Xstrata Copper has been operating in North West Queensland for some time.
One of its most recognisable mines (after the Mount Isa mine itself) is the Ernest Henry mine.
Operating as an open cut mine since 1997, the mine has practically become an institution in the Mt Isa/ Cloncurry area.
In 2009, the miner approved a massive investment to transform the open cut pit into an underground mine.
The plan was approved after a series of studies lead to the mine’s ore reserves being revised to 72 million tonnes at a grade of one per cent copper, 0.5 grams per tonne gold and 22 per cent magnetite.
The company said this was a 600 per cent increase on previously published underground reserves.
The move by Xstrata has breathed another 12 years of life into its Ernest Henry Mining operation near Cloncurry, which has now successfully transitioned from open cut last year into an underground mine and is now on track to reach full production levels.
It also signalled the mine becoming the first magnetite producer in Queensland.
Ernest Henry Mining general manager Myles Johnston said 2012 is a year of growth for the operation, which consists of the new underground project, the Mount Margaret Mining project and associated magnetite processing facilities.
Since 1997 Ernest Henry Mining has operated as a successful open cut mine employing around 600 people.
In December 2011 the operation reached another milestone in its $589 million life of mine extension project with open pit completion and the start of initial underground production. “We are protecting and creating jobs, with 330 jobs created during the construction phase for our underground and magnetite projects and 400 full-time jobs from 2013,” EHM’s Myles Johnston said.
The Ernest Henry open pit mine had reached a final depth of over half a kilometre and was a substantial 1.5 kilometres long and 1.3 kilometres wide. “Now the focus is on completing the underground shaft, which will be sunk to 1,000 metres and we expect it to be commissioned in 2013,” Johnston said.
“Following shaft commissioning, production will ramp up to six million tonnes of ore per annum producing 50,000 tonnes of copper and 70,000 ounces of gold in concentrate.
However in the initial phases of ground work around three million tonnes of ore will be trucked form the mine, generating 25 000 tonnes of copper and 35 000 ounces of gold.
“Since our first cut in February 2008, the underground project has progressed with more than 31 kilometres of total development,” Johnston added.
“We are also on track to bring our Mount Margaret Mining project online in the second half of 2012, which will create an additional 100 full-time jobs. Additionally we have made significant progress in developing detailed plans, finalising government approvals, and consulting with landowners and key stakeholders.
“The project includes the E1 and Monakoff tenements purchased from Exco Resources in 2011, located eight kilometres east and 21 kilometres south respectively of Ernest Henry Mining.
The Mount Margaret operation has a five year mine life with a combined resource of 52.1 million tonnes grading 0.77 per cent copper and 0.23g/t gold.
“It is expected to produce approximately three to four million tonnes of ore per annum, which will feed straight into Ernest Henry Mining’s concentrator along with ore from the underground operation.
“The Mount Margaret Mining project increases our production profile, utilises the remaining capacity of our existing concentrator and further strengthens the viability of our operations.
Xstrata sees potential within the local region and resources like the Mount Margaret Mining project could lead to further expansion.
“We see positive exploration potential in the area and further opportunities with juniors and mid-tiers. The E1 and Monakoff tenements were the first deal we focused on and now we are investigating others,” Mr Johnston said.
Historically, Ernest Henry Mining’s concentrator was a single-ore operation Xstrata explained, but with the underground development is now being reconfigured to enable processing of additional feed sources, including smelter slags and near-waste materials that have grades as low as 0.15 per cent copper.
“Over the next five years the concentrator will produce copper, gold and magnetite from at least six different orebodies, comprising some 13 different ore types,” Johnston said.
“It has the capacity to produce around 400,000 tonnes per annum of copper-gold concentrate and 1.2 million tonnes per annum of magnetite concentrate, depending on the grade of the ore.
“In June 2011 we became the state’s first magnetite concentrate exporter with the first shipload leaving the Port of Townsville bound for Asia, creating a new industry for Queensland.
According to earlier statements by Xstrata Copper North Queensland chief operating officer Steve de Kruijff The Ernest Henry Mine (EHM) will produce about 1.2 million tonnes of magnetite concentrate per year, which will be used to fuel Asia’s steel industry and also used as a washing agent in domestic coal operations.
Magnetite concentrate will be stockpiled at EHM and then transported via road to a rail load-out facility near Cloncurry, after which it will be hauled to Townsville.
It is predicted to create a number of new jobs at the port, de Kruijff saying “the receival, storage and shipping of magnetite concentrate has generated 14 additional operator and maintenance roles within the operations and another two positions within shipping and sales”.
Johnston went on to say that “all together, these developments reaffirm our commitment to the Ernest Henry operation and to the Queensland region and local communities.
“Extending the mine life by an additional 12 years to 2024 will help provide ongoing economic security for the Cloncurry community, to which we are a major contributor.
“We are proud of the contribution we make to the local Cloncurry region and I think our recent announcement of $2.75 million towards the Cloncurry Community Precinct reflects this commitment.
“It also gives people confidence to continue investing in Cloncurry and helps underpin the ongoing economic and social development in the shire.”
This was supported by Cloncurry shire mayor Andrew Daniels stated that the mine’s expansion will provide economic security for the region.
“Ernest Henry Mining is a major contributor to our shire. Extending the mine’s life by another 12 years has helped to provide job security for many people and will underpin the ongoing economic and social development in the shire,” he said.
However, while there has been increased development in Xstrata’s copper and magnetite operations in the region, it continues to look at phasing out its copper smelting and refining operations in North Queensland, de Kruijff explained that copper smelting and refining operations have been under increasing pressure for a number of years and could not be sustained in the long term.