*Pic: Flashback to August 2014 … Shree Minerals and its abandoned Tarkine mine-site. Finance analyst Tom Ellison did a thorough job on Shree HERE
Another picture of the abandoned Tarkine mine …
When Mathew Flinders and other mariners were circumnavigating and mapping the island they couldn’t help but notice powerful magnetic anomalies – which is to say their compasses swung unexpectedly and they understood there were large deposits of lodestone inland.
So there is a long history here of finding mines. During settlement later, tens of thousands of man-hours prospecting turned up several world class mineral deposits, mostly depleted by now and these were followed by smaller short-lived operations made possible by modern advances in mining and exploration technology and changing economics that turned the focus from small high grade lodes that were discovered and mined out a century ago to larger and lower grade possibilities amenable to mechanization. This meant production as a function of human labour had to rise exponentially which is not good news for the many, if back-breaking struggle for your daily bread is all you know in the deep dark forest.
And we still consider mining and forestry prime employers on the island, and state governments do what they can to maintain the illusion that well-paid work would still be available for unskilled voters if not for the intransigence of their political opponents. Here I will declare a personal interest, having done those jobs and with investments over both hemispheres. They paid well and despite having skills I always had to travel but you could accumulate a stake and do something else after the inevitable winding-up. That’s unless you were stupid enough to have put up your own money. And I have ‘lost my children’ to the world which is a good thing too because they could hardly have done as well locally. It’s enough to know they are doing well, and harder on them because in the longer term I and we are only going downhill. And the reason for this article is a recent Labor forum in Burnie.
All those fresh-faced young candidates were a breath of fresh air after the sleazy big blue billboards or Jackie Lambie’s worn yellow network resembling a police line-up. It was kind of a back to the future 50 years ago in high school when the A-class high school goodies ran for the student council. Anita Dow loves Burnie, inexplicably other than that she was once elected mayor if anyone noticed. And she will work tirelessly for Braddon as they all will if unimpeded in majority government, going for broke to mend the sick and employ the multitudes although never so broke as the blue legion who will sell out anything at any price to retain their perks and positions. The organization of the meeting had been flawless, even I received a phone message in time to get there had I forgotten, but there was no sound system so there were gaps. But buzzwords everywhere were sufficient to fill the blanks. And Rebecca White was gorgeous and completely honest with a Green sympathizer who went away knowing there was no joy for them in the forest wars of a full employment Labor future.
The goodwill and optimism were broken for me only on account of an equally grizzled old nobody snarling in my face how I was a total a**hole, personally responsible for having imported a shipload of Canadian spruce pulp and shutting down the Burnie pulp mill for the permanent loss of hundreds of jobs. So I am somebody after all but there was no point arguing obsolescence, the mainland Maryvale replacement plant, and the extermination of free old-growth timber all the way to Tullah. He claimed to have been a maths teacher once, but more likely a cunning old Labor stalwart from way back in the days of fisticuffs on the picket line or a demented ex-footballer. Their minds may deteriorate, only the days of girls and glory are never forgot.
That was a round-about response to my question about the incessant government spruiking of fly-by-night explorers who inevitably fail to clean up and the general throwing of public money down the mining industry rat-hole. Will it end under Labor? Shane Broad took the question itself and the answer must have been the complete platitudinous and carefully constructed Labor party policy; essentially no. It will be reminiscent of a command economy, assuming an ongoing jobs bonanza created not with the Stalinist stick but the capitalist carrot of more public money funnelled via a contractual system. These would be negotiated to protect government finances and money would be paid out only for agreed upon and completed outcomes. This is somehow different from the present government’s unconscionable money pot; and stirring the local sh** for political purposes with liberal donations of free publicity, and so hyping the highly unlikely to other investors who will lose their shirts too.
Outside of its ability to pull in fools, nothing is certain in this industry; not commodity cycles nor the existence of viable deposits nor the vagaries of bankers, brokers and and human nature. As Mark Twain said “A mine is a hole in the ground with a liar on top.” He knew it well, his own father was a sucker and young Samuel spent his childhood in worse than abject poverty because his family was devoid even of poverty’s surety; they were perpetually wealthy but always temporarily embarrassed and on the move.
One surprising statement from Mr Broad was that he believed deposits like Mt Lyell should be mined out completely to be truly environmentally responsible. That is not true of course, if the ore is left unblasted it will sit quite comfortably where it was for the last 100 million years, solid and protected by water from the inevitable oxidation that occurs if or when transformed into fine sulphide-rich tailings in long-term fragile and inadequate dams with ongoing maintenance issues. The Indian operators had acquired the mine for virtually nothing. If low copper prices and an overhang of deferred capital expenditure drove them off rest assured it is all over. If this once world-class deposit can’t be mined out it will be on economic issues. But who can tell; when grades and prices drop and operational expenses rise, a mine or ANY big business pushing the bounds of viability has nothing to lose, and there is no prize for guessing who has the upper hand in the game of blackmailing the local parliamentarians.
And there is another incongruity here for a Labor man. Old mines are death. They all are actually, my own experiences range from a near miss to better odds over shifts or months. In my first week on a first mining job I was knocked off a ladder on the side of the primary crusher feed chute when I opened a hatch and was met by a torrent of rocks. I reached down and grabbed the rung I was standing on as I went backwards over the void. Maybe I might only have broken my back on a handrail. More recently we were welding high up on the travelling chute above the concentrate bay at Mt. Lyell, part of which collapsed a month later. It had looked perfectly OK and a month doesn’t rate another heartbeat per second.
In the meantime there are tilt switches in chutes that jam, followed by tonnes of muck and broken belting hurtling down the walkways. Rod mills are accidentally activated while men are still inside. If only momentarily the corpses can be brought out in one piece. Mismapped addits and shafts full of mud and water are broached. Loaded ore trains compact themselves at top speed into the end of blind tunnels having inexplicably failed to slow and stop at the dumping point and scoop trams fall down shafts to the loading facility. Rocks burst from the walls under pressure in old deeps and older open pit walls come down because the grade angles have knowingly been fudged to avoid the expense of removing hundreds of thousands of tonnes of overburden. And in every one of them there is noise and an ever-present miasma of mist and contained dust that settles on everything; over years the cable trays are filled with solids and it builds on pipes and structural members. You breath it all the time in every mill and mine. It’s the subtle smell of your working life and you get to love it.
The Avebury mine was recently sold for $25 million to Dundas Mining Company. This has to be the bargain of the century – one hundred million at least must have been ploughed into it. The mill is intact and so the deposit is essentially free. The Chinese have uncharacteristically disappeared after making their investment. Only a fool wouldn’t take note when these guys walk away but rest assured whatever our government, they will stand ready to back whatever eventuates, only a little encumbered by chrysotile asbestos in the mist and arsenic amongst the nickel.
Bendigo Mining was courted by Harmony of South Africa who walked away after due diligence. Investors should have taken note there too, the company then raised 90 million locally to build a milling facility but shut everything down almost immediately and went off to Tasmania as Unity Mining. With the help of Macquarie Bank they took over the nearly defunct Beaconsfield mine, still possessed of a good but problematic resource. One more disaster and on a long shot they took over the Henty gold operation. This was not a good bet either as Barrick’s geologists had seen fit to walk away but to everyone’s surprise it came good again for a little while. Did investors ever receive a dividend along the line? I didn’t notice having lost interest in the management or their projects after my own losses with them on the mainland. And they had only been a few clicks away from Fosterville, the latest and biggest gold mining news in the world.
While investors are the last in the line of ‘stakeholders’ to ever see a return, the state government is the biggest bunny; committed to funding 40% of exploration costs. This is supposed to be a royalty tax holiday but without any successful mining outcomes it’s really just a cash subsidy. Costs include the salaries of company employees and principals – the CEO alone will be on something between 200 thou into seven figures for any little podunk company with a market cap. of a few million. And the odds of an explorer transforming successfully to a mining company are a longshot of 100 to 1. That is not a made-up number and with dilution and other capital raisings, executive bonuses, options and salaries the horrendous ‘burn rate’ of raised capital mean a share investor is looking at a tenfold capital gain at best. The horses and pokies are a dead set home run in comparison. And so the boys keep coming with new schemes regardless that the island has been mined out, walked over, magnetized, gravitized and induced dozens of times. And the locals are endlessly eager to find a few months work, extend credit or recoup previous losses. But it leaves a residue of hard feelings.
The Tullanese will always blame Scott Jordan for the loss of the Venture Minerals bonanza – his article is in the TT archives at
People in the industry know that when somebody begins mining without delineating a resource it means they have no plan, no money, no credibility to raise real capital and the chance of a snowflake in hell. Golden Triangle in Burnie was a similar fiasco. The drillers were laughing (sort of) as their rods fell into voids connected to the Flowerdale River which didn’t augur well for the open pit. While mining giant Normandy and partner Ford Australia were struggling to get a similar magnesium mine and smelter project up and running in Gladstone, Peter Salter flew off on a last minute global junket to supposedly raise a billion dollars then drifted away to be expelled from the board of some mainland gold mining company while Paul Lennon went off to spruik other disasters. And so the locals are left high and dry, forever burning with the rage of the dispossessed, handily directed away from the actual perpetrators.
So maybe we’re for a change one day, thinking of those golden years at good old Harvey Johnston High. And Celia Fletcher god was she stacked. But she’ll be a waddling old granny now under a different name which is OK, because she was never going to be mine anyway at mottled and scrawny sixteen.
EARLIER on George Smiley’s blog …
*George Smiley is a sometime wannabe author, artist, jack of all trades and master of a couple. Retired and living on a block with sheep, orchard and a workshop, dabbling in alternative energy and occasional updates to his georgesmileyblog and georgesmileyart blog