Australia: Land of Plenty

By Mike O'Driscoll
Published: Tuesday, 23 March 2010

Despite a recent dip in exploration expenditure, Australia remains a host for key industrial mineral targets, some close to fruition, spurred on by state government initiatives

Australia is not called the “Land of Plenty” for nothing: and in the minerals and mining industry the country ranks as one of the world’s leaders. The giant commodities of bauxite, iron ore, coal, diamonds, base metals and gold dominate Australia’s mining industry. However, the country is an important source for a range of industrial minerals, and this looks set to expand significantly in the near future.

Australia is perhaps most famous for ranking as the world’s largest producer of mineral sands (ie. titanium minerals and zircon see table). Other notable Australian minerals which feed export markets include garnet, magnesite (and its derivatives), talc, silica sand, and salt.

The country hosts an abundance of mineral resources, and of significance is that many of these remain unexplored and undeveloped. Hence there is a very vibrant mineral exploration and development industry. With increased demand from world markets, prospects for new industrial mineral supply sources for certain minerals in Australia appear very promising.


On your marks, get set: trucks await the imminent
green light at the Mt Cattlin lithium project, Western
Australia, under development by Galaxy Resources Ltd.
Galaxy Resources Ltd


Exploration given a reality check

Unsurprisingly, Australia’s mineral exploration sector took a hit with the recent recession. Australian mineral exploration spending in 2008-09 dropped by 9.7% to A$2,223.1m.($2,048m.) from its record high of 2007-08, of which 38% was spent on new deposit exploration.

Northern Territory was the only state which recorded an increase in exploration during 2008-09, with spending rising by 10%.

However, Geoscience Australia reported that the downturn in exploration expenditure was actually smaller than anticipated. Declines in gold and base metal exploration were offset by increased exploration in “Others”, which included phosphate.

But the government organisation is aware that Australia must not get complacent about its mineral rich resources always being relied on by world markets. Earlier this year, Dr James Johnson, chief of Geoscience Australia’s Onshore Energy and Minerals Division, stated: “Australian mineral projects are being increasingly ranked by multinational companies against investment returns from other projects worldwide, resulting in a number of recent mine closures in Australia.”

This reality check has reinforced the government’s view that investment in exploration and in mineral processing to improve recovery rates is essential if Australia wishes to remain a leading mineral producer. A range of state government initiatives are helping get this on track (see panel).

This will help boost potential for new industrial mineral developments, as will the forecast for Australia’s economic growth. This was assumed to average 1.5% 2008-09, and is projected to strengthen to 3% in 2010-11, and increase to 4% per annum towards 2014-15.


Australian industrial minerals production

Mineral Production (‘000s tonnes)
Apatite 5.2
Alumina, fused 50
Bauxite (abrasive grade) 185.7
Bentonite 100
Diatomite 35
Dolomite 27.1
Feldspar 100
Garnet 290.8
Gypsum 4,000.00
Kaolin 213
Lithium (spodumene concentrate) 223.7
Limestone 8,000.00
Magnesite 126
Perlite 6.9
Phosphate 2154
Salt 11,500
Silica sand 3,000.00
Talc 150
Titanium minerals
  Ilmenite concentrate 1,869
  Leucoxene concentrate 134
  Rutile concentrate 300
  Synthetic rutile 726
  Titanium dioxide pigment 221
Vermiculite 15
Zeolite 1.1
Zircon concentrate 513
Compiled from a variety of sources
issuing production data for 2007-2009,
including ABARE; Geoscience Australia;
state government authorities; USGS; BGS.


Industrial mineral targets

According to Geoscience Australia, the economic demonstrated resources (EDR) for mineral sands decreased in 2008, while those for antimony, bauxite, magnesite, and phosphate remained unchanged. However, the EDR for lithium, rare earths, and zircon all increased.

The table on p.48&50 highlights 46 industrial mineral projects, which collectively have 51 mineral targets. The list is by no means complete, but does attempt to include the main projects of interest and significance to world markets at present.

The minerals that appear to be receiving the most attention are clearly those for which there is specific demand in world markets, and to some extent they may even be classified as “strategic” owing to their limited production elsewhere in the world.

Unsurprisingly, owing to vast resources (57.5m. tonnes JORC proven and probable reserves), heavy minerals represent the bulk of these projects (19). The key target areas in Australia for heavy minerals are the established Perth Basin (north of Perth, Western Australia), and the recently and strongly emerging Murray Basin (New South Wales, Victoria, and South Australia) and Eucla Basin (Western Australia, South Australia).

During 2008-09, several mineral sands projects were put on hold and their plans deferred, although interest in realising zircon-rich deposits remains keen.

The second most popular mineral target grouping is for phosphate (9 projects). Australia hosts 81.6m. tonnes of JORC proven and probable reserves of phosphate rock. Here we have a key fertiliser mineral which, despite the recent slump in agrimarkets, is very much on developers’ radars as increased future demand is anticipated. A number of phosphate projects worldwide are receiving attention, and few appear to be in the Asia-Pacific region (see p.8-9).

Kaolin is next with five projects. Here we have a case of specific grades of kaolin being developed and tested for penetration of specific Asian markets: coating grade kaolin for paper and kaolin for low carbon cement applications.


Australian industrial mineral project by state (see p.48&50 for details)




With an estimated production of >90m. tonnes of paper in 2009, China is now the world’s largest papermaker, with capacity expected to increase further. Although some domestic kaolin grades have improved, China relies on imports (from Brazil and the USA) to meet the increasing requirements for coating grade kaolin.

Thus kaolin developers in Australia clearly perceive an opportunity here to supply China. WA Kaolin Holding Pty Ltd appears to be ahead of the pack in this regard.

Other projects concern antimony, garnet, diatomite, sodium bicarbonate, feldspar, apatite, magnesite, quartz, and salt.

However, on the “strategic” case, we can include the keen interest in developing lithium, rare earths, fluorspar, and graphite.

Regarding rare earths (RE), it has been well documented already that with over 95% of the world’s RE raw material supply restricted to China, and increasingly that supply’s use restricted to within China as exports decline, future world demand requirements must be met by new or revived rare earth sources outside China.

In Australia, there exists a considerable RE resource at Mt Weld, Western Australia, which after a long period of promise with various fits and starts, has, with impeccable timing, recently gained additional funding to restart its development programme.

However, Mt Weld is not the only RE resource in Australia, the country hosts 1.65m. tonnes of EDR REO, and several other projects are now receiving attention as the ramifications of the “Chinese factor” are more widely understood.

Global sources of lithium, while not as scarce as commercially developed RE deposits, are nevertheless few and far between. With the advent of the electric vehicle revolution and Li-ion battery consumption in a host of other modern appliances, the search for lithium sources easily matches that of rare earths (see p.31 for a global round-up).

Of all the lithium projects worldwide, Western Australia’s Mt Cattlin project, under development by Galaxy Resources Ltd is the closest to fruition. Ground has already been broken for mine site construction, and the processing plant in China receiving the ore is looking to be commissioned by Q3 2010.

Although not at an advanced stage, Australia’s Speewah fluorspar deposit, Western Australia, and Uley graphite deposit, South Australia, are both receiving attention. Again, the China factor for both minerals reduced production and reduced exports has tightened world supply in recent years and consumers and developers are being driven to secure alternative supply sources.

In five years time, our Australian projects table will no doubt require updating. But in the present climate, it is likely that some of these projects will have come to fruition, and be replaced by a new generation of discoveries and prospects.


Government initiatives to aid exploration

Geoscience Australia

5 year A$59m. geoscience programme.

New South Wales

New Frontiers A$16.5m. initiative, 2008 to 2011.

Northern Territory

Bringing Forward Discovery, four year, A$14.4m. programme commenced 2007-08.

Queensland

Smart Exploration and Smart Mining Ð Future Prosperity programmes, A$50m. from 2005-06 to 2009-10.South Australia

Plan for Accelerating Exploration (PACE), 7 years, $30.9m.

Tasmania

2009-10 is final year of TasExplore, 4 year $5.05m. programme.

Victoria

Rediscover Victoria , 4 year, A$5m. initiative.

Western Australia

In April 2009, start of 5 year, A$80m. Exploration Incentive Scheme (EIS).



Australian industrial mineral projects by state*

Project name Mineral Location Company Remarks/status
New South Wales
Dubbo zirconia zirconia, yttria, tantalum, niobium, rare earths 20km south of Dubbo Alkane Resources Ltd 35.7m. t measured resource, incl. 1.96% ZrO2,  0.745% total REO; pilot plant late 2010
Snapper rutile, zircon, ilmenite, leucoxene 175km south-east Broken Hill Bemax Resources NL approved; reserves 563,000 t zircon, 948,000 tonnes rutile, 538,000 t leucoxene, 2.6m. tonnes ilmenite
Wild Cattle Creek stibnite (antimony) Bielsdown Anchor Resources Ltd 880,000 t 1.99% Sb; drilling programme
Northern Territory
Harts Range garnet 170km north-east Alice Springs Olympia Resources Ltd 2.7m. t garnet; construction 2010
Highland Plains phosphate 350km north-west Mt Isa Phosphate Australia Ltd inferred resource 56m. t 16% P2O5; plans 2-3m. tpa; under evaluation
GeolSec phosphate Rum Jungle Korab Resources Ltd 1.3 m. t 12% P2O5; plan 10,000 tpa 2010
Nolans rare earths, phosphate 135km north-west Alice Springs Arafura Resources Ltd 30.3m. t 12.9% P2O5, 2.8% REO; definitive FS in progress; 20,000 tpa REO 2013
Wonarah phosphate 250km east Tennant Creek Minemakers Ltd Wonarah 330m. tonnes 18.9% P2O5, Arruwurra 131m. t 18.6 P2O5; production mid-2010
Queensland
Conjuboy diatomite 30km north-west Greenvale ADE  Ltd under evaluation
D-Tree DSO phosphate 125km north-west Mt Isa Legend International Holdings Inc. plans 5m. tpa 30-34% P2O5; PFS in progress; 4m. tpa offtake with IFFCO, India
Grafton Soda Range sodium bicarbonate 23km north-west Cairns Pacific Environmin Ltd in-situ resource 2.2m. t sodium bicarbonate; plans to pump brines to surface
Horse Creek phosphate Bungalien GBM Resources Ltd
PHM South phosphate 150km south Mt Isa Krucible Metals Ltd Inferred resource 19.3m. t 19.0% P2O5; plans 0.6m. tpa 32% P2O5 for 6 years
Skardon River Kaolin kaolin 85km north Weipa ACC Ecominerals Ltd proven reserves 737,000 t, yielding 520,000 t kaolin; at “marketing roll out stage”; targeting low C cement
Wateranga ilmenite, feldspar, apatite, zircon, rutile, corundum, magnetite 70km south-west Bundaberg Queensland Industrial Minerals Ltd probable reserve 47.2m. t, 4% ilmenite, 14.6% feldspar; plans 3.74m. tpa ore, 500,000 tpa processed
South Australia
Poochera kaolin Carey’s Well Minotaur Exploration Ltd inferred resource 20m. t; pilot plant testing; initial plans 40,000-50,000 tpa, increasing to 500,000 tpa of hydrous kaolin at full scale.
Tripitaka heavy minerals Tripitaka Iluka Resources Ltd 42m. 2.4% HM, 1m. tonnes in situ HM, 65%  zircon
Uley Graphite graphite 23km Port Lincoln Strategic Energy Resources Ltd total resource 4m. tonnes 8.1% C; further drilling proposed
Tasmania
Arthur River magnesite Arthur River, north-west Tasmania Beacon Hill Resources Plc 13m. t measured resource
Maydena quartzite South-central Tasmania Maydena Sands Pty Ltd
Moina fluorspar 50km south Burnie Minemakers Ltd 26.5m. t 18% fluorspar
Victoria
Echo rutile, zircon near Douglas, Murray Basin Iluka Resources Ltd 25,000 tpa zircon, deferred in 2009
Donald zircon 13km  east of Minyip Donald Mineral Sands Pty (Astron Ltd) plan 7.5m. crude tpa, 0.5m. tpa HM concentrate export to  China
Creswick quartz Creswick Creswick Quartz Pty Ltd 1m. t in old Au tailings; plan 100,000 tpa plant for high purity markets
Murray Basin Stage 2 rutile, zircon Ouyen, Kulwin, Woornack, Rownack, and Pirro deposits Iluka Resources Ltd mine life 2009-2014; initial mining (Kulwin) delayed.
Project name Mineral Location Company Remarks/status
WIM 150 zircon 20km south-east Horsham Australian Zircon NL resource of 452m. t, 5.9% HM, 12.5m. tonnes Ti minerals, 5m. t zircon; working to BFS; construction of ERMS synrutile demo plant
Western Australia
Atlas heavy minerals Cooljarloo Image Resources NL Indicated resource 9.7m. t 4.9% HM
Balla Balla ilmenite, phosphate Whim Creek, Pilbara Aurox Resources Ltd plan 300,000 tpa ilmenite (45% TiO2) as by-product of iron ore mining; 30.5% P2O5 concentrate recovered (see p.59).
Cyclone heavy minerals Eucla Basin Diatreme Resources Ltd total resource 98.4m. t 2.88% HM
Dongara heavy minerals Dongara Exxaro Resources Ltd plan production from 2011 to feed Tiwest jv
Happy Valley North & South heavy minerals Adjacent to Gwindinup Bemax Resources Ltd >750,000 tonnes HM concentrate; plan 150,000 tpa 2011-2013 for 8 years
Jangardup South heavy minerals 54km south Nannup Bemax Resources Ltd 2m. t HM; under evaluation
Keysbrook Ilmenite, leucoxene, zircon Keysbrook Matilda Zircon Ltd proven reserves 39m. t, 2.7% HM, incl. 49% leucoxene; plans 40,000 tpa leucoxene, 47,000 tpa ilmenite, high Ti ilmenite, & zircon, H2 2010.
Mt Cattlin spodumene (lithium, tantalum) Ravensthorpe Galaxy Resources Ltd resource 172,000 t 11% Li2O (425,000 LiCO3); fully financed; 3.4m. tpa ore, 17,000 tpa LiCO3 (Zhangjiagang, Jiangsu, China) Q3 2010
Mt Marion spodumene (lithium) between Kalgoorlie and Kambalda Reed Resources Ltd/Mineral Resources Ltd 7-8m. t spodumene pegmatite 1.5% Li2O; plans 17,000 tpm 6.5% Li2O; plant commissioning planned Q4 2010
Mt Weld rare earths 35km south Laverton Lynas Corp. Ltd resource 12.2m. tonnes, 9.7% REO; 773,300 t ore 15.4% REO mined 2008 in stockpile; ore to be processed at initial 11,000 tpa REO plant Malaysia; plans to restart project with recent $401m. funding
Cummins Range rare earths, phosphate Kimberley Navigator Resources Ltd inferred resource 3.55m. t 2% REO, 11.2% P2O5P2O5
Serpentine Lakes heavy minerals Eucla Basin Image Resources NL significant HM intersections
Shark Bay Coburn Ilmenite, rutile, leucoxene, zircon Shark Bay Gunson Resources Ltd 306m. t, 1.2% HM of which zircon 23%, high titanium ilmenite 48%, rutile 7%, leucoxene 5%; plan 17.5m. tpa ore; DFS completed end 2009; plan 67% revenue from zircon
Speewah Dome Fluorite fluorspar Speewah NiPlats Australia Ltd 6.7m. t 24.5% CaF2; continuing evaluation
Swan River kaolin Meckering ACC Ecominerals Ltd Indicated resources 16.8m. t, 42% kaolin; product testing.
Tutunup synthetic rutile, ilmenite, rutile and zircon 12km south Capel Iluka Resources Ltd resource 9.5m. t HM concentrate grading 11%; construction planned for 2011
Tutunup South ilmenite, zircon, rutile, and leucoxene 15km south-east Busselton Iluka Resources Ltd resource 1.1m. t HM concentrate, grading 10%; plan 200 tph ore; deferred until late 2010
WAK Kaolin kaolin Wickepin WA Kaolin Holdings Pty Ltd proven reserves 112m. t; 5,000 tpa plant Kwinana operational; product development complete; plant expansion programme to start mid-2010
White Well Gold kaolin 30km east Cue Mutiny Gold Ltd plans 5m. t over 3 years as gold mining co-product
Yannerie salt Exmouth Gulf Straits Resources Ltd plans 4m. tpa salt; referred to EPA

* not a complete list of projects

t = tonnes; % grade indicates average; HM = heavy minerals (mixed assemblage of titanum minerals and zircon), when precise mineral content unclarified