Australia's Identified Mineral Resources 2005

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Summary

Australia's economic demonstrated resources (EDR) of the following mineral commodities increased during 2004 - bauxite, black coal, copper, gold, iron ore, ilmenite, lead, manganese, rare earth elements, tantalum, tin, uranium and zinc. EDR of cobalt, diamonds (both gem and industrial), lithium, phosphate, rutile, silver, tungsten and zircon decreased during the year. EDR for brown coal, magnesite, molybdenum, nickel, niobium, platinum group metals, shale oil, and vanadium remained at levels similar to those reported in 2003.

Increases in EDR were due to on-going drilling and evaluation of known deposits resulting in the transfer (re-assessment) of resources from inferred or sub-economic categories into EDR, and discoveries of new deposits or extensions of known deposits. Newly delineated resources of 1 256 t added to gold's total national inventory, with growth in all east coast mainland states and South Australia. A few mining companies re-estimated ore reserves and mineral resources more conservatively for some commodities to comply with the requirements of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code).

World ranking: Australia's EDR of zinc, lead, nickel, mineral sands (rutile and zircon), tantalum and uranium remain the world's largest, while bauxite, black coal, brown coal, copper, gold, iron ore, ilmenite, lithium, manganese ore, niobium, silver and industrial diamond rank in the top six worldwide.

Accessible economic demonstrated resources (AEDR): A relatively small number of mineral deposits are inaccessible for mining because of government policies or environmental and land-use restrictions that prevent mining. In particular, this is the case for some mineral sands and uranium deposits.

Resources and current rates of mine production: Ratios of AEDR to current mine production provide rough estimates for the resource life. AEDR of most major commodities can sustain current rates of mine production for many decades. While this is the longer term assessment, resource life based on ore reserves is shorter in duration reflecting a shorter term commercial outlook.

The resource lives for gold (an average of 22 years at current rates of production), lead (around 35 years) and zinc (around 30 years) are amongst the lowest. There is a need for ongoing successful exploration in the short and medium terms to maintain gold as one of Australia's main export commodities. Similarly, new discoveries of large lead and zinc deposits are needed in the not too distant future to sustain production of these commodities at current levels, given that almost all existing base metal mines will have closed, and also that there is typically a period of about 10 years between initial discovery of a deposit and commencement of production for large base metal mines.

Mineral exploration: Mineral exploration expenditures in Australia rose by 7.4% to $786.7 million in 2003-04. Spending for calendar year 2004 rose strongly by 24% to $920.6 million with expenditure of $511.9 million in the second half of 2004 contrasting with $384.6 million in the equivalent period in 2003.

While gold remained the predominant target in calendar year 2004, its share of total spending fell below 50% to $414 million. The base metal group increased its share of total spending to 22.5% - $207.4 million, an increase of $72.7 million.

ABS, for the first time, reported statistics on spending on exploration for new deposits and for the further delineation and/or extension of known mineralisation that has resources delineated. Spending is classified as being for the search for new deposits until there has been a JORC compliant resource estimate of any classification prepared. Thereafter spending on exploring that mineralisation is classified as further delineation or extension of a deposit. Nationally 39% of exploration spending was directed at the search for new deposits. Tasmania had the highest proportion of exploration in this category of any jurisdiction with 54.7% of its spending whereas the Northern Territory had the lowest at 31.3%.

Both world and domestic mineral exploration levels grew strongly in 2004. Higher metal prices, particularly for the base metals, and sustained higher price levels for gold are conducive to greater exploration activity in 2005. Demand from China is expected to continue to influence trends in both prices and exploration, particularly for base metals, iron ore, coal and uranium.