Category Archives: Resources

Undercover Operatives: Inadequate Lighting and the Mineral Discovery Landscape in Australia

Underneath the lamplight... How do we re-frame the process of scientific enquiry (and in particular, mineral exploration) to focus on the areas of greatest potential discovery, rather than the easiest places to look?

Underneath the lamplight…
How do we re-frame the process of scientific enquiry (and in particular, mineral exploration) to focus on the areas of greatest potential discovery, rather than the easiest places to look?

A policeman walking the beat on a dark night sees a man down on his hands and knees searching for something under a streetlight.

“Excuse me sir,” he says – helpful servant of the public that he is “what seems to be the problem?”

“Hello oshi…offi…officer,” replies the man – obviously a little the worse for a night of drinking – “I…I appear to have lost my keys”

The kind-hearted policeman lends a hand, and the two spend a few minutes scouring the ground to no effect, before the policeman asks “Are you sure this is where you lost them?”

“Nonono” replies the drunk “Didn’t lost them here oshifer – I lost them across the road.”

“Then why are you looking here?”

“The light’s better.”

Ba-doom tssch, as my daughter would say – echoing the classic cabaret drum-and-cymbals punctuation to an obvious punchline.

Forms of this particular parable though – variously termed ‘the streetlight effect’ or ‘the drunkard’s search’ – have been codified in Social Science theory since at least the 1960s, and there is at least one version circulating on the web as a thoroughly creditable “Nasreddin story” (a traditional middle eastern form of ‘wise fool’ tale, supposedly based on 13th century populist philosopher Nasreddin Hoca, in which moral or pedagogical points are illuminated with pithy folk wisdom) – pointing to some useful philosophical bones beneath its vaudevillian exterior.

The crux of the tale here is to illustrate the logical trap of focusing our investigative effort in the areas where it is easiest to make observations, rather than those that hold the greatest potential for discovery. This moral holds particular relevance for the business of mineral exploration as the national discussion in Australia turns to how to find the resource wealth that will sustain the industry through the 21st century and beyond.

The fundamental challenge of future mineral exploration is one of simple calculus: the depletion rate of many resources globally – the speed with which industrialised society is extracting existing mineral endowment from the ground to feed the needs of urban development and increasing living standards around the world – is outstripping the rate at which new deposits are being discovered. Addressing this growing problem efficiently calls for diversity in the style and geography of exploration efforts, balancing the potential for mineral discovery against the associated technical and social risks. For all the mineral exploration opportunities to be found in places like Sub-Saharan Africa or Central Asia, for example, the Sovereign risk attendant on their political and economic history mean that it would be a brave (or perhaps foolhardy) company who would invest all their eggs in such a basket – and nominally well-explored but stable jurisdictions such as Australia also have an important part to play in this solution.

Despite the intellectual and social capital invested in the mining industry in this country however, the all-important balance of risk and reward has been seen as tipping away from Australia as an exploration domain of choice in recent years.

Exploration expenditure nationally – the dollars poured into identifying and characterizing mineral deposits – has risen dramatically over the past decade. In part, this just reflects the expected upswing of a periodic cycle of investment – one more dizzying rise in a bi-polar industrial history of boom and bust stretching back to the earliest days of European colonisation – albeit with highs and lows increasing in magnitude through the latter half of the 20th century. More worryingly, this decade of enhanced spending has not been accompanied by a corresponding rise in discoveries. Quite the reverse – even allowing for a degree of time lag in the full size and value of discoveries being realized, the 10 years to 2010 actually saw fewer mineral discoveries in Australia than any equivalent period over the past 40 years. In real terms, it follows that the cost of discoveries has risen sharply – squeezed in a pincer of increased outlay and decreased success rates (Fig. 1).

Five year rolling average of Australian mineral resource discovery costs, 1975-2010 – excluding bulk minerals. Reproduced from compilation graph presented by Richard Schodde, MinEx Consulting. Costs are normalized to 2009 $AUD. ‘Moderate’ resource size denotes in excess of 100koz Au, 10kt Ni, 100kt Cu equivalent, or 5 kt U3O8. ‘Major’ resource size denotes in excess of 1Moz Au, 100kt Ni, 1Mt Cu equivalent, or 25 kt U3O8. ‘Giant’ resource size denotes in excess of 6Moz Au, 1Mt Ni, 5Mt Cu equivalent, or 125 kt U3O8. Data sourced from ABS and MinEx Consulting, August 2010.

Figure 1: Five year rolling average of Australian mineral resource discovery costs, 1975-2010 – excluding bulk minerals. Reproduced from compilation graph presented by Richard Schodde, MinEx Consulting. Costs are normalized to 2009 $AUD. ‘Moderate’ resource size denotes in excess of 100koz Au, 10kt Ni, 100kt Cu equivalent, or 5 kt U3O8. ‘Major’ resource size denotes in excess of 1Moz Au, 100kt Ni, 1Mt Cu equivalent, or 25 kt U3O8. ‘Giant’ resource size denotes in excess of 6Moz Au, 1Mt Ni, 5Mt Cu equivalent, or 125 kt U3O8. Data sourced from ABS and MinEx Consulting, August 2010.

To some degree, these statistics may be skewed by the lack of game-changing ‘Super Giant’ discoveries in the country over this period – the Olympic Dam and Mt Isa systems of the geological world, whose massive scale and rich grades of mineralisation place them in world-leading positions. Such spectacular concentrations of mineral endowment are surpassingly rare, but their concentrated bulk can so dominate the resource landscape that they account for a substantial share of the market – and profitability – of the mining industry. Looking in more depth at the results however (Fig. 2), we can see this appeal is misplaced – persistently high relative costs exist across all scales of deposit in Australia, with discoveries in this country significantly more expensive than most other areas of the world over the past decade. Welcome though it might be to the group lucky (or fore-sighted) enough to peg the ground, discovery of another Oyu Tolgoi – the ‘world class’ gold resource currently giving expectant parent Rio Tinto such political and economic labour pains with its troubled birthing process in Mongolia – in the Neoproterozoic rocks of the Paterson orogen would do little to change this fundamental landscape.

Cumulative number and size distribution of primary gold discoveries (excluding satellite deposits) per $US billion spent on exploration, 2001-2010. Figures compiled by MinEX Consulting, November 2011. Reproduced with permission.

Figure 2: Cumulative number and size distribution of primary gold discoveries (excluding satellite deposits) per $US billion spent on exploration, 2001-2010. Figures compiled by MinEX Consulting, November 2011. Reproduced with permission.

This value equation contributes to a pervasive view of exploration maturity in the Australian landscape – a perceived depletion of the residual search space. This has its positive side – such is our knowledge of exposed geological character across this wide brown land that it might reasonably be hoped the mature and well-informed exploration industry would no longer be so credulous as to swallow Harold Bell Lasseter’s fraudulent Depression-era tales of quartz reefs exposed in Australia’s rugged interior, awaiting discovery with their illusory “nuggets as thick as plums in a pudding.”

With this familiarity though, comes a matching degree of contempt – with the industry – or at least the financial markets – increasingly of a view that there are no more Telfer deposits or Kambalda nickel camps sitting around at the surface waiting to be stumbled across. “All the ground” it is said “has been walked” – all the rocks kicked by the boots of keen-eyed prospectors – with much of the formerly energetic Australian exploration industry seeing greater opportunities overseas in less thoroughly examined terrain.

But how valid is this pessimistic outlook? The vast majority of the Australian landscape – up to 80% by some estimates – is essentially un- (or certainly under-) explored for minerals – with the ancient Archean and Proterozoic rocks that have proven so richly endowed around the country masked by extensive blankets of regolith and younger cover sequences that have discouraged previous generations of explorers.

It is not that these covered domains are barren. Indeed, two of the most celebrated exploration successes in the past decade (the Tropicana gold resource and the company-making De Grusa copper discovery – about which, more below) were made under cover – and in areas widely perceived to be over-mature for exploration. The resources exist then…but to make their discovery and exploitation practical on a routine basis, we need a way to lower the risk involved in exploration. For all its heroic resonance, we shouldn’t simply rely on the storied Margaret Hawke effect.

For those unfamiliar with this dramatic masterpiece of recent industrial theatre, back in the winter of 2009 Hawke was a junior exploration geologist at Sandfire Resources. In fact, to give a perhaps more accurate view of the landscape, with her employer – as were so many junior mining companies at the time – savaged by the Global Financial Crisis like a child’s toy shaken by a maltreated Pitbull (I won’t quite go the full Shakespearian “Winter of our discontent” route…but times were certainly tough for the industry) Hawke, one of the last 3 employees left on the shrinking company payroll, was pretty close to being the entire exploration team at Sandfire. At the end of an otherwise unsuccessful exploration campaign, and with the company about to up-stakes and leave the field to lick their wounds, she took the bold initiative (some tellings of the tale might describe it as inexperienced presumption – but given the spectacular success of the play, we really have to respect the form of the heroic narrative) of signing off on a final drill hole without the approval of her absent boss. The spectacular copper, gold, and zinc mineralisation intersected in that last roll of the dice literally saved the company.

For every De Grusa jackpot though, there are likely a dozen ‘last rolls of the dice’ (and inexperienced presumptions) where the end result is the brass name plate of another failed small-cap mining company being quietly unscrewed from an office building in West Perth. These tales are less well reported though – with few participants keen to broadcast their failure from the rooftops.

Luck – perhaps not always of the spectacular form enjoyed by Sandfire in 2009 – will inevitably play a role in any discovery, with the true craft of a good explorationist like Hawke being to make sure you’re in the right place and looking in the right direction when your numbers come up. The question then is how do we use our luck more effectively in exploring for mineral systems beneath the blanketing rock?

Tools do exist to peer beneath this cover – an arsenal of geophysical methods to distinguish varying rock characteristics beneath the surface, geochemical approaches to resolve the cryptic fingerprints of a buried mineral system – and these tools have been widely applied across the exploration industry since the middle decades of the 20th century – with some noted success stories. The broad limitations of such techniques to date are made clear, however, in the statistics that show us that 50% of significant Australian mineral discoveries over the past 60 years were less than 15m beneath the surface, and only 10% under more than 200m of covering rock, truly in the realm blind to surface discovery (Fig. 3) – and those largely in the so-called brownfields environment, beneath or in immediate proximity to other known mineral deposits.

Geographical distribution and depth of Australian mineral discoveries –excluding bulk commodities - in relation to estimated cover thickness. Data sourced from MinExConsulting (August 2010) and Geoscience Australia. Reproduced with permission of Richard Schodde, MinEx Consulting.

Figure 3: Geographical distribution and depth of Australian mineral discoveries –excluding bulk commodities – in relation to estimated cover thickness. Data sourced from MinExConsulting (August 2010) and Geoscience Australia. Reproduced with permission of Richard Schodde, MinEx Consulting.

We can illuminate this search space then, but our efforts to date have in essence provided only a fitful firelight that can show us little more than shadows on the walls of the cave.

This limitation is widely appreciated – and extensive geoscience research and exploration targeting efforts have long been directed at improving our resolution and understanding of these faint signals – mindful certainly of the tremendous competitive advantage that any breakthrough may offer.

Instead of focusing on this narrow question of how to better detect mineralisation, however, perhaps we should be turning our attention to the critical decision making involved in targeting our drill rigs and sampling programmes in the first place. Before baiting your hook, after all, it is a good idea to address the question of whether there are any fish around. Or even any water.

This is the philosophy underpinning the Mineral Systems approach to exploration targeting – where rather than the traditional (and, to give its due, previously highly successful) methodology of characterizing an individual mineral deposit and seeking to replicate its discovery, exploration search space is instead defined by application of a rigorous conceptual model of how mineral endowment is concentrated within geological systems – incorporating understanding of the physical and chemical processes of ore fluid generation and metal solution, mobility and deposition across a range of scales. This approach focuses the explorer on mappable expressions of high quality mineralisation at the scale appropriate to the exploration decision – be that global, regional, or local. The process may not by itself identify the telltale signs of mineralisation, but the holistic view enhances the efficiency with which promising targets can be identified – and equally importantly, rapidly rules out search space where the geological fundamentals don’t line up – offering significant efficiencies to the exploration process.

Emeritus Professor David Groves – respected scientific researcher and former President of the Geological Society of Australia – articulates this concept through analogy to real estate. A rational person wouldn’t choose which house to buy on the basis of the bathroom fittings alone. No – the first thing you consider – so early in the piece that it might not usually even be thought of as a conscious choice – is the country you want to buy in. Then the state or city, then the suburb, then maybe even the street. Only at this stage would you concern yourself over which particular property to consider investing in, and it’s individual details and attractions.

It ultimately matters little how palatial the residence and impressive the swimming pool if the house is in rural Tasmania and your primary motivation is actually living close to a good school in Paris.

The power of such a holistic approach is amply demonstrated by the remarkable recent success of the petroleum exploration industry, where this style of systems-based prospectivity analysis was adopted some 30 or more years ago. It may seem hard to credit from a modern computationally intense scientific perspective – but many of the major discoveries made during the pioneering era of 20th Century petroleum exploration (think here of the Elysium fields of Texas, California, and even Saudi Arabia) were in no small part down to boots-on-the-ground prospectors recognising signs of oil and gas seeping out of the geological strata and probing for the source with an exploratory well – “I drink your milkshake”, in the evocative words of robber baron oil tycoon Daniel Plainview (an Oscar winning performance from Daniel Day Lewis) in 2007’s “There Will be Blood”.

In a classic model of needs-driven innovation, saturation coverage of accessible terrain during the later 20th century – the end of the golden age – forced the industry to change – driving exploration deeper, and making it increasingly more technologically focused and expensive to pursue. Today rather than combing the backwoods, Beverly Hillbillies style, for “a-bubbling crude”, serious exploration takes place on the back of comprehensive geological and geophysical evaluation of sedimentary basin histories and predictive modeling of petroleum evolution and migration, carried out to identify prospective search domains and provide the confidence required for the multi-million-dollar investment decision to mobilize a drill rig and sink an exploratory hole.

Okay, no more swaggering heroes and rugged individualists to lionize in cinematic tributes – no-one’s going to remake the 1943 John Wayne vehicle “War of the Wildcats” updated for the modern era as “Co-operative Joint Venture of the Balanced Risk Portfolio Exploration Drillers” any time soon – but the industry as a whole has been incredibly successful in meeting global resource needs over this period of change. And turning a more than tidy profit.

Rather than putting in more streetlamps then, the better solution to the dark frontier of mineral exploration under cover may be to follow the example of the petroleum industry here and think more carefully about where we aim the light sources we already have.

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Dry Humour: Washing down the bitter pill of water security

Water, water every where

Nor any drop to drink

“The Rime of the Ancient Mariner” – Samuel Taylor Coleridge

Have you ever drunk fresh water? I mean truly pristine – untouched by the biological footprint of others.

Perhaps. I guess you could do it if you are a technophile with a hydrogen fuel cell in the back garden that you tap to make your morning coffee. The rest of us live in a gloriously messy organic world where water is continually cycled and recycled through biological processes.

The reservoirs and dams that supply our cities are not hermetically sealed plastic tanks – but lakes and rivers with living, functioning ecosystems of microbes, invertebrates, fish, birds – and all that goes along with that.

And more.

When you press flush, I know it’s good to imagine that the contents of the bowl are vaporized or spirited away – lord knows I’ve experienced plumbing emergencies where I’ve wished I could have magically made the returning materials vanish by clicking my heels and saying ‘there’s no place like home’. No such luck – our effluvia may vanish from sight, but they remain an issue to be dealt with – and ultimately return to the environment. And the waterways.

“Because it went into a river,” says Australian National Water Commissioner Chris Davis speaking in the Sydney Morning Herald “people conveniently forget where it started and no one really seems to mind”

This mental dissociation of our water supplies from nature is not a new phenomenon – the brilliantly witty, if alcoholically challenged, W. C. Fields knew he was mining a rich vein of societal insecurity when he quipped: “I never drink water; fish fuck in it”

Mmmm...cool refreshing water. Wait a minute, has this had fish in it?

Mmmm…cool refreshing water. Wait a minute, has this had fish in it?

When I was growing up, the idea of buying a bottle with nothing in it but water would have been laughable – to be written off as a modernistic retelling of The Emperor’s New Clothes, or an undergraduate performance art project attempting a subversively ironic comment on consumer society. Today, PET bottles of cool clear water are a ubiquitous element of our cultural landscape – from the supermarket to the multiplex, and all stops in between.

In 2008, Australians consumed approximately 600 million litres of bottled water, spending over $500 million for the privilege, and accounting for the use of an even million barrels of oil in the manufacture, storage, transport, and refrigeration of all those – for the most part disposable – bottles.

This displays something of a curious disconnection with circumstance in a country where clean healthy water supplies piped to the home are a government mandated right. Indeed, a substantial proportion of the bottled water industry in this country consists of multinational corporations bottling our municipal water supply and selling it back to us at a massive premium. Seriously, stand up and take a bow, Coke and Pepsi – your marketing genius at the very least should be applauded.

At least we aren’t alone in this fixation. Zong Qinghou, one of the richest men in the economic powerhouse that is modern China owes his fortune to bottled water. His brand name – ‘Wahaha’ – even sounds like the maniacal laugh of a Bond villain. In light of the debated environmental footprint of the industry, either the man has an admirable appreciation of dramatic irony, or he needs to seriously look at whoever handles his global brand management.

Even out of a heat sealed plastic bottle though, to pretend that what you are drinking is untouched by the complexities of leaking, pumping, squelching biology would be laughable were it not so pervasive a force.

The recycling of water has been brought close to home in public debate recently with the news that Western Australia will soon become the first state in the country to put post-human recycled water into our drinking water supplies, not haphazardly by gradual percolation and leakage, or indirectly through release into the oceans and rivers, but directly, deliberately, and after comprehensive physical and chemical processing to render it safe and potable.

Journalistically, the Murdoch-dominated national press has largely taken a negative editorial stance on this issue. Whenever recycled potable water stories come up in The Australian or The Sunday Times, the term consistently used to describe the water is ‘recycled sewage’ conjuring images of turbid brown water and sulfurous odours. The ‘yuck factor’.

Learning from recent public policy failures in this area in the eastern states, however, the Liberal government are short-circuiting the ability of the popular press to agitate against the policy (and, not coincidentally, engender debate and boost newspaper sales), ruling out public consultation and pushing ahead on the basis of drought-proofing the state. After the success of a three-year trial in which waste water was treated to Australian drinking water standards and injected into an isolated suburban aquifer without incident, the government is signing off on a plan to recharge Perth’s groundwater systems with up to 35 billion litres of treated sewage per year – enough to supply the current needs of around 140,000 households.

Such initiatives look set to become a core element of future water security plans around the nation in coming years, with the Australian Federal Government providing $20 million of funding to prime the pumps, as it were, of the Australian Water Recycling Centre of Excellence.

Underlying such strategies and the massive engineering feats they entail at the State level are the findings of the Western Australian Government’s ‘Water Forever’ report into long term sustainability of potable water. In the face of a trinity of declining rainfall, decreasing groundwater yields, and increasing population, this study forecast an annual deficit of 120 Gigalitres by 2030, blowing out to a massive 265 Gigalitres by 2060.

Looking at those figures, you either bury your head in the sand (and hope it’s the free-flowing, well sorted, highly permeable sand of a previously untapped aquifer), or you face up to the reality that the water we use so liberally actually has to come from somewhere – and if Premier Colin Barnett’s earlier and much slated vision (to call it a pipe dream is really too cheap a metaphorical shot to even bother with) of a canal to carry water down from the Kimberley region in the more hydraulically endowed north of the state is a non-starter, there are only so many other options.

Desalination? Highly energy intensive unfortunately – and what do we do with all the extremely saline brines produced? All that salt still has to go somewhere, after all. What’s that you say? The Perth Desalination plant uses green energy? Hmmm…only if you believe accounting can save the world. Although the Western Australia Water Corporation proudly trumpets electricity for the plant being generated by the Emu Downs Wind Farm in the state’s Midwest, the relationship is really only an indirect one of power use offsetting – with the Kwinana plant actually plugged directly into the State grid to guarantee base load supply. Kind of what you’d want for a critical piece of infrastructure, to be fair – but not the clean green closed circuit you might expect from Water Corporation press kits. More desalination would inevitably mean an increased load on the power infrastructure of the state already stressed by industrial and population growth forecasts.

What about the old standby of co-opting natural systems to supply our cities? Again, regrettably that well is already dry – with the state Economic Regulation Authority recognising that all divertable surface water resources in the Perth region had been tapped by 2004, and groundwater production by some estimates already exceeds long term recharge capacity.

So what are our options outside the planned water recycling scheme?

Curiously, the simplest solution – to my mind the obvious one – of reducing water use and increasing efficiency struggles to gain traction in this debate. This principle of moderation is, to give the Water Corporation their due, one of the planks in their vision of water security, but seems to resonate with no-one…possibly because it touches the hot button issue of asking us to as a society exert some self control and pull our heads in, instead of catering to rapacious consumer desire like an insecure step-parent trying to buy our affection ahead of a family court hearing.

Fundamentally Australia is not actually that short of water.

We just do stupid things with it.

The worrying shortfalls forecast in the ‘Water Forever’ report assume business as usual…with Australians using an average of 70,000 litres of water per person annually – the highest consumption of any nation on Earth. Hang on to that idea for a second and swirl it around the bowl one more time – we Australians, with a national psyche rooted in sunburnt desert landscapes and an inveterate fondness for trumpeting our credentials as occupants of the driest inhabited continent on Earth, piss away (literally and figuratively) more of this precious resource than anybody else on the planet.

It’s not too hard to see where a lot of that water goes. For anyone not familiar with the lovely city of Perth (for which, I should add, that annual consumption figure climbs to a jaw-dropping 106 kilolitres per person), the metropolitan area includes a lot more verdant green lawn and swimming pools than you might expect for a dry Mediterranean climate.

In essence, we still suffer the cultural hangover of trying to recreate an English idyll in a landscape singularly unsuited to it – and it would be career suicide for a politician of any stripe to suggest cutting back on any of the well watered sports fields that dot the suburbs.

Lawn sprinklers keeping Perth's verdant green municipal carpet healthy all year round - really the best use of our limited resources?

Lawn sprinklers keeping Perth’s verdant green municipal carpet healthy all year round – really the best use of our limited resources?

If we reduce this over-consumption to a more moderate level though – say the Dutch average of 55,000 litres per person – or better yet the French 40,000 – the problem goes away for the forseeable future. Okay, for anyone who’s ever been in the Paris metro when the wind is blowing the wrong direction, there are still some potential downsides to that scenario – but we’re not talking about converting to the lifestyle of Bedouin nomads here.

At the end of the day, there really is no such thing as a free lunch – even if, like a catwalk model going through a period of low self esteem, all you order is water. With a Malthusian resource ceiling looming, current trends of water consumption in Australia – profligate Western Australia in particular – clearly cannot continue into the future. All that remains is for us to decide which version of our medicine is the least bitter.

At a fundamental level the range of solutions to this resource ‘crisis’ are probably no different to those of any of the other maladies of over consumption afflicting our society in the 21st century. We can take the engineering pathway – working more overtime to pay for the diet pills and exercise machines we know we’ll never really use properly…or we can just collectively put down the cake fork and get off the couch.

Gold in the Custard – Hidden Elephants and the Art of Mineral Exploration

Why do elephants paint their feet yellow?

So they can hide upside down in the custard.

Although I confess a fondness for such absurdist humour, even I have to admit that this joke is pretty much pitched at a level such that only someone under the age of six could truly enjoy it for its comedic value. If you will indulge me though, it does possess a kind of simple beauty that can serve to illustrate a useful concept for us. The image of someone failing to recognize an elephant in their custard is both vivid, and clearly ludicrous – painted feet or not. But hold on there a second – let’s pursue that particular surrealist idea down the rabbit hole to see how deep it goes. What if, perchance, you’d been warned about those devious pachyderms and their propensity for hiding on the dessert cart, and you were so busy checking for them that you were trampled to death by a wildebeest that had camouflaged itself behind the rhubarb?

Consider the process of mineral exploration. There are very few parts of the world where you can genuinely be the first person to explore the landscape and assess its potential mineral endowment. Others have almost invariably been there before you, evaluated the economic potential of the geology, and moved on. The art of exploration then is to find things that others have overlooked – or perhaps not even known how to look for. To look at the landscape in a different way.

The discovery of the rich Telfer mine in northern Australia presents a salient example here.

Telfer’s mineral endowment is hosted in ancient sediments folded into a series of elongated domes, the strata dipping away in all directions. Structures like this are sometimes referred to as dolphin-backs for their resemblance to one of our cetacean friends breaking the surface of the water – an apt metaphor here given the whale-like size of the mineral resource. Although also host to significant copper and appreciable silver, it’s gold for which Telfer is best known – and in respect of that commodity the deposit is truly world class, with around 10 million ounces of gold produced to date and another 20 million in the ground in the currently defined resource. Surely a jewel in any portfolio, and one of the most productive mines in Australia throughout the past 25 years.

Aerial oblique view of the Telfer Dome in 1976, prior to the start of major excavations of the deposit. Image is drawn from the archives of Newcrest Mining Limited, and was published in Ferguson et al. (2005) - 'Mineral Occurrences and Exploration Potential of the Paterson Area' - Report 97 of the GSWA.

Aerial oblique view of the Telfer Dome in 1976, prior to the start of major excavations of the deposit. Image is drawn from the archives of Newcrest Mining Limited, and was published in Ferguson et al. (2005) – ‘Mineral Occurrences and Exploration Potential of the Paterson Area’ – Report 97 of the GSWA.

By official reckoning though, at least three resource companies evaluated the Telfer deposit and walked away before Newmont Australia made the call and pegged it. How could they have missed this opportunity?

Therein lies the tale.

As with many major finds from the glory days of trail-blazing back country prospectors, the details of Telfer’s discovery have always been a little murky, and remain vigorously argued in some quarters up to the present day. What is not in debate, however, is that the first non-indigenous explorer to recognise the dome and consider its mineral potential was a Frenchman named Jean-Paul Turcaud, back in 1971.

Turcaud, had he but realised, was probably nine tenths of the way to what surely would have been a discovery of epic scale for an independent prospector, and rendered him an Australian legend, perhaps even a fitting subject for a heroic movie. Hollywood producers would have loved the story of a pioneering iconoclast who single-handedly opened up a whole new mineral province. Of course, they would have tried to make the main character American, and given him a wise-cracking but essentially lovable sidekick – but if the Turcaud of our alternate reality – his ‘Sliding Doors’ moment having gone the other way – balked at these narrative improvements, he could just have financed the film himself.

Turcaud recognised the spectacular folded form of Telfer’s dome structures, and appreciated the potential influence of such geological architecture on the concentration of ore minerals. He sampled the gossans – weathered remnants of mineralised veins – that ringed the amphitheatre of the main dome – including the spectacular 10m thick horizon that later became the economic heart of the Telfer mine – and then he took his observations (and his samples) to the major mining companies acting in Australia at the time, a couple of whom – Western Mining Corporation and Anglo American – were interested enough to come up into the remote country, inland from Port Hedland in the far north of Western Australia, with the field-hardened Frenchman and look over the ground for themselves.

But they all passed on the opportunity. They literally walked the ground over one of the largest gold deposits ever discovered in this country – a deposit already broken open by erosion and exposed at the surface like an earthworm popping up at a convention of hungry sparrows. They sampled the major ore-bearing horizons, had them assayed for their mineral content…and then walked away saying “not for me thanks Jean-Paul”. Why?

Because they forgot about the possibility of the wildebeest in the rhubarb.

Neither Turcaud nor – perhaps more indictably – the corporate geologists he took to the prospect, checked their samples for gold. Seriously.

Turcaud viewed the rich potential of the ground at Telfer with blinkers on, intellectually weighed down by a restrictive exploration model focused around base metals – copper, nickel, zinc, lead – the mineral darlings of the age, driving an exploration boom in Australia in the early 1970s. He was assuredly an excellent prospector – rugged, driven, and with enough understanding to appreciate the potential of good ground when he saw it. But he wasn’t a scientist, and lacked the curiosity and depth of knowledge that might have allowed him to make a leap of insight and realise that he was, quite literally, standing on a gold mine.

To be charitable, this might not be such an obvious failure as it seems at first viewing. Although there is significant coarse gold in the oxidised surface layers of the deposit, most of the gold at Telfer is so fine grained as to be invisible to the naked eye, and locked up inside sulphide minerals – principally pyrite. A real trick for young players then – the gold is IN the fools gold.

Never the less, it does represent an epic failure of imagination – pretty much the geological equivalent of checking your boots for scorpions and then being bitten on the toe by a red back spider. Any exploration geologist worth their salt could have picked up the presence of the coarse gold in 10 minutes by panning the streams dissecting the dome. And should have done if they had even contemplated the possibility.

So just how much gold was there?

Well, the question isn’t quite as simple as that – it’s not just a case arriving in the Great Sandy Desert with an armoured car and loading it up with bullion. Mining is an industrial process – in both its scale and its essential form. First and foremost, you need the capability of moving massive quantities of rock. Even at the appreciable grades touching 10g of gold per tonne they were taking off at Telfer in the first year of operations, you’re still talking about almost 3 tonnes of rock for every ounce of gold – and that’s just the ore. On top of that there’s all the overburden you need to strip off to get to that paydirt. So you’re talking about putting in serious infrastructure – roads or rail lines to move material and people in and out, accommodation for a workforce, water – and waste water treatment facilities – crushing plants and treatment mills to extract the minerals, and tailings dams to hold the processing waste.

When the money men who make such decisions green-light the massive investment spend on this kind of a project, it’s usually based on some serious forward planning around recovering costs and moving into nett profitability over the course of many years to decades. Once they broke ground at Telfer, Newmont Australia made back their capital costs within 10 months…at a gold price averaging around $US90 per ounce. Yes, there’s not a zero missing there. Looking from the perspective of gold currently fetching somewhere north of $US1600 an ounce, you get an idea of just what a rich prize this deposit was.

We’re not done yet though – the true beauty of Telfer as a cautionary tale is that it also provides us with an act 2 – an example of scientific exploration done the right way.

Having located their whale, Newmont pursued the logical follow up questions with vigour – where has all this gold come from? And how do we find some more?

One of the earliest major targets they identified was a granite body just beneath the surface, a few km to the south of Telfer. Gold mineralisation is commonly associated with intrusive rocks in one way or another, so the recognition of this granite in their geophysical surveys piqued the interest of the company’s exploration team – could this be the goose that had laid Telfer’s golden egg?

Well, no, unfortunately that particular idea didn’t work out. Not only is the granite very low in contained gold – too low to produce a significant ore deposit – it is also younger than the mineralised veins at Telfer, so there is no way it could have been involved in their development.

The morally uplifting kick to the parable though is that when they came up empty on their gold model, Newmont didn’t just pack up their drill stems and go home. No – they scanned the horizon to see what other beasts could be lurking on the dessert table, assaying their samples for a broad range of elements that might be carried by granitic magma. And lo and behold, it turned out they had drilled into one of the world’s largest tungsten deposits – a deposit now looking all the more strategically attractive for being one of the few major sources of this industrially important element outside Chinese control.

Turns out that even when you’re absolutely sure there are no scorpions in your boots, it might just pay to give them an extra shake.

Statement of interest – My position at the University of Western Australia is funded by a research contract with Newcrest Mining Limited, the current owners of the Telfer deposit.

Rosetta Stones and Rugged Men

The Rosetta Stone - prize exhibit of the British Museum...and extended scientific metaphor.

The Rosetta Stone – prize exhibit of the British Museum…and extended scientific metaphor.

There are all kinds of arguments to be made about the imperial history that saw Britain amass the huge treasure trove housed in the British Museum, and whether ‘finders keepers’ should actually be a valid point of international law. Unarguably though, this collection is one of the most glorious and inspiring concentrations of culturally significant historical artifacts in the world. And amongst all this splendour, the most visited antiquity is not some golden treasure or grand architectural marvel – but a simple carved slab of rock – the Rosetta Stone.

This artifact has been displayed behind protective glass since 2000, but when I first visited the museum in the simpler (or perhaps more naive) days of the previous century, the stone was tantalisingly exposed to the world, lying in a steel cradle where I could have reached out to gently touch its ancient surface, had I been so inclined.

The stone itself is a slab of dark, fairly fine-grained granodiorite, a broken fragment of a previously larger tablet inscribed with a decree issued by Ptolemy V in 196 BC, commemorating his ascension to the Egyptian throne. Neither the elegant solidity of the stone though, nor the content of the inscription, explain why this piece is so inspirational and universally recognised.

Instead, the Rosetta Stone has entered our lexicon as the ultimate cypher – the key to breaking the deepest of codes – reviving a dead language.

The Ancient Egyptians were a famously literate society. We’re not talking the mass literacy of the modern world of course, with only around 1% of the population – at a generous estimate – able to read and write. This is a rate put to shame by even modern laggard states like Burkina Faso, where literacy extends to 21.8% of the population – the lowest rate in the world by current UN reckoning. Egypt’s 1% though stand out through the mists of history for having produced, among other milestones in the development of civilization, one of the earliest true traditions of narrative literature, recorded in an array of letters, poems, and commemorative autobiographical texts celebrating the careers of prominent officials. Beyond these temple walls and epic monumental writings of storied fame though, the Egyptians also left a record of the day-to-day function of their highly ordered society – of harvests and recipes, contracts and legal disputes – on papyri and tablets that have withstood the ravages of time in the hot dry climate of the Nile valley and its surrounding deserts to preserve a historical record of the ancient world unique in its depth and completeness.

The important element for our story though is that when first re-discovered by the explorers and enquirers of an enlightened Europe intent on understanding and controlling (and returning to our opening discussion of the British Museum, often exporting) the mysteries of the world, this treasured store of information was locked away – hidden, denied to the hopeful scholars – behind the apparently impenetrable barrier of lost language – with understanding of both hieroglyphic (the famed pictographic writing of Pharonic tombs and Hollywood blockbusters) and the simpler written version of Ancient Egyptian erased by the shifting sands of time.

Where the Rosetta Stone enters the picture is that it’s message of glory and divine rule is inscribed not once, but three times, in three different languages – those two lost Egyptian scripts and, crucially, the very much alive (at least for upper class educated Europeans of the 19th century who had been to the right schools) ancient Greek – for which we can thank the fact that the Ptolemaic Dynasty was actually founded by Macedonian general Ptolemy Soter, who installed himself as ruler of Egypt in the carve-up of Alexander the Great’s empire in 323BC. Even in its broken state (none of the three versions of the inscription is complete), this combination provided a starter kit for the eventual translation of the previously lost Egyptian languages. The Rosetta Stone, in essence, provided a single example of spectacular clarity that made sense of a much larger array of other information, unlocking that vast catalogue of previously indecipherable records.

The concept of a cypher along these lines is not uncommon in observational science. We often look to sites and specimens where relationships or natural processes seem expressed with unusual clarity or simplicity in order to illustrate our ideas or to use as the basis of discussion.

This is certainly not a new idea when it comes to theories regarding the nature of geological systems – indeed, it’s as old as the science of Geology itself. James Hutton – the 18th century Scottish polymath who surely boasts a claim as strong as any to be the intellectual father of this field – didn’t try to explain his ideas on the dynamics of the world by picking up the nearest pebble. On the contrary – he was renowned for taking friends and dignitaries on field trips to view exceptional exposures he had located that seemed to present particularly clear examples of the phenomena he was discussing. His Rosetta Stones.

Even today, we look to such unusual examples where the complexity and vagaries of natural history seem momentarily brushed aside to reveal unambiguous evidence of a physical process in action.

The corollary to the importance of such examples though is the critical question – where should we look for our Rosetta Stones? To give away the ending here, the smart money is on “anywhere and everywhere”…but this measured insight often proves surprisingly difficult to impart. Rather, there is a persistent belief among many in the profession that the importance of an outcrop is (or at least, with a plaintive appeal to cosmic justice, should be) in inverse proportion to the ease with which it can be accessed.

Release a group of Geology students into the wild on a mapping exercise – especially, it should be said, young male students, and their first reaction usually isn’t to sit down and plan an efficient programme of work. It’s to decamp to the highest, most rugged, least accessible area of the field.

At the heart of this challenge lies some pretty fundamental human psychology. We love stories – and whatever we might tell ourselves, we spend much of our lives with an ear half tuned to an internal narrative of how our actions stack up. “I had to ford the river in spate, vanquish the dragon, then climb to the highest room in the tallest tower” is simply more appealing than “well, I just poked about under the bush and there it was.”

Which leads me to the rugged man maxim – an empirical law derived from observation of generations of young Earth Science students in action. In its purest form, this represents a belief that the most important outcrop in a district – the most informative, the most significant to unravelling the ambiguous twists and turns of geological history – will be found at its pole of inaccessibility: the hardest point to reach.

Besides giving rise to a host of sore and sun-burnt students though, does the Rugged Man Maxim stack up when it comes to results? All those trips I took as field trip leader to Andalucian Accident and Emergency departments trying to help testosterone-fuelled young men explain in broken Spanish just where the thorns were lodged – were they actually associated with greater understanding on the part of the bandaged apprentice geologists, and higher marks in their mapping projects?

I think we all already know the answer to that question.

Certainly, physically and logistically challenging fieldwork can produce results of great significance and enrich our understanding of fundamental questions. But the importance of a locality does not derive from its accessibility or spectacular grandeur – it is incidental to it.

The Burgess Shale was discovered in 1909 by paleontologist Charles Dolittle Walcott in a remote mountain pass, high in the Canadian Rockies. The exquisitely preserved 505 million year old fossils extracted from this spectacular wilderness setting – as far from the Madding Crowd as you could hope to find yourself – provided a new window on life in the ancient Cambrian oceans – a Rosetta Stone that changed and enhanced our understanding of a host of other, less complete and more poorly preserved fossil fauna.

At the other end of the scale, you can get to the La Brea Tar Pits in urban Los Angeles on the Metro Rail – but that doesn’t stop the Pleistocene fossil fauna preserved in the tar being any less inspiring and scientifically significant in its own way, as the best known and most exquisitely preserved record of the extinct mammalian megafauna of North America.

Neither methodical and thorough investigation nor boundless investment are guarantees of significant discovery, and equally, sometimes it really is simply enough to be in the right place at the right time – as in 1928 when William P. “Punch” Jones and his father were playing horseshoes in Peterstown, West Virginia, and happened to turn up a 34.48 carat alluvial diamond, the largest such gem found in the United States to date.

Fundamentally, there is no justice in the layout of the world and its geological treasures. The key exposure that will lay clear the mysteries of a study area and lead to a bankable discovery may well sit under a poisonous thorn bush atop the windswept peak of the highest mountain in the district. But it’s just as likely to be right beside the trail where you stopped the 4WD for the night in the shade of a beautiful old acacia tree, so don’t discount your good fortune on those occasions when you do get lucky.

A Rosy View from the Patisserie: Copper Resource Peaks and why they keep failing to materialize

Malleable, relatively stable, and second only to silver in its electrical conductivity, copper is used extensively in electronics, communications, machinery, and plumbing – the cornerstones of western society and industry. Given this significance, it is perhaps not surprising that this metal and its finite reserves often figure prominently in discussion of resource limitations on the horizon of the modern age.

In his April 2012 review of post-global financial crisis metal consumption around the world, Gary Gardner of environmental research organisation the Worldwatch Institute presented a cautionary tale on this score, suggesting:

“…a potential future global population of 10 billion people could consume 1.7 trillion kilograms of copper total, [which is] greater than the estimated global in-ground stocks of 1.6 trillion kilograms.”

While certainly arresting in its implications, warnings such as Gardner’s are hardly new. Environmental analyst Lester Brown suggested in 2007 that “Based on reasonable extrapolation of 2% growth in demand per year, copper might run out within 25 years”. While Brown’s prominence as an environmental advocate might leave him open to accusations of a biased perspective, the same cannot be argued of Megan Clark – who contributed a related headline of her own that same year: “Over the next 25 years, world consumption of copper will exceed all of the copper mined today”. Clark, as then Vice President for Technology at BHP Billiton, and later Chief Executive at the CSIRO – Australia’s peak government scientific research organisation, could certainly not be accused of standing as any sort of apologist for the anti-industrial lobby.

The logic of cautionary warnings on copper consumption is circumstantially compelling. Demand for copper globally is growing – driven in particular by rapid industrialisation in the developing world. Average copper consumption per year in developed countries is around 10 kg/person. In developing countries it is only one fifth of that level. The difference lies not in the extremes of consumerism, but the infrastructure underlying the key lifestyle differences between developed and developing nations. Forget cars and cappucinos – we’re talking washing machines, fridges, mains electricity, and indoor plumbing. For burgeoning urban populations in the developing world to meet these basic elements of a western middle class lifestyle (assuming – and it is an important assumption that we shall return to – that they do so by the same technological route), copper consumption must rise accordingly.

And yet, despite these well-reasoned foundations, predictions of the imminent exhaustion of global copper reserves and an inexorable decline in production have proven wide of the mark time and again. As early as 1924, US geologist and copper mining expert Ira Joralemon was predicting darkly that:

“… the age of electricity and of copper will be short. At the intense rate of production that must come, the copper supply of the world will last hardly a score of years….Our civilization based on electrical power will dwindle and die.”

World markets today though – for all the rising demand – are not decrying a shortage of this strategic metal. Prices over the opening years of the 21st century have not rocketed skyward as nations and industries compete for declining stocks. Quite the reverse.

In 1980, economist Julian Simon made a widely publicised wager with Paul Ehrlich, author of the influential environmental essay “Population Bomb”. In this bet, Ehrlich, perhaps channelling the catastrophist spirit of 18th century English scholar Thomas Malthus, backed the price of a package of industrially important metals – copper, chromium, nickel, tin and tungsten – to rise over the following ten years because of increasing population pressures depleting resources. Simon, holding the other side of the wager, predicted that the price of the metals would instead decline, because any imminent resource scarcity would spur greater innovation, leading to the discovery of new sources and technologies to increase the efficiency of supply. Ehrlich famously lost the bet, with prices on all five metals falling in constant 1980 dollar terms – and indeed, for three of the five in absolute (unadjusted) dollar terms.

What’s going on? Global population increased over the ten years to 1990, as did urbanisation, and per capita consumption of these industrially sensitive metals. How were we able to swim against the tide of supply and demand like this?

We didn’t. Fundamentally, while metal demand has been increasing throughout the late 20th and early 21st centuries, supply has increased even more to tip the economic scales back the other way. As you can see here, even as global demand and production have ramped up over the past 50 or so years, estimated stocks of copper – measured as the number of years declared and proven reserves will last at current rates of use – have remained more or less constant.

Ratio of global declared copper reserves to rate of production over the years 1900-2010. This ratio provides a measure of the number of years of supply remaining at current rates of use. Figure produced by MinEx consulting from production data sourced from the United States Geological Survey, and reserve data calculated by MinEx.

Some of the additional reserves come down to increased exploration – deeper, further, by more efficient techniques, and in new regions – locating new ore bodies. A far greater source of additional resource however comes from changing commodity prices and more efficient mining and processing techniques quite literally inflating the size of existing deposits. Alchemy? No – to put it simply, what is ore? Ore is mineralised rock from which the resource content can be economically extracted. The key here is ‘economically’. If the value of the resource changes – the price goes up or the cost of producing it falls – so does the definition of what constitutes ore, which is effectively what someone will go to the trouble of digging up and processing to make it available to the market. And there is more low-grade material out there than high-grade. A lot more. As we see in this figure – again compiled by MinEx consulting – decrease your copper resource grade cut-off by a factor of 2 and you typically increase reserves of the metal on the order of 10-fold.

Variation in estimated resource tonnage (in millions of tonnes of contained metal) with cut-off grade for 48 copper deposits around the world. As the boundary of what is economically viable to extract falls, so the volume of rock qualifying as ore and the corresponding tonnage of the resource increase. Graph produced by MinEx consulting, March 2010.

So are we to be saved by the glories of economics? Will a virtuous circle of supply, demand, and value keep us in a red blush of coppery happiness indefinitely?

Well, in the words of US Economist Kenneth Boulding, “Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.”

When you dig a little bit deeper (metaphorically speaking), the primary limiting factor in this equation is not actually the availability of copper itself. If we chose to, we could go on extracting the stuff for centuries to come without pausing for breath, pulling ever lower grades from ever larger holes in the ground. Rather, the issue is externalities – a useful economic parameter describing costs incurred by someone who did not agree to the causative action, and not transmitted through prices.

Fundamentally, copper mining is of direct benefit to the miner – who makes money from the process – and to the purchaser of the metal, who gets a raw material supplied to meet their needs. A much wider segment of society though experience detrimental effects as a result of the mining that, while typically not formally costed in the economic transaction, are still very real and can accumulate to significant effect.

Copper for example – as with any mined resource – incurs a significant ecological footprint, amounting to some 35-45,000 litres of water and 15-30 GJ of energy used and 3-6 tonnes of CO2 emitted per tonne of metal produced at current grades. In Chile – admittedly a country with a mining-intensive economy – copper alone accounts for 11% of total national energy use – 32% of electricty use and 6% of all fuels – and the government was forced to call for water use efficiency pacts with copper mining companies during national shortages in 2009.

Increased scale or intensity of mining under such conditions imposes a cost on all of society, in the form of price rises and shortages of other key commodities. Societal tolerance of these costs is not infinite – miners cannot simply keep digging ever deeper (literally, this time) and expect the society in which they operate to accept the externalities arising as a consequence.

In his book ‘Collapse’, Jared Diamond writes eloquently of a host of civilisations throughout human history that have grown, prospered, and then hit a wall of resource limitation that has brought them crashing to the ground.

With this sort of history in mind, Paul Ehrlich – never one to go quietly, it must be said – wryly opined after losing his famous wager “The bet doesn’t mean anything. Julian Simon is like the guy who jumps off the Empire State Building and says how great things are going so far as he passes the 10th floor.”

So yes, resource limitations may indeed yet come back to bite us as societal tolerance of mining is exhausted.

What would be the consequences then if this were to happen – if something like copper were to become a resource deficit for our society? For a resource limit to move from inconvenient to truly devastating, that resource must be more than desirable, it must be irreplaceable and core to social function. The critical question in our case thus becomes: if we do run out of copper, what are the implications of this for our society? As already discussed, we love this soft red metal for a host of reasons. Is it truly irreplaceable for any of these manifold uses though?

The stability and conductivity of copper make it ideal for use in electrical wiring – but not uniquely so. Even leaving aside the superior gold and silver on cost grounds, humble aluminium is an able, albeit slightly more brittle, substitute – and has proven eminently suitable for cabling and wiring applications. The malleability and low reactivity of copper make it ideal for use in pipes and plumbing – but again, not uniquely so – with plastic pipes every bit as effective – in some applications even more so. Indeed, in each and every one of the categories dominating our use of this metal, viable alternatives exist that could step up to the plate should an existential crisis arise that removed copper from our society tomorrow.

To put this in some kind of perspective – I like croissants. I can’t think of a nicer way to start the weekend than a couple of these delicious pastries and a freshly brewed coffee at my favourite beachside cafe. If they suddenly ran out though – if every French baker the world over were laid low, perchance by some virulent cheese-borne virus engineered by the militant wing of the UK Independence Party – robbing us of these wonderful buttery treats, it wouldn’t be the end of the world. It might not be quite as nice, but I could always have toast with my morning coffee – or even move on to an entirely new resource family and try muesli.

So it is with copper. This metal has many fine properties that have allowed it to make an important and highly valued contribution to the fabric of our industrialised society – but even if a shortage were to develop, viable alternatives exist for all its major uses. They may not always be as effective as copper, and certainly no single resource stands out as able to fill all of the niches that copper is applied to, but nevertheless, there are no yawning gulfs that threaten to bring any of the pillars supporting western society crashing to the ground.