DISCOVERY VICTORIA’S EARTH RESOURCES JOURNAL FEBRUARY 2003

INSIDE THIS ISSUE

• VIC GAS BOOM

• BREAM ON LINE

• HAZELWOOD PROJECT DISCOVERY VICTORIA’S EARTH RESOURCES JOURNAL FEBRUARY 2003 contents

VICTORIAN GAS BOOM 2 Victoria has become eastern Australia’s dominant gas supplier BASSGAS PROJECT UNDERWAY 4 The Yolla field will boost Victoria’s gas production IT’S A RECYCLING ‘DOUBLE’ 5 A new waste recycling plant adds to our ‘clean and green’ reputation MELBOURNE IS KEY RESEARCH CENTRE 8 ExxonMobil’s global search for new sources of energy starts here BREAM GAS FLOWS ASHORE 9 New pipeline adds to the security of supply for Victoria’s gas market THIS RIVER IS A MOVER 10 Morwell River undergoes yet another diversion - to make way for mine development MBT MOVES BEYOND WEMEN 17 A new mineral sands mine is being developed in the Murray Basin cover picture COAL BED METHANE PROJECT 19 Victoria’s vast brown coal deposits may help boost local gas supplies The pipelaying vessel Lorelay laid the 46 km of undersea gas pipeline connecting Esso/BHP ESSENTIAL SET FOR BIG YEAR 20 Billiton’s Bream A platform in Bass Strait to the The Otway Basin is set for a busy time, both onshore and offshore Victorian coastline (see our story on page 9). 3D LOOK AT VALLEY’S COAL RESOURCE 21 The ship is one of the world’s most advanced New VIMP data is available for brown coal miners pipeline-laying vessels and uses dynamic thrusters VIMP DATA RELEASE IS BEST YET 22 (as opposed to anchors) to hold position. The 13-metre long sections of the pipeline were welded The latest package of VIMP data will be released in May together on board and ultrasonically inspected for LATROBE MAGNESIUM WINS GRANT 23 weld integrity before being laid on the seabed. Plans for a new magnesium plant in the Latrobe Valley get a boost The joints are also coated with a wrap around NEWCREST DRILLS THE BASIN 25 mastic heat-shrink sleeve for corrosion protection, and the joint gap filled with high-density foam. The search is on for new copper and gold deposits R&D BOOST FOR MINING INDUSTRIES 26 The focus is on Greenhouse gas, waste and emissions, and new mining equipment COSTERFIELD TARGETS FOUR MORE AREAS 28 The Costerfield deposits continue to produce encouraging results LAKES TO DRILL TWO GIPPSLAND WELLS 28 The exploration junior embarks on new wells in the Gippsland Basin DISCLAIMER: This publication may be of assistance to you, but the State of Victoria and its officers do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particu- regular features lar purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any infor- mation in this publication. VIEWPOINT 7 Energy and Minerals Victoria acknowledges contributions made by Minister Theo Theophanous gives his views private enterprise. Acceptance of these contributions, however, does not endorse or imply endorsement by the Department of Natural NEWS BRIEFS 12 Resources and Environment of any product or service offered by the A roundup of Victorian industry news contributors. VICTORIA’S RESOURCES 14 All photographs, maps, charts, tables and written information in this publication are copyright under the Copyright Act and may not be Victoria’s mineral, oil and gas resources reproduced by any process whatsoever without the written permis- MINERAL LICENCE REVIEW 16 sion of the Department of Natural Resources and Environment. Who’s doing what with mineral exploration licences © Minerals and Petroleum Victoria 2003.

Published quarterly on behalf of the Minerals and Petroleum Division, Department of Primary Industries. Editorial and advertising enquiries to Rex Banks, RBA Communications, 86 Cooloongatta Rd, Camberwell Vic 3124 Tel: (03) 9889 1094 Fax: (03) 9889 9997 EMail: [email protected] Editorial: Rex Banks. Distribution and NRE enquires to Chandri Nambiar, Manager Marketing Development, Minerals and Petroleum Division, Department of Primary Industries, Level 7, 240 Victoria Parade, East Melbourne, Vic, 3002, Tel: (03) 9412 5061 Fax: (03) 9412 5155. Website: Australia Post Print Publication PP349472/00128. ISSN Number 13282409.

1 VICTORIAN GAS BOOM

ass Strait’s role as south-east point where it now has a major role in supply- Since the discovery of the first hydrocarbons Australia’s major supplier of natural ing the entire eastern seaboard of Australia. under the rough waters of Bass Strait in the gas for the next 15 years has been That has only been able to occur through the 1960’s, Esso/BHP Billiton have never active- B cemented through a $A4.5 billion, deregulation of the gas industry and the develop- ly searched for natural gas, despite discover- three-way deal with Australia’s biggest ment of major new gas pipelines to new markets. ing vast resources of the fuel as a consequence domestic gas supplier, AGL Ltd. of searching for the rich oil fields in the As a consequence, the Bass Strait producers region. Combined with the development of new, high- have sought to bolster known gas reserves in pressure gas pipelines to New South Wales, the fields. But after 30 years of production, about half of South Australia and Tasmania and substantial those early gas discoveries have been con- Late last year, Esso/BHP Billiton completed new statewide infrastructure, Victoria has sumed, although a massive gas reserve of the largest ever three-dimensional seismic sur- become eastern Australia’s dominant gas sup- around 10 trillion cubic feet remains. vey in Bass Strait, a survey where one of the plier. main objectives was to locate potentially Those reserves, plus the additional reserves AGL Ltd, which now supplies more than 30 major new gas reserves. Esso/BHP Billiton expects to find through an per cent of Australia’s domestic gas market aggressive exploration program over the next has secured new, long-term natural gas few years, has given Bass Strait a strong place requirements through a portfolio of supply in the eastern Australian gas market. and transportation arrangements for the New This role has been accentuated by the fact that South Wales, Victorian, South Australian, the gross remaining reserves in the Cooper Queensland and ACT markets, announced late Basin fields in South Australia are becoming last year. progressively more expensive to extract. The new gas supply and transportation con- Esso/BHP Billiton recently completed the tracts, worth a combined $4.5 billion, cover construction of a new gas pipeline from the the supply of up to 1,408 petajoules of gas Bream field in Bass Strait to deliver gas direct over 15 years, through commercial arrange- to the Longford gas plant in Gippsland. ments with Esso/BHP Billiton, the Santos-led The $200 million project dramatically increas- Cooper Basin producers and Origin Energy. es Victoria's capability to produce new gas The contracts confirm the development of supplies. Bass Strait from its role as the sole supplier of In association with the development of the gas natural gas into the Victorian market, to the reserves in the Bream field, the project now has the capacity to produce up to 200 tera- The rebuilt Longford gas processing plant in Gippsland and new offshore gas production facilities joules of gas a day for the growing south-east- have helped ensure that the ExxonMobil- operated ern Australia market, equivalent to an extra 35 Bass Strait fields have become a major supplier of per cent of Victoria's average daily require- gas to the entire southeast Australian gas market. ments.

2 GAS NEWS

AGL’s new Bass Strait gas contracts, which A major offshore three-dimensional seismic come into play progressively over the next survey (left), the largest ever conducted in the few years in different markets, significantly Gippsland Basin, and rapid development of the onshore gas pipeline system (below), has enhance the role of Bass Strait gas and other created the perfect conditions to allow the Bass gas reserves in Victoria, which will gradual- Strait gas fields to penetrate new markets. ly assume far greater national importance as the gas supply from the Cooper Basin declines. As a result of the new contracts, AGL has now withdrawn from an earlier, conditional, agree- Both Bass Strait and the Surat/Bowen Basins ment to buy gas from the proposed Papua in Queensland will take on greater supply New Guinea-to-Queensland gas pipeline. roles in the South Australian, NSW and ACT markets. AGL was Australia’s first energy distribution and marketing company to include natural gas, But the offshore fields in the Otway Basin in LPG and electricity in its energy portfolio. Victoria’s west will also assume a greater role on bolstering Victoria’s place as a national gas In partnership with some of the world's supply hub. biggest energy companies, the company has acquired assets, which have strengthened its BHP Billiton is already developing the position as an energy market leader, and has Minerva field off the Victorian coast near Port also expanded into the telecommunications Campbell. industry. Minerva gas will be piped direct into the THE OFFSHORE FIELDS IN THE OTWAY It is one of the new vertically integrated Victorian gas pipeline grid and will ultimately Australian companies involved in virtually all make its way principally into the South BASIN IN VICTORIA’S WEST WILL ALSO aspects of the energy sector, including natural Australian market. ASSUME A GREATER ROLE ON gas, electricity and LPG. The nearby Geographe and Thylacine gas dis- AGL shares have been listed on the Sydney coveries will also be developed for markets in BOLSTERING VICTORIA’S PLACE AS Stock Exchange since it opened in 1871 and South Australia where sales contracts have A NATIONAL GAS SUPPLY HUB. he company has grown into an international already been signed. entity with a stock market capitalisation of In Bass Strait, the Yolla and Patricia/Baleen around $3.5 billion with businesses through- gas fields are also under development. the Santos-led Cooper Basin producers and an out Australia, New Zealand and Chile. The gas from Patricia/Baleen is to be piped additional 340 petajoules from Origin It’s a giant leap for a company whose initial direct into the Eastern Gas pipeline where it Energy’s interests in Queensland's Surat/ role was to light the streets of Sydney. will be transported into the Sydney market. Bowen Basins. Yolla gas has already been sold into the South To deliver the gas from its source, AGL will FOR MORE INFORMATION CONTACT: Australian market to supplement Origin utilise the Moomba-to-Sydney gas pipeline, Energy’s requirements for power generation the Moomba-to-Adelaide pipeline, the GasNet Jane Counsel and retail distribution. distribution system in Victoria and the Eastern AGL Ltd Media Relations Manager In Victoria, AGL is now the largest retail and Gas pipeline which runs from Longford in Tel: (02) 9922 8352 industrial gas supplier as a result of the dra- Gippsland into the Sydney market. matic changes in the national energy market in recent years. It is also a major electricity sup- plier. AGL managing director Greg Martin said the new gas supply arrangements would underpin the company's ability to provide customers with secure and competitively priced energy. "These new arrangements represent some of the most significant transactions of this nature in Australia and are fundamental to AGL securing competitively priced gas supplies for its customers well into the next decade,'' Mr Martin said. The new arrangements will supplement and ultimately replace AGL's existing arrange- ments with the Santos-led Cooper Basin pro- ducers, due to expire in 2006, and those with the Gippsland Basin producers where the gas contracts will expire around the end of the decade. AGL has contracted to take up to 563 peta- joules of gas from the Esso/BHP-Billiton Gippsland Basin producers. In addition, AGL will buy 505 petajoules from

3 GAS NEWS BassGas project underway

onstruction of the $A370 million plant will take place over an eighteen-month BassGas project has begun, marking period with the plant expected to be opera- the beginning of the first new tional in the third quarter of 2004. C petroleum discovery outside Victoria’s Construction of the 32 kilometres of onshore traditional Bass Strait field area. pipeline will start in the third quarter of this The project will add almost 10 per cent to year while work on the 147km sub-sea Victoria’s annual gas production by the time is pipeline to the offshore fields will start in the starts production in the third quarter of 2004. first quarter of 2004. Installation of the off- The final piece of the complex environmen- shore production platform will begin in the tal impact assessment fell into place in first quarter of 2004 and the project is expect- December for the members of the T/RL1 ed to come on line in the third quarter of 2004. joint venture when the Federal Government The project will create 350 jobs during con- approved the project, enabling construction struction and 30 permanent ongoing jobs at to start. the Lang Lang onshore gas processing plant. The BassGas project received approval from Origin Energy executive general manager for the Victorian Minister for Planning in oil and gas production, John Piper, said the September 2002. approval of the federal Government late last The project, which lies in Bass Strait about year: “endorses the commitment Origin half way between Victoria and Tasmania, will Energy and its joint venture partners have produce natural gas and petroleum liquids invested in the environmental approval from the Yolla and White Ibis fields, pipe process that started in August 2001. them under Bass Strait and process the prod- Australia since the Gippsland gas fields were “The BassGas project is now positioned to deliv- ucts in a new plant to be built near Lang Lang, developed more than 30-years ago. er on our promise to improve the security of gas south-east of Melbourne. supply in Victoria and south-eastern Australia It will commercialise gas from the Yolla field and to increase competition in the market.” Origin Energy, the operator for the BassGas and supply a volume equivalent to 10 per cent project, received an Environment Protection of the Victorian natural gas market for 15 years. AWE managing director Bruce Phillips said Agency (EPA) works approval in late the progress of the construction BassGas pro- The gas from the Yolla field will come December 2002, allowing work to start on the ject depended, “on the BassGas proponents’ onshore at Kilcunda, 15 km north west of processing plant on January 6. good relationships with all stakeholders, Wonthaggi at a rate of up to 67 terajoules of including the local communities and the The approval was granted after a lengthy gas a day, together with substantial volumes of Victorian, Tasmanian and Federal government process requiring Origin Energy to demonstrate condensate and LPG. that the design of the processing plant complied authorities. Most of the early gas production will be deliv- with the air quality, surface water and noise lev- “The BassGas project is important in ensuring ered into the South Australian market where els specified in the Environment Act. competitively priced energy for homes and Origin Energy has agreed to purchase 95 per businesses in southeast Australia and we are Origin Energy general cent of the 20 petajoules of gas produced each determined to deliver the project for the mutu- manager BassGas, year for its retail business. Geoff Wearne, said: al benefit of those communities and our share- “The BassGas project The Yolla gas field is located 147 km south of holders,” he said. the Victorian coast in Bass Strait and contains now continues on Elliot Yearsley, CalEnergy’s general manager, up to 256 petajoules of sales gas Ð equal to more schedule and the pro- added that the Yolla project would provide a than one year of Victoria’s total gas demand. cessing facility will be competitive source of energy to the people of operational by third Partners in the project are Origin Energy businesses of Victoria and also represented a Geoff Wearne quarter 2004. (37.5% ownership) and its joint venture part- milestone foe CalEnergy in Australia. ners, AWE (30%), CalEnergy (20%) and “Over the coming The director of Wandoo Petroleum, Noboru Wandoo Petroleum Pty (12.5%). weeks and months we will continue to consult Tsuruta, said BassGas would deliver an regularly with the South Gippsland communi- The field, which includes the adjacent White important new gas supply to the southeastern ty about our activities and the construction Ibis field, also contains one million tonnes of Australia market. schedule.” Liquid Petroleum Gas (LPG), and 14 million barrels of condensate (light oil). Origin Energy estimates that demand for nat- FOR MORE INFORMATION CONTACT: ural gas in Victoria will double over the next Construction of the Bass Gas project will twenty years and says that new infrastructure begin with the building of a 75 million stan- Tony Wood is required to meet this growing market. dard cubic feet a day gas processing plant near Public & Govt Affairs, Origin Energy The BassGas project will bring additional Lang Lang starting in the first quarter of 2003. Tel: (03) 9652 5506 Mobile: 0419 642 098 alternate gas supply into south-eastern Construction and final commissioning of the

4 ENVIRONMENT It’s a recycling ‘double’

Waste material from the metal casting operations at the Point Henry aluminium smelter will be recycled to produce valuable new products, saving 7900 tonnes of material previously sent to landfill.

1963 and has a rated capacity of 185,000 tonnes of aluminium a year. Construction of the plant started in December 1961 and two years later the first potline began production, reaching 40,000 tonnes of aluminium output a year by 1964. In the 1960s, extrusion operations, sheet rolling, the construction of a second potline (bringing plant capacity to 90,000 tonnes), opening of an alumina unloading pier, and construction of the dedicated 150 megawatt power station at Anglesea, were also initiated in a period of extraordinary activity for the company. Further expansions of smelting, casting, sheet and foil capacity took place in the 1970s and by 1980 a third potline lifted plant capacity to 170,000 tonnes. In the following decade, major structural changes occurred in the aluminium industry, with intense international competition from ictoria’s Point Henry aluminium “These projects demonstrate how a focus on new, low-cost producers. smelter at Geelong has opened a major innovation and sustainability will help ensure Point Henry responded with a significant new aluminium waste recycling a strong and environmentally-responsible rationalisation of product, selling out of the V project to enhance Victoria’s manufacturing sector in Victoria.” extrusion business and concentrating the reputation as a ‘clean and green’ The Point Henry smelter is owned by Alcoa semi-fabricating operation solely on rolling manufacturing state. World Alumina Australia while the associated sheet for aluminium beverage cans. The plant will convert residue, scrapings and rolling mill is owned by Alcoa Kaal Australia, Today, the smelter's rated capacity has risen to trimmings from aluminium casting into recy- a joint venture between Alcoa and Kobe Steel 185,000 tonnes of aluminium using alumina cled aluminium and raw materials to be used of Japan. shipped from the refineries in Western in cement and ceramics manufacture. Australia. The new plant will turn 13,400 tonnes of The Portland smelter in western Victoria is waste produced each year into more useable PROGRESSIVE IMPROVEMENTS IN one of the lower-cost smelters in the world, industrial products and eliminate 7,900 tonnes owing to economies of scale, the use of of waste that was previously sent to landfill. SMELTING EFFICIENCY SINCE THE 1940S Alcoa’s latest smelting technology and highly The facility completed its first production run HAVE SEEN WESTERN- WORLD SMELTERS efficient electricity usage. in November 2002, achieving full production Progressive improvements in smelting effi- in January, and is now being used as the pilot REDUCE AVERAGE ELECTRICITY ciency since the 1940s have seen western- plant for similar projects to be installed in CONSUMPTION FROM 23 KILOWATT world smelters reduce average electricity Alcoa-operated aluminium smelters globally. consumption from 23 kilowatt hours per kilo- HOURS PER KILOGRAM OF ALUMINIUM Victoria’s Minister for Manufacturing, Tim gram of aluminium to around 16kWh/kg Holding, opened the new Hot Dross Recycling TO AROUND 16KWH/KG TODAY. today. Plant at Point Henry during December. At Portland, modern technology and efficient “It follows Alcoa's Portland spent pot lining work practices have enabled the company to process Ð which turns hazardous waste into Alcoa also operate Victoria’s second alumini- reduce this further to about 14kWh/kg. safe building materials Ð as another great um smelter at Portland in western Victoria in Virtually all of the metal produced at Portland example of how innovation can drive business which the company has a 55% interest. is exported, primarily to Japan and other sustainability,” Mr Holding said. The Point Henry smelter began operations in Asian customers.

5 DEPARTMENT OF PRIMARY INDUSTRIES MINERALS AND PETROLEUM DIVISION CONTACT LIST: MINERALS AND PETROLEUM BUSINESS CENTRE: Level 8, 240 Victoria Parade, East Melbourne Vic 3002 Australia Tel: +613 9412 5020 Fax: +613 9412 5150

Richard Aldous Bob Harms Executive Director Energy and Minerals Manager Petroleum Information Telephone: (03) 9412 4508 Telephone: (03) 9412 5053 Fax: (03) 9412 4183 Geoff Collins Manager Petroleum Projects MINERALS AND PETROLEUM Telephone: (03) 9412 5095 BUSINESS CENTRE: Fax: (03) 9412 5157 MINERALS AND PETROLEUM Kim Ricketts REGULATION: Client Services Officer Fax: (03) 9412 5152 Telephone: (03) 9412 5103 Rob King Manager Minerals and GEOLOGICAL SURVEY VICTORIA: Petroleum Regulation Fax: (03) 9412 5155 Telephone: (03) 9412 5069 Phil Roberts George Buckland Manager Geological Survey Victoria Manager Minerals and Telephone: (03) 9412 5035 Petroleum Tenements Alan Willocks Telephone: (03) 9412 4778 Manager - Geophysics Graeme McLaughlan Telephone: (03) 9412 5131 Manager Northern Region Operations Chief Mining Inspector The Alcoa operated Portland smelter has also dramatically reduced its Peter O’Shea Telephone: (03) 5444 6689 waste generation through a $A26 million spent potlining recycling program Manager Geological Mapping which converts solid wastes into inert solids used in road building and Telephone: (03) 9412 5093 John Mitas recaptures valuable materials to be reused in the smelting process. Manager Southern Region Operations Roger Buckley Telephone: (03) 9412 5083 The creation of parklands around the plant site has earned Portland the title Manager Mineral Resources of the ‘Smelter in the Park’ and the first certification as a viable habitat Doug Sceney Telephone: (03) 9412 5025 ever granted by the Wildlife Habitat Enhancement Council outside the US. Environmental Manager Alcoa is the world’s leading producer of primary aluminium, fabricated Graham Gooding Telephone: (03) 9412 5107 Regional Manager Ballarat aluminium and alumina. Telephone: (03) 53 336 521 Horacio Haag Its aluminium products and components are used worldwide in aircraft, Manager Petroleum Operations automobiles, beverage cans, buildings, chemicals, sports and recreation, Guy Hamilton Safety and Environment and a wide variety of industrial and consumer applications, including Regional Manager Bendigo Telephone: (03) 9412 5101 Alcoa’s own consumer brands. Telephone: (03) 5444 6697 MINERALS AND PETROLEUM POLICY: THE CREATION OF PARKLANDS AROUND THE PLANT SITE HAS PETROLEUM DEVELOPMENT: John Lambert Fax: (03) 9412 5156 EARNED PORTLAND THE TITLE OF THE ‘SMELTER IN THE PARK’ AND Manager Minerals and Kathy Hill Petroleum Policy THE FIRST CERTIFICATION AS A VIABLE HABITAT EVER GRANTED BY Manager Petroleum Development Telephone: (03) 9412 5068 THE WILDLIFE HABITAT ENHANCEMENT COUNCIL OUTSIDE THE US. Telephone: (03) 9412 4208 INFORMATION: Kourosh Mehin Janne Bonnett - Manager Minerals Kaal Australia is Australia’s only manufacturer of aluminium rolled Manager Petroleum Resources and Petroleum Reference Centre products and produces rigid container sheet for beverage cans, alumini- Telephone: (03) 9412 5074 Telephone: (03) 9412 5022 um foil and common alloy sheet for building and marine applications. Mike Woollands Fax: (03) 9412 5157 Over half of its production is exported, mainly to growing markets in Manager Basin Studies Asia. Chandri Nambiar Telephone: (03) 9412 5135 Manager Marketing Development FOR MORE INFORMATION CONTACT: Maher Megallaa Telephone: (03) 9412 5061 Manager Acreage Release Fax: (03) 9412 5155 Linda Craven, Point Henry Works PO Box 460 Geelong Victoria 3220 Telephone: (03) 9412 5081 Telephone: (03) 5245 1440 email: [email protected] Alcoa Website: http://www.alcoa.com

6 REGULAR FEATURE Support policy produces results

he Bracks Government is ensuring the The Bracks Government is committing $70 future security of Victoria’s energy million, over the next four years, to assist with supply through several initiatives. Of reticulating gas to towns in rural and regional T particular relevance to our readership Victoria. is the provision of support to uncover Additional gas transmission infrastructure in a potential new sources of natural gas region can improve the opportunities for retic- reserves in the region. ulation significantly. This policy is bearing fruit, with pivotal off- The successful model used by the shore discoveries made in 2001 in the Otway Government to bring gas to the Bellarine Basin, west of Melbourne. Peninsula can be built on for natural gas It is rewarding to see higher levels of activity extension programs in other regions, includ- in these sectors, particularly in the petroleum ing Gippsland. exploration and development areas. Extension of our natural gas network will cre- The last two years have been truly outstanding ate an attractive alternative fuel source for for Victorian petroleum exploration and the domestic and small business users, and may pace is set to continue at a high level. also create new opportunities in Victoria’s In the wake of the 2001 successes, seismic food processing, manufacturing and exploration continued to be active over the resources-based industries in non-metropoli- 2002 period, with major companies including tan areas. Esso/BHP Billiton, Santos, Woodside and Supporting the supply of reliable low-cost gas Origin acquiring data in both the Otway and will assist our work in attracting investment in Gippsland basins. In the last fiscal year, approximately $190 million was spent on exploration in the Victorian region, with a further $95 million Extension of our natural gas network will spent by 31 December 2002. In this issue, you will read of petroleum explo- create an attractive alternative fuel source ration in the Otway Basin undertaken by a rel- atively new player, Essential Petroleum. for domestic and small business users. Essential joins junior explorer, Lakes Oil, in looking for potential new prospects, primarily in the onshore Gippsland Basin. the dependence on fuels that generate high Victoria’s natural gas industry. The Bracks amounts of greenhouse gases. Government will continue to provide a sup- Essential Petroleum has already reported It is widely recognised that the petroleum portive investment environment for our oil some success in their onshore well, Port Fairy- industry is already at the forefront of new and gas industries. 1, which produced natural gas upon testing. technology. Victoria’s early oil and gas production came On the development front, construction of Almost all the recent discoveries were made from the Gippsland Basin but, in recent years, both the Minerva and BassGas projects is as a consequence of new 3D seismic data. the exploration focus has shifted to the Otway underway and the Patricia Baleen plant is Further exploration, using new environmen- Basin where new additional gas supplies are nearing completion. tally benign technologies and methods, needs being discovered. These projects will provide an alternative gas to be encouraged. Nevertheless, the interest in the Gippsland supply to the Longford facility and increase The Bracks Government continues to ensure Basin, particularly using modern 3D seismic supply security by providing alternative pro- that our mineral and petroleum resources are data, is continuing. cessing capacity. managed sustainably in a way that delivers Working together, Government, industry, local The potential for gas development investment benefits to all Victorians. government and communities can help ensure over the next four to five years is around $2 While petroleum exploration in Victoria is billion. sustainable development of Victoria’s oil and now at its highest level for more than a gas resources into the future for the benefit of The high level of exploration and develop- decade, it is undertaken within the context of all Victorians. ment activities augers well for Victoria’s gas the Bracks Government’s balanced approach industry. towards economic, social and environmental Such investment and effort will result in new goals. Hon Theo Theophanous discoveries and provide significant additional Many regional and rural communities do not Minister for Energy Industries gas, strengthen security of supply and reduce have access to the natural gas network. and Resources.

7 TECHNOLOGY Melbourne is key research centre

elbourne has become a key centre in ExxonMobil’s global search for new sources of energy. The giant multi- M national oil/gas producer has just completed the installation of a state-of-the- art visualisation centre in its Southbank headquarters in Melbourne and is moving one of ExxonMobil’s global exploration centre’s to Melbourne as well. The installation of the visualisation centre has combined with the establishment of the new south-east Asian/Australasian geoscience group to make Melbourne a key centre in ExxonMobil’s global search for new sources of energy. Bass Strait’s vast, but declining, petroleum reserves remain one of ExxonMobil’s most important global assets, a resource worthy of a major effort by the mega-major petroleum group to maximise the returns from the region. The new, 15 member geoscience group is while manipulating the images on screen. A state-of-the-art visualisaton centre at the responsible for identifying and evaluating new “By utilising the Internet and ‘virtual meeting’ Melbourne headquarters of oil and gas giant, exploration opportunities for ExxonMobil in the ExxonMobil, has placed Melbourne at the forefront programs, the group can even be extended to of the global search for new petroleum resources. south-east Asia/Australia/PNG region. It con- involve participants from overseas. solidates smaller teams which were previously “In the past, a group discussion would involve That information is being looked at by the located in Melbourne, Jakarta and Malaysia. putting together a PowerPoint presentation to new geoscience group established in Extracting energy from several kilometres be displayed in a meeting room. This limited Melbourne. beneath the earth’s crust requires collaborative the data being looked at to pre-determined sta- “We have assembled an outstanding team of efforts from a large number of people across a tic displays. experienced geoscientists who bring a mix of variety of scientific disciplines. “Because we can now work with the live, on- specialised expertise and extensive local It involves multi-disciplinary teams of spe- line datasets, the discussions can be far more knowledge to our quest for prospective new cialists working through vast amounts of his- interactive and allow participants to respond exploration acreage in this part of the world,” torical, technical and interpretive scientific in real time to ‘what-if’ questioning,” Dr Schwebel said. data in order to make decisions ultimately The quality of the projection system in Esso’s “Once we have completed our evaluation of a involving millions of dollars. new visualisation centre allows the images to project, we hand it over to the various in- The new visualisation centre allows Esso’s be displayed in daylight and, coupled with country geoscience teams for progression. geoscientists to display images directly on to a special headsets, in three dimensions for “We are delighted that our global organisation 2.4 metre by 4.8 metre screen through two selected 3D-enabled applications. has chosen Melbourne as the base for this high-resolution, high-brightness, digital light- The 3D effects are similar to the 3D images at group. processed (DLP) projectors. Imax theatres. The reservoir formation image “We have a wealth of talent here which, com- Processing data from both, or either, of Esso’s comes right out of the screen and can be bined with our state-of-the-art technology, massive Unix and PC dual screen desktops, manipulated in any number of ways. makes us an exceptional choice. images can be projected to allow scientists to “Anything we can do on our desktops can be “We are looking forward to widening our own ‘walk through’ underground formations and done on this screen, plus we have the added knowledge of the geology of our region and rock strata in their search for more hydrocar- advantage of the 3D visualization,” Dr participating in some exciting exploration bons. Schwebel said. activities.” Alternatively, the system can take feed from a The visualisation centre has also proved to be visitor’s laptop. an excellent training tool and has been used to FOR MORE INFORMATION CONTACT: “This greatly assists the collaborative process run training sessions from Esso’s parent com- of interpreting seismic data,” Dr Doug pany in Houston. Anna Schulze Schwebel, Exploration Director of Esso Esso is currently analysing the vast amounts of Manager, Media Relations Australia, said 3D seismic data collected in 2002 by it’s $55 Esso Australia / Mobil Oil Australia “It means a large group of geoscientists can sit million northern fields survey, the largest 3D Tel: 03 9270 3182 Mobile: 0408 532 589 together to discuss sub-surface formations seismic survey ever undertaken in Bass Strait.

8 GAS NEWS Bream gas flows ashore

atural gas is flowing from Esso/BHP Rapid growth in national natural gas demand and Billiton’s $A200 million Bream field the deregulation of the gas industry has sparked a gas pipeline in Bass Strait, providing a flurry of new developments. The $A200 million Bream gas field project in Bass Strait, including a major new link in the improved N new pipeline to bring the gas ashore, has security of supply for Victoria’s gas market. dramatically improved the capacity and security of Commissioned in December, the Bream gas the southeast Australian gas supply network. pipeline links the existing Bream A offshore platform with the gas processing facilities at Longford, in East Gippsland. The pipeline has been constructed by joint venture partners Esso Australia and BHP Billiton and is now the fourth independent gas pipeline in Bass Strait. The Bream field was the largest, undeveloped gas resource in Victoria. Since its development in 1988, the field has produced only crude oil, lacking the infra- structure to allow gas production. Bream pipeline construction and we look for- ward to continuing to increase the lifespan, “The construction of the 51-kilometre pipeline capacity, and capability of the Gippsland gas (5km onshore and 46km offshore) has been an production facilities,” Mr Olsen said. outstanding success in terms of safety and Planning work on the Bream project began in environmental management and heralds an April 2001 and pipeline construction com- “Sales are growing strongly and Gippsland important phase in the continuing develop- menced in December 2001. gas from Bass Strait now supplies Victoria, ment of Bass Strait gas,” Robert Olsen, chair- It involved over 450,000 work-hours and NSW, Tasmania and, from 2004, will flow to man of Esso Australia, said. achieved a safety record of no lost-time South Australia,” he added. The 14-inch diameter pipeline can carry more injuries. “With the opening of this new pipeline and the than 200 million standard cubic feet of gas a On average, nearly 200 people (employees commencement of production from the Bream day or 299 terajoules, equivalent to 35 per cent and contractors) worked on the project, with field, we have made the largest addition to the of Victoria’s daily average market demand. significantly more during the peak construc- Victorian gas production system since 1981.” Modifications, including piping, instrumenta- tion period last year. The new pipeline starts at the Bream A platform tion and structural work, were required at the “Esso would like to sincerely thank and con- and travels undersea for 46 km before reaching Bream A offshore production platform to gratulate all of the employees and contractors the coast at Paradise Beach and connecting into allow extraction of gas from the field. who have been involved in the successful an existing onshore gas pipeline to Longford. Victorian Minister for Energy Industries and Resources, Theo Theophanous said the Bream A project strengthened the state’s security of supply and reduced dependence on less-envi- ronmentally-friendly fuels. Esso/BHP Billiton’s proven gas reserves in Bass Strait today are roughly equal to the vol- ume of gas produced over the last 30 years since the fields were originally discovered. Esso Australia has just completed the largest 3D seismic program ever undertaken in Bass Strait to seek future development opportunities.

FOR MORE INFORMATION CONTACT:

Anna Schulze Manager, Media Relations Esso Australia / Mobil Oil Australia Tel: 03 9270 3182 Mobile: 0408 532 589

9 BROWN COAL THIS RIVER IS A MOVER

he Morwell River, in Victoria’s Hazelwood Power’s Southeast field brown coal Latrobe Valley, must be one of mine is about to be replaced through the Australia’s most mobile rivers development of a new field at Hazelwood West. The new field will be in production by October. T because it’s on the move again. Winding its way through the vast brown coal fields of Gippsland, the river is about to to overburden strip ratio of 3.8:1 compared undergo its fifth diversion as part of the $110 with a higher ratio of 4.5:1 at the West Field million project to develop the new mine, while the West Field coal seam extends Hazelwood West brown coal mine. down to 130 metres, compared with a thick- Hazelwood Power, which operates the exist- ness of only 90 metres at the Southeast Field ing Southeast Field mine and the adjoining mine. 1600 megawatt Hazelwood power station, But the new Hazelwood West Field offers has to open the new mine to replace the exist- straight mine faces up to 500 metres longer ing Southeast Field mine, which will reach and would extend the life of the mine by its operating limits later this year. another 30 years. The project involves relocating a seven-kilo- The development of the new field is expect- metre stretch of the Morwell River. ed to continue for the next decade, but West Nearby, Yallourn Energy is also diverting a field will reach full operational effectiveness five-kilometre stretch of the river as part of by 2006. its $500 million Maryvale mine develop- All earthworks and stripping of the new West ment. Field is being done under contract by the Hazelwood Power is owned by a consortium Roche, Thiess, Linfox consortium operating comprising International Power Plc, a fleet of 40 trucks around the clock. Commonwealth Financial Services Worley Minerals & Metals has been awarded (Australia) and the Commonwealth Bank of the engineering and design component for Australia. HAZELWOOD POWER HAS RECENTLY the new mine and the project, which also International Power Plc was demerged from involves the relocation and redesign of the one of Britain’s leading electricity generators, LODGED THE DETAILS OF THE RIVER materials handling system, is expected to take five years to complete. National Power, in October 2000, and has a RELOCATION WITH ENVIRONMENT 91.9 percent share in Hazelwood Power. Environmental planning and permitting for AUSTRALIA AS A PRECURSOR TO The Commonwealth Bank Group has an the project is being handled by Melbourne eight per cent share in the partnership. CONDUCTING A FULL ENVIRONMENTAL firm, NSR Environmental Consultants. The existing South-East Field mine has a sur- Hazelwood Power is currently extracting EFFECTS STUDY INTO THE PROPOSAL. coal from the last remaining face at the face area of three square kilometres, which is Hazelwood Southeast Field mine and moving constantly hosed down in order to settle slowly back towards the power station. potentially explosive coal dust and inhibit These will require approvals for extensions oxidation which can cause spontaneous com- The company expects the present mine to to the mining permit boundaries and the bustion of the coal. reach its limit in October, by which time min- physical relocation of barriers such as the ing will have started in the new West Field. The water is pumped from reservoirs of arte- Morwell River and Eelhole Creek, the sian water below the surface. Five dredges Development of Hazelwood West Field will Strzelecki Highway and Brodribb Road, operate at the coalface, extracting 19 million be in two stages. which runs along the boundary. tonnes of brown coal each year. The first involves the physical relocation of Hazelwood Power has recently lodged the The coal is then carried along conveyor belts the coal mining operations from the existing details of the river relocation with to the power station, which is Victoria’s sec- mine. Environment Australia as a precursor to con- ond largest power generator. ducting a full environmental effects study The dredges at the existing mine will walk The power station itself requires massive into the proposal. progressively from the Southeast field to the volumes of water. It uses 160 million litres of new West Field, starting in October. Operating costs at the new West Field mine cooling water supplied from an artificial Mining at Hazelwood West will then take are likely to be slightly higher than at the pre- lake, which is also used for boating and water over from the Southeast Field and is planned sent mine. sports. to continue for at least 30 years. Overburden thickness is slightly higher, During the past few years, Hazelwood Power The second phase of the planned field develop- although the coal seam is much thicker. has committed to a major capital expenditure ment involves major infrastructure alterations. The existing Southeast Field mine has a coal program to maximise operating efficiencies

10 BROWN COAL

The existing Southeast field mine, which feeds public interest groups and official agencies. the 1,600 mw Hazelwood power station, will A wide range of community, environmental, ALL PLANS AND DESIGNS ARE PUT reach its operating limit in October. government and local groups are represented BEFORE THE COMPANY’S on the consultative group. and environmental performance, mainly Morwell, 148 km east of Melbourne and 80 ENVIRONMENTAL REVIEW COMMITTEE, through an $80 million upgrade / installation metres above sea level, is the heart of the A GROUP OF SPECIALISTS WHO of new electrostatic precipitator plant. Latrobe Valley, which is Victoria’s energy CONTRIBUTE EXPERT ADVICE WHILE While the brown coal mines occupy large centre. areas, Hazelwood Power is also committed to Dairying, timber and agriculture were the REPRESENTING THEIR RESPECTIVE rehabilitation of the land it uses. lifeblood of the region in the nineteenth cen- PUBLIC INTEREST GROUPS AND The company is directly involved in the reha- tury, until a prospector discovered brown bilitation of several large and significant coal as early as 1873. OFFICIAL AGENCIES. areas close to the mine and is in the early The Great Morwell Coal Mine Company stages of developing more wetlands in the started mining and opened a briquette plant surrounding region. in 1889 but it closed in 1894. It has consulted widely with the local com- However, an open-cut mine re-opened in the munity to find common ground between the area in 1916 and supplied the fuel for the research options and the public’s needs and State Electricity Commission’s (SEC) FOR MORE INFORMATION CONTACT: expectations. Yallourn power station, which opened in All plans and designs are put before the com- 1924, and for a briquette factory, which Richard Palmear pany’s Environmental Review Committee, a opened in the early 1920’s. Hazelwood Power group of specialists who contribute expert Morwell’s brown coal also supplied Tel: (03) 9617 8300 advice while representing their respective Melbourne’s gas between 1956 and 1969.

11 REGULAR FEATURE News Briefs

review their prospectivity and relevant gov- OIL INDUSTRY GATHERS ernment policy. MINERAL SANDS CONFERENCE IN MELBOURNE Information will also be available regarding The Australian Journal of Mining will hold exploration in areas under state jurisdiction. the 4th annual Global Mineral Sands Representatives of Australia’s national oil and Exploration and Investment Conference in gas industry will assemble in Melbourne in The conference concludes with a three-day Melbourne on March 24 and 25 at the Hilton March for the annual Australian Petroleum Otway Basin adventure on the Park hotel. Production and Exploration Industry confer- The trip departs Melbourne on Thursday, The conference comes as Murray Basin ence to be held at the Melbourne Convention March 27 and returns to Melbourne during the Centre Titanium plans to open its second Murray early evening of Saturday, March 29. Basin mineral sands project near Ouyen in Running from Monday March 24 until Participants will examine the structure and Victoria’s northwest and as the pace of devel- Wednesday March 26, the conference will stratigraphy along the Otway coast, including opment in the region increases. bring together more than 1,000 of the indus- examples of the late Tertiary deformation that Major keynote speeches will be delivered by: try’s leading executives, scientists, financiers led to trap formation, fluvial-type reservoir ¥ Mike Folwell, chief executive of Iluka and service industries. sands and source rock sequences in Early Resources, a half owner of MBT. The conference kicks off with a tour of the Cretaceous units. Torquay Basin. ¥ James Nameny, president Ð sales division of Outcrops will be visited at the world famous Rio Tinto Iron and Titanium, who will give The full-day tour, organised by Malcolm ‘Twelve Apostles’, looking offshore to the a global perspective on the industry, which Wallace of the University of Melbourne on Minerva gas field. Contact APPEA for regis- has been through some tough times recently Saturday, March 22, will focus on the basin’s tration details. geological wonders. ¥ Stuart Hall, general manager of planning The conference starts with keynote addresses and development at WMC Resources Ltd, by the large and small ends of the Australian STATS REVIEW will review the ‘Corridor Sands’ project in industry The Department’s Minerals and Petroleum Mozambique. Ged Davies, vice president of Shell Global Statistical Review for 2001/2002 is now avail- Recognised as one of the premier mineral Business Environment, will deliver a global able on the department website sands industry conferences, this event is well and national perspective of the industry while www.nre.vic.gov.au/minpet timed to bring together the investment com- Dr Howard Brady AO, chief executive of The review provides an overview of Victoria’s munity and the producing, trading and con- Mosaic Oil NL, will talk about small explor- extractive, minerals and petroleum industries suming sectors to discuss the outlook for the ers and examine why they are still relevant. and is regarded as the most comprehensive year ahead. A highlight of the conference will be the public database available for these sectors in release of new exploration acreage. The Victoria. MINERAL SANDS ACTION AGENDA acreage release session will focus on the 2003 It includes data on production, exploration, A major new study is underway to assist release of petroleum exploration areas in expenditure, as well as licensing and safety Victoria to capitalise on the potentially world- Commonwealth waters and a seminar will performance. class mineral sands resources of the Murray Basin and strengthen Australia’s position in the world markets for titanium minerals and zirconium. While the Murray Basin extends over three states, Victoria, New South Wales and South Australia, Victoria is well placed to become the primary location for mineral separation facilities and other value-adding opportunities flowing from the development of the industry. To ensure maximum benefits flow to Victoria, the new study will determine what actions need to be taken to give the state the best chance of capitalizing on the mineral sands sector.

The unique geology of Victoria’s southwest coastline and the Otway Basin region will be studied by geologists attending the APPEA conference in March.

12 REGULAR FEATURE News Briefs

A Murray Basin Mineral Sands infrastructure The collection includes core, cuttings and planning study was completed under the other samples from groundwater drilling, Commonwealth’s Regional Minerals Program petroleum and mineral exploration, geotechni- in July 2000. cal research and field mapping programs. New This study assessed development opportuni- samples from current mineral and petroleum ties and identified the infrastructure needed in exploration programs are added to the collec- the recognised opportunity zones. tion as they are submitted or become avail- able. Now, a new action plan is to be developed to determine the strategies and actions required Equipped with inspection and sampling facili- to establish a sustainable mineral sands ties, the core library is used by industry, acad- industry, including downstream processing, emia and government to help locate new min- in Victoria. eral deposits, energy resources and for train- ing future geoscience professionals. The aim is to maximise Victoria’s chances of becoming the primary centre for mineral It provides data which is otherwise either sands processing. unobtainable or can only be captured by expensive and time-consuming re-drilling. The scope of the project is to establish the cur- rent situation of: In some instances, the sample is irreplaceable, providing samples from areas that are now ¥ Mineral deposits, mining and processing inaccessible. ¥ Mineral sands commodity markets (including processed minerals) MPI FLOAT A MAJOR SUCCESS ¥ Infrastructure Victoria’s minerals and petroleum core library is one of the most comprehensive collections in ¥ Murray Basin environmental markers MPI Mines Ltd, operator of the Stawell gold mine in northwestern Victoria, has made a Australia. The open-day at the Werribee ¥ Regional community status facility will provide explorers with a chance to major success in its share market entry, with gain extra insights into the collection. ¥ Skills analysis shares trading at 48 cents each on their debut. It will also evaluate the key industry growth MPI Mines raised $A7 million at 40 cents a drivers and strategic advantages of Victoria share, attracting strong interest from investors. DEPT CHANGES and identify the issues that need to be The float was timed well, offering the stock at addressed to attract the industry and meet the a time when the gold price has risen strongly There have been some major changes to State sustainable development principles of social on political unrest in the Middle East. Government departments following the State responsibility, environment protection and elections. economic progress. Applications for shares in MPI Mines Ltd’s initial public offering closed oversubscribed The Department of Primary Industries (DPI) This is designed to allow the development of on 20 December, two weeks ahead of schedule and The Department of Sustainability and strategies for the industry out to 2010. and the lead manager, Paterson Ord Minnett, Environment (DSE) have replaced the former was forced to restrict share allocations. Department of Natural Resources and Environment (DNRE). CORE LIBRARY OPEN DAY Managing Director, Brian Phillips, said he was pleased with the interest shown in the float. The Energy and Minerals Division of DNRE Victoria’s minerals and petroleum core library is now the Minerals and Petroleum Division “We must now work to produce the right out- will hold an open day on Thursday, March 27. and part of the Department of Primary comes for our shareholders”, Mr Phillips said. The library, which is located within the Industries (DPI) while the Energy Policy “We have as our clear objectives the task of Victorian Agriculture and Technology Group is now part of the Department of extending the operating life at Stawell and grounds at Werribee, will be open from Infrastructure. Black Swan, and developing Coolgardie to its 11am to 3pm. A BBQ lunch will be DPI incorporates the divisions of Minerals full potential.” provided. and Petroleum, Agriculture and Fisheries. MPI is a diversified producer, operating one Interested parties should contact Dee Ninis Theo Theophanus is the new Minister for nickel mine and two gold mines. on 03 9412 5169 or Avi Olshina on Energy, Industries and Resources and the sec- 03 9412 5094. The company is undertaking gold exploration retary of DPI is Chloe Munro, who was secre- in Victoria and West Australia and nickel Operated by the Minerals and Petroleum tary of the former DNRE. exploration in WA. Division of the Department of Primary The new Department of Sustainability and Industries, the library contains approximately The Stawell mine is currently producing Environment with Professor Lyndsay Neilson 18,000 samples collected over the last century approximately 90,000 ounces of gold a year. as Secretary, incorporates Catchments and from drillholes and mapping projects through- Operated by MPI since 1992, the mine has pro- Water, Forest Services, Parks Flora and Fauna, out Victoria. duced over 850,000 ounces of gold in ten years. Land Victoria and Greenhouse Policy Unit.

13 REGULAR FEATURE Victoria’s

L E G E N D

Gold field: 0.5 - 1.0 million oz Gold field: 1.0 - 5.0 million oz

Gold field: >5.0 million oz - Values include production and reserves

Brown coal resource: < 100 million tonnes Brown coal resource: > 100 million tonnes

Base metals deposit - Resource / Reserve

14 REGULAR FEATURE Continental and minor marine sedimentary rocks Continental and minor marine rocks Marine and continental sedimentary Continental volcanic rocks Continental sedimentary rocks Continental trachyte Granite and trachyte Continental and marine glacial sedimentary rocks Continental sedimentary and volcanic rocks Cauldron volcanic complexes Marine sedimentary rocks Rift and cauldron volcanic complexes Silurian-Devonian fault rocks sedimentary rocks Silurian to Mid. Devonian marine and minor continental Marine and continental rift sedimentary rocks Marine rift volcanics Marine and continental sedimentary rocks Marine sedimentary rocks Marine sedimentary rocks Marine volcanic rocks diorite and gabbro) Palaeozoic intrusives (granites and tonalites, minor Fault Metamorphic overprint

Silurian Ord. Camb. Cainozoic Mesozoic Devonian Palaeozoic 15 City Oil field Gas field Mineral sand resource

- HM-heavy mineral; R-rutile; Z-zircon; I-Ilmenite - HM-heavy mineral; R-rutile; mineral, oil and gas resources oil and mineral, LICENCE REVIEW Mineral Licences October/December 2002

EXPLORATION LICENCE APPLICATIONS TITLE NO. STATUS MAP SHEET PRIMARY OWNER EVENT DATE AREA SIZE EL4704 APPLICATION COLAC PURUS ENERGY LTD 03/10/2002 456 GRATS EL4707 APPLICATION ST ARNAUD EROMANGA HYDROCARBONS NL 04/10/2002 16 GRATS EL4704 CURRENT HEATHCOTE AGD OPERATIONS PTY LTD 04/10/2002 3 GRATS EL4706 APPLICATION CASTLEMAINE EROMANGA HYDROCARBONS NL 04/10/2002 50 GRATS EL4708 APPLICATION CHARLTON EROMANGA HYDROCARBONS NL 04/10/2002 70 GRATS EL4705 APPLICATION BACCHUS MARSH EROMANGA HYDROCARBONS NL 04/10/2002 44 GRATS EL4710 APPLICATION CASTERTON PURUS ENERGY LTD 09/10/2002 59 GRATS EL4709 APPLICATION CASTERTON PURUS ENERGY LTD 09/10/2002 309 GRATS EL4711 APPLICATION TALLANGATTA KENNETH LESLIE HOPPER 17/10/2002 79 GRATS EL4712 APPLICATION BALLARAT RELIANCE MINING LTD 18/10/2002 2 GRATS EL4713 APPLICATION BALLARAT RELIANCE MINING LTD 18/10/2002 2 GRATS EL4718 APPLICATION NAGAMBIE SIERRA MINERALS LTD 25/10/2002 49 GRATS EL4719 APPLICATION NAGAMBIE SIERRA MINERALS LTD 25/10/2002 18 GRATS EL4714 APPLICATION BOGONG MT WILLS GOLD MINES NL 25/10/2002 31 GRATS EL4715 APPLICATION BENAMBRA MT WILLS GOLD MINES NL 25/10/2002 71 GRATS EL4716 APPLICATION WILLAURA MOUNT ISA MINES LTD 25/10/2002 72 GRATS EL4717 APPLICATION OMEO MT WILLS GOLD MINES NL 28/10/2002 1513 GRATS EL4720 APPLICATION RUPANYUP RANGE RIVER GOLD NL 31/10/2002 99 GRATS EL4721 APPLICATION ST ARNAUD SIERRA MINERALS LTD 01/11/2002 456 GRATS EL4722 APPLICATION CASTLEMAINE SIERRA MINERALS LTD 01/11/2002 429 GRATS EL4723 APPLICATION NAGAMBIE SIERRA MINERALS LTD 04/11/2002 122 GRATS EL4724 APPLICATION BUFFALO DEAN G TURNBULL 11/11/2002 405 GRATS EL4725 APPLICATION BENDIGO PROVIDENCE GOLD AND MINERALS PTY LTD 14/11/2002 85 GRATS EL4726 APPLICATION CORRYONG DEAN G TURNBULL 28/11/2002 1610 GRATS EL4727 APPLICATION CASTLEMAINE GOLD SEARCH VICTORIA PTY LTD 10/12/2002 105 GRATS EL4728 APPLICATION WOODEND MOUNT ISA MINES LTD 16/12/2002 100 GRATS EL4729 APPLICATION CASTLEMAINE GOLD SEARCH VICTORIA PTY LTD 19/12/2002 336 GRATS EL4730 APPLICATION WILLAURA MPI GOLD PTY LTD 24/12/2002 492 GRATS EL4734 APPLICATION OUYEN BASIN MINERALS HOLDINGS PTY LTD 27/12/2002 15 GRATS EL4731 APPLICATION BENDIGO GOLD SEARCH VICTORIA PTY LTD 27/12/2002 502 GRATS EL4732 APPLICATION OUYEN BASIN MINERALS HOLDINGS PTY LTD 27/12/2002 11 GRATS EL4733 APPLICATION OUYEN BASIN MINERALS HOLDINGS PTY LTD 27/12/2002 6 GRATS EXPLORATION LICENCES GRANTED TITLE NO. STATUS EVENT MAP PRIMARY OWNER EVENT DATE EXPIRY DATE EL4661 CURRENT GRANT BENDIGO LACH DRUMMOND RESOURCES PTY LTD 04/10/2002 03/10/2007 EL4629 CURRENT GRANT ALEXANDRA DUNCAN R MCLEAN 17/10/2002 16/10/2007 EL4689 CURRENT GRANT TALLANGATTA ELGIN METALS NL 17/10/2002 16/10/2007 EL4540 CURRENT GRANT PRINCETOWN IRONBARK MINERALSANDS PTY LTD 17/10/2002 16/10/2007 EL4674 CURRENT GRANT CRESWICK SINCLAIR EXPLORATION PTY LTD 17/10/2002 16/10/2007 EL4680 CURRENT GRANT LINDSAY SOUTHERN TITANIUM NL 31/10/2002 30/10/2007 EL4662 CURRENT GRANT STRATFORD RIO TINTO EXPLORATION PTY LTD 31/10/2002 30/10/2007 EL4663 CURRENT GRANT STRATFORD RIO TINTO EXPLORATION PTY LTD 31/10/2002 30/10/2007 EL4664 CURRENT GRANT BAIRNSDALE RIO TINTO EXPLORATION PTY LTD 31/10/2002 31/10/2007 EL4498 CURRENT GRANT CORANGAMITE IRONBARK MINERALSANDS PTY LTD 01/11/2002 31/10/2007 EL4630 CURRENT GRANT RUPANYUP RANGE RIVER GOLD NL 14/11/2002 13/11/2007 EL4634 CURRENT GRANT ST ARNAUD RANGE RIVER GOLD NL 14/11/2002 13/11/2007 EL4638 CURRENT GRANT BEAUFORT RANGE RIVER GOLD NL 27/11/2002 26/11/2007 EL4700 CURRENT GRANT WEDDERBURN AURIONGOLD EXPLORATION LIMITED 27/11/2002 26/11/2007 EL4702 CURRENT GRANT HORSHAM ILUKA RESOURCES LIMITED 27/11/2002 26/11/2007 EXPLORATION LICENCES SURRENDERED, CANCELLED OR EXPIRED TITLE NO STATUS MAP PRIMARY OWNER EVENT DATE EXPIRY DATE EL4627 SURRENDERED KANIVA FALCON MINERALS LTD 03/10/2002 03/10/2002 EL4597 SURRENDERED LALBERT PROBO MINING LTD 17/10/2002 17/10/2002 EL4360 SURRENDERED WANGARATTA RUTHERGLEN MINING PTY LTD 14/11/2002 14/11/2002 EL3972 EXPIRED MANSFIELD TERROCK PTY LTD 29/11/2002 29/11/2002 EL4081 SURRENDERED WENTWORTH ILUKA MIDWEST LTD 12/12/2002 12/12/2002 MINING LICENCE APPLICATIONS TITLE NO. STATUS MAP SHEET PRIMARY OWNER EVENT DATE AREA SIZE MIN5382 CURRENT DUNOLLY RONALD J DOIDGE 03/10/2002 3.9 HA MIN5383 APPLICATION CASTLEMAINE BRUCE ROBERT BROWN 07/10/2002 225.7 HA MIN5384 APPLICATION OMEO MINES OF STIRLING PTY LTD 07/11/2002 3.4 HA MIN5385 APPLICATION OMEO MINES OF STIRLING PTY LTD 07/11/2002 4.7 HA MIN5386 APPLICATION CRESWICK ANTHONY GEORGE FRASER 11/11/2002 4.6 HA MIN5387 APPLICATION BACCHUS MARSH GOLD SEARCH VICTORIA PTY LTD 15/11/2002 2.6 HA MINING LICENCES GRANTED TITLE NO STATUS EVENT MAP PRIMARY OWNER EVENT DATE EXPIRY DATE MIN5356 CURRENT GRANT FOSTER TAMAS KAPITANY 03/10/2002 02/10/2007 MIN5342 CURRENT GRANT BENDOC JOHN C SHIMMEN AND BRUCE W MCLENNAN 01/11/2002 31/10/2007 MIN5288 CURRENT GRANT HOPETOUN TIMOTHY G CONWAY AND ZOE M CONWAY 01/11/2002 31/10/2007 MIN5380 CURRENT GRANT HEATHCOTE AGD OPERATIONS PTY LTD 27/11/2002 26/11/2007 MIN5382 CURRENT GRANT DUNOLLY RONALD G DOIDGE 27/11/2002 26/11/2007 MINING LICENCES SURRENDERED, CANCELLED OR EXPIRED TITLE NO STATUS MAP PRIMARY OWNER EVENT DATE EXPIRY DATE MIN5168 REFUSED MATLOCK DENIS J RENOWDEN 17/10/2002 17/10/2002 MIN5169 REFUSED MATLOCK DENIS J RENOWDEN 17/10/2002 17/10/2002 MIN5377 REFUSED DUNOLLY BRENDAN WILLIAM SMITH 17/10/2002 17/10/2002 MIN5254 SURRENDERED NHILL HAROLD T FLAVEL 14/11/2002 14/11/2002 MIN4018 SURRENDERED MITIAMO NORTHERN GYPSUM CO PTY LTD 14/11/2002 14/11/2002 MIN4947 SURRENDERED DUNOLLY DIAMETRIC RESOURCES (AUSTRALIA) PTY LTD 14/11/2002 14/11/2002 MIN4605 EXPIRED NHILL HAROLD T FLAVEL 02/12/2002 02/12/2002 MIN4893 EXPIRED NOWINGI LARMON PTY LTD 03/12/2002 03/12/2002 MIN5279 SURRENDERED ALBURY TAMAS KAPITANY 12/12/2002 12/12/2002 MIN5130 EXPIRED HEATHCOTE FLITEGOLD PTY LTD 17/12/2002 17/12/2002 MIN5131 EXPIRED HEATHCOTE FLITEGOLD PTY LTD 17/12/2002 17/12/2002 MIN5266 EXPIRED HEATHCOTE FLITEGOLD PTY LTD 17/12/2002 17/12/2002 MIN4582 EXPIRED MILDURA ELIZABETH MCNABB 29/12/2002 29/12/2002 ABBREVIATIONS: SURR - SURRENDERED, CANC - CANCELLATION CAN/AM - CANCELLED/AMALGAMATED

16 MBT MOVES BEYOND WEMEN

ictoria’s leading position in the Murray Basin Titanium will move its development of the vast Murray Basin existing Wemen project dredge to a new mineral sands province has taken a location near Ouyen when it develops the Galileo mineral sands mine. V major stride with Murray Basin Titanium Pty Ltd preparing to develop its second major mine project. The operator of the region’s first mineral sand CENTRED ON FREEHOLD LAND 15 mine, at Wemen near Robinvale, has begun preliminary studies for an environmental KILOMETRES NORTH-EAST OF OUYEN, effects study on a new mining project near THE NEW MINING PROJECT WILL Ouyen. The area contains additional new mineral sand Construction of the new mine is scheduled to PRIMARILY FOCUS ON THREE deposits to be mined after the depletion of the start in 2004 with mining anticipated in 2005. PARALLEL MINERAL SANDS DEPOSITS, Wemen project, Victoria’s first titanium min- Mercury and Galileo are expected to produce erals project. at a rate of 170,000 tonnes of concentrate a GALILEO, MERCURY AND TITAN. MBT’s strategy is to develop two or three year for ten years with mining expected to mineral sands mines within the Murray Basin. begin immediately operations at Wemen, Centred on freehold land 15 kilometres north- which produces 70,000 tonnes of concentrate It will then be either placed in mined-out pits east of Ouyen, the new mining project will a year, are completed. over the tailings; stockpiled temporarily or primarily focus on two parallel mineral sands Heavy mineral concentrate produced would used in infrastructure construction such as in deposits, Galileo and Mercury. be separated at the existing separation plant bund walls. These are aligned in a north-west to south-east located at Thurla, 20 kilometres southwest of The ore will be mined using the existing buck- direction and vary between 9km and 13km in Mildura. etwheel dredge feeding a floating concentra- length. The new mine will utilise the existing bucket- tor. Some ore may also be dry mined with Mercury contains higher grade mineral than wheel dredge used at Wemen. earthmoving equipment feeding a unit that the initial project at Wemen and is larger, Overburden of 22 metres in the area is slight- will slurry the ore before it is pumped to a while Galileo is smaller but also contains bet- ly thicker than at Wemen with the ground con- land-based concentrator. ter grade mineral. ditions slightly more undulating. The ore bodies to be dredge-mined are below Two other strands, Apollo and Titan, have also The overburden will be removed using bull- the existing groundwater table. been found in the area but, at this stage, appear dozers, a feeder-breaker and a conveyor/stack- Within the concentrator, separation of heavy to be sub-economic. er system. mineral from the ore will take place by passing

17 MINERAL SANDS

Mineral sands mining in Victoria has paved the way for a broader series of developments throughout the Murray Basin, which spans a vast area of Victoria, NSW and South Australia. the slurry over successive stages of spirals, to separate the light particles from the heavy par- ticles. No size reduction will be carried out. The heavy minerals separated in the concen- trator will be stockpiled using a cyclone dewa- tering tower and transported to the separation plant by truck. Tailings from the concentrator will then be pumped back into the mined areas, where water will be recovered from the slurry and recycled. The liberated clay will be concentrated in a thickener and pumped into solar evaporation dams or returned immediately to the mine path. After the tailings area has been backfilled to approximate the pre-mining topography, it will be contoured using bulldozers or other equipment as appropriate. Topsoil will then be respread. Revegetation of the restored landscape will be undertaken using a range of techniques to return the land to its pre-mining use, which is However, these vegetated areas are located in predominantly dryland agriculture; cereal REVEGETATION OF THE RESTORED sections of roadside corridors, as small farm cropping and grazing. remnants and, in one case, as part of a small LANDSCAPE WILL BE UNDERTAKEN (25ha) Bushland Reserve. Rehabilitation will be carried out progressive- ly as mining advances. USING A RANGE OF TECHNIQUES TO Few of the vegetated areas would potentially be suited to the occurrence of Swainsona Vegetated areas, including road reserves, will RETURN THE LAND TO ITS PRE-MINING Pyrophila, listed as rare or threatened, which be re-established using a combination of tech- USE, WHICH IS PREDOMINANTLY tends to inhabit sandy dunefield areas with an niques such as seeding and planting of tube- understorey of Porcupine Grass. stock. DRYLAND AGRICULTURE; CEREAL Studies have shown that the amount of poten- Integral to the mining operations will be activ- CROPPING AND GRAZING. tially suitable native vegetation present in the ities to manage any potential impacts on soil, project area is probably less than 10 hectares. water and air. In the event that Swainsona Pyrophila may be like the Black-eared Miner, Malleefowl, and Management of dust will include restricting present, it is considered extremely likely that the Regent Parrot. areas cleared to a practical minimum, stabil- it can be regenerated naturally when the seed ising of stockpiles, prompt rehabilitation, The reserve also contains habitat for the Red- contained in stored topsoil is replaced during use of a water cart on trafficked areas and lored Whistler, Mallee Emu-Wren and Eastern the rehabilitation process. use of brush and fencing to act as wind- Long-eared Bat, all of which have been The new mine is expected to utilise highly breaks. recorded nearby. saline groundwater for dredging and mineral Sensitive to flora and fauna impacts, Murray The Black-eared Miner is recognised as separation processes, although the company Basin Titanium is already conducting exten- endangered nationally, while the other species will also use its water rights via the Murray- sive studies in the area. are recognised as vulnerable nationally and all Mallee pipeline. The nationally endangered Regent Parrot uses are listed under the Environmental Protection The company says water requirements will be the native vegetation in the general area of the and Biodiversity Conservation (EPBC) Act. less than at Wemen because of the higher local proposed new mine for flight corridors. A revegetation program initiated in the late water table. MBT, Iluka Resources, and the Department of 1980’s established a vegetated corridor A decision on an environment effects study is Primary Industries have already held discus- between the Annuello reserve and Murray- expected from the Victorian Government sions regarding expansion of MBT’s existing Sunset National Park to the west. shortly. Regent Parrot study being conducted at However, the new mining operations will not Wemen. take place within the Annuello reserve or the FOR MORE INFORMATION CONTACT: The Ouyen project is located southwest of the vegetated corridor and will only occur, at the Annuello Flora and Fauna Reserve which is closest, within seven kilometres of the Graeme Kininmonth, Environmental Manager linked to the eastern side of the Murray- Annuello corridor. Murray Basin Titanium Pty Ltd Sunset National Park. Around 16 hectares of Mallee tall-shrublands, PO Box 4032 Mildura Victoria 3502 The Annuello reserve is significant because it which occur within the project area, could be Tel: (03) 5023 2911 supports threatened animal and bird species affected by the mine.

18 GAS NEWS Coal bed methane project underway

rilling on Victoria’s first brown coalbed methane pilot production THE AIM OF THE PROJECT IS TO TEST project has been completed by D Eastern Star Gas Ltd with the THE VIABILITY OF NATURAL GAS company hoping to quickly prove the PRODUCTION FROM THE EXTENSIVE viability of producing methane from Victoria’s vast brown coal reserves. BROWN COALS THAT OCCUR AT Drilling of the five-well pilot project at the SHALLOW DEPTHS IN VICTORIA. Oak Park site, 35 kms west of Melbourne near Bacchus Marsh, was suspended over Christmas and New Year but resumed early in deep and produce gas at between 50 and January. 350,000 cubic feet a day (Mcfd), averaging The pilot project involved drilling five wells 200 Mcfd per well. into the Maddingly brown coal seam, with “The Victorian licences appear to contain the four wells 300 metres apart surrounding a cen- same essential ingredients and the interests in tral well. these areas have been acquired with the goal The Oak Park pilot project is 19 kilometres of duplicating the spectacular success that has south of Bacchus Marsh and lies close to Brown coal is mined at both Anglesea and been experienced in the Powder River Basin, existing gas pipelines. Bacchus Marsh in the Melbourne Trough area where drilling has increased five fold over the Coal in the target Maddingly seam is about 17 where the coal occurs close to the surface. past three years.” metres thick from a depth of approximately 90 Eastern Star Gas managing director, Denis The company has reported that, although only metres beneath the surface. Morton, said that the most active, shallow gas traces of methane have been recovered from The aim of the project is to test the viability of exploration play in the USA over recent years the cored coal seam intervals, in the wells natural gas production from the extensive had been coalbed methane exploration. drilled to date, the capacity of the coals to pro- duce significant methane remains untested brown coals that occur at shallow depths in That effort had resulted in substantial produc- Victoria. until the seams can be locally dewatered by tion, largely from brown coal deposits in the pumping. Eastern Star Gas holds three extensive explo- Powder River Basin. ration licence areas, EL 4507, EL 4392, and “The reason for the success of this play is FOR MORE INFORMATION CONTACT: EL 4510. related to low-level finding and development After drilling, the wells will be dewatered, costs, combined with proximity to gas Dennis Morton using submersible electric pumps, for a six- pipeline infrastructure,” Mr Morton said. Managing director month trial production period. “Gas production wells in the Powder River Tel: (02) 9251 5599 Pump testing of each of the five wells over Basin are commonly only 100-250 metres several months will be necessary to determine whether the wells are capable of sustained gas production at commercially viable rates. The Melbourne Trough area covered by the Eastern Star Gas exploration licences EL 4057 and EL 4392 contains Australia’s second largest brown coal deposit, with an estimated 10 to 12 billion tonnes of coal in a single seam (the Maddingly seam). Based on an analogy with the productive Powder River Basin, in Montana and Wyoming, USA, the company says the gas resource potential of the target section within EL 4507 ranges as high as 500 petajoules.

Victoria’s first coal seam methane project, near Bacchus Marsh, is hoping to repeat the successes of similar projects in Queensland and NSW where gas from black coal seams emerging as an important part of the broader natural gas market.

19 EXPLORATION Essential set for big year

ictorian exploration junior, Essential Left: The Port Fairy 1 well, drilled Petroleum Resources, is set for its last year, could become Victoria’s busiest year with several exploration first onshore oil production well. Essential Petroleum drilling wells and a host of other activities V engineer, Wally Westman, pictured aimed at proving the oil and gas potential of relieving gas pressure from the the Otway Basin. well, hopes the well will flow oil to Now in strong financial shape, following the the surface once water in the well successful conversion of the company’s share bore is removed. options, Essential’s first task is the drilling of Below: Essential Petroleum the Koroit West-1 well, a follow up to its suc- managing director, John Remfry cessful Port Fairy-1 wildcat.. This will be fol- at the Koroit West 1 well. lowed by the drilling of Banganna-1 and the workover of Port Fairy-1 to try and stimulate the Otway Basin’s first commercial oil flow. ESSENTIAL’S HIGH LEVEL OF Late in 2002, Essential raised $4.7 million through the conversion of options issued at the ACTIVITY WILL CONTINUE time of the company’s initial stock exchange DURING FEBRUARY WHEN listing. The conversion, underwritten by Intersuisse A SPECIALISED RIG BEGINS Corporate Pty Ltd, succeeded in attracting A WORKOVER OF THE about 70 per cent of the company’s original option holders and lifted the total number of PORT FAIRY 1 WELL. shares on issue from 68 million to 91 million. Essential’s market capitalisation has also increased, up from about $13 million to more than $21 million. Essential managing director, John Remfry, Essential’s 750-kilometre offshore seismic VIC/P46 offshore permit to Mittwell Energy said the share issue boosted the company’s survey, completed last December, had been Resources, an Australian subsidiary of Mitsui cash reserves to almost $7 million, all of highly successful. Corporation of Japan and a well is being which is destined to be spent in a widening planned. spread of exploration activity in the onshore “The survey was conducted to delineate and and offshore Otway Basin. refine oil and gas prospects that have already Offshore work in conjunction with Mittwell been identified in our offshore permit area Energy will target gas and oil plays in the Essential’s exploration program for 2003 VIC/P46 from reprocessing of old seismic Waarre formation similar to recent discoveries started in early January with the Koroit West- data,” he said. at Thylacine (Origin/Woodside), Geographe 1 well. The well was a follow up to the com- (Origin/Woodside/Cal Energy) and Casino pany’s Port Fairy-1 oil and gas discovery, (Strike Oil/Santos), about 150 kilometres east about 10 kilometres to the south, and was of the Essential permits. drilled only to a depth of about 800 metres. Mr Remfry said the company was also work- Essential Petroleum has a 33.9% interest in ing on detailed geological and geophysical the well and acted as operator on behalf of its studies in PEL72 in South Australia in 2003 joint venture partners Origin Energy (50.51%) along with a seismic survey in its 100% and Lakes Oil (15.59%) owned onshore permit PEP151, followed by The Banganna 1 well was due to be spudded an exploration well later this year. in the second half of January to test the Pretty Hill petroleum system, again in partnership In Victoria, geological and geophysical stud- with Origin Energy. ies in offshore permit VIC/P50, followed by 1000 kilometres of offshore seismic survey, is Essential’s high level of activity will continue planned. during February when a specialised rig begins a workover of the Port Fairy 1 well. “The survey has incorporated new technologies The well will be recompleted to allow produc- and techniques, including amplitude versus off- FOR MORE INFORMATION CONTACT: tion testing. set analysis, which will provide valuable addi- John Remfry, Managing director Mr Remfry said if the program was success- tional information about the presence of hydro- Tel: (03) 9699 3009 carbons in the structures we have identified.” ful, a second well on the Port Fairy structure Email: [email protected] would be considered. He added that Essential has farmed out a 32.5% stake in its

20 VIMP DATA 3D look at Valley’s coal resource

new three-dimensional picture of the vast brown coal resources in the Latrobe Valley will be released at the A VIMP data launch in May. Data from almost eight thousand bore holes have been used to build a digital three- dimensional model showing the distribution and quality of the brown coal in a 1100 square kilometre area between Moe and Rosedale, including the State’s vital electric- ity generating resources. The model facilitates the matching of coal to development opportunities. It also captures and archives 90 years of knowledge from the former State Electricity Commission of Victoria (SECV) and other souces that, until now, was accessible only as paper records. The model has applications in resource util- isation, land-use planning and assessments of groundwater and subsidence. Rooves and floors have been created for the sixteen thickest brown coal seams or splits. These were interpolated from bore intersec- tions on a 200m grid to give a regional inter- pretation of the coal geology. This includes an economic resource of Above: 3D image of the model area incorporating The seams in the model can be sliced along 53,000 million tonnes. the surface Landsat image, roof of M1B coal seam user-specified planes to produce sections and and top of basement. Left: Sections through the The information is being distributed in three model showing the variation in moisture content of these compare favourably with sections last packages, each priced at $100. the coal seams. drawn by SECV geologists in the 1980s. The basic package gives an overview of the The sixteen most important coal quality coal resource and will be useful for coal It is anticipated that users of the parameters, including moisture and ash, explorers and land-use planners. MINESCAPE and SURPAC packages would have been incorporated into a block model. It contains the borehole database and GIS lay- also require the BASIC package. The 160 x 160 x 12m blocks can be queried ers for the main coal seam rooves, floors and The project was funded by the Victorian to show single or combined parameters like isopachs (both ArcView and MapInfo format). Department of Innovation, Industry and Garner’s fouling index that affect brown The other, more sophisticated, packages contain Regional Development as an outcome of the coal utilisation. three-dimensional surface and block models of Latrobe Valley Ministerial Taskforce. Modelling was undertaken by GHD Geo-Eng An in-situ resource of 129,000 million the coal resource in SURPAC and MINESCAPE for the Department of Primary Industries. tonnes of brown coal has been calculated formats and will assist coal explorers and miners using the model. with coal utilisation planning. Yallourn Energy Ltd, Hazelwood Power and Loy Yang Power Ltd gave permission to use their mine models and assisted with project planning. Although the model covers the operating mines at Yallourn, Hazelwood and Loy Yang; the coal quality information has been generalised and bores removed from the model in these areas.

FOR MORE INFORMATION AND PRODUCTS CONTACT: Mineral and Petroleum Business Centre Level 8, 240 Victoria Parade East Melbourne, Victoria, 3002 Tel (03) 9412 5103 Fax (03) 9412 4713 Email: [email protected]

21 VIMP DATA VIMP data release the best yet

A NEW 3D PICTURE OF THE VAST COAL RESOURCES IN THE LATROBE VALLEY WILL ALSO BE AVAILABLE IN A DIGITAL 3D MODEL SHOWING THE DISTRIBUTION AND QUALITY OF THE THICKEST BROWN COAL SEAMS FROM MOE TO ROSEDALE.

‘ground calibrated’ and will be available for viewing. The volume of salt store and depth to base- ment can be estimated with improved accura- cy with the reprocessed data. Thirteen new GIS CDs covering the state will also be available. These contain the latest geoscientific data in MapInfo and ArcView GIS format as well as surface geochemistry, drillhole and mineral occurrence databases. A new 3D picture of the vast coal resources in he next package of VIMP data to be the Latrobe Valley will also be available in a released in May promises to be the best digital 3D model showing the distribution and yet. A wide range of geoscientific quality of the thickest brown coal seams from T products, including geology and Moe to Rosedale. regolith maps and reports, geophysical The model will provide seamless information data, 3D models, GIS CDs and digital open on coal geology and resources that will assist file exploration data will be showcased at with coal utilisation and land-use planning. the 15th Victorian Initiative for Minerals and Petroleum (VIMP) data release and Open file Exploration Licence reports will be seminar on 26 May. more accessible with the release of digitised reports on CD. The results of new geological mapping on the Castlemaine 1:100,000 mapsheet area in the Digital tabular data and scanned reports for central goldfields will be provided in four new several hundred licences dating back to 1980 1:50,000 scale geological maps and a will be available in a set of CDs at minimal Top: Total magnetic intensity image of Victoria. cost. 1:100,000 scale geophysical interpretation Data sources: Geological Survey of Victoria, map with accompanying report. Geoscience Australia and Company Airborne The half-day VIMP seminar will be followed They provide new insights into the geology Surveys. Lower: Fieldwork by GSV staff is an by a field trip to key locations highlighting the and controls on mineralisation in the major important part of the VIMP program. geology of the Castlemaine, Maldon and Castlemaine, Maldon and Daylesford gold- Daylesford goldfields and the regolith of the chemistry in the Ballarat-Creswick area. fields, which together have produced about 10 BallaratÐCreswick area. million ounces of gold. New geophysical products that will be GSV geologists will escort the excursion, released include: To further help target exploration work in key explaining the results of their mapping work goldfield areas, regolith-landform maps and ¥ an updated statewide magnetic grid which in the field. reports for the Ballarat-Creswick (1:50,000 includes reprocessed data stitched together scale), Bendigo (1:100,000 scale) and Ararat from numerous surveys to create a seamless FOR MORE INFORMATION CONTACT: (1:100,000 map only) areas will also be image of Victoria, and released. ¥ an updated gravity grid which includes a Phil Roberts, The major regolith material has been defined detailed traverse across the Bendigo goldfield. Manager Geological Survey of Victoria, in these areas and placed in a landscape con- The Honeysuckle Creek TEMPEST survey Tel. 03 9412 5035 text, with additional work on regolith geo- near Benalla has been reprocessed and

22 MAGNESIUM Latrobe Magnesium wins grant

atrobe Magnesium Ltd has been granted $1.4 million to help finance a bankable feasibility study into its L project to produce magnesium from the fly ash deposits of the Hazelwood power station, near Morwell in the Latrobe Valley. The grant is from the Commonwealth Government’s Sustainable Regions Fund. Latrobe Magnesium has to match the grant on a dollar for dollar basis while the Victorian Government is considering an application for matching funding. Magnesium production in the Latrobe Valley could be a major job creator for the region. In fact, the magnesium project and other envi- ronmentally sensitive projects may turn the Latrobe Valley into a new industrial boom area based around the development of what are being described as ‘industrial ecology businesses’. The concept involves the recycling of power generation, mining and other industrial waste into new products. study will be the forerunner of a major new Magnesium-rich fly ash deposits surrounding Industrial ecology involves a major step light metals industry for Victoria. the 1600 MW Hazelwood power station beyond the now common practices of recycling could form the basis of Victoria’s first paper and glass to make new paper and glass. The company is studying the potential for a magnesium metal smelting project. $800m magnesium plant to produce up to “Industrial ecology tries to transform waste 100,000 tonnes of magnesium metal a year. into value-added products,” says Dr John has an option to license Alcan International Victoria has already won a position in the Rankin, of CSIRO Minerals. Ltd magnesium production technology for the global light metals industry as one of the “The analogy is natural ecology where there is planned Latrobe Valley facility, to reduce pro- world’s major producers of low-cost alumini- no such thing as waste. In ecology, everything duction costs. um and is also poised to become a major play- gets used by every organism and recycled er in the titanium industry through the birth of The licence gives the company access to back so it becomes self-sustaining. the Murray Basin mineral sands industry. Alcan’s new dehydration technology which “If you apply that to industry, you get the Latrobe Magnesium says it hopes will help it To fund the two-year feasibility study, Latrobe same effect.” to produce up to 100,000 tonnes a year of Magnesium plans to raise up to $20 million high-quality magnesium metal for the lowest Formerly known as Rambora Technologies, through a rights issue. Latrobe Magnesium is hoping its feasibility capital costs and lowest production costs in Latrobe Magnesium managing director, Chris the world. Sylvester told Discovery that the company Latrobe Magnesium is aiming to reduce its mag- was still examining the best option for the nesium production costs to $0.75 cents a pound, rights issue. a cost far below the normal cost of extracting Global demand for magnesium is steady at magnesium metal from magnesite ore. just under 500,000 tones a year with modest A novel feature of the project is its proposed growth. use of fly ash, a by-product of brown coal The magnesium industry hopes for the 100kg combustion, which has a magnesium content car, ie: that all cars will use 100kg of magne- of up to 12 per cent and is thus a potentially sium, would lead to a significant growth in economic source of magnesium as it avoids demand to 5 million tonnes per year. the costs of mining and ore treatment. However, the automobile industry has not yet Mr Sylvester said,” We don't mine, we don't moved to this level and is keeping its options crush, we have no large ore treatment costs open. because ash can be pumped in. We will use all Latrobe Magnesium managing director, Latrobe Magnesium (through its wholly- the fly ash of the past, present and future.” The Chris Sylvester owned subsidiary, Magnesium Investments) Latrobe Magnesium project is based on five

23 MAGNESIUM

Magnesium metal is looming as Australia’s next major smelting industry. Lighter and stronger than aluminium, it could win important new markets in automotive and aeronautical applications. The Latrobe Valley’s fly ash deposits could be an important raw material for the industry.

million tonnes of fly ash deposits which has accumulated over many years around the Hazelwood power station. The plant produces an extra 200,000 tonnes each year. Magnesium extraction from the fly ash resource involves several key steps. Initially fly ash material is subjected to a straightforward acid leach process to separate the magnesium. The fine particle size of the ash material helps accelerate the leaching process. The solution containing the magnesium, which occurs as an oxide, is then dehydrated in the crucial part of the production process, which is yet to be commercially proven. Once dried, the magnesium chloride powder tial by capturing some of the carbon dioxide will be fed into a patented Alcan electrolytic emissions from the power station for transfor- LATROBE MAGNESIUM IS AIMING TO cell for reduction into magnesium metal. mation into calcium carbonate to be sold to The Alcan dehydration process has yet to be paper manufacturers as whitener. REDUCE ITS MAGNESIUM PRODUCTION proved as a commercial concept and Latrobe However, the Latrobe project faces consider- COSTS TO $0.75 CENTS A POUND, A Magnesium managing director, Rodney Foster able competition for a place in the global mag- COST FAR BELOW THE NORMAL LEVEL. says that the company plans to spend $2.77 nesium market with a number of other signif- million to commercialise the process. icant Australian magnesium projects vying for A pilot dehydration plant would be built in the investor dollars. second year of the study on the site of the Australia were high on the agenda at last In Queensland, Australian Magnesium is year’s Mining 2002 conference. HRL Ltd research facility near Morwell. building a plant at Gladstone while in South The chairman of Australian Magnesium Corp, Mr Sylvester says the plant is a crucial part of Australia, Magnesium International is close to Dr Roland Williams, told delegates that light the feasibility study and has foreshadowed committing to the development of the metals had a big future in Australia. raising additional capital to fund the process. SAMAG project. One of the main reasons, he said, was political The waste product of the fly ash material, after Another project, in NSW, is aiming to rely on stability, underlining that the terrorist attacks the magnesium has been extracted, is also its environmental credentials as well by utiliz- in the US and in Bali had emphasised the expected to become a useful product. ing high magnesium content tailings from the political risk element of making major invest- former asbestos mine at Woodsreef. Mr Sylvester said laboratory tests revealed ments such as in magnesium plants. that it could be used to produce high-quality Yet another concept in Western Australia A former Rio Tinto senior executive and min- bricks for the construction industry. plans to utilize magnesium in the brines asso- ing industry consultant, Dr Ian Gould, said ciated with salt production. Environmentally the Latrobe Magnesium con- that all the light metals, aluminium, magne- cept also has carbon dioxide reduction poten- Magnesium and its commercial prospects in sium and titanium were already or would become major industries for Australia. But he added that while Australia had been a world leader at the upstream mining end of the minerals and energy industries for many years, Australia’s industrial future depended on a greater move downstream into the miner- al processing and manufacturing end of the industry.

FOR MORE INFORMATION CONTACT:

Chris Sylvester Chief Executive, Latrobe Magnesium Tel: (02) 9940 3707 Mobile: 0411 077 034 Fax: (02) 9940 3708 Email: [email protected]

24 EXPLORATION Newcrest drills the Basin

old mining major, Newcrest Mining Ltd, has started a drilling program in the Murray Basin region of north- G western Victoria seeking substantial new copper and gold deposits. Using the latest interpretations of the regional geology, Newcrest is seeking repetitions of the similar geology to that which hosts the mas- sive North Parkes and Cadia copper-gold por- phyry-style ore bodies being mined in NSW. Newcrest is also attracted to the region’s poten- tial for major gold and base metal deposits because of the area’s volcanic rocks which bear striking similarities to the mineral-rich Mt Read Volcanics on Tasmania’s west coast and which host the Henty, Mt Lyell, Rosebery and Hellyer base metal and gold deposits. Newcrest’s Executive General Manager of Exploration Dan Wood, told Discovery that the company was operating in two areas, one near Horsham and the other south of the Grampians known as the Stavely area. Work in the Stavely area, which lies west of Lake Near Horsham, Newcrest has entered a joint Australia’s biggest independent gold miner, Bolac and south of Ararat near Glenthompson, is venture with Austpac Resources, which holds Newcrest Mining, is exploring the Murray Basin for focussed on a prospect named Thursday’s much of the region under exploration licence potentially large copper/gold orebodies located below the more recent heavy mineral bearing Gossan, a large, underexplored copper anomaly. seeking mineral sands deposits. This work sediments. Drilling has already begun in the region. Discovered by early generations of mineral could involve up to 100 air core and diamond explorers, starting with Western Mining, drill holes to drill through the veneer of Thursday’s Gossan lies on the Mt Stavely recently deposited sands and penetrate and indicated by regional and detailed aeromag- Volcanic Belt which stretches for over 50km sample the basement lithologies. netic surveys. south of the Grampians and lies mostly buried Altered volcanics were encountered in several under 40 to 100 metres of younger sediments. holes drilled earlier last year in the search for Newcrest has acquired the Stavely ground coarse-grained heavy minerals. from New Challenge Resources Pty Ltd, run Austpac says these volcanics have the poten- by respected Victorian geologist, Peter Legge, tial to host large porphyry-style gold-copper a former exploration geologist with WMC and deposits. North Ltd. The exploration program is the first stage Mr. Legge told Discovery that WMC had done commitment by Newcrest under the Horsham some broad-scale exploration over the area in joint venture which, if successful, requires the 1970s but, while discovering copper, lead Newcrest to sole fund all operations through and zinc traces, left the area as unprospective. to a decision to mine. US company Pennzoil followed up the WMC work in the 1980s, recovering a number of If the program continues to its planned con- copper, lead and zinc bearing rocks under the clusion, Austpac will retain a 10 per cent con- shallow cover material. tributing interest in any resulting mine, or may Drilling started in late November on the west- elect to revert to a two per cent net smelter The Geological Survey of Victoria then return royalty on production. mapped the region and discovered the similar- ern portion of exploration licence 4521 at ities between the Stavely volcanics and the Mt Horsham. Read Volcanics in Tasmania. Further similari- The drilling program, which is being managed FOR MORE INFORMATION CONTACT: ties between the North Parkes region porphyry by Newcrest, continued into January with ini- systems were also noted, exciting renewed tial results due in February. Mike Turbott exploration interest in the area. The exploration target comprises gold and Managing Director, Austpac Resources NL Newcrest plans to start drilling the area in late copper mineralisation within intrusive and Tel: (02) 9221 3211 February. extrusive volcanic rocks, whose distribution is

25 RESEARCH & DEVELOPMENT R&D boost for mining industries

he Commonwealth Government has ¥ A new CRC for Sustainable Resource ther consolidate Australia’s position as a announced a $68.5 million boost for Processing ($18.8m) which is aimed at world leader in the development and con- research and development programs eliminating waste and emissions from the struction of mining equipment. T focussed on Australia’s mining and minerals-processing cycle. ¥ A CRC for Greenhouse Gas Technologies energy industries. ¥ A mining and energy sector CRC ($27m). ($21.8m) which will work on ways to eco- The funding is being provided through the This centre will expand on the research and nomically capture carbon dioxide (CO2) national Cooperative Research Centres development by the current CRC for and store it underground, potentially offer- (CRC) program which is designed to bring Mining Technology and Equipment, to fur- ing industry new options for reducing CO2 together universities, research and govern- ment organisations, and industry in a co oper- THE NEWLY CREATED CRC FOR SUSTAINABLE RESOURCE PROCESSING, WHICH ative R&D effort to help turn Australian ideas into practical outcomes. WILL BE BASED IN VICTORIA, AIMS TO HARNESS THE PROVEN RESEARCH AND The new funding, spread across four CRCs, DEVELOPMENT TALENT IN AUSTRALIA’S WORLD-CLASS RESEARCH CENTERS. includes:

26 RESEARCH & DEVELOPMENT

emissions. This CRC has evolved from the existing, but more general, Australian The role of CRC’s Petroleum CRC CRC’s role Cooperative Research Centres (CRCs) bring together researchers from uni- ¥ The AJ Parker CRC for Hydrometallurgy versities, CSIRO and other government laboratories and private industry in long-term ($0.9m) will receive supplementary fund- research and development arrangements which support education and activities to ing to develop new technology transfer ini- achieve outcomes of national economic and social significance. tiatives in the extraction of minerals. Victoria will play a key role in the CRC for Established in 1990, the program enables collaborative arrangements between Greenhouse Gas Technologies. researchers and between researchers and research users in the private and public sec- The centre will study ways of controlling and tor. Its main objective is to maximise the benefits of publicly-funded research through commercialisation or utilisation of the outcomes of that research. capturing CO2 emissions and dovetails with the Government’s objective of reducing The structure of the program establishes strong collaborative links between researchers greenhouse gas emissions and maintaining and industry in order to create a multi-disciplinary, multi-institutional research envi- Australia’s economic growth. ronment focussed on addressing industry and user needs. The program will study, specifically, means of These collaborative links increase efficiency and cost effectiveness of research and capturing CO2 and storing it underground, a process sometimes known as geosequestration. research training and make better use of research resources through sharing of major facilities and equipment. The CRC will develop new technologies to capture CO2, identify geological sites suitable CRCs also provide an enhanced education and training environment by involving peo- for injecting the gas into the subsurface and ple from outside the university system in education programs and by offering degree carry out a demonstration project to store up and non-degree courses and training focussed on industry and other user needs. to one million tonnes of CO2. Sixty-two CRCs currently exist throughout Australia. These cover many areas of natural sci- It will also develop ways of using carbon diox- ence and engineering: manufacturing technology (11 centres), information and communi- ide to improve petroleum production or to pro- cations technology (7), mining and energy (8), agriculture and rural based manufacturing duce useful minerals and undertake a regional initiative to examine how a range of industries (12), environment (15) and medical science and technology (9). Most CRCs operate at can work together using geological sequestra- more than one site with R&D facilities located at more than 40 locations throughout tion to jointly decrease their emissions. Australia. Much of the research will be based in Victoria The latest round of funding, announced during December 2002, allocated more than and the Centre will work closely with some of $478 million to the program. the world’s leading research laboratories in the USA, Canada, Japan, UK and The Federal Science Minister Peter McGauran, said the work to be undertaken would help Netherlands. turn Australian ideas into innovations to support the nation’s vital economic, environ- mental and social development. The newly created CRC for Sustainable Resource Processing, which will be based in “The program will help Australia maintain a competitive position in leading-edge tech- Victoria, aims to harness the proven research nology by providing businesses with opportunities to work with research institutions and and development talent in Australia’s world- to focus on research relevant to Australia’s needs,” he added. class research centers. It will create a multi-disciplinary, innovative team covering the value chain from mine site It will develop technologies for capturing THE CRC WILL FIND ECONOMICALLY to industrial minerals and metals. value from the sector’s high volume waste The CRC will find economically viable ways streams, controlling toxic dispersion and pro- VIABLE WAYS OF ELIMINATING WASTE of eliminating waste and emissions by lifting viding step improvements in the most energy the eco-efficiency of existing operations, cap- and waste intensive processes. AND EMISSIONS BY LIFTING THE ECO- turing regional synergies in resource process- Since 1990, when the CRC program was EFFICIENCY OF EXISTING ing-intense areas and streamlining complex started, 18 mining and energy sector CRCs OPERATIONS, CAPTURING REGIONAL metallurgical supply chains. have been funded, spanning some world-lead- ing initiatives. SYNERGIES IN RESOURCE Left: Australia’s mining industry has already A laser plasma spectrometer was developed PROCESSING-INTENSE AREAS AND received a major boost through the work of by the CRC for Clean Power from Lignite existing Cooperative Research Centres, while the CRC for Mining Technology and STREAMLINING COMPLEX including the design of the innovative dig and dump dragline (pictured) which has Equipment created the ‘Universal Dig and METALLURGICAL SUPPLY CHAINS. revolutionised open-pit mining. Dump’ dragline for open-cut mines.

27 MINING NEWS Costerfield targets four more areas

he rich gold and antimony deposits around Costerfield, near Bendigo, have AGD MINING IS HOPING THAT T continued to produce encouraging results with more high-grade anomalies ADDITIONAL DRILLING WORK WILL discovered in the latest work. PROVE SUFFICIENT ORE TO JUSTIFY A AGD Mining Ltd says that the results from a START TO MINING LATER THIS YEAR. total of 574 air core holes drilled over sections of the 3.5 kilometre potentially mineralised Costerfield corridor had outlined four further exploration targets for gold/antimony mineral- The geochemical exploration program was isation. designed to test the bedrock ‘C’ horizon on line spacing of about 400 metres, with holes While assay results above 30 parts per billion drilled along the lines on 5m hole centres. (ppb) gold are regarded as anomalous for the Costerfield corridor, some samples assayed up The program also was to define additional to 340 ppb gold (Au), 1,300 ppb arsenic (As) near-surface gold targets along the 3.5 kilome- and 700 ppb antimony (Sb). tre main shear zone linking the old main workings at Costerfield and the new Augusta Assays of up to 2.8 grams per tonne Au were gold project discovery to the south. recorded in the quartz laterite horizon in the Prince of Wales zone, situated about 100 Historically, there has been very little modern- metres east of the main Costerfield corridor. day exploration conducted over this main cor- ridor apart from the Augusta area, which is Previous geochemical exploration on the already proving to be highly successful. Costerfield corridor resulted in the discovery Drilling at the Augusta Zone site, Costerfield. of the Augusta gold project (previously called A 15-hole diamond drill program was due to the MH zone) and the Costerfield region now begin during January to test the upper, oxi- has a discovered resource of around 290,000 zone of at least 500 metres. dised parts of the Augusta gold zone and extend the near surface strike lengths of the tonnes of ore grading 12 g/t gold and 6.2 per The Augusta mineralisation remains open on Augusta zone’s three orebodies. cent antimony. strike to the north and south. AGD Mining is hoping that additional drilling The company also has reported to the FOR MORE INFORMATION CONTACT: work will prove sufficient ore to justify a start Australian Stock Exchange that gold/antimo- to mining later this year. ny mineralisation has been identified in two Jurgen Debrodt, Company Secretary The latest exploration program has now possible extensions of mineralisation around A.G.D. Mining Limited extended the Augusta mineralisation 80 500 metres south of the main historic 175 Collins St Melbourne Vic 3000 metres south of the previous southern-most Costerfield workings in areas not previously Tel: (03) 9663 5355 www.agdmining.com.au diamond drill hole, giving a potential strike mined. LAKES TO DRILL TWO GIPPSLAND WELLS

lans by petroleum exploration junior, balanced’ drilling technology in a bid to AusAm intends to drill two wells, Trifon 2 and Lakes Oil NL, to drill two new gas release commercial gas flows from the tight 3, in February subject to the completion of the P exploration wells in the onshore part of reservoirs encountered when the original terms of the joint venture. the Gippsland Basin have been cemented Trifon 1 gas discovery was made. Earthworks for the extension of the original after its joint-venture partner confirmed it Water-based drilling mud damaged the forma- drilling pad have already begun. had secured an underwriting agreement for tion and caused the well to block, but the under- new capital for the project. balanced technique uses an inert gas as the FOR MORE INFORMATION CONTACT: AusAm Resources will raise up to $A12.5 mil- drilling medium to avoid formation damage. Robert Annells lion to fund the drilling of two new wells on The technique is used in thousands of wells Managing Director, Lakes Oil NL the Trifon prospect in Gippsland permits PEP drilled in the US each year and is considered a 156, 157 and 158. low-risk technique to stimulate gas from tight Level 11, 500 Collins St Melbourne Vic 3000 AusAm plans to utilise US developed ‘under- reservoirs. Tel: (03) 9629 1566

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