Discovery 023 2002-08

DISCOVERY V I C T O R I A’ S

EA RTH

R E S OU RC E S

J OU R NA L

A U G U ST

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contents EXTRA PUFF FOR WIND POWER

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Victoria’s wind generated electricity industry is growing strongly

VICTORIA TACKLES GREENHOUSE GAS EMISSIONS

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We’re aiming for a seven per cent cut

$8B IN BROWN COAL PROPOSALS

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Three companies announce exciting projects for the Latrobe Valley

S TAWELL GOLD GOES IT ALONE

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MPI buys out its US partner in Victoria’s biggest gold mine

GSV AIDS STAWELL REGION EXPLORAT I O N

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Explorers get new help from this initiative

NEW ZONE LIFTS RESOURCE HOPES

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Exploration uncovers signs of more gold at Costerfield

BASIN SET TO BOOM IN 2005

cover picture

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Our minsands will play a major role in the world market

SAND SHIFTS IN MURRAY BASIN

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Wind generated electricity is emerging as a potentially important new industry in Victoria. For an overview of the main players and what they propose, see our story on page 2. Our cover shows the state’s first working wind farm at Codrington, near Port Fairy, which is operated by Pacific Hydro.

Mergers are changing the corporate face of the minsands industry

GOVT PUSHES STATE’S HUB CASE

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Victoria is emerging as the logical centre of the minsands industry

S TAWELL SEARCHES FOR A GROWING SOLUTION

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New research into the disposal of mine tailings

WATCH THOSE HERITAGE SITES

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New rules will protect heritage sites

ALCOA RELEASES INTERIM RESULTS OF NATIONAL HEALTH STUDY

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Alcoa reveals details of its major study on worker health

SPEEDY ASSESSMENT FOR NEW FIELDS

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Gas from Thylacine and Geographe could be flowing by 2006

NEW BAS GAS SET TO FLOW

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OMV makes its mark as a Gippsland Basin producer

WESTERN VIC IS WORTH ANOTHER LOOK

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A new geological model provides help for mineral exploration 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.

Minister Candy Broad reviews Victoria’s brown coal proposals

NEWS BRIEFS

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A roundup of industry news

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

LICENCE UPDAT E

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Who’s doing what with exploration and mining 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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Extra puff for A

cold and blustery winter has provided a warm, inner glow for the developers of Victoria’s two newest power generation facilities.

However, their satisfaction is not based solely on higher electricity sales as people turn up their heating systems to beat the cold. Instead, the windy conditions have helped justify the decisions of Pacific Hydro and Stanwell Corporation to build two of Australia’s largest wind-powered electricity generation facilities along Victoria’s south coast. And our winter winds are also the driver for the decisions behind at least six other wind power proposals currently under consideration and which could give Victoria the lead as Australia’s wind generator state. Leading the local charge into a wind-powered future are Pacific Hydro Ltd and the Queensland Government-owned Stanwell Corporation. Stanwell’s 21 megawatt Toora wind farm, near the coast just east of Victoria's famous Wilson's Promontory National Park, will begin producing electricity by the end of August. The Toora wind farm, built at a cost of $38 million, comprises 12 turbines, each standing an impressive 67 metres tall and sporting three blades, each 33 metres long. Located 180 km south east of Melbourne, the ‘farm’ stands on Silcocks Hill, above the township of Toora, offering prime exposure to Victoria's prevailing south-westerly winds and is close to electrical transmission networks supplying densely populated areas. A gentle breeze of just 12 kilometres an hour is required to turn the rotors of a wind turbine, with the optimum speed of 19 revolutions per minute achieved when the wind rises to around 25 km/h. The Toora project is expected to have a positive impact on the local economy through tourism, job creation and the use of local goods and services. At the other end of the state, Pacific Hydro is getting close to construction of the first stage of something far more ambitious, the integrated development of four wind farms near Portland and Yambuk. The project involves 120 turbines spread across four sites on some of Victoria's windiest coastline. The project will cost $250 million and generate up to 180 megawatts of wind-powered electricity.

SUSTAINABLE ENERGY

wind power The company is understood also to be considering a 75-megawatt wind farm near Ararat in western Victoria. But for sheer scale, it is the Portland project that has grabbed the attention of the renewable energy movement. The generation capacity of the project is equivalent to the annual needs of over 113,000 Victorian households. This is likely to reduce Victoria’s Greenhouse gas emissions by up to 900,000 tonnes of CO 2 each year by replacing electricity generated from coal-burning power stations. It will reduce the Greenhouse gas intensity of electricity generation in Victoria and Australia (currently one of the highest in the world), and reduce Greenhouse gas emissions equivalent to one per cent of Australia’s national Greenhouse gas reduction target. Pacific Hydro already operates a small wind far at Codrington, near Port Fairy, which generates 18 megawatts of electricity, easily enough power for the small tourist village just down the road. The $33 million farm hosts 14 turbines, each 50 metres tall with a rotor blade 62 metres in diameter, equivalent to the wingspan of a Boeing 747 jumbo jet. Codrington produces enough energy for more than 14,000 households and prevents 88,000 tonnes of Greenhouse gas emissions each year. When Victorian Premier, Steve Bracks, official-

Australia is also taking a lead in the global development of wind powered electricity. A large-scale wind farm is being built at Antarctica’s Mawson Base to provide nearly one megawatt of power to Australia’s Antarctic research station. The turbines will have to withstand winds of up to 300 km/h from the massive storms, which are generated in the region.

ly opened Codrington last year, he described it as “an important investment in Victoria’s growing renewable energy industry.” Victoria currently has one other small wind generator near the coast at Breamlea, just a short distance from the famous Bell’s surf beach. Australian made, it is now almost a tourist attraction but still generates 75 kilowatts at peak output. It was built in 1987, largely as an experiment, by the former State Electricity Commission of Victoria and the Victorian Solar Energy Council (since renamed Energy Victoria) at a cost of $A200,000. It is now owned and maintained by the Alternative Energy Association of Australia. Although small, it can make a substantial contribution to Greenhouse savings, generating 100,000 kilowatt-hours of electricity and sav-

ing 20,000 tonnes of CO2 emissions over its anticipated 15 years of remaining lif e. Despite some visual reservations in some areas, strong community support for wind power across Victoria has ensured the technology is emerging as a significant part of the state’s power generation landscape, particularly as the demand for more environmentally friendly power increases. But, despite the rapid development of wind power, the creation of renewable electricity generation capacity is still failing to keep up with demand. Australian electricity demand is forecast to rise by over 20 per cent in the next decade. According to David Young, the Chief Executive of the Victorian Sustainable Energy Authority, the Federal Government’s renewable energy target is just 0.5 per cent of the national electricity supply, although some industry groups are calling for that to be increased up to as much as 20 per cent. “We are increasing our energy use in Australia faster than we are investing in renewable generation resources,” Mr Young told Discovery. He added that the Commonwealth Government was expected to review its renewable energy target next year in response to the recent, rapid development of renewable generation, such as wind power and coal seam methane resources. Mr Young sees the development of Victoria’s

W I N D P O W E R I N V I C T OR I A Existing (operating) projects: 1. CODRINGTON Owner: Pacific Hydro Location: Portland, Western Victoria Generating capacity: 18 mW Number of turbines: 14 2. TOORA Owner: Stanwell Corp Location: Toora, East of Wilson’s Promontory Generating capacity: 22 mW Number of turbines: 12 3. BREAMLEA Owner: Alternative Energy Association Location: Breamlea near Barwon Heads Generating capacity: 0.75mW Number of turbines: 1

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Projects under consideration: 4. PORTLAND WIND ENERGY PROJECT Owner: Pacific Hydro Location: Four sites surrounding Portland Generating capacity: 180 mW Number of turbines: 120 Status: Awaiting decision by Victorian Minister for Planning 5. CHALLICUM HILLS Owner: Pacific Hydro Location: Ararat Generating capacity: 50 mW Number of turbines: 38 Status: Approved 6. WONTHAGGI Company: Wind Power Location: Wonthaggi Generating capacity: 10 mW Number of turbines: 6 Status: Environmental effects study underway

7. BALD HILL Company: Wind Power Location: Tarwin Lower, west of Wilson’s Promontory. Generating capacity: 35 mW Number of turbines: 60 Status: Environmental effects study underway. 8. NIRRANDA Company: Stanwell Location: Buttress Point, midway between Peterborough and Warrnambool Generating capacity: 50 mW Number of turbines: 38 Status: Environmental effects study underway. 9. SWAN BAY Company: Wind Power Location: Near Point Lonsdale Generating capacity: 5 mW Number of turbines: 3 Status: Planning stage

SUSTAINABLE ENERGY

wind-power electricity industry as a key objective. Victoria was becoming a world leader in sustainable energy, he said. “The Victorian Government’s establishment of the authority recognises the importance of sustainability, both in Australia and on an international level,” he added. “Sustainability is about Australia’s future. Reducing future energy costs for business and the community will protect the environment and help make Australia more internationally competitive.” The scale of the Portland proposal and the other projects mooted for Victoria (see list on previous page), will also give a major boost to the wind generator manufacturing and assembly industry, which is now emerging in Portland. Locally, it is expected to inject an estimated $95 million into the regional economy and $287 million to Australia overall from expenditure on construction, operations and maintenance. Based on experience at other, smaller wind farms, the project will increase tourism to the Portland r egion and aid its development as a leading renewable energy region.

Recent studies suggest it has the potential to create up to 750 new jobs in the area, becoming a major potential employer and also provide a further 1,350 new jobs in regional Victoria. A local manufacturing industry on that scale would avoid $900 million worth of imports of wind generator components over the next five years and create the opportunity for development of an export market initially worth $110 million per year.

F O R M O R E I N F O R M A T I O N C O N T A C T:

David Yo ung, chief execu tive Sustainable Ene rgy Aut hority of Victori a Te l: (03) 9655 3210 em ail: david.young@seav. v i c . g o v.au or visi t: Stanwell Corporation www. s t a n w e l l . c o m Pacif ic Hydr o www. p a c i f i c h y d r o . c o m . a u

VICTORIA TACKLES GREENHOUSE GAS EMISSIONS he Victorian Government has un veiled a $A100 million package of measures to cut Greenhouse gas emissions and improve energy efficiency in homes, businesses and government operations.

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Victoria is aiming to cut the state’s Greenhouse gas emissions by seven per cent or between five and eight million tonnes by 2010, the equivalent of removing around three-quarters of the cars from Victoria’s roads. “My government believes the Kyoto Protocol provides a sound basis for co-operative international action, but we can’t wait until the Protocol comes into force,” the Premier, Steve Bracks, said “It is critical that we act now. That is why we’ve developed the Victorian Greenhouse Strategy.” The strategy contains 59 actions dealing with a range of issues including the reduction of Greenhouse gas emissions from activities such as energy production and use, transport, waste management and agriculture. Its actions also address the enhancement of Greenhouse sinks; research into climate change impacts and adaptation; and awareness-raising in the community of climate change issues, including the steps that individuals can take to reduce Greenhouse gas emissions.

significant strengthening of action by the B ra cks Government and provides the Victorian community with a clear and unequivocal message that climate change is a real problem and requires attention now and into the future. “While government leadership and expenditure are essential for taking us forward, there is a need for all Victorians to reduce Greenhouse gas emissions in their daily activities. “We can all play a part by using energy more wisely; by reducing waste; by purchasing Green Power; by walking, cycling or taking public transport whenever possible rather than using the car; and by planting trees”, Ms Broad said. Some of the main initiatives of the strategy

include additional funding of $30 million for the Sustainable Energy Authority to support its energy efficiency and renewable energy programs and $15 million for solar water heater rebates. There will also be a Renewable Energy Support Fund to develop up to $40 million in new projects, $750,000 for the promotion of Green Power to electricity customers, and $1.3 million to assist Victorian businesses in trialing leading-edge, Greenhouse-abatement technologies. Ms Broad said: “We need to recognise that we can’t keep doing things the way we’ve always done them. It is important that we increase the level of renewable energy produced in Victoria, that we develop new technologies, and that we greatly improve the energy efficiency of the buildings in which we live and work. “Such changes present challenges. They also provide opportunities. “The government will continue its commitment to working in partnership with industry and the Victorian community to ensure that these opportunities are exploited for the betterment of Victoria and all Victorians.” The Victorian Greenhouse Strategy is available by calling the NRE Customer Service Centre on 136 186 or on the web at www.greenhouse.vic.gov.au

The Minister for Energy and Resources, Candy Broad said: “The strategy represents a 4

BROWN COAL

$8b in brown coal proposals T

hree new energy projects worth up to $8 billion could be developed in the L at robe Valley utilizing Victoria’s massive brown coal resources.

The projects are proposed by the three companies that have won access to new areas of the Latrobe Valley’s huge unused coal reserves as part of the State Government’s drive to fully utilize the region’s energy resources. Loy Yang Power, HRL Ltd and Australian Power and Energy Ltd (APEL), each won exploration leases over substantial parts of the remaining brown coal reserves in the Valley. However, before mining can proceed, they will have to prove that their development proposals offer significant reductions in Greenhouse gas emissions over existing brown coal power projects. If all three projects went ahead, up to 4,000 construction jobs and 1,000 permanent jobs would be generated in the region. However, competition in the energy market may prevent all of the projects from proceeding. Victoria’s Minister for Energy and Resources, Candy Broad, said tough conditions placed on the companies would ensure that Greenhouse emission rates from brown coal would be at least one third better than current Victorian best practice.

...TOUGH CONDITIONS PLACED ON THE COMPANIES WOULD ENSURE THAT GREENHOUSE EMISSION RATES FROM BROWN COAL WOULD BE AT LEAST ONE THIRD BETTER THAN CURRENT VICTORIAN BEST PRACTICE.

APEL plans an Australian Stock Exchange float to raise around $50 million initially to generate funds to proceed with its feasibility studies. Additional funds will be required later as the project develops. The company’s proposal involves mining brown coal and drying it to increase its calorific value from seven megajoules per kilogram to 26 MJ/kg. The coal is then converted into synthetic gas under high temperature and pressure with an infusion of oxygen.

“The Bracks Government is demonstrating a vision for the future by opening up a massive new investment and job opportunity in the Latrobe Valley, while at the same time requiring the development of innovative environmental technologies,” Ms Broad said.

The syngas is cleaned to remove sulphur and converted to hydrocarbon liquids, which are then processed into high-grade diesel fuels and specialty products.

“For projects to proceed to mining stage, they will need to demonstrate specified Greenhouse emission rates that are at least 33 per cent better than current Victorian best practice and 24 per cent better than international best practice.”

In stage one of the project, 52,000 barrels of high-quality, low-sulphur fuels, mainly diesel, will be produced daily, as well as electricity.

The biggest of the three projects is APEL’s $6 billion proposal to use brown coal to produce low-sulphur fuels, mainly diesel, and electricity.

(Left) Victoria’s brown coal seams form a massive energy resource. (Above) Only a small part of the Valley’s brown coal has been used for power generation, with more than 100 years of reserves still available.

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Waste heat is captured during the process to produce steam to be used for electricity generation.

APEL plans to use a process called geosequestration to cut Greenhouse gas emissions. This involves capturing carbon dioxide released through the process and pumping it underground into the vast reservoirs of the Gippsland Basin, where it would be gradually absorbed into the sandstone. The geosequestration process is similar to the technique used by petroleum companies to reinject unwanted gases back into oil and gas fields for storage or to assist with oil production.

BROWN COAL

(Left) In a bid to reduce brown coal mining costs and environmental impacts, new technologies, such as clean-burning furnaces and satellite-based navigation systems for heavy mining equipment, now dictate operations at the Latrobe Valley coalmines. (Right) HRL Ltd already operates a pilot-scale brown coal gasification plant at Morwell a precursor to its plans for a major facility in the Latrobe Valley.

tricity,” Mr Nethercote said. “While the Latrobe Valley power industry continues to investigate new technologies, commercialisation will require significant funding and time to achieve.” HRL Developments Pty Ltd proposes to use integrated drying and gasification combinedcycle technology in its proposed 500megawatt power station, which it plans to have operating by 2008.

“THE ANNOUNCEMENTS REFLECT THE GOVERNMENT’S DESIRE TO MAKE CONTINUED USE OF ONE OF VICTORIA’S MOST VALUED NATURAL RESOURCES WHILE ENSURING THAT THE STANDARDS AND CRITERIA UNDER WHICH NEW PLANT WILL OPERATE ARE AT THE LEADING EDGE.” Loy Yang Power, which currently generates over 30 per cent of Victoria’s electricity requirements, has been given an exploration licence over new brown coal reserves in the Flynn/Gormandale coal field, adjacent to the company’s existing open cut brown coal mine, east of Traralgon.

projects is essential if the future power needs of Victoria and the National Electricity Market are to be met.

As a first step HRL plans to drill the coal seams in the Driffield lease area of the Latrobe Valley to determine the coal’s suitability for the gasification process.

“Utilisation of this cheap fuel resource is essential if Australian Industry is to compete on both the national and international stage.”

It then plans to build a 100-megawatt demonstration scale plant as an intermediate step to the construction of a full-scale power station.

Mr Nethercote said the allocation of coal reserves would enable Loy Yang Power to investigate the viability of proposed new technology developments with increased certainty. However he said that any future developments on the Loy Yang Power site would need to meet stringent State Government Greenhouse targets.

HRL Developments chief executive, Gordon Carter, said: “This is an exciting prospect as the exploration licence offered will enable HRL to progress to the next stage in the application of Integrated Drying Gasification Combined Cycle (IDGCC) technology to Latrobe Valley coal.”

“It is clear that the State Government’s vision is to achieve significant reductions in Greenhouse emissions which will require major technological advances in the future use of brown coal for the production of elec-

“The IDGCC technology developed by HRL over a decade has been shown to reduce Greenhouse emissions of CO2 in excess of 30 per cent compared to conventional pulverised fuel technology currently installed in Latrobe Valley power stations,” he added. “We believe that the selected coal deposit is

The company plans to build a new 1000megawatt power station using less Greenhouse intensive technology currently under development. It also is planning to re-power its existing plant at Loy Yang using modern furnace technology to reduce Greenhouse emissions. Loy Yang Power chief executive, Ian Nethercote, said the tender announcements provided some certainty to the State Government’s intentions for future utilisation of Latrobe Valley brown coal. “The announcements reflect the Government’s desire to make continued use of one of Victoria’s most valued natural resources while ensuring that the standards and criteria under which new plant will operate are at the leading edge.” He added. “While the exploration licence detail is less than clear at this stage, the allocation of future coal reserves for potential power generation 6

BROWN COAL

TH E T E N D E R P R O C E S S Brown coal deposits in four areas covering 764 square kilometres in the Driffield/Narracan and Flynn/ Gormandale fields were offered under the tender process. Ten companies/consortia tendered. A tender evaluation panel evaluated the tenders while an independent probity auditor reviewed documentation and oversaw the integrity of the tender process. Components of each of the compliant tenders were subjected to external verification or independent assessment by experts in particular fields. The successful tenderers displayed the best use of resources within the tender area and offered significant strategic advantage to Victoria in terms of the potential economic, social and environmental outcomes. The three winning companies have been granted an exploration licence which: • enables them to undertake research, development and feasibility studies for one or more new brown coal-based projects; • gives them exclusive security of tenure to any identified resource for the term of the licence; and • provides exclusive rights to subsequently apply for mining licences under which mining and related developments can be undertaken.

suitable for boiler technology as the area has had some drilling in the past. But its status as a feed for a gasification plant needs to be proven.”

THE EXPLORATORY PROCESS

“An exploration licence will enable us to confirm the quality and quantity of the coal and its suitability for our gasification technology.”

GREENHOUSE STRATEGY BY

“Once it has been established as a good match and all other requirements met, the next stage will be to apply for a mining lease. “ Ms Broad said the proposals put forward by the three companies met the reduced Greenhouse emission targets specified by the State Government. The exploratory process supported the Victorian Greenhouse Strategy by encouraging the companies to implement new technologies which dramatically reduce Greenhouse emissions compared to existing brown coal electricity generation projects. “Fossil fuels are still part of the nation’s energy infrastructure and it will be some time before renewable forms of energy can take a substantial share of the energy load,”

SUPPORTS THE VICTORIAN ENCOURAGING THE COMPANIES TO IMPLEMENT NEW TECHNOLOGIES WHICH DRAMATICALLY REDUCE GREENHOUSE EMISSIONS COMPARED TO EXISTING BROWN COAL ELECTRICITY GENERATION PROJECTS. she added. Ms Broad said the brown coal exploration tender was one of the key recommendations of the Latrobe Valley Ministerial Taskforce, which was established to identify a range of measures for improving social and economic conditions in the region. 7

The tenders were for exploration only and any future mining proposals would require detailed environmental assessment and regulatory approval. Future development proposals in relation to new energy generation would also be subjected to stringent environmental assessment. The Latrobe Valley holds some of the thickest and closest to the surface brown coal seams in the world. The coal is up to 330 metres thick and is made up of four main seams separated by thin layers of sand and clay. Total resources are estimated to be 160,000 million tonnes, of which an estimated 35,000 million tonnes is economically available. Latrobe Valley brown coal is currently used to produce 90 per cent of Victoria’s electricity needs using conventional pulverised fuel combustion technology. F O R M O R E I N F O R M A T I O N C O N T A C T:

DNRE Customer Service C entre 13 6 1 86 Or visit the NRE website: www. n r e . v i c . g o v. a u

GOLD DEVELOPMENT

Stawell gold goes it alone he privately owned Mining Project Investors group, operator of the Stawell gold mine in north western Victoria, has bought out its long-term joint venture partner, Pittston Minerals Inc of the USA.

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The deal gives MPI 100 per cent ownership of Victoria’s largest gold mine. As a part of the deal, MPI has also acquired Pittston’s interest in a gold mine in Coolgardie and other gold exploration assets in Western Australia and Victoria. The Stawell mine was acquired by MPI and Pittston in a 50:50 joint venture deal in 1992. That deal has now expired and Pittston has effectively withdrawn from Australia. The Stawell mine, in the past decade, has been extensively upgraded into a modern, underground operation producing over 100,000 ounces of gold a year. At December 31 last year, the Stawell mine had a gold inventory of 1.328 million ounces down to a planned mining depth of 1,050 metres. But MPI is considering a proposal to deepen the mine to at least 1,250 metres to gain access to the newly discovered Golden Gift orebody, which lies below the main orebody.

(Above) Drilling at Wildwood has unveiled a potential new gold mine that could rival the successful Stawell operation.

The Stawell mine and the region, particularly the area northwest of the mine, contain strong potential for new gold discoveries.

(Left) MPI exploration manager, Jon Dugdale, (right) plans the company’s successful exploration drilling campaign.

MPI has already reported significant success in gold exploration under shallow cover in areas around the mine. In a second deal, MPI has also acquired the Western Australian nickel mining and exploration assets of the Finland-based company, Outokumpu Oy. MPI acquired the Honeymoon Well and Black Swan nickel mines for an undisclosed sum. Outokumpu has decided to exit the base-metal mining business worldwide to concentrate on its metals production, fabrication and technology. In Coolgardie, MPI is developing a new gold mine with first production, at a rate of 50,000 ounces a year, expected later this year. The Coolgardie operation has a mineral inventory of 827,000 ounces, the majority of whic h is owned by Herald Resources, although MPI has an option to acquire 50 per cent of the gold inventory owned by Herald. The moves by MPI are expected to lead to a public float of the company and its subsequent listing on the Australian Stock Exchange.

The total cost of production came to $A484 an ounce while MPI delivered gold into its forward sales program at an average price of $A528 an ounce.

THE STAWELL MINE AND THE REGION, PARTICULARLY THE AREA NORTHWEST OF THE MINE, CONTAIN STRONG POTENTIAL FOR NEW GOLD DISCOVERIES. In the first three months of 2002, the Stawell mine performed strongly with 212,000 tonnes of ore processed to produce 26,494 ounces of gold at an average grade of 4.61 grams per tonne. The average grade of the ore hoisted from the Stawell mine was 5.02 grams a tonne although blending with stockpiled lower grade ore reduced the average mill-head grade. 8

Meanwhile, MPI has continued to define the Golden Gift orebody with a substantial diamond-drilling program. By the end of the March quarter, it had defined an inferred ore resource totaling 1.2 million tonnes at an average grade of 7.1 grams per tonne, giving a gold inventory of 275,000 ounces. More diamond drilling on the Golden Gift orebody, to further increase the gold inventory and improve the resource definition, continued in the June quarter with MPI expected to increase the gold inventory in the second half of the year. In addition to the success in the Golden Gift area, MPI is testing possible new high-grade ore targets in the hanging wall region of the

GOLD DEVELOPMENT

New understanding of the potential for gold lying under the shallow cover of the Murray Basin sediments has led to a major exploration push by MPI in the region north and west of the Stawell gold mine.

Gold values over 0.5 g Au/t were demonstrated over the entire strike length, indicating the entire system is mineralised.

Stawell Fault, which produces the majority of the mine’s gold ore. MPI’s regional exploration has continued to test prospects within a 140km long corridor northwest of Stawell.

Follow-up aircore drilling is being conducted to more accurately delineate the Wildwood prospect and further define the Kewell and Wallup prospects further north.

This program is designed to further define at least ten basalt dome targets, three of which appear to be lookalike structures to the main Magdala orebody at Stawell. These were identified by MPI, initially from airborne magnetic surveys conducted under the State government’s Victorian Initiative on Minerals and Petroleum and later confirmed by more detailed airborne magnetic surveys flown by MPI. Three primary targets have been located and targeted for more detailed drilling. The first is Wildwood, located 20 km north west of Stawell, with the Kewell and Wallup prospects, located 100 km north-west of Stawell and lying under at least 100 metres of cover material. In the March quarter, 28 aircore holes total-

MPI is a major sponsor of a co-operative research centre study with Melbourne University and the CSIRO that aims to build a three-dimensional model of the regional geology at different scales for computer-based, fluid-flow modeling to predict likely sites of ore deposition in the Stawell region. ing 1,625 metres were completed, intersecting two one-kilometre long zones of volc a n ogenics on the east flank of the Wildwood basalt. The newly discovered zone occurs on a paleohigh that reaches within 10 metres of the present surface. The zone is 1000 metres long and was identified on four separate traverses of the area using vertical aircore drilling.

Much of the work on the under-cover targets at Wildwood, Kewell and Wallup also forms a key part of research by the Co-operative Research Centre for predictive mineral discovery. F O R M O R E I N F O R M A T I O N C O N T A C T:

Jon Dugdale, MPI Tel: (03) 535 8 102 2

GSV AIDS STAWELL REGION EXPLORAT I O N o further help target exploration work in the Stawell area, the Geological Survey of Victoria is producing a 1:100,000 regolith–landform map and report over the Ararat map area.

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Highly weathered saprolite near Ararat. These rocks represent a preserved portion of the Palaeocene weathering profile. Their recognition has important implications for geochemical data interpretation, as they have probably been contaminated by secondary (or hydromorphic) gold-bearing fluids sourced from overlying White Hills gravel.

This follows his earlier interpretations of the Horsham and Ouyen 1:250,000 maps and aims to ‘lift the cover’ over the area.

The study aims to define the major regolith materials, characterise their geochemistry and place them in a landscape context.

These interpretations rely heavily upon the geological and geophysical skills of the interpreter and discussions with geologists who are comfortable with geophysical data, to construct a plausible geological and structural framework.

This will provide explorers with a powerful tool to integrate into sampling strategies and aid in the interpretation of geochemical data.

The interpretation by Mr Moore will be put into a geological context by mapping units from outcrop into areas of cover.

It will include a comparative assessment of the regolith development and chemistry of prospective bedrock units under shallow Murray Basin cover sediments to the north.

This will be aided by discussions with MPI geologists and, where possible, use their recent drilling results to provide ground truthing.

It also aims to apply present understandings of exposed surface geology, gold mineralisation and landscape evolution processes to similar geological settings beneath cover. In addition to the regolith study, GSV senior geophysicist David Moore has started work on the geological interpretation of the geophysical features of the St Arnaud 1: 250,000 mapsheet. 9

David Moore’s work will also tie his work into the r egolith project over the Ararat 1:100,000 map area. The existing high-resolution geophysical data, with appropriate interpretations, have attracted explorers to the Murray Basin in Victoria. Both of these projects are aimed at generating increased exploration activity in the southern margin of the Murray Basin.

EXPLORATION NEWS

New zone lifts resource hopes GD Mining Ltd has sharply increased the resource potential of the Costerfield goldfield, two kilometres from Costerfield in Central Victoria, after confirming that its MH zone is an economic proposition.

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Exploration work on the MH Zone and increased familiarity with the geological structures controlling the mineralisation, has convinced AGD “that the structural setting exists for an order of magnitude increase in resources.” AGD’s executive director, Ian Price, says that a report from the company’s geological advisers “has identified potential for repetitions of reserves of the MH Zone gold and antimony mineralisation.” Proved and probable ore reserves at the MH zone have been calculated at 290,000 tonnes, grading 12 grams per tonne gold and 6.4 per cent antimony over a strike length of 400 metres and to a maximum depth of 180 metres. The deposit remains open to the north, south and at depth. The reserves figure for the MH Zone exceeds historically recorded production from the field which amounted to 177,000 tonnes of ore for the recovery of 85,000 ounces of gold and 21,600 tonnes of antimony, before the mines finally closed in the 1930’s. Although the main historical workings at Costerfield and the MH Zone are 2km apart, both occur in a structural corridor about 400m wide and extending for several kilometres north and south of the two sites. A central area within this corridor is 250m wide at Costerfield and about 120 m wide near the MH Zone. it is overlayed by shallow allu vials and has only been sporadically explored. Geochemical surveys have outlined strong anomalies on the western and eastern margins of the central area on what appear to be old lease boundaries or freehold land that limited early exploration of the central area. A major geochemical anomaly west of the Costerfield workings returned grades several times higher than surveys, which prompted AGD to undertake its successful drilling program on the MH Zone. There are two other extensive anomalies at the Prince of Wales and a strong, elongated anomaly running northward from the old South Costerfield workings east of the Alison shafts.

AGD’s immediate plans are to run geochemical surveys over the central area, testing for eastward extensions of the west Costerfield and Alison anomalies, western extensions of the Prince of Wales anomaly and filling in the blanks between Costerfield and the MH Zone.

known, but largely untested, mineralisation at other prospects which could generate gold resources of one million-plus ounces at relatively shallow depth in the Costerfield region.

Consulting geologist Graeme Weber says there is significant potential in the extension of the MH Zone.

F O R M O R E I N F O R M A T I O N C O N T A C T:

The company is now planning a full investigation of known anomalies and the numerous 10

Ian Price, managing director AGD Mining Ltd Te l: (03) 96 39 1533

VIEWPOINT

Leap forward for Latrobe Valley ictoria has taken an enormous step forward with the new multi-billion dollar coal exploration licences awarded by the Bracks Government to three Australian-based companies.

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Throughout the brown coal tender process, which started in October last year, the Bracks Government had been determined to make sure the winning bidders proposed innovative technologies that would produce substantial cuts to Greenhouse emissions. We have achieved that with this historic announcement, which aims at pr oviding longterm security of electricity well into the new millennium. Any new mining of the estimated 500 years of brown coal reserves in the Latrobe Valley will now have to achieve Greenhouse emission reductions of between 33 per cent and 79 percent of current Victorian best practice. That is great news for the environment and the brown coal industry, and has the potential to set up the Latrobe Valley as a world leader in brown coal technology. It also delivers on the Bracks Government’s philosophy which ensures all decision making takes into account environmental, economic and social aspirations – and binds sustainability into everything we do. This decision means potentially $8 billion in new investment in new power stations and a lowsulphur diesel plant, 4000 new construction jobs, and 1000 continuing jobs for the Valley, if all projects proceed to full development. The prospective plants will compete with other energy sources and, therefore, not all proposals may proceed. The licences are the first awarded to mine coal in Victoria since 1920. About 85 per cent of our State’s power generation is from Gippsland coal. The successful companies are HRL Developments Pty Ltd, Australian Power and Energy Ltd and Loy Yang Power Pty Ltd. The tough conditions placed on the companies will ensure that Greenhouse emission rates from brown coal discovered at the sites will be at least 33 per cent better than current Victorian best practice and 24 per cent better than international best practice. Proposals put forward by the successful companies to meet these targets include new stateof-the-art power plants and production facilities for low-sulphur fuels.

This exploratory process supports the Bracks Government’s recently released Victorian Greenhouse Strategy by encouraging the companies to implement new technologies, which dramatically reduce greenhouse emissions compared to the existing brown coal generators. The Bracks Government used the coal tender to encourage industry to adopt new, clean technologies to ensure brown coal remains a viable energy source for Victoria in the future. Fossil fuels are still part of the nation’s energy infrastructure and it will be some time before renewable forms of energy can take a substantial share of the energy load. Calling for exploration tenders was one of the key recommendations of the Latrobe Valley Ministerial Taskforce, which was established by the Premier to identify a range of measures for improving social and economic conditions in the region. The tenders are for exploration only and any future mining proposals will require detailed environmental assessment and regulatory approval. Future development proposals in relation to new energy generation will also be subjected to stringent environmental assessment. A full, comprehensive, environmental impact assessment, which would consider all issues including environmental, native title and rehabilitation issues, would have to be undertaken. The exploration licences have been offered for the Driffield/Narracan and the Flynn/ Gormandale coalfield areas. The estimated coal reserves in the three fields are about four billion tonnes, worth potentially $10 billion. An extra 1500 MW of electricity will be added to Victoria’s future base load requirements. One of the licencees intends to remove the carbon monoxide from its coal using conversion technology, to produce about 50,000 bar rels a day of ultra-low-sulphur diesel fuel. This one project will be enough to replace Australia’ entire diesel fuel imports and, at the same time, provides a new low-cost electricity source of about 1000 MW.

Components of the tenders were subjected to rigorous external verification or independent assessment by experts in particular fields. The Tender Evaluation Panel then forwarded its recommendations to me as Minister for Energy and Resources. On 17 July, I announced the three successful tenders. I believe these three displayed the best use of resources within the tender area and afforded significant strategic advantage to Victoria in terms of the potential economic, social and environmental outcomes. All three responded admirably to the requirement by the State Government “to develop, in partnership with industry, a strategic analysis of technology options and development path ways for realising the value of Victoria’s vast brown coal resources while meeting the cur rent and future Greenhouse challenge”. The result is one that I believe will substantially benefit all Victorians, both now, and for future generations and one of which the Bracks Government is extremely proud.

A Tender Evaluation Panel was formed to evaluate the tenders against the approved evaluation plan. An independent probity auditor was contracted to oversee the integrity of the tender process. 11

Candy Broad Minister for Energy and Resources

REGULAR FEATURE

News Briefs RIO TINTO RETURNS

fine-grain size of the deposits made them uneconomic to develop at the time.

Rio Tinto Ltd, the world’s biggest integrated resources company, has returned to Victoria to look for new mineral sands deposits.

Other companies are now developing new technology to bring these WIM-style deposits into production.

The company, which has a corporate headquarters in Melbourne but quit its last mineral exploration efforts in the state several years ago, has applied for five new exploration licences (ELS) in the Gippsland region.

WORK TO START ON SEA GAS PIPELINE

The ELS cover an area of 983 square kilometres in the Bairnsdale area and follow the northern margin of the Gippsland Basin. The area was selected following a review of geological & geophysical data collected by the Department of Natural Resources and Environment. Rio Tinto’s prime target is heavy mineral accumulations in ancient coastline systems along the Basin’s margins.

Construction of the $300 million SEA Gas underground pipeline from Victoria to South Australia is scheduled to start in October following completion of the project’s financing arrangements. The joint owners, Origin Energy and International Power, say the SEA Gas project will stimulate more than $1 billion of new gas field developments in Victoria, while taking a new natural gas supply into South Australia as early as October next year.

Rio Tinto said exploration work would start when all the appropriate government approvals were granted and the appropriate community groups / traditional land holders properly consulted.

The pipeline will carry natural gas, initially, from two offshore Victorian gas fields – Minerva, located about 10 kilometres offshore from the south-west Victorian coast near Port Campbell, and Yolla, about 100 kilometres offshore from Western Port, further east along the Victorian coast.

Rio Tinto is considered the founder of Australia’s Murray Basin mineral sands industry. It discovered the vast WIM 150 and associated deposits in Victoria during the 1980’s, but relinquished the leases when the

The joint owners say the pipeline will also expedite the development of the Thylacine and Geographe gas fields through assured access to the South Australian and the Victorian gas markets.

The applications were made in late May 2002.

Up to 70 petaJoules of natural gas per annum will begin to flow to SA in October 2003, and the pipeline is expected to be in commercial operation by January 2004. The gas will be transported in a 680 kilometre, 360 millimetre diameter underground pipeline from Port Campbell to Adelaide. L at e ral pipelines are planned to service towns and industries along the route, significantly expanding regional deve l opm e nt opportunities along the Port Campbell to Adelaide corridor.

BASSLINK WINS SUPPORT The Joint Advisory Panel investigating the trans-Bass Strait ‘Basslink’ electricity connector has recommended the Tasmanian, Victorian and Commonwealth Governments approve the $500 million project with particular conditions. This follows two years of studies, written submissions and public hearings. The Panel’s final report was publicly released by the Tasmania Government early in July and is now being considered by the three governments. Basslink is a proposal to construct a 360 kilometre, 600 MW electricity cable connecting Tasmania to the national electricity market. Should it be approved, Basslink would provide an additional electricity supply to Tasmania and enable it to participate in the national electricity market. Basslink would also provide Victoria with an additional energy source during times of peak demand in the hot summer months.

FOSTERVILLE’S CONFIDENCE CONTINUES Drilling at Perseverance Corp’s Fosterville sulphides project in the June quarter has continued to increase confidence in the resource potential of the r egion. Reverse circulation drilling totaling 3,761 metres in 23 holes and 4,972 metres of diamond coring in 24 holes was completed for the quarter, the company has reported to the ASX.

Recent drilling at Fosterville has demonstrated that other substantial mineralised bodies may exist in the area.

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REGULAR FEATURE

News Briefs Drilling on the Phoenix shoot has extended the known length to 1,600 metres and it remains open down plunge. Significant intersections obtained at Phoenix included 6.34 g/t Au over 4.3 metres in a Middle Splay position and 7.78 g/t Au over 2.7 metres in the Phoenix Splay. The company said modeling of the Phoenix lode demonstrates the consistency of highgrade mineralisation in this major zone with true widths ranging up to 25 metres, although a typical thickness would approximate five metres. “The vertical dimension of this shoot requires better definition but in places exceeds 150 metres. This shoot shows no sign of weakening at depth,” Perseverance reported. Drilling on the Ellesmere shoot confirmed that the better grade mineralisation is less continuous than within the Phoenix and occurs in overlapping structures. But the company said it contained “significant zones of higher grade gold that are likely to be amenable to mining.” This shoot also remains open down plunge. Perseverance is now planning to restart an intensive drilling program in August focusing on resource definition drill out and is targeting completion of feasibility studies for the sulphide development in 2003.

WOMEN IN MINING The popular ‘Women in Mining’ breakfast will be held on Thursday, November 7. The theme is ‘facing the challenges’ and speakers will include Alison Kitchen, national chairman of KPMG Energy and Natural Resources, Christina Ringwood, manager Environmental Policy, Rio Tinto Ltd, and Victoria’s Minister for Energy and Resources, Candy Broad. Details and booking information are available at www.vicmins.com.au or by calling (03) 9629 1851 or 0411 262 470.

WEMEN IMPROVES PERFORMANCE

reaching 80 per cent of target, according to Sons of Gwalia June quarter report. The company said while ongoing issues are still to be resolved in relation to mining indurated ore zones and final tuning of the electrostatic circuit at the separation plant, “progress has been encouraging and the experience gained will be invaluable for future planning of the second stage of the Murray Basin Development Project.” The company reported that the original target mining rates could not be achieved because the Wemen ore was more indurated (overburden containing hard siliceous bands) than forecast in the feasibility studies. In an effort to overcome the problem, MBT has increased the power of the dredge cutting head, modified its operating practices and changed the mine design to a higher cut-off grade. “Although the higher cut-off grade will reduce the life of the Wemen Mine, recent exploration success has identified additional resources at the nearby high grade Ouyen Project that are capable of extending the life of the operation well beyond the initial six years originally intended for Wemen,” the company reported.

Production from Victoria’s first mineral sands mine at Wemen near Ouyen, reached 6,358 tonnes of rutile and 1,389 tonnes of zircon in the June quarter.

“A resource definition drilling program has been completed on the recently discovered Galileo, Mercury and Titan mineral sands deposits in the Ouyen project, 35 kilometres south-west of the Wemen mine.”

The project, owned by Murray Basin Titanium and Sons of Gwalia, has recorded a considerable improvement in overall performance,

The drilling defined the three strands over a strike length of 13 kilometres. Resource estimates, using a polygonal-sectional method, 13

Operational performance at the Wemen mineral sands project has provided a sound base for the development of new projects in the region.

have been made at 1% and 2.5% lower-grade cut-offs, yielding 3.9 and 3.4 million tonnes of heavy mineral respectively. An inferred resource estimate has also been made from drilling at the Cavalier Prospect, 45 kilometres southwest of the Birthday Gift deposit in New South Wales. Using a 1 per cent cut-off grade, Cavalier is believed to contain 26 million tonnes of sand at 3.3 per cent heavy mineral for 0.9 million tonnes of heavy mineral. Sons of Gwalia said, “Following incorporation of these estimates, the resource inventory for the project, excluding the reserve at the Wemen mine, currently stands at 20 million tonnes of heavy mineral. This compares favorably with the Douglas project’s 21 million tonnes.”

LPG GAS DECISION The Essential Services Commission’s final report on its inquiry into the supply of bottled gas (LPG) in Victoria has recommended against regulation by the government of either producer or distributor prices. The ESC’s said that any benefit from price regulation would be likely to be outweighed by the costs. You can get copies of the report by calling the ESC on 9651 0222 or on the web at www.esc.vic.gov.au

REGULAR FEATURE

Victoria’s

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REGULAR FEATURE

mineral, oil and gas resources

15

LICENCE REVIEW

Mineral Licences

April/June 2002

E X P L O R ATION LI CEN CE APPLICAT I O N S TITLE NO. EL4651 EL4652 EL4653 EL4654 EL4655 EL4656 EL4657 EL4658 EL4659 EL4660 EL4661 EL4662 EL4663 EL4664 EL4665 EL4666 EL4667 EL4668 EL4669 EL4670 EL4671 EL4672 EL4673

STATUS APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION

MAP SHEET YEA BENDIGO YEA ALEXANDRA ROBINVALE EUROA HEATHCOTE HEATHCOTE OMEO MATLOCK BENDIGO STRATFORD STRATFORD BAIRNSDALE BAIRNSDALE ORBOST KERANG DUNOLLY ST ARNAUD DUNOLLY DUNOLLY DONALD WEDDERBURN

PRIMARY OWNER DUNOLLY GOLD DEVELOPMENTS PTY LTD MOUNT ROMMEL MINING PTY LTD WILLIAM G A REDMOND KENNETH LESLIE HOPPER ILUKA RESOURCES LIMITED GOLDSTAR RESOURCES LIMITED SELECT RESOURCES PTY LTD SELECT RESOURCES PTY LTD MANSFIELD MINING NL CMS AUSTRALIA PTY LTD LACH DRUMMOND RESOURCES PTY LTD RIO TINTO EXPLORATION PTY LTD RIO TINTO EXPLORATION PTY LTD RIO TINTO EXPLORATION PTY LTD RIO TINTO EXPLORATION PTY LTD RIO TINTO EXPLORATION PTY LTD RELIANCE MINING LIMITED WEDDERBURN MINING PTY LTD GOLDSEARCH LIMITED STRATA MINING CORPORATION LIMITED STRATA MINING CORPORATION LIMITED RELIANCE MINING LIMITED RELIANCE MINING LIMITED

EVENT DATE 03/04/2002 09/04/2002 17/04/2002 17/04/2002 19/04/2002 07/05/2002 15/05/2002 16/05/2002 21/05/2002 27/05/2002 29/05/2002 30/05/2002 30/05/2002 30/05/2002 30/05/2002 30/05/2002 30/05/2002 31/05/2002 04/06/2002 05/06/2002 05/06/2002 25/06/2002 25/06/2002

AREA SIZE 66 GRATS 89 GRATS 71 GRATS 88 GRATS 79 GRATS 51 GRATS 129 GRATS 28 GRATS 3 GRATS 96 GRATS 6 GRATS 276 GRATS 241 GRATS 192 GRATS 182 GRATS 103 GRATS 1303 GRATS 5 GRATS 311 GRATS 2 GRATS 2 GRATS 2190 GRATS 204 GRATS

EVENT DATE 04/04/2002 29/04/2002 29/04/2002 29/04/2002 29/04/2002 13/05/2002 13/06/2002 13/06/2002 13/06/2002 13/06/2002 13/06/2002 27/06/2002

EXPIRY DATE 03/04/2007 29/04/2002 28/04/2004 28/04/2007 28/04/2007 13/05/2002 12/06/2007 12/06/2007 12/06/2007 12/06/2007 12/06/2007 27/06/2002

EVENT DATE 30/04/2002 13/06/2002

EXPIRY DATE 30/04/2002 13/06/2002

EVENT DATE 19/04/2002 24/04/2002 31/05/2002 31/05/2002 31/05/2002 05/06/2002

AREA SIZE 5195 HA 3.5HA 44.3HA 57.2HA 1.0HA 4.8HA

EVENT DATE 05/04/2002 05/04/2002 05/04/2002 29/04/2002 30/04/2002 30/04/2002 16/05/2002 16/05/2002 24/05/2002 13/06/2002 13/06/2002 13/06/2002 27/06/2002 27/06/2002

EXPIRY DATE 04/04/2007 04/04/2007 04/04/2007 28/04/2017 29/04/2004 29/04/2007 15/05/2003 15/05/2012 23/05/2022 12/06/2006 12/06/2006 12/06/2022 26/06/2007 26/06/2007

EVENT DATE 04/04/2002 07/05/2002 07/05/2002 27/06/2002 27/06/2002 27/06/2002

EXPIRY DATE 04/04/2002 07/05/2002 07/05/2002 27/06/2002 27/06/2002 27/06/2002

E X P L O R ATI ON LICENCES G RANT ED TITLE NO. EL4579 EL4648 EL4639 EL4636 EL4643 EL4640 EL4645 EL4644 EL4647 EL4606 EL4649 EL4650

STATUS CURRENT CANAM CURRENT CURRENT CURRENT CANAM CURRENT CURRENT CURRENT CURRENT CURRENT CANAM

EVENT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT

MAP HAMILTON LALBERT DUNOLLY DOOKIE DOOKIE NATIMUK MITIAMO MITIAMO GRAMPIANS ALEXANDRA DOOKIE NATIMUK

TITLE NO EL3425 EL3312

STATUS EXPIRED SURRENDERED

MAP SKIPTON MANSFIELD

TITLE NO. MIN5367 MIN5368 MIN5369 MIN5370 MIN5371 MIN5372

STATUS CURRENT APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION

MAP SHEET BALMORAL CASTLEMAINE WEDDERBURN DUNOLLY DUNOLLY BENDIGO

TITLE NO MIN5301 MIN5297 MIN5296 MIN5361 MIN5351 MIN5362 MIN5138 MIN5291 MIN5367 MIN5283 MIN5292 MIN5365 MIN5305 MIN5318

STATUS CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT

TITLE NO MIN4857 MIN4202 MIN4468 MIN5238 MIN4601 MIN4885

STATUS CANCELLATION SURRENDERED SURRENDERED SURRENDERED SURRENDERED SURRENDERED

PRIMARY OWNER GOLDEN SIGNATURE NL BASIN MINERALS HOLDINGS NL SORD TECHNOLOGIES LIMITED YARDARINO LIMITED KNIGHT INDUSTRIES PTY LTD BASIN MINERALS HOLDINGS NL MPI GOLD PTY LTD MPI GOLD PTY LTD MPI GOLD PTY LTD DUNCAN R MCLEAN SELECT RESOURCES PTY LTD BASIN MINERALS HOLDINGS NL

E X P L O R ATION L ICENCES SURRENDE RED, CANCELL ED OR EXP IRED PRIMARY OWNER KAOLIN AUSTRALIA PTY LTD PERSEVERANCE MINING PTY LTD

MINI NG LICE NCE AP PLICAT I O N S PRIMARY OWNER BASIN MINERALS HOLDINGS NL KENNETH W LAKEY DIAMOND HILL MINING PTY LTD DOUGLASS W CAHILL DOUGLASS W CAHILL ALLIANCE ENERGY LIMITED

MINI NG LIC ENCE S GRANTED EVENT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT

MAP TALLANGATTA TALLANGATTA TALLANGATTA DANYO DUNOLLY ROBINVALE BALLARAT KERANG BALMORAL CASTLEMAINE CASTLEMAINE SKIPTON BEAUFORT BEAUFORT

PRIMARY OWNER TIMORA PTY LTD TIMORA PTY LTD TIMORA PTY LTD BORAL AUSTRALIAN GYPSUM LIMITED IAN M PARKER TAMAS KAPITANY WRICO MINERALS PTY LTD NORTHERN PROPERTY DEVELOPERS PTY LTD BASIN MINERALS HOLDINGS NL DAVID E SEVERN ANTHONY R SEVERN KAOLIN AUSTRALIA PTY LTD KENNETH JOHN WALLMAN KENNETH JOHN WALLMAN

MI NING L ICE NCES SURR END ERED , CAN CELL ED OR EX PIRED MAP BUFFALO DUNOLLY DUNOLLY DUNOLLY CORRYONG DUNOLLY

PRIMARY OWNER EDWIN A SCHULZ STRATA MINING CORPORATION LIMITED STRATA MINING CORPORATION LIMITED TALAGER PTY LTD ILMAR TARMO RODERIC J HERON

ABBREVIATIONS: SURR - SURRENDERED, CANC - CANCELLATION CAN/AM - CANCELLED/AMALGAMATED

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MINERAL SANDS

Basin set to boom in 2005 T

he Murray Basin is set to win a significant place in the world market for mineral sands products beyond about 2005.

Murray Basin Titanium’s pilot plant at Wemen could be the forerunner to a host of major new projects in the region, spanning Victoria, NSW and South Australia.

That’s the verdict of delegates at a major mineral sands conference in Melbourne in late May, sponsored by the Australian Journal of Mining. Speakers proclaimed the Basin as one of the world’s significant emerging mineral sands provinces, which will eventually replace production from other areas in Australia and around the world. And, although its total inventory remains small compared with other known world class deposits overseas, the region will figure prominently in Australia’s future titanium and zircon feedstock production. The development of the Douglas, Mindarie and Gingko projects over the next few years could add to a global oversupply if added to major new projects also under consider ation. However, Peter Robinson, executive general manager of Ticor Ltd, told delegates that while potential new projects were plentiful, the world’s major consumers of pigment minerals were keen to diversify their sources of supply. The world market was driven by a small number of buyers and demand g rowth of around 2 per cent a year could easily be met by the development of one major new project. But the small, high-grade nature of the Murray Basin deposits meant they would fit into the rising world demand pictur e, he said. TZ Minerals International director, Victor Hugo, was even more bullish saying: “the Murray Basin is an emerging mineral sands province which will be significant to Australia’s future titanium and zircon feedstock production.” While the Basin’s resources were growing quickly, they were still small compared to world class deposits. However, he added: “Of equal importance to the growing size of the mineral inventory is the high ratio of zircon to titanium minerals. “This is seen as a major positive attribute… These resources are therefore an important potential source of zircon supply in the global market.” “Demand for zircon should remain tight for the next three years and the supply/demand balance faces a growing deficit from 2005 onwards without new production. “The Murray Basin deposits are well placed to

fill the potential deficit so zircon will be an important driver for these projects. “Given the size and mineral assemblage of the Murray Basin resources, this region therefore holds the key to Australia maintaining its historically dominant position in the mineral sands industry as production from Australia’s east and west coasts enter a mature phase.” TZ Minerals recently completed a major analysis of the zircon supply and demand scenario up to 2006. The study showed that China has overtaken Western Europe as the world’s most important consumer of zircon. Zircon consumption is consumed mainly in the ceramics industry, which takes 49 per cent of world production, and demand is growing at 3 per cent annually. Australia and South Africa dominate the zircon export trade, accounting for 80 per cent of production. Over the next few years TZ Minerals estimated that zircon consumption is expected to continue to grow at around 2.2 per cent a year but, while supply and demand are closely matched at present, the supply of high-quality zircon feedstock remains tight while global stockpiles are also at historic low levels. “Beyond 2003, it is unlikely that existing producers will be able to match the increased demand for zircon,” TZ Minerals concluded. “Progressively higher market deficits are therefore forecast beyond 2003 and there will be a need for additional zircon supply from new sources of production by 2004 or 2005,” Mr Hugo told delegates. “This means the outlook for maintaining real zircon prices is quite strong.” The picture in titanium markets is less rosy, according to Mr Hugo. “Unlike the zircon supply/demand balance, supply of titanium feedstocks has been higher than demand over the last two years. This oversupply … is 17

expected to continue beyond 2005, depending on how feedstock producers manage their stock positions,” he said. “The Murray Basin has the potential to ‘flood’ the relatively small rutile market if all the projects come on stream in the period 2004 to 2006.” But that is not expected to severely impact on the proposed new production from the Murray Basin, which would, at least partially, rely on zircon output to make the proposals economically viable. The content of rutile and ilmenite within the suite of Murray Basin minerals varies considerably and will have differing impacts on different projects as g rades vary. One of the Murray Basin’s likely major producers, the Douglas project, now controlled by Iluka Resources, remains confident of the project’s economics. Former Basin managing director, Dr Brad Farrell, told the conference that the mineral reserve base of the group had risen to 36 million tonnes of concentrate. Dr Farrell is confident that the Douglas project will be in production by the first quarter of 2004, with its economics boosted by its favorable location in the southern part of the Murray Basin, its high-grade mineral and low overburden ratios, assisted by its valuable product mix and favorable site on cleared farmland. The Douglas project has some clear advantages over some of the more remote projects. It is only 165 km by road from the port of Portland. The town of Hamilton, the favored site for a mineral separation plant, lies along the road to Portland and the area is already served by power, gas and communications infrastructure which makes the development of a mining project relatively easy. Stage One of the Douglas project is expected to cost $A138 million but is forecast to generate a strong internal rate of return of around 38 per cent and total mine revenue of more than $A1 billion. A mining licence for the project was granted in May and the panel report of the project’s Environmental Effects Statement is currently with the Minister for Planning for assessment.

MINERAL SANDS

Sand shifts in Murray Basin C

ontinued merger activity is changing the corporate face of Australia’s rapidly emerging Murray Basin mineral sands industry.

The activity reflects a growing awareness among exploration companies that rationalization can offer significant cost and marketing advantages in a growing, but tight, world market for mineral sands products. The latest rationalisation move is the acquisition of Basin Minerals by Iluka Resources in an agreed merger deal. Basin Minerals operates the Douglas project near Horsham while Iluka Resources has the KWR project near Ouyen, in northern Victoria. Both companies also have extensive exploration portfolios in the region. The move is the second major corporate merger in the Mur ray Basin. Earlier this year, Sons of Gwalia acquired BeMax Resources and also gained an interest in the Wemen project near Robinvale, which is already producing mineral sands for export. In supporting the deal, both Basin and Iluka directors said the merger would create significant value for shareholders by combining Iluka’s technical, operational, marketing and development expertise and also create cost savings of up to $A60 million from the elimination of duplicated infrastructure. The merger offered Basin Minerals shareholders

$2.10 for every share or, alternatively, 10 new Iluka shares for every 23 Basin Mineral shares. As a result of the deal, the merged company controls almost 80 per cent of the known value of currently identified mineral sands in the Murray Basin. It makes Iluka the leading player in the Murray Basin and cements its position as one of the global market leaders in rutile and zircon. The directors of Basin Minerals, who control almost 38 per cent of the company on a fully diluted basis, unanimously supported the offer. Sharemarket analysts have long expected rationalisation of the multiple interest holders in the Murray Basin. The Basin is considered to be one of the most prospective new mineral sands provinces in the world and is highly attractive for its potentially high profit margins, low political and social risk, high-quality mineral assemblage and manageable environmental issues. However, with no previous sand mining in the region, substantial new mining and processing plant and infrastructure is required. In a statement to the Australian Stock Exchange, Basin Minerals said: “a co-co-ordinated approach to development will ensure that value is not lost through duplicated capital investment, sub-optimal product marketing and expensive funding arrangements that dilute the interests of equity participants. “Co-coordinated development will maximise

value creation and minimise the environmental and social impact of future development in this important new mineral province.” The Douglas project was the main attraction for Iluka in making the takeover. Recognised as the most valuable discovery to date in the Basin, the Douglas project is also one of the most advanced. A recent feasibility study by Basin Minerals, completed last May, assessed the net present value of Stage One of the project at $144 million. Stage One exploits only 28 per cent of the currently defined resource base which has recently been enlarged to contain 35 million tonnes of heavy minerals at a 3 per cent cut-off grade. Based on its currently known resources, the Douglas project is expected to run for more than 20 years. In addition, both Basin Minerals and Iluka have extensive and highly prospective exploration interests in the region covering more than 37,000 sq kms. Iluka is confident that these will yield additional resources. The mineral assemblage of the Douglas deposits, which will allow dry mining, provides substantial marketing flexibility to meet the varying demands of the market for different products. In addition, the resource quality of the combined project eliminates the need for capital-intensive upgrading facilities to produce synthetic rutile or high-grade titanium oxide. However, there is the potential for further value creation through the construction of a synthetic rutile plant, while the merger of the resources of the two companies enhances the economics of a syn-rutile plant. Basin Minerals managing director, Dr Brad Farrell, said that if the merger had not been achieved, Basin would have developed the Douglas project on its own. But, he added that, despite the world-class quality of the project, Basin Minerals faced very significant on-going development risks if it proceeded alone. The Douglas project area with strandlines indicated.

F O R M O R E I N F O R M A T I O N C O N T A C T:

Iluka Resources: G eoff Wedgwood 0409 9 97 256 Bas in Minerals: Dr Brad Farre ll ( 08) 9486 1028

18

MINERAL SANDS

Govt pushes state’s hub case Valuable titanium based minerals are likely to be exported through the por t of Portland in Western Victoria.

ictoria is being positioned as a regional hub to support Australia’s emerging mineral sands industry in the Murray Basin, which straddles the Victorian, NSW and South Australian border regions.

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Based on new mines, supporting mineral processing facilities and transport infrastructure, the industry has the potential to attract longterm investment, infrastructure and employment opportunities to regional Victoria. In a speech to the mineral sands industry conference in Melbourne during May, the Victorian Minister for Energy and Resources, Candy Broad, said the Victorian Government was keen to pursue not only new mines but other elements of the industry such as mineral separation plants. Ms Broad said the Government had already “provided new geological data, improved access to industry exploration data, specialists to assist and advise companies through approvals processes and a more certain regulatory and investment environment” to improve the exploration and development prospects for the mineral sands industry. The Government’s recent initiative to create a standard gauge rail link from Mildura to the deep-water port of Portland was another key step in the process of supporting the industry, she added. “Exploration for titanium and zirconium mineral sands is identifying excellent opportunities in regional Victoria,” Ms Broad said. “We already have the new mine at Wemen and there are excellent prospects of more to come elsewhere in the Wimmera/Mallee region.”

Victoria has 57 per cent of the known Murray Basin mineral sands resources area, creating an opportunity for the State to win a major part of the benefits as the industry develops. Ms Broad said Victoria had a chance to work towards the development of an industry which was forecast to generate up to $16 billion over a 30-year period. Several further discoveries have been made in the Murray Basin in the past year. Murray Basin Titanium has found new deposits northeast of Ouyen, while regional drilling by all the main explorers has produced new discoveries or increased the size and quality of known deposits. Ms Broad also emphasised the importance of the Victorian Government’s North West Freight Transport Strategy to mineral sands industry development. The strategy has identified potential long-term freight demands and developed options to transport freight from the region to the ports of Melbourne, Geelong and Portland. Devised by the Department of Infrastructure, working with VicRoads, the Cities of Mildura and Swan Hill and the North West Municipalities Association, the strategy aims to create efficient and seamless freight links, at lower cost, through greater use of rail. Ms Broad said, “The Government’s commitment towards the standardisation of rural rail lines, with highest priority afforded to the nort h - west lines, has substantially boosted the prospects of the mineral sands industry and placed Portland in a position to attract significant investments in pigment 19

processing and export of sands.” The Government’s transport strategy included a review of road/rail share, infrastructure requirements and requirements for road-rail transfers, with a preferred site identified for a freight transfer facility at Mildura. The transport strategy and Victoria’s extensive infrastructure made Victoria a preferred investment destination for mineral sands, Ms Broad added. Another Victorian Government initiative to convert many of north-west Victoria’s open irrigation channels into pipelines, will also provide added stimulus to the region and the mineral sands industry. It will mean greater volumes of irrigation water to farmers, with a likely increase in agricultural production. Ms Broad said the Wimmera-Mallee water pipeline project would prove a bonus for the water intensive mineral sands industr y. The pipeline project, expected to cost around $150 million over 10 years, involves replacing the existing open channels with a new pipeline system throughout the north-west region of the state. In an early example of how the development of a mining industry can benefit regional areas, the pipeline project will save an estimated 93,000 megalitres of water. Ms Broad told the conference that a forecast surplus of some mineral sand products in the middle of this decade, “will be a significant challenge to many new players. “But we believe the many competitive advantages that Victoria offers can provide a buffer to these impacts,” she added. The Murray Basin’ first major commercial mine has been operating at Wemen, 25 kilometres south-west of Robinvale, for just over a year and its oper ator, Murray Basin Titanium, is now looking at developing other deposits in the region. Austpac Resources NL is also investigating new technologies for processing the finegrained mineralisation of the WIM 150 deposits near Horsham while. Basin Minerals, now controlled by Iluka resources, has completed an Environmental Effects Statement on its Douglas project (also near Horsham) with the mine expected to be in production in mid-2003.

Stawell searches for a growing solution

D E PA RT M E N T O F N AT U R A L R E S O U R C E S A N D E N V I R O N M E N T E N E R G Y A N D M I N E R A L S D I V I S I O N C O N TA C T L I S T : MINERALS BUSINESS CENTRE: Level 8, 240 Victoria Parade, East Melbourne Vic 3002 Australia Tel: +613 9412 5020 Fax: +613 9412 5150 R i c h a rd Aldous Executive Director Energy and Minerals Telephone: (03) 9412 4508 Fax: (03) 9412 4183 DIVISI ON OF ENERGY P OLICY: R i c h a rd B ol t D i re cto r Str at eg ic Policy E ne rg y Telephon e: ( 03) 9637 8804 Fax: (03 ) 9637 8835 MINE RAL S BUSI NE SS CENTRE: Fax: (03) 9412 5157 Kim Ricketts Client Services Officer Telephone: (03) 9412 5103 GEOLOGICAL SURVEY VICTORIA: Fax: (03) 9412 5155 Phil Robert s Manager Geological Survey Vi c t o r i a Telephone: (03) 9412 5035 Alan Wi l l o c k s Manager - Geophysics Telephone: (03) 9412 5131 Peter O’Shea Manager Geological Mapping Telephone: (03) 9412 5093 Roger Buckley Manager Mineral Resourc e s 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 K o u rosh Mehin Manager Petroleum Resourc e s Telephone: (03) 9412 5074 Mike Wo o l l a n d s Manager Basin Studies Telephone: (03) 9412 5135

Bob Harm s Manager Petroleum Information Telephone: (03) 9412 5053

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G e o ff Collins Manager Petroleum Pro j e c t s Telephone: (03) 9412 5095

he disposal of mine tailings has become one of the mining industry’s most challenging environmental issues. Often the tailings are spread over large areas, sometimes covering hundreds of hectares.

But new resear ch by the Stawell gold mine owners, in conjunction with Melbourne University and Curtin University in Western Australia, could provide a solution.

MINERALS AND PETROLEUM R E G U L AT I O N : Fax: (03) 9412 5152

The research also could help solve several other significant problems including what to do with waste rock around mines and the disposal of sewage waste water and sludge from cities and towns

Rob King Manager Minerals and P e t roleum Regulation Telephone: (03) 9412 5069

Augustine Doronila, from Melbourne University, is hoping that a new technique could solve all three issues and help create valuable cash crops, all in one step. Mr Doronila told Discovery that the research program would test a suite of plants at a Tailings Experimental Research Facility (TERF) at the Stawell gold mine which he hopes will bring long-term environmental and economic benefits to the region. Initially using a 7000-square-metre site, the research program is about to expand onto a two-hectare area to trial four native grasses and four eucalypts.

G e o rge Buckland Manager Minerals and P e t roleum Te n e m e n t s Telephone: (03) 9412 4778 Graeme McLaughlan Manager Nort h e rn Region Chief Mining Inspector Telephone: (03) 5444 6689

“All eight plant species are indigenous to the region,” said Mr Doronila, who is using the TERF for his PhD research to help find economic options for the r evegetation of sulphidic gold mine tailings.

John Mitas Manager Southern Region Chief Inspector of Quarr i e s Telephone: (03) 9412 5083

“The eucalypts include oil mallee and river red gum which could be used for the production of firewood and eucalyptus oil. Any product from the dams will be separate from the human food chain to minimise any risk to human health or public safety,” he added.

Doug Sceney E n v i ronmental Manager Telephone: (03) 9412 5107

Tailings dams from gold mines typically carry a range of metals and chemicals which can contaminate the surrounding area unless tightly contained within impervious walls.

Horacio Haag Manager Petroleum Operations, Safety and Enviro n m e n t Telephone: (03) 9412 5101

Base metals like copper, and toxins such as arsenic and cyanide compounds contained within the finely ground rock tailings, creates a substrate which is generally detrimental to plant growth. But Mr Doronila hopes that local “heritage” human waste built up over the last 50 years will solve this problem.

MINERALS AND PETROLEUM POLICY:

“The local water and sewage authority was seeking a way to dispose of its sewage biosolids. We can help by using these to create a nutrient-rich substrate over the dams that will give plants a base from which to begin life. Opportunities also exist to use other community and industrial organic wastes,” he said.

John Lambert Manager Minerals and P e t roleum Policy Telephone: (03) 9412 5068

The project’s co-ordinating team from the University of Melbourne’s School of Botany is also planning to use metal-loving plant species that thrive in contaminated areas. These plants seek out and suck up contaminants like arsenic and heavy metals from the soil and concentrate them in their tissues, helping decontaminate the soil.

I N F O R M AT I O N : Janne Bonnett - Manager Minerals and Petroleum Reference Centre Telephone: (03) 9412 5022 Fax: (03) 9412 5157

“The use of such plants could add a whole new dimension to tailings revegetation and restoration and revolutionise the way mining companies rehabilitate Australia’s mine sites,” project leader Professor Alan Baker, said.

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 A T I O N C O N T A C T:

Maher Megallaa Manager Acreage Release Telephone: (03) 9412 5081

August ine Doronila , University of Mel bourne 61 (0)3 834 4 3671 Emai l: [email protected] lb.edu.au

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WATCH THOSE HERITAGE SITES ew administrative protocols for approvals and the provision of heritage advice for mineral explorers in Victoria have been agreed between the Department of Natural Resources and Environment and Heritage Victoria.

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The protocols are aimed at reducing complexity for explorers while ensuring protection for sites of heritage significance. The new protocol recognises that mineral exploration will often occur in areas where there are many historic mining sites and that, with appropriate care, exploration need not be a threat to the integrity of sites or relics. Both NRE and Heritage Victoria are committed to ensuring appropriate conservation of Victoria’s historic heritage sites. Both bodies are concerned to ensure that mineral explorers have a good understanding of their responsibilities without imposing unnec essary administrative processes on government or industry. Places and objects considered to be of cultural heritage significance to the State of Victoria are protected under the Heritage Act 1995. Places can include buildings, precincts, trees, gardens, industrial structures and machinery, archaeological relics, moveable historic objects associated with heritage places and cemeteries. Shipwrecks and maritime ar chaeological sites are also protected. Heritage Victoria maintains two statutory lists, the Heritage Register, which lists all registered heritage places and objects in Victoria, and the Heritage Inventory, which lists all the state’s known archaeological sites and relics.

Archaeological sites can also be listed in the Heritage Register. Listing in the Heritage Register provides more stringent protection and control than listing in the Heritage Inventory. A “Permit” is required from the Executive Director of Heritage Victoria in order to ‘remove, demolish, damage, despoil, develop, alter or excavate all or any part of a registered place’. An ar chaeological ‘consent’ is required from the Executive Director of Heritage Victoria in order to ‘excavate, damage or deface an archaeological site or relic’. DNRE’s involvement in heritage protection comes principally from section 45 of the Mineral Resources Development Act 1990. This provides for a 100-metre consent zone around sites listed on the Victorian Heritage Register and the Heritage Inventory. A licensee may do work within such zones only with the consent of the Heritage Council for registered places or objects, or the Executive Director of Heritage Victoria for inventory sites. Doug Sceney, DNRE’s environmental manager for Minerals & Petroleum Regulation, said that the new protocol had been developed in consultation with industry groups. “It establishes a system where Heritage Victoria will provide essential information and certain approvals at the time of licence grant in the form of a Heritage Summary Statement. “Many of the less intrusive exploration activities will be allowed without additional heritage approvals, provided work is done in accordance with an approved work plan and the operator follows the advice given in the Heritage Summary Statement. 21

The historic gold dredge at Eldorado, near Beechworth.

“In more complex cases, the Heritage Summary Statement will provide proponents with clear information and advice about sites where further approvals may be required . “The proponent can then obtain any relevant consents and permits from Heritage Victoria. “Heritage Summary Statements will contain detailed reports on the location and nature of any heritage register sites and heritage inventory sites within an exploration licence, along with a map showing site locations. “The statements will set out those activities and sites for which Heritage Victoria grants immediate approval under section 45 of the MRD Act and will list any sites where further approvals may be required under the Heritage Act.” Mr Sceney said the new arrangements should help both explorers and all those concerned to protect heritage sites. “Explorers will have better information than in the past so they can plan exploration programs to avoid heritage sites or seek approvals well in advance of work,” he said. “On the other hand, government will be assured that explorers know their obligations so that its resources can be directed to the few situations where there are serious risks.” F O R M O R E I N F O R M A T I O N C O N T A C T:

Dou g Sceney, DNRE Tel: ( 03) 9412 5107 Email: doug.sce ney @nre.vic .gov. a u

WORKPLACE HEALTH

Alcoa releases interim results

ne of Australia’s first major workplace health studies, conducted on staff at Alcoa of Australia’s Portland and Point Henry aluminium smelters in Victoria and mining and processing operations in Western Australia, has found little evidence of increased risk of workplace death or injury.

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cer rates among Alcoa staff in Victoria and Western Australia.

More than 11,000 current and former Alcoa World Alumina and Chemicals (AWAC) workers in Australia were investigated in a bid to detect any unusual rates of death or injury from the workplace.

The interim report analysed data compiled in 1999 by cross-matching the Alcoa workforce with the 1996 Victorian and Western Australian death and cancer registries.

The interim findings reveal that employee deaths from circulatory and respiratory disease, cancer and injury, are lower than in the Victorian and Western Australian general populations while total cancer rates are in line with the general populations of the two states.

A slightly elevated incidence of respiratory tract cancer cases in the total Western Australian and Victorian workforce emerged than would be expected from the general population, the study found.

An interim report has found that employee deaths from the four most common causes are below the rates in the general population. However, some elevated levels of respiratory and melanoma type cancers have been noted in some areas and required further investigation, the study found.

But the researchers noted that, “As the workforces in the two states share no common workplace exposures, it is likely that this finding results from common non-work related factors, such as smoking.

The Alcoa sponsored ‘Healthwise’ study provides a detailed analysis of mortality and can22

WORKPLACE HEALTH

of national health study “An increase in pleural cancer incidence was identified within the Western Australian study group. Where identified in other studies, such cancers have been linked to exposure to asbestos.

MR OSBORN SAID THE STUDY WAS ONE OF THE FIRST OF ITS KIND IN AUSTRALIA AND WOULD PROVIDE INFORMATION VITAL TO THE FUTURE MANAGEMENT OF STAFF HEALTH AND SAFETY.

“Further work will be done by the resear chers on work exposures of the cases of pleural cancers in WA - before and after the employees joined Alcoa. “Elevated incidence of melanoma (a type of skin cancer) found in the WA study group has been associated with increasing age and shows no common workplace exposure.

incidence of cancer among workers

“However, this finding has reinforced the company’s requirement for sun protection within work groups exposed to significant periods outdoors,” the researchers said.

Healthwise is one of the largest and most comprehensive occupational epidemiological studies ever carried out in Australia.

Alcoa World Alumina and Chemicals president, Wayne Osborn, said some initial indications from the study required additional analysis.

was a pre-emptive measure designed to head off future health-related claims against the company.

He said the next steps in the ongoing study would include:

“The cost of the research can be viewed as either a cost or an investment. We regard it as an investment in terms of managing issues which could affect the health of Alcoa workers,” he said. “This is an interim report on a study which still has a long way to go.”

• A review of lung, trachea and bronchus cancer incidence to identify where the cases occur to see if there are any significant groupings • An analysis of the statistical power of the study to see whether a more detailed understanding of the lung, trachea and bronchus cancers is possible • A review of pleural cancers to examine work exposures to asbestos, and

The study was initiated in 1994 after Alcoa dealt with cases of workplace asthma at its Portland aluminium smelter in Victoria while some overseas studies also linked the use of coal tar pitch in older smelters to heightened

• A second search of the cancer and death registers later in 2002. Mr Osborn, said the study was one of the first of its kind in Australia and would provide information vital to the future management of staff health and safety. “We see this as a study that will give us a picture of our preventative measures in our workplace health and safety management,” he added. “We believe it is an important thing to do in providing reassurance to our workers about their health. If something unexpected comes up you can deal with it quickly,” he added, noting that while the results were positive, some incidents of cancer still required further research. Independent researchers at Victoria’s Monash University and the University of Western Australia are conducting the Healthwise study. Mr Osborn rejected a suggestion that the study Alcoa president, Wayne Osborn (above) regards the Healthwise study as a sound investment for the company.

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Locations taking part in the study are the aluminium smelters at Portland and Point Henry, the KAAL Rolling Mill at Point Henry, the Anglesea power station, refineries at Kwinana, Pinjarra and Wagerup, the Bunbury shipping terminal and bauxite mines at Jarrahdale, Huntly and Willowdale. It consists of three major studies: a cross-sectional study of respiratory health, a new starters study and a cancer incidence and mortality study. F O R M O R E I N F O R M A T I O N C O N T A C T:

Email: hwise @med.monash.edu. au

GAS DEVELOPMENTS

Speedy assessment for new fields E

nvironmental assessment has begun for the commercial development of the Geographe and Thylacine gas fields off Victoria’s southwest coastline.

The gas discoveries are among Victoria’s most significant energy developments in recent years and could supply more than 10 per cent of annual gas demand in the southeast area of Australia for at least a decade. Participants in the project are Woodside Energy Ltd, Origin Energy Resources Limited, Benaris International N.V. and CalEnergy Gas (Australia) Limited, with Woodside as operator. Woodside’s Otway development manager, Bruce Steenson, said that environmental approvals under Commonwealth and Victorian legislation would cover development of the gas fields. “There’ll be a co-ordinated assessment under the Commonwealth Environment Protection and Biodiversity Conservation Act, and the Victorian Environment Effects Act,” Mr Steenson added. “This approach means there’ll be an integrated assessment of the potential environmental impact of the development, which means a speedier and thorough assessment process.” The Commonwealth Minister for Environment and Heritage, David Kemp, has directed that an Environmental Impact Statement be prepared for the proposal under the Commonwealth Act. For the Victorian sector of the project, the

New gas fields off the east and west coasts of Victoria are being developed quickly to meet the state’s rapidly increasing demand for clean burning natural gas.

Minister for Planning, Mary Delahunty, has determined the need for an Environmental Effects Statement (under the Environment Effects Act). The project’s participants have welcomed the decision on the environmental assessment process. “It fits very well with work already done on feasibility studies focussed on increasing our understanding of the gas reservoirs and the screening of potential development options,” Mr Steenson says. The joint venture partners are investigating the feasibility of some of these options. They include several new wells, subsea manifolds and flowlines, and possibly a small off-

shore platform over one of the fields with a pipeline to shore where the gas will be processed and connected to the Victorian gas transmission pipeline network. Mr Steenson said that more than $15 million was expected to be spent on development studies this year. The first phase of the fields’ development could require more than $500 million in investment from the joint partners. “The common goal of our joint venturers and the authorities is to deliver a new source of gas supply to the region, providing increased security of supply while aiming to minimise any environmental impact,” Mr Steenson added. Forecasts by several independent authorities suggest that consumption of gas in eastern Australia will grow steadily over the next 15 years, at a time when existing reserves are beginning to decline. Otway gas could be delivered to the markets as early as 2006. “We expect we could recover about 0.8 trillion cubic feet of gas and about nine million barrels of condensate from the two fields,” Mr Steenson said. Thylacine and Geographe, which were discovered last year, are between 55km and 70km south of Port Campbell, in water depths of up to 100 metres. The exact position and siting of the offshore pipeline, landfall and associated gas plant have yet to be decided. However, technical and economic factors suggest the plant will be within about 20km inland from the coast. Participants in VIC/P43, which contains the Geographe field, are Woodside Energy Ltd. (55%), Origin Energy Resources Limited (30%) and CalEnergy Gas (Australia) Limited (15%). Partners in the T/30P permit which holds the Thylacine field are Woodside Energy Ltd (50%), Origin Energy Resources Limited (30%) and Benaris International N.V. (20%). F O R M O R E I N F O R M A T I O N C O N T A C T:

Annali sa Grubisa, External Affairs Advi ser Woodsi de Ener gy Ltd Tel: (08) 9348 4922

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GAS DEVELOPMENTS

New Bass gas set to flow he first gas from the Patricia/Baleen field in Bass Strait is set to flow in e a rly October, marking Au s t ri a n based OMV Australia Ltd’s fi rs t production in Australia.

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The gas will also become the first Bass Strait gas to be produced from outside the EssoBHP Billiton joint venture which has provided all Bass Strait production since the 1960’s. Construction of a gas processing plant located onshore between Lakes Entrance and Orbost is well advanced while the two offshore production wells have already been completed. The gas will be piped ashore from the two wells via a seabed pipeline which continues beneath the beach sand dunes and emerges from the ground at the gas plant site. OMV operations manager, Graham Dwyer, told Discovery the shore crossing had already been completed. The last major links in the process, the undersea pipeline and the control umbilical from the production wells, was scheduled to be completed during August with first production expected in early October. Gas from the Patricia/Baleen project has been contracted into the Eastern Gas Pipeline operated by Duke Energy and will be delivered into the Victorian or NSW market. Gas from the field is keenly sought, both for its volume and as a source separate from the traditional suppliers who dominate the market. Because of the small volumes, Patricia/ Baleen has had to rely on the most efficient low-cost approach to development, capturing synergies and innovation where ever possible. The raw gas from the field, which lies in Production License VIC/L21, located 24 kilometers off the Victorian coastline, contains 98 per cent methane (natural gas) and no harmful components such as hydrogen sulphide. It has a low carbon dioxide component and is able to be piped directly from the field to the gas processing plant onshore. At the plant, the methane is simply separated from the other gases and dehydrated before being compressed and inserted into the Eastern Gas Pipeline. Initially production from the field will be 50 terajoules a day, but OMV has sized the plant and pipeline for 75 terajoules a day to pro-

THE LAST MAJOR LINK IN THE PROCESS, THE UNDERSEA PIPELINE FROM THE PRODUCTION WELLS, WAS SCHEDULED TO BE COMPLETED DURING AUGUST WITH FIRST PRODUCTION EXPECTED BY LATE SEPTEMBER OR EARLY OCTOBER. vide capacity for any additional developments possible in the area. Santos Ltd recently acquired a 20 per cent stake in Patricia/Baleen to increase its toehold in the Victorian gas market. It already produces and sells gas into Victoria from a string of small fields in the Western District near Port Campbell. Santos’ interest in the Patricia/Baleen project, acquired for an undisclosed amount, marks the company’s first involvement in a producing offshore field in Victoria. “The acquisition is in line with the company’s strategy of actively pursuing opportunities which are well positioned with respect to gas markets in Victoria and New South Wales,” Santos managing director John Ellice-Flint, said. Total gas production from Patricia Baleen is 25

The Patricia/Baleen gas field, in Bass Strait near Orbost, is the first new gas field in the region not developed by the Esso/BHP Billiton joint venture.

expected to reach a maximum of 16 billion cubic feet per annum, representing about eight per cent of Victoria’s total annual gas demand. OMV Australia is the project’s operator with a 40 per cent stake, while Trinity Gas Resources also has 40 per cent. Santos’ 20 per cent interest enhances that company’s position in the Gippsland Basin and complements Santos’ recent increase in working interest in the Sole field (70%) and its existing offshore exploration interests in the Kipper (20%) and Golden Beach (66.7%) fields. Proven recoverable reserves in the Patricia/ Baleen field stand at 77 billion cubic feet from a total in-place resource of 108.4 bcf. However, three dimensional seismic survey work and extra drilling could lead to upward revision of the reserve estimates. The gas is trapped in the Gurnard formation, which flowed in the initial discovery well at a rate of 6.3 million standard cubic feet a day. F O R M O R E I N F O R M A T I O N C O N T A C T:

Wolfgang Zimm er, mana ging di rec tor OMV Aus tralia L td Tel: (08) 922 3 500 0

GEOLOGY

Western Vic is worth another look WHAT CAUSED THE DELAMERIAN FOLD BELT TO FORM AND WHY ARE THERE NO MAJOR GOLD FIELDS IN IT? DAVID TAYLOR, A MEMBER OF THE GSV MAPPING TEAM EXPLAINS.

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geological model developed for western Victoria provides a new framework for mineral explorers in the region.

The model also strengthens correlations between South Australia and Tasmania where similar mineral deposits have already provided economic mineral discoveries. The model focuses on the Delamerian Fold Belt in western Victoria which contains some of the oldest rocks in the state and which were d e fo rmed 500 million years ago in the Cambrian age. This deformation, known as the Delamerian Orogeny, was the first in a series of geological events which transformed Victoria from being part of the Pacific Ocean into the continental crust we live on today. Until now, the cause of the Delamerian Orogeny has been sketchy because much of the region is covered by the younger rocks of the Murray Basin. However, recent data acquired by academia, exploration companies and the Geological Survey of Victoria, have helped us understand what caused the Delamerian Orogeny and answer questions like: • Why does the Delamerian Fold Belt contain no major goldfields, unlike the StawellBendigo area just to the east? • If the Delamerian Fold Belt is not prospective for major goldfields, then what mineral wealth might it contain? The Delamerian Fold Belt is well exposed in South Australia, running northwards from Kangaroo Island through the Adelaide Hills to the Flinders Ranges.

margin became known as the Adelaide Geosyncline.

In the 1950s, South Australian geologist Reg Sprigg realised that, prior to being deformed, these rocks had been deposited along an earlier margin of the Australian continent.

In the early 1980s, structural mapping led to the recognition that the rocks had been driven westward back across the older continent as a thin-skinned fold-and-thrust belt.

The rock sequence representing this ancient

The cause of this deformation could not be 26

Figure 1: Aeromagnetic image of western Victoria showing the large belt of hidden magnetic Dimboola Igneous Complex rocks in the north of the GrampiansStavely Zone. Bedrock is only exposed inside the limits of the yellow line.

GEOLOGY

ascertained in South Australia because the evidence lay in Victoria to the east, where the rocks are largely covered by the younger Murray Basin. Aeromagnetic data, which has the ability to ‘see through’ the Murray Basin cover rocks, delineated a large belt of magnetic rock near Dimboola along the eastern margin of the Delamerian Fold Belt. These rocks do not extend into the area of outcrop further south and could not have been predicted from the exposed geology. Drilling by North Ltd showed the magnetic belt consists of mafic-ultramafic ophiolites since named the Dimboola Igneous Complex.

THIS NEW DATA SUGGESTS THAT THE DELAMERIAN OROGENY WAS THE RESULT OF AUSTRALIA COLLIDING WITH AN OCEANIC ARC, RATHER THAN COLLIDING WITH A CONTINENTAL FRAGMENT HOSTING AN ANDEAN ARC. They are crucial in helping unravel the geological history of western Victoria. The Delamerian Orogeny appears to have been caused by arc-continent collision. The margin of the ancient Australian continent (similar to the present-day Atlantic margin of America) was drawn into an oceanic subduction zone (similar to the present-day Marianas Trench). This resulted in the oceanic arc above the subduction zone colliding with the continental margin to cause the deformation. In Victoria, rocks of the Adelaide Geosyncline outcrop in a number of creeks north of Coleraine in a region termed the Glenelg Zone. Most of the rocks are grouped into the Glenelg River Metamorphic Complex, where atypically high temperatures during deformation caused much of the rock to partially melt and form granite. East of the Glenelg Zone is the GrampiansStavely Zone. The Delamerian Fold Belt rocks are poorly exposed around the margins of the younger Grampians Ranges and consist of Mount

Stavely Volcanics in-faulted with quartz-rich turbidites such as the Glenthompson Sandstone. In the mid 1980s, Erwin Scheibner of the Geological Survey of NSW suggested the Mount Stavely Volcanics might have been an Andean-type volcanic chain that had erupted through a small continental fragment. This would account for their calc-alkaline chemistry and he suggested that collision of this continental fragment with Australia had caused the Delamerian Or ogeny. In the mid 1990s, two new pieces of data forced revision of this model: Firstly, dating of the Mount Stavely Volcanics by AGSO gave ages of 500 Ma which shows that these rocks erupted towards the end of the Delamerian Orogeny (510-495 Ma). Thus these rocks are a consequence of the deformation rather than part of the cause. A second piece of the puzzle was revealed through aeromagnetic surveys which discovered the magnetic Dimboola Igneous Complex where drilling showed that the rocks were mafic to ultramafic basalt and gabbro ophiolite. Tony Crawford of the University of Tasmania identified a boninite chemistry for these rocks which is crucial for the new model since boninites only form in oceanic arc environments. This new data suggests that the Delamerian Orogeny was the result of Australia colliding with an oceanic arc, rather than colliding with a continental fragment hosting an Andean arc. Botomian-aged trilobite fossils exposed in oceanic arc fragments near Heathcote in central Victoria show that the subduction that created the arc was occurring at 520-510 Ma, before the Delamerian Orogeny that is dated as occurring from about 510-495 Ma. The subduction eventually drew in the continental margin of Australia. Since continental crust is less dense than oceanic crust, it cannot fully subduct, so a collision ensued. The continental margin on the subducting lower plate partly slid beneath the oceanic arc on the upper plate. This resulted in oceanic arc rocks of the Dimboola Igneous Complex being emplaced westward as obducted ophiolite. The Adelaide Geosyncline was also pushed 27

Figure 2: Geological model explaining the Delamerian Orogeny.

GEOLOGY

Figure 3 Cooling columns in the relatively undeformed Mount Stavely Volcanics at Mount Dryden. These rocks are likely to be correlates of the prospective Mount Read Volcanics in Tasmania.

westward as a thin-skinned fold-and-thrust belt over its continental basement. The thickening associated with the deformation, combined with rebound of the buoyant continental crust from the subduction zone, allowed uplift and erosion to commence. Much of the eroded material accumulated on the undeformed oceanic crust to the east of the collision zone. This later became the quartz-rich turbidites of the Lachlan Fold Belt. Towards the end of the collision, the Mount Stavely Volcanics erupted and their calc-alkaline chemistry reflects their ascent through a continental basement and the newly deformed Adelaide Geosyncline. The volcanics and some of the eroding sediment became trapped in submarine basins developed over the collision contact to form the Cambrian bedrock of the GrampiansStavely Zone. The late deposition of these rocks means they are only weakly deformed and are thus distinct from the Glenelg Zone rocks, which absorbed the full impact of collision. An arc-continent collision was proposed in the late 1980’s by Ron Berry and Tony Crawford of the University of Tasmania to explain the Cambrian Tyennan Orogeny in Tasmania. This involved a similar history with westwar d emplacement of ophiolites onto a continental margin that was followed by eruption of calcalkaline volcanics into submarine basins that were weakly deformed (the Mount Read Volcanics in the Dundas Trough). The Hummocks Serpentinite in the Glenelg Zone of Victoria was investigated by academics from the University of Adelaide in the early 1990’s and they noted similarities to the Tasmanian ophiolites and speculated that perhaps Victoria had experienced the same ophiolite obduction event. The recognition of more substantial occurrences of Dimboola Igneous Complex and the similarity of the Mount Stavely Volcanics to the Mount Read Volcanics, further reinforces comparisons between western Victoria and Tasmania. The position of Tasmania relative to the mainland is uncertain for the Cambrian but the similarities mentioned here suggest they may have been parts of the same continental margin involved in an arc-continent collision.

THE ARC-CONTINENT COLLISION MODEL ALSO PROVIDES A HANDY REFERENCE FRAME FOR MODELS THAT EXPLORE THE EVOLUTION OF THE YOUNGER LACHLAN FOLD BELT AND ITS GOLDFIELDS JUST TO THE EAST. An arc-continent collision explains why the Delamerian Fold Belt lacks the gold endowment of the younger Lachlan Fold Belt to the east. The boninites have been inferred as a major gold source for the Lachlan Fold Belt. In the Lachlan Fold Belt, they lay at the bottom of the rock pile so that, during later deformation and metamorphism of that region, the gold was driven off and upwards to be redeposited in auriferous quartz reefs. In the Delamerian Fold Belt, the boninites were obducted on top of the rock pile and thus remained at very shallow crustal levels with little metamorphism so that they failed to liberate gold for concentration into economic mineralisation. The new understanding of the Delamerian Fold Belt recognises different opportunities for mineral explorers. The model helps define the boundaries of the major geological zones in which there are differing rock packages with different economic potential. 28

The Glenelg Zone represents part of the Adelaide Geosyncline passive margin sequence upon a rifted continental crust. Such settings are prospective for hydrothermal base-metal deposits (Cu, Pb, Zn, Ag, Au) like the Kanmantoo Mine in South Australia. The Grampians-Stavely Zone includes the younger Mount Stavely Volcanics that erupted towards the end of deformation into submarine basins. These rocks correlate with the Mount Read Volcanics in Tasmania and have potential for gold-rich, volcanic-hosted massive sulphide base-metal deposits (Cu, Pb, Zn, Ag, Au) like Mount Lyell or Hellyer in Tasmania. The model presented here for the Delamerian Orogeny provides a new framework for mineral explorers in western Victoria. It strengthens correlations to South Australia and Tasmania where similar mineral deposits have already proved economic. The arc-continent collision model also provides a handy reference frame for models that explore the evolution of the younger Lachlan Fold Belt and its goldfields just to the east.

F O R M O R E I N F O R M A T I O N C O N T A C T:

Peter O’Shea Manager Geologi cal Mapping Tel: (03) 9412 5093 Fa x: (03) 9412 5155 Em ail: Pe ter. O ’ S h e a @ n r e . v i c . g o v. a u