good understanding of the ore body in terms of extent and grade.”

Wilson says that this grade and extent is not yet fully understood and the company is awaiting

the completion of the drill core sample analysis in order to form an overall picture.

“Once all the core samples have been analysed this allows us to make a final determination on the mine plan.

“Once we know what we’ve got then we will decide the best way to mine the ore body.”

He says the lower international gold price may have an effect.

“The gold price is lower now than it was when we first started the project and there may be ore that is of a lower grade and not economically feasible to mine at this time.

“But it’s not the gold price, it’s the input costs that determine the business.

“We can’t control the gold price, but we can pay very close attention to what it actually costs to get gold out of the ground.

“Like every gold mine in the world at the moment we are looking very carefully at our input costs.”

Mine design evolves as more information comes to hand.

What we’re planning now is actually smaller now than The exploration drive has involved Newmont-Waihi Gold constructing a tunnel over 200 metres beneath the surface and drilling core samples.

what we had initially proposed.”

Post To:

Name:

Phone:

Business name:

Fax:

Your position:

Signature:

Industry type: Postal address:

Waterford Press P O Box 37 346, Christchurch www.waterfordpress.co.nz Ph: 03 983 5500 Fax: 03 983 5552 Please tick your payment option Invoice me Cheque enclosed

1 YEAR’S SUBSCRIPTION FOR ONLY $34.50 (Inc GST) 12 Mining NZ » Autumn 2014

To ensure your copy arrives at your desk, join our mailing list TODAY for PROMPT delivery

Hydrema 912ES PACKED WITH BENEFITS t &YUSFNFMZ VTFS GSJFOEMZ BOE FBTZ UP PQFSBUF )JHI PQFSBUPS DPNGPSU BOE TBGFUZ GSPOU TVTQFOTJPO BVUP MVCSJDBUJPO BJS TFBU t -PX XFJHIU BOE DIBTTJT EFTJHO HJWFT WFSZ MPX HSPVOE QSFTTVSF t 4USPOH $VNNJOT 24# TUBHF C FOHJOF IQ (SFBU UPSRVF t )JHI .PCJMJUZ EVF UP DFOUFS QJWPU TUFFSJOH BOE IZESBVMJD TUBCJMJ[FST t 7BSJPVT 0QUJPOT .VMUJ $IBTTJT 'VFM 5BOLFS 8BUFS 5BOLFS 4QSFBEFS .VMUJ UJQ PS Y UZSFT

FREEPHONE 0800 447 392 sales@nzammachinery.co.nz

www.nzammachinery.co.nz

Hydrema 912ES- COMPACT, HIGHLY MOBILE and OFF-ROAD SUPERIOR Hydrema (Hydraulic Earthmoving Machinery) was founded in Denmark in 1959, and is still a 100 percent family-owned company. Today, the business produces Hydrema equipment from its factories in Denmark and Germany, with wheeled excavators, backhoes and land-mine clearing machinery being some of the arsenal manufactured for the world construction and military markets. NZAM Hireways have been hiring/ selling the Hydrema brand in New Zealand for the past 10 years, with many machines sold around NZ, and 18 operating in the rental fleet.

Off-road dumpers are the Hydrema machines that NZAM Hireways has been focusing on, with the Hydrema 912DS and larger 922D models in its sales and hire fleets.

The reason for the success in the Hydrema 912 dump truck is found in the articulated pivot steer chassis. The center pivot and hydraulic stabilisers keep the machine stable and safe by transferring the weight to where it is needed. The chassis ensures that all

wheels constantly track, and the standard twin tyres give outstanding traction with minimum ground damage.

The pivot, which is centrally placed, increases manoeuvrability with a low turning radius and better positioning characteristics.

A state of the art 141hp Cummins engine offers some of the best power to weight ratio on the market. Whether the machine is working on steep gradients or poor ground conditions, the 912E-series has the power to cope.

Where other machines give up, that is why the Hydrema is chosen for many different uses and for jobs with low accessibility.

There are many machine configurations available, depending on your needs and requirements. The multi chassis option gives plenty of scope for many applications; this includes water carts, fuel tankers, fert/ sand spreaders, flat beds etc. The Hydremas also come with large 800/45x30.5 balloon tyres which gives the Hydrema 912E-series the lowest ground pressure on the market for a wheeled ADT. The high mobility

version of the 912E-series goes just about anywhere that a tracked dumper will, but without the hassles and extra running costs. The Hydremas offer 365-day availability, and is smoother, easier and much more comfortable to drive than a tracked dumper. The 180 degree popular multi-tip version of the 912 dumper, is where the dump truck can turn the body 180 degrees and deliver the payload anywhere in the area.

Multi Tip makes several working situations easier.

The four wheel Hydrema dumper fill an important gap in the market, especially when the on-site haul is over a short to medium distance, as well as their versatile applications. On the smallermedium sites it means dump trucks face shorter queuing times, waiting for others to be loaded or dumper off. This makes the material flow more like a conveyor belt, avoiding lulls and rush periods for machinery loading the trucks or spreading the fill.

Also, with the smaller footprint they provide less traffic congestion- a nice choice for the right site.

Gold » OceanaGold

Oceana adjusts to gold price drop Jo Bailey The last year has been “transformative” for OceanaGold, with the commencement of commercial production of the Didipio Mine in the Philippines contributing to the Company’s record gold output and revenue, says managing director and chief executive Mick Wilkes.

“We reduced our debt as planned and made some difficult but necessary decisions during the year to ensure sustainable and profitable business units in New Zealand in this lower gold price environment.

“However I am very pleased with our performance in 2013, where we brought on line our newest asset Didipio, which continues to perform well. The company closed the year with record gold production, strong copper production and record revenue even with a significantly lower average gold price received than in previous years.”

In June 2013, the company announced an adjustment to the Reefton mine plan which deferred the capital spend of the final cutback at the Globe Progress pit resulting in a two year reduction in the mine schedule.

The mine will transition to care and maintenance in mid-2015 pending an improvement in the gold price.

The Macraes mine was also significantly affected by the “prolonged and sustained” drop in the gold price, with the “re-optimisation” of the mine plan to further reduce costs resulting in the loss of 70 jobs, around 25 percent of its workforce including contractors.

“The new mine plan includes a reduction in the total material movement schedule in the open pit resulting in lower equipment usage and a reduction in operating and support staff requirements over the next two years,” says Wilkes.

Bernie O’Leary, general manager of Macraes Operations said he was pleased that the final number of redundancies was lower than originally proposed.

Sixteen jobs were saved by redeploying equipment operators to the underground operation, to civil earthworks operations at Macraes replacing contract labour, and to the company’s Reefton gold mine.

“In January we organised a support gathering in Waikouaiti for the affected employees which was attended by over 50 mine workers and their partners.

“A range of support agencies such as recruitment consultants, government agencies and other businesses attended to provide advice, promote their services and discuss suitable job opportunities.”

O’Leary said staff were “very understanding” and provided good feedback about what was a difficult process for the company.

He also added, “We are grateful for the

OceanaGold has deferred the capital spend of the final cutback at its Globe Progress mine in Reefton. contribution all these people have made to OceanaGold New Zealand.”

In 2013 the Frasers and Macraes mines produced around 80 percent of the company’s gold production.

This is expected to drop back to around 70 percent or between 275,000 and 305,000 ounces of gold in 2014.

Mick Wilkes says the drive for efficiency will continue across the company’s operations.

“We will continue to unlock the organic value from our existing operations, such as the tungsten value at Macraes and optimising the design and timing for the underground development at Didipio.”

He says the company continues to regularly review its mine plans and will make any necessary adjustments in order to sustain operations and ensure it operates as efficiently as possible without compromising health, safety and the environment.

We will continue to unlock the organic value from our existing operations, such as the tungsten value at Macraes....”

“As part of our normal course of business, we will also continue to pursue selective accretive acquisition and resource development opportunities that are complementary and add low cost gold reserves to the business.”

He says the Didipio Mine has transformed OceanaGold into a multinational gold producer and when combined with the New Zealand operations has resulted in lower cash costs per ounce of gold sold.

Hugh McMillan NZ Business Manager Ph +64 3 788 9122 or +64 275 735 701 Fax +64 3 789 4261 hugh.mcmillan@sgs.com

SIGN WRITING

CORPORATE GIFTS

SGS is the world’s largest, independent inspection, verification and certification company. Founded in 1878, SGS is recognised as the global benchmark for quality and integrity.

There are six SGS laboratories servicing the Minerals Industry in New Zealand. These laboratories provide sampling, preparation and analytical services to the mining industry and a wide range of other services through affiliate offices located throughout the country and globally.

Minerals Services provide support to its clients both as strategic partner and technical advisor.

Together with our worldwide network of operations and strong relationships with subcontracting laboratories we can deliver a broad spectrum of independent quality services.

For a complete list of capabilities and specific product information, please contact one of our offices.

SGS Minerals Ngakawau – 50 Dole St, Ngakawau / PO Box 240 Westport 7866 / Ph. 03 788 5041 SGS Minerals Runanga – 24-26 Carroll St, Runanga / PO Box 20 Runanga 7841/ Ph. 03 762 7802 SGS Minerals Waihi – 43 Victoria St, Waihi / PO Box 135 Waihi 3610 / Ph. 07 863 8969 SGS Minerals Westport – 5 Lyttelton St, Westport / PO Box 240 Westport 7866 / Ph. 03 788 9003 SGS Minerals Reefton – Globe Progress Minesite, Cornishtown, Reefton / Ph. 03 768 6140 SGS Minerals Macraes Flat – 470 Golden Point Road, Macraes Flat, Otago / Ph. 03 474 6778

14 Mining NZ » Autumn 2014

“Looking ahead to 2014, we are on track to increase throughput rates at Didipio to 3.5 Mtpa and are implementing initiatives to increase productivity and drive efficiencies at the operation to further reduce costs.

“We will continue to further strengthen the balance sheet and position the company for new value-add opportunities while working closely with all of our stakeholders to deliver positive results in a safe and sustainable manner.”

SAFETY EQUIPMENT

Mens & Womens Mine Compliant Workwear

Screenprinting Embroidery

email: sales@pssnz.com

Gold » Earnscleugh Alluvial

Earnscleugh operation on target Jo Bailey Around 500 people took the opportunity to see one of New Zealand’s largest alluvial gold mines in action when Mintago Investments (part of the L&M Group) opened its Earnscleugh operation to the public in late March.

Visitors were given access to a high wall on the edge of the pit face, from which they had great views of the company’s gold dredge and some of its heavy mining machinery operating down in the mine.

The dredge, which weighs up to 850 tonnes when laden with gravel, is the first to operate in Central Otago since the 1960’s.

A static display of machinery and equipment was also held by the mining company at the mine, where visitors were able to get up close to some of its big workhorses.

Small amounts of gold were available for purchase at the Earnscleugh Hall where refreshments were also served. This facility is run by the Earnscleugh Community Society, the recipients of the proceeds of the open day.

“The society receives the entire gate takings from our open days, and we pay the local Lions club to run the barbecue,” says Shirley Herridge, L&M Group’s chief financial officer.

“The Lions also donate their profits and we’re really grateful for their support as we couldn’t run it without them.”

• • • • •

The Earnscleugh gold dredge is the first to operate in Central Otago since the 1960’s.

Mintago expects to retrieve around 110,000 oz of gold from the 150ha site over the seven year life of the project.

The mine, which is now about half way through its lifespan, didn’t have an open day last year due to the disastrous sinking of the dredge, which occurred in January 2013 when it sprung a serious leak.

The vessel was pumped out and re-floated in February then winched ashore for repairs and reconditioning work which included an energy conversion to mains electricity.

Magnum Water Trucks and Tanks 2000 litres – 150 000 litres Water Cannons – Manual and Remote Controlled Spray Valves – 565 – 1350 litres per minute Cabin Switching Components Pump Stations, Hose Reels etc

From component supply to full design and build service. Magnum are the industry standard in all aspects of Dust Control, Fire Fighting, Automated Washdown Systems and Haul Road Maintenance

In the last year the company has added more new equipment to its fleet including two 100-tonne dump trucks, a second WA900 wheel loader and a new excavator.

There have also been considerable modifications at the mine site, providing visitors to the open day with a different perspective from previous events.

Miss Herridge says the latest open day was the third held by Mintago at the mine.

“We hope to continue to hold it at least every couple of years as a way of showing our support for the local community.”

SPECIALISING IN THESE DRILLING METHODS Shallow oil and gas

Geothermal

Coalbed methane

Diamond Core

RC with auxiliary and boosters

AVAILABLE TO SUPPLY: Full BOP Equipment

Available in New Zealand through....

Southern Parts & Machinery Ltd

3 Diamond Rigs

0800 66 66 56 Dave Tennent

Certified Crews

3 RC Rigs

8x8 Trucks

Track and truck-mounted rigs/equipment for remote access

21 Donald Street Kaikorai Valley, Dunedin Ph (03) 488 1889 Fax (03) 488 2374 Email dave@southernparts.co.nz

Phone 0800 160 100 www.washingtons.co.nz email: admin@washingtons.co.nz

®

d n a s k Than , k c u l d o Go Guys

Power was previously generated by an on-board generator.

The dredge was re-commissioned again in April 2013, and there have been no further problems since, says Mark Coleman, of Southern Earthworks the company contracted to operate the mine on behalf of Mintago.

“Everything has gone according to plan. The barge was out of action for around three months but we managed to hold onto all of our 35 staff during that time. Production remains steady and on target. Overall we’re very happy.”

Earnscleugh Gold Mine’s water management solutions partner since 2010. Still pumping and still proud.

www.allightsykes.com +64 3 344 2100 Autumn 2014 » Mining NZ 15

Industry Focus » Coal

Of the 2.8 million tonnes of New Zealand coal consumed domestically last year, 72% was used in industrial processes.

Coal has its place in New Zealand The future of our coal industry requires serious debate not slogans, writes Chris Baker of Straterra.

S

ome New Zealanders are calling for an immediate ban on all new coal mines. We are told this is necessary to save the world’s climate because coal is the most emissionsintensive fossil fuel.

They are fine words but take no account of the reality of coal use in New Zealand, or globally.

I say “coal use” because the criticism of banks that lend money to coal miners is misplaced.

The fact is that coal production is demand driven.

Coal miners don’t go out and mine because they feel like it but because there is demand for coal – demand driven globally by developing countries wanting a reasonable standard of living, and locally by businesses working hard to succeed in a competitive world.

Of the 2.8 million tonnes of New Zealand coal consumed domestically last year, 72% was used in industrial processes, and, to a lesser extent, in electricity generation.

Coal is used in steel and cement-making; in dairy, meat, fish, and other food processing; hothouse horticulture; in wool, timber and wood processing; in breweries; and to heat schools and hospitals.

As a source of process heat, coal in the South Island, and coal and gas in the North Island, cost roughly one-third the price of electricity – that is what drives the demand.

New Zealanders will wish to think carefully about calls to ban all new coal mining in New Zealand, or

16 Mining NZ » Autumn 2014

for our country to unilaterally increase the price of carbon without reference to global carbon prices.

If either course were followed, New Zealand would end up importing coal, if that were permitted or competitive, and, if not, would import more food, often from countries that use coal or gas in food production and do not have a price on carbon.

Certainly, New Zealand should move towards less emissions-intensive energy sources. We all want a lower-carbon economy.

But to achieve that will require technological advances, further cost reductions, and much increased commitment globally.

As matters stand, global progress towards reducing emissions has been woeful, despite efforts being made at a local level.

In New Zealand, liquid petroleum gas (LPG), light fuel oil, and wood chips or pellets, are still more expensive than coal as a heat source, although prices have been coming down - they are now less than that of electricity.

NZ Steel has been trialling 9000 tonnes of biomass-sourced carbon for steel-making, noting that 800,000 tonnes of coal were consumed at Glenbrook in 2012.

Again, it will take time to assess whether or not this product could make significant inroads into steel-making in New Zealand.

Genesis Energy’s electricity generation plant at Huntly has been increasingly using gas; 355 gigawatt-hours were generated from coal in the three months to 30 September 2013, down 46% from the same quarter a year earlier. One of Huntly’s four generators has been closed. Further closures are planned or are underway.

West Coast-based Taylor Coal has developed an additive to promote cleaner and more efficient burning of coal in boilers, as part of its customer focus (see story opposite).

“New Zealanders will wish to think carefully about calls to ban all new coal mining in New Zealand, or for our country to unilaterally increase the price of carbon Chris Baker

without reference to global carbon prices.”

Even without these developments, there is an ongoing role for coal, and this can be exercised responsibly. Over the last few years CRL Energy and other research providers have been exploring co-generation of industrial heat energy using coal and biomass, to achieve the twin goals of costeffectiveness, and emissions reductions.

These developments at home are consistent with overseas trends.

Globally, the International Energy Agency reports that coal provides 40% of electricity generation capacity, and this is predicted by to drop to onethird by 2035.

Many argue the “world is moving away from fossil fuels”, and certainly we are seeing the welcome development of new, lower-carbon and more efficient technologies.

But to argue that the transition is happening now and that New Zealand should stop mining coal denies the facts. Fossil fuels, including coal, will not be disappearing any time soon; far from it.

Green NGO’s will point out that IEA data shows that renewables were the fastest growing source of new electricity generation over the last 10 years.

They won’t point out that fossil fuels provided 60% of new generation over that same period.

With Japan having closed all 50 of its nuclear reactors, after the Fukishima disaster, and with Europe broadly following a similar path, coal imports into these parts of the world are increasing.

The UK is re-opening coal mines. According to US energy expert Dr Scott Tinker, 600 million people in India are waiting to be connected to the national grid, and that the additional and very necessary energy supply will be produced with coal.

For now, coal has a vital role to play as poorer countries improve their economic conditions. Try telling China, the world’s largest greenhouse gas emitter, to stop using coal.

This is a simple reality, worldwide and in New Zealand, and will remain so until new and better technologies are available. With 22 operating coal mines around the country, New Zealand is well placed to supply to overseas and local markets.

Our coal producers and researchers deserve to be supported, as an important part of New Zealand’s strategies on energy, business growth and economic development.

On climate change, we need to do our share but let’s be sensible about it and not flagellate ourselves.

Industry Focus » Coal

New additive reduces environmental impacts Jo Bailey

A

n award-winning fire-side additive product developed by Taylor Coal is now being used widely throughout the coal industry in the South Island, with “overwhelming success”, says Glenys Perkins.

“The development of this product proves there are positive measures that can be implemented to reduce the environmental impact of the combustion of fossil fuels.”

Ms Perkins is manager of the West Coast owned Canterbury-based company that provides premium West Coast coals for the South Island domestic industrial market.

She says around three years ago with rocketing prices for higher grade bituminous coals and the abundant availability of high moisture, lower energy, sub-bituminous coals, Taylor Coals embarked upon intensive research into the most efficient way to combust these sub-bituminous West Coast coals.

“The major issues we faced were dealing with the moisture before combustion, and mitigating the

We are here to promote the efficient use of coal as a viable secure energy source for South Island industries.”

ash properties of these coals. “It was a relatively simple process to engineer a design to address the moisture percentage with pre-heating units attached to the coal feed or warm air circulating systems.

“However it took some intensive research for us to reach an understanding of the coal ash chemistry, the behaviour during combustion, and effect on the overall performance of the individual and blended coals.”

Ms Perkins says once the individual coal’s ash properties were understood and the heavy minerals identified, Taylor Coal was able to develop a “fire side” additive to mitigate the negative effects of these minerals during the combustion process.

The company also researched ways to enhance the combustion of the coals, which resulted in the additive being developed with properties that “cleaned” the boiler and reduced particulate emissions. ”The additive has been just as successful in dealing with similar issues in the combustion of wood products in wood-fired boilers.

“We have now moved on to developing a more advanced version of the additive given the higher environmental standards of the energy market,” says Ms Perkins.

Last year, the initiative saw Taylor Coal named as a finalist at the Minerals West Coast Environment awards which reward a commitment to environmental excellence, the success of a project, the innovation and research employed, knowledge created, and a contribution to industry best practice.

Ms Perkins says this was a thrill for the company to be recognised for the development of the additive.

Taylor Coal researched ways to enhance the combustion of coals, which resulted in the additive being developed with properties that “cleaned” the boiler and reduced particulate emissions.

“We are here to promote the efficient use of coal as a viable secure energy source for South Island industries.”

She says the additive is not the company’s only environmental initiative.

“We are currently looking at ways to combine waste coal ash product, with other industrial byproducts, such as sawdust, bio mass waste, lime, and other waste to produce an organic soil enhancer.”

As part of its research Taylor Coal is offering a “coal in and ash out” service to key customers, removing the waste product produced from the coal combustion process. ”This is essentially a sterilised, highly mineralised product with the volatiles, carbon and moisture removed, which we have been combining with the other byproducts to produce the soil

enhancer. The research project is still in the early commercial stages, however there is a high level of enthusiasm for it from the market.

“We hope to commence commercial production within the next 12 months.”

Taylor Coal operates from a four hectare industrlal-zoned site at Rolleston, a strategic location from which it services the South Island market.

The company’s comprehensive range of products includes premium quality industrial and domestic coals, wood pellets, wood briquettes, humates, dolomite, micro-fine lime, and landscape rocks.

A new subsidiary called Tailored Energy Solutions has been formed to provide its “valued clients with more innovative energy sources”, says Ms Perkins.

If there’s one industry that needs an uninterrupted fuel supply, it’s mining.

Thanks to BP’s 24 hour monitoring system and electronic tank delivery method, we can ensure your fuel gauges are always on the right side of empty. Before your fuel supply gets a chance to get anywhere near it, our scheduling team are automatically alerted to replenish your supplies. To ensure your business is well topped up, contact Denis Sletcher today on 027 276 7915.

Autumn 2014 » Mining NZ 17

Gold » Industry News

Encouraging results from Sams Creek programme Karen Phelps MOD Resources Limited is preparing to test the theory that the Sams Creek gold resource may extend well outside the current main zone after the company’s drilling programme in 2013 indicated that the resource could be larger than previously expected and mineralisation may extend well beyond the current 1.0Moz estimated resource, says MOD managing director Julian Hanna.

“There’s a lot of work that can be done and we’re encouraged by the high grade we’ve seen from the drilling in 2013,” says Hanna.

“The next step is we’d like to extend the resource and test below the Main Zone to see if that deposit could be extended at depth.”

Located 100km north of the Reefton goldfield, Sams Creek is New Zealand’s largest undeveloped gold project.

MOD, through wholly-owned New Zealand subsidiary Sams Creek Gold Limited, is earning up to 80% of the Sams Creek joint venture from OceanaGold Corporation.

MOD currently owns 60% interest in the Sams Creek joint venture.

The majority of activities and expenditure undertaken by MOD during 2013 were directed to infill drilling of the mineral resource at Sams Creek.

The objective was to convert at least 550,000oz of the 1moz Inferred Mineral Resource at Sams Creek into the Indicated Mineral Resource category which was a requirement for MOD to increase its interest in the Sams Creek Joint Venture with OceanaGold Corporation from 40%-60%.

This was achieved and announced on October 92013.

There’s a lot of work that can be done and we’re encouraged by the high grade we’ve seen from the drilling in 2013.”

The resource infill drilling program at Sams Creek (Stage 2) was also successful in that drilling intersected several wide, high grade gold zones including 19.6m @ 6.0g/t, 16.2m @ 5.2g/t, 31.1m @ 3.55g/t and 63m @ 2.4g/t.

“In anyone’s language they’re very good intersections,” says Hanna.

“We had thought that this was 1.5 grams per tonne gold deposit but we have discovered that high grade gold zones at Sams Creek extend to 350m depth and remain open at depth and along strike.”

MOD plans to test the Stage 3 Target Area with a widely spaced drilling programme to test the potential for significant new resources and this should see a focus on large areas of porphyry interpreted to extend up to 1.5km west of Main Zone.

No start date for the programme has been determined.

“We’re still putting the data together and we’ve identified the potential drilling sites,” says hanna.

“But we have to go through an approval process with the Department of Conservation first so we haven’t set a time frame for that drilling but we’d like to do it sometime in 2014.”

Glass Earth Gold gets reborn with closer links to Newmont The world markets over

Hugh de Lacy Glass Earth Gold is no more but the Hauraki gold explorer and former Otago boutique producer has been reborn as Antipodes Gold Ltd, with closer links than before to global giant Newmont Gold at Waihi.

Along with its new name, the company has consolidated its shares on the basis of one new share for 10 old ones, and has appointed a new chief executive.

Tom Rabone, a lawyer from a prominent New Zealand mining family, has taken over from Glass Earth founder Simon Henderson, who remains on the board and will continue the exploration work which has seen the company spend about $40 million since it was established in 2002.

In describing the changes that have created Antipodes Gold as “drastic,” Rabone said they were driven “by the way of the world today and what people are prepared to back”.

“The world markets over the last few months have been demanding high-grade resource as well as profitability,” Rabone said.

“We’ve gone through significant pain but then turned round and seen what we believe to be a very good project that demands that we attempt to survive.

“We’re trying to deliver now with the most closely focused prospect we can come up with, the one that will deliver the biggest and most immediate result, rather than the blue sky operation.”

the last few months have been demanding highgrade resource as well as profitability.”

That prospect is Wharekirauponga (WKP) in which Antipodes retains 35 percent of a joint venture with Newmont, not far from Newmont’s Martha Pit and new Correnso underground mines.

Antipodes has set itself the goal of building its WKP holding up to 51% by sole-funding continuing exploration.

When that point is reached it will trigger a callback under the recently re-negotiated deal with Newmont.

Rabone said Antipodes was “openly working on the assumption that what we find would become a Newmont mine”.

Antipodes used to hold 100% of WKP, its signature discovery among a cluster of promising prospects it has identified in both islands, but between 2010 and 2013 Newmont’s continuing exploration earned it 65%. “[WKP] is clearly under-drilled, and our immediate focus is simply to drill into and understand it better, and in the process we will be creating a platform where we can start to estimate decent ounces, and where people can actually see there’s a potential mine in waiting,” Rabone said.

Suppliers of • Conveyor Equipment • Power Transmission • Industrial Hoses and Fittings • Industrial Products • Conveyor Vulcanising Services Products and services provided to Blackhead Quarry include: Assisted with conveyor design including: Power ratings and efficiencies of the Conveyor geared motor drive units Conveyor trough idler sets • Conveyor belting Conveyor belt endless joins • Conveyor drum lagging Wash hoses and fittings.

Quality Products - 24Hr, 7 day Service

O800 RUSSET 18 Mining NZ » Autumn 2014

Gold » Strategic Elements

Historic records an exciting find Jo Bailey ASX-listed West Australian company Strategic Elements Ltd (ASX:SOR) has struck gold in the bowels of the Wellington Archives, following a search for information described by one investor as “a cross between the Da Vinci Code and King Solomon’s Mines”.

Director Charles Murphy says a box of dusty records discovered at the Archives has revealed the company’s Golden Blocks project is “truly a forgotten, exceptionally high grade, early 1900’s goldfield”.

“It is very exciting,”” says Murphy.

“Up to this point we knew what the mines produced but had no idea of the consistently high grades of the Aorangi Mine. We also had very little information on the other five historic producing mines in the goldfield.”

An extraordinarily high average head-grade of primary ore at 46.9 g/t has been estimated from historic production records of the Aorangi Mine and a report from government officials discovered among the documents.

To provide context, the current average grade of a modern gold deposit is 1.01 g/t.

“To find a goldfield that has such high grades of historic production with free milling ore and no modern exploration is a fantastic opportunity. You just don’t find old goldfields like this that haven’t even been drilled.”

Murphy said the company had a broad team of people “ferreting out” as much information as they could find about Golden Blocks goldfield, when the records came to light. “We reviewed around 1000 pages of information which included a prospectus from a company exploring the site in the early 1930’s, independent geological reports, internal company reports, mines department reports and reports from mines inspectors who had been underground during this era.”

The exploration company records from 1932 revealed a section of the Aorangi mine running at over 5000 grams/tonne (g/t).

“It was exciting, but we were pretty sceptical without seeing the actual assay sheets.

“I rang around and spoke to John Isdale, curator at the Thames School of Mines Museum and incredibly he had all the records from that era.

“After looking through an extensive array of information, they managed to turn up the previously unknown underground exploration assays revealing 663.8g/t and an extraordinary 5324.5 g/t from a sample of selected specimens at Aorangi.”

Murphy says the company is “incredibly appreciative” of Mr Isdale’s help.

Resource geologist Tony Burgess revisits the Golden Blocks Goldfield “The assay sheets have given our earlier discoveries from the archives real credibility.”

The search also revealed an independent geological report on the goldfield from James Park, one of the eminent geologists of the time, which verified the exploration company had been underground and cleared out all the underground workings at Aorangi in the 1930’s as stated.

His report also said the “gold is free milling and easily recoverable”.

With the historic information in mind, Strategic Elements gathered some “top-tier technical experts” for a week-long field visit to the Aorangi mine in late March.

These included geologist Tony Burgess, who in 1978, as a masters student, completed his thesis on the Golden Blocks goldfield, and offered to reexamine the goldfield on a break from his discovery

To find a goldfield that has such high grades of historic production with free milling ore and no modern exploration is a fantastic opportunity.” work in Papua New Guinea. “Tony is an enormously successful resource geologist with an amazing track record, who was credited with adding more than 9M ounces of gold to reserves focusing on select, high-grade zones in PNG. It was fantastic to tap into his experience over the last 35 years.”

Leading underground mine development engineer and investigator John Taylor, who has 45 years international experience working on advanced exploration and pre-feasibility projects, led a small team investigating the underground workings in the Aorangi mine.

“John has spent years crawling through old mines mapping the historic workings, incorporating high technology methods and assessing the potential resource. He has a real passion for historic mines in New Zealand.”

Bringing together the expert team to move the project forward is Geoff Price, a senior management geologist with a successful track

record in drilling out deposits to rapidly increase the resource base.

“Geoff’s experience will assist us to get the technical team functioning at all levels.

“It’s a great project, but you need the right people to deliver it.”

Murphy says further investigation of the Aorangi mine along strike and at depth is the next step, and that the recent field trip has “introduced a range of potential targets” for the project.

“We’ll process the information and work out a plan of attack.

“With literally 100 years of knowledge and learning about geological and gold deposits around the world since this project was last mined, it is a fantastic opportunity.

“But we are also very conscious that like any mining project, it still has to go through all the regulatory hurdles and stages of approval. Most importantly, this includes environmental issues.”

Autumn 2014» Mining NZ 19

Focus » Industry People

Academic aims to make geostatistics accessible Jo Bailey

T

he success of an introductory two-day workshop ‘Real Geostatistics’ at last year’s NZ AusIMM conference could see renowned geo-statistician Dr Isobel Clark back in New Zealand this year.

“I am looking forward to coming back at some point in 2014 to offer a broader range of training programmes at a more advanced and practical level.” She hopes to run one of her advanced courses in New Zealand called BYO (Bring Your Own), where participants bring their own project data and work on it with guidance and supervision.

“A group such as this also interacts amongst themselves and they get to see problems and applications from the other participants. For me, this is immense fun.”

Dr Clark is a professional mining engineer from Scotland, who specialises in the technical evaluation of mineral resources and reserves at all stages in the life of a mine. She has more tthan over 40 years of experience in the practical application of computer-based design and evaluation methods.

Making geostatistics more accessible and easily understood continues to be a big part of her work.

“My specialty is in making the basics and the operation of techniques clear with a minimum of mathematics and a maximum of practical related experience. Participants leave with an understanding of how geostatistics works and hopefully, the skills to try it out for themselves.”

In the earlier days of geostatistics, papers were written in French or in such highly mathematical language that the potential user was unable to benefit from them.

20 Mining NZ » Autumn 2014

Geostatistics provided answers to many of the questions raised by other estimation processes.”

Over the years Dr Clark has published a vast amount of teaching materials, self-learning materials and books on geostatistic.

These including her groundbreaking introductory text ‘Practical Geostatistics 1979’ that she then later updated into a more complete textbook ‘Practical Geostatistics 2000’ with Bill Harper.

New Zealand Independent consulting geologist and mine engineer John Taylor, says these resources are a “must” for anyone getting into geostatistics.

“Isobel was one of the first people in the world to take a more down-to-earth and intuitive approach to geostatistics, unlike the French whose approach was almost un-interpretable.”

Taylor says Dr Clark has the ability to explain geostatistics in terms geologists can clearly understand.

“People get value for money with Isobel.

Everybody I spoke to following her recent course in New Zealand said it was well worth going to and they got a lot out of it.”

While in New Zealand for AusIMM, Dr Clark also presented her Real Geostatistics workshop to the Aranz Geo team (developers of Leapfrog software) in Christchurch.

Dr Isobel Clark: “My specialty is in making the basics and the operation of techniques clear with a minimum of mathematics and a maximum of practical related experience.

“They were a challenging and lively audience of mathematicians, software engineers and geologists who kept me busy.”

When Dr Clark began her studies in the UK in the 1960s it wasn’t possible for a woman to study engineering as an undergraduate. Her BSc was obtained at a small engineering-based University in Glasgow.

“I did my Masters in Biometrics because they were the only people teaching spatial statistics in 1969.

“My MSc project was actually on the size and distribution of craters on the moon.”

While working for the Department of Education and Science in London she saw a job advert for someone to teach statistics and computing in the Department of Mineral Resources Engineering at Imperial College.

“This led to my first consultancy job in grade control for Geevor Tin Mine in Cornwall. “After

that, my supervisor sent me to France to learn geostatistics.”

As someone who has always asked the “awkward questions” about how things work and why, Dr Clark says these studies resonated strongly with her.

“Geostatistics provided answers to many of the questions raised by other estimation processes.”

For the last 30 years, Dr Clark has been a director of Geostokos, an independent consultancy company based in central Scotland which services the entire minerals sector, and also provides expert services to environmental, agricultural, and wetland projects among others.

She travels the world running courses; providing on-the-job training; mentoring; and speaking at conferences. She is looking forward to returning to New Zealand, where there is the possibility of her working with students, university departments, and offering stand-alone courses.

Environment » MBC

Canine capers on the Coast Environmental management has well and truly gone to the dogs on the West Coast.

Kelly Deeks reports

E

nvironmental management solutions provider MBC now has on staff its own certified kiwi dog and handler, who are currently working on the West Coast at Solid Energy’s Stockton Opencast Mine, monitoring kiwi in areas disturbed by mining development.

MBC flora and fauna team manager Sonya Roxburgh says practitioner Lynne Maguire has become a certified dog handler.

This benefits the kiwi team by having a dog team available when required on the mine site.

“It has really helped having a local dog and dog handler available when we need them,” says Roxburgh. “We no longer have to negotiate on timing to bring someone in, and as Lynne and Mica are in Buller, they can do their work every day without having to travel from further afield.”

The certified kiwi dog is two-year-old New Zealand eye dog Mica, who has been trained with the intention that she would become a kiwi dog since Maguire got her as a young puppy.

Maguire says she chose a New Zealand eye dog as it is a breed she is familiar with, and felt she could work with well.

She says they are an intelligent breed that matures quickly, but of course there is always a risk when choosing a puppy that it won’t be up to the task. Fortunately that was not the case with Mica, and she became a fully certified kiwi dog at about 18 months of age.

“For the first six to eight months we worked solely on obedience training, to get Mica to a point where she would be able to do her interim registration,” Maguire says. “The obedience training has been foremost in everything she’s ever done. I got her up to the point where she was ready for full certification in April 2013.”

Following gaining their interim registration, dogs go on to protected species training. The certification is for both the dog and handler.

A big part of Mica’s training was taking her up there to get used to the noises and smells that are specific to a mining site....”

Mica at the ready.

Both Mica and Maguire have been inducted onto the mine site, and the familiarity they have with the site is a valuable tool in their work.

“A big part of Mica’s training was taking her up there to get used to the noises and smells that are specific to a mining site, such as the vehicles and the noise from the blasting,” Maguire says.

MBC has been monitoring the kiwi population at Stockton Mine since investigations began for the Cypress extension to the east of Stockton Mine.

“Quite a few kiwi were found in the area proposed for the extension, and also in other outer areas,” says Roxburgh.

“We found out the areas each bird was going into, and how much of those were areas that are going to be disturbed.”

So far no adult kiwis have needed to be translocated, but the ones that have been found are being monitored after transmitters have been attached to the birds, to make sure they are out of disturbance areas each morning before any operational work begins at the area under development on the mine.

Some kiwi may need to be moved in the future, and will be translocated to relocation projects in the South Island that are looking to build up their population of great spotted kiwis.

This breeding season, five kiwi eggs have been uplifted from the Stockton / Cypress areas and taken to Willowbank Wildlife Reserve in Christchurch. Once the chicks have hatched and are deemed to be healthy and able to live independently they will go to West Coast’s Paparoa Trust’s Bois Gentil kiwi crèche, then onto Rotoiti Nature Reserve to be released as sub-adults.

On patrol: two-year-old New Zealand eye dog Mica on patrol at the Stockton Mine with handler Lynne Maguire at the Stockton Mine.

• Flora & Fauna • Erosion Solutions • Waste Management • Invasive Species Control • Heights & Ropes • Environmental Monitoring • Effluent Management MBC has been monitoring the kiwi population at Stockton Mine since investigations began for the Cypress extension to the east of Stockton Mine.

Autumn 2014» Mining NZ 21

Minerals » BlueScope New Zealand Steel

New plant to lift iron sand exports Karen Phelps

B

lueScope New Zealand Steel is in the process of building the second and third modules of a new minerals separation plant at its Taharoa site which will help the company to increase its iron sand export capacity to 2.7 million tonnes per annum.

The construction is part of a shift by the company from a wet to a dry mining process at its Taharoa titanomagnetite (iron sand) mining site.

New Zealand Steel Minerals project director for the Taharoa expansion Murray Lye says that in a dry mining operation the handling and recirculation of water become even more important.

He says part of the project will involve putting in place a significant increase in tailings and water reticulation, including pipes, tailings booster pumps and recycle water collection ponds, which will enable the company to manage water use and recycle to a much greater degree than has historically been possible.

“We will be capturing and recycling as much of the water as we can. Ponds will be lined so we can retain and handle the water more effectively.”

In December last year NZ Steel signed up for a third shipping vessel for Taharoa, which is due to arrive at the end of 2015/early 2016. New Zealand Steel will charter a purpose built 175,000 tonne slurry loading vessel and spend a total of A$50m to expand the mine to provide the additional tonnes.

The additional vessel will give it another 1.3 million tonnes capacity taking production up to 4m tonnes per annum.

Lye says that this increase in exports will require the company to mine deeper into the deposit and further enhancements of the current mining operation will be necessary to increase the capacity.

• To page 25

The second and third modules of the new minerals separation plant under construction at Taharoa.

CITUMI is a specialist division of Hose Supplies New Zealand Limited, focusing on the supply of speciality products to the mining industries.

Proudly New Zealand owned and operated with over 200 years combined supply experience in the industry.

For all your requirements • Slurry and Muff Coupling Hose and Fittings • Rubber Expansion Joints • Steel Piping and Couplings • PVC Piping and Couplings

• • • • •

Vee Belt Drive Design and Supply Hydraulic Hose and Fittings Ventilation Caplamps and Chargers Tungsten Wear Parts

0800 744 673

MOUNT MAUNGANUI | AUCKLAND | CHRISTCHURCH

A reliable partner for your mining and civil projects - NZ wide Specialists in: QUARRY OVERBURDEN REMOVAL & DEVELOPMENT SPECIALISTS IN SILT CONTROL PLANT HIRE

EARTH DAM CONSTRUCTION OPEN CUT MINING ROADING & MOTORWAY CONSTRUCTION

Proud to be associated with the Taharoa Iron Sands Project

Phone: 07 823 5944, email: brosross@xtra.co.nz, www.crdevelopments.co.nz

22 Mining NZ » Autumn 2014

www.hosesupplies.co.nz Email: john.kelly@hosesupplies.co.nz

Read More Online VISIT OUR WEBSITE

www.waterfordpress.co.nz FOR MORE INFORMATION

Key Partners Alminco Parker Dixon Minsup Alfa Gomma Victaulic Hose Tek Unaflex Plascorp Gilbert Gray Kennametal

Minerals Âť BlueScope New Zealand Steel

Part of the new plant project includes a significant increase in tailings and water reticulation, including pipes, tailings booster pumps and recycle water collection ponds.

Autumn 2014Âť Mining NZ 23

Minerals » BlueScope New Zealand Steel

Top, the Taharoa mine site. Above, new vessel Taharoa Destiny loading. Phase one of the expansion involved relocating the company’s existing off-shore buoy onto a new mooring and the pipeline extended 530 metres further out to sea.

Post To:

Name:

Phone:

Business name:

Fax:

Your position:

Signature:

Industry type: Postal address:

Waterford Press P O Box 37 346, Christchurch www.waterfordpress.co.nz Ph: 03 983 5500 Fax: 03 983 5552 Please tick your payment option Invoice me Cheque enclosed

1 YEAR’S SUBSCRIPTION FOR ONLY $34.50 (Inc GST) 24 Mining NZ » Autumn 2014

To ensure your copy arrives at your desk, join our mailing list TODAY for PROMPT delivery

Minerals » BlueScope New Zealand Steel

Plant to lift iron sand exports • From page 22 “This will include additions to the minerals separation plant and dry mining capability. It is likely to have a dredge component so we can go deeper into the mining deposit,” he says.

Phase one of the Taharoa expansion involved relocating the company’s existing off-shore buoy (where the iron sand is transported from land to be loaded onto vessels) onto a new mooring and the pipeline extended 530 metres further out to sea.

The vessel Taharoa Destiny arrived to replace the older existing Taharoa Express, which had reached the end of its life. Nineteen loadings have been completed by the Taharoa Destiny to date.

Phase two involved the mining method change to dry mining using buried feeders/dozer traps.

The first dozer trap has been completed and the other two required to complete the project will be in production by June.

A new minerals processing plant to increase production rate to 2.7m tonnes per annum and process a broader range of mined ore also form part of the second phase of the project. The second vessel will arrive mid-2015.

Lye says that exporting four million tonnes of iron sand per year is a big leap for the company from the one million tonnes it was producing previously.

Iron sand export sales help us to offset the volatility in the iron ore market.”

“Having an export iron sand resource is an offset for BlueScope against iron ore pricing fluctuations.

“Iron sand export sales help us to offset the volatility in the iron ore market,” he explains.

For the first 30 years the company mined the southern area of Taharoa, which held a rich deposit.

Since 2001 the company has mined the central area, which contains a slightly lower grade of the deposit compared with the southern area, says Lye. “The geological structure is different in the central area so the previous dredging operation wasn’t the right method for the future, which is why we have had to move to a different mining method and significantly invest in the operation.”

The Taharoa mine has operated for more than 40 years and Lye says that New Zealand Steel considers there are sufficient iron sands available to produce at four million tonnes per annum for at least the next 15 years.

Lawrence Holden M 0275 853 827 P 07 873 7881 Drainage | Site work | Farm races | Tree work | Spreading metal

The new minerals processing plant will increase the iron sand production rate to 2.7 million tonnes per annum and process a broader range of mined ore.

Our goal is ‘to be the preferred supplier of Infrastructural Services for the Central Western North Island’.

• Road Maintenance • Road Construction • Pavement Stabilisation • Chip Sealing • Earthworks • Drainage • Quarry Crushing • Aggregate Supply • Heavy Haulage • Subdivisions and Car Parks

Bulk cartage | Transit work | Contouring | Dairy conversion Environmental control work | Forestry

Autumn 2014» Mining NZ 25

Minerals » Industry News

Longwoods Range may have potential as platinum source Platinum is a vital component in some fields of chemical

Peter Owens The Longwood Range of mountains in Western Southland has a surprisingly wide range of valuable metals in its composition.

Over the years gold and coal have both been mined commercially.

However many people, including locals, are unaware that the small Western Southland town of Orepuki - situated at the southern foot of the range - also operated a platinum smelter in the early 20th century.

Metallurgists have estimated that the Longwood Range may have platinum in its soils worth up to $US2 billion.

They have noted the astonishing similarity of the Longwood’s geographical infrastructure to those platinum producing areas of North America and South Africa.

It has also not gone unnoticed by New Zealand Petroleum and Minerals which manages the New Zealand Government’s oil, gas, mineral and coal resources, known as the Crown Mineral Estate.

Last year the New Zealand Government announced it was about to begin consultation on proposals to explore for the mining of platinum in about 4400sqkm of the South Island, of which 300sqkm are situated in the very Deep South.

This consists of four blocks of conservation land in the Longwood Range.

engineering and electronics and has maintained its value well above that of gold.

The “Platinum New Zealand 2013 Competitive Tender” opened in September last year and is set to close at the end of April.

The agency says sensitive conservation land protected under the fourth schedule to the Crown Minerals Act was excluded from the tender process as were any World Heritage sites in the designated areas.

Platinum is a vital component in some fields of chemical engineering and electronics and has maintained its value well above that of gold.

Currently it is worth $70 per gram on world markets and there is renewed interest in the extraction of the precious metal from the Longwoods.

However, mining industry lobby group Straterra says the chances of finding and mining commercial quantities of platinum are about one in one thousand.

University of Otago geologist, Professor David Crew is very familiar with the Longwood Range and its composition.

Crew says there are at least two know sources of platinum in the range and that there

Outstanding accuracy and reliability in conveyor belt weighing

has been some research into viable methods of locating and extracting the metal.

Crew is aware that the price of platinum will have to increase significantly before any mining company would consider an investment in research and extraction.

He also says the establishment of a platinum mining operation would bring with it a large number of problems associated with the environment, particularly water.

However, there is a history of successful platinum mining in the Deep South.

The Orepuki platinum smelter ceased operations in 1907, the smelter had processed 47kg of platinum.

For many years locals carried on desultory mining of the Orepuki Beach for gold and their techniques were successfully transferred to Gillespie’s Beach in South Westland.

In the mining operations on the Orepuki Beach, the locals often retrieved small specks of platinum in their equipment.

These came from local streams on the Longwoods that washed down to the sea near Orepuki.

Plans unveiled for scheelite exploration New Zealand Tungsten Mining Limited (NZTM) has applied to the Queenstown Lakes District Council for a drilling exploration licence. It relates to the exploration of land near Glenorchy for scheelite.

If granted, the licence would be a permit to drill on Mount Alfred which lies in Earnslaw Station, just north of Glenorchy and also to drill between the Dart River and Diamond Lake.

NZTM has indicated in its application that both hand-held and petroleum operated drills would be used in the operations.

It would consist of drilling for core samples in the rock up to six metres deep which would then be filled in by the company.

These samples will then be analysed to see whether it would be economic to mine for scheelite.

It is now almost 30 years since the Glenorchy area sustained a mini-boom in scheelite mining.

The mineral is also found at Macraes Flat in East Otago and at Wakamarina in Marlborough not far from Blenheim.

Scheelite (CaWO3) is the main ore of tungsten and is found in quartz veins. It has the almost unique property of fluorescing under ultraviolet light.

The mountainous country around Glenorchy at the head of Lake Wakatipu has a long history of scheelite mining with some mines being located as high as 200 metres above sea level.

Accurate and dependable industrial weighing

<<<<<<<<

• Measure granular or powdered material • Stand alone or connect to other devices for blending • Used by successful producers world-wide

Flo-Way

®

Solids Impact Flow Meter

17 Hyland Crescent, Rotorua, New Zealand.

Ph 07 349 4700 • Fax 07 349 4800

26 Mining NZ » Autumn 2014

Minerals » Chatham Rock Phosphate

Mining permit a big step for CRP Jo Bailey

C

hatham Rock Phosphate (CRP) continues to take positive strides towards production of its strategic, multi-million tonne organic rock phosphate deposit on the Chatham Rise.

A Mining Permit was granted by the Ministry of Business, Innovation and Employment’s New Zealand Petroleum and Minerals branch in December, which was a major milestone for CRP, says managing director Chris Castle.

“It significantly de-risks the company as it means we’re halfway to being fully permitted.

“It was a lengthy process. We had hoped to gain the permit in three months following our application but it took 14 months in the end.”

He says this was partly due to the permit being the first granted under the amended Crown Minerals Act which came into force in May 2013.

“We had applied under the previous legislation, so our application was transferred to the new regime.

“With new staff working to a new Act, the decision making process took a bit longer than expected.”

Castle says that the project will contribute around $900 million to the New Zealand economy and around $250 million a year in exports and import substitution.

Chatham Rise rock phosphate has proved effective as an ultra-low cadmium direct-application fertiliser which can reduce run-off effects on New Zealand waterways by up to 80 percent, he says.

“We have a strong business case for what is a very strategic material. If there was a disruption in supplies from Morocco where most of the world’s phosphate is currently mined, it would create huge issues for the planet.”

Castle says CRP has used the time while the Mining Permit was being considered to significantly improve its Marine Consent application.

This was submitted to the Environmental Protection Authority at the end of March, and is the final remaining milestone before mining can commence.

Chatham Rock Phosphate has plans to mine a multi-million tonne organic rock phosphate deposit on the Chatham Rise.

“We’ve gathered a lot of new information that answers key questions interested parties wanted to know.

“We have also had sections of our Environmental Impact Assessment peer reviewed by overseas experts who have suggested improvements.”

He says CRP’s current application is a “much better document” than the preliminary version

Chris Castle: “We have a strong business case for what is a very strategic material.”

If there was a disruption in supplies from Morocco where most of the world’s phosphate is currently mined, it would create huge issues for the planet.” written last April, and the company is confident of a successful outcome to the process.

“Unlike the Mining Consent, the Marine Consent process has a statutory time limit of six months before a decision has to be made.

“All going well we will be fully permitted by November this year and mining by late 2016 or early 2017.”

In the last few months, Castle has made repeat visits to London to meet potential UK-based investors, who indicated their interest in investing by way of private placement, subject to CRP establishing a secondary listing on the London AIM market.

The CRP board agreed to proceed with the AIM listing, which should be completed in the next few months.

“We’re working through the documentation for the listing, a process that is running parallel with our attractively priced rights issue to existing shareholders which we announced in mid-March,’ says Castle.

Shareholders will receive renounceable rights to one new share at $0.15 per share for every ten shares held.

CRP will issue 14,422,529 shares to raise approximately $2.1 million under the rights issue, which will be fully underwritten.

In other “good news”, CRP has started working on an updated resource statement which incorporates new sample data gained at sea in 2011 and 2012.

“The statement will meet the Canadian standard 43101 which is a bit like a JORC report here. It is a requirement of our listing on any other secondary market.”

Castle says being an exhibitor for the first time at the Prospectors and Developers Association of Canada (PDAC) convention - the world’s largest minerals investment and trade show - held in February, was “beyond his wildest dreams” in terms of the attention CRP attracted.

“PDAC is the mecca for mining and we had a booth in a very good location near one of the main entrances. Numerous brokers talked to us, which certainly justified the effort in going there.”

Castle works with a large team of up to 20 consultants and firms contracted to CRP on numerous projects.

“I am the frontperson most of the time but everyone else is working really hard. It’s been seven years since we first applied for the prospecting license.

“However it usually takes around 10 years to set up any mine. Time goes by quickly when you’re having fun.”

Suppliers of:

www.mineralscorp.com

sales@industrial-minerals.co.nz

Drilling Fluids Bentonites Drilling Fluid Engineers Drilling Fluid Programs Core Orientation Tools Borehole Survey Systems Diamond Drill Bits Sandblasting Products Autumn 2014 » Mining NZ 27

Industry News »

CRL Energy opens combustion facility Karen Phelps CRL Energy has opened a joint-venture spontaneous combustion laboratory in Brisbane, which is a core capability in the company’s a new mine services business.

Called CB3 the new venture is being undertaken with highly respected scientist and chartered professional Dr Basil Beamish, who brings his vast expertise in spontaneous combustion to the company.

James Pope, CRL Energy general manager South Island, says the venture seeks to address demand from the industry for more prompt processing of spontaneous combustion analysis tests to give faster access to results both in New Zealand and across the Tasman.

“Previously the only facilities processing these tests for the Australasia region were located in Australia.

“As spontaneous combustion is a principle hazard in the mining industry it is extremely important for mining operations to be able to have better access to testing and results,” he says.

“We can now offer mining companies turnaround of testing in just one to two weeks for single samples.

“This is a big difference compared to the months this used to take due to industry build up and demand.

“The more readily available analysis means that mining companies can test more frequently, building up a better data set for more efficient management of this potential hazard.”

CB3 and CRL offer spontaneous combustion testing as well as expertise on gas, ventilation, dust and friction ignition hazards in mines.

Research underpinning this is supported by the Coal Association and Callaghan Innovation.

With custom-built testing facilities in both Australia and New Zealand, CB3 has customers across Australia, New Zealand, the United States and Indonesia.

The more readily available analysis means that mining companies can test more frequently, building up a better data set for more efficient management of this potential hazard.”

Pope says that CB3 plans to hold training courses in New Zealand to help upskill the industry in this important area.

“We are also developing new tests which will provide industry with even more information and better management tools.”

CRL Energy Ltd is an energy, minerals, and environmental research and consulting company offering technical services in minerals exploration programme management, geological mapping and 3D modelling, resource evaluation and certification, hydrogeology, coal seam gas content analysis, mine drainage treatment and site remediation, combustion carbonisation and gasification, and air emissions and stack testing.

CRL Energy’s government-supported Ministry of Business Innovation and Employment research programmes include environmental protocols for coal and mineral mining, coal gasification, clean energy production from coal and biomass, and coal-based nanomaterials.

A comprehensive range of coal, minerals and water analytical services is offered from laboratories in Gracefield, Christchurch, Greymouth, Westport and Hamilton.

New Brightwater Sales Manager Brett Newcombe, right, has been appointed to the role of Engineering Projects National Sales Manager for Brightwater Engineering New Zealand.

In his new role Brett will be based in Nelson and responsible for the management of all Engineering Projects sales activities throughout New Zealand.

Newcombe comes to Brightwater with over 20 years of sales and management experience.

His former role was as Sales Manager for Orica Chemicals NZ Ltd where he was responsible for managing a team of account managers as well as all aspects of sales and commercial management.

Total Hose & Fitting Service

28 Mining NZ » Autumn 2014

The new Blick Industrial building in Hamilton.

New premises ideal for Blick New Zealand’s drilling supply company Blick Industrial, has moved into a new custom-built premises in Hamilton.

The new building in Hamilton is at 21 Kahu Crescent, Te Rapa.

Blick Industrial director Hamish Moore says the continued growth of both customers and range has prompted the move to the new premises.

“The location is the key factors for us,” says Moore. “Hamilton is a great distribution hub

enabling following business day delivery for most stocked products from Kaitaia to Bluff, and everywhere in between.”

Blick Industrial is a nationwide distributor of a wide range of international brands including MI Swaco, Technidrill coring equipment, Jet Lube grease & Reflex core orientation tools among others.

Blick Industrial also utilise a contract warehousing service in Christchurch to cater for its southern clients.

ENZED sets industry standard with super flexible spiral hose New Zealand mobile hydraulic hose and connector specialist ENZED has introduced an extremely compact high pressure spiral hose, which has a bend radius 50 percent smaller than its conventional equivalent.

Manufactured to strict ISO 18752-DC specifications, Parker’s Compact Spiral™Hose in 5000psi and 6000psi specifications is a world-first.

Parker Hannifin group product manager, Domenic Gerace says the Compact Spiral Hose offers “significant advantages in ease of installation, product size and weight, inventory savings and much more”.

“The Compact Spiral Hose is the most significant advancement in hydraulic hose since the introduction of Parker’s No-Skive connection technology more than 25 years ago,” says “It delivers substantial performance and value for systems with high pressure, high impulse applications. These can include injection moulding, oil and gas, and large mobile equipment including off-highway, construction, forestry and mining.

“Customer surveys in these markets indicate that pressure rating, routing ease, abrasion resistance, bend radius and weight are top priorities in hose selection for these applications.

“Compact Spiral™ Hose sets new industry standards in all of those criteria, so ENZED

call 0800 4 ENZED or visit www.enzed.co.nz

customers can be confident that they are getting the most innovative and highest quality hydraulic hose system available today.”

Boasting half the bend radius of its SAE spiral hose equivalent, Compact Spiral can reduce the total amount of hose required from 20 to 55 percent. Compact Spiral also features an Outside Diameter (O.D) that is nearly 30 percent smaller than conventional spiral hose, resulting in one-third less physical effort in bending and routing.

Its smaller O.D also enables more hose to be fitted into tight quarters and allows for an increase in internal hose size if required for better flow characteristics.

Compact Spiral is tested to 2,000,000 impulse cycles - two times the ISO 18752-DC impulse cycle standard and four times the SAE impulse requirement, greatly extending service times between replacements.

Parker’s highly abrasion-resistant ‘Tough Cover’ will outlast all non-abrasion resistant covers and is designed to deliver long, dependable service life in rigorous and/or remote installations.

Compact Spiral simplifies the hose selection process - 787TC covers all 5000psi applications and 797TC meets all 6000psi hose requirements.

Having one hose with two clearly defined pressure ratings eliminates any confusion.

Industry Comment » Tax

Grappling with tax base erosion T

here has been a lot of coverage in the media recently about big multinationals not paying their fair share of tax.

Companies such as Amazon, Google and Starbucks have even been summoned to appear before Parliamentary committees in the UK to explain why they have paid little or no tax there.

The term that is being used is BEPS. BEPS stands for “base erosion and profit shifting”.

Base erosion refers to the erosion of a countries’ tax base.

Each country decides what it will and won’t tax and at what rates, for instance most countries tax capital gains but New Zealand doesn’t. This is referred to as the tax base of a country.

Profit shifting is the ability for a multinational company to move profits to low or no tax countries using mechanisms such as transfer pricing. Transfer pricing is a set of rules that determines what the arm’s length price for a transaction should be (such as the interest rate on a loan or the sale of product from a manufacturer to a retailer).

A lot of what transfer pricing is determining who bears the risk and therefore should earn the profits. For instance, whilst a multinational may sell goods into New Zealand, they may never own these goods and as such bear little risk.

Transfer pricing rules would allow only a low profit to be earned in New Zealand, whereas the offshore group company that owns the goods would need to earn a higher profit to compensate it for the risk taken.

Multinational companies can largely decide where these profits are located – and often choose to do so in low or no tax countries.

This leaves countries like New Zealand with a very small part of global profits and as such not much tax. This is base erosion in action.

In response to this there are proposed new

Don MacKenzie

rules which will result in increased information sharing between tax authorities.

The idea behind this information sharing is to limit the ability of multinationals to move profits to low or no tax countries.

Information shared would include the size of their operations, the profits earned, taxes paid, and where those taxes are paid.

Multinationals would be forced to provide detailed information on their worldwide group in every country in which they operate.

Any such rules would have the potential to increase the tax compliance costs for multinationals considerably. In addition the rules could have perverse outcomes for New Zealand – and may even result in less tax collected here rather than more.

Aggressive foreign tax authorities may use the country-by-country information to gain a detailed understanding of where and how the multinationals are paying and not paying tax.

This would enable them to claim more of the global tax take at the expense of countries such as New Zealand.

Such a trend is already beginning to emerge in Australia. Australia has greatly increased the amount of information multinationals are required to prepare and disclose with their tax return.

This information is used by the Australian Taxation Office to determine which multinationals

its investigation team will focus on. If foreign countries use the information gathered in an aggressive way, multinationals doing business in New Zealand may face more audit activity offshore.

To manage the risk of dealing with complex and drawn out audits in foreign countries these companies may leave more profit offshore to be taxed there instead of New Zealand. This will result in less tax being paid in New Zealand.

Unfortunately the potential for unintended adverse consequences does not stop there.

In response Inland Revenue could be forced to

clamp down and potentially adopt extreme views when applying the current law to prevent erosion of New Zealand’s tax base.

The New Zealand public may lose confidence in the tax system if no action is taken and multinationals are seen as not paying their fair share of tax here.

So whilst BEPS is a real concern for countries like New Zealand, it is critical that the cure is not worse than the disease. The solution is not simple and straight forward and needs to be thought through very carefully.

Don MacKenzie (Partner - Deloitte)

Autumn 2014 » Mining NZ 29

cantly reducing down

OIL DISTRIBUTORS KEEPING NEW ZEALAND INDUSTRY MOVING