MINING OUTLOOK VIEWPOINT€¦ · FRONT COVER: Julie Shuttleworth. Courtesy FMG. 64 Intellectual property 30 Understanding your ... Our journey started in Adelaide for Congress 2018

June 2018

L E A D E R S H I P F O R R E S O U R C E S P R O F E S S I O N A L S

MINING OUTLOOKCONFIDENCE HAS RETURNED

VIEWPOINTWATER SUSTAINABILITY

IRON OREMEETING MARKET CHALLENGES

DELIVERING RESULTS How mining shaped Julie Shuttleworth

AusIM

M Bulletin

June 2018

L E A D E R S H I P F O R R E S O U R C E S P R O F E S S I O N A L S

BUL-1806-Cover-withSpine-v5.indd 1 28/5/18 12:23 pm

Editor:Dominic Stevenson

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Published by:Citrus Media PO Box 20154World Square

NSW 2002Email: contact@

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THE AUSTRALASIAN INSTITUTE OF MINING

AND METALLURGYFounded 1893

Incorporated by Royal Charter 1955

See page 80 for AusIMM contact details.

The AusIMM and the editor are not responsible

for statements made or opinions advanced by

authors in The AusIMM Bulletin and accept no

liability (including liability in negligence) for and give no undertaking concerning the accuracy, completeness or fitness for the purpose of the information provided.

The AusIMM takes no responsibility for any loss

or damage that the use of this publication may cause to be incurred by reliance on information

herein; users should carefully evaluate accuracy, currency, completeness and

relevance of information and seek professional

advice relevant to their particular circumstances.

Circulation:The AuslMM Bulletin is an audited publication.

The Circulation Audit Board (CAB) audited average net distribution figure is 9702.

ISSN 1034-6775

June 2018 AusIMM Bulletin 1AusIMM Bulletin June 2018

contentsJune 2018

Lead Articles12 Profile: Julie Shuttleworth

16 The mining industry is making a comeback

22 Flexible frontiers for the future of mining

26 Exploration activity is increasing, and with it greed and speculation

30 Understanding your brain in a crisis

Viewpoints34 Water sustainability in

the resources sector

38 Improving assurance for Mineral Resource and Ore Reserve estimates and reporting

42 Member Perspectives

Special Feature: Iron Ore46 Iron ore spotlight

48 Iron ore – meeting market challenges

50 The importance of iron ore to Western Australia’s economy

56 How the ‘tyranny of distance’ affects the Australian economy

Articles58 Digital mines: the need for

restructuring university courses

64 Intellectual property – strategic use and management in the resources sector

70 Is there another looming skills shortage in Australian mining?

Regulars2 President and CEO Editorials

4 AusIMM News

8 Congress report

10 AusIMM Professional Development

32 Country Snapshot: Papua New Guinea

74 Book Review

76 Obituaries

80 AusIMM Contacts

FRONT COVER: Julie Shuttleworth. Courtesy FMG.

64Intellectual property

30Understanding your

brain in a crisis

12 Profile:

Julie Shuttleworth58

Digital mines: the need for restructuring

university courses

46Special Feature: Iron Ore

Contents

2 AusIMM Bulletin June 2018

President’s editorial

Sharing AusIMM’s Future Directions

CEO’s editorial

Bringing our strategy to life

Editorials

It is an exciting time for AusIMM. In the past 12 months we have appointed CEO Stephen Durkin, stabilised the organisation’s

operations and finances, and set our Board-approved strategy titled ‘Future Directions’.

In April and May, we have taken our Institute ‘on the road’ to celebrate our 125-year anniversary and share the work underway on Future Directions.

Our journey started in Adelaide for Congress 2018 and the launch of our AusIMM Thought Leadership Series. The energy at these events has made it clear to me that we are on the right track with Future Directions. We are working closely with corporate partners, government and industry

employers to have a stronger external profile and position ourselves as the Trusted Voice of resources professionals.

While we are making good progress, there is more work to be done. The AusIMM Board continue to work closely with the Management Team to ensure our key projects are carefully planned, closely monitored and risks are managed.

It has been fantastic to catch up with so many people at Congress, our AusIMM Awards Dinner and our Thought Leadership Series. These events have reinforced my belief that AusIMM’s strength is our people. Our professionals are the foundation of the Institute, and will be the key to our ongoing success.

AusIMM’s ‘Future Directions’ strategy is a clear and measured approach to build the AusIMM into a world-leading peak body

for resources professionals.AusIMM members are starting to see tangible results

with our relaunched Bulletin magazine, our new conference branding and a stronger social media presence. We have also increased our engagement with industry and like-minded groups including ATSE, AICD and METS Ignited.

Two further examples showcase our commitment to having a greater external profile as the Trusted Voice of resources professionals.

At our recent Thought Leadership Series, more than 1000 members across Australia and New Zealand heard the stories of the remarkable people who, over 125 years, have made up our Institute. Members also engaged with over 50 industry leaders who discussed the workforce of

the future and how technology, innovation, collaboration and globalisation will all enhance our industry.

We have also established our new Diversity and Inclusion Council. This Council will ensure that the AusIMM welcomes all professionals in the resources sector, no matter their qualification or background. A diverse industry can help us better connect to the communities we work in, and embracing a broader range of perspectives will make us a richer organisation.

These two initiatives are decisive actions aimed at AusIMM leading the big conversations influencing our industry’s future.

It has been a privilege to meet so many members in our anniversary year and hear first-hand your support for the work underway at the AusIMM. This work will better position us to represent the resources professionals who are shaping the future of our sector and society.

Stephen Durkin FAusIMMCEO, AusIMM

Colin Moorhead FAusIMM(CP)President, AusIMM

This event will include interactive panel discussions with industry thought leaders addressing the following topics:

PERTH10–11 SEPTEMBER 2018

#miningleaders2018

• Rebuilding trust in the industry• Making globalisation work

• Technological disruption• Capitalising on emerging global opportunities

Proudly supported by

• Michelle Ash, Chief Innovation Officer, Barrick Gold Corporation

• Gary Berson, Partner, Clayton Utz & Michael Maxwell, Special Counsel, Clayton Utz

• Mark Davis, Executive General Manager Operations of Australia/Africa/Asia, MMG

• Dale Elphinstone, Executive Chairman, Elphinstone Group

• Scott Grimley, Oceania Mining & Metals Leader, Ernst & Young

• Ric Gros, Chief Executive Officer, METS Ignited

• Nick Holland, Chief Executive Officer, Gold Fields

• Nicki Ivory, Partner, Corporate Finance, Deloitte

• Tony O’Neil, Technical Director, Anglo American PLC

• Nev Power, Chairman, Perth Airports Corporation

• Michael Rundus, Partner - Advisory, Ernst & Young

• Jean Savage, Vice President, Surface Mining & Technology, Caterpillar

• Dr Allan Trench FAusIMM, University of Western Australia

• Andrew Wood, Chief Executive Officer, Worley Parsons

Keynote speakers

For more information visit miningleaders.ausimm.com

R E G I S T R AT I O N S N O W O P E N

AusIMM Global Mining Leaders Conference 2018

4 AusIMM Bulletin June 2018 June 2018 AusIMM Bulletin 5

News News

AusIMM Awards Dinner 2018

The AusIMM Awards Dinner followed Congress on the evening of Saturday 21 April in Adelaide. There was a fantastic turnout to the evening and it was one of AusIMM’s biggest Awards Dinners ever, with nearly 200 people attending.

The AusIMM Awards are conferred every year and celebrate the dedication and commitment of our professional community. To read the citations of the 2018 Awards winners, visit www.ausimmbulletin.com/awards2018.

Complex Orebodies Conference 2018Brisbane, 19-21 NovemberThe greatest future challenge for the mining industry is that world demand for raw materials is projected to continue to grow for the foreseeable future and is unlikely to be met by new discoveries and recycling alone. Additional supply will have to come from existing projects that have not yet commenced production due to a diverse range of factors relating to social acceptance, environmental barriers, infrastructure, permitting, and technical challenges.

The Complex Orebodies conference aims to bring together operators, service providers and researchers covering the entire spectrum of the mining chain to focus on the innovations required to meet these technical, political, social and environmental challenges. The conference will look to identify problems and find solutions in presentations and posters covering case studies, new technologies and innovative analysis, and will provide a valuable forum for discussion across a range of disciplinary areas to seek collaborative solutions.

Visit complexorebodies.ausimm.com.

Lithium 2018 ConferencePerth, 27-28 JuneAusIMM are partnering with Murdoch University to host a bespoke conference covering the entire life-cycle of lithium. Throughout this two-day conference, global experts from industry and academia will share their knowledge, views and predictions of this unique element.

Over the past decade, lithium has become an indispensable metal used globally across a range of industries. Delegates attending this conference will be informed of the latest research, developments and innovative technologies relating to lithium and its expanding market.

The program will pragmatically focus on the successes, challenges, technical evolution, end-usage and future of lithium. The conference key themes are: • Investment, risk and economics• Lithium applications (present and

future)• Recycling and safety• Environment• Exploration and geology• Mineralogy, hard rocks vs brines

vs other• Metallurgy and processing

Conference delegates will have the opportunity to network and connect with industry experts, producers, financiers, investors and end-users. Visit lithium.ausimm.com.

New publication availableFrom Start to Finish: A Life of Mine Perspective is the newest publication in AusIMM’s highly-regarded Spectrum Series. The volume will be officially launched at the Life-of-Mine Conference in Brisbane in July, but advance copies are now available for sale through the AusIMM’s online shop.

Available in print and digital formats, this publication provides a valuable resource covering the full life-cycle of responsible mining, social licence to operate and leading practice.

Secure your copy now at www.ausimm.com/shop.


News News

Recipients of the DPP Scholarship announcedIn a joint partnership with the Australian Institute of Company Directors, AusIMM is thrilled to announce we have offered three places for senior executive women from Western Australia to take part in the Director Pipeline Program (DPP) in 2018. The AusIMM members who have been selected for the scholarships are: Catherine Galli, Sophie Hancock and Sarah Greer. The DPP is an initiative of the AICD and is designed to create a cohort of highly networked ‘board-ready’ executive women who are suitable candidates for board roles.

AusIMM is committed to the agenda of ensuring diversity and inclusion in the resources sector and this initiative specifically supports the development of women in leadership roles, in particular in pursuing non-executive director roles.

The DPP aims to enhance and develop the skills, experience and networks of senior executive women with board aspirations and provide insight on the development of board experience in the NFP, for profit and government sector to support the national diversity agenda.

Congratulations Catherine Galli, Sophie Hancock and Sarah Green – we look forward to watching you progress through the program and celebrating with you on completion.

Our global experience gives you expert, integrated solutions on everyphase of your mining project. Same team – start to finish.

The AusIMM Education Endowment Fund (EEF) Scholarships were established to support the future leaders of the resources sector through their higher education studies.

The scholarships include:• significant financial support during studies• access to quality mentoring with an industry professional• participation in a one-week intensive field trip to a

mineral-rich region of Australia• recognition and career-building opportunities• development of personal and professional skills.

Each year, the most outstanding scholarship winners are also awarded the Sir Frank Espie/Rio Tinto Leadership Award. The AusIMM is pleased to announce and congratulate our scholarship winners for 2018.

Sir Frank Espie/Rio Tinto Leadership Award• Keely Simpson-Bull, Bachelor of Engineering (Honours)

(Mining), Monash University• Zachary Barnes, Bachelor of Engineering (Mining)/

Bachelor of Commerce (Finance), University of New South Wales

Education Endowment Fund Premium Scholarships• Alexandra Turner, Master of Professional Engineering

(Mining), University of Western Australia• Anne-Sophie Parrod, Bachelor of Science (Earth Sciences),

University of Newcastle

Education Endowment Fund Scholarships – 2018 winners• Ben Kimpton, Bachelor of Science (Geology, Geophysics

and Applied Geology), University of Adelaide• Brooke North, Bachelor of Science (Mineral Geoscience),

University of Adelaide• Cody Holman, Bachelor of Mining Engineering (Honours),

Federation University• Courtney Dobson, Bachelor of Engineering (Chemical and

Metallurgical), University of Queensland• Francois Theron, Bachelor of Mining Engineering/Bachelor

of Commerce, Curtin University (WASM)• Jack Kent, Bachelor of Engineering (Honours) (Mining),

University of Adelaide• Jake Andrijasevich, Master of Professional Engineering

(Mining), University of Western Australia• Jamie Porter, Bachelor of Engineering (Mining), Curtin

University (WASM)• Joseph Behan, Bachelor of Science (Geophysics)/Bachelor

of Business (Human Resources Management), University of Tasmania

• Patricia Wibisono, Bachelor of Engineering (Mining)/Bachelor of Commerce (Finance), University of New South Wales

• Rachael Xu, Bachelor of Chemical Engineering (Honours)/Bachelor of Finance, University of Adelaide

• Sophie Peterson, Bachelor of Engineering (Honours) (Mechanical), University of Wollongong.We had a large number of exceptional candidates and this

is reflected in the awarding of 16 scholarships in 2018.

IMVAL and the AusIMMThe International Mineral Valuation Committee (IMVAL) was formed at a meeting of international valuation experts held in Brisbane during the 2012 VALMIN Seminar Series. The VALMIN Code (The Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets) provides a set of fundamental principles (Competence, Materiality and Transparency), mandatory requirements and supporting recommendations accepted as representing good professional practice to assist in the preparation of relevant Public Reports on any Technical Assessment or Valuation of Mineral Assets.

IMVAL promotes best practice in formulation and use of mineral valuation codes, promotes the formulation and use of mineral valuation codes in jurisdictions where there is an apparent unfulfilled need, and advocates for the harmonisation of the various existing national codes.

The VALMIN Committee, a joint committee of the AusIMM and the Australian Institute of Geoscientists (AIG), has two representatives on IMVAL: Dr Bill Shaw FAusIMM(CP) and Steve Gemell FAusIMM(CP). The IMVAL Chair rotates every two years, and in February this year the role was passed on to VALMIN representative Steve Gemell. The AusIMM has taken on the role as host for the IMVAL secretariat for the two-year term.

For more information visit www.ausimmbulletin.com/IMVAL.

Keely Simpson-Bull and Paul Espie. Zachary Barnes and Paul Espie.


AusIMM Congress 2018 AusIMM Congress 2018

AusIMM congress 2018 – Future DirectionsJanine Herzig.

Caption here please.

A usIMM Congress was held from 20-21 April in Adelaide, South Australia, with a theme of ‘Future Directions’. Congress 2018 marked the official launch of AusIMM’s 125th anniversary celebrations and

commemorated the inaugural AusIMM meeting in Adelaide in 1893.

Congress is a key part of AusIMM’s annual strategic planning. It is attended by the AusIMM Board, Management Team and representatives from AusIMM’s Communities of Interest (Branches, Student Chapters, Societies, Networks, Committees and Taskforces).

Since Congress 2017, held last April in Newcastle, the AusIMM has undergone a series of reforms to position the Institute for the future. This includes appointing new CEO Stephen Durkin, stabilising the organisation’s operations

and finances, and setting a new strategic direction. This strategic direction was formulated with input from Congress 2017.

At Congress 2018 the AusIMM Board and Management Team shared the AusIMM’s ‘Future Directions’ strategy and the work now underway to make the AusIMM a more contemporary organisation with a stronger external profile to better represent resources professionals.

The Congress program included updates on the new strategy, including detailed presentations and workshop sessions on:• Digital transformation• Partnership model• eTraining platform• Trusted Voice initiative• 125th anniversary.

There were also presentations from a number of AusIMM members on topics including the workforce of the future, course recognition for para-professionals, AusIMM involvement in the International Mineral Valuation Committee (IMVAL), the Chartered Professional Program and the membership application process.

The AusIMM AGM was also held on Saturday 21 April, with the 2017 finances being approved and auditors appointed.

The AusIMM Board followed up Congress with a meeting in May 2018 to discuss key outcomes.

Alongside Congress, the AusIMM also hosted two significant events for delegates and supporters of the Institute. The launch of the AusIMM 125 Anniversary Thought Leadership Event series took place on Friday 20 April at the Adelaide Oval. On Saturday 21 April, the AusIMM hosted its Annual Awards Dinner, recognising the outstanding achievement and dedication of the professionals in the resources community.

Members can find more information about Congress 2018 at ausimm.com/congress.

AusIMM announces President-electDuring Congress 2018, Janine Herzig, a Fellow and Chartered Professional of the AusIMM, was elected to the role of President for 2019.

Janine has more than 25 years’ experience in the minerals industry, encompassing executive management, consulting, technical and production roles.

After graduating with a Bachelor of Engineering in Mineral Processing, Janine started her professional career as a metallurgist at Mount Isa Mines, before working in numerous locations, across a diverse range of commodities, and rising to senior and then principal metallurgist.

She moved to Adelaide in 2005 to take on the role of General Manager for Amdel (now Bureau Veritas) before establishing a metallurgical and management consulting business in 2009.

‘It is exciting to be part of AusIMM’s 125th anniversary celebrations, and it is a true honour to be elected to this important leadership role and to help shape the direction for the next 125 years’ said Janine.

‘I am very passionate about the resources sector and the important role of professionals in driving innovation and the highest professional standards.’

‘It is important that our professionals lead the way in fostering a workplace culture that attracts the best and brightest students and graduates to ensure the future success of the minerals industry, the AusIMM and the prosperity of Australasia and the rest of the world.’

Janine remains an active member of the AusIMM Adelaide Branch, which she chaired in 2011-12, in addition to her role as a Director. She was elected to the AusIMM Board in 2013 and has Chaired the Policy and Advocacy Committee since 2014.

Janine will commence her term in January 2019.

conference.ausimm.com

Network with your peers during the 2018 AusIMM conference series

COMPLEXOREBODIES

COB

International Uranium Conference

Adelaide | 5-6 June

Life of Mine Conference

Brisbane | 25-27 July

International Lithium Conference

Perth | 27-28 June

Mine Waste and Tailings Conference

Brisbane | 23-24 July

Global Mining Leaders Conference

Perth | 10-11 September

14th Mill Operators’ Conference

Brisbane | 29-31 August

Narrow Vein Mining Conference

NZ Branch Conference

Perth | 13-14 September Tauranga | 17-18 September

AusRock: The Ground Control in Mining Conference

Sydney | 28-30 November

Complex OrebodiesConference

Brisbane | 19-21 November

New Leaders’ Conference

Sydney | 24-25 September

conference.ausimm.com

3-5 April 2019

Auckland, New Zealand

PACRIM 2019 Conference

27-29 May 2019

Sydney

SDIMI 2019 Conference

22-24 July 2019

Perth

Iron Ore 2019 Conference

9-10 September 2019

Perth

MetPlant 2019 Conference

11-13 September 2019

Perth

World Gold 2019 Conference

CONFERENCESERIES

2019

MORE TO BE ANNOUNCED SOON

A truly global

gathering of resource

industry professionals.

International event

Presentations by leading

industry figures with

opportunities to interact.

Industry keynotes

Your chance to engage with

industry peers and

international companies.

Networking opportunities

Attend world-class

workshops and technical

talks to earn PD hours.

Professional development

All conferences feature

Professional development opportunities Australasia wide

June 2018 AusIMM Bulletin 1312 AusIMM Bulletin June 2018

Profile

‘Never give up’: how Julie Shuttleworth turned her passion into a career

Julie Shuttleworth’s interest in rocks started very early, and ultimately led her to the top of one of the world’s major iron ore producers

Liz Swanton

Profile

and she says that spending 12 years working in China and Tanzania was a great professional experience, but there were personal gains as well.

‘As Process Manager for the Buzwagi Project in Tanzania, I was responsible for developing a gold mine from feasibility study, through design, engineering, sourcing equipment, organising contract services, construction, recruiting and training a team, commissioning the process plant and taking the mine into operation.’

A major achievement was the creation of local jobs – more than 90 per cent of the company’s Tanzanian employees had never worked in mining before, so Julie and her team trained thousands. There were wider benefits to the community too, with the company building schools, water wells and health facilities.

‘That whole process of bringing a mine from paper through to operation, contributing to the community, and then becoming General Manager, responsible for the whole site at the age of 35, was a highlight of my career.’

When Julie started with Canadian gold mining company Barrick in Africa she was the plant metallurgist. She credits her superintendent – Dave Anthony – as being a great mentor as she followed him one step at a time up the career ladder.

‘Dave encouraged me to have more confidence, to say what I was thinking in meetings rather than just staying quiet and improve how I presented myself. He ensured I had varied work experiences to enhance my career development. Dave made sure head office knew about my achievements, when promotion opportunities arose he was very supportive and made sure the relevant people knew I could do the job.

T alk to Julie Shuttleworth, deputy CEO of the Fortescue Metals Group, and it’s easy to understand why she has done so well. Her passion and enthusiasm for her work are palpable.

That positivity and drive started in childhood, as did the focus that helped take her to the top of her chosen field. Born and bred in Pemberton, in the southwest corner of Western Australia, Julie loved spending time with her father, absorbing his knowledge of rocks and mechanical skills – such as how to fix cars and tractors. She also knew she preferred the bush to the city. The future was being shaped.

‘We had family field trips where Dad would describe how various landscapes and rock types were formed. I really enjoyed learning those things, and yes I definitely had a rock collection!’ she laughs.

Julie loved science, particularly chemistry, but as she moved through high school she knew she wasn’t cut out to wear a lab coat and work inside all day. Her love for rocks, machinery and the outdoors led her to research careers until she found a solution. Studying a double major in chemistry and extractive metallurgy took her where she wanted to be – the mining industry.

‘I started out focusing on being a highly competent and value-adding metallurgist, with strong technical skills, then I learnt more about leadership as my career progressed,’ says Julie, who maintains that delivering measurable results to an employer is key to building a career.

Julie was Telstra Businesswoman of the Year (WA, 2012) and spent 20 years in gold and copper mining before joining Fortescue’s iron ore operations in 2013. From 2015-2017 she was General Manager of Fortescue’s Solomon Mine,


‘From him I learned a lot about leadership. When we met I was a metallurgist and at the end of our time working together I was a general manager, so he was very impactful along that journey.’

Julie doesn’t believe today’s career challenges are much different to 20 years ago. Yes, she says, technology is definitely advancing, but the basics are still important: gaining good technical background and exposure, mastering your job and learning leadership and people skills along the way.

‘At some point you have to decide if you will be a people leader or a technical leader and that’s a challenge facing young professionals. I could have gone more technical and become a company’s group metallurgy leader, but I found my interest in operational leadership and that’s why I took the route to general manager.

‘When I mentor young women, these are the questions they are asking. Young engineers are wondering if, and when, they should get operational and supervisory experience and trying to decide what will be best for their careers.’

Julie is a natural ‘go-to’ person for women in the sector, but she is adamant her ‘golden rules’ apply to both men and women, and are the parameters she has used for her own career.

‘Have a positive attitude, be authentic to yourself, be confident, be willing to “give it a go” and make sure you deliver results for the business.

‘A positive person really makes a difference to the team, be positive in your attitude, what you say and your body language – do things that give you positive energy, that recharge you and keep you happy.’

Julie says authenticity is as important as positivity. She remembers her early career when she started swearing and trying to fit in with everyone else around her, but she soon realised she didn’t have to do this to be successful.

‘Reflecting back, that was a good learning experience and now I tell young women entering the industry they just need to be themselves.

‘You don’t have to change who you are to try to fit in. Maintain yourself, your authenticity, your personality, principles and character. Being authentic develops trust and respect from others, it reduces your stress, increases resilience and makes you happier.’

Julie believes it’s important for women not to get caught up thinking things should be different or harder because of gender. Rather than thinking about barriers, focus on doing the job effectively.

‘Lead by example, have confidence in yourself and add value. That’s what earns you recognition, respect and career advancement.’

She also advises anyone wanting to progress their careers to ‘go for it!’. There are always challenges, she says, and it’s important to work through them.

‘Talk about your career aspirations to people who can help you. Use role models, networking opportunities and ask someone to be your mentor. Never be afraid to give something a go, even if you don’t have the perfect experience.’

While not one of Julie’s ‘golden rules’, this one could be. Twenty-twenty hindsight has shown she could have put herself under less stress by trying not to be such a perfectionist, particularly at the start. It’s good advice.

‘I definitely have a better handle on managing stress now. I think “will it really matter in two days or two weeks or even 20 years?”, and that puts it into perspective.

‘I could have learned earlier not to try to do everyone else’s job. Don’t try to do everything because you want it done

quickly or to a specific standard. I had to learn to be more patient and wait a bit longer for things to get done, empower others more, and now I am very good at delegating!’

Delegating is perhaps even more important these days, because Julie is not just making time for herself, but also for husband Brett and son Jett, who is two years old.

Julie did many years of fly in, fly out (FIFO) work in her previous roles, and admits it can be hard when there is a child involved, but she didn’t worry because she knew he was well cared for. Her husband Brett works from home and the couple also has help from Brett’s mother and an experienced child carer – and Fortescue is family-friendly.

‘I was on a really good roster, four days on and three days off. For me it was about mentally getting my head in the right place when I was away, making the most of opportunities and having several quality days off with my family.

‘Our company has a lot of family-friendly initiatives in place. We have job sharing arrangements available for FIFO personnel, family days at site, and childcare facilities for those working in the Perth head office.

‘We also have a career resiliency program for emerging women leaders, and a lot of focus on getting women back to the workplace when they’ve had a family. More than 95 per cent of women who have gone on maternity leave have come back to work.

‘I had so much positive support from operator level to managers, executives, the chairman and the board, through my pregnancy and maternity leave and coming back to work. It was really wonderful.’

She is often asked for advice about getting into the resources sector, and says the most important thing for young people is to understand the broad range of opportunities available and choose something they find interesting and enjoyable.

‘Not many people get the opportunity to visit a mine while

at school, but there are other ways to find out. Research career possibilities, attend industry career days and research courses offered by higher education facilities. Choose the right subjects at school to keep your options open.’

Julie’s own decision-making process was very proactive. She went to science summer school during school holidays, did some seriously in-depth research on careers and courses, and used university holidays to get work experience, something she insists is vital.

‘This was key in giving me an early understanding of what the mining industry was about. It made me realise “yeah, I really love this and I want to keep doing it”.’

However university isn’t the only way into the mining industry and Julie is keen to emphasise this. There are a wide range of trades crucial to a mining operation, where women are currently under-represented, and there are other opportunities where expertise is not necessary but a ‘give it a go’ attitude can pay dividends.

‘It’s really about getting a foot in the door the best way you can. I tell people to never give up. I’ve seen women start out doing landscaping, cleaning, support services, trades assistants and other roles. They become well known for their attitude and work ethic, and are then often given other opportunities.

‘It is hard to get into the industry if you don’t know anyone, so I suggest networking opportunities such as AusIMM Women in Mining Network events. And it’s not just about women. Anyone wanting to get started in the industry needs to get involved in groups aligned with the industry because some of the people you meet will help get you a job.’

Her belief in the power of networking led to Julie joining AusIMM in her first year at university. Currently she is a Fellow and a Chartered Professional (Management) of AusIMM, but she is proud of an association that garnered an AusIMM scholarship to help her at university and later a travel grant to study mining in North America. She also became a founding committee member of the AusIMM Perth Student Chapter, and currently serves on the AusIMM Council for Diversity and Inclusion.

‘Attending AusIMM networking events and conferences gave me a great start to my career technically and helped me to start building my networks. Another positive was the free food and drinks, which was a big bonus for a uni student on a tight budget!’ she laughs.

‘I’ve been actively involved for many years now, including speaking at a number of events. Knowing I am part of a professional, world-class institute has been an important part of my career journey.’

Profile Profile

‘Have a positive attitude, be authentic to yourself, be confident, be willing to “give it a go” and make sure you deliver results for the business.’

Julie with her son Jett and husband Brett.


S ince the first Mining Business Outlook Report was launched in 2010, Newport Consulting has spent eight years mapping the latest trends, challenges and opportunities impacting Australia’s mining sector. Each year, we have canvassed the views of

leading mining executives and stakeholders to gather first-hand insights on the peaks and troughs of the sector.

The 2017-18 report demonstrates the clear revival of Australia’s mining sector, with renewed optimism for the future driven by a recovery of commodity prices and a focus on technology and automation as the way forward.

Recent price growth has clearly restored confidence among miners for 2018. However, the future is far from clear, with the world’s second biggest mining company, Rio Tinto, selling its coal assets in Australia and Indian energy giant Adani facing huge opposition for its Carmichael coal mine in northern Queensland. The growing influence of the environmental lobby is clear within the thermal coal sector also.

Key findings in the 2017-18 Mining Business Outlook Report

1. Renewed hope for the future Over the past five years, there has been a distinct rise in optimism among miners. The outlook is no longer bleak, with leaders expressing renewed confidence in the sector’s revival. In 2014, 93 per cent of miners surveyed were not optimistic about future growth. This was when the twin challenges of low commodity prices and environmental activism were having their greatest effect. At that time, miners were holding the line, often operating at a loss but maintaining supply contracts and take-or-pay agreements with rail and port partners. In the latest report, those surveyed who were not optimistic about future growth has fallen to 13 per cent, and 71 per cent of respondents are cautiously optimistic about future growth. A further 17 per cent are very optimistic. The resources boom that began in 2003 lasted ten years and the pain associated with its end has taken time to work its way through the global economy.

2. Commodity prices on the riseThe rise in commodity prices has stirred further positivity in the sector. Miners are experiencing a good outlook for future orders and reduced operational costs. The restoration in confidence comes not only from the recovery of commodity prices, but also a growing belief that they will be maintained. They’ve been high for long enough for miners to begin to plan future operations based on the recovered prices remaining in force.

3. Market consolidation continues The tide is turning towards global partnerships, with governments investing in international markets. The report findings indicate that one in three leaders are concerned over the impacts of market consolidation, mergers and acquisitions. In uncertain times, miners are reluctant to form new partnerships due to the financial and reputational risks involved. An equal number of leaders indicated that government investment in overseas operations has lowered the demand for commodity investment in Australia. To keep Australia’s mining industry progressing, there is increased pressure on the government to form deals and agreements with global giants like Adani. A further one in three miners believe that the market is looking for high-quality resources, which Australia isn’t providing. Australia is not lacking in high-quality resources but the increasingly difficult regulatory environment is making other markets more attractive and less risky than Australia. With global giants turning to South America and Africa as key areas of investment, Australia’s mining sector faces ongoing challenges in attracting investment.

4. Spending looks promising Over the last three years, capital spending and investment has moderately increased. After a significant reduction in spending in 2014-2015 during the price collapse, 2016 began to look more hopeful. In 2017-2018, the rise in spending has continued, with almost half of leaders moderately increasing spending (Figure 1). It appears that industry spending has stabilised and looks promising. Just four per cent of miners are reducing costs this year. However, with demand for thermal coal on the downward slope, miners are cautious about spending in this area. Mineral exploration is the biggest area of investment in mining, with gold accounting for almost half of total exploration expenditure. Western Australia is taking centre stage as the state with the most activity.

‘With global giants turning to South America and Africa as key areas of investment, Australia’s mining sector faces ongoing challenges in attracting investment.’

The mining industry is making a comeback

Newport Consulting’s 2017-18 Mining Business Outlook Report shows that confidence has returned, and investment will follow with the right government policy support

David Hand, Managing Director, Newport Consulting Ltd

Mining business outlook

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5. Companies are hiring again After a huge reduction in hiring during the mining bust in 2014-2015, the number of companies hiring has risen by 25 per cent in 2017-2018, creating new opportunities for the next wave of talent. This year’s report indicates a positive long-term outlook for employment growth. Over half of leaders indicated that employment is set to stabilise over the next 12 months (Figure 2). The number of job openings in the mining sector grew by 70 per cent at the start of 2017, compared to the same period in 2016. Job opportunities in mining are growing faster than any

other industry and appear to correlate with a spike in metallurgical and thermal coal prices that occurred earlier in the year. In the face of uncertainty, there is an increased focus on job security among miners. Despite the ongoing challenges of disruption and the gig economy, the solid increase in hires and job openings suggests that labour market conditions are improving.

Upskilling the future workforceWith disruptive technologies set to transform the Australian mining industry into the ‘digital mine’, many companies are concerned that Australia will not be able to fill a growing skills gap in the workforce. Training and developing talent is a key way to stay ahead of disruptive automation and technology and leverage these trends for competitive advantage. Training in robotics for mining workers is now available to produce the workforce necessary for the digital future, along with data analytics and management of complex IT systems.

Overall, Australia’s mining sector is seeing a distinct culture shift and is changing its operations in response to digital disruption.


‘Australia’s mining sector is seeing a distinct culture shift and is changing its operations in response to digital disruption.’

Mining Business Outlook

This call for abstracts seeks the submission of practical and applied case studies for presentation at the Congress.

The organising committee encourages collaborative works and urges young professionals and students to make submissions and participate in the extensive and technical networking opportunities this Congress will offer.

The Congress will also offer a series of workshops and field trips in New Zealand and the western Pacific for professional development, and a full social program for additional networking opportunities.

We welcome abstracts with a geophysics and multidisciplinary focus that fall under any of the Congress themes.

1. Mineral System UnderstandingMineral system and exploration targeting; mineralisation processes; multi-scale characterisation: atoms to cratons; geometallurgy of PACRIM deposits; and data in geoscience.

2. Exploration, Mining Investment and New Project DevelopmentsAdvances in exploration techniques; and mining investment issues and examples and new project developments including technical and broader community interaction and social performance aspects.

3. Mineralisation Styles Epithermal systems; IOCG and related deposits; magmatic Fe-Ti-Cr oxide and Ni-Cu-PGE sulphide deposits; orogenic Au; intrusion-related Au; porphyry deposits; skarn and replacement deposits; VMS/SEDEX and modern ocean floor systems; and sediment hosted/carlin style deposits.

4. Provinces and Case StudiesChina, Malaysia, Vietnam and Laos; New Zealand, Western Pacific and eastern Australia; PNG, Indonesia, Philippines; Chile and South America; and Northern Pacific Rim (North America and Russia).

C O N G R E S S T H E M E S

C O S P O N S O R E D B Y

30 JULY2018

DUEAbstract submissions for PACRIM 2019 are now open.Please submit your abstract not exceeding 300 words via the speakers portal on the conference website.

For further information please contact:Claire Stuart, [email protected]

Call for abstracts open

visit pacrim.ausimm.com

AUCKLAND3–5 APRIL 2019

#pacrim2019

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Rise of the machines: automation, drones and big data To remain competitive and enhance productivity, many miners have begun to adopt new technologies and innovations, such as drones and making use of ‘big data’. Of the survey respondents, two in three are focusing on drones and automation to enhance inspections, planning and scheduling. The top technology trends impacting the market over the next 12 months are predicted to be automated haulage vehicles (21 per cent), big data (17 per cent) and drones (16 per cent). Drones are increasingly being used to map, survey and explore mines in Australia. Over the last five years, both miners and the government have increased investment in drone technology to safely collect data and explore Australia’s open pit and underground mines – including areas that would otherwise be inaccessible.

Meanwhile, big data offers powerful tools for streamlining data management, collecting valuable data, and better tracking costs and profitability. In today’s digital world, real-time reporting can enable miners to control costs more efficiently, connect with stakeholders and ensure the overall viability of the business.

Call to governmentIn 2017-2018, almost three quarters of those surveyed are calling for the Australian government to focus on three areas in particular: power costs and water supply (27 per cent), industrial relations (IR) law changes (23 per cent) and maintaining control of unions (23 per cent).

As global mining market conditions have coped with the steep decline in prices over the past three years, companies have looked to their workforce to share some of the challenges just as they shared in the benefits of high commodity prices. Mining companies are now looking to governments to help constrain demands from unions and to increase flexibility of working conditions.

Power costs and water supply have emerged as a key action point for the government. These are key areas where government environmental and pricing regulations have a direct impact on key input costs to the industry. Companies are concerned that governments will compromise the viability of the industry in favour of environmental lobby groups at the expense of economic prosperity.

Since 2014, there has been a 19 per cent rise in industry concern over unions, with unions continuing to lobby for better pay and working conditions. While there has been a significant 38 per cent drop in concern over IR laws, it remains a key concern for the industry.

ConclusionNewport Consulting’s 2017-18 Mining Business Outlook Report highlights that optimistic sentiment is returning to the industry, bolstered by rising commodity prices and exciting developments in technology. However, there are key challenges that remain – including ensuring a skilled future workforce – and support from the government will be key in securing a positive future for the sector.


P L A T I N U M S P O N S O R S

G O L D S P O N S O R S

milloperators.ausimm.comFor more information visit

BRISBANE29–31 AUGUST

#millops2018

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The 14th AusIMM Mill Operators’ Conference 2018

• Best practice in plant operations

• Operating updates and newly commissioned plants

• Geometallurgy

• Pre-concentration

• Comminution circuit operation and optimisation

• Flotation circuit operation and optimisation

• Gravity circuit operation

• Hydrometallurgical operations

• Emerging technologies

• Dewatering

• Automation

The conference provides opportunity for plant operators, metallurgists, engineers and suppliers to learn, share and network with others in the minerals industry.

Keynote Speakers

visit milloperators.ausimm.com

R E G I S T R AT I O N S N O W O P E N

JP FranzidisUniversity of

Cape Town

Andrew NewellMAusIMM (CP)

RPM Global

Peter MunroFAusIMM

Mineralis Consultants Pty Ltd

Neville PlintSustainable

Minerals Institute

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At Unearthed, we believe in the power of entrepreneurship to transform individuals and communities, to create economic opportunities and to address global challenges.

For our industry collaborators, this means access to a global network of innovators, with whom they can engage according to their needs. They can benefit from the globally distributed nature of talent and apportion risk differently.

One approach is to hold an online competition such as those run by Unearthed. Why hire 20 data scientists when you can access 200 individuals with the best digital talent from 20 countries to solve your specific industry challenge over a week, aligning interest for both companies and participants for the length of the competition, with the possibility of ongoing engagement?

What is important for our community of students, entrepreneurs and innovators is accessing verifiable challenges and real opportunities, which in turn improve the efficiency and competitiveness of the energy and resources sector.

According to a McKinsey & Company February 2017 report, entitled ‘Beyond the Supercycle: How Technology is Reshaping Resources’, technological advances will change supply and demand dynamics in the resource sector, raising productivity, increasing energy efficiency and unlocking value of between $900 billion and $1.6 trillion to the global economy by 2035.

Since our first hackathon, over 4000 individuals have engaged with Unearthed, forming a talented and ever-expanding network of innovators across Australia, South Africa, the US, Canada and South America.

With the support of our resources technology community, we have run 26 hackathons in 14 cities, six online competitions, two accelerator programs and four demo days; addressed over 100 industry challenges generating terabytes of data; witnessed the development of over 400 prototype solutions and distributed over $250 000 in cash and $150 000 in credits and prizes.

So, over the last five years, how have we seen energy and resources sector organisations stretch their borders? Let’s look at a few companies who have benefited from leveraging external talent, skills and opportunities.

Hydro Saver Over four weeks from 22 January-19 February 2018, Newcrest and Unearthed ran Hydro Saver, the first trial online challenge of The Newcrest Crowd, a crowdsourcing industry platform powered by Unearthed.

Many energy and resources sector businesses are finding it challenging to set their borders to meet staff resourcing needs in the face of significant technological transformation.

Traditional ‘hard’ organisational borders rely on sourcing and hiring smart tech talent or upskilling existing employees internally. The alternative is softer, permeable borders that can take advantage of external talent, skills and opportunities.

Hydro Saver was the pilot in a forthcoming series of online challenges to be hosted on the Newcrest platform. Analytically ambitious participants were invited to develop an algorithm that predicted mine tailings underflow density, thereby helping to recover water for reuse within one of Newcrest’s processing plants, ultimately providing cost, environmental and social benefits.

Participation in the Hydro Saver online challenge was truly global, with entrants from countries such as Canada, India, the US, Argentina, China and South Africa. 150 highly-skilled individuals formed teams who submitted over 750 predictive models.

‘The Hydro Saver online challenge was a resounding success,’ said Newcrest Chief Information and Digital Officer Gavin Wood. ‘We had 25 teams from over ten countries competing to devise a method capable of predicting tailing underflow density three hours ahead of time,’ he said. ‘Newcrest is very proud to be leading the world in leveraging crowd sourcing through this innovative platform, solving highly complex business problems for the mining industry.’

Unearthed is excited by this program of challenges that allows the best innovators worldwide to identify, develop and implement new solutions for real-world, multimillion-dollar applications. Hydro Saver is the first of an ongoing series of challenges that will open real opportunities in one of the world’s largest industries.

Digital Tribes HoustonFrom 16-23 February 2018 at Station Houston, Unearthed hosted the second of two Digital Tribes hackathon events. Digital Tribes Houston was an initiative from Unearthed and BHP to attract more digital talent to the industry and pre-empt the wave of digital disruption that is poised to hit.

Technological advances will come about by what we see as an addition to the resources sector – crowdsourced digital talent. And the Digital Tribes Houston hackathon event brought together a local and international community of innovators to be a catalyst for this transformation. The week-long hackathon event offered $5000 in prize money, with an additional $2000 awarded on the final night of

The concept of companies with porous borders that can expand and contract depending on organisational needs is not a new one.

According to Shaughnessy and Vitalari, these are called ‘elastic enterprises’ (2012). An elastic enterprise is one where growth and profitability rely on a range of external factors and automated business relationships that help scale business at low cost relative to the returns made possible by elasticity.

‘At Unearthed, we believe in the power of entrepreneurship to transform individuals and communities.’

Flexible frontiers for the future of miningHow energy and resources sector organisations can expand and contract their borders to benefit from external talent, skills and opportunities

Justin Strharsky, Founding Director, Unearthed

Flexible frontiers in mining Left: Innovators and industry change makers at Unearthed Perth 2018.


judging, as well as a three-month paid work experience in technology at BHP Petroleum in Houston.

‘It’s not just the diversity of skills in total that are here, but even on the teams, some of the best ones are the ones that have a mixture of backgrounds, due to the tension of different backgrounds working together. Ultimately, it’s a step up in the creativity of the solution,’ said David Purvis, Vice President, Engineering, BHP Petroleum.

‘One of the biggest benefits for me has been the way we’ve built relationships. I honestly can’t think of how I would have come in to contact with you guys in the absence of an event like this. We are hugely appreciative of what you’ve brought here,’ said Geraldine Slattery, Asset President Conventional, BHP Petroleum.

Komatsu: Transform MiningAnother important community for industry to open up their borders and engage with is the resources technology entrepreneurial ecosystem.

Fourteen start-ups comprising over 50 innovators came together at co-working and tech hub River City Labs in Fortitude Valley, Queensland from 23-25 February 2018 to take part in a mining technology hackathon with a twist – Komatsu: Transform Mining.

On opening night, start-ups pitched their existing technologies to Komatsu, and then over the weekend,

bucket teeth to test our algorithms on. We can’t wait to engage with Komatsu further on our site visit. It only takes us 6-8 weeks to develop an algorithm, so we think that this agility will prove attractive and valuable to Komatsu,’ said Stewart.

Unearthed Accelerator Brisbane Demo DayOn 1 December 2017, over 120 resources industry executives, METS professionals, government supporters, technology entrepreneurs and investors gathered at Advance Queensland’s The Precinct in Fortitude Valley, Brisbane for Unearthed Accelerator Brisbane Demo Day 2017.

Accelerator Demo Day was a celebration of the start-ups, supporters and mentors that made the 2017 program so memorable, and a chance for the dynamic start-ups to show how much they grew over six months and demonstrate their readiness for investment and success in the energy and resources sector.

Keynote speaker, Origin General Manager, Strategy & Execution Felicity Underhill explained how Origin became involved with Unearthed at the Brisbane hackathon in April 2017, and how they sponsored the Accelerator program as a result of that experience.

‘The Accelerator itself has had a number of benefits for us. It has been an awesome opportunity for our mentors to engage and energise as a development activity, it has helped us make connections internally, and it has provided us access to new ideas,’ said Underhill.

The Unearthed Accelerator 2017 was an incredible collaboration of a community Unearthed is trying to foster between industry, government and start-ups.

SiteSee Sales Director and Co-Founder Lachlan Crane said that prior to the program, SiteSee was focused on one industry vertical.

‘The Unearthed Accelerator program challenged us to take a step back and look at the core principles of our service, and then apply that to other industry verticals. So, since then we have delivered projects within the oil and gas sector overseas in Papua New Guinea, and as of today, with Demo Day, we are receiving a lot of inbound inquiries from

the entrepreneurs worked closely with Komatsu mentors and personnel from across the business, who offered deep insights into their current operations, technology gaps, implementation, integration, and future vision, with a view to finding the most accelerated path to direct collaboration. On closing night, participating start-ups pitched their engagement model prototype to the esteemed judging panel.

Komatsu General Manager Ryoichi Togashi said that innovation is created by a sense of crisis as a driving force. Through hackathons with outside members who are familiar with mining sites, customers and advanced technologies, Komatsu can access results that cannot be achieved by in-house development.

PETRA Data Science Managing Director and Founder Dr Penny Stewart and PETRA Data Scientist Arun Prakash Pillal (whom Penny hired following their introduction at Unearthed Brisbane 2017) took out first place for their ShovelVision AI prototypes in response to both the ore characterisation and Ground Engaging Tools (GET) challenges.

In addition to winning a $5000 innovation voucher and $3000 in AWS credits, PETRA Data Science has earned an all-expenses paid trip to a global Komatsu site to fast-track implementation of their algorithms.

‘This event has been a brilliant opportunity to apply our skills to multiple unstructured data challenges. We are very excited to have won and have already received 100 photographs of

international resources companies who are wanting to work with us, which is exciting,’ Crane said.

Canaria CEO and co-founder Alex Moss said that if you are trying to do something that is a little bit unusual or niche in the resources and mining sector, Unearthed is hands down the only Accelerator in the world that is suited to you.

These are a few examples of how resources sector businesses can flex their organisational frontiers to access digital talent in the face of significant technological transformation. The $1.6 trillion opportunity for increased productivity, sustainability and competitiveness is there for the taking – for both industry and innovators alike.

Details on Unearthed and its innovation platform that crowd sources solutions for the resources sector can be found at portal.unearthed.solutions.

‘The $1.6 trillion opportunity for increased productivity, sustainability and competitiveness is there for the taking.’

Flexible frontiers in mining Flexible frontiers in mining

ReferencesMcKinsey & Company. 2017. How technology is reshaping supply and demand for natural resources [online]. Available from: www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/how-technology-is-reshaping-supply-and-demand-for-natural-resources.

Shaughnessy H and Vitalari N, 2012. The Elastic Enterprise: The New Manifesto for Business Revolution, 1st ed, 172 p (Telemachus Press, LLC).

Canaria CEO and co-founder Alex Moss pitching at Unearthed Accelerator Demo Day 2017.

Nathan Reddy, winner of Digital Tribes Houston 2018.


other than an opportunity. You can only put a price on it, and this comes down to how effectively the elusive prize that is being sought can be articulated, and the willingness or abundance of supporters to inject capital.

In a true technical sense, while ‘exploration’ companies are quite common, ‘discovery’ companies are scarce – few explorers make a discovery. Even so, the market may begin to ascribe some value as the ‘size of the prize’ is digested. As a result, exploration targets can become reasonably well priced – but this requires a receptive audience. Every so often, the collective speculative herd becomes so optimistic and greedy that pricing (with respect to risk) becomes well overdone.

Gold nuggets and racing pulses During 2017, a modern-day gold rush began in the Pilbara region of Western Australia. The charge has been led by a Canadian listed company, Novo Resources, which has established a significant ground position in the region over several years and has championed an exploration target based on Witwatersrand-style conglomerate hosted gold. This is clearly a substantial prize – around one quarter of all gold ever mined has come from the Witwatersrand, so the analogy offers huge potential.

But the local geological and stockbroking community has remained reserved. Commentary regarding the ‘Pilbara gold

T he availability of exploration funding is an excellent barometer of the state of the mining cycle. The investment market reaction to exploration results and concepts also provides an indication of risk appetite – with

a spectacular recent example coming from Australia’s north west, which may have been the spark that reignited investor interest in exploration.

Sentiment drives exploration – and activity is reboundingIn the modern resources sector, the vast majority of explorers are funded by the stock market – they don’t generate much (or any) cash so have to raise exploration funds from investors. To obtain funding, companies need to promote themselves – which is as much about clearly articulating the facts of a story as it is about selling a dream. Effective promotion of exploration concepts has become as influential as technical merit for allocation of funding from the investment market.

Australian Bureau of Statistics (2017) data for exploration expenditure and metres drilled shows a dramatic decline in exploration activity from mid-2012 through to early 2016

rush’ has been conspicuously cautious. On hard evidence, it is too early for anyone to know for sure. Speculators, on the other hand, clearly hold a different view.

This article is not lining up to be another Novo knocker. Disparaging remarks have been made toward many exploration concepts in the past (eg copper in South Australia’s Gawler Craton). Exploration is a specialised endeavour, requiring scientific process to be laced with interpretation, creativity and optimism. While it is possible to empathise with the Australian geological community (there is an obvious pride aspect if a Canadian company makes a sizeable discovery under our noses), no one can rule out a discovery being made just yet.

That aside, by far the most fascinating aspect of this story is the substantial market capitalisations that were ascribed to Novo, which would not have occurred in a weak resources market.

(Figure 1). Expenditure in the March quarter of 2016 was almost 25 per cent of that in the June 2012 quarter. A strong positive trend has since emerged, with the most recent numbers (December quarter 2017) up by 71 per cent from the 2016 low. This recent recovery in activity correlates with an increase in capital raisings by listed exploration companies, and the accumulation of cash on the balance sheets of many producing miners.

This trend highlights what most people in mining already know – the boom is back on, and activity is increasing commensurately. In short: risk investment is back on the menu.

The ‘value’ of an exploration concept – highly susceptible to promotionA mine can be simply valued for expected revenue, minus costs, over the life of mine. Share prices of miners usually reflect these fundamentals, with an adjustment for performance in relation to expectations, or the outlook of the commodity being produced.

But investors treat exploration totally differently to mining operations. No matter what anyone tells you, you can’t value exploration – because you don’t know what you are buying,

‘No matter what anyone tells you, you can’t value exploration – because you don’t know what you are buying.’

Exploration activity is increasing, and with it greed and speculation

Investor appetite for risk-taking emerged in 2017, and consequently exploration is being funded again. The investment market is also ascribing substantial value to exploration opportunities, which is crucial for the future, as the share market now funds a large proportion of exploration through junior explorers.

Hedley Widdup, Analyst, Lion Selection Group

Exploration and speculation Exploration and speculation

Figure 1. Exploration expenditure (LHS) and exploration metres drilled (RHS) in Australia, quarterly basis, September 1998-December 2017. Data Source: Australian Bureau of Statistics.

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Paying handsomelyDespite the years that explorers have conceived conglomerate-hosted gold targets in the Pilbara, from an investment market point of view the story takes place in the second half of 2017. In July, Novo announced the discovery of gold nuggets in a bulk sample from a locality known as Purdy’s Reward. By mid-October, the market was paying a collective capitalisation for Novo Resources, and the listed explorers surrounding them (no fewer than 15), in excess of A$1.65 billion – 70 per cent of which was Novo. Novo’s capitalisation at the time was larger than all but six of the gold producers in the ASX gold index.

The severe mismatch between the market capitalisation at stake (high), and actual data supporting the potential (very little) was the aspect that had technical people most concerned. The key information that had pulses racing was almost entirely surficial – principally the detection of patches of gold nuggets at the surface in shallow prospecting pits or trenches.

Delineation of future resources of gold within Pilbara conglomerates will depend on replicating gold occurrence beneath the surface, and due to the nuggety nature of the gold, will likely require large volumes of sample to be collected. There isn’t yet a detailed understanding of how gold concentrations are distributed or controlled – either

by primary means or secondary enrichment (structural modification or weathering), so the best place to collect large samples is not yet known. No prospector ever said ‘it is exactly where you think it is’. While we need to wait and see what drilling will reveal, speculators have been prepared to discount these risks substantially. But why?

Greed and speculation – key ingredients Buying shares in an exploration outfit requires a leap of faith of sorts, irrespective of whether the price is high or low. There is inherent uncertainty associated with all sorts of exploration, but especially so in the early days of any project. You can’t really blame speculators for wanting to be involved – betting on a high-risk, high-reward outcome is certainly not uncommon. But how could speculators justify paying lofty amounts for such high-risk exploration in the Pilbara?

Buyers were clearly pricing a big gold find. Gold nuggets add an exotic quality – there is something instantly identifiable as precious in a nugget – and a large gold deposit, if it could be found, would surely be wonderfully valuable.

‘People will always pay more for what they don’t understand than what they do’ (taken from personal communication from Robin Widdup, roughly once a month for the last ten years) – especially when the market

Exploration and speculation

is greedy. When there is no metric by which to value something, there is no upper limit to what it could be worth. Speculators are susceptible to promotion – no doubt exacerbated by spectacular nuggets effortlessly detected at the surface – and can be infected by an acute sense of greed and ‘FOMO’ (fear of missing out). Gradient of a share market trend can sometimes be more important to speculators than fundamentals. When investors don’t understand fundamentals, or choose to ignore them, concepts of valuation evaporate and price has more to do with how much money is trying to buy the stock.

It is unthinkable that this could have occurred in a weak resources market, and is a great snapshot of investors’ willingness in the current climate to take on risk. It is tempting to dismiss examples of exuberance as a flash in the pan, but the mining industry depends on this sort of risk appetite because it is critical in attracting funding for exploration, which in turn is essential for the boom to progress. In fact, on a subjective assessment, prior to the Pilbara rush, risk appetite in the market for exploration was still almost non-existent – so rather than being a flash in the pan, the event has been more like a catalyst. Anyone who depends on the deployment of risk money into mining should take great comfort in this! We have not seen conditions so supportive of highly speculative exploration concepts for many years.

Who funds the finding these days?Research by Richard Schodde (2017) demonstrates a growing proportion of discoveries being driven by junior companies (Figure 2). Exploration work by these companies is funded in part or totally (and certainly heavily influenced) by the stock market. This has replaced a large proportion of exploration formerly provided by large mining company revenues – so willingness of speculators to deploy funds into risky ventures has huge importance to the industry, and this will remain the case for the future. Investors will require a ‘good story’ to continue to support exploration ventures.

Conclusion – speculation has come back to mining, and that is a good thingExploration work has restarted, commensurate with a return of funding for higher risk endeavours in mining. The market is also prepared to put a high price on pre-discovery concepts such as gold in conglomerates in the Pilbara, clearly indicating that market greed exists.

As much as this exposes a lack of sophistication of buyers, who are betting on an outcome rather than following fundamentals, appetite to support and fund risky ventures like exploration is essential for the modern mining industry.

There may be a worrisome aspect of the Pilbara example – just how might risk appetite be detrimentally affected if drilling evidence doesn’t deliver what the market hopes to see? So far, this does not appear to be the case, in fact the opposite may be true. Exploration plays elsewhere, which seemed overlooked during the Pilbara rush, are now obtaining market funding and increasing in price. Money flowing out of Pilbara gold excitement may well be finding a way into other, also risky (but not so valuable) exploration ventures.

One thing’s clear – risk-taking is back.

The views expressed in this article are the views of the author. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information.

‘We have not seen conditions so supportive of highly speculative exploration concepts for many years.’

ReferencesAustralian Bureau of Statistics 2017, Data from: 8412.0 – Mineral and Petroleum Exploration, Australia, Sep 2017, electronic dataset, Table 1. PRIVATE EXPLORATION, Actual and Expected Expenditure, viewed 2 May 2018 http://www.abs.gov.au/ausstats/[email protected]/mf/8412.0

Schodde RC, ‘Recent Trends and Outlook for Global Exploration’, Presentation to the PDAC, Toronto, March 2017, viewed 24 January 2018 http://www.minexconsulting.com/publications/mar2017.html

Exploration and speculation

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Figure 2. Percentage share of discoveries, per year, according to size / nature of company. Chart is reproduced from Schodde (2017).

Junior companies now account for 70% of all discoveries (by number) in the Western world.

Source: MinEx Consulting © March 2017


what’s happening around them and within them during a crisis and practise what airline pilots call ‘deliberate calm’. In other words, being aware that your body is in a state of panic, but not acting on those feelings.

Pilots practise and develop their capacity for deliberate calm during simulation training, and if Chesley Sullenberger managed to remain calm after losing both engines and with 200 people on board, it follows that it must be possible for leaders in other emergencies to learn how to stay calm. Part of doing this involves having sufficient emotional intelligence to know the difference between those times when we should listen to and be moved by our emotions, and those times when we should discount and override our emotions. Deliberate calm also involves practising the act of discounting and overriding your automatic emotional response again and again until it feels as familiar as the other skills that we have mastered through practice.

The second central fact about your brain in a crisis is that it constantly and automatically seeks to predict the future, at least in the short term. Of course, this predictive nature of the brain is a great advantage for humans. Without that ability, we’d be constantly crashing our supermarket trolleys into other shoppers or bashing into other vehicles before we have even left the car park. However, like most advantages, there is an accompanying disadvantage: because we unconsciously focus on what we expect to happen, we can be slow to notice what is actually happening – particularly when we are confronted by the unexpected.

A simple example will help to explain what I mean. Think about the amount of automatic prediction that is involved in catching a ball. Your brain needs to estimate the speed at which the ball is travelling and the arc along which it moves in order to predict where and when your hands need to be when the ball is close enough to catch. But if you ask someone who has just caught a ball ‘How did you work out where and when to place your hands?’ the usual answers are ‘I don’t know’ or ‘I just kept my eye on the ball’.

Now consider this straightforward arithmetic task: if I had a bat and a ball and you wanted to buy the ball, I’d ask you how much you want to pay. You might say ‘Well, how much did you pay for the ball when you first bought it?’ Suppose I answer that ‘together the bat and the ball cost me $1.10, and the bat cost one dollar more than the ball, so how much did the ball cost?’

Most people quickly arrive at the obvious answer of ten cents; but this is incorrect. What seems obvious because of our brain’s predilection for prediction can often lead us into error.

To most people, this task sounds like a simple matter

T he mining industry can be remarkably hazardous. Understanding how the brain operates during a crisis can help leaders to think more clearly and to effectively manage emergencies – including mining emergencies.

In this article, I outline some ideas about managing hazards and emergencies that I have previously presented to members of the Melbourne Metropolitan Fire Brigades Board and the Victorian State Emergency Services.

Two central facts about your brain are key to understanding how it operates in a crisis: the first is that your brain has a tripartite structure.

The cerebellum, or brain stem, is similar in structure to the reptilian brain and it controls the fight, freeze or flee responses when confronted with a crisis.

The limbic system is in the mid area of the brain. It functions much like the brains found in other mammals and is responsible for emotional reactions.

of subtracting one dollar from $1.10 so we decide that ten cents is the answer. Our brain’s tendency to take advantage of past experiences to understand the present, rather than taking the time to listen carefully to the details of the situation, trips us up. If the ball did cost ten cents, then the bat has to cost one dollar more than that, which is $1.10 – so together the bat and the ball would have cost $1.20, not $1.10. The correct answer is that the ball cost five cents, so the bat cost one dollar more, which is $1.05 and together they cost $1.10.

Now think about when this tendency to understand the present in terms of the past could be helpful during a mining crisis, and when it could be disastrous. The unexpected errors and events that occur during an emergency often require fast thinking and action from those who are caught in the middle of it – but that fast thinking has to be alert and fully conscious thinking, not automatic thinking.

You’ve probably seen the famous clip on YouTube of a group of young men playing basketball while someone wearing a bear suit walks casually from one side of the screen to the other. Most viewers do not see the bear (why would they – our brains do not expect to see a bear in the middle of a basketball game) until they are asked to look carefully to see if anything unusual is happening!

That clip and similar examples demonstrates what a powerful impact the expectations predicted by our brains can have on our ability to clearly see what is happening around us. This is one of the reasons why critical incident debriefings are so important. When teams spend the time to share their perceptions of what happened during an emergency, and in particular share their experiences of what surprised them, the members of that team are alerted to the fact that everyday expectations cannot be relied upon during a crisis.

Responding appropriately to crises as a leader requires training and practice, but it also requires an understanding of how humans and our brains operate, especially during times of stress.

Finally, located on top of your brain is the neocortex, which is part of the cerebral cortex and is involved in higher-order functions that we associate with being human, such as language, spatial reasoning and logic.

In times of stress, the cerebral cortex can be emotionally hijacked by the limbic system or the brain stem. When this happens, reactions are dictated by the cerebellum or limbic system before the neocortex can moderate or control those reactions. This explains why some leaders panic during a crisis, even though that can be the worst time to panic.

Fortunately, it is possible for the cerebral cortex to regain control. You’ve probably heard of Captain Chesley Sullenberger, who safely landed US Airways Flight 1549 in the Hudson River after both of the plane’s engines were damaged. If you were to listen to the communication between Sullenberger and the air traffic controllers during the emergency, you’d be surprised by how calm he sounds.

Similarly, mining leaders need to be able to recognise

‘Because we unconsciously focus on what we expect to happen, we can be slow to notice what is actually happening.’

Understanding your brain in a crisis

When confronted with an emergency, the human brain can behave in a way that seems rational but may in fact be disastrous. Understanding our thought processes and brain behaviour can help us make positive decisions in a crisis.

Dr Paul Gibson, Senior Lecturer, Graduate School of Business and Law, RMIT University

Understanding your brain

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Key facts• Population: 6 909 701• Land area: 452 860 km2

• Natural resources: gold, copper, silver, natural gas, timber, oil, fisheries

• GDP: US$21.81 billion

Resource-rich Papua New Guinea has excellent potential for future mining projects, but a lack of infrastructure, inhospitable terrain and economic instability continue to provide challenges to investment in the region

P apua New Guinea (PNG) comprises the eastern half of the island of New Guinea, just north of Australia, and has been an independent nation since 1975. It is rich with mineral deposits including copper, gold, silver, nickel and cobalt,

as well as petroleum and natural gas. Despite relatively recent exposure to the mining industry, mineral resources have become the cornerstone of the PNG economy, accounting for around two-thirds of exports. As a result, PNG’s economy is inextricably linked to the volatile global commodities market. While the country benefited from a wave of growth in commodity prices between 2003-11, prices have since declined and public spending has been

adjusted downwards. Resource exports make up most of PNG’s small formal sector, while 85 per cent of the population is employed in the informal sector, mostly in subsistence agriculture.

PNG’s mining sector is overwhelmingly owned by foreign companies, although the government holds equity in most projects. The government’s Mineral Resources Authority regulates mining activities, grants exploration and mining licenses, and carries out geological studies to promote further mineral exploration in the region. The government generates revenue from mining operations through taxes and royalties, which require mining lease holders to pay the equivalent of two per cent of net proceeds to the state.

Significant current and proposed mining operationsGold and copper are PNG’s most significant mineral commodities. In 2014, gold exports totalled 58 000 kg at a value of US$2.14 billion. Copper exports totalled 89 600 metric tons at a value of about US$591 million.

Ok Tedi Mining Ltd is a state-owned company that operates an open cut gold, copper and silver mine located in the Star Mountains in PNG’s Western Province. Since operations began in 1984, the mine has produced 14.3 million ounces of gold, 30.2 million ounces of silver and 4.65 million tonnes of copper.

The Lihir gold mine in the New Ireland Province is one of the world’s largest known gold deposits, estimated to have a resource total of 150 million ounces of gold. It is 100 per cent owned by Newcrest Mining Ltd of Australia.

2016 saw a returning interest in exploration licences after a significant decline in previous years. A joint venture between Newcrest and Harmony Gold Mining Company Ltd is continuing feasibility studies for the Wafi-Golpu copper-gold mining project, with mineral resource estimates of 26 million ounces of gold and 8.8 million tonnes of copper. Another joint venture between PanAust Ltd and Highlands Pacific has conducted feasibility studies for the Frieda River project. Mineral resource estimates at the Frieda River site show 13 million tonnes of copper and 622 070 kg of gold, positioning it as the largest undeveloped copper-gold project in PNG and one of the world’s top ten undeveloped open pit copper mines.

Liquefied Natural Gas2014 saw the completion of the US$19 billion PNG liquefied natural gas (LNG) project, an integrated gas production and processing facility, operated by ExxonMobil PNG and co-ventured with five partners. The construction and initial operations of the plant helped to mitigate the effects of declining mineral commodity prices from 2012. In 2014,

the project’s planned annual output was 6.6 million tons of gas and condensate per year, but output as of 2017 has exceeded eight million tons per year. The country’s natural gas reserves are estimated to be 155 billion cubic metres.

The production of LNG doubled the resource GDP in just a few months, and output in the oil and gas sector is now greater than the combined output of gold, copper, nickel, wood and palm oil from the mineral and agricultural sectors. The value of LNG exports increased by around US$3 million from 2016 to 2017, due to increased demand from Japan, China and Taiwan. Additionally, 2017 saw the PNG LNG price rise above the regional benchmark for the first time. There are further plans to develop newly discovered gas fields in the country, with PNG forecast to be a world competitor in LNG production.

Challenges aheadPNG is rich in natural resources, but its mountainous terrain means exploitation of those resources can be slow and difficult. Many current and prospective operations are in remote areas with poor infrastructure and limited access. The success of future development in the region will depend on logistical improvements in these areas.

PNG’s climate has also proven to be a challenge for the industry. In 2015, a severe El Nino weather pattern caused widespread drought across the country, which affected water availability for mineral processing. Additionally, the Fly River dried up, leaving the Ok Tedi mine without an important transport link, which resulted in the mine’s closure from August 2015 to March 2016.

The global downturn in mineral prices has seen the need for companies to improve productivity, reduce operating costs and improve safety standards. In April 2016, a failure in a high-pressure steam pipeline at the Ramu nickel mine resulted in the death of one worker and seriously injured two others. The mine was closed temporarily while the incident was investigated and reopened in July. Incidents like these remind companies and government that a stable mining industry relies on improving measures to guarantee the safety of employees.

‘PNG’s mining sector is overwhelmingly owned by foreign companies, although the government holds equity in most projects.’

Papua New Guinea

A full reference list is included with the online version of this article at www.ausimmbulletin.com.

Country Snapshot

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T he world is surrounded by water, but did you know that only 2.5 per cent of that is freshwater, two-thirds of which is frozen? Furthermore, two-thirds of the water we do use goes towards growing food. And a

staggering 46 per cent of people around the world do not have water piped to their homes.

As stated by CSIRO, ‘mining, manufacturing, and other industries use about 20 per cent of all water consumed in Australia. They use water in cities and in some water-stretched rural systems, placing pressure on them to use water more efficiently’ (CSIRO, 2018). Mining needs water. Water is necessary to mill and extract minerals and suppress dust, and is typically obtained from surface or ground water systems. Water is then used to process ore and slurry tailings. Therefore, managing water quality of both used water, as well as mine site run-off, becomes crucial.

Management of and impact on aquifers from coal seam gas extraction is a complex area that has communities, industry and regulators concerned and trying to demystify and understand the potential future impacts from operations. This will continue to be an area of debate and disagreement.

Water management and investor disclosureThe value of water can be measured in economic, environmental or cultural contexts. Regulatory approvals, community concerns, native titles and cultural values, investor disclosures and costs tend to be among the drivers for water management and reporting in mining. Sustainability reporting on water has increased in quality over the past two decades. This reporting typically uses the Global Reporting Initiative and focuses on water use and volumes withdrawn, the impact on the sources of water, and recycling and reuse of this water. Some mining processes use very large volumes of water. For example, gold mining uses over 750 000 litres of water to produce a kilogram of gold (Mudd, 2007).

Recently, the International Council on Mining and Metals (ICMM) released its new water stewardship position statement that aims to improve water security. The position statement is a binding document for ICMM members, which requires them to publicly disclose the company’s approach to water stewardship; allocate clear responsibilities and accountabilities for water; integrate water considerations in business planning from company strategies, life of assets to investment planning; and publicly report company water performance, material risks, opportunities and management. ICMM has also published a practical guide to consistent water reporting, which includes a new minimum disclosure standard for external water reporting using consistent and standardised metrics.

The Carbon Disclosure Project requires some large listed companies to report against the Water Disclosure Project on the risks presented by lack of water availability.

The Alliance for Water Stewardship (AWS) is the global umbrella organisation for water stewardship, with a network of regional partners assisting implementation at a local level. Water Stewardship Australia (WSA) is the regional partner for AWS in the Asia-Pacific. The AWS Standard is built around six steps, in which proponents undertake the following:1. commit to water stewardship2. gather and understand water-related data3. create a water stewardship plan4. implement their plan5. evaluate performance6. communicate progress with stakeholders.

It is early days for the AWS Standard in Australia, with only agriculture, farming and textile industries having utilised it. A mining case study is yet to be published.

Investors are increasingly focused on environmental impacts. According to investor rating agency Moody’s, environmental factors, such as water scarcity, could adversely affect the ratings of global mining companies if they fail to proactively manage the accompanying operational and political risks to their businesses. Moody’s has downgraded the rating of some South African mines on the basis of water availability, as it is seen as increasing the threat of climate risk and related financial losses.

Environmental change – too much and too little waterNotwithstanding the increased stresses on our water resources from a community and industrial point of view, climate change is introducing new risks and threats to water availability and water management.

Climate change in Australia is projected to lead to more frequent and severe floods and droughts, with radically changing intensities. For example, rain over land is projected to become less frequent but more intense. Droughts cause competition between water users in rural areas such as farmers, miners and community. Flooding can cause property damage and inundation leading to production losses.

Viewpoints

Water is a critical input for the mining industry. Measuring, managing and reporting water use in the sector has always presented complex challenges. This issue is becoming more important than ever before.

Terence JeyaretnamPartner, Climate Change

and Sustainability, EY

‘Environmental factors, such as water scarcity, could adversely affect the ratings of global mining companies.’

Viewpoints

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Water sustainability in the resources sector


Intense rainfall events, such as those experienced in the Bowen Basin coal mining region of Queensland in 2011 and again in 2017, have led to extensive flooding of mine pits, damage to transportation routes, on-going disruption to production and export of coal, reduced state royalties and community anger over the effects on downstream water quality caused when pit water was released into streams.

Guidance has been published by the National Climate Change Adaptation Research Facility, including Climate change adaptation for Australian minerals industry professionals. The CSIRO has also developed and trialled a tool known as CRATER (Climate Related Adaptation from Terrain Evaluation Results), which can identify flooding vulnerabilities using detailed geographic information system data to support decision making. Tools and guidance will continue to become more sophisticated as well as focus on financial costs, losses and insurance.

In light of the importance of water to mining operations, and the complexity of meeting the high standards set by stakeholders, continued focus on management of water

use and quality will be essential to the sustainability of the industry.

The views expressed in this article are the views of the author, not Ernst & Young. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.

Viewpoints

ReferencesCSIRO, 2018. ‘Chapter 10: Water in mining and industry’ [online]. Available from: www.csiro.au/en/Research/Environment/Water/Water-Book/Water-in-mining-and-industry.

Mudd G, 2007. Resource Consumption Intensity and the Sustainability of Gold Mining. Second International Conference on Sustainability Engineering and Science, Auckland, New Zealand.

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R isk is an inherent component of the mining industry, and risk governance is an integral part of corporate assurance and business decision making. Like the requirements for financial, legal and environmental governance, assurance

regarding the processes applied to data collection,

estimation and reporting of Mineral Resources and Ore Reserves is required.

Improved assurance is particularly crucial at a time in the industry when companies are running lean or relying on teams who have limited technical or management oversight experience. Despite industry guidance, and some

Improving assurance for Mineral Resource and Ore Reserve estimates and reporting

companies having standards requiring reviews or audits of Mineral Resource and Ore Reserve generation and reporting processes, it is surprising how infrequently or ineffectively these are actually carried out.

What seems to be going wrong?There are many examples where errors and improvements identified after the fact could have been avoided. For example, some errors concern basic data verification and data preparation processes, rather than somewhat more subjective choices about estimation-related parameters. Such issues highlight the lack of experience of the people tasked with the estimation and the lack of adequate internal peer review to identify such issues early.

A common concern is that some companies and managers have not recognised the critical role that peer review plays in improving the skills of individuals and in supporting confidence in the technical outputs. In some cases, while the importance of peer review is formally recognised by companies as part of their standard procedures, there is actually no practical or effective peer review process being carried out.

The importance of people, processes and systemsA balance between the core elements of people, processes and systems is essential for managing the risk and reducing exposure to inaccurate Mineral Resource and Ore Reserve generation and reporting. Having competent people following adequate and effective processes, and making use of appropriate systems, will ensure reliable estimates are consistently generated and reported.

What can be done to improve assurance?All companies large or small, whether publicly listed or not, require some form of quality control and demonstrable assurance to support good governance. The assurance of reliable Mineral Resource and Ore Reserve reporting must therefore be included in a mining company’s risk management and control framework.

An effective assurance process for the governance of Mineral Resources and Ore Reserves consists of three layers of defence: a layer of self-validation and peer review where and when the work is performed, a layer of internal peer review or oversight and a final level of independent review or audit administered and monitored by appropriately mandated levels of management or board oversight.

Peer reviews are ideally carried out concurrently with the preparation of data, selection of estimation procedures

and validation of outputs from Mineral Resource and Ore Reserve estimation prior to the handover of results between disciplines or the final reporting of results. Audits, on the other hand, are generally retrospective reviews by independent or external reviewers who rate the risks inherent with an already completed process, identifying opportunities for improvements in the future.

Reviews and audits improve the level of assurance in the reliability of estimated and reported Exploration Results, Mineral Resources, Ore Reserves, and mine reconciliation. Peer reviews and audits contribute not only to governance processes, but also identify valuable improvement opportunities, and provide mentoring and professional development guidance to those whose work is being reviewed.

A case studyA recent technical audit of a multinational client’s projects in Africa and North America was conducted to provide assurance to management and the board that the Resource and Reserve processes and systems were adequately designed, and that personnel were sufficiently skilled and equipped to support the accurate generation of Resource and Reserve estimates and their reporting.

The audit process included:• agreeing on the risk rating definitions and templates for

reporting feedback• reviewing systems and process documentation prior to

undertaking site visits• holding interviews with key stakeholders to understand

the objectives, as well as risks, in relation to the Resource and Reserve processes

• gaining understanding of the Resource and Reserve estimation processes and assigned responsibilities and competencies

• identifying the risk management controls within the estimation and reporting processes, and evaluating the adequacy and effectiveness of the controls and compliance with industry standards

• testing and validating key procedural controls to evaluate whether they operate as intended

Viewpoints

Mineral Resources and Ore Reserves are the key assets of a mining company, and senior management, company boards and external stakeholders require assurance on the accuracy of estimated and reported technical information

Mark NoppeCorporate Consultant (Geology and Project

Evaluation), SRK Consulting (Australasia) Pty Ltd

‘Risk governance is an integral part of corporate assurance and business decision making.’

Viewpoints

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• presenting feedback on preliminary findings• documenting findings, recommendations and

management actions required to address any risks found to be inadequately managed. Some key findings identified were common across all

operations and therefore the company stood to benefit from an integrated solution to manage these risks. Several improvement opportunities were identified which, while not significant, could improve selected processes and the repeatability of the processes. It was also identified that, in general, those carrying out the processes were highly competent and received adequate support from management.

This client called for an audit because it identified a weakness within its existing Resource and Reserve processes and wished to review the entire process and ensure the same weaknesses were not being repeated

elsewhere. In other cases, clients carry out such audits and reviews as a part of their governance processes to proactively ensure their processes are robust, their systems appropriate and their staff adequately experienced to accurately generate and report on Resource and Reserve estimates.

An additional benefit of this particular audit (and any audit if carried out adequately) was that it provided an opportunity to share knowledge across the local technical and management teams. The process of identifying improvements gave those carrying out the work an increased level of understanding of the importance of the results they generate, and those receiving the information, a better understanding of the effort required to produce the results.

ConclusionIf a company does not, at a minimum, have a system of internal peer review (as opposed to a formal external assurance process) to provide verification or validation of the actual numbers generated, this lack of internal control may represent a weak link in the assurance of the Resource and Reserve estimates generated and reported. Indeed, for companies not having an established internal audit function or activity, senior management or the board should disclose to their stakeholders how adequate assurance on the effectiveness of the company’s governance, risk management and control structure will be provided.

Viewpoints

‘The process of identifying improvements gave those carrying out the work an increased level of understanding.’

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Professional standards mean acting in a way that exemplifies high moral and ethical standards. In my opinion, professional standards are defined by the professional knowledge, skill and behaviour expected of AusIMM members.

From a behaviour aspect, it means having high standards of ethical behaviour, for example not letting the stress or pressures of the situation compromise treating people with respect, and always acting in a manner that is positive and constructive.

From a knowledge side, professional standards means being qualified in the area of expertise in which proficiency is claimed. For example, having experience or education to competently preform the task required.

From a skill perspective, professional standards means applying knowledge or experience in the appropriate context, knowing the limitations of your knowledge and asking for help as needed.

For me the main key of professional standards is that they involve a code of rules, ethics and/or conduct that maintains and promotes public confidence in the work of the professionals within the organisation, with repercussions if these rules are broken. Accountability and holding people to the required standard is an important aspect of professional standards and if someone is below the expected standards, they need to be held accountable for non-professional behaviour.

Professional standards are important to build integrity in a professional organisation like the AusIMM. Integrity comes from being honest and having strong moral principles.

Annette Pocock MAusIMMPolicy Advisor, New Zealand Petroleum & Minerals, Ministry of Business, Innovation & Employment – New Zealand

Charlie Sartain FAusIMMManaging Director, Sartain Enterprises Pty Ltd

Geoff Sharrock HonFAusIMM(CP)AusIMM President, 2013-14

Jacqui Coombes FAusIMMGeneral Manager Innovation, METS Ignited

A well-defined set of professional standards encapsulates an ethical framework that should guide our personal and professional development throughout our careers.

It is instructive to reflect on the fact that many successful organisations strive to summarise behavioural expectations of their people through a set of ‘corporate values’. These values become particularly powerful drivers of organisational performance if they are both well-aligned to personal values of people within the organisation and can be effectively harnessed towards the achievement of clearly articulated corporate objectives. Typical examples of corporate values that are promoted within organisations include: safety, integrity, respect, teamwork, accountability, innovation, honesty and openness.

At a professional level, our association with the AusIMM commits us to abide by the Code of Ethics, which by definition is our set of ‘core values’ or professional standards. Interestingly, the values prescribed in the Code of Ethics are remarkably similar to those we see in corporate values statements, with references to safety, health and welfare, integrity, honesty, equity and the encouragement of professional development. This is perhaps not surprising given the resonance that these core values have with many people.

From my perspective, however, what sets these professional standards apart, and in my view takes them to a higher level, is the more altruistic purpose behind them, which is to advance the sciences applying to the minerals industry for the benefit of the community.

AusIMM professional standards were ‘top of mind’ when I visited our members overseas during my time as President in 2013 and 2014. I found members in many places who had great respect for AusIMM’s brand and reputation. Visiting members in Hong Kong, Jakarta, Beijing, Cardiff and London brought home to me how proud these professionals were to identify as members of our Institute, because of what it meant to them in relation to ethics, standards and codes. Our brand is particularly very highly regarded in Asia.

I also met many AusIMM members when I officially opened a number of AusIMM conferences in this period. Many members attending were from other countries. At each conference, members approached me as President an extoled the virtues of our Institute, the professional codes, ethics and the high standard of our publications.

So, it was these members from overseas who really gave me the insight that professional standards are something that sets us apart from other associations.

AusIMM professional standards have been an integral part of my working life as an employee and, later in my career, as a consultant. I was proud to be identified as an AusIMM Fellow as I had in my mind our code of ethics, particularly as they relate to the idea of community responsibility and the ethics of dealing with clients and other members of the AusIMM.

Perhaps the best way I can answer this question is with reference to the natural world. The Pilanesberg elephants of South Africa were a gang of testosterone-charged delinquent juvenile elephants. When still cute youngsters, these elephants were removed from their herd in the Kruger National Park and relocated to the nearby newly created Pilanesberg Reserve. This gang of youngsters were soon wreaking havoc: killing and mutilating rhinos, trampling and sending shudders through the reserve. Their behaviour only stopped when mature bull elephants were introduced to the reserve. These seasoned leaders reinforced behavioural standards by setting good examples. Tranquility and order prevailed.

In the same way that the mature elephants instilled expectations among the young, our professional societies provide a framework that legitimises professional standards. These standards develop the public trust in what we do and how we contribute to the broader community and help establish our credibility.

Standards provide the benchmark of who we are professionally, how we regard each other, and what we expect of ourselves, our peers and our community. Central to these expectations is a Code of Ethics, our codified set of standards. When we join the AusIMM, we explicitly agree to abide by the Code of Ethics. These are non-negotiable and set the rules by which our peers judge our behaviour.

More than keeping us from going rogue, our professional standards, articulated in the AusIMM Code of Ethics and the associated complaints process, offer a framework to guide dignified, responsible and effective contributions as mining professionals and help inform us in complex socio-technical decision making.

Viewpoints

What do professional standards mean to you, and why are they important?

‘AusIMM professional standards have been an integral part of my working life as an employee and, later in my career, as a consultant.’

Viewpoints

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T he iron ore sector employs a significant number of Australia’s resources professionals. There are over 50 000 people employed in the Western Australian iron ore industry alone, and in AusIMM’s 2017 Professional Employment

Survey, nearly 15 per cent of respondents worked in the iron ore sector.

PropertiesIron ore is the term given to a mineral substance that bears iron in sufficient concentrations to be commercially exploitable. Iron ore yields metallic iron (Fe) when heated in the presence of a reductant.

The principle iron ores are made of hematite and magnetite. Hematite ranges in colour from silver to reddish brown, is non-magnetic and contains 69.9 per cent Fe. High-grade hematite makes up approximately 96 per cent of Australia’s iron ore exports, most of which comes from the Hamersley province of Western Australia (WA). High-grade hematite ore is known as direct shipping ore because it needs minimal processing before export.

Magnetite is generally black in colour and is highly magnetic. It contains 72.4 per cent Fe but has more impurities than Hematite, making it a less economical raw material for steel production. Australia has an emerging magnetite industry focused in the Pilbara region of WA. Once mined, magnetite goes through lengthier processing, exploiting its magnetic properties to produce a concentrate.

Iron ore and steel98 per cent of the world’s iron ore is used to produce steel, a mainstay in industry across the globe. Although steel has been produced in various forms since ancient times, British inventor Henry Bessemer found a way to mass produce steel in the 1850s. Since that time, steel has become indispensable for modern society, and is used in a wide variety of applications from household appliances to skyscrapers.

Steel is an iron-base alloy with a small amount of carbon. In typical steel alloys, carbon content is between 0.05 per cent and 1.25 per cent by weight. Steel typically also contains manganese and trace amounts of phosphorus,

silicon and sulphur. Varying the amount of carbon and other alloying metals allows for control over certain qualities of the final product, such as hardness. Stainless steel, for example, is a steel alloy with a minimum 10.5 per cent chromium content by mass.

Steel is an umbrella term for over 3500 combinations of iron and alloys which all have different chemical properties.

Western Australia dominates iron ore productionWA holds 89 per cent of Australia’s iron ore Economic Demonstrated Resource (EDR), with South Australia making up ten percent and the rest of Australia sharing the remaining one per cent. Australia has the world’s largest iron ore EDR with 51 545 Mt, constituting 28 per cent – double the amount of the next highest, Russia, at 14 per cent. WA alone is the world’s largest iron ore producer and exporter in the world, with the Pilbara making up 94 per cent of Australia’s iron ore exports in 2016.

WA’s iron ore industry has expanded rapidly in the past decade. In the 2005-06 period, WA’s iron ore contributed six per cent to the state’s gross product but tripled to 18 per cent in the 2016-17 period. A detailed look at the WA iron ore industry is available on page 50.

Australian iron ore on the world stageAustralia is the world’s largest exporter of iron ore, with 767 Mt in 2015, followed by Brazil with 366 Mt. In 2010, iron ore overtook coal as Australia’s most valuable export. Metallurgical coal is another key component of steel processing, with most of Australia’s exported to Japan, India, South Korea and China. As Australia has no local steel industry, 85-90 per cent of its iron ore is exported, mainly to China, which accounted for 82 per cent of iron ore exports in 2016. The remainder goes to Japan, Korea and Taiwan.

The iron ore price was an average of US$68 a tonne in the first quarter of 2018 but the price is forecast to fall to US$55 a tonne in the final quarter, as Brazil ramps up its own exports.

Trade with ChinaIn the 2016-17 period, Australian iron ore exports to China were worth $52 657 million. Australia has substantial history of selling iron ore to China, beginning in 1973, just one year after establishing diplomatic relations. The first Chinese investment in Australia was the Channar Iron Ore Joint Venture in the Pilbara in 1987.

China makes about half of the world’s raw steel and exports nearly 100 Mt worldwide every year. Chinese iron ore reserves have a relatively low iron content – about 33 per cent – which makes it more expensive to process. Because of this, China relies mostly on imported iron ore for its steel production. China’s demand for iron ore has profound effects on its price – iron ore averaged US$129 a tonne between 2008 and 2014 but with lower demand from China fell drastically between 2014 and 2016 before a moderate increase in 2016-17, which brought the price up to US$70 a tonne.

China recently announced a structural overhaul of its steel industry with plans to reduce crude steel output by 150 Mt per annum by 2020. This is part of a broader effort to streamline the sector after years of falling steel prices by eliminating unnecessary steel production capacity.

According to a report on China’s steel reforms from the Development Bank of Singapore, the reforms are likely to drive consumption of imported iron ore as large integrated steel mills are encouraged to produce high-grade steel products. BHP Chief Commercial Officer Arnoud Balhuizen said in a release on the company’s website that the Chinese reforms will likely benefit suppliers of high quality raw materials.

A full reference list is included with the online version of this article at www.ausimmbulletin.com.

‘In AusIMM’s 2017 Professional Employment Survey, nearly 15 per cent of respondents worked in the iron ore sector.’

Special Feature: Iron Ore Special Feature: Iron Ore

Fast facts: Australia’s iron ore• Australia is the world’s largest exporter of iron ore,

representing 53 per cent of global exports in 2016• 83 per cent of Australia’s iron ore is exported to China• In 2016-17, Australia exported enough iron ore to

produce steel for nearly 10 000 Sydney Harbour Bridges

• Australia holds a third of the world’s total iron ore reserves.Data: Australian Government Resources and Energy

Quarterly, March 2018.

Iron ore spotlight Cameron Scott

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A s planning commences for the Iron Ore 2019 conference in Perth from 22-24 July 2019, now is an opportune time to review some of the key topics and issues that were discussed at the Iron Ore 2017 conference held last July,

look at what has happened in the intervening period and finally, speculate on the topics that are likely to be discussed at the 2019 conference.

As outlined by A D Brent in his keynote address in the opening session at last year’s conference, the iron ore industry was going through a major transformation in July 2017. The industry was emerging from a decade of soaring Chinese demand for iron ore and entering a much more competitive world where:• supply exceeded demand and customers once again

had choice• the supply/demand imbalance was likely to grow in the

medium-term as projects continue to ramp up, which was coupled with slowing Chinese steel demand

• higher extraction rates resulted in shorter mine lives, requiring more rapid exploration and delineation of new orebodies to sustain production levels

• grades were declining as higher quality, easier-to-mine resources were diminishing, leading to the development of more problematic ores, often requiring beneficiation.

The Australian iron ore industry has clearly risen to these challenges, with major reductions in operating costs over recent years and the steady adoption and implementation of new technologies, including the progressive introduction of autonomous trucks and remote operation with trials of autonomous trains well-advanced.

At the 2017 conference there was a strong focus on the importance of mineralogy and petrology on iron ore processing characteristics (ie geometallurgy), the rationale being that you need to understand the detailed characteristics of an ore to optimise mining, blending, beneficiation and downstream processing operations. Examples of techniques being developed and refined for iron ores that were presented at Iron Ore 2017 include optical image analysis (A Poliakov et al), infrared spectroscopy (M Haest et al and J Carter et al), downhole nuclear magnetic resonance (TAJ Hopper et al) and pulsed neutron geochemical tools (P Jeanneau et al), as well as the use of X-ray computed tomography for studying the 3D internal structure of iron ore lump and sinter (B Godel et al). Development of these techniques for geometallurgical applications is continuing and updates are expected at Iron Ore 2019.

Another significant area at the 2017 conference was the beneficiation of lower grade ores that are now being

developed to sustain production levels, including the more challenging magnetites. For example, a ground-breaking paper was presented on the dry processing of magnetite ores using the IMPTEC Super-fine Crusher and the Cyclomag Separator to radically reduce grinding costs and the need for process water (CG Kelsey et al). We expect to hear more about such developments at Iron Ore 2019. A paper was also presented on relocatable modular beneficiation plants (T Graham), which are currently attracting attention for the more economic exploitation of the smaller iron ore deposits spread across the Pilbara. The growing divergence between the spot prices for 62 per cent Fe and 58 per cent Fe ores has intensified the focus on beneficiating lower grade ores to take advantage of the higher price for premium grade ores, so this is expected to be a significant focus at Iron Ore 2019.

Recent failures of tailings dam walls in the mining industry have increased the focus on sound environmental management. At the 2017 conference, papers were presented on mine design to closure (A Kemp et al) and improving the efficiency of water spraying for airborne dust control ( JM Roberts and PW Wypych). More on such topics is expected at Iron Ore 2019.

In conclusion, the iron ore industry continues to innovate and major changes have taken place in the sector to address the changing market environment and radically reduce

operating costs. With these changes in mind, ‘Optimising Value’ has been selected as the theme for Iron Ore 2019 to capture the technical advancements that have been implemented or are under development to maximise the value of Australia’s iron ore resource base. Hence, it is anticipated that Iron Ore 2019 will provide an excellent opportunity to hear about the latest developments.

The call for abstracts is now open for Iron Ore 2019. Please submit abstracts not exceeding 300 words per paper in English to the Iron Ore 2019 speakers portal, available via ironore.ausimm.com. Deadline 17 September 2018.

Special Feature: Iron Ore AusIMM annual compliance report 2017

Iron ore – meeting market challenges

An overview of key topics and developments in iron ore since 2017, and a look forward to AusIMM and CSIRO’s Iron Ore 2019 conference

Ralph Holmes, Chief Research Scientist, CSIRO; Iron Ore 2019 Conference Chair and Keith Vining, Research Group

Leader, CSIRO; Iron Ore 2019 Conference Committee

‘The iron ore industry continues to innovate and major changes have taken place in the sector to address the changing market environment.’

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W estern Australia (WA) is the world’s largest iron ore producer, generating 33 per cent of global production in 2017, and dominating production from Australia (less than one per cent of

global iron ore production comes from other Australian states and territories; Figure 1). WA has 145 iron ore mine sites within 24 mining projects that are operating or under development. Product includes direct shipping ore and blended or beneficiated ore, including magnetite.

Mineral resources and ore reservesWA has enormous iron ore resources, currently estimated at 120 434 million tonnes (inclusive of reserves). Nearly two-thirds of these resources occur as goethite- and hematite-rich direct shipping ore (DSO) having inherently high iron content (>57 per cent Fe) that was naturally beneficiated by geological processes (particularly weathering) operating on and around specific iron-rich rock units. DSO is most abundant in particular segments of superior-type banded iron formations (BIFs) in the Archean-Paleoproterozoic Hamersley

Basin, but also occurs on less extensive, Algoma-type BIFs in Archean granite-greenstone belts of the Yilgarn and Pilbara Cratons, and in detrital deposits derived from the erosion and redeposition of ‘primary’ supra-BIF iron deposits. The remaining third of known iron ore resources are contained in the lower grade (~25-30 per cent Fe), so-called ‘magnetite ores’ in relatively magnetite-enriched rocks such as Algoma-type BIFs, metamorphosed iron-rich clastic sediments and large, fractionated mafic igneous intrusions that have not been subjected to the combination of geological processes forming DSO. Magnetite is naturally richer in iron than hematite or goethite, but magnetite ores require industrial beneficiation to saleable concentrates, making them more expensive to develop, hence more sensitive to economic factors.

Economic contribution

State revenueIron ore is by far the most valuable commodity for WA, accounting for 72 per cent of mineral sales and 58 per cent of overall commodity sales. The top importers for WA iron ore in 2017 were China (81.9 per cent), Japan (8.8 per cent),

the Republic of Korea (6.1 per cent), Taiwan (2.2 per cent) and Indonesia (0.4 per cent). Australia currently supplies 62.2 per cent of China’s iron ore.

In 2017, WA produced 794 937 000 tonnes of iron ore with an export value of A$62.9 billion, a 14 per cent increase on the previous year. In that same year, the Department of Mines, Industry Regulation and Safety (DMIRS) collected $6.1 billion in royalties from mineral and petroleum producers in WA, of which 79.7 per cent, or $4832.8 million, was from iron ore sales – with this including additional mining lease rent that is payable by iron ore producers in WA after 15 years of production, at the rate of 25 cents per long tonne. Iron ore royalty receipts in 2017 were 32.7 per cent higher than in 2016, and using recent prices of A$98 per tonne, this equates to average royalty payments of $7.25 per tonne for material sold as crushed and screened lump and fine ore, or $4.90 per tonne for beneficiated concentrate.

The value of iron ore produced from WA remains lower than its historical peak in 2013, because increased production has not yet fully offset reduced prices since then, even though the latter have recovered somewhat since 2015. Nevertheless, iron ore production value is well up from its recent low in 2015, and despite recent downturns

The importance of iron ore to Western Australia’s economy

As the world’s largest iron ore producer, Western Australia’s iron ore industry is a critical part of the state’s economy and contributes to regional development

D J Flint, N L Wyche, T J Beardsmore and R W Cooper; Department of Mines, Industry Regulation and Safety, Western Australia

Special Feature: Iron Ore

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Figure 1. Iron ore production in Western Australian versus that for the rest of Australia. Source: Department of Mines, Industry Regulation and Safety, and Department of Jobs, Tourism, Science and Innovation.



in iron ore price, WA has seen an average year-on-year increase since the start of the iron ore boom in 2002 of 10.7 per cent in the quantity of iron ore sold and 18.2 per cent in its value.

EmploymentThe iron ore industry directly employed 53 221 people in 2017, accounting for 48 per cent of mining industry jobs by commodity (Figure 2). The top five employers by order of greatest number of full-time equivalent positions were BHP, Fortescue Metals Group (FMG), Hamersley Iron, Rio Tinto and CITIC Pacific Mining Management. Employment numbers in this sector are not immune from the downturn affecting the resources sector in general, and though reduced from its peak in late 2014 following aggressive cost cutting by companies, employment now appear to have stabilised, or is again increasing slightly.

ExplorationExpenditure on iron ore exploration is also a significant contributor to the WA economy, accounting for A$280.2 million in 2017. This is the second-highest exploration spend by commodity after gold, although it is significantly down on peak expenditure of $1100 million in 2012.

Projects and developments Medium- to long-term historical trends in WA’s iron ore sector suggest that it will remain a robust enterprise that can generally weather the commodity demand price cycle, despite local misfortunes affecting some individual projects (for instance, the suspension in April 2016 of Fortescue Metals Group’s Nullagine CID operation due to weak iron ore prices). The future of the sector is secured by an impressive list of new developments, economisations, and project expansions, including:• Rio Tinto’s Silvergrass project, the company’s 16th

operation in the Pilbara, which was officially opened by Premier Mark McGowan on 30 August 2017 and is ramping up to full production of 10 million tonnes per annum. Rio Tinto also received approval to develop the Oxbow iron ore deposit at Yandicoogina.

• BHP’s South Flank project, for which a development decision is expected by mid-2018. Notably, BHP commenced early site works in May 2018 at Mining Area C, where ore from South Flank would be processed.

• Hancock Prospecting’s Roy Hill project, which achieved its first ore shipment in December 2015 and briefly reached full production capacity of 55 million tonnes per annum in September 2017.

• FMG has applied for environmental approval to begin early works at its $US1.5 billion Eliwana iron ore project in the Pilbara ahead of a final investment decision

• Exploration, including ore genesis, geology, geophysics and geochemistry.

• Geostatistics and ore reserve estimation covering geostatistical methods and reporting requirements.

• Ore characterisation, including classification, mineralogy, petrology and geometallurgy at regional, mine and orebody scale.

• Mining, including all aspects from pit design and optimisation to blasting, ore haulage and grade reconciliation.

• Processing, including materials handling, crushing, screening, grinding, beneficiation, dewatering, filtration, tailings disposal, granulation, sintering, pelletising and value adding.

• Automation, including process control, autonomous vehicles, drones and remote operation.

• Project optimisation and development, including cost reduction and debottlenecking.

• Health, safety, environment and community, including regulatory, environmental, heritage, community, reducing emissions and carbon footprint, water conservation, mine rehabilitation, mine closure and safety issues.

• Technical marketing, including market outlook and the impact of product quality on iron and steel making.

• Logistics and utilities, including road, rail, shipping, port, pumping, water, gas and electricity supply.

• New equipment, including development, performance and industry needs.

C O N F E R E N C E T O P I C S

17 SEPT2018

DUEPlease submit abstracts not exceeding 300 words per paper in English to the Iron Ore 2019 speakers portal, available via the conference website.

Authors of accepted abstracts will be asked to submit full written papers for the proceedings and are required to register and attend the conference to present their papers.

Call for abstracts open

PERTH22–24 JULY 2019

#ironore2019

OPTIMISING VALUE

• Geologists

• Geophysicists

• Geochemists

• Geostatisticians

• Mining engineers

• Mineralogists

• Metallurgists

• Managers

• Operators

• Consultants

• Research providers

• Engineering companies

• Equipment manufacturers and suppliers

• Drilling, analytical and metallurgical service providers

• Iron and steel makers

W H O S H O U L D AT T E N D

Submission enquiries can be sent to:

Claire Stuart,Coordinator, PublishingThe AusIMM

Telephone: +61 3 9658 6167 Email: [email protected] more information visit:

ironore.ausimm.com

Figure 2. Proportional distribution by commodity of the 111 569 people directly employed in Western Australia's mineral sector in 2017. Source: Department of Mines, Industry Regulation and Safety.

DIRECT EMPLOYMENT IN WESTERN AUSTRALIA'S MINERAL SECTOR by commodity

Source: DMIRS DJF375a

Iron ore 48%

Nickel 5%

Gold 25%

Other (excluding exploration) 8%

Base metals 2%

Bauxite-Alumina 6%

Salt 1%

Diamond 1%

Mineral sands 2%

Coal 1%

Tin, tantalum and lithium 1%


expected in 2018. At Iron Bridge, the magnetite joint venture partners are expecting to make a final investment decision on Stage 2 of the project in 2018.

• FMG has successfully reduced production costs (excluding freight and royalties) to less than US$13 per tonne over the last two years, placing the company with Rio Tinto and BHP amongst the world’s lowest cost iron ore producers.

• Atlas Iron’s resumption of full production in 2016 and successful restructuring of debts to ensure the company’s future viability and continued operations in WA. The company is now increasing production to 7-9 million tonnes per annum from its only currently active operation at Mt Webber, but in February 2017 approved development of Corunna Downs, at a capital cost of A$47-53 million, and is now awaiting final government approvals. Atlas Iron and Mineral Resources Limited recently announced a friendly merger (pending shareholder approval in July 2018), and the combined entity will have much-expanded production and export opportunities from its mine and port facilities.

• CITIC Pacific’s Sino iron project, WA’s largest magnetite mining and processing operation, increased annual production in 2017 to more than 15 million tonnes of concentrate and is aiming for full production of 24 million tonnes per year.

• Mt Gibson Iron is recommissioning its high-grade (64 per cent Fe) Koolan Island project, and continues mining at the Mt Gibson mining centre from the Iron Hill deposit, following exhaustion of the hematite ores at Extension Hill.

• Grange Resources and joint venture partners are again considering development of the Southdown magnetite project and submitted an environmental review for public comment (for EPBC Act approval) in November 2017. They are actively seeking equity partners for a strategic share in the project.

• The WA resources sector has also seen its first investment by an Iranian company, with acquisition of the Yogi (or Yalgoo) magnetite project in the state’s Midwest region (inland from Geraldton) by the FI Joint Venture Pty Ltd, which consists of Fakoor Sanat Australia (90 per cent equity) and IDG Pty Ltd.The WA Government also supports the long-term viability

of the iron ore industry in the state. It has continued providing financial assistance to Atlas Iron and Mineral Resources by extending the discounts on export charges at the Utah Point Bulk Handling Facility until at least June 2018, and to the Karara project via discounted port charges at Geraldton to June 2018. Government also continues to

support the CITIC Pacific’s Sino Iron and Karara Mining’s Karara magnetite projects via the magnetite financial assistance program, which provides eligible producers with a 50 per cent royalty rebate and which has been extended until 31 December 2018.

ConclusionWA is currently the world’s largest iron ore producer, and its iron ore industry is a critical part of the state’s economy and regional development. Iron ore exports constitute 58 per cent of the state’s mineral and petroleum exports (by value) and provide 80 per cent of the state’s royalty receipts and 48 per cent of mining industry employment. Expenditure on exploration for iron ore ranks second after gold.

Iron ore production from WA has consistently increased year-on-year for at least the past 20 years, driven predominantly by demand from developing nations in Asia, particularly China. The value of iron ore exports, and of revenue and related economic benefits to the state, are recovering towards historical peaks in 2013, following a period of weakened demand and prices arising from the recent global economic downturn. Many smaller iron players have struggled to continue operating in the current economic climate, but survivors – particularly those larger companies already partly shielded by economies of scale – have worked to remain profitable and offset declining sales revenues by aggressively reducing operating costs.

The iron ore price appears to have troughed in late 2015 at circa 2010 levels and is again increasing, at least in the short term. The collective WA iron ore sector continues to be viable in the face of recent economic headwinds, indicating that it is a robust enterprise that can weather the commodity demand price cycle, and that it will continue to be a significant contributor to WA’s economic prosperity for many decades to come.


‘Iron ore exports constitute 58 per cent of the state’s mineral and petroleum exports (by value) and provide 80 per cent of the state’s royalty receipts.’


T echnology may have reduced transport and communication costs, giving us instant communication around the world, and turning manufacturing into a network of global supply chains stretching across nations. But my recent

research with Marie-Claire Robitaille found that Australia’s distance from Europe and the United States still imposes enormous costs on our exports.

We found the impact of distance differs for different exports. Iron ore and gas are twice as sensitive to distance as manufacturing products are. Likewise coal, oil and agricultural products are also very sensitive to distance.

Our modelling shows that Australian resource exports would be 20-30 per cent higher if we were not so far away from markets in Europe and the United States.

There is a silver lining however. Economic growth combined with huge populations in Asia mean the centre of world demand is shifting, which is making Australia less remote. This will boost our exports overall, but it will also change what we export as our agriculture industry becomes more competitive.

The tyranny of distanceUnsurprisingly, trade partners who are further apart trade less with each other. The reasons are easy to guess. Iron ore, for example, has a high weight to value ratio (it weighs

a lot for its price) so transport costs per tonne are high. Likewise gas has high shipping and storage costs.

There may be additional costs associated with communications, loading and engineering constraints around the size of ships. But for whatever reason, technological change and globalisation have not yet levelled the playing field for resource exports as much as they have for manufacturing.

To get a sense of which countries are most disadvantaged by their location, and how large this disadvantage is, we used our model to predict what would happen if all countries were the same distance from each other.

You can see the results in this map:According to our model, Australia would see an increase

in resource exports of 20-30 per cent if distance was not an issue. But some exports would benefit more than others. Australia’s share of the export market in agricultural products would more than double, for example, and gas would triple. Meanwhile Australia’s share of the iron ore market would actually reduce.

The countries most disadvantaged by their location are Chile and New Zealand. Our model predicts they would each see a 50 per cent increase in resource exports if distance was removed from the equation. This is because New Zealand exports a lot of agricultural products and Chile exports a lot of minerals. Both countries are a long way from markets.

Canada and Mexico currently benefit from sharing a border with the United States. Canada exports oil and gas by pipeline, which is cheaper than shipping. Poland and the Czech Republic benefit from their proximity to Western Europe for their coal exports and Algeria, likewise for oil and gas.

The good newsIt’s not all bad news for Australia. While we are far away from Europe and the United States, we are close to Asia. Right now this gives us an advantage in iron ore exports as China is the biggest importer.

If Brazil, another large iron ore producer, were as close to Asia as Australia, our model predicts it would double its iron ore exports. But our proximity to Asia is only getting more important as the region develops and demand for other products increases.

The results of our research also mean that location is especially important to resource companies. This has important implications for Australia’s ongoing debate about how to tax resource companies.

Being close to export markets is key to mining companies managing their costs, and this means they don’t have a lot countries to choose from if they were to leave in response to a tax increase. This lack of choice over low cost locations will affect the bargaining power of resource companies

when negotiating with the Australian government.In the 18th and early 19th centuries, high transport

costs threatened the viability of Australian exports and the economy had barely grown over its first hundred years. What saved the colonies was the Victorian gold rush, which brought prospectors and left empty ships that carried wool and wheat back to Europe.

Our research shows that, despite the massive reductions in transport costs that have ensued, Australian resource sectors are still relatively remote from world markets. But new technologies and economic growth in Asia have the potential to boost Australian resource sectors, just as the gold rush trade ships did in the past.

Original link: https://theconversation.com/how-the-tyranny-of-distance-affects-the-australian-economy-83359

‘[Being close to Asia] gives us an advantage in iron ore exports as China is the biggest importer.’

How the ‘tyranny of distance’ affects the Australian economy

This article was originally published by The Conversation and is republished here under Creative Commons (CC BY-ND 4.0). The original article is available at www.theconversation.com.

Peter Robertson, Professor, University of Western Australia

Special Feature: Iron Ore Special Feature: Iron Ore

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T here is an increasing groundswell of opinion that universities need to urgently redesign their undergraduate curricula to meet the changing needs of the digital age. This article attempts to address the specific challenges facing the

mining sector and university mining schools responsible for educating and training future resources professionals.

The digital transformation of miningIn this rapidly changing era of globalisation and digitisation, the mining industry is struggling to keep pace with the increasing developments in digital technology.

The introduction of automation and digital monitoring of myriad sensors requires engineers to have a sound understanding of digital tools, including cloud computing, big data analytics and the internet of things (IoT) (Long, 2017).

These tools include:• Visualisation of data using cloud computing and IoT

technology. This enables engineers to visualise the data from mine to market, thus allowing them to use this information to make better decisions to increase productivity and reduce costs, etc.

• Analytics and machine learning algorithms using real-time and historic data. This can provide engineers with insights to performance and mineral characteristics, thus enabling them to use dynamic scheduling, etc, to proactively make better management decisions.

• An immersive virtual environment whereby virtual ‘what if’

scenarios can be used to test new methodologies and predict and prevent failures, etc.

• Integrating automation across the value chain. This can enable mining companies to make better business decisions and make them faster and more intelligent.In light of this, it’s becoming obvious that a science,

technology, engineering and mathematics (STEM) education is going to be the first essential step for a career in the mining industry. Beyond that, pursuing digital mining-focused studies at a TAFE college or university will further develop collaborative, analytical and problem-solving skills.

Challenges and possible solutions for mining schoolsDuring the transition period from traditional mining technology to the era of digital mining, tertiary education institutions (TAFE colleges and universities) face unique challenges, including:• Ensuring there are clearly defined career pathways for

school leavers through to TAFE colleges or universities to achieve the skills and knowledge required for careers in mining in the digital age.

• Coping with the requirements of the widening gap between small and medium-sized brownfield mining operations with ageing infrastructure and the increasingly digitised large-scale open cut mines at new greenfield operations.

• Having academic staff with sufficient knowledge

and experience of digital technologies and their implementation at digital mines to help redesign curricula and lead innovation in teaching practices using digital tools such as the IoT, blockchain and artificial intelligence (AI).

• Combining with the curriculum a new set of service subjects around the core of mining technology including data analytics, modelling and associated statistical tools, sensor signal processing and sufficient knowledge of information and communications technology (ICT). This should be complemented with experience of how to interrogate and/or integrate various data sets to arrive at optimal management decisions.

• Cyber security is an ever-growing issue in the mining sector, as emphasised by Michael Rundus, Global Mining and Metals Robotic Process Automation Leader and Oceania Advisory M&M for Ernst & Young. As he states in 2015, there were 250 reported cyber incidents in the USA against operational technology supporting critical infrastructure and the mining sector shares similar cyber threat profiles.Mining companies and corporations will also look to

university mining schools to upgrade the digital knowledge and skills of their employees. This will require developing a range of appropriate programs from short professional development courses to Graduate Certificate and/or Diploma courses as well as course-based Master’s programs.

In all of this, courses will need to include a healthy balance of online delivery, face-to-face tuition and interactions

between students and industry practitioners. It is also worthwhile exploring the concept of establishing a more effective partnership with industry practitioners based on joint academe/industry appointments. Such appointees could be mining company personnel who are committed to deliver specialised services to a mining school to ensure the curriculum is enriched by up-to-date industrial practices.

Action being taken by university mining schools Mining schools in general are suffering from a global shortage of qualified and experienced staff, and it is difficult for them to compete with industry for suitable staff.

One solution is to use relatively low-cost online courses and webinars to help fill the gaps and supplement normal face-to-face tuition and tutorials, or to adopt block teaching sessions using globally recognised subject experts.

There is a wide range of online courses and webinars currently available including those by Mining Education Australia, University of British Columbia Mining Engineering and Edu-Mine, and most, if not all, are prepared by qualified and experienced industry specialists and academics.

Many highly reputed mining schools use this means of supplementing their curricula, including:• Universities of Arizona, Texas, Pretoria and Saskatchewan• Mackay School of Mines• Norwegian University of Science and Technology.

Below are some examples from various mining schools

Digital mines: the need for restructuring university courses

A look at how universities and mining schools might address the need for modernised curricula to ensure properly qualified resources industry professionals for the 21st century

Emeritus Professor Odwyn Jones AO FAusIMMRio Tinto iron ore operations centre, Perth.

Digital mines and education

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and universities showing how they are dealing with the current challenges faced by the rapid rise of digitalisation.

University of New South WalesThe University of New South Wales (UNSW) has committed $77 million to rebuild 600 ‘large student cohort’ courses over five years (Ross, 2017).

UNSW will revamp all subjects so that they can be delivered online, albeit academic staff will decide whether the subjects will be taught online, face-to-face or a combination of the two.

To assist in this work, faculty-based curriculum teams involving around 50 staff including some recent PhD students are being set up.

UNSW plans to redesign 80 courses in 2018 and continue thereafter with increasing momentum.

University of Queensland School of Mechanical and Mining EngineeringAs Dr Mehmet Kizil, mining engineering program leader at the University of Queensland (UQ), stated in an industry newsletter, ‘change needs to come in the way we prepare mining engineers’. Kizil is keen to see mine automation and data analytics being introduced into mining curricula while acknowledging that ‘Big Data’ emanating from myriad sensors in the ‘internet of mining things’ presents the biggest challenge (Abbey, 2017). We must teach students how this data can be stored and analysed to provide useful decision-making information and knowledge.

This continuous flow of data is produced in real-time, and to analyse it in real-time presents a huge challenge requiring machine/neural learning algorithms.

Universities should prepare undergraduates for this rapidly developing digital revolution while still ensuring they have a sound knowledge of their core earth science and related technological subjects.

The University of South AustraliaThe University of South Australia has defined its ‘Digital Learning Strategy’ for 2015-2020 with the intention to:• support students to become industry-engaged

professionals with digital competencies for their future careers

• support staff in developing digital literacies and capabilities to evaluate and introduce new digital technologies into their teaching

• provide increased opportunity for face-to-face interactions between staff and students and between students and industry practitioners

• improve utilisation of digital technologies to provide authentic experiential learning experiences.It also defines its strategic priorities as:

• delivering engaging and digitally enriched curricula• supporting students to become productive professionals

in the digital age• developing its academics as leaders in digital learning

(University of South Australia, 2015).

The importance of ‘work integrated learning’ in educating and training resources professionalsMining is both a science and an art, and I believe the technologies associated with mining are best taught when class-based lectures and tutorials are coupled with field, mine or plant visits and practical experience. Within the last decade or so, ready access for undergraduate students to mine sites has become problematic, especially for large groups. Consequently, the learning experience for students, even at mining schools located in close proximity to mine sites, has suffered.

This is an issue worthy of being vigorously pursued in discussion with mining companies.

However, modern digital technology provides a variety of tools to serve as a supplement to classroom teaching, such as websites with videos and virtual reality, both of which can help to overcome the lack of access to worksites.

Industry examples of digital mining operations at Rio Tinto and BHPUniversity mining schools have a responsibility to educate and train a new breed of mining professionals to cope with the rapid digitisation of mining operations. To do so quickly will require upgrading and retraining programs for existing academics, as well as recruiting new staff with the necessary expertise. However, to be successful, universities would be wise to seek the advice and guidance of leading mining corporations such as Rio Tinto and BHP and to work in partnership with them to develop their new curricula.

Rio Tinto’s ‘Mine of the Future’ program was launched in 2008 and the company has become a leading organisation in developing and implementing automation and other aspects of digital technology, predominantly at its Pilbara iron ore operations. As Chief Executive of Rio Tinto Energy and Minerals Bold Baatar states, the mining engineer is increasingly as specialised in software development as in mine planning. Air-conditioned cabs on their haul trucks are no longer required since they are fully automated and remotely controlled, while maintenance personnel often

plug in a tablet before seeking a spanner (Rio Tinto, 2017).Rio Tinto is the largest owner of autonomous haulage

systems in the world and most of its digital mines are in Western Australia. Along with other major companies, Rio Tinto continues to invest heavily in university partnerships worldwide, including at Curtin University, Murdoch University and UWA.

In her keynote presentation at IMARC 2017, BHP’s Diane Jurgens emphasised the need for the mining sector to push the boundaries that conventional mining imposes and highlighted two areas that will create the future of mining: integration and automation.

Integration is achieved through the IoT, which connects all sensors within a processing network. BHP’s new operating model applies system engineering to work with its assets to analyse mine life cycles, identify constraints and prioritise investments.

Recently, ‘smart caps’ were trialled at the Escondida mine in Chile to measure driver fatigue by analysing brain waves. At Area C in the Pilbara, AI is used to choose which crusher trucks should be used to minimise queuing, thus reducing costs and idle time. Advanced sensors and real-time process control can also improve quality and grade of ore delivered to the processing plant.

BHP is also trialling electric vehicles at the Olympic Dam underground mine in South Australia to minimise miners’ exposure to toxic diesel fumes.

Integrating all these technologies to manage BHP‘s operations as a single system will reap huge benefits.

But as stated by Jurgens at IMARC, one of Australia’s biggest challenges is the shortfall in STEM candidates. By 2030, half of the workforce will need high-level programming, coding and software skills. The BHP Foundation has committed more than $55 million over five years to the Australian STEM program.

University mining schools must embrace the digital revolutionEvery unit within undergraduate engineering courses must be justified on the basis that its contribution is

essential to the prescribed holistic learning experience of undergraduates. Graduate mining engineers, for example, have always required a sound understanding of the industry’s entire value chain – from exploration to the definition and modelling of the orebody or deposit, its safe and economic extraction, production of the final marketable product and mine closure. It is only their understanding and knowledge of the entire value chain that engineers can assess the economic viability of proposed mining ventures.

Nowadays, computing power, modelling tools and the mass of detailed information gathered in real-time from myriad sensors provide an integrated information base to mining professionals hitherto unsurpassed. Hence, it is vitally important to produce graduates conversant with 3D and 4D modelling, optimisation software, automation and robotic technology and the ability to integrate the various data sets in order to achieve optimal design and management decisions.

Subjects like theory of machines, power in mines, mine transport systems, occupational health and safety and industrial relations take on a new meaning in this digital age, not to mention the impact on the hardcore subjects of mine planning and design, orebody modelling and mine valuation, etc. As stated recently by Steven Walsh, Deloitte’s National Consulting Lead for Energy and Resources, ‘digital application in mining is maturing rapidly and it soon will be expected of every mining organisation’ (2017). Quite suddenly, the nature of both the industry and its workforce is changing with increasing rapidity.

ConclusionIt’s important to emphasise the urgent need to make future careers as mining professionals attractive to the best and brightest school leavers, and especially those with demonstrable interest and skills in IT. As stated in January 2018 by the Minerals Council of Australia, ‘the mining engineering pipeline has been rapidly declining, with projected enrolments dropping from 171 in 2017 to 98 in 2018, 69 in 2019 and 47 in 2020’ (Byers, 2018).

One wonders how soon digital mines will become the norm. Current predictions suggest this will occur within the next decade, although implementing digital technology at existing mines with ageing infrastructure will be challenging and possibly uneconomic, depending on remaining reserves and grades.

There is therefore a great urgency for Australia’s universities and mining schools to reorganise and redesign their curricula to meet both the demands and challenges facing the industry.

Digital mines and education Digital mines and education


Unfortunately change occurs slowly at universities, if only because it takes a minimum of four years to produce a graduate mining or minerals engineer. Consequently, the sooner curricula changes occur the better. However, it’s imperative that it is done correctly.

In the short to medium term, there will also be a growing demand from mining companies for professional development and refresher courses in various aspects of digital technology for their staff.

Finally, it is most appropriate to close by emphasising the need for mining schools to have guaranteed sustainable budgets that do not follow the ups and downs of mining cycles. Otherwise, the quality of tuition will tend to follow the same pattern with staff reductions etc, occurring during periods of industry downturns.

ReferencesAbbey E, 2017. Digital mines: on the pathway to mining without miners [online], Spatial Source. Available from: www.spatialsource.com.au/company-industry/digital-mines-pathway-mining-without-miners.

Byers D, 2018. Australian mining education summit to help build tomorrow’s workforce [online], Minerals Council of Australia. Available from: www.minerals.org.au/news/australian_mining_education_summit_to_help_build_tomorrows_workforce.

Long G, 2017. Digital Transformation in Mining [online], Accenture. Available from www.accenture.com/au-en/insight-resources-digital-transformation-future-mining#visual.

Rio Tinto, 2017. What will the mining workforce of the future look like? [online]. Available from www.riotinto.com/ourcommitment/spotlight-18130_22976.aspx#.

Ross J, 2017. UNSW reboots curriculum with eye on the digital age, The Australian, 5 April.

Rundus M, 2017. Industry Q&A: Cyber Security in the Mining Sector [online], Austmine. Available from: www.austmine.com.au/News/industry-qampa-cyber-security-in-the-mining-sector-1.

University of South Australia, Digital Learning Strategy, 2015-2020 [online]. Available from: www.unisa.edu.au/About-UniSA/University-of-South-Australias-Digital-Learning-Strategy-2015---2020/.

Walsh S, 2017. Miners need to embrace the digital revolution [online], Deloitte Australia. Available from: www2.deloitte.com/au/en/pages/media-releases/articles/miners-need-to-embrace-the-digital-revolution-010317.html.

Digital mines and education

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The conference will provide numerous opportunities to network with consultants, contractors, industry representatives, regulators, researchers and academics to discuss state-of-the-art

developments in tailings management around the world.

Keynote Speakers

BRISBANE23–24 JULY

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TAT YA N A A L E X I E VAGlobal Practice Lead

B H P

...who’ll provide an industry perspective on tailings management

D R A N DY R O B E R T S O NFounder

Ro b e r t s o n G e o C o n s u l t a n t s

...will present on tailings governance and resilience

P R O F. D I R K VA N Z Y LT h e Un i ve r s i t y of B r i t i s h C o l u m b i a

...who’ll present on tailings life-cycle and sustainability

P R O F. D AV I D W I L L I A M S M A u s I M M

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...will focus on recent tailings research at the Geotechnical Engineering Centre

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Saturday 21 JulyQUEENSLAND ALUMINA LIMITED TOUR

To visit the QAL facility where the residue from the alumina refinery is neutralized and stored. The containment areas are being constructed by upstream construction using pre dominantly residue as the construction material.

Sunday 22 JulyGOVERNANCE OF TAILINGS DAMS: IN THE WAKE OF MOUNT POLLEY AND SMARCO FAILURES

The Workshop will discuss the appropriate level of tailings dam governance to avert the tragedy of ongoing tailings dam failures world-wide at a rate of about 2 per year, 100 times the rate of water dam failures. Tailings dam failures are a key threat to the mining industry’s financial and social licence to operate.


A ll businesses face tough competition in the marketplace, and the number of competitors and the intensity of that competition only increase over time. In the resources sector, which is often characterised by volatile

commodity prices, for a business to sustain a competitive advantage it must have a thorough understanding of its core competencies as well as what differentiates it from its competitors. Based on that knowledge, the business can then investigate what forms of intellectual property (IP) protection best serve it.

The business should also understand what IP it thinks it has and what IP its competitors may have. Once the answers to these questions are known, the business should ideally investigate whether it is free from competing third-party rights, and whether it needs to licence in or develop more IP to enable it to sustain its competitive advantage. Ideally, these investigations should be ongoing and the business should regularly review its IP rights to ensure that they align with the business plan.

The subject of this article is very broad, and one cannot do justice to every topic in this brief overview. This article will endeavour to provide a summary of the main points that should be considered, and highlight that IP rights are important for any business in the resources sector.

What is intellectual property?It is important to understand what is meant by IP, its ‘categories’, and how these can be used in a business context. One simple definition of IP is ‘the property of your mind or proprietary knowledge’. As such, IP may encompass everything from literary and artistic works to branding and reputation, industrial and scientific innovations and know-how.

The main forms of IP that are relevant in the mining sector are:• patents, which protect inventions such as new products

and processes• trademarks, which protect indicators of origin such as

brand names, logos, packaging, sounds, scents, colours• designs, which protect the appearance of products such

as their shape or pattern• copyright, which protects independently created works

such as text, drawings, plans, manuals and computer programs

• trade secrets, which protect confidential information.Of the above, only patents, designs and trademarks

are registrable forms of IP. In Australia, each of these rights must undergo a process of examination by IP Australia, the government body comprising the Australian Patent Office and Trademark Office that is

empowered to review IP applications and grant exclusive rights. Non-registrable IP rights include copyright, confidential information, trade secrets and know-how and, to some extent, reputation.

A significant advantage of registrable forms of IP is that they are an easily tradable asset, which can be bought, sold, licensed or mortgaged. Furthermore, IP is a multi-purpose and strategic business tool which, for example, can lock competitors out of a market either directly or by providing a business with a specific cost or capability advantage. Alternatively, IP may be used to generate revenue, eg as a royalty stream from licensing, or it can attract venture capital or research funds. It can also simply serve as a marketing tool.

What do patents protect?Imagine your business has spent time, effort and money inventing a new device, process, system or chemical substance, which you believe will provide a commercial advantage over your competitors. You may attempt to protect the invention by keeping it a trade secret. However, nowadays almost any product released to market may be reverse-engineered and methods, trade secrets and know-how invariably transition with personnel. The only real alternative is to file a patent application.

A patent is legally enforceable and provides ‘negative rights’, in that the owner has the right to exclude others from exploiting the invention for the 20-year life of the standard patent. It is worth noting that a patent does not signify commercial usefulness or success of the invention. This is partly because the criteria for patenting (novelty, inventiveness and usefulness) are different from the criteria for commercial success, and partly because a great deal of effort is normally required to bring a successful product to market, irrespective of whether a patent has been granted. Patents are the only means of securing a monopoly for a technical invention, can act as a deterrent to competitors, and patented products may command premium prices.

What is patentable?For an invention to be patentable in Australia, it must belong to the ‘useful arts’ rather than the ‘fine arts’, it must provide

Intellectual property – strategic use and management in the resources sector

A strong IP strategy is a vital part of any business, especially in the resources sector where innovation has historically provided key competitive advantages

Michael Zammit PhD, Registered Patent Attorney (Aus and NZ) – Senior Associate and Scott Philp, Registered Patent Attorney (Aus and NZ) – Senior Associate, Shelston IP

Intellectual property in the resources sector

‘A strong IP strategy is the key to a successful business strategy, especially in the resources sector.’

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a material advantage and its value to the country must be in a ‘field of economic endeavour’. This is a very broad test, and over time authority has determined that a very wide range of fields of art meet the test and are patent-eligible.

There are several threshold requirements to be eligible for patent protection, the main two being novelty and an ‘inventive step’. To be novel, a patent claim must define a new combination of features not previously known to the public. The issue of an inventive step is a little more complex and involves an assessment of whether, in light of what was already known, it would have been obvious for a person of ordinary skill to arrive at the invention. The word ‘obvious’ suggests a development that does not go beyond the normal progress of technology, but merely follows plainly or logically from the prior published literature (known as the ‘prior art’).

However, judicial interpretation has also recognised some categories that will fail to satisfy the above test. These include mere discoveries, ideas, scientific theories and laws of nature, schemes or plans without technical implementation, mathematical algorithms and mere presentation of information.

The resources sector, with its proclivity for inventing new industrial processes and its significant economic contribution, is a field where patentable IP has flourished. Examples include: • The ‘Dragline bucket’ owned by CMTE Development

Limited, which provides separate front and rear hoist ropes attached to front mounting points and rear mounting points of the bucket, thereby allowing the front and rear hoist ropes to be independently operated to vary the horizontal attitude of the bucket (Australian Patent No. 2004207143).

• ‘Precipitation of zinc from solution’ owned by Xstrata Queensland Limited. In this invention, a solid zinc containing material and gypsum is caused to precipitate without substantial precipitation of magnesium, whereby the zinc material can be selectively recovered in high purity (Australian Patent No. 2012212381).

Two types of Australian patentsAustralia has a two-tiered patent system. The standard patent has a term of 20 years, is substantively examined by the Patent Office and, prior to grant, is advertised to allow third parties to oppose.

The innovation patent is a shorter-term Australian patent valid for a maximum term of eight years. Innovation patents have a comparatively lower threshold test for inventiveness

and a streamlined examination process, making them particularly advantageous as a means of obtaining patent protection at relatively low cost or to protect products or processes that may not satisfy the threshold test for standard patents. Innovation patents can also be powerful commercial tools in the context of patent enforcement, because they are quick to obtain and notoriously difficult to challenge. Recently the government has indicated the innovation patent regime will be abolished in 2018.

What is a trademark and what does it protect?A trademark is a sign or other device used to indicate the origin of goods and services, including brand names, logos and aspects of packaging. Generally, the proprietor of a registered Australian trademark has a legally enforceable right to the exclusive use of the mark within Australia in relation to the goods or services covered by the registration.

There is no requirement to register trademarks in Australia as a precondition to use, and often brand owners simply apply the ™ symbol to their unregistered mark. However, registration (®) provides many advantages, including enforcement, brand protection and commercialisation. A trademark registration can remain in force indefinitely, but if the trademark is not used, it may be at risk of removal from the register.

To be registrable, a trademark must distinguish the goods or services of one trader from others. In other words, it must not be descriptive of the goods or services themselves, as registration of a purely descriptive word could hamper other traders wishing in good faith to use that word as a genuine description of the same type of goods or services.

For example, a trademark for the word ‘Loader’ in relation to ‘vehicles for mining and earth moving’ is not capable of distinguishing those goods, because it directly describes them and other traders will likely want to use the term loader to describe the same type of goods.

Although there are exceptions, words that are common surnames (eg ‘Smith’), geographical names (eg ‘Kalgoorlie’), purely laudatory (such as ‘Best’ or ‘Number 1’), or directly descriptive of the relevant goods or services are generally not registrable or can be registered only after becoming distinctive through use. Registration will also usually be refused if the trademark is identical or deceptively similar to another trademark already registered in relation to the same or similar goods or services.

Common law and Australian consumer law provide remedies against persons seeking to cash in on another’s

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R E G I S T E R N O W

BRISBANE25–27 JULY

#lom2018

Integrating innovative approaches to mine design, management and operation for delivering enhanced environmental, social and economic performance

Conference Themes• Integrating mine planning and

processing for environmental performance

• Innovation for delivering better sustainability outcomes

• Incorporating societal and community factors into design and operation

• Strategies and planning for improving rehabilitation outcomes

• Influences of global trends on the future of the Industry

M I C K B U F F I E RChairman

W o r l d C o a l A s s o c i a t i o n

Group Executive - Sustainable Development & Industry Relations

G l o b a l C o a l A s s e t s G l e n c o r e

D R G R A E M E H A N C O C K M A u s I M M

General Manager Social Performance

N e w c r e s t M i n i n g L i m i t e d

P R O F. K I N G S L E Y D I X O NJohn Curtin Distinguished Professor

C u r t i n U n i v e r s i t y

D R A L E X W O N H A SManaging Director - Energy Resources & Manufacturing

A u r e c o n

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reputation by making unauthorised use of a confusingly similar trademark on the same type of goods or engaging in misleading or deceptive conduct.

Good management of intellectual propertyWhen it comes to managing IP, it is always best to start simple. The first step for a company should be identifying and capturing its IP. If the processes are too complex, then the key people involved are likely to give up before the process even starts. Some useful strategies include having incentives for staff to attend face-to-face meetings to disclose their innovations, or linking the innovations to performance or funding, and formalising recognition and celebration of inventions and inventors. There should also be clear guidelines for record keeping, particularly in an innovative environment such as resources.

Ideally, a business should ask itself at the earliest possible stage the following questions. The answers will assist the business in determining how to strategically use and manage its IP.

Ownership It is paramount to properly identify inventors and clearly demarcate who will own what IP generated by the business. For instance, what is the relationship of the inventors to the business and how does this relationship effect the ownership of IP? Alternatively, is a collaborative relationship being considered? If so, who is bringing what to the collaboration? Written agreements with all staff and researchers, including contractors and collaborative partners, are a must.

Scope What are the short- and long-term business plans?

Publication What has been or is about to be published? Is the invention or research novel? If so, then consider patenting.

Freedom to operate Is a completely new product or process being used or contemplated? If so, are you free to exploit the technology without infringing other IP rights?

Funding How is the research to be funded? Is capital raising required? Are there tax or government funding options that may be exploited?

Intellectual property management practices and policiesIt is important for the business to have written agreements with all staff and researchers, including written agreements with contractors and collaborative partners. It is also important to undertake novelty or infringement searches before embarking upon research, otherwise there is a real risk that researchers will ‘reinvent the wheel’ or are impeded from taking newly-developed products to market.

It is also preferable to monitor your competitor’s IP, not only to ascertain what IP may block you, but to also to provide market intelligence in advance of commercial exploitation. There are a multitude of publicly-available databases that can be searched, either by the researchers or via a professional searcher.

Concluding commentsA strong IP strategy is the key to a successful business strategy, especially in the resources sector where innovation has historically provided key competitive advantages. By retaining experienced counsel and developing a robust IP strategy, a business can avoid, or at least manage, many expensive pitfalls and add real value into an organisation.

DisclaimerThis article is intended to provide a brief overview of general IP considerations and should not be regarded in any way as an exhaustive treatise on IP law. There is no substitute for detailed advice from a Patent and Trademark Attorney aware of the relevant facts and experienced in this specialised field. If you have any questions or require any further information or clarification, please do not hesitate to contact Shelston IP.


Key Conference Topics

• Geological aspects of narrow vein orebodies

• Developing robust resources/reserves

• Project studies and financial modelling:

managing technical complexities

• Application of Geometallurgy to Narrow Vein

Mineralisation

• Mineral Processing - from core to

concentrate

• Ore control and reconciliation in Narrow Vein

operations

• Best practices in mining methodology: bulk or

selective mining methods?

• Geotechnical applications for safe and

efficient mines

• Managing Narrow Vein operations: removing

technical silos to achieve professional unity

• Innovation and the future Narrow Vein Mine

• Health and safety issues

• Geology and exploration of narrow vein

orebodies

Blending traditional skills with innovation to achieve sustainable operations

PERTH13 - 14 SEPTEMBER

#narrowvein2018

narrowvein.ausimm.comFor more information visit

Call for abstracts open DUE 2 JULY2018

Many historical narrow vein mineral fields are being re-evaluated or redeveloped globally. Due to a lack of discovery of world-class deposits, smaller operations are now more likely to gain importance in the global industry. The skills and expertise required to operate these resources are arguably highly specialised and relatively rare.

This conference will bring together all involved in narrow vein mining, including geologists, mining and geotechnical engineers, and metallurgists. The future of narrow vein mining depends upon skilled professionals and on developing practical, flexible and innovative methods for orebody definition, mining and processing.

Overview

*Full papers will not be required


T he downturn is over, the investment cycle has restarted and mining companies are announcing hundreds of new jobs on a regular basis. In the few weeks leading up to Christmas 2017 alone, Rio Tinto, BHP, Glencore and Iluka Resources

announced major projects totalling almost 1000 jobs.Great news, on the face of it. But the problem on the

horizon is finding qualified and experienced people to fill these positions. The last downturn saw the industry shed thousands of jobs and many of those people aren’t coming back.

Having observed several cycles now for more than 40 years working either in, or consulting to, the resources industry, the pattern is clear. When a savage downturn occurs (as we have experienced in recent years) many people lose their jobs, but remain hopeful for around one to two years that they might regain work in the industry when things pick up.

After that period we tend to notice a shift, where a whole generation of skilled workers decide that they have looked long enough and now must move on, possibly to re-train in a different profession or restructure their lives and retire from work all together.

Despite this, we have observed that some employers don’t see this and continue to believe for quite some time that there is a large pool of eager, unemployed mining

workers out there, just waiting to be asked back. This is simply not true. What makes this worse is the severity of the latest

downturn and as a result the extreme negative commentary about the mining industry, resulting in young people not studying mining engineering, geology, metallurgy and other mining-related subjects in the numbers they used to. The Minerals Council of Australia expects mining engineering enrolments to fall from 171 in 2017 to 47 in 2020.

Why aren’t people studying mining-related subjects?A recent report by Mining News quoted Evolution Mining executive chairman Jake Klein saying mining wasn’t seen as ‘cool’ (Batten, 2018). It seems while there’s a renewed focus on getting students to study science, technology, engineering and mathematics subjects, the students have dreams of careers in Silicon Valley, not Tom Price.

‘We need to compete with the allure of the Facebooks and Googles to attract and retain the best and brightest talent back to our industry,’ Klein said (Batten, 2018).

For mining companies and their internal recruitment teams, any mention of a skills shortage conjures up memories of the last boom, when wages were out of control.

When the east coast media would run a story in a Sunday paper or on a Sunday night current affairs show, detailing

the $150 000 salaries for inexperienced truck drivers, our Perth and Kalgoorlie offices would receive hundreds of phone calls on Monday.

Things were really out of control.The previous issues appeared to have started because

excessive prices for bulk commodities drove up salaries in those sectors, forcing all other miners to follow. But the bulk miners today still seem very wary of where the prices for their products are headed at the moment.

Additionally, it is those sectors that are probably leading the way in the uptake of autonomous equipment, which will somewhat ease pressure on the demand for certain labour.

Avoiding skilled labour shortagesWhile the industry’s peak bodies and leaders consider how to attract more people to a possibly ‘uncool’ industry that still has fantastic and rewarding opportunities, mining companies and their recruiters on the front line will be focusing on the immediate problem at hand. That is, many skills are already in short supply. As we reported in December 2017, skillsets from dump truck drivers to geologists are now thin on the ground (Mining People International, 2017).

Things are going to get tighter, but I also don’t believe it’s quite ‘back to the bad old days’ and may not get there. I certainly hope not.

But we will be dealing in a market where demand for skilled labour is high but candidates are in short supply.

So, in such a market how does a mining company succeed in filling their vacancies?

The big easy win is to take the blinkers offStill far too many employers describe a very small total potential talent pool (TPTP) from which they are prepared to draw people. They ‘require’ very strict criteria to be met, for example:• very tight age ranges• very specific degrees• very specific experiences

Every such criteria applied to a position requirement effectively removes a large percentage of the TPTP.

If these criteria are relaxed and a little more emphasis is put on the cultural and personality fit of a candidate, the TPTP to draw from is much larger. If someone fits your culture and they’re smart, they can usually absorb new experiences and transfer skills pretty quickly.

To prove the point, Tony Turton, our Principal Consultant at Mining People International, has said that there are actually quite a few open pit-experienced mining engineers floating around since the downturn. The trouble is, they’re mining engineers with open pit experience and at the

Is there another looming skills shortage in Australian mining?

No one is talking about it in dramatic terms yet, but the industry’s key figures agree – Australian mining is facing a looming skills shortage.

Steve Heather, Managing Director and Principal Executive Search, Mining People International

Is there another looming skills shortage? Is there another looming skills shortage?

‘The Minerals Council of Australia expects mining engineering enrolments to fall from 171 in 2017 to 47 in 2020.’

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moment most mining engineering vacancies are for people with underground experience. We need to remember that when those mining engineers graduated, they had no experience.

So why does this happen?One explanation could be that in mining, many relatively young people end up in quite senior roles early on in their career. While they may have technical skills, they have not yet gathered a lot of life experience and as a result we see some of them with responsibility for hiring people, being somewhat intimidated by the idea of hiring from a demographic that does not fit their own image of what it took to get there.

They also feel the pressure of getting it wrong and needing to prove themselves and so defer to a more conservative and safe approach.

Senior executives can play an important role here, as can remuneration and nominations committees on boards, by supporting young managers when making senior appointments, by encouraging them to be less conservative,

but showing them how to still run a structured process to ensure the cultural and personality fit does occur.

Companies that are willing to do this will have access to much bigger TPTP’s and be much less likely to suffer the suffocating effects of being under-staffed.

If you need help recruiting talented, skilled candidates, get in touch with the team at Mining People International. We have specialist recruiters in all areas of the mining industry. Visit www.miningpeople.com.au/contact.

Is there another looming skills shortage?

ReferencesBatten K, 2018. Mining’s Quest for Talent [online], Mining News.net. Available from: www.miningnews.net/leadership/news/1315243/minings-quest-talent.

Mining People International, 2017. The hardest jobs to fill in mining right now [online]. Available from: www.miningpeople.com.au/news/the-hardest-jobs-to-fill-in-mining-right-now.

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The Fourth Australasian Ground Control in Mining Conference 2018

The conference will provide an update to all mining industry geotechnical personnel on best practice in both Australasia and overseas. AusRock 2018 provides a vehicle for information exchange between the coal and metalliferous sectors of the industry with a focus on new technologies and developments, industry needs and mine site problem solving, and practical case studies.

SYDNEY28–30 NOVEMBER

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T he Origin of Rocks and Mineral Deposits is the fruit of many years of ongoing research and practical application, resulting from a passionate attention to research and detailed field observations. It is recommended reading in

the earth sciences. John Elliston started his geology education under the

tutelage of Professor S Warren Carey at the University of Tasmania (UTAS), and in the late 1950s through to early 1980s ran a highly successful exploration team for Peko Wallsend, initially based at Tennant Creek, using a combination of geology and geophysics.

The Origin of Rocks and Mineral Deposits covers an important contribution to the ongoing understanding of the formation of rocks and minerals aided by numerous illustrations, including photos. The photos are perhaps overused; however, they are most useful in helping to understand many of the natural processes presented.

Elliston presents his own ideas and the reasons and theory behind them, which Distinguished Professor Ross Large at UTAS states are ‘based on good science.’ As pointed out in the book, good science is of utmost importance, with the message to not necessarily accept the majority viewpoint or claims of consensus. This is an important message to all scientists, whatever discipline they work in.

Elliston’s ideas have not been without controversy, which is referred to in the book, including reference to other scientists who rejected Elliston’s ideas.

Throughout the book, it is assumed the reader is well versed in chemistry and physics, which means its appeal is directed to such a reader and not to a wide audience. It is assumed this was the intention of the author.

While mineral discoveries were attributed to the author’s ideas made during the time of Peko Wallsend’s exploration successes, the book fails to record other exploration successes – perhaps made by other companies using these ideas – which is disappointing. However, I understand there is a second book to be launched shortly that discusses the company exploration successes and failures in more detail.

The first five chapters of the book’s seventeen provide an excellent coverage of diagenesis and ore fluids, which contribute in a major way to ongoing research and evolution of scientific research in this field. Elliston’s knowledge of clays, colloidal processes, textural diagenesis and ore fluid generation is well-explained in the book, highlighting his innovative way of thinking compared with mainstream geologists and geochemists.

‘The Origin of Rocks and Mineral Deposits covers an important contribution to the ongoing understanding of the formation of rocks and minerals.’

The Origin of Rocks and Mineral Depositsby John Elliston

Book Review

Reviewed by Tony Hope FAusIMM(CP)

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v alentine John McSweeney, awarded a Bachelor of Engineering (Mining) from the University of Queensland in 1953, was by 1971 attracting headlines such as ‘A doctor to ailing mines’ (Sunday Times) and ‘McSweeney

can fix it’ (The Australian). Bryan Frith’s opening paragraph from the Australian article captures some key features of John’s career: ‘Every industry has its Red Adair, its trouble shooter who is called upon when all else fails. Valentine John McSweeney, chairman and managing director of Greenbushes Tin NL, is one of this small band.’

Apart from research work for the Atomic Energy Commission in 1955, university was followed by about six years of tough fieldwork – underground in Kalgoorlie, base metal exploration work in the Northern Territory and underground shifts in a uranium mine in Saskatchewan.

Typical of John’s skills and efforts was his work at Greenbushes. Prior to 1968, Greenbushes Tin NL was loss-making. In 1967, John accepted Ken McMahon’s challenge to save the mine, which was at the time a dredging operation. Greenbushes, 250 km south of Perth, is now, according to a 2017 article from The Australian, the world’s largest source of both lithium and tantalum.

Energy was a key component of John’s successes. For years he headed off to work by road at 4:30 am. When he first went to Greenbushes, John worked two shifts a day to save the loss-making mine – by day in the site office and by night on the 1100 t bucket dredge. Few could match his energy and drive.

Greenbushes is but one of several success stories in which John has played a prominent role. For example, in 1961 John was appointed Reconstruction Manager for the loss-making Wyong Minerals Ltd in NSW, and then for Aberfoyle’s Tasmanian operations in 1962. John had thereby contributed significantly to the profitability of operations under the control of Ken McMahon’s Minsec mining house.

John’s next assignment was with the Foyster family’s mineral sands operations. Then, still with the Foysters, John was an explorer and Project Engineer for Consolidated Rutile on North Stradbroke Island from 1964 to 1967. John was

responsible for developing the dry mining technique and for designing and constructing the primary concentrator.

From 1967 John resided in Western Australia, where he was active for the next 40 years in both the consulting engineering and corporate entrepreneurial roles. First as John McSweeney and Associates and then as McSweeney Partners, John provided mining and development advice to mining projects around the world.

The consultancy was continued by John’s sons and the name has changed to MSP Engineering (MSPE), with John’s son Peter at the helm.

John was a practical scientist at heart. His lifetime passion for innovation in mineral processing included several decades as a partner in a metallurgical laboratory in Perth, Micron Research, founded by Arnold Griffin – who remained a friend for over four decades. John always looked for a new or better solution to extract minerals and was recognised as a pioneering inventor and innovator. As an AusIMM member for over 67 years, John maintained a keen interest in new mineral processing and mining techniques and kept articles from his AusIMM magazines.

John was responsible for several IPOs and new gold mining operations. Some of John’s corporate positions in the 80s and 90s included Managing Director Greenbushes Tin NL, Chairman and CEO of McMining, Chairman of Electrum Minerals, Chairman of Gindalbie Gold NL, Director of Territory Mining and several others. McMining and Electrum formed a joint venture managed by John to open up and operate the Brilliant Tindals gold mine in Coolgardie. Gindalbie Gold discovered and operated the Two Boys and Minjar Gold operations under John’s guidance.

There was a confluence of natural talents, interests, energy, determination, relationships and experience in John’s successes. His career was one built on past learning and success: experience gained with gravity separation research for the AEC in 1955 flowed on to fixing tin circuits in Tasmania, to the design of Consolidated Rutile plant, to modification of the Greenbushes flowsheet and then to decades of design of gravity separation plants and further research at Micron.

Valentine John McSweeney1931-2017David McSweeney

Obituary

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and put them into practice will gain a valuable advantage over their competitors.”Geoff Sharrock FAusIMM(CP), AusIMM President 2013-2014

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D enys Harraway, who died in October 2017, was involved in the mining industry all his working life.

In 2014 he was given a Certificate of Long Standing Membership, which acknowledged

his 60 years of membership with AusIMM. This started when he was a student at Otago School of Mines in Dunedin, New Zealand. His involvement with AusIMM continued throughout his career.

He graduated from Dunedin in 1955 with a Bachelor of Metallurgical Engineering. While studying there he did holiday work in the Huntly Coal mines in New Zealand and at Broken Hill and Mt Isa in Australia. After graduating, he was appointed Junior Metallurgist at Mt Isa. A year later he was awarded a Fulbright Scholarship and elected to take it at the prestigious Mining School of the University of Minnesota. He graduated from there with a Master of Science in Metallurgical Engineering in 1958.

He returned to Mt Isa where he rose to be Senior Metallurgist in the Research Department. During this time in Mt Isa he was on the AusIMM committee and, as well as other professional activities, he made welcome new members to the Mt Isa branch. 1964 saw a move to Newcastle to work for BHP Central Research Laboratories, where he was responsible for mineral processing. In this role he travelled to BHP mines throughout Australia and overseas. He was very active in the Newcastle branch of AusIMM. As well as the regular meetings, Denys was involved with many mining related visits and social events.

In 1969 he was moved to the Head Office of BHP in Melbourne as Mineral Sales Development Manager. During the next six years he made many trips to Europe and to Japan working on various projects for BHP. He also represented the company on Australian government trips to Sweden, Finland and Turkey. He continued his involvement with AusIMM in Melbourne, attending meetings, sitting on several committees and going to social events.

Six years later he took up the position as the company’s American Representative in New York. As President of BHP International, he coordinated the activities of BHP in North and South America. He was a member of the Mining Club and enjoyed hearing some remarkable speakers at their lunches. At the end of his posting in New York, before returning to Melbourne, he spent six weeks in Geneva at the United Nations Convention on the Law of the Sea as a representative of industry for the Australian government.

The next four years were spent in Melbourne and included more overseas trips for the company. He continued to be an active member of AusIMM and was on various committees. He was on the RMIT Chemical Engineering department’s course advisory committee in the 1980s. This was followed by four more years in the USA, this time in San Francisco – as BHP had bought Utah International, and it was decided that BHP USA should be based in San Francisco.

Upon return to Melbourne in 1989 he was asked to research the feasibility of BHP establishing a space at Cape York for launching satellites. In this role he travelled to Cape Canaveral, and to the Vandenberg Air Force Base in California. Before retirement Denys spent a couple of months in China as a temporary BHP representative.

Denys’ interest in the activities of AusIMM continued after his retirement as he always read the Bulletin and frequently went to meetings and talks when there were topics of interest to him. Denys made many friends at AusIMM in Mt Isa, Newcastle and Melbourne. He will be missed by them, and his family.

‘Denys made many friends at AusIMM in Mt Isa, Newcastle and Melbourne. He will be missed by them, and his family.’

Denys Henry Harraway1932-2017Susan Harraway

Obituary

EXPLORATION AND RESEARCH | MONOGRAPH 31

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industry, geological setting and selected mineral deposit types, followed by papers on the geology and exploration of individual prospective areas and mineral deposits.

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