› DIER › Annual Reports › 2004 Annual Report › Output Group 6

MINERAL RESOURCES MANAGEMENT AND ADMINISTRATION
Mineral Resources Tasmania (MRT) provides services to the mineral exploration, mining, quarrying and mineral processing industries, for infrastructure development, and to land management groups for geohazards, construction materials and groundwater.

The primary role of MRT is to ensure that Tasmania’s natural mineral resources are managed in a sustainable way now and for future generations in accordance with the goals of Tasmania Together, and to ensure that there is a fair and sustainable return to the community when mineral or petroleum resources are developed.

MRT is responsible for the:

collection, integration, interpretation, publication and presentation of geoscientific information;
collection, integration, interpretation, publication and presentation of information on Tasmania's land stability and groundwater issues;
regulation of mineral and petroleum exploration in Tasmania, including offshore waters administered by the State, and the promotion of vacant areas available for onshore and offshore exploration;
setting and monitoring of standards for both the performance of exploration activities and the technical reporting of exploration records and case histories;
environmental appraisal, monitoring and management of mining heritage and land access issues; and
issue of legal titles for mining tenements, collation and recording of statistics relating to mining production, collection of fees and rentals, management of royalty regimes, and recording of mining tenements.
Growth in mineral exploration activity is essential for the future development of the mineral sector and for the economic well-being of Tasmania. Mining and mineral processing accounts for over 40% of Tasmania’s export capacity.

MRT, by providing information on areas of high mineral and hydrocarbon resource potential in Tasmania, encourages private sector exploration which will lead to new operations coming on stream as the economic life of existing operations declines.

By ensuring an adequate return from our mineral resources, all Tasmanians can share the benefits of our mineral wealth. There were encouraging signs that mineral exploration activity, both at operating mines and regionally, was starting to recover by the latter part of 2003/04.

The mining industry in Tasmania again experienced difficult, but improving, conditions during the year. Commodity prices recovered in United States dollar (USD) terms throughout the year, but this was partly countered by a rise in the value of the Australian dollar. Towards the end of the year, a decline in the value of the Australian dollar had a significant effect on improving the profitability of mining operations.

This cycle was felt most strongly at the Renison Bell tin mine, which was under administration for the bulk of the year. Following a decision to remove dewatering pumps in January 2004, the Administrator of Renison Bell Limited announced in March that he had accepted an offer by Bluestone Nominees Pty Limited to purchase the mine. The company is now restoring the mine’s infrastructure and plans to resume production by the end of 2004.

All other mines continued to perform strongly during the year. The Rosebery mine became part of a new company, Zinifex Limited, and is now operating without an Administrator. By year’s end, major exploration programs were underway at the Henty, Beaconsfield, Rosebery and Mount Lyell mines, with encouraging results reported from Beaconsfield.

Allegiance Mining NL had developed an exploration decline at the Avebury nickel deposit to 110 metres by mid-June. The company plans to conduct a full feasibility study and development approvals in parallel to enable production to commence by the end of 2005.

An increase in the price of iron ore pellets has improved the viability of the Savage River mine and Australian Bulk Minerals is seeking a partner to enable the mine to continue as an underground operation in the future.

The Thylacine gas discovery in permit T/30P and the Yolla gasfield are both in Tasmanian waters and are to be developed in the near future. The gas from both these fields will be piped to Victoria.

The major initiatives and issues affecting MRT in 2003/04 included:

Enhancing the provision of geoscientific data through the Tasmanian Information on Geoscience and Exploration Resources (TIGER) system;
Undertaking a series of promotional activities to encourage mineral exploration in Tasmania which was at a low level at the beginning of the year;
Completion of a three-dimensional model of the geological structure and major mineralising pathways of Tasmania to provide new information for explorers;
Completion of the second (final) phase of the Western Tasmanian Regional Minerals Program study; and
Provision of an appropriate level of resources for environmental monitoring of exploration and mining tenements, and for inspection of mines and quarries.
The major issues and initiatives for 2004/05 are to:

Continue data upgrade of the TIGER system;
Continue the promotional program to encourage mineral exploration in Tasmania;
Produce land stability maps of urban areas in Tasmania, in line with the guidelines developed following the Thredbo disaster;
Complete the series of planning information maps with regard to groundwater; and
Continue rehabilitation of abandoned mining sites in Tasmania.

Key clients
The major clients of this Output Group include the Minister for Infrastructure, Energy and Resources, the various levels of government, infrastructure developers, the mining and mineral processing industries, and the general public.

How this Output Group is delivered
This Output Group is delivered by Departmental officers, in close liaison with industry bodies, local government and other government departments.

Achievements Against Strategies Identified for 2003/04
New Initiatives to Stimulate Mineral Exploration in Tasmania
According to the Australian Bureau of Statistics, investment in mineral exploration, for minerals other than petroleum, was $3.9 million for the first three quarters of 2003/04, an increase of 18% on the corresponding period of 2002/03. The March 2004 expenditure of $1.7 million was the highest expenditure since the June 2001 quarter.

Part of the recovery is due to the stimulus provided by the study to produce a new three-dimensional geological model of Tasmania including an integrated exploration database and a prospectivity analysis (the 3-D Model). This project was conducted by the Predictive Mineral Discovery Cooperative Research Centre at the University of Melbourne, with input from MRT and the CODES Special Research Centre at the University of Tasmania. The model was released by the Minister for Energy and Resources in October 2003.

The three-dimensional geological model has been widely promoted and well received by explorers. It is available in a number of formats used by industry and also as a movie demonstrating the key features contained within the model. A copy is available on a computer in the MRT library for client viewing.

Promotion of Mineral and Petroleum Potential
The Government provided $75,000 in 2003/04, through the Department of Economic Development, to actively market mineral exploration opportunities in Tasmania. Activities undertaken included the holding of a display at the world’s leading exploration forum, the Annual Meeting of the Prospectors and Developers Association of Canada (PDAC), and visiting leading international mining companies in Toronto and Vancouver, both as a part of an Australian team.

Several meetings were also held with companies on a one-on-one basis with DIER personnel. Displays highlighting the new 3-D Model were presented at the PDAC meeting, at the Mining 2003 meeting in Brisbane in November, and at the international 24 Carat Gold Workshop held in Hobart in June 2004.

Promotional missions and functions were conducted in Perth, Sydney, Brisbane and Adelaide by officials from DIER and the Department of Economic Development. During these visits, new information resulting from the 3-D Model, the Western Tasmanian Regional Minerals Program and the improved client access to MRT information using the TIGER information management system, were all well received. In particular, there was very strong support for the 3-D model as a world-first detailed analysis of an entire jurisdiction.

These promotions have been successful and continue to play a direct part in attracting new exploration companies to Tasmania and in the generation of new exploration projects with a projected total expenditure of over $4 million.

Five offshore petroleum areas were released for bidding in 2003/04. These areas, in the Sorell and Otway basins off the West Coast and in the Bass Basin to the north of Tasmania, were actively promoted at the Australian Petroleum Production and Exploration Association conference held in Canberra in March 2003 and at the AAPG conference in Denver in April 2004. A production licence was issued over the Yolla gas field in Bass Strait.

Collection, Integration, Interpretation, Publication and Presentation of Data
Verification, upgrading and loading of information into the TIGER system continued. The TIGER system has a single geoscience data model with user interfaces for groundwater, geohazards, geophysics, drilling, mineral deposits, samples and geochemistry. Once loaded the information is made available to clients using the MRT website. Other information available includes mineral tenements and documents held by MRT and general information for MRT and DIER clients.

Downloads from the MRT website continued at a high level with a total of 172 gigabytes downloaded during the year and a peak of 56 gigabytes downloaded in August 2003. Two full-time staff provide ongoing maintenance and development of this information management system. In addition to data being accessed from the MRT website, 119 data packages were distributed on CD to clients.

The collection and presentation of information on Tasmania’s mineral wealth and geoscientific nature continues. Forty-seven 1:25 000 scale geological maps were prepared for digital capture, with data capture/output being completed for 40 of these areas. The high number of maps produced was in part due to funding from the WTRMP. There was again some limited field checking in some areas, but primary geoscientific data acquisition was again essentially suspended for the year.

A collaborative study with Geoscience Australia on the mineral potential of Tasmanian granites was commenced.

Work continued on the completion of the groundwater database with the aim of eventually providing more information via the internet than is available at present.

Compilation of a series of maps, designed to provide information to land use planners in an easily understood format, was completed and will be updated from time to time. This information will allow local government and land and infrastructure planners to make informed decisions relating to development, zoning and land use activities.

The maps include information on mineral prospectivity, location of mines and quarries, location of current exploration licences and mining leases, construction material locations, and areas subject to land stability problems. Information on groundwater prospectivity was also gathered with twenty-one draft 1:100 000 scale groundwater prospectivity maps completed. These maps, which are subject to review, will be distributed to municipal councils when finalised as part of the partnership process.

In association with the 1:100 000 scale Municipal Planning Series maps, eight draft digital 1:250 000 scale groundwater prospectivity maps were produced; these are also subject to review. In partnership with the Department of Primary Industries, Water and Environment, a digital 1:500 000 scale Groundwater Flow Systems Map of Tasmania was completed.

Land instability is a significant hazard in Tasmania, with many homes having been destroyed over the years and significant damage caused to infrastructure. By studying and understanding the landslide hazard it is often possible to minimise the effects of land instability. MRT is actively addressing this hazard in three main areas.

A regional landslide hazard assessment of the Greater Hobart area is being undertaken, drawing on a methodology that uses a combination of geological, geomorphological and geotechnical information. The resultant hazard classification maps will assist councils to make informed decisions on planning issues, especially given the pressure from property developers to subdivide marginal lands.

A database has been developed to store all Tasmanian landslide information as part of the TIGER system. This database has been built to meet international standards and will be available to stakeholders via the internet. Such information can be critical during times of emergency or for long-term planning purposes.

For many years MRT has monitored several landslips in northern Tasmania that have affected roads, railways and subdivisions. Work commenced on a compilation of landslide movement and damage data combined with geology and a detailed evaluation model for the Beauty Point area. An upgrade of the existing advisory zones maps of the Launceston area was undertaken with fourteen new maps produced. The six 1:25 000 scale Northwest Tasmania Land Stability maps were also upgraded.

Western Tasmanian Regional Minerals Program (WTRMP)
A Reference Group, with an independent chairman and members drawn from the Tasmanian Minerals Council, the Department of Industry, Science and Resources and MRT, developed a series of projects to implement the geoscience infrastructure recommendations of the Final Regional Development Plan of the Western Tasmanian Regional Minerals Program. The Commonwealth extended the term of the funding for the Western Tasmanian Regional Minerals Program to 30 June 2004 to allow a number of small projects to add value to the work already completed.

A joint project with the CSIRO has made hyperspectral data over part of the Mt Read Volcanics available to explorers as an example of the application of this recently developed airborne exploration technique. MRT is able to distribute basic digital hyperspectral data and a variety of hardcopy products showing alteration and mineral information. A preliminary evaluation of the data has shown widely distributed alteration of types that are commonly associated with mineralisation. A number of these areas have also been subject to ground truthing.

The new aeromagnetic data acquired during the WTRMP abutted several pre-existing surveys for which only paper copies of the data were available. These older data have been captured and converted to modern digital survey format and represent a significant improvement over the digital data previously available.

Projects utilising the WTRMP geophysical data to re-evaluate the geology and mineral potential of the Mount Read Volcanics and the aureoles of Devonian granites, the two most important mineralised rock associations in western Tasmania, have been completed. The former project has identified new exploration opportunities and has been partly responsible for attracting new exploration companies to Tasmania and two new projects, which are estimated to involve over $1.6 million of exploration in their first two years.

Following completion of the three 1:100 000 scale compilation maps of the Mount Read Volcanics in 2002/03, a revision and simplification of the geological nomenclature for the belt and revision of forty 1:25 000 scale map sheets was completed. This data will be captured during 2004/05 and will provide an updated unified coverage of Tasmania’s premier mineral belt to the considerable advantage of the exploration industry.

As a result of remodelling of the Devonian–Carboniferous granitoids, a new 1:500 000 scale map showing the major granitoids of Tasmania was produced.

A collaborative study between MRT, Geoscience Australia and the National Centre for Petroleum Geology and Geophysics to improve the knowledge of the petroleum potential of the offshore Bass and Sorell Basins continued during the year. A set of CDs presenting the final results of this study was launched at the Australian Petroleum Production and Exploration Association conference in March 2003.

Setting and Monitoring of Standards for Exploration Activities
MRT is responsible for ensuring that all exploration activity in Tasmania achieves the highest environmental standards and complies with the Mineral Resources Development Act 1995 and the requirements of other legislation which protects, for example, threatened species and cultural heritage.

The fourth edition of the Mineral Exploration Code of Practice outlines the current requirements, the approvals process, and the controls and monitoring procedures that MRT has in place. The Code should be reviewed at five yearly intervals to maintain consistency with the Tasmanian Reserve Management Code of Practice.

During the year 43 exploration work programs were submitted to MRT. Of these programs 39 were approved, 14 of which were in reserves derived from the Regional Forest Agreement (RFA) and required assessment by the Mineral Exploration Working Group.

To comply with the RFA, MRT has developed a system to spatially record exploration activity and attributes that chart the process of approval of individual work programs. All work programs, whether on Crown land, State Forest or private property, are entered on this system to give a complete record of all the environmental information relating to exploration.

The system has also been designed to provide ongoing information on the outcomes of rehabilitation of exploration activity. Compliance auditing of this system requires verification that the agreed approval process is adhered to and that derived statistics reflect the RFA and the recommendations of the Resource Planning and Development Commission.

Rehabilitation of Mining Lands Trust Fund
Funding to rehabilitate abandoned mines flows from an agreement between government and the mining and quarrying industries whereby a proportion of the royalty increase introduced in 1995 was to be allocated for rehabilitation.

In 2003/04 major works were completed at the Mt Bischoff tin mine, where drainage was constructed to reduce the acid discharge from the site, and at Balfour and near St Helens where former mine sites were revegetated. Safety works were carried out at Mt Bischoff where a number of shafts were capped in the interests of public safety.

Special Initiative — Core Library
A successful application was made for Capital Investment Program funding for $465,000 to extend the core library in 2004/05.

Royalty Assessment
MRT is responsible for the collection of mineral royalties from Crown land tenements. Royalty is not a tax but a payment to the community for the purchase of non-renewable resources from the State.

The Tasmanian royalty regime operates under two systems depending on the type of resource recovered. Companies producing a metallic mineral or coal pay under a two-tiered system where royalty is paid on the net sales and profit from a mine. Royalty on the recovery of non-metallic minerals on Crown leases is set on a per cubic metre or per tonne basis.

MRT conducts a royalty audit program to ensure tenement holders are paying in accordance with the legislation. The audit program concentrates on the metallic mines which pay royalty based on net sales and profits.

Mineral royalties totalling $8.9 million were collected during the 2003/04 financial year. Royalty revenues improved markedly this year due to improving commodity prices and operating conditions at the mines. Strong demand for commodities from China resulted in strengthening commodity prices, although the rising value of the Australian dollar negated a lot of the benefits of the price rise.

The situation improved towards the end of the year with the Australian dollar reducing in value and finishing the year below USD 70 cents. During 2002/2003 the Renison tin mine went into voluntary administration after struggling with low tin prices for some time

Centre for Ore Deposit Research, Special Research Centre (CODES-SRC)
Funding is provided under this Output for support for CODES-SRC at the University of Tasmania in conjunction with the Commonwealth Government and industry. The allocation is used to part-fund honours and higher degree scholarships, and thus help increase the knowledge of Tasmanian geology, particularly in the important fields of economic geology and mineralisation. The MRT Library receives a copy of each thesis, which is available for reference use.