Trends in Australia's Economic Demonstrated Resources of Major Mineral Commodities
The trends in Economic Demonstrated Resources (EDR) for Australia's major mineral commodities have undergone significant and sometimes dramatic changes over the period 1975–2011 (Fig. 1). These changes for each commodity can be attributed to one, or a combination of the following factors:
- increases in resources resulting from discoveries of new deposits and delineation of extensions of known deposits;
- depletion of resources as a result of mine production;
- advances in mining and metallurgical technologies, e.g. carbon-based processing technologies for gold have enabled economic extraction from low-grade deposits which previously were uneconomic;
- adoption of the Joint Ore Reserve Committee (JORC) Code1 for resource classification and reporting by the Australian minerals industry and the subsequent impacts on re-estimation of ore reserves and mineral resources to comply with the requirements of the JORC Code. Many companies re-estimated their mineral resources to comply with the JORC Code. The impacts of the JORC Code on EDR occurred at differing times for each of the major commodities; and
- increases in prices of mineral commodities driven largely by the escalating demand from China over the past decade.
Past trends and changes in EDR for a number of Australia's major mineral commodities are discussed below.
Increases in bauxite EDR in 1989 resulted from delineation of additional resources in deposits on Cape York Peninsula ('a' in Fig. 1). Decreases in bauxite EDR in 1992 resulted from reclassification of some resources within deposits on Cape York Peninsula to comply with requirements for the JORC Code ('b').
A major reassessment of New South Wales (NSW) coal resources during 1986 by the NSW Department of Mineral Resources and the Joint Coal Board resulted in a large increase in black coal EDR as reported in 1987 ('c').
EDR for black coal has declined since 1998 because of the combined impact of increased rates of mine production and mining companies re-estimating ore reserves and mineral resources more conservatively to comply with requirements of the JORC Code. In 2009, black coal EDR increased significantly mainly because of the discovery and delineation of additional resources as a result of high levels of exploration and through reclassification of resources.
Australia's EDR of iron ore declined from 1994 through 2003 due to the combined impacts of increased rates of mine production and mining companies re-estimating reserves and resources to comply with the requirements of the JORC Code. Post 2003, EDR increased rapidly to 37 800 Mt in December 2011, due to large increases in magnetite resources (including reclassification of some magnetite deposits to economic categories), and increases in hematite resources, mainly at known deposits. Mine production increased rapidly from 168 Mt in 2000 to 488 Mt in 2011.
Gold EDR has increased steadily since 1975 with a clear increase in the rate of growth since 1983. Much of the increase can be attributed to the successful introduction of carbon-based processing technology that allowed the profitable processing of relatively low-grade ore deposits. In addition, the higher than previously prevailing gold prices (denominated in US$) supported high levels of exploration for gold to the extent that gold accounted for more than half of the total mineral exploration expenditure in Australia for many years. Increased exploration contributed to the increases in EDR.
Following the adoption of the JORC Code by the Australian mineral industry, many companies first used this code in 1989 for reporting their copper resources. These companies re-estimated mineral resources to comply with the JORC Code which resulted in a sharp fall in Australia's copper EDR in 1989 ('d').
The sharp increase in copper EDR in 1993 resulted mainly from an increase in company announced resources for the Olympic Dam deposit in South Australia (SA). Additional resources were reported also for Ernest Henry in Queensland (Qld), Northparkes (NSW) and other smaller deposits ('e').
Reassessments of copper resources by Geoscience Australia in 2002 and 2003 resulted in further transfers (reclassification) of Olympic Dam resources into EDR ('f'). In 2007 and 2008, copper resources again increased sharply, mainly because of Olympic Dam, where drilling outlined large resources in the southeastern part of the deposit ('g').
The adoption of the JORC Code in 1988 by the Australian mineral industry led to a re-estimation of mineral resources by many companies to align with the JORC Code, and some reassessments of resource data for other deposits by Geoscience Australia's predecessor, the Bureau of Mineral Resources. This resulted in a sharp fall in Australia's lead and zinc EDR in 1989 ('h').
Increases in EDR for lead and zinc in 1993 resulted from the reclassification of paramarginal demonstrated resources into EDR for McArthur River in the Northern Territory (NT) and George Fisher deposits (Qld). Additional resources were reported also for Century and Cannington deposits (Qld) ('i').
Increases in 2008 and 2009 were associated with reassessment of resources at the McArthur River mine, where an expansion from underground to open-cut mining was approved, reassessment of the Dugald River deposit (Qld) for which a new and increased resource estimate was released and reporting of additional resources for George Fisher in Qld ('j').
The EDR for nickel increased during the period from 1995 to 2001 by 18.2 Mt. This resulted mainly because of progressive increases in resources of lateritic deposits at Bulong, Cawse, Murrin Murrin, Mount Margaret, Ravensthorpe, all in Western Australia (WA), Marlborough (Qld), Syerston and Young (NSW). Australia's EDR of nickel doubled in 2000 (compared to the level at the end of 1999) – this dramatic increase was due to further large increases in resources at the Mount Margaret and Ravensthorpe deposits, and other lateritic deposits in the Kalgoorlie region (WA). In addition, during the period 1995 to 2001 there were increases in resources of sulphide deposits at Yakabindie, and the discoveries of the Silver Swan and Cosmos high-grade sulphide deposits (all in WA).
From 2001 onwards, the sharp rises in market prices for nickel led to increased expenditure on exploration and on evaluation drilling at many known deposits. This contributed to further increases in total EDR for sulphide deposits at Perseverance, Savannah, Maggie Hays, Anomaly 1, Honeymoon Well, deposits in the Forrestania area, as well as new deposits at Prospero and Tapinos in WA, Avebury in Tasmania and remnant resources at several sulphide deposits in the Kambalda (WA) region including Otter-Juan and Lanfranchi groups of deposits.
From 2001 onwards, EDR increased at a slower rate because of the absence of further discoveries of lateritic nickel deposits and as a result of increases in resources for some deposits being offset by companies reclassifying their lateritic nickel resources to lower resource categories pending more detailed drilling and resource assessments. Decreases in nickel EDR from 2009 onwards reflect reclassification of nickel resources in response to the very sharp falls in nickel prices following the 2008-09 global financial crisis followed by only a partial recovery in nickel prices from 2009 onwards.
Increases in EDR of ilmenite from 1996 to 2003 resulted from discovery and subsequent evaluation drilling of heavy mineral sands deposits in the Murray Basin which include the Gingko and Snapper deposits (NSW), Douglas-Bondi and Woornack deposits in Victoria, and the Mindarie project (SA). In addition, from 1998 onwards there were progressive increases in resources at mineral sands deposits at Jacinth-Ambrosia and Cyclone in the Eucla Basin embracing parts of SA and WA, in the North Swan Coastal Plain area north of Perth, WA, and the Blackwood Plateau region in WA. The EDR of ilmenite declined after 2007 owing to reclassification of resources to lower resource categories.
The majority of Australia's uranium deposits were discovered between 1969 and 1975 when approximately 50 deposits, including 15 with significant resource estimates, were discovered. Since 1975, only another five deposits have been discovered and, of these, only three deposits (Kintyre in the Paterson Province of WA, Junnagunna in Qld and Four Mile in SA) have Reasonably Assured Resources recoverable at less than US$130/kg U (equates with EDR). As a result, the progressive increases in Australia's EDR for uranium from 1975 to the present were largely because of the ongoing delineation of resources at known deposits.
From 1983 onwards, the Olympic Dam deposit has been the major contributor to increases in Australia's EDR. The large increases shown on Figure 1 occurred:
- in 1983, when initial resource estimates for Olympic Dam and Ranger No. 3 Orebody (NT) were made by the former Australian Atomic Energy Commission ('k');
- in 1993, when further increases in EDR for Olympic Dam and first assessment of resources for the Kintyre deposit were made by Geoscience Australia's predecessor, the Bureau of Mineral Resources ('l');
- in 2000, when increases were due to continuing additions to the Olympic Dam resources; and
- from 2007 to 2009 when a major increase in EDR for Olympic Dam was made after drilling outlined major extensions to the southeast part of the deposit.
Economic resources decreased in 2010 because of higher costs of mining and milling uranium ores. Resources in some deposits were reassigned to higher cost categories than in previous years. In previous years, resources in the cost category of less than US$80/kg uranium were considered to be economic. As a result of increases in costs and uranium market prices, economic resources in 2010 and 2011 were extended to include resources within the cost category of less than US$130/kg uranium.
1 In 1988, the Australian mineral industry adopted the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC Code). Many companies first used this code for reporting their mineral resources in 1989. The requirements of the Code differed significantly from the resource classification schemes used by companies prior to 1989.