November 30, 2018 / 8:18 AM / 14 days ago

Exploration drill: Fortescue taps new tech to step up copper hunt across Australia

PORT HEDLAND, Australia (Reuters) - Australian miner Fortescue Metals this week said the latest developments in satellite imagery are helping it scour vast swathes of its own backyard for new deposits, seeking an edge as it jostles with global peers for the next big strike.

The logo of Australia's Fortescue Metals Group (FMG) can be seen on a bulk carrier as it is loaded with iron ore at the coastal town of Port Hedland in Western Australia, November 29, 2018. REUTERS/Melanie Burton

The world’s fourth-largest iron ore miner raised its exploration rights in South Australia by a third this year, data compiled from the state government by McMahon Mining Title Services Pty Ltd and reviewed by Reuters show.

While Fortescue’s principal focus is on iron ore in the resource-rich Pilbara, its increased exploration rights in South Australia add to holdings in New South Wales and Western Australia as it looks to diversify into copper, gold and lithium in competition with larger peers Rio Tinto and BHP Group.

“We have always been active at looking at (mining) tenements...that’s how we’ve managed to get to the position where we are the largest tenement holder in the Pilbara,” Chief Executive Elizabeth Gaines told reporters during a tour of Fortescue facilities in Port Hedland, Western Australia, this week.

In move that illustrates how miners are harnessing big data to improve their prospects of finding the next motherlode, the miner is tapping satellite imagery to more accurately map potential minerals and better target expensive drilling.

“There have been developments in exploration techniques, certainly in the use of satellite imagery and other types of imagery,” Gaines said.

Fortescue, which also has exploration rights in Ecuador, Colombia and Argentina, will spend $100 million on exploration this year, well up from $67 million in 2018. But it’s not alone: Global miners have begun to pump up exploration spending to top up supplies, and BHP, for example, has a $900 million budget for exploration.

BHP said earlier this week that it had found a rich copper and gold deposit 65 kilometers to the southeast of its Olympic Dam copper operations in South Australia.

Meanwhile, in the past 12 months Rio Tinto has boosted its exploration holdings tenfold in the Paterson, a remote area in Western Australia, where Fortescue is the second-largest rights holder.

Fortescue also has 5,300 square kilometers (sqkm) of holdings in the Paterson, 10,000 sqkm in South Australia, and 2,000 sqkm in New South Wales, company and government data show.

The company is also trialing new technologies that it could eventually turn to exploration, such as deploying probes down drill holes that allow for real-time assessment of finds and help it define the richest seams to mine.

It is also spending more on data gathering and analysis.

“We generate a lot of data in the mining industry,” said Gerhard Veldsman executive general manager of the miner’s Pilbara Operations. “We need to start to harness that and turn into information we can use.”

Reporting by Melanie Burton; Editing by Kenneth Maxwell

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