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 Labour 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 highschool 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 Labour future.
The good will 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 Labour 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 Labour? Shane Broad took the question itself and
the answer must have been the complete platitudinous and carefully
constructed Labour 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 Labour 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
with the whole football team out there in their little shorts.
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