DISCOVERY V I C T O R I A’ S
E A RT H
R E S O U R C E S
J O U R N A L
M AY
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contents LONGFORD BACK ON LINE
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Esso’s plant completes a $500m upgrade
GIANT DOZER IN COALMINING TRIAL
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Latrobe Valley miners look at new ways to extract brown coal
BASS STRAIT SET FOR NEW BOOM
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A new exploration program could bring new life to Bass Strait
BASS GAS WILL SERVE NEW MARKETS
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The $400mYolla field project is a major new source of natural gas
BEACH IS BACK
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An old explorer emerges as a new player in Victoria’s energy scene
NEW EXPLORATION ACREAGE RELEASED
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Eleven new petroleum lease areas are up for tender
FIGURES SHOW VIC RESURGENCE
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cover picture
Things continue to look good in Victoria’s oil and gas industry
NEW STANDARDS FOR BOX IRONBARK AREAS
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Our Box Ironbark forests get better protection
VICTORIA – A HOT LOCATION
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Victoria’s Geological Survey organisation (GSV) is on show at the Melbourne Museum. The display, which marks GSV’s 150th anniversary, features a range of models, early maps and prints, historical photographs, geological specimens and survey and mining implements. Our cover shows one of the early photographs - a GSV survey party in the Walhalla region in 1898. One of the group, William Baragwanath (right), later became Director of the GSV from 1920 to 1943.
We interview Vic’s new Executive Director of Energy & Minerals
IT’S ALL BENEATH OUR FEET
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GSV displays 150 eventful years
MIX MUST BE RIGHT, SAY SANDMINERS
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The future of the mineral sands industry in the Murray Basin
GO-AHEAD LIKELY FOR DOUGLAS
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Confidence is high for a start on our second mineral sands mine
AUSTPACE SCORES PROCESSING SUCCESS
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The company reports encouraging results in laboratory tests
DIAMOND HUNT RESUMES
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RMIT research leads to hope for a new local industry
GOLD EXPO FIRES SMALL PROSPECTORS
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Small time prospectors continue to win encouraging results
EAGER BUYERS EYE LOCAL GOLD INDUSTRY
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We report on the Australian Gold Conference
FORMER JACKAROO WINS NATIONAL SCIENCE AWARD
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Not a bad effort for someone who left school at age 15 DISCLAIMER: This publication may be of assistance to you, but the State of Victoria and its officers do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.
regular features VIEWPOINT
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Energy and Minerals Victoria acknowledges contributions made by private enterprise. Acceptance of these contributions, however, does not endorse or imply endorsement by the Department of Natural Resources and Environment of any product or service offered by the contributors.
Building sustainability is our target
NEWS BRIEFS
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A round up of Victorian industry news
VICTORIA’S RESOURCES
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All photographs, maps, charts, tables and written information in this publication are copyright under the Copyright Act and may not be reproduced by any process whatsoever without the written permission of the Department of Natural Resources and Environment.
Victoria's mineral, oil and gas resources
MINERAL LICENCE REVIEW
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Who’s doing what with mineral exploration licences
© Minerals and Petroleum Victoria 2002.
Published quarterly on behalf of the Energy and Minerals Division of the Department of Natural Resources & Environment. Editorial and advertising enquiries to Rex Banks, RBA Communications, 86 Cooloongatta Rd, Camberwell Vic 3124 Tel: (03) 9889 1094 Fax: (03) 9889 9997 EMail:
[email protected] Editorial: Rex Banks. Distribution and NRE enquires to Chandri Nambiar, Manager Marketing Development, Energy and Minerals Division, Department of Natural Resources & Environment, Level 7, 240 Victoria Parade, East Melbourne, Vic, 3002, Tel: (03) 9412 5061 Fax: (03) 9412 5155. Website:
Australia Post Print Publication PP349472/00128. ISSN Number 13282409.
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Longford V
ictoria’s energy infrastructure has received a major boost with the recommissioning of Esso Australia/ BHP Billiton’s oil and gas processing plant at Longford, near Sale. A major section of the plant was destroyed by an explosion and fire in September, 1988, cutting off Victoria’s supplies of natural gas for nine days. Two workmen died in the explosion. Victorian premier Steve Bracks, officially opened the recommissioned and reconstructed lean oil plant at Longford on March 13. Mr Bracks said that the plant has been substantially rebuilt at a cost of $500 million. New safety measures have been incorporated and staffing increased. “Once again Victorians have risen to a great challenge. Their contribution should not be forgotten and the lessons of this tragedy should not be allowed to fade,” he added. Mr Bracks also welcomed Esso’s announcement that it would invest a further $100 million in the development and expansion of the Longford plant over the next two years. “This comes on top of last October’s announcement of a $200 million commitment to build a gas pipeline from the Bream platform in the Bass Strait,” Mr Bracks said. “It is a strong vote of confidence by Esso in the future of Bass Strait and in doing business in Victoria.” The Longford plant processes Bass Strait crude to supply 20 per cent of Australia’s oil and 95 per cent of Victoria’s gas usage. The massive $500 million reconstruction project is one of the state’s most remarkable planning and construction operations. Esso employees and more than 6000 individual contractor personnel have worked over five million hours over the past three years on more than 100 individual projects to get the plant back into shape. Since production started in 1969, more than 3.5 billion barrels of crude oil and five trillion cubic feet of gas have been produced from the offshore Bass Strait oil and gas fields and flowed through the Longford processing plant.
Big job: More than 6000 Esso employees and contractor personnel worked on the $500 m restoration of the Longford oil and gas processing plant.
SPECIAL FEATURE
back on line Since the opening of the Eastern Gas Pipeline in 2000, Longford has supplied gas to the NSW grid. Later this year, when the new Duke Tasmanian pipeline is complete, Longford will also supply gas to Tasmania for the first time in that state’s history. The Longford facility comprises three independent gas plants (1, 2 & 3) and a crude oil stabilisation plant. The 1998 accident occurred when a heat exchanger in the lean oil plant (part of gas plant 1) ruptured. The resulting fire damaged nearby pipework associated with the transportation of liquids to the crude oil stabilisation plant. The undamaged gas plants 2 & 3 were shut down as a safety precaution because the liquids being produced by these plants were being piped through the area affected by the fire. In the days immediately following the accident, Esso worked intensively to construct alternate pipe work which would allow the liquids from gas plants 2 & 3 to bypass the area where the fire occurred. Once the alternate pipe work was complete, production from these plants recommenced. Whilst gas supplies were restored in only nine days, the lean oil plant was damaged significantly. By the winter of 1999, gas plant 1 was reconfigured as a ‘dew-point’ plant which allowed it to produce gas but did not use the damaged lean oil facilities. The lean oil facilities extract propane, butane, and ethane (known as liquid petroleum gas or LPG) from ‘liquids rich’ inlet gas, leaving the dry methane gas (known as ‘sales’ gas). Bypassing these facilities meant the recovery
All smiles: Victoria’s Premier Steve Bracks (centre) and the Minister for Energy and Resources, Candy Broad (right) with senior Esso Australia/BHP Billiton officers at the recommissioning of the Longford plant.
rate for LPG was significantly reduced. In addition to involving the experienced local work force and regulators, ExxonMobil,which operates processing plants and refineries worldwide, provided design expertise and best practice advice. Larry Kennedy, Longford projects executive, is an American who has worked in production operations around the world and ExxonMobil gas plants in the USA and Canada. His team
FIVE IN A ROW FOR ESSO Esso Australia has again won the upstream petroleum industry's premier safety award at the Australian Petroleum Producers and Explorers Association (APPEA) annual conference in Adelaide last month. Esso has won the award every year since 1998. “This award is a tribute to the attitude and comprehensive safety focus of each and every one of our employees and contractors who collectively worked over six million hours in 2001,” said Robert Olsen, Chairman of Esso Australia. APPEA assesses the award on both incident frequency rate and safety management initiatives that operators have taken. “Esso's overriding objective is flawless safety performance,” Mr Olsen said. “Whilst it is pleasing to be recognised by the industry with this award, the real reward is that people are not being injured at work. “Those who are not involved in hazardous industries may find it difficult to comprehend the amount of work and the attention to detail that is required to ensure a complex petroleum operation runs safely and reliably every day.”
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THE MASSIVE $500 MILLION RECONSTRUCTION PROJECT IS ONE OF THE STATE’S MOST REMARKABLE PLANNING AND CONSTRUCTION OPERATIONS. was challenged to complete the right projects, in the shortest time, safely.” The construction site manager, Dick Cowles, is British and has worked extensively in the company’s production and refining facilities in Norway, Finland, Holland and Monaco as well as the UK. A critical requirement for all of the planned work at Longford was that oil and gas supply, once it was resumed in 1999, should continue uninterrupted. This objective was achieved. Another requirement was Esso’s decision that it would respond to all of the recommendations of the 1999 Royal Commission into the accident and, in many cases, go beyond what was suggested. In addition to the restoration of the lean oil facilities, the work at Longford has included: • A comprehensive fire system upgrade involving replacement of the water main and pipework and an increase to capacity in order to meet the increased life now expected for these facilities;
Big lift: The rich oil deethaniser tower about to be lifted into place at Longford’s gas plant No 1.
DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENT ENERGY AND MINERALS DIVISION CONTACT LIST: MINERALS BUSINESS CENTRE: Level 8, 240 Victoria Parade, East Melbourne Vic 3002 Australia Tel: +613 9412 5020 Fax: +613 9412 5150 Richard Aldous Executive Director Energy and Minerals Telephone: (03) 9412 4508 Fax: (03) 9412 4183 David Wallish Business Manager Telephone: (03) 9412 5137 DIVISION OF ENERGY POLICY: Richard Bolt Director Strategic Policy Energy Telephone: (03) 9637 8804 Fax: (03) 9637 8835 MINERALS BUSINESS CENTRE: Fax: (03) 9412 5157 Kim Ricketts Client Services Officer Telephone: (03) 9412 5103 GEOLOGICAL SURVEY VICTORIA: Fax: (03) 9412 5155 Phil Roberts Manager Geological Survey Victoria Telephone: (03) 9412 5035 Alan Willocks Manager - Geophysics Telephone: (03) 9412 5131 Peter O’Shea Manager Geological Mapping Telephone: (03) 9412 5093 Roger Buckley Manager Mineral Resources Telephone: (03) 9412 5025 Graham Gooding Regional Manager Ballarat Telephone: (03) 53 336 521 Guy Hamilton Regional Manager Bendigo Telephone: (03) 5444 6697 PETROLEUM DEVELOPMENT: Fax: (03) 9412 5156 Kathy Hill Manager Petroleum Developments Telephone: (03) 9412 4208 Kourosh Mehin Manager Petroleum Resources Telephone: (03) 9412 5074 Mike Woollands Manager Basin Studies Telephone: (03) 9412 5135
Maher Megallaa Manager Acreage Release Telephone: (03) 9412 5081 Bob Harms Manager Petroleum Information Telephone: (03) 9412 5053 Geoff Collins Manager Petroleum Projects Telephone: (03) 9412 5095 MINERALS AND PETROLEUM REGULATION: Fax: (03) 9412 5152 Rob King Manager Minerals and Petroleum Regulation Telephone: (03) 9412 5069
• Emergency shutdown upgrade allowing for isolation of the major operating sections of the plant; • Flare and relief system upgrade to improve gas processing reliability during process upsets. A liquid flare is being installed and other liquids handling flexibility mechanisms have also been introduced, including enhancements to offshore LPG reinjection;
George Buckland Manager Minerals and Petroleum Tenements Telephone: (03) 9412 4778
• Relocation and upgrading control rooms into a single building outside the processing area to improve supervision and plant safety. Gas plants 1, 2 and 3, the crude oil stabilisation plant and the Bass Strait production system are now all controlled from a single room, and;
Graeme McLaughlan Manager Northern Region Chief Mining Inspector Telephone: (03) 5444 6689
• Gas processing reliability and capacity improvements. The Longford restoration project has been undertaken with the objective of improving the processing reliability of the plant.
John Mitas Manager Southern Region Chief Inspector of Quarries Telephone: (03) 9412 5083
Esso Australia chairman, Robert Olsen, said, “The achievement of which we are most proud is the fact that the entire work program has been completed without a single lost-time injury. “This is an outstanding performance and one that only results from a cooperative team effort, a focus on job planning and attention to work execution, 24 hours a day, seven days a week.”
Doug Sceney Environmental Manager Telephone: (03) 9412 5107
Dick Cowles agreed saying: “Not only are we one of the largest construction sites in Australia, but we are by far the safest. It has been an outstanding performance, particularly when you consider the nature of the tasks and the fact that we were working in an operating plant. Working around an operating plant creates a number of significant challenges.
Horacio Haag Manager Petroleum Operations, Safety and Environment Telephone: (03) 9412 5101
“It requires detailed planning from the scoping phase right down to commissioning, and, as you can imagine, it requires exceptional teamwork and co-ordination between the construction crews and the plant’s operations and maintenance people.”
MINERALS AND PETROLEUM POLICY: John Lambert Manager Minerals and Petroleum Policy Telephone: (03) 9412 5068
A further $100 million is to be spent on enhancements at Longford. Mr Olsen said that with the works opened by the Premier, and the additional $100 million to be spent on ongoing construction that will continue past 2002, Longford’s lifespan, capability and reliability would be further increased.
INFORMATION: Janne Bonnett - Manager Minerals and Petroleum Reference Centre Telephone: (03) 9412 5022 Fax: (03) 9412 5157
“The existing proven gas reserves in Bass Strait are roughly equal to what has already been extracted and we are actively exploring for more. The future is bright for decades to come,” he told Discovery.
Chandri Nambiar Manager Marketing Development Telephone: (03) 9412 5061 Fax: (03) 9412 5155
F O R M O R E I N F O R M AT I O N C O N TA C T:
Anna Schultz. Esso Australia Telephone: (03) 9279 3182
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COAL MINING
Giant dozer in coalmining trial Big grab: The D11 bulldozers being trialled at the Yallourn brown coal mine can move 70 tonnes of coal in one scoop. Below: The dozers will replace old buckwheel dredgers.
“Our current 1950’s style dredger technology will not ensure a cost-effective and reliable coal supply for the next 30 years. “The dozer trial is a vital step in ensuring a viable future for the company and its future workforce. “New technology will mean changes in the way we do things in the mine but Yallourn people have always found new and innovative ways to do things. Our 80-year history is full of innovations and change.” Once the present trial is complete, later this year, Yallourn Energy will commission a fleet of four D11 dozers and feeder/breakers to replace the bucketwheel dredges. Changing conditions in the Latrobe Valley coalmines and rising maintenance costs and requirements have spelled the end of the distinctive coal dredges.
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new mining system is being trialed in Victoria’s Latrobe Valley, which could revolutionise the way brown coal is extracted.
The trial involves replacing the massive bucketwheel dredges that have operated in Victoria’s brown coal mines since the 1950s with large capacity D11 bulldozers which can move around 90 cubic metres of coal in a single pass – that’s 70 tonnes of coal in one scoop.
Coal is broken up in the feeder before it is deposited on a conveyor belt for transport to the power station. “Yallourn Energy must adopt new technology that is flexible and cost effective so that it can meet the needs of its customers in a very competitive electricity market,” Yallourn Energy mine manager Lindsay Ward, said. “The dozer system will provide that competitive edge.
The giant bulldozers use a Global Positioning System (GPS) and onboard computers and telemetry to control their operation.
Installation of a new mining system at Yallourn is just part of a wider suite of radical changes currently sweeping through the Latrobe Valley coalmines. Yallourn Energy has also embarked on a $500 million master plan to develop a new mine and divert the Morwell River across the existing mine lease. The Maryvale 11 mine development involves the diversion of the Morwell River across the existing East Field mine site and restoration of much of the area to provide an environmentally sensitive solution to the need to open up new areas for coal extraction. The new plan for the river will allow coal lying under the existing river diversion channel to be extracted, extending the life of the East Field mine by five years and ultimately providing a more satisfactory environmental outcome.
The technique is believed to be the first time in the world that open-cut coal miners are using GPS-guided bulldozers to push coal directly onto feeder units which size the coal and deliver it onto a face conveyor.
When complete, the Maryvale mine pit will be flooded to provide a large lake for recreational use and a major wetlands area.
Yallourn Energy has been operating the new system at its Yallourn mine for several months and already reports great success.
F O R M O R E I N F O R M AT I O N C O N TA C T:
The trial is fuelled by the need to reduce costs in the coalmines to make the power generation industry more cost efficient.
Trevor Robertson Corporate Affairs Manager Yallourn Energy Telephone: (03) 9207 2384
The D11 bulldozer, equipped with the largest coal blade in the world, pushes coal from the working face of the mine onto a coal feeder. 5
REGULAR FEATURE
BASS STRAIT SET FOR NEW BOOM
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ictoria’s offshore Bass Strait oil and gas fields are on the brink of the biggest exploration and development bonanza since the 1970s with several new field developments underway and a two-year drilling program starting next year. More than 3.8 billion barrels of oil have already been produced from the Esso/BHP Billiton controlled fields in Bass Strait, but a new exploration program could reveal enough reserves to keep the oil and gas flowing for decades to come. A $60 million seismic survey, the largest ever conducted in Bass Strait, is seeking oil and gas in new structures rarely tested in the region. The survey will be followed late next year by a two-year drilling program likely to cost around $250 m. Several new fields near the existing offshore platforms are expected to be located, but the seismic survey is specifically designed to
Pipelayer: While Esso/BHP Billiton redoubles its efforts in the Gippsland Basin, the new undersea pipeline to carry Victorian gas into Tasmania is nearing completion. Pipelaying work is being carried out by the Lorelay, shown here off the Victorian coast. Image courtesy of Duke Energy. Photography by Shannon Shumski.
BASS GAS WILL SERVE NEW MARKETS
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The Bass Gas project is based on the development of the Yolla field which is located in Bass Strait in 80m of water, 150 km south of the Victorian coast.
Panel hearing were scheduled to start on May 21. The project operator, Origin Energy, also advertised its permit applications for the onshore pipelines associated with the project as well as the planning permit and Environment Protection Authority works approval for the gas processing plant and the Coastal Management Act consent application. The Yolla reservoir formations contain rich ‘wet’ gas. Its recoverable reserves are estimated at 256 petajoules of sales gas, plus 14 million barrels of condensate and 1 million tonnes of LPG, sufficient to meet up to 10 per cent of Victoria’s current gas demand for 15 years. The proposal to develop the Yolla field is for a single, four-legged, unmanned, steel substructure.
An environmental effects statement and environmental impact statement, extensively advertised in February, is now being considered after attracting many submissions.
Staff may visit the platform weekly with operations controlled by an automatic control system on the platform, with supervisory control from the onshore gas plant control room.
as demand in south -east Australia is forecast to double in the next two decades, primarily for electricity generation and industrial consumption, making the development of new sources of supply vital. The $400 million Bass Gas project, which will provide a major new natural gas source of supply for Victoria and other states, is one of several major new projects, worth more than $A1 billion, currently moving towards commercial development.
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The platform will include gas dehydration facilities and will allow for the drilling of additional production wells and the installation of gas compressors if required later to maximise recovery of the gas reserves. To get the raw gas to shore, a 147 km, 350millimetre diameter subsea pipeline will run from the Yolla platform to a shore crossing near Kilcunda. The shore-crossing site was chosen over several other potential sites for its minimum environmental impact. Horizontal directional drilling techniques will be used to drill under the Bass Highway, which runs close to the shoreline, the dune system and beach. Offshore, the pipeline will emerge from the seabed, between 450 metres and 1,450 metres from the beach, depending on coastal processes, including tidal and swell action. Onshore, the raw gas will be transported via a
OIL
probe a largely untested formation beneath the existing producing fields. The Bass Strait partners are specifically looking for new gas reserves to boost supplies to the expanding southeast Australian market. Bass Strait gas, which supplies over 90 per cent of the Victorian market, is already being exported to NSW and soon will be piped to Tasmania and SA as well. The target now attracting Esso/BHP Billiton’s attention in Bass Strait is the Golden Beach structure which lies beneath the existing Latrobe formation, the primary host of the Strait’s existing oil and gas production. The Golden Beach formation, which already hosts oil discoveries such as the Kipper and East Pilchard fields, is considered highly likely to contain new oil and gas prospects, potentially adding decades to the life of Bass strait. While reserves in some of the major developed oil fields, such as Marlin, Kingfish, Mackerel, Fortescue and Tuna are nearing depletion, Bass Strait still has the potential to contain substantial, although smaller, oil fields and huge gas reserves. New data shows that exploration spending in Victoria in 2000/2001 surged to a 13-year high of around $75 m and is expected to again double in the current year. Much of this will be contributed by Esso/BHP Billiton as the biggest drilling program for decades gets underway in Bass Strait. Esso’s exploration director in Australia, Dr Doug Schwebel, said: “We could easily be looking at a couple of years of drilling activi-
ties. An average well in the Gippsland Basin costs about $10 m and takes around 30 days per well. So you could easily be looking at a couple of hundred million dollars program over a period of a couple of years – a pretty substantial long-term program.” Dr Schwebel said Kipper and East Pilchard were the only two commercial oil discoveries found to date in the offshore Golden Beach formation, but many more could be found. “There have been a lot of wells drilled along that northern part of the basin that have penetrated to that (Golden Beach) depth and they have all seen evidence of oil and gas shows of one kind or another.” He added that earlier surveys conducted over Kipper and East Pilchard had “confirmed for us the explorability in that deeper part of the section”. Dr Schwebel said that, apart from looking for small additions to existing fields and possibly some previously undetected targets, the Golden Beach play added a ‘romance aspect’ to the exploration effort. “We have never deliberately explored the deep part of the section, nor have we deliberately explored for gas in the basin, so there are two new horizons there for us which are related to each other. We have got a number of discovered but undeveloped oil and gas accumulations out there that we would expect to image better with this seismic data and maybe give ourselves a shot at getting one of more of those up into development. “We are looking to mature a suite of opportunities that will see a continuous drilling pro-
NEWS
gram from the second half of 2003.” The president of BHP/Billiton Petroleum, Phil Aiken, told Discovery that the Golden Beach target was a ‘fairly serious target’. “But it’s early days. Instead of guessing, we had to go out and do a proper seismic shoot and work it out from there. I don’t think these (Golden Beach) structures will be large and the development costs won’t be cheap, but if you can
NEW DATA SHOWS THAT EXPLORATION SPENDING IN VICTORIA IN 2000/2001 SURGED TO A 13-YEAR HIGH OF AROUND $75 M AND IS EXPECTED TO AGAIN DOUBLE IN THE CURRENT YEAR. tie back to existing infrastructure, anything of any sort of size is reasonably commercial.” Mr Aiken is also keen to find more gas in Bass strait. “When gas was found in the early days, it was sold for nothing and I don’t think there has ever been any exploration for gas in Bass Strait,” he added. “Work in Bass Strait was always looking for oil and when gas was found it was sold locally. Now there is value in the gas so if we find gas it will be good, but if we find oil it will be even better.” F O R M O R E I N F O R M AT I O N C O N TA C T:
Anna Schulze, Esso Australia Telephone (03) 9279 3182
The Yolla gas plant will have an daily average throughput of 54 terajoules a day of sales gas with associated production of 3700 barrels of condensate, 150 tonnes of propane and 70 tonnes of butane.
32 kilometre long, 350-millimetre diameter pipeline to a planned gas processing plant near Lang Lang. The proposed pipeline corridor has been chosen to avoid urban areas and is located principally in areas of cleared rural farmland. A gas plant site, away from the coast, has been selected on private land near Lang Lang, adjacent to the highway.
The Bass Gas Project will provide a significant economic boost to Victoriaís south Gippsland area by creating a new industry without adverse impacts on the established agricultural and fishing industries. Approximately 250 jobs will be created during the construction phase with 30 permanent operational jobs.
The gas plant will separate the raw Yolla gas into gas and hydrocarbon liquids. The hydrocarbon gas will then be separated from carbon dioxide and processed further before being odorised, compressed and exported by a 30 kilometre, 250-millimetre diameter pipeline to join the existing EssoLongford pipeline near Pakenham. The hydrocarbon liquids will be fractionated into separate propane, butane and condensate streams. Propane and butane will be stored on site in buried, pressurised cylindrical vessels and loaded on to standard road tankers for transport to the market while condensate will be stored on site in atmospheric tanks and may be exported via a pipeline to Long Island Point or by road tankers to the Shell refinery at Geelong.
/GAS
A copy of the environment effects statement can be found at www.bassgas.oerl.com.au
F O R M O R E I N F O R M AT I O N C O N TA C T:
If the Yolla joint venture and Esso/BHP Billiton cannot reach an agreement on the use of the existing pipeline for transmission of the condensate, it will be trucked to the refineries. 7
Tony Wood General Manager Public & Govt. Affairs Origin Energy Telephone: (03) 9652 5506 [email protected]
GAS DEVELOPMENTS
BEACH IS BACK
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each Petroleum has re-emerged as a significant entity in Victoria’s energy production scene. The South Australian company – Australia’s only mid-sized petroleum explorer and producer - is more often associated with oil exploration in the Cooper/Eromanga Basin in the southwest corner of Queensland. But, after a major 15-month joint venture exploration program onshore in the Otway Basin between Port Campbell and Warrnambool where it achieved a five-out-ofseven gas discovery strike rate, the company is determined to make gas one of its revenue cornerstones. Beach’s first gas flow entitlements into Melbourne have already started to flow. Production from the McIntee-1 well, the first of four successive gas discoveries made by the company in permit PEP 154 last year in joint venture with Santos Limited, has begun. The McIntee-1 well was connected during March by a 14-kilometre spur line to the Heytesbury gas processing plant, servicing the main western trunkline into Melbourne as well as other regional feeder routes. Beach Petroleum’s chief executive officer Reg Nelson, said: “This is the first time Beach has generated a gas revenue stream in over 20 years. “It’s a direct result of seizing the opportunity to rebuild Beach’s position in the onshore Otway Basin - an area in which gas discoveries were pioneered by the company.”
IT’S A DIRECT RESULT OF SEIZING THE OPPORTUNITY TO REBUILD BEACH’S POSITION IN THE ONSHORE OTWAY BASIN
Mr Nelson added that Beach was ideally positioned to take advantage of providing gas into the proposed two new gas pipelines from Victoria to South Australia.
The new discoveries in the Otway Basin were created by applying modern 3D seismic. “This allowed much clearer imaging of subsurface rocks and structures in the Otway Basin which has very complex, faulted areas, often difficult to resolve using older 2D seismic work,” Mr Nelson said. McIntee-1 was drilled to a depth of 1,803 metres in February 2001, encountering commercial gas reserves at 1,539 metres. Beach is entitled to 10 per cent of the gas from the well and also has a 10 per cent entitlement in each of the nearby successful Naylor-1, Croft-1 and Lavers-1 discoveries - all undertaken in joint venture with Santos. Two of these wells, Naylor-1 and Croft-1, will be progressively brought onstream by July this year. 8
Successful return: Onshore drilling in the Otway Basin has produced outstanding results with success in five of seven wells. Below left: ‘We’re back in the Otway Basin,’ says Beach Petroleum’s CEO, Reg Nelson.
Early this year, Beach and Santos participated in a new round of drilling in the region, discovering commercial volumes of carbon dioxide in the Buttress-1 well. Mr Nelson said Beach Petroleum’s Otway Basin focus for the remainder of 2002 would be to continue to research new gas prospects in its tenements in Victoria. However, no further gas wildcats were planned. Beach is also the largest tenement holder in the basin’s western sector, extending throughout the south-east of South Australia.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Reg Nelson, Chief Executive Officer Beach Petroleum Telephone: (08)
VIEWPOINT
Building sustainability is our target
T
he 2002-03 Victorian Budget, announced in May, invests for our future. It invests in more jobs, stronger communities and new opportunities - for all Victorians.
The Centre is fulfilling a vital role in pursuing research of considerable significance to present and future needs for competitive, lowcost electricity.
Over the past two years, Victoria has led the way in economic growth, jobs growth and business investment. The 2002-03 Budget aims to consolidate this strong performance and demonstrate a clear vision for the future.
The continuing investment in the Victorian Initiative for Minerals and Petroleum (VIMP), aimed at attracting responsible business investment, is proving successful.
The budget balances economic, social and environmental goals and objectives, as set out in the Bracks Government’s framework for the future, Growing Victoria Together. It focuses on three key areas: driving excellence in education, building a more competitive and innovative economy, and growing the whole State through investment in Victoria's suburbs and regions. One of the key priorities for Government in achieving the sustainable development principles inherent in the Growing Victoria Together framework is the investment in technologies that reduce energy use and lower our Greenhouse gas emissions and other environmental impacts. Victoria will be at the forefront of developments in green energy technologies following a $12 million commitment for the establishment of a Centre for Energy and Greenhouse Technologies in the Latrobe Valley. The Centre will facilitate the development of a full range of green energy technologies, such as renewable energy resources and energy efficient buildings and appliances, as well as the more efficient use of fossil fuels. This is part of the Bracks Government’s commitment to building sustainability into everything we do. The market for such technologies is growing, both locally and worldwide, and Victoria has the potential to lead Australia in this field and develop new sustainable energy related industries. The Centre will foster growth across the sustainable energy industry and maintain Victoria’s leading edge as the premier industry and manufacturing state based on secure and efficient energy supplies. Similarly, $ 2.8 million over four years has been committed to continue the investigation into technology development for clean coal technologies through the Cooperative Centre for Clean Power from Lignite.
The financial year closing on June 2002 will witness an investment in petroleum exploration in the onshore and offshore areas of Victoria approaching or possibly exceeding $200 million, eclipsing the previous year’s ten-year high of $75 million. Next year is also projected to be a very good year, demonstrating investor confidence in the State. The discoveries over the last eighteen months in particular have drawn the world’s attention to the region. New gas field developments and pipeline projects at various stages will increase overall system security, not just to Victoria but to the entire southeastern Australian region.
‘Victoria has the potential to lead Australia in the field of sustainable technology’ There are also strong indications in mineral sands, new investment in the gold sector and vast potential in the State’s brown coal. Also in May, I had the pleasure of opening the Museum of Victoria’s tribute to the ‘Beneath Our Feet’ exhibition. Initiated by the Department of Natural Resources and Environment’s Geological Survey of Victoria, this exhibition celebrated 150 years of contribution by government and industry to better geological understanding of the State. As part of the celebrations, early equipment, maps and photographic records are on display at the Museum.
of Victoria were some of first Europeans to explore parts of Victoria, particularly the remote mountainous areas of the east. I’m sure you will find an hour or two well spent at the exhibit, which continues until the end of July. We can certainly be proud of our heritage and I am pleased to note that Geological Survey of Victoria is still leading the way in applying high quality science, having been awarded the David McAlpine Award - the State’s premier natural resource science award - in recognition of the quality and scientific input to the recently published Tasman Fold Belt volume.
The manuscript maps and field sketches of the 19th Century are remarkable for their craftsmanship and beauty. The early instruments, although primitive by today’s standards, were also finely crafted and elegant in design and function.
Candy Broad
The early geologists from Geological Survey
Minister for Energy and Resources
9
REGULAR FEATURE
News Briefs 200 WIND FARM JOBS FOR PORTLAND Danish manufacturer, NEG Micon, plans to establish a plant at Portland, in south-western Victoria, to build and assemble wind energy equipment, creating more than 200 jobs. The Chairman of Portland Progress Association, Steve Garner, said NEG Micon would manufacture wind farm towers, blades and generators for Pacific Hydro, which is proposing a major new wind farm project at Portland. He said the proposal was exciting news for Portland which would create a range of new employment opportunities. After some initial training, workers would have sufficient skills to undertake the majority of new jobs to be created. In a presentation to the region’s planning panel, NEG Micon indicated jobs in blade manufacture (55), tower construction (50), nacelle assembly (40), components (90) with another 145 possible jobs in direct manufacturing processes and overheads. Mr Garner stressed that the creation of the new jobs hinged on planning approval for the Portland Wind Energy Project. A recent survey conducted by Pacific Hydro found that 95 per cent of respondents supported the construction of more wind farms for power generation in Australia. Conducted by Auspoll last February, 86 per cent of respondents said they would prefer wind energy over coal or gas-fired power stations.
GSV TEAM ARE WINNERS A group of ten geologists from the Geological Survey of Victoria has won the Daniel McAlpine Outstanding Achievement Award in this year’s NRE Science Awards for their work on the Tasman Fold Belt Project. It is the first time that one of the NRE Science Awards has been won by NRE’s Energy and Minerals division. The project team, using data collected during the Victorian Initiative for Minerals and Petroleum, produced a book and maps giving a comprehensive analysis of Victoria’s structure and tectonic evolution. The book has been widely acclaimed as the most significant contemporary publication of its type in Australia. The NRE Science Awards were presented on February 19 at Parliament House in recognition of the outstanding contributions made to resources, agriculture, biodiversity and environmental sciences across the state.
RESOURCE SNAPSHOT The Department of Natural Resources and Environment (NRE) has released a new statistical review of Victoria’s energy and minerals industries. It provides a comprehensive snapshot of the state’s minerals, petroleum and extractive industries, including data on production, exploration, capital expenditure, as well as licensing and safety performance.
The review data is a vital first step for potential investors in the resources sector or anyone involved in the mining, extractive or petroleum industries and provides the most comprehensive public database available for these sectors in Victoria. See NRE’s website for a copy of the review.
BENAMBRA ON HOLD Junior exploration company, Austminex NL, has restructured its management after deciding not to proceed with a planned redevelopment of the Benambra base metal project in north-eastern Victoria. In a statement to the Australian Stock Exchange, the company told shareholders that a review of the management structure and ongoing expenditure recognised the need to conserve cash resources. Michael Eager has been appointed to the new post of executive chairman of the company.
MINERS, FARMERS AGREE ON COMPO The Victorian Minerals and Energy Council and the Victorian Farmers Federation have completed an extensive review of the proforma compensation agreement for exploration on private land in Victoria. VMEC executive director Chris Fraser, said the first standardised agreement, which was reached in 1994, had served the minerals industry and farmers well. The revision addresses some of the new lowimpact exploration methods used today and clarifies the rights of land owners. The proforma agreement is not binding on any party. It simply provides a framework that sets out the normal issues confronting both the explorer and the landowner. Specific items can be added or deleted as required. VFF president Peter Walsh, said the agreement was written in a way that provided simple, non-legal language, while being sufficiently precise to avoid misunderstandings. Copies of the revised agreement can be obtained from either the VFF or VMEC. Winners are grinners: Energy and Resources Minister Candy Broad congratulates the winning GSV geology team for their work on the Tasman Fold Belt project (see story above).
10
REGULAR FEATURE
News Briefs The VMEC has also updated its internet web site. While still located at www.vicmins.com.au, the VMEC site now comprises three new segments. These include up-to-date information on the Victorian minerals and energy industry and its current status and an education section specifically aimed at teachers and students, including career information. A special members area provides a forum for VMEC members.
GEOLOGISTS MEET IN MELBOURNE Melbourne hosted the annual meeting of Chief Government Geologists on April 29-30. The meeting involves the heads of the Geological Surveys of all states, the Northern Territory and New Zealand. The meeting dealt with several issues of particular importance to the minerals and petroleum industries, including commonwealth/state cooperation in major geological projects to promote mineral exploration, on-line access to geological data, consistency in exploration reporting requirements, national and international investment promotion and national geochronology facilities.
WE’RE EXPOSED INTERNATIONALLY Acreage releases in Victoria’s Gippsland and Otway Basins were highlighted at the Australian booth at the recent American Association of Petroleum Geologists Convention in Houston, USA. David Wong, from NRE’s Energy and Minerals Division, was a member of a 13-person Australian contingent exhibiting at the convention. AAPG is the world’s largest annual international petroleum conference and attracted 7769 delegates. The Australian booth featured state and federal displays and provided delegates with expert advice about Australia’s hydrocarbon prospectivity and local investment opportunities. The expanding Australian gas market and development projects in Victoria, South Australia and Tasmania were hot topics, attracting at least 150 delegates to the VictoriaSouth Australia-Tasmania section of the booth. Many requests for additional information are
expected to lead to a growing rate of overseas interest in Australia with the Otway Basin remaining the focal point of delegates. David Wong also participated in visits to five petroleum companies interested in Australia, particularly Victoria. An Australian delegation also attended the Prospectors and Developers Association Convention in Canada recently promoting Victoria to Canadian companies and explaining investment opportunities in Australia’s mining and exploration industry. The delegation was organised by Geoscience Australia in conjunction with Austrade. The delegation briefed several of Canada’s leading mining and finance companies in Vancouver and Toronto on recent exploration successes and trends in Australia. The massive PDAC convention runs over several days and attracted over 7000 delegates. The Australian booth averaged a visitor every six minutes, indicating the very strong international interest in Australia. The Victorian geoscientific data library of gravity, magnetics, radiometrics and geological mapping is clearly one of the best in the world and received many compliments from other governments and industry alike. Mike Woollands, Manager Basin Studies, for the Petroleum Development Branch of NRE’s Energy and Minerals Division, also represented Victoria at the annual North American Prospect Exposition (NAPE) held during January in Houston, Texas, and also presented 11
Top inspection: The Chief Government Geologists receive the good oil on the Stawell Gold Mine and nearby prospects from SGM Senior Exploration Geologist, Jon Dugdale (see story at left).
Victorian exploration opportunities at a oneday international exploration forum. The NAPE Expo is one of the leading international exhibitions for the upstream petroleum industry and attracted more than 8000 delegates from over 500 companies. There were 838 company and government booths on display.
COSTERFIELD CONTINUES GOOD RESULTS Excellent drilling results have continued to provide encouragement for a mine development at AGD Mining’s Costerfield gold/antimony project in central Victoria. The latest results from the final drill hole in the current program have provided more evidence of the high-grade mineralised system, with the gold now known to continue at depth. The drilling has also allowed AGD to dramatically increase its resource estimates. AGD now estimates the multi-reef MH zone system at Costerfield, now the main target zone, contains 111,500 ounces of gold and 17,990 tonnes of antimony. Gold is estimated to make up 58 per cent of the in-ground value of the resource based on recent prices of US$301/oz for gold and US$1,350/tonnes for antimony.
EXPLORATION
New exploration acreage released
E
leven new petroleum lease areas were offered for exploration by the Commonwealth and Victoria Governments at this year’s conference of the Australian Petroleum Production and Exploration Association in Adelaide in April. They included four offshore areas in Commonwealth waters and seven Victorian areas - two onshore and five offshore within the three nautical mile zone administered by Victoria. The areas in Commonwealth waters included one in the Otway Basin (V02-01) and three in the Gippsland Basin (V02-2, V02-3 and V02-4).
141°E
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PIPELINES AND PERMITS
MILDURA
The two Victorian onshore areas include one in the Gippsland Basin (VIC/G-02(1)) and one in the Murray Basin (VIC /M-02(1)). VIMP report 74 on the hydrocarbon prospectivity of the 2002 offshore Gippsland gazettal blocks is available from the Energy and Minerals Division of the Department of Natural Resources and Environment.
Otway Basin acreage The state coastal waters areas, 02-1(v), -2(v), 3(v) and 4(v), have the potential to contain small gas accumulations. During 2001 onshore drilling in PEP-153 & 154(a) in the immediate vicinity of 02-3(v) and 02-4(v), resulted in seven out of eight wells producing gas discoveries. These included Croft-1, Lavers-1, Mcintee-1, Tregony-1, Naylor-1, Penryn-2 and Butress-1. Although the discoveries were small, their close proximity to Santos’ Heytesbury gas plant near Port Campbell has ensured they are commercial. Subject to completion of the pipeline construction, the first gas deliveries from these discoveries will quickly flow into Melbourne's gas market.
Commonwealth waters Area V02-1 is located 45 kilometres southwest of Port Campbell and comprises 30 graticular blocks (1874 square kilometres). Around 80 per cent of the area is located in water depths of less than 200 metres. The block is underexplored with only two wells drilled.
Gas Pipeline
34°S
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Retention Leases
Proposed Pipeline
Current Permits
Northern Territory Queensland Western Australia
South Australia
2001 Acreage Release
Gas Field
Proposed 2002 Acreage
Oil Field 35°S
New South Wales
35°S SWAN HILL
Tasmania
VIC/M-02(1) COBRAM RUTHERGLEN WODONGA CHILTERN
ECHUCA
36°S
PEP161
36°S
WANGARATTA
MURRAY BASIN
BENALLA
HORSHAM
0
EUROA
BENDIGO
50
100
Kilometres SEYMOUR
CARISBROOK
37°S
37°S SEA Gas
KYNETON ARARAT
Proposed Pipeline To Adelaide
WALLAN
Somerton Gas Net
BALLARAT
PEP160
GIPPSLAND BASIN
MELBOURNE
PEP155
HAMILTON
PEP151 PEP150
02 -1
200 m
PEP159 (v
)
02-2(v)
PORTLAND
PEP152
Port Campbell Gas Fields Santos (b) -3(v
1000 m
V01-2 2000 m
V02-1 VIC/ RL7
V01-1
39°S
VIC/G-02(1)
Minerva BHP 01(2) 02
-4 (v
143°E
2000 m 3000 m
VIC/P45 VIC/P48
144°E
39°S 4000 m
Victoria Tasmania
Tasmanian Natural Gas Pipeline Duke Energy
Yolla Bass Gas Origin
145°E
V02-1 is in a proven gas province adjacent to recent and existing discoveries at Thylacine and Geographe in the central part of the basin and also the La Bella and Minerva fields. The block also has potential for oil discovery, as Late Cretaceous and Cainozoic play fairways are interpreted to exist. It has the advantage of being close to the growing Victorian gas market, the established gas transmission network linked to New South Wales and the gas pipelines to South Australia and Tasmania which are now underway. Areas V02-2, V02-3 & V02-4 are adjacent to major producing oil and gas fields and are close to established infrastructure and commercial centres. They are close to the growing southeastern Australian gas market and also to the planned new gas pipeline network to South Australia and Tasmania. They are within proven petroleum systems where several play types with untapped potential in deeper stratigraphic levels are interpreted from existing good well and seismic control. Area V02-2 comprises 630 square kilometres covering eleven graticular blocks and lies immediately north of the Snapper, MarlinTurrum and Tuna oil and gas fields. It is located in water depths of less than 75 metres. Area V02-3 covers 689 square km over ten 12
VIC/P49
Bream A Esso
VIC/P43
Geographe Thylacine Woodside
142°E
1000 m
V01-4 PEP158
VIC/P42
4000 m
141°E
38°S 200 m
)
3000 m
V01-3
VIC/P41
V02-3
PEP157
PEP162
PEP153
VIC/ RL8
Patricia Baleen OMV VIC/P47
MOE
VIC/O-
COLAC
)
VIC/P44
V02-2
SALE
LONGFORD
VIC/O-01(1)
COBDEN
PEP154(a) 02
VIC/P46
LARA
)
Southern Gas Pipeline Gas Net
PEP156 MAFFRA
(v
38°S
OTWAY BASIN
02 -5
Four of the five Victorian coastal waters areas on offer are in the Otway Basin (02-1(v)), (022(v)), (02-3(v)), (02-4(v)) and one in the Gippsland Basin (02-5(v)).
149°E
Production Licences
146°E
147°E
148°E
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150°E
graticular blocks and lies immediately north of the Basker-Manta and Kipper fields and west of the Sole gas field. Water depths are generally less than 200 metres. Area V02-4, over 135 square km, comprises two graticular blocks and is located approximately 80 kilometres southeast of Lakes Entrance. A number of oil and gas fields lie in close proximity to this area (Basker-Manta oil and gas field to the northeast, the Flounder, Halibut-Cobia and Mackerel oil fields to the west and the Blackback oil field to the south).
Gippsland Basin acreage Area 02-5(v) is located in the coastal strip to the southwest of the Golden Beach gas accumulation and to the south of the Seaspray area where sub-commercial hydrocarbons were encountered in earlier Woodside wells. Area VIC/G-02(1) is located in the Strzelecki Group province, rocks that have not been as thoroughly explored as their counterparts (the Otway Group sediments) in the Otway Basin. Drilling and seismic control in these blocks is limited.
Murray Basin acreage Area VIC/M-02(1) is located in the epicratonic Murray Basin which is also a Cainozoic stratotectonic feature underlain by a number of infrabasins or troughs containing Late
EXPLORATION
Carboniferous, Permian and Early Cretaceous sediments. The troughs extend in a NE direction into NSW where the depth to the Early to Middle Palaeozoic basement is less than 1000 metres. The basin is poorly explored with only eight wells drilled in its Victorian sector. Both the State and Commonwealth acreage will be released under the relevant Petroleum Act’s competitive work program bidding system. Invitations to submit bids will be under the Commonwealth Petroleum (Submerged Lands) Act 1967 for the offshore areas, the
State of Victoria Petroleum (Submerged Lands) Act 1982 for the coastal water areas and under the State of Victoria Petroleum Act 1999 for the onshore areas. Applications close at 4 PM as follows: • Commonwealth areas V02-1, V02-3 & V02- 4 on 10 April, 2003 • Commonwealth area V02-2 on 24 October, 2002 • State water areas VIC/02(1), 02(2), 02(3), 02(4) & 02(5) & onshore Gippsland Basin area VIC/G-02(1) on 24 October, 2002
• State onshore Murray Basin area VIC/M-02 (1) on 1 August, 2002. For further information on gazetted blocks, conditions and criteria for selection and submission of applications, visit the Commonwealth (ITR) website www.industry.gov.au/resources/petroleum.htm or the Victorian Government (NRE) website: www nre.vic.gov.au/minpet/pet/pet.htm. Or contact: Maher Megallaa, Manager acreage release: Telephone (03) 94125082 or e-mail: [email protected]
FIGURES SHOW VIC RESURGENCE
S
tatistics revealed at the Australian Petroleum Production and Exploration Association Conference in Adelaide last month show the continued resurgence of Victoria’s oil and gas industry. Exploration expenditure in Victoria’s hydrocarbon provinces increased by 200 per cent in the 2000/2001 fiscal year compared to 1999/2000, with high success rates. Drilling success rates varied from 50 per cent in the offshore Gippsland Basin to 75 per cent in the eastern offshore Otway Basin, including the Tasmanian wells, and a remarkable 100 per cent in the onshore Otway Basin. Esso/BHPBilliton continued petroleum development in the offshore Gippsland Basin. Workovers were also carried out at several older oil fields such as Flounder, Halibut, Kingfish and West-Kingfish. Production of crude oil and condensate from the offshore Gippsland Basin has declined significantly since the mid-1980s as the reserves of the first-developed major fields approach depletion and the current discovery rate is unable to keep up with the production decline. In 2000/2001 the major oil and condensate producers were Bream, Flounder, Fortescue, Halibut, Kingfish, Tuna, West-Kingfish and West-Tuna. These eight fields produce more than 78 per cent of liquid hydrocarbons from the Gippsland Basin. However, while production from the major fields is declining, development and work-over activities have reduced the rate of decline in oil production. REPORT CARD In an interview on Radio National, APPEA executive director Barry Jones provided a report card on the performance of the state and federal governments, rating their approach to energy issues. Victoria rated top of the list, particularly on the exploration and production side.
The Gippsland Basin currently provides 158,000 barrels per day, which represents 25 per cent of Australia’s total production.
Geographe-1 and North Geographe-1 were drilled by Woodside Petroleum/Origin Energy in the offshore Otway Basin.
Gas production, generally linked to demand level, met the 2001 winter peak demand of 800 million cubic feet a day (Mcft/d). On average, the winter demand is about 650 Mcft/d while the summer demand averages 450 Mcft/d.
While East Pilchard-1 confirmed an extension to the Kipper gas field, Geographe-1 was a significant new gas discovery.
Exploration
Gippsland Basin: By June 30, 2001, a total of 3.7 billion barrels of liquid hydrocarbons had been produced from the offshore Gippsland Basin, while remaining proven recoverable oil reserves total 432 million barrels. The recoverable gas reserves in the Gippsland fields have been depleted from the initial 10 trillion cubic feet (Tcf) to 4.4 Tcf remaining.
A total of 825.4 line kilometres of 2D and 1069.3 square kilometres of 3D seismic data were acquired in Victoria during 2000/01. The 2D seismic survey consists of 142.7 line kilometres in onshore Gippsland (111.38 km in PEP-161 and 31.3 km in PEP-137/138), 449.7 line kilometres in the offshore Gippsland Basin (VIC/ P41) and 233 line kilometres in the onshore Otway Basin, consisting of 70.5 km in PEP-119, 99.5 km in PEP101/111, and 63.0 km in PEP-159/152. The 3D seismic surveys in Victoria comprise 271.6 square kilometres in the onshore Otway Basin, (83.6 sq. km in PEP-132 and 188.0 sq. km in PEP-153/154), 714 square kilometres in the offshore Otway Basin (VIC/P43) and 84.4 square kilometres in the offshore Gippsland Basin (VIC/RL-5). Seven onshore exploration wells and one appraisal well were drilled in the onshore Gippsland Basin by Lakes Oil NL, Santos and Origin Energy. They include the non-economic Trifon-1 and Gangel-1 in PEP-157. Also drilled were Tregoney-1 in PEP-153, Croft-1, McIntee-1, Lavers-1, Naylor-1 in PEP-154, plus one appraisal well, Dunbar-DW1 in PPL1 in the onshore Otway Basin. Five of these wells, including the appraisal well, resulted in economic gas discoveries in the onshore area near Port Campbell. Eagle Bay Resources and ESSO/ BHP Billiton drilled two exploration wells, Northright-1 (VIC/P41) and East Pilchard-1 (VIC/L-9) in offshore Gippsland. 13
Oil and Gas Reserves
Gas-in-place in the undeveloped fields of Esso/BHP Billiton and other operating companies in the offshore Gippsland Basin has been estimated to be an additional 3.4 Tcf. Otway Basin: As of June 30, 2000, the recoverable gas reserves in the onshore eastern gas fields of the Victorian Otway Basin were reduced from the initial 59 billion cubic feet (Bcf) to 36.7 Bcf, including the reserves of the undeveloped fields. The developed fields in the Port Campbell region include the North Paaratte, Mylor, Fenton Creek, Skull Creek, Dunbar, Penryn and Wallaby Creek fields. The undeveloped fields are Grumby, Langley, McIntee, Tregoney, Lavers, Naylor and Croft. The initial recoverable reserves of carbon dioxide from Boggy Creek Field in the Port Campbell area was 13.9 Bcf. Cumulative gas production now stands at 2 Bcf and the remaining reserves 11.9 Bcf. F O R M O R E I N F O R M AT I O N C O N TA C T:
Dr Kourosh Mehin Manager Petroleum Resources, DNRE Telephone: (03) 9412 5074
REGULAR FEATURE
Victoria’s
14
REGULAR FEATURE
mineral, oil and gas resources
15
LICENCE REVIEW
Mineral Licences
January/March 2002
EXPLORATION LICENCE APPLICATIONS TITLE NO. EL4633 EL4634 EL4635 EL4636 EL4637 EL4638 EL4639 EL4640 EL4641 EL4642 EL4643 EL4644 EL4645 EL4646 EL4647 EL4648 EL4649 EL4650
STATUS CANAM APPLICATION CANAM CURRENT APPLICATION APPLICATION CURRENT APPLICATION APPLICATION APPLICATION CURRENT APPLICATION APPLICATION APPLICATION APPLICATION CANAM APPLICATION APPLICATION
MAP SHEET OUYEN ST ARNAUD NATIMUK DOOKIE CASTLEMAINE BEAUFORT DUNOLLY NATIMUK MANSFIELD BEAUFORT DOOKIE MITIAMO MITIAMO MATLOCK GRAMPIANS LALBERT DOOKIE NATIMUK
PRIMARY OWNER ILUKA MIDWEST LTD RANGE RIVER GOLD NL BASIN MINERALS HOLDINGS NL YARDARINO LTD BLACKWOOD GOLD MINES PTY LTD RANGE RIVER GOLD NL SORD TECHNOLOGIES LTD BASIN MINERALS HOLDINGS NL WEDDERBURN MINING PTY LTD SEDIMENTARY HOLDINGS LTD KNIGHT INDUSTRIES PTY LTD MPI GOLD PTY LTD MPI GOLD PTY LTD WEDDERBURN MINING PTY LTD MPI GOLD PTY LTD BASIN MINERALS HOLDINGS NL SELECT RESOURCES PTY LTD BASIN MINERALS HOLDINGS NL
EVENT DATE 03/01/2002 07/01/2002 09/01/2002 17/01/2002 21/01/2002 24/01/2002 31/01/2002 06/02/2002 07/02/2002 12/02/2002 12/02/2002 13/02/2002 13/02/2002 25/02/2002 27/02/2002 08/03/2002 19/03/2002 26/03/2002
AREA SIZE 1 GRAT 209 GRATS 1 GRAT 119 GRATS 134 GRATS 184 GRATS 610 GRATS 35 GRATS 277 GRATS 297 GRATS 37 GRATS 29 GRATS 10 GRATS 44 GRATS 238 GRATS 1 GRATS 1,554 GRATS 1 GRATS
EVENT DATE 14/01/2002 14/01/2002 15/01/2002 15/01/2002 13/02/2002 13/02/2002 21/02/2002 21/02/2002 07/03/2002 07/03/2002 07/03/2002 21/03/2002 21/03/2002 21/03/2002 21/03/2002
EXPIRY DATE 13/01/2007 14/01/2002 15/01/2007 15/01/2007 12/02/2007 12/02/2007 20/02/2007 20/02/2007 07/03/2002 07/03/2002 06/03/2007 20/03/2007 20/03/2007 20/03/2007 20/03/2007
EVENT DATE 02/01/2002 14/01/2002 14/01/2002 15/01/2002 13/02/2002 21/02/2002 21/03/2002
EXPIRY DATE 02/01/2002 14/01/2002 14/01/2002 15/01/2002 13/02/2002 21/02/2002 21/03/2002
EXPLORATION LICENCES GRANTED TITLE NO. EL4570 EL4613 EL4616 EL4617 EL4578 EL4604 EL4619 EL4620 EL4635 EL4633 EL4622 EL4627 EL4621 EL4631 EL4594
STATUS CURRENT CANAM CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CANAM CANAM CURRENT CURRENT CURRENT CURRENT CURRENT
EVENT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT
MAP ALEXANDRA BALMORAL DUNOLLY DOOKIE COLERAINE MORTLAKE WARRAGUL WONTHAGGI NATIMUK OUYEN WEDDERBURN KANIVA ARARAT WILLAURA HEATHCOTE
TITLE NO EL4005 EL3838 EL4259 EL4046 EL4170 EL4248 EL3616
STATUS EXPIRED SURRENDERED SURRENDERED SURRENDERED SURRENDERED SURRENDERED SURRENDERED
MAP DUNOLLY BEAUFORT DUNOLLY NAGAMBIE CHARLTON KERANG HEATHCOTE
TITLE NO. MIN5360 MIN5361 MIN5362 MIN5363 MIN5365
STATUS CURRENT CURRENT APPLICATION APPLICATION APPLICATION
MAP SHEET DOOKIE DANYO ROBINVALE DUNOLLY SKIPTON
TITLE NO MIN5237 MIN5251 MIN5348 MIN5350 MIN5360
STATUS CURRENT CURRENT CURRENT CURRENT CURRENT
TITLE NO MIN5239 MIN4682 MIN4511 MIN5174
STATUS SURRENDERED SURRENDERED EXPIRED EXPIRED
PRIMARY OWNER DUNCAN R MCLEAN BASIN MINERALS HOLDINGS NL WEDDERBURN MINING PTY LTD DR PAUL R MESSENGER PURUS ENERGY LTD PURUS ENERGY LTD GOLDEN SIGNATURE NL GOLDEN SIGNATURE NL BASIN MINERALS HOLDINGS NL ILUKA MIDWEST LTD ILUKA RESOURCES LTD YARDARINO LTD P S FORWOOD MOUNT ISA MINES LTD FLITEGOLD PTY LTD
EXPLORATION LICENCES SURRENDERED, CANCELLED OR EXPIRED PRIMARY OWNER SORD TECHNOLOGIES LTD SEDIMENTARY HOLDINGS LTD STRATA MINING CORPORATION LTD NEW HOLLAND MINING NL STRAND MINERALS NL BASIN MINERALS HOLDINGS NL FLITEGOLD PTY LTD
MINING LICENCE APPLICATIONS PRIMARY OWNER LAWRENCE A MCCALLUM BORAL AUSTRALIAN GYPSUM LTD TAMAS KAPITANY ANTHONY GEORGE FRASER KAOLIN AUSTRALIA PTY LTD
EVENT DATE 11/01/2002 30/01/2002 13/02/2002 28/02/2002 20/03/2002
AREA SIZE 5.0 HA 120.3 HA 5.0 HA 4.0 HA 231.4 HA
MINING LICENCES GRANTED EVENT GRANT GRANT GRANT GRANT GRANT
MAP STRATFORD CRESWICK MATLOCK DUNOLLY DOOKIE
PRIMARY OWNER PACIFIC MINERALS PTY LTD S W PEARSON C TOIFL DUNOLLY GOLD DEVELOPMENT PTY LTD L A MCCALLUM
EVENT DATE 25/01/2002 13/02/2002 21/02/2002 07/03/2002 07/03/2002
EXPIRY DATE 24/01/2022 12/02/2007 20/02/2012 06/03/2007 06/03/2007
EVENT DATE 25/01/2002 07/03/2002 17/03/2002 26/03/2002
EXPIRY DATE 25/01/2002 07/03/2002 17/03/2002 26/03/2002
MINING LICENCES SURRENDERED, CANCELLED OR EXPIRED MAP DUNOLLY BUFFALO MANSFIELD CASTLEMAINE
PRIMARY OWNER GARY R FORD JOHN G MEADOWS TERROCK PTY LTD KENNETH W LAKEY
ABBREVIATIONS: SURR - SURRENDERED, CANC - CANCELLATION CAN/AM - CANCELLED/AMALGAMATED
16
ENVIRONMENT
New standards for Box-Ironbark areas
T
he Victorian Government has accepted a set of principles to apply to exploration and mining activity in Victoria’s important Box-Ironbark forest and woodlands areas. “These will improve environmental outcomes by setting clearly establishing expectations for operational practices, rehabilitation and environmental assessment,” a government spokesperson said. The move follows the release of the final report of the Environment Conservation Council into the management and conservation of Victoria’s dwindling Box-Ironbark forest and woodlands areas. In recommending a substantial increase in the range and number of national and other parks and reserves containing Box-Ironbark forest and woodland ecosystems, the ECC said that Box-Ironbark forests once covered more than three million hectares of Victoria's northern and central regions. However, since European settlement, 83 per cent of the original forests had been cleared and fragmented for agriculture, urban development, gold mining and wood products. It found that what remains of Victoria’s original Box-Ironbark area is highly modified and that much of the rich diversity of flora and fauna is now classed as rare or threatened. “At least ten plant and animal species are known to have disappeared from the study area since the 1840's and numerous others have become locally extinct,” the report said. “It is also clear that many species, particularly birds, are known to be still declining. “Accordingly, a key feature of Box-lronbark nature conservation is the promotion of ‘recovery’ for many species, rather than simply maintaining the status quo.” The report also acknowledged the importance of the study area to the mining industry by pointing out that the area “produces 99 per cent of Victoria's gold and much of the area is considered highly prospective.” “It is very important both to local communities and Victoria as a whole that exploration and mining continue,” the report adds.
recommendation on the creation and expansion of new and expanded Box-Ironbark parks and reserves. The Minister for Environment and Conservation, Ms Sherryl Garbutt, said that the government’s vision for the areas would focus on their value as precious and important community landscapes. She added that legislation covering the new arrangements was expected to be introduced in the Spring 2002 sittings of State Parliament. Key points from the government’s response to the ECC report and which impact on the mining industry include: • New mining and exploration are not permitted in National and State parks. • The majority of the new National and State parks do not incorporate established goldfields or areas of high prospectivity. • Where areas of significant mining interest have been included (the Greater Bendigo National Park, Castlemaine Diggings National Heritage Park and Deep Lead Nature Conservation Reserve) the parks and reserve will be limited in depth to 100 metres, thereby allowing for underground mining.
“This report recommends continued access for exploration and mining to 77 per cent of the public land in the study area (currently 91 per cent).”
• In other new parks and nature conservation reserves, exploration and mining are allowed subject to the consent of the Minister for Environment & Conservation.
The government has largely adopted the ECC’s recommendations including the major
• A streamlined process for mining and exploration applications will be developed 17
• Prospecting will be generally permitted on nearly all public land, except where there is evidence to suggest it will adversely affect significant natural and cultural values. This includes State parks and areas of some National parks, reflecting a significant change in park policy, in recognition of the importance of prospecting activity in the Box-Ironbark area. • Park management plans, which identify zones in which prospecting will/ will not be permitted, are to be determined by an open public process, including consultation with the Prospectors and Mining Association of Victoria (PMAV). • There will be only about a 12% decrease in available area for prospecting, mostly from the areas of least interest. • Guidelines are to be developed with PMAV for prospecting on public land. • A grievance process will be established to deal with complaints from public land users, including prospectors, regarding decisions made by land managers. The Victorian Minerals and Energy Council said that it strongly supported the conservation of the unique features of the Box-Ironbark forests and woodlands. “We also believe that exploration and mining activities within environmentally important Crown land can be undertaken with care,” the VMEC added. “The economic and conservation values can co-exist and can do so in a manner that is beneficial to the long-term survival and expansion of delicate ecosystems. Sustainable and environmentally sound mineral exploration and development benefits all Victorians.” However, VMEC executive Director, Chris Fraser said: “ The immediate and most obvious concern with the final report is that the area of exempt Crown land has increased by 260 per cent and that the area of restricted Crown land (including the natural heritage park) has increased by 135 per cent. “Apart from the obvious access restrictions this applies to the industry, we are concerned that this lock-up of land will adversely impact on the perception of Victoria as a good place to invest in exploration and mining.” F O R M O R E I N F O R M AT I O N C O N TA C T:
For more information, or copies of the report contact Shane Dwyer, Executive Officer, Environment Conservation Council (03) 9412 5143 email: [email protected]
SPECIAL FEATURE
Victoria – a hot location “The thinking within NRE at the moment is focused on the question of ‘What is the framework that we are going to operate in with respect to the triple bottom line? “We have to consider the broad community that wants resources and balance that with the community reaction at the local level when those resources are extracted. “This is not just mining and energy, it goes into the whole area of agriculture, forests, fisheries and so on. “There is certainly a desire to have a more holistic view of these issues within NRE and I think within government as a whole.” Dr Aldous is also keen to look into broad issues affecting policy development. He has identified knowledge management and strategic analysis as a major priority.
DISCOVERY INTERVIEWS VICTORIA’S TOP ENERGY AND MINERALS ADMINISTRATOR
V
ictoria is a hot location at the moment according to Dr Richard Aldous, the new man in charge of administering the state’s mineral, petroleum and energy industries.
The appointment of Dr Aldous as Executive Director Energy and Minerals sees the Department of Natural Resources and Environment bring together the administration of mining, energy and petroleum into one division. Previously, Victoria’s energy activities were administered separately from the minerals and petroleum industries. In an interview with Discovery magazine, Dr Aldous said that the added responsibility for energy policy was a major opportunity for the new division. However, he believes that with the existing skills within the department there will be many benefits.
“There is now a continuum and the government and NRE are keen to take a holistic view across that with respect to policy. “We need to understand the drivers across the value chain, define possible future scenarios and develop policy to best steer the state through those. “A critical thing is monitoring and understanding what is going on in the emerging energy markets and setting a sound basis for reinvestment.
THE BIG CHALLENGE FOR US AT THE MOMENT IS WE NEED TO DEVELOP A STRATEGIC POLICY FRAMEWORK THAT COVERS THE WHOLE SPECTRUM, INCLUDING THE INTERPLAY BETWEEN GAS AND ELECTRICITY MARKETS.
“There are a lot of logical synergies in taking a holistic view of the value chain from gas and coal feeding into Victoria’s energy supplies,” he said. “Inevitably, you start to look at the long-term resource base with respect to coal and gas and then into pipeline and electricity distribution issues, culminating in a full retail competition market place.
“But also we’ve got new issues to consider like Greenhouse, alongside more traditional issues of land access and approvals for big projects.
“The big challenge for us at the moment is we need to develop a strategic policy framework that covers the whole spectrum, including the interplay between gas and electricity markets.
“Take brown coal for example. We have huge resources, but it is a new challenge to get a big new coal power project across the line from an environmental point of view. 18
“I think within NRE, we have been weak on that front in a number of areas. So I want to see better analysis and knowledge integration, leading into sound policy, better implementation and appropriate regulation.” The value of coming into a new organization is that you can see areas where there are strengths and weaknesses, maintains Dr Aldous. “Certainly we have started to identify some areas that need improvement. If you want to have continuous improvement, you are always going to find areas of weakness. “Regulation of the mineral, petroleum and extractive industries is a key role for the division and we are working to continuously improve tenement processes, the quality of regulation and industry performance. “There is also potential to bring new technology to assets that are unique to Victoria such as Victoria’s vast reserves of brown coal. This could be through reduced emissions on power generation and developing new uses for coal. “Victoria is a hot location at the moment. We have had the brown coal tender. We have strong emerging mineral sands projects, new investment in gold and a number of new gas pipelines and new gas discoveries. “There is still a strong need to get new insights into Victoria’s geology and minerals and petroleum resource potential with a view to attracting new investments to the state.” Dr Aldous applauded Victoria’s good track record of moving forward with market reform
SPECIAL FEATURE
Victoria’s new Executive Director of Energy and Minerals, Dr Richard Aldous, brings extensive international mining and management experience to his new post. He has worked in the mining industry and exploration in Australia, South Africa, Indonesia and Zimbabwe. Born in the UK, he earned his geology degree at Sheffield University and completed his PhD on copper mineralisation in alkaline igneous systems at the Royal School of Mines (London University) after three years in Africa. After two years working with the Blue Circle Industries group in the UK, he came to Australia in 1982 with BHP, which was searching the world for Olympic Dam style copper uranium ore bodies. As a planning analyst for BHP’s minerals division, he was involved with the interplay between financial, economic and technical aspects of projects. He then became business development manager for BHP Gold before joining Newcrest, and later working as a consultant with an American firm, reducing operating costs in industrial and mining operations in Australia and Indonesia. He then led WMC’s corporate planning section for three years before joining Iluka Resources (mineral sands) in late 1998 as Executive General Manager Exploration, Technology and Development. Discovery asked Dr Aldous why the change into a government role? Dr Richard Aldous (left and above): ‘We have a commitment to understand and work with local communities and do the right thing on the environmental side.’ he says.
and believes there is an opportunity to leverage off that. “As a place to invest Victoria obviously has very good commercial infrastructure, a skilled workforce and low sovereign risk. “We have got to make sure that Victoria capitalises on its mineral and petroleum resource base by attracting investment. “Equally, we have a commitment to understand and work with local communities and do the right thing on the environmental side.”
“In previous roles in business and project development I have had to interface with governments in both Australian and overseas” he said. “In WA I had a fair bit to do with government over issues about competing demands for land access. “I have had an interest in government processes and it has expended my horizons considerably. “In a way, working inside government is about playing on a bigger field. It’s an opportunity to contribute to a whole section of the economy and to understand how government processes work. I am enjoying that enormously. “I also have an interest in the balance of the triple bottom line and how society and businesses are struggling with creating that balance. “I was involved with the World Business Council of Sustainable Development and I really enjoy that kind of thing; really getting your mind around complex problems and then also steering some direction through that complexity. “Government is an opportunity to do that as well.”
the WORLD is yours
You’ll find a world of information on Victorian mining, geology and petroleum in the Department of Natural Resources’ Minerals and Petroleum Reference Centre. Although focussed to serve members of the mining industry, the MPRC is open to the public from 8.30am to 5pm, Monday to Friday. It is conveniently located next to the Minerals Business Centre.
special collections include: • Expired tenement reports on microfiche (and hard copy) • 5000+ Geological Survey of Victoria Unpublished Reports • Departmental publications (old Mines Department records and reports dating from 1851) • Victorian published geological maps, both current and historical historical • Underground mine plans on microfiche • 1600+ B&W historical Victorian mining photographs
The MPRC is now located with the Minerals Business Centre on the e 8th floor, Department of Natural Resources and Environment, 240 Victoria Parade, arade, East Melbourne. Phone: (03) 9412 5145. Fax: (03) 9412 5157. E-mail:[email protected] .vic.gov.au
19
GSV DISPLAY
It’s all
beneath our feet
A
major exhibition profiling the remarkable history of geological mapping in Victoria and marking the 150th anniversary of Victoria’s Geological Survey organisation (GSV) has opened at the Melbourne Museum. The GSV was the first geological survey body to be established in Australia and one of the earliest in the world. The exhibition, entitled ‘Beneath our Feet’, displays early Victorian manuscript maps, spectacular mining models built in the 1850’s, early and modern scientific instruments and the latest high-technology images of Victoria’s geology. Many of the items on display form an important part of Victoria’s heritage. They also provide a unique perspective on the development of Victoria’s society and record the changes in the science, techniques and technologies that geologists use to understand the rocks beneath our feet.
THE GSV WAS THE FIRST GEOLOGICAL SURVEY BODY TO BE ESTABLISHED IN AUSTRALIA AND ONE OF THE EARLIEST IN THE WORLD.
The exhibition runs until July 14 in the Science and Life Gallery at the Museum. Opening the exhibition on May 3, Victoria’s Minister for Energy and Resources, Ms Candy Broad, said that the GSV remained a relevant and dynamic organisation as it was a century and a half ago. In recent years, its focus had returned to something similar to its original primary role – that of providing support for the search and development of new mineral resources.
“VIMP has also been a major factor in the emergence of the mineral sands industry and the rejuvenation of the gold industry in Victoria.
Ms Broad added that GSV’s role was supported by the Bracks Government, which was providing $4 million over four years through the Victorian Initiative for Minerals and Petroleum (VIMP) program.
“Its extension over the next three years will further enhance the State’s minerals and petroleum prospectivity.” The original impetus to set up a geological survey came in 1852 from Governor La Trobe following the discovery of gold in Victoria in 1851.
“VIMP has provided comprehensive airborne geophysical survey coverage of the State, which allows up-to-date geological mapping and database compilation.” Ms Broad said.
Like any government representative worth his salt, La Trobe was looking at the possibility of gold being a source of revenue for the Crown. And, to make sure that revenue stream could be maintained, La Trobe wrote to the Colonial Office in London requesting the services of a mineral surveyor, just in case the initial gold deposits ran out.
“This ensures that Victoria’s regional geological database remains world class. Past and Present: GSV Director Phil Roberts (right) was joined at the opening of the display by four former Directors of the organisation (from left) Don Spencer-Jones, Tom Dickson, John Cramsie and John Knight. Lower: (1) Museum Victoria staffers Penny Morrison and Eve Almond. (2) John Knight recalls an historical point (3) Author Robyn Annear with Linda Harrison, great grandaughter of GSV geologist James Stirling.
Alfred Selwyn, a geologist with the British Geological Survey, was appointed to the position in May 1852. Selwyn single handedly built up the Geological Survey into a respected institution and left his mark on Victoria through the pro20
GSV DISPLAY
Celebration: (Anti-clockwise from below): GSV Director Phil Roberts helps the Minister for Energy and Resources, Candy Broad, cut GSV’s 150th anniversary cake. Former GSV Director John Knight recalls some history for show curator Peter O’Shea. Peter O’Shea take a close up look at one of the exhibits. GSV technical officer David Higgins shows his son Finn, aged 2, some old survey implements. A model of the Port Phillip Mine at Clunes, made by Carl Nordstrom in 1859.
duction of an exquisite geological quarter sheet map series. For the first few years, Selwyn worked with only one assistant, mapping an impressive area of more than 1000 square miles a year.
IN RECENT YEARS, GSV’S FOCUS HAS RETURNED TO SOMETHING SIMILAR TO ITS ORIGINAL ROLE OF PROVIDING SUPPORT FOR THE SEARCH FOR AND DEVELOPMENT OF NEW MINERAL RESOURCES.
By the 1860s, the organisation was ranked among the best in the world. Over its 150-year history, the Geological Survey has closely reflected the economic, social and political development of Victoria. Initially established to support mining activity on the central Victorian goldfields, its role and focus continuously changed in response to the diversity of needs of the rapidly expanding population.
GSV grew to meet this demand, paying particular attention to the areas of water supply, and engineering geological advice for major construction projects, in addition to its core activities of mapping and mineral resource studies.
As both the rural and industrial development of the colony of Victoria expanded, so too did the need for fossil fuels, building materials and underground water. Although the Geological Survey was severely understaffed for much of the latter half of the 1800s, it nevertheless succeeded in discovering supplies of black and brown coal, underground water, building stone, sand and gravel, in addition to its core activity of geological mapping. With the decline of the gold mining industry in Victoria after World War I, the GSV focussed on the development of Victoria’s brown coal resources, and began the search for oil and gas.
The LaTrobe Valley brown coal mines were developed, and drilling carried out by the GSV led it to recommend Bass Strait as a future oil and gas province. Later, the post World War II population and economic boom also led to an unprecedented need for mineral resources and geological expertise.
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In recent years, GSV’s focus has returned to something similar to its original role of providing support for the search for and development of new mineral resources. F O R M O R E I N F O R M AT I O N C O N TA C T:
Kate Milkins, PRO, Melbourne Museum Telephone: (03) 8341 7136 or email: [email protected]
MINERAL SANDS
MIX MUST BE RIGHT, SAY SANDMINERS
S
trong emphasis on finding the right mix of infrastructure, corporate development and environmental and social practices marked a major conference on the rapidly growing Murray Basin mineral sands industry in Mildura during April.
“LIKE THE REST OF THE MINING INDUSTRY WE NEED A CONTINUAL FLOW OF FUNDS FROM THE INVESTING PUBLIC, BANKS AND FINANCIAL INSTITUTIONS”
Every corporate player in the Murray Basin region mineral sands industry as well as virtually all local councils, state governments and stakeholders attended the meeting where the universal theme was clearly to create a sound base in which the new industry can flourish. Patrick McManus, general manager of Murray Basin Titanium, which is half owned by Japanese based RZM Corp, told the conference that, for the industry to flourish, the mineral sands industry needed to ensure that projects were well planned to ensure their success. Investors would quickly lose interest in the sector if the poor record of the past in other areas of Australia occurred in the Murray
Above (centre): MBT’s Patrick McManus: Mineral sandminers must avoid past errors, he warns.
reduction will limit the availability of funds for deserving projects.” Murray Basin Titanium has developed the 30,000 tonnes-a-year project at Wemen near Robinvale, the first of potentially five substantial new projects planned in the region.
Basin, he said, warning that a string of mineral sands project failures in the past two decades had harmed the industry. “Like the rest of the mining industry we need a continual flow of funds from the investing public, banks and financial institutions,’” Mr McManus said. “Low returns and capital
Mr McManus said that 12 of the last 13 major mineral sands projects developed in Australia since 1969 had been fundamentally unsound and had failed to generate a significant return for investors. That had had a ‘deleterious effect’ on the industry, he said, citing the worst failure as BHP’s Beenup project in Western Australia which had failed because of planning, mining, marketing and financing problems
GO-AHEAD LIKELY FOR DOUGLAS
B
asin Minerals is confident it will secure approval for its Douglas minerals sands project near Horsham in early June to allow the development of Victoria’s second new mineral sands mine. This follows public hearings on its environmental effects statement during March. Written submissions by a wide spectrum of interested parties were aired in public hearings before a three-member panel in Horsham between March 12 and March 18.
Now Basin Minerals has announced it has selected Southern Grampians Shire as the preferred location for its secondary processing plant to treat mineral concentrates from the Douglas stage one mine site. Southern Grampians Shire was chosen after a study of six sites, including a site near the mine. The plant will be located in the southwest corner of the Glenelg Region Water Authority’s 1000-acre Monivae property, about six kilometres south of the regional centre of Hamilton.
The panel has six weeks to report to the Minister for Planning.
The property is currently being used for storage and disposal of recycled city water to pasture and blue gum plantations.
The spin-off benefits of the developing mineral sands industry in the Murray Basin are also becoming evident.
Basin Minerals has now begun the planning process on the land through an application to the Southern Grampians Shire for a planning permit.
Early this year Austpac Resources revealed plans for a rutile plant to be built at Portland.
Basin Minerals managing director Dr Brad Farrell said the site had many favorable attrib22
utes, principally its proximity to the Henty Highway linking the site to the export port of Portland; rail access on its western side to Portland and Mildura; a gas pipeline traversing the property; water for processing purposes and importantly, its location near the major regional centre of Hamilton. Dr Farrell said the wooded and gently underlying nature of the site was also aesthetically favorable for the location of a mineral processing plant. The processing is expected to employ 61 people on a full-time basis and create a flow on effect in the region of another 189 jobs. The overall Douglas mineral sands project is expected to start production of 300,000 tonnes pa of mineral sands product in late 2003. Iluka Resources are also moving ahead with development of their mineral sands assets in the Victorian portion of the Murray Basin.
MINERAL SANDS
Rail help: Standardisation of Victoria’s rail system will enable easy access for mineral sands miners in the Murray Basin to major export centres such as Portland.
compounded by inexperienced staff running the venture. While there is keen competition between the three separate state areas (Victoria, NSW and SA) involved in the development of the Murray Basin’s vast mineral sand deposits, a considerable amount of planning by joint committees representing all three states and substantial community and local government input is combining to ensure that the industry will operate from a stable policy and infrastructure base. In Victoria, the industry is receiving substantial assistance through the standardisation of the rail system which will allow mineral sands products to be transported cheaply and easily from the mines to processing plants and ports at Hamilton and Portland. While the potential of the Murray Basin is strong, companies planning new investments in the region still face substantial hurdles to ensure successful projects. Iluka Resources, one of the major players in the global minerals sands industry, is developing a major position in the Basin in its own right and as a partner of companies such as BeMax Resources. Iluka executive general manager Hamish Bohanen, said all Murray Basin producers
“THE INDUSTRY’S SUCCESS WILL DEPEND ON THE ABILITY TO LEARN FROM THE PAST, PLAN THOROUGHLY FOR THE FUTURE, RATIONALISE THE REGION’S DEVELOPMENT AND MEET THE NEEDS OF THE MARKET,” faced challenges of competition, new conditions, unique processing requirements and unrelenting demands for high-quality products from customers. “The industry’s success will depend on the ability to learn from the past, plan thoroughly for the future, rationalise the region’s develop-
Confident: Basin Mineral’s MD, Dr Brad Farrell is confident of an early start to the company’s Douglas project.
ment and meet the needs of the market,” he told the conference. The Murray Basin is unique in that its development has largely been led by junior resources companies, many of which have not previously been involved in the mineral sands industry.
THE PROCESSING IS EXPECTED TO EMPLOY 61 PEOPLE ON A FULL-TIME BASIS AND CREATE A FLOW ON EFFECT IN THE REGION OF ANOTHER 189 JOBS.
Iluka recently announced a 28 per cent increase in high-grade titanium minerals and zircon resources in the company’s Murray Basin tenements.
The New South Wales mineral deposits will complement Iluka’s identified resources at Ouyen where work is under way to review the best mining and processing options for fullscale production.
The discovery of three new deposits increased Iluka’s total heavy mineral resources in the region from 10.9 million tonnes to 14 million tonnes. The company told its shareholders in March: “Since August 2001, extensive drilling in New South Wales and Victorian tenements has significantly increased the size and value of Iluka’s Murray Basin mineral inventory.’
Iluka has a team of more than 30 full time and contract employees in the region working on resource assessment and project development.
It had also identified three major new areas of mineral sand deposits including Boulka, in the Ouyen area, Snapper, 120 kilometres north of Mildura, and Dispersion, 70 kilometres east of Mildura.
heavy minerals with an assemblage of 27 per cent rutile and 15 per cent zircon.
Dispersion, the first identified deposit in a highly prospective area east of Mildura, has confirmed grades of more than 22 per cent
Iluka is stepping up its drilling program in the area and plans to reveal new mineral resource estimates later in the year.
The area is close to Iluka tenements due to be drilled and evaluated within the next few months.
23
The work includes drilling programs, engineering studies, hydrological investigation and baseline environmental studies. F O R M O R E I N F O R M AT I O N C O N TA C T:
Dr Brad Farrell, Managing director Basin Minerals Telephone: (08) 9486 1028
PRODUCTION
AUSTPAC SCORES PROCESSING SUCCESS Research success: Research at Austpac’s pilot plant near Newcastle (left) has developed important new processing techniques for mineral sands from the company’s deposits near Horsham. (Below): Excavating work on the Horsham deposits.
“The clay was placed in two stockpiles. The uppermost portion of the Parilla sand is a hardpan, requiring ripping with a bulldozer prior to loading with an excavator and trucking to a separate stockpile,” Mr Smith said. “The barren portion of the Parilla averaged 4.5 metres. Finely laminated heavy mineral bearing sand extended over a thickness of about five metres. “A final ore stockpile was established, generally using the uppermost four metres of the mineralized sand. Some 400 tonnes of ore was set aside. The samples were then shipped to Austpac’s laboratory at Kooragang Island near Newcastle where they were subjected to repeated de-sliming, magnetic separation, roasting, and leaching processes to yield synthetic rutile.” Mr Smith said the initial focus was to produce a synthetic rutile with low impurities, particularly Cr2O3. He said the quality of the synthetic rutile had been improved by refinement of the processing steps. Back at the Horsham mine site, reinstatement of the pit was completed by reforming the pit and then lining it with the impervious clay extracted during the mining process and completing the project as a farm dam.
P
rogress in processing mineral sands products may provide Austpac Resources with a bonanza from its WIM 150 fine-grained, heavy-mineral deposit near Horsham if laboratory tests can be scaled up to commercial production.
A scheduled release by the Wimmera Mallee Water authority allowed the dam to be filled with about 4 megalitres of water to be used for agricultural purposes.
The WIM 150 deposit, discovered originally by Rio Tinto Ltd, contains an extensive heavy mineral resource, but its exceptionally finegrained nature makes it uneconomic in traditional processing facilities. But new work by Austpac has identified a process which produces an agglomerated grain size perfect for processing in normal heavy mineral plants.
The work started early last year when Austpac took a bulk sample of ore from the southwestern portion of the core of the WIM 150 resource, which lies within Exploration License 4521 located to the southeast of Horsham.
Mike Smith, general manager of exploration for Austpac told Discovery that a key issue with the WIM 150 synthetic rutile was the fine particle size which would result in blow-over losses in a chloride pigment plant.
Previous drilling and costeaning (trenching) by Wimmera Industrial Minerals Pty Ltd, a subsidiary of Rio Tinto, provided a useful dataset to predict the distribution of mineralised sand in the area.
But he said that, in a series of bench scale tests Austpac had successfully agglomerated the fine synthetic rutile and achieved a hard, optimally sized product without using a binder. This work is ongoing.
Mr Smith said excavation of the sample first involved stripping the valuable topsoil for later reinstatement. That was followed by the removal and stockpiling of the first layer of clay to a depth of around 3.2 metres. 24
Vegetation around the site was reinstated by Goldfields Revegetation Pty Ltd of Bendigo. Austpac is making a substantial impact on the Victorian mineral sands industry. Apart from its WIM 150 activities, it is also proposing to build a synthetic rutile plant at Portland to process ore from the Murray Basin and its operation in India. F O R M O R E I N F O R M AT I O N C O N TA C T:
Mike Smith, General manager exploration Austpac resources NL Telephone: (02) 9221 3211 Email: [email protected]
NEW EXPLORATION
Diamond hunt resumes Diamond search: Encouraging indicators have been uncovered by search teams working in the Wooragee Valley near Beechworth.
The lower ‘Unit 1’ is interpreted as an arkosic conglomerate, which is shown to be loaded with indicator minerals, including chromites, commonly associated with diamonds, and lies on the shallow granite basement. Using microprobe equipment at the University of Melbourne, chemical analysis of chromite grains from Unit I shows a population interpreted to fall within the diamond bearing kimberlite field – as encouraging a story as it can be. Having gained the majority of information from surface inspections and techniques, the decision was then made to undertake a scout drilling program to better understand the layout, origins and interpretation of the stratigraphic sequence, especially Unit 1.
n the pretty Wooragee Valley near Beechworth, the goldminers of yesteryear enjoyed a glittering prize as they systematically worked the Reedy Creek for its gold.
I
School of Civil and Chemical Engineering at RMIT, who encouraged some of his students to take on Wooragee as an honours project.
But, along with the yellow metal, they also found a glittering array of colorful gemstones, including sapphires, rubies and amethysts, as well as diamonds.
Further geological mapping and stream sampling led to the differentiation of two key stratigraphic units, an important breakthrough in the geological understanding of the valley.
Over three hundred diamonds, some weighing over ten carats, were recovered from the valley, leading the government geologists of the day to proclaim Beechworth as Victoria’s ‘most exciting treasure trove’. Now the search for the source Beechworth’s diamonds has restarted.
of
Beginning essentially as a research project by staff and students at RMIT University, the search has evolved with sponsorship from Providence Gold and Minerals Pty Ltd. PGM, a private company, has been exploring for gold, and more recently diamonds, for nearly fifteen years, with a focus in Victoria and New South Wales. PGM holds exploration title over an area at Wooragee. The work commenced in the mid1990’s, initially through the interest and passion of Graham Granger, senior lecturer in the
Initial geological mapping demonstrated the existence of diamond indicator minerals.
ALONG WITH THE YELLOW METAL, THEY ALSO FOUND A GLITTERING ARRAY OF COLORFUL GEMSTONES, INCLUDING SAPPHIRES, RUBIES AND AMETHYSTS, AS WELL AS DIAMONDS. The upper, more recent, stratigraphic unit, which frequently outcrops in the Wooragee Valley, is a reddish colored conglomerate interpreted as recent alluvium shedding from the topographically higher fault/contact zone to the south. Termed ‘Unit 2’, this conglomerate generally conceals a lower unit and was mapped as Permian age tillite. 25
The scout drilling program, which was undertaken in April 2001, involved sixteen drill holes to the granite basement with a maximum drill depth of 75 metres. The drill holes were sited generally along north/south and east/west lines, over a 2.5km x 0.5km grid. Local landowners were generally supportive of, and intensely curious about, the program. Tom Burrowes, of Providence Gold and Minerals, said that without the support of the majority of the landowners, it would have been difficult to advance the project. “The hospitality we received in many quarters was outstanding and we endeavour to keep land owners informed and help them to understand what is happening in their valley,” he added. “We are not the first to be exploring for diamonds here and are increasing the understanding of the geology. Exploration for diamonds is a high risk business and many farmers struggle to understand why explorers would take this one in a thousand or greater risk.” Mr Burrowes said that the drilling demonstrated the presence of the interpreted flat lying conglomerate (Unit 1), concealed under shallow cover. This Unit 1 is yellow in colour where near surface and oxidised and of blue grey color in the primary state, around 5 metres lower. While the prevailing theory is that diamonds should not exist in eastern Australia, which has deterred exploration in the past, the growing acceptance of the ‘Subduction Model’ for diamond emplacement is gradually changing attitudes.
NEW EXPLORATION
Mr Burrowes said the recent geological work, including drilling, had revealed “some excellent information and, had substantially enhanced the knowledge and prospectivity of the project. “Large, near surface intersections of a blue/grey arkosic conglomerate were obtained. These intersections contain harder dark blue clasts within a softer grey colored matrix. Indicator minerals are observed within the matrix. An extensive deposit of this material is inferred,” he said. This blue grey rock unit is interpreted as being very exotic to the district – where the surface geology is otherwise sandstone and granite (or sand cover) for a radius of 100kms. The Woorgaee Diamond Project has two potential resources • the flat lying blue grey unit - with an inferred potential of 30 to over 100 million tonnes, and,
Future prospects: Further drilling and a bulk sampling program is being considered for the Wooragee project.
• potential primary diamond sources, not yet found, under the valley. Mr Burrowes said that the future work program included processing of some or all of the
THIS BLUE GREY ROCK UNIT IS INTERPRETED AS BEING VERY EXOTIC TO THE DISTRICT samples produced from the recent drilling program. As indicators have already been discovered, the next step logically included analysis for diamonds. Depending on results, a further drilling and bulk sampling program would be proposed. Abundant diamond indicator grains, displaying favorable chemistry, have been recovered from the Wooragee project immediately upstream from an area which had historically produced diamonds from streams, Mr Burrowes said. F O R M O R E I N F O R M AT I O N C O N TA C T:
Tom Burrowes, Managing Director Providence Gold and Minerals Pty Ltd Telephone (03)
GOLD EXPO FIRES SMALL PROSPECTORS
H
undreds of keen prospectors converged on Ballarat during March to visit the second annual Gold and Prospectors Expo where piles of gold nuggets and the equipment necessary to locate them, were on display.
THE CONTINUING STRONG GROWTH IN PROSPECTING WAS INDICATED BY THE BRISK TRADE CONDUCTED BY SEVERAL COMPANIES
Gold pieces from less than less than one gram to impressive nuggets of over 120 ounces were on show as a testament that Victoria still has plenty of gold on offer for everyone from the experienced prospector to the novice fossicker.
Copies of the CD-ROM of goldfield maps were available for viewing with visitors delighted to note that these important historical records are now available in an easily accessible form.
While few of the gold nugget owners would tell where they made their finds, many new chums left the event showing all the signs of gold fever.
The continuing strong growth in prospecting was indicated by the brisk trade conducted by several companies who sold a large number of detectors and related products over the weekend.
Visitors to the expo were greeted by an operating crushing plant and an alluvial wash plant before entering the Ballarat Convention Centre to see the latest developments in prospecting and mining.
Even the ancient art of gold panning has been brought into the 21st century with the Spiral Goldpan of interest to those who don’t mind getting their feet wet!
The event attracted prospectors and smallscale miners from across Australia. The latest in metal detector technology was on display with the GP Extreme from Minelab Electronics and state-of-the-art coils from Coiltek attracting the most attention.
Executive members of the Prospectors and Miners Association (the representative body of Victoria’s small miners and prospectors) were available to answer questions by expo visitors.
Minelab Electronics, an Australian company, is a world leader in land-mine and metal detection technology with its beginnings based in the Victorian gold prospecting industry.
The Energy and Minerals division of DNRE mounted a display, staffed by officers from the Geological Survey, and which won considerable interest. 26
Gekko Systems, which has also revolutionised the art of gold separation using water and gravity, also displayed a working example of its In-Line Pressure Jig. F O R M O R E I N F O R M AT I O N C O N TA C T:
Rita Bentley, PMAV Telephone 0408 328640
GOLD EVENTS
Eager buyers eye local gold industry A
ustralia’s gold sector will continue to be a takeover target for international miners seeking to reduce their political risk by investing in secure countries like Australia.
Gold identities: (left) Randall Oliphant, President of north American miner, Barrick Gold, says Australian gold mines will continue to be takeover targets for international companies. Below: Top executives from local and leading international goldminers, including Bobby Godsell, chairman of the World Gold Council (top), attended the Australian Gold Conference in Melbourne.
This was one of the key themes to emerge among more than 300 Australian and international delegates who attended the Australian Gold Conference in Melbourne during April.
round of mergers and takeovers have strengthened the industry, globally and locally.
It was the first time in its 15-year history that the conference has been held outside of Western Australia and co-incided with the recent decision of the Australian Gold Council to shift its headquarters to Melbourne.
He said the emergence of larger, more financially robust companies would enable companies to be more financially disciplined. This, in turn, would lead to better returns for investors and shareholders in an industry which has been dogged by poor returns to shareholders for many years.
Traditionally, the conference has been held in Perth or Kalgoorlie where the focus has been on exploration and production. However, the capital drought in recent years has caused a substantial change of industry focus. Mining and exploration companies around the world are now concentrating more closely on providing better returns to shareholders, with investors clearly now more discerning about where to place their money. The World Gold Council also held its annual general meeting in Melbourne following the conference, giving delegates the chance to speak directly with the industry’s world representative body.
Another key conference delegate was Bobby Godsell, chief executive officer of South
THE RECENT RISE IN GOLD PRICES AND THE STRENGTHENING GLOBAL ECONOMY HAVE COMBINED TO CREATE A BRIGHT SPOT FOR THE AUSTRALIAN GOLD INDUSTRY ON THE RADAR SCREENS OF INVESTORS.
The recent rise in gold prices and the strengthening global economy have combined to create a bright spot for the Australian gold industry on the radar screens of investors.
gold production, including a $50 million investment in Bendigo Mining, which is moving rapidly towards production at its major New Bendigo project in central Victoria.
This outlook was reflected in the conference theme of ‘Consolidation, Consumption and Confidence.’
Executive director of the Australian Gold Council, Tamara Stevens, told Discovery that consolidation of the gold industry in Australia and the flight of many companies to other sectors has had the effect of leaving only the strongest and most serious of Australia’s gold explorers and producers, strengthening the industry.
A key speaker, Randall Oliphant, president and chief executive officer of North American miner, Barrick Gold, confirmed the widely held view that Australia’s gold sector will continue to be a takeover target for international miners. In the past two years, the majority of Australian gold production has fallen into foreign hands, principally African and North American interests. Late last year, Newmont Mining won a bitterly fought takeover battle for Australia’s Normandy Mining to create the world’s largest gold mining company. Harmony Gold of South Africa has also made a series of major acquisitions in Australian
That, combined with international gold marketing efforts by the Australian and World Gold Councils, has seen demand for gold rise in recent years, absorbing all the gold offered to the market by recent central bank sales, she said. The strong demand for gold, and the rising price, had increased confidence within the sector that better times for the industry are at hand. Mr Oliphant agreed, saying that while consolidation will be an ongoing process, the latest 27
GOLD EVENTS
Gold leaders: Hugh Morgan and Peter Cameron were interested participants at the conference and the launch of the 2002 Goldfields OZGold Award.
African based Anglo Gold, another of the world’s leading gold mining companies. Mr Godsell is also the president of the World Gold Council.
investors the chance to hear first hand, the operations and objectives of each company.
Mr Godsell said that while the WGC existed solely to promote the consumption of gold, information on the strengthening demand scenario was positive news for gold producers.
Private investors rarely have the chance to meet company representatives or hear corporate presentations first hand.
He said gold supply, globally, was likely to remain flat or even decline over the next ten to 15 years, which may help maintain strong gold prices for some time.
Ms Stevens said the ‘Gold Minds’ forum, which was hosted by television personality David Koch, was a tremendous success with almost 200 delegates providing a lively interchange with company representatives.
With gold production set to expand rapidly in Victoria in the next few years, the state is well placed to share in the potential rewards. Ms Stevens said the move by the Australian Gold Council to hold the conference in Melbourne had been a tremendous success by attracting a far wider range of industry supporters such as financiers, bankers and brokers than might have otherwise attended. As a ‘pipe opener’ to the conference, ten of Australia’s gold mining and exploration companies provided an ‘open to the public’ forum for investors.
The three-day program ended with the annual meeting of the World Gold Council, which brightened the event with the expectation of rising gold prices over the next few years. The chief executives and senior officers of companies including Bendigo Mining, Croesus Mining, Pan Australian Mining, Sedimentary Holdings, Kingsgate Consolidated, Herald Resources, Dioro Resources and Gympie Gold held an open forum, giving private and professional
Chief executive of the WGC, Haruko Fukuda said a major opportunity to dramatically increase gold sales into Japan, as a consequence of a looming banking crisis in the country, could see more than 200 tonnes a year of gold being consumed. That would underpin a stronger gold demand scenario worldwide and could lead to stronger prices.
Former jackaroo wins national science award nies, which has its international headquarters in Melbourne.
per cent of the precious metal from otherwise uneconomic deposits.
Sandy Gray is the founder and technical director of his own company, Gekko Systems Pty Ltd, based in Ballarat.
The second Victorian-based national science award winner, BHP Billiton, borrowed heavily from US nuclear submarine navigation technology to create the world’s first airborne gravity survey process, capable of finding hidden mineral and petroleum resources from the air.
The company started as a small, almost backyard operation in Avoca in Central Victoria at a time when gold prices were declining. Today, his proprietary mineral processing equipment is used at more than more than 100 mines in 18 countries. His inventions - the In Line Pressure Jig, In Line Leach Reactor and In Line Spinner - are breakthrough designs in the field of mineral processing.
V
ictorian inventor Sandy Grey, who left school at 15 to become a jackaroo, has won one Australia’s most prestigious national science and technology awards. The Clunies Ross National Science and Technology awards were announced during April. and presented by WMC Ltd chief executive, Hugh Morgan. A second winner was BHP Billiton, one of the world’s largest multi-national mining compa-
More than 150 years after the discovery of gold in Victoria, Mr Gray made the intuitive leap to apply modern technology to the centuries old gold recovery process of panning. He knew it was possible to use gravity to separate gold from ore by panning, but his genius was in applying the principle to invent his unique Inline Pressure Jig in which the process is conducted inside a closed system using water as its main medium. “It sounds too simple to be true,” he said. The Inline Pressure Jig uses no cyanide, commonly used to leach out gold, to recover 95 28
“It was a huge challenge,” said Dr Edwin van Leeuwen, 51, manager exploration technologies for BHP Billiton in Melbourne, who coordinated researchers in three US and two Australian cities for the group’s now famous Falcon project. Because of Dr van Leeuwen’s five-year project, the miner can use light aircraft to conduct combined gravity and magnetic mineral surveys. “No one has done this before. The gravitational surveys are usually done from the ground taking a lot of time and money,” Dr van Leeuwen said. The technology makes survey work faster and, therefore, cheaper. Today Falcon is installed and flying in BHP Billiton aircraft in the hunt for diamonds in Canada, iron ore in South America and silver, copper and gold in outback Australia.
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