DISCOVERY V I C T O R I A’ S
E A R T H
R E S O U R C E S
J O U R N A L
F E B R U A R Y
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INSIDE THIS ISSUE • VIC GAS BOOM
• BREAM ON LINE • HAZELWOOD PROJECT
DISCOVERY V I C T O R I A’ S
E A RT H
R E S O U R C E S
J O U R N A L
F E B R U A RY
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contents VICTORIAN GAS BOOM
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Victoria has become eastern Australia’s dominant gas supplier
BASSGAS PROJECT UNDERWAY
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The Yolla field will boost Victoria’s gas production
IT’S A RECYCLING ‘DOUBLE’
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A new waste recycling plant adds to our ‘clean and green’ reputation
MELBOURNE IS KEY RESEARCH CENTRE
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ExxonMobil’s global search for new sources of energy starts here
BREAM GAS FLOWS ASHORE
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New pipeline adds to the security of supply for Victoria’s gas market
THIS RIVER IS A MOVER
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Morwell River undergoes yet another diversion to make way for mine development
MBT MOVES BEYOND WEMEN
cover picture
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A new mineral sands mine is being developed in the Murray Basin
COAL BED METHANE PROJECT
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The pipelaying vessel Lorelay laid the 46 km of undersea gas pipeline connecting Esso/BHP Billiton’s Bream A platform in Bass Strait to the Victorian coastline (see our story on page 9).
Victoria’s vast brown coal deposits may help boost local gas supplies
ESSENTIAL SET FOR BIG YEAR
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The Otway Basin is set for a busy time, both onshore and offshore
3D LOOK AT VALLEY’S COAL RESOURCE
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The ship is one of the world’s most advanced pipeline-laying vessels and uses dynamic thrusters (as opposed to anchors) to hold position. The 13-metre long sections of the pipeline were welded together on board and ultrasonically inspected for weld integrity before being laid on the seabed. The joints are also coated with a wrap around mastic heat-shrink sleeve for corrosion protection, and the joint gap filled with high-density foam.
New VIMP data is available for brown coal miners
VIMP DATA RELEASE IS BEST YET
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The latest package of VIMP data will be released in May
LATROBE MAGNESIUM WINS GRANT
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Plans for a new magnesium plant in the Latrobe Valley get a boost
NEWCREST DRILLS THE BASIN
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The search is on for new copper and gold deposits
R&D BOOST FOR MINING INDUSTRIES
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The focus is on Greenhouse gas, waste and emissions, and new mining equipment
COSTERFIELD TARGETS FOUR MORE AREAS
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The Costerfield deposits continue to produce encouraging results
LAKES TO DRILL TWO GIPPSLAND WELLS
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The exploration junior embarks on new wells in the Gippsland Basin 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 Theo Theophanous gives his views
NEWS BRIEFS
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A roundup of Victorian industry news
VICTORIA’S RESOURCES
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All photographs, maps, charts, tables and written information in this publication are copyright under the Copyright Act and may not be reproduced by any process whatsoever without the written permission of the Department of Natural Resources and Environment.
Victoria’s mineral, oil and gas resources
MINERAL LICENCE REVIEW
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Who’s doing what with mineral exploration licences
© Minerals and Petroleum Victoria 2003.
Published quarterly on behalf of the Minerals and Petroleum Division, Department of Primary Industries. 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, Minerals and Petroleum Division, Department of Primary Industries, 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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VICTORIAN GAS BOOM B
ass Strait’s role as south-east Australia’s major supplier of natural gas for the next 15 years has been cemented through a $A4.5 billion, three-way deal with Australia’s biggest domestic gas supplier, AGL Ltd. Combined with the development of new, highpressure gas pipelines to New South Wales, South Australia and Tasmania and substantial new statewide infrastructure, Victoria has become eastern Australia’s dominant gas supplier. AGL Ltd, which now supplies more than 30 per cent of Australia’s domestic gas market has secured new, long-term natural gas requirements through a portfolio of supply and transportation arrangements for the New South Wales, Victorian, South Australian, Queensland and ACT markets, announced late last year.
point where it now has a major role in supplying the entire eastern seaboard of Australia.
That has only been able to occur through the deregulation of the gas industry and the development of major new gas pipelines to new markets.
As a consequence, the Bass Strait producers have sought to bolster known gas reserves in the fields. Late last year, Esso/BHP Billiton completed the largest ever three-dimensional seismic survey in Bass Strait, a survey where one of the main objectives was to locate potentially major new gas reserves.
Since the discovery of the first hydrocarbons under the rough waters of Bass Strait in the 1960’s, Esso/BHP Billiton have never actively searched for natural gas, despite discovering vast resources of the fuel as a consequence of searching for the rich oil fields in the region. But after 30 years of production, about half of those early gas discoveries have been consumed, although a massive gas reserve of around 10 trillion cubic feet remains. Those reserves, plus the additional reserves Esso/BHP Billiton expects to find through an aggressive exploration program over the next few years, has given Bass Strait a strong place in the eastern Australian gas market. This role has been accentuated by the fact that the gross remaining reserves in the Cooper Basin fields in South Australia are becoming progressively more expensive to extract.
The new gas supply and transportation contracts, worth a combined $4.5 billion, cover the supply of up to 1,408 petajoules of gas over 15 years, through commercial arrangements with Esso/BHP Billiton, the Santos-led Cooper Basin producers and Origin Energy.
Esso/BHP Billiton recently completed the construction of a new gas pipeline from the Bream field in Bass Strait to deliver gas direct to the Longford gas plant in Gippsland. The $200 million project dramatically increases Victoria's capability to produce new gas supplies.
The contracts confirm the development of Bass Strait from its role as the sole supplier of natural gas into the Victorian market, to the
In association with the development of the gas reserves in the Bream field, the project now has the capacity to produce up to 200 terajoules of gas a day for the growing south-eastern Australia market, equivalent to an extra 35 per cent of Victoria's average daily requirements.
The rebuilt Longford gas processing plant in Gippsland and new offshore gas production facilities have helped ensure that the ExxonMobil- operated Bass Strait fields have become a major supplier of gas to the entire southeast Australian gas market.
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GAS NEWS
A major offshore three-dimensional seismic survey (left), the largest ever conducted in the Gippsland Basin, and rapid development of the onshore gas pipeline system (below), has created the perfect conditions to allow the Bass Strait gas fields to penetrate new markets.
AGL’s new Bass Strait gas contracts, which come into play progressively over the next few years in different markets, significantly enhance the role of Bass Strait gas and other gas reserves in Victoria, which will gradually assume far greater national importance as the gas supply from the Cooper Basin declines.
As a result of the new contracts, AGL has now withdrawn from an earlier, conditional, agreement to buy gas from the proposed Papua New Guinea-to-Queensland gas pipeline.
Both Bass Strait and the Surat/Bowen Basins in Queensland will take on greater supply roles in the South Australian, NSW and ACT markets.
AGL was Australia’s first energy distribution and marketing company to include natural gas, LPG and electricity in its energy portfolio.
But the offshore fields in the Otway Basin in Victoria’s west will also assume a greater role on bolstering Victoria’s place as a national gas supply hub.
In partnership with some of the world's biggest energy companies, the company has acquired assets, which have strengthened its position as an energy market leader, and has also expanded into the telecommunications industry.
BHP Billiton is already developing the Minerva field off the Victorian coast near Port Campbell. Minerva gas will be piped direct into the Victorian gas pipeline grid and will ultimately make its way principally into the South Australian market. The nearby Geographe and Thylacine gas discoveries will also be developed for markets in South Australia where sales contracts have already been signed. In Bass Strait, the Yolla and Patricia/Baleen gas fields are also under development. The gas from Patricia/Baleen is to be piped direct into the Eastern Gas pipeline where it will be transported into the Sydney market. Yolla gas has already been sold into the South Australian market to supplement Origin Energy’s requirements for power generation and retail distribution. In Victoria, AGL is now the largest retail and industrial gas supplier as a result of the dramatic changes in the national energy market in recent years. It is also a major electricity supplier.
THE OFFSHORE FIELDS IN THE OTWAY BASIN IN VICTORIA’S WEST WILL ALSO ASSUME A GREATER ROLE ON BOLSTERING VICTORIA’S PLACE AS A NATIONAL GAS SUPPLY HUB. the Santos-led Cooper Basin producers and an additional 340 petajoules from Origin Energy’s interests in Queensland's Surat/ Bowen Basins. To deliver the gas from its source, AGL will utilise the Moomba-to-Sydney gas pipeline, the Moomba-to-Adelaide pipeline, the GasNet distribution system in Victoria and the Eastern Gas pipeline which runs from Longford in Gippsland into the Sydney market.
AGL managing director Greg Martin said the new gas supply arrangements would underpin the company's ability to provide customers with secure and competitively priced energy. "These new arrangements represent some of the most significant transactions of this nature in Australia and are fundamental to AGL securing competitively priced gas supplies for its customers well into the next decade,'' Mr Martin said. The new arrangements will supplement and ultimately replace AGL's existing arrangements with the Santos-led Cooper Basin producers, due to expire in 2006, and those with the Gippsland Basin producers where the gas contracts will expire around the end of the decade. AGL has contracted to take up to 563 petajoules of gas from the Esso/BHP-Billiton Gippsland Basin producers. In addition, AGL will buy 505 petajoules from 3
It is one of the new vertically integrated Australian companies involved in virtually all aspects of the energy sector, including natural gas, electricity and LPG. AGL shares have been listed on the Sydney Stock Exchange since it opened in 1871 and he company has grown into an international entity with a stock market capitalisation of around $3.5 billion with businesses throughout Australia, New Zealand and Chile. It’s a giant leap for a company whose initial role was to light the streets of Sydney. F O R M O R E I N F O R M AT I O N C O N TA C T:
Jane Counsel AGL Ltd Media Relations Manager Tel: (02) 9922 8352
GAS NEWS
BassGas project underway plant will take place over an eighteen-month period with the plant expected to be operational in the third quarter of 2004.
onstruction of the $A370 million BassGas project has begun, marking the beginning of the first new petroleum discovery outside Victoria’s traditional Bass Strait field area.
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Construction of the 32 kilometres of onshore pipeline will start in the third quarter of this year while work on the 147km sub-sea pipeline to the offshore fields will start in the first quarter of 2004. Installation of the offshore production platform will begin in the first quarter of 2004 and the project is expected to come on line in the third quarter of 2004.
The project will add almost 10 per cent to Victoria’s annual gas production by the time is starts production in the third quarter of 2004. The final piece of the complex environmental impact assessment fell into place in December for the members of the T/RL1 joint venture when the Federal Government approved the project, enabling construction to start.
The project will create 350 jobs during construction and 30 permanent ongoing jobs at the Lang Lang onshore gas processing plant.
The BassGas project received approval from the Victorian Minister for Planning in September 2002. The project, which lies in Bass Strait about half way between Victoria and Tasmania, will produce natural gas and petroleum liquids from the Yolla and White Ibis fields, pipe them under Bass Strait and process the products in a new plant to be built near Lang Lang, south-east of Melbourne. Origin Energy, the operator for the BassGas project, received an Environment Protection Agency (EPA) works approval in late December 2002, allowing work to start on the processing plant on January 6. The approval was granted after a lengthy process requiring Origin Energy to demonstrate that the design of the processing plant complied with the air quality, surface water and noise levels specified in the Environment Act.
Geoff Wearne
Origin Energy general manager BassGas, Geoff Wearne, said: “The BassGas project now continues on schedule and the processing facility will be operational by third quarter 2004.
“Over the coming weeks and months we will continue to consult regularly with the South Gippsland community about our activities and the construction schedule.” Origin Energy estimates that demand for natural gas in Victoria will double over the next twenty years and says that new infrastructure is required to meet this growing market. The BassGas project will bring additional alternate gas supply into south-eastern
Origin Energy executive general manager for oil and gas production, John Piper, said the approval of the federal Government late last year: “endorses the commitment Origin Energy and its joint venture partners have invested in the environmental approval process that started in August 2001. Australia since the Gippsland gas fields were developed more than 30-years ago. It will commercialise gas from the Yolla field and supply a volume equivalent to 10 per cent of the Victorian natural gas market for 15 years. The gas from the Yolla field will come onshore at Kilcunda, 15 km north west of Wonthaggi at a rate of up to 67 terajoules of gas a day, together with substantial volumes of condensate and LPG. Most of the early gas production will be delivered into the South Australian market where Origin Energy has agreed to purchase 95 per cent of the 20 petajoules of gas produced each year for its retail business. The Yolla gas field is located 147 km south of the Victorian coast in Bass Strait and contains up to 256 petajoules of sales gas – equal to more than one year of Victoria’s total gas demand. Partners in the project are Origin Energy (37.5% ownership) and its joint venture partners, AWE (30%), CalEnergy (20%) and Wandoo Petroleum Pty (12.5%). The field, which includes the adjacent White Ibis field, also contains one million tonnes of Liquid Petroleum Gas (LPG), and 14 million barrels of condensate (light oil). Construction of the Bass Gas project will begin with the building of a 75 million standard cubic feet a day gas processing plant near Lang Lang starting in the first quarter of 2003. Construction and final commissioning of the 4
“The BassGas project is now positioned to deliver on our promise to improve the security of gas supply in Victoria and south-eastern Australia and to increase competition in the market.” AWE managing director Bruce Phillips said the progress of the construction BassGas project depended, “on the BassGas proponents’ good relationships with all stakeholders, including the local communities and the Victorian, Tasmanian and Federal government authorities. “The BassGas project is important in ensuring competitively priced energy for homes and businesses in southeast Australia and we are determined to deliver the project for the mutual benefit of those communities and our shareholders,” he said. Elliot Yearsley, CalEnergy’s general manager, added that the Yolla project would provide a competitive source of energy to the people of businesses of Victoria and also represented a milestone foe CalEnergy in Australia. The director of Wandoo Petroleum, Noboru Tsuruta, said BassGas would deliver an important new gas supply to the southeastern Australia market. F O R M O R E I N F O R M AT I O N C O N TA C T:
Tony Wood Public & Govt Affairs, Origin Energy Tel: (03) 9652 5506 Mobile: 0419 642 098
ENVIRONMENT
It’s a recycling ‘double’ Waste material from the metal casting operations at the Point Henry aluminium smelter will be recycled to produce valuable new products, saving 7900 tonnes of material previously sent to landfill.
1963 and has a rated capacity of 185,000 tonnes of aluminium a year. Construction of the plant started in December 1961 and two years later the first potline began production, reaching 40,000 tonnes of aluminium output a year by 1964. In the 1960s, extrusion operations, sheet rolling, the construction of a second potline (bringing plant capacity to 90,000 tonnes), opening of an alumina unloading pier, and construction of the dedicated 150 megawatt power station at Anglesea, were also initiated in a period of extraordinary activity for the company. Further expansions of smelting, casting, sheet and foil capacity took place in the 1970s and by 1980 a third potline lifted plant capacity to 170,000 tonnes.
ictoria’s Point Henry aluminium smelter at Geelong has opened a major new aluminium waste recycling project to enhance Victoria’s reputation as a ‘clean and green’ manufacturing state.
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The plant will convert residue, scrapings and trimmings from aluminium casting into recycled aluminium and raw materials to be used in cement and ceramics manufacture. The new plant will turn 13,400 tonnes of waste produced each year into more useable industrial products and eliminate 7,900 tonnes of waste that was previously sent to landfill. The facility completed its first production run in November 2002, achieving full production in January, and is now being used as the pilot plant for similar projects to be installed in Alcoa-operated aluminium smelters globally. Victoria’s Minister for Manufacturing, Tim Holding, opened the new Hot Dross Recycling Plant at Point Henry during December. “It follows Alcoa's Portland spent pot lining process – which turns hazardous waste into safe building materials – as another great example of how innovation can drive business sustainability,” Mr Holding said.
“These projects demonstrate how a focus on innovation and sustainability will help ensure a strong and environmentally-responsible manufacturing sector in Victoria.” The Point Henry smelter is owned by Alcoa World Alumina Australia while the associated rolling mill is owned by Alcoa Kaal Australia, a joint venture between Alcoa and Kobe Steel of Japan.
PROGRESSIVE IMPROVEMENTS IN SMELTING EFFICIENCY SINCE THE 1940S HAVE SEEN WESTERN- WORLD SMELTERS REDUCE AVERAGE ELECTRICITY CONSUMPTION FROM 23 KILOWATT HOURS PER KILOGRAM OF ALUMINIUM TO AROUND 16KWH/KG TODAY. Alcoa also operate Victoria’s second aluminium smelter at Portland in western Victoria in which the company has a 55% interest. The Point Henry smelter began operations in 5
In the following decade, major structural changes occurred in the aluminium industry, with intense international competition from new, low-cost producers. Point Henry responded with a significant rationalisation of product, selling out of the extrusion business and concentrating the semi-fabricating operation solely on rolling sheet for aluminium beverage cans. Today, the smelter's rated capacity has risen to 185,000 tonnes of aluminium using alumina shipped from the refineries in Western Australia. The Portland smelter in western Victoria is one of the lower-cost smelters in the world, owing to economies of scale, the use of Alcoa’s latest smelting technology and highly efficient electricity usage. Progressive improvements in smelting efficiency since the 1940s have seen westernworld smelters reduce average electricity consumption from 23 kilowatt hours per kilogram of aluminium to around 16kWh/kg today. At Portland, modern technology and efficient work practices have enabled the company to reduce this further to about 14kWh/kg. Virtually all of the metal produced at Portland is exported, primarily to Japan and other Asian customers.
DEPARTMENT OF PRIMARY INDUSTRIES M I N E R A L S A N D P E T R O L E U M D I V I S I O N C O N TA C T L I S T: MINERALS AND PETROLEUM BUSINESS CENTRE: Level 8, 240 Victoria Parade, East Melbourne Vic 3002 Australia Tel: +613 9412 5020 Fax: +613 9412 5150 Richard Aldous Executive Director Energy and Minerals Telephone: (03) 9412 4508 Fax: (03) 9412 4183 MINERALS AND PETROLEUM BUSINESS CENTRE: Fax: (03) 9412 5157 Kim Ricketts Client Services Officer Telephone: (03) 9412 5103 GEOLOGICAL SURVEY VICTORIA: Fax: (03) 9412 5155 Phil Roberts Manager Geological Survey Victoria Telephone: (03) 9412 5035 Alan Willocks Manager - Geophysics Telephone: (03) 9412 5131 Peter O’Shea Manager Geological Mapping Telephone: (03) 9412 5093 Roger Buckley Manager Mineral Resources Telephone: (03) 9412 5025 Graham Gooding Regional Manager Ballarat Telephone: (03) 53 336 521 Guy Hamilton Regional Manager Bendigo Telephone: (03) 5444 6697
Bob Harms Manager Petroleum Information Telephone: (03) 9412 5053 Geoff Collins Manager Petroleum Projects Telephone: (03) 9412 5095 MINERALS AND PETROLEUM REGULATION: Fax: (03) 9412 5152 Rob King Manager Minerals and Petroleum Regulation Telephone: (03) 9412 5069 George Buckland Manager Minerals and Petroleum Tenements Telephone: (03) 9412 4778 Graeme McLaughlan Manager Northern Region Operations Chief Mining Inspector Telephone: (03) 5444 6689
The Alcoa operated Portland smelter has also dramatically reduced its waste generation through a $A26 million spent potlining recycling program which converts solid wastes into inert solids used in road building and recaptures valuable materials to be reused in the smelting process.
John Mitas Manager Southern Region Operations Telephone: (03) 9412 5083
The creation of parklands around the plant site has earned Portland the title of the ‘Smelter in the Park’ and the first certification as a viable habitat ever granted by the Wildlife Habitat Enhancement Council outside the US.
Doug Sceney Environmental Manager Telephone: (03) 9412 5107
Alcoa is the world’s leading producer of primary aluminium, fabricated aluminium and alumina.
Horacio Haag Manager Petroleum Operations Safety and Environment Telephone: (03) 9412 5101
Its aluminium products and components are used worldwide in aircraft, automobiles, beverage cans, buildings, chemicals, sports and recreation, and a wide variety of industrial and consumer applications, including Alcoa’s own consumer brands.
MINERALS AND PETROLEUM POLICY: PETROLEUM DEVELOPMENT: Fax: (03) 9412 5156 Kathy Hill Manager Petroleum Development Telephone: (03) 9412 4208 Kourosh Mehin Manager Petroleum Resources Telephone: (03) 9412 5074 Mike Woollands Manager Basin Studies Telephone: (03) 9412 5135 Maher Megallaa Manager Acreage Release Telephone: (03) 9412 5081
THE CREATION OF PARKLANDS AROUND THE PLANT SITE HAS
John Lambert Manager Minerals and Petroleum Policy Telephone: (03) 9412 5068
EARNED PORTLAND THE TITLE OF THE ‘SMELTER IN THE PARK’ AND THE FIRST CERTIFICATION AS A VIABLE HABITAT EVER GRANTED BY THE WILDLIFE HABITAT ENHANCEMENT COUNCIL OUTSIDE THE US.
INFORMATION: Janne Bonnett - Manager Minerals and Petroleum Reference Centre Telephone: (03) 9412 5022 Fax: (03) 9412 5157
Kaal Australia is Australia’s only manufacturer of aluminium rolled products and produces rigid container sheet for beverage cans, aluminium foil and common alloy sheet for building and marine applications. Over half of its production is exported, mainly to growing markets in Asia.
Chandri Nambiar Manager Marketing Development Telephone: (03) 9412 5061 Fax: (03) 9412 5155
F O R M O R E I N F O R M AT I O N C O N TA C T:
Linda Craven, Point Henry Works PO Box 460 Geelong Victoria 3220 Telephone: (03) 5245 1440 email: [email protected] Alcoa Website: http://www.alcoa.com
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REGULAR FEATURE
Support policy produces results The Bracks Government is committing $70 million, over the next four years, to assist with reticulating gas to towns in rural and regional Victoria.
he Bracks Government is ensuring the future security of Victoria’s energy supply through several initiatives. Of particular relevance to our readership is the provision of support to uncover potential new sources of natural gas reserves in the region.
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Additional gas transmission infrastructure in a region can improve the opportunities for reticulation significantly.
This policy is bearing fruit, with pivotal offshore discoveries made in 2001 in the Otway Basin, west of Melbourne.
The successful model used by the Government to bring gas to the Bellarine Peninsula can be built on for natural gas extension programs in other regions, including Gippsland.
It is rewarding to see higher levels of activity in these sectors, particularly in the petroleum exploration and development areas.
Extension of our natural gas network will create an attractive alternative fuel source for domestic and small business users, and may also create new opportunities in Victoria’s food processing, manufacturing and resources-based industries in non-metropolitan areas.
The last two years have been truly outstanding for Victorian petroleum exploration and the pace is set to continue at a high level. In the wake of the 2001 successes, seismic exploration continued to be active over the 2002 period, with major companies including Esso/BHP Billiton, Santos, Woodside and Origin acquiring data in both the Otway and Gippsland basins. In the last fiscal year, approximately $190 million was spent on exploration in the Victorian region, with a further $95 million spent by 31 December 2002. In this issue, you will read of petroleum exploration in the Otway Basin undertaken by a relatively new player, Essential Petroleum. Essential joins junior explorer, Lakes Oil, in looking for potential new prospects, primarily in the onshore Gippsland Basin. Essential Petroleum has already reported some success in their onshore well, Port Fairy1, which produced natural gas upon testing. On the development front, construction of both the Minerva and BassGas projects is underway and the Patricia Baleen plant is nearing completion. These projects will provide an alternative gas supply to the Longford facility and increase supply security by providing alternative processing capacity. The potential for gas development investment over the next four to five years is around $2 billion. The high level of exploration and development activities augers well for Victoria’s gas industry. Such investment and effort will result in new discoveries and provide significant additional gas, strengthen security of supply and reduce
Supporting the supply of reliable low-cost gas will assist our work in attracting investment in
Extension of our natural gas network will create an attractive alternative fuel source for domestic and small business users. the dependence on fuels that generate high amounts of greenhouse gases. It is widely recognised that the petroleum industry is already at the forefront of new technology. Almost all the recent discoveries were made as a consequence of new 3D seismic data. Further exploration, using new environmentally benign technologies and methods, needs to be encouraged. The Bracks Government continues to ensure that our mineral and petroleum resources are managed sustainably in a way that delivers benefits to all Victorians. While petroleum exploration in Victoria is now at its highest level for more than a decade, it is undertaken within the context of the Bracks Government’s balanced approach towards economic, social and environmental goals. Many regional and rural communities do not have access to the natural gas network. 7
Victoria’s natural gas industry. The Bracks Government will continue to provide a supportive investment environment for our oil and gas industries. Victoria’s early oil and gas production came from the Gippsland Basin but, in recent years, the exploration focus has shifted to the Otway Basin where new additional gas supplies are being discovered. Nevertheless, the interest in the Gippsland Basin, particularly using modern 3D seismic data, is continuing. Working together, Government, industry, local government and communities can help ensure sustainable development of Victoria’s oil and gas resources into the future for the benefit of all Victorians.
Hon Theo Theophanous Minister for Energy Industries and Resources.
TECHNOLOGY
Melbourne is key research centre elbourne has become a key centre in ExxonMobil’s global search for new sources of energy. The giant multinational oil/gas producer has just completed the installation of a state-of-theart visualisation centre in its Southbank headquarters in Melbourne and is moving one of ExxonMobil’s global exploration centre’s to Melbourne as well.
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The installation of the visualisation centre has combined with the establishment of the new south-east Asian/Australasian geoscience group to make Melbourne a key centre in ExxonMobil’s global search for new sources of energy. Bass Strait’s vast, but declining, petroleum reserves remain one of ExxonMobil’s most important global assets, a resource worthy of a major effort by the mega-major petroleum group to maximise the returns from the region. The new, 15 member geoscience group is responsible for identifying and evaluating new exploration opportunities for ExxonMobil in the south-east Asia/Australia/PNG region. It consolidates smaller teams which were previously located in Melbourne, Jakarta and Malaysia. Extracting energy from several kilometres beneath the earth’s crust requires collaborative efforts from a large number of people across a variety of scientific disciplines. It involves multi-disciplinary teams of specialists working through vast amounts of historical, technical and interpretive scientific data in order to make decisions ultimately involving millions of dollars. The new visualisation centre allows Esso’s geoscientists to display images directly on to a 2.4 metre by 4.8 metre screen through two high-resolution, high-brightness, digital lightprocessed (DLP) projectors. Processing data from both, or either, of Esso’s massive Unix and PC dual screen desktops, images can be projected to allow scientists to ‘walk through’ underground formations and rock strata in their search for more hydrocarbons. Alternatively, the system can take feed from a visitor’s laptop. “This greatly assists the collaborative process of interpreting seismic data,” Dr Doug Schwebel, Exploration Director of Esso Australia, said “It means a large group of geoscientists can sit together to discuss sub-surface formations
while manipulating the images on screen. “By utilising the Internet and ‘virtual meeting’ programs, the group can even be extended to involve participants from overseas. “In the past, a group discussion would involve putting together a PowerPoint presentation to be displayed in a meeting room. This limited the data being looked at to pre-determined static displays. “Because we can now work with the live, online datasets, the discussions can be far more interactive and allow participants to respond in real time to ‘what-if’ questioning,” The quality of the projection system in Esso’s new visualisation centre allows the images to be displayed in daylight and, coupled with special headsets, in three dimensions for selected 3D-enabled applications. The 3D effects are similar to the 3D images at Imax theatres. The reservoir formation image comes right out of the screen and can be manipulated in any number of ways. “Anything we can do on our desktops can be done on this screen, plus we have the added advantage of the 3D visualization,” Dr Schwebel said. The visualisation centre has also proved to be an excellent training tool and has been used to run training sessions from Esso’s parent company in Houston. Esso is currently analysing the vast amounts of 3D seismic data collected in 2002 by it’s $55 million northern fields survey, the largest 3D seismic survey ever undertaken in Bass Strait. 8
A state-of-the-art visualisaton centre at the Melbourne headquarters of oil and gas giant, ExxonMobil, has placed Melbourne at the forefront of the global search for new petroleum resources.
That information is being looked at by the new geoscience group established in Melbourne. “We have assembled an outstanding team of experienced geoscientists who bring a mix of specialised expertise and extensive local knowledge to our quest for prospective new exploration acreage in this part of the world,” Dr Schwebel said. “Once we have completed our evaluation of a project, we hand it over to the various incountry geoscience teams for progression. “We are delighted that our global organisation has chosen Melbourne as the base for this group. “We have a wealth of talent here which, combined with our state-of-the-art technology, makes us an exceptional choice. “We are looking forward to widening our own knowledge of the geology of our region and participating in some exciting exploration activities.” F O R M O R E I N F O R M AT I O N C O N TA C T:
Anna Schulze Manager, Media Relations Esso Australia / Mobil Oil Australia Tel: 03 9270 3182 Mobile: 0408 532 589
GAS NEWS
Bream gas flows ashore Rapid growth in national natural gas demand and the deregulation of the gas industry has sparked a flurry of new developments. The $A200 million Bream gas field project in Bass Strait, including a new pipeline to bring the gas ashore, has dramatically improved the capacity and security of the southeast Australian gas supply network.
atural gas is flowing from Esso/BHP Billiton’s $A200 million Bream field gas pipeline in Bass Strait, providing a major new link in the improved security of supply for Victoria’s gas market.
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Commissioned in December, the Bream gas pipeline links the existing Bream A offshore platform with the gas processing facilities at Longford, in East Gippsland. The pipeline has been constructed by joint venture partners Esso Australia and BHP Billiton and is now the fourth independent gas pipeline in Bass Strait. The Bream field was the largest, undeveloped gas resource in Victoria. Since its development in 1988, the field has produced only crude oil, lacking the infrastructure to allow gas production. “The construction of the 51-kilometre pipeline (5km onshore and 46km offshore) has been an outstanding success in terms of safety and environmental management and heralds an important phase in the continuing development of Bass Strait gas,” Robert Olsen, chairman of Esso Australia, said. The 14-inch diameter pipeline can carry more than 200 million standard cubic feet of gas a day or 299 terajoules, equivalent to 35 per cent of Victoria’s daily average market demand. Modifications, including piping, instrumentation and structural work, were required at the Bream A offshore production platform to allow extraction of gas from the field.
Planning work on the Bream project began in April 2001 and pipeline construction commenced in December 2001. It involved over 450,000 work-hours and achieved a safety record of no lost-time injuries. On average, nearly 200 people (employees and contractors) worked on the project, with significantly more during the peak construction period last year. “Esso would like to sincerely thank and congratulate all of the employees and contractors who have been involved in the successful
Bream pipeline construction and we look forward to continuing to increase the lifespan, capacity, and capability of the Gippsland gas production facilities,” Mr Olsen said. “Sales are growing strongly and Gippsland gas from Bass Strait now supplies Victoria, NSW, Tasmania and, from 2004, will flow to South Australia,” he added. “With the opening of this new pipeline and the commencement of production from the Bream field, we have made the largest addition to the Victorian gas production system since 1981.” The new pipeline starts at the Bream A platform and travels undersea for 46 km before reaching the coast at Paradise Beach and connecting into an existing onshore gas pipeline to Longford. Victorian Minister for Energy Industries and Resources, Theo Theophanous said the Bream A project strengthened the state’s security of supply and reduced dependence on less-environmentally-friendly fuels. Esso/BHP Billiton’s proven gas reserves in Bass Strait today are roughly equal to the volume of gas produced over the last 30 years since the fields were originally discovered. Esso Australia has just completed the largest 3D seismic program ever undertaken in Bass Strait to seek future development opportunities. F O R M O R E I N F O R M AT I O N C O N TA C T:
Anna Schulze Manager, Media Relations Esso Australia / Mobil Oil Australia Tel: 03 9270 3182 Mobile: 0408 532 589
9
BROWN COAL
THIS RIVER IS A MOVER T
Hazelwood Power’s Southeast field brown coal mine is about to be replaced through the development of a new field at Hazelwood West. The new field will be in production by October.
he Morwell River, in Victoria’s Latrobe Valley, must be one of Australia’s most mobile rivers because it’s on the move again.
Winding its way through the vast brown coal fields of Gippsland, the river is about to undergo its fifth diversion as part of the $110 million project to develop the new Hazelwood West brown coal mine.
to overburden strip ratio of 3.8:1 compared with a higher ratio of 4.5:1 at the West Field mine, while the West Field coal seam extends down to 130 metres, compared with a thickness of only 90 metres at the Southeast Field mine.
Hazelwood Power, which operates the existing Southeast Field mine and the adjoining 1600 megawatt Hazelwood power station, has to open the new mine to replace the existing Southeast Field mine, which will reach its operating limits later this year.
But the new Hazelwood West Field offers straight mine faces up to 500 metres longer and would extend the life of the mine by another 30 years.
The project involves relocating a seven-kilometre stretch of the Morwell River.
The development of the new field is expected to continue for the next decade, but West field will reach full operational effectiveness by 2006.
Nearby, Yallourn Energy is also diverting a five-kilometre stretch of the river as part of its $500 million Maryvale mine development. Hazelwood Power is owned by a consortium comprising International Power Plc, Commonwealth Financial Services (Australia) and the Commonwealth Bank of Australia. International Power Plc was demerged from one of Britain’s leading electricity generators, National Power, in October 2000, and has a 91.9 percent share in Hazelwood Power. The Commonwealth Bank Group has an eight per cent share in the partnership. Hazelwood Power is currently extracting coal from the last remaining face at the Hazelwood Southeast Field mine and moving slowly back towards the power station. The company expects the present mine to reach its limit in October, by which time mining will have started in the new West Field. Development of Hazelwood West Field will be in two stages. The first involves the physical relocation of the coal mining operations from the existing mine. The dredges at the existing mine will walk progressively from the Southeast field to the new West Field, starting in October. Mining at Hazelwood West will then take over from the Southeast Field and is planned to continue for at least 30 years. The second phase of the planned field development involves major infrastructure alterations.
All earthworks and stripping of the new West Field is being done under contract by the Roche, Thiess, Linfox consortium operating a fleet of 40 trucks around the clock.
HAZELWOOD POWER HAS RECENTLY LODGED THE DETAILS OF THE RIVER RELOCATION WITH ENVIRONMENT AUSTRALIA AS A PRECURSOR TO CONDUCTING A FULL ENVIRONMENTAL EFFECTS STUDY INTO THE PROPOSAL.
These will require approvals for extensions to the mining permit boundaries and the physical relocation of barriers such as the Morwell River and Eelhole Creek, the Strzelecki Highway and Brodribb Road, which runs along the boundary. Hazelwood Power has recently lodged the details of the river relocation with Environment Australia as a precursor to conducting a full environmental effects study into the proposal. Operating costs at the new West Field mine are likely to be slightly higher than at the present mine. Overburden thickness is slightly higher, although the coal seam is much thicker. The existing Southeast Field mine has a coal 10
Worley Minerals & Metals has been awarded the engineering and design component for the new mine and the project, which also involves the relocation and redesign of the materials handling system, is expected to take five years to complete. Environmental planning and permitting for the project is being handled by Melbourne firm, NSR Environmental Consultants. The existing South-East Field mine has a surface area of three square kilometres, which is constantly hosed down in order to settle potentially explosive coal dust and inhibit oxidation which can cause spontaneous combustion of the coal. The water is pumped from reservoirs of artesian water below the surface. Five dredges operate at the coalface, extracting 19 million tonnes of brown coal each year. The coal is then carried along conveyor belts to the power station, which is Victoria’s second largest power generator. The power station itself requires massive volumes of water. It uses 160 million litres of cooling water supplied from an artificial lake, which is also used for boating and water sports. During the past few years, Hazelwood Power has committed to a major capital expenditure program to maximise operating efficiencies
BROWN COAL
The existing Southeast field mine, which feeds the 1,600 mw Hazelwood power station, will reach its operating limit in October.
public interest groups and official agencies.
and environmental performance, mainly through an $80 million upgrade / installation of new electrostatic precipitator plant.
Morwell, 148 km east of Melbourne and 80 metres above sea level, is the heart of the Latrobe Valley, which is Victoria’s energy centre.
While the brown coal mines occupy large areas, Hazelwood Power is also committed to rehabilitation of the land it uses. The company is directly involved in the rehabilitation of several large and significant areas close to the mine and is in the early stages of developing more wetlands in the surrounding region. It has consulted widely with the local community to find common ground between the research options and the public’s needs and expectations. All plans and designs are put before the company’s Environmental Review Committee, a group of specialists who contribute expert advice while representing their respective
A wide range of community, environmental, government and local groups are represented on the consultative group.
Dairying, timber and agriculture were the lifeblood of the region in the nineteenth century, until a prospector discovered brown coal as early as 1873.
ALL PLANS AND DESIGNS ARE PUT BEFORE THE COMPANY’S ENVIRONMENTAL REVIEW COMMITTEE, A GROUP OF SPECIALISTS WHO CONTRIBUTE EXPERT ADVICE WHILE REPRESENTING THEIR RESPECTIVE PUBLIC INTEREST GROUPS AND OFFICIAL AGENCIES.
The Great Morwell Coal Mine Company started mining and opened a briquette plant in 1889 but it closed in 1894. However, an open-cut mine re-opened in the area in 1916 and supplied the fuel for the State Electricity Commission’s (SEC) Yallourn power station, which opened in 1924, and for a briquette factory, which opened in the early 1920’s. Morwell’s brown coal also supplied Melbourne’s gas between 1956 and 1969. 11
F O R M O R E I N F O R M AT I O N C O N TA C T:
Richard Palmear Hazelwood Power Tel: (03) 9617 8300
REGULAR FEATURE
News Briefs OIL INDUSTRY GATHERS IN MELBOURNE Representatives of Australia’s national oil and gas industry will assemble in Melbourne in March for the annual Australian Petroleum Production and Exploration Industry conference to be held at the Melbourne Convention Centre Running from Monday March 24 until Wednesday March 26, the conference will bring together more than 1,000 of the industry’s leading executives, scientists, financiers and service industries. The conference kicks off with a tour of the Torquay Basin. The full-day tour, organised by Malcolm Wallace of the University of Melbourne on Saturday, March 22, will focus on the basin’s geological wonders. The conference starts with keynote addresses by the large and small ends of the Australian industry Ged Davies, vice president of Shell Global Business Environment, will deliver a global and national perspective of the industry while Dr Howard Brady AO, chief executive of Mosaic Oil NL, will talk about small explorers and examine why they are still relevant. A highlight of the conference will be the release of new exploration acreage. The acreage release session will focus on the 2003 release of petroleum exploration areas in Commonwealth waters and a seminar will
review their prospectivity and relevant government policy.
MINERAL SANDS CONFERENCE
Information will also be available regarding exploration in areas under state jurisdiction.
The Australian Journal of Mining will hold the 4th annual Global Mineral Sands Exploration and Investment Conference in Melbourne on March 24 and 25 at the Hilton on the Park hotel.
The conference concludes with a three-day Otway Basin adventure The trip departs Melbourne on Thursday, March 27 and returns to Melbourne during the early evening of Saturday, March 29. Participants will examine the structure and stratigraphy along the Otway coast, including examples of the late Tertiary deformation that led to trap formation, fluvial-type reservoir sands and source rock sequences in Early Cretaceous units. Outcrops will be visited at the world famous ‘Twelve Apostles’, looking offshore to the Minerva gas field. Contact APPEA for registration details.
STATS REVIEW The Department’s Minerals and Petroleum Statistical Review for 2001/2002 is now available on the department website www.nre.vic.gov.au/minpet The review provides an overview of Victoria’s extractive, minerals and petroleum industries and is regarded as the most comprehensive public database available for these sectors in Victoria. It includes data on production, exploration, expenditure, as well as licensing and safety performance.
The conference comes as Murray Basin Titanium plans to open its second Murray Basin mineral sands project near Ouyen in Victoria’s northwest and as the pace of development in the region increases. Major keynote speeches will be delivered by: • Mike Folwell, chief executive of Iluka Resources, a half owner of MBT. • James Nameny, president – sales division of Rio Tinto Iron and Titanium, who will give a global perspective on the industry, which has been through some tough times recently • Stuart Hall, general manager of planning and development at WMC Resources Ltd, will review the ‘Corridor Sands’ project in Mozambique. Recognised as one of the premier mineral sands industry conferences, this event is well timed to bring together the investment community and the producing, trading and consuming sectors to discuss the outlook for the year ahead.
MINERAL SANDS ACTION AGENDA A major new study is underway to assist Victoria to capitalise on the potentially worldclass mineral sands resources of the Murray Basin and strengthen Australia’s position in the world markets for titanium minerals and zirconium. While the Murray Basin extends over three states, Victoria, New South Wales and South Australia, Victoria is well placed to become the primary location for mineral separation facilities and other value-adding opportunities flowing from the development of the industry. To ensure maximum benefits flow to Victoria, the new study will determine what actions need to be taken to give the state the best chance of capitalizing on the mineral sands sector.
The unique geology of Victoria’s southwest coastline and the Otway Basin region will be studied by geologists attending the APPEA conference in March.
12
REGULAR FEATURE
News Briefs A Murray Basin Mineral Sands infrastructure planning study was completed under the Commonwealth’s Regional Minerals Program in July 2000. This study assessed development opportunities and identified the infrastructure needed in the recognised opportunity zones. Now, a new action plan is to be developed to determine the strategies and actions required to establish a sustainable mineral sands industry, including downstream processing, in Victoria. The aim is to maximise Victoria’s chances of becoming the primary centre for mineral sands processing. The scope of the project is to establish the current situation of: • Mineral deposits, mining and processing • Mineral sands commodity markets (including processed minerals) • Infrastructure • Murray Basin environmental markers • Regional community status • Skills analysis It will also evaluate the key industry growth drivers and strategic advantages of Victoria and identify the issues that need to be addressed to attract the industry and meet the sustainable development principles of social responsibility, environment protection and economic progress. This is designed to allow the development of strategies for the industry out to 2010.
CORE LIBRARY OPEN DAY Victoria’s minerals and petroleum core library will hold an open day on Thursday, March 27. The library, which is located within the Victorian Agriculture and Technology grounds at Werribee, will be open from 11am to 3pm. A BBQ lunch will be provided. Interested parties should contact Dee Ninis on 03 9412 5169 or Avi Olshina on 03 9412 5094. Operated by the Minerals and Petroleum Division of the Department of Primary Industries, the library contains approximately 18,000 samples collected over the last century from drillholes and mapping projects throughout Victoria.
The collection includes core, cuttings and other samples from groundwater drilling, petroleum and mineral exploration, geotechnical research and field mapping programs. New samples from current mineral and petroleum exploration programs are added to the collection as they are submitted or become available. Equipped with inspection and sampling facilities, the core library is used by industry, academia and government to help locate new mineral deposits, energy resources and for training future geoscience professionals. It provides data which is otherwise either unobtainable or can only be captured by expensive and time-consuming re-drilling. In some instances, the sample is irreplaceable, providing samples from areas that are now inaccessible.
MPI FLOAT A MAJOR SUCCESS MPI Mines Ltd, operator of the Stawell gold mine in northwestern Victoria, has made a major success in its share market entry, with shares trading at 48 cents each on their debut. MPI Mines raised $A7 million at 40 cents a share, attracting strong interest from investors. The float was timed well, offering the stock at a time when the gold price has risen strongly on political unrest in the Middle East. Applications for shares in MPI Mines Ltd’s initial public offering closed oversubscribed on 20 December, two weeks ahead of schedule and the lead manager, Paterson Ord Minnett, was forced to restrict share allocations. Managing Director, Brian Phillips, said he was pleased with the interest shown in the float. “We must now work to produce the right outcomes for our shareholders”, Mr Phillips said. “We have as our clear objectives the task of extending the operating life at Stawell and Black Swan, and developing Coolgardie to its full potential.” MPI is a diversified producer, operating one nickel mine and two gold mines. The company is undertaking gold exploration in Victoria and West Australia and nickel exploration in WA. The Stawell mine is currently producing approximately 90,000 ounces of gold a year. Operated by MPI since 1992, the mine has produced over 850,000 ounces of gold in ten years. 13
Victoria’s minerals and petroleum core library is one of the most comprehensive collections in Australia. The open-day at the Werribee facility will provide explorers with a chance to gain extra insights into the collection.
DEPT CHANGES There have been some major changes to State Government departments following the State elections. The Department of Primary Industries (DPI) and The Department of Sustainability and Environment (DSE) have replaced the former Department of Natural Resources and Environment (DNRE). The Energy and Minerals Division of DNRE is now the Minerals and Petroleum Division and part of the Department of Primary Industries (DPI) while the Energy Policy Group is now part of the Department of Infrastructure. DPI incorporates the divisions of Minerals and Petroleum, Agriculture and Fisheries. Theo Theophanus is the new Minister for Energy, Industries and Resources and the secretary of DPI is Chloe Munro, who was secretary of the former DNRE. The new Department of Sustainability and Environment with Professor Lyndsay Neilson as Secretary, incorporates Catchments and Water, Forest Services, Parks Flora and Fauna, Land Victoria and Greenhouse Policy Unit.
REGULAR FEATURE
Victoria’s LEGEND Gold field:
0.5 - 1.0 million oz
Gold field:
1.0 - 5.0 million oz
Gold field: >5.0 million oz - Values include production and reserves Brown coal resource: < 100 million tonnes Brown coal resource: > 100 million tonnes Base metals deposit - Resource / Reserve
14
REGULAR FEATURE
mineral, oil and gas resources Oil field
Cainozoic
Mineral sand resource - HM-heavy mineral; R-rutile; Z-zircon; I-Ilmenite
Gas field
Marine and continental sedimentary rocks Continental volcanic rocks Continental sedimentary rocks
Mesozoic
City
Continental and minor marine sedimentary rocks
Continental trachyte Granite and trachyte Continental and marine glacial sedimentary rocks Continental sedimentary and volcanic rocks Cauldron volcanic complexes Marine sedimentary rocks
Devonian
Rift and cauldron volcanic complexes Silurian-Devonian fault rocks Silurian to Mid. Devonian marine and minor continental sedimentary rocks Marine and continental rift sedimentary rocks Marine rift volcanics Marine and continental sedimentary rocks
Silurian Ord. Camb. Palaeozoic
15
Marine sedimentary rocks Marine sedimentary rocks Marine volcanic rocks Palaeozoic intrusives (granites and tonalites, minor diorite and gabbro) Fault Metamorphic overprint
LICENCE REVIEW
Mineral Licences
October/December 2002 EXPLORATION LICENCE APPLICATIONS
TITLE NO. EL4704 EL4707 EL4704 EL4706 EL4708 EL4705 EL4710 EL4709 EL4711 EL4712 EL4713 EL4718 EL4719 EL4714 EL4715 EL4716 EL4717 EL4720 EL4721 EL4722 EL4723 EL4724 EL4725 EL4726 EL4727 EL4728 EL4729 EL4730 EL4734 EL4731 EL4732 EL4733
STATUS APPLICATION APPLICATION CURRENT APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION 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 COLAC ST ARNAUD HEATHCOTE CASTLEMAINE CHARLTON BACCHUS MARSH CASTERTON CASTERTON TALLANGATTA BALLARAT BALLARAT NAGAMBIE NAGAMBIE BOGONG BENAMBRA WILLAURA OMEO RUPANYUP ST ARNAUD CASTLEMAINE NAGAMBIE BUFFALO BENDIGO CORRYONG CASTLEMAINE WOODEND CASTLEMAINE WILLAURA OUYEN BENDIGO OUYEN OUYEN
PRIMARY OWNER PURUS ENERGY LTD EROMANGA HYDROCARBONS NL AGD OPERATIONS PTY LTD EROMANGA HYDROCARBONS NL EROMANGA HYDROCARBONS NL EROMANGA HYDROCARBONS NL PURUS ENERGY LTD PURUS ENERGY LTD KENNETH LESLIE HOPPER RELIANCE MINING LTD RELIANCE MINING LTD SIERRA MINERALS LTD SIERRA MINERALS LTD MT WILLS GOLD MINES NL MT WILLS GOLD MINES NL MOUNT ISA MINES LTD MT WILLS GOLD MINES NL RANGE RIVER GOLD NL SIERRA MINERALS LTD SIERRA MINERALS LTD SIERRA MINERALS LTD DEAN G TURNBULL PROVIDENCE GOLD AND MINERALS PTY LTD DEAN G TURNBULL GOLD SEARCH VICTORIA PTY LTD MOUNT ISA MINES LTD GOLD SEARCH VICTORIA PTY LTD MPI GOLD PTY LTD BASIN MINERALS HOLDINGS PTY LTD GOLD SEARCH VICTORIA PTY LTD BASIN MINERALS HOLDINGS PTY LTD BASIN MINERALS HOLDINGS PTY LTD
EVENT DATE 03/10/2002 04/10/2002 04/10/2002 04/10/2002 04/10/2002 04/10/2002 09/10/2002 09/10/2002 17/10/2002 18/10/2002 18/10/2002 25/10/2002 25/10/2002 25/10/2002 25/10/2002 25/10/2002 28/10/2002 31/10/2002 01/11/2002 01/11/2002 04/11/2002 11/11/2002 14/11/2002 28/11/2002 10/12/2002 16/12/2002 19/12/2002 24/12/2002 27/12/2002 27/12/2002 27/12/2002 27/12/2002
AREA SIZE 456 GRATS 16 GRATS 3 GRATS 50 GRATS 70 GRATS 44 GRATS 59 GRATS 309 GRATS 79 GRATS 2 GRATS 2 GRATS 49 GRATS 18 GRATS 31 GRATS 71 GRATS 72 GRATS 1513 GRATS 99 GRATS 456 GRATS 429 GRATS 122 GRATS 405 GRATS 85 GRATS 1610 GRATS 105 GRATS 100 GRATS 336 GRATS 492 GRATS 15 GRATS 502 GRATS 11 GRATS 6 GRATS
EVENT DATE 04/10/2002 17/10/2002 17/10/2002 17/10/2002 17/10/2002 31/10/2002 31/10/2002 31/10/2002 31/10/2002 01/11/2002 14/11/2002 14/11/2002 27/11/2002 27/11/2002 27/11/2002
EXPIRY DATE 03/10/2007 16/10/2007 16/10/2007 16/10/2007 16/10/2007 30/10/2007 30/10/2007 30/10/2007 31/10/2007 31/10/2007 13/11/2007 13/11/2007 26/11/2007 26/11/2007 26/11/2007
EVENT DATE 03/10/2002 17/10/2002 14/11/2002 29/11/2002 12/12/2002
EXPIRY DATE 03/10/2002 17/10/2002 14/11/2002 29/11/2002 12/12/2002
EXPLORATION LICENCES GRANTED TITLE NO. EL4661 EL4629 EL4689 EL4540 EL4674 EL4680 EL4662 EL4663 EL4664 EL4498 EL4630 EL4634 EL4638 EL4700 EL4702
STATUS CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT CURRENT
EVENT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT GRANT
MAP BENDIGO ALEXANDRA TALLANGATTA PRINCETOWN CRESWICK LINDSAY STRATFORD STRATFORD BAIRNSDALE CORANGAMITE RUPANYUP ST ARNAUD BEAUFORT WEDDERBURN HORSHAM
TITLE NO EL4627 EL4597 EL4360 EL3972 EL4081
STATUS SURRENDERED SURRENDERED SURRENDERED EXPIRED SURRENDERED
MAP KANIVA LALBERT WANGARATTA MANSFIELD WENTWORTH
TITLE NO. MIN5382 MIN5383 MIN5384 MIN5385 MIN5386 MIN5387
STATUS CURRENT APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION
MAP SHEET DUNOLLY CASTLEMAINE OMEO OMEO CRESWICK BACCHUS MARSH
TITLE NO MIN5356 MIN5342 MIN5288 MIN5380 MIN5382
STATUS CURRENT CURRENT CURRENT CURRENT CURRENT
TITLE NO MIN5168 MIN5169 MIN5377 MIN5254 MIN4018 MIN4947 MIN4605 MIN4893 MIN5279 MIN5130 MIN5131 MIN5266 MIN4582
STATUS REFUSED REFUSED REFUSED SURRENDERED SURRENDERED SURRENDERED EXPIRED EXPIRED SURRENDERED EXPIRED EXPIRED EXPIRED EXPIRED
PRIMARY OWNER LACH DRUMMOND RESOURCES PTY LTD DUNCAN R MCLEAN ELGIN METALS NL IRONBARK MINERALSANDS PTY LTD SINCLAIR EXPLORATION PTY LTD SOUTHERN TITANIUM NL RIO TINTO EXPLORATION PTY LTD RIO TINTO EXPLORATION PTY LTD RIO TINTO EXPLORATION PTY LTD IRONBARK MINERALSANDS PTY LTD RANGE RIVER GOLD NL RANGE RIVER GOLD NL RANGE RIVER GOLD NL AURIONGOLD EXPLORATION LIMITED ILUKA RESOURCES LIMITED
EXPLORATION LICENCES SURRENDERED, CANCELLED OR EXPIRED PRIMARY OWNER FALCON MINERALS LTD PROBO MINING LTD RUTHERGLEN MINING PTY LTD TERROCK PTY LTD ILUKA MIDWEST LTD
MINING LICENCE APPLICATIONS PRIMARY OWNER RONALD J DOIDGE BRUCE ROBERT BROWN MINES OF STIRLING PTY LTD MINES OF STIRLING PTY LTD ANTHONY GEORGE FRASER GOLD SEARCH VICTORIA PTY LTD
EVENT DATE 03/10/2002 07/10/2002 07/11/2002 07/11/2002 11/11/2002 15/11/2002
AREA SIZE 3.9 HA 225.7 HA 3.4 HA 4.7 HA 4.6 HA 2.6 HA
MINING LICENCES GRANTED EVENT GRANT GRANT GRANT GRANT GRANT
MAP FOSTER BENDOC HOPETOUN HEATHCOTE DUNOLLY
PRIMARY OWNER TAMAS KAPITANY JOHN C SHIMMEN AND BRUCE W MCLENNAN TIMOTHY G CONWAY AND ZOE M CONWAY AGD OPERATIONS PTY LTD RONALD G DOIDGE
EVENT DATE 03/10/2002 01/11/2002 01/11/2002 27/11/2002 27/11/2002
EXPIRY DATE 02/10/2007 31/10/2007 31/10/2007 26/11/2007 26/11/2007
EVENT DATE 17/10/2002 17/10/2002 17/10/2002 14/11/2002 14/11/2002 14/11/2002 02/12/2002 03/12/2002 12/12/2002 17/12/2002 17/12/2002 17/12/2002 29/12/2002
EXPIRY DATE 17/10/2002 17/10/2002 17/10/2002 14/11/2002 14/11/2002 14/11/2002 02/12/2002 03/12/2002 12/12/2002 17/12/2002 17/12/2002 17/12/2002 29/12/2002
MINING LICENCES SURRENDERED, CANCELLED OR EXPIRED MAP MATLOCK MATLOCK DUNOLLY NHILL MITIAMO DUNOLLY NHILL NOWINGI ALBURY HEATHCOTE HEATHCOTE HEATHCOTE MILDURA
PRIMARY OWNER DENIS J RENOWDEN DENIS J RENOWDEN BRENDAN WILLIAM SMITH HAROLD T FLAVEL NORTHERN GYPSUM CO PTY LTD DIAMETRIC RESOURCES (AUSTRALIA) PTY LTD HAROLD T FLAVEL LARMON PTY LTD TAMAS KAPITANY FLITEGOLD PTY LTD FLITEGOLD PTY LTD FLITEGOLD PTY LTD ELIZABETH MCNABB
ABBREVIATIONS: SURR - SURRENDERED, CANC - CANCELLATION CAN/AM - CANCELLED/AMALGAMATED
16
MBT MOVES BEYOND WEMEN V Murray Basin Titanium will move its existing Wemen project dredge to a new location near Ouyen when it develops the Galileo mineral sands mine.
ictoria’s leading position in the development of the vast Murray Basin mineral sands province has taken a major stride with Murray Basin Titanium Pty Ltd preparing to develop its second major mine project.
The operator of the region’s first mineral sand mine, at Wemen near Robinvale, has begun preliminary studies for an environmental effects study on a new mining project near Ouyen. The area contains additional new mineral sand deposits to be mined after the depletion of the Wemen project, Victoria’s first titanium minerals project. MBT’s strategy is to develop two or three mineral sands mines within the Murray Basin. Centred on freehold land 15 kilometres northeast of Ouyen, the new mining project will primarily focus on two parallel mineral sands deposits, Galileo and Mercury. These are aligned in a north-west to south-east direction and vary between 9km and 13km in length. Mercury contains higher grade mineral than the initial project at Wemen and is larger, while Galileo is smaller but also contains better grade mineral. Two other strands, Apollo and Titan, have also been found in the area but, at this stage, appear to be sub-economic.
Construction of the new mine is scheduled to start in 2004 with mining anticipated in 2005. Mercury and Galileo are expected to produce at a rate of 170,000 tonnes of concentrate a year for ten years with mining expected to begin immediately operations at Wemen, which produces 70,000 tonnes of concentrate a year, are completed. Heavy mineral concentrate produced would be separated at the existing separation plant located at Thurla, 20 kilometres southwest of Mildura. The new mine will utilise the existing bucketwheel dredge used at Wemen. Overburden of 22 metres in the area is slightly thicker than at Wemen with the ground conditions slightly more undulating. The overburden will be removed using bulldozers, a feeder-breaker and a conveyor/stacker system. 17
CENTRED ON FREEHOLD LAND 15 KILOMETRES NORTH-EAST OF OUYEN, THE NEW MINING PROJECT WILL PRIMARILY FOCUS ON THREE PARALLEL MINERAL SANDS DEPOSITS, GALILEO, MERCURY AND TITAN. It will then be either placed in mined-out pits over the tailings; stockpiled temporarily or used in infrastructure construction such as in bund walls. The ore will be mined using the existing bucketwheel dredge feeding a floating concentrator. Some ore may also be dry mined with earthmoving equipment feeding a unit that will slurry the ore before it is pumped to a land-based concentrator. The ore bodies to be dredge-mined are below the existing groundwater table. Within the concentrator, separation of heavy mineral from the ore will take place by passing
MINERAL SANDS
Mineral sands mining in Victoria has paved the way for a broader series of developments throughout the Murray Basin, which spans a vast area of Victoria, NSW and South Australia.
the slurry over successive stages of spirals, to separate the light particles from the heavy particles. No size reduction will be carried out. The heavy minerals separated in the concentrator will be stockpiled using a cyclone dewatering tower and transported to the separation plant by truck. Tailings from the concentrator will then be pumped back into the mined areas, where water will be recovered from the slurry and recycled. The liberated clay will be concentrated in a thickener and pumped into solar evaporation dams or returned immediately to the mine path. After the tailings area has been backfilled to approximate the pre-mining topography, it will be contoured using bulldozers or other equipment as appropriate. Topsoil will then be respread. Revegetation of the restored landscape will be undertaken using a range of techniques to return the land to its pre-mining use, which is predominantly dryland agriculture; cereal cropping and grazing. Rehabilitation will be carried out progressively as mining advances. Vegetated areas, including road reserves, will be re-established using a combination of techniques such as seeding and planting of tubestock. Integral to the mining operations will be activities to manage any potential impacts on soil, water and air.
REVEGETATION OF THE RESTORED LANDSCAPE WILL BE UNDERTAKEN USING A RANGE OF TECHNIQUES TO RETURN THE LAND TO ITS PRE-MINING USE, WHICH IS PREDOMINANTLY DRYLAND AGRICULTURE; CEREAL CROPPING AND GRAZING.
Management of dust will include restricting areas cleared to a practical minimum, stabilising of stockpiles, prompt rehabilitation, use of a water cart on trafficked areas and use of brush and fencing to act as windbreaks.
like the Black-eared Miner, Malleefowl, and the Regent Parrot.
Sensitive to flora and fauna impacts, Murray Basin Titanium is already conducting extensive studies in the area.
The Black-eared Miner is recognised as endangered nationally, while the other species are recognised as vulnerable nationally and all are listed under the Environmental Protection and Biodiversity Conservation (EPBC) Act.
The nationally endangered Regent Parrot uses the native vegetation in the general area of the proposed new mine for flight corridors. MBT, Iluka Resources, and the Department of Primary Industries have already held discussions regarding expansion of MBT’s existing Regent Parrot study being conducted at Wemen. The Ouyen project is located southwest of the Annuello Flora and Fauna Reserve which is linked to the eastern side of the MurraySunset National Park. The Annuello reserve is significant because it supports threatened animal and bird species
The reserve also contains habitat for the Redlored Whistler, Mallee Emu-Wren and Eastern Long-eared Bat, all of which have been recorded nearby.
A revegetation program initiated in the late 1980’s established a vegetated corridor between the Annuello reserve and MurraySunset National Park to the west. However, the new mining operations will not take place within the Annuello reserve or the vegetated corridor and will only occur, at the closest, within seven kilometres of the Annuello corridor. Around 16 hectares of Mallee tall-shrublands, which occur within the project area, could be affected by the mine. 18
However, these vegetated areas are located in sections of roadside corridors, as small farm remnants and, in one case, as part of a small (25ha) Bushland Reserve. Few of the vegetated areas would potentially be suited to the occurrence of Swainsona Pyrophila, listed as rare or threatened, which tends to inhabit sandy dunefield areas with an understorey of Porcupine Grass. Studies have shown that the amount of potentially suitable native vegetation present in the project area is probably less than 10 hectares. In the event that Swainsona Pyrophila may be present, it is considered extremely likely that it can be regenerated naturally when the seed contained in stored topsoil is replaced during the rehabilitation process. The new mine is expected to utilise highly saline groundwater for dredging and mineral separation processes, although the company will also use its water rights via the MurrayMallee pipeline. The company says water requirements will be less than at Wemen because of the higher local water table. A decision on an environment effects study is expected from the Victorian Government shortly. F O R M O R E I N F O R M AT I O N C O N TA C T:
Graeme Kininmonth, Environmental Manager Murray Basin Titanium Pty Ltd PO Box 4032 Mildura Victoria 3502 Tel: (03) 5023 2911
GAS NEWS
Coal bed methane project underway rilling on Victoria’s first brown coalbed methane pilot production project has been completed by Eastern Star Gas Ltd with the company hoping to quickly prove the viability of producing methane from Victoria’s vast brown coal reserves.
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THE AIM OF THE PROJECT IS TO TEST THE VIABILITY OF NATURAL GAS PRODUCTION FROM THE EXTENSIVE BROWN COALS THAT OCCUR AT SHALLOW DEPTHS IN VICTORIA.
Drilling of the five-well pilot project at the Oak Park site, 35 kms west of Melbourne near Bacchus Marsh, was suspended over Christmas and New Year but resumed early in January.
deep and produce gas at between 50 and 350,000 cubic feet a day (Mcfd), averaging 200 Mcfd per well.
The pilot project involved drilling five wells into the Maddingly brown coal seam, with four wells 300 metres apart surrounding a central well. The Oak Park pilot project is 19 kilometres south of Bacchus Marsh and lies close to existing gas pipelines. Coal in the target Maddingly seam is about 17 metres thick from a depth of approximately 90 metres beneath the surface. The aim of the project is to test the viability of natural gas production from the extensive brown coals that occur at shallow depths in Victoria. Eastern Star Gas holds three extensive exploration licence areas, EL 4507, EL 4392, and EL 4510. After drilling, the wells will be dewatered, using submersible electric pumps, for a sixmonth trial production period. Pump testing of each of the five wells over several months will be necessary to determine whether the wells are capable of sustained gas production at commercially viable rates.
Brown coal is mined at both Anglesea and Bacchus Marsh in the Melbourne Trough area where the coal occurs close to the surface. Eastern Star Gas managing director, Denis Morton, said that the most active, shallow gas exploration play in the USA over recent years had been coalbed methane exploration. That effort had resulted in substantial production, largely from brown coal deposits in the Powder River Basin. “The reason for the success of this play is related to low-level finding and development costs, combined with proximity to gas pipeline infrastructure,” Mr Morton said. “Gas production wells in the Powder River Basin are commonly only 100-250 metres
The Melbourne Trough area covered by the Eastern Star Gas exploration licences EL 4057 and EL 4392 contains Australia’s second largest brown coal deposit, with an estimated 10 to 12 billion tonnes of coal in a single seam (the Maddingly seam). Based on an analogy with the productive Powder River Basin, in Montana and Wyoming, USA, the company says the gas resource potential of the target section within EL 4507 ranges as high as 500 petajoules. Victoria’s first coal seam methane project, near Bacchus Marsh, is hoping to repeat the successes of similar projects in Queensland and NSW where gas from black coal seams emerging as an important part of the broader natural gas market.
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“The Victorian licences appear to contain the same essential ingredients and the interests in these areas have been acquired with the goal of duplicating the spectacular success that has been experienced in the Powder River Basin, where drilling has increased five fold over the past three years.” The company has reported that, although only traces of methane have been recovered from the cored coal seam intervals, in the wells drilled to date, the capacity of the coals to produce significant methane remains untested until the seams can be locally dewatered by pumping. F O R M O R E I N F O R M AT I O N C O N TA C T:
Dennis Morton Managing director Tel: (02) 9251 5599
EXPLORATION
Essential set for big year Left: The Port Fairy 1 well, drilled last year, could become Victoria’s first onshore oil production well. Essential Petroleum drilling engineer, Wally Westman, pictured relieving gas pressure from the well, hopes the well will flow oil to the surface once water in the well bore is removed.
ictorian exploration junior, Essential Petroleum Resources, is set for its busiest year with several exploration wells and a host of other activities aimed at proving the oil and gas potential of the Otway Basin.
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Now in strong financial shape, following the successful conversion of the company’s share options, Essential’s first task is the drilling of the Koroit West-1 well, a follow up to its successful Port Fairy-1 wildcat.. This will be followed by the drilling of Banganna-1 and the workover of Port Fairy-1 to try and stimulate the Otway Basin’s first commercial oil flow. Late in 2002, Essential raised $4.7 million through the conversion of options issued at the time of the company’s initial stock exchange listing. The conversion, underwritten by Intersuisse Corporate Pty Ltd, succeeded in attracting about 70 per cent of the company’s original option holders and lifted the total number of shares on issue from 68 million to 91 million. Essential’s market capitalisation has also increased, up from about $13 million to more than $21 million. Essential managing director, John Remfry, said the share issue boosted the company’s cash reserves to almost $7 million, all of which is destined to be spent in a widening spread of exploration activity in the onshore and offshore Otway Basin. Essential’s exploration program for 2003 started in early January with the Koroit West1 well. The well was a follow up to the company’s Port Fairy-1 oil and gas discovery, about 10 kilometres to the south, and was drilled only to a depth of about 800 metres. Essential Petroleum has a 33.9% interest in the well and acted as operator on behalf of its joint venture partners Origin Energy (50.51%) and Lakes Oil (15.59%) The Banganna 1 well was due to be spudded in the second half of January to test the Pretty Hill petroleum system, again in partnership with Origin Energy. Essential’s high level of activity will continue during February when a specialised rig begins a workover of the Port Fairy 1 well. The well will be recompleted to allow production testing. Mr Remfry said if the program was successful, a second well on the Port Fairy structure would be considered. He added that
Below: Essential Petroleum managing director, John Remfry at the Koroit West 1 well.
ESSENTIAL’S HIGH LEVEL OF ACTIVITY WILL CONTINUE DURING FEBRUARY WHEN A SPECIALISED RIG BEGINS A WORKOVER OF THE PORT FAIRY 1 WELL.
Essential’s 750-kilometre offshore seismic survey, completed last December, had been highly successful. “The survey was conducted to delineate and refine oil and gas prospects that have already been identified in our offshore permit area VIC/P46 from reprocessing of old seismic data,” he said.
VIC/P46 offshore permit to Mittwell Energy Resources, an Australian subsidiary of Mitsui Corporation of Japan and a well is being planned. Offshore work in conjunction with Mittwell Energy will target gas and oil plays in the Waarre formation similar to recent discoveries at Thylacine (Origin/Woodside), Geographe (Origin/Woodside/Cal Energy) and Casino (Strike Oil/Santos), about 150 kilometres east of the Essential permits. Mr Remfry said the company was also working on detailed geological and geophysical studies in PEL72 in South Australia in 2003 along with a seismic survey in its 100% owned onshore permit PEP151, followed by an exploration well later this year. In Victoria, geological and geophysical studies in offshore permit VIC/P50, followed by 1000 kilometres of offshore seismic survey, is planned.
“The survey has incorporated new technologies and techniques, including amplitude versus offset analysis, which will provide valuable additional information about the presence of hydrocarbons in the structures we have identified.” Essential has farmed out a 32.5% stake in its 20
F O R M O R E I N F O R M AT I O N C O N TA C T:
John Remfry, Managing director Tel: (03) 9699 3009 Email: [email protected]
VIMP DATA
3D look at Valley’s coal resource A
new three-dimensional picture of the vast brown coal resources in the Latrobe Valley will be released at the VIMP data launch in May.
Data from almost eight thousand bore holes have been used to build a digital threedimensional model showing the distribution and quality of the brown coal in a 1100 square kilometre area between Moe and Rosedale, including the State’s vital electricity generating resources. The model facilitates the matching of coal to development opportunities. It also captures and archives 90 years of knowledge from the former State Electricity Commission of Victoria (SECV) and other souces that, until now, was accessible only as paper records. The model has applications in resource utilisation, land-use planning and assessments of groundwater and subsidence. Rooves and floors have been created for the sixteen thickest brown coal seams or splits. These were interpolated from bore intersections on a 200m grid to give a regional interpretation of the coal geology. The seams in the model can be sliced along user-specified planes to produce sections and these compare favourably with sections last drawn by SECV geologists in the 1980s. The sixteen most important coal quality parameters, including moisture and ash, have been incorporated into a block model. The 160 x 160 x 12m blocks can be queried to show single or combined parameters like Garner’s fouling index that affect brown coal utilisation. An in-situ resource of 129,000 million tonnes of brown coal has been calculated using the model.
This includes an economic resource of 53,000 million tonnes. The information is being distributed in three packages, each priced at $100. The basic package gives an overview of the coal resource and will be useful for coal explorers and land-use planners. It contains the borehole database and GIS layers for the main coal seam rooves, floors and isopachs (both ArcView and MapInfo format). The other, more sophisticated, packages contain three-dimensional surface and block models of the coal resource in SURPAC and MINESCAPE formats and will assist coal explorers and miners with coal utilisation planning.
Above: 3D image of the model area incorporating the surface Landsat image, roof of M1B coal seam and top of basement. Left: Sections through the model showing the variation in moisture content of the coal seams.
It is anticipated that users of the MINESCAPE and SURPAC packages would also require the BASIC package. The project was funded by the Victorian Department of Innovation, Industry and Regional Development as an outcome of the Latrobe Valley Ministerial Taskforce. Modelling was undertaken by GHD Geo-Eng for the Department of Primary Industries. Yallourn Energy Ltd, Hazelwood Power and Loy Yang Power Ltd gave permission to use their mine models and assisted with project planning. Although the model covers the operating mines at Yallourn, Hazelwood and Loy Yang; the coal quality information has been generalised and bores removed from the model in these areas. FOR MORE INFORMATION AND PRODUCTS CONTACT:
Mineral and Petroleum Business Centre Level 8, 240 Victoria Parade East Melbourne, Victoria, 3002 Tel (03) 9412 5103 Fax (03) 9412 4713 Email: [email protected]
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VIMP DATA
VIMP data release the best yet A NEW 3D PICTURE OF THE VAST COAL RESOURCES IN THE LATROBE VALLEY WILL ALSO BE AVAILABLE IN A DIGITAL 3D MODEL SHOWING THE DISTRIBUTION AND QUALITY OF THE THICKEST BROWN COAL SEAMS FROM MOE TO ROSEDALE. ‘ground calibrated’ and will be available for viewing. The volume of salt store and depth to basement can be estimated with improved accuracy with the reprocessed data. Thirteen new GIS CDs covering the state will also be available. These contain the latest geoscientific data in MapInfo and ArcView GIS format as well as surface geochemistry, drillhole and mineral occurrence databases. A new 3D picture of the vast coal resources in the Latrobe Valley will also be available in a digital 3D model showing the distribution and quality of the thickest brown coal seams from Moe to Rosedale.
he next package of VIMP data to be released in May promises to be the best yet. A wide range of geoscientific products, including geology and regolith maps and reports, geophysical data, 3D models, GIS CDs and digital open file exploration data will be showcased at the 15th Victorian Initiative for Minerals and Petroleum (VIMP) data release and seminar on 26 May.
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The results of new geological mapping on the Castlemaine 1:100,000 mapsheet area in the central goldfields will be provided in four new 1:50,000 scale geological maps and a 1:100,000 scale geophysical interpretation map with accompanying report. They provide new insights into the geology and controls on mineralisation in the major Castlemaine, Maldon and Daylesford goldfields, which together have produced about 10 million ounces of gold. To further help target exploration work in key goldfield areas, regolith-landform maps and reports for the Ballarat-Creswick (1:50,000 scale), Bendigo (1:100,000 scale) and Ararat (1:100,000 map only) areas will also be released. The major regolith material has been defined in these areas and placed in a landscape context, with additional work on regolith geo-
The model will provide seamless information on coal geology and resources that will assist with coal utilisation and land-use planning. Open file Exploration Licence reports will be more accessible with the release of digitised reports on CD.
Top: Total magnetic intensity image of Victoria. Data sources: Geological Survey of Victoria, Geoscience Australia and Company Airborne Surveys. Lower: Fieldwork by GSV staff is an important part of the VIMP program.
chemistry in the Ballarat-Creswick area. New geophysical products that will be released include: • an updated statewide magnetic grid which includes reprocessed data stitched together from numerous surveys to create a seamless image of Victoria, and • an updated gravity grid which includes a detailed traverse across the Bendigo goldfield. The Honeysuckle Creek TEMPEST survey near Benalla has been reprocessed and 22
Digital tabular data and scanned reports for several hundred licences dating back to 1980 will be available in a set of CDs at minimal cost. The half-day VIMP seminar will be followed by a field trip to key locations highlighting the geology of the Castlemaine, Maldon and Daylesford goldfields and the regolith of the Ballarat–Creswick area. GSV geologists will escort the excursion, explaining the results of their mapping work in the field. F O R M O R E I N F O R M AT I O N C O N TA C T:
Phil Roberts, Manager Geological Survey of Victoria, Tel. 03 9412 5035
MAGNESIUM
Latrobe Magnesium wins grant atrobe Magnesium Ltd has been granted $1.4 million to help finance a bankable feasibility study into its project to produce magnesium from the fly ash deposits of the Hazelwood power station, near Morwell in the Latrobe Valley.
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The grant is from the Commonwealth Government’s Sustainable Regions Fund. Latrobe Magnesium has to match the grant on a dollar for dollar basis while the Victorian Government is considering an application for matching funding. Magnesium production in the Latrobe Valley could be a major job creator for the region. In fact, the magnesium project and other environmentally sensitive projects may turn the Latrobe Valley into a new industrial boom area based around the development of what are being described as ‘industrial ecology businesses’. The concept involves the recycling of power generation, mining and other industrial waste into new products. Industrial ecology involves a major step beyond the now common practices of recycling paper and glass to make new paper and glass. “Industrial ecology tries to transform waste into value-added products,” says Dr John Rankin, of CSIRO Minerals. “The analogy is natural ecology where there is no such thing as waste. In ecology, everything gets used by every organism and recycled back so it becomes self-sustaining. “If you apply that to industry, you get the same effect.” Formerly known as Rambora Technologies, Latrobe Magnesium is hoping its feasibility
study will be the forerunner of a major new light metals industry for Victoria. The company is studying the potential for a $800m magnesium plant to produce up to 100,000 tonnes of magnesium metal a year. Victoria has already won a position in the global light metals industry as one of the world’s major producers of low-cost aluminium and is also poised to become a major player in the titanium industry through the birth of the Murray Basin mineral sands industry. To fund the two-year feasibility study, Latrobe Magnesium plans to raise up to $20 million through a rights issue. Latrobe Magnesium managing director, Chris Sylvester told Discovery that the company was still examining the best option for the rights issue. Global demand for magnesium is steady at just under 500,000 tones a year with modest growth. The magnesium industry hopes for the 100kg car, ie: that all cars will use 100kg of magnesium, would lead to a significant growth in demand to 5 million tonnes per year. However, the automobile industry has not yet moved to this level and is keeping its options open.
Latrobe Magnesium managing director, Chris Sylvester
Latrobe Magnesium (through its whollyowned subsidiary, Magnesium Investments)
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Magnesium-rich fly ash deposits surrounding the 1600 MW Hazelwood power station could form the basis of Victoria’s first magnesium metal smelting project.
has an option to license Alcan International Ltd magnesium production technology for the planned Latrobe Valley facility, to reduce production costs. The licence gives the company access to Alcan’s new dehydration technology which Latrobe Magnesium says it hopes will help it to produce up to 100,000 tonnes a year of high-quality magnesium metal for the lowest capital costs and lowest production costs in the world. Latrobe Magnesium is aiming to reduce its magnesium production costs to $0.75 cents a pound, a cost far below the normal cost of extracting magnesium metal from magnesite ore. A novel feature of the project is its proposed use of fly ash, a by-product of brown coal combustion, which has a magnesium content of up to 12 per cent and is thus a potentially economic source of magnesium as it avoids the costs of mining and ore treatment. Mr Sylvester said,” We don't mine, we don't crush, we have no large ore treatment costs because ash can be pumped in. We will use all the fly ash of the past, present and future.” The Latrobe Magnesium project is based on five
MAGNESIUM
Magnesium metal is looming as Australia’s next major smelting industry. Lighter and stronger than aluminium, it could win important new markets in automotive and aeronautical applications. The Latrobe Valley’s fly ash deposits could be an important raw material for the industry.
million tonnes of fly ash deposits which has accumulated over many years around the Hazelwood power station. The plant produces an extra 200,000 tonnes each year. Magnesium extraction from the fly ash resource involves several key steps. Initially fly ash material is subjected to a straightforward acid leach process to separate the magnesium. The fine particle size of the ash material helps accelerate the leaching process. The solution containing the magnesium, which occurs as an oxide, is then dehydrated in the crucial part of the production process, which is yet to be commercially proven. Once dried, the magnesium chloride powder will be fed into a patented Alcan electrolytic cell for reduction into magnesium metal. The Alcan dehydration process has yet to be proved as a commercial concept and Latrobe Magnesium managing director, Rodney Foster says that the company plans to spend $2.77 million to commercialise the process. A pilot dehydration plant would be built in the second year of the study on the site of the HRL Ltd research facility near Morwell. Mr Sylvester says the plant is a crucial part of the feasibility study and has foreshadowed raising additional capital to fund the process. The waste product of the fly ash material, after the magnesium has been extracted, is also expected to become a useful product. Mr Sylvester said laboratory tests revealed that it could be used to produce high-quality bricks for the construction industry. Environmentally the Latrobe Magnesium concept also has carbon dioxide reduction poten-
tial by capturing some of the carbon dioxide emissions from the power station for transformation into calcium carbonate to be sold to paper manufacturers as whitener. However, the Latrobe project faces considerable competition for a place in the global magnesium market with a number of other significant Australian magnesium projects vying for investor dollars. In Queensland, Australian Magnesium is building a plant at Gladstone while in South Australia, Magnesium International is close to committing to the development of the SAMAG project. Another project, in NSW, is aiming to rely on its environmental credentials as well by utilizing high magnesium content tailings from the former asbestos mine at Woodsreef. Yet another concept in Western Australia plans to utilize magnesium in the brines associated with salt production. Magnesium and its commercial prospects in
LATROBE MAGNESIUM IS AIMING TO REDUCE ITS MAGNESIUM PRODUCTION COSTS TO $0.75 CENTS A POUND, A COST FAR BELOW THE NORMAL LEVEL. Australia were high on the agenda at last year’s Mining 2002 conference. The chairman of Australian Magnesium Corp, Dr Roland Williams, told delegates that light metals had a big future in Australia. One of the main reasons, he said, was political stability, underlining that the terrorist attacks in the US and in Bali had emphasised the political risk element of making major investments such as in magnesium plants. A former Rio Tinto senior executive and mining industry consultant, Dr Ian Gould, said that all the light metals, aluminium, magnesium and titanium were already or would become major industries for Australia. But he added that while Australia had been a world leader at the upstream mining end of the minerals and energy industries for many years, Australia’s industrial future depended on a greater move downstream into the mineral processing and manufacturing end of the industry. F O R M O R E I N F O R M AT I O N C O N TA C T:
Chris Sylvester Chief Executive, Latrobe Magnesium Tel: (02) 9940 3707 Mobile: 0411 077 034 Fax: (02) 9940 3708 Email: [email protected]
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EXPLORATION
Newcrest drills the Basin old mining major, Newcrest Mining Ltd, has started a drilling program in the Murray Basin region of northwestern Victoria seeking substantial new copper and gold deposits.
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Using the latest interpretations of the regional geology, Newcrest is seeking repetitions of the similar geology to that which hosts the massive North Parkes and Cadia copper-gold porphyry-style ore bodies being mined in NSW. Newcrest is also attracted to the region’s potential for major gold and base metal deposits because of the area’s volcanic rocks which bear striking similarities to the mineral-rich Mt Read Volcanics on Tasmania’s west coast and which host the Henty, Mt Lyell, Rosebery and Hellyer base metal and gold deposits. Newcrest’s Executive General Manager of Exploration Dan Wood, told Discovery that the company was operating in two areas, one near Horsham and the other south of the Grampians known as the Stavely area. Work in the Stavely area, which lies west of Lake Bolac and south of Ararat near Glenthompson, is focussed on a prospect named Thursday’s Gossan, a large, underexplored copper anomaly. Discovered by early generations of mineral explorers, starting with Western Mining, Thursday’s Gossan lies on the Mt Stavely Volcanic Belt which stretches for over 50km south of the Grampians and lies mostly buried under 40 to 100 metres of younger sediments. Newcrest has acquired the Stavely ground from New Challenge Resources Pty Ltd, run by respected Victorian geologist, Peter Legge, a former exploration geologist with WMC and North Ltd. Mr. Legge told Discovery that WMC had done some broad-scale exploration over the area in the 1970s but, while discovering copper, lead and zinc traces, left the area as unprospective. US company Pennzoil followed up the WMC work in the 1980s, recovering a number of copper, lead and zinc bearing rocks under the shallow cover material. The Geological Survey of Victoria then mapped the region and discovered the similarities between the Stavely volcanics and the Mt Read Volcanics in Tasmania. Further similarities between the North Parkes region porphyry systems were also noted, exciting renewed exploration interest in the area. Newcrest plans to start drilling the area in late February.
Near Horsham, Newcrest has entered a joint venture with Austpac Resources, which holds much of the region under exploration licence seeking mineral sands deposits. This work could involve up to 100 air core and diamond drill holes to drill through the veneer of recently deposited sands and penetrate and sample the basement lithologies.
Australia’s biggest independent gold miner, Newcrest Mining, is exploring the Murray Basin for potentially large copper/gold orebodies located below the more recent heavy mineral bearing sediments. Drilling has already begun in the region.
indicated by regional and detailed aeromagnetic surveys. Altered volcanics were encountered in several holes drilled earlier last year in the search for coarse-grained heavy minerals. Austpac says these volcanics have the potential to host large porphyry-style gold-copper deposits. The exploration program is the first stage commitment by Newcrest under the Horsham joint venture which, if successful, requires Newcrest to sole fund all operations through to a decision to mine.
Drilling started in late November on the western portion of exploration licence 4521 at Horsham. The drilling program, which is being managed by Newcrest, continued into January with initial results due in February. The exploration target comprises gold and copper mineralisation within intrusive and extrusive volcanic rocks, whose distribution is 25
If the program continues to its planned conclusion, Austpac will retain a 10 per cent contributing interest in any resulting mine, or may elect to revert to a two per cent net smelter return royalty on production.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Mike Turbott Managing Director, Austpac Resources NL Tel: (02) 9221 3211
RESEARCH
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DEVELOPMENT
R&D boost for mining industries he Commonwealth Government has announced a $68.5 million boost for research and development programs focussed on Australia’s mining and energy industries.
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The funding is being provided through the national Cooperative Research Centres (CRC) program which is designed to bring together universities, research and government organisations, and industry in a co operative R&D effort to help turn Australian ideas into practical outcomes. The new funding, spread across four CRCs, includes:
• A new CRC for Sustainable Resource Processing ($18.8m) which is aimed at eliminating waste and emissions from the minerals-processing cycle. • A mining and energy sector CRC ($27m). This centre will expand on the research and development by the current CRC for Mining Technology and Equipment, to fur-
ther consolidate Australia’s position as a world leader in the development and construction of mining equipment. • A CRC for Greenhouse Gas Technologies ($21.8m) which will work on ways to economically capture carbon dioxide (CO2) and store it underground, potentially offering industry new options for reducing CO2
THE NEWLY CREATED CRC FOR SUSTAINABLE RESOURCE PROCESSING, WHICH WILL BE BASED IN VICTORIA, AIMS TO HARNESS THE PROVEN RESEARCH AND DEVELOPMENT TALENT IN AUSTRALIA’S WORLD-CLASS RESEARCH CENTERS.
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RESEARCH
emissions. This CRC has evolved from the existing, but more general, Australian Petroleum CRC • The AJ Parker CRC for Hydrometallurgy ($0.9m) will receive supplementary funding to develop new technology transfer initiatives in the extraction of minerals. Victoria will play a key role in the CRC for Greenhouse Gas Technologies. The centre will study ways of controlling and capturing CO2 emissions and dovetails with the Government’s objective of reducing greenhouse gas emissions and maintaining Australia’s economic growth. The program will study, specifically, means of capturing CO2 and storing it underground, a process sometimes known as geosequestration. The CRC will develop new technologies to capture CO2, identify geological sites suitable for injecting the gas into the subsurface and carry out a demonstration project to store up to one million tonnes of CO2. It will also develop ways of using carbon dioxide to improve petroleum production or to produce useful minerals and undertake a regional initiative to examine how a range of industries can work together using geological sequestration to jointly decrease their emissions. Much of the research will be based in Victoria and the Centre will work closely with some of the world’s leading research laboratories in the USA, Canada, Japan, UK and The Netherlands. The newly created CRC for Sustainable Resource Processing, which will be based in Victoria, aims to harness the proven research and development talent in Australia’s worldclass research centers. It will create a multi-disciplinary, innovative team covering the value chain from mine site to industrial minerals and metals. The CRC will find economically viable ways of eliminating waste and emissions by lifting the eco-efficiency of existing operations, capturing regional synergies in resource processing-intense areas and streamlining complex metallurgical supply chains. Left: Australia’s mining industry has already received a major boost through the work of existing Cooperative Research Centres, including the design of the innovative dig and dump dragline (pictured) which has revolutionised open-pit mining.
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DEVELOPMENT
The role of CRC’s CRC’s role Cooperative Research Centres (CRCs) bring together researchers from universities, CSIRO and other government laboratories and private industry in long-term research and development arrangements which support education and activities to achieve outcomes of national economic and social significance. Established in 1990, the program enables collaborative arrangements between researchers and between researchers and research users in the private and public sector. Its main objective is to maximise the benefits of publicly-funded research through commercialisation or utilisation of the outcomes of that research. The structure of the program establishes strong collaborative links between researchers and industry in order to create a multi-disciplinary, multi-institutional research environment focussed on addressing industry and user needs. These collaborative links increase efficiency and cost effectiveness of research and research training and make better use of research resources through sharing of major facilities and equipment. CRCs also provide an enhanced education and training environment by involving people from outside the university system in education programs and by offering degree and non-degree courses and training focussed on industry and other user needs. Sixty-two CRCs currently exist throughout Australia. These cover many areas of natural science and engineering: manufacturing technology (11 centres), information and communications technology (7), mining and energy (8), agriculture and rural based manufacturing (12), environment (15) and medical science and technology (9). Most CRCs operate at more than one site with R&D facilities located at more than 40 locations throughout Australia. The latest round of funding, announced during December 2002, allocated more than $478 million to the program. Federal Science Minister Peter McGauran, said the work to be undertaken would help turn Australian ideas into innovations to support the nation’s vital economic, environmental and social development. “The program will help Australia maintain a competitive position in leading-edge technology by providing businesses with opportunities to work with research institutions and to focus on research relevant to Australia’s needs,” he added.
It will develop technologies for capturing value from the sector’s high volume waste streams, controlling toxic dispersion and providing step improvements in the most energy and waste intensive processes. Since 1990, when the CRC program was started, 18 mining and energy sector CRCs have been funded, spanning some world-leading initiatives. A laser plasma spectrometer was developed by the CRC for Clean Power from Lignite while the CRC for Mining Technology and Equipment created the ‘Universal Dig and Dump’ dragline for open-cut mines.
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THE CRC WILL FIND ECONOMICALLY VIABLE WAYS OF ELIMINATING WASTE AND EMISSIONS BY LIFTING THE ECOEFFICIENCY OF EXISTING OPERATIONS, CAPTURING REGIONAL SYNERGIES IN RESOURCE PROCESSING-INTENSE AREAS AND STREAMLINING COMPLEX METALLURGICAL SUPPLY CHAINS.
MINING NEWS
Costerfield targets four more areas he rich gold and antimony deposits around Costerfield, near Bendigo, have continued to produce encouraging results with more high-grade anomalies discovered in the latest work.
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AGD MINING IS HOPING THAT ADDITIONAL DRILLING WORK WILL PROVE SUFFICIENT ORE TO JUSTIFY A START TO MINING LATER THIS YEAR.
AGD Mining Ltd says that the results from a total of 574 air core holes drilled over sections of the 3.5 kilometre potentially mineralised Costerfield corridor had outlined four further exploration targets for gold/antimony mineralisation.
The geochemical exploration program was designed to test the bedrock ‘C’ horizon on line spacing of about 400 metres, with holes drilled along the lines on 5m hole centres.
While assay results above 30 parts per billion (ppb) gold are regarded as anomalous for the Costerfield corridor, some samples assayed up to 340 ppb gold (Au), 1,300 ppb arsenic (As) and 700 ppb antimony (Sb).
The program also was to define additional near-surface gold targets along the 3.5 kilometre main shear zone linking the old main workings at Costerfield and the new Augusta gold project discovery to the south.
Assays of up to 2.8 grams per tonne Au were recorded in the quartz laterite horizon in the Prince of Wales zone, situated about 100 metres east of the main Costerfield corridor. Previous geochemical exploration on the Costerfield corridor resulted in the discovery of the Augusta gold project (previously called the MH zone) and the Costerfield region now has a discovered resource of around 290,000 tonnes of ore grading 12 g/t gold and 6.2 per cent antimony. AGD Mining is hoping that additional drilling work will prove sufficient ore to justify a start to mining later this year. The latest exploration program has now extended the Augusta mineralisation 80 metres south of the previous southern-most diamond drill hole, giving a potential strike
Historically, there has been very little modernday exploration conducted over this main corridor apart from the Augusta area, which is already proving to be highly successful. Drilling at the Augusta Zone site, Costerfield.
zone of at least 500 metres. The Augusta mineralisation remains open on strike to the north and south. The company also has reported to the Australian Stock Exchange that gold/antimony mineralisation has been identified in two possible extensions of mineralisation around 500 metres south of the main historic Costerfield workings in areas not previously mined.
A 15-hole diamond drill program was due to begin during January to test the upper, oxidised parts of the Augusta gold zone and extend the near surface strike lengths of the Augusta zone’s three orebodies. F O R M O R E I N F O R M AT I O N C O N TA C T:
Jurgen Debrodt, Company Secretary A.G.D. Mining Limited 175 Collins St Melbourne Vic 3000 Tel: (03) 9663 5355 www.agdmining.com.au
LAKES TO DRILL TWO GIPPSLAND WELLS lans by petroleum exploration junior, Lakes Oil NL, to drill two new gas exploration wells in the onshore part of the Gippsland Basin have been cemented after its joint-venture partner confirmed it had secured an underwriting agreement for new capital for the project.
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AusAm Resources will raise up to $A12.5 million to fund the drilling of two new wells on the Trifon prospect in Gippsland permits PEP 156, 157 and 158. AusAm plans to utilise US developed ‘under-
balanced’ drilling technology in a bid to release commercial gas flows from the tight reservoirs encountered when the original Trifon 1 gas discovery was made. Water-based drilling mud damaged the formation and caused the well to block, but the underbalanced technique uses an inert gas as the drilling medium to avoid formation damage. The technique is used in thousands of wells drilled in the US each year and is considered a low-risk technique to stimulate gas from tight reservoirs.
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AusAm intends to drill two wells, Trifon 2 and 3, in February subject to the completion of the terms of the joint venture. Earthworks for the extension of the original drilling pad have already begun. F O R M O R E I N F O R M AT I O N C O N TA C T:
Robert Annells Managing Director, Lakes Oil NL Level 11, 500 Collins St Melbourne Vic 3000 Tel: (03) 9629 1566
