OZ Minerals board approves development of SA’s second biggest mine, Carrapateena, posts $81m H1 profit
UPDATED: OZ Minerals’ go-ahead to build a $916 million copper mine in the state’s far north is a “stepping stone to bigger and better things” for decades to come, company chief Andrew Cole has vowed.
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OZ Minerals’ go-ahead to build a $916 million copper mine in the state’s far north is a “stepping stone to bigger and better things” for decades to come, company chief Andrew Cole has vowed.
The milestone project, approved yesterday, will create “thousands” of jobs during construction and a full-time workforce of up to 500.
The copper and gold project will be the second largest copper mine in South Australia, behind BHP’s Olympic Dam.
Construction will start next month when work on a 550 person camp and an airstrip will begin. Mr Cole said the mine, which is expected to start producing copper in late 2019, was a historic moment for the company and SA, but there was more to come.
“I think it’s an exciting day for OZ Minerals but it’s also an exciting day for South Australia,’’ he said. “Carrapateena is a big project ... but this is only phase one for us.
“There are much bigger opportunities and longer term opportunities beyond this phase of the project ... so we just see it as a stepping stone to bigger and better things over the longer term.’’
Mr Cole said the Carrapateena mine would have a strong bias towards employing people from the Upper Spencer Gulf region, where it was already held a forum for local businesses who want to get involved.
OZ also owns and operates the Prominent Hill copper and gold mine 130km south east of Coober Pedy which has a large contingent of local workers.
“We have a recruit locally and procure locally policy,’’ Mr Cole said. “Wherever we possibly can, we hire people from the local communities and buy goods and services from the local communities and we use local companies as much as we possibly can.
“We’re just going to keep working on that hard.
“Through construction there will literally be thousands of people involved in this directly and indirectly through the different phases of the construction activity. Our workforce at Carrapateena today, about 60 people, a good proportion of them come from the Upper Spencer Gulf now.’’
There has already been a significant amount of work on site, but Mr Cole said the approval from the board would throw it into a higher gear.
“We’ve been building the Carrapateena decline (mine shaft) now since last September and we’ve developed over 2.5km of access tunnels,’’’ he said. “Under this approval however, we’ll start construction of the airstrip and the camp in the next month or so.
“Phase one is scheduled to begin next month with construction of enabling infrastructure including the accommodation village and airstrip and continuing development of the dual access decline.
“The Mining Lease approval process continues and State and Federal Government departments are working to an agreed schedule, which should see the Mining Lease granted within six months.
“The second phase, subject to mining lease approval, is scheduled to commence in the second quarter of 2018.
“This phase includes construction of the processing plant and other above ground infrastructure, installation of the underground materials handling system, construction of the tailings storage facility, Western Access Road and power line.
Energy and Resources Minister Tom Koutsantonis said we were “seeing the beginning of what will be a very large copper boom in South Australia’’. “PACE funding was crucial to the discovery of Australia’s largest undeveloped copper deposit and the Government has continued to support this major project through our Copper Strategy.’’
The State Government’s copper strategy aims to boost copper production in SA to one million tonnes per year.
“With the $600 million investment that BHP are making, creating nearly 1300 jobs at Olympic Dam announced a few weeks ago, plus this announcement, it’s making big dents in our copper road map,’’ Mr Koutsantonis said. The Carrapateena mine is expected to produce 65,000 tonnes of copper and 67,000 ounces of gold per year.
OZ Minerals said it had $625 million in the bank at the end of the financial year and could afford to fund the mine itself, without any debt, however a final decision on funding had not been made.
A concentrate treatment plant, which was originally part of the overall project and could create another 100 jobs, has been separated into a stand-alone project by the company.
”The CTP continues to offer opportunities to be a strategic differentiator for OZ Minerals
with the capacity to upgrade concentrates to 50-60 per cent copper with negligible impurities making them an attractive feedstock for customers throughout the world,’’ the company said.
“While not needed for Carrapateena, the project potentially offers future upside for both Carrapateena and Prominent Hill in light of the global trend of decreasing concentrate grades and increasing impurities in the copper concentrate market. Therefore the scope has been expanded to also include Prominent Hill concentrate.’’