The major miner also revealed annual production records at Western Australian Iron Ore (WAIO), the Olympic Dam operation, and the Spence copper mine in Chile.
This is particularly significant for Olympic Dam, with the historic mine enjoying a new lease on life after overcoming years of operational hurdles.
Olympic Dam produced 212,000 tonnes of copper in the 2022–23 financial year (FY23). This is a 54 per cent increase from FY22 (138,000 tonnes), a year when BHP conducted major smelter maintenance at the mine.
Spence, which forms part of BHP’s Pampa Norte operations in northern Chile, boosted its annual copper production to 240,000 tonnes, supported by increased throughput from the Spence concentrator.
Prominent Hill and Carrapateena produced 8000 tonnes and 12,000 tonnes of copper, respectively, across two months of production since BHP acquired the mines in its acquisition of OZ Minerals.
BHP has grouped Olympic Dam, Prominent Hill and Carrapateena together under the banner ‘Copper South Australia’, and the company hopes to produce between 310,000–340,000 tonnes of copper from the mines in FY24.
Integration activities saw small volumes of copper concentrate from Prominent Hill transported to Olympic Dam for processing.
WAIO continues to fire on all cylinders, producing a record 257 million tonnes of iron ore in FY23 – a 1 per cent increase from FY22.
“WAIO shipped record volumes on the back of productivity in its supply chain, rail network and car dumpers, while South Flank completed its deployment of autonomous haul trucks in May and is on track to ramp up to full production in the next 12 months,” BHP chief executive officer Mike Henry said.
BHP saw average prices for its copper, iron ore and metallurgical coal markets reduce year-on-year in FY23. Nickel prices remained stable, while thermal coal prices were higher, driven by a buoyant first six months.
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It has long been a trusted mining partner of countries across the world, but there is urgency for Australia to expand its downstream options as the world decarbonises.
Any new industry can present a race to the top, with early adopters best placed to capitalise on new market share and gain a competitive advantage.
This is the case in the context of decarbonisation, where more and more countries are recognising the commercial opportunities that come with establishing the net-zero power sources of a cleaner future.
The situation represents a once-in-a-generation opportunity, and Australia is beginning to understand the role it can play in supporting the green transformation.
Having established itself as a mining superpower, Australia is already a key supplier of the materials driving the world’s renewable energy technologies. But the country can be more than the world’s green-energy quarry, with opportunities to look further downstream and establish vertically integrated renewable industries onshore.
One avenue could be to develop a local battery supply chain, something the Future Battery Industries Cooperative Research Centre (FBICRC) sees as a particularly urgent commercial pathway.
“The clean-energy transition is moving faster,” FBICRC chief executive officer Shannon O’Rourke told Australian Mining. “Government spending on clean energy has increased 30 per cent in the past two years.
“Greater subsidies are driving electric vehicle (EV) demand and increasing commodity prices and volumes. In the past 18 months, the opportunity for Australia has doubled.”
FBICRC released a report in March suggesting Australia’s battery opportunity could contribute $16.9 billion to the Australian economy by 2030.
The report, Charging Ahead – Australia’s Battery Powered Future, highlights Australia’s mining and geological upside, particularly in the production and endowment of critical minerals, and how this can support capabilities further downstream.
This not only encompasses battery manufacturing but other segments in the value chain, such as refining and active materials.
“Australia is cost-competitive across the entire value chain,” O’Rourke said. “We are eight per cent cheaper than Indonesia to produce advanced materials and five per cent cheaper than the United States to produce cells.”
Australia also has a significant advantage in refining, with the potential to be the world’s cheapest producer of lithium hydroxide monohydrate (LHM) through upstream integration in the supply chain. This is the result of Australia’s abundant lithium reserves and mining capacity, which creates natural synergies with downstream applications.
Some Australian companies are already harnessing onshore lithium hydroxide opportunities, with Mineral Resources (MinRes) and IGO producing the refined product from their downstream processing facilities in Kemerton and Kwinana, respectively.
The Kemerton plant sources spodumene concentrate – a raw lithium material – from the Greenbushes lithium mine in WA, which is part owned by MinRes’ Kemerton partner, Albemarle Corporation.
IGO’s Kwinana plant, which it owns in partnership with Tianqi Lithium Corporation, also sources spodumene from Greenbushes.
The lithium hydroxide produced from Kemerton and Kwinana is then shipped offshore for further processing before it is upgraded to active materials such as lithium-iron-phosphate (LFP) or nickel-cobalt-manganese (NCM) – two key cathode inputs for renewable batteries.
But demand for Australia’s upstream products is not solely coming from overseas, with a growing local renewable energy sector seeking more materials than ever.
“Australia’s local demand is skyrocketing,” O’Rourke said. “Bloomberg reports that Australia has the largest pipeline of energy storage projects behind China, and a recent Sunwiz report shows that Australia’s behind-the-meter battery storage market is up 55 per cent year on year.”
The Australian Government is funding eight large-scale batteries to be built across the country, storing renewable energy and reducing the reliance on fossil-fuel power generation. Project locations extend from Victoria’s Surf Coast all the way up to Queensland’s tropical north.
Building independent capabilities is important, but for Australia to effectively harness its battery opportunity, it needs to tackle the matter holistically.
“Building an ecosystem is like trying to solve the chicken-and-egg problem,” O’Rourke said. “A healthy ecosystem needs multiple suppliers, customers and producers, supported by service companies, a flexible workforce, the research sector and government.
“Building that incrementally could take decades, and no other country is taking that approach. Industrial growth is non-linear and needs to be supported by trade and accelerated by domestic support.
“Australia is in a good position. It has multiple projects either announced or operating across all elements of the value chain including refining, materials, (and) cell and system manufacturing.
“We have a complete value chain today, including cell manufacturers. The challenge is building out more capacity and scaling up.”
FBICRC believes Australia can be competitive all the way from refining to manufacturing, but the country must find its sweet spot.
“We do not need to match China’s scale; rather we need to achieve minimum economic scale,” O’Rourke said. “Our minerals strength, our secure supply and our ESG (environmental, social and governance) credentials help sharpen our competitive edge.
“Australia has two cell manufacturing projects which meet this minimum scale: Recharge Industries’ 30-gigawatt-hour-per-annum project in Avalon (Victoria) and Energy Renaissance 5.3-gigawatt-hour-per-annum project in Tomago (New South Wales).
“The NRF (National Reconstruction Fund) and other support mechanisms can help Australia’s lighthouse projects get to scale and develop their supporting industries to build a competitive ecosystem.”
The Australian Government introduced the NRF in October 2022, contributing $15 billion to transform several future-facing industries, including renewable energy and downstream opportunities within the resources sector.
Federal support has also been flowing via the Critical Minerals Development Program, which recently provided close to $50 million in grants for emerging upstream and downstream projects.
This included $6.5 million of funding for Australian Strategic Materials’ Dubbo rare earths project in NSW, $4.7 million for International Graphite’s ‘mine-to-market’ graphite strategy in WA, and $4.6 million for IGO’s integrated precursor cathode active material (pCAM) facility in WA.
IGO is developing its downstream project in partnership with Andrew Forrest-backed Wyloo Metals, demonstrating the power of collaboration in Australia’s downstream ventures.
Collaboration is also a key part of FBICRC’s work and underpins its own pilot plant, is exploring the local production of NCM cathode materials.
“There is a strong collaborative spirit supporting our cathode precursor production pilot plant facility, where we are currently manufacturing high performance materials to world standard,” O’Rourke said.
“Four universities and 18 other businesses have come together to build and demonstrate an Australian manufacturing capability.”
Key mining industry players such as BHP, Allkem, IGO, Cobalt Blue, Lycopodium and BASF have come together with FBICRC to further Australia’s understanding of the active materials industry.
Australia’s battery opportunity is there for all to see, and there are enough developments to suggest that an integrated supply chain could be established.
But for it to happen, Australia must be firing on all cylinders, with stakeholders right across the battery supply chain working together to make this dream a reality.
Rio Tinto has lofty copper ambitions in the years to come, with hopes to account for 25 per cent of growth volumes in global copper supply in the next five years.
The major miner held an investor site visit at the Oyu Tolgoi operation in Mongolia this week, where it detailed its copper aspirations and provided an update on Oyu Tolgoi’s production ramp-up.
Rio Tinto said Oyu Tolgoi was on track to reach 500,000 tonnes of annual copper production by 2028, which would coincide with a boost in head grade to about 1.25 per cent copper.
This would be done by unlocking various deposits such as the Oyut open pit (ore reserves: 702 million tonnes at 0.44 per cent copper), Hugo North (ore reserves: 447 million tonnes at 1.55 per cent copper) and Hugo South (inferred resources: 731 million tonnes at 0.83 per cent copper).
The company produced 28,100 tonnes of copper from Oyu Tolgoi in the first quarter of 2023 at a head grade of 0.49 per cent.
Rio said as it uplifts Oyu Tolgoi and its Kennecott copper mine in the US, and benefits from its interest in the Escondida operation and the emerging Resolution and La Granja projects, the company is targeting one million tonnes of annual copper production within five years.
This will be further supported by other US advancements, including the growth of Rio Tinto’s Nuton project which looks to boost copper recoveries from 25–35 per cent (from traditional heap leach) to at least 80 per cent.
Nuton not only has the potential to unlock copper sulphide resources but also copper-bearing waste and tailings, all the while achieving increased recoveries on oxide and transitional material.
This has the potential to deliver improved environmental performance by reducing water usage and carbon emissions, while also giving old mine sites a second life through the reprocessing of mine waste.
Rio Tinto said the US has jurisdictional advantages, with a growing local electric vehicle (EV) market boosting copper demand projections.
Rio acquired a majority interest in Oyu Tolgoi (66 per cent) when it bought out Turquoise Hill Resources at the end of last year. The Government of Mongolia owns the balance.
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This magnetic separator is installed at a rock crushing plant – check out what this magnet is extracting.
These chunky contaminants can damage parts of machinery, which are costly to repair. Not only do these magnets prevent the damage, they also play an important role in improving product purity.
Northern Star Resources has announced the purchase of the Millrose gold project from Strickland Resources for $67 million. The deal comprises $41 million in cash and 1.5 million fully paid shares in Northern Star.
The WA gold project has a known mineral resource of 346 thousand ounces of gold at a grade of 1.80 grams per tonne.
Millrose is located 40km to the east of Northern Star’s Jundee operations. According to the company, Millrose will become a supplementary feed source for the Jundee mill in the medium term, complementing Jundee’s underground base load.
Jundee underground operations currently source roughly 1.8 million tonnes of ore each year.
Northern Star managing director Stuart Tonkin reacted to the agreement.
“The acquisition of the Millrose gold project presents a very compelling development opportunity that is accretive to the Jundee life of asset plan as it should deliver us a sizeable low cost, high grade supplementary resource feed.
“This bolt-on acquisition, which also comes with significant brownfields exploration upside, will provide us with further confidence to plan organic and profitable growth for Jundee, which already is the lowest cost asset in our tier-1 portfolio.”
Strickland has advised its shareholders of exactly how it intends to spend its new funds.
Within the first twelve months, Strickland plans to undertake 3500m of diamond drill and 25,000m of reverse circulation drilling. The company also intends to upgrade its portfolio of gold prospects to mineral resource status, as well as continue base metal exploration at its Iroquois zinc-lead project.
In the same announcement, Northern Star indicated that it was strengthening renewable energy at its Jundee operation. The company has entred into a long-term power supply agreement with Zenith Energy, which incorporates 40 megawatts of wind and solar generation.
Once completed, this will provide 56 per cent of the mine site’s power.
The Northern Star Resources board has approved the expansion of the Fimiston Mill, part of the Kalgoorlie Consolidated Gold Mines’ (KCGM) Super Pit.
The expansion from 13 million tonnes per annum (Mtpa) to 37Mtpa is set to cost $1.5 billion and is due to be completed in 2026.
Located at the centre of the Kalgoorlie goldfields, the Super Pit is one of Australia’s largest open pit gold mines and includes the Mt Charlotte underground mine and the Fimiston and Gidji processing plants.
“Today is an exciting day for Northern Star and a historic new chapter for this world-class asset,” Northern Star managing director Stuart Tonkin said.
“The board’s decision to approve the KCGM mill expansion and optimisation represents the next stage to revitalise our largest asset as well as the surrounding district for decades to come.
This project is financially compelling, and a significant enabling step towards delivering our strategy to generate superior returns for our shareholders.”
Northern Star has had a productive start to the year at the Super Pit, increasing gold resources to 57.4 million ounces (Moz) and keeping ore reserves steady at 20.2Moz.
Tonkin said the company is confident the site will continue to produce significant value.
“Our confidence in the economics of KCGM to remain a long-life, low-cost gold mine has been further reinforced through the feasibility study phase,” he said.
“Expanding the processing capacity of KCGM will strengthen Northern Star’s portfolio, materially increase our free cash flow generation and progress our long-term strategy to be within the 2nd quartile of the global cost curve.
“Further, the project is important in our sustainability journey and will also sustain hundreds of local jobs, economic and social investment, and local procurement opportunities in the Goldfields region.”
Major miner Rio Tinto is looking to invest more in its Kennecott operation near Salt Lake City, Utah, in a bid to strengthen its copper supply in the US.
To do so, Rio will increase production from underground mining at the site while also improving the health of key assets.
A total of $US498 million in funding has been approved to deliver the increase in production and is expected to commence in 2024.
Rio said the production will ramp up steadily over two years from 2024 in order to deliver 250,000 tonnes of additional mined copper over the next 10 years.
“We are investing to build a world class underground mine at Kennecott and strengthen our processing facilities, to meet the growing demand for copper in the United States, a key material for domestic manufacturing and the energy transition,” Rio Tinto Copper chief operating officer Clayton Walker said.
“This investment will position Kennecott to continue the strong contribution it has made as part of the Salt Lake Valley community for 120 years, injecting about $1.5 billion annually to the local Utah economy.”
Rio will also invest $300 million for a rebuild of the Kennecott smelter, the largest in the history of the site.
The investment is the latest in a series copper investments, signalling the growing importance of the resource.
Mid-tier Australian gold producer Regis Resources has released its annual mineral resource and ore reserve update for the 2022 calendar year.
The company said its mineral resources and ore reserves show progress against its long-term strategy, as well as provides a solid platform to launch the next phase of growth.
Highlights from the report include underground reserves outpaced depletion for the second year in a row as new results highlight underground life extensions at the Duketon gold project and the Tropicana joint venture, which Regis Resources chief executive officer Jim Beyer said was pleasing to see.
“We are extremely pleased that our underground mines at both Duketon and Tropicana have outpaced depletion for the second year in a row. We have spent the last two years investing in these mines and it is very satisfying to deliver reserve growth on these investments over this short time horizon,” Beyer said.
“It is still early days in the maturity of these undergrounds and we look forward to the continuing growth potential as we mine deeper. Our long reserve life of eight years and located wholly within Australia provides a strong platform to deliver on our long-term growth objectives and achieve superior returns for our shareholders.”
Other highlights from the report includes group ore reserves of 3.6 million ounces (Moz) and group mineral resources of 7.0Moz, both as of 31 December 2022.
There was an increase in new ore reserves of 210,000 ounces (koz) and an increase in new mineral resources of 400koz, both offset by the 2022 calendar year depletion.
Long term gold price assumptions for the calculation of reserves and resources were updated but remain at moderate levels at a weighted average of $1800 per ounce for reserves and $2430 per ounce for resources.
Additionally, early results from the Garden Well exploration decline at the Duketon project has reinforced the potential for a new production front and growth in ounces per vertical metre. The underground site also established an exploration target.
The Western Australian (WA) Government has released a new report which details the State’s potential to join the rapidly growing global green steelmaking value chain.
The Minerals Research Institute of Western Australia (MRIWA) said that the State has played a central role in the growth of the global steel industry for over 60 years.
“Steelmaking is a very energy intense process resulting in the global steel industry being one of the largest carbon emitters in the world… it is important to understand the significant challenges steelmakers are facing to reduce emissions in their operations,” the MRIWA said.
As a response to this issue, the MRIWA and the WA Government created the Western Australia’s Green Steel Opportunity report. It maps five ways in which WA iron ore can be used to reduce emissions from steelmaking.
The report considers the size and scale of the capital requirements and infrastructure needed for these pathways, and it identifies the State’s access to natural gas and renewable energy resources as key to supporting emissions reductions in steelmaking.
WA Premier Roger Cook said the report will help position the State as an investment destination for low-emissions steel opportunities.
“Our State’s abundant renewable energy resources alongside our world-leading iron ore industry puts WA front and centre in the global push towards green steel. Moving up the green steel value chain will diversify our economy and create more local jobs right across the State,” Cook said.
Mines and Petroleum Minister Bill Johnston said the State Government has a comprehensive understanding of the challenges facing the steel industry in its decarbonisation efforts and opportunities.
“The transition option of using natural gas has the potential to reduce emissions from iron making by 65 per cent and is technically feasible today. This information can be used to support investment attraction into Western Australia,” Johnston said.
After selling its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion) earlier this month, Glencore and MAC have officially closed the sale.
Under the transaction, Glencore has received $US775 million in cash and $US100 million in shares, along with:
$US75 million deferred payment to be paid within 12 months
$US150 million payment contingent upon future copper prices
1.5 per cent life of mine net smelter return royalty
Glencore will offtake 100 per cent of the copper concentrate produced and MAC will assume ownership and the full operation of the mine.
“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset,” MAC chief executive officer Mick McMullen said in 2022.
“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.
“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.
“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
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