Super mines: Australia’s biggest mining projects

Australia’s largest gold mine has been owned by Newmont since 2009, when it purchased a controlling share in the project from AngloGold Ashanti and Newcrest. The company has since invested heavily in the Western Australian open pit mine, which reached two million ounces of gold produced by 2012, and ramped up production to 787,000oz of gold per year by 2017, a total that is expected to reach 850,000oz.

Newmont has also invested $500m in a significant expansion of the mine’s south pit in 2015, which is expected to extend the mine’s lifespan until 2025. The project also produces 80 million pounds of copper per year, making the mine one of the most productive in Australia.

At the end of 2017, the owners estimated that the project had access to proven and probable reserves of over 11.2 million ounces, alongside a further 1.4 million ounces beyond the limits of the main pit. However, the future of production at the mine is heavily front-loaded, with Newmont anticipating significant returns in the next few years, before production declines towards the end of the mine’s life. The company expects total gold production to reach 5.2 million ounces this year across its Boddington, Kalgoorlie and Tanami operations. However, this figure is expected to fall to 4.9 million ounces in 2020, and could fall as low as 4.4 million ounces by 2023.

Officially known as the Fimiston open pit mine, the Super Pit gold mine in Western Australia is the country’s largest mine in terms of scale, covering 3.5km by 1.5km on the surface, and currently undergoing expansion work to extend to a depth of 700m. It was also Australia’s most productive gold mine until 2012, when it was overtaken by the Boddington project, producing around 800,000oz of gold annually, although year-on-year production figures have varied.

The mine is owned by Newmont and Barrick Australia through their joint venture Kalgoorlie Consolidated Gold Mines (KCGM), and has been in operation since 1989, with lifetime production reaching 16 million ounces in 2014. However, the mine’s open pit operations are expected to close this year, and the project will shift to focus on underground operations and mineral processing, which KCGM estimates will continue for a further ten years. In November last year, the owners began the first expansion project at the mine in nearly a decade to begin the shift from open pit to underground operations.

The mine has also suffered from a number of accidents in recent years, with its western and eastern walls partially collapsing in 2017 and 2018 respectively. While no workers were injured in the collapses, both immediately disrupted production and forced KCGM to cut jobs in order to balance the books. In 2018 alone, 176 permanent positions at the mine were eliminated, and the mine’s projected gold production for the year was reduced to between 560,000oz and 660,000oz.

BHP’s giant mine, located in South Australia, is one of the largest and most productive in the world, with 154 million tonnes of proven reserves, including a copper grade of 2.06% and a gold grade of 0.68 grams per tonne as of June 2018. As of the end of last year, the Olympic Dam was the fifth largest copper producer in the world, and boasted the world’s largest uranium deposit, making it one of the more versatile mining operations on the planet.

However, BHP has struggled to effectively extract the mine’s vast resources since buying previous owners WMC Resources in 2005 for AUD$9.2bn, as constant expansion projects have harmed the mine’s production totals in the short-term. Copper production slumped to 137,000 tonnes in 2018, a decline of 18% over 2017 figures, as maintenance work was completed on the mine’s smelter facilities in the first half of the year. Technical faults, such as an eight-week shutdown of the mine’s acid plant, have also caused production to struggle.

BHP has planned a series of further investments in the mine, including a proposed $2.1bn expansion in 2017 that the company claims would have increased the mine’s lifespan by 500 years. While the project was deemed too ambitious for work to begin immediately – the scheme aimed to increase production from around 150,000 tonnes per annum to 450,000 tonnes by the start of 2023 – BHP will reconsider the project in 2020.

The Queensland mine is the world’s largest producer of silver and lead, generating 31 million ounces of the former in the year ending June 2013, and 7% of the world’s supply of the latter. The mine has been in operation for two decades, and employs over 800 people, making it one of the largest and most well-established projects in Australia.

Owner South32 has also invested significantly in modernising operations at the mine. In April last year, the company announced plans to build a 3MW solar power farm to provide electricity to the mine, which will cover six hectares and reduce greenhouse gas emissions at the mine by up to 6,000 tonnes a year. The project is expected to pay for itself by reducing energy costs elsewhere at the mine, and builds upon a larger 34MW gas plant at the site; the two sources of power are to be combined by engineering firm SunShift to create a hybrid electricity source. Electricity supplier EDL Energy has also signed a 14-year extension to its contract to supply energy to the site, which includes the commitment to combine the gas and solar power sources.

The clean and efficient energy source will also help to offset rising operational costs at the mine, as inflation has steadily increased in the Australian mining sector, following the end of a decade-long boom in 2014. Rising costs such as a 60% increase in tyre prices for underground vehicles, and a doubling of delivery times for trucks and large machinery, have encouraged operations like Cannington to eliminate operational inefficiencies.

The Rio Tinto-owned operation in Western Australia has mined more than 800 million carats of diamonds since operations began in 1983, starting with open pit mining until 2013, before shifting to underground operations to access the AK1 pipe, where the diamonds are deposited, at greater depths. The owners have expanded the scale of the operation over time, which now boasts over 40km of underground tunnels accessing a number of diamond deposits, and have used block cave mining techniques to extend the mine’s lifespan to 2020. The block mining alone is expected to generate 20 million carats per year, contributing to the 11 million tonnes of ore the mine can process every year.

However, dwindling resources at Australia’s last operational diamond mine have made the project unsustainable in the long-term. Rio Tinto downgraded the mine’s reserves and resources from 29 million tonnes to 16 million tonnes in 2017, with mineral resources alone down to a negligible figure, and has announced that the mine will close in 2021, with the surrounding land to be rehabilitated. A contract worth AUD$7m has been awarded to mining contractor NRW Holdings to rehabilitate the mine after its closure, and Rio Tinto plans to move 450 of the Argyle workforce to its iron ore operations in the Pilbara.

Argyle is responsible for 80% of revenue in Australia’s diamond mining industry, and its planned closure in 2020/21 is predicted to lower diamond and gemstone revenues by 24.2% in the following years, according to market analyst IBISWorld.

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