2009 was an eventful year for the Australian mining industry, with issues like Chinese foreign investment, uranium mining, climate change and the global recession all leaving their mark at some stage. Over these final two issues of 2009, MINING DAILY will list and explore the top 10 stories that have impacted the industry during the year.
10 – FourMile Uranium Mine approved
The debate surrounding uranium mining increased in intensity in July when Federal Environment Minister Peter Garrett approved the development of the FourMile mine in South Australia.
The project is the largest uranium deposit discovered in Australia in the last 25 years, with an estimated resource base of 61 million pounds.
When announcing the approval, Garrett said the mine would be subject to global best practice environmental standards.
“I am certain this operation poses no credible risk to the environment,” he said.
The deposit is located near the Beverly uranium mine 550 kilometres north of Adelaide and will be operated in a joint venture between Quasar Resources and Alliance Resources.
At the time, the Australian Uranium Association told MINING DAILY the approval was proof that the industry was able to stand up to environmental benchmarks.
9 – Hunter Valley port infrastructure gets go ahead
After decades of congestion and inefficiency, the Hunter Valley coal industry received a massive fill-up in September with the signing of a long term export plan.
The plan would be structured to enable coal loading and rail operations to be underpinned and aligned by 10 year contracts. This would allow more accurate and timely infrastructure investments.
The required signatories, the Newcastle Coal Infrastructure Group, Port Waratah Coal Services (PWCS) and the NSW Government, had all agreed to the deal by 18 September.
At the time, PWCS general manager Graham Davidson said exports could double from the current output of 91 million tonnes per annum.
He said the agreement was a culmination of two years work by the Hunter coal industry and the Government.
Final approval from the Australian Competition and Consumer Commission (ACCC) came last week.
8 – Fortescue Metals aims high
Fortescue Metals chief executive Andrew ‘Twiggy’ Forrest had a stated aim in 2009 to build the company into a big player in the global iron ore market.
In August, he triumphantly unveiled an iron ore price agreement with the China Iron and Steel Association and Baosteel, which was at a 3% discount to Rio Tinto’s deal with Japanese and Korean steel mills.
At the time, Forrest said the deal had broken the iron ore price stalemate that had enveloped the Chinese iron ore industry over the prior 12 months.
There was speculation that the company was being used as pawn by China in its quest for a 40% discount from Rio, BHP and Vale, which Forrest rejected.
However, the mills had to provide around US$6 billion in order for the deal to go ahead.
The funds did not come through by the cut-off date of 30 September, which left a cloud hanging over the deal.
7 – OZ Minerals survives and prospers
OZ Minerals had an extraordinary 12 months that saw it both teeter on the brink of collapse and then flourish on the back of its only remaining asset, the new Prominent Hill copper-gold mine.
The company began the year encumbered with loan debts of $987 million.
After securing one deadline extension after another during the first part of the year, the company finally managed to repay the debts by selling off nearly all of its assets to China’s Minmetals Group for US$1.2 billion.
However, the company held on to Prominent Hill, located in South Australia, which opened on 24 May.
OZ then focussed all of its efforts on ramping up production at the mine with a target of 85,000 to 100,000 tonnes of copper and 60,000 to 70,000 ounces of gold.
The company ended the last financial year in a healthy position with total revenues of $854.5 million and a balance sheet over $1 billion.
6 – Gold Prices skyrocket
As the US economy stagnated at the hands of recession and confidence in the dollar plummeted, gold prices grew at an exponential rate in the second half of 2009 to reach unprecedented heights.
The price broke through the US$1000 per ounce mark in September and flirted with the all-time record of $1028 per ounce for the next few weeks.
It finally broke the record on 6 October and reached as high as $1045 per ounce.
However, the rise did not stop there and new records were set on nearly a daily basis.
On 1 December, the price punctured the $1200 per ounce mark reached as high as $1217 per ounce.
India had recently purchased 200 tonnes of gold bullions amid fears the US dollar would not last as the world’s main reserve currency.
However, the prices have started to steadily decline back towards the $1000 mark as the year draws to a close.
Resource Capital Research senior gold analyst Tony Parry held this throughout the rises, telling MINING DAILY it was unlikely the world would easily discard the US dollar.