the mysterious matter of the minister's mail-out

Newly-appointed Mineral Resources Minister Tom Koutsantonis has recently sent a letter to (at least some of ) his constituents - i.e. (at least some of) those in his electorate of West Torrens.

This letter deals with the issue of Arkaroola, and canvasses opinions on three options he has proposed for the future of Arkaroola.

This may seem an oddly selective way for a cabinet minister to create policy on a matter of state - indeed, national - significance. Particularly in light of the responses to the state government's own 'Seeking a Balance' 'mining access' blueprint for the northern Flinders Ranges, which was overwhelmingly rejected by respondents who simply didn't want to see the mining industry in the Arkaroola Wilderness Sanctuary at all!

(Koutsantonis also cannot be unaware of the Sunday Mail's recent polling on the matter - overwhelmingly opposed to mining across all party affiliations; a result similar to online polling sister paper The Advertiser has conducted.)

However, some of us have found the content of the Minister's letter to be even more alarming!

The letter starts out well enough -

The Arkaroola Region has long been recognised as an area of unique scenic beauty with sensitive environmental, cultural and heritage values. It is a stunning landscape, rich in flora and fauna.

No arguments there. But soon we run into this little matter -

The Northern Flinders Ranges is one of the most geologically diverse and prospective areas in Australia, with a long history of exploration and mining and potential mineral and energy resources of national and international significance.[emphasis mine]

(Labor's constant refrain with regard to Arkaroola, here given as 'with a long history of exploration and mining' is a bit like suggesting that there's some meaning inherent in pointing out that a national park has 'a long history of poaching'. Um, that don't make it a good idea, or mean that it should continue, do it?!)


ah, 'potential' - now there's a word!


But it's the bit I've highlighted that's the real worry. Now, 'potential' is one of those magic words that can carry surprisingly heavy loads - indeed, the State Government's comparison of 'potential' mineral resources with 'actual' (in reality sparsely-surveyed) biodiversity values was one feature of the South Australian Museum's criticism of Seeking a Balance.

But 'mineral and energy resources of national and international significance'? Surely you're not referring to the uranium deposits and Mount Gee here, Minister?

Here's a link to the Australian Uranium Information Centre's (UIC) 'resources' page. On it you can see that Australia holds nearly 40% of the world's uranium reserves, far and away the largest chunk of any nation. And if you click the link below the chart you'll see a link to a document entitled 'Information Paper – Uranium Resources and JORC Categories'. In it you'll see the resource at Mount Gee, which is listed as 26.9 kT (26 900 tonnes) of Uranium Oxide - U308 as an inferred resource.

What is an inferred resource? Good question! Well, let's see what it says in the same document -

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability. [emphases are in the original]

So, there's a resource of 27 kT which can be 'inferred with a low level of confidence'! Marathon's own Seeking a Balance submission, newly released under FOI, gives a figure of 28.5 kT for the inferred resource, so let's be generous and call it 30 kT all up.

Marathon also give a figure for an 'indicated resource' - 2.8 kT. That's an order of magnitude less. What does this mean? If we return to the UIC's list, we discover the following -

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.

So, we can be 'reasonably confident' that there's 2.8 kT there.


attend to your grades!


There's also a question of the grade of the resource; that is, how much of all the rock you remove is actually going to contain what you're looking for, in this case U3O8.

In Mount Gee's case it's 0.06%, and if you look at the chart you will see that's at the low end of grades for Australian reserves - Jabiluka's proven reserve of 59 kT has a grade of 0.5% (nearly an order of magnitude higher), and it's similarly large indicated (21.7 kT) and inferred (54.7 kt) resources are graded at 0.43% and 0.54% respectively. What this means is you have to dig and crush way less rock to get to the good stuff. Economically this is great news for the miners!

For another interesting comparison, the adjacent Beverly 4 Mile deposit has a 28 kT reserve - pretty-well the same size as Marathon's - but at 0.34% grade, and the In-Situ Leaching method has already been demonstrated and is operating at the existing Beverley plant! (Note: which is not in the scenic ranges!)

Bear in mind here the issue of mining underground at Mount Gee, and just how much it would cost to tunnel into the area - by far the best option environmentally, but not one without impacts, and certainly not cheap!. Perhaps unsurprisingly there's also the issue of why some in the mining industry seem to believe that Marathon Resources is proposing open pits at Arkaroola, despite the state government's having repeatedly - supposedly - ruled that out.


now, that's a deposit


Let's have a look at a an unequivocally - nothing 'potential' about it - 'nationally and internationally significant' resource, shall we? We don't have to travel far - in fact, we can stay in SA, travelling a few hundred Km's to the west to Roxby Downs and the BHP's Olympic Dam deposit.

Returning to the Australian UIC's website we discover -

Olympic Dam, owned by BHP Billiton, is the third largest uranium mine in the world, though with by far the largest single uranium resource in the world.

Mining at Olympic Dam is currently carried out by underground mining. BHP has announced plans to expand the mine from its current 4,500 tonne annual uranium oxide production capacity to 19,000 tonnes a year by 2021.

and further -

The Olympic Dam deposit in South Australia is the single largest deposit in the world.

The extent of the resource at Ranger in the Northern Territory has been confirmed as also being of world significance.

And what's the resource at Olympic Dam?

Again, according to the UIC, a total of 2.327 million tonnes - thats 2, 237 kT. Including 130 kT of proved - the highest level of confidence there is - ore reserves, and more than 1.2 million - that's 1,200 kT - of indicated and 624 kT of inferred resources. They're currently proposing the world's largest open-pit to get to it all, plus the copper and gold that is the basis of the economics of this polymetallic mine.

Need I go on?


look out for the lock out!


And yet, Minister Koutsantonis sees fit to warn his electors of the following -

Placing a ban on exploration and mining in the Arkaroola area would lock away these significant resources now and in the future. This could deny the opportunity for all South Australians to benefit from potential mining investment, employment opportunities and a return to the State from these resources, which are owned by the State.

Now, 'lock away' is about the most inflammatory rhetoric one can use in this setting - it's usually associated with diatribes along the lines of 'the Bloody Greenies want to lock away... [whatever some miner/developer hopes they'll make a lot of money out of]'. I suggest that this phrase has absolutely no place in the lexicon of a South Australian cabinet minister, let alone in a letter to his constituents!

But the idea that the owners of the world's largest uranium resource - absolutely dwarfing whatever may exist at Mount Gee - face serious hardship if denied whatever hypothetical revenue may come from a mine in the heart of the Arkaroola Wilderness Sanctuary is ridiculous!

And then there's the other mines due to come on-line. But you get my point.


taking aim at the class a zone?


And is it a coincidence that the language Koutsantonis uses just happens to look like it's consciously framed in terms of the Class A Environmental Zone legislation that covers the northern Flinders?

You know, the rules that don't allow a mine unless the resource is of 'paramount importance' and mining it is in 'the national interest'?

As I pointed out in my previous post, even Marathon Resources has conceded that it is unlikely to be able to overcome these criteria, and the Liberal Party certainly don't think so! Particularly as there's that other factor to consider -

investigations have shown that alternative deposits are not available on other land in the locality outside the zone

Not only do we have the deposit in Roxby, we have an operating U mine right next door to Arkaroola (Beverley), and, as we have seen above, Beverley's new extension - Beverley 4 Mile (notably even closer to the sanctuary!) is a deposit of a directly comparable size!

And it's not located in one of the most scenic beauty spots and biologically important areas in South australia, to boot!

So, has Tom Koutsantonis served his electors well, do you think, in failing to provide any of this context?

The failure of his own government's Seeking a Balance mining access plan and overwhelming opposition to mining doesn't even rank a mention! He tosses around 'national and international' significance [ooh, sorry, that's 'potential' significance] in relation to the deposits in Arkaroola without providing any proof of his claim. Oh, and the waste-dumping scandal and Marathon's consequent suspension from drilling has apparently also slipped his mind!

And then he finishes off with -

I am writing to seek your views on the future of the environmentally sensitive areas of the Arkaroola Wilderness Sanctuary. In essence, which of the following options would you support:

1. Complete ban on exploration and mining in the environmentally sensitive areas of the Arkaroola Wilderness Sanctuary.

2. The area should remain available for exploration and mining in the future, but only if and when appropriate and environmentally sensitive methods of mining are developed.

3. Exploration and mining should be permitted now, with appropriate and stringent environmental controls in place.

Well, I know which option I'd choose!

But has he provided the appropriate background information and the balance of views likely to mean that those readers who may be relying on his summation can make informed decisions, do you think? So what is he going to try to tell us any response might mean?

And, have you noticed option number two? Surely we can infer from it that such 'appropriate and sensitive methods of mining' are currently not developed? Oh dear... Well, I wouldn't argue!

Frankly, with a return to active drilling potentially imminent, Mark Parnell's parliamentary motion to for the state government to finally stop stuffing-around and finally announce the full protection of Arkaroola could scarcely have come at a better time!

And don't forget, you can return Koutsantonis' favour, and e-mail or phone and tell him what you think!