These Northern Territory miners just dug up a record-breaking $4.5bn haul
The Northern Territory is turning into quite a substantial mining hub, recording its highest ever annual mineral last year.
Mineral production in the Territory punched through the $4 billion mark for the first time last year, hitting $4.5 billion in the year to June. That’s a 24 per cent increase over 2017.
The NT has the smallest population in Australia but ranks third in terms of land mass.
Like Western Australia, the NT’s economy is largely driven by mining and its economic growth has been impacted by the recent prolonged downturn, with greenshoots now just starting to emerge.
The NT is abundant with minerals like bauxite, copper, diamonds, gold, iron ore, manganese, potash, rare earths, uranium and zinc.
There are more than 60 ASX-listed explorers and producers active in the NT.
>> Scroll down for a list of ASX stocks with projects in the NT, courtesy of leading ASX data provider MakCorp
The largest increases in production came from the bauxite, gold, zinc and manganese producers.
Bauxite production jumped 30 per cent to 12 million tonnes, gold climbed 24 per cent to 600,000 ounces and zinc and manganese production were both ahead 15 per cent.
Great prospectivity, but approvals take too long
But if the Territory wants to grow these numbers further, it needs a serious re-think of its approvals processes, according to explorers active in the region.
Prodigy Gold (ASX:PRX) managing director Matt Briggs told Stockhead he left Gold Fields to join Prodigy because the NT was one of the most prospective and under-explored areas in Australia.
“You’ve got Callie being 14 million ounces, then Groundrush up there at 1.6 million ounces and Granites is about 2 million ounces,” he said.
“There has got to be more deposits just in the Tanami like that.”
Prodigy thinks it has uncovered a new Tanami-style gold system at its Capstan prospect, which is part of the Bluebush project.
The company has defined gold mineralisation over 8km, with multiple trends up to 4.5km long and 750m wide.
It is starting a new 5000m drilling program in the next few weeks.
In the NT explorers can only drill for about nine months of the year because of the wet season, so they need a relatively quick approvals process to achieve what they want in that time.
But approvals take just a bit too long at the moment. This has seen the Territory drop down the Fraser Institute’s Investment Attractiveness Index seven places to 27th.
“There’s only so far that you can plan ahead and when you’re in the exploration game you’re drilling the holes because you don’t know what you’re going to get,” Mr Briggs said.
“You need to have that flexibility and the rapid turnaround so that if you drill five targets you know the next one to get approved, and because you’ve only got that nine months drilling window because of the wet season you have to make use of the drilling season as you can.”
Right now an explorer needs to get approvals from the Department of Primary Industry and Resources as well as local government, and in some cases from the Environment Protection Authority (EPA) depending on where they want to explore in the NT.
“Between the three of them that adds up compared to jurisdictions like Western Australia.”
Things are looking up
The regulatory environment has improved in recent years, however, says Korab Resources (ASX:KOR) executive chairman Andrej Karpinski.
“I have been here for about 13 years and it’s a lot better than it was a couple of years ago,” he told Stockhead.
“If they keep going that way it’s going to become one of the best areas to operate.”
Earlier this year Korab said it was divesting its non-core projects in Western Australia and Ukraine to focus on its Winchester magnesite project in the Territory.
Magnesite is traditionally used in magnesia cements, building materials, flame retardants and animal feeds and fertilisers.
But it is now also attracting attention for its use in magnesium-ion batteries.
Korab plans to lodge its notice of intent to mine later this month and is aiming to be in production next year.
Phosphate explorer Verdant Minerals (ASX:VRM), meanwhile, has been told by the NT EPA that the regulator won’t be able to complete the final assessment for its phosphate project within the statutory 35-day period.
“The NT EPA has advised the company that it is unable to meet its statutory timeframe and that it expects that the final assessment report and recommendations to the relevant
Northern Territory ministers will be completed and made public around mid-October 2018,” Verdant told investors on Friday.
Verdant needs the final assessment report and recommendations to secure the necessary regulatory licences so the company can make a final investment decision.
But the NT government says it is doing everything it can to unlock more private investment and further grow the economy.
“There are a number of new mining projects across the Territory actively and successfully progressing through the approvals process,” Minister for Primary Industry and Resources Ken Vowles said.
“The seven mining projects with Major Project status – including five proposed mines in central Australia – have the potential to deliver up to $5.7 billion in capital expenditure, 3000 jobs during construction and 2000 jobs during operations.”
Mr Briggs says the government is doing a lot to try and reform the approvals process.
“What those reforms are on the environmental side we do not know,” Mr Briggs said.
“The mines department has been working with [Prodigy] specifically, but also with [the Association of Mining and Exploration Companies] and the [Minerals Council of Australia] to reform the mine management plans for exploration, which is the approval mechanism, and they have come up with a much simplified template.
“That’s meant to come out in the early new year. We would rather see that come out this year so all the applications we do during the wet season can be on the new simplified template.”
Here’s a table of ASX stocks with projects in the NT, courtesy of leading ASX data provider MakCorp.
Swipe or scroll to reveal full table. Click headings to sort
Stockhead is proud to use MakCorp as a provider of great value, accurate and reliable data on ASX-listed mining stocks. For more information head to MakCorp’s website.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.