Mines on the march in SA | Mining & Energy | The Australian

Mines on the march in SA

SOUTH Australia's mining story keeps getting bigger and better with the prospect of three new iron ore mines getting up.
In the past week, Goldstream Mining has reported an 11.3 million tonne iron ore resource 55km south of Coober Pedy at Cairn Hill, and Western Plains Resources turned in more high-grade results north of Tarcoola at Peculiar Knob.
Centrex Metals signed a deal last month for US rail company Genesee & Wyoming, which runs trains in South Australia, to haul iron ore to Port Lincoln when its Wilgerup mine begins producing late next year.
In the past few years, the state has moved from being a mining backwater to one of Australia's best exploration addresses.
Although the huge Olympic Dam copper-uranium mine and the historic iron ore production near Whyalla have always underpinned the state's mining role, there has been an explosion of activity recently.
With the Honeymoon project being developed as Australia's fourth uranium mine, South Australia has become one of the hottest spots for uranium exploration, the state having three of our four operating mines.
PepinNini Mineral's uranium projects in the state are at the feasibility stage, China's Sinosteel already a partner in financing development.
The highly encouraging mineral sands finds in the Eucla Basin have also given the state's mineral profile a large boost.
Mines on the production path include the $775 million Prominent Hill copper-gold mine owned by Oxiana, Terramin Australia's $63 million Angas lead-zinc project and the $60 million mineral sands mine being developed at Mindarie by Australian Zircon.
And Hillgrove Resources is expected to green-light its Kanmantoo copper project near Adelaide.
According to Goldstream, its Cairn Hill deposit graded at an average 50.3 per cent iron ore, along with copper and gold.
The iron ore is magnetite, the appeal of which is that, although usually lower in grade than hematite, it can be upgraded into pellet form, making it very efficient in steel manufacturing.
The copper and gold reduce the amount of waste at the project, and by-product sales add to the financial return.
The company has been talking with four potential Chinese customers and a preliminary agreement is expected soon.
A report issued recently by brokers Patersons claims one of the main issues facing Goldstream is transport logistics.
Goldstream's scoping study showed it would be possible to transport the ore to a South Australian port and process it in China rather than on site.
Western Plains' latest drilling results show iron ore grades comfortably above the key hematite level of 60 per cent, along with low levels of impurities.
As of late last year, Peculiar Knob had an inferred resource of 14 million tonnes.
Western Plains has also acquired the Hawks Nest hematite project, which has 36.7 million tonnes and magnetite resources totalling 540 million tonnes.
Again, transport is a problem.
According to a report issued by Veritas Securities, transport is the largest cost burden facing Western Plains, the closest port being 680km away, and this cost is pivotal to the development plan.
Veritas expects the company to acquire its own rail wagons to reduce operating costs.
The company would have to build a 100km road to reach the Adelaide-Darwin transcontinental railway and either Whyalla or Port Bonython would be used to ship to China.