Mining in New South Wales

David RobsonResources & Energy Division

NSW Department of Trade and Investment

How to choose a tenement site!

NSW Minerals Industry

� Coal

� Gas

� Metallic Minerals (Gold, silver, copper, lead, zinc)

� Industrial Minerals (Eg. Limestone, mineral sands)

� Construction materials

Mt Arthur Coal Mine – Hunter Valley

NSW Minerals Industry

� The total value of NSW mineral production in 2011/ 2012 was over $23 billion.

� NSW mineral and metal exports were valued at around $21 billion in 2011/2012.

� Coal is NSW single largest export in value terms, worth an estimated $16.8 billion in 2011/2012.

� The mining industry contributed $1464 million in royalties in 2011/2012.

� The NSW mining industry employs around 35,000 people directly and more than 85,800 people indirectly through the provision of both mine and non-mine related services.

Estimated Value of NSW Mineral Production

Coal

81%

Metallic Minerals

16%Construction

Materials

2%

Industrial

Minerals

1%

NSW – A Significant Mineral Producer

Cadia Valley Operations

•One of the largest gold operations in Australia

•Annual production to double with Cadia East

Total contained metal:

• Over 1000 tonnes gold

• Over 4 million tonnes copperCadia Hill Open Cut Mine - Photo courtesy of Newcrest Mining

Advantages to Investing in NSW

� Excellent infrastructure – rail, ports, power, roads, communications.

� Skilled workforce

� Large areas under-explored

� Government support for exploration

� World-best geoscience

� Sydney – major financial hub

Encouraging Exploration

� Pre-competitive initiatives -New Frontiers program

� Seeking exploration investment

� 84% aeromagnetic coverage of the state

Exploration Opportunities

Tritton Copper Mine, Cobar

� Large areas open to green fields exploration

� Non coal exploration licences – opportunities for joint venture / partnership

arrangements

� Exploration opportunities exist in the following mineral commodities:

� Copper

� Gold

� Zinc-lead

� Silver

� Tin-tungsten

� Nickel

� Iron

� Rutile-zircon-ilmenite

� Uranium

Current Titles in NSW

� Mineral titles current in NSW include 7 assessment leases, 923 exploration licences and 651mining leases.

� Coal titles current in NSW include 6 assessment leases, 186 exploration licences and 367 mining leases.

� Petroleum titles current in NSW include 1 petroleum assessment lease, 42 petroleum exploration licences, 1 offshore petroleum exploration permit and 6 petroleum production leases.

Tasmania

SydneyCurnamona Province• Zinc-lead• Iron-oxide• Copper-gold• Magnetite iron ore•Uranium

Murray Basin• World-class mineral sands province

Lachlan Orogen• World-class copper-gold• Zinc-lead• Lateritic nickel• Tin• Molybdenum• Tungsten• Channel iron•Uranium

Delamerian Orogen• Gold• Nickel• Copper

New England Orogen• Antimony• Gold• Tin• Molybdenum• Tungsten

Thomson Orogen•Copper• Gold• Zinc• Lead

NSW Mineral Provinces

Uranium exploration� The NSW Government passed the Mining Legislation Amendment (Uranium Exploration) Act

2012 on 4 April 2012.

� This Act removes the ban on uranium exploration.

� Exploration will enable an assessment to be made of the State’s uranium resources, as there is currently very little knowledge about the extent and distribution of these resources in NSW.

� A Mineral Allocation Area (MAA) has been placed over the State for Group 11 minerals (uranium and thorium).

� The Government called for Expressions of Interest (EOI) from interested parties wishing to explore for uranium. The EOI closed on 13 November 2012.

� NSW Trade & Investment has formed an evaluation panel to assess the EOIs made. This assessment process is advanced.

� Successful parties in the EOI will be invited by the Minister to apply for an Exploration Licence.

Iron ore exploration

� Exploration in Central and Far Western NSW

� Two types of iron ore deposits:� magnetite-bearing siltstones� Channel iron (lateritic)

deposits

� Potentially significant iron ore resources (billions of tonnes)

Aerial view of Cobar

Photo courtesy of Wikimedia

Iron ore exploration

� Carpentaria Exploration –Broken Hill district:

� High quality magnetite concentrate

� Close to rail and other infrastructure

� Channel iron deposits:

� Shallow open cut resources

Silver City Highway looking towards Broken Hill

Key New Mineral ProjectsPrecious Metals

Hera (Au)

Tomingley (Au)

Wonawinta (Ag)

Mineral Hill (Cu, Au)

Kempfield (Ag)

Dargues Reef (Au)

Cadia East (Au)

Bowdens (Ag)

Mt Boppy (Au)

Key New Mineral ProjectsBase Metals

Broken Hill Rasp(Pb, Zn)

Potosi(Zn, Pb, Ag)

Hawsons(Fe)

Syerston (Ni)

Copper Hill (Cu, Au)

Woodlawn (Cu, Pb, Zn)

Northparkes Step Change Project (Cu, Au)

North Mine Deeps (Pb, Zn, Ag)

Tottenham (Fe)

Key New Mineral ProjectsIndustrial Minerals

West Balranald(mineral sands)

Dubbo(zirconia & rare earths)

Campaspe(mineral sands)

Ginkgo Crayfish Ext

NSW COAL AND GAS INDUSTRY OUTLOOK

MAJOR WORLD COAL EXPORTERS 2010

Million tonnes

1. Australia (NSW 39%) 298

2. Indonesia 162

3. Russia 109

4. USA 74

5. South Africa 70

6. Columbia 68

Coalfields of New South Wales

2011-12

Saleable Coal Produced:Total: 167.2 Mt

Domestic Coal Sales:Total: 30.8 Mt

NSW Coal Exports:Total: 136.4 Mt

Thermal 113.1 MtCoking 23.3 Mt

Source: Coal Services Pty Limited

143 Mtpa

Coal Demand Predictions

In the period to 2030:

� Thermal and metallurgical coal demand growing

� Significant proportion from Asia

� NSW well placed to meet Asian demand

Kooragang Coal Loader - Newcastle

Potential Major Coal Project Developments in NSW

Bulli Seam Project

Watermark

Doyles Creek

Mt Pleasant

Drayton South

Maules Creek

Boggabri

Vickery

Vickery South

Caroona

Mt Penny

Spur Hill

FerndaleCobbora

Potential project value $13 billion

Additional coal 100 Mtpa +Inglenook

Rocky Hill

Wallarah No. 2

Major Expansions to Existing Coal Mines

� Abel Modification

� Angus Place Life of Mine Project

� Ashton SE Open Cut

� Bengalla Continuation Project *� Chain Valley Ext

� HVO – Carrington West Wing

� Mandalong South

� Mannering Ext.

� Moolarben Stage 2 *� Mt Arthur Open Cut Ext

� NRE No 1& NRE Wongawilli

� Ravensworth Operations Project

� Tasman West Borehole

Infrastructure Improvements

� Two terminals

� Capacity 160 Mtpa +

� Expansions underway with capacity to reach 200 Mtpa in 2014

� By 2020 capacity 300 Mtpa +

Coal loading at the Port of Newcastle

Port Kembla Coal Terminal

� Current Capacity 18 Mtpa

� Government seeking to expand capacity

� EOI for capacity upgrade announced November 2011

� Projected upgraded capacity 26.5 Mtpa

Port Kembla Coal Terminal

Rail Improvements

Capacity upgrades underway

Rail Improvements

Photo courtesy of Pacific National

$3.5 billion by 2021 to lift Hunter’s coal rail capacity

Coal Exploration Licences

Exploration Licences for new stand alone coal areas in NSW are

usually awarded through a competitive Expression of Interest

(EOI) or Tender process as per the Guidelines for the

Allocation of Future Coal Exploration Areas

The basis for the Government deciding to allocate a coal

Exploration Licence (EL) is determined on economic and

optimum resource utilisation grounds.

� Need for increased domestic supply

� Desire to increase coal exports

� Provide employment opportunities

� Generate substantial investment

Coal Exploration Licences

The competitive EOI or tender process would usually rely on

parameters such as:

�Work/exploration programs

� Timeframe for evaluation and future development

�Capacity to meet financial obligations

� Technical/environmental expertise

� Benefits to the local community and State

�Marketing and utilisation opportunities

Allocation of New Coal Areas in NSW

� The NSW Government may decide from time to time to

release further coal areas in the State for competitive EOI or

tender.

� Information on the Guidelines for the allocation of coal and

any future competitive EOI or tender for new coal areas is

available on the Trade & Investment website:

www.resources.nsw.gov.au

Gas rig platform – photo courtesy of Eastern Star Gas

� 500,000 km2 of sedimentary basins

� Coal seam gas (CSG) potential volume estimated at 16,000 billion cubic feet (BCF)

� CSG Probable Reserves estimated at 2,300 BCF

Gas & Petroleum in NSW

NarrabriCSG Project

CamdenCSG Project

� CSG explorers include Santos, AGL, Dart Energy and Metgasco

� AGL producing from Camden and Santosat Narrabri

� Large CSG volume potential enabling LNG export

Gas & Petroleum in NSW

Facilitating Project Development

� Revised planning approvals process

� Major projects classed as State Significant Development

� Streamlined assessment and approvals regime -ensuring environmental safeguards and community consultation

Springvale Coal Mine - Longwall Shearer

Grant of EL with environmental conditions and security bond�

Exploration, Environmental and Feasibility investigations begins �

Mineable resource defined and concept mine plans developed�

Presentation of Conceptual Project Development Plan to DRE - Mineral Resources �

On acceptance of mine concept, Department of Planning & Infrastructure (DP&I) notified (Gateway process may be triggered).�

Inter Agency Planning Focus Meeting (PFM) may be organised by DP&I�

Environmental Impact Statement (EIS) Requirements Issued(Director-General’s Requirements)

�

Preparation of EIS�

Public exhibition of EIS �

Assessment by DP&I of EIS and submissions made�

Minister for Planning and Infrastructure may appoint PAC (Planning Assessment Commission) to advise on certain key issues�

PAC (on delegate from Minister for Planning & Infrastructure) determines application�

Grant of Development Approval with conditions�

Minister for Resources and Energy grants a Mining Lease (ML) �

Preparation and submission of Mining Operations Plan (MOP) to DRE(Condition of ML)

�

Approvals and Licences obtained form other NSW Government agencies(Secured through the Part 4.1 process of the EP&A Act 1979)

�

Commencement of Mining Operations

POLICY CHANGES

THE NEW REALITY

� Communities are less prepared to accept compromise

� A move towards opposing any development (including increasingly exploration) anywhere

� A growing preparedness on the part of government and corporations to listen

� Government responds by increasing legislative and regulatory safeguards.

� Mining industries social licence to operate is being challenged.

Strategic Regional Land Use Policy

� In order to address concerns around land use conflicts in regional areas of the State, particularly between the coal mining and coal seam gas industries and agricultural industries, the NSW Government has introduced a range of new initiatives.

� NSW Government is currently implementing its Strategic Regional Land Use Policy.

� As part of this policy, the Government has committed to developing Strategic Regional Land Use Plans across the State to identify ways in which regional areas can manage growth, protect the environment and respond to competing land uses whilst preserving the key characteristics or values of these regions.

� These plans will give local communities, industries and other stakeholders more certainty about how regions will change over time.

� A key focus of the Strategic Regional Land Use Plan for each region is to resolve competition between the coal mining and coal seam gas industries and agriculture, biodiversity and other land uses.

Strategic Regional Land Use Policy

The Strategic Regional Land Use Policy achieves protection and balance through:� Identification of Strategic Agricultural Land so that proposed projects must go

through the new Gateway process, an independent, scientific and upfront assessment of the impacts of mining and CSG production proposals;

� A new Land and Water Commissioner to restore community confidence in the processes governing exploration activities in NSW and to oversee land access agreements between landholders and miners;

� An Aquifer Interference Policy that uses science to assess and protect water resources across the entire State;

� The requirement for an Agricultural Impact Statement as part of the assessment of exploration proposals;

� New Codes of Practice for the coal seam gas (CSG) industry, covering well drilling standards and hydraulic fracturing;

� Standard land access agreements to ensure fair outcomes for landowners;� Additional compliance resources to ensure the tough new standards are met� CSG producers to invest in local communities through Regional Community

Funds

• SEPP Mining Petroleum Production & Extractive Industries –requiring councils to consider impacts “in the vicinity of”

extractive operations and resources.

• Standard Local Environmental Plans (LEPs) for all Councils by 2011

• 300+ zones into 25 new zones

• Resource Audit commenced 2007 to provide data on mineral & extractive resources to councils to inform new LEPs.

• Data will meet requirements of S117 Direction 1.3 & Mining SEPP.

• Will update data for LGAs where S117 data previously provided as well as provide data for those LGAs not previously covered.

NSW Statewide Resource Audit

153 Local Councils

Department of Planning

Input to Regional Land Use Strategies

Local advice on Known resources

and potential resource areas

Assess LEP zoningMaps and provisionsfor resource issues

Port Stephens Marine Park

F3 to Raymond Terrace Upgrade

Stockton Dunes Regional Park, NP, NT Claim

Proposed Port Stephens to Watagans Reserve

Council rezoning of

Diemars Quarry

Proposed Kaolin Mine

Most Identified resource areas were threatened in 2006-7

Port Stephens Example

123 councils later

Commodity

Group

No of sites

Identified

Area (Ha) No. Potential

Areas

Area (Ha) % of total

No.

All 2,158 259,034 258 7,677,060 100%

Operating 1,718 133,791 80%

Construction

Materials

1,651

33,459

75

83,808

77%

Metallic

Minerals

211

62,842

107

2,350,869

10%

Industrial

Minerals

246

111,978

67

5,040,583

11%

Gemstones 50 50,756 9 313,778 2%

Identified Resource Areas

Number of Sites by Commodity Group

Gemstones

Industrial

Minerals

Metallic

Minerals

Construction

Materials

Identified Resource Areas

Area of Sites by Commodity Group

Construction

Materials

Metallic

Minerals

Industrial

Minerals

Gemstones

New rules for Coal Seam Gas

On Monday 18 February 2013 Cabinet agreed:

� to ban all coal seam gas activity within two kilometres of residential areas and within the cluster areas identified in the Government's strategic regional land use policy (wine industry and thoroughbred horse industry), but a 2km buffer zone would not apply to the clusters.

� That the state's chief scientist will review all coal seam gas activity in NSW and report on any risks by July 2013.

� That the Environment Protection Authority will be given responsibility for enforcing compliance.

� An Office of Coal Seam Gas has now been established within the Department of Trade and Investment to oversee regulatory and compliance functions.

New Fees to Improve Regulation and Fund Research for Resources Sector� From 1 July 2012, the NSW Government introduced two

new charges on the mining and petroleum industries which combined will raise more than $19.5 million per annum.

� One charge is an annual charge on mineral and petroleum title areas to fund the continuation of the highly successful New Frontiers exploration initiative.

� http://www.resources.nsw.gov.au/info/fees� The other charge is a new administration levy which will

apply to the mining and petroleum industries to expand Government enforcement functions, as well as assessment, approvals and communication capabilities. This levy has been used to fund additional staff and improvements to the regulation and administration of the industries, including:

New Fees to Improve Regulation

� The development of agreed processing times in consultation with industry that will be reported on regularly. It should be noted that some current systems enhancements will be required for this to occur but these enhancements (including a new workflow system) are in the process of being identified and implemented.

� A policy regarding exploration licences, assessment leases and mining leases has been drafted and issued to peak industry bodies for comment. It is anticipated that this policy will be implemented and published by the end of 2013.

� Many of the current processes and procedures will be reviewed to ensure they comply with the legislation.

� Identification and finalisation of legacy work.� A Compliance and Enforcement policy is in the process of being

implemented with staff undergoing training. � A policy in relation to available appeal mechanisms will also be

developed and implemented.

Thank you