Minerals and energy – kimberley development commission gas buddy

This represents half of Australia’s total resources value, and is dominated by the value of Pilbara and Commonwealth offshore petroleum production. The $356 million total share of WA production from the Kimberley is represents 0.34% of the state total.

In 2016-17, the Kimberley’s total mineral, oil and gas production contracted by around 70% with approximately 90% of value from diamonds and gold, then other precious metals, base metals and construction materials as shown in the chart below. All commodities declined in volume and value except gold, silver and gems.

Iron ore production previously dominated the mineral production values in the Kimberley. The dramatic decline is due to the closure of iron ore mines on Cockatoo and Koolan Islands, which had averaged over the previous decade annual production value of $340 million, however, these are expected to reopen in 2018 once port facilities are again functional. Similarly, mines going into ‘care and maintenance’* in 2016 led to 90% decrease in copper, cobalt and nickel. Continue reading

*Care and maintenance is a term used in the mining industry to describe processes and conditions on a closed mine site where there is potential to recommence operations at a later date. During a care and maintenance phase, production is stopped but the site is managed to ensure it remains in a safe and stable condition.

The value of minerals produced in the Kimberley has been fairly volatile as production is dependent on world demand. Geographically the Shire of Wyndham East Kimberley produced the greatest value of minerals ($270 million) in 2016/17, followed by the Shire of Halls Creek ($81 million), the Shire of Broome ($4 million) and the Shire of Derby West Kimberley ($1 million).

Iron Ore has been a valuable mining commodity with ore bodies on the Kimberley islands in the Buccaneer Archipelago of a very high grade. Recent closures of iron ore mines have impacted the Kimberley community and economy, however, operations may recommence in the future pending market / economic conditions and overcoming access issues to the Koolan Island pit due to inundation. Continue reading

The Kimberley is famous for its production of diamonds and accounts for all of Western Australia’s diamond output. The Argyle diamond mine south of Kununurra is owned and operated by Rio Tinto and is the largest supplier, by volume in the world and the only known source of pink diamonds. The region is also a significant producer of natural coloured diamonds including champagne, cognac, and rare blue diamonds. The mine has been operating since 1983 and has produced more than 800 million carats of rough diamonds. It is one of the world’s largest supplier of diamonds and the world’s largest supplier of natural coloured diamonds.

The east of Broome, the Ellendale Mine diamond mine which produced 50% of the worlds yellow diamonds closed in mid 2015. Recent exploratory drilling further to the east has identified new prospective and is considered a significant discovery by a global miner.

The Sheffield Resources Thunderbird Project is large-scale, long-life mineral sands mining and processing project located on the Dampier Peninsula located halfway between Broome and Derby, north west of the Great Northern Highway. Continue reading

Based on assessments of the quantity and quality of the resource, this resource is considered one of the world’s best Mineral Sands deposits with current projections indicate a mine life of more than 40 years. Sheffield have secured binding agreements for a significant proportion of the Zircon and Ilmenite production, and secured project funding. Sheffield is currently finalising Native Title agreement with the traditional owner Native Title claimants which must be settled prior to the granting of the mining lease.

Current plans include up to 100 jobs during construction through to processing production and the development of export capability through the Derby Port using ‘ship-loader’ infrastructure previously used for lead and zinc exports. With local contractors and a number of local aboriginal employees, Thunderbird has commenced initial approved earthworks in January 2018. First production is planned for the second half of 2019.

Heavy Rare Earth Elements (eg Dysprosium, Lutetium and Terbium) are important elements in the manufacture of modern electronics, medical imaging, permanent magnet motors of wind turbines and hybrid vehicles in renewable energy technology. Continue reading

However, the offshore extraction and processing of natural gas and the allied industrialisation of the Kimberley led to widespread protest and divided Broome. Consequently, gas processing trains are now located in the Northern Territory or floating LNG vessels. Floating LNG on Prelude is now hooked up and commissioning complete for start up in Q3 2018.

Most onshore oil and gas in the Canning Basin is shale gas and considered ‘tight’. Deposits in such geology require hydraulic fracturing or fracking to enable commercial extraction. Fracking is controversial in the Kimberley (as in southern regions) and campaigns by environmental groups have impacted the social licence for production and exploration ventures. In September 2017, the WA Government implemented a moratorium on fracking while a scientific enquiry is conducted in 2017-18. This ban applies during exploration and production for existing and future petroleum titles in the Kimberley.

Buru Energy is operating the Ungani conventional oilfield in the Canning Basin recommenced shipping crude oil out of the Wyndham Port in June 2017. Production ramped up from 1000 barrels per day (BOPD) in Q2 2017 to 1500 BOPD in Q4 2017 with a target of 3000 BOPD in Q2 2018. Buru Canning portfolio includes the Blina oil field east of Broome which went into care and maintenance after suspension of operations in February 2013.