PROFILE OF MAJOR MINERALS, OIL AND GAS

This section is based mainly on information provided by Geoscience Australia and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). Values are given in Australian currency unless otherwise stated.

MINERALS

Maps 18.24, 18.25, 18.26 and 18.27 show selected mines and deposits. Map 18.24 covers deposits of gold and diamonds, map 18.25 bauxite, iron ore and manganese ore, map 18.26 base metals (copper, zinc/lead and nickel) and mineral sands, and map 18.27 black and brown coal and uranium.

Bauxite, alumina and aluminium

Bauxite is a heterogeneous naturally occurring material from which alumina and aluminium are produced. The principal minerals in bauxite are gibbsite, boehmite and diaspore (which has the same composition as boehmite but is denser and harder). Bauxite is the ore from which alumina (aluminium oxide) is extracted, while aluminium is produced from smelting alumina.

Australia’s aluminium industry is a large integrated industry of mining, refining, smelting and semi-fabrication, which is of major economic importance nationally and globally. Its 2009 economic demonstrated resources (EDR) of bauxite (6 gigatonnes (Gt)) provides a world class resource base for the industry, which comprises five bauxite mines, seven alumina refineries, six primary aluminium smelters, twelve extrusion and two rolled product (sheet, plate and foil) mills.

In 2009, Australia was the largest producer of bauxite and alumina. Production in 2009 totalled 63 million tonnes (Mt) of bauxite (table 18.29), 20 Mt of alumina and 2 Mt of aluminium (ingot metal). Steadily increasing interest and investment from China (excludes SARs and Taiwan) has accelerated changes in Australia's bauxite exploration, mining and processing industries in recent years. In November 2009, the first shipment of bauxite from the Bindoon project in Western Australia was loaded for export to China.


Coal

Black coal forms under conditions where vegetation is buried under intense pressure and temperature over millions of years to form a sedimentary layer of rock.

Black coal is a sedimentary rock formed from vegetation which has been altered by temperature and pressure over millions of years. Black coals are distinguished by rank and may be sub-bituminous, bituminous or anthracite. The higher ranked black coals are primarily used for electricity generation and the production of coke, which is integral to the production of iron and steel. Black coal is also used as a source of heat in the manufacture of cement and in food processing.

Brown coal, also known as lignite, is a less matured form of coal. It has high in situ moisture content (up to 60%) with a correspondingly low heating value. It is highly susceptible to spontaneous combustion. Brown coal is used widely for power generation, is made into briquettes and can be converted to liquid or gaseous fuels.

In December 2007, there were 118 operating black coal mines in Australia (74 open cut, 44 underground) with many new deposits added (mainly in Queensland) in 2009. In 2009, most of the coal was produced in Queensland (55%) and New South Wales (42%), with locally significant operations at Collie (Western Australia), Leigh Creek (South Australia) and in the Fingal Valley and at Kimbolton (Tasmania).

In 2008–09, Australia produced 441 Mt of raw black coal which yielded 340 Mt of saleable coal. Exports of black coal for 2009–10 comprised 157 Mt of metallurgical coal valued at $25 billion and 135 Mt of thermal coal valued at $12 billion.

Australia had 7% of the world’s recoverable black coal EDR (as at the end of 2009) and ranked fifth, with the United States of America (31%) ranking first.

Australia produced about 6% of the world’s black coal in 2009 and ranked fourth, with China (excludes SARs and Taiwan) ranked first (49%).

Australian brown coal production for 2008–09, all of which was from Victoria, was 68 Mt. The La Trobe Valley mines of Yallourn, Hazelwood and Loy Yang in Victoria produce about 98% of Australia’s brown coal.

Australia has the world’s largest recoverable brown coal EDR (25%). However, it produces only about 7% of the world’s brown coal and is ranked the fifth largest producer after Germany (21%), Russia (10%), Turkey (9%), and the United States of America (8%).


Copper

Copper occurs in various forms. It can occur naturally in its pure state (native copper) but is principally mined as chalcopyrite. Copper is one of the most important and widely used metals of modern society due to its properties of:

• high electrical and heat conductivity
• ductility and malleability
• resistance to corrosion and
• ability to form alloys with other metals.

These properties enable copper to be used in a wide range of applications. The largest use of copper is in the electrical industry where copper wire and cable account for about half of the world’s copper production. Other major markets are the motor vehicle and construction sectors. Copper is also an integral part of the expanding information and communication technology sector and is used in the manufacture of computers, mobile phones, fax machines and televisions.

Major Australian copper mining and smelting operations are at Olympic Dam (South Australia) and Mt Isa (Queensland), with smaller projects in New South Wales, Queensland, Western Australia and Tasmania. Australia’s EDR of copper at the end of 2009 was 80.4 Mt, giving it the world’s second largest holding of copper EDR with 13% of the total (after Chile with 27%).

In 2009, Australia produced 950 kilotonnes (kt) of copper (metal content). Despite lower production at the Ernest Henry operation, Queensland dominated Australian production with 31% (largely from Mt Isa). South Australia continued as the second largest producer with Olympic Dam, now one of the world's largest mines, producing 18% of national production. New South Wales produced 161 kt in 2009, Western Australia 145 kt and Tasmania 27 kt.

As a producer, Australia's copper mine production ranked sixth in the world in 2009, with 6% of world output.


Diamond

Diamond is composed of carbon, and is the hardest known natural substance. Diamonds occur naturally but are extremely rare compared with other minerals. They are thought to form deep in the earth at high temperatures and pressures and are carried to the surface or near surface by volcanic rocks in narrow cylinder-like bodies called 'pipes'. A large proportion of industrial diamond is manufactured, and it is also possible to produce synthetic diamonds of gem quality. Uses for diamonds include jewellery, computer chip manufacture, drill bit facing, and stone cutting and polishing. A diamond's mass is measured by carat weight, with one carat (c) defined as 0.2 grams.

Australia produced 15 million carats (Mc) of diamonds in 2009, making it the world's sixth largest producer of diamonds (all types) by weight after Botswana, Russia, Congo, South Africa and Canada. It is the fifth largest producer of industrial grade diamonds and the sixth largest producer of gem/near gem diamonds.

Australia's EDR at the end of 2009 of gem/near gem diamonds was 105 Mc and industrial diamonds 109 Mc. Australia's EDR of industrial diamonds is ranked third in the world, with 18% of world EDR. There are no detailed data available on world resources of gem/near gem diamonds but Australia's stocks are among the largest for this category.

Most of Australian production came from the Argyle mine in the Kimberley region of Western Australia, which produced 11 million carats. Production from the Argyle mine is mostly industrial and cheap diamonds. Due to a deterioration in global markets in 2009, production was suspended for three months and employment reduced by 61%, which resulted in production falling by about one third.


Gold

Gold has a range of uses but the two principal applications are as an investment instrument and in the manufacture of jewellery. Secondary uses, in terms of the amount of gold consumed, are in electronic and dental applications.

Gold resources occur and are mined in all Australian states and the Northern Territory. Australia’s EDR of gold (at the end of 2009) was 7,399 tonnes, the second largest in the world after South Africa.

Australian gold mine production in 2009 was 220 tonnes (metal content). This level of production made Australia the second largest mine producing country in the world in 2009, after China (excludes SARs and Taiwan) (300 tonnes). Australia’s largest producer mine in 2009 was the Super Pit at Kalgoorlie, with 19 tonnes, followed by the Telfer operation in Western Australia where 18 tonnes were produced. In 2009, Western Australia dominated Australian production with 152 tonnes, just over two-thirds of total Australian output.

During 2009, exploration spending on gold in Australia fell by about 19% to $463 million and its share of total exploration spending was 23%.


Iron ore

Iron is a metallic element which constitutes about 5% of the Earth's crust and is the fourth most abundant element in the crust. Iron ores are rocks from which metallic iron can be economically extracted. The principal iron ores are hematite and magnetite. Iron ore is the source of primary iron for the world's steel industries. Around 92% of Australian iron ore production occurs in the Pilbara region of Western Australia, an area known to have 80% of Australia's total identified resources. Small levels of production come from elsewhere in Western Australia, Tasmania, South Australia and New South Wales. Australia’s EDR of iron ore in 2009 was about 17% of world EDR, ranking Australia as the second largest iron ore holding in the world.

Australia's production of iron ore in 2009 was 394 Mt, which was 25% of the world's total iron ore production and made Australia the world's largest producer followed by Brazil at 19%. In 2009, Australia was the world's largest exporter of iron ore, shipping 363 Mt (natural weight) or 38% of total world exports. Brazil ranked second with 266 Mt (28%). The value of Australia's exports of iron ore and pellets in 2009–10 was $34.5 billion.


Manganese ore

Manganese is the twelfth most abundant element in the Earth's crust and the fourth most used metal in terms of tonnage, after iron, aluminium and copper. About 90% of the world's production of manganese is used in the desulphurisation and strengthening of steel. Other uses include the manufacture of dry batteries, as a colourant, and as an ingredient in plant fertilisers and animal feed. In 2009, manganese ore was mined in the Northern Territory and Western Australia.

Australia’s EDR of manganese ore, at 181 Mt (at the end of 2009) is 13% of world EDR, ranking Australia fourth, with Ukraine (29%) ranked first.

Production of manganese ore in 2009 reached 4.4 Mt, 14% of world manganese ore output, ranking Australia second behind China (excludes SARs and Taiwan) (32%). Australian production comes from three mines – Woodie Woodie (Western Australia) and Groote Eylandt and Bootu Creek (both in the Northern Territory).


Mineral sands

The three main minerals mined from Australian mineral sands deposits are the titanium-bearing minerals rutile and ilmenite and the zirconium-bearing mineral zircon. Rutile and ilmenite are used mainly in the production of titanium dioxide pigment. A small portion of total titanium mineral production is used in making titanium sponge metal. Zircon is used to make glazes on ceramic tiles opaque, and is used in refractories and the foundry industry.

Australia’s EDR of ilmenite at the end of 2009 was 200 Mt with 54% in Western Australia, 21% in Queensland and the rest in Victoria (12%), New South Wales (10%), and South Australia (3%). Australia accounts for 16% (the second largest holding behind China (excludes SARs and Taiwan) at 30%) of the world’s EDR of ilmenite.

Victoria has the largest share of Australia’s rutile EDR with 33%, followed by Queensland (25%), New South Wales (20%), Western Australia (19%) and South Australia (3%). Australia has the world’s largest EDR of rutile (49%), followed by South Africa (18%) and India (16%). At the end of 2009, Australia's EDR of rutile was 23 Mt.

Australia's EDR for zircon at the end of 2009 was 40 Mt, with Western Australia, Victoria and Queensland holding around 76% of Australia's zircon EDR. In world terms, Australia has the world's largest EDR of zircon, with 46%.

Although Australia has substantial EDR of mineral sands, Geoscience Australia estimates that around 17% of ilmenite, 15% of rutile and 16% of zircon EDR is unavailable for mining, as they are in areas quarantined from mining that are largely incorporated into national parks. Deposits in this category include Moreton Island, Bribie Island and Fraser Island, the Cooloola sand mass, the Byfield sand mass and the Shoalwater Bay area (all areas in Queensland), and the Yuraygir, Bundjalung, Hat Head and Myall Lakes National Parks in New South Wales.

In 2009, Australia produced 1.5 Mt of ilmenite, 280 kt of rutile and 476 kt of zircon. About 1.8 Mt of ilmenite was exported during 2009 as well as 587 kt of rutile and 744 kt of zircon from production and stockpiles. Stockpiled ilmenite was upgraded to synthetic rutile, with Australia producing 616 kt of this commodity.

Australia was the second largest producer of ilmenite in 2009 with 17% of world production, behind South Africa with 21%, and the largest producer of rutile with 49%, followed by South Africa with 23%. Australia was also the largest producer of zircon with 41% of world production, followed by South Africa at 34%.


Nickel

More than 80% of nickel production is used in alloys. When alloyed (mixed) with other elements, nickel imparts toughness, strength, resistance to corrosion and various electrical, magnetic and heat resistant properties. About 65% of world nickel output is consumed in the manufacture of stainless steel, which is used widely in the chemical industry, motor vehicle manufacture, the construction industry and in consumer products such as sinks, cooking utensils, cutlery and white-goods.

Australia's EDR of nickel was 24 Mt at the end of 2009. Western Australia has the largest nickel resources, with 91% of total Australian EDR. Australia holds the largest share of the world’s EDR (35% in 2009), followed by New Caledonia and Russia (both 10%) and Cuba (8%).

Australia's nickel mine production in 2009 was 166 kt, all of which came from Western Australia. The value of all nickel products exported in 2008–09 was almost $3.2 billion. Australia was the world’s third largest producer in 2009 (nickel content of all ores and concentrates), accounting for 12% of estimated world nickel mine production. Although nickel prices recovered during 2009, leading to increased production, some nickel mines were closed and others placed on care and maintenance. Russia was the largest producer with 262 kt (19% of world output), followed by Indonesia with 203 kt (15%).


Tantalum

Tantalum minerals have more than 70 different chemical compositions, of which tantalite, microlite, and wodginite are of greatest economic importance. Tantalum is used in the manufacture of capacitors required for the electronics and telecommunications industries. Approximately 60% of annual world consumption of tantalum is used in the electronics industries, with more than half used in the manufacture of mobile phones. It is also used in the chemical industry for its anti-corrosive properties.

Brazil has the world’s largest EDR of tantalum (65 kt), followed by Australia with 51 kt. Almost all (98%) of the Australian deposits are located at Greenbushes and Wodgina in south west Western Australia.

In 2009, Australia was the world's fifth largest producer of tantalum (in the form of tantalum concentrates). World production was estimated by United States Geological Survey (USGS) data to be 665 tonnes. Production was dominated by Brazil with 180 tonnes, which amounted to about 28% of world output. Australia produced 81 tonnes of tantalum in 2009 which was a decrease of 85% on the previous year's output.

Mining at the Wodinga mine in Western Australia remained suspended throughout 2009 because of a fall in demand for tantalum.


Uranium

Major uses for uranium are as fuel in nuclear power reactors, in the manufacture of radioisotopes for medical applications and in nuclear science research using neutrons from reactors.

Australia had 1,223 kt of uranium in reasonably assured resources recoverable at costs of less than US$80/kilogram of uranium at the end of 2009, representing around 47% of world resources in this category. Approximately 90% of Australia’s total uranium resources in EDR are within the following deposits:

• Olympic Dam (South Australia) which is the world’s largest uranium deposit
• Ranger, Jabiluka and Koongarra in the Alligator Rivers region (Northern Territory) and
• Kintyre and Yeelirrie (Western Australia).

Approximately 9% of uranium EDR is inaccessible for mining.

Three uranium mines operated in Australia in 2009 – Ranger open cut, Olympic Dam underground mine, and the Beverley (South Australia) in situ leach operations for a total of 7,982 tonnes, according to the World Nuclear Association. Australia, with approximately 16% of world uranium production in 2009, is the world’s third largest producer after Kazakhstan and Canada.

Exports of uranium oxide in 2008–09 were 10,114 tonnes, valued at $990 million. Exports of uranium are controlled by stringent safeguards, conditions which ensure that Australian uranium is used only for peaceful purposes and does not enhance, or contribute to, any military applications. Receiving countries must be a party to and comply with the Treaty on the Non-Proliferation of Nuclear Weapons, have a bilateral safeguards agreement with Australia and, in the case of non-nuclear weapon states, have an Additional Protocol, which ensures the International Atomic Energy Agency has access to and inspection rights in the recipient country. These requirements apply also to third party states that may be involved in processing and transhipment of the material.

Australian mining companies supply uranium under long-term contracts to electricity utilities in a number of countries, including the United States of America, Japan, China (excludes SARs and Taiwan), Korea, Republic of (South), Canada and several countries of the European Union.


Zinc, lead, silver

Zinc is the 23rd most abundant element in the earth's crust and the fourth most common metal in use after iron, aluminium and copper. The construction, appliance and vehicle manufacturing industries use large amounts of zinc, mainly as coatings on steel beams, sheet steel and vehicle panels in the automotive industry. The widespread use of zinc as a protective coating is due mainly to its resistance to normal weathering. Zinc is used also in brass, alloy die cast precision components, pigments, salts, as oxide additives to rubber and for agricultural chemicals as well as for wrought or rolled products.

The widespread occurrence, relatively simple extraction, and combination of desirable properties have made lead useful to humans since at least 5000 BC. In deposits mined today, lead (in the form of galena) is usually associated with zinc, silver and commonly copper, and is extracted as a co-product of these metals. More than half of the lead currently used comes from recycling, rather than mining. The largest use is in batteries for vehicles and communications. Less important uses include cable sheathing, solder, casting alloys, chemical compounds, ammunition, ceramics and glass in TV and computer screens for radiation protection. Uses for lead could increase in the future in large storage batteries used for load-levelling of electrical power and in electric vehicles.

The relative scarcity, attractive appearance and malleability of silver have made it suitable for use in jewellery, ornaments and silverware. Its extensive use in coins throughout history has declined over the past 50 years. In Australia, the 1966 fifty-cent piece was the last coin in general use to contain silver (80% silver, 20% copper). Silver is mined and produced mainly as a co-product of copper, lead, zinc, and to a lesser extent, gold. Currently, photographic paper and film followed by the electronics and jewellery/tableware industries are the most important users of silver. Other uses include mirrors, as an anti-bacterial agent, for example in water treatment (as an ioniser with copper in domestic swimming pools) and for biocide and bacteriostatic activity in plastic and textiles formulations.

Australian EDR of zinc at the end of 2009 was 58 Mt, which represents 25% of the world EDR and the largest share of the world's zinc resources. Queensland holds the largest amount of Australian EDR, with the Northern Territory, New South Wales and Western Australia also having holdings.

In 2009, Australia’s EDR of 31 Mt of lead was 36% of world EDR giving it the largest share of the world's lead resources. Queensland has around 59% of total Australian EDR. Other holdings are in the Northern Territory, New South Wales and Western Australia.

EDR for silver at the end of 2009 was 70 Kt (16% of world economic resources), with Queensland having the largest share at around 60%. Other holdings occur in South Australia, the Northern Territory, New South Wales and Western Australia.

Weak zinc and lead prices saw decreased production in 2009 with several mines on care and maintenance during the year. Of those that remained in operation, most pursued a high-grade, lower tonnage plan with reduced workforce and lower expenditure. Mine production of zinc, lead and silver during 2009 was 1,267 kt, 525 kt and 1,633 kt respectively. The majority of production was from Queensland, which contributed 63% to national zinc production for 2009, along with 72% of lead and 82% of silver. The Century zinc mine, which is located approximately 250 kilometres north of Mt Isa in north west Queensland, ranks in the top few zinc producing mines in the world. The Cannington mine, also located in north west Queensland, is the world’s largest and lowest cost single mine producer of both silver and lead and a significant producer of zinc.

In terms of world production in 2009, Australia ranked second for lead after China (excludes SARs and Taiwan), third for zinc and fourth for silver.


OIL AND GAS

Map 18.28 shows locations of significant oil and gas production, pipelines and oil refineries.




Crude oil and condensate

In 2008–09, Australia produced 28.8 gigalitres of crude oil and condensate. Western Australia and Victoria accounted for 68% and 17% respectively of the total combined production of these commodities.


Liquefied natural gas (LNG)

Australia is a major exporter of LNG, with exports in 2009–10 of 18 Mt, an increase of 20% over the previous year. Export earnings from LNG in 2009–10 were $7.8 billion.


Liquefied petroleum gas (LPG)

LPG is a valuable co-product of oil and gas production and petroleum refining. The major constituents of LPG are propane and iso- and normal-butane, which are gaseous at normal temperatures and pressures, and are easily liquefied at moderate pressures or reduced temperatures. Operations involving LPG are expensive in relation to other liquid fuels because LPG has to be refrigerated or pressurised when transported and stored. LPG is an alternative transport fuel for high mileage vehicles in urban areas, as well as a petrochemical feedstock and domestic fuel.

In 2008–09, Australia produced 3.9 gigalitres of LPG. The major producers were the Gippsland Basin and the North West Shelf, accounting for 41% and 40% of total production respectively.