Less than five years ago, Tasmania was in the midst of a mining downturn. Today, significant potential is on the horizon as the state’s investment attractiveness soars. Nickolas Zakharia writes.
In February, the Fraser Institute’s 2019 Annual Survey of Mining Companies was released.
Tasmania received its highest score in almost 15 years. The state’s investment attractiveness rating soared from a score of 60.31 in 2018 to 75.70 in 2019, placing it 22nd out of the 76 mining jurisdictions surveyed.
Equipped with a wide range of traditional mineral deposits across the state, the untapped potential of Tasmania’s resources is vast, according to Tasmanian Minerals, Manufacturing and Energy Council chief executive officer Ray Mostogl.
“We’re really blessed in Tasmania,” Mostogl says. “We’ve got the Mount Read volcanics over on the west and there’s a really broad range of metallic minerals there.
“And then on the north east we’re pretty rich with gold, so there are some great opportunities.”
Tasmania’s mining industry has also taken notable strides from a technology perspective in recent years, unlocking the potential to uncover new mineral deposits in hard to reach areas across the state.
“The west coast of Tasmania is a really tough terrain and as technology for exploration improves, we’re able to identify more of the resources there – we’re even doing it remotely now,” Mostogl says.
“Tasmanians are innovative by nature and therefore we have some great technology designers who are based in Tasmania. The METS sector is vibrant and works hand-in-glove with the mines and processors to ensure the industry remains internationally competitive.”
With the state being home to generations of mining families, its mining industry shares a strong bond with local communities, according to Mostogl.
“We’ve got multi-generations of workers that have lived and grown up around the mines, so we’ve got very strong community ties to those mines,” he says.
“Mining companies that are here today have built a really strong reputation within their communities. We probably fly under the radar despite the fact we’re more than 50 per cent of the state’s export wealth.”
On top of this, Tasmania is the country’s largest generator of clean renewable energy, which translates over to its mining activities.
For Mostogl, this is a key reason why Tasmania is attracting investor attention.
“I think the green energy we produce is the sleeper that will continue to raise Tasmania’s profile internationally,” he says.
“We are largely 100 per cent renewable. For anybody in this day and age that is a big factor in terms of being able to market their product and show their sustainability credentials.
“Using the renewable energy from our magnificent hydro and wind assets, Tasmania’s potential to be a supplier of low-cost green hydrogen should further enhance the export wealth generated by our sector.”
A new golden age
Tasmania’s Beaconsfield gold mine has been shut since 2012, with previous owner BCD Resources describing the closure as an economic decision.
At the time, the company stated that the gold price was “not viable to mine below the current depth of 1210 metres”.
Fast forward to the present day and gold prices have enjoyed massive spikes in value in Australian dollars, which has lured more investors to explore Tasmania’s prospects in the sector.
NQ Minerals plans to revive the historic Beaconsfield site to uncover gold deposits that lay dormant beneath that 1210-metre mark.
“From 1999 through to 2012, the average grade was 11 grams per tonne, so this a high-grade gold mine – it’s significant,” NQ Minerals executive director Roger Jackson says.
“It’s opened at depth of over 1200 metres and there’s significant amounts of gold left in the remnants.
“The Beaconsfield load itself is probably one of four parallel systems – the main layer and the one that was mined over the last 100 years being the Tasmanian reef is the most significant but not necessarily the only reef.
“Given that there was a number of times that there were issues around water, wars, labour etc – there’s potential that the old-time miners may have missed some reefs during that and we’re confident around the Beaconsfield precinct.”
NQ Minerals signed a $2 million deal to acquire Beaconsfield in February and expects to complete due diligence at the site this year.
“Having a gold endowment – such as the existing remnants that were at Beaconsfield – will provide plenty more added depth to our portfolio,” Jackson says.
“The mine is right in Beaconsfield — and Beaconsfield has been a mining town since the 1860s.
“The town is looking forward to us restarting because there’s a lot of miners that have previously worked at Beaconsfield, it’s a significant mine for employing locals. It would be a predominately local workforce.”
The west coast of Tasmania is home to some of the state’s most prosperous operations.
With volcanic sulphide systems scattered across areas such as Mount Read, NQ Minerals is also anticipating positive exploration results at its flagship Hellyer gold project.
The Hellyer site includes a polymetallic deposit with the potential for expansion.
NQ Minerals predicts that the project will exceed $1 billion in revenue over a 10-year period.
“There’s a lot of high-grade material in the Mount Read volcanics in and around Hellyer,” Jackson says.
“We’re talking volcanic massive sulphide systems that have averaged greater than 20 per cent zinc or zincblende equivalent over many years.
“We hold a good part of the area around Hellyer and we are exploring at the moment – we are pretty confident that we are going to have positive results.”
NQ Minerals acquired the Hellyer gold mine in 2017 and plans to restart its mining operations in the future, which in turn will provide more jobs to local workers.
Tasmania is also home to the largest tin deposit in Australia – the Renison mine, which is also positioned along the west coast.
“Renison is a very historic operation, having been producing now for more than 50 years. The project is well located and geologically blessed, allowing it to be a long-life, stable, profitable operation,” Metals X chief executive officer Mike Spreadborough says.
Metals X has a 50 per cent equity interest in the Renison tin mine under the Bluestone Mines Tasmania Joint Venture with the Australian subsidiary of Yunnan Tin Group.
For Spreadborough, tin is entering a new phase, with demand for the commodity emerging from the battery industry.
“Tin is an important commodity for Tasmania, Australia and globally. We believe the tin market is entering an exciting period supported by diversification and growth of applications in new technologies,” Spreadborough says.
“Solder is still, by far, the largest use for tin but we are seeing it become more critical in applications such as the battery industry.”
With forecasts that tin will be the top metal benefitted by new technology, Spreadborough is convinced of the opportunities that lie ahead for the commodity.
“The tin market has been in deficit since 2014 with the emergence of China as a major importer, and with limited supply growth forecast and existing production from major producing regions expected to decline over the next decade, all the ingredients are there for a potential uplift in the tin price and a bright future for Renison,” he concludes.
This article also appears in the June issue of Australian Mining.