Australia’s energy source reliance has changed
dramatically in a short amount of time. A carbon tax introduced
in the 2012-13 financial year forced coal energy output down by
around 12% over the two years that it was in place (1 July
2012 to 30 June 2014). Coal’s energy market
share fell to an historical low of 73.6% in 2013-14. The
abolition of carbon pricing on 1 July 2014 reversed this
trend, most notably for brown coal generation, the output of
which rose by 10% in 2014-15.
Gross electricity demand is predicted to grow by 30% out to
2050, according to the Office of the Chief Economist,
indicating that all existing energy sources will expand,
including coal, although its overall share as an energy source
is expected to decrease.
Over a 10-year period, coal as a source of energy shrank by
2.2% overall, with oil, gas and renewables gaining a 2%, 3.9%
and 2.4% market share, respectively. The largest annual growth
rate over a 10 year period was seen in the solar photovoltaics
(PV), wind, biofuels and solar hot water areas.
Rising electricity bills over the past five
years has contributed to consumers’
adoption of solar energy
Growth rate over time. Hydro generation
includes Tasmanian generation prior to its
entry to the National Electricity Market in 2005
The Australian Renewable Energy Agency (ARENA) recently
announced that it would partner with the Clean Energy Finance
Corp. (CEFC) to fund Australian dollar (A$) 350m ($263m*) for
the building of up to 10 additional large scale solar
plants by 2017. In addition, the Australian Energy Regulator
estimates that by 2025, solar PV will meet 7.5% of total energy
requirements in Australia (up from around 2.5% in 2014-15).
Battery storage will allow for better matching of output
from intermittent generation such as solar PV against evening
demand peaks. The drive for more sustainable transport,
championed by Tesla Motors Inc., is affected by increasing
battery storage capabilities. Tesla is now taking the
innovation sparked by the transport industry and transporting
it to the home in the form of the powerwall, a home battery
that charges using electricity generated from solar panels and
powers the home in the evening.
Australian investment in new energy generation plants
outside of wind and solar has largely evaporated and a large
amount of new plants have been withdrawn from development.
Besides the growth driven by consumers and suppliers, the
government is targeting 33,000 GWh from renewables by 2020,
which would mean 23.5% of Australia’s electricity
generation in 2020 would come from renewable energy, mostly
from wind and solar.
CEFC has suggested that significant potential exists for new
investment in the bioenergy market – technologies
which are not currently widely deployed in Australia. Bioenergy
contributes only 0.9% of Australia’s electricity
output, well below the Organisation for Economic Cooperation
and Development (OECD) average of 2.4%.
Australia is also host to many granites which can be exposed
at the surface or concealed under overlying rocks or
sediment. Some of these granites, notably those that are
relatively deep beneath the surface and with high heat
producing qualities, could have significant potential as a hot
rock source of geothermal energy for Australia.
Tesla Powerwall (Source: Tesla
Conventional and unconventional gas is expected to increase
its overall market share at a growth rate of 2.5% per year
until 2050. Gas consumption continues to rise in the state of
Queensland and Western Australia, as well as in the mining and
chemicals sector, according to the Department of Industry and
Companies like Arrow Energy Pty Ltd, Santos Ltd, Molopo
Energy Ltd, Origin Energy Ltd, Westside Corp. Ltd and QCG Pty
Ltd (BG Group) are hoping to capitalise on these numbers in
Queensland – with BG Group alone to spend A$1.7bn
developing its Charlie CSG project in the Surat basin,
initially targeting 93 wells and upping this to 400.
Queensland’s mines minister, Anthon Lynham, said
that "by 2018, Queensland could be the world’s
fourth largest liquefied natural gas (LNG) exporter and by the
end of the decade, Australia has the potential to be the
world’s leading LNG exporter."
Addressing 100 business leaders in May at an invitation-only
investment forum at the NT Parliament House in Darwin, Gina
Rinehart, iron ore magnate, said that the nearby Northern
Territory contains more than 200 trillion cubic feet of gas,
which could potentially power Australia for over 200 years.
However, it’s not all roses for the gas
industry, with exploration company Metgasco Ltd leaving the
state of New South Wales (NSW) after having its licenses bought
back by the government for $25m last December.
Metgasco’s managing director, Peter Henderson,
said there is little confidence in gas exploration investments
in NSW, adding that the company "would like to take the $25m
settlement and invest in other oil and gas opportunities in
states that are more favourable for investment". Elsewhere, AGL
Energy pulled out of its CSG plan in Gloucester in NSW and is
selling its assets in Queensland’s Moranbah and in
The company said a review had concluded that natural gas
assets would "no longer be a core business for the
company" because of volatile commodity prices and long
development lead times. It added that it would cease production
at its Camden Gas Project in south-west Sydney in 2023
– 12 years earlier than expected.
As indicated by Rinehart, Australia contains significant gas
resources. Gas is Australia’s third-largest energy
resource after coal and uranium and, as of August 2015,
reserves of gas stood at 126,000 petajoules. Conventional gas
resources are widespread both on and offshore, occurring in
fourteen different basins, but most of the resource is off the
north-west margin in the Bonaparte, Browse and Carnarvon
Wholesale electricity prices fell in 2014-15, except in
Queensland, where generator bidding contributed to high summer
prices. Electricity retailers offer consumers a range of
contracts with different price, product structures, fees and
transparency levels. Retail electricity prices mostly fell in
in 2015, reflecting declining network cost pressures.
Retail gas prices have risen in most states and territories
since 2014, driven by higher pipeline charges and rising gas
contract prices. These rising electricity prices are driving
consumers to cut energy usage through the adoption of measures
like solar water heating and energy efficient air conditioning,
as well as the installation of solar PV panels.
Energy prices have a knock-on effect on the mining of all
commodities. The nature of some industrial mineral operations,
especially those that are intermittent or small-scale
family-owned quarries, means that these low-margin operations
are the first to be affected, if not directly through the cost
of operating equipment, then through higher costs incurred by
manufacturers using industrial minerals in their products.
One example is National Ceramic Industries Australia (NCIA),
one of only a few tile plants left in Australia, which has an
energy-intensive process of turning raw materials into tiles
through drying, pressing, firing and printing. If rising energy
costs incurred to the manufacturer were passed down to the
supplier of raw materials, then the effects would be felt in
the feldspar, quartz and clay industries among others.
Clay is considered the most important component in ceramic
tiles, producing a light colouring during firing, giving
plasticity and binding characteristics to the mass, enhancing
mechanical characteristics in fired tiles, producing good
rheological flow properties and providing a good density level
Feldspar is an important and common fluxing material for
ceramics as well as glazes, supplying the glassy phase for the
ceramic bodies. It is added to decrease firing temperature and
reduce cost, as well as to facilitate drying and the release of
gas during firing like other non-plastics.
The addition of silica sand to tiles decreases its unfired
strength and plasticity but also assists with the escape of
gases during drying and firing. It additionally reduces drying
shrinkage and increases the whiteness of the fired body.
Talc, wollastonite, dolomite, magnesite, nepheline syenite
are other minerals used in the ceramic clay manufacturing
process. With the example of just one manufacturing industry,
it is easy to see the interconnectedness of the mining and
Hydraulic fracturing (fracking) is used for the extraction
of gas from shale deposits. While fracking is an old method,
the Australian shale gas industry is still in its infancy
— the first commercial project commenced operation in
the Cooper Basin, South Australia in 2012.
Fracking fluid is composed of mostly water and sand or
ceramic beads (between 96 and 99.9%). These proppants enter
fissures created in the rock and hold them open to make the
fracking process more effective. Natural sand proppants must be
formed from high silica (quartz) sandstones or unconsolidated
deposits with >99% quartz or silica. Other essential
requirements are that particles are well-rounded, relatively
clean of other minerals and impurities and are able to
facilitate the production of fine, medium and coarse grain
A single fracked well can reportedly use as much as 10,000
tonnes sand over its lifetime, but the Founder of Asset
Minerals told IM that a typical well uses
around 100 tonnes frac sand in Australia. This number could
triple however, if horizontal drilling becomes widespread.
Asset Minerals is a potential new entrant to the frac sand
industry, which is currently dominated by sole-operator Sibelco
Global in South Australia. Asset’s resource,
located in Queensland’s Surat Basin, contains
about 2m tonnes JORC-certified sand under API specifications.
The deposit has been approved by the council and the company is
in the process of acquiring a mining lease, with plans to begin
mining by 2017.
Yuleba Minerals Pty Ltd, also in Queensland, claims to
produce frac sand and distributes its products throughout
Australia, however the company is not API certified and has
reportedly failed testing requirments, according to sources
close to the company.
Asset told IM that API specification is
critical and that frac sand cannot by supplied without it. With
an API-certified resource, Asset Minerals is well-placed to
supply sand to the 40,000 approved gas wells in the Surat
basin. Of these, an estimated 10% will be fracked, but this
number has the potential to grow significantly as companies
move into shale rock resources.
Another potential source of frac sand in Australia includes
Montumana in Tasmania, which has been tested and has passed API
specifications testing. The operator told IM
that it is looking for JV partners or other investors in order
to continue the project.
In addition to sand-based proppants, ceramic proppants
comprise most often of calcined bauxite, calcined kaolin or a
mixture of both, and are known for their round particle shape,
which is much more effective for fracking in deep oil and gas
stratum with high pressure. However, this type of proppant is
more expensive to produce than silica sand owing to a
complicated and energy-intensive process.
Australia-based LWP Technologies Ltd is attempting to solve
this issue with a fly-ash based alternative to ceramic and
bauxite based proppants. Thanks to Australia’s
vast amount of coal production and coal-byproducts, fly ash
could be a low cost option for fracking, but it has not yet
Australia has excellent potential to produce bauxite-based
proppants. Prior to 2008, Rio Tinto Plc produced up to 150,000
tpa calcined bauxite for abrasives and proppant agent
applications, filing proppant patents in the 1980s as Comalco
Aluminium Ltd. In the same year that Rio Tinto stopped
producing non-metallurgical bauxite in Australia, US-based
Carbo Ceramics Inc. switched from Australian bauxite imports to
buying material from Guyana.
Rio Tinto has demonstrated that Australian bauxite can used
to make proppants. Given the high cost of importing frac sand
into Australia from the US along with the rise of onshore gas
activity in Australia, the development of local bauxite-based
ceramic proppants manufacturing could be an area of
Finally, resin-coated proppants can be sand- or
ceramic-based and are being increasingly used in the US due to
their ability to increase proppant pack conductivity, leading
to higher oil and gas production.
Proppant testing in Australia
LAB SA has recently opened a new proppant testing
laboratory in Adelaide to service the emerging unconventional
oil and gas industry. The lab was opened with the assistance of
the South Australian Government’s Mining and
Petroleum Services Centre of Excellence, awarding a $100,000
grant to set the service up.
LAB SA’s general manager, Andrew Attwood, spoke
to IM and said that LAB SA is the only
facility of its kind of Australia, where API testing is carried
out to ISO standards. LAB SA’S proximity to local
suppliers means that testing results are carried out in a
matter of days rather than weeks, resulting in a 40-50%
reduction in testing costs.
Attwood said that while South Australian silica sand is of a
high quality, more resources need to be discovered and
companies are still learning about the relevant processes
needed for cleaning of the mineral before it is used as a
Minister for Mineral Resources and Energy, Tom Koutsantonis,
said that Lab SA has "now come up with a unique and
cost-effective technique, which has led LAB SA to providing
quality assurance and quality control testing for companies in
Queensland, Western Australia and the Northern Territory, as
well as some international companies".
While the company is focused on benefits gained from local
growth, it also hopes to grow into Asia.
Currently coal seam gas wells and all oil and gas wells are
required to be plugged with cement. This process is limited as
cement is expensive and can require maintenance over
A study by the University of Queensland into using bentonite
to plug wells is currently underway to solve this issue.
Bentonite is cheaper and easier to handle and, when hydrated,
creates a more reliable plug as it is malleable and
self-healing when disturbed.
Considerable laboratory data have already been acquired at
the University of Wyoming verifying the efficacy of the
process, while multiple field trials with bentonite plugging
have been successful in the US and at least one in Australia.
Further research and testing is required to provide clear
scientific evidence of the performance of bentonite plugs under
However, the most common use of bentonite is in drilling
fluids and, just like proppants, the material must be API
certified as the institute precisely regulates technical data
for all minerals in drilling fluids.
Bentonite is used to lubricate and cool the cutting
tools, to remove cuttings and to help prevent blowouts. Other
minerals such as attapulgite, sepiolite, barite, chalk and
hematite also used in drilling fluid.
Attapulgite and sepiolite, also known as 'salt
gel’, are clay minerals and are used to provide
low-shear rate viscosity for lifting cuttings out of
the annulus (the space between the wellbore
and casing or between casing and tubing, where fluid
can flow) and for barite (barytes) suspension.
One of Australia’s largest attapulgite mining
operations occurs at Lake Nerramyne, 150km north-east of
Geraldton, in Western Australia.
The attapulgite clay at Lake Nerramyne covers an area of
2,700 hectares (27km2) and has a JORC compliant
inferred resource of 23.4m tonnes, of which 9.4m tonnes are of
a very high grade. Attapulgite mining at Lake Nerramyne is
carried out on a seasonal basis by Hudson Resources Inc., with
between 10,000 and 20,000 tonnes extracted each year.
Calcium carbonate, or chalk, is an acid-soluble mineral
primarily used for controlling fluid loss and fluid density.
Hematite ore, with its mica-like crystal structure, is used as
a weighting agent, owing to its high density of greater than or
equal to 5.05. This is 19% greater than the density of barite,
which is also used as a weighting material.
Approximately 90% of world barite production is used as a
weighting agent in drilling mud for oil and gas wells where its
high specific gravity (SG) assists in containing pressures and
Specifications for oil drilling grade barite are generally
>92% (Ba + Sr) SO4. Highest prices are commanded
for fine-ground white to off-white paint and pigment grades
– fetching more than twice the price of oil drilling
grade. Most barite supplied in South Australia is of oil
Ore from the northern Flinders Ranges is treated at the
Quorn treatment plant, producing three industrial grade
products: A grade, standard grade and B grade, depending on
Currently the only deposit being mined is the Dunbar deposit
in the Oraparinna region in the northern Flinders Ranges. The
mine is estimated to contain 530,000 tonnes industrial and
drilling grade barite and has an output of 11,000-17,000 tpa
Most Dunbar ore is used in the production of oil drilling
grades of barite, but some is used to feed a magnetic
separation plant at Quorn, which produces a super white AA
Archer Exploration Ltd, known primarily for its graphite and
magnesite deposits in the same state, is exploring for barite
in South Australia. The Mount James barite project, located
approximately 25km south-west of the mining township of Leigh
Creek, is host to a 2km long outcropping barite vein set.
Results of preliminary test work conducted by
Archer confirms that material from Mt James barite
will produce API (13A) drilling grade barite.
Barite has also been intermittently mined at Dresser Mine in
Western Australia, at about 2,500 to 3750 tonnes per month in
A number of materials, including celestite, ilmenite, iron
ore and synthetic hematite, have been used as alternatives to
barite in drilling muds. However, they have had little impact
on demand for barite because of their higher cost or inferior
*Conversion made June 2016