Southland is determined to exploit its vast silica reserves and Nomad Mining is ready and waiting. By ALAN TITCHALL.
Thanks to Solid Energy going down the tubes, Southland’s valuable huge lignite deposits remain in the ground.
While the region boasts over 60 percent of the nation’s in-ground coal resources Venture Southland still holds hope that its coal resources can be mined in the future for large scale operations, including liquid fuels conversion using the Fischer-Tropsch process of gasification technology to produce chemicals such as urea and electrical energy from process heat.
Meantime, it has got very excited about mining another mineral resource in its region – silica.
According to local media reports, potential investors from Asia and the United States have shown an interest in the region after the Foundation for Scientific and Industrial Research (the largest independent research agency in Scandinavia) completed analysis of Southland silica gravel samples and confirmed the presence of high-quality silica deposits in demand by the electronics and solar industries.
Venture Southland general manager of strategic projects Steve Canny says the region has one billion tonnes of high-purity silica. Of this, 350 million tonnes are pebble size and suitable for refining – especially from Southland’s Pebbly Hill, which is halfway between Invercargill and Gore.
Steve also says at least two overseas parties have expressed interest in the resource and the organisation has also fielded “enquiries from a number of other parties as well”.
Digging the deposit out is not a challenge, but smelting it into silicon for computer chips and solar panels would be and, as Steve concedes, investment and development are not going to happen overnight. One challenge for smelter investors would be how to access a commercially viable way to supply electricity to refine the silica and with globally competitive production costs. The aluminium (Tiwai) smelter is a good example of conflicting interest in defining what is ‘affordable’.
In June this year Venture Southland published its ‘Silica Opportunity Profile’ report, which focuses on process technology, market trends, infrastructure, electricity demands, consents, economic impacts and financial viability.
The closest any decent sized silica project has got centered around the big deposit at Pebble Hill, which is currently a forestry area, some 14 years ago. Reports estimated that it would cost up to $6 billion to extract the resource and build a refinery. A group under the name of Amalia Gold Corp drove the venture from South Africa but nothing came of it.
Involved was local Kiwi, and director of Aurum Reef Resources, Tony Baker who introduced Amalia Gold to the Waimumu Stream deposit. The project never got off the ground, and Tony has spent the past 20 years rebuilding a new company you could as easily say rebuilding his Nomad Mining.
Tony says there is gold at Waimumu Stream lying throughout the silica resource and particularly in an identified paleo channel.
“The mine plan is to extract the gold from this feature whilst at the same time opening the slot for cost-effective mining of the silica deposit,” he says.
A career in mining
Tony Baker was encouraged by his grandfather’s example to enter the mining industry and now he is managing director of Nomad Mining with operations at Waimumu near Gore in Southland.
After graduating with an Honours Degree from the Otago School of Mines, he worked in various hard rock mines in Australia, USA and Southern Africa both underground and opencast (including several years in the deep mines on the Witwatersrand).
He also worked on the Penalonga gold belt in eastern Zimbabwe, where he was the reduction officer on a goldmine responsible for pouring 4000 ounces of gold per month, using both gravity and cyanide extraction methods.
After returning to New Zealand and five years with the Ministry of Economic Development Mines Inspectorate, Tony went into private enterprise exploring for alluvial and hard rock gold deposits throughout Otago and Southland.
After locating exceptional gold grades at the Waimumu Stream Deposit, located five kilometres from Gore in Southland, Tony set up an operation mining and then discovered two other resources on hand – decorative quartz aggregate and industrial silica.
“After a thorough scientific analysis of a number of potential gold resources we were fortunate to discover that the host horizon for the gold at Waimumu Stream was actually a world-class deposit in terms of silica purity,” says Tony.
The principal market for his silica at present is for the decorate rock is landscaping and garden scree material both in New Zealand and the eastern seaboard of Australia. As the company grows Tony says the intention is to expand a range of construction products that utilise the pure white characteristic colour of the quartz.
Tony says the company’s high quality silica pebbles can be used in a variety of industrial applications, including polished concrete floors, exposed aggregate driveways and pathways, floor tiles and swimming pools. There is also a growing demand for sand minus 4mm, which is an integral part of certified concrete. This sand also has potential as an integral part of plastering sand or as paint fillers and filter sands, he says.
Will the refinery come?
Meanwhile Tony’s hopes rest on the big refinery investment to supply the world’s hungry refined silicon markets from Waimumu and at a cost as achieved in Asian countries. Silica is a very common mineral and the market is competitive.
With the aluminium smelter at Tiwai Point likely to close within the next 20 years, Tony is hopeful that a poly-silicon refinery could step into the breach, using the power from Manapouri. It would not only save the economy of Southland but would also be providing products for which there would be a strong and economically viable demand, he says.
While there are other areas of Southland where silica is found, Nomad Mining’s deposit at Waimumu is the best bet for a future industry, Tony believes, and he already holds all of the statutory consents.
Steve Canny from Venture Southland told Tony that the economies of scale of a poly-silicon smelter, to be economically viable, would require between 40,000 and 60,000 tonnes per annum of washed, sized and colour-sorted feedstock.
Tony’s Waimumu site is also just five kilometres from the railhead near Gore and has sufficient ore reserves to supply a refinery for 50 years.
With this prospect in mind, the company has already signed a contract for 33 hectares of adjoining land.