Noordin Mengal Speaks About Balochistan in An Interview With The Canadian Magazine, International Resource Journal

112 ASIAp Seeds of distrust
THE INTERNATIONAL
ResouRce JouRnal
JULY 2012 Volume 4 Issue 7 www.irjonline.com
IN THIS ISSUE ExclusivE intErviEw wEst africa Mongolia and

with MaplEcroft’s Mining KazaKhstan
JaMEs sMithEr
JULY 2012 pThe International Resource Journal 113
asia
112
Seeds of distrust
Noordin Mengal is an activist in pursuit of independence for
Balochistan, a mineral rich province in southwestern Pakistan
bordering Iran and Afghanistan.
the acRiMonious Relationship between leadership in Balochistan and

Pakistan’s ruling establishment in Punjab province and government centre,
Islamabad, goes back for generations. Mengal claims that members of his
family, many who occupied various senior roles in the Balochistan govern-
ment since the province was absorbed into Pakistan in 1948, have faced
harassment, imprisonment and duplicity.
Moreover, the human rights situation in Balochistan is becoming in-
creasingly violent as abuses intensify. Academics, politicians and other civil
society leaders have been found murdered with evidence of torture after
being detained by Pakistan’s military.
Amnesty International has urged the Pakistan government to investi-
gate these crimes against Baloch civilians, particularly as the human rights
violations take place against a backdrop of political unrest and Pakistan
army operations in the province.
The situation has also prompted a US Repub-

lican-led House Committee earlier this year to Baloch since 1948. We have highlighted these is-
- sues at the UN Human Rights Council, in Geneva,
nation amid vehement opposition from Pakistan. the European Parliament, British Parliament, at
Why is everybody so interested in this underde- universities, whatever forum is available to us.
veloped region, one of the poorest in South Asia?
Mengal explains it is because of the re- iRJ: The Pakistan government has said that the
gion’s natural resources and strategic geo- US House Committee’s encouragement of an
political location. independent Balochistan is meddling into affairs
IRJ talks to Mengal to gain greater insight that the US does not understand, how do you
into the underlying mechanisms that feed dis- respond to that?
trust between a region, its government and
neighbours, and how those mechanisms under- MenGal: If anyone has meddled into anyone’s
pin opposition to natural resource development. affairs or violated any country’s sovereignty, it is
Pakistan itself. We were an independent state
iRJ: Can you tell me a bit more about your role that was forcibly occupied on March 27, 1948.
in bringing attention to the challenges facing Before then, the proposal that Balochistan join
Balochistan? Pakistan on the basis of Islam was rejected in
both upper and lower houses and nine months
nooRdin MenGal: My role has been primarily after we gained our independent status, we were
to create awareness about the worsening hu- forcibly occupied by the Punjabis and incorporat-
man rights situation in Balochistan, not just the ed into what is today known as Pakistan. Now we
human rights violations being carried out by
Pakistan’s military but also the sinister role it is and independence. Pakistan, and Punjab in par-
playing in causing terrorism by promoting and ticular, have no right to deal with anybody with re-
abetting radical elements in the region as the gards to our natural resources or decide our fate.
military’s own strategic assets, to ultimately reap Human rights are not an internal matter. Ironi-
the rewards of the unrest. Pakistan is currently cally, when the Shah of Iran, who also oppressed
the Baloch in Iranian-occupied Balochistan, All state institutions, including the parlia-
- ment, judiciary and presidency, are subservient
ing direct air support to Pakistan in the military to the military. The incumbent so-called demo-
operation against the Balochs in 1970s, no cratically elected civilian government is an epito-
Pakistani saw it as foreign interference, but when me of politically impotent administrations that is
someone speaks out for the rights of the down- at the mercy of the Pakistani army. The military
trodden Baloch, Pakistan calls it interference in holds the levers of power and are the declared
its internal affairs. rulers of Pakistan since the country’s unfortu-
nate creation.
iRJ: The most recent Constitutional amend- Pakistan has occupied our land and has
ments in Pakistan have given the authority been systematically carrying out the social, politi-
over natural resource development to the pro- cal, cultural, physical and economic genocide
vincial governments, does this not give Balo- of the Baloch nation. Companies need to know
chistan enough control over which companies that any deal they make on Balochistan’s natural
it does business with? resources with this government is not meant to
last. Every successive government reverses the
MenGal: The Baloch remain disempowered and decisions of its predecessor, it’s a failed state
dispossessed. If we look at the human rights and many factors indicate that it clearly has no
situation, there is an oppressive military opera- future. The basic problem is that the future of the
tion ongoing and the powerless chief minister of Baloch people is not secure within Pakistan. No
Balochistan says he does not have the mandate to matter how good a deal might sound, we simply
change this and says that the Frontier Corps has won’t buy it anymore. We have constantly been
established a parallel government. Recently when deceived by the Pakistanis since the past 64
a senior provincial minister, Sadiq Umrani, held the years. We just want them to leave us alone.
FC responsible for disappearances and extrajudi- Companies that cut a deal with the central
cial killings, his younger brother was abducted to government over Balochistan’s resources need
silence him. If the provincial government cannot to realise that there are no guarantees to them
safeguard itself, what do they have authority over? for as long as there is no peace and stability. Any
PHOTO COURTESY OF BALOCHVOICE.COM
attempt to indulge will be seen with strong nega- adopting the same illegal methods. There is an old
tivity by the population. They will also be seen as relationship there, Pakistan has been the concu-
exploiters adding to our miseries. Such compa- bine of China, that is how I would put it.
nies may get the deal on the condition that they
remain silent on the oppressive policies of the iRJ: Companies that develop natural resources
state against the Baloch, as have the Chinese. often bring much-needed development such as
Why do you think Pakistan is more pleased schools, hospitals and infrastructure, would Balo-
with China’s political establishment? Why is it
happier to let MCC [China Metallurgical Group Cor-
poration] work on the projects? If you look at Reko MenGal: We have heard the word “development”
Diq, Pakistan wouldn’t be in favour of the western- most of our lives. There is a difference between
based Tethyan Copper [Antofagasta and Barrick development and exploitation. When Pakistan
Gold joint venture], they would be more comfort- says it wants to bring development, what they
able with the Chinese because they are content really mean is they want to exploit. A prime exam-
with Pakistan carrying out atrocities against the -
Baloch as they themselves are the immoral mas- ated by a state-run company. Gas was discovered
ters of plundering and have no problem with others in 1952 and today there are only a couple of dis-
tricts in Balochistan that have access to gas. The frastructure, the state’s version of development
capital [of Balochistan], Quetta, received gas in is constructing massive military garrisons, para-
1986, 34 years after it was discovered, and that military bases, naval bases, air bases, several
too only after a military garrison was stationed hundred checkposts, illegal detention and inter-
- rogation facilities and nuclear testing sites in
ciary with all its major cities receiving household Balochistan with US and European taxpayers’
and commercial gasiby 1964. money and revenue generated from our land.
It is the Punjabi military that has been given Their other sham developments have been to
the most priority, Balochistan consumes 12 per construct roads for billions to inaccessible areas
cent of its own production though it is the largest and penetrate into our system to facilitate the mo-
province accounting for 47 percent of Pakistan’s bilisation and stationing of troops in order to forcibly
total land mass What did the Baloch people tap oil and gas and establish garrisons to further
gain from the gas? What have the people of the subjugate the Baloch and promote fundamental-
district that pumps gas to the whole of Pakistan ists and the construction of madrassahs, to counter
gained? They still burn wood. All the dividends the secular Baloch movement and build a breeding
from the sale of Baloch gas are usurped by Pun- ground and safe haven for radical mullahs.
jab. There is no shining precedent of the Baloch Another crime they committed in the name of
development was the nuclear tests conducted on
The military has already been working directly our land on 28 May 1998, which has caused count-
on the Chamalang coals mines, said to be one of less diseases among the inhabitants of Chaghai
due to the radiation. When my uncle’s government,
get a hold of Reko-Diq by backing D. Samar Mubara- which wasn’t even consulted, protested against the
kmand. In 2009, when the provincial secretary for tests on Baloch soil, his government was systemati-
mines and minerals opposed granting an exploration cally toppled on June 15 1998.
lease for the Chamalang mines to military, he was The time for reconciliation is over, now our
critically injured in an assassination attempt soon demands are for nothing short of independence.
We have absolutely no future in Pakistan.
Instead of schools, hospitals and basic in-
iRJ: Some would point to a lack of skilled labour drilling, would that give them an unquestionable
among the Baloch population to work on these right to explore North Sea oil or the Hibernia oil
projects as part of the problem, for example, the
deep sea port in Gwadar on the Arabian Sea, a The Baloch fear that the port will cause a
highly strategic asset and one that could boost
the economy of the region considerably. What encouraged by the government to migrate to
do you say to companies that require skills and Balochistan for employment and will be used to
expertise to handle mega-projects like this? create a demographic imbalance and convert
the Baloch into a minority in their own homeland,
MenGal: I would say hold your horses, the Baloch given the Baloch’s small population – less than
require more than skills and technical expertise, 10 million compared to Punjab’s 91 million.
they need empowerment and the freedom to China’s political establishment has collabo-
decide their fate. Just like other projects, outsid- rated with Pakistan’s government in the con-
ers have come, the staff and labour is from other
parts of Pakistan, locals are not allowed access to too have contributed to our plight and alienation.
schools and hospitals, which are reserved just for We would have welcomed the building of a port
employees, and no efforts have been made to set but China did not take the Baloch national in-
up training facilities, polytechnic institutes or vo- terest into consideration, they did not take the
cational centres so that locals attain the required
skills. Gwadar port was a project pushed for many announced and dealt with Punjab and its civil-
years by the Baloch but the project was taken military establishment directly.
over by the Pakistan establishment and then they Before Gwadar port’s construction, those
painted an absurd picture that Baloch nationalists people who had land [in the area] had their
oppose development. It is the Pakistani establish-
ment that is not only a threat to the Baloch national cheaply by force. However, most of the land was
identity but also an impediment to peace, stability, allotted to military generals who subsequently
security and “genuine” development in the region. sold them in the open market, to fellow Punjabis
If the French had better skills for deep sea and Muhajirs and earned billions.
As long as it is occupied territory and as long as

people and we opposed it because we knew we don’t have our rights and are facing the situa-
- tion that we are, we would oppose not just multina-
ers and they would be given the right to vote tionals but also anyone else in Pakistan coming in
and elect non-Balochs had we allowed Paki- to extract our natural resources. Pakistan is steal-
stan to operate freely in Gwadar. ing revenue from our own soil that is then being
used to fund actions against us. Baloch national
iRJ: What message do you want to send compa- assets, including Gwadar, Sui, Reko-diq and Cha-
nies that are thinking of setting up shop? malang coal, have all been to exploit and expropri-
ate the Baloch of their wealth and advance Paki-
MenGal: It is not the time. They need to under- stan’s sinister agendas against the Baloch nation.
stand our concern and insecurity. At this point, The Baloch are struggling for the protection of their
they will be fuelling human rights violations national identity, for their survival. That is what is
against the Baloch and would be similar to the at stake for us. For as long as Balochistan remains
case of blood diamonds. They would strengthen occupied and Punjab’s hegemony continues, the
the hands of the oppressor and would also be Baloch will be in the grip of the Stone Age.
indirectly funding radical elements patronized by The issue of natural resources is one the
the Pakistani ISI[Inter-services intelligence agen- Baloch are deeply sensitive about. It must be
cy] who are a menace for regional and global noted that it was this bone of contention that
peace and security. They should not try to ben-
must not collaborate with oppressive and corrupt situation. No one wants that.
regimes in carrying out crimes against humanity. Now, there is the Iran-Pakistan pipeline being
Multinational companies should not see our pre- constructed without the Baloch nation’s consent.
dicament as an opportunity to make a buck. They The Baloch will not sit as silent spectators as
can wait and we expect them to act more respon- they are trampled upon and there will undoubt-
sibly. We will be willing to talk to them when the edly be strong political resistance to allow it
situation is conducive for business. through our homeland.
120 SECTION p Seeds of distrust
a BRieF histoRy
1666 Mir Ahmed Khan of Kambarani tribe independence. Pakistan
start Ahmedzai dynasty recognises Kalat’s sovereignty and
1749-1794 Reign of Nasir Khan and region congratulates Baloch.
named Balochistan 1948 In opposition to decision of Balochi
1839 British incursion legislature, Pakistan forces Kalat
1854 Nasir Khan’s successors defeated to be ruled by an agent of the
by British and treaty formed with Pakistani state. Troops enter the
Khan of Kalat to defend territories capital and forcibly incorporate
from Central Asian or Iranian Balochistan into Pakistan. Balochi
invasions nationalist defence continues under
1860s -70s Growing British interest to pre- Abdul Karim Khan until 1950. He
empt potential advance of Russia. A spends 16 of his remaining 22 years
period known as the “Great Game”. in Pakistani prisons on charges of
1905 Demarcation of boundary between sedition
British India-Iran and British India- 1952 Pakistan’s first oil field discovered
Afghanistan effectively divides near Sui
Balochistan among three states – Balochistan Union States
British India, Iran and Afghanistan established
1934 Armed struggle for liberation and 1955 Princely states in Balochistan
unification of Balochistan begins (Kalat, Kharan, Las Bela, Makran)
under Magsi, head of Baloch abolished
national movement 1958 Second uprising and retaliatory
1947 Pakistan becomes heir to British military operation
rule, Kalat state [Princely state 1962 Third uprising and military
of Balochistan] proclaims operation, which ended when
Pakistan’s army took an oath on the 1993 - 1997 BHP negotiates Chaghai Hills
Quran not to harm rebels and their Exploration Joint Venture Agreement
90-year old leader while promising (CHEJVA) with Balochistan province
amnesty and to accept demands. and discovers significant copper-
Imprisonments and executions gold deposits near Reko Diq
followed. 1995 National Mineral Policy
1970 Within Pakistan, Balochistan Saindak copper-gold project trial
province established production begins with operations
1971 East Pakistan breaks away, handed over to Pakistani state-
Bangladesh created backed company Saindak Metals.
1972 First elections won by Nationalist Bureaucratic squabbling delays the
Party led by Sardar Attaulah project.
Mengal, first chief minister of 1998 Nuclear tests were carried out
Balochistan despite protests of ruling nationalist
1973 – 1977 Large scale Baloch rebellion led by party in bal headed by Akhtar
Marri and Mengal tribes suppressed Mengal leading to the dissolution
by Pakistani forces with the help of of the legislature in 18 days
the Shah of Iran 1999 General Pervez Musharraf takes
1978 General Zia ul Haq comes into power in bloodless coup
power through coup, withdraws 2000 Tethyan Copper Co. established after
troops from Balochistan and project taken over from BHP and
releases Baloch leaders of China approached by Musharraf to
Nationalist Party from prison. fund Gwadar deep water port
Baloch leaders Marri and Mengal Septuagenarian Baloch leader Nawab
go into self-imposed exile. Marri imprisoned, but released a year
and a half later
2002 -Implementation of National Mineral -Thousands of Baloch flee villages

Policy and formulation of Balochistan attacked by Pakistani fighter jets
Mineral Rules and helicopter gun-ships. Large-
-China Metallurgical Group scale, government-organised
Corporation (MCC) gets 10-year kidnappings and disappearances
lease. 50 per cent of proceeds followed.
retained by MCC, 48 per cent by -Pakistani army kills Baloch leader
Pakistan’s government and 2 per Nawab Akbar Khan Bugti, Balochistan
cent by Balochistan’s government National Party resigns from
2004 Car bomb kills three Chinese parliament in protest BNP president
engineers on their way to Gwadar. -Akhtar Mengal imprisoned in
2005 Gwadar port completed on Karachi, released in 2008 soon after
schedule Pakistan Peoples Party comes into
2006 -Antofagasta and Barrick Gold form power and drops charges
a joint venture acquiring 100 per 2007 PSA International of Singapore gets
cent of Tethyan Copper Co. 40-year contract to run Gwadar port
-Chamalang coal mine agreement 2010 -18th amendment to the constitution
signed by Pro-government/ signed into law by President Asif
establishment Baloch Senator Mir Ali Zardari grants greater provincial
Mohabbat Khan Marri, elders of rights of exploration and production
Luni Pakhtun tribe and Government of natural resources, including oil,
of Balochistan gas, metals and minerals
-Baloch nationalist leader and 2012 -US Congressman Dana

head of the Marri tribe Nawab Rohrabacher, who chairs the
Khair Baksh Marri resists sharing US House of Foreign Affairs
coal reserves in tribal domain with Subcommittee on Oversight and
rival Pakhtun tribe and provincial Investigations, calls upon Pakistan
government. Claims that Khan Marri to recognise the Baloch right to self
was not empowered to sign the determination
accord as a competent authority. -Pakistani media reports that
Balochistan chief minister Aslam
2011 -MCC gets lease extension for Raisani stated the provincial
Saindak for another five years government itself would run the
from 2012. The lease was granted Reko Diq copper-gold project in
one year ahead of schedule and Chaghai and had allocated Rs7
renegotiated terms would see billion ($73.6 million) as well as
MCC receive 45 per cent of mine announced infrastructure reforms
proceeds, bumping Balochistan’s for Gwadar port access
stake up 5 per cent.
-Tethyan files arbitration
proceedings with the International
Chamber of Commerce (ICC)
in London after the Balochistan
government rejected its mining-
lease application
124 ASIA p Pawn or potential queen?
asia
aFGhanistan:
Pawn or potential queen?
It took decades for an agreement to get reached on the Turkmenistan, Afghanistan,
Pakistan and India (TAPI) gas pipeline but commitment to bring the project to life
in the spirit of what is written on paper is going to be a tougher test yet.
Regional actors such as China, Iran, Russian and Pakistan may not see TAPI fitting
their strategy in the region and therefore may work to engineer its collapse against a
backdrop of geostrategic competition, writes Javed Noorani.
124
Wilson International Centre for Scholars says that

Pakistan’s rather static oil, hydroelectric power
and gas reserves have raised serious concerns
as to the sustainability of the current economic
expansion, as well as future economic growth.
The gap between Pakistan’s energy use and the
country’s ability to produce energy has widened
in an alarming way in recent years.
Games and players

The politick around the region’s gas reserves in
general and the TAPI pipeline in particular have
JAVED NOORANI both local and global actors gate-crashing to shop

for the commodity and vie for associated projects.
the tapi Gas pipeline is an ambitious project
which is set to connect the religiously and ethni- prominent place within the NATO strategic dis-
cally diverse geographies of South Asia with Cen- course. As NATO continues its transition from a
tral Asia, propelling them into gas-fuelled econo- Cold War military alliance, energy security is play-
mies. At one end of the pipeline is Turkmenistan, ing an increasingly important role. NATO states,
a former Cold War era Soviet bloc still heavily being the most developed countries with strong
industrial bases, would continue to have the larg-
project is emerging regional power, India, an at- est demand for oil and gas to sustain their eco-
tractive market for gas. nomic engines. Saudi, a traditional oil supplier
Pakistan is undergoing economic expansion to NATO countries, still has 20 trillion barrel of oil.
and to continue this trajectory, it requires suf- NATO states, which consume 43 per cent
of total oil and 42 per cent of gas production,
have been raised due to availability amid rising will undoubtedly continue to receive oil from the
global demand for energy. Middle East but a sense of energy security also
Robert Looney in his essay for the Woodrow dictates its shopping excursion into the huge
The country’s reserves appear to run dozens of kilometres, estimated to be

the gamut of mineral types. The north worth some USD 200-400 billion at today’s
has proven fields of coal, oil, gas, gold, market prices. There are also gold- and
copper, precious and semi-precious gems; nickel-bearing areas sprinkled across the
the border with Pakistan in the east is hinterland.
likewise dotted with troves of emerald, Source: Integrity Watch Afghanistan
ruby, aquamarine, kunzite, quartz, marble Integrity Watch Afghanistan (IWA) was
and lithium. The central provinces created in October 2005 and established
enjoy iron, chromites and lithium (the itself as an independent civil society
latter a mineral with a significant new organisation in 2006 with the aim of
potential market, due to its use in high- evolving into a reference actor committed
end batteries); while the southwest has to understanding, analysing and
potentially significant oil, gas, gold, acting in the interests of transparency,
uranium and onyx deposits. The southern
part of the country, meanwhile, is said to
have copper and gold veins that run for
Caspian gas reserves to keep alternative energy exports - such as a deal to supply 30 billion cubic
sources. However, the Caspian region is still seen feet of gas to China, some to Iran and export to
Kazakhstan though Russia - Turkmenistan has
The four Caucasus and Central Asian states, committed itself to pipeline some gas to Euro-
namely Azerbaijan, Kazakhstan, Turkmenistan pean Union too. Not surprisingly, the US and
and Uzbekistan, produced 4.7 trillion cubic feet European Union support Turkmenistan’s policy of
of gas, representing four per cent of the world’s multiple export routes.
total production in 2010. The Russian federation China, India, Pakistan and Iran are locked
possesses 24 per cent of the gas reserves and into energy competition due to their industrial
largely dominates the gas market in the Caspian needs. China and India have growing economies
region to maintain its hegemony and thus use it which make energy an important element of their
as a diplomatic tool. strategic imaginations. Pakistan’s energy needs
Despite over-committing itself to various gas are increasing by 10-12 per cent annually.
Chinese assurance to the country? It is hard to

Companies developing
Afghanistan’s resources: imagine that it would otherwise invest so much
money in a pipeline that still does not have a con-
China’s MCC at Aynak copper mine
Kilo Goldmines and Indian-led
if India, the other buyer Iran is trying to attract,
steel company consortium at
opts out of the project under heavy US pressure
Hajigak iron ore deposit
China National Petroleum at Amu underpinned by the Indo-US nuclear deal.
Darya oil and gas basin This leaves China, which has already made
Western-backed consortium led by
Kulczyk Investments and facilitated
shadow of the US-led Western isolation of Iran.
by JP Morgan developing gold
Dr. Christian Lin, visiting scholar at SAIS Cen-
project in Baghlan province
tre For Transatlantic Relations, The John Hopkins
University, writing about China’s silk road strate-
gy in Afghanistan-Pakistan, states that China has
Isolated Iran is the third largest importer invested over US$25 billion in the last decades
of gas despite and has the second largest gas
reserves. Now, cash-strapped, it urgently needs projects such as onshore Azadagan and Yada-
varn and offshore South Pars, with the clear
programme as the country’s political establish- intention of increasing its oil and gas supply with
ment seeks regional power status. As a result,
the country’s leadership has desperately been piped gas imports from Iran. So, if Pakistan agrees
trying to showcase Iran, Pakistan and India (IPI to the Iran-Pakistan gas pipeline project, then it ef-
) gas pipeline as a more economical and viable
alternative to TAPI. Iran has already completed
over 80 per cent of the work on the IPI pipeline Check and block
running through its territory and has even offered TAPI is promoted by the US to stop IPI and potentially
IPC [Iran Pakistan China pipeline] if China is looped
in as an end consumer for Iranian gas. This, along
the (IPI) pipeline underpinned by Russian and with other economic sanctions, may synergise to
ReGional status
The regional aspiration of India and its
Pakistan has been eyeball to eyeball with energy needs magnify the importance
India over territorial disputes for six of sustained supply of gas for its large
decades, prompting an arms race which industrial consumptions.
takes important resources away from the

countries impoverished citizens even as it Turkmenistan has 21.2 trillion cubic feet of
stays armed to the teeth. recoverable gas and India offers the Turkmen
gas a sustainable market and an opportunity
Meanwhile, Afghanistan is in the firm grip to loosen Russia’s monopoly grip.
of political instability and insecurity but

will be a key facilitator for the pipeline
through 730km of its territory.
throttle the Iranian nuclear program and engineer

the collapse of the Iranian regime internally. And desperately been trying to cling to China and is
ready to twist itself to keep its friendship intact to
monopoly over Caspian gas while ensuring sustained survive and sustain.
energy for US investment in India - considered a It is possible that Pakistan’s heightened
strategic partner in a new world order. needs for energy security and its isolation by the
US will push the country closer to IP gas pipeline
the polarisation of the international structure which may eventually become Iran-Pakistan-China
itself. Recent US and Pakistani disputes over (IPC) pipeline. Iran joining Pakistan and China will
NATO attacks on Pakistani army posts at the effectively lead China to navigate around India
border of Afghanistan often lead to suspension and thus, not only complete the triangle but allow
of transit facilities to NATO trucks transporting Iran to emerge as an actor with greater strength to
goods through Pakistan for international military threaten the world with a blockade in the Strait of
forces. There have been consistent voices in the Hormuz. It is a powerful bargaining chip.
US Congress against partnership with Pakistan in China’s energy needs are driven by its rapid
natuRal Gas pRoVed

economic growth. “The principle concern over en-
ergy security in China is the perception that the Nigeria 3%
Chinese economy is highly dependent on a stable Venezuela 3%
supply of energy and cannot tolerate the slightest
United Arab Emirates 3%
interruption or shortfall,” writes Zha Daojiong, an
associate professor of international relations and US 4%
chair of the Department of International Political
Economy at Renmin University of China.
Saudi Arabia 4%
world’s natural resources, this situation is inten-

Central
sifying. China has put its stamp in Sudan against Asia
7%
the wishes of Western countries and it has so far
turned a deaf ear to international concerns over
Quatar
Iran’s nuclear programme. 13%
about China’s indifference and stated that China has

appeared even more reluctant than Russia to take
action against Iran on its shrouded nuclear program.
development of TAPI. Afghanistan is not secure
that China has blocked their efforts to target freight- which could be used as an argument by some
forwarding companies based in Hong Kong that of the countries participating in the project to
reship goods, including prohibited weaponry, to Iran, withdraw altogether. The Iranian political estab-
according to media reports. As such, US efforts to lishment may magnify insecurity in Afghanistan
promote TAPI based on its geo-strategies will be met to expedite this withdrawal of participating coun-
with suspicion by global superpower China. tries in TAPI and open itself to sell its own gas or
be a transit country.
TAPI checkmate? There is suspicion of Iranian agents active
The odds in the current scenario are against the in the areas of Afghanistan demarcated for TAPI
d ReseRVes (2009)
Africa, Asia and Latin America, may not like its main
-
Source: BP Statistical Review
of World Energy 2010 cording to US self-interest. China may play to stop
India its rival from accessing gas through TAPI. It
will be able to buy extra gas from Turkmenistan to
address its energy insecurity cost-effectively and
supply some of it to its xingjaing province, with
some rebellious Muslim population thus stabilising
Russian
Federation the region through industrialisation and connect-
24%
ing it to the Silk Road. To this end, Kashgar, part
of xingjaing, is one of those areas where a Special
Economic Zone is being established.
Pakistan, in the light of its long term interest
and fear of dependence on Afghanistan, may opt
Iran
16% for the Iranian pipeline to have access to reliable
gas supply and earn some money in transit.
Besides this, the Iran-Pakistan gas pipeline
will give the two countries cover to suppress the
people of Balochistan, who have roots in and
pipelines. Sources in Afghanistan’s south have disputes with both countries. TAPI will collapse in
on numerous occasions reported that senior such a situation where all the major regional ac-
members of Sepah Passdaran (The Iranian Revo- tors excluding India team up together against it.
lutionary Guards) have visited some provinces Such an event will rob Afghanistan of the chance
along planned pipeline routes. There has been for the project to contribute to the country’s sta-
evidence of Iranian weapons seized by interna- bility through investment.
tional militaries based in Afghanistan, though it
- At stake
ed countries are ubiquitous. Afghan hydrocarbon experts from the 1980s
China, in its aggressive campaign to reach pointed out that Afghanistan’s northern geology
inteRnational eneRGy outlook cent between 2008 and 2035, representing
2011 an average annual growth rate of 1.6 per

cent
Sidebox:
China and India together will consume 31
A Soviet survey of gas in Afghanistan
per cent of the world’s energy in 2035, up
compiled the following deposits of gas in
from 21 per cent in 2008.
the country. However it needs to be borne
By 2035, China’s projected energy
in mind that the figures show only the
consumption is 68 per cent higher than US
minimum reserve potential.
energy consumption.
The proven gas deposits in Afghanistan
Global energy consumption grows 53 per
S.No Kind of Energy Region Quality Billion Cubic Feet
1 Gas Aqcha 300

2 Gas Umalik (Char Bolak ) 500
3 Gas Elikrabt (Aqcha) 500

4 Gas Shakhi Bel and Shamala Andkhoy 500
5 Gas Ashraf and Darwaz Qader 1000
6 Gas Shakhmala 500
Engineer Sadiq Niazi)
Tajik basin was subjected to intense seismic

Turkmenistan. There is every likelihood that Af- surveys using latest technologies to peep into
ghanistan’s gas reserves will compare and even underground formations. Reliable sources
rival Turkmenistan’s resources. following the survey, shared on condition of
The United States Geological Survey (USGS) anonymity, say that the early sign from the
carried out two surveys to identify the mineral seismic survey show presence of huge gas
resources of Afghanistan with the second deposits in Afghanistan. Another source said
identifying 12 potential sites. The Afghan- that Afghanistan could have better reserves than
Turkmenistan. No doubt, the discovery of the by Canadian energy economist John Foster
gas in Afghan-Tajik Basin will rekindle hopes of writing in the Energy Security Journal.
stability and security once again. Some sources,
on condition of anonymity, said that the USGS Pawn’s promotion?
had estimated gas reserves in Afghanistan’s Pinning so much hope in TAPI without under-
north to be 25 trillion cubic feet. Moreover, the standing the regional giants which will at all costs
country may be home to reserves in Katawaz seek to secure their interest is a giant misstep
basin in the southeast. and a potential tragedy for Afghanistan. Though
With these kinds of deposits, Afghanistan -
can turn into a regional gas-bazaar and qualify to tries at the moment, the shifting geopolitics may
join the elite gas suppliers club. Chevron’s inter- take regional actors away from the project.
est in the Afghan-Tajik basin and China’s Nation- A more prudent path for Afghanistan would be
al Petroleum Company’s eye-catching contractual to explore its own gas to supply to its households
terms in favour of the Afghanistan government and industries and encourage indigenous invest-
for the Amu Darya oil deposits in the north of the ment. Gas can also be used for electricity genera-
country are clear signals that there is more to tion and presents tremendous export potential.
invest in a mere 87 million barrels of oil. Some Afghanistan than building its own mines and under-
sources say Tajikistan has already been using standing its neighbours’ strategies, which is critical
diplomatic channels to bid for Afghan gas. to avoid being trapped into their game plans.
Failure of TAPI will amount to US failure in
Afghanistan. One of the reasons for the US to
put boots on the ground was to ensure the TAPI
pipeline was made possible; US-based Unocal
was competing with Bridas, a Brazil-based oil
to Congress and said that such a pipeline was

not possible unless an internationally recognised
government was put in place in Kabul, as stated
Metals Exploratio
Full steaM ahea
134
With construction activity gearing up for full swing, Metals Expl
next step is to announce project financing to get its Runruno go
in the north Philippines into production
asia
on
ad
loration’s
old mine
136 ASIA p Metals Exploration
“This project is on the cusp of being developed, there have been very few
new programmes that have actually been financed so we are a stand out
and we are going to kick that goal” – Ian Holzberger
Metals exploRation is going full steam ahead “Because we are using biological leaching the
into the construction phase of development, process becomes hydrometallurgical…lab work
suggests it will work for us to recover that moly, but
pushed until a full funding package is in place, because it is a novel process, we don’t want to com-
which Ian Holzberger, chairman and project direc- promise the main game, which is gold,” he says.
tor at Metals Exploration, expects to announce in Biox, the biological leaching process tech-
the coming weeks. nology that Metals Exploration will be using
“As soon as the drawdown is available on at its plant, is the intellectual property of a
subsidiary of South African miner Gold Fields
into full construction and the trigger on that is and is one of the many partners the company
really the construction of the processing plant, is working with as it upgrades basic infrastruc-
which is ready to go and we have already started tures in its operating region.
construction for the plant pad,” Holzberger says.
Feasibility and optimisation studies show an Improvement partners
average annual production of 96,700 ounces -
(oz) of gold over an initial mine life of 10.3 years provement in the local area, adds Holzberger.
at an average operating cost of $477/oz while “While there are roads and power already
the internal rate of return is expected to be 42 available, it needs to be upgraded and part of our
per cent at a $1,500/oz gold price. development plan is leveraging off that to improve
The area is also home to some 25 million it. This will cut our costs but also it will improve local
pounds (Mlb) of molybdenum, which Holzberger conditions so it is a double win for us,” he says.
explains could be a future credit story though the Although Leighton is the primary contractor on
company’s key focus is getting gold into produc- site tasked with building the processing plant, most
additional contractors are from the Philippines.
138 ASIA p Metals Exploration
METALS ExPLORATION BAGGED THREE OF THE MOST COVETED AWARDS IN THE MINING INDUSTRY INCLUDING 2011 PRESIDENTIAL MINE
GEOLOGICAL, EXPLORATION AND DRILLING SUPPLIES
GXD was established in the Philippines to provide services to the Construction, Geological,
Exploration and Mining industries. Since the conception of the company we have emphasized
delivering quality and reliable services and materials to the industry. All the products and
services that we provide have been the best available in the market and supplied directly to
our clients from the manufacturer with the necessary backup the industry demands.
GEOLOGICAL, EXPLORATION & DRILLING SUPPLIES

AFP-RSBS Industrial Park, KM-12, East Service Road cor C-5, Taguig City, 1630 Philippines
Ph : 63 2 866 1033 | Fax : 63 2 866 1036 www.gxdsupply.com
“This project is on the cusp of being devel-

oped, there have been very few new programmes
stand out and we are going to kick that goal,”

Holzberger says.
Broker’s view
At its most recent AGM, the company lost one
of its non-executive directors, Jonathan Beard-
sworth, who did not stand for re-election. Though
this was unexpected, observers note that it may
not be too surprising since Beardsworth had a
ERAL INDUSTRY ENVIRONMENTAL AWARD

their managing director in Asia.
John Meyer, analyst at Fairfax noted that
“We like to work with indigenous contrac- Beardsworth’s commitments left little time for
tors that have the capacity and skill, so the other roles.
benefits are captured into the local and ex- “The current challenge for Metals Exploration
tended area rather than using offshore con-
tractors,” Holzberger adds.
Over and above that, Metals Exploration uses
several consulting groups as well such as Austra- future and expect the team to be in the UK in the
lian-based GHD Consulting. next few weeks to report on the mine develop-
Though it is likely that there will be further ment and exploration progress.”
permitting which will be required, major permits Meyer adds that further exploration in the
and licences have been approved, which has area shows additional bulk mining opportunities
become one of the main concerns for operations with good grades and near surface tonnage.
that are only beginning in the Philippines as the
www.MetalsexploRation.coM
news in ReView
clontaRF in talks on peRu oil and Gas
opeRations
iRJ - June 13 - UK-based oil and gas explorer Clon-
tarf is in talks with a number of joint venture and
strategic partners over its 100 per cent owned
exploration blocks in Peru.
One of the blocks in question - Block 188 - lies
which has a resource of 16 trillion cubic feet and

880 million barrels of oil (mmbbl).
Block 188 includes the Panguana well which
was drilled to a depth of 2,750m striking oil with
37api by Phillips Petroleum in 1999. The company
believed that Panguana’s Green Sandstone struc-
ture held 31mmbbl of oil.
Once a partner is secured, Clontarf plans to
re-enter the structure with an appraisal well to
to early development.
“Block 188 now looks much nearer to de-
velopment than we previously thought. Investor
attention had been on Ghana, where [Clontarf] is
-
cus is now on Peru. The securing of a JV or strate-
gic partner on either Block 188 or 183 could lead
AUGUST 2011 pThe African Business Journal 141
Emerging and frontier jurisdictions
current depressed lows. The market cap remains

at just £7m, which seems too low for an oil and
gas company that could be close to advancing a
sizeable asset,” said Jason Robertson, analyst at
Optiva Securities.
pRiVate equity Bets on oil exploRation

technoloGy
iRJ – June 12 –
and technology investment company JMI Equity
have agreed to buy software group Paradigm for
around $1 billion.
Paradigm, whose analytical technology is tar-
geted at oil and gas explorers and producers, was
last bought by US investment group Fox Paine for
around $100 million in 2002.
strong tailwinds in the coming years as energy

companies look to drill in more challenging loca-
tions,” said Apax senior partner Ian Jones.
Apax was advised by Bank of America Merrill
Lynch and Simmons & Co; Paradigm was advised
by UBS and Royal Bank of Canada.

142 SECTION p Title
news in ReView
By the middle of 2013, the miner aims to said the offer had come “from one of the Russian
triple its current Pilbara production capacity of 55 state companies”, but would not specify whether it
million tonnes. was Rosneft or Gazprom.
The equal joint venture with Russian oli-
Bp consideRs oFFeR FoR Russian JV stake garch consortium Alfa Access Renova, led by
iRJ - June 1 - BP will be pursuing a potential sale of -
its shareholding in TNK-BP after receiving unso- tuated by Fridman’s recent resignation as chief
licited indications of interest. The company added executive of TNK-BP.
that there is no guarantee a transaction will take TNK-BP was formed in 2003 as the result of
place. the merger of the oil and gas assets of the two
The Financial Times said a sale could fetch up partners. It is vertically integrated with a diversi-
to $30 billion and cited an unnamed source who -
sia and Ukraine and international interests in of the UK…Today’s deal between EnQuest and
Brazil, Venezuela and Vietnam. KUFPEC, bringing up to £300m of foreign invest-
ment into the North Sea, proves that the UK
kuwait to inVest $500M in uk noRth sea oil Field continental shelf remains an attractive prospect.
iRJ - May 30 - Enquest will farm out a 35 per The Government will continue working with the
- industry in the North Sea to get the most of what
opments to Kuwait Foreign Petroleum Explora- is a huge national asset.”
tion Company (KUFPEC) for a total investment of
$500 million in cash. anGloGold takes Full owneRship oF BRazilian
Mine FoR $220M
iRJ - May 29 - AngloGold Ashanti is set to acquire
UK North Sea. Alma was previously abandoned the remaining 50 per cent stake in Mineracao
because of high water content of output. First Serra Grande in Brazil from Kinross for $220 mil-
production is anticipated in the fourth quarter of lion. The transaction will be funded from existing
2013, with peak gross production of over 20,000 cash reserves and debt facilities.
To date, the Serra Grande mine has pro-
million barrels of oil. duced 3.4 million ounces (Moz) of gold. Last
According to the Financial Times, Amjad year, the mine produced 134,000 ounces of gold
Bseisu, chief executive of EnQuest, said the talks at a cash cost of $767 per ounce. Over the past
began last year with partners over investing in the four years, more than 1Moz of mineral resources
$1bn project but were held up until tax breaks have been added.
Commenting on the deal, chief secretary gives us greater exposure to Brazil, where we’ve
to the Treasury, Danny Alexander, said: “This is
good news for North East Scotland and the whole as well as our reserve and resource base,” Mark
144 SECTION p Title
news in ReView
Cutifani, AngloGold Ashanti’s chief executive, said.
“We see long-term, lower risk, potential from Serra
Grande, which is a key component of our strategy
to grow the contribution from the Americas.”
The operation comprises three under-
ground mines and one open pit mine as well
as a processing plant.
codelco chieF ResiGnation May sMooth

anGlo dispute
iRJ - May 25 - The resignation of Diego Hernández,
chief executive of Codelco, could be positive for
negotiations over the ownership of the Anglo Sur copper production but so do Anglo and there
copper division in Chile. Hernández cited “person- should be some middle ground in discussions,”
al reasons” for his departure and there were ru- said John Meyer, analyst at Fairfax.
mours that he had not been aligned with the rest Los Bronces capex is $2.8 billion with pro-
of the company’s board. Finance director Thomas duction expected to be at 278,000 tonnes of
Keller will take on the chief executive role. copper per year and full production anticipated
The move comes as Codelco and Anglo Ameri- in the third quarter this year. Codelco had tried
can agreed to restart talks over the ownership of to exercise an option to purchase 49 per cent
assets in Chile, including Anglo’s Los Bronces mine. of the Anglo Sur division, which includes the
“Codelco’s previous stance taken very publi- Los Bronces mine, but the move was blocked by
cally by their CEO was not particularly helpful Anglo American in an increasingly bitter dispute
given the scale of investment being made by An- between the two mining giants.
glo into Los Bronces. Codelco need to grow their
ability of raw materials from Indonesia appear to

have subsided for the moment,” said Leon West-
gate, analyst at Standard Bank in a note.
The announcement in May sent Japan and
China scrambling to secure alternative supplies of
raw materials, particularly bauxite and nickel ore.
Indonesia is also the world’s top exporter of tin.
GlencoRe take MaJoRity contRol oF dRc

coppeR Mine
iRJ – May 22 - Commodities trader Glencore said
today that it has taken majority control of its
oRe expoRt appRoVals MoVinG in indonesia Mutanda copper mine in Democratic Republic of
iRJ - May 23 - - Congo by paying $340 million to acquire a fur-
al export approvals start with reports suggesting ther 24.49 per cent in Samref Overseas, a hold-
ing company above Mutanda, and another 1 per
of three approvals needed to export ore, reports cent in Samref Congo, a second holding com-
Standard Bank. pany, taking its whole equity interest in Mutanda
On May 6, Indonesia banned exports of 14 raw Mining to 60 per cent.
minerals with an exception for miners that plan to
build local processing facilities. However, a tax rate step towards achieving Glencore’s previously an-
of 20 per cent will be applied to ore shipments. nounced intention to merge the Mutanda and Kan-
“It will be interesting to see how long it takes suki mining operations,” Glencore told Reuters.
before exports resume properly. For the moment Mutanda and Kansuki combined will produce
however, some of the concerns regarding avail- 160,000 tonnes per year of copper cathodes and
146 SECTION p Title
news in ReView
ing agreement, which is for seven years at a bor-
half of 2013. Glencore’s plans have led it to also rowing cost of 11 per cent, will be in place by the
acquire around $140 million of shareholder debts end of July 2012.
as part of the deal. “The mine plan shows a deeper level of min-
The announcement comes in the midst of the ing and longer development time – this is posi-
much anticipated $90 billion “GlenStrata merger tively offset by block cave economics with longer
of equals”. block cave life and higher grades providing for
According to the Financial Times commodities
note, long only funds have been spotted buy- adding that the technical mining and processing
plant have been subject to in-depth review by SRK
per cent on May 24 when some 36 per cent of Consulting.
shares come off lock-up. The implication is that Maiden run of mine production is expected at
index linked tracker funds will be buying the Swiss around 8 thousand carats (kcts) supplemented by
trader as it gains a greater weighting in the FTSE, tailings reprocessing that is expected to produce
putting the company in a good position to see the around 15kcts in 2012 and 30kcts in 2013. Lace
merger voted through. will reach full production by mid-2014 producing
300kcts from both tailing and run of mine produc-
idc Backs diaMondcoRp’s lace Mine with $33.6M tion, according to Northland Capital Partners.
loan DiamondCorp owns 74 per cent of the Lace
iRJ - May 21 - DiamondCorp has signed a term diamond mine with the remaining 26 per cent
sheet with South African state-backed Industrial held by the company’s Black Economic Empower-
Development Corporation (IDC) for a $33.6 mil- ment (BEE) partners.
lion loan to develop the Lace Mine in Free State DiamondCorp CEO, Paul Loudon said: “The
province. key driver for management in seeking funding for
-
nsl BecoMes FiRst FoReiGn iRon oRe pRoduceR

in india
iRJ – May 18 – Perth-based commodity company
the Indian domestic market, marking its transi-

tion into a producer.
It is now the only foreign company to own and
operate iron ore mines in India.
NSL managing director Cedric Goode said
company has had to overcome many challenges.

“Our journey is only just commencing as we
- progress through completing phases 1 and 2, to
tive for shareholders of the company. Therefore, utilising our experience and actual performance to
we are delighted that we and our [BEE] partners lift NSL to its desired 1.5 million tonne per annum
- (Mt/y) target by the end of 2014,” he continued.
ing proposal from the IDC to provide over 98 per “This target being possible through bolt-on
cent of the estimated capital required to establish wet and dry separation plants to increase output,
a block cave development on the 47 level at the together with sourcing additional ore feed through
- strategic acquisitions and supply agreements.”
mondCorp’s transition from developer to producer The company is currently constructing and
and we welcome the support of the IDC in funding commissioning the Phase 1 Kurnool iron ore dry
this potentially long-life diamond mine in the Free separation plant, which will be capable of pro-
State Province.” ducing up to 58 per cent Fe grade ore.
148 SECTION p Title
news in ReView
NSL expects to begin gradually ramping up
production and sales tonnages towards Phase
1’s target production capacity of 200,000 tonnes
per annum (t/y) in the third quarter.
The dry separation circuit is expected to un-
Phase 2 of the project will comprise the
and 62 per cent Fe.

This plant is intended to double capacity to
400,000t/y and is scheduled for completion in
“With the increase in funds being allocated

to infrastructure projects, Indian domestic steel
production is expected to increase from 77Mt to
200Mt by 2020,” Goode added.
“The company looks forward to making its
contribution as part of this growth.” opens an extensive new play fairway within the
Group’s offshore acreage in Blocks 1, 3 and 4, to
FiFth consecutiVe tanzania Gas discoVeRy complement the now proven Tertiary fairway.
iRJ – May 17 - Preliminary evaluation of the results indi-
consecutive Tanzania gas discovery with the cates 55m of natural gas pay in good quality
Mzia-1 exploration well located in Block 1, off- sands. An extensive logging programme has
- been completed, including the acquisition of
covery within the deeper cretaceous section and pressure data and gas samples.

der evaluation. Prior to drilling Mzia-1, BG had es-
timated mean total gross recoverable resources
approaching seven trillion cubic feet of gas from
the four previous discoveries drilled in Tanzania.
Mzia-1 is approximately 45km offshore south-
ern Tanzania in a water depth of 1,639m. It is some
23km from the Jodari-1 discovery and is part of the
2012 three-to-four well exploration programme.
Following the imminent completion of opera-
tions at Mzia, the Deepsea Metro-1 will relocate
to Block 3 for the drilling of the next exploration
prospect, Papa-1.
BG Group as operator has a 60 per cent
interest in Blocks 1, 3 and 4 offshore Tanzania,
with Ophir Energy holding 40 per cent.
of adjacent cretaceous prospects, which could

form part of a future Mzia hub. These prospects
are expected to be tested in a future appraisal
of data from this new well and 3D seismic.

The new resources proven by Mzia and the
potential of adjacent prospects are currently un-
150 LATIN AMERICA p What went wrong with YPF
150 what went w

A risk management perspective of analysts tend to consider Argentina’s action as
Argentina’s nationalisation of resources arbitrary and a product of ‘resource nationalism’,
comparing it to Venezuela or Russia. However,
Repsol’s forced divestment of its YPF those same analysts forget Norway’s nationalisa-
subsidiary by the Argentine government tion of oil in 1972, among other cases.
is a perfect example of the kinds of factors That is not to say that a nationalistic compo-
which lead to forced nationalisation, writes nent is not a factor but Argentina’s history is well
Jorge Vrljicak, Buenos Aires-based analyst known. YPF and the oil issue were at the centre
for Westside Consultants. of 70 years of political storms in the country even
prior to the start of the 1990 privatisation pro-
ypF’s FoRced nationalisation is a backlash against
its 1992 privatisation because the market reform Meanwhile, there are still simmering tensions
over the image of “Spanish Conquistadors”, who
In essence the end result is not very differ- would grab and remit to Madrid anything they can lay
ent from BP’s Gulf oil spill case - the corporation their hands on. This particular factor led to the un-
has only itself to blame for the outcome. Many fortunate 2008 nationalisation of Argentina’s airline,
latin aMeRica
wRonG with ypF

Aerolineas Argentinas, owned by Spanish Marsans -
Group, which was also privatised in the ‘90s. servedly rich in a short period of time.
It is true that the government didn’t have, nor
Government fault does it now have, an energy master plan. How-
No doubt it was the government which made the ever, for anyone concerned, the thorns in the paw
of the lion are obvious - namely energy self-suf-
obligations and goals for bidders outside of pay-
ing royalties. In addition, the government allowed
leveraged buy-outs, which led to asset stripping and government satisfaction.
- All this was irresponsible for Repsol to ignore
cepted as a bidder though it had no prior experi- and disregard. There was never a satisfactory
ence in upstream operations.
political. It was all a game of leverage as Spain
YPF throwing into question the legitimacy of the bid-
ding process itself, with some factions pointing out
152 LATIN AMERICA p What went wrong with YPF
showed YPF’s production declining 60 per cent, about upstream discovery and development –
petroleum and gas reserves down to one third
of peak levels, imports up by 100 per cent from But the real shame was that the one thing that
the company should have had expertise in, the
down from their peak - nobody was very happy. downstream sector, was left neglected.
But the real damage came when it became Storage capacity, for example, was not prop-
widely known that Repsol intended to repatriate erly attended to which left supply vulnerable to
-
its stake. Until that moment, Repsol had time tions. Gas-oil during planting and harvest sea-
and dialogue with the government. sons became scarce causing inconveniences
In short, Repsol didn’t serve its customers to farmers. Tourist seasons and long weekends
properly. Which is why when Argentine president proved to be a challenge for car travellers in
Cristina Fernandez declared the government’s search of petrol. The manufacturing industry
intention to renationalise, no one shed a tear for consistently complained about the petroleum
the Spanish parent. If anything, there was some and gas industry due to its continued fuel short-
concern that the cure was no better than the ages. Moreover, households have priority for fuel
illness and may negatively impact foreign direct delivery during shortages, making matters worse
investment into the country. Though this seems for manufacturers.
unlikely as oil majors compete to pick up YPF Storage facilities should have included tank
operations and the Argentine government sends
clear signals that it is willing to talk. tank capacity at service stations. Doubling ca-
pacity at those points to account for two weeks
Expectations management of consumption would have mitigated the risks of
Was it possible for Repsol to better manage and frequent strike action by truckers.
hedge its risks? Yes. Marketing innovation was non-existent other
The company had plenty of chances and no re- than for petrol itself. Repsol was reluctant to create
strictions making its mistakes conspicuously worse. or participate in a possible futures market, a move
There was little evidence that Repsol cared that would have been welcomed by consumers and
reduced YPF’s exposure to commodity price risk. condition. It was absolutely dysfunctional.
On top of that, human resources were not A parallel can be drawn to a similar case of
valued nor were employees promoted properly. water distribution and sewage services run by
Segregation of YPF staff from Repsol was pain- Aguas Argentinas - a consortium led by Suez,
fully obvious, even as the parent needed the best Aguas de Barcelona, Vivendi and AWG Group
of local ingenuity to run its operations. That local - which lost its contracts for mismanagement
under similar circumstances.
helped Repsol’s endeavour in Alaska, among Still, it remains to be seen whether this
nationalisation leads to a decrease in foreign
The company’s interaction with local com-
munities, including provincial governments and
municipalities, was also defective. One wonders which provide satisfactory services, could ever be
what sort of rationale was behind expensive put in such odious position.
company initiatives such as promoting football
clubs when investment was better spent in com- westsideconsultants.coM
munities to boost jobs and fund schools and
hospitals.
Ripple effect?
Lack of allocated capital and sloppy manage-
ment for the biggest Argentine oil and gas com-
pany was bound to lead to problems. Risk man-
agement presupposes essentially two things: -
that there should be enough capital to foot the
bill for a viable functional project and that an-
other tranche of equity should be available for
possible volatility.
154 LATIN AMERICA p Leni Gas and Oil
the tRinidad option

Leni Gas and Oil is setting off from
Spain for greener pastures in Trinida
154
latin aMeRica
n
m
ad
WORKOVER AT AYOLUENGO
GOUDRON WELL IN TRINIDAD

london-headquaRteRed leni Gas and Oil (LGO) international areas and on top of that, there is
- no obvious follow-on business,” says Ritson.
velops those reserves with new technologies and
investment. Its strategic assets are the Ayoluen- by interest from multiple bidders when the asset
went on sale. Ritson downplays the impact of
the country, and it has interests in the Caribbean the eurozone crisis in the company’s divestment
island nation of Trinidad. decision, saying that he has not seen interest
But the company’s asset base is about to for European primary production assets wane;
change, explains Neil Ritson, chief executive at though raising capital to develop them will likely
LGO, as it divests the Spanish assets to further
Out of the submitted proposals, one bid-
der was given exclusivity until the end of May to
Switching plays
First developed by Chevron in the 1960s, the lipped about any further details as discussions
are ongoing, but he does add that should talks
was acquired by LGO, a move that doubled pro- stall, other bidders are waiting on the sidelines.
duction which peaking at over 300 barrels of oil “We should conclude something in the third
quarter, but if the current market does not sup-
have over 100 million barrels (mmbbls) original port the kind of price we want then we will keep
oil in place. Unfortunately, the economics showed
that between 300 to 400 per cent increase was for us every month,” Ritson says.
necessary to create the necessary internal cash
Trinidad opportunity
The operational cost structure, explains Rit- So why sell now? In the continuing turbulence of
son, is not particularly favourable. capital markets – particularly for small caps with
“Equipment needs to be imported across high capital expenditure projects – LGO wants to
Europe, there is no indigenous service sector, take advantage of what the company’s manage-
while labour, equipment and transportation costs ment believes is an early mover advantage for the
are on the high end compared to the US or other redevelopment of the onshore Trinidad oil play.
ICACOS FIELD WELL
In November, the £10 million market cap of the capital markets altogether and this will
producer raised £1.5 million for working capi- mean using its asset base in order to pursue
tal purposes, which adds to a £5 million line of growth opportunities.
equity to draw down from as well as a revenue In 2008, LGO acquired a 50 per cent in-
base from an annual 65 thousand barrels of oil
(mbbls) across its operations. The company’s western Trinidad operated by local oil and gas
aim at this point, explains Ritson, is to stay out company, Primera. Current daily production for
Baropex is an independent advisory firm with a

great track record in helping oil and gas companies, Contact us:
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widely available products and techniques to deal

This led to further acquisitions in undeveloped with such challenges, explains Ritson.
areas of the Cedros Peninsula close to the At Goudron, LGO has started moving rigs to
nearby East Venezuelan Basin. -
But the big step for LGO in Trinidad has been ducing at about 50 bopd, through Ritson points
out that there are perhaps 100 useable wells in
developed by Texaco in the 1950s through until total and oil quality is high.
1986 when the lease expired. Texaco left in part “You could put the product straight into your
because its focus moved away from Trinidad, but
also because of technical challenges from uncon-
solidated reservoirs and wells that tended to sand diesel because of how remote the region is… the
oil is a low sulphur, high API crude, of very good
ago is not quite so complicated today and there are quality,” Ritson says.
non-coRe opeRations
Area 4, Southern Offshore Malta (10 per cent

interest, a legacy asset)
High potential exploration play in highly
prospective oil and gas basin in proximity to
Tunisian and Libyan active petroleum basins.
Major seismic interpretation executed on
the 5700km2 production sharing contract
(PSC) area.
Identified four prospects and five leads with
gross mean 2P STOIIP of 5 billion barrels and
recoverable reserves of 1.5 billion barrels.
PSC signed with the Maltese Government
to drill well on Area 4 to depth of 2500m. AYOLUENGO WELL IN NATIONAL PARK
Currently targeting high chance of success
drilling locations with new seismic acquired
in 2011. Area 4 is the only block not Industrial base
contested among Malta’s neighbours. Meanwhile, Trinidad is home to the largest oil
-
GulF oF Mexico
dustry to support operations, both as a convenient
Multiple leases in the shallow Gulf of supplier, but also buyer of product.
Mexico (7.25 per cent interest) -
Total 2010 production net to LGO’s interest -
was 6,617 barrels of oil and 37.8 million
ply at the moment and that is something the
standard cubic feet of gas (12,913 barrels of
government is keen to address, it is looking to
oil equivalent). Additional potential exists
at Eugene Island to recomplete existing attract inward investment from companies such
wells or to sidetrack wells to undepleted as ourselves to raise production levels. They
zones. LGO and its partners are actively are currently importing crude in order to meet
studying these options.
produced indigenously,” he says.

“Trinidad’s refinery exports processed refined products

and it is deficient in crude supply at the moment and
that is something the government is keen to address, it
is looking to attract inward investment from companies
such as ourselves to raise production levels.”
In total, Ritson estimates that there are well

wildlife sanctuary, and it is these environmentally over 200 million barrels of oil in place across
sensitive concerns that LGO addresses with its its Trinidadian assets and reserves of over 20
corporate social responsibility programmes. The million bbls.
“In a different market, developing our as-
this is nothing new for LGO. sets would have happened much more quickly,
“The country has been producing oil for 100 recession is really just a lack of forward move-
years, so we don’t have some of the other issues ment. It is not an easy time, but the opportunity
is there, we have oil in the ground and a major
in other regions. Our issues are around good sustained downturn in the oil price seems un-
housekeeping, not spilling oil, not contaminating likely,” he adds.
water supplies or allowing chemicals to leak, and
not unduly affecting the wildlife, concerns of that www.leniGasandoil.coM
type,” Ritson says.
162 LATIN AMERICA p Cabral Resources
Ca
st
16
latin aMeRica
abral Resources
tRike when iRon is hot
62
Hot on the heels of signing agreements with the Bahia state government,
Cabral Resources has begun a maiden resource drilling programme at its
Brazilian magnetite tenements.
caBRal ResouRces’ initial assessment at its

tenement portfolio in the central eastern coastal
Bahia state in Brazil indicate a potential target
of 331 to 644 million tonnes (Mt) of high grade,
coarse grained magnetite iron ore.
And the explorer’s maiden 3km diamond
drilling campaign at Morro do Gergelim initi-
tenement portfolio with a debut JORC resource
The initial campaign target is driven by Ca-

bral’s promises to shareholders that capital
raising initiatives, which added A$25 million to
the company’s coffers in February 2011, would
fund exploration activities on the company’s
initial 12 tenements.
Since that time, explains Michael Bogue,
managing director and chief executive of Cabral,
the company has grown the portfolio substantially
and it now includes high grade hematite direct
shipping ore (DSO) targets, which could generate
“Bahia is really underexplored, it is one of

the poorer states in Brazil and the government
is very progressive in looking at ways to create
development and opportunities in the region for
economic prosperity and employment. That is
one of the reasons why this project has such a
good infrastructure story,” says Bogue.
“Bahia is really underexplored, it is one of the poorer states

in Brazil and the government is very progressive in looking
at ways to create development and opportunities in the
region for economic prosperity and employment.”
On the ground The Lagoa Real group of tenements contain

Cabral signed agreements with the state’s govern- coarse-grained, crystallised magnetite ore. Bogue
ment in March this year for up to 15 million tonnes
per year (Mt/y) on the FIOL rail line, due for com- when compared with deposits in Western Australia.
pletion in 2013 and at Porto Sul, due for comple- “Iron ore liberation grind sizes [in Western
tion in 2014. The rail and port infrastructure build Australia] are down to 32 microns or below,
is set to boost not only the iron ore sector, but also whereas we are estimating that ours [in Lagoa
the agricultural sector. Real group] will come in at 75+ microns. There
Cabral’s closest neighbour is LSE-listed will be a big operating cost advantage for us in
Eurasian Natural Resources Corporation, which that respect,” he notes.
has spent upwards of US$1 billion buying un- The other two groups, Itaquarai and Canabra-
derdeveloped iron ore projects in the region and va, are the hematite DSO and itabiritic ores and
looking to access the same infrastructure. Cabral is systematically working its way through
The $25 million capital raising enabled Cabral that portfolio, prioritising each of the tenements in
to acquire a “starter pack” of tenements in Bahia anticipation of identifying promising drill targets.
state and acquire and consolidate more over time
as well as embark on the JORC drilling campaign Local and global partners
while getting the exploration team established on
the ground. With $13 million left in the bank to signed with Bahia State, Cabral employs local
see those activities through, Bogue expects that people where it can. As the project progresses,
the company will not need to go back to equity Bogue expects that engagement in the region will
markets until the middle of next year. increase as well.
Excelling in Environmental Consulting
www.5aconsultoria.com.br
phone: 55-71-3033-8680 | contato@5aconsultoria.com.br CONSULTORES & ASSOCIADOS
Salvador/Bahia/Brazil
“In our region, we have subsistence farming network” for offtake agreements, joint venture
and we are very conscious of having a good rela- partners, infrastructure solutions, rolling stock
tionship with local landowners. We employ them in and locomotives and project funding alternatives.
That contact network is fomented by James
with communities in terms of having open ses- Li, who is employed by Cabral. A metallurgist by
sions and keeping regular dialogue. Locals under- background, Li has strong relationships with steel
stand the mining industry well, some operations in
the area have been running for 70 years…and as banks and other state-owned enterprises that can
we move to construction and operating phases we be tapped into towards developing the project.
will certainly look to training and technology for lo- China is not only a partner, but also a
cal talent in order to achieve our objectives as well target customer.
as those of the state government,” he says. “We will be looking to our Chinese friends for
In terms of overseas partners, Cabral has project partnerships and infrastructure solutions,
formed a “unique and established Chinese contact so it makes sense to look at offtake agreements
austRalian-lataM inVestMent in the spotliGht
IRJ - May 22 - Australia’s trading relationship with a number of Latin American

partners is being showcased at the inaugural Paydirt 2012 LatinAmerica
DownUnder resources conference in Sydney.
Brisbane-based Xstrata Copper said an expansion of its copper projects in
Latin America will be fundamental to achieving 60 per cent growth in annual
copper output within three years and would underpin the current $7 billion
commitment to achieve such a target. The company is currently producing
900,000 tonnes per year (t/y) but are looking to boost that nearer to 1.5 million
t/y, according to Charlie Sartain, Xstrata Copper chief executive.
“This is an ambitious programme a strong growth pipeline but new projects
now under construction or development in Peru and Chile and to some extent,
Argentina, will help to progressively deliver this objective,” he said. Xstrata
saw operating profit of $3.9 billion in 2011 with its South American operations
contributing 68 per cent of that margin.
“The next major phase will take in the current $90 billion Xstrata-Glencore
merger,” he added.
Also on display was Peru’s stock exchange in Lima, which merged with
stock markets in Chile and Colombia in 2011. Australia’s equities markets
and resources players were encouraged to dual list as a way to tap additional
sources of funds for new mining ventures in Latin America.
Peruvian stock exchange boss, Francis Stenning, pointed out that Toronto-
listed players were dominant on the Lima Stock Exchange with Canadian
juniors dually listed raising some $273 million globally.
In one of the lesser known LatAm stories, Nicaragua made a play to attract
investment, which saw a 90 per cent surge to $968 million in 2011 when
compared to the year previous. Mining investment is the third largest sector in
capturing foreign direct investment.
Javier Chamorro, executive director of PRONicaragua, a lobby group that
promotes investment in the country, said: “Foreign direct investment is now 13
per cent of GDP, the highest rate in Latin America, so Australian mining entities
coming into our market have a secure investment, operational, geological and
socially positive environment in which to make fresh plays,” he said.
He also hinted that a bilateral agreement would benefit both countries just
as Nicaragua’s agreements with major trading partners the EU and US do.
“In short, we are a well-placed

emerging iron ore producer with
a portfolio of highly prospective TEN YEARS MEASURING
THE AMAZON
iron ore tenements located
close to third party rail and port
infrastructure where we have a The Topographic is a company specializing in topographic
services, your headquarters is in Belém- Pará – Brazil, with
Protocol of Intentions agreement large experience in the market, the Topographic comes growing
in your activities, providing quality, safety and low operating
for allocations signed.” cost for your clients. With high technical and management
capacity performed by qualified professionals, the Topographic
has an objective and bold view, always focused on customer
satisfaction.
The search for contentment and gratefulness of your clients is

the difference at the Topographic Company, continuously
as well. One of the great things about having a met- looking for new technologies associated with the qualification of
your employees.
allurgist on the team is that we can match the met- paulosady1@hotmail.com | topographicbr@hotmail.com
www.topographic.com.br
allurgical characteristics of our ore with the right
mills, and that is a very important and distinguish-
“In short, we are a well-placed emerging iron
in total these partners will be very useful when it ore producer with a portfolio of highly prospec-
comes to the big dollar requirements to get these tive iron ore tenements located close to third
iron ore projects off the ground,” Bogue notes. party rail and port infrastructure where we have
a Protocol of Intentions agreement for allocations
Model business signed. Not to mention a healthy cash balance to
A pre-scoping study commissioned through ProM- continue our exploration efforts for the foresee-
et Engineers in Australia shows a capex in the able future. We believe Cabral’s business model
US$2 billion range as a high-end estimate, based
on a 15Mt/y allocation of magnetite concentrate in the period ahead” Bogue adds.
ore as a product. However, that could get lowered
depending on the blend of products being used caBRalResouRces.coM.au
considering the potential to produce less capital
170 SUSTAINABILITY NEWS IN REVIEW
170 Susta
news
Unprecedented levels of civil society -
representatives have flooded into Brazil for view of the progress the mining sector has made
Rio+20, the majority of which are from the since companies joined NGOs in calling for the
developing world for the first time. Mining, Minerals and Sustainable Development
(MMSD) initiative.
iRJ takes a look at global developments pushing “The 2002 MMSD report was a game-chang-
sustainability into the headlines. -
utives committed to act to maximise their sec-
Large miners lead way on sustainability tor’s contribution to sustainable development,
and they adopted the MMSD agenda as a robust
IRJ - June 8 - The world’s biggest mining companies and credible way to do this. Ten years on, how-
have made major improvements in environmental ever, the results are mixed and new challenges
policies though as a whole the industry continues have emerged.”
-
Buxton, author of a report from the International ments are reasserting control over their natural
Institute for Environment and Development. resources, they lack the capacity to ensure that
ainability
s in ReView
mining contributes to sustainable development. dumping toxic water in the rainforest.
Buxton’s report also states that the Interna-
tional Council on Mining and Metals – an umbrella indigenous groups in Ecuador and approximately
organisation of leading companies such as Rio 70 farmer communities who want Chevron to pay
Tinto and Anglo American - has succeeded in imple- the judgment imposed by an Ecuador trial court
menting many of MMSD’s recommendations for
industry. But complementary measures proposed Ecuador’s court of appeals in January. In total,
for governments, the small scale mining sector and the long-standing case spans 19 years.
communities have not matched this success. Canadian lawyer Alan Lenczner, who will be
representing the Amazon communities, said the
Ecuadorian coalition hits Chevron with
$18bn lawsuit in Canada Ontario is targeting Chevron and various subsidiar-
including the country’s largest offshore drilling

lawsuit in Canada seeking to enforce Chevron’s project and new investments in oil sands in Alberta.
compliance with an $18 billion clean up fee for Chevron has virtually no oil assets in Ecuador.
“I am honoured to have been asked by the company will vigorously defend against any
indigenous people of Ecuador to correct a histor- enforcement action.
ic injustice visited upon them by Chevron,” said “Chevron is defending itself against false al-
Lenczner, who visited Ecuador and reviewed the legations that it is responsible for alleged environ-
extensive trial and appellate records of the case, mental and social harms in the Oriente region of
which exceed 250,000 pages. Ecuador. Chevron never conducted oil production
“Chevron fought for nine years to move the operations in Ecuador, and its subsidiary Texaco
trial from the United States to Ecuador, and then Petroleum (TexPet) fully remediated its share of
had a full opportunity for eight years to defend environmental impacts arising from oil production
itself in Ecuador,” Lenczner added. “This is a le- operations, before leaving Ecuador in 1992,
gitimate judgment and I believe Canadian courts
will recognise it and enforce it as such.” all agencies of the Ecuadorian government
In response to the media reports, Chevron responsible for oversight, TexPet received a
said that the Ecuador judgment is a product complete release from Ecuador’s national,
of bribery, fraud, is illegitimate and that the provincial, and municipal governments that
extinguished all claims before Chevron ac- the bank’s annual meeting taking place in Lon-
don May 18 to 19 amid criticisms of its high level
evidence exonerates Chevron and proves that of fossil fuel investment.
The announcement outlines new funding
to human health or the environment,” the oil for projects worth up to €25 billion over the next
major said in a released statement. three years that reduce energy waste and green-
The Amazon Defense Coalition says that house gas emissions. The bank is aiming to pro-
Chevron is using the “fraud” charge as a ruse vide €4.5 to €6.5 billion out of its own coffers.
to try to block enforcement of the judgment The EBRD was founded in response to the col-
and to distract attention from the overwhelming lapse of the Berlin Wall and is owned by 63 coun-
evidence of its historic misconduct. The Ecua- tries as well as the European Union and the Euro-
dorian state-backed NGO noted that Chevron’s pean Investment Bank. It supports projects in 29
countries from Central Europe to Central Asia.
when compared to BP’s disaster in the Mexican And as government budgets get slashed
Gulf in 2010. BP estimated the accidental leak across Europe in the middle of ongoing currency
of 4.9 million barrels of crude oil would cost the
oil major $37.3 billion. By comparison, Chevron
intentionally dumped 16 billion gallons of toxic -
produced water in Ecuador containing far more tor has an important role to play.
crude oil that was spilled in the Gulf, as well as “A lot of the very capital intensive measures
heavy metals and other drilling chemicals, and on climate mitigation are being postponed be-
faces less than half of BP’s costs to clean it up. cause of constraints from governments…[previ-
ously] it was all about governments and public
EBRD launches next €25bn phase of sector well, you know what is happening to bud-
sustainable energy investment gets...so the emphasis that is given to the private
sector is very important,” he said.
IRJ - May 18 - The European Bank for Reconstruc- Since its inception, SEI has adopted a
tion and Development (EBRD) launched the next business model that drives investment at
phase of its Sustainable Energy Initiative (SEI) at commercially viable projects at market rates.
- neutral,” said Tanaka, adding that SEI is “not a

- side activity with a little green door to show the
tion target and in 2011 became carbon negative EBRD cares about climate…it is almost one-third
(-6.1Mt). SEI business volume is at €8.8 billion with of what we do”.
an estimated 46.9Mt/y of carbon emission reduc- Renewable energy investment in projects such
tion across 464 projects since 2006. as wind farms will stay a priority going forward and
- as the EBRD begins operations in the Middle East
dog CEE Bankwatch Network because over €3 and North Africa regions, a more compelling argu-
billion, or 48 per cent, of the bank’s energy loans ment could get made for solar energy.
and equity between 2006 and 2011 had gone to
fossil fuel sources and coal, which will continue continue to look at. Case studies presented at
to remain an important part of EBRD members’ -
energy mix. Tanaka pointed out that SEI is a large lion long-term loan to Russian steelmaker Novoli-
part of the bank’s work. petsk Steel Works (NLMK). The loan was used to
“What we have achieved in these six years is construct a 150MW combined heat and power
roughly [the equivalent of] making Serbia carbon plant which will utilise waste gases from blast
furnaces. It is expected to cut energy consump- of the bank’s shareholders dealing with large
tion 15 per cent by 2015. -
Carbon markets, on the other hand, have onstrate it is delivering maximum value,” he said.
dropped down the agenda.
“The market mechanism was supposed million and invested over €9 billion in 380 proj-
to send a carbon price signal, at this stage it ects of which 29 per cent were sustainable
is not…we obviously feel we need to try and energy initiatives.
continue supporting this approach because it
is an approach that does have a benefit, but
at this point we may be at the low end of the
cycle on it,” he said.
Speaking at the opening session of the board
-
ister, congratulated the EBRD on its work.
“The EBRD can help expand new markets
and leverage private investment and with many
176 US, CANADA AND AUSTRALIA METALS AND MINING p Riversdale Resources
176 RiVeRsda
Alaskan coal p
us, canada and austRalia Metals and MininG
ale ResouRces
play
After their success in Mozambique coal, the

Riversdale team is intent on realising another
triumph - this time in Alaska.
RiVeRsdale ResouRces’ philosophy is the same as

the last time IRJ caught up with the team, which saw
its original operation, Riversdale Mining, acquired by
Rio Tinto for A$4 billion.
Summing up that philosophy is Steve Mallyon,

managing director: “Go hard or go home”. The “We feel the company is in a strong
position to advance the project for the
2004, $1,000 invested in Riversdale Mining grew to next couple of years with existing funds
$82,500 when it was acquired by Rio Tinto in 2011. and we are unlikely to be in a position
Still, Alaska and Mozambique seem like quite where we are beholden to any market
different prospects. to try and get additional money.”
“It is a different operating environment,” says
Mallyon. “But to some extent all of the systems, - Anthony Martin, chief financial
people and protocols are identical to what we officer
had in the original Riversdale Mining. And once
again, it is a multi-seam, coking coal basin that
we are pursuing.” 1960s and a small development project undertak-
He admits there is one big difference, an in- en by a private group in the 1980s in the area, we
tentional one. That is the availability of infrastruc- -
ture in Alaska, something that was woefully miss- opment. The Riversdale model has not changed,
ing in Mozambique and an aspect of the project
that the Riversdale team admit was the toughest, known coal domains with good quality coal, but the
and most expensive, in their African experience. difference here is that we were sensitive about ac-
By contrast, the Chickaloon project in Alaska cess to related infrastructure,” Mallyon says.
has a long history of coal mining and had been
mined from 1913 to 1922, when the US Navy Port, rail, road
focused on high quality coking coal for their Pa- That includes the deep water Port MacKenzie,
which is well-placed as a delivery point to natural
service the mines. Operations ceased when pe- markets for the product in Japan, South Korea
and Taiwan. There is all-year round shipping and
discoveries in California and later in Alaska. the port is located about 120km from Chickaloon
“As a result of that work, as well as additional on Glenn highway.
work by a number of US-based companies in the The Glenn highway runs through the centre of
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the state and through Anchorage, the biggest city legislation in order to generate funds to support
in Alaska with a population of about 300,000 and mental health programmes.
connects with Chickaloon. Riversdale believes the Riversdale has a 10-year lease with exten-
Port Authority is targeting between 2 and 3 million sion by production and exclusive rights to coal
tonnes per year (Mt/y) of coal exports from existing in a US$3million deal. In addition, royalties are
infrastructure and rail and dock upgrades are being payable to AMHT with no additional state royal-
considered for the future. ties payable, though this does not reduce Rivers-
The Chickaloon region’s coal is bounded by dale’s requirements to comply with the Depart-
two river systems, the Chickaloon and King rivers, ment of Natural Resources or other regulations.
and the land is amenable to a number of open pit “The relationship with AMHT is a unique
and underground development. Riversdale has arrangement and from our perspective a very
acquired about 40.5km2 of land in the Matanuska satisfying one. Every dollar that we spend in
valley, leased from the Alaska Mental Health Trust acquiring the land lease and in paying royalties
(AMHT), which was awarded the land as part of
coming from the community are around the envi-

ronment, as a number of people use the area for
environmental work has commenced to address

issues such as potential impacts on surface and
-
tural resources, vegetation, soil, wetlands, recre-
ational activities, wildlife and social impacts.
Mallyon notes, however, that the lease has been
effectively dedicated for mining since the 1920s.
“It is an exciting exploration environment
because Alaska has really developed on the back
of the oil and gas industry. There are a number
of sedimentary basins across Alaska from the
south of Anchorage to the northwest slope where
looks to us to be quite underfunded. We are not the major oil producing centre is. Coal has been
widely overlooked by the oil majors, yet groups
targeting between 20 and 25 year production life, such as BHB Billiton have developed a sizeable
so the royalty base will grow as we develop it and resource on the northwest slope. Our plan over
the next year or two is to investigate a number of
Mallyon explains. coking coal opportunities throughout Alaska, as
The area is also home to a small population well as accumulate a larger footprint in the valley
at Chickaloon village, with about 350 landhold- we are in,” says Mallyon.
ers and about half that for people living in the
area. In addition there is a native community liv- Quality coal
ing nearby. At this stage, the company is involved The company’s president in Alaska is associated
in a community engagement programme, giving with the original Riversdale team, Russell Dann.
presentations at local councils as well as spon- He was a former Regional Director of the Depart-
soring community events. The main concerns ment of Employment, Economic Development
including two coal zones of between 6 and 9
Comprehensive Geologic Services

metres wide.
“A key element for coking coal is that it has
Geologic Consulting
Geologic Staffing
Geological Engineering
Reporting (including 43-101)
resource could be a low volatile bituminous coal
Logistics/Operation Coordination and the indications we have for ash at the mo-
Remote Site Management
GIS Services ment are relatively low but we may need to wash
Permitting Assistance
Community Engagement that coal. We don’t have enough information
Claims Staking
Claims Administration at this point in time within the Chickaloon coal
Equipment Rental
lease itself and that is the purpose of the forth-
Dedicated to responsible development of
Alaska’s resources. coming drilling campaign…We would like to drill
11401 Olive Lane, Anchorage, Alaska holes into sections right through that full thick-
907-522-4664 www.alaskaearthsciences.com
ness of the coal seams and understand exactly
how thick those seams are and how the quality
and Innovation in the Queensland Government’s varies between them,” Dann says.
Mining and Energy agency and, prior to that, was
the Latin America, Philippine and USA exploration Global and local partners
- As the company moves towards development,
ed – part of the former Hanson Plc group) . Dann explains that Riversdale is trying to com-
“There are a series of igneous intrusions in the bine teams of local Alaskan knowledge and expe-
area and that appears to be the primary reason rience with the more global technical capability
of groups it has worked with in the past.
we take some of the historical coking coal analyses Riversdale is working with Anchorage-based
Alaska Earth Sciences to tap into the group’s coal
for coking coal, we are very happy with those re- expertise and experience in community engage-
sults. It certainly gives us the indication and encour- ment. Overseeing the environmental programme is
agement that we have the potential for a very good
quality coking coal,” Dann says. has also contracted SRK Consulting for the water
quality work and SLR International Corp for the me-

teorological and air quality work. “It is a different operating
Geological services group McElroy Bryan is environment. But to some extent all
of the systems, people and protocols
the geophysical company, Fugro will be starting an are identical to what we had in the
airborne geophysical programme later this month. original Riversdale Mining. And once
Exploration mapping is expected to be completed again, it is a multi-seam, coking coal
by the end of this year and coal quality results are basin that we are pursuing.”
expected by the end of 2014. A scoping study is
planned for completion by the end of 2014, while a - Steve Mallyon, managing director
feasibility study and development decision is antici-
pated by the end of 2016.
try and get additional money,” Martin notes.
Raising capital Though he says that it is still early days to
Having just completed an A$20 million capital rais- talk about capital expenditure of the project,
ing effort with institutional and high net worth inves- Martin adds that compared to other potential
tors out of Europe, Asia and Australia, Riversdale coal developments globally, due to the proximity
believes it is in a strong position to proceed with of rail and port infrastructure and potentially a
work on the ground in Alaska, but also to potentially
look at additional opportunities for the company in based on historical coal quality and yield results,
Australia and North America, says Anthony Martin, capex may “comparatively sit quite well in the
coal development world”.
“The current intention is to look at an IPO
during 2013 as the next capital raising effort,
but that is dependent on markets at the time.
We feel the company is in a strong position to
advance the project for the next couple of years
with existing funds and we are unlikely to be in a
position where we are beholden to any market to
186 US, CANADA AND AUSTRALIA METALS AND MINING p New Millennium Iron
New Millennium
1
m Iron iRon will

186 Though it is still a “small” junior miner, New Millennium Iron has
heavyweight backing, huge resources and big production goals.
Big Span Steel on site. Image c/o www.nmliron.com
FRoM its BeGinninGs as a capital pool company capital costs. When the DSO project goes into
in 2003, New Millennium Iron has grown into an production by the end of the year, New Millen-
emerging producer controlling one of the largest iron nium will become an operating company with
ore resources in the world – the Millennium range,
a 210km long taconite belt in eastern Canada. In 2013, the company is targeting 2 million
The company’s direct shipping ore (DSO) tonnes (Mt) in production, ramping up to full
project in partnership with Indian steelmaking capacity of 4.2 million tonnes per year (Mt/y)
- in 2014. Tata Steel Europe, which has plants
cause of its smaller scale and relatively lower in the UK and Netherlands, has committed to
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100 per cent of the offtake at market prices

“We have this resource from the joint venture company, Tata Steel
which will last for upwards Minerals Canada (Tata Steel 80 per cent: New
of a century and the Millennium 20 per cent).
world’s iron ore resources historic iron ore producing region of Northern
are being depleted at a Quebec and Labrador and had been previously op-
considerable rate” erational until the market lost its appetite for lower
quality ore being produced by the operation.
Dean Journeaux, chief executive of New Mil- meeting today’s market requirements for quali-
lennium, gets his share of questions on this point ty, and of course, the price of iron ore has gone
– what makes him think he can do better today? up quite a bit since 1982,” Journeaux says.
“The operator closed down the mine in
1982 because for one, the market was bad, C$300 million of the capital costs, with New Mil-
but also, the product was not treated, not up- lennium responsible for 20 per cent of the excess.
graded, running around 58 or 59 per cent iron.
We are upgrading the run of mine ore grade Human Resources
to a 64.5 per cent iron, in other words, we are The DSO project is just the beginning for the
LabMag iron ore deposit. Image c/o www.nmliron.com
Indian steelmaker in Canada, and it will be using develop either one or both properties, with New
the experience as a tester before considering Millennium free to decide what to do should Tata
not go ahead.
comes with estimated capital costs of between LabMag is located about 30km northwest
$4.4 and $5 billion dollars for each of the two of the town of Schefferville, Quebec. About
deposits targeted for development. 1,800 First Nations people live in the surround-
A $50 million feasibility study, expected to be ing area, a sizeable population that Journeaux
completed by the end of the year, is underway for says can go far in meeting the projects’ human
- resources needs in the future – the plant op-
Mag in Western Labrador. Tata has an option to erators, truck drivers, mechanics, electricians
COLERAINE MINERALS RESEARCH LABORATORY

David Hendrickson - Director Minerals Research
dhendric@nrri.umn.edu | 218-245-4204
Serving the Mining Industry with

State of the Art Research Laboratory Facilities in:
Mineral Processing
HPGR, Crushing, Grinding, Classification, Flotation
Bench Scale and Pilot Scale facilities
Pyrometallurgy
Blast Furnace Pellet Production and Testing
Sinter Pot Simulator
Pot Grate Simulator
DRI Pellet Production and Testing
Midrex and HYL DRI Testing
Bench Scale and Pilot Scale Facilities
Concetrator Modeling Center

CFD Modeling Center
Advanced Analytical Laboratory
Economic Geology Group
DSO Project - Existing pits and dumps Image c/o www.nmliron.com
and other supervisory, management and ad- “I get asked if I am worried about the future
ministrative personnel who will be required to labour supply considering the global skills shortage
maintain operations. and I guess we are, but on the other hand, we have
On the DSO project, the JV, Tata Steel Miner- this tremendous asset in the surrounding communi-
ties and if we can encourage people through educa-
with First Nations groups. Apart from employ- tion and through other means, we hope it will bring
ment, the company is providing training and has them into the employment pool,” says Journeaux.
donated $50,000 to run a bursary programme For now, the company estimates that at least
at the region’s secondary schools. 1,000 people will be needed to operate each of
t e Sit es
Re m o
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“I get asked if I am wo
labour supply conside
shortage and I guess w
hand, we have this tre
surrounding commun
the deposits while facilities at Schefferville are
Taconite technology
LabMag is owned 80 per cent by New Millennium
and 20 per cent by Naskapi Nation of Kawawa-
chikamach through an initial investment, one of
company. Production is expected by the end of

2016, ramping up in 2017 for full production
at 22Mt/y, of which 17Mt/y will be pellets and
5Mt/y will be pellet feed. The company expects
to have grades of 69 per cent in the concentrate
and slightly lower for the pellets.
Journeaux explains that the operation will
-
ous silica levels for blast furnace use as well as
laBMaG contains:
3,545Mt proven and probable reserves
at a grade of 29.6 per cent Fe
orried about the future 1,045Mt of measured and indicated

resources at an average grade of 29.5
ering the global skills per cent Fe
we are, but on the other 1,151Mt of inferred resources at an

average grade of 29.3 per cent Fe
emendous asset in the
nities” kéMaG contains:
2,141Mt of proven and probable
reserves at an average grade of 31.3
per cent Fe
a low gangue direct reduction grade pellet. That, 307Mt of measured and indicated
he explains, means the company can tailor the resources at an average grade of 31.3
per cent Fe
product to the demands of the steel industry.
1,014Mt of inferred resources at an
The Taconite project will be an open pit
mining operation with a crushing plant, grinding
and magnetic separation facilities with concen- lac Ritchie contains:
trate transported either by rail or in slurry form 3,330Mt of indicated resources at an
via 600km ferroduct to Port of Sept-Iles. average grade of 30.3 per cent Fe
1,437Mt of inferred resources at an
Lavalin as the study manager for the feasibility
study and has also contracted specialist German dso pRoJect contains:
- 64.1Mt of proven and probable mineral
tung as its primary metallurgical process consul- reserves at an average grade of 58.8
per cent Fe
tant while Midland Research Centre, in Minnesota,
21.0Mt of measured and indicated
provides crushing, blending and characterisation
mineral resources at an average grade
work of samples. of 59.2 per cent Fe
Journeaux explains that the process to 10.3Mt of inferred resources at an
mine and process Taconite was developed in average grade of 58.3 per cent Fe
Between 25 and 30 million tonnes
Minnesota because the US state is home to
of historical resources that are not
the massive Mesabi iron range. Aside from
currently in compliance with NI 43-101
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Midland Research Centre, other Minnesota- with 360,000 to 400,000 tonnes of capacity.
based specialists have been brought on board. This last February, those development plans
Barr Engineering will be doing work on the received a boost when the Government of
concentrator and the company uses the Univer-
sity of Minnesota Coleraine Minerals Research million, or 25 per cent of the project costs,
laboratory facility. towards construction.
As with the DSO project, Tata Steel Europe “[The deep water dock] is under detailed
is expected to be a major offtake customer planning right now…we need those larger ves-
for the Taconite project as well, taking at least sels to lower freight costs so this is an impor-
half of the product. The rest will be left for the tant factor in our development plan,” he says.
open market.
For that product to reach Asian markets, how- Strategic board
ever, the Port of Sept Iles will need an upgrade In furthering that development plan towards
for a deep water dock capable of handling ships production, New Millennium’s board represents
EFFICIENCY & EXPERTISE

A subsidiary within the Municipal Group of Companies, Greyrock is a
“We were trying to find
full service civil/mining contractor based in Labrador. Our history is
firmly embedded in the mining industry of Eastern Canada, and, as somebody with good
an organization, we have been operating in the region for well over
50 years. Thanks to our experience and knowledge, we provide a vast
range of service capabilities, including:
business sense, experience
· Mine design/construction
· Open pit mining and stripping
· Drilling/blasting
· Mine support services
and who understands the
· Mine closure/reclamation
· Rail/road construction
· Plant construction
· Hauling (ore/waste) area in which we operate,
looking down the list
· Crushing and screening · Tailings construction
In addition to strict safety and environmental practices, we are

dedicated to working with aboriginal groups to promote sustainable
and socially responsible development — specifically through our
cross cultural partnership, Innu Municipal.
[Rick Hillier’s] name
To learn more about our team, please visit www.municipalgroup.ca
certainly popped”
or call 709-944-2995.
INNU MUNICIPAL
a broad range of backgrounds with experience
in mining, accounting, business and marketing,
geology, strategy and most recently, commanding
the Canadian Armed Forces.
General (Ret.) Rick Hillier, former Chief of the
Defence Staff, the highest rank of the Canadian
Forces, joined New Millennium’s board in 2011.
If that seems surprising, consider this, what iron
ore project couldn’t use a leader with a steady
resolve who doesn’t waver under pressure?
“He’s managed large groups of people and
facilities, the logistics side, but a good part of
the decision was that he is a Newfoundlander.
-
ness sense, experience and who understands
“New Millennium is a
company on the TSX
have these very large
it becoming another
which had eight or s
at one time in differe
the area in which we operate, looking down

the list [Rick Hillier’s] name certainly popped,”
Journeaux says.
Integrity and Innovation. is a welcome boost in furthering the company’s

One Source.
vision to develop the Millennium Iron range into
From prefeasibility, permitting a world class mining operation.
and engineering, through
development, to “New Millennium is a small junior mining
closure and reclamation,
company on the TSx Exchange but we have
Allnorth is the One Source
for your mining project needs. these very large deposits and we see it
becoming another Mesabi iron range, which
had eight or so mining operations at one time
in different pits. We have this resource which
will last for upwards of a century and the
world’s iron ore resources are being depleted
at a considerable rate, and also other factors,
BRITISH COLUMBIA ALBERTA SASKATCHEWAN NOVA SCOTIA NEWFOUNDLAND & LABRADOR declining grades, quality. We have a brand
new operation where we will be able to put
a small junior mining

X Exchange but we
e deposits and we see
r Mesabi iron range,
so mining operations
ent pits”
out the highest quality products and all of this

purports for a strong future for New Millennium
and we hope that one day we will rank in the
larger mining companies in the world, certainly
in iron ore,” Journeaux says.
www.nMliRon.coM
Forg
FoR
204
ge Resources
RGinG ahead
4
With much of the pre-development legwork already completed
at its recently acquired flagship Balla Balla project in Western
Australia, Forge Resources has begun marketing a magnetite iron
ore product as the company seeks to secure project financing.
206 US, CANADA AND AUSTRALIA METALS AND MINING p Forge Resources
Balla Balla is a large-scale, JORC compliant tonnes per year (Mt/y) of shipping capacity at
titanium-vanadium-magnetite resource close to the Port Hedland.
James explains that Forge bought the Balla
granted mining tenements. Major approvals such as Balla project from Atlas Iron for A$39.5 million,
environment, native title, water access and condi- which was over $100 million less than Atlas Iron
paid approximately 18 month prior to acquire
feasibility study (DFS) was completed in early 2010. Aurox Resources, which then owned the project.
Atlas kept the 10Mt/y Port Hedland capacity for
robust as a magnetite only project. However what its own DSO hematite iron ore operations.
is attractive about Balla Balla is the additional “Without the Port Hedland capacity we knew
vanadium and titanium contained within the an alternative transport route would be required
resource, which we view as an embedded option to get to export. We were already looking at
for the company,” says Matthew James, manag- trans-shipping as an option, which we think is
ing director of Forge. feasible particularly as a trans-shipment opera-
Initially, the vanadium which is contained tor is already in northern Western Australia. In
within the magnetite concentrate that will be sold places like South America and Indonesia there
to steel mills, most likely in China, will act as a is quite a bit of this being done, where the mate-
free credit for those mills that have the technol- rial is barged from the coast to a ship anchored
ogy to separate the vanadium, he explains. offshore” says James.
“This vanadium credit allows steel mills to lower A back up plan includes negotiating capacity
their net cost of production. In addition we will be at Anketell Port since the Balla Balla project is
getting a titanium revenue stream from an ilmenite situated just 100km east of the area and Forge
by-product produced alongside the magnetite. In has been short-listed for consideration, but the
the longer term we aim to extract the full value of company’s main focus is on trans-shipment.
both the titanium and the vanadium,” says James. “Our primary plan is the trans-shipment op-
Missing link mine that we are evaluating for trans-shipment.

However there is one missing link, which is the
original studies were built on access to 10 million side of the operation and on the land side we
pRoJect in the pipeline
Eucla Mineral Sands project in Western Australia

Three contiguous granted exploration licences, 218.8km2
Maiden resource of 470Mt at 4.6 per cent heavy minerals
= 21.5Mt of contained heavy mineral
Farm-in agreement signed with a commitment to spend
A$2 million to earn 50.1 per cent and ability to go to 100
per cent with continued farm-in or JV with vendors
“We have two years to spend about $1 million with what
remains of the farm-in agreement to attain 50.1 per cent. It
is important to note that the McClaren deposit, which is the
resource we have defined, is a fairly small area within the
tenements. It is ilmenite-rich but the zirconium levels are
fairly low at around one per cent. We are ideally looking for
an area to contain a higher level of zirconium, ideally four or
five per cent. Based on the geology, we are quite confident
it is there, it is just a matter of finding it,” –Matthew James,
managing director, Forge Resources.
Beyond just data acquisition.

A professional team with extensive global experience
Located in Sydney ensuring easy access to global mineral projects
Specialists in Induced Polarisation and Electromagnetics
Pre IPO - cost effective data
Greenfields exploration
Resource Definition
P +61 2 8920 3252 l M +61 448 493 717

Suite 203, 283 Alfred Street, North Sydney NSW 2060
info@fendergeophysics.com.au
www.fendergeophysics.com.au
HARVEST EXPLORATION PTY LTD ABN:68003069501
“Covering all of your mineral exploration bases”

Harvest Exploration Pty Ltd is a geological and mineral resources consultancy that has
been successfully operating in Australia for almost 30 years.
The Firm encompasses: We provide high level services in the following areas:
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“The DFS shows the project is very financially robust as a

magnetite only project. However what is attractive about
Balla Balla is the additional vanadium and titanium contained
within the resource, which we view as an embedded option
for the company”
are doing detailed studies on environment as

well as engineering in terms of infrastructure capital and operating costs, currently approxi-
requirements.” he adds. mately $40 per tonne of 58 percent Fe magnetite
concentrate, can be reduced all around.
Calculating costs In a recent capital raising effort, Forge raised
Working with GR Engineering Services as well $50 million in a combined debt and equity pack-
as other supporting engineers and specialists age to purchase 100 per cent ownership of Balla
in the mining industry, Forge is anticipating the Balla. Todd Capital came in as a strong unincor-
release of a revised DFS report in August which porated joint venture partner, contributing $10
details the company’s views on revised capex million towards the purchase for a subsequent
25 per cent ownership of the project as well
Currently, capex is at $1.3 billion, but James as contributing towards the equity component,
raised at $0.5/share, to become a 19.9 percent
and Forge is aiming to see that number come shareholder in the company.
down closer to $1 billion. Some of that reduc- “As Forge is the project manager we will be
tion will come from removing the costs of a slurry developing a close relationship with Todd Capi-
pipeline intended to carry product to Port Hedland tal in the development of the Balla Balla proj-
and associated port infrastructure requirements ect. After the purchase of this asset, Forge is
which accounted for $310 million of the original left with $10 million for working capital, which
we are using for the work to get us through to
expenditures on a transhipment option, he notes,
new south wales pRospects
Wymah, 100 per cent owned, Tungsten, tin and

molybdenum
Mayfield, 46.55 per cent owned, Mineral resources
containing 94,800 ounces gold, 1.3 million ounces silver,
17,250 tonnes copper and 29,900 tonnes zince
Michelago, 100 per cent owned, Volcanogenetic massive
sulphides – base metals
Captains Flat, 49 per cent reducing to 25 per cent
owned, Volcanogenetic massive sulphides – base metals
Mayfield North, 100 per cent owned, Granite hosted
copper/gold with potential for Cadia-Ridgeway or
Intrusive Related Gold (IRG) deposits
Towards this end, Forge has received a letter

of interest from National Australia Bank in rela-
tion to project funding and the company aims to
complete this step by the end of 2012.
“One of the key aspects why Forge is a good
investment opportunity is the track record of
the management team, for example, our chair-
man has a strong track record of identifying and
On board and offtake

Apart from an extensive history in the resource
banking and development sector, chairman Nick
Curtis has seen two companies through from
tens of millions to billions in market cap on the
Trim 95 mm width x 121 mm height FA AM/D
ASx – Sino Gold and later, Lynas Corporation. Bleed

Scale
0 mm width x 0 mm height
Artwork @ 100% of actual size
DD
CSM
QA
HH if req
Ink/s CMYK
James himself is an alumnus of Lynas as is 45 per cent Fe content, 0.62 per cent vanadium
Forge’s non-executive director, Harold Wang, an oxide and 13.8 per cent titanium oxide.
experienced resources expert who has worked There are historical offtake agreements
across China’s ferrous and non-ferrous sector as equating to 10Mt/y with two Chinese steel mills
well as in Australia. Prior to Lynas, James worked with which Forge has started initial discussions
at McKinsey & Company and Deutsche Bank, in a bid to revive the contracts.
both in London. -
ect, a company-making asset and in a relative-
ly short time-frame can be put into production
be a three-year schedule starting with 6Mt/y pro- -
duction and ramping up to 10Mt/y a year later. pany,” he adds.
Mineral reserve estimates shows proven and
probable reserves of 229 million tonnes (Mt) with FoRGeResouRces.coM.au
212 US, CANADA AND AUSTRALIA METALS AND MINING p Navarre Minerals
Navarre Minerals
GoinG BiG FoR G
212
Gold
Australian-based explorer Navarre Minerals has achieved early
exploration success at its Tandarra Gold Prospect situated just
40km from the historic Bendigo Goldfield in Victoria.
naVaRRe MineRals has

of a major drilling programme and though results
are still coming in, early indications show cause for
optimism - RC and diamond drilling have proven
over 850m of strike with continuous gold minerali-
sation and 10 assays have greater than 20 grams
per tonne (g/t) of gold contained intersected over
the full 2,500m of strike. A maiden mineral resource '%++/!33!9
This goes a long way to help the company
,!"/2!4/29
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prove up the economic potential of a mining

operation targeting high-grade pods of gold #"--"3"5)2
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contained within broad zones of gold bearing #BMMBSBU7JD
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quartz. It helps that the area’s geology and FHFLLPT!HFLLPTDPN HFLLPTDPN
which produced over 22 million ounces (Moz) of

gold over its lifetime. Taking cover
McDermott explains that the terrain on which
of reef and are RC drilling testing three of those the company is exploring is concealed under a
at this stage so there is plenty of work to do. One shallow cover of sands and clays. In fact, most
of those lines, the Tomorrow Anticline, contains of the 75Moz’s of gold mined historically in Vic-
a level of gold between one and three grams per toria has been found in areas where basement
tonne with patches of high grade. The results so rocks were exposed to the surface and these
far are in line with all of our models and we are veins were followed underground.
-
ous gold mineralisation with our RC drilling from mining potential and the company is well-funded
- to carry out the A$4.2 million programme of geo-
ing,” says Geoff McDermott, managing director physics, air-core, RC and diamond drilling after
and chief executive at Navarre. raising $3.7 million last year.
Currently, Navarre is planning a bulk sam-
kinGston ple with some 15 to 20 tonnes of material left

At-surface, oxide gold mineralisation after drilling.
with shallow high-grade gold intercepts The company’s board owns 25 per cent of
to follow up
the stock with another nine per cent of the com-
100% owned with dominant position
pany owned by Crocodile Gold as part of a legacy
along prospective Landsborough Fault
Historic mining over 1,000 metres of asset when it acquired the Australian assets of
strike to 75 metres deep – high-grade Canadian miner Northgate Minerals.
gold, silver and lead mined “We are strong believers in Victoria and hope
Active mining jurisdiction – Stawell Gold
that one day it will return to its golden heyday.
Mines operation 30 kilometres away
Hopefully Tandarra is the start of a new rush,”
Navarre Minerals recently conducted
a small diamond drilling program ( 3 explains McDermott.
holes) the first hole had the following A recent farm-in arrangement has been nego-
results ; 16.9m at 5.5g Au/t from 65.7m
down-hole in DDK001, including 3.1m
over by Singaporean LionGold - for an area imme-
@ 29.5g Au/t on hangingwall of quartz
diately south of the Tandarra prospect since min-
lode structure. There was visible gold
in quartz observed in drill hole DDK001 eralisation continues north and south of Navarre’s
between 65.7m and 65.9m down-hole. existing tenements. For $900,000, Navarre can
Quartz lode structure was intersected in earn-in 75 per cent of the Raydarra Project.
next two diamond holes with geological
Moreover, Crocodile Gold is the company’s
logging and assaying to come.
neighbour at another of its projects, Kingston,
where it had a good drill intersection around an
BallaRat south old mining prospect.

Gravity ridge may control gold
mineralisation Great neighbourhood
Possible conceptual “Stawell basalt
McDermott adds that Navarre’s projects are
dome” gold target
located in one of the best addresses in the world.
Gravity lines planned to model depth
Victoria is a small state with excellent infrastruc-
ture. Tandarra is ideally located near the city of
Bendigo, which has a history of mining among city sitting over top of our project so open pit min-
its population of about 100,000 people. ing is an option,” McDermott says.
“There is access to water, people, power Aside from Tandarra and Kingston, Navarre
which passes through the western side of our is also exploring for base metals at its Black
tenement, there is a highway that goes straight Range property, which is a copper-zinc-gold 100
past and a daily train service out of Melbourne… per cent owned prospect with similar geology to
we are well situated. And we don’t have a town or Tasmania’s Mount Read Volcanics – host to large
“We are strong believers in

Victoria and hope that one
day it will return to its golden
heyday. Hopefully Tandarra is
the start of a new rush.”
As an experienced geologist and senior com-

pany executive with over 20 years of experience
and specialised expertise in Victoria, McDermott
adds that he is intimately familiar with both suc-
cessful and unsuccessful exploration techniques
for the region.
“I have served a long apprenticeship work-
ing for other companies in Victoria and now I am
using my accumulated knowledge to give Navarre
every chance of attaining exploration success.
We have made a virgin gold discovery at Tan-
darra and are working hard using science and
technology to look under cover targeting a multi-
deposits such as Mount Lyell and Rosebery. The million ounce resource,” he says.
region has been under-explored due to poor out-
crop and shallow cover. www.naVaRRe.coM.au
“The techniques we used to explore under shal-
low cover in Tandarra can be applied to the Black
Range prospect. The Victorian government is keen to
promote exploration in this area,” McDermott says.
220 The Resource Channel
220 Th
rev
pro
special suppleMent
The Resource Channel’s

view of Australian mining
rojects in 2012
In contrast to the oil and gas sector, the cies - particularly in the base metals sector both
mining sector in Australia is showing in Western Australia and Queensland and in the
conflicting signs, writes Jody Elliott, steel industry in New South Wales.
director at The Resource Channel Data coming from the exploration sector also
paints a mixed picture. Whilst Australian Bureau
at least ten major LNG/CSG projects are now -
under construction in Australia and generating ploration expenditure for 2011, closer analysis
shows that expenditure in the iron ore sector
mining industry is slightly different. rose 32.9 per cent while exploration for Nickel
Weaker commodity prices, the high Aus- and Cobalt fell 33 per cent.
tralian dollar and higher input prices, including
labour costs, appear to be having a negative In the Bureau of Resources and Energy Econom-
impact in parts of the industry and a level of cau- ics’ latest release dated March 2012 they predict;
tion is evident throughout. Australia’s resources and energy com-
National economic indicators outside the re- modity export earnings are forecast to
sources sector remain sluggish and there is still grow over the medium term to reach a
a great deal of uncertainty on the international record A$225 billion dollars in 2016-17
front especially in Europe. This is having some Despite projections of lower commodity pric-
- es over the medium term this is to be offset
ment freezes, project delays and even redundan- by substantially greater export volumes
Between now and 2016-17 export vol- on major projects mainly in Western Australia
umes are forecast to increase for iron ore and Queensland that are either underway or
(62 per cent), metallurgical coal (47 per showing strong progress towards this goal. This
cent), thermal coal (65 per cent), copper list is not in any way exhaustive, particularly
ores and concentrate (77 per cent) and when you consider there are 456 projects in the
alumina (29 per cent). Australian resource sector in the construction
pipeline with 272 of those already committed
According to the Bureau’s Professor Grafton, and/or under construction. These range from
the increase in Australia’s export volumes for major expansions like BHP Billiton’s Iron Ore to
industry to increase production and expand infra- -

structure over the medium term. cation to increase capacity.
That said, and despite signs of a more tem- Even with caution evident in some com-
pered outlook and reduced commodity prices, modities, the employment demand is expected
the iron ore, coal and gold sectors continue to ex- to peak at 150,000 new entrants by the end of
pand at lightning speed. It is particularly in these 2013 for construction alone.
commodity sectors where we see the volume of The following is an overview of a select few of
projects generating literally thousands of employ- the major and more interesting mining projects
ment opportunities. either underway, or due to commence shortly in
Our 2012 mining project summary focuses both Western Australia and Queensland.
westeRn austRalia
Rio tinto expansion

Marandoo, which will extend its mine life
operators: Rio Tinto by 16 years to 2030 at the current mining
cost: A$15+ billion rate of 15 Mt/y.
location: Pilbara Hope Downs 4; a new open cut mine
timeframe: 2012 - 2017 with an annual capacity of 15 million
employment: Requires over 6,000 employees in -
the next 5 years pated in 2013.
status: In the Pilbara, initially three of Rio Tinto’s Capacity at Cape Lambert port will also
mines are expanding: expand from 80 to 183 Mt/y by 2015.
Works include the construction of a
Brockman 4 is expected to almost double new 1.8 km jetty and four berth wharf.
its current capacity of 22 to 40 Mt per Importantly, these are all on the west-
year (Mt/y) by 2013. ern side of the rail line and so will have
Western Turner Syncline will expand from minimal impact on existing operations
the 6 Mt/y road haulage operation it is to- on the eastern side. The building of the
day to a 15 Mt/y overland conveyor opera- new jetty and wharf requires a dredging
tion by 2013.
Nammuldi is earmarked for future expan- and on-shore works.
expected in the second half of 2011.
In addition, they will achieve growth through

sustaining existing mines and bringing on new
mines such as:
Rio tinto expansion suppoRt: FoRtescue Raises $490M

FoR pilBaRa iRon oRe expan-
NRW; awarded earthworks at the Cape sion plans
Lambert Port B expansion project,
civil works for the Primary Crusher at IRJ - June 8 - Fortescue has secured
the Western Turner Syncline project $490 million in corporate senior debt
and the construction of the Boolgeeda facilities to top up funding for its iron
airstrip at the Western Turner ore expansion plans in the Pilbara
Brockman project. region of Australia.
Brierty; has been awarded a $55m
construction contract for the The credit facilities, backed by
development of infrastructure at European Export Credit Agencies, will
Wickham in the Pilbara. It’s the be drawn over the next 12 to 18 months.
first major contract awarded for the
company’s new joint venture with Fortescue’s CFO Stephen Pearce said
Ngarluma Yindjibarndi Foundational that the long-term corporate financing
(NYFL), Brierty NYFL, established strategy will extend the company’s
in December. The Wickham Town debt maturity profile at attractive rates
Expansion Phase 2 project will create and that “the success of Fortescue’s
a new Wickham South subdivision and capital raising initiatives continues to
includes 212 new dwellings, 25 residential demonstrate the company’s ability to
lots, the installation of 198 new high quality diversify funding sources from a range
fly in/fly out (FIFO) accommodation units, of local and international capital
the construction of a new 1,600m square markets”.
town administration and training centre for
both the company and community, as well
as the new public recreational parks.
westeRn austRalia
Roy hill iRon oRe pRoJect low phosphorous ore bodies in Australia outside
the control of the majors and is located 105km
operators: Hancock Prospecting north-east of Newman in the Pilbara region of
Location: Chichester Ranges Western Australia.
Timeframe: Construction between mid-2011 –
The project will consist of:
planned for 2014 Mining operation for 55Mt/y hematite
Cost: Reported to be approx. A$7 billion iron ore;
Employment: During construction, the workforce Crushing, screening and processing lump
will peak at 3,500 people (with a total of 10,000 ex-
pected over the life of construction) and it will have Stockpiling and train loading;
an operational manning of over 1,600 personnel. A 370km standard gauge, single line,
Status: The Roy Hill project will be a world-class dedicated heavy-haul railway from the
iron ore mine. The deposit is the last of the large mine site to Port Hedland;
Roy hill suppoRt:
Brookfield Multiplex Engineering

& Infrastructure; is appointed the
preferred contractor for the design,
procurement and construction of the
$1.2 billion Process Plant and Mine
Material Handling Facilities at the mine
site.
Clough Forge; awarded an Early
Contractor Involvement (ECI) contract
for the Port Materials Handling
Facilities.
ISS Facility Services Australia; provision
of camp management services,
including catering, accommodation and
transportation services.
Ausco Modular; will build the
Port facility located at Port Hedland for
accommodation.
receiving, stockpiling, screening;
BGC Contracting; won construction
Exporting 55Mt/y (wet) of direct contracts to build the aerodrome,
shipped hematite iron ore as lump and airport roads, and village roads and is
expected to generate 4,000 jobs during
the construction phase.
Macmahon & John Holland Group;
building a 340 kilometre rail line
from the Roy Hill mine through to Port
Hedland.
westeRn austRalia
sino iRon pRoJect
operators:
Location: 85km south of Karratha
Timeframe: First production expected in late
2012 with a 25-year mine life
Cost: US$30 billion
Employment: More than 4,000 construction jobs
and 600 operational jobs. With commissioning
-
erational recruitment efforts.
Status: In the mine-pit, individual load tests have liner and cranes. Second magnetic separation pip-
ing and electrical installation is complete. The main
1 conveyor belt has been installed. The power e-house is ready to be energised; water cooling and
distribution system is ready to be energised. The air compressor systems have been installed and
major components of the second crusher have pump station installation is underway.
also been installed. At the power station, gas turbines 3 and 4 have
Stockpile construction is complete in the con-

centrator area with ongoing punch list clearance. and stationary commissioning is progressing on
The third group of mills has been delivered to site
and positioned. Mechanical and piping installa- been completed for steam turbines 1 and 2.
tion of the Line 1 AG mill is nearly complete. The Hydro tests have been carried out on the desali-
nation, return water and concentrate slurry pipe-
installation for Line 1 is complete excluding the lines, which are now ready for integrated com-
missioning. Main substation electrical testing has At the desalination plant, pressure testing and
been completed and is ready to be energised. bubble tests have been completed on the east
Major port assets including four barges, two tugs train and endurance testing has been completed
on all three intake pumps. Loop checking is
their kind in WA waters) have arrived. ongoing. Mechanical, electrical and instrumenta-
In the port area, piping and electrical installation tion installation in the west train is progressing
has been completed for building 1 of the dewa- and mechanical installation for the west train
tering plant and individual equipment testing is pre-treatment is nearing completion.
underway. Conveyor structure and mechanical Civil work has been completed for all workshops
installation has been completed at the stockyard in the mining infrastructure area and steel struc-
and belt installation is progressing. Hydro tests ture erection is underway.
have been carried out on the concentrate thick-
eners and power distribution systems have been
installed throughout the area.
westeRn austRalia
southeRn seawateR
desalination plant staGe 2 become fully operational ahead of schedule in
-
operators: Southern Seawater Alliance (SSWA) sioning. The SSWA is led by Spanish companies,
Location: Binningup, south of Perth Tecnicas Reunidas and Valoriza Agua. Its part-
Timeframe: 18 month construction, expected to ners are construction company, AJ Lucas and
be commissioned by 2014 engineering consultancy Worley Parsons. Tecni-
Cost: A$955 million cas Reunidas and Valoriza Agua have extensive
Employment: 600 jobs during construction, local major desalination experience and are interna-
workforce only (no camp facilities) tional multidiscipline construction companies.
Status: A Spanish-led consortium, Southern Sea- These two companies will operate and maintain
water Alliance (SSWA) will build a second desali- the full plant, which will be owned by the Water
nation plant with 100 gigalitre per year (GL/year) Corporation, for 25 years.
maximum capacity plant for the Water Corpora- SSWA plant support:
AusGroup subsidiary, AGC Industries tural, mechanical and piping installation

has received a Letter of Award valued at work of the main facility as well as fabri-
approximately $30 million by Southern cation of the secondary steelwork.
Seawater Alliance for the construction to ABB – Australia, Automation and Power
expand the second seawater desalination Technologies.
plant to its 100 GL/y capacity, scheduled Siemens
to be completed by the end of 2012.
The scope of work for AGC will cover struc-
GVk plays down austRalian en- mining heiress.
ViRonMent MinisteR’s stopped

GVK said that, “Minister Burke advising that
clock
he is “stopping the clock” by no means is
to be interpreted that the project will not
IRJ - June 6 - GVK Power and Infrastructure,
proceed, nor is it an indication of the Federal
the Indian group developing the Alpha
Government’s decision.”
Queensland coal project, has said “it is
The Indian coal producer added that requests
committed to norms and confident of a
from federal departments to clarify existing
positive outcome” in response to Australian
information “is not at all unusual in the
environment minister Tony Burke’s publicly
process” of acquiring permits.
stated concerns over granting of mine and
rail permits.
Analysts quoted in the media have
implied that the move by the Australian
Burke said to media that he “stopping the
government is political in nature though
clock on the process which has been given
the delay is also widely viewed as a blow
to us by the Queensland government”
to the Alpha project against a backdrop of
because of remaining ecological concerns
competition from other energy companies
over the $10 billion Alpha coal and rail
and coal shortages in India.
project, which GVK co-owns in the Galilee
basin with Gina Rinehart, the billionaire and
westeRn austRalia
Bhp Billiton, iRon oRe expan- associated with its expansion projects. The
sion pRoJects project, which is expected to be reviewed for full
approval in the fourth quarter of calendar year
operators: BHP Billiton 2012, has an embedded option to expand by a
Location: Pilbara further 100 Mt per year. The funds approved
Timeframe: Construction has commenced, will enable the company to progress feasibility
studies and the procurement of long lead time
Cost: Reported to be approx. A$7 billion items. It will also allow for dredging to begin,
Employment: Exact numbers unknown, but is in subject to the necessary regulatory approvals. In
the thousands for construction and operational. parallel with this work, engineering studies are
Status: BHP produces most of its iron ore underway to match mine and rail expansions to
through seven mines at three big mining hubs in the expanded port capacity.
the central and east Pilbara known as MAC, New-
man and Yandi. To expand to 220 Mt it will build -
another, Jimblebar, and to move to 350 Mt it will ment would include the proposed construction
open up four more mines: Jinidi, Marillana 1 and of a 4km jetty, a four-berth wharf, 32 kilometres
2 and Southern Flank. Since our last update, of dredged departure channel and
BHP Billiton has also bought out the equipment landside infrastructure, including stockyards and
and operators of its contractor, HWE and moved a rail spur.
to an owner-operator model.
BHP Billiton announced in February 2012, the

approval of US$917 million (BHP Billiton share
$779 million) in pre-commitment funding for the
construction of a 100 Mt/y outer harbour facility
Bhp Billiton iRon oRe expan- the structural, mechanical, piping and
sion suppoRt: heavy haulage at the company’s Yandi

operation. The scope of work includes
Monadelphous; has secured a construction of an Ore Handling Plant,
significant number of contracts for stockpile and conveyor systems;
major works, including structural, fabrication of 2,000t of conveyor
mechanical and piping works for the components; and transportation of 43
expansion project. structural modules - ranging from 100
Joint venture partners, RCR Tomlinson to 300t - from Port Hedland to the Yandi
and Laing O’Rourke; will design and mine site, located 140km northwest of
construct primary and secondary Newman in Western Australia’s Pilbara
crushing facilities, including overland region.
conveyors. RCR Tomlinson; has been awarded a
FAST; a joint venture between Fluor contract to provide power generation
Australia and SKM will develop and works for BHP Billiton Iron Ore’s
deliver iron ore projects to meet the Yarnima Combined Cycle Power Station
global market demand forecast for BHP in Newman, Western Australia. The
Billiton’s Iron Ore business. scope of works includes the design,
John Holland Group. manufacture and supply of three Heat
Macmahon Holdings; awarded in Recovery Steam Generators (HRSGs)
August 2011 the contract for pre- and associated equipment. Due for
development work adjacent to current completion in the second quarter
operations at BHP Billiton Iron Ore’s of 2013, the contract is valued at
Wheelarra Mine to construct haul roads approximately $30 million.
and run of mine.

United Group Resources; awarded
an $A165 million contract for the
fabrication and on-site installation
of structural steel and mechanical
equipment associated with transfer
stations, conveyors and shuttles.
AGC; awarded an A$100m contract for
westeRn austRalia
oakaJee poRt and Rail One village will be located at the port site and the
others along the rail line. The portside construction
operators: OPR was established in September village will comprise 1,100 rooms. The rail villages
2007 to pursue a joint venture between Murchi- will vary in size from 150 to 760 rooms. All villages
son Metals and Mitsubishi Development, each of will be managed by the successful contractors in
which has a 50 per cent stake in OPR.Murchison accordance with strategies determined by OPR.
Metals. The project is now owned 100 per cent The total number of accommodation rooms will be
by Mitsubishi. determined bearing in mind project management
Location: Mid west region of Western Australia manning, workforce rosters and visitor contingen-
Timeframe: The project timetable from construc- cies.
Once the port and rail are operational, the villages
ship, takes the project out to 2014. will be decommissioned.
Cost: A$3 billion + Status: Oakajee Port and Rail (OPR) will deliver a
Employment: OPR expects to employ about 250 rail and port network business to transport iron
personnel, who will live in the region. ore from Western Australia’s mid-west region to
During construction, OPR expects the number of customers across the globe.
port and rail construction workers to reach a peak
of around 2600, comprising approximately 900 Back in 2009, OPR and the Western Australian
port area workers and just over 1,700 rail work- State Government signed an exclusive State
ers, 19 - 24 months into the construction period of Development Agreement for the development of
three years. the multi-billion dollar deepwater port at Oaka-
All construction workers will be employed by the jee, 25 km north of Geraldton and integrated rail
successful construction contractors. They will be network to service iron ore miners and other port
accommodated in single rooms with private ensuite users in the mid-west region.
facilities in up to seven construction villages.
The port will cater for the world’s largest ore

carriers and the railway network will service the
growing number of mining projects in the region.
In 2010, Oakajee Port and Rail (OPR) delivered

a draft Bankable Feasibility Study (BFS) to the
Government of Western Australia, which demon-
strates strong technical feasibility for the devel-
opment of the Oakajee port and rail project.
Draft Implementation Agreements for the port

and rail have also been delivered to the State.
Both parties have substantially progressed the
terms of these agreements and will continue to
work together to progress outstanding matters.
On 20 February 2012, Mitsubishi Development

(MDP), wholly owned by Mitsubishi Corp – Ja-
the purchase of Murchison Metals Ltd’s 50 per

cent stake in OPR, increasing its interest in the
project to 100 per cent. dent peer reviews, including value engineering
Project planning, evaluation, engineering and design as the optimal solution to meet the gov-
regulatory approvals are well advanced. Indepen- ernment’s scoping requirements.
westeRn austRalia
kaRaRa iRon oRe pRoJect by 3km long and has been so far been drilled
to a depth of 300m. Karara’s open pit will be
operators: Gindalbie Metals and AnSteel (one of similar in size to the Kalgoorlie super pit once
China’s leading steel and iron ore companies) complete with a processing plant for opera-
Location: The operations, located 225km inland tions and maintainability.
from Geraldton in the mid-west region is the re- Dry stacked tailings - only one in Australia
sult of an A$2.57 billion project which has been to use this world leading technology. The
in development since early 2009 and is currently -
cant investment in water recycling capacity
Timeframe: Approaching commissioning, due at Karara, allowing the project to reduce its
September 2012 water consumption by about one-third.
Employment: Karara Mining will require a perma-
nent workforce of approximately 600 on a long- Commitment to training and education including
term basis once in full production. our University Scholarship Programme which is
Status: Karara Mining is fast approaching com- open to students in site local communities who
missioning in September this year for our 8Mt/y -
magnetite operations and already underway with al level in a mining company.
feasibility for 16Mt/y expansion.
World-class magnetite deposit and multiple

hematite deposits with 30Mt/y potential for a
mine life in excess of 30 years.
First major magnetite operation “opening the
mid-west”
2,400Mt ore body covers an area 800m wide
kaRaRa iRon oRe pRoJect driven by oil and gas processing and
suppoRt: heavy industrial projects.

Released today by the Australian
Brierty; awarded $150-million, three- Industry Group and Australian
and-a-half year contract to provide Constructors Association (ACA), the
hematite mining and associated construction outlook survey also predicts a
services, plus authorisation to further rise of 13.8 per cent in 2013.
procure key plant and facilities. Engineering construction turnover is
Downer EDI; awarded the mining set to rise by 17.1 per cent this year and
operation contract in February 15.4 in the next, while the total value of
2012, generating 120 jobs. Valued commercial construction is expected to
at approximately $570 million over rise by 6.1 per cent and then 7.2.
six years, the contract is on the However, this growth could be offset
largest single operation contracts by an expected continuance of skill
for the project and will include the shortages.
provision of drill and blast, and load Around 70 per cent of businesses
and haul services. predict they’ll find it difficult to hire

skilled staff over the next six months.
Australian Industry Group chief
executive Innes Willox said that
engineering construction in the mining
skills shoRtaGe could sector is “bursting at the seams, with
stall austRalia’s MininG skill shortages widely anticipated and
constRuction sectoR rising expectations of shortages of raw
materials and equipment.”
IRJ – May 17 – Demand for mining-
related construction in Australia is
poised to surge over the next two years
but could be held back by a lack of
skilled workers, according to a survey.
It forecasts a 14.7 per cent rise in
the total value of engineering and
commercial construction this year,
westeRn austRalia
FMG expansion pRoJect The port was designed with expansion in mind, to
allow construction to take place without interfer-
operators: Fortescue Metals ing with daily operations
Location: Pilbara
Cost: $360 million Development highlights:
Timeframe: 18 months, operational by mid-013
Employment: Unknown, but expected to be in Fortescue is undergoing a transformative
excess of 600 expansion from a 55Mt/y operation to a
Status: The existing integrated mine, rail and 155Mt/y powerhouse by June 2013.
port supply chain was constructed in less than The 155Mt/y expansion involves additional
two years and Fortescue’s board has recently infrastructure at Herb Elliott Port, 120km of
approved an US$8.4 billion expansion to their mainline rail duplication, a new 130km rail
Pilbara operations. Expansions plans are on spur from Solomon to the mainline, a 60Mt/y
schedule for completion in mid-2013. mine at Solomon and Chichester Hub de-
operations: velopment to take its combined production
located approximately 260km from Port Hedland. capacity to 90Mt/y (plus 5Mt/y from a 50/50
Christmas Creek is 50km to the east of Cloud- BC Iron Joint Venture).
break The Solomon Project is 120km to the west
Cloudbreak is a 40Mt/y mining operation, Christ- of the Chichester Hub, more than 3,000Mt
mas Creek is currently operating at approximate- have been discovered here and early ore is
ly 18Mt/y. expected later this year, with full production
The 40t axle load railway is the heaviest haul in on target for July 2013.
the world with up to seven trains a day transport Solomon is the largest iron ore start-up in
iron ore from the mines to Herb Elliott Port in Australia, showcasing innovation to execute in
Port Hedland record time and at a lower capital cost/tonne
FoRtescue FMG expansion

suppoRt:
Decmil; will construct a 200 person rail

camp, including accommodation rooms
and associated facilities, at the site south
of Port Hedland as part of Fortescue
Metals Group’s T155 Rail Expansion
Programme. Construction has a forecast
completion date of second quarter of
calendar year 2012.
Worley Parsons
RCR Tomlinson
AGC
Construction Industries Australia
Brierty
ration than any of its competitors Leighton Contractors; received formal
notification as preferred contractor
The company is evaluating early production of
for Fortescue Metals mining and
-
operations at the Solomon iron ore
pect a full scale project to be its next develop- project. Leighton Contractors and
ment step. Fortescue have reached agreement
A maiden resource of 625 Mt has been de- within a limited notice to proceed
(LNP) to facilitate the continuation of
-
negotiations regarding the five-year
pected to grow and both Nyidinghu and Western
mining and operations contract. The
Hub will rival the Chichester Hub in production LNP also provides for pre-mobilisation
capacity. activities and early services for the
Fortescue is investigating a ‘two port, three project, including works for operational
readiness and full mine management. A
hub’ strategy that would take production to
decision by Fortescue on contract award
355Mt/y which could potentially include a
is expected sometime in June 2012.
new Pilbara port.
queensland
alpha coal & keVin’s coRneR long-standing interest in the development of the
pRoJects Galilee Basin, with the parent company having
held coal exploration permits and investigated
operators: Hancock Prospecting the Alpha region since the 1970s.
Location: Galilee Basin
Timeframe: The Test Pit for Alpha Coal has been Kevin’s Corner Coal Project is adjacent to Han-
completed and construction is due to commence cock’s Alpha Coal Project and both Projects will
utilise the proposed multi-user rail and port facili-
Cost: A$7.5 billion ties. This is designed so that at a future point, it
Employment: 2,500 construction jobs and 1,600 will have the potential to transport, load and ship
permanent jobs capacity greater than the combined production
Status: Hancock Coal (HCPL), a wholly owned level of both the Kevin’s Corner and Alpha Coal
subsidiary of Hancock Prospecting, has as its Projects.
centrepiece, the development of an extensive Similarly to the Alpha Coal Project, the Kevin’s
thermal coal deposit in Queensland’s Galilee Corner deposit also lies within the late Permian
Basin, about 400km inland from the coast. The Colinlea and Bandanna Formations consisting
project will include the construction of approxi- of four main thermal coal seams suitable for the
mately 495km of rail, port facilities, mine infra- global export market. The coal seams dip gently
structure, process plant and workforce village. from east to west varying in thickness from 5 to
Adjacent to Alpha Coal, the Kevin’s Corner Proj- 8m, enabling high production open-cut mining
ect is a recognised thermal coal deposit within and underground longwall mining.
the Galilee Basin. This deposit contains very Exploration to date has concentrated on the coal
large resources of thermal coal in a premium reserves with the best export marketability, with
location of the Basin. Hancock Galilee (HGPL), the resources to be further upgraded following
a subsidiary of Hancock Prospecting, has a additional drilling to the west. With the comple-
alpha coal and keVin’s coRneR

pRoJect suppoRt:
WorleyParsons and Ausenco; awarded

tion of the 2009 drilling programmeme, the contract to manage the delivery of
Hancock Coal’s $7.5 billion Alpha Coal
Kevin’s Corner Project was upgraded to approxi-
Project in Queensland. WorleyParsons
and Ausenco will provide programme
increase to indicated and measured resources management services to the project in a
(that now includes approximately 500 drill holes). 50 per cent joint venture throughout the
The Alpha Coal and Kevin’s Corner combined next four years.
resource is currently 7,900Mt of JORC compliant

coal with ongoing drilling expected to increase
this further. The Kevin’s Corner Coal Project
will have a capacity of 30 Mt/y via open-cut and
underground longwall operations. The operation
has a scheduled mine life of approximately 30
plus years.
The Project is expected to commence construc-
2014 dependent on gaining relevant approvals.
The Kevin’s Corner Coal Project is anticipated

to employ thousands of people throughout its
productive (30 year plus) life. The construction
workforce is anticipated to peak at approximately
2,500 people.
queensland
the china FiRst pRoJect schedule for completion in mid-2013.

operations: The Galilee Coal Project includes
operators: Warratah Coal mine, rail and port components. Waratah Coal
Location: 38km north-west of Alpha (160km to plans to build a railway from the mine site to the
the west of Emerald) Port at Abbot Point and utilise proposed new port
Cost: A$8 billion facilities and infrastructure within the Abbot Point
Timeframe: Construction to commence late State Development Area (APSDA) for the loading
and export of coal.
Employment: The Galilee Coal Project will require
approximately 3,500 workers during the construc- The railway line comprises some 468km and will
tion period (excluding construction of port facilities), traverse the Barcaldine, Isaac and Whitsunday
and an estimated 1,860 during operations (exclud- Regional Council areas. Construction is sched-
ing contractors). Approximately 360 staff will work uled to occur over a three-year period commenc-
and reside in or near Bowen during operations. ing late 2012.
The remaining 1,500 workers will be located at the
mine site. At least 28 senior managers will reside The Galilee Coal Project includes open cut and
permanently in Alpha. Waratah Coal is currently undergrounding mining. Maximum production is
discussing the desired population of Alpha with the expected to include 56 Mt of run-of-mine coal to
produce 40 Mt of product coal annually. Maxi-
who will reside in Alpha. mum production is envisaged within a 5 to 10
Status: The existing integrated mine, rail and year period. Production is expected to continue
port supply chain was constructed in less than for at least 25 years.
two years and Fortescue’s board has recently
approved an US$8.4 billion expansion to their Although additional work may be required on the
Pilbara operations. Expansions plans are on EIS, Waratah Coal aims to have the required gov-
Gillard said the project was a

fantastic opportunity for the area
and a “remarkable time” in Australia
comprising large economic growth, low
ernment approvals for the project in mid-2012, unemployment and low inflation.
ahead of the planned commencement of con-

“We can be confident about the
struction activities in late 2012.
Australian economy because there are
so many investments like this one in the
pipeline,” she said, citing the total value
china FiRst pRoJect suppoRt: of investments to exceed $450 billion.
The Metallurgical Corporation of China

She expressed optimistic sentiment
(MCC); has been engaged to undertake
that, despite the crisis in Europe
the engineering, procurement, construction
causing the Australian share market to
and management of the project.
plummet two per cent today, Australia
continues to grow and has a bright
economic future ahead.
austRalian pM opens a$34 Inpex chairman Naoki Kuroda said
Billion lnG pRoJect the Itcthys LNG project would benefit

the people of both Australia and
IRJ - May 21 – Prime minister Julia Gillard Japan, bringing social and economic
has officially opened an A$34 billion development to the Northern Territory and
liquefied natural gas (LNG) project in a long-term supply of cleaner energy to
northern Australian port city Darwin. millions of Japanese homes and businesses.
The Ichthys project, belonging to “The Ichthys LNG project will
Japanese oil and gas company Inpex, strengthen the ties between Australia
is set to bring thousands of jobs and Japan, while securing Darwin’s
and many valuable contracts to the place as an emerging hub of oil and gas
Northern Territory. activity in the region,” he said.

queensland
Bhp Billiton caVal RidGe

pRoJect, queensland
operators: The Project is a 50-50 joint venture

between BHP Billiton and Mitsubishi Develop-
ment Pty Ltd, managed by BMA.
Location: Bowen Basin, 16km south of Moran-
bah and 160km south west of Mackay
Timeframe: First production expected in 2014
Employment: 1,200 construction and 500 opera-
tional jobs
Status: The Caval Ridge project includes the
northern section of the Bowen Basin which will

produce high quality hard coking coal. The proj-
ect was approved for construction by BHP Billiton
in late 2011. Limited work packages are open
for tender. BHP Billiton BMA has commenced
recruitment for the operational workforce. The
operation will have a life of 30 years and will be
an open cut dragline and truck shovel operation.
Bhp Billiton caVal RidGe

suppoRt: “Thanks to the extensive investigation
by TEMCO employees of these options,
Bechtel; appointed project manager and the flexibility provided by several
and is responsible for developing stakeholders, significant cost reduction
the operation. Work includes opportunities have been identified,
development of a new coal mine and primarily in the areas of workforce
coal handling and preparation plant. efficiency, power supply flexibility, ore
blending and freight optimisation.
“These changes should allow TEMCO

to return to a globally competitive
Bhp RestaRts teMco ManGa- position.”
nese opeRations in tasMania
BHP Billiton Manganese president
IRJ - May 22 - BHP Billiton has restarted Tom Schutte said a key change will be
operations at its manganese alloy facility separating the operations of the TEMCO
in Tasmania, Australia. Ran by TEMCO, alloying facility and the GEMCO mine in
part of the manganese joint venture the Northern Territory.
between BHP and Anglo American, the
plant was suspended for 90 days due to “This separation introduces the ability
operating losses. to blend in other ore sources, which will
improve operating performance while
BHP conducted a successful review of its also allowing us to consider the strategic
economic viability and is now planning fit of the TEMCO operation inside BHP
for the facility’s safe and full restart. Billiton’s portfolio,” he said.
Bryan Quinn, BHP Billiton Manganese BHP will implement a reduced

Australia Asset president, said: organisational structure for the restart
“Extensive stakeholder consultation that will be achieved through natural
and assessment of all options for attrition – an employment freeze and
TEMCO has been undertaken over the redeployment within the company.
last three months.
queensland
Bhp Billiton daunia pRoJect

The Daunia Mine involves:
operators: BHP Billiton Mitsubishi Alliance One new open-cut coal mine
(BMA) A new Coal Handling and Preparation Plant
Location: 150km south-west of Mackay (CHPP)
Timeframe: Following regulatory and owner ap- Infrastructure associated with the new opera-
provals in March 2011, construction activities at tions and facilities including a conveyor, haul
the Daunia Mine commenced in mid-2011. Con- roads and an overpass across the Norwich
struction of the mine is expected to take approxi- Park rail line, linking mining areas to the
mately two years. First coal is expected in 2013 treatment plant
and full production of up to 4.5 Mt/y is expected Purchase and construction of new mining
to start in 2014. equipment.
Employment: 450 construction and 300 opera-
tional jobs
Bhp Billiton daunia pRoJect
Status: The Daunia Mine is an open-cut coal
suppoRt:
mine to be operated via an excavator and truck
Bechtel has been appointed to

to support BMA’s growth options. The mine is provide engineering, procurement,
located in the northern section of the Bowen construction and management

services.
Basin approximately 18 kilometres southwest of
Coppabella. It will produce up to 4.5Mt/y of semi-
hard coking coal and pulverised coal injection
(PCI) coal for the export market.
queensland
wandoan coal pRoJect and the Queensland Minerals and Energy Academy
will provide A$720,000 over three years for fund-
operators: The project is being delivered by ing, equipment, curricula enrichment and school
xstrata Coal Queensland and funded through a industry liaison to Wandoan State School, and
joint venture between xstrata Coal Queensland Taroom State School and Miles High School.
(75 per cent ownership), ICRA (Itochu) (12.5 Status: Awaiting state and federal government
per cent ownership) and Sumisho Coal Australia approvals. The Wandoan Coal Project has been
(12.5 per cent ownership). established to investigate the possibility of open-
Location: Wandoan (immediately west of the ing an open-cut thermal coal mine immediately
township) west of the Wandoan township. The mine would
Timeframe: Two to three year construction pe- include an open-cut coal mine, a coal handling
riod and preparation plant and support facilities.
Employment: 1,300 jobs required to build the With an expected life of more than 30 years, the
mine infrastructure which will generate up to 210 mine would produce thermal coal which would be
further jobs in the local region each year. Once the crushed, sized and washed before being trans-
mine is operational, 754 permanent jobs and 90 ported by rail to port facilities on the Queensland
contractor maintenance jobs will also be created on coast and exported around the world, or used
- here in Australia. It is anticipated that about 30
fect that will generate 150 to 200 permanent jobs million run-of-mine tonnes (t) of coal would be
in the local region. A number of entry level jobs mined at Wandoan each year. As at May 2012,
for school-leavers, including apprenticeships and
traineeships will be created among the long term from the Queensland Government to allow them
jobs on the mine site once the mine is operational. to proceed with the development of the proposed
The xstrata QMEA Education Partnership between mine. After the Mining Lease and Environ-
xstrata Coal, Queensland Department of Education mental Authority are granted by the Queensland
Bhp pRessuRed to expand creating a large open mine to tap an ore
olyMpic daM body that begins around 400 metres deep,

as well as a 270km electricity transmission
IRJ – May 28 – Australia’s resources line, 400km pipeline, large desalination
minister Martin Ferguson is putting plant, 105km railway link from Pimba to the
pressure on mining major BHP Billiton mine.
to expand the Olympic Dam project,

according to Fairfax analyst John Meyer. It would increase the amount of ore mined
at Olympic Dam from 12 million tonnes per
There is speculation that rising costs in year (Mt/y) to 72Mt/y; copper concentrate
the country and a less certain environment production from 600,000tpy to 2.4Mt/y;
for uranium and copper demand could uranium oxide from 4,500tpy to 19,000tpy;
cause BHP to defer the A$20 billion dollar gold bullion from 100,000oz to 800,000; and
investment it is considering for the next silver from 800,000oz to 2.9 million.
Olympic Dam expansion.
Meyer added that the mine has already

suffered two catastrophic fires in its
processing plant on commissioning and
requires substantial investment to meet its
required economies of scale.
“No wonder BHP might want to push this
particular white elephant further out,” he
said.
Expansion of Olympic Dam would involve

queensland
pRoJect BooMeRanG 2010/11. Three-year construction schedule to
operators: East West Line Parks trains run in 2015/16.

Location: Comprises a new 3,370km trans Austra- Employment: Expected to generate up to 35,000
lian railway from Port Hedland, Western Australia jobs in the Northern Territory and South Australia
during construction.
as well as 6 or more steel smelters on both coasts Status: East West Line Parks is building one
(12 or more in total), associated port facilities and of Australia’s largest infrastructure projects
infrastructure to support the project. - a transcontinental multi-user rail infrastruc-
Cost: US$45 billion ture corridor and steel manufacturing complex
Timeframe: 3.5 year construction period. Proj- which they claim will revolutionise global steel
ect design and feasibility study commences in manufacturing. Poised to be one of the biggest
construction challenges in the nation’s history,

Project Iron Boomerang will link the Pilbara iron
ore mines in Western Australia with the Bowen
Basin coal mines in north Queensland via a
3,300km rail line. The infrastructure, services
and resource linkages will support and fuel two
Steel Precincts, one on each coast, which will
manufacture slab steel for export.
The purpose built transcontinental railway line aBout the authoR

will link Australia’s two great ore bodies for steel-
Jody Elliott is the founder and
making, iron ore from the west coast and met-
director of The Resource Channel,
allurgical coal from the east coast. The trans- the leading, award-winning
continental railway will be dedicated to carrying employment news and job board
website for the Australian resource
sector covering mining, oil and gas,
and construction. She has 15 years
Steel Precincts.
in management roles with major
resource sector employers and is a
The project’s primary objective is to service and regular speaker at conferences and
facilitate the production of slab steel in Austra- in the media.
Please forward your feedback or

quantities of seaborne iron ore and coal con-
enquiries to
sumed in the world’s steel production cycle. info@theresourcechannel.com.au
The Leading Logistics Network
1st: We are the 1st intergrated

logistics network in Africa
24: The number of port & rail concessions
43: The number of African countries

where we are present
250: The number of subsidiaries in Africa
250: Million Euros investments per year
2 010: Million Euros turnover per year
6 000: Transport vehicles used in Africa
22 000: The number of people

employed in Africa
3 500 000: Containers handled per year
6 500 000: Tons of freight handled per year
8 000 000: Square metres of

warehousing space and yards
A Partner with a strong and integrated network
SDV South Africa Pty Ltd. 24 Covora Street, Jet Park

Project Business Development - Caroline Brownson, Tel: +27 11 398 5000

Noordin Mengal Speaks About Balochistan in An Interview With The Canadian Magazine, International Resource Journal

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112 ASIAp Seeds of distrust

IN THIS ISSUE ExclusivE intErviEw wEst africa Mongolia and

the acRiMonious Relationship between leadership in Balochistan and

The situation has also prompted a US Repub-

PHOTO COURTESY OF BALOCHVOICE.COM

As long as it is occupied territory and as long as

2002 -Implementation of National Mineral -Thousands of Baloch flee villages

-Baloch nationalist leader and 2012 -US Congressman Dana

Wilson International Centre for Scholars says that

Games and players

JAVED NOORANI both local and global actors gate-crashing to shop

The country’s reserves appear to run dozens of kilometres, estimated to be

Chinese assurance to the country? It is hard to

decades, prompting an arms race which industrial consumptions.

takes important resources away from the

Meanwhile, Afghanistan is in the firm grip to loosen Russia’s monopoly grip.

of political instability and insecurity but

throttle the Iranian nuclear program and engineer

natuRal Gas pRoVed

world’s natural resources, this situation is inten-

about China’s indifference and stated that China has

inteRnational eneRGy outlook cent between 2008 and 2035, representing

2011 an average annual growth rate of 1.6 per

S.No Kind of Energy Region Quality Billion Cubic Feet

1 Gas Aqcha 300

3 Gas Elikrabt (Aqcha) 500

Engineer Sadiq Niazi)

Tajik basin was subjected to intense seismic

to Congress and said that such a pipeline was

GEOLOGICAL, EXPLORATION AND DRILLING SUPPLIES

GEOLOGICAL, EXPLORATION & DRILLING SUPPLIES

“This project is on the cusp of being devel-

stand out and we are going to kick that goal,”

ERAL INDUSTRY ENVIRONMENTAL AWARD

which has a resource of 16 trillion cubic feet and

Emerging and frontier jurisdictions

current depressed lows. The market cap remains

pRiVate equity Bets on oil exploRation

strong tailwinds in the coming years as energy

by UBS and Royal Bank of Canada.

Emerging and frontier jurisdictions

codelco chieF ResiGnation May sMooth

Emerging and frontier jurisdictions

ability of raw materials from Indonesia appear to

GlencoRe take MaJoRity contRol oF dRc

Emerging and frontier jurisdictions

nsl BecoMes FiRst FoReiGn iRon oRe pRoduceR

the Indian domestic market, marking its transi-

company has had to overcome many challenges.

Phase 2 of the project will comprise the

and 62 per cent Fe.

“With the increase in funds being allocated

Emerging and frontier jurisdictions

of adjacent cretaceous prospects, which could

of data from this new well and 3D seismic.

150 what went w

wRonG with ypF

the tRinidad option

GOUDRON WELL IN TRINIDAD

ICACOS FIELD WELL

Baropex is an independent advisory firm with a

widely available products and techniques to deal

Area 4, Southern Offshore Malta (10 per cent

t-POHMJOJOHVQUPMCT CPVM7JHOFBVMU 1P#PY