Monday, 7th November, 2011
By Paula Doran
Bemax Resources is set to double the operations of its mineral sands ventures in the Murray Basin.
The company has major plans for expansion, both at its mineral separation plant in Broken Hill and at the Ginkgo mine, as well as another possible site between Ivanhoe and Balranald.
It has been a strong performance for the company which now has both the Ginkgo and the Snapper mineral sands mines in operation amid unprecedented prices for the commodity.
Bemax operations manager for the Murray Basin, Chris Reynolds, said that after decades in the industry he had never witnessed such high prices which were driven by strong global demand for the company’s four mineral products - rutile, leucoxene, zircon and ilmenite.
“It comes down to the fact that global demand is exceeding supply. I think what happened was a lot of people, particularly in the US, had stockpiles of these products and when the Global Financial Crisis (GFC) hit they started to run all their stockpiles down.”
Industry analysts agree that the GFC and the subsequent recovery has done much to affect the fortunes of companies like Bemax.
Market expert from TZ Minerals International (TZMI), Philip Murphy, said while the sector had largely recovered, there were lingering effects manifesting in constrained supply and increasing prices.
“The next few years can be described as a transitional period for this area, with the depletion of maturing ore bodies and development of new projects,” said Mr Murphy.
He said the global outlook now was setting a completely new pricing regime, where pricing power lies firmly in the hands of suppliers.
“Market conditions are very tight and that’s facilitating a rapid price escalation.”
Mr Reynolds is all too conscious of that fact. “The challenge at the moment is not to get too complacent. What we’re doing now is getting ready for the inevitable time when the price isn’t so inflated.
“Mineral sands markets though don’t tend to be too volatile.”
Looking ahead the company is preparing to clear debt and build up to the estimated $200 million that will likely be spent on the expansion of its mining interests into two new mines should they succeed in the various approval processes.
One of these, the Crayfish site, is just six kilometres from its original mine, Ginkgo.
“We hope to have Crayfish up and running in 2012. It’s what we call a brownfields site in that it is close to existing infrastructure which we can then access.
“The other possibility, half-way between Balranald and Ivanhoe, is the Atlas-Campaspe mine. It’s a greenfields site and we’ll be starting from scratch - power access etcetera.
“In regards to Crayfish and Atlas-Campaspe we are working through the approval process, conceptual design and feasibility studies but expect that if all goes well, we will have them operating in 2013 and 2014 respectively,” Mr Reynolds said.
Approval for the new additions to the Bemax stable will inevitably almost double the workforce which now includes 353 contractors and 167 full-time Bemax employees.
“We don’t find it too hard to recruit. We try and do that locally (Mildura and Broken Hill) which seems to work for us. The difficulty we have is trying to find technical staff. But again we try and promote from within and give people a chance to develop professionally.”
Workers live on-site at the Ginkgo camp which services Snapper production. And the story for Bemax there is another feather in the proverbial cap.
“At Ginkgo we’re operating at maximum capacity but there is room to produce a little more using greater efficiencies.
Mr Reynolds said the new mine on the block, the Snapper, commissioned just this year was going well after initial dredging problems.
In Broken Hill, the company’s wishlist includes a new processing plant that will value add to the product capabilities, adding to the Pinnacle’s Road horizon, and no doubt placing Bemax firmly online as one of the city’s quiet achievers.