Monsters of Rock: Exploration is so hot right now WA needs another mining judge
It’s no secret a lot of money is being raised for drilling right now.
$982 million was spent on exploration around the country in the September quarter last year, a figure that many in the industry expect to be larger come the December quarter release.
The vast bulk of that cash is spent in WA.
More cash means more pegging, the act of marking out and applying for mining tenements to explore, drill and extract minerals.
It also means more disputes, especially in WA, where the Warden’s Court holds hearings across the State to settle complaints that arise for a variety of reasons, most amusingly the art of midnight pegging.
Mining tenements in WA expire at midnight, which means that’s when hot ground is normally marked out, often by multiple teams representing different actors who never even see their rivals under the cover of darkness.
If you can’t split who applied first, it goes to a ballot. Basically whoever’s name gets picked out of a hat, meaning a down on their luck fossicker could theoretically beat BHP to a prospect.
Mines Minister Bill Johnston said today another warden will start in March to deal with the backlog, with mining title applications soaring in WA over the past three years.
“Western Australia’s resources sector has seen, on average, a 12 per cent increase in mineral title applications each year since 2019, which is an indication of the sector’s strong performance,” he said.
“This has led to a rise of contested mineral title applications before the Warden’s Court and in this competitive market it’s expected to continue growing.
“Dealing with these application matters through an accessible and efficient justice service is fundamental to a sustainable minerals resource industry.”
Warden’s court disputes are normally ho-hum affairs which tend to end with a settlement of some kind.
But every now and then comes a case that captures the public imagination, many involving the largest names in the business.
One of the most famous was the Shovelanna dispute in 2005, when then Perth iron ore junior Cazaly Resources (ASX:CAZ) picked up a Pilbara iron ore deposit Rio Tinto (ASX:RIO) later said it had let expire by accident.
The Resources Minister John Bowler sided with Rio, exercising his power to restore in the interests of the State.
That sparked a long court dispute that Rio eventually won, though its lack of action since in developing the mine led to questions over whether it was the right call.
A few years earlier billionaire prospector Mark Creasy (then just a very rich multi-millionaire) took umbrage after losing out in his bid to peg the tenement immediately south of the Bronzewing gold mine near Wiluna he had sold to Joseph Gutnick’s Great Central Mines for upwards of $100 million in the early 90s.
The winner was a man by the name of Leith Beal, who had arranged to deliver the ground to junior explorer Audax Resources, of which he later became a director.
Creasy disputed it and took the case all the way to the High Court, where Beal eventually won out. In the end it was all for nought. No one has been able yet to turn up a major discovery to the south of the 4Moz Bronzewing, now part of the Northern Star Resources (ASX:NST) stable.
Lynas Rare Earths (ASX:LYC) has been given the go ahead by WA’s Environment Minister Reece Whitby for a $500 million cracking and leaching plant in Kalgoorlie.
The new plant will be licensed to produce 168,000tpa of rare earths concentrate and 68,000tpa of rare earths carbonate a year for delivery to Lynas’ refinery in Malaysia, pending a number of conditions including providing plans for the storage of gypsum and iron phosphate waste from the plant.
Lynas said in a statement it is now acquiring secondary approvals before launching into full scale construction of the project, which brings part of the downstream rare earths supply chain to Australia’s shores for the first time.
“Lynas is very pleased to be progressing this important project to establish a Critical Minerals value added processing facility in Kalgoorlie which meets the strict environmental conditions of Western Australian regulators,” Lynas said.
“This is consistent with our environmental, social and governance (ESG) approach, our commitment to operating in a way that is safe for our people, our communities and the environment and our objective to contribute positively to the communities in which we operate.”
Rare earths prices have been on a tear lately, rising consistently across the back end of 2021.
They are up around 12% year to date, with Lynas’ highest value product NdPr oxide fetching ~US$150/kg according to the Shanghai Metals Market.