Australia’s Silver City to glow once more?

Known either as the Silver City or the Oasis of the West, Broken Hill is the historic epicentre of Australian mining, with a rich history stretching back into the 1840s. The modern town was founded in 1883 by a man who thought he’d discovered tin, but had actually struck upon a silver and lead orebody.

This lucky individual, named Charles Rasp, alongside six of his associates, would found a little known mining company to collectivise their operation, called the Syndicate of Seven.

Today, you likely know that small syndicate by its more modern name, the Broken Hill Proprietary Company – or BHP for short.

That small orebody that Mr Rasp discovered in 1883? Well, it turned out to not just contain a little silver, lead and zinc ore, but to be the largest single source of those resources ever discovered on earth, generating over AU$100 billion in wealth over its lifespan.

Unsurprisingly Broken Hill’s isolated location, 1,100km west of Sydney and surrounded by desert, wasn’t allowed to hinder operations for very long. After all, where there is money to be made, the infrastructure to facilitate it will soon follow.

In 1888, the first train from South Australia arrived on the new narrow gauge railway from South Australia. In these pre-Federation years, the NSW government refused to allow the SA government to build the railway across state borders, so the final 31 kilometres of the journey was taken on a private operation, called the Silverton Tramway. As the name suggests, this railway was originally designed to service the nearby town of Silverton. However, Broken Hill’s meteoric expansion had eclipsed its neighbour in just a few short years.

Today, Broken Hill is easily accessible for both visitors and companies not just by rail, but also by road and air. Similarly, while early attempts at a power grid relied on a diesel power plant completed in 1931 by a conglomerate of all the local miners in the area, the story today is of a much more modern system, with a station that is capable of drawing from the national grid. More modern still is the Broken Hill Solar Plant operated by AGL, which was completed in 2015 and is one of the largest solar plants in the Southern Hemisphere. The area is also home to the 200 MW Silverton Wind Farm Project, which is expected to generate close to 780,000 MWh of renewable energy annually.

A project in the vicinity of Broken Hill that is seeking to leverage the advantages of the established infrastructure and resources in the area, as well as the talented local population, is the Hawsons Iron Project. It is projected to have resources of 330 million tonnes of Iron product, including 111 million tonnes of probable reserves.

Recent reports have described Hawsons as the world’s leading undeveloped high quality iron ore concentrate and pellet feed project. This same prefeasibility study also came to the conclusion that Hawsons was capable of producing a product that would if in production the world’s highest grade iron ore product, at 70% Fe.

Hawsons possesses a number of other competitive advantages as well. The prefeasibility study revealed that the project was capable of producing 10 million tonnes a year, and that the mine had an estimated lifespan of 20 years.

The advantages of the proximity of Broken Hill should not be underestimated either; it is estimated that in comparison to a typical West Australian producer, Hawsons offers an AU$15-20 per tonne processing advantage, based on soft iron ore and its location. Its power costs are likely to be lower as a result too, with the project utilising around A$5-$6 per tonne for total processing power costs. The projects leading position is also due to its geographical advantage, which provides access to power, rail and ports, and gives a lower capital intensity per tonne of production compared to other less well located deposits. The orebody is also homogeneous and is contained in very soft rock, which gives a competitive advantage in mining and processing.

In the end, as always, it boils down to numbers. These key features combine to give up to an AU$40 per tonne advantage to those mining in the Broken Hill area when compared to their Western Australian competitors. 

 

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