Australia's economic demonstrated resources (EDR) for the following 18 mineral commodities increased during 2007 – antimony, bauxite, cobalt, copper, gold, iron ore, manganese ore, ilmenite, rutile, zircon, molybdenum, nickel, rare earths, silver, tungsten, uranium, vanadium and zinc. In the same period, EDR of eight commodities - black coal, cadmium, diamonds (gem and industrial), lead, niobium, phosphate rock, platinum group metals and tantalum decreased. EDR for brown coal, lithium, magnesite, shale oil and tin remained at levels similar to those reported in 2006.
Increases in EDR were due to on-going drilling and evaluation of known deposits resulting in the transfer (re-assessment) of resources from inferred or sub-economic categories into EDR and the discovery of new deposits or extensions of known deposits. Sustained increases in prices for most metal and mineral commodities over recent years has allowed companies to re-assess the economic viability of lower grade resources and deposits which previously were considered to be uneconomic. Overall this has contributed to an increase in EDR for many metal and mineral commodities.
World ranking: Australia's EDR of brown coal, mineral sands (rutile and zircon), nickel, uranium, zinc and lead remain the world's largest, while antimony, bauxite, black coal, copper, gold, iron ore, industrial diamond, ilmenite, lithium, manganese ore, niobium, silver and tantalum rank in the top six worldwide.
Accessible economic demonstrated resources (AEDR): A relatively small number of mineral deposits are inaccessible for mining because of government policies or environmental and land access restrictions which prevent mining. This is the case in particular for some mineral sands and uranium deposits.
Resources and current rates of mine production: Ratios of AEDR to current mine production provide indicative estimates of the resource life. AEDR of most major commodities can sustain current rates of mine production for many decades. While this is the longer term assessment, resource life based on ore reserves is shorter in duration, reflecting a shorter term commercial outlook. Further, rapid increases in production forecast for some major commodities will have marked impacts on resource life unless major new resources are discovered, or there are technological breakthroughs.
Based on AEDR, the resource lives for gold (an average of 24 years at current rates of production), diamonds (about 10 years), platinum group metals (20 years), zinc (28 years), and manganese (31 years) are the lowest. These assessments continue to highlight the need for ongoing successful exploration in the short and medium-term to sustain production of these commodities at current levels.
Mineral exploration: Australian mineral exploration spending in 2007 rose by 41% to $2061.1 million. This increase reflected strong growth in prices for many commodities on the back of anticipated strong and growing demand, particularly from China. It also reflected major increases in the cost of exploration.
Gold remained the predominant single element target in calendar year 2007 with its share of total exploration spending being 24.4% or $502.9 million in the year, an increase of $73 million on 2006. The base metal group attracted the largest spending in 2007 with $702.4 million, an increase of 64.9% or $276.3 million. The growth in base metals was driven by substantial increases in zinc-lead-silver exploration, which rose by $86.7 million to $187.4 million, copper which rose by $86.2 million to $263.7 million and nickel exploration which increased by $103.3 million to $251.2 million. Uranium exploration spending more than doubled in 2007 rising from $80.7 million to $181.4 million. Iron ore exploration rose by $129.4 million to $354.1 million and its share of total spending increased to 17% from 15% in 2006. The growth in iron ore exploration was in response to continuing strong international demand, particularly from China. The only two commodities for which exploration fell in 2007 were coal – down $6.1 million in 2007 to $192.6 million – and diamond – down by $9.4 million to $18.4 million.
The ongoing strong exploration activity saw a very large number of reported intersections of economic grade mineralisation and several new discoveries. Some of the discoveries in 2007 include Spotted Quoll sulphide nickel deposit in Western Australia, and the mineral sands discoveries of Cyclone, Hurricane and Lefroy in the Western Australian portion of Eucla Basin and Dromedary in the South Australian part of Eucla Basin as well as the Atlas deposit in the Murray Basin in New South Wales. In response to world demand there was substantial activity in the iron ore sector with new resources and drilling results released for many smaller deposits and prospects. Similarly uranium exploration surged and the number of new companies with a focus on uranium is likely to ensure spending will continue to grow.
A major review of the highlights of mineral exploration in Australia in 2007 is available in the report Australian Mineral Exploration: A Review of Exploration for the Year 2007 - Extended Edition which can be downloaded free from the Geoscience Australia web site at www.ga.gov.au. Overall, the rate of discovery of significant new mineral deposits continued to fall despite a marked increase in exploration expenditures over recent years.
